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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.

CUs shine with free checking big banks back away

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CHICAGO (8/31/11)--While free checking is an endangered species at most large banks, credit unions continue to shine in this area,
Click to view larger image Click for larger view
beating both big and small banks with their steadfastness to maintaining free checking for members, according to data from a study by a Chicago-based pricing research firm. Today, 78.6% of credit unions offer free checking--more than twice that of large banks with $50 billion or more in assets and more than community banks, says Moebs Services (American Banker Aug. 30). In 2009, roughly 96% of the big banks some form of free checking, although many had attached strings such as high minimum balances. Today, only 34.6% of big banks do. Nearly two-thirds of big banks have eliminated these services by adding fees or changing deposit account terms, said the research firm. Compare that with credit unions. In 2009, said the Moebs research, 85% of credit unions offered free checking. Today 78.6% do. Even smaller community banks are starting to cut their free checking offerings. In 2009, 78% of these banks offered the service; today, 70.8% do--a 7.2-point drop. While they would lose accounts if they started charging fees, the topic is on their board tables for discussion and some have adopted a wait-and-see strategy, according to the article. It notes that for smaller institutions, "charging new fees could be tantamount to suicide." Offering free checking is an opportunity for credit unions to differentiate themselves from large financial institutions, Marcus Schaefer, CEO of Truliant FCU, Winston-Salem, N.C., pointed out in the article. Truliant has no plans to charge for checking. Charging would be a last resort. Moebs Services blames the trend to cut free checking on a 2009 regulation that restricts banks' abilities to charge overdraft fees to help subsidize free checking. Other sources interviewed say banks are trying to offset revenue losses from the Dodd Frank Act's restrictions on debit interchange fees by starting to charge checking fees.

Calif. presents service philosophy and fin ed awards

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ONTARIO, Calif. (8/31/11)--The California and Nevada Credit Union Leagues have announced the California state-level winners in several service, philosophy and financial education awards. First place winners of the Dora Maxwell Social Responsibility Recognition Award are:
* The Golden 1, Sacramento, Calif., $1 billion-plus asset category, for its community shredding event, which destroyed more than 150,000 pounds of confidential information safely and securely. * San Francisco (Calif.) FCU, in the more than $500 million asset category, for its CommunityShare program, which gives back to the community through donations, employee volunteerism and fundraising activities.
The Golden 1 also won first place in its size category in the Louise Herring Philosophy in Action Award for its Lifeline Advance program to help members avoid costly fees associated with the use of pre-paid cards and check-cashing services. First place Desjardins Financial Education Awards went to:
* Educational Employees CU, Fresno, Calif., receiving the Desjardins Youth Financial Education Award in the more than $500 million asset category, for its "Wise Up" financial literacy program; and * Patelco CU, Pleasanton, Calif., receiving the Desjardins Adult Financial Education Award in the more than $500 million asset category for its various programs, including its CU@Work Seminars and community collaboration efforts.
The award winners will compete now in the national credit union recognition programs administered by the Credit Union National Association. For more information, use the links.

CU System briefs (08/30/2011)

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* DULUTH, Ga. (8/31/11)--The Greater Atlanta Credit Union Chapter of Georgia Credit Union Affiliates raised more than $40,000 for Children’s Miracle Network Hospitals at its Ninth Annual Bowl-A-Thon fundraiser in Decatur, Ga. About 200 bowlers and 15 sponsors participated. “Times are really tough in our economy, but we still managed to raise a considerable amount for CMN Hospitals and are so grateful to have so many loyal sponsors and participants to assist us with having another wonderful year,” said Laura Sterling of Atlanta-based Georgia’s Own CU and co-chair of the bowl-a-thon committee. Funds will support trauma services at Children’s Miracle Network Hospitals. Children’s has the only dedicated Pediatric Trauma Center in Georgia. The hospital provides support to more than 23,000 trauma patients each year. Credit unions have partnered with Children's Miracle Network Hospitals through Credit Unions for Kids since 1996 … * SYRACUSE, N.Y. (8/31/11)--Syracuse, N.Y. -based Empower FCU is offering an online course that assists drivers in reducing points and insurance costs. It now offers the New York State six-hour Point & Insurance Reduction Program course online through Empower Associated Services (EAS), a wholly owned subsidiary of the credit union. Completing the course will allow up to a 10% insurance reduction and may remove up to four points from the driving record of the principal operator of a vehicle. The $926 million asset credit union, through EAS, has offered classroom sessions on the topic since October 2007. While the program helps drivers reduce costs and points, "we also want to help them refresh their knowledge of today's vehicle and traffic laws, and pick up some safety tips," said Greg Knight, insurance manager at EAS. The online option allows drivers to take the six-hour course over a 30-calendar day period, said Burt Phillips, president and chief operating officer of EAS … * POUGHKEEPSIE, N.Y. (8/31/11)--As part of Hudson Valley FCU’s HVFCU@Work program, Marist College will offer a 20% discount on tuition for select graduate and adult undergraduate programs to the work program participants. HVFCU@Work is designed to bring the credit union into workplaces throughout the Poughkeepsie, N.Y. area. The program offers benefits for both the business owner and employees, including financial education seminars, on-site membership enrollment, and free insurance quotes. “Our members, especially those businesses that might not be able to afford their own tuition assistance program, can now provide their employees a great opportunity to further their education at a premier local institution,” said HVFCU President/CEO Mary Madden …

SW Bridge Corporate members vote to merge with Ga. Corporate

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DULUTH, Ga. (8/31/11)--The membership of Southwest Bridge Corporate voted overwhelmingly Tuesday to approve the corporate's merger with Georgia Corporate, a consolidation that will create Catalyst Corporate on Sept. 6. More than 98% of voting members approved the merger. The vote came one day after the corporates received approval to merge from the National Credit Union Administration. Tuesday's outcome was "gratifying, but it's no surprise," said Kerry Parker, chairman of the Executive Committee for Southwest Bridge's Member Advisory Council and president/CEO of A+FCU, Austin, Texas. "We have had member input all along the way--from the advisory council planning process to an earlier member vote on the plan, which received approval from 91.3% of the 540 voting credit unions," Parker said. "Most importantly, the membership voted with its capital pledges." The corporates raised about $93 million in capital from 875 members, representing 74% of previous capital shareholders. "The fact that so many credit unions, after completing months of due diligence, chose to capitalize Catalyst Corporate shows that the business model is what credit unions were looking for," said Georgia Corporate Board Chairman Lin Hodges, president/CEO of Associated CU, Norcross, Ga. "Credit unions have confirmed that they believe in a cooperative model, and that they appreciate the importance of scale when choosing a corporate." Georgia Corporate President/CEO Greg Moore said Catalyst's operating efficiencies will make a difference beyond pricing. "It means that we won't have to rely on our balance sheet, and that means less risk." Credit unions have made it known that they want to continue to use the services of a corporate but also reduce their exposure to risk. "Catalyst Corporate represents this low-risk value proposition by minimizing the amount of capital a credit union puts at risk," said Dianne Addington, president/CEO of Southwest Bridge Corporate. Catalyst's model balance sheet is more conservative that what is required by the new Regulation 704, she added. Hodges noted that there should be no problem with today's vote at the Georgia Corporate. Its board "has been actively engaged in the details of this consolidation and has approved each major component of the plan in the past; this final vote ratifies the merger so that it can move forward this weekend." The merger will make Southwest Bridge Corporate the first corporate to come out of bridge status--well in advance of the two-year timeframe established by the NCUA last fall. "We believed it important to act quickly so that we could return to the business of creating value for our members," Addington said. "This merger allows for a strong, efficient, member-driven corporate that will meet the needs of the credit union community--for both our current members and other credit unions that are seeking a corporate home," said Moore.

Illinois chapter leaders play ball at annual conference

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NAPERVILLE, Ill. (8/31/11)--Nearly 80 leaders from 29 chapters of the Illinois Credit Union League (ICUL) attended the state's annual Chapter Leaders Conference, hosted by the league and the Bloomington Chapter of Credit Unions in Normal, Ill. The event ended Friday. Its theme of "Play Ball!" provided an opportunity for attendees to play their strengths and share ideas, events, and promotions.
Illinois Credit Union League President/CEO Dan Plauda urges attendees at the league's annual Chapter Leaders Conference Friday to "play ball" by playing to their strengths and sharing ideas, events and promotions. (Photo provided by the Illinois Credit Union League)
"Chapters are at the core of the Illinois Credit Union System and the movement," said Dan Plauda, ICUL president/CEO, at the conference. "They play such an integral part that we could not accomplish what we do from grassroots political advocacy efforts to fundraising to community relations activities." Jim Karch, director of public works for the City of Bloomington, presented information Friday on team building and strengths-based leadership. The conference closed with awards to winners of the Credit Union Political Action Council's (CUPAC) annual chapter fundraising competition. Winners are:
* First place, Southern Illinois Chapter, with more than $15,083 raised. This marks the 12th time the chapter has won first place in the competition; * Second place, Burnett Chapter, with more than $12,910; * Third place, Kankakee Valley, $11,355; and * Most improved chapter, a new award, Illinois Quad Cities Chapter, which increased its fundraising by 615.14%.
Fifteen chapters also received honorable mentions for raising $1,000 or more for CUPAC, during 2010.

Idaho league to celebrate 75th on Sept. 12

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BOISE, Idaho (8/31/11)--The Idaho Credit Union League celebrates its 75th anniversary on Sept. 12. “This is a momentous milestone in the life of any enterprise, but especially so for our Idaho’s credit union movement,” said league President/CEO Alan Cameron. “With our relatively small population and economy, Idaho’s credit unions have relied upon their tradition of service as the foundation for the success they have enjoyed. “Out of hundreds of credit unions formed by Idahoans since 1935, the 59 credit unions in business today are here because of the good things they have brought to the lives of their members.” Nine credit unions joined together in September 1936 to form the league. Since then, it has evolved from an organization operated by volunteers to a full-service, fully staffed trade association providing assistance and support with regulatory compliance, educational offerings, communications assistance, financial products and service recommendations. The league will host an open house at its office from 10 a.m. to 2 p.m. (MT) on Sept. 12. Formal ceremonies begin at 11 a.m.

CUs back to work in Irenes wake

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MADISON, Wis. (8/31/11)--Credit unions on the East Coast in the Northeast continued Tuesday to recover from the effects of last weekend’s Hurricane and Tropical Storm Irene.
One employee of Green Mountain CU, South Burlington, Vt., was unable to access his home as a result of this road damage caused by flooding. (Photo provided by Green Mountain CU)
While the impact along the coast was limited primarily to power outages, areas of the Northeast experienced flooding. Vermont was among the hardest hit areas. A branch of Vermont State Employees CU (VSECU) located in a state office building in Waterbury, Vt., was closed due to flooding. The branch is inaccessible, according to Terry Fields, VSECU vice president of finance. “We could see the waterline was about six feet high,” Fields said. “We expect to lose an ATM, all of the equipment in the branch, staff personal belongings, pretty much everything.” A former branch used for records retention and training was also flooded, but the damage was limited, Fields told News Now. The credit union was pumping water out of the facility on Tuesday. Although his credit union’s facilities weren’t affected by the flooding, Brian Fogg, president/CEO of Credit Union of Vermont, Rutland, Vt., spent Monday helping one of his employees bail water out of his home. Fogg said one of the credit union’s members was killed in the flooding and several of his employees have been impacted. Some have homes that are flooded, Fogg said. Others can’t reach their homes because of flood waters. “The credit union didn’t get hit, but we all know folks that did,” Fogg said. “This is a small state. We all know each other. Everyone’s just trying to help each other out.” Green Mountain CU, South Burlington, Vt., wasn’t directly impacted by the flooding, but at least one employee can’t reach his home because the road has been washed away, a common occurrence in Vermont this week, according to the credit union’s President/CEO Ginny Fleischman. The National Federation of Community Development Credit Unions has resumed operations at its Lower Manhattan headquarters following Irene. While the federation's offices saw no damage from the storm, some headquarters staff remain unable to commute to New York City from outlying suburbs. All of the federation's field staff in Madison, Wis.; Colorado Springs, Colo.; and San Francisco are working as usual, and most headquarters staff are accessible by e-mail. The federation has been reaching out to member community development credit unions, and while the majority report little or no damage, some have been affected. Renaissance Community Development CU, Somerset, N.J., was without power, phone services, or Internet access Tuesday morning. “We have not been given a time when we can expect these services will be restored," said CEO Shirley Spruill. “As a result we may not be able to answer members on a timely basis." In Vermont, another CDCU, Opportunities CU, Winooski, Vt., reported that its facilities were not directly affected, but many members have been displaced due to flooding. The credit union is already considering using the Housing and Urban Development Title 1 program, which provides 90% loan guarantees for home repairs (up to $7,500 with no collateral and $25,000 with collateral), to assist members, the federation said. In New Jersey, the New Jersey Credit Union League has been calling state credit unions to assess damages. So far, the league, the league has learned only of minor damages and power outages. Scott Teel, marketing director of Agility Recovery, a CUNA Strategic Services provider, said there was less wind damage and debris damage than expected from the Hurricane Irene. His company transported more emergency equipment into areas of anticipated need than were ultimately required. Teel said most recoveries involved telecommunication and power. “We had more members placed on alert than we’ve had in a long time, which means people took it seriously and were prepared,” Teel said. “The good news was a lot of them didn’t need to elevate their status.” Alert status means members are prepared to mobilize assets to disaster recovery status, Teel said.

Georgia CU Affiliates honors Maxwell Desjardins winners

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DULUTH, Ga. (8/31/11)--Georgia Credit Union Affiliates announced its statewide winners of the 2011 Dora Maxwell and Desjardins competitions. Georgia’s 2011 Dora Maxwell Social Responsibility Community Service Award first-place winners include:
* 1st Choice CU, Atlanta, $20 million to $50 million assets; * Credit Union of Atlanta, $50 million to 100 million assets; and * United 1st FCU, St. Mary’s, $100 million to 200 million assets.
DOCO Regional FCU, Albany, was the first-place winner of the Desjardins Youth Financial Education Award in the $50 million to $150 million asset category. Credit Union of Atlanta was the first-place winner of the Desjardins Adult Financial Education Award in the $50 million to $150 million asset category. The state awards pave the way for the first-place winners to compete for the national Credit Union National Association awards.

Michigan New York CUs talk MBLs more with lawmakers

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LANSING, Mich., and ALBANY, N.Y. (8/31/11)--Credit unions in New York and Michigan were busy during the past week, advocating lifting credit unions' member business lending (MBL) cap and discussing other issues with members of Congress, who were back in their districts during the August recess.
Buffalo, N.Y., areas credit unions and the Credit Union Association of New York (CUANY) met with U.S. Rep. Kathleen C. Hochul (D-N.Y.) at her office in Williamsville, N.Y., to discuss credit union issues such as lifting the member business lending cap. Pictured are, from left: William J. Mellin, CUANY president/CEO; Marsha Brauer, Clarence Community & Schools FCU; Edward Sandell, Cornerstone Community FCU; Hochul; Simone Fancher-Rowan, Clarence Community & Schools FCU; Jim Budde, Cornerstone Community FCU; and Laurie Baker, The Summit FCU. (Photo provided by the Credit Union Association of New York)
The Credit Union Association of New York (CUANY) and representatives of credit unions from the greater Buffalo area met with U.S. Rep. Kathleen C. Hochul (D-N.Y.) at her office in Williamsville, N.Y. The visit was part of CUANY's initiative to meet with all of New York's freshman representatives. Eight representatives from Clarence Community & Schools FCU, Cornerstone Community FCU and The Summit FCU discussed issues impacting the area and their credit unions, and discussed the Small Business Enhancement Act (S. 509 and H.R. 1418) currently before Congress. The measure proposes raising credit unions' MBL cap to 27.5% of assets from the current 12.25%. The group shared statistics from the Credit Union National Association (CUNA), noting that in the first year of enactment, the law would help credit unions pump $13 billion into the economy for business loans, creating more than 140,000 new jobs without cost to taxpayers or the government. Hochul, who said her focus is on creating jobs and helping small businesses succeed and grow, indicated she would further study the credit union MBL bill. According to William J. Mellin, CUANY president/CEO, who also attended the meeting, "Rep. Hochul gained a better understanding of credit unions and how they serve their members and communities." In Michigan, three separate meetings with congressmen were held during the past two weeks, according to the Michigan Credit Union League (Michigan Monitor Aug. 29).
U.S. Rep. Tim Walberg (R-Mich.) met with credit union leaders in Jackson, Mich., where they discussed the Small Business Lending Enhancement Act. Credit unions involved were CP FCU, EECU and Monroe Community CU. (Photo provided by Michigan Credit Union League)
CP FCU, Jackson, Mich., hosted a discussion on Aug. 22 with U.S. Rep. Tim Walberg (R-Mich.). Attendees included CP FCU staff and leaders from Jackson-based EECU and Monroe Community CU, Monroe. Credit union leaders noted the importance of making more credit available to small businesses and shared examples of how local credit unions continue to help their small business members with credit needs. More than 50 credit union leaders gathered Aug. 19 in Lawrence, Mich., to host the annual Greater Southwest Chapter legislative breakfast reception with U.S. Rep. Fred Upton (R-Mich.). Upton discussed his recent appointment to the congressional "Super Committee" that will address how to reduce the federal deficit by more than $1.3 trillion. He will join fellow Michiganite, U.S. Rep. Dave Camp (R-Mich.) on the committee.
More than 50 credit union leaders heard U.S. Rep. Fred Upton (R-Mich.) speak at a chapter legislative breakfast in Lawrence, Mich. Aug. 19. (Photo provided by the Michigan Credit Union League)
Upton, who is chairman of the House Energy and Commerce Committee, updated attendees on issues that could impact the business climate in Michigan. Participants asked questions on federal topics of interest to credit unions. Upton continues to be a strong credit union supporter, said the league. "As a credit union member for more than 30 years, I can say my credit union has always treated me well," Upton told the group. Credit unions also gathered at Lake Michigan CU's headquarters in Grand Rapids on Aug. 23 to discuss the MBL measure in Congress with U.S. Rep. Justin Amash (R-Mich.).
Member business lending was a key topic in a discussion between credit unions and U.S. Rep. Justin Amash (R-Mich.) during a meeting at Lake Michigan CU headquarters Aug. 23 in Grand Rapids, Mich. (Photo provided by the Michigan Credit Union League)
Attendees included representatives from LMCU, Kellogg Community FCU, Rockford Community FCU, Preferred FCU, Option 1 FCU, and My Personal CU. They discussed the increasing need for small business credit and the challenge in justifying costs associated with developing a small-business lending program with the current 12.25% of assets cap on MBLs. The group told Amash that more than 140 credit unions offer small business loans to their members and that H.R. 1418 would make millions of additional credit union capital available to small businesses in Michigan. Amash also discussed core components of his recent proposal for a balanced budget amendment and answered questions from the credit unions.

CU System briefs (08/29/2011)

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* MOBILE, Ala. (8/30/11)--A newly pregnant woman who pleaded guilty to embezzling $135,000 from members' accounts at America's First FCU, Mobile, Ala., has received a sentence tailored to her pregnancy. Danielle Krystan Winkler, 29, was sentenced to four months in federal prison to start immediately so she will be out of prison by the time she gives birth (Mobile Press Register and Associated Press Newswires Aug. 28). Winkler pleaded guilty in April to the thefts through 164 withdrawals from members' accounts. She also was ordered to pay $5,000 to the credit union and $126,259 to the credit union's insurance company … * MADISON, Wis. (8/30/11)--CUNA Mutual Group has added to its lending compliance resources by hiring Anneke Diem as compliance manager, Lending Service Products. Diem will focus on lending and deposit laws and regulations, and the resulting compliance challenges facing credit unions. Most recently Diem served as an associate attorney in the Corporate Services Group of Quarles & Brady LLP, Chicago, where she worked with financial institutions on regulatory compliance issues, capital raising and strategic acquisitions and dispositions. She was named an Illinois Super Lawyers Rising Star for each of the past three years … * HARRISBURG, Pa. (8/30/11)--Carol Humenick, senior vice president of Citadel FCU, Exton, Pa., died Saturday after a battle with cancer, reports the Pennsylvania Credit Union Association (Life is a Highway Aug. 29). Humenick, 54, was former chairman of the Credit Union Executives Society Board of Directors and served on the board for nine years. In addition to her husband, Todd, she is survived by a sister, brother, and nieces and nephews. Funeral services will be Thursday at Corpus Christi Catholic Church, Lansdale, Pa. …

Maine CUs prepare fall awareness campaign

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PORTLAND, Maine (8/30/11)--Maine credit unions are gearing up their fall statewide awareness campaign, said the Maine Credit Union League. SURF ATM network and Shared Branching radio ads recently hit the airwaves to remind consumers of the convenience that comes with these services, the league said (Weekly Update Aug. 26). Also returning will be statewide television advertisements sharing the reasons to "Look Into Maine's Credit Unions." They will include topics such as lending, technology, convenience, shared branching, savings and locality, as well as point out that members are always welcomed at credit unions. The lending message will air most often in the ad rotation to reflect today's economic environment, the league said. Maine's credit unions will also sponsor a fall staple in Aroostook County, the WAGM Potato Pickers Special, and reach out to wildlife enthusiasts throughout the state by sponsoring the Wildfire program. When seasons change, the sports scene also changes. Maine's credit unions will continue sponsoring two teams: the Maine Red Claws and the Portland Pirates, the league said. Also, Maine's Young & Free Spokester Seth Poplaski will share the value of credit unions with 18-25 year olds throughout the state at college orientations, end of summer celebrations and financial fitness fairs. Maine's credit unions will continue their presence on the YoungFreeMaine.com website and with website, Facebook and Google advertising, the league added.

Michigan CUs lead nation in the classroom

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LANSING, Mich. (8/30/11)--Michigan credit union representatives are leading the nation in the number of financial education presentations made in classrooms, said the Michigan Credit Union League. For the period ending June 30, Michigan credit unions made 1,909 classroom presentations, bringing the state in first place ahead of Texas' 1,898 presentations, according to the National Youth Involvement Board (NYIB) annual report (Michigan Monitor Aug. 29). Nationwide, 452, 369 students learned money management skills and heard the credit union message at 14,202 presentations during the year. Those totals are up 9.4% and 4.6% respectively from the same period last year. Michigan also came in second for total number of students reached: 45,985, compared with North Carolina's 64,008. Credit unions can report their youth financial education presentations to NYIB's website.

Minimal damage from Irene reported by CUs

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MADISON, Wis. (8/30/11)--Hurricane/Tropical Storm Irene's swath through the East Coast states this weekend left the credit union movement in 15 states Monday taking stock of damages from wind and water, flooding, and power and telecommunications outages. The conclusion so far: no CUs were seriously impacted with damages. "Credit unions generally fared well through Hurricane Irene," said Phil Tschudy, media relations manager at CUNA Mutual Group. "As of 4 p.m. [Monday], CUNA Mutual has had no reports of any major losses to credit unions," he told News Now. "This doesn't mean credit unions were left untouched, as many are still without power and may be for several days," Tschudy said. "However, based on what we currently know, we do not anticipate any major losses to credit union structures or operations. "What we will likely see over the next few days are minor losses involving water damage to ATMs, power outage claims involving data processing systems, and minor building claims," he said. Irene hit landfall at 7:30 a.m. at Cape Lookout, N.C., as a Category 1 hurricane that was more than 500 miles wide. During its journey up the East Coast of the U.S. into Montreal, Canada, at least 21 people died in storm-related incidents. An estimated 4.5 million to 6 million people were without power during at least part of the weekend (U.S. Today Aug. 29). Although downgraded to a tropical storm by the time it reached New York City, several states were hard hit by flooding, especially in New Jersey, Vermont, and eastern Pennsylvania. Agility Recovery reported on Monday morning that 126 of its clients were on alert status, working with it to weigh their options for operating, with 386 total locations on alert. As of 9 a.m., 13 disasters had been declared. Loss of power and connectivity were the primary reasons for the declarations, Agility said. Three credit unions in New Jersey, Rhode Island and North Carolina were in the recovery process. Calls were coming into Agility's client services at the rate of every 10 to 15 minutes for updates, declarations and stand down situations, said Scott Teel, marketing director. (See related article, "Southeastern CUs reporting power outages from Irene," which discusses the hurricane's impact on North Carolina and Virginia credit unions. And see "NCUA addresses CU disruptions caused by Irene" in the Washington section.) The following is a wrap-up of credit union reports in other states. Vermont: Although state government declared the storm brought the worst statewide damage in 84 years, "Vermont credit unions seem to have fared the passing of Tropical Storm Irene relatively unscathed," said the Association of Vermont Credit unions. "As of noon Monday, AVCU had made contact with most of our members and learned that damage caused by Irene across much of the state has not directly affected our credit unions," said John Cote, director, information services at AVCU. "Some locations, however, are experiencing power and telecommunications outages that have temporarily affected normal operations. As a result, we've so far been unable to check the operational status of one credit union in central Vermont whose main office and branches are in one of the hardest hit regions," said AVCU. Also, several locations were hampered by the reported closing of more than 260 roads statewide, with the Vermont Department of Transportation saying that number could go as high as 300 once local roads and streets have been surveyed. Delaware: The Delaware Credit Union League contacted all Delaware credit unions, and all weathered the storm well, Alice Smith, league communications/governmental affairs director, told News Now. At Seaford (Del.) FCU, Kathy Decker, program and systems manager, reported that there was no damage or water issues--just technical ones. Seaford’s main telephone number was not working and it had no Internet at the main branch. The Millsboro branch had Internet but no data processing. Telephone and information technology professionals were reportedly on their way to fix the problems. Kim Gilson, manager of Peninsula Methodist FCU, reported having to walk through knee deep water to check on his church where the credit union’s records are kept. The credit union is located in Crisfield, Md., on the Eastern Shore, where there was quite a bit of evacuation due to the storm. Although the credit union is located in Maryland, it belongs to the Delaware League, Smith said. Luckily, everything at Peninsula Methodist was fine, Smith added. All Delaware credit unions were back to business Monday, Smith said. New York: The Credit Union Association of New York, located along the storm's path, was open on Monday. "We're all safe and working today at the association with no problems," said Bonnie Sklar, public relations coordinator. Early that morning the association "reached out to credit unions to see if they were impacted by Irene." So far, no credit unions had reported problems. New Jersey: "Our league office is up and running," said New Jersey Credit Union League President/CEO Paul Gentile. The league office is located in Hightstown, which had flooding featured in an Associated Press article picked up in several states. "While Hightstown has flooding issues, fortunately we don't," he told News Now. "We are still assessing New Jersey credit union issues," he said, adding, "Basically there is a lot of flooding in New Jersey and a lot of streets are closed, making access to some buildings difficult. I do know of some credit unions that are operating in business contingency mode." The website of Atlantic FCU, in Kenilworth, N.J., noted that "due to the effects of Hurricane Irene," all Atlantic Federal offices were closed Monday. It said the credit union would re-open today at 8 a.m. ET. Maine: In Maine, the league was temporarily affected by a power outage caused by the storm. "The Maine Credit Union League and our service subsidiary, Synergent, briefly went on generator power Sunday, but power was soon restored later that day," said Diana Dionne, communications and marketing specialist. "Credit unions experienced sporadic outages, but are now all operational without any significant damages. In Maine, 204,000 were left without power from the storm." Maryland and District of Columbia: “While credit unions were well prepared with contingency plans, we are relieved to report that outside of scattered power outages, there appears to be no major damage in the wake of Irene,” said Jennifer Simmons, interim CEO and chief membership officer for the Maryland & District of Columbia Credit Union Association. Massachusetts, New Hampshire and Rhode Island: Credit unions in Massachusetts, New Hampshire and Rhode Island “for the most part fared pretty well,” based on information received as of Monday afternoon, Donna Bevilacqua, director of communications and community relations for the Massachusetts Credit Union League, told News Now. There were some minimal power outages, as well as some credit union branches that still were out of power Monday, but members were sent to other branches, she said. “One branch in Western New Hampshire had a foot of water in the basement, but it's open,” Bevilacqua said. “Also, there were some power outages at Rhode Island and Massachusetts credit unions, but power was returned in most areas affected,” she added. Pennsylvania: The Pennsylvania Credit Union Association (PCUA) noted that high winds brought down power lines, causing power outages in central and eastern parts of the state and that Philadelphia was dealing with flooding rivers and creeks. The association put out a call Monday morning for credit unions to report damages. The PCUA office was without power from Saturday evening to early Monday morning, but power was restored by opening time, said the association.

Southwest Bridge and Ga. Corporates merger OKd

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Duluth, Ga. (8/30/11)--The merger between Southwest Bridge Corporate and Georgia Corporate received approval from the National Credit Union Administration (NCUA) Board of Directors. The board addressed the corporates’ merger request during a closed meeting Monday afternoon. NCUA confirmed to News Now that the merger had been approved. “This approval is the culmination of many months of hard work, and we could not be more pleased,” said Lin Hodges, chairman of Georgia Corporate and president/CEO of Associated CU, Norcross, Ga. “The NCUA set a very high standard for ensuring that the merger would result in a successful corporate--one that is able to achieve regulatory capital and retained earnings targets as well as other new requirements designed to reduce risk to the credit union system,” said Hodges, who is also slated to take the helm as chairman of the resulting Catalyst Corporate on Sept. 6th. “I continue to believe that this partnership with Georgia Corporate, along with the key changes to the business model outlined in the plan, is the best possible way to serve the interests of member credit unions,” said Kerry Parker, chairman of the Executive Committee for Southwest Bridge Corporate’s Member Advisory Council and president/CEO of A+ FCU, Austin, Texas. The Member Advisory Council approved the merger strategy late last year. “The Catalyst model represents a combination of traditional and progressive thinking,” said Greg Moore, president/CEO of Georgia Corporate. “The support of our members, and now the approval of the NCUA Board, demonstrate a growing awareness that the cooperative corporate model continues to be extremely valuable, but that in the future it must be highly efficient and able to achieve success with less balance-sheet risk.” The strong financial performance of Southwest Bridge Corporate since its chartering in late 2010 shows the importance, and viability, of a highly efficient model, he added. Obtaining the NCUA’s approval is one of three key steps that the merging corporates seek to accomplish this week. The others include a vote on the merger in a special meeting today by the Southwest Bridge Corporate membership, and final approval from the Georgia Corporate Board, set for Wednesday. “We are looking forward to a very successful consolidation over the holiday weekend,” said Moore. “We will open our doors as Catalyst Corporate on Sept. 6th and be ready to provide seamless, world-class service to our members on day one.” Together Southwest Bridge Corporate and Georgia Corporate have raised $92.7 million in perpetual contributed capital from 875 members. “While this is more than sufficient to launch and sustain the Catalyst Corporate business plan, further membership growth is expected,” said Hodges.

IWash. PostI Local CUs report uptick in mortgages

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WASHINGTON (8/30/11)--Credit unions in the Washington, D.C., area are reporting an increase in mortgage applications because record-low interest rates are spurring members to refinance their mortgages or buy a house. The surge in mortgage refinancings is proceeding despite heightened worries of a double-dip recession (The Washington Post Aug. 27). NASA FCU in Upper Marlboro, Md., has seen a 50% increase in mortgage applications and loans, Bill White, the credit union’s vice president of real estate lending, told the Post. Roughly 70% of the mortgage applications submitted to NASA FCU in the first three weeks of August were for refinancings, although new-purchase submissions also have gradually risen, White added. At OAS FCU in Washington, D.C., mortgage applications for new homes are increasing, Carlos Calderon, OAS president/CEO, told the newspaper. Nearly 75% of mortgage applications submitted to the credit union are for new homes, he added. Based on the uptick of applications since the start of August, the credit union expects its mortgage portfolio to further expand, Calderon told the paper. OAS had expanded its total mortgage portfolio nearly 25% before the latest dip in rates. The Credit Union National Association and the Maryland and District of Columbia Credit Union Association provided some of the credit union contacts for the article. To read the article, use the link.

Southeastern CUs reporting power outages from Irene

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MADISON, Wis. (8/30/11)--After assessing damage in the wake of Hurricane Irene on Monday, credit unions in the southeast U.S. emerged relatively unscathed, with limited branch closings caused primarily by power outages. Irene hit landfall at Cape Lookout, N.C., as a Category 1 hurricane with 80-115 mph winds. It became a tropical storm near New York City and New Jersey. In North Carolina, branch closures and some damage were reported near the direct path of the storm, but the main impact to operations was the loss of electrical power, according to the North Carolina Credit Union League. State Employees’ CU, based in Raleigh, reported by mid-morning Monday that six branches were closed. Another branch was scheduled to open at noon. Leigh Brady, SECU vice president of member education, said some branches could remain closed today and Wednesday because of power outages. She stressed members can access the credit union’s contact center and ATM network around the clock. Brady said two SECU branches suffered minor water damage, but overall the credit unions was “very, very fortunate.” Marine FCU, Jacksonville, N.C., reported that three branches were closed due to a lack of power. All locations were near the direct path of Irene and would be closed until power was restored. “They are all along the main roads, so we're hoping it won’t be too long,” said Marine FCU Chief Operating Officer Jeff Clark. Clark added that there was slight property damage, but branches would reopen when power was restored. The drive-through at Telco CU in Tarboro was closed as a result of damage from fallen tree limbs. Cleanup was underway and the branch lobby was open, the credit union reported. Tree limbs also snapped power lines at First Carolina People’s CU in Goldsboro and the branch was closed. Cleanup was underway, and branch staff reported that the credit union drive-through would be open Tuesday even if power had not yet been restored. “We’ll continue to follow up with the credit unions impacted to ensure they have all the resources they need,” said NCCUL President/CEO John Radebaugh. “With nice weather in the forecast the next several days, hopefully the credit unions will be able to get back to normal operations in the very near future.” Although no credit unions had reported property damage, Virginia credit unions were dealing with widespread power outages, according to the Virginia Credit Union League. “Dominion Power reports that 600,000 customers are still without power in Greater Hampton Roads, Richmond and Northern Virginia,” said Lewis Wood, vice president of public relations and communications for the Virginia league. “This has forced the closure of some branches in Greater Hampton Roads and Richmond. I don’t know of any Northern Virginia credit unions affected as of noon [Monday] by outages. At the height of the outages, Hurricane Irene had knocked out power to nearly 1 million customers in Virginia.” Chartway FCU, based in Virginia Beach, Va., has branches along the coast as far south as Florida and as far north as Rhode Island. It opened all branches as scheduled on Monday. “It was not as bad as we expected,” Chartway FCU President/CEO Ron Burniske said of Hurricane Irene. “We received a lot of rain but not the big winds that were forecasted.” Also, the National Credit Union Foundation (NCUF) on Monday was working with state leagues to determine the need for relief efforts, according to Christopher Morris, NCUF director of communications.

Presidential candidate to speak at Iowa CU convention

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DES MOINES, Iowa (8/30/11)--Texas Gov. and Republican presidential candidate Rick Perry will speak at the Iowa Credit Union Convention at 12:15 p.m. (CT) on Sept. 16, the Iowa Credit Union League announced Monday. “We hope to be able to share some of the issues that are affecting our industry,” said Patrick S. Jury, president/CEO of the Iowa Credit Union League. Perry will share his thoughts on credit unions and the economy, and will also take questions from convention attendees. The announcement comes after Jeff Disterhoft, CEO of University of Iowa Community CU, had the opportunity to visit with President Barack Obama at a White House forum on job creation in Peosta, Iowa. Disterhoft spoke with Obama to garner support for legislation that would raise the credit union business lending (MBL) cap to 27.5% of assets from the current 12.25%. The Credit Union National Association (CUNA) and credit unions are pressing Congress to increase credit unions’ MBL cap. Doing so would 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.

San Francisco paper CUs reposition for biz members

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SAN FRANCISCO, Calif. (8/29/11)--Credit unions in the San Francisco Bay area are looking to reposition themselves to serve business members, according to an article in the San Francisco Business Times (Aug. 26). "These credit unions saw a silver lining to the 2008 financial crisis that created an opportunity for them to pull in business borrowers who had trouble finding financing elsewhere as the demise of major banks and near-collapse of other business lenders spurred a pullback in lending," said the article. The item spotlights local area credit unions' efforts to serve members with business loans, as well their efforts to encourage Congress to lift their member business lending (MBL) cap to 27.5% of assets from 12.25%. "A lot of our individual members operate small businesses," Redwood CU CEO Brett Martinez told the paper. Many businesses were overlooked by the large banks, but Redwood's loans go to "microbusinesses" with less than $1 million in revenue. The more-than-$1.72 billion asset, Santa Rosa-based credit union is picking up business members from banks that decided not to renew loans or credit lines. San Jose-based, $1.5 billion asset Technology CU also is stepping up business loans, which account for the majority of its loan growth, the article said. Recent clients include a dentist seeking Small Business Administration financing and a small business owner taking out a loan to buy out a partner, the article said. The credit union services clients from startups to established companies with 50 employees. The article also features Stanford FCU, which offers commercial mortgages up to $10 million, equipment loans up to $250,000 and business credit cards among its business programs, and Patelco CU, which discussed lifting the MBL ceiling. The Credit Union National Association (CUNA), state leagues and nation's credit unions are pressing for Congress to adopt the Small Business Enhancement Act (S. 509 and H.R. 1418), which would raise the lending cap. By allowing credit unions to create more business loans, Congress would enable them to inject $13 billion in small loans into the economy and create 140,000 jobs--with no cost to taxpayers, said CUNA. CUNA and the leagues have encouraged credit unions and their members in all states to contact their legislators in their home-state offices during the current congressional District Work Break and urge them to support the MBL bills. To read the full article, use the link.

Symposium Mature CU industry must test limits

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CHARLOTTESVILLE, Va. (8/29/11)--Credit unions are a mature industry that should test its limits and determine what's next for credit unions, speakers told 65 credit union leaders and academics from across the nation at a Credit Unions at the Crossroads Symposium, held Aug. 10-12 at the University of Virginia. The gathering addressed pressing system issues, including slow growth in market share, efforts to reach today's youth, capital needs, key regulatory issues and cooperation within the system. It was co-sponsored by the University of Virginia Community CU, the University of Virginia's Darden School of Business, and its McIntire School of Commerce. "We all see the harsh realities of the marketplace," said Alison DeTuncq, CEO of the University of Virginia Community CU, Charlottesville, Va. "Many of us are painfully aware that our memberships are aging, that our regulatory burdens are growing, and that the traditional credit union business model poses its own unique challenges. The symposium sought to lay a foundation on which we can build a research-based framework that answers the question: What's next for America's credit unions?" she said. In the next month, the Darden and McIntire schools will work with the Filene Research Institute to analyze information and audio recordings of the event to identify current research from Filene that best speaks to the "credit union of the future," as well as topics needing new or additional research. "Credit unions emerged from the financial crisis and the recession with a sense of urgency to better position themselves as a force within the financial services industry," said Ronald T. Wilcox, a professor at the Darden School of Business. "The consumer finance landscape was changing long before the turmoil of the past few years; that change will only accelerate, forcing financial services providers to prove themselves by being innovative, responsive and adaptable. The credit union industry seems eager to accept that challenge and test its own limits," he added. The symposium covered topics such as financial and market share trends for credit unions, the characteristics of top-performing credit unions and community banks, current credit union research that speaks to the system's future, legislative and regulatory issues, credit unions' ability to adapt to the marketplace, marketing, the role of credit union service organizations and trade associations, staff development, governance and more. "The credit union industry has matured to a point that it needs answers to fundamental business questions," said George A. Overstreet Jr., a professor at the McIntire School of Commerce. "Some of the industry's core values are being challenged; its business model faces real and significant threats; and credit unions are struggling for relevance among the next generation of Americans. Credit unions understand the stakes, and fortunately, there's neither a shortage of passion within credit unions, nor a shortage of capable leaders ready to blaze the trail for the industry's future," Overstreet concluded.

CU System briefs (08/26/2011)

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* YAKIMA, Wash. (8/29/11)--Members of Yakima Valley CU, Yakima, Wash., have approved the merger of their credit union with Catholic CU, also based in Yakima. The merger will be effective Oct. 1. The name and brand of the combined $471 million asset credit union will be made public in mid-September. Mina Worthington, Yakima Valley president/CEO will lead the new credit union, and Paul Regimbal, president/CEO of Catholic CU will become senior vice president of corporate integration until his retirement in June 2012. The merger will provide nearly 50,000 members with service from eight branches. Its board will consist of 13 members, seven from Yakima Valley and six from Catholic CU. State and federal regulators have already approved the merger proposal (Yakima-Herald.com Aug. 25) ... * FORT WORTH, Texas (8/29/11)--American Airlines FCU (AA CU) presented a $50,000 check to Children's Miracle Network Hospitals
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after the 15th Annual American Airlines FCU Golf Tournament in Grapevine, Texas. The check was presented Thursday at AA CU headquarters in Fort Worth, Texas, and will be split between Cook Children's Medical Center Foundation and Children's Medical Center Foundation. Tournament sponsors included CO-OP Network, Global Vision Systems Inc., Fiserv, PSCU Financial Services, and others. The donation from the golf tournament includes a CO-OP Financial Services Miracle Match of $10,000. Credit unions have partnered with Children's Miracle Network Hospitals through Credit Unions for Kids since 1996. From left are: Angela Bynum, sponsor relations representative at Children's Medical Center of Dallas; Angie Owens, president/CEO of AA CU; Jackie Daulton, Children's Miracle Network coordinator at Cook Children's Health Foundation; and Pedro Noda, golf tournament director and emarketing manager at AA CU. (Photo provided by American Airlines CU) …

Baxter CUs Bratsakis named MDDCCUA presidentCEO

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COLUMBIA, Md. (8/29/11)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) announced John Bratsakis will be the organization’s new president/CEO. “John brings a lot to our organization,” said Board Chairman Miguel Boluda Jr., CEO of the Pan American Health Organization/World Health Organization FCU, Washington, D.C. “He has a track record of success throughout his career and demonstrates a commitment to the industry that we feel makes him the perfect choice to lead our association and help our credit unions successfully navigate the future.” Prior to joining MDDCCUA, Bratsakis was the senior vice president of Baxter CU in Vernon Hills, Ill., where he helped develop new business relationships with key sponsor companies for the $1.5 billion asset credit union. Bratsakis also was responsible for representing the credit union at the state and national level regarding governmental/regulatory affairs, and for managing multiple departments within the credit union. Bratsakis served on the Illinois Credit Union League and Service Corp. Board of Directors for more than 10 years, acting as chair from 2008 to 2010. He currently is a member of the Credit Union National Association Governmental Affairs Committee. “John will be instrumental in ensuring the success of MDDCCUA and its member credit unions for years to come,” Boluda said. “We feel that his broad experience both in credit unions and associations will provide an excellent contribution to our organization.”

Three CUs in top 10 companies for employees benefits

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DES MOINES, Iowa (8/29/11)--Three credit unions were among 10 growing companies receiving national recognition for offering employees extraordinary benefits, despite a chaotic economy. An independent judging panel of employee benefits experts named Postal CU, Woodbury, Minn.; Consolidated FCU, Portland, Ore.; and Veridian CU, Waterloo, Iowa, as three of The Principal 10 Best Companies for Employee Financial Security. The Principal Financial Group sponsors the national program, which is in its 10th year. It honors growing companies for their commitment to their employees’ financial security. As part of the recognition, The Principal awards a donation to a charity selected by each winning company.

Catalyst Corporate Merger on track

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DULUTH, Ga. (8/29//11)--Integration work is progressing as the Sept. 6 date for the planned launch of Catalyst Corporate FCU in Duluth, Ga., draws near. If the National Credit Union Administration (NCUA) approves the proposed merger of Southwest Bridge Corporate FCU and Georgia Corporate FCU, Catalyst Corporate will be the new entity. The NCUA board is scheduled to review the merger request at its meeting today. If the weekend’s weather prompts a government closure, the meeting will be held at 2 p.m. ET Tuesday. Following the NCUA Board’s review, the members of Southwest Bridge Corporate will conduct a member vote during an in-person meeting on Tuesday at its offices in Plano, Texas. Details regarding the proposed merger and ballots were sent to Southwest Bridge Corporate’s membership in mid-August. Members can vote by mail. Results of the member vote will be known shortly after the meeting. “We continue to be optimistic that the input from hundreds of members and the extensive year-long integration planning will culminate in a successful merger and launch of Catalyst Corporate on Sept. 6,” said Greg Moore, president/CEO of Georgia Corporate FCU. As of Thursday, 875 members have committed $92.7 million to capitalize Catalyst Corporate FCU. Shortly after its launch, Catalyst Corporate will begin promoting two upcoming events:
* The Economic Symposium, which will be held in Atlanta, Sept. 28-29; and * The Economic Forum, which will be held in Frisco, Texas, Oct. 25-26.
Both events will be open to all credit unions, regardless of membership, Moore said.

Six finalists picked for Youth Week theme

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MADISON, Wis. (8/29/11)--Six ideas have been selected as finalists for the National Credit Union Youth Week theme. National Credit Union Youth Week--April 22-28--is CUNA’s official designation of an annual, national celebration for credit unions that support youth financial literacy all year long. April is National Financial Literacy Month. A National Youth Saving Challenge will run the entire month. Credit unions can participate for a week or the entire month. The six theme finalists are:
* Millionaire for a lifetime; * Shape up your savings; * Groovin’ with my credit union (1960s and 1970s); * Strike gold at the credit union (gold rush); * Be a super saver; and * iMatter, iSave, iAm a Member.
Voters are asked to rank the ideas in descending order.

Dupaco social media contest puts game leaders on billboards

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DUBUQUE, Iowa (8/29/11)--Dupaco Community CU has employed a non-traditional reward system for loyal credit union members who stop into its locations for service.
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Introduced in August with Dupaco's member thank you campaign, the Dubuque, Iowa-based credit union is using the social media application Foursquare to engage members. The free application, available for download on mobile devices, uses satellite GPS to allow users to "check in" while at retail establishments, service organizations, public spaces and other locations. In exchange for their check in, users receive special offers served up by participating businesses or organizations. Rewards to members who check in while at a Dupaco branch range from free koozies to gift certificates to Dupaco business partners, and from registration for weekly $50 gas card drawings to an opportunity to be featured on a digital billboard, where available. "For Dupaco, the value in participating in the Foursquare social circle is engagement with people in a unique, viral way," said Jennifer Hanniford, Dupaco assistant vice president of interactive marketing. "When people check in to Dupaco, their Foursquare friends know they're here. They can tip off the Foursquare community about their experience. It's a genuine tool for user-generated reviews on venues." Social circles are a natural part of Dupaco's unique cooperative structure, she said. "Through a credit union, members come together and pool deposits, and then responsibly provide their friends and neighbors low-cost loans for cars, homes, education, funding for small businesses and more." Dupaco has extended the reach of its Foursquare efforts by promoting it on other interactive channels including Facebook and Twitter, and highlighting it on area billboards. "Foursquare players have the opportunity to become 'mayor' of any venue based on the frequency of their check-ins. Dupaco is paying homage to our Foursquare mayors by featuring them on digital billboards in markets where digital billboards are available, like Dubuque and Cedar Rapids," said Hanniford. "The public sees the Foursquare mayor names in lights and it generates more excitement to play and compete for the coveted mayorship position." The free Foursquare application is available for download on most smart phones and also has an alternate SMS version. For more information, use the link.

Texas league uses NCUF grant for fin lit tool

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FARMERS BRANCH, Texas (8/29/11)--The Texas Credit Union League has created two traveling Reality Fair sets for Texas credit unions and has held six fairs in high schools throughout Texas since May. The fair is an interactive financial literacy tool for high school students, who participate in a hands-on event that guides them through the personal financial management process, including budgeting, saving and investing in a simulated real-world environment.
Students shop for vehicles during a Reality Fair at Goose Creek Memorial High School in Baytown, Texas. The fair was sponsored by Beacon FCU, La Porte, Texas. (Photo provided by the National Credit Union Foundation)
To help fund the initiative, the league received grants last year from the National Credit Union Foundation, the Texas Credit Union Foundation (NCUF), and the Friends of Consumer Freedom. “Thanks to the grant funding, the league has been available to offer the traveling Reality Fairs to credit unions all over Texas,” said Mike Delker, TCUL senior vice president of credit union relations. “Through this type of collaboration, the dollars go a long way in helping credit unions demonstrate to their communities that there are solutions available for their financial concerns.” “Financial literacy is a tremendous concern for families from all backgrounds in Texas,” said Natasha Melugin-McAdoo, director of the REAL Solutions program in Texas. The fairs raise awareness of serious monetary issues for students and “pass that message along when participants relay what they have learned to their parents.” Earlier this year, TCUL created the turnkey fairs using materials from America’s Credit Union Museum’s CU 4 Reality Program (cu4reality.org). The league then held six Reality Fairs in three Texas schools, reaching nearly 1,000 students since May. More fairs are scheduled for fall and spring. TCUL’s Reality Fair will also be included as part of the orientation process for incoming students at a Texas college. “We are looking to offer more Reality Fairs in Texas and around the country through REAL Solutions,” said Lois Kitsch, National REAL Solutions program director for NCUF. To see a Reality Fair video, use the link.

East Coast CUs stood ready for weekends Irene

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MADISON, Wis. (8/29/11)--Credit unions along the East Coast were well prepared for Hurricane Irene’s arrival this past weekend. The Maine Credit Union League posted a special Hurricane Irene section on its website last week, with links for consumers to obtain additional information, news and assistance from the American Red Cross, Federal Emergency Management Agency, the National Hurricane Center and the National Weather Services. Although it has been two decades since a significant Hurricane struck Maine, other natural disasters during that time have prompted credit unions to develop plans and procedures that have been activated on several occasions, the Maine league said. Maine credit unions were well-positioned to continue to provide the state’s 611,000 credit union members with access to financial services, the league said. Since three-quarters of Maine’s credit unions participate in a shared branching network, most members would likely be able access their accounts at another credit union location if their own credit union is not available. There are nearly 150 shared-branch locations in Maine and more than 4,000 nationwide. Chartway FCU, Virginia Beach, Va., offered its members a Hurricane Irene update page on its website, including a pre-hurricane checklist to prepare for a possible disaster situation. To ensure employees had time to secure items around their homes and take care of their families, Chartway closed branches and back offices in North Carolina, Virginia, Rhode Island and New Jersey early on Friday. Branches in all four states remained closed on Saturday. The credit union also granted “liberal leave” for employees in the affected areas, according to Heidi Worker, Chartway FCU corporate communications director. Chartway also made extra cash available in ATMs in affected areas, Worker said The Pennsylvania Credit Union Association warned its members that flooding is a great threat throughout eastern Pennsylvania and New Jersey, particularly in the Philadelphia area (Life is a Highway Aug. 26). The New Jersey Department of Banking & Insurance (DOBI) issued on Thursday a disaster preparedness bulletin Thursday to all state-chartered financial institutions, including credit unions, said the New Jersey Credit Union League (The Daily Exchange Aug. 26). The department reminded financial institutions they are required to maintain disaster response plans to address all reasonably foreseeable risks to business continuity in the event of a catastrophic event. The bulletin recommended that financial institutions review their preparedness plans to include any special provisions for check cashing either by depositors or non-depositors, wire transfers, waiving certain fees and meeting credit needs. New Jersey credit unions were advised to take reasonable steps to adopt emergency by-laws establishing the terms and conditions for continuity of services in accordance with the Credit Union Act of 1984, according to the bulletin. CUNA Mutual Group said Friday it had activated its disaster recovery team to assist credit unions threatened by Hurricane Irene. The company also contacted potentially affected property and casualty policyholder credit unions throughout the projected path. The company will continue to monitor the storm and asked credit unions to contact the company around the clock if they sustain damages. CUNA Mutual said it would follow up with the credit unions once the storm passed. Agility Recovery, a CUNA Strategic Services provider, offered a webinar, “Hurricane Irene: Current Threats & Practical to Prepare,” to help credit unions prepare for the weekend. The presentation on Friday addressed the factors unique to Irene and practical steps for preparation in advance of the storm. Federally insured credit unions in 16 states and the District of Columbia, in the potential path of Hurricane Irene, received a National Credit Union Administration (NCUA) Dispatch Friday urging them to undertake a thorough review of their business continuity and disaster preparedness, response, and recovery plans in preparation for potential incidents related to this storm News Now Aug. 26).

Southeast Corporate goes to plan B merger option

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TALLAHASSEE, Fla. (8/29/11)--As corporate credit unions move toward capitalization deadlines, one corporate--Tallahassee, Fla.-based Southeast Corporate FCU--announced Friday that the capital commitments received from its members have fallen short of the $80 million needed to operate as a stand-alone corporate. As a result, all its member capital commitments received will be canceled. Along with its recapitalization efforts, Southeast Corporate has been working on alternative solutions and is well into the process of identifying a merger partner. “We appreciate the many members who supported our efforts with capital commitments and also thank every member for giving their time and consideration to Southeast Corporate during this process. We all knew the challenges facing the corporate system, and Southeast Corporate specifically, were significant,” said Brad Miller, president/CEO of Southeast Corporate. “While there is uncertainty in any alternative, our objectives in a merger remain the same as they were for recapitalization--protecting and preserving member capital, maintaining continuity of service, and creating long-term value for members.” Southeast Corporate assessed the ability of several corporates to meet member objectives. From this review, it narrowed the focus to a short list of potential merger candidates that can provide the best alternative option for the member/owners of Southeast Corporate. “We’re conducting due diligence now and expect to announce our preferred merger partner soon,” Miller said. "The merger plan, which must be approved by the National Credit Union Administration, will be brought to our member/owners for approval, giving them ample time to evaluate and make decisions regarding current service activity and the business plan for the merged organization. Our members can be assured that they will continue to receive uninterrupted service from Southeast Corporate as this alternative process proceeds.”

NEW Southeast Corporate wont recapitalize moves to merger plan

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TALLAHASSEE, Fla. (FILED 10 a.m. CT)--Southeast Corporate FCU's capital commitments received fell short of the $80 million goal necessary to operate as a stand-alone corporate, the corporate announced today. As a result, all member capital commitments received will be canceled. Along with its recapitalization efforts, Southeast Corporate has been working on alternative solutions and is well into the process of identifying a merger partner. “We appreciate the many members who supported our efforts with capital commitments and also thank every member for giving their time and consideration to Southeast Corporate during this process. We all knew the challenges facing the corporate system, and Southeast Corporate specifically, were significant,” said Brad Miller, president/CEO of Southeast Corporate. “While there is uncertainty in any alternative, our objectives in a merger remain the same as they were for recapitalization--protecting and preserving member capital, maintaining continuity of service, and creating long-term value for members.” Southeast Corporate assessed the ability of several corporates to meet member objectives. From this review, it narrowed the focus to a short list of potential merger candidates that can provide the best alternative option for the member/owners of Southeast Corporate. “We’re conducting due diligence now and expect to announce our preferred merger partner soon,” Miller said. "The merger plan, which must be approved by the National Credit Union Administration, will be brought to our member/owners for approval, giving them ample time to evaluate and make decisions regarding current service activity and the business plan for the merged organization. Our members can be assured that they will continue to receive uninterrupted service from Southeast Corporate as this alternative process proceeds,” Miller said.

CU System briefs (08/25/2011)

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* BILLINGS, Mont. (8/26/11)--Sarah Anne Housley, 34, a former employee of Montana Health FCU, Billings, Mont., was sentenced Wednesday to one year and one day in prison for embezzling more than $100,000 from the credit union. The funds included $94,158 stolen from her grandparents' account in hundreds of transactions from January 2008 until July 2010. Housley had been employed at the credit union for seven years. The theft was discovered when an audit showed her teller drawer was thousands of dollars short. She allegedly spent the funds on covering her overdrafts, vacations, house payments and more. U.S. District Judge Jack Shanstrom also ordered Housley to pay $110,690 in restitution (Associated Press Newswires Aug. 24) … * HARAHAN, La. (8/26/11)--Michael Hooper, president/CEO of Baton Rouge, La.-based La Capitol FCU, was elected to Credit Union Cooperative Branching board of directors during its annual meeting Aug. 15, said the Louisiana Credit Union League (eNews Aug. 24). He will replace Susan Leake, who retired last year. He served as chief financial officer/executive vice president for 10 years before becoming president/CEO of La Capitol … * NEWBURYPORT, Mass. (8/26/11)--David Michael Flaherty, 61, president of Louise E. Mills CU in Merrimac, Mass., died Saturday at a medical center in Boston. He was a member of the math department at Triton Regional High School, where he taught for 25 years. He is survived by his wife and three daughters. Funeral services are today at 11 a.m. at All Saint's Anglican Church, Amesbury, Mass. (The Daily News of Newburyport Aug. 24) … * IOWA CITY, Iowa (8/26/11)--Robert F. "Bob" Kanak, past president and board member of the Federal Employees CU, Des Moines, Iowa, died Aug. 18 in Grove, Okla. He was 91. He worked with the U.S. Postal Service for 28 years before retirement. Kanak is survived a son, three grandsons, eight great-grandchildren and a sister (Iowa City Press-Citizen Aug. 25) …

Late fees have dropped says report

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CHICAGO (8/26/11)--Late payments to credit cards are at their lowest level in 17 years; however, one reason late payments have declined is because consumers being more cautious in using their cards, a study indicates. The rate of payments 90 days or more past due dropped to 0.06% during second quarter, compared with 0.92% during second quarter 2010, said TransUnion, a Chicago-based credit reporting agency (CardRatings.com Aug. 25). Economists had forecast that the late payments would decline, but the decline during the quarter was faster than expected, said TransUnion. During the last quarter, the average borrower's debt rose $20--to $4.699 per person.

PSECU bucks trend adds 31 jobs

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HARRISBURG, Pa. (8/26/11)--While Bank of America goes through with its plans to lay off 3,500 workers across the nation, at least one credit union is doing its part to provide service and create jobs. Pennsylvania State Employees CU (PSECU), based in Harrisburg, Pa., has announced two initiatives that will benefit its members and the economy: expanded ATM surcharge rebates and extended call center hours. In October, traditionally celebrated as International Credit Union Month, PSECU will thank members for choosing the PSECU Check Card by increasing the monthly surcharge rebate to $8 from $4 for all members who use an out-of-network ATM. The monthly rebate jumps to $20 for members with qualifying Direct Deposit with the more than $3 billion asset credit union. The rebates will allow members to use a broader network without worrying about surcharges, making it easier for them to access their money, said PSECU in a press release. Extended call hours will mean PSECU is adding 31 new positions to accommodate an almost 40% increase in hours that service will be provided to members. Beginning in January, the call center will be open until 9 p.m. Monday through Friday and until 5 p.m. on Saturday. The initiatives are core to the credit union's goal of providing quality service and access, as well as supporting the economy, said Gregory A. Smith, PSECU president. "Not only are we giving back to the member in more ATM access and call center hours, but we are also helping our economy by adding 31 jobs to the roster." He noted that many banks responded to the interchange debit fee changes in the Dodd-Frank Act by increasing their service charges and downsizing. "PSECU is responding by putting members and their needs front and center of our day-to-day operations."

Auto delinquencies continue downward trend

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CHICAGO (8/26/11)--The national auto delinquency rate--the rate of borrowers 60 or more days past due--decreased for the seventh consecutive quarter, dropping to 0.44% at the end of the second quarter, according to TransUnion, the third largest credit bureau in the U.S. The company has an ongoing series of quarterly analyses of credit-active U.S. consumers and how they are managing credit related to mortgage, credit cards and auto loans (Marketwire Aug. 23). Although auto delinquencies were expected to fall since last quarter, in part due to seasonal influences, the second-quarter TransUnion data released Tuesday shows a moderate deceleration on a year-over-year basis since the third quarter of 2010. Delinquencies in U.S. credit unions’ “all other non-mortgage loans”--which includes auto loans, unsecured personal loans and all other non-mortgage loans--dropped to 1.32% in 2010 from 1.61% in 2009. For first quarter 2011, delinquencies dipped to 1.12%, according to data from the Credit Union National Association. “Historically, first and second quarter auto delinquencies tend to be lower than those experienced in the second half of the year--all other things remaining equal,” said Peter Turek, automotive vice president in TransUnion’s financial services business unit. “However, over the last seven quarters--on a year over year basis---we have seen delinquencies trend downward as consumers continue to pay down debt. “With auto sales improving, more auto loans are opened by consumers placing downward pressure on auto delinquency rates,” he added. “A consumer’s ability to repay is also helped by the recent low interest rates for new- and used-car loans, making purchase decisions and monthly payments more affordable.” Between the first and second quarters, 43 states experienced declines in their auto delinquency rates. Also, 60% of metropolitan statistical areas (MSA) saw declines in their delinquency rates last quarter. During the first quarter, 64% of MSAs experienced a decline in auto delinquency rates, compared to 49% in fourth quarter 2010. “Today, national auto delinquency rates are at historic lows, at half the levels found in credit card nonpayment rates and over 10 times lower than seen in the mortgage sector,” Turek said. “Lenders that have money to lend are attracted to auto finance, as it is a relatively low-risk, short-term asset and auto loan delinquencies are expected to remain at historically low levels through the end of the year. Consumers should benefit in the form of competitive offers, making purchase decisions easier and more affordable.” TransUnion’s forecast is based on economic assumptions--such as unemployment rates, consumer sentiment, disposable income and interest rates. The forecast changes as the economy deviates from a conservative economic forecast or if there are unanticipated shocks to the economy affecting recovery.

CUs take precautions as Hurricane Irene draws near

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MADISON, Wis. (8/26/11)--Although Hurricane Irene’s arrival to the U.S. mainland was still in question late Thursday, credit unions in several states, including North Carolina, were preparing for a possible landfall. The first hurricane of the season, with winds up to 115 mph, as of Thursday afternoon Irene was a Category 3 storm on a five-point scale. The storm has caused flooding and power outages across the Caribbean, and U.S. officials have warned Irene could cause damage along the east coast as far north as Maine. Agility Recovery, a CUNA Strategic Services provider, is offering, “Hurricane Irene: Current Threats & Practical Steps to Prepare, a webinar to help credit unions prepare for this weekend at 10:30 a.m. ET today. The webinar will provide an update on the threats Irene presents and the potential impact to businesses. The presentation will address the factors unique to Irene and practical steps for preparation in advance of the storm. Credit unions within range of Irene’s potential path were making preparations of their own on Thursday. At $682 million asset Marine FCU, Jacksonville, N.C., the credit union’s emergency engagement group is meeting daily to review the threat posed by the storm and plan ahead accordingly. The credit union announced Wednesday that all branches in North Carolina would be closed Saturday. Marine FCU President/CEO Craig Chamberlin said the primary focus--if and when Irene hits the area--will be setting up a command center at the credit union’s headquarters. “Our primary function isn’t to see that our branches or our ATMs are OK, but to make very certain but our people are OK,” Chamberlin told News Now. “Bricks and mortar can be replaced. People can’t be replaced.” Chamberlain said he and his senior staff were in Phase 2 of a five-phase disaster preparation preparedness plan on Thursday morning. He expected the plan would be elevated to Phase 3 by today. He estimated he and his staff had been through six hurricanes since 1995. While a Category 3 hurricane presents real danger, he said residents would leave the area if the storm elevates to “a strong Category 4.” “The biggest blessing, providing nothing changes, is that we’re on the west side of it, not on the east side,” he said of Irene. With branches in each of North Carolina’s 100 counties, $23 billion asset State Employees’ CU, Raleigh, has also prepared for Irene’s arrival. The credit union has sent extra cash to every branch east of Interstate 95, according to Leigh Brady, SECU’s senior vice president of education services. “Quite frankly we’ve already seen an increase in members coming to get extra cash,” Brady said. “I think some of it is accommodating people who are leaving the affected areas already.” Brady said the credit union has no plans to close branches early today. SECU branches are not open on Saturday. “We’ll make whatever accommodations we need to make for employees,” Brady said. The North Carolina Credit Union League (NCCUL) staff reached out to credit unions in the eastern part of North Carolina on Wednesday. “We wanted to ensure that our credit unions had all the resources and information they need to properly implement their disaster preparedness plans and get ready for the storm,” said NCCUL President/CEO John Radebaugh. “All credit unions that were contacted reported that they were carefully following their disaster preparedness plans while carefully monitoring the movement of Irene.” After passing over North Carolina, Hurricane Irene is expected to remain a hurricane alongside of Virginia, Maryland and Delaware, heading through New Jersey to the New York metro area and New England through Sunday (Property Casualty 360 Aug. 26).

VolCorp elects three board members

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NASHVILLE, Tenn. (8/26/11)--Volunteer Corporate CU (VolCorp), Nashville, Tenn., elected three board members at its annual meeting on Aug. 18.
Elected to three-year terms on the board of directors were:
* Janice Jones, CEO, United Southeast FCU, Bristol, Tenn.; * Wade Stapleton, CEO, LifeWay CU, Nashville; and * Todd Swims, CEO, Leaders CU, Jackson, Tenn.
New board officers elected included:
* Chairman, Ken Swann, CEO, City of Memphis CU; * Vice chairman, Gary Land, CEO, Chattanooga (Tenn.) Area Schools FCU; * Treasurer, John Jacoway, executive vice president/chief financial officer, Southeast Financial CU, Franklin, Tenn.; and * Secretary, Karen Jordan, CEO, P&G Jackson (Tenn.) Employees FCU.
Other members serving on the board include, Mike Haggard, CEO, HealthNet FCU, Cordova, Tenn.; and Bonnie Sensing, CEO, Nashville Firemen’s CU. VolCorp is a not-for-profit financial cooperative that serves natural person credit unions nationally.

Two Harbors FCU targeted by text-message scam

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TWO HARBORS, Minn. (8/26/11)--Members of Two Harbors (Minn.) FCU have been targets of a text-messaging scam using the credit union’s name. Members have been receiving text messages reading, “Two Harbors FCU Notice: Your Card 4287-xxxx has been deactivated,” according to the Two Harbors Police Department (Duluth News Tribune Aug. 25). People who call the contact number in the text message are prompted to type in their credit card number. The line disconnects after the credit card number is entered. Two Harbors FCU advises members receiving the bogus texts to contact the credit union.”

Filene study How to handle choice overload in the CU

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MADISON, Wis. (8/26/11)--The assumption that consumers always benefit from having more options to choose from does not always hold. In some cases, consumers benefit from fewer, rather than more, options. So says the latest research from the Filene Research Institute, which tells what this means for credit unions and their members. Credit unions need to know how to handle choice overload in their products and services, says "The Psychology of Choice Overload: Implications for Retail Financial Services," a Filene report authored by Alexander Chernev, associate professor, Kellogg School of Management, Northwestern University. "Retail is retail, whether you're selling prom dresses, chocolates, or even checking accounts," says Ben Rogers, Filene research director. "Consumers consider their available options and choose. For retail firms like credit unions, part of your responsibility is to make those choices easier." The research outlines three ways credit unions can make choices easier for members:
* Know that less is more. Interviews with credit union CEOs indicate that many recognize the need to pare their offerings to an efficient core group, said the report. Credit unions should ask themselves why streamlining decisions like those made recently in banking by ING Direct and Ally work. * Actively curate the credit union's offerings. Instead of reducing the number of available options offered by the credit union, consider focusing on a smaller number of options promoted by the credit union. Instead of overwhelming a new member, the credit union may decide to promote only the subset of options that most likely appeal to new members. Sometimes telling the consumer which option is the most popular is enough to help the member decide. * Organize around defaults. Take a cue from the benefits area. The practice of allowing employees to opt out of 401(k)s, rather than asking them to opt in, results in dramatically higher participation rates. Setting default options at a credit union can ease the decision burden on members. Deciding whether each option is better or worse than a default option is easier than evaluating each option against all other options.
"Credit unions have made great strides toward becoming full-service financial institutions. But the urge to be all things to all people has a downside," said Rogers. Instead, offer a well-considered assortment of products--big enough so members have choices, but small enough so the options don't overwhelm.

Georgians saving more still short on expenses

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ATLANTA (8/25/11)--Georgia's credit union members are saving more, but would still be short on their ability to pay long-term expenses if they lost their income, according to the most recent Georgia Credit Unions "Paying Attention" poll. Georgia Credit Union Affiliates (GCUA) compiles the quarterly report based on poll responses from more than 6,000 credit union members and from aggregated data from credit unions statewide. More than half (52%) of Georgians polled could not cover essential expenses for more than three months, and more than three-fourths could not do so for more than a year. However, that's an improvement from survey results a year ago, when 76.3% indicated they couldn't survive more than three months, said GCUA. "The good news is that many Georgians are starting to realize the need to save, but the bad news is most haven't saved enough to cover essential expenses more than three months," said Mike Mercer, GCUA president/CEO. "Our poll shows that paying down debt and cutting expenses are among the top strategies consumers are using to get back to saving consistently." The new report revealed that 40.8% of Georgians set a savings goal this year. Of those with a goal, 55.2% believe they can attain it. Roughly 35.5% of respondents said they eliminated vacations to cut costs; 58.1% indicated high gas prices were a factor. Still, 58.5% said they plan to take a trip in the next 12 months. GCUA also compiled savings and lending data from 38 credit unions representing 91% of credit union assets and 84% of members in the state. It found a trend toward savings with mixed results in lending. Among the findings:
* Savings deposits increased 9.12% for the first half of 2011 and 9.43% for the past 12 months. * Business lending continued growth of 17.01%, but this growth rate is based on a low loan base because the current business lending cap for credit unions is low, at 12.25%, said GCUA. (Credit unions, state leagues and the Credit Union National Association are pushing Congress to raise the lending cap to 27.5% to help generate 140,000 jobs and $13 billion in business loans without cost to the taxpayer). * Used-car lending, which has been in a slump, grew 3.97% during second quarter; * First mortgage balances rose 3.1% in the first six months of 2011 and 11.81% the past year, largely due to refinances at larger credit unions; * Members' bankruptcy filings dropped in June by 9.72% from June 2010; * Credit card balances decreased 3% in the first half of 2011 but increased 2.6% from the same period a year ago; * Certificates of deposit dropped 1.8%; consumers unwillingness to lock their money away a long term with historically low rates was likely a factor, said GCUA.
To access the full report and a video, use the link.

Dakota CUs Fill the Boat for flood victims

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BISMARCK, N.D. (8/25/11)--Dakota credit unions and members helped to make the “Fill the Boat” campaign--a credit union drive that began in June to collect donations and cash for flood victims in North Dakota and South Dakota--successful, said the Credit Union Association of the Dakotas (CUAD). Roughly 44 credit union locations throughout the two states collected more than $2,000 worth of donated supplies and nearly $8,000 in cash donations through the Young Credit Union Professionals (YCUP) organization when the campaign concluded last week. The YCUP network consists of credit union employees--between the ages of 18 and 40--who are dedicated to increasing social, professional and service-related opportunities for young credit union professionals in North and South Dakota. Two YCUP members, CUAD’s Amy Jo Johnson and Steve Rahrich, took a 14-foot U-Haul vehicle on a road trip through the North Dakota towns of Edgeley, Jamestown, Devils Lake and Minot to pick up the items from some of the participating credit unions. Donated items in Fargo and Grand Forks were collected by Roxanne Mullenberg, a Postal Family FCU employee and YCUP member. Half of the items were delivered to Our Lady of Grace Food Pantry in Minot; the other half went to Bismarck’s local food banks. In South Dakota, Amy Kleinschmit, a YCUP member and CUAD director of compliance, collected donated items from some credit unions in the Sioux Falls area. The items were donated to the Sioux Falls Red Cross office for Missouri flood victims. Several other participating South Dakota credit unions delivered their collected items directly to the Red Cross. The $8,000 in donated cash will be divided between two charities. Half will go to the Minot Recovery Fund, and half to CUAid.

Tech CU offers Solar mart loans

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SAN JOSE, Calif. (8/25/11)--Technology CU is offering two new solar loan programs for homeowners installing solar energy panels. Called Solar $mart, the loans complement San Jose, Calif.-based Tech CU’s work with the Bay Area Climate Collaborative on SunShares, a program through which residents and businesses receive discounts on their solar energy purchases by taking advantage of group buys from solar providers. Regional expansion of SunShares builds upon a pilot program the City of San Jose began for its employees in 2010 with assistance from the U.S. Department of Energy’s Solar America Cities program. Tech CU members who participate in a SunShares solar installation can choose to receive a pre-negotiated discount using SunPower solar panels or they can participate in a group discount with a solar provider. The $1.5 billion asset credit union will provide financing for all projects through Solar $mart. It offers two loan options: the Solar $mart Home Equity Line of Credit, a secured loan that provides financing up to 80% loan-to-value with credit limits from $5,000 to $75,000; and the Solar $mart Unsecured Loan, which offers 10- or 20-year term loans from $10,000 to $50,000. Also, individuals may qualify for federal tax credits for up to 30% of their solar project.

Hoosman invited to MLK Memorial ceremony

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WASHINGTON (8/25/11)--Hubert Hoosman Jr., president/CEO of Vantage CU in Bridgeton, Mo., will attend the Martin Luther King Jr. National Memorial Dedication Ceremony and Dream Gala this weekend in Washington, D.C. Hoosman helped raise more than $1 million for the memorial during the past five years, and was invited to the dedication ceremony, the $670 million asset credit union said. “I just want to enjoy the moment,” Hoosman said, “I want to see [the monument],” which he called the “highlight of my career.” In 2006, Hoosman became aware of efforts to build the memorial when the credit union was asked if it could make a contribution. Vantage pledged $50,000, and asked the nation’s credit unions to contribute to helping build the memorial. Hoosman, who also is active in the 250-member African American Credit Union Coalition, received the group’s endorsement for the fundraising effort. While in Washington, D.C., Hoosman will attend the Interfaith Prayer Service Saturday morning, the Dream Gala Saturday evening and the official dedication on Sunday.

Filene reports on governance who owns CUs

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MADISON, Wis. (8/25/11)--Credit unions’ rapid modern rise--from small, fragmented lenders in the 1970s to increasingly sophisticated full-service institutions today--distracts from the fact that governance structures, in stature and in practice, have changed slowly in response, according to new research from the Filene Research Institute. “Power and Governance” Who Really Owns Credit Unions?" by Robert F. Hoel, professor emeritus for the College of Business at Colorado State University, offers critiques of annual meetings, CEO compensation, antidemocratic board renewal policies, hostile mergers, and board perks--to separate credit union rhetoric from credit union reality, said Filene. The governance report, the first of three, encourages directors and leaders of credit unions to:
* Measure members’ sense of credit union ownership and assess the relative governance power of the actors in their credit union to determine whether that power hierarchy is in the best interests of members. * Take steps to overcome governance biases. For example, a bias toward lack of board professionalism can be addressed through targeted board recruitment efforts. A bias toward excessive risk aversion can be addressed through in-depth analysis and discussion of risk-reward tradeoffs. * Expect regulators to overreact and try to dominate credit union decision-making in difficult economic environments. * Operate the credit union with transparency. Withholding information from members is unnecessary if the board is doing its job well. * Don't fret about low turnout at credit union annual meetings. Most owners of large institutions do not wish to be directly involved in the governance process. Instead create an extravaganza and use the event primarily as a marketing opportunity. * Realize that they share the responsibility to prioritize goals and demand high levels of organizational performance. Credit union members won’t demand anything. They will just take all or part of their business elsewhere if the credit union doesn't deliver good economic value.
“Power and Governance: Who Really Owns Credit Unions?” will be followed by two more reports: “Boards and CEOs: Who’s Really in Charge?” and “Boards and Leadership: How Boards Can Add More Value.” All three take aim at credit union governance, both the good and the bad, and prescribe real-world responses. To download the complete report, use the link.

Scholarship deadline for Community CU and Growth Conference extended

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MADISON, Wis. (8/25/11)--The deadline to apply for a 2011 Community Credit Union & Growth Conference scholarship co-sponsored by CO-OP Financial Services and the Credit Union National Association (CUNA) has been extended to Sept. 9. Applications originally were due Sept. 2. Up to 30 scholarships to the CUNA event will be awarded, and scholarship winners will be notified by Sept. 15. The conference is scheduled for Oct. 24-27 in San Francisco and will focus on how to turn growth-generating ideas into action plans. Use the resource links below to access the conference website, including a simplified scholarship form and scholarship criteria, or to apply for the assistance.

Defense Council chair rings NASDAQ opening bell

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NEW YORK (8/25/11)--The Defense Credit Union Council (DCUC) Board of Directors was on hand at Times Square Wednesday morning as Board
Click to view larger image Defense Credit Union Council (DCUC) Board Chairman Frank Padak rang the opening bell at NASDAQ Wednesday morning on Times Square. Padak, other DCUC board members and DCUC President/CEO Roland "Arty" Arteaga visited the stock exchange at the conclusion of DCUC's Annual Meeting. Pictured are Padak and executive board members Patricia Kimmel, Jean Yokum, Dave Davis, Denise Floyd and Gordon Simmons. (Photo provided by the Defense Credit Union Council).
Chairman Frank Padak rang the opening bell at NASDAQ to usher in another day of stock trading. Padak is president/ CEO of Scott CU, a $695 million asset credit union based in Collinsville, Ill. With him for the ceremony were DCUC First Vice Chair Patricia Kimmel, president/CEO of Belvoir FCU, Woodbridge, Va.; Second Vice Chair Jean Yokum, president/CEO of Langley FCU, Newport News, Va.; Treasurer Dave Davis, president/CEO of Pacific Marine CU, Oceanside, Calif.; Secretary Denise Floyd, president/CEO of Fort Sill (Okla.) FCU; and Immediate Past Chair Gordon Simmons, president/CEO, Service CU, Portsmouth, N.H. DCUC President/CEO Roland "Arty" Arteaga was also in the group, which was in New York for the DCUC Annual Meeting Monday through Wednesday morning. The event received wide coverage, with these networks reporting on the opening of the market: CNBC, CNBC India, CNBC.com, Itsaboutfinance.com, Business News Network (Canada), NDTV in New Delhi, Bloomberg, Fox Business and Fox affiliate KTVU, reported DCUC. Attendees at the conference were feted to a continental breakfast and a behind-the-scenes tour of the stock exchange. The day was a good day for the stock exchange, which finished up 144 points. The video of the ceremony is also posted on NASDAQ.com.

Advantis CEO named vice chairman Fed San Francisco advisory group

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SAN FRANCISCO (8/25/11)--Ronald Barrick, president/CEO of Advantis CU, Milwaukie, Ore., has been appointed vice chairman of the Federal Reserve Bank of San Francisco’s Twelfth District Community Depository Institutions Advisory Council. It was also announced that Darin B. Moody, president/CEO of Utah First FCU, Salt Lake City, has been named to the council. Moody will serve a three-year term. The council represents banks, thrift institutions and credit unions of various sizes within the Twelfth District. The council provides input to the district bank’s senior management on a variety of topics such as economic and banking conditions, regulatory policies, and payment issues.

Dorety wins a Wegner Lifetime Achievement Award

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MADISON, Wis. (8/25/11)--The National Credit Union Foundation (NCUF) has named Tom Dorety, president/CEO Suncoast Schools FCU in Tampa, Fla., as a winner of 2012 Herb Wegner Memorial Award for Lifetime Achievement. Dorety’s award will be presented March 19 at a dinner hosted by NCUF during the Credit Union National Association’s (CUNA) 2012 Governmental Affairs Conference in Washington D.C. “When you look at Tom’s lifetime efforts, you realize that this is the perfect description of dedication, compassion and success within the credit union world,” said NCUF Awards and Recognition Committee Chairman Bob Schumacher. “No matter what Tom does, it seems to turn into something good for someone else.” Dorety has been president/CEO at Suncoast Schools FCU since April 1996, after serving as a senior vice president for eight years. Suncoast Schools is the largest credit union in Florida and the 11th largest in the U.S., with nearly $5 billion in assets. He has served as chairman of CUNA, Filene Research Institute, the National CEO Roundtable, and MEMBERS Trust Company. He currently serves on the boards of the CO-OP Financial Services Network, Hillsborough County Education Foundation and All Children’s Hospital. Dorety was chairman of CUNA from 2008-2009. During that time, he helped build consensus with fellow board members and served on almost every major committee. “Tom stepped up to provide strong leadership during some of the most challenging times in the history of credit unions,” said Dan Mica, former president/CEO of CUNA. “It was his passion and ability to motivate people to action that stand out as defining characteristics of his incredible leadership. He built consensus when there was no consensus. He brought people to action when they hesitated to get involved. And he addressed issues that nobody else wanted to even talk about.” At his own credit union, Dorety initiated the Suncoast for Kids Foundation, which contributes $1 million per year to public schools on Florida’s West Coast. He was successful in rallying Tampa-area credit unions to build a new intensive-care wing and a new Center for Autism at All Children’s Hospital in St. Petersburg, Fla. Through Dorety’s leadership, Suncoast developed a culture of educational volunteerism and community outreach, NCUF said. Suncoast offers financial literacy programs and student operated credit unions branches in local elementary, middle and high schools. The credit union supports a program for at-risk school students, provides college scholarships and grants, and holds annual school supply drives for both teachers and students. Dorety is one of two 2012 Herb Wegner Memorial Award for Lifetime Achievement recipients. The second winner will be announced soon.

CUs 75th birthday generates 18 hike in loan volume

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DALLAS (8/25/11)--Promotions related to the 75th anniversary on July 15 of Dallas-based Resource One CU have resulted in an 18% hike in its loan volume, with $9.38 million in gross loans, according to the Texas Credit Union League. The $310.8 million asset credit union kicked off its "75 is the new 25" vehicle loan promotion, which offered 0.25% off all vehicle loans in July. The credit union also entered the loans in a contest for a $7,500 cash prize (LoneStar Leaguer Aug. 22). During the credit union's birthday week, Resource One's marketing team visited all branches with a cash cube, the children's mascot Roary the Lion and free giveaways and prizes. To generate buzz about the celebration, employees videotaped more than 150 member testimonials, which can be viewed on the credit union's YouTube Channel. Use the link to view it. The city of Houston also declared July 15th as "Resource One Day." "By offering the 0.25% birthday discount to our members, and focusing on our auto loan recapture program, we saved our members money and had the biggest loan volume year to date," said Chief Lending Officer Mike Roark. Four of the nine branches broke their loan records--in volume and in dollars booked.

Boomers need CUs retirement advice

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MADISON, Wis. (8/24/11)--As the stock market wobbled last week and concerns about 401(k) plans grew, a study released Thursday pointed out that middle-income Baby Boomers--those with salaries for $25,000 to $75,000--are poorly prepared for retirement. Credit unions have yet another opportunity to provide solid financial education for a significant segment of their membership. Battered retirement accounts, dropping home values and boomers' lack of personal savings are shattering the retirement confidence of middle-income Baby Boomers, said Middle-Income Boomers, Financial Security and the New Retirement, a study from Bankers Life and Casualty Co. Center for a Secure Retirement (CSR). The CSR study focused on 500 middle-income Americans between 47 and 65 years old (PRNewswire Aug. 18). It found nearly 21% of boomers have not seen any rebound in the value of their retirement accounts, 16% report they owe more on their mortgage than their home is worth, and 19% have less than $10,000 in retirement savings. The economic meltdown has forced members of this group to reshape their expectations about retirement and significantly adjust their lives to the financial realities of the new retirement norms. Despite the bleak outlook, boomers are demonstrating a commitment to save for retirement. Nearly one-fifth (18%) say they are saving more money now than before the recession, and more than half (55%) are spending less on discretionary items. Other findings:
* Twenty percent of boomers whose employers contribute to a retirement plan report that their employer reduced matching contributions, while 95% of boomer who participate in these plans increased their personal contribution. * Although 52% have a 401(k) and 48% own an Individual Retirement Account (IRA), 14% have no 401(k), IRA, pension or any other type of retirement account. * Thirty-two percent of boomers surveyed have already paid of their mortgage, but another 48% said they do not expect to have it paid off by the time they retire.
Credit unions can take financial education action on the Baby Boomer retirement front, according to the Credit Union National Association's 2011 Environmental Scan. Some choices include:
* Increase members' financial literacy with a variety of educational approaches: in-person classroom, textbook, online-interactive tutorials, gaming, just in time articles, mobile apps and experiential learning. The learning-by-doing is the most effective. * Make sure your financial literacy program doesn't have any gaps in subject matter. Many credit unions provide budgeting and debt management topics but people in different life stages need different kinds of information. * Tap into the $13 trillion boomer market and help boomers manage their funds. Members who retire are looking to consolidate financial relationship, and credit unions lose members at this point. Expand the credit union's expertise in estate planning, insurance, Medicare and Social Security topics. Make sure they understand the tax implications of prematurely withdrawing retirement funds. * Many adults learn financial education at work. Work with select employee groups in your membership to promote saving for retirement early in members' careers. Tailor your financial educational program by finding out what boomers value most.
Don't forget the rest of the membership. Younger members will grow older and need retirement planning when their turn arrives. But they also have the added burden of paying into a system under the strain of the boomers' retirement years. The earlier credit unions educate young workers about their future prospects, the more likely they will make wise financial choices and perhaps avoid the boomers' experience of not preparing enough for retirement.

CU System briefs (08/23/2011)

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* ST. PAUL, Minn. (8/24/11)--Kristina Wright, vice president-association services for the Minnesota Credit Union Network, was named as a Finance & Commerce 2011 Top Women in Finance honoree. The program recognizes the efforts of women who make notable contributions to their professions and communities. Wright oversees and manages MnCUN's dues supported operations. She also served five years on the Minnesota Jump$tart Coalition for Personal Financial Literacy, two of them as vice president. Wright is MnCUN's staff liaison for its international partnership with a Paraguan credit union association. This year's honorees include four CEOs, six partners and shareholders, several presidents and senior vice presidents, and business owners from various industries. Wright and other honorees will be recognized at an awards ceremony in Minneapolis on Nov. 10 … * TRENTON, N.J. (8/24/11)--Garret Komjathy, director of the New Jersey Division of Banking announced Monday he will leave state government on Aug. 31 (The Daily Exchange Aug. 23). He said he plans to pursue management opportunities in the commercial banking industry, where he spent more than 25 years as a senior relationship manager in that industry. Before he joined the division, he held senior corporate banking positions at GE Commercial Finance, Fleet Bank and HSBC … * HARRISBURG, Pa. (8/24/11)--The Pennsylvania Credit Union Service Centers Inc. (PaCUSC) Board has appointed Troy Garvin, CEO of Omega FCU, Pittsburgh, to fill out the unexpired term of Karl Larson. Garvin's term will expire in 2012 (Life is a Highway Aug. 23). PaCUSC provides assistance to credit unions in Pennsylvania and Delaware that are interested in joining the shared branching network … * ONTARIO, Calif. (8/24/11)--A Richard Myles Johnson (RMJ) Foundation/CUNA Mutual Golf Tournament Aug. 15 in Newport Beach,
Click to view larger image Click for larger view
Calif., raised more than $37,000 for the state foundation for credit unions in California and Nevada. The event attracted 90 players and 37 sponsors. The tournament's winning group was this team from BIT Statement. Pictured are Mark Selland, Dave O'Malley, Rick Thompson and Matt Leventhall. Second place went to Jeff Smith, SkyOne FCU; Blaze Holbert and Greg Holley of Primary Partners Financial; and March Chandler of CU Dealer Alliance. Madison, Wis.-based CUNA Mutual Group served as title sponsor. Other major sponsors included CO-OP Financial Services, CUDL, and Financial Services Center Cooperatives, SchoolsFirst FCU, and California League Services Corp. (Photo provided by the California and Nevada Credit Union Leagues) …

Illinois collections staff address issues in roundtables

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NAPERVILLE, Ill. (8/23/11)--Collectors roundtable events have been hosted for the past dozen years by Creditors Resource Services (CRS), a division of the Illinois Credit Union League (ICUL) Service Corp. Two roundtables held recently at ICUL’s offices in Naperville and in downstate Glen Carbon, saw attendance by 65 individuals representing 35 credit unions. Topics discussed included bankruptcy, foreclosures and short sales, changing laws relative to repossessions, and the use of social media as part of the collections process. At the meetings, recovery specialists in the state can network, "They discover their situations are the same, no matter their location, and learn how to deal with their members in unique way to be successful.” said Sheila O’Leary, manager of CRS. The last roundtable included the real estate and bankruptcy arenas. “Sometimes opportunities are brought to our attention that we may not have dedicated time toward pursuing, and these meetings provide us with an avenue to follow up afterwards and learn more from our counterparts on a one-on-one basis," said Ann Ellingsen, vice president, Niles Township Schools CU, Morton Grove. LSC hosts a listserv so collectors around the state can network and seek advice on issues they face in their credit unions. About 150 people representing more than 100 credit unions of all sizes are on the listserv. This use of technology has significantly encouraged more interaction among colleagues, said CRS. The roundtables and listserv also act as a support group and help foster the sharing of techniques. The dialogue also helps participants benchmark their efforts against what is happening in the marketplace, as well as continue to raise the profile of how collections contribute to a credit union’s bottom line, and move past the perception of dubious tactics used in the past, said CRS.

Springfield Mo.s largest CU changes name

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SPRINGFIELD, Mo. (8/24/11)--Postal Federal Community CU (PFFC), the largest credit union in Springfield, Mo., has changed its name to Blucurrent CU, it announced Monday. The more than $130 million asset credit union said it changed its name to eliminate confusion about who can open an account there. PFCC was established in 1929 by Springfield postal workers but later expanded its membership to include federal employees. In 1994, it was granted the ability to serve everyone who lives or works in a 10-county area in southwest Missouri. "We've always struggled with the misconception that you had to be a postal or federal employee to use our credit union," said Steve Pierson, president/CEO of Blucurrent CU. "By creating a more inclusive name, this will greatly help us spread the message." To develop the new name, the credit union worked with Weber Marketing Group, a firm that has assisted more than 40 credit unions through renaming projects. "By making the decision to change our name, we are in no way changing our philosophy or turning away from our postal- and federal-based heritage," said BluCurrent board Chairman David Phelps. "We aren't being sold or merged. Account holders are going to see the same great people working here, and receive the same great service they're used to." For more information about the name change, use the link.

Virginia earthquake prompts evacuations

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MINERAL, Va. (8/24/11)--Early reports have credit unions, like most other businesses along the East Coast, largely unscathed by Tuesday's 5.8 magnitude earthquake near Richmond, Va., even though the event produced tremors felt as far away as Toronto, Cuba, and Missouri. The tremors shook buildings in Washington, D.C. and New York City, causing numerous building evacuations and early closing of federal government offices. Credit unions in the area had not reported damage by press time. "We are not aware of any damages to credit unions at this point, but our property and casualty claims staff is in the process of contacting policyholder credit unions in the area," said Phil Tschudy, media relations manager for CUNA Mutual Group. The credit unions closest to the earthquake's epicenter are in Charlottesville, which has five credit unions, and Richmond, which has about 26 credit unions. Richmond is 41 miles southeast of the epicenter in Mineral, a small farming and bedroom community in rural Louisa County. It has a population of 430 (Bloomberg.com Aug. 23). Virginia CU, which is headquartered in Richmond and has branches throughout the state, said it had no damages to report. "It was quite an experience," said Jean Hulman, senior vice president of marketing. "But I'm not aware of any issues, nor any reports of damages, and as far as I know communications are working at our branches," she told News Now. Hulman described the earthquake, which hit at 1:51 p.m. ET, as a lot of "rattling, shaking, noise and rumbling. We weren't sure what it was. We did evacuate, but not for very long," she said. She noted the entire office park where the credit union is based was evacuated. Hulman had not heard of other credit unions with damage and said local media were reporting "minimal" damages in the Richmond area. No state-chartered credit unions had reported closing as of 3 p.m., according to Werner Paul, deputy commissioner of Virginia Bureau of Financial Institutions, Richmond. The earthquake could be felt for about one minute in the bureau's Richmond offices, but the bureau did not evacuate, he told News Now. The Federal Reserve Bank of Richmond was open and operating, and its employees did not evacuate, a spokesperson told Bloomberg.com (Aug. 23). As of press time, News Now was unable to reach the Virginia Credit Union League, which is located in Lynchburg, or the National Credit Union Administration in Arlington, Va. Several credit unions contacted had staff out of the office, but it was not clear whether that was related to the earthquake or any evacuation. The epicenter was 83 miles south of Washington, D.C. (MarketWatch Aug. 23). Federal government buildings such as the White House, Capitol and the Pentagon were at least partly evacuated when they shook for about a minute. Many at the Credit Union National Association's headquarters in Washington evacuated the building during the quake, but staff were soon allowed back inside. The federal government dismissed all the Washington metropolitan offices early and said the operating status for today would be posted by 4 a.m. News reports said that cell phone service was knocked out in New York City and that a nuclear power plant momentarily lost power but was operating normally. Computerworld reported that traffic on Twitter and Facebook "lit up with the news" on Tuesday afternoon. "People were quick to turn to their favorite social networking sites to report the quake, with many tweeting or posting while the shaking was still going on," the publication said. It noted that a reporter in Maine learned of the quake on Twitter before feeling the shock waves that reached that state. The earthquake, which originally was reported as a 5.9 magnitude before being reduced to 5.8, is the largest to hit Virginia since 1897, according to the U.S. Geological Survey (Bloomberg.com Aug. 23).

No Suckers Here helps youth prep for managing money

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SAN ANTONIO (8/24/11)--Generations FCU in San Antonio designed its “No Suckers Here” program to convey the importance to youth of being prepared to deal with personal financial matters, said the Texas Credit Union League. The program works with high schools, colleges and universities in the area. Generations meets with school administrators to determine the specific needs of their student body and then tailors a program designed to fit those needs (LoneStar Leaguer Aug. 23). “The financial education of our children is one of the most important initiatives that a credit union can undertake,” said Generations CEO Tim F. Haegelin. “These programs reach out and guide students as they begin down the path to financial independence.” One partner is Palo Alto College (PAC). Generations met with its administrators and determined that many PAC students have different needs than traditional college students. Many students come from low-income families, most are first-generation college students, and nearly all work jobs as they pursue their degrees. Few of PAC’s students have a primary financial institution; they use payday lenders instead. The credit union tailored a six-week program that covered such topics as basics of banking, budgeting and savings; decision-making; living on your own; identity theft; and getting out of financial trouble. Generations also provided similar financial education programs to faculty, administrators and parents. Generations said that when these concepts are adopted at home and reiterated at school, they are reinforced in the mind of the student. Generations points out that its education classes are not lectures. Facebook, YouTube, blogs, and video blogs are some of the methods it used to engage students. The credit union launched the “No Suckers Here” in three schools, and within five months, their program expanded to five high schools and two colleges. The credit union is on task to double those numbers this school year. “No Suckers Here” helped Generations win a 2011 Desjardins Youth Financial Education Award, earning first place in the $150 million to $500 million in assets category at state level competition. Generations now advances to judging by the Credit Union National Association at the national level.

Study Four trends will define banking experience

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MOUNTAIN VIEW, Calif. (8/24/11)--Increased regulatory pressures, the rapid adoption of mobile devices, heightened customer expectations and relationships will reshape the financial services industry over the next decade, according to the “Intuit 2020 Report: The Future of Financial Services.” The report identifies four trend areas that will shape financial services: 1. A New Playing Field for Financial Services: Regulatory pressures will increase and competition will grow from both traditional competitors and new entrants. These forces will lead financial institutions to explore new business models, collaboration and partnerships, and increased consolidation. Credit unions are already seeing consolidation efforts in the number of mergers among credit union, leagues and corporates. Four such mergers were introduced last week. 2. Shifting Segments, Changing Markets: Member-consumer demand for financial services will increase across all age groups. The two largest contingents--aging baby boomers and GenYers--will demonstrate particularly acute shifts in their needs and types of products and services they purchase, said Intuit. Credit unions have made efforts to attract Gen Y members using social media, focus groups and marketing campaigns Young & Free--available to one credit union in each state from Currency Marketing--provides tools to engage the youth market, through a combination of social media and contests to find a young, media-savvy credit union spokesperson. Competition to serve mid-market businesses will also intensify, slimming financial institution margins However, the overall small-business sector will continue expanding, with the total number of small and personal businesses increasing by more than seven million during the next decade. Most of this growth will come from micro and personal businesses of less than $1 million in revenue, creating opportunities for financial institutions that can serve these firms efficiently. To compete in the small business lending market, credit unions are pressing Congress to increase their member business lending cap to 27.5% of assets from 12.25%. Doing so would 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, according to the Credit Union National Association (CUNA). 3. The New Customer Connection: Technology’s role in the customer experience will take center stage. With increased cost pressures and a growing demand for flexibility, accessibility and personalization, financial services organizations will accelerate their use of technology to meet customer needs, said Intuit. Cloud computing platforms and applications will combine with advanced analytical tools, ever-larger data sets, and social and mobile computing to reshape the way the financial services industry designs and delivers value-added products and services to customers. 4. Reputation and Relationships Rule: Institutions that use technology to serve up useful customer insights will win. During the next decade, the financial service industry will shift its focus from transactions to customized value-added services. Credit unions are working to create member loyalty for the long run. At A+ FCU, Austin, Texas members can earn points through the PlusPoints Loyalty program by using services such as their debit cards, direct deposit and online banking. When members accumulate points they earn a higher interest on savings checking or become eligible for discounts on loan products. CUNA’s Creating Member Loyalty Program is designed to use exception member service as a differentiator to create member loyalty. For more information use, the link. Intuit Financial Services helps banks and credit unions grow by providing on-demand solutions and services that make it easier for consumers and businesses to manage their money.

CUNA to IWash. PostI Compliance costs could spark more mergers

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WASHINGTON (8/24/11)--Regulatory burdens in the form of higher compliance costs could lead to more credit union mergers, Bill Hampel, chief economist for the Credit Union National Association, told The Washington Post Sunday. Hampel was commenting after Synergy One FCU, with $180 million assets, based in Manassas, Va., received regulatory approval to merge into the $1.53 billion asset Apple FCU, based in Fairfax, Va. As credit unions struggle with higher compliance costs linked to the Dodd-Frank Wall Street Reform Act, those costs could lead to more credit union mergers, Hampel told the Post. “The compliance burden is a fixed cost, regardless of size,” he said, adding small credit unions may feel the need to join a larger institution to manage the additional paperwork. “What’s more, credit unions may consolidate further as net interest margins--the difference between what they earn on loans and pay on deposits--continues to decline amid tepid loan demand,” Hampel added. Partly because of mortgage defaults, regulators required more credit unions to merge or liquidate assets following the financial crisis, Hampel told the Post. CUNA said 37 credit unions merged or liquidated in 2010, compared with 13 in 2007. To read the article, use the link.

Four South Carolina CUs honored for fin-ed

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COLUMBIA, S.C. (8/24/11)--Four South Carolina credit unions earned state-level recognition for their leadership in financial education through the 2011 Credit Union National Association (CUNA) Desjardins Financial Education Awards. The state awards will be presented at the 2012 Annual Meeting of the South Carolina Credit Union League on April 21. The Desjardins Youth Financial Education Award is given to credit unions that demonstrate leadership in providing financial fundamentals to young people, in advocating for greater public and legislative support of the need, and in working together with like-minded organizations. First-place winners in 2010-11 are:
* SPC CU, Hartsville, $50 million-$150 million in assets, which hosted its third annual “Take the Stage Youth Concert” for financial literacy in 2011, scripting lessons on the credit union difference, value of membership, and money management. Targeted to students ages 13-25, the concert is promoted through member and employee communications, targeted mailings, billboards, table tents at youth-oriented businesses, and posters in branches and community venues. * Palmetto Citizens FCU, Columbia, $150 million-$500 million in assets, which engaged in two financial education programs: volunteer support for educators and participation in National Credit Union Youth Week and the Youth Savings Challenge. In-school activity with the National Endowment for Financial Education High School Financial Planning Program and Junior Achievement (JA) reached 1,620 students in 25 schools and organizations with its 22-person Financial Education Team. April 2011 savings incentive drawings and two special seminars brought 110 young people into new club accounts and 26 other new youth accounts. * SRP FCU, North Augusta, more than $500 million in assets. It helped create reusable materials from the NEFE High School Financial Planning Program, the “JA Presents NEFE” modules, and a supplemental corresponding activity to enhance the credit, identity theft, and insurance modules.
New this year, the Desjardins Adult Financial Education Award identifies outstanding credit union programs in adult and community education, especially those blending instruction with awareness and collaboration in building consumer knowledge. The first winner in South Carolina is Palmetto Citizens FCU, Columbia, in the $150 million-$500 million in assets category. Formerly an educators’ credit union, PCFCU learned that many adults share the need for financial fundamentals. Its free seminars for members and the community provide an open forum for questions and deliver a take-home resource guide. The credit union provides free dinner during the hour-and-a-half events and offers customized versions for businesses, schools, churches, and other community organizations. First-place winners in the state program move on to national judging.

Robbery suspect shot by police during getaway

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SOUTH BEND, Ind. (8/23/11)--A man was in stable condition in a South Bend, Ind., hospital after being shot Saturday morning by a police officer who was pursuing him after a credit union was robbed. The incident began when a man in dark clothing and a mask entered Notre Dame (Ind.) FCU's South Bend branch shortly before 9:30 a.m. Saturday and demanded money. Witnesses who had seen the man acting suspiciously before he went into the credit union called police (The Associated Press Aug. 20). The robbery suspect fled the credit union on good and police officers gave chase. They caught up with him on a bridge over the Indiana Toll Road south of the credit union. Police told media that when they confronted the suspect, he pulled a handgun from behind his back and pointed it at an officer, who fired shots at the suspect (WNDU.com Aug. 20). He received treatment at the scene, then was transported to the hospital where he underwent surgery. Charges have not been filed as of Monday (South Bend Tribune Aug. 22).

Uptick in Maine robberies prompts CU webinar

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PORTLAND, Maine (8/23/11)--An uptick in robberies in Maine has prompted the Maine Credit Union League to provide information and resources for credit unions in the state. Since the first of the year, Maine has had 10 robberies of financial institutions, including five at credit unions, said the league in its newsletter, Weekly Update (Aug. 19). Three holdups took place in the past month. The league is helping credit unions review procedures and take further precautions to ensure staff and members are safe when a robbery occurs. "Thankfully, no one has been injured in any of the robberies, and of course, that is the top priority," said league President John Murphy. "However, when a trend like this happens, it does raise the level of uncertainty and concern, especially with staff." Last year the league held a webinar on robbery procedures and is making it available to its member credit unions at no cost. "Staff education is vital in helping credit unions to respond properly to a robbery, and having that knowledge available for credit union staff to access is an important part of keeping everyone safe," Murphy said. He also noted the league can help credit unions in responding to media inquiries after a robbery incident. The league will also have a live webinar in December. On a broader national scope, the Credit Union National Association has several resources related to robberies at credit unions. Use the links for more information.

CU System briefs (08/22/2011)

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* LOS ANGELES (8/23/11)--A man allegedly robbed three Orange County, Calif., financial institutions, including two credit unions, in less than 90 minutes Saturday morning. The man, dubbed the “Triple Threat Bandit," is suspected of holding up Orange County FCU in Fullerton at 9:39 a.m. (PT), Union Yes FCU in Orange at 10:15 a.m. and U.S. Bank in Buena Park at about 11 a.m. (Los Angeles Times Aug. 22). In each incident, the suspect passed a note to the teller demanding large bills, “100s and 50s,” according to authorities. He was described as a muscular black man in his 30s with bright white teeth and freckles, wearing a white polo shirt and blue jeans … * VIRGINIA BEACH, Va. (8/23/11)--Two men were convicted and sentenced Friday to prison for three robberies and attempted robberies of banks and credit unions in Norfolk, Va. Dion N. Brown, 21, Norfolk, pleaded guilty to charges of robbery and attempted robbery and was sentenced to 11 years in prison. Willie Lee Huggins, 26, of Texas, allegedly the getaway vehicle driver, was convicted of robbery and conspiracy, and sentenced to 16 years in prison. The holdups occurred on May 11 at a branch of the Bank of Commonwealth and on June 30 at a supermarket branch of Virginia Beach-based Chartway FCU. Brown also was charged in an attempted robbery on July 12 at another credit union branch (The Virginian-Pilot Aug. 20) … * OGDEN, Utah (8/23/11)--Police are seeking a masked gunman who tried unsuccessfully to hold up a gas station employee, before hijacked a woman and her car. The gunman forced her to drive to an ATM at the Ogden, Utah-based America First CU, before ordering her to drive to a nearby residential area and raping her. The incident started at about 11:20 p.m. Aug. 17 as an employee was closing a grocery/gas station. The assailant demanded cash but the employee told him the station was closed and he had no cash. The gunman ordered him inside the store. The employee was calling 911 when he heard a woman scream. Detectives identified the car and contacted the woman, who told them she had been forced to withdraw funds from her account at the ATM before being assaulted (The Salt Lake Tribune Aug. 20) … * ST. JOHN’S, Antigua (8/23/11)--The Antigua Barbuda Cooperative Credit Union League re-elected Carol Spencer-Brown to the position of president (antiguaobserver.com Aug. 20). Other members of the board are Eversleigh Warner, vice president; Inez Benjamin, treasurer; Esther Philp-Defoe, board secretary; Livingstone Samuel, assistant secretary/treasurer; Glenroy George, public relations officer; and Sylvester Joseph, Claudette Mason and Emil Michael, directors. Brown said she looks forward to working with the team to plan the way forward for the sector and especially preparing for Oct. 31, the launch date of The International Year of Cooperatives 2012, as declared by the United Nations ...

CU amid Joplin rebound from tornado

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JOPLIN, Mo. (8/23/11)--Great Plains FCU is among the Joplin, Mo., business rebounding from the May 22 tornado that devastated the city and killed 89 people. The $287 million asset credit union filed a $3.2 million permit in June to repair its building and is about 50% completed with repairs, according to President Ken Martin (Associated Press via The Joplin Globe Aug. 22) A massive tornado struck the town of Joplin, Mo., May 22 leaving the business district demolished and nearly one-third of the community devastated in its wake (News Now May 24). Great Plains FCU suffered water damage after its air conditioning and roof were hit by the tornado. Since the storm, Great Plains FCU has been operating out of a temporary modular unit. Martin estimates the credit union will be back in its former building in about a month and half. Businesses near Great Plains FCU are also rebuilding. Walgreens re-opened two stores on Aug. 15 and AT&T recently opened a 5,000-square-foot retail store. The city of Joplin issued building permits valued at $27.2 million in June, which means the city had twice as much construction during the month as it saw in the first six months of the city’s fiscal year. To read the article, use the link.

IThe StreetI At CUs consumers fare better in economic squeeze

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NEW YORK (8/23/11)--Credit union members are a "bit more comfortable" in the recession than bank customers are, thanks largely to credit unions' superior rates, according to The Street.com (Aug. 22). Low deposit rates have hit everyone, but "if you look only at credit unions, the numbers tell a different story," said the article, citing the Credit Power Index. The index measures the spread between the cost of borrowing and the benefits of saving by examining the difference between certificates of deposit rates at four terms and four loan product rates at the same terms. The higher the index, the worse things are for the consumers. At the end of July, credit unions' Credit Power Index figure stood at 17.55--nearly five points lower than the national average and more than 5.5 points better for consumers than the interest rate climate found at banks. "It's no wonder these nonprofit institutions have seen their number swell since the recession as Americans seek out better rates," said The Street. Credit unions "beat banks on deposit rates across the board," the article said. Banks have better mortgage rates, but on fixed mortgages in December, credit unions and banks were in a "statistical dead heat." However, some said credit unions had the advantage in that they typically charge lower fees as well. Credit unions also won on these other rates:
* For personal unsecured loans, credit unions charged 10.49%, compared with 12.54% charged at banks; * On 36-month home equity loans, credit unions charged 5.61% while banks charged 6.75%; and * On 48-month new auto loans, credit unions charged 3.68% while banks charged 4.72%.

Michigan CUs PAC in states top 15

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LANSING, Mich. (8/23/11)--The Michigan Credit Union League Action Fund (MCULAF), the Michigan Credit Union League’s (MCUL) state political action committee (PAC), has moved steeply up the list of the top 150 Michigan PACs, ranking 15th just after the mid-point of 2011, according to the Michigan Campaign Finance Network. As of July 20, MCULAF had raised $129,984, a 15.7% increase over the $112,372 raised during the same time frame in 2009 (Michigan Monitor Aug. 22). The 2011 numbers place MCULAF ahead of PACs operated by AT&T, the Michigan Restaurant Association, the Michigan Bankers Association, the Michigan Association of Insurance Agents, Michigan Association of CPAs and the Michigan Chamber of Commerce. “This is an outstanding accomplishment, and recognition is owed to all those individuals who contribute to our state PAC, as well as to the many devoted Michigan credit union people who dedicate time and energy to PAC fundraising,” said Dave Adams, CEO of MCUL & Affiliates. “Strong PACs are an important part of our legislative advocacy efforts--but we can't afford to ease up in our efforts,” he added. “It’s worth noting that the Comerica PAC alone placed 13th at $138,922.”

CU draws attention with stealth ads vs. Chase

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SAN DIEGO (8/23/11)--San Diego County CU is using what one branding expert terms a “stealth comparative” ad campaign against big banks’ higher fees by subtly turning a tag line of giant bank JPMorgan Chase & Co. against the bank. The $4.97 billion asset credit union is using more than 80 billboards along San Diego-area freeways asking the question, “Chased by HIGH FEES?” (North County Times Aug. 21). The credit union’s billboard campaign is a response to a Chase Bank advertising campaign launched in early 2008 that changed the noun of Chase Bank to a verb, when it unveiled its brand campaign “Chase What Matters,” Liz Goodgold, a San Diego-based branding expert, told the newspaper. Goodgold dubs the credit union’s campaign “brilliant,” because it refers to Chase without using the bank’s formal name and without making a side-by-side comparison, such as with a taste test. That makes the ad feel like an inside joke to viewers, she told the paper. The billboards are designed to encourage consumers to look for better banking opportunities because they are frustrated with banks, Teresa Halleck, president/CEO San Diego County CU, told the paper. The ad refers to big banks in general and not Chase in particular, she added. San Diego County CU has 28 branches in the region. Halleck told the paper she isn’t sure if the credit union needs to add any more--because members can only use a certain number of branches. And when a big bank, such as Chase, keeps adding branches, consumers are the ones who end up paying for them, she added. Chase plans to add 100 branches in California--12 of them in San Diego County, the article said. To read the article, use the link.

SBLFs are taxpayer-funded MBLs arent says AVCU

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MONTPELIER, Vt. (8/23/11)--It’s time for S. 509, the Small Business Lending Enhancement Act of 2011, to move forward so that credit unions can help Vermont and the U.S. add a projected 140,000 jobs to the economy, Joe Bergeron, president of the Association of Vermont Credit Unions (AVCU), wrote in letters to Vermont’s Senate delegation last week. The legislation seeks to increase the cap on credit union member business lending (MBL) to 27.5% from 12.25% of assets, with limitations for safety and soundness (Newslines Express Aug. 19). He thanked the lawmakers for their support of S.509 and asked them to push the bill to the Senate floor when they return to Washington after the Labor Day recess. Credit unions have offered to Congress another $13 billion of stimulus for small business “for a long time now . . . above and beyond what they already provide,” he added. “Meanwhile, never-ending concerns about job growth and the economy continue while Congress overlooks this offer by credit unions.” Bergeron cited disappointing new job reports, anxiety about President Barack Obama’s yet-to-be-announced jobs plan, and taxpayer dollars being used to stimulate hiring via the Treasury’s Small Business Lending Fund (SBLF) as further evidence that the legislation needs to move forward quickly. He also pointed out that the boost offered by an MBL cap increase would come at no cost to taxpayers. “The recently announced Treasury release of $418 million to small banks in SBLF awards is taxpayer funded,” Bergeron wrote. “By contrast, passage of S. 509 would provide over 30 times that amount with no taxpayer cost at all. He also addressed the needs of Vermont. “Likely new loans for small businesses in the first year of enacting S.509 are estimated at $75 million, equating to about 815 new jobs (using the Council of Economic Advisors job multiplier). Those figures are quite significant by Vermont standards,” Bergeron concluded. If passed, the MBL legislations would infuse $13 billion in new small-business capital into the U.S. economy, said the Credit Union National Association.

Disclosures release first official music video on YouTube

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MADISON, Wis. (8/23/11)--The Disclosures, the credit union industry’s “thrift rock” duo, have released their first music video on YouTube, a flashback style video for their song “98 Problems (But a Bank Ain’t One)” from their debut album, (Hey, We’re) The Disclosures. The “98 Problems” video stars “younger versions” of band members Christopher Morris and Chad Helminak as they discuss the differences between credit unions and banks. Morris is director of communications for the National Credit Union Foundation. Helminak is the web and member development strategist at the Wisconsin Credit Union League. “It’s our hope that credit unions find this content useful on their member websites and social networks to help better educate their members on credit union philosophy,” Morris said.

Florida CUs preparing for Hurricane Irene

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MADISON, Wis. (8/23/11)--Residents of the southeast U.S.--including credit unions--this week are keeping a close watch on Hurricane Irene, which is expected to hit Florida early Friday. Irene gained hurricane status Monday morning, pelting Puerto Rico with as much as 12 inches of rain and winds of about 75 mph, which makes it a weak Category 1 hurricane (PropertyCasualty360 Aug. 22). It is expected to get stronger the next five days. Agility Recovery, a CUNA Strategic Services provider, has been in contact with credit unions since Sunday evening, according to Marketing Director Scott Teel. In a tropical storm/hurricane situation, communication with clients runs both ways, Teel said. Agility contacts its clients to ensure they are prepared for the storm, and clients contact the company to be on alert for a possible emergency situation. Agility shares two pieces of advice with all clients: review the company’s hurricane preparedness checklist and have a communication plan in place. “The checklist has proven to be a simple and effective tool to look at when a storm is bearing down,” Teel said. “It provides a step-by-step process during a very hectic time.” The communication plan between credit union leadership and employees is essential to keep the credit union running or get it back online after a hurricane hits--and having financial institutions are critical to a community’s recovery in the wake of a hurricane, Teel said. “Grocery stores, gas stations and financial institutions are the three main businesses that need to get back on line to serve the community,” Teel said. “That said, cash is king at this time. We stress that credit unions have ample reserves and some means to operate their ATMs at this time, if possible.” Credit unions should also have a communication strategy in place with their core processors, Teel said.

N.J. s public deposits plan becomes law

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TRENTON, N.J. (8/23/11)--New Jersey Gov. Chris Christie Friday signed legislation that paves the way for public entities to seek the best possible return for taxpayer dollars by allowing the state's credit unions to serve as eligible public depositories. S-1807/A-1597 will enable counties, school boards, municipalities and other government entities to use credit unions as depositories. Previously credit unions were prohibited from serving as eligible public depositories by the Government Unit Deposit Protection Act, which mandates depositories have Federal Deposit Insurance Corp. (FDIC) insurance--even though credit unions' government-backed insurance with the same limits is through the National Credit Union Administration. New Jersey's credit unions can now compete with banks in the $15 billion public deposit market. With credit unions typically paying on average better rates and offering lower fees than banks, public entities will have a new option as they seek the best yield during tough economic times, said the New Jersey Credit Union League (NJCUL). "This market has historically been dominated by a small group of banks," said league President/CEO Paul Gentile. "Credit unions will bring competition to public deposits that will likely drive better returns and ultimately help taxpayers. Even if credit unions aren't ultimately chosen by the public entity, their presence in the market raises the competitive bar," he added. The bill arrived on the governor's desk with strong bi-partisan support. It passed the Assembly 67-8 in late June and the Senate in June 2010 by a 29-6 vote. Prime sponsors in the Senate were Senate President Stephen Sweeney and Senate Republican Conference Leader Robert Singer. In the Assembly, prime sponsors were Speaker Sheila Oliver and Deputy Speakers Upendra Chivukula and John Wisniewski. The legislation was supported by the credit union league, the New Jersey League of Municipalities, the New Jersey School Boards Association and the New Jersey Association of Counties. "We thank the sponsors spearheading this legislation and making the case that public entities should have the right to seek the highest available returns on taxpayer dollars," said Gentile. He noted the governor "also recognized the role credit unions can have in driving competition. This legislation fits into efforts of the governor and legislative leaders to find ways to hold property taxes in check." NJCUL Chairman Shawn Gilfedder, president/CEO of McGraw Hill FCU, East Windsor, said the league "was able to spearhead legislation that empowers New Jersey credit unions to add to their business line while also potentially helping taxpayers. In a time when regulators and lawmakers seem to be clamping down on financial service providers including credit unions, this is a proactive step in the right direction." A core mission of New Jersey credit unions is to help improve financial literacy in the state. An amendment in the legislation mandates that credit unions contribute funds to a nonprofit entity dedicated to promoting financial literacy in the state based on the level of public deposits the credit union takes in. "Financial literacy is sorely needed in New Jersey," said Gentile. "This legislation will help financial literacy efforts expand through credit unions' activity with municipal deposits. That's a win-win for consumers and public entities alike."

N.Y. governor inks streamlined wild card parity law

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ALBANY, N.Y. (8/23/11)--New York Gov. Andrew Cuomo has signed legislation amending the "wild card" law created to give state-chartered credit unions parity with their federal counterparts, said the Credit Union Association of New York (CUANY) Monday. The wild card law was originally extended to credit unions in 2007. It permitted state-chartered credit unions to petition the state's Banking Department to exercise specific powers authorized for federal charters. However, the process was plagued by inconsistency and inaction on the part of the Banking Department, said CUANY. The new law, sponsored by Assemblyman Rory Lancman (D-Metropolitan) and Sen. Joseph Griffo (R-Utica/Rome), streamlines the wild card approval process. Now, the Banking Department must:
* Make a final determination on a wild card request within six months; * Provide notice to the applicant on approval or denial within 10 days of the decision; * Post a wild card request to the weekly bulletin for public comment within 120 days of receipt; and * Explain in writing why an application has been denied.
If such an explanation is not provided, the department's determination will be subject to judicial review. If the superintendent does not act within the set timeframe, the applicant can demand a determination within 30 days. "Amendments to the wild card law were essential to preserving a healthy dual-chartering system in New York state," said CUANY President/CEO William J. Mellin. "It enhances the state charter, thereby making it an attractive option for federal charters looking to convert and for any newly chartered credit unions. We want to thank Senator Griffo and Assemblyman Lancman for recognizing the importance of this bill and for guiding it through their respective houses."

NEW Law allowing N.J. CUs to accept public deposits signed

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TRENTON, N.J. (FILED 10:35 a.m. ET 8/22/11)--New Jersey Governor Chris Christie has signed legislation that enables credit unions in the state to serve as eligible public depositories and allow public entities to seek out the best possible return for taxpayer dollars. Gov. Christie signed the law Friday. It will enable counties, school boards, municipalities and other local government entities to use credit unions as depositories. Prime sponsors of S-1890/A-1597 were Senate President Stephen Sweeney, Senate Republican Conference Leader Robert Singer, and Assembly Speaker Sheila Oliver and AssemblyDeputy Speakers Upendra Chivukula and John Wisniewski. "This market has historically been dominated by a small group of banks," said New Jersey Credit Union League President/CEO Paul Gentile. "Credit unions will bring competition to public deposits that will likely drive better returns and ultimately help taxpayers. Even if credit unions aren't ultimately chosen by the public entity, their presence in the market raises the competitive bar." More detail will be in Tuesday's News Now.

Action vs. PMI Mortgage wont affect CMG MIs business

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SAN FRANCISCO (8/22/11)--The decision by Arizona's Department of Insurance to place PMI Mortgage Insurance Co. (MIC) under supervision will not impact CMG Mortgage Insurance Co.'s. (CMG MI) new business originations or serving of existing policies with credit unions, CMG MI said Friday. There will be no interruption in daily operations, with CMG MI continuing to write business in all 50 states. "In addition to the company's solid operating performance and strong financial footing, CMG MI continues to enjoy the strong support of its joint venture partner CUNA Mutual Group," said CUNA Mutual Group Vice President Sean Dilweg. "CMG MI will continue to benefit tremendously from CUNA Mutual's management and financial strength as well as PMI's ongoing operational services." He pointed out that CMG MI is a stand-alone, incorporated entity with its own capital and has dedicated staffing from its shareholders. "CMG MI is strong and committed to the credit unions it serves," Dilweg added. Key factors in CMG MI's solid financial position:
* CUNA Mutual Group's statutory capital grew to $1.45 billion through June, up $30 million from year-end 2010. Its financial strength rating from A.M. Best rating agency is "A" (excellent) with a Stable outlook. * As of June 30, CMG MI had among the industry's strongest financial and operating ratios. * As a separate legal entity, CMG MI's investment grade ratings--BBB from both Standard & Poor's and Fitch--are based primarily on CMG MI's own capital, operations performance and loss mitigation, independent of its shareholders. The Fitch rating was affirmed in July and S&P's has been stable since February 2010. *CMG MI has the industry's lowest portfolio delinquency ratio at 5.3% as of June 30, an improvement from 5.6% on March 31. This compares with an industry average in the 16% range. * As of June 30, the company held a strong liquidity position with claims-paying resources, backed by cash and readily marketable securities of $328 million. * The liquidity compares favorably with its $171 million in loss reserves for claims as of the end of second quarter 2011. * The 2-to-1 ratio of liquidity to reserves is one of the highest in the mortgage insurance industry. CMG MI's delinquency inventory improved in second quarter, resulting in a favorable release of more than $8 million in previously established loss reserves.
PMI Group said Friday the regulator also placed PMI Insurance Co. (PIC) under supervision and had appointed a supervisor. The order requires the PIC and MIC to cease issuing new mortgage insurance commitments, effective at the end of the business day Friday, unless otherwise approved by the director of the department or the supervisor. They may issue mortgage insurance policies under pending commitments through Sept. 16, at which time the regulators will determine whether they would go into conservatorship. Government-sponsored enterprises (GSEs)Fannie Mae and Freddie Mac previously approved the use of PMI Mortgage Assurance Company (PMAC), a subsidiary of MIC, as a limited, direct issuer of mortgage guaranty insurance in certain states where MIC is unable to continue to write new business. As a result of the order, pursuant to restrictions contained in Fannie Mae's approval, PMAC is no longer eligible to offer mortgage insurance in any states. It is exploring opportunities to further capitalize PMAC to get the GSEs' approval back.

N.Y. Fed CEO discusses economy hears CUs challenges

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NEWARK, N.J. (8/22/11)--Credit union leaders from New Jersey got a chance to provide Federal Reserve Bank of New York CEO William Dudley with information about the economic challenges they face during a private luncheon Thursday in Newark. The luncheon was attended by 150 business and credit union leaders, including New Jersey Credit Union League President/CEO Paul Gentile. Speaking to the group, Dudley said it's unlikely that the nation will fall back into a recession (The Daily Exchange Aug. 19). "This was a great opportunity to hear directly from Mr. Dudley on what the Fed sees happening with the economy going forward and what role it is playing," said Gentile. "He was clear that the Fed believes the economy will perform better in the second half. It was also an opportunity for him to hear directly from New Jersey credit union leaders on the challenges they are facing. Our credit unions in attendance did an excellent job in providing Dudley with real-world, hands-on insight into their current challenges," Gentile added. Some of those challenges included difficulties with the appraisal process given the loss in value to homes, the need to raise the cap on credit unions' member business lending, a lack of lending opportunities, and others. Dudley and his team encouraged credit union leaders to remain in contact with the Fed on these and other issues, said the league. Dudley discussed several topics related to growth and recovery from the economic crisis, including the role of bank examiners, who scrutinize bank lending practices. The examiners, he said, try not to "let the needle swing too far over to conservative in terms of lending practices." "We have been very clear that we do not want to impede the ability of banks to make good solid loans to businesses," he added. Dudley reported that in a survey in May of small businesses, more than two-thirds reported stable or increased sales in first quarter, up from 50% last year. When asked about their future outlook, while the majority of business owners--56%--were neutral. Many more said they were optimistic--27%--rather than pessimistic--7%. Reluctance by businesses to expand was a hindrance to growth, Dudley said, noting he believes a double-dip recession is not in the future. "Major sectors of the economy that normally pull the economy down into a recession are already down," he said, adding, "it's much harder for them to go down further." He noted that New Jersey has a highly diverse economy, with more than 40% of those over age 25 in the state having a college degree. New Jersey is "well-positioned for growth," Dudley added. Credit unions, the leagues and the Credit Union National Association (CUNA) are pressing Congress to raise credit unions' member business lending cap to 27.5% of assets from 12.25% by supporting the Small Business Lending Enhancement Act (H.R. 1418 and S. 509). Doing so would add $13 billion in new small business loans and create 140,000 jobs with no cost to taxpayers, CUNA says. CUNA has urged credit unions to reach out to their legislators while lawmakers are in their home districts during the August congressional recess. For more information, see CUNA's Action Alert link.

Three mergers announced in Pa. N.Y. and N.J.

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MADISON, Wis. (8/22/11)--Three pairs of credit unions in Pennsylvania, New York and New Jersey announced plans for mergers late last week. Paragon FCU, a $330 million asset credit union in Montvale, N.J., will merge into Visions FCU, a $2.6 billion asset credit union based in Endicott, N.Y., effective within 90 days, the credit unions said Friday after receiving approval from the National Credit Union Administration. The combined credit union will have 29 branches in parts of New York, New Jersey and Pennsylvania, more than $2.9 billion in assets and more than 166,000 members. Visions President/CEO Frank E. Barrish noted the merger will expand the credit union's presence into northern New Jersey and that Paragon's branches complement Visions' current locations. He said Visions has been "an exceptional performing credit union. Despite challenging economic conditions, Visions has been able to perform at the highest levels." Paragon President/CEO John S. Fiore said the merger will provide members "with access to a significantly broader menu of products and services" as well as Visions' "robust delivery systems." In the second merger, $10.5 million St. Vincent's Employees FCU, New York City, will merge with $241.7 million asset McGraw-Hill FCU, based in East Windsor, N.J. The credit unions made the announcement Friday after St. Vincent's members approved the merger, which will be effective Sept. 1. The smaller credit union serves employees of St. Vincent's Hospital, which gained prominence as the primary admitting hospital to those injured in the Sept. 11 terrorist attacks. The credit union's employees worked round the clock to ensure money was available to members and worked side-by-side with hospital employees volunteering in many capacities. The hospital's closure in 2010 impacted the credit union's ability to grow, said a press release. The resulting combined credit union will have 18,500 members and $267 million in assets, said Shawn Gilfedder, McGraw-Hill FCU president/CEO. Arlene Bernard and Norma Carrasquillo, longstanding employees of St. Vincent's, will become McGraw-Hill's business development executive and branch administrator, respectively, to provide continuity to existing members. Franklin Mint FCU (FMFCU), Broomall, Pa., and Sentry FCU, Brookhaven, Pa., will officially merge during fourth quarter of 2011 and will keep Franklin Mint FCU as the name of the combined credit union, they announced Thursday. Members of Sentry FCU voted Wednesday to approve the merger. FMFCU currently has 32 branch locations and serves Crozer-Keystone Health System employees and families and more than 1,500 partnering organizations and communities. It has more than 70,000 members. After the merger is complete, it will have 33 locations and combined assets of more than $720 million.

CUs gear up back-to-school programs

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MADISON, Wis. (8/22/11)--Several credit unions nationwide have geared up back-to-school programs to help students smoothly transition from summer vacation into the start of the school year. When Wisconsin students from the elementary grades through high school go back to school this fall, they’ll learn money management by operating 95 credit union branches inside Wisconsin schools. Youth-run branches now account for around 18% of the offices operated by the state’s 212 credit unions. Their more than 5,500 young savers have stashed close to $3 million in deposit accounts. That’s up from $2 million just a year ago. “Teachers know that credit unions’ motivation is in people, not profits, and the trust in credit unions has provided a best practice for teaching hands-on financial skills in schools statewide,” said Brett Thompson, president/CEO of the Wisconsin Credit Union League. The state Department of Public Instruction has defined competencies for personal finance that students should acquire by grades 4, 8 and 12. Schools with limited resources have used credit union support to advance their own financial education efforts at no additional costs to taxpayers, the Wisconsin league said. Other examples are:
* United Labor CU (ULCU), Kansas City, saw the back-to-school season as the perfect time to launch its Financial U for Apprenticeship Programs (FinU), a turnkey financial planning program that reaches new workers in union trades (The Missouri difference Aug. 16) . As students are learning how to become the best in the business in union construction trades, they can learn how to be a more informed and intelligent consumer in the same classroom setting. FinU has seven modules that address creating short-term and long-term financial plans, basic budgeting, investing for the future, managing credit, protecting assets using financial services, personal insurance and understanding employment and retirement benefits. Each module has an accompanying audio-visual presentation, workbook, CD and certificate of completion for each student, and is taught by competent financial professionals led by ULCU President Tim Vogler. * The July Monthly Media Talking Points, created by the Ohio Credit Union League, focuses on the timely topic of managing back-to-school expenses (eLumination Newsletter Aug. 10). The monthly talking points can be used to help start conversations with local media. A template press release of the tips is available for credit unions to customize and send to local newspapers and radio and television stations. The month’s Media Watch shares seven public relations rules in today’s minute-to-minute information-gathering society that a credit union should apply to its communications (The Missouri difference Aug. 9) . * Vantage CU, St. Louis, collected “Tools For Learning” for hundreds of area children, who will head back to school with new school supplies. In an effort to help those less fortunate, Vantage will collect school supplies through Aug. 31 to benefit KidSmart, an educational supply store providing teachers with free school supplies for students in area classrooms (The Missouri difference Aug. 9). * Kansas City CU recently held a school supply drive to Support Della Lamb Community Services. Each year, the drive begins in conjunction with the credit union’s KidsFest. Members and employees donate supplies and funds to support the back-to-school needs of local students (The Missouri difference Aug. 9). * Educational Community Credit Union (ECCU), Kalamazoo, Mich., is participating in “Operation School Supplies,” a program to benefit students in each ECCU office’s school district. The success of Operation School Supplies depends on the generosity of community residents to drop off school supplies at any ECCU branch through Aug. 31 for students who cannot purchase what they need. The local business partners of Operation School Supplies are asking the community to donate or purchase supplies such as backpacks, pencils, rulers and paper, but the credit union will collect any school supplies. Supplies will be distributed to kids in each ECCU branch’s school district.

CU in Galveston reports Money Mission success

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GALVESTON, Texas (8/22/11)--Coastal Community FCU in Galveston, Texas, has been offering Money Mission for just three weeks and said it already is impressed with the response it has garnered. Money Mission is an interactive Web-based simulation designed to educate users (mainly targeted to 16- to 19-year-olds) in the fundamentals of financial literacy. It is made available to credit unions through a partnership between the Credit Union National Association and the Wisconsin Credit Union League. Money Mission includes inputs from external data such as stock market prices and cost of living changes; user choices in the area of life-event choices; money management; a user configurable experience including customizable characters (“avatars”) and selectable vehicles; and animated lessons teaching users critical financial principles. “It’s been three weeks and we already have 218 gamers coming from all over Texas,” Carol Gaylord, president/CEO of the $40.6 million asset credit union, told News Now. “We haven’t done a lot of advertising yet, so I’m amazed at the response. Kids are in a hurry to learn, so I’m thrilled. “When I heard the statistic that more college students file for bankruptcy than graduate, I knew we had to reach and teach our high school students financial literacy,” Gaylord added. The key reason Gaylord said she’s excited about Money Mission is because the main avenue to reach kids nowadays is through multi-media--what she calls “an online playing field.” She has big plans for Money Mission in the credit union’s future. “We had a back-to-school week event [Aug. 13] and 325 kids were there,” Gaylord said. “We gave out free school supplies and immunizations, and advertised Money Mission. We had a video game truck there called ‘Road Gamers,’ and hopefully next year we can tie that into Money Mission.” Coastal Community FCU also plans to show Money Mission videos on TVs in the lobbies of its branches; to ask area high school teachers to incorporate Money Mission into their school’s curriculum; and to incorporate Money Mission through the local Rotary “Interact Club” for high school students. “My favorite part of the program is that it offers national scholarships to seniors who submit an essay about what they learned playing Money Mission,” Gaylord said. “The participating credit unions fund the scholarships. The more credit unions participate, the more scholarships are awarded.”

CUs get advice from federation on mortgage loans

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NEW YORK (8/22/11)--While the economic downturn continues to challenge financial institutions nationwide, Louisiana credit unions should be prepared to take advantage of the current opportunities to expand their mortgage lending portfolios, particularly among low- and moderate-income populations, said a representative of the National Federation of Community Development Credit Unions.
Community Development Credit Union CEOs pose with Anne Cochran, CEO of the Louisiana Credit Union League, and Terri J. Fowlkes director of community development investments for the National Federation of Community Development Credit Unions at the Louisiana Credit Union League’s recent Annual Meeting and Convention, Aug. 3-6 in New Orleans. Pictured, from left, are: Helen Godfrey-Smith, CEO, Shreveport (La.) FCU; Cochran; Bill Bynum, CEO, Hope FCU, Jackson, Miss.; Mignhon Tourné, CEO, ASI FCU, Harahan; and Fowkles. (Photo provided by the National Federation of Community Development Credit Unions)
Credit unions also should consider obtaining secondary capital and nonmember deposits to satisfy the regulatory demands of a growing balance sheet and a potential increase in membership, said Terri J. Fowlkes, director of community development investments at the federation. She made the comments at the Louisiana Credit Union League's recent Annual Meeting and Convention, held Aug. 3-6 in New Orleans. “With interest rates holding steady at rock-bottom levels, credit unions need to diversify their portfolios by continuing to make mortgages and increase their operating income,” Fowlkes said. “Responsible loans made to qualified members provide credit unions with a much better yield than they’ll get from most other investment vehicles, and help members build wealth through home ownership.” Fowlkes acknowledged the difficulty many credit unions have in making loans where no secondary markets exist, particularly for non-traditional loans such as Individual Tax Payer Identification Number loans, manufactured housing loans. and co-op loans. Through its CDCU Mortgage Center LLC, the federation purchases conforming and non-conforming affordable mortgage loans from member CDCUs. The CDCUs may maintain the servicing relationship on the loan, but the federation purchases that asset and provides the credit unions with capital to make more loans. Since 2005, the federation has purchased about $10 million in loans from CDCUs nationwide, and looks to expand its portfolio by several million dollars this year. The program is for credit unions that want to expand their lending activities and may not have enough capital to do so. “We conduct a rigorous due diligence on all the loans we purchase,” Fowlkes explained. “We have been growing our portfolio very slowly to ensure we buy performing assets from CDCUs. Given the economic distress across Louisiana, the federation and the Louisiana league are exploring ways to increase credit union mortgage lending--through the CDCU Mortgage Center Secondary Market and by providing financial resources in the form of deposits and secondary capital to Louisiana's low-income designated credit unions. The product was created in the late 1980s, and the federation was invested in dozens of credit unions nationwide for over 20 years. “Secondary capital is vital for CDCUs serving low-income communities, because it allows a credit union to grow without diluting its net worth,” she said. It allows credit unions to take calculated risk to help members, without incurring problems with regulators. Only low-income designated credit unions can accept secondary capital, according to National Credit Union Administration regulations, and only member CDCUs are eligible for secondary capital loans from the federation. A reception hosted by the federation was open to all conference attendees, and was sponsored by two member CDCUs, Shreveport (La.) FCU and ASI FCU, Harahan.

Pa. CU aids striking Verizon workers with loans

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HARRISBURG, Pa. (8/22/11)--Norristown Bell CU, Blue Bell, Pa., is offering a short-term, interest-only loan to help some of the 45,000 Verizon employees who went on strike earlier this month. The employees on strike are members of the Communications Workers of America and International Brotherhood of Electrical Works, according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Aug. 19). The loan term is three months. A borrower would be responsible only for interest payments the first two months--about $0.84 on a $1,000 loan--with the balance due the third month. Although $50 million asset Norristown Bell obtained a community charter in 2010, about one-third of its membership is employed by Verizon. Verizon is one of the Pennsylvania’s largest employers, with more than 13,300 employees in the state, PCUA said.

CU System brief (08/19/2011)

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* RALEIGH, N.C. (8/22/11)--The Piedmont Chapter of the North Carolina Credit Union League Thursday elected Joy Watts, president/CEO of Charlotte-based Carolina Postal CU, to the league board of directors, announced the league (Weekly Update Aug. 18). Watts succeeds Bill Flowers of Carolinas Telco FCU, Charlotte, who retired in June. Watts is a 35-year veteran of the credit union movement and has been president of Carolina Postal CU since 1997. She was selected as the league's Ronald J. Hutchins Credit Union Person of the Year in 2010. She served as secretary from 1999 to 2003 of the North Carolina Credit Union Executives Society, on the credit committee of First Carolina Corporate CU, and on the board of Carolina Credit Union Services and at the Piedmont chapter …

NASCUS summit to discuss reg legislative exam issues

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ARLINGTON, Va. (8/22/11)--The National Association of State Credit Union Supervisors (NASCUS) will host its annual gathering of the state credit union system, the State System Summit, in Chicago Sept. 14-16. This year’s event is a forum for collaboration on economic, regulatory, legislative and examination issues facing the state credit union system. The agenda 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 climate. Some of the topics and presenters summit include:
* “Issues and Priorities of the Consumer Financial Protection Bureau (CFPB),” former Massachusetts banking commissioner Steve Antonakes; * “National View of Systemic Risk,” Bill Haraf, commissioner of the California Department of Financial Institutions; * “Two Points of View: Supervising State Banks and CUs, Dual Regulators Share Perspectives on Economic Recovery,” a panel including state regulators Gavin Gee (Idaho), Ed Leary (Utah) and Janet Powell (Oregon); * “The State of the Credit Union Examination,” an interactive discussion featuring state regulators, league executives and credit union CEO, including Roger Little, past NASCUS chairman and retired Michigan regulator; Stacy Augustine, Northwest Credit Union Association; and others to be announced; * “National Credit Union Administration (NCUA) Outlook for 2012,” NCUA Chairman Debbie Matz; * “How Credit Unions are Performing in Today’s Challenging Economy,” Jeff Post, CUNA Mutual Group; * “Report from the NCUA Inspector General,” Bill DeSarno, inspector general, NCUA; * “Prompt Corrective Action Implications for Credit Union Capital,” Clifford Rossi, Tyser Teaching Fellow and executive-in-residence, Center for Financial Policy, University of Maryland; and * “Critical Compliance Update, Compliance,” Bill Klewin, associate general counsel, CUNA Mutual.
Also, NCUA national and regional staff will join NASCUS regulators for the NASCUS/NCUA Interagency Dialogue on Sept 16. For credit union attendees, the annual “State Credit Union Issues Briefing” on Sept. 16 will provide a forum for discussion on the latest credit union challenges. NASCUS’ Directors College also will take place Sept. 16. Registration is on the NASCUS website.

Marketing ICU Day through the recession

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MADISON, Wis. (8/22/11)--With an economy that is hard on both consumers and businesses, emphasizing the credit union difference on International Credit Union (ICU) Day, Oct. 20, is more important than ever according to some within the credit union movement. Two credit unions--one on a shoestring budget and one with slightly higher budget--shared how they market their credit unions on ICU Day. In Las Vegas, Colleen Hermann, member service representative at $14.5 million Stage Employees FCU, knows how to celebrate the credit union difference on a tight budget. “We celebrate ICU Day because it makes our members more aware of what a credit union is,” Hermann said. “Some of them think of us as a bank and don’t know we’re member-owned. Our budget is tight, but this year we’re putting up signs and giving a little gift of Post-Its and pens.” East River FCU, with $20 million in assets, of Madison, S.D., actually received some benefit when the recession hit in 2008, according to President/CEO Mechelle Johnson. “Our community has embraced the credit union,” Johnson said. “With great employees and good rates in place, and banks getting bad press, East River grabbed the opportunity to promote the credit union difference.” As a result, Johnson decided to invest more heavily in marketing this year, spotlighting the credit unions on billboards, in radio and newspaper ads and a digital billboard. The strategy has achieved results. Johnson says loans and membership have increased. Since some construction projects in front of the credit union are finishing up this fall, East River is using ICU Day to thank members for their loyalty and patience during construction. Among the ICU Day initiatives the East River FCU has planned:
* Community shred-it day with the first 100 attendees receiving grocery totes with goodies and ID theft information); * World coloring pages for kids; * ICU Day T-shirts for employees, with shirt give-aways for members; * A canned-goods drive; * A “Going green” campaign, promoting online transactions, e-statements and mobile access; and * An open house with punch and cookies.
To promote ICU Day, East River FCU will send a press release to local papers and hang a banner.

CU System briefs (08/18/2011)

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* PONTIAC, Mich. (8/19/11)--Thomas Pruente, 75, has been a loyal member for 52 years of St. Joseph Mercy Hospital Pontiac FCU, Pontiac, Mich. As a hospital employee he joined because the credit union was on campus and convenient. "When we would get our paychecks every two weeks, we could just go straight over there and deposit our checks, and they wouldn't charge you to cash them either," he said. "I've felt very comfortable with them all these years, so even when I retired I've stayed with them. They've now gotten to the point where they can pay my utilities bills for me automatically [through online bill pay], which is nice." He added, "I've got credit cards, cash and checks with them. I usually go into the credit union every six to eight weeks to take out cash. I like that every time I call them I'm talking to a person and not talking to a voice on the phone. I can't say enough for how convenient and dependable they are." He was one of six people interviewed about their long-time loyalty by CNN Money.com Wednesday … * HARRISBURG, Pa. (8/19/11)--"Mystery shopper" bogus checks are circulating again, according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Aug. 18). PCUA received a report from Service Center for Credit Unions in Bensalem, which received a phone call about a $1,300 check issued in its name with a Mystery Shopper letter. Other credit unions in the Philadelphia area have also reported this fraud. The checks included in the letter are counterfeit … * KNOXVILLE, Tenn. (8/19/11)--Three people were sentenced Monday for their roles in the armed robbery of Greenville, Tenn.-based Consumer CU's Morristown branch on April 9, 2010. Joseph and Jennifer Smallwood, both 31 and of Speedwell, Texas, and Vanessa Patridge, 26, of Gatlinburg pleaded guilty on May 25. Joseph Smallwood, who admitted helping Dale Walker Johnson plan and commit the robbery and using a firearm, was sentenced to more than seven years in prison. Jennifer Smallwood received 30 months and Patridge 21 months in prison for being accessories after the robbery. Each defendant was ordered to pay $15,122 in restitution, pay a $100 fine, and serve three years of supervised release after prison. Johnson will be sentenced on Nov. 14 (US Fed News Aug. 16) …

Catalyst Membership would reflect CU demographics

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DULUTH, Ga. (8/19/11)--If the National Credit Union Administration (NCUA) approves the proposed merger of Southwest Bridge Corporate FCU and Georgia Corporate FCU and Southwest Bridge members vote to approve the merger, the resulting Catalyst Corporate FCU will have 869 member institutions, including 850 credit unions--representing more than $87 billion in assets. The NCUA board is scheduled to meet Aug. 29 to consider the proposed merger. On Aug. 30, Southwest Bridge members will participate in an in-person meeting to finalize a vote on the proposed merger. Upon receiving a go-ahead from the regulator and from Southwest members, Catalyst Corporate will begin business on Sept. 6. The composition of the 850 credit unions that would join Catalyst Corporate provides an accurate reflection of the credit union industry nationwide, in terms of asset size and it would serve both large and small credit union, according to Greg Moore, CEO of Georgia Corporate FCU: “When you look at the demographics of credit unions nationwide, particularly the disposition of asset sizes, you find a remarkable parallel with the membership of the future Catalyst Corporate.” A review of Catalyst membership debunks the notion from chatter and press accounts that the new corporate will serve a disproportionate number of smaller-sized credit unions, the corporate said. About 18% of the nation’s 7,442 credit unions have $100 million or more in assets. Just over 15% of Catalyst’s member credit unions are in that asset range. Thirty-seven percent of the nation’s credit unions are smaller than $10 million in assets, while about 33% of Catalyst’s membership fit that category. Half of Catalyst’s member credit union will fall in the asset range of $10 million to $100 million. The percentage of credit unions nationwide in that range is 43%. “The data tell us that the Catalyst membership will be representative of the credit union movement in the U.S.,” Moore said. “As such, Catalyst will continue to meet the needs of credit unions--from small to large--with a full suite of innovative, efficiency-centered products and services,” he added. Roughly 74% of the previous capital shareholders of the two corporates have come on board as capitalizing members of Catalyst Corporate. Collectively, they contributed more than $91 million in capital to launch Catalyst. Mostly serving credit unions in South Central, Southeast and Northwest regions of the country, Catalyst will start with a membership that stretches from coast-to-coast and includes 17 states. “The fact that so many credit unions, after completing months of due diligence, chose to partner with Catalyst Corporate through capitalization speaks volumes about the value we can achieve,” said Dianne Addington, president/CEO of Southwest Bridge Corporate. Moore agrees.“Credit unions have confirmed that they believe in a cooperative model, and that they appreciate the importance of scale when choosing a corporate,” he said. “The Catalyst strategic plan demonstrates that the operating efficiencies presented by this model make a difference that goes beyond better pricing. It means that we won’t have to rely on our balance sheet, and that means less risk.” In Southwest Bridge Corporate’s conversations with its membership, credit unions indicated they wanted to continue to use the services of a corporate, but with reduced exposure to risk. “Catalyst Corporate reflects this low-risk value proposition by minimizing the amount of capital a credit union puts at risk, and by minimizing the risk taken with those assets,” Addington said. She indicated that Catalyst Corporate’s model balance sheet is more conservative than the new regulation 704 requires. “With the help of credit union input over recent months, we are poised to move forward,” Moore said. “The countdown is on.”

Kansas regulator takes over Enterprise CU

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TOPEKA, Kan. (8/19/11)--The Kansas Department of Credit Unions (KDCU) has taken control of $1.8 million asset Enterprise (Kan.) CU and ordered a fraud audit, the agency reported. The credit union's board of directors transferred control voluntarily on Aug. 12 to KDCU after a routine, annual examination that began Aug. 8, the agency told the Wichita Eagle (Aug. 17). It is uncertain how long the audit will take, KDCU Administrator John Smith said, adding that a decision on the credit union's future will be made after the audit report. Depending on the report, the credit union's future could include either liquidation or a merger, he said. The community credit union has 592 members. Members' deposits are insured up to $250,000 per account, and members can conduct transaction as usual, the agency said.

Lending Council charts evolution of private student loans

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MADISON, Wis. (8/19/11)--CUNA’s Lending Council has released a white paper that charts the evolution of the private student loan market. A change in the student loan business model occurred after the credit crisis of 2008, according to the paper, “Should Credit Unions Offer Private Student Loans?” written by Mike Long, executive vice president and chief credit officer of $1.3 billion asset UW CU, Madison, Wis., and an executive committee member of CUNA’s Lending Council. After the credit crisis, many lenders left the student loan business, while those that remained employed conservative underwriting. UW CU is second in the U.S. with almost $50 million in outstanding private student loans. The credit union’s average interest rate on student loans, 4.8%, is the lowest of the top 10 lenders in the private student loan market, the paper said. The most frequently asked questions about UW CU’s private student lending portfolio concern loan performance, said Long. About 32% of the loans are currently in active repayment, he said. “As of June 2011, our delinquency ratio--calculated on loans in repayment--is less than 1.2% and charge-offs are 0.01%,” he said. “The average loan is $6,200, and 86% of the loans have co-signers and credit scores average 732. We processed more than 18,000 applications and approve roughly 50% of the applications.” For more information about the paper, use the link.

Large Wisconsin CUs post gains in 1st half 2011

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MADISON, Wis. (8/19/11)--Most big Wisconsin credit unions posted large gains in net income in the first half of 2011 because of solid loan growth despite a challenging economy, according to the Wisconsin Department of Financial Institutions (DFI). Four credit unions saw triple-digit percentage increases in earnings, led by Pioneer CU in Green Bay, which recorded a 176% gain in the January through June period (The Milwaukee Journal Sentinel Aug. 18). Summit CU in Madison, the largest Wisconsin credit union by assets, saw a 17% net income gain--driven primarily by an increase in loans, CEO Kim Sponem told the newspaper. Total loans at Summit increased roughly $64 million--to more than $1.1 billion for the first half of 2011, compared with the same period last year. Summit saw a substantial increase in car buying--especially for used cars--in the first half of the year, Sponem told the paper. The credit union also was bolstered by an increase in mortgage lending because it is a major home finance lender in its area, she added. Total assets at the state’s more than 200 credit unions increased 4.9% in the first half of the year to $21.6 billion, said the DFI. At the same time, savings rose 5.7% to $18.9 billion, and delinquent loans declined to 1.8% of total loans from 2% in June 2010.

Texas league honors winners of service awards

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FARMERS BRANCH, Texas (8/19/11)--The Texas Credit Union League honored credit unions in the state-level Dora Maxwell Social Responsibility Community Service Award, Louise Herring Philosophy in Action Member Service Award and the Desjardins Youth and Adult Financial Education Award programs. The state awards pave the way for the first-place winners to compete for the Credit Union National Association awards. First-place winners of the Desjardins Youth Awards include:
* Generations Community FCU, San Antonio, $150 million to $500 million asset category; and * A+ FCU, Austin, more than $500 million;
A+ FCU captured first place of the Desjardins Adult award in the more than $500 million in assets category. Financial Fitness Austin CU Facilitators, a group of credit unions that includes A+ FCU, Greater Texas FCU, University FCU and Velocity CU, all of Austin, won the Desjardins Adult award in the group category. First-place winners of the Dora Maxwell Social Responsibility Community Service Award include:
* Communities of Abilene (Texas) FCU, $100 million to $200 million; * FivePoint CU, Nederland, $200 million to $500 million; * InTouch CU, Plano, $500 million to $1 billion; and * Security Service FCU, San Antonio, more than $1 billion.
Red River CU, Texarkana, was recognized as a Louis Herring Award honorable mention winner in the $250 million to $1 billion asset category.

Missouri association wants Gen Y crashers at event

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ST. LOUIS (8/19/11)--The Missouri Credit Union Association is hosting the first Crash Missouri “outside but alongside” the 2011 Missouri and Oklahoma Credit Union Convention & Exposition, Sept. 20-22 in Branson, Mo. The crash event will be hosted by Brandon Michaels, chief financial officer of Mazuma FCU, Kansas City, and Laura Eblen, branch manager of Central Missouri Community CU, Warrensburg, (The Missouri Difference Aug. 16). Crash Missouri is looking for young credit union professionals from Missouri and Oklahoma to attend the event. Applications are due Aug. 26. The Crash Network is a grassroots organization of more than 150 young credit union professionals that seeks to catalyze the industry through meet-ups, mentorships, online collaboration and development projects.

Mo. Minn. spotlight MBL benefits in meetings with lawmakers

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ST. LOUIS, Mo., and ST. PAUL, Minn. (8/19/11)--Credit unions from two Midwestern states--Missouri and Minnesota--recently held in-district meetings with their congressmen during which member business lending (MBL) was the key focus.
Click to view larger image Member business lending was the focus of a recent meeting with Missouri credit unions and U.S. Rep. Blaine Luetkemeyer (R-Mo.). From left are Rick Nichols, River Region CU; Louie Delk, Conservation Employees CU; Peggy Nalls, Missouri Credit Union Association (MCUA); Luetkemeyer; Joanne Nelson, United CU; Bill Mustain, Employment Security CU; and Mike Beall, MCUA president/CEO. (Photo provided by the Missouri Credit Union Association)
In a meeting with Missouri credit union representatives in Jefferson City Aug. 11, U.S. Rep. Blaine Luetkemeyer (R-Mo.) was urged to consider supporting the Small Business Lending Enhancement Act (H.R. 1418 and S. 509), said the Missouri Credit Union Association (MCUA) (The Missouri Difference Aug. 16). The measure would increase credit unions' MBL cap to 27.5% of assets from 12.25%. Credit unions, their leagues and the Credit Union National Association (CUNA) are urging Congress to pass the bills, which would inject $13 billion in new small business loans and help create 140,000 new jobs without cost to the taxpayer. "I have members who come up to me looking for a loan on a tractor [or] to run a side business, and each time I do that, I get closer to the MBL cap," Louie Delk, president/CEO of Conservation Employees CU, Jefferson City, told Luetkemeyer during the meeting. "By raising the limit just a moderate amount, Congress will enable credit unions like mine to help more people and stimulate the economy." The bill would create 1,676 new jobs and generate more than $154 million in business loans in Missouri, the group told the legislator. "Please consider this bill on its merits," said MCUA President/CEO Mike Beall. "It will help with job creation at a time when our country really needs it, and it is a zero-dollar stimulus. It doesn't cost taxpayers a dime."
Click to view larger image U.S. Rep. Erik Paulsen (R-Minn.) gets a tour of Richfield/Bloomington CU, Bloomington, Minn., during a meeting with Minnesota credit unions to discuss member business lending. Credit unions also recently met with an official from U.S. Rep. Tim Walz's (D-Minn.) office. (Photo provided by the Minnesota Credit Union Network)
Also taking advantage of Congress' August recess were Minnesota credit unions, who met with U.S. Rep. Erik Paulsen (R-Mo.) and an official from the office of U.S. Rep. Tim Walz (D-Mo.) in separate meetings, said the Minnesota Credit Union Network (MnCUN) in a press release. On Aug. 16, credit unions provided Paulsen with an insider's look into credit union operations during a tour of Richfield/Bloomington CU in Bloomington. The tour showcased credit union philosophy and introduced Paulsen to the credit union's security features. Afterward, they discussed the importance of MBL and provided perspectives from credit union representatives, a small business owner and Bloomington's mayor. Pointing to small business as the future to a better economy, the mayor said credit union loans are necessary to keep the city's "main street" alive. On Aug. 9, another credit union group in southern Minnesota stressed raising the MBL cap during a meeting with Marcus Schmit, district director of Walz's office. Representatives asked for Walz's support of the bills raising the cap, and said it would inject $181 million into the Minnesota economy and help create 2,000 jobs there. The group also discussed future legislation on supplemental capital, which would provide credit unions an avenue for raising capital outside annual earnings. "Through our meetings with congressmen Paulsen and Walz, we were able to highlight how Minnesota credit unions can help strengthen the economy," said Mara Humphrey, MnCUN vice president, governmental affairs. "These relationships and those with other state and federal elected officials help to ensure that credit unions have friends at the state and national capitols who will advocate for them and their members." CUNA has urged credit unions to reach out to their legislative representatives while lawmakers are in their home districts during the August congressional recess. For more information, see CUNA's Action Alert link.

Marcellus Shale opportunities risks affect appraisals

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HARRISBURG, Pa. (8/18/11)--Credit unions located in rural areas of Pennsylvania and surrounding states will be affected by an economic development surge expected in the next 20 years along the Marcellus Shale, one of the world's largest gas fields. The impact is a mixed bag of opportunities and risks, according to the Pennsylvania Credit Union Association (PCUA). The natural gas in the Marcellus Shale stretches over 95,000 square miles from West Virginia through upper New York. Roughly 40,000 to 50,000 square miles of the formations are in what is dubbed a "Fairway" through the state of Pennsylvania (Times News Online Aug. 5). Nearly 212,000 new jobs are expected, says American Banker (Jan. 13). One gas company, Chevron Corp., says that for each Chevron employee, there are three or four employees of contractors working with the company. Those contractors use their own equipment and separate crews to work each stage of developing a well (Herald-Standard May 7). PCUA sponsored a webinar recently for member credit unions where six experts detailed issues facing credit unions related to the expansion (Keystone Extra Aug. 5). Credit unions can expect:
* An influx of deposits at credit unions from newly created jobs; * Mortgage loans with complex issues related to value and appraising land with wells and mineral rights; * Complex property leases and related issues; * More complex tax income classifications; and * Opportunities for loans to small businesses serving the population of workers.
In PCUA's webinar, Charles Kern, chairman/CEO of Charles Kern & Co. addressed impacts Marcellus Shale will have on the income taxes of borrowers. Credit unions should first understand the entity types that can generate income, either passive or earned income, he said. They also should understand the facts and circumstances of income to properly classify it and know where to verify the income on tax returns depending on the manner the income is claimed. Phil Lambling of CUNA Brokerage Services Inc. detailed ways to address the influx of deposits credit unions will receive from members, including that company's Independent Advisor Program. "Everything changes when valuable minerals are discovered," John Hosey, chief appraiser for DataQuick, told attendees. Credit unions no longer can use a traditional property appraisal where there are surface, mineral and/or royalty rights involved, he said. Property values are still affected when the minerals are no longer present. There could be lingering impacts to the environment, well caps, and other issues, he said. Kern noted there are different types of values--market value, fair market value and investment value. All are legal terms and mean different things. He urged credit unions to have qualified appraisers and legal guidance. Andrew Giorgione, an attorney with Buchanan Ingersoll Rooney, reiterated the legal and environmental impacts from Marcellus Shale and cautioned that even though a property might not have a gas well on it, it still might be subject to underground horizontal gas drilling. Another related concern is the impact those mortgages would have on the secondary market. Coz Manzo of First Heritage Financial, a mortgage credit union service organization, compared the impact to a Rubik's Cube, saying there are many moving pieces to be aligned. Paul Whitman, CMGMI, noted it is important to align the type of appraisal credit unions will accept to what the secondary market will require. Pennsylvania banks already are lining up to take advantage of an industry that could generate $18.8 billion in economic value by 2020, said the American Banker (Jan. 13).

Kenya seeks new co-op development model in tough times

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NAIROBI, Kenya (8/18/11)--Kenya is preparing to help the co-operative development model gather steam during 2012, which has been declared as the International Year of Cooperatives (IYC) by the United Nations. Cooperative and Marketing Minister Joseph Nyagah last week launched a steering committee on the celebration to help impress the importance of cooperatives as a sustainability model in alleviating poverty, reported TMCNet.com (Aug. 16). Recent global financial crisis and the collapse of the socialist-communism development model in the 1980s means the cooperative model could be an appropriate one to adopt, said Nyagah, who added that next year will assert the presence of cooperatives as a different development model in the world. Kenya is ranked seventh in the world and No. 1 in Africa on the size of its cooperative development by the World Council of Credit Unions (WOCCU), the article said. The nation has about 12,000 cooperatives with about seven million members. The country's 4,020 Savings and Credit Cooperatives (Saccos) or credit unions have nearly four million members. By 2004, Kenya had a penetration rate of 11% of Saccos (credit unions), compared with 8% in Rwanda, 6% in Uganda, and less than 1% in South Africa and Tanzania. Kenya accounted for 60% of the savings portfolio in Africa, the article said. The IYC will officially begin on Oct. 31, 2011 when the U.N. Secretary General gives a speech before the United Nations General Assembly (News Now July 25). Recognition events will then extend throughout the remainder of 2011 and into 2012. The theme for the international year is "Cooperative Enterprises Build a Better World." The Credit Union National Association and WOCCU have dovetailed that theme with this year's International Credit Union Day on Oct. 18, whose theme is "Credit Unions Build a Better World."

NYIB leaders elected for 2011-2012

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BROOKINGS, Ore. (8/18/11)--The National Youth Involvement Board (NYIB) re-elected one regional coordinator, confirmed two new coordinators, and re-elected the chairman of the NYIB executive committee during its annual meeting July 28 in Pittsburgh. Rebecca Isaacs, business development director of the Credit Union Association of New Mexico, will continue to chair the NYIB for 2011-2012. NYIB regional coordinators elected to two-year terms include:
* North East: Anne-Marie Bisson, assistant vice president of community education, Jeanne D’Arc CU, Lowell, Mass.; * North Central: Janice Quigg, marketing and community development specialist, OUR CU, Royal Oak, Mich.; and * North West: Incumbent Adam VanCleave, marketing specialist, Chetco FCU, Brookings, Ore.
Regional coordinators continuing the second year of their terms are:
* South West: Julie McLean, director of financial education, Arapahoe CU, Centennial, Colo.; * South Central: Cynthia Campbell, assistant vice president of financial empowerment, Tinker FCU, Oklahoma City; and * South East: Juli Lewis, youth marketing manager, Suncoast Schools FCU, Tampa.
Afterward, the Executive Committee elected as officers: Vice chairman, McLean; Secretary, Lewis; Treasurer, Bisson; and Media manager, VanCleave. The group will reconvene Aug. 25-28 in New Orleans, the location of the 2012 NYIB conference, for its annual planning session. Suggestions for speakers and topics on youth financial education are welcome, said NYIB.

Invest in America wins Wegner Award

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MADISON, Wis. (8/18/11)--Invest in America (IIA), a credit union growth and loyalty program that offers members discounts on consumer purchases, has been named the winner of the 2012 Herb Wegner Memorial Award for Outstanding Program. The award will be one of three Herb Wegner Memorial Awards presented March 19 at a special dinner hosted by National Credit Union Foundation during the Credit Union National Association’s 2012 Governmental Affairs Conference. IIA was started in 2008 by CUcorp, a wholly-owned subsidiary of the Michigan Credit Union League. CUcorp is now CU Solutions Group, a national marketing company that manages the program. Through the program, credit unions banded together to promote and support credit unions products and services and those offered by participating American-based companies, such as General Motors (GM) or Sprint. Credit union members were given discounts to the companies, which in turn drove membership growth and loyalty, said NCUF. IIA has since grown into an enhancement program helping credit unions to add vehicle loans, increase debit/credit card transactions/balances and provide non-interest income opportunities. “IIA’s success is a direct result of the support of our 46 state association partners and the thousands of credit unions that promote these offers to their members,” said MCUL President/CEO Dave Adams “We look forward to much greater success for Invest in America as credit unions continue to promote member discounts on the products of great U.S.-based companies.” IIA’s Big Ticket program aims to increase new membership and vehicle loan volume. The partnership with U.S. based companies such as GM also helps credit union members save on new vehicles. Through April, roughly 400,000 vehicles have been sold through the Big Ticket program, generating an estimated $6.4 billion in credit union vehicle loans. The National Sprint discount program from IIA saves credit union members on wireless services through lower monthly bills, waived fees, and discounts. As part of the partnership with Sprint, credit unions receive noninterest income to support their marketing expenses. Another IIA program, Membership Rewards, is designed to increase credit unions’ card transactions and balances by providing discounts on products and services. Partners in the program include Allied Van Lines, FTD, DIRECTV, TurboTax and Shop America, a new web-based mall exclusively for credit union members. Along with NCUF, Invest in America is also one of the largest independent sponsors of Biz Kid$, the Emmy Award winning and credit union-funded public television series that teaches kids about money management and entrepreneurship. Nearly 3,000 credit unions nationwide, representing more than 70% of credit union members, support Invest in America.

Despite weather losses CUNA Mutual strengthens capital

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MADISON, Wis. (8/18/11)--CUNA Mutual Group--like most property and casualty insurance companies--incurred more weather-related losses in the first half of 2011 than in all of 2010. Spring tornadoes and storms resulted in losses in its auto and home business, and droughts and flood conditions across the U.S. affected its crop insurance program. However, solid performance from its lending and financial services products offset the weather-related losses, said CUNA Mutual. As a result, the company saw $51 million in GAAP (generally accepted accounting principles) net income through June. That compares with $63 million during the same period in 2010. Also, GAAP operating revenue grew 2.3% during the first half of 2011. CUNA Mutual's statutory total adjusted capital grew to $1.45 billion through June, up $30 million from year-end 2010. "Weather-related losses are part of the unpredictable nature of the insurance business," said Jerry Pavelich, the company's chief financial officer. "Despite those losses, our other financial measurers continue to head in the right direction, and we continue to execute on initiatives that are within our control."

In the media Four CUs look to expand MBL portfolio

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MADISON, Wis. (8/18/11)--Four credit unions were featured in the various media with their ideas about how to expand member business lending (MBL) portfolios. Credit unions featured included:
* Nutmeg FCU in Rocky Hill, Conn., which plans to begin commercial lending and lifestyle loans this fall to bolster weak loan demand among members (Hartfordbusiness.com Aug. 15). With 27,000 members and $333 million in assets, Nutmeg has the capital, size and scope to get into commercial lending, John Holt, president/CEO, told the publication. While some credit unions try to offer better interest rates on loans, Nutmeg is looking to broaden its loan offerings. In September, Nutmeg plans to introduce a new lifestyle loan product, which will provide financing for service such as plastic surgery, expensive dental work and Lasik eye surgery, with more competitive pricing than typical personal loans. Nutmeg also is aggressively offering loan and deposit products for businesses. To read the article, use the link. * Redwood CU, a $1.73 billion asset credit union based in Santa Rosa, Calif., which began offering MBLs because a third of its members were involved in some type of business activity and were looking to the credit union to offer business services, said Brett Martinez, Redwood president/CEO (posterous.com March 25). The credit union’s direct business loans portfolio totals more than $100 million. Redwood does direct operating lending that includes commercial transactions, working capital, purchasing equipment and owner-user real estate, Martinez told the publication. To read the article, use the link. * The $349 million asset, Birmingham, Ala.-based Legacy Community FCU, which saw a significant surge in loan requests from small businesses during the past two years (Birmingham Business Journal Online Aug. 12) . This is in part due to heightened awareness of Legacy in the community and also because many banks have withdrawn their credit availability, Glenn Bryan, Legacy senior vice president, told the Journal. * Mutual Savings CU, based in Hoover, Ala., with $173 million in assets, is positioning itself to partner with quality businesses to offer opportunities to the businesses and the credit union, said Doug Key, Mutual Savings CEO (Birmingham Business Journal Online Aug. 12). Instead of targeting a specific business size with a minimum revenue requirement, the credit union looks at the overall situation of the business and determines if it can help.
The Credit Union National Association (CUNA) and credit unions are pressing Congress to increase credit unions’ 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 into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

Two IN.Y. TimesI blogs tout co-ops NCUF link

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NEW YORK (8/18/11)--One New York Times blog this week touted the benefits of co-ops, while another linked to the National Credit Union Foundation’s REAL Solutions Impact Center, featuring information about non-prime auto loans. Expanding the cooperative business model could mitigate future economic crises and reshape the U.S. economy to make it stronger, said a Tuesday post by Wilhelmina A. Leigh, an economist and senior research associate at the Joint Center for Political and Economic Studies, in “A Chance to Reshape the Economy.” “Cooperatives operate in most sectors of the economy and offer services as diverse as producing and delivering energy and providing health care service to the elderly,” Leigh wrote. “In particular, cooperatively owned financial institutions, like credit unions, fared better during the subprime market collapse than their brethren institutions that were not cooperatively owned. “Recent estimates suggest that more than 100 million people are members of 47,000 cooperatives in the U.S,” she continued. “Expanding the ‘cooperative’ economy could buffer the nations against future crises.” Also, Lisa Margonelli, in a Tuesday post titled “Making Low-Interest Auto Loans Work,” said: “The National Credit Union Foundation lists a variety of credit union programs that reach out to borrowers with poor credit on car loans. Analyst Bill Myers found that lending autos to people with poor credit can be profitable for credit unions, but they need to help clients select good cars, work more closely with them to ensure repayment and provide things like mechanical breakdown insurance …” She provided a link to REAL Solutions information about non-prime auto loans. See the links to the blog posts and the REAL Solutions link.

iWSJi web page covers CUs pitch to Obama on MBLs

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MADISON, Wis. (8/18/11)--An Iowa credit union CEO’s pitch to President Barack Obama for member business lending (MBL) relief during a rural economic forum received coverage on The Wall Street Journal’s website Wednesday. “Yesterday in Peosta, Iowa, as part of a White House forum on job creation in the state, President Obama met with Jeff Disterhoft, a credit union representative and CEO of The University of Iowa Community CU,” said the article, “Credit Unions Pitch Obama on Job Creation Plan” on the Journal’s website. “For almost two minutes, Disterhoft tried to enlist Obama's support for legislation that would raise the credit union business lending cap from the current 12.5% of assets to 25% of assets.” The article further explained that the MBL bill was filed in March, is under review by House and Senate committee, and faces “fierce” opposition from banks. Disterhoft’s advocacy efforts also received local media coverage in Iowa. (To see New Now’s coverage ue the link to Wednesday’s story.) The Iowa City Press-Citizen published an article on Tuesday describing the process of how Disterhoft was approached by the Iowa Credit Union League to attend the forum--“I jumped at it right away,” he said of the opportunity--through his meeting with the president. Disterhoft told the Press-Citizen his role was to ask the president to take a stand on legislation. He said it was rewarding to see “Democracy at its finest” as the president sought input from business leaders. The Wall Street Journal also noted statistics from the Credit Union National Association that increasing the member business lending cap to 27.5% of assets from 12.25% would inject $13 billion in loans into the economy and create 140,000 new jobs at no cost to the American tax payer.

CU System briefs (08/17/2011)

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* BURLINGAME, Calif. (8/18/11)--Norielyn Galbadores Bautista, 43, a former employee of a Burlingame, Calif.-based Pacifica Advantage FCU, pleaded no contest Monday to grand theft, forgery and identity theft in the theft of more than $428,000 from 15 members and the credit union's general fund. She originally had pleaded not guilty. Bautista allegedly used the funds for personal needs such as school over a four-year period, between March 2006 and 2010. None of the money has been recovered. Her sentencing is scheduled for Sept. 21 (The San Mateo Daily Journal Aug. 16) … * TAMPA, Fla. (8/18/11)--Tampa Bay area credit unions, through Credit Unions for Kids, donated $1.5 million in a five-year gift to All Children's Hospital to help establish a comprehensive center for children with autism and related disorders (Tampa Bay Business Journal Online (Aug. 15). The center is set for completion by next Spring. Credit unions, through CU4Kids, raise funds for Children's Miracle Network Hospitals, with funds collected going to their local children's hospitals. Participating credit unions included Achieva CU, Florida Central CU, Florida West Coast CU, Grow Financial FCU, GTE FCU, MidFlorida CU, Pinellas FCU, PowerNet CU, Railroad and Industrial FCU, San Antonio Citizens FCU, Suncoast Schools FCU, Tampa Bay FCU, Tampa Postal FCU, and USF FCU. The group also recently completed a $1.5 million pledge to create a 28-bed intensive care unit at All Children's … * NAPERVILLE, Ill. (8/18/11)--Illinois Credit Union League (ICUL) staff completed three community service projects--a food drive, a
Click to view larger image Click for larger view
children's hospital visit, and a blood drive--to help people in need the past several weeks. Staff collected nearly 700 pounds of food for the Northern Illinois Food Bank, which saw a 36% surge in demand by more than 520 food pantries, shelters, soup kitchens and other food assistance sites in 13 counties. More than 502,000 people receive food assistance each year from its network; 48% are children under age 16. ICUL staff also participated in a blood drive, providing 20 pints of blood for Heartland Blood Centers, which serves 38 hospitals in 12 counties in northeastern Illinois and northwestern Indiana. And, staff visited Children's Memorial Hospital in Chicago to volunteer and interact with patients and siblings in outpatient waiting areas. Activities included projects, games and reading books. ICUL also conducts a toy drive during the winter holidays for the hospital. The hospital, Illinois' only freestanding hospital exclusively for kids, served more than 146,000 kids in 2010. At the event are, from left: Drew Kayvani, education program developer I; Carly Kipper, member service representative; Will Wille, PR coordinator; entertainer "Mr. Singer"; Melissa Ceasario, corporate and human resources administrator; Sarah Eigel, human resources manager; Deborah Frances, accounting analyst; and Joy Patel, member service representative. (Photo provided by the Illinois Credit Union League) … * SAN ANTONIO (8/18/11)--James C. Kemple, former chairman of San Antonio-based Air Force FCU, died Sunday at the age of 80. He was a chief master sergeant with the U.S. Air Force until retiring in 1981. Kemple served on the credit union's board of directors from March 1981 until November 2003. He served on numerous committees and was chairman from 1996 until he stepped down in 2003. A memorial service will be at 10 a.m. CT today in San Antonio …

Uzbekistan counts 123 CUs 244670 members

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TASHKENT, Uzbekistan (8/17/11)--Uzebekistan had 123 credit unions operating in the republic with 244,678 members and $228.6 million in assets as of July 1, according to a report last week from the State Statistics Committee of Uzbekistan. During the first half of the year, credit unions loaned $175.2 million, of which $168.1 million or 95.9% are the shares of physical persons and individual businessmen, while 4.1% or $7.1 million are legal persons or entities (Uzbekistan Daily Aug. 11).. Credit unions during the period also attracted $148 million in deposits. All amounts are in U.S. dollars.

N.Y. Fed study Small biz pessimistic on getting loans

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NEW YORK (8/17/11)--The number of small businesses that haven't applied for loans increased during the past three months to 67% from 41% in the first quarter of 2010, according to the Small Business Borrowers Poll released last week by the Federal Reserve Bank of New York. The main reason was pessimism: 27% of those surveyed who didn't apply for a loan said they feared being turned down, and 19% said they are trying to pay off their own debt first (CrainsNewYork.com Aug. 15). Overall there was a 10% decline in small business lending in the region, compared to last year. Lending criteria has become more difficult for small businesses, the Staten Island Chamber of Commerce told the publication. The Credit Union National Association (CUNA) and the nation's credit unions see the trend as another reason why Congress should raise credit unions' member business lending (MBL) cap so they can help the economy and its backbone, small businesses, generate more jobs. CUNA and credit unions are urging Congress to raise the cap to 27.5% of assets from 12.25%. Doing so would generate 140,000 new jobs and inject $13 billion in funds for small business loans. The Small Business Lending Enhancement Act of 2011 (H.R. 1418, S.509) is making its way through Congress with a provision to lift the cap. The bill was introduced March 8 by Sen. Mark Udall (D-Colo.). It has 20 co-sponsors in the Senate. In the House, H.R. 1418, which was introduced on April 7 by Rep. Ed Royce (R-Calif.), has 61 co-sponsors. On May 2, it was referred to the House Financial Services Committee's subcommittee on financial institutions and consumer credit. Some credit unions are bumping up against the cap, which means they are restricted in their small business lending and must turn away loan applicants. The New York Fed study also found that more businesses now rely on earnings and on personal and family wealth for financing. Those who applied for credit or who had sufficient funding used lines of credit more, while borrowers who were discouraged and those who are paying off debt relied on credit cards. The New York City Department of Small Business Services noted it is connecting businesses to more than 40 credit unions, banks and alternative lenders, and engaging financial institutions to create innovative partnerships that focus on increasing referrals and enhancing educational resources related to securing financing. The poll surveyed 876 small businesses in New York, northern New Jersey and Fairfield County, Conn.

Power surge puts card payments into stand-in mode

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MONETT, Mo. (8/17/11)--A power surge Monday morning at a Houston, Texas, data center for card transactions processor Jack Henry & Associates damaged an uninterruptable power system, causing credit and debit card purchases to end up in "stand-in" mode. As a result, potential purchases by members and other consumers were turned down at the point of purchase. At least one credit union, Heartland CU in Madison, Wis., was fielding calls Monday from members who said their purchases were turned down (Wisconsin State Journal Aug. 15). The problem, which was resolved the same day, occurred at 8 a.m. CT Monday "when a local utility company's transformer blew and interrupted power to our facility," Debbie Wood, general manager, marking and industry research at Jack Henry, told News Now. "We immediately converted to our generator system without interruption in service to our clients." However, when the utility company restored power by about 1:30 p.m. CT, it "damaged equipment at our facility, causing a power outage." Power was restored by 7 p.m. and connectivity to other networks was completed at about 9 p.m. The outage was restricted to only those financial institutions who process through the Houston Data Center. While they could have been located anywhere in the U.S., they were most likely in the Midwest or Southwest region, Wood said. It is not known how extensive the outage affected credit union members. "Since the stand-in transaction approvals are actually set at the financial institution level, we do not have insight into the number of end-users that might have been affected," she added. She explained what is mean by stand-in mode: "As a consumer performs a transaction such as buying gasoline with a debit card, the normal authorization process is to check to be certain that, in the case of a debit card, there is enough money in the consumer's account to cover the cost of the purchase, or in the case of a credit card, that the person has enough left on their credit limit to cover the cost of the purchase." However, some times this cannot be accomplished in a real-time environment, she said. An issue with communication equipment connecting the point-of-sale device to the network to facilitate the approval, or maintenance being formed on the network, or as in the case of Monday, connectivity to the host is lost, are examples. "In these cases, financial institutions have already pre-determined an amount, called stand-in, that they will allow the consumer to charge during this time that the system is offline. So, if for some reason a consumer goes to buy $50 worth of gasoline, and the stand-in amount set by the credit union is $100, the transaction will be approved," Wood said. However, if the stand in amount set by the credit union is $25 in the same instance, "the transaction would be declined." She said Jack Henry & Associates advises credit unions concerned about this kind of situation to "take a moment to review the pre-determined stand-in amounts that are currently set for card transactions performed in an offline mode to determine if they are appropriate."

CU raises MBL issue with president at White House economic conference

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PEOSTA, Iowa (8/17/11)--A representative from the credit union industry shared the potential benefits of member business lending(MBL) with President Barack Obama during the White House Rural Economic Forum at Northeast Iowa Community College in Peosta, Iowa, on Tuesday. Jeff Disterhoft, president/CEO of University of Iowa Community CU, Iowa City, Iowa, addressed the president directly during a break out session at the forum. Disterhoft said he impressed upon the president the same points the Credit Union National Association (CUNA) and credit unions have pressed on Congress about increasing the MBL lending cap to 27.5% of assets from 12.25%: it would inject $13 billion in loans into the economy and create 140,000 new jobs at no cost to the American tax payer. Disterhoft said the president appeared attentive to his concerns. “He promised to go back to Washington and look further into it,” Disterhoft told News Now. “I was very pleased to talk to the president, because not everyone who participated had an opportunity to have their industry concerns addressed,” Disterhoft added. “I was one of the fortunate ones who did.” The forum brought together small-business owners, private sector leaders, rural organizations and government officials to discuss ideas and initiatives to promote economic growth, accelerate hiring, and spur innovation in rural communities and small towns. Disterhoft said the forum, attended by roughly 100 Midwest rural business leaders, was facilitated by Karen Mills, administrator of the U.S. Small Business Administration. He was asked to participate in the event by the Iowa Credit Union League, which is working with CUNA to urge Congress to raise the MBL cap. A couple hours into the meeting, the attendees broke into groups of 10 to 12 participants. Each group met about 20 to 25 minutes, at which time participants could share their individual business and industry concerns. Disterhoft said community bankers participating in the forum expressed concerns that enforcement of Federal Deposit Insurance Corp. regulations were hurting bank lending efforts. Later, Obama addressed the entire group. “I was encouraged, with grain of salt,” Disterhoft said. “Anytime the president reaches out to people, I applaud that effort. And as an industry, anytime we get a chance to have dialogue with the president, it’s a positive. I left the meeting encouraged and cautiously optimistic that it was helpful to our cause.”

Counterfeit checks bear Edwards FCUs name

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EDWARDS, Calif. (8/17/11)--Edwards (Calif.) FCU has reported to News Now that fraudulent cashier’s checks are being printed and presented in the credit union’s name and should not be negotiated. The fraudulent items are green, dated Aug. 8, and are part of a check series that begins “288 … ” If the fraudulent documents are photocopied, “void” appears across the front of the checks.

Self-Help expands check-casherCU hybrid model

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DURHAM, N.C. and SAN JOSE, Calif. (8/17/11)--The Center for Community Self-Help, which is affiliated with Self Help CU, Durham N.C., and Self-Help FCU, San Jose, Calif., announced a partnership Tuesday to expand a check-casher/credit union hybrid model. The center partnered with Citi Community Development--part of Citi, a global financial services company--to provide the model that has the look and feel of a check-cashing business, but also provides responsible financial products and services tailored for unbanked individuals (ENP Newswire Aug. 16). The center’s first micro branch, which primarily serves Latino immigrants, opened in San Jose in January. “The micro branch is designed to meet the financial service needs of low-income families today and to connect them with actionable education and asset-building products that create economic opportunity and security for the future,” said Martin Eakes, CEO of Self-Help CU. “Through this collaboration with Citi Community Development, we will be able to serve thousands of Californians that would otherwise lose significant portions of their incomes to predatory providers.” Roughly 106 million unbanked and underbanked people in the U.S. use alternative providers for their day-to-day financial services because they are unable or unwilling to access financial products and services from mainstream financial institutions, said the organization in a press release. In California, more than 47 % of Latinos, or nine million, are unbanked. As a result, alternative providers--such as check cashers, pawn shops, consumer finance companies and payday lenders--have emerged, sometimes using irresponsible practices, the center said. Twelve million people every year are trapped in a cycle of payday loans with interest rates as high as 400%, transferring $5 billion every year from working families to predatory payday lenders, according to the Center for Responsible Lending, based in Durham. The micro branch provides asset-building opportunities not available when people cash their checks at alternative check-cashing outlets. These include depository services, the chance to develop or repair credit ratings and access to responsibly provided credit. To help clients take advantage of these opportunities, the micro branch model uses innovative, “in-line” financial education, in which “bite-size” financial management concepts are delivered at the teller line, when consumers are focused on their financial decision-making.

NYIB recognizes two for youth fin-ed contributions

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PITTSBURGH (8/17/11)--Among the professionals recognized at the National Youth Involvement Board's (NYIB) 2011 Annual Conference in late July in Pittsburgh, two were chosen for exemplary work in youth marketing, youth education and leadership development. NYIB named Anne-Marie Bisson as the 2010 Delegate of the Year. A 20-year veteran of Jeanne D’Arc CU in Lowell, Mass., Bisson built the credit union’s Community Education division from the ground up, starting in 2005. Last year, her team delivered financial education to more than 4,000 people. She also oversees four high school branches and serves on the Massachusetts Credit Union League’s Financial Literacy Committee. NYIB’s Outstanding Volunteer of the Year is Shannon Tackett, communications officer at Northwest FCU Foundation in Herndon, Va. Tackett works with local students, teaching them the importance of spending and saving money wisely. In addition, Tackett develops community outreach programs and works on the foundation’s scholarship programs. She is on the board of the Virginia Jump$tart Coalition and co-chaired the Virginia Credit Union League’s Financial Literacy Committee. NYIB invites nominees for annual recognition including the Delegate and Volunteer of the Year, along with scholarship winners to attend its NYIB Annual Conference, National Credit Union Foundation Development Education Training, and the World Council of Credit Unions Young Credit Union People Program (WYCUP). For more information, use the link.

Minnesota honors Maxwell Herring Desjardins winners

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ST. PAUL, Minn. (8/17/11)--The Minnesota Credit Union Network (MnCUN) announced the statewide winners of the 2011 Dora Maxwell, Louise Herring and Desjardins competitions. All 13 winners will advance to the national competition where they will compete with other credit unions nationwide in their respective award and asset categories in September. The awards are sponsored by MnCUN and the Credit Union National Association (CUNA). Minnesota’s 2011 Dora Maxwell Social Responsibility Community Service Award winners include:
* Star Choice CU, Bloomington, $20 million to $50 million in assets; * Minnesota Valley FCU, Mankato, $50 million to $100 million; * Greater Minnesota CU, Mora, $100 million to $200 million; * City & County CU, St. Paul, $200 million to $500 million; * Hiway FCU, St. Paul, $500 million to $1 billion; and * Affinity Plus FCU, St. Paul, more than $1 billion.
Louise Herring Philosophy in Action Member Service Award winners were:
* Greater Minnesota CU, $50 million to $250 million; * TopLine Federal CU, Maple Grove, $250 million to $1 billion; and * Affinity Plus FCU, more than $1 billion.
Desjardins Youth Financial Education Award winners consist of:
* United Educators CU, Apple Valley, $50 million to $150 million; and * Greater Minnesota CU, $150 million to $500 million.
Desjardins Adult Financial Education Awards winners were:
* Greater Minnesota CU, $150 million to $500 million; and * US FCU, Burnsville, more than $500 million.

Federation council on aging to aid older adults

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NEW YORK (8/17/11)--The National Federation of Community Development Credit Unions and National Coalition on Aging (NCOA) have launched a national initiative to help seniors achieve economic security.
Click to view larger image The National Federation of Community Development Credit Unions and National Coalition on Aging (NCOA) have partnered to help seniors achieve economic security. Community development credit union grantees, representatives from NCOA Economic Security Centers and other local organizations serving older adults take part in training in Atlanta. From left are: Cheryl Fatnassi, CEO, Opportunities CU, Burlington, Vt.; Jane King, certified financial counselor/financial educator, Opportunities CU; Jim Pendulik, chief financial officer, Fairfax County (Va.) FCU; Cathi Bazzon, associate director, Rogers Park Community Center, Chicago; and Kristen Cox, marketing and community relations, North Side Community FCU, Chicago.
The federation will link eight community development credit unions (CDCUs) and eight economic casework sites with NCOA Economic Security Centers and other local organizations providing economic assistance to aging populations. The initiative was funded by 16 grants from the federation’s Economic Security for Low-Income Aging project. Project grantees--nine representatives from CDCUs and seven representatives from NCOA Economic Security Centers--met Aug. 9-11 in Atlanta for training. At the training, the federation and NCOA advised them on products and information to help older members navigate financial challenges, make educated decisions and remain financially independent. The federation, NCOA and other partners learned about basic benefits and assistance for older members; discussed programs and financial products needed by older populations; learned how CDCUs can market their products and services more effectively to this demographic; and developed a data-collection process that measures the initiative’s impact on economic stability and security.
Click to view larger image National Federation of Community Development Credit Unions Senior Program Officer Melanie Stern (left), and National Council on Aging Director of the Economic Security Initiative, Ramsey Alwin, address participants at the recent training. (Photos provided by the National Federation of Community Development Credit Unions)
“The training helped us become aware of the value each of our organizations brings to the table to improve and enhance the lives of older adults in our communities,” said Cynthia Banks, director of Los Angeles County Community and Senior Services, one of the NCOA partner sites.” By partnering with local organizations in NCOA’s network, CDCUs ensure they are working with reliable organizations that have older adults’ best interests in mind, said the federation. Also, agencies serving older adults can be confident that they are sending their clients to trusted financial institutions. The collaborations will help the CDCUs reach underserved seniors in their communities and tailor their product and program offerings to their specific needs. The federation’s Economic Security for the Low-income Aging program is funded by the New York-based Atlantic Philanthropies, through its Aging Program, which seeks to help vulnerable seniors become financially secure and advance supportive measures for long-term change.

CU System briefs (08/16/2011)

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* BOSSIER CITY, La.(8/17/11)--Barksdale FCU donated $5,000 to Chaplain Lt. Colonel O'Dell at Barksdale Air Force Base, La., to assist more than 1,100 military families recently affected by flooding on the base, reported the Louisiana Credit Union League (eNews Aug. 10). Many families were displaced and just recently were allowed to return home. Virgil Barnette, board chairman of the $968 million asset, Bossier City-based credit union, told the league, "We wanted to help those families who have given so much for our country." … * SUMMERVILLE, S.C. (8/17/11)--Heritage Trust FCU's Summer Financial Fun Day on Aug. 3 at its new branch in Mt. Pleasant, S.C., promoted savings to more than 40 children and their parents, who learned about the benefits of a credit union and the right ways to save. Each child received a savings tool kit designed for children ages 3 to 12 by author and financial expert Dave Ramsey. Branch manager Robby Bryant instructed attendees on how to use the kits and presented new ways to save. Victoria Hansen from Channel 4 News shared a story book, "Junior's Savings Adventure," written by Ramsey. Children especially liked depositing their change through the credit union's automatic coin machine, said the Summerville-based credit union. They deposited more than $500 during the event. (Photo provided by Heritage Trust FCU) … * SALISBURY, N.C. (8/17/11)--Mark Curran has been named president/CEO of Lion's Share FCU, a $30 million asset credit union based in Salisbury, N.C. Curran previously was senior vice president of business development for Palmetto Cooperative Services LLC, an item processing credit union service organization based in Columbia, S.C. Before joining Palmetto, Curran was a senior account manager with CUNA Mutual Group. He also has more than 15 years of branch operations experience at Raleigh, N.C.-based Coastal FCU. He graduated from Southeast CUNA Management School as president of the Class of 1991 …

Wis. league Banks urging heaping taxes on consumers

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PEWAUKEE, Wis. (8/16/11)--"There they go again," said Wisconsin Credit Union League President/CEO Brett Thompson, in a press release after the latest suggestion the Wisconsin Bankers Association (WBA) to eliminate credit unions' tax exempt status. That would "heap taxes on consumers," the league said. "Every couple of years, the WBA repeats the same false claims, meaningless numbers and intentional and flagrant mischaracterization of the law, apparently thinking that somehow that will make it true," he said. "But it's not true now, just like it wasn't the last time. Or the time before that," he added. The state banks recently sent a letter to Congress asking for increased taxes on Wisconsin consumers," he said, referring to their suggestion to eliminate credit unions' tax exemption. "The league exposed their hypocritical plea for what it was--another attempt to stamp out competition couched in feigned concern for the tax-burdened citizens they claim to want to help. Noting that eliminating credit unions' tax exemption would amount to adding a tax on Wisconsin citizens, he outlined two key points:
* The real savings for Wisconsin consumers. The additional taxes WBA says might be collected by taxing credit unions is dwarfed--nearly six times over--by the $203 million in savings credit unions deliver to members annually via lower loan rates, higher savings rates and lower and fewer fees. Credit unions save Wisconsin bank customers $66 million because competition helps keep bank fees and rates in line. More than 80 Wisconsin banks have a similar exemption from corporate income tax. The difference: Banks would have to pay twice that of credit unions, and credit unions return earnings to their members, while banks return profits to a few shareholders. * The real reasons credit unions exist. Nothing in state or federal law requires credit unions to serve primarily the poor. Wisconsin law says a credit union exists to "encourage thrift among its members, create a source of fair credit at a fair and reasonable cost, and provide an opportunity for its members to improve their economic and social conditions." The law does not limit by income who credit unions can serve but expects credit unions to serve all members regardless of income, the league said. Credit unions are taxed as they are because they are cooperatives that return earnings to all their members via more competitive pricing on financial services.
"In the recent past, banks took huge bailouts from taxpayers. Until they were stopped, many held billions of dollars of assets in other states to avoid paying their share of Wisconsin taxes," said Thompson. He pointed to a media report that one Wisconsin bank paid no state income tax from 2000 to 2009, although it booked $2.6 billion in profits during that period. A second bank paid less than 1% on its profits those years and was sold to a foreign corporation. It will be permitted to use the bank's losses from the 2008 recession to offset profits well into the future, he added. "That amounts to a shift of several million dollars a year from Wisconsin's tax coffers into the hands of investors in one of North America's biggest banks. To add insult to very serious injury, [it] has started laying off more than 400 Wisconsin workers while sending profits--untaxed--out of the country," he said. "It's time for the WBA to stop," Thompson said, inviting consumers to move their accounts to a credit union and urging them to go to www.asmarterchoice.org to find a credit union they could join.

Indiana MBLs rose 50 since 2007 league tells paper

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FORT WAYNE, Ind. (8/16/11)--Member business lending (MBL) at Indiana credit unions has risen 50% since 2007, indicating "businesses more and more are looking to credit unions for business loans," John McKenzie, president of the Indiana Credit Union League, said in the Sunday issue of the Journal-Gazette. The article, "Lenders battle for businesses," outlines credit unions' push to raise the MBL cap to 27.5% of assets from 12.25% so they can be the lenders of choice for America's small businesses while assisting the economy with a $13 billion influx in new small business loans and helping create 140 million new jobs without cost to the taxpayer. With credit unions and banks competing for small business loans, local companies might be able to lock in a loan at an attractive interest rate, said the Fort Wayne, Ind., newspaper. Since the beginning of the recession, credit union lending to businesses rose 39% nationally and 50% in the state, McKenzie told the publication. More than 50 Indiana credit unions offer business loans--a decision made by each member-owned organization. Dollarwise, Indiana credit unions have made $1.5 billion in business loans, representing 13% of all credit union lending in the state. "Businesses more and more are looking to credit unions for business loans," McKenzie said. Raising the MBL cap would raise state credit union lending capacity by $364 million in the first year of the phased-in increase and would create more than 4,000 jobs, he added, noting that businesses need access to credit. The newspaper also interviewed a Fort Wayne, Ind. credit union which said it has had to turn down some loans because it is bumping against the MBL cap and the Indiana Bankers Association about banks' opposition to lifting the MBL cap. McKenzie also pointed out that the usual lending standards apply when credit unions lend to businesses. The goal is to make good loans that get paid back, he said, adding, that businesses applying for credit union loans are solid borrowers. The Indiana Chamber of Commerce said that bank lending decreased nationally by more than 14% from Dec. 31, 2007, to March 31. During that same time, business loans from credit union rose by nearly 12%. The chamber also pointed out that credit unions' total business lending as of March 31 was less than 2% of the bank total, or $14.8 billion compared to more than $1 trillion. For the full article, use the link.

CUNA CU presence at state legislative groups meetings important

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WASHINGTON (8/16/11)--In recognition of the impact that state legislative issues have on credit unions, the Credit Union National Association (CUNA) and state leagues participated in two national conferences of state legislators this month.
Click to view larger image The American Legislative Exchange Council (ALEC) met the week of Aug. 1 in New Orleans. The Credit Union National Association’s (CUNA) State Government Affairs department attended and participated in sessions. Pictured at the CUNA booth at the ALEC meeting were, from left, John Kozlowski, Ohio Credit Union League general counsel, and Pat Sowick, CUNA vice president of league relations. (Photo provided by CUNA)
The American Legislative Exchange Council (ALEC) met the week of Aug. 1 in New Orleans. CUNA’s State Government Affairs staff met state legislators from across the country, discussing credit union issues. “ALEC created a new financial services subcommittee and CUNA attended the first meeting,” Pat Sowick, CUNA vice president of league relations, told News Now. “It’s important to have a credit union presence in these forums where financial services issues are discussed. A highlight this year at ALEC was the attendance by more than 600 state legislators--many of whom were freshman members.” ALEC is a conservative organization comprising both Republicans and Democrats, Sowick added. The National Council of State Legislators (NCSL), a bipartisan organization, was held in San Antonio last week, and CUNA participated in several committee and task force sessions adressing issues impacting credit unions, Sowick said. The Texas league hosted special activities in the NCSL exhibit hall, visited by thousands of conference attendees. At both events, CUNA staffed a booth featuring America’s Credit Unions and aSmarter Choice, the website CUNA and the state credit union leagues have created to help consumers learn more about credit unions and locate one they are eligible to join. “Both conferences were heavily attended by the banking industry, retailers and payday lenders,” Sowick explained. “So it was important that credit unions were represented. CUNA also was joined by numerous state league representatives at both conferences.”

State orders Sacramento District Postal ECU liquidated

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SAN FRANCISCO (8/16/11)--Sacramento District Postal Employees CU (SDPECU), a privately insured, state-chartered credit union in California, has been closed, announced the California Department of Financial Institutions (DFI) Friday. Citing inadequate capital, the agency ordered the $20.7 million asset credit union to be liquidated. The regulator emphasized that members' deposits are safe and insured for up to $250,000 per account by American Share Insurance (ASI), the nation's largest private share insurance provider. DFI appointed the Dublin, Ohio-based ASI as the liquidating agent. ASI has arranged the transfer of SDPECU member share accounts to Southern California Postal CU, a $56 million asset credit union based in Long Beach, Calif., said press releases from both DFI and ASI. SoCal purchased all of SDPECU's loans and other assets and assumed all its share account liabilities, enabling SDPECU's members to receive uninterrupted credit union services, said ASI. ASI said the closed credit union reported $20 million in assets as of July 31 and served 3,800 postal workers in the Sacramento area. SoCal serves about 4,400 members who are principally postal workers in southern California. Members of the closed credit union can visit the Southern California Postal CU website at www.scpcu.org for more information about the transaction's effect on their accounts.

Synergy One Apple FCUs merger approved

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FAIRFAX, Va. (8/16/11)--The National Credit Union Administration has approved a merger between Apple FCU, Fairfax, Va., and Synergy One FCU, Manassas, Va. Because Apple FCU will absorb all of Synergy One’s employees and branches, there will be no job layoffs or branch closings related to the merger, which will be effective in November. Synergy One was established in 1970 and has $180 million in assets, two branches and more than 25,000 members. Apple FCU was established in 1956 and has $1.35 billion in assets, 19 branches and more than 118,000 members. “Apple will benefit from greater economies of scale through this merger, which should result in better loan and savings rates for members of both credit unions,” says Larry Kelly, president/CEO of Apple. “This merger will be a win-win for our employees and our members,” said William White, president/CEO of Synergy One. “Prince William County has been very hard hit by the recession and the ensuing mortgage defaults have affected our credit union, so this merger will help bring us stability.” In 2010, one in every 436 households in Prince William County was in foreclosure, according to RealtyTrac.com. U.S. Department of Labor statistics show that the county had an unemployment rate of 5.4% last year. In nearby Fairfax County, one in every 885 households was in foreclosure and the county’s unemployment rate was 4.6%.

CU System briefs (08/15/2011)

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* PHOENIX (8/16/11)--The Mountain West Credit Union Association's
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(MWCUA) Valley of the Sun Chapter in Arizona held its annual bowling tournament recently to raise awareness, funds and supplies to benefit Credit Unions for Kids, which supports Children's Miracle Network Hospitals, Phoenix Children's Hospital and Tucson Medical Center. Funds raised this year will go to Phoenix Children's Hospital's One Darn Cool School program. The chapter's credit unions are the primary sponsor for the full-service, K-12 school at the hospital and available to all patients. More than $750 was raised through raffle ticket sales. Attendees also contributed to an on-site supply drive, collecting backpacks, books and other school items. Among the 156 participants at the event, held in Glendale, Ariz., were, from left, Kayla Ward and Jennifer Sedler, Miss Arizona. (Photo provided by the Mountain West Credit Union Association) … * LOS ANGELES (8/16/11)--Los Angeles FCU (LAFCU) has revved up its auto sales engine by teaming with Enterprise Car Sales to offer special weekend vehicle sales throughout August. They will offer savings on domestic and import vehicles, with loan rates from 1.99% annual percentage rate, $1,000 over Kelley Blue Book on vehicle trade-ins, and a $500 Gas Card Raffle. Buyers can preview the vehicles in the inventory on Enterprise's website. Also available: Up to 120% vehicle financing with up to 84 months to repay, no money down, and convenient payments. Other sales the $695 million asset LAFCU will offer this month and in September include sales with Carsfor Members.com, Credit Union Direct Lending (CUDL)-associated dealers, LAFCU Auto Buying Service, and Longo Toyota-Scion-Lexus dealers … * NAPERVILLE, Ill. (8/16/11)--Representatives from the Illinois
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Credit Union League met with staff from Region IV of the National Credit Union Administration (NCUA) at the ICUL headquarters in Naperville, Ill., last week. The discussion centered on current issues and how the two entities can work together to better serve Illinois credit unions. The league also shared information about a challenging Illinois legislative environment and how credit unions maintained a strong voice before the Illinois General Assembly during its Spring session. From left: Dan Plauda, ICUL president/chief executive officer; Don Edwards, ICUL senior vice president, federal governmental affairs; George Fiegle, executive vice president, ICUL Service Corp.; Patrick Smith, vice president, communications and regulatory affairs; Steve Olson, ICUL executive vice president, general counsel and chief operating officer; Keith Morton, NCUA Region IV regional director; Larry Blankenberger, NCUA associate regional director-programs; NCUA supervisory examiners Richard Klecun and Gerald Schulz; and Tom Kane, ICUL executive vice president and chief administrative officer. Also attending but not pictured was NCUA supervisory examiner Linda Vick. (Photo provided by the Illinois Credit Union League) …

CU rep at todays White House economic forum

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IOWA CITY, Iowa (8/16/11)--Credit unions will be represented at the White House Rural Economic Forum at Northeast Iowa Community College in Peosta, Iowa. Among those in attendance will be Jeff Disterhoft, president/CEO of University of Iowa Community CU, Iowa City, Iowa. The forum will bring together small-business owners, private sector leaders, rural organizations and government officials to discuss ideas and initiatives to promote economic growth, accelerate hiring, and spur innovation in rural communities and small towns nationwide. The president will hear directly from rural leaders from across the nation to discuss the importance of growing small businesses and strengthening the middle class in rural America. Obama administration officials have said they will focus on a number of small initiatives that could benefit the economy, a theme the president has emphasized in recent speeches (The New York Times Aug. 13). 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 into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

New Catalyst Corporate slates its first event

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DULUTH, Ga. (8/16/11)--Catalyst Corporate FCU’s first annual Economic Symposium in September, “Engaging a New Era,” will provide Georgia credit unions an opportunity to begin forming economic strategies to guide their institutions during the next 12 months. They also will have a chance to engage the new era ushered in by the launch of Catalyst Corporate FCU in Duluth, Ga. Scheduled three weeks after the projected merger of Georgia Corporate FCU and Southwest Bridge Corporate FCU, the Economic Symposium will be Catalyst Corporate’s first public event. The event is set for Sept. 28-29 at the Twelve Centennial Park Hotel in Atlanta. Six economists/financial industry experts will address symposium participants. Speakers include:
* Roger Tutterow, chief economic adviser to The Henssler Financial Group and professor of economics at Mercer University, who will provide an outlook on the local economy; * Tim Lerew, technology consultant, who will explore electronic wallets and other emerging technologies; * Tun Wai, vice president of research and chief economist for National Association of Federal Credit Unions, who will provide an economic outlook for the credit union industry; * Ben Rogers, research director for the Filene Research Institute, who will discuss recent credit union industry research and trend analysis; and * Cory Johnston, vice president of investment sales, and Brian Turner, director of advisory services, of Catalyst Strategic Solutions, who will discuss strategies for effectively managing credit union balance sheets.
The Economic Symposium is open to all credit unions. Catalyst will award up to five continuing professional education credits for attendance at this year’s Economic Symposium. For more information and to register, use the link.

CU System briefs (08/12/2011)

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* CLINTON, Tenn. (8/15/11)--Shirley McKinney, 52, former manager of Clinton, Tenn.-based Anderson County Employees CU, was indicted last week by a grand jury on one charge of theft over $60,000 and four counts of forgery (The Oak Ridger Aug. 11). The credit union discovered between $100,000 and $200,000 missing during a routine audit on Jan. 19, 2010 (News Now Feb. 19, 2010). The credit union, which had $1.8 million at the time later merged into Knoxville Teachers FCU. According to the Tennessee Bureau of Investigation, McKinney allegedly made unauthorized withdrawals from members' accounts … * TOPEKA, Kan. (8/15/11)--A running back for Topeka, Kan.-based Washburn University's football team has been charged with aggravated robbery of a Topeka branch of Envista CU at about 2:45 p.m. Tuesday (Capital-Journal Aug. 11). Vershon Darnell Moore, 20, was arrested about seven hours after the robbery. Also arrested was Tracie Lenae Bacon, 21, a credit union employee, who was charged with conspiracy to commit robbery. The robbery occurred while Bacon and another credit union employee were filling an ATM with cash. A while sports utility vehicle pulled up to the ATM and someone pointed a gun at them and demanded money. The employees got the vehicle's license number. Police said they recovered money and a gun. During his sophomore year in 2010, Moore was first team All-MIAA and led the conference in rushing with 1,007 yards … * BUFFALO, N.Y. (8/15/11)--Buffalo Service CU, a $39 million asset credit union based in Buffalo, N.Y., is seeking a community charter (Business First Aug. 12). The 78-year-old credit union--one of the oldest in Western New York--has applied to the New York State Banking Department to convert from an employer-based credit union to a community charter serving anyone who lives, works or worships in Erie County. The credit union expects approval to be granted within 30 days, the article said …

Preparations for Youth Week 2012 underway

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MADISON, Wis. (8/15/11)--The Credit Union National Association (CUNA) is seeking a theme for National Credit Union Youth Week, April 22-28. National Credit Union Youth Week is CUNA’s official designation of an annual, national celebration for credit unions that support youth financial literacy all year long. It’s also an opportunity to formally acknowledge young members and encourage them to start--and maintain--a saving habit. April is National Financial Literacy Month, and the National Youth Saving Challenge will run the entire month. Credit unions can participate for a week or the entire month. CUNA is asking for theme suggestions for the week. Deadline for suggestions is Aug. 19. Among the ideas suggested:
* Gold rush; * Olympics (the 2012 Olympics will be held in London next summer); * Science; and * Millionaire for a day.
A vote for the most popular them idea will be held later this month. Past themes include:
* 2011--Money rocks at my credit union (music); * 2010--Get in the saving game (sports); * 2009--The magic of saving (magic); * 2008--Got green? Grow it at your credit union (environment); * 2007--Stash your cash at the credit union (pirates); * 2006--My money. My credit union; * 2005--Want it? Save it. Get it; * 2004--Youth make a difference; * 2003--Youth count at credit unions; and * 2002--Your future. Your money. Your choice.
Replies are requested by August 19. CUNA offer specially designed items to young members. Many items can be customized and most will be available to use in youth programs all year long. CUNA will also have big bills, educational handouts, and activity books. CUNA will announce the availability of products in January.

Radio hosts advice for lean times Bank at CUs

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BELLINGHAM, Wash. (8/15/11)--Consumers should consider credit unions for their financial needs during times of fiscal austerity such as the U.S. is experiencing, said a radio host and authority on smart spending. Clark Howard is known for his acumen on money and consumer issues, which he dispenses on his national radio call-in show and on television’s HLN--formerly CNN Headline News (bellinghamherald.com Aug. 12). Regarding banking, Howard urges consumers to be wary of conducting business with what he terms “giant, monster megabanks.” Instead, he recommends smaller banks and--in particular--credit unions, which are consumer friendly and known for their superior customer service and lower borrowing rates, he told the newspaper. Howard also mentioned websites to help consumers find credit unions in their local areas. See the links. To read the article, use the link.

Study In year since Reg E 77 of consumers opt in

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LAKE BLUFF, Ill. (8/15/11)--Today marks the one-year anniversary of the implementation of Reg E's opt-in for debit card and ATM overdrafts. More than 77% of consumers surveyed have elected to opt-in to allow their financial institution to overdraft their checking accounts with debit cards, said a new study that indicated most view the service as a safety net. During the year, depositories maintained their price for an overdraft transaction at a national median of $28, said Moebs Services, a Chicago based pricing research firm that conducted the study in June. Wall Street banks lowered the price of an overdraft transaction to $34 in 2011, down from $35 in 2010. Nonsufficient fund return fees rose to $28 from $27 during the period, the study found. The study pointed two contradictory findings, said Michael Moebs, economist and CEO at the firm:
* Since Reg E's implementation, more depository institutions are allowing consumers to overdraft their checking accounts with debit cards; and * Institutions offering automatic transfer from a savings account or a line of credit for overdraft protection decreased.
Reg E required depositories to get approval from consumers before covering a debit card or ATM overdraft. The study found that 77% of consumers allowed the overdraft from their checking account when funds weren't available for a transaction. "This is over 100 million checking account consumers, more than voted in the interim election in November 2010," said Moebs. Before Reg E kicked in last summer, 45.4% of institutions offered debit card overdrafts. Today 97.7% do. ATM overdrafts were 61.9% in 2011, compared with 35.2% in 2010. "This shows the consumer treats overdrafts as a safety net, not a penalty," Moebs said. Other findings:
* Overdraft services are fading. Of financial institutions surveyed, 70.4% offered overdraft services in June, compared with 80.9% in 2009. * Those offering an overdraft line of credit dropped to 49.2%, from 63.4% in 2009. Moebs attributed the figures to high costs imposed by the Federal Deposit Insurance Corp.'s new overdraft guidelines.
"What many regulators do not understand is that Reg E as introduced by the Federal Reserve in 2009 and implemented in 2010 has changed consumer behavior to regard overdrafts as safety nets and no longer as a penalty," he said. Because of the added regulatory scrutiny, "banks are unable to provide a safety net to their customers with overdrafts, and are therefore cutting the regulatory burden by cutting services."

Maine CUs members react to economic events

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PORTLAND, Maine (8/15/11)--Just as with credit unions nationwide, Maine credit unions were fielding questions from members about the recent debt-ceiling struggles, stock market volatility and the downgrading of the country’s credit rating by Standard & Poor’s, reported the Maine Credit Union League. The debt-ceiling issue caused the most concern to credit union members, according to a sampling of Maine credit union leaders. Many of the state’s credit unions reported receiving questions regarding federally insured deposits, and whether this would continue if no agreement had been reached to raise the debt-ceiling. The answer is “yes,” the league said (Weekly Update Aug. 12). Some members also expressed concern about receiving payments from the government. “In helping answer the phones last Wednesday, government payday, I talked to at least 25 people who just wanted to know if the government was paying them this month,” said Jim Lemieux, president/CEO of Sebasticook Valley FCU in Pittsfield. “Had Congress failed to reach an agreement, many credit unions I spoke with across the state were preparing to assist their members with no-interest loans and/or cover their federal checks until an agreement was reached,” said league President John Murphy. Kyle Casburn, President/CEO of Seaboard FCU in Bucksport, told the league he spoke with segments of his membership in recent weeks about the economic situation. “There is genuine concern from members and staff about the stock market plunge and the credit downgrade,” he said. “We are seeing some of what we saw in 2008 with an increase in deposits, especially from the more risk-averse members. I am providing our staff with timely and new information so they can pass it along to our members who have questions.”

Redecorated Christmas tree sparks mortgage marketing award

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SOUTH BURLINGTON, Vt. (8/15/11)--By transforming a Christmas tree that stands in its lobby into a mortgage marketing vehicle, Vermont VA FCU, White River Junction, Vt., earned the fiscal third quarter 2011 Marketing Achievement Award from CU Members Mortgage. Wooden houses hang from the tree’s branches, prompting curious members to ask about the credit union’s mortgage services. “Because of this tree we have had more activity with our mortgage products than we’ve ever had,” Vermont VA’s CEO Sandi White told the Association of Vermont Credit Unions (AVCU) (Newslines Express Aug. 12). It’s too early to track mortgage application results, White said. But she is certain mortgage application activity has increased. Vermont VA’s mortgage tree evolved from the credit union’s Christmas tree’s--which has taken on an expanded role as a seasonally themed tree: Easter tree, St. Patrick’s Day tree, Memorial Day tree, even a tree depicting the local rainy weather in Vermont, full of flowers with an umbrella hat perched on top. “The members keep coming in to see what’s up with the tree,” White said. “They love it. They even come in and take pictures of it.” The mortgage tree was both creative and cost-effective, said Linda Clampitt, CU Members Mortgage senior vice president. “To repurpose their Christmas tree into a mortgage tree among other holiday and seasonal ideas is such a ‘Why didn’t I think of that?’ campaign, we had to give the award to Vermont VA,” Clampitt said. “It’s such a simple, yet very effective, way to get the members talking about your services, creating a buzz that spreads. We can’t wait to hear about the results when they come in, too.” CU Members Mortgage is an AVCU business partner.

NWCUAs Brown named national Biz Kid coordinator

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MADISON, Wis. (8/15/11)--Danielle Brown, vice president of Northwest Credit Union Association and executive director of the Oregon Credit Union Foundation, has been named by the National Credit Union Foundation (NCUF) as the national coordinator of Biz Kid$, the credit union-sponsored public television series. Brown will promote Biz Kid$ among credit unions as a financial literacy resource for middle school students. She will be responsible for fundraising and implementing credit unions use of Biz Kid$ in classrooms. The Washington Credit Union Foundation in June transitioned the Biz Kid$ project administration on behalf of credit unions to the NCUF so the program could achieve greater national reach and prominence. NCUF’s resources will provide additional marketing and promotion. Biz Kid$ is broadcast on nearly all Public Broadcast Stations and has produced four completed television seasons. Filming and production of season five episodes began July 26 at the North Seattle-based production studio. Fundraising is underway for the new season, which, upon completion, would position the show for national daily syndication, Brown said. If enough episodes for syndication are produced, the curriculum likely will be picked up in more classrooms nationwide, Brown said. Brown has 15 years of experience with regional credit union trade associations. Prior to the merger of the Credit Union Association of Oregon and the Washington Credit Union League, Brown served as a consultant, a compliance officer, director of education, and chief financial officer for Credit Union Association of Oregon.

Minnesota CU Foundation elects board

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ST. PAUL, Minn. (8/15/11)--The Minnesota Credit Union Foundation (MNCUF) elected two new board members to three-year terms at its annual meeting in July. Incumbent Mary Hansen, CEO of Mayo Employees FCU in Rochester since 2001, has served on the MNCUF board of directors since 2004. Hansen has been in the credit union industry for more than 28 years. Brian Sherrick, executive vice president of lending and market service at Postal CU in Woodbury, is the newest member of the board. He also is the chairman of the PCU Community Foundation. He replaces longtime board member Judy Root of Bluestone FCU in Eagan. Hansen and Sherrick join these board members:
* Chair--Pat Brekken, Richfield/Bloomington CU, Bloomington; * Vice chair--Dave Larson, Affinity Plus FCU, St. Paul; * Secretary/treasurer--Kristi Mukomela, Novation CU, Oakdale; * Chuck Albrecht, Mid-Minnesota FCU, Baxter; and * Lynn Kothe, North Memorial FCU, Robbinsdale.

FirstCorps leverage ratio nearly 6

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PHOENIX (8/15/11)--First Corporate CU has a leverage ratio of nearly 6%--well over the minimum regulatory requirement, announced the Phoenix-based corporate. As part of its corporate stabilization plan, the National Credit Union Administration requires corporates to have a minimum of 4% in capital, beginning in October. Some corporates needing to raise capital have issued calls for Perpetual Contributed Capital (PCC) from their memberships. They have until Aug. 31 to raise the funds. FirstCorp attributed the ratio to "tremendous member support." "The members have spoken and have finally been able to act and exercise their free choice," said FirstCorp President/CEO Pete Pritts. "We are appreciative of the confidence the membership has placed in us to keep getting it done." FirstCorp members converted membership capital to the newly defined PPC and over subscribed to FirstCorp's Non-perpetual Contributed Capital issuance of transitional capital, which emulates a five-year certificate of deposit. This demonstated member confidence, said the $1 billion asset corporate. "For 33 years we have worked hard to earn their confidence and do what is best for credit unions. Now we can get back to focusing on that, back to serving credit unions. We are here ready and able to serve those who want to be served," Pritt said.

PSCU Financial CUs on forefront of EMV chipPIN wave

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ST. PETERSBURG, Fla., and SUITLAND, Md. (8/12/11)--News that Visa has announced it will accelerate its migration to Europay, MasterCard and Visa (EMV) chip technology in the U.S. comes at a time when PSCU Financial Services is positioning itself to be one of the first in the credit union industry to offer plastics that incorporate both the EMV smart chip and personal identification number (PIN) technology. The St. Petersburg, Fla.-based credit union service organization (CUSO) worked with Suitland, Md.-based Andrews FCU to launch the new card, which is now available to all PSCU Financial Services' member-owners. EMV integrated circuit cards are used widely in Europe and other regions because it offers higher security than magnetic stripe. EMV cards that offer PIN approval are preferred by international travelers because they can be used at unattended kiosks and ATMs, said PSCU Financial. "This card is a significant advantage for our credit unions that serve government, military or professional members who travel internationally," said Michael Kelly, president/CEO of PSCU Financial Services. Andrews FCU President/CEO Chris McDonald noted that its members stationed overseas and those who travel frequently "have been asking for this." The credit union currently offers a magnetic stripe Visa platinum rewards card. The new Globe Trek Visa Rewards credit card will offer the same rate and rewards program as the current platinum card, but will combine an EMV chip with PIN technology. The credit union plans to initially offer the new Globe Trek Visa Rewards card to current cardholders living near six branches in Belgium, the Netherlands and Germany. Visa said that encouraging investments in EMV contact and contactless chip technology will speed up the adoption of mobile payments and improve international interoperability and security (IT Web Business Aug. 11). Chip cards require upgrades to merchant terminals, which have not been widely deployed yet in the U.S.

CUNA to IWSJI Banks not doing enough small-biz loans

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MADISON, Wis. (8/12/11)--The Credit Union National Association (CUNA) says that small-business lending statistics indicate banks are not doing enough lending to help small-business owners, according to a Thursday article in The Wall Street Journal. “Banks have requested less than $12 billion of the $30 billion made available by the last year’s Small Business Jobs Act, the Treasury Department has said,” wrote Emily Maltby in the article. “The government program offered low-interest funds to community banks so that they could boost small-business lending.” The amount banks are lending is not sufficient, CUNA says. “Congress last year gave the banks $30 billion to make small business loans, but the banks’ response has been tepid at best,” Bill Cheney, CUNA president/CEO, told the Journal. “Credit unions don’t need $30 billion in government assistance; we’re just trying to raise a lending cap in the law that’s arbitrary and outdated.” 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 into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said. The article mentioned that Lister Hill CU in Muscle Shoals, Ala., and Provo (Utah) Postal CU had to turn down loans to small businesses because they were too close to the federally mandated MBL cap. CUNA shared the article with House and Senate congressional offices, accompanied by a message Thursday from Cheney, noting “how credit unions can help small businesses create new jobs at no cost to taxpayers. “Sen. Mark Udall (D-Colo.) and Rep. Ed Royce (R-Calif.) have introduced legislation, S. 509 and H.R. 1418, to help small businesses, and we encourage your member to show support by co-sponsoring this legislation.” To read the article, use the link.

Paychecks for city employees delayed--except at CU

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LEWISTON, Maine (8/12/11)--Paychecks for employees of Lewiston, which is Maine's second largest city, were delayed because of a computer problem earlier this week. However, employees using an area credit union got their paychecks on time. A computer glitch affected 444 employees whose paychecks were supposed to be direct deposited into their accounts at their financial institutions by midnight Tuesday (Associated Press via Kennebec Journal Aug. 11). However, only employees who are members of the Lewiston Municipal CU, an $18 million asset credit union that serves primarily federal, state and local government employees, received their checks on time. The computer glitch was repaired by 10 a.m. Wednesday. Employees with accounts at large banks received their pay by 11 a.m. but smaller banks and other credit unions took longer. The city has a payroll of $244,000.

First Financial sees results with Money Mission

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SKOKIE, Ill. (8/12/11)--First Financial FCU, based in in Skokie, Ill., began offering Money Mission, which is generally targeted to 16 to 19 year-olds, a year ago and has seen great results, says the credit union. Money Mission is an interactive Web-based simulation designed to educate users in the fundamentals of financial literacy. It is made available to credit unions through a partnership between the Credit Union National Association and the Wisconsin Credit Union League. Money Mission includes inputs from external data such as stock market prices and cost of living changes; user choices in the area of life-event choices, money management; a user configurable experience including customizable characters (“Avatars”) and selectable vehicles; and entertaining animated lessons teaching users critical financial principles. The $53.6 million asset First Financial CU began using Money Mission at the end of last summer, Jennifer Kulkoski, marketing manager, told News Now. “Initially we ran it through our membership’s high school and college-age kids and gave free movie tickets to those who would try it,” she said. “This year, we started our own scholarship to offer at a school for kids with learning disabilities, and that gave us a good boost in usage as well.” Kulkoski got in touch with a teacher at the school--a contact made through a credit union board member--to offer a $500 scholarship once a year to the winner of an essay contest. Participants write a 250-word essay, answering one of four questions, she said. Students at other schools are also offered a chance at a scholarship, which is advertised through a credit union newsletter, e-mails to members and fliers in the credit union’s lobby, she added. First Financial saw 200 to 215 teens sign up for Money Mission through the credit union’s website, Kulkoski said. A lot of traffic also on the credit union’s website comes from Money Mission participants, according to First Financials’ analytics, she added. “We’ve definitely noticed that a lot of kids who signed up or asked about Money Mission heard about it through seminars they go through at their schools, Mad City Money programs and checking our website,” Kulkoski said. “Kids are really excited. It’s really picking up and is a good program for us.” Regarding future plans for Money Mission, First Financial CU is hoping to join forces with Chicago public schools to offer the program directly through the schools, Kulkoski said.

Appeals court rules for CUNA Mutual on retiree benefits

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MADISON, Wis. (8/12/11)--CUNA Mutual Group retirees had no legal right to prevent the company from eliminating the company’s subsidy of health insurance premiums, a federal appeals court ruled Wednesday. The subsidy included accumulated sick pay the retirees believed would be put toward those premiums. Court documents indicated CUNA Mutual’s current and future health insurance premium subsidies were reflected as a $121 million liability on the company's balance sheet. The U.S. Court of Appeals for the Seventh Circuit Court issued the 2-1 opinion, which sustained a decision by U.S. District Judge Barbara Crabb, who dismissed the suit. Roughly 600 retirees would have been affected (The Wisconsin State Journal Aug. 11). CUNA Mutual was sued after it stopped paying any share of employees’ health care in 2008. That move eliminated the $121 million liability from its balance sheet and, in doing so, eliminated managers’ sick pay balances accumulated since 1982. The retirees’ complaint alleged that CUNA Mutual did not fulfill its promise to compensate employees when they retired for coming into work instead of calling in sick. Some retirees had accrued up to $145,000 in sick pay and expected to use it to pay for their share of health insurance premiums, the newspaper said. An employer can put its own and investors’ interests over those of retirees and employees because the retirees didn’t have a vested interest in their sick-pay benefit, the court ruled. “CUNA Mutual has an obligation to protect the company’s financial position and its policyholders,” Rick Uhlmann, CUNA Mutual senior manager media relations, said in a statement. “As such, we made the very difficult decisions to eliminate the company-funded subsidies for retiree health insurance premiums. “We are pleased two courts have upheld CUNA Mutual’s right and authority to make changes to these types of benefit plans,” he added.

Maine CUs scholarships help college bound offset expenses

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PORTLAND, Maine. (8/12/11)--This year, Maine credit unions presented more than $215,000 in scholarship money, a significant increase from 2010, said the Maine Credit Union League. Maine credit unions provided scholarship money to more than 300 students. The scholarships represent the largest number of scholarship recipients and tuition contributions ever made by the state’s cooperative financial institutions. Nearly every credit union awarded at least one scholarship to a member of the Class of 2011. Understanding the need for many adults to return to school to succeed in a challenging job market, the credit unions also presented more than $20,000 in scholarship funds to non-traditional students. The amounts ranged from $250 to $10,000. “This clearly demonstrates the desire of Maine’s credit unions to enable more Maine people to pursue their education, regardless of where they are in life, or the current economic climate,” said Jon Paradise, league governmental and public affairs manager. “The ‘people helping people’ philosophy of Maine’s credit unions is about not just providing financial services to consumers but is also about providing opportunities to Maine people.” Many credit unions also presented free financial aid seminars in the spring to help parents and their children finance a college education.

Illinois CUs meet in-district with Rep. Kinzinger

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NAPERVILLE, Ill. (8/11/11)--Credit union executives and chapter volunteer legislative forum representatives (LFR) of the Illinois Credit Union League (ICUL) met with freshman U.S. Rep. Adam Kinzinger (R-Ill.) Tuesday at his district office in Joliet, Ill.
Click to view larger imageA delegation from Illinois Credit Union League (ICUL) met with freshman U.S. Rep. Adam Kinzinger (R-Ill.) Tuesday at his district office in Joliet, Ill. From left, are: Donald Edwards, senior vice president, federal governmental affairs, ICUL; Brian Cedergren, CEO, Abri CU, Romeoville; Terry Shuff, CEO, New Century FCU, Joliet; Sandy Burkart, vice president, Financial Plus CU, Ottawa; Tom Pierce, CEO, Canals & Trails CU, Lockport; Kinzinger; Matthew Thraen, consultant, Abri CU; Pete Fauth, ICUL legislative forum representative (LFR), Tri-County Chapter of Credit Unions; and Wade Cooper, ICUL LFR, Will County Chapter of Credit Unions. (Photo provided by the Illinois Credit Union League)
The meeting was requested to provide the congressman with input from Illinois credit unions about their issues and the impact of federal legislation on their memberships. Nearly 150,000 credit union members live in the 11th Congressional District served by 46 credit unions that hold about $1 billion in assets. Issues discussed include small business lending--an initiative that credit unions nationwide and the Credit Union National Association (CUNA) have addressed with Congress to lift credit union restrictions--the credit union federal tax exemption and regulatory burdens. Taking part in the meeting were:
* Sandy Burkart, vice president, Financial Plus CU, Ottawa; * Brian Cedergren, CEO, Abri CU, Romeoville; * Wade Cooper, LFR, Will County Chapter of Credit Unions; * Donald Edwards, senior vice president, federal governmental affairs, ICUL; * Pete Fauth, LFR, Tri-County Chapter of Credit Unions; * Matthew Thraen, consultant, Abri CU; * Terry Shuff, CEO, New Century FCU, Joliet; and * Tom Pierce, CEO, Canals & Trails CU, Lockport.
Since his election during the Fall 2010 election cycle, Kinzinger has been appointed to the Energy and Commerce Committee and was named to the House Majority Transition Team. “We previously met at the time of his inauguration earlier this year, and this is part of our on-going grassroots efforts to better acquaint lawmakers with our important issues and the chapter network of political activists,” said Edwards. “The chapters are an important link in the league’s on-going efforts to show the importance of credit unions in the financial marketplace.”

Rebranding inspires Ohio CU to form marketing CUSO

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SANDUSKY, Ohio (8/11/11)--Among the areas where small asset-sized credit unions find it difficult to compete with larger financial institutions is marketing and social media. A rebranding campaign inspired $145 million asset VacationLand FCU, Sandusky, Ohio, to form a credit union service organization (CUSO) and share its newly developed expertise in developing marketing plans and social media strategy with other credit unions. VacationLand FCU was founded in 1956 to serve the employees, families and retirees of a local General Motors plant. The credit union expanded to community charter in 2001. In 2007, new CEO Kevin Ralofsky initiated a rebranding campaign, which he describes as “tactical survival mechanism” to keep the credit union relevant. Ralofsky told News Now he feared that the credit union’s maturity would lead it to obsolescence if there wasn’t effort to reach out to the next generations. He envisioned the credit union as a bigger corporate citizen in Sandusky. Working with Mark Advertising, a local agency, VacationLand FCU designed a new logo and brand, and built a marketing strategy around reaching out to the next generations of credit union members, increasing involvement in the community, and continuing to serve its existing membership with superior service. Ralofsky also hired Bryce Roth as marketing coordinator to develop a more strategic marketing planning process and employ social media as part of VacationLand FCU’s new brand. Roth immersed himself in the local community, contacting schools and attending social and sporting events. To get around he used the credit union Big experience (CuBe), a multi-media vehicle outfitted to perform most financial transactions. With glass walls, gaming systems, LED and LED lights in the wheel wells, CuBe is designed to get attention. Roth re-enforced his appearances with what he calls the Holy Trinity of social media: YouTube, Twitter and Facebook. He touted his appearances, made videos of events and kept members engaged with questions and financial advice. “It was part guerilla marketing with appearances and word of mouth through social media to develop critical mass and get people engaged,” Roth said. The credit union also formed the Change Agent Squad (CAS), a group of high-school and college students who serve as the “pulse” of expectation for their age group. The intent of the CAS is to educate their peers and the community on the differences between credit unions and banks. Roth said the credit union surveyed a group of local students and asked them what they wanted in a financial institution. “They were very clear: They wanted a financial institution that put time and energy into the community,” Roth said. “We said, “That’s what credit unions are all about.’” The change squad’s first event--a canned food drive--raised 1,600 canned food items, enough to supply a local food bank for four months, Roth said. Since then the group has worked with the Humane Society and United Way on similar events. “Whenever we do an event, we use Facebook, Twitter and YouTube,” Roth said. “The kids like to see themselves on video, but most important, they tell their friends: ‘These people actually listened to me.” Since January, VacationLand FCU has experienced a steady increase in membership among its targeted membership age group of 15 to 45 year olds. About 60% of net new membership is under the age of 31. Also, 86% is under 46. Ralofsky was so happy with the turnaround, he thought the strategy would work at other credit unions, he said. So VacationLand FCU started its own CUSO, Chatter Yak, to bring marketing planning and social media solutions to credit unions. “We thought, ‘Wow, we can duplicate this and share it with other credit unions,’” Ralofsky said. “It all started with our need for social media. A lot of big credit unions not only have marketing departments, they [also] have people whose jobs are dedicated to social media. That doesn’t have to be the case, and they can still be very effective in reaching their audience.” In addition to social media planning, Chatter Yak offers marketing campaigns “in a box,” billboards and digital and on-hold marketing. Chatter Yak starts each client with an in-depth survey that covers the credit union’s history through its current social media needs. The survey is followed up with a Webinar or face-to-face brainstorming session to discuss survey results and the credit union’s marketing vision. Chatter Yak then develops what Ralofsky calls a “30,000-foot-view” marketing tactical plan for the credit union. “The idea is to provide the CEO with a plan outlining marketing goals that are in line with the credit union’s strategic plan that he or she can take to the board,” Ralofsky said. If a credit union is interested in employing Chatter Yak’s social media strategy, the CUSO provides social media planning campaign management, including curriculum, a branded website for a Change Agent Squad, focus group surveys and event planning. “We’re sticking our necks out to provide real value early in the process,” Ralofsky said. “We think we’ve created products, services and strategies that allow the smallest credit unions to get in the game and look like experts at marketing. That’s the key.” Chatter Yak has signed on eight clients, Ralofsky said.

CU System briefs (08/11/2011)

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* LANCASTER, Pa. (8/12/11)--A Maryland man has been arrested by York, Pa., area police in connection with seven robberies, including armed robberies of two credit unions on Wednesday. Jason Dixon of Baltimore and a female were arrested at a traffic stop near the Maryland border in a car with a handgun and a bag of cash, said police. Wednesday's robberies were at LANCO FCU, Mount Joy at about 3:15 p.m. and at AmeriChoice FCU, Lower Allen Township, at about 4 p.m. The robber was dressed in black clothing with the word "POLICE" written on his shirt and hat. Police said Dixon is a suspect in five other robberies (whptv.com Aug. 10) … * ONTARIO, Calif. (8/12/11)--The California and Nevada Credit Union
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Leagues were recognized with Awards of Distinction at the 2111 Communicators Awards. Awards went to the leagues' communications and marketing department for its 2010 Annual Meeting and Convention marketing campaign and flagship publication, Credit Union Digest. The Award of Distinction is presented for projects that exceed industry standards in quality and achievement, announced Carol Payne, vice president of communications and marketing at the leagues. The meeting campaign used the theme, "Reimagine," to acknowledge a need for new thinking for a changing industry and slumped economy while alluding to the fun aspect of the event at the Disneyland Resort in Anaheim, Calif. The Communicator Awards is the international awards program honoring creative excellence for communications professionals. (Photo provided by the California and Nevada Credit Union Leagues) … * ST. LOUIS (8/12/11)--St. Louis-based Vantage CU has named Jenn
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Cloud of St. Charles as its second Young & Free St. Louis spokesperson. Cloud, shown here with Rob Cartwright, Vantage's 2010 spokesperson, was one of 26 applicants for the position. Three finalists were voted on by the public. "Jenn impressed us with her wit and quirkiness. The tone of her videos, blogs and posts stood out, not to mention, her prior agency experience make her an ideal candidate to be the voice of the St. Louis 18-to-25 crowd," said Kathy Palmer, Vantage vice president of marketing. Cloud will be a salaried employee for one year and will attend events, update social media and create regular online videos and blog articles to keep YoungFreeStLouis.com an informative hub for the age group. (Photo provided by Vantage CU) …

CU uses pop-up branch to sign up members

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PORTLAND, Ore. (8/12/11)--Unitus Community CU, which has been using
Click to view larger image Brett Wooden, business development manager at Unitus Community CU, Portland, Ore., provides a virtual tour of products and services for a guest attending a pre-opening event for the new Unitus Mall 205 branch. The credit union is using the iPad to make membership enrollment easier for both members and the credit union.
iPads to sign up new members where they work or live, took the idea another step by creating a pop-up branch prior to the opening of its new Unitus Mall 205 branch. In the pop-up, which was a tent designed to resemble a Unitus branch, staff armed with iPads quickly checked in lines of people attending the pre-opening festivities. "So instead of standing in line for a long period, people had the extra time to enjoy food and beverages and to mingle with radio station personalities," said Brett Wooden, business development manager at the Portland, Ore.-based credit union.
Click to view larger image Amy Ferdinando, senior business development officer at Unitus Community CU, shows how easy it is to become a member by completing "paperwork" on an iPad. Unitus staff were on hand for a branch pre-opening event where use of technology cut time waiting in line for hundreds who could then enjoy the festivities. (Photos provided by Unitus Community CU)
"It also gave our staff an opportunity to take everyone on a virtual tour of Unitus' services, including Total Finance and UOnline," he added. Because the Mall 205 branch wasn't scheduled to open until July 25, those who wanted to become new members during the pre-opening event could sign up at the event. During the three -day event, Unitus welcomed 99 new members. In a similar pre-opening at the credit union's Peterkort branch in Beaverton, Unitus gained 186 new members. Unitus marketed the pre-opening with a post-card mailing and an offer of a free iPod Nano to the first 100 in line. Unitus said that judging by calls and e-mails it received from around the globe, it was the first to use iPad technology to make it more convenient for people to become members. The credit union has received invitations to speak about it at conferences and at online marketing seminars and been recognized in several national credit union industry publications.

Corporate America at 4.13 cap ratio--without members capital

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IRONDALE, Ala. (8/12/11)--Corporate America CU CACU) will be one of the surviving corporate credit unions, weighing in with a 4.13% capital ratio as of July 31--without requiring any capital from members, according to the Alabama-based corporate. The deadline for corporate credit unions to comply with the capital requirements of the National Credit Union Administration's Regulation part 704 is in October. Corporate America determined it would not require capital of its members because its leadership believes that capitalization should be a choice, not a mandate, CACU said in a press release. "By voluntarily investing in Corporate America's capital, our members have given us their highest vote of confidence," said Thomas D. Bonds, president/CEO. "We have substantially the same amount of retained earnings as we did prior to the [nation's financial] crisis and far more capital. In fact, we anticipate approaching a 5% interim leverage ratio within nine months," he added. Throughout the crisis, CACU took the approach that "it's a privilege, not a right, to have the trust of our members," Bonds said. The message resonated with membership and many other credit unions, said the corporate. CACU's asset size and the number of member credit unions have doubled in the past two years. CACU now serves more than 400 credit unions in 32 states. "Corporate America is stronger, larger, and better capitalized than ever before," said Bonds. "We're able to face our members because none of them lost capital at Corporate America. We will not require capital. We don't need to. We work for our members, not the other way around," he added.

American Airlines FCU to pay OT back wages

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FORT WORTH, Texas (8/11/11)--A credit union in Fort Worth, Texas, has agreed to pay $83,608 in back overtime wages to 295 current and former employees after an error in calculating the formula for overtime resulted in its classifying salaried employees as exempt from overtime and record-keeping provisions in the Fair Labor Standards Act (FLSA). American Airlines FCU will pay current and former tellers, loan officers and member service representatives, according to the regional administrator at the U.S. Department of Labor's Wage and Hour Division (Houston Workplace Issuers Examiner Aug. 8). An investigation by its Dallas District Office found improper classification for the employees, who were paid straight-time wages instead of time and a half wages required by FSLA. The office also said it did not keep accurate work time and payroll records for employees. FSLA requires covered employees to be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and a half of their regular rate of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week, said the division. The time and a half requirement also includes incentive pay, bonuses and commissions.

Louisiana award winners honored by league

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HARAHAN, La. (8/11/11)--The Louisiana Credit Union League recognized recipients of the state-evel Desjardins Youth and Adult Financial Literacy Awards and the Dora Maxwell Social Responsibility Award during the league's 77th Annual Meeting and Convention last week in New Orleans. More than 400 credit union professionals and volunteers attended the convention, said the league (eNews Aug. 10). Awards and the recipients are:
* Desjardins Youth Financial Literacy Award, presented to Greater New Orleans FCU, Metairie; * Desjardins Adult Financial Literacy Award, to Pelican State FCU, Baton Rouge; and * Dora Maxwell Social Responsibility Award, to New Orleans Firemen's FCU, Metairie.
The three credit unions will move into the competition for the national Desjardins and Maxwell awards presented by the Credit Union National Association. The league also presented a number of marketing awards for best annual report, best newsletter and best website.

Pa. CU Foundation tops 3M in funds raised

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HARRISBURG, Pa. (8/11/11)--The Pennsylvania Credit Union Foundation has reached a milestone of $3 million in funds raised during the past 15 years and four months. Since it was chartered on March 19, 1966, the foundation has issued 444 grants totaling more than $1.85 million, reported the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Aug. 10). Among the grants:
* 115 were financial literacy grants totaling $688,068 since 2003; * 38 were disaster relief grants for $309,522 since 1996; * 210 were small-credit union development grants totaling $549,180 since 2000; and * 19 were outreach grants totaling $242,113.
"The foundation has always served as an instrument that helps the underserved, both within and outside our movement," said foundation board Chairman Ray Brunner, who credited seven previous foundation board chairmen with the success. Jim McCormack, PCUA president CEO and foundation ex officio board member, noted that many volunteers serving on the foundation board "have devised a first-class strategy resulting in the foundation's success during the past 15 years." Joe Wambach, foundation executive director, pointed out that fundraising chairmen John Kebles, Bob Marquette and Dave Ackerman "have provided leadership and magnificent service." The caliber of grants also lent itself to the fundraising success, he said.

Twelve inducted into Louisiana CU Hall of Fame

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HARAHAN, La. (8/11/11)--The Louisiana Credit Union League (LCUL) inducted 12 individuals into the Louisiana Credit Union Hall of Fame at the league’s 2011 Annual Meeting and Convention last week. The hall was established to recognize the leadership, commitment and contributions of credit union professionals and volunteers statewide (LCUL’s eNews Aug. 10). The 2011 inductees recognized during the opening ceremonies were:
* Paul J. Bertuccini, inducted by Louisiana Central CU, Harahan; * Jessie J. Champagne, inducted by Section 705 FCU, Lafayette; * Anne Cochran, inducted by Louisiana Credit Union League staff; * M.E. “Red” Craighead, inducted by Centric FCU, West Monroe; * Charles B. George, Jr., inducted by Jefferson Parish Employees FCU, Harahan; * Helen Godfrey-Smith, inducted by Shreveport (La.) FCU, * Carl E. Lazarone, inducted by Jefferson Parish Employees FCU, Harahan; * Donald P. Leblanc, inducted by Lafayette (La.) Schools FCU; * Frieda Massingale, inducted by Centric FCU; * LaNard J. Robinet, inducted by Louisiana FCU, La Place; * Stanley H. Stucke, inducted by Louisiana Central CU; and * Julius Wagoner, inducted by Ouachita Valley FCU, West Monroe.
A special wall designated for the Louisiana Credit Union Hall of Fame will be located in the league’s headquarters. Also, a $500 donation on behalf of the inductee will be made to the Louisiana Credit Union Foundation. The donation will help develop educational programs for credit unions and monetary support to Louisiana credit unions during times of natural disasters.

Survey 64 dont have funds for unplanned expenses

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WASHINGTON (8/11/11)--About 64% of Americans would use a source other than their savings account to satisfy a $1,000 unplanned expense, the National Foundation for Credit Counseling’s (NFCC) July online poll revealed. This could be an opportunity for credit unions to help members bolster their savings for emergencies. The largest number of those surveyed--nearly 2,700 respondents or 36%--said they would tap their savings account to fund an unplanned expense. Using rainy day funds for an emergency is exactly why a person saves, to protect them against the unknown, said NFCC. However, the remaining 64% are in a much different situation, living on a slippery financial slope, NFCC said. “Without adequate savings, consumers have poor resolution choices when an emergency arises,” said Gail Cunningham, NFCC spokesperson. “People often say they can’t afford to save, but the truth is that they can’t afford not to.” To resolve the problem, 17% of respondents surveyed indicated they would borrow the money from friends or family. Another 17% said they would neglect existing obligations to satisfy the emergency need. This option can easily get out of control and have serious consequences, NFCC said. Twelve percent of those surveyed would sell or pawn assets. Disposing of unwanted or unused items can be a positive way to raise funds, but not out of desperation, NFCC said. Taking out a loan or obtaining a cash advance from a credit card were each selected by 9%. The low number of individuals choosing these categories could indicate a lack of access to credit. “Selecting any option other than taking the money from savings should be a red flag,” Cunningham said. “If saving money has always seemed out of reach, there is no better time than now to get to the root of the problem and protect yourself, your family and your financial future.” Those needing help finding hidden money in their budget can reach out to a trained NFCC Certified Credit Counselor. Call 800-388-2227, or use the link. For help in Spanish, call 800-682-9832. The NFCC’s July Financial Literacy Opinion Index was conducted via the homepage of the NFCC website from July 1 to July 31 and was answered by 2,667 individuals.

Social network mobile apps flunk security test

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NEW YORK (8/11/11)--About 25% of mobile banking programs received a “fail” rating for security in a study conducted by viaForensics. The failures mostly occurred because testers could capture a user password or other sensitive user data from a user’s mobile device (American BankerAug. 8). In some cases, the apps stored a security personal identification number or a user name and password. Testers also were able to recover payment history, partial credit card numbers and other transaction-related data. About 31% of mobile banking apps received a “warn” grade because a user name or other app data were present, but the information was not considered a significant risk to the user. The other 44% of mobile banking apps passed the test. Unencrypted passwords are the major source of risk for financial institutions, according to Andrew Hoog, chief investigative officer at viaForensics. Hoog noted users tend to store their passwords on their devices and carry the devices with them. The devices usually are online--susceptible to hackers--and outside of the financial institution’s control, Hoog said. The report also said that of social networking or retail mobile apps tested, none passed.

CU System briefs (08/10/2011)

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* ST. LOUIS (8/11/11)--U.S. Rep Russ Carnahan (D-Mo.) reiterated his
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support of credit unions’ member business lending bill at a meeting with St. Louis area credit unions, according the Missouri Credit Union Association (MCUA) (The Missouri Difference Aug. 9). Carnahan, who is a co-sponsor of H.R. 1418--Small Business Lending Enhancement Act, met with credit union leaders on Friday in his St. Louis County district office. Pictured, from left, are: Micki Milonas, West Community CU, O’Fallon; Mike Beall, MCUA president/CEO; Jennifer Wright, Arsenal CU, Arnold; Brian Eyestone, Southpointe CU, St. Louis; Carnahan; Stan Moeckli, Electro Savings CU, St. Louis; Laura Alfeldt, First Community CU, Chesterfield; Dave Osborn, Anheuser-Busch Employees CU, St. Louis; Amy McLard, MCUA; and Steve Poniewaz, First Missouri CU, St. Louis. (Photo provided by the Missouri Credit Union Association) … * ST. LOUIS (8/11/11)--Membership of North Jefferson County Catholic CU, with $1 million assets, Arnold, Mo., voted to approve a merger with Southpointe CU, St. Louis, according the Missouri Credit Union Association (The Missouri Difference Aug. 9). The vote was 99 to 9 to approve the merger. The merger will be effective Sept. 30, pending Missouri Division of Credit Union approval. Southpointe has also agreed to provide financial education to the church and school. One board member from North Jefferson County Catholic CU will be added to the Southpointe board. The existing office for North Jefferson County Catholic CU will be closed, but Southpointe participates in shared branching so there are convenient alternatives, said MCUA. This is the third U.S. merger within three months of a credit union servicing Catholic parishes. Catholic CU and Yakima Valley CU, both of Yakima, Wash., received approval of their merger application from the Washington Department of Financial Institutions and the National Credit Union Administration in July. St. John’s of Little Canada (Minn.) CU, acquired Minnesota Catholic CU, Spring Lake, Minn., on July 1 …

Pact made for Iowa CUs correspondent services

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ARLINGTON, Va. (8/11/11)--An agreement to provide delivery of correspondent services to Iowa credit unions has been established by The Members Group (TMG), a subsidiary of the Iowa Credit Union League, and Washington, D.C.-based NCB, FSB, a federally chartered financial institution that serves cooperatives and their members. The solution combines member service capabilities of TMG with products and financial strength of NCB and will serve Iowa credit unions as the Iowa Central Corporate CU winds down its services. According to the two companies, the NCB proposal:
* Requires no capital investment by Iowa credit unions now or in the future; * Provides products and services consistent with those offered today by the Iowa corporate; * Delivers better rates than the Fed and keeps cost of services generally consistent with pricing today; * Offers local delivery of services using support staff at TMG; * Demonstrates financial security with NCB's strong balance sheet, high level of liquidity and a total risk-based capital ratio in excess of 15%. It also offers 100% protection by the Federal Deposit Insurance Corp.'s deposit insurance fund through at least the end of 2012; and * Supports the credit union community with NCB's history of industry leaders serving on its board and its focus on collaboration with credit unions and other cooperative organizations.
"As the Iowa Corporate works towards unwinding our operations, we are happy to be able to offer Iowa credit unions an attractive alternative for their correspondent banking services," said Sara Flynn, CEO of Iowa Corporate. "We look forward to working with Iowa credit unions to transition them to the new solution." The transition will take place over the next few months.

CU4Kids CUSWAG launch slogan contest

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WASHINGTON (8/11/11)--Credit Unions for Kids and CU*SWAG have joined to launch a T-shirt slogan contest benefitting Children’s Miracle Network Hospitals. Credit union employees can submit a T-shirt slogan through Tuesday. The top 10 slogans will be voted on from Aug. 19 through Aug. 25. The slogan with the most votes will win the creators a trip for two to Disney World and an invitation to Children’s Miracle Network Hospitals’ annual celebration event. “Winning a trip to Disney--including your flight, hotel stay, park passes and tickets--is awesome,” said Nida Ajaz, sprouter of strategy for CU*SWAG. “But the celebration event is beyond words. I had the privilege of attending last year, and I have been dedicated to supporting the Credit Union for Kids program since then. “It’s incredibly moving to meet these young kids and see firsthand how local Children’s Miracle Network Hospitals truly make a difference in our communities,” Ajaz added. The winning slogan will be made into a T-shirt available through CU*SWAG. The profits will benefit the purchasing credit union’s local Children’s Miracle Network Hospital. For more information, use the links.

NCUF grant funds N.M. CUs savings challenge

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ALBUQUERQUE, N.M. (8/11/11)--Several New Mexico families who belong to credit unions now have better financial habits after participating in the 11-month-long “Savings Challenge New Mexico”--and one family earned $10,000 for its efforts.
Shawn and Tina Maria Schiller, members of High Plains FCU, Clovis, N.M., won $10,000 after reducing their debt and increasing their savings and credit score during “Savings Challenge New Mexico.” From left, front row, High Plains FCU Savings Challenge coach Tammy Lewis and Tina-Maria Schiller; back row, High Plains FCU Savings Challenge coach Kathy Allenberg, Shawn Schiller, and High Plains FCU CEO Marty Tressell. (Photo provided by National Credit Union Foundation)
The challenge provided participants with three goals: reduce debt, build savings and improve their credit score. The challenge provided each family with the skills to achieve a better financial situation. The Savings Challenge was made possible by a grant from the National Credit Union Foundation (NCUF) to the Credit Union Association of New Mexico, which provided management, educational resources and financial support to the five New Mexico credit unions that participated. Shawn and Tina-Marie Schiller, members of High Plains FCU in Clovis, were the top winners, receiving $10,000 after meeting the three challenge goals. The couple was coached by Tammy Lewis from High Plains FCU. At the start of the challenge, Tina-Marie Schiller admitted she did a lot of unnecessary shopping with department store credit cards. Shawn Schiller said it was important for the couple to have good financial habits and save money. Although the Schillers had a good credit history and score, they were lived paycheck to paycheck and “getting nowhere,” they said before the challenge. The family’s goal was to be debt-free (aside from its mortgage) and set some money aside for its sons’ college education and medical insurance. The Schillers reduced their debt about 10%, significantly built savings and improved their credit score more than 5%. The prize money will go into a savings account for their sons’ education. A total of $22,750 was awarded to the Savings Challenge participants. Other winners in the challenge were:
* David and Denice Pratesi, Chino FCU, Silver City, N.M. With help from Chino FCU coach Bill Stites, David, a disabled veteran, and his wife, Denice, a home health care provider, reduced their debt 64.73% and won $2,500. * Athena Beshur, Guadalupe CU, Santa Fe. Coached by Diane Sandoval, Beshur--the owner of a local landscape company--eliminated her debt, built her savings more than 600% and improved her credit score, winning $2,500. * Reyes and Isabel Gonzales, Everyone’s FCU, Tucumcari. Coached by Everyone’s FCU CEO Andi Baum, the Gonzaleses won $2,500. The couple reduced debt almost by half, increased the credit score and multiplied savings by more than 900%. * Sharla Frazier, Rio Grande CU, Albuquerque. A police dispatcher and the single mother of three girls, Frazier was coached by Stephanie Szpunar. Frazier’s debt remained level but she was able to build her savings and raise her credit score, earning $2,500. * Brandi Jo Thomas, High Plains, FCU. Coached by Kathy Allenberg, Thomas reduced her debt, increased her savings by almost 500% and improved her credit score. She received $2,500. * Deeanza Duran, Guadalupe CU. Coached by Annette Hernandez, this single mother did not meet the challenge goals, but received a new awareness of the importance of healthy financial habits. She received $250 for finishing the challenge.
NCUF grants are made possible by supporters of the foundation and the Community Investment Fund (CIF), an award-winning system of investments that help credit unions earn dividends while donating to national and state community development programs.

CU System briefs (08/09/2011)

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* CANDIA, N.H. (8/10/11)--New Hampshire credit unions raised $150,000 for the Make-A-Wish Foundation of New Hampshire for 2011, according to the New Hampshire Credit Union League. The amount raised surpassed the initial goal by $5,000, and was achieved through the efforts of New Hampshire’s 26 credit unions and a series of statewide and local fundraising initiatives, the league said. The announcement was made at the 11th annual Richard D. Mahoney Credit Union Charity Golf Tournament in Candia, N.H., where 128 participants and 15 major tournament sponsors raised $60,500 … * KENNEWICK, Wash. (8/10/11)--A College Place, Wash., man who was tricked by an Internet scam into opening a credit union account and moving money that was transferred to him was sentenced to five days in jail after pleading guilty to attempted second-degree trafficking in stolen property (Tri-City Herald Aug. 8). Robert Randle Carron, 47, was suspicious about what he was asked to do by a company called Ardex but continued transferring money from what he believed was purchasers of construction supplies to sellers of the supplies. He opened an account at Gesa CU, Richland, Wash.; received money transfers; and transferred part of the funds to others through a wire transfer. He wa allowed to keep the remainder as a fee. He made six money transfers into his Gesa CU account and was caught after a victim six wire transfers had been made from his savings account into Carron's account … * ANCHORAGE, Alaska (8/10/11)-- A methamphetamine addict in Anchorage, Alaska, was sentenced Monday to more than 13 years in prison for robbing four credit unions and banks in the area. Dennis Dale Hubble Jr., 38, also was sentenced to five years of supervision upon release, said the Karen Loeffler, U.S. attorney for the District of Alaska. U.S. District Judge Timothy M. Burgess also ordered Hubble to make restitution of more than $14,000 to the victims and undergo treatment during prison. The robberies occurred at Wells Fargo Bank on Nov. 15, Denali Alaskan FCU on Nov. 23, a Wells Fargo branch on Jan. 7, and a branch of Alaska USA FCU March 13. Hubble pleaded guilty to the robberies plus to a fifth uncharged robbery (Targeted News Service Aug. 8) …

CU ATMs help Yahoo Finance writer avoid fees

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NEW YORK (8/10/11)--A Yahoo! Finance contributor's article on "How I Avoid Paying Bank Fees" writes that credit union ATMs are one of the ways she avoids fees. Tal Boldo noted that "with banks competing for my business, I have plenty of opportunities to avoid paying bank fees. Adopting good financial habits is usually all it takes" (finance.yahoo.com Aug 8). "I asked my credit union for a list of ATM machines in my area that won't charge me a withdrawal fee. The list included the names of affiliate credit unions as well. I use these ATM locations only and as a result never pay a withdrawal fee," she wrote. Her 10 tips also included advice about fees for paper statements, overdrafts, cash back, balance transfers, late payments, credit card interest, checking accounts, annual credit card fees and returned checks.

Woman shot at drive-through ATM in Florida

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LEESBURG, Fla. (8/10/11)--A woman who was shot while withdrawing cash from a drive-through ATM at a credit union branch in Leesburg, Fla., Tuesday was recovering in an Orlando hospital of two gunshot wounds. The 55-year-old Fruitland Park woman was not identified. The incident occurred at about 6 a.m. outside the Leesburg branch of Orlando-based Insight Financial CU (myfoxorlando.com and wftv.com Aug. 9). Police said three people in a pickup truck pulled up and blocked the woman's exit from the drive-through lane. One approached her and she refused to open the car door. Although she was shot, she managed to call 911 as the robbers left. The credit union was not open at the time; however it opened for business as usual Tuesday.

CUNA Mutual Another wave of ATM fee lawsuits hits CUs

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MADISON, Wis. (8/10/11)--Another rash of lawsuits continues to be filed against financial institutions for failing to properly disclose ATM fees. CUNA Mutual Group reminds credit unions simple preventative steps can help them avoid costly fines and legal fees. The lawsuits, which began in 2009, allege violation of section 205.16 of Regulation E. This provision applies when a consumer initiates an electronic funds transfer or balance inquiry at an ATM owned or operated by an institution that does not hold the account related to the transfer or inquiry. As of June 30, CUNA Mutual had 44 open claims related to class action lawsuits alleging violations of Reg E, said Brad Mundine, CUNA Mutual senior manager of Credit Union Protection Risk Management. The suits span 14 states with litigation and loss exposure expected to exceed $3 million, he said. When credit unions charge a fee to a consumer who uses a non-credit union ATM network card or debit card, section 205.16 of the regulation requires:
* Posting a sign in a prominent and conspicuous location on or at every ATM owned or operated by the credit union stating that a fee will (or may) apply, and * Disclosing the fee on the terminal screen or paper notice before the consumer is committed to paying the fee. It is not necessary to include the amount of the fee on the sign.
In addition, section 205.9 of the regulation requires the amount of the fee to appear on the receipt. Violation of Reg E could result in a fine of up to $500,000, plus costs and attorney fees based on the class action filing, CUNA Mutual said. “The lawsuits typically involve missing signage on or at the ATM and incorrect fees disclosed on the sign at the ATM,” Mundine said. “In addition, many of the lawsuits involve remote ATMs serviced by third-party vendors. Many credit unions involved in the lawsuits erroneously believed the fee notice sign was not necessary since the fee was disclosed on the terminal screen of the ATM.” Many of the lawsuits were filed by a retired Michigan couple, who reportedly combed that state searching for ATMs that lacked ATM fee signs. The couple has filed 40 lawsuits against credit unions and banks in the last 18 months. Credit unions must be vigilant in ensuring their ATMs satisfy the fee disclosure requirements of Reg E, Mundine said. “These lawsuits can be avoided simply by inspecting the ATMs periodically to ensure the fee sign is intact. Another way to avoid lawsuits is to not place the fee amount on the sign. The regulation does not require the amount of the fee to be included on the sign.” Also, it is critical to develop and maintain written procedures for regularly inspecting ATMs, CUNA Mutual said. It recommends inspecting ATMs weekly or when the ATM is serviced, whichever provides for more frequent inspections. Credit unions should also photograph each ATM at the time of inspection, maintain a log to track the inspections for all ATMs, and have management periodically review the log to ensure proper inspections are taking place. These steps may also assist in the defense of a potential class action lawsuit, said the company. At a minimum, the ATM inspection log should contain:
* ATM location inspected; * Date of inspection; * Status of ATM fee sign/notice (missing or present); * Action taken (e.g., replaced sign/notice); and * Initials of employee performing the inspections.
Credit unions using a third-party vendor for servicing ATMs should require the vendor (through the contract or maintenance agreement) to inspect the ATMs for the fee sign/notice. Missing signs should be replaced immediately. To ensure ATMs meet the regulation’s signage requirements, CUNA Mutual also suggests credit unions:
* Maintain a supply of signs/stickers to replace any that have been defaced or removed from ATMs. * Periodically test the ATMs using a non-credit union issued ATM network card or debit card to confirm the fee appears on the screen and the transaction receipt. * Consider a general signage notice stating, “A fee will [or may or specify transactions to which a fee will apply, as applicable] be imposed for providing electronic funds transfer services [or a balance inquiry].” * Confirm the ATM fees are properly disclosed on the screen and transaction receipt and the fee signage is posted on any new ATMs being deployed. * Ensure ATM fee notice signs are not damaged or removed during ATM remodeling projects. If not possible, place the fee notice sign in a temporary alternate location on or at the ATM in a prominent and conspicuous manner and return it to its permanent location once the remodeling project is complete.
Mundine recommends policyholders, which represent more than 90% of U.S. credit unions, visit CUNA Mutual’s Protection Resource Center at www.cunamutual.com to access a webinar and other risk prevention tools that can help credit unions prevent further losses.

Registration opens for Spring 2012 DE training

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MADISON, Wis. (8/10/11)--Registration is open for the Spring 2012 Credit Union Development Education (DE) training class taking place April 18-25 in Madison, Wis. Attendees of the six-day total immersion experience will learn about credit unions’ social responsibility and domestic and international development, through interactive education and professional networking. “Sometimes the experiences we have from listening to others, and sharing our ideas, are so powerful that they inspire you to do more,” said Patrick Livingston, director of strategic projects at Coastal FCU, Raleigh, N.C., after attending DE training in April. “DE training also helps you develop your own sense of understanding of credit union philosophy, and further shapes your desire to learn and grow.” Inspired after the training, Livingston co-founded a group for local credit union staff to network informally and learn more about credit union values. “CU Aware” meets monthly and continues to grow in attendees and content. The group was started with fellow DE training graduate Brandon McAdams, who also works at Coastal FCU. DE training is open to everyone, from new employees who need a credit union orientation, to seasoned executives who need to recharge. Participants will:
* Acquire skills in credit union outreach initiatives, problem solving, technical assistance, team building and public presentations. * Earn certification as Credit Union Development Educators (CUDEs). They join a networking group that includes more than 1,000 graduates from the U.S. and more than 30 other countries. * Realize that local issues are global--and that global issues are local. * Understand that credit unions grow stronger by working cooperatively.
CUDEs return to their jobs with a new understanding of how to promote cooperative principles and credit union values as distinct advantages in today’s competitive financial services marketplace. “Since the DE training earlier this year, we have had more than 60 credit union people express interest in attending the next training,” said Lois Kitsch, National Credit Union Foundation’s national program director. “Registration is limited to 42 attendees.” For more information, use the links.

New Catalyst Corporate counts 866 members so far

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DULUTH, Ga. (8/10/11)--More milestones in the plan to launch Catalyst Corporate have been reached. It now has 866 members, and last month, Georgia Corporate FCU and Southwest Bridge Corporate FCU transferred members’ pledged Perpetual Contributed Capital (PCC) into escrow --signaling confidence that the business plan laid out earlier this year will succeed. The joint strategic plan, presented to member credit unions in March, stated that as soon as sufficient capital subscriptions were obtained, pledged funds would be moved into an escrow account at U.S. Central Bridge FCU to prepare for the eventual transfer of the funds to PCC on the date of the merger. “Together we have raised $91.3 million in PCC,” said Greg Moore, president/CEO of Georgia Corporate. “And perhaps more importantly--these capital pledges represent more than 865 subscribing members.” To date, about 74% of the previous capital shareholders of the two corporates are on board as capitalizing members of Catalyst Corporate. “The fact that so many credit unions, after completing months of due diligence, chose to partner with Catalyst Corporate through capitalization speaks volumes about the value we can achieve,” said Southwest Bridge Corporate President/CEO Dianne Addington. Moore agrees: “Credit unions have confirmed that they believe in a cooperative model, and that they appreciate the importance of scale when choosing a corporate,” he said. He noted the operating efficiencies presented by their model “make a difference that goes beyond better pricing. It means that we won’t have to rely on our balance sheet, and that means less risk.” Credit unions have made it known that they want to continue to use the services of a corporate, but to reduce their exposure to risk. The corporate will minimize the amount of capital a credit union puts at risk, and minimize “the risk we take with those assets,” Addington said. She pointed out that Catalyst Corporate’s model balance sheet is more conservative than what is required by new regulation 704. Plans for the operational merger also are underway and going smoothly, Moore said. “Our members have given us positive feedback as we have introduced them to the new system and enhancements to products and services that will result from the consolidation,” he said. “In particular, they are pleased that their lines of credit will remain intact--a key concern for many credit unions that are capitalizing Catalyst.” The National Credit Union Administration is expected to approve the merger application this month, with the consolidation taking place on Sept. 6.

Filene explores patronage dividends

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MADISON, Wis. (8/10/11)--“Credit Union and Cooperative Patronage Refunds,” the newest report from the Filene Research Institute, examines patronage refunds, a tool credit unions and other cooperatives use to manage capital levels, return value to members, and tie members more closely to their organizations. Authors Joel Dahlgren, and Dan Kitzberger examine the details of common refund practices outside the credit union system and weigh the pros and cons of how the practice is increasing within the credit union industry. “The patronage dividend is a back-to-the-future tool that allows credit unions to reward cooperative ownership, build member loyalty, and stimulate growth,” said Mark Meyer Filene CEO. “We know that capital positions are under stress at many credit unions, but there is long-term value in the process, and it is one of the few true differentiators available to credit unions.” Using cooperative theory, Dahlgren and Kitzberger argue that credit unions should go beyond traditional interest-rate thinking to consider patronage dividends as a long-term commitment to the most loyal members. The difference between a cooperative—such as a credit union--and an investor-owned firm resonates in how well the cooperative rewards members who contribute the most to its ongoing success. The 64-page report features:
* Three credit union case studies that show how $887 million asset CoVantage CU, Antigo, Wis.; $1.4 billion asset Dow Chemical Employees’ CU, Midland, Mich.; and $2.1 billion asset Wright-Patt CU, Fairborn, Ohio, calculate their patronage refunds and why they see value in offering them; * An in-depth examination of how patronage refunds affect tax liability at non-credit union cooperatives; and * Discussion of how patronage dividends drive a member-centric conversation about capital management.
The report redirects discussions about managing capital into considerations about rewarding credit union owners.

Randolph-Brooks exceeds 1B in auto loans

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LIVE OAK, Texas (8/10/11)--In midst of a slow economy, $4.3 billion asset Randolph-Brooks FCU (RBFCU) has surpassed $1 billion in auto loans for the first time in its history. The Live Oak, Texas-based credit union’s leaders credit the current low rate and consistent across-the-board lending policies for both financing and refinancing as reasons for its lending success. “We’ve seen an increase in members who have taken advantage of our low-rate loans for an auto loan or to refinance a vehicle,” said Mark Sekula, Randolph-Brooks FCU chief lending officer. “At the same time, we’ve also seen many new members join RBFCU because of our low rates, then transfer their other accounts to us because they receive a superior value on overall products and services.” Much of the loan volume has come from vehicle refinancing, Sekula said. “Refinancing is one of the most profitable decisions a purchaser can make; by refinancing a vehicle, you essentially pay less interest for the same product, and put more money back into your pocket,” he said. The credit union dropped its auto loan rate to a 1.9% annual percentage rate at the beginning of June and has seen an increase in loan applications and approvals. However, the growth the credit union is experiencing began before the rate drop. Randolph-Brooks FCU was one of the first financial institutions in South Central Texas to significantly drop lending rates. Since the first significant loan rate drop in April 2009, the credit union has seen growth in several categories, specifically:
* Membership rose 23%--by almost 70,000 members; * Assets increased 40%--about $1 billion; and * Loans increased 34%--roughly $750 million.
During the past five years, it has also seen a 75% growth in overall assets.

Kern Schools FCU passes 6 capital ratio goal

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BAKERSFIELD, Calif. (8/10/11)--Kerns Schools FCU (KSFCU) in Bakersfield, Calif., reached a 6.53% capital ratio as of June 30, passing the 6% goal set by federal regulators in the summer of 2009. The credit union’s improved financial health is mainly due to reducing costs. The goal was attained at the $1.38 billion asset credit union after two years of layoffs (more than 40 employees) and branch closures (six) caused by the recession-led market turmoil (The Bakersfield Californian Aug. 9). A credit union’s capital ratio is a bottom-line measure of financial stability determined by dividing its net worth by it total assets. Regulators use the gauge to judge whether a financial institution is strong enough to absorb financial losses. At the end of second quarter 2010, KSFCU’s capital ratio was 4.31%. Credit union officials said they are on the way to achieving the 7% capitalization level regulators require to be well-capitalized, the newspaper said. The credit union also charged off tens of millions of dollars of bad debt since 2009, and maintained a fairly healthy loan loss reserve to cover bad debt, the paper said.

Greathouse receives Global Womens award

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GLASGOW, Scotland (8/10/11)--Greta Greathouse, chief of party for the World Council of Credit Unions’ (WOCCU) development program in Haiti, has been honored with the second annual Leadership Award from the Global Women’s Leadership Network (GWLN), a WOCCU program.
Click to view larger image Greta Greathouse (left), head of World Council of Credit Unions’ (WOCCU) Haiti development program, accepts the second annual Global Women’s Leadership Network (GWLN) Leadership Award in Glasgow, Scotland, as (from left) outgoing WOCCU President/ CEO Pete Crear, GWLN Chair Susan Mitchell and incoming WOCCU President/CEO Brian Branch applaud the honor. (Photo provided by the World Council of Credit Unions)
The annual award honors outstanding achievements in support of credit union development, particularly worldwide credit union women’s leadership development. Greathouse received the honor during the GWLN Forum held last month with WOCCU’s World Credit Union Conference in Glasgow, Scotland. Greathouse had directed WOCCU’s Haiti development program, the Haiti Integrated Finance for Value Chains and Enterprises (HIFIVE), for just seven months before a devastating earthquake struck the Caribbean island nation in January 2010, taking more than 330,000 lives and rendering more than one million people homeless. The program lost its headquarters building, but all staff members survived the earthquake and immediately set about rebuilding Haiti’s credit union movement. “Greta exemplifies the leadership that we all aspire to,” said Brian Branch, WOCCU’s new president/CEO. “When the earthquake happened and most expats left the country, Greta stayed. She took care of her staff and let them find their families, then had them report back to work. Credit unions were back up and operating out of tents days after the disaster, well before other financial institutions.” Significant progress has been made in the Haiti program since the earthquake, with HIFIVE this year taking over administration of a $10 million grant from the Bill & Melinda Gates Foundation to develop cell phone financial transaction capabilities for Haiti’s residents. The country’s caisse populaires (credit unions) damaged in the earthquake also have begun rebuilding with the help of more than $1.2 million raised by the Worldwide Foundation for Credit Unions from the global credit union movement. “Great leaders inspire others to act,” said Susan Mitchell, GWLN chair and CEO of credit union consulting firm Mitchell, Stankovic & Associates in Boulder City, Nev. “Greta inspired members of the Global Women’s Leadership Network and the people of Haiti with her determination and commitment in never allowing the credit union to be cut off from its members. She knew it was a lifeline for the community. In dire circumstances, Greta demonstrated great leadership.” “My work to help to stabilize and to rebuild the HIFIVE project and the credit union sector in the difficult days following the earthquake was a team effort,” Greathouse said. “I share this award with my great team in Haiti and with the people of Haiti whose perseverance and dignity are an inspiration to me each day.” Last year, the organization’s inaugural award was presented to Stan Hollen, president/CEO of CO-OP Financial Services, for his support of GWLN and the global credit union movement.

Wisconsin CUs performance for 2nd Q improves

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MADISON, Wis. (8/10/11)--Wisconsin credit unions showed continued improvement for the first half the year, with assets and total savings increasing and the percentage of delinquent loans declining, according to data compiled by the Wisconsin Department of Financial Institutions (DFI). “Despite some challenges in the current economy, credit unions are well-positioned to continue serving their Wisconsin members as reflected in a solid net-worth ratio of 9.8%,” said DFI Secretary Peter Bildsten said. As of June 30, total assets among state credit unions were $21.6 billion, compared with $20.6 billion as of June 30, 2010--an increase of 4.9%. Total savings were $18.9 billion, a rise of 5.7% from $17.8 billion on June 30, 2010. The percentage of delinquent loans also showed improvement, dropping to 1.8% from 2% during the period. Ginger Larson, director of the Office of Credit Unions--the agency that regulates state-chartered credit unions--also pointed to improvement in credit unions’ return on assets compared to 2010. “Through June, return on assets is running at just 0.5%, an improvement over the 2010 figure of 0.3%,” Larson said. “This is a positive sign and reflects a healthy credit union industry in the state.”

With economy members will need more help

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MADISON, Wis. (8/9/11)--While credit unions assess the impact of this week's unprecedented downgrades in the U.S. government credit and market volatility on their net worth, they also can expect questions from members who will need their credit union even more--and from their staff concerned about their pension plans. Credit unions will need to reassure members and staff that the market volatility is a bump in the recovery, and help educate members so they have the information tools to weather the current environment and make solid money decisions. Expect members to broach several areas of concern with questions about:
* Whether their deposits continue to be safe and sound under the full protection of the U.S. government; * Whether they should stay with their current investments and ride it out for the long term, or make adjustments to "safer" investment vehicles; * Whether the current environment has a significant impact on how much they can borrow or on the cost of borrowing; * Whether they will still be able to buy a home or afford that college tuition; and * Whether they will continue to get good rates on their deposits.
Also, credit unions can expect staff--especially if they're near-retirement baby boomers--to have questions about their pension plans. Expect to provide more education for staffers in the current environment. Education will be a key advantage credit union members will have over bank customer s. Many credit unions offer home buying and refinance seminars as well as seminars on credit and money management topics--often free. This might be a good time to tailor some seminars to the specific questions members are asking.

iKiplingeri tells how to get a better deal with free checking

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MADISON, Wis. (8/9/11)--Consumers looking to dodge pesky bank fees can often find free checking at credit unions, according to an article scheduled for the September issue of Kiplinger’s (Kiplinger.com Aug. 8). The article, titled “How to Get a Better Deal at Your Bank,” directs consumers to asmarterchoice.org, the website the Credit Union National Association and the leagues have created to help consumers learn more about credit unions and locate one they are eligible to join. “Community banks and credit unions routinely offer free accounts with no minimum balance, no serv­ice charge and unlimited check-writing. You can find a credit union near you at www.asmarterchoice.org,” Kiplinger said. The article cites Consumers CU, Waukegan, Ill., as a community financial institution that offers a high rate of interest on its checking accounts. The credit union’s website advertised a 4.09% annual percentage rate on its Rewards Checking on Monday. The stimulus for aSmarterChoice.org came from a task force created by the American Association of Credit Union Leagues to raise awareness and foster credit union membership growth, especially among young adults. To read the article, use the link.

LSCU letter on taxation attacks Subchapter S banks

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TALLAHASSEE, Fla. (8/9/11)--A letter to the editor of The Tallahassee Democrat from the League of Southeastern Credit Unions (LSCU) attacks banks' Subchapter S agreements while pointing out the hypocrisy of bankers' claims that credit unions' congressionally mandated tax-exempt status is a "tax loophole." "This is the same argument the banking industry makes when it wants to deflect its inability to serve consumers and small businesses," wrote LSCU President/CEO Patrick La Pine in the article published Sunday. "The credit union tax exemption was established by Congress in 1934, affirmed by statute in 1951, and re-affirmed in 1998," he said. The letter is in response to Florida Bankers Association CEO Alex Sanchez, who called for Congress to close the tax-exempt status of credit unions in an article in the newspaper on Aug. 2. "This is not a tax loophole," La Pine added. "Subchapter S corporation banks receive a similar tax exemption to that of credit unions." He noted there were 2,300 Subchapter S banks, including 45 in Florida. "Sanchez's argument is hypocritical when members of his association receive a similar benefit to credit unions and he leaves that out," said La Pine. La Pine also noted that Florida credit union members enjoyed $300 million in benefits through lower interest rates, higher savings rates and lower fees last year. And he pointed out that Florida has the second-highest bank failure rate in the nation. "Not one Florida credit union has failed during this same period. Credit unions have money to lend and stand ready to help move Florida's economy forward," he concluded. LSCU serves credit unions in Florida and Alabama.

Asia Africa priorities for new WOCCU CEO Branch

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MADISON, Wis. (8/9/11)--Membership growth in Asia and Africa were among the priorities cited by new World Council of Credit Unions President/CEO Brian Branch in an interview with News Now Monday. “Asia would be a high priority for us,” said Branch, who took over leadership of WOCCU following the retirement of the Pete Crear. “We have members in Africa, but that’s an area we would like to see some expansion in as well.” In 2008, Branch, then WOCCU’s executive vice president and chief operating officer, spearheaded a development initiative with the People’s Bank of China and the China’s rural credit cooperatives to help bring affordable financial services to the country’s underserved. He said the People’s Bank seeks to create a more market-driven environment among China’s hundreds of rural cooperatives. Branch listed three areas of focus as he takes over leadership of WOCCU: increasing member organization growth in countries worldwide, expanding WOCCU’s development program, and further growing WOCCU’s service group. Through its development programs, WOCCU can provide access to the rural poor and help credit unions band together to build networks that help them to build scale, employ new technologies and provide more services, Branch told News Now. An example of this is WOCCU’s breakthrough work in helping the rural poor access financial services through mobile technology in Latin America and Haiti, he said. Branch also cited WOCCU’s International Partnership program, which pairs U.S. credit union leagues with trade associations from other countries. He cited a recent partnership between the Ohio Credit Union League and the Romanian credit union movement as an example of how credit unions worldwide can help each other “They need to have better legislation in Romania to offer the service that their members demand,” Branch explained. “They need to have more compelling products. They face the same challenges that our credit unions face in the context of the financial crisis and the recession. We had a group from Ohio go to Romania. They spent some time talking about how they manage the challenge of excess liquidity, lower returns on loans, higher delinquency, how to provision for that--the same kind of management challenges we’re used to. Credit unions worldwide face the same kind of management challenges.” Through its subsidiary, WOCCU Service Group, WOCCU provides much of the technology to credit unions in countries where it has programs. The foundation of the service group is IRnet, the International Remittance Network, which WOCCU developed in 2001 to help recent immigrants to the U.S. send funds back to their home countries. The concept has grown to include other retail delivery vehicles--such point-of-service terminals, ATMs, and mobile services. “It’s become a vehicle by which credit unions in other countries see an opportunity to collaborate and provide additional services that are very expensive for one credit union to provide, but much more reasonable if they work to do it collaboratively,” Branch said. While providing affordable and accessible financial services to so many areas of great instability is a challenge, Branch says the credit union model is very robust. “When these big changes happen throughout the world, the credit unions are so deeply rooted within their communities that that they continue to operate,” Branch said. “They are a source of stability for these communities.”

Connecticut CUs weather consumer skittishness

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HARTFORD, Conn. (8/9/11)--Connecticut's credit unions held $4.33 billion in loans at the end of March, down slightly from a year ago, but their loan quality remains strong and their loan underwriting standards have not changed, according to the Connecticut League of Credit Unions. Industry-wide capital ratios are nearly 10%, well-above what regulators require, and Connecticut's credit unions are in "outstanding shape considering the financial earthquake that hit a few years ago," said Tony Emerson, president/CEO of the league, in an article in HartfordBusiness.com (Aug.8). Delinquencies held by Connecticut's credit unions declined 8.4% the past year, and credit unions have set aside plenty of reserves to cover any potential bad loans in the future, said Emerson. According to data from the National Credit Union Administration, lending at the state's credit unions is down 1% from the same period in 2010 and 3% from 2010. Nearly every type of loan saw a decline, except first mortgages, which increased 9% from last year to $1.6 billion. As in other states, new-auto loans declined as consumers held off making big purchases until the job market improves. Connecticut credit unions hold $268 million, compared with last year's $366 million. Emerson told the publication that consumers stop borrowing money when the economy has problems. The decline in new loans means credit unions have less earnings capacity, he said. Hartford (Conn.) FCU President/CEO Ed Danek told the publication that the industry has done a good job of counterbalancing the impact of a difficult operating environment. He anticipates net income for 2011 will rise 300% compared with 2010, largely through improved credit quality and operating efficiencies.

Study Latino Community CU cut robberies against Latinos

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DURHAM, N.C. (8/9/11)--Robberies in Durham, N.C., decreased by roughly 14% between 1999--before Latino Community CU opened in 2000--and 2002, according to a University of Virginia study. The $103 million asset credit union was founded 11 years ago when there was growing concern about crime against Latinos. The credit union’s presence has helped reduce crime, said the study, “Perdido En al Traduccion: The Opportunity in Financial Services for Latinos” (heraldsun.com Aug. 5). The Latino population was targeted for robberies because of the perception they carry large amounts of cash or stash money at home, making them “walking banks,” Erika Bell, the credit union’s vice president of strategy and services, told the newspaper. The study, conducted at the Tayloe Murphy Center at the University of Virginia Darden School of Business, further suggests that if more Latinos deposited their funds in financial institutions, instead of taking the money home, they would be less attractive targets for robberies, the paper said. Latino Community CU’s deposits grew to $74 million in 2009 from $3 million in 2000, and the credit union has grown to 10 branches with 62 employees in 2010 from one branch with five employees in 2000. As of 2010, the credit union served 55,000 members--75% of which were not previously served by a financial institution, the study found. To read the article, use the link.

Fenwick Weavers Co-op says its worlds first CU

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FENWICK, Scotland (8/9/11)--The Fenwick Weavers Co-operative Society, a weaving cooperative founded in Fenwick, Ayrshire, Scotland, in 1761, has laid claim to being the world's first credit union.
Click to view larger image The village of Fenwick, Scotland, has laid claim to being home to the world’s first financial cooperative.
The Fenwick Weavers legacy program is celebrating the 250th anniversary of the cooperative this year. “Everyone needs to know where his roots are, and the Fenwick Weavers are recognized as the world’s oldest [financial] cooperative,” said John Smith, a retired British Aerospace Systems assembly line worker and lifelong Fenwick resident. He is voluntarily spearheading the effort to revive the cooperative’s legacy. “The past should not die, but should be kept going for future generations.” Smith is coauthor with John McFadzean of the 32-page booklet, “The Co-operators: A History of the Fenwick Weavers.” He and several board members of the Fenwick Weavers, no longer an active cooperative, manned a booth at World Council of Credit Unions’ (WOCCU) World Credit Union Conference in Glasgow, Scotland, last month, where they distributed copies of the publication. Members of the WOCCU board and staff visited Fenwick prior to the start of the conference to learn about the cooperative and its impact on the community. The cooperative, which signed its covenant on March 14, 1761, in Fenwick Church to avoid persecution from the ruling gentry, predates by 83 years the Rochdale Weavers Society, founded in England in 1844 and generally credited as the first financial cooperative. It also predates by 89 years the first formal credit unions, founded in Germany in 1850 by economist Franz Hermann Schulze-Delitzsch. The Fenwick Weavers formed out of necessity during harsh economic times to ensure a higher standard of living and more secure future through its members’ mutual cooperation. During its early days, the cooperatives’ members met at the town water pump--the only place they could gather without arousing suspicion--to discuss the cooperative’s affairs.
Click to view larger image Fenwick Weavers’ John Smith (center) explains the history of the world’s first financial cooperative to attendees at WOCCU's World Credit Union Conference in Glasgow, Scotland. (Photo provided by World Council of Credit Unions)
The group’s charter outlines several of the organization’s operating principles, including the need for honesty, member loyalty, fair pricing, majority decision-making and regular contributions to a fund for the poor. Members paid two shillings and six pence to join, which went to support the cooperative. On Nov. 9, 1769, another document was signed stipulating that the cooperative could purchase food in bulk to distribute to members, who would be allowed four weeks of credit before paying for the purchase. Documentation also exists showing that members could receive loans made at fixed rates from the cooperative funds. The documents are housed in the National Library and thought to be the first recorded instances of credit union activity in the world. In 1839, the economic outlook for the individual weaving trade turned bleak. The cooperative set up an emigration society that helped its members move to Canada, New Zealand, South Africa and the U.S. The population of Fenwick dropped from about 2,000 to fewer than 500 people. By 1873, the cooperative ceased operations and remained closed for 134 years until Smith, at the suggestion of his granddaughter, revived the Fenwick Weavers in 2007. A website is currently in the works at www.fenwickweaverscooperative.com. The group also hopes to one day establish a museum dedicated to the weavers in Fenwick as a way to strengthen the cooperative’s legacy. “There has been a lot of talk about cooperative history, and we hope our research on the Fenwick Weavers will encourage credit unions everywhere to dig a little bit into their own history,” said board member Margaret Smyth.

Fryzel to La. league AACUC CUs help in hardship

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NEW ORLEANS (8/9/11)--Credit unions were designed to help people--particularly during tough financial times, National Credit Union Administration (NCUA) Board member Michael E. Fryzel told the Louisiana Credit Union League. Fryzel spoke at the league’s annual meeting and convention in New Orleans Thursday, and the African American Credit Union Coalition Friday. He provided his outlook for the credit union industry and NCUA’s role within it. People look to Louisianans for inspiration, he said, citing the many natural disasters Louisiana has faced recently and how credit unions helped people get through them. “Credit unions were made to help people, and most especially in times of hardship. When it is time to join the sandbag line, credit unions band together in tough times and are there for their members,” he said. “Louisiana serves as a great example of triumph over hardship, and its credit unions continue to aid in helping their members overcome their own economic hardships as our country continues to move forward.” Fryzel also updated attendees on the industry’s corporate credit union crisis and its resolution status. “We are successfully working through the corporate problem, assisting those credit unions that have been impacted severely by the mortgage crisis and seeing our nation’s credit unions maintaining their focus on helping their members in every way they can,” he said. He gave kudos to the league and coalition for their efforts to reach out to prospective members, educate their communities about the benefits of credit unions and basic financial literacy, and expand outreach--particularly to minorities--for prospective employment opportunities with credit unions. “There is immense work to be done, and I believe that in certain communities, we have only begun to scratch the surface,” he said. “NCUA will work with you in your efforts to improve the financial lives of persons who need better knowledge and skills to help move themselves financially forward,” he added. Despite challenges, credit unions have a bright future. “We would all like to see the economy stronger and growing faster but, [with] the direction going the right way,” Fryzel said. “Delinquencies are declining, bottom lines are improving, and the corporates are regaining their health.”

Ariz. State CU Despite economy CUs lending

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PHOENIX (8/9/11)--Despite a weak economy, Arizona credit unions still are lending to their members because asset quality and capital have remained high amid challenges from the financial system crisis, an Arizona State CU executive wrote in a letter published Friday in the Phoenix Business Journal. “Arizonans can help the local economy by securing a loan with an Arizona-based financial institution,” wrote Paul Stull, senior vice president, strategy and brand, for the $1.27 billion asset, Phoenix-based Arizona State CU. “People may find that borrowing specifically from a credit union provides additional benefits, as these financial cooperatives are not-for-profit organizations owned and controlled by their members, who live and work in Arizona. “This significant difference affects how credit unions operate, with every effort focused on benefiting the member,” he added. Lower interest rates and fewer or lower fees for services also are benefits from obtaining loans from credit unions, instead of other financial institutions, Stull wrote. “While credit unions are not immune to the effects of the less-than-optimistic economy, numerous headlines are incorrectly touting the idea that these financial institutions are not lending at this time,” he said. “It may be difficult to find credit unions with the same lending flexibility that existed several years ago, but they still are actively lending,” Stull added. “In fact, many consumers and businesses unable to obtain loans from banks turn to credit unions to fill this void.”

CU System briefs (08/05/2011)

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* WASHINGTON (8/8/11)--Reginald A. Clark, 42, a former accountant at Washington, D.C.-based Hoya FCU, was sentenced Thursday to 63 months in prison for the theft of nearly $220,000 from the credit union, which serves Georgetown University faculty, staff and families. He was convicted on Feb. 1 in a U.S. District Court in Washington of taking advantage of the credit union's internal computer system to steal funds between 2001 and 2003. The charges were bank fraud, wire fraud and making false entries in federal credit institution records. He also was sentenced to five years of supervised release. Kenard Walston, 40, a cousin of Clark from Norwich, Conn., pleaded guilty in June to making a false statement related to the case. His sentencing is set for Aug. 31. (Targeted News Service Aug. 4) … * DES MOINES, Iowa (8/8/11)--Robin T. Brooks Jr. was indicted by a federal grand jury in Des Moines, Iowa, on charges of bank robbery and weapons violations related to the May 13 holdup at Tradesmen Community CU in Des Moines. He already was facing charges in a state court for the crime. His trial in state court on charges of attempted murder, theft, and robbery will begin Aug. 22. Brooks is accused of hijacking a van during the getaway and ramming a police card with it. He was shot during the capture (The Des Moines Register Aug. 5) … * SYRACUSE, N.Y. (8/8/11)--Empower FCU, a $925.5 million asset credit union based in Syracuse, N.Y., has reached the 100,000-member milestone. It has been celebrating the milestone all summer with members through weekly drawings and announcements of winners on its website. The celebration will end with grand prize drawings on Sept. 9. "It means we are reaching a growing number of people with the benefits of credit union membership," said Empower President/CEO John Wakefield. Empower serves members through more than 2,000 select employee groups or associations … * PAULSBORO, N.J. (8/8/11)--Diane Delooff, CEO of Paulsboro, N.J.-based Research-1166 FCU, will retire, effective Sept. 2. Delooff has served the credit union industry for more than 30 years, first at RCA FCU in Harrison, N.J., and then at Research-1166 FCU, according to the New Jersey Credit Union League (The Daily Exchange and The Weekly Exchange Aug. 5). Delooff has been with Research-1166 for 22 years and oversaw its growth from $12 million to $16 million in assets …

New York governor signs subpoena bill into law

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ALBANY, N.Y. (8/8/11)--New York Gov. Andrew Cuomo has signed into law legislation that will establish stricter guidelines for creditors serving information subpoenas, a priority issue for the Credit Union Association of New York. The measure, sponsored by Assemblyman Joseph Lentol (D-Metropolitan) and Sen. Stephen Saland (R-Catskill/Hudson), was a priority issue because a number of credit unions have been inundated with information subpoena requests by law firms and debt collectors seeking to enforce money judgments. The new law will deter frivolous subpoenas by imposing record-keeping requirements on debt collectors giving both private parties and the state's Attorney General the power to seek fines against the worst offenders, said the credit union association. "On behalf of the association and our member credit unions, I applaud Gov. Cuomo for signing this important legislation," said William J. Mellin, association president/CEO. "Our thanks also go out to Senator Saland and Assemblyman Lentol for championing this bill in the legislature."

CMG Mortgage Insurance on solid financial footing

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SAN FRANCISCO (8/8/11)--Although the mortgage insurance industry in general has recently reported losses, CMG Mortgage Insurance Co. (CMG MI) issued a statement Friday reconfirming its financial strength and ability to originate new mortgage insurance. "Despite current industry stresses, CMG MI is on solid financial footing," said Kim Shaul, senior vice president and general manager of the company. "CMG MI leads the mortgage insurance industry in several key areas--ratings, risk-to-capital and delinquency ratios, and liquidity," she added. The company operates as a corporate joint venture between CUNA Mutual Insurance Society and PMI Mortgage Insurance Co. It provides private mortgage guaranty insurance to protect credit unions against potential losses from borrower default. "Because CMG MI works exclusively with credit unions, who know their members, our book of business performs at a higher level," she said. "Rating agencies have also recognized this strength as well as our successful record in loss mitigation." She cited several factors as evidence for the insurer's solid footing:
* The company is a stand-alone, incorporated entity with its own capital and staffing in a number of operational departments, including claims. * It has the industry's strongest risk-to-capital ratio of 19.7 to 1, as of June 30. * It benefits from expertise and synergies of two shareholders, including CUNA Mutual Group, which is currently rated "A" by A.M. Best. * As a separate legal entity, its investment grade ratings--"BB" from Standard & Poor's (S&P's) and "BBB" from Fitch Ratings--are based primarily on its own capital, operations performance and loss mitigation, independent of its shareholders. Its Fitch rating was affirmed in July. S&P's rating has been stable since February 2010. * It has the industry's lowest portfolio delinquency ratio--5.3% as of June 30 and an improvement from 5.6% on March 31. That compares with the industry average ratio in the 16% range. * It has a strong liquidity position, as of June 30, with claims-paying resources, backed by cash and readily marketable securities of $328 million. * It has $171 million in loss reserves for claims as of the end of second quarter. * Its 2-to-1 ratio of liquidity to reserves is one of the highest in the mortgage insurance industry. * Its delinquency inventory improved in second quarter, resulting in a favorable release of more than $8 million in previously established loss reserves.

Despite bailouts Wis. banks seek CU taxation

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PEWAUKEE, Wis. (8/8/11)--Despite huge taxpayer-funded bailouts during the past few years, Wisconsin banks are pushing to have credit unions pay more taxes, according to the Wisconsin Credit Union League. Many banks behaved irresponsibly, playing a role in causing the collapse of the economy, said the league in a press release. “Then they continued the abuse of American taxpayers by grabbing billions in bailout money when they themselves don’t pay taxes on their sizable profits, but incredibly, the Wisconsin Bankers Association (WBA) now is asking for more taxes on the working citizens of Wisconsin,” the league said. In a recent letter to Wisconsin’s congressional delegation, WBA asked for a tax increase on credit unions, institutions that have filled the void for loans to individuals and small businesses as banks have further restricted credit, the league said. The league noted credit unions already pay millions of dollars a year in taxes; and another tax would impact working Wisconsin citizens because they own the credit unions where they borrow and save. “The WBA’s outrageous tax increase plea is based on a hypocritical concern for taxpayers, its never-ending desire to legislate its competition out of business and fuzzy math,” said league President/CEO Brett Thompson. Thompson in a letter to the congressional delegation setting the record straight, said the WBA’s letter is a “sloppy effort to distract the public’s attention from banks’ lead role in the economic downturn and their subsequent gratuitous reach for hard-earned taxpayer money for their bailouts.” He also pointed out several statistics:
* More than 80 banks in Wisconsin do not pay federal or state corporate income taxes each year. But whereas credit unions return their profits to members, but these banks turn theirs over to a few shareholders. * In the past, Wisconsin banks earning billions in profits paid nothing or next to nothing in state income taxes by hiding their profits in other states. * Many banking executives have been handsomely rewarded via taxpayer bailout dollars, in spite of their poor performance.
“Last year, in Wisconsin alone, credit union members saved $203 million because of credit unions’ lower loan rates, higher savings rates and lower and fewer fees,” Thompsons’ letter stated, adding that WBA cites a “vastly inflated tax figure that might be collected from credit unions.” The banks’ number is dwarfed--nearly six times over--by the savings of credit union members, said the league. Credit unions also saved Wisconsin bank customers in 2010 because their competition helped to keep bank fees and rates in line,” Thompson continued. “America’s credit unions last year saved their 91 million members over $6.7 billion when compared to banks.” Thompson’s letter also pointed to a recent news report citing two prominent Wisconsin banks that paid little or no income taxes. In addition to the $269 million that credit unions saved for all Wisconsin consumers, credit unions have been doing all along what banks should be doing--but haven’t--to help consumers, particularly those suffering financial distress because of the economic downturn, Thompson said. He added credit unions have done so voluntarily precisely because they are cooperatives that focus on the needs of their member-owners. His letter cited 100 credit union branches inside Wisconsin schools that have encouraged young people to save almost $3 million, credit unions’ small-dollar loans that provide an alternative to high-cost payday loans, and their free financial counseling to help members.

How stock market woes may impact CUs

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MADISON, Wis. (8/8/11)--Thursday’s 513-point plunge in the stock market--the worst decline in nearly two years--could affect credit unions and their members. The Standard & Poor’s 500 Index fell to 1,199.38, down 7.2% from last Friday's close, its worst week since November of 2008 (MarketWatch Aug. 5). Many analysts said the dive was due to the failure of policymakers to stabilize financial markets and investors crumpling under the strain of a worldwide economic slowdown (The Wall Street Journal Aug. 5). What is the consumer-confidence effect of the market plunge on credit union members? “A little bit more than half of U.S. households have a direct or indirect interest in the stock market,” Mike Schenk, vice president of research and statistics for the Credit Union National Association (CUNA), told News Now. “The stock market going down affects net worth, consumer sentiment and the willingness and ability to spend money.” Historical data indicate that in situations similar to what happened last week people react with a lag and basically sell on the bottom--precisely when they shouldn’t be selling. “Usually the consequence is you see flight-to-safety flows, and that should cause demand for savings balances to go up at credit unions, and also banks,” Schenk said. Will a declining stock market impact credit unions’ pricing on loans and deposits? Deposit pricing keys off the Fed Funds rate, which was near zero on Friday to begin with, Schenk said. “At least one bank is charging customers for deposits--that basically is a negative interest rate in which customers are paying banks to take their money,” he explained. “No credit unions are doing this that we know of. “However, it is conceivable that credit unions that have seen really fast deposit growth may try to limit deposit growth in the current environment,” Schenk added. “Some credit unions that have already experienced fast deposit growth have seen net-worth ratios decline, and they may drop pricing even closer to zero.” Although Schenk doesn’t expect drastic changes in loan pricing by credit unions, mortgage loan pricing is determined by the secondary market and is near historic lows. Therefore, credit unions involved in mortgage lending will drop their rates, or ignore rate declines and basically originate mortgages for a short period of time or else significantly curtail mortgages, he said. Should credit unions do anything right now in response to a large stock market tumble? “It’s unwise to assume that this is the new normal,” Schenk said. “There’s a lot of uncertainty in the marketplace, but a lot of it has declined recently--more stability in the Middle East, fewer weather-related disasters, and the Japanese manufacturing supply disruptions have worked themselves out. “Our [CUNA’s] baseline view is that this is likely to be an extended soft patch--a slowdown in the middle of a sustainable economic recovery.” For CUNA’s Economic and Credit Union 2011-2012 Forecast, use the link.

CUs outperform banks on national customer loyalty metric

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CHICAGO, Ill. (8/8/11)--Credit unions are outperforming banks when it comes to maintaining member/customer loyalty, according to a nationally recognized customer loyalty metric. Credit unions have a 58% Net Promoter score, compared with 18% at banks, according to the Member Loyalty Group's second quarter credit union Net Promoter benchmark score. The group was created in 2008 to develop a common member loyalty benchmark for the credit union industry. It works with a partner, Satmetrix, to measure and compare member loyalty in credit unions. "The findings really validate what we in the credit union industry have seen time and time again, that members are significantly more loyal to their credit unions than bank customers are to their banks--and that translates to considerable, tangible business benefits," said Michelle Bloedorn, CEO of Member Loyalty Group, a credit union service organization based in Chicago. However, while this is good news for credit unions, "You can't assume just because you're a credit union, that you are also a loyalty leader," she cautioned. Individual credit union scores can vary widely. "In our benchmark study, we saw individual credit union Net Promoter scores range from as low as 19% to as high as 75%," she said. In 2010, "Consumer Loyalty in Retail Banking," a study conducted by Bain & Co., found that customers who are promoters stay longer with their banks, buy more products, refer more new customers and cost less to serve. Loyalty leaders enjoy a growth rate that is 10% greater and a cost of funds that is 80 basis points lower than banks that are considered price leaders, the study found.

CU staffer to co-host weekly finance TV show

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PORTLAND, Maine (8/8/11)--Dan Daggett, president of Consolidated Solutions, a subsidiary of Down East CU in Baileyville, Maine, will co-host a weekly finance TV talk show in the state. Recently, Daggett joined forces with Maine VideoOn Demand, an independent video production company based in central Maine, to co-host a new weekly show with Kim Lindlof of the Mid-Maine Chamber of Commerce. The show is called “Inside Maine Finance” (Weekly Update Aug. 5). The show focuses on topics related to finances, including credit unions and other financial institutions. The first program featured Bruce Poliquin, Maine state treasurer. The show airs on Time Warner Cable Channel 9 and online at www.insidemainefinance.tv.

CUNA Mutual New rules mean new risks for directors

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LAS VEGAS (8/8/11)--The increased personal risk exposure created by new fiduciary and financial literacy rules for directors of federally chartered credit unions also provides an opportunity to establish new practices to protect credit unions and their board members a CUNA Mutual Group product executive told a breakout session audience Thursday at the 34th Annual National Directors’ Convention. John Wallace, vice president of commercial products, described four keys to protecting directors’ personal assets, starting with a solid understanding of their fiduciary duties. The National Credit Union Administration (NCUA) in December finalized sections from its rules and regulations concerning federal credit union directors’ fiduciary duties and indemnification. “Federal credit union directors must carry out their duties in good faith and within six months of their election or appointment, they must also gain an understanding of ‘basic finance and accounting practices,’” Wallace said. NCUA also passed a rule on indemnification that strips federal credit unions of the ability to indemnify officials or employees for liability associated with misconduct that’s “grossly negligent, reckless, or willful” as deemed by a court in connection with a decision that affects the “fundamental rights” of credit unions’ members. This applies to decisions affecting members’ rights, such as with conversions and changing share insurance. In addition, NCUA “Rule 750” limits indemnification payments by credit unions. Recent actions by the Federal Deposit Insurance Corp. (FDIC) provide some context and might be a potential precursor for what credit union directors could face. As of July 6, FDIC authorized action against 248 individuals in connection with 28 failed institutions, seeking $6.8 billion. A second way directors can protect themselves is by establishing and/or broadening their corporate governance process, which Wallace defined as “a set of processes, customs, rules, policies, and laws that guide how an organization, like a credit union, is directed and controlled for the benefit of its stakeholders.” Examples include establishing a lead director on governance, a whistle-blower policy or a risk oversight policy. He also urged directors to consider their indemnification options to ensure alignment with the board's philosophy on risk. Indemnification is where the credit union agrees to reimburse an officer or director for expenses related to claims brought against them in their capacity as officers and directors. “Consult a qualified attorney to help you construct your indemnification agreements,” Wallace said. “This is particularly important given the newly adopted rule that limits indemnification.” Wallace recommended credit unions have directors’ and officers’ (D&O) liability insurance coverage to cover losses related to claims against the Wrongful Management Liability Act. Boards of directors should play an active role in establishing the type and coverage limits for D&O insurance, he added. Wallace also offered several other recommendations to help directors protect their personal assets and their credit unions:
* Conduct conflict of interest disclosures at least once a year; * Determine what risks the credit unions faces and ask for information to monitor that risk; * Think of opportunities to improve.
The 34th Annual National Directors’ Conference ended Friday.

80 Ohio CUs connect on Facebook

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COLUMBUS, Ohio (8/8/11)--Roughly 80 Ohio credit union have a presence on Facebook, according to the Ohio Credit Union League (eLumination July 27). Bryce Roth, marketing coordinator, at Vacationland FCU, Sandusky, said Facebook and other forms of social media offer two-way communication--where traditional forms of “broadcast” marketing and advertising allowed for only one-way messaging. “If you’re not in those places where you can connect with members, you really stand to lose in today’s environment, but if you’re there and you execute correctly you really stand to gain,” Roth told News Now. Vacationland FCU keeps its page lively with simple messages that any Facebook friend would ask--such as, “What’s for lunch?” or “What’s up this weekend?”--mixed with relevant financial and marketing information. “When members feel more connected to the credit union, then they feel more invested in it,” Roth said. “We strive to create an atmosphere that this is their page.” Social media also provides a great tool for organizing people, said Roth. Vacationland FCU uses Facebook as an extension of its Change Agent Squad community, a group of local high school and college students interested in giving back to their community. The credit union posts videos of the squad’s projects, alerts of upcoming meetings and ideas for expanding the program. Ohio University CU, Athens, posts first-person messages from its mascot, Cool Cat, as he makes his rounds throughout the summer. Posts include photos of Cool Cat exploring local attractions--which happen to be existing and potential select employee groups--and entertainment. Cool Cat is part of the credit union’s youth marketing campaign, which has tailored products and services for children of all age groups and financial education. Dover-Phila FCU, Dover, keeps its Facebook page lively with ticket giveaways, event updates, links to financial articles and photos of raffle winners. As a conversation starter, the credit union recently asked its Facebook fans if they opted for a “stay-cation” rather than a traditional vacation this summer. Midwest Community FCU, Defiance, shares ideas for managing personal finances through its social media presence. The messages support the credit union’s mission of improving the financial lives of its members and contribute to the organization’s image as a trusted resource. Among the topics Midwest FCU recently shared with its members on Facebook were “Six Ways to Save on Back-to-School Basics,” “Eight New Annoying Things Consumers Need to be Aware Of” and “How to Complain About Your Credit Card.” All four credit unions hold frequent contests to gain more followers. Contest prizes range from low-dollar gift cards to hot items such as iPads.

BECU introduces 12-year no-fee mortgage

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TUKWILA, Wash. (8/8/11)--BECU, with $9.1 billion in assets, Tukwila, Wash., has introduced a new 12-year, no-fee mortgage. The 12-year mortgage offers an interest rate comparable with a 10-year fixed-rate mortgage without closing costs or fees. “BECU’s vision is that qualified homeowners should be able to access these historically low mortgage rates,” said Bob Stroup, BECU vice president of member strategies. “The 12-year no-fee mortgage was designed for consumers with a low balance on their current mortgage who desire to have the financial freedom of owning their home in 12 years or less but have been reluctant to refinance to a lower rate because of closing costs and fees.” Features of the 12-year mortgage include:
* Used to refinance of a primary residence; * Has minimum loan amount of $35,000, with a maximum loan amount of $200,000; * Has maximum loan to value of 80%, including cash-out; * Involves no prepayment penalties; * Makes borrower is responsible for paying all fees and charges imposed by an existing lender; and * Makes borrower is responsible for payment of interim interest, property taxes and insurance premiums (if due).

North Carolina league dedicates new headquarters

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RALEIGH, N.C. (8/8/11)--About 150 credit union representatives
Click to view larger image At the ribbon cutting dedication Wednesday of the new North Carolina Credit Union League headquarters in downtown Raleigh, N.C., are from left: Credit Union National Association President/CEO Bill Cheney; league President/CEO John Radebaugh; league chairman Maurice Smith and the league board. (Photo provided by the North Carolina Credit Union League)
across North Carolina traveled to Raleigh, N.C., Wednesday to help the North Carolina Credit Union League dedicate its new headquarters location. Credit Union National Association (CUNA) President/CEO Bill Cheney made remarks at the event, which included an afternoon open house. NCCUL President/CEO John Radebaugh addressed the purpose of the move to the state's capital city from Greensboro, N.C., "Credit unions have told us for many years that advocacy is one of the most valuable things the league brings to the table. Relocating to Raleigh raises the visibility of the North Carolina credit union movement with policy makers," he said (Weekly Update Aug. 5). Cheney updated the group on the major legislative issues credit unions recently have faced or will face in the next several months. He thanked credit unions for their efforts on the debit interchange fees issue despite the fact a Senate amendment to delay the implementation of the Federal Reserve's final rules was unable to pass. "I won't sugarcoat it," Cheney said. "I wish the amendment [to delay the rule until further study of its impact could be made] would have passed." Credit unions still had a very positive impact on the process, he was quick to add, and the Fed's final rule was better than initially proposed. "I really wonder if the Fed's final rules would have been that much better even if the amendment would have passed," he said. Cheney's remarks also addressed efforts to push Congress to lift credit unions' member business lending cap to 27.5% of assets from 12.25%, supplemental capital for credit unions and other key issues. He also took questions from the gathering of credit union leaders. The league's directors joined Cheney and Radebaugh for a ribbon-cutting ceremony, and visitors toured the new league's new home the remainder of the afternoon. The new headquarters is located in Quorum Center, just three blocks from the office buildings of the North Carolina General Assembly. "This move centers our people with our purpose," Radebaugh said, "and will help credit unions be more effective in their grassroots efforts."

Ebron elected to North Carolina league board

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RALEIGH, N.C. (8/8/11)--Credit unions in the Northwest Chapter of the North Carolina Credit Union League (NCCUL) met in a special chapter session Tuesday and elected Tony Ebron as their representative on the league's board of directors. Ebron is president/CEO of Winston-Salem (N.C.) City Employees FCU. He won the director position previously held by John McGrail, who left the board in June after being named president/CEO of the Carolinas Credit Union Foundation (Weekly Update Aug. 4). Ebron hit the ground running as the chapter's new representative as he traveled Thursday to Raleigh for the NCCUL board's quarterly meeting, said the league. Also, the Piedmont Chapter is also in the process of choosing a new director to replace Bill Flowers, who retired. The chapter will meet Aug. 18 to select a new board representative, the league said.

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.

CU 24 board re-elected

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TALLAHASSEE, Fla. (8/4/11)--Credit Union 24 announced Wednesday that its board of directors has unanimously re-elected Mansel Guerry, president/CEO of Brighton FCU, Ridgeland, Miss., to an unprecedented fourth consecutive term as chairman of the board. The board also re-elected Bradley Blake, president/CEO, Florida State University CU, Tallahassee, Fla. as vice chairman, and Becky Hulett, chief financial officer, 121 Financial CU, Jacksonville, Fla., as secretary/treasurer. “Mansel’s leadership during the past three years as chairman has guided our credit union-owned network to continued growth and success despite a difficult economic climate, and challenges with industry regulations and market fluctuations,” said Jim Park, president/CEO of Credit Union 24. During Guerry’s tenure as chairman, Credit Union 24 has grown to become the nation’s largest credit union-owned point-of-sale (POS) network, with the nation’s largest surcharge-free ATM access available to financial institutions, and has developed electronic- funds-transfer products and services to help credit unions navigate the many challenges they’ve faced in recent years, said the company. Most recently, Credit Union 24 developed Debit Edge, a new point-of-sale (POS) program--offered in addition to its traditional credit union-owned POS program--to help credit unions protect their interchange income while facing the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Also under Guerry’s leadership as chairman, Credit Union 24 engaged FIS for delivery of switch services, which is expected to deliver even greater value and flexibility to its participating credit unions. Other board members include:
* Alvin Cowans, president/CEO of McCoy FCU, Orlando; * Adrian “Casey” Duplantier Jr., president/CEO of 1st Advantage FCU, Yorktown, Va.; * David Mooney, president/CEO of Alliant CU, Chicago; * Joan Nolan, vice president of operations support, IBM Southeast Employees FCU, Boca Raton, Fla.; * David Southall, president/CEO of Innovations FCU, Panama City Beach, Fla.; and * Dan Wollin, president/CEO of PCM Employees CU, Green Bay, Wis.

UVA Community CU receives regional SBA award

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CHARLOTTESVILLE, Va. (8/4/11)--UVA Community CU, Charlottesville, Va., was recognized for the second year in a row by the U.S. Small Business Administration (SBA), which named it the Top Credit Union in the Richmond District for fiscal year 2010.
Click to view larger image For the second consecutive year, the U.S. Small Business Administration (SBA) recognized UVA Community CU as the Top Credit Union in the Richmond, Va., District. From left, Donald “Scott” Dailey, SBA assistant district director of lender relations; Ronald E. Bew, SBA district director, Richmond office; Michael D. Lyster, UVA Community CU vice president of business lending; Susan Walthall, SBA office of community relations; and Antwuan Griffin, SBA senior advisor, office of field operations. (Photo provided by UVA Community CU)
The award is given to the credit union with the highest loan volume by dollar amount. The Richmond district includes all of Virginia except for the Washington, D.C., metropolitan area. SBA guaranteed loans are an integral part of the credit union’s portfolio of business loans and services. At year-end, the credit union had more $20 million in business loans outstanding and an increase of 69% in business member-owners. “By incorporating SBA loan programs with our portfolio of conventional loans, we gain the flexibility to meet the needs of our business community while maintaining the credit union’s loan quality standards,” said UVA Community CU President/CEO Alison DeTuncq. “We’ve found that business owners like this approach and appreciate the range of services we offer.” The Credit Union National Association (CUNA) and credit unions are pressing Congress to increase credit unions’ 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 into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

CUNA Lending Council celebrates 1000 members

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MADISON, Wis. (8/4/11)--The CUNA Lending Council has reached the milestone of 1,000 members, a result of several years of growth and members’ growing commitment to collectively refining the best practices of the credit union industry. The council is one of three CUNA Councils with membership in excess of 1,000. “Reaching this milestone is significant,” said Aaron Bresko, Lending Council executive committee chair and vice president of lending at BECU in Tukwila, Wash. “The councils provide credit union lenders with a unique and active community where they can reach out to one another, grow professionally, and obtain education and resources that are specific to their lending responsibilities at the credit union. Credit union lenders recognize how unique the Lending Council is in our industry.” Gayle Rust Gustafson, Lending Council membership committee chair and senior vice president-financial services at Rivermark Community CU, Beaverton, Ore., added, “What’s really significant about the 1,000 member milestone is that we’re helping more and more credit union lenders handle immediate issues, plan for future successes, and build more competitive lending programs.” The news follows CUNA Councils' announcement of surpassing 5,000 members across all six councils. As part of the collective 5,000-member celebration, credit union executives can join any of the six councils at a special rate through Aug. 31. Current members can help councils celebrate by submitting their story about what membership means to them. Anyone joining or submitting a story is entered in a drawing to win: a grand prize of a $5,000 Credit Union National Association education/training scholarship, a complementary registration to a council conference, a 2012 council membership, an Apple iPad, or a $100 Visa gift card. “The drawings are a fun way to celebrate the ongoing success of the councils,” said Gustafson. “The council leadership remains committed to making the benefits of membership relevant, timely and affordable.”

Hawaii First CU teams with state on economic empowerment

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KAMUELA, Hawaii (8/3/11)--Hawaii First FCU has partnered with the Office for Hawaiian Affairs (OHA) to help local residents become financially independent. With the support of OHA, Hawaii First FCU has developed the Native Hawaiian Prosperity Program, which will be available to Hawaii County residents seeking tools to overcome poverty and obtain self-sustainability. The program includes the expansion of the Hawaii First Community Resource Center to Hilo; free financial counseling; financial education outreach to schools; and resource assistance focused on economic empowerment. Among the tools provided through the program is Hawaii First FCU’s Individual Development Accounts (IDA). IDAs are matched savings accounts where participants set a goal, save money for that goal, then work toward that goal by achieving regular deposits, financial education, financial counseling and small-business development. After participants attain the requirements, their savings are matched $4 for every $1 saved, giving members credit toward necessary purchases required for the goal. The funds go directly from Hawaii First FCU toward their asset purchases. “We work on the front lines with our community members and see what works and what doesn’t from day to day,” said Laura Aguirre, Hawaii First FCU president/CEO. “The impact these vital resources are making on our island is what keeps us striving to make these programs possible.” The Hawaii First Community Resource Center is a community outreach program of the credit union. It provides services to residents of the Big Island.

CU Solutions Group renews 700k pledge to BizKid

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MADISON, Wis. (8/4/11)--CU Solutions Group (CUSG), through its Invest in America (IIA) program, has pledged $700,000 for the second year in a row toward the national underwriting of Biz Kid$. Biz Kid$ is the Emmy Award-winning and credit union-funded public television series that teaches kids about money management and entrepreneurship. CUSG’s pledge, combined with its $700,000 contribution in 2010, makes it one of the largest independent sponsors of Biz Kid$, alongside the National Credit Union Foundation (NCUF). “CUSG’s contribution to financial literacy is tremendous,” said Gary Oakland, president/CEO of BECU in Tukwila, Wash., and chair of NCUF. “CUSG’s financial commitment in tandem with support from credit unions and leagues ensures the Biz Kid$ program and curriculum will reach more youth than ever before.” NCUF recently took ownership of fundraising, outreach and administrative responsibilities of Biz Kid$ from the Washington Credit Union Foundation to ensure the program gains the maximum support from the credit union system. CUSG’s $700,000 pledge is leading the way to achieve full funding for the fifth season, which also will put Biz Kid$ into syndication. “To continue to thrive as a system program well into the future, Biz Kid$ warrants the collaborative financial support of the credit union community,” said CU Solutions Group CEO Dave Adams. “It is our hope, that all IIA participants will participate in helping fund this critical financial literacy project by opting to allocate 10% of their year-end IIA marketing reimbursement to Biz Kid$,” said Bucky Sebastian, NCUF executive director. Last year, many credit unions and leagues did just that, as 90 credit unions and 20 leagues donated a portion of their year-end rebate which helped raise an additional $300,000 for Biz Kid$. “Our hope is that we will increase that number to 100% participation, allowing the contribution from the participants to soar to $1.2 million,” Sebastian said.

July consumer bankruptcy filings down 18

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ALEXANDRIA, Va. (8/4/11)--U.S. consumer bankruptcies in July decreased 18% nationwide from July 2010, according to the American Bankruptcy Institute (ABI), which relied on data from the National Bankruptcy Research Center (NBKRC). The data indicated that the overall consumer filing total for July reached 113,470--down from the 137,698 consumer filings recorded in July 2010. It was the seventh consecutive month for which there were fewer bankruptcies in 2011 than during the previous year. “The continued decline in consumer bankruptcies in tandem with a sluggish economy is a reflection of the deleveraging of household debts and tightening of consumer credit over the past year,” said ABI Executive Director Samuel J. Gerdano. “Should these trends persist, we expect to see fewer consumer bankruptcies in 2011 than were filed in 2010.” The July 2011 filings also represented a 5% decrease from the June 2011 consumer bankruptcy total of 119,768 filings. The percentage of chapter 13 filings for July was 29%, a 1% increase from June. ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. NBKRC is an online research center that offers subscribers access to up-to-date research and statistics on bankruptcy filings. The database contains complete information dating back to 1995.

CU System briefs (08/03/2011)

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* HOUSTON (8/4/11)--Patricia Longoria Garcia, executive vice president of People’s Trust FCU, Houston, and CEO of Signal Hill Investment Services, died at her home July 29, after a battle with cancer, said the Texas Credit Union League (Lone Star Leaguer Aug. 2). Garcia entered financial services in 1994 as a financial adviser with Lincoln Financial Advisors. From 1994 to 1998, she worked with the top three advisers in the Houston area to develop more than 1,500 clients with more than $75 million dollars in assets. In 1998, she began to work with Shell Employees FCU as a third-party adviser to members. From 1998 to 2001, she built a business with more than 200 credit union members and more than $40 million dollars in assets. Garcia worked with the leadership of the credit union to bring the investment business into the credit union, which resulted in the formation of Signal Hill … * HARRISBURG, Pa. (8/4/11)--Service 1st FCU, Danville, Pa., hosted a meet and greet with Northumberland County State Representatives Kurt Masser (R) and Lynda Schlegel Culver (R), said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Aug. 2). Both Masser and Schlegel serve on the State House Commerce Committee. Among those attending were Harold Hurst, Service 1st director and district director for Masser, and Christina Mihalik, PCUA vice president of governmental affairs. PCUA board member and Service 1st FCU President/CEO Bill Lavage and Service 1st FCU chairman Kathy Linn opened the meeting with an introduction to credit unions. Among the topics discussed during the meeting were small business lending, regulatory burdens and job creation … * LITTLE ROCK, Ark. (8/4/11)--Joyce Judy, the former president of Arkansas Employees FCU, Little Rock, Ark., admitted Tuesday to persuading a member to place $500,000 in a bogus investment, then losing the money when it was wired out of the country by her business partner (Associated Press Aug. 2). Judy pleaded guilty to one count of bank fraud. She could face a maximum of 30 years in prison. Judy persuaded the member to invest $500,000 in what she said was a certificate of deposit, according to the U.S. attorney. Judy then added $500,000 of her own money and used it for a $1 million investment. As part of her plea deal, Judy will reimburse the credit union for its $500,000 loss …

Survey Parents not saving for college education

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WINSTON-SALEM, N.C. (8/4/11)--A recent nationwide survey indicates that 58% of parents don’t have a college education fund established for their children. The study was conducted by SimpliFi, a free online financial planning and advice service. “The average cost of college has skyrocketed in the past 30 years, so building up enough savings to pay for it has become more difficult,” said Bryan Link, SimpliFi CEO and co-founder. “To ease the stress and financial burden, it’s crucial that parents start saving for college very early--even while their kids are still in diapers," said Link. "Less than 5% of Americans have a financial plan, but those with a plan are almost three times as likely to hit their goals. If parents start saving while their children are young they won’t have to take out loans, or leave their children financially responsible to pay for school,” he said. Other key results from the SimpliFi Back-to-School survey include:
* 75% of parents who are saving for college feel they have a say in where their child goes to school; * 62% expect their children to share the responsibility of paying for their education; * 60% of parents say that they plan on paying for college in cash, while 13% are willing to take out loans, and only 10% are going to use financial aid; * 8% are planning to pay for college through scholarships--either academic or athletic; and * 22% are willing to pay for as many years of college as it takes for their child(ren) to graduate.
Credit unions have several programs available to help students and their families with financing the costs of college and to provide a way to attract younger members.

Counterfeit checks bear CUs name

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WASHINGTON (8/3/11)--An Oregon credit union is one of four financial institutions reporting that counterfeit checks are circulating with their names this week. OnPoint Community CU, a $2.8 billion asset credit union headquartered in Portland, Ore., has reported to the Federal Deposit Insurance Corp. (FDIC) that counterfeit cashier's checks are displaying a routing number, 323075880, that is assigned to the credit union, said FDIC in a special alert. The items are similar to authentic cashier's checks but have a dark green top border and a teal waterfall design background. Authentic cashier's checks have a dark green border and a light green background. Checks when copied have a "VOID" background. Also experiencing counterfeit checks with their names on them were PBI Bank, Louisville, Ky.; Heritage Bank of Nevada, Reno, Nev.; and St. Johns Bank and Trust Co., St. Louis, Mo.

Georgia CU survey Members living on less

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DULUTH, Ga. (8/3/11)--More than 58% of Georgians are living paycheck to paycheck, and more than 90% say they are reducing their spending, according to a survey conducted by the Georgia Credit Union Affiliates (GCUA). With every penny needed to make ends meet, more people are making an effort to live frugally, reported GCUA's Mid-Year 2011 Saving and Purchasing Survey. The survey was featured in GCUA's monthly news tips and topics column, Consider This…, for August. More than a third of those surveyed are eliminating vacations, the survey found. "Because frugal living has become a widespread necessity, many Americans are searching for ways to live simply and cut expenses without sacrificing quality of life," said GCUA. "For example, more than 63% of those who responded to the GCUA survey say they have started using coupons." Suwanee resident Mark Myers indicated how he saved by comparison shopping. "We saved $500 a year just by switching insurance companies, and we received more coverage," he told GCUA. "We were also able to save by switching satellite providers. These were changes that didn't have any effect on our quality of life. I can't believe how much we were paying before." Cheryl Spires, CEO of Combined Employees CU, a $9 million asset credit union in Warner Robins, said many of her members are making an effort to live prudently. "Specialty savings like Christmas Club accounts have increased, and loan requests have decreased in both number and amount," she told GCUA. Frugal living doesn't have to mean doing without, she said. "Opportunities are everywhere." Her No. 1 rule for frugal living: skip the impulse purchases. Spires advised consumers to compare fees at financial institutions to find the best value. "The real expense comes from not actively managing accounts," she said. "Avoid out-of-network ATM fees by withdrawing cash only at surcharge-free ATMs or during purchases at many stores. If your account has minimums and maximums to avoid fees for different types of usage, such as debit card transactions or withdrawals per period, abide by them." The league's column also has links to various articles related to saving money. Use the link.

Wis. league Economy would gain speed with MBL cap lift

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PEWAUKEE, Wis. (8/3/11)--If Congress were to raise credit unions’ member business lending (MBL) cap, that would hasten the U.S economic recovery, the Wisconsin Credit Union League told Corporate Report Wisconsin magazine (August). Economic recovery--at least in business lending--could gain some speed if credit unions were allowed a larger share of the business loan market, Tom Liebe, league vice president of government affairs, told the publication. “The real losers today are Main Street businesses, not because credit unions can’t make the loans, but because Congress established that cap in 1990,” Liebe told the magazine. “Credit unions have money to lend, and our commercial lending has increased each of the last three years. But Wisconsin credit unions are turning small businesses away when they’d otherwise make the loan because of that arbitrary cap.” To read the article, use the link. The Credit Union National Association (CUNA) and credit unions are pressing Congress to increase credit unions’ 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 into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

IUSA TODAYI CUs help students find free checking

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MADISON, Wis. (8/3/11)--Credit unions are a good place for cash-strapped college students to find free checking, according to a Tuesday USA TODAY article. “Most big colleges and universities, along with many smaller ones, have their own credit unions,” wrote Sandra Block, USA TODAY personal finance reporter, in an article about free checking for students. “Most offer free checking with low minimum-balance requirements.” College students can withdraw their cash from more than 28,000 ATMs, including 5,500 ATMs at 7-Eleven convenience stores, if their credit union belongs to the CO-OP Network, the article said. “If you can find a 7-Eleven, you find a free credit union ATM,” Gary Perez, CEO of USC CU in Los Angeles, told the newspaper. The Credit Union National Association put Block in touch with Perez for the article. To read the article, use the link.

Younger set receives extra attention from Maine CUs

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PORTLAND, Maine (8/3/11)--Maine credit unions used some creative ideas to connect with students during the past year, said the Maine Credit Union League.
Maine credit unions have made special efforts to reach the youth market. Students prepare to do some research as part of Winslow-based Taconnet FCU’s Trek for Success.
Proving it pays to use a credit union, Brewer (Maine) FCU awarded $300 to the winners of its student videographer contest. Pictured are, second from left, Dave DeFroscia, Brewer FCU vice president, and, second from right, Rick Kaul, Brewer FCU president/CEO, and with the winners and their teacher.
Gene Ardito (back row center), president/CEO of cPort CU, Portland, joins elementary school students who received College Aspirations scholarships from the credit union. (Photos provided by the Maine Credit Union League)
Maine credit unions have made special efforts to reach the youth market. Students prepare to do some research as part of Winslow-based Taconnet FCU’s Trek for Success. Taconnet FCU in Winslow held its second annual Trek to Success, in which students compete in mental and physical challenges (News & Views August). A panel of judges selected 16 participants who applied for the competition by writing essays. The trek took place on three consecutive weekends, with four finalists competing for $9,000 in scholarships. “The goal is to encourage students about the importance of education, and to reward those efforts,” Karen Denis, Taconnet president/CEO, told the Maine league. “The credit union has really created positive goodwill with participants and with the community. It’s been all that we had hoped for and much more.” Brewer (Maine) FCU partnered with a media class at Brewer High School to hold a student videographer contest. Each participating team created a video commercial about the credit union. The credit union awarded $600 in cash prizes, with the winning team collecting $300. “It was interesting to see what students felt was important to highlight about the credit union,” Rick Kaul, Brewer FCU president/CEO, told the Maine league. “It gave us better insight into that demographic.” Gene Ardito (back row center), president/CEO of cPort CU, Portland, joins elementary school students who received College Aspirations scholarships from the credit union. (Photos provided by the Maine Credit Union League) For the fourth consecutive year, cPort CU, Portland, sponsored the College Aspirations program for elementary school students. More than 500 students from two elementary schools in Portland and four in Augusta wrote about their future plans, and identified a college or colleges they may attend. The top essays were selected, and $100 scholarships were awarded during special ceremonies at each school. Fifty scholarships were awarded this past school year. The program has created “a unique opportunity for the credit union to make a difference and to connect with students at a young age,” said cPort CU President/CEO Gene Ardito.

Slow consumer spending brings lower CU loan growth

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MADISON, Wis. (8/3/11)--Consumers continue to show a great reluctance to spend, and that is showing up in the lack of loan growth at credit unions, according to a Credit Union National Association (CUNA) economist’s analysis of June’s monthly estimates of credit unions.
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“This is consistent with the Commerce Department’s announcement yesterday that consumer spending fell in June,” Bill Hampel, CUNA chief economist, told News Now Tuesday. “The 0.4% decline in loans outstanding through June is almost as weak as last year’s 1.1% fall. The only good thing about this is that members’ balance sheets are improving as they pay down their debt, but they are unlikely to be willing to substantially increase borrowing for some time.” Credit union loans outstanding increased 0.3% during June, compared with a 0.4% rise in May, according to CUNA’s monthly estimate of credit unions. Home equity loans led loan growth with a 3.2% increase, followed by fixed-rate mortgages (3.1%) and used-auto loans (0.9%). Unsecured personal loans climbed 0.7% and credit card loans rose 0.6%, while new-auto loans and adjustable-rate mortgages declined 0.3% and 3.4%, respectively. Credit union loans totaled $578 billion, compared with $581 billion in June 2010, said the monthly estimates.
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Credit union savings balances increased 0.1% in June compared to a 0.7% decrease during May. Regular shares led savings growth, rising 1.2%, followed by individual retirement accounts (0.6%) and money market accounts (0.3%). One-year certificates and share drafts fell 0.6% and 2.1%, respectively. Credit union savings in June totaled $830.6 billion--or $35.6 billion more than the $795 billion in June 2010. “Savings growth is also quite weak, rising only 3.3% in the year to June, about the same as last year’s growth,” Hampel said. “Members are reluctant to commit funds to accounts paying current very low market rates.” Regarding asset quality, credit unions’ 60-plus-day delinquency rate remained at roughly 1.6%. “Despite the very weak loan growth, the delinquency rate continued to edge down during June, falling to 1.57% from 1.6% in May,” Hampel said. “The delinquency rate has been steadily but slowly declining from its peak of 1.85% in January of last year.” The loan-to-savings ratio increased slightly to 70%. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--increased slightly to 19%. The movement’s overall capital-to-asset ratio remained at 10%. The total dollar amount of capital is $97 billion. “Our monthly sample does not collect net income information; however, the growth of net worth at sample credit unions suggests a return on assets of about 90 basis points in the first half of the year” Hampel said. “That is welcome news following the very low credit union earnings of the past few years.”

iOrlando Sentineli reports CUs pursuit of auto loans

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ORLANDO, Fla. (8/3/11)--Financing for vehicle loans is rebounding, and credit unions are among the financial institutions seeking loans, according to a July 31 Orlando Sentinel article. Credit unions are becoming more aggressive in pursuing loans outside of their existing memberships, according to the article. Several credit unions have reached out and asked to be considered as a finance source, said Chad Rogers, general manager of Classic Mazda and Holler Hyundai in Orlando. The article also says “credit unions should not be overlooked” and cites a Datatrac survey from March that said the average interest rate on a 60-month new car loan from U.S. credit unions was 4.12% compared to 5.46% from banks. Overall, loan approval rates have increased since the height of financial crisis. In June, the approval rate for new auto loans was 74.7%, up from 46.3% in December 2008. To read the article, use the link.

Top 10 iNews Nowi stories for July (08/02/2011)

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MADISON, Wis. (8/3/11)--Three articles on interchange were among the top 10 News Now stories in July. Here is a list of the top 10 most-visited stories for the month. 10. CUNA releases interchange rule analysis WASHINGTON (7/5/11)--The Credit Union National Association has released a final rule analysis of the Federal Reserve's final debit interchange fee and routing regulations. 9. Prepay plan deadline ‘hard and fast,’ reminds Matz in webinar ALEXANDRIA, Va. (7/12/11)--National Credit Union Association (NCUA) Chairman Debbie Matz and some of her senior staff fielded questions from credit unions regarding the agency's plan to allow credit unions to prepay some of their Temporary Corporate Credit Union Stabilization Fund (TCCUSF) assessments in a webinar Monday. 8. CUNA: Proposal could shut down internt'l fund transfers WASHINGTON (7/26/11)--Many credit unions could cease offering international electronic fund transfer services to their members if a rule intended to protect consumers who use "remittance" services is put into effect without significant revisions, according to the Credit Union National Association (CUNA). 7. White paper: CUs must replace aging memberships EMERYVILLE, Calif. (7/21/11)--A nationwide survey of credit union members indicates that credit unions must replace their aging members and increase loyalty among younger members. 6. NCUA considering TDR proposal ALEXANDRIA, Va. (7/18/11)--National Credit Union Administration (NCUA) Board Member Gigi Hyland has hinted that the agency could soon release an Interpretive Ruling and Policy Statement (IRPS) addressing Troubled Debt Restructurings (TDR). 5. Fed, FTC finalize credit disclosure changes WASHINGTON (7/7/11)--The Federal Reserve and the Federal Trade Commission have issued a final version of rules that require creditors to add new details to the risk-based pricing (RBP) notices that are distributed to their members. 4. CUs, banks will cease Savings Bond sales Dec. 31 WASHINGTON (7/14/11)--After 75 years of regular sales, savings bonds will no longer be sold at credit unions and other financial institutions as of Jan. 1, 2012, the U.S. Treasury has reported. 3. Five more CU mergers in the works MADISON, Wis. (7/8/11)--Consolidation in the credit union industry continues nationwide, including a merger between two of the largest credit union trust companies. 2. Visa CEO notes interchange rule's impact on CUs NEW YORK (7/8/11)--As it made its first filing with the Securities and Exchange Commission (SEC) since the Federal Reserve's final ruling on restricting debit card interchange fees, Visa Inc. said in a conference call Wednesday that it expects credit unions and small banks and other programs to see "unintended consequences" from the rule. 1. Fed issues interchange 'exempt/not exempt' lists WASHINGTON (7/13/11)--In its first step to facilitate a two-tiered debit card interchange fee structure since adoption of its final rule, the Federal Reserve Tuesday issued two lists--one with the names of each institution considered to be covered by the new cap on debit interchange fees and another with the names of those that are exempt.

CU System briefs (08/02/2011)

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* BELLEVUE, Neb. (8/3/11)--Nebraska's largest credit union, SAC FCU, has been granted approval from the National Credit Union Administration to expand its market area to eight counties from four, doubling its service area. The expansion will continue to strengthen the Bellevue, Neb.-based , more than $500 million in assets credit union in the Metro area. The expansion includes Washington and Saunders Counties in Nebraska, and Mills and Harrison Counties in Iowa--areas that have an estimated 71,000 residents. It will serve people living, worshipping, working (or regularly conducting business in) or attending school in the area. Its existing service area had included Douglas, Sarpy and Cass Counties in Nebraska and Pottawattamie County in Iowa. The credit union is celebrating its 65th anniversary as a credit union … * ONTARIO, Calif. (8/3/11)--CUDL, which administers the nation's largest auto lending network for credit unions, announced the grand
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prize winner in its SMART Giveaway Contest for credit union members. Eric Franklin, a member of Oklahoma Employees CU, Lexington, Okla., won the sweepstakes grand prize, with CUDL paying off the balance of his credit union auto loan. The year-long contest gave credit union members the opportunity to win 12 monthly prizes, consisting of $500 American Express gift cards, and a chance at the sweepstakes grand prize. Members were entered into the contest by requesting an online auto quote from a CUDL dealer through the CUDL AutoSMART vehicle research and shopping website or by applying for an instant pre-approved auto loan through their credit union's SMART Approval program. From left are Ryan Kilman, indirect lending director at Oklahoma Employees CU; Josh Amaton, regional credit union manager for CUDL; Franklin: and Linda Csaba, loan officer at the credit union. (Photo provided by CUDL) … * RIEGELWOOD, N.C. (8/3/11)--Riegelwood (N.C.) FCU and Cell Phones for Soldiers have teamed up to collect unused cell phones for troops in the Cell Phones for Soldiers campaign. The $96 million asset credit union plans to work with local businesses to serve as collection points. Cell Phones for Soldiers hopes to collect more than 50,000 cell phones this year to help connect troops with their families. RFCU's Elaine Williams noted "the need for support keeps growing as more soldiers are sent to the Middle East or are asked to serve extended tours of duty." The donated phones are sent to ReCellular, which pays Cell Phones for Soldiers for each phone--enough to provide an hour of talk time for soldiers abroad. Half the phones are reconditioned and sold to wholesale companies in 40 countries. Phones and components that cannot be refurbished are dismantled and the materials recycled … * RANCHO CUCAMONGA, Calif. (8/3/11)--The California and Nevada Credit Union Leagues have promoted Director of Grassroots Advocacy
Jeremy Empol as their new director of federal government affairs and hired David Creager to replace Empol in the grassroots position, the leagues said. Empol, who joined the leagues in 2007, assumed his new role on June 2. He will focus on connecting California and Nevada credit unions to their congressional delegation members. Before joining the leagues, Creager managed political campaigns for Meridian Pacific Inc., a Sacramento-based political consulting firm. He will be responsible for the leagues' Web-based advocacy network, Connect for the Cause, and will spearhead new advocacy initiatives such as the 1-2 Punch Campaign, which educates and encourages credit union employees about political giving and participation in legislative action. Both Empol and Creager will be based out of the league's Sacramento offices …

CU System briefs (08/01/2011)

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* NEW ORLEANS (8/2/11)--A New Orleans man, Gerard A. Jackson Jr., 44, was sentenced Thursday in a U.S. District Court to 22 years in prison for his role in two armed robberies in New Orleans. The first occurred at ASI FCU on June 11, 2009, and the second was on July 1, 2009, at Capital One Bank. Jackson also was sentenced for conspiracy to possess with the intent to distribute cocaine; for attempting to conceal information from a law enforcement officer by having his girlfriend report her car, used as a getaway vehicle, as stolen; and attempting to coerce others to provide a false alibi. Judge Carl J. Barbier also imposed eight years of supervised release after the prison term, said the Federal Bureau of Investigation (US Fed News July 28) … * EAST HARTFORD, Conn. (8/2/11)--A Connecticut man has been charged with first-degree robbery and third-degree larceny after his arrest Saturday in connection with a robbery of the American Eagle FCU, East Hartford, Conn., on Thursday morning. Nigel Cobb, 32, allegedly passed a note demanding cash to a teller and left with an undisclosed amount. It was not clear whether the robber had a weapon (HartfordCourant July 30) … * ATLANTA (8/2/11)--The fourth defendant in an armed bank robbery of the Statesboro, Ga., branch of Hinesville, Ga.-based GeoVista FCU, was sentenced to nine and a half years in prison for her role as getaway driver and organizer of the Sept. 7, 2010 robbery. Tymesha Hamilton, 24, helped then-GeoVista employee Nicholas O'Brian Roberts plan the robbery and recruited Clifton Allen and Marcus Dar-rell Dean to enter the credit union with firearms and rob it. They fled with $27,000. The three men were sentenced in April to prison terms. Hamilton was also ordered to pay $17,200 in restitution and a fine of $2,400, and undergo five years of supervised release, said the Federal Bureau of Investigation (States News Service July 7) … * WEST MONROE, La. (8/2/11)--Donna Wagoner, who has been CEO of Ouachita Valley FCU, based in West Monroe, La., since 2003, retired Friday. She is succeeded, effective yesterday, by Katie Pilcher, who has been with the credit union for 21 years. Wagoner arrived at the credit union in 1986 with her husband, Julius Wagoner, then-CEO of the credit union. The couple rescued the troubled credit union, and she took over as CEO in 2003. Today it has $138 million in assets, 25,000 members and five full-service branches. She was inducted in the Louisiana Credit Union Hall of Fame in 2010 and continues serving as a director for the Louisiana Credit Union League (Thenewsstar.com July 30) … * LANSING, Mich. (8/2/11)--Michael Fitzgerald, former Michigan Credit Union Division director and former chairman of the National Association of State Credit Union Supervisors (NASCUS), died July 22, according to the Michigan Office of Financial and Insurance Regulation. Fitzgerald was employed with the Michigan Financial Institutions Bureau for 28 years and was responsible for the supervision of more than 300 state-chartered credit unions. He became director of the division in March 1981, after serving in several other positions, including assistant director. He served on the NASCUS board from 1981 through 1988 and was chairman during 1986-1987. He also chaired the State Liaison Committee to the Federal Financial Institutions Examination Council and was active in NASCUS' Accreditation Program. He was a proponent for the development of an independent accreditation program of credit union supervisory agencies and was instrumental in forming the NASCUS program. Under his watch, Michigan's credit union examination program was the first in the nation to submit to independent review and receive accreditation in 1989 …

Credit on campuses declined 17 in 2010

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CHICAGO (8/2/11)--The number of new credit card accounts issued through colleges and affiliated groups such as alumni associations, dropped 17% in 2010, according to a Federal Reserve Board report released in July. Card accounts fell by 340,409--to 1.7 million cards in 2010 from more than two million in 2009. The Fed survey also indicated that the number of marketing agreements between credit card companies and colleges, universities and alumni associations also declined, by 41, to 1,004 agreements, a 4% drop during the same period. However, while some banks are dropping their agreements, credit unions have taken the opportunity to get agreements of their own on campus. Some analysts said the survey results reflect the implementation of the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009, which prevents card companies from issuing credit cards to students under age 21, unless they can prove sufficient income or have a co-signer on the account (LansingStateJournal.com July 14). The law also specifies that card issuers cannot send pre-approved credit card offers via mail, that they must stay 1,000 feet away from campus when trying to market the cards to students, and that they no longer provide incentives to students if they apply for a credit card (BusinessInsider.com (July 22). Others say that although the law has resulted in lower revenues for colleges and alumni associations, it is unclear how well the law succeeded in its goal of keeping students with little income from getting into credit card debt (Chicago Tribune July 31). A survey last fall by the University of Houston Law Center indicated that roughly three-fourths of students surveyed who are younger than 21 reported receiving a credit card offer since the beginning of 2010. The act became effective in February, 2010. Credit card companies can still contact students and offer gifts in exchange for signing up for credit cards so long as it is done electronically, and students can open checking accounts, which may lead to taking out a credit card. In 2009, banks spent nearly $84.5 million in colleges, universities and institutions of higher education to promote student credit cards. In 2010, that fell to nearly $73.3 million--a 13% drop. The number of student credit card accounts opened as a result of this spending dropped 13% also, said BusinessInsider.com. Banks are weighing the level of effort the agreements take against the number of accounts they get through that channel and some have left campus. Bank of America and the University of Illinois Alumni Association recently ended their affiliation, and a credit union has the new agreement. University of Illinois Employees CU paid $500,000 to the alumni group during the last six months of 2010 and opened more than 770 accounts, said the Chicago Tribune. Under the agreement the credit union can make six contacts a year by e-mail or direct mail with potential members who are graduates, former students, faculty, staff and university donors who are at least 21. However, it can't contact undergraduates regardless of their age, according to the alumni group. The alumni group gets $5 for each new account that stays open for at least 90 days and that's used at least once, and 1.25% of whatever purchases the member makes. At Michigan State University in East Lansing, Michigan State University FCU has a $400,000-a-year agreement that allows it to issue credit cards with MSU trademarks, said the Lansing State Journal.

Milton elected as federation board chairman

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NEW YORK (8/2/11)--The National Federation of Community Development Credit Unions elected five members to its board of directors, and elected a new board chairman during its 37th Annual Conference on Serving the Underserved. The elections resulted in five new directors representing two of the federation’s regions and the at-large (nationwide) category, and re-election of incumbents in the remaining two regions. Election results include:
* Chairman--Lynda Milton, president/CEO Team Financial FCU, Houston; * Vice-Chair--Deyanira DelRío, board chairman at the Lower East Side People’s FCU, New York; *Treasurer-- Edgar Cosner, president/CEO of The United FCU, Morgantown, W.Va.; * Recording Secretary--Shirley Spruill, manager & president of Renaissance Community Development CU, Somerset, N.J.; * Corresponding Secretary--Michael Chan, board president of Northeast Community FCU, San Francisco.
There are currently nine females and six males on the board of directors; eight are African-American, one is Asian, one is Latino, and five are white/Anglo. Elected to three-year terms are:
* In Region 1 (East), Shirley Spruill, manager and president of the board at Renaissance Community Development CU, Somerset, NJ; * In Region 2 (South), Permelia “Pam” Murphy, president and board treasurer, Citizens Choice FCU, Natchez, Miss., and Mignhon Tourné, president/CEO of ASI FCU, Harahan, La.; * In Region 3 (Mid/South West), Milton. * In Region 4 (West), Gary Bell, CEO, Cooperative Center FCU, Berkeley, Calif., and Robin Romano, CEO, MariSol FCU, Phoenix. * At-large director, Sheilah Montgomery, president/CEO of Credit Union of Atlanta.
Federation directors may serve up to three, three-year terms. Board officers serve one-year terms.

Illinois small CUs meeting this week

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NAPERVILLE, Ill. (8/2/11)--More than 80 attendees are expected for the Illinois Credit Union League’s (ICUL) annual Small Asset Size (SAS) Conference for credit unions under $20 million in assets. The two-day event begins today at ICUL’s offices in Naperville, Ill. Many session topics will center on helping small credit unions compete in today’s marketplace. Time also will be built into the schedule for attendees to network and share best practices. Among the highlights from the first day of sessions will be a presentation on “The Economy and the Small credit union” by Mike Schenk, vice president of economics and statistics at the Credit Union National Association (CUNA). Richard Klecun, National Credit Union Administration (NCUA) economic development specialist; Gerald Schultz, NCUA supervisory examiner; David Anderson, Illinois Department of Financial Institutions (DFI) senior financial institutions examiner, and Brad Losch, DFI acting assistant supervisor, will also speak on the first day. Session topics and speakers on the second day include “Collections” by Shelia O’Leary, manager of Collectors Resource Services (CRS), a division of the ICUL Service Corp., and “Exam Directives vs. Recommendations” by Patrick Smith, ICUL’s vice president of communications and regulatory affairs, and Mike Daugherty, president of Community Plus FCU, Rantoul, Ill. The conference will conclude with an open forum and networking lunch, facilitated by Joni Senkpeil, ICUL director of small credit union development. This year’s event is sponsored by ICUL, the Illinois Credit Union Foundation and CUNA Mutual Group.

BizKid gets 250K grant from SECU Foundation

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RALEIGH, N.C. (8/2/11)--State Employees’ CU (SECU) Foundation announced that SECU members have provided a $250,000 grant to help fund the ongoing production of Biz Kid$--an award-winning public television series promoting financial education for elementary and middle-school students. Beginning production of a fourth season, the series engages youth in topics such as saving, budgeting and entrepreneurship. This is the second SECU foundation grant in two years provided for production assistance, with $125,000 given in 2009. The SECU foundation is the charitable arm of the credit union. Biz Kid$, with its educational focus, was a clear choice for foundation support and is heavily used by SECU personnel in North Carolina middle schools, according to SECU. Staff members in SECU branches have been trained with the curriculum, and the credit union continues to work with the North Carolina Department of Public Instruction to train teachers about the program. Biz Kid$ television episodes and corresponding learning activities are shared with middle-school students primarily in social studies and career and technical education classes. Thousands of students have already been reached through SECU’s efforts. “State Employees’ CU has always placed financial education as a high priority and providing funding for Biz Kid$ is a great way to expand our reach with North Carolina students,” SECU Foundation Board Chair Shirley Bell said. “With today’s continuing economic crisis, our members realize that learning the basics of financial management is more critical than ever. Biz Kid$ has been well received since its debut and we look forward to seeing its continued positive impact.” Based in Raleigh, N.C., SECU has more than $21 billion in assets.

Entries due Aug. 31 for 10K CO-OP THINK prize

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RANCHO CUCAMONGA, Calif. (8/2/11)--The deadline for entries to the CO-OP THINK Prize 2012 is Aug. 31 for round-one applicants vying for the $10,000 grand prize. “The CO-OP THINK Prize is designed to initiate and reward new thinking on how to propel the credit union movement forward,” said Stan Hollen, president/CEO, CO-OP Financial Services. “We had a great inaugural competition in 2011 and we are looking forward to the 2012 contest once again serving as a conduit for the innovation and creativity of credit union employees.” Entrants must complete six short-answer questions in round one via the online form. The entries will be judged by representatives of CO-OP and the Filene Research Institute, with judging based on impact, creativity and shareability. After Aug. 31, 25 semi-finalists will be notified around Sept. 30. Semi-finalists will have until Nov. 30 to complete their round-two work. Three finalists will be named around Jan. 5, and the grand prize winner will be announced at the THINK 12 Conference in Boca Raton, Fla., on April 30. In addition to the $10,000 grand prize, the three finalists and one guest each will have round-trip travel and hotel accommodation costs covered for their attendance at THINK 12. The 25 semi-finalists will each receive a $150 gift card. In May, Matt Weidler of Evangelical Christian CU, Brea, Calif., won $10,000 in the 2011 inaugural CO-OP THINK Prize competition. With more than 3,000 credit union members, 30 million cardholders, 28,000 surcharge-free ATMs, 4,300 shared branch locations and more than two billion annual transactions, CO-OP Financial Services, based in Rancho Cucamonga, Calif., is the nation’s largest credit union service organization. For more information, use the link.

Catalyst Corporate announces board

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DULUTH, Ga. (8/2/11)--Eleven credit union leaders were named to the board of the future Catalyst Corporate FCU, which will arise from the merger of Georgia Corporate and Southwest Bridge Corporate. Beginning on Sept. 6, the first day of Catalyst Corporate operations, the credit union’s board will include:
* Lin Hodges, president/CEO, Associated CU, Norcross, Ga., chairman; * Bobbie Threlkeld, president/CEO, Baptist Health FCU, Little Rock, Ark.; * Ronald Johnston, president/CEO, Artesia (N.M.) CU; * John Papagno, chief financial officer, Healthcare’s Cooperative CU, Jacksonville, Fla.; * Ayn Talley, president/CEO, Houston (Texas) Police FCU; * Michael Hooper, La Capitol FCU, Baton Rouge, La.; * Rick Hein, president/CEO, OSU FCU, Corvallis, Ore.; * Connie Cofer, senior vice president/chief financial officer, Communication FCU, Oklahoma City, Okla.; and * Rod Taylor, Barksdale FCU, president/CEO, Bossier City, La.
Serving on the Supervisory Committee will be:
* Craig Atkinson, president/CEO, Houston (Texas) Highway CU; * Kerry Parker, president/CEO, A+ FCU, Austin, Texas; and * Candy Bracewell, senior vice president/chief financial officer, LGE Community CU, Marietta, Ga.
More than 857 credit unions and other organizations throughout the country have committed to Catalyst Corporate, according to Greg Moore, president/CEO of Georgia Corporate. “With a membership this size, the decisions of Catalyst’s board of directors will have considerable influence on the credit union community,” Moore said. “One of our objectives was to ensure that the board truly represents our membership as a whole,” said Dianne Addington, president/CEO of Southwest Bridge Corporate. The board and supervisory committee were selected through a process that began early this year, when Georgia Corporate’s board of directors appointed a Governance Advisory Council consisting of Tim Adams, president/CEO, SPCO CU, Houston; Willie Jacobs, president/CEO, White Sands CU, Las Cruces, N.M., and Randy Smith, president/CEO, Randolph-Brooks CU, Live Oaks, Texas. They were charged with evaluating more than 21 executives who applied to serve as directors or committee members for Catalyst Corporate FCU.

Missouri Corporate members commit 21M in PCC

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ST. LOUIS (8/2/11)--Missouri Corporate CU has raised $21.4 in perpetual contributed capital (PCC), exceeding the capitalization level required by the National Credit Union Administration (NCUA). The NCUA deadline for members to make their commitment for purchasing PCC was Monday. Missouri Corporate exceeded its PCC goal of $17.5 million by 22%, according to President/CEO Dennis DeGroodt. Credit unions in Missouri, Illinois, Oklahoma and North Dakota made capital commitments, and more are expected, DeGroodt said. Missouri Corporate, with about $450 million in assets, was chartered in 1976 and serves more than 200 natural person credit unions in the U.S. The PPC is required by NCUA to build capital in each corporate as part of the agency’s overall corporate stabilization plan.

CUNA reminds of NCUSIF in IWSJI debt-limit article

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WASHINGTON (8/2/11)--The U.S. debt-ceiling debate has brought advice from The Wall Street Journal for consumers to review their savings accounts and other deposits to make sure their cash is protected by federal insurance. The Credit Union National Association (CUNA) took the opportunity to educate the Journal and its readers about credit unions' federal deposit insurance fund. Money deposited at a federal credit union is generally insured up to $250,000 by the National Credit Union Share Insurance Fund (NCUSIF), which works under the same account-category rules as Federal Deposit Insurance Corp. insurance, CUNA Chief Economist Bill Hampel told the Journal (July 31). Most, but not all, state-chartered credit unions are also covered by the NCUSIF, Hampel noted in the article. "If you're not sure, ask your credit union," the article said, pointing readers to a deposit-insurance calculator on the National Credit Union Administration website. Use the link to review the full article. The article was also featured in MarketWatch (July 31).