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CU System Archive

CU System

Three Wash. CUs OK prize-linked savings

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FEDERAL WAY, Wash. (9/4/12)--The boards of three Washington state credit unions have signed on to support a 2013 launch of prize-linked savings programs in the state, according to the Northwest Credit Union Association (NWCUA).

The credit unions are TwinStar CU in Olympia, Connection CU in Silverdale, and O Bee CU, Tumwater.

Prize-linked savings accounts allow consumers to build assets while earning chances to win monthly or annual cash prizes.

Additional Washington credit unions are considering the programs, said Lynn Heider, vice president of communications and public relations for NWCUA (Anthem Recap Aug. 30).

"The programs are definitely picking up traction in Nebraska, where after launching just seven months ago in 10 credit unions, members have saved over $1.1 million," Heider said, noting that Michigan's Save to Win program is offered by more than 40 credit unions to more than 16,000 members.

The Michigan Credit Union League (MCUL), which launched its program in 2009, will work with NWCUA to operate the Washington program. MCUL, which also operates Nebraska's program, has estimated that at least six Washington credit unions would be needed to launch the program successfully in 2013.

NWCUA said that if the program takes off in Washington, it will fund a prize pool offering multiple monthly prizes as well as an annual prize for three years. In addition to the operating structure, Michigan also will provide marketing materials and other support.

CU delays ad after Neil Armstrongs death

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LAFAYETTE, Ind. (9/4/12)--Purdue FCU, based in Lafayette, Ind., pulled the first advertisements about its new credit card spokesman out of respect for Neil Armstrong, the astronaut who was the first man on the moon and who died Aug. 25 at the age of 82.

The ads were to announce that another astronaut, Eugene Cernan--the last man on the moon--would be the new spokesman for the Purdue Alumni Visa credit card in time for the first football game at Purdue University (Journal & Courier Aug. 30)..

Instead, the credit union pulled the ads at the first football game because of the "unfortunate and ironic timing," Purdue President/CEO Bob Falk said.

Television and radio advertisements for the new credit card will be aired beginning Saturday, the date of Purdue's second football game. Cernan is a Purdue alumnus.

The new Visa credit card features a picture of Cernan walking on the moon.  It has no annual fee and offers a free rewards program. The credit union partnered with the Purdue Alumni Association and hosted a launch party Wednesday, where they screened the TV commercial, which features Cernan paying for a cup of coffee with the card in a local restaurant.

Cernan's endorsement, which is a three-year contract, replaces that of Purdue alumnus and National Football League quarterback Drew Brees of the New Orleans Saints. Brees' three year contract had expired.

Mid-Atlantic Corporate conference spotlights security (08/31/2012)

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MIDDLETOWN, Pa. (9/4/12)--"Americans are 40 times more likely to be defrauded than to have their cars stolen or their homes burgled," said identity theft expert James Munton, who keynoted Mid-Atlantic Corporate FCU's second annual IT and Security Conference.

More than 100 credit union and security professionals attended.

Munton, who is an authority on identity theft and security breaches--and a career magician--focused on data-protection methods.

"No one thinks it can happen to him, but the [Federal Trade Commission] reports that every year, more than 30 million Americans are fraud victims. The first step to combating fraud is to understand it," Munton said.

From social engineering to the latest internet scams, conference breakout sessions covered vulnerability assessments and incident response plans, as well as virtual security and other new technologies that increase fraud exposure and add member convenience, said the Middletown, Pa.-based corporate.

Scott Sutherland, special agent with the Federal Bureau of Investigation, wrapped up the conference with a discussion on preventing and detecting fraud and cybercrime.

"Speakers used real-world examples of attacks on financial institutions to help credit unions better understand the techniques attackers may use to infiltrate their credit union's systems," said Richard Carberry, security administrator for Mid-Atlantic Corporate. He noted that turnout was 50% greater than last year and that the event "affirmed what we've been hearing from our members. There's a strong desire for security education catered specifically to credit unions."

The conference also included the latest virtualization trends, highlighting the rapidly growing cloud services industry. Sponsors included Arraya Solutions, Core BTS, EMC Corp., MY CU Services LLC, and Ongoing Operations LLC.

(Editor's note: The Credit Union National Association offers a number of security training events. Use the links for more information.)

Dozen more CU branches report Isaac water damage

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MADISON, Wis. (9/4/12)--Credit union leagues in the Gulf Coast states affected by Tropical Storm Isaac were reporting more credit unions with damages, mostly minor, on Friday.

About "a dozen" credit union branches, mainly along the Gulf Coast, had experienced water damage, said Charles Elliott, president/CEO of the Mississippi Credit Union Association.  Much of the damage was the result of wind-blown water and roof damage rather than flooding.

Elliott said the homes of many credit union employees along the Gulf had experienced damage as well, although he didn't have an exact number.

Singing River CU's main branch in Moss Point, Miss., experienced flooding from Hurricane Isaac. Flooding was caused by a damaged roof and "blow-in water," according to CEO Jimmy Smith. A clean-up crew had bailed out about 600 gallons of water from the branch by early afternoon Friday and was using fans and dehumidifiers to prevent mold from growing.

About 25% of the branch had been damaged, Smith estimated. The credit union's loan department was serving members from the branch lobby.

"We have damage, but our credit unions look at things from the perspective of Katrina," Elliott said. "This damage is minimal compared to what we had with Katrina. On a scale of one to 10, with Katrina being a 10, this was a one or less. That's just how we look at things. We're thanking God that it wasn't any worse than it was."

Smith echoed Elliott's comments. "My staff is absolutely amazing," Smith said. "I can't say enough about their high spirits. They are looking at this as another chance to excel at member service." Smith said some of his employees' homes had suffered damages in the storms. "Thank goodness it's only minor damage," he said.

The Louisiana Credit Union League said Friday its member service representatives had starting contacting credit unions in the regions along the coast Thursday to determine their storm losses, but many credit unions remained closed on Thursday and Friday.

"We're very fortunate," said Lacey Hyer, the league's vice president of communications and public relations. "Some have minor losses."

"The league's office has no power yet," she said Friday morning, "so we're closed, but the staff is working remotely."  She added that "all league staff are safe. Some haven't been back into their homes yet to determine damages."

The league's foundation was starting the paperwork to activate financial assistance and would be sending a notice to its members as soon as possible.

CO-OP Shared Branching has been receiving requests to assist Louisiana credit union members impacted by Isaac with offline transactions, said the Pennsylvania Credit Union Association in its newsletter, Life is a Highway (Aug. 31). "With credit unions working together through the shared branching network, members will continue to receive financial services they need as they recover from the storm," it said.

Credit unions in Florida and Alabama, which had closed Tuesday and Wednesday, began reopening on Thursday and all were open by Friday, according to the League of Southeastern Credit Unions' listing on its website.

CUNA Mutual Group, which had said Thursday that one credit union had reported major losses to a branch and seven others with minor losses, said later Friday afternoon that there was no change. "Reported losses have been relatively few, and with a couple of exceptions, damages have been confined mostly to minor interior water issues and minor exterior damage such as roofing, signs, windows and siding," said Phil Tschudy, media relations manager at CUNA Mutual..

"We will continue to monitor and respond to any new losses reported over the weekend. A lot of rain is forecast for Tennessee through the Carolinas over the next few days, but we do not expect our corporate policyholders to be impacted," he told News Now

Credit unions with damages or losses can contact CUNA Mutual's toll-free emergency number (800-637-2676), which is answered live, 24 hours a day, seven days a week.

Scams follow disasters warns agencies

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WASHINGTON (9/4/12)--Several federal and state agencies and consumer groups have issued warnings to consumers to beware of scams that typically occur after a natural disaster--both in the affected areas and across the country. Credit unions should be alert to two of the most popular: charity donation scams and home improvement loan scams.

The Federal Trade Commission, the Better Business Bureau, the Consumer Financial Protection Board and several state agencies all have issued alerts to consumers. Credit unions, especially in states that have flooding from Hurricane/Tropical Storm Isaac, should also be alert to members withdrawing or transferring funds to possible fraudulent entities posing as charities and home repair specialists.

Because credit union employees and members tend to be "people helping people," they could be at risk for encountering scam artists posing as charities collecting funds for victims in a disaster area. The Better Business Bureau (BBB) in Chicago has warned  consumers to fully check out anyone soliciting donations (The Sacramento Bee Aug. 31). The bureau particularly warned consumers to avoid donation pitches that come through e-mail and to be wary of claims that 100% of the donation will go to victims. All charities have expenses, said BBB.

The FTC has advised people to: donate to charities they know and trust; ask if a caller is a paid fundraiser, who they work form and what percentage of the donation goes to the charity and the fundraiser; avoid giving out personal or financial information such as credit card and credit union account numbers unless they know the charity is reputable; never send cash; and check out the charity before donating to it.

Home and business repair contractors may be fraudulent if they:

  • Are unable or unwilling to provide proof of licensing, bonding and insurance;
  • Insist on full payment or a large down payment before beginning work or pressure the consumer into signing a contract.
  • Offer a great deal because of materials "left over" from a previous job or offer a discount for finding other customers.
 

Other common scams, according to information from the Office of the Attorney General in Bismarck, N.D., include:

  • Form completion services. Advise members to avoid people who charge a fee to help them complete a disaster assistance form for agencies such as the Small Business Administration (SBA) or the Federal Emergency Assistance Agency (FEMA). These services are provided free by FEMA and the American Red Cross.
  • Phony inspectors. Advise members to verify the credentials before letting anyone in the home and to ask for a telephone number to confirm the inspector is working for an authorized agency.
  • Government grant offers. Members should be told to be aware of entities that offer "free grant money" for flood repair or disaster relief. A true grant is free and does not require upfront fees or repayment. Advise members to check with a regional or state economic development office to learn about grant programs they may be eligible for. Local social service agencies can also provide information or assistance.
  • Advance fee loans.  It is illegal to charge an up-front fee for a loan. Tell members to ignore any company that "guarantees" they will receive a loan. Scamsters will charge a processing fee, then promise to find a lender. Members should check to see if the "lender" is registered with the state department of financial institutions in order to lend funds in the state.
  • Water testing and purifiers. Warn members to avoid offers for "free" home water testing or be skeptical if an in-home "test" indicates they have unsafe water. They can monitor local news media for instructions from health authorities regarding water safety and purification or they can contact their local public health authority directly.

ATM fire temporarily closes APG FCU branch

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EDGEWOOD, Md. (9/4/12)--A fire at an outdoor ATM closed down a branch of Aberdeen Proving Ground FCU (APGFCU) for a few hours Friday morning.

The ATM at the $876 million asset credit union's Forest Hill, Md. branch caught fire at 9:05 a.m.  The Bel Air Volunteer Fire Co. extinguished the fire and all members and employees at the credit union were safe and unharmed, the credit union said in a press release (Baltimore Sun Aug. 31).

The freestanding ATM is located in a drive through lane at the branch and the fire was isolated in the ATM.  Fire officials indicated the fire may have been caused by an electrical wire connected to an air conditioning unit within the machine.

"All of our people are safe and they are our priority," said APGFCU President/CEO Don Lewis in the press release. "Our next steps are to determine the cause, repair the damage and review our facility."

The credit union reopened at noon.

CU is backdrop for football program news story

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AUSTIN, Texas (9/4/12)--United Heritage CU, based in Austin, Texas, hosted Austin's FOX 7 News  for a news story to kick off the high school football season. 

Austin, Texas-based United Heritage CU was the backdrop for a recent news story featuring the Lake Travis High School football program. (Photo provided by the Texas Credit Union League)
FOX 7 News set up shop at United Heritage CU's Lakeway branch on Aug. 20 for a feature on the Lake Travis High School football team, the first stop on a FOX 7 Football Fieldtrip, according to the Texas Credit Union League (LoneStar Leaguer Aug. 31).

Lake Travis High School is located across the street from the credit union's branch.

The station used the United Heritage CU branch as the location for the live 5 p.m. evening news feature.  Dave Cody, sports anchor for FOX 7, discussed the school's football program, including its reigning status as five-time state champions in the 4A conference.

CU System briefs (08/31/2012)

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  • WACO, Texas (9/4/12)--A former church treasurer whose hay operation encountered financial difficulties worsened by recent droughts was placed on deferred felony probation Wednesday for allegedly stealing $66,000 from the church and improperly selling more than $40,000 in tractors and other equipment he had used to secure loans at a credit union. The deferred probation places Michael Lynn Hooper, 64, of Robinson, Texas, under court supervision for five years. He also was ordered to pay restitution of $16,000 to Bethel Methodist Church of Robinson and $42,000 to Educators CU, Waco. Hooper had already paid back $50,000 to the church before pleading guilty to felony theft and hindering secured creditors. In deferred probation cases, there is no final judgment of guilt if the defendant completes the probation  (Waco Herald-Tribune Aug. 30) …
  • DES MOINES, Iowa (9/4/12)--A credit union in Des Moines, Iowa, was robbed Wednesday for the second time within a month. Employees at the $40 million asset Edco Community CU told Des Moines police that a man entered the credit union before 10 a.m. and demanded money. He escaped with an undisclosed amount. On Aug. 1, a man entered the credit union and produced a note demanding money to the teller. He, too, left with an undisclosed amount, said police. Police have released surveillance images from both robberies (Des Moines Register Aug. 30) …
  • DALLAS (9/4/12)--Dallas-based Neighborhood CU dropped by long-time member Laura Dawson's home in Grand Prairie with a big surprise--an oversized check for $10,000, a reward for saving money.  "Holy Macanoli! How did this happen?" said the shocked Dawson.  Neighborhood CEO Chet Kimmell and Senior Vice President Carolyn Jordan explained she was the big quarterly Prize Savings Account winner. The credit union created the account to encourage members to save money and plan for their future by rewarding good savings habits with drawings on a monthly ($1,000), quarterly ($10,000) and annual ($25,000) basis. Dawson's name was drawn from among all Prize Savings Account holders. Members receive one drawing entry for every $25 monthly average balance in their account. Dawson and her husband, William, have been members of the credit union for 37 years (LoneStar Leaguer Aug. 31) …
  • HIGHTSTOWN, N.J. (9/4/12)--Two key staffers of U.S. Sen. Robert Menendez (D-N.J.) Thursday met with New Jersey credit union advocates who pressed the case for member business lending (MBL) reform, said the New Jersey Credit Union League (The Daily Exchange Aug. 31). Legislative Counsel Michael Passante and Constituent Outreach Coordinator Catherine Best visited the league offices for an update of credit union concerns. The league and the advocates have met a number of times with Passante during Hike-the-Hill visits. The Credit Union National Association, leagues and credit unions are urging Congress to pass legislation that would raise credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would inject $13 billion into the economy through new small business loans and contribute to the creation of 140,000 new jobs, all without costing taxpayers a dime. "We are at a critical juncture when it comes to MBL reform," said league President/CEO Paul Gentile. "A vote could come at any time after Congress returns from its August recess. It's extremely important we keep up the pressure." From left: Chris Abeel, league director of governmental affairs; Eddie Daniels, CEO, Newark Board of Education Employees CU; Lourdes Cortez, president/CEO, North Jersey FCU; Andy Jaeger, president/CEO of Credit Union of New Jersey and CULAC trustee; Lou Vetere, president/CE, Garden Savings FCU and league chairman; Gentile; Passante; Mark Sovelove, senior vice president, lending, and David Bell, MBL loan officer, Financial Resources FCU; and Linda McFadden, president/CEO, XCEL FCU and league board member. (Photo provided by the New Jersey Credit Union League) …

Catalyst Corp. looks back on first year

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PLANO, Texas (9/4/12)--Wednesday will mark the one-year anniversary of Catalyst Corporate CU's formation, when the corporate credit union consolidated Georgia Corporate FCU and Southwest Bridge Corporate FCU.

"It's not 'whew,' it's 'wow,'" said Kathy Garner, president/CEO of Catalyst Corporate, where everything has been on a fast track the past 12 months. "It has been busy, but at the same time, it has been energizing," Garner added.

When Catalyst launched in September 2011, about 860 credit unions had put up $90 million in capital for the new entity. At the end of August 2012 Catalyst has more than 1,230 credit union members. Its capital grew to more than $150 million during its first year.

Much of Garner's time in her early months on the job has been on the road visiting credit unions and attending credit union events to welcome new members into Catalyst's expanded membership.

"Credit unions have been nothing but supportive during the past year," Garner said. "They have expressed that they see Catalyst's growth as delivering on our business objectives to create efficiency and value by growing scale."

In June, Catalyst Corporate conducted a member satisfaction survey. More than 2,000 contacts among its member credit unions were invited to participate, and 540 from more than 300 credit unions responded.

One goal was to attain a Net Promoter Score (NPS) by asking: "How likely are you to recommend Catalyst to a friend or colleague?"

Catalyst received an NPS score of 64%, placing it slightly behind such companies as Amazon and eBay, and above companies such as Schwab and American Express, Garner said.  The average score in the banking industry is 18%, according to the book, The Ultimate Question 2.0.

"Respondents cited Catalyst's quality of service and helpful staff among the reasons for recommending the corporate," Garner said.

Earlier this year, Catalyst formed three regional councils. They have met twice to discuss product enhancements, member communication and the member satisfaction survey.

The 36 volunteers serve on the councils. They and more than a dozen credit union professionals serving on various committees join a board of directors that has expanded to 11 positions to provide additional West Coast representation.

Paper Multi-layered approach can curb fraud

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MIAMI (9/4/12)--Financial institutions must deploy multiple layers of protection to stay ahead of fraudsters, according to a new white paper from Compass Plus.

Compass Plus is a provider of retail banking software and electronic payments systems to financial institutions.

The financial services industry has undergone a transformation in the past 10 years, with consumers visiting branches less, according to the paper, The Rise and Fall of a Fraudulent Transaction. The Internet, mobile and self-service kiosks, including ATMs, now provide access to services at all times. This shift to online banking, e-commerce and mobile wallets has presented a new range of opportunities for criminals, and fraud has become a more pervasive global issue, says the paper.

When it comes to fraud, financial institutions, including credit unions, have to bear hidden costs, including loss of customer confidence and damage to their brand and integrity. In the white paper, Compass Plus outlines the various types of fraud prevalent today and the numerous layers of protection that can be used to combat them.

The paper outlines eight layers of protection:

  1. User authentication. For Internet banking and mobile banking, credit unions can use a number of increasingly sophisticated methods of user authentication, including virtual keyboards, dynamic passwords, hardware tokens, one-time passcodes and Visa Dynamic Passcode Authentication and MasterCard Chip Authentication Protocol.
  1. 3D secure and virtual cards. With 3D Secure member/customers must opt in, and will recognize 3D Secure in the Verified by Visa or MasterCard SecureCode authentication window that appears as part of an online transaction process. With virtual cards, a one-off 'card' is issued online or at an ATM, with disposable details. Usage parameters are set by the member/customer--these could include an expiration date and number of transactions allowed.
  1. Limits and customer notifications. Member/customer notifications via e-mail and text messaging can be used to alert a member to account activity. If that activity has not been initiated by the member, an instant call to the financial institution's fraud department will prevent further unauthorized transactions. Financial institutions can also also be able to set and revise usage limits.
  1. Transaction flow analysis. This is a methodology that compares the parameters of the current and previous transactions with statistical parameters. Each transaction is analyzed, based on rules and algorithms defined by the credit union/bank to detect suspicious transactions.
  1. Object behavior analysis. The statistical analysis of object activity, such as cards, and merchants, enables the tracking of changes in an object's behavior by analyzing its activity over a certain time to accumulate statistics.
  1. Internal access rights control. A system that controls internal access rights to sensitive information, requires permissions from more than one individual to access sensitive information, encrypts all data as a matter of course, and maintains automatic and detailed audit trails will provide a strong deterrent to anyone looking to perpetrate internal fraud.
  1. Payment card industry data security standards. Industry standards add an additional layer of security for financial institutions. In 2006, card companies formed the Payment Card Industry Security Standards Council, which mandates security standards for payment card processing and management.
  1. Europay-MasterCard-Visa. Physical card fraud--commonly known as skimming--has been reduced by the introduction of the EMV card, which has been widely implemented across Europe but not the U.S.

Fisher presented N.C. CU advocate award

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RALEIGH, N.C. (9/4/12)--North Carolina State Rep. Susan Fisher (D-114th) accepted the CU Advocate Award Aug. 28 at the North Carolina Credit Union League's Western Chapter meeting in Waynesville, N.C.

Fisher was one of three members of the state's General Assembly the league recognized with Credit Union Advocate Awards for their support in helping credit unions pass Save to Win legislation. Also honored were Reps. Efton Sager (R) and Sen. Rick Gunn (R). Sager attended the league's annual meeting in June to accept the award.

"I have to share this award with other people in the General Assembly because the bill we shepherded was really an example of the miracle of bi-partisanship," Fisher told the league (Weekly Conversation Aug. 31). "Any time I can find a chance to work across the aisle with my colleagues I will do that."

Fisher added that Save to Win will "spur on savings from among all your (members) during a really difficult financial time. North Carolina Credit Unions are to be applauded for providing an innovative incentive program for savings."

The league's Credit Union Advocate Award honors state and federal legislators who have demonstrated a clear and consistent understanding of and appreciation for credit unions.

Media roundup spotlights CUs--from Romney to student loans

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MADISON, Wis. (8/31/12)--Media spotlights were on credit unions Wednesday and Thursday, with the Credit Union National Association and credit unions generating good press in Florida with their activities at the Republican National Convention, and with credit unions' student checking accounts receiving accolades from MoneyTalksNews and NerdWallet.

The story about CUNA, the League of Southeastern Credit Unions, and the National Journal

Group's leave-behind project in which Ann Romney, wife of the Republican candidate for president, Mitt Romney, cut the ribbon for a therapeutic playground at All Children's Hospital in St. Petersburg, saw coverage across the state.

Picking up the story on Wednesday and Thursday were Tampa Bay Business Journal; the Tampa Bay Times (which featured two stories) and its online site, Tampa.com; GulfportPatch.com; SarasotaPatch.com, and BelmontPatch.com. Many of the stories had more than one photo and several posted videos of the ribbon-cutting ceremony.

CUNA and the league were featured as developing the playground though fundraising efforts and donations of credit union members. Use the links for examples of the articles and videos.

In another area, credit unions' services for college students were highlighted in an article entitled, "Credit Unions; Better for College Students--and Many Others," in MoneyTalkNews (Aug. 30), which talked about a recent NerdWallet survey comparing on campus credit unions and banks.

"A study of student checking accounts found credit unions usually beat campus banks. Other results: Average credit union rates are better on EVERYTHING, from checking to loans and credit cards," said the article in its first paragraph.

It quoted several statistics:  Credit unions have a lower average overdraft fee than banks--$28 to banks' $35; credit unions are more likely to offer free student checking (99%, to 82% at banks); they have an average of nearly twice the ATMs within a mile of campus than banks do; and they are more likely to have a branch on campus than banks.

"Credit unions are also a good place for students and recent grads to build credit, because they're often more flexible with lending. But they might make sense for anybody, not just students," it said. It also pointed to a video offering five reasons to join a credit union. To access the article, use the link.

Some CUs report flood damages in Isaacs aftermath

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MADISON, Wis. (8/31/12)--Early reports indicate that at least one credit union in Louisiana has suffered a major branch loss and seven others have reported minor losses due to the aftermath of Tropical Storm Isaac, which hit the Gulf Coast Tuesday as a Category 1 hurricane before being reduced to a tropical storm Wednesday afternoon.

"As of 4 p.m., Thursday, we received seven reported minor losses and one major flood loss to a credit union branch office," said CUNA Mutual Group Media Relations Manager Phil Tschudy.

"With the exception of the flood loss, and based on reports we've received so far, it appears Isaac caused few and minor losses for our credit union policyholders," Tschudy told News Now.

"Tropical Storm Isaac is expected to continue to track slowly inland through Louisiana and into Arkansas and Missouri, causing flash flooding and isolated tornadoes. CUNA Mutual Group remains most concerned with New Orleans and the surrounding area. Although many credit unions in the New Orleans area remain closed, we have contacted most and are making on-site visits to those we can not reach," he said.

In Florida and Alabama, all the credit unions that had reported closures were back open on Thursday, according to the League of Southeastern Credit Unions' website.

The Mississippi Credit Union Association's Facebook page provided a morning update:  "We've been in contact with numerous credit unions this morning and most importantly, no credit union personnel injuries have been reported at this time and we are all thankful for that blessing," said the posting. 

"However, since this is the storm that refuses to move along, specific credit union plans are fluid (forgive the pun) as they determine conditions in their specific community/area. Members are advised to contact their credit union or visit their credit union's website to determine operating hours for today," said MSCUA.

The Louisiana Credit Union League's website posted closings by 26 credit unions on Thursday.  Several credit unions planned to reopen today. They included LES FCU, Louisiana FCU and one branch of Shell N.O. FCU. The league remained closed Thursday, but staff continued to monitor phones and e-mail, said the site.

Louisiana Corporate CU, in a member communication Thursday on its website, noted its contingency communication plan remains in effect. "The main office will reopen when power is restored," the corporate said on its website. "We will post an update to this site when we have a definite time for reopening the main offices. All systems and services remain fully operational." It provided contingency numbers and instructions for credit unions and said that transaction requests may be entered on automated systems such as CorPower, CorpACH, EBP and so forth.

Isaac, instead of moving north, sat on the Gulf Coast and created severe flooding in of Louisiana. The National Hurricane Center predicted that the storm would drop up to 25 inches of rain in some areas.  As of mid-afternoon Thursday, the huge storm was still pouring rain in many parts of Mississippi and Louisiana, two days after it first made landfall near New Orleans at 6:45 p.m. ET Tuesday. States to the north were bracing to be next along the path of rough weather.

Filene Too many product options are choice overload

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MADISON, Wis. (8/31/12)--Credit unions may better serve their members by promoting a smaller, targeted menu of products and services, according to a new Filene Research Institute report.

The report, The Psychology of Choice Overload, questions the assumption that offering credit union members more choices in the form of ever more products and services is better than offering fewer, more curated choices.

Rather than reducing the number of available options offered, the report suggests credit unions consider promoting a smaller number of options. As a result newer members are less likely to feel overwhelmed by the number of choices. "Sometimes just telling consumers which option is

the most popular is enough to help them make a decision," the report suggests.

Although conventional wisdom suggests that offering more options always benefits consumers, recent research shows consumers experience information and decision overload, and feel more pressure to choose the 'ideal" option.

Sales data obtained from the grocery industry show that a dramatic reduction of assortment size--an average of 54% across most product categories--increased sales by 11%, with about 75% of customers spending more money.

Consumers' reaction to assortment size is a function of their knowledge of features and benefits among different products, according to the report. For this reason, a company might choose to promote a subset of products that would most likely appeal to member/customers while providing options that are competitive or superior to the company's competitors.

The report offers two strategies for making an assortment more appealing to consumers: a best- seller strategy and a customization strategy.

The best-seller strategy involves carrying only the most popular options that are attractive to most target members. Despite its intuitive appeal, this strategy has two drawbacks. First, the needs of consumers with nonmainstream preferences are unlikely to be met. Second, focusing only on the most popular options limits a credit union's ability to differentiate itself from its competitors.

Customization helps companies offer smaller assortments while still offering a fit for different consumer preference. In industries where the degree of commoditization of products is relatively high--as is the case with many financial products--customization is also a means of strategic differentiation, according to the report.

For example, because of their close relationship with their members, many credit unions are in a position to offer payday/alternative loans in a way that benefits both the credit union and the member, the report suggests.

To download the article, use the link.

NCUF seeks nominations for three board seats (08/30/2012)

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MADISON, Wis. (8/31/12)--The National Credit Union Foundation (NCUF) is seeking nominees to take up a trio of open board positions: two credit union executive/director seats, and one credit union system affiliate seat.

Volunteers serve up to three three-year terms on the NCUF Board as long as they are re-nominated by the NCUF Nominations Committee and re-elected by the NCUF Board.

To qualify for the credit union executive or director position, nominees must be executive officers or directors of a credit union. To qualify for the system affiliate position, nominees must be directors or executive officers of a nationwide organization whose main focus is to support credit unions or some element of the credit union movement. Credit unions must also comprise a significant portion of the given organization's ownership or membership.

Qualified candidates interested in applying for the NCUF board seats can click "Volunteer for our Board" from the NCUF homepage for the declaration of candidacy document.

Applications must be received by Oct. 31.

There are currently two incumbents in the system affiliate and at-large seats up for election: Mark Twisdale, senior vice president of human resources at State Employees' CU, Raleigh, N.C., and Stan Hollen, president/CEO of CO-OP Financial Services.  Both members have said they would serve another term if called upon.

The applicant for the remaining board seat would replace Gary Oakland, former president/CEO of BECU, Seattle, Wash. Oakland has retired from his credit union and is leaving the board. The new board member would finish Oakland's current term, which is scheduled to continue until Dec. 31, 2013.

The 13 voting seats on the NCUF Board include representatives of national person credit unions, national organizations serving credit unions, corporate credit unions, state credit union foundations, state leagues and an at-large position.

The NCUF will hold an organizational meeting on Jan. 14 and 15 in Anaheim, Calif. The NCUF has also scheduled a spring/summer meeting for May in Tampa, Fla., and a fall board meeting and planning session in September. The fall meeting is scheduled to be held in Washington, D.C.

CU System briefs (08/30/2012)

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  • RANCHO CUCAMONGA, Calif. (8/31/12)--The Richard Myles Johnson Foundation/CUNA Mutual Golf Tournament, held Aug. 20 in Newport Beach, Calif., raised $33,000 for the state foundation for credit unions in California and Nevada. Nearly 100 players and 14 sponsors attended. Madison, Wis.-based CUNA Mutual Group served as title sponsor. Other major sponsors included CO-OP Financial Services, CUDL, Honda FCU, Samaha &Associates Inc., SchoolsFirst FCU and California League Services Corp. Chairman of the tournament was Marv Jensen, board member of Episcopal Community CU, Los Angeles. Winners of the tournament are Ellen Schultz and Joe Weber of NCCI and Charles Papenfus and Tracy Arroyo of Inland Valley FCU. Three of the winners are pictured here. "Because of the wonderful supporters of this event, we will be able to continue to provide the foundation's new Bite of Reality interactive youth financial education program to teens in California and Nevada," said RMJ Executive Director Tena Lozano.  (Photo provided by the California and Nevada Credit Union Leagues) …
  • COLUMBUS, Ohio (8/31/12)--The 2012 Ohio Credit Union Foundation  (OCUF) Classic attracted more than 170 golfers and 27 sponsors for a day of golf, networking and giving back. They raised more than $30,000 toward the foundation's 2012 fundraising goal of $200,000. "Every dollar raised this year will be used to support credit union financial education and outreach projects in 2013," said Executive Director Becky Hart.  All funds raised will enable the foundation to continue its 14-year tradition of promoting financial independence through credit unions in 2013. OCUF Chair Stan Barnes noted at a breakfast before the group teed off, "Since the beginning of the year, the foundation has granted more than $140,000 to credit unions, including grants for financial education programs for high school students, scholarships for young people with higher education ambitions, professional development for credit union staff and board members, and assistance to credit union members who were financial devastated as a result of the June wind storm." Frost Financial Services served as the lead "Eagle" sponsor for the event …

SECU Foundation state agency team on rehab housing

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RALEIGH, N.C. (8/31/12)--The SECU Foundation has partnered with the North Carolina Housing Finance Agency (NCHFA) to fund two transitional housing projects.

The SECU Foundation partnered with the North Carolina Housing Finance Agency to help fund the conversion of a jail annex into the new "Marvin E. Roberts II Transitional Living Facility," a rehabilitation housing center for men and women recently released from the correctional system.

The foundation, funded solely by members of State Employees' CU (SECU), Raleigh, N.C., provided a 0% construction loan to assist with funding the transformation of the former New Hanover County Jail Annex into the new "Marvin E. Roberts II Transitional Living Facility," a rehabilitation housing center for men and women recently released from the correctional system.

The 46-bed Transitional Living Facility is sponsored by Leading Into New Communities (LINC) Inc., a non-profit organization that provides or coordinates supportive services to clients 18 and older entering the program. LINC offers job and life skills training, job placement and case management and medical and mental health services. 

The SECU Foundation also provided a 0% construction loan to help build the James Street Group Living Dormitories, which serve as transitional housing for individuals recovering from substance abuse. 

The SECU Foundation provided a 0% construction loan help build the James Street Group Living Dormitories, which serve as transitional housing for individuals recovering from substance abuse. (Photos provided by SECU)

Sponsored by the Triangle Residential Options for Substance Abusers (TROSA) Inc., the project includes two new 13-bedroom dormitory buildings located on a 12.5-acre campus in Durham, N.C. The facility will accommodate up to 150 participants in a safe, supportive, and drug-free environment, said the foundation. 

TROSA, a non-profit organization, is a comprehensive two-year residential substance abuse rehabilitation program that moves individuals with severe substance abuse problems

out of the criminal justice system and helps place them into jobs where they can be productive, taxpaying members of the community. 

Among the services TROSA provides are vocational training, adult literacy or General Equivalency Diploma (GED) education, counseling, mentoring, leadership training and aftercare.

Maine league lends biz model expertise to British CUs

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PORTLAND, Maine (8/31/12)--To help meet a growing demand for member services, Association of British Credit Unions Ltd. (ABCUL) Chief Executive Mark Lyonette visited the U.S. last week to learn how a central business model developed for credit unions in Maine could be adapted for the British credit union system.

Association of British Credit Unions Ltd. (ABCUL) Chief Executive Mark Lyonette met with the Maine Credit Union League's Synergent subsidiary last week to learn how a central business model could be adapted in the United Kingdom. From left are John Murphy, Maine Credit Union League and Synergent president/CEO; Brian Branch, World Council of Credit Unions president/CEO; Mark Lyonette, ABCUL chief executive; and Gary Glenn, Synergent senior vice president.
Credit unions in the United Kingdom recently reached the million member milestone, but many institutions remain relatively small and financially restricted in terms of product and service development. As such, ABCUL's member credit unions have petitioned the trade association for a shared business model to centralize data processing and offer more products and services to an even broader population base. A data service bureau also would help reduce the number of third-party service providers the credit unions would otherwise have to contract with separately.

At ABCUL's request, the World Council of Credit Unions (WOCCU) organized Lyonette's visit to Maine last week to learn how Maine Credit Union League's credit union-owned subsidiary, Synergent, has managed a central business model for 41 years.

Originally named the Maine Credit Union League Services Corp., Synergent was founded as a form-ordering service. Within a few years, it established a data processing center to meet the growing needs of Maine credit unions. Today, Synergent provides checking, ATM debit cards, shared branching and direct marketing services for credit unions. Synergent's operations also include writing custom code in response to credit unions' requests for tailored products and services.

Mark Lyonette, ABCUL chief executive, speaks with Roger Sirois, Atlantic Regional FCU president/CEO, about the advantages Atlantic Regional has experienced with a central processing system. (Photos provided by World Council of Credit Unions)
"Many centralized credit union systems achieve efficiencies by offering the same products for all credit unions," said Brian Branch, WOCCU president/CEO, who joined Lyonette in Maine last week.

Branch noted that Maine's core data processing system offers several choices for add-on products that allows credit unions to achieve both efficiency and entrepreneurial innovation in serving members.

Synergent, a credit union service organization, generates $27 million in revenue and $10 million in data processing annually. Its products and services reach about 600,000 members in northern New England, New York and southern Connecticut. The company bills credit unions per member rather than per transaction, and longer contract terms lower the per-member fee.

During his visit, Lyonette met with executives from Evergreen CU in Portland and Atlantic Regional FCU in Brunswick. Atlantic Regional FCU, with 18,300 members and $250 million in assets, began using Synergent's services in 1982. President/CEO Roger Sirois explained how shared branching has helped the credit union reduce expenses so it could keep branch offices closed on Saturdays when members can access services through other credit unions in the network.

Sirois emphasized the importance of the core processing system's flexibility, which he said drives innovation and allows small credit unions to offer a choice of products on par with larger financial institutions. He said that 2011 was the first time walk-in traffic at Atlantic Regional FCU was less than its Web traffic.

John Murphy, president/CEO of the league and Synergent, saw the opportunity to work with World Council to host ABCUL as a chance to help strengthen credit union popularity in the United Kingdom.

"The Maine league, Synergent and Maine's credit unions are committed to sharing information and collaborating with other credit union systems around the world to strengthen credit unions and promote growth globally," Murphy said.

The league and Synergent previously hosted similar visits with officials from the Rwandan credit union movement, Murphy noted.

ASmarterChoice.org logs in quarter million visits

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WASHINGTON  (8/31/12)--More than a quarter million visits have been made through July to the aSmarterChoice.org website developed by the Credit Union National Association (CUNA) and the state leagues to help consumers learn about credit unions and find a credit union to join.

According to statistics from the website gathered by CUNA,  the website received 255,000 visits by 155,000 persons in the first seven months of the year.

What's more, consumers successfully conducted 137,000 searches for credit unions they could join using the site's credit union locator tool during the period. 

CUNA and the state leagues launched aSmarterChoice.org March 2011. The site includes basic information about credit unions, member testimonials, and recent media coverage about credit unions, and has as its centerpiece on online locator tool that enables consumers not only to find a credit union close by, but one that they are eligible to join based on its field of membership. All U.S.credit unions are included in the site's database.

On average, according to the website's manager, Jill Stevenson, aSmarterChoice.org is visited between 5,000 and 7,000 times per week--a level of interest in credit unions that accelerated in the wake of last year's run up to Bank Transfer Day.

Stevenson said that visits to the site had averaged a couple thousand a week last year. However, in September of  2011--when a major bank announced it would impose monthly fees on its debit cards--weekly visits rose dramatically to more than 23,000 in the week following the announcement.

The emergence of Bank Transfer Day, a viral and social media movement that called on consumers fed up with banks to transfer their money to credit unions on a single day, Nov. 5, 2011, had the number of visitors to the site running well above average through October.

The aSmarterChoice.org site saw nearly 70,000 visits on the day before Bank Transfer Day, and 40,000 visits on the day itself. "Since then and into 2012, traffic has continued at a higher pace than what we saw through most of 2011," Stevenson said. "People continue to visit the site by the hundreds daily."

Letter with white powder sent to Obama via Ohio CU

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COLUMBUS, Ohio (8/31/12)--An Ohio credit union received a letter Thursday that was addressed to President Barack Obama and that contained a mysterious white powder.

The letter was sent via mail to the State Highway Patrol FCU, located on Busch Boulevard in Columbus, Ohio (10TV.com Aug. 30). It contained political jargon describing dissatisfaction with the administration, investigators said. 

Investigators deemed the powder was not harmful. Earlier, the employee who opened the letter locked herself in a room to contain the powder to a single area, said the news report. Hazmat crews, which investigate hazardous materials, arrived on the scene at 10:30 a.m.

Officials from the Federal Bureau of Investigation, the Postal Inspector and the Secret Service were on the scene Thursday morning trying to determine who sent the letter.

State Highway Patrol FCU is a $61 million asset credit union.

CUNA closed on Labor Day

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WASHINGTON and MADISON, Wis. (8/31/12)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association will be closed Monday due to the Labor Day holiday.

However, CUNA staff will be at the Democratic National Convention, which will open with family-centered activities on Monday and official activities beginning Tuesday in Charlotte, N.C.  Although News Now won't publish a regular edition on Monday, it will report on the pre-convention activities Monday.  News Now will resume regular publication on Tuesday.

CU halfway to 1M community challenge goal

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TINTON FALLS, N.J. (8/30/12)--United Teletech Financial (UTF) FCU's Million Dollar Community Challenge (MDCC) has surpassed the half-way mark to its $1 million interest savings goal.

The Tinton Falls, N.J.-based credit union hopes to save community members $1 million in interest expense this summer. The program, which runs through Sept. 29, has saved more than $644,000 so far, according to the New Jersey Credit Union League (The Daily Exchange Aug. 29).

Since the inaugural MDCC in 2011, community members have saved more than $2.5 million in interest expense. This year, more than 125 members participated in the challenge.

The program allows members to save in two ways:  the TimeShifter Mortgage loan and the Cut The Card personal loan. The TimeShifter mortgage can reduce mortgage terms, potentially saving the consumer thousands in interest expense. The Cut the Card loan helps individuals consolidate personal or credit card debt at a lower interest rate than offered by many card companies. Its fixed-rate payment plan lowers interest while increasing cash flow.

Also, once the $1 million milestone is reached, UTF will made donations to four local charities. Donations will be based on the percentage of total interest saved, and members can select which charity receives the donation once the loan is closed. The public also can vote for a People's Choice winner online at JerseySaves.org.  The charity receiving the most votes will receive an additional $500 donation.

Isaac stalls while CUs wait it out

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MADISON, Wis. (8/30/12)--The Gulf Coast states soaked Tuesday night and most of Wednesday by Hurricane Isaac weren't reporting any damages yet Tuesday afternoon. Isaac was still stalled over Louisiana and Mississippi and many credit unions in the area were closed or evacuated.

The National Credit Union Administration (NCUA) activated its disaster recovery policy Wednesday. (See related story, "Disaster relief activated by NCUA in Isaac's wake," in today's News Now.)  And about 24 hours after it was given a Category 1 Hurricane status, Isaac was reduced to a Tropical Storm.

Credit unions had not reported losses yet and are expected to beginning today. "We do not have any reported losses as of this time," said Phil Tschudy, media relations manager for CUNA Mutual Group, late Wednesday afternoon. "This is not uncommon since Isaac is still over southern Louisiana and most of the area is still under evacuation orders. If there are damages, we'll likely start hearing about them Thursday, which is when our Property and Casualty Claims Team will be calling Louisiana credit unions.  We have adjusters ready to make site inspections in the New Orleans area once authorities allow us to do so.

Tschudy said CUNA Mutual has begun contacting credit unions in Mississippi. "We continue to track Isaac as it moves into upper Louisiana, Arkansas and Missouri, and we will be contacting credit unions in these areas as needed."

CUNA Mutual would like to hear from credit unions "concerning any problems they are encountering, regardless how small, and about problems other credit unions in their area may be having. Credit unions should call our toll-free emergency number (800-637-2676), which is answered live, 24 hours a day, seven days a week," he said.

At mid-day Wednesday, Louisiana residents were still hunkered down in the southeastern part of the state, where the Louisiana Credit Union League reported that the storm was stalled.  Damage reports from credit unions were unlikely since many in the area were closed for the storm.

"It's too early to tell as the storm appears to be stalling over the southeastern part of our state," said Lacey Hyer, Louisiana league vice president of communications and public relations, in an e-mail to News Now Wednesday afternoon. "There have been many reports of power outages and potential flooding in some areas, but [we're] not sure just yet. The hurricane is still making its way through," she said. 

The league sent out its newsletter, eNews, Wednesday afternoon with an update. The league, which is in the evacuated area, was still closed but it provided resources for credit unions such as disaster preparedness information and league contacts.  NCUA had also asked that affected credit unions contact NCUA's regional office with status updates at 512-342-5600, according to the newsletter.

The League of Southeastern Credit Unions posted names of several credit unions, mostly in Alabama, that remained closed, and had information about disaster preparation and contacts on its website.

The league also posted a list of 17 ways credit unions can help their members through the aftermath of the hurricane.  Some of the suggestions include establishing an emergency fund, waiving a range of fees, offering personal loans, modifying mortgages with a 90-day deferral plan, rewriting loans to spread the waiver period over the life of the loan, waiving ATM fees and increasing the daily ATM limit, setting up a desk in the credit union lobby to provide insurance claim forms, information about hurricane relief, set up mobile ATMs at closed branches, offering emergency bridge loans to small businesses, and more.

In Mississippi, eight credit unions on the Gulf Coast closed at noon on Tuesday, would remain closed through Wednesday, and were expected to reopen today, said Charles Elliott, president/CEO of the Mississippi Credit Union Association.

Highway 90, a major thoroughfare on the Gulf Coast, was closed from the Biloxi Bay Bridge to the Bay St. Louis Bridge, a stretch of about 25 miles, and was not expected to re-open until late Friday--a development that could affect the reopening of credit unions, Elliott told News Now.

As of 1 p.m.  ET Thursday, no credit unions in Mississippi had reported damages. Elliott said he was not expecting heavy damages, if any, given Isaac's 10- to 11-foot storm surge. By comparison, Hurricane Katrina's storm surge in 2005 was 34 feet, Elliott said.

The Gulf Port area is expecting heavy rains, which could cause some damage, Elliott said.

He anticipated most Gulf Port credit unions would re-open today.

As Hurricane Isaac worked its way up to the Gulf Coast this week, CU*South, a credit union service organization in Mobile, Ala., called on its partners in the Midwest and Northwest for backup support. The cuasterisk.com network partners in Michigan, South Dakota, and Washington worked jointly to ensure CU*South could continue to service its credit union clients throughout the eastern U.S.

The client service teams at CU*Answers and CU*NorthWest regularly swap phone coverage for staff meetings or to beef up staffing levels, so providing CU*South clients with seamless customer service required only a few simple phone adjustments. 

As further preparation, rollover and connectivity tests were performed during the weekend prior to the storm to ensure that member data for CU*South's 13 client credit unions would be available, accessible and operational if the storm took a turn and knocked the Mobile site out of commission. Testing confirmed the preparations were complete. CU*NorthWest, which has been sharing operations CU*South counterpart for more than a month, was prepared to take over on a moment's notice if needed.

"I've been supporting credit unions on the Gulf Coast since 1983, and have dealt with direct strikes or near misses from at least 15 hurricanes," said Leo Vaulin, CEO of CU*South.  "Never before have I felt so well-protected by the combination of robust planning and partnership support through our network."

IFox BizI IBankrateI IU.S. NewsI CUs are a choice

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WASHINGTON (8/30/12)--National media continue to point out credit unions as a viable choice for consumers, especially those tired of bank fees. The latest include U.S. News & World Report, Fox Business.com, and Bankrate.com.

Back to school season and banking alternatives for students was the topic of a blog by Joseph Audette, NerdWallet vice president of education and financial literacy, in the U.S. News & World Report (Aug. 28).

"One aspect of returning to school that should not be costly is your banking. Too often, students pick the large nationwide banks for their student checking when better options exist right on campus in the form of university credit unions," Audette wrote.

"Overall, university credit unions charge less for out-of-network ATM transactions and many include several free transactions a month," he said. "By researching on-campus banking options at more than 80 major universities, NerdWallet found that 57% of credit unions surveyed offered at least one free out-of-network transaction per month, compared to only 18% of banks."

He also pointed out that students have an easier time accessing money from university credit unions. The NerdWallet study "found that 72% of university credit unions had branches on campus, while only 54% of banks" did so. Also, credit unions' ATM networks "offer surcharge-free ATM networks that dwarf that of individual banks," Audette wrote.

Some credit unions also offer bonus perks, such as the three cent reward on every debit purchase up to a maximum of $250 per year, offered by Metro CU in Boston, the article said.

Another article, "Six Cutting-Edge Bank Alternatives," which appeared first in Bankrate.com and then in FoxBusiness.com (Aug. 29), names credit unions as one of six alternatives to its question, "Can you do better than a bank?"

"By joining company credit unions, you can save money on banking fees. They offer core services such as savings accounts, auto loans and checking accounts. And some credit unions are branching out to community members to become an alternative to banks," said the article, which said that San Jose, Calif.-based Alliance CU serves more than 400 small employee groups.

Credit Union National Association spokesman Pat Keefe also provided information on the valuable benefits that come with membership.  Use the link for the full article.

Iowa foundation launches Morrow memorial scholarship

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DES MOINES, Iowa (8/30/12)--The Iowa Credit Union Foundation (ICUF)'s annual "Family Involvement Board (FIB) Scholarship" has been renamed the "Warren A. Morrow Memorial Scholarship" in celebration of Morrow's life and achievements in Hispanic culture and the credit union industry.

Morrow was CEO of Coopera Consulting until his death earlier this year.

"Warren dedicated his life and career to helping the underserved, so this name change is extremely fitting," said Marybeth Foster, ICUF executive director. "He valued education and wanted people to have opportunities. He also strongly believed in the credit union movement as the avenue for financial advancement for many."

The scholarship provides $5,750 in awards to six Iowa students through two scholarship programs.

The first is a scholarship for high school seniors graduating in 2013. The high school scholarship competition will award $3,750. The first place prize is $1,500, second place is $1,000, third place is $750, and fourth place is $500.

The second program is a post-high school scholarship, open to any person entering or attending an accredited undergraduate, graduate or vocational program. Two $1,000 scholarships will be awarded in this category.

Applicants must complete the entry form found on foundation's website and are required to answer one question in 500 words or less. This year's essay question is:

"Given the fragile state of our national economy, with record unemployment and deficits, describe how having an emergency savings account is more crucial than ever. How might someone utilize their credit union to focus on saving?"

Judges will base their scores for the essay on originality, clarity, meaningful content, accurate presentation of facts, adherence to contest rules, spelling, grammar and punctuation. The deadline for applications is Feb. 1. Winners will be notified via mail by April.

Pa. foundation approves two fin-lit grants

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HARRISBURG, Pa. (8/30/12)--The Pennsylvania Credit Union Foundation Board recently approved two $8,000 grants to fund financial literacy efforts throughout the state.

A grant to the Pennsylvania Cable Network (PCN) is a cooperative initiative between the Pennsylvania Credit Union Association (PCUA) and the foundation to offer four town hall meetings in 2012 and 2013 on tax preparation, financial management, business start-ups and retirement issues (Life is a Highway Aug. 27).

Through another grant to Voz Latina Central magazine, the PCUA will offer 10 financial literacy "advertorials" in English and Spanish to nearly 130,000 Hispanic readers in 10 central Pennsylvania counties.

Foundation Chairman Ray Brunner praised the board of directors for "expanding credit union financial literacy initiatives from local communities to those which encompass the entire state."

Texas fin-ed initiative expands with NCUF grant

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MADISON, Wis. (8/30/12)--A statewide initiative from the Texas Credit Union Foundation (TCUF) is inspiring Texans to work together to improve the financial well-being of citizens in their communities, from preschool to adulthood.

Foundation FOCUS, a financial education initiative from the Texas Credit Union Foundation, was expanded through a National Credit Union Foundation Financial Education Grant. Here, a group presents techniques and best practices for teaching financial education in schools at the 2012 Foundation FOCUS in-person meeting in February in Dallas. (Photo provided by the National Credit Union Foundation)
The collaborative financial literacy initiative, called Foundation FOCUS, was expanded with the help of a National Credit Union Foundation (NCUF) Financial Education Grant.

"Texas consistently has had one of the lowest average credit scores of any state in the country," said Courtney Moran, TCUF executive director. Texas credit unions and the Texas foundation "see the need and are taking great strides in bringing financial awareness to credit union members and classrooms throughout the state."

The Foundation FOCUS initiative includes training events such as train-the-trainer workshops for Texas credit union staff and a network of professionals to teach and discuss financial literacy concepts to consumers of all ages.

TCUF set a goal of establishing FOCUS as the premier program promoting financial education in Texas by increasing the number of Foundation FOCUS Network members and financial education training sessions throughout the state. The foundation also sought to expand the initiative to include adult financial education in addition to youth.

FOCUS, which was established in 2011, has its roots in TCUF's "Project NEFE," which began in 2007 in response to revised National Endowment for Financial Education (NEFE) High School Financial Planning Program (HSFPP) materials. Project NEFE was a statewide collaborative led by TCUF to bring the accredited HSFPP, along with comprehensive training, to schools across Texas free of charge.

The centerpiece of the initiative is the Foundation FOCUS Network, which is built around credit union professionals, Texas AgriLife Extension agents, educators, state agency representatives, Junior Achievement volunteers and staff, community non-profit organizations, and others interested in financial education. Each member assists with the promotion and delivery of curricula from preschool to retirement through internal and external marketing, training other individuals, and/or hands-on classroom or individual instruction.

The Foundation FOCUS Network includes 447 members--an increase of over 100 members in the previous year.

Over the past year, TCUF and the network have held 14 NEFE Train-the-Trainer workshops, attended by 325 attendees from 51 credit unions, 53 schools and districts, and 59 community organizations. The network also partnered with the Arkansas Credit Union League to conduct a financial education workshop for Arkansas credit unions and teachers.

NCUF grants are made possible by supporters of the foundation and the Community Investment Fund, an award-winning system of investments that help credit unions earn dividends while donating to national and state community development programs.

CUs announce Washington merger Maryland acquisition

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HUNT VALLEY, Md., and BELLINGHAM, Wash. (8/29/12)--Credit unions in Washington State and Maryland have announced mergers and acquisitions.

In Washington, members of Ferndale Refinery CU, a $4.6 million asset credit union in Ferndale, voted to approve a merger into Bellingham-based Industrial Credit Union of Whatcom County, according to a press release. The merger is set to take place Oct. 1 (The Bellingham Herald Aug. 27).

Ferndale Refinery CU's only branch will be closed, and its one employee, CEO Susan Prosser, will join ICU. Ferndale said it is financially strong but as with many small credit unions, it was finding it increasingly difficult to remain compliant with new regulations without increasing expenses significantly. Once the merger is completed, its members will have access to ICU's seven branches and its services, which include online banking, said the newspaper.

In Maryland, the $98 million asset Atlantic Financial FCU, based in Hunt Valley, announced it has acquired ABACO FCU, based in Perry Hall, Md.

The $357,000 asset ABACO served members and their families in petroleum refining manufacturing companies in Baltimore since 1958. It had 108 members.

Seven years later its dand233jand224 vu on Gulf Coast

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MADISON, Wis. (8/29/12)--Seven years after Hurricane Katrina came ashore on Aug. 29, 2005, New Orleans and Gulf Coast credit unions faced the beast again--this time in the form of Hurricane Isaac.

The Category 1 Hurricane Isaac made first landfall near New Orleans at 6:45 p.m. ET Tuesday as a Category 1 hurricane. Category 1 is defined as a storm with winds of at least 74 miles per hour, according to the National Hurricane Center in Miami.

By comparison, Katrina was a Category 3 hurricane that killed more than 1,800 people and displaced 250,000, according to Bloomberg.com (Aug. 28). When the levees broke, 80% of the city and hundreds of credit unions were flooded.

The area got a soaking last night with high winds, flooding and a test of the city's post-Katrina $14.5 billion flood-control systems and improved levees. Storm surge was reported at nearly 10 feet above the normal high-tide levels as early as 9 p.m. Tuesday by the Weather Channel--while most of the hurricane was still off shore.

The slow-moving, massive storm was expected to dump about 20 inches of rain along the coast in southeastern Louisiana, southern Mississippi and Alabama, and the extreme western Florida panhandle during the night Tuesday and early today.

Credit unions and some leagues in four states--Florida, Alabama, Mississippi and Louisiana--reported closures as early as Monday afternoon as their areas prepared for the hurricane while it was still a tropical storm.  Isaac didn't reach hurricane status until about noon Tuesday.

On Tuesday, Florida was dealing mostly with flooding from when the earlier Tropical Storm Isaac passed through.

Credit unions had begun preparing last week and many began closing Monday afternoon or Tuesday morning, staying open as late as possible to meet the cash needs of their members.  By noon Tuesday, more credit unions were added to the lists of closures, especially those in the evacuation areas of Southeast Louisiana and Mississippi and Alabama.

In Pensacola, Fla., eight banks and credit unions closed, including Pen Air FCU and Gulfwinds FCU, reported local newspapers (pnj.com Aug. 28). That area was already saturated with a soaking in June from Tropical Storm Debby.  Businesses and homes in much of South Florida were dealing with power outages in Miami-Dade, Broward and Palm Beach counties, as well as squalls spanning from the hurricane's volatile northeastern edge. Much of South Florida was also under flood and flash-flood watches.

The League of Southeastern Credit Unions, which serves Florida and Alabama, added these closures Tuesday to its earlier list reported by News Now yesterday:

  • Mobile (Ala.) Educators CU, all branches closed, re-opening to be determined (TBD);
  • Alabama Telco CU, Mobile branch, re-opening TBD;
  • The Infirmary FCU, all branches closed until Thursday;
  • America's First FCU, Mobile branch, re-opening TBD;
  • Members First CU, all branches closed until Thursday;
  • Degussa Employees FCU, main office closed until Thursday;
  • Army Aviation Center FCU, all Mobile branches, re-opening expected today; and
  • Florida State Employees FCU, all branches, re-opening TBD.
Staff at the Louisiana Credit Union League, which is closed because it is in an area that was evacuated, is keeping contact with credit unions and advising them to check its website for information. It also has noted the value of shared branching during closures in disasters. In Katrina, shared branching saved the day for many credit unions and their members, providing access to accounts during closures.

Mississippi's Credit Union Association, with offices in Jackson, plans to be open to assist credit unions. Jackson Mayor Harvey Johnson said residents were prepared for heavy rain and strong wind gusts today. The coastal town of Gulfport, Miss., was hard hit during Katrina and expecting large storm surges from Hurricane Isaac.

Even though Isaac isn't expected to pack the wallop that Katrina had, its size means that inland areas can expect especially heavy rains and flooding as the storm moves inland through southern states and into the Ohio River Valley. Credit unions in those areas will be on the alert for flooding and power outages.

CUNA Mutual Group will be in contact with impacted credit unions through its Property and Casualty Disaster Claims Team. Policyholder credit unions with damage claims can contact CUNA Mutual at its toll free emergency number, 800-637-2676. The number is answered live, 24/7.

New 2011 bankruptcy stats show 11 drop in filing

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WASHINGTON (8/29/12)--Thirteen million consumers filed for personal bankruptcy in 2011, an 11% drop in case filings, according to statistics compiled and released Monday by the Administrative Office of the U.S. Courts.

The 2011 statistical report is required by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). It includes statistics on individuals filing for Chapters 7, 11 and 13 bankruptcy relief.

The numbers represent a 23% drop in filer assets and a 25% decrease in filer liabilities. Roughly 28% of the Chapter 13 cases in 2011 were repeat filers who had filed a bankruptcy petition during the previous eight years.

Roughly 70% of those were Chapter 7 bankruptcy filings, down from 71% in 2010, while 30% were Chapter 13 filings, down from 28% in 2010.  One-tenth of 1% of the filings were Chapter 11s.

Consumers sought protection for nearly $221.3 billion of which more than $133.8 billion was in real property and $87.5 billion in personal property, said the report. That compared with $407 billion in 2010 comprising $263.3 billion in real property and nearly $143.8 billion in personal property.

Liabilities totaled $280 billion in 2011, compared with $473.8 billion a year earlier.  Last year's total included more than $177.4 billion in secured claims, nearly $4.7 billion in unsecured claims, and $98.8 billion in unsecured priority claims.

For the full BAPCPA report, use the link.

CU cash mob boosts BBQ restaurants sales 66

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DUBLIN, Ohio (8/29/12)--A cash mob hosted by Central Ohio Chapter of Credit Unions helped a local restaurant increase its single-day sales by 66%.

The cash mob, which helped Gallo's Pit BBQ in Linworth, Ohio, increase its Aug. 16 sales by 66% over the previous Thursday, was part of a year-long initiative by the chapter to boost sales of locally owned businesses and support the Central Ohio economy.

A cash mob is an event in which people are encouraged to descend on a small business and spend money. The chapter said it will host more cash mobs throughout the year and into 2013.

"This type of grassroots effort provides a fun way to engage our credit union members and create social media awareness, aimed at steering the public toward a locally owned and operated establishment," said Jaime Crooks, marketing director for Ohio HealthCare FCU, who helped organize the event." If they are going to spend money somewhere, why not encourage them to do it at a place that directly impacts our community?"

Dakota CUs performing well in 2012

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BISMARCK, N.D. (8/29/12)--Credit unions in North and South Dakotas have performed as well or better than the national averages in asset growth, loan growth, and member growth during the past 12 months, according to the Credit Union Association of the Dakotas (CUAD). 

As of March, North Dakota credit unions saw asset growth of 13.5%, while South Dakota credit unions experienced asset growth of 6.4%.  Both percentages exceed the national average of 4.8%. 

While North Dakota credit unions saw significant loan growth of 12.2%, South Dakota's loan portfolios posted growth of 1.2% over the previous 12 months. 

Both North and South Dakota outpaced the national average in member growth by almost 1%. North Dakota credit unions grew membership by 1.7% during the past year. Membership growth among South Dakota credit unions was 1.4%. The national average was 0.6%, said CUAD.

The positive trends have continued through the first six months of 2012 for the Dakotas' credit unions, CUAD said.  Assets have increased $229.4 million or 4.54%.  Both savings and loans increased by over 4% since December 2011 and credit union memberships continue to grow, increasing by about 5,000 members since the end of last year.

Hostage tells what happened at CU

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LAKEWOOD, Wash. (8/28/12)--It was the quiet moments that struck fear in the mind of Brielle Edwards, one of 12 people held hostage by a gunman in a Washington credit union Saturday, Edwards said Monday.

Police officers shot and critically wounded a man as he attempted to flee Washington State Employees CU, after he held a dozen people hostage at gunpoint, including his estranged wife, for about 45 minutes Saturday afternoon, according to KVAL.com (Aug. 28).

Eldridge and her mother stopped at the credit union as they were running errands. As she sat in a cubicle in the back of the branch, Eldridge heard a commotion up front. A man and a woman were arguing.

Soon Eldridge, her mom and the credit union representative working with them dropped to the floor out of concern for their safety, she told the television station.

Her fear was heightened during the quiet times because she didn't know the location of the gunman, she said. During those times, she could hear the police outside the credit union branch. At one point she made eye contact with a SWAT officer.

But the scariest moment came when she heard two pops. She thought someone had been shot, but she couldn't be sure who, she told the station.

It turned out that two policemen had each fired a single shot, disabling the gunman.

Moments later, police entered the building and identified themselves.

Eldridge said she is grateful how the situation ended, but has had trouble sleeping and keeps reliving the incident in her head.

The gunman remained in critical condition Monday.

Grant to CU will expand services to tribal members

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DEVILS LAKE, N.D. (8/29/12)--Citizens Community CU (CCCU), Devils Lake, N.D., will use its $1.5 million financial assistance award from the U.S. Treasury Department's Community Development Financial Institutions (CDFI) Fund to expand affordable and equitable financial services to the Native American populations it has traditionally served.

"With this grant, we will be able to provide the direct financing of housing through Tribal Housing Agencies, and direct loans to individual tribal members," said Darwin Brokke, the CCCU's president. "We will be able to help assist tribal agencies by providing the credit they need to implement their own single-family housing plans."

One local reservation has an immediate waiting list of roughly 125 families, with 525 families identified as needing housing in the future, Brokke said.

Because tribal income is one-half of the statewide average and poverty on local reservations is three to four times more prevalent than in the surrounding communities, families must wait for up to 10 years for affordable housing. With the award, CCCU can provide several hundred new homes, Brokke said.

The Treasury recently announced more than $186 million in awards to 210 organizations serving low-income communities. That total, provided through the CDFI Fund's Community Development Financial Institutions Program and the Native American CDFI Assistance Program (NACA Program), is the largest amount awarded in CDFI Fund's history. Since its creation, the fund has awarded more than $1.4 billion to community development organizations and financial institutions.

CU Breakthrough's consultants assisted the credit union in preparing the necessary applications. CU Breakthrough, the fee-based consulting arm of the National Federation of Community Development Credit Unions, specializes in helping credit unions expand offerings to underserved communities through a variety of services.

Employee kidnapped taken to CU for robbery

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FORT WAYNE, Ind. (8/29/12)--A Fort Wayne, Ind., credit union employee was allegedly kidnapped from her home Monday evening and taken to the credit union, where suspects forced her to provide them access to cash before leaving the scene with her car.

The employee was reportedly ambushed, blindfolded and restrained inside her home by two black men, who took the employee and her car to Freedom Financial CU (indiananewscenter.com Aug. 28). After forcing her inside and gaining access to cash, the suspects fled in the woman's car, leaving her at the credit union.

Her car was recovered later in Fort Wayne.

She was not reported injured.

Annaloro NWCUA CEO to retire in October

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FEDERAL WAY, Wash., and BEAVERTON, Ore. (8/29/12)--John Annaloro, CEO of the Northwest Credit Union Association (NWCUA), will retire on Oct. 2, NWCUA announced Tuesday. 

NWCUA's change of leadership will occur in conjunction with its Convention and Annual Business Meeting in Vancouver, Wash.  A reception honoring Annaloro's accomplishments will be held on the evening of Oct. 4 during the convention.

Annaloro has served as CEO of the organization for 15 years, from 1997 to 2010 with the Washington Credit Union League and from 2010 to the present with NWCUA. Prior to moving to Washington, he was a senior executive for the California and Nevada Credit Union Leagues.

"John has consistently championed advocacy's vital importance to credit union success, implementing programs that are among the strongest in the nation and with a focus that has resulted in Washington and Oregon having two of the most progressive charters in the nation," said Bill Cheney, president/CEO of the Credit Union National Association (CUNA).

"Further, among many other accomplishments, he has shown outstanding leadership in championing financial literacy, most notably through his visionary embrace and early financial support for the Public Broadcasting System's BizKid$ program, which has gone on to become one of the movement's signature financial literacy initiatives, now under the auspices of the National Credit Union Foundation," Cheney said.

"And, on top of all of that, as a league executive and president, he has demonstrated superior results both organizationally and financially, highlighted by his personal engagement and essential role in the historic vote by the Washington and Oregon credit union leagues to merge and become the Northwest Credit Union Association, " he added.

Annaloro was the Washington league's sixth executive officer and the first CEO of NWCUA, the product of a merger between the Washington league and the Credit Union Association of Oregon. It now serves nearly 200 credit unions.

Known as a promoter of aggressive and effective government affairs programming, he has earned numerous awards, including the Eagle Award from the American Association of Credit Union Leagues for his outstanding record of achievement as a system leader.  Among his other awards are:

  • ASAE National Award for Outstanding Governmental Affairs Programs;
  • The Western CUNA Management School Outstanding Graduate; and
  • Co-recipient of the National Credit Union Foundation's Herb Wegner Memorial Award for the PBS television series, "BizKid$," which was launched in Seattle with credit union funding.
"I am honored to have the opportunity to work with and get to know John over the past few years," said NWCUA Board Chairman Bill Anderson. "His focused and agile leadership he has put in place is the very foundation that has made this organization--and indeed, our industry--such a success."

Under his watch, Northwest credit unions gained national influence, working with CUNA to promote legislation, membership awareness and other initiatives improving the operating environment for the financial institutions.

"John is a thought leader in the credit union movement. He is usually months if not years ahead of everyone else," said Dan Mica, former CUNA CEO. "John spared no effort advancing the credit union charter. He clearly established Washington State as what I would call a 'soldier on the ground,' taking critical issues door-to-door to the people. There is no way a national organization such as CUNA can advocate alone."

Annaloro also was a leader in advocating for the passage of the Credit Union Membership Act of 1998, which significantly opened credit union membership eligibility to consumers.

"Serving the credit union system has been an honor in every way," said Annaloro. "I appreciate the trust vested in association executives by our credit unions. These appointments are noble endeavors, worthy of anyone's best efforts to provide a brilliant future. I will miss many friendships, as well as the staff, board members and past chairmen who have been my partners."

Annaloro will be succeeded as CEO by Troy Stang, NWCUA's current president.

NEW Annaloro to retire as NWCUA CEO

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FEDERAL WAY, Wash., and BEAVERTON, Ore. (FILED 2:25 p.m. CT 8/28/12)--John Annaloro, CEO of the Northwest Credit Union Association (NWCUA), will retire on Oct. 2, NWCUA announced today. 

NWCUA's change of leadership will occur in conjunction with NWCUA's Convention and Annual Business Meeting in Vancouver, Wash.  A reception honoring Annaloro's accomplishments will be held Oct. 4 during the proceedings.

Annaloro has served as CEO of the organization for 15 years, from 1997 to 2010 with the Washington Credit Union League and from 2010 to the present with NWCUA. Prior to moving to Washington, he was a senior executive for the California and Nevada Credit Union Leagues.

"John has consistently championed advocacy's vital importance to credit union success, implementing programs that are among the strongest in the nation and with a focus that has resulted in Washington and Oregon having two of the most progressive charters in the nation," said Bill Cheney, president/CEO of the Credit Union National Association (CUNA).

"Further, among many other accomplishments, he has shown outstanding leadership in championing financial literacy, most notably through his visionary embrace and early financial support for the Public Broadcasting System's BizKid$ program, which has gone on to become one of the movement's signature financial literacy initiatives, now under the auspices of the National Credit Union Foundation," Cheney said.

"And, on top of all of that, as a league executive and president, he has demonstrated superior results both organizationally and financially, highlighted by his personal engagement and essential role in the historic vote by the Washington and Oregon credit union leagues to merge and become the Northwest Credit Union Association, " he added.

Annaloro was the Washington league's sixth executive officer and the first CEO of NWCUA, the product of a merger between the Washington league and the Credit Union Association of Oregon that now serves nearly 200 credit unions. Known as a promoter of aggressive and effective government affairs programming, he has earned numerous awards, including the Eagle Award from the American Association of Credit Union Leagues (AACUL) for his outstanding record of achievement as a system leader.  Among his other awards are:

  • ASAE National Award for Outstanding Governmental Affairs Programs;
  • The Western CUNA Management School Outstanding Graduate; and
  • Co-recipient of the National Credit Union Foundation's Herb Wegner Memorial Award for the PBS television series, "BizKid$," which was launched in Seattle with credit union funding.
"I am honored to have the opportunity to work with and get to know John over the past few years," said NWCUA Board Chairman Bill Anderson. "His focused and agile leadership he has put in place the very foundation that has made this organization--and indeed, our industry--such a success."

Annaloro will be succeeded as CEO by Troy Stang, the NWCUA's current president.

Minn. foundation honors Pierce with CU Builder Award

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ST. PAUL, Minn. (8/28/12)--James Pierce, former volunteer at Postal CU, Woodbury, Minn., has been honored with the Minnesota Credit Union Foundation's Credit Union Builder Award.

The award recognizes individuals who have dedicated time and energy to building the credit union movement. Individuals are nominated for the award by credit unions and organizations that make contributions in honor of or in memory of a significant individual who has been instrumental in their success.

Pierce was a strong credit union supporter who gave his time and resources to the credit union movement, said the foundation. He was first elected in 1976 to the Credit Committee of St. Paul Postal Employees CU and served as its chairman from 1977 to 1978. In 1982, he was elected to the credit union's board of directors. He became board secretary in 1988. He retired from the board in 2002 after more than two decades of volunteer service.

In 1995, Pierce was named the Minnesota League of Credit Unions' (now Minnesota Credit Union Network) first "Outstanding Credit Union Volunteer of the Year" award recipient. 

He joins 12 other individuals honored in the past five years with the Credit Union Builder Award.  His name and the name of the donating credit union is permanently displayed in the network's lobby.

Gulf Coast leagues CUs prepare for hurricane

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MADISON, Wis. (8/28/12)--Leagues and credit unions in several Gulf Coast states were busy Monday preparing for Hurricane Isaac, set to hit landfall late tonight as a possible Category 1 hurricane on a path similar to that of Katrina in 2005. However, it is expected to deliver less punch.

Hurricane warnings for tonight range from Destin, Fla., to west Louisiana, with landfall expected near New Orleans. Leagues in Florida, Alabama, Mississippi and Louisiana were already taking precautions as was CUNA Mutual Group, which insures many credit unions in the hurricane's projected path.

On Monday, Tropical Storm Isaac moved west of Tampa, Fla., and impacted the area mostly with rain, delaying activities at the Republican National Convention there (See related story, "RNC delays don't slow CU convention work" in today's News Now)

"We have not heard of any damage done to credit unions so far," said Mike Bridges, vice president of marketing and communications with the League of Southeastern Credit Unions (LSCU), which serves credit unions in two states along Isaac's projected path--Florida and Alabama. "We have been sending daily and sometimes twice a day e-mails to our credit unions about Isaac, its path and to make preparations early," he told News Now.

LSCU's website lists closures and includes information such as what credit unions should do before a storm hits.

Pen Air FCU, based in Pensacola, Fla., said all branches would close today at noon and all are scheduled to reopen for regular business hours on Thursday, provided there was no damage from the storm.

Tropical FCU's West Palm Beach, North Dade and Fort Lauderdale branches closed at 3 p.m. Monday and will remain closed until further notice, said the league site.

LSCU reported several closings Monday. Alabama CU's Orange Beach and Gulf Shores locations will be closed until further notice. The region is under a mandatory evacuation by the governor. Tampa Bay FCU's shared service location, Sarasota Municipal Employees CU, Pinellas FCU's Pasco office, and Grow Financial FCU's Lakewood Ranch and Bradenton branches all expected to open today.

Of particular interest is how well the New Orleans area, which bore the brunt of Hurricane Katrina and broken levees, will fare. Much of the area is under mandatory evacuation.

"A few of our credit unions located in the Greater New Orleans and surrounding areas plan on closing Tuesday and reopening on late Wednesday or possible Thursday morning, depending on staff availability and potential damages," said Lacey Hyer, vice president of  communications and public relations at the Louisiana Credit Union League.

The league closed its office Monday and will reopen as soon as possible, Hyer told News Now. "Our office is located in the southeastern part of the state, and many mandatory evacuations have been put in place. The league decided to close so that staff could plan properly and evacuate their families. However, league staff will be working around the clock and will continue to communicate with credit unions," she added.

The Louisiana league is driving credit unions to its website, www.lcul.com, for updates, league contacts, shared branching information, disaster preparedness resources and more, she added.  "It is clear that shared branching continues to play a pivotal role in disaster preparedness for our credit unions."

A number of Louisiana credit unions have announced closures for either today and Wednesday, or closing later this afternoon and Wednesday. They include:

  • Coastland FCU;
  • Eagle FCU;
  • Fleur De Lis FCU;
  • Jefferson Financial CU;
  • GNO FCU;
  • Internal Revenue FCU;
  • LES FCU;
  • Louisiana FCU;
  • Louisiana USA FCU;
  • NAS JRB CU;
  • Neighbors FCU;
  • New Orleans Firemen's FCU;
  • Pelican State CU, Shell NO FCU; and
  • Tulane Loyola FCU.
In Mississippi, "the Mississippi Credit Union Association has been in communication with our members to exchange emergency contact information as well as learn their plans and preparation," said MSCUA President/CEO Charles Elliott.

"Mississippi credit unions are taking this storm seriously, with most coastal area credit unions already confirming plans for limited hours or closings on Tuesday and Wednesday," he told News Now Monday afternoon.  "Other credit unions in the state are being mindful of the potential for power outages, heavy rainfall and tornadic activity that could result from the storm." He noted MSCUA "will remain open and is prepared to provide or coordinate any resources our members may need."

CUNA Mutual Group also was preparing to assist credit unions with the aftermath of Isaac.  "CUNA Mutual Group has developed a comprehensive and coordinated process for responding to disasters through its Property and Casualty Disaster Claims Team, which has been activated to assist credit unions threatened by Tropical Storm/Hurricane Isaac," said Phil Tschudy, media relations manager at CUNA Mutual.

"Isaac is currently located in the Gulf of Mexico, just west of Tampa," he told News Now Monday afternoon. "All forecast models have this storm heading toward the Louisiana coastline, which would be first major storm in that area since Hurricane Katrina in 2005.  Isaac is expected to grow into a level one hurricane sometime later today and strike near or just west of New Orleans late Tuesday.  

"As a precaution, CUNA Mutual Group has contacted the state leagues and potentially affected policyholder credit unions located within 10 miles of the Louisiana/Mississippi coast," Tschudy said.

"We advised them we will continue to monitor the storm and have asked them to phone us using our toll-free emergency number (800-637-2676) if their credit union sustains any damages or if they are aware of any other credit unions that have been damaged. That number is answered live, 24/7. Once the storm passes, we will follow up with credit unions we believe may have been impacted," he said.

CU System briefs (08/27/2012)

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  • ST. GEORGE, Utah (8/28/12)--A federal grand jury in Utah indicted Christopher Harris, formerly of St. George, Utah, on fraud, bribery and money lending charges for his alleged role in a rigged contracting scheme that bilked the U.S. Army out of $20 million during a security transfer in Afghanistan. The scheme was revealed after Harris allegedly made seven withdrawals of $9,000 each from May 20098 to February 2010 from a St. George credit union, according to the Salt Lake Tribune (Aug. 24). The amounts were just under the $10,000 limit that triggers a report to the Internal Revenue Service. Harris was arrested on July 31 in Salt Lake City. Harris and co-defendants David Young of Florida and Michael Taylor of Boston are accused of allegedly used protected information to land a contract to manage supplies and equipment and to train Afghan commando troops. The charges also name American International Security Corp. of Boston, Taylor's military contracting company ...
  • SANTA ROSA, Calif. (8/28/12)--Two men have been arrested in connection with the Thursday afternoon robbery of Santa Rosa, Calif.-based Redwood CU's Point Arena branch, according to the Mendocino County (Calif.) Sheriff's Office (Ukiah Daily Journal Aug. 25). The office said that two men, one with a revolver, entered the credit union before 1 p.m. and demanded that the tellers empty their cash drawers. The two allegedly threated harm if employees or members tried to leave the credit union. The men fled with about $50,000 in a Jeep. Witnesses provided license number to police. After a chase, Raymon Ojeda, 39, of Pico Rivera, and Fred Orlando, 55, Magalia, were arrested on suspicion of armed robbery and conspiracy. Authorities recovered the cash and a revolver …
  • WICHITA, Kan. (8/28/12)--The Meritrust CU board of directors announced that Byron Stout IV, vice president of human resources, has been appointed interim president/CEO of the Wichita, Kan.-based credit union. His new role will be effective Sept. 28, upon the resignation of current Meritrust President/CEO Bob Corwin. Corwin will leave to become president/CEO of Advantis CU in Portland, Ore. Stout has been employed with $830 million asset Meritrust for the past five years, specializing in employment law, corporate wellness, training and development, corporate culture, and employee compensation and benefits. Before arriving at Meritrust, he worked 12 years in HR management for Love Box Co. …
  • SAGINAW, Mich. (8/28/12)--Catholic FCU, based in Saginaw, Mich., has lost its longest-serving volunteer with the death of Donald Gallant on Aug. 19. Gallant served on Catholic Federal's board of directors from Nov. 7, 1969, until his death. During that time he has served as chairman, vice chairman, treasurer and secretary. In 2005, the credit union recognized all his years of service by naming its Board Room in his honor. Funeral services were held Friday at St. Stephen's Catholic Church in Saginaw …

Police shoot man who took 12 hostages at CU

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LAKEWOOD, Wash. (8/28/12)--Police officers shot and critically wounded a man as he attempted to flee after he held a dozen people hostage, including his estranged wife, at gunpoint inside a Washington state credit union Saturday.

Lakewood, Wash. police were dispatched to a Washington State Employees CU branch about noon on Saturday after receiving a report of a man with a gun holding 12 hostages.

Officers surrounded the building and a crisis negotiator unsuccessfully attempted to communicate with the suspect.

After about 45 minutes, the suspect allegedly walked into a glass enclosed foyer holding his wife at gunpoint. Fearing for the safety of the hostages, two officers fired one round each, disabling the suspect (The News Tribune Aug. 27).

After apprehending him, officers secured the premises. He was transported to Tacoma General Hospital, where he is listed in critical condition.

The suspect is a 48-year-old man from Tacoma, Wash. He and his wife were married for more than 15 years and were recently separated with a history of domestic violence, according to Lakewood police.

The man allegedly met his wife at the credit union to resolve financial matters. Once inside the credit union, he allegedly grabbed his wife and pulled out a semi-automatic weapon (Komo News Aug. 27).

MWCUA names Maxwell Herring Desjardins winners

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PHOENIX (8/28/12)--The Mountain West Credit Union Association recognized Arizona and Colorado credit unions for their work in social responsibility, philosophy, and financial education.

The Dora Maxwell Social Responsibility Recognition Award Program honors credit unions for their involvement in community projects and activities.

The Louise Herring Philosophy-in-Action Member Service Award honors credit unions for their practical application of the people-helping-people philosophy.

The Desjardins Youth/Adult Financial Education Award recognizes leadership within the credit union movement on behalf of youth/adult financial literacy.

In Colorado, Space Age FCU, Aurora, earned a first-place Dora Maxwell Award in the $100 million to $200 million asset category for its Box Tops for Lowry Elementary School fundraising program.

Boulder (Colo.) Valley CU earned a first-place Louise Herring Philosophy in Action Award in the $200 million to $500 million category for its work with Future Business Leaders of America Distributive Education Clubs of America.

Arapahoe CU, Centennial, Colo., received a first-place Desjardins Youth Financial Education Award in the $50 million to $100 million category.  This is the fourth consecutive year Arapahoe CU has been recognized for its national award-winning Seeds for Financial Success program. 

Among Arizona credit unions, Desert Schools FCU, Phoenix, received first-place recognition in Dora Maxell, Louise Herring and Desjardin Youth and Adult Awards in the $1 billion plus category.  Desert Schools' word-of-mouth efforts reached more than 15,441 students up to grade 12 and 207 adults in the community.

First CU, Chandler, Ariz., earned a first-place Dora Maxwell Award in the $200 million to $500 million asset category. First CU's partnership with the local elementary school, Aguilar Elementary School, and its Homework Scholarship Program was recognized.

TruWest CU, Tempe, Ariz., received a first-place Dora Maxwell Award in the $500 million to $1billion asset category for its annual diaper drive supporting St. Mary's Food Bank Alliance. Pima FCU, Tucson, Ariz., received a first-place Desjardins Youth Award in the $150 million to $500 million asset category for its youth financial literacy curriculum, focusing on age-specific features, rewards and goals. 

Honorees will compete with other credit unions for national-level awards presented by the Credit Union National Association.

NCUF grantees fin. coaching part of bigger picture

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CHELSEA, Mass. (8/28/12)--Metro CU, Chelsea, Mass., is partnering with a local nonprofit organization to help low-income households establish a path to financial stability and mobility.

Metro CU--which received a $40,000 Financial Education Grant from the National Credit Union Foundation--is partnering with Chelsea Neighborhood Developers to develop and implement a new Family Economic Center.

Chelsea, located north of Boston, with a population of about 40,000, has one of the largest concentrations of working poor in Massachusetts. About 59% of households are low-income.

Metro CU offers financial services to center clients, provides materials and teachers for financial education classes, and volunteers its staff as financial coaches to provide technical assistance to local residents working to repair their credit, to own a home or build their assets.

As part of the program Metro CU will use the Credit Union National Association's financial counseling and training program.

Coaching is a critical element of the program, called Connect. Families are paired with life coaches who work with participants one-on-one to solve problems and develop habits that lead to financial stability (bostonglobe.com Aug. 27).

It's a mentoring approach inspired by Weight Watchers, said the Boston Globe. Many of the women in the program work more than one job while caring for children. Keeping a financial regimen is difficult with their busy schedules. Coaches hold them accountable.

But coaches offer more than budgeting advice. Rene Brimmage, 48, was living on disability payments when she enrolled in a financial management class at the center three years ago. Her coach, Carol Rijo, helped her find a job as a cleaner at Boston Sports Club. Brimmage soon earned a promotion to the front desk. She eventually moved on to become a full-time personal care assistant working with disabled children.

The U.S. Department of Labor recently recently awarded Chelsea Neighborhood Developers a $3 million grant, which will help the nonprofit increase the number of people it serves --to 4,000 a year, from 900.

CUSoup event provides micro grants for startups

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LANSING, Mich. (8/28/12)--A Michigan Credit Union Foundation Community Reinvestment Initiative Grant and support from a Michigan credit union will help a local entrepreneur build a play center for children with autism.

From left, Mary Killian, Shell Jones and Chimena Nelson of Play Place for Autistic Children were winners of Christian Financial CU's 2012 CU@Soup business pitching competition. Jones received $1,400 in startup funds for the project, including a $1,000 grant from the Michigan Credit Union Foundation. (Photo provided by the Michigan Credit Union League.)
Budding entrepreneurs pitched their business plans at Christian Financial CU's (CFCU) second annual CU@Soup event, said the Michigan Credit Union League (Michigan Monitor Aug. 27).

CU@Soup is a community dinner hosted by Christian Financial CU that provides community members a chance to start or expand their businesses. The winning pitch received a $1,000 MCUF micro-grant plus the proceeds from the event.

CFCU selected three finalists from the field of applicants, and attendees of the CU@Soup event voted for their favorite business plan.

Shell Jones, who plans to open the Play Place for Autistic Children, presented the winning pitch.   She earned $1,400 to open the facility.

Jones calls her future business "a Chuck E. Cheese for special needs kids," and she said she hopes to offer a therapeutic play space to promote emotional, social and cognitive development. The space would include a theater, a laser light chalkboard room, a cyber café, and a party area.

Jones plans to open her business next spring.

The Credit Union National Association (CUNA) and credit unions are urging 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 business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

Student loans are exception to declining delinquencies

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ATLANTA (8/27/12)--Credit unions will be happy to learn that delinquency rates in the nation's home and auto loans and credit cards saw double-digit declines from July 2011 to July 2012. But those who offer student loans should be alert to student loan delinquencies and write-offs, which  increased significantly, says a new report.

According to Equifax's monthly National Consumer Credit Trends Report for July:

  • Auto loan 60-day plus delinquency rates dropped 35%;
  • Consumer finance 60-day plus delinquency rates declined 23%;
  • Bank credit card 60-day plus delinquency rates decreased 21%;
  • First mortgage severe derogatory rates--those primarily loans transitioning to real estate owned (REO) status--declined 17%;
  • First mortgage 30-day plus delinquency rates fell 15%; and
  • Home equity revolving 30-day plus delinquency rates slipped 7%.
However, write-offs for student loans rose more than 29% from June to July and 60-day delinquency rates for these loans increased more than 14% from July 2011 to 2012. During that 12 months, student loan balances rose $58.5 billion.

The number of student loans has risen nearly 24%, to 116 million loans in July from 89 million loans in July 2011.

At $9.3 billion, student loan write-offs year-to-date through July are 10% higher than the $8.4 billion a year ago. These loans' severe derogatory balances--the major component of write-offs--year-to-date through July totaled $7.3 billion or 14% higher than the $6.3 billion for the period a year ago.

"Student loans is one area of lending not affected by tighter underwriting standards since the start of the recession," said Equifax Chief Economist Amy Crews Cutts. "The investment in higher education pays off over a person's lifetime, while the tuition cost has to be paid up-front, leading to big demand for student loans.

"Unfortunately, the current job market has not been kind to new graduates and their student loans start to come due once they graduate--if they don't have a job by the time the first installment is due, they can find themselves in quite a jam," Crews Cutts said.

Equifax also noted new credit increased 13% to $348 billion in May 2012 from $305 billion in May 2011.  Bank credit cards rose 21%--to $72.9 billion from $58.1 billion from May 2011.  Consumers continued to improve their credit management through making higher monthly payments on card accounts and refinancing mortgages at lower rates, said Equifax. Growth in total credit is consistent with the overall slow-but-steady improvement in the economy, said Crews Cutts.

Credit unions' 60-day plus delinquencies for all loans were 1.44% of total loans in March, the latest data available, according to the Credit Union National Association's Credit Union Profile  for First Quarter 2012. Net chargeoffs to average loans were 0.79%. Both figures are down from 2011, at 1.60% and 0.91%, respectively.

Canadas CUs ranked No. 1 in service for eighth year

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TORONTO (8/27/12)--Canadian credit unions again ranked No. 1 in overall customer service excellence among all the financial institutions in the country, according to the 2012 Ipsos Best Banking Awards.

Credit unions also took sole honors in two other categories: Branch Service Excellence and Values My Business (Canada NewsWire Aug. 23).

"For over a hundred years, Canadian credit unions have met the personal and business financial needs of their members by focusing on what they believe is most important--putting their members' needs first, and treating them as individuals," explained David Phillips, president/CEO, Credit Union Central of Canada.

"While innovative ideas, products and services are an integral component of our co-operative system, Canadian credit unions and caisses populaires [Quebec's credit unions] never lose sight of what is most important: our dedication to meeting the individual needs of our over five million members," Phillips added.

Survey results indicated that credit unions took sole honors in Branch Service Excellence for the eighth year in a row and Values My Business for the fifth year in a row. They also tied for first place among all financial institutions in two other categories: Financial Planning & Advice and Telephone Banking Excellence.

Tower FCU members save big with HARP

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LAUREL, Md. (8/27/12)--Tower FCU in Laurel, Md., is helping members who are in trouble with their mortgages to refinance their homes at today's historically low interest rates--saving them thousands of dollars--through the federal government's Home Affordable Refinance Program (HARP).

It's a strategy that's paying off--for the members and for Tower, said the $2.37 billion asset credit union. To date, Tower has amassed more than  $70 million in HARP applications, including those pending and ones that have closed. 

"The intention of HARP was to help people who are current on their mortgage payments, but do not qualify for a traditional refinance due to a significant loss in their home's value, or who have little or no equity, to refinance and take advantage of lower interest rates," said Barry Stricklin, Tower's vice president of real estate lending. Borrowers may be eligible for HARP if their loan was sold to Fannie Mae or Freddie Mac before June 1, 2009.

Prior to the rollout of the second phase of HARP in March, Tower reached out to its members. "We wanted to take a proactive approach," said Martin Breland, Tower president/CEO. "We assumed many of our members were not aware of the new program and didn't know that they may qualify for a refinance even though their homes had lost value."

The results have been dramatic, Breland said. Since March, more than a quarter of Tower's mortgage refinance applications have been HARP loans.

Stricklin said the average monthly savings for those who refinanced through HARP is $425, or more than $5,000 annually. Some are homeowners on a fixed income. "Several members are saving over $700 per month, with one saving $979 a month--almost $12,000 per year. That's obviously life changing," he said.

While other lenders offer refinancing through HARP, Tower's program is different, Strickland noted. For instance, some lenders have self-imposed caps on loan-to-value and debt-to-income ratios, and others charge higher fees for HARP refinances than for conventional ones. Tower does neither. Many offer HARP only to people who already have a mortgage with them. Tower does not require that. The credit union also allows members with a home equity line of credit or home equity loan to refinance through HARP, if eligible. 

To get the word out to members about HARP, Tower sent a series of mailings to those identified as good candidates for the program, based on when they closed their loan and house values in the areas where they live. The mailings included members who had mortgages with Tower and those with mortgages from other lenders.

Stricklin said he immediately knew they had struck a chord with members. "When the first mailing hit, our real estate lending department was inundated with calls," he said. "Some members who called didn't qualify for HARP, but were still able to refinance their homes with Tower at a lower rate using conventional programs.

"The major part of the current HARP is that there is no maximum cap on the loan-to-value requirement for refinancing, as was the case with the previous version," Stricklin added. "So even if a home has lost significant value due to the decline in the housing market, homeowners may still be able to refinance at a lower rate."

In many cases an appraisal is not required, Stricklin said.

CUANY taps Sievewright for economic forum

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ALBANY, N.Y. (8/27/12)--The Credit Union Association of New York has tapped Mark Sievewright as keynoter for its first Economic Forum, to be held Nov. 1-2 in Albany, N.Y.

The event, which is open to attendees from multiple states, aims to provide credit union leaders with information on business strategy, economics, investing and more, the association said. 

Sievewright, who is president of Credit Union Solutions at Fiserv, will speak on "Credit Unions--Staying Relevant, Becoming Prevalent: A Futuristic View of the Credit Union Industry and its Potential," said the association.

A transformation is underway in the U.S. financial services industry that will have a dramatic effect on how credit unions do business, how they strategize about their futures and how they collaborate around products, service and information, Sievewright says. During his presentation, he will highlight industry changes, their implications for credit union leaders and the strategies it will take to remain relevant and become prevalent.

Sievewright has 30 years of financial services industry experience. He has held senior leadership roles at HSBC in London and MasterCard International in Brussels, and served as president/CEO of Payment Systems Inc. and of the TowerGroup, a technology research and advisory firm for the financial services industry.

Deadline for registrations is Oct. 18, with early bird registration due Sept. 20.

Nebraska members save 1.1M in Save to Win

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OMAHA, Neb. (8/27/12)--Nebraska credit union members have saved more than $1 million dollars since state credit unions initiated the Save-to-Win program seven months ago.

The Save-to-Win program was launched in January to encourage financial fitness and savings habits by rewarding members for savings. Members have saved about $1,123,880--or $857.27 per account--with more than 121,000 eligible Nebraska credit union members participating. 

The Save-to-Win accounts are 12-month savings certificate accounts that allow for additional deposits. Prizes, a competitive interest rate and small deposit requirements are incentives for the program. With every $25 deposited, members qualify for a chance to win a grand prize of $25,000. Monthly cash prizes are also awarded.

Half of Nebraskans have little to no savings, with 32% considering themselves "asset poor," said the Nebraska Credit Union League.

"The number of Nebraskans who are financially unfit, who are living paycheck to paycheck is quite alarming," said Scott Sullivan, league president/CEO. "We designed the Save-to-Win program to give credit union members an opportunity to improve their financial situations with a fun and easy savings program."

Nebraska is one of five states approved to coordinate the Save-to-Win Program and one of two states offering it to members. Michigan was the first to initiate the program in 2009 with eight participating credit unions. The first year, members saved an average of $734 per account. In 2010, 36 credit unions participated, including seven of the original eight. The program continues to thrive with more than 16,400 members at 43 credits unions participating in Michigan, said the league.

Eighteen new innovators join Filenes i3

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MADISON, Wis. (8/27/12)--The Filene Research Institute has selected 18 credit union executives to join the institute's 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, participate in semi-annual meetings arranged by Filene, and be responsible for piloting new ideas at their credit unions. Filene received more than 70 applications from credit union executives.

"While the struggles of consumers and financial institutions are all too real, this environment is perfect for innovation," said George Hofheimer, Filene's chief research and innovation officer. "We're confident that this new group of i3ers has the skills, passion, and grit to transform the lives of consumers through credit unions."

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 have improved the way credit unions provide financial guidance to their membership. Credit unions can learn more about all these ideas by e-mailing innovation@filene.org.

The newest i³ members are:

  • Megan Armstrong, manager, member services, Saratoga's Community FCU, Saratoga Springs, N.Y.;
  • William Azaroff, director, business and community development, Vancity, Vancouver, B.C., Canada ;
  • Brad Barnes, vice president and chief financial officer, Air Academy FCU, Colorado Springs, Colo.;
  • Kayce Bel, chief operating officer, Alabama CU, Tuscaloosa, Ala.;
  • Marquis Boochee, vice president, eStrategy and innovation, Xceed Financial FCU, El Segundo, Calif.;
  • Danielle Brehmer, vice president, marketing, Lake Trust CU, Lansing, Mich.;
  • Cindy Brucato, assistant vice president, application development, GTE Financial, Tampa, Fla.;
  • Taylor Carstens, vice president of sales and lending, People's Trust FCU, Houston;
  • Robert Christiansen, district manager, Servus CU, Edmonton, Alberta, Canada;
  • Andrew Downin, manager of product development, Schools First FCU, Santa Ana, Calif.;
  • Damian Jakubczyk, vice president of information technology, Elevations CU, Boulder, Colo.;
  • David Klavitter, senior vice president, marketing and public relations, Dupaco Community CU, Dubuque, Iowa;
  • Matt Monge, chief culture officer, Mazuma CU, Kansas City, Mo.;
  • Andea Mosher, vice president of lending, University of Michigan CU, Ann Arbor, Mich.;
  • Michael Salerno, e-services manager, America First FCU, Riverdale, Utah;
  • Andrew Spirrison, assistant vice president, retail delivery, FORUM CU, Indianapolis;
  • Mary Beth Spuck, vice president of organizational development, TwinStar CU, Lacey, Wash.; and
  • Denise Wymore, vice president, member loyalty, Del Norte CU, Los Alamos, N.M.

Kentucky league announces state awards winners

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LOUISVILLE, Ky. (8/27/12)--The Kentucky Credit Union League recognized state winners for work in social responsibility, philosophy, and financial education.

Honorees will compete with other credit unions for national-level awards presented by the Credit Union National Assocation (By the Way Aug 24).

The Dora Maxwell Social Responsibility Recognition Award Program honors credit unions for their involvement in community projects and activities.

The Louise Herring Philosophy-in-Action Member Service Award honors credit unions for their practical application of the people-helping-people philosophy.

The Desjardins Youth/Adult Financial Education Award recognizes leadership within the credit union movement on behalf of youth/adult financial literacy.

Dora Maxwell Award winners include:

  • Lake Chem Community FCU, Benton, $20 million to $50 million in assets;
  • Autotruck Financial FCU, Louisville, $50 million to $100 million;
  • Service One CU, Bowling Green, $100 million to $200 million;
  • Park Community FCU, Louisville, $200 million to $500 million;
  • L&N FCU, Louisville, $500 million to $1 billion; and
  • Fort Knox FCU, Radcliff, $1 billion plus.
Louise Herring Award winners are:

  • Service One CU, $50 million to $250 million in assets;
  • Commonwealth CU, Frankfort, $250 million to $1 billion; and
  • Fort Knox FCU, $1 billion plus.
Desjardins Youth/Adult Financial Education Award winners are:

  • Service One CU, $50 million to $250 million in assets; and
  • Commonwealth CU, $250 million to $1 billion.

CU System briefs (08/24/2012)

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  • DUBLIN, Ohio(8/27/12)--U.S. Rep. Chabot (R-Ohio) (fifth from left) visited Sharefax CU's Mason, Ohio, office, which is located in the newly drawn 1st Congressional District, according to the Ohio Credit Union League (eLumination Newsletter (Aug. 22). CEO Art Kremer and 15 credit union leaders last week discussed regulatory burden, small businesses, the federal budget, the upcoming elections, gridlock in Congress, and the potential for moving much-needed credit union legislation before the end of the year. Chabot noted that any legislation would likely be taken up in a lame duck session after the election. Chabot is a sponsor of bills to lift credit unions' member business lending cap and to provide examination fairness, and has provided written support of credit unions' tax exempt status. League General Counsel John Kozlowski attended the meeting. The Credit Union National Association says that lifting the MBL cap to 27.5% of assets from its current 12.25% would help provide $13 billion in new small business loans and help create 140,000 new jobs at no cost to taxpayers.(Photo provided by the Ohio Credit Union League) …
  • DUBLIN, Ohio (8/27/12)--Homeland CU in Chillicothe, Ohio, hosted U.S. Rep. Steve Stivers (R-Ohio) earlier this month. During the meeting Stivers talked about his support for credit unions' member business lending (MBL) legislation and expressed appreciation for what credit unions do for their members, said the Ohio Credit Union League. Stivers said he has received pushback from credit union opponents over MBL legislation, but added his support is about doing the right thing for businesses. The Credit Union National Association has estimated that raising the MBL cap to 27.5% of assets from its current 12.25% would make available $13 billion more to small businesses and help create 140,000 jobs the first year, without affecting taxpayers. A dozen credit union staff and board members attended (eLumination Newsletter Aug. 22) …
  • ST. PAUL, Minn. (8/27/12)--
    Click to view larger image Click for larger view
    St. Paul (Minn.) FCU is kicking off the school year with its first student-run branch office at Como Park High School in St. Paul. The credit union has worked with the school for years helping teach students about financial literacy and offer additional business training. The in-school credit union is an extension of the school's business education program and the St. Paul FCU's work with business teachers and administrators. Staffing the branch will be, from left, St. Paul FCU School & Branch Education Coordinator Trevor Malone, and high school interns Tim Smith, a junior, and seniors Kyle Kottke and Dylan Schmidt. The branch will offer a full range of services, including check cashing, deposits, loan applications and financial assistance, and is open 10 a.m. to 1 p.m. on weekdays to serve students and faculty. Malone will oversee the student employees. (Photo provided by the Minnesota Credit Union Network) …

South Florida CUs brace for impact from Isaac

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MADISON, Wis. (8/24/12)--CUNA Strategic Services has sent an e-mail to leagues in the Southeastern states with information regarding Tropical Storm Isaac, which will be the topic of a webinar today at 11 a.m. ET. Isaac is projected to become a Category 1 hurricane this weekend and may approach landfall in Florida Monday.

The brief webinar will provide an update on the threats Isaac presents and the potential impact to businesses. CSS service provider Agility Recovery is participating in the webinar. It also has provided a hurricane preparedness checklist, a flood checklist, a disaster recovery kit, and a portable generator fact sheet. Use the links for more information.

At press time Thursday afternoon, Tropical Storm Isaac was moving into the eastern Caribbean Sea near Puerto Rico and the Virgin Islands.  It was expected to hit Hispaniola--the Dominican Republic and Haiti--as a hurricane. It then was expected to reach eastern Cuba by early Saturday and exit over the Florida Strait early Sunday. That would give it a day over warm ocean to gain strength to a Category 1.

After that projections are uncertain, encompassing anywhere from the Florida Keys to farther up the Gulf Coast of the state--just as the Republican National Convention gets underway in Tampa, which lies halfway up Florida's Gulf coastline. The storm could affect air travel Sunday through Wednesday in the area. Also, Tampa is prone to storm surge near where the convention will be (Washington Post Aug. 23). However, as of Thursday, weather forecasters said there was a 24% chance of Tampa encountering tropical storm-force winds.

The Credit Union National Association, state leagues, and credit unions planning to attend the convention are monitoring the situation. They will be at both the GOP convention in Tampa next week and the Democratic National Convention in Charlotte, N.C., the following week.

People in the southern part of Florida are already preparing for the event of a hurricane, which would be Florida's first since 2005.

A Category 1 hurricane is the lowest of the five categories on the Saffir-Simpson scale, said Reuters (Aug. 23).

CU System briefs (08/23/2012)

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  • LANSING, Mich. (8/24/12)--Maurice Phillips, former director of communications and special events at the Michigan Credit Union League (MCUL) died Aug. 18, the league announced on its website. He was 76. Phillips worked for the league from 1960 to 1998. Before that, he worked at The Detroit Times and The Detroit Free Press. At the league, he first managed the design department, which produced publications and promotional material for credit unions. In 1967, he moved into a newly created position to direct the launch of the nation's first statewide credit union advertising program, the forerunner of today's CU Difference campaign. In 1981, he helped create the Joint Advertising Board.  He became director of communications and special events in 1984 …
  • MARLBOROUGH, Mass. (8/24/12)--The Metro-Boston chapter of the Massachusetts Credit Union League will host a dinner on Sept. 18 in honor of U.S. Rep. Barney Frank, who will retire at the end of his current term after 32 years of service (E-Weekly Aug. 23). The league noted that over the years, Frank has helped credit unions achieve passage of key legislation to secure credit unions' future, including HR 1151, the Credit Union Membership Access Act. He played a vital role in making certain that credit unions were not harmed by legislation, either by bills aimed at credit unions by banking trade groups or by laws so broad that they would have swept credit unions in by mistake, the league added. The league said that after the financial crisis, Frank said, "If credit unions made all of the mortgage loans, then there would have been no subprime crisis and therefore no economic crisis." …
  • WORCESTER, Mass. (8/24/12)--Sean M. Driscoll, 38, of Haverhill, Mass., has been indicted in connection with a June 29 robbery at Digital FCU in Worcester. A Worcester County grand jury handed over the indictment on Aug. 27. The incident occurred when a man entered the credit union shortly before 2 p.m. and handed a teller a note demanding money. It indicated he had a gun and warned that no dye packs be used. After getting the money, he fled. Driscoll was arrested June 30 (Telegram.com Aug. 22) …
  • HARAHAN, La. (8/24/12)--The Louisiana Credit Union League announced that it has promoted three staffers (eNews Aug. 22). Lacey Hyer has been named vice president of communications and public relations. Hyer has been with the league since 2006. She has been instrumental in several statewide public awareness initiatives and award-winning marketing campaigns. In her new role, she will continue to coordinate all communications activities with an increased focus on communications planning, public relations, credit union community involvement and media relations. Jody Brooks has been named director of education. She has been a part of the credit union movement since 2008. In her new role, she will coordinate conferences, seminars and workshops for credit union professionals and volunteers. Jill Kitchens has been promoted to director of governmental affairs. A member of the league staff since 2002, Kitchens served in both the education and governmental affairs departments. In her new role, she will oversee CULAC fundraising, grassroots advocacy and other legislative activities …

  • LIVONIA, Mich. (8/24/12)--Livonia, Mich.-based Parkside CU has announced that Martin Carter will join the organization as president/CEO, according to the Michigan Credit Union League (Michigan Monitor Aug. 20). Carter brings more than 30 years of credit union industry to the position. His expertise spans branch operations, marketing and business development, human resources and training, compliance and risk management, and investment services.  Parkside CU is a more than $73 million asset credit union serving 15,000 members …

Coastal FCU launches interest-free Visa card

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RALEIGH, N.C. (8/24/12)--Coastal FCU in Raleigh, N.C., announced the rollout of a new Big Ticket Card--a Visa credit card that has six months' interest-free financing on all individual purchases or balance transfers of $600 or more.

An exclusive feature of the Big Ticket Card is that it holds no limit to the number of times a user can take advantage of the six months interest-free financing, said the $2.01 billion asset credit union.

Also, the card does not accumulate interest during the six-month interest-free period. Unlike most store credit cards, the Big Ticket Card assesses interest charges only on the remaining unpaid balance after the six-month period ends, Coastal FCU said.

"The Big Ticket Card is a great option for members who need to make a big purchase," said Willard Ross, Coastal's senior vice president/chief retail officer.

"Members now have the ability to purchase a new flat-screen TV or a new washing machine at any retailer that accepts Visa, with the option to pay it all off over the six-month interest-free period," he added. "This unique feature opens up the opportunity for our membership to shop with peace of mind by shopping for the best price without being tied to in-store financing."

IFox BusinessI IYahooI IKiplingerI size up CUs

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MADISON, Wis. (8/24/12)--With more public awareness of credit unions today, media such as Fox Business, Yahoo, Kiplinger and Bankrate.com are telling consumers what a credit union is and what to look for when choosing one.

Look for convenience, shared branching, educational opportunities, technology and stability, says Bankrate.com in Foxbusiness.com (Aug. 20). Since members can get the same service at any member credit union that they do at their regular one, shared branching makes credit unions seem much "infinitely larger," said Bruce McClary, spokesman for ClearPoint Credit Counseling Solutions in Seattle in the article.

Because a network of credit unions nationwide shares information, shared branching allows credit union members to access thousands of convenient locations to conduct financial transactions, Bankrate said.  

Costs, services and safety are three key points in favor of credit unions, according to Kiplinger.com (Aug. 23). Since credit unions are nonprofit organizations, they can offer more cost-related benefits. Without the driving force of making a profit, credit unions can pay out more interest on member accounts and charge less in fees. Also, most credit unions impose no minimum-balance requirements, Kiplingers said.  

Checking accounts at credit unions was the topic of a Yahoo! Finance article. About 72% of credit unions surveyed nationwide offer free checking accounts, according to Bankrate's 2012 Credit Union Survey (finance.yahoo.com Aug. 23). Also, 30% of credit unions surveyed charge no fee for ATM use outside the ATM network or provide a minimum  of one free withdrawal per week before a fee is applied, compared with 29% of banks surveyed in 2011, Bankrate said.

Besides better pricing and the convenience of shared branching, credit unions also offer free financial education to members such as advice on improving their credit scores, debt assistance, buying a home and making intelligent investing decisions, said BankVibe.com (Aug. 22).

To read the articles, use the links.

PULSE study Debit continues to grow

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MADISON, Wis. (8/24/12)--Debit card use continues to explode, even amid a turbulent regulatory environment, based on the results of a new study, which includes credit unions.

Financial institutions participating in the 2012 Debit Issuer Study expect 15% growth for PIN debit and an 8% increase in signature transactions this year, according to the 2012 Debit Issuer Study, commissioned by PULSE.

Fifty-seven financial institutions took part in the study--including credit unions, large banks and community banks.

Seventy-six percent of consumers now have debit cards, compared with 73% in 2010. The average active consumer debit cardholder spent $8,326 on the card in 2011, up from $7,781 in the prior year. The increase was driven by more card usage---active users performed an average of 18.3 purchases a month compared with 16.3 a month in 2010.

Much of the growth is driven by an increase in small transactions. While the average price on a debit transaction is $38, the median is just $19, with more than 30% of transactions now less than $10, said the study.

Consumer volume grew by 11% for signature transactions and 9% for PIN transactions, surpassing issuers' expectations of 7% growth in both categories, the study found.

Sixty-nine percent of regulated issuers and 76% of exempt financial institutions surveyed agreed that focusing on improving penetration, activation and usage for debit cardholders is key to growth in 2012.

The Federal Reserve's Regulation II capped the maximum interchange fees that financial institutions with at least $10 billion in assets could receive on debit card transactions. Regulation II includes a cap on debit interchange rates and a prohibition on debit network exclusivity.

The interchange cap went into effect Oct. 11, and applies to issuers with at least $10 billion in assets. These large debit issuers are limited to 21 cents plus 0.05% interchange fee per transaction, in addition to one cent when these issuers qualify for the fraud-prevention adjustment.

The Credit Union National Association (CUNA) last year urged the Fed to allow debit card issuers to charge four to five cents per transaction to cover fraud prevention costs. That adjustment would better cover costs  incurred when financial institutions investigate the source of a data breach or theft, attempt to stop any instances of fraud, and deal with the aftermath of the theft or data breach, CUNA said. The increased fraud prevention adjustment also would help protect smaller issuers whose fraud prevention costs often represent a larger portion of their total debt card program costs, CUNA added.

CUNA also recommended that the Fed periodically revisit the fraud prevention cost issue to see if the costs have changed and whether any future adjustments are necessary.

Mortgages fewer chargeoffs boost Wis.s large CUs

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MADISON, Wis. (8/24/12)--Mortgage refinances and reduced delinquencies drove positive results for nine of Wisconsin's 10 largest credit unions in the first half of 2012.

At Wisconsin's largest credit union, Landmark CU, New Berlin, net income increased 87% compared with the first six months of the year, said the Milwaukee Journal Sentinel (Aug. 23). Total loans grew by almost $250 million. Landmark also reported growth in noninterest income as a result of mortgage refinancing.

In addition to taking advantage of lower rates, homeowners are refinancing their mortgages at reduced terms of 10, 15 and 20 years, Ron Kase, Landmark CU CEO told the newspaper.

Royal CU, Eau Claire, reported the biggest percentage increase in earnings, with a 1,743% jum to $6.7 million from $366,530 in the first half of the year. That growth was driven in large part by an increase in mortgage refinances, said Royal CEO Rudy Pereira.

The credit union generated income from selling fixed-rate mortgages to Fannie Mae and Freddie Mac, Pereira told the Journal Sentinel.

Wisconsin credit unions grew net income by 83% in the first six months of 2012 compared with same period last year, according the Wisconsin Department of Financial Institutions (DFI). Net income totaled $101.8 million, up from $55.6 million in 2011. The increase was fueled in large part by a 28% increase in "other income" and an 11% decrease in provisions for loan-loss expense, according to DFI.

Member wins Mich. statewide Facebook contest

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LANSING, Mich. (8/24/12)--A Cadillac, Mich., woman is the winner of the first Facebook contest held as part of a statewide effort to raise awareness about credit unions.

Click to view larger image From left are Wexford Community CU President/CEO Fred Schuster; Audrey Davis, mother of Secret to Savings Contest winner Rosemarie McConnell, Wexford board member Sandra Roundhouse, father Ken Davis, Rosemarie McConnell, son Will McConnell, daughter Lindsey Westdorp (holding grandson Will McConnell) and board member Mike Dolack. (MCUL photo)
Rosemarie McConnell, 54, received the $700 prize Thursday at Wexford Community CU's Lake City branch, for her winning response.

"I love puzzles and I love my credit union so this competition grabbed my attention right away," said McConnell. "I'm really excited to be able to share the prize money with my family, and to open a credit union account for my 2-year-old grandson. Credit unions have been terrific to our family, so I want to get him started early."

"Michigan credit unions are always looking for innovative and fun ways to give money back to our members, and this Facebook competition is another example of our commitment to the families we serve," said David Adams, CEO of the Michigan Credit Union League.

"Giving back to our members is what we are all about," said Wexford Community CU CEO Fred Schuster.

The puzzle McConnell solved asked entrants to complete a phrase by filling in missing letters and thus highlighting a benefit of credit unions: "Lower fees and loan rates combined with exclusive discounts add up to big savings for credit union members."

More than 50 entries were submitted, and McConnell was the first to solve it. She has been a credit union member for more than 30 years.

The campaign also included the launch of a new online portal for Michigan credit union information, at CU Link.  

The next promotion, "What would you do with $1,240?" began Wednesday and runs through Sept. 23. The new sweepstakes highlights another benefit of credit union membership: lower auto loan rates, which can save members an average of $1,240 over the course of a loan.

Craig to receive Wegner Lifetime Achievement Award

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MADISON, Wis. (8/24/12)--Rick Craig, president/CEO of America First FCU, Ogden, Utah, has been named winner of the 2013 Herb Wegner Memorial Award for Lifetime Achievement, announced the National Credit Union Foundation (NCUF) Thursday.

"No matter if it's teaching at Western CUNA Management School (WCMS), fighting for credit unions in the Utah State Legislature or Capitol Hill in Washington, D.C., or serving on countless local, state or national organizations that make a difference, Rick is there in full force," said Bob Schumacher, NCUA Awards & Recognition Committee chairman.

Craig became executive vice president at the credit union in 1977 and was appointed president/CEO in 1997.  During his watch, the credit union achieved $5.4 billion in assets, 575,000 members and 100 branches, said James D. Likens, president/CEO of WCMS.

He served for many years on the Utah Credit Union Association (UCUA) board and was appointed by the state's governor as a member of the Board of Credit Union Advisors. He also was active in national organizations, including serving on the Filene Research Council, as a board member of CO-OP Financial Services, and on Credit Union National Association's (CUNA) Committee on AICPA Audit and Accounting Guide Task Force as well as CUNA's Governmental Affairs Field of Membership Committee.

Through multiple lawsuits and legislative attacks, America First FCU modeled a form of public and governmental advocacy that many in the industry would follow.  In 2007, trade press named it as having the most "Outstanding Political Action" program in the nation.

"One of the most visible actions Rick took on behalf of credit unions was the fight with the Utah bankers who were aggressively attacking the credit union tax exemption," said Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues.  "These efforts increased the awareness that being actively engaged in the political and legislative arena was important for all credit unions."

U.S. Rep. Rob Bishop (R-Utah) noted that "not only has his credit union supported candidates that support credit unions--especially through member advocacy--but Rick has also made exemplary strides in activating his membership. By gathering a group of member-advocates, he has created a political group of 'minutemen' who can rally on behalf of the credit union at a moment's notice."

"I often say that the world is run by people who show up, and Rick has taught many credit union members to show up and get involved in their government," said the congressman.

Craig also served on WCMS faculty for 31 years until retiring in July.

"When I think of an individual that has dedicated his lifetime to not only his job but also an ideal, I think of Rick Craig," said Scott Simpson, UCUA president/CEO.

Three Wegner awards will be presented at a special dinner hosted by NCUD on Feb. 25, during CUNA's 2013 Governmental Affairs Conference in Washington, D.C.

SCCUL diversity award goes to Greater Abbeville FCU

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ABBEVILLE, S.C. (8/23/12)--Greater Abbeville FCU, Abbeville, S.C., was honored Monday with the 2012 South Carolina Credit Union League Laura Fleming Diversity Award.

The award was presented at the North Carolina/South Carolina Credit Union National Association Leadership Conference.

The $12 million asset credit union, which serves more than 2,000 members, received the award for its implementation of the Fresh Start Checking program earlier this year.

The award, established in 2007, recognizes South Carolina credit unions that exemplify diversity and inclusion in the workplace.  Fleming was one of the league's past credit union leaders and a member of the league's original Diversity Committee.

Lithuania bank tightens CUs prudential requirements

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VILNIUS, Lithuania (8/23/12)--The central bank of Lithuania Monday unveiled tougher prudential requirements for the country's credit unions. The move is prompted by the end of rules related to the calculation of large exposure ratios.

The Bank of Lithuania board said that as of Jan. 1, 2012, all credit unions are required to include funds in credit institutions such as banks and credit unions in their calculations for maximum exposure.  The requirement limits the funds credit unions can risk from other sources, according to The Baltic Course (Aug. 20).

Also, the maximum exposure ratio will be extended and apply to all credit unions. Previously, those with adjusted capital fees of less than US$718,756 were exempt.

The central bank said the purpose of the new requirements is to encourage credit unions to invest funds cautiously and safeguard depositors' interests. It also is requiring greater experience from managers and has formulated an exam for those who do not meet the experience requirements.

Lithuania has 62 credit unions serving 124,383 members. They have combined assets totaling more than $537 million, according to the World Council of Credit Unions' statistics.

When Gen Y moves back home CUs have opportunities

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MADISON, Wis. (8/21/12)--If you are marketing by lifestyle geared toward life's big events-- birth, graduation, the first car, college, marriage, kids ,home buying, pre-retirement investing, and retirement--you may see an opportunity in the latest trend: Gen Yers moving back home and living with their parents.

Findings by a new study from US2010: Discover America in a New Century may shake up some marketing habits--or at least make marketers reconsider their assumptions about who does what and when.

Marriage, children and families are no longer individual achievements that young people rush to pursue, the study concluded. It noted that the transition to adulthood has been extended as a period of "emerging adulthood, marked by personal instability."  Young adults stay in their parental homes longer or return home after a stint of independent living.

Although the Great Recession affected nearly every demographic population segment in the U.S., young adults were hit the hardest because they were often the "last hired, first fired." Job losses mean many young adults found it comforting to double up with their parents to save money. "For young adults, various transitions and uncertainties often make the parental home as a safe haven," said the study.

Some of the key findings:

  • Of those age 20-34 in the survey, 24% lived with their parents during 2007 to 2009, up from 17% in 1980. The percentage was much higher for those under 25 years old: 43% moved in with the folks, compared with 32% in 1980. Levels of co-residence were higher for men than women, minorities more than whites, and for those with lower levels of education.
  • Delays in marriage increased the likelihood of moving back in with parents. In 2007-2009, roughly 38% of men and 47% of women aged 25 to 29 were married, a decline from 59% and 65%, respectively, in 1980.
  • Two key factors explain why young adults are living with their parents: marital status and economic reasons. Singles are more flexible in terms of moving in and out. And unemployment or low income makes independent living difficult, so doubling up with parents becomes feasible.
It is no surprise that never-married individuals had the highest percentage living with parents, said the study. About 54% of the 20-24 year olds, 37% of the 25-29 year olds, and 27% of the 30-34 year olds lived with their parents in 2007 to 2009.  "What is surprising is the high percentage at older ages when they are expected to have reached independence. More than one-fourth of 30-something adults never left home or moved back into their parents' home."

So, how does all this affect the credit union's marketing strategy? Think education opportunity. Provide resources families can use. Here are a few possibilities:

  • Articles in the credit union's newsletter. Offer tips for negotiating a contract much like a rental contract, specifying the move-in terms and what the offspring and parents will or will not contribute.
  • Financial fairs. Make this situation one of the topics. Many parents welcome their offspring back but then reality hits. Who pays for the jobless daughter's emergency car repair?  What are the financial consequences if the son or daughter gets sick or is injured and isn't on the parent's health insurance plan? What if they never move out? Credit unions can help them weigh the pros and cons.
  • Budgeting help for the new reality. During the recession, many young adults and their parents received a wake-up call. They are being forced to reevaluate their goals and financial capabilities. They may need help with considering options (how best to stretch the pre-retirement dollars, buying a used car instead of a new one, a shorter vacation than the two weeks in Italy).  Provide them the tools to reevaluate their budgets and calculate all the what-ifs.
  • Special savings plans and loans. Maybe an emerging adulthood loan to finance the start up expenses of renting at a new place, or savings plan attached to a loan that rewards the young adult for saving.
The possibilities are endless, with just a few tweaks to a credit union's marketing.

Ohio CUs find ways to lend

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COLUMBUS, Ohio (8/23/12)--Credit unions in Ohio saw their consumer-loan-origination growth beat the national average, according to the Ohio Credit Union Quarterly Performance Summary.

Growth increased 37.1%  from March 2011 to March 2012, with consumer loans driving overall origination growth--which increased 33.7% to $1.5 billion during the same time period (Toledo Business Journal Aug. 1).

The summary provides encouraging news from a loan growth standpoint, according to the Ohio Credit Union League (eLumination Newsletter Aug. 8). Despite economic growth indicators which suggested a drawn-out recovery, loan growth at Ohio credit unions from March 30, 2011, to March 30, 2012, increased 4.7%. That is the strongest first-quarter growth performance since 2008-2009, which saw 8.26% growth, the league said.

Credit unions looked for creative ways to make the loans. KEMBA Financial CU in Gahanna expects 20% loan growth in 2012, CEO Jerry Guy told Columbus Business First, the league reported.

Mark Decello, KEMBA executive vice president and chief operating officer, said the credit union's growth strategy is focused on five key principles:

1. Transitioning from a transaactional sales approach to a relational approach;

2. Implementing a relationship pricing straegy to reward members based on their contribution to the cooperative;

3. Ensuring sales-oriented associates occupy all member-facing positions, from the call center to tellers to member services representatives.

4. Continuing a highly targeted matrix mailing program to reach members with pre-determiend needs, and carefully measuring the result; and

5. Taking advantage of what the marketplace affords, in a timley fashion.

KEMBA Financial's approach may seem sales-focused to an outsider, but the focus is still on the member, Decello said.

"Sale isn't a bad word," he told the league. "Our results are the true gauge of whether we are fulfilling our obligation to improve our members' financial lives. For example, we don't simply sell an auto loan to a member because they think it's their best option, we will review their financial situation and determine if it's the best way to save or make the member money."

Ohio's credit unions also saw strong growth in first mortgage originations (up 34.6%) and business loan balances (up 13.7%).

VSECU banking cease-desist hearing to be set

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MONTPELIER. Vt. (8/23/12)--A pre-conference hearing was held Wednesday with representatives of Vermont State Employees CU (VSECU) and the Vermont Department of Financial Regulation (DFR) about a possible cease-and-desist order over VSECU's use of the words "bank" and "banking" in its marketing materials.

At the pre-conference hearing attended by about 15 people, independent hearing officer Robert Simpson, a retired Chittendon County State Attorney, took care of the "housekeeping" chores. He introduced attorneys for both sides, Joe Bergeron, president of the Association of Vermont Credit Unions, who attended the hearing, told News Now.  

"Not a lot happened," Bergeron said. "Simpson told both parties to work out an agreement for processes, dates and timelines among themselves and to get back to him by the end of this week. The parties also discussed what to keep confidential and what not to."

The final hearing could be as late as the second half of October, Bergeron said.

Cliff Peterson, DFR general counsel, was the lead attorney representing the state, and Jackie Hughes, of KSE partners, represented VSECU. Some Occupy Wall Street people also attended, Bergeron said.

DFR, which regulates state-chartered credit unions and banks, issued a notice June 18 to the Montpelier-based VSECU of its intent to issue a cease-and-desist order barring VSECU from using the words. DFR said it was concerned that consumers and members are confused when the credit union uses the words. The $573 million asset VSECU requested a hearing over the matter (News Now July 19 and 20).

"We have worked hard over the years to educate consumers about the difference between a bank and a credit union. We have never called ourselves a bank nor have we ever tried to fool members or consumers into thinking we are a bank," VSECU CEO Steven D. Post wrote in the message posted on the credit union's website last month.

In a frequently asked questions section, the credit union outlined implications for state-chartered credit unions that could develop if the DFR succeeded in the ban, which "would be very unfortunate for Vermonters and set a very bad precedent in Vermont," it said.

Federal credit unions in the state "are not subject to any Vermont ruling that comes from this enforcement action and therefore can continue using the words "banks" and "banking" without penalty," the credit union said.

"It would mean that VSECU and other state-chartered credit unions would not be able to simply, fairly and accurately describe who they are and what kind of services they offer such as: mobile banking, banking online, banking solutions, 'you can bank at a credit union,' 'we're redefining banking,' 'our credit union is a banking alternative,'" said the credit union.

Banning the words "would clearly put VSECU and other state-chartered credit unions at a competitive disadvantage since federally chartered credit unions can use these terms freely," it said.

Rivermark Community CU to close two more branches

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BEAVERTON, Ore. (8/23/12)--Rivermark Community CU, Beaverton, Ore., will close two branches this fall, a reflection of growing member adoption of its remote services, the credit union said.

Rivermark Community CU, with $550 million in assets, will close its Clackamas and Newberg branches on Nov. 9. The credit union closed its Salem branch in June.

"Our members like the convenience of online and mobile banking and knowing that it's become an easy, safe and secure option," said Scott Burgess, Rivermark Community CU's president/CEO. "Our decision to close two branches reflects a vision to be a technology-savvy credit union."

In the past year, the number of members using Rivermark's online banking service has increased 34% and its mobile banking service grow 86%. At the same time, the number of in-branch transactions has declined, with 30% of members having visited a Rivermark branch in the past month at some locations.

Rivermark Community CU introduced mobile deposit in March. In five months, more than 9,300 members have deposited more than 31,000 paper checks using their iPhone or Android mobile device, Burgess said.

Coopera Prepaid cards help CUs attract underserved

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DES MOINES, Iowa (8/23/12)--Prepaid cards can serve as a credit union's entry to growing markets, including Generation Y and the underserved, according to a new a new white paper from Coopera.

Coopera is an Iowa-based economic development firm focused on the emerging Hispanic market, which presents unique growth opportunities for credit unions.

Coopera works in partnership with the Credit Union National Association (CUNA) and credit unions to help credit unions nationwide grow by serving the Hispanic community. They designed El Poder es Tuyo (The Power is Yours), a customizable, Spanish-language personal finance website for Hispanic credit union members and potential members. For more information, use the resource link.

CUANY introduces Online Voters Resource Center

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ALBANY, N.Y. (8/23/12)--The Credit Union Association of New York has created an online resource center to assist credit union professionals, volunteers and members in identifying political candidates that support credit unions.

"Our members want to know if their lawmakers support credit unions," said William J. Mellin, the association's president/CEO. "This online resource center will help credit union members make informed choices as they make their voices heard in the primaries and when they go to the polls in November."

The Voter's Resource Center details state legislators' records on bills affecting credit unions and their 4.6 million members statewide.  It also includes voter resources, such as:

Voter Information:

  • New York State Board of Elections;
  • Absentee Ballot Request;
  • Credit Union National Association (CUNA) Elections Action Center;
  • Locate Your Lawmakers;
  • VoteNY (new voting machine information);
  • Project Vote Smart; and
  • Vote411.org.
State Primary Election Candidates:

  • New York State Senate; and
  • New York State Assembly.
General Election Candidates:

  • U.S. Senate--N.Y.; and
  • U.S. Congress--NY.
Political Action Committee Information:

  • Supporting pro-credit union candidates
The CUNA Elections Action Center includes materials and links to help voters register, request an early vote ballot, mobilize credit union members, and activate on behalf of pro-credit union candidates in the upcoming 2012 elections.

MnCUN partnership assists CUs with public deposits

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ST. PAUL, Minn. (8/23/12)--The Minnesota Credit Union Network's (MnCUN) Network Service Corp. this week furthered its initiative to strengthen credit unions' ability to accept public deposits through a newly signed partnership agreement with American Deposit Management LLC (ADM).

ADM, a treasury management and financial services company, provides Minnesota credit unions a safe and profitable fund where they can place large deposits, MnCUN said.

ADM is a deposit placement service that provides full Federal Deposit Insurance Corp. (FDIC)/National Credit Union Administration (NCUA) insurance through a network of financial institutions. Through this program, credit unions send large deposits to ADM. The deposits are then placed in separate financial institutions that have FDIC/NCUA insurance. The product provides credit unions a combination of deposit protection and competitive returns on funds, said MnCUN.

Earlier this year, MnCUN played a role in a push for the inclusion of credit unions in the language of a bill involving deposits from public entities. While the bill was signed into law in April, many Minnesota credit unions lacked the tools necessary to fully take advantage of the legislative change. MnCUN's partnership with ADM provides credit unions an investment tool for municipal deposits.

"By utilizing this product, credit unions can reaffirm their connection to and support of local communities," said John Ferstl, MnCUN vice president- Network Service Corporation.

Headquartered in Milwaukee, Wis., with offices in Minneapolis, ADM works with more than 400 credit unions and banks nationwide.

CU System briefs (08/22/2012)

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  • HERNDON, Va., and SUITLAND, Md. (8/23/12)--Chris McDonald has been selected as the new CEO of Herndon, Va.-based Northwest FCU (NWFCU), succeeding Gerrianne D. "Winky" Burks, announced NWFCU's board of directors on Tuesday. Burks will retire in mid-January after a 41-year career at NWFCU. McDonald has resigned his post as president/CEO of Suitland, Md.-based Andrews FCU, effective Sept. 14. McDonald's career with credit unions has spanned more than 28 years.  He began his career as a state regulator before becoming executive vice president/vice president of finance and information systems at First Community CU, Houston. For the past 12 years McDonald has led credit unions in Texas and Maryland. He has been with Andrews FCU since 2008. Under his tenure at the $897 million asset Andrews FCU, he oversaw three new branches opened in Germany, New Jersey and Maryland and positive trends in membership, loans and deposits while expanding its ATM network and enhancing products lines. Andrews' board said it would make an announcement soon about an interim president/CEO …
  • ARLINGTON, Va. (8/23/12)--National Association of State Credit Union Supervisors (NASCUS) President/CEO Mary Martha Fortney announced Wednesday that Kate Hartig is leaving NASCUS to join the District of Columbia Department of Insurance, Securities and Banking as its public information officer later this month.  Hartig, as NASCUS's vice president for public relations and legislative affairs for nearly eight years, was responsible for NASCUS' communications and media relations, as well as congressional relations …
  • BINGHAMTON, N.Y. (8/23/12)--A mother and son from Pennsylvania have pleaded guilty to a $14 million loan fraud scheme that forced the closure of Binghamton, N.Y.-based Broome County Teachers' FCU (Associated Press Newswires Aug. 21). Scott Lonzinski, 32, and Laura Conarton, 46, of Great Bend, Pa., were charged with bank felony fraud related to allegedly creating phony documents, forging signatures and inventing fictitious people to get 10 loans over two years from the credit union. They allegedly convinced the credit union that Lonzinski's bogus certificates of deposit were worth what they claimed for a security for the loans. The loans allegedly were used to finance Lonzinski's construction business, where Conarton was manager and bookkeeper. The scheme was discovered during an examination by the National Credit Union Administration (NCUA) in June 2011. NCUA sold the credit union's assets to another credit union. No members lost money as a result of the liquidation …
  • SYRACUSE, N.Y. (8/23/12)--Christopher Vanetten, 37, of Cicero, N.Y., was sentenced to serve three to six years in prison for allegedly cheating credit unions and others in a check-writing scam. Vanetten also was ordered to pay nearly $44,700 in restitution. He pleaded guilty in July to felony charges of third-degree grand larceny and first-degree scheme to defraud. He allegedly opened accounts at various area credit unions in Onondaga County and then wrote numerous bad checks on the accounts, said prosecutors. Vanetten also faces similar charges in Oswego County (The Post-Standard Aug. 21) …
  • WARRENVILLE, Ill. (8/23/12)--The board of directors of Alloya Corporate FCU, based in Warrenville, Ill., has appointed Matt Davidson, executive vice president for Kern Schools FCU, Bakersfield, Calif., to its volunteer Supervisory Committee. Davidson, whose credit union experience spans more than 23 years, previously has served as a chief executive for a number of credit unions and as executive vice president for the California and Nevada Credit Union Leagues. Kern Schools FCU has $1.3 billion in assets and serves nearly 170,000 members. The committee also includes Michael Daugherty, president/manager of Community Plus FCU in Rantoul, Ill., and Charles H. Rogers, chief operating officer for Progressive CU in New York, N.Y. …

CU System briefs (08/21/2012)

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  • CHARLESTON, W. Va. (8/22/12)--Doris Cunningham, who retired earlier this year as manager/CEO of  Members Choice WV FCU, Charleston, W.Va., died Aug. 19, according to the West Virginia Credit Union League. She had worked with the credit union for 42 years. She was active in the Kanawha Valley Chapter, and was chapter president prior to being elected to serve on the league board in 1990. Cunningham served two terms as league chairman and for the past 14 years served as treasurer of the league.  In 1992 and 2005, Cunningham was awarded the William Bryan Hawkins Award for her volunteer service at the chapter and state level. "With Doris' passing, credit unions lost a true friend and the state lost a real leader," said league President Ken Watts. "However, if you were fortunate, as I was, to have known and worked with her, you realize that her invaluable contributions will be felt for many, many years to come." Funeral services are today at 1 p.m. ET at Highlawn Baptist Church, St. Albans, W.Va. …
  • PHOENIX (8/22/12)--A woman dubbed the "Color Me Bad Bandit" because of her colorful disguises is wanted in connection with four credit union robberies in the Phoenix area, said the Federal Department of Investigation (TMCNet.com Aug. 21). Credit unions robbed were AZ FCU, Mesa, Ariz., on July 11; Mountain America CU, Mesa, on July 19; Sun West FCU, Mesa, on July 31; and Arizona FCU, Tempe, on Aug. 16. She is described as white or Hispanic with dark features, in her late 20s or early 30s, 5'4"-5'5" tall, 140 lbs., with full lips. The woman enters the credit unions with a large bag and uses a note to demand money and threaten employees. She flees on foot. The suspect also consistently attempts to conceal her identity with large scarves or hats and sunglasses. On her most recent robbery, the robber wore a long, leopard print cape and carried a large black bag …
  • BREA, Calif. (8/22/12)--Evangelical Christian CU (ECCU) has teamed with CapinCrouse LLP to offer a series of financial seminars to help churches and nonprofits do a better job stewarding their resources and people entrusted to their care.  The seminar aim to help churches and nonprofits understand financial risks, tax risks, legal risks and operational risks. The seminars will be Oct. 2 in Littleton, Colo.; Oct. 3 in Fort Worth, Texas; and Oct. 4 in Plano, Texas …
  • ALBUQUERQUE, N.M. (8/22/12)--The Credit Union Association of New Mexico's Governmental Affairs department hosted two congressional candidates in town hall meetings on Aug. 14.  Janice Arnold Jones, a Republican, and Michelle Lujan Grisham, a Democrat, were the guests. Both are running for the position of representative for New Mexico's First Congressional District. They talked about their positions on credit union issues such as member business lending, the state's economy, and more …

FirstCorp members OK PandA of assets by Catalyst Corp.

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PHOENIX, Ariz. (8/22/12)--Members of Phoenix-based First Corporate CU voted Friday to approve the purchase and assumption (P&A) of the majority of its assets by Catalyst Corporate FCU.

FirstCorp and Catalyst are on schedule to complete the necessary transitions of products and services in time for their consolidation to take place Oct. 29, it was announced at the special meeting.

"We proposed this type of consolidation with Catalyst because it offers many benefits to our member credit unions," said FirstCorp Chairman David Doss, noting that "we have taken a major step forward toward completing the transition to Catalyst.

"All the members support the concept of a sustainable model, which will allow us to continue to enjoy low-cost, comprehensive wholesale financial services well into the future," Doss added.

The transition is unique because it takes the form of a P&A of certain FirstCorp assets and share accounts, said FirstCorp. Legacy assets will not be acquired by Catalyst, but will remain in the FirstCorp charter until they mature or are sold at a later date.

"This approach protects FirstCorp's membership capital, which will remain at FirstCorp, and will also immunize Catalyst's members against the risk of future losses on these assets," said Catalyst President/CEO Kathy Garner.

Roughly 93.48% of FirstCorp's eligible members cast votes, with 100% of those approving the transactions.  As with all corporate consolidations, this proposal will require approval from the National Credit Union Administration and the Arizona Department of Financial Institutions.

In a press release, the corporates said they do not anticipate any obstacles in completing the proposal because the solution is advantageous for the corporates' members, the regulatory agencies, and credit unions impacted by the status of the National Credit Union Share Insurance Fund.

FirstCorp's offices and final operations will be shut down in the weeks following the closing of the P&A. The Catalyst Corporate's official capital offering period for FirstCorp members begins now and continues through Oct. 26.

WesCorp trial date postponed settlement talks continue

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LOS ANGELES, Calif.  (8/22/12)--Court hearings and the trial date have been postponed while settlement talks continue amongst the parties in the National Credit Union Administration's  (NCUA's) lawsuit against former Western Corporate FCU senior executives over losses from mortgage-backed securities that led to the corporate's collapse.

The U.S. District Court for the Central District of California had issued a recent order postponing the case while the remaining parties continue negotiations. A hearing that had been scheduled for Tuesday has been reset for Sept. 25 at 1:30 p.m., according to court documents.

NCUA, as liquidating agent for WesCorp, had filed a negligence lawsuit against former WesCorp senior executives. Three have entered settlement agreements with NCUA, while two others have not settled.

The NCUA's suit alleges that officials were negligent in monitoring mortgage-backed security investments that were made by the corporate, and that there was a breach of fiduciary duty and fraud related to these investments, which resulted in $6.8 billion in portfolio losses. The WesCorp employees filed counterclaims and affirmative defenses against NCUA, alleging the agency was aware of WesCorp's investment strategies and approved of and encouraged the strategies.

New scams surface across the nation

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MADISON, Wis. (8/22/12)--Several new, trickier scams have surfaced at credit unions and banks nationwide. They attempt to access consumers' accounts through the different channels they use to conduct financial transactions.

The scams include:

  • An e-mail sent to customers and non-customers of Citizen National Bank, in which scammers pose as the bank's information technology department, claiming to be in the process of updating new servers. They ask recipients to update their account information by clicking on a bogus link. The e-mail asks recipients to provide complete, correct personal information to be part of a secure login, claiming that otherwise their accounts will have to be temporarily closed.  The e-mail spells the bank as both Citizen and Citizens and has grammatical errors.
  • Automated cell phone calls to area residents, purporting to be Royal CU (RCU), a $1.27 billion asset credit union based in Eau Claire, Wis. The callers tell them their RCU debit card had been blocked or deactivated (WQQW Aug. 20). Recipients also were instructed to enter their debit card number to solve the problem.  When RCU became aware of the scam, it placed warnings on its website, Facebook page and other venues.
  • Fraudulent automated calls to mobile phones claim to be from WhiteFish (Mont.) CU and state their credit union cards have been compromised and their personal information is needed to rectify the problem. The voice on the recording falsely claims to be a representative of the $1.22 billion asset credit union. The credit union distributed a press release immediately about the scam.

VolCorp elects board officers

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NASHVILLE, Tenn. (8/22/12)--Volunteer Corporate CU (VolCorp) last week named two new credit union executives to its board of directors, and re-elected another current member to a new term on the board.

Tom Brewer, president/CEO of Peoples FCU, Nitro, W. Va., and Rick Mikels, CEO of ETMA FCU, Louisville, Tenn., were elected to new three-year terms on the corporates' board of directors. Ken Swann, CEO of City of Memphis CU, Memphis, Tenn., was also reelected to a three year term. Swann is the current board of directors chairman.

Other board members include:

  • Vice Chairman Gary Land, CEO, Chattanooga (Tenn.) Area Schools FCU;
  • Secretary Janice Jones, CEO, United Southeast FCU, Bristol, Tenn.;
  • Treasurer John Jacoway, executive vice president/chief financial officer, Southeast Financial CU, Franklin, Tenn.;
  • Wade Stapleton, CEO, LifeWay CU, Nashville;
  • Todd Swims, CEO, Leaders CU, Jackson, Tenn.; and
  • Bonnie Sensing, Nashville Fireman's CU, Nashville, Tenn.
VolCorp is a not-for-profit financial cooperative that serves natural person credit unions nationally.

Court CUs security gap loses insurance claim

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LOS ANGELES (8/22/12)--The California Court of Appeals has ruled that a financial institution's  insurance claim for losses stemming from fraudulent wire transfers is not covered because the institution failed to follow security procedures mandated by its insurance policy.

The appellate court affirmed on July 31 a ruling by Los Angeles County Superior Court Judge Terry A. Green in favor of the insurance company, CUMIS Insurance Society, which was the insurer for the California-based credit union. The new ruling was published on Aug. 17, according to court documents.

CUMIS had provided a bond for coverage to the credit union for more than 10 years. The coverage was typically renewed in February of each year and the bond in question was effective from February 2007 to February 2008. 

In January 2008, the credit union transferred nearly $243,700 from a member's account to a bank account in Hong Kong, according to the ruling's document. A man identifying himself as the member called the credit union to change the telephone number associated with the account. He provided the member's Social Security number, birthdate, mother's maiden name and current transition activity and the telephone number was changed.

Five days later on Jan. 14, the credit union received a fax of a completed wire transfer request form, directing the credit union to transfer funds from the member's homeowner's line of credit to the Hong Kong account. The credit union determined the signature on the fax and information matched that of the member and that no legal impediments prevented the transfer. The credit union called the new phone number and a man identifying himself as the member confirmed the transfer request. The man answered correctly a series of security questions and the credit union completed the transfer, said the court documents.

The member learned of the transfer two weeks later when his wife contacted the credit union about refinancing a loan. He submitted a sworn statement he had not requested the transfer and had not authorized anyone else to do so.

The credit union could not recover the funds and submitted a claim to CUMIS. On April 8, 2008,  CUMIS informed the CEO that the bond did not cover the loss because the credit union had not verified the wire transfer request by using a "secure telephone number" as outlined in its policy. "Secure telephone number" means a "replacement telephone number for the member…that the credit union received at least 30 days prior to the receipt of the [wire transfer] instruction.  Instead, the credit used the telephone number that had been changed five days earlier.

In the appellate court opinion, Presiding Justice Robert Mallano agreed with the lower court that the credit union's failure to comply with the security procedure entitled the insurer to deny payment under the bond.  He noted the insurer had notified the credit union in October 2006 of changes taking effect in  February 2007, including a callback verification procedure. The company said it would pay for a fraudulent wire transfer if a credit union performed the specific call back verification requirements.

The court rejected the credit union's argument that it was not required to use the callback because it used an alternative security measure permitted under the bond, namely a "written funds transfer agreement, signed by the member or the member's authorized representative."  The court  noted that "the alternative security procedure required the signature of the member or an authorized representative. A forged signature, as here, did not suffice."

CUNA Mutual Group, of which CUMIS is a member, declined to comment on the case.

Mich. league obtains reg OK for biz-investing CUSO

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LANSING, Mich. (8/22/12)--The Michigan Commissioner of Financial and Insurance Regulation has signed an order authorizing credit union service organizations (CUSOs) to provide small-business equity investments to Michigan credit unions and their members. That is a landmark move for the credit union industry, according to the Michigan Credit Union League (MCUL).

The action comes after months of proactive advocacy by the league on behalf of the state's credit unions and CUSOs.

"This is an unprecedented step forward for credit unions," said David Adams, CEO of MCUL. "Business investing authority has tremendous potential benefits to credit unions and to the small business community at large. It is further proof that there is nothing small about the credit union commitment to supporting small businesses. MCUL and CUcorp plan to work aggressively with our credit union community on a structure and business plan that will take advantage of this new opportunity. CUcorp is well-positioned to facilitate this."

"It is necessary and proper for CUSOs to offer small-business equity and venture-capital- investment administration and related services to its member credit unions and their respective members," noted Commissioner R. Kevin Clinton in his ruling, based on a review of applicable laws, and considering safety and soundness.

In October, MCUL began the process necessary to achieve the new authority through the existing regulatory process, without any statutory amendments.

The new authority allows state-chartered credit union investment in CUSOs that provide investment administration and other services related to small-business equity or venture-capital funding.

The Credit Union National Association (CUNA) and credit unions are urging 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 business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

65 of adults polled oppose credit card surcharges

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AUSTIN, Texas (8/22/12)--If retailers start charging extra fees for paying with plastic, nearly two-thirds of U.S consumers say they would stop using their credit cards, according to a new CreditCards.com poll. This is important to credit unions trying to market their own credit card programs.

Sixty-five percent of consumers who use credit cards would pay another way if a fee were charged, no matter how small, the survey found.

Visa and MasterCard have long banned such surcharges at businesses that accept their cards, but they agreed in July to abolish that rule as part of a settlement of a longstanding class-action lawsuit. If finalized, the settlement will free up retailers to impose a fee on their customers, possibly in early 2013, to help recoup the so-called "swipe fees" they pay every time a customer purchases with a credit card.

Retailers can charge customers no more than the amount of the swipe fee, which typically ranges from 1.5% to 3% of the purchase, according to the settlement, which still needs judicial approval. However, when asked in the survey if they were willing to pay a surcharge in that range--2%--Americans said "no way," said CreditCards.com.

Only 2% of Americans would be willing to pay a fee that was capped at 2% of the purchase price.

The CreditCards.com poll also indicated that those least likely to balk at paying a surcharge are those under age 35--the younger the respondents, the less willing they were to stop using their card. Credit unions are trying to penetrate this market. 

Only about half (52%) of 18- to 34-year-olds would use a different payment method to avoid a fee, compared with  63% of those age 35 to 49, and more than 70% of those older than 50. Also, one in four in the younger group said they would pay up to $1 extra to use plastic, while only 13% of those over age 65 were willing.

"The younger you are, the more accustomed you've become to electronic transactions and having credit," said Ken Manning, a marketing professor at Colorado State University. "Young people don't go to banks, and they tend to see dealing with cash as a hassle. So they might be willing to pay a fee."

Other highlights of the poll:

  • The groups who say they use credit cards "always" or "frequently" for retail purchases were more likely to report they would stop using their cards when faced with a fee-- 69% versus 60% of those who "sometimes" or "rarely" use plastic.
  • Income makes a difference in how willing consumers say they are to put away their plastic if faced with a fee. Of those earning $30,000 to $39,900 a year, about 42% said they'd stop using a credit card if they saw a surcharge. Of those making $75,000 a year or more, 71% would stop using credit cards.
The telephone survey of 1,005 adults was conducted Aug. 3-5 by GfK Roper Custom Research North America, using random digit dialing.

To read the all the findings of the poll, use the link.

CUs offer energy loans in tough summer

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MADISON, Wis. (8/22/12)--Record-setting summer heat has brought not only increased energy costs but additional wear and tear on appliances such as air conditioners and on homes' electrical circuits. Credit unions have launched loan initiatives to help their members finance the additional costs associated with the hot summer.

To help pay for energy efficiency upgrades, members of Elevations CU, Boulder, Colo., have access to a new suite of loans.

The program for businesses and homeowners is a part of the Elevations Energy Loan, which is the result of a partnership with Boulder EnergySmart and the Denver Energy Challenge.

The initiative is designed to provide property owners with a financing mechanism that is easy to access and cost effective, allowing for the installation of energy upgrades and improvements, the credit union said. Loan rates for energy upgrades and improvement on residential properties start at a 2.75% annual percentage rate (APR). Commercial rates start at a 3.75% APR.

With several terms, the Energy Loan Program extends the benefits beyond short term rebates, making almost any upgrade affordable, the credit union said.

In Maine, about 70% of credit unions offer some type of specific loan to finance home weatherization or steps to make homes more energy efficient, according to a survey conducted by the Maine Credit Union League (Weekly Update July 6).

Of the Maine credit unions that offer energy efficiency loans, rates range from 3% to 9%, with an average rate of 5%.

Judge rules in favor of CUs on taxi medallions

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NEW YORK (8/22/12)--A New York Supreme Court judge Friday blocked a state law that would have allowed the sale of more New York City yellow taxi medallions. The ruling supports a claim by credit union lenders that the state violated the "home rule" provision of the State Constitution.

Taxicab Service Association (TSA)--an association of credit union lenders that finance the yellow taxi medallion purchases in New York--had asked the court to invalidate the Street Hail Livery Law, or Hail Act, which was passed in 2011 to shore up an insufficient supply of taxis in the city and its outer boroughs. The Hail Act allowed up to 18,000 new taxi licenses in the city and its outer boroughs, according to court documents.

New York Supreme Court Justice Arthur F. Engoron ruled that the legislation violated the home rule provision of the State Constitution because New York City taxi service is not a matter of substantial state interest or concern and "a law that shifts power from the city's legislative branch to its executive branch, and micro-manages the exercise of that power, fails to bear a reasonable relationship to any such interest or concern."

The state legislature passed the law at New York Mayor Michael Bloomberg's urging after the plan was rejected by the City Council, which holds the power to issue new medallions.

Engoron also cited the State Constitution's "double enactment" clause. "If plaintiffs are correct that a substantial State interest does not support the subject legislation, then the subject legislation violates the 'double enactment' clause, because it repeals, diminishes, and/or impairs powers granted in the Statute of Local Governments but declares itself to take effect immediately, without a 'double enactment,'" Engoron wrote in his ruling.

On June 1, Engoron issued a temporary restraining order blocking the measure (News Now June 13). New York's Supreme Court is a lower trial court.

The individual credit unions joining TSA's suit include Lomto FCU, Melrose CU, Montauk CU and Progressive CU--all from the New York area.

Taxi medallions are symbols that are usually attached to the hood of New York City cabs. The medallions are licenses that are regulated by the city and allow drivers to pick up curb-side passengers who hail a cab. Credit union service organizations may originate business loans that are used to purchase taxi medallions, the National Credit Union Administration said in a legal opinion released in October 2010 (News Now Nov. 1, 2010).

CU System briefs (08/20/2012)

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  • TAMPA, Fla. (8/21/12)--Two women and a man were arrested Wednesday in connection with opening false accounts at three branches of Suncoast Schools FCU and obtaining $152,000 in fraudulent loans.  John Fitzgerald Hartley, 47, and Laura Jean Hall, 51, of Georgia, and Jodi Summers, 21, allegedly opened the accounts between Aug. 2 and Aug. 8 with counterfeit identities of victims from three states, and applied for three loans using the Internet. Detectives traced the Internet protocol addresses in the applications to a hotel in Tampa. They contacted each suspect and told them to return to the credit union to get the loan funds. One suspect allegedly went to a branch. Detectives followed the suspect back to the hotel and arrested the trio. They are charged with fraudulent use of personal information and grand theft in the second degree. Hartley also was charged with marijuana possession (Tampa Bay Times Aug. 17) …
  • PORTLAND, Ore. (8/21/12)--Bob Corwin, currently CEO of Meritrust CU in Wichita, Kan., has been named president/CEO of Portland, Ore.-based Advantis CU, said the Northwest Credit Union Association (Anthem Recap Aug. 17). He will succeed President/CEO Ron Barrick, who plans to retire. Corwin became CEO of what was then Boeing Wichita CU in 2008 after 30 years at First Tech CU in Beaverton, Ore. During his tenure Boeing changed its name to Meritrust, and assets rose to more than $830 million from $550 million. Advantis is the fourth-largest credit union in Oregon, with $930 million in assets and representing 48,000 members. Barrick, who led Advantis for more than 25 years, was named Oregon's Credit Union Advocate of the Year in 2010. Last fall he announced his plans to retire and worked with the board to find a successor …

Special recall meeting highlights a vocal few

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MADISON, Wis. (8/21/12)--As credit unions make decisions such as whether to merge with another credit union, attract new members who are fee sensitive, and open Facebook pages and blogs that encourage commentary, they also may open a Pandora's Box that could expose them to well-meaning members who take up a cause and become a "vocal few."

This past year, credit unions saw what people's protests--both on site at the branch and on websites--over fees did to banks. Credit unions also saw the power of members who provided unsolicited testimonials on websites and media comment pages. There might be an occasional snarky comment, but overall, credit unions have been on the good end of the exchanges, thanks to their member-centric philosophy.  But how should a credit union handle it when a vocal few attempt to drown out the rest of the members? Apparently the answer is to stay member centric.

"Management should consider the balance between the membership at large and the discontent of a small group of members," Brooke Van Vleet, the new CEO of St. Helens Community FCU in St. Helens, Ore., told News Now.

The $160 million asset credit union's board on Aug. 7 was presented a petition with 492 validated signatures out of its more than 15,000 members. The petition seeks a recall of five of its seven board members who supported a proposal to merge with another credit union and terminate a previous CEO's contract. The credit union, after having an independent auditing firm validate the signatures, did what its bylaws called for: scheduled a special meeting at 6 p.m. PT  Sept. 4 at the Scappoose High School Auditorium to address the issues.

"The board stands by its decisions and believes they were made in the best interest of the credit union," said Van Vleet. "They are disappointed the recall has occurred but are moving forward with the process in accordance with the credit union bylaws."

The credit union, like the petitioners, uses its website to help obtain the consistent and clear communications.   One of her first acts as CEO was to communicate the announcement that she was dedicated to being transparent with members and employees.  She recommended the board terminate the letter of intent to discuss a possible merger at this time because it was a distraction, she said in a letter to members on St. Helens Community FCU's website.

In discussing the balance of the vocal few and the membership at large, Van Vleet told News Now that "The bylaws are in place to govern such a petition process, and it is important that the entire membership have the opportunity to voice opinions and not just the vocal minority.  At the same time, it is critical to present a balanced viewpoint and be consistent and clear in communications to the membership and staff."

She noted that "we respect the right of members to voice their opinions through this process, but as the CEO I do not support the recall effort. I believe this is a baseless and impulsive recall that is only intended to be disruptive to the credit union."

Credit unions as well as other organizations "see more of this happening, with a few members more vocal," she said.

Other credit unions are encountering similar situations.  In some, members may go to the media to get their opinions across. For example, Thomas Leone of Vero Beach, Fla., wrote a letter Aug. 19 to the editor of TCPalm.com, telling why he was opposed to Indian River FCU's proposed merger with Lakeland, Fla.-based MidFlorida CU:  "If it ain't broke, then don't fix it," he said, noting he is "quite satisfied" with the credit union as it currently exists and the credit union "serves our community better than a larger one."  He urged members to attend a special meeting today to cast their vote on the merger proposal.

And last week, 15 or so members of the more than 70,000 members of Technology CU, San Jose, Calif., rallied for two hours to show their opposition of the credit union's proposal to change its charter to a mutual savings bank.  They were allowed to protest outside the front of the credit union so long as they didn't block entry and exits. The credit union even sent an employee out with bottled water during the event.

Vocal members also go to social media, where the credit union has no control of how its brand is used. For example, the brother of a woman killed in an auto accident wrote a blog complaining about the insurance company that refused to pay the death benefit. The message went viral (American Banker Aug. 20).

Although it is not new to see customers of companies "taking control of a brand via social media, what is new is the growth in social media--that's what brands should be thinking about, Frank Eliason, Citi's senior vice president of social media told the Banker (Aug. 20). "The customer owns the company message via social media."

CUs sue owner of defunct Central States Mortgage

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MADISON, Wis. (8/21/12)--Fifteen credit unions have filed a suit in a Wisconsin circuit court against Dick Jungen, former CEO of the defunct Central States Mortgage Co. (CSMC),  and others, alleging that they were involved in a secret loan pool that caused millions in losses to credit unions.

The Wauwatosa, Wis.-based Central States was 70% owned by credit unions and originated and sold residential and commercial mortgage loans as a credit union service organization (CUSO)  about 250 credit unions in the Midwest.

CSMC closed abruptly on March 9, 2008 and was appointed a receiver to oversee its liquidation in April 2009. The collapse resulted in several lawsuits by credit unions and CSMC's  parent company, alleging that Jungen and others had used another business, Interim Funding, to funnel bad mortgages to Central States, causing a $15 million loss (News Now April 10, 2009).

The newest suit, AM Community CU et al vs. M&D Investment Co. LLC of Hartland, Wis., was filed on June 12 in Dane County Circuit Court in Madison, Wis. Fourteen of the credit unions suing are based in Wisconsin; the 15th is in Illinois. The amended complaint alleges unjust enrichment/constructive trust and fraudulent transfer under a Wisconsin statute.

Specifically, the amended complaint alleges that Jungen and others had disclosed the existence, terms and identity of the investors in certain loan participation construction pools but failed to disclose their involvement as investors in another loan-participation pool, P-55. Also, P-55 contained a full recourse provision allowing the pool's participants to require CSMC to redeem their participation interested upon 90 days written notice to CSMC, said the complaint.

"The failure to disclose the identity of the P-55 Pool participants and the terms of the P-55 Pool participation agreements deprived plaintiffs of the opportunity to take measures to protect themselves against fraud and self-dealing, and to object to or establish oversight and/or control over the relationship between CSMC and the P-55 Pool," said the document.

The amended complaint also alleges that Jungen and the other defendants failed to disclose the terms of the contract that require CSMC to pay back investors of the pool and that they improperly liquidated the P-55 Pool without adequate notice. P-55 Pool participants were paid using CSMC corporate assets, including credit and cash causing monetary losses to the credit unions, said the court document.

News Now obtained the amended complaint from an attorney for the plaintiffs, Terrence M. Polich of Madison-based law firm Clifford & Raihala.

CU takes unusual route to growth

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BRADENTON, Fla. (8/21/12)--In attempts to bolster growth, Manatee Community FCU in Bradenton, Fla., earlier this year became the third credit union in Florida to be certified as a Community Development Financial Institution (CDFI) by the U.S. Treasury Department.

Known as Tropicana FCU until mid-2010, a select employee group credit union that served employees at beverage-maker Tropicana, Manatee Community saw its membership erode from a zenith of 4,200 to 3,141 today, largely as a result of the company's cutback on its Bradenton productions, said Cindy Barco, the credit union's president for the past 35 years (Herald Tribune.com Aug. 20).

The CDFI designation allows the credit union to expand its lending and other financial products to area residents who are underserved by other financial institutions, the newspaper said.

By focusing on low- to moderate-income residents with its programs, Manatee Community is seeing real growth, Barco told the paper. As of the middle of this year, loans were up 2.5%, compared with a decrease of 13% the year before, she added.

The credit union earned $15,000 in the first quarter, after losing $108,000 in 2011, the paper said.

By partnering with Suncoast Community Capital Corp., which offers credit-builder loan products, second-chance checking and financial education, Manatee Community can make business loans of less than $50,000, the paper said.

The credit union also will soon unveil an auto-purchase program that offers its low-income borrowers better interest rates than they normally would obtain. In October, it will introduce a program for homeowners who have no remaining equity in their homes, so they can obtain loans of $10,000 to $15,000 to make home repairs or energy-efficiency improvements, the paper said.

Dreamer Loan helps members in USCIS deferred action

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DURHAM, N.C. (8/21/12)--A Durham, N.C., credit union has announced a special loan to assist eligible members seeking educational and employment opportunities through the U.S. Citizens and Immigration Service (USCIS) deferred action process for young individuals who were brought to the U.S. as children.

Latino Community CU's Dreamer Loan will cover the $465 USCIS application expenses. The loan application process will be easy, low-cost, and available to members with or without credit history, said the $106 million asset credit union. Those under the age of 18 may apply for a loan with the help of their parents.

"Latino CU feels strongly about offering the Dreamer Loan to ensure that everyone who is eligible for deferred action has the means to apply in the hopes of increasing their educational and employment opportunities and ultimately improving their quality of life," said Luis Pastor, Latino Credit Union president/CEO.

To apply for a Dreamer Loan, an applicant must be or become a member of Latino CU and provide three documents:

1. A valid photo ID from any country, or a valid school ID;

2. Valid Individual Taxpayer Identification Number (ITIN); and

3. Proof of current physical address.

Latino CU will also offer loans for attorney fees; however those loans will be subject to the same requirements as a traditional personal loan.

Latino CU has 10 branches in North Carolina.

PSCU to host 24-hour Hackathon

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ST. PETERSBURG, Fla. (8/21/12)--PSCU is hosting a hackathon at the credit union service organization's (CUSO) MōPRO Innovation Lab in St. Petersburg, Fla. on Oct. 19-20.

The event, dubbed KnockOut 2012, gives design teams 24 hours to produce a viable proof of concept or working demo of a service, solution or process that promises to deliver real, cutting edge value for credit unions and/or their members.

Hackathons are typically all-night contests where team members collaborate to build or design a prototype of a product, which is then presented to a panel of judges to determine the idea with the greatest value.

For KnockOut 2012, PSCU judges will select up to three semifinalists, who will then present their concepts to PSCU's staff at one of the company's employee town hall meetings. PSCU employees will vote to select the winning team, whose members will receive an all-expense-paid cruise. Second- and third-place teams also will earn prizes.

PSCU KnockOut 2012 is open to all PSCU employees and employees of the CUSO's member-owner credit unions. KnockOut organizers also have arranged for competing teams to participate remotely if they cannot travel to the company's St. Petersburg, Fla. headquarters.

New report Card delinquencies down balances low

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CHICAGO (8/21/12)--U.S. credit card delinquency rates remain low, as does credit card debt, according to a new report from TransUnion, a global information and risk management company. This has implications for credit unions and other financial institutions.

The national credit card delinquency rate--the ratio of borrowers 90 or more days past due-- dropped to 0.63% in the second quarter from 0.73% the previous quarter, said TransUnion. The credit card delinquency rate is at its lowest level since reaching 0.60% in second quarter 2011. Prior to that, the last time the credit card delinquency rate was below its current level was in fourth quarter 1994 at 0.61%.

Average credit card debt per borrower increased the past year, moving up to $4,971 in the second quarter from $4,699 a year earlier. However, credit card debt continues to remain relatively low, more than $700 lower than the $5,719 in second quarter 2009.

"The national credit card delinquency rate continues to remain at the lowest levels we've observed in 18 years," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit. "It's a positive situation because average borrower balances have increased over the past year as new card originations have grown. These low delinquency rates reflect both continued conservatism in lender underwriting and the ongoing prioritization of card payments among consumers."

Total card originations in the second quarter grew by roughly 4% from the same period last year. The share of non-prime, higher-risk consumers (with a VantageScore credit score lower than 700 on a scale of 501-990) was 26.1%. That is slightly lower than one year ago (27%), but still much higher than the 20.6% observed in second quarter 2010.

"While non-prime borrowers made up a slightly smaller percentage of all new trades in this latest quarter, they continue to gain more access to credit," Becker said. "In conjunction with the growth in the overall number of card originations in the last few years, it means that the credit card pie is bigger, and non-prime consumers are getting a bigger slice of that pie.

"This is important to note, because one would think delinquencies would rise as non-prime borrowers gain more access to credit," he added.  "We've found that consumers continue to value their credit cards more than ever and will likely do so at least until unemployment abates."

Only five states saw increases in their credit card delinquency rates quarter over quarter. On a smaller level, 20% of metropolitan statistical areas (MSAs) reported increases in their delinquency rates in the second quarter. This was down from first quarter, when 28% of MSAs experienced an increase.

Based on current economic assumptions, TransUnion is maintaining previous forecasts for credit card delinquencies to remain near current levels, with potentially some seasonal fluctuations, through the end of this year. The forecast is based on seasonal effects and other economic factors such as anticipated gross state product, consumer sentiment, disposable income and employment conditions.

The forecast changes as the economy deviates from a conservative economic forecast, if there are unanticipated shocks to the economy affecting recovery, or if lenders materially change their underwriting standards, TransUnion said.

This information is part of Transunion's ongoing series of quarterly analyses of credit-active U.S. consumers, evaluating how they are managing credit related to mortgages, credit cards and auto loans.

Miracle Jeans Day gathering steam

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MADISON, Wis. (8/21/12)--Credit unions and leagues nationwide are organizing support for Miracle Jeans Day, when credit union employees will wear jeans to work in exchange for a $5 donation to their local Children's Miracle Network Hospitals.

Miracle Jeans Day, set for Sept. 12, is a national campaign for Credit Union for Kids.

As of Monday, 343 credit unions signed up to participate in Miracle Jeans Day, according to Felicity Guerin, Credit Union for Kids liaison for the American Association of Credit Union Leagues.

"Our goal is 500 credit unions," Guerin said.

Credit union leagues taking part include:

  • Credit Union Association of the Dakotas;
  • Georgia Credit Union Affiliates;
  • Hawaii Credit Union League;
  • Kansas Credit Union Association
  • League of Southeastern Credit Unions;
  • Mississippi Credit Union Association;
  • Montana Credit Union Network;
  • Mountain West Credit Union Association;
  • Credit Union Association of New York; and
  • Pennsylvania Credit Union Association.
The Credit Union Association of the Dakota is holding a contest between North and South Dakota to see which state can enlist the most credit unions to take part in the event.

The states with the most credit unions signed up to participate in Miracle Jeans Day include:

  • Texas--40;
  • California--35;
  • Ohio--25;
  • New York--21;
  • Michigan--13
  • Oregon--13
  • South Dakota--12; and
  • Minnesota--11;
Four business partners are also supporting Miracle Jeans Day, Guerin said. They are:

  • Cooperative Trust;
  • CO-OP Financial Services;
  • Enterprise Car Sales; and
  • Mitchell, Stankovic & Associates.
Support materials are also available for Miracle Jeans Day. They include:

  • Miracle Jeans Day marketing packet;
  • League marketing calendar;
  • Newsletter articles;
  • Sample chapter president e-mail; and
  • Suggested tweets.
Credit Unions for Kids, a nonprofit collaboration of credit unions, chapters, leagues/associations and business partners nationwide, raises funds for 170 Children's Miracle Network Hospitals. Credit unions are the third-largest sponsor of the hospitals, and 100% of every dollar donated goes to support research and training, purchase equipment or pay for uncompensated care for children.

More media coverage touting CUs

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MADISON, Wis. (8/20/12)--Checking account fees and member business lending aren't the only positive publicity touting credit unions recently in the likes of Yahoo! Finance, Bankrate.com, New York Daily News, and Huffington Post. Savings accounts and member service also are garnering publicity, but in a different way. Members themselves--and some columnists--are taking the time to write first-person accounts of their positive experiences with credit unions.

For example, Yahoo! Finance (July 31) carried an op ed from contributor Kim Adams, entitled: "First Person: Credit Unions Fit My Financial Needs," in which she noted that "after exploring my financial institution options, I have made credit unions the mainstay of my financial life. To me, a credit union provides a far superior service at a fraction of the price of keeping money at a traditional bank."  She wrote of the frustrations of dealing with banks that "always were introducing new fees, new restrictive policies and had a complete lack of customer service."

Fivecentnickel.com (Aug. 7) columnist Jeffrey Steele recounted his experience in "Bank on the Advantages of Credit Unions." Steele discussed long waiting lines at his bank. "Long waits in bank lines are just one of the myriad complaints about today's impersonal, corporately bland financial institutions." He noted fee-crazy philosophies, loan decisions made from corporate headquarters overseas and the impersonality of the banking experience.

However, for those missing "old-fashioned banking values, you may be able to find them once more at your friendly local credit union," Steele wrote, citing credit unions' not-for-profit structure and higher savings yields, lower average loan interest rates and lower and fewer fees. "In other words, they're a better deal than banks."

Steele interviewed Credit Union National Association (CUNA) senior economist Mike Schenk, who noted that the average rate on a five-year, new-car loan at credit unions was 3.1% while at a bank the rate was 4.51%. A $30,000 car loan at a credit union would save the member $250 per year, or $1,225 over the five-year span of the loan, Schenk told him.  Schenk also noted that many barriers to becoming a member of a credit union are gone.  Steele pointed readers to CUNA's and the leagues' website, www.asmarterchoice.org.

Other articles touting credit unions:

  • "Six steps to ditch your bank without fees and hassle" in Yahoo! Finance and HuffingtonPost.com (Aug. 7).  Brandon Ballenger of Money Talks News noted the "switching banks" trend and offered suggestions for switching banks with a minimum of effort. One tip was to comparison shop.  "Don't overlook credit unions, either. They often offer higher savings rates and lower loan rates than the megabanks. Search for them at the Credit Union [National] Association site."
  • "What to look for in credit union checking" in Yahoo!Finance and Bankrate.com (Aug. 13).  Heather Larson noted there's a credit union for everyone, citing statistics from CUNA. Larson interviewed credit unions, the Massachusetts Credit Union League, and financial services experts. Tips included: Look for convenience, investigate shared branching, ask about (financial) education opportunities, inquire about technology, check for stability, demand personalized service and insist on fraud protection.  Bruce McClary, spokesman for ClearPoint Credit Counseling Solutions in Seattle, told Larson that credit unions have more stability than banks because they have a stronger relationship with their members.
  • "Check out credit unions" in New York Daily News (Aug. 14). "If you are sick and tired of bank fees, there may be a solution--credit unions," said Phyllis Furman, in writing about a recent study that showed 72% of the nation's 50 largest credit unions offered free checking while only 45% of banks did.
  • "The Types of Savings Accounts: Which is Right for You?" in WiseBread.com (Aug. 6).  Author Matt Bellon outlines options for getting the most out of savings accounts. Under "Options for Better Rates," he listed credit unions. "Because credit unions are not-for-profit organizations, they too, usually offer better rates than brick-and-mortar banks." He wrote more credit unions "are loosening their membership requirements. The Credit Union National Association can help you find a credit union near you that you may be able to join."
  • "Credit unions still honorable," a letter to the editor of The State (Aug. 9) from Randall W. Robinson, president, South Carolina National Guard FCU, Columbia, S.C. Robinson noted that "the public ratings of bankers have declined dramatically" due to the financial collapse and the economy. "There is some merit to that. But I continue to believe that banking is an honorable profession. In financial institutions across America, there exists the same passion and honesty exhibited by a small-town banker more than 40 years ago. These financial institutions are called credit unions."

Wis. CU Shared Service Centers chair Braam resigns

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GREENFIELD, Wis. (8/20/12)--The Wisconsin Credit Union Shared Service Centers  (WCUSSC) Friday announced changes on the shared branching organization's board of directors, including the resignation of its board chairman, Quirin E. Braam.

Braam, former Journal CU president, retired on June 20 and has resigned from WCUSSC's board. Braam was instrumental in the development of the service organization and had been chairman and a board member since its inception in 1995.

"Quirin was the engine that made shared branching run in Wisconsin," said WCUSSC President Rick Hagopian. "We are fortunate to carry on with a devoted and experienced group of credit union professionals who embrace the collaborative credit union values Quirin established."

Kimberly Youngblood, senior vice president/chief operating officer of Focus CU, Wauwatosa, has been named as the new chair.  Sam Sauer, president of Gundersen Lutheran CU, La Crosse, will fill the director seat left vacant by Braam's retirement.

Jennifer Schilling, president of Empower CU, West Allis, replaces Youngblood as board secretary. Other officers are Vice Chair David Stark, president of Bull's Eye CU, Wisconsin Rapids, and Treasurer Alan Zierler, president of Capital CU, Kimberly.

Earlier this year, another retirement vacancy on the board was filled by Wisconsin Credit Union League President Brett Thompson.  Jon Lowrey, president of Dane County CU, Madison, rounds out the seven-member board.

WCUSSC offers mobile banking, remote deposit, disaster recovery and call center services in addition to shared branching.  Recently it and the league partnered with CO-OP Financial Services to offer CO-OP's surcharge-free ATM network and electronic funds processing for Wisconsin credit unions.  It operates 46 Credit Union Shared Service Centers.

Northwest CUs spread small biz financing in region

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BEAVERTON, Ore., and FEDERAL WAY, Wash. (8/20/12)--Northwest credit unions have outpaced the credit unions' national growth in small-business financing by 3%, according to the Northwest Credit Union Association (NWCUA).

From March 2011 to March 2012, Oregon and Washington credit unions increased the value of business lending by 9% to $2.498 billion with $957 million in Oregon and $1.54 billion in Washington. Nationally, credit unions increased their member business lending (MBL) by 6% to more than $41 billion in the same 12-month period, said NWCUA.

The growth has come despite increasing regulatory pressure and attacks by banks on credit unions' efforts to lift the MBL cap to 27.5% of total assets from 12.25%, the association said.

"Northwest credit unions anticipated the increased regional need for business lending in 2009 and stepped up to the regulatory requirements through education and expertise to guarantee that this type of lending is done in a safe and sound manner that is also friendly to small-business-owning members," said NWCUA CEO John Annaloro.

"When Congress finds the courage to bring this issue of lifting the MBL cap to a vote and it passes, Northwest credit unions will be in a position to inject capital into a floundering economy whose small-business engine has sputtered at the closed hand of traditional sources of financing," he added.

While credit union MBLs rose 6% from March 2011 to March 2012, the Federal Deposit Insurance Corp.  reported that community banks' business lending decreased by 4%. That highlights "a stark difference" in how they address the recession and need for small business financing, said NWCUA.

Moving the cap to 27.5% of assets will produce an additional $13 billion available for small business lending and help create 140,000 new jobs, according to the Credit Union National Association. 

In the Northwest, lifting the cap would make more than $848 million in loans and 9,400 jobs available, said NWCUA. The average size of a credit union MBL in the Northwest is $264,000. However, MBLs as small as $5,000 or less are available at 99 Oregon and Washington credit unions with MBL programs.

S.C. plant lays off 200 CU offering help

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ABBEVILLE, S.C. (8/20/12)--A South Carolina credit union is offering financial assistance to its members affected by a layoff of roughly 200 employees at a flooring manufacturer.

Greater Abbeville (S.C.) FCU expects about 60 members will be among the 200 employees at Mohawk Industries plant in Calhoun Falls affected when the plant shutters its facility at the end of September, said Faye Crocker, CEO of the credit union (Anderson Independent-Mail Aug. 16). 

The credit union said it will:

  • Refinance loans to lower monthly payments, with 60 days of no payments upon refinancing;
  • Help members who are seeking new jobs to find other loan options; and
  • Offer free financial counseling to take members through the process of creating a budget and managing expenses on a reduced income while looking for new employment.

MnCUN Banks use media to renew CU tax challenge

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ST. PAUL, Minn. (8/20/12)--The Minnesota Credit Union Network (MnCUN) says banks are stepping up their challenges to credit unions' tax-exempt status, using state newspapers as a forum. MnCUN has been actively participating in an exchange of letters to the editor to counter banks' claims about credit unions' tax-exempt status.

Joe Witt, president/CEO of the Minnesota Bankers Association, wrote an Aug. 1 letter to the Brainerd Dispatch calling for a re-examination of Minnesota credit unions' tax-exempt status.

In essence, Witt claims credit unions no longer are honoring their mission of serving "people of modest means," which garnered them an income-tax exemption back in the 1930s.  Rather, credit unions now are abandoning that mission and focusing on wealthy customers, and placing branches in middle and upper income areas, he wrote.

MnCUN president/CEO Mark D. Cummins countered with an Aug. 6 letter to the editor of the Dispatch.

"In 1937, Congress exempted credit unions from federal income taxes because they are non-profit, democratically controlled cooperatives that return earnings to the people they serve," Cummins wrote. "In fact, Congress encouraged the success of credit unions to, among other things, foster the development of a system of financial cooperatives that would serve as a valuable alternative to the for-profit banking system.

"Credit unions' tax exemption was deliberated, reviewed and reaffirmed by Congress in 1951 and again in 1998. Since credit unions' structure has not changed, the reasons for the affirmation of credit unions' tax-exempt status are as valid, if not more valid, today," Cummins said.

Cummins went on to mention how credit unions' tax exemption benefits consumers.

"As organizations owned by members, any benefits credit unions receive from their tax-exemption status are passed onto those they serve," Cummins wrote. "These benefits are given in the form of fewer fees, lower rates on loans and higher savings rates. Therefore, a tax on credit unions would reduce the financial savings they can pass onto everyday consumers. In reality, this tax would be a tax on consumers.

"The substantial savings Minnesota credit unions provide to consumers far outweighs any revenue that would be raised by taxing credit unions," he added.

Cummins' letter prompted an Aug. 8 letter to the Dispatch from Mike Riley, CEO of Bremer Bank in Brainerd. Riley argued that although credit unions' assertion that they pass savings accrued from their tax-exempt status on to members may be true, that model doesn't hold up and isn't relevant if it were applied on a large scale to all deserving businesses--and the negative impact that would have on government programs.

"But there's a problem with that model. If businesses no longer paid taxes, who would pay for the government programs we all use and need?" Riley wrote.

Chuck Albrecht, president/CEO of Mid-Minnesota FCU in Baxter, responded to Riley regarding credit unions' relevancy with an Aug. 14 letter to the Dispatch.

" … There are more than a few reasons that support the relevancy of credit unions," Albrecht wrote. "If every teacher, waitress, firefighter, [and] everyday consumer joined a credit union, they could save, on average, more than $100 per household annually. They would also be offered financial counseling and other financial aid and education programs at no cost.

"Credit unions' not-for-profit model benefits all consumers in that it helps to keep the financial marketplace in check. Imagine how high banking rates and fees could climb if turning a profit, rather than serving consumers, became the bottom line?" Albrecht concluded.

To read the letters, use the links.

CUs MBL to Culvers gains media notice

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JACKSON, Mich. (8/20/12)--A member business loan (MBL) from Jackson, Mich.-based EECU helped finance the construction of a fast-food restaurant in the Ann Arbor, Mich.-area and captured the attention of two media outlets.

EECU partnered with the Michigan Certified Development Corp. and the Small Business Administration 504 loan program to help Culver's restaurant franchisee Karen Richard open a new location.

In interviews with The Jackson Citizen Patriot (MLive.com) and WLNS-TV6 News, Steve Cobb, EECU president/CEO, stressed that while EECU would like to make more MBLs, it is limited because of the current cap of 12.25% of assets.

The credit union is at about 7% to 8% percent of its MBL, Cobb said. "It kind of puts us in a tough spot," Cobb told Mlive.com.

Cobb's credit union has partnered with other Michigan credit unions to help find business loans. "For the state of Michigan, it's been a great benefit," Cobb told Mlive.

Speaking with WLNS-TV6, Cobb described legislation before Congress designed to raise the MBL cap and the impact it could have on the economic recovery.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets. Doing so would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

On MLive.com, reporter Tarryl Jackson solicited feedback, asking readers "Do you think legislation should allow credit unions to loan more to small businesses?"

This an opportune moment for credit unions to engage the public in conversation about MBLs, CUSG Marketing Consultant Jonathan Fuhrman, who specializes in the use of social media, told the Michigan Credit Union League (Michigan Monitor Aug. 17)

"Newspapers and other content published online are no longer about one-way communication," Fuhrman said. "The comment section of a story is where readers have the chance to have their say, and in this case, it is a prime opportunity to provide pro-credit union feedback."

Fuhrman encouraged credit union supporters to log onto the comments section and post their opinion, and to monitor ongoing dialogue.

To view the WLNS-TV6 report, use the link.

Hoosman wins Wegner Award for individuals

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MADISON, Wis. (8/20/12)--Hubert Hoosman Jr., president/CEO of Vantage CU, Bridgeton, Mo., will be the recipient of the 2013 Herb Wegner Memorial Award for Individual Achievement, announced the National Credit Union Foundation.

Hoosman's honor will be one of three Herb Wegner Memorial Awards presented at a special dinner hosted by NCUF in Washington, D.C., on Feb. 25, during the Credit Union National Association's 2013 Governmental Affairs Conference.

"Hubert Hoosman's dedication to moving the credit union world forward is also visible in all of the local, regional, national and international endeavors in which he has been involved," said NCUF Awards and Recognition Committee Chairman Bob Schumacher, calling Hoosman "a renaissance credit union leader."

Hoosman began his career at Educational Employees CU--the credit union changed its name to Vantage CU in 2002--as a teller in 1982. He has served as loan department manager, branch manager, vice president of operations and executive vice president. He was named president/CEO of the credit union in 1994.

When Hoosman started at the credit union in 1982, the credit union had $34 million in assets. Today, Vantage CU is the fourth-largest credit union in Missouri, with assets approaching $700 million.

Hoosman has channeled his credit union's resources to battle poverty in East St. Louis. Vantage CU has partnered with local high schools to create a work-study program in which employees of Vantage CU participate with students in mock job-interview exercises, providing interviewing skills and job leads for students seeking employment after graduation.

Vantage CU also has offered internships to University of Missouri-St. Louis students through the African American Credit Union Coalition's "Reaching Toward the Future" program. Several interns have gone on to work full-time in credit unions.

He led credit unions across the country in raising funds for a national monument in Washington D.C. to recognize Martin Luther King Jr. In 2006, Vantage CU donated $50,000 to fund the monument. Working with AACUC, Hoosman secured the support of 134 credit unions, 13 credit union leagues, three corporate credit unions, industry trade associations, and six credit union service organizations nationwide to support the effort.

Online registration for dinner tickets will be available later this year on the NCUF website. Use the link

Two Missouri CUs announce intent to merge

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SPRINGFIELD, Mo. (8/20/12)--Two Springfield, Mo.-credit unions--BluCurrent CU and Greater Ozarks Community CU (GOCCU)--have announced their intent to merge.

The merger, which has received approval from the Missouri Division of Credit Unions and the National Credit Union Administration, is expected to be finalized Aug. 31.

BluCurrent CU with assets of $140 million will be the continuing credit union.

The $6 million asset GOCCU's current branch in Springfield will remain open until BluCurrent CU opens a new Springfield branch in the fall.

"In recent months, it has become increasingly difficult to provide ever-changing financial products and services to our members and maintain a competitive edge within today's regulatory environment," said Al Wagner, Great Ozarks Community CU board chairman.

CU System briefs (08/17/2012)

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  • GREENSBORO, N.C. (8/20/12)--Two Republican candidates for Congress from North Carolina met last week with credit unions in the state. According to the North Carolina Credit Union League, George Holding, candidate for the 13th District, and Robert Pittenger, 9th District candidate, are likely to win the General Election in November (The Weekly Conversation Aug. 17). Holding is in the race to replace U.S. Rep. Brad Miller, who is not seeking re-election. "We were able to bring together credit union representatives from across the district," said Dan Schline, senior vice president of association services at the league. Holding learned that nearly 300,000 members live in his district and heard from representatives of Coastal FCU, which hosted the meeting, and from Freedom FCU and NC Community FCU.  Pittenger, a former state senator, is running for a seat vacated by retiring U.S. Rep. Sue Myrick. Pittenger spent time Friday learning more about credit unions and their work in Charlotte. Meeting with him were representatives from Charlotte Metro CU, Carolina Postal CU and Truliant CU. "We're going to have some new faces in North Carolina's congressional delegation," said Schline, noting "the opportunity to introduce two of the folks we're likely to be working with in the coming year to local credit unions." …
  • GREENSBORO, N.C. (8/20/12)--Paulette Bowden, vice president of IRA Systems and Projects for State Employees' CU (SECU) in North Carolina, died Aug. 12. She was 63. Bowden served SECU for 32 years. She was instrumental in establishing the credit union's IRA department, which services more than 132,000 tax advantaged accounts with nearly $3 billion in assets. In 2009, she led a new Education Planning initiative, FAFSA Day, which is held annually in February in all 244 branch locations statewide. In June she accepted on behalf of the credit union's FAFSAs program the North Carolina Credit Union League's first place Dora Maxwell Social Responsibility Award. She is survived by one daughter, a grandson, four siblings, a foster daughter, and numerous nieces, nephews and foster children (The Weekly Conversation Aug. 17) …
  • HARRISBURG, Pa. (8/20/12)--Bernette Taylor, a member of the board of directors at Philadelphia-based American Heritage FCU, died Aug. 10, according to the Pennsylvania Credit Union Association. He was 78.  Taylor had been a board member since 1987. He served as chairman of the credit union's Legislative Committee and the delinquency/Loan Review Committee, and was a member of the Budget and Personnel committees. He retired from the Budd Co.  and served on the executive board and was a trustee for UAW (Life is a Highway Aug. 17) …

CU extends naming rights with K.C. T-Bones

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KANSAS CITY, Mo. (8/17/12)--CommunityAmerica CU and the Kansas City (Mo.) T-Bones, a minor league baseball team, have renewed their long-term agreement for the naming rights for the team's ballpark, they announced Tuesday.

The ballpark has been known as Community America Ballpark ever since the T-Bones moved to Kansas City from Duluth, Minn., 10 years ago, said Ballpark Digest.com (Aug. 15).  The  more than $1.8 billion asset credit union has been the only entity with naming rights to the stadium in the stadium's history.

Specific terms of the deal were not disclosed.

"In practice, we could not have invented a better, stronger partner," said T-Bones President Adam Ehlert. CommunityAmerica CU is very well-aligned with our values and focus, and most significantly, or fans really appreciate that. "

Lisa Ginter, CommunityAmerica CU chief operating officer, said that more than being a naming rights sponsor, the ballpark "clearly demonstrates our commitment to providing our community with affordable family-friendly entertainment. We believe this sponsorship brings more awareness to Kansa Citians that they can--and should--be members of our credit union to benefit from our sincere approach to helping them succeed financially. For that reason and more, we consider this a homerun for both organizations."

The ballpark seats 6,270 baseball fans. Over the 10 years the park has existed, more than three million fans have attended events there. The ballpark is used not only for baseball games but also for professional soccer, concerts, photo and video shoots. It was the site of a June 3, 2007, world-record setting performance of the Deep Purple hit, "Smoke on the Water," by 1,683 guitarists in a publicity stunt for a radio station.

The T-Bones have the second-highest attendance in the 13-team American Association, said the park's website.

Fed Bank in NY Small biz still in credit crunch

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ALBANY, N.Y. (8/17/12)--New York's small businesses are still having trouble borrowing, indicating that banks in the area have not loosened their lending standards since the economic crisis began in 2008, according to a poll conducted  by the Federal Reserve Bank of New York and reported in EmpireStateNews.Net Thursday.

Business microloans--those under $100,000--are the most in demand but are hardest to secure, the poll indicated. Most businesses that received funding indicated they did not receive approval for the full amount they needed, the article said.

Credit unions have demonstrated they can perform business lending safely and have continued to lend when other financial institutions pulled back, said the publication, which is part of the Statewide News Network Inc.

"Small businesses are the engine of growth for our economy here in New York and across the country," said William J. Mellin, president/CEO of the Credit Union Association of New York (CUANY) in the article. "Statistics show that credit unions have stepped up during the recent financial crisis to help fill a void in the availability of business credit."

He noted that credit unions could do more if their member business lending (MBL) cap were raised to 27.5% of total assets from the current 12.25%.  Congress is considering the Small Business Lending Enhancement Act (H.R. 1418) and a number of New York lawmakers are among those co-sponsoring the bill. 

The article quoted estimates from the Credit Union National Association (CUNA) that in New York alone, credit unions could infuse $1 billion in tax-free capital to small businesses and create about 10,000 jobs. Nationally, those figures would be $13 billion in loans to small businesses and generating 140,000 new jobs, said CUNA.

"The only thing standing in the way of the bill's passage is opposition from the banks, which have reduced their lending," Mellin told the publication. "This should not be a credit unions-vs.-banks issue. The only considerations should be whether (the bill) can help address the current jobs deficit and whether it will be beneficial to our economy. The answer to both is yes," he added.

For the full article, use the link.

Free gas in 10 cities from CUs small banks

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MADISON, Wis. (8/17/12)--Thousands of consumers stood in line Wednesday and Thursday at specific gas stations nationwide, as credit unions and small banks gave away free gasoline in efforts to encourage consumers to "Take Back Your Banking" from the largest U.S. banks.

The giveaways were held in 10 U.S. cities: Baltimore; Memphis; New Orleans; New York; Portland, Ore.; St. Louis; Lake Charles, La.; Jackson, Miss.; Lima, Ohio; and Little Rock, Ark. (MarketWire Aug. 16).

Representatives from credit unions and community banks who have partnered through  Kasasa.com--a national brand of free checking and savings accounts--were present at locations in each city to pump $20 worth of gasoline to each of the first 200 consumers in line, Marketwire said.

In northwest Atlanta, the gas giveaway, sponsored by CU of Atlanta and Family Savings FCU, brought attention to consumers who are tired of mega banks' high fees and highlighted credit unions offering banking products with great service attached, said Leslie Bishop, a spokeswoman for Family Savings (The Atlanta Journal-Constitution Aug. 16).  

In Memphis, a branch of Jackson, Miss.-based Hope CU teamed with Kasasa and a local bank to not only give away free gasoline, but also to educate consumers about credit unions and community banks as alternatives to megabanks (WMC-TV.com Aug. 15).

In the Jackson, Miss., area, employees of Hope CU and Magnolia FCU--in addition  to providing information about credit union services--doubled as gas station attendants during the gasoline giveaway (WLBT.com Aug. 15).

Voting opens for next CU on the Road Star

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BISMARCK, N.D. (8/17/12)--Voting began Wednesday for the Credit Union Association of the Dakotas' (CUAD) next "CU on the Road TV Star."

CUAD has been conducting a credit union awareness campaign all summer across North and South Dakota. As part of that campaign, the "CU on the Road" tour recorded videos of members' best credit union stories last week at the Sioux Empire Fair in Sioux Falls, S.D., in search of the next "CU on the Road TV Star."

Through Aug. 22 voters can select their favorite from 40 videos on the campaign Facebook page.

The top three vote receivers will each get a $250 prize.  Then, CUAD will choose one video from the final three. The person featured in the selected video will be the next "CU on the Road TV Star," and will be featured in a television commercial later this year.

Winners will be announced Aug. 24.

Study CUs upending less-tech-savvy stereotype

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BOSTON (8/17/12)--Credit unions are catching up to larger banks in the race for online banking convenience, according to a new study of more than 1,400 consumers by market research firm Chadwick Martin Bailey.

For years, large banks touted their convenience as a consumer choice, while credit unions and smaller banks were chosen for personal service (PRWeb Aug. 15).

The ease of online and mobile banking is changing this dynamic, with credit unions offering remote services and bridging the convenience gap for their members, the study found.

Additional findings include:

  • Credit unions are upending the stereotype that they are less tech-savvy than larger banks. While big banks have a reputation for offering more online and mobile services, credit union members report online banking use that is as high as large-bank customers, and members give credit unions higher marks on performance.
  • For many bank customers, online banking is a key element of banking convenience: 64% of all bank customers use online banking in some form, and a fifth have used mobile banking. While customers still value branch and ATM access, 43% agree online services are a key element of banking service.
  • Financial institutions can differentiate themselves by offering good service--including online and mobile banking: Nearly half (48%) of bank customers believe banks can differentiate themselves with good service. The definition of 'good service' is evolving; convenience is no longer just about more branches and ATMs, but also about innovative technologies and remote banking options. (Editor's note: Credit unions' members already know the value of good service, according to several customer satisfaction surveys over the years.)
"These findings suggest a new banking value proposition is emerging," says Jim Garrity, managing director of Chadwick Martin Bailey's financial services practice. "The growth of online and mobile banking services means convenience and accessibility don't belong solely to large bank customers."  Financial institutions "able to provide secure, usable, and reliable online services combined with top-notch service will be most competitive," he added.

In the study, data were collected from 1,433 U.S. residents, aged 18 to 75, through a nationally representative online survey questionnaire within the U.S. The survey was conducted by Chadwick Martin Bailey in February.

New website feature shares N.C. CU difference

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RALEIGH, N.C. (8/17/12)--The North Carolina Credit Union League (NCCUL) has added a section to its revamped website to spotlight the ways in which state credit unions remain true to their original mission.

"People Not Profit" features the state's credit union members sharing stories about how their credit unions have helped them. The segments include video clips and written testimonials.

The section also shares programs credit unions have developed to help members and their community and volunteer efforts.

The videos also are featured on YouTube. 

"The ultimate goal of People Not Profit is to collect and share these stories so that more credit union members and consumers discover the power of the credit union story," said Jeff Hardin, NCCUL's director of communications, on the league's Weekly Conversation newsletter (Aug. 9). "As cooperative organizations, credit unions are different from banks and other financial service providers. Illuminating those differences through the words and experiences of everyday people can only help to connect more people to credit unions."

Hardin travels to credit unions statewide to meet with and videotape members as they tell their stories. "While we work with credit unions to recruit members who are willing to share their stories, the video shoots are not rehearsed at all," Hardin said. "I just turn on the camera and ask people how their credit union has helped them."

To view the videos, use the link.

Missouri CUs endorse congressional candidate

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ST. LOUIS (8/17/12)--The Missouri Credit Union Association (MCUA) announced the endorsement of Ann Wagner, Republican candidate for the District 2 U.S. congressional seat, as a credit union champion.

MCUA represents 134 credit unions and 1.37 million consumers served by credit unions. In District 2, there are more than 200,869 credit union member-owners.

Click to view larger image The Missouri Credit Union Association announced the endorsement of Ann Wagner (center), Republican candidate for the District 2 U.S. Congressional seat, as a credit union champion.  (Photo provided by the Missouri Credit Union Association)
Wagner supports the credit union tax status, which allows credit unions to return profits to the people they serve. If elected, she has pledged to work directly with credit unions on credit union issues, said MCUA.

"As the daughter of small-business owners, I understand the need for entrepreneurs to have access to capital and that government should simply get out of the way of hard-working Americans who are trying to make a living and run a business," Wagner told the association.

She supports legislation that would raise the credit union small business lending cap and allow more loan opportunities for small business owners, MCUA said. 

The Credit Union National Association (CUNA) and credit unions are urging 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 business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

"I am grateful for the Missouri Credit Union Association naming me a credit union champion and pledge that I will continue to fight for our small businesses in Congress," Wagner said.

The purpose of endorsing candidates as credit union champions is to support and publicly recognize candidates who champion credit union issues and take action, even in the face of opposition, on behalf of credit union members, consumers who benefit from credit unions, and credit unions, MCUA said.

Wagner's "support and willingness to work with Missouri credit unions on issues of concern will help all consumers," said MCUA President/CEO Mike Beall.

Filene report High tech attracts more touches

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MADISON, Wis. (8/17/12)--Investments in high-tech service delivery were once believed to lower per-transaction costs for credit unions. Instead, members are using both technology and in-person channels, and have doubled the number of contacts with their credit unions, according to a new report from the Filene Research Institute.

Rather than benefiting from cost efficiencies of less expensive channels, credit unions are forced to adopt and pay for more ways to serve members, according to the report, "The Future of the Branch."

The paper offered the predicted compound annual growth rate for several member channels, including:

  • Branch: 1.14%;
  • ATM: 1.32%;
  • Contact center: 3.57%;
  • Mobile: 91.29%; and
  • Online: 8.58%.
The challenge for credit unions is managing their channels in a holistic manner to allow members to move from one channel to another without any thought to physical location.

The report offered eight tips for channel convergence:

  1. Start with priority interactions with members: Focus on make-or-break interactions that are critical in members maintaining their relationship with the credit union. On average, members who connect through online channels are 35% more profitable than those who only have an offline relationship.
  1. Articulate the endpoint vision and key milestones: The report suggests that credit unions avoid the lure of "cool" technology. Instead, start with the end goal and find technology that will help achieve it. For instance, videoconferencing can be a cost-effective way to bring employee resources to multiple branches, but it also can be an expensive flop if members are resistant to anything but a face-to-face interaction on certain transaction types.
  1. Pilot to prove value and get buy-in: Technology and member expectations change so quickly that it's not always possible to spend extensive time on evaluation and execution. The report recommends using the Internet when possible to cut costs and implementation time. The web typically is a faster, more efficient and less expensive way to pilot a project.
  1. Have a truly multichannel, cross-disciplinary team: Adding breadth to the team helps to ensure that the concerns of every channel are addressed and leads to a better final result.
  1. Use a multichannel member-decision engine: It's critical to create a place where data from every channel can be gathered and mobilized, but it's also important not to get bogged down in the process. Instead of worrying about how to manage every piece of data, start with priority member interactions and determine which data are needed and how to run analytics to determine what's going right or wrong.
  1. Get digital right: It's typically faster and easier to pilot programs in the digital channel.
  1. Rethink value creation and align incentives: Provide incentives that encourage employees to drive members to desired actions.
  1. Win the battle for hearts and minds: It's critical for in-branch staff to feel part of the team. They should be aware of and know how to use the tools being offered through every channel so that they can support and promote the credit union vision.
To access the complete report, use the link.

CU System briefs (08/16/2012)

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  • PROVIDENCE, R.I. (8/17/12)--A man who had served time for six bank robberies in Rhode Island and Massachusetts in 2004 and 2005 was sentenced to more than 12 years Wednesday for robbing a branch of Pawtucket (R.I.) CU in February.  Thomas Flannery, 37, of Sunnyvale, Calif., had pleaded guilty in May to one count of bank robbery. Flannery was arrested at a hotel on the same day as the credit union robbery. He was arrested in connection with another spree of holdups in Massachusetts, said U.S. Attorney's office (Associated Press Newswires Aug. 16) …
  • STANWOOD, Mich.(8/17/12)--U.S. Rep. Dave Camp (R-Mich.) hosted a golf tournament Aug. 6 in which 10 credit union leaders from the Mid-Michigan and Moon Chapters participated, said the Michigan Credit Union League (MCUL) (Michigan Monitor Aug. 13). Representatives from Northland Area FCU, Besser CU, Members First CU, Members CU, Dow Chemical Employees CU, United Financial CU, Wildfire CU, and Isabella Community CU joined the MCUL & Affiliates staff Jordan Kingdon and Shawn Wolbert in filling three foursomes for the event. From left are Eric Brubaker of Members First CU, Midland; Camp; and Marc McKellar, Members CU, Traverse City. (Photo provided by the Michigan Credit Union League) …
  • HARRISBURG, Pa. (8/17/12)--Charles Sirko Jr., a founder of Hopewell Joint School Employees FCU (now Clearview FCU) in Moon Township, Pa., died Wednesday, according to the Pennsylvania Credit Union Association (Life is a Highway Aug. 16). He was 84. Sirko served as treasurer/manager of Hopewell Joint School Employees FCU for 52 years. The credit union merged with Clearview in 2008. He retired from the Hopewell Area School District, where he taught phys-ed and health for 33 years …

New cybercrime trends developing

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MADISON, Wis. (8/16/12)--While cybercriminals focus on making a fast buck with e-mail, texting and phone frauds designed to capture consumers' account numbers, other cybercrime trends are worth noting.

Several new ones are featured in the Internet Crime Complaint Center's  (IC3) latest scam alert (Aug. 8), some offering new twists to old scams.  Credit unions in educating their members to be wary of any fraud, may want to include information about these. They include:

  • Fake political survey.  A multi-choice "political survey" is taking advantage of consumers during the election year, said IC3. The scam involves telephone calls to consumers. After answering the survey, they are told they have won a free cruise to the Bahamas.  The caller, after providing a website address to "prove legitimacy," requests the "winner's" e-mail address for notification purposes and credit card information to cover port fees. The website has limited information, with photos, testimonials, and "Caribbean Line" banner.
  • Online phonebook. IC3 received several complaints about a phone book website, where anyone could post other individuals' information to the site. Some were verbally bullied, saw uncensored comments and false accusations posted about them. Personal information available on the site included: full name, unlisted cell phone numbers, e-mail addresses, direct links to private Facebook accounts, photos and more. The website allows users to anonymously call anyone on the site directly from the Web, as well as track them with a Global Positioning System.
  • Free credit service website. A website claiming to offer "free" credit services such as credit scores and credit monitoring generated more than 2,000 complaints to IC3. Customers reported being charged a monthly service fee. The agreement terms advise that the "free" report lasts only for a limited time. At the end of the term, the website, using financial information the customer provided charged a monthly membership service ranging from $19.95 to $29.95. The Better Business Bureau has given the website an F rating because 1,037 complaints were filed against the business, eight were not resolved, 17 were deemed serious,  and advertising issues were involved, said IC3.
In addition to IC3's report, and of specific interest to credit unions' security staff, Guardian Analytics and security firm McAfee have discovered a criminal operation, dubbed "Operation High Roller," that targets high balance bank accounts from the U.S., Latin America and countries from the European Union (softpedia.com June 27 and CIO India News July 5).

The operation highlights the fact that criminals continually evolve and advance their methods and that financial institutions need to re-examine their security controls and assumptions and not rely just on existing security strategies to protect consumers' data, said CIO India News.

The report notes a shift from traditional man-in-the-browser attacks on the victim's PC to server-side automated attacks. Criminals have moved from multipurpose botnet servers to using servers dedicated to processing fraudulent transactions.

It also said the campaign is global, affects commercial accounts and high net-worth individuals, and impacts financial institutions, including credit unions, of all sizes.

CUs help members prepare for back to school

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MADISON, Wis. (8/16/12)--With the start of a new school year just days away, credit unions are helping their members with supplies, budgeting, advice and financial assistance.

Young & Free Michigan spokester Austin Chapman was interviewed on FOX 2 Detroit's Money Monday segment about the importance of finances for students headed to college this fall. Discussing planning, budgeting, and credit management as well as his life as a college student, Chapman shared advice for students and young adults managing their money and living on their own for the first time.

The appearance was part of the larger effort by Michigan First CU, Lathrup Village, Mich., and the Young & Free Michigan program to increase the financial knowledge of local 18-25 year-olds in metro Detroit.

Other credit unions assisting their local schools include:

  • St. Helens Community (Ore.) FCU, which donated nearly $3,400 through its community outreach program, CU 4 A CAUSE to St. Helens Elementary schools. The St. Helens Backpack program provides bags filled with child-friendly, non-perishable food that children take home on weekends during the school year in their backpacks.
  • CO-OP Service CU, Livonia, Mich., which recently completed its fourth annual Backpack Drive. Partnering with Volunteers of America, 96.3 WDVD and Fox 2 Detroit, Co-op Services collected new backpacks, folders, notebooks, pens, scissors, pencils and other supplies at donation boxes in the credit union's eight branches (Michigan Monitor Aug. 13).
  • Educational Community CU, whose staff donated a large load of items to Kids Connections, an organization whose youth-centered goals are to provide life skills and educational programs, build social skills through mentoring/friendship connections and  generate community involvement. Donated items include infant diapers, kids' clothing, books, toys and snacks (Michigan Monitor Aug. 13).
  • A+ Education Foundation, a philanthropic arm of A+ FCU, Austin, Texas. It awarded $67,000 to 74 grant recipients. The funds cover the cost of programs, supplies and training to improve the classroom experience for students in Central Texas. This year's 74 winning submissions included a vocational and life skills program, play materials for school counseling, an outdoor classroom, reading clubs, robotics, a writer's den program, speech therapy, improving the effectiveness of teaching through technology, a social skills enrichment program, linking the school garden to academic achievement, and a motor sensory and therapy lab.
  • Northwest FCU Foundation, Herndon, Va., which recognized the achievements of 26 college students in school, at home and within their communities, with a  combined $115,000 in scholarships. The foundation has two scholarship programs: The Ben DeFelice Scholarship, which presented $5,000 each to 20 students; and the Central Intelligence Retirees Association (CIRA) Scholarship, which awarded $2,500 each to six students.
  • The Suncoast Schools FCU Foundation, Tampa, Fla., which donated $5,000 to Brandon's Emergency Care Help Organization (ECHO). The grant will help fund ECHO's Back to School Program, which provides Brandon-area students with the basic necessities for school. The grant will provide about 250 children with a voucher for a new pair of shoes, socks and underwear and back-to-school items.  Families of the children will also receive food, personal hygiene products and clothing.
  • LBS Financial CU, Long Beach, Calif., which is collecting school supply donations for three local school districts for its second annual Adopt-a-School program. This year, the credit union has adopted Long Beach Unified's Hamilton Middle School and ABC Unified's Tracy High School. LBS Financial CU promoted the drive at area branch offices and on its website during the summer to encourage members and employees to donate. The credit union also matches employee cash donations dollar-for-dollar (Press-Telegram Aug. 7)
  • Coastal Community FCU, Galveston, Texas. At its annual "Back to School Bash,"  it distributed 400 backpacks with free school supplies, provided free vaccines for school-age children, and entertained kids of all ages with music, video games, a moonwalk and fajitas, according to the Texas Credit Union League ( Lone Star Leaguer Aug. 15).

CUNA Lending Council passes 1100-member milestone

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MADISON, Wis. (8/16/12)--The CUNA Lending Council announced it has surpassed the milestone of 1,100 members, a result of several years of consistent growth and members' growing commitment to the credit union industry.

Lending is now among two CUNA councils with membership in excess of 1,100, and among three CUNA councils with membership in excess of 1,000.

"The continued growth in the council membership reflects the value we bring to each other and how the collaboration helps us improve the financial lives of our respective membership each day," said Aaron Bresko, lending council executive committee chair and senior vice president/chief lending officer at GTE Financial CU in Tampa, Fla.

Through Aug. 31, credit union executives can join the Lending Council or any of the other five CUNA councils and save $100 on membership dues. The six councils encompass a network of more than 5,400 credit union professionals.

Calif. DFI OKs four mergers merger expected in Conn.

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SACRAMENTO, Calif. (8/16/12)--The California Department of Financial Institutions (DFI) recently approved four mergers involving California credit unions, while two Connecticut credit unions indicated they would merge.

Bay Media FCU in San Francisco, with $13.2 million in assets, received approval to merge into the $741 million asset San Francisco Fire CU on June 21.   

The $24.5 million asset Family 1 FCU in Placentia merged into CU of Southern California, based in Whittier, Calif., with $552 million in assets. The merger was approved May 11 and became effective July 2.

Inland Empire CU, Pomona, with $38.5 million in assets, was approved to merge into CU of Southern California on June 16. The merger took effect July 2.

Santa Monica (Calif.) City Employees FCU, with $28.1 million in assets, received approval July 26 to merge into Southland CU, Los Alamitos, with $86.2 million in assets.

And in Connecticut, the $21.5 million asset Greater Norwalk (Conn.) Area CU is contemplating a merger with Mutual Security CU based in Norwalk, with $135 million in assets (thehour.com Aug. 9).

Businesses hold FIs responsible for security

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MADISON, Wis. (8/16/12)--Fraud continues to hit a majority of businesses, which still look to their financial institution (FI) as primarily responsible for securing the online channel, said Guardian Analytics' third annual study of small and medium business. Credit unions should take note.

Businesses still are not improving their defenses, and a majority continues to lose money due to fraudulent transactions, said the research company. Businesses hit by fraud continue to take their business elsewhere, showing little patience for an FI that can't protect their accounts.

What's new in this year's study is a clear trend towards greater use by businesses of FI's online and mobile banking channels.

Findings include:

  • Businesses are increasing their use of online banking. Businesses conducting all banking online increased to 20% from 9% since 2010, and now half of businesses conduct at least half of their banking through an online channel.
  • Use of mobile banking is rising. Businesses accessing online banking from mobile devices increased to 54%, up from 23% in 2010.
  • Businesses are looking to their FI for fraud prevention. Seventy-two percent of small and medium businesses surveyed indicate that their FI is most responsible for ensuring online accounts are secure. Such trust in their bankers may explain why the use of various fraud-prevention technologies has been flat since 2010; 43% did not change security practices at all following a fraud episode.

  • Fraud attacks are widespread. Two out of three businesses have suffered fraudulent transactions, and of these a similar proportion lost money as a result. For example, in the online channel, 73% of businesses experienced fraudulent transactions (i.e. there was a fraudulent transaction before attack was detected), and after recovery efforts, 61% still ended up losing money.
  • Businesses are not reimbursed by their FI. While the levels vary by channel, about seven in 10 businesses that suffered fraud losses were not fully reimbursed by their FI.
  • When businesses suffer a fraud loss, the leave. After a fraud episode, 40% of businesses move some or all of their banking business. And 56% indicate that it takes only one fraud loss to lose confidence in their FI.
  • FIs are losing money through Automated Clearing House (ACH) fraud. When a business loses money through a fraudulent ACH transaction, the FI reimburses some or all of the money 54% of the time. That means FIs are losing money.
The study reflected the input from 998 small and medium businesses with fewer than 200 employees and who generated less than $100 million in annual revenue. The surveys were conducted in May.

CO-OP Network offers PIN POS through Star Network

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RANCHO CUCAMONGA, Calif. (8/16/12)--CO-OP Financial Services is introducing CO-OP Network PIN POS service powered by First Data, through which debit cardholders of participating credit unions can access nearly two million STAR Network point-of-sale locations nationwide.

"CO-OP has considered offering PIN POS for many years, but only now have the right circumstances come together," said Stan Hollen, CO-OP Financial Services president/CEO. "In cooperation with First Data's STAR Network, our business partner for nearly 30 years, CO-OP can provide our clients with unmatched national PIN POS coverage and value." 

CO-OP Financial Services has also signed a contract renewal extending its electronic funds transfer network access agreement with the STAR Network.

CO-OP Network PIN POS service offers nationwide coverage that gives credit union members the convenience of being able to use their debit card where they want to, and strengthens credit union relationships with members, especially those accustomed to big bank accessibility, said the company. 

The agreement also means  greater choice in payment method, easier access to money and superior PIN debit fraud protection. The added POS revenue stream benefits all participating CO-OP members and, in the case of CO-OP shareholding credit unions, the POS transaction volume will also increase annual patronage (dividend) opportunity.

CO-OP Financial Services expects to begin implementing the extended PIN POS service with existing clients beginning Oct. 15.

Study More debit card usage more overdrafts likely

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LAKE FOREST, Ill. Wis. (8/16/12)--A recent study indicates that debit card use is growing. With that, financial institutions can expect an increased possibility consumers will overdraft their checking accounts, thanks to a "financial tsunami" enacted in 2003, the study said.

Debit card payments accounted for 43% of 110 billion annual transactions in 2011, an increase from 19.4% in 2003. That was the year that the Check Clearing  for the 21st  Century Act (Check 21 Act) was enacted, according to the study from Moebs Services, Lake Forest, Ill. Check 21 Act eliminated the "float" on checks that kept many from overdrawing their accounts.

Float—the amount represented by a check passing through a financial institution's check clearing cycle--averaged $10 billion a day in 2003--when paper checks constituted 46.3% of the annual check processing system. In 2011, business and paper checks averaged only $400 million in float per day, a reduction of 96% in less than nine years.

"The lack of float and increased debit card usage has made the time between initiating payment and depositing payment--almost non-existent," the study said. "With 87% of checking account users not reconciling their checking accounts, the probability that the average consumer will overdraw is immeasurably increased."

The paper describes a "small cash market" that is created when consumers have a financial need and they do not have liquid funds to meet that need. Credit unions and banks participate in this market when they provide overdraft services. In 2011, financial institutions earned $31.6 billion in fees from overdrafts, according to the Moebs study. The national median price of an overdraft was $29 at all financial institutions in 2011.

Payday lenders also participate in the "small cash market," charging $17.50 per $100 advanced, the study said.

"But community banks and credit unions have been a safe haven for checking accountholder fleeing the penalty pricing tactics of the very large banks," the Moebs study said. "The lack of statistical surveys and a broad focus of all financial institutions have created a climate of 'all are wrong' when only a few big banks victimized consumers."

Credit unions' median charge for an overdraft is $25, the study said. That is less than the national median for all financial institutions, and compares with $35 at Wall Street banks, $30 for all banks, $25 for "Main Street banks and credit unions," and $17 for payday lenders, the study said.

About 67% of the overdraft market is unintentional users, the study said. Losses for banks and credit unions are about $3 billion a year. For an individual transaction, the full cost is about $13 to the financial institution.

Coastal Community achieves Juntos Avanzamos status

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GALVESTON, Texas (8/16/12)--Coastal Community FCU has reached "Juntos Avanzamos" status, signaling it has demonstrated exceptional commitment and service to the Hispanic community, announced the Texas Credit Union League.

Click to view larger image Hundreds of Galveston, Texas, residents turned out at Coastal Community FCU's "Back to School Bash" during which the credit union received the Juntos Avanzamos (Together We Advance) flag for serving Hispanics effectively from the Texas Credit Union League. (Photo provided by the Texas Credit Union League)
In a ceremony in Galveston Saturday attended by hundreds of Galveston residents, the league presented the Juntos Avanzamos (Together We Advance) flag, which represents the $213 million asset credit union's participation in the league initiative (LoneStar Leaguer Aug. 14). The designation is earned through a rigorous application and review process, said the league. The credit union must demonstrate is has the capacity, commitment and compassion to serve the Hispanic market's financial needs.

"We have spent several years working to establish the infrastructure needed to effectively serve all members of the Galveston community," Coastal Community FCU President/CEO Carol Gaylord Purdy noted. "As a locally owned financial cooperative, our entire mission is to make sure people from all walks of life have access to affordable financial services that will help them build long-term stability and wealth."

The goal of the league's initiative is to identify credit unions effectively serving the emerging Hispanic market so that when families see the Juntos Avanzamo flag, they will know that affordable and friendly services are available to them.

Texas Credit Union Foundation Executive Director Courtney Moran presented the flag to the credit union during its "Back to School Bash."

CO-OP Network PIN POS service introduced

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RANCHO CUCAMONGA, Calif. (Filed 1:15 p.m. CT 8/15/12)--CO-OP Financial Services is introducing CO-OP Network PIN POS service powered by First Data, through which debit cardholders of participating credit unions can access nearly two million STAR Network point-of-sale locations nationwide.

"CO-OP has considered offering PIN POS for many years, but only now have the right circumstances come together," said Stan Hollen, CO-OP Financial Services president/CEO. "In cooperation with First Data's STAR Network, our business partner for nearly 30 years, CO-OP can provide our clients with unmatched national PIN POS coverage and value." 

CO-OP Financial Services has also signed a contract renewal extending its electronic funds transfer network access agreement with the STAR Network.

CO-OP Network PIN POS service offers nationwide coverage that gives credit union members the convenience of being able to use their debit card where they want to, and strengthens credit union relationships with members, especially those accustomed to big bank accessibility, said the company. 

The agreement also means  greater choice in payment method, easier access to money and superior PIN debit fraud protection. The added POS revenue stream benefits all participating

CO-OP members and, in the case of CO-OP shareholding credit unions, the POS transaction volume will also increase annual patronage (dividend) opportunity.

CO-OP Financial Services expects to begin implementing the extended PIN POS service with existing clients beginning Oct. 15.

CU System briefs (08/14/2012)

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  • DUBLIN, Ohio (8/15/12)--Republican congressional candidate Brad Wenstrup was welcomed to Atomic CU in Piketon, Ohio, earlier this month by Atomic CEO Tom Griffiths and Chief Legal Officer Aaron Michael, said the Ohio Credit Union League (eLumination Newsletter Aug. 8)l. Wenstrup is runny for Ohio's 2nd Congressional District after defeating incumbent Rep. Jean Schmidt (R-Loveland) in the state's primary.  Accompanying Wenstrup was state Rep. Cliff Rosenberger (R-Clarkesville) and former U.S. Rep Bob McEwen (R-Ohio). Wenstrup toured the credit union, met with employees and discussed the need for economic growth and development, and the importance of small businesses. Griffiths told about Atomic CU's member business lending program and restrictions credit unions face and explained how lifting the restrictions could increase business lending and jobs in Ohio at no cost to the taxpayers. Ohio league General Counsel John Kozlowski said it is important to invite elected officials to credit unions to show how credit unions serve people, businesses and the local community that make up the politician's constituents.  "It's critical that credit unions develop these relationships and tell elected officials, day in and day out, how the credit union is making a difference for their constituents …
  • DUBLIN, Ohio (8/15/12)--Ohio Credit Union League General Counsel John Kozlowski attended a roundtable earlier this month organized by U.S. Sen. Sherrod Brown (D-Ohio) to discuss helping responsible homeowners refinance their mortgages at lower rates (eLumination Newsletter, Aug. 8). Fifteen representatives from community groups, financial services and mortgage providers, as well as state, federal and local public officials, were invited to join Brown and Secretary of the U.S. Department of Housing and Urban Development Shaun Donovan at the event. Discussion centered on legislation backed by the Obama administration. That included expanding the Home Affordable Refinance Program (HARP), which would provide refinancing opportunities for families who have been paying their mortgage on time; offering simple, low-cost refinancing for borrowers whose loans are not guaranteed by the government; and helping borrowers with underwater mortgages by paying closing costs for those who choose to rebuild equity in their homes more quickly through a shorter-term loan.  The league and the Credit Union National Association are reviewing the legislation and will continue working with Brown as the bills move through Congress, ensuring that credit union interests are protected, the league said …
  • BISMARCK, N.D. (8/15/12)--The Credit Union Association of the Dakotas (CUAD) has awarded 10 Dakotas' Credit Unions High School Financial Scholarships totaling $500 each to students in North Dakota and South Dakota. All recipients plan to use their scholarship to pursue degrees in higher education. The scholarship is designed for high school seniors who are credit union members. A five-judge panel selected the winners based on essays written by the students on two topics: "How, through your involvement in the community/school activities, events or volunteer efforts have you shown the cooperative spirit?" or "What can your credit union do to continue providing you with financial solutions for a lifetime?" Five of the winners were from North Dakota and are members of Capital CU, Community CU, Dakota Plains CU, Minot Area Schools FCU and North Star Community CU. The five South Dakota winners are members of Consolidated Hub-CO FCU, Dakotaland FCU (two recipients), M-O FCU and Palace City FCU … 

Wisconsin league attacks misinformation on subsidy

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PEWAUKEE, Wis. (8/15/12)--Wisconsin credit unions' strong financial results at mid-year represents consumer savings, not "subsidy," said the Wisconsin Credit Union League, responding to misinformation from banks after the state regulator released its assessment of state-chartered credit unions' financial results.

"The broken record repeats," said league President/CEO Brett A. Thompson. "Every chance it gets, the [Wisconsin Bankers Association] WBA repeats misinformation in hopes that repetition will change the law and the facts. But their comments are no more accurate today than they were the last time, or the time before that, or the time before that," he said.

WBA has mischaracterized credit unions' net income as a tax "subsidy" and said credit unions' mission is to serve only those of modest means. The intentional mischaracterization is no accident, said the league.

The league reiterated two points:

  • Credit unions return earnings to depositors, not shareholders in the form of lower loan rates, higher savings rates and fewer fees. In 2011, they saved 2.2 million members $203 million and they save Wisconsin bank customers $66 million each year because of the competition that helps to keep bank fees and rates in line. 
  • All credit unions exist to benefit depositors. "Under Wisconsin law, the mission of every credit union is 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," said the league.  Instead of limiting by income who credit unions can serve--as WBA suggests--state law requires credit unions to serve all members regardless of income, the league said. "Credit unions' growth is the result of all credit unions putting people before profits; it's a consequence of consumers using a locally owned, democratically controlled co-op to further their own financial interests instead of the narrow corporate interests of a few."
Thompson also criticized banks' role in the financial crisis and "relentless fee increases" that have "led consumers to pay closer attention to who realizes the perks of their patronage and where profits go.

"Consumers have realized that they themselves benefit when earnings from their financial institutions are returned to them rather than going into the wallets of just a few. That's why the increase in net revenues of credit unions so far this year is nothing but good news for Wisconsinites," he concluded.

CUs getting global notice from rates study

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MADISON, Wis. (8/15/12)--Credit unions have received positive press in national and international media as a result of statistics released this week from Bankrate's 2012 Credit Union Checking Survey. The study noted that 72% of credit unions currently offer free checking, compared with 45% of banks.  Credit unions appeared in Forbes, Fox Business.com, Huffington Post, The Chicago Tribune, HLNTV, and more.

Some of the coverage is coupled with separate surveyt conducted by Money Rate, which reported that bank fees are rising. (See related News Now article: "Bank fees survey--Fees are rising" in today's issue).

The credit union study,  originally featured on Bankrate.com Monday,  made its way Monday and Tuesday to FoxBusiness.com; nationwide HLNTV.com, a CNN affiliate; CBS affiliate WTVR in Richmond, Va.; The Chicago Tribune; Washington Business Journal; Forbes; Huffington Post; Bank Credit News; Loansafe.com, a Better Business Bureau blog, and NBC33TV.com in Baton Rouge, La. Internationally, the story was featured on Yahoo! Singapore Finance, International Business Times in the United Kingdom, and India Investment News.

In a report Tuesday by CNN Money anchor Poppy Harlow on WTOP, a Washington, D.C., area news talk show, Harlow gave advice to consumers to consider looking at credit unions and smaller online banks to escape banks' fees.

Fox Business.com, in its article headlined "Credit unions cling to free checking accounts," wrote as its lead:  "If free checking is in decline, someone forgot to tell credit unions." It reiterated the Bankrate survey's results and noted that "banks are a different story."  "If you're on the lookout for a free checking account, then credit unions remain a viable alternative to fee-laden or high-balance-requirement checking accounts that are becoming more common in the banking community," said Greg McBride, senior financial analyst for Bankrate.com, in the article.

Aite Group LLC in Boston noted that credit unions might be missing fee income by sticking with free checking. Ron Shevlin, a senior analyst at Aite Group, noted in the Fox Business article that credit unions are looking at free checking as "competitive differentiation. They're saying, 'Hey, if these big guys are going to get rid of their free checking, we're going to keep our free checking account as a way of being able to say we're different.'"

HLNTV.com, in its article, "Want free checking? Find a credit union!" reported on the survey and instructed consumers interested in learning more about credit unions to "check out the Credit Union National Association." The article linked to CUNA's website.

Texas Trust CU purchases office park

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MANSFIELD, Texas (8/15/12)--Texas Trust CU in Mansfield, Texas, has begun the next phase of its growth strategy with the purchase of an office park, according to the Texas Credit Union League.

The $721 million asset credit union purchased two buildings in Arlington to serve as its new corporate headquarters and as a long-term financial investment (LoneStar Leaguer Aug. 14).

The office park consists of 78,660 square feet of office space, with a 66% occupancy level. Texas Trust initially will occupy a small footprint, with plans to occupy 50% or more of the total space within the next three to five years.

The new headquarters facility is part of Texas Trust's strategic plan. By 2016, the credit union plans to nearly double its membership to 100,000 from 58,000 and become a $1 billion credit union.

"The new facility gives us room to grow, which means we will be able to add employees and new services and products, so that we can better serve our current members and grow our membership," Jim Minge, Texas Trust president/CEO, told the league.

Texas Trust will move several corporate functions such as marketing to the new space within the next 90 days. The rest of the corporate staff will move in phases, starting in 2013.

Texas Trust also is expanding its full-service branches this year. In March, it opened its ninth branch in Grand Prairie. Its 10th branch, in Mansfield, will open at the end of September.

N.Y. foundation FEST highlights NEFE update

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ALBANY, N.Y. (8/15/12)--The New York Credit Union Foundation, in collaboration with Cornell Cooperative Extension, last week hosted Financial Education Summer Training, featuring an introduction to the updated National Endowment for Financial Education (NEFE) High School Financial Planning Program (HSFPP).

Barbara Henza, community educator with Cornell Cooperative Extension, presented recent updates to the National Endowment for Financial Education's High School Financial Planning Program at the New York Credit Union Foundation's Financial Education Summer Training last week. (Photo provided by the New York Credit Union Foundation).
The training, held at the Credit Union Association of New York's offices in Albany, N.Y., attracted nearly 50 participants from 19 credit unions and 13 school organizations.

NEFE HSFPP, a non-commercial, personal financial curriculum for high school students, was recently updated.

"A key goal is to provide youth and adults with the financial skills necessary for a sound financial future, said NEFE presenter Barbara Henza, community educator with Cornell Cooperative Extension.

Keynote speaker Colin Ryan, a comedian, national speaker, author and creator of the Association of Vermont Credit Unions' financial literacy program, Economy of Me, discussed presenting to high schoolers using pop culture and comedy to create engaging, entertaining and memorable conversations about money.

Laura Rog, director of training and technical assistance at generationOn, a global youth service movement, spoke about the importance of teaching philanthropy and community responsibility to youth.

Jody Carpenter, vice president of marketing and business development at UFirst FCU, Plattsburgh, N.Y., and Neil Folnsbee, youth program coordinator at Corning (N.Y.) FCU, closed out the program by sharing their experiences with reality-based teaching in classrooms.

Debit card promo alters Belvoir members spending

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WOODBRIDGE, Va. (8/15/12)--Woodbridge, Va.-based Belvoir FCU used a two-month promotion to change members' purchasing habits while giving the credit union's debit card front-of-wallet status.

"SwipeStakes" encouraged members to swipe their Belvoir FCU debit card on purchases of $5 or more and select credit/sign for their transactions. By completing routine tasks, members would automatically be entered to win an iPad, iPod, or $100 iTunes gift card in June and July. Members also were permitted unlimited entries, since each qualifying swipe counted as one entry.

After the two-month campaign ended, the credit union saw, on average, a 7% lift in overall transactions and a 10% increase in signature-based transactions, including a 9% bump in signature-based transactions over $5. There also was a 3% boost in debit cards with at least one transaction, the credit union said.

Minnesota CUs host Ecuador visitors

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ST. PAUL, Minn. (8/15/12)--A group from one of the largest credit unions in South America--Ecuador's Cooperativa COOPROGRESO--visited four Minnesota credit unions as part of an exchange program organized by the World Council of Credit Unions (WOCCU) and the Minnesota Credit Union Network (MnCUN).

Representatives from Ecuador credit union Cooperativa COOPROGRESO visited four Twin Cities credit unions as part of an exchange program organized through the the World Council of Credit Unions and the Minnesota Credit Union Network. (Photo provided by the Minnesota Credit Union Network.)
The Ecuadorian credit union representatives made stops at Hiway FCU and City & County CU in St. Paul, US FCU in Burnsville, and Postal CU in Woodbury. The hosting credit unions showed the visitors how Minnesota credit unions use new technology and how they attract and retain members with their products and services. Minnesota credit unions also shared ideas about driving membership growth and creating credit union awareness opportunities.

"As we receive more and more requests to connect credit unions around the world, we rely on strong partners and supporters such as the Minnesota Credit Union Network," said Victor Miguel Corro, Worldwide Foundation for Credit Unions vice president. "The ability to have peer-to-peer exchanges is invaluable as the information and operational best practices flow when the parties meet. When the World Council connects these different worlds, everyone in the exchange benefits."

"For our credit unions in Minnesota to be able to participate in an international exchange like this is a wonderful opportunity to share industry knowledge that helps to foster credit union development around the globe," said Mark D. Cummins, MnCUN president/CEO. "For the credit unions that hosted our partners in Ecuador, it is a great example of the 'people helping people' philosophy and the successes we can have when working together."

Bank fees survey Fees are rising

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FOSTER CITY, Calif. (8/15/12)--"The fee environment worsened for bank customers in virtually every way possible in the first half of the year," according to a new survey from MoneyRates.com that says banks' fees are rising (Money.MSN.com Aug. 14).

The survey is different from one reported Tuesday that compared bank and credit union fees and showed credit unions consistently had lower and fewer fees on checking accounts. (For more information on that survey, see related story:  "CUs get global notice from rates study.) In the new study, no credit unions were included.

Average checking account fees at banks rose in every major category tracked, according to the new Mid-2012 Bank Fees Survey, conducted in July by MoneyRates.com (Aug. 13). It compared the findings with its survey for year-end 2011. The survey is produced semi-annually.

Among the findings in the six areas the study tracked:

  • Minimum required to open an account. Banks required an average $408.76 to open a checking account, up from $391.41 in the previous survey.  Money Rates noted that the higher the minimum, the more likely poorer customers may be forced to go unbanked.
  • Monthly service fees. Of the banks surveyed that charge a monthly fee, the average fee was $12.08 a month, up from $11.28 a month. That totals nearly $145 a year and can take a bite out of a savings account, Money Rates said.
  • Minimum balance for fee waiver. The minimum amount needed to keep the bank from charging fee on deposits is rising to $4,446.57, up from $3,590.83.
  • Overdraft fees.  At banks, overdraft fees were on average $29.83, an increase from $29.23 in year-end 2011.
"Previous surveys have tended to show more of a mixed bag, with some fees rising and others falling," said Richard Barrington, Money Rates senior financial analyst. "But the latest survey shows a comprehensive trend toward checking accounts becoming more expensive."

Fee structures differed between large and small banks, and between traditional branch-based institutions and online banks.

Barrington made several suggestions for consumers, including shopping around, considering an online bank, considering a smaller institution, and matching one's needs with the bank's fees.

A number of media covering this study also mentioned a Bankrate.com study that found credit unions are a haven for fee-sensitive consumers.

Elevations CU donates 36K to wildfire victims

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BOULDER, Colo. (8/15/12)--Elevations CU and Elevations Foundation in Boulder, Colo., Tuesday presented the Long Term Recovery Group of Northern Colorado with a check for $36,312 in the aftermath of a large wildfire in Colorado.

The High Park wildfire, which began June 9 and was the second-most destructive fire in Colorado history, grew to 87,284 acres (The Denver Post July 5). The fire killed one person and destroyed 259 homes, the Post said. The fire was 100% contained in early July.

"As the tragedy of the High Park Fire unfolded it became clear to us that we needed to mobilize and establish a fire relief fund for our neighbors to the north," said Dennis Paul, vice chair of the Elevations Foundation. The fund was specifically earmarked for temporary housing for individuals and families displaced by the fire. "Getting victims into a stable environment where they can begin to look to the future is critically important," Paul added.

The fund was launched on June 16 with a $10,000 Challenge Grant from the Elevations Foundation, the philanthropic arm of the $1.15 billion asset Elevations CU.

The foundation reported that Elevations members and business partners contributed $26,312.59 during the fund-raising period, which ended on July 6. With guidance from the United Way of Larimer County and the Fort Collins Housing Authority, the foundation was able to get resources into the right hands.

IFox BizI IBankrateI Consumers turning to CUs

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MADISON, Wis. (8/15/12)--U.S. consumers are turning to credit unions, as they tire of rising fees and scandals at banks, according to a Monday Fox Business article, picked up from Bankrate.com.

Credit unions added 1.3 million new members last year to a record-high total that well exceeds 90 million nationally, according to statistics compiled by the Credit Union National Association (CUNA) and cited in the article. 

It listed five advantages of using a credit union for personal finances:

1. A not-for-profit status fosters a member-first mentality. Credit unions have superior member service. "Credit unions are cooperatives owned by their members," Pat Keefe, CUNA vice president of communications and media, said in the article. "Their mission is to provide their members with affordable financial services--not to gouge them as profit centers." Credit unions ranked better than banks in all categories in the most recent Prime Performance Bank and Credit Union Customer Satisfaction Survey, with customers rating their overall satisfaction at a new score of 89%, seven points greater than the industry average, said Fox Business.

2. Consumers can find lower credit card interest rates at credit unions. Credit unions usually pass on savings from their not-for-profit status throughout their complete product line, offering members higher rates on savings accounts and lower rates on loans and credit cards, said Greg McBride, Bankrate.com senior financial analyst.

3. Consumers can dodge minimum balance rules. Credit union accounts have fewer requirements. While many accountholders at banks are forced to adjust to higher minimum balance requirements, 72% of financial institutions surveyed in the 2012 Bankrate Credit Union Checking Survey had no minimum balance requirements to avoid fees.

4. Lower fees still are rising, and credit union fees are lower than at most banks. Many credit unions have flexibility in how much they charge, and many try to keep costs low for their members, McBride said. For example, credit unions may eliminate products or services to cut costs rather than add fees, McBride explained. That flexibility adds up to big savings. Keefe said credit union members nationwide collectively saved nearly $6.3 billion last year by doing business at a credit union instead of a bank.

5. Credit unions have shared ATMs and branches to access cash. Large banks advertise the convenience of their ATMs or nearby branches, but some credit unions have joined forces to offer their members cash access with the CO-OP ATM network and a shared branch alliance. The CO-OP ATM network includes nearly 30,000 cash machines, and shared branching gives members the ability to conduct in-person transactions at nearly 4,700 branches nationwide, Keefe said.

To read the article, use the link.

In the media CUs nonprofits bridge biz-loan credit gap

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RALEIGH, N. C. (8/14/12)--In North Carolina, nonprofit organizations associated with not-for-profit credit unions bridge the gap when small businesses need funds and can't get credit through traditional routes.

For example, Jackie Green, who started a Raleigh-area bakery in her home in 2009 could not find the capital to upgrade the cooking equipment in her kitchen, according to The News & Observer (Aug. 12).  Green was told she needed $30,000 worth of collateral and A-plus credit.

Green ended up at The Support Center, a community development financial institution (CDFI) that operates through Generations Community CU in Durham. It offers loan programs to businesses that  can't access capital through traditional means. Green received a $40,000 loan from the program. Two years later, she received a second $160,000 loan through its small business lending program, which financed the opening of her store in Apex. She expects to hire several employees to meet a growing demand.

Durham-based Self-Help is a nonprofit that works with Self-Help CU.  Self-Help refers clients needing microloans--loans for $50,000 or under-- to The Support Group when they don't fit the credit union's lending profile.

Banks have significantly tightened their credit parameters and are willing to lend to only very well-qualified borrowers, the article noted, adding that microloans are particularly problematic.

Although CDFIs can take more risk than traditional lenders, Self-Help says it does not rubber stamp loans for just anyone. But the CDFI will "dig deeper and listen to the [applicant's] story."

For the full article, use the link.

Free checking at 72 of large CUs 45 of banks

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NEW YORK (8/14/12)--Chalk up another one for credit unions in the fees arena. Roughly 72% of America's 50 largest credit unions offer free checking accounts without a minimum balance requirement, according to Bankrate.com's 2012 Credit Union Checking Survey. That compares with 45% of banks.

The 72% is down slightly, from 76% last year. An additional 10% of credit unions surveyed will waive monthly fees if account holders maintain a minimum balance ranging from $100 to $750, noted the survey, which was released Monday. Bankrate is a publisher, aggregator and distributor of personal finance content on the Internet.

"Only 45% of banks offer checking without a minimum," said the study, adding, "and their minimum balance requirements tend to be much higher--$585 for noninterest bearing accounts and a staggering $5,587 for interest checking accounts."

"Overall, 98% of the credit union checking accounts that we surveyed are either free or can become free if the accountholder meets minimum balance, direct deposit and/or e-statement requirements," said Greg McBride, Bankrate.com senior financial analyst. "So credit unions remain a viable, consumer-friendly alternative for finding a free checking account."

Most (68%) credit union checking accounts in the survey do not pay interest, Bankrate noted. Those that do yield an average of 0.12%, down from 0.17% last year, which is consistent with the ongoing declines seen in cash investments, the publisher said.

Other fees noted in the survey:

  • Credit unions consistently charge less in overdraft fees for nonsufficient funds. The average cost of the first overdraft at credit unions is up slightly, to $26.65 from last year's $26.05, compared to $30.83 at banks. The most common fees assessed at credit unions are $25 and $30, compared to the most common fee of $35 at banks.
  • Thirty percent of credit unions surveyed have either no ATM fees outside the network or provide at least one free withdrawal per week before the fee kicks in. That compares to 29% at banks.
  • Ninety-six percent of credit unions will charge a non-member for using their ATM. This year's average surcharge is $2.08, down from $2.10 last year. At bank-owned ATMs, the average surcharge is $2.40.  Credit unions' most common surcharge is $2, compared with $3 at banks.

Mahon named CEO of National Federation of CDCUs

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NEW YORK, N.Y. (8/14/12)--Cathie Mahon has been named the new CEO of the National Federation of Community Development Credit Unions (CDCUs).

Mahon previously served as the deputy commissioner for financial empowerment with the New York City Department for Consumer Affairs.

During her tenure there, she established a network of Financial Empowerment Centers providing free one-on-one financial counseling to New Yorkers in need.  She launched SAVE USA, an innovative asset building program.  Her office connected thousands of New Yorkers to safe and affordable banking products, and helped to build a national movement of municipal financial empowerment with leaders throughout the country.

Mahon, who previously served as the policy and program director for the federation, will assume the role of CEO effective Oct. 1.

"Cathie is a very talented, committed professional who brings the experience needed to build on the solid foundation that we have built together at the federation" said Lynda Milton, federation board chair. "She brings with her excitement and commitment for the community development credit unions we serve, and has fresh ideas on how we can continue to build on the great history and accomplishments of this organization," Milton added.

"I have seen first-hand the benefits of connecting people to safe and affordable products and services from working with my previous organization," said Mahon. "Credit unions provide real alternatives to predatory lenders and fringe service providers.  I look forward to working with the national federation to expand on the successes we have seen in communities across the country."

The federation is an organization dedicated to helping low- and moderate-income people and communities achieve financial independence through credit unions.

IWash. PostI Biz loans scarce CUs an alternative

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WASHINGTON (8/14/12)--Small-business loans have been hard to obtain from traditional banks since the credit crisis started three-and-a-half years ago, but credit unions are among the alternatives for financing, according to an Aug. 1 article in The Washington Post.

About nine out of 10 small-business loan applications are typically rejected at large banks, according to Biz2Credit. Also, the total number of bank loans to small businesses has declined 17% since September 2011, according to research at Pepperdine University.

The main reason big banks aren't lending is because they haven't completely bounced back from the 2008 financial crisis, and many were saved from closure by the Troubled Asset Relief Program, the Post said. Several of those banks still have exposure to troubled U.S. mortgages, and high-risk investments in Europe, preventing them from accepting new lending risks, the Post added. 

Credit unions and Small Business Administration (SBA) loans were listed by the Post as the first alternative for small businesses turned down by large banks. Credit union loan approvals have slightly risen, compared with those of their banking counterparts, the Post said, citing BizRate.com

The Credit Union National Association (CUNA) and credit unions are urging 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 business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

To read the article, use the link.

CU Miracle Day to receive Wegner Award

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MADISON, Wis. (8/14/12)--Credit Union Miracle Day (CUMD) is the winner of the 2013 Herb Wegner Memorial Award for Outstanding Program, the National Credit Union Foundation (NCUF) announced Monday.

Through its races benefiting Children's Miracle Network Hospitals, CUMD has made a significant impact in the credit union industry, NCUF said. The award was made in recognition of those efforts in raising national awareness of credit unions, local community partnerships and fundraising. 

Credit Union Miracle Day board members, sponsor officials and Children's Miracle Network Hospitals present a donation check at the start line of the Credit Union Cherry Blossom Ten Mile Run in Washington, D.C. (Photo provided by the National Credit Union Foundation)
This will be one of three Herb Wegner Memorial Awards presented at a special dinner hosted by NCUF in Washington, D.C., on Feb.  25, during the Credit Union National Association's 2013 Governmental Affairs Conference. Online registration for dinner tickets will be available later this year on the NCUF website.

"Credit Union Miracle Day is one of those rare and special events that seems to have grown into a level of influence and prominence in such as small amount of time that is hard to comprehend its entirety," said NCUF Awards and Recognition Committee Chairman Bob Schumacher. "It encompasses not only raising funds for a worthy cause, but also has an impact on credit union advocacy that is almost unmatched in its power. It is certainly a Wegner winner."

"It's been a tremendous team effort, which entails countless volunteer hours from our board and committee members, but it is all worth it for the children, the credit unions and the community," said CUMD Chairman Juri Valdov.

CUMD is the largest national credit union event for Credit Unions for Kids, a nonprofit collaboration of credit union organizations that raise funds to benefit Children's Miracle Network Hospitals. CUMD started with the 2002 credit union sponsorship of its now flagship event, the Credit Union Cherry Blossom Ten Mile Run in Washington, D.C.

Last year, CUMD added the new Credit Union SacTown Ten-Mile Run in Sacramento, Calif., and two Freedom Runs for American troops overseas, including one at Camp Arifjan, Kuwait, and one at Wiesbaden Army Garrison, Germany, all held on or around the same day.

To date, CUMD has generated more than $5.5 million for 136 Children's Miracle Network Hospitals nationwide.

CUMD also conducts a special event at the Children's National Medical Center in Washington, D.C. Credit union leaders join with hospital personnel and patients to highlight the successes of children's hospitals. A similar event is hosted in California. CUMD also has inspired communities throughout the nation to create their own events. One example of this is a statewide walk in Ohio that supports Credit Unions for Kids.

Aside from the visibility on Capitol Hill, CUMD helps bring national awareness of credit unions to consumers in many ways. "CUMD has brought awareness to consumers that credit unions are an alternative financial institution," said Tom Dorety, president/CEO of Suncoast Schools FCU in Tampa, Fla.

Each year, the website, promotional material and signage for the races prominently note the credit union connection. Media exposure extends beyond Capitol Hill publications and there is live video streaming. The races are covered by national media.

The Credit Union Cherry Blossom Ten Mile Run and Credit Union SacTown Ten-Mile Run attracted 93 credit unions, 56 business partner organizations, 16‚000 runners and more than 700 volunteers who are credit union members nationwide in support for children. Credit unions from 13 states participated in this year's race activities, helping the race become more than a regional event. It is also estimated that about half of the runners are credit union members.

CU System briefs (08/13/2012)

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  • ST. LOUIS, Mo. (8/14/12)--A former employee of the St. Louis (Mo.) Community CU has been indicted by a federal grand jury in the embezzlement of nearly $105,000 from the credit union. Jamie Askew of Troy, Ill., is charged with one felony count of embezzlement from a credit union. The charge carries a maximum sentence of 30 years in prison. The thefts occurred between July 2009 and May 2012, said the Department of Justice (Department of Justice Documents, Federal Information and News Dispatch Aug. 9) …
  • LINCOLN, Neb.(8/14/12)--The Nebraska Credit Union League hosted a meet and greet for Nebraska credit unions with State Sen. Deb Fischer, who is running for a seat being vacated by U.S. Sen. Ben Nelson. Fischer, pictured in the middle with credit union representatives, discussed the importance of shrinking the federal government, including regulations that stifle business and job growth. She expressed appreciation to credit unions for their support. Credit unions attending told her about the need for Congress to lessen the regulatory burden that credit unions face and urged increasing credit unions' member business lending cap so more capital can be made available to small businesses. Fischer will face former U.S. Sen. Bob Kerrey in the November election. "This was a great opportunity for our credit union professionals and volunteers to meet with State Sen. Fischer to discuss her legislative priorities as well as those of credit unions," said Scott Sullivan, league president. (Photo provided by the Nebraska Credit Union League) …
  • HARRISBURG, Pa. (8/14/12)--eaders from several Western Pennsylvania credit unions met with the 12th congressional Republican candidate, Keith Rothfus, at Clearview FCU to educate him about credit unions, said the Pennsylvania Credit Union Association (PCUA)(Life is a Highway Aug. 13). They discussed regulatory and legislative concerns, including credit unions' tax-exempt status, raising the member business lending cap, implications of the Dodd-Frank Act on credit unions, and healthcare. Rothfus will face U.S. Rep. Mark Critz in November. Rothfus, right center, posed with Clearview FCU President/CEO Mark Brennan, a member of PCUA's Governmental Affairs Committee, fourth from right, and other attendees, including Maria LaVelle, PCUA Board Vice Chairman and GAC Chairman; Dave Ackerman, president/CEO of U$X FCU; Ray Brunner, PCUA board member; and Joe Marzullo, Washington Area Teachers FCU. (Photo provided by the Pennsylvania Credit Union Association) …
  • PLANO, Texas (8/14/12)--Catalyst Corporate FCU announced that Steven Stapp, president/CEO of San Francisco FCU, has been added to its Asset Liability Committee (ALCO). His appointment--as well as the recent appointment to Catalyst's board of Trevor Tokishi and Bill Before--means former members of the Western Bridge Corporate have representation within Catalyst's governance structure.  Tokishi is executive vice president of Valley Isle Community FCU, Kahului, Hawaii, and before is vice president/chief financial officer of Spokane (Wash.) Stapp will be joining ALCO Chairman Rick Hein, president/CEO of OSU FCU ...
  • HARRISBURG, Pa.(8/14/12)--Alfred A. Panfile, former member of the board of directors at Pottstown, Pa.-based Diamond CU, died Aug. 8.  He was 87, according to the Pennsylvania Credit Union Association (Life is a Highway Aug. 13).  Panfile served on the $380 million asset credit union's board from 1976 to 2006, and had been an active member since its founding in 1947. In 2004, Panfile was honored by the credit union as the namesake of its annual scholarship program.  He is survived by his wife, four children, seven grandchildren and eight great-grandchildren.

Michigan leads nation in classroom presentations

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LANSING, Mich. (8/14/12)--Michigan credit unions led the U.S. in the past year for youth financial education classroom presentations.

Dollar Dog visits a Wilson Elementary School in Alpena, Mich., for a financial education presentation by Alpena Alcona Area CU.

For the period ending June 30, Michigan credit union representatives made 2,001 classroom presentations, up 4.5% from the last year. Texas came in second with 1,979 presentations, according to the National Youth Involvement Board's (NYIB) annual report (Michigan Monitor Aug. 13).  

Michigan credit unions also increased the number of students reached by more than 2%, with 46,973 students reported. The total fell in second place nationwide, behind North Carolina, which reached 55,604 students.

Financial education presentations in schools are an important way for credit unions to serve the community, said one credit union presenter.

"Financial education is one of the most appropriate ways to fulfill our mission and enhance the financial well-being of our members," said Kaye Chervenak, parish and education coordinator for Michigan Catholic CU in Troy. "We want to work with parents, teachers, and the community at large to help our youth succeed by giving them the tools and education for responsible money management."

Nationwide, 413,106 students learned money management skills and heard the credit union message at 13,008 presentations for the year. While Michigan's reported youth financial education involvement activity increased slightly, the national figures represent a decrease from the last reporting year.

Fremont (Mich.) High School Students ask questions of CEO John Buckley at Fremont-based Gerber FCU, left, and Michigan State Sen. Geoff Hansen, (R-Hart), center.  (Photos provided by the Michigan Credit Union League)
The NYIB also recognized Michigan's Julie Blaylock from Community Financial CU in Plymouth, with an award for the highest percentage increase in students reached, up 412% since the last reporting year.

The top 10 states based on the number of presentations given, according to NYIB,  are:

1. Michigan--2,001;

2. Texas--1,979;

3. North Carolina--920;

4. Oregon--736;

5. Arizona--735;

6. California--693;

7. Florida--633;

8. Washington--617;

9. Montana--594; and

10. Virginia--537.

The top 10 states based on students reached:

1. North Carolina--55,604;

2. Michigan--46,973;

3. Virginia--30,589;

4. Texas--28,166;

5. Florida--25,900;

6. California--24,829;

7. Arizona--23,720;

8. Pennsylvania--17,632;

9. South Carolina--15,463; and

10. Oklahoma--13,894.

Members regulators OK merger of two Indiana CUs

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FORT WAYNE, Ind. (8/14/12)--Fort Financial CU, Fort Wayne, Ind., and Financial Members FCU, Auburn, Ind., said Friday they have received regulatory and membership approval to merge.

Fort Financial CU, formerly Dana FCU, has about $180 million in assets, and serves more than 40,000 members with 11 branches. Financial Members FCU has about $4 million in assets.

Fort Financial CU will be the continuing credit union (Journal Gazette Aug. 10).

Financial Members FCU will close its location in Auburn. All employees from that branch will be relocated to the Fort Financial Auburn branch.

A difficult economy, increased regulatory burdens and the need to expand services were among the reasons for the merger, according to Steve Collins, Fort Financial CU CEO.

Michigan Firsts social media strategy featured

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LATHRUP VILLAGE, Mich. (8/14/12)--Michigan First CU's social media strategy was highlighted in an interview with Linda Douglas, vice president of marketing, by The Financial Brand, a website dedicated to  ideas in financial services marketing.

Michigan First, with $623 million in assets, Lathrup Village, Mich., uses every major social media platform, Douglas said. The credit union is active on Facebook and Twitter. It uses YouTube as its primary video platform and uploads photos to Flickr for sharing.

The credit union initiated its social media strategy in April 2009 in tandem with its enhanced online banking service, Douglas told the publication. The new banking product included personal financial management capabilities and social media, including Twitter and Facebook, were employed to publicize the roll out.

Day-to-day management of social media was handled in partnership a public relations agency. Michigan First CU's marketing staff developed a social media calendar and provided content. The agency provided ongoing monitoring and third-party content.

In May, Michigan First hired Janelle O'Hara, its first full-time employee dedicated to social media. O'Hara previously served as the credit union's Young & Free spokesperson, a role in which she created content, attended events on behalf of Michigan First, and built up the credit union's following among Gen Y.

Now, O'Hara manages Michigan First's social media content and multimedia daily. She also produces video content and works with the credit unions public relations agency.

O'Hara has helped Michigan First achieve what Douglas calls the credit union's greatest accomplishment in social media: 24 x 7 monitoring and diligence in responding to members. "We ensure that each post is acknowledged as quickly as possible, and dig in to identify members posting anonymously using a variety of tools," Douglas told The Financial Brand. "With regular follow-up both in social media and offline, we've been able to turn perceived problems into positive customer service experiences."

One of those problems developed when the credit union unintentionally offended some older and more conservative members with videos that were intended to attract Gen Y members, Douglas told The Financial Brand. The credit union has since moderated the videos and taken a more targeted approach to any youth-oriented videos, Douglas said.

In the interview with The Financial Brand, Douglas said Facebook is the most important social media vehicle in use today. "Facebook has reached critical mass and is such an integrated part of our members' lives," Douglass said. "With Facebook, we are able to enter more involved conversations with members and directly share multimedia content that paints a more complete picture of who Michigan First is."

To read the full interview, use the link.

Survey Smartphone users report more tech problems

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MADISON, Wis. (8/14/12)--As more credit unions introduce mobile banking, they may become entangled within the technical problems smartphone users are experiencing with their phones.

Smartphone owners--who compose about half of cell phone owners--experienced a higher frequency of tech problems than those with "simple feature" phones, according to a survey conducted by the Internet and American Life Project of the Pew Research Center in April.

About 88% of American adults have cell phones, the survey found.

Of those surveyed, about 35% of smartphone users struggled with dropped calls at least weekly, compared with 28% for other cell phone owners.

Roughly 79% of cell phone owners said they use text messaging. About 29% of smartphone owners received unwanted texts or spam messages at least weekly, compared with 20% of other cell phone users.

Some 55% of cell phone owners say they use their phones to go online--to browse the Internet, exchange e-mails, or download apps. Roughly 49% of smartphone users experienced slow download speeds, compared with 31% of other cell phone users.

Despite the technology challenges, credit unions nationwide are reporting success with mobile banking.

More than 1,000 member of $2.3 billion Virginia CU, Richmond, Va., made a deposit using a smartphone in July--the largest number of mobile depositors since the credit union began offering the service in April.

Since rolling out mobile banking to its full membership in May, $2.1 billion Coastal FCU, Raleigh, N.C., has enlisted 8,900 members for its service, according to the Detroit News (Aug. 6).

State Employees' CU, also located in Raleigh, with $25 billion in assets, has offered mobile banking since 2008, according to the Detroit News. More than 150,000 of the credit union's 1.8 million members use the service, a 52% increase from a year ago.

Credit unions also are adding more features and capabilities to their mobile banking service lines.

American Airlines FCU, with $5.5 billion in assets, Fort Worth, Texas, updated its CUAcce$$ Mobile smartphone apps to include a check deposit feature. The new feature allows members with camera-enabled mobile devices to take photos of the front and back of their checks to make remote deposits.

McGraw-Hill FCU launched a mobile banking iPad app. The $293 million asset East Windsor, N.J. credit union is among the roughly 4% of credit unions nationally to implement a tablet application.

Its mobile banking suite is also accessible through iPhone and Android smartphones. About 40% of the credit union's membership use smartphone mobile banking.

CU System briefs (08/10/2012)

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  • COLLINSVILLE, Ill. (8/13/12)--A couple accused of robbing Collinsville, Ill.-based Scott CU on April 12 and immediately turning themselves into authorities received one-year probation sentences on July 17.  Rita Bell, 58, and Jeffery Bell, 56, each pleaded guilty to felony theft in St. Clair County Circuit Court. The original robbery charges were dismissed. The theft charge carries the same penalty as robbery but allows defendants to participate in a probationary program requiring mental health treatment. Both Bells have mental and diminished-capacity issues and had experienced mounting financial and other problems in the months preceding the incident, said the state attorney's office.  Neither had a prior criminal record, neither used a weapon and the stolen money was returned immediately, the office added (Belleville News-Democrat July 23) …
  • YPSILANTI, Mich. (8/13/12)--Renee DeMarco has been named president/CEO of Ypsilanti, Mich.-based Community Driven CU, the credit union's board announced in a press releaseThursday. DeMarco, who has 33 years of experience in the credit union industry, previously served as president/CEO of CapCom CU, based in Lansing.   Community Drive CU, which has offices in Ypsilanti and Romeo, was founded in 1965. Today it serves members in Washtenaw, Macomb and Lapeer counties. It has more than 9,000 members and assets totaling $63 million …
  • LOUISVILLE, Ky. (8/13/12)--Jefferson County FCU, based in Louisville, Ky., has selected Heather D. Clunie as president, succeeding president/CEO Carl Hicks, who plans to retire in October (Business First Aug. 9). Clunie previously worked for LG&E CU for more than 13 years, most recently as CEO. At Jefferson County FCU, Clunie will oversee operations of the $112 million asset credit union, which serves people who live, work, worship, volunteer or attend school in seven Kentucky counties or in Floyd or Clark counties in Indiana …

Maine league letter responds to banks inaccuracies

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PORTLAND, Maine (8/13/12)--The Maine Credit Union League has published a letter to the editor of a statewide bi-weekly business publication to counter inaccuracies about credit unions in an article based on an interview with the chairman of a state banking association.

In a letter published Aug. 6 in Mainebiz, league President John Murphy responded to a July 23rd article, in which Christopher Emmons, CEO of Gorham Savings Bank and the new chairman of the Maine Bankers Association, "emphasized two points that I believe are inaccurate and deserve correction," said Murphy.

Emmons had said credit unions don't pay taxes. "This assertion is wrong," Murphy wrote. "Credit unions do pay taxes--payroll taxes, sales taxes and property taxes. Credit unions are exempt from federal taxation because they are not-for-profit financial cooperatives that exist to serve credit union members, not make a profit."

The second inaccuracy is that credit unions don't have the same kind of oversight as banks, he said. "Maine has 12 state-chartered credit unions that are regulated by the State Bureau of Financial Institutions, the same regulator that oversees all state-chartered financial institutions, including Mr. Emmons' bank," Murphy wrote in the letter.

"In addition, there are 50 credit unions that are federally chartered. All federally chartered credit unions are regulated by the National Credit Union Administration, a U.S. government agency that is responsible for examining and regulating credit unions, and enforcing many of the same federal laws in the same manner that the [Federal Deposit Insurance Corp.] regulates banks," Murphy added.

The letter also pointed out that that the Community Reinvestment Act was passed to reduce redlining credit practices by banks against low-income neighborhood, while credit unions "have no such requirement because, by their nature and mission, credit unions already meet the financial needs of a broad spectrum of people who fall within their fields of membership, and play an active role in community development and growth." Murphy noted research that finds "the performance of credit unions' lending to low- and moderate-income borrowers has been superior to other lenders."

The story also noted  The $38 million in economic benefit  to consumers credit unions provide through better rates and lower and fewer fees.

"We will not allow inaccurate statements and assertions by the banking community to go unchecked," Murphy said. "We have a responsibility to respond and correct those misstatements and, at the same time, reinforce the differences between credit unions and banks, by highlighting the strength and benefits that Maine's credit unions bring to the state's 620,000 members," Murphy said.

To read the entire letter, use the link.

Senate candidate praises CUs at league endorsement

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LYNCHBURG, Va. (8/13/12)--Former Virginia Gov. Tim Kaine--now a candidate for the U.S. Senate--praised credit unions and their philosophy as he accepted the endorsement of his candidacy from the Virginia Credit Union League.

"I have great respect for credit unions and their 'people helping people' philosophy," said Kaine in accepting the league's endorsement.

"The economy and the creation of jobs is the central focus of my campaign, and credit unions and other community-based financial institutions will help drive the economic recovery," he said. 'Washington needs to ensure the nation's 'Main Street' financial institutions can remain strong, innovative and vibrant for the good of working Americans and our communities."

The league announced its endorsement Friday.

"Decisions made in Washington have a direct impact on credit unions' ability to provide affordable financial services to their member-owners," said Rick Pillow, league president.  "Gov. Kaine will be an effective partner and understands the difficulty of the legislative and regulatory environment."

Kaine, who was governor from 2006 to 2010, "is a proven leader and credit unions respect his balanced approach in crafting policy," said Pillow.

Although credit unions played no role in the financial crisis that shook America's financial system, they have been saddled with regulations meant to rein in the excesses of the nation's largest banks, said the league.

Kaine supports credit unions and community banks in the call for fair and balanced regulation that maintains the safety and soundness of the nation's financial system, without unduly burdening the nation's small community-based financial institutions, the league added.

CUNA posts new collaboration materials

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MADISON, Wis. (8/13/12)--The Credit Union National Association's (CUNA) new collaboration website features materials detailing the work of international cooperative efforts. 

The examples include overviews of Brazil's Sicredi model, the Polish credit union/SKOKS model and Canada's Desjardins Group. The new postings detail each initiative's historical roots, operating principles and practices and recent financial and operational successes. 

The initiatives, along with domestic examples on the site, are intended to provide U.S. credit unions with the insight, direction and motivation to explore similar initiatives in their own communities, said Mike Schenk, CUNA vice president of economics and statistics.

The need to reduce back-office redundancy through more cooperation and collaboration is one of the top strategic issues facing credit unions, Schenk said. "Credit union professionals repeatedly tell us this but, when asked, indicate that they don't cooperate or collaborate more because they aren't aware of successful efforts," Schenk added. 

Last year, CUNA's Small Credit Union Committee affirmed previous feedback identifying back-office redundancy and lack of collaboration as one of the top issues facing credit unions and asked that CUNA develop a way to help member credit unions of all asset sizes find out more about collaborative efforts. The website was introduced in June at CUNA's 2012 America's Credit Union Conference in San Diego.

The CUNA collaboration is a repository for such examples, and also serves as a vehicle for credit unions, leagues and credit union service organizations to share their stories, Schenk said. 

"Our goal with the site is to improve the cross-pollination of good ideas, enable credit unions to replicate successful initiatives and ultimately to produce substantial financial and operational benefits that help credit unions thrive," he added.

Visitors to the site can also subscribe to a collaboration listserv. 

The site also includes links to Credit Union Magazine articles and Filene Research Institute studies. In the future, the site will include an overview of the Louisiana Credit Union League's new business-lending collaborative and the objectives of the Credit Union Bay Area Executive Coalition..

To visit the site, use the link.

Wis. CUs net income up 83 in first half 2012

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MADISON, Wis. (8/13/12)--Wisconsin state-chartered credit unions grew net income by 83% in the first six months of 2012, compared with same period last year, according to data compiled by the Wisconsin Department of Financial Institutions (DFI).

Net income totaled $101.8 million, an increase from $55.6 million in 2011. The rise was fueled in primarily by a 28% increase in "other income" and an 11% drop in provisions for loan loss expense.

"Wisconsin credit unions continue to perform well in terms of revenue growth and improved loan quality," DFI Secretary Peter Bildsten said. "Those trends are having a positive impact on return on assets and net worth. The industry's solid performance should mean good things for the state's economy."

Through June 30, Wisconsin's 194 state-chartered credit unions posted a return on investment (ROA) of 0.90%, up from 0.59% as of Dec. 31. Credit unions' ROA has not topped 0.90% since calendar year 2005, according to the DFI. Net worth remained at 9.83%.

Total assets rose to $23.1 billion, up $1.2 billion compared with year-end 2011. Total savings also grew during the same period, increasing by $1.1 billion to $20.2 billion.

"Key indicators of credit unions' financial performance are definitely headed in the right direction," said Ginger Larson, director of the Office of Credit Unions--the DFI division that oversees state-chartered credit unions. "Especially noteworthy is the fact that the loan delinquency ratio has been showing consistent improvement and is nearing pre-recession levels."

CUNA Mutual Change education focus on text scams

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MADISON, Wis. (8/13/12)--New types of scams--particularly the texting scams that are challenging consumers and financial institutions across the country--mean credit unions should change their focus slightly when educating their members and staff about fraud, says CUNA Mutual Group.

The text scams occur when a criminal sends a text message to a consumer's cell phone under  false pretenses to trick the consumer into entering personal information with a bogus phone line or website so the criminal can use the information to raid the victim's account. They have occurred mostly in Georgia, West Virginia, Wisconsin, Florida and California, said Ann Davidson, CUNA Mutual's senior consultant, risk management.

News Now also has picked up media reports on text scams hitting credit unions in Pennsylvania, Arkansas, Georgia, Ohio and Michigan since early May.

A new education tactic is in order because consumers and media are asking how the criminals could have obtained their cell phone numbers and the fraudsters themselves have changed their focus on the type of information they are after.

Some consumers even perceive that their credit union's data were breached. Many believe they got the text through their e-mail address. Still others believe that only members of the specific credit union named in the bogus text were targeted. None of these beliefs are correct.

In text scams, "the credit union would not have been breached," Davidson told News Now. The cyber criminals "get the prefix of the phone carrier. For example, 354 may be a prefix number. They use phone dialers that automatically pick up numbers." Also, it is not just members targeted as victims. The predialers capture nonmembers' numbers within the prefix, too. "The text message comes through your phone number--not your e-mail address," Davidson said, adding that credit unions need to educate their members about that.

With cyber criminals shifting their focus to consumers' mobile devices such as cellphone, iphone or smartphone, major telecommunications carriers such as AT&T, T-Mobile and Verizon are offering a new service for consumers who receiving text spams that may involve scams.

"When consumers get a text they think is a scam, they can forward it to the number 7726. All three carriers use the same number " in an attempt to establish a communications industry standard for dealing with spam, Davidson told News Now.

When CUNA Mutual Group receives a report from a credit union about a text scam, it collects the number that the consumer was given to enter the account information and reports it to the carrier, working hand-in-hand to mitigate the losses. Sometimes the company will be told the number is used by a specific group being monitored. Other times, the phone number will be disconnected to prevent future losses.

CUNA Mutual Policyholders can report a risk alert and any losses to its Protection Resource Center on its website. Use the link. A sign-in is required.

Cyber criminals also may shift their focus from obtaining credit and debit card numbers to obtaining the consumer's banking account numbers, said Davidson. If they get the account number at the credit union, and the credit union's routing number, "they can make an ACH (automated clearinghouse) transaction." While this isn't happening yet, she cautioned credit unions to avoid publishing their routing number widely.

In preventing thefts due to text scams, "education is huge," Davidson said. Not only should credit unions educate members and consumers, they also should educate their call center staff. "Many times someone at the call center in an effort to help (members) provides excellent service--to the bad guys," she said. The latest trend in wire fraud is to call the call center to capture numbers and information.

Tell members/consumers to set up security systems on their mobile devices and to add their cell phone number to the Do Not Call registry, she said.

"To commit fraud, the criminal needs to break into your credit union. That's the key. Credit unions should ask, 'How are they getting in?' Is it through the Internet on the website, through calling the call center, or through the members? Once you determine that, you can minimize the losses."

Criminals' "fraud alerts" are beginning to blend in with legitimate alerts. "The majority of credit unions have at least one victim who responds to the scam," Davidson said. "Credit unions have done a tremendous job in educating consumers about e-mail fraud. Now they need to do it for text fraud, too."

First Carolina Corporate in new quarters

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GREENSBORO, N.C. (8/13/12)--First Carolina Corporate CU in Greensboro, N.C., relocated Thursday to new offices roughly a mile from its previous headquarters. First Carolina said it made the move primarily because of a focus on enhancing security.

The $1.7 billion asset corporate determined that its former office space was no longer ideal and that heightened security requirements could be more efficiently addressed at a new location.

"After the North Carolina [Credit Union] League moved out of our shared facilities last year, we decided it was a good opportunity for First Carolina to reconsider our own building design," said David Brehmer, the corporate's president/CEO. "Moving to our new building allows us to fulfill our mission of providing efficient, personalized service to meet our members' needs."

Operations staff moved from the previous location June 23 and has functioned out of First Carolina's business recovery center (BRC) in a seamless transition. The move to the new headquarters was completed Thursday.

"Although our new facility wasn't ready for occupation as quickly as we had hoped, operating out of our BRC was actually a good contingency test," Brehmer said. "The move was very straightforward, and we've had no service disruptions for members."

First Carolina's new offices are at 7900 Triad Center Drive, Suite 410, Greensboro, N.C. 27409. All staff phone numbers remain the same.

Florida issues instructions for new ELT Program

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TALLAHASSEE, Fla. (8/13/12)--All individuals and businesses that finance vehicles to be titled in Florida must be electronically connected by Jan. 1 to Florida's Department of Highway Safety and Motor Vehicles (DHSMV) to perfect their liens and receive titles electronically through the state's Electronic Lien and Title (ELT) program.

Florida House Bill 1223, passed during the 2012 legislative session, requires lienholders to electronically transmit liens and lien satisfactions to the department. The law requires mandatory participation by lenders, with the exception of individual lienholders and businesses that are not normally involved in financing vehicles. Credit unions are included.

Lenders must contract with a Florida DHMSV-approved service provider to make the ELT connection with DHMSV.

The list of providers includes:

  • American Security Insurance Co., Duluth, Ga.;
  • Auto Data Direct Inc., Tallahassee, Fla.;
  • Decision Dynamics Inc., Lexington, S.C.;
  • FDI, Sacramento, Calif.;
  • PDP Group Inc., Hunt Valley, Md.;
  • VinTek, Philadelphia;
  • Title Technologies Inc., Dallas (pending approval); and
  • Florida ELT, Miami Springs, Fla. (pending approval).
Last week it was announced that VINtek would provide ELT services in Wisconsin. To see the News Now story, use the link.

Minnesota Foundation elects officers board

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ST. PAUL, Minn. (8/13/12)--The Minnesota Credit Union Foundation (MNCUF) Thursday named its table officers and welcomed new board members.


At a MNCUF board meeting, the board elected Pat Brekken, president of Richfield/Bloomington CU in Richfield, as chair; Dave Larson, senior vice president of Affinity Plus FCU in St. Paul and executive director of the Affinity Plus Foundation, as vice chair; and Brian Sherrick, executive vice president of lending and member services at Postal CU in Woodbury, as secretary/treasurer.

Brekken and Larson are entering into their third consecutive years in those roles. This is the first year that Sherrick will serve in the position. Table officers are elected for one-year terms.

Brekken and Larson joined the MNCUF Board in October 2009. Sherrick was electedto the board last year.

At the MNCUF annual meeting in July, Kristi Mukomela of Novation CU in Oakdale, Larry Champeaux of Northern Communities CU in Duluth, and Kathy Harrington of Heartland CU in Inver Grove were elected to three-year terms on the board.

Mukomela has been on the board for more than eight years, serving as MNCUF chair from 2004-2010 and secretary/treasurer from 2011-2012.

Champeaux has served the credit union movement for more than 25 years. Since 2008, he has worked as the president/CEO of Northern Communities CU.

Harrington has more than 25 years of experience in the credit union industry, working at a credit union in Spain before moving to Minnesota. She has been the president of Heartland CU since 2010.

The board also includes Mary Hansen of Mayo Employees FCU in Rochester. Hansen has been on the MNCUF board since 2004.

Filene report summarizes CUDE program

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MADISON, Wis. (8/13/12)--Participants in the weeklong Credit Union Development Education (DE) Program leave with a stronger sense of purpose in addition to more credit union-specific knowledge, according to a Filene Research Institute paper.

The program, presented twice each year by the National Credit Union Foundation, consistently draws rave reviews from participants and a waiting list for those who wish to attend. But the curriculum remains a bit of a mystery within the industry, Filene said.

That sense of mystery is helpful in taking participants out of their comfort zone, said Bob Schumacher, a senior consultant for the Paragon Group and one of the facilitators at the April DE session.

The weeklong training includes classroom sessions, hands-on activities, and a wrap-up project that requires each small group to solve a case study that draws from recent happenings in the financial services space.

For their case studies, work groups are given 18 hours to research a complex financial topic, develop a recommendation, and present their ideas to an auditorium of credit union peers. While the case studies are fictional, they reflect true challenges from the credit union world.

The Filene report offers overviews of five case studies delivered during the Spring 2012 session. Topics addressed include national branding, members business lending, mergers, emerging markets and the international credit union system.

In addition to the credit union-oriented takeaways the program provides, students who go through the DE training also talk about "discovery" and "bonding" and the infusion of energy they receive through team building, according to the report.

"I loved the fact that you checked your title at the door: You didn't know that the person you'd been working with all week was a CEO until the end," said Teresa Shively of GESA CU in Richland, Wash.

A critical message of the DE program is that the roles participants play in their everyday jobs are important, said Lois Kitsch, national program manager of the REAL Solutions program at the National Credit Union Foundation and a DE facilitator, said.

"That they can be a catalyst for change or a reaffirmation of core credit union values," is another key message, Kitsch said. "I love the fact that these sessions create a group dynamic that drives powerful individual outcomes."

Those outcomes can be life changing, Schumacher said. "One participant told me that after she went through DE it became the filter through which she tried to make all of her decisions," he added. "It's a revelation for many."

CDFI Fund awardees highlight what CUs do

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WASHINGTON (8/10/12)--Credit unions among the grantees of the latest round of the U.S. Treasury Department's Community Development Financial Institutions (CDFI) Fund will get a chance to show what credit unions can do for their communities.

The Treasury announced Monday it awarded more than $186.8 million to 210 organizations serving low-income communities, including credit unions or credit union organizations, to close its fiscal year 2012 grants and awards program. The awards included 25 awards to community development credit unions (CDCUs) and credit union organizations totaling more than $19.9 million.

Credit union awards represented 12% of the total CDFI Fund grants under this round, and 83% of the credit unions receiving awards are members of the National Federation of Community Development Credit Unions. The federation also was among grant recipients, receiving more than $1.4 million.

Sandra Lumbley, CEO of Kerr County FCU, Kerrville, Texas, which received nearly $1.1 million, said, "Our credit union is dedicated to serving the underserved, and this grant will be put to great use in our community." It will use the grant to increase specialized lending that helps low-income borrowers break free from predatory lenders.

"We serve many members that traditional financial institutions can't or won't," Lumbley added.  "Our loans help people who believe that high interest payday and title loans are their only option."

Federation Interim President/CEO Pamela Owens said the CDFI Fund grant is just part of the story.  "A recent study released by the CDFI Fund shows that CDCUs mobilize $10 in community assets for every dollar of capital, which is more than any other type of CDFI," Owens said.  "We've known this for a long time, but were pleased to see the power of cooperative finance recognized by the CDFI study."

Communicating Arts CU in Detroit, Mich., received a $953,806 grant. CEO Hank Hubbard noted that the Detroit community has benefitted from the CDFI Fund in the past. "These grants allow us to reach out further into the impoverished areas of Detroit that other legitimate lenders cannot or will not go," Hubbard said. 

The credit union also received a CDFI grant in 2011. "The 2011 funds allowed us to refinance predatory car loans for approximately 100 people, saving them an average of $80 per month," Hubbard said. "That's a total savings for the group of over $400,000 through the life of the loans." He noted that as members pay the loans back, the credit union can lend the money out again.

"The Federation has fought long and hard to ensure that CDCUs continue to receive their fair share of CDFI awards," explained Owens. "Today we've seen a more equitable distribution with some of the awards going to credit unions that are new to the fund," she said.

Award winners were:

  • Bethex FCU, Bronx, N.Y., $95,500;
  • Bridgeway CU, Poughkeepsie, N.Y., $99,999;
  • Brooklyn (N.Y.) Cooperative FCU, $964,806;
  • Caddo Parish Teachers FCU, Shreveport, La., $100,000;
  • Citizens Community CU, Devils Lake, N.D., $1,453,806;
  • Communicating Arts CU, Detroit, Mich., $953,806;
  • Coshocton (Ohio) FCU,  $151,000;
  • Guadalupe CU, Santa Fe, N.M., $253,806;
  • JetStream FCU, Miami Lakes, Fla., $92,500;
  • Kerr County FCU, Kerrville, Texas, $1,084,187;
  • Kingsville (Texas) Community FCU, $483,806;
  • Latino Community CU, Durham, N.C., $1,453,806;
  • Lower East Side People's FCU, New York, N.Y., $494,806;
  • Molokai Community FCU, Kaunakakai, Hawaii, $375,900;
  • NATCO CU, Richmond, Ind., $313,606;
  • Neighborhood Trust FCU, New York, N.Y., $550,000;
  • Opportunities CU, Winooski, Vt., $1,453,806;
  • Pacoima (Calif.) Development FCU, $91,000;
  • Prince Kuhio FCU, Honolulu, $363,800;
  • Self-Help FCU, Durham, N.C., $1,453,806;
  • Shreveport (La.) FCU, $1,253,806;
  • Syracuse (N.Y.) Cooperative FCU, $100,000;
  • TULIP CU, Olympia, Wash., $100,000.
In addition to the federation, awards to credit union organizations included The Support Center; the Bois ForteBand of Minnesota Chippewa; and the Lakota FCU Steering Committee.

The federation was instrumental in the campaign that established the CDFI Fund, and credit unions have received more than $135 million in awards since its inception. "These awards have had a strong, positive impact on the credit unions and the communities they serve," Owens said, "because CDCUs have used this capital to mobilize more than $1 billion in impact."

Applying for CDFI Financial or Technical Assistance is a highly competitive process, but the benefits are worth the effort, said Pablo DeFilippi, federation director of membership. "The CDFI Fund still represents the largest source of external capital available for community development financing," he said.

In a related development, U.S. Rep. Silvestre Reyes (D-Texas) Wednesday that announced that El Paso CU Affordable Housing LLC also received a grant in the CDFI program. The $98,400 federal grant will assist the city's affordable housing markets. "This grant comes at a crucial time for El Paso, and will help improve the lives of many, especially our underserved communities coping with the slow economic recovery," said Reyes.

The CDFI was established in 2001, serves low-income residents of El Paso County and is operated by local credit unions that organized their resources together to provide community programs to enhance services of credit unions. It provides first mortgage loans and development services to its underserved community and will use its FY 2012 Technical Assistance award to increase its capacity to serve that market.

"There is certainly more that needs to be done in terms of affordable housing issues, but this is undoubtedly a step in the right direction," he said.

Calif.Nev. Leagues consolidate communications

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ONTARIO, Calif. (8/10/12)--Beginning this summer, member credit unions of the California and Nevada Credit Union Leagues will receive a single communications piece that captures everything the credit unions use from the trade association.

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The leagues eliminated or consolidated several communications pieces into one all-inclusive, easy-to-navigate format. CU Weekly, The latest news and information from the Leagues will be e-mailed to all members on Tuesday mornings. On Thursdays, a second consolidated piece will be sent from the leagues' Education and Training Department.  Communications of a more immediate nature will still be sent as needed.

Also, all the leagues' communication vehicles will sport a unified brand of blue, white and gold, making official communications easier to identify.

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"This new direction in communications is designed to put members first," said Carol Payne, league vice president of communications and marketing. "Our goal is to remedy the number of e-mails sent to member credit union CEOs, board members, executives and other professionals who rely on the leagues for useful and relevant information."

The changes were made after member credit unions first requested a new communications piece during a 2011 member feedback survey. That was followed by a five-phase audit, in-depth surveys, interviews and focus group discussion conducted from January to May with the help of consulting firm Goldman Consulting & Strategy. The goal was to review and address the frequency, distribution and content of communications, said the leagues.

Plans underway for new CU serving nonprofits

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SAN FRANCISCO (8/10/12)--A new credit union that would serve nonprofit organizations nationwide has cleared its first hurdle with regulators, according to American Nonprofits, a newly formed group that hopes to establish the credit union.

If approved, the proposed credit union, called American Nonprofit FCU, would serve nonprofit employees and their families across the nation. It could start operations as early as the end of 2013, Pamela Davis, the organization's founder and board president, told The Chronicle of Philanthropy (philanthropy.com Aug. 8).

While several professional associations serve nonprofits with specialties such as fundraising, people working for nonprofits have no place to get together to talk about finance and strategy, Jan Masaoka, head of the California Association of Nonprofits, told the Chronicle.

Many nonprofits need greater access to financial services; they are "redlined out of credit" because banks don't understand the nonprofit business model, Masaoka said. The proposed credit union would provide nonprofits and their workers an additional federally insured option for lines of credit, credit cards and working capital, she said.

Davis said that the group received preliminary approval from the National Credit Union Administration (NCUA) to allow organizations and individuals joining American Nonprofits to be eligible to join the credit union. 

The group received a $100,000 grant from Nonprofits Insurance Alliance Group in March to hire a staffer to steer the project, and the Wallace Alexander Gerbode Foundation contributed a $25,000 planning grant, said the article.

American Nonprofits plans to survey subscribers of  Blue Avocado, an online magazine that Masaoka edits, and more than 11,000 organizations served by Nonprofits' Insurance Alliance of California and the Alliance of Nonprofits for Insurance, which are members of the group forming the credit union.  The survey and guidance from NCUA will determine which cities the proposed credit union will focus on first.

Meanwhile, American Nonprofits is raising more funds to start up the credit union. Its goal is $10.5 million in commitments, with at least $500,000 earmarked for the initial operating capital, said the article.

NCBA Co-op Trust create Crash NCBA scholarship

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WASHINGTON (8/10/12)--The National Cooperative Business Association (NCBA) has partnered with The Cooperative Trust to create a "Crash NCBA" scholarship event, aimed at drawing young cooperative employees to the NCBA's annual meeting in Seattle, Oct. 2-5.

The Cooperative Trust was formed to give young credit union employees the chance to attend meetings such as the Credit Union National Association's Government Affairs Conference in Washington, D.C., and the World Council of Credit Unions' conference.

With the addition of "Crash NCBA," the Cooperative Trust focuses on all cooperative businesses and organizations, not just credit unions, for the first time.

The "Crash NCBA" event will coincide with the 2012 International Year of the Cooperative, a year-long event to highlight the work and strides of cooperative businesses worldwide.

"This is a very special event for us," Brent Dixon, founder of The Cooperative Trust, said of the wider-reaching scholarship event. "We're reaching out to include more co-ops and, hopefully, encourage more young people to get involved and learn from one another. And, as always, we're hoping to have a lot of fun with our 'Crashers.'"

Scholarships are based on merit and will be awarded to 15 participants based on the strength of their entry forms and essays. Interested candidates under the age of 30 can visit the NCBA website to apply for a scholarship slot before Aug. 23. Use the link.

Candidates accepted into the program will be given access to the entire conference, and separate breakout sessions with thought-leaders in the cooperative business space. The NCBA is sponsoring all 15 slots.

The "Crash NCBA" event will coincide with the 2012 International Year of the Cooperative, a year-long event to highlight the work and strides of cooperative businesses worldwide.

MBL cap forces down CU small-biz lending Biz2Credit

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NEW YORK (8/10/12)--Small-business lending approvals in July by credit unions nationwide stood at 54.6%, revealed the Biz2Credit Small Business Lending Index, a monthly analysis of 1,000 loan applications on Biz2credit.com.  

The July loan approval rate of credit unions dipped from 55.8% in June. The figure represents the lowest approval rate for credit unions since August 2011, when the figure stood at 54.2%. Some credit unions have reported that they had reached their lending limit, which currently is 12.25% of total assets, said Biz2Credit (PRWeb Aug. 9).

The slowdown is due, in part, because some credit unions reportedly "capped out" on the member business lending (MBL) limit, while others are being more cautious in their lending because of Small Business Administration rules, the analysis says. The Credit Union Small Business Jobs Bill proposed by U.S. Sen. Mark Udall (D-Colo.) seeks to raise the credit union MBL cap to 27.5% of total assets from the current figure of 12.25%, the study said.

The Credit Union National Association (CUNA) and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

Approvals in July by big banks ($10 billion-plus in assets) improved for the second consecutive month to 11.3% from 11.1% in June, an indication that demand for business lending is continuing.

Conversely, small-bank lending dropped slightly to 47.4% in July from 47.5% in June. This figure however is still up two and a half percentage points from 44.9% in July 2011.

Alternative lenders--accounts receivable financers, merchant cash advance lenders, Community Development Financial Institutions (CDFI), micro lenders, and others--are increasing their lending. In July, alternative lenders approved 64.1% of loan requests, up from 62.9% in June and nearly 12 percentage points higher than a year ago. The 64.1% approval rate was the highest figure since the Biz2Credit Small Business Lending Index began in 2011.

To compile the monthly index, Biz2Credit analyzed loan requests ranging from $25,000 to $3 million from companies in business more than two years with an average credit score above 680. The data are from more than 1,000 small business owners who applied for funding on Biz2Credit's online lending platform.

CUs reached 413106 students in school year

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MADISON, Wis. (8/10/12)--Credit unions reached 413,106 students in 13,008 classrooms presentations during the 2011-2012 school year, according to the National Youth Involvement Board (NYIB).

"Credit unions have responded to young people seeking guidance and fundamental financial knowledge, and not a moment too soon," outgoing NYIB Chairman Rebecca Isaacs shared. "The magic lies in cooperation. Never have I seen an organization with so many willing to share their stories, their successes, their failures, their triumphs and their heroes."

Anissa Arthenayake of OSU FCU, Corvallis, Ore., conducted the most classroom presentations (730). Marsha Lunden of Desert Schools CU, Phoenix, reached the most students (17,048) in the 2011-2012 reporting year. Arthenayake and Lunden increased their totals from the previous year.

The NYIB "Top Classroom Presenter"--the person with the greatest percentage increase in classroom presentations over the previous year--was Michael Lee of The Golden 1 CU, Sacramento, Calif. Lee made 174 presentations in 2011-2012, increasing his total 128.95% from 2010-11.

Julie Blaylock of Community Financial CU, Plymouth, Mich., was recognized for "Most Students Reached." Blaylock educated 3,297 students in 2011-2012, a 411.96% increase over the number of students she reached in 2010-2012. 

The NYIB also recognized the region edcuating the most students. The Southeast Region reached 129,144 students.

NYIB, celebrating its 40th year and the recipient of the 2011 Herb Wegner award for outstanding organization, is composed of volunteer credit union professionals devoted to financial education and youth-oriented services. Among NYIB's annual objectives are building and refining the data, helping credit unions quantify their work and providing regulators, legislators and others an example of credit unions' philosophy at work.

NYIB elects 2012-13 leaders honors two

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NEW ORLEANS (8/10/12)--The National Youth Involvement Board (NYIB) announced the election of several leaders and presented two awards at its annual meeting in New Orleans last week.

Rebecca Isaacs, business development director of the Credit Union Association of New Mexico, resigned her position of chairman after two years of service. Isaacs will remain on the board as chairman emeritus for one year.  Julie McLean, director of financial education for Arapahoe CU,  Centennial, Colo., will be chairman for 2012-2013.

NYIB regional coordinators elected to two-year terms include:

  • Teresa Shively, education specialist, Gesa CU, Richland, Wash., Northwest region;
  • Angela Halsey, director of marketing and business development, NuVista FCU, Montrose, Colo., Southwest region;
  • J.R., Webster, financial educator, Tinker FCU, Oklahoma City, Okla., South Central region; and
  • Incumbent Juli Lewis, youth marketing manager, Suncoast Schools FCU, Tampa, Fla., Southeast region.
Continuing their second year terms are:

  • Anne-Marie Bisson, assistant vice president of financial education, Jeanne D'Arc CU, Lowell, Mass., Northeast regional coordinator; and
  • Janice Quigg, marketing and community development specialist, OUR CU, Royal Oak, Mich., North Central regional coordinator.
In addition to McLean, board officers include:

  • Vice Chairman--Lewis;
  • Secretary--Shively;
  • Treasurer--Bisson;
  • Media Manager--Quigg;
  • Vendor Relations Specialist--Webster; and
  • Scholarship Specialist--Halsey.
McLean also was recognized as the 2012 Delegate of the Year.  She works directly with public schools in Arapahoe County, providing financial presentations and workshops.

Webster was recognized as NYIB's Outstanding Volunteer of the Year. His primary focus at Tinker FCU is to deliver financial education to schools, businesses, and community organizations.

La. league honors 12 Hall of Famers more

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HARAHAN, La. (8/10/12)--The Louisiana Credit Union League inducted 12 individuals into its Hall of Fame during the organization's 78th annual meeting and convention last week.

The league also presented its Credit Union National Association (CUNA) recognition awards at the convention, which was attended by more than 400 credit union representatives.

Hall of Fame honorees included:

  • Tina Atkins, Kraftman FCU, Bastrop;
  • Allen A. Dugas, Lafayette  (La.) Schools' FCU;
  • Maureen Genovese, Shell New Orleans (La.) FCU;
  • Nat Gisclaire, Lafayette Schools' FCU;
  • B. Fay Jackson, Centric FCU, West Monroe;
  • Marguerite Jones, Iberville FCU, Plaquemine;
  • Vicki O'Brien, Jefferson Parish Employees FCU, Harahan;
  • Dawn L. Ruggles, VAC FCU, Shreveport;
  • Edward B. Shaver, Centric FCU; and
  • Emily Stewart, Iberville FCU.
LCUL awarded three Louisiana credit unions with the CUNA Recognition Awards. The winners will advance to CUNA's national competition.

Awards and credit unions recognized include:

  • Desjardin Youth Financial Literacy Award--New Orleans Firemen's FCU, Metairie;
  • Louise Herring Award for Philosophy in Action--Pelican State CU, Baton Rouge; and
  • Dora Maxwell Social Responsibility Award--Shell New Orleans FCU.

League kicks off young professionals group with cruise

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MERIDEN, Conn. (8/10/11)--The Sea Mist, a cruise boat, was filled with young (under 40) credit union professionals representing Connecticut's credit unions at their kick-off meet and greet to exchange possible ideas for the future of the state's credit union movement.

Click to view larger image Young professionals from Connecticut credit unions enjoy fresh air and a breeze aboard the Sea Mist at the first gathering of the new Young Professionals Program of the Credit Union League of Connecticut. (Photo provided by the Credit Union League of Connecticut)
The newly formed Young Professionals Program of the Credit Union League of Connecticut cruised among Thimble Islands off the coast of Stony Creek, Conn.

At the event, league President/CEO Tony Emerson discussed the overall function of the program, and  Kelly Fuhlbrigge, league vice president, government relations, discussed the importance of getting involved in grassroots efforts, political fundraising and the government relations role of the league.

Many attendees "had no idea that we did so much on both the state and federal level and they could play an important role in shaping the future of the credit union movement," Fuhlbrigge said.

The group agreed to form a committee to discuss future events and work to enhance growth and participation.

Survey on switching banks Consumers in control

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LONDON (8/9/12)--Forty percent of consumers in the world lost confidence in the banking industry in the past year, according to a new global survey by London-based Ernst and Young. They are less loyal and are switching banks--many to more than one financial institution.  It is the year that customers are taking control of their banking relationships.

That could bode well for credit unions, which already are experiencing unparalleled growth in membership. Credit unions must ensure that disgruntled bank customers can make the switch to low fees and better rates and better member service at credit unions.

Among the survey's findings:

  • Less than half  (44%) of bank customers say their bank adapts products and services to meet their needs; 70% say they are willing to provide banks more personal information but they expect tangible improvements in the suitability of products and services they are offered.
  • About 22% want lower costs and better service, with improving fees and charges a top priority, followed by strengthening online and mobile banking.  But they want more than a better deal; they want flexibility to shape the relationship, contacting their bank when and how they choose. They prefer online channels for simple transactions but demand high quality personal service for more complex transactions and advice.
  • Banks must choose the model (low cost competition, high touch service, accessibility) for where and how they compete.
Ernst and Young urged banks to give customers more flexibility, help customers to shape their experience, and shape business models around customer needs.  It made several suggestions for each area. Credit unions can monitor how banks react. If banks take the suggestions to heart, credit unions know their competitors will be focusing their efforts in the marketplace to these areas.

Give customers more flexibility:

  • Make pricing and service promises transparent. Banks will need to rebalance fee structures for clarity for customers and sustainability for regulators and investors.
  • Offer segmented levels of service: Customers can opt to buy into certain products and services, earn upgrades through loyalty in terms of longevity, share-of-wallet or value generated by the customer.
  • Move from multi-channel to omni-channel distribution. Customers care more about convenience than channels and want a fully integrated banking experience that combines advantages of all the channels. Omni-channel distribution can leverage data gathered from all channels.
Help customers to shape their experience:

  • Encourage customer self-service. Banks need to influence customers' decisions to manage their revenue effectively, which means improving how they provide information and advice. Target self-directed customers and encourage greater self-service through financial planning tools, demonstrations of "how people like you are investing," or ranges of product and pricing bundles.
  • Shift marketing from "push" to "pull." Word of mouth is gaining importance and direct selling is waning.  Recruit satisfied customers as advocates. Recruit online affinity groups as marketers by letting them select and shape the communications they receive.
  • Develop flexible loyalty programs. Loyalty programs are a growing trend in some markets. Most customers want financial rewards. Although costly, there are benefits in loyalty and advocacy. Tailor programs for affinity groups and let customers choose rewards based on their value to the bank.
Shape business models around customer needs:

  • Make low-cost digital channels customers' preferred choice. Determine which services customers want to handle through branches and encourage--not force--other transactions to move to digital channels, using price incentives, if necessary.
  • Prioritize investment on critical customer interactions. Focusing operational improvements on these will optimize the impact on attrition, dormancy and loyalty, and benefit their costs to serve. Target limited capital spending budgets for maximum effect on customer satisfaction.
  • Use innovative technology to deliver the retail bank of the future. The use of cutting edge technology is vital to all other implications identified, including breaking down silos, creating omni-channel distribution, developing innovative rewards for loyalty and giving customers the ability to personalize products and services. Banks will need to partner with technology innovators.
The study also identified 10 critical customer interactions.

  1. Changes to fees and charging structures;
  2. Account switching;
  3. Account opening or closing;
  4. Life events (marriage, birth and so on);
  5. Change-of-account details;
  6. Complaint handling;
  7. First time into the debt collection process;
  8. Lost or stolen card;
  9. Setting up a payment; and
  10. Buying a new product.

CU System briefs (08/08/2012)

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  • DETROIT (8/9/12)--Michigan police are searching for five men responsible for placing skimming devices at ATMs over three counties--Wayne, Oakland and Livingston counties--and stealing more than $500,000 from the bank accounts of hundreds of people (Detroit Free Press Aug. 7). The devices blend in with the ATMs so well they are difficult to detect. They contain a camera that captures information such as the card number and the personal identification number as it is inserted into the ATM. The scammers withdraw between $40 to $500 from victims' accounts, choosing smaller amounts to stay under the maximum daily withdrawal limit. The scammers have hit at dozens of banks in the counties, said the Oakland County Sheriff's Office …
  • DES MOINES, Iowa (8/9/12)--Coopera CEO Miriam De Dios was recognized by two credit union industry organizations for her work in helping credit unions reach and serve the Hispanic market.  She was awarded a World Council of Credit Unions (WOCCU) Young Credit Union People Program (WYCUP) scholarship  at the 2012 World Credit Union Conference in Gdansk, Poland July 15-18. The Iowa Credit Union League nominated her for the scholarship.  She also has been elected to serve on the board of directors of the Network of Latino Credit Unions & Professionals, a group of credit unions and professionals dedicated to promoting credit union membership among Hispanics. The board comprises 13 members who serve two-year terms. Coopera, owned by Affiliates Management Co., the Iowa league's holding company, is also a strategic alliance partner of the Credit Union National Association    …
  • DOWNEY, Calif. (8/9/12)--Financial Partners CU, a $788 million asset credit union based in Downey, Calif., celebrated the spirit of innovation July 31 at the Columbia Memorial Space Center by announcing a scholarship created to help encourage the desire for education in sciences among community students.  Downey has a history of innovation in the aerospace industry. The center is on the site of the builder of many World War II aircraft, rockets, Apollo space module, the Space Shuttle, and more.  Financial Partners' current and past members were among the pioneers of aviation.  The credit union was established in 1937 by eight employees of the American Aviation Co. "Sponsoring this exhibit, community events and the Innovation Scholarship are natural connections to our roots and the community we live in," said Financial Partners CU CEO/President Nader Moghaddam …

Man gets nine years for fraud in CUs collapse

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CLEVELAND (8/9/12)--A local businessman from Albania was sentenced Tuesday in a federal court in Cleveland, Ohio, to nine years in prison for his role in a fraud ring that brought about the collapse in 2010 of Eastlake, Ohio-based St. Paul Croatian FCU.

Arben "Benny" Alia, 35, of  Eastlake, who owns a local bar and grill and had pleaded guilty to money laundering, also was ordered to pay $3.5 million in restitution to the credit union. Alia is a native of Albania and is not a U.S. citizen.  After serving his prison term, he will be deported (News Herald Aug. 7).

The National Credit Union Administration (NCUA) placed St. Paul Croatian FCU into conservatorship on April 23, 2010, and shuttered it the following May 1. Its collapse cost the National Credit Union Share Insurance Fund about $170 million.

The credit union's former CEO, Anthony Raguz, pleaded guilty to issuing more than 1,000 fraudulent loans totaling more than $70 million to 300 account holders and  accepting more than $500,000 in bribes, kickbacks and gifts from the borrowers. (News Now May 14 and 31). His sentencing is scheduled for Nov. 20.

Alia was one of more than 19 individuals arrested in the case. He was one of the organizers but not a supervisor, and a gambling addiction contributed to the offense, said his attorney.  Alia took out his first loan in 2005 from St. Paul to buy a restaurant, which he sold the following year. He continued to work there until he bought Milano's Bar and Grill in 2009. He agreed to forfeit his bar, liquor license and a 2007 Mercedes.

The alleged ringleader in the loan fraud scheme, Koljo Nikolovski, 49, of Eastlake and Skopje, Macedonia, was sentenced in May to 18 years in prison. He allegedly obtained about $2.9 million in loans at the credit union from 2003 through 2005 (News-Herald May 12).

U.K. Gen Y survey 83 dont recommend their PFI

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LONDON (8/9/12)--If Gen Yers in the United Kingdom are like their counterparts in the U.S., banks might be in trouble with this age group:  83% of young adults age 20 to 29 surveyed in the U.K. said they would not recommend their primary financial institution (PFI). Credit unions have an opportunity to learn from banks' mistakes and capture this market.

Seventeen percent of the Gen Yers surveyed said their PFI was worthy of their personal endorsement, according to The Young Money survey conducted by London-based financial services consultant MRM. It set out to measure the attitudes of Gen Y toward financial subjects such as banks, money and home ownership. Credit unions weren't mentioned in the survey, but many U.S. credit unions are taking measures to attract the demographic to increase membership for the future.

Big banks are a "turn-off for 20-somethings," said MRM Director Michael Taggart, who cautioned that if banks fail to win their loyalty and trust today, "they are storing up big problems in years to come" (TheFinancialBrand.com Aug. 8).

Those surveyed indicated these turn-offs:

  • 22% had gone to their PFI only to find it closed;
  • 10% said they hung up prematurely during a call to the bank because they were frustrated or angry. Those ages 20-24 were more likely to do this than those ages 25-29;
  • 10% couldn't access their account after failing an attempt to verify their identity;
  • 7% complained about the bank in social media channels; and
  • 3% said they had resolved an issue with their bank through social channels.
The group expressed these worries about their finances: 

  • 45% (54% of those age 25-29 and 38% of those in their early 20s) said they will never have enough money to buy a home;
  • 38% said they have little job security, which makes it difficult to buy a home, while 14% said they did not want to be tied down to a property;
  • 14% said that owning property is actually a poor investment;
  • 18% had a negative outlook on a home's investment potential; and
  • 10% plan to stay home and live with their parents rather than purchase a property.
Gen Yers largely live from paycheck to paycheck, with respondents indicating that they knew of someone in their 20s who:

  • Went without food in order to cover expenses or make money (22%);
  • Had taken out a payday loan (19%); and
  • Had sold their hair to balance their checkbook 3%).
Credit unions can learn from the survey:

  • Make sure members know where to go to communicate with you, that your communications are up to date, and that your staff are trained in resolving difficulties clearly in their member service to create loyalty.
  • Use social media channels to communicate with this group, but make sure the technology is working and user friendly.
  • Offer products aimed at helping this group save and invest their money wisely. Educate them about the advantages of owning a home and about the disadvantages of payday loans. Offer budgeting information to help Gen Y better pace its saving and spending.

Twelve students join Googolplex youth editorial board

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MADISON, Wis. (8/9/12)--Twelve students who live in America and Japan were selected to serve one-year terms as youth editorial board members for the Credit Union National Association's (CUNA) website toolkit called Googolplex: The CU Guide for Student Moneymakers.

"Peer-to-peer sharing is what the younger generation is all about," said Rena Crispin, CUNA's Googolplex managing editor. "We rely on the feedback we receive from our youth editorial board members to help us develop financial literacy tools that speak directly to children and young adults. Our youth board is a vital part of providing financial education at a young age."

Googolplex is a youth-focused element of CUNA's website content and toolkits, which guide credit union members through financial decisions at every stage of life. Googolplex features interactive games, videos, blogs and other content dealing with money matters and real life issues to promote financial literacy for youth aged 6-18.

Youth editorial board members write critiques of stories and games in age-specific sections of Googolplex's award-winning, three-in-one website each month. At the end of their terms, each board member writes an original story for Googolplex.

The Clubhouse Crew for 5-Spot, aimed at elementary school students, includes:

  • Ashlyn, Keesler FCU, Florida;
  • Colby, Keesler FCU, Kentucky;
  • Kimberly, Landmark CU, Wisconsin; and
  • Sean, Keesler FCU, Misawa Air Base, Aomori Prefecture, Japan.
The Super Youth Team for AJ's, intended for middle school students, members are:

  • Allison, SAFE FCU, South Carolina;
  • Emily, Keesler FCU, Louisiana; and
  • Talia, First American CU, Wisconsin.
The Teenage Panel advising C-Note, focused on high school students, consists of:

  • Alex, West Virginia Central CU, West Virginia;
  • Bryan, Numark CU, Illinois;
  • Daniel, Kinecta FCU, California;
  • Jacob, Hughes FCU, Arizona; and
  • Marta, United Educators CU, Minnesota.
"Our youth board members give us feedback that helps their peers feel welcome and validated whenever they use Googolplex on their credit unions' websites," said Susan Tiffany, CUNA  director of consumer periodicals.

For more information, use the links.

Manager of defunct CU charged with fraud

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NORTH  PHILADELPHIA, Pa. (8/9/12)--Federal prosecutors Tuesday charged the former manager of now-defunct Borinquen FCU (BFCU) in North Philadelphia, Pa., with conspiracy to defraud the government.

Ignacio "Nacho" Morales, 40, also was charged with embezzling more than $2.3 million from the credit union, which led to its closure (bizjournals.com and The Philadelphia Inquirer Aug. 7).

Morales allegedly used the money in attempts to purchase cocaine and real estate, federal authorities said.

BFCU served low-income Hispanics in North Philadelphia. The National Credit Union Administration assumed control over the credit union in June 2011, but shuttered it within two weeks and liquidated its assets, the Inquirer said.

Chartered in 1974, BFCU had assets of  roughly $6 million and served 8,600 members.

In addition to the conspiracy to defraud the government embezzlement charges, Morales also is accused of making false reports on federal credit institution entries, filing false income tax returns, engaging in monetary transactions in property derived from specified unlawful activity, and attempted possession with intent to distribute more than five kilograms of cocaine.

CUs take measures as auto loan delinquencies drop

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SCHAUMBURG, Ill. (8/9/12)--Consumers continued to make timely automotive loan payments in the second quarter, lowering the average delinquency rate across all lending organizations, including credit unions, captive finance arms, finance companies and banks, Experian Automotive announced Wednesday.

The analysis indicated that the 30-day delinquency rate was 2.52%, compared with 2.59% in the second quarter 2011. The 60-day delinquency rate was 0.58, down from 0.6% in second quarter 2011.

Vehicle repossessions also dropped, coming in at 0.43% in second quarter 2012, compared with 0.59% for that period last year. That is a 27.9% drop year over year.

"Consumers continue to do an excellent job of paying back their vehicle loans in a timely fashion, and that's good news for everyone in the industry," said Melinda Zabritski, director of automotive lending for Experian Automotive. "Both 30- and 60-day delinquencies are at historic lows, and the percentage of money at risk has dropped as well. This gives lenders needed stability, which filters through the auto industry to consumers in the form of easier-to-obtain loans."

Second-quarter total balances of loan portfolios also rose for all types of lending organizations, reaching $682 billion, compared with $646 billion in second quarter 2011. Despite this strong growth, overall loan balances still lag behind prerecession levels, said Experian Automotive. In second quarter 2007, outstanding loan balances reached $701 billion.

"Automotive loan portfolios continued their strong comeback in second quarter 2012, as delinquencies continued to drop and total dollar volumes continued to rise," Zabritski said. Noting the high interdependence between the automotive loan industry retailers and financial institutions, "this continued strong performance for loan portfolios is good for automotive retailers and consumers alike," she added.

Nationwide, 29.1% of all credit union loans in June were auto loans, according to the Credit Union National Association's (CUNA) Monthly Credit Union Estimates. New-auto loans were 10.2% of all credit union loans--down from 10.5% in June 2011. Used-auto loans constituted 18.9% of all credit union loans--up from 18.3 the previous June, CUNA said.

Credit unions work harder to help their members avoid delinquencies on loans. For example, Neighborhood CU, a $314 million asset credit union based in Dallas, gives members six months to walk away from their auto loans if they lose income due to unforeseen circumstances (thefinancialbrand.com July 26).

Its Vehicle Return Program is one of four components in a bundle of supplemental insurance options on auto loans the credit union offers in a package called the MPower Vehicle Protection Plan. It also recently began offering 72-month auto loans with a 2.74% annual percentage rate and 90 days of no down payments.

Dutch entrepreneurs form CUs in bank credit crunch

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AMERSFOORT, Netherlands (8/9/12)--Shunned by banks, Dutch entrepreneurs are planning to set up "credit unions" to obtain loans, a Dutch newspaper reported on Wednesday.

The first credit union in the Netherlands will begin operation in September under the name Midden-Nederland, according to the Financieele Dagblad.

The financial organization was formed when a group of entrepreneurs shared a mutual frustration: a lack of credit from banks. Members of the credit union include a removal company, a pensions advice agency and a wine wholesaler.

Members who apply for a loan will be subjected to a rigorous approval process. Start-ups that receive funds will be assigned a coach--a member of the credit union who is experienced in business or finance.

Plans also are in the works for other credit unions, the Financieele Dagblad said.

Videos testimonials turn mainstream in CU marketing

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MADISON, Wis. (8/9/12)--Credit unions are increasingly turning to video to capture testimonials from members about the great work credit unions do and to record consumer dissatisfaction with bank fees and service.

McGraw Hill FCU, East Windsor, N.J., is using video and social media to spearhead an industry-wide movement that demonstrates how credit unions provide financial wellness in ways that contrast with large banks.

"We Hear You" provides a nationwide platform for consumers to create and share video stories about their personal experiences with credit unions and large banks.

The contest is open to everyone, including members of any credit union. Entrants can post videos in which they tell their stories about how their credit union helped them or how they were frustrated with a bank that may have charged them unnecessary fees or imposed misleading account terms.

The $293 million asset credit union has provided some inspiration to potential entrants through its original "We Hear You" video. To view it, use the link.

The contest offers $1,500 in prizes.

Some credit unions tie video into their financial education efforts. For example, Dupaco Community CU, Dubuque, Iowa, has teamed with Mediacom cable, to challenge consumers to create 30-second videos sharing their tips on saving more and spending less.

The "Shift into Thrift" Video contest is intended to inspire thrift through peer-to-peer sharing of ideas for financial success, said Dupaco Community.

Leagues also are using videos to get across the credit union difference and document testimonials from members. In the Aug. 3 edition of its Weekly Conversation newsletter, the North Carolina Credit Union League featured a video of Ashville, N.C.-based Oteen VA CU member Jane Nunziato describing how the credit union helped her and her husband obtain a low-interest loan to obtain a hearing aid.

"We don't have health insurance right now, so the only way we were able to get a low-interest loan was through the Oteen VA CU," Nunziato said in the video.

The North Carolina league has an extensive library of videos that demonstrate how credit unions help their members. Jeff Hardin, director of communications with the league, travels around the state to film the videos at credit unions with compelling programs. Some credit unions such as Local Government FCU, Raleigh, N.C., and Latino FCU, have submitted their own videos, he said.

"As an organization we feel like credit unions are doing great things and the more that we allow people to tell those stories, the more successful credit unions are going to be, and the more people are going to fully and fundamentally understand the differences between credit unions and banks," Hardin told News Now.

The Michigan, Texas and Wisconsin credit union leagues have also used video to share the credit union message.

Credit unions and leagues also are using video to capture the attention of Gen Y. Young & Free, a campaign launched in 2007 by Canadian marketing firm Currency Marketing, is a blend of social media and product promotion built around Gen Y spokespeople, or spokesters, who generate publicity or "buzz" for credit unions through word-of-mouth promotion, including YouTube videos. The concept is built around a contest to determine who will become the credit union's or league's spokesperson.

Applicants create buzz for themselves--and drive traffic to the credit unions Web page--through their meet ups, Facebook pages, YouTube videos and tweets. Videos are a critical element used by candidates in building word-of-mouth support. The spokester is chosen through an online vote, and receives an annual salary from the credit union, plus a car to attend community events, and all the technology needed to keep in touch with credit unions' Gen Y members.

The spokester interacts with young members though social media. Video is a critical element of that interaction.

Kylie Keene posts videos featuring some of the inspiring people she meets in her travels as Maine credit unions' Young & Free spokester, according to the Maine Credit Union League (Weekly Update Aug. 3).

New Mexico Young & Free also posts videos of the latest adventures of its new Young & Free spokester, Anthony Almanzar.

Jenn Cloud, Young & Free spokester for Vantage CU, Bridgeton, Mo., maintains a video library of her travels  and financial advice.

The Arkansas Credit Union League has centered its statewide awareness campaign around video. The league adopted the "My Credit Union is Everywhere," statewide cooperative advertising campaign designed by the Grand Rapids, Mich., credit union service organization, CU*Answers (News Now July 6).

The video was adapted for a 60-second television commercial, a 30-second radio spot and a billboard. The campaign also included a YouTube link and postings to Facebook.

Even regulators know the value of getting a message across visually. The National Credit Union Administration (NCUA) uses video to communicate with credit unions and credit union members, describe monthly economic trends, and feature speeches of its board members from the Credit Union National Association's Governmental Affairs conference on its website. It also includes videotaped messages from Chairman Deborah Matz.

CU sets fund for Sikh temple shooting victims families

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WAUKESHA, Wis. (8/8/12)--A West Milwaukee, Wis.-based credit union, has set up a relief fund for victims of Sunday's Oak Creek Sikh temple shootings and their families.

Six worshipers, including the founder of the temple, and the gunman died in the Sunday morning attack, which received national media attention. Three other people, including a police officer, were critically injured (USA Today Aug. 7).  

Local media reported several community nonprofits and individuals are mobilizing efforts to assist the Sihk community in the aftermath.

"This incident has shaken not only the Oak Creek community, but the Milwaukee metro community and the state," Steve Wesson, president/CEO of the $232.2 million asset Guardian CU, told the Waukesha Freeman (Aug. 7).  The credit union has a branch located in Oak Creek, Wis., which is a suburb near of Milwaukee.

"We are part of this community and our deepest sympathies and condolences go out to those affected by this senseless crime," Wesson told the publication.

Community members can stop by Guardian CU's Waukesha branch or any of its other branches in southeastern Wisconsin to donate to the fund. All donations collected by the credit union will go directly to the Sikh temple, Wesson said.

Guardian CU said it will match the first $2,000 raised for the fund.

In the media Arkansas CUs grow

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LITTLE ROCK, Ark. (8/8/12)--After years of consolidation, the number of credit unions in Arkansas has solidified at 62 during the past year, according to a local publication.

To the best of her knowledge, all those credit unions are doing well, and no mergers are imminent, said Reta Kahley, president of the Arkansas Credit Union League (Arkansas business.com Aug. 6).

Telcoe FCU, Little Rock, the second-biggest credit union in the state, has seen the strongest  growth, adding $25.1 million in assets in 2011, and $13 million in the first six months of  2012. It is the second Arkansas credit union to pass the $300 million-asset plateau, said the publication.

The state's largest credit union--Arkansas FCU of Jacksonville--has $837.7 million in assets at the end of 2011--up $16.5 million, or 2%, from the end of 2010. In the first half of 2012, the credit union has added $30.5 million is assets, it told the publication.

The article also mentioned strong growth at Milway FCU, Texarkana; Arkansas Best FCU, Fort Smith; and Arkansas Superior FCU, Warren.

Entries for Excellence in Lending Awards due Sept. 7

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MADISON, Wis. (8/8/12)--Sept. 7 is the deadline for entries for the 13th annual Excellence in Lending Awards, sponsored annually by CUNA Mutual Group and the CUNA Lending Council.

Established in 2000, the awards recognize outstanding lending results and practices by individual credit unions, and their ability to serve members while sustaining sound financial performance. Credit unions demonstrating an ability to meet their members' needs through innovation are excellent award candidates, said CUNA Mutual and the council.

Six credit unions will be recognized in four lending categories:

  • Consumer lending:  Two awards, one for assets of less than $250 million and the second for assets more than $250 million;
  • Mortgage lending: Two awards, one for assets of less than $250 million and one for assets totaling  more than $250 million;
  • Low/Modest Means lending: Any asset level; and
  • Business lending:  Any asset level.
Awards will be presented at the CUNA Lending Council's Annual Conference Nov. 4-7 at Miami Beach, Fla. The award includes airfare, hotel and conference registration for one representative of each winning credit union.

For more information or application forms, use the resource link.

SCFCU seeks to exclude BTD brand from Vermont ban

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CHARLESTON, S.C. (8/8/12)--South Carolina FCU (SCFCU) in Charleston, S.C., is drafting a letter to the Commissioner of the Vermont Department of Financial Regulation (DFR), seeking to use a phrase the credit union trademarked in November 2011 after Bank Transfer Day (BTD)--"Every day is Bank Transfer Day"--in Vermont.

Vermont DFR had issued a notice of intent to serve a cease-and-desist order to Vermont State Employees CU (VSECU) over the credit union's use of words "banking" and "[to] bank," which the regulator said would confuse consumers, who might not understand they are banking at a credit union rather than a bank (News Now Aug. 7).

SCFCU had the trademarked phrase --"Every day is Bank Transfer Day"--transferred to the Credit Union National Association (CUNA), so every credit union nationwide could use it and roll it out as a "rallying cry," Troy Hall, SCFCU chief operations officer told News Now.

When Vermont DFR made its decision on the injunction to ban the words, SCFCU's attorney contacted the DFR to find out what the process is to appeal, and was told to send a letter, Hall said.

"We started rolling it [the phrase] out as a branding tool," Hall explained. "We want to see a national rallying cry because credit unions have been too long without a national presence in that regard. 'Every day is Bank Transfer Day' is that rallying cry that we need. It is not a marketing campaign."

October would be a great month to emphasize that cry because it can grab people's attention nationwide before they become focused on the presidential election in November, Hall said. See the link.

"The [Vermont] cease-and-desist order was made because bankers claim we are using [those words] in a deceptive manner," Hall said. "We want to make sure we can use [the BTD phrase] and make sure the trademark is not diminished. We want to make sure credit union can still use it so it will be a niche in the market place," he told News Now.

Western CUNA Management School graduates 75

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ONTARIO, Calif. (8/8/12)--The 51st Western CUNA Management School (WCMS) graduated 75 students on July 26 at Pomona College in Claremont, Calif.

Western CUNA Management School (WCMS) high honors students with faculty members are, from left: WCMS President Jim Likens; David Stacey, America First CU, recipient of the Rick Craig Prize for Excellence in Project II; Josh Kroll, Park Side FCU James Nelson, Jordan FCU; Rachel Pross, Northwest Community CU; Erynne Hallock, Numerica CU; and WCMS Dean Michael Steinberger.
In addition to the 75 members of the graduating third-year Kappa class, 91 second-year Lambda students and 116 first-year Mu students attended the 2012 school session, held July 15-27.

"You attended WCMS during one of the worst recessions in U.S. history," Lee Alderman, class speaker and assistant vice president of training and financial literacy for Redwood CU, Santa Rosa,  Calif., told graduates. "You took every opportunity to encourage each other along the way. You have an over-the-top positive and enthusiastic spirit for everything you do."

Alderman also received the 2012 Charles M. Clark Memorial Award, presented each year to an outstanding member of the graduating class chosen by the class and faculty.

WCMS Dean Michael Steinberger announced academic honors. During a three-year period, students have five opportunities to earn academic honors. Honors and High Honors are awarded to the highest achievers on both the examinations taken at the end of each school year and the analysis of each of their two projects.

This year's Honors students were:

  • Lee Alderman, assistant vice president of training and financial literacy, Redwood CU, Santa Rosa, Calif.;
  • Heather Plaizier, human resources business partner specialist, Mountain America CU, West Jordan, Utah;
  • Lori Hill, compensation and benefits manager, Travis CU, Vacaville, Calif.; and
  • Jeanne Pickens, vice president of marketing, Rogue FCU, Medford, Ore.
High Honors students were:

  • David Stacey, treasurer's office manager for America First CU, Ogden, Utah;
  • Josh Kroll, director of member service for Park Side FCU, Whitefish, Mont.;
  • James Nelson, branch manager for Jordan FCU, Sandy, Utah;
  • Rachel Pross, compliance-risk manager for Northwest Community CU, Springfield, Ore.; and
  • Erynne Hallock, assistant vice president of branch administration and sales for Numerica CU, Spokane Valley, Wash.
Honors students of the Western CUNA Management School pose with faculty members. From left: WCMS President Jim Likens; Lee Alderman, Redwood CU, and recipient of the Charles M. Clark Memorial Award; Heather Plaizier, Mountain America CU; Lori Hill, Travis CU; Jeanne Pickens, Rogue FCU; and WCMS Dean Michael Steinberger. (Photos provided by Western CUNA Management School)
According to its tradition of giving back to WCMS, the graduating class presented a fundraising check totaling more than $72,000 to WCMS President James Likens, plus another check for more than $10,000 from a school auction. Additional funds were donated to the Joseph Melchione Memorial Fund to honor late long-time WCMS faculty member and credit union attorney. This new fund was created by Melchione's partners at Styskal, Wiese & Melchione to provide perpetual WCMS scholarships to the school's program. The 50th graduating Iota Class of 2011 also presented $1,200 its members recently raised for the Melchione Memorial Fund.

This year's James D. Likens Alumni Recognition Award--given to honor WCMS alumni for significant achievements in the credit union field since graduation from the school--went to Annette Zimmerman, president/CEO of PrimeWay FCU, Houston. A new award--the Rick Craig Prize for Excellence in Project II--went to David Stacey of America First CU, Riverdale, Utah.

America First CU President and CEO Rick Craig, who is retiring later this year, also was recognized for his dedication to WCMS as an instructor for 31 years.

Spokane Teachers FCU President/CEO and commencement speaker Tom Johnson offered words of encouragement to the graduating class. He talked about the benefits of attending WCMS, the important relationships formed, and how individuals become "united" from across the country.

Western CUNA Management School is operated with the cooperation and assistance of the credit union leagues and associations serving Alaska, Arizona, California, Colorado, Hawaii, Idaho, Nevada, New Mexico, Montana, Oregon, Utah, Washington and Wyoming.

Firm wrote nearly 50 of new CU CDFI grants approved

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WASHINGTON (8/8/12)--CU Strategic Planning, a firm that specializes in credit union grant writing, wrote nearly 50% of the award-winning credit union Community Development Financial Institution applications funded this year by the U.S. Department of the Treasury.

The award-winning applications were submitted on behalf of 10 credit unions in eight states, including two receiving Native-designation funding.

The Treasury's CDFI Fund announced Monday that it awarded a total of $186.8 million to 210 organizations serving low-income communities, including credit unions or credit union organizations, as it closed its fiscal year 2012 grants and awards program (News Now Aug. 7).

As recently as 2009, the first year that CU Strategic Planning submitted an application, only two credit unions won the grants. One was submitted by CU Strategic Planning. Today, 22 credit unions were awarded funds today, with 10 award-winning applications written by CU Strategic Planning.

The awards range in size from $99,999 to $1.2 million. Credit unions that received assistance from CU Strategic Planning in the grant writing process include:

  • Bridgeway FCU, Poughkeepsie, N.Y.;
  • Caddo Parish Teacher's FCU, Shreveport, La.;
  • Coshocton (Ohio) FCU;
  • JetStream FCU, Miami Lakes, Fla.;
  • Kingsville (Texas) FCU;        
  • Molokai Community FCI, Kaunakakai, Hawaii;
  • Natco CU, Richmond, Ind.;
  • Prince Kuhio FCU, Honolulu;
  • Shreveport (La.) FCU; and
  • Thurston Union of Low Income People, Olympia, Wash.
The Treasury established the CDFI Fund in 1994 to provide credit, capital and financial services to underserved populations. With the announcements of the latest awards, the CDFI Fund has awarded  $1.7 billion through the CDFI Program.

Mergers in Wisconsin Utah reported

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MADISON, Wis. (8/8/12)--Separate mergers in Wisconsin and the Western U.S. have been reported.

The merger of Truax CU, Madison, Wis., into Heritage CU, also in Madison, Wis., was effective July 31 (The Wisconsin State Journal August 6). The combined credit union has $225 million in assets and 26,500 members with nine branches in Wisconsin and Illinois.

Truax CU, with $5 million assets, was founded in 1956 and had one branch. Heritage CU, was founded in 1934 to serve employees of Oscar Mayer & Co.

In the Western U.S., Pocahy Family CU, Pocatello, Idaho, will merge into $2.9 billion Mountain America CU, West Jordan, Utah (McClatchy-Tribune Regional News August 6).

The merger is expected to take effect April 1, 2013.

Members of $15 million Pocahy Family CU approved the merger.

DVD box sets available for season five of BizKid

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MADISON, Wis. (8/8/12)--Box sets of the latest season of Biz Kid$ are available from the National Credit Union Foundation (NCUF).

Click to view larger image Click for larger view
Biz Kid$ is the Emmy Award-winning and credit union-funded public television series that teaches kids about money management and entrepreneurship.

Earlier this year, NCUF made available the first four seasons of Biz Kid$ as DVD box sets. Each Biz Kid$ box set includes DVDs for each episode and a compact disk containing PDFs of the corresponding curriculum for each episode.  NCUF also released Biz Kid$ starter kits to supporters late last year, which contains core DVDs and materials to teach Biz Kid$. 

Each box set or starter kit is available for a donation of $60 to the NCUF. Credit unions, leagues and foundations can use the box sets or starter kits to teach Biz Kid$ in their communities and to:

  • Donate to teachers/libraries/resource centers in each school of the districts in which they serve;
  • Give to after-school programs, summer camps, Boys & Girls Clubs, children's hospitals, daycare facilities, and similar organizations; and
  • Use to show Biz Kid$ in credit union branch lobbies.
NCUF oversees fundraising, outreach and administrative responsibilities of Biz Kid$.

During the past six years, more than 290 credit unions and affiliated organizations raised roughly $13.2 million to support the show's production, website and curriculum. Every Biz Kid$ episode begins and ends with a narrator reminding viewers that: "Production funding for Biz Kid$ is provided by America's Credit Unions, where people are worth more than money."

ABCUL British CUs now serve one million members

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MANCHESTER, Eng. (8/8/12)--The credit union sector in Great Britain has passed a milestone in membership: it now serves more than one million members and junior savers, said the Association for British Credit Unions Ltd. (ABCUL).

Credit unions serve 887,000 adult members and 121,000 junior savers, according to figures released this week by the Financial Services Authority (ENP Newswire Aug. 6).

Mark Lyonette, ABCUL chief executive, noted that at the turn of the century Britain's credit union served 325,000 adult members. "To almost triple this and reach 887,000 with 121,000 juniors in such a short time is testament to the hard work and dedication of many credit union staff and volunteers who work every day to realize our collective vision for the sector," Lyonette said.

In the past decade membership more than doubled and assets more than tripled in value.  The milestone arrived just after credit unions in January saw long-awaited legislative reforms come into focus that have opened up opportunities for expansion and the Department for Work & Pensions announced an US$59.3 million expansion program for the credit union sector.

Many credit unions plan to use their new powers to serve new groups and offer new products and services, said ABCUL, which also noted that the government is backing the sector to expand and strengthen it further so it can add another million members "in only five to seven years."

CU System briefs (08/07/2012)

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  • BEAVERTON, Ore. (8/8/12)--A pair of college students who joked about robbing banks to pay their bills were sentenced Monday to five years' probation after allegedly holding up two  branches of Beaverton, Ore.-based Rivermark Community CU in 2010.  A U.S. District Court judge also ordered Brittney Anne Sykes Caudle, 24, and Emma Caday Westhusing, 21, to complete 200 hours each of community service and remain in therapy. They also must pay back $2,750 to the credit union (Oregonlive.com Aug. 6).  The unarmed robbery suspects handed notes demanding money to tellers at the credit union's Gresham branch on Oct. 18, 2010, and its  Clackamas branch Dec. 6, 2010.  They were caught when a teller tripped a silent alarm and inserted a tracking device into the loot.  The two women pleaded guilty--Sykes Caudle to one count of bank robbery and Westhusing to two counts of bank robbery.  Judge Garr M. King said the two have taken steps to rehabilitate, have jobs, are enrolled in college classes again, and are receiving help for serious mental and emotional problems from past abusive relationships and that prison would interrupt that rehabilitation …
  • RALEIGH, N.C. (8/8/12)--Members of Raleigh, N.C.-based State Employees' CU (SECU) have donated, through the SECU Foundation, $140,000 for a new 28-foot insulated vehicle to the North Carolina Symphony. The symphony's new travel unit will transport the orchestra's instruments in a temperature- and humidity-controlled environment. The symphony performs about 175 concerts a season and travels more than 12,000 miles annually to reach nearly 250,000 state residents. Its musical education program, one of the largest offered by a U.S. orchestra, according to SECU, serves North Carolina's elementary, middle and high school students through full-orchestra education concerns and outreach initiatives . The symphony performs 40 education concerts each year for more than 55,000 elementary school students …
  • ROUND LAKE, Ill. (8/8/12)--
    Click to view larger image Click for larger view
    Consumer CU (CCU), Waukegan, Ill., recently hosted a delegation from OSCUS CU in Ecuador as part of an international knowledge sharing initiative organized by the World Council of Credit Unions (WOCCU). Sean M. Rathjen, CCU president, led the meeting while WOCCU's Joshua Fetting, international partnerships officer, served as translator.  Topics discussed included information technology, communications, financial analysis and lending. CCU presented details on the tools it uses to process member transactions, the importance of adding new specialized products and services, and how to segment membership to serve members' individual needs. The day-long session also included discussions about branding, Web-based marketing and the impact of social media on the credit union's growth.  Pictured are, from left, front row: Juan Carlos Basantez Gaona,vice president of national business; Santiago Martin Ortiz Nunez, chief financial officer; Rosa Marlene Marino Lescano, branch manager; and Carolos Alonso Santamaria Sanchez, chief technology officer. Back row, from left: CCU employees Larry Paull, director of information systems; Rathjen; John Pawlowski, vice president of finance & investments; and Maria Contreras, corporate development and marketing coordinator; and WOCCU's Fetting.  (Photo provided by Consumer CU) …

Community involvement gets equal billing in marketing

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MEDFORD, Ore. (8/7/12)--Rogue FCU, based in Medford, Ore., has mastered a marketing strategy of community event ownership and low-cost media coverage to the point that it has radio stations vying competitively for coverage rights to its community events, according to the Northwest Credit Union Association (NWCUA).

The secret? The event--not the promotion--is the major focus, the credit union told NWCUA (Anthem Aug. 2). The credit union is still setting membership growth records nine months after Bank Transfer Day.

For example, it is gearing up for its "Cash or Gas" day, where consumers get gas for 50 cents per gallon below the listed price. Thirteen radio stations want coverage rights.  It is so popular that Rogue's executive vice president rolls up his sleeves to direct traffic until police arrive to assist.

Although its website touts its programs--investment planning, online banking, competitive loan rates, youth accounts and other products--equal billing goes to Rogue FCU's community involvement, with more than 20 high profile events such as "Medford Movies in the Park," "a Pear Blossom Festival," cruise events that attract automobile enthusiasts and youth baseball.

"There's no 'one thing.' It's just 'everything,'" Rogue President/CEO Gene Pelham told NWCUA when asked about resources the $542 million asset credit union commits to events. While some events tie to credit union promotions, such as a special vehicle purchase program during the Medford Cruise, the event, not the promotion, is the major focus. "And you can't just put your name on an event," Pelham said. "You really have to do it."

Its "Living Local" branding resonates because much of its community involvement is not a disguised marketing of the credit union.  Giving the community a positive event or activity without marketing hype helps to build trust, he said.

The same approach is used for its "Local Money Matters" radio show, which airs live on  Tuesday mornings and repeats on Thursday and Saturday nights. The broadcasts are videotaped and archived on its website. Rogue Federal broadcasts from high-traffic spots, such as branch parking lots and lobbies. It maintains control of the content but doesn't turn the broadcast into the "Rogue Federal hour." It focuses on creating content consumers can learn from, with experts featured.

The program's quality is appreciated by broadcasters with lean staffing and has earned consumers' trust, the credit union told NWCUA. As a result, when it suggests stories about initiatives such as raising credit unions' member business lending cap, the local media listen.

The credit union also partners with for-profit businesses to raise funds for community causes. Commercial inventory in the radio program is traded with for-profit partners for contributions. Rogue also charges auto and boat dealerships for display rights in lobbies and parking lots. The earnings go to local nonprofits through high-visibility check presentations. The businesses see the value; they keep participating month after month, the credit union said.

VSECU op-ed Banks pushing regulators bank action

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MONTPELIER, Vt. (8.7/12)--Vermont State Employees CU (VSECU) has fired the latest round in its battle with the state regulator over using the words "banking" and "[to] bank" for its marketing efforts--this time in an op-ed piece written by VSECU CEO Steven D. Post in the Vermont Digger (Aug. 5).

VSECU was issued a notice of intent to serve a cease-and-desist order by the Vermont Department of Financial Regulation (DFR) over the words, which the regulator said would confuse consumers, who might not understand they are banking at a credit union rather than a bank.

In the op-ed, entitled, "Post: Banking on common sense," Post wrote that the credit union "believes Vermonters are smarter than this" and that to believe Vermonters would be confused "is almost laughable, when indeed, the DFR itself regulates both Vermont credit unions and banks through its own office named the 'Banking Division.'

The Vermont Bankers Association (VBA) has "pressured DFR to take this action and has solicited support from at least seven banks in a letter-writing campaign to the governor, requesting that the administration support the action of the commissioner," Post wrote.

He challenged the DFR to demonstrate that the action "is consumer-focused rather than a reaction to the Vermont bankers." He noted the potential cost to Vermont taxpayers, "who could be left paying VSECU's legal expenses if DFR's position is deemed unconstitutional by the court."

"Banks and credit unions both bring value to individuals and communities. Both offer banking services such as deposits, saving, credit, mortgages, banking online, and much more. Our business model is fundamentally different and the VBA and the DFR know it," Post wrote.

The op-ed also discussed that comments attributed to the DFR commissioner that if VSECU uses the banking words, it should be labeled a bank, treated as a bank and taxed as a bank, which Post said is "a way of trying to back door the taxation issue, and it raises concern about the real motivation behind banker complaints. Is this about protecting banks and taxing non-profit cooperatives?"

Noting that the issue is "about being honest, open and clear about who we are and what we do," Post said the credit union has "never called ourselves a bank in any of our advertising. …I don't believe anybody could see, hear or read a VSECU advertisement and be confused about whether we are a bank or a credit union," Post said. "VSECU is proud to be a credit union."

To read the full opinion-editorial, use the link.

Co-op cyclers in Wisconsin endorse MBL bill

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MADISON, Wis. (8/7/12)--The Co-cycle Project, a student-led, bike-powered tour linking cooperatives across the U.S., stopped at the Credit Union National Association (CUNA) in Madison, Wis., Monday afternoon to present a certificate endorsing member business lending (MBL) legislation.

Click to view larger image Charlotte Cadieux, second from left, who graduated from Hampshire College in Amherst, Mass., this spring, read a proclamation Monday at the Credit Union National Association headquarters in Madison, Wis., from the U.S Federation of Worker Cooperatives, endorsing SB 2231 and HR 1418 to increase credit unions' ability to provide member business loans (MBLs) to small businesses. Cadieux is one of the 20 or so college student bikers from the Co-cycle Project, conducted in honor of the 2012 United Nations International Year of Cooperatives.
The coast-to-coast tour promoting U.S. cooperatives--which are celebrating 2012 as the United Nations International Year of Cooperatives--has received strong support from credit unions and is seeking more credit union assistance as it moves from the West Coast to the East Coast.

The tour was organized by students of Hampshire College, which is one of the membership groups served by UMass College Five FCU, Amherst, Mass. Among the groups making donations to the tour was the Massachusetts Credit Union League (News Now June 11).

With bikes in tow, the students from Massachusetts were formally greeted by Dane County (Wis.) Executive Joe Parisi; Madison, Wis., Mayor Paul Soglin, CUNA and CUNA Mutual Group. Local Madison co-ops were at the event. 

One of the 20 or so college student bikers, Charlotte Cadieux, who just graduated from Hampshire College, with a degree in climate change education, read a proclamation from the U.S Federation of Worker Cooperatives, authored by Executive Director Melissa Hoover. The proclamation, endorsed SB 2231 and HR 1418, which aim to increase credit unions' ability to provide MBLs to small businesses.

Jill Tomalin, CUNA senior vice president of association services, accepted the written proclamation from Cadieux.

Soglin and Parisi each welcomed the bikers to Madison, saying the local area is a great supporter of bicycling and cooperatives.  

The bikers had traveled from nearby Devils Lake State Park in Baraboo, Wis., to Madison, and arrived in the mid-afternoon. The group will stay in Madison until Thursday, and visit cooperatives in the Madison area.

The tour started June 2 in San Francisco. UMass Five FCU will host Co-Cycle's final stop in Amherst, Mass., on Sept. 3.

Click to view larger image Madison, Wis., Mayor Paul Soglin Monday welcomed the Co-cycle Project--a college-student-led, bike-powered tour linking co-operatives across the U.S.--to the Credit Union National Association's Madison office, saying the local area is a great supporter of bicycling and cooperatives. (Photos provided by CUNA)
The journey consists of regional legs, with each leg divided by events in key locations along the route. Events are hosted by different communities and some have included educational workshops or public showcases of cooperatives.

Earlier this summer, another bicycle tour on the East Coast also celebrated the International Year of Cooperatives. The Cabot 2012 East Coast Community Tour was a 2,300-mile bicycle trek along the East Coast Greenway. That tour started in Miami on May 12 and ended on July 7 in Portland, Maine. Cabot Creamery Cooperative is one of the sponsors of the Credit Union National Association's weekly Home & Family Finance Radio Show.

CUNA and credit unions are urging 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 business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

Sunrise-Fox Communities merger completed

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APPLETON, and GREEN BAY, Wis. (8/7/12)--The merger of Sunrise CU of Green Bay, Wis., and Appleton, Wis.-based Fox Communities CU became official last Wednesday, said the credit unions.

The National Credit Union Administration had approved the merger in May. Fox Communities CU is the surviving credit union.

Sunrise, with $18 million in assets was chartered in April 1951 to serve employees of the Wisconsin Telephone Co. It merged in 2009 with the Fire Department CU, Unity CU and Moore Employees CU, and changed its name to Sunrise CU. It has more than 3,600 members (The Post-Crescent Aug. 3).

The $803 million asset Fox Communities CU serves more than 66,000 members.

N.J. has pent-up demand for biz loans says article

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HIGHTSTOWN, N.J. (8/7/12)--Both credit unions and banks in New Jersey are seeing pent-up demand from businesses wanting to grow and needing business loans to do so, according to NJBiz.com (Aug. 6).

Financial institutions in the state said they are competing to lend money to businesses that weathered the economic slump and can leverage low interest rates to finance new equipment, buy facilities and hire more workers, said the article, which noted a "pent-up demand by businesses to seize opportunities to grow."

In the article, one bank said its commercial lending has increased the first six months of the year because businesses had held back so long on buying equipment, building or inventory that once they saw more positive economic signs with their businesses starting to grow, they began investing in their business by borrowing.

New Jersey Credit Union League President Paul Gentile told the publication that in the state, the average size of a credit union business loan is $171,000, and "a lot of banks don't want to touch loans that small…It's important to have credit unions making those smaller business loans and filling that niche."

The article also noted the movement advocating legislation to enable credit unions to provide more member business loans (MBL).

The Credit Union National Association, credit unions, and state leagues and associations are advocating passage of a bill in Congress to enable credit unions to provide more MBLs to fulfill the gap in credit opportunities.  They seek to raise the MBL cap to 27.5% of assets, from the current 12.25% so they can offer more loans. Raising the cap would generate roughly $13 billion in new small business loans into the economy, helping creating 140,000 new jobs--just the first year. And that would be at no cost to the taxpayer.

The article also reported comments from management at three credit unions.

Marc Sovelove, senior vice president of Financial Resources FCU, Bridgewater, said his credit union expects to hit the cap within 18 months. 

Alan Feigenbaum, president of Advanced Financial FCU, New Providence, said his credit union is already at its cap and can't market its business loans.  If it weren't for the cap, the credit union would "certainly add at least another $2 million in commercial loans, maybe more, and fairly quickly," he added.

Bob Birkhahn, senior vice president of commercial lending at Affinity FCU, Basking Ridge, noted that businesses need capital, and while some are slow to expand, they need funds to run their day-to-day operations.

For the full article, use the link.

CU System briefs (08/06/2012)

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  • MERIDEN, Conn. (8/7/12)--The Board of Trustees of the Connecticut Credit Union Foundation voted unanimously to support the development of Fisher House Connecticut, which will provide a home away from home for military families whose service members receive medical care. The national Fisher House Foundation donates such houses to the federal government, which manages the facilities at no charge to military families. The foundation will donate $1,000 toward a fundraising dinner on Sept. 21 at the Aqua Turf Club in Plantsville, Conn. The house will be located on the campus of the Veterans Administration Medical Center in West Haven, Conn.  The foundation also will match the $50 purchase of a fundraising brick by any affiliated credit union in the state with the purchase of an additional brick on behalf of the credit union. In addition, the foundation will work with credit unions to offer brick purchases their members to support and honor those who serve or have served the country …
  • HARRISBURG, Pa. (8/7/12)--Rich Lenio, retired CEO of Frick Tri-County FCU, Uniontown, Pa., died Friday morning at the age of 75, according to the Pennsylvania Credit Union Association (PCUA).  Lenio served as PCUA board director from 1998 to 2001. He was the 2002 recipient of the Keystone Award, the association's highest award, which honored him for his service to the St. Vincent de Paul Society.  Lenio also was awarded the 1995 William W. Pratt Professional of the Year.  Funeral services were Tuesday. His wife, Maryann, preceded him in death in 2009. He is survived by six children. (Life is a Highway Aug. 6) …
  • FEDERAL WAY, Wash. (8/7/12)--Steve Albers, president and founder of Tacoma, Wash.-based Albers & Co., and a longtime credit union supporter, died Friday night after being injured in a bike accident.  He was 60.  Albers founded the company in 1985 and was a long-time credit union collaborator and a frequent tradeshow exhibitor at the Northwest Credit Union Association (NWCUA) Convention and Annual Business Meeting, said NWCUA (Anthem July 31) …

Former CUNA Mutual vp dies in swimming accident

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MIDDLETON, Wis. (8/7/12)--Charles "Chuck" Conklin, 74, a former vice president with CUNA Mutual Group, died Thursday in Bayfield, Wis., in a diving accident in Lake Superior.

Conklin retired as vice president of Market Promotion Services and Policyowner Relations for CUNA Mutual in March 1996.  He served the company for nearly 29 years.

Visitation will be at 1 p.m. Wednesday at Cress Funeral Home, 3610 Speedway Road, Madison, Wis., with a memorial service following at 2 p.m.

In lieu of flowers, memorials may be made in his name to the American Heart Association or the Dane County Humane Society.

He is survived by his wife, Jane (Ungrodt) Conklin; three daughters, Kathleen Marie Conklin, Patrice Alexandra Conklin and Julia Beth Prohaska (David); six granddaughters; and two sisters.

PCUA Card Services Lowest delinquency rates in years

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HARRISBURG, Pa. (8/7/12)--The Pennsylvania Credit Union Association's (PCUA) Card Services reports that in the first six months of 2012, credit card delinquencies are at their lowest level since 2007 (Life is a Highway Aug. 6).

Of 167,717 credit card accounts from credit unions on the Card Services credit card program, as of June 30:

  • 1.57% of credit card accounts are delinquent 30 days or more;
  • 2.3% of outstanding credit card loans are delinquent 30 days or more; and
  • Both percentages are at their lowest since 2007.
Credit unions on the program have charged off 607 accounts year-to-date, with an average account balance of $3,820. Total charged-off dollars year-to-date is $2,319,396.

Overall, credit card outstanding loans are down by 4.5%, compared with the same time last year. Also, 38% of total credit limits are used, which is slightly up from the same period in 2011, PCUA said.

"It is a great sign to see delinquency at a five-year low on our credit card program," said Sheba Wallish, manager, PCUA Card Services. "Credit unions are making sound lending decisions, and consumers are being responsible with the credit they have available to them."

Illinois small-CU conference kicks off today

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NAPERVILLE, Ill. (8/7/12)--Nearly 90 people representing 48 credit unions are expected for the Illinois Credit Union League's (ICUL) annual Small Asset Size (SAS) Conference for credit unions under $25 million.

The conference will finish out with an open forum and networking lunch, facilitated by Joni Senkpeil, ICUL director of small credit union development.

"We strive to be a focal point to help our small credit unions succeed and it seems this conference helps to address their concerns and needs year after year," said Dan Plauda, ICUL president/CEO.

This year's event is sponsored by ICUL, the Illinois Credit Union Foundation and CUNA Mutual Group.

CU System briefs (08/03/2012)

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  • BENSENVILLE, Ill. (8/6/12)--An Illinois woman was  indicted Tuesday in a $200,000 theft from her former employer, the Bensenville (Ill.) Community CU. Desiree Cortes, 31, of Bensenville, is charged with five counts of misappropriation of financial institution property and one count each of theft and continuing a financial crimes enterprise (Chicago Daily Herald Aug. 2). Cortes is accused of secretly opening five unauthorized credit card accounts at the credit union, where she worked in mortgages, and accumulating $194,000 in debt from May 2008 and December. She allegedly concealed the thefts by manipulating the credit union's computer system. Her arraignment is scheduled for today …
  • WILMINGTON, Del. (8/6/12)--Theodore Gray, 55, was arrested July 26 in connection with a July 25 robbery at the Wilmington, Del., branch of Dover-based Del-One FCU. He was charged with second-degree robbery. The incident occurred at about 11:20 a.m. when a man walked up to a teller with a note demanding money, was handed $100, and fled the credit union (The News Journal July 26). No one was physically injured in the robbery, according to the Delaware Credit Union League (Together July 31) …
  • BABYLON, N.Y. (8/6/12)--Bryan Fuge, 30, of Yaphank, N.Y., was arrested and charged by Suffolk County Police with robbing the West Babylon branch of Medford, N.Y.-based Suffolk FCU on June 22. Fuge is charged with third degree robbery. He is accused of entering the credit union, handing a teller a note demanding money, and fleeing the building with the money (Associated Press via The Wall Street Journal Aug. 3) …

Mass. CU reserve fund among 31 bills sent to governor

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BOSTON (8/6/12)--Among the 31 bills sent to Massachusetts Gov. Deval Patrick last Monday and Tuesday was H 2073, a bill establishing a reserve fund for credit unions.

The state bill, sponsored by Rep. James M. Murphy (D-Weymouth), was filed by the Massachusetts Credit Union Share Insurance Corp. (MSIC), which has provided excess insurance to some state and federally chartered credit unions in the state since 1961.  H 2073 would allow MSIC to form a voluntary liquidity fund for its member credit unions.

The fine-tuning bill states the corporation "may establish a separate and distinct fund to be known as the Reserve Fund for the purpose of promoting liquidity and elasticity and flexibility of the resources of its members. The Reserve Fund shall be funded with term and regular deposits voluntarily made by regular members and excess members. No member shall have on deposit more than 10% of its assets in the Reserve Fund." 

Once the fund attains a $30 million total asset basis, deposits of any one member shall not exceed 10% of all deposits in the fund. No member may borrow from the fund in excess of 10% of its assets unless the loan is secured by the directors of the corporation.

MSIC used to be the primary deposit insurance for state-chartered credit unions but has carved a niche in excess coverage, according to the Massachusetts Credit Union League.

According to MSIC's website, it insures excess shares and deposits above the federal insurance limit of $250,000 at its member credit unions.

The governor has until Friday to sign, veto or seek amendments to the bills sent to his office last Tuesday, which was the final day for formal legislative sessions in 2012, according to the Boston Herald (Aug. 1).  The state House and Senate will meet twice a week for the rest of the year in informal sessions where bills need unanimous support to advance.

Study Deposits at large CUs outpacing banks

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CHARLOTTESVILLE, Va. (8/6/12)--Consumers were moving money out of banks and into credit unions long before Occupy Wall Street protests and Bank Transfer Day, according to a study by financial research firm SNL Financial.

The SNL report indicates deposits at banks and credit unions from year-end 2006 remained steady until about the beginning of 2009, when credit union deposit levels increased from 2006 levels.

Big banks have made few adjustments to stop the exodus of customers, said an article in the Huffington Post Thursday. However, the article also noted that small and mid-size banks are closing their doors as they struggle with low interest rates, weak loan demand, and compliance costs for regulations.

The Huffington Post article highlighted East Windsor, N.J.-based McGraw Hill FCU's latest video campaign asking potential members to make video testimonials about leaving big banks, in a program called "We Hear You."

Credit union advertising after 2008 and before the fall of 2011 may have positioned credit unions to gain members as individuals searched for an alternative to banks, Adam Denbo, a credit union consultant and managing partner at Samaha & Associates, told SNL. The U.S. has shifted from a net-spending country to a net-savings country, resulting in more deposits and all financial institutions, Denbo said.

But there has been a growing dissatisfaction with banks and thrifts in general and steady faith in the nonprofits, Mike Schenk, Credit Union National Association vice president of economics and statistics, told SNL via e-mail. During the financial crisis and credit crunch, deposit rates at credit unions remained consumer-friendly.

Credit unions opened up their lead in deposits when banks such as Washington Mutual and Wachovia ran into trouble during financial crisis, said SNL.

BECU, Tukwila, Wash., saw an increase in deposits in the fall of 2008 through the end of the year after Seattle-based Washington Mutual Inc. failed and its banking operations were purchased by JPMorgan, said Tom Berquist, senior vice president of member strategies, told SNL. BECU grew deposits 9.44% between 2007 and 2008, from $7.2 billion to $7.88 billion, according to SNL. Since 2006, deposits have grown 54.80% at the credit union.

Bank of America Corp.'s attempt to charge a $5 monthly debit card fee also contributed to BECU's deposit surge, Berquist told SNL. BofA has the largest market share in the state. BECU conducted no marketing campaigns about BofA's fee or the National Bank Transfer Day movement, but membership still spiked to 16,000 that month, up from an average between 6,000 and 7,000 a month.

State Employees' CU, Raleigh, N.C., spokeswoman Leigh Brady attributed its growth to a flight to safety from Wall Street banks. The credit union is also accessible: It has branches in every county of the state. Deposits grew 11.27% from 2007 to 2008 and 19.34% between 2008 and 2009. Since 2006, deposits increased 78.20%.

In spring 2011, SECU's frontline staff began informing members about additional services and encouraged them to switch checking accounts to SECU. The campaign helped grow checking accounts for the year.

SECU has lowered its deposit rate for several years because lending remained tight. Deposits continue to grow, although more slowly, Brady said. SECU tries to lend 85% of deposits, but is currently lending 60% and invests the rest in U.S. Treasuries, Brady told SNL. To offset the lost margin, the credit union emphasizes its noninterest products and services, and capitalizes on its being the primary financial provider for 70% of its members.

To read the SNL report and the Huffington Post article use the links.

Kids draw what cooperation looks like

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FARMERS BRANCH, Texas (8/6/12)--By providing a forum for children to express their artistic talent through drawing, SICREDI, one of Brazil's credit union organizations and the Texas Credit Union League's (TCUL) "People to People" partner, has come up with a way to celebrate the International Year of the Cooperatives this year.

SICREDI created a website (use the link) and is encouraging children to draw an image depicting cooperation and then to upload that image to the website, said the league (LoneStar Leaguer Aug. 3).

Several drawings already have been posted, and visitors can view the images by clicking on the "Desenhos" tab on the website. SICREDI is inviting children worldwide to participate.

TCUL and SICREDI in 2010--through the World Council of Credit Unions--signed a "People to People" partnership, opening the door for the exchanges of ideas and best practices between the two organizations.

Twelve representatives from SICREDI are expected to attend TCUL's Marketing & Business Development Conference Sept. 4-6 and the Leadership Conference & Expo Sept. 6-8. Both conferences will be held in San Antonio.

The 12 SICREDI executives will "shadow" credit union employees after the conferences. The 12 will split into three groups, and each group will spend one week with one credit union and another week with a second credit union. TCUL will identify credit unions to host the group.

Two Oregon CUs finalize merger

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PORTLAND and SPRINGFIELD, Ore. (8/6/12)--UFCW Northwest CU in Portland, Ore., has merged into the bigger Northwest Community CU, based in Springfield, Ore., to provide UFCW members with more financial resources, Northwest Community said Wednesday.

The $24 million asset UFCW's lone branch in Portland started operating Wednesday as one of $689 million asset Northwest Community's branches (Portland  Business Journal  and OregeonLive.com Aug. 3).

Northwest Community has 16 branches in 12 Oregon cities. 

At the time of the merger, UFCW served 3,500 members, and Northwest Community had 73,000 members. 

Northwest Community will offer UFCW members additional services such as auto loans on location at participating dealerships, a full-service mortgage department with first-time buyers' programs, and a wider range of deposit accounts, the Journal said.

Personal business bankruptcy filings continue decline

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MADISON, Wis. (8/6/12)--Filings for business and personal bankruptcies continued their year-over-year decline in the second quarter, according to information from U.S Bankruptcy Courts. Credit unions' experiences--regarding loan delinquencies and capital ratios--support this trend, per data from the Credit Union National Association (CUNA).

Overall bankruptcy filings for the 12 months ended June 30 totaled about 1.31 million petitions, which is 14% less than the roughly 1.53 million in the 12 months ended June 2011.

The majority of bankruptcy filings involve predominantly non-business debts. For the 12-month period ending June 30, non-business filings--where the debts are predominantly personal or consumer in nature--totaled about 1.27 million, down 14% from the roughly 1.47 million nonbusiness bankruptcies filed in the 12-month period ending June 30, 2011.

Personal bankruptcies decreased 14.2% from second quarter 2011. Business filings went down 15.7%.  For more information, use the link.

At credit unions, the loan delinquency rate as a percentage of total loans in June (the most recent month for which data are available) declined to 1.32% from a high of 1.60% in December, and a 1.58% level in June 2011, according to CUNA's June 2012 Monthly Credit Union Estimates (MCUE).

Credit unions' capital ratio has remained between 10% and 10.4% during the past year, and was 10.1% in June, the MCUE indicated.

To see the most recent credit union data in CUNA's June MCUE, use the link.

Dismissal of ATM disclosure suit provides lessons

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NEW YORK (8/6/12)--A federal court's dismissal in New York of a cookie-cutter ATM surcharge-disclosure lawsuit related to a credit union's ATM shows other credit unions how being prepared and in compliance helped the credit union win its case.

The class-action lawsuit was filed in the U.S. District Court for the Eastern District of New York, Brooklyn, by Brooklyn resident Yehudah Katz against Atlanta, Ga.-based Delta Community CU.

The credit union owns an ATM at La Guardia Airport in New York that Katz allegedly used on Feb. 15, according to court documents.  His complaint, filed March 9, alleged the ATM had no external notice of the fee and was in violation of the Electronic Funds Transfer (EFT) Act.  He was charged $2.50 after agreeing to the machine's on-screen ATM disclosure.

U.S. District Court Judge William F. Kuntz II dismissed the case on July 25 "with prejudice, and on its merits, as to the named plaintiff only and without costs as to either party as against the other." The ruling did not state his reasons for the dismissal.

The Credit Union National Association has urged credit unions to be prepared to prove their compliance with the EFT Act  in the wake of multi-lawsuits filed by a few individuals suing banks and credit unions in several states for not having external notices posted on their ATMs.  The ATMs typically have an on-screen notice of the surcharge fees and give consumers the option of not incurring the surcharge by backing out of the transaction.

The multiple law suits use a similar template for unrelated cases. For example, the complaint document in this case involved a male plaintiff but referred to both "himself" and  the "plaintiff, on behalf of herself."

In its response to the lawsuit, the credit union provided photos of the machine taken by Automated Teller Accessories Corp., doing business as ATA Services, which services the ATM for the credit union.  Their agreement provides for ATA to provide photos and proof of notices, logos and signage and to check for, and immediately report, missing stickers and vandalism.  "No such report was received by the credit union respecting the ATM in question," said court documents filed.

The credit union's response also pointed out that the plaintiff voluntarily "consented to the fee by accepting it in response to the on-screen notice of the fee and had the opportunity to cancel the transaction without incurring the fee but chose not to do so."  It cited the principles of waiver, ratification and estoppel on the grounds that the plaintiff voluntarily incurred the fee.

The nuisance lawsuits have prompted legislation in Congress that would ease burdensome ATM fee disclosure regulations that have created legal and financial issues for many credit unions. A bill that would require disclosures only on an ATM's screen is working its way through the Senate.

NIHFCU helps Va. Biomed research grow business

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ROCKVILLE, Md. (8/6/12)--The National Institutes of Health FCU (NIHFCU), Rockville, Md., recently helped finance a member business loan (MBL) for a biomedical researcher and member of the Virginia Biomedical Association.

The National Institutes of Health FCU, Rockville, Md., recently helped finance a member business loan for Tom Galati, the owner of a biomedical research firm. (Photo provided by National Institutes of Health FCU)
Tom Galati used the financing to expand the research laboratory he founded in 1999. Histo-Scientific Research Laboratories Inc. provides histology, pathology and archive services to biotechnology firms, medical device and pharmaceutical companies, contract research organizations, government interests and university researchers.

"We recognize that small businesses are critical to our local and national economies," said Juli Anne Callis, NIHFCU president/CEO. "We are actively supporting the goals and aspirations of dedicated biomedical professionals, like Tom Galati, with our solutions that can help provide outstanding service to this cutting edge community."

Galati has originated four loans with the $563 million asset NIHFCU--two commercial property refinances and two others to help him expand his company and finance new equipment purchases.   

"I am always looking for opportunities to diversify my services and showcase my ideas," said Galati. "Of all the lenders I contacted, it was NIHFCU that truly recognized my track record and earned my business. Until I spoke with NIHFCU, I felt like a supermodel that could not get a date."

The Credit Union National Association (CUNA) and credit unions have been urging the 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 business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

CU System briefs (08/02/2012)

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  • PORTLAND, Maine (8/3/12)--A Maine woman pleaded guilty to acting as a getaway car driver in four credit union and bank robberies in the state earlier this year.  Maria Mattson, 30, of Westbrook is charged with interference with commerce by robbery and conspiracy to commit bank robbery (Press-Herald Aug. 1). In January and February, she allegedly drove Paul Sans, 29, also of Westbrook, to robberies at Orono-based University CU's Portland branch;  Portland-based TruChoice CU;  Portland-based Evergreen CU's Windham branch; and Auburn Savings Bank, Lewiston. (Bangor Daily News Feb. 17). Sans pleaded not guilty earlier this week to four counts of bank robbery, interference with commerce by robbery and conspiracy to commit bank robbery.  A witness at the bank robbery noted the license plate of the getaway vehicle.  If convicted, Mattson faces up to 10 years in prison and a $125,000 fine; Sans faces up to 20 years in prison and a $200,000 fine …
  • GROTON, Conn. (8/3/12)--Charter Oak FCU unveiled a 30-foot-tall advertising wrap around a two-story elevator earlier this week at a mall in Waterford, Conn.  The Groton, Conn.-based, $703 million asset credit union said the wrap in Crystal Mall is part of its new branding campaign (GateHouse News Service via Norwich Bulletin Aug. 1). The wrap covered three sides of the elevator. It sports the company's orange tree with its website address, Facebook logo and mortgage logo …
  • RALEIGH, N.C. (8/3/12)--State Employees' CU (SECU) employees, through the SECU Foundation, are providing a 10-year, $2.5 million low-interest loan to assist in construction of a Program for All-inclusive Care for the Elderly (PACE ) facility in Pittsboro, N.C.  Under development by Piedmont Health Services Inc. (PHS), the facility will provide services for older adults who meet state eligibility criteria for nursing home-level care.  The 4.5-acre site will serve residents of Chatham, Lee and southern Orange counties. PHS and the Department of Family Medicine at University of the North Carolina School of Medicine will also collaborate to establish the first teaching PACE program in the state at the center, educating medical and allied health professionals in the PACE model.  The project aligns with SECU's new initiative to help support members in the 60+ age demographic through resources for various life stage issues. That demographic is projected to increase in North Carolina by more than 400,000 people per decade, reaching 2.14 million or about 18% of the state's total population by 2030 …

CUAD videos to highlight best CU stories

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BISMARCK, N.D. (8/3/12)--The Credit Union Association of the Dakotas (CUAD), which took to the road on a summer-long credit union awareness campaign across North and South Dakota, will film videos of consumers' best credit union stories next week in Sioux Falls, S.D.

CUAD staff will film the videos at the Sioux Empire Fair, Sioux Falls, to find the next "CU on the Road TV Star."  Fairgoers can stop by the campaign's booth anytime between Monday and Aug. 12 to tell their story in one minute or less, said the association.

Later, CUAD staff will upload the videos to the CU on the Road campaign's Facebook page, so visitors can vote for the best video. Voting begins Aug. 15 and will end Aug. 22.

The three videos with the most votes will each receive $250.  CUAD will choose one video from the final three as the "CU on the Road TV Star." The winner will shoot a television commercial featuring the credit union story, and the commercial will run as part of CUAD's continued campaign later this year.

Occupy group wins board seat at Vermont FCU

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BURLINGTON, Vt. (8/3/12)--A new board member of Burlington, Vt.-based Vermont FCU is a member of a group tied to an Occupy Vermont group.

Eric Davis of South Burlington, a member of a group called Vermont FCU Member's Assembly, was elected recently to a two-year term to the board, according to Vermont Public Radio (VPR News July 17).

Davis said that although he is extremely satisfied with his experience at the credit union, more opportunities exist to build the sense of shared ownership among members that can further differentiate the credit union cooperative from the traditional banking sector.

The members' assembly grew out of long-time Vermont FCU member Matt Cropp's work with the Occupy movement after he realized many people are unaware they have an ownership stake  in a credit union and that confusion exists on what it means to be a credit union member, he said. Cropp also ran for board seat at the credit union but was defeated in the election.

The VFCU Member's Assembly has 25 to 30 members, Cropp told local media, and is negotiating with the credit union to resolve issues generated by the group's use of the credit union's name in relation to the Occupy movement.

NJCUL launches BankingYouCanTrust.com

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HIGHTSTOWN, N.J. (8/3/12)--The New Jersey Credit Union League (NJCUL) has launched BankingYouCanTrust.com, a website to inform consumers about the benefits of credit unions, help them locate a credit union in their area and also showcase some of the industry-wide grassroots advocacy efforts that credit unions are pursuing.

"We wanted to create a site that was more in line with the brand we are using in our consumer awareness campaign. This site allows us to promote the benefits of credit unions and what we are working on from an advocacy perspective," said Paul Gentile, NJCUL president/CEO.

The search engine hosted on the site is that of aSmarterChoice.org. The site's content includes articles, videos and other information related to the benefits of credit unions, and items that draw attention to any grassroots advocacy efforts.

The site hopes to feature soon member testimonials that provide a portrait of how credit unions help members, small businesses and others.

The site was designed and developed by i7Media.

CUNA Mutual CUs aid farmers in drought

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MADISON, Wis. (8/3/12)--The U.S. is experiencing the worst drought in nearly a half-century. CUNA Mutual Group's crop insurance business is there to help, but will not know the extent of claims until after the harvest.

Click to view larger image Drought-stressed corn on the Western Tennessee/Kentucky border in late July. (Photo by Crane Station)
The U.S Department of Agriculture (USDA) Wednesday added 218 counties in 12 states across the Great Plains Midwest and South to its designation of natural disaster areas, with the widespread drought scorching cropland and pastures. That means nearly 1,600 counties--more than half the counties in the U.S.--in 32 states are eligible for government assistance for losses caused primarily by the drought  (Bloomberg.com Aug. 1).

"In 2009, CUNA  Mutual decided to diversify, and crop insurance is complementary to the credit union system," she explained. "The crop insurance industry--similar to credit unions--is based on relationships. It asks how do we help American farmers protect against natural disasters or weather-related events?" 

ProAg is a national writer of crop insurance in more than 40 states. While the drought is a significant event this year, ProAg's national presence will help CUNA Mutual offset weather-related losses in states that are affected, Piechowski said.

CUNA Mutual will not know until after harvest time what type of crop yields farmers got from their fields. Farmers have until about the middle of December to report claims, she added. So, the process likely will extend into 2013, and CUNA Mutual has no specific total numbers of claims and dollar amounts at this time.

Will this summer's drought bring more future crop insurance business to CUNA Mutual?

"It is not a saturated market," Piechowski said. "We do anticipate growth levels for years to come. In addition, we anticipate that current coverage levels will increase." As an example, a farmer might have bought a basic policy this year, but might increase coverage down the road because of the drought this year, she explained. 

One issue is that an increasing number of farmers with crop insurance may file insurance claims and give up on their crops. Farmers who have bolstered insurance coverage on their crops may be preparing to file claims and plow under their damaged crops without attempting to administer costly pesticides and weed killers to salvage an emaciated harvest, said Property Casualty360 (July 20).

An increasing use of federally supported crop insurance and a movement toward bigger policies and newer schemes that safeguard revenue now place farmers in a position in which they may be better off claiming a total loss, as opposed to trying to make the best of a diminished harvest. Such a trend could worsen a 50% spike in corn prices by reducing the supply further, Property Casualty360 said.

However, CUNA Mutual is aware of that issue and has safeguards in place, Piechowski said. "The crop insurance program has been developed by a private/public [government] partnership for over 30 years," she explained. "There is very specific language regarding fraud, waste and abuse. So farmers cannot abandon their crops and file insurance claims."

If there is fraud, waste and abuse, farmers can be prosecuted by the federal government, she added. "USDA and insurance companies have very sophisticated data-mining tools and whistleblower networks to manage those aspects of the program," Piechowsksi said.

Since CUNA Mutual got into crop insurance, its diversification strategy has paid off financially. In 2010, ProAg was responsible for 50% of CMG's operating-revenue growth, Piechowski said. Also, in 2010, CUNA Mutual was able to pay state credit union leagues $5 million more than in the past, she added.

At the individual credit union level, the credit union's role is to advise farmers through tough times such as a drought, Diane Jentz, business lending manager at the Platteville, Wis., office of Heartland CU, based in Madison, Wis., told News Now.

"So much is unknown out there," Jentz  said. "We're trying to assist members to make the best decisions--such as when to get out in the fields in their combines--and to work with insurance agents to make sure the members are aware of everything. Our involvement is more of awareness raising and consulting.

"We will be able to work with farmers in refinancing, but that won't be determined until the harvest comes in, crop insurance comes in, and then [we deal with] what's left," she added. "Until the combines are rolling and the crops get cut, we don't know."

CUNA Management School graduates 75

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MADISON, Wis. (8/3/12)--Seventy-five credit union professionals are the newest graduates of CUNA Management School, held last month at the University of Wisconsin in Madison, Wis., the Credit Union National Association (CUNA) announced.

CUNA Management School consists of a three-year course of study. Students receive academic training with real-world applications designed for credit union management personnel who aspire to achieve senior-level management and leadership positions in the credit union system.

About 4,900 men and women have graduated from the program since its inception in 1954. A graduation diploma is issued in conjunction with the University of Wisconsin Graduate School of Business and is recognized throughout the credit union movement as an honor and mark of accomplishment.

Of the 232 students attending this year's program, hosted at the University of Wisconsin-Madison, 87 were first-year students, 70 were second-year students and 75 were third-year students.

This year's graduates were from 22 states. Twenty-six students graduated with honors, and seven with high honors. Use the link to see the list of graduates.

High honors graduates are:

  • Christina Carter, Maine State CU, Augusta, Maine;
  • Eric Green, Peopleschoice CU, Saco, Maine;
  • Jeremiah Kossen, Lake Michigan CU, Grand Rapid, Mich.;
  • Cynthia Little, Mazuma (Mich.) CU;
  • Michelle McCourt, Bridgeway FCU, Poughkeepsie, N.Y.;
  • Christopher Phillips, Land of Lincoln CU, Decatur, Ill.; and
  • David Polet, CUNA Mutual Group, Madison, Wis.
The third-year graduating class presented $27,788 to the CMS Scholarship Fund during its graduation ceremony. The funds were raised during the three-year professional development program. The scholarship fund is earmarked to help smaller credit unions and individuals with limited financial resources become CUNA Management School attendees.

Vermont regulator sets hearing on banking CandD

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MONTPELIER, Vt. (8/3/12)--The Vermont Department of Financial Regulation (DFR) has set a prehearing conference to address the cease-and-desist order against the Vermont State Employees CU's (VSECU) use of "banking," "bank," and similar words in its marketing efforts.

The hearing will be at 9 a.m. ET on Aug. 22 at the DFR's offices, General Counsel

Clifford Peterson confirmed to News Now.  The hearing officer will be Robert Simpson, formerly of the state attorney's office in Chittenden County, he said.

VSECU CEO Steven Post told News Now that Simpson was selected by DFR Commissioner Steve Kimbell as an impartial official in the case.  The credit union's legal counsel is on vacation so the credit union's strategy hasn't been fully determined yet, he said.

The prehearing conference will address "housekeeping" chores such as determining the schedules for the later hearings addressing the cease-and-desist order, Peterson said. He added the conference is open to the public and will be on the third floor at the DFR's 89 Main St., Montpelier address.

The Association of Vermont Credit Unions (AVCU) will be present in support of the credit union, Joe Bergeron, AVCU president, told News Now in an e-mail.

VSECU was notified June 18 by DFR of the cease and desist order. It ordered the credit union to stop using "bank," "banking," "banking cooperative," and similar words in its materials.

New E-Scan highlights top 10 trends for CUs

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MADISON, Wis. (8/3/12)--The Credit Union National Assocation has released its 2012-2013 Credit Union Environmental Scan (E-Scan), a high-level view of the credit union competitive landscape that credit unions can use as strategic planning tool.

E-Scan covers trends in areas such as compliance, finance, lending and marketing.

Among the topics addressed in this year's E-Scan are 10 trends that will have implications for credit unions. They include:

1. Mobile banking. The top technology priority for credit union CEOs is mobile banking as credit unions seek to create a consistent member experience among channels.

2. Antibank sentiment. While Bank Transfer Day brought credit unions more members, it's time to solidify those relationships for the long term.

3. Consumer awareness. About 37% of consumers are "not at all" familiar with credit unions. This doesn't bode well for long-term credit union growth.

4. Earnings rebound. Modest growth and strong earnings will mean capital-to-asset ratios will increase from 10% today to about 11% by year-end 2013, approaching the record level of 11.5% set in 2006--the year before the onset of the recession.

5. Staffing. Layoffs, cutbacks, salary freezes and other belt-tightening measures have employee morale low following the recession. There could be consequences--lower productivity, less engagement, poor member service, loss of talent--without proper incentives and work-life balance.

6. Lending. After three years of essentially no loan growth, credit union loan balances should increase 4% in 2012 and 6% in 2013.

7. Governance. As the credit union business model evolves, so must its governance model. Innovative boards need a bolder approach to future challenges.

8. Membership growth. Currently, more than 21 million nonmembers younger than the age of 18 live in members' homes. Credit unions must attract Generations X and Y to ensure growth.

9. Technology. Using technology to achieve greater efficiencies was listed as another among credit union CEOs surveyed by Abound Resources.

10. Compliance. Credit unions have to anticipate regulatory changes from both state and federal agencies while placing a priority on member needs.

To access the E-Scan, use the link.

President celebrates 60 years at CU

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BISMARCK, N.D. (8/3/12)--Marvel Ebenhahn, president of Community CU, New Rockford, N.D., celebrated her 60th year with the credit union last month.

Marvel Ebenhahn, president of Community CU, New Rockford, N.D., began her career at the credit union in 1952. (Photo provided by Credit Union Association of the Dakotas.)
Ebenhahn's father was one of Community CU's original charter signers when the credit union was established in 1942 with a field of membership that included Farmer's Union Oil Co. members and patrons.

The credit union later changed to a community charter. 

She began her career in 1952 performing bookkeeping work for the credit union. Back then, the credit union paperwork "was in one four-drawer file cabinet--with a few empty drawers," Ebenhahn said. In 1952, the credit union had 18,000 in deposits and the focus was providing a place to save and borrow money for local farmers, she added.

Community CU is now a full service financial institution with 5,936 members, $407 million in assets and three locations.

The credit union experienced great growth when it established its own stand-alone building in 1965, Ebenhahn said.

When asked if she ever thinks about retiring, Ebenhahn said "retirement isn't for everyone." She enjoys taking time off and traveling, but doesn't want to do it all the time.

"As long as my head and body keep working, so will I," she said.

CU System briefs (08/01/2012)

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  • GREENVILLE, S.C. (8/2/12)--The "Credit Union Alert" text scam making its way across the country is in South Carolina. Carolina Foothills FCU, Spartanburg, S.C., told local media it was flooded with calls from members who received an alert on their cell phones saying their debit and credit cards had been deactivated (WSPA.com July 31). Recipients are told to call a number and provide their card information. The number has since been deactivated. Among those receiving the text was Melissa Weaver, daughter of Carolina Foothills CEO Richard Weaver. Although her father routinely tells her not to respond to email phishing, she told media she believed the alert. However, instead of calling back, she stopped by the credit union because she needed cash. The credit union reiterated that no financial institution would ask for account information in a text, e-mail, or phone call …
  • PEARL RIVER, N.Y. (8/2/12)--Pearl River, N.Y.-based Palisades FCU (PFCU) announced that its members have received more than $4 million in direct financial benefits in 2011, according to the "Benefits of Membership Report" from the Credit Union National Association. The benefits are equal to $370 per member or $452 per member household. The report compared the credit union's interest rates, loan rates and fees to those of other banks in the state and combines the statistics with PFCU's call report data to estimate the annual benefits …

CU delinquency rates fall in June ROA up in first half

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MADISON, Wis. (8/2/12)--Credit unions saw improvements in their delinquency rates and  return on assets (ROA) in June, according to a Credit Union National Association (CUNA) economist's  analysis  of  CUNA's Monthly Credit Union Estimates.

Click to view larger image Click for larger view
"Credit unions reported another significant drop in their loan delinquency rates in June as consumers repaired their balance sheets," Steve Rick, CUNA senior economist, told News Now about credit union asset quality.

"Delinquency rates [60-day-plus] fell to 1.32% in June from 1.38% in May. The delinquent-loan- to total-loan ratio stood at 1.6% in December. The significant drop in the ratio over the past six months was caused by the dollar amount of delinquent loans falling 16.5%, while total loans rose 1.4%," he said.

"We expect delinquency rates to fall below 1.2% by year end as the unemployment rate continues to fall," Rick added.

Credit union loans outstanding grew 0.4% in June, compared with 0.5% growth during May. Unsecured personal loans led loan growth with a 1.8% increase, followed by home equity loans (1.6%) and fixed-rate mortgages (1.4%). Used-auto loans rose 0.9%; new-auto loans, 0.8%; and credit card loans, 0.5%. Adjustable-rate mortgages decreased 0.7%. Credit union loans totaled $595.3 billion, compared with $577.8 billion in June 2011.

Click to view larger image Click for larger view
Credit union savings balances rose 0.8%, compared with a 0.2% gain in May. Share drafts led savings growth with a 3.7% increase, followed by individual retirement accounts and regular shares, which each rose 1%. Money market accounts grew 0.5%, and one-year certificates declined 0.5%. Credit union savings totaled $888.1 billion--or $58.3 billion more than the $829.8 billion in June 2011.

Credit unions' loan-to-savings ratio remained at 67%. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained constant at 10%.

The movement's overall capital-to-asset ratio is 10%. The total dollar amount of capital is $104 billion.

"For the first half of 2012, credit unions reported 74 basis points of return on assets, slightly above the 68 basis points reported for all of 2011," Rick said. "Most of the rise in earnings was due to falling loan loss provisions because of falling loan charge-offs and the aforementioned falling loan-delinquency rates. We expect earnings to reach 80 basis points of average assets for all of 2012 and 90 basis points next year."

CUs computer-checkup services mean cross-sales

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TAMPA, Fla. (8/2/12)--Tampa-based GTE FCU's "Techs on Tour" events are proving not only popular but also present an opportunity for the credit union to cross-sell its electronic services.

The Techs on Tour events help resolve members' problems with their computers, according to Deposit Growth Strategies (July 1). The events are once a month--on a Saturday--from noon until 4 p.m. and are held at different branches of the $1.9 billion asset credit union.

The goal of the service is to ensure that members' computers are adequately equipped to use the credit union's virtual services.

During the events, the credit union's "community engagers" are also present. They interact with members who are waiting for their computer checkup by answering questions and giving demonstrations showcasing the credit union's online channels and electronic services.

GTE FCU's Techs on Tour for May serviced 25 computers and its June event serviced 13, said the article.

PCUA board approves two fin lit projects

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HARRISBURG, Pa. (8/2/12)--The Pennsylvania Credit Union Association (PCUA) board of directors Monday approved two major financial literacy projects.

The board OK'd sponsorship of four financial literacy town meetings to be broadcast live statewide on the Pennsylvania Cable Network beginning this fall (Life is a Highway Aug. 1).

Also, the Pennsylvania Credit Union Foundation gave the go ahead for half of the funding for the financial literacy program.

Regarding another matter, the Pacul Services building, which was built 22 years ago to expand PCUA headquarters, has sustained substantial water damage.

To fix the damage, the PCUA board authorized repairs to the exterior and interior of the building. The repairs will be extensive and will require the relocation of groups of employees during the next several months, said PCUA.

Filene More MBLs needed to boost economy

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MADISON, Wis. (8/2/12)--Without an increase to the member business lending (MBL) cap, credit unions could be hindered in contributing to the next economic recovery, according to a new study from the Filene Research Institute.

The study, "Commercial Lending During the Crisis: Credit Unions vs. Banks," showed that commercial loan growth rates for banks turn negative in the periods immediately following the last two recessions, while credit union growth rates remain positive during both periods.

However, in December 2010, six quarters removed from the most recent recession, bank commercial loans were still contracting. Credit union commercial loan growth rates, while still robust, declined, suggesting that some credit unions may be reaching their MBL cap.

"If that is the case, it has implications for the ability of credit unions to contribute to economic recovery in future recessions, if the regulatory cap is to remain in place," the study said.

The study also suggests that credit unions boast delinquency and charge-off rates that compare favorably to those at commercial banks.

The report, authored by David Smith, an economist at Pepperdine University's Graziadio School of Business and Management, seeks to quantify the performance of credit union commercial lending at a time when credit unions seek to widen their access to the business lending market.

Credit union commercial loan growth has been steady during the 15 years examined in the report. It has been resilient during the past two recessions, suggesting that credit unions can buoy both lending growth and, as a consequence, overall business activity.

While banks tend to contract commercial lending during economic stress, the opposite is true for credit unions. Commercial loan growth rates for banks turned negative following the recessions beginning in 2001 and 2007, but credit union growth rates remained positive during both periods, the report said.

Results also suggest that credit unions may have better information regarding the underlying risk of commercial loans than banks. That may be related to the member relationship inherent in the credit union business model. Banks are more likely to take greater risks as a result of a governance structure that incentivizes risk-taking behavior.

The Credit Union National Association (CUNA) and credit unions have been urging the 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 business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

To download the report, use the link.

Alive CU to buy two Space Coast CU branches

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JACKSONVILLE, Fla. (8/2/12)--Alive CU, based in Jacksonville, Fla., has signed an agreement to purchase two Jacksonville branches of Space Coast CU, which is based in Melbourne.

The $112 million asset Alive CU's purchase is pending regulatory approval. The deal will increase Alive CU's number of total branches to 11 (Jacksonville Business Journal Aug. 1).

The $3.2 billion asset Space Coast CU operates about 24 branches, mostly in the coastal area of South Florida.  Last December it entered into an agreement with MidFlorida CU, Lakeland, which assumed six Space Coast's branches in Pinellas and Hillsborough Counties (News Now Dec. 13). At the time, Space Coast noted the credit union was evaluating how best to serve the Tampa area members.  In 2009, Space Coast acquired the ailing Eastern Financial Florida CU in Miramar.

Alive is the former Healthcare's Cooperative CU. Many of its branches are inside health care facilities. Its purchase is pending regulatory approval.

Britains CU shared business model gathers steam

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MANCHESTER, England (8/2/12)--A new shared business model project for British credit unions to help strengthen the credit union movement already has 60 credit unions signed up, said the Association of British Credit Unions Ltd. (ABCUL) Monday.

ABCUL is developing the project with Cornerstone Mutual Services and credit unions to increase collaboration in the sector (ENP Newswire July 31).

"The more than 60 credit unions that have signed up so far have shown great leadership in coming together to realize the sector's long-held vision for British credit union development," said ABCUL Chief Executive Mark Lyonette.

"This project is a great opportunity for credit unions in Britain to come together and develop the shared business model and services which could significantly grow our movement and bring the benefits of credit union membership to many more people across the country," he said. "Across the world, the most successful credit union movements have reaped the benefits of greater collaboration bringing about significant growth for their sectors."

ABCUL had asked credit unions for expressions of interest in the proposed project by July 31. It plans to build a team of credit union leaders to steer the development of the shared business model.

Top 10 INews NowI stories for July (08/01/2012)

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MADISON, Wis. (8/2/12)--An article about the potential cost of reduced credit card interchange rate fees--mandated as a result of an historic lawsuit settlement between merchants and credit card companies--was the most read News Now article in July.

The top ten articles in July included:

10. Credit reporting agencies to come under CFPB scrutiny

WASHINGTON (7/17/12)--The Consumer Financial Protection Bureau this fall will begin supervision and examination of consumer credit reporting agencies with more than $7 million in annual receipts, the agency announced on Monday.

9. Visa shares conversion: CUs won't see major impact

SAN FRANCISCO (7/26/12)--Visa is adding $150 million to a litigation escrow by converting some of its Class B shares held by credit unions and banks to help fund its share of liabilities in the aftermath of a proposed $6.05 billion settlement announced earlier this month. The move will affect credit unions, but should not have a major impact.

8. NCUA to shift exam focus to largest CUs

ALEXANDRIA, Va. (7/27/12)--Noting that one-size-fits-all supervision is "no longer appropriate in a credit union industry with nearly 100 million members and more than $1 trillion in assets," National Credit Union Administration Chairman Debbie Matz on Thursday announced a new office that will focus on regulating corporate and high-asset credit unions.

7. Top 10 payment trends to watch

CINCINNATI (7/23/12)--Vying for share of wallet is the No. 1 payment processing trend shaping up for 2012 in an industry undergoing a number of changes, according to a report from a payment processor.

6. Vermont CU says it's targeted in bank battle

MONTPELIER, Vt. (7/18/12)--Vermont State Employees CU has filed an appeal with the Vermont Department of Financial Regulation (DFR)  after DFR issued a cease-and-desist order notice to prevent VSECU from using the word "banking" in its marketing, communications, and ads to describe its services.

5. Exam issues remain high priority: CUs to NCUA

SAN DIEGO, Calif. (7/13/12)--Examination issues again loomed large as the National Credit Union Administration this week held its fifth credit union listening session in San Diego, Calif.

4. Capital One fines prompt CFPB card guidance

WASHINGTON (7/19/12)--Credit unions should be aware of compliance guidance posted yesterday by the Consumer Financial Protection Bureau that addresses marketing practices associated with certain "add-on" features related to credit cards.

3. Trust in big banks collapses, CUs see largest gain

CHICAGO (7/25/12)--Only 21% of Americans surveyed trust the financial system, the lowest point on record since March 2009, according to the most recent Chicago Booth/Kellogg School Financial Trust Index. However, trust in credit unions increased, rising to 63% from 58%.

2. Gov. signs Calif. homeowner bill of rights

LOS ANGELES (7/13/12)--California Gov. Jerry Brown Wednesday signed the "Homeowner Bill of Rights" into law in Los Angeles. The bill will go into effect Jan. 1. Credit unions will be impacted by the legislation, which is the first of its kind in the U.S.

1. Settlement could bring a $50 million cost for CUs

WASHINGTON (7/16/12)--Reduced credit card interchange rate fees--mandated as a result of an historic lawsuit settlement between merchants and credit card companies--could cost credit unions with credit card programs up to a total of $50 million, according to estimates by the Credit Union National Association.

USNet re-elects officers two board members

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ALBANY, N.Y. (8/2/12)--Universal Sharing Network (UsNet),  a New York state-based provider of financial network services, announced the re-election of its board officers and the results of its board elections.

 

Board members re-elected to serve another one-year term include:

  • Chairman--Mark Pfisterer, president/CEO of AmeriCU, Albany, N.Y.;
  • Vice chairman--Mark Welshoff, president/CEO of Palisades FCU, Pearl River;
  • Treasurer--Christine Peters, CEO of Family First of NY FCU, Rochester; and
  • Secretary--Alfred Frosolone, manager/CEO of Niagara's Choice FCU, Niagara Falls.
Two directors were re-elected to serve new three-year terms: Peters and John Tucker, chief financial officer/president of FASNY FCU, Albany. 

Newly elected to UsNet's board of directors are Eileen Nolan, senior vice president/chief branding officer of Nassau Educators FCU, Westbury; and Thomas Fallon, chief operating officer/executive vice president of Teachers FCU, Hauppage. 

Nolan and Fallon will replace outgoing board members Edward Paternostro, CEO/president of Nassau Educators FCU, and Robert Allen, president/CEO of Teachers FCU, whose terms on the board have expired.

UsNet is part of a national network of credit unions that expands services to their members through CU Service Centers.