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NEW: PCUA's McCormack To Receive Wegner Lifetime Award

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MADISON, Wis. (9/3/13, UPDATED 10:15 a.m. CT)--The National Credit Union Foundation has named Jim McCormack, president/CEO of the Pennsylvania Credit Union Association, as one of three winners of the 2014 Herb Wegner Memorial Award for Lifetime Achievement.
 
This is the first time in NCUF's history that three awards for Lifetime Achievement will be given. McCormack's award will be one of four total Herb Wegner Memorial Awards presented at a special dinner hosted by NCUF at the Grand Hyatt Washington on Feb. 24 during the Credit Union National Association's 2014 Governmental Affairs Conference.
 
"Jim has done outstanding work at PCUA throughout his career," said John Gregoire, chair of NCUF Wegner Awards Selection Committee and president of The ProCon Group in Madison, Wis. "Countless credit union members have been positively affected by his work, which is evidenced by the passion and commitment of his numerous supporters."
 
NCUF last week named Tim Haegelin, retired president/CEO of Generations FCU in San Antonio, Texas, as the first recipient of the 2014 Herb Wegner Memorial Award for Lifetime Achievement.
 
McCormack began his credit union career in 1971. Before joining PCUA in 1981, he held positions with CUNA Mutual Group both in Pittsburgh and at its corporate headquarters in Madison, Wis.
 
McCormack is also CEO of Pacul Services Inc., PCUA's service corporation, and CEO of Pennsylvania Credit Union Service Centers Inc., which administers the credit union shared branching network in Pennsylvania.
 
Under McCormack's leadership, PCUA created the Pennsylvania Credit Union Better Choice Program. The program is a public/private partnership between the state treasurer's office, state credit union regulator and 72 Pennsylvania credit unions with 215 branches statewide. It offers an alternative to payday lending, with the goal of helping consumers transition from a predatory lending environment to a wealth-building environment through credit union membership. Since inception, credit unions have made 65,000 Better Choice loans valued at $32 million, saving consumers $23 million over traditional payday lenders.
 
McCormack orchestrated a joint exercise between the PCUA Board and a steering committee of credit union professionals to develop the only mandatory statewide public awareness/advocacy initiative in the country, the iBelong campaign. The campaign promotes Pennsylvania credit unions in media such as TV, cable, radio, newspaper and magazines. Four other states have adopted iBelong over the past five years, with several others considering it as well.
 
More than twenty-five years ago, McCormack founded state credit card processing, which now serves more than 200 credit unions. PCUA administers one of the largest correspondent card programs in the country and offers debit and other payment products and services.
 
Since the 1980s, McCormack has launched many ATM initiatives for credit unions, including the creation of CU$, a selective surcharging compact among Pennsylvania credit unions, that provides consumers enjoy surcharge-free access to credit union ATMs throughout Pennsylvania.
 
McCormack has also demonstrated leadership in credit union advocacy. He cultivated a strong relationship with U.S. Rep. Paul Kanjorski, former senior member of the House Financial Services Committee and the main driver of H.R. 1151, the National Credit Union Membership Access Act. McCormack also led lobbying efforts to modernize the Pennsylvania State Credit Union Code, maintaining equal powers between state and federally-chartered credit unions, and overcame significant banker opposition.
 
He spearheaded the relationship with the Credit Union National Association and attorneys in litigation at both the federal and state levels defending the substantive and procedural rights of credit unions regarding community chartering. He organized the successful strategy for defense of credit union tax status in Pennsylvania court system.
 
McCormack has served for many years on national boards and committees, including CUNA, CUNA, CUNA Service Group/CUNA Strategic Services, NCUF and the Credit Union Service Centers. He was a charter member and table officer of the Credit Union House Board. McCormack currently serves on the CUSC Board, League Info Sight Board, and is a Credit Union Business Services Trustee.

GECU's Juntos Avanzamos Gala Provides School Supplies

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FARMERS BRANCH and EL PASO, Texas (8/30/13)--
El Paso, Texas-based GECU received the Cornerstone Credit Union League's Juntos Avanzamos, or Together We Advance, designation Wednesday. Presenting the Juntos Avanzamos Flag is League President/CEO Dick Ensweiler.
El Paso, Texas-based GECU held its Juntos Avanzamos flag-raising ceremony--designating its commitment to serving Hispanics--Wednesday with some special guests: 36 students from Sageland Elementary School, who heard how important a credit union can be to achieving their dreams and received school supplies.
 
Roughly 99% of the school's students are Hispanic, and of those, 85% are social-economically disadvantaged, said the Cornerstone Credit Union League (Leaguer Aug. 29).  Each student received two bags full of back-to-school supplies.
 
GECU President/CEO Crystal Long said earning the Juntos Avanzamos, or Together We Advance, designation is important because it lets the community know that the credit union is committed to meeting its needs.
 
Students from Sageland Elementary School attended GECU's Juntos Avanzamos flag-raising ceremony in El Paso, Texas.  Each picked up two bags of back-to-school supplies at the event. Roughly 99% of the school's students are Hispanic and 85% of these students are social-economically disadvantaged. (Photos provided by the Cornerstone Credit Union League)
The credit union has met the needs of lifetime member Erich Morales. "I learned how important a credit union relationship is from my father," he told the gathering. Morales opened his first account at GECU when he was the age of some of Sageland's students. "I earned $5 for each lawn I mowed, and I would keep $2.50 and deposit the other $2.50 in my GECU savings account," he told them.
 
As he grew older, he saved more and began borrowing. Morales was the first in his family to go to college, he said, thanking the credit union for helping him achieve that dream.  "I was able to go to college partly because of my savings and partly because of the student loans I was able to receive from the credit union. Had it not been for the credit union, I may not have been able to go to college, and if I hadn't been able to go to college, I would not have been able to go to law school."

The credit union was with him every step of the way, he said, adding it also financed cars and houses. He also received one of the credit union's first business loans.
 
The event was covered by Univision,  KFox 14 News, and local Spanish newspaper, El Diario. In addition to distributing school supplies to the students, GECU also has distributed thousands of school supplies at several of its branches throughout the city. It also offered free back-to-school immunizations.

Cars Line Up Across Nation For CUs' Free Gas

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MADISON, Wis. (8/30/13)--Seasons FCU in Middletown, Conn., picked up the gas tab this week for consumers, with employees personally pumping $20 of free gas for the first 200 drivers in line--a total of $4,000 in free gas--as part of the national "Take Back Your Banking" campaign.
 
Employees of Seasons FCU pump $20 of free gas for each of the the first 200 drivers in line at a gas station in Middletown, Conn., as part of  the nationwide "Take Back Your Banking" event.
It was a scene repeated over and over across the country Wednesday and Thursday as credit unions and community banks in 38 cities did the same, pumping more than $150,000 in free gas to 7,600 people. The institutions used the event to urge consumers to go local in their banking and many credit unions garnered some media attention about the good credit unions do for their communities.
 
"This effort signifies a growing trend of community banks and credit unions across the country partnering up to demonstrate that there are better banking options than the megabanks," said Gabe Krajicke, CEO of Kasasa.com, a resource for consumers using free rewards checking accounts at local credit unions and banks.
 
Seasons FCU staff had a little fun while pumping gas. The credit union's CEO, Keith Wiemert--who is also chair of the Credit Union League of Connecticut and interim CEO of the league-- was in Madison, Wis., attending league staff orientation meetings while staff pumped gas. But he was there in spirit--some staff donned Keith Wiemert masks as they pumped the gas. Others wore red superhero capes.
 
Long lines of cars were the rule of the day at gas stations in 38 cities across the U.S. Credit unions participating pumped free gas to encourage consumers to bank locally, instead of at megabanks. (Photos provided by Seasons FCU).
In Auburn Hills, Mich., about 400 drivers began lining up at 6:40 a.m. Wednesday for free gas pumped Cornerstone Community Financial CU employees, said the Detroit News (Aug. 28).  Many left when they realized they weren't among the first 200 drivers.  CEO Heidi Kassab said she was surprised by the response, noting that $20 is not a lot of gas, but everyone was thankful. Staff "heard some great stories" about what the recipients were going to do with the gas--such as visiting family members and running run errands, she said.

The Oakland Press also covered the event, quoting Cornerstone Marketing Manager Stephanie Leahy, who said the credit union is "just encouraging local consumers that there are better alternatives available." Banking local, she said, fuels the local economy.
 
In Jackson, Mich., horns honked, people cheered and CP FCU employees gave away gas at P.S. Food Mart, according to the Jackson Citizen-Patriot (Aug. 28). And the reactions among recipients?  "Awesome." "Amazing."  "Really nice." "Free is always good."

The first vehicle arrived at 7:30 a.m., 1 1/2 hours early, and a line of cars continued for several blocks. Jackson police officers helped direct the traffic flow. "We're trying to spread the word around the community about banking locally," CP FCU Vice President Sarah Ermatinger told the newspaper. "High bank fees and gas prices are at the top of people's minds, and we are giving them relief at the gas pumps and how they can get a break on the [bank] fees as well."
 
One customer ran out of gas while in line, Ermatinger said. The driver pushed his car about a block and received help from employees and police to get his free $20 of gas.
 
The nationwide events attracted local press and broadcasters looking for compelling photos of long lines of cars:
  • EverythingLubbock.com reported Thursday on Texas Tech FCU, Lubbock, Texas, taking over a gas station, pumping gas and talking to local residents about banking with a credit union or community bank, instead of megabanks.
  • WCAX News in Colchester, Vt., Thursday featured a story, "Free gas giveaway highlights local credit unions" and a number of photos at the pumps where North Country CU was pumping gas.
  • KSLA.com in Shreveport, La., reported on Pelican State CU in Shreveport "using a unique technique to get you to 'take back your banking.'"
  • MyFoxPhoenix.com noted that two valley credit unions--Altier CU in Tempe, Ariz., and Credit Union West, Glendale--pumped free gas, while MyFoxAtlanta.com pointed out Family Savings CU was participating.
Such events can foster service excellence while raising awareness about the value of credit unions. Fostering service excellences and raising awareness, along with removing barriers, are the components of the Unite for Good campaign launched by the Credit Union National Association and state leagues to work toward the vision of Americans choosing credit unions as their best financial partners. Use the links for more information.

NEW: CU Loans Grew In July, Savings Declined

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MADISON, Wis. (8/30/13, UPDATED 1:40 p.m. CT)--Credit union loans outstanding grew in July and credit  union savings balances declined, according to the Credit Union National Association's monthly  sample of credit unions.
 
Loans grew 1% to $634 billion in July, compared with a 0.5% increase during the same period last year. Unsecured personal loans rose 2.1%, followed by new-auto loans (1.8%), used-auto loans (1.6%), fixed-rate mortgages (1.3%), credit card loans (1.2%), and adjustable-rate mortgages (0.9%). Other mortgages and home-equity loans declined 1.1% and 0.1%, respectively.
 
Savings balances dropped 0.6% in July to $925.1 billion, compared with a 0.8% decline in July 2012. Money- market accounts and one-year certificates grew 0.6% and 0.1%, respectively. Share drafts (3%), regular shares (0.9%) and individual retirement accounts (0.9%) all decreased in July.
 
Regarding asset quality, credit unions' 60-plus-day delinquency rate remained at 1% during the past six months.
 
With loan growth outpacing savings growth in July, the loan-to-savings ratio increased one percentage point--to 68.5% from 67.5% in June.  The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--was 18% in July.
 
Total credit union membership grew 0.4% during July to 98 million.
 
The movement's overall capital-to-asset ratios remained at 10%. The total dollar amount of capital $111 billion.

Affinity Plus FCU CEO Markland Resigns

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ST. PAUL, Minn. (8/30/13)--Kyle Markland, president/CEO of Affinity Plus FCU, St. Paul, Minn.--Minnesota's second largest credit union with $1.6 billion in assets--resigned Thursday, effective immediately.
 
David Larson, Affinity Plus senior vice president, was named interim CEO. Larson is executive director of the Affinity Plus Foundation and sits on the board of the Minnesota Credit Union Foundation.
 
"For somebody who worked with Kyle for 12 years, I was certainly surprised," Larson told News Now. "But I respect his decision."
 
Affinity Plus Chief Administrative Office Liz Hayes resigned in July. Larson said Markland's resignation was not related to Hayes' departure.
 
The Affinity Plus FCU board will conduct a nationwide search for a permanent CEO. The search will also include internal candidates, Larson said.

CU CEOs Optimistic On Loan Demand

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PLANO, Texas (8/30/13)--Credit union CEOs' expectations for increased loan demand have doubled the past 12 months, according to Catalyst Corporate FCU's most recent CU CEO Confidence Survey. The second quarter 2013 measurement rose 4.2 points over the first quarter report and surged year-over-year nearly 13 points.
 
Although Tom Farrar, president/CEO of the $4.8 million asset Printing Office Employees CU (POE CU) in Los Angeles, would like to see loan demand rise, he views the fact that his members aren't borrowing as positive in some ways. "I sincerely hope loan demand will increase over the next six months," Farrar said. "There's a lot of talk about the economy improving. We're not seeing that here," he told Catalyst Corporate.
 
POE's field of membership revolves around the printing industry, Farrar said, and all of the credit union's select employee groups have experienced downsizing.
 
"It's tough on the members and on the credit union," he said. "However, the overall financial condition of my members is improving, not because of the economy, but because of lessons learned in the downturn. People are making progress in turning around bad credit scores. That's why they're not taking out loans."
 
Farrar said POE CU's members may soon loosen their purse-strings a bit. In the meantime, the credit union is well-capitalized and will continue to ride out the storm, he said.
 
Brian Turner, Catalyst Strategic Solutions' director and chief strategist, offered his analysis of CEOs' increased optimism for loan demand.
 
"During the first half of 2013, consumer sentiment improved just enough to see overall annualized loan growth increase to about 4%, aided by a sizeable increase in auto sales during the first quarter," Turner said. "This helped to push the industry's vehicle loan growth upward to about 9%, and mortgage loans increased 4% during the same timeframe. Both increases are welcome improvements over the doldrums of the past three years."
 
Most of the loan growth continues to reside in the industry's largest peer group, $500 million or more in total assets, Turner said. "This group, which represents about 94% of the industry's assets, but less than 7% of the number of credit unions, experienced a 9% increase in loans. This indicates that the remaining 93% of the credit unions collectively experienced a 6% decline in loans--mostly from institutions with less than $150 million in assets. The good news is that the rate of decline is half the rate experienced during the first quarter of 2013 for these credit unions."
 
Turner questioned whether some of the loan growth for the first half of the year might be associated with heightened consumer loan demand that typically occurs in summer or early fall. "If the association is significant, the 4% annualized growth rate may be unsustainable over the second half," he said. "There is early evidence that consumer spending is cooling off again after hitting a 3% increase during the first quarter."
 
Catalyst's overall CU CEO Confidence Index remained virtually unchanged for the second quarter in a row, increasing less than 0.25 point over last quarter. Other survey results show a 2.7-point increase in CEOs' confidence in members' future financial condition (in six months) and a 2.6-point decrease in confidence for their own credit union's future financial condition (in six months). Expectations for share deposit growth fell for the second consecutive quarter by about two points.
 
Catalyst Corporate's quarterly survey measures CEO confidence in the economy in six key areas:
  • Current financial condition of members;
  • Current financial condition of the credit union ;
  • Anticipated financial condition of members in six months;
  • Anticipated financial condition of the credit union in six months;
  • Anticipated loan demand at the credit union in six months; and
  • Anticipated share deposit growth at the credit union in six months.
The survey questionnaire was sent to 1,356 CEOs of Catalyst Corporate member credit unions in July. Responses totaled 201 or a 14.8% response rate. Additional details, including graphs with the survey's historical data, are available under Links & Forms/Surveys on Catalyst's website. Use the link.

Credit Card Balances See First Year-over-year Hike Since 2008

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ATLANTA (8/30/13)--The total balance of credit cards increased in the year ending in July to $533.6 billion from $533.3 billion, the first year-over-year increase in five years, according to Equifax's latest National Consumer Trends Report.

"Only two major consumer credit segments are currently growing: auto financing and student loans," said Equifax Chief Economist Amy Crews Cutts. "In all other segments, consumers are reducing their debt burdens, either negatively, through foreclosures and bankruptcies, or positively, through payoffs--payoffs are dominating in most cases today.
 
"We expect mortgage balances to begin rising again over the next several months as new home purchase loans overtake foreclosures and payoffs," she said.
Other year-over-year changes in balances include:
  • Student loans increased 11.3%, to $884.2 billion from $794.6 billion;
  • Auto loans rose 10.9%, to $826.8 billion from $745.3 billion;
  • First mortgages decreased 0.9%, to $7.72 trillion from $7.79 trillion;
  • Home-equity installment loans declined 4.1%, to $136.5 billion from $142.3 billion; and
  • Home-equity revolving debt dropped 8.9%, to $504.1 billion from $553.2 billion.
Other highlights from the data include:
 
Credit cards:
  • Serious delinquencies represent 1.86% of outstanding balances in July 2013, a decrease of more than 11% year-over-year;
  • Total new credit opened from January to May is the highest since 2008 and an increase of more than 6% from same time a year ago, to $77.7 billion $72.9 billion;
  • From January to May, the total number of new loans also rose more than 6% from the same time a year ago, to 16.6 million from 15.6 million; and
  • Both new loans and new credit year-to-date in May are four-year highs.
Student loans:
  • Total student loans originated from January to May is 4.2 million, a decrease of 9.3% from same time a year ago;
  • From January to May, new credit totaled $24.3 billion, an increase of nearly 4% from same time a year ago;
  • More than 60% of new student loans in May were distributed to borrowers between the ages of 24 and 39, a modest decrease from the same period last year; and
  • Write-offs year-to date in July totaled $11.6 billion, an eight-year high and an increase of more than 58% from a year ago.
Home Finance:
  • The total balance of home finance write-offs year-to-date in July is $96.3 billion, a decrease of more than 22% from same time a year earlier and the lowest since 2007;
  • First mortgages in severe delinquency (30-days past due) represent 6.24% of outstanding balances, a decrease of 22% from the same time last year;
  • Similarly, the total balance of first mortgages 90-days past due or in foreclosure is less than $310 billion, a five-year low and a decrease of more than 25% from same time a year ago; and
  • By loan type, severely delinquent balances (90-days past due or in foreclosure) for home-equity revolving ($8.3 billion) and home equity installment ($4.4 billion) in July 2013 are five-year lows.

A New Trend: Minnesota CUs Modify Annual Meetings

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ST. PAUL, HOYT LAKES and DULUTH, Minn. (8/30/13)--Many credit unions are using an old channel--annual meetings--in a new way to position themselves as creative, contemporary financial institutions, according to the Minnesota Credit Union Network.

The reason is that the credit union industry is evolving and placing a heavy emphasis on attracting the next generation of borrowers and savers, MnCUN said.

Three Minnesota credit unions have strategically modified their annual meetings to meet the changing needs of their membership.

SPIRE FCU, a $596 million asset credit union in Falcon Heights, welcomed a record-setting number of members--nearly 2,000--to its Annual Meeting and Member Appreciation Day in February, its third year of coordinating the annual event with a twist. The attendance represented a 40% jump from 2012, and a 1,300% increase from 2009.

An inspirational keynote speaker, a guaranteed one-hour time limit, and cash are the draw, MnCUN said.

SPIRE President/CEO Dan Stoltz leads the hour-long meetings, providing broad education about SPIRE and the credit union difference, and discussing economic trends.

As for the cash, SPIRE is the first credit union in the country to incentivize annual meeting attendees. It's the credit union's "strong overall financial picture" that has allowed it to provide a $25 cash payment to all attendees, according to SPIRE.

The second credit union, NorthRidge Community CU (NRCCU) in Hoyt Lakes, decided it was time for a change in the face of declining attendance at its traditional annual meeting. The $35 million institution made its first move toward a format change a few years ago, attempting barbeque-style annual meetings at the city park pavilion. However, with continued low attendance, NRCCU moved ahead with a complete overhaul in 2013.

With credit union offices in four cities across north central Minnesota's "Iron Range," NorthRidge converted its annual meeting to a weeklong celebration, involving all branches and staff in drawings, decorations and member education. NRCCU's staff primarily focused on educating members--reminding them that they're owners of the institution and therefore eligible to help direct the future of the credit union by serving on the board and supervisory committees.

At Minnesota Power Employees CU (MPECU) in Duluth, it's the little things that make the difference, said MnCUN. MPECU has created a hybrid between the traditional and modern annual meeting formats, infusing its event with formality, practicality and innovation.

To draw a crowd for its annual meeting, the $85 million credit union reminds members that they are the owners of the institution and mails personalized invitations. MPECU draws attendees together for a social hour prior to the meeting, conducts all official credit union business in under a half hour, and wraps its annual event with a formal dinner.

MPECU also incorporated an innovative incentive to attract young adults to its event: Child care. Staff hires two of its members who are teachers to provide kids' activities and games, offered as a service to parents with young children. Once the business meeting concludes, they join their parents for dinner with a special a kids' meal and gift bag as a "thank you" for their participation.
 
The credit unions modified their meetings to foster service excellence, one of the key components of the Credit Union National Association's and leagues' national Unite For Good Campaign.  The campaign works toward the strategic vision of American's choosing credit unions as their best financial partner. 

Al George, 'Epitome Of Volunteerism,' Dies

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SAN DIEGO, Calif. (8/30/13)--Al George, a former California Credit Union League and Credit Union National Association chairman, has died.

George was called "the epitome of volunteerism and leadership, but most importantly a personal friend," by Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues, in an announcement of his passing.
 
CUNA President/CEO Bill Cheney noted that George was "quite literally a lifetime credit union volunteer."
 
"He was a true friend, a great leader and mentor and will be missed by us all.  He will of course live on in the spirit of the credit union movement, which he so forcefully embodied for more than 65 years," Cheney said.

George dedicated his life and career to the greater good of the credit union movement, serving on the North Island CU board here board for more than 60 years.  Dykstra recalled George once said, "It's difficult for me to focus on one unique accomplishment as a volunteer. I feel every contribution is important."

George's volunteer credit union activities began in 1948 as a director of San Diego Gas & Electric CU (now Financial 21 CU) while he was a 43-year utility engineer for the company. In 1951 he became president of the board of that credit union and a director of the California league.

"Al was league chairman in 1962 and received the Leo H. Shapiro Award in 1981, Volunteer of the Year Award, and the President's Award for his 50 years of volunteer service," Dykstra recalled.

He also served as past chair of the CUNA and was a former director of the World Council of Credit Unions. In 1953 he joined Central CU during its organization effort and continued 43 years of volunteer service there until its 1996 merger into North Island CU. He served on the Supervisory Committee after the merger, and in 1998 began serving on the board of directors, including a three-year term as board chair. He retired from his volunteer service in July after serving this industry for 65 years.

Steve O'Connell, president/CEO of North Island CU, said George was "a remarkable man who embodied the true spirit of 'people helping people.'"

O'Connell added, "Al started in uniform with the U.S. Marine Corps and was called into action for four years during World War II (three major campaigns and 26 months overseas). He never forgot the importance of serving those who serve our country. Al's legacy is one of love for his family, and commitment to volunteerism, credit unions, and the country."

CUbroadcast: BizKid$ Building Financially Fit Gen Z

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MADISON, Wis. (8/30/13)--BizKid$, a credit union-funded public television series that teaches kids about money management and entrepreneurship, is rolling along after five years, winning awards and continuing to teach kids how to make and manage money, the show's program director told CUbroadcast in a Tuesday video broadcast.

BizKid$, which just received its second Emmy award in June, has been nominated for 13 Emmys in the past five years it has been on the air, Danielle Brown, the National Credit Union Foundation's BizKid$ program director, told CUbroadcast.

"To be nominated and to win speaks to the caliber of the shows," Brown said.

The credit union movement--including NCUF, state leagues, state credit union foundations, individual credit unions and credit union business partners--collectively raised $14 million during the past five years for the show's five seasons and 65 episodes, she added.

There is great exposure and branding for the credit union movement, arising from its BizKid$ sponsorship, Brown said.

A term has been coined for BizKid$, "Edutainment," a concept in which kids can be educated while being entertained, Brown said. "Learning doesn't have to be boring, and education and entertainment don't have to mutually exclusive," she explained.

"Kids relate to it because they are hearing from other kids, peer-to-peer--not adults," Brown added

The information in the shows should remain relevant for years to come as "evergreen content," and credit unions can purchase DVDs of episodes through NCUF at no cost, she said.

Also, credit unions can use BizKid$ episodes as a resource in schools because each episode   comes with a curriculum and lesson plan, which is free and downloadable from the BizKid$ website. "Credit unions also can look to community youth programs, such as Boy Scouts and Girl Scouts--beyond just schools--to use these materials," Brown said.  

ATMIA White Paper: FIs Must Adapt To Mobile Payments Model

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SIOUX FALLS, S.D. (8/30/13)--Although it is not clear which technologies will win the mobile payments race, financial institutions, including credit unions, must adapt products and services to meet consumer expectations for the mobile payments model, according to a new white paper from the ATM Industry Association.
 
The mobile payments market is still at an early stage, and most models are just one to two years old, but consumer adoption has been rapid, the paper said. By 2017, consumers worldwide will buy $1.3 trillion worth of goods with their phones and tablets, a fourfold increase from today, according to Juniper Research.
 
Recommendations for financial institutions made in the white paper include:
  • Financial institutions should leverage critical mass and global presence of the ATM as a hub for interacting with mobile devices by integrating technology such as cardless operation. It is crucial to position the ATM as an integrated payment hub to help financial institutions shape the future payments market, the paper said.
  • With their expertise in transactions, financial institutions should consider strategic alliances with mobile payments providers. For example, the mobile network operator handles interfacing with the banking network to provide mobile payment for under banked sectors.
  • Financial institutions can leverage their own competitive advantage to extend card-based payment to include mobile payments. Financial institutions can define mobile payment as an extension of card-base payments and can help establish standards in the mobile market, the papers said. Financial institutions also have expertise with data security and fraud prevention.
To download the white paper, use the link

'Miracle Jeans Day' T-shirt Orders Due Sept. 1

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SALT LAKE CITY, Utah (8/30/13)--Are business-casual Fridays your very favorite work day?  Well, you can do even better if you act by this Sunday.

For a $5 donation to Children's Miracle Network Hospitals by Sept. 1, credit union employees can "earn" the right to wear jeans and participate in Miracle Jeans Day. For a $25 donation, participants also qualify for a Miracle Jeans Day T-shirt.

Miracle Jeans Day is Sept. 18 this year and credit unions across North America will be participating in the charity event that raises funds for 170 children's hospitals. All donations stay local to benefit the member hospital serving the community of the donor.

New for this year is a Credit Unions for Kids version of the Miracle Jeans Day T-shirt. To receive this free T-shirt with your $25 donation, contributions must be received no later than Sept. 1 by phone at  801-214-7452 or online at MiracleJeansDay.com.

From Sept. 2 to12, a $35 donation will be required to receive a free T-shirt; the added amount will help to cover fees for expedited  service. The final day to qualify for a T-shirt is Sept. 12.  To date, more than 1,000 credit unions supporters and employees have purchased these unique Miracle Jeans Day T-shirts.

In 2012, credit unions were the largest supporters of Miracle Jeans Day, with more than 600 credit unions participating in the event. Collectively those credit unions raised over $300,000 for Children's Miracle Network Hospitals.   
 
For more information on participating in Miracle Jeans Day, to order your Credit Unions for Kids T-shirt online, or to learn more about Children's Miracle Network Hospitals, use the resource links below.
 

CUNA Closed Monday For Holiday, No News Now

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WASHINGTON and MADISON, Wis. (8/30/13)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association will be closed Monday in observance of Labor Day. There will be no Monday edition of News Now.
 
News Now will resume regular publication on Tuesday.
 
 
 

CU System Briefs (08/29/2013)

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  • NORMAN, Okla. (8/29/13)--OU FCU in Norman, Okla., announced the selection of Shannon Hudzinski as its new president/CEO. She previously served as senior vice president and chief operating officer at First Flight FCU in Cary, N.C. "Shannon brings extensive operations and financial management experience to the credit union and is just the individual to lead OUFCU in its path of growth and development," said OUFCU Chairman David Shirley. At First Flight FCU, Hudzinski was instrumental in implementing strategic growth plans and creating an e-service platform for the credit union. She worked to increase efficiency and productivity across all operations and improve service delivery to members. She also developed a new sales culture and designed a management trainee program for credit union leaders ...
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NEW: Al George, 'Epitome Of Volunteerism,' Has Passed Away

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SAN DIEGO, Calif. (8/29/13, UPDATED 8:44 a.m. ET)--Al George, a former California Credit Union League and Credit Union National Association chairman, has passed away.

George was called "the epitome of volunteerism and leadership, but most importantly a personal friend," by Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues, in an announcement of his passing.
 
 CUNA President/CEO Bill Cheney noted that George was "quite literally a lifetime credit union volunteer."
 
"He was a true friend, a great leader and mentor and will be missed by us all.  He will of course live on in the spirit of the credit union movement, which he so forcefully embodied for more than 65 years," Cheney said.

George dedicated his life and career to the greater good of the credit union movement, serving on the North Island CU board here board for more than 60 years.  Dykstra recalled George once said, "It's difficult for me to focus on one unique accomplishment as a volunteer. I feel every contribution is important."

George's volunteer credit union activities began in 1948 as a director of San Diego Gas & Electric CU (now Financial 21 CU) while he was a 43-year utility engineer for the company. In 1951 he became president of the board of that credit union and a director of the California Credit Union League.

"Al was league chairman in 1962 and received the Leo H. Shapiro Award in 1981, Volunteer of the Year Award, and the President's Award for his 50 years of volunteer service," Dykstra recalls.

He also served as past chair of the CUNA and was a former director of the World Council of Credit Unions. In 1953 he joined Central CU during its organization effort and continued 43 years of volunteer service there until its 1996 merger into North Island CU.  He served on the Supervisory Committee after the merger, and in 1998 began serving on the board of directors, including a three-year term as board chair. He retired from his volunteer service in July after serving this industry for 65 years.

Steve O'Connell, president/CEO of North Island CU Union, said George was "a remarkable man who embodied the true spirit of 'people helping people.'"

O'Connell added, "Al started in uniform with the U.S. Marine Corps and was called into action for four years during WWII (three major campaigns and 26 months overseas). He never forgot the importance of serving those who serve our country. Al's legacy is one of love for his family, and commitment to volunteerism, credit unions, and the country."

Illinois League Takes Key Role In Passing Prepaid Disclosure Bill

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NAPERVILLE, Ill. (8/29/13)--Illinois Gov. Pat Quinn Monday signed SB 1829, legislation that establishes a basic set of disclosures that must be furnished on general-use reloadable prepaid products. The Illinois Credit Union League took a key role in drafting and passing the law.

The disclosures will be provided to consumers on a pre-purchase basis, and on and with the cards.

"If there is going to be consumer legislation addressing general-use reloadable prepaid products, it should be done in a manner that provides meaningful basic disclosures to cardholders, but generates no additional burden to issuers of the products," said Stephen Olson, ICUL executive vice president and general counsel. "SB 1829 nicely addresses that balance by identifying disclosures commonly provided by many issuers today in the marketplace."

The cards operate like traditional debit cards but are not tied to a checking account. Instead, they are purchased with an amount loaded on the card and allow the purchaser the option of subsequently adding funds to the card.

After negotiations with the Consumer Protection Division of the Illinois Attorney General's office, ICUL led a working group coalition to draft and seek passage of the legislation. The coalition included the Community Bankers Association of Illinois, the Illinois League of Financial Institutions, and the Illinois Retail Merchants Association, and Visa, MasterCard and American Express.

The bill provides guidance to reloadable pre-paid debit card issuers in Illinois until the Consumer Finance Protection Bureau declares regulatory guidance under the federal Electronic Fund Transfer Act.

The legislation is important to ICUL and ICUL Service Corp. (LSC), its credit union service organization, which offers prepaid products as part of its suite of services and programs. Cathy Pettis, LSC senior vice president, served as a prime contact in the negotiations.

Since general-use reloadable prepaid cards were exempted from the federal Credit Card Accountability Responsibility and Disclosure Act, it was important that any set of required disclosures reflect and be consistent with marketplace practice, ICUL said. Pettis helped ensure that this was achieved, said the league.

Filene Granted $700K To Launch FI Services Incubator For Needy

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MADISON, Wis. (8/29/13)--Filene Research Institute has received a $700,000 grant with a 30-month duration from the Ford Foundation to develop and implement an accessible financial services incubator. It will test, package and scale innovative, viable financial products that benefit low-and-moderate-income U.S. consumers.

"Every American has the right to hopes, dreams, wants and a better way of life," Mark Meyer, Filene CEO, told News Now. "The alternative financial services sector's providers have ample opportunity to exploit underbanked individuals today, blocking that right. With the Ford Foundation, we want to bring to the market consumer-friendly financial products that help them achieve their fullest potential and live the lives they want."

Filene will select 25 U.S. credit unions and five products for an 18-month pilot, beginning in November. Credit unions interested in testing potential incubator products and organizations with potential product innovations for the incubator can learn more and apply by using the link.

The grant comes as one in five households, or 24 million American homes, are underbanked and lack access to affordable financial services. The socioeconomic disparity is compounded by the racial and ethnic disparities among persons denied credit; 53% of African-Americans, 43% of Hispanics and 44% of Native Americans are underbanked, said Filene.

"Mainstream financial institutions consistently fail to improve access for these vulnerable persons to affordable credit and other essential financial products," Meyer said.

"The Ford Foundation's support enables us to build an accessible financial services incubator that provides alternatives to payday lenders and other predatory providers in America's low-and-moderate-income communities," Meyer added. "The incubator will contribute significantly to creating a vibrant financial marketplace that offers products beneficial for underbanked consumers and mainstream financial institutions."

The project will have three phases:
  • The lab--testing promising product ideas;
  • The factory--manufacturing innovations and packaging products for mass adoption; and
  • The marketplace--distributing products through in-person and open-source online marketing.
The incubator will use credit unions as the proving ground for innovative products to test their viability with mainstream financial institutions. An advisory panel of financial institution staff, researchers and industry analysts will ensure the viability of the product ideas.

Filene will host the incubator at its headquarters in Madison, Wis. While this is the organization's first Ford Foundation grant, Filene received a sub-grant from the D2D Fund supported by the Ford Foundation in 2008 to plan and implement prize-linked savings products to eight credit unions. Within 11 months, 11,500 consumers saved an estimated $8.5 million. 

More Members Of Congress State Positives Of CUs

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LANSING, Mich. and CLIFFSIDE PARK, N.J.  (8/29/13)--
Click to view larger image U.S. Rep. Bill Pascrell (D-N.J.) (at podium), a member of the House Ways and Means Committee, noted his support of credit unions and discussed his stance on credit unions' tax status at a town meeting in Cliffside Park, N.J., Tuesday night. In foreground is XCEL FCU's Tom Quigley, who brought up the issue at the meeting.
A congressman from New Jersey has pledged to fight to keep legitimate tax exemptions, saying credit unions do a great job and provide necessary competition to banks.  And three more members of Congress from Michigan have made statements of support for the credit union industry.
 
U.S. Rep. Bill Pascrell (D-N.J.), who serves on the House Ways and Means Committee, which is overseeing the drafting of tax code reform, held a town meeting in Cliffside Park Tuesday night. Among the 200 people attending were Tom Quigley, XCEL FCU director of marketing, and New Jersey Credit Union League President Greg Michlig and Director of Government Affairs Chris Abeel (The Daily Exchange Aug. 28).
 
Pascrell was quick to note that the credit union tax exemption is an intentional exception like the charitable gift and mortgage interest deductions. "It's not a loophole," he said, adding all deductions are under attack but Congress should be going after the loopholes like the ones that send jobs off-shore. He pledged to fight to keep legitimate deductions and exemptions, and noted credit unions do a great job and provide necessary competition to banks.
 
Click to view larger image Tom Quigley, director of marketing at XCEL FCU, Secaucus, N.J., discusses tax reform and the need to preserve credit unions' tax status at a Town Hall Meeting held by U.S. Rep. Bill Pascrell in Cliffside Park, N.J. (Photos provided by the New Jersey Credit Union League)
"This was an excellent opportunity to communicate the 'Don't Tax My Credit Union' message to an important member of our congressional delegation who will likely play a key role as tax reform moves forward," said Abeel.
 
In Michigan, 15 out of 16 congressional delegates from that state have voiced support of credit unions, with 12 of them specifically stating support for credit unions' tax status, said the Michigan Credit Union League.

The statements from Reps. Bill Huizenga, Candice Miller and Fred Upton, all Republicans, did not specifically state support for credit unions' tax status, but the statements are strong indications of their support for credit unions in general and the friendship they have shown the movement through their political careers, said the league (Michigan Monitor Aug. 28).

"These final three statements now provide the MCUL with a near clean-sweep of support from our 14 representatives and two U.S. senators," said league CEO David Adams.

Upton (R-St. Joseph) said credit unions are a critical element of the economy and that he will continue to work to give credit unions more business-lending authority.
 
"Credit unions are at the forefront of our economic recovery, providing essential financial services to communities here in Southwest Michigan and across the country," Upton said. "As we remain focused on getting our nation back to work, these member-owned and controlled institutions are helping locally owned small businesses grow, invest, and create jobs in our area. I will continue to stand by our community credit unions and work to lift the credit union member business lending cap."

Miller (R-Harrison Township) also mentioned the important role that credit unions play for small businesses and the need to remove arbitrary regulatory and statutory roadblocks to serving members in all capacities, including business loans.

"Year after year, credit unions in Michigan and across the nation have led the way in providing high-quality, low-cost financial services to millions of credit union members, especially those in more remote locations which do not regularly receive adequate services from other financial entities," Miller said.

"It is clear how critical these nonprofit cooperatives are to so many--from families, to students seeking loans for education, to small businesses who are the drivers of our national economy. We will continue to work in Congress to ensure credit unions are able to thrive without undue regulatory burdens, and in an environment where they can continue to grow their member-lending services," Miller added.

Huizenga (R-Zeeland) pointed out that he is a longtime member of a credit union and said credit unions are vital to the country's economy.

"As a longtime member of a credit union, I understand the vital role that credit unions play in the financial services industry in Michigan and across the country," Huizenga said. "As a federal legislator, I believe that Congress's role is to help create a regulatory atmosphere in the U.S. to foster economic growth. We need to ensure that credit unions continue to provide our constituents with the opportunity and ability to achieve the American Dream.

Credit unions continue to take an opportunity with representatives' legislative recess to meet with their delegates in the home districts. Many are emphasizing the "Don't Tax My Credit Union" national campaign and urging members to contact their lawmakers. For more information, use the links.

Business Loan Growth Strong In Louisiana

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HARAHAN, La. (8/29/13)--The total dollar amount of member business loans (MBL) outstanding for Louisiana credit unions increased 16.7% as of March 2013 compared with March 2012, the Louisiana Credit Union League said.
 
Member business loans totaled $172.3 million in March compared with more than $147.6 million the same time in 2012. The number of loans rose to 803 in 2013, compared with 747 in 2012, a 7.5% increase, the league said.
 
Over half of the total loans outstanding are real-estate secured business loans. Owner-occupied non-farm non-residential property accounts for 30.51% of dollars outstanding and non-owner occupied non-farm non-residential property accounts for 27.81% of dollars outstanding.   
 
This growth in the first quarter continues of a strong growth trend business lending at Louisiana credit unions for the past five years. Since 2008, the number of business loans outstanding for Louisiana credit unions has doubled to 888 in December 2012 from 418 in December 2008. The total amount of business loans outstanding has more than tripled to more than $157 million from more than $51.2 million.
 
The Credit Union National Association and credit unions are pressing Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

Sept. 13 Is Deadline For Lending Excellence Award Entries

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MADISON, Wis. (8/29/13)--The CUNA Lending Council and CUNA Mutual Group are accepting entries through Sept. 13 for the 14th annual Excellence in Lending Awards, which recognizes outstanding lending results and practices by credit unions.

The awards identify and share examples of lending excellence within the credit union movement by recognizing individual credit unions for 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 the council and CUNA Mutual.

Credit unions may be nominated for the 2013 award in the following categories:
  • Consumer Lending Excellence: Assets less than $250 million, and assets more than $250 million;
  • Mortgage Lending Excellence: Assets less than $250 million, and assets more than $250 million;
  • Low/Modest Means Excellence: Any asset level; and
  • Business Lending Excellence: Any asset level.
The awards will be presented at the CUNA Lending Council's 19th Annual Conference, Nov. 3-6, in Phoenix. Airfare, hotel and conference registration for one representative of each of the winning credit unions is included with the award.

Lack Of Big Budget For Outreach Didn't Stop This CU

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BROKEN ARROW, Okla. (8/29/13)--Credit unions are more determined than most financial institutions to reach out to their community as part of their mission. Some don't let a small budget get in the way. Case in point: Western Sun FCU in Broken Arrow, Okla.
 
The $123.2 million asset credit union took a creative approach to its community outreach program, said the Cornerstone Credit Union League (Leaguer Aug. 28). It came up with "Choose My Wish," with a goal to help smaller organizations, schools and charities in need.
 
The credit union wanted the communities it serves to know that it was interested in helping them to continue to serve people in need, Dana Harris of the credit union's marketing department, told the league.
 
"We established a website called choosemywish.com and representatives from charitable organizations and schools could ask for something they needed for a cause they were passionate about," Harris said.  "We just wanted to make a difference."
 
The credit union received 43 entries, including some from teachers who posted their wishes for items they desperately needed for their classrooms and an animal shelter seeking ID machines and used computers, Harris said.
 
Employees from each branch location served on the voting committee. They voted to make three wishes come true for charities that had not been on the credit union's radar before.
 
Western Sun FCU promoted Choose My Wish on its website and tagged all its radio spots for a planned loan campaign with a 10-second mini-commercial that drove listeners to choosemywish.com.
 
For its efforts, Western Sun FCU received first place in the state-level Dora Maxwell Social Responsibility Community Service Award in the $100 million to $200 million category, said Cornerstone CU League.
 
Outreach programs are one of the ways credit unions can demonstrate the value of credit union membership and their value to the community. Building awareness of credit unions is one of the three prongs of Unite for Good, the national campaign of the Credit Union National Association and the state leagues working toward a strategic vision in which Americans choose credit unions as their best financial partner.

Canadian Government To Fix Error That Upped CUs' Taxes

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OTTAWA (8/29/13)--Canada's Finance Department says it will fix a technical error in the government's budget bill that would have resulted in Canadian credit unions seeing a 13 percentage point increase in tax rates--higher than those paid by banks and other corporations.
 
Sweeping amendments passed by Canadian legislators in June in reforming its tax system had included a measure that would require credit unions and similar small lending institutions to pay the same tax rates as other corporations--which was a surprise to Canada's credit unions (Victoria Times Colonist Aug. 28 and The Canadian Press Aug. 27).
 
Originally the changes--introduced in an omnibus budget bill that incorporated multiple changes--increased the tax rate paid by most credit unions and caisses populaires to 15% on income in excess of the small business limit, from a federal rate of 11%.  But auditing firm Deloitte said the technical error in the legislation, if not corrected, would subject credit unions to double that amount.
 
Finance Minister Jim Flaherty's office said he is committed to fixing the technical glitch as soon as possible and will ensure no credit union is disadvantaged by the issue.
 
The March budget "blindsided" credit unions, said the Credit Union Central of Canada, which estimated taxing credit unions would cost $28 million annually. Credit Union Central said it is working to convince the government that the wording in the budget document that had indicated a tax increase would restore neutrality and fairness "probably doesn't achieve that goal."

CU System Briefs (08/28/2013)

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  • SAN LUIS OBISPO, Calif. (8/28/13)--Christina Fernandez Padilla, 50, was arrested Friday in San Luis Obispo, Calif., after someone tripped an alarm at a branch of Sacramento-based Golden 1 CU. Padilla was arrested at 11:15 p.m. after a short chase and is being charged with four counts of robbery, felony evading and assault with a deadly weapon other than a firearm (The Californian Aug. 27). The Federal Bureau of Investigation said Padilla may be charged with six other financial institution robberies attributed to the "Central Coast Bandit" and that began on New Year's Day in Pacific Grove. Robberies occurred also in Atascadero, Nipomo, Paso Robles, Pismo Beach and Modesto. In the robberies, the female robber said she needed to cash a check and then presented a note demanding cash ...
  • HARRISBURG, Pa. (8/28/13)--Erie (Pa.) FCU CEO Mary Beth Wilcher and Chief Operating Officer Brian Waugaman (right) recently met with U.S. Rep. Glenn Thompson (R-Pa.) (center)  at a special event, according to the Pennsylvania Credit Union Association (Life is a Highway Aug. 26). The congressman is a long-time credit union member and "is very supportive of credit unions and has a good understanding of how they differ from banks," said the association.  The three also discussed unemployment, welfare-to-work strategies, immigration, energy initiatives and agriculture, said PCUA. (Photo provided by the Pennsylvania Credit Union Association) ...

NEW: More Members Of Congress State Positives Of CUs

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LANSING, Mich. and CLIFFSIDE PARK, N.J.   (8/28/13, UPDATED 1:40 p.m. CT)--A congressman from New Jersey has pledged to fight to keep legitimate tax exemptions and said credit unions do a great job and provide necessary competition to banks.  And three more members of Congress from Michigan have made statements of support for the credit union industry.
 
U.S. Rep. Bill Pascrell (D-N.J.), who serves on the House Ways and Means Committee, which is overseeing the drafting of tax code reform, held a town meeting in Cliffside Park Tuesday night. Among the 200 people attending were Tom Quigley, XCEL FCU director of marketing, and New Jersey Credit Union League President Greg Michlig and Director of Government Affairs Chris Abeel (The Daily Exchange Aug. 28).
 
Pascrell was quick to note that the credit union tax exemption is an intentional exception like the charitable gift and mortgage interest deductions. "It's not a loophole," he said, adding all deductions are under attack but Congress should be going after the loopholes like the ones that send jobs off-shore. He pledged to fight to keep legitimate deductions and exemptions, and noted credit unions do a great job and provide necessary competition to banks.
 
"This was an excellent opportunity to communicate the 'Don't Tax My Credit Union' message to an important member of our congressional delegation who will likely play a key role as tax reform moves forward," said Abeel.
 
In Michigan, 15 out of 16 congressional delegates from that state have voiced support of credit unions, with 12 of them specifically stating support for credit unions' tax status, said the Michigan Credit Union League.
 
The statements from Reps. Bill Huizenga, Candice Miller and Fred Upton, all Republicans, did not specifically state support for credit unions' tax status, but the statements are strong indications of their support for credit unions in general and the friendship they have shown the movement through their political careers, said the league (Michigan Monitor Aug. 28).
 
"These final three statements now provide the MCUL with a near clean-sweep of support from our 14 representatives and two U.S. senators," said league CEO David Adams.
Upton (R-St. Joseph) said credit unions are a critical element of the economy and that he will continue to work to give credit unions more business-lending authority.

"Credit unions are at the forefront of our economic recovery, providing essential financial services to communities here in Southwest Michigan and across the country," Upton said. "As we remain focused on getting our nation back to work, these member-owned and controlled institutions are helping locally owned small businesses grow, invest, and create jobs in our area. I will continue to stand by our community credit unions and work to lift the credit union member business lending cap."

Miller (R-Harrison Township) also mentioned the important role that credit unions play for small businesses and the need to remove arbitrary regulatory and statutory roadblocks to serving members in all capacities, including business loans.

"Year after year, credit unions in Michigan and across the nation have led the way in providing high-quality, low-cost financial services to millions of credit union members, especially those in more remote locations which do not regularly receive adequate services from other financial entities," Miller said.

"It is clear how critical these nonprofit cooperatives are to so many--from families, to students seeking loans for education, to small businesses who are the drivers of our national economy. We will continue to work in Congress to ensure credit unions are able to thrive without undue regulatory burdens, and in an environment where they can continue to grow their member-lending services," Miller added

Huizenga (R-Zeeland) pointed out that he is a longtime member of a credit union and said credit unions are vital to the country's economy.

"As a longtime member of a credit union, I understand the vital role that credit unions play in the financial services industry in Michigan and across the country," Huizenga said. "As a federal legislator, I believe that Congress's role is to help create a regulatory atmosphere in the U.S. to foster economic growth. We need to ensure that credit unions continue to provide our constituents with the opportunity and ability to achieve the American Dream."

Federation Fellows Training To Aid CDCUs

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NEW YORK (8/28/13)--
Click to view larger image Participants in the National Federation of Community Develop Credit Unions' Cooperative Finance Leaders of America pilot training included: From left, front row:  Hudson Presume, Manatee Community FCU; Preeya Saikia, Fidelis FCU; Rachel Barker, Holy Rosary CU; Phelicity Thompson, Northwest Baptist FCU; Lila Phimmasone, Genesee Co-op FCU; Monique Dunbar, Credit Union of Atlanta; Eileen Auld, Citi Community Development; and Pamela Owens of the federation.  Back row: Greg Schiefelbein, City Community Development; Ash Extanus, ERDA FCU;  Lauren Hudson, Bethex FCU; Josh Mendonca, Appalachian Community FCU; Jason Change of the federation; Ashish Verma, Cooperative FCU; and Alex Bibb, Marisol FCU. (Photo provided by the National Federation of Community Development Credit Unions)
The National Federation of Community Development Credit Unions kicked off its Cooperative Finance Leaders of America (CFLA) pilot this month, with 11 fellows visiting the federation's New York City headquarters for a week of training.
 
CFLA is an initiative to recruit, train and support new and emerging professionals to be placed in leadership positions in credit unions that provide credit and safe banking services to low- and moderate-income communities.
 
The fellows are placed with federation member credit unions to promote and grow the future leaders of the credit union movement, said the federation (CDCU News Briefs August). A major focus for many in the group will be to expand community outreach to attract more and younger members.
 
Pamela Owens, vice president of programs at the federation, designed the curriculum, working with Kevin McQueen and Charles Allison, professors at the New School's Milano School of Public Policy and the Community Development Finance Lab.
 
Training topics included risk management and internal controls to loan origination and underwriting, marketing and branding.
 
"The fellows spent a week immersed in every aspect of managing and growing a credit union and learning about the financial needs and pressures of low-income individuals," said Owens.

"The goal of CFLA is to develop leaders who will go on to create community finance solutions that are relevant to all members of the community, including young members. This is vital to the continued growth of the credit union movement, because awareness of credit unions among Millennials is so low," she said.

Haegelin To Receive Wegner Award For Lifetime Achievement

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MADISON, Wis. (8/28/13)--The National Credit Union Foundation Tuesday named Tim Haegelin, retired president/CEO of Generations FCU in San Antonio, Texas, as one of three recipients of the 2014 Herb Wegner Memorial Award for Lifetime Achievement.
 
This is the first time in NCUF's history that three awards for Lifetime Achievement will be given.
 
"We received an unprecedented 17 candidates in the lifetime achievement category this year," said John Gregoire, chair of NCUF Wegner Awards Selection Committee and president of The ProCon Group in Madison, Wis.
 
Haegelin's award will be one of four Herb Wegner Memorial Awards presented at a special dinner hosted by NCUF at the Grand Hyatt Washington on Feb. 24, which is Monday night of the Credit Union National Association's 2014 Governmental Affairs Conference. Online registration for dinner tickets will be available later this year on the NCUF website.
 
Haegelin is perhaps best known for his role in the establishment of Credit Unions For Kids, the program through which credit unions raise funds for Children's Miracle Network Hospitals. It was so successful that the Credit Union For Kids model was launched on a nationwide level in 1996. Funds raised help support new facilities, equipment, research programs, patient services, special patient needs and health education programs benefiting 17 million children annually.
 
He joined Generations FCU (then San Antonio City Employees FCU) in 1980 as associate manager, taking the helm as president/CEO in 1984. During his leadership, Generations expanded from a credit union with one location, 14,000 members and $37 million in assets to fourteen locations, 49,000 members and more than $400 million in assets.
 
Haegelin leveraged partnerships to empower Generations FCU to open co-located branches with the City of San Antonio at the airport and with Goodwill Industries of San Antonio, and one of the area's largest retailers H-E-B Grocery Stores.
 
Haegelin oversaw the launch of a pilot program with the City of San Antonio Volunteer Income Tax Assistance program to offer a zero-interest, zero-fee alternative refund anticipation loan (RefundExpress) to ensure that the underserved and un-banked could keep their annual tax returns out of the hands of predatory lenders.
 
Haegelin also has worked to establish a partnership with Goodwill Industries of San Antonio to assist the un-banked and underserved. The partnership led Haegelin to oversee the development of Generations FCU's OptionCheck checking account and MoneyExpress loan, which are products and services designed to break the significant hold that payday lenders have. The partnership is considered a best practice and is currently being reviewed by Goodwill Industries nationwide.
 
Generations FCU established a full-time financial education program in 1996. Since its launch, the program has been recognized nearly every year locally, regionally and nationally for its significant impact on the community. For example, in 2012, Generations FCU was named as the State of Texas Desjardins Youth Financial Education award recipient. And in 2013, the program was the recipient of the Credit Union National Association National Desjardins Youth Financial Education Award.

VolCorp Elects Board

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NASHVILLE, Tenn. (8/28/13)--Volunteer Corporate CU (VolCorp) held its annual meeting Aug. 22, in Franklin, Tenn., and elected its board of directors.

Elected officers are:
  • Chairman--Ken Swann, Memphis (Tenn.) City Employees CU;
  • Vice Chairman--Wade Stapleton, Lifeway CU, Nashville, Tenn.;
  • Secretary--Janice Jones, United Southeast FCU, Bristol, Tenn.; and
  • Treasurer--John Jacoway, Southeast Financial CU, Franklin, Tenn.
Chris Johnson, ORNL FCU, Oak Ridge, Tenn., is newly elected to the board and will serve a three-year term.

Re-elected to three-year terms were Bonnie Sensing, Nashville (Tenn.) Firemen's CU, and John Jacoway, Southeast Financial CU, Franklin, Tenn.

Other board members include Tom Brewer, Peoples FCU, Nitro, W.Va.; Todd Swims, Leaders CU, Jackson, Tenn.; and Rick Mikels, ETMA, Louisville, Tenn.

Illinois Foundation's Second Round Of Grants Totals $23,325

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NAPERVILLE, Ill. (8/28/13)--The Illinois Credit Union Foundation recently awarded $23,325 in grants for Small Credit Union Development (SCUD), Community Service, Marketing and Business Development, and Financial Independence & Revitalization Effort (FIRE) grants, bringing the total awarded for the year to more than $75,200.

SCUD grants totaled $6,825 and were awarded to six credit unions. Purposes for the SCUD grants included computer hardware and software, equipment and upgrades, and other operational needs. The recipients were:
  • Alton Bell Community CU, Alton;
  • Gideon FCU, Waukegan;
  • IRSE CU, Springfield;
  • Taylorville (Ill.) School Employees CU;
  • Tazewell County Government Employees CU, Pekin; and
  • Waukegan (Ill.) Municipal Employees CU.
The foundation also awarded one $500 Community Service grant. Credit unions and chapters can qualify for grants by hosting, creating or volunteering at an established event. Landmark CU, Danville, will use its grant to initiate a backpack program.

Three credit unions received Marketing and Business Development grants that totaled $8,500. The recipients were:
  • Bensenville (Ill.) Community CU;
  • Sangamo Chapter CU, Springfield; and
  • Utility Employees CU, Decatur.
Established in 2006, the grants help credit unions with assets of up to $30 million to start or expand outreach efforts. The maximum grant award is $5,000 per credit union per year. Grants have financed website upgrades, new services and brand development.

Community Plus FCU, Rantoul, was a recipient of a FIRE grant. The FIRE Program provides assistance to credit unions so they can provide credit and financial services to residents and businesses in low-income and underserved areas of Illinois.

The credit union will use its grant to investigate leveraging a community development financial institutions award to potentially introduce a non-predatory auto loan alternative program in the community.

CUs, Banks Take Over Gas Pumps To Urge Local Banking

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AUSTIN, Texas (8/28/13)--Credit unions are always on the alert for ways to help their communities. Today and Thursday they will team up with community banks nationwide to pump $150,000 in free gas to raise awareness about how they fuel local economies, and also to encourage consumers to transfer their accounts from megabanks. 
 
Nearly 40 credit unions and community banks across the country will take over gas stations as part of the Take Back Your Banking initiative.

In partnership with Kasasa.com, a resource for free checking accounts with rewards at credit unions and community banks, the community financial institutions will showcase the benefits they offer consumers, including free reward-checking, superior member/customer service and nationwide ATM fee refunds with no minimum balance requirements to earn rewards or maintain accounts.

The Take Back Your Banking event will take place from 9 a.m. to 11 a.m. local time each day.
 
 Today's event will be in:
  • Dallas;
  • Atlanta;
  • Baltimore;
  • St. Louis;
  • La Crosse, Wis.;
  • Wellesley, Mass.;
  • Marietta, Ga.;
  • Glendale, Ariz.;
  • Worthington, Ohio;
  • Yarmouth, Maine;
  • Shreveport, La.;
  • Altoona, Pa.;
  • Mason, Mich.;
  • Greenville, S.C.;
  • Hackettstown, N.J.;
  • Kennett, Mo.;
  • Mankato, Minn.;
  • Evanston, Wyo.;
  • Mineola, Texas; and
  • Auburn, Hills, Mich.
Thursday's events will be in:
  • St. Paul, Minn.;
  • Portland, Ore.;
  • Chattanooga, Tenn.;
  • Council Bluffs, Iowa;
  • Baton Rouge, La.;
  • Worcester, Mass.;
  • Middletown, Conn.;
  • Suffolk, Va.;
  • Teays Valley, W.Va.;
  • Biddeford, Maine;
  • Warner Robins, Ga.;
  • Lubbock, Texas;
  • Benton, Ky.;
  • Colchester, Vt.;
  • Hiram, Ga.;
  • Green River, Wyo.;
  • Rock Springs, Wyo.; and
  • Quitman, Texas.

Sackett To Provide Volunteer Viewpoint At CUNA Board Meetings

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MADISON, Wis. (8/28/13)--John Sackett, chairman of the Credit Union National Association's Volunteer Leadership Committee, will participate in and bring the volunteer viewpoint to future CUNA Board meetings, CUNA announced Monday.

The move will ensure the volunteer viewpoint  is heard at the system's highest levels, CUNA said.

Sackett, treasurer of Royal CU in Eau Claire, Wis., will attend his first CUNA Board meeting in mid-September.

"Credit union volunteers play a critical goal in the success of the credit union system, and we must continue to find new ways to get them more engaged with CUNA," said CUNA President/CEO Bill Cheney. "We are grateful to have the benefit of Mr. Sackett's views, and I look forward to his participation in our meetings."

Sackett has been a member of RCU for more than 25 years and served 17 of those years as chairman. He was appointed chairman of the Volunteer Leadership Committee in January 2011. The CUNA Board created the committee to support volunteers and further increase their participation in CUNA.  The committee also is a strategic leadership resource for CUNA, providing staff with advice and guidance for enhanced volunteer-centered initiatives.

"We all know the incredible contributions that volunteers have made to the success of the movement--and how critical they are for our future," said CUNA Chairman Pat Wesenberg, who is also president/CEO of Central City CU, Marshfield, Wis.

"With the many challenges before credit unions today--particularly in reducing the regulatory burden, addressing the issues of small credit unions and preserving our tax exemption--this added voice to our board deliberations is most welcome," Wesenberg added.

Cornerstone Foundation Awarded $25,700 In 3Q Grants

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FARMERS BRANCH, Texas (8/28/13)--The Cornerstone Credit Union Foundation awarded $25,700 in grants during third quarter of 2013 in its mission to empower people to improve their financial well-being.  So far this year, it has awarded $141,068 in general grants and $14,750 in financial literacy grants.
 
The grants for third quarter include 11 general grants and three financial literacy grants (Leaguer Aug. 27).  Consumer CU Counseling Services (CCCS) of Greater San Antonio and RAISE Texas are among the recipients.
 
CCCS of Greater San Antonio is collaborating with several area credit unions--Firstmark CU, Generations FCU, Randolph-Brooks FCU, River City FCU, Security Service FCU and San  Antonio CU--to improve the financial well-being of low- and moderate-income families in that city.
 
CCCS and the credit unions will provide consumers with an action plan, guidance and support as they work toward financial goals such as reducing debt, improving credit, buying a home, creating a workable budget, saving money and improving their overall financial well-being.
 
The program will provide individual financial counseling in person, over the phone or through the Internet. Consumers choose a package with a predetermined number of sessions or receive month-by-month coaching. Depending on their needs, they can choose from:
  • Basic Financial Coaching;
  • Pre-purchase Housing Coaching;
  • Credit Analysis Coaching;
  • Debt Repayment Coaching; or
  • Life After Bankruptcy Coaching.
Families also will be required to attend group classes and webinars covering topics such as building a strong credit report, money management 101 and money management beyond the basics.
 
RAISE Texas' grant will fund expenses for its Asset Building Community Leadership Team Training and Planning Session in November, where asset building community leaders from diverse geographical areas will discuss and research asset building activities in communities across Texas, and discuss innovative grants and pilot projects through Opportunity Texas.
 
The training will benefit credit unions in two ways: By providing information the asset building leaders will take back to their credit union communities and by offering projects where credit unions play a key role in expanding these efforts and partnering with RAISE Texas and Opportunity Texas groups.
 
RAISE Texas is a network of non-profit organizations and institutions working to support and expand asset-building activities such as individual development accounts, free tax preparation and earned income tax credit sites, children's savings accounts, broad-based community financial education and developing alternative financial products.
 
Other third quarter grants from the foundation included three Junior Achievement grants, one chapter grant, and six training and conference scholarships for credit union staff and volunteers.
 
Such outreach projects help raise awareness of the value of credit unions to the community and to the member. Raising awareness is one of the components of the Credit Union National Association's and state leagues' Unite for Good campaign, which is working toward a strategic vision where Americans choose credit unions as their best financial institution.

Rep. Conyers Joins the Growing Ranks On CUs' Tax Status

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LANSING, Mich. (8/28/13)--U.S. Rep. John Conyers (D-Mich.) became the 12th out of 16 members of Michigan's congressional delegation to offer a statement of support for credit unions' tax status, reported the Michigan Credit Union League Tuesday.
 
He joins a growing number of lawmakers across the nation who are voicing support for credit unions during the tax code reform before Congress. Credit unions have been working in the congressional districts to send a clear message: Don't Tax My Credit Union.
 
"Credit unions provide a sound, reliable financial home for millions of Michiganders seeking access to credit and a place to build their future," Conyers said in his statement (Michigan Monitor Aug. 27).

"In addition to serving traditional borrowers, credit unions have been particularly successful at reaching out to underbanked individuals who are not served by the traditional commercial banking industry," he said.  "In light of this track record of success, I strongly believe that current tax policies that have allowed credit unions to thrive should remain in place."
 
League CEO David Adams noted that Conyers "has a longstanding and well-deserved reputation for standing up for people of modest means, for the unbanked and the underbanked. Credit unions excel at serving individuals and households of all income levels.

'The importance of Mr. Conyers' statement of support is that he reminds the public that credit unions serve an important niche that needs to be protected. Preserving the credit union tax-exempt status is one important means toward that end," Adams said.
 
The Credit Union National Association and state leagues and associations are urging credit unions and their members to contact their congressional representatives to urge them to preserve the exemption on corporate income taxes and to take advantage of the congressional recess to contact members of Congress while they are in their home districts.  (See related News Now story, CUNA: 13 Days Left For In-District Tax Talks With Lawmakers.)
 
The www.Don'tTaxMyCU website has more information about the national campaign and offers a way to contact members of Congress. For more details, use the links

Calif. CUs Report Fastest Rise In 2Q Loans Since 2007

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ONTARIO, Calif. (8/27/13)--Buoyed by an improving economy, lending at California's credit unions increased by 1.3% in the second quarter--the fastest second-quarter loan balance increase since the beginning of the recession in 2007, the California and Nevada Credit Union Leagues said. 
 
Automobile financing led the surge with a 7.8% first-half jump in new-vehicle loans and a 6.3% rise in used vehicle loans. Unsecured personal loans also grew by 1.8% in the first half.
 
"It's clear the reports of California's heating up weren't a flash in the pan," said Dwight Johnston, economist for the leagues. "This improved economic outlook is building consumer confidence with near-record increases in new loan applications for big-ticket items ranging from homes to cars."
 
The state's unemployment rate dipped to 8.5% at the end of 1012, which while still elevated, represents a decline of nearly a percentage point in the quarter and of 1.3 percentage points since the start of the year. Also, California home prices increased by 5% in the first quarter and by 17% in the year ending in March--the most recent data available for the Federal Housing Finance Agency purchase-only index.
 
Meanwhile, statewide personal bankruptcy filings declined by 26% in the first half compared to year-ago levels, according to the Administrative Office of U.S. District Courts. California credit union borrower-bankruptcy filings declined even faster--by nearly 31%--in the same time period.
 
Despite the increased spending, the report found Californians continued to save. Credit union savings balances grew 3% in the first half and by 3.2% in the year ending June 2013.
 
With historically low market interest rates, consumers continue to focus on building short-term liquid accounts. Highlights include:
  • The state's credit unions report regular savings account balances grew by 6.9% in the first half;
  • Checking account balances increased by 5.4%; and
  • Money market balances rose by 1.4%.
The leagues' report is compiled from credit unions representing 53% of all federally-insured credit unions that collectively serve 96% of the members and manage 98% of the assets reported by such institutions located statewide.

CU System Briefs

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  • ST. LOUIS, Mo. (8/27/13)--Columbia, Mo.-based Missouri CU has notified 39,000 members as well as former members to be alert to potential identity theft after a computer glitch resulted in the posting of member information on the credit union's website. Attorney General Chris Koster also advised members to be alert to potential fraud. The alerts explained that the information was posted for a short time this summer before it was discovered and removed by the $243.5 million asset credit union (St. Louis Business Online and Kansas City Star Aug. 26) ...
  • KNOXVILLE, Tenn. (8/27/13)--A man who claimed he had a bomb, presented a note to a teller at ORNL FCU and demanded money before fleeing with an undetermined amount. He left a box, which police determined was a hoax device (WATE.com Aug. 24).  The incident occurred Saturday at a branch of the Oak Ridge, Tenn.-based, $1.4 billion asset credit union ...
  • HATTIESBURG, Miss. (8/27/13)--Helen A. Fitzgerald, 56, a former teller at University of Southern Mississippi FCU, was sentenced to 10 years in prison--with eight years suspended--for the embezzlement of $60,300 from the Hattiesburg, Miss.-based credit union. Fitzgerald pleaded guilty on July 19 and was ordered to serve two years while the rest will be suspended on the successful completion of five years' probation. The embezzlements occurred between Oct. 31, 2011, and July 20, 2012. She also was ordered to pay $2,500 in fines, $8,800 in restitution to the credit union and $350 in special assessments for a victim compensation program and public defender fund (HattiesburgAmerican.com Aug. 24) ...

CUNA Mutual: Watch Out For Fake Car Dealers

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MADISON, Wis. (8/27/13)--Credit unions nationwide are warned of loan-fraud schemes involving fake independent car dealers located in Indiana and Florida, according to a CUNA Mutual Group Risk Alert for its bond policyholders.
 
Fraudsters recruit individuals to open accounts at credit unions under their real identities and apply for loans to purchase high-end vehicles from the fake car dealers. The individuals are paid for their efforts (The New Jersey Credit Union League's The Daily Exchange Aug. 22).
 
CUNA Mutual said credit unions should consider these risk mitigation steps when processing loan applications submitted by new members for the purchase of vehicles, especially high-end vehicles, from unknown independent car dealers:
  • Scrutinize loan applications, whether submitted online or in person, by new members for the purchase of high-end vehicles from unknown independent car dealers.
  • Compare employment information listed in the loan application and employment/income verification documents (such as paystubs) to the current employer listed in the credit reports. If there is a discrepancy, contact the employer using a reliable telephone number to verify employment.
  • In reviewing the credit reports, be alert for a large number of recent inquiries by other financial institutions.
  • Verify vehicle identification numbers (VINs) listed on the purchase orders by using websites such as carfax.com. Use the LexisNexis Motor Vehicle Registration service to verify vehicle registration records. The department of motor vehicles in some states may offer online VIN verification. Be alert for vehicles that changed ownership.
To view the alert, use the link.

CUNA's Women's Financial Survey Topic In MainStreet.com

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NEW YORK (8/27/13)--The Credit Union National Association's Women's Financial Survey led off a story Sunday on MainStreet.com about "The One Thing You Shouldn't Do When Investing for Retirement."
 
"While a new study disclosed that women's most important financial concern is saving for retirement, investors pulled almost $1.2 billion from U.S. equity exchange-traded funds since Friday Aug. 9, according to Bloomberg data," the article starts.
 
It reiterates some of the key findings of CUNA's survey and quotes Paul Gentile, CUNA executive vice president of strategic communications and engagement, analyzing these numbers:
  • 45% of women use 401(k)s, nearly 39% use pension plans and 40% own multiple retirement plans; and
  • 51.2% are not confident in their financial ability despite the fact that 38% of married female respondents manage the household finances and 46% co-manage them.
Gentile noted that the message is getting out there that time is one of the most important aspects of retirement savings and the sooner women start, the better.
 
The article also provided advice by multi-millionaire investor Vince Stanzione, who said women may miss out on potential returns if they aren't investing in the stock market. For the full article, use the link.

Social Media Use Puts CUNA On CU Thought-leader List

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CHATTANOOGA, Tenn.  (8/27/13)--Two Twitter feeds produced by the Credit Union National Association are among the "10 Twitter Feeds All Credit Unions Should Follow," according to SIGNiX, a global digital signature company.
 
CUNA's @CUNAadvocacy and @ASmarterChoice were among the 10 singled out by the Chattanooga, Tenn.-based company.
 
Of @CUNAadvocacy, SIGNiX said: "The Twitter feed for CUNA Advocacy takes on tough issues facing credit unions across the country. Most recently, they've started the movement behind #DontTaxMyCU, a campaign to influence Congress to maintain credit unions' tax status."
 
@ASmarterChoice refers to the website where consumers can go to find a credit union to join. The company noted that "this Twitter feed is a great resource on the benefits of banking at credit unions. The group posts articles comparing credit unions to large banks, which can be good resources for potential members who are on the fence about joining a credit union."
 
The company noted that "following the right people will help ensure that your feed is always full of helpful and interesting content. Plus re-tweeting influential posts can boost your social reputation." Twitter can be an invaluable tool to help attract new members and promote products and services, said SIGNiX.
 
See also @NewsNowLiveWire, another way CUNA innovates using social media.

Michigan Lawmaker Opposes Taxation, Says CUs Create Jobs

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LANSING, Mich. (8/27/13)--Another Michigan congressman--U.S. Rep. Dan Benishek (R-Mich.)--has issued a statement supporting credit unions' tax status, but he also went a step further, saying credit unions play an important role as job creators, said the Michigan Credit Union League.
 
"As a credit union member, I am opposed to efforts that would raise taxes on any small business--including credit unions," said Benishek (Michigan Monitor Aug. 26). "I will continue to work with my colleagues in the House of Representatives to support policies that reduce regulatory burdens and promote employment for all job creators--from credit unions to the small businesses in Northern Michigan that create and provide jobs."
 
The statement demonstrates the way credit unions contribute to the economy in the state and the nation, said MCUL CEO David Adams. The league asked Benishek for a statement regarding the credit union tax status "and he went one step further," Adams said.
 
"In addition to expressing clear support for the continued tax status, he reiterated his core values that align with credit unions' top legislative priorities: namely maintaining and improving the tax and regulatory climate so credit unions can provide more capital and services to the members and businesses that create and provide jobs," he added.
 
Other Michigan lawmakers who have stated their support of credit union's tax status include Democrats Sens. Debbie Sabenow and Carl Levin as well as U.S. Reps. Dan Kildee, Gary Peters, Sander Levin and John Dingell, all Democrats, and Republicans David Camp, Mike Rogers, Tim Walberg and Kerry Bentivolio.
 
They join other lawmakers from throughout the nation responding to the credit unions' national  Don't Tax My Credit Union Campaign, which is in full swing back in lawmakers' home districts during the legislative recess. For more information about the Credit Union National Association's and leagues' campaign, go to www.Don'tTaxMyCU.org or use the links.

Alloya Corporate CEO Bill Walby Resigns, Effective Sept. 15

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WARRENVILLE, Ill. (8/27/13)--Alloya Corporate FCU announced Monday that Bill Walby will resign as Alloya's CEO for personal reasons. His resignation will be effective Sept. 15.
 
"This was a difficult decision for me. The merger of Alloya and CenCorp operations is proceeding well, and we are beginning to see some of the anticipated benefits," said Walby. "Unfortunately, I also have some personal responsibilities that are difficult to address along with my responsibilities as Alloya CEO," he added.

Walby was CEO at Southfield, Mich.-based CenCorp before the merger process began (News Now March 14).
 
"Alloya's Board has regretfully accepted Bill's resignation," said Amy Sink, chair of Alloya's Board. "
 
She noted that the corporate's second quarter financials, released last week, "demonstrate that Alloya is on a sound footing. System and organizational integrations are on track, starting with the successful conversion of Michigan members to Premier View (Alloya's secure internet portal) on July 1. We understand Bill's decision, and wish him continued success."
 
The corporate's board has begun a search for a new CEO. "We are seeking a CEO to build upon the strong financial base and business model in place today. Alloya is capitalized and supported by approximately 20% of credit unions nationally," Sink said.
 
Todd Adams, Alloya senior vice president and president of Balance Sheet Solutions LLC, was named interim CEO, effective upon Walby's departure.

Michigan Leads In Fin. Ed Classroom Presentations

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LANSING, Mich. (8/27/13)--Michigan credit unions led the nation in financial education presentations made to students during the 2012-2013 school year with 2,181 classroom presentations, according to the National Youth Involvement Board.
 
Michigan-based credit unions were second in number of students reached with 44,945, the Michigan Credit Union League said (Michigan Monitor Aug. 26).
 
Individuals from Michigan recognized by NYIB included:
  • Ashley Buchholz from Wildfire CU, Saginaw, elected to the NYIB Executive Committee and will serve as the north central regional coordinator. Buchholz is a marketing specialist at Wildfire, where she specializes in services for young adults through engaging members with social media outlets, managing four student-run credit union branches and providing in-school presentations on financial education.
  • Natalie McLaughlin from Community Financial CU, Plymouth, awarded the NYIB Northern Regional Scholarship to the conference. McLaughlin is the senior education partnership coordinator at CFCU where she is responsible for coordinating 37 student-run credit union branches. She is also a longstanding member of the league's Financial Education Council.
  • Karen Alexander, education partnership coordinator at Community Financial CU, was recognized for giving the ninth most financial education presentations in the nation, with 206.
Also, 59 Michigan credit unions operated 375 student branches in state schools.

Fin. Planner: 'If You Don't Belong To a CU, You Should'

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BOULDER, Colo. (8/27/13)--Consumers should consider joining credit unions as an alternative to banks because credit unions were created in the public interest and are operated by members for their benefit, according to an op-ed by a Colorado financial planner.

"In spite of the local ownership, you still get the peace of mind that your funds won't disappear just as you do with a bank," wrote David Gardner, a certified financial planner with a practice in Boulder County, Colo., in the dailycamera.com (Aug. 25). "Instead the Federal Deposit Insurance Corp., which protects your bank deposits, you have the insurance of the National Credit Union Administration, which provides similar protection."

Gardner provides these other reasons to join a credit union:
  • Less likely to fee you to death. Many banks have reinstated and increased their fees amid a tepid economic recovery nationwide. Fees associated with checking accounts, in-person tellers, online banking, overdrafts and account statements all typically are higher at banks than at credit unions, he said, citing information from Consumer Reports.
  • Programs that target your community. Credit unions often offer programs that are tailored to the needs of local members. As an example, Elevations CU in Boulder, offers a special loan program with low fixed rates for home energy-efficiency improvements such as solar panels or more cost-effective appliances. Also, for students and others who need to establish or rebuild their credit, many credit unions offer free checking and credit card options.
  • Interest rates tend to be better. Generally speaking, consumers will find lower interest rates on loans and better terms at credit unions. Some local examples are Boulder Valley CU's 1.99% car loan, PenFed CU's innovative and low rate mortgages, or credit cards available from Elevations CU, he said.
To read the article, use the link.

ICUL's Title Insurance Funds Bill Signed Into Law

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NAPERVILLE, Ill. (8/27/13)--An Illinois Credit Union League-backed initiative, a bill amending the Illinois Title Insurance Act to authorize the use of a cashier's check, certified check or teller's check as settlement funds at real estate closings, was signed into law Aug. 16 by Illinois Gov. Pat Quinn.

"By creating a permissive option limited to cashier's checks, teller's checks and certified checks, HB 1335 tailors the focus of the 'good funds' provisions in the Title Insurance Act to reduce unnecessary costs to consumers, while maintaining key fraud prevention components within the existing law for the benefit of lenders and title insurance agencies," said Stephen Olson, ICUL executive vice president and general counsel.

The bill provides that when a financial institution and a title company are known to each other and agree, a cashier's check, certified check or teller's check will constitute legal settlement funds at a real estate closing.

The practice that had evolved since the "good funds" provisions of the Illinois Title Insurance Act were put in place in 2010 was to require consumers to use wired funds for settlement funds in amounts over $50,000. The requirement ensures that collected funds are available before disbursement by the title insurance agency handling the closing and reduces the potential for fraud.

However, wiring funds is much more costly for consumers than obtaining certified funds from their financial institution, the league said. HB 1335 addresses situations that can avoid the added expense upon mutual agreement by the lender and title company to use a teller's check, cashier's check or certified check for settlement funds greater than $50,000.

Also, the check must be delivered to the title insurance agency in time for it to be deposited into its fiduciary trust account before disbursement from that account--although it need not actually be deposited. That change to the Title Insurance Act is entirely permissive and, if used by the title company and lender, could reduce the consumer's costs in a real estate transaction, the league said.

Banker & Tradesman Announces CU Heroes

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MARLBOROUGH, Mass. (8/26/13)--Banker & Tradesman has named its 2013 Credit Union Heroes in Massachusetts--an award recognizing local credit union professionals who go above and beyond to better their institution and community, said the Massachusetts Credit Union League.

The award celebrates those individuals who have made outstanding contributions to the industry and the community and given freely of their time, energy and resources for volunteerism, community service and charity (E-Weekly Aug. 22).

Recipients will be honored at the 2013 Credit Union Heroes Awards dinner Sept.12 in Boston. Dawn Teixeira, executive director of Homes for Our Troops, will keynote.
 
The Massachusetts Credit Union Heroes are:
  • Ingrid Adade--financial education officer, Leominster (Mass.) CU;
  • Anne-Marie Bisson--vice president, financial education, Jeanne D'Arc CU, Lowell;
  • Robin Burns--corporate trainer, Sharon (Mass.) CU;
  • Catherine Goodall--vice president, controller, assistant treasurer, Workers' CU, Fitchburg;
  • Debra Hayward--vice president of lending, Pioneer Valley FCU, Springfield;
  • David A. L'Ecuyer--president/CEO, Central One FCU, Shrewsbury;

  • Michael Maestri--consumer loan manager, Metro CU, Chelsea;
  • Mariann O'Brien--assistant vice president, branch operations, Jeanne D'Arc CU;
  • Jon Reske--vice president of marketing and member outreach, UMassFive College FCU, Hadley;
  • Saritin Rizzuto--community relations and business developer officer, Metro CU;
  • Herb White--assistant vice president, business development, Workers' CU; and
  • Ray Wrobel--vice president, business development, Align CU, Lowell.

CU System Briefs

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  • WICHITA, Kan. (8/26/13)--Wichita, Kan., police gave chase early Thursday to a white Toyota Tacoma pickup truck whose driver may be a suspect in a rash of thefts at ATMs in the area, but the driver and truck got away. The truck was caught on security video footage at about 3:20 a.m. Thursday at an ATM. Police tried to stop the vehicle, but it sped off. And extended chase followed, but was eventually called off after the suspect drove erratically and plowed through a fence. The vehicle was also caught on the surveillance footage at an ATM 1:30 a.m. Wednesday at a branch of Meritrust CU, where an attempt to pry open that ATM was unsuccessful. ATMs were hauled off at two hotels recently, and an attempt to steal a local bank's ATM was unsuccessful. The truck sported a Kansas license plate, D435FF, said police (Wichita Eagle Aug. 22) ...
  • BISMARCK, N.D. (8/26/13)--The mailing address for the Credit Union Association of the Dakotas will change, effective Sept. 1, CUAD announced Friday. The association's new mailing  address will be 2005 North Kavaney Drive, Bismarck, ND 58501. It will no longer receive mail at its PO Box 7250 address (The Memo Aug. 23) ...

NEW: Alloya Corporate CEO Walby Resigns, Effective Sept. 15

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WARRENVILLE, Ill. (8/26/13, UPDATED 2:50 p.m. CT)--Alloya Corporate FCU announced Monday that Bill Walby will resign as Alloya's CEO for personal reasons. His resignation is effective Sept. 15, 2013. 
 
"This was a difficult decision for me. The merger of Alloya and CenCorp operations is proceeding well, and we are beginning to see some of the anticipated benefits," said Walby. "Unfortunately, I also have some personal responsibilities that are difficult to address along with my responsibilities as Alloya CEO," he added.
 
"Alloya's board has regretfully accepted Bill's resignation," said Amy Sink, chair of Alloya's board. "
 
She noted that the corporate's second quarter financials, released last week, "demonstrate that Alloya is on a sound footing. System and organizational integrations are on track, starting with the successful conversion of Michigan members to Premier View (Alloya's secure internet portal) on July 1. We understand Bill's decision, and wish him continued success."
 
The corporate's board has begun a search for a new CEO. "We are seeking a CEO to build upon the strong financial base and business model in place today. Alloya is capitalized and supported by approximately 20% of credit unions nationally," Sink said.
 
Todd Adams, Alloya senior vice president and president of Balance Sheet Solutions LLC, was named interim CEO, effective upon Walby's departure.

Hyland Begins First Day As NCUF Exec Director

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WASHINGTON (8/26/13)--Former National Credit Union Administration Board Member Gigi Hyland begins her new position today as executive director of the National Credit Union Foundation.
 
She will operate from NCUF's Washington office, located in the Credit Union National Association's Washington-D.C. office. Hyland succeeds Wendell "Bucky" Sebastian, who retired June 30.
 
Last month, Hyland told News Now (July 16) she is eager to leverage her relationships in the financial services, philanthropic and policy arenas to raise awareness about NCUF, its reach and its potential.
 
"The program successes--Biz Kid$, REAL Solutions, the DE (Development Educator) program, targeted grants and the April Financial Literacy campaign--have been tremendous, but three is so much potential to do more," she said.
 
Bill Cheney, CUNA president/CEO and NCUF president, noted Hyland's "extensive insights into the philosophy and mission of credit unions will serve the entire movement well in this position."
 
Hyland served on NCUA's board from 2005 until October 2012. Prior to that, she was senior vice president and general counsel of Empire Corporate FCU, which is now Members United Corporate FCU.

She also served as CUNA's vice president of Corporate Credit Union Relations and executive director of the Association of Corporate Credit Unions from 1997 to 2002.
 
For an example of how NCUF's programs help credit unions reach out to members, see related News Now Special Report: CU To Use Biz Kid$ Grant For Entrepreneurs Camp.

Illinois Gov. Signs League-backed ATM Disclosure Bill

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NAPERVILLE, Ill. (8/26/13)--Illinois Gov. Pat Quinn has signed HB 2432, which will make it clear that Illinois credit unions and other deployers of ATMs are no longer required to display a physical sign disclosing ATM terminal fees, according to the Illinois Credit Union League. Quinn signed the law on Aug. 16.

The legislation provides parity with federal requirements regarding ATM disclosure.  Previously, the federal Electronic Fund Transfer Act mandated that ATMs contain both a physical sign and an on-screen, electronic sign to notify consumers of fees imposed when conducting a transaction.

"Now that HB 2432 has been signed into law, parity with federal law and regulation will be retained," said Stephen Olson, ICUL executive vice president and general counsel. "This measure provides credit unions that deploy terminals with relief from the risk of frivolous and spurious litigation, without impairing a member's awareness of the fees assessed for using the ATM."

In December 2012, President Barack Obama signed federal legislation removing the requirement for the physical sign, keeping intact the requirement for electronic disclosure of fees and an opportunity for the cardholder to cancel the transaction before incurring any fees.

Outside notices on ATMs were being intentionally removed by unscrupulous persons, without the knowledge of the financial institutions deploying the terminals, said the league. Perpetrators would then take pictures of the vandalized machines and file suit against the financial institutions alleging they were not in compliance with applicable disclosure rules. The federal law, as amended, helps mitigate this frivolous lawsuit-risk factor, said the league.

HB 2432 contains language to mirror the changes made to federal law by deleting the duplicative requirement in the Illinois Electronic Fund Transfer Act for a physical sign disclosing fees on an ATM terminal. The amendatory language in HB 2432 was needed to clarify and ensure credit unions' right to remove the physical sign as a matter of state law, the league said.
 
The Credit Union National Association and state leagues strongly advocated an amendment to the federal Electronic Funds Transfer Act, and in March, the Consumer Financial Protection Bureau implemented a rule to eliminate redundant disclosures (News Now Aug. 2). Earlier this month, New York Gov. Andrew Cuomo signed a similar state law.

Calif./Nevada CUs Pledge 5% Of Members In 'Don't Tax' Campaign

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ONTARIO, Calif. (8/26/13)--The Summit Round Table--a body of the 50 largest California and Nevada Credit Union Leagues' member credit unions--has pledged to engage at least 5% of its credit union members in the national "Don't Tax My Credit Union" campaign.

The leagues seek to persuade credit union members to send letters to Congress through Connect For The Cause, a grassroots website.

"I'm impressed by the level of commitment of these credit unions to the 'Don't Tax My Credit Union' campaign and their pledge to persuade 5% of their membership to send letters to legislators," said Diana Dykstra, the leagues' president/CEO. "I encourage all other credit unions, no matter how small or large, to continue to spread the word to their membership on this important campaign to preserve our tax-exempt status."

So far this year, credit union members in California and Nevada have sent 145,000 letters to congressional legislators encouraging them to support the credit union movement's tax-exempt status. Nearly 100,000 of those contacts were sent through Connect for the Cause, said the league.

Don't Tax My Credit Union is the Credit Union National Association's and state leagues' campaign to raise awareness and urge Congress to keep the tax-exempt status. For more information, check the website www.donttaxmycreditunion.org.

CUs, Banks Engaged In 'Twitter Wars,' Say Publications

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WASHINGTON (8/26/13)--Two publications have taken note that credit unions and banks are engaged in a battle of tweets--dubbed "Twitter Wars"--over the effort to preserve credit unions' tax-exempt status.

"There is a serious kerfuffle going on in the Twitterverse between banks and credit unions," said an article in the Memphis Business Journal (Aug. 23).

"While most of the country is busy tweeting about Justin Bieber or Alex Rodriguez or the sandwich they just had, advocates for credit unions--specifically CUNA Advocacy (@CUNAadvocacy)--have been trolling advocates for banks--specifically ItsTime2Pay (@ItsTime2Pay)--and vice versa."

It points out that @CUNAAdvocacy is run by the Credit Union National Association while the @ItsTime2Pay is by the American Bankers Association.

The nationwide financial publication American Banker (Aug. 23) also reported that credit unions and banks "are squaring off on a social media front" over the exemption and bankers' challenges to it.

Both publications noted the fight is an old one and each provided examples of tweets sent Friday from each Twitter handle. "These things get a lot of retweets from bankers and credit union members," said the Memphis Business Journal.

Roughly 72% of all Americans who use the Internet also use social media, according to Pew Research center. However, that number rises to 90% for people ages 18 to 29 (HTRNews.com Aug. 22). Users of social media are typically more politically engaged than the general population, and use sites like Twitter or Facebook to follow politicians and discuss issues.

The HTRNews article, which centered on how Wisconsin lawmakers are using social media, quoted Albert May, professor of media and public affairs at George Washington University who has researched Congress and social media use, as saying  that "you would truly be horse-and-buggy if you didn't" use social media.

Use the links to access the articles.

Virginia CUs Teach 21,000 Students About Money

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RICHMOND, Va. (8/26/13)--Virginia-based credit unions reached 21,174 students during the 2012-2013 school year through 499 personal finance classroom presentations, according to the Virginia Credit Union League's Credit Unions Care Foundation.

The efforts of Virginia's credit unions were recognized recently by the National Youth Involvement Board (NYIB). Virginia credit unions captured sixth place nationally in number of students reached and seventh place nationally in the number of classroom presentations conducted.

NYIB collects financial education data each school year from the nation's credit unions, asking credit union employees and volunteers to report the number of personal finance presentations made to students, the specific topics covered, and the number of students reached during each presentation.

"Few decisions affect us more directly than the ones we make about our money," said UVA Community Credit Union's Rebecca Cardwell, chairwoman of the Credit Unions Care Foundation of Virginia's Financial Education Committee. "And as we've learned the past few years, financial illiteracy not only takes a terrible toll on the individual, it can also have a deep and lasting impact on our communities and society as a whole."

Virginia-based have reached 261,675 students with lessons on basic budgeting and money management since 1999.

 "Virginia's not-for-profit credit unions have a long history of educating consumers about money management basics," says Virginia Credit Union League President Rick Pillow, a member of the Credit Unions Care Foundation's board of directors. He noted many credit unions in Virginia, and nationwide that "are working together to share resources and best practices in ensuring our young people grow up to be financially savvy adults, capable of making informed decisions in managing their money."

Nationally, credit unions reached 400,000 students in 12,243 classroom presentations during the 2012-2013 school year, said NYIB.

Wisconsin CUs Raise $55,000+ For Children's Hospitals

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MADISON, Wis. (8/26/13)--Wisconsin credit unions and affiliated partners contributed more than $55,000 to the state's Children's Miracle Network Hospitals, it was announced recently at the Credit Union Center campus in Madison, Wis.
 
Click to view larger image Credit union industry runners and business partners gathered at CUNA Mutual Group in Madison, Wis., to announce that more than $55,000 had been raised for Wisconsin's Children's Miracle Network Hospitals. From left: SarahWainscott, Wisconsin Credit Union League;  Jason Milesko, Filene Research Institute; Mark Condon, Credit Union National Association; Tom Liebe, Wisconsin Credit Union League; Holly Fearing and Christopher Roe, CUNA Mutual Group; U.S. Sen. Tammy Baldwin (D-Wis.), honorary co-chair of the Credit Union Cherry Blossom Ten Mile Run; and Jennifer Norr, Sheila McNeal and Alastair Shore, CUNA Mutual Group. (Photo provided by CUNA Mutual Group)
The money was donated through the annual Credit Union Cherry Blossom Ten Mile Run in Washington, D.C. U.S. Sen. Tammy Baldwin (D-Wis.), an honorary co-chair of the race held in April, met with CUNA Mutual Group runners and others affiliated with the race at the Credit Union Center to share the fund-raising results.
 
Of the amount, one-third or $18,333 each went to Children's Hospital of Wisconsin in Milwaukee, the Gunderson Lutheran Medical Center and Marshfield's St. Joseph's Children's Hospital.
 
Credit Union Miracle Day (CUMD), title sponsor group for the race, has donated more than $6 million to Children's Miracle Network Hospitals since 2002. CUMD also sponsors the Credit Union SacTown Ten-Mile Run in Sacramento, Calif., and two Freedom Runs for troops overseas.
 
"Through CUMD, credit unions, their partners and runners all unite for good in order to support families in their time of need," said Christopher Roe, CUNA Mutual senior vice president and a former board member of CUMD. "While this race takes place in Washington, Senator Baldwin, as honorary co-chair, understands the funds raised from Wisconsin benefit local children's hospitals in the state."  CUNA Mutual Group is a national business partner of the cherry blossom run.
 
Other Wisconsin supporters contributing to CUMD through the race include the Credit Union National Association, Fiserv, Credit Union Executives Society and the National Credit Union Foundation.

Special Report: CU To Use Biz Kid$ Grant For Entrepreneurs Camp

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LANSING, Mich. (8/26/13)--While many kids attend recreational camps in the summer, CASE CU in Lansing, Mich., will use a Biz Kid$  Education Grant to fund a financial education and entrepreneurship camp for youth from low-income families, beginning in the summer of 2014.
 
Biz Kid$ is a financial literacy initiative of the National Credit Union Foundation that includes an award-winning TV series, free classroom curriculum, outreach activities, a website and a monthly online newsletter targeting children 9 to 16 years old.
 
The genesis for the idea of the camp began with Kara Peters, financial education coordinator with the $230 million asset credit union.
 
"In my capacity, I go out to schools and look for educational activities for K-12 students," Peters told News Now. "Part of my job is come up with innovative items for teaching kids. I was brainstorming for ideas to reach more kids and to get the community involved, and I came across Biz Kid$ grants in doing my research.
 
"The grant idea is to get kids to become entrepreneurs and help the community economically," she added. "And we at the credit union are stakeholders in that."
 
The impetus behind the camp is to have kids develop a sound financial foundation and gain business savvy and real-world skills to help them create their own business opportunities through entrepreneurship, Peters explained.
 
Peters is a certified teacher and will run classes at the camp, incorporating some Biz Kid$ episodes on money basics and entrepreneurship. The kids will work as a group to develop a complete business plan including marketing, income and expense plans. One teacher fellow from middle school or high school also is funded by the grant, and CASE CU staffers will help run the camp, she said.
 
Community business leaders, including CASE CEO Jeffery Benson, will mentor the youth and listen to them present their business plans at the conclusion of the camp.

Although the camp still is in the formulation stage, it will be held one time next summer for two weeks or less, and CASE CU hopes to have 22 to 30 kids participating. The Biz Kid$ grant is in the $3,000 to $5,000 range, Peters said.
 
In the Lansing area, 77% of the youth from the area's public schools qualify for free or reduced lunches, according to official statistics, Peters said. "They have a lot of challenges that come with lower socio-economic status," she added.
 
Because financial education is not mandated in Michigan's public school curriculum, credit unions have an opportunity, Peters said. "It is important to note that credit unions are uniquely positioned to fill a gap in personal financial education," she concluded.  
 
This article is part of a News Now series of exclusive, special reports on credit unions' outreach efforts and innovative ideas. Fostering service excellence, removing barriers and raising awareness about the value credit unions provide their members and communities are the foundation for the Credit Union National Association's, state credit union leagues' and credit unions' Unite For Good campaign toward a vision in which Americans choose credit unions as their best financial provider.

Equifax Blog Offers 'Nine Things To Know' About CUs

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ATLANTA (8/26/13)--The Credit Union National Association provided insight and information for a Equifax website blog, "Nine Things to Know About Banking at Credit Unions," written by nationally syndicated columnist and author Ilyce Glink.
 
Glink is the author of 10 books, including the bestseller 100 Questions Every First-Time Home Buyer Should Ask, and writes the nationally syndicated column, "Real Estate Matters."
 
The Aug. 23 article features Paul Gentile, CUNA's executive vice president of strategic communications and engagement, discussing how credit unions are different.
 
"Credit unions are very unique institutions because we're owned by our member-owners. What's different from a bank is that there are no shareholders at credit unions," he said. "That means the credit union doesn't have to try to drive high profits to raise shareholders value or to have a strong stock price.
 
"That's a power proposition today," he added. "At a credit union, the money goes back to the membership in better rates and lower fees."
 
The article outlines nine things consumers should know when opening an account at a credit union. In a nutshell, credit unions have:
  1. Lower fees and better interest rates;
  1. Membership requirements, but consumers can aSmarterChoice.org to find a credit union to join;
  1. Widespread access to no-surcharge ATMs through CO-OP ATM Network and CO-OP Shared Branching;
  1. Shared-branching so members can conduct business nationwide;
  1. Deposits insured by the National Credit Union Share Insurance Fund;
  1. Services that are tech-savvy--the first financial institution to offer online banking was a credit union;
  1. A full suite of products, including mortgages, checking, credit cards and certificates;
  1. Services for the underserved, including financial literacy workshops and credit counseling; and
  1. Limited options regarding sophisticated, higher-wealth investments, but services vary at credit unions.

National Mortgage Lending Conference Provides Takeaways

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DALLAS (8/23/13)--A record number of credit union attendees received mortgage lending takeaways at CU Members Mortgage's 16th annual National Lending Conference in Dallas, July 15-16.

The conference's theme was "Diving Deep: A Quest for Mortgage Success," with speakers and networking events to help attendees better prepare for an ever-changing mortgage market. Topics covered included the latest mortgage-related regulations, economic projections, underwriting red flags and Consumer Financial Protection Bureau (CFPB) servicing changes.

Here's a recap of some of the conference sessions:
  • CU Members Mortgage President David Motley's "Navigating the Latest Regulations." Motley focused on seven new CFPB rules that will go into effect within the next six months: Ability to Repay, Qualified Mortgage, Escrow Account, Appraisals and other Valuations, and Loan Originator Compensation. Most will impact credit unions' daily operations, which means credit unions should be making policy decisions now on how to implement the guidelines, Motley said.
  • Texas A&M University's Research Economist Dr. James P. Gaines' "Fishing for Answers: Economic Review and Projection. The economy has slowly recovered with home sales and construction, car sales and retail sales increasing, but uncertainty looms with health care costs in 2014, Gaines said. The economy is leaning more heavily on housing as the country emerges from its recession. He also discussed the Fed's exit strategy and why home prices are on the rise.
  • CU Member Mortgage Vice President of Direct Lending Matthew Abbink's "Secrets of Cs: Underwriting Red Flags that Sink Your Loans." Red flags that can sink a credit union's lending program include capacity (employment, debt-to-income ratio, income), cash (deposits, account ownership, verifications), collateral (1004/appraisal, property inspection, automated valuation models, business process outsourcing), credit ("thin" credit, disputed accounts, contingent liabilities, foreclosures, undisclosed debts), and character (experience, intuition).
  • CU Member Mortgage Senior Vice President of Loan Servicing Tim Neer's "Staying Afloat in the Servicing Abyss." Neer provided a CFPB update on the latest changes in servicing that will be effective Jan. 10. The changes cover servicing transfer notices and nine areas of servicing: periodic statements, interest-rate adjustment notices, prompt payment crediting and payoff statements, force-placed insurance, error resolution and information requests, general servicing policies and procedures, early intervention with delinquent consumers, continuity of contract with delinquent consumers, and loss mitigation procedures.
  • Ben Rogers, research director for Filene Research Institute, shared insight into changing a credit union's mortgage approach for a changing population.
  • Credit union executives also shared their best practices in mortgage lending in a panel. Senior Director of Consumer Lending Sales and Business Development Tim Johnson from Arizona FCU, Phoenix, shared his experience in launching a front-line incentive program, and how several key changes such as offering an online mortgage application helped his program soar.
  • Blaine Rada, CUNA Mutual Group Mortgage Insurance's customer training manager, discussed growing credit unions' purchase market with a focus on what it means to be a purchase market specialist.

CUNA Mutual's Smartphone Loan Technology Marks Milestone

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MADISON, Wis. (8/23/13)--CUNA Mutual Group's Smartphone Loan technology has reached a significant milestone, as credit union members have submitted more than $1 billion in total loan requests via their mobile devices in the two years since the platform was launched.

"Reaching this milestone demonstrates how loanliner.com, Smartphone Loans, and the new AskAuto Smartphone application work together to provide credit unions with a convenient way for their members to apply for loans when and where they desire," said CUNA Mutual Group Director of Loan Growth Products Steve Hoke.

CUNA Mutual Group noted it receives $2.4 million in loan requests each day through loanliner.com.

The Smartphone Loan technology allows credit union members to begin their loan applications on their phone from wherever they are. The technology is a mobile version of CUNA Mutual Group's loanliner.com product, which is used by more than 550 credit unions nationwide.

"Credit unions are expected to provide lending services through their members' preferred channel, and for a whole new generation, that channel is mobile," Hoke said. "We knew credit unions wanted to increase their loan volumes and attract younger members," said Hoke. "This Smartphone Loan technology accomplishes both, especially when combined with our AskAuto app."

AskAuto is a downloadable smartphone and tablet application that offers credit union members vehicle information and loan-application assistance to simplify their vehicle-buying experience.

Boards Benefit When Devil's Advocates Are Present

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MADISON, Wis. (8/23/13)--A decade after acquiring Gatorade's parent company and turning that brand into every athlete's must-have energy drink, Quaker CEO William Smithburg moved in on another drink surging in popularity: Snapple, according to an article in the August issue of the Credit Union National Association's Credit Union Directors Newsletter.

Despite a $1.8 billion bid and a lot of unanswered questions, Smithburg received the full support of his board of directors. Three brutal years later, Snapple was sold for $300,000 and Smithburg stepped down.

"We should have had a couple of people arguing the 'no' side of the evaluation," he said.
Organizations often suffer when devil's advocacy is in short supply, Chip and Dan Heath illustrate in  "Decisive: How to Make Better Choices in Life and Work."

"We want to avoid the momentary discomfort of being challenged, which is understandable, but surely it's preferable to the pain of walking blindly into a bad decision," the authors wrote.

Some organizations license skepticism by appointing individuals to the task. The best approach is to encourage the entire board to participate in what the authors characterize as "values-based opposition"--avoiding adversarial politics by disagreeing without being disagreeable--and to work as collaborators and analyze options objectively.

Become a better devil's advocate by following these guidelines, the authors advise:
  • Expand the options. Decisions require multiple options, not "yes" or "no" answers. Alarm bells should sound if you're asked "whether or not" to pursue a single alternative. Ask "What else could we do?" to generate other reasonable courses of action.
  • Consider the opposite. Channel the discussion toward objective reasoning by asking, "What would have to be true for this option to be the very best choice?" Roger Martin, dean of the Rotman School of Management at the University of Toronto, asked this question to defuse a tense negotiation over whether to close a historic copper mine in Upper Michigan. In the end, those who pressed for the mine to remain open conceded the numbers didn't add up.
  • Ask pointed questions. Because proponents naturally offer weighted arguments about an issue, it's your job to ask pointed but legitimate questions. The Heath brothers highlight one study that shows a seller wouldn't willingly disclose a major glitch in a used iPod unless directly asked what problems it had.
  • Bookend the future. Don't base decisions on a single forecast of a fixed outcome. Consider the full range of possibilities, from very bad to very good.
  • Honor your core priorities. By identifying and enshrining the tenets that guide your credit union, you make it easier to solve present and future dilemmas. Always ask, "What kind of organization do we want to build?"
For more information about Credit Union Directors Newsletter, use the link.
 

North And South Carolina CUs Vote To Consolidate Leagues

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COLUMBIA, S.C., and RALEIGH, N.C. (8/23/13)--Affiliated credit unions in North and South Carolina voted overwhelmingly to consolidate the South Carolina Credit Union League and North Carolina Credit Union League to create the Carolinas Credit Union League (CCU), which will begin operation on Jan. 1.
 
SCCUL members voted 43-2 in favor of consolidation, while NCCUL affiliates voted 52-2 in favor. The vote caps a thorough review process that commenced in December 2012.
 
"Both leagues are coming into this consolidation from positions of strength and view this as an opportunity to enhance delivery of core services to affiliated credit unions in the years to come," said Faye Crocker, current SCCUL chairwoman and incoming CCUL board member. "Creating the CCUL today ensures our league can be a vital part of the success of credit unions in the future."   
 
"Staff at both leagues will be focused on combining operations in the months ahead while delivering the services that credit unions value on an ongoing basis," said NCCUL chairman Maurice Smith.  "We're fortunate to have a gifted group of professionals working together to create this new enterprise. We think credit unions will be thrilled with the results of their work."
 
Current NCCUL President John Radebaugh will serve as president of the CCUL. Radebaugh and retiring SCCUL President/CEO Steve Fowler will lead staff through the transition in the months ahead.
 

'Don't Tax' Rallies, Meetings With Delegates In Full Swing

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MADISON, Wis. (8/23/13)--"
Click to view larger image Credit unions, guests and speakers attended a rally Thursday outside the headquarters of the Credit Union Association of New York in Albany to voice their support and raise awareness to preserve credit unions tax exemption.
Don't Tax My Credit Union" rallies and credit unions' meetings with congressional delegates in their home districts are in full swing this week on behalf of preserving credit unions' tax exempt status. The Credit Union National Association is encouraging credit unions to keep up the good work.
 
For example, an energized crowd of credit union leaders and members rallied Thursday morning outside the Credit Union Association of New York's headquarters in Albany to voice their support for the national "Don't Tax My Credit Union" campaign. The rally was part of CUANY's "Don't Tax My Credit Union Week," designed to raise awareness about the campaign and urge Congress to preserve credit unions' tax-exempt status.
 
Click to view larger image Credit Union Association of New York President/CEO Bill Mellin told attendees at a Don't Tax My Credit Union rally that eliminating credit unions' tax exempt status would result in a new tax on 96 million credit union members.
The rally attracted considerable media attention, with WRGB Ch. 6, WNYT CH. 13, WTEN Ch. 10, WGY-AM and The Times Union covering the event. (Use the link to view CBS Albany's coverage.)
 
"Credit unions are member-owned, not-for-profit financial cooperatives that return their earnings to their members in the form of lower rates on loans, higher interest on savings, enhanced service and little or no fees," CUANY President/CEO Bill Mellin told the group. "Elimination of the exemption would create a new tax on the 96 million credit union members nationwide and erase $6 billion to $10 billion in annual economic benefits."
 
Also speaking were Paula Stopera, president/CEO of CAP COM FCU; Curt Cecala, CEO of TCT FCU; Lucy Halstead, senior vice president/chief operations officer of First New York FCU; and Michael Tobler, president/CEO of Albany Firemen's FCU. 
 
Click to view larger image Don't Tax My Credit Union rally attendees in New York signed postcards asking Congress to keep the credit union tax-exempt status. Nearly 100 credit unions across New York participated in the postcard campaign coordinated by the Credit Union Association of New York (Photos provided by the Credit Union Association of New York)
Stopera and Halstead emphasized that the exemption allows credit unions to reinvest money back into their communities. CAP COM FCU will donate more than $200,000 to community and charitable initiatives this year, Stopera said.  Cecala and Tobler highlighted their credit unions' histories and emphasized that time and growth have not changed their fundamental mission of serving members.
 
John DeCelle, chief marketing officer at SEFCU, noted that grants, scholarships and other forms of charitable giving would come under scrutiny if the exemption were lost. "If we lose our exemption, we're going to have to take a look at our overall situation," he said. "There would be some type of change in how we operate."
 
Click to view larger image The New York rally grabbed the attention of media and tweeters alike, many sending photos such as this one.  Some of the tweets:  "What a great morning--Proud to be part of the NY#creditunion movement % share our message!#DontTaxMyCU pic.twitter.com/Y4X8710bDR" and "First round of #Don'tTaxMyCU rally pics are up on Facebook! on.fb.me/176Hutx @CAP_COM FCU@SEFCU @AlloyaCorp."
"I feel it is very important for the future survival of credit unions that our voices be heard concerning this issue," said Randy Martin, CEO of Dannemora FCU. "Without competition from credit unions, banks would have free reign with what they charge and the dividends they pay their customers to ensure large bonuses for their board members--leaving the unbanked without any options."
 
Other state activities:
  • The Missouri Credit Union Association was profiled in The Missouri Times (Aug. 18), with Amy McLard, senior vice president of advocacy, speaking to topics such as the credit union tax-exempt status, raising the member business lending cap and regulatory burden. "We have a national effort on hand going with Facebook, Twitter and websites to make sure lawmakers recognize the important role credit unions play in the financial landscape and how much we serve working families and why that's needed," McLard said.  "Because if credit unions would be taxed, it would be a tax on the people who use credit unions as well as other people who don't because we benefit consumers."  Use the link to read the article.
  • Pennsylvania credit unions have made about 25,000 contacts with their
    Click to view larger image More than 60 college students interned at CUNA Mutual Group this summer, working in various business unites that serve credit unions and the Madison, Wis.-based company. The group also got a lesson in CUNA Mutual's allegiance to credit unions by wearing  "I am 1 of 96 Million" T-shirts supporting credit unions' tax-exempt status. That support was part of CUNA Mutual's "Action Days," also observed by its full-time employees, hundreds of whom wrote letters urging Congress to "Don't Tax My Credit Union." (Photo provided by CUNA Mutual Group)
    congressional representatives since the Don't Tax My Credit Union campaign began in late May (Life is a Highway Aug. 22). The Pennsylvania Credit Union Association is encouraging credit unions to participate in a number of town hall meetings held by members of Congress during the legislative recess, including one today and several next Friday. PCUA provided a schedule of meetings for lawmakers and urged credit unions to visit the #DontTaxMyCU website and contact lawmakers.
  • Also see the related News Now story, Sen. Enzi, Two Congressmen State Support Of CUs' Tax Exempt Status, for successful results of meetings with lawmakers in Wyoming, Montana and Tennessee, who added their support of credit unions' tax exempt status.

MBLs At CUs Grew 45.1% In July

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MADISON, Wis. (8/23/13)--Member business loan (MBL) approval for credit union small-business loans rose in July for the first time in a year, according to a report by Biz2Credit, an independent commercial credit service.
 
Loan approval rose to 45.1% in July from 44.8% in June, the report indicated (creditunionsonline.com Aug. 19).
 
"We are beginning to see larger credit unions investing in Small Business Administration (SBA) loans," Biz2Credit CEO Rohit Arora said in a statement. "Possessing the license to carry out SBA loans is a huge advantage that the credit unions have over alternative lenders, and they are starting to promote this aggressively."
 
Credit union small-business loans have been crucial to small-business owners during the recession and moving forward from then, Mona Shand, public relations manager of marketing and communications for the Michigan Credit Union League and Affiliates, told creditunionsonline.com.
 
Metro CU, a $1 billion asset, Chelsea, Mass.-based credit union, reported its business loans are up 45% year over year, and $650 million asset Webster First CU in Worcester, Mass., saw an increase mostly in service sector startups applying for loans at the credit union, said the publication.     
 
The article also mentioned small-business loans provided to entrepreneurs by $700 million asset Credit Union of Southern California, Whittier, Calif., and Omni Community CU, a $304 million asset credit union, based in Battle Creek, Mich.
 
The Credit Union National Association and credit unions are pressing Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.
 

CUs' Secret Weapon For Transitions: Evolutionaries

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PLANO, Texas (8/23/13)--Credit unions need "evolutionaries" to lead their organizations during times of transitions, says Randy Harrington, CEO of Extreme Arts and Sciences, an Oregon-based financial industry consulting firm. He will be opening speaker at Catalyst Corporate FCU's Economic Forum, Oct. 22-23 in Frisco, Texas.

"You need evolutionaries to help you lead your organization in times of transition," Harrington said. "They are the secret weapon of organizations that transform quickly. They are able to adapt and innovate and rise to any challenge, no matter how unexpected."

Credit unions are often faced with tensions that pull on opposite ends of logic, such as, providing warm and personal member service while being efficient. There is no single answer to the perplexing challenges; however, evolutionaries can help develop effective strategies that fit each credit union, he said.

Evolutionaries are emotionally committed to the cause they pursue, Harrington said. "They are comfortable with who they are, they know why they do what they do," he added. "They have committed a piece of themselves to their work and are willing to tie their hearts, as well as their minds, to the outcomes of their teams and organizations."

In his book, "Evolutionaries: The Missing Link in Your Organizational Chart," Harrington explains how to identify and engage staff so they can most effectively contribute to the credit union's success. The book, co-authored with Carmen Voilleque, weaves together a series of exercises with insights from "evolutionaries" Harrington has encountered in his business-consulting practice.

Harrington emphasizes the need for leaders to lead with strategic intent.  "Task saturation does not allow for you to look down the road," Harrington said. "You'll lose the ability to be strategic if all you do is do."

League Asks CUs For Videos About Biz, Community Loans

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LANSING, Mich. (8/23/13)--The Michigan Credit Union League and the Michigan Business Connection (MBC), a credit union service organization that offers business services, are asking state credit unions to submit videos showcasing the positive impact they have made on local businesses or causes.

Michigan's credit unions have loaned more than $1 billion to local businesses and donated more than $10.5 million to community causes, as of 2012, said the league.

The league promotes the initiative with a video that offers tips and ideas credit unions can use to make simple videos promoting their business lending projects. To view the video, use the link.

As credit unions work to create their visual story, MBC is also planning its second annual CU Lunch Local event for Oct. 15. Last year, more than 51 credit unions "cash-mobbed" local businesses to demonstrate the greater power of a dollar spent at a small business.

Credit unions maintain they can do more for small businesses if the cap on their member business loans were lifted to 27.5% of total assets from 12.25%. The Credit Union National Association has estimated that lifting the MBL cap would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.

Canepa Bang To Receive Wegner Award For Individual Achievement

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MADISON, Wis. (8/23/13)--The National Credit Union Foundation announced Sarah Canepa Bang, president of CO-OP Shared Branching-FSCC LLC and chief strategy officer of CO-OP Shared Branching, will be presented the 2014 Herb Wegner Memorial Award for Individual Achievement.

This will be one of four Herb Wegner Memorial Awards presented at a special dinner hosted by NCUF at the Grand Hyatt Washington on Feb. 24 at the Credit Union National Association's 2014 Governmental Affairs Conference.

Canepa Bang started her career at CUNA's Internet office in 1983. During the 1980s, she served as education director at what was then the Oregon Credit Union League and as vice president of human resources at the Massachusetts Credit Union League.

She returned to the Oregon league as executive vice president in 1990 and launched a number of high-visibility programs and served as chief operating officer of CU Access, an ATM and shared branching network which the league operated, and Automated Item Management, the Northwest's largest check-processing operation.

In 1995, Canepa Bang established a two-year associate degree program in credit union management through Mt. Hood Community College. She also initiated Loans Today, one of the first 24/7 lending call centers in the nation, created to enhance a credit union's ability to process member loan requests via telephone.

Canepa Bang was named CEO of FSCC in 1999. Under her leadership, FSCC more than quadrupled in the number of credit unions, branches and states involved in shared branching.

FSCC was the first network to pioneer the outlet concept in shared branching. During Canepa Bang's tenure, it expanded the technology to include full-service kiosks, mobile banking, call centers, disaster recovery and remote deposit capture. In 2007, FSCC implemented shared branching services on more than 2,200 Vcom kiosks inside select 7-Eleven stores.

Canepa Bang is a longtime supporter of the Credit Unions for Kids (CU4Kids) program and was one of the key founders of the program while at the Oregon league. She also helped Children's Miracle Network Hospitals to pick up the CU4Kids program and as a national program in 1997.

In 2011, the World Council of Credit Unions named her one of its top seven people who make a difference in supporting World Council.

CU System Briefs (08/22/2013)

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  • EWING, N.J. (8/22/13)--The Credit Union of New Jersey, based in Ewing, introduced the CUNJ Foundation, its new nonprofit charitable foundation, to the community with a reception Tuesday night, reported the New Jersey Credit Union League (The Daily Exchange Aug. 21). Ewing Township Mayor Bert Steinmann said businesses such as CUNJ that are in touch with the community they serve are good for the growth and prosperity of the township.  One beneficiary of the CUNJ Foundation is Anchor House, a multi-service agency for runaway, homeless, abused and at-risk youth and their families.  Also represented at the event was Mid Jersey Chamber of Commerce. Pictured is CUNJ President/CEO Andy Jaeger, who is also chairman of the foundation. (Photo provided by the New Jersey Credit Union League) ...
  • WICHITA, Kan. (8/22/13)--CU of America, a $502.1 million asset credit union based in Wichita, Kan., has agreed to a two-year commitment to support the area's annual professional golf tournament, Air Capital Classic. It has agreed to become an Air Capital Classic Ambassador. Details of the commitment were not disclosed. The credit union said the tournament is a first-class event that brings much to the local economy and that CUA wants the classic to stay in Wichita (Wichita Eagle Aug. 20) ...

NEW: North And South Carolina Leagues Vote To Consolidate

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COLUMBIA, S.C. and RALEIGH, N.C. (8/22/13 UPDATED 2:30 p.m. ET)--Affiliated credit unions in North and South Carolina voted overwhelmingly to consolidate the South Carolina Credit Union League and North Carolina Credit Union League to create the Carolinas Credit Union League (CCUL), which will begin operation on Jan. 1.
 
SCCUL members voted 43-2 in favor of consolidation, while NCCUL affiliates voted 52-2 in favor. The vote caps a thorough review process that commenced in December 2012.
 
"Both leagues are coming into this consolidation from positions of strength and view this as an opportunity to enhance delivery of core services to affiliated credit unions in the years to come," said Faye Crocker, current SCCUL chairwoman and incoming CCUL board member. "Creating the CCUL today ensures our league can be a vital part of the success of credit unions in the future."   
 
"Staff at both leagues will be focused on combining operations in the months ahead while delivering the services that credit unions value on an ongoing basis," said NCCUL chairman Maurice Smith.  "We're fortunate to have a gifted group of professionals working together to create this new enterprise. We think credit unions will be thrilled with the results of their work."
 
Current NCCUL President John Radebaugh will serve as president of the CCUL. Radebaugh and retiring SCCUL President/CEO Steve Fowler will lead staff through the transition in the months ahead.

Bankrate Debunks Four Myths About CUs

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NEW YORK (8/22/13)--Credit unions offer fewer and smaller fees for financial services than large banks, says Bankrate.com, which also noted there are some prevalent myths about credit unions that are not true.
 
Of credit unions surveyed in Bankrate's 2013 Checking Survey, 72% offer checking accounts with no monthly fee. Credit unions also charge smaller fees for using out-of-network ATMs and for overdrafts, Bankrate.com said on its website.
 
However, some consumers remain reluctant to choose credit unions because of myths about credit unions' convenience and locations.
 
Bankrate dispelled these myths about credit unions:
  • Credit unions don't have enough ATMs. Although individual credit unions may operate only one or two ATMs, most offer access to a broad ATM network with other credit unions--the CO-OP ATM Network. That network comprises nearly 30,000 ATMs nationwide, including more than 9,000 that take deposits. National retailers such as Costco, 7-Eleven and Walgreens have arrangements with the network to keep terminals inside their stores.
  • Credit unions are technologically behind. Many credit unions don't have the technology budgets to be at the forefront of each new technological innovation, but that doesn't mean they're behind the times, Ted Thames, senior director at Cornerstone Advisors, a financial industry consulting firm based in Scottsdale, Ariz., told Bankrate. Many credit unions offer a technology package to members similar to that of large banks by using off-the-shelf products from financial software providers, he added.
  • Credit unions don't have convenient branches. One of the most important criteria for many people when choosing a financial institution is having a nearby branch. That's traditionally been seen as a limitation for the many individual credit unions with few branches. One credit union shared-branch network, Credit Union Service Centers Network, has more than 5,000 branches nationwide and a 24-hour customer service call center. "Due to their cooperative nature, many [credit unions] have shared-branching capabilities so that consumers can use a branch of another participating credit union for deposits and withdrawals, just as they would their own," said Greg McBride, CFA Bankrate's senior financial analyst.
  • Credit unions don't hit you with penalties. Credit unions may be consumer-friendly, but credit union members who overdraw their accounts, constantly make out-of-network ATM withdrawals and do other things to trigger fees will pay for it, McBride said. "Overdrawing your checking account will cost you anywhere, regardless of bank or credit union," he added. "Credit unions are nonprofit cooperatives, but nonprofit doesn't mean they run at a loss. They must cover their costs, so while ancillary fees are less likely, it doesn't mean you are completely immune from any and all fees."

NYIB: CUs Educated 400,097 Students In 2012-13 School Year

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TAMPA, Fla. (8/22/13)--Credit union financial educators reached 400,097 students in 12,243 classrooms presentations during the 2012 school year, according to the National Youth Involvement Board.

The totals are decrease in both the number of students reached and the number of presentations from 2011-2012; however, fewer presenters reported, which means that the average number of presentations and students reached per presenter increased.
 
NYIB also noted these highlights:
  • Arissa Arthenayake of OSU FCU, Corvallis, Ore., conducted the most classroom presentations (607).
  • Michigan was the state with the most presentations with 2,181.
  • Juli Lewis of Suncoast Schools FCU, Tampa, Fla., reached the most students (11,408) in the 2012-2013 reporting year.
  • As a state, North Carolina reached the most students (56,308).
In addition, NYIB recognized credit unions that report financial literacy presentations as a group. State Employees' CU, Raleigh, N.C., reached the most students--55,662--and also made the most presentations--815.
 
Credit unions can report their presentations at NYIB's website. Use the link.

CU Websites Outshine Banks' On Providing Info

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LAKE BLUFF, Ill. (8/22/13)--Credit unions outshine banks in providing the information consumers seek on their websites, according to a new study. However, financial institutions in general can make better use of their sites as a tool for compliance, resource use and new business.

The survey of the websites of 1,676 credit unions, banks and thrifts with more than $500 million in assets was conducted in June by Lake Bluff, Ill.-based Moebs $ervices. It found that in their quest to implement the Dodd-Frank Act properly, financial institutions either overlooked or underused their website as a key tool.

Of the institutions studied, 32% offered the information consumers sought on their websites, and 83.7% of the websites provided answers that were consistent with those given through their call centers, said the firm.

Roughly 40% of credit unions provided the data that website visitors sought, according to the study. That compares with 33% of thrifts and 28% of banks surveyed.  Credit unions beat thrifts on providing consistent data, with 83.9% of credit unions doing so, compared with 83.5% of thrifts and 84.3% of banks.  Larger institutions in the study provided more data and more consistent data.

Moebs $ervices noted two key findings: Websites are underused as a source of information for member/customers, and procedures to ensure consistent information, regardless of channel, need to be in place to reduce pressure on call center and branch staff to provide data a consumer seeks.

The results point out an opportunity for financial institutions, said Michael Moebs, economist and CEO of the firm. "Websites can be enhanced to provide more data and more consistent information for consumers, which can: reduce compliance risk, promote greater efficiency of call center and branch personnel, and foster more sales," he said.

CU's Survey: Teens Frugal In Preparing For College

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EAST WINDSOR, N.J. (8/22/13)--Today's teens are a frugal generation--especially in college preparations, according to a new study conducted by McGraw-Hill FCU in East Windsor, N.J.

Nearly 70% of teens surveyed expect to cover part of the cost of college, and 60% say they have a plan for college expenses.

Rather than spending wastefully or expecting parents to cover their day-to-day costs, one in 20 teens say they use a credit card. For nearly 60%, however, cash is a primary payment method, followed by debit cards at 36%, the survey indicated.

The recent recession may have influenced the attitudes and behaviors of those surveyed, said McGraw-Hill President/CEO Shawn Gilfedder.

"Today's young consumers have an awareness of student loans and higher education costs," Gilfedder noted. "We're seeing heightened financial self-responsibility, which is not the same as financial literacy. As young consumers pursue higher education and careers, there needs to be an increased focus on financial preparedness at home and in the classroom."   

The national survey, conducted by C&R Research with 305 teens aged 17 and 18, also concluded:
  • Teens appear to be credit conscious. Of those with a credit card, 69% say they always pay the balance in full.
  • Over half use credit responsibly. Under 2% pay less than the minimum payment and/or go over their credit limit.
  • Tuition costs factored significantly in college selection, according to 53% of those queried.
  • Most (60%) have established a spend plan (budget) for their college expenses.
  • A majority (55%) took the initiative and established the spend plan themselves.
  • Half will be financially responsible for their books, and about a third for tuition, room and board, and/or a meal plan.
Earlier this year, the Credit Union National Association's High School Student Borrowing Survey found half of high school seniors have no idea what college will cost (News Now April 29).

A recap the CUNA survey's key findings shows:
  • 83% of students surveyed did not know the rates, and 77% didn't know the duration of their expected or existing college loans;
  • 74% of those aspiring to attend college said they will need a combination of federal and private loans, family money and jobs to support their tuition; and
  • 25% expect to take out two or more student loans; 13%, one loan; and 60% could not estimate how many they would need.

A 'Dog Days' Story: Missouri Central Saves the Dog

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LEE'S SUMMIT, Mo. (8/22/13)--Here's a story for the Dog Days of Summer. It involves a credit union dedicated not only to the well-being of its members, but also to a member's pooch.
 
Caryn McManus, a member of Lee's Summit, Mo.-based Missouri Central CU for 12 years, took her yellow lab-mix, Winchester--alias "Chester"--to the vet in April for routine teeth cleaning.  On Chester's gums, the vet found a lump, which a biopsy revealed was a cancer that grows on the bone (The Missouri Difference Aug. 19).
 
McManus took Chester to a specialist in Kansas, who said the cancer was caught early but Chester would get very sick. If not removed, the cancer would be fatal. The surgery would cost about $2,500 and require removing the cancer and several teeth.
 
"Even though my head told me I was crazy to spend that kind of money on a dog," McManus told the Missouri Credit Union Association, "my heart told me if there was a chance to save Chester, I had to do something."
 
Her husband suggested taking a loan out against their car.  She called MCCU and talked with Member Service Representative Becky Socha. The loan would be no problem and Socha started the paperwork.
 
On May 17, Chester underwent surgery and two weeks later, he was declared cancer-free. "My beautiful blonde dog is happy and healthy," said McManus. "He doesn't even notice his four missing teeth."
 
McManus said she was extremely grateful to MCCU, the vet hospital and the vet who caught the cancer early.  Thanks to them, her friend has many more years ahead.

State Regulator Warns Of Collections Scam From Internet

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MADISON, Wis. (8/22/13)--Wisconsin consumers should be on the alert for phone calls from unscrupulous debt collectors, the Wisconsin Department of Financial Institutions (DFI) warned Wednesday.

Callers will often state they are attempting to serve a summons and if consumers do not "act immediately," they will be arrested. The callers do not represent law enforcement and any threats of arrest or jail are bogus, the DFI said.

Credit unions may want to alert their members about the scams and be prepared to share advice on handling such calls.

DFI's Bureau of Consumer Affairs receives several phone calls per day regarding these types of complaints. Since Jan. 1, it has fielded more than 100 written complaints.

"In many cases, we suspect that consumers may have applied for or obtained loans on the internet or, at the very least, may have entered their personal information into an Internet application," said

Paul Egide, DFI director of the bureau of consumer affairs. "That information is then fraudulently obtained by the perpetrators, who target consumers for collection of debt the consumers do not owe, or at least do not owe the debt to the company that is calling."

In other cases, companies that have purchased the accounts and have a legitimate right to collect a debt may also be engaging in illegal collection practices, Egide said. Debt collectors that "own" consumer credit accounts for purposes of direct collection are required to register with DFI.

Credit unions can share these tips offered by DFI to consumers targeted by callers:
  • Ask for verification that the debt is owed. Collectors are required by law to provide such documentation or discontinue collection activities. They also are required to provide written evidence of their identity and where they are located.
  • Do not provide a caller with any personal identification or payment information.
  • Do not purchase money cards or money orders to pay the alleged debt.
  • If calls are received at work, speak with your employer to come up with a plan on how to handle the calls.

Cornerstone League Announces State CUNA Award Winners

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FARMERS BRANCH, Texas (8/22/13)--The Cornerstone Credit Union League recognized 12 credit unions for outstanding commitments to their communities, their institutional well-being and their interest in cultivating youth and adult financial literacy. 

Twelve credit union placed first in the Dora Maxwell Social Responsibility Community Service Award, Louise Herring Philosophy in Action Member Service Award and the Desjardins Youth and Adult Financial Education Award programs (Leaguer Aug. 21).

First-place winners in the Desjardins Youth Financial Education Award category included:
  • Education CU, Amarillo, Texas, $150 million to $500 million in assets;
  • Security Service FCU, San Antonio, more than $500 million in assets; and
  • Tinker FCU, Oklahoma City, Okla., more than $500 million in assets.

First-place winners in the Desjardins Adult Financial Education Award category included:
  • FivePoint FCU, Nederland, Texas, $150 million to $500 million in assets; and
  • Tinker FCU, more than $500 million in assets.

First-place winners in the Dora Maxwell Award category included:
  • Tinker FCU, $1 billion-plus in assets;
  • DATCU, Denton, Texas, $500 million to $1 billion in assets;
  • Abilene (Texas) Teachers FCU, $200 million to $500 million in assets;
  • First Family FCU, Henryetta, Okla, $20 million to $50 million in assets; and
  • Western Sun FCU, Broken Arrow, Okla., $100 to $200 million in assets.

First-place winners in the Louise Herring Award category included:
  • Family First FCU, less than $50 million in assets; and
  • Tinker FCU, $1 billion-plus in assets.
Each first-place winner's entry progresses to the Credit Union National Association's national award competition. The winners are honored at the 2014 CUNA Government Affairs Conference in Washington, D.C.

Pinterest Leveraged For BECU's Home Loan Campaign

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TUKWILA, Wash. (8/21/13)--Pinboard photo-sharing site Pinterest played a major role in Tukwila, Wash.-based BECU's three-month "Project Home" campaign to promote home equity lines of credit and no-equity home improvement loans.
 
Each month, the $11 billion asset BECU's campaign focused on different home improvement topics (National Mortgage News Aug. 19). Pinterest was one component, along with BECU's newsletter, website and social media outlets. A news center on Wordpress acted as a content hub. BECU used the hashtag #BECUProjectHome to link the campaign to its other social media channels.
 
On Pinterest, the credit union challenged members to submit five photos of an ugly room in their house for a chance to win $500 to help with the do-it-yourself project. The goal was to get members to think about how to improve a room and then how to finance the project, the article said.
 
The promotion resulted in 565 new transactions, including new loan products and new transactions on existing loan product, Because Pinterest was only part of the campaign, it is not clear what loans it alone brought in.
 
However, Pinterest drew as much as five times the response rate as the other campaign elements did, said BECU. While other Project Home articles brought 1,500 to 2,000 clicks, the Pinterest contest drove 7,500 clicks from BECU's March newsletter alone. BECU's Pinterest followers increased by 183% to 500 followers.
 
In tracking the clicks in the campaign, BECU found many who clicked on Pininterest also explored BECU's other Pinterest boards on topics such as saving money and retirement tips.
 
The credit union gave this advice for other credit unions wanting to try something similar:
  • Tailor the campaign to the site, instead of fitting the site to the campaign.
  • On social networks, join the conversation instead of directing it. Talk about homes, rather than just about products.

Youth Week 2014 Seeking a Theme

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MADISON, Wis. (8/21/13)--The Credit Union National Association is asking credit unions  nationwide to help it choose a theme for National Credit Union Youth Week 2014.
 
The week, April 20-26, is CUNA's official designation of an annual, national celebration for credit unions that support youth financial literacy all year long. It's an opportunity to formally acknowledge young members and encourage them to start and maintain a saving habit.
 
Credit unions with ideas for the theme should reply by Aug. 28. The top themes will be voted on in early September. To send a youth week theme, e-mail YWCoordinator@cuna.coop.
 
Themes from past years include:
  • 2013--Savings Sleuth, Solve the Mystery (detective/mustache)
  • 2012--Be a Credit Union Super Saver (superhero)
  • 2011--Money Rocks at My Credit Union (music)
  • 2010--Get in the Saving Game (sports)
  • 2009--The Magic of Saving (magic)
  • 2008--Got Green? Grow it at your credit union (environment)
  • 2007--Stash your cash at the credit union (pirates)
  • 2006--My Money. My credit union
  • 2005--Want it? Save it. Get it.
  • 2004--Youth Make a Difference
  • 2003--Youth Count at Credit Unions
  • 2002--Your future. Your money. Your choice.
April is National Financial Literacy Month, and CUNA's National Youth Saving Challenge will again run the entire month. Credit unions can participate in the challenge either during youth week or during the entire month.

TransUnion: Auto Loan Delinquency Rate Flat, Debt Grows

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CHICAGO (8/21/13)--The rate of U.S. auto delinquencies--the percentage of accounts 60 or more days past due--during second quarter remained flat at 0.80%, compared with 0.79% for that quarter a year earlier, according to data from TransUnion's Industry Insights Report.
 
The delinquency rate for second quarter is an eight-basis-point drop from 0.88% in first quarter, said the Chicago-based credit and information firm. The report is a quarterly overview of data, trends and perspectives on consumer lending in the U.S.
 
Average auto loan balances rose 4.3% to $13,435, from $12,875 during second quarter 2012.  The increase from first quarter to second quarter 2013 was 1.3%. Michigan was the only state that did not experience an increase in balances.
 
"It's encouraging to see consumers take on more auto debt while delinquencies remain low," said Peter Turek, TransUnion vice president of automotive. "Consumers clearly are more confident in managing additional debt."
 
Although the debt of subprime borrowers increased more than 7% the past year, delinquency levels for this group remained roughly the same--at 5.02% for second quarter 2013 compared with 4.94% in the same quarter a year earlier. Subprime borrowers still account for about 14.9% of all new accounts.
 
"This is a positive sign since increased balances for the subprime group indicate that they are receiving new loans," Turek said. "The fact that the increase in delinquencies is only a minor one is especially important, as we often find that borrowers who have problems making payments do so within the first year of the loan."
 
Total auto account volumes rose 4% in the past year to $58.23 million for second quarter 2013, compared with $55.98 million in second quarter of 2012.  "We expected to see volumes rise in line with overall auto sales and other demand drivers, like replacement of older vehicles and improving employment numbers," said Turek.
 
Highest auto loan delinquency states for second quarter were Oklahoma with 1.53%, Mississippi with 1.46%, Louisiana with 1.35% and Alabama with 1.27%. North Dakota had the lowest delinquency rate, at 0.43%, followed by Minnesota and Vermont at 0.49% each, and Washington with 0.52%.

Global Fraud Losses Top $11.27B

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CARPINTERIA, Calif. (8/21/13)--Of the $21.604 trillion in purchases by all payments cards in the world in 2012, more than $11.27 billion was lost by issuers, merchants and acquirers due to fraud, says the Nilson Report. That is an increase in fraud of 14.6% over 2011.
 
The Carpinteria, Calif.-based publication pointed out, however, that the percentage of fraud remains near the historical low.  Although the percentage of fraud to total volume has increased the past two years, the increases come after an eight-year period where fraud percentages were flat.
 
Losses at card issuers--including credit unions and banks--made up 63% of the losses, with merchants and acquirers losing 37%, said Nilson. Card-issuer losses occurred mainly at the point of sale through counterfeit cards. Merchant and acquirer losses occurred mostly from card-not-present transactions on the Web, at a call center or through mail order because issuers can charge back fraudulent transactions.
 
Gross losses totaled 5.22 cents for every $100 in volume--up from 5.07 cents per $100 in 2011. PIN-based debit cards saw the lowest percentage of fraud, with 1.10 cents per $100 in volume. Global brands such as Visa and MasterCard averaged 6.13 cents lost per $100.
 
In the U.S., losses on all general purpose and private label, signature or PIN payment cards totaled $5.33 billion last year, up 14.5%. Issuers lost 64% or $3.41 billion, and merchants lost 36% or $1.92 billion. The U.S. accounted for 47.3% of the global card losses but generated only 23.5% of the total card purchase volume.
 
The U.S. has the lowest amount of cash as a percentage of total volume than all other regions except Canada, said the report. Cash withdrawals, protected by PINs, have lower losses, and when the fraud at an ATM is "on-us," the theft isn't reported to any network.
 
The absence of EuroMasterCardVisa (EMV) cards and terminals in the nation contributed to the U.S. losses, said Nilson.

For the record. total card volume was up 11.4% from 2011 for credit, debit and prepaid general purpose and private label payment cards.  Totals by card companies included: Visa with $537.27 billion, American Express with $309.70 billion, MasterCard with $280.82 billion, and Discover with $64.69 billion.

For the full report, use the link.

Security Service FCU Ranks Fifth In U.S. On Dealer Satisfaction

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SAN ANTONIO (8/21/13)--San Antonio-based Security Service FCU placed in the fifth top spot among retail credit lenders in the nation for overall satisfaction, says J.D. Power's 2013 U.S. Dealer Financing Satisfaction Study, which cited dealer service, fast payment and an increased presence in Colorado and Utah as factors in the ranking.

SSFCU scored 917 on a 1,000-point scale based on finance offerings, the application and approval process, and sales representative relationship.

"We have approached our work with dealers as a partnership, and we're very passionate about the service we provide them," said Charles Goss, SSFCU senior vice president and chief lending officer. "These relationships drive the way we do business."

SSFCU moved to an entirely paperless process, which means it can approve a loan in as little as 15 to 30 minutes, with funding delivered to the dealership within 24 hours in all the credit union's regional markets.
 
The paperless process also saves the $7 billion asset credit union about 30 tons of paper or enough energy to power 30 average American homes for six months and enough water to fill 210,000 one-gallon bottles, it said, citing statistics from the U.S. Environmental Protection Agency.

SSFCU also recently passed the $5 billion mark in indirect auto lending.  "According to the most recent reports, SSFCU funds one out of every four cars within the San Antonio area," said Danny Lane, SSFCU vice president, indirect lending.  "We see our business growing steadily since our expansion into Colorado and Utah."

The report was released in July and based on a survey of 3,962 dealers in March and April.

CUNA Outlines Five CU Benefits For Bankrate.com

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NEW YORK (8/21/13)--Five key areas in which credit unions typically give back to their members were outlined by the Credit Union National Association in a Tuesday Bankrate.com article.
 
Because credit unions are nonprofit institutions, they give back generous perks to members such as free online classes, college scholarships, discounts on car loans, and even cash dividends, said the article, "5 credit union benefits worth scooping up."
 
The free service and items are reminders to members that credit unions are mutually owned, Mike Schenk, CUNA vice president of economics and statistics, told Bankrate. To find those perks, members should look in their credit union's membership statement, he added.
 
Also when looking for a credit union to join, consumers should ask the institution how it rewards its members, Schenk said.
 
Five areas in which credit unions give back to members are:
  1. College scholarships. Roughly half of U.S. credit unions offer their members college scholarships, Schenk told Bankrate. Although recipients are often evaluated for their community service and academic performance, many programs differ in criteria.
  1. Product discounts. Credit union members nationwide can take part in Invest in America, a credit union national awards program offering discounts on products such as computers, cars and mobile devices.
  1. Free financial literacy programs. Most credit unions offer educational courses, with many of them online, Schenk told Bankrate.
  1. Bonus dividends. Credit unions reward members in many ways. One way is to pay annual dividends to members--usually if the fiscal year turned out better than expected--said Schenk to Bankrate. Length of membership or account size may be among criteria for determining who qualifies for a dividend, he added.
  1. Savings reward programs. Credit unions are known for their prize-linked savings programs. One of the most popular is Save to Win, a lottery-type program that provides savers with opportunities to win cash prizes. Four states--Michigan, Nebraska, North Carolina and Washington--currently offer the program.
To see the article, use the link.
 
In another media mention for CUNA, Bloomberg BNA picked up a story in which Mary Dunn, CUNA deputy counsel, said a proposed accounting standards update that defines a Public Business Entity will allow credit unions as non-public entities to qualify for more flexible accounting requirements (Aug. 19). The Financial Accounting Standards Board issued the update Aug. 7, with comments due Sept. 20.

Employee Engagement Takes Teamwork, Planning

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MADISON, Wis. (8/21/13)--Studies show that organizations with high employee engagement are more productive and efficient. And these companies boast higher retention numbers, which avoids the costs of training new hires when employees leave.

But you can't fake employee engagement--nor can managers dictate it, according to the August issue of Credit Union Front Line Newsletter, the Credit Union National Association's monthly sales and service newsletter for branch staff and their manager.

"Top-down solutions might produce clarity, but they don't inspire buy-in or  practicality," Gallup Business Journal reports (May 30). "That's because top-down decision making about engagement fails to recognize the varying dynamics among work groups. More important, it misses an opportunity to engage teams in creating and 'owning' their own solutions."

Treat employee engagement as a process, not a one-time event. Action plans formed through open dialogue between managers and employees are a proven strategy to increase engagement for the long haul.

When evaluating employee engagement, Gallup Business Journal recommends asking employees five questions to generate participation, determine the most urgent goals, promote practical courses of action, and encourage ownership:
  • How do we define success? Gallup's employee engagement survey features a dozen statements such as "I have the materials and equipment I need to do my work right" and "My associates or fellow employees are committed to doing quality work." Different credit unions--even different departments in credit unions--will answer these questions differently. Managers should listen for unexpected suggestions and gauge the intensity of the feedback about issues already on their radar.
  • What's the ideal outcome? Encourage employees to think big, starting with the best solution--which might not always be the most expensive one. These conversations breed empowerment and create a benchmark for achievement.
  • How far must we go to reach the ideal? Talking about shortcomings as a team or organization isn't easy. But a transparent discussion builds goodwill and creates a platform for dialogue. And everyone can take responsibility for processes or products under their control.
  • Which opportunity will have the greatest impact? Engagement that isn't tied to performance is pointless. Employees want to weigh in on changes that can make their jobs more efficient or effective. You can't prioritize every issue--or none will be a priority. But giving staff input creates ownership, and encourages them to speak up if other improvement opportunities arise.
  • What's every team member willing to do? All employees should leave the discussion with "next steps" and the knowledge that their role is important to the team.
Managers can--and should--influence engagement, said Credit Union Front Line Newsletter. But by involving the team in answering these five questions, the credit union ties engagement to actions that can improve the workplace--and allow it to keep members' needs top of mind.

Former OFIR Commissioner Named EVP/COO At Michigan League

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LANSING, Mich. (8/20/13)--Ken Ross, who served as commissioner of the Michigan Office of Financial and Insurance Regulation (OFIR), has been named the new executive vice president and chief operating officer of the Michigan Credit Union League.

"Ken is a true professional who brings a wealth of experience and expertise that would be the envy of any organization in the financial industry," said MCUL & Affiliates president/CEO David Adams.

"As Michigan's first chief regulator of financial institutions with a credit union background, Ken understands the industry, the challenges we face in a today's complex regulatory environment and the services we provide in the community."

Ross was appointed OFIR commissioner by Gov. Jennifer Granholm in 2008 and continued serving under Gov. Rick Snyder until 2011.

As commissioner, Ross helped pass a legislative package that protects Michigan consumers from mortgage fraud by requiring the registration of mortgage loan officers. He also oversaw the passage of the re-codified Michigan Uniform Securities Act that provides enhanced penalties against perpetrators of securities fraud.

Ross served as the league's vice president of regulatory and legal affairs before his time at OFIR. OFIR today is today called the Department of Insurance and Financial Services.

CU System Briefs (08/20/2013)

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  • NEW HAVEN, Conn. (8/20/13)--Washington, D.C.- and Connecticut-based nonprofit Innovations for Poverty Action is accepting proposals for new financial products that will help "low and moderate-income populations pay down debt, build assets, and increase financial resilience." Groups whose proposals are approved will receive up to $15,000 in individual grants to help with product implementation and other pilot program costs (Focus eNewsletter Aug. 19) ...
  • CHEYENNE, Wyo. (8/20/13)--Kim Withers, president/CEO of Cheyenne, Wyo.-base Meridian Trust FCU was First Place in the Wyoming Business Report's 2013 "Wyoming Women of Influence Award.  The award recognizes female leadership in the state and honors the accomplishments of 10 women for their leadership and outstanding contributions to their fields. Withers received the honor in the category of Banking and Finance. From left are, MJ Clark, executive editor, Wyoming Business Report; Withers; and Belinda Nelson, publisher of the publication. Withers has served Meridian Trust since 1991 and has been CEO since 1994.  During her tenure, the credit union's assets have grown 500%, branches have increased from two to eight, and thousands of individuals, businesses and associations have become members. She also has served as chairman of SunCorp Corporate CU board and been active with the Mountain West Credit Union Association. (Photo provided by Meridian Trust FCU) ...

CUDE Program Awards Presented

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MADISON, Wis. (8/20/13)--Three Credit Union Development Education (DE) Program Awards were presented last week at a special reception during the annual DE Workshop in Raleigh, N.C.

The DE Program Awards go to those certified Credit Union Development Educators (CUDEs) who exemplify what the program stands for through their individual or cooperative efforts to make a difference in their credit union, community or on a national/international basis.

"The DE program encourages action around the credit union philosophy and this year's winners exemplify what being a CUDE is all about," said Lois Kitsch, NCUF national program director.

More than 75 CUDEs gathered at the workshop to help the National Credit Union Foundation present these awards:
  • Individual Achievement Award--Paul Thompson. Thompson was honored for his book, "Development of the Modern U.S. Credit Union 1970-2010."  A former speechwriter for the Credit Union National Association, he authored the book, which examined the technology, legal and regulatory changes; competitive pressures; and other factors that have seen the industry grow from small, limited-service institutions run by volunteers, to full-service, professionally staffed operations that now serve more than 96 million members.
  • Cooperative Spirit Award--North Carolina CUDEs. Collectively, the North Carolina CUDEs have created and offered a History and Philosophy Conference for North Carolina credit union professionals to enrich their understanding of credit union values and principles. More than 150 people have attended the conferences, with many going on to become CUDEs. The conference also is becoming a template for other credit union groups.
  • Lifetime Achievement--Bob Schumacher. Schumacher constantly promotes the DE program at CUNA's Government Affairs Conference, World Council of Credit Unions' meetings, state credit union league events and other credit union venues. He also has influenced many people to become CUDEs. As a mentor for the program, Schumacher has inspired students and helped facilitate the program. In 2010, under the guidance of NCUF, Schumacher and eight other DEs guided the formation of a new body to revitalize the DE program. This group, known as the Credit Union Development Education Advisory Council, elected Schumacher as its first chairman. During the next two years, the DE program has flourished, said NCUF.

New York Kicks Off 'Don't Tax' Week

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ALBANY, N.Y. (8/20/13)--The Credit Union Association of New York (CUANY) is sponsoring a campaign this week urging state credit unions to engage their staff and members in contacting Congress with the "Don't Tax My Credit Union" message.

To build additional awareness, a Don't Tax My Credit Union Rally will be held at CUANY headquarters in Albany Thursday. Beginning at 10:30 a.m. ET, credit unions leaders will speak about the importance of the credit union tax exemption.

Among the speakers are:
  • William Mellin, CUANY president/CEO;
  • Paula Stopera, president/CEO of CAP COM FCU, Albany;
  • Curt Cecala, CEO of TCT FCU, Ballston Spa;
  • Lucy Halstead, senior vice president/chief operating office of First New York FCU, Albany; and
  • Michael Tobler, president/CEO of Albany (N.Y.) Firemen's FCU.
CUANY invited credit union professionals, volunteer leaders and members to attend.

The association has posted several resources on its website from campaign links to social media resources.

CUANY is also coordinating a statewide Don't Tax My Credit Union postcard campaign. Nearly 100 credit unions are collecting staff and member signatures on postcards to be hand-delivered by CUANY to the offices of U.S. Sens. Charles Schumer (D-N.Y.) and Kirsten Gillibrand (D-N.Y.)

CU, CUNA Chair Op-Eds: Exemption Based On Structure, Not Assets

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HOUSTON (8/20/13)--While Congress debates tax reform, Credit Union National Association Chairman Pat Wesenberg and an Illinois credit union have written opinion-editorials in Texas and Illinois publications pointing out why credit unions should keep their tax-exempt status.
 
Wesenberg, who is also president/CEO of Central City CU in Marshfield, Wis., pointed out that  credit unions look out for the interest of hard-working Americans in her column, entitled "Tax reform should put consumers first--not banks" in Houston's Memorial Examiner (July 31).  She wrote a similar guest column on the issue in New Jersey's Star Ledger (News Now July 19).
 
Credit unions' federal tax exemption is based on their structure  as cooperatives, not their asset size, Dennis Schaefer, president/CEO of SIU CU, Carbondale, Ill., wrote in an op-ed for TheSouthern.com (Aug. 13) , in response to a guest opinion by a banker, Martin Rowe of Legence Bank.
 
"Mr. Rowe raised an old and tired argument that credit unions have 'vastly outgrown their special treatment,'" wrote Schaefer. "The problem with that argument is the growth limitation banks seek to impose on credit unions is nowhere found in the law that regulates them.
 
"The structure of the credit union, not its size, is the reason it receives its tax-exempt status," he added. "Credit unions are exempt from income tax because of their cooperative structure, but still pay property (just like your neighbor on his home), payroll, and sales taxes and regulatory fees."
 
Banks hold 92% of financial institution deposits in Illinois. To avoid federal income tax, nearly one out of three banks in the state elects Subchapter S status, Schaefer wrote. "Those banks also pay stockholder dividends and director fees far in excess of the estimated federal income tax credit unions would pay," he added. "It is disingenuous for the banks to complain about the lack of a level playing field.
 
If they truly thought credit unions had unfair competitive advantages, banks would restructure to credit unions, Schaefer wrote. "None of them do because that would expose them to democratic ownership and control, and a far more restrictive regulatory regime, including higher capital standards," Schaefer concluded.
 
Removing barriers and raising awareness are two components of CUNA's and the state leagues' Unite for Good campaign, which, along with fostering service excellent, aims to move toward a strategic vision where Americans choose credit unions as their best financial partner. For more information, and to read the op-eds, use the links.

Survey: Banks' No-fee Checking Accounts Drop Since 2009

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FOSTER CITY, Calif. (8/20/13)--The percentage of banks offering free checking dropped again in the first half of the year, a clear indication that credit unions remain the smarter choice for fee-conscious consumers.

Less than 30.31% of banks surveyed had no monthly maintenance fee--the lowest percentage since 2009, when MoneyRates.com launched its Bank Fees Survey. That figure is a drop from 36.6% recorded at the end of 2012.  In 2011, roughly 34.7% reported charging no fees--the lowest percentage until now. 

Online banks were more likely to have fee-free maintenance of checking accounts (78.95%) than brick and mortar banks (27.70%), findings that were attributed by the report to the lower overhead costs of online banks.  The average monthly service fee for a checking account was $12.43.

Not only are fewer banks offering free checking, they have increased the fees they charge for overdrafts, said MoneyRates.com.  The average overdraft fee rose in 2013 to $31.60, compared with $30.01 at year-end 2012.

If a checking account customer overdrafts an account three times within a year, the charge would be $243.96 in monthly and overdraft fees for that year, said MoneyRates.com.

According to the Credit Union National Association's 2013-2014 CUNA Fees Report, there is no contest on where consumers can go to avoid paying checking fees: 82% of credit unions surveyed offered free checking in 2012, similar to previous fees reports.

MoneyRates.com also found that the size of the financial institution also affected whether a consumer would pay a checking account fee, but the difference wasn't as great as the difference between online and traditional banks. Large banks charger higher monthly and ATM fees than smaller and medium-sized counterparts and are less likely to offer free checking. Overdraft fees tend to be lowest at large banks and highest at small banks, with medium-sized banks in the middle, said the study.

The survey includes no credit union data. Instead, it is based on the MoneyRates Index, a sampling of 100 banks consisting of the 50 largest U.S. retail banks by deposit and 50 smaller banks.

Wis. League Sponsors Tweet Chat About Social Media Today

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PEWAUKEE, Wis. (8/20/13)--The Wisconsin Credit Union League is sponsoring a free Tweet Chat at 11 a.m. CT today about using social media for credit unions across the nation. Participants can use the hashtag, #WICUchat to learn what works and what doesn't in social media.
 
The league said it wanted to give U.S. credit unions an opportunity to exchange ideas and learn about social media issues. The event will be co-moderated by CUNA Mutual Group Media Relations Manager of New Media Michael Ogden.
 
The chat will also allow Wisconsin credit unions to discuss some topics that will be covered at the league's September Innovators in Outreach Roundtable. The chat is open to anyone interested in social media for credit unions.
 
A tweet chat is when a group of people all tweet about a topic at a designated time using a specific hashtag.  To participate, log onto Twitter at 11 a.m., type #WICUchat in the search box, and all of the tweets with that hashtag will appear. Then read, tweet and retweet, being sure to use the #WICUchat hashtag.  Or follow along @WICULeague.
 
Questions will be tweeted by the league @WICULeague using a Q1, Q2 and more format, with replies in the corresponding A1 and A2 formats.  For more information, see the link.

Mobile Banking Use Up 4.19% In July

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AUSTIN, Texas (8/20/13)--U.S. mobile banking use in July continued to strengthen, rising at a 4.19% average month-over-month growth rate for credit unions and banks that have been in operation at least one year, according to a recent survey.
 
Credit unions and banks surveyed in July reported between 37% and 39% of their total households or deposit accounts use the mobile banking SmartApp, said the Monkey Insights Mobile Banking  Smart Device Usage survey released last week by mobile banking company Malauzai Software.
 
Other findings are:
  • End-users are engaged. About 72.5% of end-users who register for mobile banking employed the SmartApp within 90 days. The numbers vary for Apple and Android, with Apple end-users at 73.09% and Android end-users at 69.70%. For year-to-date usage, the number of active end-users jumped to 92% of registered end-users.
  • iOS devices dominate. Counter to expectations, 66% of registered end-users are on the iOS platform. There are many more Android devices in the market, but clearly mobile banking end-users are on iOS devices, said the report.
  • Android sessions--middle of the night. The only time there are more Android end-users using mobile banking than iOS end-users is between 2 a.m. and 3 a.m. This is one of many indicators that Android end-users are different.
  • Session engagement is up. Mobile banking SmartApp users log in an average of 3.7 times per week, with an average session duration of one minute 14 seconds. This is up from a year ago when the average was 3.15 sessions per week and one-minute-5-second sessions. Android sessions are longer, averaging one minute 46 seconds.

Catalyst: All CUs--Even Smaller Ones--Should Move On Mobile

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PLANO, Texas (8/20/13)--All credit unions should move forward with a mobile strategy, because 32% of U.S. adults now bank using their mobile phones, said Brad Ganey, chief operating officer of Catalyst Corporate FCU in Plano, Texas.
 
Ganey made his remarks to about 50 credit union leaders at a recent Shapiro Summit in Ontario, Calif. The summit, sponsored by the California and Nevada Credit Union Leagues, provides education for credit unions with assets of $50 million and less.
 
Ganey's presentation featured a case study of a $35 million Texas credit union that launched mobile banking and mobile capture services to its membership in April. After four months, the credit union is experiencing a monthly growth rate in active users of 42.2%.
 
Ganey mentioned key considerations the credit union faced in its due diligence process, including determining whether the service would align with the credit union's overall strategy, Ganey said.
 
"The first question the credit union had to answer for its board was whether its membership really needed mobile banking," he said. "The CEO made the case effectively that without mobile, the credit union was not likely to attract new members in the 50-and-under age range and would risk losing current members anxious to take advantage of mobile banking services."
 
Other strategic decisions, Ganey said, focused on the cost effectiveness of mobile. "Part of this credit union's decision-making process was to determine whether mobile banking could serve as an alternative to branch expansion or to spending $20,000 to upgrade to an image-enabled ATM," he said. "For many members, their cell phones never leave their sides. By incorporating mobile capture into this service, these members are able to deposit checks at any time, without locating a branch or an ATM."
 
Ganey offered several strategies for "mobilizing" credit unions:
  • Understand your membership--use frontline staff;
  • Establish buy-in from your board through industry and mobile usage data;
  • Establish baseline requirements and longer-term goals for functionality;
  • Ensure alignment with overall strategy and philosophy (member demographics, branch and growth strategies);
  • Set vendor selection criteria (their vision and yours, integration with other systems, training and ongoing support, implementation assistance, analytics, cost); and
  • Determine if mobile can be justified financially (with revenue and/or growth opportunities, expense reallocation and expense reduction).

League Bill On CU Civil Penalties Signed Into Law In Illinois

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NAPERVILLE, Ill. (8/20/13)--Legislation that addresses interpretive issues involving the Illinois Department of Financial and Professional Regulations' (IDFPR) civil penalty process as it relates to credit unions was signed into law Friday by Illinois Gov. Pat Quinn.

HB 1572 will ensure that due process, fairness and objective standards are applied consistently, said the Illinois Credit Union League, which backed the measure.

Passage of the bill--now PA 98-0400--was unanimous through both chambers of the Illinois General Assembly (IGA): on May 22 with a vote of 55 to 0 in the Senate and a vote of 112-0 in the Illinois House on April 11.

The bill amends the Illinois Credit Union Act to ensure the civil penalty assessment process is fundamentally fair and consistently applied. The intent in establishing the process was that civil penalty orders would be reserved for extraordinary circumstances in which the credit union's conduct was egregious and constituted a willful and material disregard of applicable standards.  That was the reason for the procedural due process provisions regarding prior notice and an opportunity to cure, the league said.
 
In the short time since the civil penalty process has been in place, interpretive issues have arisen regarding key operative terms.  HB 1572 addresses those issues by adding substantive due process criteria to provide objective standards of materiality and quality assurance and a cure opportunity before any assessment of a civil penalty, the league said.
 
In consultation with State Rep. Lou Lang (D-16, Skokie), who sponsored the bill in the Illinois House, the league worked with IDFPR Acting Secretary Manny Flores and Division of Financial Institutions Credit Union Supervisor Francisco Menchaca to fully address the concerns of the credit union movement, said the league. As a result, the department, which oversees the banking and credit union divisions that regulate all Illinois-chartered financial institutions, including 271 credit unions, supported the legislation.
 
"We are very pleased the Illinois General Assembly concurred with the sentiment expressed by Acting Secretary Manny Flores that the issuance of civil penalties should be handled on a consistent and fair basis by all divisions within the department," said Stephen Olson, ICUL general counsel and chief operating officer.

New Hampshire League Raises $160K For Make-A-Wish

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MANCHESTER, N.H. (8/19/13)--The collective efforts of the New Hampshire Credit Union League, New Hampshire's 20 credit unions, and other funding projects in that state have achieved a noble goal: Altogether, they have raised $160,000 for Make-A-Wish New Hampshire in 2013.

NHCUL Board Chairman Gerald Dumoulin praised the tireless work of these volunteers, credit union members and sponsors in Foster's Daily Democrat (Aug. 16), a local New Hampshire news source.

More than one-third of the $160,000 total was raised from the 13th Annual Richard D. Mahoney Credit Union Charity Golf Tournament. The remaining $105,000 was through credit union and member donations, fundraising sales and auctions.

This year's haul brought the group's 17-year Make-A-Wish fundraising total to around $1.8 million.

The Daily Democrat noted Make-A-Wish New Hampshire has helped build a basketball court, fund a trip to Disneyworld, and purchase an in-home golf simulator for children with life-threatening illnesses in the past year.

Dumoulin told the Daily Democrat his group is committed to fulfilling many more wishes in the coming years.

CU System Briefs (08/19/2013)

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  • ELGIN, Ill. (8/19/13)--Kane County Teachers CU in Elgin, Ill., named Mike Lee as its new president/CEO. The appointment concludes a 16-month search for a new leader by the $175 million asset credit union. Lee assumed his role Thursday, replacing Craig Bradley, who retired after 35 years as president/CEO of the credit union (shawmedia.com Aug. 16) ...
  • SALEM, Ore. (8/19/13)--Oregon Employees FCU, with $98 million in assets, Salem, Ore., has rebranded itself as Heritage Grove FCU. The word "heritage" was selected to connect the credit union with the early pioneers who settled in the Mid-Valley, Ore., area, the heritage of the city of Salem as state capital, and the legacy of state employees, Heritage Grove FCU President/CEO Jim Mau told the Northwest Credit Union Association (Anthem Recap Aug. 13). The credit union's new positioning line is, "Stand Tall," reflecting deep community roots and its ability to "rise above all obstacles" ...

NEW: Illinois League CU Civil Penalties Bill Signed Into Law

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NAPERVILLE, Ill. (8/19/13 UPDATED 5 p.m. CT)--A measure that addresses interpretive issues involving the Illinois Department of Financial and Professional Regulations' (IDFPR) civil penalty process as it relates to credit unions was signed into law Friday by Illinois Gov. Pat Quinn.

HB 1572, now PA 98-0400, ensures that due process, fairness and objective standards are applied consistently, said the Illinois Credit Union League, which backed the measure.
 
Passage of the bill was unanimous through both chambers of the Illinois General Assembly (IGA) on May 22, with a vote of 55 to 0 in the Senate and a vote of 112-0 in the Illinois House on April 11.

The bill amends the Illinois Credit Union Act to ensure the civil penalty assessment process is fundamentally fair and consistently applied. The intent in establishing the process was that civil penalty orders would be reserved for extraordinary circumstances in which the credit union's conduct was egregious and constituted a willful and material disregard of applicable standards.  That was the reason for the procedural due process provisions regarding prior notice and an opportunity to cure, the league said.
 
In the short time since the civil penalty process has been in place, interpretive issues have arisen regarding key operative terms.  HB 1572 addresses those issues by adding substantive due process criteria to provide objective standards of materiality and quality assurance and a cure opportunity before any assessment of a civil penalty.
 
In consultation with State Rep. Lou Lang (D-16, Skokie), who sponsored the bill in the Illinois House, the league worked with IDFPR Acting Secretary Manny Flores and Division of Financial Institutions Credit Union Supervisor Francisco Menchaca to fully address the concerns of the credit union movement, said the league. As a result, the department, which oversees the banking and credit union divisions that regulate all Illinois-chartered financial institutions, including 271 credit unions, supported the legislation.
 
"We are very pleased the Illinois General Assembly concurred with the sentiment expressed by Acting Secretary Manny Flores that the issuance of civil penalties should be handled on a consistent and fair basis by all divisions within the Department," said Stephen Olson, ICUL general counsel and chief operating officer.

Maine League, CUs To Sponsor World Acadian Congress

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PORTLAND, Maine (8/19/13)--The Maine Credit Union League Wednesday announced its sponsorship of the 2014 World Acadian Congress.

The sponsorship includes a $75,000 financial and in-kind commitment from Maine credit unions, including a check for $12,500 presented by league president John Murphy to the congress Wednesday (Weekly Update Aug. 16).

The event was attended by Maine league representatives, the Aroostook Chapter of CUs and representatives and organizers of the World Acadian Congress, which will take place in Aroostook County, Maine; northwestern New Brunswick, Canada; and southeastern Quebec, Canada in 2014.
Murphy recognized the historical relationship between the Acadian culture and Maine's credit unions. "Many Maine credit unions can trace their roots back to this heritage and our partnership reinforces our history," Murphy said.

The 17-day congress, which will be held Aug. 8-24, 2014, is expected to attract an estimated 50,000 visitors to the U.S. and Canada. The congress is held every five years.

In December, Maine credit unions became the exclusive retail distributor of state World Acadian Congress license plates, with $1 from each plate sold going to the Maine credit unions' Campaign for Ending Hunger.

CUs Hit Paydirt With Media Coverage

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MADISON, Wis. (8/19/13)--The Credit Union National Association and credit union difference  were in the limelight nationally on several fronts last week, featured in 13 news stories in prominent national media such as The Wall Street Journal, Fox Business, U.S. News & World Report, Automotive News and the Chicago Tribune.

The articles addressed a range of topics, from credit unions' tax-exempt status, regulatory burden, interchange rule deadlines and nonpublic business entities, to creating a budget, customer satisfaction, auto loans, credit building and stock market activity.

"The stock market will recover from its concerns about the Fed tapering," CUNA Chief Economist Bill Hampel told The Washington Post (Aug. 15), referring to Thursday's dip in the stock market and the anticipated winding down of the Federal Reserve's quantitative easing plan of buying back bond assets. "In the long term, the stronger the economy, the better it is for everyone, including the stock market."

CUNA Deputy General Counsel Mary Dunn was featured in a question and answer article about compliance with regulations in The Wall Street Journal (Aug. 15). (See related News Now article, CUNA's Dunn Provides Compliance Tips in WSJ Interview.)

In FoxBusiness'  (Aug. 16)  "4 Tips to Get Your Spending Under Control," Paul Gentile, CUNA's executive vice president of strategic communications and engagement, recommended that consumers, when creating a budget, calculate current income and spending levels,  and decide how much they can afford to spend frivolously while still meeting their debt obligations and putting away savings. "Consider making a list of the things that you really need as opposed to the things you really want," he advised.

He was also featured discussing in The Chicago Tribune's "Banks vs. Credit Unions: You Make the Call" (Aug. 13) how credit unions consistently beats banks in overall customer satisfaction.

CUNA President/CEO  Bill Cheney in The Hill (Aug. 14) noted the aggressive deadline the Fed faces in regulating interchange and its impact on credit unions. Its fast turnaround "will eliminate any uncertainty about the future--but will also potentially mean an impact on credit unions sooner than later. It is a serious issue for credit unions and we are exploring a variety of options to ensure credit unions' interests are protected in any changes to the debit interchange regulation," he said.

Nearly one-third of people in the U.S. belong to a credit union, with many of those memberships starting with an auto loan, said Mike Schenk, CUNA's vice president of economics and statistics, in the  Automotive News (Aug. 14)  article, "What's the Credit Union Difference? Low Rates." On average, credit unions not only offer lower interest rates on auto loans than banks, but they also beat the captives' rates, he said.

To view the articles, use the links. Credit unions were also featured in U.S. News and World Report Aug. 16, Las Vegas Review Journal Aug. 12, Phoenix Business Journal Aug. 16, Moneyrates.com Aug. 15, NerdWallet Aug. 15, The Missouri Times Aug. 14 and The Southern Aug. 13.

Raising awareness about the value of credit unions to their members and communities is part of the Unite for Good campaign of CUNA, the state leagues and credit unions. The campaign strives toward a strategic vision where Americans choose credit unions as their best financial partner.

Georgia Poll: 52% Don't Have Savings Accounts For Kids

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DULUTH, Ga. (8/19/13)--More than 52% of respondents to the Georgia Credit Union Affiliates' Midyear 2013 Consumer Survey report their children do not have savings accounts at financial institutions. 
 
This provides credit unions with an opportunity to promote children's savings accounts with their members and also attract youth at an early stage to see the benefits of credit union membership.    
 
National statistics paint a bleak picture of financial literacy among young people. Only 27% of young adults possess basic knowledge of interest rates, inflation and risk diversification, according to the National Bureau of Economic Research.
 
Also, The 2012 Consumer Financial Literacy Survey indicates that 44% of Americans continue to learn about financial literacy primarily from their parents or at home.
 
GCUA's survey shows how parents can better equip their children to manage their finances responsibly. 
 
GCUA's tips to teach kids about managing money:
  • Provide an allowance. Children learn by doing. Base the amount of the allowance on a child's age, maturity and the cost of living in one's area. As children grow, increase the allowance and let them take over buying some necessities.
  • Let them do some of the research. Some parents require their children to find out how much money they need for something they want and to submit detailed "budget" requests in writing. These can become the basis for negotiating allowances. This practice works especially well when they go off to college and the amounts under discussion go from tens and hundreds, to thousands of dollars.
  • Don't penalize children for working. Reducing allowances when children get a job punishes them for taking the initiative.
  • Encourage (or require) regular saving. Open a credit union savings account in children's names. Then encourage them to put a percentage of what they earn or receive as a gift into savings. Use this to teach them how to put money aside for big expenses.
  • Teach by example. It's still the best teacher. Believe it or not, children do pay attention to what parents do, including how they manage money. So parents should make sure to practice what they preach.

Leagues And CUNA Meet State Legislators At National Summit

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ATLANTA (8/19/13)--
Click to view larger image Brandee Bickle of the Georgia Credit Union Affiliates tells Rep. Lee Perry of Utah about credit unions at the booth GCUA co-hosted with the Credit Union National Association during the Annual Legislative Summit of the National Conference of State Legislators last week in Atlanta.
The Credit Union National Association and several state credit union leagues advocated for credit unions at the Annual Legislative Summit of the National Conference of State Legislators (NCSL) in Atlanta, Ga., last week.
 
CUNA hosted a display booth in the exhibit hall highlighting "America's Credit Unions" and directed attendees to the website aSmarterChoice.org to find out more about credit unions.  Georgia Credit Union Affiliates co-hosted the booth at the NCSL event, providing staff support and gifts for those visiting the booth.
 
CUNA and league staff also participated in working meetings of state legislators to advance and protect credit union interests, and educated attendees about the number of credit unions and their members in each state.
 
Click to view larger image Mark Minickiello (far left) of the Northwest Credit Union Association and Brandee Bickle (center) of the Georgia Credit Union Affiliates discuss credit unions with state legislators at the Annual Legislative Summit of the National Conference of State Legislators last week in Atlanta.  The credit union booth included a state-by-state display of where 95 million credit union members are located (at right).  (Photos provided by CUNA)
League staff from Arizona, Colorado, Georgia, Kentucky New Mexico, Oregon, Tennessee, Texas, and Washington joined CUNA staff at the NCSL event.  NCSL's Committee on Communications, Financial Services and Interstate Commerce debated policy proposals while CUNA and league staff ensured that credit unions would not be harmed by any resolutions approved by the group.

The NCSL meeting followed the previous week's meeting of the American Legislative Exchange Council (ALEC) in Chicago. CUNA and leagues represented credit unions at the ALEC meeting of state legislators as well, and the Illinois Credit Union League provided sponsorship at the ALEC event. (See related News Now story, CUNA, Leagues Participate In State Legislators Meeting by using the link.)

CUNA Mutual Files Six Lawsuits Against Banks Over RMBS

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MADISON, Wis. (8/19/13)--CUNA Mutual Group has filed six lawsuits in a federal court in Madison, Wis.,  against banks over losses from residential mortgage-backed securities (RMBS) sold to it prior to the 2007 financial crisis. It is seeking rescission of the purchase of the certificates it bought.
 
The suits were filed Thursday in the U.S. District Court for the Western District of Wisconsin against Morgan Stanley ($23 million); Bank of America/Merrill Lynch ($121 million); J.P. Morgan (Bear Stearns, Wamu, JP Morgan Chase) ($116 million); Nomura Securities ($8 million); UBS ($6 million); and Goldman Sachs ($12 million).
 
"These actions are to right a wrong and are being taken in the best interests of CUNA Mutual Group, credit unions and all policyholders," said Phil Tschudy, media relations manager at CUNA Mutual group. "The defendants falsely represented investment products they sold us between 2004 and 2007 and, as a result, we are seeking a recovery of our investment," he told News Now Friday.
 
The suits, which have similar allegations tailored to each defendant, seek to rescind or make the seller buy back the RMBS certificates purchased because the companies "induced CUNA Mutual to purchase those certificates by misrepresenting the fundamental attributes of, and thus the credit risk associated with, the pools of mortgage loans collateralizing the RMBS."
 
The 93-page complaint against Morgan Stanley & Co. noted that after CUNA Mutual made its purchases, the mortgage loans in the pools "began to default at high rates consistent with their true attributes" and caused "millions of dollars in losses."
 
Under Wisconsin law, said the insurance provider, the misrepresentations of material fact justify the rescission of the purchases, regardless of whether the banks made the misrepresentations intentionally, recklessly, negligently, or even innocently, said the complaint.
 
CUNA Mutual said that Morgan Stanley induced it to buy four RMBS certificates between 2005 and 2007 "by falsely representing that the loans backing the RMBS had been issued in compliance with the relevant originators' underwriting standards" and "by misrepresenting the quantitative characteristics of the loan pools" such as loan-to-value ratios, owner-occupancy rates and credit ratings. It said its reliance on the material misrepresentation was justified because the bank "marketed itself as an expert in RMBS that gave investors accurate information, as securities laws requires it to."
 
The complaint noted that CUNA Mutual was mistaken about a basic assumption underlying the transactions: that they were issued in compliance with the originators' underwriting standards. Earlier CUNA Mutual filed a similar $72 million lawsuit against RBS Securities in the same court, seeking rescission and alleging unjust enrichment (News Now April 8).
 
The lawsuits are similar to those filed by the National Credit Union Administration against Wall Street banks that sold RMBS to corporate credit unions, including U.S. Central FCU and Western Corporate FCU, which were liquidated in 2010.

New Mexico CU Helps Members Of Modest Means

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ALBUQUERQUE, N.M. (8/19/13)--U.S. New Mexico FCU in Albuquerque has 10 programs to help members of modest means (MOMS) or who have damaged credit ratings gain footholds in obtaining credit under good terms.

About a year ago, the $725 million asset credit union received a call from a former member who had moved to Alaska and bought a car. Because his credit rating wasn't stellar, he was forced to pay a 23.9% interest rate on the loan through the corporate credit arm of his vehicle's manufacturer (Albuquerque Business First Aug. 16).

In response to his plight, the credit union offered the man a car loan at roughly half the interest rate (12.9%) he was paying, through one of its MOMS programs, USNMFCU Marketing Manager Phil Forbert told the publication.

In the past three to four years, the credit union has assigned 30% to 40% of its loans to members with low credit scores--a practice that is part of the objectives and goals of the company, he added.

The Credit Union National Association awarded USNMFCU a national award for it MOMS work in November 2012. It was the one credit union in the nation to receive the Credit Union Excellence in Lending Low/Modest Means Lending Award, Forbert told the publication.

Some mainstays of the credit union's efforts include a skip-a-payment program started about four years ago and a Tiers 3-5 lending program. That program provides credit to members who lack credit histories, but who have strong employment records and no major derogatory payments and who have good payment histories, Forbert added.

Kansas Young CU Professionals Put Philosophy To Work

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WICHITA, Kan. (8/19/13)--More than 20 credit union leaders from six Kansas credit unions and
Click to view larger image The Kansas Credit Union Association CUnext Young Professional Council held its first Day of Service in two state cities Wednesday. From left, Wichita CUnexters Chris Wolgamott, Meritrust CU; Travis Colibert, Mid American CU; and Jessica Zumalt, Medical Communality CU, help paint a house for Habitat for Humanity.
the Kansas Credit Union Association (KCUA) donned T-shirts and jeans Wednesday to take part in the first KCUA CUnext Young Professionals Council's Day of Service.
 
The Kansas Credit Union Association CUnext Young Professionals Council held its first Day of Service in two state cities Wednesday. From left, Wichita CUnexters Chris Wolgamott, Meritrust CU; Travis Colibert, Mid American CU; and Jessica Zumalt, Medical Communality CU help paint a house for Habitat for Humanity. The event was organized to illustrate that credit unions are vital part of each and every community, the KCUA said.
 
"Our CUnexters wanted to get out and do something in the community that would benefit both the young professionals' group, as well as someone in need," said Travis Colibert, branch manager at Mid American CU, Wichita, and a member of the CUnext Leadership Committee.
Click to view larger image Members of the Kansas Credit Union Association's CUnext Young Professionals Council in Topeka boxed hundreds of boxes of food for seniors at Harvesters Community Food Network. (Photos provided by Kansas Credit Union Association)
 
"We wanted to illustrate that the philosophy of 'people helping people' is important to credit unions, and that we live it both inside and outside the credit union world."
 
Credit union staff from Medical Community CU, Meritrust CU and Mid American CU participated in Wichita, painting exterior trim and doors, hanging windows and putting a roof on a Habitat for Humanity house.
 
In Topeka, the group packed 453 boxes of food for seniors in northeast Kansas through Harvesters Community Food Network. Participating credit unions included Educational CU and Quest CU, both of Topeka, and Kansas State University FCU from Manhattan.
 
Community outreach initiatives like these are another way credit unions demonstrate the value of credit unions to their community and members. Raising awareness about the value of credit unions is a key component of the Credit Union National Association's and state leagues' Unite for Good campaign toward the strategic vision where "Americans choose credit unions as their best financial partner."  For more information, use the link.

African-American CU Coalition Elects Smith Chairperson

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SHREVEPORT, La. (8/19/13)--Lynette Smith, president/CEO of the $89 million Washington Gas Light FCU in Springfield, Va., was elected board chairman of the African-American Credit Union Coalition at the organization's annual conference earlier this month.

"I look forward to serving credit unions nationwide," Smith told News Now. "My top priority is to increase our presence through marketing and social media."

Other board officers include:
  • Vice chair--Mark S. Brantley, chairman, Municipal Employees FCU, New York;
  • Treasurer--Tim Anderson, president/CEO, Government Printing Office FCU, Washington, D.C.; and
  • Secretary--Tonita Webb, chief administrative officer, Seattle (Wash.) Metropolitan CU;
Also elected to the board was Ed Presnell, vice president of administrative services, SRP FCU, North Augusta, S.C.
Other AACUC board members include:
  • Sheilah Montgomery, president/CEO, Credit Union of Atlanta (Ga.);
  • Helen Godfrey-Smith, president/CEO, Shreveport (La.) FCU;
  • Barbara Stephens, president/CEO, Houston (Texas) Metropolitan FCU; and
  • Bert J. Hash Jr., president/CEO, MECU of Baltimore.

CUs In Two States Report Scams

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MADISON, Wis. (8/19/13)--Several credit unions across Pennsylvania have reported they were approached by a company charging a fee for their records with a threat they would be put on a "bad standing" list if they didn't, and an Oregon credit union is alerting members to a merchant data breach.

In Pennsylvania, several credit unions reported they received a form in the mail from "Corporate Records Services" of Harrisburg, Pa., requesting a fee of $125, along with a list of the company's annual records, annual meeting minutes and a list of shareholders. If they don't respond, the records company threatens to put them on a "bad standing" list, said the Pennsylvania Credit Union Association (Life is a Highway Aug. 16).

This is a national scam, according to the Department of State and the company is not connected with state. The U.S. Postal Service is investigating.

Also in Pennsylvania, New Castle-based GNC Community FCU warned that fraudulent checks that contain the credit union's name and routing information are being circulated. Several checks were presented to the Saigon National Bank with the information, said PCUA. The checks for $79.99 are payable to Health and Wellness Services of Beverly Hills, Calif., and the memo accompanying the checks includes an inactive toll-free number.

In Beaverton, Ore., Rivermark Community CU, with $547.3 million in assets, said it is taking preventative measures and reissuing debit and credit cards of nearly 1,000 members after receiving a notice from Visa about a possible data breach at an undisclosed merchant. Cardholders at other financial institutions are also being warned their accounts may have been compromised by the breach (The Oregonian Aug. 14).

Visa sent an alert Aug. 7 indicating that the exposure occurred between June 14 and July 20, but it did not disclose where the breach may have occurred because the breach is under investigation, said the newspaper.  Last year, the card company changed how it alerts financial institutions to possible breaches.  Now it sends alerts earlier in the investigation but doesn't identify the specific location or circumstances until the investigation is completed.

First Commerce CU Teams With Biz College Power Forward Series

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AMELIA ISLAND, Fla. (8/16/13)--First Commerce CU, based in Tallahassee, Fla., has announced a partnership with the Florida State University College of Business to launch a business speaker series.

The Power Forward Speaker Series will launch Nov. 6 with Barbara Corcoran of ABC's entrepreneurial reality show, "Shark Tank." The announcement was made at the Greater Tallahassee Chamber of Commerce's Annual Community Conference in Amelia Island, said the $355 million asset credit union. First Commerce was a presenting sponsor at the conference.

"As a local strong credit union in this community for more than 70 years, we know recent years have been difficult for our local businesses--but we are leaner, stronger and ready to power forward," said First Commerce CEO Cecilia Homison.

"As part of our commitment to our community, we wanted to find a way to celebrate the resilience of our businesses and keep our leaders inspired. After discussions with FSCU College of Business about their similar hopes for Entrepreneurship Month, the Power Forward speaker series was born," she said.

Corcoran parlayed a $1,000 loan to start The Corcoran Group into a $5-billion real estate business, which she sold in 2001 for $66 million. She also is a real estate contributor for NCB's "TODAY" Show. In the first and second season of "Shark Tank," Corcoran invested in 13 young businesses that she is shepherding to success. In Seasons three and four, she invested in 18 entrepreneurs.

Credit unions have been allies of small businesses and entrepreneurs, with many providing member business loans to entrepreneurs who can't get loans at banks. Credit unions and the Credit Union National Association are urging Congress to allow credit unions to do more by lifting credit unions' member business lending cap to 27.5% from 12.25%. Doing so would inject $13 billion in new small-business loans and help generate 140,000 jobs the first year.

Iowa Merger Latest Of Consolidations

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MADISON, Wis. (8/16/13)--A merger between Dupaco Community CU, with $1.067 billion in assets, in Dubuque, Iowa, and Iowa Community CU, with $80.9 million in assets, Cedar Rapids, Iowa, is among the latest credit union consolidations recently announced.

The organization will continue as Dupaco Community CU, the credit unions said. The combined institution will have 18 branches and more than 80,000 members.

The agreement is the first formal step in a process. After due diligence, the arrangement is subject to state and federal regulatory approval, and a vote by the Iowa Community CU membership. Pending all necessary approvals, the intended merger is expected to be completed sometime during the first quarter of 2014.
 
Other recently announced mergers include:
  • A partnership between Akron, Ohio's $17 million asset MedPro CU and Columbus-based Ohio HealthCare FCU, with $52 million in assets, became a reality on Aug. 1, beginning with a realignment of duties among management. The collaborative effort will allow both credit unions to serve healthcare employees throughout Ohio, with Ohio HealthCare focusing on the Central Ohio market and MedPro focusing on the Northeast Ohio market. Bill Butler, former president/CEO of Ohio HealthCare, will assume the title of president, overseeing the entire partnership. Becky Howell, former president/CEO of MedPro, will assume the title of CEO of the Northeast Ohio Market.
  • Christian Financial CU, with $288 million in assets, and ARC CU, with $14 million in assets, both of Roseville, Mich., announced that they will merge operations, effective Sept. 30, with Christian Financial retaining the credit union name, the Michigan Credit Union League said (Michigan Monitor Aug. 12). The merger will benefit ARC CU members, who will gain access to Christian Financial CU's locations, ATM services, extended hours, drive-thru locations and mobile banking.
  • Lutheran CU of America, with $28.5 million in assets, Brea, Calif., has merged into $254 million asset America's Christian CU, Glendora, Calif. It was the goal of the Lutheran CU board of directors and management team to partner with a financial institution that shares the same vision and has the desire to serve people of faith.
  • Great Lakes CU, North Chicago, Ill., will merge with Thornton Township High School CU, South Holland, Ill. Great Lakes CU will have assets of $643 million and serve more than 54,000 members.
  • Southern Illinois Area (SIA) CU, with $8 million in assets, Swansea, Ill., has merged into $186 million asset Arsenal CU, Arnold, Mo. South Illinois Area CU members gain access to Arsenal CU's five branches through the merger (St. Louis Business Journal July 19).
  • Members of $8 million asset Southwestern Telco FCU voted in favor of merging into $115 million Blue Eagle CU. Both credit unions are based in Roanoke, Va. The Southwestern Telco CU board said it was in the best interest of members to seek a merger partner who could offer the breadth of services demanded in the marketplace (Roanoke.com Aug. 2). The merger is scheduled to be completed Labor Day weekend.
  • Members of $2.8 million asset Cassia County Education Association CU, Burley, Idaho, voted to merge with the Pocatello, Idaho-based $134 million asset Idaho State University CU, effective Aug. 1 (Idaho State Journal July 31). The merger was made to offer Cassia County Education Association CU members a broader range of financial services.

216 Merchants Sue Visa, MasterCard On Antitrust Issue

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DALLAS (8/16/13)--About 216 merchants Tuesday filed an antitrust lawsuit in a Marshall, Texas, U.S. District Court against Visa and MasterCard, claiming the card companies' policies force them to pay hundreds of millions of dollars in excess interchange fees.
 
The suit claims that the two card companies have adopted nearly identical membership rules that prevent financial institution-issuers of credit and debit cards from competing for merchant acceptance of the cards. It was filed Tuesday in the U.S. District Court for the Eastern District of Texas. The lead plaintiff is Delta Air Lines. Most of the plaintiffs are in the travel and energy industry, and include several airlines, hotels such as La Quintas Inns and Red Roof Inns, and travel companies such as Orbitz Worldwide and Travelocity, as well as Radio Shack and Pier 1 Imports.
 
The suit alleges the card companies violated the Sherman Act. The plaintiffs seek unspecified damages, along with punitive damages and attorneys' fees.
 
"Because Visa and MasterCard have as their members nearly all card issuers in the U.S., and because those card issuers have agreed to rules that preclude them from independently competing for merchant acceptance, Visa and MasterCard and their members have obtained and maintained market power in the market for merchant acceptance of debit cards in the U.S.," said the complaint.
 
"The exercise of this market power has led merchants to pay excessive interchange fees. In this manner, Visa and MasterCard have unlawfully restrained competition in these markets," the complaint continued.
 
Saying that interchange fees are their biggest operating expense, the merchants alleged that maximum debit interchange fees enacted by the Federal Reserve as a result of the Durbin Amendment have not eliminated the anticompetitive effects of the card companies' setting default fees.
 
A U.S. District Court in Washington, D.C., ordered the Fed to redo its rule that implemented the interchange amendment that capped debit card interchange fees (News Now Aug. 13).
 
In May, Visa and MasterCard filed a lawsuit against 11 retail organizations that opted out of a $7.25 billion interchange settlement proposal in an antitrust lawsuit against the companies (News Now May 29).

'Don't Tax My CU' Increases Presence On YouTube

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MADISON, Wis. (8/16/13)--
Click to view larger image Credit unions' "Don't Tax My Credit Union" message is loud and clear on YouTube, judging from the number of videos and the number of views. At the top in views is a video by CUNAAdvocacy, with more than 26,734 views as of Thursday.  (Photo provided by CUNA)
The "Don't Tax My Credit Union" message is all over YouTube.com, thanks to the creativity of credit unions, their leagues, and individual members.

About 68,200 views have been wracked up by credit union videos in the "Don't Tax My Credit Union" lineup, with another 11,800 in the "Don't Tax My CU" lineup, as of mid-day Thursday, said the Credit Union National Association.

The top video, "Don't Tax My Credit Union!" by CUNAAdvocacy, has 26,734 views so far.  Another CUNAAdvocacy video, "Don't Tax My Credit Union!--The Missions and Roots of Credit Unions," has 835 views, while a  third, "Don't Tax My Credit Union!--The Competition Banks Don't Like,"  has 495 views. The three are the top most viewed of the videos.

Several leagues also have informational videos, with Vermont, Wisconsin and Pennsylvania each weighing in with submissions on YouTube.

In addition to informational videos about the tax fight, some submissions by credit unions or individuals have people expressing their love for their credit union and urging Congress to keep credit unions' tax exemption intact.  They include videos from PrimeWay FCU,  Foothill Credit Union, Scout Panther, CommonWealth One FCU, EgZoGame, Suncoast Schools FCU, CommunityAmerica CU, MemberOne FCU, and more.

Several videos refer viewers to CUNA's donttaxmycreditunion.org website.
 
To locate full lists of the videos with access to each, use the "Don't Tax My Credit Union" or "Don't Tax My CU" links. To access the CUNAAdvocacy videos, use the individual links.

Consumers CU Wraps Up Summer Of Community Work

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WAUKEGAN, Ill. (8/16/13)--Consumers CU, based in Waukegan, Ill., has wrapped up another summer filled with community outreach activities, completing a lineup of 11 events.

Click to view larger image Waukegan, Ill.-based Consumers CU's "Team CCU" participated in many community activities this summer as part of its outreach efforts. CCU employees and families are pictured here at the Round Lake Area Parade in May. (Photo provided by Consumers CU)
"Summer is a fantastic time to demonstrate the credit union's commitment to our members and the communities we serve," said Sean M. Rathjen, president.  "Long days, warm nights and a wide variety of community activities create the perfect opportunity for us to have some fun and enjoy the company of our family, friends and neighbors."

The $604 million asset CCU's 2013 activities included festivals, parades and community celebrations.

This year's schedule kicked off with the Round Lake Area Chamberfest and Expo on March 13, followed by the Round Lake Area Memorial Day Parade on May 27.  The credit union also participated in several neighborhood events such as Mundelein Days in early July. In the first two weeks of August, CCU participated in North Chicago Days, Most Blessed Trinity's Tri-Parish Kermes in Waukegan and Gurnee Days. 

CCU volunteers handed out candy, CCU shirts, coin coloring books and CCU Frisbees, as well as CCU blue tote bags to provide a way to store collectibles and other items while at the events.

Team CCU also raised funds for causes.  Its walking team raised more than $4,500 for American Cancer Society's Waukegan Relay for Life event, and CCU donated $1,400 to the March of Dimes organization in April.

Rathjen noted the "many employees who enjoy helping us support these events. Many volunteer their time on weekends, bringing along their spouses, children and other relatives to help out." Giving backing to the community is "a philosophy our founders embraced when the credit union first started in 1930, and it's a tradition we continue to support today."

Oklahoma Central CU Offers 0.99% APR Storm Shelter Loans

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FARMERS BRANCH, Texas (8/16/13)--Oklahoma Central CU, located in an area that is all too familiar with devastating tornadoes, is offering a 0.99% annual percentage rate (APR) on storm shelter loans, the Cornerstone CU League said.

Oklahoma Central, with $580 million in assets, Tulsa, Okla., has offered storm shelter loans for about two years, but following tornadoes in May, the credit union re-examined its product, and has now made it more affordable, said Gina Wilson, president/CEO (The Leaguer Aug. 15).
The credit union lowered the APR to offer members peace of mind and help members and their families feel safe during dangerous weather conditions, Wilson said.

$100K Grant To Finance Citizenship Loans

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ROANOKE, Va.  (8/16/13)--Freedom First FCU in Roanoke, Va., has won the $100,000 NEXT Seed Capital Award from Opportunity Finance Network (OFN) to introduce the American Dreamer Loan product, which will provide Roanoke-based immigrants financing they need to apply for citizenship. This is the first loan program of its kind in the area.
 
The $292.1 million asset Freedom First developed its American Dreamer Loan product to offer affordable, responsible financing to help local refugees and immigrants who are legal permanent residents apply for citizenship. The cost of naturalization services can range from roughly $2,500 to $5,000. Many struggle to find financing to cover the costs.
 
Citizenship loans are not a new product. North Side Community FCU in Chicago began making citizenship loans in 2007 to grow its Hispanic membership base (News Now Aug. 21, 2007).  
 
In partnership with Commonwealth Catholic Charities and local law firms, the Freedom First loan program will help about 30 refugees and immigrants complete the naturalization process and apply for citizenship in its first year. Refugee and immigrant groups living in the area include Somali Bantu, Vietnamese, Bosnians, Croatians, Cubans and Iraqis.
 
Many applicants get stuck when they cannot afford the legal costs of applying, explained Dave Prosser, Freedom First vice president of community development.
 
"In this country, immigration law is complex and many newcomers require personal guidance, along with legal and financial assistance, to successfully navigate the U.S. citizenship process," he said. "We recognized a need in our community to offer low-cost loans to help credit-challenged immigrants pay the costs associated with obtaining citizenship. Hence, our idea for the American Dreamer Loan was born."
 
Each year through 2016, the $100,000 NEXT Seed Capital Award will go to one community development financial institution with a promising idea for expanding its products and services to serve more low-income people and communities. The award is made by OFN as part of the Wells Fargo NEXT Awards for Opportunity Finance. Wells Fargo provides the funding.
 
Freedom First also will offer financial education to applicants to help them develop skills to build assets while working with qualified partners to achieve their goal of citizenship.

CU Tests Emergency Plans With Mock Shooting Drill

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FAIRMONT, W. Va. (8/15/13)--Fairmont (W.Va.) FCU teamed up with the city of Bridgeport (W.Va.) Office of Emergency Services to make sure the credit union is prepared for potential threats, including armed robbers and any active shooter taking people as hostages.

The $278.8 million asset credit union tested its new emergency plans and equipment on Tuesday, with three mock scenarios for its tellers to handle.  The Bridgeport Police Department also participated in the night's drills (wboy.com Aug. 13).

Bridgeport's Office of Emergency Services designed the mock scenarios, saying the training is beneficial for both the credit union and the police department.

Emergency Services Director Shaunda Rauch told the station that the drill is important so when an actual event occurs, participants will go back to what they were trained to do. If employees haven't gone through the training, "we're learning it the hard way the first time out."

CU System Briefs (08/15/2013)

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  • BRUNSWICK, Maine (8/15/13)--A grand jury in Cumberland County, Maine, indicted Joshua McCarthy, 27, of Southport, for attempted burglary at Five County CU in Bath. McCarthy faces charges of felony attempted burglary with priors, criminal mischief, refusing to submit to arrest and violation of conditions of release.  The incident occurred after midnight on July 11 when an alarm was activated at the credit union's night deposit box. Police chased two men into an adjacent trailer park. McCarthy was caught during the pursuit. The other suspect is still at large (Bangor Daily News Aug. 13) ...
  • INDIANAPOLIS (8/15/13)--Ely Lilly FCU's Cars 4 Kids promotion ties donations to a cause with auto loans and refinances.  The Indianapolis-based, $1 billion asset credit union said that when consumers finance or refinance a vehicle through Elfcu, they will enjoy a lower monthly payment and a $75 contribution to the Riley Children's Foundation. Those who buy from Indy Honda and finance through Elfcu can double the charitable contribution to $150. The offer began July 26 and will continue through Aug. 30. Those visiting the dealer will get guidance from Elfcu's auto buying partner, Members Auto Source.  The maximum Elfcu donation is $16,500 representing  220 contracts and does not include matching funds from the dealer, Members Auto Source and CO-OP Network ...

SECU's $1 Million Challenge Grant To Benefit Hospice

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RALEIGH, N.C. (8/15/13)--SECU Foundation, funded by members of State Employees' CU, Raleigh, N.C., has granted a $1 million challenge grant to the Hospice House Foundation (HHF) of Western North Carolina for a new inpatient hospice facility.
 
In honor of SECU Foundation's challenge grant to HHF's Capital Campaign, the facility will be named SECU Hospice House of Western North Carolina.
 
The area's first Hospice House will be located on a 2.74-acre site in Franklin, N.C. The inpatient facility will offer peaceful surroundings and the comforts of home to area patients and their families in need of end-of-life or respite-care services. The house will include six private patient suites, residential-style living areas, a family kitchen, dining room, chapel and exterior gardens.

Banking At Bottom Spot On Trust Index

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CHICAGO (8/15/13)--The banking industry hit rock bottom in a global study of consumers' trust among 11 industries, with one in two people saying they were aware of major bank scandals and one-third of thee reporting the scandals had impacted their trust in banks.
 
Credit unions, which have topped a number of consumer trust surveys as the most trusted financial institutions, are not included in the survey by 2013 Edelman Trust Barometer, a global public relations firm founded in Chicago.

In the past three months, according to the Credit Union National Association, credit unions have received high scores in the Temkin Ratings survey on experience, loyalty, forgiveness, trust, customer service and Web experience (News Now Aug. 14); scored the highest in Foresee's Financial Services Benchmark on customer satisfaction (News Now June 5); and were best in all satisfaction segments of the 2013 Credit Union Satisfaction Index from CFI Group and the American Customer Satisfaction Index (News Now June 5);
 
Banks and financial services each tied for last place, with 50% of consumers surveyed indicating they would trust each industry (The Financial Brand Aug. 8). Among U.S. consumers, banks fared worse, with a 42% trust factor.  Financial services included credit card companies, insurance companies and financial advisers in wealth management. Trust in banks was 11 points lower than it was in 2008, said Edelman.
 
"The barometer finds that this lack of trust is driven by poor performance and the perception of unethical behavior," said Edelman in a press release.
 
Banks received poor ratings on lending to small business, providing home mortgage loans, offering reasonable credit cards, trading and investing in government debt, and overseeing initial public offerings. The only area they scored positive in was ensuring customer privacy/security.
 
The industries trusted the most, and the percentage of people trusting them, included:
  • Technology, 77%;
  • Automotive, 69%;
  • Food and beverage, 66%;
  • Consumer packaged goods, 65%;
  • Telecommunications, 62%;
  • Brewing and spirits, 62%;
  • Energy, 59%;
  • Pharmaceuticals, 58%;
  • Media, 53%;
  • Banks, 50%; and
  • Financial services, 50%.
Consumers who said they were aware of the banking scandals said the top three reasons were: corporate corruption, 25%; banking culture driven by compensation and bonuses, 23%; and a lack of regulation, 20%.
 
Fostering service excellence is one of the key prongs to CUNA's and the state leagues' Unite for Good campaign, which aims to achieve the vision where Americans choose credit unions as their best financial partner.

Special Report: North Carolina CU Keeps Money Local With CD

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ASHVILLE, N.C. (8/15/13)--Carolina Mountains CU, a division of Durham, N.C.-based Self-Help CU offers a certificate of deposit (CD) that allows savers to make a difference locally.
 
The community development credit union offers a Go Local CD to members of its Carolina Mountains CU division in Asheville, N.C. Funds that members invest in the CD are used to fund home mortgages as well as small-business auto and signature loans. The Go Local CD will also also helps the credit union support local economic-development projects. Mortgages funded by the CD will never be sold to the secondary market, the credit union said.
 
CD terms range from three months to five years.
 
"It brings our economic development mission, as a community development credit union and a community development financial institution, to the fore," said Jane Hatley, Western North Carolina regional director for Self-Help CU.
 
The program was created through a partnership with the Asheville Grown Business Alliance, a grassroots organization whose mission is to support independently owned businesses in the community. The group says that local independent business cycles three times more money back into the local economy and gives greater support to a community's non-profit and civic needs.
 
"The Go Local movement is very strong in Asheville, and Asheville Grown has a very strong presence here," Hatley said. About 400 businesses display Go Local posters and distribute Go Local cards that provide residents discounts on products and services. The CD provides residents with another opportunity to ensure their money stays within the local economy, Hatley said.
 
The idea for the Go Local CD was inspired by Michael Shurman, activist and author of the book "Local Dollars, Local Sense," who suggested the idea while speaking at a conference about supporting local businesses. Asheville Grown Director Franzi Charen suggested the credit union use the Asheville Grown logo in marketing the CD and slogan, "Put Your Money Where Your Heart Is: Love Western North Carolina: Invest Local" in marketing the CD.
 
Since the launch of the program in April, the credit union has raised $800,000 through the CD. Among the businesses recent loans have funded are a small hand-made lotion company, a trucking company, an auto maintenance shop and a custom tile business.
 
Although the credit union held a kickoff luncheon with local businesses when it launched the CD, most of the marketing has been through word of mouth. "These loans are making more local business possible, and that's exciting for people," Hatley said. 
 
This article is part of a News Now series of exclusive, special reports on credit unions' outreach efforts and innovative ideas. Fostering service excellence and raising awareness about the value credit unions provide their members and communities are two prongs in credit unions' Unite For Good campaign toward a vision in which Americans choose credit unions as their best financial provider.

FBI Warns FIs Of Possible Sept. 11 Cyberthreat

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WASHINGTON (8/15/13)--Credit unions are being warned about a possible cyberthreat to both U.S.- and foreign-based financial institutions  in September, and the Credit Union National Association is encouraging credit unions to be on the alert.
 
The California and Nevada Credit Union Leagues as well as California's state credit union regulator, the California Department of Business Oversight, sent out alerts Tuesday, based on a Federal Bureau of Investigation (FBI) Advisory that said the potential threat would be "on or about Sept. 11.)
 
"Although previous iterations of this effort have had limited if any impact to the targeted entities, the FBI encourages the private sector to take reasonable steps to secure cyberinfrastructure in light of possible threats," said the advisory.
 
"CUNA believes cybersecurity threats will be an ongoing issue for credit unions and the entire financial sector," said Paul Gentile, CUNA executive vice president of strategic communications and engagement.  "We urge credit unions to maintain a robust enterprise risk management program that includes policies and procedures for cybersecurity attacks.
 
"CUNA continues to work with system players, lawmakers and regulators to ensure the credit union system is as well-prepared as possible for such attacks," Gentile said.
 
The FBI encouraged recipients of its advisory to report information concerning suspicious activity to the local field office Cyber Task Force, to its website (use the link), or contact the FBI's 24/7 Cyber Watch Center at 855-292-3937.  When available, the report should include date, time, location, type of activity, number of people, type of equipment used for the activity, the name of the submitting company or organization, and a designated contact.

July Bankruptcy Filings Rise 5%, Down 10% From Year Ago

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ALEXANDRIA, Va. (8/15/13)--Total U.S. bankruptcy filings for July decreased 10%, compared with July 2012, according to data provided by Epiq Systems Inc.--a provider of managed technology for the global legal profession--and a partner with the American Bankruptcy Institute (ABI).

"Year-over-year bankruptcy figures continue to drop as consumers and businesses shore up their balance sheets amid sustained low interest rates," said ABI Executive Director Samuel J. Gerdano. "We remain on pace this year for perhaps the lowest total new bankruptcies since before the financial crisis in 2008."

July bankruptcy filings totaled 87,684, down from the 97,287 filings registered in July 2012. Total commercial filings for July were 3,581--a 23% decrease from the 4,681 filings during the same period in 2012. Commercial chapter 11 filings totaled 536 in July, a 24% decline from the 702 filed in July 2012. The 84,103 total noncommercial filings for July were a 9% drop from the July 2012 noncommercial filing total of 92,606.

The July bankruptcy filings did show slight increases from June with total filings up 5% from June's 83,603. Noncommercial filings also rose 5% in July from June's 80,135, and commercial filings gained 3% from the June's 3,468. Commercial chapter 11 filings registered the biggest jump as the July filings increased 8% over the 497 filings in June.

The average nationwide per capita bankruptcy-filing rate for the first seven calendar months of 2013 decreased slightly to 3.49 (total filings per 1,000 per population) from the 3.51 rate for the first six months of the year. The average daily filing total in July was 2,829--a 10% decline from the 3,138 total daily filings in July 2012.

States with the highest per capita filing rate (total filings per 1,000 population) through the first seven months of 2013 were:

1. Tennessee (6.73);
2. Georgia (5.79);
3. Alabama (5.72);
4. Utah (5.39); and
5. Illinois (5.33).

Chili Challenge Heats Up, Builds Awareness For San Diego CUs

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SAN DIEGO (8/15/13--The Xpress Data Inc. Credit Union Chili Challenge, held at the Del Mar Thoroughbred Club Racetrack in San Diego Aug. 3, hosted 10 California credit unions competing for trophies, bragging rights and $10,000 in prize money for their charities.
 
"This event really breaks the mold of traditional credit union gatherings outside the workplace," said Mike Cooper, president/CEO of XDI.
 
"Our mission here was to provide enhanced credit union awareness to consumers at a heavily attended public venue [more than 20,000 patrons were at the racetrack that day] but also show that this industry is committed to giving back and supporting its community charities--just like we at XDI are committed to supporting our credit union community," Cooper said.
 
First place winner was Pacific Marine CU's Chilis-a-Blazin' team, led by Chief Cook Lynette Chubb. It received a $5,000 cash donation for its charity, Rady Children's Hospitals. As first place winner, the team will compete in the Homestyle Division of the 47th Annual International Chili Society (ICS) World's Championship Chili Cookoff in Palm Springs, Calif., Oct. 11-13.
 
Second place went to United Services CU's team, Chili Chili Bang Bang, led by Chief Cook Laura Poerink. The team earned $3,500 to donate to their charity, Alternative Family Services of Almeda. Chili Chili Bang Bang also won the People's Choice Award.
 
In third place was USE CU's Team Fat Chili, led by Chief Cook Steve Ewers. The team earned $1,500 for the San Diego State University's Alumni Association  Scholarship Program.
 
Other competitors included: Hot Pink Chili Peppers from Kinecta FCU; Cabrillo Cajuns from Cabrillo CU; Hillbilly Chili from Chevron Valley CU (winner of Best Booth Decoration); The Searing Eagles from Eagle Community CU; Chili Gone Wild! From OE FCU, winner of Best Showmanship; Team Nougat from San Francisco Fire FCU; and Red Hot Chilis from POPA FCU
 
Six of the competing credit unions held internal chili cook-offs to select the best chili to represent the credit unions.  Schools First FCU made an additional financial contribution to support the event.
 
Plans are underway to host next year's XDI CU Chili Challenge to a bigger field of competitors, said XDI, a service company focused on customization, production and delivery of credit union member correspondence.
 
Even chili cook-offs can build awareness of the cooperative philosophy of credit unions and their community spirit. Raising awareness of the value of credit unions to members and the community is one of three components of the Unite for Good campaign, the Credit Union National Association's and the state leagues' campaign to achieve the strategic vision in which Americans choose credit unions as their best financial partner.

Council Paper: CUs Fight For Small-loan Market

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MADISON, Wis. (8/15/13)--The market for unsecured loans--previously the domain of credit unions--has largely been taken over by credit cards, payday loans and peer-to-pear lending, as credit unions fight to remain relevant in a crowded marketplace, according to a new white paper from the CUNA Lending Council.
 
"Fighting for our Turf: Threats to Credit Union Small Loan Markets" explores how credit unions can capitalize on opportunities within the marketplace and improve their small-loan portfolios.
 
Among the "lessons learned" the report offers:
  • Credit cards have taken over the small-loan market, according to a number of lending professionals. But the American consumer is wary of taking on more debt and wants to pay down expensive credit card debt. Consolidation loans to pay down this type of debt are growing in popularity.
  • Payday loan customers are a small subset of the membership, typically 1% to 2%. They frequently pass on financial counseling and want their funds immediately. Each credit union must decide whether it makes sense to serve this segment.
  • Payday loan alternatives and small loans can be expensive to make, but if fulfilled online with automated decision-making and minimal staff involvement, they can generate revenue. Members receiving these loans will likely come back for more services if the experience was positive.
  • Peer-to-peer lending had a rocky start in the industry, but with new technology and community based credit unions working through a credit union service organization, a market opportunity exists.
  • Point-of-sale financing is an untapped market with more than an estimated 1.5 million retailers and medical/dental offices that need reliable and community-based financing for their customers. The technology exists to make this happen.
  • Point-of-sale offers a chance to deepen relationships with existing select-employee groups if credit unions offer relevant products or services. It can also provide an opportunity for furthering business lending efforts.
  • By adjusting underwriting standards--sometimes just slightly--net interest margin can increase while prudent lending is maintained. This includes increasing the loan-to-value ratios, lowering the Fair Isaac credit scores, and especially working with more "B" and "C" borrowers.
  • Messaging should revolve around what the loan can do, rather than the loan itself. Is the experience of obtaining a loan at the branch or Internet a quick, convenient and positive one?
  • A focus group of members can reveal answers.
To download the whitepaper, use the link.

Fifteen Execs Join Filene's i3 Program

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MADISON, Wis. (8/15/13)--Fifteen credit union executives joined Filene Research Institute's i3 innovation program, which fosters the development of new ideas and innovations for credit unions.
 
"If innovation were simply about ideas, our job would be a lot easier," said Matt Davis, innovation director at Filene. "Making ideas happen requires a rare skill set. We look for credit union professionals who are passionate about fixing problems for consumers, have a track record of breathing life into new ideas, can excite others about their ideas and have the best chance of leading credit unions for the next generation."  
 
Each new i3 member will serve a two-year term that kicks off in October at Filene's  big.bright.minds event at Princeton University.  
 
Ideas developed in the i3 program since its inception in 2003 have gone on to change state laws, improve the financial lives of millions of consumers, save millions of dollars for credit unions and drive new members to the credit union system, said Filene. Ideas tested through Filene's innovation lab include Prize-linked Savings, Debt in Focus/SavvyMoney, SaveUp, Savings Revolution and minTuition.
 
More than 20 former i3 members went on to be CEO of a credit union or credit union industry organization. The program, supported by PSCU, develops an innovation competency for the next generation of credit union CEOs using the Filene Method, an innovation curriculum developed from a decade of experience in creating, testing and implementing ideas for credit unions and their members.   
 
The newest i3 members are:
  • Laurie Butz, senior vice president, human resources, Community First CU, Appleton, Wis.;
  • Scott Coe, senior vice president, marketing, CoastHills FCU, Lompoc, Calif.;
  • Douglas Ebner, manager, business technology and innovation, First West CU, Langley, B.C. (Canada);
  • Kathi Goodell, project coordinator, NorthCountry FCU, South Burlington, Vt.;
  • Mark Hamid, vice president-chief of retail operations, Fort Lee FCU, Prince George, Va.;
 
  • Jeremy Hayes, senior vice president, Assemblies of God CU, Springfield, Mo.;
  • Rachel Langtry, vice president of marketing and communications, Credit Union 1, Anchorage, Alaska;
  • Rob Lefkowicz, vice president of member service delivery, Park Side FCU, Whitefish, Mont.;
  • Evelyn Royer, vice president, risk management, Purdue FCU, West Lafayette, Ind.;
  • Serese Selanders, vice president, sales and development, Affinity CU, Des Moines, Iowa;
 
  • Jennifer Sider, development officer, Duke University FCU, Durham, N.C.;
  • Matt Vance, senior product development supervisor, Salal CU, Seattle;
  • Suzanne Weinstein, chief financial officer, Orlando FCU ;
  • Jennifer Wolfe, assistant vice president, business systems delivery, Partners FCU, Orlando; and
  • Brett Wooden, senior vice president of marketing and innovation, Cy-Fair FCU, Houston.
For more information on Filene's i3 innovation program, use the link.

Idaho League Notes Growth of State's CUs

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BOISE, Idaho (8/14/13)--A better economy and more new loans have helped improve Idaho credit union performance in 2013, according to the Idaho Credit Union League.
 
The economic and business climate in the state provides a fertile environment for credit unions, Chris Johnson, league president/CEO, told the Idaho Business Review (Aug. 2). Johnson said he is "exceedingly optimistic" about the future of credit unions in the state.
 
Loan demand, which was weak during the recession, has increased, said Gavin Gee, director of the Idaho Department of Finance, which oversees state-chartered credit unions.
 
Idaho Central CU, Chubbuck, was ranked the best-performing credit union in the U.S. in 2012 by SNL Financial, a financial information firm in Charlottesville, Va., said ICCU CEO Kent Oram in the article.
 
An improved housing market is driving credit union performance, both Oram and Gee said. Mortgage refinancing initiated the recovery, but has slowed recently, Oram added.
 
A balanced state budget and lucrative state bond market also helped, Johnson said.
 
One worry for Idaho credit unions is the increasing burden of regulations. Rules related to the Dodd-Frank Act and Consumer Financial Protection Bureau (CFPB) are chief concerns, Oram noted.
 
The Credit Union National Association continues to work with the U.S. Congress, the CFPB and the National Credit Union Administration to minimize regulatory burdens on credit unions. Recently, CUNA reiterated that CFPB and NCUA should conduct detailed cost-benefit analyses on proposed and final regulations to curb the "creeping complexity" of burdensome regulations on credit unions--especially small credit unions.

CU System Briefs (08/14/2013)

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  • HARRISBURG, Pa. (8/14/13)--Joseph Dunn,  who served as treasurer and was the former CEO of Pittsburgh Firefighter's CU, died on Aug. 9, according to the Pennsylvania Credit Union Association (Life is a Highway Aug. 13). He was 84. A long-time credit union professional and volunteer, Dunn was a retired veteran of the 101st Airborne and was a Pittsburgh firefighter for 28 years. Survivors include his wife, Marie; five children including daughter Marie O'Brien, the current CEO of Pittsburgh Firefighter's FCU; and 14 grandchildren (Post-Gazette.com  and Legacy.com). Services were Tuesday ...

Alabama Regulator: CUs 'Doing Well'

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MONTGOMERY, Ala. (8/14/13)--Alabama credit unions overall performed well last year, according to the Alabama Credit Union Administration.
 
For the state's 68 state-chartered credit unions, there was growth in 2012 and "in general, everybody's doing well," said Larry Morgan, head of ACUA (Montgomery Advertiser Aug. 4).

Credit union shares and deposits jumped 10.6% in 2012, while membership in credit unions increased 10%, said the agency's annual statewide report.   
 
Although growth at Alabama state-chartered credit unions cannot be labeled as "anything spectacular," it has been healthy and steady, Morgan told the publication.
 
Also, in first quarter 2013, credit unions nationwide tallied 95.7 million members--nearly a 2% gain from first quarter 2012, according to financial information and analysis firm SNL Financials' recent report. The numbers are consistent with statistics from the Credit Union National Association.
 
Credit unions added 2.7 million members nationwide in the past five quarters--which is more than the combined total of gains in the prior 11 quarters, said the SNL report.

Consumers Typically Put CUs On Top For Satisfaction

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CHICAGO (8/14/13)--Research about financial institutions'  (FIs) call center hold times has provided an opportunity for the Credit Union National Association to tell the Chicago Tribune  how credit unions continually beat banks in overall member/customer satisfaction.
 
Paul Gentile, CUNA executive vice president of strategic communications and engagement, told the publication Tuesday that more than two million consumers joined a credit union in 2012, with another 700,000 doing so in first quarter of 2013.  
 
Credit unions provide great rates, low fees and excellent member service, and also win on trust. Gentile pointed out results from the Chicago Booth /Kellogg School Financial Trust Index that shows credit unions beat banks on trust, with 62% of people surveyed trusting credit unions--compared with 56% for local banks and 28% for national banks.
 
The latest study, by Lake Bluff, Ill.-based Moebs Services, found that call centers at FIs--including credit unions--are more efficient than at most retailers at answering their phones, with 53.1% of call centers answering on the first ring. "If you wait when you call a FI, you don't wait long," said Michael Moebs, CEO and economist at the economic research firm.
 
The study found that asset size matters, with smaller asset FIs having substantially fewer callers with hold time--44.1%--compared with larger depositories. It noted that FIs with $25 billion to $50 billion have 64.3% of their callers with wait time, with a minute and a half difference between large assets FIs and smaller ones.
 
"The study is a strong response to those in Congress, financial institution regulators and consumer advocates because it shows FIs--even the largest--really do try to respond to their consumers," said Moebs in a press release. "These are results banks and credit unions should be proud to have."
 
Raising awareness about the value of credit unions to members and the community is one of three components to CUNA's and the state leagues' Unite for Good campaign, which strives toward the strategic vision in which Americans choose credit unions as their best financial partner.

Study Reveals Best Practices To Improve CU Member Support

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SCOTTSDALE, Ariz. (8/14/13)--Significant opportunities remain for credit unions to improve their member support channels--especially because of the big gap between high and low performers, according to results of a new benchmarking study from Cornerstone Advisors.
 
Cornerstone is a management consulting firm focused on large, progressive credit unions and mid-size banks.
 
"Credit unions for the most part are reporting improved bottom lines," said Scott Sommer, Cornerstone Advisors president/CEO. "The general theme we're seeing from these numbers, however, is that with a bit more focused effort, they could be experiencing even better returns as a result of more satisfied members.

"With vast gaps between high and low performers in lending productivity, delivery channels and other measures, there is so much room for improvement," Sommer added. "If credit unions continue to gain high-value market share while scaling their efficiencies, adopting industry best practices and reinventing their delivery, they will be financial services contenders in the years ahead."

The benchmarking study of 62 credit unions with assets of more than $250 million provided these key findings:
  • Combined Internet and mobile log-ins have surpassed in-person teller transactions, revealing a clear shift in member service delivery channels to "click" from "brick."
  • Active mobile users at median (the exact middle--above and below it there is an equal number) credit unions hold nearly 7% of all checking accounts. Credit unions that are high performance level (75th percentile) saw nearly 20% held by mobile users.
  • While median credit unions earned roughly $150 per year in fee income from checking accounts, there remains an $85 gap between high and low performers, illustrating room for improvement at the lesser-performing credit unions.
  • Only 16% of consumer loan applications are originated through the Internet at the median credit union.
  • Median mortgage loans per-mortgage origination full-time equivalent per month were 4.4. While this is a slight increase since 2008, it trails the high-performing credit unions, which reported 6.4.
  • Technology spending as a function of size has decreased slightly from 2008 to .0354% of assets. The only technology spending showing any growth was strategic systems, which consists of specialized applications in loan origination, branch automation, analytics, document imaging and investment management.
The median credit union opened 1.8 new accounts for each one that it closed--up 20% from 2008, according to survey results, published in July as "The Cornerstone Report: Benchmarks and Best Practices for Credit Unions." Yet, even with the new member focus, median products-per-household dropped 28%, to 2.52.

CUs' 'Don't Tax' Message Resonates

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MADISON, Wis. (8/14/13)--State credit union leagues and associations continue carrying the "Don't Tax My Credit Union" message to the media and representatives of their congressional districts. This week saw an opinion-editorial on the credit union tax exemption, two leagues reporting congressional contacts by credit unions in their states, and more visits to congressional district offices.
 
In an opinion-editorial in the Duluth News Tribune (Aug. 9), Minnesota Credit Union Network President/CEO Mark D. Cummins made readers aware that credit unions' tax-exempt status is in danger during federal tax reform.
 
"Eliminating this exemption represents the most serious threat to credit unions--and our communities--that we've ever faced," Cummins wrote, noting that the exemption should be kept because "credit unions support and strengthen communities."
 
As local institutions, credit unions "make their communities their No. 1 priority--above making a profit," Cummins wrote. "Any benefits credit unions receive from their tax-exempt status are passed on to their members and their communities. Credit unions also strengthen their communities by paying millions of dollars in property, sales and payroll taxes each year."
 
He cited a Discover U.S. Spending Monitor survey that found members are more confident in the economy and their personal finances than non-members. "What this means is that credit unions help build consumer confidence, leading to stronger communities," he said.
 
Their not-for-profit cooperative structure also provides an alternative to for-profit banks and provides benefits and financial balance, while maximizing their member/owners' financial gain with better rates, reduced fees and customized products. Credit unions "put money back into Minnesotans' pockets," he said, noting that all savings from the tax exemption "are passed on to members, who are owners of their credit unions.  He also pointed out for every $1 of tax exemption, $10 goes back to members and the communities.
 
Click to view larger image Pennsylvania credit unions met Thursday to support credit unions' tax exemption and discuss regulatory burdens with Char MacDonald, legislative director for U.S. Rep. Allyson Schwartz (D-Pa.) at Schwartz's Jenkintown, Pa., office. Schwartz  is a member of the House Ways and Means Committee overseeing tax code reform. From left are:  John King, Freedom CU; MacDonald; Ceil and Joe Grady of American Heritage FCU; and Nate Muniz of PSECU. (Photo provided by the Pennsylvania Credit Union Association)
Several leagues reported visits with legislative staff in congressional representatives' district offices.  For example, the Pennsylvania Credit Union Association, reported visits with two representatives.  See related News Now story: Ways & Means Chair: I Will Look To Relieve CU Burden for a summary of PCUA's visit with House Committee on Financial Services member U.S. Rep. Keith Rothfus (R-Pa.) 
 
Several Pennsylvania credit union leaders met Thursday with Char MacDonald, legislative director for U.S. Rep. Allyson Schwartz (D-Pa.) at her Jenkintown office. Discussion primarily focused on the tax code reform and regulatory burdens, said PCUA (Life is a Highway Aug. 9). Schwartz is a member of the House Ways and Means Committee, which has authority over the tax code reform discussions and drafting.  Participating were John King of Freedom CU in Warminster, Ceil and Joe Grady of American Heritage FCU in Philadelphia, Nate Muniz of PSECU in Harrisburg and Christina Mihalik, PCUA association vice president of governmental affairs.
 
Two leagues provided updates on the number of contacts made with congressional representatives by credit unions in their states. 
 
In Maine, credit union staff and volunteers generated more than 2,000 contacts with members of Congress, urging them to keep the credit union tax exemption in place, said the Maine Credit Union League. It "has determined that the time is now for credit unions to engage the state's 630,000 credit union members in the effort.  Maine is one of the strongest cooperative states in the country, and credit unions are the largest co-op so this is an opportunity to demonstrate that strength," said league President John Murphy (Weekly Update Aug. 9).  He noted the league has posters, brochures, sample letters and newsletter articles to assist, as does the Credit Union National Association's microsite, donttaxmycreditunion.org.
 
The Northwest Credit Union Association reported in its Anthem Recap (Aug. 9) that as of Aug. 5, credit union advocates in Washington and Oregon had made 28,000 congressional contacts. "These contacts are making a difference," said NWCUA Vice President of Advocacy Jennifer Wagner, with 14,416 of the messages from Washington and 13,700 filed by Oregon credit union contacts.  Most were made directly through CUNA's donttaxmycreditunion.org site, although many posted in-branch petitions signed by thousands of members.
 
NWCUA advised credit unions to connect with members of Congress during the August congressional recess at community events.  NWCUA also scheduled a "Tweet Tuesday" yesterday calling on members to tweet their Don't Tax My Credit Union message to their representatives in Congress.

Temkin Survey: CUs Continue High Scores In All Areas

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WABAN, Mass. (8/14/13)--Credit unions continue to be held in high regard by their members, according to a new Temkin Ratings survey. This time credit unions are the only financial institutions that made it into the top 20 of all five consumer feedback categories.
 
Credit unions did well in the areas of experience, loyalty, forgiveness, trust, customer service and Web experience. Their main competition was a financial non-profit cooperative bank, USAA.
 
The Waban, Mass.-based Temkin Group asks consumers to rate their experiences with more than 100 companies, including individual banks.  Credit unions are included as a combined group, with no particular credit union being rated.
 
Here are the ratings:
  • Customer service--how satisfied consumers were with recent customer service experience. Credit unions beat all the banks. Credit unions, Publix grocery and Hy-Vee grocery all received the 71%--the highest score. The nearest banks were USAA (position No. 16) and PNC Bank (No. 19), each with 64% scores.
  • Trust--how much consumers trust the firms. Credit unions went head to head with USAA insurance and USAA bank and attained the No. 3 spot with 77%, with only two points separating them from No. 1 and No. 2. The second highest bank ranked 91st, with 56%.
  • Experience-- functional, accessible and emotional. Three grocery stores led the category, with Publix scoring the highest at 84%. Credit unions were in position 19, with a score of 79%, much higher than the banks. The first mention of a bank, USAA, was in position 28 with a score of 78%; the second mention of a bank  in the 61st spot, with a 74% score.
  • Loyalty--willingness to buy more, reluctance to switch business away and likelihood to recommend the institution.  Sam's Club and Aldi beat the competition with USAA scoring 63% for third place. Credit unions were sixth, with 61%  The second highest bank was in the 30th spot, with  54%.
  • Forgiveness--how likely consumers would be to forgive a company for a mistake. Advantage Rental Car and USAA topped the group with 61% and 60% scores, respectively, while credit unions were ninth with 47%. The second highest bank was in the 150th position, with 28%.
  • Web experience--how satisfied with the company's website experience. No surprise here: Amazon.com scored highest, with 77%. Credit unions were in the eighth slot, with 69%, behind USAA and Regions.
Earlier this year, credit unions took first place in the industry for the second straight year in a customer experience survey by Temkin Group. Their  rating was 79%, compared with the banking sector's average score of 68.6% (News Now March 29).

LSCU Announces State CUNA Award Winners

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BIRMINGHAM, Ala., and TALLAHASSEE, Fla., (8/14/13)--The League of Southeastern Credit Unions & Affiliates awarded eight credit unions from Alabama and Florida with 12 Dora Maxwell, Louise Herring and Alphonse Desjardins awards.
 
Army Aviation Center FCU, Daleville, Ala.; First Commerce CU, Tallahassee, Fla.; and CFE FCU, Lake Mary, Fla., each received multiple awards. Army Aviation Center won a first-place Dora Maxwell Social Responsibility award, a first-place Desjardins Financial Education Youth award and a second-place Louise Herring Philosophy in Action award.
 
Winning the awards "affirms our dedication to the credit union philosophy of 'people helping people' and giving back to the communities we serve," said Lisa Hales, Army Aviation Center FCU vice president of marketing. "Giving back to our communities is a big part of who we are and what we do at AACFCU."
 
CFE FCU won a first-place Herring award and a second-place Maxwell award. First Commerce CU, based in Tallahassee, won a first-place Maxwell award and a first-place Herring award.
 
"Commitment to community is one of our core values," said Cecilia Homison, CEO of First Commerce CU. "Through the Champions for Charity initiative, we reach out to our
community and call on their passion for Seminole sports programs to support charitable
organizations in their quest for funding."
 
Also taking home first-place honors in the Dora Maxwell category were two Tallahassee credit unions, Florida State University CU and Tallahassee-Leon FCU. Alabama CU, Tuscaloosa, also received a first-place Dora Maxwell award.
 
Each first-place winner's entry progresses to the Credit Union National Association's national award consideration. The winners are honored at the 2014 CUNA Government Affairs Conference in Washington, D.C.

Experian: Auto Repos Are Lowest On Record

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SCHAUMBURG, Ill. (8/14/13)--Vehicle repossessions dropped during second quarter 2013 by 14.8% to the lowest rate since Experian Automotive began tracking the data seven years ago, announced Experian Tuesday.
 
Roughly 0.36% of all vehicle loans ended in a repossession, down from 0.43% in second quarter 2012.  The change represented a 10.4% decrease from the previous low of 0.41% in second quarter of 2006.
 
The total balance of outstanding automotive loans grew to nearly $751 billion, compared with $682 billion in second quarter of 2012.  Banks increased their total dollar volume by $24 billion, while credit unions increased $18 billion, finance companies $16 billion and captive finance companies $11 billion, said Experian.
 
Of credit unions' $627.6 billion loans outstanding for June, the most recent figure available, 10.8% are in new-auto loans and 19.6% are in used-auto loans, according to the Credit Union Monthly Estimates from the Credit Union National Association.  CUNA does not track repossession statistics.
 
Thirty-day delinquencies dropped 5.6% in second quarter to 2.38%, from 2.52% in second quarter 2012, said Experian. The total is two basis points higher than first quarter 2013 delinquencies and is the lowest for a second quarter since 2006.
 
Sixty-day delinquencies remained flat at a low 0.58% as the auto lending market stayed strong, said Experian. For second quarter 2006, these totaled less than 0.53%. The 2013 figure is at the next-lowest second-quarter point.
 
The repossession and delinquency rates for the quarter were "lower than expected," said Melinda Zabritski, Experian's senior director of Automotive Credit. "The seasonality of the market usually has the first quarter showing the lowest 30-day delinquency rates, but even with the total automotive loan portfolio growing, consumers in the second quarter have done an exceptional job of meeting their financial obligations to keep the market strong," Zabritski said.
 
Other findings:
  • Balances of 30-day delinquencies balance rose by $761 million in second quarter but represent 1.96% of the total loan balance, down from 2.05% in the same quarter last year.
  • Sixty-day delinquencies were 0.42% of the total loan portfolio value, the same as in second quarter 2012.
  • Nonprime, subprime and deep-subprime loans account for 35.2% of all open vehicle loans in second quarter, up from 34.9% in second quarter 2012.
  • Average charge-off amounts for defaulted loans were $7,218 for second quarter, a $450 increase from $6,768 in second quarter of 2012, said Experian.

North Carolina To Implement ELT Program

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PHILADELPHIA (8/14/13)--The North Carolina Division of Motor Vehicles (DMV) will implement an electronic lien and title (ELT) program by July 1, 2014, as required by Senate Bill 407, signed by Gov. Pat McCrory.
 
Within a year of implementation, credit unions, banks and other automotive lenders in the state will begin to replace their paper based liens with an electronic exchange of data with the DMV.
 
Rather than using internal resources to fund the design, development and ongoing operation of ELT, the DMV retains the option to select third-party suppliers to develop and manage the system at no cost to the state, said VINTek, which assisted with passage of the ELT law in the state.
 
As the 10th largest state in terms of new annual vehicle/truck registration, the state can reduce operating costs, increase customer satisfaction and reduce fraud by eliminating paper vehicle titles with liens, said the Philadelphia-based provider of automotive collateral management, ELT services and direct finance processing.

"As North Carolina positions itself to become the 20th state to initiate ELT, we see confirmation of the growing interest in ELT at DMVs across the country," said Larry Highbloom, president of VINtek. "The North Carolina DMV and automotive lenders in the state can anticipate operational improvements and efficiencies, as well as reduced stress resulting from the reduction in paper titles."

 

CU System Briefs (08/13/2013)

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  • KNOXVILLE, Tenn. (8/13/13)--A Knoxville, Tenn., man was arrested Thursday evening in connection with the robbery Wednesday of Oak Ridge, Tenn.-based ORNL FCU. The branch robbed was in a Kroger grocery store. Arrested was David Wayne Wilson, 33. The robbery occurred at about 6 p.m., when a man entered the credit union, said he had a weapon and gave the teller a demand note. He fled with an undisclosed amount of cash in a black pickup truck. Wilson was arrested without incident at residence (The Daily Times Aug. 9) ...
  • MARION, Ind. (8/13/13)--Charles Street FCU, based in Marion, Ind., plans to move downtown and change its name to Riverside CU (Chronicle-Tribune Aug. 11). Tim Moorman, CEO/president, said the new location will provide better traffic flow and help revitalize an area of downtown that has been distressed for decades. The new 6,400-square-foot building will be ready in six to eight months. The $30.3 million asset credit union will keep some operations, mostly transactions, in its old building, while the lending and corporate headquarters will move to the new location. The name change will occur later this month ...
  • NEW BEDFORD, Mass., and BROCKTON, Mass.(8/13/13)--Two Massachusetts credit unions have asked the state Division of Banks for permission to expand their membership.  Brockton-based Crescent CU, a $401 million asset credit union, plans to allow members from Barnstable, Bristol, Dukes, Norfolk, Plymouth and Suffolk counties and to expand into five counties in Rhode Island and certain communities in Middlesex and Worcester counties.  New Bedford (Mass.) CU, a $120 million asset credit union, is seeking to allow members from Barnstable, Bristol and Plymouth counties, as well as in Little Compton and Tiverton, R.I. (Boston Business Journal Online Aug. 9) ...
  • RALEIGH, N.C. (8/13/13)--
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    Twenty-five students from Hertford County, N.C.'s, 4-H summer Science, Technology, Engineering and Math (STEM) camp visited the outdoor community garden project sponsored by Raleigh, N.C.-based State Employees CU's Ahoskie branch. The educational field trip connected the 4-H program's mission of experiential learning and provided students a hands-on experience to see how fresh farm produce is grown and harvested. Students dug for potatoes and picked vegetables to take back to class to study, cook and taste. The group of fifth through eighth graders also toured the branch and learned more about the credit union's involvement in the community.  Pictured is James Eure (in hat), senior vice president of SECU's Ahoskie branch with some students. (Photo provided by the State Employees' CU) ...
  • ALBUQUERQUE, N.M. (8/13/13)--David Woodruff, president/CEO of Zia CU in Los Alamos, N.M., has been appointed by Credit Union Association of New Mexico Board Chairman Chris Fitzgerald as the new chairman of CUANM's Governmental Affairs Committee. The GAC works to forge relationships with congressional representatives and keep them informed about the needs and concerns of the state's credit unions and members. "I believe individual leaders from credit unions have a big impact with our legislators when we take the time to get to know our representatives and help them better understand what makes us different, appreciate the significant number of constituents we represent, and realize how our member/consumer oriented business decisions benefit their constituents and the communities they represent," Woodruff said.  He has been with Zia CU since November . Previously he was vice president of lending at CommonWealth One FCU, Alexandria, Va., for more than 11 years, and with Numerica CU, Spokane Valley, Wash., for seven years ...

Goldman Sachs Seeks Delay In RMBS Lawsuit

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LOS ANGELES (8/13/13)--Goldman, Sachs & Co.  has asked a federal court in Los Angeles to stay the discovery process in the National Credit Union Administration's  lawsuit against the firm over residential mortgage-backed securities (RMBS), until an appellate court resolves the matter of whether NCUA's lawsuits against several brokerage firms are time-barred.
 
NCUA had brought 47 claims for $491 million in losses related to 21 certificates and 13 RMBS offerings in the Goldman Sachs case, which is one of seven similar lawsuits the agency has filed against Wall Street banks over losses incurred by U.S. Central FCU and Western Corporate FCU.
 
The corporate credit unions no longer exist and NCUA has argued that the offering documents for the certificates materially misrepresented the risk involved in investing in the RMBS and contributed to the corporates' demise.
 
In the motion filed Thursday with the U.S. District Court for the Central District of California, Goldman Sachs said the certificates sold were backed by almost 45,000 loans and that some of the non-parties such as loan originators Indy Mac, First Franklin and Countrywide, depositors such as Residential Accredit Loans Inc., and even the corporates have failed "and obtaining their records will require substantial effort."
 
It is requested the stay of discovery because of  "the extraordinarily voluminous, complex, expensive and burdensome discovery from the parties and numerous non-parities (including loan originators, loan servicers, due diligence providers, and rating agencies, among many others) necessary to litigate this action may be streamlined (if not obviated entirely) by a decision from the Ninth Circuit."
 
NCUA's lawsuit is on interlocutory appeal in the Ninth Circuit Court of Appeals, while a similar case against RBS Securities is on appeal in the Tenth Circuit Court of Appeals. Both appellate courts are reviewing issues related to whether NCUA filed its lawsuits before the statute of limitations or repose expired. NCUA argues that tolling agreements signed by some of the defendant banks and an extender statute gave it more time to file.
 
Goldman Sachs pointed out that a Kansas court involved in the RBS Securities case has granted a similar stay of discovery. It based its request on four arguments: that the petitions raise serious legal questions; the discovery process would impose "staggering costs, many (if not all) of which could be avoided depending on the resolution of the appeals"; NCUA would not be injured as a result of a stay "since there is no risk that evidence would be lost during the stay"; and that granting a stay appeals to the public interest by judicial resources and avoiding burdensome non-party discovery.
 
The motion also pointed out that NCUA waited two and a half years after putting the corporates into conservatorship before it filed a suit and that the agency might also benefit from the stay by avoiding expenses related to the discovery process.
 
The court document also said NCUA has stated in its July 23 Notice of Lodging and during a July 29 status conference "that it opposes any stay of discovery." Goldman Sachs said it confirmed NCUA's opposition to a stay during a meeting on Aug. 7.
 
A hearing is set for Sept. 5, according to the court document.

Ohio CU Foundation Grant Aids Flood Victims

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COLUMBUS, Ohio (8/13/13)--Integrity FCU, Barberton, Ohio, received a grant totaling $5,000 from the Ohio Credit Union Foundation to assist members faced with losses from recent storm flooding, the Ohio Credit Union League said.
 
The credit union is giving a maximum of $250 to any member who suffered losses from the July flooding (eLumination Newsletter Aug. 7).
 
The funds will help members with essentials such as food, clean supplies and small appliances, Integrity FCU CEO Karen Hardy told the league.

CO-OP Paper: Mobile Wallets Have Arrived

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RANCHO CUCAMONGA, Calif. (8/13/13)--Credit unions should operate from the assumption that mobile wallets aren't a technology of the future, but in fact, are here now, according to a new white paper from CO-OP Financial Services.
 
What's preventing widespread adoption of the technology is the uneven experience of the options currently available, spotty awareness and low use, said the paper, "Digital Wallets in Depth: What are they? How do they work? And where do credit unions fit in?"
 
Gartner Inc. predicts 45 million people worldwide will use mobile payment technology this year, generating $235 billion in transactions, in its report, "Forecast: Mobile Payment, Worldwide, 2013 Update." By 2017, the research firm expects the ranks of mobile payment users to reach 450 million, with $721 billion in transactions.
 
"The gap between expectation and usage is still wide, which makes this the perfect time to get involved," CO-OP's paper said. "Begin now by getting your credit union's cards into mobile wallets. This strategy is not only easy, but it's also smart. You don't have to choose the winning technology. You don't have to create or mobilize your own new technology. Even if things change in the future, there's no real downside to being in today's wallets. And, for the record, interchange works the same in wallets as it does anywhere else."
 
The paper makes several recommendations about how credit union's can can become involved in the mobile wallet marketplace:
  • Encourage adoption. Members at most credit unions are using mobile wallets now, the paper said. Encouraging them to do so--especially in tandem with using payment cards--increases the chances that they will put credit union cards into their wallets. Getting in on the ground floor is an important first step.
  • Keep your options open. CO-OP is taking a nonexclusive approach to wallets. The company thinks that's a good approach for credit unions as well. Rather than trying to commit to one product, CO-OP suggests encouraging members to choose their own (or try many)--all with the credit union's cards in hand.
  • Focus on mobile payments. People aren't adopting wallets as quickly as they are mobile payments. Aligning the credit union with the mobile payment experience is an excellent way to get members to associate you with mobile wallets in the future, said the paper.
  • Stay alert. The digital wallet mark market is evolving; it's important to evolve with it.
 To download the white paper, use the link.

Wis. DFI: State-chartered CUs' Income Grew 9%

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MADISON, Wis. (8/13/13)--Wisconsin's state-chartered credit unions increased net income by 9% in the six months ending June 30, compared with the previous year, according to data released Wednesday by the Wisconsin Department of Financial Institutions (DFI).
 
"Wisconsin credit unions once again demonstrated that the way to grow earnings is through good loan quality and prudent expense management," DFI Secretary Peter Bildsten said.
 
Net income was $110.3 million, up from $101.2 million in the first half of 2012, said the Wisconsin DFI.

Compared with the six months ending June 30, 2012, Wisconsin's 179 state-chartered credit unions:
  • Grew assets by 5.1% to $24.3 billion;
  • Improved net worth to 10.28%, up from 9.83%;
  • Lowered the delinquent loan ratio to 1.26% from 1.55%; and
  • Reduced operating expense ratio to 3.33% of assets from 3.44%.
Credit unions' deposit growth of 5% outpaced loan growth of 3.3% in the first two quarters, Bildsten said.
 
"Figuring out how to put excess deposits to work in a low-interest rate environment continues to be a challenge for the industry," he added.
 
Merger activity in the past year was strong for several reasons, with the number of state-chartered credit unions declining to 179, compared with 194 as of June 30, 2012, said Kim Santos, director of the state's Office of Credit Unions.
 
"Some of our smaller credit unions are struggling with loan growth, loan quality and expense control," Santos explained.

Bloomberg, Media Cover CUNA's Non-public Entities Comments

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WASHINGTON (8/13/13)--The Credit Union National Association's comments on the Financial Accounting Standards Board (FASB) proposal to redefine the meaning of "public business entity" and its positive impact on credit unions were the topic of several national media stories this weekend, including Bloomberg BNA, Accounting Today and Financial Planning.
 
BNA reported CUNA Deputy Counsel Mary Dunn's analysis of the proposal, which would enable credit unions as non-public entities to qualify for more flexible accounting requirements.
 
Dunn said that being able to qualify for private company generally accepted accounting principles (GAAP) modifications could potentially provide relief for nonpublic entities on how to account for credit losses.
 
"That [proposal] could be a good candidate for one of the areas that credit unions can benefit because they just don't need to have all of that reporting that would be required under [GAAP] for their stock holders because they don't have stock holders," she said. 
 
The article noted that CUNA has long advocated to FASB that credit unions, based on their structure as not-for-profit, member-owned financial cooperatives, should not be subjected to onerous and costly reporting requirements that should be applied to only publicly traded companies.  "By law, credit unions must use their earnings to build capital and as member-owned cooperative institutions, work hard to provide favorable rates on loans and savings and to minimize fees," she said.
 
Dunn also noted that although the proposal is a positive step for credit unions in terms of affirming their nonprofit status under GAAP, two potential areas for concern are its lack of applicability to existing GAAP, and the potential of interference from regulators.
 
Another article along the same lines also appeared in Accounting Today and was republished in Financial Planning, myplaniq.com, and silobreaker.com. Use the link for an example.

San Diego County CU Breaks World Shredding Record

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SAN DIEGO (8/13/13)--San Diego County CU set a new Guinness World Record for the most paper collected in 24 hours when it shredded 165,000 pounds of paper July 20.
 
"SDCCU has set the new world record and put San Diego on the map," said Teresa Halleck, San Diego County CU president/CEO. "We are very grateful to our community for their support and being part of setting a world record. Moreover, we are happy that fewer individuals now have sensitive information sitting around their house."
 
The credit union began the project at 7 a.m. at the Qualcomm Stadium parking lot in San Diego's Mission Valley. Credit union members, families, friends and the public began bringing boxes full of old documents containing personal and confidential information that was shredded on the spot at no charge. Shred-It, a document destruction and recycling company, provided the shredding services.   
 
Clear Channel Media + Entertainment San Diego radio stations KISS 95.7 and KOGO 600 were on-site promoting the event. Firehouse Subs and Rita's Italian Ice provided free food to document contributors. Donations made at the event benefited the San Diego Humane Society and Society for Prevention to Cruelty to Animals, and raised more than $5,000.
 
Since 2007, when SDCCU began hosting its free Shred Day events, more than 634,500 pounds of documents have been shredded and recycled at no charge, saving more than 6,000 trees.
 
The previous record was 156,880 pounds of shredded paper, set by television station KHQ 6, American West Bank and Secure Shred in Spokane, Wash.

CUNA Mutual, CU Pledge $105K To Leader In Me

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CEDAR VALLEY, Iowa (8/13/13)--Two Cedar Valley of Iowa financial service organizations have pledged $105,000 to help ensure an effective leadership development initiative reaches students in two more schools in the area.
 
CUNA Mutual Group and Waterloo-based Veridian CU pledged the amount to the Greater Cedar Valley Alliance and Chamber's Leader Valley initiative to further implement The Leader In Me program.
 
The initiative builds personal skills as students put into practice the principles of Stephen Covey's The 7 Habits of Highly Effective People. Schools where the program has been implemented successfully see higher academic achievement, fewer discipline problems and increased engagement among teachers and parents, said the three organizations in a press release.
 
CUNA Mutual Group, through its foundation, committed $75,000 to sponsor the program's implementation at George Washington Carver Academy Middle School and Kittrell Elementary, both located in Waterloo.  Veridian CU committed $30,000 to Kittrell Elementary  and also participates in the school's Partners in Education program.
 
The amount will be distributed over three years and initially will provide training and materials to staff and educators at the sponsored schools.
 
With the addition of the two schools, the program now has 14 Cedar Valley schools participating. Roughly 6,075 students and 842 educators will participate during the upcoming 2013-2014 school year. That number represents more than one-third of total students and educators in the Waterloo, Cedar Falls and Cedar Valley Catholic schools.
 
"We believe everyone is a leader," said Jean Trainor, Veridian CEO and chief inclusion officer.  "The Leader In Me program demonstrates that same belief and benefits our entire community as much as it does the students who participate."
 
Reid Koenig, vice president of CUNA Mutual Group, said, "When one interacts with students who have been impacted by The Leader in Me, you quickly realize the effect the program is already having in transforming their lives. Our communities and businesses will reap the benefit of building great citizens and leaders for years to come."
 
Steve Dust, CEO of the Greater Cedar Valley Alliance and Chamber noted that one of that group's "primary goals is to develop a strong, highly talented and skilled workforce to help businesses of all sizes grow and prosper in Cedar Valley."
 
The combined $105,000 will be presented Thursday at the New Teachers Breakfast at Hawkeye Community College.
 
Such outreach programs provide examples of credit unions demonstrating their value to their community by fostering excellent service, raising awareness of the value of credit unions in the community and removing barriers as part of the Credit Union National Association's and state leagues' Unite for Good campaign. That campaign's goal is to have "Americans choose credit unions as their best financial partner."

Rev Up Crisis Communications For Hurricane Season

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MADISON, Wis. (8/12/13)--The peak of hurricane season is beginning and so far, only four named storms have surfaced in the Atlantic. However, although the National Hurricane Center has reduced the number of named storms expected for the 2013 hurricane season, credit unions in coastal areas can still expect an "above average" storm season, NHC said in its August update.
 
The center now is forecasting 13-19 named storms, including seven to nine hurricanes and three to five major hurricanes of at least 111 mph winds.  In May, it had forecast 13-20 storms, including as many as 11 hurricanes and as many as six major hurricanes. The NHC says there is a 70% probability in each range of activity.
 
Credit unions on the Atlantic and Gulf Coasts should start preparing now for possible hurricanes this season, especially with getting their crisis communications strategy in order. According to Agility Recovery, the disaster preparedness business continuity service provider for CUNA Strategics Services, next month is National Preparedness Month, and it will feature three webinars for credit unions to help them prepare.
 
The free webinars all begin at 2 p.m ET. Topics include:
  • Protecting Your Organization By Preparing Your Employees, Sept. 11;
  • The NEW 10 Steps to Preparedness: Lessons From the Past, Sept. 18;  and
  • Crisis Communications For Any Organization, Sept. 25.
Agility Recovery also has prepared a free Crisis Communications Planning Checklist for Credit Unions that is available to download from its website. "Disasters can happen at any time, and communications during a crisis could be the most important part of your plan," Agility said. "During an emergency, it is imperative that those within your credit union know how to communicate effectively.This includes both internal and external communications."
 
Use the link to download the two-page checklist, which provides recommendations for developing a communications plan, as well as what to do during the crisis and after the crisis.  The checklist can help credit unions assess their current strategy "and put into place some simple steps that will enhance your capability to communicate before, during and after the next disaster," Agility said.

CU System Briefs (08/12/2013)

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  • CEDAR RAPIDS, Iowa (8/12/13)--Check out what happens when you take energetic Collins Community CU team members and give them a video camera. "We're Collins Community Credit Union. If you haven't heard of us, I don't know what you're doin'" is how the Cedar Rapids, Iowa-based credit union's new rap video begins. Wearing sunglasses and a backward cap, the lead singer, backed by an entourage of backup dancers, invites viewers to check out the credit union. The clever rhyming manages to get everything from savings and checking accounts to student loans ("Say what? Goin' off  ta college?") and "bill pay and pop money" to the cooperative, member owned-structure and the  volunteer board of directors ("So decidin' what to do comes from the heart of the peer"). When you view the video, be sure to wait for the outtakes  ...
  • CHARLEVOIX, Mich. (8/12/13)--Bay Winds FCU, a $153.7 million asset credit union in Charlevoix, Mich., has been designated an authorized lender by the U.S. Small Business Administration (SBA). The preferred designation means it can continue expanding its member business lending services it began offering in April (PetoskeyNews.com Aug. 9). The loans can be used to establish a new business or assist in the acquisition, operation or expansion of an existing business, and present opportunities for business owners who otherwise might not be able to qualify for conventional lending, said the newspaper. Credit unions have been urging Congress to raise their member business lending cap to 27.5% of assets, up from 12.25%, so they can inject $13 billion into the economy in loans and help generate 140,000 new jobs ...
  • WESTBURY, N.Y. (8/12/13)--NEFCU, based in Long Island, has awarded its 2013 Premier 'Making a Difference' Scholarship of $20,000 to Grace Agolia, a resident of Massapequa Park, N.H., who also received the credit union's  Making a Difference Family Scholarship for her academic accomplishments and service to her community during her four years of high school. Agolia, shown here with NEFCU Board Secretary William Russo, left, and NEFCU Board Director William Youngfert, recently graduated from Sacred Heart Academy and will attend the University of Notre Dame in the fall. The scholarship is presented annually. NEFCU's Making a Difference Scholarship Program has awarded more than $1 million in scholarship funds since the program's inception. (Photo provided by NEFCU) ...

Calif.-Nev. Leagues To Support CMN Hospitals On ICU Day

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ONTARIO, Calif. (8/12/13)--The California and Nevada Credit Union Leagues--with support from CO-OP Financial Services--are encouraging their member credit unions to celebrate International Credit Union Day--Oct. 17--by helping CU4Kids create miracles.
 
Each time credit union members use their check card or credit card Oct. 17, participating credit unions will donate 25 cents or any self-determined amount to Credit Unions for Kids, the nationwide alliance of credit unions supporting Children's Miracle Network Hospitals. Funds will benefit local hospitals belonging to Children's Miracle Network Hospitals.
 
Participating credit unions may be eligible for a CO-OP Miracle Match from the Rancho Cucamonga, Calif.-based CO-OP Financial Services, depending on their level of CO-OP relationship.
 
Launched in 2008, CO-OP Miracle Match is a $1-million philanthropic matching program that encourages credit unions, chapters and leagues to create and participate in local Children's Miracle Network Hospital fundraisers.
 
All matching funds go directly to the local Children's Miracle Network Hospital, benefiting sick children in the local community. Applications for the match are due Sept. 30. Use the link.

CUNA, Leagues Participate In State Legislators Meetings

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CHICAGO, Ill. (8/12/13)--Credit Union National Association and state credit union league representatives are participating in the annual meetings of the National Conference of State Legislatures (NCSL) and the American Legislative Exchange Council (ALEC) this month.
 
At the ALEC annual meeting in Chicago, CUNA and the leagues met with state lawmakers and staff from across the country to discuss
Shelton Roulhac with CUNA, Sarah Wainscott and Tom Liebe with the Wisconsin Credit Union League, and Lynn Coard with CUNA stand in front of the exhibit booth for America's Credit Unions at the ALEC Annual Meeting in Chicago. (CUNA Photo)
pro-credit union policies. Banks and other financial services industry lobbyists attended the meeting to promote and defend their institutions, so CUNA and leagues understand the importance of adding credit union voices to these discussions, notes Richard Dines, senior state and league affairs director for CUNA/American Association of Credit Union Leagues.
 
This week, the NCSL Annual Legislative Summit in Atlanta will attract thousands of state lawmakers and their staff. As a result of CUNA's long-standing efforts at these meetings, NCSL has a policy of supporting the dual chartering system for credit unions.
 
At each meeting, CUNA displays an exhibit booth featuring "America's Credit Unions" and demonstrates the breadth and strength of the industry by showing the numbers of credit unions and their members in each state. CUNA also attends committee meetings of state legislators to advocate for credit union interests.
 
 

Consumers' Shift Toward CUs Still Gets Media Attention

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MADISON, Wis. (8/12/13)--Consumers' shift from banks to credit unions continue to get media attention, most recently in a Bankrate.com story about the Credit Union National Association's 2013-2014 National Member and Nonmember Surveys and in a Kansas story about credit union checking account growth.
 
"The roar of frustration with banks may seem like it's quieting, but a new survey suggests consumers are continuing to question their allegiances to their banking institutions," said Thursday's Bankrate.com article, "Credit unions beating banks." "More of those consumers are turning to credit unions for their personal finance needs."

It cites findings from CUNA's just-released surveys: 57% of credit union members indicate they are extremely likely to recommend their credit union to friends, while 40% of member who also have bank accounts say they would recommend the bank.

In the article, Jon Haller, CUNA director of corporate and market research, noted that "The financial crisis of 2008 and 2009 caused many consumers to question their loyalty to banks, which many consumers blamed for triggering the economic collapse."

In "Banks' regulatory pain is credit unions' gain," the Kansas City Business Journal (Aug. 7) writes that "credit unions have been reaping nice growth in checking account customers ever since banks had to find new ways to make money as they adjusted to several new banking regulations that went into effect in 2011."

It cites an Aite Group report that said 82% of credit unions surveyed saw an increase in their debit card accounts since 2011.

CommunityAmerica CU CEO Dennis Pierce told the publication the Lenexa, Kan.-based credit union has seen about a 16% growth in the number of checking accounts and a 20% hike in checking account balances since January 2011--more growth than in the past. The No. 1 reason that triggers consumers to contemplate switching to credit unions is "when they're exposed to unnecessary or high fees," he said.
 
Consumers will tolerate a bad experience on a checking account for a while but eventually will reach a tipping point, he said. "For the most part it's the constant drip, drip, drip of issues. Fees keep going up and they want a better personal service experience," he added.
 
To access the articles, use the links. For more information about the CUNA surveys, see related News Now articles CU Member Loyalty Rises At Banks' Expense and CUs Must Improve Among Non-members by using the links.

Pew Survey: Half Of U.S. Adults Bank Online

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WASHINGTON (8/12/13)--Any credit union that has buried its head in the sand about offering online banking or mobile banking will need to take note:  Over half (51%) of U.S. adults today bank online, and 32% of them transact financial business on their mobile phones.

The 51% of online-bank users account for 61% of internet users, said a new survey from the Washington, D.C.-based Pew Research Center's Internet and American Life Project, whose results were announced Wednesday.

Both types of digital banking are rising. In 2010, about  46% of U.S. adults--or 58% of internet users--said they bank online. In 2011, roughly 18% of cell phone users said they used their phone to check their balance or transact business with a financial institution. Nearly double that transact by mobile phones today.

That means credit unions will need to integrate online/mobile banking and mobile payments into their overall business strategy because "mobile devices ultimately will become the primary way members interact with your credit union," said the Credit Union National Association in its Environmental Scan (E-Scan) Report for 2013-12014.

"The mobile payments space offers the single greatest opportunity--and threat--credit unions will face in the foreseeable future as third-party entrants threaten disintermediation," said CUNA's E-Scan, adding that mobile payments "offer credit unions a way to retain members--who could opt for other financial providers for the mobile opportunity alone--and realize significant revenue by partnering with retailers."  Use the link for more information about the E-Scan.

Pew noted that the percent of internet users who bank online varies by gender, race, age, education, income and whether they live in a city or rural area.  Of the 61% of internet users, 63% of those are men, compared with 58% women.  Younger people age 18-29 were more likely (67%) to bank online, compared with 65% for 30- to 49-year olds, 55% for 50 to 64-year-olds, and 47% for those 65 or older.

Whites (63%) and Hispanics (62%) were more likely than blacks (48%) to bank online. Higher education and higher income also increased the likelihood of a consumer banking online.

Mobile banking, too, had trends that varied by demographics. Thirty-five percent of all cell phone owners used their mobile phone to bank, with men and women evenly divided at 35% each, said Pew's report. Again, younger adults were more apt to use mobile banking (54% for 18- to 29-year-olds, versus 40% for those between 30 and 49, 25% for the 50-to-64 age group, and 14% for those 65 or older.  Those with college experience were one and a half times more likely that those with high school or less experience to engage in mobile banking.

However, in contrast with online banking trends, non-white cell phone owners were more likely than whites to engage in mobile banking.

Pew's research is based on two surveys: telephone interviews on mobile banking with a nationally representative sample of 1,003 adults in the U.S., and telephone interviews about online banking with a sample of 2,252 adults.

CUs Can Encourage Members Not To Give Up On Fin. Goals

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CHICAGO (8/12/13)--More than half of Americans are focused on fun in the sun this summer instead of the financial resolutions they set back in January, TransUnion found in a recent survey. The credit and information management company reminds consumers to take time this summer to conduct a mid-year checkup and evaluate their financial goals for 2013.

"The trick with resolutions is to keep them achievable--the tendency is to attempt too much and set yourself up for failure," Susan Tiffany, director of consumer publications for the Credit Union National Association, said Friday. "One simple technique to save more money, for example, is just to set up direct deposit and automated transfers from checking to savings. You can use a similar technique to pay down credit cards, by setting up automated payments."

Nearly a quarter of Americans surveyed (22%) say they have abandoned their financial resolutions for 2013. Also, nearly a third (29%) of those said they were less than halfway to their 2013 goals, according to a recent Google Consumer survey commissioned by TransUnion.

"A mid-year checkup is the perfect time for consumers to appraise their current financial situation and make goals for where they want to be at the end of 2013," said Julie Springer, vice president at TransUnion responsible for consumer education.

Credit unions can help their members get financially fit and reach their financial resolutions for 2013 with these tips from TransUnion:
  • Check credit reports frequently: The first step to robust credit health is to recognize which bad financial habits, such as late payments, one has and how they are represented on the consumer's credit report. Regular check-ups also will help guard against identity theft.
  • Know your score: Consumers should understand what affects a credit score and take the necessary steps to reach healthier credit. The higher the score, the more likely a better rate will be received.
  • Create a monthly spending plan and stick to it: Consumers should determine current spending habits and set a monthly budget to determine how much disposable income they have so they can manage it wisely. By examining spending habits for a few months and inputting monthly payments and deposits, consumers can get a better idea about where to cut spending and increase savings.
  • File a dispute. Consumers have the right to question information on their credit report that they don't recognize or that might be inaccurate.
  • Guard against identity theft: Sign up for a credit monitoring service for quick alerts to any changes in the report, said TransUnion.

CEO Of NSWC FCU Killed In Car Crash

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DAHLGREN, Va. (8/12/13)--Harry C. Ovitt Jr., who had been CEO of NSWC FCU in Dahlgren, Va., for 27 years, was killed Thursday morning in a car crash on his way to work, reported The Free Lance-Star and Fredericksburg.com (Aug. 9).  He was 63.
 
The accident occurred at about 6:15 a.m. on State Route 206, the credit union told the newspaper. Staff said he always arrived at work early.
 
His eastbound car went off the right side of the road and hit a power pole and tree. He died at Mary Washington Hospital.  No other vehicles were involved. Ovitt was alone and was wearing his seat belt.
 
The credit union called the tragedy "a tremendous loss." "While the staff is devastated by this, Harry's foresight and planning have allowed us to implement processes that will assure the continued seamless operation of the credit union," said a notice on the $298 million asset credit union's website.  All branches of the credit union will be closed today.

Kansas CUA Innovation Lab Think Tank Team Selected

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WICHITA, Kan. (8/12/13)--The Kansas Credit Union Association's Innovation Lab Think Tank Team has selected it members.
 
The members of the Think Tank team are:
  • Michael Augustine, vice president of lending, Frontier Community CU, Leavenworth;
  • Gary Austin, vice president, operations and payment systems, CU of America, Wichita;
  • Adrienne Basham, business development/financial counselor, Central Star CU, Wichita;
  • Jenny Boyd, marketing, TECU CU, Wichita;
  • Chuck Bullock, president, TECU CU, Wichita;
  • Vickie Hurt, president, Quest CU Topeka;
  • LaRae Kraemer, president, Kansas State University FCU, Manhattan;
  • Garth Strand, president, Hutchinson CU, Hutchinson;
  • Geoff Strole, mortgage development officer, Truity CU, Lawrence;
  • Lisa Traphagan, vice president, branch development, Quest CU, Topeka;
  • Ginger Wehner, regional vice president, Truity CU, Lawrence;
  • Kim Wheelock, information service manager, Mid American CU, Wichita;
  • Lee Williams, CEO, Central Star CU, Wichita; and
  • Corey Winter, branch manager, Meritrust CU, Wichita.
Team members range from Gen Yers who serve as financial counselors and marketers, to seasoned CEOs. The team is using technology to better serve its members. It is nearly evenly divided male and female, and members represent credit unions ranging in asset size from $53 million to more than $800 million.
 
"In order to foster open innovation and explore the full spectrum of creativity, we assembled a diverse Think Tank team," said Melissa Baptista, KCUA research and development director. "The younger demographics' enthusiasm is contagious, and their ability to see projects from another perspective is just as important as the experiences and insights brought to the table by our veteran credit union leaders."
 
At the first meeting of the Think Tank, in Lawrence for a creative brainstorming session, the team divided into two groups. Each was asked to come up with projects or ideas that would further the Kansas credit union industry and provide value to the state's 630,000 credit union members.

The ideas will be presented to boards of KCUA and Shared Financial Solutions--KCUA's wholly owned, for-profit subsidiary that focuses on member service offerings in September. If the boards approve the ideas or projects, they will be given to the Dream to Destination team for implementation.

The Innovation and Implementation Lab was created to encourage continuous curiosity to generate revolutionary ideas to serve Kansas credit unions and their members. 

Study: Business Accounts Slow To Adopt RDC

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MT. PROSPECT, Ill., and GLENVIEW, Ill. (8/12/13)--A new survey reveals some disconnects between how financial institutions and depositors view electronic deposit and remote deposit capture (RDC) offerings. A key finding: business accounts are slower to adopt RDC than banks and credit unions expected.
 
The survey, "Check Imaging, RDC and ICLs: Depositor and Bank Experiences and Viewpoints," was conducted by Mt. Prospect, Ill.-based Cummins Allison, a provider of currency, coin and check handling solutions, and Branmark Strategy Group, a marketing firm in Glenview, Ill. (Wireless News Aug. 9).
 
Seventy-five percent of financial institutions surveyed offer RDC to commercial/business accounts, said the survey report, but two-thirds of them have less than 5% of commercial accounts using the service. Despite the slow adoption, most depositors surveyed said they would be interested in a service that allowed them to scan and transmit check images to their financial institution.
 
One of the most surprising disconnects, said Matthew Gniech, product manager of check imaging at Cummins Allison, was that more than half of the financial institutions surveyed believed they were marketing RDC services to commercial accounts, while depositors said the No. 1 reason they don't use electronic deposits was because they were unaware their financial institution offered the service. "Clearly, awareness is still a barrier to commercial RDC adoption," Gniech said.
 
The study suggested that financial institutions understand the benefits to offering RDC to their commercial customers: 44% said they offer it to stay competitive, 24% said RDC helps them attract new commercial accounts, and 11% said RDC helps lower operational costs.
 
However, 45% of depositors said that time savings when preparing deposits is the overwhelming benefit of electronic deposits.  Also 16% said they saved on fees by not depositing paper checks; and 13% said they saved time by not visiting the credit union or bank to make the deposit.  Others noted electronic deposits extended deposit deadlines andgave quicker access to funds than do conventional deposits.
 
Half of the depositors using RDC believe the service--especially scanner performance--could be better, and two-thirds said they would be more productive if the scanner were faster and more reliable. Many of the depositors said their check scanners are provided by their credit union or bank. The financial institutions revealed that their commercial depositors often request more accurate and faster check scanning equipment.

Minnesota Foundation Re-elects Officers

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ST. PAUL, Minn. (8/12/13)--The Minnesota Credit Union Foundation (MNCUF) Friday announced the results of its Aug. 8 board elections.
 
Re-elected as table officers were:
  • Chair--Pat Brekken, president of Richfield (Minn.) Bloomington CU;
  • Vice chair--Dave Larson, senior vice president, Affinity Plus Federal CU and executive director of the Affinity Plus Foundation, St. Paul; and
  • Secretary/treasurer--Brian Sherrick, president/CEO, Postal CU, Woodbury.
Table officers are elected for one-year terms. Brekken and Larson are entering their fourth consecutive years in these roles. Sherrick is entering his second year.
 
Glen Durbahn, vice president of marketing and member relations, Hiway FCU, St. Paul, was elected to fill the remaining two years of a three-year term that was vacated in January.
 
Other MNCUF board members include:
  • Larry Champeaux, president/CEO, Northern Communities CU, Duluth;
  • Mary Hansen, CEO/administrator, Mayo Employees FCU, Rochester; and
  • Kathy Harrington, president, Heartland CU, Inver Grove.

Maine League Testified About 19 Bills During Session

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PORTLAND, Maine (8/12/13)--The Maine Credit Union League tracked 40 bills and provided testimony on 19 during the state's past legislative session. Over the course of the six-month session, Maine's credit unions had great success with all legilsation on which it had an official opinion, the league said.
 
The league assumed a leadership role with several bills before the Maine Legislature and received praise from legislators on its outreach and education efforts (Weekly Update Aug. 9).
 
Highlights included the passage of these bills supported by the league:
  • A student lending bill which will allow the Finance Authority of Maine to provide loan insurance on supplemental student loans;
  • A bill to allow the Federal Home Loan Bank to accept loans as collateral for mobile homes that are not titled and not permanently affixed to property;
  • A bill to promote the financial literacy of high school students by adding course work in personal finance as part of required social studies and history classes; and
  • A bill to strengthen protections for vulnerable adults from financial exploitation.
The league also played a key role in helping to defeat several bills that would not have benefitted credit unions, including:
  • A data breach bill that would have reduced the amount of time allowed to notify consumers of a breach, regardless of any ongoing investigation;
  • A bill that would have allowed small retail businesses to impose a surcharge on consumer purchases using a credit or debit card; and
  • A bill that would have prohibited employers and agents from obtaining consumer reports that contain creditworthiness, credit standing and other financial information.
The league also spent significant time on bills dealing with foreclosure and making changes to existing law.

Filene Documentary Sums Up Experiential Learning Colloquium

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MADISON, Wis. (8/12/13)--The Filene Research Institute has released a documentary of its experiential learning colloquium held in January.
 
In partnership with National Credit Union Foundation and sponsored by CO-Op Financial Services, Filene hosted the colloquium at the Jimmy Carter Presidential Library in Atlanta with an eye toward answering the question: How can credit unions use experiential learning to improve the lives of their members?
 
The colloquium explored the possibility of improving financial behavior by helping people learning through hands-on experience rather than through the traditional "linear" method of gathering information.
 
Sixth-grade teacher Tim Vandenberg explored how he uses the board game Monopoly as an learning tool in the classroom. Participants learn required math standards, while becoming emotionally involved in the game.
 
Lance Palmer, University of Georgia associate professor in the College of Consumer Science, described an initiative in which college students helped prepare and file tax returns as part of the Internal Revenue Service's Volunteer Income Tax Assistance Program. The students also provided financial advice to tax filers.
 
"Tax time is a tremendous time to reach people," Palmer said. "Everybody has to file their taxes. With that, there is a tremendous opportunity to provide education in unique ways to help clients think differently about their future to get them out of the present mindset of 'How much am I going to get back and what can I buy with it?' to a future mindset of 'What can I do with that and build a better tomorrow for me and the people I love?'"
 
Ben Rogers, Filene Research Institute research director, discussed how credit unions can use gamification to facilitate financial literacy. He introduced a system that rewards members with simple positive feedback or "psychic rewards" if they meet savings or debt payment goals. "People respond to simple feedback," Rogers said. "The takeaway for credit unions is how can we encourage good behavior, like on-time payments, saving, accumulating wealth, with those reminders."
 
Lois Kitsch, National Credit Union Foundation national program director, described how credit unions use reality fairs to provide students with a hands-on learning experience. During reality fairs, students experience financial challenges similar to what they will face when they start life on their own. Students identify their career choice and starting salaries, then complete a budget sheet requiring them to live within their monthly salary while paying for basics such as housing, utilities, transportation, clothing and food.
 
To view the documentary, use the link.

MWCUF, CUs Raise $24K For Scholarships

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DENVER (8/9/13)--The Mountain West Credit Union Foundation held its second annual charity golf tournament, in partnership with the Denver Area Chapter of Credit Unions, July 24 in Englewood, Colo.
 
Click to view larger imageJacob Helleckson, Brayman Beach Scholarship recipient, right, and Carroll Beach, retired CEO, SunCorp CU in Westminster, Colo., took part in the Mountain West Credit Union Foundation's second annual charity golf tournament. It was held in partnership with the Denver Area Chapter of Credit Unions, July 24 in Englewood, Colo.  (Photo provided by the Mountain West Credit Union Association)
The event raised more than $24,000 to support the foundation's leadership development and educational scholarship programs, a 140% increase in funds raised from the previous year's event.
 
Nearly 40 organizations within the credit union community were represented from across Mountain West Credit Union Association's (MWCUA) tri-state area of Arizona, Colorado and Wyoming. The event sold out with 144 participants.
 
Also attending was the foundation's 2013 Brayman-Beach Scholarship recipient, Jacob Helleckson, a senior at Paonia High School who will attend the University of Colorado Boulder this fall. 
 
The event was made possible by a volunteer host committee comprised of credit union professionals from:
  • Arizona Central CU, Phoenix;
  • Columbine FCU, Littleton, Colo.;
  • Denver Community FCU;
  • Premier Members FCU, Boulder, Colo.;
  • Security Service FCU, Denver, Pueblo, Fort Carson, Colorado Springs (branches of San Antonio, Texas);
  • Sooper CU, Denver; and
  • MWCUA.

CU System Briefs (08/09/2013)

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  • SALT LAKE VALLEY, Utah (8/9/13)--"If it walks like a duck, talks like a duck, it must be a ...duck" has taken on a new meaning at a credit union in Salt Lake Valley, Utah. The credit union was a top story for KUTV.com Wednesday after a pair of ducks arrived at the credit union and made a deposit: eight eggs in a nest in the reeds by the credit union's entrance.They have been in residence for almost a month--roughly the length of time it takes eggs to hatch. The papa duck patrols the sidewalk by the front door, while the mama duck nests. Credit union manager Chelsey Watson said the ducks are like neighborhood pets. Staff meet the fowls' needs by providing cereal on the sidewalk and water. The station would not divulge the name of the credit union--to avoid crowds that might scare them away. Animal control told the credit union not to relocate the ducks. Watch the video report ...
  • MONROE, Mich. (8/9/10)--Thieves with ATM skimmers have targeted financial institutions throughout Southeast Michigan, says the Monroe, Mich., police department (MonroeNews.com Aug. 7). The latest skimming device, which is hidden on an ATM and records personal identification numbers as the victim types in the numbers on the ATM's keypad when using a credit or debit card, was discovered at an ATM located at Monroe-based Monroe County Community CU. Police are investigating whether any consumers' numbers were stolen or accounts compromised ...
  • MOUNT VERNON, Ill. (8/9/13)--An Illinois man accused of robbing a credit union and a bank last year in Mount Vernon, Ill., has been sentenced to 12 years in prison for the bank robbery in a plea bargain. Jeffrey Wilson, 42, of Waltonville, pleaded guilty to the first-degree robbery of Community First Bank of the Heartland in Woodlawn. Prosecutors dropped three other robbery counts, including a December robbery of Jefferson County Schools CU in Mount Vernon. Wilson's wife, Jessica, 30, is charged with the credit union robbery, and a third person, Ann Ramsey of Waltonville, already is serving an eight-year sentence for that holdup (Associated Press Newswires Aug. 8) ...

International Leaders Program Seeks U.S. Interns To Brazil

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MADISON, Wis. (8/9/13)--The World Council of Credit Unions is seeking U.S. credit union professionals to apply for a two-week credit union internship, Jan. 12-25, in Brazil, through its International Credit Union Leadership Program.

Click to view larger image A group of U.S. participants visit the U.S. Embassy in Costa Rica as part of their internships through the International Credit Union Leadership Program in June.  (Photo provided by the World Council of Credit Unions)
A committee will select 12 candidates to participate in the scholarship program, which is funded by the U.S. Department of State and covers all expenses but airfare. The application deadline is Sept. 27.

"The International Credit Union Leadership Program gives credit union leaders in the U.S. a unique opportunity to gain hands-on experience from Brazil's credit union system," said Brian Branch, World Council president/CEO.

"The country is globally recognized for successfully consolidating and fully integrating its credit union system. Interns will learn how Brazil's credit unions reach underserved populations and support their communities through member education and special projects. They will also gain an appreciation for cooperative collaboration that they can apply back home," Branch said.

The program is designed to facilitate idea exchanges, expose participants to cultural diversity and improve problem-solving skills in the credit union industry. Participating U.S. credit union leaders learn firsthand about methods to better serve an increasingly diverse membership, including youth, businesses and low-income members.

In a two-way exchange, credit union professionals from Brazil also can intern in the U.S. Twelve Brazilian credit union professionals will begin their U.S. internships Oct. 6 at the Cornerstone Credit Union League (Texas) and Northwest Credit Union Association (Oregon/Washington), implementing partners of the grant.

The program is part of the U.S. Department of State's Professional Fellows Program and is funded by a grant from the U.S. Department of State, Bureau of Educational and Cultural Affairs, Office of Citizen Exchanges. It provides each participant with credit union placement, lodging with a local host family, meals and communication stipends, local transportation and traveler's insurance.

Sponsoring U.S. credit unions will cover airfare cost of roughly $2,000.

Contact Michael Suing, msuing@woccu.org or 608-395-2075, for details. For more information use the link.

SECU, Durham Ink Pledge To Rehabilitate Foreclosed Properties

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RALEIGH, N.C. (8/9/13)--
Click to view larger image Inking a Pledge of Support to rehabilitate foreclosed properties in distressed neighborhoods and revitalize the local community are, from left:  Warren Peacock, senior vice president of the Durham Duke Street Branch of Raleigh, N.C.-based State Employees' CU;  David King, SECU Board member; Rick Hester of the City of Durham Neighborhood Improvement Services; and Sam Adams, SECU senior vice president-SECU*RE. (Photo provided by State Employees' CU)
State Employees' CU and the city of Durham, N.C., have signed a Pledge of Support aimed at rehabilitating foreclosed properties in distressed neighborhoods while working to revitalize the local community.
 
The pledge's goal is to develop and implement a cooperative model between the credit union as a lender and North Carolina communities, and set a new standard in responsible stewardship of lender-acquired properties, said the Raleigh, N.C.-based SECU.
 
SECU is setting its new standard through its new property management subsidiary, SECU*Real Estate (SECU*RE).
 
In Durham's low-wealth communities, the nearly $26 billion asset credit union noted, foreclosures, abandoned properties and absentee landlords have led to declined safety, increased crime and lower property values. Combined, these translate into a breakdown in economic growth and social equity, said SECU.  SECU hopes to work cooperatively with the city, its residents and other stakeholders to rehabilitate a local area.
 
Sam Adams, SECU's senior vice president of SECU*RE, is working with community partners to renovate several SECU-acquired properties in one Durham community. The internal and external home improvements meet and in some cases exceed the building requirements, helping to create a safe and inviting neighborhood for area renters and homeowners, said SECU. The upfit also provides more energy-efficient housing for residents.
 
"There is a critical need to reinvest in our neighborhoods and be part of the solution for North Carolina communities, said SECU Board member David King. "With the support of the City of Durham and other community groups, we will make a difference for the citizens of this area and use this partnership model to positively impact other neighborhoods across the state."
 
Raising awareness of credit unions' work and value they provide not only their members but their community is one of three legs of the Unite for Good campaign of the Credit Union National Association and the state credit union leagues and associations. The campaign aims to reach the strategic vision in which "Americans choose credit unions as their best financial partners." For more information, use the link.

Filene Examines CU Loyalty Among Young Adults

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MADISON, Wis. (8/9/13)--Creating loyalty among the 18- to 34-year-old demographic remains a challenge for credit unions, but credit unions that meet the challenge will be rewarded with long-time, productive members, according to a new Filene Research Institute report.
 
To measure member loyalty, "Next Generation Needs: Examining Credit Union Loyalty Among Young Adults," uses Net Promoter Score (NPS) feedback from 19 credit unions, ranging in size from $100 million to $10 billion in assets. It splits adult members into three age groups: 18- to 34-year-olds, 35- to 54-year-olds, and 55-plus. Young adult NPS scores were the lowest of the three groups.
 
Analysis of young adults' qualitative feedback and scores from credit unions that achieved high NPS scores with 18- to 34-year-olds turned up three priorities:
  • Service and respect. Members feel that high-quality service and support are important and agree that their credit unions do a good job of providing it. About 40% of Promoters (those most likely to recommend their credit union) from both top- and bottom-performing credit unions used the word "service" when asked the primary reason for their "likelihood to recommend" rating.
  • Easy and convenient. Younger members don't want to expend much effort to bank with their credit union. The keyword "easy" showed up twice as often among top-performing credit unions as among bottom-performing credit unions.
  • Assistance in understanding personal finance. The most common request regarding financial capability is how to establish solid credit. Some of the most passionate comments came from members who built their credit and finally got a credit union loan for their dream car or first home.
Among respondents who feel ease of doing business is important, online and electronic services are key factors, the report said. The top-performing credit unions scored well on reliability and usability. Their systems are easy to use and work as advertised. But even members at these credit unions have wish lists. They want mobile check deposit, external account transfers, online account opening, instant withdrawal of bill payments, check image viewing, pending transaction viewing and budgeting tools.
 
Branches still matter to young adults, the report said. They use them just as often as their older peers, and additional branch location requests were common among both top and bottom performers. Easy access to funds is another top priority and one of the main perceived differences between national banks and credit unions. Educating members about mobile apps to quickly find surcharge-free ATMs is one way to combat the perception of inconvenient access to their money.

NCUA Asks Appeals Court To Expedite Review Of Barclays Ruling

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DENVER (8/9/13)--The National Credit Union Administration has filed a motion requesting that the Tenth Circuit U.S. Court of Appeals expedite its review of a Kansas federal court's ruling dismissing $550 million in claims against Barclays Capital for losses stemming from residential mortgage-backed securities (RMBS) sold to corporate credit unions.
 
The motion was filed July 31. It concerns a July ruling by U.S. District Judge John W. Lungstrum in Wichita, Kan., who dismissed the agency's claims on the grounds they were time-barred and NCUA hadn't filed the case in time.
 
"The district court's judgment rests on its legal conclusion that...Barclays...could argue that NCUA's actions were untimely despite having entered into a tolling agreement in which they promised not to do so--an agreement into which Barclays freely entered during settlement negotiations in which it was assisted by sophisticated counsel," said NCUA's motion, noting that the conclusion resulted in the dismissal of NCUA's entire case against Barclays.
 
A tolling agreement allows more time in which to file a lawsuit after the statute of limitations time expires.
 
"The district court's ruling also dramatically affects four related actions pending before the same district judge," NCUA said in the motion. "Just as Barclays has done, those defendants had negotiated and signed tolling agreements with NCUA during settlement talks, but have now disavowed those agreements."
 
The four cases, including the Barclays suit, involve more than $l7.8 billion in RMBS purchased by U.S. Central FCU and Western Corporate FCU, which no longer exist, said the document. "The district court's rulings as to the tolling agreements will likely lead to the dismissal of more than $5.2 billion of those total purchases," NCUA said.  "Because the district court's ruling affects such a large proportion of NCUA's claims, it will disrupt and delay discovery in the remaining four cases." An expedited review will permit the entire litigation to proceed more efficiently, NCUA said.
 
NCUA filed the lawsuit against Barclays, as well as several other lawsuits against other brokerage firms, as the liquidating agent for the corporates. Its lawsuits claim that the brokers' offering documents for the RMBS had material misrepresentations about the underlying loans that backed the securities.
 
On Aug. 1, the appellate court issued an order for Barclays to file its response to NCUA's motion on or before Aug. 15.

La. League Inducts Nine Hall Of Famers, Announces Awards

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HARAHAN, La. (8/9/13)--The Louisiana Credit Union League inducted nine individuals into its Hall of Fame at its annual meeting and convention. The league also recognized three credit unions for their community involvement and financial literacy efforts (eNews Aug. 7).
 
Hall of Fame inductees included:
  • Virgil Barnette, Barksdale FCU, Bossier City;
  • Glen Beard, Alexandria (La.) Municipal Employees CU;
  • Chuck Harrington, former National Credit Union Administration examiner;
  • Bodin Hugger, Louisiana FCU, LaPlace;
  • Marah Nell Jones, Bogalusa (La.) Schools FCU;
  • Hugh V. McCarty, Jr., Heart of Louisiana CU, Pineville;
  • Linda Saucier, Heart of Louisiana CU, Pineville;
  • Terry Roy, Lafayette Schools FCU; and
  • Graydon Walker, Neighbors FCU, Baton Rouge.
Credit community involvement and financial literacy award first-place winners included:
  • Lafayette (La.) Schools FCU--Desjardin Youth Financial Literacy Award;
  • Jefferson Parish Employees FCU, Harahan--Desjardin Adult Financial Literacy Award;
  • Lafayette Schools FCU--Louise Herring Award for Philosophy in Action; and
  • Pelican State CU, Baton Rouge--Dora Maxwell Social Responsibility Award.
Winners of these state-level awards go to the national awards competition sponsored by the Credit Union National Association.

Sales Culture Recipe Outlined In OpSS Council Paper

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MADISON, Wis. (8/9/13)--A growing number of credit unions are integrating a sales culture where members achieve their financial goals in lockstep with the credit union philosophy, according to a new white paper from the CUNA Operations Sales and Services Councils.
 
"Recipes for a Sales Culture: How Credit Unions Blend Sales and Service" presents a variety of examples of how credit unions structure their frontline sales and service operations, implement incentive pay and other rewards and recognition programs, and identify sales goals and metrics.
 
The paper draws three conclusions for credit unions that seek to employ a sales-as-service culture:
  • Credit unions must maintain their commitment to extraordinary service as they develop their sales cultures. "You won't have sales if you don't have good service--or the volume will be short-lived," said Nicol Morris, chief operating officer at Charlotte (N.C.) Metro CU.
  • Members' needs must drive sales. "Sales and service are about defining the type of interactions you're going to have with your members and what type of outcomes you're looking for--managing the relationship versus approaching member interactions as an order taker," said Carla Schrinner, implementation manager and senior master trainer of CUNA Creating Member Loyalty. "It's about understanding what members need--and a need is not a product. Members don't come in for a loan. They come to you because they need to borrow money to buy something. What is that something? How important is that something to them? And how can the credit union help them meet that need?"
  • An effective sales culture requires all hands on deck--at all levels of the organization and from all departments. To develop a sales culture that is consistent with the "people helping people" mantra, credit unions need to explore all aspects of their organization and nurture their ability to support sales from the back office to the frontlines before launching into a sales culture, the paper said.
To download the white paper, use the link.

CUs, Leagues Keep Up Tax Status Efforts In Districts

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MADISON, Wis. (8/9/13)--Four more endorsements for credit unions' tax-exempt status among Michigan's members of Congress, a new brochure with 32 Texas members of Congress and top state officials' expressing their specific support of credit unions' status, meetings with congressmen in Pennsylvania, and credit unions' continued determination to deliver the Don't Tax My Credit Union message are among the results of individual efforts back in the congressional districts.

The Cornerstone Credit Union League Thursday sent Texas credit unions an updated tax brochure outlining members of Congress who support credit unions and their tax exemption (Leaguer Aug. 8). In addition to Gov. Rick Perry and Lt. Gov. David Dewhurst, who both state their support of credit unions' tax exempt status, the brochure includes 38 members of Congress and the Senate who state their support of credit unions. Of the 38 listed, 32 specifically state their support of the tax exemption. (Use the link to access the brochure).
 
Pennsylvania credit unions expressed concern about tax code reform and other issues with U.S. Rep. Joe Pitts (R-Pa.) in a meeting at his district office Wednesday. From left:  Rep. Pitts; Nate Muniz and Barb Bowker of PSECU, Harrisburg; Abby Kiebach, Lancaster (Pa.) Red Rose CU; and Tim Morris, Citadel FCU, Exton. Also attending was Pennsylvania Credit Union Association Vice President of Governmental Affairs Christina Mihalik. (Photo provided by the Pennsylvania Credit Union Association)
In the brochure, U.S. Rep. Sam Johnson (R-3) , a credit union member, stated, "I will, as a senior member of the Ways and Means Committee, continue to fight for economic policies that promote freedom and free enterprise and stand up against new taxes that punish growth, prosperity and savings."
 
And Jeb Hensarling (R-5) said, "I will continue to fight against imposing new regulatory and tax burdens on the financial institutions that are working to spur economic growth by effectively meeting the financial needs of their communities. I believe it is critical that we keep credit unions lending in this challenging period in our nation's economic history."
 
Rep. Al Green (D-9), ranking member of the Financial Services subcommittee on oversight and investigations, noted, "While we must exercise fiscal responsibility in Congress, changing the historical tax-exempt status of credit unions could potentially hurt many low-income communities' access to financial services. I will continue to support our credit unions and the vital role they play in communities across our nation."
 
Click to view larger image Associates of Aventa CU, Colorado Springs, Colo., unite on casual Fridays to promote "Don't Tax My Credit Union," the national campaign working to make sure Congress doesn't take away the credit union tax-exempt status during its tax code reform. (Photo provided by Aventa CU).
In Michigan, U.S. Reps. John Dingell (D), Tim Walberg (R) and Kerry Bentivolio (R)  and  U.S. Sen. Debbie Stabenow (D) weighed in with statements of their support for credit unions' tax exemption, said the Michigan Credit Union League.  They join Democrats Sander Levin, Gary Peters and Dan Kildee and Republican Mike Rogers who already issued statements supporting the tax exemption.
 
Dingell, the longest-tenured member of Congress in history, said, "Credit unions help thousands of people in my district save responsibly and are an invaluable source of private credit. So long as they stick to their mission of serving their members, I will continue to support their tax-exempt status."  A spokesman for Walberg told the league, "Rep. Walberg strongly supports maintaining the exemption."
 
In Pennsylvania, credit union leaders met Wednesday with U.S. Rep. Joe Pitts (R) at his Lancaster district office to discuss and share their concerns about tax code reform, regulatory burdens and the effects they have on credit unions and consumers (Life is a Highway Aug. 8). The Pennsylvania Credit Union Association, represented at the meeting by Vice President Governmental Affairs Christina Mihalik, said Pitts was sympathetic to over-regulation and the challenges faced by credit unions and other industries.
 
Credit unions attending included Lancaster (Pa.) Red Rose CU; PSECU, Harrisburg; and Citadel FCU, Exton. The meeting marked the first of several district meetings and conference calls with Pennsylvania's congressional delegation during the summer recess.
 
And credit unions across the nation, like Aventa CU in Colorado Springs, Colo., were wearing Don't Tax My Credit Union t-shirts and urging their members to send letters to their congressional representatives using the Credit Union National Association's www.donttaxmyCU.org website.
 
Membership awareness events at the $152 million asset credit union during July and August include lobby events, statement inserts, website content, casual Friday awareness days, handouts and more.
 
"We feel it is important to rally our membership in support of 'Don't Tax My Credit Union,'" said Karin Kovalovsky, director of marketing and corporate communications.  "As the owners of Aventa CU, they need to recognize the importance of our tax-exempt status. By creating awareness about this issue among our membership, we hope that they will unite to send a clear message to Congress."

CUNA Management School Certifies 65 CCUEs

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MADISON, Wis. (8/8/13)--The Credit Union National Association has announced the newest graduating class of CUNA Management School (CMS). This year's 65 graduates were awarded the Certified Credit Union Executive (CCUE) designation, bringing the total CCUEs nationwide to 3,249.
 
CUNA Management School, held in Madison, Wis., fosters leadership skills through a blend of university courses and experiential learning. For two weeks each July, the University of Wisconsin becomes home to credit union professionals committed to their careers, their credit unions and their members.
 
CCUE, instituted in 1975, is the hallmark of professional credit union achievement. Designed for those aspiring to credit union leadership, it is awarded to individuals who take it upon themselves to improve their professional expertise, seek out best practices and propel their credit union to a stronger future.
 
This year's recipients successfully completed the three-year CUNA Management School curriculum. Of this year's 65 graduates, 28 graduated with honors and two graduated with high honors.

During the graduation ceremony, the third-year graduating class presented $23,355 to the CMS Scholarship Fund. The money was raised during the three-year professional development program and is earmarked to help smaller credit unions and individuals without available financial resources become future CUNA Management School graduates.

For more information on CUNA Management School and the CCUE designation, use the link.

CU System Briefs (08/08/2013)

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  • TOLEDO, Ohio (8/8/13)--Toledo-based Directions CU announced the winners of its 2013 MyLife@DCU Don't Text and Drive Video Contest. MyLife@DCU is a financial option for members under age 24 that helps them master good financial habits and achieve financial independence. The contest was on the MyLife@DCU Facebook page and open to members and non-members under 24. Participants submitted a video explaining why they choose not to text and drive. Viewers voted on the submissions for two weeks. Those who got the most votes won prizes. First place/grand prize winner of $1,000 was Matthew Corbrett of Perrysburg; second place $500 went to Shelby Schaffer of Willard; and third place $250 went to Matthew Kubiak of Toledo.  Corbrett said of the Don't Text and Drive message:  "It's very significant. I wish it was something I would see more."  He plans to save most of his winnings ...
  • BERKELEY, Calif. (8/8/13)--Gary Bell, president of Cooperative Center FCU in Berkeley, Calif., and a longtime local leader who was elected to the Richmond Calif. City Council in November, died Aug. 1. He was 54. He was hospitalized days before his election for a severe bacterial sinus infection and slipped into a coma after two neurosurgeries in November (Contra Costa Times Aug. 1 and 2). He served as CEO of CCFCU from 2000 to 2002. In 2008, he returned and served as CEO/president until he fell ill. Bell also served on the Credit Union Advisory Council to Consumer Financial Protection Bureau. Bell served on the Richmond City Council from 2001 to 2004. He also served on the Wichita, Kan., City Council for two years. He was the second African-American in the history of Wichita--and the youngest member--to serve on that council, said the Wichita Eagle (Aug. 7). He is survived by his wife Shelley Ross-Bell and two sons, Gary Jr. and Germaine. Funeral services were Wednesday ...

NYIB Network Honors Outstanding Contributors

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SAN DIEGO (8/8/13)--The National Youth Involvement Board honored two credit union professionals and awarded three scholarships at its 2013 Annual Conference in San Diego last week.
 
NYIB named Teresa Shively, education specialist at Gesa CU, Richland, Wash., as the 2013 Delegate of the Year. Shively coordinates and serves as community liaison for Gesa's high school and community outreach programs. The programs encompass seven student-operated high school branches, financial education workshops in local high schools and colleges, and seminars for both teens and adults.
 
Shively also serves on three school district Career and Technical Education Advisory Committees, is a member of the Northwest Credit Union Association Education Committee and is Gesa's Junior Achievement executive ambassador. 
 
NYIB's Outstanding Volunteer of the Year is Nate Gillen, director of education at Weokie CU, Oklahoma City, Okla. Gillen has overseen 810 classroom presentations and taught 721 presentations personally. Together his team reached 3,539 students during the 2012-2013 school year. He also is actively involved in other community groups, including the Weokie Foundation. 
 
The three scholarships awarded at the conference support the volunteer network's objective of promoting leadership development related to youth advocacy and financial education. 
 
The North and South Regional scholarships were awarded to Natalie McLaughlin from Community Financial CU, Plymouth, Mich., and Caroline Barragan from Pima FCU, Tucson, Ariz., respectively.
 
The third scholarship, for serving the underserved, was awarded to Kim Beaulieu from Jeanne D'Arc CU in Boston.

ADA Lawsuits Filed Vs. FIs In Tennessee

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NASHVILLE, Tenn. (8/8/13)--Seven more lawsuits alleging that inaccessible ATMs violated the Americans With Disabilities Act (ADA) have been filed against financial institutions, including a credit union, this time in Tennessee.
 
Susan Welchly of Tennessee and Ashley Summers of Alabama, who are both legally blind, filed the suits simultaneously in the U.S. District Court for the Middle District of Tennessee, in Nashville. They are represented by Gilbert Russell McWherter PLC, a law firm in Jackson, Tenn., with offices in Nashville.
 
The suits alleged that the ATMs do not have features mandated by the ADA for visually impaired individuals, and that the machines lacked braille keyboards or voice guidance. They asked the court to force the institutions to comply and to pay for court costs.
 
The suits are against five banks and a credit union (TheCityPaper.com Aug. 6).
 
Similar suits were filed Atlanta, Pittsburgh and Philadelphia within the past 15 months. One man in Philadelphia filed suit against seven financial institutions, citing ADA violations (News Now June 20, 2012). 
 
Mondaq Business Briefing (Aug. 7) estimated that there are at least 100 similar pending class actions across the country.
 
Earlier this year the Credit Union National Association warned credit unions that an ATM accessibility lawsuit filed in Atlanta by a blind woman who alleged lack of access to the machine under the ADA could be the beginning of  a trend of plaintiffs' lawyers seeking out ADA violators.
 
CUNA noted that like the numerous nuisance lawsuits filed against financial institutions claiming that missing ATM fee notices violated the Electronic Funds Transfer Act,  the next trend could be ADA class action lawsuits (News Now March 14).  CUNA recommended that credit unions check their compliance with ADA regulations concerning ATMs.
 
The Wall Street Journal  estimated last year that at least half of the nation's ATMs remain inaccessible to the visually handicapped (March 7, 2012).

Special Report: Natco Empowerment Center Helps Low-Income Members

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RICHMOND, Ind. (8/8/13)--Natco CU in Richmond, Ind., will be opening the Natco Community Empowerment Center tomorrow to help low-income people achieve a self-sustaining lifestyle.
 
A grant through the Community Development Financial Institution (CDFI) Fund sparked the idea for the credit union's new center, Karen Houser, Natco marketing director, told News Now.
 
"We are an industrial-based credit union, and over the years many factories [in the area] were closing or reducing their hours,' Houser explained. "We have many low-income members at the poverty level or below. So the Empowerment Center is being developed because of the special needs of low-income people."
 
A three-year grant for $313,606 from the CDFI Fund finances the main track of the center--which the $63.4 million asset credit unit purchased--with Natco funding the rest of its operations, Houser said.
 
The credit union will provide computers with Internet access and a fax machine to the community for free. Services the center provides include creating resumes, establishing a training process to help participants with mock interviews, dressing professionally for job interviews, and making participants aware of the process of obtaining a decent job, Houser said.
 
"We are the managing partner for the Circle Program through the United Way, which takes individuals and families into an educational setting with our staff members for a 17-week period," Houser explained. "This helps take the participants out of poverty and into the next step.
 
"The credit union partners these people with others in the community," she added. "The program provides allies for participants with more-established people in the community." For example, if a participant's car breaks down, the ally can refer the person to others to help finance the repairs, Houser said.     
 
The Empowerment Center will help a least two sets of family groups each year through the 17-week course. There is an 18-month commitment required of families who take part in the program, Houser said. Two Natco staff members will work as full-time employees at the center. 
 
In June, Natco held an event to help determine barriers that prevent people from adequately managing their finances. "A lot of the challenges involve finding an organization's resources that people can turn to for funds," Houser said.
 
Other challenges include finding employment that would maintain an adequate lifestyle, obtaining affordable housing, and procuring transportation--which is a challenge for many people in the community, Houser said
 
Future programs  at the center will be based on what Natco learns about the needs of the community, said Houser, adding that the center is looking to be a Volunteer Income Tax Assistance (VITA) organization to help participants prepare their income-tax returns.
 
"It has long been the philosophy of the credit union to help individuals help themselves financially. By getting beyond barriers, we can set them on a positive path for themselves," Houser concluded.
 
This article is part of a News Now series of exclusive, special reports on credit unions' outreach efforts and innovative ideas. Fostering service excellence, removing barriers and raising awareness about the value credit unions provide their members and communities are the foundation for the Credit Union National Association's, state credit union leagues' and credit unions' Unite For Good campaign toward a vision in which Americans choose credit unions as their best financial provider.

Old Hickory CU Defends Tax Status On WKRN TV

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NASHVILLE, Tenn. (8/8/13)--Old Hickory CU and Tennessee credit unions are sending a strong message to Congress to keep their tax-exempt status, according to Nashville TV station WKRN during an interview.

Bonnette Dawson, president/CEO of the $205 million asset credit union located in Old Hickory, Tenn., delivered the "Don't Tax My Credit Union" message in an interview with WKRN.

"If we had to pay taxes that would change the way we do business, and it would also do away with the choice people have in financial institutions," she told Nashville's News 2.

Credit union should not be taxed because they serve different clientele than banks, she said, adding, "We offer similar services, but we are more responsive to low income and underserved communities. We volunteer a lot in the communities we serve."

The reporter noted that unlike banks, credit unions cannot raise capital through public stock but they give better service.  Camera footage taken at the credit union featured staff wearing a Don't Tax My Credit Union t-shirt.  Member Alice Breuer also was interviewed. "When I think of a credit union, I think of community because when you come in, they know who you are. You are not just a number," she said.

Losing the tax-exempt status would dramatically change her credit union's cost and quality of service.

"I don't think they are aware, and that's what we are trying to do is get every avenue we can to raise awareness."  The station said Dawson has met with two Tennessee representatives in Congress and will meet with U.S. Rep. Marsha Blackburn this week.

Raising awareness is one of the three prongs of  Unite for Good, the Credit Union National Association's and state leagues' campaign working toward a vision in which "Americans choose credit unions as their best financial partner."

FHFA, Freddie Considering Legal Action On Eminent Domain Seizures

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WASHINGTON (8/8/13)--The Federal Housing Finance Agency (FHFA) and government-owned mortgage financer Freddie Mac are considering legal action against a city in California that is threatening to use eminent domain to seize underwater mortgages from private trusts.
 
Richmond, Calif., recently sent notice to holders of more than 620 mortgages, asking them to sell their loans to the city for 80% of the homes' fair value. The city then would write them down, and help the homeowners refinance their loans, according to Reuters and Politco (Aug. 7). If the offers aren't accepted, the city said it would use eminent domain to seize the loans at a value determined by a court.
 
Freddie Mac General Counsel William McDavid told reporters in a conference call that the seizures would amount to loan sales under pressure. "We would consider taking legal action," he was reported as saying.
 
The Credit Union National Association, in a joint letter July 31 with other associations and organizations, urged Congress to support an amendment that would take steps to prohibit the Federal Housing Administration  (FHA) from insuring residential mortgages that have been seized through eminent domain (News Now Aug. 1).  The amendment would be a provision of the Transportation, Housing and Urban Development, and Related Agencies Appropriations Act for Fiscal Year 2014 (H.R. 2610).
 
The city's plan and other developments would threaten to freeze the return of private capital to housing markets, the letter. It noted a plan developed by a vulture fund--a private equity or hedge fund that invests in weak debt--would use a city's eminent domain power to acquire performing-but-underwater mortgages held in private label, mortgage-backed securities and then insure the new loans through FHA.  Richmond was specifically mentioned in the letter as being prepared to become the first city in the U.S. to seize loans in this unprecedented manner.
 
CUNA supports a broad range of programs to assist struggling homeowners and their communities, but believes that "using the power of eminent domain in this manner would harm our nation's housing markets and the very communities it is intended to help," the letter said.
 
The letter was also signed by 14 other trade groups.

Online Poll: 18% Of Consumers OK With Revolving Debt

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WASHINGTON (8/8/13)--About one in five consumers--18%--believe that carrying credit card debt over from month-to-month is a responsible way to manage finances, according to a recent National Foundation for Credit Counseling (NFCC) online poll.
 
"The data suggest that not only are many Americans are using credit cards to fund a lifestyle their income can't support, but they are comfortable doing so," said Gail Cunningham, NFCC spokesperson. 
 
Credit unions can advise their members of these consequences of carrying credit card debt from month to month:
  • Credit unions can advise their members of the consequences of carrying debt from month to month:
  • Interest on a credit card is typically calculated on an average daily balance.  For those who carry a balance over from the previous cycle, interest is not only charged on the unpaid balance, but on any new purchases added to the balance, said NFCC.
  • With interested added onto the balance month after month, consumers end up paying interest on the interest.
  • Carrying a balance has the potential to negatively impact a person's debt-to-credit ratio, one of the main components of credit scores, said NFCC.
  • A higher balance decreases the amount of credit available for future purchases.
Most (61%) said they believe paying credit card debt in full each month is the only responsible way to manage personal finances.

NCUF Approves 16 Biz Kid$ Education Grants For 2013

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MADISON, Wis. (8/8/13)--The National Credit Union Foundation's board of directors has approved 16 new Biz Kid$ grants, totaling $124,961 for 2013. The new grants engage the credit union movement in using Biz Kid$ and its curriculum to build students' financial literacy and economic education skills.
 
"There is a need to improve the financial literacy skills of the youth in America and Biz Kid$ is the perfect vehicle to address that need," said Danielle Brown, Biz Kid$ program coordinator for NCUF. The innovative programs "will improve the financial education of youth through the use of the Biz Kid$ program."
 
Biz Kid$ is the credit union-funded public television series that teaches kids about money management and entrepreneurship.
 
Seventy-six percent of teens report the best time to learn about money management is in kindergarten through high school, but only 29% reported having programs in place, according to the 2013 Junior Achievement/Allstate Foundation Teens and Personal Finance Survey.
 
Some highlights of the grant projects:
  • Maps CU, Salem, Ore., will work with Western Oregon University's College of Education to incorporate Biz Kid$ into the curriculum of Elementary Social Studies Methods, a course required of all university students in the Elementary Education program. The integration of Biz Kid$ into their coursework will lead to the use of Biz Kid$ in future classrooms.
  • STAR CU, Madison, Wis., will create an Entrepreneurship Club to teach teens at the Boys and Girls Club of Dane County about entrepreneurship through hands-on experience and provide the opportunity to launch a business of their own. Biz Kid$ lessons and videos will be used to teach the club members how to write a business plan, create a budget and write a business proposal.
  • Cornerstone Credit Union Foundation, Farmers Branch, Texas, will create a Biz Kid$ Teacher Training and Entrepreneur Contest pilot program to show educators how to teach the Biz Kid$ program. Participating teachers will implement the curriculum in their classrooms and students will collaboratively create a business plan for a needed organization in their community, thus incorporating the entrepreneurship skills learned through Biz Kid$.
  • Travis CU, Vacaville, Calif., will use Biz Kid$ to provide the financial literacy curriculum needed for students participating in a Work Ready Certification Program. The program is designed to verify that students have the entry-level skills needed to succeed in the workplace and contribute as citizens, and help them understand the link between their educational/career goals and financial planning.
NCUF oversees fundraising and outreach responsibilities of Biz Kid$. During the past six years, more than 300 credit unions and affiliated organizations have raised more than $13.8 million to support the show's production, website and curriculum. Every Biz Kid$ 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."
 
For a full list of NCUF grants, use the link.

HR 1151 Marks 15 Years

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WASHINGTON (8/8/13)--
Click to view larger image Thousands of credit union supporters descended upon the Capitol in Washington, D.C., in 1998 to urge Congress to pass HR 1151--the Credit Union Membership Access Act--in what is considered a textbook case of  grassroots political action. (Photo provided by CUNA)
The Credit Union Membership Access Act of 1998--known as HR 1151--marked its 15th year milestone yesterday, a testament to the grassroots advocacy power of credit union people throughout the U.S.
 
Fifteen years after its passage, credit unions are again applying lessons they learned about grassroots operations then to another battle--to preserve credit unions' tax-exempt status. Many of the advocacy lessons being used today were learned in the 1998 battle, which was considered a "textbook case" of political action.
 
HR 1151, which was co-sponsored by former U.S. Reps.  Steve LaTourette (R-Ohio) and Paul Kanjorski (D-Pa.), authorized multiple-group chartering for federal credit unions and gave 63 million working Americans--many of them working for small businesses--the ability to save and borrow at a credit union. It was signed by President Bill Clinton on Aug. 7, 1998.
 
The law was the culmination of a grassroots response to a five to four decision on Feb. 25, 1998, by the U.S. Supreme Court, which upheld an appeals court decision to prohibit federal credit unions from taking in members unrelated to their "core" membership group and common bond. By enacting HR 1151, Congress overturned the Supreme Court decision.

Western CUNA Management School Honors Grads

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ONTARIO, Calif. (8/7/12)--The 52nd Western CUNA Management School (WCMS) graduated 88 students on July 25 at Pomona College in Claremont, Calif.
 
Click to view larger image Eight-eight students graduated in the 52nd Western CUNA Management School (WCMS) on July 25 at Pomona College in Claremont, Calif. From left, Michael D. Steinberger, dean, WCMS; 2013 High Honors graduates Nathan Linde, assistant vice president, contact center, Washington State Employees CU, Olympia, Wash.; Christopher Monti, vice president, finance, East Idaho CU, Idaho Falls, Idaho; Brandi Gleason, director of member relations, Northwest Credit Union Association; Rebecca Bower, senior manager of sales, BECU, Tukwila, Wash.; Daryl Holdaway, internal audit manager, Cyprus CU, West Jordan, Utah; Douglas Brisbon, business development manager, Seattle Metropolitan CU; and Rich Scholes, chief operating officer, Rogue FCU, Medford, Ore.; and WCMS President James D. Likens. (Photo provided by Western CUNA Management School)
"What is it that brings us together? What is it that inspires us to be here?" asked Bill Cheney, commencement speaker and president/CEO of the Credit Union National Association. "There is something different about us. In reality, we're not an industry--we're a movement. It's that 'credit union difference'--balancing head and heart."
 
Cheney added the future of the movement is "brighter than ever," with incredible opportunities for credit unions to become America's preferred financial institution. "WCMS is cultivating the leaders of tomorrow who will highlight the credit union difference, the movement, and win the hearts of Americans and small businesses."
 
Seven students graduated with High Honors. They included: 
  • Rebecca Bower, senior manager of sales, BECU, Tukwila, Wash.;
  • Douglas Brisbon, business development manager, Seattle Metropolitan CU;
  • Brandi Gleason, director of member relations, Northwest Credit Union Association;
  • Daryl Holdaway, internal audit manager, Cyprus CU, West Jordan, Utah;\
  • Nathan Linde, assistant vice president, contact center, Washington State Employees CU, Olympia, Wash.;
  • Christopher Monti, vice president, finance, East Idaho CU, Idaho Falls Idaho; and
  • Rich Scholes, chief operating officer, Rogue FCU, Medford, Ore.
Four students graduated with Honors:
  • Jason Ehn, senior loan officer, Redwood CU, Santa Rosa, Calif.;
  • Thomas Newins, chief operating officer, Credit Union 1, Anchorage, Alaska;
  • Darren Nishioka, vice president lending, Hawaii FCU,  Hilo, Hawaii; and
  • James Staub, loan manager, HFS FCU, Hilo, Hawaii.
Linde won the Rick Craig Prize for Excellence in Projects I and II.
 
Each year the graduating student who best represents the qualities of high moral character, leadership, credit union dedication, and academic achievement is nominated by his or her class to receive the Charles M. Clark Memorial Award. This year's recipient was Douglas Brisbon, business development manager for Seattle (Wash.) Metropolitan CU.
 
Chris Jillson, CEO of Sandia Laboratory FCU, Albuquerque, N.M., and a 1990 graduate of WCMS, received this year's James D. Likens Alumni Recognition Award for significant achievement in the credit union field since graduating from the school.
 
The graduating class presented WCMS President Jim Likens with fundraising checks totaling $92,000--$13,000 from a class auction event by the three classes and $79,000 raised during the past three years by the Lambda class, representing the largest class gift in WCMS history.
 
WCMS is sponsored by the credit union leagues and associations serving Alaska, Arizona, California, Colorado, Hawaii, Idaho, Nevada, New Mexico, Montana, Oregon, Utah, Washington and Wyoming.

CU System Briefs (08/07/2013)

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  • FORT WAYNE, Ind. (8/7/13)--A Fort Wayne, Ind., man has been charged with robbing a branch of Fort Wayne-based Three Rivers FCU located inside a Scott's grocery store last month. Reginald A. Greenwell Jr., also known as Sluwur Zelee, 28, is charged with the July 22 robbery. The man who robbed the credit union presented a note demanding that a teller hand over the money from her cash drawer and threatening her if she didn't. He also robbed a second teller of the cash in her drawer before fleeing.  A surveillance video of the robbery led to Greenwell's arrest (News-Sentinel Aug. 6) ...
  • DES MOINES, Iowa (8/7/13)--Two armed men in black and wearing Halloween masks--including an "Incredible Hulk" mask--robbed Tradesmen Community CU Monday morning in Des Moines.  The men, armed with handguns, ambushed the manager of the Des Moines-based, credit union when she arrived to open the credit union at 7:30 a.m. They demanded she let them into the building, ordered her to silence a beeping alarm and said they would kill her if she activated a separate burglary alarm. They told her to open the safe and filled two bags full of money before ordering her to lie on the floor while they fled. The Hulk mask was discarded about a block from the credit union. Police are reviewing a surveillance tape (Des Moines Register Aug. 6) ...
  • REDLANDS, Calif. (8/7/13)--Alta Vista CU has named Richard Holloway as its new CEO, effective July 1 (pe.com Aug. 5). Holloway has been interim CEO since Oct. 22 at the $138 million asset, Redlands, Calif.-based credit union.  He began his credit union career in 1991 with the National Credit Union Administration and retired in 2011. Holloway was also interim CEO at San Bernardino School Employees   FCU from December 2011 to May 2012 and became its internal auditor until October 2012 ...

Community CU/Growth Conference Speakers To Focus On Member Growth, CU Advantage

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MADISON, Wis. (8/7/13)--The Credit Union National Association has announced the speaker and session lineup for this year's CUNA Community Credit Union & Growth Conference, Oct. 8-11, in Uncasville, Conn.
 
"This year's speaker lineup is about progress and the credit union advantage," said Meghann Dawson, CUNA instructional design manager. "The strong combination of top credit union leadership, renowned speakers and innovators is sure to make an impact on everyone in attendance."
 
The conference focuses on driving membership growth and advancing credit union ideals. The keynoters leading this year's conference are:
  • Chad Hymas, national speaker hall of famer;
  • Paul Gentile, CUNA executive vice president of strategic communications and engagement;
  • Paul Smith, director of consumer research at Procter & Gamble;
  • Ryan Donovan, CUNA senior vice president of legislative affairs; and
  • Sarita Maybin, renowned speaker and communication expert.
This year's breakout speakers and workshop leaders will provide insights, perspectives and advice on the challenges facing credit unions and the future of the financial services industry.
 
This year's breakout session topics include:
  • Strengthening Your Capacity to Serve the Underserved;
  • Rising to the Challenge of Meeting Small Business Needs;
  • Top Regulatory Challenges Facing Credit Unions; and
  • Best Practices from Successful Community Credit Unions.
This year, CUNA partner CO-OP Financial Services will sponsor up to 18 full-tuition scholarships. For conditions of eligibility and scholarship applications, use the link. For more information on the CUNA Community Credit Union & Growth Conference, use the link.

Georgia Regulator Exempts CU Overdraft Fees In Parity Move

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ATLANTA (8/7/13)--At the request of the Georgia Credit Union Affiliates (GCUA), the Georgia Department of Banking and Finance has issued a declaratory order exempting  overdraft fees charged by state-chartered credit unions from the state's maximum limit, "in order to provide parity with federal credit unions," said the department.
 
The July 11 order from Commissioner Kevin B. Hagler means that when a member overdraws a deposit account such as a share account or share draft account by using a check, debit card, ATM card or other means, a state-chartered credit union can charge an overdraft fee without any usury limitations.
 
"In light of the fact that federal law authorizes federal credit unions to impose overdraft fees on members' deposit accounts without any usury limitations, the commissioner declares that overdraft fees imposed by state-chartered credit unions are not subject to state law usury limitations," Hagler said in the order.
 
The order was prompted by court cases against banks, GCUA said. "GCUA became aware of recent court cases against a couple of Georgia banks noting that banks were in violation of the state's usury provision for fees charged in connection with overdrafts," said Cindy Connelly, senior vice president of government influence at GCUA. Credit unions were not involved in the cases.
 
In those cases, "the court was asked to find that the imposition of certain fees charged by financial institutions might be considered usury under Georgia law," Connelly told News Now. "We believed, from our research and from previous opinion letters that we knew where the federal regulator stood on this type of issue."
 
GCUA requested the department exercise its authority under state law O.C.G.A. section 7-1-61  to issue an order that would ensure state-chartered credit unions parity with federal credit unions operating in Georgia, said Connelly. "The ruling is the outcome of that request," she said, adding that the Department of Banking issued a similar ruling for banks about a week earlier.
 
In the declaratory order, Commissioner Hagler said, "Just like federal credit unions, state-chartered credit unions are authorized to accept deposit." The department "views overdraft fees imposed on deposit accounts as part of the deposit taking power of state-chartered credit unions."

The order explained that "unlike federal credit unions, state-chartered credit unions are potentially subject to a usury challenge for the imposition of overdraft fees as such fees ...can in certain circumstances be viewed as interest under state law" while any attempt to characterize an overdraft fee imposed by a federal credit union as interest for purposes for state usury would be pre-empted.
 
Therefore, "as national banks and federal credit unions can impose overdraft fees free of any state law usury limitations, state-chartered credit unions, subject to regulation by the department, can similarly impose overdraft fees and not be subject to state law usury claims," the order said.

CUNA Study: Women's No. 1 Priority Is Saving For Retirement

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MADISON, Wis. (8/7/13)--The Credit Union National Association's Women's Financial Survey finds the most important financial concern for women isn't buying a house or paying off debt, but saving for retirement.

"The fact that women are thinking about retirement planning is a good sign that the message is getting out there that time is one of the most important aspects of  retirement savings, and the sooner they start the better," said CUNA Executive Vice President of Strategic Communications and Engagement Paul Gentile.

The survey also indicated that although women aren't confident in their financial knowledge, they might know more than they think.

It revealed that saving for retirement is the No. 1 financial concern for women. Findings showed that women use 401(k)s (45.3%) and pension plans (35.8%) the most to save for retirement, while 40% of women reported owning multiple retirement plans.

The survey also found that 51.2% of women were not confident in their financial ability, despite the fact that 38% of the married female respondents manage their household finances exclusively and 46% co-manage their household finances. This was particularly true with the youngest demographic, those born from 1980-1993, where 59.1% lacked financial confidence.

Most women reported balancing their checkbooks, maintaining six-month rainy day funds, paying their credit card balances in full every month and prioritizing long-term goals like retirement, home ownership and education ahead of transactional goals such as vacations and cars.

"It's surprising that although most women manage their household finances, they lack confidence that they are doing it correctly," said Gentile. "Our findings indicated that women take all the appropriate measures to be confident in their financial literacy but lack the reassuring knowledge to have confidence in how they manage their finances."

Another key finding was that fewer than half of the respondents across all demographics reported following a monthly budget, which is critical to efficiently manage any finances.

The Women's Financial Survey polled 1,042 via the Internet from a population of women nationally, with an even distribution of respondents born in each decade from 1920 to 1980. The survey was conducted on behalf of CUNA.

CNN Reports On CU's Day Care Loans To NYC Parents

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NEW YORK (8/7/13)--Neighborhood Trust CU in New York City will administer subsidized child care loans to middle class families in a program launched by City Council Speaker and mayoral candidate Christine Quinn, CNN reported Monday.
 
"We were approached by the City Council," Justine Zinkin, CEO of Neighborhood Trust Financial Partners and Neighborhood Trust CU, told News Now. "They were interested in a way to basically support families interested in better child care for their children.
 
"We were very specific that this loan should be bundled with financial education and counseling, not just debt, and fit into a broader format and goal," she added.
 
Qualified applicants must have an annual income of $80,000 to $200,000, a credit score of at least 620 and attend a free financial counseling session with a Neighborhood Trust counselor. The financial counselor will conduct a comprehensive review of the applicant's finances to assess the loan application, the New York City Council said in a press release.
 
Once any credit, savings or budgeting issues are identified and remedied, interested parents will then fill out a loan application and be referred to the $8.2 million asset Neighborhood Trust FCU for final loan underwriting, approval and disbursement, the city council said.
 
Neighborhood Trust Financial Partners is looking forward to joining Quinn and the New York City Council in the partnership, said Zinkin in the release.
 
"Neighborhood Trust has a nearly 20-year history in New York City of helping individuals achieve their financial goals by providing financial counseling and support services," Zinkin explained. "The Middle Class Child Care Loan Initiative combines two important tools to help families achieve their children's long-term education goals--access to early childhood education through a responsible low-interest loan and high-quality financial education and planning."
 
New York City has one of the highest child-care costs of any area in the country, the council said. 
 
Child-care costs can run as much as much as $2,300 per month in Manhattan and $1,700 per month in Brooklyn, CNN reported. 

More Than One-third Of Young Adults Live With Parents

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WASHINGTON (8/7/13)--During 2012, roughly 21.4 million or 36% of Millennials ages 18 to 34 lived with their parents. That is the highest percentage in at least four decades, says Pew Research Center's analysis of U.S. Census Bureau data.
 
By comparison, 18.5 million in this age group lived with the folks in 2007.  The percentage has consistently climbed since then, when 32% of Millennials lived at home. In 2009, after the Great Recession, 34% lived with their parents, said the Washington, D.C.-based research center.
 
Of those living with parents, from one third to one half are college students. Younger Millennials between 18 and 24 are more likely to live at home than older ones ages 25-31--56% vs. 16%, respectively. Millennial men were more likely--at 40%--to live with the folks than Millennial women--at 32%--were.
 
The key factors, Pew found, include:
  • Declining employment.  Last year 63% of Millennials had jobs, down from 70% for this age group in 2007. Forty-five percent of unemployed Millennials lived at home  last year, compared with 29% of employed young adults.
  • Rising college enrollment.  In March 2012, about 39% of 18- to 24-year-olds were enrolled in college, an increase from 355 in March 2007. In this age group, those enrolled in college were more likely to live at home, 66%, than those who were not in college, 50%.
  • Declining marriage rates.  Last year, 25% of Millennials were married, down from 30% who were married in 2007. Unmarried Millennials are more likely to live with the folks than married Millennials were, 47% vs. 3%.
What does this trend mean for credit unions?  It changes the way they market and the products and services they provide at any given life stage. Sticking to the old "lifestage" marketing of products may miss the mark.
 
Twenty years ago, a 30-something would be 10 years out of college, have a good job, be married with a couple of kids. He wouldn't have a student loan because tuition was cheaper and he worked his way through college. He would be in the market for a new car loan, a starter mortgage loan or a remodeling loan, a college savings fund for the kids, and some investments to make the most of his earnings--the American Dream.
 
Today's Millennial doesn't reflect those needs. Many Millennials aren't married and don't need mortgages or remodeling loans or college savings plans yet.  They say they need used-car loans that don't take six years to pay off, a good refinance rate on their student loans, and because they don't make much money, they need good savings rates. And they want the convenience of mobile banking.

North Texans Give Mortgage Defaults the Evil Eye

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FARMERS BRANCH, Texas (8/7/13)--North Texans overwhelmingly disapprove of consumers who default on their mortgage, according to  a survey of homeowners by Texas Trust CU, Mansfield, Texas.
 
In the survey of more than 2,700 homeowners in the Dallas-Fort Worth area, respondents were asked whether it is justified for someone to stop paying their mortgage if they decide their home is worth less than they owe, or if they are having financial problems.
 
"People clearly have a deep sense of obligation when it comes to the financial commitment they have made to their mortgage lender," said Richard Whitman, Texas Trust CU vice president of mortgage lending.
 
"We've all heard stories about people who walk away from an underwater house or who decide to balance their household budget by simply cutting out mortgage payments," Whitman added. "The positive feedback from this survey is that almost everyone agrees that's wrong."
 
About 97% of homeowners said stopping mortgage payments is not justified because of an "underwater" valuation on their home. In the case of financial difficulties, 94% said that those problems would not justify halting mortgage payments.
 
Other findings in the survey include:
  • Most people surveyed see the housing market improving. More than three out of five--61%--believe their home has increased in value in the past year, while 39% didn't think so.
  • About 88% of surveyed homeowners with mortgages are paying interest rates of 3% to 8%. About 9% of homeowners have loans with interest rates below 3%, but 3% are burdened by loans with interest rates of 9% or higher.
  • Roughly 60% of homeowners are paying, or have paid, extra toward the principal on their loans, to reduce the loan principal and the total amount of loan interest, and to shorten the term of the loan. Of those, 46% said they make such payments whenever they have some extra money, while 39% add to their payment each month. Another 9% make two payments each month, while 6% add extra to their payment once a year.
  • About 37% of homeowners with a mortgage said they have refinanced within the past five years. Of the 63% who haven't refinanced, the leading reasons they cited as to why they haven't were that they already have a good interest rate, they can't afford closing costs, they have other personal debt to deal with, and they just don't see the benefit.

NYIB Announces Election Results

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TAMPA, Fla. (8/7/13)--The National Youth Involvement Board (NYIB) confirmed four new regional coordinators and re-elected its chairman during the cooperative network's annual meeting Thursday in San Diego.
 
Julie McLean, director of financial education for Arapahoe CU, Centennial, Colo., was re-elected for a second term as NYIB chairman for 2013-14.
 
NYIB regional coordinators elected to two-year terms include:
  • Northwest--Shannon Cahoon, community outreach coordinator, Fibre FCU, Longview, Wash.,
  • North Central--Ashley Buchholz, marketing specialist, Wildfire CU, Saginaw, Mich.
  • Northeast--Leah Esslinger-Sprowl, high school manager and youth educator, Holy Rosary CU, Rochester, N.H.; and
  • South Central--Mandy Clayton, director of financial education, FivePoint CU, Nederland, Texas.
Regional coordinators continuing the second year of their existing terms are Juli Lewis, youth marketing manager, Suncoast Schools FCU, Tampa, Fla., in the South East and Angela Halsey,  director of marketing and business development, NuVista FCU, Montrose, Colo., in the South West.
 
The executive committee elected Lewis as vice chairman, Buchholz as secretary, and Esslinger-Sprowl as treasurer.  Additional officers will be elected at the committee's planning session, scheduled for October at the 2014 NYIB conference in Grand Rapids, Mich.

NEW: CUNA Study: Women's Top Priority Is Saving For Retirement

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MADISON, Wis. (8/6/13 UPDATED 11:55 a.m. ET)--The Credit Union National Association's Women's Financial Survey finds the most important financial concern for women isn't buying a house or paying off debt, but saving for retirement

"The fact that women are thinking about retirement planning is a good sign that the message is getting out there that time is one of the most important aspects of  retirement savings, and the sooner they start the better," said CUNA Executive Vice President of Strategic Communications and Engagement Paul Gentile.

The survey also indicated that although women aren't confident in their financial knowledge, they might know more than they think.

It revealed that saving for retirement is the No. 1 financial concern for women. Findings showed that women use 401(k)s (45.3%) and pension plans (35.8%) the most to save for retirement, while 40% of women reported owning multiple retirement plans.

The survey also found that 51.2% of women were not confident in their financial ability, despite the fact that 38% of the married female respondents manage their household finances exclusively and 46% co-manage their household finances. This was particularly true with the youngest demographic, those born from 1980-1993, where 59.1% lacked financial confidence.

Most women reported balancing their checkbooks, maintaining six-month rainy day funds, paying their credit card balances in full every month and prioritizing long-term goals like retirement, home ownership and education ahead of transactional goals such as vacations and cars.

"It's surprising that although most women manage their household finances, they lack confidence that they are doing it correctly," said Gentile. "Our findings indicated that women take all the appropriate measures to be confident in their financial literacy but lack the reassuring knowledge to have confidence in how they manage their finances."

Another key finding was that fewer than half of the respondents across all demographics reported following a monthly budget, which is critical to efficiently manage any finances.

The Women's Financial Survey polled 1,042 via the Internet from a population of women nationally, with an even distribution of respondents born in each decade from 1920 to 1980. The survey was conducted on behalf of CUNA.

10 Ways to Bridge Generation Gap On The Job

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While half of American workers say that they would like to retire before the age of 65, a nationwide poll conducted by J.P. Morgan Asset Management finds that only 20% believe they will be able to do so. One way workers face this issue is by working longer.

With consumers working longer, consultant Sherri Elliott-Yeary, a featured presenter at the Cornerstone Credit Union League's upcoming Young Credit Union Professionals Conference, says today's working environment is hosting a "clash of the titans" (Leaguer July 31). Four generations are attempting to co-exist and cooperate in the workplace, she said.
 
Elliott-Yeary offers 10 best practices for bridging generational gaps:
  • Initiate conversations concerning the generation gap at all levels of the organization;
  • Educate managers and employees on the different generations in the workplace;
  • Match different generations represented in your credit union with your member base;
  • Reward employees based on productivity and performance, not seniority;
  • Educate and train employees to know how to best approach and communicate with employees from different generations;
  • Offer appealing benefits that apply to employees of all ages;
  • Train managers and leaders how to lead teams and departments with men and women from different generations;
  • Present various forms of training and tuition reimbursement for employees of all ages;
  • Establish a mentorship program where older employees teach younger employees; and
  • Encourage and establish multigenerational teams.

Ill. League Expects Full House At Small-Asset-Size CU Conference

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NAPERVILLE, Ill. (8/6/13)--Another capacity crowd is expected for the Illinois Credit Union League's annual Small Asset Size (SAS) Credit Union Conference. The two-day conference, which has been expanded this year to include credit unions up to $30 million in assets, will be held at ICUL's offices in Naperville starting today.
 
"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. "That's what we're all about."
 
The conference will provide an educational event to address challenges and concerns of credit unions in this particular asset group. Many topics will center on helping small credit unions compete in today's marketplace. There also will be time built into the schedule for attendees to network and share best practices with one another.
 
A highlight from the first day of sessions will include keynote speaker Martha Ninichuk, deputy director, Office of Small Credit Union Initiatives for the National Credit Union Administration.
 
A panel of speakers from the NCUA and the Illinois Division of Financial Institutions (DFI)  also will dialogue with the group. They will include Ron Jones, NCUA economic development specialist; Malia Peel, NCUA economic development specialist; and David Anderson, DFI senior problem case officer.
 
The first day will continue with presentations by Jim McParlan, attorney, on "HR Compliance for Small CUs"; and "Mobile Apps" by Patty Smith, LSC vice president of sales and business development.
 
The second day of the conference will include another round of presentations on pertinent topics, including, "Affordable Care Act/Healthcare Reform", "Marketing for Small CUs", "Small Dollar Loans", and an executive update from CUNA Mutual Group. The conference will finish with an open forum and networking lunch, facilitated by Joni Senkpeil, ICUL director of small credit union development.
 
Nearly 70% of ICUL's affiliates hold less than $30 million or less in assets. After being well received by participants initially in 2002, ICUL has offered this conference every year since then. The Illinois Credit Union Foundation and CUNA Mutual Group will sponsor this year's event.

Some Ohio CUs Add Value Through Mergers

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AKRON, Ohio (8/6/13)--Some credit unions are merging to gain financial strength and provide value for members, according a July 29 Akron Beacon Journal article.
 
The number of Ohio credit unions has decreased 12.5% during the past five years, falling to 356 this year. The numbers mirror a nationwide decline, and are the result of widespread industry consolidation and not credit unions simply shutting their doors, the article said.
 
Nationwide, the number of active credit unions peaked at 12,977 in 1970. Last year, there were less than 4,300.
 
The industry consolidation has helped and not harmed consumers, experts say, with more members having access to ATMs, online banking, business loans and even phone apps than ever.
 
In nearly all cases mergers are to the benefit of members, said Patrick Harris, the Ohio Credit Union League's director of media and public relations, told the Beacon Journal.
 
Credit union membership and assets are growing, as the remaining credit unions are becoming stronger.
 
Membership rose from to 2.7 million from 2.6 million and assets climbed to $24.4 billion from $19.3 billion over the same time.
 
Credit unions are merging to survive and add value, Rose Bartolomucci, president of Towpath CU in Fairlawn, Ohio, told the Beacon Journal. Towpath CU merged with TeleCommunity CU in 2011.
 
Some smaller credit unions, overburdened by regulations, struggle to keep pace with technology aid Michael Wettrich, deputy superintendent for the Ohio Department of Commerce Division of Financial Institutions.

Special Report: Minnesota CUs Earn High Grade For Student-Run Branches

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MADISON, Wis. (8/6/13)--In a recent initiative to grade all 50 states on their efforts to teach the ABCs of financial literacy to high school students, 21 states earned D and F grades from the Center for Financial Literacy at Champlain College. However, some credit unions are trying to fight these dismal results.

For instance, three credit unions in Minnesota are using student branches to increase financial literacy levels among their high school age students within their communities. HomeTown CU in Owatonna, St. Paul (Minn.) FCU and Postal CU in Woodbury have opened student branches in the past three years.
 
HomeTown CU opened the first student-run branch in the fall of 2011 after working for five years with teachers, the school board and school administrators of Owatonna High School.
 
The credit union had established a previous presence at the high school--and a rapport with the school's business department by providing financial literacy presentations. "The student branch really brings us to the forefront," said Kim Westphal, Hometown CU president/CEO. "Being there every day, being able to promote financial literacy among the students, and talking to them about how important it is to establish savings, makes such a difference. In the long run that benefits the credit union to have financially literate youth and adults in the community."
 
The Hometown CU student branch is open from 11 a.m. to 1 p.m. every school day over the lunch hour. Two students operate the branch every day. The students are also credit union employees.
 
St. Paul FCU opened its student branch at Como Park Senior High School in St. Paul in October 2012. The credit union also plans to open additional student-run branch at another high school in the near future, St. Paul FCU President/CEO Theresa Malone told News Now.
 
The decision to open a student branch was a reflection of the St. Paul FCU's board of directors' commitment to financial literacy and the credit unions commitment to the people helping people philosophy, Malone said.
 
"We all benefit: The school, the students, the community, the credit union and the credit union movement as a whole," Malone said. Society benefits from having financially educated youth who have the opportunity to make better financial decisions as they grow into adults. It is a win-win for all."
 
The student branch is open from 10:00 am to 12:30 p.m. each school day. St. Paul CU also participates in shared branching so the student branch can also assist with transactions from other credit unions. The branch also includes an ATM.
 
In its first year school year, the student branch opened 33 accounts. Malone expects to double that total this year. "At first, a lot of it was about educating the students about who we are," she said. "That's another benefit of student run branches: Educating people about credit unions."
 
Postal CU opened its student branch in Tartan High School in January.
 
The credit union had a long-term relationship with the high school through marketing and on-the-job training programs.
 
Community involvement is among the credit union's goals and financial literacy was a community identified by the credit union.
 
"This is not going to drive a hard return on investment," Brian Sherrick, Postal CU president/CEO, told News Now. "It's a long-term commitment to our community.
 
The student branch fulfills two of the seven core cooperative principles and values: education and concern for the community, Sherrick noted.
 
"It's really a big part of what makes us a credit union," he said.
 
The student credit union is open ten hours a week. The three students who work in the student branch also work at Postal CU's brick-and-mortar braches. The students started working at the credit union in May 2012 to gain a full understanding of Postal CU's products, services and operations before the student branch opened. 
 
Alisha Johnson, Postal CU senior vice president of marketing sales and service, believes that among the chief benefits of the branches is the opportunity for high school students to learn about financial literacy from their peers.
 
"It's one thing for an adult to tell you the benefits of saving money, but when it comes from someone you from soccer or the National Honor Society, the message is so much more believable," Johnson said. "It makes their decisions much more conscious, and that's what we're trying to do."
 
This article is part of a News Now series of exclusive, special reports on credit unions' outreach efforts and innovative ideas. Fostering service excellence and raising awareness about the value credit unions provide their members and communities are two prongs in credit unions' Unite For Good campaign toward a vision in which Americans choose credit unions as their best financial provider.

Financial Center CU Helps Launch Design Competition To Assist League PAC

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STOCKTON, Calif. (8/6/13)--Stockton, Calif. -based Financial Center CU, in partnership with I.C. Ink, is calling for entries in their first annual CU T's Design Competition to help raise awareness of the credit union difference and funds for the California Credit Union League Political Action Committee.
 
Launched last fall, CU T's is a line of hipster t-shirts created to assist the league PAC. Design submissions are being accepted through Aug. 21. Public voting will help determine which design will be used for the 2013 CU T.
 
In its inaugural year, CU T's featured three designs created by Financial Center CU. However Michael P. Duffy, Financial Center CU president/CEO, wanted to open the design process this year to help increase participation in the project.
 
"Everyone appreciates a clever and whimsical shirt," said Duffy. "But those shirts become exponentially more cool when you know you had a hand in the design and selection process. Our goal is to get the buzz started about International Credit Union Day. Getting the message out has to be fun, so people don't feel like they're simply being lectured on the merits of a cooperative structure," Duffy said.
 
Credit union executives, staff, volunteers and members can submit their designs on the contest website where they can also see other submissions and vote for their favorite. Voting ends on Aug. 22 at 8 p.m. ET when the top design will be submitted to I.C. Ink to start the production process.

VSECU Uses Student LIFT Program To Defray College Costs

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MONTPELIER, Vt. (8/6/13)--Vermont State Employees CU (VSECU) in Montpelier has a program called Loan Independence for Today (LIFT) that provides some lucky Vermont residents with relief from student-loan debt.
 
The Student LIFT program this year added a new category to recognize individuals who are the first in their family to attend college. So this year, there are three categories with one award provided in each: Financial Literacy, Service To Vermonters and First Generation (The Times Argus Aug. 3). 
 
Each of the three categories has different qualification requirements and offer $5,000 annual awards to applicants with diverse interests and talents, VSCU told the paper.
 
The award program is open to any VSECU member who is Vermont resident and is paying off a student loan debt.
 
Graduates can be financially challenged by making student loan payments, along with paying for other expenses and providing for dependents, while going through the often-difficult process of finding a job, Steve Post, VSECU CEO, told the paper.
 
The Credit Union National Association has formed a student loan working group to explore current issues related to credit unions' offering private student loans to members, CUNA's Regulatory Advocacy Report informed readers last month (News Now July 16).

The group's focus will be to develop best practices for credit union student loans and to monitor related regulatory activity at the Consumer Financial Protection Bureau (CFPB) and the National Credit Union Administration.

California CU Creates 'Baseball' Competition To Increase Loans

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REDONDO BEACH, Calif. (8/6/13)--A California credit union has come up with a new way to boost consumer lending its members.
 
Click to view larger image Fifteen employees were divided into a red and blue team, as South Bay CU, based in Redondo Beach, Calif., found an innovative way to rally its employees. They worked out a game plan for a second quarter "baseball season" of in-house competition to increase consumer loans. (Photo provided by South Bay CU)
While many companies talk about employees as team players, South Bay CU, based in Redondo Beach, Calif., found an innovative way to rally its employees. Maricela Jauregui, vice president of member services at the $79.1 million asset credit union with branches in Torrance and Redondo Beach, Calif., had an idea on a Friday night, when, coincidentally, South Bay CEO Jennifer Oliver was at a baseball game.
 
They worked out a game plan for a second quarter "baseball season" of in-house competition to increase consumer loans. The 15 employees were divided into a red and blue team, with Oliver acting as "umpire." The Brick House and Loan Ranger teams were captained by experienced loan closers, with the front line and support staff working to gain points to get on base--Oliver and Maricela devised a system in which any staff member could earn singles, doubles, triple, home runs and even grand slams to earn "runs" for their teams by promoting loan activity.
 
Front line staff learned new tasks--from taking loan applications, opening new accounts to serving as notaries--to give the loan closers more time to close loans.
 
"There was a real synergy," Oliver said. "People were thinking outside the box, learning new parts of their jobs. They were totally charged because they realized what we were trying to make happen. Where before people might have said 'it's not my job,' they learned how and why their support is necessary."
 
Oliver noted that during the competition, South Bay's monthly average funding for consumer loans increased by 350% from the previous four-year monthly average. April, May and June were million dollar months, for a total of $3.4 million in consumer loans, which equaled 91% of all consumer loans business in the previous year.
 
Buoyed by hitting it out of the park in the second quarter, South Bay challenged other credit unions in the network to see who could fund the most consumer loans. They are vying with United Advantage CU in Portland, Ore., and plans are underway to find a competitor for the fourth quarter. If no credit union steps up, Oliver said, she plans another in-house competition with a football theme.
 
Oliver's message is that "success happens with focus and fun." It's important that team members know why it's important to make loans and how each employee can make a difference, she added.
 
"It's part of a larger cultural change, encouraging staff members to think of themselves as business partners," Oliver said. "Finances are boring, but the baseball game gave us a tangible way to show the same goals and numbers in a fun way."

Fort Knox FCU Helps Members During Furloughs

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RADCLIFF, Ky. (8/5/13)--Fort Knox FCU in Radcliff, Ky., is offering furlough assistance options to members who are federal employees or federal contractors. Nearly 100 members have been helped so far.
 
The options include reduced payments on existing loans, interest-free loans for 30 days, and no penalty for early withdrawal from share certificates of deposit, said the Kentucky Credit Union League (By The Way Newsletter July 31).
 
The $1.06 billion asset credit union introduced the options to help Department of the Army civilian employees and contractors who are dealing with furloughs or loss of pay due to sequestration.
 
"There are as many as 5,000 civilian federal workers and contractors in our service area and many of them could face up to 176 non-contiguous hours of furlough from work without pay," said Bill Rissell, president/CEO of Fort Knox FCU.
 
"That could mean as many as 22 eight-hour work days between now and the end of the fiscal year in September," he added. "Missing that many days of pay will likely be a hardship for these families."
 
So far, participating members have reduced payments on roughly 200 loans, totaling $2.45 million in balances, the credit union said. Also, it allows early withdrawal up to $10,000 from share certificates of deposit, with no penalty.

CU System Briefs (08/05/2013)

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  • CLEVELAND, Ohio (8/5/13)--Federal prosecutors in Cleveland are seeking to seize the $1 million home of the former CEO of the Taupa Lithuanian CU, which was placed into conservatorship July 12 and liquidated (The Plain Dealer Aug. 2). CEO Alex Spirikaitis, who disappeared, is still at large, wanted on charges of falsely reporting more than $16 million in assets allegedly deposited with other credit unions in 2011 and 2012, said Assistant U.S. Attorney James Morford. Prosecutors said Spirikaitis allegedly used a computer program called Phantom Font to download documents and alter them on his computer, and alleged he paid a builder $1.7 million to build the house with checks drawn on the credit union ...
  • FAIRBORN, Ohio (8/5/13)--Wright-Patt CU has teamed up with Kettering Health Network, Dayton Children's Hospital and the Ronald McDonald House of the Miami Valley to sponsor a competition to help area residents reduce their medical debt by getting both financially and physically fit. In Savings Race 6--Health and Financial Fitness Edition, coaches and advisers work with five teams to create a plan to improve their financial and health outlook. Teams receive free education and coaching and participate in special challenges to learn how to save better, borrow smarter and create a healthier lifestyle. Cash prizes are awarded, including a $10,000 grand prize. "There is a direct correlation between health and finances," said Tracy A. Fors, Wright-Patt's vice president of marketing and business development. Applications will be due Aug. 24 and the teams will be announced at a kickoff in October ...
  • FARGO, N.D. (8/5/13)--MemberTree Consultancy, a Fargo, N.D.-based credit union-focused marketing company, will conduct a 15-minute webinar Thursday at noon CT to introduce its Community Challenge Program. In the program, credit unions encourage their community to save a designated amount in loan interest within a certain period. Community members save money when they refinance a loan with the participating credit union. After the savings goal is reached, the credit union donates a predetermined amount to selected local charities. The webinar will review how to get a  challenge running as well as tactics and tools. Presenters are Dan Altenbernd, chief operating officer at MemberTree and Northfield, N.J.-based Jersey Shore FCU business development staffers Erna Laielli and Kyle Jaremko. For more information use the link or call 866-551-0177 ...
  • LENEXA, Kan. (8/5/13)--Margaret J. Blankers Public Relations Group is marking the conclusion of its 10th year of serving credit unions, corporates, credit union service organizations and other service providers by redesigning its website and incorporating a new blog with perspectives about cooperation, media relations and crisis communications. Founded  in 2002 by Margaret Blankers, MJB PR Group has worked with clients to navigate mergers, rebranding efforts, natural disasters and business issues, as well as media and promotional activities to build awareness. The firm counts among its clients e-marketing firm DigitalMailer Inc. and ALM First Financial Advisors LLC ...

Filene Seeks Input On CU Reg Burden

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MADISON, Wis. (8/5/13)--Filene Research Institute is seeking North American credit unions to complete a survey on increasing regulation on credit unions in Canada and the U.S.
 
Responses are due August 13. The responses will form the basis of a study seeking to quantify regulatory burden for credit unions, especially its differing effects across asset sizes.
 
The survey will form the basis of a report by Professors Panu Kalmi, University of Vaasa, Finland, and Giovanni Ferri, LUMSA University of Rome, Italy.
 
The survey will also ask respondents to calculate their time spent complying with specific regulations in an attempt to identify the most burdensome regulations.
 
The Credit Union National Association continues to work with the U.S. Congress, the Consumer Financial Protection Bureau (CFPB) and the National Credit Union Administration (NCUA) to minimize regulatory burdens on credit unions. Recently, CUNA reiterated that CFPB and NCUA should conduct detailed cost-benefit analyses on proposed and final regulations to curb the "creeping complexity" of burdensome regulations on credit unions--especially small credit unions.

CUNA To AARP Magazine On Online Banking: Convenience Rules

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WASHINGTON (8/5/13)--Convenience rules, when it comes to embracing online banking, the Credit Union National Association advised readers of AARP magazine (July 31).

"You can conduct your financial business wherever you are, rather than at your desk or kitchen table at home," said Paul Gentile, CUNA's executive vice president of strategic communications and engagement, in the article. Gentile was one of five experts to answer questions about online banking for older readers who may not be quite convinced online banking is for them.

"Many institutions offer free mobile phone apps you can download that allow you to check your balances, deposit checks, transfer money and pay bills," he said.

Although ATMs are "quite popular for making deposits," Gentile said, "some experts predict they have seen their best days, particularly with the popularity of remote deposit capture--a service many institutions have adopted. With a scanner or fax and a computer, members scan their check for deposit and send it electronically from anywhere."  He noted consumers also can use the camera on their mobile phone to electronically send deposits.

Gentile explained it takes only a short form to register for an online banking account and that readers would need certain information to verify their identity. He also noted that "the biggest drawback may be your own level of personal comfort with obtaining and using financial services in this manner, and perhaps face-to-face customer service, if that is important to you."

The article discussed ways online banking customers can keep their information secure and other questions the uninitiated may have. For the full article, use the link.

Study: Card Payments Foretell Delinquencies On Other Loans

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CHICAGO (8/5/13)--Consumers who pay more than the minimum amount each month on their credit card bills are more likely to have lower delinquency rates not only on their card accounts but also on their mortgages and auto loans, according to a new study from TransUnion. Those who paid close to the minimum amount had higher delinquency rates.
 
The study gives lenders, including credit unions, another tool in evaluating consumer risk that may not show up through traditional credit scores, said the Chicago-based credit reporting agency.  In the past, TransUnion has conducted several similar studies that concluded those who revolve or pay partial card payments are riskier. Last year's study found them to be three times riskier on new bank cards and five times riskier on existing bankcards than transactors who pay off the full amount each month.
 
The new study confirms conventional wisdom that transactors are better risks and "has quantified just how big an increase in risk revolvers present," said Ezra Becker, co-author of "Minimum Payments vs. Actual Payments: A Look at Debt Service Behaviors and Credit Capacity."
 
Just as important, he said, "the study revealed that not all revolvers are equal; those who pay more than the minimum on their credit cards, even if they don't pay off the full balance, present less risk across product types."
 
Each month, of consumers who make payments on their credit cards, about four in 10 will pay off their entire card balance. Six in 10 will pay only part of their remaining balance, and of those six, two will pay the minimum only.
 
The study also found that in some cases, individuals with lower credit scores and higher Total Payment Ratios (TPR)--a consumer's total monthly credit card payments divided by total minimum due on all the cards--actually outperformed those with higher credit scores but lower TPR levels.
 
"The only anomaly we found was that higher TPR levels actually resulted in higher auto and mortgage delinquencies for subprime and near-prime mortgage borrowers, but we attribute this performance to the mortgage crisis and its impact on the payment hierarchy--many consumers facing foreclosure placed a higher emphasis on paying off their credit cards," said Becker.
 
The study included performance on samples from 12 million mortgage consumers, 17 million credit card consumers and 22 million auto loans worldwide. To access the free report, use the link.

CUNA: CU Loans Up, Savings Down In June

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MADISON, Wis. (8/5/13)--Credit union loans outstanding increased in June, while savings balances dropped, according to the June monthly sample of credit unions by the Credit Union National Association.
 
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"Credit loan balances rose 2% in the first of 2013, faster than the 1.8% pace set in the first half of 2012," Steve Rick, CUNA senior economist, said Friday. "New-auto loans continue to outpace other categories, growing 5% over the last six months, compared with 2.8% for the similar period last year. Fixed-rate first mortgage loan balances grew a strong 1.7% in June as low rates in April and May encouraged many fence-sitting homeowners to jump off and buy a home."

Credit union loans outstanding grew 0.8% to $627.6 billion in June and 2% during the first half of 2013. Fixed-rate first mortgages led loan growth, rising 1.7%. Used-auto loans grew 1.6%, while new-auto loans grew 1.5%. Unsecured personal loans rose 1.2%, and credit card loans increased 1%. Adjustable-rate mortgages, home-equity loans and other mortgages declined 1.4%, 1.1% and 0.7%, respectively.

"With the recent jump in mortgage rates we expect slower mortgage balance growth in the second half of the year," Rick said.

Credit union savings balances dropped 0.4% in June to $930 billion, compared with a 0.8% increase in June 2012. Individual retirement accounts increased 0.8%, regular shares 0.4%, and money market accounts 0.1%.  Share drafts declined 3.9% and one-year certificates dropped 1%.

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"Savings balance growth has tapered off considerably over the past year," Rick explained. "Savings balances rose only 3.7% during the first half of 2013, down from 5% in the first half of last year. Certificates of deposit (CDs) continue to decline as members roll over maturing CDs into regular savings balances while they wait for the Federal Reserve to raise interest rates sometime over the next two years."

Regarding asset quality, credit unions' 60-plus-day delinquency rate remained at 1% the past five months.

"Credit quality has leveled off in the second quarter," Rick said. "The delinquency rate plateaued at 0.98% in the second quarter, down from 1.2% last year but still above the 0.75% long-run average."

With loan growth outpacing savings growth during June, the loan-to-savings ratio increased from to 67.5% from 66.7% in May. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--was 19%.

Total credit union membership grew 0.2% to 97.6 million, said CUNA's monthly estimates.

The movement's overall capital-to-asset ratio remained at 10%, with $110 billion in total capital.

CUs Must Improve Among Non-members

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MADISON, Wis. (8/5/13)--To expand their membership ranks, credit unions must improve awareness--especially among Generation Y and Hispanics--about the advantage of using their products and services, according to the Credit Union National Association's 2013-2014 National Member and Nonmember Survey Results.
 
The August edition of Credit Union Magazine provides an in-depth look at the survey findings.
 
Although credit unions generally have lower loan rates, higher savings rates and more consumer-friendly fees, 64% of nonmembers say they are "not at all familiar" or "not very familiar" with credit unions.
 
That figure rises to 71% among nonmembers ages 18 to 24. Notably, only 22% of that segment belongs to credit unions, while one-third of all U.S. adults--97 million--are credit union members.
 
Credit unions will benefit tremendously if they can mobilize quickly to educate and attract young adults, according to Jon Haller, CUNA's director of corporate and market research.
 
"You want to be with these members when they start buying homes and cars, opening individual retirement accounts, taking out student loans, and purchasing other financial products and services," Haller said.
 
Likewise, half of Hispanics surveyed have never heard of credit unions or aren't familiar with them. Only about 22% of Hispanics are credit union members, compared with 35% of blacks and 36% of whites. Only 14% of Hispanics claim a credit union as their primary financial institution.
 
In contrast to Gen Y, however, many Hispanics are unbanked or underbanked--with 54% having accounts at financial institutions.
 
When surveying nonmembers about what it would take for them to join a credit union, three prerequisites stand out. In addition to creating better awareness of their products and services, credit unions should provide more convenient branch locations and offer higher interest rates on savings. Each response was favored by 17% of respondents.
 
Nonmembers also asked that credit unions lower rates on loans (15%) and have lower service charges or fees (13%).
 
The most difficult nonmembers to attract will be the 23% of respondents who say there's nothing credit unions could do to persuade them to join.
 
See related News Now article, CU Member Loyalty Rises At Banks' Expense, by using the link.

League Creates Internship For People With Disabilities

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MERIDEN, Conn. (8/5/13)--The Credit Union League of Connecticut has partnered with The Arc Connecticut to create an internship program for people with disabilities.
 
Through the program, called Workability, Connecticut credit unions will be able to hire a high school intern living with disabilities for this fall. The internship is ten weeks long. The program is based on an existing program at Hartford (Conn.) Healthcare FCU, designed by CEO Carol Bayreuther.
 
"I can't imagine a more exciting, productive, and beneficial program for credit unions to continue their involvement in their community," said Barbara Bass, league vice president of education of human resource development. "Credit unions will be providing an opportunity for interns to use the skills they have learned, thrive in an active, professional environment, and assist in the credit union's day-to-day functions--a positive experience for all concerned."
 
The Arc Connecticut is an association initiative of The Arc, a national, proactive advocacy organization for people with intellectual and developmental disabilities.
 
Students have been trained to work in a business environment, and the Workability program will provide practical hands-on experience that will benefit both the intern and the credit union, the league said.

Minnesotans Continue Shift To CUs

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ST. PAUL, Minn. (8/5/13)--Minnesota credit unions continued a trend of steady growth in the first half of 2013, maintaining gains in membership and loans, according to the Minnesota Credit Union Network.
 
"Minnesotans trust member-owned credit unions and have always been strong advocates for them," Mark Cummins, MnCUN president/CEO. He said many consumers feel that credit unions--rather than for-profit financial institutions-- are "more aligned with their values."
 
Overall, Minnesota's credit unions experienced mixed results in key financial performance indicators for the second quarter. However, modest economic growth is expected to improve credit union operating results during the remainder of the year, MnCUN said.
 
Minnesota consumers and businesses also continue to choose credit unions as their primary financial institution.
 
State results in key areas include:
  • Membership. Membership grew by 6,000 in the first quarter to reach 1,579,000-- a 0.7% growth rate. That number, although slightly behind the pace of the 0.9% growth reported in the first quarter 2012, illustrates state consumers' continued interest in the credit union business model, MnCUN said.
  • Assets. Assets declined by just four-tenths of a percent between the first and second quarter, with 6.2% growth between second quarter 2012 and second quarter 2013. Despite a drop from 9.4% in 2012 to 7.6% in the first quarter, total assets are well above the national average of 5.3%, said MnCUN. In the first quarter, Minnesota credit unions asset-quality measures improved. Overall, the 60-plus-day dollar delinquency rate fell to 0.90%, a 0.19% decline from fourth quarter 2012. The Minnesota credit union delinquency rate is less than half of that reported by Minnesota banks (1.82%).
  • Deposits. Deposits decreased 0.4% in the second quarter from the first quarter, but increased 6.9% from second quarter 2012. Core deposits grew to 41.6% in the first quarter from 40.1% in 2012, continuing a long-term positive trend.
  • Total loans. Loan balances increased 2.7% in second quarter, up from a 0.5% decrease in the first quarter. Year-over-year loan growth was 4.4% from second quarter 2012. Also, despite a first-quarter decrease in overall lending (0.5%), credit unions' member business lending grew at a rate of 1.6% during the same time.
  • Net income. Minnesota credit unions are rated as "well-capitalized" by the National Credit Union Administration, with a net worth of 9.99%. The NCUA considers a credit union as well-capitalized if its net worth is above 7%.
The summary and analysis was compiled by MnCUN from NCUA's quarterly report.

Wisconsin CUs 'Thriving' In First Half 2013

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PEWAUKEE, Wis. (8/5/13)--Earnings increased at large Wisconsin credit unions in the first half of the year, boosted by a strong lending environment and a slowly improving economy, said the Wisconsin Credit Union League in the Milwaukee Journal Sentinel (July 30).
 
Delinquency rates and loan losses have trended down, while the cost of funds remains low at state credit unions, Brett Thompson, league CEO, told the Journal Sentinel.
 
Auto and a residential real estate lending have improved much faster than the rest of the economy, the Journal Sentinel said.
 
Income at Royal CU, Eau Claire increased almost 91%, thanks to fewer loan losses and reduced expenses, according to new data from the National Credit Union Administration.
 
Consolidation among Wisconsin credit unions is likely to continue, Thompson told the Journal Sentinel. Last year, 13 Wisconsin credit unions merged into other credit unions, according to the state Department of Financial Institutions.
 
The two main forces driving consolidation are increasing and more-complex financial regulations, and the difficulty of attracting financial professionals interested in running a small credit union, Thompson said.
 
Credit unions also continue to see strong demand for member business loans, Thompson said. Credit unions maintain they can do more for small businesses if the cap on their member business loans were lifted to 27.5% of total assets from 12.25%. The Credit Union National Association has estimated that lifting the MBL cap would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.

CU System Briefs (08/02/2013)

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  • FORT WAYNE, Ind. (8/2/13)--A man was arrested in connection with a July 22 heist at Three Rivers CU in Fort Wayne, Ind., according to Fort Wayne Police. Reginald A. Greenwell, 28, of Fort Wayne, was preliminarily charged with armed robbery for the incident at the $727 million asset credit union. A surveillance system camera captured still images of a robber--wearing a dark coat with emblems and a dark Atlanta Braves hat--at the teller's counter (Journalgazette.net July 31) ...
  • LINTHICUM, Md. (8/2/13)--SECU, based in Linthicum, Md., will pay $4.75 million during the next 10 years to have the name SECU Arena placed on Towson University's new basketball facility. SECU will pay the university $475,000 annually, the $2.57 billion asset credit union said in a press conference Thursday to announce the deal. That payment also will allow the credit union to have access to one of the multi-purpose rooms and to one of the building's two large corporate suites in the $70 million, 5,200-seat arena. SECU has allocated much of its marketing budget in recent years to partnerships throughout the University System of Maryland to align itself with college students. That is because one of its core areas of concentration is financial education, Carmen David Mirabile, SECU assistant vice president of marketing, told The Baltimore Sun (July 31) ...
  • MILWAUKIE, Ore. (8/2/13)--Search and rescue volunteers at Mount Hood will have better communications, even in white-out conditions, thanks to a $10,000 donation from Milwaukie, Ore.-based Clackamas FCU. The donation purchased nearly a dozen new in-reach radio units for the Mt. Hood Search and Rescue Council. The volunteers trained on the new devices on Monday. The radios use the satellite network, which means the volunteers don't have to rely on cell coverage or any other infrastructure. Rural areas have very little or no infrastructure. The radios also give the command base the ability to direct a rescue team to a missing person during white-out conditions (KOIN.com July 30) ...
  • SUITLAND, Md. (8/2/13)--Andrews FCU based in Suitland, Md., has selected Jim Hayes as its new CEO. Hayes has served as interim CEO since September, the $900 million asset credit union said Thursday.  "With his extensive experience and proven dedication to Andrews FCU, Jim will be a strong leader as the credit union continues to grow and reach out to more members within the communities we serve," said Gen. Frank Cardile, board chairman. Hayes joined the credit union in 2010. The 105,000-member credit union said it had one of its best performing years in 2012, attracting 7,000 new members and more than doubling its loan portfolio.  Hayes previously served as senior vice president of business development and marketing at Western Corporate FCU before becoming chief financial officer in 2008 ...

NEW: CU Loans Up, Savings Down In June

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MADISON, Wis. (8/2/13, UPDATED 1:30 p.m.. CT)--Credit union loans outstanding increased in June, while savings balances dropped, according to the June monthly sample of credit unions by the Credit Union National Association.

Credit union loans outstanding grew 0.8% in June and 2% during the first half of 2013. Fixed-rate first mortgages led loan growth, rising 1.7%, followed by used-auto loans (1.6%), new-auto loans (1.5%), unsecured personal loans (1.2%), and credit card loans (1%). Adjustable-rate mortgages, home-equity loans and other mortgages declined 1.4%, 1.1%, and 0.7%, respectively.

Credit union savings balances dropped 0.4% in June, compared with a 0.8% increase in June 2012. Individual retirement accounts increased 0.8% and regular shares and money market accounts grew 0.4% and 0.1%, respectively.  Share drafts (3.9%) and one-year certificates (1%) each declined.

Regarding asset quality, credit unions' 60-plus-day delinquency rate has remained at 1% during the past five months.

With loan growth outpacing savings growth during June, the loan-to-savings ratio increased from to 67.5% in June from 66.7% in May. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--was 19% as of June 2013.

Total credit union membership grew 0.2% during June to 97.6 million.

The movement's overall capital-to-asset ratio remained at 10%, while the total dollar amount of capital is $110 billion.

Monday's News Now will have a CUNA economist's analysis of the data.

Gov. Cuomo Signs New York ATM Disclosure Bill

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ALBANY, N.Y. (8/2/13)--New York Gov. Andrew Cuomo Thursday signed credit union-supported legislation that eliminates the requirement of physical fee disclosures on ATMs and brings state law into conformity with the federal law signed last December by President Barack Obama.

The Credit Union Association of New York said it has been advocating aggressively for the state legislation, citing burdensome ATM fee disclosure regulations that created legal and financial issues for many credit unions.

The Assembly bill was introduced by Assemblywoman Annette Robinson (D-Metropolitan), and Sen. Joseph Griffo (R-Utica-Rome/Central) introduced the Senate bill.

"We commend Gov. Cuomo, Assemblywoman Robinson and Sen. Griffo for their outstanding leadership and support on this important issue," said CUANY President/CEO William J. Mellin. He acknowledged "the grassroots efforts of many credit union leaders, which played an important role in this legislative victory."

Credit unions and other financial institutions across the nation had experienced nuisance lawsuits from people who would remove the notices from the ATMs, then claim disclosure violations. The Credit Union National Association and state leagues advocated strongly for an amendment to the Electronic Funds Transfer Act, and the Consumer Financial Protection Bureau in March implemented a rule to eliminate redundant ATM disclosures.

Ill. League Recognized For Work Against Elder Abuse

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NAPERVILLE, Ill. (8/2/13)--Two state agencies have honored the Illinois Credit Union League for its support of legislation protecting elderly credit union members from financial abuse, providing credit unions required training about elder abuse and participating in the Older American Protection Network (OAPN).

The recognition was presented Wednesday by Manuel Flores, acting secretary of the Illinois Department of Financial and Professional Regulation (IDFPR), and John Holton, director of the Illinois Department of Aging, during the Second Annual Summit of the Prevention of Elder Financial Fraud and Abuse.

Flores and Tonya Sweat, consumer compliance policy and outreach director at the National Credit Union Administration, spoke highly of credit unions' efforts to address issues affecting their older members, said the league.

In 2010, the league worked with the two state agencies to negotiate the final version of Senate Bill 3267, which amended the Elder Abuse and Neglect Act. The measure required financial institutions to provide training about recognizing elder abuse for employees with direct member contact.

ICUL also assisted with development of the joint rulemaking to implement the new requirement. The league offers credit unions ongoing training required under the rule and participates in the meetings of the OAPN.

Stakeholders at the state and local level worked with the Consumer Financial Protection Bureau's Office for Older Americans to create and sustain OAPN. It is the foundation for the iFAST (Illinois Financial Abuse Specialist Team), the annual financial summit, and the development of inter-disciplinary protocols and education efforts, all focused on preventing financial abuse.

"This is an excellent example of government agencies and the league successfully working together on behalf of Illinois credit unions and their members," said Stephen R. Olson, ICUL executive vice president and general counsel.

CBSI Paper: Investment Relationship Boosts Loyalty 40%

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MADISON, Wis. (8/2/13)--An investment relationship with a credit union increases member loyalty by more than 40%, which helps cement the overall member relationship and lock in additional years of revenue from credit union services, according to a white paper published by CUNA Brokerage Services, Inc.
 
"The Opportunity for Credit Unions in Investment and Life Insurance Services," based on research and analysis by Kehrer-Saltzman and Associates, examines key demographic and financial characteristics of credit union households and how they use financial service providers.
 
Almost two-thirds of credit union member households surveyed would prefer a credit union to be their primary place to bank if it offered a full range of financial services, the paper said.
 
Once a credit union has established itself as the primary financial institution for a household, it enjoys a wide loyalty advantage, compared with households that look to a commercial bank for their financial services, the paper said. While 44.2% of all credit union households say they would not consider switching to another financial institution, that number jumps to 63.2% if households have purchased investments from a credit union they consider their primary place to bank. More than half of the credit union member households with purchased investments and life insurance at any credit union say they would not consider switching.
 
"This loyalty influences where the household turns when it seeks financial advice," the paper said. "Households that consider their credit union to be their primary provider are significantly more likely to turn to their credit union for advice about a windfall than are households that consider a bank to be their primary financial services provider."
 
Trust in credit unions is strongly correlated with the purchase of investment or insurance products. Households that purchased these products are 62% more likely than all U.S. households to have a great deal of trust in credit unions.
 
Household that have purchased an investment or insurance product from the credit union they consider their primary source of financial services are 74% more likely to have a great deal of trust in credit unions than the general population.
 
"The immense trust advantage that credit unions enjoy over other financial institutions must be counted among credit unions' true strengths," the paper said. "It also represents an important opportunity for credit unions to leverage their trust advantage to sell more investment and insurance products to their members."

Study Notes Language Shift In Hispanic Market

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WASHINGTON and FARMERS BRANCH,Texas  (8/2/13)--Credit unions with outreach programs to Hispanics in their communities will note a study that suggests a language shift--from Spanish to English--is occurring among Hispanic adults in the U.S.
 
In 2012, roughly 82% of Hispanics surveyed said they received some of their news in English, up 78% from 2006, according to a study by Washington, D.C.-based Pew Research Hispanic Center. It also found that number who get at least some news in Spanish declined--to 68% from 78% during the period.
 
Nearly one-third (32%) said they get their news exclusively in English, up from 22% in 2006, while those who received their news exclusively in Spanish decreased to 18% in 2012 from 22% six years earlier.
 
Pew says the results confirm that:
  • A growing share of Hispanics speak English well;
  • The immigration rate is slowing so the percentage of Hispanic adults who are foreign-born is declining;
  • The average number of years adult immigrants have lived in the U.S. is longer--20 years in 2011, compared with 16 years in 2000; and
  • U.S.-born Hispanic adults, who are more proficient in English, are increasing.
One of the credit unions taking note of the study is GECU, based in the border town of El Paso, Texas, where 25% of residents are foreign-born and about 80% are Hispanic, said the Cornerstone Credit Union League (Leaguer July 31).

GECU President/CEO Crystal Long said the credit union communicates to the public in both English and Spanish. The $1.7 billion asset GECU has found that older Hispanic generations tend to be Spanish-dominant, but it has more success reaching younger Hispanics by using English, she said.

In communicating with the public, the credit union uses multiple media, but finds the branch is also effective. Having a "strong and visible presence in the community is critical to earning the trust and business of the Hispanic demographic," Long told the league.

GECU will receive the league's Juntos Avanzomas designation and flag--indicating it has demonstrated its commitment to serving Hispanics--on Aug. 28, said the league.

Top 10 News Now Articles for July

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MADISON, Wis. (8/2/13)--An Wednesday article on a U.S. District Court's decision to strike down the Federal Reserve's price caps on debit interchange fees was the most-read News Now article in July. In the article, the Credit Union National Association noted the decision will have "a potentially devastating impact on the ability of small debit card issuers, particularly credit unions, to continue offering this vital payments service to their members and customers."

The Top 10 articles for the month included:
 
10. NCUA Loses Corporate CU Claims Against Barclays Capital
 
WICHITA, Kan. (7/10/13)--Saying that the claims are time-barred, a federal court in Wichita, Kan., today dismissed the National Credit Union Administration's lawsuit against  Barclays Capital over the sale of residential mortgage-backed securities (RMBS) that caused losses to U.S. Central FCU and Western Corporate FCU.
 
9. Even Lawmakers Tweet: 'I Agree#DontTaxMyCU'
 
MADISON, Wis (7/24/13)--The "Don't Tax My Credit Union" message lit up Twitter yesterday--the day the Credit Union National Association declared as DontTaxMyCU Tuesday. And at least two congressmen were willing to join in--tweeting agreement with the "Don't Tax" message, and one adding that credit unions are an "essential banking option" to consumers in his state.
 
8. 'Don't Tax Tuesday' Detailed In New CUNA Video
 
WASHINGTON (7/22/13)--Credit unions and their members are urged to ignite their advocacy efforts tomorrow on "Don't Tax My CU Tuesday" and light up the social media world to get their message across, says today's edition of  "Inside Exchange," the Credit Union National Association's video dialogue on the credit union movement's hottest topics.
 
7. NCUA Reduces 2013 Spending Plan
 
ALEXANDRIA, Va. (7/25/13)--The National Credit Union Administration today approved changes to its 2013 operating budget, reducing that budget by $2.6 million.
 
6. Harland Financial Solutions To Be Sold To Davis + Henderson
 
SAN ANTONIO (7/23/13)--Harland Clarke Holdings Corp. has entered into an agreement to sell its subsidiary, Harland Financial Solutions, to Davis + Henderson Corp. for $1.2 billion in cash.
 
5. NEW From ACUC: Indirect Lending--Yea Or Nay?
 
NEW YORK  (7/2/13)--Do credit unions do a disservice to members via indirect lending? Or is this practice a powerful tool that allows members to obtain loans when and where they want?
 
4. Sen. Brown (D-Ohio) Outlines Upcoming Overdraft Bill
 
WASHINGTON (7/22/13)--Legislation that aims to prevent financial institutions from reordering account deposits and withdrawals to maximize the amount of overdraft fees that may be charged to accountholders was announced by Sen. Sherrod Brown (D-Ohio) today.
 
3. CUNA: Corporate Assessments Should End If Current Trends Continue
 
ALEXANDRIA, Va. (7/26/13)--The National Credit Union Administration approved a corporate stabilization fund assessment of eight basis points (bp) at yesterday's board meeting after reporting on strong performance of the corporate legacy assets. CUNA Chief Economist Bill Hampel believes future assessments may not be necessary, based on that performance as well as housing and economic trends.
 
2. NCUA To Re-align Regional Supervisory Authority In 2014
 
ALEXANDRIA, Va. (7/19/13)--To maximize operational efficiency, the National Credit Union Administration says it will re-align its regional supervision of federally insured credit unions in nine states, effective Jan. 1, 2014.
 
1. Court Rejects Fed Interchange Cap Rule
 
WASHINGTON (7/31/13)--The U.S. District Court for the District of Columbia issued a decision today striking down the Federal Reserve's price caps on debit interchange fees. U.S. District Court Judge Richard Leon said in his ruling that the Fed did not follow congressional intent when it implemented the cap and other changes imposed by what is known as the Durbin amendment.

NerdWallet Announces CU Gen Y Contest Winners

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NEW YORK (8/2/13)--Four credit unions made it to the winner's circle in NerdWallet's Credit Union Gen Y Contest, with  Roseville, Mich.-based Christian Financial CU collecting the grand prize--$2,000.
 
The contestants were judged on a "commencement speech" to 2013 graduates that provides  financial literacy advice to Gen Y and a proposal for using the funds awarded in the contest, said NerdWallet.com (July 31).
 
Christian Financial CU proposed a scavenger hunt with clues on Twitter and Facebook for young followers, said NerdWallet. The hunt would introduce the young members to the $270 million asset's products and services, then segue into an in-person scavenger hunt throughout the local community. Members would use photo clues posted by credit union staff to discover locations related to its services.  Christian Financial also proposed producing a series of financial literacy videos to better educate its GenY members.
 
Other winners:
  • Runner up--$1,000: Cooperative FCU, a $10.5 million asset credit union in Woodridge, N.Y., with a team-based Savings Challenge at three youth credit union sites during the school year;
  • Special prize--$1,000: PremierOne FCU, a $199 million asset credit union in Sunnyvale, Calif., which would turn its Credit Zone program into an interactive online community for Gen Y; and
  • Special prize--$1,000: financial One CU, a $58 million asset credit union in Columbia Heights, Minn., for distributing the message, "What's Your Number?" and a QR code to community businesses and schools that leads participants to understanding their credit scores.
For more detail and to view each credit union's financial advice in the "commencement speeches," use the link.

Co-op Bank, CUs In $42.3M Real Estate Loans In Alaska

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ARLINGTON, Va. (8/2/13)--National Cooperative Bank (NCB), a financial services company providing banking products to cooperatives nationwide, has partnered with two credit unions and a local bank to secure $42.3 million in financing for two commercial real estate transactions in Alaska.
 
"These transactions are the perfect example of how member-owned organizations--like NCB and credit unions--are successfully partnering to provide creative financing solutions to entities across the country," said Steven Brookner, NCB president/CEO.
 
The bank completed the purchase of a $7.25 million loan participation in a $12.25 million loan facility with $5.16 billion asset Alaska USA FCU in Anchorage for the refinancing of the KeyBank Center Midtown, also in Anchorage. The building originally was purchased in 2012 by the Bligh Island Corp., a fully-owned subsidiary of The Tatitlek Corp., an Alaska Native village corporation with 329 shareholders at Prince William Sound.
 
NCB also arranged a $35 million commercial real estate loan for 188 West Northern Lights, an office building in Midtown Anchorage. The loan will be used to refinance existing debt, fund tenant improvements and fulfill leasing commissions. In the transaction, NCB partnered with a California-based credit union and an Alaskan bank for the financing package.
 
NCB "has a long-standing relationship with native communities, like the Tatitlek shareholders, and we're proud to be a consistent source of financing for these communities who share a similar cooperative structure to NCB and credit unions," Brookner said. "It's NCB's mission to promote the growth and strength of member-owned organizations, and providing needed funding to our Alaskan Native customers is another opportunity to support this effort."

Supplemental Insurance Benefits Topic Of Council Paper

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MADISON, Wis. (8/2/13)--A new CUNA HR/TD Council white paper, "Employee Benefits: The Future is Voluntary," focuses on how credit unions are evaluating and incorporating supplemental insurance programs.
 
It includes information about:
  • Options in the marketplace;
  • Presenting the business case for a supplemental insurance program;
  • The concept of "make or buy"; and
  • Metrics.
The employee benefits landscape has been transformed during the past decade, by burgeoning costs, regulatory changes and new benefits options, said the council. During and after the great recession, employers reduced their benefits budgets and shifted costs and decision making to employees. Organizations have also become more creative in offering competitive benefits that help them to recruit and retain the best workers.
 
Given the risks of self-insurance, the paper notes most credit unions choose to purchase from an insurance company. In the case of life insurance, however, the Business-Owned-Life-Insurer (BOLI) structure can be attractive for credit unions, because payments to the fund--as well as capital appreciation--are tax-free. While interest rates on investments remain low, the BOLI offers a better return on investment, the paper said.
 
Choosing the right vendor partner for supplemental insurance requires due diligence, including seeking recommendations from credit union peers and state leagues, and assessing insurance carriers' financial strength, the council said.
 
This is the second white paper in a series about employee benefits, and it is a follow-up to 2012's white paper "Credit Union Benefits Programs: Meet Employees' and Your CU's Financial Needs."
 
To access a copy of the paper, use the link.

NEW: N.Y.'s Gov. Cuomo Signs ATM Disclosure Bill

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ALBANY, N.Y. (8/1/13, UPDATED 3 p.m. ET)--New York Gov. Andrew Cuomo today signed credit union-supported legislation that eliminates the requirement of physical fee disclosures on ATMs and brings state law into conformity with the federal law signed last December by President Barack Obama.
 
The Credit Union Association of New York said it has been advocating aggressively for this legislation, citing burdensome ATM fee disclosure regulations that created legal and financial issues for many credit unions.
 
The Assembly bill was introduced by Assemblywoman Annette Robinson (D-Metropolitan), and Sen. Joseph Griffo (R-Utica-Rome/Central) introduced the Senate bill.
 
"We commend Gov. Cuomo, Assemblywoman Robinson and Sen. Griffo for their outstanding leadership and support on this important issue," said CUANY President/CEO William J. Mellin. He acknowledged "the grassroots efforts of many credit union leaders, which played an important role in this legislative victory."
 
Credit unions and other financial institutions across the nation had experienced nuisance lawsuits from people who would remove the notices from the ATMs, then claim disclosure violations. The Credit Union National Association and state leagues advocated strongly for an amendment to the Electronic Funds Transfer Act, and the Consumer Financial Protection Bureau in March implemented a rule to eliminate redundant ATM disclosures.

Malware Report: 1.8 Million Virus Detections In Q2

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CEDAR RAPIDS, Iowa (8/1/13)--Computer virus infections increased 39% during second quarter from the previous quarter, with 1.8 million virus detections, according to a new quarterly malware (malicious software) report.
 
Of the viruses detected, 25% exploited Java vulnerabilities in their attempt to gain access to computers, said the SecureIT Quarterly Malware Report for second quarter, released Wednesday by SecurityCoverage Inc., a  Cedar Rapids, Iowa-based provider of mobile and desktop security software and data support services.
 
Credit unions aware of cybersecurity issues impacting themselves and their members can caution members about keeping their Java software up to date to help protect their information.
 
Problems such as fraud generated with the use of malware and viruses have prompted the introduction of several laws, including the  Cybersecurity Act of 2013 (S. 1353), which passed out of a committee on  a voice vote Tuesday (News Now July 31).
 
The Credit Union National Association and other trade groups in a letter Tuesday in support of the bill noted that national cybersecurity efforts require active participation of the government, business and every consumer.

The bill would encourage the private and public sectors to collaborate on standards, guidelines and best practices; increase research and development for the design and testing of software; upgrade education so the work force and students will be better prepared to stimulate and support innovation in cybersecurity; and promote a national cybersecurity awareness campaign.
 
Other findings in the SecureIT report included:
  • A 57% hike in Zeus Trojan or Zbot detections. The Zeus Trojan has been used to steal millions of dollars from U.S. financial institutions and consumers.
  • A 34% increase in adware, viruses that bog down a computer with pop-up ads. Adware, though not generally malicious,can cause overloads and crashes on already infected computers, said SecurityCoverage.
  • Roughly 82% of total malware detections were Trojan-based. Leading the pack were the Trojans OpenConnection, Kazy, ZeroAccess, PasswordStealer and Medfos, the report said.
"We anticipate malware authors will continue to evolve their attention to fast-growing mobile platforms in the months to come, but we expect to see an active malware environment in the desktop space as this remains a viable business and personal platform for many users," said Ed Barrett, vice president of marketing and communications at SecureCoverage Inc.

CU Member Loyalty Rises At Banks' Expense

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MADISON, Wis. (8/1/13)--Members' loyalty to credit unions has risen sharply in recent years at banks' expense, according to the Credit Union National Association's 2013-2014 National Member and Nonmember Survey Results.
 
The August edition of Credit Union Magazine provides an in-depth look at the survey findings.
 
Nearly 60% of members now say a credit union is their primary financial institution (PFI), up considerably from 42% in 2009. Meanwhile, banks' numbers declined from 56% in 2009 to 38% this year.
 
"The financial crisis of 2008 and 2009 caused many consumers to question their loyalty to banks, which many consumers blamed for triggering the economic collapse," said Jon Haller, CUNA's director of corporate and market research.
 
Since that time, many consumers have embraced credit unions' not-for-profit, cooperative business model. The financial crisis spurred many members to shift their primary loyalties from banks to credit unions.
 
Loyalty has become the Holy Grail of marketing because highly loyal members use more credit union products and services than other members, and are the cooperatives' most passionate advocates.
 
Credit unions prevail in another key measure of loyalty: active referrals. Overall, 57% of members say they're "extremely likely" to recommend their credit union to others, while only 40% of members who also use banks say they're "extremely likely" to recommend their banks.
 
Also, an overwhelming majority of credit union members (84%) say they "definitely" or "probably" will contact their credit union the next time they need financial products or services.
 
At the same time, credit unions have a considerable opportunity to develop deeper business relationships with their members, as 85% also have accounts with banks while only 15% don't use banks.
 
Members are just as likely to use credit unions as they are banks for checking and online banking, the survey results indicate.
 
On the upside, 59% of members now use credit union checking accounts, up from 51% in 2009.
 
"This represents important wallet share growth opportunities for credit unions," Haller said, "because the checking account is an important product that determines PFI status. As your members' PFI, there's a strong likelihood they'll give you the first shot at meeting their product needs."
 
In addition to increasing checking account penetration, credit unions also made gains with online banking penetration. CUNA's research shows that 50% of members use their credit unions' online banking services, up from 32% in 2009.
 
However, 49% of members also use banks' online banking services.
 
Another article from CUNA's surveys, CUs Must Improve Awareness Among Nonmembers, will be in Monday's News Now.  For more information, attend the Grow Your Membership webinar on Sept. 18 or use the links.

More CUs Share the Message: 'Don't Tax My CU'

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MADISON, Wis. (8/1/13)--

Click to view larger image San Antonio Citizens FCU in San Antonio, Fla., made its position clear--"Don't Tax My Credit Union"--in this advertorial in the Tampa Bay Times. Pictured are staff members with CEO Tim Baldwin, bottom left. "You would think that if there were this huge advantage [from credit unions' tax status]' that some bank somewhere would want to change charters and take advantage of it," he said. (Photo provided by San Antonio Citizens FCU)

Taxation of credit unions is a bad idea because it takes money out of the pockets of millions of credit union members, said San Antonio (Fla.) Citizens FCU in an advertorial, "Local credit union urges 'Don't Tax My Credit Union,'" in the Tampa Bay Times' Pasco County edition (July 26).

That is "96 million members to be exact, and 4.6 million of those are Florida credit union members," said Tim Baldwin, San Antonio Citizens' president, quoted in the advertorial, which urged members and non-members to contact their congressional representatives as part of the Credit Union National Association's and state leagues' national campaign to preserve credit unions' tax-exempt status.

The credit union is one of many sharing the "Don't Tax My Credit Union" message.

For example, the Missouri Credit Union Association reported that many credit unions in the state participated in Don't Tax My CU Tuesday on July 23 by using Twitter and Facebook to share the #DontTaxMyCU message (The Missouri Difference July 25). Between May 22 and July 24, Missouri's U.S. lawmakers received 9,634 contacts in support of credit unions' efforts.

BluCurrent CU, CommunityAmerica CU, St. Louis Community CU, Anheuser-Busch Employees' CU, Vantage CU and Arsenal CU tweeted multiple messages, as did MCUA and Credit Unions of Missouri Twitter accounts, and 11 credit unions in the state used their Facebook pages.  Many included original content specific to DTMCU Tuesday. CSD CU, Kansas City, shared members' stories, explaining how the credit union helps them financially.

Arsenal CU in Arnold, Mo., and Electro Savings CU in St. Louis sent e-mails to thousands of members urging them to write Congress. "The question isn't why did we engage our members in this battle and ask for their support, the question is why not?" Electro President/CEO Stan Moeckli told MCUA.

"Our members are our owners and stakeholders. It is our responsibility to them to engage them in this fight. How would we explain it to them if we lose the fight and they did not know what was on the line? As a member-owner of Electro Savings, I would be upsett with my credit union if I wasn't made aware," he said.

League of Southeastern Credit Unions President/CEO Patrick La Pine told The Anniston Star (July 25) that if the tax exemption is removed, credit unions will face extreme uncertainty. Credit unions are built on a member-owned cooperative model that would have to be revisited if the exemption were removed and the change would force many to merge or convert their charters, he told the publication.

He noted that credit unions' tax exemption is not based on products and services they offer but on their not-for-profit, member-owned, cooperative structure.

Preserving the tax status is part of the "removing barriers" and "raising awareness" goals in the Unite for Good campaign toward the strategic vision in which "Americans choose credit unions as their best financial partner."

Three Ways To Connect With Millennial Homebuyers

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DALLAS (8/1/13)--As they mature, Gen Y members are becoming prime targets for the mortgage market.
 
Here are three ways credit unions can position themselves to serve Gen Y's mortgage needs:
  • Offer education on home-buying opportunities. Provide rent vs. buy calculators to help them see the savings in purchasing a home, advised CU Members Mortgage Senior Vice President Linda Clampitt. First-time homebuyer seminars also help motivate buyers and set proper expectations.
  • Make products available. Most Millennials don't have large sums of cash at their disposal, yet they don't want to delay their housing needs to save a large down payment, Clampitt said. The Federal Housing Authority (FHA) is still a low down payment option for them. If credit unions aren't offering FHA assistance, they need to know Gen Y has a growing need for this program.
  • Provide technology solutions. Gen Y members want their needs met on demand, even with home loans. An online home loan application provides the opportunity to apply at their convenience, she said.

Illinois Young Professionals Advisory Committee Established

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NAPERVILLE, Ill. (8/1/31)--The Illinois Credit Union League Tuesday announced the members of its Young Professionals Advisory Committee.
 
The committee was established to help create a state-wide program that encourages young credit union employees to establish life-long involvement with credit unions. 
 
It will examine activities and initiatives of other state leagues, similar organizations such as chambers of commerce or charitable groups, and past programs of the Illinois Youth Involvement Council. 
 
Serving one-year terms, effective July 1, are:
  • Jana Stevens, CEFCU, Peoria;
  • Wednesday Medlen, Community Plus FCU, Rantoul;
  • Scott Leiser, Cornerstone CU, Freeport;
  • Derrell Walls, CTAFC FCU, Chicago;
  • Diara Bradley, First Financial CU, Chicago;
  • Parease Alexander, Maroon Financial CU, Chicago;
  • Melissa Clopper, Members First Community CU, Quincy;
  • Aaron Heldt, NuMark CU, Joliet; and
  • Jennifer Riebold; Scott CU, Edwardsville.

League Staffer Elected Chairman Of Calif. Jump$tart Coalition

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ONTARIO, Calif. (8/1/13)--Tena Lozano, the California and Nevada Credit Union Leagues' consumer advocacy manager and executive director for the Richard Myles Johnson (RMJ) Foundation, has been elected chairman of the board of the California Jump$tart Coalition--the state chapter of the national not-for-profit organization that promotes financial literacy among the nation's youth.
 
"The coalition's mission very much parallels the Richard Myles Johnson Foundation's goal of improving the personal financial education of young people," said Lozano.
 
The 19-member board implements the mission and vision of the National Jump$tart Coalition for Personal Financial Literacy in the state. It assists the personal finance education community and supports the implementation of personal finance education from Kindergarten through 12th grade. The board consists of professionals from education, finance and accounting, business and government.
 
The California Credit Union league has been associated with the state Jump$tart Coalition since its organization in 2000. Lozano became a member of the coalition in 2007 through her work with the foundation. The RMJ Foundation for California and Nevada for credit unions supports youth financial education and continuing education for credit union leaders.
 

Jury Elected To World Council Exec Committee

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OTTAWA, Canada (8/1/13)--Patrick S. Jury, CEO/president of the Iowa Credit Union League, is the newest member of the World Council of Credit Unions' Executive Committee.
 
Jury, one of four representatives of the Credit Union National Association to the World Council's board of directors, was elected the committee's secretary last month during the World Credit Union Conference in Ottawa, Canada.
 
Others already on the executive committee include:
  • Chair Grzegorz Bierecki of the National Association of Cooperative Savings and Credit Unions in Poland;
  • Vice chair Anne Cochran, president/CEO of the Louisiana Credit Union League and representing CUNA;
  • Second vice chair David Burns, Credit Union Central of Canada; and
  • Treasurer Louise Petschler, Customer Owned Banking Association, Australia.
Jury has served as CEO/president of the league since 2006 and has worked there for more than 20 years.  He is also CEO and board chairman of Affiliates Management Co. providing oversight of The Members Group, TMG Financial Services, PolicyWorks and Coopera.

Newly elected to World Council's board of directors were Steven Stapp, president/CEO of San Francisco FCU, representing CUNA, and Oswaldo Olivia of the National Association of Credit Unions of Guatemala.

CU System Briefs (08/01/2013)

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  • VACAVILLE, Calif. (8/1/31)--A federal judge Friday ordered a trial for a Fairfield, Calif., man charged with felony vandalism for allegedly damaging an ATM and breaking a window with concrete chunks at Travis CU on Feb. 13 (TheReporter.com July 31). A security officer for Travis CU, Vacaville, Calif., testified that after receiving a report of vandalism at the branch he found chunks of concrete near a damaged ATM and a broken window with more concrete chunks nearby. The ATM machine's video surveillance system showed a man wearing what looked like a white robe and a jersey with the number 1 on it strike the ATM machine before moving toward the credit union's glass window. Police later located David G. Loflin about two blocks away, wearing the same jersey ...
  • ST. LOUIS (8/1/13)--An Arnold, Mo. man was charged Saturday with one count of robbery in the second degree and one count of possession of a controlled substance in connection with the June 24 robbery of First Missouri CU, St. Louis. Edward W. Starns, 30, was arrested Friday after a tip led police to an area hotel (ArnoldPatch.com July 29). He is being held in the St. Louis County Justice Center in lieu of a $100,000, cash bond. St. Louis County police released photos from video surveillance of a man believed to have fled the credit union in a small to mid-size yellow Chevrolet. No weapons were displayed in the robbery. Police confiscated a substance they believed to be heroin during the arrest ...

15 Detroit CUs' Rewards Program Boosts Commerce

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WYANDOTTE, Mich. (8/1/13)--Fifteen Detroit credit unions Tuesday rolled out Shop Main Street, a merchant-funded rewards program, with the hope of sparking a lagging local economy.
 
 About 250,000 credit union members who have a credit or debit card tied to a loyalty program offered by one of the credit unions earn bonus rewards when they shop at local merchants participating in the program. The rewards are in addition to the rewards members already earn from their loyalty program when using their card for purchases.
 
"This year marks our 75th anniversary, and we're a community credit union now," said Jan VanWassehnova, executive vice president of NuPath Community CU, Wyandotte, Mich. "We can mark that anniversary by supporting our merchants downtown and rewarding our members for shopping locally."
 
The program offers participating merchants a suite of online marketing tools. Shop Main Street lets participating merchants choose from more than 20 different offers to address their business objectives.
 
The program also features content, including merchant news, and links to Facebook and Twitter, which bring "word-of-mouth" marketing to a wider audience.  Shop Main Street gives merchants information about their customers and their purchasing behavior.  Since Shop Main Street is integrated into local credit unions' loyalty programs, merchants benefit from increased consumer awareness and interest.
 
With her credit union entering into the business services market this month, VanWassehnova, said the Shop Main Street program came at the right time for her credit union. "We view it as a partnership with our local merchants," VanWassehnova said. "We promote for our local businesses and we drive our members to shop at their locations. And the merchants provide whatever offers they want."
 
Shop Main Street was developed by RewardsNOW and Zavee LLC. Both companies are developers of member loyalty programs.
 
Rewards programs are one way credit unions help local businesses. Credit unions also offer member business loans. The Credit Union National Association and credit unions nationwide are urging Congress to pass bi-partisan legislation to increase their member business cap to 27.5% of a well capitalized credit union's assets--up from the current 12.25% cap. CUNA estimates that lifting the MBL cap would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.