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Everest climber sports author to be at league confab

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CORALVILLE,  Iowa (9/14/12)--The annual Iowa Credit Union Convention, themed "Unlock the Potential," will take place in Coralville Sept. 19-21, with more than 350 credit union CEOs, directors, other executive staff, guests and vendors focusing on advancing credit union growth and vitality.

Charlie Wittmack, an explorer, attorney and the only person in history to complete the World Triathlon, will be the opening keynote speaker. Wittmack will share his story of extraordinary resolve, determination and success in the face of unprecedented challenges, said the Iowa Credit Union League.

Internationally recognized motivational business speaker Ross Bernstein will be the closing speaker on Friday. Bernstein is the best-selling author of 50 sports books and has appeared on thousands of TV and radio programs throughout his career. He will use sport stories as a metaphor for life and for business to energize convention attendees by challenging them to not just be ordinary, but to make a difference and be extraordinary.

Fourteen education sessions are also planned. Among the topics: How to prepare for a crisis, marketing and business development, what effects the economy has on credit unions, and compliance updates geared toward directors, among others.

In addition to a reception Wednesday night, Iowa Credit Union Foundation's (ICUF) annual Benefit Night will be Thursday night and will feature a dessert reception and live music featuring the University of Iowa's steel drum band. All proceeds will be used to fulfill ICUF's mission of helping Iowans build wealth, responsibility and independence.

New checking account to help people in economy

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RIVERSIDE, Calif. (9/14/12)--A checking account designed to help people get back on their feet financially in an area where unemployment is at 12.8% and the recovery is slow has been launched by Riverside, Calif.-based Altura CU.

The new Reliance Checking Account, designed to help individuals caught in the wake of the slow recovery, comes with a regular Visa Debit Card, online banking, mobile banking and eStatements.

Unemployment in the area, known as the Inland Empire is well above the 8% national rate and nearly two points higher than California's 10.7% rate. Local foreclosure rates were among the highest in the nation and continue to be the fifth highest in the state. Altura itself struggled for a couple of years as a result. Now that Altura is on a stronger foundation, it is reaching out to help and do what credit unions do best, said the $708 million asset credit union.

"We are offering a new beginning to people by providing a tool for recovery," said Jennifer Binkley, Altura chief operating officer. Many local residents have been left with credit problems and a negative credit history.

"Traditional banks turn them away, not just for loans, but also when applying to open a checking or savings account. Can you imagine having no access to ATMs, no resources for paying bills, no relationship with a financial institution?" Binkley said.

Altura's Reliance Checking is specifically designed to assist individuals who have financial difficulties, unpaid closures and negative history reported to ChexSystems. A negative report usually results in a denial to open a new account.

"This is an area where we want to assist," Binkley added. "Credit unions were created to do exactly this kind of thing. Our Reliance Checking is a temporary solution that can evolve into a regular Altura account. This checking account will have an immediate impact on people's lives. It will make managing the financial portion of their lives a lot easier and provide a path to a traditional account."

With the account, members can recover and rebuild their financial status, and become eligible for other checking accounts and financial services that Altura offers. It comes with a Visa Debit Card that looks exactly like every other card Altura issues--with no red flags to embarrass cardholders. It also provides access to an educational program and support. The account has a $10 monthly service fee.

After six months of positive account activity, and after having paid off an outstanding checking account-related, Reliance Checking account holders can move to the next level--the Renew Checking Account. The account has no minimum balance requirements, allows members to write personal checks, and adds ATM deposit access. After six months of positive Renew account activity, members become eligible for any Altura checking account.

"This isn't something we had to do, but something we believe is the right thing to do. To put it simply, it's needed and it will help," said Binkley.

CUs help underbanked servicemembers avoid payday lenders

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WASHINGTON (9/14/12)--The news that the unbanked and underbanked households have increased slightly since 2009 comes as no surprise to the nation's defense credit unions.  The people they serve--service members and their families--are often prey to predatory lenders. As a result, these credit unions have a myriad of programs to serve them.

The Defense Credit Union Council (DCUC) and its members have offered page-after-page of commentary to the Consumer Financial Protection Bureau (CFPB) outlining the extraordinary service and support they provide their members who are often preyed upon by check cashers and predatory lenders.

"Military credit unions have done and continue to do an absolutely superb and most effective job supporting the daily financial needs of our troops and their families," said DCUC President/CEO Roland "Arty" Arteaga, in a letter last year to the CFPB. "Not only do they provide traditional financial products and services to their military members, but they also offer special products and services tailored for today's military and the environment in which they live and work."

In addition to the traditional products and services, many offer exclusive products, such as higher interest savings, loan discounts, early paydays, guaranteed paydays, payday loan alternatives, special lines of credit, no-cost financial education and training, the Military Saves program, transition assistance, streamlined military websites, electronic banking, overseas bill pay, overseas currency sales, overseas and stateside shared branching, grants for down payments to first-time home buyers of modest means, mortgage loan modifications, guarantee utility deposits, or support of the Servicemembers Civil Relief Act.

A number of on-base credit unions "go the extra proverbial mile in the face of a government shutdown and without hesitation 'stand to' to advance the military payday" and provide no interest loans to troops, Arteaga's letter said.

One clear example of  "Serving Those Who Serve Our Country"--DCUC credit unions' motto--is Service CU, based in Portsmouth, N.H.  On Sept. 4 it rolled out its "Guaranteed Pay" product. It provides a fee-free, courtesy pay-like funds availability of $1,000 that may be drawn by service members if their total Defense Finance Accounting Service net pay is not received into their account. This is beyond what Service CU committed to last year when the federal government was facing a shutdown. The $1,000 fee-free amount can be followed by another $1,000 line of courtesy pay on which fees are assessed. The loans must be repaid within 33 days of receipt.  If not, the servicemembers are discontinued from the program and they will go into a Repayment Plan.

To counter payday lenders' efforts, the $2.45 billion asset Service CU offers a Warrior Savings Account, with a 10% annual percentage yield (APY) for servicemembers deployed in active combat zones. The rate applies up to 120 days after the soldier's return from a combat zone.

Servicemembers who earn less than $2,507 per month are eligible for Service CU's "STAR" program, which gives an additional rate increase on the base savings rate, an additional loan discount  (for example, a vehicle and unsecured loan gets 1% off) and special certificate rates.  It also offers a special military relocation loan for those moving outside the U.S.

The $2.8 billion asset Tinker FCU, based in Oklahoma City near Tinker Air Force Base, also provides services customized to its servicemembers.  Its Starting Line Certificate provides higher dividend rates and requires a minimum deposit of $25.  Its Advantage Checking allows servicemembers to carry lower balances and offers dividends free services and benefits, and Reconnect Checking offers servicemembers a second chance to rebuild their financial stability, with no minimum balance requirements.

Tinker FCU also offers a short-term loan alternative to payday loans called Personal Access Loan (PAL). Once PAL is repaid, borrowers are eligible for a Credit Builder Loan Program in which servicemembers receive  interest rate savings for going through a financial education program which has one-on-one counseling with its partner, BALANCE.

The  $880 million  asset Scott CU in Collinsville, Ill., provides a payday loan alternative to servicemembers at Scott AFB . Its Easy Cash program allows members to borrow $300 to $1,000 until their next payday. The loan has no interest for 30 days, no fees, and no credit check, and it provides free credit counseling designed to help them escape problems the servicemembers may already be facing because of high-rate payday loans.

Scott CU also participates in the Operation Project and Provide program, a short-term, low interest-rate loan of up to $10,000  to help ease the financial sacrifice of reservists who are called to active duty.

Several defense credit unions have partnered up to offer a predatory-lending alternative loan program, Asset Recovery Kit (ARK). Formed by the PenFed Foundation at Alexandria, Va.-based Pentagon FCU, the program has expanded to other credit unions. These include Fort Bragg FCU, Fayetteville, N.C.; GeoVista FCU, Hinesville, Ga.; Fort Gordon and Community  (Ga.) FCU; SAC FCU, Bellevue, Neb.; Schofield (Hawaii) FCU; AmeriCU CU, Rome, N.Y.; Ent FCU, Colorado Springs, Colo.; SD Medical FCU, San Diego; Miramar FCU, San Diego; Pearl Harbor FCU, Waipahu, Hawaii; Redstone FCU, Huntsville, Ala.; Tyndall FCU, Panama City, Fla.; Belvoir FCU, Woodbridge, Va.; and Kirtland FCU, Albuquerque, N.M..

The ARK program has helped nearly 4,000 military families with more than $2.2 million in emergency loans and financial counseling. It offers short-term, interest-free advances to active duty, reserve and national guard military personnel with emergency cash needs. Borrowers pay a fee of  $1 per $100 borrowed for immediate cash advances up to $500 (or 80% of net pay). The foundation guarantees and reimburses all losses to participating credit unions. A service member can receive five advances in a single year, but is required to complete financial counseling before each subsequent cash advance. The program is offered free to all credit unions serving the armed forces and is branded with the name and logo of the partner credit union.

These are just a few credit unions' programs, but a quick review of nine other defense-related credit unions indicates that these programs are typical of the services they provide a significant portion of servicemembers and their families.

Texas Trust debit rewards send 110K to high schools

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MANSFIELD, Texas (9/14/12)--Purchases made with Texas Trust CU's Spirit Debit Reward card have resulted in nearly $110,000 paid to high schools in four North Texas School Districts.

Consumers made more than $725,000 debit card purchases with the Spirit Debit Reward card between August 2011 and July 2012. Each time a card was used, Texas Trust paid participating schools 15 cents (Business Wire Sept. 12).

The Spirit Debit Reward program exceeded its reward goal by $35,000, or nearly 50%, because participation was so robust, said the $754 million asset Mansfield, Texas-based credit union.

Participating schools received a monthly reward check for the preceding month's purchases, so the schools would have the rewards cash available throughout the year instead of waiting for a single annual payout.

The program comprises more than 4,188 Spirit Debit Reward cardholders, consisting of students, parents, teachers and faculty of participating schools.

Texas Trust has extended the program for another school year.

Paper outlines three lessons from card rewards

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DES MOINES, Iowa (9/14/12)--A new white paper issued by the Members Group (TMG) details three truths of credit and debit card rewards programs.

"Creating Engagement and Loyalty: How to Reward Yourself and Your Cardholders" is written to provide both the card processor and the issuer perspectives. Matt Flynn, director of client relations for card processor TMG, and Jeff Russell, president/CEO of credit card agent-issuer TMG Financial Services (TMGFS), share insights on why rewards programs matter in today's competitive card environment.

TMG and TMGFS work with community financial institutions to enhance portfolio performance with rewards programs. Collectively, the companies have learned three lessons:

  1. Rewards elevate the competitive nature of a card offering, leveling the playing field between community financial institutions and the major card issuers with which they compete.
  1. Rewards, when tailored for a cardholder base, drive customer engagement and loyalty.
  1. Card rewards can provide a healthy return on investment.
The paper also offers suggestions for lowering the costs of a rewards program. The tactics include comprehensive vendor due diligence, flexible points schedules, less costly marketing programs and a merchant-funded option.

A strategy for programs targeted to different consumer segments inside the same portfolio is detailed in the paper. The authors also describe how different cardholders place different values on reward offerings.

The goal is to successfully segment cardholders, offering each group the most pertinent and compelling rewards possible. The paper identifies four cardholder segments:

  • Transactor: The cardholder makes purchases but pays off the balance most months.
  • Revolver: The cardholder carries a balance from month to month while continuing to make purchases.
  • Pay-Down: The cardholder is actively paying down a balance by making regular, over-minimum payments each month, but typically is not making purchases.
  • Inactive: The account has been dormant--no payments, no finance charges, no transactions, no balance--for six months.
"A successful cost-control strategy for issuers is portfolio segmentation," the authors wrote. "By only offering rewards to those cardholders who truly value perks (and whose transaction behavior reflects that value system), issuers can save significant per-account costs."

To download the free paper, use the link.

Richmond Fed seminar CUs an option to payday lenders

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RICHMOND, Va. (9/14/12)--Credit unions are a viable alternative to payday lenders, Nancy Pierce, field coach for the National Credit Union Foundation, told a seminar audience hosted by the Federal Reserve Bank of Richmond.

The challenge credit unions face is that they serve defined fields of membership and must match the pervasiveness of payday lenders on nearly every street corner (Richmond Times Dispatch Sept. 14).

Offering financial services to the the poor is a big business in America, with at least seven publicly traded companies in the check-cashing business, said Gary Rivlin, author of the book, "Broke USA."

Many low-income consumers do not participate in or have access to traditional financial services.

More than one in four U.S. households--28.3%--are either unbanked or underbanked, a slight increase from 2009, according to 2011 statistics released Wednesday by the Federal Deposit Insurance Corp. (News Now Sept 12).

Pierce suggested nonprofit groups, social service agencies and faith-based organizations attending the seminar could partner with credit unions to assist low-income families the groups serve.

To read the full article, use the link.

Get ready Smartphone shipments to double

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MADISON, Wis. (9/14/12)--Smartphone shipments are forecast to reach 567 million in 2012, and nearly double by 2016 as new phones such as this week's freshly unveiled iPhone 5 continue to enter the market, according to a new study by NPD DisplaySearch released Wednesday. That means credit unions can expect to gear up for more mobile banking.

"Apple's iPhone 5 will be a key product for the smartphone market in the second half of 2012. Apple shipped more than 140 million phones in 2010 and 2011, so we can expect smartphone shipments to continue flourishing as users upgrade to the new iPhone," said Hirsoshi Hayase, vice president, small/medium displays for NPD DisplaySearch.

Despite the excitement surrounding the new iPhone, the volume of new smartphone shipments is lower than expected. NPD DisplaySearch downgraded its 2012 forecast of new purchases from the 220-million-to-230-million ballpark to 177 million. The volume of replacement phones, however, is expected to increase as new smartphones enter the market.

"The timing of mobile phone contracts can also impact the smartphone market," said Hayase. "More service providers are likely to shorten mobile phone replacement cycles in an effort to boost sales."

Many credit unions added mobile-banking capabilities to their service this year, in hopes of attracting younger members.

CUNA Mutual Group said that since it launched its smartphone loan application last year, it has garnered 40 new credit unions as Loanliner platform customers (News Now Sept. 13).

With the app, CUNA Mutual has processed roughly 35,000 loan applications and generating more than $335 million in loan application volume, said InformationWeek (Sept. 11).

The smartphone app could be a key element for credit unions trying to attract younger members because the average age of a credit union member is 47 years old, while the average smartphone loan application user is 32, the publication said.

The app supports Apple and Android devices.

More than 550 credit unions have implemented the smartphone loan app, and CUNA Mutual has partnered with Fiserv, a global provider of financial services technology, to make the app available to an additional 350 credit unions, InformationWeek said.

Jekel honored with NASCUS Pierre Jay Award

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DENVER (9/14/12)--Linda Jekel, credit union regulator from Washington, past chairman of the National Association of State Credit Union Supervisors (NASCUS), and longtime NASCUS board director, was honored with the 2012 NASCUS Pierre Jay Award.

Jekel was recognized Wednesday during the NASCUS State System Summit in Denver.

Recipients of the Pierre Jay Award demonstrate outstanding service, leadership and commitment to NASCUS and the dual-chartering system. The Pierre Jay Award, first awarded in 1997, is named after the first commissioner of banks in Massachusetts.

"When we created the Pierre Jay Award, it was meant for advocates like Linda who make countless contributions to NASCUS and to the state credit union regulatory system," said NASCUS President/CEO Mary Martha Fortney. "Throughout her career, Linda has been passionate about states' rights and the important work of advocating for a strong state credit union charter in her home state of Washington and nationwide. "

Last year, NASCUS awarded the Pierre Jay to past NASCUS Chairman Roger Little, retired credit union regulator from Michigan.

NASCUS announces board exec council members

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DENVER (9/14/12)--The National Association of State Credit Union Supervisors (NASCUS) announced the appointment of its 2012 board and credit union executive council at its annual meeting this week in Denver.

Two current NASCUS Board members officially began new three-year terms. Mary Hughes, financial institutions bureau chief of the Idaho Department of Finance, and Werner Paul, deputy commissioner of the Bureau of Financial Institutions, Virginia, are continuing their service on the NASCUS board.

John D.  "J. D." Fields, deputy chief examiner of the Louisiana Office of Financial Institutions was appointed to a one-year term on the NASCUS board by Chairman Orla Beth Peck, credit union supervisor.

The remaining sitting NASCUS Board members include:

  • Tom Candon, deputy commissioner, Vermont Department of Financial Regulation;
  • John Kolhoff, deputy commissioner for credit unions, Michigan Office of Financial and Insurance Regulation;
  • Linda Jekel, director of credit unions, Washington Department of Financial Institutions;
  • Linda Charity, interim commissioner, director of financial institutions, Florida Office of Financial Regulation; and
  • Michael Wettrich, deputy superintendent for credit unions, Ohio Division of Financial Institutions.
Officers elected by the NASCUS Board include Hughes as chairman-elect and Kolhoff as secretary/treasurer. Peck will continue to serve as chairman.

Also, three incumbent state credit union CEOs began new terms on NASCUS' Credit Union Executive Council and one state credit union CEO was newly elected.

The executive council, a group of 12 credit union executives from around the country, governs the NASCUS Credit Union Advisory Council.

CEOs elected to the executive council include:

  • Ron McDaniel, California CU, Glendale, Calif., will represent District 4 for a three-year term.
  • Patty Idol, Mountain CU, Waynesville, N.C., will continue to represent District 2 for a three-year term, expiring September 2015. 
  • Cathie Tierney, Community First CU, Appleton, Wis., will continue to serve as a District 3 director for another three-year term.
  • Dan Kester, Sooper CU, Arvada, Colo., will also continue to represent District 4.
Tierney, chairman of the advisory council, re-appointed Bob Fouch, CEO of Corporate Central CU, Muskego, Wis., to serve a three-year term representing the corporate system.

Other members of the executive council include:

  • J. Parker Cann, BECU, Tukwila, Wash.;
  • Debbie Peters, Community Regional CU, Old Forge, Pa.;
  • Jack Sheets; Interra CU, Goshen, Ind.;
  • Linda Childs, Knoxville (Tenn.) Post Office CU;
  • Jason Boesch, Oklahoma RE&T CU, Oklahoma City, Okla.;
  • Mike Kurish, Associated School Employees CU, Youngstown, Ohio; and
  • Terry West, Vystar CU, Jacksonville, Fla.

The executive council also elected its officers. Tierney continues to serve as chairman, Childs is the chairman-elect and Kester is the secretary.