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CU System briefs (09/17/2009)

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* HOUSTON (9/18/09)--A Houston man was sentenced to 16 1/2 years in prison for firing a shotgun in Investex CU's Spring, Texas, branch on Nov. 5, 2008 during a heist that involved help from an intern at the credit union. Dominique Sherrard Ervin, 20, was the second person to be sentenced for the crime. Earlier, Carl Edward Preston, 20, was sentenced to 12 years and 9 months in prison. Both men pleaded guilty to the crime. In the heist, the two men phoned the intern, Dorcell Johnson, 19, who was inside the credit union and allegedly gave the go-ahead for the robbery to proceed. Ervin and Preston entered the credit union armed with shotguns. Preston pointed his gun at an armed security guard and Ervin point his at Johnson, pretending to take Johnson hostage. In the vault, they forced the guard and a female employee to lie down, and Ervin fired a shot from his shotgun over their heads, striking the vault's security cameras. The robbers fled with more than $202,000. Preston and Ervin also were ordered to make restitution and must serve three years of supervision after their release from prison. Johnson, who also pleaded guilty, is scheduled to be sentenced Sept. 25 (States News Service Sept. 16) … * HARRISBURG, Pa. (9/18/09)--Erie (Pa.) General Electric FCU says it will help members laid off from GE Transportation, a builder of electric locomotives. The company announced that the 1,200 workers on temporary layoff are now permanently without jobs (Life is a Highway Sept. 17). It also announced another 480 job cuts, effective in two weeks. The credit union posted a message on its website reminding members that the credit union is available to help them through challenges and offered free services and financial counseling … * WHITEFISH, Mont. (9/18/09)--Whitefish (Mont.) CU, Montana's largest credit union, has named James A. Kenyon III as its new CEO, announced Board Chairman Leo Tracy. Kenyon succeeds Charlie R. Abell. Kenyon previously was with Missoula (Mont.) FCU for 16 years. He served as senior vice president, operations and lending for 14 of those years. His tenure began Monday. Whitefish CU has more than $1.134 billion in assets and 57,000 members …

Kansas CUs see strong 2Q

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WICHITA, Kan. (9/18/09)--Kansas credit unions experienced growth in assets, loans and deposits in the quarter ending June 30, according to the Kansas Department of Credit Unions’ Second Quarter 2009 Call Report. Loans increased to $2.45 billion from $2.2 billion the year before. Total assets rose to $3.7 billion--a more than 12% increase, the department noted in the Wichita Eagle (Sept. 17). Total deposits climbed to $3.05 billion from $2.77 billion. Kansas credit unions experienced a 33% increase in loan delinquencies, largely because of assessments they pay to revive the National Credit Union Share Insurance Fund. Delinquencies rose to $31.9 million from $24 million, the newspaper said. Richard Yadon, Kansas Department of Credit Unions’ financial examiner administrator, said the gain in assets and deposits is because people are moving money out of the stock market and other investments into credit unions.

CUNA Mutual sells ownership in Canadian affiliate

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MADISON, Wis. (9/18/09)--CUNA Mutual Group announced today it is selling the majority ownership of its independently managed affiliate, The CUMIS Group Ltd., to a longtime business partner of the Canadian company and a Canadian credit union central. CUMIS’ board decided to enter into an agreement with Co-operators Life Insurance Co., and Central 1 credit union, which will assume full ownership of CUMIS by the end of the year. Central 1 is a Canadian corporate credit union based in Vancouver, B.C. “We have been approached on numerous occasions by companies interested in obtaining an ownership interest in CUMIS,” said Jeff Post, president/CEO of CUNA Mutual. “The time is right for both organizations to make this move. While improving our financial strength, this decision also simplifies CUNA Mutual’s business, enhancing our ability to become more competitive in our core insurance products and provides us flexibility to prudently pursue new avenues for growth.” CUMIS became an affiliate of CUNA Mutual in 1977. It provides insurance and financial solutions to the Canadian credit union system. Its principal companies are CUMIS Life Insurance Co. and CUMIS General Insurance Co. As of Dec. 31, CUMIS’ assets were almost $1 billion. The organization is based in Burlington, Ont. Co-operators is a Canadian-based cooperative that focuses on insurance and investment products for consumers. It is owned by a group of Canadian co-operatives and credit union centrals. CUNA Mutual Group provides financial services to cooperatives, credit unions, their members and customers worldwide.

White named chairman of CU Association of Rhode Island

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MARLBORUGH, Mass. (9/18/09)--Stephen J. White, president/CEO of Westerly (R.I.) Community CU (WCCU), has been chosen to serve as chairman of the Credit Union Association of Rhode Island's board of directors. A member of the board since 2002, White has served as board vice chairman as well as chairman of several association committees. He serves on the Audit Committee of North East Member Business Services. White has 30 years' experience in the credit union industry, serving the past nine years in his current position at the $210 million asset WCCU. Prior to joining WCCU, he was chief operating officer of The People's CU in Middletown, R.I.

Ohio CUs 2Q growth defies state trends

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DUBLIN, Ohio (9/18/09)--The second quarter of 2009 was strong for Ohio's credit unions, according to the Ohio Credit Union League. Mortgage originations at Ohio credit unions experienced "phenomenal growth" the past 12 months, increasing 50.2% despite the weak housing marketing, said the league, citing its latest Ohio Credit Union Quarterly Performance Summary. Outstanding auto loans rose by 12% annually in June, which brought Ohio credit unions' market share to 18.4%. That is up from 10% a year earlier, said the league (eLumination Newsletter Sept. 16). Membership growth in the state during the first quarter continued through June, reaching 2.66 million members. Total delinquencies rose to 1.37% in June, up from 1.09% the previous year and below the national average of 1.59%. Capital levels remained high at 11.3% of assets, said the league.

Banks double biz account fees CUs stay the same

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CHICAGO (9/18/09)--Business checking account fees rose this year, according to a new survey. Minimum balances required on the accounts more than doubled at large banks, while credit unions and community banks maintained the same levels as the year before. The national median for business checking overdrafts was up $3--to $28 from last year, but the same for nonsufficient funds or returned checks and most other fees, according to Moebs Services, an economic research firm based in Lake Bluff, Ill. (Professional Services Close-Up Sept. 15). Wall Street banks with more than $500 billion in assets charged $35 per overdraft. Of the more than 2,000 banks and credit unions surveyed by the firm, 94.3% of banks and 27.8% of credit unions offer business checking. Roughly 40.9% of financial institutions surveyed offer a "free" business account. This is up from last year for all institutions, as large banks try to protect loss of business, especially small business, and community banks and credit unions try to get market share, Michael Moebs, CEO of the firm, told the publication. For a business owner to avoid a checking account fee, large banks required a $2,250 minimum balance--nearly double the $1,250 required in 2008. Community banks and credit unions that require minimum balances kept the requirement level this year, with the banks requiring $1,000 minimum and credit unions $500. "Main Street institutions definitely offer a better pricing deal than the big Wall Street banks," Moebs said. "In these hard economic times, businesses should seek the better deal." Wall Street banks also increased their use of account analysis (a cash management review). This year, 92% of them offered accounting analysis while 66.3% of community banks and credit unions offer them. Of the more than 27 million businesses in the nation, 10,000 are listed on Wall Street and the exchanges. Small business produces 65% of all U.S. jobs. Financial institutions charged businesses about $9 billion in service charges on deposits in 2008, said Moebs.

TECH CU approved to serve as public funds depository

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CROWN POINT, Ind. (9/18/09)--TECH CU in Crown Point, Ind., has been approved to receive public funds for deposit. Indiana’s State Board of Finance this week approved the $266.5 million-asset credit union’s application to serve as a depository of public funds, which means the credit union can accept deposits from state or local governments in Indiana. Deposits will earn interest (nwitimes.com Sept. 17). The Public Deposit Insurance Fund protects all government funds in state depositories.

StretchPay underwriting ops changes in effect

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COLUMBUS, Ohio (9/18/09)--Changes have been made to StretchPay--a credit union salary advance alternative--to make it compliant with the federal Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009. As of Tuesday, StretchPay no longer is a 30-day, short-term loan product. It now is a short-term revolving loan with repayment due dates, ranging from 28 to 60 days, said the Ohio Credit Union league League (eLumination Newsletter Sept. 17). The changes were made to ensure that credit unions offering StetchPay are compliant with Regulation Z--Truth-in-Lending--which the Card Act amended in August. StretchPay was affected because it is an open-end loan product. “The operational change will grant participating credit unions an opportunity to continue offering their members a valuable service,” said Laura Busque, league outreach manager. StretchPay provides annual lines of credit to credit union members during budgeting emergencies. Participating members pay a $35 annual fee to access a $250 line of credit for 12 months at an 18% annual percentage rate or the state usury rate. “StretchPay would not nearly be the success it is today without the involvement of the National Credit Union Foundation's REAL Solutions program," said Doug Fecher, CEO of Wright-Patt CU in Fairborn, Ohio. "REAL Solutions gave StretchPay a voice in the national credit union community it could not have attained on its own.”

Pa. foundation board introduces two new grants

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HARRISBURG, Pa. (9/18/09)--The Pennsylvania Credit Union Foundation board introduced two new grants into its portfolio during its
The Pennsylvania Credit Union Foundation board introduced two new grants at a meeting Sept. 10. From left, front row, are: Jim McCormack, Pennsylvania Credit Union Association president/CEO and ex officio; Ed Williams; Dave Ackerman, foundation vice chair; Diana Roberts, foundation chair; Jeff DeBree, treasurer; Denise Kaczmarek, secretary; and Joe Wambach, executive director. From left, back row, are: Norb Kaczmarek, ex oficio; Hugh Bray; Barb Bowker; Louise Lingenfelser; Bob Behlke, ex officio; Chris Woods; Maria Lavelle; George Nahodil; Paula Nihoff; Jay Murray, ex officio; and Margie Coan. (Photo provided by the Pennsylvania Credit Union Association)
meeting Sept. 10 during the Fall Leadership Conference, said the Pennsylvania Credit Union Association. The Home Banking/Bill Pay grant project is expected to expand access to specialized services for small credit unions and enhance marketing opportunities. The Public After School Education project grant will provide financial literacy to students at libraries in Pennsylvania (Life is a Highway Sept. 17). Diana Roberts, foundation chair, said credit union volunteers will provide financial tutoring to students in the library program. Ed Williams, Grants Committee chairman, said the Home Banking grants will help pay for introducing Internet banking networks to small credit unions.

Illinois chapter leaders discuss environment

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NAPERVILLE, Ill. (9/18/09)--Nearly 70 chapter leaders representing 17 of the Illinois Credit Union League's (ICUL) 25 chapters attended the annual Chapter Leaders Conference hosted by the league and the Illinois Quad Cities Chapter. This year's theme was "CUs … Naturally Better" and topics centered on promoting chapter activities and events related to environmental issues. Speaking at the event was Chat Pregracke, founder of Living Lakes & Waters, an organization to clean up the Mississippi River. Pregracke and his mother KeeKee told about how Pregracke founded the organization in 1998, starting with a small loan from a credit union in Quad Cities. Today the $1.3 million relief organization travels the country with several employees and a fleet of barges and workboats. Thousands of volunteers have cooperated to help with community cleanups, Riverbottom Forest Restoration, and Adopt-a-Mississippi River Mile programs. He was presented a $500 donation by the chapter Chairman Ray Rogers on behalf of the chapter and the league. The group also heard from local business community leaders about "How Credit Unions Can Help Their Communities Go Green." The panel consisted of the former mayor and current staff of Rock Island, Ill.; the manager of a local grocery chain; and editor of a local consumer environmental publication. They discussed their green initiatives and told how credit unions can become involved in discussing the projects with their communities. A silent auction during the conference raised $1,500 for the Credit Union Political Action Council, the Illinois Credit Union Foundation and an iBelong campaign in Illinois.