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CUs make it through first week since hurricane hit

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FARMERS BRANCH, Texas (9/22/08)--Credit unions made it through their first week of the aftermath from Hurricane Ike's devastating hit to the region on Sept. 13. While many were finally getting enough power to operate, many are not fully operationsl. Meanwhile, others were rallying support. Roughly 12 of the 177 credit unions affected by Hurricane Ike last weekend were not operational, the National Credit Union Administration said last week. In the first week since the National Credit Union Foundation (NCUF) activated a national disaster relief fundraising campaign for credit union survivors, 61 donations totaling nearly $31,000 have been made through CUAid.coop, reported NCUF Friday. SchoolsFirst FCU, an $8 billion asset credit union in Santa Ana, Calif., leads these online donors with a $10,000 contribution. So far, 17 organizations have donated a total of over $27,000 through CUAid.coop. Their average donation is nearly $1,600. "What’s also encouraging in the first week of this effort is the number of individual donations," said Steve Bosack, NCUF deputy director. "Already 44 individuals, mainly credit union system employees, have donated a total of over $3,500 through CUAid.coop. Their average donation is over $80, which is very generous for individual disaster relief donors. "This early outpouring of support is a tribute to the credit union movement’s cooperative spirit," Bosack said. He noted the Texas and Louisiana Credit Union Leagues have done an outstanding job publicizing CUAid to their member credit unions. Once credit unions are able to inform their members about the opportunity to help through CUAid, the full potential of this online disaster relief fundraising platform will be realized, Bosack said. The Texas Credit Union Foundation reported Thursday that it had received about $65,000 in its Disaster Relief Fund, where credit unions inside the state are directing their donations. Texas Credit Union League President/CEO Dick Ensweiler, who will visit the stricken area Wednesday through Friday, was still making appeals to that state's credit unions for assistance. The league has a matchup database in which the hurricane-stricken credit unions with needs can post what they need and are matched up with credit unions offering assistance. Many of the affected credit unions in the area posted messages on their websites, updating members of the status of their branches, urging them to use shared branching, and offering services--such as special loans and deferred payments--to ease members' hardship. And those credit unions still experiencing problems with power and service consistently apologized for the inconvenience and asked for members' patience. Austin-based University FCU said its Galveston branch remains closed. "Deposit and withdrawal services are available at Shared Branches where power has been restored, including AMOCO FCU's Santa Fe and Bay Colony branches," it told members. Accounts were accessible via Internet Banking, phone banking and ATMs. It also offered members special loans and deferred payment up to 90 days on any loans, and provided information to help members with insurance claims. Amoco FCU's Texas City and Bay Colony branches were operating on a limited basis. As of Thursday, the Santa Fe and Bay Colony Branch locations were open with full services except for drive-thru service. The Texas City Branch has no electricition so service is limited. It too noted that online banking and bill pay, ATM, debit cards and credit cards are available. "We are working diligently to fully restore all phone lines and services," it told members. Area West FCU, which has been operating from an alternative site, expected to be back at its location Tuesday. Beacon FCU, whose La Porte and Baytown offices are open, said its Seabrook location still lacked electricity and was closed. Lack of power also affected its ATMs. "We are working to have them restored as soon as possible," it said, directing members to ATMs that were functional at its open branches. "The Beacon FCU family would like to thank all of our members for being patient. We will work through these trying times together, and we hope you and your members are safe." Beaumont Community FCU, which was still closed, according to its website Friday night, was granting 30-day loan extensions for members and noted it was processing transactions daily. It told members it could "send Western Union funds from your accounts at no charge." Due to the power outage in the area, the Brazosport Teachers FCU is still operating at the Travis County CU in Austin. Two branches of Chartway FCU remained closed while the others were functional. Brentwood Baptist Church FCU remained closed. Its website had been suspended during the week. Coastal Community FCU, based in Galveston, remained closed but was communicating via its website to members and urged them to use shared branching services. "We are extending all loan and MasterCard payments for 30 days because we care about you and want to make your lives a little bit easier," it told members. DuPont Goodrich FCU noted its Lumberton, Jasper and Vidor offices are open and others would open as power is restored. "We are answering phone calls; however, the phone lines have been unpredictable. We appreciate your patience if you experience any delays." It warned against leaving messages regarding transactions and suggested contact by e-mail. Education First Employees, which said it was "semi-operational" but closed, used an Intranet to update its employees daily, it said. "Your credit union will start daily activities as power is restored to our area. We hope that all our members remain safe and secure during this period. Your credit union is here to serve your financial needs during this critical time." El Paso Corp. FCU wrote on its website Tuesday it was still closed because its sponsor was closed. It encouraged members to use a shared branch location. First Service CU's website gives an idea of the types of problems the credit unions are coping with. Its note to members said it hoped "that all of you have come through the storm with little or no damage and are on the road to recovery. Certainly we know there are many of you inconvenienced from the storm and our thoughts are with you." As of Friday evening, it was still working from generator power at its main office. "Unfortunately, we have lost our phone lines and do not have an estimate yet when those will be repaired. This means that our Call Center and VIP Phone Line are down, but Home Banking is still up and working. We will keep you posted as to when phone service is restored." First Service said it had decided to shut down its generator at night. "In order to serve the majority of our members during daytime hours, we have decided to shut our generator down from 11 p.m. to 6 a.m. until further notice to preserve the generator. During this downtime, members WILL be able to use ATM and Debit Cards but will not have access to Home Banking or the VIP Phone Line. We apologize for any inconvenience this may cause and appreciate your patience," the credit union said. "We have had power restored to most of our branches but for those offices still without power, we may only be able to offer limited transactions so we apologize for the inconvenience but appreciate your patience during these difficult times," the credit union said. For many credit unions in the area, the message was a typical one.

IBusiness WeekI CUs have become the FI of choice

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NEW YORK (9/22/08)--An article in Business Week notes that credit unions are now the "financial institution of choice" for more people and small businesses. The article by Karen E. Klein in the "Smart Answers" section discusses how small business owners deal with today's financial market crisis. It offers guidance for business owners on banks, credit unions, business loans, labor, pricing, insurance and equity investments (BusinessWeek.com Sept. 19). "In the past decade, credit unions have become the financial institution of choice for increasing numbers of individuals and small businesses. They're also making more small business loans than ever before," says the article. It features California and Nevada Credit Union League President/CEO Bill Cheney responding to a statement by an expert concerned over losses in the housing market in California and Florida. Cheney noted that "a couple" of credit unions in California had some difficulty due to the housing crisis, "but those have been addressed, and they've merged with healthy financial institutions. "Overall, the great majority [of credit unions] are well-capitalized, in excess of government guidelines on capitalization, and most are doing well considering today's financial situation." Cheney emphasized that credit unions continue to make loans to members who are creditworthy and said they are getting "a lot of calls and interest from our members. They're asking about the availability of their credit lines and about deposit insurance." Cheney encouraged members to call, adding, "they'll likely find that local institutions are doing much better than the larger ones." He pointed out that deposits in credit unions have federal insurance, like bank deposits.

Three nominated for CUNA Board

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WASHINGTON and MADISON, Wis. (9/22/08)--Three people have been nominated so far for the Credit Union National Association (CUNA) board of directors. The deadline for nominations for eight positions on the board is Oct. 17. Nominated are:
* Sandy Lingerfelt, Clinchfield FCU, Erwin, Tenn., for District 3, Class A; * Brett Thompson, Wisconsin Credit Union League, Pewaukee, Wis., for District 4, Class D; and * Winona Nava, Guadalupe CU, Santa Fe, New Mexico, for District 5, Class A.
The eight directors will take office Feb. 27, 2009, for three-year terms to expire at the adjournment of the 2012 CUNA Annual General Meeting. Positions up for election are:
* District 1, Class B; * District 2, Class C; * District 3, Class A; * District 3, Class D; * District 4, Class B; * District 4, Class D; * District 5, Class A; and * District 6, Class C.
Nominators must submit the appropriate forms and obtain consent of the candidate. Voting will begin Oct. 22 and will close on Dec. 19. For more information, use the resource links.

CU System briefs (09/19/2008)

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* WARNER ROBBINS, Ga. (9/22/08)--A man who robbed HEA CU, a $20.7 million asset, Warner Robbins, GA.-based credit union, was given a life prison sentence without parole. George A. Bufkin, 49, was sentenced under Georgia’s “three strikes” law, according to a news release from the local district attorney’s office. Bufkin had four previous convictions for auto theft and a conviction for aggravated stalking. The robbery took place Oct. 12 when Bufkin used a BB gun to demand money from a teller and left with more than $4,000. Because he had been a member of the credit union, employees were able to identify him. Police arrested Bufkin later that day and recovered all the stolen money (The Telegraph Sept. 18) … * HARRISBURG, Pa. (9/22/08)--Heritage Valley FCU, York, Pa., will be featured every Monday talking with the host of FOX43's "Better PA," Melanie Gardner. Better PA is a television program about financial topics. Heritage Valley's presence will promote credit unions, said the Pennsylvania Credit Union Association (Life is a Highway Sept. 19). The segments also will be posted online ... * MADISON, Wis. (9/22/08)--MATC CU announced plans Thursday to merge into UW Credit Union. The two Madison, Wis.-based credit unions will work together to join their institutions and provide current members and the Madison Area Technical College community a full-service branch. According to MATC CU President Rhonda Mork, “We have very similar service philosophies and both have a long history of service to campus communities. This partnership is not only beneficial for current MATC CU members, but an exciting new financial choice for students, faculty, and staff.” MATC CU, with $2.9 million in assets and 650 members, will merge into UW CU, a $1 billion credit union servicing more than 118,000 members, by December … * HARRISBURG, Pa. (9/22/08)--Former Pennsylvania Credit Union Association (PCUA) Chairman Lee Lester Sell, 91, died Aug. 15 at his home. He was chairman of the association from 1970 to 1972 (Life is a Highway Sept. 19). Sell organized 16 credit unions in Pennsylvania and was charter member and founder of Barta-Berks FCU, now RSR Federal. He was Barta's manager for 30 years. He also served on the boards of directors for CUNA Mutual Insurance Society. He was a national director of the Credit Union National Association (CUNA), and was a member of CUNA's task force on consumer affairs and CUNA's Founder's Club ...

Council breakout Handling threats to computer security

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WILLIAMSBURG, Va. (9/22/08)--Credit unions need to focus on internal and external computer security threats and devise a multi-layered mitigation strategy in today’s world, a computer security expert said at a credit union industry conference Friday. A session on how credit unions should handle threats to computer security was presented at the CUNA Operations, Sales & Service Council (OpSS) Friday in Williamsburg, Va. The conference ran through Saturday. Karen Daeke, vice president of security administration at State Employees’ CU, Raleigh, N.C., gave a presentation titled, “Social Engineering Fraud.” According to Daeke, Internal computer security threats include:
* Unauthorized access; * Unauthorized software installation such as adware and spyware; * Unauthorized hardware installation with modems, printers, and portable storage devices; and * Wireless access.
Mitigation strategies to combat unauthorized access include reviewing physical security for computer and network rooms (router, firewalls, hubs), and attempts to control the computer environment (locks, access control, biometrics), Daeke said. To combat unauthorized software, credit unions should password-protect their computers. They also should limit users who have authority to install software, and remove unnecessary ports and drives from computers. Also, there are many free anti-spyware and anti-adware programs available, Daeke said. To minimize threats caused by wireless access points, credit unions should not extend the access range beyond what is needed, Daeke said. External computer security threats include:
* Operating system exploits; * Instant messaging/e-mail exploits * Remote access; * Malware; * Adware and spyware; * Hackers; * Phishing; and * Spam.
Some ways to mitigate external computer security threats include installing firewalls, encrypting instant messaging traffic, installing anti-virus software and not responding to phishers and spammers, Daeke said. Although there is no such thing as an absolutely safe haven from computer system intrusions and threats, the best defense is a multi-layered security system in place, Daeke said. That includes:
* A firewall; * An intrusion detection system; * Anti-virus protection; * Spyware and adware protection; and * Strong passwords and encryption.
And above all, user awareness is needed, she added.

CUNA Mutual CUs in better position to grow

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VANCOUVER, Wash. (9/22/08)--Credit unions may be better positioned for growth than their banking peers nationwide, Dave Colby, chief economist with CUNA Mutual Group, told members of the Washington Credit Union League at its annual meeting last week. Rough times are looming for the U.S. economy and translate to slower growth--not losses--for credit unions, which have a tradition of being fiscally conservative, Colby said (The Columbian Sept. 18). “We have a golden opportunity right now,” Colby told the newspaper. “Your members are being buffeted by the talking news heads, but we know our capital. We can protect it. Financial viability is what credit unions are all about.” Because consumers generally save cash when the stock market is in turmoil, credit unions now have a chance to attract new members to their savings accounts, Colby said. With stressed banks offering unprofitable high-interest savings and certificates of deposit accounts to try to attract much-needed cash, credit unions won’t be able to compete through their rates. Rather, they will have to emphasize their conservative approach with investing and lending to garner customers worried about the health of big banks, Colby said. Credit union assets should grow at a 6.6% annual rate through the next five years, Colby projected. However, to sustain growth, credit unions will need to attract new members, particularly in light of aging members nearing retirement, he added.

OpSS Council Convert to salesservice culture

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WILLIAMSBURG, Va. (9/22/08)--Credit unions converting to a sales and service culture need to “drop the ego,” according to Jim Santiago, vice president of operations at Orlando (Fla.) FCU. “Converting your credit union to a sales and service culture is not about what ‘YOU’ did, it’s about creating what is good for the member, team member and credit union,” he told attendees of the CUNA Operations, Sales and Service (OpSS) Council Conference in Williamsburg, Va., last week. “Leave your ego at the door.” The conference ended Saturday. Credit unions should ensure that their processes don’t offer the member the same product or service every time they walk in. They should offer a combination of products--such as deposit products, convenience products and loan products. Tracking product sales and team member sales by product and service mix is also important, he noted. Providing incentives for credit union employees to see products and services is key. Credit unions should provide product education and information sheets, evaluate and update procedures, train and coach staff. Santiago encouraged credit unions to bridge the gap between the internal service of a credit union--the front and back offices--with external service. Branch managers also should monitor sales daily or weekly, and remember that development coaching is not process coaching. Santiago also suggested that credit unions review and change incentive plans, and recognize staff members’ accomplishments.

TruMark CEO speaks for CUs at state House committee

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HARRISBURG, Pa. (9/22/08)--TruMark Financial CU CEO Rick Stipa before the Pennsylvania House Commerce Committee about a proposal regarding mortgage conciliation meetings.
TruMark Financial CU CEO Rick Stipa testifies during a hearing on a proposal regarding mortgage conciliation meetings. His credit union already participates in such meetings, he said, adding that the proposal should be amended. (Photo provided by the Pennsylvania Credit Union Association)
He testified on behalf of Pennsylvania credit unions and the Pennsylvania Credit Union Association. The proposal would require lenders seeking court approval of a mortgage foreclosure to participate in a conciliation conference with the homeowner to explore restructuring the loan as well as the borrowers’ eligibility for state, federal and local mortgage foreclosure programs (Life is a Highway Sept. 19). Stipa requested that the proposal be amended to clarify the process. TruMark, Trevose, Pa., already participates in conciliation conferences, according to Stipa. “This is the credit union way. This is what credit unions do. We reach out to our members,” he said.

FOX8 Consumer Reports Save money at CUs

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WINSTON-SALEM, N.C. (9/22/08)--Credit unions received positive press on a television station in North Carolina Tuesday. FOX8 consumer reporter Melissa Painter, with the help of Consumer Reports, provided tips for consumers on how to save hundreds of dollars each month. Among the advice: check out a credit union. "Are you still paying bank fees?" Painter asked in the report. "You don't have to. Look at a credit union. Credit unions like Allegacy FCU and Truliant FCU are open to just about anybody, and credit unions have lower rates and almost no fees." Other advice included, comparing insurance costs, buying generic drugs, checking out grocery store brand products, evaluating the phone bill and paying off credit cards. The show aired on Sept. 16. Allegacy FCU and Truliant FCU are both based in Winston-Salem, N.C. Allegacy has $1.123 billion in assets and Truliant has $1.208 billion.

North Carolina CUs shine in credit crisis

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GREENSBORO, N.C. (9/22/08)--North Carolina credit unions continue to help their members weather the economic storm, the North Carolina Credit Union league said Friday.
North Carolina credit unions are doing well despite trouble in the financial markets, and there’s no need for them to cut back on lending, according to North Carolina Credit Union League President/CEO John Radebaugh. (Photo provided by the North Carolina Credit Union League)
Credit unions don’t rely on the stock market for funding, and they made prudent lending decisions when others didn’t. “There’s no need for them to cut back on lending now,” said league President/CEO John Radebaugh. The league also has seen a surge in the number of searches on its credit union locator service, Find a Credit Union. Searches jumped 62% in April through June, the league said (Weekly Update Sept. 19). Statewide, credit unions continue to provide service to their members. The league noted:
* Carolina Postal CU, Charlotte. Loans are up--more than $1.2 million to date. The credit union also offers a “Switch and Ditch” auto loan enabling members to bring their auto loans to the credit union for a lower rate and $50 in gas money; * Champion CU, Canton. Champion offers a Fresh Start Auto Loan to help members refinance their auto loans to a lower rate. It also is offering the Stay Warm Fuel Loan program to help members get low-cost loans to heat their homes; * Charlotte Metro CU, Charlotte. The credit union originated 173 mortgages over the past year totaling $29.8 million, a 90% increase from last year; * Coastal FCU, Raleigh. Coastal added more than 5,600 new checking accounts this year, and more than 13,600 new members since January 1. Deposits are up 14%, loans up 20% and its mortgage portfolio is up 12.5%; * Local Government FCU, Raleigh. The credit union has grown by more than 10,000 members this year, and assets increased by 20%. Loans grew by 33%; * Lion’s Share CU, Salisbury. Loan activity surged over the summer and deposits are up; * Members CU, Winston-Salem. The credit union has a 2.22% increase in total assets and 1.23% in net loans over the last year; and * Summit CU, Greensboro. Loan growth is at $9.2 million, home equity loans are more than $7 million, credit card balances are more than$1.2 million, and auto loans are more than $617,000.

Vermont league president blogs from Poland

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WARSAW, Poland (9/22/08)--Joe Bergeron, president of the Association of Vermont Credit Unions, was blogging last week as a participant in a World Council of Credit Unions (WOCCU) engagement program that met in Poland to study the country's cooperatives. Poland has one of the world's fastest-growing, most successful credit union systems. On Thursday, the delegation met and talked with various government officials in Warsaw--Poland’s capital, Bergeron wrote in his daily blog at Vermontcu.glogspost.com. “Following security checks and entry past armed ceremonial guards, we briefly toured the main area of the [Presidential] Palace and visited with the President’s Chief of Staff and Under Secretary,” Bergeron wrote. “Our discussions tried to compliment the great benefits credit unions provide Polish people and encourage support for favorable laws for them by government.” On Wednesday, the delegation visited a typical storefront branch of Skok Stefczyk Gdansk. “It’s not unlike a five-to-six staff-member branch of a U.S. credit union, with an ATM machine,” Bergeron blogged. “We did learn that because mass transportation is so prevalent in Europe, drive-up tellers and ATMs are extremely rare.” The delegation’s members noticed that anywhere they stood in downtown Gdansk, they were surrounded by three, four or more financial institution branches. “Again, this being a cash society, makes accessibility to branches more desirable,” Bergeron explained. He also noted that, in rural areas, it’s not unusual for mail carriers to deliver cash to people’s mail boxes. “Oddly, between these mail men delivering cash and people walking around with so much cash on the street, there’s not much in the way of theft. Stefczyk’s 300 or so branches have only experienced two attempted thefts over about a five-year period,” Bergeron added.