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Southwest Corporates July net loss 178.2M

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DALLAS (9/3/09)--Dallas-based Southwest Corporate FCU has recorded additional investment losses on its mortgage-backed securities and further depletions of its membership capital shares at U.S. Central, according to its July financial statement posted on its website. The numbers were initially reported to its members in July. Southwest Corporate recorded a net loss in July of $178.2 million, which results in a year-to-date net loss of $161.6 million and a retained deficit of $160.9 million. Its operating earnings before investment-related losses was $21.4 million. Investment losses contributing toward the net loss included $113 million of other than temporary impairments in its portfolio of mortgage-backed securities, reflecting increased loss projection from March 31 to June 30. The corporate also recorded $67.6 million in additional depletion of U.S. Central membership capital, reflecting U.S. Central's depletion of those funds on July 31. Southwest Corporate's 2008 audit remains in process pending the completion of U.S. Central's audit, which the corporate said was expected this week. "Once U.S. Central's audited financial statements are reviewed, our audit is expected to be completed approximately four weeks later," said Melissa Wardell, Southwest Corporate senior vice president/chief financial officer, in the posted financial statement. For the full report, use the link and click on July 2009 monthly report.

Columnist Hundreds of complaints about banks none on CUs

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FORT WORTH, Texas (9/3/09)--Dave Lieber, “Watchdog” columnist for the Fort Worth Star-Telegram, told Texas credit unions that he receives hundreds of requests for help with bank problems and none for credit unions. He recently gave a presentation titled “Why Americans Hate their Banks but Don’t Know Enough to Love their Credit Unions,” at the Fort Worth Chapter of Credit Unions’ monthly meeting. Lieber’s column helps readers who have issues or problems with current situations affecting their communities (LoneStar Leaguer Aug. 28). He said that while he has had hundreds of requests from readers to address or correct complaints facing the banking industry, he had not received any asking for help in dealing with a credit union. With many “horror” stories relating to banking customers’ complaints, Lieber had his audience laughing when he said he now understood why it was called “BANKruptcy” and not “CREDITUNIONruptcy.”

CU System briefs (09/02/2009)

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* NEW BERLIN, Wis. (9/3/09)--WISCOR CU, a $15 million asset credit union in West Allis, Wis., has merged with Landmark CU, a $1.4 billion asset credit union in New Berlin, announced Landmark. The merger was effective on June 30, with data processing systems merged on Aug. 28, enabling WISCOR members to begin using Landmark branches. WISCOR's West Allis location has closed and its five employees are now Landmark employees. Earlier this summer another West Allis-based credit union, Lifetime CU, also merged into Landmark. WISCOR CU posted a net loss of $115,563 during first quarter 2009. The loss included a $126,054 payment to the National Credit Union Share Insurance Fund (Business Journal Milwaukee Sept. 1) … * NORTH MIAMI, Fla. (9/3/09)--Mount Sinai FCU, Miami, has been approved by the Florida Office of Financial Regulation to merge with Peoples CU in North Miami. The merger was approved Aug. 26 without a shareholder vote because regulators considered Mount Sinai FCU to be undercapitalized (South Florida Business Journal Sept. 2). After the deal is complete, the credit union’s branches will be managed by Peoples CU. Mount Sinai has $17.7 million in assets as of June 30. The credit union has a net worth-to-asset ratio of 1.43%, below the 7% threshold considered to be well-capitalized. Peoples CU has $61.7 million in assets as of June 30. The combined credit unions will have $79.4 million in assets and a net worth ratio of 9.75% ... * BEAVERTON, Ore. (9/3/09)--Enterprise Car Sales presented $5,000 to Doernbecher Children’s Hospital (DCH) Aug. 25 to make a contribution to the Credit Unions for Kids program of Oregon and Southwest Washington, said the Credit Union Association of Oregon. “[The contribution] will go to help us reach our current goal at DCH, which is a two-year $1 million goal to fund the professorship of Dr. Robert Steiner, who specializes in inborn errors of metabolism and osteogenesis imperfect,” said Kasey Rockwell, association director of credit union development and Credit Unions for Kids program coordinator. Credit Unions in Oregon and southwest Washington raised more than $879,000 during the 2008 campaign year for Credit Unions for Kids …

University FCU challenge to students Stretch 20.09

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AUSTIN, Texas (9/3/09)--University FCU (UFCU) is challenging Central Texas college students to prove how far they can stretch $20.09 in 2009. It is hosting an online video contest and social media campaign, which runs through Sept. 17. The purpose of the challenge is to teach young adults the benefits of making smart financial decisions at each stage of life and to let people know how much can be achieved with only $20.09. Participants record creative ways to make $20.09 last as long as possible and post their videos, which must be between 30 seconds and three minutes long, on YouTube via www.twenty09challenge.com or UFCU’s Facebook page. Entries will be judged on how creatively participants spend their money and how inspiring their actions are to others. The first place winner will receive a $500 Visa gift card; second place, a $300 card; and third place a $100 card. David Lee, University of Texas student and social media strategist representing UFCU, came up with the contest idea. “I was inspired by the basic concept of showing people the benefits of an action rather than merely telling them that it’s beneficial,” Lee said. University FCU, based in Austin, Texas, has $1.067 billion in assets.

Pa. auditor clarifies proposed tax status changes

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HARRISBURG, Pa. (9/3/09)--Pennsylvania Auditor General Jack Wagner Tuesday sent a letter to the Pennsylvania Credit Union Association (PCUA) responding to PCUA's concern about a proposal to tax non-profit entities as part of his state budget recommendations. In a letter to PCUA President/CEO Jim McCormack, Wagner clarified that while he recommended a review of tax credits, exemptions, and loopholes provided to select individuals and organizations, he did not mention any specific entities, including credit unions. "Nor did I dispute their value or suggest they do not focus on service to their members," he wrote (Life is a Highway Sept. 2). Wagner asked that his clarification be communicated with credit unions and expressed interest in meeting with McCormack soon. "We were very pleased to get this letter of clarification…recognizing the value that credit unions bring to Pennsylvania consumers," McCormack said. "We also look forward to meeting with the Auditor General and his staff to see how our organizations can work together for the benefit of Pennsylvanians." McCormack had sent Wagner a letter expressing strong opposition against the proposal to tax non-profit entities. The suggestion is one of seven recommendations Wagner has made at least twice to the governor and General Assembly to explore during the state's budget impasse (News Now Aug. 18). Pennsylvania entered its second month without a state budget on Tuesday, when the state's House and Senate conference committee resumed meetings after three weeks of suspended private talks. State government has operated on a "bridge" budget funding only day-to-day operations since Aug. 5. Christina Mihalik, PCUA vice president, governmental affairs, attended Tuesday's meeting, and PCUA staff is monitoring any budget talks for any impact on credit unions (Life is a Highway Sept. 2)

Raleigh council approves SECUs tower

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RALEIGH, N.C. (9/3/09)--The Raleigh, N.C., City Council Tuesday approved a plan for a 12-story, mixed use building that State Employees’ CU (SECU) wants
State Employees’ CU, Raleigh, N.C., was recently approved to construct an office building in downtown Raleigh that will house a credit union branch, office space and a parking deck. (Photo provided by State Employees’ CU)
to build downtown at the original site of the credit union’s first branch. SECU said its board had considered building the facility for several years and decided to implement the plans to boost the state’s economy. Construction is expected to begin this fall (News Now June 6). The building will be about 240,000 square feet. The project will include a credit union branch, 31 residential units, office space, and an eight-level parking deck with 165 spaces (wral.com Sept. 1). SECU also plans to open 15 new branches in the next fiscal year, the credit union said. SECU, Raleigh, N.C., has $18 billion in assets.

WOCCU Asia pioneer Augustine Kang dies

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MADISON, Wis. (9/3/09)--Augustine J.R. Kang, 85, a pioneer of the Asian credit union movement and founder of the first South Korean credit union, died Aug. 22 in Madison, Wis. Kang was the first general manager of the Asian Confederation of Credit Unions, which became affiliated with the World Council of Credit Unions (WOCCU) in 1971. As manager, Kang worked with 20 Asian countries (Wisconsin State Journal Aug. 24). In 1983, Kang moved to Madison to start a special project at WOCCU that launched the credit union movement in China. He worked for WOCCU until his retirement in 1995. In addition to his work in the credit union movement, Kang authored two books: “Just As It Is” and “The Conversation That I’d Like To Share With Someone.” Kang also received the Ramon Magsaysay Award for International Understanding in 1981 and an honorary law degree from St. Francis Xavier University in Nova Scotia, Canada, in 1984.

Defense council honors three CUs

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SAN FRANCISCO (9/3/09)--Three defense credit unions were recognized
Click to view larger image On hand at the Defense Credit Union Council presentation of the Army credit union of the year award to Fort Sill FCU were, from left: Cpt. Marocco Roberts, Army liaison; Robert Hopper, Fort Sill FCU chairman; Col. Marlene Fey, commander of USAFINCOM; Denise Floyd, Fort Sill FCU president/CEO; and Dennis Potter, Fort Sill FCU liaison officer.
with Distinguished Service Awards by their branches of the armed services during the Defense Credit Union Council's 46th Annual Conference Aug. 17. The Defense Credit Union of the Year awards and their recipients were:
* Army Award: Fort Sill FCU, Fort Sill, Okla.; * Navy/Marine Corps Award: Navy FCU Souda Bay Branch, Crete, Greece; and * Air Force Award: Andrews FCU, Andrews AFB, Md.
Click to view larger image The Defense Credit Union Council presented its Air Force credit union of the year award to Andrews FCU. Pictured are, from left: Audrey Davis, deputy assistant secretary of the Air Force-FO; Chris McDonald, president/CEO of Andrews FCU; and Henry Bowman, Andrews FCU.
Fort Sill was acknowledged for its outreach efforts in the military and civilian community and its encouragement of financial literacy, specifically among Fort Sill's junior enlisted soldiers and their families. The credit union offers programs such as the In-Balance Check Book Revitalization and the Break-Out Loan, semi-annual training to units on use and potential problems with credit cards and the ATM card, and one-on-one counseling on family finances and budgeting. Navy FCU Souda
Click to view larger image At the Defense Credit Union Council's presentation of the Navy/Marines credit union of the year award to Navy FCU Souda Bay Branch, Greece, were, from left: Capt. James Reich, acting deputy assistant secretary of the Navy-FO; Jean Jeffries, branch manager at Navy Souda Bay; Lt. Johnny Quesada, Souda Bay CU liaison officer; and Lee Gounds, executive vice president, branch operations. (Photos provided by the Defense Credit Union Council)
Bay Branch was recognized for service despite being the only U.S. financial institution in Greece and for overcoming the difficulties of a remote location. Its service included "strong community outreach and exceptional teamwork." Members of the team were also noted for their participation with a welcoming committee, offering on-the-spot financial assistance for personnel on visiting ships that could not enter the branch, and for volunteering to remain open after normal branch hours to meet sailors' needs. Andrews FCU was cited for: its support of Andrews Air Force Base; its extensive financial education through regular briefings, educational seminars and participation in Airmen and Family Readiness Center workshops; its support of the Military Saves campaign through seminars and special savings accounts for new savers; its efforts against payday lending by providing alternative loans and education and participating in town hall meetings in the community.

Capital levels rise with increases in member savings

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MADISON, Wis. (9/3/09)--Credit union capital levels closed in on their pre-financial crisis highs, and credit union members increased their savings balances by a significant amount in July, according to a Credit Union National Association (CUNA) economist’s analysis of CUNA’s monthly sample of credit unions.
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“In July, total credit union capital grew 0.7% to reach $89.037 billion, just shy of the high-water mark reached last November of $90.840 billion,” Steve Rick, CUNA senior economist, told News Now. “However, the 9.3% asset growth since November has pushed the credit union capital-to-asset ratio down to 9.8% in July from 10.9% last November.” Credit union savings balances increased 1.0% in July to $763.8 billion. That’s 9.5% more than during the first seven months of 2009. During the month of July, share drafts increased 3.9%, followed by money market accounts (2.1%), regular shares (0.7%) and one-year certificates (0.3%). Individual retirement accounts declined (-0.6%). “Credit union members increased their savings balances by a strong 1% in July, with the fastest pace set in the share draft (3.9%) and money market account (2.1%) products,” Rick said. “Much of this growth, however, was due to a month-end payday. But so far this year, savings balances are up 9.5%, faster than the 5.8% pace set during the first seven months last year. “Many credit union members are trying to increase their precautionary savings balances due to job-loss fears,” he added. “But for many, this has become a difficult endeavor as layoffs, furloughs and paycuts reduce their income.” Credit union loans outstanding increased 0.2% during July to $586.3 billion, which is 1.0% more than in the first seven months of 2009. That is down from a 4.1% increase during the same period of 2008.
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In July, other loans led loan growth, rising 2.8%, followed by credit card loans (1.3%), home equity loans (1.0%), used-auto loans (0.6%), unsecured personal loans (0.5%) and other mortgages (0.2%). However, new-auto loans declined (-0.2%), as did fixed-rate mortgages (-0.5%) and adjustable-rate mortgages (-1.4%). “Loan growth has dropped off sharply so far this year as members try to deleverage their balance sheets,” Rick said. “Loans grew only 1% during the first seven months, compared to 4.1% increase for the similar period last year. Fixed-rate first mortgages are the only loan category reporting decent growth--5.7%--so far this year, but the growth still is less than half the pace set last year--12.4%.” The loan-to-savings ratio decreased slightly to 76.8% in July from 77.5% in June. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--increased to 21% in July from 20% in June. “The growth rate disparity between credit union loan and savings balances has increased the investment portfolio by 31% over the last seven months,” Rick explained. “Deposits at corporate credit unions have fallen from 17.2% of surplus funds--cash plus investments--in July 2008 to 13.8% today. Government securities and deposits at banks were the investment categories with a rising share of surplus funds.” Sixty-plus-day delinquencies at credit unions remained constant at 1.5% in July. “The weak labor and housing markets were the major factors contributing to a 3.3% jump in total credit union loans delinquent--$8.8 billion--in July,” Rick said. “The ratio of delinquent loans-to-loans now stands at 1.5%, up from 0.95% this time last year. With net job creation not expected until the spring of 2010, credit unions should plan for rising delinquency and loan charge-off rates well into next year.” The movement’s overall capital-to-asset ratio remained constant at 9.8% in July. The total dollar amount of capital is $88 billion.