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Closed bank worked closely with CU mortgages

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WASHINGTON (9/22/09)--The Federal Deposit Insurance Corp. (FDIC) Friday seized two subsidiaries of Irwin Financial Corp., a Columbus, Ind.-based banking company that worked in the past with credit unions on mortgage lending. The actions bring the total number of failed banks this year to 94. Citing previous cease-and-desist orders and directions for the banks to increase capital, regulators closed the $2.7 billion asset Irwin Union Bank and Trust Co., based in Columbus, Ind., and $493 million asset Irwin Union Bank of Louisville, Ky. The failures were estimated to cost FDIC $850 million. The institutions' holdings were transferred to First Financial Bank, Hamilton, Ohio, FDIC said. Irwin Mortgage Corp., a wholly owned subsidiary of Irwin Financial Corp., formerly offered mortgage loans through sales staff located onsite at about 50 credit unions. In 2005, it sold its credit union lending business to American Home Mortgage, a subsidiary of American Home Mortgage Investment Corp. (News Now March 17, 2005). The community mortgage loan production branches were located in Arizona, California, Colorado, Hawaii and Washington. Irwin also sold 17 branches and its Carson, Calif.-based loan operation to Pinnacle Financial Corp. (News Now March 19, 2005). American Home Mortgage Investment Corp. later went bankrupt in August 2007(News Now Sept. 20, 2007).

Heartland CU part of investment education study

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MADISON, Wis. (9/22/09)--Heartland CU will participate in an 18-month study that aims to identify the right mix of online education, coaching and follow-up information to encourage proactive investment behavior. The Madison, Wis.-based credit union said it will immerse as many staff as possible in an investment education project that will aim to motivate their own investing and stimulate investing. As many as 4,000 credit union staff and volunteers in Wisconsin--including tellers, member service representatives, loan officers, management and others--will participate in the program, which offers 30,000 hours of online investment education, according to the Wisconsin Credit Union League. "Fear of job losses has pushed Americans to save more now than ever, but saving without regular investing still wouldn't be enough to properly prepare people for their long-term goals," said Sally Dischler, president/CEO of Heartland CU. "Our nation is in dire straits in part because so many individuals and families are under-prepared for retirement and commonly fail to use other investment vehicles, such as savings programs for health care and higher education," Dischler said. "So we not only need to get more Americans growing their nest eggs through investing but also figure out--in light of today's extraordinary economic circumstances--how best to motivate consistent investing over a lifetime," she said. Heartland's participation is part of its ongoing REAL Solutions initiative, which strives to help Wisconsin families improve their financial position over time by encouraging saving and investing, improved creditworthiness and long-term wealth building. The study is being conducted in partnership with the Puelicher Center for Banking Education at the Wisconsin School of Business, University of Wisconsin-Madison, Precision Information, the Wisconsin Credit Union League, Gov. Jim Doyle's Council on Financial Literacy and the Wisconsin Department of Financial Institutions. It is funded by a grant from Investor Protection Trust, a nonprofit organization devoted to investor education.

Another news report notes CUs low fees

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PHOENIX (9/22/09)--Credit unions' low fees received a mention in a Phoenix television station's consumer report about how college students can build their credit. One of tips shared by the's Channel 12 was to consider a secured credit card. "This is another good way for students to build credit in this environment. Fees can be very high, so look to credit unions since they often have the lowest fees on secured card," said the consumer reporter. The article continues a recent trend of reporting about credit unions' low fees. For the full report, use the research link.

Tentative Pennsylvania budget agreement reached

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HARRISBURG, Pa. (9/22/09)--Pennsylvania Gov. Ed Rendell and state legislators announced Friday they have reached a tentative agreement on the state's budget, with a spending plan totaling nearly $28 billion. The plan would end a more than 80-day budget impasse, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Sept. 21). "During the 80-day budget impasse, the association worked diligently to ensure that credit unions were removed from taxation conversations during budget negotiations," said PCUA President/CEO Jim McCormack. "As caucus leaders begin to implement legislation to enact the budget, we will continue to monitor, analyze and share any implications that might affect daily business operations," he said. The tentative budget calls for the state to spend $400 million less this year than in fiscal 2008-09. The plan calls for increasing spending on basic education needs by $300 million. The agreement package will be drafted into a bill to go before a joint House and Senate conference committee to pass and send to their respective chambers. Then the full chambers will vote on the bill without the ability to change it. Once passed, it will go to the governor for signature, likely within the next two weeks. Credit unions in the state, like in other states with budget problems, assisted members who are state employees with emergency funds to get them through hardships caused by the extended budget process.

Suit alleges Chrysler deputy CEO owes CU 609286

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MANHATTAN BEACH, Calif. (9/22/09)--Western FCU, in Manhattan Beach, Calif., is suing Chrysler Group LLC Deputy Chief Executive Officer James Press for $609,286. The $2 billion asset, Manhattan Beach, Calif.-based credit union is taking legal action against Press because he allegedly failed to make two payments last year on his Birmingham, Mich., home ( Sept. 20). Press told the credit union he would be unable to make two pending loan payments of $203,000, according to the lawsuit. The credit union also is seeking attorney’s fees. The alleged debt occurred on an unsecured line of credit Press received while working for Toyota Motor Corp. in Torrence, Calif., said the Los Angles Times (Sept. 18). In a statement, Press said that troubles in the auto industry resulted in the denial of his request for a bonus payment. That led to his inability to make loan payments to the credit union. Press said he is trying to arrange for a loan against a future bonus with Chrysler so he can pay off his loan to Western FCU. Also, the Internal Revenue Service placed a $947,409 lien on his home because of unpaid federal taxes, according to documents from court and the Oakland County Register of Deeds, in Pontiac, Mich.

Va. CUs tell why theyre boosting market share

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ROANOKE, Va. (9/22/09)--Credit unions in the Roanoke, Va., metro area recently told The Roanoke Times why they’re increasing their market share. Credit unions in the U.S. collectively posted assets of $82 billion this past summer. Credit union membership growth hit 2% this summer, the highest rate since 2004 (The Roanoke Times Sept. 21). The newspaper asked why credit unions are growing, and six Southwest Virginia credit unions gave the Times a link to a website:, a promotional campaign site that declares credit unions as “People Over Profit.” Paul Philips, CEO of Freedom First CU in Salem, Va., told the newspaper that there is no “fat cat.” The credit union tries to charge its members the least amount possible for services, he added. Freedom First has $273 million in assets. Wei Jiang, senior analyst at SNL Financial in Charlottesville, said banks work for their investors, whereas credit unions work for their members. “[Credit unions’] purpose is not to make money,” Jiang said. Credit unions may not be as popular as traditional banks, but that’s because many people don’t understand what credit unions are about. It’s a matter of awareness, Mark Wolff, Credit Union National Association spokesman, told the newspaper. The paper also noted that credit union deposits are backed by the National Credit Union Administration.

CU 24 hosts Costa Rican delegates for EFT Roundtable

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TALLAHASSEE, Fla. (9/22/09)--Credit Union 24, a credit union-owned ATM and point-of-sale (POS) network, is collaborating with delegates from the World Council of Credit Unions (WOCCU) to share best practices and develop effective electronic funds transfer (EFT) strategies within the Costa Rican market. “We explored many issues within the EFT arena, all of which resulted in both parties learning valuable information and best practices,” said Jaime Castro, CEO of Coopeorotina, based in Costa Rica. “Credit Union 24 is an expert in this industry and has member touchpoints throughout the world in the form of ATMs and POS locations. “The organization has extensive experience that we can hopefully share with all of our credit unions in Costa Rica and implement similar solutions,” Castro added. While ATMs are common in Costa Rica and throughout Latin America, POS is in the beginning stages of infrastructure development. Topics at the initial meeting between Credit Union 24 and Costa Rican delegates included POS processor and merchant relations, POS interchange income and interchange income models, the current EFT landscape in Costa Rica, and fee-free ATM terminals and POS locations. “Credit unions around the world are experiencing very similar opportunities and challenges as countries’ economies become more dependent on each other, presenting the chance for all of us to learn from each other,” said Jim Park, president/CEO of Credit Union 24. “The credit union-owned Credit Union 24 network offers services that are not yet introduced in Costa Rica, so we are thrilled and honored to collaborate and create an open forum to discuss these topics.” WOCCU delegates who attended the first collaborative meeting at Credit Union 24’s headquarters Aug. 18, included: Jaime Castro, CEO of Coopeorotina; and Alvaro Vargas, chief of manager compliance; Milton Sancho, information technology manager; and Carlos Zamora, marketing manager, all from Coopenae in Costa Rica.

Credit is key to Hispanic outreach says lender

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NEW YORK (9/22/09)--When reaching out to unbanked Hispanics, credit unions may want to consider offering them credit, instead of just trying to target them with an account. James Gutierrez, founder of Progress Financial, which gives small loans to Hispanics with limited or no credit history, said not having a credit score is like “not having a face.” He said his business tries to “build that face” by helping Hispanics establish credit scores (American Banker Sept. 21). Progress Financial has funded $20 million in loans during the past four years. It hopes to begin working with financial institutions, and has applied for status as a community development financial institution. The company makes uncollateralized loans for $350 to $2,500. The annual interest rate is 36% and average loan terms are nine months. Payments are due biweekly. Many credit unions already follow the advice. They offer short-term loans under programs such as the Ohio Credit Union League’s StretchPay. The Credit Union National Association (CUNA) has identified Hispanic outreach as a top priority for credit unions. The Hispanic population is expected to reach nearly 103 million by 2050, and about 40% to 55% are unbanked. They access fringe financial service providers such as check cashers, remittance shops, and pawn shops--many of which charge exorbitant fees, according to CUNA research (News Now June 23).

IN.Y. TimesI CUs clear deposits quicker than banks

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NEW YORK (9/22/09)--Credit unions generally clear deposits quicker than banks do, according to a finance columnist for The New York Times. In his Saturday column “Hurry Up and Credit My Account,” Rob Lieber wrote that many readers have sent him angry questions about overdraft fees after he wrote about them earlier this month. The questions have come as the fifth anniversary for the law known as Check 21 approaches, Lieber noted. Check 21 allows financial institutions to turn paper checks into digital images and handle them electronically instead of having to send volumes of paper checks around the U.S. on airplanes to settle them. “Banks can and do move faster than regulations require,” Lieber wrote. “And some have pushed their daily deadlines for depositors later by a few hours. Credit unions in particular tend to clear deposits more quickly, according to a 2007 Federal Reserve study of the effects of Check 21.” For the full story, use the link.

CU System briefs (09/21/2009)

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* WEST ALLIS, Wis. (9/22/09)--A member of Guardian CU in West Allis, Wis., tackled an attempted robber at the credit union Sept. 15 (FOX 21 Sept. 21). The member said he feared for his wife’s safety. Senister Smith, 23, was arrested by police and charged with armed bank robbery. To watch a video of the incident, use the link ... * SEATTLE (9/22/09)--A man accused of robbing 17 financial institutions this summer has been caught by police. Quincy Quinn, 36, was arrested Friday and is being held on a $750,000 bail for 17 counts of bank robbery (Seattle Times Sept. 16). A second suspect who robbed the financial institutions with Quinn has yet to be identified. Three credit unions were included in the robberies--Seattle Metropolitan CU, Tukwila, on June 1; Group Health CU, Seattle, Sept. 3.; and Alaska USA FCU, Shoreline, Wash., on Thursday ... * SAGINAW, Mich. (9/22/09)--A Saginaw, Mich., credit union is one of several area financial institutions open for business on Sundays to help members who cannot do their banking during the rest of the week. The institutions hope to draw in customers from the surrounding area, according to one bank executive. Team One CU, a $297.3 million asset credit union, is among the financial institutions staying open all week. Team One has three branches inside Wal-Mart stores in Bay City, Clio and Grand Blanc, Mich., that are open noon to 4 p.m. Sundays. Employees are on hand to help open accounts, take loan applications and provide regular banking services. “The nature of Wal-Mart is that it is open 24 hours, seven days a week, “ said Jenney Robishaw, Team One marketing specialist. “For us not to be open on Sundays, when a lot of people do their shopping, doesn’t make sense,” she added (Mid-Michigan Business Sept. 20) … * HARRISBURG, Pa. (9/22/09)--Edward C. Ward Jr., board secretary of Norristown Bell CU, Blue Bell, Pa., died Sept. 17, according to the Pennsylvania Credit Union Association (Life is a Highway Sept. 21). Ward was active in the community, serving on the Norristown School Board and was president of the Joint Operating Committee at the Center of Technical Studies …

Pacific CUs form new network

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NADI, Fiji (9/22/09)--Credit unions in the South Pacific will gain greater political leverage and more educational opportunities with the formation of the Pacific Credit Union Network.
Click to view larger imageMembers of the Pacific CU Network Advisory Committee and its supporter organizations are, from left: Michael Koisen, Papua New Guinea; Brian Branch, World Council of Credit Unions; Penisimeni Fifita, Tonga; Faataga Faataulofa, Samoa; Peter Mason, Credit Union Foundation Australia; and Manoa Seruvakaula, Fiji. Seruvakaula represented Anane Vadei, who will be Fiji's permanent committee representative.
The new organization, sponsored by Credit Union Foundation Australia (CUFA) and facilitated by World Council of Credit Unions (WOCCU), held its first organizational meeting last week at the Pacific Credit Union Technical Congress, a four-day educational event jointly sponsored by CUFA, WOCCU and the Fiji Savings & Credit Union League. The network will provide technical assistance, communications and advocacy support, and develop a Pacific credit union database, said Peter Mason, CUFA CEO. The Australian credit union development organization began planning the network last year. "The distance between credit unions located on South Pacific islands has kept many of them from developing the critical mass necessary for growth," said Mason. "The new network will provide the political and technological relationships to help them better serve their members." The network was introduced to 102 congress participants from 11 countries. In addition to participants from Australia, Fiji and the U.S., countries attending were Kiribati, Papua New Guinea, Samoa, Solomon Islands, Timor-Leste (East Timor), Tonga and Vanuatu. Other congress highlights included sessions on board/management relationships, strengthening credit union legislation, understanding the cost of delinquency, credit union marketing and a regulatory forum.
Click to view larger image Faataga Faataulofa from Samoa makes a point during the Pacific Credit Union Technical Congress, which met last week. (Photos provided by the World Council of Credit Unions)
Members of the new network's advisory committee, which will help lead the group's development initiatives, include Anane Vadei, Fiji, who was represented on the committee by fellow countryman Manoa Seruvakaula; Michael Koisen, Papua New Guinea; Faataga Faataulofa, Samoa; and Penisimeni Fifita, Tonga. CUFA will serve as the network's secretariat, with WOCCU providing facilitation and resources. The network and congress are the latest cooperative efforts between WOCCU and CUFA designed to help develop credit unions in the South Pacific. This is a region in which CUFA's influence especially has been of great value in fostering credit union growth, according to Brian Branch, WOCCU executive vice president and chief operating officer. "CUFA has provided critical leadership in developing and supporting Pacific region credit unions for many years," said Branch. "We are now seeing the fruits of CUFA's dedication, and our collaboration as credit unions puts improved management practices in place to prepare for increased regulatory oversight that is coming in the wake of the global financial crisis."

Iowa students having difficulty finding loans CU says

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IOWA CITY, Iowa (9/22/09)--As the private student loan market becomes tighter and more regulated, the gap between college costs and loan availability is widening, according to University of Iowa Community CU, Iowa City. Higher tuition and other costs mean there is a $30,000 shortfall for students attending a public university for four years and $100,000 for private schools, the $838.4 million asset credit union told Iowa City Press-Citizen (Sept. 21). Steve Quigley, senior vice president for retail sales at the credit union, noted that the need posed by the gap is why the credit union decided to get into the student loan business. It is one of 80 credit unions throughout the nation offering private student loans through Credit Union Student Choice, a private student loan provider for credit unions. One student, a senior at the university, told the publication he is $10,000 short because he couldn't get enough loans--from institutions that previously lent to him--to cover his costs. Private student loans can fill that gap, said the credit union, but many lenders are leaving the private insurance market after the economy crashed. With a bill in Congress to terminate a key federal student loan program--the Federal Family Education Loan Program (FFELP)--the gap could become a canyon. The Credit Union National Association has gone on record opposing the elimination of the FFELP program. Eliminating FFELP would remove a "valuable option" for students (News Now Sept. 18) A University of Iowa (UI) official said that overall it hasn't seen a gap between loan availability and college costs. It provided $59 million in grants and scholarships this year, 11% more than last year. UI's student financial aid office suggested students compare lenders and examine interest rates, terms and fees when taking out a private loan.