Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

CU System Archive

CU System

Consumers revolt online against bank fee hikes

 Permanent link
NEW YORK (9/25/09)--Consumers have gone online before to voice complaints about banks fees and rates and service. But one debtor took her complaint to new heights via the viral route to voice her displeasure when Bank of America raised her interest rate. And she got results. The "debtors' revolt" on a YouTube video by Ann Minch was viewed more than a quarter million times and resulted in Bank of America calling her to reduce her interest rate, said CBS News with Katie Couric (Sept. 23). The bank had raised her credit card interest rate to 30% from 13%. "I could get a better rate from a loan shark," she said in the video. She offered an ultimatum: Lower the rate or she won't pay. "Stick that in your bailout pipe and smoke it," she said. Thousands of people who saw the video responded, complaining about their own banks. Minch claimed a small victory for the debtor's revolt movement.

IWSJI item on GMAC notes CUs market gain

 Permanent link
NEW YORK (9/25/09)--A Wall Street Journal article about General Motors Co.'s (GM) former captive finance company, GMAC, notes that credit unions have gained a significant share of the auto loan financing market. Melinda Zabritski, a director with Experian Information Solutions, told the publication that a year ago, credit unions had less than 20% of the auto finance market. Now, "thanks to financial flexibility and a relative lack of exposure to mortgage risk--credit unions have stormed past 30%," she said (The Wall Street Journal Sept. 24). The article was about GMAC using its new access to low-cost capital and the rising prominence of its Ally bank to compete more directly with banks such as Wachovia Corp. and J.P. Morgan Chase. GMAC turned itself into a bank holding company after it the federal government rescued and separated it from GM. GMAC plans to begin offering new auto-related financial programs to card dealers called the Ally Dealer Rewards program, GMAC President Bill Muir told the Journal, to help blunt the gains major banks have made into auto financing. This year Chase and Wachovia became the top providers of loans for new and used vehicles, according to Experian. Chase has 6.7% of the auto loan market, and Wachovia has 4% share, while GMAC has 3% market share. Muir said GMAC is shifting from a culture of relying heavily on making GM happy to a culture that is aggressively looking to steal market share from banks, credit unions and captive lenders of other auto makers.

Wisconsin league Banks put self-interest ahead of consumers

 Permanent link
PEWAUKEE, Wis. (9/25/09)--Brett Thompson, president/CEO of the Wisconsin Credit Union League, has issued a response to the Wisconsin Bankers Association (WBA) that refutes WBA’s rationale for repeated calls of unnecessary regulation, which would prove costly to Wisconsin credit unions and their members, the league said. “Not-for-profit credit unions remain steadfast about operating in the best interest of their 2.2 million member-owners and providing services that help build savings and wealth over time, regardless of financial position,” Thompson said. The WBA supports its claims with statistically flawed and misleading studies, he added. The league said WBA misapplied data that showed credit unions overwhelmingly outperform banks--in 64 of 72 areas of service delivery--constituting 89% of the service areas that were reviewed. Also, credit unions’ outperformance of banks held true for almost every demographic group and loan type over three years, Thompson said. “The WBA’s efforts to further tax and regulate credit unions demonstrate that they do not keep Wisconsin taxpayers’ best interests in mind, but instead are focused on eliminating competition and maximizing profits,” Thompson said. “Otherwise, they wouldn’t look to harm Wisconsin credit unions and their members, who save $208 million annually by saving at and borrowing from their local credit unions instead of banks.” The WBA uses unreliable data to support its position, including a report by the National Community Reinvestment Coalition (NCRC), which mistakenly assumes that credit unions are intended to serve only the poor. This concept exists nowhere in state or federal law, Thompson said. The NCRC bases its conclusions on a 2006 Government Accountability Office (GAO) study--another source WBA cites--that has been all but disavowed by the GAO itself, which concluded its data were flawed and that no conclusions about credit unions or the people they serve could be drawn from it, he added. Thompson outlined several facts:
* “State-chartered credit unions serve their members in a manner consistent with their history as financial cooperatives serving groups based on occupation, association or community, by charging lower loan rates and providing higher return on savings,” according to the National Association of State Credit Union Supervisors, 2007: NASCUS Survey of the State Credit Union System. * “Although no state enabling act establishes as a criterion for organizing state-chartered credit unions an explicit requirement that the institution serve the underserved or low- or modest-income groups, state-chartered credit unions do reach out and provide financial services to all income groups within their fields of membership, both through pricing and community outreach efforts,” said the NASCUS study. * “Despite changes over time in the law, the economy, technology, and member demographics, [credit unions] have remained faithful to their originally conceived cooperative, not-for-profit, democratic structure,” reported the National Credit Union Administration, 2006: Member Service Assessment Pilot Program: A Study of Federal Credit Union Service. * Wisconsin’s low-income mortgage borrowers’ approval rate is 74.7% at credit unions compared with 49.6% at non-credit union lenders. For minority mortgage applicants, the credit union approval rate is 72% compared with 46.6% at non-credit union lenders, according to Home Mortgage Disclosure Data for 2007. * Although credit unions have only a 10% market share for financial services in Wisconsin, they operate 40% of the financial institution branches in the state’s low-income census tracts. By contrast, 94% of Wisconsin banks--including 12 of the largest 20 banks--have no branches in low-income census tracts, report a number of sources, including the U.S. Census Bureau, Federal Financial Institutions Examination Council, Federal Deposit Insurance Corp., Wisconsin Department of Financial Institutions, and the Credit Union National Association.
“In addition to paying millions in state and local taxes each year, legitimate studies and data have shown time and again that credit unions are meeting the needs of working Americans,” Thompson said. “Essentially, what the WBA is calling for is unwarranted, unnecessary, and harmful to Wisconsin families.”

Louisiana CUs review shows growth across the board

 Permanent link
HARAHAN, La. (9/25/09)--Louisiana credit unions experienced across-the-board growth in assets, loans and membership in the quarter ending June 30, according to data submitted to the National Credit Union Administration (NCUA) in the Second Quarter 2009 Call Report, said the Louisiana Credit Union League. Total assets of Louisiana's credit unions increased 1.9% during the second quarter to $7.9 billion from $7.7 billion. The increase is slightly higher than the national increase of 1.5% (eNews Sept. 23). Membership growth in the state during the second quarter continued on a slow but steady pace, reaching 1,163,755 members as of June 30. That is a 1.1% increase over the first quarter, the league said. The number of potential members rose 5.9% from 9.9 million to 10.5 million. Louisiana’s credit unions reported a higher net worth ratio, lower cost of funds, and higher return on average assets as compared to national averages. The statistics are:
* Net Worth Ratio: Louisiana--12.27; National--10.04; * Cost of Funds (annualized): Louisiana--1.91; National--2.22; * Return on Average Assets (annualized): Louisiana--0.53; National--0.26.
Despite the weak national housing market, Louisiana's credit unions continue to see a steady increase in real estate lending, the league said. Louisiana’s credit unions reported $1.4 billion in total real estate loans outstanding for the second quarter, which is a 3.8% increase over the first quarter and an 11.5% more than the same period last year. Total loans rose 3.1% for the quarter and 9.2% from this time last year. Yield on loans (annualized) was higher than the national average, 7.05%, compared with 6.30% nationally. Delinquent loans to total loans was below the national average, at 1.22% for Louisiana compared with 1.59% nationally. The state’s economy has remained healthy despite the national recession, and Louisiana's credit unions are no exception, the league said.

I Hate My Car Contest is clunkers alternative

 Permanent link
BURNSVILLE, Minn. (9/25/09)--US FCU and a Burnsville auto dealer have teamed up with an alternative to the expired "Cash for Clunkers" program. The "I Hate My Car Contest" extends beyond replacing only cars defined by the federal government as "clunkers." Earlier this month the Burnsville, Minn.-based credit union teamed up with Jeff Belzer's Chevrolet, Dodge, Kia dealership to launch the contest, which enables car owners to vent their frustration with their current vehicle in hopes of winning a new 2009 Chevy Aveo to replace their wretched ride. So far, in the first two weeks, the contest has generated 300 rants from disgruntled car owners and 2,700 visits to the contest's official website. US FCU and Belzer's also are offering discounts and I Hate My Car removable car clings so members can publicly profess their anti-love.

CU System briefs (09/24/2009)

 Permanent link
* LANSING, Mich. (9/25/09)--The Kalamazoo (Mich.) Chapter of Credit Unions hosted four state legislators for a legislative breakfast Sept. 14 at First Community FCU in Parchment (Michigan Monitor Sept. 21). Roughly 27 credit union representatives met with State Sen. Patty Birkholz (shown addressing attendees) (R-Saugatuck) and State Reps. Robert Jones (D-Kalamazoo), Larry DeShazor (R-Portage) and Tonya Schuitmaker (R-Lawton). Schuitmaker made a brief appearance before her legislative assistant addressed the group. Among the topics discussed: financial exploitation legislation, term limits, the state budget, the lottery and its contribution to education, and the House Speaker's healthcare proposal (Photo provided by the Michigan Credit Union League) … * ST. PAUL, Minn. (9/25/09)--The Minnesota CU Foundation (MNCUF) launched its new website earlier this month, with a new look, new features and a more navigable organizational structure. All functions of the foundation--including grant program summaries, application forms and e-contributions--are now online. MNCUF Chair Kristi Mukomela, president of Novation CU, noted the site serves as a one-stop shop" for contributors and grant applicants. Website visitors also can explore activities of two foundation committees, Minnesota Credit Unions for Kids and the Minnesota Family Involvement Council … * GREELEY, Colo. (9/25/09)--A Colorado woman convicted of murdering an employee of the Greeley branch of Colorado State Employees CU (now Credit Union of Colorado) is seeking a hearing to claim she had ineffective counsel during the trial. Shawna Nelson filed papers to drop her appeal of the first degree murder conviction in favor of the hearing. She is serving a mandatory life sentence for the murder of Heather Garraus outside the credit union. The murder occurred after Garraus' husband ended an affair with Nelson (Fort Collins Coloradoan Sept. 23) … * OCALA, Fla. (9/25/09)--A former branch manager of the Gainesville, Fla.-based Campus USA CU has been charged with taking more than $52,000 by creating false loans on a member's account and spending the funds. Michael Aubrey Groves, 32, Citra, is being charged with criminal use of personal identification information, offenses against intellectual property to defraud and grand theft. He was fired from his job in March (Ocala.com Sept. 24). The fraud apparently occurred from June 2007 through February 2009 …

Community CU conference to focus on hard-hitting issues

 Permanent link
MADISON, Wis. (9/25/09)--Credit unions attending this year’s Credit Union National Association (CUNA) Community Credit Union and Growth Conference can hear from credit union experts on hard-hitting economic, legislative and regulatory issues affecting credit unions. The conference will be held in Las Vegas Oct. 21-24. It targets not only community credit unions, but all credit unions looking to grow, according to CUNA. The conference is a combination of the YES Summit, the Reach Out! Conference, and the Community Credit Union Conference. This year’s theme is “Share the vision. Shape the future.” The conference will feature several hard-hitting sessions regarding core issues facing credit unions. For example:
* Bill Hampel, CUNA chief economist, will provide an economic update and its impact on credit unions during the general session on Oct. 22. * Gigi Hyland, National Credit Union Administration (NCUA) board member, will provide an update from NCUA. She is slated to speak during the general session Oct. 23; and * CUNA’s Mary Dunn, senior vice president and deputy general counsel, and Ryan Donovan, vice president of legislative affairs, will provide attendees with a legislative and regulatory update during an afternoon general session Oct. 23.
Related breakout sessions include:
* “Handling Problem Loans in this Economy,” by Matt Davidson, consultant, and Keith Reynolds, vice president of lending, CEFCU, Peoria, Ill.; * “Mergers and Future Implications for Credit Unions,” by Frank Drake of Smith Debnam Narron Wyche Saintsing & Myers LLP; and * On The Radar: Credit Unions 2010, George Towle, The Rochdale Group.
For more information, use the link.

Indiana league honors six individuals

 Permanent link
INDIANAPOLIS (9/25/09)--The Indiana Credit Union League recently honored six individuals for their contributions to the credit union movement.
Ann Garmon, president/CEO of Horizon One FCU, was inducted in the Indiana Credit Union League’s Credit Union Hall of Fame Sept. 11. Pictured are Garmon (left) and league board chairman George McNichols.
Lisa Schlehuber, president/CEO of Eli Lilly FCU, received the Professional Achievement Award from Indiana Credit Union League board chairman George McNichols at the league’s state convention Sept. 11.
Vicki Garrett, vice chairman of the board at Energy Plus CU, received the 2009 Leadership Award from George McNichols, Indiana Credit Union League board chairman. (Photos provided by the Indiana Credit Union League)
All recipients were honored Sept. 11 during an awards banquet at the Indiana league’s state convention. Ann Garmon, Horizon One FCU president/CEO, was inducted into the Indiana Credit Union Hall of Fame. Her credit union career spans four decades. Garmon also is president of the Combined Council of America’s Credit Unions and a board member of the Council of General Motors Credit Unions. Horizon One FCU is in Indianapolis. Lisa Schlehuber, president/CEO of Eli Lilly FCU, Indianapolis, received the league’s 2009 Professional Achievement Award. The award honors individuals for their professional accomplishments and commitment to the credit union movement. Schlehuber has been president/CEO of Eli Lilly FCU since January 2005. Vicki Garrett, board vice chair at Energy Plus CU in Indianapolis, received the 2009 Leadership Award. She has been a credit union official since 1975 when she became a volunteer member of the Supervisory Committee at Citizens Gas Utility CU, now Energy Plus CU. The league also honored three individuals with Emerging Leadership Awards:
* Michael Hostetler, market research manager at Finance Center FCU, Indianapolis; * Kevin Sparks, vice president and chief financial officer at Crane FCU, Odon; and * Matt Snively, senior vice president of sales and marketing at Eli Lilly FCU, Indianapolis.