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CU System

CUNA Tech Council Hands Out Five Excellence Awards

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HOLLYWOOD, Calif. (9/25/13)--
Click to view larger image CUNA Technology award recipients for innovation in information technology (IT) are, from left: Linda Bodie, CEO, Element FCU, Charleston, W.V.; Trey Kelso, vice president of business solutions, Virginia CU Inc., Richmond; Andrew Chung, IT architect, GESA CU, Richland, Wash.; Glenn Carney, vice president of technical services, accepting the award on behalf of Sam Passer, vice president of applications, CommunityAmerica CU, Lenexa, Kan.; and Eric Kapusinski, network engineer, Motorola Employees CU, Schaumburg, Ill. (Photo provided by CUNA)
Five Awards of Excellence were handed out Monday by the CUNA Technology Council at its conference in Hollywood, Calif.
 
The awards recognize exceptional innovation in the field of information technology (IT). This year's winners were:
  • Linda Bodie, CEO of Element FCU, Charleston, W.Va.;
  • Trey Kelso, vice president of business solutions, Virginia CU Inc., Richmond, Va.;
  • Andrew Chung, IT architect for GESA CU in Richland, Wash.;
  • Sam Passer, vice president of applications for CommunityAmerica CU in Lenexa, Kan.; and
  • Eric Kapusinski, network engineer for Motorola ECU in Schaumburg, Ill.
 
The conference, held in conjunction with a conference of the CUNA Operations, Sales and Service Council, ends today.

CU System Briefs (09/25/2013)

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  • ST. PAUL, Minn. (9/25/13)--Longtime volunteer and credit union advocate Allan J. Brennan was recently designated a Credit Union Builder by the Minnesota Credit Union Foundation. The honor was bestowed upon him by Postal CU (PCU) in Woodbury, Minn., where he served as a volunteer for more than five terms in a 17-year span. Brennan retired from the PCU board earlier this year. A PCU member since 1952, Brennan joined the supervisory committee in 1995 before being elected to his first term on the board of directors in 1996. Brennan served as chairman of the technology committee and was a member of the asset and liability, and policy committees. He joins 21 other individuals who have been honored the past six years with MnCUF's Credit Union Builder Award. The names of the recipients and the contributing credit unions are permanently displayed in MnCUF's lobby ...

Hispanic Heritage Month: Growth About Learning, Inclusiveness

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AURORA, Colo. (9/25/13)--As credit unions mark Hispanic Heritage Month, Sept. 15-Oct. 15, Fitzsimons FCU, Aurora, Colo., is entering the second stage of a three-phase, five-year process to grow its membership in a way that better reflects the makeup of its local population.
 
The Aurora, Colo.-area has about a 26% percent Hispanic population, according to Fitzsimons CU President/CEO Sandy Neves. In 2011, Fitzsimons FCU's membership was about 12% Hispanic members.
 
"We just decided not only is it a business imperative, but we also wanted to serve the underserved," Neves told News Now.
 
Working with Coopera, a Hispanic growth firm that serves credit unions, Fitzsimons FCU developed on a five-year plan to more closely integrate the Hispanic marketplace into its membership.
 
"One of our mottos is, 'This is a marathon, not a sprint," Neves said. "It is going to take time, and you have to do it right. I'm not a patient person. I want things overnight, but this is a learning process, and it involved everyone in our credit union."
 
In the first, discovery, stage of the process, the credit union laid the groundwork for serving the Hispanic marketplace. This 18-month process included cultural education, budgeting, training and new product development. The credit union also added a Hispanic advisory board.
 
The first stage "doesn't net us anything," Neves said. "It's sheer work and commitment. We surveyed at the board level, the executive level, and the staff level to determine our level of commitment, then we trained in-house, developed new products and really took the time to learn more about our community."
 
Among new products the credit union offers Hispanic members is a checking program, a payday alternative loan, reloadable debit cards, remittance transaction, a noninterest-bearing savings account for members without Social Security numbers, financial education and a credit builder program.
 
Fitzsimons FCU also hired more bilingual employees. "We primarily hired them through attrition," Neves said. "We made a conscious decision to hire bilingual employees."
 
This year, Fitzsimons entered the second, emerging stage, in which it has begun serving the Hispanic marketplace. "Now we hope to see membership growth," Neves said. "We also hope to decrease the average age of our membership and increase our loan volume."
 
The credit union has partnered with a local crisis center to provide financial education to affected families. "We have also reached out to church groups and met with the Mexican consulate," Neves said.  "Little by little we are developing trust in the community."
 
In developing that trust, Fitzsimons will begin to reach the third, or best practices stage of its Hispanic outreach strategy: Being recognized as the preferred financial institution within the local Hispanic market.
 
The admittedly impatient Neves has learned not to expect overnight results. But she believes Fitzsimons is on the right track because of its organization-wide commitment to understanding and inclusiveness.
 
"The CEO has to guide this, the board has to be behind it every step of the way," Neves said. Everything flows from that: My executive team, IT, marketing, everyone is represented. Our Hispanic employees also advise us. We are more educated at every level of the organization."
 
Removing barriers, fostering service excellence and raising awareness about the value credit unions provide their members and communities are the foundation for the Credit Union National Association's, state credit union leagues' and credit unions' Unite For Good campaign toward a vision in which Americans choose credit unions as their best financial provider.

CO-OP Awards 16 Scholarships To CUNA's Community CU Growth Conference

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MADISON, Wis. (9/25/13)--CO-OP Financial Services has awarded 16 credit union professionals with scholarships to attend this year's CUNA Community Credit Union & Growth Conference (CCUC).
 
This is the fourth consecutive year that CO-OP has sponsored scholarships for the conference, which will take place Oct. 8-11,in Uncasville, Conn.
 
"Over the last four years, individuals from dozens of credit unions that would not otherwise be represented have been able to attend CCUC and apply conference takeaways to directly strengthen the credit union movement," said Todd Spiczenski, CUNA senior vice president, Center for Professional Development. "Thanks to CO-OP Financial Services' continued generosity, the CCUC message will be once again amplified by the insight and dedication of this year's scholarship winners."
 
The CCUC provides tools for credit unions to put their ideas into action and find new strategies to drive membership growth. Attendees will create ready-to-implement action plans to help their credit union reach its full potential. CUNA also will present four outstanding credit unions with the 2013 Community Credit Union of the Year Award.
 
Scholarship recipients include:
  • Megan Armstrong, Saratoga's Community FCU, Saratoga Springs, N.Y.;
  • Jim Bounds, Coastal Community and Teachers CU, Corpus Christi, Texas;
  • Eric Bruen, Desert Valleys FCU, Ridgecrest, Calif.;
  • Debbie Bullock, Martin FCU, Orlando, Fla.;
  • Asaf (Asi) Carmeli, Scient FCU, Gordon, Conn.;
  • Phillip Dunaway, Land of Lincoln CU, Decatur, Ill.;
  • Clayton Fuchigami, Maui FCU, Kahului, Hawaii;
  • Sherry Holliman, Northeast Arkansas FCU, Blytheville, Ark.;
  • Michael Mayhew, Baltimore County Employees FCU, Towson, Md.;
  • Nancy Montie, Besser CU, Alpena, Mich.;
  • Deloris Ransom, Salem Baptist FCU, Jersey City, N.J.;
  • Lynn Sabatino, Members CU, Cos Cob, Conn.;
  • Nancy Sieller, Torrington (Conn.) Municipal & Teachers FCU;
  • Laura Sorensen, SageLink CU, Durand, Mich.;
  • Carla Waldo, Mills42 FCU, Lowell, Mass.; and
  • Michael Waylett, Vision Financial FCU, Durham, N.C.

CUAid Activated For Colorado Flood Victims

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MADISON, Wis. (9/25/13)--The National Credit Union Foundation Tuesday activated the online disaster relief system, CUAid.coop, to raise funds for credit union people in Colorado affected by flooding earlier this month.
 
Days of record-setting rainfall and flooding had forced several Boulder, Colo.-area credit unions to temporarily close branches Sept. 13.
 
Credit union supporters in every state can make donations at www.cuaid.coop, said NCUF.
 
CUAid is the only program of its kind that enables credit union employees, volunteers, and members, as well as credit unions and credit union organizations across the U.S., to contribute directly to support other credit union people.
 
"Colorado has been severely affected by the recent Colorado floods," said Dan Santangelo, executive director of the Mountain West Credit Union Foundation.
 
"We, at the Mountain West Credit Union Association, initially didn't think we were going to need much CUAid funding, but after we started receiving inquiries, we were able to see the need from credit union members who could use a helping hand. It is estimated that more than 10,000 credit union staff, volunteers, and members are in need of some type of assistance."
 
To donate, use the resource link.
 
"To help alleviate the devastating effects of this disaster, we encourage credit union leaders all across the country to use CUAid.coop as a channel to collect donations from their employees, volunteers, and members," said Christopher Morris, NCUF director of communications.
 
As donations are posted through CUAid.coop, NCUF will coordinate with the Mountain West Credit Union Foundation in the disaster area to distribute money efficiently to affected credit union employees and members.  NCUF said 100% of the donations through CUAid goes to credit union disaster relief. In the event that all donations are not used for Colorado Flooding relief, NCUF will transfer unused funds to its "General Disaster Relief fund" for future disaster relief efforts.
 
CUAid was developed by NCUF in cooperation with state credit union foundations, state credit union leagues, and the Credit Union National Association's Disaster Preparedness Committee in 2006.
 
Organizations and individuals can use a variety of CUAid Web buttons for their websites.  Use the links to the donation form and to easily linkable buttons for the effort.
 
Last week the National Credit Union Administration announced it had activated its disaster policy during the weekend of Sept. 14-15 and encouraged credit unions in the flooded areas to make prudent loans with special terms and reduced documentation for members affected by the disaster. See News Now story, NCUA Activates Disaster Relief Policy After Colorado Flooding.

Directors Must Guide Tech Planning To Capture Market Share

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MADISON, Wis. (9/25/13)--For many firms, mastering digital technologies might be the key to long-term survival and success, according to the September issue of Credit Union Directors Newsletter from the Credit Union National Association.
 
Building directors' information technology (IT) expertise allows boards to guide management in technology strategies and initiatives, a June report from McKinsey & Company illustrates.
 
Whether IT savvy or not, directors should review these questions as a starting point for shaping a fruitful conversation with management.
  1. How will IT help the credit union compete? Technology erodes boundaries between industries and providing opportunities for "attacker" models, said the publication.  In financial services, online consumer-payment products such as Square--a mobile app and device that enables merchants to accept payments--are challenging traditional payment solutions. For many traditional retail firms, technology has become a race to harness social media and location-based services in hopes of capturing market share. The credit union's executive team must identify emerging competitors and explain how technology helps it succeed against traditional and new competitors.
  1. What will it take to exceed members' expectations? Consumers--including credit union members--have been conditioned by e-commerce leaders like Amazon and Apple to expect an ultra-convenient, personalized experience. Simply meeting consumers' enhanced expectations can be a major effort for organizations that weren't born digital. Credit unions must automate end-to-end sales and service processes so members can transact in real time and in an error-free digital environment. Make sure your management team has clear plans for how to exceed consumer expectations.
  1. Do the credit union's plans link technology to improved performance? By seizing certain opportunities and mitigating emerging threats, firms can dramatically improve business performance. And while technology expenses can be high, they're relatively small compared with the potential to boost the credit union's operating performance by driving revenues and reducing overall costs. Ultimately, the credit union needs an integrated plan that shows how it will beat the competition and uses information across a multiyear horizon--not simply a revised annual IT budget.
  1. Are IT investments aligned with opportunities and threats? A dynamic IT portfolio should clearly reflect business opportunities and threats. Balance short-term opportunities such as upgrading digital channels, medium-term platform investments such as member databases, and carefully chosen longer-term bets--for instance, piloting new, digitally enabled business models. Review and rebalance the IT portfolio frequently; assumptions can change quickly. Many companies, for instance, recently cut investment in the Internet channel because customers switched to mobile apps. Also, manage the portfolio to keep execution risk in an acceptable range. On average, large IT projects run 45% over budget and take 7% longer than expected while delivering 56% less value than predicted.
  1. How will IT improve operational and strategic agility? IT has a significant effect on operational business agility--for example, time to market for new products--as well as on strategic business agility. IT's ability to rapidly design and implement changes to systems, at low cost and with minimal risk, underpins business agility. Increase IT agility by changing the systems landscape, improving data quality, optimizing IT delivery processes, and building flexibility into sourcing arrangements. Leading businesses measure and manage both business and IT agility, ensuring that the business can respond competitively.
  1. Do the credit union's IT systems deliver full value? Technology alone delivers no value. A clear strategy, the right technology, high-quality data, IT-literate executives and lean processes combine to create value. Any weak link in this chain will lead to poor value delivery from IT. For example, a new IT system to support cross-selling might not boost revenues unless management improves data quality, trains staff appropriately, and realigns sales processes and incentives. Ensure that the credit union develops the capabilities to drive full value from existing IT systems.
  1. How does the credit union measure IT accountability? Cybersecurity is a growing IT threat, but it's only one category of technology-related risk. Few executives understand the entire risk landscape, and many firms fail to measure and reduce IT risk. A comprehensive system for managing IT risk addresses the root causes, including inappropriate technology, incorrect policies, poor processes, and insufficient oversight. Determine who's responsible for overseeing all areas of IT risk.
As credit union executives work through these questions, they also must ask if the credit union is making the most of its technology story. Interest will rise among members and consumers as it goes digital. Be ready to communicate the benefits of the credit union's IT initiatives through well-timed external messages.

NWCUA Touts CU Difference, Defends Tax Status On Fox Business

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SEATTLE (9/25/13)--Credit unions' not-for-profit cooperative structure and their tangible value to members were highlighted in a Fox Business interview Tuesday with Northwest Credit Union Association President/CEO Troy Stang, who discussed the credit union difference and defended the preservation of credit unions' tax status.

Click to view larger image Click for larger view
Adam Shapiro, the "Business News" anchor in the segment entitled "Credit Unions Vs. Banks" noted that credit unions have 95 million members who have deposited $1 trillion--about 6% of all consumers' deposits in the nation's financial institutions--in credit unions.  With tax reform, banks have renewed their push to eliminate credit unions' tax status.
 
"Credit unions are not-for-profit cooperatives, and as member-owners, each member--or 95 million members--would be impacted in their own wallets" if credit unions' federal corporate income tax exempt status were eliminated, Stang said. "The benefits of the cooperative structure are returned back to members and [taxing credit unions] hits not only members in their wallets" but wallets "across America," he said.
 
The anchor pointed out that his research indicated that credit unions provide more competitive rates, offer more credit opportunities and provide services with low fees.
 
"To understand a credit union is really to understand its structure and the real tangible value" to members, said Stang who noted that value amounts to $120 per American member household.
 
Taxing credit unions "would certainly impact the margins of operating a credit union" and thus the profits returned as benefits to members, he said, adding, "Credit unions do pay many forms of taxes such as payroll taxes and real estate taxes that support the local economy."  The amount that would be collected if credit unions lost that status in an attempt to deal with the federal deficit would amount to "enough to run the federal government for about an hour," Stang said.
 
He also noted that "banks certainly would be interested in not having any competition on Main Street," but that "in America, it is very beneficial to have diversity in our financial landscape."
 
The program also reached out to the American Bankers Association but was still waiting on a response, said the anchor. To view the segment, use the link.
 
Credit unions and members will continue to make their voices heard on the tax status as part of the Credit Union National Association's and the leagues' Don't Tax My Credit Union grassroots campaign. They will conduct a virtual Don't Tax rally online on Oct. 2. Use the link for more information.

Dykstra Tells Council: Find Ways To Ignite Relevance

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HOLLYWOOD, Calif. (9/25/13)--
Click to view larger image Diana Dykstra, CEO of the California and Nevada Credit Union Leagues, addressed Tuesday's general session of the CUNA Technology Council and the CUNA Operations, Sales & Service Council in Hollywood, Calif.
"Your world is changing very quickly, and you must continually look for ways to remain relevant to members and potential members," Diana Dykstra, CEO of the California and Nevada Credit Union Leagues, told attendees of a combined conference of the CUNA Technology Council and the CUNA Operations, Sales & Service Council Tuesday morning
 
The conferences, which began Sunday in Hollywood, Calif., end today.
 
"Sometimes we spend too much time focusing on the way things were and not enough time thinking about what's coming," Dykstra said. "Baby boomers helped credit unions grow, but they're deleveraging now and they're not going to become net borrowers again. They're done. Today's net borrowers are age 18 to 34, but that age group is under-represented among credit union members. We have to do something about that," she added.
 
"Gen Y is 78 million strong, and they represent your future borrowers," said Dykstra, "but 71% of Gen Y have no idea what a credit union is, and over half of the unbanked belong to Gen Y. This generation represents a tremendous opportunity for credit unions, but a lot of younger consumers just don't want relationships with traditional financial institutions.
 
"Mobile banking is growing 68% a year," said Dykstra. "It represents the greatest opportunity for credit unions and the greatest threat. You must offer your members seamless access across all delivery channels. Your members won't tolerate disjointed delivery channels.
 
Click to view larger image Representatives from 15 technology companies who gave seven-minute "speed demos" of their products and services during the CUNA Technology Council conference this week in Hollywood, Calif., took the stage Tuesday as attendees voted on the Best of Show. (Photos provided by CUNA)
"Branch traffic declined for the first time in 2012," she said. "About 80% of consumers now visit a branch only once per quarter. And their top three reasons for visiting a branch are problem-resolution, to execute a process that's too complex to execute online, and to physically sign a document."
 
Also on Tuesday, four technology companies made seven-minute presentations or "speed demos" about their products. Five companies did the same in Monday's speed round. Tuesday's presenters included:
  • Michael Hall of Buzz Points (buzzpoints.com), a merchant-funded rewards program that integrates with social media platforms to increase consumer engagement;
  • John Levy and Michael Ball of IMM, which offers e-signature, workflow, and document solutions;
  • Jason Early and Shawn Swanson of EVault, which employs a cloud-based solution to offer credit unions data back-up and recovery services; and
  • Chuck Gulledge of OnApproach, who held up a copy of the book "Money Ball" to illustrate how his company can help credit unions manage data and reporting issues.

Council Speaker: Hispanics Represent CUs' Largest Growth Opportunity

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HOLLYWOOD, Calif. (9/25/13)--"Hispanics are the largest, fastest-growing, youngest, and most underserved ethnic group in the U.S.," said Miriam De Dios, CEO of Coopera, at the CUNA Operations, Sales, and Service Council meeting in Hollywood, Calif., on Monday.

Click to view larger image At the CUNA Operations, Sales, and Service Council meeting Monday in Hollywood, Calif., Miriam De Dios, CEO of Coopera Consulting, said many credit unions are seizing the opportunity to serve the nation's largest, fastest-growing, youngest and most underserved ethnic group--Hispanics. (Photo provided by CUNA)
"One out of six U.S. residents is Hispanic, but by the year 2050, one out of three U.S. residents will be Hispanic," said De Dios. "About 50% of Hispanics are either unbanked or underbanked. And their average age is 27. Hispanics are clearly credit unions' largest growth opportunity."

And many credit unions are seizing that opportunity. Over an 18-month period, a group of Coopera clients experienced 25% Hispanic membership growth, 47% growth in Hispanic checking penetration and 7% growth in Hispanic lending penetration.

De Dios encouraged credit unions to focus on both first- and second-generation Hispanics. "That's important because the first generation is in the workplace and earning income and is more likely to be unbanked or underbanked," she said. "The second generation, however, learns its financial behaviors from the first generation, and the second generation still needs to connect to the culture."

She said it was important to distinguish between "acculturation" and "assimilation." Acculturation refers to the preservation of one's birth culture and the addition of another culture, becoming "bicultural." Assimilation refers to the replacement of one's birth culture with another.

"Hispanics are creating a new model in which they are more likely to create a bicultural and bilingual identity," says De Dios.

The CUNA Operations, Sales, and Service Council and CUNA Technology Council are meeting jointly in Hollywood through Wednesday. Watch News Now and Credit Union Magazine for updated coverage.

Mortgages In Ark., Okla., Texas CUs Top $3.3B

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FARMERS BRANCH, Texas (9/25/13)--Credit unions in Arkansas, Oklahoma and Texas completed more than $3.3 billion in mortgage transactions during the first six months of 2013, according to the Cornerstone Credit Union League.

During 2012, credit unions in the three-state area wrote nearly $6.2 billion worth of real estate loans, said Rick Grady, league vice president of research (Leaguer Sept. 24).

"Given the increased pace in mortgages, it appears that volume will be surpassed in 2013," Grady said. "This excludes the peak buying months of July and August, data that will be compiled after the close of third quarter. Together, credit unions in the tri-state area manage over $18 billion in real estate loans."

Rick Pustejovsky, mortgage lending manager at FirstLight FCU in El Paso, Texas, told the league that in the past four months, his credit union saw a significant peak in mortgage loan applications.

"With interest rates starting to climb, consumers who have been sitting on the fence are now jumping into the real estate market because they want to take advantage of low interest rates while they're still available," Pustejovsky said.

While the purchase volume has increased dramatically, mortgage refinancing at the $837 million asset credit union has decreased, Pustejovsky said. He noted that this time last year, 40% of the mortgage refinances the credit union made were equity cash out. This year, less than 10% have been equity cash out.

"Property values took a real hit in the economic recession, so using the house as an ATM machine hasn't been an option for many homeowners," he said.

Pustejovsky, who is on the board of the Texas Credit Union Real Estate Network, said real estate lending is an opportunity many credit unions miss.

"From my perspective, more credit unions aren't actively engaged in real estate lending because they don't understand the benefits of offering this service, or they're concerned about the risks," he explained. "The key is having someone on staff who is experienced in handling your mortgage portfolio."

Another challenge is that realtors don't realize that credit unions are in the mortgage business, Pustejovsky said.

"But it's a problem that can be solved," he added. "I spend a great deal of time educating local realtors of what we can offer their clients."

See related News Now story in Market News: "FHFA: House Prices Up 1% In July."

Michigan Modernization Bill Brings Banks Vs. CUs Debate

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LANSING, Mich. (9/25/13)--A Michigan bill that would modernize the state's Credit Union Act is being debated in the state's legislature and has drawn the attention of banks.
 
The proposed bill--Senate Bill 496--would allow credit unions to have a broader field of membership beyond select employee groups, which advocates say would create more competition with other lenders (Ludingtondailynews.com Sept. 24).
 
Credit unions, by design, have always offered the same services that banks do, David Adams, president/CEO of the Michigan Credit Union League, told the paper. Although it would update the Credit Union Act, Senate Bill 496 would not significantly expand credit unions powers, but rather it would provide regulatory relief to help credit unions remain competitive and give them more flexibility, Adams added.  
 
However, Michigan banks oppose the bill, claiming that credit unions are attempting to become more like banks by going beyond their traditional fields of membership and saying that credit unions should pay taxes if their membership expands, said the newspaper.  
 
State regulators are pushing the membership-qualification changes, because regulators see no value in approving membership groups anymore, Adams told the paper.
 
Michigan likely would not make credit unions pay business taxes because they then would switch to federal charters, the bill's sponsor Gerald Van Woerkom, a Republican state senator from Norton Shores and vice chairman of the state's Banking and Financial Institutions Committee, told the paper.
 
To read the article, use the link.