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20 of households have student debt but CUs helping

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WASHINGTON and FARMERS BRANCH, Texas (10/1/12)--Nearly one in five U.S. households had college debt in 2010, double the debt in 1989 and up 15% from 2007, with the biggest burdens on the young and the poor, says a new study. But credit unions are helping out in several ways.

The fact that Money Mission also offers scholarship opportunities for high school seniors is what sold Coastal Community FCU President/CEO Carol Gaylord-Purdy on the program.

"We've wanted to offer a scholarship program for some time," she told the league, "but we've lacked the expertise, as well as the time and resources to develop one."  With a child in college, she knew the financial burden college can place on families.

"With minimal monthly cost, through Money Mission we are able to offer our members an opportunity to earn scholarship dollars, thereby providing some financial relief to families," she said. The more credit unions signing up for Money Mission, the more scholarship dollars are available, she said.

A+ FCU, a $955 million asset credit union in Austin, has a scholarship program and has also partnered with Austin Community College (ACC)  Student Life to offer what it says is the nation's first community college savings challenge, the Riverbat Savings Challenge, said the league.

The first 10 contestants have been chosen from more than 90 ACC students who applied. The contestants will compete for a $2,500 grant prize and other cash prizes.  The challenge begins this month and runs to March. To follow their progress as they work toward their goals, use the savings challenge link.

BofA sees need for more small-biz services

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MADISON, Wis. (10/1/12)--While some banks have maintained that there isn't a need for more small business loans and that credit unions shouldn't be given more opportunity to lend to small businesses--the Bank of America is hiring small-business bankers to work with that specific market, a sign that small businesses do need more service--and credit--from financial institutions.

The Charlotte, N.C.-based BofA said last week it will hire 130 small-business bankers throughout Florida to offer guidance for small-business owners. That's in addition to its previous announcement that it would hire about 1,000 small-business bankers nationwide, BofA said in a press release.

"Small businesses are the lifeblood of our local and national economy," said Robb Hilson, Miami-based BofA small-business executive. The comment echoes what credit unions have been saying all along, in their attempts to get more authority to offer small-business loans to help the economy. During the financial crises, many banks cut back business lending, while credit unions made loans to that market.

The bank, in a semi-annual study in May of small-business owners, said that 27% of Miami small business owners considered themselves as very financially savvy, but the remainder admitted they need help. "Small-business owners have complex financial needs that are unique to each industry and business," said Steve Turner, BofA Southeast region sales executive.

Many small-businessowners are challenged when it comes to understanding financial management, said a Florida-based publication, HispanicBusiness.com (Sept. 27), It noted that several other banks and credit unions also offer specialized service to small-business owners.

BofA's announcement comes amid bankers opposition to credit unions' push to get Congress to pass the Small Business Lending Enhancement Act, which would increase credit unions' member business lending (MBL) cap to 27.5% of assets, up from the current 12.25%.

Small businesses are struggling to get credit, and the Credit Union National Association (CUNA) estimates that raising the cap would mean small businesses could get $13 billion in additional loans that would help create more than 100,000 jobs, at no expense to the taxpayer.

Bethpage FCU to sponsor best of awards for small biz

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LONG ISLAND, N.Y. (10/1/12)--In efforts to grow its small-business lending and brand, Bethpage FCU in Long Island, N.Y., has become the name sponsor for the "Best of Long Island" awards presented by the Long Island Press.

The $4.8 billion asset Bethpage FCU--the biggest credit union in the state--signed a three-year deal to be the name sponsor of the awards (Long Island Business News Sept. 27).

Small businesses all over the area display Best of Long Island signs, so it's a great promotion to be a part of, Linda Armyn, Bethpage senior vice president, told the publication.

In addition to the awards sponsorship, the credit union intends to hire two teams of small-business lenders in the first quarter of 2013 and more aggressively market its services to small businesses, Armyn said.

Bethpage FCU has decided to "formalize" its small-business program--which wasn't a core element to its retail branching business before--and is investing a "couple of million dollars," into the effort, she added.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

Wisconsin opens state Fin. Lit. Award nominations

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MADISON, Wis. (10/1/12)--Credit unions in Wisconsin have a chance for recognition for their financial literacy efforts in the state. Nominations for the 2012 Wisconsin Financial Literacy Award will be accepted through Nov. 30, according to the Governor's Council on Financial Literacy.

Individuals or organizations may be nominated for the award, which recognizes efforts at promoting personal financial literacy in the state, according to the Wisconsin Department of Financial Institutions (DFI).

Judges will use these criteria in deciding the awards: innovative implementation; demonstrated measurable results; collaboration with partners; and a scope that is statewide or potentially statewide or focused on need-based groups.

Last year, three organizational winners involving credit unions were among the eight organizations and individuals receiving the award. They included:

  • Investor Education in Your Workplace, a program of the Wisconsin Credit Union League;
  • Money Mission, a money management simulation game originated by the league and offered to credit unions across the country in a program administered by the Credit Union National Association;  and
  • UW CU, Madison, Wis., which hosted free financial education seminars (News Now Dec. 27).
The Governor's Council will select recipients at its December meeting. The state DFI, through its Office of Financial Literacy (OFL), promotes financial literacy statewide. DFI Secretary Peter Bildsten is vice chair of the council, and OFL Director David Mancl is the council's executive director.

Equifax More stability in auto loans credit cards

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ATLANTA (10/1/12)--Auto lending balances and new accounts in the U.S. are increasing steadily, with the number of new accounts opened in the first half approaching pre-recession levels, according to credit bureau Equifax's latest monthly National Consumer Credit Trends Report.

Credit unions should take note of these lending opportunities.   

Auto lending is gaining strength, reflecting increasing demand for new cars, Equifax said. Year-to-date through June, total auto lending has reached $207 billion, a 13.7% increase over the volume during the same period in 2011.

"The average age of cars on the road today in the U.S. is the highest ever recorded, and consumers are ready to replace these older vehicles," said Equifax Chief Economist Amy Crews Cutts. "At the same time, the financial picture has improved sufficiently that we are seeing auto lending markets become facilitators rather than obstacles to meeting this demand, especially in the near-prime segment of the market that had all but ceased to exist during the worst of the financial crisis and recession," she added.

Sales of new cars and light trucks increased nearly 15% during the first half of the year, dominated by sales of smaller, more efficient and cheaper vehicles. During the first half of this year, auto lending at 10.7 million loans is the highest since 2007, when 11 million loans were opened.

Delinquency and write-off rates on auto loans and leases are well below levels at the start of the recession, Equifax said. Write-off rates in terms of dollars in August were one-third of what they were at the peak in March 2009 (2.1% versus 6.1%), while the percentage of auto account write-offs was about half of the peak volume (2.5% versus 5.2%). Write-off rates using both dollars and units exceeded 4% at the start of the recession.

Other credit highlights from the most recent data include:

Bank Credit Cards:

  • Nationally, bank credit card origination credit limits year-to-date through June increased more than 36% from their recession low, to $87.3 billion in 2012 from $55.5 billion in 2010.
  • The total number of bank credit card accounts exceeded 300 million for the first time since April 2010, a 28-month high.
  • While the amount of credit available--the difference between credit used and credit limits--has risen since February 2011, use rates continued to fall until May of this year, when they hit a fiv-year low of 22.1%.                                                                                                                    
  • Use rates rose to 22.4% and the amount of credit available was $1.87 trillion in August.
Retail Credit Cards:

  • Nationally, retail credit card origination credit limits year-to-date increased more than 15%, to $30.4 billion through June from $25.8 billion in 2010.
  • Retail credit card balances in August were more than $51 billion--a 33-month high.
  • Total retail credit card limits were at more than $340 billion through August--a 15% increase from May's $290 billion and the highest level in 27 months.
Student Loans:

  • New student loans increased more than 15%, to $30.3 billion year-to-date through June, from $25.6 billion in 2010.
  • Student loan balances increased throughout the recession and subsequent recovery, reaching more than $800 billion through August.
  • Student loan write-offs totaled $10.6 billion year-to-date through August, an increase of more than 10% from same time a year earlier--$9.5 billion in 2011.
  • The average amount of student loans was $9,467 in June--more than 67% greater than the recession low of $5,660 in 2008.
  • The average student loan size is increasing at a slower rate than overall student borrowing. The average single student loan in June was $5,701, compared with $4,126 in June 2008, with students seeking multiple loans to cover their education costs.

Maine league endorses 99 candidates

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PORTLAND, Maine (10/1/12)--The Maine Credit Union League has endorsed 99 candidates for the 2012 Maine House and Senate elections.

For the Maine House elections, the league endorsed 70 candidates--35 Democrats, 34 Republicans and one independent (Weekly Update Sept. 28).

For the Maine Senate elections, the league endorsed 29 candidates--17 Republicans, 11 Democrates and one independent.

The endorsements were made based on responses to a questionnaire, which had a 45% return rate from candidates; candidates' voting record, if applicable; and their relationship with credit unions.

Of the 99 candidates endorsed, 12 were current or former credit union board members, six of whom are still active.

All the endorsed candidates received letters from the league last week.

"Our list of endorsements again reinforces that we are a bipartisan organization that places a high priority on supporting candidates who support credit unions, regardless of their party," said John Murphy, league president. "This positions us well as working with both parties."

Oregon CU KASASA take-over county

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From left, Scappoose Dairy Queen employees Renee Vocana, Kaitlin Eazer and Martina Marie Rose Dick pose for a photo as part of St. Helens (Ore.) Community FCU "take-over," in which SHCU employees visit a local business to promote KASASA checking account products and reward the customers of the local business with a free product.
Scappoose (Ore.) High School student tellers Kyle Sammons (left) and Jacob Stafford (as Buddy Bear) help ring in the lunch crowd for the Fultano's Pizza take-over in Scappoose. (Photos provided by St. Helens Community CU)
ST. HELENS, Ore. (10/1/12)--St. Helens (Ore.) Community FCU (SHCU) and KASASA worked with local businesses in Columbia County this summer to stage a "take-over," where the credit union's employees visit a local business to promote KASASA checking account products and reward the customers of the local business with free product.

KASASA is a new brand of free, rewards checking accounts. SHCU members can choose the type of rewards--a high-interest rate of return or digital downloads from iTunes or Amazon.com. 

During the summer months, the $161 million asset SHCU and KASASA took over six local businesses: Columbia Theatre, Sunshine Pizza, Dutch Bros. Coffee in St. Helens and Scappoose,  Hometown Pizza and Fultano's Pizza in Scappoose.

During the take-overs, they rewarded patrons with more than $2,800 in movie tickets including a drink and popcorn, pizza lunches, ice cream treats and coffee. The local businesses taken over saw a boost in business, said SHCU.

"St. Helens Community FCU is one of the best financial institutions ever," said Sandra Western of Dairy Queen Scappoose, one of the businesses taken over.

SHCU and KASASA next plan to take-over the homecoming football games at St. Helens, Scappoose and Rainier High Schools. The first 250 fans to arrive at each game will be rewarded with a free stadium seat cushion and an entry to win an Apple iPad. The iPad will be given away during the third quarter.

Indonesian co-op reps get in-depth look at Minn. CUs

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ST. PAUL, Minn. (10/1/12)--In the spirit of the International Year of Cooperatives, Minnesota Credit Union Network (MnCUN) staff met with Indonesian cooperative representatives Tuesday to discuss government oversight, credit unions and industry growth.

Click to view larger image Minnesota Credit Union Network (MnCUN) staff met with Indonesian cooperative representatives Tuesday to discuss the growth and development of the U.S. and Minnesota cooperative movements. (Photo provided by Minnesota Credit Union Network.)
The meeting was part of the group's two-week tour of Minnesota and Wisconsin cooperatives, focused on learning about the U.S. government's role in regulating the co-op industry. The event tied into MnCUN's yearlong efforts to raise awareness of the International Year of Cooperatives and the impact that cooperatives have on society.

2012 was designated by the United Nations to be the IYC, with the theme "Cooperatives build a better world."

The Indonesian representatives, which included the adviser to the Indonesian Minister of Cooperatives and two cooperative experts, visited MnCUN to learn about the structure, development and growth of Minnesota credit unions. Citing the challenges facing the relatively young Indonesian cooperative movement, the Indonesian representatives described the country's desire to learn from cooperatives and credit unions in the U.S.

MnCUN staff provided an overview of the organization's role in helping the state's credit unions grow and thrive. Department managers highlighted the organization's work in governmental affairs, education, compliance and communications. Staff also outlined MnCUN's for-profit activities and the role they play in providing products and services to state credit unions.

Focusing on credit unions' interaction with the government, MnCUN representatives explained how credit unions are regulated at the state and federal levels. Staff described the compliance burden currently faced by credit unions and the ways in which MnCUN and Minnesota credit unions work to affect and change regulatory and legislative policies.

"Through this exchange, Minnesota and Indonesia--two places that are a world apart from each other--were able to share ideas and expertise and collaborate on the issues facing cooperatives around the world," said Mark D. Cummins, MnCUN president/CEO. "Visits like this one, and thousands of others like it around the world, demonstrate how the principles of cooperatives transcend across countries and cultures."

The Indonesian group's tour also included visits to the Credit Union National Association, World Council of Credit Unions, the Cooperative Network, Land O'Lakes, Stewart Grocery Cooperative and Landmark Services Corp.

Highmark only Homes for Heroes lender in region

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RAPID CITY, S.D. (10/1/12)--Highmark FCU, Rapid City, S.D., is the only lender in western South Dakota approved to provide home loans through Homes for Heroes, a program that provides rebates and discounts for military personnel, police officers, firefighters and registered nurses who are buying or selling a home.

The program is designed to help "real-life heroes" open the door to achieve their dream of home ownership. Some of the overall savings qualified applicants receive through this program include:

  • 25% of the gross commission paid to the Homes for Heroes affiliate company, whether the hero buys or sells, or both;
  • Discounted financing and closing fees charged by Homes for Heroes lender affiliates; and
  • Other real-estate related discounts available in some states.
"On the financing side, there are real dollar savings for qualified heroes," said Joanie Howland, Highmark FCU mortgage lending manager. "Specifically, Highmark FCU provides its Homes for Heroes applicants with free appraisal reports and discounted title closing costs. In addition, there could be savings in the amount of money needed for closing due to down-payment assistance options."