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Contactless debit mobile use aim to attract members

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BOSTON (9/8/09)--Attracting new members, especially younger ones, remains a critical challenge for more than half of credit unions, says a recent study. As a result, some credit unions are altering their marketing strategies and testing products such as contactless debit cards and mobile banking services. More than 55% of credit unions have trouble attracting new members, according to a report by Boston-based Aite Group LLC. They are testing innovative products in hopes of attracting Gen Y consumers--the 76 million consumers ages 29 to 33 (ATM & Debit News Sept. 3). In January, PSCU Financial Services, a credit union service organization (CUSO), launched its contactless debit card a week after it announced it would resell mobile-banking services to its member credit unions. More credit unions may choose to convert to contactless debit cards now that huge merchants such as Best Buy and Home Depot accept their payments, Ron Silvia, PSCU director of debit and ATM product services, told the publication. Like PIN-debit, contactless cards have started out slow because of the investment. But once the return on the investment is realized, merchants seem to be moving swiftly to them, said Silvia. Gen Yers would like contactless payments because they like instant gratification. When they check out, they want to do so fast, Silvia said. CO-OP Financial Services recently signed partnership agreements to promote mobile banking--something that is popular with Gen Yers--to the credit unions it serves. CO-OP told ATM & Debit News that credit union services need to be more relevant--credit unions can't be the parents' credit union and stay relevant to the Gen Yers. CO-OP is also piloting contactless debit card products with two credit unions and has the infrastructure to process such transactions, said Kim Hester, CO-OP Financial executive vice president of network services. According to Aite, credit unions studied say they are increasing their social networking marketing through Facebook and Twitter to attract new members. Eighteen percent of credit unions surveyed said using social networking was a high priority, while 32% said they were considering it.

CUNA Mutual acquires crop insurer

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MADISON, Wis. and AMARILLO, Texas (9/8/09)--CUNA Mutual Group announced today it has reached agreement with Producers Ag Insurance Group (ProAg) to become sole owner of the multi-peril crop insurer, serving farmers and agricultural producers nationwide. CUNA Mutual said the acquisition with the Amarillo, Texas-based insurer will:
* Support CUNA Mutual’s growth strategies and diversify the risk the company insures; * Enhance CUNA Mutual’s flexibility and financial strength while enabling ProAg to continue to expand its business; and * Support ProAg’s growth objectives. ProAg will operate as a stand alone subsidiary of CUNA Mutual.
“This acquisition builds on the initial investment we made in ProAg in 2007,” said Jeff Post, President /CEO, CUNA Mutual. “It in no way affects our commitment to credit unions. For us to continue to strengthen and diversify our financial position, we need to identify new avenues for growth. “In looking for new opportunities to build on our expertise and continue to strengthen our financial position, crop insurance and our recent acquisition of CPI Qualified Plan Consultants were natural fits,” added Post. “These acquisitions build off our core competencies, help diversify our business, and provide revenue streams that give us flexibility to invest and grow in the future.’’ CUNA Mutual noted its relationship with ProAg began in 2006 when it began serving as the lead reinsurer for ProAg as a direct writer of crop insurance. In 2007, CUNA Mutual acquired a minority ownership position in ProAg. During its partnership with CUNA Mutual, ProAg since 2006 has grown from a 70-employee company doing business in 25 states to a 400-employee company serving more than 40 states. ProAg is on pace to generate more than $530 million in premium in 2009, CUNA Mutual said. “ProAg has been the fastest-growing crop insurer this decade,” said ProAg Chairman/CEO Ben Latham. “CUNA Mutual’s support of our growth as a reinsurer and minority shareholder, as well as their commitment to our way of doing business, makes them the natural provider of the institutional support we need to reach our goals of becoming a market leader.” Crop insurance protects farmers from financial losses that result from natural causes such as drought, excessive moisture, hail, wind, frost, insects and disease. Multi-peril crop insurance is an $8 billion industry in the U.S.

Teacher 13 wins Landmarks Biz Kid contest

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NEW BERLIN, Wis. (9/8/09)--A thirteen-year-old teacher has been named the grand prize winner in Landmark CU’s Biz Kid$ Essay Contest for young entrepreneurs age 6-14.
Megan Baker, 13, was the recipient of a $500 grand prize for Landmark CU’s Biz Kid$ essay contest. From left are Ron Kase, Landmark CU president; Maureen Bradley, Milwaukee Public TV Director; and Baker. (Photo provided by Landmark CU)
Megan Baker received a grand prize of $500 from the New Berlin, Wis.-based credit union. Baker wrote about teaching kindergarten readiness classes and other subjects at her Jump Ahead Summer Preschool. She earns about $80 a week. Four runners-up who received $100 are:
* Emma Landowski, 14, Kewaksum, who sells handmade scarves and bags; * Dillon Muth, 14, Palmyra, who sells natural meats; * Emma Lowe, 8, Grafton, who sells soap and air fresheners; and * Bethany Buikema, 11, Elkhorn, who sells decorated flip-flops.
Three honorable mentions were given to:
* Gloria Grzybowski, 11, Brookfield, who runs a jewelry-making business; * Morgan Laufer, 12, Watertown, for her Scent Sachet business; and * Michael Misorski, Hales Corners, for his MSJ Lawn Services.
The entries were judged on success of the youth’s business, creativity, originality, and the organization and legibility of submitted materials, the credit union said. Landmark has more than $1.4 billion in assets. The credit union is also a sponsor of the Emmy-awarded television series, BizKid$.

Lockheed L.A. Police collect contributions for fire victims

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BURBANK, Calif. (9/8/09)--Lockheed FCU announced that its branches in Southern California will accept contributions to help the Fire Family Foundation until Friday. The collection will help families of two firefighters who were killed Sunday while fighting wildfires in California. L.A. Police FCU, Los Angeles, is also accepting contributions to the fund. The firefighters are Arnaldo Quinones, 35, and Tedmund Hall, 47. Lockheed will give $1,000 to the fund. Members can donate money at any of the credit union’s 10 branches. The Fire Family Foundation (FFF) announced Friday that funds are being made available to assist the victims of the fires. “When you have lost everything, assistance in any amount helps the victims get back on their feet. Firefighters support our communities every day, and now is the time to support them and the victims who have lost their homes and belongings,” said FFF Board Member Pat Engel. On Friday, Bloomberg News reported that the Los Angeles County sheriffs were seeking a suspected arsonist behind the wildfire. The “Station Fire” has burned an area the size of Chicago in the foothills and canyons north of Los Angeles. Besides killing two firefighters, the blaze has destroyed 96 buildings. As of Friday, the fire was about 42% contained.

Deputies help Florida tellers prepare for heists

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TAMPA, Fla. (9/8/09)--Sheriffs’ deputies in Pasco County, Fla., formed a coalition to help prepare tellers at credit unions and other financial institutions in the area to deal with attempted robberies. The Financial Institution Security Coalition of Pasco County staged a robbery Wednesday at Suncoast Schools FCU in Tampa, Fla., to show about 40 area financial-institution employees how to respond to armed robbers who wear disguises, wave weapons and yell out demands (Tampa Tribune Sept. 4). Since the coalition’s inception 18 months ago, the sheriffs’ major crimes division has regularly met with area financial institutions, coalition spokesman Kevin Doll told the newspaper. “We prepare them about what to look out for,” Doll told the paper. “When it happens, a lot of times [the teller] is in shock about being robbed, so when [law enforcement] asks them questions later, they don't know what to tell you. We’ve had suspects go from white to black, male to female. Of course, some of that is due to the disguises [robbers] wear.” There are three basic types of financial-institution robbers, Sheriff’s Sgt. Jim Sessa told the paper. Those who wear disguises, those who use weapons and “the note passer”--which is the most common in the Pasco area, he added. Employees who are taught a procedure and told what to look for in a robbery situation will have more confidence and be able to give authorities more factual and useful information, Sessa told the paper. Technological advances and working with the Federal Bureau of Investigation have helped the sheriff’s office solve more financial-institution robberies, he added.

Invest in America adds Allied Van Lines

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LIVONIA, Mich. (9/8/09)--The Invest in America program, which offers credit union members discounts on select vehicles at select automakers, now includes Allied Van Lines and its agent Carey Moving and Storage. Last week, Invest in America announced that it had partnered with Thor Industries, a recreational vehicle manufacturer. Invest in America offers discounts on vehicles from General Motors and Chrysler. Ford Motor Co. also is undergoing a pilot with the program. The Allied discounts include a minimum 60% off interstate moves and savings on intrastate full-service moves and storage. Credit unions also can take advantage of enhanced transit times, expedited claims settlements, and complementary pairs and sets valuation protection--which means that if a piece of a furniture set is broken, Allied will replace the whole set, said CUcorp. “We hope that Allied’s credit union member discounts will make things easier for the many families who may need to relocate in this tough economy,” said Bill Lyon, Allied vice president and general manager. David Adams, CEO of CUcorp, an arm of the Michigan Credit Union League that facilitates the Invest in America program, said the partnership will give credit union members “access to moving services that are the equivalent of flying first class.”

Iowa CUs benefit from serving Hispanics

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DES MOINES, Iowa (9/8/09)--Jose Francisco Batres and Martha Alarcon moved to the U.S. from the Mexican state of Veracruz six years ago. They put in 14-hour days at a Des Moines restaurant. They also became active members of Village CU, which serves anyone working and living in Polk and surrounding counties.
Click to view larger image Village CU members Jose Francisco Batres, center, and Martha Alarcon, right, are saving up for a restaurant and to pay for the education of their daughter, Nayeli, left.
The couple joined VCU to send money home to Mexico using World Council of Credit Unions' (WOCCU) international remittance program, IRnet, a service offered through credit unions by the for-profit WOCCU Services Group. The credit union's fees were lower and the service friendlier than at the large commercial bank the couple previously patronized. Eventually Batres and Alarcon opened a savings account so they could save enough money to educate their daughter Nayeli and one day open their own restaurant. The pair also joined VCU's Hispanic Advisory Group to help the credit union increase its membership penetration deeper into Des Moines' growing Hispanic community. VCU quickly became one more Iowa credit union to see the value in providing services to this rapidly growing demographic. "The Iowa Credit Union League (ICUL) believes credit unions have a huge opportunity to help solve the current economic crisis by serving the underserved Hispanic market," said Patrick Jury, league president/CEO. "Hispanics demonstrate a high work force participation rate, increasing household income, collective purchasing power and booming entrepreneurship, all elements that will help credit unions drive membership, portfolio and asset growth." ICUL in 2006 formed Coopera Consulting to help the state's credit unions better serve Iowa's Hispanic market, Jury said. Coopera's success has led to additional work with credit unions or credit union systems in Louisiana, Nebraska, New York and Oregon, and most recently, with Credit Union National Association to develop a credit union strategy to serve Hispanics nationwide.
Click to view larger image Discussing the advantages of serving Hispanic members are, from left, Patrick Jury, Iowa Credit Union League president/CEO; Brian Branch, World Council of Credit Unions executive vice president/chief operations officer; and Murray Williams, Iowa league chief operations officer. (Photos provided by the World Council of Credit Unions
"The work that Coopera has done with Iowa's credit unions has helped them reach out effectively and serve these communities. Across the U.S., we have seen Coopera's positive impact on credit unions seeking to improve their services to Hispanics," said Brian Branch, WOCCU executive vice president/chief operations officer. "Success is determined by how well credit unions understand and adjust to Hispanic cultural elements that contribute to their member loyalty. Coopera is a great resource for serving Hispanics and providing cultural sensitivity that can result in a groundswell of new member applications," said Branch. Like VCU, Des Moines Metro CU (DMMCU) has benefited from serving the city's Hispanics. It had been losing members as the city's limits expanded westward. After a demographic analysis, DMMCU discovered a large population of working class Hispanics and Sudanese in the downtown neighborhoods near the credit union. The groups were not being served. The credit union reformulated its marketing mix to include Spanish radio stations and publications. It also offered credit-building loans starting at $500 to help new immigrants establish credit and gain a foothold in the local economy. Membership grew, and the credit union found itself in nontraditional services, including sending remittances through WOCCU's IRnet. Credit union staff even helped one couple sort out purchase problems with a local auto dealership as part of their auto loan application and another member cope with identity theft. The extra effort has been worthwhile, said Traci Stiles, DMMCU's business development manager, because news of the credit union's services spread rapidly by word-of-mouth through the Hispanic community, resulting in an influx of members. "This is a market segment that is very loyal and a pleasure to serve," Stiles added.

Businesses surviving under CUs preferred program

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TOTOWA, N.J. (9/8/09)--North New Jersey businesses are participating in a program created by North Jersey FCU (NJFCU) as an alternative for businesses to reach new customers. The program offers exclusive discounts and perks for NJFCU members, the credit union said. The NJ Preferred program debuted last week. Although NJFCU has not been immune to the severe economic crisis hitting both the local financial and automotive industries, it has paid close attention to signs that the U.S. is on the verge of a rebound. Under the program, more than 30,000 NJFCU members can buy cars, eat at restaurants or buy clothes, and receive exclusive discounts at participating businesses. Also, participating businesses can insert coupons in credit union statements, and advertise discounts and offers in NJFCU branches or on its website. In return, the credit union’s members obtain exclusive discounts offered by NJ Preferred businesses. The idea came from James Giffin, NJFCU vice president of sales and marketing. He is now one of many members of the $166 million asset, Totowa, N.J.-based credit union taking advantage of good deals in the area, NJFCU said.

90 of U.S. currency tainted by cocaine

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DARTMOUTH, Mass. (9/8/09)--Nine out of 10 pieces of U.S. currency contain traces of cocaine, according to a new study by the American Chemical Society conducted at the University of Massachusetts-Dartmouth. Even bills not involved in drug deals can become contaminated during the automated bill counting process in financial institutions. The drug--a fine powder--adheres to the green ink on the bills--mostly $5, $10s, $20s and $50s--and spreads easily, according to the study. Scientists studied banknotes from nearly three dozen cities in five countries--the U.S., Canada, Brazil, Japan and China. The bills from the U.S. and Canada saw between 85% and 90% contamination. A similar study two years ago found the U.S. contamination rate at 67%. China and Japan had the cleanest bills, with 20% and 12% contamination, respectively. Banknotes from Washington, D.C., had the most contamination--95% had traces of the drug. Other cities with larger amounts of contaminated bills included Detroit, Boston, Baltimore, Miami, Orlando and Los Angeles. The amounts of cocaine are not enough to cause any health or drug-testing concerns, researchers said.

CU System briefs (09/07/2009)

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* TACOMA, Wash. (9/8/09)--Tacoma-based Sound CU and MilePost CU announced Wednesday that MilePost has merged into Sound to allow "new opportunities for growth" and to "enhance the range of branch locations and services available" to members. The merger was completed Aug. 31. Sound CU is now a $477 million asset credit union with 47,000 members served by 12 branches in Pierce, Thurston and King counties (The News Tribune Sept. 3) … * Meridian, Miss. (9/8/09)--Police were looking for a man with the letters "D.A." tattooed on his upper right arm after he was videotaped Aug. 24 staking out an ATM at Meridian Mutual FCU and attacking it with a crowbar. He left empty-handed. A sign on the machine warns ATM users that their actions are being taped (Associated Press Newswires Sept. 3) … * MERIDEN, Conn. (9/8/09)--Connecticut credit unions expect more than 350 students from seven schools to participate
Click to view larger image Click for larger view
in a statewide Financial Reality Fair at the State Capitol on Nov. 4, said the Credit Union League of Connecticut. In 2009, credit unions working cooperatively focused on improving youth financial literacy through the fairs offered to high schools. The students "live on their own" on hypothetical but realistic budgets based on their selected occupation and make choices in lifestyle categories such as housing, transportation and recreation. "I can't think of a better way to involve our youth in learning to understand and manage their finances than putting them through such a practical lifestyle exercise," said league President/CEO Tony Emerson. Legislators and other government officials will observe, and a representative of the National Credit Union Foundation REAL Solutions program will attend. In the photo, students discuss lifestyle choices at a booth during a recent fair. (Photo provided by the Credit Union League of Connecticut) … * DULUTH, Ga. (9/8/09)--More than 250 people, representing 17 credit unions, raised $70,000 for Children's Miracle Network at the Greater Atlanta Credit Union Chapter's seventh annual Bowl-a-Thon in Decatur, Ga. The event was orchestrated by a committee of credit union employees and supported by 24 sponsors. The funds will benefit the Asthma Center at Children's Healthcare of Atlanta. Nationwide, credit unions have raised more than $63 million since 1996 through the Credit Unions for Kids program. In the Atlanta area, credit unions have contributed more than $900,000 for Children's Healthcare of Atlanta … * LOUISVILLE, Ky. (9/8/09)--Robert "Abe" Lincoln, 78, of Summerfield, Fla., died Aug. 27. He was former CEO of L&N FCU and Autotruck FCU in Louisville, Ky., before moving to Gainesville, Fla., to become president of Florida CU. During his credit union career, he was author of an international newsletter, "A Point of Order." He is survived by his wife, two children, and a stepgrandson. Funeral services are Sept. 25 at the Florida National Cemetery (The Courier-Journal Sept. 3) …