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Class project leads to CUs EcoMug work at WMU

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KALAMAZOO, Mich. (9/10/12)--A credit union staffer's participation in a course at Western Michigan University (WMU) has led to the credit union's role as the first lead partner with WMU's Office for Sustainability for an EcoMug Program.

Kalamazoo, Mich.-based Consumers CU announced its partnership Friday. The program provides all incoming students with a free ISO-certified, stainless steel mug that has WMU's sustainability logo and a QR code imprinted on the mug and offering special discounts for students.

The EcoMug Program, originally designed by students of WMU professor Harold Glasser, encourages students to be earth-friendly while reducing disposable cup use on campus. Dr. Glasser is now executive director for campus sustainability.

The EcoMug was created in 2009 in Glasser's Appropriate Technologies course. One student who helped devise the mug project was Carrie Susemihl, design and project management coordinator at Consumers CU.

"As a class we were witness to Dr. Glasser's commitment to the campus as a living lab, where he drove students to create and execute high-level projects with the potential to impact campus-wide policies and practices," said Susemihl. "It was particularly exciting when WMU President John Dunn attended our final class project presentations, and approved the class's proposal to distribute an EcoMug to every incoming student."

As a result of the project, WMU formed the Office for Sustainability, which is part of the Wesustain initiatives at the university.  In 2011, roughly 2,500 mugs were distributed, and 4,000 are ready for distribution this fall.

Sustainability is not limited to environmental concerns, but also the social and economic issues that impact the health of any community on a scale. Consumers CU, as a local financial institution, said it is dedicated to the well-being of its membership and community. "It fits perfectly with our own philosophy and sustainability efforts, and the care we provide for our members," said Consumers CU President/CEO Kit Snyder.

Snyder noted that the credit union, as one of the first online banking providers in Michigan in 1997, encourages all members to take advantage of a way of life that engages sustainability as well as technology--conserving both time and the earth's resources. "We recognized early on that members would desire the convenience of remote banking technology. It also happens that it is good for the earth, saving resources in numerous ways," Snyder added.

Consumers No to apps sharing info yes to mobile banking

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MADISON, Wis. (9/1012)--Three studies about the growth in popularity of smartphones and mobile applications offer insights into how credit unions are incorporating the new services into their products and services mix, and what consumers expect from them.

Two non-credit union related studies indicate that consumers are saying "no" to apps that share too much personal information while saying "yes" to conducting their banking business on smartphones and tablets.  A third study-- a white paper from Plano, Texas-based Catalyst Corporate FCU--provides data from credit union CEOs and notes a substantial number of credit unions are already offering mobile banking capabilities, while those that aren't are racing the clock to provide them.

Catalyst Corporate's white paper, entitled "Is That a Credit Union in Your Hand? Credit Unions Respond to the Mobile Revolution," was unveiled Thursday at the Texas Credit Union League's Leadership Conference in San Antonio. It gathered the input through an online survey earlier this year. Of 1,701 CEOs contacted, 368, or 22%, participated.

Key findings indicate that:

  • About one third of CEOs surveyed reported their credit union already offers mobile banking.
  • More than 40% of credit unions that don't offer mobile banking yet say they will launch a product within six to 12 months, while 15% of this group plan to offer mobile banking within three months.
  • More than 80% of credit union CEOs responding currently use smart phones.
  • About half of the smartphone-toting CEOs already are using these devices to conduct mobile banking.
  • Among credit unions offering mobile banking, the most important features of their mobile banking product were: balance inquiry, transaction history and transfers.  Larger credit unions also placed high importance on branch/ATM locators, mobile check deposit and bill pay.
  • The greatest challenges faced by those surveyed in terms of mobile banking included security of member data, operational costs and member awareness.
" Mobile banking has the potential to be the greatest interaction a credit union has with a member," said Brad Ganey, chief operating officer at Catalyst Corporate. Although mobile banking may not be right for every credit union, most experts agree that every credit union should, at a minimum, be examining the channel's merits and drawbacks. "Mobile banking is more than an add-on service. It will become a fundamental component of the credit union's delivery service system," Ganey said.

Catalyst offered its own mobile banking product earlier this year with a variety of mobile banking configurations to fit different credit unions' needs. These include a stand-alone mobile banking app; stand-alone mobile check deposit that includes the ability to integrate with a credit union's mobile banking product from another vendor; and the mobile banking app with mobile check deposit.

Another survey, by Pew Research Center's Internet & American Life Project, had warnings for credit unions and others developing their own smartphone apps: More than half of the people who have downloaded apps have uninstalled or outright avoided them due to privacy concerns (American Banker Sept. 6).

Other findings:

  • Of the roughly 88% of American adults who own cell phones, 43% say they have downloaded an app.
  • Fifty-four percent of app users did not even consider installing an app when they discovered how much personal information they were sharing.
  • Thirty percent of app users uninstalled an app when they found out how much personal information they were handing over.
  • Overall, 57% of all users have either uninstalled or decided not to install an app that shows signs of over-sharing.
A third study, a 30-month study of application traffic sources by Providence, R.I.-based financial software company Andera, indicated that consumers are increasingly willing to conduct banking business with mobile and wireless devices such as smartphones and tablets (Fierce CIO Sept. 6).

Andera noted that "mobile banking" has largely meant using mobile phones to check account balances and transfer funds between accounts, but that is changing. It cited a Federal Reserve study released in March that found 90% of mobile banking is used to check account balances or recent transactions, followed by transferring money (42%).

Andera's study indicated that trend is developing. "In the two years since we began tracking and analyzing the sources of visits to our company's platforms, we have seen a 70.3% growth in total number of online visits. But within that total number of online visits, the portion that comes from mobile phones and tablet devices has grown dramatically--by 269%," said Andera President Charles Kroll.

He noted that Andera's data says two things:  More and more consumers are getting used to dealing with their financial institutions online. And they are getting more confident about establishing new banking relationships or expanding existing ones on a mobile, paperless platform.  They are no longer using their smartphones or tablets just for checking balances and transferring funds.

"The message to banks and credit unions is unmistakable: your customers will be expecting you to deliver through this channel. Build that capability now, before they look elsewhere."

Utah CUs award 14K in grants to schools

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SALT LAKE CITY (9/10/12)--The 100% for Kids Credit Union Education Foundation has awarded more than $14,000 in grants to Utah schools.

For the past 10 years, Utah's credit unions, both large and small, have partnered to help the state's students get supplies they need. Through the foundation's collaborative effort, 10 schools in 10 districts have received a total of $14,000.

Among the projects receiving grant money is a teaching greenhouse at Morgan High School in Morgan District. Morgan High was awarded $5,000 to assist in the creation of the greenhouse, which will impact all 730 students in the school. 

Morgan High School teacher Megan Haslem applied for the grant. The greenhouse would allow students to implement the scientific method in team-based inquiry labs. One of the several benefits of inquiry labs is the promotion of innovative thinking to ask questions and answer problems.

Students also explore careers in horticulture. They will help decide to plant, propagate plants and sell them to the community. Greenhouse students also will learn basic skills needed for future employment--responsibility, teamwork, problem solving, record keeping, goal setting and time management, she added.

The teaching greenhouse project also will positively impact the community and eventually become self-sustaining. By selling items the students produce such as potted plants and vegetable starts to the local public, the greenhouse can sustain its maintenance needs once it becomes operational.

"Our board was very intrigued with this grant request because it covers multiple subject areas and grade levels," said foundation Director Liz White. "The self-sustaining business aspect was such a unique feature that we rarely see. It's exciting to help fund such an important project that demonstrates collaboration between school and community."

The foundation was formed to improve education in Utah by enhancing and expanding classroom level resources and programs. It has donated more than $5 million since its inception in 2002, contributing to all of Utah's 40 school districts. All of the funds donated go directly to teachers for use in their classroom.

Texas Trust names 16 students to youth council

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MANSFIELD, Texas (9/10/12)--Sixteen high school students have been chosen to serve on the Texas Trust CU Youth Advisory Council, which provides financial education and student leadership opportunities.

The $721 million asset, Mansfield, Texas-based credit union said the council is designed to equip high school students with basic financial skills to prepare them for adulthood. 

The council will meet twice a month through December  to discuss personal finances, service leadership, marketing and career opportunities in the financial field (PRLOG.org Sept. 4).

Its members also will participate in a group service project and volunteer at a community event sponsored by Texas Trust.

Ninety students applied for the 16 positions. Three sophomores, seven juniors and six seniors, representing seven schools, were chosen, based on student leadership credentials, extracurricular activities and willingness to actively serve and participate in bimonthly meetings and community events.

IAmerican BankerI op-ed supports supplemental capital for CUs

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NEW YORK (9/10/12)--If credit unions were allowed to raise supplemental capital, it would give them the means to better meet their members' needs for affordable credit. That move would create benefits for consumers, small businesses and the economic recovery by maintaining the flow of private credit when it is most needed, a University of Maryland business professor said in a Friday op-ed in American Banker.

"Credit unions provide essential retail financial services in the form of depository accounts and consumer loan products and services," wrote Clifford Rossi, executive in residence and Tyser Teaching Fellow at the Robert H. Smith School of Business at the University of Maryland. "Perhaps at no point since the Great Depression has the role of credit unions been of greater importance to consumers than the present financial crisis."

Retail credit unions cannot raise capital under current law, he added. "Unlike all other federally insured depository institutions that have access to some form of supplemental capital (including low-income credit unions), retail credit unions can only improve their net worth through retained earnings," Rossi explained.

A set of capital-based supervisory standards--known as Prompt Corrective Action (PCA) rules--are applied to credit unions, just as they are to all other federally insured depository institutions, Rossi wrote. "The combination of PCA rules and a restrictive statutory definition of net worth, however, create unique challenges for retail credit unions during stress periods and make it more difficult for them to address capital deficiencies should they arise," he added.

A solution would be for Congress to pass The Capital Access for Small Businesses and Jobs Act (H.R. 3993) introduced this year in the House, Rossi wrote.

"The bill would strengthen the capital and improve the safety and soundness of credit unions by allowing the National Credit Union Administration to authorize qualified credit unions to accept additional forms of capital to supplement their retained earnings," he added.

To read the op-ed, use the link.

N.Y. young professionals have first meet-up

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ALBANY, N.Y. (9/10/12)--Fourteen young professionals from eight credit unions gathered in New York City recently for the area's first Young Professionals Commission (YPC) meet-up.

Young professionals recently gathered in New York City at Café Cortadito as part of the area's first Young Professionals Commission meet-up. (Photo provided by the Credit Union Association of New York)
The group, joined by guest Elizabeth Friedrich, program officer at the National Federation of Community Development Credit Unions, discussed several topics relevant to credit unions.

YPC member Alicia Portada, Lower East Side People's FCU, shared an overview of the YPC, the networking opportunities available for young credit union professionals and the benefits of getting involved with the Metropolitan Chapter.

Fellow YPC member Corey Fernandes, Municipal CU, then discussed his experience as an attendee at the Credit Union Association of New York's (CUANY) Annual Meeting & Convention this summer.

Professional development was a key theme in the group's discussions. Several attendees acknowledged the opportunities to grow and advance within their credit unions.

Friedrich noted the importance of attracting and cultivating outside talent, explaining that the federation's fellowship program focuses on discovering and preparing talent from "outside" college graduates to be integrated into the credit union world. "It's very important to recognize the interest and passion from people outside the credit union movement, as their perspectives can bring originality and creativity to the movement," she said.

The unique dynamics of the metropolitan area, specifically New York City, was another point of discussion topic. Fernandes and Glamis Haro, Union Settlement FCU, shared concerns about the financial distress in their credit unions' communities--particularly among young people.

"The meet-up was an extreme success," said Fernandes. "Not only were we able to educate the attendees about the YPC, but we were also able to plant the seeds for lasting relationships between all the young professionals who attended."

The meet-up was hosted by CUANY's YPC with support from the association's Metropolitan Chapter and the federation.

Fin. lit. Many members dont admit they need help

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HIGHTSTOWN, N.J. (9/10/12)--Credit union members who are struggling financially often are hesitant to admit their troubles, according to participants in a marketing and business roundtable hosted by the New Jersey Credit Union League Thursday.

The News Jersey Credit Union League Thursday hosted a marketing and business roundtable with a focus on financial literacy. Credit union members who are struggling financially are often hesitant to admit their troubles, roundtable participants said. (Photo provided by the New Jersey Credit Union League)
Marketing and business professionals gathered at the league headquarters and remotely to discuss financial literacy and other training topics (The Daily Exchange Sept. 7).

Financial literacy should be an area of emphasis for credit unions because it serves a vital member need, participants in the roundtable said.

Some credit unions said they offer outreach to community groups and underserved areas. Others worked with students ranging in age from 13 to 17. All said their initiatives focused on member benefit rather than return on investment, although membership growth is measured.

Because members often are hesitant to discuss their financial troubles, private sessions are often effective in educating members through a multiple step process, participants said.

CU goes against the grain with in-house team

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AUSTIN, Texas (9/10/12)--Amplify FCU, Austin, Texas, has bucked technology conventional wisdom in establishing an in-house software development team.

The five-person team, which was established 19 months ago, recently launched a mobile check deposit application, compatible with iPhones, Blackberrys and Android phones, that has taken in $360,000 in deposits (Austin Business Journal Sept. 7).

Next on the team's agenda is an iPad application.

In-house development of specialized software such as financial services applications is rare because contracting is typically more cost effective, industry experts said.

An in-house team has high operating costs in comparison to contracting, said Gabriel Krajicek, CEO of Austin-based financial services product developer BancVue Ltd.

However, the in-house approach helps Amplify be more agile and flexible with market and member demand, Eric Clemons, director of software development at the $611 million asset credit union, told the Austin Business Journal.

In-house development also provides Amplify members with a more consistent experience, Clemons said.

Credit unions that develop applications internally can market their products to other financial institutions, said Robert Bessel, spokesman for COCC, a Connecticut-based firm that markets tech tools for financial institutions, in the article.

Judge NCUA vs. Goldman Sachs can proceed

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LOS ANGELES (9/10/12)--A federal judge in Los Angeles has ruled that the National Credit Union Administration's (NCUA) lawsuit against Goldman Sachs & Co. can proceed, saying NCUA had met the requirements on an extended "tolling" statute of limitations agreement before its filed its suit over residential mortgage backed securities (RMBS) sold to the former Western Corporate FCU and U.S. Central FCU.

In an in-chambers proceeding on Tuesday, U.S. District Judge George H. Wu of the U.S. District Court for the Central District of California confirmed his tentative ruling issued March 15 as the court's final ruling on motions made by Goldman to dismiss the case, according to minutes of the proceeding.

NCUA has said that losses from the RMBS sales to the now-shuttered corporates total $15 billion to $20 billion (News Now August 10, 2011).   As the liquidating agency for the corporates, NCUA alleges in the suit that Goldman Sachs' securities sellers and underwriters made several material misrepresentations in the RMBS offering documents, leading the corporates to believe the risks associated with their investments were minimal although the risks actually were substantial.

A key issue in the case was whether NCUA had missed the statute of limitations or the statute of repose for filing the case. It had entered into a "tolling" agreement with Goldman Sachs on Aug. 31, 2011, to extend the time allowed for filing the lawsuit. NCUA filed its lawsuit on Aug. 9, 2011. Despite the agreement, Goldman had maintained the filing deadlines had passed and sought dismissal.

In a tentative ruling in March, Wu had indicated that American Pipe Construction Co. v. Utah applied to the statute of limitations and statute of repose. Under that case, NCUA would have met the statute of repose extender requirement.

In the minutes of Tuesday's proceedings, Wu made four observations contributing to the ruling:

  • The court could not rule on co-defendant Residential Accredit Loans Inc.'s motion to dismiss the case because Residential had filed for a Chapter 11 bankruptcy, which creates "an automatic stay of this litigation, at least insofar as it relates to Residential."
  • American Pipe tolling applies to the case where a class representative purports to sue in connection with a particular security, at least until a court determines that plaintiff does not actually have standing. "It does not apply, however, if that class representative never purports to sue in connection with that particular security."
  • The court would require NCUA, in amending its complaint, to plead American Pipe tolling in conformity with the requirements set forth in Stichting Pensioenfonds ABP v. Countrywide Financial Corp.
  • The Aug. 31, 2011, tolling agreement between NCUA and Goldman would allow NCUA to proceed with its Kansas state claim.
Kansas law provides a statute of limitations of two years and a statute of repose of five years. NCUA entered into the tolling agreement before the statute of repose expired.  Kansas law could apply because U.S. Central was domiciled in Kansas.

NCUA has filed other suits against Wall Street banks over RMBS losses at the corporates. They include suits against USB Securities, which was filed  Thursday; RBS Securities; JP Morgan Chase; and Wells Fargo (over actions by its Wachovia Securities unit). NCUA's suits against Citigroup and Deutsche Bank Securities were settled for a combined $165.5 million, with neither bank admitting any fault (News Now Nov. 15, Feb. 6, and Feb. 14).

CU System briefs (09/07/2012)

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  • HONOLULU (9/10/12)--Four Hawaii credit unions raised $19,587 by participating in the 2012 Kapiolani Children's Miracle Network Radiothon on Aug. 23-24, according to the Hawaii Credit Union League.  Employees of Aloha Pacific FCU, Hawaiian Tel FCU, Hickam FCU and University of Hawaii FCU answered phones and solicited donations at different times during the Radiothon, which was broadcast on KSSK AM-FM. League Communications Officer Laurie Moore gave an on-air interview and shared her "Miracle Story" about how Kapiolani Medical Center for Women and Children helped her son overcome a severe respiratory infection as a baby.  The Radiothon's two-day fundraising total was $163,688. All the funds raised will stay in Hawaii and benefit children through programs and services at the medical center and its neighbor island partners.  Through Credit Unions for Kids, Hawaii's credit unions have raised more than $450,000 for Kapiolani since 1998. Shown here are Hickam FCU staff working the phones on Aug. 24. (Photo provided by the Hawaii Credit Union League) …
  • MADISON, Wis. (9/10/12)--Twenty-seven new college students received scholarships for the 2012-2013 school year from Madison, Wis.-based UW CU. The more than $1 billion asset credit union this past summer presented nearly $14,000 to 27 high school graduates who are attending a University of Wisconsin (UW) System school or Madison College this fall. Recipients were from 21 high schools throughout the state, in Dane County, Green Bay, Milwaukee, Oshkosh, Stevens Point and Whitewater.  Since 1999, UW CU has donated more than $200,000 to students for their higher education needs …
  • WATERVILLE, Maine (9/10/12)--HealthFirst CU's board of directors has appointed Lynda Quirion as president/CEO of the Waterville, Maine-based credit union. Quirion succeeds Debi Pomeroy, who retired Aug. 31 after nearly 25 years in the position, said the Maine Credit Union League (Weekly Update Sept. 7). Pomeroy's career in credit unions spanned more than three decades. She served at KSW FCU (previously Keyes Fibre FCU)  in 1980 before joining HealthFirst FCU (the former Mid-Maine Medical Center FCU) …