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CU System Archive

CU System

Weaker Ikes projected path includes Texas Louisiana

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MADISON, Wis. (9/9/08)--Residents and credit unions in Texas and Louisiana were urged not to get too complacent now that Hurricane Ike has weakened from a Category 4 to a Category 1 hurricane. Ike, whose winds topped 135 mph as a Category 4 and whose sea surge reached five stories high when it hit the Turks and Caicos Islands, slowed to 80 mph winds as a Category 1 Monday. It weakened as it barreled through Cuba Monday but was expected to regain some strength after it enters the warm Gulf of Mexico. In its projected path: The entire coast of Texas and as far east as Lake Charles, La. Landfall is projected to be Friday or Saturday. Key cities along the Texas coast include Corpus Christi, which has 15 credit unions and branches of four others; Galveston, which has five credit unions and a branch of a sixth credit union; Brownsville, near the Mexican border, has three credit unions; and Beaumont to the north, with 10 credit unions as well as branches from seven others. Houston, while not on the coast, is inland from Galveston. Houston, excluding its suburbs, has 84 credit unions and countless branches of credit unions headquartered elsewhere. The Texas Credit Union League has a Texas Disaster preparation website with information for credit unions (use the resource link). The Louisiana area could be in the volatile north east circle of the outerbands of the hurricane. Louisiana Gov. Bobby Jindal noted Ike could impact the coastal parishes of the state with hurricane strength winds, wave surges, high tides, torrential rain and tornado activity. (Bloomberg.com Sept. 8). Meanwhile, credit unions in the Florida Keys dodged the brunt of Ike. At least one credit union there had, for the second time in three weeks, blasted an emergency e-mail notice via DigitalMailer's crisis management system, to members with information about the credit union's emergency plans. The Keys' mandatory evacuation order expired Monday.

Popularity of new auto loan promo a surprise says CU

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TEMPE, Ariz. (9/9/08)--Tempe (Ariz.) Schools CU’s western-themed “WANTED” auto loan promotion drew nearly 30 applications from members and non-members to switch their auto loans to the credit union in the first two days of the promotion. “I was quite surprised at the current popularity of this new program,” said David Rindone, Tempe Schools director of marketing. Because of the program’s success, the credit union is looking to launch the program again next summer. The credit union promised applicants a reward of $100 cash and a 2% discount off their current rate if they applied to move their loan to the credit union. Members also could choose to skip loan payments for the first 60 days. “I think our timing was great as people were looking to streamline their budgets,” Rindone said. Credit union employees also donned cowboy and western gear and wore sheriff’s badges to promote the event. “We are always looking for new ways to attract members to the credit union,” Rindone said. Members had to qualify for the promotion based on normal underwriting guidelines and the floor rate on the loans was at 5.99%, the credit union said. Tempe Schools has $160 million in assets.

Sunset commission wants more financial info

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AUSTIN, Texas (9/9/08)--Among the recommendations made recently by the Texas Sunset Review Commission was a proposal for legislation that would require credit unions to file separate tax returns. Such a proposal would present an increased burden on the state's credit unions, says the Texas Credit Union League. Currently the information for about 220 state chartered credit unions is combined into a single tax form filing (Star-Telegram Sept. 7). The commission recently recommended a bill to require them to fill out separate Form 990s with the Internal Revenue Service (IRS). Filing separate returns would make it easier for members to study their institution's bottom line, assess its financial risks or learn how much top officers are paid, the commission said. However, league President/CEO Dick Ensweiler told the Star-Telegram that the proposal would require more accountants to file the separate forms. Most credit unions are small and don't have such experts on staff, he said, adding they shouldn't have to take on more regulatory burden. The news report did not address the fact that members can get financial information from credit unions' annual reports and from the National Credit Union Administration, Winter D. Prosapio, league advocacy-communications director, told News Now. "The story makes it sound as if there isn't any visibility for members as to the health of their credit union," she said. With the exception of specific executive compensation, a new aspect of the revised 990 forms, "that's simply not the case," she said. Harold Feeney, commissioner of the Credit Union Department, told the newspaper that the department is supportive of the Sunset Commission's recommendations. The commission recommended that credit unions should submit to members annual updates of finances, inform members regularly that they can see documents about finances and management, and publicize that members can file complaints. The public would not have access to credit union examination results. The report also recommended more authority for Feeney to pursue credit union fraud.

Do better job of touting difference CU execs told

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FARMERS BRANCH, Texas (9/9/08)--Credit unions need to do a better job of touting their difference, Ron Galloway, author and speaker, told credit union leaders at the Texas Credit Union League’s Leadership Conference and Visionary Expo Friday. Credit unions have proven themselves to be the most responsible financial institutions since 1930, he said. “You have a fabulous story to tell, but you aren’t getting your message out there. People don’t know about you,” he added (LoneStar Leaguer Sept. 8). Tom Dorety, CEO of Suncoast Schools FCU, Tampa, and chairman of the Credit Union National Association, said credit unions need to emphasize their uniqueness. Chuck Wilson, managing principal, Banking Industry Group Inc., said everyone at credit unions--from front-line staff to management--can spread that message. He also noted that if directors and employees can’t communicate to membership the reasons why the credit union is different, members don’t have an incentive to stay. “Your board of directors and employees must continuously and actively find ways to tell your story and help your members,” he added. “Is your organization committed to providing the level of service that sets you apart from the competition?” he asked. He followed up with other questions:
* Does the credit union have a definition of quality member service that all employees know and understand? * Is its quality standards practiced by each department in the credit union? * Is there planned, ongoing measurement of quality standards and timely feedback to employees about the results? and * Is the performance of the quality standards directly linked to the pay of each individual employee through the credit union’s performance appraisal process?
Credit unions may want to re-evaluate whether they are committed to providing the level of service that will set it apart from the competition, he concluded.

Illinois CUs agencies offer 100.5 million in student aid

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CHICAGO (9/8/08)--Eight Illinois credit unions have teamed with two state agencies to provide $100.5 million in financial aid for as many as 20,000 college students in a new state program. Credit unions are investing in the securities issued by the Illinois Student Assistance Commission (ISAC), filling gaps created by other private lenders who stopped providing financial support during the economy's credit crunch. "This financing package will enable thousands of students to attend college this year, knowing that they can pay their tuition," said Gov. Rod Blagojevich (Chicago Tribune Sept. 8). "We are pleased to team up with ISAC and back its efforts to help students get a quality education," said Dan Plauda, president/CEO of the Illinois Credit Union League (ICUL). "Earning a college diploma is crucial and on top of all of the other pressures of attending college, students should not have to additionally worry about whether or not their loan will fall through." Andy Davis, executive director of ISAC, learned of a similar program in North Carolina and contacted the league, which helped broker a deal with the eight credit unions. After meeting with Davis, ICUL determined that investing in the bonds would be permissible under applicable provisions of the Illinois Credit Union Act. The Illinois Department of Financial and Professional Regulation, the state agency that regulates credit unions, concurred. "The credit unions," Davis told the Chicago Sun-Times (Sept. 7), "really stepped up." Credit unions will provide Stafford loans ranging from $3,500 to $20,000, carrying an interest rate of between 6% 6.8% compared with the 18% through private loans, and backed by the federal government. Credit unions were approached after federal legislation cut subsidies that banks receive when they provide funds for lending to students. Banks are wary of making loans to students, who often have no collateral or jobs. The credit crunch led to announcements by state student loan agencies in Massachusetts, Minnesota and Pennsylvania that they would not loan funds this year. Credit unions involved in the Illinois program include:
* Alliant CU, Chicago; * Baxter CU, Vernon Hills; * Citizens Equity First CU, Peoria; * Corporate American Family CU, Elgin; * Credit Union 1, Rantoul; * I.H. Mississippi Valley CU, Moline; * Motorola CU, Schaumburg; and * Scott CU, Collinsville.

Massachusetts league elects officers

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MARLBOROUGH, Mass. (9/9/08)--The Massachusetts Credit Union League board of directors elected a new slate of officers that will serve for two years (Values and Visions Sept. 5). New officers include:
* Chairman Robert M. Cashman, Metro CU, Chelsea; * First Vice Chairman John B. Winne, Boston Firefighters CU; * Second Vice Chairman C. David Surface, St. Jean’s CU, Lynn; * Treasurer David S. Plantier, MassMutual FCU, Springfield; and * Clerk John M. Doolin, Workers’ CU, Fitchburg.

PCUA votes in modest dues increase for large CUs

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HARRISBURG, Pa. (9/9/08)--The Pennsylvania Credit Union Association board of directors voted to change the dues schedule for credit unions with $100 million in assets or more. The increase will be modest, said Jim McCormack, association president/CEO. “These credit unions benefit the most from the association’s advocacy spending in which upwards of 94% of association dues are spent,” he added. The board also voted to post consolidated financial statements for the association and its credit union service organization, Pacul Services Inc., on its website. The statements will be posted shortly (Life is a Highway Sept. 8). The board also approved a strategic business partnership with Integrate Compliance Solutions, and approved Jeff DeBree, CEO, Penn East FCU, Scranton, to fill the remaining term of the late Paul Santoski on the Pennsylvania Credit Union Foundation board.

iBelong campaign extended for two years

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HARRISBURG, Pa. (9/9/08)--The Pennsylvania Credit Union Association (PCUA) board of directors voted unanimously Sept. 5 to extend the iBelong campaign for two more years. iBelong is an advocacy marketing campaign designed to increase awareness about credit unions. It was launched last year by the PCUA and includes television advertisements leading viewers to iBelong’s website (News Now June 18, 2007). The board approved the recommendation from the Advocacy/Marketing Task Force to continue the campaign. The vote took place at the Fall Leadership Conference (Life is a Highway Sept. 8). For more information, use the link.

CU staffer helps get money for water to El Salvador

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CORVALLIS, Ore. (9/9/08)--A staffer at OSU FCU, Corvallis, Ore., who told a member that "my job is to serve, not turn away," didn't know it at the time, but his service has resulted in good drinking water for 100 residents in El Salvador. Andrew Krasney, an employee at the university branch, received kudos from Rob Hess, treasurer of Engineers Without Borders at Oregon State University (OSU), who wrote the credit union a letter of thanks, according to the Credit Union Association of Oregon (Outlook September). Hess had been a member of OSU FCU for about four years and had never needed to use services other than basic savings and checking accounts, he wrote. "However, recently I have had to perform a series of international wire transfers summing to several thousand dollars," Hess said. One transfer "had to be performed within a short time frame, but only after a pending direct deposit showed up in my account, which, unfortunately, would happen when I was out of town. Also, they were unable to find wire transfer information for the receiving bank. Hess said he feared the circumstances would prevent the transfer But Krasney told him, "My job is to serve, not to turn away." The staffer "backed up those words by finding a way to help me get the money where it needed to be when needed," Hess said. Krasney didn't know the money wired was for an international aid project being undertaken by the OSU chapter of Engineers Without Borders. Hess was sending money to El Salvador to buy materials to build a system for fresh, clean, reliable drinking water to more than 100 residents of Las Mercedes and El Naranjito, two rural communities. "Without Andrew's help, this system could not have been implemented, and the residents of Las Mercedes and El Naranjito would remain without a reliable source of good drinking water," the letter said. Hess applauded Krasney "for his hard work and his willing, can-do attitude. Not only am I and the rest of EWB-OSU grateful to him for his help, but so are the 100 or so rural Salvadoran coffee farmers whose daily lives will be improved, in part due to Andrew's good work."