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Pennsylvania group arrives in Haiti

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HARRISBURG, Pa. (10/1/10)--A delegation from the Pennsylvania Credit Union Foundation arrived Monday in Port-au-Prince, Haiti, for a two-week visit to evaluate damage from Hurricane Matthew and the January earthquake and explore opportunities for credit unions to help repair the remittance system between the U.S. and Haiti. The delegation includes foundation Executive Director Joe Wambach, his wife Maryse, and Chris Woods, foundation board member and president/CEO of Keystone FCU, West Chester (Life is a Highway Sept. 28). The foundation said Wambach sent a text message indicating he was "stunned by the rubble and conditions, and there's still no electricity." The loss of electricity was due to the hurricane, which hit the country last week. On Tuesday, the group met with World Council of Credit Unions (WOCCU) officials and CARE International. The team also met officials from the relief group Plan International, which is conducting Cash for Work programs and other microfinancing iniatives through Fonkoze, Haiti's Alternative Bank for the Organized Poor. Fonkoze is the largest microfinance institution in Haiti, serving more than 45,000 women borrowers, most of whom live and work in the countryside. The institution has more than 200,000 savers served by a network of 41 branches throughout the country (Life is a Highway Sept. 30). On Wednesday the team traveled to L'Hopital de Canape Vert (Canope Verte Hospital) in Port-au-Prince. The hospital, which was nearly destroyed during the Jan. 21 earthquake, lost many staffers. Months later, there is still insufficient space and resources to treat patients. Most of the medical records were destroyed and computers are scarce to rebuild the system, said the report. Thursday the group was scheduled to visit two credit unions. The Pennsylvania Credit Union Association will provide updates during the visit.

Capital funds a milestone for CDCUs says federation

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NEW YORK (10/1/10)--News of the U.S. Treasury Department's investment of nearly $70 million through its Community Development Capital Initiative (CDCI) with 48 community development credit unions (CDCUs) was welcomed by National Federation of Community Development Credit Unions Thursday. "The Treasury Department's CDCI is a milestone in the history of the CDCU movement," said federation President/CEO Clifford N. Rosenthal. "The federation has worked for more than two decades to win support for credit unions that serve low-income communities across the country. The establishment of the CDFI Fund in 1994 was a great victory. This is another," Rosenthal said, adding the initiative "will strengthen credit unions and enable them to expand services to low-income communities at a critical time in our nation's recovery. I also want to thank the Credit Union National Association for the support they provided the federation during what was at times a rather challenging process." Although the funding and authority for CDCI is provided by and through the Treasury Department's Troubled Asset Relief Program (TARP), this should not be considered by any means a "bailout" program, Rosenthal stressed. "Credit union applicants were subjected to rigorous review by the National Credit Union Administration (NCUA), the Treasury Department, and the CDFI Fund to ensure that they are both financially viable and are focused on serving low-income communities," he noted. CDCI awards are not grants, but rather secondary capital loans, which for low-income credit unions are classified as net worth, subject to certain conditions, on their balance sheets. Secondary capital is vital for low-income credit unions, because they-- like other credit unions--lack the power enjoyed by banks to build capital by selling stock, said the federation. Eligible credit unions were allowed to apply for up to 3.5% of their total assets, or $35,000 in secondary capital for every million in assets. The basic structure of the investments made to CDCUs through this program includes a rate of 2% for the first eight years, escalating to 9% for an additional five years, should credit unions choose to retain the loans. "We expect that most participating credit unions will repay the loan by the eight-year mark, if not earlier," Rosenthal said. Recipients of the loans include some of the smallest credit unions in the country, with assets of $1 million or less. The largest credit unions participating had several hundred million in assets. All the CDCU recipients were required to have both low-income designation from their credit union regulator and CDFI certification from the Community Development Financial Institutions Fund. "The statutory constraints governing TARP unfortunately limited participation," said Rosenthal. "But we appreciate everything the federal agencies did to make this program available even to some of the smallest, most resource-poor credit unions in the country." Jackson, Miss.-based Hope FCU, a $129 million asset CDCU serving nearly 24,000 members across Mississippi, Arkansas, Louisiana, and Tennessee, was the first CDCU to be approved for CDCI funds. Hope FCU CEO Bill Bynum called the investment a breakthrough for low-income communities. "By investing in credit unions and other community development financial institutions, Treasury is supporting a key segment of the nation's finance sector," he said. "Hope [FCU] has experienced steady increase in demand for credit over recent years as many traditional lenders have restricted their lending." He noted it would help insure "that the nation's hardest hit communities have access to the financing needed to stimulate economic recovery." Genesee Co-op FCU, $9.5 million asset CDCU in Rochester, N.Y., was also among the first round to close on CDCI funds. "CDCI secondary capital is making it possible for our community development credit union to grow," said CEO Melissa Marquez. "Without this investment, Genesee Co-op FCU was trying to shed deposits, making it more difficult to lend since our loans-to-shares were already at 80%. The $300,000 we received in CDCI secondary capital enables us to serve more members and reach out to other underserved neighborhoods in our community. We can increase our deposits and make affordable loans because our net worth is stronger as a result of this infusion of secondary capital." The federation represents more than 230 CDCUs nationwide. It and others in the CDFI movement worked with the Treasury Department on developing the CDCI program, which launched in February. Since then, the federation has provided technical assistance and support to more than 100 credit unions applying for CDFI certification and CDCI funding. It also worked with the NCUA, the CDFI Fund and the Treasury Department to structure investments to generate the most impact for CDCUs and their communities. For more information about the Treasury's announcement, see related story, "Treasury announces new $570M round of CDCI funds" in News Now's Washington section. For an unofficial list of CDCI recipients on the federation's website, use the link.

Phish attacks vs.CUs at lowest level says report

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BEDFORD, Mass. (10/1/10)--Phishing attacks against U.S. credit unions dipped during August to their lowest level, although phishing attacks overall rose to 17,935 attacks from July's 16,756, says a new report for August. RSA's Online Fraud Report, released monthly by the Bedford, Mass. firm, reported that phishing attacks launched worldwide in August increased 7% from July, the fourth highest spike since August 2009, when the total was 16,164 attacks. Credit unions suffered just 3% of the attacks, a three percentage point drop from July and a significant plunge from 24% of attacks recorded by the firm in August 2009. They slipped from double digits recorded through most of 2009, into single digits in March 2010, when they accounted for 4% of the phish targets. Credit unions have been between 4% and 6% of attacks the past six months. Other financial institutions saw attacks against their brands increase. For the sixth consecutive month, nationwide U.S. banks climbed 1%--they were targeted in 65% of attacks recorded by RSA in August. Regional U.S. banks climbed 2% to comprise 32% of the attacks. A year ago national banks had only 31% of the attacks, and regional banks accounted for 45% of the phish targets. RSA said the bulk of the August increase in overall phishing resulted from attacks targeting a handful of financial institutions. Phishers prefer to focus their effort on a targeted group rather than spread their attacks across the board, said RSA's report. The number of brands attacked in August totaled 216, compared with July's 217 and June's 216. The number of brands attacked less than five times in August totaled 122, a 7% increase from July, said the report. Sixty percent of attacks in August were hosted in the U.S. The report also provided examples of information recently stolen by cyber thieves. It said the line between use of consumer and enterprise computers is blurring, and that trend is introducing more challenges for those trying to protect information. Use the resource link for more details.

Past NASCUS chairman Reynolds receives Pierre Jay Award

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SAN ANTONIO (10/1/10)--George Reynolds, past National Association of State Credit Union Supervisors (NASCUS) chairman and retired state regulator from Georgia, is the 2010 NASCUS Pierre Jay Award recipient. Reynolds was honored with the award Thursday during the NASCUS State System Summit. Recipients of the award best demonstrate outstanding service, leadership and commitment to NASCUS and the dual-chartering system. The Pierre Jay Award, first awarded in 1997, is named after the first Commissioner of Banks in Massachusetts. After a 34-year career with the Georgia Department of Banking and Finance, Reynolds retired in May as the senior deputy commissioner of banking. Reynolds served as NASCUS chairman, a National Institute of State Credit Union Examination trustee and an active participant in the NASCUS Accreditation Program. During his chairmanship, Reynolds was instrumental in developing the first regional interstate branching agreement and advancing many NASCUS strategic initiatives, NASCUS said. He also testified on behalf of NASCUS and state regulators several times before the House Financial Services Committee and Senate Banking, Housing and Urban Affairs Committee. “George exemplifies the meaning of the Pierre Jay Award, and I can't think of anyone more deserving,” said NASCUS Chairman Tom Candon (Vermont). “His contributions to NASCUS have clearly strengthened this organization.” Last year, NASCUS awarded the Pierre Jay to Catherine Tierney, president/CEO of Community First CU, Appleton, Wis.

CU System briefs (09/30/2010)

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* HARRISBURG, Pa. (10/1/10)--U.S. Rep. Charlie Dent (R-Pa.) met with Pennsylvania credit union leaders at an event hosted by First Commonwealth FCU, Bethlehem, according to the Pennsylvania Credit Union Association (PCUA) in its newsletter, Life is a Highway (Sept. 29). The group discussed a variety of credit union and consumer issues. Pictured from left are: Jo Ann Broderick, president/CEO at First Commonwealth FCU; John Cathers, vice president sales and service; Dent; Alan Musselman, chief financial officer; Janet Weinhofer, chief operating officer; and John Kilduff, PCUA vice president, credit union services. (Photo provided by the Pennsylvania Credit Union Association) ... * SPRINGFIELD, Mass. (10/1/10)--The former president of Western Mass. Electric Co. (WMECO) CU pleaded guilty Tuesday to stealing $225,000 from the $33.8-million asset, Springfield-based credit union by falsifying expense records (Associated Press via Boston Herald Sept. 29). Robert Koss was charged with embezzlement and filing a false tax return while running the credit union. As part of a plea bargain, Koss will pay restitution. Sentencing is set for Jan. 21 in the federal court. Koss retired from the credit union in 2006 ... * DULUTH, Ga. (10/1/10)--Georgia Central CU is hosting its fourth annual ALM Conference Nov. 2, with experts in investment and asset-liability providing information about asset-liability modeling tools. Cory Johnston, senior vice president and chief investment officer for the corporate credit union, said the event will enhance the "ability to interpret ALM reports and communicate more effectively with regulators, boards of directors and asset-liability committees." "This year we are bringing back a regulatory perspective to the agenda. Credit unions clearly benefit from knowing what their examiners will be looking for when their interest-rate-risk reporting is reviewed, so Lisa Boylen from First Carolina Corporate will be on hand to talk attendees through how to prepare," Johnston said. Sessions include strategies in the current low-interest rate environment, to how to develop sound modeling assumptions, to recent system upgrades on services provided by Georgia Central ... * ATLANTA (10/1/10)--Georgia's Own CU President/CEO Charlotte S. Ayers will retire at the end of the year, after 11 years at the helm and 41 years with the Atlanta-based credit union. She is credited with transforming the 76-year-old financial institution from $600 million in 1999 to $1.5 billion assets today. Her tenure saw membership increase to 160,000 from 79,000 and the credit union's service extend to all of metro Atlanta, and parts of Savannah and Augusta. Her retirement is part of a transition process she initiated in 2008 to ensure the credit union has strong leadership. David Preter, previously executive vice president, of the credit union, has been named president/CEO (The Weekly Sept. 20) ...

Senate candidate in Ohio MBL is a no-brainer

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COLUMBUS, Ohio (10/1/10)--Lee Fisher, Ohio Lt. Gov. and U.S. Senate candidate, thanked the state’s credit unions for their support, for “doing what [they] do,” and pledged to support credit unions’ increased lending to small businesses, during a meeting with credit union leaders, hosted by the Ohio Credit Union League.
Ohio credit union leaders met with Lt. Gov. and U.S. Senate candidate Lee Fisher (center), who hopes to champion credit unions if elected to the upper chamber. (Photo provided by the Ohio Credit Union League)
Fisher said he is committed to not only support credit unions if elected to the Senate, but also to be a champion of credit union causes. As a champion, he told the league, he will work to get others to support credit union issues (eLumination Newsletter Sept. 22). Fisher told the league he remains convinced that the basis of the economic recovery lies in helping small businesses, and that increased member business lending (MBL) authority for credit unions is a “no-brainer” and overdue. Raising the MBL cap to 27% from 12.25% would be a “good start,” but Fisher said he would like to see the cap removed entirely. As a former employee of a not-for-profit organization, Fisher said he understands the importance of credit unions’ tax exemption, and said that it was deserved and should be maintained.

CUs in Southeast N.C. close in record rains

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GREENSBORO, N.C. (10/1/10)--Record rainfalls closed several credit unions in southeast North Carolina early Wednesday and Thursday, according to the North Carolina Credit Union League. No damage was reported through midday Thursday from the credit unions.
Carolina Beach, N.C., residents walk down a flooded street early Thursday morning amid storms that produced a record 20 inches of rain in some areas. The storm forced some credit unions to close early Wednesday and Thursday. (Photo provided by the North Carolina Credit Union League courtesy of the Wilmington Star-News)
The rainfall broke records in Wilmington dating back to Hurricane Floyd 11 years ago, said the league. Wilmington and New Hanover County were in the bull's-eye of the rainfall, receiving more than 20 inches of rain from Sunday through early Thursday (Weekly Update Sept. 30). Most of eastern North Carolina received more than five inches of rain, while many areas near the coast saw more than 10 inches. "For the most part, major roads are OK; however, it's the side roads that are the concern," East Coast CU President/CEO Lisa Pope told the league. East Coast, located in Wilmington, announced it would close at 1 p.m. Thursday. Some credit unions in the area were also closed early Wednesday afternoon during the height of the storm. Schools throughout most of eastern North Carolina also were closed or delayed. Many businesses curtailed their business hours. Even the Battleship USS North Carolina in downtown Wilmington was forced to close by high water levels during high tide Thursday afternoon, the league said. Greensboro, where the league is located, picked up more than four inches of rain. By Thursday afternoon rain began to diminish but a new problem, high winds already at 50 mph, threatened to uproot trees and cause power outages. "It is raining hard now and the wind is really blowing, so who knows what is to come," reported Donna Dash, branch manager of Greenville-based Welcome CU. She told the league that some streets and county roads were flooding throughout Pitt County. The heavy rainfall is expected to end today. Some flooding is expected. Some of the areas hit by the flooding had their driest September on record with drought conditions through August and September--until the rain began to fall Sunday.

Wash. state CUs urge biz lending in candidates briefing

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VANCOUVER, Wash. (9/30/10)--Eight credit unions from the Vancouver, Wash., area met Tuesday with a congressional candidate to talk about how changes in federal regulations could allow them to play a bigger role in reviving Southwest Washington's economy. Democratic congressional candidate Denny Heck is an Olympia-based business entrepreneur who once worked for a Vancouver-based credit union. According to The Columbian (Sept. 28), credit union leaders provided Heck with "an earful" about being excluded from the federal Small Business Lending Fund Act, which provides funds to community banks to provide credit for small businesses. Many CEOs at the event said they already are bumping against their member business lending caps, currently set at 12.25% of total assets. Credit unions have been pushing to raise the limit to 27.5%. Among those saying credit unions want in on the federal program were Larry Hoff, president/CEO of Fibre FCU, Longview, and Roger Michaelis, president/CEO of IQ CU, Vancouver. Others said regulators have overstepped in the wake of the mortgage lending crisis, with Dave Spaulding, president/CEO of Red Canoe CU, Longview, noting that some credit unions are being forced to do cash calls on second mortgages. About 35% to 40% of local credit unions' loan portfolios are in home mortgages, and credit unions told the candidate they work closely with members to avoid foreclosures in stressed mortgage situations. Al Ralston, a consultant to Tukwila-based BECU, said no one from the state of Washington is on key financial service committees. "I don't think we need any more friends," he said, adding, "We need champions" with clout to change laws. For the full article, use the link.

Two board seats up for nomination at NCUF

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MADISON, Wis. (9/30/10)--The National Credit Union Foundation (NCUF) is seeking nominations for two board seats. Both are for credit union executive or director seats. Volunteers serve up to three three-year terms on the NCUF board as long as they are re-nominated by the NCUF Governance and Nominations Committee and re-elected by the NCUF board. Each candidate must be an executive officer or director of a credit union serving consumers. Two incumbents are up for election:
* Gary Oakland, president/CEO of BECU, Seattle. Oakland is completing his second three-year term on the NCUF board; and * Curtis Collins, director, JSC FCU, Houston. Collins is completing his first three-year term on the NCUF Board.
Oakland and Collins have expressed interest in serving another term. Applications must be received by Oct. 29. NCUF’s Governance and Nominations Committee will review all candidates and recommend nominees to the board. The board will vote on nominees in December. In January, NCUF’s board will elect its table officers at it organizational meeting. For more information, use the link.

PCUA iBelong to continue into 2011

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HARRISBURG, Pa. (9/30/10)--The board of the Pennsylvania Credit Union Association (PCUA) has approved funding for its iBelong media campaign for 2011 with a 33% rate cut from the 2010 assessment (Life is a Highway Sept. 29). PCUA said three factors supported the decision:
* Growth rates at Pennsylvania credit unions outpaced the national averages in membership, 2.2% vs. 0.9% respectively; assets, 8.9% vs. 3.8%; and loans, 5.4% vs. -0.9%; * Studies showed steady gains in awareness and favorable perceptions among noncredit union members; and * Most member credit unions supported the campaign and indicated it should continue.
"We know many credit unions continue to face economic challenges," said Ray Brunner, PCUA board chairman. "But the fact is, looking at the growth statistics and the desire by the vast majority of our members to continue the campaign, it was the right decision." PCUA's Advocacy/Marketing Steering Committee will examine new channels and messaging to the younger demographic, he said. Assessments will continue on a three-tier system:
* Credit unions with asset sizes under $20 million will pay $7 per million assets; * Those with assets of $20 million to $50 million pay $27 per million; * Credit unions with assets more than $50 million pay $40 per million.
PCUA expects 2011's media budget to reach $1.1 million. PCUA's board approved a $50,000 boost from Pacul Services Inc., which is included in the budget total. iBelong is a media awareness ad campaign that focuses on the benefits of credit union membership. It began in Pennsylvania in 2006, and since then, other leagues have employed the program.

CO-OP Fin. Services reaffirms confidence in corp. system

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RANCHO CUCAMONGA, Calif. (9/30/10)--CO-OP Financial Services announced its confidence in the corporate credit union system in a press release Tuesday after word of the National Credit Union Administration's (NCUA) actions Friday related to corporates. "After many years of partnering with the corporates, we reaffirm our confidence in the corporate system and believe it is still valid and valuable to the movement," said Stan Hollen, president/CEO of CO-OP Financial Services. "CO-OP will continue to pursue an active role in the future of credit union payments, and we will seek partnerships to fulfill that goal with corporate credit unions and the natural-person credit unions that comprise their owner-members," Hollen added. The credit union service organization is "keenly interested in playing a lead role in the transition of bridge corporate payments-related activities to other credit union industry providers," he said. Hollen encouraged CO-OP's client credit unions and others in the industry to visit the website of the Credit Union National Association to keep up to date on the developments related to the corporate credit unions. CO-OP Financial Services' website also has information on its stand. Use the links for more information.

FinCEN plan wont affect CU remittances WOCCU says

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MADISON, Wis. (9/30/10)--A new plan by the Financial Crimes Enforcement Network (FinCEN) to require financial institutions to report all international wire transfers to the government will not affect the World Council of Credit Union’s (WOCCU) remittances program, according to WOCCU. “The proposed rule change by FinCEN will not substantially affect our remittance program credit unions because they do not send or receive transfers directly,” said Saul Wolf, remittances manager for WOCCU’s IRnet. FinCEN’s proposal, released Monday, would target about 300 banks and 700 money services businesses that directly send or receive transfers to and from overseas, according to American Banker (Sept. 28). Under the proposal, banks would report all international wire transfers, regardless of amount, while money services businesses would track transfers of $1,000 or more. The proposal would not be effective until 2012, FinCEN said. The financial industry has 90 days to comment on it.

Georgia CUs join scam awareness push

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ATLANTA (9/30/10)--The Georgia Credit Union Affiliates (GCUA) is announcing the start of a program in the state to protect consumers and financial institutions from fake check scams. GCUA joins the Georgia Governor’s Office of Consumer Affairs, the Consumer Federation of America (CFA) and a banking trade group in the effort. Under the program, participating credit unions and banks will distribute a CFA brochure, “Don’t Become a Target,” to consumers who deposit checks or money orders of $1,000 or more or who withdraw $1,000 or more. About 60 credit unions and banks have signed up to participate. CFA will provide the brochures for free. The average loss to fake check scams is $3,000 to $4,000. In the scams, consumers receive a genuine-looking check or money order and are asked to wire money in return. The check also can be described as an advance on a sum that the consumer has won in a sweepstakes or lottery. The consumer is instructed to send money to pay taxes on the check. In other situations, consumers are recruited to work as mystery shoppers or to process payments for a company. They are instructed to send money as part of the job, but when the check or money order bounces, the victim owes the money back to the financial institution where it was deposited or cashed. “Fake check scams are a serious problem for consumers,” said Cindy Connelly, GCUA senior vice president of association services. “Credit unions want to do all they can to educate their members. Consumers and credit union personnel need to be able to recognize the warning signs of fraud to prevent it.” The Connecticut Credit Union League also has partnered with CFA on the project. Connecticut was chosen as the first state to launch the project because seniors are especially susceptible to fraud, and the state has a high number of people who are age 65 and older (News Now Sept. 15).

Iowa league swears in new board at convention

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DES MOINES, Iowa (9/30/10)--The Iowa Credit Union League swore in its new board members during the Iowa Credit Union Annual Convention Sept. 23.
Click to view larger image The Iowa Credit Union League recently swore in its board members during the annual convention. From left, front row, Tim Wallen, Ace Community CU; Brent Helin, Des Moines Metro CU; Pat Drennen, 1st Gateway CU; and Mike Whittie, Federal Employees CU. From left, back row, Dennis Choate, Quaker Oats CU; Vice Chair Tim Chapman, Members Community CU, Chair Joe Hearn, Dupaco Community CU; Janine Keim, Consumers CU; John Bentler, River Bend CU; Tim Marcsisak, Nishna Valley CU; and Denny Siemers, Town & Country CU. (Photo provided by the Iowa Credit Union League)
Joe Hearn, chief operating officer, Dupaco Community CU, Dubuque, was elected to serve as the 2011 board chair. Tim Chapman, CEO, Members Community CU, Muscatine, will serve as the 2011 vice chair. Additional board members include:
* John Bentler, River Bend CU, West Burlington; * Janine Keim, Consumers CU, Denison; * Dennis Choate, Quaker Oats CU, Cedar Rapids; * Tim Marcsisak, Nishna Valley CU, Atlantic; * Denny Siemers, Town & Country CU, Harlan; * Michael Whittie, Federal Employees CU, Des Moines; * Brent Helin, Des Moines Metro CU, Des Moines; * Tim Wallen, Ace Community CU, Ames; * Pat Drennen, 1st Gateway CU, Camanche; * Jim Hagerman, Linn Area CU, Cedar Rapids.

LSCU endorses gubernatorial candidate

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TALLAHASSEE, Fla. (9/29/10)--The League of Southeastern Credit Unions' (LSCU) advocacy group is endorsing Democrat Alex Sink in the gubernatorial election in Florida. Sink's broad base of business experience and solid understanding of the financial difficulties facing Florida consumers and small businesses fit what Florida's economy need right now, said the board of trustees of the league's political advocacy group, CUPAC. Before she was elected Florida's chief financial officer, Sink fostered a "solid working relationship with Florida's credit unions," the league said. During her campaign she made a point of visiting the league officer to speak with its governmental affairs staff. In the past four years, Sink spoke at the league's legislative summit, met with multiple credit union CEOs, and was guest of honor at an event in June at the league's Annual Convention & Exposition. "Alex understands the issues that concern credit unions. She understands that in this down economy, it is important for Floridians to have access to credit," said LSCU President/CEO Patrick La Pine. "Her financial background will ensure that Florida's financial institutions, including credit unions, will continue to be able to offer affordable products and services Floridians need and want," he said. "Alex sees that credit unions are working with their members right now to keep them in their homes, cars and on the path to saving more." Sink said she was "honored" to receive the league's support. "Getting affordable loans to small businesses and homeowners is vital to rebuilding Florida's economy as it struggles to recover, and it is important to have a governor with the right kind of business experience and who understands the critical role credit unions play in getting Floridians back to work," Sink said. She added she looks forward "to working with the league to create jobs and support small businesses." The CUPAC board of trustess also announced endorsements of two other high profile races in the state: Republican Adam Putnam for commissioner of agriculture and Republican Jeff Atwater for Florida chief financial officer. The league also is making available to Alabama and Florida credit unions its 2010 LSCU Alabama and Florida Congressional Report Voter's Guide and the 2010 State Legislative Issues Voter Guide. For more information use the link.

FBI 2Q report 7 of robberies were at CUs

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WASHINGTON (9/29/10)--During second quarter of 2010, roughly 1,146 robberies and incidental crimes affecting financial institutions were reported to the Federal Bureau of Investigation (FBI). Of those, 85 or 7% were at credit unions. Commercial banks were hit by 1,013 instances, said the FBI's report, released last week. Credit unions were second highest with the 85, followed by savings and loan associations with 26 robberies, then mutual savings banks, with 11. The figures are not a complete statistical picture of the nation's robberies of financial institutions because not all are reported to the FBI. The agency noted that in 91% of the incidents, suspects stole more than $8.4 million, mostly in cash but about $4,130 in checks, including traveler's checks. Of that amount, 21% --more than $1.3 million--was recovered. Bank crimes continued the trend of occurring most frequently on Friday, traditionally pay day. Monday was the second-most popular day for the crimes. Regardless of the day, the most popular time of day for bank crimes occurred from 9 a.m. to 11 a.m. Five percent of the robberies included acts of violence, resulting in 23 injuries, five deaths and nine persons taken hostage. Oral demands and demand notes were the most common method used by the culprits. The most crimes occurred in the Western U.S., which reported 403 incidents. The South had 348 robberies. North Central and Northeast regions had 212 and 163 incidents, respectively. Among states, Pennsylvania financial institutions reported the most robberies--62, followed by Illinois with 56, Ohio with 49, New York with 48, and Georgia with 42 incidents. Use the link for the full report.

Michigan names Maxwell Herring Desjardins awards

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LANSING, Mich. (9/29/10)--The Michigan Credit Union League this week named the winners of its annual Maxwell, Desjardin and Herring awards. The Desjardins Youth Financial Education Award recognizes leadership on behalf of youth financial literacy. The Dora Maxwell Social Responsibility Recognition Award honors a credit union, chapter or credit union group for community involvement. The Louise Herring Award for Philosophy in Action is presented for special programs and activities offered to credit union members, such as consumer financial education and money management (Michigan Monitor Sept. 27). First-place Maxwell award-winners were:
* Education Plus CU, Monroe, $50 million to $100 million in assets; * Central Macomb Community CU, Clinton Township, $100 million to $200 million; * Co-Op Services CU, Livonia, $200 million to $500 million; and * Genisys CU, Auburn Hills, $500 million or more.
First-place Herring award-winners were:
* Central Macomb Community CU, $50 million to $250 million in assets; and * Michigan State University FCU, East Lansing, greater than $250 million.
First-place Desjardins award-winners were:
* Catholic Parishes FCU, Livonia, $50 million to $150 million in assets; * Community Financial Members CU, Plymouth, $150 million to $500 million; and * Michigan First CU, Lathrup Village, more than $500 million.

CU System briefs (09/28/2010)

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* LANSING, Mich.(9/29/10)--Michigan Gov. Jennifer Granholm mentioned credit unions and the Credit Union Small Business Financing Alliance in her weekly radio address, said the Michigan Credit Union League (Michigan Monitor Sept. 27). The address focused on opportunities in the state for small businesses. In her February State of the State address, Granholm announced the alliance, in which the state's credit unions work with 12 small business and technology and development centers to assist businesses ... * BOISE, Idaho (9/29/10)--The Idaho Credit Union League hosted a reception of the Council of State Governments-West (CSG) meeting in Sun Valley, Idaho, where conference attendees toured the Redfish Lake area and learned about the area. State Rep. Rich Wills (R-22), CSG-West chairman (shown here), and state Rep. Wendy Jaquet (D-25) were among legislators and legislative services staff who helped coordinate the conference. Valerie Brooks, regulatory and governmental affairs director for the league, attended the meeting. The event provided opportunities for legislators to meet with their peers from across the West and to discuss issues important to their states. Topics discussed included the economy, state budgets, education, the courts, water and environment, said Brooks ... * MISSOULA, Mont. (9/29/10)--Ben A. Diveley, 34, of Helena, Mont., has been sentenced to a year and a day in prison after pleading guilty in embezzling nearly $77,000 from Helena Community CU. During his employment of five years at the credit union, Diveley took out loans totaling $75,000 using fake borrower names. The loans were guaranteed with a member's share certificate without the member's permission. Diveley told the court he used the money to pay off credit cards. He was making payments on the loans at the time they were discovered. He also was ordered to pay nearly $89,000 in restitution (Associated Press Newswires Sept. 27) ... * SAN ANTONIO (9/29/10)--Firstmark CU was honored in a resolution by Texas state Rep. Joaquin Castro for its efforts in supporting SAReads, an annual summer citywide book drive (PRWeb Sept. 28). Leon Ewing, CEO, of the more than $700 million asset credit union, noted it collected about 2,000 books and donated more than $1,000 to the SA Reads program. The program was founded this year by Castro, Literacy San Antonio and San Antonio Youth Centers. Firstmark CU joined the collaboration with the shared goal to help collect and distribute books to schools and nonprofit organizations across the city ... * KANSAS CITY, Mo. (9/29/10)--Kansas City credit unions talked with 12 legislators and candidates during a breakfast meeting Sept. 22.
In thanking credit unions for their "member-driven focus," Jeff Grisamore (R-47) noted, "Credit unions are a great aspect in the spectrum of financial institutions." (The Missouri difference Sept. 24). Outgoing State Rep. Ray Salva (D-51) asked incoming and current legislators to support credit unions in Missouri. Attendees included Melissa Rowe, a staffer of U.S. Rep. Sam Graves (R-6). Eleven credit unions explained the credit union difference to the candidates and updated lawmakers on current credit union issues. From left are Pat Yokley, CommunityAmerica CU; Ira Anders, Dist. 51 candidate; state Rep. Jerry Nolte (R-33); and state Rep. Mike McGhee (R- 122). (Photo provided by the Missouri Credit Union Association) ...

Florida Telco CU now 1-2-1 Financial CU

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JACKSONVILLE, Fla. (9/29/10)--Florida Telco CU in Jacksonville, Fla., has changed its name to 1-2-1 Financial CU. The new name was chosen after input from members, employees and its board of directors, the credit union said (The Florida Times Union Sept. 27). The credit union’s surveys found membership would grow if members of the general public understood they don’t have to be employed by a telecommunications company to join. “The consistent value statement appearing in our feedback meetings was personal service,” said Cynthia Breslin, 1-2-1 Financial vice president of marketing, told the newspaper. “Our members and staff felt that our one-on-one attention to everyone is what really sets us apart, so the name was an easy fit.” “We needed a name that would align us more with our broad and diverse community-based membership,” the credit union said in an FAQ section on its website regarding the name change. “By selecting a new name, we have made an investment in our future and have provided a foundation for growth in the years ahead.” 1-2-1 Financial CU has more than $455 million in assets.

Calif. CUs second-quarter results reflect economy

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ONTARIO, Calif. (9/29/10)--California credit unions’ second-quarter financial report card reflects a troubled economy, said an industry analyst. State-chartered credit unions’ assets, at $72.5 billion for June 30, were down 3.3% from the $74.9 billion reported as of June 30, 2009. Shares declined to $62.1 billion from $63 billion, down 1.3%, according to the California Department of Financial Institutions’ (DFI) second-quarter 2010 report. Loans were down 10.2% from one year ago, going to $44.6 billion from $49.7 billion. At $6.6 billion, net worth was down a fraction of a percent. This caused the net-worth-to-asset ratio to increase to 9.09% from 8.84% one year ago. The allowance for loan losses for the quarter was up 17.9%, rising to $1.4 billion from $1.2 billion, while delinquent loans increased 9.9%, to $1.2 billion from $1.1 billion, DFI said. California has been geographically impacted by the struggling economy, Daniel Penrod, senior industry analyst for the California and Nevada Credit Union Leagues, told News Now. “Pockets are doing OK, and pockets have been hit hard,” Penrod said. “The Central Valley and Inland Empire [primarily San Bernardino and Riverside counties, east of Los Angeles] have significant declines in housing and employment.” “Credit unions go as their membership goes,” he added. “We’re so tied into our members--that if certain employment groups or populations get hit hard, credit unions get hit hard. There are some problem areas--financial services, construction and government spending--and credit unions linked to these groups are feeling the pinch along with their members. Unfortunately, credit unions are getting caught up in the wash.” Credit unions’ net margin to average assets increased to 4.41% from 4.22% one year ago, while the provision for loan losses dropped 44.6% to $429.8 million from $775.4 million over the same period, DFI said. Net income went from a net loss of $348.5 million for the first half of 2009 to a net profit of $128 million for the same period in 2010, up $476.4 million. The number of credit unions also dropped about 7% to 167 from 181. “Initially into the recession, credit unions were able to withstand the financial storm, but the duration and depth of this has hit every industry,” Penrod said. “No one is immune. “However, credit unions made smart loans, so their portfolios have remained stronger than those of any other financial institutions,” he concluded.

Oregon CUs philanthropy leadership honored

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BEAVERTON, Ore. (9/29/10)--Several Oregon credit unions were honored for their leadership in corporate philanthropy by the Portland Business Journal’s 2010 Corporate Philanthropy Awards, according to the Credit Union Association of Oregon. Advantis CU of Milwaukie, Unitus Community CU of Portland, and Oregon Community CU, Eugene, were recognized in the Small Company category. Oregon Community celebrated its 10th year of academic scholarship support with its neighbor, the University of Oregon. Oregon Community has $924 million in assets. Unitus Community was noted for its “adopt a classroom” project in which employees visit and engage students in a classroom throughout the school year. Unitus has $829 million in assets. Advantis was recognized for supporting Doernbecher Children’s Hospital and the Portland Sunshine Division. Advantis has $722 million in assets. First Tech CU, Beaverton, was honored in the Medium Company category for its donations to hunger and child abuse prevention, and literacy and environmental causes. First Tech has $2.2 billion in assets. Rivermark Community CU, Beaverton, was honored for its support of children’s charities and contributions to Clackamas Parks and Recreation. Rivermark has $497 million in assets. OnPoint Community CU, Portland, was featured in an award for Innovative Partnerships that recognized the credit union’s corporate internship program at De La Salle North Catholic High School in Portland. The school requires each of its 300 students to work five days a month in a professional work environment. OnPoint provides three annual full-time-equivalent positions for students. OnPoint has $2.8 billion in assets. Forest Park CU, Portland, also made the top rank of corporate givers. The credit union has $44 million in assets.

SW Corporate webinar Thurs. Economic Forum still on

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PLANO, Texas (9/29/10)--Southwest Corporate FCU will update its member credit unions in a webinar Thursday at 3 p.m. CT. It also announced its annual Economic Forum will go on as scheduled. Southwest Corporate is one of the three corporates placed into conservatorship Friday by the National Credit Union Administration in actions taken to stabilize the corporate system. Services at the corporate continue uninterrupted, and shares continue to be insured and guaranteed, Southwest Corporate said Tuesday in its newsletter, eFacts. It also announced that its 33rd annual Economic Forum will take place as scheduled Oct 26-27 in Frisco, Texas. It will provide leading economists' forecasts for the nation's evolving financial landscape and offer an opportunity for member credit unions to discuss Southwest Corporate's future and meet its new CEO, Dianne Addington. Southwest Corporate also will offer its optional CU Financial Management Seminar on Oct. 25. Early bird discounted registration ends Oct. 8. For more detail, use the link.

Merger mortgage stories get CUNA input

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WASHINGTON and MADISON, Wis. (9/28/10)--Credit unions as an option for mortgages and credit union merger trends are topics addressed this past weekend in The New York Times and a weekly publication from the Washington Post. Both newspapers turned to Credit Union National Association (CUNA) economists for analyses. Home buyers have turned to credit unions for years as a less expensive alternative for mortgages, said the Times (Sept. 24). CUNA Chief Economist Bill Hampel told how easy it is to find a credit union. "Most people don't know this, but if you're walking down the street, you'll probably be able to find within one to two miles a credit union you can join," Hampel said. He noted that the nation's nearly 7,500 credit unions rarely offer subprime products to their 90 million members. Because of their not-for-profit status, credit unions "have no incentive to talk the member into some wild mortgage," he said. Credit unions in 2007 granted $60 billion in first-time loans, which include first mortgages and refinancings. Last year the total was $94 billion--up 50%. So far this year, credit unions have granted $31 billion in mortgage loans. Hampel also pointed out that credit unions are "just as sophisticated as a community bank but not crazy like Wall Street." The article also referred to mortgage programs of Sidorsky Financial CU, Stratford, Conn.; Affinity FCU, Basking Ridge, N.J., and Municipal CU, New York. Capital Business, a weekly local business publication launched by the Washington Post, discussed the merger plans of Navy FCU, Vienna, Va., and USA FCU, San Diego (Sept. 27). CUNA Senior Economist Mike Schenk talked with the Post reporter for the story, providing background on merger trends. The article cites CUNA statistics: the number of credit unions in the U.S. dropped to 7,445 this year from 10,316 in 2000, largely because of mergers.

New study Michigan CUs lead in trust

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LANSING, Mich. (9/28/10)--More than twice as many Michigan credit union members have an outstanding relationship with their financial institution than do bank customers, according to a Michigan Credit Union League-commissioned Harris Interactive study. The league announced results of its first statewide consumer study Monday. The study concluded that 76% of credit union members are "absolutely confident" that their institution is the best place for their financial needs, while 31% of bank customers felt that way. “Credit unions’ not-for-profit structure means that the institution is always working in the best interests of the members,” says David Adams, league president/CEO. “This study shows that bank customers are moving their money to credit unions, including 15,000 people in Michigan through the first half of 2010, because of higher savings rates and lower loan rates and fees.” Harris Interactive found clear differences between Michigan banks and credit unions in member/customers’ satisfaction, loyalty and willingness to recommend the institution:
* Of credit union members surveyed, 67% believe their financial institution operates with their best interests in mind, compared to 21% of bank customers. * Of bank customers, 31% said they would “definitely” recommend their financial institution to a friend, family member or co-worker--less than half the 64% of credit union members who would do so. * Seven out of 10 Michigan credit union members will “definitely not” switch their primary financial institution in the next year. Three out of 10 bank customers agreed. * Credit union members gave their financial institution more positive ratings than bank customers for quality of service, overall value, problem resolution, transparency, trust and community involvement.
“Consumers are looking for alternatives, seeing this as a good time to switch to a financial institution they trust,” says Adams. “Credit unions are dedicated to helping people lead more secure financial lives as well as being safe, secure, federally-insured institutions.” A total of 419 bank customers and 409 credit union members--Michigan residents at least 18 years old--were surveyed online between Aug. 20 and Aug. 30.

States form corporate CU task forces

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ALBANY, N.Y. and ONTARIO, Calif. (9/28/10)--Credit union leagues and associations from several states have formed separate corporate task forces following the National Credit Union Administration’s (NCUA) announcement Friday of corporate rule changes and conservatorship of three corporate credit unions. The board of directors of the Credit Union Association of New York authorized the formation of a task force Monday to assist the New York credit union community in assessing future needs and options regarding corporate credit union services. The move was made after NCUA’s recent conservatorship of Members United, Southwest and Constitution Corporate FCUs and dramatic changes to the corporate credit union system. Corporate credit union services include: settlement, receipt and exception processing, brokerage and advisory services, lending and investments. The task force comprises credit union leaders representing various credit union asset sizes statewide. Staff support for the task force will be provided by the association. “The task force will seek options and solutions that best harness the power of cooperation and unity that continue to be the cornerstone of the credit union movement,” said William J. Mellin, association president/CEO. Also, a group of Western-state credit unions have formed the Corporate Realignment Task Force, a volunteer group dedicated to determining what related services credit unions need and will support, and creating a sound, cooperative system to provide those essential continuing services. The task force defines the services as including: item processing, payment system and settlement services, short-term liquidity associated with the settlement process, and possibly investment advice and other related permissible services. “It’s clear that credit unions need and will support continuing item processing and payment system/settlement services, and a cost-effective, collaborative system to do that would be best--aggregation and economies of scale are essential,” said Task Force Chairman Jeff York, CEO of CoastHills FCU, Lompoc, Calif. “Credit union leaders need a system they will have confidence in, and that's what the task force intends to create, with involvement and input from the credit union community,” York added. “The good news is that there is no need to rush to judgment--changes in the corporate system will occur over the next couple of years, so there is time to plan this out and transition to a new system in a timely and logical way. We intend to keep credit unions involved and informed, and expect to have a detailed plan outlined by year-end.” Initial staff support for the Western states’ task force is provided by California and Nevada Credit Union Leagues’ staff. Richard M. Johnson, retired CEO of WesCorp, San Dimas, Calif., is a consultant. The task force also intends to make use of professional staff currently at WesCorp as organizational efforts proceed.

NASCUS state summit in Texas this week

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SAN ANTONIO, Texas (9/28/10)--Texas credit union system leaders, state and federal regulators and dual chartering supporters will join the National Association of State Credit Union Supervisors (NASCUS) Thursday through Saturday in San Antonio, Texas for the State System Summit. The events begin today with NASCUS’ business meetings and committee meetings Wednesday. Also on Wednesday, NASCUS will offer a Directors College for Texas credit union directors. The week will culminate with the State System Summit Thursday through Saturday. “This year’s NASCUS State System Summit agenda spotlights innovation in regulation and credit union operations in this time of economic uncertainty,” said NASCUS President/CEO Mary Martha Fortney. “NASCUS expects this meeting to be rich with dialogue and ideas on how state credit unions can continue to thrive while operating in a safe and sound manner.” At the summit, Debbie Matz, National Credit Union Administration chairman, and Bill Cheney, Credit Union National Association president/CEO, will share their outlooks for 2011. John Annaloro, president/CEO of the Washington Credit Union League, plans to discuss what’s next for credit union share insurance. CUNA Mutual Group President/CEO Jeff Post will talk about emerging risks facing credit unions. Summit sessions also will feature discussions on the search for credit union income, how regulatory reform impacts the state credit union system, and a presentation on “State Innovation Across the Nation,” featuring examples of innovation in state credit union operations. During the “State Innovation Across the Nation” session, former Georgia state regulator George Reynolds will discuss innovations at credit unions in his state and innovative solutions to interstate branching issues. Charlie Grossklaus, president/CEO, Royal CU, Eau Claire, Wis., will share insights from his credit union’s purchase of 11 branches of a troubled Madison bank. Wisconsin credit union regulator Sue Cowan also will participate with Grossklaus to discuss the acquisition.

CUNA Board seat nomination received

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MADISON, Wis. (9/28/10)--Another nomination has been received for a position on the Credit Union National Association (CUNA) board of directors. The deadline for nominations is Oct. 22. Voting will take place from Oct. 27 through Dec. 17. The latest nomination has been received for Ed Williams, president/CEO, Discovery FCU, Wyomissing, Pa. A nomination has already been received for Patricia A. Wesenberg, governmental affairs liaison, Marshfield (Wis.) Medical Center CU, for District 4, Class A; Wendell Lyons, president/CEO of the Kentucky Credit Union League, District 2, Class D; and Maurice Smith, CEO, Local Government FCU, Raleigh, N.C., District 3, Class C. Positions up for election are:
* District 1, Class A; * District 1, Class D; * District 2, Class B; * District 2, Class D; * District 3, Class C; * District 4, Class A; * District 5, Class C; and * District 6, Class B.
Successful candidates will take office Feb. 28 and serve a three-year term that will expire at the adjournment of the 2014 CUNA Annual General Meeting. There is one special election: CUNA’s current District 6, Class C director will step down from the board at the end of this year. The successful candidate in that election will be seated Jan. 1 and serve through the 2012 CUNA Annual General Meeting.

Obamas Wis. visit compared with Trumans CUNA visit

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MADISON, Wis. (9/28/10)--President Barack Obama is visiting Madison, Wis., today in an event that is being compared by local media to President Harry S. Truman’s 1950 visit to the city when he dedicated the Credit Union National Association (CUNA) headquarters. President Truman was on a 6,400 mile whistle stop-train tour through 16 states when he spoke May 14, 1950, before a crowd of more than 10,000 people on the University of Wisconsin-Madison campus during a midterm election year (Wisconsin State Journal Sept. 27). The article carried a photo of Truman laying the cornerstone of CUNA’s building. Today, President Obama will speak at the university’s Library Mall to begin a four-stop tour to help elect Democrats in key states during a midterm election year, the newspaper said. Some of Truman’s remarks in Madison 60 years ago sound like they could have been written for today’s occasion, the paper noted. “This world is constantly being drawn close to us by improved communications and improved transportation,” he said. “It is also being drawn close--dreadfully close--by weapons of destruction which become ever more terrible.” To read the article, use the link.

CU movement reacts to NCUAs actions on corporates

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MADISON, Wis. (9/28/10)--The credit union movement responded over the weekend to the National Credit Union Administration's (NCUA's) announcements about its final corporate rule, the conservatorship of three corporate credit unions, and its plan to isolate and securitize the corporates' "legacy assets." The news of the conservatorships brought the most reaction. The three corporates--Southwest Corporate FCU of Plano, Texas (9.5 billion assets); Members United Corporate FCU, Warrenville, Ill. ($7.4 billion assets); and Constitution Corporate FCU, Wallingford, Conn. ($1.2 billion assets)--will join U.S. Central FCU and Western Corporate FCU under conservatorship. "While this news is disheartening, it wasn't wholly unexpected," said Dick Ensweiler, president/CEO of the Texas Credit Union League, noting, "The lasting legacy of toxic assets reached far and wide and has impacted many, many seasoned investment professionals." "Fortunately the NCUA's action does not directly impact the day-to-day operations of natural person credit unions...NCUA will operate Southwest Corporate for the time being, to ensure no loss in services to credit unions and their credit union members," he said. Ensweiler's statement Friday noted members' deposits "continue to be fully insured to at least $250,000 and credit unions in Texas remain on the whole well-capitalized. Average delinquency and charge-off rates are falling as the economy has strengthened, and are still much better than those of banks. "The main thing for credit union members and consumers to know is their money is safe in their credit union and not affected," Ensweiler said. Credit Union League of Connecticut President/CEO Tony Emerson said Friday, "NCUA has made assurances that current ongoing operations at Constitution Corporate are not affected and will continue as usual." He noted the league "will be working with the NCUA and Constitution Corporate to ensure that member credit unions are not adversely affected by this conservatorship action, and to let them as well as their members know that their deposits are fully insured and safe." "At Southeast Corporate we are generally pleased with the changes to the new corporate rule, the legacy assets plan and the path that NCUA has laid out for ensuring the safety and soundness of the corporate system into the future," said Brad Miller, CEO of Southeast Corporate FCU, Tallahassee, Fla. NCUA referred to Southeast Corporate and other non-conserved corporates as "viable corporates," he said. "Thus we are further encouraged and will continue to move forward with our plans for a new business model that continues to provide value to our members." Although there is still significant work to be done in analyzing the details of the new rule, "the final rule appears more workable than the proposed rule," Miller said. The system must evolve, he said, adding, "this transformation process has started, and while we have difficult work still ahead of us, we are making steady progress thanks to the support of our members." Another corporate, Mid-Atlantic Corporate FCU, Middletown, Pa., issued a statement about NCUA's final corporate rule and reassured its members it is solid and safe. "While in some places the regulation may be more restrictive than beneficial, overall, we believe it creates a framework within which Mid-Atlantic Corporate can continue to successfully serve our member credit unions," said Mid-Atlantic Corporate President/CEO Jay Murray (Life is a Highway Sept. 27). "While some corporate credit unions are still suffering the lingering effects of the economic crisis, Mid-Atlantic Corporate is stable and fiscally sound," Murray added. "Thanks to our member credit unions' capital commitments and a great deal of planning, we are well-positioned for the future." Pennsylvania Credit Union Association agreed that "the final rule is what we anticipated," said Rick Wargo, association executive vice president/general counsel. "From an advocacy perspective, we're pleased to see that NCUA was receptive to phasing in the capital requirements. Though we did not have unanimous input from our GAC (governmental affairs committee) or ad hoc committees, the NCUA granted some leeway on asset-liability management, which should be a positive." He also noted that PCUA is studying the legacy assets plan. "Time will tell if a good bank/bad bank approach is going to work," he added. Earlier Credit Union National Association President/CEO Bill Cheney said the new corporate rule reflected many recommendations of CUNA's Corporate CU Task Force. "We believe it offers a solid model for corporate credit unions going forward," he said (News Now Sept. 24 and 27). "There are some positive aspects for credit unions in the actions that NCUA has taken, the biggest being that credit unions will only have to cover the actual, eventual credit losses--and nothing else, including market losses." CUNA advocated for that and is "gratified the agency listened to us." However, he added that the credit losses will be "substantial"--in the estimated $8 billion to $10 billion range. CUNA is culling through everything NCUA has done "in order to have a clear picture of its impact on credit unions," Cheney said. NCUA's actions "have the potential to move us past this chapter and better position the credit union system for the future--while being invisible to consumers who rely on credit unions for affordable financial services."

Macias CO-OP Fin. Services honored by Calif. league

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ONTARIO, Calif. (9/28/10)--Anita Macias, of San Francisco-based Patelco CU, and CO-OP Financial Services in Rancho Cucamonga, Calif., are the 2010 recipients of the Kim Bannan Eternal Flame Awards. The awards, presented by the California Credit Union League, recognize efforts that contribute to the success and future of Shapiro Group credit unions. The California-Nevada Credit Union league’s Shapiro Group is dedicated to assisting small credit unions under $23 million in assets. About 270 credit unions in the two states fall under that definition. This year’s recipient in the individual category, Macias, former Patelco senior vice president and now assistant to the president, was recognized as a long-standing champion of small credit unions. Through Patelco’s Adopt-a-Credit Union program, she helped small credit unions, including Mission SF FCU, Northeast Community FCU, Peoples Community Partnership FCU and East Palo Alto FCU over the years. The program offered sponsorship opportunities, strategic planning facilitation, funds to open branches, operating grants and zero-interest-rate share certificates to credit unions. The award recipient in the company category, CO-OP Financial Services, was honored for the assistance it provided this year to help small credit unions get involved in league advocacy efforts. For the past four years, the firm has donated $10,000 annually so CEOs and board members from small credit unions can attend the Credit Union National Association’s Government Affairs Conference in Washington, D.C. This year, CO-OP helped five credit unions attend the conference. Macias and CO-OP will be honored during the league’s Annual Meeting and Convention Nov. 15-17 in Anaheim, Calif. The awards were named after the late Kim Bannan, the league’s former vice president of credit union development and research and information.

Dupaco Community Alliant receive Iowa awards

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DES MOINES, Iowa (9/28/10)--Dupaco Community CU and Alliant CU,
Jean Hoeger, president/CEO of Alliant CU, was presented with the 2010 Professional Cooperative Spirit Award at the Iowa Credit Union Annual Convention. From left are: Patrick S. Jury, president/CEO, Iowa league; Hoeger; and Pat Drennen, Iowa Credit Union League board chairman.
Dupaco Community CU received the Heritage Award for lifetime achievement at the Iowa Credit Union Convention. From left are Patrick Jury, Iowa league president/CEO; David Klavitter, Dupaco senior vice president of marketing and public relations; Joe Hearn, Dupaco chief operating officer; Ron Mussehl, Dupaco board member; Bob Hoefer, Dupaco president/CEO; and Pat Drennen, Iowa league board chairman. (Photos provided by the Iowa Credit Union League)
both in Dubuque, Iowa, won awards during the Iowa Credit Union Annual Convention Sept. 22-24 in Bettendorf, Iowa. The Iowa Credit Union League awarded Dupaco with the Heritage Award, with recognizes lifetime achievement in the credit union industry. Dupaco was the first credit union in the state to convert to a community charter from a single-sponsor organization in 1985 and was the first credit union in the state to approve direct solicitation of its employees to make political action committee contributions through payroll deducation. The league also awarded Jean Hoeger, president/CEO of Alliant CU, with the 2010 Professional Cooperative Spirit Award. Hoeger has increased Alliant’s field of membership from 1,300 members in 1982 to nearly 10,000 members today. She also has been involved with the Iowa league’s Growth Commission, Hike the Hill campaigns, and the Serving the Underserved Task Force. Hoeger also worked to implement an Individual Development Account program at her credit union and creating a relationship with Operation: New View, which offers free financial education classes to the local community. Next year’s convention will be Sept. 14-16 in Des Moines.

Money Center president pleads guilty to 50M theft

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NEW YORK (9/27/10)--A retired police officer who headed a company that provided cash to financial institutions and ATMs pleaded guilty conspiracy to commit bank and wire fraud by using the float on banks and credit unions' cash to pay his company's overhead and expenses (New York Daily News Sept. 16 and PaymentsSource.com Sept. 23). Robert Egan, 65, president of Mount Vernon Money Center in New York, faces up to 15 years in prison. He and the company's chief operating officer, Bernard McGarry, 50, were arrested in February for defrauding credit unions, banks, retailers, hospitals and universities out of $50 million. Instead of segregating cash for each client, they allegedly commingled the funds by taking cash in the vault, regardless of its source, to fill the next day's ATMs (News Now May 24). The company supplied cash to more than 5,300 ATMs, including those of Cardtronics, which reported in a filing with the Securities and Exchange Commission that the theft cost it $2.1 million and shut down nearly 4% of its ATMs. The fraud hit several credit unions, including New York Actors FCU, Northeast Alliance FCU, ADP FCU, and Atlanta's Delta Community CU. The credit unions lost a total of $5.8 million. New York-area banks and credit unions used the company to stock thousands of ATMs, while universities and hospitals employed it to help cash employees' paychecks.

Police say teller texted suspect before heist

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ARLINGTON, Texas (9/27/10)--A teller who appeared to be a victim in a robbery of an Arlington, Texas branch of Texas Trust CU is now a suspect. Police say the teller allegedly sent text messages to the robbery suspect just before the robbery. Kyle Lightner, the teller, is accused of aiding the robbery suspect, Tyce Von Franklin, in stealing $183,000 in a robbery of the credit union on Sept. 1 (NBCDFW.com and CNET News Sept. 23). The man who robbed the credit union hid in the bathroom and emerged after closing time. confronted startled employees and forced them into a vault. Four hours later, Franklin was stopped for speeding. Officers discovered marijuana, a large amount of cash, a gun and a surgical mask in his car. A surveillance camera caught Lightner texting just before the robbery, police said, adding they were suspicious because he stayed at work past his normal shift. A search of his cell phone found text messages had been sent to Franklin, urging him not to forget his sunglasses, referring to the arrival of an off-duty officer, and describing the credit union's layout. The messages also warned to stay calm so a co-worker wouldn't scream. Police are also investigating the two in relation to a $148,794 unsolved robbery at a bank where Lightner worked. In that case, he was "taken hostage" and forced into a vault by a man who, police alleged, resembled Franklin.

CU perspective on expanded hours in Maine newspaper

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PORTLAND, Maine (9/27/10)--The Maine Credit Union League provided the credit union perspective in a feature about expanding business hours to Sunday in The Maine Sunday Telegram's business section. League President John Murphy was one of three individuals from the financial sector interviewed for the article, which examined the impact and views on a recent decision by TD Bank to open some branches on Sunday, said the league newsletter Weekly Update (Sept. 24). "I am not hearing a strong call for Sunday hours," Murphy told the newspaper. "Roughly 75% of credit union transactions take place remotely now, through ATMs, debit cards, online or 24-hour call centers," he said. The article highlighted the Maine Shared Branch Network, noting it has 129 locations with Saturday access and expanded hours for members seeking the personal touch. "Convenience is the name of the game in financial services today," Murphy said. "It's every way you can respond to meeting the time needs of members." A banker interviewed in the article said Sunday hours are more expensive; to make it worthwhile, banks would need to offset the costs with growth in deposits, new accounts or other revenue, such as fees. The story praised credit unions for being especially tuned in to the desires of their members, said the league.

PCUA team heads to Haiti today to aid remittance

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HARRISBURG, Pa. (9/27/10)--A team of credit union representatives from the Pennsylvania Credit Union Association (PCUA) will leave for Haiti today to determine if PCUA and Mid-Atlantic Corporate FCU can help rebuild the country’s remittance system. The group wants to determine if Haitian credit unions can provide services to their members, and recruit new members employed in “Cash for Work” projects sponsored by American nonprofit organizations. The goal is to determine the potential for Pennsylvania credit unions to provide financial and technical resources to Haitian credit unions through partnerships that help Haiti’s credit unions rebuild and provide services for members (Life is a Highway Sept. 24). Joseph Wambach, executive director of the Pennsylvania Credit Union Foundation, will lead the PCUA team. Joining him will be Christine Woods, CEO of Keystone FCU in West Chester, and Wambach’s wife, Maryse, who is originally from Haiti. They will be joined by Dave Ackerman, CEO of USX FCU, Cranberry Township, who will be in the country to work on emergency projects through his church. The team will visit Port-au-Prince and rural areas to examine the state of Haiti’s credit unions and the effectiveness of the projects to attract new credit union members. It also will meet with staff from the World Council of Credit Unions, officials from Le Livier--a corporate credit union--and representatives from American non-government agencies. The team will return Oct. 9.

Brazilians wrap up CU partnership visit in Texas

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DALLAS (9/27/10)--Credit union executives from SICREDI, a financial cooperative group in Brazil, wrapped up their three-week tour in Texas Friday as part of a partnership program with the Texas Credit Union League. The group of 13 mid- and upper-management staff was chosen to participate in the learning experience--a key initiative of the new World Council of Credit Unions (WOCCU) international partnership program between the league and SICREDI, the league said. “This is our 26th international partnership,” said Victor Miguel Corro, WOCCU senior manager of international partnerships. “Typically our partnerships are between developed and emerging movements, but this one is between two very strong and developed credit union systems.” During the visit, the group “shadowed” staff at credit unions in Houston, Dallas and Fort Worth to garner a deeper and expansive knowledge of how credit unions in the U.S. operate. The SICREDI executives focused learning on leveraging technology, enhancing financial education outreach, improving operational efficiencies, and using new and innovative tools to spur membership development. Also, the SICREDI group received English language instruction. Language is one of the key aspects of that development. Texas credit unions that participated in the immersion program are:
* Energy Capital CU, Houston; * Smart Financial CU, Houston; * PrimeWay FCU, Houston; * People’s Trust FCU, Houston; * InTouch CU, Dallas; * American Airlines CU, Fort Worth; * Resource One CU, Dallas; * Neighborhood CU, Dallas; * Unity One CU, Fort Worth; and * EECU, Fort Worth.
“During our visit we had the opportunity to share best practices between our organizations, and as we began our dialogue, we found that many parallels exist between our organizations,” said Randall Dixon, president/CEO of Energy Capital CU. “Many of the similarities related to internal and external services, as well as board governance and organization development.” “Although we're in different countries, using different systems, and serving different cultures, the process of delivering service excellence is the same for everyone,” said Kent Lugrand, president/CEO of InTouch CU. SICREDI is one of the major cooperative systems in Latin America, with 12,000 employees, 1.6 million members and more than 1,000 service centers. It has a unified brand and standard policies, procedures and bylaws. Despite their shared identity, SICREDI cooperatives are still unique and local, just like credit unions in the U.S. The leaders of both entities, Dick Ensweiler, league president/CEO, and Manfred Dasenbrock, chair of SICREDI’s holding company, say they are confident that the success of this first joint initiative will set the stage for a fruitful and long-lasting partnership. Both understand the significance of the international partnerships program because each plays a role in international development, the league said. Ensweiler chairs the Credit Union National Association’s World Leadership Development Committee, and Dasenbrock serves on the World Council’s board of directors.

Card portfolio balances grew for CUs in Q2

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PORTLAND, Ore. (9/27/10)--Balances grew at U.S. credit unions in the second quarter, according to AssetExchange, a credit union credit card portfolio advisory and brokerage firm in Portland, Ore., that has analyzed second quarter 2010 credit union credit card portfolio trends. Data provided in the analysis are for credit card portfolios larger than $1 million in each time period and are based on National Credit Union Administration call report data. For the roughly 2,150 credit unions with credit card portfolios of $1 million and larger:
* Outstanding balances grew at an annual rate of 7.4% between June 2009 and June 2010 to $34 billion, continuing the trend of mid-single digit growth. Total assets at the credit unions grew at an annual rate of 6.8% during the same period. * Card accounts grew at a 3.1% annual rate to 12.6 million. * Cards as a percentage of total assets increased to 4.6% in the second quarter of 2010, up from 4.5% in the second quarter of 2009. * Credit card penetration continued to trend near 18%. * Credit card delinquencies fell to 1.7% from 1.9% between June 2009 and June 2010. Credit card charge-offs rose to 4.5% from 4.2% during the same period.

Court upholds corporates right to sue appraiser

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BIRMINGHAM, Ala. (9/24/10)--An appeals court in Alabama has upheld a corporate credit union's right to sue the appraiser who provided valuation of U.S. Central FCU's Paid-In-Capital (PIC) shares for conversion before U.S. Central suffered losses and went into conservatorship. The U.S. Court of Appeals for the 11th Circuit in Birmingham, Ala., ruled that the Alabama-based Corporate America CU can sue RubinBrown LLP, a St. Louis-based company hired to prepare a valuation of the PIC shares. The firm was hired after U.S. Central reported a write down in 2008 of mortgage-backed securities and its credit and debit ratings were downgraded, according to the court report. U.S. Central converted $450 million of member capital into PIC shares, which became worthless, said the suit. RubinBrown had challenged a lower court's rejection of its defense that Corporate America was bound by an arbitration clause as a third-party beneficiary. However, the appeals court ruled that a binding-arbitration clause in the agreement with the appraiser could not prevent the suit. "Corporate America is not a party to the contract between RubinBrown and U.S. Central ... After a review of the record, we conclude that these arguments are without merit," said the appeals court, which agreed the arbitration agreement in this case "was party specific." It also concluded that the corporate should not be compelled to arbitrate its claims under the doctrine of "equitable estoppel." "Equitable estoppel precludes a party from claiming the benefits of a contract while simultaneously attempting to avoid the burdens that contract imposes," the court said. "The purpose of the doctrine is to prevent a plaintiff from, in effect, trying to have his cake and eat it too; that is, from relying on the contract when it works to his advantage by establishing the claim, and repudiating it when it works to his disadvantage by requiring arbitration," the appeals court said in the ruling. "Because Corporate America's claims are not intertwined with the contract between U.S. Central and RubinBrown, the court did not abuse its discretion in declining to compel arbitration under the doctrine of equitable estoppel," the ruling said.

Invest in America pledges 700K to Biz Kid

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LIVONIA, Mich. (9/24/10)--CU Village, through its Invest in America (IIA) program, has pledged $700,000 toward the national underwriting of Biz Kid$, an Emmy Award-winning, credit union-funded public television series that teaches kids about money management and entrepreneurship. IIA's pledge makes it one of the largest independent Biz Kid$ sponsors, alongside the National Credit Union Foundation (NCUF). Since the series launched in January 2008, the nationally broadcast program has delivered each week financial education to markets with more than 192 million households. It also has reached 1.2 million students and teachers via the companion classroom curriculum. In addition to the $700,000 contribution, to help achieve full funding for the program's fourth season and to jump-start Season Five funding, IIA is asking its credit union and league partners that receive Sprint marketing incentives to join it to raise the remaining $1 million needed to complete the 2010 season. This can be achieved if IIA partners donate 10% of their year-end rebate to support the program, said CU Village. "Since its inception, American's credit unions have exclusively funded Biz Kid$ as our industry's gift to financial education," said CU Village CEO David Adams. To date, $8.55 million has been contributed to fund the program, he added. In most cases a 10% donation will not impact IIA partners because the Sprint program has grown the past year, Adam said. He calculated that if each of the 2,600 credit union and 46 league IIA partners opts-in to participate, Biz Kid$ will see an additional $1 million in funding to complete its fourth season and establish a sustainable funding source for the future. "This is an incredible gift that CU Village has given the entire credit union system," said John Annaloro, president/CEO of the Washington Credit Union League, whose foundation currently administers Biz Kid$ on behalf of America's Credit Unions. "IIA's underwriting gift and future funding model ensure that the credit unions' gift of financial education can remain just that--the credit union system's exclusive gift. This is a shining example of what our system can do when we work together," Annaloro added. Biz Kid$ has been honored with a Herb Wegner Award, a Daytime Emmy Award, four Emmy nominations, a first place Telly Award and an Environmental Media Award. IIA was created to help credit unions grow, support U.S.-based companies such as General Motors and Sprint, and provide members with exclusive discounts. For more information, call 800-262-6285 or e-mail info@cu-village.com.

Thirty scholarships awarded to attend Community CU conference

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MADISON, Wis. (9/24/10)--Credit Union National Association (CUNA) and CO-OP Financial Services are announcing that 30 scholarships have been awarded to credit union professionals to attend the CUNA Community Credit Union & Growth Conference Oct. 6-9 in Boston. CO-OP Financial Services sponsored the scholarship fund. “Due to an overwhelming response and need by credit unions, we have tripled the scholarships being offered from 12 to 30,” said Todd Spiczenski, vice president of CUNA Center for Professional Development. “The conference is dedicated to helping industry professionals grow their credit unions, education that is essential in this difficult economic and changing regulatory environment,” said Stan Hollen, president/CEO, CO-OP Financial Services. Through the scholarship, credit union personnel can take advantage of educational and networking opportunities available at the conference. The conference offers educational sessions for credit unions looking to grow membership and revenue. Scholarship recipients have been notified, CUNA said. For more information, use the link.

MDDCCUA names Jennifer Simmons as interim CEO

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COLUMBIA, Md. (9/24/10)--Jennifer Simmons, with 20 years of credit union industry experience, has been named interim president/CEO of the Maryland and the District of Columbia Credit Union Association (MDDCCUA), announced the association's board of directors. Simmons' appointment will be effective Sept. 27. She will lead the organization from its headquarters in Columbia, Md., until a successor to outgoing MDDCCUA CEO Mike Beall is chosen. Simmons, who has been with the association since June 2006, currently serves as chief membership officer. Prior to her employment, she held management positions at Signal Financial FCU and was on the staff of NIH FCU and Montgomery County Teachers. Beall will remain as adviser to Simmons and the board through Oct. 22. He is leaving to become president/CEO of the Missouri Credit Union Association upon the retirement of Rosie Holub. The MDDCCUA board chose Simmons to lead the transition "because of her deep knowledge of area credit union leaders, her strong stewardship of the organization's strategic plan, and her ability to manage the staff to continue a strong level of service during this crucial time for credit unions," said MDDCCUA Chairman Miguel Boluda. Simmons pledged "to continue to help credit unions in the Maryland/D.C. region as they navigate the challenges of the economy and the current legislative and regulatory environment. "MDDCCUA will be starting its fall cooperative advertising effort, holding its Volunteer Leadership Conference and proceeding with budget and strategic efforts," she added. MDDCCUA said it has signed a contract with D. Hilton Associates, an industry executive search firm for the search for a new CEO. It will be taking steps on the search process over the next several weeks.

CU closes branch until more police added

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STEUBENVILLE, Ohio (9/24/10)--An Ohio credit union is closing one of its branches until police protection is restored. Valley One Community FCU, a $30.5 million asset credit union based in Steubenville, Ohio, is temporarily closing its Mingo Junction, Ohio, branch because of police layoffs and is telling members to use its Steubenville branch (WTOV9.com Sept. 23). The credit union said it had no comment on the matter when contacted by News Now. “Our board, at the last meeting, voted to close temporarily until more policemen were added,” Valley One First Vice President Dominic Duco told the TV station. Valley One Community board officials are worried because the Steubenville branch was robbed a few years ago, Duco added. The armed robbery occurred with a full complement of police officers present. The credit union said it was concerned about the safety of its employees. At times--such as paydays when it cashes checks--the credit union holds up to $100,000 in cash, Duco told the station.

Savings debate highlights WOCCU Pacific Tech Congress

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PORT MORESBY, Papua New Guinea (9/24/10)--Savings accessibility and other critical issues formed the focus of the World Council of Credit Unions’ (WOCCU) Pacific Credit Union Technical Congress, co-hosted by the Credit Union Foundation Australia (CUFA) and the Federation of Savings and Loan Societies of Papua New Guinea (FESALOS).
Click to view larger image From left, World Council of Credit Unions (WOCCU) Executive Vice President and Chief Operating Officer Brian Branch, Federation of Savings and Loan Societies Ltd. of Papua New Guinea (FESALOS) board Chair Michael Koisen and Credit Union Foundation Australia CEO Peter Mason met at WOCCU's Pacific Credit Union Technical Congress in Papua New Guinea last week. FESALOS became WOCCU's newest member in April.
Click to view larger image Alan Cameron, left, CEO of the Idaho Credit Union League and Federation of Savings and Loan Societies Ltd. of Papua New Guinea board Chair Michael Koisen discuss regulatory issues. The two organizations are paired in the World Council of Credit Unions’ International Partnerships Program. (Photos provided by the World Council of Credit Unions)
Eighty-four participants from Australia, the Federated States of Micronesia, Fiji, Papua New Guinea, Solomon Islands, Timor Leste, Tonga, Tuvalu, Vanuatu and the U.S. gathered last week in Port Moresby for the three-day event. Sessions ranged from the changing financial marketplace, to increasing scrutiny from regulators, to global trends in financial regulation. The topics also attracted local television news coverage. Credit unions in the South Pacific are responding to an increasing demand for savings products, but savings growth is hampered by legislation that caps the interest rates for credit union savings accounts to near 7%, while the inflation rate hovers near 10%. Banks have no restrictions on the savings account interest rates they can offer, causing credit unions difficulty competing for savings market share. Pacific credit unions also operate with a cap on loan interest rates at 1% per month and are working to adjust to greater regulatory scrutiny at their compliance with accounting standards, capital and liquidity requirements, and consumer protection standards, a situation that sounded familiar to conference participant Alan Cameron, president/CEO of the Idaho Credit Union League. “In Idaho, loan interest rates were once limited by state legislation,” said Cameron. “We had to show legislators that the interest rate controls prevented credit from flowing into Idaho and providing funding for local economic activity. When the limits were removed we had funding for more jobs and economic activity.” While credit unions in the South Pacific have not experienced the investment or delinquency losses that have affected other regions, they face increasing consumer pressure to demonstrate more professional management and internal governance. CUFA and WOCCU are working with the newly formed Oceanic Confederation of Credit Union Leagues to provide management certification training to credit union leaders and continuing education through the Pacific Congress. The two-year Manager Certification Program, held in conjunction with the congress each year, graduated 14 participants who completed their second year last year in Fiji. The program initiated a new group of 42 credit union leaders from Fiji, Papua New Guinea and Timor Leste. “Credit unions in the South Pacific are under tremendous pressure to update their model to keep consumer confidence, comply with regulations and compete with new technology,” said Brian Branch, WOCCU executive vice president and chief operating officer. “While the values of financial empowerment remain constant, the financial model, the products and the technology evolve.” The recently formed Global Women’s Leadership Network held a half-day Leadership Development Workshop preceding the congress for women credit union executives and board members interested in expanding their leadership capacity. Of the 23 congress participants, 18 women participated in a series of team-building exercises, group discussions and presentations that focused on strategic thinking, increasing self-confidence and improving public-speaking skills.

Wis. regulator seeks more staff to handle CU complexities

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MADISON, Wis. (9/24/10)--The Wisconsin Department of Financial Institutions wants to hire more staff to help it better monitor larger and increasingly more complex credit unions. The state’s financial industry regulator is looking to hire another examiner and a new staffer to help with expanded oversight of investment advisers (The Milwaukee Journal Sentinel Sept. 23). The department noted in its budget request that the larger size of credit unions--Wisconsin has six with more the $1 billion in assets--along with their expansion of services and increasing complexity, makes it harder to stay on pace with the exam schedule, the newspaper said. The examination staff is susceptible to extended illness, retirements and turnover, the department said. “It takes about a year to fully train an examiner, and particularly with the incredible changes in the rules as a result of the Dodd-Frank legislation, it requires quite a bit more training of all our examiners,” department chief Lorrie Keating Heinemann told the paper.

CU System brief (09/23/2010)

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* ST. LOUIS (9/24/10)--Janice Mosby, a member of St. Louis Community CU's Board of Directors for 40 years, died Tuesday. She served as a volunteer for the credit union in numerous capacities, including as chairperson, vice chairperson, a member of the Pension Oversight Committee and board member of the credit union's foundation. She joined the board in 1970 of what was then St. Louis Teachers CU with $10 million in assets and one location. Today it has $195 million in assets with eight locations and 40,000 members. A former principal for St. Louis Public Schools, she was an active volunteer in the community ...

CU System briefs (09/22/2010)

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* FEDERAL WAY, Wash. (9/23/10)--The Washington Credit Union League introduced a new "Credit Union Song" at its 77th Annual Business Meeting Sept. 14, which the league says is a testament to credit unions' work for the greater good. Written and performed by Kitsap CU's Brandon Johnston, the "Credit Union Song" tells what credit unions do, whether they serve businessmen or blue collar. An mp3 of the new tune is available for free by downloading it from the Washington league's website Visitors to the site can also watch Johnston's debut of the song at the league's meeting ... * BATON ROUGE, La.(9/23/10)--Louisiana State University fans at the LSU vs. Mississippi State University game were treated to a Chicken Dance Flash Mob, coordinated by EFCU on Sept. 18. Staff and members of EFCU began a seemingly spontaneous "Chicken Dance" at the top of "Victory Hill" outside LSU's Tiger Stadium an hour before game time. One staffer and a chicken-costumed participant began to dance, with the Flash Mob growing to more than 40 dancers. The Flash Mob promoted EFCU's "Put Your Eggs in One Basket" credit card campaign, incited laughs, and was joined by a few spectators. Purple and gold plastic eggs stuffed with coins and product flyers and "Chicken Dance" t-shirts were distributed to the audience. "We may not be great chicken dancers, but we do have great rates and excellent financial products," said Cris Melancon, vice president of marketing at the credit union. The dance "was designed to get the Baton Rouge community excited about the start of the LSU football season and aware of our low rate MasterCard," he added ... * WARMINSTER, Pa. (9/23/10)--Freedom CU's new Mobile Banking service has signed up 900 members since the service launched on Sept. 1. The more than $450 asset credit union's new service means members can bank and find branches and ATMs anytime on their mobile devices, including iPhone, iPod touch or iPad. Members can check account balances and activity, transfer funds and make loan payments, search account history and details, contact the credit union via phone at the touch of a button, avoid fees, and map the nearest location and get its phone number ...

October is Co-op Month

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WASHINGTON (9/23/10)--The National Cooperative Business Association (NCBA) and cooperatives--including credit unions--across the nation will celebrate the cooperative difference and business model during October, which is Co-op Month. The theme for Co-op Month 2010 is "Local. Trusted. Serving You." The theme highlights that cooperatives are trusted and focused on their local communities, said a press release from NCBA on Yahoo! News (Sept. 22). "Now more than ever people need locally owned and controlled cooperatives to be a strong foundation to our economy," said Paul Hazen, NCBA president/CEO. "We should all take time to celebrate the ways that co-ops continue to stabilize our local communities during hard times." This year, Co-op Month is being coordinated with other events, including International Credit Union Day on Oct. 21 and Co-op Week, on Oct. 17-23. Many co-ops will host open house events during Co-op Week. Some statistics to consider:
* More than 29,000 cooperative businesses in the U.S. generate more than two million jobs and create more that $74 billion in wages annually, according to a study by the University of Wisconsin Center for Cooperatives, with support from the U.S. Department of Agriculture Rural Development. * Co-ops account for more than $654 billion in revenue, representing a strong business model that contributes to national and local economies, keeps profits local and pays local taxes to help support community services. * The nation's 8,200 credit unions are cooperatives, with 92 million members. * More than 900 electric cooperatives deliver electricity in the U.S. to 42 million people in 47 states--equal to 12% of the nation's population. * In the U.S. more than 1.2 million families of all income levels live in homes owned and operated through cooperative associations. * Farmer co-ops provide more than 250,000 jobs, with a total payroll over $8 billion. Total profits for farmer co-ops in 2008 were $4.2 billion, which was either returned to farmer members or reinvested in the co-op to benefit members and local communities. * More than 50 million Americans are served by insurance companies owned by or affiliated with cooperatives. * More than 20 cooperatives have annual sales in excess of $1 billion, including Land O' Lakes Inc.; Cabot Creamery, which sponsors the Credit Union National Association's Home and Family Finance Radio Show; Ocean Spray; and ACE Hardware. * Food cooperatives have been a favorite for healthy food for more than 30 years.

Court Breach victims cant sue--no loss harm ID theft

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PORTLAND, Maine (9/23/10)--Victims of the massive data breach that hit Hannaford Bros. supermarkets in 2008 cannot sue for damages if they did not suffer financial losses, physical harm or identity theft, the Maine Supreme Judicial Court ruled Tuesday. In a unanimous decision, the court ruled that time and effort alone do not constitute an "injury" for which damages may be recovered under Maine law (Sun Journal Sept. 22 and Associated Press Sept. 21). Last year U.S. District Court Judge D. Brock Hornby had asked the higher court to decide whether consumers who had been reimbursed for their losses related to stolen credit card numbers have the right to seek damages for the time and effort it took them to straighten our their accounts. The Hannaford breach occurred between Dec. 7, 2007, and March 10, 2008, when cyber criminals hacked into the grocery store chain's system and accessed card numbers used at 165 Hannaford supermarkets in the Northeast and 106 Sweetbay stores in Florida. Of the four million cards compromised, at least 1,800 numbers stolen were used for unauthorized fraud. The breach was discovered Feb. 27, 2008, and made public March 17, 2008 (News Now April 3, 2009). The breach caused many credit unions to reissue credit cards to members whose information was compromised. It also resulted in more than 24 lawsuits filed against Hannaford and its parent compnay, Delhaize America Inc. The cases were consolidated into one central complaint. Attorneys had sought damages for time and money lost as well as damages because Hannaford allegedly knew about the breach three weeks before it was made public. The delay, said attorneys, exposed consumers' accounts to more fraud (News Now Aug. 1, 2008, and April 3, 2009). If there is no appeal, the decision would end the lawsuit against Hannaford.

Two more nominations received for CUNA Board (09/22/2010)

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MADISON, Wis. (9/23/10)--Two more nominations have been received for positions on the Credit Union National Association (CUNA) board of directors. The deadline for nominations is Oct. 22. Voting will take place from Oct. 27 through Dec. 17. The two latest nominations are for Wendell Lyons, president/CEO of the Kentucky Credit Union League, District 2, Class D; and Maurice Smith, CEO, Local Government FCU, Raleigh, N.C., District 3, Class C. A nomination has already been received for Patricia A. Wesenberg, governmental affairs liaison, Marshfield (Wis.) Medical Center CU, for District 4, Class A. These positions are up for election:
* District 1, Class A; * District 1, Class D; * District 2, Class B; * District 2, Class D; * District 3, Class C; * District 4, Class A; * District 5, Class C; and * District 6, Class B.
Successful candidates will take office Feb. 28 and serve a three-year term that will expire at the adjournment of the 2014 CUNA Annual General Meeting. There is one special election: CUNA’s current District 6, Class C director will step down from the board at the end of this year. The successful candidate in that election will be seated Jan. 1 and serve through the 2012 CUNA Annual General Meeting.

Protect Your ID Week set for Oct. 17-23

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ARLINGTON, Va. and SILVER SPRING, Md. (9/23/10)--The Council of Better Business Bureaus (BBB) and the National Foundation for Credit Counseling (NFCC) are encouraging consumers and small-business owners nationwide to fight identity theft by taking part in the third annual Protect Your Identity Week (PYIW), Oct. 17-23. This will be of note to credit unions that serve members and small businesses. The Credit Union National Association is one of the national organizations supporting the initiative. Identity theft continues to grow, with the number of victims in the U.S. reaching 11.1 million in 2009, a 12.5% increase over the previous year, according to Javelin Strategy and Research. Threats exist online and offline, and no one is completely safe, but there are steps consumers can take to protect themselves against identity theft and limit the damage, said NFCC in a press release. As part of the third annual PYIW, consumers and small business owners can take advantage of:
* More than 150 events in communities nationwide. Most offer educational workshops, credit report reviews and shredding. Events are free and open to the public. Some locations also will provide electronic disposal for mobile phones and computer equipment. * Easy-to-follow tips and resources available online at www.ProtectYourIDNow.org, where consumers can learn how to fight identity theft and data breaches. Advice in Spanish also is available at www.cuidesuidentidad.org. * A self-assessment quiz at www.ProtectYourIDNow.org to determine a consumer’s personal risk of identity theft. * Daily blogs from nationally known identity theft expert and McAfee consultant, Robert Siciliano.
“Fighting identity theft is a constant battle and the attacks can come at you from all fronts,” said Stephen A. Cox, BBB president/CEO. “Because we are all potential victims, it’s important that we all take steps to fight identity theft, and PYIW is a great place to start.” “Last year, tens of thousands of people across the country benefited from the events and resources provided through PYIW,” said Susan C. Keating, president/CEO of the NFCC. “Also, more than 500 tons of sensitive documents were shredded, all for free. This year, we anticipate having an even larger impact due to the increased number of events and resources available to consumers. For instance, at some shredding events participants can even take part in breaking a Guinness world record. This in itself should create a lot of interest.” As part of PYIW, Cintas Corporation, national shredding partner for PYIW, is providing free document destruction at events nationwide with the goal of making the Guinness Book of World Records for the most paper shredded in a 24-hour period.

California league to honor CU leaders

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ONTARIO, Calif. (9/23/10)--The California Credit Union League will honor six credit union leaders and volunteers during its annual meeting and convention Nov. 15-17 in Anaheim, Calif. Henry Wirz, CEO of SAFE CU, North Highlands, will receive the Leo H. Shapiro Lifetime Achievement Award. Wirz has worked as a senior executive in the credit union industry for more than 30 years. He joined SAFE CU has controller in 1979, and replaced the retiring CEO in 1984. Other recipients include:
* Brett Martinez, CEO, Redwood CU, Santa Rosa, Distinguished Service Award; * Chris Coursen, CEO, Fairview Employees CU, Costa Mesa, Distinguished Service Award; * Sherman Grancell, California Bear CU, Los Angeles, Outstanding Volunteer Award; * Dhara Sanchez, chief operating officer, Inland Empire CU, Pomona, Tomorrow’s Star Award; and * Jay Lee, risk management officer, CalCom FCU, Torrance, Tomorrow’s Star Award.
Martinez has served as California league board chairman and as chairman of the search committee for a new league president/CEO, following Bill Cheney’s departure for the Credit Union National Association. Coursen is a graduate of Western CUNA Management School and Stanford University’s executive development program. Grancell has served on the board of California Bear CU for 58 years. Sanchez is a graduate of Western CUNA Management School and serves as her credit union’s chapter regional learning center chairman. She also is involved with the California and Nevada Youth Involvement Network. Lee started his credit union career in 2001 after migrating from the Philippines and is class secretary for Western CUNA Management School.

Table Rock Service 1 FCUs have merged

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SHELL KNOB, Mo. and NEOSHO, Mo. (9/23/10)--Table Rock FCU in Shell Knob, Mo., merged Sept. 1 with Service 1 FCU in Muskegon, Mich., which has a branch in Neosho, Mo. Founded in 2004 by Howard and Regina Mcllrath, the $1 million-asset Table Rock’s field of membership includes anyone who lives, works, worships or attends school in Stone County or Barry County in Missouri (The Missouri difference Sept. 22). “Becoming a part of Service 1 Federal is a great opportunity for Table Rock Federal members, and I know this partnership will provide great benefits,” Regina Mcllrath, Table Rock branch manager, told the Missouri Credit Union Association. Service 1 has $735 million in assets.

Members OK large Florida merger

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TAMPA and LAKELAND, Fla. (9/23/10)--Members of Bay Gulf CU, Tampa, approved a merger into MidFlorida CU, in Lakeland, Fla., at a Friday meeting. Bay Gulf member voters cast 92% in favor of the merger, which was approved by regulators last month (Tampa Bay Business Journal Sept. 21). The merger of assets will occur Oct. 1, but the merger of account records--which will allow Bay Gulf members access to MidFlorida’s products and services--will not take place until early 2011, the Journal said. Operating under the MidFlorida name, the combined organization will have assets of $1.55 billion and nearly 150,000 members. “The decision to merge was not an easy one, but our board felt like the products, services and customer service offered by MidFlorida would benefit Bay Gulf's membership,” Bill DeMare, Bay Gulf president/CEO, said in June. He noted that MidFlorida also is open extended hours from 7 a.m. to 7 p.m., which would benefit Bay Gulf members (News Now June 16).

Arrests made in Denver counterfeit ring targeting CUs

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DENVER (9/23/10)--Thirteen people have been indicted by a Denver grand jury as part of a counterfeit check ring that stole more than $61,800 from area businesses, including several credit unions. The alleged ringleaders, which the indictment identified as April Cotton, 47, and Derik Romero, 26, are charged with violating the Colorado Organized Crime Control Act and felony counts of computer crime, theft, identity theft and contributing to the delinquency of a minor (The Denver Channel Sept. 21). Members of the ring created the fake checks by stealing payroll check stubs and copying legitimate checks, said the indictment. The checks were drawn grocery stores, retail stores, banks and four area credit unions, including Aurora Catholic CU, Aurora; Bellco CU, Greenwood Village; Fitzsimons Community CU, Aurora; and Public Service CU, Denver. Others were charged with numerous felony counts, including conspiracy, theft, identity theft and forgery. One person was also charged with contributing to the delinquency of a minor and another with aiding escape. During the arrests, law enforcement authorities seized more than $360,000 in counterfeit checks.

Members United Corporate alliance to offer mortgage services

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LUXEMBOURG and ALBANY, N.Y. (9/23/10)--Members United Corporate FCU has established a strategic alliance with a mortgage portfolio management service to help credit unions as they take on greater demands on their portfolios while helping members through a difficult economy. The $8.9 billion asset corporate has teamed up with Altisource Portfolio Solutions S.A., which provides knowledge process services related to real estate portfolio management, asset recovery management and customer relationship management. Members United Corporate told News Now that the decision reflects the corporate's ongoing changing corporate business model. The Aug. 26 report of the Credit Union National Association's working group on corporates concluded that significant change is required of the corporates and the corporate business model. Members United is already embracing change, the corporate said in an e-mail to News Now. Typical credit union portfolios are too small, but through Members United's distribution channel and aggregating volumes, the alliance will allow credit unions to take advantage of Altisource's expertise and scale. The alliance "was established to help Members United's 2,100 member credit unions navigate through these turbulent economic times," said Kevin Brauer, senior vice president of member relations for Members United, in a press release. Credit unions are facing the opportunity to help people needing a restructuring of their existing loans while facing challenges in escalating delinquencies, the need to make prudent loan modifications, and managing and disposing of growing real-estate owned obligations. Altisource "will offer its origination, modification, loss mitigation and real estate services as well as technology to credit unions to help them effectively manage their distressed loans and mortgage application processing needs," Brauer continued. "Using the power of aggregation, this alliance will allow our members to improve service and performance while also reducing costs." Tim Bruculere, vice president of lending for Members United, noted that "due to the unique nature of each member's business, an 'off-the-shelf' solution would not address our needs." Altisource was the only provider among those interviewed "who understood our needs and offered tailored solutions across our member community." Altisource has 20 years in business and more than 3,000 employees. Its clients include one of the nation's largest subprime servicers, government agencies and lenders, servicers, investors, financial services companies and hedge funds across the country. "Members United's alignment with Altisource is consistent with the mission to enable its members to compete effectively," said William B. Shepro, CEO. "Altisource's core services and technology will be adaptable by each member and ultimately drive members' loan volumes and make members' loans worth more," he added. In 2009, the corporate originated more than $56 billion in loans. It currently manages about $50 billion across its servicing portfolios.

CUNA Mutual advocacy group saves CU employees time money

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MADISON, Wis. (9/22/10)--An employee benefits advocacy center established by CUNA Mutual Group for credit union employees needing assistance resolving insurance issues has reached $4 million in total savings since its inception. CUNA Mutual brokers group health insurance and other employee benefits programs to several companies. Ten years ago, it set up the Employee Benefits Service Center to help its Group Benefits customers resolve billing and claims issues, get questions answered and minimize difficulties that arise sometimes with insurance. The service center is a single, direct point of contact for credit unions and their employees to quickly and easily get information and assistance when they need it most, said Lynnae Cooper-Budde, director in CUNA Mutual's Group Benefits division. The center assumes the burden of resolving insurance issues. A team of four benefits specialists act as advocates for credit unions and employees by dealing directly with carriers and providers to resolve issues. "This saves time and money for credit union employees and human resources staff," said Cooper-Budde. "Our specialists know credit unions, the insurance industry and the ins and outs of carriers' policies and procedures. Leveraging that expertise, they negotiate with providers and carriers to reduce employees' responsibility through benefit clarification, claims reprocessing and written appeals. They also educate and train employees on products and plans so they're more knowledgeable about the benefits they have."
Jo Lynn Boggan of JSC FCU, Houston, turned to CUNA Mutual's Employee Benefits Service Center, which resolved a $500 health insurance claim on her behalf. (Photo provided by CUNA Mutual Group)
Jo Lynn Boggan, indirect lending buyer with JSC FCU, Houston, Texas, knows first-hand that insurance companies sometimes make mistakes. She knew her personal medical insurance claim wasn't being handled properly. The insurance company that CUNA Mutual brokered with to offer group health insurance was not covering the correct percentage of the bill--a difference of $500. After months of phone calls, paperwork and dead ends, Boggan was ready to give up her claim. Her human resources manager suggested she call the Employee Benefits Service Center. To her surprise, she called and spoke immediately with a person who understood her coverage. The CUNA Mutual benefits specialist, Sandy Melvin, took charge and pursued the claim. Ultimately, Boggan received the entire disputed amount. "Credit unions are experts at serving their members, not solving employee benefits problems," said Cooper-Budde. "Nothing is more frustrating and time-consuming than trying to decipher complicated forms, untangle billing snags or resolve rejected claims."

Study Expect large hike in prepaid debit payroll cards

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BOSTON (9/22/10)--By 2014, funds loaded by consumers into prepaid debit and payroll card accounts will increase to $164 billion from $44 billion last year, according to new research. Prepaid debit card account loads will grow to $104 billion from $25 billion. Funds loaded into payroll card accounts will also increase, to $60 billion from $19 billion, said Boston-based Aite Group LLC (pivotalpayments.com Sept. 16 and PaymentsSource.com Sept. 20). Issuing prepaid cards can help financial institutions such as credit unions and banks to better serve the low end of the customer pool, said Aite Research Director Gwenn Bezard. Financial institutions that decline consumers requesting a checking or credit card account likely will use these cards as a "second chance" card instead of turning them away, she said. Prepaid debit card users will double--to seven million users from 3.5 million. The number of payroll card users is expected to grow to 5.4 million users from 1.7 million, the research firm predicted. The combined number of prepaid debit and payroll card users likely will total 12.4 million by 2014. That figure is an increase from 5.2 million users in 2009, Aite said. Of the combined users, 28% last year used their cards as an alternative to bank accounts, while 72% used them as a temporary alternative for cash or checks. By 2014, about 25% of the active combined users will be unbanked or underbanked, an increase from the 11% of users last year. Active prepaid debit cardholders will account for 14%, compared with 8% last year, while active payroll card users will account for 11%, compared with 4% in 2009. Prepaid cards are less expensive to manage than checking accounts, which will turn more costly as banks are forced to limit overdraft fees, said Aite. Aite Group analyzed 2009 data from issuers of prepaid debit and payroll cards and from discussions with 60 payment industry executives.

Bancography names Best CU Brands

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MADISON, Wis. (9/22/10)--Bancography’s 2010 Brand Value Index (BBVI) confirms that the economic downturn has affected financial institution brands in much the same way that it has impacted the overall economy. The company, in releasing its list of best U.S. credit union brands, noted that credit unions fared well. Bancography, based in Birmingham, Ala., provides consulting services, software tools and marketing research to financial institutions to support their branch, product and brand positioning strategies. “The 2010 BBVI reflects the fluid financial services landscape as providers continue to confront the aftermath of the recession,” said John Mathes, Bancography director of brand strategy. “Credit unions that pay homage to the pillars of sound brand strategy using clear differentiation and consistency of message reap the benefit at their competitors’ expense. It is abundantly clear that in the more stable geographic sections of the country, credit union brands were able to stay on point with their members by not dialing back effective dialogue and service,” Mathes said. Texas, a state that has weathered the recession better than almost all others, dominates the rankings of the strongest brands, while only a few institutions from the Southeast and West Coast regions reached the list. Among the U.S.’s largest credit unions (assets more than $1 billion), Austin (Texas) Telco CU boasts the most powerful brand, followed by EECU, Fort Worth, Texas, and Chevron FCU, Oakland, Calif. Three Texas institutions lead the rankings of credit unions with assets less than $1 billion: InTouch CU, Plano; Navy Army FCU, Corpus Christi; and First Community CU of Houston, along with 2009’s top-ranked White Sands FCU, Las Cruces, N.M. In the large credit union asset tier, only six of 2009’s top 25 retained their top-25 status in 2010. This shows a noticeable difference from 2009’s index, where 14 institutions repeated their top-25 performance and reflects the volatility in both the industry and the broader economy, Bancography said. In the large credit union tier, only Chevron and JSC FCU, Houston, return to the top 10; while 2009’s top ranked Police and Fire FCU, Philadelphia, placed 11th in 2010. Six Texas-based credit unions, four Wisconsin-based institutions and three Pennsylvania organizations combine to occupy more than half of the top 25 slots. Notably, these three states have also remained near immune to bank failures over the past three years, Bancography said. Twelve institutions returned to the top 25 in the $100 million to $1 billion asset category, including Navy Army; White Sands; Complex Community FCU, Odessa, Texas; Golden Plains CU, Garden City, Kan.; and Red Crown FCU, Tulsa, Okla. Newcomers to the list include Gwinnett FCU, Lawrenceville, Ga.; Mennonite Financial FCU, Lancaster, Pa.; AmeriCU, Rome, N.Y; Idaho Central CU, Pocatello, Idaho; and University First FCU, Salt Lake City, Utah. All but Gwinnett represented areas of the country that have survived the financial crisis relatively unscathed, Bancography said. Despite its sizable population base, no Florida-based credit union reached the top 25 in either tier, confirming the degree to which the recession has impacted that state’s financial institutions, Bancography said. Bancography’s BBVI provides a quantitative ranking of the brand strength of all U.S. banks, thrifts and credit unions. The index ranks financial institution brands by the premium the institutions’ brands add to their underlying tangible value. In calculating brand value, Bancography quantifies the proportion of each institution’s long-term value that is attributable to the intangible factors that constitute an institution’s brand. These factors include the institution’s reputation, service quality, image and market awareness. The brand value index identifies institutions that produce financial results beyond what their capital base, market conditions and competitive environments would predict. The calculations reward institutions that display consistently strong earnings and a reasonable cost of funds. Among more than 7,000 credit unions and 8,000 banks, the top performing institutions share consistent earnings and the low cost of funds that is inherent in strong financial brands.

CUs help business Mich. league tells IDetroit NewsI

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DETROIT (9/22/10)--Credit unions are in a unique position to make loans to help small businesses, the Michigan Credit Union League told the Detroit News in a letter to the editor Monday. Credit union business lending can spark new small-business and job growth immediately, with no taxpayer expense, wrote David Adams, league president/CEO. He referred to credit unions’ efforts in Congress to lift their member business lending cap. Credit unions in Michigan have been making business loans since their inception in 1925 “in the same prudent and common-sense manner that we’ve handled mortgages and personal loans,” Adams wrote. “Credit union delinquency rates for all of these categories are significantly lower than for other financial institutions, meaning greater stability, safety and security for members,” he added. “Because of this historic stability, credit unions have money to lend to businesses right now, and we’re doing it throughout Michigan.” To read the letter, use the link.

Fifteen N.Y. CUs help teens build financial skills

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ALBANY, N.Y. (9/22/10)--Fifteen New York credit unions offered financial education sessions this summer, teaching more than 200 teens crucial financial skills in a fun, interactive setting, said the New York Credit Union Foundation.
Click to view larger image Some participants from New York City-based Union Settlement FCU’s Money & Me session gather outside the credit union during a break. (Photo provided by the New York Credit Union Foundation)
The New York Credit Union Foundation developed Money & Me, a free weeklong program, which is delivered by credit unions to their communities. Through a series of hands-on lessons, participating teens learned about budgeting, saving, maintaining a checking account, credit advantages and pitfalls, planning for the future and more. The Money & Me program uses the award-winning National Endowment for Financial Education (NEFE) High School Financial Planning Program (HSFPP) as its core curriculum, with supplemental components from other programs. Concerns about not reaching enough students through in-school programs inspired the foundation to create the week-long program. This is the second year the foundation has offered the program to credit unions. “Over and over again in this recession, we’ve seen the profound impact of financial illiteracy on people’s lives,” said Diane LaVigna-Wixted, executive director of the foundation “By teaching youth about money management today, we can help them avoid common pitfalls and gain the skills they need to achieve their goals and dreams tomorrow.”

Michigan regulator orders fake CU to cease and desist

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LANSING, Mich. (9/22/10)--Michigan's Office of Financial and Insurance Regulation (OFIR) has ordered an entity claiming to be "Whitestone Credit Union" of Grand Haven, Mich., to cease and desist from doing business. There is no legitimate Whitestone CU, said OFIR. Officials said the entity's website, www.whitestonecreditunion.com and its telephone answering service was posing as a legitimate credit union and may have attempted to steal consumers' identity and funds (Grand Haven Tribune Sept. 21). The bogus credit union allegedly encouraged consumers to apply for loans and provide personal information such as financial account numbers and Social Security numbers. OFIR Commissioner Ken Ross said that scammers were posing as a legitimate credit union to obtain information used in identity theft. He encouraged consumers who believe they were scammed to contact the OFIR.

Class Act FCU opens branch at Louisville school

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LOUISVILLE, Ky. (9/22/10)--Class Act FCU has opened a branch inside of a Louisville, Ky., school--the first in Jefferson County. Class Act, of Louisville, opened the branch at Doss High School. A grand opening for the branch was held last week, said The Courier-Journal (Sept. 19). Students and staff can open accounts at the credit union. The branch will be a “hands-on” learning classroom, according to the high school. Students will learn about finance by doing, said Superintendent Sheldon Berman. Eleven students received training to work at the credit union branch, the newspaper said. The credit union has envisioned having an in-school branch for many years, Lynn Huether, Class Act CEO, told the newspaper. Class Act has $141 million in assets.

Coach to keynote Iowa CU convention

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BETTENDORF, Iowa (9/22/10)--Fred Hoiberg, Iowa State University men’s head basketball coach, will keynote the Iowa Credit Union Convention, beginning today and ending Friday in Bettendorf, Iowa. More than 500 credit union representatives are expected to attend the conference, which is themed, “Now is the Time.” The theme was selected “to represent a call to action for credit unions to demonstrate why they are truly different from others in the financial marketplace,” said Iowa Credit Union League President/CEO Patrick S. Jury. During his closing keynote, Hoiberg plans to tell a story about playing in the National Basketball Association and how doctors found a serious heart defect during a routine physical that changed his life, said the league. The conference will offer 17 education sessions. An evening reception also will take place Sept. 22 at the River Music Experience in Davenport, Iowa. Jay Johnson of Callahan and Associates will kick off the conference’s opening session.

CU System briefs (09/20/2010)

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* ANCHORAGE, Alaska (9/21/10)--A former chief operating officer of ALPS FCU, based in Sitka, Alaska, has pleaded guilty in a U.S. District Court to a $187,348 embezzlement from the credit union (The Associated Press via Fairbanks Daily News-Miner Sept. 18). Vicki Lynn Weidenhof, 46, now of Chatsworth, Ga., took funds from the credit union's general ledger accounts and deposit the funds into her own account and into accounts of others. Sentencing has been set for be Dec. 13 ... * COLUMBIA, S.C. (9/21/10)--John Slack has been named to the new position of chief sales officer of Palmetto Cooperative Services LLC (PCS), a credit union service organization in Columbia, S.C. Slack had served as executive director of the Carolinas Credit Union Foundation since 2006. He also served with CUNA Mutual Group in a variety of roles from business consultant in 1996 to account vice president and division vice president for relationship management. For PCS, Slack will develop and maintain relationships with client credit unions and business partners. His responsibilities will include developing marketing and sales strategies for products and services, acting as primary liaison with strategic partners, pursing new product development, implementation and pricing strategies, and developing the tracking, forecasting and budgeting to support new business line development ... * MONROE, Mich. (9/21/10)--Monroe County Community CU President/CEO Paul Assenmacher will retire on April 1, 2011. During his tenure, the Monroe, Mich.-based credit union has grown from eight to 68 employees, from 2,800 to more than 30,000 members, and from $4 million to $143 million in assets. Mike Newman, current executive vice president/chief operations officer, will become president during the transition process and will become president/CEO upon Assenmacher's retirement in April. Newman has worked with the credit union since 1983. He has served on several Michigan Credit Union League committees and is currently on the league's Governmental Affairs Committee and State Issues Committee (Michigan Monitor Sept. 13) ...

Members United to lay off 27

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WARRENVILLE, Ill. (9/21/10)--Members United Corporate FCU announced Friday it will reduce its work force again and close its Indianapolis, Ind., office. The current reduction will involve 27 employees and will occur in 30 days to allow for an orderly transition, according to Members United Corporate CEO Joseph P. Herbst. "The actions announced today, although difficult, are a necessary response to the ongoing financial crisis, changes in technology, and the pending changes to the corporate regulation," said Herbst in a formal statement from Friday. He noted the changes "are an essential building block toward a new business plan resulting in the rebuilding of Members United as a smaller, leaner corporate credit union while continuing to offer the value-added services, both new and existing, that our members need. "Expenses that totaled $55.6 million for the year ended Dec. 31, 2008, have been reduced to a going forward annual run rate of approximately $30 million--a 46% reduction," Herbst said. The layoffs will result in ongoing savings to the corporate's operations of more than $2 million per year. Since October 2008, Members United has reduced its overall staff from 327 to 171, a 48% reduction in force by the end of the 2010 reductions. The layoffs have occurred at all levels of the organization, said the corporate's memo to its member credit unions. Improved telephony and computer technology means the corporate's Indiana branch staff can work seamlessly out of home offices. Much of that work has already been transitioned from the Indiana facility, with no degradation of service, said the memo to members. The corporate will conduct town hall meetings to review its preliminary strategic, business and capital plans with its member owners, beginning Oct. 27.

Mort Jester former Indiana league president dies

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MADISON, Wis. (9/21/10)--Former Indiana Credit Union League President Morton E. "Mort" Jester died earlier this month at age 83 following a two-year battle with leukemia, the league has learned. Jester worked with the league for 15 years before retiring on Jan. 1, 1988.

Irish league votes to push for stabilization fund

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DUBLIN (9/21/10)--The Irish League of Credit Unions (ILCU) plans to campaign for a stabilization fund that would assist credit unions if they encounter financial difficulty. During a special league meeting Saturday, more than 600 delegates from 505 credit unions affiliated with the league voted to push for a cross-border stabilization fund to support all credit unions, including those not affiliated with ILCU (The Irish Examiner Sept. 20). They rejected options outlined by the Central Bank's Registrar of Credit Unions, James O'Brien, in a consultation paper earlier this summer. The paper proposed a statutory bailout fund for credit unions that become insolvent. Instead, they approved a draft submission that favors giving the league full ownership and control of any new plan, and imposing full responsibility for funding the plan on the credit union movement. ILCU plans to submit its proposal by Friday, the newspaper said.

Southeast Corporate aids CU after burglar cuts power

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TALLAHASSEE, Fla. (9/21/10)--When Jacksonville, Fla.-based Florida Baptist CU lost its phone lines, security and power during a burglary, Southeast Corporate FCU went to its aid. The more than $24 million asset Florida Baptist CU was burglarized during the Labor Day holiday weekend for the first time since it was founded in 1986, said Southeast Corporate, which is based in Tallahassee. "The phone lines, security, and power were cut by the intruders," said Dottie Rice, Florida Baptist's accounting manager. "The credit union building became a 'crime scene' and we had very limited access to the building," she said. The credit union notified the corporate immediately because "we were not sure of the time frame we would be allowed back into the building or the extent of the damage to our equipment." According to Steve Wildes, Southeast member service manager, "The first thing that we assisted with for several days was emergency cash orders. This enabled the credit union to get cash into the branch quickly, while at the same time keeping the amount on hand at a bare minimum since the vault was damaged." Next, the corporate helped the credit union process automated clearing house (ACH) transactions. "Southeast assisted us in gaining APEX ACH access at an alternate location and alternate IP address in order for us to process our files," said Rice. "Our Southeast representative, Gisli Magnusson, checked on us regularly and stopped in to make sure we were okay. We were very pleased with the service and encouragement we received from everyone at Southeast Corporate," Rice added. Magnusson, who noted that "our credit unions are members of our family," said the corporate was glad no one was hurt and that the credit union "was up and running at full speed in just a day or two." The crisis brought home some definite lessons. "Through this situation, we realized how important it is to have emergency/disaster backup plans in place," Rice said. "We need to have current telephone numbers of all vendors/representatives, and to test these plans before something happens," she added, saying that the credit union's "down time was minimal based on our well-established and tested relationships with Southeast Corporate."

Missouri announces award winners

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ST. LOUIS (9/21/10)--Missouri credit unions were recognized for their activities with awards by the Missouri Credit Union Association (MCUA) at its Credit Union Convention and Exposition Awards Breakfast on Sept. 16. Ten Missouri credit unions earned first-place recognition in the state Dora Maxwell Social Responsibility, Louise Herring Philosophy in Action and Desjardins Youth Financial Education Award Programs from the MCUA (The Missouri difference Sept. 17). Missouri received 29 entries for the three award competitions. First-place winners for the Dora Maxwell award were:
* Southpointe CU, St. Louis, $20 million to $50 million in assets; * Central Missouri Community CU, Warrensburg, $50 million to $100 million; * Alliance CU, Fenton, $100 million to $200 million; * Mazuma CU, Kansas City, $200 million to $500 million; and * CommunityAmerica CU, Kansas City, more than $500 million.
Credit unions recognized as first-place winners for the Louise Herring award were:
* Neighbors CU, St. Louis, $50 million to $250 million in assets; and * First Community CU, St. Louis, more than $250 million.
Desjardins first-place winners were:
* Raytown-Lee’s Summit Community CU, Raytown, more than $50 million in assets: * St. Louis Community CU, $150 million to 500 million; and * Vantage CU, Bridgeton, more than $500 million.

Hudson Valley CUs membership booming in economys wake

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POUGHKEEPSIE, N.Y. (9/21/10)--Hudson Valley credit unions in New York state are experiencing booming credit union membership in the wake of the economic recession. Hudson Valley FCU, a $2.9 billion asset, Poughkeepsie, N.Y.-based credit union, grew its membership by 10,000 in 2009 and is on pace to the same amount of new members this year, said Stephen Nikitas, Hudson Valley president of marketing (Times Herald-Record Sept. 19). “We have been the beneficiary of the general dissatisfaction with all the issues that transpired in 2008,” he told the newspaper. “People who've been customers of big banks are frustrated with what's going on, and are looking more locally, and are looking more at credit unions than they had before.” Hudson Heritage FCU, a $222.4 million asset, Middletown, N.Y.-based credit union, is averaging 4% annual membership growth, and is expecting 10% growth for 2010, Michael Ciriello, Hudson Heritage president/CEO, told the paper. The article described how a local resident switched to Melrose CU, a $1.28 billion asset, Briarwood, N.Y.-based credit union, from her bank to obtain better interest rates on share certificates. The article also mentioned Mid-Hudson Valley FCU, a $697.5 million asset, Kingston, N.Y.-based credit union. “Hopefully consumers are understanding the mission of the credit union movement, which is to help people become financially independent, save more, buy a house,” William Mellin, president of the Credit Union Association of New York, told the paper. “Our purpose is to help American consumers realize those types of financial dreams.” To read the article, use the link.

Banks at near bottom of trust poll

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DALLAS (9/21/10)--About 52% of those surveyed for a recent Associated Press-National Constitution Center poll said they have little or no confidence in banks. The poll was conducted by GfK Roper Public Affairs & Corporate Communications. About 1,007 randomly chosen adults were interviewed through landline and cell phone calls (LoneStar Leaguer Sept. 20). Respondents also expressed distrust with the federal government and Congress (49%), and blogs (54%). Conversely, about 39% said they are “extremely” or “very confident” in small and local business leaders, the scientific community and organized religion. The poll is one of several in a series showing that consumers’ trust in banks is declining. According to a recent Chicago Booth/Kellogg School Financial Trust Index survey, 62% of American consumers surveyed said they trust credit unions.That compares with 57% for local banks, 35% for national banks and 27% for banks in which the government has a stake, according to the June poll by the Chicago Booth/Kellogg School Financial Trust Index (News Now Aug. 6). The New York Times also reported Sept. 9 that New York gubernatorial candidate Rick Lazio may have lost his bid because of his ties to JPMorgan Chase, where he worked as a lobbyist.

Two Tucson CUs hire high-profile coaches for ads

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TUCSON, Ariz. (9/21/10)--Two high-profile University of Arizona coaches find themselves as “rivals” in a contest that doesn’t involve athletics, but rather credit union promotion. Mike Stoops, the university’s football coach, is appearing in print ads and TV commercials and on billboards for Vantage West CU, a $1.1 billion asset, Tucson, Ariz., based credit union, while men’s basketball coach Sean Miller is filming TV commercials set to air this month for Hughes FCU, a $491 million asset, Tucson-based credit union (azstarnet.com Sept. 18). Bob Ramirez, Vantage West CEO, said his credit union could have chosen either coach as a spokesman, but chose Stoops because the football coach fit well with the credit union’s University of Arizona commemorative football coin promotion--in which people who open new accounts receive a coin. A campaign that began last year, the publication said. IMG, the sports marketing company that represents Miller, approached Hughes FCU about having Miller represent the credit union through 2013, Kathy Hippensteel, Hughes marketing manager, told the publication. The two credit unions said it’s a good development for the local credit union industry overall to have two well-known coaches become the faces of their credit unions. “I wouldn’t say we’re going against each other,” Ramirez told the publication. “We look at this as University of Arizona athletics promoting credit unions, as opposed to credit unions competing against each other.”

Australian CU speaks to indigenous members

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GALIWINKU, Australia (9/21/10)--Traditional CU (TCU), which is based in Darwin, Australia, will use storytelling and pictures to market to members who do not understand English or read their native languages.
Click to view larger image Morgan Hoyes, left, Traditional CU business development officer, explains to World Council of Credit Unions’ Executive Vice President and Chief Operating Officer Brian Branch the challenges of serving an indigenous population.
Click to view larger image Robyn Lacey, Traditional CU human resources manager (left), discusses the day’s activities with Galiwinku branch manager Sherilyn Dhamarrandji. (Photos provided by the World Council of Credit Unions)
Within the next month, TCU will introduce marketing materials that illustrate its services and use attached audio units--similar to those found in greeting cards--to describe its services in native languages. TCU, founded to serve the country’s Aboriginal population scattered across Australia’s Northern Territory, will resolve long-standing issues of reaching members who come from an oral tradition and who speak but do not read or write Yolngu, Kriol or other tribal languages. “We’re developing posters that show services in pictures and have pop-out audio units that can change as the language or services change,” said Morgan Hoyes, TCU business development officer. “This will better help us serve our diverse members.” The credit union is employing an approach already developed by OneTalk Technology, an Australian firm specializing in audio products to reach the country’s indigenous population. The approach combines graphics with language translations. Healthcare providers use the program for Australia’s indigenous people. It will augment the translation services provided by Aboriginal tellers and managers who make up roughly 75% of staff in TCU’s 11 branches. “We’ve heard a lot about the work TCU does in taking its services to Aboriginal people,” said Brian Branch, World Council of Credit Unions executive vice president and chief operating officer. He recently visited the credit union’s Galiwinku branch on Elcho Island off Australia’s northern coast. “The credit union was established at the request of tribal elders, and that support has been important to their ability to provide financial empowerment.” TCU, which offers basic financial services to 7,000 indigenous members, works to overcome cultural mores requiring families to share their assets with other family members who may have squandered their own funds, according to Robyn Lacey, TCU’s human resources manager. Despite the challenges, the credit union plans to open small branches in 11 more Aboriginal communities in 2011 with a goal to move farther south into the territory in years to come, she said. “Financial literacy is an issue,” Lacey said. “We’re making progress, but it is not going to happen overnight.”

Former White House staffer addresses Maine CUs forum

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FREEPORT, Maine (9/21/10)--Ari Fleischer, who served as press secretary for President George W. Bush from 2001 to 2003, spoke to nearly 100 credit union representatives at the Maine Credit Union League’s annual legislative forum Wednesday in Freeport, Maine.
Click to view larger image Former White House Press Secretary Ari Fleischer was keynote speaker at the Maine Credit Union League's Annual Legislative Forum. From left are Quincy Hentzel, Maine league director of governmental affairs; Tucker Cole, board member and chair of the league's Political Involvement Committee; Jon Paradise, league governmental and public affairs manager; Fleischer; John Murphy, league president; and Trey Hawkins, Credit Union National Association vice president of political affairs. (Photo provided by the Maine Credit Union League)
Fleischer spoke about the current political climate, noting that Maine voters can be particularly independent. He also provided a reading of notes he took on Sept. 11, 2001, a day that he spent with President Bush. The notes provided a look at the behind-the-scenes conversations and the actions that took place after the attacks. Fleischer plans to donate his notes the George W. Bush Presidential Library, being built at Southern Methodist University in Texas. Trey Hawkins, vice president of political affairs at the Credit Union National Association (CUNA), provided a presentation on credit union political advocacy and the role that credit unions can and should have in elections. “When elected officials equate grassroots to strength to votes, numbers matter,” he said.

300 attend combined Missouri Okla. CUs convention

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ST. LOUIS, Mo. (9/20/10)--More than 300 credit unions and supporters attended the Credit Union Convention and Exposition, which was kicked off Sept. 14 in Branson, Mo., by the Missouri Credit Union Association (MCUA) and the Credit Union Association of Oklahoma (CUAOK). The combined convention featured a panel discussion with Stan Hollen, president/CEO of CO-OP Financial Services; Katherine Weber of the National Association of Credit Union Service Organizations; and Darren Dutton, National Credit Union Administration supervisory examiner. Moderator was Frank Diekmann, editor of Credit Union Journal. Subjects discussed included credit unions thriving and surviving in the current economic environment. "It may mean trying one thing, then realizing you need to go to another direction, but you don't want to tread water," said Dutton. "You need to be striving and moving forward, or you'll end up sinking." Weber stressed that "cooperation was the basic premise of credit unions. When we go back to that through credit union service organizations, it is the way credit unions are going to survive. You can be much more efficient when you work together." Looking ahead to the next five years, Hollen noted that the key to success will be strategic planning. "If you don't know where you are going or how to get there, how will you move forward?" he asked. MCUA President/CEO Rosie Holub welcomed attendees, including CUAOK's new president, Gary Jones, and Michael Beall, who will become MCUA president/CEO on Nov. 1. "This is a great venue and sets the stage for credit union people doing what they do best--collaborate and cooperate," said Jones. "It's that collaboration and cooperation, extended across state lines, that is amazing to witness," he added. The convention, which ended Thursday, is the second year Missouri and Oklahoma credit unions have met together.

First nomination received for CUNA board seat

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MADISON, Wis. (9/20/10)--The first nomination has been received for a position on the Credit Union National Association (CUNA) board of directors. The deadline for nominations is Oct. 22. Voting will take place from Oct. 27 through Dec. 17. The nomination received is for Patricia A. Wesenberg, governmental affairs liaison, Marshfield Medical Center CU, Marshfield, Wis., for District 4, Class A. These positions are up for election:
* District 1, Class A; * District 1, Class D; * District 2, Class B; * District 2, Class D; * District 3, Class C; * District 4, Class A; * District 5, Class C; and * District 6, Class B.
Successful candidates will take office Feb. 28 and serve a three-year term that will expire at the adjournment of the 2014 CUNA Annual General Meeting. There is one special election: CUNA’s current District 6, Class C director will step down from the board at the end of this year. The successful candidate in that election will be seated Jan. 1 and serve through the 2012 CUNA Annual General Meeting.

Member tells station Switched to CU to avoid fees

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VININGS, Ga. (9/20/10)--The Credit Union National Association (CUNA) provided information for an Atlanta, Ga., television station in which a credit union member explained why she switched to a credit union. The segment aired on 11alive.com Thursday. In it Lisa Dobbs told why she switched to $3.7 billion asset Delta Community CU, based in Atlanta: "I just wanted to be at a place where I didn't want to worry about the fees every month," she told the station. "Not everyone reads their inserts and I just got to the place where there was just one charge too many," she added. Dobbs said Delta Community CU saves her about $150 a year. Credit union spokesman Matthew Shepherd said the Delta Community CU knows a lot of people who don't switch "because they think it will be a hassle." That's why the credit union has designated Oct. 1 for a "Switch From Your Bank" event with staff in the credit union's seven branches standing ready to help make it easier for consumers to switch. CUNA told the publication that credit union membership grew more than 10% last year.

Banks charge twice as much biz checking fees than CUs

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MADISON, Wis. (9/20/10)--Banks charge almost twice what credit unions and community-based financial institutions charge for business checking, according to a recent survey. Moebs Services recently conducted a survey of 2,300 banks and credit unions, and found that banks charge about $35 dollars for non sufficient funds fees. Credit unions and community banks charge an average of about $25--40% less than banks for business checking, Chicago-based Moebs said. The median limit on all types of transactions for banks and credit unions is 150 per month. Credit unions and community banks charge 25 cents per transaction when accountholders exceed their monthly allowance, whereas banks charge 50 cents per transaction. Also, about 38.1% of credit unions offer free business checking, compared with 31.8% of community banks, the survey noted. About 42% more big banks offer free checking this year than last.

Southeast Corporate appoints new board committee members

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TALLAHASSEE, Fla. (9/20/10)--Southeast Corporate FCU’s board of directors has announced new appointments to the board and its supervisory committee. Jerry Maughon was appointed to the board to fill an unexpired term held by the late William Marquardt. Marquardt, former CEO of City County CU, Fort Lauderdale, Fla., died Sept. 8. Maughon previously served on Southeast’s supervisory committee and is president/CEO of Okaloosa County Teachers FCU, Crestview, Fla. Jeanne Kucey, president/CEO of JetStream FCU in Miami Lakes, Fla., was appointed to the supervisory committee to fill Maughon’s unexpired term. “During a time when credit union leaders at all levels face great challenges, we are pleased to have two well-qualified individuals willing to do even more by serving the corporate’s member owners in a leadership role,” said Southeast Board Chairman Tim McMurry.

NCUA denies community charter for CU

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BRIDGETON, Mo. (9/20/10)--The National Credit Union Administration (NCUA) has denied an application by Bridgeton, Mo.-based Vantage CU to convert to a federal community charter. On a 2-1 vote, NCUA upheld the Region IV director’s denial of the application. The credit union, as part of its conversion application, had requested to include the city of St. Louis and seven additional counties in Missouri and Illinois in its field of membership (FOM). Most of the board denied the appeal based on the regional director’s determination that under the agency’s former FOM rule, the application did not show sufficient interaction, even though it was shown the area is similar to at least one other FOM that was approved under the prior rule. “We’re disappointed with the decision,” said Eric Acree, Vantage CU executive vice president of operations. “We disagree that we did not prove the interaction requirements as a community is defined by NCUA.” He noted that Vantage already serves many of the counties that the credit union wished to expand its FOM to as noted in the application. “We’re evaluating what our next moves will be,” he told News Now. Vantage CU has $654 million in assets.

California league honors outreach efforts

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ONTARIO, Calif. (9/20/10)--The California Credit Union League honored a credit union leader and two credit unions with its 2010 Community Outreach Awards, formerly the league's Diversity Award. Award winners are:
* Urla Abrigo, CEO of the Los Angeles-based Episcopal Community FCU, who received the award in the individual category for her efforts to coordinate the Women's Wellness Day, which attracted more than 100 women, many of whom had no health insurance; * Travis CU, Vacaville, in the greater-than-$100 million asset category, for its collaboration with a community-leaders coalition to connect foster youth to opportunities, experiences and support to help them succeed as independent adults through its Money Matters program; and * Mission SF FCU, San Francisco, in the under-$100 million asset category, for its Prize-linked Accounts for Youth (PLAY) program, which provided free savings accounts and help in learning personal finance and building a savings habit.
The awards are presented by the league's Community Outreach Committee.

CU System briefs (09/17/2010)

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* MADISON, Wis. (9/20/10)--The National Credit Union Foundation (NCUF) hired Christopher Morris as its director of communications, effective today. Morris was manager of communications and Web resources for CUNA Councils. Before joining the councils in 2007, Morris was manager of communications at NCUF, where he developed cuaid.coop, the first national online disaster relief fundraising system for credit unions. He will be based in Madison and report to Tom Candell, NCUF deputy executive director and chief operations officer/chief financial officer. He will be responsible for developing and executing NCUF's strategic communications, including creating traditional and electronic media materials and managing NCUF's online presence ... * FORT LAUDERDALE, Fla. (9/20/10)--Bill Marquardt, CEO of City County CU, Margate, Fla., died Sept. 8 after a brief illness (Sun Sentinel Sept. 9). Marquardt had been with the credit unions since 1993, and previously was with Tropical Telco CU, Miami. He was on the board of directors of Southeastern Corporate FCU, according to the corporate ...

IBloombergI Small biz cant get loans from bailed-out banks

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NEW YORK (9/17/10)--The plight of small business owners who can't get loans from large banks that were bailed out during the financial crisis is spotlighted in Thursday's Bloomberg. Although the item doesn't mention credit unions' efforts to serve members with small businesses, it describes the need for more small business lending. Small companies created 64% of net new jobs the past 15 years, according to the Small Business Administration, Bloomberg reported. A record 41% of small business owners say they can't get adequate financing, said the National Small Business Association. New small business loans dropped 33% last year to $191.6 billion, the lowest since 2000, said the Federal Financial Institutions Examination Council. Outstanding loans fell 16% as of June 30 when compared with June 30, 2009, the article reported. It pointed out that Wells Fargo & Co., JP Morgan Chase and Bank of America received a combined $189.3 billion in the government's Troubled Asset Relief Program (TARP) and debt guarantees from their regulator, the Federal Deposit Insurance Corp. (FDIC). Two of the banks refused to make a loan to a small businessman who wanted to hire a dozen people with a $1.1 million loan. The third bank offered less than 70% of what the applicant needed. All in all, the businessman tried 17 lenders in 2008 and 2009. Although the banks say their small business lending increased the first six months of 2010, they define small businesses as those with annual revenue of less than $20 million. The Bank of America, which noted a 1% increase in small business lending during the first half of the year to small and mid-sized businesses said 80% of the loans went to companies with more than $20 million in sales. Although the bank claimed there is weak demand from the smallest businesses, Justine Petersen, a nonprofit microlender in St. Louis, said that's because entrepreneurs are frustrated with lenders and have given up asking for money. The lender said it is experiencing "unabated demand" for the loans, Bloomberg reported. Credit unions backed a recent amendment in Congress to raise their member business lending (MBL) cap to 27.5% from 12.25%, to infuse $10 billion into small businesses and create 100,000 jobs the first year at no expense to the taxpayer. However, the Small Business Jobs and Credit Act, which passed the Senate this week, does not include the amendment. Instead, it would provide $30 billion to encourage more bank lending without the MBL provision. The bill does have provisions of interest to credit unions, such as higher Small Business Administration (SBA) loan limits, increasing SBA 7(a) loan limits to $5 million from $2 million, raising 504 loan limits to $5.5 million from $1.5 million, and increasing 7(a) "Express Loans" to $1 million from $300,000. The bill also ups the definition of microloans from $35,000 to $50,000. (See related story, "Small biz jobs bill approved by Senate).

CUNAs e-commerce site maintenance this weekend

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MADISON, Wis. (9/17/10)--The Credit Union National Association's (CUNA's) e-commerce site will be undergoing maintenance this weekend. Beginning at 7 p.m. CT today, the site will not be able to take orders. Normal operations will resume Monday at 7 a.m. CT.

CUs in several states announce mergers

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MADISON, Wis. (9/17/10)--Credit unions in several states have announced mergers with other credit unions, according to local media reports. SOFCU Community CU, Grants Pass, Ore., and Oregon First Community CU, Coquille, Ore., plan to merge, effective Feb. 28 and pending regulatory approval. Both will operate as affiliates of First Community CU. David Elmer, executive vice president at Oregon First, will be president/CEO. Charla Zeltvay, president/CEO of SOFCU, and Dal King, president/CEO of Oregon First, will continue their leadership positions as presidents of their affiliate credit unions under First Community. Both will remain in their positions until their retirement dates of February 2012. Elmer told News Now that the motivation for the merger is to better serve both credit unions’ members as their individual CEOs retire. “It’s a great opportunity,” he said. “In the end, our goal is to better serve the members.” There will be no layoffs, and the resulting credit union will have about 70,000 members and $700 million in assets, with 34 branches. None of the branches overlap, he added. Partners 1st FCU and Food Marketing FCU, both in Fort Wayne, Ind., also have plans to merge. Partners has about 30,000 members and $238 million in assets. Its five branches will serve Food Marketing members beginning Oct. 1. Partners 1st has 32 branches in 22 states, according to The Journal Gazette (Sept. 15). David Fleming, CEO of Partners 1st, said Partners offers more services than Food Marketing because of its larger size. Prairie Trail CU, Joliet, Ill., merged with Argonne CU, Romeoville, Ill., on Sept. 1. Brian Cedergren, Argonne CEO, will be president/CEO of the combined credit union, and Matt Thraen, Prairie Trail CEO, will be president of the credit union’s Joliet division (Bugle Newspapers Sept. 15). No employee positions were lost in the merger. Argonne had 16,000 members and $200 million in assets before the merger, and Prairie Trail CU served 12,000 members with $73 million in assets. The merger is expected to help the credit unions reduce their fixed costs, the newspaper said.

Australian regulator to Abacus Change ad

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CANBERRA, Australia (9/17/10)--Australia's credit union regulator is requiring the country's credit union and mutuals organization to change an ad that claims consumers can save $35,000 by switching from big banks to credit unions. The regulator, Australian Securities and Investments Commissioner Peter Boxall, required Abacus, the credit union and building society industry group, to knock off $5,000 from the ad after banks complained the ad was misleading because of allegedly faulty methodology by the research firm, Infochoice (Herald-Sun Sept. 17). Boxall outlined several concerns about the research's disclosures of types of interest rates, the credit unions and building societies selected for the research, and the timing of the calculation. The new $30,000 savings figure is based on an average of four new Infochoice comparisons run randomly. Abacus said the savings are "definitely over $30,000." That figure was at the lowest end of the savings range consumers can expect, said the organization.

Trinidad and Tobago CUs urge government to change rescue plan

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PORT-OF-SPAIN, Trinidad and Tobago (9/17/10)--The Cooperative Credit Union League--the umbrella organization for credit unions in the Caribbean country of Trinidad and Tobago--is urging the government to change its financial rescue plan for Colonial Life Insurance Company (CLICO) so it won’t harm credit unions. Budget measures that will pay small CLICO depositors $75,000 each and provide larger depositors government IOUs over a 20-year period at 0% interest could “mash up” the credit union sector and adversely affect members, the league told Prime Minister Kamla Persad-Bissessar (Trinidad Express Sept. 15). CLICO, one of the largest companies in the country, collapsed and is being rescued by the government, the newspaper said. Also, Lincoln Beckles, president of the Association of Co-operative Credit Union Presidents of Trinidad and Tobago, sent a statement Tuesday to Persad-Bissessar, asking her to establish an oversight committee for CLICO investors and managers, the newspaper said. The committee would monitor CLICO’s daily operations and develop a plan for the 20-year repayment measure in the national budget.

CUs auto leasing making a comeback

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MADISON, Wis. (9/17/10)--Relying on a track record of friendly service and low interest rates, credit unions--a long-time stalwart source for car loans--are making a comeback in vehicle leasing. In an article titled “How to Beat the Dealer’s Price on Leasing,” Gary Hoffman of AOL Autos said the move by credit unions is positive news for consumers and business people because credit unions provide another vehicle-financing option in the face of several months of rough going for borrowers and lenders (KMTR.com Sept. 15). “Between 2002 and 2004, many credit unions abandoned leasing after being burned in cutthroat competition with banks, specialized leasing companies and the automakers’ own financial units,” Hoffman wrote. Bigger credit unions generally have continued leasing despite the economy--and they usually have leasing experts in-house or under contract--Jim Henderson, senior vice president at Educators CU, Racine, Wis., told the publication. Educators has offered leasing since 2002. Now, leasing is attracting the interest of other credit unions and their service providers again, Hoffman wrote. “Credit unions especially are looking at any source they can to get some excitement going, and leasing is slowly creeping back,” John Kurtz, league rep./consultant at the Texas Credit Union League, told the publication. Credit unions often provide creative, flexible terms, such as “tailoring the lease duration and monthly payments to an owner’s specific driving habits,” Hoffman wrote. The article also mentioned the lease programs of Greylock FCU in North Adams, Mass., and Credit Union of Texas in Dallas. To read the article, use the link.

N.Y. ICBSI CUs are option as banks raise fees

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NEW YORK (9/17/10)--A New York affiliate for CBS mentioned credit unions as a low-cost option for consumers as banks raise fees. CBS said credit unions are an option “that may save you money” (Sept. 15). The story, “Banks Raising Fees to Combat New Regulations,” focused on banks raising their credit cards’ interest rates to generate revenues. The hike in rates is related to new credit card regulations that aim to prevent card companies from charging consumers excessive fees. Fees are a big problem, Kelli Grant of Smartmoney.com, told CBS. Free checking [at big banks] has basically disappeared, she noted. She also urged consumers to communicate with their financial institutions regarding fees. However, many credit unions continue to offer free checking.

Mortgage CUSO Refinance business booming

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FAIRBORN, Ohio (9/17/10)--Refinancing is alive and well in Ohio, according to a mortgage credit union service organization (CUSO). myCUmortgage, a Fairborn, Ohio-based CUSO credit unions employ to help members with homeownership, processed a record 2,450 loan applications in August and closed a record 764 loans totaling $103 million in a single month. "Based on our 17% increase year-to-date in applications, it proves that members are turning to credit unions for their refinancing and mortgage needs," said Tim Mislanski, myCUmortgage president. The increase in home refinances was attributed to low interest rates. On Thursday, mortgage buyer Fannie Mac said that 30-year mortgages climbed for the second straight week but remained near the lowest level in decades (The New York Times Sept. 16). The average rate was 4.37%, up from 4.35% a week earlier and 4.32% the previous week. The 4.32% rate was the lowest level on records since 1971. The average rate on 15-year fixed loans dropped to 3.82% this week, the lowest since 1991 and down 3.83% last week. Rates have been at or near the lowest level in decades since spring, when investors sought the safety of Treasury bonds, which lowered their yield. Mortgage rates tend to track that yield. Hopewell FCU, a $64 million asset credit union based in Heath, Ohio, partnered with myCUmortgage and closed more than $3.5 million in mortgage loans in August, said Jim Johnson, Hopewell president/CEO. myCUmortgage also announced it will host a free webinar at 2 p.m. to 3 p.m. ET on Sept. 27 about mortgage solutions for credit unions.

Elevations Foundation expands relief to new wildfire

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BOULDER, Colo. (9/17/10)--A new wildfire in Colorado has prompted Boulder-based Elevations Foundation to extend relief to a second area to help people affected by wildfires in the state. Last week, the foundation--which is the charitable arm of the more than $950 million asset Elevations CU--announced it would accept donations for the Fourmile Canyon fire relief efforts. That fire scorched thousands of acres and destroyed 166 homes in the foothills, just west of Boulder, said the foundation (News Now Sept. 10). Since then, another major wildfire has roared through an area just west of Loveland, said the foundation, which again moved quickly to establish a fund to support those relief efforts. "All money donated on behalf of the Reservoir Road fire will go directly to those aiding in this fire relief effort and to those families who have lost their homes or been displaced," said Gerry Agnes, president/CEO. "In addition, Elevations Foundation will match all donations up to $10,000 in total," Agnes said. The first fire directly affected a credit union employee who was evacuated and several members who lost their homes. Donations can be made at any of the nine Elevations CU branches, including its newest branch at Loveland. Members also can donate over the phone by calling 970-667-8585, 303-443-4672 or 800-429-7626. Credit union membership isn't required to donate. The foundation will accept donations through Sept. 30.

Revenue from overdraft fees drops to 2008 levels

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LAKE BLUFF, Ill. (9/16/10)--Overdraft fee revenue for financial institutions bottomed out during the first half of the year but is recovering, according to a new study. By the end of the year, the banking industry expects to earn $35.4 billion in overdraft fee revenue. That figure is down from the $37.1 billion financial institutions received in 2009, but it is on par with the fees collected during 2008, according to Moebs $ervices, a firm that tracks pricing in financial institutions. The Lake Bluff, Ill.-area firm analyzed fee revenue for the first six months of 2010 at 2,284 financial institutions and more than 15,000 depositories. With the regulation requiring opt-in for debit cards and ATMs coming during the third quarter, revenue likely will drop again, the study predicted. "But this will recover by the same amount in the fourth quarter," said Michael Moebs, economist and CEO of the firm. He estimated that overdraft revenue will increase next year to $38 billion--"the highest ever for the industry." Roughly $2 billion in revenue from overdraft fees was lost during fourth quarter 2009 when financial institutions started to implement their own floors and ceilings on overdrafts in response to congressional and consumer complaints, said the study. The institutions lost another $2.3 billion during first quarter 2010 after the opt-in regulation was introduced by the Federal Reserve and depositories made changes. It cost banks and credit unions about $2 billion in operational costs and training to implement the opt-in regulation and their own changes to overdraft services. "When you add the lost revenue and the additional cost of the new overdraft regulations, it amounts to about $6.3 billion erosion into profitability for all banks and credit unions," Moebs said. He noted that 44.3% of banks and credit unions made some type of change to their overdraft program while 55.7% made no changes. About 20.5% increased prices to offset cost increases and loss of revenue. Some--6.5%--decreased their overdraft price, said the study. "We've never seen this many institutions decrease the price of a fee service in almost 30 years of tracking bank and credit union pricing," Moebs said. He added that the data show institutions that decreased the fees "actually maintained or increased their overall revenue in the past year." The decline in industry overdraft fees due to large institutions such as Bank of America and Citibank exiting the overdraft business was more than offset by Main Street institutions that offered overdraft protection for the first time, the study said. "Institutions that got into overdrafts, are doing so to build capital by increasing fee revenue, because interest rates are so low," Moebs said. About 90% of overdraft revenue comes from frequent users, those with 10 or more overdrafts a year. Frequent users almost all opted in for overdraft coverage. For all consumers, opt-in consent varied between 60% and 80% with a median of 75%. The median overdraft price rose to $28 per check in 2010 from $26 in 2009. Nonsufficient funds, where the institution returns the check, rose to $27 per check from $25 in 2009. "Even with the price of overdraft protection going up, it appears from the opt-in numbers that the American consumer is saying they want and need overdrafts," Moebs concluded.

CU System briefs (09/15/2010)

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* YOSEMITE VALLEY, Calif. (9/16/10)--Yosemite CU, a division of
Modesto, Calif.-based Valley First CU, sponsored an exchange of the new Yosemite quarter--the third coin released as part of the America the Beautiful Quarters Program. The ceremony in Yosemite Valley to launch the quarter drew 1,200 people. Credit union staff worked with National Park Rangers to plan and coordinate the sales. Loomis Armored Transport was on site for the event. Five quarters commemorating 56 national parks and other national sites will be released each year through 2020, with coins issued in the order in which the sites were first established as national treasures. According to Hank Barrett, president/CEO of more than $380 million assetValley First CU, the historical event was a "natural fit between our branch located in Yosemite National Park and the U.S. Mint." Yosemite CU became a division of Valley First in fourth quarter 2009. (Photo provided by Yosemite CU, a division of Valley First CU) ... * SALT LAKE CITY (9/16/10)--Mountain America CU has launched a free mobile money service in partnership with Obopay Inc., a pioneer in mobile money solutions. The service, available immediately, provides members with access by leveraging Obopay's Mobile Money for Banks. Using a mobile phone, members can transfer money from their accounts to anyone securely. Recipients do not need to be members or be signed up for the service to receive funds. They can direct the funds into any credit union or bank account either instantly using their debit card numbers or within three business days using their bank account numbers. They also can employ their mobile phones to receive debit card and electronic check payments, send money instantly to family members for emergencies or regularly scheduled payments, and donate funds to charitable organizations via texting ... * MADISON, Wis. (9/16/10)--CUNA Mutual Group is No. 208 on this year's InformationWeek 500, an annual list of the nation's most innovative users of business technology. The new rank marks the eighth year that CUNA Mutual has been named to the list. The 2010 list was announced Tuesday at the InformationWeek 500 Conference in Dana Point, Calif. "This award is a clear example of our strong partnership between IT (information technology) and our business lines to provide product excellence to better serve our credit unions and their members," said Rick Roy, CUNA Mutual senior vice president and chief information officer. The company's application for 2020 featured enhancements to CUNA Mutual's loanliner.com technology that allows credit unions to customize their loan origination system and their members to calculate loan payment options, complete loan requests electronically and receive online decisions and loan documents ... * ONTARIO, Calif. (9/16/10)--The logos of 20 California credit
unions will trek along the tracks on the Credit Union Train around the Fairplex Garden Railroad during this year's Los Angeles County Fair, which runs through Oct. 3. In addition to the credit union logos, logos from three credit union organizations--CO-OP Financial Services in Rancho Cucamonga; CUDL in Ontario: and Turner, Warren Accountancy in Burbank--also will be featured. The train is an annual tradition that helps publicize credit unions and the movement as it runs on an 8,000 foot track during the month-long fair, said Tena Lozano, executive director of the Richard Myles Johnson Foundation, the state foundation for California and Nevada credit unions. The train is a brainchild of Bob Toohey, a volunteer at the Fairplex Garden Railroad and board member of SCE FCU, Irwindale. The 30,000-square-foot Garden Railroad was established in 1935 and is considered the oldest and largest outdoor railroad of its kind. It serves as a fundraiser for the foundation (Photo provided by the California and Nevada Credit Union Leagues) ...

Consumers avoid risk credit card use at all-time low

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SAN FRANCISCO (9/16/10)--Credit card use is declining as more consumers are opting for “pay now” alternatives like cash, checks, debit and prepaid cards, according to a recent study. However, credit card use among credit union members seems steady. Credit card use among consumers dropped 31% between 2007 and 2009. If the rate of decline continues, credit card use will drop below 50%, said Javelin Strategy and Research. It also found that among the 11% of consumers who claim they have an increased ability to put funds into savings, 46% have decreased credit card use, and 51% have cut their spending on goods like entertainment, travel, luxury items and cars. At credit unions, outstanding card balances were $31 billion as of December 2007 and $35.5 billion in December 2009. The most recent data, for June 2010, shows that balances were $35.1 billion at credit unions, according to the Credit Union National Association (CUNA). Credit union credit card outstandings increased annually from 12.2% as of June 2006 to June 2007, and 6% from June 2009 to June 2010. CUNA noted that although there has been a slight decrease in credit cards outstanding at credit unions the past six months, that is typical for the first half of any year. Members tend to pay bank loans and save more during that period. “The recent passage of widespread financial reform targeting payment cards is not just impacting the way consumers behave, but is transforming the entire payments landscape,” said Beth Robertson, director of payments research at Javelin. “The industry now has an imperative to innovate, finding new payment options or structural alternatives that will drive revenue.”

Prepaid cards weathered recession well says study

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MADISON, Wis. (9/16/10)--Despite the recession, about 49% of U.S. consumers purchased a prepaid card in the 12 months ended in May, according to a new report by the Mercator Advisory Group. That percentage is up from 45% who purchased cards in the previous year, said the report, “Consumers Provide Direction With Prepaid Under Scrutiny” (paymentssource.com Sept. 14). An online survey of 1,009 consumers ages 18 and older conducted in May was the basis of the report. “In general, we’re seeing that prepaid has held up pretty well during the recession,” said Ken Paterson, author of the report and Mercator vice president of research operations. “Consumers continue to find new uses and new value in the cards.” However, card issuers and program managers should educate consumers about recent regulatory changes regarding expiration dates and inactivity fees to allay fears about using prepaid cards, Paterson said in the report. That could result in more consumers being at ease with buying prepaid cards, Mercator contends. The leading card types that prepaid buyers purchased are merchant-branded cards (69%) and network-branded gift cards (28%). However, those numbers are down from 76% and 39%, respectively, Mercator said. The majority of consumers are not taking advantage of their reload feature, said Mercator. About 57% of respondents were aware of the reload feature but had never used it, the report said. Also, 31% were unaware of the card’s reload capability--down from 36% who said they were unaware last year.

Alliant CU Foundation donated 200K in first year

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CHICAGO (9/16/10)--Alliant Credit Union Foundation recently completed its first year of operations as a 501c3 not-for-profit organization by donating $200,000 to worthy causes in line with its mission, announced David W. Mooney, president of the foundation and president/CEO of Chicago-based Alliant CU.
Alliant Credit Union Foundation presented Operation HOPE with an oversized check representing a grant supporting financial literacy during the foundation's first year of operating. From left are: Patricia Robles, (former) Operation HOPE Chicago Program manager; John Bryant, HOPE founder and chairman; David Mooney, Alliant CU president/CEO and foundation president; Wayne Rosenwinkel, foundation vice president; and Mona Leung, Alliant CU senior vice president and chief financial officer. (Photo provided by Alliant CU)
The foundation, which began operations during the summer of 2009, was established with a $4 million grant from the credit union. Its first sizable donation was to Operation HOPE, a national organization that promotes financial literacy and economic opportunity primarily in underserved areas. The foundation's purpose, said Mooney, "is to promote economic empowerment and self-sufficiency of people, especially in the communities in which Alliant CU members and employees live and work." Causes eligible for support include:
* Those related to education with an emphasis on financial literacy; * Charities helping those in need of assistance; and * Investments in community development projects and programs, especially in underserved areas.
During the year the foundation also provided assistance to students of Prescott Elementary School in Chicago, providing book bags of school supplies donated by Alliant CU employees and purchasing books for the school's Family Book Program. Financial gifts included funds for holiday gifts for seriously ill children in Chicago, Los Angeles, San Francisco, Denver, and the Washington, D.C. area. Its $10-to-$1 matching donation program helped Alliant CU raise more than $40,000 for the American Red Cross for Haiti relief. It also contributed to the Breast Cancer Network of Strength, Bear Necessities Pediatric Cancer Foundation, March of Dimes, Boys and Girls Club, Orphan Foundation of America, Special Olympics, Juvenile Diabetes Research Foundation and others.

TCUF awards 27750 in grants

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FARMERS BRANCH, Texas (9/16/10)--The Texas Credit Union Foundation (TCUF) announced that it dispersed $27,750 in grants during the third quarter. This is in addition to the $137,240 TCUF awarded for the first quarter and $23,544 in the second. Among the recipients is Tarrant County CU, Fort Worth, with a grant to co-sponsor the “Generation Hope Laptop” program. The after-school enrichment program will provide financial education to about 300 students at six Title 1 schools in the county (LoneStar Leaguer Sept. 7). “Without the funding and support from the foundation, not only would there be no financial education component offered in the program’s core curriculum, there would be no opportunity to expose students to financial education or the benefits of credit union membership,” said Lily Newfarmer, president/CEO of Tarrant County CU. Other grants include:
* One Junior Achievement partnership with credit unions; * Three chapter grants; * One scholarship to send a credit union professional to the National Credit Union Foundation’s Development Educator program;

* A partnership with the Texas Council on Economic Education to deliver financial education training to educators in Texas; * Collaboration with the Catholic Charities of Southeast Texas to sponsor the Asset Building Case Management Program, focusing on financial literacy for low- to moderate income families; * Sponsorship of the RAISE Texas Summit to expand asset-building opportunities in Texas;

* Support of the Farmers Branch Chamber of Commerce’s Junior Ambassador Program, geared toward under-represented, academic middle school students who want to attend college; and * One training and conference grant for credit union staff and volunteers.

Conn. league helps CFA boost awareness on fake checks

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Credit Union League of Connecticut President/CEO Tony Emerson (right) addresses the media at a press conference called by Consumer Federation of America (CFA) on its new Fake Check Scam initiative for credit unions and banks. At left is program host Susan Grant, CFA director of consumer protection, Washington, D.C. At center is Connecticut Banking Commissioner Howard Pitkin, who also spoke. (Photo provided by the Credit Union League of Connecticut)
MERIDEN, Conn. (9/16/10)--The Credit Union League of Connecticut participated in a press conference on Consumer Federation of America’s (CFA) newly inaugurated Fake Check Scam project, a national program that is being rolled out in Connecticut. The project is designed to educate and alert financial services personnel and the public about high-tech fake check scams. Working with the league and Connecticut Departments of Consumer Protection and Banking, CFA initiated its educational program to provide guidance on identifying fraudulent checks and avoiding becoming a victim. Participating credit unions and banks will hand out a CFA brochure, “Don’t Become a Target,” at teller stations when members/customers present a check for $1,000 or more to deposit or cash. “It is important and appropriate for us to participate not only because of the close relationship we have with our member credit unions, but also because of the strong relationship credit unions have with their members,” said Tony Emerson, league president/CEO. Connecticut was chosen as the first state for the project because seniors are especially susceptible to fraud, and the state has “a relatively high proportion of people 65 and older,” said Susan Grant, CFA director of consumer protection. “But I do want to stress that adults of all ages in every state are vulnerable to this type of scam,” she added (Republican Amercian.com Sept. 15). Connecticut is the first of at least 10 states expected to participate, CFA said. CFA also plans to conduct the program in Arizona, Colorado, Florida, Georgia, New York, South Carolina, Tennessee, Virginia and the Los Angeles area in California, Grant told News Now. State credit union leagues/associations will be involved in the program in each of the states, she added. The two-year project will end in December 2011 and is being funded by a grant from an anonymous donor. While only smaller community banks and credit unions have signed on, Grant said she hopes larger regional and national banks also will join the effort.

Texas league honors CUs leaders

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DALLAS (9/16/10)--Three Texas credit union executives have been honored by the Texas Credit Union League for their leadership. The league also presented awards to credit unions for social responsibility, philosophy and youth financial education.
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The awards were presented during the league’s leadership conference and expo in San Antonio last week. Winners include:
* Professional of the Year--Wayne Vann, president/CEO, NavyArmy FCU, Corpus Christi; * Small Credit Union Achiever of the Year--Sandra Allm, president, BNSF CU, Amarillo; and * Volunteer of the Year--Ollie B. Harris, Smart Financial CU, Houston.
The league also presented credit unions with its Dora Maxwell Social Responsibility Award, Louise Herring Award for Philosophy in Action and the Desjardins Youth Financial Education Award. First place winners include:
* Dora Maxwell, Neches FCU, Port Neches, and the Austin Chapter of Credit Unions; * Louise Herring, AMOCO FCU, Texas City; and * Desjardins, Education CU, Amarillo, and A+ FCU, Austin.

Illinois league appeals to nation for Haiti drive

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Sister Nellie from the Carmelite Order of the Word holds a tote bag donated by the Illinois Credit Union League for school children in earthquake-devastated Haiti. The league is spearheading the effort to collect bags and school supplies. (Photo provided by the Illinois Credit Union League)
NAPERVILLE, Ill. (9/16/10)--Sept. 20 is the deadline for credit unions and leagues to send tote bags and school supplies to Haiti in a project spearheaded by the Illinois Credit Union League (ICUL). Although it has been almost nine months since a massive 7.0-scale earthquake devastated Haiti, the league, its credit unions and other states have helped out by collecting tote bags and school supplies. The league got involved after a board members, Bob Folgate, discussed a recent mission trip he took to Haiti to help the Carmelite Order of the Word Convent. He had visited Haiti several times, with his last trip occurring during the Jan. 12 earthquake. A conversation about what the league does with tote bags left over from its conferences led to an initiative by ICUL Director of Education Greg Framarin, who gathered the league's tote bags and sent word to education directors at other leagues to see if they could help donate. As a result, school supplies, t-shirts, note pads, stuffed animals and other leftover promo items from several states were shipped to the convent. Most recently, ICUL sent about 200 more bags to aid the effort. Although the bags are for children to hold their school supplies, the desperate situation in Haiti has prompted other uses for the bags, including transporting water and other life necessities. At every major league function, the Illinois league has asked its credit unions if they would donate their bag instead of taking it home. The league said it welcomes other credit unions and leagues to join the effort. The order is accepting donations at any time but will need them by Sept. 20 to include in its fall shipment to Haiti for the current school year. The league said supplies can be sent directly to the Carmelite Community of the Word, 394 Bern Road, Gallitzin, PA 16641.

CUs among defendants in mobile banking patent suit

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SAN FRANCISCO (9/15/10)--Four credit unions and several banks are among the entities seeking dismissal of a mobile banking patent infringement lawsuit brought by MShift against Digital Insight Corp. (now called Intuit Financial Services or IFS). The defendants' motion to dismiss alleges the patent in question is outmoded and "solves a problem that no longer exists." MShift, a company headquartered in Fremont, Calif., filed the suit initially against Digital Insight on Feb. 19 in the U.S. District Court for the California Northern District (San Francisco). In June, MShift amended its complaint to include the credit unions, eight banks and Mobile Money Ventures, a mobile banking technology provider. The credit unions named in the complaint include Meritrust CU, Wichita, Kan.; Professional FCU, Fort Wayne, Ind.; Fort Worth (Texas) Community CU; and USE CU, San Diego. MShift's suit alleges its patent for a system for converting wireless communications for a mobile device was infringed by Intuit and the others. The patent No. 6,950,881, referred to as Patent '881 in the suit, was granted by the U.S. Patent and Trademark Office on Sept. 27, 2005, to Awele Ndili, MShift's former CEO. The patent was for a "conversion engine" that provided language to translate the contents of a Web page so it could display on mobile phones. Originally mobile phones were text-based browsers that didn't speak the Web HTML language, and they could not display Web pages the same as the pages displayed on desktop computers, said the complaint. In addition to the translation language, MShift also restructured multiple text boxes, which were graphic features or "input entries," into standard links that could display on the mobile devices. According to the defendants' motion to dismiss the case, none of this technology is necessary today, and there is no "first language" and "second language" involved in conversions because most mobile devices display the pages the same as on desktop--without the need to restructure. The suit claims MShift contracted with Digital Insight as a reseller of its technology. It seeks damages for the patent infringement claim against all the defendants, a breach of contract against IFS, and unfair competition against IFS.

Study CUs make up 6 of phishes for third month

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BEDFORD, Mass. (9/15/10)--Phishing attacks spiked during July, with a 21% increase in the number of attacks worldwide over June, according to RSA's Online Fraud Report for July. Attacks against credit unions remained steady, at 6% of the attacks. July saw a total of 16,756 phish attacks, where send fake e-mails and other messages pretending to be a financial institution or other institution in hopes of tricking recipients into divulging personal financial information. That compared with 13,844 phish attacks in June. While down significantly from January's 18,820 attacks, July's attacks were 3,544 more than in July 2009, said the report. "While there was a sharp spiked in phishing attacks, our analysis shows this growth can be directly attributed to an increase in the number of attacks launched against a handful of large entities," said RSA. National banks remained the most targeted financial segment in the U.S., although they dropped slightly in the percentage of attacks--to 64% from June's 68%. That is nearly three times the number of attacks they suffered in July 2009, when they were hit by 25% of the phish attacks. Regional banks saw 30% of attacks during July, a 4% increases from June's 28% of attacks. In January, they accounted for 61% of the attacks. A year ago, regional banks suffered 58% of the attacks. Credit unions remained consistent--at 6% of attacks--for the third month in a row. That was nearly two-thirds less than the 17% of attacks they weathered in July of last year. They have dropped from 14% in January and 12% in February, to 4% in both March and April, before increasing to 6% in May. The U.S. remained the largest country for both hosting attacks--it hosted 61% of the phishing attacks--and for being targeted--it had 47% of attacks. Phishing attacks were launched against 217 brands worldwide, one brand more than in June. The number of brands targeted fewer than five times during the month was similar to June's total. For July's report, RSA fraud analysts went window shopping in the cybercriminal marketplace. They produced a shopping list, and priced the goods and services bought and sold by cybercriminals. RSA fraud analysts discovered that credit card information is being sold for less than the price of a cup of coffee. Most goods are going for less than $50, providing criminals with a strong return on investment as the products yield hundreds or thousands of dollars at victims' expense. For more details on the shopping list, use the link.

In the Media CUs grow faster than banks

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MADISON, Wis. (9/15/10)--Credit unions are growing faster than banks, as they generate lots of interest from consumers, according to several media reports. Philadelphia Police and Fire FCU, which has $3.7 billion in assets, had a 45% increase in total assets since 2007, to $8.2 billion as of June 30, reported The Philadelphia Inquirer (Sept. 12). This compares with a 12% growth in assets at area banks. Credit unions in the Philadelphia area have surged during the past three years because of friendlier service at a lower cost, the newspaper added. It also quoted Walt Ross, a Citadel FCU member who joined after banking with Susquehanna Bank. Ross was thrilled when the Thorndale, Pa.-based credit union opened a branch near his home in Chester County. Citadel FCU has $1.5 billion in assets. University of Iowa Community CU, Iowa City, Iowa, said its mortgage lending volume was more than double in August compared with last year. Refinancing demand made August one of the credit union’s best months in history for mortgage demand, Amy Henderson, vice president of mortgage lending, told The Cedar Rapids Gazette (Sept. 11). The credit union has $986.2 million in assets. John Forck of Cedar Rapids told the newspaper that he and his wife got a financing offer from the credit union to reduce the couple’s home interest rate by 1.4%, shorten their loan term and tap their home equity to upgrade their home. Refinancing demand at Collins Community CU, Cedar Rapids, was up 120% over last year. The credit union has $591 million in assets. The loan officers are “wearing thin,” Steve Shepherd, executive vice president, told the newspaper.

OnPoint Communitys new branches create 26 jobs

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PORTLAND, Ore. (9/15/10)--OnPoint Community CU in Portland, Ore., is continuing its investment and expansion in the Pacific Northwest with the addition of three new branches in Deschutes County, which will create 26 new jobs. Members of OnPoint in Deschutes County have access to a suite of personal and business banking services, including basic and interest checking, savings accounts, money market accounts, auto and residential lending, Rewards Visa credit cards, certificates of deposit and individual retirement accounts, and investment- and retirement-planning services. The new branches opened Sept. 7 but will have individual grand openings during this month. “We believe that Central Oregon is a viable and attractive area to live, vacation and conduct business--and will continue to be for many years to come,” said Rob Stuart, OnPoint president/CEO. OnPoint Community CU has more than $2.8 billion in assets.

USA FCU Navy Fed announce merger

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VIENNA, Va. and SAN DIEGO (9/15/10)--Navy FCU of Vienna, Va., and USA FCU, based in San Diego, announced Monday that they have agreed to merge. Each credit union’s board of directors approved the merger. The newly combined credit union is slated to begin joint operations as Navy FCU, Oct. 1, pending approval by National Credit Union Administration (PRNewswire Sept. 13). The combined credit union will have more than 200 branches worldwide, with 22 in Southern California, more than $43 billion in assets and more than 3.5 million members. All USA FCU’s 19 branches--eight in Southern California and 11 military base branches in Japan and Korea--will become part of the Navy Federal branch network. All USA FCU employees will be invited to join Navy Federal, and the USA FCU’s San Diego headquarters building will become Navy Federal’s West Coast operations center. Members will be notified of the merger and will have access to additional information posted on the two credit unions’ websites and in branch offices. “… Navy Federal is an excellent choice for us,” said Mary Cunningham, CEO of USA FCU. “We share the same commitment of service to our members--the men and women in uniform who serve our country and the San Diego community. We’re confident that this will provide valuable opportunities for members and employees.” “The merger with USA FCU is a great opportunity for both of our credit unions as we unite our members, employees and operations,” said Navy Federal President/CEO Cutler Dawson, noting the merger “strengthens our presence in Southern California and expands our branch access for members--here and overseas.”

Texas ads thank Congress members who stood tall for CUs

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FARMERS BRANCH, Texas (9/15/10)--The Texas Credit Union League unveiled its new series of “Congressional Thank You Ads” for member credit union newsletters to thank Texas congressional members who supported credit union issues. The ads are part of the league’s efforts to share information with millions of Texas credit union members about key issues that affect them. “We wanted a way to inform members of where their representatives stood during the most recent legislative session in Washington,” said Jim Phelps, league political and grassroots director. “Over the past several months, our credit unions engaged in a level of grassroots advocacy not seen since 1998 in the battle for H.R. 1151. “Throughout the process, many of Texas’ congressional representatives openly and publicly supported credit union positions, in the battle to preserve interchange and lift the cap on member business lending,” he added. “This is our opportunity to share that information with those most impacted by the changes--credit union members.” The ads indicate whether Texas congressional delegation members supported credit unions on interchange by publicly signing onto a critical “Dear Colleague” letter to Senate-House conferees. U.S. Rep. Kenny Marchant (R-Texas) was an original interchange letter sponsor, and more than half the Texas congressional delegation from both parties signed the letter within a week of being asked. The ads also note whether a Texas congressional delegation member publicly sponsored member business lending legislation to lift the current cap, H.R. 3380. In all, five Texas Democrats (Gene Green, Sheila Jackson-Lee, Eddie Bernice-Johnson, Solomon Ortiz, and Ciro Rodriguez) and three Texas Republicans (John Culberson, Ron Paul, and Ted Poe) co-sponsored the legislation. The legislative communication ads to credit union members are divided by region and developed to ensure compliance with federal law. Also, the ad directs readers to the league’s CUVoice website (CUVoice.com)--a credit union member advocacy forum--to learn more about key legislative issues, and thank their member of Congress by e-mail or phone for supporting their credit union. Most ads will appear in fall credit union newsletters. Phelps estimated that more than a million Texas credit union members will receive the ads this year.

CEO testifies on capital access for N.J. businesses

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TRENTON, N.J. (9/15/10)--Issa Stephan, president/CEO of First Financial FCU, Toms River, N.J., testified Monday at a New Jersey Assembly Financial Institutions and Insurance Committee hearing on access to capital for New Jersey businesses. The committee had requested testimony regarding businesses’ access to capital for improvement and expansion, and the extent to which credit is available to consumers and homebuyers, said the New Jersey Credit Union League (The Daily Exchange Sept. 14). Credit unions play a vital role in the state’s economy, Stephan said. Small business lending at New Jersey credit unions is up more than 31% year-over-year, and about 20% of the state’s credit unions now offer business loans, he said. Stephan also mentioned a push in Washington, D.C., to raise credit unions’ member business lending caps to 27.5% from 12.25%. The cap increase would enable credit unions to play a greater role in the financial well-being of individuals, small businesses and the public sector, he added. The amendment fell short of a Senate vote Tuesday, but the Credit Union National Association and credit unions will continue to push for the increase in caps.

CU System briefs (09/14/2010)

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* MINNEAPOLIS (9/15/10)--A Minnesota man has been sentenced to nearly six years in prison for the armed robbery of the Minnesota Building Trades FCU's Inver Grove Heights branch last October. Herman Wilson, 44, had pleaded guilty to stealing $21,459 from the credit union on the morning of Oct. 8 and threatening to kill employees of the $109.4 million asset credit union. During the robbery, Wilson wore a surgical mask, goggles and neon construction vest during the incident and carried a kitty-litter bucket with a black bag and a semi-automatic handgun. He was arrested Dec. 2 (Star-Tribune Sept. 4) ... * CHARLESTON, W.Va. (9/15/10)--A former teller of the now-defunct N&W Poca Division FCU in Bluefield, W.Va., pleaded guilty Monday to federal information charging her with bank fraud related to the theft of $2.4 million (Associated Press via businessweek.com Sept. 14). The theft contributed to the $6 million asset credit union's failure and the National Credit Union Administration liquidated it on Oct. 3, 2008 (News Now Aug. 5). Pamela Mullins, 47, of Bluefield, faces up to 30 years in prison and a $1 million fine for her role in the theft. In August, a federal grand jury in Beckley indicted the credit union's assistant manager, Rebecca Poe, 35, of Falls Mills, Va. The women allegedly took the money from 2003 to August 2008. Poe's trial is set for Oct. 19. Mullins is scheduled for sentencing in January (WSAZ.com Sept. 14) ... * NAPERVILLE, Ill. (9/15/10)--Joe Kregul became CEO of Naperville, Ill.-based HealthCare Associates CU, effective Sept. 1. Kregul has 30 years of experience in the financial services industry, including the past 13 in the credit union field. Since 1998, he has served as the credit union's vice president/chief financial officer overseeing its accounting/finance, member services and member support operations. Kregul has also served on the board and as secretary and chairman of the Aurora Chapter of Credit Unions for several years. He succeeds Jane Brannon as CEO ...

MBL featured in ISpectatorI IGazetteI over weekend

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WASHINGTON and CHARLESTON, W.Va. (9/14/10)--Credit unions' member business lending (MBL) was highlighted in different articles over the weekend, this time in the Charleston (W.Va.) Gazette and the American Spectator. In the Gazette, business owner Brad Nichols told about the $200,000 loan he got from Star USA FCU in Charleston, after visiting several banks (Sept. 10). Nichols said the credit union's loan, which financed the purchase of rental properties in Charleston and nearby Dunbar, offered a lower interest rate, better terms and no application fees. "With that money, I've been able to replace windows, doors, carpet and air-conditioners," Nichols told the newspaper. "I've also been able to hire a part-time maintenance person." However, Star USA FCU President Dan Smithson told the newspaper that if the credit union hits the 12.25% of assets cap on MBLs, "we literally have to stop making small business loans, even if we have the capital available. It's disturbing to us that we've had this cap placed on us. There's no real practical reason for it." The article addressed a measure before Congress that would raise the MBL cap for credit unions to 27.5% of assets from 12.25% . The Credit Union National Association (CUNA) provided statistics for the article, noting that West Virginia's small businesses would receive $34 million more in loans from credit unions and 370 jobs would be created in the state if the cap were raised. The second article, a pro-MBL special report Monday in American Spectator, was written by John Berlau and Andrew Kwiatkowski from the Competitive Enterprise Institute. The article discussed amendments before Congress that would lift the MBL cap and urged Republicans to "unite in support of a bipartisan but Reaganese amendment that would liberalize financial institutions to serve small business needs." It noted CUNA's estimate that the measure would create billions in new loans and more than 100,000 jobs in the first year. Congress will be taking up the issue this week and could vote by Thursday on the issue of raising the MBL cap from 12.25% of assets to 27.5%.

Texas league revises Juntos Avanzamos program

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FARMERS BRANCH, Texas (9/14/10)--EECU in Fort Worth, Texas, will be the first credit union to fly the Texas Credit Union League’s new Juntos Avanzamos flag. “Juntos Avanzamos” or “Together We Advance” is an outreach program of the league to serve the Hispanic marketplace. To be eligible, credits unions must complete an extensive and vigorous application process, said the league (LoneStar Leaguer Sept. 14). The $1.13 billion-asset EECU is the most recent Texas credit union to earn the designation. An official flag raising ceremony will be held at its north side branch located in a predominantly Hispanic neighborhood. The event will take place on International Credit Union Day, Oct. 21. “Access to affordable financial services is essential to building wealth, and credit unions are the right partner to help Hispanic families strengthen their financial well-being,” said Dick Ensweiler, league president/CEO. “EECU is to be commended for their efforts to narrow the gap which exists between our underserved communities and financial mainstream.” The league launched the program several years ago. It recently collaborated with Iowa-based Coopera Consulting to strengthen and expand the outreach program. The first order of business was to evaluate and improve upon the application process. Coopera already had created the Hispanic Opportunity Navigator, an assessment tool providing credit unions greater insight into serving the Hispanic population. After completing this assessment, a credit union will have the prioritized steps necessary to become the financial institution of choice serving Hispanics within its field of membership. The league also decided to give its Juntos Avanzamos logo a “facelift.” “As we worked to upgrade and refresh the Juntos Avanzamos program, we also decided it was time to update the logo representing the program,” said Gary Williams, president/CEO, Unity One CU, Fort Worth, who also serves as chair of the league's International Relationship Committee. He noted the new logo emphasizes family and unity. The league continues to work with Coopera to develop additional resources and collateral to enhance Juntos Avanzamos’ outreach efforts.

Voters go for candidates who back CU issues

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WASHINGTON (9/14/10)--An “overwhelmingly positive response” by voters in a poll indicates they would support a candidate who fights against banks and makes it possible for credit unions to provide loans to small businesses in their respective communities. The surveys are sponsored by the Credit Union National Association (CUNA) and conducted by research organizations Frederick Polls LLC of Arlington, Va., and Voter/Consumer Research of Washington, D.C. The surveys indicate that no less than three in five voters in separate polls of voters in eight congressional districts around the country said they would have a “positive reaction” to a candidate fighting against banking interests in support of more credit union business lending. Legislation pending in the House and Senate would raise the cap on credit union business lending to their members from 12.2% of assets to as much as 27.5%. The nation’s organized banking industry opposes the legislation. The polls were conducted Aug. 19-24, using identical questionnaires in selected congressional districts in Colorado, Kansas, Minnesota, Ohio, Oregon, South Dakota, Texas and Washington. The question was posed to 200 registered voters in each state, for a total of 1,600 interviews. The “positive reaction” ranged from a low of 62% (in Minnesota) to a high of 77% in Texas. The “negative reaction” ranged from a high of 15% (in Minnesota) to a low of 9% (in South Dakota). “The polling clearly shows that congressional incumbents and candidates will have warm support from voters if they take on the banks in support of more business lending by credit unions,” said CUNA President/CEO Bill Cheney. Cheney also pointed out that the recent polling matches findings of a national survey conducted early this year by the same firms. That survey asked voters if they would support legislation giving credit unions more business lending authority, in light of projections that it would inject $10 billion into the economy and create more than 100,000 new jobs. Voters in that poll strongly favored removing the cap on credit union business lending, with 69% in support and 25% opposed.

Schenk in IBaltimore SunI on student loan strategies

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BALTIMORE (9/14/10)--Mike Schenk, Credit Union National Association (CUNA) vice president of economics and statistics, was featured in The Baltimore Sun in an article about strategies to help students counter climbing student loan debt. Student debt reached nearly $830 million in June, exceeding credit card debt. Students should consider how much post-college income they will make when taking out loans, the Sun said (Sept. 12). Many students aren’t sure what career path to take, but they can use average starting salaries to get a ballpark figure, Schenk told the newspaper. Students can contact college placement offices to find out what jobs grads are finding and how much they pay. Or, they can look at the Bureau of Labor Statistics’ Occupational Outlook Handbook online for details about specific jobs, he added. Students’ expected starting salaries after graduation should be a factor in figuring out how much student debts to take on, but a survey last year by Sallie Mae indicated that 58% of families didn’t factor starting salaries in when they took out student loans. Also, the average debt for graduating seniors jumped to $23,200, a 24% increase in four years, according to the Project on Student Debt. The typical starting salary for 2010 graduates dropped to $48,288 from one year earlier, said the National Association of Colleges and Employers.

Kern Schools FCU to close fifth branch

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BAKERSFIELD, Calif. (9/14/10)--Kern Schools FCU, based in Bakersfield, Calif., announced Friday plans to close its Delano, Calif., branch Oct. 6--which would be its fifth branch closure. All but three of the Delano branch’s 15 employees have been placed elsewhere within the credit union, said Steve Renock, Kern Schools president/CEO (The Bakersfield Californian Sept. 4). The closure is anticipated to save the credit union $700,000 annually in facility costs alone, Renock told the newspaper. “In these tough times, you have to make very difficult choices,” he added. Kern Schools closed four of its branches and laid off 40 employees in March. In January, the $1.47 billion-asset credit union announced it lost $40 million in 2009 from borrowers who had difficulties paying their auto loans and mortgage payments as the recession intensified (News Now Feb 25). On Aug. 16, the credit union laid off seven employees in a cost-cutting move (News Now Aug. 24).

Former CUNA Chairman Christie Eugene dies

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NORFOLK, Va. (9/14/10)--Christie Eugene, a former director and chairman of the Credit Union National Association (CUNA) and long-time Virginia credit union movement leader, died Sunday after a long illness. He was 82. Eugene, who was a credit union advocate and volunteer for 61 years, served as CUNA chairman from 1991 to 1993 and as a CUNA director for 13 years. He spent three decades serving the Norfolk (Va.) Fire Department, beginning in 1948, and managing the Norfolk Fire Department FCU until 2002. After his retirement, he stayed on as treasurer of the credit union. He also held dozens of positions with the Tidewater Chapter of Credit Unions and the Virginia Credit Union League, including 20 years as director and two years as board chairman from 1983 to 1985 (News Now May 12, 2006). In 2006, Eugene received the Virginia Credit Union League's James P. Kirsch Lifetime Achievement Award. In 2009, he was inducted into the national Credit Union House of Leaders. "I'm proud of the good we do," Eugene said in 2006. "Sometimes that's giving a member a car loan or helping them put their children through college. Or sometimes it's something really special, like the member we helped out with a loan to travel to China to adopt a child. That little girl still looks at me like a grandfather; those are the things you really remember. Credit unions really are special, and I'm proud to say that I've got children and grandchildren who don't even know what a bank is; all they've ever known is their credit union." "Christie lived and breathed credit unions' 'People Helping People' philosophy," said Virginia league President Rick Pillow. "He was a true leader for both the state and national movements, a mentor to many of us, and one of those rare individuals you always enjoyed being around." Kathy Galland, CEO of Norfolk Fire Department FCU, noted that Eugene "taught me far more than any other person in my lifetime. "Christie really showed me that the members are what counts. Not what the regulators want, not following policies verbatim, just helping people achieve their financial goals. Together, we took the credit union from $13 million in assets to almost $30 million, realizing a personal goal of his to surpass $25 million in assets," Galland said, adding that "The membership cared deeply for Christie," and "he will be missed." Visitation will be Sept. 20 from 7 to 8 p.m. at Hollomon-Brown's Great Bridge Chapel & Chesapeake Memorial Gardens, located at 524 Cedar Road, Chesapeake, VA 23322. Funeral services are scheduled for Sept. 21 at 11 a.m. at Annunciation Cathedral Greek Orthodox Church, 7220 Granby St., Norfolk, VA 23505.

Michigan CUs grow in challenging economy

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LANSING, Mich. (9/14/10)--Michigan credit unions reported strong net worth, lending and membership growth in the second quarter, according to the Michigan Credit Union League. Data from the National Credit Union Administration shows Michigan credit unions received a 0.3% return on assets, which was stronger than expected, the league said. Credit unions had a net worth to assets ratio of 10.7%, greater than the national average of 9.9% or Michigan banks’ average of 9.2%. Ninety-four percent of Michigan credit unions are well-capitalized, the league added. Other statistics:
* Loans grew 1.2%, with used-auto loans increasing 10.3%, first mortgages 2.6% and credit cards 5.3%; * Commercial business loans grew 17.7% for the 12 months prior to June 30, compared with the national growth rate at credit unions of 7.7%. Commercial lending at Michigan banks dropped 5.7% through June and 13.9% nationally; * Real estate loans at credit unions during the second quarter grew 0.8%, compared with a decline of 13.3% at state banks and 6.8% at banks nationally; and * Savings grew by 7.5%, with money markets the fastest growing accounts up 20.7%.
“Michigan’s credit unions are a bright spot among financial institutions in the state, despite ongoing difficulties in our economy,” said David Adams, league president/CEO. “They are lending in their communities and supporting businesses and families.” About 44% of Michigan residents belong to a credit union. About 15,000 residents moved their money to credit unions since January, bringing membership to 4.4 million.

CU System briefs (09/13/2010)

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* LANSING, Mich. (9/14/10)--Michigan Gov. Jennifer Granholm, after
speaking at a Highland Park Business Association meeting on Aug. 31, visited Communicating Arts CU (CACU) and the Shops at Woodward Place, a development she and Wayne County Executive Robert Ficano supported through the Wayne County Land Bank TURBO program and Michigan Cities of Promise program. CACU was the second tenant to commit to the project (Michigan Monitor Sept. 6). From left are Shandell Small, CACU assistant loan manager; Ficano; Granholm; Kim Vermander, CACU vice president of lending and development; Hank Hubbard, CACU CEO; and Highland Park Mayor Huber Yopp. (Photo provided by the Michigan Credit Union League) ... * MONTGOMERY, Ala. (9/14/10)--MAX, Your Community CU will present "The
Reggie Barlow Show" at 10 a.m. on Saturdays on local cable networks. On the show, Alabama State University Head Football Coach Reggie Barlow will highlight the Hornets' previous week on the gridiron. He will bring his professional football experience with the Jacksonville Jaguars, Oakland Raiders and Tampa Bay Buccaneers, where he was a Super Bowl winner, and coaching expertise to the show. From left are CBS 8 Sports Director Dee Jackson, MAX CEO Greg McClellan; Barlow; and DG Markwell, MAX senior vice president of marketing and business development. (Photo provided by MAX, Your Community CU) ... * PORTLAND, Maine (9/14/10)--"People Remembering and Helping People" was the theme
for the eighth annual 9/11 tribute by Maine's credit unions to the five Red Cross Chapters of Maine. The ceremony honored victims of 9/11 and their families, and recognized organizations that work each day to protect the health and safety of people in Maine. Checks in the amount of $911 were presented to the Emergency Food Relief Fund of these American Red Cross chapters: Southern Maine, United Valley, Mid Coast, Pine Tree and Pine-Tree Aroostock chapters. Jon Paradise, center, governmental and public affairs manager for the Maine Credit Union League, holds a check with representatives of the Red Cross and food pantries. (Photo provided by the Maine Credit Union League) ...

Websites listing of CU as failure in error says CU

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NAPERVILLE, Ill. (9/14/10)--DuPage CU in Naperville, Ill., has succeeded in getting its name removed after being erroneously listed last month as a troubled bank on a “Troubled Banks” page on the website www.nextbanktofail.com run by Bill Bartmann. The listing was based on an alleged $70,000 the credit union supposedly received in Troubled Asset Relief Program (TARP) funds (The Naperville Sun Aug. 25). However, now all is well, Bob Palumbo, CEO of the $261.5 million-asset credit union, told News Now. “The guy took credit unions off the listing after he realized credit unions didn’t receive TARP funds,” Palumbo said. “He said he had a part-time reporter who wanted to create some controversy. “[Bartmann] got all his information [in error] from the Federal Deposit Insurance Corp.,” Palumbo added. “Nothing came of it. Our members saw it and laughed.” Bartmann is a billionaire and CEO of Bartmann Enterprises, the paper said.

Wis. CU receives 1.6M to help struggling families

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MILWAUKEE (9/10/10)--Brewery CU in Milwaukee found out this month that it will be receiving more than $1.6 million in federal funds--a $600,000 grant and $1 million in secondary capital at a 2% interest rate--for eight years to help struggling families, according to the Wisconsin Credit Union League. The $32.4 million-asset Brewery CU was among 180 community development financial institutions (CDFIs) nationwide-- 20 were credit unions--which received financial assistance in August as part of the U.S. Department of the Treasury’s CDFI Fund. The fund was created in the 1980s to administer federal help to financial institutions tackling the challenging work of community development (The League News Sept. 8). “It was just the help we needed to continue doing what most other financial institutions don’t even attempt, and that is to help families that have nowhere else to go during challenging financial times,” Brewery CU president/CEO Jim Schrimpf, told the league. A large number of the credit union’s members--about 55% of whom come from low-income designated zip codes--lost their jobs during the past two years and were struggling to make payments on their loans and mortgages with Brewery and other lenders, he added. The credit union had been doing all it could to help them by modifying loan terms, for example. However, the credit union felt it was hitting the wall in terms of how much help it could extend or for how long. The infusion of $500,000 to the loan loss reserve will allow Brewery CU to continue to lend to its target market at competitive terms and rates. Part of the CDFI grant will be put toward Individual Development Accounts--matched savings accounts that he says will help as many as 40 families achieve homeownership, Schrimpf said. All of these funds, Schrimpf added, are just the latest his credit union has qualified for and received after becoming a low-income credit union, as designated by the National Credit Union Administration, and a CDFI, as designated by the U.S. Treasury. Brewery’s Finance Manager, Mikal Gilliat, completed Brewery’s CDFI grant application with the help of fellow graduates of the National Credit Union Foundation’s Development Education (DE) program, which he describes as a credit union philosophy immersion program. “DEs from around the country really supported us. I can’t thank them enough,” Gilliat told the league. “The entire DE experience focuses on the need for credit unions to challenge themselves to do what for-profit lenders won’t in how they serve individuals, families and communities. So going after these grants was just an extension of the commitment our credit union has always had for how we serve our members.” While credit unions hold only a 10% market share for financial services in Wisconsin, they operate 40% of all financial branches in low-income areas. About 94% of banks have no branches in these areas, according to the Credit Union National Association. The National Federation of Community Development Credit Unions, representative to the majority of the 192 CDFI certified credit unions, reports that since its inception in 1986, the CDFI Fund has provided more than $100 million in grants to credit unions serving economically distressed communities.

Mich. Ohio league presidents keep MBL drive in media

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MADISON, Wis. (9/13/10)--The presidents of the Michigan and Ohio credit union leagues recently wrote in support of credit unions’ member business lending (MBL) in letters to newspapers. “Small businesses, the lifeblood of job growth in Michigan and across the country, are being squeezed from all directions,” David Adams, president/CEO of the Michigan Credit Union League, wrote in a Wednesday letter to the Detroit Free Press. “It has been particularly tough to get loans. But credit unions are in a unique position to make loans to help small businesses turn things around.” Pending legislation in Congress would allow credit unions to “lend more than $10 billion, and could create more than 100,000 jobs,” Adams added. “The bill would allow credit unions to lend as much as 27.5% of its assets, compared with a current cap of 12.25%. Further, there is no cost to taxpayers if this authority is granted. “Building a new, vibrant Michigan will take cooperation from public and private sectors, but the most important factor is small-business growth,” Adams wrote. “Credit unions can't meet all the business borrowing needs of our economy, but we can be an important resource, especially for the small-business community.” Increasing credit unions’ MBL can boost job growth in Ohio, wrote Paul L. Mercer, president of the Ohio Credit Union League, in a Friday letter to the Chillicothe Gazette. “The opportunity to pump $225 million into Ohio small businesses and create more than 2,400 new Ohio jobs--with no cost to taxpayers--rests in the hands of the U.S. Senate,” Mercer wrote. “The ability to increase lending during turbulent economic times is thanks to excellent stewardship and vigilance by Ohio credit union leaders,” he added. “The average delinquency ratio at an Ohio credit union is 1.36%, far below that of Ohio banks. “Let's give small businesses a leg-up and spur job growth in our state.” he concluded. “… It is a small-business stimulus package that doesn’t cost Ohio taxpayers a cent.” To read the letters, use the links.

CU System briefs (09/10/2010)

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* BATON ROUGE, La. (9/13/10)--Neighbors FCU, Baton Rouge, La., opened an in-school branch last week at a local high school. The credit union will train a new group of students each semester to run the credit union, said The Baton Rouge Advocate (Sept. 9). Students will receive certification that they have taken a banking curriculum, the newspaper said. Six students are operating the credit union. The office has two teller stations, with computers and security cameras. A Neighbors FCU employee will be on-site to overview the operation. Neighbors has $445 million in assets ... * TUCSON, Ariz. (9/13/10)--A woman between the ages of 60 and 70 robbed Tucson (Ariz.) FCU Aug. 28, according to The Arizona Daily Star (Aug. 29). A woman walked into the credit union and handed the teller a robbery note. She left with an unknown amount of money and was seen getting into a white 2000 Hyundai Tiburon. She used a handgun during the robbery, which is being investigated by a local sheriff’s department. Tucson FCU has $291 million in assets ... * CLEVELAND, Ohio (9/13/10)--Peter Corrigan Sr., former treasurer and manager of Firefighters Community CU, Cleveland, Ohio, died Sept. 6. Corrigan, 84, was a retired firefighter for the city of Cleveland. Firefighters Community CU has $176 million in assets ...

HELOC wire fraud increases significant

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MADISON, Wis. (9/13/10)--Credit unions nationwide are reporting another round of wire/Home Equity Line of Credit (HELOC) fraud, according to a July 29 Risk Alert from CUNA Mutual Group. There are several steps credit unions can take to mitigate risk. CUNA Mutual said that in most cases, the fraudster “hijacked” member home phone numbers by impersonating the member and requesting that the member’s telephone carrier forward all calls to the fraudster’s untraceable cell phone. In a recent case, the fraudster cited flooding problems as the reason for requesting the home phone to be forwarded. In other cases, fraudsters were successful in having the member’s phone number on the account changed on the credit union’s system. Both methods resulted in a positive confirmation of the wire during the callback verification, CUNA Mutual said. Perpetrators have targeted members with large lines of credit via HELOC loans, said Gary Pate, CUNA Mutual director of insurance compliance and risk management. The perpetrator sends a fax or email requesting the credit union process a funds/wire transfer. Usually, the transfer requests are received at credit unions with call centers. “What’s making these scams even more insidious is that the credit union's caller ID indicates the call is going to the member's number of record,” Pate said. “Additionally, the fraudsters have detailed member information, which is enabling them to answer additional challenge questions from credit union staff.” Credit unions should consider requiring members to request large dollar wire transfers in-person at a branch office, which is a common practice in the financial services industry. CUNA Mutual Group said it supports this position. Some risk mitigation recommendations:
* Establish a monetary threshold for requiring wire transfer requests to be made in-person; * Encourage members to add a password to their account; * Review member account details to determine if large dollar wire transfers are “reasonable” for the member. If not, require the member to make the wire transfer request in-person; * For large dollar wire transfer requests, check the member’s account to determine if there was a recent advance against the member’s HELOC to fund the wire. If a HELOC advance was made to fund the wire, require the member to make the request in-person; * Employees who perform callback verifications should always check the member’s account to ensure the phone number has not been changed in the past 30 days prior to performing the callback. This step should be added to the callback verification section of the credit union’s wire transfer form, or other form used to document callbacks made; * Adopt a series of strong out-of-wallet questions to be used during the callback verification; * Adopt a written wire transfer agreement with both consumer-members and business members in which both the credit union and member agree to a commercially reasonable security procedure that verifies payment orders submitted by the member. The written wire transfer agreement with business members should identify the business’ employees authorized to submit payment orders to the credit union on behalf of the business; and * Consider adding a fraud monitoring tool that is capable of monitoring transactions in real-time across all payment channels like checks, automated clearinghouse, wires, payment cards, as well as transactions initiated through the online banking system.

SECU signs statement of support for military employees

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RALEIGH, N.C. (9/13/10)--Roughly 300 managers of State Employees’ CU (SECU) branches and operations departments participated in a Statement of Support signing for the Employer Support of the Guard and Reserve (ESGR) program. The signing showed SECU’s continuing commitment to their employees serving in the military. Framed Statements of Support will hang in each SECU branch and department throughout North Carolina. The Statement of Support Program is ESGR’s national effort to gain and maintain employer support for reservists, by developing employers into advocates for employee participation in the military. For its employee-reservists, SECU offers one-week paid military leave annually, provides a pay differential when an employee is deployed and keeps the benefits of the soldiers active when they are mobilized. SECU personnel support their deployed co-workers by sending care packages and letters and assisting family members left behind during deployment. “SECU was very helpful and positive while preparing me for my 15-month tour to Iraq,” said Cathy Baker, a National Guard reservist and financial services officer. “They went over and beyond what they were required to do by law. “Months before I arrived home, Elizabeth [Fair, branch manager] took it upon herself to make sure that the two most important people in my life, my sons, were taken care of and ready for me to come home,” she added. She unselfishly supported me through the entire deployment. It was important to her to have my boys there, along with herself, to surprise me when I returned home. I arrived to posters, flowers, flags, warm faces and big hugs. I felt truly missed and an important member of the team here at the Benson branch.” SECU waives ATM fees for deployed soldiers, and has undertaken many National Guard initiatives, said Jim Barber, SECU board chair. “This landmark ESGR Statement of Support signing really brings home the magnitude of SECU’s commitment to our own employee-reservists, our appreciation for their sacrifice, and our commitment to all our member-soldiers overseas,” Barber added. SECU, Raleigh, N.C., has $21 billion in assets.

WOCCU loans bolster Sri Lanka farmers revenues

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COLOMBO, Sri Lanka (9/13/10)—The World Council of Credit Unions (WOCCU) has helped small-scale farmers in Sri Lanka increase their revenues by up to 71% by developing an agricultural lending program that combines lending with technical assistance and market relationships, and introduces higher-yield, higher-profit rice varieties for farmers.
Shirani Somalatha, pictured above with her husband, joined Women’s Co-op's agricultural lending program in Sri Lanka--established by the World Council of Credit Unions, after a drought drastically reduced her family’s rice harvest. The following year, the family increased its yield by 86%, Shirani repaid her loan in full and was able to deposit about US$1,000 into savings. (Photo provided by the World Council of Credit Unions)
WOCCU established the agricultural lending program in Sri Lanka’s north-central region with 10 branches of Women’s Development Services Co-operative Society Limited (Women's Co-op), a credit union owned and operated entirely by and for women. With funding from the U.S. Department of Agriculture, WOCCU worked with Women’s Co-op to develop the robust agricultural lending program and disburse the first batch of loans totaling US$36,000 to 192 member farmers in November 2009. After a successful season, Women’s Co-op lent an additional US$105,000 to 309 farmers in May 2010. Suresh Wijesinghe, deputy director of WOCCU’s program in Sri Lanka, stressed the value and positive economic impact of the agricultural lending program in the lives of Women's Co-op members during a session at a U.S. Overseas Cooperative Development Council conference in May. Women’s Co-op members have improved agricultural production technology and found new market relationships and financing through value chains, a series of entities that take a crop from field to market, Wijesinghe said. “Women's Co-op members are improving their lives through the credit union's services, from group lending to insurance to health and education services,” Wijesinghe added. “The agricultural lending program is being rolled out on a pilot basis in four [now 10] of the branches, with the plan to expand to all branches so that all members can benefit.” WOCCU’s Sri Lanka program has contracted CIC Agribusinesses, a national agribusiness company, to provide technical training and farm inputs to farmer groups before the seed is sown. The company offers premium prices for several rice varieties, particularly for a proprietary variety of red basmati. With the program coming to a close next year, WOCCU is working with Women's Co-op to appropriately factor the cost of the farmers’ long-term technical assistance into the price of their loans and develop purchase agreements with CIC Agribusinesses for farmers in the north-central region. “Many of the rural poor continue to face economic challenges not only because they lack access to finance but because they are isolated from markets,” said Brian Branch, WOCCU executive vice president and chief operating officer. “They do not have information about crop demand and product prices, and they do not have established relationships with input suppliers or end buyers. The Sri Lanka program bridges those gaps by connecting producers with market opportunities, as well as financing, so that they can increase their income and assets.” Shirani Somalatha, a rice farmer and Women’s Co-op member in the Polonnaruwa region of Sri Lanka, is one of many who have reaped benefits from the program. In early 2009, the region was hit by a drought, substantially reducing her family’s harvest. Later that year, Somalatha was elected as a member of the credit union’s branch agricultural committee and received training from WOCCU and CIC Agribusinesses on farming techniques and technologies, fertilization, pest control and farm planning. She then joined the agricultural lending program to receive financing and begin implementing new farming practices on her fields. Somalatha took out a seasonal loan of 50,000 rupees (US$435) to purchase seeds for new high-yield rice varieties and pesticides and to prepare the land, harvest and process the rice from her family's two-hectare (five-acre) farm. At harvest, her new crop yielded 13,000 kilos, and with an established buyer, she received about 50% higher than the average market price. With the earnings from just one season, Somalatha was able to pay back her loan and deposit 123,000 rupees (US$1,075) into a savings account at the Women’s Co-op.

Nueva Esperanza to open in several weeks

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TOLEDO (9/13/10)--Nueva Esperanza, or New Hope Community CU, is slated to open within the next several weeks as the state’s first Latino credit union. The credit union could be in its own building by the end of the year, said The Toledo Blade (Sept. 10). The state-chartered credit union is first credit union chartered in Ohio since 2001. The credit union is expected to have $1.3 million in deposits and $180,000 in start-up capital. It will serve members in Toledo’s Old South End. Besides Charter Bank, there is no financial institution in the neighborhood, Jessica Hernandez, vice president, told the newspaper. There are a lot of unbanked Latinos in the area, and they are not familiar with the services a credit union can offer them, she added. The credit union has received funding from several local and community foundations, and the Ohio Credit Union Foundation and the National Credit Union Foundation. Credit union leaders have raised funds to open the credit union for several years.

Ohio CU members embrace Shared Branching

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COLUMBUS, Ohio (9/10/10)--Ohio now ranks second in the U.S. for the number of Shared Branching locations and is seventh in national transaction volume, according to the Ohio Credit Union League (OCUL). “These numbers are especially significant considering Ohio has only been participating in the Shared Branching network for 10 years, while other states have used the cost-effective service delivery channel for 20 or more years,” said Marty Auxter, Business Consultant for OCUL Services Corp. (eLumination Newsletter Sept. 8). In addition to providing member account access and service, Shared Branching is a deposit generator for credit unions, and its users are some of the credit union industry’s most profitable members. This was confirmed by a two-year study conducted by Raddon Financial Group on behalf of CO-OP Shared Branching--which is part of CO-OP Financial Services, said the league. CO-OP Financial Services, based in Rancho Cucamonga, Calif., provides access and convenience products for credit unions. CO-OP connects credit union members to their accounts through CO-OP Shared Branching, network services, payment processing, e-commerce solutions and call center services.

Ireland CU shakeup is now vital

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DUBLIN, Ireland (9/10/10)--Ireland’s credit unions have been warned that paying generous dividends, or interest, on savings is no longer sustainable, according to James O’Brien, the country’s registrar of credit unions. A major shake-up in the way in which credit unions are governed is needed, and that regulation will become more intrusive, O’Brien told Irish credit unions (Belfast Telegraph Sept. 8). Rapidly falling investment incomes and higher loan losses for credit unions will put the brakes on dividends, O’Brien said in a major speech to the county’s representative body for credit union managers. “It is becoming clear that the high dividend-driven business model of many credit unions in no longer sustainable,” he added. In a related matter, Ireland’s Minister for Finance, Brian Lenihan, announced last week the membership for the country’s re-established Credit Union Advisory Committee (finance.gov.ie Sept. 3). The seven committee members will hold office for three years. The committee’s statutory function is to advise Lenihan about credit unions regarding the improvement of their management, protection of members’ and creditors’ interests, and other matters relating to credit unions.

Savers choose CUs for IRAs

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MADISON, Wis. (9/10/10)--An increasing number of retirement savers are selecting credit unions for their individual retirement accounts (IRAs). IRA balances are up 12% over the past year, according to the Credit Union National Association (CUNA). June 5300 call report data from the National Credit Union Administration indicates that 65.3% of the 7,717 credit unions in the U.S., including Puerto Rico, showed outstanding IRAs as of June 30, according to CUNA. IRAs make up 9.68% of mid-year CU savings--at $796 million for shares and deposits, according to data from the same time period. A study by Cogent Research indicated that for the first time, IRA assets are bigger than employer-based accounts like 401(k)s, said The Creston News Advertiser (Sept. 8). “IRAs are in sync with credit union ideals, like member education and financial planning,” said Stan Hollen, president/CEO of CO-OP Financial Services. He told the paper that a solid retirement plan involves making sure savings are there when the accountholder needs them and making sure the money lasts. “A disciplined, slow and steady approach is best, combined with insured safety and not spending unnecessarily,” Hollen added. “Member-owned credit unions, with their heritage of service, trust and security, are right in tune with today’s savers and retirees.”

Colorado CU foundation helps wildfire relief

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BOULDER, Colo. (9/10/10)--Elevations Foundation, which is the official charitable arm of Elevations CU in Boulder, Colo., announced Wednesday that it is accepting donations for the Fourmile Canyon fire relief efforts. The foundation is partnering with the Boulder Office of Emergency Management on the initiative. A wildfire burning in the steep mountainsides and canyons near Boulder has become the most destructive fire in the state’s history (Associated Press Sept. 8). As of press time, about 169 homes have been destroyed by the 6,200 acre fire, and 3,500 people have been evacuated. Four people remain missing. No deaths or injuries have been reported yet and the cause of the fire remains unknown, AP said. “We have a least one employee who has been evacuated,” Ed Beckman, Elevations assistant vice president of marketing, told News Now. “We also have had several members who have come into our branches and say that they have nothing left of their homes. We’re working with these individuals. “Contributions are starting to come in--a few hundred dollars so far,” he added. “We expect more because there’s been a lot of interest.” Donations can be made at any of the nine Elevations CU branch locations or by mail. Members of Elevations can also make donations over the phone by calling 303-443-4672, 970-667-8585, or 1-800-429-7626. Credit union membership is not required to support this cause. Donations will be accepted through Sept. 30. “All money donated will go directly to those aiding in the fire relief effort and to the families who have lost their homes or been displaced,” said Gerry Agnes, Elevations president/CEO. “In addition, Elevations Foundation will match all donations dollar-for-dollar up to $10,000.” The primary objective of the Elevations Foundation is to collect and distribute funds that support charitable causes and education within the communities Elevations serves. Elevations has more than $950 million in assets.

Northwest CU Assoc. would join CUAO Wash league

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PORTLAND, Ore. (9/10/10)--The Credit Union Association of Oregon (CUAO) and the Washington Credit Union League met Wednesday to finalize plans to vote Nov. 1 to merge the two trade associations. The boards also passed a resolution to brand the new entity as the Northwest Credit Union Association. The proposal now moves to a joint membership action. Wednesday’s meeting culminated a series of town hall-style meetings conducted by Washington league Chair Debie Keesee and CUAO Chair Gene Pelham and board members, who reached out to colleagues about the value of combining the trade associations, the leagues said. The meetings were conducted in more than a dozen cities across Oregon and Washington, culminating in Olympia, Wash., on Wednesday. “These town halls have provided us with important information to help guide the final structure and framework of the new association that will be presented to the joint membership,” said Washington league President/CEO John Annaloro. Credit union leaders also can discuss the merger during a breakout session at the Washington league’s annual convention Sept. 16 and CUAO’s convention Oct. 6. “This is truly a merger of equals building on the strengths and traditions of each organization,” Pelham said. “We have eliminated the Columbia River as a barrier to make us stronger in our advocacy and support of all credit unions.”

Okla. CU assoc. announces Jones as presidentCEO

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OKLAHOMA CITY (9/10/10)--Gary Jones is the new president/CEO of the Credit Union Association of Oklahoma (CUAOk). Jones told News Now that he is excited about his new role, and the opportunity to work with his credit union friends. “We are in a great position to help credit unions deal with the unique challenges in the [credit union] industry,” he said. The biggest challenge, he said, will be charting the course during change. The association recently changed its name to CUAOk and built a new facility, moving its headquarters to Oklahoma City from Tulsa. It also underwent some staff changes. However, Jones said CUAOk wants to ensure a seamless transition for member credit unions in how it delivers products and services. Jones previously served as president/CEO of will Serve CU in Tulsa until his retirement in 2007. He then joined CUAOk. He has served as interim president since July. “When credit unions were first established in 1934, the financial world was going through some challenges,” Jones said. “When we look at what we’re facing today [in the financial world] some of the challenges we faced over the last few years are exactly why credit unions were created.”

Michigan league meets with OFIR

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LANSING, Mich. (9/9/10)--The Michigan Credit Union League’s association services staff met Aug. 30 with Office of Financial and Insurance Regulation’s (OFIR) Deputy Commissioner Roger Little and Assistant Director John Kolhoff to discuss issues and trends in the state credit union industry. The second bi-annual meeting for this year touched on Michigan credit union and bank performance trends, board responsibilities, foreclosures and loan portfolio risk management. While assets across the industry increased by 6% in the last quarter, many Michigan credit unions have experienced a sharp drop on their return on assets (Michigan Monitor Sept. 7). OFIR stressed proper risk management of loan portfolios, and reporting loan modifications and troubled debt restructurings properly. Little and Kolhoff encouraged credit union CEOs to contact OFIR to discuss any unresolved differences with exam issues, including unprofessional examiner conduct. Michigan league staff meet regularly with senior staff from OFIR and the National Credit Union Administration as a part of the league’s regulatory outreach efforts. The league will meet with NCUA Supervisory Examiners Andrew Healy and Dennis DeMilner Oct. 4.

CU gives away new home

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JACKSON, Miss. (9/9/10)--CP FCU, Jackson, Miss., gave away a home and changed the life of a local family. CP FCU announced that it would give a new home to Tina Greer Friday through its “Wish Upon a Home Giveaway” contest. Greer, who has five children, was chosen out of a group of four finalists after going through an interview process and completing a 17-page application (WILX.com Sept. 3). John Crist, CP president, said he was excited to change Greer’s life. He said the community has given the credit union “so much” and CP wanted to give back. Greer will move into the four-bedroom home in October. She has lived in a trailer park, and has struggled since losing her husband in a car accident and her job in 2006. After living in the home for five years, Greer will own the home and be responsible for property taxes, insurance and utilities. Greer now works for a realtor in Florida from her home. Her determination has caught the attention of her friends and family. Dan Good, Greer’s brother-in-law, told WILX that she is a “very strong woman.” CP FCU has $323 million in assets.

Illinois foundation provides 28k in grants scholarships

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NAPERVILLE, Ill. (9/9/10)--The Illinois Credit Union (ICU) Foundation recently awarded $17,709 in Small Credit Union Development (SCUD), Community Service, Marketing and Business Development, and Financial Independence & Revitalization Effort (FIRE) grants, and $10,768 in scholarships, bringing the total awarded for the year to nearly $73,000. SCUD grants totaled $11,209 and were awarded to seven credit unions. Purposes for the SCUD grants included computer hardware and software, equipment and upgrades, and other operational needs. The recipients were: Alton Bell Community CU, Alton; CTA C&M FCU, Chicago; D-B ECU, Johnston City; IBEW Local 146 CU, Decatur; Ottawa (Ill.) Highway CU; Peru (Ill.) Municipal CU, and Urbana (Ill.) Municipal ECU. The foundation also awarded a single $500 Community Service Grant. The program encourages and rewards chapter or credit union participation in local community projects. Credit unions and chapters qualify for grants by hosting an established event, creating an event, or volunteering at an event. One chapter, Southern Illinois, received the grant. Two credit unions received Marketing and Business Development grants that totaled $6,000. The recipients were: Armstrong Preferred Members FCU, Bourbonnais; and Three Rivers Community CU, Mt. Carmel. Established in 2006, these grants help credit unions with assets of up to $30 million to start or expand outreach efforts. The maximum grant award is $5,000 per credit union per year. Also, $10,768 was awarded in scholarships to 28 recipients. Individuals and groups--as a chapter or group of credit unions--are welcome to apply. Scholarships may be used toward ICUL’s educational opportunities and CUNA schools. Recipients included:
* Alton Bell Community CU, Alton; * Archer Heights CU, Chicago; * Blaw Knox CU, Mattoon: * Effingham Highway CU, Effingham; * Financial Partners CU, Springfield; * First Security CU, Lincolnwood; * Generations CU, Rockford; * Heights Auto Workers CU, Burnham; * IBEW Local 146 CU, Decatur; * Israel Methcomm FCU, Chicago; * Jeff-Co Schools FCU, Mt. Vernon; * School District No. 9 CU, Granite City; * Shell Community FCU, Wood River: * SIUE CU, Edwardsville; * Southern Illinois Area CU, Swansea: * St. Mark CU, Chicago; * Urbana Municipal CU, Urbana; and * Wrigley Associates CU, Yorkville.
One chapter, Kankakee Valley, also was a recipient.

South Koreas CU movement celebrates 50 years

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SEOUL, South Korea (9/9/10)--On Tuesday, the credit union movement in the Republic of Korea celebrated 50 years since the country’s first credit union was established by 27 hospital employees in 1960.
Click to view larger image Participants in the World Council of Credit Union’s (WOCCU) December 2008 visit to South Korea included, from left, CUNA Mutual Group’s Paul Treinen, National Credit Union Federation of Korea Training Center Director Kwangtaek Choi and WOCCU Vice President of Association Services Dave Grace. (Photo provided by World Council of Credit Unions)
The movement’s unified and collaborative development approach has fostered its rapid growth to nearly 1,000 credit unions serving five million members, making it the world’s third largest, said the World Council of Credit Unions (WOCCU). The most visible byproduct of the credit unions’ efforts is a marketing program that positions the cooperatives under one common brand and set of values: self-help, self-reliance and cooperation. South Korean credit unions still operate as individual, member-driven financial cooperatives, but their position in the markets they serve rival those of the largest banks. With common signage and similar products and services, they maintain a distinct member service approach. Cooperative movements in Brazil and Poland, among other countries, have also found the approach effective. “South Korea’s credit unions serve as an excellent example for credit unions around the world of how a collaborative and unified approach to both front-office and back-office operations can truly propel an entire system to new levels of efficiency and reach economies of scale,” said Barry Jolette, World Council of Credit Unions (WOCCU) board chair and CEO of San Mateo (Calif.) CU. “The Korean movement has made tremendous progress since its founding, and I know they will be celebrating their outstanding success for a long time to come,” he added. The South Korean credit union movement began as a two-tier system, as it is today, with individual credit unions being direct members of the National Credit Union Federation of Korea (NACUFOK). In 1988, the movement restructured, leading to a nine-year stint as a three-tier system with another level of association in between the credit unions and NACUFOK. Similar structures are found in the U.S. and in several other countries. The movement restructured again in 1997, reverting back to its original two-tier organization. This change led to greater cohesion and collaboration among credit unions in their move toward a more unified brand, WOCCU said. In October 2000, all credit unions in the country became connected through an online system, and at year-end 2008, credit unions began using a single centralized information technology system to run operational software and store credit union data. The strategic approach to technology, a daunting proposition for many credit union movements, is one of the key components of the collaborative approach that characterizes South Korea's credit unions. Shared technology is just the latest collaborative effort that has helped South Korea's credit union movement grow, according to Dave Grace, WOCCU vice president of association services. “Credit unions in many countries are looking for ways to centralize operations and gain national brand recognition without sacrificing local ownership and the member service touch,” Grace said. “Credit unions around the world can be proud of the great success that the South Korean movement has achieved in finding that balance and effectively serving its membership over the past 50 years.”

CU System briefs (09/08/2010)

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* BEAVERTON, Ore. (9/9/10)--First Tech CU, Beaverton, Ore., has partnered with the U.S. Environmental Protection Agency’s (EPA) SmartWay program to offer members a 0.25% reduction when financing a “green car.” First Tech’s discount can be applied to all SmartWay certified cars with a maximum of 100,000 miles (BusinessWire Aug. 25). “We created our green auto program to save our members some ‘green’ as a bonus for choosing an environmentally friendly vehicle,” said Deborah Colby, First Tech vice president of marketing. “And with the additional tax incentives offered by the federal government, purchasing a green car or hybrid vehicle is really a smart financial decision.” First Tech has $2.186 billion in assets ... * MERIDEN, Conn. (9/9/10)--The Credit Union League of Connecticut has released an electronic version of the program guide for its education series of workshops, seminars and discussions at no cost to affiliated credit unions. The guides are being printed and will be sent shortly, the league said. The program is scheduled in eight full-day and eight half-day sessions March through November, except in August. Subjects include check law, the economy, security, strategies for growth, political perspectives, bankruptcy and collections, the Bank Secrecy Act, use of social media and human resources ... * DES MOINES, Iowa (9/9/10)--Miriam De Dios has been promoted to vice president of Coopera Consulting. De Dios will oversee the company’s client delivery operations, product development process and marketing efforts. De Dios has worked for Coopera for three and a half years to provide products and services to clients. Prior to Coopera, she worked as an account credit manager and market analyst for John Deere Credit. Coopera is a subsidiary of the Iowa Credit Union League and a partner of the Credit Union National Association. (Photo provided by the Iowa Credit Union League) ...

San Antonio CU offers solar home-improvement loan

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SAN ANTONIO (9/9/10)--San Antonio CU (SACU) announced a solar home improvement loan program Tuesday that is available for homes located in San Antonio, Texas, and Houston, making solar energy affordable for homeowners.
Click to view larger image Kicking off the Bring Solar Home initiative in San Antonio are, from left, Chris Eugster, CPS Energy; Aurora Geis, senior credit officer for San Antonio CU (SACU), and Chuck Smith, SACU director of lending; Commissioner Tommy Adkisson, Bexar County; Bill Sinkin, Solar San Antonio; Mayor Julian Castro, City of San Antonio; and Lanny Sinkin, Solar, San Antonio. (Photo provided by San Antonio CU)
The program provides financing to those individuals who value energy alternatives and access to solar home improvements that will reduce their monthly utility bill. SACU and community partners also kicked off Bring Solar Home, an initiative of Solar San Antonio, designed to encourage local solar commitments and educate the community on the benefits of solar energy. The goal of the Bring Solar Home campaign is to make installing solar systems easier for residents. For years, the barrier for most homeowners to installing solar energy has been a large up-front cost. SACU said it can help those who have been waiting for the right time to transition to energy efficiency. Because of a significant price drop in the cost of installing solar systems, plus CPS Energy rebates for San Antonio properties and a federal tax credit, installing a residential solar system is an easy and cost effective option for homeowners on both primary residences and residential investment properties, SACU said. “SACU is proud to provide this innovative solar home improvement product that promotes alternative energy use and lower energy costs,” said Chuck Smith, SACU director of lending. Based in San Antonio, Texas, SACU has $2.8 billion in assets.

Report CU CEO pay declined 3.5 in 09

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MADISON, Wis.--(9/9/10)--Credit union CEO total compensation declined 3.5% in 2009, and that decline can be traced to a reduction in variable pay, says a new Credit Union National Association (CUNA) report.
Click to view larger image Click for larger view
Overall, 59% of CEOs of credit unions with $100 million or more in assets received a bonus and/or incentive reward in 2009, down from 73% in 2008, according to the 2010-2011 CEO Total Compensation Survey Report. The median amount awarded in 2009 is $16,345, down 37% from $26,000 in 2008. “Because credit unions cannot offer the equity vehicles which make up the bulk of compensation packages for CEOs of publicly traded companies, base salary comprises the largest portion of the total compensation package for credit union CEOs,” said Beth Soltis, CUNA senior research analyst. “Therefore, credit unions have historically used variable pay plans to reward performance and boost credit union CEO compensation levels.” “In fact, if CEOs are eligible for variable pay but don’t receive payouts and perceive the cause to be external market factors they cannot control, the result can be diminished motivation and a greater likelihood for them to seek opportunities elsewhere,” she added. “As business performance improves, credit unions will need to evaluate their variable pay plans--and their ability to provide payouts--in order to reward and retain their CEOs.” The survey provides nationwide CEO compensation data for credit unions $100 million plus in assets. Results are conveniently categorized by asset size, region, and many other points of comparison to help credit unions attract or retain top CEO talent. The report--available in print or Adobe PDF format--also assigns a monetary value of the total compensation package to help measure the bottom-line value of a CEO compensation package to other credit unions. Purchasers of the survey report may also receive a discount on the CEO Total Compensation: Self-Selected Peer Analysis. This customized analysis reveals CEO salaries, health plans, contract terms, bonuses and retirement plans for 10 or more specific credit unions that meet a credit union’s own peer criteria. For more information, use the link.

N.J. CU finds social media niche

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PARSIPPANY, N.J. (9/8/10)--Garden Savings FCU, Parsippany, N.J., has found its social media niche. The credit union entered the social media scene in early summer with a video featuring Garden Savings President/CEO Lou Vetere. The video received more than 200 views on YouTube. In the video, Vetere provides an overview of what the credit union offers its members (The Weekly Exchange Aug. 23). A second video the credit union released parodies the differences between credit unions and banks. The script was written by the credit union’s sales and marketing team. Mike Powers, assistant vice president of marketing and business development; Rob Anselmo, vice president and retail sales and service; and Daniel Czerniawski, assistant vice president of lending, appear in the video. In the video, the credit union exposes the holes in banking customer service. “We plan on using the video as an educational piece to display to members and potential members,” Vetere said. The $190 million asset Garden Savings has partnered with Grey Sky Films, which films and produces the credit union’s videos, and monitors its Facebook, Twitter and YouTube accounts. While Garden Savings doesn’t use TV ads, it ran a radio campaign and a print ad campaign in Portuguese newspapers in Newark, N.J. The ads reinforce the credit union’s dedication to the Newark community. Six of seven Newark branch employees speak Portuguese. The credit union is getting ready to launch new target marketing and reporting software in November to track its marketing. In the future, the credit union hopes to separate its marketing efforts between traditional, direct mail and social media at a percentage of 50/20/30, Powers said. “The hardest part of social media is to get people to follow you,” Powers said. “More members are signed up now, but it was difficult to start.” Of the 27% of companies without a social media marketing strategy, 80% plan to have one in the next year. Only 11% of companies without strategies do not plan to implement one in the next year, with 9% undecided, according to a recent survey by King Fish Media (LoneStar Leaguer Aug. 25). About 75% of companies plan to increase their social media investment in the next month. Of companies planning a social media increase, one-third are tying it to a specific project, another third will make social media an incremental marketing budget increase and one-fifth will fund social media by moving budgets, while 11% are not sure.

CUs mitigate high health insurance costs

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MADISON, Wis. (9/7/10)--Workers in the U.S. likely will experience a 14% increase in the cost to insure their families, according to CNNMoney.com. Credit unions are taking a proactive approach to keep health costs down for their employees. Roughly two-thirds of credit unions provide some type of health insurance to employees. One-third of credit unions with health care plans reported making changes for 2010, according to the Credit Union National Association’s (CUNA) Credit Union Staff Benefits Report 2010. Among credit unions that made changes to reduce their 2010 health care plan costs, 41% increased employee cost-sharing for health care coverage, 37% increased/enhanced communications to employee on health issues, 34% studied health care data for cost of utilization patterns and 32% added use of their wellness program. Most credit unions that changed their 2010 plan increased the deductibles, employee cost-sharing of premium costs and co-payments. Among credit unions that made changes, about 45% increase employee deductibles for single coverage and family coverage, while 34% increase employee contributions to the annual premium for single and family coverage, said the CUNA report. Also, roughly 30% increased co-payments for prescription drug coverage, office visits and emergency room visits. About 10% to 15% changed insurance providers, changed the type of health insurance plan offered to employees, and set up health reimbursement accounts. Looking ahead to 2011, Meritrust CU, Wichita, Kan., has redesigned its employee health insurance plan for the next year. The credit union “married” the benefits of its health insurance with a wellness program that it launched five years ago, said Byron Stout, vice president of human resources. “We’re positioning ourselves for health care reform,” Stout told News Now. Meritrust has “unbundled” its plan with separate medical, dental and vision providers. It also implemented a mandatory generic drug policy, meaning that if employees choose to buy a name brand drug when a generic is available, they will pay the difference. The credit union added preventive care so employees are covered 100% for yearly doctor, dental and eye exam visits. The added benefits have increased premiums by about 8% on average for its three-tiered insurance program, but Meritrust anticipates a significant return. Of Meritrust’s 190 full-time employees, about 140 participate in its insurance program. The insurance is structured at 50-50, meaning that employees pay half until they hit their co-insurance limit, when coverage moves to 100%. Employees’ monthly premiums increased, but employees seem to be happy with the new plan. “There’s a lot of angst,” Stout said. He added that the credit union is aware of other companies that have had to increase premiums by 20%. Meritrust’s wellness program takes a holistic approach, allowing employees to earn points for wellness activities--including physical, mental and financial health. Employees who don’t have health insurance through Meritrust are eligible to participate in the wellness program. Credit unions need to be proactive with their health plans, and do their homework. Stout advised them to seek the help of a broker--but only brokers who will go above and beyond by providing them with more than just what they’re paid to do. “You know it’s the right broker if they provide you with other services,” he said. For example, Meritrust’s broker has connected the credit union with partners for its health plan. Credit unions also need to communicate with their employees on the cost of insurance, Stout said. “The first thing we did was tell them what the credit union pays out of pocket [for their health coverage],” Stout said. “The response was, ‘Wow.’ We do our best in educating and communicating to [our employees.]” Denver (Colo.) Community FCU said it isn’t sure what will happen with its health plans for next year, but its deductibles and co-pays on employee plans went up for 2010. However, the credit union was able to maintain a 2% increase, said Barbara Rash, human resources manager. “The employees were very understanding,” she said. “There’s tough news out there with the economy.” Keesler FCU, Biloxi, Miss., also is monitoring the health care situation. It isn’t sure yet what premiums will look like until after Jan. 1, as its renewal date for insurance is in May, but said it would let its employees know as soon as possible what kinds of changes to anticipate. “We will be communicating things as soon as we get our changes from our medical provider,” said Debbie McVadon, Keesler vice president of human resources. Employees have not voiced their concerns about healthcare yet, she added. Like Meritrust, the credit union has a wellness committee that plans regular activities, and Keesler is involved with the American Heart Association’s Start Walking program. Employees are encouraged to walk on their breaks, and participants can wear jeans and casual shoes on Fridays, she said. Employees can log the number of steps they take and those with the highest number of steps are eligible for prizes, she said. Keesler also will become a tobacco-free workplace Nov. 1, which means that employees, members and other visitors will not be able to smoke on the credit union’s properties. The credit union is hoping that it will deter people from smoking and reduce healthcare claims.

SECU gives members Another Chance on NSF fees returned checks

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RALEIGH, N.C. (9/8/10)--State Employees’ Credit Union (SECU) is offering its members “Another Chance” against non-sufficient funds (NSF) fees and returned check charges. The new program provides members another opportunity to better control their own financial well-being, with SECU serving as an ally, the credit union said. For more than 20 years, SECU has offered a “true overdraft protection” program which is used by over 85% of the credit union’s traditional checking accountholders. True overdraft allows members to designate two SECU accounts as protecting accounts for checking. If a need arises, funds are transferred from the protecting accounts to the member’s checking. As technology has advanced, SECU expanded the true overdraft program to minimize traditional returned check charges and to serve members with alternative checking needs. SECU has completed a series of updates to its overdraft program with an “all members are good folks attitude”--with the belief that SECU members are responsible consumers and are trying to “do the right thing,” SECU said. An extension in the business day cutoff and the addition of a mobile text alert system set the stage for Another Chance. Another Chance notifies checking account-holders via text or secure message when there are insufficient funds in their checking account to cover an item. An alert provides the members with an early “wake-up-call” reminder to make a deposit by the end of the business day to avoid an NSF fee. An additional way to help traditional accountholders avoid fees is SECU’s new NSF Fee Free Days, which saved credit union members more than $3.5 million in 2010, SECU said. NSF Fee Free Days were designed for members who may make an occasional mistake with their traditional checking account. By waiving any $12 NSF fees the member may incur on two days each year, SECU said it is giving members the “break” and support that they deserve. SECU also offers the new SECU Cash Points Global (CPG) account as an alternative checking service. Already being used by nearly 7,000 SECU members, CPG was put in place as a controlled spending account/card. Since all transactions are limited to the available funds in the account, the member avoids any potential for overdraft or NSF fees. The Cash Points Global account also includes availability of direct deposit, ATM access, Visa-branded worldwide convenience, and no-cost bill pay service. Enrollment for Another Chance is online. There is no charge for the service. Members provide mobile service contact information to SECU. “It has never been the focus of SECU to benefit from members’ errors, and we feel confident that our efforts over the past two years have resulted in an overall plan that will minimize returned items and any potential fees for members,” said Sue Douglas, SECU senior vice president of operations. “Another Chance is a terrific addition to SECU’s ongoing efforts to put financial literacy into practice and keep money where it belongs-- in the pockets of our members.” Based in Raleigh, N.C., SECU has $19 billion in assets. New Federal Reserve rules give debit and ATM card users additional options regarding overdrafts. Banks, credit unions, and other financial institutions must offer consumers the ability to make decisions about overdrafts for transactions made with debit or ATM cards.

CUs in position to help consumers

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MADISON, Wis. (9/8/10)--Credit unions have unique characteristics that allow them to help consumers in a troubled economy, according to some recent media reports. Some examples are:
* In an Aug. 29 letter to the editor of the Akron Beacon Journal, Susie Preston, CEO of Buckeye State CU, Akron, wrote: “Credit unions have found themselves in a relatively unique position as a result of the economy. Assets at Ohio credit unions are up nearly 8% in 12 months. When the stock market sours, consumers tend to liquidate and find a safe haven for their savings. Typically, credit unions offer higher interest rates on savings, and while savings rates are down universally, consumers look for any advantage when it comes to positive returns.” To read the letter, use the link. * A Sept. 2 post on the Mint.com blog titled “Bank or Credit Union? You Decide,” touts credit unions’ differences over banks. “The profits credit unions make are passed onto members," for instance "in the form of lower fees," the article said. “That is why credit unions typically offer higher rates on savings, lower fees and lower rates on loans than banks. They also offer online banking, ATM’s with no surcharge and overdraft protection,” and, the blog posting noted, "credit unions offer financial education and counseling without giving potential members a hard sell on their products." Credit unions “focus more on service and less on profitability,” the article noted. To read the post, use the link. * Consumers who are looking to change banks also should consider credit unions, according to an Aug. 31 Chicago Sun-Times article, titled “Switch banks with caution; Lots of deals out there, but know ins, outs first.” “Shop around and include big banks, small community banks, credit unions and online banks in the search … Smaller community banks and credit unions may have a more limited product lineup, but consumers tend to get a better deal in terms of higher rates on deposits, lower rates and lower fees on many loan products, as compared to their larger bank competitors,” the article said. To read the article, use the link.

CUNA calls for director nominations

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WASHINGTON and MADISON, Wis. (9/8/10)--The Credit Union National Association (CUNA) is seeking nominations for nine positions on the CUNA Board of Directors. The following positions are up for election, and the successful candidates will take office Feb. 28, serving a three-year term, which will expire at the adjournment of the 2014 CUNA Annual General Meeting:
* District 1, Class A; * District 1, Class D; * District 2, Class B; * District 2, Class D; * District 3, Class C; * District 4, Class A; * District 5, Class C; and * District 6, Class B.
Also, there is one special election to be held. CUNA’s current District 6, Class C director has indicated he will step down from the board at the end of this year. The successful candidate in that special election will be seated Jan. 1, and will serve through the 2012 CUNA Annual General Meeting. To become an eligible candidate for a CUNA Director position to be elected by credit unions, an individual must be an employee or voting board member of the nominating credit union. To become an eligible candidate for a CUNA Director position to be elected by leagues, an individual must be a league president and must be nominated in writing by his or her league, and the nomination must be seconded in writing by at least one other league from the district. Nominations and seconds are now being accepted. The deadline for nominations and seconds to be returned to CUNA's Corporate Secretary is Oct. 22. Nominators must submit the appropriate forms and obtain consent of the candidate. Voting will take place beginning Oct. 27 and will close on Dec. 17. For more information, use the resource link.

Study CUs beat banks on trust--again

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MADISON, Wis. (9/8/10)--Banks could take a lesson from credit unions on building relationships, according to a recent Mintel Comperemedia report. About 36% of big bank customers trust their bank, compared to 57% of credit union members, the report said. Ten percent of participants in the survey also switched their primary accounts to credit unions from banks in the past year (Marketing Weekly News Sept. 11). Roughly 60% of respondents said trust in a brand is more important than price. Consumers said trust in financial brands is similar to trust in personal relationships, with “honesty” and “respect” at the top of their list of 12 attributes. Consumers would feel less resentful about paying fees if larger banks made a greater effort to do more relationship marketing with their customers, Mintel said. Such good results from consumer satisfaction surveys are not rare. For instance, just last month credit unions were at the top of a recent poll by the Chicago Booth/Kellogg School Financial Trust Index. About 62% of consumers said they trust credit unions, compared with 57% for local banks, 35% for national banks and 27% for banks in which the government has a stake (News Now Aug. 6).

CU System briefs (09/06/2010)

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* DECATUR, Ill. (9/8/10)--An employee of Decatur, Ill.-based Earthmover CU was charged with five counts of theft by deception after auditors discovered more than $150,000 had been stolen from the accounts of members who were deceased or living in nursing homes. The employee, based at the Forsyth, Ill., branch, who was not identified, was a personal banker assigned to the accounts. The crimes took place from September 2008 until last Wednesday, when the woman was arrested. One member noticed discrepancies in the account and notified the credit union. The credit union is working with authorities in the investigation. The employee will be arraigned Oct. 5 (Herald-Review Sept. 3). News Now had previously stated Earthmover CU was located in Aurora, Ill. ... * MOSS POINT, Miss. (9/7/10)--Singing River FCU has launched a program that will award $10,000 to Moss Point and Gautier high schools and bring financial literacy training to their classrooms. The schools' students will compete to win the money by producing their own "Singing River Shuffle" hip-hop dance videos. The $152 million asset, Moss Point, Miss.-based credit union will post the videos on its website at www.srfcu.org, and the public will chose the winners. The winning school will receive $7,500 and the second-place winner will get $2,500. Singing River FCU will announce the winner at the Moss Point/Gautier football game on Nov. 5. The school also will present financial literacy classes at the schools' economics classes, where students will learn about budgets, credit cards and current data on salaries available to students who finish high school and pursue a college education ...

Alliant CU Continental FCU to merge by January

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CHICAGO (9/7/10)--Alliant CU in Chicago announced Thursday that it reached an agreement with Continental FCU of Tempe, Ariz., to merge operations following recent approvals from each institution’s board of directors. The combined entity will go forward under the Alliant CU name once the merger receives regulatory approval and the integration is complete, which is projected to be in January, Alliant said in a news release. Alliant CU President/CEO David W. Mooney will continue in his role. Alliant has more than $7 billion in assets and about 260,000 members nationwide. Its members include employees, family members and retirees of United Airlines and other select employee groups, as well as qualifying communities. Continental FCU’s main sponsors are Continental Airlines and US Airways. Continental FCU’s separately branded US Airways CU will also be included in the merger. Through the merger, Alliant will gain about 24,000 members and assets of $170 million. Alliant Chief Operations and Technology Officer Rudy Pereira will serve as interim CEO of Continental FCU, managing the day-to-day operations of Continental and its seven branch locations during the merger process. Thomas J. Martin, Continental president/CEO, will be retained in a consultant role to assist Pereira during the transition.

Proponents of MBLs take message to media

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MADISON, Wis. (9/7/10)--Proponents of increased credit union member business lending (MBL), including several state credit union leagues, took their messages to the media in recent weeks. If lawmakers pass pending legislation to raise credit unions’ MBL cap to 27.5% of total assets from 12.25%, it would boost Sacramento, Calif.- area businesses, said a lengthy article in comstock’s magazine (September ) titled “Where credit’s due, lifting the lending cap on credit unions.” “We’ve been a proponent of this change since 1998,” Bob Arnould, senior vice president of government affairs for the California Credit Union League, told the magazine. “Prior to 1998, there was no cap on small-business lending. There’s an economic situation now where banks are not lending, and it is the right time to raise the cap.” Increasing the cap could add $2 billion in additional investment in California, the league told the magazine. The magazine also mentioned Travis CU, Vacaville; The Golden 1 CU, Sacramento; SAFE CU, Sacramento; and Sierra Central CU, Yuba City. To read the article, use the link. John Murphy, president of the Maine Credit Union League, said MBL received strong support from two guests on the Aug. 22 edition of Mainebiz Sunday TV Show, which focused on what to do about tight credit for small businesses in Maine and feature three guests. Guests Rosa Scarcelli, CEO of Stanford Management and a former gubernatorial candidate in Maine, and Nicole Witherbee, former federal policy analyst the Maine Center for Economic Policy and now principal owner of her own consulting business, supported raising credit union’ MBL cap (Weekly Update Sept. 3). “It was nice to receive strong support from two pretty savvy business people on a show that is watched by many small-business owners and consumers across Maine,” Murphy said. Brett Thompson, president of the Wisconsin Credit Union League, wrote a letter to the editor of The Milwaukee Business Journal (Aug. 27), in which he said most of state residents support raising credit unions’ MBL cap. “The vast majority of Wisconsin voters polled by the Wisconsin Credit Union League, 75%, say they would support an amendment that’s been proposed to the U.S. Congress to make more credit available to Wisconsin companies through credit unions,” Thompson wrote. “The measure would be a boon for small businesses with modest credit needs--the very businesses that often find it difficult to find financing. Because credit unions strive to meet their member-owners’ credit needs regardless of profit, they’ll grant smaller loans,” Thompson concluded. To read the letter, use the link.

AVCU forming compliance council

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BURLINGTON, Vt. (9/7/10)--The Association of Vermont Credit Unions (AVCU) is creating a Compliance Council open to any employee or volunteer of an AVCU member credit union. The council will serve as an exchange forum among credit unions on state and federal compliance topics. It also will serve as a sounding board to represent Vermont credit unions in response to state and federal regulatory proposals. The council will first meet Oct. 4 to discuss changes to the Fair and Accurate Credit Transactions (FACT) Act. AVCU will provide a webinar presentation followed by a question-and-answer period, a follow-up discussion among participants and an open-ended discussion about future plans for the council. “Regulatory compliance has become an enormous burden for credit unions of all types and sizes,” said Joe Bergeron, AVCU president. “There are many resources available to help credit unions, including AVCU’s Compliance InfoSight website, webinars, listserves, teleconferences, and much more. What we hear from the majority of credit unions, however, is not about a lack of information, but the time to review and understand it.” Bergeron said he envisions the Compliance Council meeting once each quarter, using webinars and teleconferences as informational resources, jointly sharing sample documents, and cooperatively creating new ones via a council website.

NCUA contests another participation-loan ownership

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CLEVELAND, Ohio (9/7/10)--The National Credit Union Administration (NCUA) filed suit in a U.S. District Court in Ohio Thursday, seeking an injunction to stop arbitration of a participation loan agreement that involved a credit union it placed into liquidation in May. NCUA is contesting the ownership of the participation loan, which was sold by the now defunct St. Paul's Croatian FCU of Cleveland, to Lormet Community FCU, Amherst, Ohio. Lormet had filed a suit before the American Arbitration Association (AAA) for emergency relief over the portfolio against NCUA and its Asset Management and Assistance Center, the liquidating agent. According to the court documents, Lormet claims it owns 90% of a portfolio of more than $8 million in outstanding loans that St. Paul Croatian held and serviced. "LorMet has been shut out both from information concerning and control of the loans that it principally owns, and has reason to fear that the asset is deteriorating or has been improperly combined with other assets in St. Paul's estate," said the credit union's complaint. It cites a provision of the May 7, 2007 loan-participation agreement that gives it the right to the entire loan upon "insolvency, liquidation or appointment by any public or supervisory authority of any person or firm in charge of St. Paul's assets." NCUA filed its request for an injunction in the U.S. District Court for the Northern District of Ohio--Eastern Division in Cleveland to stop AAA from proceeding with Lormet's claim. The agency said it is not bound by the arbitration provision in the agreement because it is not party to the agreement and the agreement provides that federal law controls on the issues. The injunction request also said that Lormet's sole remedy is to pursue its claims with the liquidating agent, and that LorMet had waived any rights to pursue its claims through arbitration because it filed its claim first with NCUA's liquidating agent. Participation loans have prompted several lawsuits related to defunct credit unions recently. The latest occurred in August, when a suit was filed related to the loans from Eastern Financial Florida CU.

42 new CU development educators trained

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BAINBRIDGE ISLAND, Wash. (9/7/10)--Forty-two credit union professionals were guided by eight program facilitators and mentors through a week-long Credit Union Development Education (DE) training session on Bainbridge Island, Wash. Bob Schumacher, credit union development educator (CUDE) and president/CEO, Mountain Crest CU, Arlington, Wash., gave the keynote address. As one of the ambassadors of the DE program, Schumacher told of his journey to becoming a DE and challenged the group to get involved and stay involved.
Click to view larger image Forty-two credit union professionals became the latest credit unions development educators (CUDE) at a week-long Credit Union Development Education (DE) Training held on Bainbridge Island, Wash. (Photo provided by the National Credit Union Foundation)
“As new DEs it is completely up to each of you to make a difference,” Schumacher said. “You have the tools, you have the resources and you have the passion. You just need to put it all together and get it done.” “Credit union philosophy, development issues, collaboration, differentiation, credit union cooperation … these are concepts I now understand on a world-wide level as a result of my DE Training,” said Josh Allison of Horizon CU, Spokane Valley, Wash. “I understood the difference credit unions made here in the U.S., but I now understand how valuable our movement is on an international platform as well.” Participants were involved in group exercises, encouraged to ask questions of visiting lecturers and completed team projects proposing solutions for credit unions to help alleviate or eliminate challenging situations. “We continue to update our program case studies and group activities each year to address relevant challenges faced by credit unions today,” said Lois Kitsch, DE training facilitator and national program director of REAL Solutions, a program of the National Credit Union Foundation. “We then demonstrate ways to capitalize on the opportunities created in overcoming these challenges to benefit our members.” The summer 2010 graduating class included credit union movement representatives from 17 states across the U.S., two from the Philippines and one from Zimbabwe participating through the African DE Scholars Program. (To see the class list, use the link.) The next scheduled DE training class will take place April 6-13, in Madison, Wis. DE training is open to everyone from new employees who need a credit union orientation to seasoned executives who need to recharge. Scholarships are available through NCUF’s DE Fund and through several state credit union foundations and leagues. For more information, use the link.

CU in Hawaii to open branch in Las Vegas

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LAS VEGAS (9/7/10)--Aloha Pacific FCU, Honolulu, is opening a branch in Las Vegas, according to local media reports. The credit union was lured to the area by tens of thousands of former Hawaiians in the state, said The Las Vegas Review-Journal (Sept. 2). On Nov. 1, Aloha Pacific will take over the lease for a branch location that Silver State Schools CU intends to close, Aloha Pacific CEO Wallace Watanabe told the newspaper. This will be the first time a Hawaii-based credit union opens an out-of-state branch, Aloha Pacific said. Aloha Pacific has $725 million in assets and is the third-largest credit union in the state. About 140,000 former Hawaiians live in the Las Vegas area, Watanabe said. Aloha Pacific intends to accept alumni of the University of Hawaii and other Hawaii groups at its Las Vegas branch.

Heartland Discover agree to 5M breach settlement

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PRINCETON, N.J. (9/7/10)--Card payment processor Heartland Payment Systems has agreed to pay Discover Financial Services $5 million as a settlement in its massive data breach case, which forced credit unions and other financial institutions across the country to reissue credit and debit cards. Heartland announced the agreement--the fourth and final one it has made in a series of lawsuits--on Thursday. Heartland announced the data breach in January 2009. The breach involved malicious software that compromised card numbers, expiration dates and in some cases names of the consumers using the debit or credit cards at Heartland's network of 250,000 businesses. The breach exposed 130 million credit and debit cards (News Now July 20). Heartland had set aside $140 million to cover lawsuits from the break-in (Bank Systems & Technology.com Sept. 3). The latest settlement brings its settlement costs with card companies and class action suits to a total of $112.1 million. In May, Heartland entered a $41.1 million settlement with MasterCard (News Now July 20 and May 21). In January it agreed to pay up to $60 million to issuers of Visa-branded credit and debit cards (News Now Jan. 11 and July 20). Earlier it entered into a $3.6 million settlement with American Express and a $2.4 million settlement in a consumer cardholder class action (News Now Dec. 21 and Dec. 29). When settlements were announced in the Visa and MasterCard cases, attorneys for a small group of credit unions and banks indicated the settlements amounted to card-issuing institutions receiving only "pennies on the dollar." Last month the hackers responsible for the Heartland breach--including American Albert Gonzalez and two Russian accomplices--were indicted in a U.S. District Court in New Jersey on charges they carried out the largest hacking and identity theft in U.S. history. The group allegedly stole information about more than 130 million debit and credit cards by hacking into computer systems of Heartland, Hannaford Bros. supermarkets, and 7-Eleven. Gonzalez was sentenced to 20 years in prison.

Keeping an eye out for Earl... Fiona... Gaston...

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MADISON, Wis. (9/3/10)--Lining up like ducks at a shooting gallery, hurricanes and tropical storms in the Atlantic mean credit unions are keeping an eye on the weather and making sure their disaster recovery plans are in place. But budget cuts in information technology (IT) departments could affect how well they work. The National Oceanic and Atmospheric Administration (NOAA) predicts an unusually active hurricane season this year, saying it could rival 2005--the most active year on record. The peak hurricane season--late August to November--has just begun. Hurricane Earl, which was reduced to a Category 2 storm as of 8 p.m. Thursday, was churning off the North Carolina coast about 185 miles south of Cape Hatteras, N.C., with sustained winds of 110 mph at that time. Its path is along the East Coast of the U.S. That hurricane will be followed closely by what are now tropical storms Fiona and Gaston making their way across the Atlantic Ocean (Los Angeles Times and USA TODAY Sept. 2). Fiona is heading toward Bermuda while Gaston is too far east to predict its path accurately. The increased storm activity is a reminder of what credit unions learned five years ago when Hurricane Katrina and other storms prompted them to review their disaster recovery plans. Since Katrina, the need to keep data centers and applications running during disasters has become more vital because businesses and financial insitutions are relying increasingly on automation. It is becoming more difficult to run businesses manually, Deloitte & Touche's Technology Risk practice told ComputerWorld.com Sept. 2). But, according to Damian Walch, director of the practice, IT systems are at a greater risk when a storm hits now because the economic downturn has resulted in businesses cutting back on IT budgets. During the past year, some companies have put their business continuity or recovery programs on hold--or scaled them back--resulting in "bad habits." The cutbacks have resulted in decreased investments in alternative data recovery sites, fewer staff responsible for disaster recovery and business continuity, insufficient capacity on servers and storage, and neglect in updating plans and procedures, said the article. With fewer staff to run the systems, companies don't have the geographic diversity as before, and the risks have increased, Walch told the publication. Credit unions and others are reminded that September is National Preparedness Month. "There is a tendency to think that a large-scale disaster is not going to happen 'where I live,'" said U.S. Small Business Administration (SBA) Adminstrator Karen Mills in a press release Wednesday. "The reality is that storms, floods, earthquakes, fires and man-made disasters can strike anytime and anywhere." SBA urged businesses and the public to prepare for disasters and provided four tips:
* Develop a solid emergency response plan. * Make sure you have adequate insurance coverage. * Copy important records. * Create a "Disaster Survival Kit."

Movement rallied for Katrina victims Last of series

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MADISON, Wis. (9/3/10)--It's hard to wrap one's mind around the extent of the damages and hardship wreaked five years to the Gulf Coast by Hurricane Katrina. Almost as mind-boggling is the extent of the credit union movement's response--one that time and time again is mentioned by the people who lived through the disaster.
Click for slide show Cash became king in the aftermath of Hurricane Katrina. An Escambia County, Fla., SWAT team accompanied two Pensacola, Fla.-based Pen Air FCU officials to deliver funds to Keesler FCU in Biloxi, Miss. The delivery was made on Sept. 2--four days after Katrina hit the Gulf Coast. The civilians in the photo are John Davis, then president/CEO of Pen Air FCU; Scotty Broome, then president/CEO of Keesler FCU; and John Ochs, then Pen Air FCU executive vice president/chief operating officer. (Photo provided by Pen Air FCU)
Katrina brought out the Good Samaritan in everyone. Credit unions took full advantage of their cooperative nature and the system in place to get credit unions in the affected areas the help they needed. They stepped up to provide the type of assistance that they themselves almost take for granted because, "Hey, that's our philosophy--'People Helping People.'" But credit unions broke all kinds of records with their outpouring of support. The National Credit Union Foundation (NCUF), aided by collections efforts coordinated by state credit union foundations and leagues, said in 2009 that it worked with the Louisiana Credit Union League and Mississippi Credit Union Association to distribute more than $3.6 million in Katrina-relief grants--specifically for credit union people. It was the largest disaster-relief fundraising effort in credit union history (News Now Feb. 3, 2009). As a result of that hurricane season, a new fundraising mechanism was formed: CU Aid, the online fundraising platform developed by NCUF to assist credit unions and credit union people impacted by disasters. Using the platform helped to keep credit unions' relief dollars helping credit unions. The platform still exists today, and was used most recently in getting relief to credit unions destroyed in Haiti's earthquake. Funds were just the tip of the iceberg. In the months that followed the Aug. 29, 2005 landfall of the hurricane, thousands of credit unions chipped in, with funds, office equipment, supplies such as satellite phones and generators and backup equipment. Some credit unions opened their physical doors to credit unions whose branches were underwater and shared their space. The state leagues in Louisiana and Mississippi, whose employees faced much the same situation as their credit unions' employees, coordinated at the local and regional level, helping find temporary offices, matching donor credit unions with ones in need, acting as liaisons between homeless credit union employees and grants from credit union foundations, and setting up visits with grief counselors. A shortage of cash right after the hurricane hit prompted help from several corporates such as Louisiana Corporate CU, which offered $15 million in special disaster lines-of-credit at 0% interest. By early November that year, it had already loaned out $8 million. (News Now Nov. 8, 2005). Southeast Corporate FCU coordinated cash drops to Mississippi credit unions and provided equipment. Its staff trucked in 25 generators, gasoline, cell phones and computers (News Now Sept. 7, 2005). Others concentrated on the people, getting them the basics: a place to stay, food, and even utensils. Numerous credit unions "adopted" the staffs of the affected credit unions and provided support. News Now received a steady flow of information in 2005 and 2006 detailing what credit unions were doing to help. (See slide show). And sometimes the little gestures meant the most--the cookies baked, the Valentine's Day flowers sent, the holiday presents provided for staff and families. All in all, credit unions more than lived up to the philosophy they practice every day. But with Katrina, they went above and beyond.

Pa.s small-loans program saves consumers 12M

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HARRISBURG, Pa. (9/3/10)--More than 35,000 small-dollar loans have been issued by Pennsylvania credit unions through the Credit Union Better Choice program--a payday loan alternative, said the Pennsylvania Credit Union Association (PCUA). Borrowers also placed $1.6 million into savings accounts. The program is a partnership of PCUA and the Pennsylvania Treasury Department. Through the program’s lending alternative product, credit unions offer borrowers a 90-day loan with a $500 dollar limit. The loans have totaled $16.7 million dollars since Credit Union Better Choice launched in 2006. The program has saved borrowers more than $12 million over a traditional payday lending product, PCUA said. Since the program’s inception, 80 credit unions have offered Credit Union Better Choice loans. Participants continue to sign on. During the first six-month of 2010, credit unions issued 6,780 loans totaling $3.4 million dollars. “Credit unions stepped up to the plate and are meeting the small-dollar borrowing needs of Pennsylvanians,” said Jim McCormack, PCUA president/CEO. “Just as important, credit unions also are providing financial counseling to help assist borrowers with managing their money. The continued growth of the Credit Union Better Choice program shows that consumers are still feeling the effects of the down economy and that paychecks do not stretch far enough when unexpected expenses occur.” “Many Pennsylvanians need their dollars to stretch further in these tough times--to help them avoid a costly ‘debt trap,’” said Pennsylvania Treasurer Rob McCord. “Better Choice short-term loans have helped families make it to pay day and help borrowers save millions in predatory fees and usurious interest rates.” A typical $500 payday loan costs consumers $15 for every $100 borrowed for two weeks, or about $450 over 90 days. A $500 Credit Union Better Choice loan costs consumers about $42.50 for the same 90 days, and at the end of the loan term, consumers have $50 in a savings account, which allows them to develop a savings habit, PCUA said. Also, the program builds upon the wealth-building component by providing financial education to consumers so they can make better-informed financial decisions. Pennsylvania consumers saved an average of 80 cents in loan fees and costs for every dollar borrowed through a Credit Union Better Choice loan rather than through a typical loan from a payday lender, translating into more than $12 million saved, PCUA concluded.

CUs see mortgage refinancepurchase boom in July

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MADISON, Wis. (9/3/10)--Recent record-low mortgage interest rates caused a mortgage refinance and purchase boom at credit unions in July, according to a Credit Union National Association (CUNA) economist’s analysis of CUNA’s monthly review of credit unions.
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Credit union loans outstanding decreased about 0.1% during July, compared to a 0.3% increase during June 2010. Fixed-rate mortgages led loan growth, rising 0.8%, followed by unsecured personal loans and credit card loans, which went up 0.7% and 0.6%, respectively. Used-auto loans grew 0.5%, while home equity loans increased 0.1%. Adjustable-rate mortgages and new-auto loans decreased 0.1% and 1.4%, respectively. Credit union loans in July totaled $581.9 billion, compared with $586.2 billion in July 2009. “Credit union loan balances fell again in July,” Steve Rick, CUNA senior economist, told News Now. “That was the seventh monthly decline over the past nine months. Loan balances fell 1% since the start of the year. “However, recent record-low mortgage interest rates have caused a mortgage refinance and purchase boom at credit unions,” he said. “Fixed-rate first-mortgage balances, which was the fastest growing loan product, rose 0.75% in July.”
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Credit union savings balances rose 0.8% in July, compared with a 0.3% decrease during June. Share drafts rose 4.8%, followed by money market accounts (up 0.8%) and regular shares (up 0.4%). One-year certificates and individual retirement accounts decreased 0.3% and 0.5%, respectively. Credit union savings in July totaled $801.5 billion--or $43.2 billion more than the $758.3 billion saved in July 2009. “Credit union savings balances rose $6.2 billion, or 0.8%, in July to break the $800 billion mark,” Rick said. “During the past 12 months, savings balances are up 5.7%, down from 9.8% reported for the comparable period one year earlier. Credit union members are choosing to pay down debt as they accumulate any surplus funds, as well as building up their precautionary savings balances.” Credit unions’ 60-plus-day delinquencies increased slightly to 1.8% during July. “Credit union loan delinquency rates appear to have leveled off over the past three months around 1.75%,” Rick said. “This is off the recent high of 1.85% reported in January. Loan charge-offs and a slightly better labor market are the two main factors bringing down the loan delinquency rate.” Credit unions’ loan-to-savings ratio remained at 73% in July. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 19%. The movement’s overall capital-to-asset ratio remained at 10% in July. The total dollar amount of capital is $92 billion.

CU System briefs (09/02/2010)

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* HARAHAN, La. (9/3/10)--The Louisiana Jump$tart Coalition for Personal Financial Literacy will conduct its 2010 Youth Financial Educators' Summit in Baton Rouge Sept. 27-28, according to the Louisiana Credit Union League (eNews Sept. 1). The event will meet instructional needs of free enterprise, business, math,, economics AP, Jr. ROTC and family/consumer science teachers at the high school level for public, private and parochial schools in the state. The coalition is driven by volunteers from more than 40 organizations committed to financial education of youth and adults. Its partners provide resources, training and curricula that integrate financial education into the school curriculum ... * GROTON, Conn. (9/3/10)--Charter Oak FCU, Groton, Conn., sold the assets of its Charter Oak-The Insurance Professionals to Smith Brothers Insurance. Smith Brothers is a regional insurance company with more than 100 employees (Theday.com Sept. 2). Terms of the deal were not disclosed. Operations will be known as Charter Oak-The Insurance Professionals, offering personal and business insurance. Charter Oak will maintain insurance offices in two of its Groton branches. The new alliance will benefit members because Smith Brothers offers more insurance products and services, Brian Orenstein, Charter Oak CEO, told the newspaper. Charter Oak has $635 million in assets ... * MAPLE GROVE, Minn. (9/3/10)--TopLine FCU staff partnered with North Hennepin Community College to present two financial education sessions to the college’s Job Support Network Group. The first session, “Personal Money Management,” helped attendees better understand how to manage their money with reduced incomes. Topics included how to use credit wisely, how to budget and reduce debt, and how credit scoring works. The $275 million-asset, Maple Grove, Minn.-based credit union also extended a benefit it offers to its members--free confidential financial counseling sessions --to attendees at the session. TopLine human resources staff also participated in a second session that highlighted the factors most considered when hiring, and tips and tactics for finding a job ...

GCUA poll on savings cited in Atlanta newspaper

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ATLANTA (9/3/10)--The Atlanta-Journal Constitution Thursday published a story about savings, based on a poll conducted by the Georgia Credit Union Affiliates (GCUA) that indicated consumers are holding tightly to their wallets. The story featured Allen Nichols, a member of Georgia FCU, Duluth, whose income dropped by 50%. He turned to his retirement savings to pay the bills, sold his lake home, downsized to cars with more affordable payments, stopped eating out and knocked his credit card debt to $2,000 from $20,000. Roughly 53% of those GCUA surveyed were working to increase savings, the newspaper reported. About 50.3% predicted they could survive for three months or fewer if they lost their income, and 20% indicated they had enough savings to last more than one year. Twenty-six percent said they could not sustain through any loss of income. Also, the national savings rate has risen to 6%, the newspaper said. To read the article, use the link.

Magazine features New Jersey league article

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HIGHTSTOWN, N.J. (9/3/10)--New Jersey Business magazine featured an article on how credit unions in New Jersey have stayed viable through tough economic times and dedicated to helping consumers and businesses in the state. The article was written by New Jersey Credit Union League President Paul Gentile in a special 100th anniversary September 2010 issue of the magazine (The Daily Exchange Sept 2). “The 100-year history of credit unions is as diverse as the more than 90 million Americans they serve today,” Gentile wrote in the article, titled “Cooperative Ventures.” He explained the origins of “credit societies” in Germany, which eventually translated to the establishment of credit unions in the U.S. by Edward Filene and Roy Bergengren. Gentile outlined the history of credit unions in America, from their role as safe keepers for funds during the Great Depression to the economic turmoil of 2009, when credit union lending grew while other financial institutions held back. He also explained the establishment of the Credit Union National Association and the New Jersey Credit Union League. New Jersey has more than 200 credit unions with $11 billion in assets, serving more than 1.2 million state consumers, Gentile noted. “Credit unions also are looking to help New Jersey’s public entities earn a better return on their deposits,” he wrote. “Recently, the New Jersey Senate passed legislation that would allow credit unions to accept public deposits. This is a positive development for taxpayers. If credit unions can bring more competition to the municipal deposit market, taxpayers win.” To read the article, use the link.

CUNA closed Monday no News Now

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WASHINGTON and MADISON, Wis. (9/3/10)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association (CUNA) will be closed Monday, in observance of the Labor Day holiday. CUNA's News Now will not post a Monday edition but will resume its regular publication schedule on Tuesday.

N.Y. governor signs law allows insurance co. deposits in CUs

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ALBANY, N.Y. (9/3/10)--Nonlife insurance companies can now invest up to $250,000 in share certificates at New York credit unions. New York Gov. David Paterson signed a law Monday allowing the companies to invest in credit unions. It reverses a ruling of the New York State Insurance Department that prevented insurance companies from investing in credit unions. The legislation was signed into law as Chapter 461. It was sponsored by Senate Insurance Committee Chair Neil Breslin (D-Albany) and Assembly Insurance Committee Joseph Morelle (D-Irondequoit). The law was supported by both chambers unanimously. “The more safe investment options a business has, the more likelihood that it will be able to expand and hire new employees,” Breslin said. The Credit Union Association of New York applauded the measure, noting that consumers will benefit from a more cost-effective marketplace. “The association will continue to work toward the passage of legislation, such as municipal depository choice, which would increase the financial options available to consumers, businesses and local governments,” said William J. Mellin, association president/CEO. “Credit unions have provided security and high-quality banking services for millions of New Yorkers,” Morelle added. “Allowing non-life insurance companies to invest in them strengthens credit unions, their members and policyholders alike.” Thomas White, president of Community Mutual Insurance Company, said his company advocated for the change. “I am able to better diversify Community Mutual’s investment portfolio and maximize return on investment now that my company has the ability to deposit funds in credit unions,” White said.

Policyholders sue corporates bond insurer Ambac

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MADISON, Wis. (9/2/10)--Ambac Financial Group Inc., a bond insurer for mortgage-backed securities (MBS) whose losses have contributed to losses at several corporate credit unions, has been sued by a group of hedge funds trying to block transfers of funds from its bond-insurance unit to the holding company. The funds filed the motion to enjoin Monday in a Circuit Court of Dane County, Madison, Wis. Plaintiffs include King Street Capital, Aurelius Capital Management, Fir Tree, Monarch Alternative Capital and Stonehill Capital Management. The suit claims they own more than $1 billion of residential MBSs and other debt insured by Ambac Assurance Corp. (AAC). They are trying to ensure that Ambac, the holding company, doesn't siphon off money and assets from AAC. AAC holds insurance policies on billions of dollars of bonds held by the corporates, who have recorded impairment charges related to Ambac-insured securities. Several monoline insurers, including Ambac, FGIC, MBIA, and Syncora Guarantee, have experienced problems that resulted in other-than-temporary impairment (OTTI) charges on the bonds. The motion filed seeks to clarify that the funds had a right to sue to stop Ambac Financial from receiving cash dividends and other transfers from Ambac Assurance while policyholders have claims on Ambac-insured securities haven't been paid in full (The Wall Street Journal and Enhanced Online News Aug. 30). The funds also alleged in court papers that about $230 million in past dividend payments from AAC to its parent in 2008 and 2009 were "fraudulent" transfers because they took place at a time when the bond insurer's financial condition was rapidly deteriorating. They are seeking to recover that money for all policyholders. Earlier this year, Wisconsin's Office of the Commissioner of Insurance, which regulates AAC, took over Ambac's insured portfolio of more than $50 billion in toxic mortgage securities and other structured-finance debt. The regulator separated that debt from Ambac's financial guarantees on municipal bonds, most of which are still performing (MarketWatch Aug. 31). At the time, the regulator expected these policyholders to recover a fraction of what they were owed in cash. AAC also was expected to give them interest-bearing surplus notes. Earlier this month, the parent company said in financials filed it was preparing to file for bankruptcy to restructure its outstanding debt.

Shared branching cooperation helped CUs survive Fourth of series

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MADISON, Wis. (9/2/10)--As Hurricane Earl churns in the Atlantic, credit union leagues in Louisiana and Mississippi analyzed another hurricane's impact on the region's credit unions--Hurricane Katrina, which hit the coast Aug. 29, 2005. Two factors played key roles in credit unions' survival: shared branching and credit unions' cooperative nature. When Katrina hit, "the following days were filled with unexpected challenges for Louisiana credit unions and their members," said Anne Cochran, president of the Louisiana Credit Union League (LCUL). "However, the 'people helping people' philosophy in which the movement is based provided the financial and emotional support needed to survive this disaster of epic proportion," she told News Now.
Click to view larger image A typical scene throughout New Orleans, six weeks after Hurricane Katrina struck, was the pile of debris by the roadside, seen from inside of Greater New Orleans FCU's lobby in Metairie, La. (Photo provided by Greater New Orleans FCU)
The league knows first-hand about others' generosity. The building housing its headquarters in Harahan, La., was flooded, and like many in New Orleans, it evacuated to Baton Rouge. "Thanks to Bayou FCU’s generosity, league staff assembled in Baton Rouge at a local branch facility. This became a focal point for local, statewide and national credit union communication," Cochran said. "Because there was a central point for league staff to assemble and work efficiently, the league was able to provide assistance to 120 credit unions by locating resources needed to operate after the hurricane hit. "There was an outpouring of compassion and support from the entire national and international credit union system," she said. "Because of the financial support, credit union employees were able to return to work faster, allowing branches to open faster in order to service their members." Shared branching was also a key factor. "The crisis bolstered the value of shared branching. Several credit unions came on to Shared Branching through the financial support from other credit unions around the country. LCUL was able to connect 21 credit unions to shared branching within 24-to-48 hours." How did that compare with banks in the area undergoing the same challenges? "Compared to banks throughout the state, Louisiana credit unions fared better," she said. "They were open for service faster due to the Shared Branching system already in existence. This was instrumental in getting cash into evacuated members' hands quickly. Credit unions share a unique support system that you don’t see at a bank. Shared branching proved to be the most valuable resource for both credit unions and their members," she said. Since the hurricane, credit union mergers have totaled 17 in Louisiana. "We are still feeling the effects of Hurricane Katrina, but we were able to take away valuable lessons from the event," said Cochran. The league's and Shared Branching corporation's disaster recovery plans have been revamped and are tested annually. Also the league "now provides credit unions with in-depth disaster preparedness resources on our website as well as an annual packet mailed to CEOs. As far as credit unions are concerned, they, too, take a much closer look at their disaster recovery plans. Now, Shared Branching is a vital part of that plan,” she said. In Mississippi, "we didn't lose any credit unions. We've had some mergers but they weren't because of Katrina," Charles Elliott, president of the Mississippi Credit Union Association (MCUA) told News Now. In 2005, "we had 70 credit unions affected, with about 13 credit unions directly affected," he said. Two-thirds of the credit unions in the state went without electricity, many for four or more days. But along the coast the effects were dire. A month after Katrina that more than 125 credit union employees in the state lost their homes completely or had homes that were uninhabitable (News Now Sept. 19, 2005). They were among the more than 171,000 dwellings in the six Gulf Coast counties that were destroyed or damaged. Pascagoula-based Navigator CU lost its main facility, its data processing system and its telephone communications system. That facility has been totally gutted and rebuilt, Elliott said. "All the data processing now has hot sites, and operations are backed up." That is echoed by Keesler FCU, based in Biloxi, Miss. In an article about disaster recovery in Bank Systems & Technology (July 28), Larry Mayo, vice president of information technologies at the $1.9 million asset credit union, said the 17-branch credit union saw one of its branches completely washed away and all branches took on water in some form in Katrina's wake. Luckily the credit union's data center wasn't flooded, he said, but the credit union had no communications. Since then his board has provided funds to build a better disaster recovery plan, he said. The credit union has a redundant data center 350 miles away and set up IBM storage area networks with encrypted replication between the main data center in Biloxi and the new location, as well as a third-level disaster recovery site. If a disaster impacts the credit union's data center, primary systems will be up and running again within half an hour, the article said. During Katrina, some financial institutions based their disaster recovery plan on backup tape restoration. But for many companies almost one-fourth of the tapes were unusable when they arrived at the disaster recovery center. Tapes, said Mayo, aren't the most reliable resource, and as cloud computing evolves, credit unions will have more alternatives. Still, Mayo keeps a backup tape as a last resort. Shared Branching saved the day in Mississippi, too. "Before Katrina, we didn't have any Gulf Coast credit unions participating in Shared Branching. Navigator FCU and Keesler FCU were not members then, but when the hurricane hit, Shared Branching expedited its process for them and got them into the system very quickly," Elliott said. "Now, most of the big credit unions are on CUSC CO-OP, our shared branching system here." "We learned a lot going through the process. Everyone knows the role they will play in the future. We responded to the best of our abilities. Some things worked better than others," Elliott said. "Counseling was a huge issue [for credit union employees]. Credit unions didn't get involved in this until December (2005)." MSCUA provided counseling, and more than 500 credit union employees participated (News Now Jan. 24, 2006). "The system also learned a lot about grants, raising funds under challenging conditions," he said. Summing things up, Elliott said, "we can handle what we went through before--unless it's a 500-year hurricane--a category 6." He, like every other person interviewed for this series expressed appreciation for the movement's cooperative efforts during the crisis. "We owe a world of thanks to everyone that helped us at that time. They truly made a difference. We will remember that forever," Elliott said.

CU System briefs (09/01/2010)

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* SAN ANTONIO (9/2/10)--San Antonio FCU (SACU) has acquired Mountainside Financial (MSF)--the largest broker for manufactured-home lending in the U.S. (San Antonio Business Journal Aug. 31). SACU added Mountainside to its CU Factory Built Lending Division, and the company will be known as Mountainside Financial, a Division of SACU. The division provides loans to homeowners seeking private land on which to place their manufactured homes. With the new acquisition, the $8 billion asset SACU can support retailers and brokers with capital for new- and used-home purchases, refinancing and other needs for the manufactured-home owner ... * BOSTON (9/2/10)--Edward Saunders Jr., former senior vice president and legislative counsel at three New England credit union leagues, died Saturday in Boston at the age of 60. An attorney, he was executive director of the Massachusetts Catholic Conference, a position he held since July 2005. For 16 years, Saunders served as senior vice president and legislative counsel for the Massachusetts, New Hampshire and Rhode Island credit union leagues, and as general counsel and clerk of the Massachusetts Credit Union League (Boston Herald Aug. 32) ...

Despite cashless society ATMs here to stay

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MADISON, Wis. (9/2/10)--Despite predictions of a “cashless society,” credit unions shouldn’t neglect their ATM channels, according to data from Ovum, a New York-based unit of Datamonitor group (paymentssource.com July 20). Although debit and mobile is growing, the overall number of payments is rising as well, and the number of people increasing, said the company. Today, there are more than two million ATMs in service worldwide ( Fox Nebraska Aug. 30). There are roughly 300,000 to 400,000 ATMs in the U.S., Jim Block, Diebold director of advanced development and technology, told News Now. Diebold Inc. is an ATM manufacturer and CUNA Strategic Service provider, based in North Canton, Ohio. Block described the history of ATM growth. As for when ATMs really became accepted in the U.S., the standard often used is how long it took to reach a 50% penetration level to adopt any given technology, Block said. “With ATMs, it took about 16 years, so they really caught on in the mid-to-late 1980s as far as being a well-accepted component in society,” he said. When ATMs first arrived on the scene, they were offline machines run by a mini-computers in each ATM. “So every day, someone had to get the activity of the day off the computer to balance the transactions,” Block said. In the 1970s, ATMs were micro-processing-based. Real change came in the mid-1980s, Block said. “In the 1980s, new functionality came, which allowed the ATMs to print more elaborate statements and read the cards differently because of distributed micro-processing throughout the system--what we called a modular delivery system,” he said. And then functionality took off in early 1990s, when ATMs began scanning and accepting checks, he added. What does the future hold for ATMs? “Functionality will continue to adapt to whatever various societies expect,” Block said. “Cash dispensing will remain constant, but in the future--I’d say within single-digit years--we may call them something besides ATMs. They may dispense gift cards and become more of a convenience self-service device in the future. “They will be configured in various ways that do things beyond what a teller [or ATM] does,” Block concluded.

Lawmakers meet CUs in several states

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MADISON, Wis. (9/2/10)--Lawmakers home during the August recess met in-district with credit unions and leagues in several states to hear credit unions' perspective on issues such as lifting credit unions' member business lending (MBL) cap and overdraft protection.
Click to view larger image Kathy Chartier, board chair of Credit Union League of Connecticut and CEO of Members CU, discusses the business lending cap with U.S. Rep. Jim Himes (D-Conn.) at her credit union in Stamford, Conn. (Photo provided by the Credit Union League of Connecticut)
U.S. Rep. Jim Hines (D-Conn.), a member of the House Financial Services Committee, met Tuesday with Kathy Chartier, board chair of the Credit Union League of Connecticut and CEO of Members CU, Stamford, Conn., to discuss the current status of MBL and other issues moving through Congress. Also attending was league President/CEO Tony Emerson, league Assistant Vice President Nick Moalli, and representatives from nearby credit unions. "We need to see laws in place that allow smaller institutions like credit unions to compete with the larger ones," said Himes. He reiterated his support for raising the MBL cap for credit unions to 27.5% of assets from 12.25% and talked "about his desire to make sure the interchange provisions in the recently ratified financial reform law are enacted as promised," said Emerson.
Click to view larger image U.S. Sen. Kit Bond (R-Mo.), left, talks with Jerry Goldstein of Alliance CU about member business lending during an in-district meeting at the Missouri Credit Union Association's St. Louis office. (Photo provided by the Missouri Credit Union Association)
In Missouri, U.S. Sen. Kit Bond (R-Mo.) gathered information from credit union representatives on Aug. 20 to take back to Capitol Hill, said the Missouri Credit Union Association (MCUA) (The Missouri difference Aug. 26). Twenty attendees from 10 credit unions took part in the meeting at MCUA's St. Louis office. "I voted against the Wall Street Reform bill because it whiffed on Wall Street and punished Main Street," Bond told the group. "We can try to fix [the debit interchange provision] going forward." He asked credit union leaders for facts and statistics about their MBL practices. "Keeping loans within the community is a vital part of operation--no question," he told the group. "To hear that small businesses are willing to go out and try is inspiring." He also addressed an H.R. 3604 provision that limits the amount of time a consumer can use overdraft protection on accounts. Credit unions oppose the bill, and Bond agreed. "Don't force people out of the financial system," he said. "It just sends them to payday lenders and doesn't protect anyone." Missouri credit unions also met with U.S. Rep. Russ Carnahan (D-Mo.) staffer Jim McHugh in St. Louis on Aug. 25 to explain what they are doing to help small businesses and to reinforce the need to lift the MBL cap. Carnahan is "very supportive of helping small business," said McHugh. As for debit interchange, Carnahan is willing to assist with the Federal Reserve's process to help ensure inclusion of fraud costs and that the exemption of financial institutions with $10 billion or less in assets is effective, said McHugh.
U.S. Rep. Betty Sutton (D-Ohio) shared her deep credit union roots during a meeting with Akron, Ohio, crdit union leaders, according to the Ohio Credit Union League's newsletter, eLumination (Aug. 25). She voiced continued support for credit unions. (Photo provided by the Ohio Credit Union League).
In an Aug. 18 meeting with U.S. Rep. Betty Sutton (D-Ohio) at TeleCommunity CU, Akron, Ohio, area credit unions and the Ohio Credit Union League thanked Sutton for her strong support of credit unions on issues ranging from MBL to the federal tax exemption during her two terms, said the league (eLumination Aug. 25). Sutton shared her roots in the credit union movement with the group and voiced willingness to support credit union issues in the future. Credit unions had two meetings in North Carolina with congressmen, according to the North Carolina Credit Union League (The Weekly Update Aug.27). U.S. Rep. Larry Kissell (D-N.C.) visited Charlotte Fire Department CU Aug. 24, and Champion CU's Waynesville branch welcomed U.S. Rep Heath Shuler (D-N.C.) to its branch on Aug. 25. On Aug. 16, more than 30 Michigan credit union leaders from the Upper Peninsula (U.P.) Chapter of Credit Unions met candidates running for the State House, Senate and for Congress. Participants included State Rep. incumbents Judy Nerat and Steve Lindberg; Senate candidates Howard Walker, Mike Lahti and Tom Casperson; House candidates Scott Dianda and Ed McBroom; and congressional candidate Gary McDowell. McDowell communicated his support of credit unions and of federal legislation that would improve their ability to better serve members. Tom Baldini participated on behalf of U.S. Rep. Bart Stupak (D-Mich.), thanking credit unions for their support.

Top 10 INews NowI stories for August

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MADISON, Wis. (9/2/10)--Regulatory reform dominated the list of the top 10 News Now stories for August; however, the month’s No. 1 story dealt with the Federal Open Market Committee’s decision to maintain the target rate for federal funds and reinvest in mortgage-backed securities. That story, which included perspective from Bill Hampel, the Credit Union National Association’s chief economist, said credit unions could draw two conclusions from the Fed’s decision. First, it will be well into next year before the federal funds rate is increased from its current range of 0 to 25 basis points, and second, should the economy show any more signs of weakening in the coming few months, the Fed is very likely to resume its purchases of longer term debt securities, known as “quantitative easing,” which would further lower longer term interest rates, Hampel noted. Here’s the top 10 list for August: 10. NCUA takes action on two CUs in conservatorship ALEXANDRIA, Va. (8/2/10)--The National Credit Union Administration last week was appointed liquidating agent of Fort Collins, Colo.-based Norbel CU, which was then purchased by Security Service FCU. And on Friday, the agency placed Family First FCU, Orem, Utah, into conservatorship. 9. NCUA provides CUs with opt-in guidance ALEXANDRIA, Va. (8/4/10)--National Credit Union Administration Chairman Debbie Matz on Tuesday strongly encouraged credit unions “to notify members of their opportunity to ‘opt in’ to overdraft protection before the Aug. 15 deadline.” 8. CUs at top of heap in new Kellogg Trust Index CHICAGO (8/6/10)--Credit unions are at the top of the heap--again--in the latest consumer poll on trustworthiness. This time 62% of American consumers surveyed said they trust credit unions. 7. CUNA: Dodd-Frank rule burden lighter than some fear WASHINGTON (8/25/10)--While the recently enacted financial regulatory reform package contains numerous changes to current financial laws, the Credit Union National Association’s Senior Vice President/Deputy General Counsel Mary Dunn said that many fewer of them than most fear, perhaps about 35 of the new anticipated regulations, may impact credit unions, with a number of the changes likely to only alter existing regulations. 6. CU attempts to block liquidation order WASHINGTON and ALEXANDRIA, Va. (8/10/10)--A hearing today in a U.S. District Court for the District of Columbia will determine whether a Texas-based virtual credit union that was placed into liquidation last week will get an injunction to prevent the National Credit Union Administration from carrying out the liquidation. 5. Teller shot escaping burglar, injuries minor BATTLE CREEK, Mich. (8/10/10)--An American 1 CU teller was shot in the arm, and another employee was carjacked at gunpoint Saturday by a robber who broke into the building overnight and waited for employees to show up for work. 4. CUNA responds to Durbin comment on CU credit cards WASHINGTON (8/5/10)--Credit Union National Association President/CEO Bill Cheney has urged Sen. Richard Durbin (D-Ill.) to “take a more complete look at the facts regarding how credit unions and banks offer credit cards differently” after Durbin recently criticized credit unions for increasing annual fees on credit card accounts. 3. Fed is reviewing checkhold rules WASHINGTON (8/11/10)--In reviewing the new financial reform law, comprised of more than 2,000 pages of text, Mike McLain has noted that among the big changes are nestled some seemingly small ones of which credit unions should be aware. 2. CUNA rep: GAAP changes would cost CUs thousands WASHINGTON (8/3/10)--Speaking during a recent Credit Union National Association (CUNA) audio conference on proposed changes to the Financial Accounting Standards Board’s Generally Accepted Accounting Principles, Mid Minnesota FCU’s Pam Finch said that the proposed changes could result in up to $40,000 in additional annual costs for her credit union. 1. CUs can draw two conclusions from Fed action, says Hampel WASHINGTON (8/11/10)--Credit unions can draw two conclusions from Tuesday’s action by the Federal Open Market Committee, the Federal Reserve policymakers, said Bill Hampel, Credit Union National Association chief economist, after the Fed announced it would maintain the target rate for federal funds and reinvest in mortgage-backed securities.

CUs in Project 100 to give back

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LIVONIA, Mich. (9/2/10)--For 100 days, 100 people will have the opportunity to “pay it forward” to their communities with $100 bills--for the second time. CO-OP Services CU, Livonia, Mich., recently announced its second consecutive Project 100, launched by the $375-million-asset credit union last year to encourage giving in Southeast Michigan, an area hit hard by economic troubles, according to Project 100’s website. The credit union will give $100 to 100 random people and ask the receivers to use the money to help their communities. Greg Wohler, president of Edge Creative Group, came up with the idea for the project. Edge Creative is the credit union's agency. E & A CU, Port Huron, Mich., also is participating in Project 100. Some recipients used the money last year to help others who were unemployed. Kate S., from Livonia, said she received the money after being out of work for most of the year. “Just days after winning, [I] was laid off from the part-time job that I had for only six weeks,” she said. “Project 100 came at a great time, just before the holidays. As a way to give back to the community, my daughter is going to have a Charity Christmas party that will benefit three or four different charities. I’m very proud of her and hope that I have instilled in my children the importance of giving to others.” Denise F., from Romulus, helped a homeless family after receiving $100. “I had helped a family that my son and his girlfriend had found living in a park,” she said. “They had nowhere to go and no food. We contacted some churches and one of them brought food and clothing. The woman found a circumstance where she could help an elderly gentleman in the area, and her children and she are staying with him now. The [gentleman] went to live at his mother’s. He was not the children’s father, but wouldn’t leave them until they were in a safe place. The family was with me for a weekend. “In this time of economic hardship, there is no doubt that many people could use an extra $100. My own circumstances are very tight,” she added. “To say the least, I am very grateful to have been given the money. It allowed me to repay others who have helped me.” Project 100 also was featured on National Public Radio. Wohler spoke to the station last week. “It’s an amazing feeling to see people and see how they react. And we’ve had people break down in tears,” Wohler told NPR. “We had one woman last summer who told us that day they were going to shut her gas off, and she was going use this money to make sure that it’s not shut off and pay some of the bill.” The Michigan Credit Union League also featured the project in a podcast last year. For more information, use the links.

AVCU Cabot create Vermont Cooperative Summit

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SOUTH BURLINGTON, Vt. (9/2/10)--The Association of Vermont Credit Unions (AVCU), Cabot Creamery and five other state and national cooperatives will conduct a summit meeting of cooperatives in South Burlington on Oct. 14. The Vermont Cooperative Summit 2010, the second statewide gathering of cooperative leaders, has a theme--Building on the Power of Cooperatives. Cooperatives statewide and from the region will hear new ideas, share lessons and learn economies to be leveraged, AVCU said. A gubernatorial debate on cooperatives between Republican Brian Dubie and Democrat Peter Shumlin will be a highlight during the summit. The one-hour debate should draw significant media attention to the cooperatives gathered for the event, AVCU said. Also featured will be:
* Vermont economist Art Woolf, highlighting the history and impact of cooperatives on Vermont; * AVCU lead lobbyist Adam Necrason, providing an overview of the 2010 elections and what they mean for cooperatives; and * Eight breakout sessions, covering topics such as merchant processing for cooperatives, legal issues, marketing, and investments and borrowings for cooperatives.

Texas league announces facilities assistance program

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FARMERS BRANCH, Texas (9/2/10)--The Texas Credit Union League (TCUL) has introduced a Facilities Assistance Program to provide credit unions a forum to discreetly obtain or dispose of a credit union facility. The online confidential service will be offered free to all member credit unions, and will consist of three primary steps (LoneStar Leaguer Sept. 1):
* Credit unions that want to obtain or dispose of a branch or administrative facility can register interest on the TCUL website. Each credit union must execute a “confidentiality agreement,” agreeing to keep all correspondence and exchange of information private, and complete a “confidential facilities fact sheet.” * When properties are offered for sale or lease, TCUL will match the offerings with credit unions registering interest in acquiring facilities in the general vicinity. TCUL will notify credit unions interested in acquiring a property that a facility is available in their area. Credit unions will be provided with basic information about the property for sale or lease. The exact location and the name of the credit union offering the property for sale will not be disclosed. * After a potential buyer notifies TCUL it is interested in obtaining more information, the league will notify the seller and provide contact information for the potential acquirer. After notifying a potential seller, TCUL will disengage from the process, and the seller will contact the potential buyer directly.

New Mexico hosts REAL Solutions conference

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ALBUQUERQUE, N.M. (9/2/10)--New Mexico recently hosted a conference to discuss REAL Solutions, the signature program of the National Credit Union Foundation (NCUF), said the Credit Union Association of New Mexico.
Click to view larger image Americans for Indian Opportunity (AIO) President LaDonna Harris, left, and AIO ambassador Benita BigFoot talk about the cultural, traditional and historical differences that make Native Americans a unique challenge for credit unions that want to provide services to underserved communities. (Photo provided by the Credit Union Association of New Mexico)
Lois Kitsch, national program manager for REAL Solutions, led the conference, which was attended by credit union professionals nationwide. Several representatives of state leagues and associations discussed the development and implementation of their REAL Solutions efforts and the challenges and successes of the program and its mission of serving people of modest means and the underserved. Individual credit unions told the group about their own REAL Solutions programs. The group also participated in “Living In the Shoes of Your Members,” a poverty simulation activity. Each attendee was a member of a low-income “family” and had to pay for rent, travel, food, utilities and unexpected expenses for a “month.” Attendees also heard about the challenges of serving American Indians. They include a cultural disparity about wealth and ownership and modern-day problems, such as payday lenders, which hinder Native American efforts to make the most of their wealth from natural resources and casinos, said LaDonna Harris, president of Americans for Indian Opportunity. However, the Native American community holds unique potential for credit unions to provide products, services and financial literacy, she added.