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Point Loma CU to close San Marcos branch

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SAN DIEGO (10/3/11)--San Diego-based Point Loma CU plans to close a branch located in San Marcos, Calif., next month, because of the sluggish economy. The $451.2 million asset credit union told members the branch is scheduled to close Nov. 2 (North County Times.com Sept. 30). Theodore H. Dennis, CEO of the credit union, told the newspaper the deep recession and slow recovery of the economy have forced the "difficult decision," according to the paper. Members were told earlier this month that the ongoing sluggish economic climate continued to be a challenge for most people, including the credit union.

Hanscom FCU reaches out to military domestic partners

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HANSCOM AFB, Mass. (10/3/11)--Hanscom FCU, based at Hanscom AFB, Mass., is reiterating its support for military and civilian members and their families--including domestic partners--in a newspaper ad campaign created in the wake of the repeal of the Don't Ask, Don't Tell policy in the military. The ad in the Hansconian. a local military base newspaper, reinforces the credit union's long-held policy of membership for significant others and household members, and highlights its status within the military as an affirming organization dedicated to inclusion. Its purpose, said the credit union, is to encourage members who serve in the military to feel comfortable handling their finances at the $912 million asset Hanscom FCU. "With the repeal of Don't Ask, Don't Tell, Hanscom FCU's members can be more open in the workplace about their personal relationships," said Scott Post, senior vice president of strategy and delivery. "In the past, members may have been reluctant to have two names printed on their checks, or take other actions that could reveal the status of their relationship." By reaching out with its message of inclusion, the credit union said it aims to continue growth in its military service area of membership. "Even people who are not directly affected have co-workers, family members and friends who are," Post said. "These are people that they care about. A number of our employees have thanked us for running the ad," he added, noting a staffer saw the ad and told him she felt proud to work at the credit union.

WGE FCU now called Prime Time Financial FCU

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MUNCIE, Ind. (10/3/11)--WGE FCU in Muncie, Ind., is changing its name to PrimeTrust Financial FCU, effective today. The $142 million asset credit union was founded in 1935 by employees of the then-Warner Gear plant in Muncie. The new name follows a decision several months ago by the credit union’s board to change its charter as part of a plan to allow for a wider membership (thestarpress.com Sept. 29). BorgWarner--the successor to Warner Gear, a local transmission builder--ended operations in Muncie in 2009, closing its plant in town. The new name was chosen because market research showed it “connected” with consumers and businesses and communicated PrimeTrust’s attempts to position itself as a “total financial resource,” PrimeTrust officials told the newspaper Thursday.

2011 another year for negative CU loan growth

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MADISON, Wis. (10/3/11)--Although credit union loans slightly increased in August, the trend for the year likely indicates negative loan growth, according to a Credit Union National Association (CUNA) economist’s analysis of August’s monthly sample of credit unions.
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Credit union loans outstanding rose 0.3% during August, compared with a 0.2% increase in July. Adjustable-rate mortgages led loan growth with a 1.4% gain, followed by unsecured personal loans (1.1%) and used-auto loans (0.9%). Credit card loans climbed 0.5%, while home equity loans went up 0.3%. New-auto loans decreased 0.4%, and fixed-rate mortgages declined 1%. Credit union loans totaled $580.9 billion, compared with $582.9 billion in August 2010, said the monthly estimates. "2011 is shaping up to be another year of negative loan growth for credit unions,” Steve Rick, CUNA senior economist, told News Now. “Over the 12 months ending in August, credit union loans balances fell 0.3%. With income, jobs and retail sales growth weak in September, we don’t expect much additional loan growth for the remainder of the year. “We are expecting loan growth to rise 3% in 2012 after three years of basically zero growth and a buildup of pent-up demand,” he added.
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Credit union savings balances decreased 0.5% in August, compared with a 0.2% increase in July. Regular shares grew 2.2%, followed by individual retirement accounts (0.5%). One-year certificates fell 0.2%, and money market accounts and share drafts decreased 2.9% and 4.5%, respectively. Credit union savings in August totaled $827.1 billion--or $32.2 billion more than the $794.9 billion in August 2010. Credit unions’ 60-day-plus delinquency rate remained at 1.6%. “Loan credit quality continues to improve as credit union loan delinquency rates hit 1.55%, down from 1.78% in August 2010,” Rick said. “We believe delinquency rates will continue to improve through 2012, falling below 1.2% by this time next year,” he added. Credit unions’ loan-to-savings ratio remained at 70%. 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%. The total dollar amount of capital is $99 billion.

CU MBL helps orchard owners dream come true

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WENATCHEE VALLEY, Wash. (10/3/11)--Turned down by several banks in pursuit of his dream, Randy Arnold turned to a credit union and then the roots of his new career path literally took hold. Arnold, a railroad worker, wanted to become an orchardist and needed a loan to help buy nine acres of what he termed a “stump ranch” in the Wenatchee Valley of Central Washington state. He was able to buy the land after procuring the $5,000 loan many years ago from King Street Terminal CU (KTSCU), now Express CU (ECU) in Seattle, Wash. His loan request had been turned down by about four banks. Today, he has grown that parcel to 50 acres where he raises Bartlett and D’Anjou pears on his orchard. He has built and owns a house on the land, which he said now is worth about $300,000. The total net worth of his orchard is roughly $1.5 million, he added. “If I hadn’t gotten that loan to begin with, there’s a good chance I wouldn’t have the success I have now,” Arnold told News Now. “I didn’t have enough down payment to buy the land. With the $5,000 I got from the credit union, I was able to purchase the nine acres for $25,000. “They were great to be giving me support when I was young,” he added. “I wanted to be an orchardist and they helped me purchase an orchard. I was turned down by banks because they seldom loan to orchards. I’m still a member of ECU and do my business with them. I just brought them a box of pears yesterday.” Every year, Arnold drops off boxes of pears grown on his orchard for ECU staff as a token of his appreciation. Over the years, Arnold has taken out several more loans from the $10.2 million asset ECU to help him remodel his house and buy a couple of trucks. “KSTCU gave Randy an unsecured signature loan to purchase the property,” Norma Hernandez, Express president/chief operating office officer, told News Now. “That was our first investment in Randy. As years went on, Randy kept us as his primary financial institution because of the risk KSTCU was willing to take on him and his dream. We financed vehicles (secured) and gave him a number of other signature loans (unsecured) throughout the years as needs came up. “He has always come to us first whenever he needed a loan--which by the way, has been a while--because since KSTCU/ECU provided that first opportunity to prove himself all those years ago, Randy has become a successful and stable member of our community and membership,” she added. “And now his shares in ECU provide those exact same opportunities to our newest members who are needing that same ‘take a chance on me and I won’t let you down’ considerations,” Hernandez concluded. The orchard loan is just one example of how credit unions help members’ small businesses--often when banks refuse them loans. Many credit unions offer member business loans (MBL), but some are bumping up against a cap that limits MBLs to 12.25% of assets. The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions’ MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity for credit unions to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

OpSS Council honors five CUs for best practices

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MADISON, Wis. (10/3/11)--Five credit unions were honored with the seventh annual CUNA Operations, Sales and Service (OpSS) Council’s Best Practices Awards, which recognize innovative solutions optimizing credit union performance. The award winners were recognized during the council’s 14th Annual Conference, Sept. 25-28, in San Antonio. Oregon Community CU, Eugene, Ore., with $983 million in assets, won in the Sales and Service Management category for its 360 Training: Excelling in a Sales Culture program, which employs:
* Organization-wide training; * Product-knowledge workshops; and * An incentives program.
With 360 Training, Oregon Community CU increased loan growth by 8.5% and deposit growth by 3.15%, both of which exceeded goals. Travis CU, Vacaville, Calif., with $1.8 billion assets, won in the Sales and Service Management category for creating, cultivating and sustaining a sales-and-service culture. The strategy includes:
* Retail sales managers to ensure service standards accountability; * Development of a formal sales training program; and * Creation of “Travis Intelligence” to analyze sales efforts.
This credit union is expected to exceed its goals in the number of new direct members and increase in wallet share. SouthPoint FCU, Sleepyeye, Minn., with $23 million in assets, also won in the Sales and Service Management category for its Service Points of Excellence Program, which includes bi-weekly coaching sessions and member and staff surveys. In addition to increasing positive feedback from member surveys, the Service Points of Excellence Program helped improve overall cross-sells. WestStar CU, Las Vegas, Nev., with $135 million in assets, won in the Miscellaneous category for hosting two job fairs for its members. The fairs:
* Were held in Las Vegas and Reno, two economically hard hit areas; * Allowed participating employers with open positions only; and * Permitted priority entrance to WestStar CU members.
With 4,300 jobseekers, 23 employers--which were WestStar SEG groups--and more than 1,000 jobs, the fairs helped more than 70 people gain employment and garnered the credit union local and national attention. FedChoice FCU, with $303 million in assets, Lanham, Md., also won in the Miscellaneous category for forming its Member Councils to gain insight on:
* Financial “pain” points; * Preferred communication methods; and * Product and service awareness.
FedChoice held nine meetings over three months. It has implemented suggestions made during the meetings, with additional changes in progress. The OpSS Council Best Practice Awards were created to identify, recognize, and share new approaches and solutions with universal application in the credit union movement.

CU System briefs (09/30/2011)

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* RICHMOND, Va. (10/3/11)--Richmond-based Virginia CU, in partnership with the VCU University College and the Office of Multicultural Student Affairs, sponsored a financial success summit Wednesday for college students and garnered attention on WTVR, the local CBS affiliate. The event included four workshops on managing money and credit on Wednesday. "Unfortunately, many students simply are unaware of how to manage their money and even few mistakes can have lasting consequences. Cultivating a few simple habits can be enormously helpful to a student's long-term financial being," said Cherry Hedges, financial education director at the credit union. View a video of the event to find out more … * SAN DIEGO (10/3/11)--A man dubbed by the Federal Bureau of Investigation as the "well-dressed bandit"--because he wears suits, sports jackets or a leather jacket--is a suspect in robberies of 10 banks and credit unions in San Diego County since May 2010. Three of the banks and credit unions were targeted more than once (The San Diego Union-Tribune Sept. 29). He is suspected of robbing Point Loma CU, San Diego, twice this year, on Feb. 11 and June 17, and Mission FCU, Solana Beach on April 6 and Aug. 2. The latest robbery occurred Chase Bank Friday, which also was robbed on Sept. 7 and Nov. 5 of last year … * DES MOINES, Iowa (10/3/11)--Lesley Hastings, director of new client partnerships for The Members Group (TMG), Des Moines, Iowa, has been elected to the board of directors for the Northwest Card Association. The association provides an educational and networking platform for the bankcard industry, helping financial institutions in the northwest keep up with payments developments, technologies and compliance challenges. Hastings joined TMG in July 2010. She has 16 years' experience in the financial services industry in a variety of payments areas. TMG is a subsidiary of Affiliates Management Co., which is owned by Iowa credit unions and their members ...

Self-Helps Eakes elected to Ford Foundation board

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NEW YORK (10/3/11)--Community development credit union leader Martin Eakes been elected to the Ford Foundation Board of Trustees. Eakes is the founder of the Durham, N.C.-based Self-Help CU, the Center for Community Self-Help, the consumer advocacy Center for Responsible Lending, and most recently, Self-Help FCU, Oakland, Calif. In May, Eakes was named a Ford Foundation Visionary, a new award that recognizes innovators whose work provides economic opportunities for marginalized people worldwide (News Now May 6). The Ford Foundation is an independent, nonprofit grant-making organization that works on the frontlines of social change worldwide to strengthen democratic values, reduce poverty and injustice, promote international cooperation, and advance human achievement. Ford Foundation trustees are elected by the full board and serve six-year terms. Trustees set broad policy relating to grant making, geographic focus, investments, governance and professional standards, and they oversee internal and independent audits.

Catalyst Corporate focuses on long-term solution

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PLANO, Texas (10/3/11)--Catalyst Corporate FCU, formed by the merger of Southwest Bridge Corporate FCU and Georgia Corporate FCU, has a “long-term system solution” with a value proposition that exceeds its capital contribution, according to its top executive. Catalyst opened its doors Sept. 6, with 880 member credit unions and $93 million capital---representing 74% of previous shareholders’ capital. Its board of directors has formed a committee to oversee the search for a permanent CEO. The committee expects to select an executive search firm this week, said Dianne Addington, who was brought in as the corporate’s interim CEO one year ago and will stay on board until a permanent CEO is hired. Addington, who has declined candidacy for the position, anticipates the search will take two to four months. The merger made Southwest Bridge Corporate the first corporate to come out of bridge status--well in advance of the two-year timeframe established by the NCUA last fall, when the corporate was placed under conservatorship (News Now Aug. 31). Since the merger, the Plano, Texas-based corporate has received subscription commitments from four credit unions and 25 additional requests for membership packets. The four credit unions joining Catalyst have assets ranging from $31 million to $2.8 billion and will move all services to Catalyst, said Addington. Catalyst anticipates rolling out two new products by the end of 2011--mobile capture and lockbox processing, Addington said. About 33% of Catalyst’s member credit unions have assets of less than $10 million; half have assets of $10 million to $100 million; and just over 15% have assets of more than $100 million, she said. The credit union has formed “Catalyst Councils” comprising credit union leaders from the eastern, central and western regions of the U.S. The councils will help guide the development of products and services for the corporate.

Paper How to prevent bust-out card fraud

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DES MOINES, Iowa (9/30/11)--Bust-out fraud, a form of first-party fraud also known as "sleeper fraud," is breaking out in a major way, and card-issuing credit unions and other financial institutions must pay closer attention to the risk, according to a white paper from The Members Group (TMG). Bust-out fraud occurs when a card applicant with criminal intent applies for credit using a false, partially false or even legitimate identity, said Karen Postma, senior cards risk manager for TMG and author of "Are Your Cardholders About to Bust Out?" Once approved, the cardholder behaves normally, flying under the radar for as long as a year. During that time, the cardholder receives credit line increases and makes normal transactions and over-the-minimum payments each month. Then suddenly, the bust-out artist defaults, Postma said. The bust-out artist doesn't work alone but may be part of a ring of as many as 20 people, systematically targeting credit unions and community banks. "They know exactly how long it will take and the kind of behavior they will need to exhibit in order to get their credit up to the highest limit possible before striking," she wrote. The typical financial institution (FI) relegates accounts like this to a collection team, which is unsuccessful in recovering the balance due. As a result, the loss is never classified as a fraud, and the con artist moves on to the next financial institution victim. "Community-based FIs are particularly vulnerable to bust-out fraud," wrote Postma. "That's because losses stemming from this and other forms of first-party fraud are typically as much as 40% higher than losses from third-party fraud." She noted that first-party fraud accounts for at least 25% of total U.S. consumer credit charge-offs. Postma examines red-flag warnings and prevention methods, including education, cohesion among departments at the institution on application procedures, and frequent refreshing of credit scores. TMG, a wholly owned subsidiary of the Affiliates Management Co., which is owned by Iowa credit unions and their members, provides card processing and payment solutions to credit unions and financial institutions. To access the entire report, use the link.

CU System brief (09/29/2011)

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* HARRISBURG, Pa. (9/30/11)--Although Pennsylvania experienced near record flooding recently, credit unions there are reporting to the Pennsylvania Credit Union Association (PCUA) they haven't had to activate their business continuity plans (Life is a Highway Sept. 29). PCUA said 75% of credit unions polled in its "Highway Quick Poll" said they did not have to access their business continuity plan this year. Of the 68 credit unions responding, 22.1% said they activated their plan, and 2.9% reported they did not have a business continuity plan but could have used one …

CUNAs IPlan ItI IMoneyMixI blog national award finalists

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MADISON, Wis. (9/30/11)--Plan It and Money Mix Spending Blog--two popular personal finance education resources from the Credit Union National Association (CUNA)--are finalists for the 2011 Eddie and Ozzie Awards, a national competition sponsored by FOLIO: magazine. Eddie Awards are for editorial content, while Ozzie Awards are presented for design. Plan It, CUNA's website for preretirees 40-60, is among three finalists for the Best Consumer Website Eddie award in the "Association/Non-Profit, Frequency six or more times a year, Consumer" category. The other finalists in that category are American Rifleman from the National Rifle Association of America, and VISI from New Media Publishing. MoneyMix "Spending Blog" is among three finalists for "Best Blog" in the "Column or Blog, Best Online Column or Blog, Consumer" category of Eddie Awards. Other finalists in this category include "SELF" in HealthySELF in SELF Magazine and "Joe Posnanski's Curiously Long Posts" in Sports Illustrated. MoneyMix is CUNA's website for young adults, ages 18-30. FOLIO: said it received more than 2,000 entries in this year's competition. The annual award program, which spans all corners of the magazine publishing industry, recognizes the best in editorial and design. Gold, silver and bronze award winners will be presented the awards in New York City on Nov. 1.

CUs focus of special IN.J. BusinessI magazine issue

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HIGHTSTOWN, N.J. (9/30/11)--The strong and steady nature of credit unions, and differences between them and banks, were highlighted in a special feature article in the September issue of New Jersey Business magazine. “New Jerseys’ credit unions have weathered the country’s financial crisis and ensuing recession, exhibiting a small, but steady growth in assets, as well as increased lending that can help boost the state’s economy, industry experts say,” wrote Sharon Sheridan in the article, “Credit Union Crescendo.” Lending at New Jersey credit unions increased 7.6% from December 2007 to September 2010, while it fell 6.5% at the state’s banks, Paul Gentile, president of the New Jersey Credit Union League, said in the article. “Credit union member business lending was up 12.7% in New Jersey last year, double the national average,” Gentile added. “It was up 52% in 2009. The average member business loan at a credit union is $123,455, making them true mom-and-pop small-business loans. This small-business lending can be vital to helping the economic recovery come faster here in New Jersey.” Not only will people benefit from lower loan interest rates and higher dividend interest rates on their savings at credit unions, they also will benefit from credit unions’ overall approach to their members, Andrew Jaeger, president/CEO of Credit Union of New Jersey, Ewing, told the magazine. “A credit union’s No. 1 goal is to serve our members; provide the highest level of value to our members,” Jaeger added. “That means we’ll accept lower levels of profit margin to give back to our members. We will make loans to people that other lenders aren’t able to, for reasons of constraints and having to answer to stockholders.” By staying conservative and not getting involved in the subprime market, Affinity FCU, Basking Ridge, was able to maneuver through the recession, Patrick McDermott, Affinity’s assistant vice president for business solutions, told the magazine. “During the recession, we helped a tremendous amount of members,” McDermott said. “We were in the business of keeping our members in their homes.” Editor’s note: The Credit Union National Association (CUNA) and credit unions are pressing Congress to increase credit unions’ MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said. To read the article, use the link.

WOCCU launches professional fellows program

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MADISON, Wis. (9/30/11)--Education and networking opportunities will be provided through a new program offered by World Council of Credit Unions (WOCCU) to as many as 40 young credit union professionals from the Dominican Republic, Guatemala and the U.S. The Professional Fellows Program, funded in part by a grant from the U.S. State Department’s Bureau of Educational and Cultural Affairs, will allow 10 young professionals each from the Dominican Republic and Guatemala to interact with 20 of their counterparts from Iowa and North Carolina. Through the new 18-month, $386,000 program, participants can pursue ways their credit unions can better serve members. “Our ongoing mission has been to facilitate exchanges between credit unions from various countries,” said Brian Branch, WOCCU president/CEO. “This grant will help us reach farther in fulfilling this mission.” The program is designed to facilitate idea exchanges, promote foreign language skills and cultural diversity, and improve problem-solving skills in credit union development and management on a global basis. Also, participants will focus on finding new ways to attract younger members to credit unions. Fellows will travel to partnering countries, with four visits scheduled between June 2012 and January 2013. Part of the U.S. participants’ experience will include a study of Hispanic cultures to more effectively serve Hispanic members back home. Other participating organizations include the Asociación de Instituciones Rurales de Ahorro y Crédito (AIRAC), which represents rural credit unions in the Dominican Republic, and the Federación Nacional de Cooperativas de Ahorro y Crédito (FENACOAC), Guatemala's national credit union trade association. U.S. participant groups include the Credit Union National Association (CUNA), the North Carolina Credit Union League, the Iowa Credit Union League ( ICUL) and Coopera Consulting--ICUL’s subsidiary focused on serving Hispanic credit union members in the U.S. AIRAC, FENACOAC and CUNA are WOCCU members. The program operates in conjunction with WOCCU’s International Partnerships Program, but the funding allows WOCCU to focus on the needs of younger credit union participants, according to Victor Miguel Corro, vice president of WOCCU’s Worldwide Foundation for Credit Unions who also oversees the partnerships program. “The Professional Fellows Program will enable us to add a new dimension to the educational and networking services we provide to the global credit union movement,” Corro said. “The program also supports our initiative of improving people's lives through credit unions.”

Court dismisses defunct CUs members claims vs. NCUA

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BRIDGEPORT, Conn. (9/30/11)--A U.S. District judge in Connecticut has dismissed claims against the National Credit Union Administration (NCUA) in a $4 million negligence lawsuit brought by five former members of the defunct New London (Conn.) Security FCU. Senior U.S. District Judge Warren W. Eginton, in a decision filed Sept. 14, granted NCUA's motion to dismiss and rendered as moot a motion to consolidate the case with another lawsuit that the five members filed against brokerage firm Wells Fargo Advisors. Other claims against a local accounting firm and former credit union board members are pending. Eginton noted in his opinion that the case had not been filed by the statute of limitations deadline, which would have required the suit to be filed within six months of NCUA's denial of their claims for compensation. In its role as liquidating agent, NCUA paid all New London depositors, including those who filed the lawsuit, the balance in their accounts up to the federal deposit insurance limit at the time, which was $100,000 per account. For those with balances over the limit, NCUA provided a certificate for claim in liquidation for uninsured shares. An attorney for the five members--Melvin Goldblatt and Douglas C. Antupit of New London, Joan Lazerow of Waterford, Mark D. Fletcher of Florida and Gloria Johnston of California--told local media that the group would retain the right to seek damages from others and would likely appeal the dismissal (The Day Sept. 29). NCUA shuttered the $13 million asset credit union in July 2008 after a routine audit discovered $12 million in irregularities. The credit union's long-time investment adviser and former A.G. Edwards brokerage firm branch manager, Edwin F. Rachleff, 82, who allegedly stole investments from 1988 to July 2008, committed suicide when the credit union was closed , said the court documents. Wells Fargo acquired A.G. Edwards and has been named in a separate lawsuit.

Three CUs claim Tech Council Best Practices award

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MADISON, Wis. (9/30/11)--Three credit unions were honored as winners of the 2011 CUNA Technology Council Best Practices Awards at the council’s 16th Annual Conference this week in San Antonio.
Click to view larger image The CUNA Technology Council presented its Best Practices Awards to representatives from three credit unions during the council’s 16th Annual Conference in San Antonio. From left, Cary Tonne, vice president information technology, Affinity Plus FCU, St. Paul, Minn.; Dan McGowan, senior vice president/chief information officer, Pioneer West Virginia FCU, Charleston, W. Va.; and Chris McGee, manager/assistant information technology, Pen Air FCU, Pensacola, Fla. (Photo provided by CUNA)
The CUNA Technology Council award recognizes outstanding approaches to technology challenges with potential for universal application across the credit union movement. The three credit unions recognized are:
* Affinity Plus FCU in St. Paul, Minn., for its creation and implementation of an e-contract workflow process that allows business contracts to be efficiently located, accessed and stored. * Pen Air FCU in Pensacola, Fla., for its business continuity plan and failover site development. * Pioneer West Virginia FCU in Charleston, W. Va., for developing a daily dashboard with key metrics to proactively identify potential business risks and opportunities.
Winners were selected based on strategy, process, application and results, without regard to asset size.

IKiplingersI fin ed article highlights school CU branches

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MADISON, Wis. (9/30/11)--Credit union branches placed in schools to help students increase their level of financial literacy were highlighted in a Sept. 21 article posted on Kiplinger.com. WESTconsin CU, a $727.5 million asset, Menomonie, Wis.-based credit union,leads off the first few paragraphs of the article, “Teaching Savings to Kids in Schools,” by Chris Farrell, a contributing columnist to Kiplinger.com. “Unlike in many schools, its students can stop at a credit union branch housed in a narrow, windowless former storage closet,” he wrote. “The high school branch of the WESTconsin credit union is open for business three days a week from 11:30 a.m. to 1 p.m., and some 100 students have an account there.” The student credit union at Hudson High School in Hudson, Wis., is “a way to promote financial literacy at a young age,” Jim Wookey, WESTconsin vice-president, said in the article. “The branch makes saving real,” Melisa Hansen, the district’s school career counselor, told Kiplinger. Credit unions have hundreds of school-based branches nationwide, and the fact that they are making a comeback is “heartening,” Farrell wrote. There are 250 credit unions with 953 in-school branches nationwide. Those 250 credit unions represent 44 states, according to the Credit Union National Association. To read the article, use the link.

NWCA to SBA roundtable Let CUs lend more

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SEATTLE (9/30/11)--Puget Sound-area credit unions stressed the need to make more make business loans and the burden of overregulation during a recent roundtable sponsored by the Small Business Administration (SBA) and the Northwest Credit Union Association (NWCUA). The event was organized after the Obama administration directed federal agencies to ask business leaders for ideas on job creation (Puget Sound Business Journal Sept. 23). It is one of about 100 similar roundtables to be held nationwide. Credit unions seek to raise the member business lending cap to 27.5% of assets from the current 12.25%, a point stressed during the roundtable. Credit unions could lend as much as $13 billion and create as many as 140,000 jobs nationwide, said Bill Anderson, chairman of the NWCUA, citing data provided by the Credit Union National Association, which also is pressing Congress to raise the cap. During the roundtable, credit unions also cited an increasingly burdensome regulatory environment. At least one NWCUA member has four executives dedicated to compliance, Anderson said. Because credit unions dedicate more to compliance, they have fewer resources to make loans, Anderson said. Calvin Goings, regional administrator of the SBA, which hosted the roundtable, will share the credit union concerns with the White House, Anderson said.

CUNA Tech Council exec committee elections held

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MADISON, Wis. (9/30/11)--The CUNA Technology Council announced its executive committee and officers during the council’s 16th Annual Conference this week in San Antonio. Heather Moshier, executive vice president, information technology, San Diego County CU, San Diego, is the new executive committee chair. Rudy Pereira, senior vice president, operations and technology for Alliant CU in Chicago will step down as chair but will remain on the executive committee. Jeff Johnson, senior vice president, information technology, Baxter CU, Vernon Hills, Ill., is the committee’s new vice-chair. Chad Graves, senior vice president, information technology, Ent FCU, Colorado Springs, Colo., is second vice-chair. During the recent elections incumbents Robert Reh, chief information officer, Nassau Financial FCU in Westbury, N.Y.; Moshier; and John Best, chief technology officer, Wescom CU in Pasadena, Calif., were re-elected. Todd Dauchy, chief information officer, Corning FCU, Corning, N.Y., was elected to his first three-year term, replacing Tom Gessel, senior vice president technology officer, TruWest CU in Scottsdale, Ariz., who did not seek re-election. The Technology Council’s executive committee includes:
* Jennifer Weiss, vice president, information technology, Sandia Laboratory FCU, Albuquerque, N.M.; * Belinda Caillouet, vice president, information technology, Spokane Teachers CU, Spokane, Wash.; * John Drago, vice president, information technology, California and Nevada Credit Union Leagues; and * Butch Leonardson, senior vice president/chief information officer, BECU, Tukwila, Wash.

CU System briefs (09/28/2011)

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* BALTIMORE (9/29/11)--Two Maryland men who pleaded guilty as co-conspirators in a scheme to obtain fraudulent loans from several Maryland credit unions were sentenced Thursday in a U.S. District Court in Baltimore. Christopher Houston, 34, of Edgewood, Md., was sentenced to 33 months in prison plus five years of supervised release for bank fraud conspiracy. He also was ordered to pay more than $126,000 in restitution. Donald Brown, 31, Elkton, received five months in prison and five months of home detention, plus three years of supervised release. Houston is the boyfriend and Brown the brother of the ring's central figure, Latesha Brown, 26, of Edgewood, who was sentenced earlier this month to six years in prison for bank fraud conspiracy and aggravated identity theft. Court documents alleged that the three and others used false, modified, or stolen identities and documents while Latesha Brown was employed at credit unions to allegedly help them obtain loans with no collateral. She was employed at Transit Employees FCU, and allegedly helped obtain fraudulent loans from Harford County Maryland FCU and Municipal Employees FCU and a number of other credit unions. Records indicated she allegedly applied for jobs at 33 credit unions and for membership in 29 credit unions. The incidents occurred from September 2004 through August 2010 and resulted in $234,552 in losses, said a press release from the U.S. Attorney's Office in Baltimore (Dagger Press Sept. 22) … * FARMERS BRANCH, Texas (9/29/11)--University FCU, based in Austin, Texas, has donated $1.7 million to St. Edwards University to renovate its Alumni Gym, according to the Texas Credit Union League (LoneStar Leaguer Sept. 27). St. Edwards will rename the building University FCU Alumni Gym. The $1.4 billion asset credit union has contributed more than $2 million to the university since 1991, and has supported it by providing funds for scholarships, event sponsorships and more. It also provides internships for students interested in careers in business and/or finance and consumer education in personal finance for the university community, said the league … * SAN ANTONIO (9/29/11)--The newly designed website of San Antonio-based, $6.5 billion asset Security Service has been named the 2011 Best Credit Union Website by the Web Marketing Association. The award is based on criteria that included design, ease of use, copywriting, interactivity, use of technology and content. The credit union partnered with Extractable, a San Francisco-based digital user experience design agency, on the project to create a more engaging online experience for users. The credit union reported double-digit percentage gains have already been realized in credit card application and vehicle loan volume since the site was revamped … * MOLINE, Ill. (9/29/11)--Joseph VandeMoortel, 81, died Thursday at his home in Moline, Ill. VandeMoortel was a manager for 15 years at John Deere Foundry CU. He also was a past director of the Illinois Credit Union League, active in the Mississippi Valley Chapter of Credit Unions, chairman of the Illinois Credit Union Board from 1981 to 1983, and was a Credit Union National Association national director from 1979 to 1983 (The Quad City Times Sept. 24) …

Missouri association honors CU award winners

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ST. LOUIS (9/29/11)--The Missouri Credit Union Association (MCUA) honored state-level winners of the Dora Maxwell Social Responsibility Award, Louise Herring Award for Philosophy in Action, and the Desjardins Financial Education Award at its 2011 Annual Convention and Exposition. The convention, held Sept. 20-22 in Branson, Mo., was co-sponsored this year with the Credit Union Association of Oklahoma and brought record numbers of participants, said MCUA (The Missouri difference Sept. 27). First place Dora Maxwell winners were:
* Joplin (Mo.) Metro CU, $20 million-$50 million asset category; * Central Missouri Community CU, Warrensburg, $50 million-$100 million assets; * Gateway Metro FCU, St. Louis, $100 million-$200 million assets; * Mazuma CU, Kansas City, $200 million-$500 million assets; * Vantage CU, Bridgeton, $500 million-$1 billion assets; and * First Community CU, Chesterfield, more than $1 billion assets.
First place Louise Herring Award winners were:
* St. Louis (Mo.) Community CU, $50 million-$250 million assets; * Mazuma CU, $250 million assets-$1 billion assets; and * First Community CU, more than $1 billion assets.
First place Desjardins Financial Education Award winners were:
* Raytown Lee's Summit Community CU, Raytown, youth financial education award, $50 million-$150 million assets; * Electro Savings CU, St. Louis, adult financial education award, $50 million-$150 million assets; * Gateway Metro FCU, youth, $150 million-$500 million; * St. Louis Community CU, adult, $150 million-$500 million; * Vantage CU, youth, more than $500 million; and * Community/America CU, Kansas City, adult, more than $500 million.
State level winners will move to the national competitions, sponsored by the Credit Union National Association.

SBA designates Financial Resources FCU as Preferred Lender

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BRIDGEWATER, N.J. (9/29/11)--The U.S. Small Business Administration (SBA) has designated Financial Resources FCU, Bridgewater, N.J., as a Preferred Lender. Preferred Lender status allows the $398.5 million asset credit union to provide quicker processing and loan approval to small business owners, which in turn allows the businesses to expand. That makes Financial Resources FCU an important partner in helping to create jobs and further economic development in the local economy, said the New Jersey Credit Union League (The Weekly Exchange Sept. 23). Financial Resources is one of five credit unions in New Jersey participating in the SBA lending program, and the only one to have achieved the Preferred Lender status. Nationwide, less than 20% of all approved SBA lenders achieve that designation, the league said. The Preferred Lenders Program (PLP) is part of SBA’s effort to streamline the procedures to provide financial assistance to the small-business community. Under the program, SBA delegates the final credit decision and most servicing and liquidation authority and responsibility to selected PLP lenders. However, SBA continues to check loan eligibility criteria.

CUNA OpSS Council elects exec committee

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MADISON, Wis. (9/29/11)--The new executive committee and officers for the CUNA Operations, Sales & Service (OpSS) Council were announced during the council’s 14th annual conference, which ended Wednesday in San Antonio. Sue Douglas, senior vice president e-delivery and risk management, State Employees’ CU, Raleigh, N.C., will become chair of the executive committee, succeeding Jennifer Lehn, executive vice president, Numerica CU, Spokane Valley, Wash. Steve Langley, vice president, sales/service/training, Travis CU, Vacaville, Calif., will become vice chair. Other elections and appointments:
* Incumbents Douglas and Debbie Baumann, vice president, operations/chief operations officer, Mazuma CU, Kansas City, Mo., were re-elected, and Greg Inman, senior vice president, Neighbors FCU, Baton Rouge, La. was elected to his first three-year term on the committee. * Steve Stryker, chief operations officer, Scott CU, Collinsville, Ill., was appointed to succeed Tina McMinn, vice president/operations, Stanford FCU, Palo Alto, Calif.
The CUNA OpSS Council executive committee also includes:
* Dave Tate, vice president, branch operations, Anheuser-Busch Employees’ CU, St. Louis; * Robb Keith, senior vice president retail services, Members 1st FCU, Mechanicsburg, Pa.; * Becky Davis, vice president, branch operations, Delta Community CU, Atlanta; and * Patsy Gayda, vice president of branches, Spokane Teachers CU, Liberty Lake, Wash.

Tech Council speaker Tech trends can affect CU

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SAN ANTONIO (9/29/11)--The rapid “consumerization” of technology is changing how credit unions conduct business, including how they interact with their members, Rick Roy, CUNA Mutual Group senior vice president and chief information officer told the attendees at the annual CUNA Technology Council Conference in San Antonio.
Rick Roy, CUNA Mutual Group senior vice president and chief information officer, told the annual CUNA Technology Council Conference in San Antonio on Tuesday that the “consumerization” of technology is changing how credit unions do business. (Photo provided by CUNA Mutual Group)
Consumerization of information technology is the increasing influence consumer products or technologies traditionally used by employees for personal use have when they are brought into the corporate environment for business use, Roy explained. He identified social media, mobility, cloud computing and data security/privacy as four key trends credit unions should closely monitor as consumerization evolves. “Social networks are changing how we talk, interact, sell, and build brands. The astounding reach social media has had on marketing and sales can create new opportunities for credit unions to reach new demographics, quickly and effectively,” Roy added. The same can be said with the explosion of mobility. With millions of mobile devices sold worldwide, smartphones and tablets are inescapable and a consumer-driven revolution. “Mobility is a powerful market differentiator for credit unions,” Roy added. Roy also discussed the increased interest and viability of cloud computing in the credit union marketplace. “Today, cloud computing has experienced a major shift from infancy to a real business strategy for many companies. We are hearing more about how insurers are adopting software as a service platforms outside their core systems of policy administration, claims and financials,” Roy said. But he also cautioned that while market forces may push toward this strategy, the insurance industry is still assessing whether it is the best solution. Roy acknowledged the potential drawbacks related to the security, performance and availability of cloud offerings. “Security for non-public, private information remains a huge concern for insurers, as it is a business issue that spans beyond just technology.” Roy also discussed the latest data security and privacy issues. “Data breaches can happen quickly, and they have profound effects on credit unions, including financial ramifications, loss of members, brand damage, regulatory scrutiny, and legal liability,” he said. Many data breaches occur both internally and externally, including theft of personal information by employees or loss of unencrypted equipment containing personal information. These threats change so frequently that it is important to constantly monitor for them. “Breaches occur from both internal and external sources, and many incidents can be easily prevented with changes in one’s internal controls,” Roy said. He provided several key recommendations for each trend:
* For social media, develop an internal and external social media policy that incorporates clear corporate messaging standards for all employees to use. * For mobility strategies, embrace mobile devices’ new levels of productivity for employees, and create a secure, “mobility choice” support model. * When addressing security and privacy, eliminate all non-essential private and credit union data and encrypt the remaining data, including data on mobile devices. * For cloud computing, beware of industry hype, but closely monitor industry progress because options are maturing very quickly; be clear on security and privacy shortcomings.
“Ensure your technology strategy can support your business strategy, and that your people and processes are lined up to help your credit union capitalize on new market opportunities that come your way,” Roy said.

PCUA submits testimony for state hearing on disaster program

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HARRISBURG, Pa. (9/29/11)--The Pennsylvania Credit Union Association (PCUA) submitted testimony about credit union disaster relief efforts for a hearing held Tuesday by state legislative committees on establishing a state disaster assistance program. The state Senate and House Veterans Affairs and Emergency Preparedness Committees held the joint hearing, said PCUA (Life is a Highway Sept. 28). More than 20 states have a dedicated state disaster assistance fund to help fund recovery efforts in the aftermath of natural and manmade disasters that fall below the federal threshold for aid. PCUA submitted written testimony on behalf of credit union efforts to assist victims of Tropical Storm Lee flooding. It noted that in response to Hurricane Irene and Tropical Storm Lee, PCUA joined forces with the National Credit Union Foundation to activate an online disaster relief system, CUAid.coop, to raise money for credit union members, volunteers and employees who suffered losses not covered by insurance or any government assistance. "Credit unions are being commended by elected officials for the quick response of developing a private sector solution for a desperate public need," said PCUA in its newsletter.

CUNA Economic Forecast puts economy in CU perspective

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MADISON, Wis. (9/29/11)--The Credit Union National Association’s (CUNA) Economic and Credit Union 2011-2012 Forecast is less optimistic than previous ones because of weakening manufacturing numbers, a frail labor market, falling equity prices and the turmoil related to the Euro-zone crisis. Also the possibility of a double dip recession has increased.
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CUNA’s forecast also includes a midyear summary of credit union operating results--a U.S. Credit Union Profile. (Use the link to access the report.) How does the forecast impact credit unions? “Credit unions have been making progress, but it has been slow progress,” Paul Ledin, CUNA senior data analyst, told News Now. “As uncertainty in the market remains, loan growth will remain weak and the uncertainty will act a headwind against credit unions’ loan growth. “A recession is not likely to happen, but the fear in the market is what causes problems--all driven by the manufacturing and other economic numbers being down,” he added. “There now is a one-in-three chance of recession, which has gone upward from a one-in-four chance. The fact that the chance increased is causing concern.” A key factor in CUNA’s economic forecast is a higher than normal unemployment rate, which leads to higher delinquency and charge-off rates. That in turn feeds into lower loan demand because more people are unemployed. “People will pull back on spending, which will depress loan growth,” Ledin said. Another factor in the economic forecast is the flattening of the Treasury yield curve in 2012 due to the Federal Reserve’s “operation twist.” As long-term interest rates fall, the cost of funds will remain steady, but the interest income derived from them will decline, Ledin said. “It’s clear the Fed can push down interest rates, but how that translates into loan demand is not as clear at credit unions,” he added. As for the credit union forecast, members are in synchronization with credit unions, Ledin said. “People are behaving like credit unions are,” he explained. “During the past few years, they have built up their rainy-day funds. People are probably going to become more sensitive to short-term interest rates--balancing savings versus consumption. But the uncertainty issue still is there, and it will affect long-term spending for bigger-ticket items. “That’s what credit unions would like to see--growth in long-term spending because that drives loan growth,” he continued. “People don’t borrow for lunch or day trips, but they do borrow for computers and cars.” Is there anything credit unions should do--given CUNA’s Economic and Credit Union Forecast? “As the interest margins come down, for credit unions to thrive they will need to drive volume to maintain their current level of income. They’ll want to grow loans,” Ledin concluded.

Former COO pleads guilty to fraud at defunct St. Paul Croatian CU

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CLEVELAND (9/29/11)--The former chief operating officer of defunct St. Paul Croatian FCU, Eastlake, Ohio, Tuesday pleaded guilty to leading a loan scheme that resulted in what federal officials are calling the largest credit union failure ever. Anthony Raguz, 52, of Mentor, Ohio, pleaded guilty to six counts, including bank fraud, money laundering and bank bribery (US Fed News Sept. 27). Raguz allegedly issued more than 1,000 fraudulent loans totaling more than $70 million to more than 300 account holders at St. Paul from 2000 to April 2010, according to court documents. He accepted more than $1 million worth of bribes, kickbacks and gifts in exchange for the fraudulent loans, they said. He is one of 16 people charged in U.S. District Court for their roles in the credit union collapse. Raguz is scheduled to be sentenced Jan. 4. St. Paul Croatian FCU went into conservatorship and then forced liquidation in April 2010. The failure cost the National Credit Union Share Insurance Fund $170 million. Raguz allegedly originated hundreds of loans to account holders with little or no assets, income or employment history and oversaw “loan resets” in which older loans were fraudulently repaid with new loans under false names, said court documents cited by the U.S. Attorney’s Office for the Northern District of Ohio. The money laundering counts stem from Raguz allegedly issuing checks totaling $371,800 drawn on his St. Paul account payable to The Vanguard Group, according to court documents.

Missouri Corporate refunds excess cap commitments to CUs

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ST. LOUIS (9/29/11)--Missouri Corporate CU (MCCU) will refund $2.6 million in excess capital commitments to its members, the corporate announced Wednesday. The capital commitments resulted from the corporate's recent re-capitalization effort, which aimed to raise a minimum of $17.5 million. Member credit unions actually pledged more than $22.6 million. In a meeting Thursday, the corporate's board of directors voted to top the capital commitments at $20 million and return roughly $2.6 million in escrow to current members. "The support of our members was overwhelming and well beyond our expectations," said Dennis DeGroodt, president/CEO of MCCU. "It is unusual, especially for a corporate credit union, to return excess capital commitments, but that's exactly what we are doing. Right now, our members need the funds more than we do," he added. The amounts refunded ranged from $182 to $92,300. Even with the refunds, MCCU remains adequately capitalized with a Leverage Ratio of 5.5%, a Tier-1 Risk Based Capital ratio of 114.3% and a Total Risk Based Capital Ratio of 151.9%, as of Tuesday, the announcement said. DeGroodt said the corporate, which serves 124 natural person credit unions, would welcome new members. "We're not a large corporate, and our focus is not on scale," said DeGroodt. "Our focus is on providing a high level of personal service, backed by a full range of products that are designed to simplify our members' interaction with us. Our goal is to become 'invisible' to credit union employees and free their time to concentrate on their own members."

N.J. league recognizes 2011 award winners

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HIGHTSTOWN, N.J. (9/29/11)--The New Jersey Credit Union League (NJCUL) recognized its 2011 award winners during its 77th Annual Meeting and Convention. Those recognized include:
* CEO of the Year: Milt Hershberger, ABCO FCU, Willingboro; * Credit Union of the Year: XCEL FCU, Bloomfield; * Volunteer of the Year: St. James A.M.E. FCU, Newark, and Calvin Jackson, NJCUL board member * The Difference Maker of the Year: Jeannie Straub, who provides administrative support to executive management at Jersey Shore FCU, Northfield; * Miller/Kosobucki Marketing Award: West Orange (N.J.) Municipal FCU (less than $10 million category)and Jersey Shore FCU (more than $25 million category); * The Dora Maxwell Social Responsibility Award ($100 million to $200 million category): Jersey Shore FCU; * The Louise Herring Philosophy in Action Award: Jersey Shore FCU ($50 million to $250 million category) and Credit Union of New Jersey, Ewing ($250 million to $1 billion category); and * The Desjardins Youth Financial Education Award: Raritan Bay FCU, Sayreville ($50 million to $150 million category).
A special Lifetime Achievement Award was given to Jersey Shore FCU CEO Virginia Williams for her years of dedicated service to the credit union industry.

Ohio CU friends fare well in redistricting

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DUBLIN, Ohio (9/28/11)--U.S. legislators in Ohio who support credit unions or are deemed credit union friendly fared well in the state's new, consolidated 16 congressional districts, said the Ohio Credit Union League. The redistricting measures in the state were announced earlier this month, the league said (eLumination Newsletter Sept. 21). Although all remaining districts encountered some tinkering, long-time credit union champions U.S. Reps. Marcy Kaptur (D) , Steve LaTourette (R) and Tim Ryan (D) should be unaffected, said John Florian, league vice president of government affairs. U.S. Rep. Marcia Fudge (D), another credit union advocate, should retain the revised district, said the league. However, the redistricting means that two strong supporters of credit unions--U.S. Reps. Jim Renacci (R) and Betty Sutton (D)--will be pitted against one another in one of the heavily modified districts. Sutton has long supported expansion of member business lending authority and credit unions' tax status, while Renacci was a strong voice on the House Committee on Financial Services for delaying the interchange amendment to the Dodd-Frank Act, the league said. Other credit union friends--U.S. Reps. Steve Chabot and Steve Stivers, both Republicans--appear safe in their districts. "Overall, credit unions came out well in the process," said Florian. The new districts were recently signed into law by Ohio Gov. John Kasich, Florian told News Now.

SECU commits 1M for hospice house

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RALEIGH, N.C. (9/28/11)--SECU Foundation, funded by Raleigh, N.C.-based State Employees’ CU (SECU) members, has committed $1 million to the Crystal Coast Hospice House (CCHH) campaign to build the first inpatient hospice facility in the Crystal Coast area. This is the largest gift to date for the CCHH Campaign. The 10-bed Hospice House, which will be located in Newport, N.C., will serve five counties. “A gift of this magnitude demonstrates the notable need our community has for the inpatient hospice facility,” said Sarah Strange, president of the Crystal Coast Hospice House. “Hospice houses have become a standard of care that is available to most residents in North Carolina and around the country,” said Dale Britt, Capital Campaign Co-Chair of CCHH. “This gift takes us so much closer to opening the doors of the new SECU Crystal Coast Hospice House.”

IBankrateI Decline in free checking at big banks

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MADISON, Wis. (9/28/11)--Free checking at big banks is on the way out in 2011, while the banking industry increased fees, charges and penalties for account overdrafts, said the Bankrate 2011 Checking Account Survey. This could create opportunities for credit unions to bolster their membership through free checking and fewer or lower fees. The survey found that only 45% of noninterest checking accounts now are free--down from the zenith of 76% two years ago (Bankrate.com Sept. 27). However, if customers meet certain conditions, such as signing up for direct deposit, banks still will offer free checking, Bankrate said. In this year’s study, records were set in two categories. For the 13th consecutive year, fees for non-sufficient funds--or overdrafts--reached a new high at the nation’s largest banks. Also, ATM fees climbed to their highest level for the seventh consecutive year. To obtain its data, Bankrate.com surveyed the five biggest U.S. banks and five largest thrifts in the 25 largest US. markets during the period of Aug 1-12. It considered one interest and one noninterest account at 247 institutions offering checking accounts. The survey joined several others that recently have indicated large banks are eliminating free checking since the Federal Reserve announced its rules capping interchange fees. For more information on the survey, use the link.

Express CU gives second chance to business member

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SEATTLE, Wash. (9/28/11)--Elizabeth Morris provides an example of both the credit union people-helping-people philosophy and the potential of how member business lending (MBL) can help the economy. A designer of upscale designer women’s jackets, Morris needed the support of a financial institution to market her line. She also needed “second chance financial services,” as she describes it, after experiencing some personal financial difficulties. “I was in design for years, and I was trying to market myself, but I needed some help,” she told News Now. Washington Community Alliance for Self Help, an organization that empowers aspiring entrepreneurs with limited resources, put Morris in contact with Express CU, which has $10 million in assets in Seattle, Wash. At Express CU, Morris was able to open both a personal and business draft/checking and share/savings account, which allowed her to keep her personal and business finances separate. Morris also needed to process debit and credit cards in her business. ECU does not provide merchant services, but the business checking allowed her to use a bank’s plastic card merchant service processing program for her business. The funds she collected were deposited into her ECU business draft/checking account. The bank refused to deposit plastic card processing into anything but a checking account, which she had at the credit union. No other financial institution would provide Morris with a checking account because of her previous financial difficulties. The credit union checking account was vital to the success of her business, she said. “They gave me a chance when no one else would,” she said of Express CU. “It wasn’t just about money. It was about re-establishing myself as a business person.” Morris initially sold her jackets mainly through word of mouth and put together the jackets in her spare time. With a series of microloans from Express she has contracted out labor for her jackets and displayed her work at regional and national shows. She even sent a jacket to First Lady Michelle Obama and received a thank you letter from the White House. Morris’ goal is to start wholesaling her jackets. She also wants to sell her line in high profile national retailers such as Nordstrom, Saks Fifth Avenue and Dillard’s. Express CU President/Chief Operating Officer Norma Hernandez said she views members such as Morris as partners with the credit union. “When Elizabeth, and so many of our members like her, who have put a lot of work into putting their lives back together or starting their lives over, take time to come here, look us in the eye say, ‘This is what I’ve done,’ we want to give them an opportunity to keep moving forward,” Hernandez said. “They need the support a partner can provide. We want to be that partner.” The Credit Union National Association (CUNA) and credit unions are pressing Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

iUSA Todayi Fee gap between banks CUs could widen

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MADISON, Wis. (9/28/11)--The gap between the historically low rates credit unions offer their members and the higher rates big banks charge their customers could become even wider as a result of the new debit interchange fee cap regulations, according to a Tuesday USA Today article. The Federal Reserve’s final rule set a cap of 21 cents for debit card fees, and allows an additional five basis points of the value of the transaction to cover fraud losses. But the law mandating reduction in debit card fees exempts credit unions and banks with assets of less than $10 billion. The USA Today article, “Your Money: Act to avoid bank services fees,” advises consumers to consider credit unions and small banks as an option for free checking. The article, written by personal finance columnist Sandra Block, cites a survey conducted in the spring by the U.S. Public Research Interest Group, which found that consumers could find deals at regional banks and credit unions. “Similarly, a Bankrate survey found that three-quarters of credit unions offered free checking, and 96% offered it for account holders who had direct deposit or agreed to receive electronic bank statements,” Block wrote. Only 45% of non-interest checking accounts are free, down from 65% in 2010 and 76% two years ago, according to the Bankrate.com survey. The average monthly fee for a non-interest checking account is $4.37, an increase from $2.49 last year. The average fee for an interest-bearing checking account is $14.15, up from $13.04, according to the survey. To read the article, use the link.

CU System briefs (09/27/2011)

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* BRUNSWICK, Maine (9/28/11)--A woman who at one time was named outstanding employee of the year at Atlantic Regional FCU, Brunswick, Maine, pleaded guilty Friday to stealing more than $500,000 from the credit union over six years. Marsha Richard, 42, a former employee for 23 years at the credit union, faces a maximum possible sentence of 30 years in prison and a $1 million fine. From the late 1990s to October 2010, Richard tracked checks deposited by members and returned for nonsufficient funds. In November 2004, Richard allegedly took funds for return items collected from members' accounts and credited her own account or the accounts of family members or friends, then used the money for living expenses. No members lost any funds in the scheme. A presentence hearing is scheduled for Jan. 3, with sentencing set for Jan. 23 in U.S. District Court in Brunswick (The Times Record Sept. 26) … * HARRISBURG, Pa. (9/28/11)--Francis R. "Fran" Muto, who retired in June as president/CEO of People First FCU, Allentown, Pa., has died, the Pennsylvania Credit Union Association has learned (Life is a Highway Sept. 27). Muto was president/CEO of the credit union for 36 years, since 1974. He served on the association board from 2003 to 2008 and was the recipient of the 2011 William W. Pratt Award for the Outstanding Professional of the Year. Under his leadership, the credit union grew from a single-sponsor organization with assets of $4 million to a full-service, community-chartered institution with more than $375 million in assets, said the credit union's website. Funeral arrangements had not been finalized yet Tuesday …

Garden Savings FCU airs latest humorous commercial

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PARSIPPANY, N.J. (9/28/11)--The latest installment of Garden Savings FCU's string of humorous commercials and videos depicting the differences between banks and credit unions has been released. The Parsippany, N.J.-based, $205 million asset credit union said the latest installment, the "pool fishing" spot, brings back recurring characters from previous ads but adds a twist, according to the New Jersey Credit Union League (NJCUL) (The Daily Exchange Sept. 27). "The premise is pretty much the same," Michael Powers, the credit union's chief sales officer, told the league. "We're admittedly taking a little bit of an off-beat approach with the hope that people will watch through to the end of the spot, which of course highlights the primary point of the commercial, and that is 'when it comes to banking, a credit union is just plain BETTER.'" "That's essentially the credit union message in a nutshell," said Garden Savings FCU President/CEO Lou Vetere, "and it's right in line with the strong 'Banking You Can Trust' message that the NJCUL puts forth." The commercial is airing on cable systems in Morris County and Newark on several channels through the end of October. It has a similarly paired radio commercial airing on WDHA-FM during the same period. The commercial is also posted on the credit union's Facebook page and on its YouTube channel. To view the video, use the link.

St. Vrain Valley members OK merger with Elevations CU

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BOULDER, Colo. (9/28/11)--In a special membership meeting Monday, members of St. Vrain Valley CU, Boulder, Colo., gave their stamp of approval to merge with Elevations CU, also based in Boulder. The announcement of the majority yes vote gives the final go-ahead to consummate the merger, which will be effective Saturday. "It was an exciting day for our board, our management and in particular our staff," said Eva Gaudio, St. Vrain president/CEO. Full integration of the two credit unions' systems likely will take several months, said the credit unions. Once the merger is complete, St. Vrain members will be able to use all Elevations branches across the Front Range of Colorado and services on the same platform. All member deposits will continue to be federally insured up to $250,000. Gerry Agnes, Elevations president/CEO said, "We feel honored to have earned their trust to bring St. Vrain into the Elevations family, and we will make sure our new Longmont constituency enjoys the highest quality of service and product offerings that everyone has come to expect from our organization." St. Vrain Valley CU will become part of Elevations CU, overseen by the Elevations board of directors and Agnes. Gaudio will join Elevations' executive team as senior vice president of government and student affairs. All St. Vrain employees will become Elevations employees.

CU System briefs (09/26/2011)

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* AUGUSTA, Ga. (9/27/11)--An investigation is continuing into what caused a fire early Friday morning that destroyed the main office of Augusta (Ga.) VAH FCU (WJBF.com Sept. 23). The Augusta Fire Department said that it doesn't suspect foul play or arson at this time. The fire broke out at about 5 a.m., and a burglar alarm went off just before the fire broke out, said local media. The credit union said a security guard was on site through the weekend protecting the vault and the safety deposit boxes, which were not damaged. No one was injured in the fire … * BIRMINGHAM, Ala. (9/27/11)--Michael John Young, 42, former president of Birmingham, Ala.-based Alabama Central CU, was sentenced Thursday to 17 months in prison for allegedly submitting $140,000 in bills from two fictitious companies that were paid by the credit union for services not provided. Young pleaded guilty to the bank fraud charge in June. U.S. District Judge L. Scott Coogler also ordered Young to pay $140,000 in restitution. The bills were submitted between April 2009 and June 2010 (Birmingham Business Journal Online and Associated Press via Bloomberg Businessweek Sept. 23) … * RICHMOND, Va. (9/27/11)--Debra R. Morris, 60, former manager of the St. Paul's Baptist FCU in Richmond, Va., has been charged with embezzling $40,000 from the credit union. She was arrested Thursday and charged with two counts of embezzlement after an audit turned up suspicious financial actions between June 2, 2008, and April 2010. The credit union, which was run by volunteers and served a church congregation, merged with Richmond-based, $120 million asset Henrico FCU earlier this month. Until the merger, St. Paul's had 684 members with $326,338 in assets, according to the National Credit Union Administration (Richmond Times-Dispatch Sept. 24) …

California regulator CUs 2Q net worth ratio increased

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SACRAMENTO, Calif. (9/27/11)--Second quarter 2011 net income was up for California's state-chartered credit unions, reported the California Department of Financial Institutions in its summary statistics for the quarter. Net income for credit unions in the state rose 135.4%, while net worth increased 7.1%. Net income rose to $301.3 million from $128 million for the first half of 2010. Net worth rose to $7.1 billion on June 30 from $6.6 billion a year ago, bringing the net worth-to-asset ratio to 9.75% from last year's 9.09%. Assets for state-chartered credit unions in California remained steady at $72.4 billion, with shares at $62.1 billion, each down a fraction of a percent from a year ago. Loans dropped 7.8% --to $41.1 billion from $44.6 billion, said the regulator. Allowance for loan losses totaled $1.2 billion, down 11% from $1.4 billion last year. Delinquent loans were down 22.8% to $901.5 million from 2010's $1.2 billion. Delinquent loans as a percentage of total loans were 2.19%, compared with 2.62% for first half 2010. Other real estate owned rose $34.6 million or 30.7% to $147.3 million from last year. Net margin to average assets for second quarter was 4.22%, down from 4.41% the previous year, while provision for loan losses dropped 50% to $215 million from $429.8 million for the period. As of June 30, the number of state-chartered credit unions shrank to 159 from 167--a 4.8% decrease. State chartered banks dropped by 6.1% to 186 from a year ago.

Govt charges gambling site tied to CU with money laundering

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WASHINGTON (9/27/11)--The Department of Justice has charged the owners and executives of an online gambling site, which deposited funds into a now-defunct Arizona-based credit union, with paying themselves $444 million since 2007 while defrauding players in what the government alleges was a massive Ponzi scheme. The department filed an amended complaint Sept. 20, according to The Wall Street Journal (Sept. 26). It had filed civil allegations against the site, Full Tilt Poker, as well as other online poker sites and executives at relatedl companies in April, accusing them of money laundering, bank fraud, and illegal gambling. Full Tilt alleges the government crippled its ability to collect money from players in the U.S. because the government maintained online gambling is illegal. However, the government alleges the site allowed players to bet with funds it never collected, creating $130 million in phantom funds, and then used other players' money to pay both players cashing out and the site's owners (The Journal and Forbes Aug. 30). The government closed the site in April and the company could not pay $300 million the Justice Department said it owed players. The situation that "tipped the balance" involved Vensure FCU, a small credit union in Mesa, Ariz., which allegedly deposited poker-related funds and was placed into conservatorship by federal regulators in April, said the Journal. NCUA placed the credit union into conservatorship on April 15 (News Now April 15). When it finally shuttered the credit union in July, NCUA said the 140 member, $8.1 million asset credit union was insolvent and had failed to properly diversify its business (News Now July 13). The agency had recommended the credit union build a loan program but found it relied on income from processing online gambling transactions to survive. The credit union challenged the conservatorship, but in late June a U.S. District Court rejected its challenge. In its complaint, the credit union admitted it had taken part in poker-related fund transactions, which increased its asset size but did not permanently intent to depend on those revenues. In 2006, the U.S. made it illegal to process funds related to online gambling. Poker sites started using companies to act as middlemen but the companies were closed off by the government, said the Journal. The sites allegedly turned to 16 small banks and credit institutions to process their transactions. Regulations allow a bank or credit union to process transactions if it can get a reasoned legal opinion that the transactions are legal, said the Journal.

Visa MC expected to raise small-purchase fees

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NEW YORK (9/27/11)--Visa Inc. and MasterCard Inc. plan to increase the fees merchants pay for small-ticket debit purchases to the full amount allowed under the Federal Reserve's new rules that take effect Oct. 1, said analysts interviewed by Bloomberg News and The Wall Street Journal (Sept. 23) . The move could discourage some merchants from accepting debit cards for small transactions. The world's largest payments networks may increase fees from eight cents for a $2 purchase to 23 cents, Thomas McCrohan, analyst at Janney Montgomery Scott LLC, told the publications. The move could result in a backlash from "mom and pop" merchants such as coffee shops, which process a lot of $3 transactions, said Bloomberg News. A second analyst, John Kraft with D.A. Davidson & Co. said Visa plans to increase its rate for some small ticket transactions to an amount equal to the Federal Reserve's cap. Although Visa and MasterCard have not officially announced these specific increases, they have indicated they would change interchange fees on debit cards in response to the Federal Reserve's rules finalized in June and mandated by the Dodd-Frank Act. The rules limit the fees merchants pay for a consumer's debit card transaction to 24 cents per transaction. The cap applies to banks with assets of $10 billion or more. Both Visa and MasterCard met in August with the Credit Union National Association on debit card interchange fee issues concerning credit unions and indicated then they would implement a two-tiered debit interchange fee structure (News Now Aug. 24). MasterCard told the Journal Thursday that it recently informed banks it will implement a "two-tiered interchange structure" for debit and prepaid cards for issuers affected by the cap and those that are exempt. And a Visa spokesman said the company had notified clients of some rate changes. Atlanta-based payments processor First Data Corp. sent clients a notice earlier this month saying that Visa will increases prices for small-ticket debit transactions subject to the new rate caps to a price that would equal 0.05% of the transaction amount, plus 21 cents and a one-cent adjustment for fraud costs. The Journal noted that any increase for small ticket transaction fees would not likely affect all merchants equally because fees vary depending on the type of retailer and volume of card purchases.

Kansas CU Association relocates Wichita headquarters

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WICHITA, Kan. (9/27/11)--The Wichita office of the Kansas Credit Union Association (KCUA) has relocated a few miles northwest of its old location. The new address is: 2872 North Ridge Road

Suite 122

Wichita, KS 67205

The phone and fax numbers remain the same: Toll free: 800-362-2076

In Wichita: 316-942-7965

Fax: 316-206-2203

KCUA also can be found online. Use the link. The Wichita office houses KCUA’s education and training; marketing and communications departments; consulting services; and for-profit entity, Shared Financial Solutions (SFS). SFS provides services to credit unions throughout Kansas and Nebraska. KCUA has a satellite office in Topeka, which provides governmental and regulatory advocacy and compliance services. The association serves 93 credit unions in Kansas.

Indiana foundation director joins NCUF Board

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MADISON, Wis. (9/27/11)--Joe Guilfoy, executive director of the Indiana Credit Union Foundation and vice president of consulting & education at the Indiana Credit Union League, has joined the board of directors of the National Credit Union Foundation (NCUF). Guilfoy was elected at NCUF’s board meeting last week in Washington, D.C., and is the new state credit union foundation (SCUF) network representative on the board. The board seat was most recently held by Danielle Brown, former senior vice president of operations at the Northwest Credit Union Association. Guilfoy noted that the partnership between the NCUF and the SCUF network delivers programs “that assist individuals of all ages to improve their financial literacy and situation. Credit union foundations are an important way that the ‘people-helping-people’ philosophy of credit unions can be demonstrated to a broader audience of consumers.” The 13 voting seats on the NCUF Board include representatives of natural person credit unions, national organizations serving credit unions, corporate credit unions, state credit union foundations, state leagues and an at-large position. To see a complete list of the NCUF board, use the link.

Iowa CU reps honored at Iowa CU Convention

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DES MOINES, Iowa (9/27/11)--The Iowa Credit Union League (ICUL) honored three credit union representatives at the Iowa Credit Union Convention in Des Moines, Sept. 14-16.
Click to view larger image The Iowa Credit Union League awarded Larry Nuss the 2011 Heritage Award for lifetime achievement within the credit union industry. From left are: Joe Hearn, league board chairman; Nuss, retired CEO, Cedar Falls (Iowa) Community CU; and Pat Jury, president/CEO, Iowa league. (Photo provided by the Iowa Credit Union League)
Larry Nuss received the 2011 Heritage Award for lifetime achievement within the credit union industry. Nuss has been active within the credit union movement for more than 50 years. His past credit union involvement includes serving as Cedar Falls (Iowa) Community CU’s CEO for more than 32 years, as chairman of the league, and as vice president and president of the Black Hawk Chapter of Iowa credit unions, among others. Tom Kuehl was presented with the 2011 Professional Cooperative Spirit Award in recognition of outstanding service, commitment and leadership in the credit union movement. Kuehl has been in the credit union industry for more than 30 years and as a leader, change agent and advocate for the movement. Most recently, Kuehl served as CEO for The Members Group, and prior to that, as CEO of Iowa Corporate Central CU, Des Moines. Financial Plus CU Board Member Steve Williams received the 2011 Volunteer Cooperative Spirit award for his volunteer accomplishments in the credit union industry. A few of Williams’ involvements include serving as a board member; treasurer; member of the audit and credit committees; and chairperson of Financial Plus CU, Des Moines. During his 35 years of service, Williams has seen the credit union grow and develop along with the credit union movement.

Calif. league to recognize CU leaders

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ONTARIO, Calif. (9/27/11)--Five credit union leaders and volunteers--including Robert Rose, 2011 Leo H. Shapiro Lifetime Achievement Award recipient and retired CEO of CO-OP Financial Services--will be honored at this year’s California and Nevada Credit Union Leagues’ Annual Meeting and Convention. The honorees of the Shapiro, Distinguished Service, Outstanding Volunteer and Tomorrow’s Star Awards are among those to be recognized during the event, Oct. 26-28 in San Diego. The Shapiro award is the California league’s highest honor, recognizing excellence in credit union philosophy and a lifetime of contributions to the California credit union movement. It is named after the father of the California credit union movement and founder of the league. Rose will receive the award Oct. 26. During his more than 36-year career, he served credit unions at every level of the credit union system. He was an assistant manager of one credit union and manager of another, senior vice president at the league and CEO of Water and Power CU, and interim president of Financial Services Center Cooperatives. In 1990, Rose became CEO of the then-CO-OP Network, then the 49th largest electronic funds transfer network in the country. Today, the Rancho Cucamonga, Calif.-based CO-OP Financial Services is the fifth-largest EFT network. Other award recipients this year include:
* Lynn Athens, CEO, Spectrum FCU, San Francisco--Distinguished Service Award; * Gerald Upson, board member, Patelco CU, Pleasanton, Calif.--Outstanding Volunteer Award; and * Paris Chevalier, vice president of marketing and communications, Xceed Financial CU, El Segundo, Calif.; and Maricela Jauregui, branch manager Mid-Cities CU, Compton, Calif.--Tomorrow’s Star Awards.
Athens, Upson, Chevalier and Jauregui will receive their awards Oct. 28.

Alloya Corporate announces approval of its charter application

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WARRENVILLE, Ill. (9/26/11)--The National Credit Union Administration (NCUA) Board Thursday voted unanimously to approve the charter application of Alloya Corporate FCU and its application for merger with Members United Bridge Corporate, Alloya said in a Sept. 22 member letter posted on its website. “Today the NCUA board voted unanimously to approve the charter application for Alloya Corporate FCU, as well as its application for merger with Members United Bridge Corporate,” the letter said. “Our dream of creating a new corporate credit union to continue to provide members with the valuable services needed for success is nearly complete, with an expected first day of operation of Oct. 24, 2011.” Alloya extended the time period of its initial capital offering until Oct. 31. All credit unions (including current members) that capitalize by that date will receive the full benefits as described in the Private Placement Memorandum as if they had capitalized by Aug. 31. Alloya Corporate FCU exceeded the minimum capital subscriptions required to move forward on its charter plans. The corporate was required to generate a minimum of $70 million in contributed capital by the end of the business day Aug. 31. As of Aug. 30, it had raised $71 million (News Now Sept. 1.) Alloya’s first two board meetings will be held on Thursday and on Oct. 27 in Warrenville, Ill., and Albany, N.Y., respectively. The meetings will be organizational in nature, and will include among other topics the election of board officers, acceptance of the charter, adoption of bylaws, the appointment of corporate officers, establishing the date of the annual meeting and the election by the membership of the permanent board. Members United Bridge is the bridge corporate entity that assumed the existing business of the Warrenville, Ill.-based Members United Corporate FCU after it was placed into conservatorship by NCUA, which formed the bridge corporate in early October 2010 (News Now Sept. 1).

Pelican State CU opens hospital branch

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BATON ROGUE, La. (9/26/11)--Pelican State CU, with $184 million in assets, Baton Rouge, La., has opened a branch on the campus of E. A. Conway Medical Center in Monroe, La. Local business leaders, residents, dignitaries and representatives from the Chamber of Commerce showed their support by attending the ribbon cutting ceremony led by Pelican State CU CEO Jeffrey K. Conrad and hospital administrator Aryon McGuire (Louisiana Credit Union League eNews Sept. 21). While the branch will primarily serve the employees of E. A. Conway, it is open to the public and will operate as a Credit Union Service Center shared branching network so members of participating credit unions can also make transactions at the branch, said Conrad. Formerly the Department of Hospitals CU, Pelican State CU has a long-standing relationship with the LSU charity hospital and its 900 employees. “More than half of the employees were already members of Pelican,” Conrad told the Louisiana Credit Union League. “Pelican has had an ATM on the medical center’s campus for more than 12 years,” Conrad. “A full service branch will allow the hospital employees to enjoy increased convenience to a broader range of our products and services.” Pelican has 12 locations in Louisiana, including a student-operated branch located on the campus of Peabody Magnet High School in Alexandria. The new branch will be the first location in the Monroe area and also Pelican’s northernmost location.

Fire destroys main office of Augusta VAH FCU

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AUGUSTA, Ga. (9/26/11)--A fire destroyed the headquarters of Augusta (Ga.) VAH FCU early Friday morning. A burglar alarm sounding about 4:30 a.m. was the initial indication that something was awry at the credit union’s main branch on August Parkway. Shortly thereafter, two men called 911 when they saw smoke pouring from the building (WRDW Sept. 23). Twelve fire units were eventually called to the scene. Firefighters were able to gain control of the fire about 6:30 a.m. The building is believed to be completely destroyed. Service to credit union members was uninterrupted, according to the Georgia Credit Union League. The credit union serves its members with two additional branches in Augusta. Also, member records were safeguarded by the credit union’s disaster recovery process, the Georgia league said. Augusta VAH FCU has been offered temporary space by another Augusta credit union and the August VA Hospital, the league said. The cause of the fire was unknown as of Friday afternoon.

Filene study Green lending is appealing and profitable

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MADISON, Wis. (9/26/11)--More and more credit unions are discovering that lending for green purposes is good business. The loans are profitable and attract financially strong borrowers. They spur membership growth and lead to new growth in solidly performing loans on the balance sheet, according to the latest research from the Filene Research Institute. “Finding Sustainable Profits: Green Lending in Credit Unions” finds that a growing number of credit unions are offering loans to their members that are focused on helping them make energy-saving improvements to the homes, businesses and transportation. The report, by researcher W. Robert Hall of Hall Associates Consulting, LLC, is based on an extensive online survey and a series of in-depth interviews. “These findings make it clear that there is a solid business case for credit unions to expand their focus on helping their members cope with the ever-rising costs of energy to heat their homes and to get the most out of each gallon of gasoline,” Hall said. “We continue to be interested in the implications the sustainability movement holds for credit unions,” says Mark Meyer, Filene CEO. “This report is the first systematic look at green lending among credit unions, and we’re impressed with how many credit unions are reporting profitable portfolios.” During the past several years, governments and nonprofit organizations have identified the need to increase access to credit for homeowners and businesses to make energy-saving improvements. A key component of most strategies has been trying to get financial institutions to offer reasonably-priced green loans that will enhance U.S. energy independence, address environmental concerns, and stimulate the creation of new green jobs. “This report contains key insights for anyone who cares about economic growth, consumer services, energy security, and environmental health,” said Frances Dubrowski, adjunct professor at the University of Maryland School of Public Policy, who wrote the report’s foreword. “Now that we’ve found that green lending is profitable for credit unions of all sizes, it is time to bring these findings to financial institutions of all types,” Hall said. “These loans can be particularly important to smaller credit unions in expanding their loan portfolio and attracting new members.” The research also found that many credit unions are partnering with local utilities, vendors and nonprofit organizations to offer their members green loan products. These partners assist the credit unions in marketing the loans, and, in some cases, they help subsidize the interest rates or provide other forms of financial assistance that lower costs to members. “Moving forward, credit unions should explore ‘going green’ not just as a cost-cutting strategy, but also as a business growth strategy,” the report concluded. “In the future, with energy costs expected to rise from the fuel pump to the electrical outlet in people’s homes, well-structured and marketed green loan programs have the potential to become as important as car loans have been in the past to credit unions,” Hall noted. For more information, use the link.

Arizona CUs can help small businesses league tells magazine

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PHOENIX (9/26/11)--Arizona’s 49 credit unions could boost the state’s small businesses if the federal government raises the member business lending (MBL) cap, the Mountain West Credit Union Association--which represents credit unions in Arizona, Colorado and Wyoming--told the Arizona Business Magazine in its September issue. There were roughly 381,000 small businesses in the state in 2008, according to the Arizona Small Business Association, wrote Joy Audet, association director of corporate communications, in the article she authored for the magazine. “We hear from business owners all the time that have solid plans and want to grow, but the big banks won’t even talk to them,” Paul B. Stull, senior vice president of strategy and brand for Arizona State CU in Phoenix, said in the article. “Increasing credit unions ability to lend to these businesses is needed now more than ever. We can get the economy moving again, but the current economic gridlock is holding us back. “Local financial institutions, like credit unions, know our markets very well,” he continued. “We understand Arizona and we know how to make Arizona loans for Arizona people.” Arizona credit unions stepped up and continued lending when other lenders cut back during the financial crisis, Audet wrote. Despite the fact that credit unions are the only financial institution category saddled with a statutory MBL cap, their MBLs grew 3% during the past year. Other financial institutions in the state have decreased their business loans an average of 7%, she added. “With less than 2% of the market, it’s important to note that credit unions pose no threat to commercial banks,” Audet wrote. “Small businesses are often turned away from commercial banks because they are too small. This is where credit unions have the ability to fill in the gap.” The Credit Union National Association (CUNA) and credit unions are pressing Congress to increase credit unions’ MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

N.J. CU donates 25K to support tennis education

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TRENTON, N.J. (9/26/11)--The VOICE Foundation--the charitable arm of McGraw-Hill FCU in East Windsor, N.J.--donated $25,000 to the National Junior Tennis & Learning of Trenton (NJTL) at the Sept.17 grand opening of the newly renovated Cadwalader Park Tennis Facility, as part of its commitment to empowering and educating students.
Click to view larger image The VOICE Foundation, the charitable arm of McGraw-Hill FCU, East Windsor, N.J., donated $25,000 to the National Junior Tennis & Learning of Trenton (NJTL) at the Sept.17 grand opening of the newly renovated Cadwalader Park Tennis Facility. From left, are: McGraw-Hill FCU’s Michael Sullivan, executive vice president/chief operations officer; Robert Carabelli, marketing manager; Ed Kroznuski, vice president, marketing and communications; Rebecca Sant, board director; Joe Conners, executive vice president/chief financial officer; Alexseyia McBride, volunteer; Kenya Webber, sales and service specialist; and Shawn Gilfedder, president/CEO. (Photo provided by McGraw-Hill FCU)
The donation will help support the NJTL’s Academic Creative Engagement (ACE) Initiative that is offered after school and during NJTL’s summer camp at Cadwalader Park. The program combines tennis instruction with academic enrichment in math, literacy and nutrition. College and career readiness skills, and technology education are also integrated into the program. McGraw-Hill FCU has stated that it is committed to education, especially when it comes to promoting financial literacy among young people. The credit union offers free seminars to New Jersey teachers responsible for educating students about personal finance. Being able to extend that commitment to education by supporting the NJTL’s ACE, and Nutrition, Education, Tennis and Support initiatives was a welcome opportunity for President/CEO Shawn Gilfedder. “The VOICE Foundation understands and values the importance that education can play in one’s future success,” Gilfedder said. “We are proud and honored to help fund initiatives within our community that benefit young people and promote academic enrichment.” During the grand opening ceremonies, there was a cookout lunch, a professional tennis exhibition featuring Chanda Rubin, Katrina Adams and players from the National Junior Tennis and Learning of Trenton, and photo opportunities with sponsors, past champions and children. Credit union employees volunteered their time to register attendees, assist with tennis clinics, and interact with the more than 300 guests of the NJTL. “Today’s young people are our future, so we look upon it as our duty to support the educational programs offered by the NJTL to the children of this community,” Gilfedder added. The contributions of organizations like McGraw-Hill FCU are critical to the continuation of NJTL’s programs and initiatives, said Dan Faber, NJTL executive director. “We are grateful for the credit union’s contribution and look forward to using the funding to promote our core values of healthy lifestyles, academic excellence, acceptance and responsible behavior,” Faber said.

Altura CU concert ticket winner pays it forward

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RIVERSIDE, Calif. (9/26/11)--Altura CU, Riverside, Calif., recently used Facebook to reward a member for his loyalty. That member decided to “pay forward” his reward to a family member for her loyalty during a trying time. On Aug. 17, Altura told its nearly 3,000 Facebook followers that they could win a pair of tickets to an Aug. 24 Taylor Swift concert in Los Angeles by commenting on Facebook why Altura is their credit union, and then asking their friends and family to “like” the comment. The comment with the most “likes” would win the contest.
Click to view larger image From left, Elizabeth Sevilla and Vanessa Castellon before a Taylor Swift concert in Los Angeles. Their brother, Carlos Mendez, won the concert tickets from Altura CU by garnering the most likes for his comment about Altura on its Facebook page. He shared the tickets with his sisters to thank them for helping him through some personal struggles. (Photo provided by Altura CU)
Carlos Mendez of Moreno Valley, Calif., posted: “You are my credit union because there is a location up the street from me … and everyone there is friendly and professional.” His comment drew 166 “likes” to win the tickets. Upon winning, Mendez said, “In 2008, my life turned upside down. In a nutshell: one year of unemployment and a divorce. My sister was there for me, as was everyone around me during that time. As a small gesture of my immense gratitude, I gave her the tickets. She invited our sister, and they both had an awesome time. Thank you Altura and all who helped make this possible.” Facebook has become a great way for Altura to connect with its members, according to Carlos Loza, the credit union’s marketing analyst. “We have found contests, such as this, is a great, low-cost way to get our followers involved with us and help us spread the word about Altura.”

CU system briefs (09/23/2011)

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* BIRMINGHAM, Ala. (9/26/11)--A federal judge Thursday sentenced Michael John Young, former president Alabama Central CU, to 17 months in prison for bank fraud in connection with fictitious companies whose bills were paid through the Birmingham, Ala.-based credit union. U.S. District Court Judge L. Scott Coogler sentenced Young and ordered him to pay $140,000 in restitution to the credit union. The judge also ordered Young to forfeit the same amount to the government as proceeds of illegal activity. Between about April 2009 and June 2010, Young submitted fraudulent bills and invoices on behalf of two fictitious companies he had created. Neither business had provided any services or goods to the credit union. Young would authorize payment by the credit union of the bills and invoices which he submitted in the name of the fictitious companies. The money paid by the credit union to the accounts of the fictitious companies was controlled and spent by Young … * VANCOUVER, Wash. (9/26/11)--Columbia CU, Vancouver, Wash., was awarded the 2011 Nonprofit Excellence Award for Corporate Community Support by the Nonprofit Network of Southwest Washington. The credit union was recognized for outstanding work in the community, providing support for the nonprofit sector with contributions, volunteer support, and in-kind services targeted to helping one or more nonprofits achieve greater sustainability. Columbia’s philanthropy serves a wide span of community needs including health, the hungry, education, business and animal welfare. Each award recipient received a check for $1,000. The credit union matched its $1,000 award with another $1,000, then requested that the entire amount be directed to Support for Early Learning and Families, an organization dedicated to supporting children and families, located in Vancouver, Wash …

CUNA Mutual Group to hold Online Discovery Conference

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MADISON, Wis. (9/23/11)--CUNA Mutual Group’s second annual, day-long Online Discovery Conference on Oct. 4 makes learning easy by turning credit union professionals into avatars and their computer desktops into a conference hall. Online Discovery is the Web-based equivalent of a face-to-face conference without the associated expenses, or time away from the office. On the day of the conference, conference participants won’t pick up a badge or registration packet; instead, they will create a profile and virtual business card, and then choose an avatar character to represent themselves throughout the day. “Conference participants will interact in much the same way they would if they were attending a face-to-face conference,” said Steve Johnson, CUNA Mutual senior vice president, marketing & credit union strategy. “Participants will download virtual business cards, click through the virtual expo center and chat or message with other conference attendees,” he added. Those interested in attending can take a tour of the virtual conference, and then register for the event. Use the links. More than 1,100 credit union professionals have registered to date. “Participants can learn more about the event by following us on Twitter @CUDiscovery and joining in the conversation by tweeting with #CUOnline,” Johnson said. The conference offers 13 credit union-focused sessions, networking opportunities, including chat rooms and message boards, an exhibit hall and prizes; plus registration guarantees access to conference materials for up to nine months at no expense. Online Discovery is CUNA Mutual’s free online educational resource for credit union leaders.

Texas CU program takes on bullying in schools

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TEXAS CITY, Texas (9/23/11)--AMOCO FCU in Texas City, Texas, has introduced a program to address a growing problem in many communities: bullying in schools. The $561 million asset credit union in recent weeks has brought anti-bullying programming to some 6,500 Galveston County middle and high school students, in partnership with Rachel’s Challenge, an organization created by the family and friends of Rachel Scott, one of the students gunned down in the Columbine High School tragedy (LoneStar Leaguer Sept. 21). AMOCO FCU said it embraced the mission of Rachel’s Challenge--preventing violence and bullying by engaging youth and adults to spread acts of kindness and compassion. “Making a difference and helping people is the reason we exist and Rachel’s story was just another way for us to help people in our community-- specifically, youth and their families,” Tina Linquist, AMOCO FCU vice president of culture and communications, told the Texas Credit Union League. “What we’ve learned throughout the past few weeks is that kids are dealing with a lot of personal stress brought on by bullying and sometimes violence either at school or at home. We couldn’t just close our eyes and ignore this growing problem; after all we’re here to make a difference with our members and community.” The Rachel’s Challenge program includes student and teacher assemblies held on campus, followed by a community-wide evening event open to all students, parents, and businesses in the community. Viewers are introduced to Rachel Scott, the first victim of the Columbine High School tragedy, through video of her friends and family members who describe who Rachel was and how she positively impacted their lives. AMOCO FCU team members also participate in the assemblies, which will have been presented at more than a dozen intermediate and high schools in their area. After the assemblies, a group of students are chosen to initiate a “Friends of Rachel” (F.O.R.) club for their particular school. While every student is encouraged to join the F.O.R. Club, this particular group of students is responsible for carrying on the program message throughout their school with the unified goal to make positive changes. “This program is so much more than just an assembly and an on-campus group,” Linquist said. “It brings teachers, counselors and families together as everyone can join in to help the culture on campus. “The stories that some of these students share are heart-breaking,” Linquist added. “Many students are shocked to learn about some of the terrible things their fellow students are dealing with, while others find comfort in knowing they aren’t the only ones dealing with personal issues. By the end of the 1.5 hour session, the small group of students form a bond and come together as family, which is truly amazing to see happen right before our very own eyes.” However, Linquist emphasized that the main reason AMOCO FCU gets involved with initiatives is because “it’s the right thing to do and because we are socially responsible.” “People are our business,” said Linquist. “Members are our priority, and we care about the communities they live in--and for this reason, we get involved with initiatives that make a difference.”

N.Y. CU Foundation helps students with LifeSmarts competition

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ALBANY, N.Y. (9/23/11)--The 2011-2012 online LifeSmarts competition--which helps students with life situations--is open and live at the program’s home, www.lifesmarts.org. The competition, coordinated in New York by the New York Credit Union Foundation, runs through the first week of February 2012. LifeSmarts is a free educational competition that introduces middle school and high school students throughout the state to real-world knowledge. Competition topics have been chosen to encourage and reward knowledge in the areas that matter most to consumers and workers in today’s marketplace: personal finance, health and safety, the environment, technology, and consumer rights and responsibilities. There are two separate competition levels: the High School Competition (Varsity) and the Middle School Competition (Junior Varsity, grades six through eight). Students and coaches can register online at www.lifesmarts.org to begin taking practice quizzes and downloading learning resources. Working with an adult coach, students compete against all other teams statewide. The varsity level competition culminates in a live playoff March 28 at Schenectady (N.Y.) County Community College (SCCC). The competition will be sponsored by Universal Sharing Network and SCCC. The state winner will then go on to the National Championship, April 20-24, in Philadelphia. The winner of the Junior Varsity Competition will be decided online. “This comprehensive, life skills program builds well-rounded kids by using their interest in the marketplace to motivate achievement across the board in reading, math, citizenship, leadership, financial literacy, communications, teamwork and workforce readiness,” said Diane LaVigna-Wixted, foundation executive director. “It also provides participating teachers from across the state with consumer curriculum they may not have access to elsewhere.” LifeSmarts is an educational program of the National Consumers League that complements a school curriculum. It can be used as an activity for classes, groups, clubs and community organizations. The foundation coordinates the program in New York State.

CU System brief (09/22/2011)

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MADISON, Wis. (9/23/11)
* A West Virginia woman was sentenced Monday to 30 months in prison by U.S. District Judge David A. Faber for orchestrating a $2.4 million fraud scheme that led to the failure of the N&W Poca Division FCU, formerly located in Bluefield, W. Va. (WVNA Sept. 19). Pamela Mullins, 46, a former employee of N&W Poca Division FCU, admitted that, beginning in 2003 she embezzled money using various schemes, including making fictitious deposits into her personal checking account and accounts of family members. The deposits were fictitious in that no funds were received by the credit union. Mullins admitted that she subsequently used the funds for personal use. Mullins also posted fictitious payments to loan accounts and issued credit union checks to herself, family members and to third parties to pay for her expenses, without recording the checks in the books and records of the credit union …

Iowa league announces board

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DES MOINES, Iowa (9/23/11)--Iowa credit union representatives were sworn in as the Iowa Credit Union League (ICUL) board of directors at the Iowa Credit Union Annual Convention Sept. 15.
Click to view larger image The Iowa Credit Union League recently announced its 2012 board of directors. Front row, from left: Denny Siemers, Town & Country CU, Harlin; Brent Helin, Des Moines (Iowa) Metro CU; Joe Hearn, chair, Dupaco Community CU, Dubuque; Tim Chapman, vice chair, Members Community CU, Muscatine; Pat Drennen, 1st Gateway CU, Comanche; Mike Whittie, Federal Employees CU, Des Moines; and Dave Cale, Financial Plus CU, Des Moines. From left, back row, Pat Jury, CEO, Iowa Credit Union League; Tim Wallen, Ace Community CU, Ames; Jonathon Miller, Dubuque (Iowa) Teachers CU; Tim Marcsisak, Nishna Valley CU, Atlantic; Jim Hagerman, Linn Area CU, Cedar Rapids; Janine Keim, Consumers CU and Murray Williams, chief operating officer, Iowa Credit Union League. (Photo provided by Iowa Credit Union League)
Joe Hearn, chief operating officer of Dupaco Community CU, Dubuque, was re-elected to serve as the 2012 chair of the ICUL board and Tim Chapman, Members Community CU, Muscatine, was re-elected to serve as the 2012 vice chair. Board members in the up to $15 million asset category:
* Janine Keim, Consumers CU, Denison; * Jonathon Miller, Dubuque (Iowa) Teachers CU; and * Denny Siemers, Town and Country CU, Harlan.
Board members in the $15 million-$40 million asset category:
* Tim Marcsisak, Nishna Valley CU, Atlantic; * Tim Wallen, Ace Community CU, Ames; and * Mike Whittie, Federal Employees CU, Des Moines.
Board members in the $40 million-80 million asset category:
* Tim Chapman, (as noted, vice chair) Members Community CU, Muscatine; * Brent Helin, Des Moines (Iowa) Metro CU; and * Pat Drennen, 1st Gateway CU, Camanche.
Board members in the $80 million and above asset category:
* Dave Cale, Financial Plus CU, West Des Moines; * Jim Hagerman, Linn Area CU, Cedar Rapids; and * Joe Hearn, (as noted, chair) Dupaco Community CU, Dubuque.

NJCUL announces board election results

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ATLANTIC CITY, N.J. (9/22/11)--The New Jersey Credit Union League (NJCUL) announced the results of its 2011 board election at the close of its 77th annual convention Tuesday in Atlantic City, N.J. The only contested seats were in Tier A for credit unions with less than $33,875,000 in assets. Jay Flanagan, CEO, Elizabeth (N.J.) Firemen’s FCU, and Christina Olender, CEO, Parlin DuPont FCU, Middlesex, tied with the same number of votes. Flanagan will serve for one year, and Olender will serve a three-year term. Seats in Tier B, for credit unions with more than $33,875,000 in assets, and Tier C, an at-large category, were uncontested. Linda McFadden, CEO of XCEL FCU, Bloomfield, was awarded a three-year term in Tier B. Incumbent NJCUL director Raymond Del Nero, president/CEO of Merck Employees FCU, Rahway, was awarded a three-year term in Tier C.

CUNA survey provides insights into members needs

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CUNA survey provides insights into members’ needs MADISON, Wis. (9/23/11)--The Credit Union National Association’s (CUNA) newly released 2011-2012 National Member Survey, a report designed to uncover trends in member attitudes and use of financial services, reveals that there is still room for credit unions to steer members and potential members away from banks and grow their overall membership bases. The National Member Survey summarizes directions in member attitudes over the past couple years to help credit unions understand what their members want from their financial institutions. With the information provided by the survey, credit unions can better understand their members and, in turn, provide better service, keep a competitive edge in the marketplace and stay abreast of impending member issues. “Even today, there are plenty of positive trends for credit unions illustrated by the Survey,” said Jon Haller, CUNA director of corporate and market research. “Credit unions’ loyalty score is still a full 37 percentage points above the banks’ score and the number of people who are extremely likely to say they’d recommend their credit union to others has increased.” However, Haller added, the survey also reflected that banks are making some gains in consumer loyalty, perhaps due to significant efforts to remove some of the tarnish to their reputations accumulated because of the financial crisis. Young adult memberships are on the rise, with members between 18 to 24 years of age constituting 9% of credit unions’ total adult membership--up from 6% in 2006. Use of credit union checking accounts is also growing, suggesting that more people are choosing credit unions as their primary financial institution. “The findings in CUNA’s National Member Survey can help credit unions better understand the member trends that will impact the credit union movement in the years to come,” adds Haller. “Credit unions need to understand their members in order to survive in today’s financial environment.” For more information, use the link.

CUNA survey shows how to attract new members

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MADISON, Wis. (9/22/11)--The Credit Union National Association's (CUNA) recently released 2011-2012 Survey of Potential Members Report--a strategic document that predicts new membership trends among financial institutions--found loyalty to be a chief driver in generating membership for credit unions and customers for banks during recent years. However, only credit unions truly benefitted from this loyalty. “After the meltdown of the banking industry in 2008, the majority of bank advertising focused on portraying an image of a customer-focused, trustworthy institution,” said Jon Haller, CUNA director of corporate and market research. “Credit unions did banks one better. With their additional focus on helping their members meet their financial goals, credit unions fared better than banks.” Credit unions reported higher scores than banks on satisfaction levels, sustaining member loyalty and generating business from member loyalty. The report found that 71% of all respondents who use credit unions claimed to be “very satisfied” with their credit union, higher than the 66% of nonmember bank respondents who were “very satisfied” with their banks. Loyal credit union promoters had more checking accounts, more loans, higher loan balances and a higher average number of products/services than their loyal bank counterparts. “These kinds of findings are very important for credit unions to know--in the credit union industry, loyalty really does translate into increased usage of services,” Haller said. “This is the kind of information that is useful not only in the board room, but on the front line where employees interact with members. There are many opportunities to make a positive impression on members.” The report also sheds light on other important developments in non-member growth. Value, trust and appreciation ranked among the top categories where credit unions had a heavy advantage over banks. Furthermore, the survey revealed that youth and Hispanic markets offer significant growth opportunities. With the information provided by the report, credit unions can better understand the current trends relating to non-members’ financial behavior and act on these trends to increase their member base and improve loyalty for continued growth, CUNA said. For more information about CUNA’s 2011-2012 Survey of Potential Members Report, use the link.

Tower FCU raises 130K to help special-needs people soldiers

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LAUREL, Md. (9/22/11)--Tower FCU, based in Laurel, Md., helped raise more than $130,000 for Maryland Therapeutic Riding (MTR) at a benefit concert Sept. 10. MTR is a nonprofit organization that uses horses to help special needs children and adults, and retired and active-duty wounded soldiers returning from Iraq and Afghanistan. The Live on the Farm! concert featured two-time Grammy winner and environmental activist Kathy Mattea and local favorite The Hard Travelers. The event, held on MTR’s 26-acre farm in Crownsville, Md., featured rider demonstrations, refreshments and live and silent auctions. The charity serves over 500 clients, according to MTR’s Development Director Anne Joyner. The annual concert is MTR’s primary fundraiser, and money raised benefits programs such as Horses for Heroes, a therapeutic riding program specially designed for retired and wounded soldiers. “The success of this fundraiser shows how much the community cares about our soldiers returning from the battlefield,” says Martin Breland, Tower president/CEO. “Therapeutic riding is a unique program that provides support and rehabilitative services for our wounded warriors and we are proud to sponsor this event.” Since 1997, Tower has donated more than $500,000 to local and national charities, Breland said.

New Mexico CU performs flash mob

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ALAMOGORDO, N.M. (9/22/11)--Service members at Holloman Air Force Base, in Alamogordo, N.M., were treated to a flash mob courtesy of Otero FCU on Sept. 9. The flash mob was launched during the Thanks Team Holloman event, which is held annually by the citizens of Alamogordo to thank the men, women and families of Holloman Air Force Base for their service, according to the Credit Union Association of New Mexico (CUANM Update Sept. 16). The idea for the flash mob was proposed by Otero FCU President/CEO Juanita Whiteside, who had seen a similar performance by Innovations FCU in Florida. Whiteside thought it would be a fun event for the OFCU staff to work on and a unique experience for the local community. The flash mob was organized and choreographed by Jesica Sanford, an Otero FCU member service representative. “OFCU always tries to connect with the youth of our communities by conducting financial literacy classes in the local schools and by awarding more than $25,000 in college scholarships in the last several years,” said Greg Shaver, Otero FCU vice president of marketing. “We felt this was a natural way to continue that connection by doing something that was fun and interesting.” The flash mob, which featured on the local KRQE TV news, can also be seen on YouTube. Click the arrow to watch the video.

SECU to promote Citizens Awareness Month

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RALEIGH, N.C. (9/22/11)--State Employees’ Credit Union (SECU) has teamed with the North Carolina State Board of Elections (NCSBE) to promote Citizens Awareness Month, a campaign that provides opportunities for North Carolina citizens to register to vote and also publicizes upcoming elections. Throughout September, all SECU branches statewide have available a supply of voter registration applications. Members can pick up an application at their local branch, complete the form and send it to their local Board of Elections office for processing. In the coming months, dozens of municipalities statewide will conduct elections for city and town officials. Voter turnout is typically very low, primarily due to a lack of awareness that an election is taking place, according to Raleigh, N.C.-based SECU. By partnering with NCSBE, the credit union will provide another 238 locations where voter registration applications can be obtained. SECU also published articles in its August Grassroots member newsletter and its September Money Matterz member newsletter for teens. “Every North Carolina citizen who is eligible to vote should exercise his or her right to do so, but in order to be eligible, you must be registered,” said Leigh Brady, SECU senior vice president of education services. “By providing applications in SECU branches, we hope to make the process of voter registration even more convenient for our members.”

Sweeney named N.J. League Legislator of the Year

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ATLANTIC CITY, N.J. (9/22/11)--The New Jersey Credit Union League (NJCUL) Monday named New Jersey State Senate President Stephen Sweeney (D-3) Legislator of the Year during the league’s 77th Annual Meeting and Convention in Atlantic City.
The New Jersey Credit Union League (NJCUL) honored New Jersey State Senate President Stephen Sweeney as its Legislator of the Year Monday. Sweeney (left) accepts his award from NJCUL President/CEO Paul Gentile. (Photo provided by New Jersey Credit Union League)
Sweeney, who represents the Third Legislative District, was recognized for his effort in spearheading the bi-partisan municipal deposit reform legislation signed into law on Aug. 18 to allow credit unions to become eligible depositories for counties, municipalities and school boards. The state’s 40-year-old Government Unit Deposit Protection Act gave banks a virtual monopoly on government banking, and precluded local government entities from utilizing credit unions as depositories. With Sweeney’s lead, legislators paved the way for public entities to seek out the best possible return for taxpayer dollars by allowing New Jersey’s credit unions to serve as eligible public depositories. With the reform, New Jersey’s credit unions will soon be able compete with banks in the $15 billion public deposit market, and public entities will have a new option to consider as they seek out the best yield in these tough economic times. “Senate President Sweeney is a true credit union hero,” said Gentile. “Credit unions will bring new competition to public deposits that will likely drive better returns and ultimately help taxpayers. The passage of the municipal deposit reform legislation is a real victory for not only credit unions, but for New Jersey taxpayers, and Senator Sweeney played a major role in getting that done.”

Cabot Creamery Coop offers Health and Wealth kits

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CABOT, Vt. (9/22/11)--Cabot Creamery Cooperative, a sponsor of the Credit Union National Association’s Home & Family Finance Radio, is offering free “Growing Health & Wealth” kits to credit union members nationwide. The kit, created for families with children ages six to 10 years, encourages parents and grandparents to help kids understand the importance of healthy food choices and money management. Building strong bones and bodies with exercise, dairy, calcium and good nutrition, along with building strong financial values through creative ways to save, spend and share are among the themes the kit emphasizes. The kit--available for download--includes an activity book, family guide and poster. A key component of the Growing Health and Wealth program are Moneyboxes that help children develop personal goals, wishes and positive experiences. Kids can create Moneyboxes out of simple household containers and materials and label them to represent three themes: Save, Spend and Share. Cabot Creamery Cooperative initiated the Health and Wealth program to promote the idea health and wealth are correlated, and the sooner children are taught about the benefits of a healthy diet, regular exercise and money management, the better off they will be. Home & Family Finance Radio is a weekly one-hour program that offers information and advice on consumer finance issues. To download Growing Health and Wealth kits, use the link.

NEW FOMC to purchase 400B of Treasury securities

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WASHINGTON (9/21/11 2:15 p.m. CT)--The Federal Open Market Committee (FOMC) decided at its meeting yesterday and today to purchase billions in Treasury securities and leave the target range for the federal funds rate at 0% to 0.25%. Information received since the FOMC met in August indicates that economic growth remains slow. Recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated. Household spending has been increasing at only a modest pace in recent months despite some recovery in sales of motor vehicles as supply-chain disruptions eased. Investment in nonresidential structures is still weak, and the housing sector remains depressed. However, business investment in equipment and software continues to expand. Inflation appears to have moderated since earlier in the year as prices of energy and some commodities have declined from their peaks. Longer-term inflation expectations have remained stable. Consistent with its statutory mandate, the committee seeks to foster maximum employment and price stability. The FOMC continues to expect some pickup in the pace of recovery over coming quarters but anticipates that the unemployment rate will decline only gradually toward levels that the committee judges to be consistent with its dual mandate. Moreover, there are significant downside risks to the economic outlook, including strains in global financial markets. The committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the FOMC’s dual mandate as the effects of past energy and other commodity price increases dissipate further. However, the committee will continue to pay close attention to the evolution of inflation and inflation expectations. To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the committee decided today to extend the average maturity of its holdings of securities. The committee intends to purchase, by the end of June 2012, $400 billion of Treasury securities with remaining maturities of six years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of three years or less. This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative. The committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate. To help support conditions in mortgage markets, the committee will now reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. In addition, the committee will maintain its existing policy of rolling over maturing Treasury securities at auction. The FOMC also decided to keep the target range for the federal funds rate at 0% to 0.25% and currently anticipates that economic conditions--including low rates of resource use and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013. The FOMC discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability. It will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate. Voting for the FOMC monetary policy action were: Ben S. Bernanke, chairman; William C. Dudley, vice chairman; Elizabeth A. Duke; Charles L. Evans; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action were Richard W. Fisher, Narayana Kocherlakota, and Charles I. Plosser, who did not support additional policy accommodation at this time.

NASCUS regulators Executive CU Council named

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ARLINGTON, Va. (9/21/11)--At the 2011 National Association of State Credit Union Supervisors (NASCUS) Annual Meeting Sunday in Chicago, three sitting NASCUS board members officially began new three-year terms. The NASCUS Credit Union Executive Council also named some new members. The state regulators continuing their service on the NASCUS board are John Kolhoff (Michigan), Orla Beth Peck (Utah) and Michael Wettrich (Ohio). Each board member will serve a three-year term ending in September 2014. Kolhoff is a deputy commissioner for the Michigan Office of Financial and Insurance Regulation. Peck, the supervisor of credit unions for the Utah Department of Financial Institutions, also assumed the NASCUS Chairmanship for a two-year term on Sept. 14. Wettrich is the deputy superintendent for credit unions for the Ohio Department of Commerce. New NASCUS Chairman Peck also appointed Werner Paul, deputy commissioner of the Virginia Bureau of Financial Institutions, to a one-year term on the NASCUS Board of Directors. The remaining sitting NASCUS board members include: Tom Candon, deputy commissioner, Vermont Department of Banking, Insurance, Securities and Health Care Administration; Mary Hughes, financial institutions bureau chief, Idaho Department of Finance; Jerrie Jay, Administrator, North Carolina Credit Union Division; Linda Jekel, director of credit unions, Washington Department of Financial Institutions; and Kathy Stewart, director of financial institutions, Kentucky Department of Financial Institutions. The NASCUS board also elected its officers. Hughes is the chairman-elect and Stewart will serve as secretary/treasurer. The NASCUS Credit Union Advisory Council also held its annual meeting Sunday in Chicago, where two state credit union CEOs began new terms on NASCUS’ Credit Union Executive Council. The Credit Union Advisory Council is governed by the Executive Council, a group of 12 directors who are credit union executives from around the country. Linda Childs, Knoxville (Tenn.) Post Office CU, will continue to represent District 2 for a three-year term, expiring September 2014. Representing District 3, Jason Boesch, Oklahoma RE&T Employees CU, Oklahoma City, also will continue to serve as a director for another three-year term. Childs has served on the council as a director since 2005, and Boesch was elected to the council in 2008. The new Credit Union Advisory Council Chairman, Catherine Tierney of Community First CU, Appleton, Wis., also re-appointed at-large director Michael Kurish, Associated School ECU, Youngstown, Ohio, to serve a three-year term. The remainder of the Executive Council includes the sitting directors:
*Jim Blaine, State Employees’ CU, Raleigh, N.C.; * J. Parker Cann, BECU, Tukwila, Wash.; * Bob Fouch, Corporate Central CU, Muskego, Wis.; * Dan Kester, Sooper CU, Arvada, Colo.; * Debbie Peters, Incol CU, Old Forge, Pa.; * Jack Sheets; Interra CU, Goshen, Ind.; * Tierney, Community First CU, Appleton, Wis.; * Mendell Thompson, America’s Christian CU, Glendora, Calif.; and * Terry West, Vystar CU, Jacksonville, Fla.
The Executive Council also elected its officers. Childs is the chairman-elect and Kester is the secretary.

Southeastern CUs add 2.2B in assets increase MBLs

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BIRMINGHAM, Ala. and TALLAHASSEE, Fla. (9/21/11)--Credit unions in Alabama and Florida are beginning to see a trend: More consumers are joining a credit union, applying for loans and paying off their debt. Collectively, Alabama and Florida credit unions added $2.2 billion in assets in the second quarter of 2011, according to the League of Southeastern Credit Unions (LSCU). That breaks down to $1.18 billion in new assets in Florida and $1.09 billion in new assets in Alabama. Both states combined to welcome 28,000 new members to credit unions; 16,000 new in Alabama and 12,000 new in Florida. “Through the first six months of 2011we are seeing a trend,” said LSCU President/CEO Patrick La Pine. “Credit unions are adding members and assets while loans are beginning to show some growth. We’re seeing savings and deposits up in both states with Alabama increasing by 7%, nearly double the national credit union average and Florida by 3%, which is right at the national average.” Credit has been tight for small businesses since the economic collapse of 2007. Credit unions, despite a 12.25% of assets cap on the amount of member business loans (MBL) they can make, are seeing major growth on MBLs, LSCU said. In Alabama, member business loans are up 81%, or $182 million. That represents significant growth over the past four years. Alabama total MBLs are now over $400 million. Florida credit unions made $200 million in MBLs during the past four years, which signifies 24% growth, to more than $1 billion in total MBLs. “The arbitrary cap, which was never in place until 1998, is causing some credit unions to turn away loans,” La Pine said. “It’s also preventing others from making much needed MBLs. We need Congress to pass H.R. 1418 and S. 509 so the MBL cap will be raised to 27.5%, which will help our small businesses survive and expand.” Credit unions are seeing more quality mortgage and auto loans being made. In Alabama, used-auto loans grew 15%, or $269 million, in the second quarter. That is nearly 10% higher than the national credit union average. Alabama credit unions have a total of $2 billion in outstanding used-auto loans. Florida credit unions used-auto loan growth was $30 million, to bring total outstanding used auto loans to $4.4 billion. What is significant in these numbers is that delinquent loans to loans and net charge-offs are dropping, LSCU said. In Florida, credit unions have seen a 32 basis points (bp) drop in delinquent loans to loans. This is better than the national credit union average of 17 bp. Through the first six months of 2011, Florida credit unions net charge-offs are 119 bp lower. In Alabama, delinquent loans to loans have dropped 24 bp, while net charge-offs have declined by 26 bp. “It’s hard to say we’ve turned the corner, but our credit unions are seeing more quality loans,” said La Pine. “Alabama credit unions are below the national credit union average in delinquent loans to loans and net charge-offs, while Florida credit unions have seen their most significant drop in years, especially in net charge-offs. These two factors give us some hope.”

St. Vrain Valley and Elevations merger approved

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BOULDER, Colo. (9/21/11)--St. Vrain Valley CU, Longmont, Colo., and Elevations CU, Boulder, Colo., Tuesday announced regulatory approval of their pending merger. With due diligence completed, St. Vrain has a green light for its member vote. The National Credit Union Administration and the Colorado Department of Financial Services have given approval to proceed with the final merger requirement--a vote by St. Vrain members to merge with Elevations. The vote is scheduled for Monday. St. Vrain has $81.3 million in assets, and Elevations has $966.3 million in assets. “Our organizations are working very closely together in anticipation that members will vote ‘yes’ to combining our two credit unions,” said Eva Gaudio, president/ CEO of St. Vrain Valley CU, and Gerry Agnes, president/CEO of Elevations CU, in a combined statement. “Individually, our credit unions are quite strong, yet we both fully realize that we will be far stronger together, and we look forward to providing improved service and convenience to our combined membership in early October.”

Haitian CUs join WOCCU International Remittances Network

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PORT-AU-PRINCE, Haiti (9/21/11)--Haitians abroad now have a more affordable way to send money back home through Haiti’s caisses populaires, or credit unions. Last week, seven credit unions affiliated with the Le Levier network in Haiti launched remittance services through the International Remittances Network (IRnet), a platform owned and operated by the World Council of Credit Unions (WOCCU).
Click to view larger image Nicolas Bona Junior Metellus receives one of the first remittances transferred through CPSA CU in Port-au-Prince, Haiti. Last week, seven credit unions affiliated with the Le Levier network in Haiti launched remittance services through the International Remittances Network (IRnet), a platform owned and operated by World Council of Credit Unions. (Photo provided by the World Council of Credit Unions)
Haitians can receive remittances at their local credit union through money transfer operator (MTO) Ria Financial Services, Inc., a 100,000-agent network in 131 countries across five continents. “Despite its vital importance to the local economy, Haiti’s remittance market remains a virtual oligarchy with very high prices, poor service and limited rural access,” said Saul Wolf, IRnet manager, pointing out that few remittance firms offer services in Haiti. “With WOCCU’s know-how and valued partners like Ria and Le Levier, we aim to create a national network that can provide the same or better service but at a lower cost than the main players.” Ria is one of 10 MTOs offered through IRnet’s platform, which provides financial institutions the technology and training to offer competitively priced remittance services with minimal upfront investment. IRnet partners with low-cost MTOs like Ria to help stimulate local competition and works with credit unions to encourage the rural poor to enter the formal financial sector through remittances. Haiti annually receives $1.5 billion in remittances, accounting for 21.2% of its gross domestic product, according to the World Bank. But with few MTO options in Haiti, senders pay an average of 6% to 10% of the total transfer amount to remit money to the country, significantly reducing the amount the receiver collects. Prices vary daily and by location, but the cost of sending a remittance through Ria is up to 50% lower than through market leader Western Union, Wolf said. Nicolas Bona Junior Metellus was the one of the first people to use the new remittance service in Haiti when he picked up a money transfer from Switzerland on Monday at CPSA CU in in Port-au-Prince. He is not currently a member, but he said he was happy with the service and planned to join the credit union on his next visit. Making remittance services available to both members and non-members alike, as IRnet does, opens the door for new membership opportunities and developing remittance-linked products, WOCCU said. Ansy Saintervil, assistant general manager of Le Levier, said IRnet has helped credit unions bring a much-needed resource to the rural communities they serve. “This service is very important for the Haitian people because it’s offered through the credit unions, which serve the most disadvantaged and are spread over 10 regions of the country in some of the most remote places,” Saintervil said. “It’s also important to note that a good part of the population lives on transfers coming from overseas, particularly the U.S. and Canada.” Remittances in the past week have come through Haiti’s credit unions from senders in Canada, France, Switzerland and the U.S. Seven of Le Levier’s 20 affiliated credit unions are piloting IRnet through 15 service points. Le Levier plans to grow the network to 50 locations by the end of the year and has signed memorandums of understanding with more than 25 unaffiliated credit unions. “The introduction of lower-cost remittances through IRnet and Ria in Haiti brings the rural poor one step closer to financial inclusion in the country,” said Brian Branch, WOCCU president/CEO. “We look forward to seeing the remittances network expand through Haiti’s credit unions in the coming months and years.” The Haiti Integrated Financing for Value Chains and Enterprises program, funded by the U.S. Agency for International Development and managed by WOCCU, provided technical and logistical support in expanding the IRnet platform to Haiti. It was funded by the international credit union movement through contributions made to WOCCU’s Worldwide Foundation for Credit Unions.

N.Y. association initiates Hispanic pilot program

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ALBANY, N.Y. (9/21/11)--The Credit Union Association of New York has identified four credit unions to participate in a pilot program to create or enhance offerings to the state’s Hispanic community. The pilot program was initiated on the heels of the 2010 New York Hispanic Opportunity Report commissioned by the association. As the largest, fastest growing, youngest and most underserved market in the state, the Hispanic population could potentially represent a loyal and growing member base that in turn could spur credit union growth, the association said. The association, through its work with REAL Solutions, commissioned Coopera Consulting to conduct the study.
Click to view larger image Click for larger view
Numbering more than 3.2 million, Hispanics make up 17% of the state’s population. The U.S. Census Bureau projects that by 2025, the Hispanic population will reach 4.3 million, with more than one in five New Yorkers being Hispanic. (See chart.) The association, together with Coopera Consulting, reviewed the report findings and conducted phone interviews to gauge the level of commitment from more than two dozen credit unions, based on their location and demographic opportunity. The four credit unions selected to participate in the pilot program are:
* AmeriCU CU, with $970 million in assets, Rome; * Hudson Heritage FCU, with $242 million in assets, Middletown; * Lower East Side People’s FCU, with $28 million in assets, New York; and * Teachers FCU, with $4.1 billion in assets, Farmingville.
The pilot program is funded in part by a grant from the association. Participating credit unions will also provide financial support and staffing. The program will incorporate Coopera’s Hispanic Opportunity Navigator assessment tool, on-site strategic planning sessions and staff training. The credit unions’ investment will allow them to choose two additional Coopera services they deem critical to the program’s success at their credit unions. The association said it hopes that the credit unions in the pilot program, in working through the process of identifying products and the culturally nuanced solutions necessary to serve the financial needs of the Hispanic market, will serve as models that other credit unions in the state can duplicate. Coopera Consulting is an economic development firm focused on emerging Hispanic markets that present unique growth opportunities for credit unions. Coopera was formed in 2006, is owned by the Iowa Credit Union League and is a strategic alliance partner of the Credit Union National Association. Coopera’s bicultural and bilingual staff works with credit unions nationwide. Sept. 15 to Oct. 15 is National Hispanic Heritage Month.

Shared networks announce merger agreement

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RANCHO CUCAMONGA, Calif. (9/21/11)--CO-OP Financial Services and Financial Service Centers Cooperative Inc. (FSCC) have announced their intent to merge, unifying the two primary credit union shared branching networks. Through the two companies, more than 1,700 credit unions nationwide participate in shared branching, making more than 4,300 physical branch locations available to their members, plus 2,200 Vcom kiosk locations at 7-Eleven stores. The shared-branching arrangements allow credit union members to conduct financial transactions as if they were visiting a branch of their own credit union. According to a release, under the terms of the agreement, FSCC president/CEO Sarah Canepa Bang will join CO-OP as president and chief operating officer of FSCC, and as chief strategy officer of CO-OP shared branching. Stan Hollen is president/CEO of CO-OP Financial Services. CO-OP and FSCC expect the transaction to close within 120 days. "There's no denying that FSCC and CO-OP have been terrific competitors--imagine what we can do together," Bang said. "CO-OP and Stan Hollen personally played a historic role in the creation of FSCC, and now with the combining of the two companies, it is very much a case of our business coming to a logical full circle." FSCC was created in 1990 and originally operated under a management agreement with CO-OP Financial Services--then known as CO-OP Network. In 1999, as chairman of the board of FSCC, Hollen hired Bang as president/CEO.

Filene names Idea Idol winner

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MADISON, Wis. (9/21/11)--HomeTrak, a device to help homeowners track and plan for home maintenance, replacement costs of major appliances, and household expenses, has been voted the winner of the Filene Research Institute’s first Idea Idol contest. The winner emerged from a live Idea Idol webinar and online voting on Sept. 14. HomeTrak will now enter the Filene Research Institute innovation lab where it will be prepared as a pilot program. Filene evaluated 76 ideas from its i3 innovation team before narrowing the field to four Idea Idol contestants. Filene’s i3 team strives to create new ideas, innovate and implement products and services for the benefit of the credit union industry. The three other Idea Idol finalists:
* Flex.One: A first mortgage combined into a home equity line of credit with all the capabilities of a checking account; * Heartfelt Hands: An “angel tree” recognizing an emergency financial need and matching that need with members who are willing to help; and * The Signal: A Website that helps consumers navigate through the questions and complexities of disability benefits and asset building.

NEW CO-OP FSCC announce merger agreement

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RANCHO CUCAMONGA, Calif. (9/21/11 UPDATE 12:30 P.M. et)--CO-OP Financial Services and Financial Service Centers Cooperative Inc. (FSCC) have announced their intent to merge, unifying the two primary credit union shared branching networks. Through the two companies, more than 1,700 credit unions nationwide participate in shared branching, making more than 4,300 physical branch locations available to their members, plus 2,200 Vcom kiosk locations at 7-Eleven stores. The shared-branching arrangements allow credit union members to conduct financial transactions as if they were visiting a branch of their own credit union. According to a release, under the terms of the agreement, FSCC president/CEO Sarah Canepa Bang will join CO-OP as president and chief operating officer of FSCC, and as chief strategy officer of CO-OP shared branching. Stan Hollen is president/CEO of CO-OP Financial Services. CO-OP and FSCC expect the transaction to close within 120 days. “There’s no denying that FSCC and CO-OP have been terrific competitors--imagine what we can do together,” Bang said. “CO-OP and Stan Hollen personally played a historic role in the creation of FSCC, and now with the combining of the two companies, it is very much a case of our business coming to a logical full circle.” FSCC was created in 1990 and originally operated under a management agreement with CO-OP Financial Services--then known as CO-OP Network. In 1999, as chairman of the board of FSCC, Hollen hired Bang as president/CEO.

Pennsylvania CU Assoc. partners with NCUF for flood relief

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HARRISBURG, Pa. (9/20/11)--The Pennsylvania Credit Union Association’s (PCUA) board of directors approved $20,000--$10,000 each from PCUA and Pacul Services, Inc.--to be used to establish a fund with the National Credit Union Foundation (NCUF), jointly with the Pennsylvania Credit Union Foundation (PCUF), for Pennsylvania flood disaster relief. The funds supplement what NCUF may have received from credit unions and individuals through CUAid for disaster relief associated with Tropical Storm Lee in early September (Life is a Highway Sept. 19). The restricted funds will be used to assist credit union employees, volunteers, members, and credit unions in Pennsylvania who suffered losses not covered by insurance or any other government assistance. “It is in the spirit of cooperation and ‘people helping people’ that the association, Pacul Services, Inc., and the foundation have taken the initiative to establish the disaster relief fund,” said Jim McCormack, PCUA president/CEO. “We have been working as quickly as possible to assess the flood damage for credit union employees, members, and the credit unions. A number of credit union members and employees have sustained substantial losses, and others have suffered damage and lost personal possessions. Our thoughts and prayers go out to all of the victims who are recovering from this latest disaster.” Grants will range from $500 to $1,500. Grant applications will be available until Oct. 30. The grant application and criteria can be downloaded from the PCUF website. Grants will only be made to Pennsylvania residents to cover flood damage that occurred from Tropical Storm Lee earlier this month.

CDCU receives 3 million for healthy foods financing

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NEW YORK (9/20/11)--Donna Gambrell, director of the U.S. Department of the Treasury’s Community Development Financial Institutions (CDFI) Fund, Wednesday announced $25 million in awards to 12 CDFIs serving food deserts in low-income neighborhoods with limited access to affordable and nutritious food. The grants, made available as part of the multi-agency Healthy Food Financing Initiative, were awarded to CDFIs focused on developing solutions for increasing access to affordable healthy foods. Among the awardees under this program was ASI FCU, a community development credit union (CDCU) serving the greater New Orleans area, who received $3 million to start a new revolving loan fund to support lending to strengthen healthy food distribution in low-income areas of New Orleans. “The awards being provided to CDFIs through this initiative will enable CDFIs to enhance their financing solutions to deliver healthy food options to food deserts nationwide,” said Gambrell. “The 12 awardees this year have an impressive combination of experience in working in underserved areas and the enthusiasm to expand their expertise to improve the quality of life for residents of low-income communities across the country.” According to ASI FCU CEO Mignhon Tourné, the credit union was already doing this type of lending. “Two weeks ago, on the day prior to the six-year anniversary of Hurricane Katrina, the New Orleans Healing Center held its grand opening in the Upper Ninth Ward, a community that has historically been low-income and predominantly African-American, and which could have been considered a food desert with respect to healthy foods, even prior to Katrina, but certainly since that terrible day,” she said. “But that grand opening was a proud moment for us because our credit union provided financing to a new food cooperative as well as a new Mediterranean restaurant that are opening at that center.” ASI FCU also opened a micro-branch at the new center and Tourné stressed that the award from the CDFI Fund would help them expand their efforts significantly. “We have already had several conversations with grocers and restaurateurs in the Bywater and Marigny neighborhoods of the Ninth Ward who need financing to start or expand their businesses,” said Sarah Taylor, senior vice president at ASI FCU. “These monies from the CDFI fund will help us make a real impact in those communities, creating new jobs and providing healthy and affordable food alternatives. We’re extremely excited and still somewhat in disbelief,” Taylor said. ASI FCU also received a $1.5 million award from the CDFI Fund under its core funding round in July.

Federation launches Borrow and Save to fight predatory lending

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NEW YORK (9/20/11)--For many working poor in New York City and nationwide, bridging the gap between generally declining incomes and the ever-higher cost of living is a challenge often met by increasing their consumer debt, typically through credit card debt and alternative, often high-cost, lenders. The National Federation of Community Development Credit Unions has launched a product to change that. Officials from city government, local credit unions, their members, a sponsoring bank, and the federation gathered Monday at Union Settlement FCU--one of the oldest community development credit unions (CDCUs) in New York City--to announce a new credit union product that demonstrates that responsible lenders in New York City offer alternatives to high-cost, predatory lenders that have become so pervasive in low-income communities nationwide. Borrow and Save, which will be offered at two New York City CDCUs, is designed to help borrowers break the continuous cycle of borrowing from high-cost alternative lenders and move towards healthier savings habits. Clifford N. Rosenthal, Federation president/CEO; Gina Rusch, Settlement FCU board chairman; and Jonathan Mintz, New York City Department of Consumer Affairs (DCA) commissioner, joined executives and credit union members from the two participating credit unions for the announcement. “The goal of the new program is to get consumers on the right track to financial health through responsible products that enhance positive financial behavior and builds assets,” said Melanie Stern, federation senior program officer, who is in charge of administering the program. To demonstrate how CDCUs offer affordable alternatives, while also promoting asset building, the federation, with support from Morgan Stanley, has provided five grants to CDCUs nationwide through the new pilot program, including two in New York City--Union Settlement FCU in East Harlem and Love Gospel Assembly FCU in the South Bronx. “Our goal in participating in Borrow and Save is to turn people into savers, so that they don’t need to borrow when an emergency expense pops up in the future,” said Audia Williams, CEO at Union Settlement FCU. “It’s a common misconception that low-income people can’t save, and through this product we hope to offer a much-needed product that also incentivizes positive behavior and shows our members that they can save.” The primary reason behind high levels of debt among the working poor is the occurrence of unforeseen and unexpected events such as job loss and expenses from medical emergencies, according to the Center for Responsible Lending. “Predatory lenders often take advantage of these emergency needs by offering immediate access to short-term loans, but at a cost that can exceed 400% per annum,” Stern said. A typical $500 small-dollar loan at the participating CDCUs requires no collateral, no credit report, is processed within 24 hours or less, has an interest rate of 18%, a fee of $20, and a term of 90 days. By contrast short-term loans from a typical pawn shop, loan shark or Internet payday lender have fees and interest equal to $15 per $100 borrowed every 14 days. The net result is that the CDCU payday alternative costs the borrower $40, while the payday lenders’ short-term loan ends up costing consumers $450. The Borrow and Save product has an added bonus, in that it incorporates an asset building component that requires a portion of the loan go directly into savings, and incentivizes additional saving with a savings bonus to the borrower when the loan is fully repaid. Participating credit unions in New York City and others around the country also couple their Borrow and Save loans with debt counseling and financial literacy as a way to help borrowers become more financially secure. While New York’s usury cap keeps most storefront payday lenders out of the state, predatory lenders, including Internet payday lenders, pawn shops, rent-to-own stores, and loan sharks continue to be a scourge in low-income neighborhoods. “The federation has long recognized the deleterious effects predatory lending and related schemes, such as rent-to-own and refund anticipation loans, have in low-income communities, so in 1999 we began placing Predatory Relief and Intervention Deposits, or PRIDEs which assume some of the risk to assist CDCUs in making affordable loans in their communities,” Rosenthal said. “It is with this combination of experience in targeted investments, advocacy and programming that we are launching Borrow and Save.”

NCUA updates Western Bridge members on recent actions

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SAN DIMAS, Calif. (9/20/11)--The National Credit Union Administration (NCUA) has provided Western Bridge members with an update on future actions. Western Bridge has been run by NCUA under conservatorship since March 2009. United Resources FCU’s bid to succeed Western Bridge Corporate FCU fell short of the bridge corporate’s stated capital subscriptions goal of $200 million. NCUA said Friday it will hold a meeting Oct. 3 with potential bidders for Western Bridge assets. The agency said its preference is to seek an acquirer that can absorb the corporate’s entire operations while minimizing costs to the insurance fund. The agency will also redeem all of the Western Bridge Corporate FCU’s $3 billion in fixed-rate CDs Oct. 3. NCUA said it repaid the all of capital pledged by Western Bridge members on Sept. 15 with including interest accrued through Sept. 14. Dividends payable on the share certificates are the largest costs associated with operating Western Bridge, NCUA said. The early redemption of the CDs is projected to save NCUA estimated it can save $31.6 million in costs. The NCUA had previously alerted members to the possibility of early redemption of the certificates in a July 18 letter.

NCUF grantee builds foreclosure intervention toolkit

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NEW YORK (9/20/11)--With support from a National Credit Union Foundation (NCUF) Financial Education Grant, the National Federation of Community Development Credit Unions has completed a new “Credit Union Foreclosure Intervention Toolkit” to help credit unions combat the foreclosure crisis in their communities. The federation has been holding “train-the-trainer” workshops to teach credit unions and state credit union leagues how the toolkit can help empower homeowners. The purpose of the federation’s initiative is to increase credit unions’ capacity to empower home ownership through the toolkit and other resources--such as workshops, collaborations with housing counseling intermediaries and webinars. “The federation is the only national association dedicated to supporting credit unions operating in low- and moderate-income communities across the nation,” said federation President/CEO Cliff Rosenthal. “In our more than 37 years of operation, we have developed expertise unique in the credit union movement with respect to serving the underserved, and with continued foreclosures affecting millions of Americans, we are working to arm our credit unions with the knowledge and resources they need to help their members through these challenging times.” The federation has seen the national foreclosure crisis reflected in a dramatic shift in demand between different types of counseling services, from pre-purchase to foreclosure intervention counseling. Federation counseling agencies track their individual counseling clients according to a total of five categories of services:
* pre-purchase; * mortgage delinquency and default; * post-purchase non-delinquency; * rental housing; and * housing for the homeless.
Prior to the crisis, pre-purchase counseling accounted for more than 75% of all individual counseling clients. Since 2006, the proportion of individual counseling clients that seek pre-purchase counseling has dropped dramatically and the proportion of delinquency and foreclosure intervention clients has risen sharply. The federation’s “Part of the Solution: Help for Credit Union Members at Risk of Foreclosure” workshops are offered nationwide to credit unions and leagues. The federation also has collaborated with NeighborWorks to customize its Loan Scam Alert campaign materials for a credit union audience. The materials are packaged and available in electronic form as part of the toolkit. The federation also is working with members of the HOPE Now Alliance, and specifically with the Housing Preservation Foundation to establish a channel for credit union members to obtain foreclosure intervention assistance. NCUF grants are made possible by supporters of the Foundation and the Community Investment Fund, a system of investments that help credit unions earn dividends while donating to national and state community development programs.

iWSJi Credit unions a better value than banks

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MADISON, Wis. (9/20/11)--An article in the Sunday edition of The Wall Street Journal touted credit unions as a more affordable option than banks. “Credit unions are able to beat banks across the board because they're nonprofit and owned by members, so they have an incentive to offer the best deals possible,” says Greg McBride, senior financial analyst at Bankrate.com,” according to the article, which appeared with the headline “Credit Unions: a Cheaper Banking Option.” The Wall Street Journal Sunday pages appear in at least 75 regional and local newspapers, which combined have a broader circulation than even the weekday edition. The story also was posted on The Wall Street Journal's web site. The feature included a bar chart of the various services credit unions offer, drawing on data from the Credit Union National Association and the National Credit Union Administration.
This chart appeared in the Sept. 18 Sunday page of The Wall Street Journal, as well as on the Journal's website.
About three out of four credit unions still offer accounts with no monthly service fees, the article said. Also, out-of-network ATM fees and overdraft fees are lower at credit unions on average. Credit unions charge members an average 99 cents for using an out-of-network ATM, compared with an average $1.41 for banks, Bankrate.com reported in the article. Credit unions also offer more attractive rates on certificates of deposits, credit cards and loans, Bankrate.com said. About 95% of credit unions offer auto loans, the article said, citing data from the Credit Union National Association. (See chart.) The article quoted CUNA Vice President of Communications Pat Keefe emphasizing that most people can find a credit union they’re eligible to join. The article advised consumers to look for local credit unions and find out about eligibility at aSmarterChoice.org, the new site developed by CUNA and the leagues to help consumers understand that credit unions are the best option for consumers conducting their financial business. The site also features the industry’s most comprehensive CU locator tool.

CU System briefs (09/16/2011)

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* NEW YORK (9/19/11)--The National Federation of Community Development Credit Unions (CDCUs) is expected today to announce the launch of a credit union program that offers small, non-predatory loans with a savings component to counter predatory lending. The federation will work with local CDCUs, which serve predominantly low- and moderate-income residents across New York City … * UPPER MARLBOROUGH, Md. (9/19/11)--Members with direct deposit accounts will have access to their paychecks a day earlier at NASA FCU, which Thursday launched EarlyAccess Payroll as part of its new Premier Checking Line. The move means paychecks that are direct deposited into NASA FCU will be available for access to direct deposits or automated clearinghouse (ACH) transfers one day sooner than usual. For some members, such as NASA employees, money from direct deposits could be available up to two days in advance, said the credit union. Exceptions could be during holidays, weekends or if there is a change in employer payroll processes; members then would get access to funds on regularly scheduled paydays … * WASHINGTON (9/19/11)--CU Direct Corp., parent for the CUDL, Lending Insights and the new Lending 360 and CUDL Retail brands, announced that Madison, Wis.-based Summit CU and Riverdale, Utah-based America First CU were awarded its 2011 Diamond Awards during the credit union service organization's Lending Redefined Conference held in Arlington, Va., last week. The awards recognized the credit unions for their excellence in lending practices and overall success in 2010. Summit increased its funded auto loans by 54% from June 2010 to June 2011, with 42% of funded loans year-to-date going to existing members. American First increased its look to book ratio by nearly 40% and ranked second in funded loans on the CUDL lending platform … * WARMINSTER, Pa. (9/19/11)--More than 1,076 members of Warminster, Pa.-based Freedom CU signed up for paperless statements during the credit union's Paperless Statement Sweepstakes during August. Fifty members won $50 gas cards in the sweepstakes. The signups brought the total of members on paperless statements to 10,775. Freedom CU said paperless statements reduce clutter and member concern about lost or stolen statements, help the credit union to cut costs so it can provide better services and rates, and allow members to get their statements sooner through e-mail … * PHOENIX (9/19/11)--Phoenix-based Arizona State CU donated more than 2,000 cases--or 20 tons--of water to the Phoenix Rescue Mission just in time for August temperatures, which spiked at 117 degrees, the hottest temperature recorded there in August since 2001. The mission distributes 4,000 bottles of water a week to the homeless, said the credit union. Its donation will provide water for roughly three months. This year's water drive, a competition between the credit union's headquarters and branches, resulted in a 35% increase in donations from the 2008 water drive, said President/CEO David E. Doss. Arizona State CU has $1.3 billion in assets and more than 128,000 members …

Shots fired during CU robbery no one injured

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TULSA, Okla. (9/19/11)--Two shots were fired during a robbery Friday morning at Tulsa (Okla.) Municipal Employees FCU, but no injuries were reported, said local media. The incident occurred shortly after 11 a.m. Friday, when three men wearing ski masks entered the credit union. One man fired a handgun at a video surveillance camera, and another shot into a teller's glass partition, said Tulsa Police (Newson6.com, KRMG.com and TulsaWorld.com Sept. 16). Police said the three men entered the vault area, stayed a few minutes, then ran out the door. They fled in a green Jeep to a nearby apartment complex, then switched to a Honda Civic. Police recovered the Jeep, which had been stolen, said Newson6.cvom.

CUDL awarded five Summit International awards

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ONTARIO, Calif. (9/19/11)--CUDL, an indirect and point-of-purchase auto lending credit union service organization (CUSO) and administrator of a credit union auto lending network, has been recognized by Summit International with 2011 Summit Creative Awards (SCA) in multiple categories. The Summit Creative Awards recognize the creative accomplishments of small- and medium-sized creative groups, advertising agencies and other organizations with annual billings under $30 million. The CUSO was presented with five awards, including: the Summit SCA Silver Award in the categories of mobile applications for its AutoSMART iPhone App, and in consumer product/service television for its “CUDL Together” television ad. CUDL also was presented with the Summit SCA Bronze Award in the consumer product/service television category for its “CUDL Character” television ad. The AutoSMART iPhone app, designed for credit union members, replicates features of the CUDL AutoSMART vehicle research and shopping website as an app for Apple’s iPhone, iPad and iPod Touch. Developed specifically for credit unions and their member base, the AutoSMART website provides CUDL’s 945 partnering credit unions a vehicle shopping and research site that they can brand, customize and market to members as their own. CUDL’s 2010 “CUDL Together” and “CUDL Character” TV advertisements were developed for the CUSO’s credit union partners to promote CUDL AutoSMART programs local television marketplaces. More than a dozen credit unions have aired the TV spots to promote their AutoSMART programs. CUDL competed against more than 2,000 entries from 22 countries.

Carolinas foundation to raise 600K for kids hospitals

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RALEIGH, N.C. (9/19/11)--The Carolinas Credit Union Foundation has committed to raise $600,000 for two Children’s Miracle Network Hospitals, one in North Carolina and one in South Carolina. The multi-year campaign includes an initial effort to benefit Levine Children’s Hospital in Charlotte, N.C., with a second stage to benefit a Children’s Miracle Network Hospital in South Carolina, said the North Carolina Credit Union League (Weekly Update Sept. 16). The fundraising push on behalf of Levine Children’s Hospital culminates in September 2012. The plan is to renovate a rooftop garden at the hospital. The combined efforts will leave a lasting impact on the city, said John McGrail, president/CEO of the foundation. “Credit unions have a long history of being involved in community projects that benefit children,” McGrail told the Tarheel Chapter last week. Once the Levine project is completed, fundraising would commence for a South Carolina children’s hospital, McGrail said. Details of that effort and plan will emerge over time, but it will be the same $300,000 goal as the initial Levine project. Credit Unions for Kids is a fundraising vehicle for the credit union movement, benefitting the industry’s charity of choice, Children’s Miracle Network Hospitals. For more information, use the links.

Tellers are not an endangered species says consultant

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FARMERS BRANCH, Texas, and MADISON, Wis. (9/19/11)--Several credit unions recently have announced new tellerless, high technology branches. Does that mean human tellers are becoming an endangered species? No, says Mary White, founder of WTC Performance Group and a training and organizational consultant (LoneStar Leaguer Sept. 6). "This is similar to all the stories 15 or 20 years ago that claimed that with the advent of debit and ACH (automated clearinghouse) cards, brick-and-mortar credit unions and banks were going to go away," she told the Texas Credit Union League. "Yet, look around. Financial institutions are still building and growing." While the concept of tellerless branches may have merits in a technology-driven world, White said, the actual application of the concept may prove otherwise. "What happens when a member or customer wants to cash a check or requires a more complex transaction than can be handled by machine?" She noted that the importance of human interaction matters--even to younger generations tethered to their gadgets. Citing surveys showing that technical service matters, but customer service matters far more, White suggested that employers may be underusing their tellers. "So many tellers I have worked with have so many more talents than what the credit unions are using," she said, noting the high turnover on the front line occurs because "we don't tap their brains and really use the front line to deliver memorable member service." "Credit unions are all about 'people hiring people'--and that requires people," White said. Several credit unions announced this month that they were opening state-of-the-art techno-teller services. Among them:
* American Heritage FCU, Philadelphia, which opened its newest branch with Personal Automated Teller (PAT) machines that combine the convenience of an ATM with a personal, two-way video interaction, said the Pennsylvania Credit Union Association (Life is a Highway Sept. 6). It will be staffed by a branch manager, assistant branch manager and member service officer, and all teller transactions will be handled by the PAT. American Heritage became the first financial institution in Pennsylvania to introduce PAT technology when it deployed a PAT unit in Northeast Philadelphia last year. * Education First CU, Columbus, Ohio, which has deployed a 200-square-foot Video Banking Branch in the Gahanna's Lincoln School District, said the Ohio Credit Union League (eLumination Newsletter Sept. 7). The fully functional remote unit connects with the credit union's member service representatives, who can be hundreds of miles away in a central video call center. While members familiarize themselves with the new technology, a credit union staffer provides assistance on site. Members can conduct virtually any type of banking transaction as well as open accounts and apply for loans.
"The blend of technology and assisted service is taking place across many industries," said Education First CU President/CEO Dick Maslyk. "When we combine the power of personalized services with business efficiencies, everyone wins. This technology will allow Education First to move forward with key strategic goals to serve our marketplace better through new branch deployments and design," he told the Ohio league.

Two Oregon CUs call off merger

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BEND, Ore. (9/19/11)--The hiring of a new CEO hiring has put on hold merger talks between two Oregon credit unions. After considering a merger, Mid Oregon, with $148 million assets, Bend, Ore., and Northwest Community CU, with $661 million assets, Springfield, Ore., have decided to remain stand-alone organizations, according to a newsletter on Mid Oregon’s website. “NW Community Credit Union was somewhat unexpectedly put in the position of having to select a new CEO and that required their sole focus,” Mid Oregon president/CEO Bill Anderson wrote in the August edition of Member News. “The new CEO hiring has occurred and an important responsibility of their new CEO will be to assimilate into the leadership position of a complex organization. That will take some time. This was a long term strategic opportunity.” Mid Oregon is financially healthy and has “no plans to actively pursue any other mergers at this time,” Anderson wrote. NW Community CU recently hired John Iglesias as its new president/CEO. Iglesias most recently served as the president/CEO of Salal CU, Seattle.

AVCU sponsors two-month iBelong campaign

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MONTPELIER, Vt. (9/19/11)--The Association of Vermont Credit Unions (AVCU) will again sponsor iBelong ads on broadcast and cable television outlets statewide during October, under the auspices of the AVCU Marketing Committee. This is the third year AVCU has sponsored more than two months of advertising--at no cost to credit unions--to educate consumers about the benefits of belonging to a Vermont credit union (NewsLines Express Sept. 15). The committee placed six weeks of ads in the spring and is adding another three weeks, starting Oct. 3, to coincide with National Co-op Month and International Credit Union Day. The committee selected programs targeted toward women who are 25 to 54 years old--the most important demographic for family financial decisions, according to marketing research. The iBelong spots will appear during local and national morning shows such as “Today” and “Good Morning America,” during evening local and national news broadcasts, and during prime-time shows, including sitcoms, dramas and Fox’s new reality/ talent show, “The X Factor.” The 2011/2012 AVCU Marketing Committee is chaired by AVCU Director Matt Levandowski of Heritage Family FCU, Rutland, and includes:
* Stacey Benoit, Members Advantage Community CU, Barre; * Lori Crowley, Vermont FCU, Burlington; * Yvonne Garand, Vermont State Employees CU, White River Junction; * Julie Longfellow, NorthCountry FCU, South Burlington; and * Cindy Morgan, New England FCU, Williston.

CU staffer takes in new members evacuated by flood

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PHILADELPHIA (9/19/11)--During Hurricane Irene and Tropical Storm Lee, credit unions throughout the Northeast scrambled to help their employees and members. One employee of Sb1 FCU, Philadelphia, went beyond mere member service and opened her home to two new members.
This photo, from The Patriot-News, shows a flooded South Front Street in Harrisburg, Pa., the after-effects of Tropical Storm Lee. One employee of Sb1 FCU, Philadelphia, invited two members who were evacuated from their apartment into her home. (Photo provided Pennsylvania Credit Union Association)
In August, Sb1 FCU member service representative Liz Strittmatter opened accounts for two GlaxoSmithKlein interns served by the credit union’s Upper Merion branch. The interns, who had just moved to the area from the United Kingdom, didn’t know many people. “We just kind of struck up a friendship,” Strittmatter told News Now. “When it became evident that Irene was going to cause flooding and they could be evacuated from their apartment I gave them my phone number. I said, ‘Please call if you need a place to stay.’” The two interns indeed were evacuated. They spent one night at Strittmatter’s home during the weekend of Hurricane Irene and another night when Hurricane Lee caused flooding in the Philadelphia area. For her good deeds, Sb1 presented Strittmatter with tickets to a Philadelphia Phillies game. Strittmatter said she was gratified, but she extended the offer out of friendship, she said. “They still stop by the office everyday just to say hi,” she said. “We had a great time.”

Scottish banks end free services for CUs consumers hurt

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DUNDEE, Scotland (9/19/11)--At least two major Scottish banks are attempting to end free financial services for credit unions--a move that could cause some of the country’s most economically stressed members more financial hardship. Royal Bank of Scotland (RBS) and Clydesdale Bank are looking to introduce charges for credit unions that offer affordable alternatives to expensive borrowing (The Herald Sept. 15). Scotland has more than 100 credit unions with a total membership of roughly 250,000 people. As an example, Discovery CU in Dundee, Scotland, which has had free financial services with RBS since 2003, could have to pay up to 800 pounds (about $1,250) per month in financial services fees to RBS. That monthly payment could eventually limit the amount of money Discovery could lend to it members (thecourier.co.uk Sept. 16). No final agreement on charges had been agreed to at Discovery, RBS said. Also, negotiations are ongoing to reduce the amount of fees Discovery would have to pay RBS, The Herald said. “Inefficiencies” in RBS’ reviewing policy had led to many businesses “enjoying free transaction charges” for many years, which had led to an “unfairness in the system,” a representative of RBS told a meeting at the credit union last month, according to a report to Discovery’s board of directors. RBS is looking at “all income streams” given recent events within the business, the report added.

Illinois governor CUs critical to growth of middle class

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CHICAGO (9/19/11)--Hailing credit unions as “the heart and soul of the middle class,” Illinois Gov. Pat Quinn addressed the National Association of State Credit Union Supervisors (NASCUS) State System Summit Friday in Chicago.
Click to view larger image Illinois Gov. Pat Quinn called credit unions “the heart and soul of the middle class” during his address at the National Association of State Credit Union Supervisors State Summit Friday in Chicago. (Photo provided by the National Association of State Credit Union Supervisors)
Credit unions are critical to the growth of the middle class, Quinn said. “Your gathering here today is special, given this economic time in our country and the need for jobs,” he added. The address was Quinn’s second visit to the NASCUS Summit. He addressed attendees in 2005 when he served as Illinois’ lieutenant governor. “It’s important to have a regulatory system that is proper and safe,” he told attendees. Brent Adams, secretary of the Illinois Department of Financial and Professional Regulation, Roxanne Nava, director of Illinois Financial Institutions; and National Credit Union Administration board member Michael Fryzel were on hand to greet Quinn. Representatives from the Illinois Credit Union League also were in attendance. Illinois has 285 state-chartered credit unions--the largest number of state-chartered credit unions in the nation.

More marketing doesnt mean more business Texas CUs told

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FARMERS BRANCH, Texas (9/16/11)--Credit unions must embrace key marketing trends instead of falling into a complacent "marketing means more business" rut, says a speaker at the Texas Credit Union League's Leadership Conference. "Credit unions must know what marketing trends are going to work in the future, not necessarily what has worked in the past," said Mark Arnold, president of On The Mark Strategies. His breakout session covered the top 10 marketing trends, which savvy marketing staff at credit unions should embrace, according to the league (LoneStar Leaguer Sept. 13). Among the trends: marketing and technology fields are merging; rules can be broken; innovate; differentiation deals success, mobile marketing is driving today's society, and shiftening demographics are deepening. More marketing doesn't necessarily equate to more business, he cautioned. "Innovation and differentiation will equate to more business." He challenged credit unions to focus on creating, instead of copying. "When was the last time your credit union launched a new product?" he asked, adding, "If the answer is longer than 12 months, you have serious strategic problems at your credit union." Arnold told attendees they can get ideas from multiple product suggestions from the Filene Research Institute. To differentiate, Arnold advised credit unions to dig deep. "Be real with your differentiation. Try answering the question 'What makes your credit union different' without the words service, people or community. That is cliché differentiation." Also, front line staff must be able to explain what makes the credit union different. In relating shifting trends in demographics, Arnold said that credit unions "have talked for years about getting younger, but the reality is we are heading in the wrong direction." Many front line staff are from a younger generation, but members using branches are from an older demographic, he said. "Credit unions must conduct generational training to help with this culture clash," Arnold said. He also suggested embracing technology products such as QR codes, video, live chat support, mobile banking, online-account opening and account-to-account opening to reach Gen Y. "The whole world is going 'e,' and marketing is no different," he said.

SBA study CUs increasingly important in biz lending

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WASHINGTON and BERKELEY, Calif. (9/16/11)--A new independent report from the Small Business Administration (SBA) confirms that credit unions' member business lending (MBL) portfolios grew while banks' small business lending (SBL) portfolios shrank during the past two decades and especially since the financial crisis that began in 2007. The report, "The Increasing Importance of Credit Unions in Small Business Lending," is authored by James A. Wilcox of the Haas School of Business at the University of California-Berkeley and was released by the SBA's Office of Advocacy. "Credit unions devoted increasingly important shares of their assets to SBLs since the 1980s. Strikingly, over the same period, banks did the opposite," wrote Wilcox in the report. "SBLs as a share of credit union assets rose gently during the 1990s and increased much more rapidly through 2010. In contrast, banks devoted a fairly steady share of their assets to SBLs until the 2000s, when the share fell substantially." In another view, the report maintained, "SBLs at banks slowed somewhat during and after the 2001 recession. Moreover, during much of the 2000s, SBLs at banks grew at lackluster rates, especially compared with the 1990s. During and after the recession of 2007-2009, SLBs at banks actually shrank, and considerably so in 2010. "In contrast, SBLs at credit unions grew faster that at banks from 1995 to 2010, with an average annual growth rate of 16% compared with 3% at banks. Furthermore, the growth of SBLs at credit unions during and after the 2001 recession continued its double-digit pace, exceeding 20% annually for several years into the 2000s." The report said growth rates of SBLs at credit unions "tended to be highest when the growth rates at banks were at historically low levels. Of course, during the crisis that enveloped the U.S. credit markets after 2007, growth rates of SBLs declined at both credit unions and banks. While growth rates of SBLs at credit unions slowed during the financial crisis and ensuring slow recovery, those growth rates remained remarkedly positive, far above those of banks, and were actually higher than those of banks at almost all points during this extended period." Part of the differential resulted in the fact that the business loan market was new to some credit unions. "Nonetheless, even during the financial crisis, the gap between annual growth rates of SBLs at credit unions and at banks continued at well over 10%," Wilcox said. Over shorter periods if the supply of business loans at banks were disrupted, "the availability of SBLs at credit unions might well be of importance to small businesses," said the report. "Indeed, because credit unions in the aggregate are relatively new to SBLs, the importance of credit unions as an alternative to bank SBLs may be greater than the amounts of SBLs at credit unions relative to those at banks might suggest," said the report. Other findings:
* SBLs at credit unions tended to partially offset declines in business loans at banks. Credit unions offset about four cents per dollar of fluctuations in business loans at banks and seven cents per dollar of fluctuations in all business loans at banks. * Credit unions offset more of the fluctuations in SBLs at small banks than at large banks, and they offset more of the fluctuations in SBLs than in larger business loans at banks. * The developments that boosted SBLs at credit unions tended to reduce business loans at banks. The offset was about 20 cents per dollar of additional SBLs at credit unions. That reduction in business loans at banks implies that a $1 increase in the supply of SBLs by credit unions would lead to a net increase in business loans of 80 cents.
The report's conclusion: "If credit unions can appreciably and increasingly offset fluctuations in banks' SBLs, potential small business borrowers should be made aware of this alternative source of loans." It also noted, "credit unions perhaps should be included as alternative suppliers of business loans when regulators assess the effects on market concentration and competition of bank mergers. In addition, regulators might consider the extent to which credit unions could otherwise offset fluctuations in business loans at banks when setting ceilings on business loans at credit unions. And small businesses might face better loan terms and availability if more credit unions recognized more opportunities for more SBLs." The Credit Union National Association (CUNA), state-level associations and credit unions are pressing Congress to pass bills that would enable credit unions to make more MBLs by lifting their MBL cap to 27.5% of assets from the current 12.25% of assets. Doing so would enable credit unions to infuse $13 billion into the economy in small business loans and help create 140,000 jobs the first year--without costing taxpayers. CUNA also is encouraging the Obama administration to include credit unions as a source of MBLs in his jobs package.

SunCorp announces success in raising 60M capital

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WESTMINSTER, Colo. (9/16/11)--System United Corporate FCU (SunCorp) in Westminster, Colo., Thursday announced it successfully raised more than $60 million in capital to meet the requirements of the National Credit Union Administration’s regulation 704. The new regulation requires corporate credit unions to obtain a minimum 4% interim leverage ratio by October, which can be comprised of any form of capital: retained earnings, perpetual contributed capital, or nonperpetual capital (similar to membership capital accounts). SunCorp raised more than $60 million in new capital subscriptions from 176 members. It said it is looking to expand membership as credit unions in the West continue to choose provisions of settlement and payment services, and liquidity and investment support. “Because of [our capitalizing members], we can now look to the future and the many new opportunities for SunCorp as the cooperative solution to credit unions throughout the West,” said Tom Graham, SunCorp president/CEO. Earlier this week, Southeast Corporate FCU in Tallahassee, Fla., announced Tuesday it signed a letter of intent to merge with Corporate One FCU, based in Columbus, Ohio (News Now Sept. 14). Southeast Corporate fell short of the $80 million it needed in capital commitments to operate as a stand-alone corporate. The membership of Southwest Bridge Corporate, Plano, Texas, voted Aug. 30 to approve the corporate’s merger with Georgia Corporate, Duluth, Ga., a consolidation that created Catalyst Corporate on Sept. 6 (News Now Aug. 31). Western Bridge Corporate in San Dimas, Calif., did not meet the capital requirements. Alloya Corporate announced success in meeting its capital requirements.

Dakota flood victims receive 36K from CUAid

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BISMARCK, N.D. (9/16/11)--The Credit Union Association of the Dakotas (CUAD) brought good news to some flood victims in Minot, N.D., this week when staff hand delivered more than $36,000 in aid checks to seven Minot-area credit unions.
Click to view larger image Robbie Thompson, left, president/ CEO of the Credit Union Association of the Dakotas, hands CUAid disaster relief checks to Kim Colbenson of GEM FCU of Minot, N.D. GEM FCU lost its entire credit union building in a recent flood, and several GEM employees were severely impacted by personal losses. (Photo provided by the Credit Union Association of the Dakotas)
The checks will be distributed to individual credit union employees and members who were severely affected by the flood waters this summer. The checks were made possible by donations to the National Credit Union Foundation (NCUF) online disaster relief system, CUAid.coop, which solicited funds from credit union people nationwide. The donations will help credit union employees and members who were displaced or experienced massive damage to their personal property by the high waters. NCUF coordinated with the Credit Union Association of the Dakotas to distribute money efficiently to credit union employees and members in the affected areas. “This is what credit unions are all about,” said Robbie Thompson, CUAD president/CEO. "Through CUAid and the efforts of credit unions and others all around the country, we were able to give a helping hand to credit union employees and volunteers in the Minot area who have had their lives turned upside down by the devastating flood.

WOCCU launches Year of Co-ops online resources

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MADISON, Wis. (9/16/11)--The World Council of Credit Unions (WOCCU) this week launched a special section on its website to provide a platform for credit union organizations to share ideas about cooperative services and ways to celebrate 2012 as the International Year of Cooperatives (IYC).
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The U.N. earlier this year designated 2012 as a time to recognize the contributions of cooperative enterprises worldwide, including credit unions. “Credit unions play a critical role in the lives of their members, and it is important to recognize and celebrate that role,” said Brian Branch, WOCCU president/CEO. “We encourage our members to add to the International Year of Cooperatives section on our website by sharing ideas related to member service in general and the year-long celebration in particular.” The International Year of Cooperatives will officially launch the week of Oct. 31-Nov. 1, with a series of meetings and workshops at the U.N.’s New York City headquarters. WOCCU’s online IYC platform contains information and resources for WOCCU member organizations interested in recognizing and celebrating the year-long designation. The website also features a forum through which members, credit unions and other cooperative business leaders can share ideas, photos and videos about IYC and current issues affecting credit unions. The website features celebration and service ideas, financial cooperative information, links to related sites and events and IYC branding guidelines. To subscribe to the RSS feed on the IYC Forum, use the link. The Credit Union National Association’s theme for International Credit Union Day, “Credit Unions Build a Better World,” ties directly to the IYC theme, “Cooperative Enterprises Build a Better World." International Credit Union Day is Oct. 20.

NASCUS installs officers honors Little

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CHICAGO (9/16/11)--The National Association of State Credit Union Supervisors (NASCUS) Wednesday named two officers and bestowed an annual award at its annual State System Summit in Chicago this week.
Click to view larger image Orla Beth Peck became the National Association of State Credit Union Supervisors (NASCUS) chairman for a two-year term. Pictured, from left, are: NASCUS President/CEO Mary Martha Fortney; Peck, Utah’s Supervisor of Credit Unions; and Catherine Tierney, Community First CU, Appleton, Wis., the new chairman of the NASCUS Credit Union Advisory Council.
Click to view larger image Roger Little, retired credit union regulator from Michigan and past National Association of State Credit Union Supervisors (NASCUS) chairman and director, was honored with the 2011 NASCUS Pierre Jay Award during NASCUS' State Summit this week. From left are: Little; Tom Candon, Vermont regulator; and NASCUS President/CEO Mary Martha Fortney. (Photos provided by the National Association of State Credit Union Supervisors)
Utah’s credit union regulator, Orla Beth Peck, became the NASCUS chairman for a two-year term succeeding Tom Candon of Vermont. Also, Catherine Tierney, Community First CU, Appleton, Wis., was installed as the new chairman of the NASCUS Credit Union Advisory Council, succeeding the chairmanship of Parker Cann of BECU, Tukwila, Wash. Peck, the supervisor of credit unions for the Utah Department of Financial Institutions, joined the Utah agency as an examiner in 1981. She was named supervisor of credit unions in 1992. A longtime member of NASCUS, Peck has been active on NASCUS committees and served as a trustee and chairman of the National Institute for State Credit Union Examination. Peck has served on the NASCUS Board of Directors since 2007. Tierney has been active with the credit union community and NASCUS for many years. She joined Community First CU in 1976 and was named president/CEO in 1994. Under her leadership, the credit union has grown to $1.5 billion in assets with 88,000 members. Tierney has been a director of the NASCUS Credit Union Executive Council since 2003 and received the NASCUS Pierre Jay Award in 2009. Also at the summit, Roger Little, Michigan retired credit union regulator, past NASCUS chairman and longtime NASCUS Board Director, was honored with the 2011 NASCUS Pierre Jay Award. Recipients of the award best demonstrate outstanding service, leadership and commitment to NASCUS and the dual chartering system. The award, first awarded in 1997, is named after the first commissioner of banks in Massachusetts. Little began his state regulator career at the Michigan agency in 1984 as a credit union examiner. He later served as an examiner supervisor before his role as deputy commissioner, in which he was responsible for the oversight of Michigan’s more than 200 state-chartered credit unions. He was actively involved in NASCUS and served on the board of directors from 1999-2011. He was NASCUS chairman from 2003 to 2005. He was also an active participant in the NASCUS Accreditation Program and testified before committees in the U.S. House and Senate during his involvement with NASCUS, and co-authored a NASCUS white paper. Little retired on Jan. 1.

CUAid update 24K raised Irenes effects linger

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MADISON, Wis. (9/16/11)--CUAid.coop, the National Credit Union Foundation’s (NCUF) online disaster relief system, has generated more than $24,000 for victims of Hurricane Irene and Tropical Storm Lee.
Click to view larger image National Credit Union Foundation has raised more than $24,000 for victims of Hurricane Irene and Tropical Storm Lee through CUAid.coop, its online disaster relief system. Harrisburg, Pa., is among the areas that has experienced major flooding. (Photo provided by National Credit Union Foundation)
The effects of Hurricane Irene are still being felt by credit union people along the East Coast, particularly in New Jersey, New York and Vermont. Tropical Storm Lee has caused severe flooding in Pennsylvania, said NCUF. “We are still in the process of surveying the damage to credit unions, employees, and members,” said Jim McCormack, president/CEO of the Pennsylvania Credit Union Association (PCUA), Harrisburg, Pa. “There has been substantial flood damage in several areas across Pennsylvania and our association, through the Pennsylvania and National Credit Union Foundations, will work with credit unions to help ease some of the financial burden on people who may have lost everything.” Belco Community CU, Harrisburg, is offering a special hardship loan at a reduced rate for those affected in the central Pennsylvania area. Flood victims will pay a 4.99% annual percentage rate on a personal, unsecured loan for up to a 60-month term and a maximum loan amount of $5,000. This loan is designed to cover the costs of structural home repairs to restore basic livability or replacement of major appliances. Cross Valley FCU, Wilkes-Barre, Pa., worked with the American Red Cross to prepare its branches as collection sites for cleaning supplies and monetary donations, according to the PCUA (Life is a Highway Sept. 15). On Monday afternoon, Cross Valley FCU staff visited affected areas and offered food and water to those helping with clean-up efforts. M-C FCU, Danville, Pa., formed volunteer groups to help clean up homes of members and residents in the Lewisberg, Bloomsburg and Danville areas. The credit union is also accepting donations for the American Red Cross and flood victims. People’s Choice FCU, Duryea, Pa., is accepting cleaning supplies and donations for distribution to needy families in the community. “While Irene may be long gone, the damage that remains is significant,” said Paul Gentile, president/CEO of the New Jersey Credit Union League, Hightstown, N.J. “Thousands of New Jersey residents have been displaced because of severe flooding. Implementing CUAid is a testament to the credit union spirit and reflects credit unions’ willingness to help those who need it most.” Credit union supporters in every state can donate through a secured website that accepts credit cards and wire transfers. CUAid is the only program of its kind through which credit union employees, volunteers, and members and credit unions and credit union organizations nationwide can contribute directly to support other credit union people. NCUF will coordinate with the credit union leagues in the disaster area to distribute money to affected credit union employees and members. CUAid was developed by NCUF in cooperation with state credit union foundations, state credit union leagues, and the Credit Union National Association’s Disaster Preparedness Committee in 2006. In 2011, NCUF has raised over $250,000 in disaster relief donations that were disbursed as grants to credit union employees and members who suffered losses from tornadoes in Alabama and Missouri and from flooding in North Dakota. (See related story: “Dakota flood victims delivered $36K from CUAid.”)

CU System briefs (09/15/2011)

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* MADISON, Wis. (9/16/11)--Wisconsin credit unions and affiliated industry partners contributed $50,000 million in 2011 to the state's
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Children's Miracle Network Hospitals. Of that $15,000 will go to Children's Hospital of Wisconsin, Milwaukee; $15,000 to the Gundersen Lutheran Medical Center, La Crosse; and $20,000 to St. Joseph's Children's Hospital, Marshfield. The money was donated through the Credit Union Cherry Blossom Ten Mile Run, held in April in Washington, D.C. CUNA Mutual Group is one of the lead sponsors of the run. Others include the Credit Union National Association, Fiserv, Credit Union Executives Society and the National Credit Union Foundation. Credit unions have made the children's hospitals their charity of choice through Credit Unions for Kids. From left are Carrie Williams, Sheila McNeal and Holly Fearing, all of CUNA Mutual Group; U.S. Rep. Tammy Baldwin (D-Wis.), honorary co-chair of the run held in April; Derick Stace-Naughton, CUNA Mutual; Tom Liebe and Mark Bender, both of the Wisconsin Credit Union League; and Christopher Roe, CUNA Mutual, who serves on the board of Children's Miracle Day. (Photo provided by CUNA Mutual Group) … * FARMERS BRANCH, Texas (9/16/11)--The Texas Credit Union Foundation's (TCUF) 14th annual golf tournament during the Texas Credit Union League's Leadership and Marketing Conference in San Antonio, generated roughly $90,400, a record amount raised to help TCUF provide resources for financial education initiatives and educational grants and scholarships for Texas credit union staff and volunteers. The tournament hosted 136 golfers and 43 sponsors, along with dozens of volunteers. Title sponsor Vantiv enabled TCUF to feature a Helicopter Ball Drop. Participants purchased golf balls in advance, which were dropped from a helicopter over the golf course. The ball that landed closest to the hole won. Border FCU's Ruben Cisneros won the drop (LoneStar Leaguer Sept. 15) … * BRIGHTON, Mich. (9/16/11)--David A. Snodgrass has been named CEO/President of Lake Trust CU, Brighton, Mich., announced the $1.6 billion asset credit union's board Wednesday. The appointment is effective in late October. He succeeds Stephan L. Winninger and William Thiess. Winninger and Thiess had headed the credit union since their credit unions--NuUnion and Detroit Edison CUs--merged in April 2010. Snodgrass served as executive vice president and chief strategy officer at Affinity FCU, a $2 billion asset credit union in Basking Ridge, N.J., where he provided leadership in marketing/e-commerce, human resources, Affinity Learning Institute, external and political affairs, financial education, strategy and innovation, and business intelligence functions. He is active in several national credit union organizations …

CU System briefs (09/14/2011)

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* WASHINGTON (9/15/11)--Credit unions can celebrate the richness and diversity of their communities by scheduling a special lineup of programs in observation of Hispanic Heritage Month (HHM), which kicks off today and continues through Oct. 15. The month celebrates citizens whose ancestors came from Spain, Mexico, the Caribbean and Central and South America. HHM was enacted into law on Aug. 17, 1988 (Public Law 100-402). It began in 1968 as Hispanic Heritage Week and was expanded in 1988 to cover the 30-day period, which includes independence days for several Latin American countries, Mexico and Chile,as well as Dia de la Raza (Columbus Day) on Oct. 12. According to the Texas Credit Union League, actions credit unions can take include: informing members and community of special events on their website; getting educated on different cultural celebrations and the makeup of their Hispanic community; partnering with a local organization or event to support an HHM activity, and informing the Hispanic community of the credit union's efforts to meet their financial needs (LoneStar Leaguer Sept. 14) … * LIVERMORE, Calif. (9/15/11)--Harold Roundtree has been named president/CEO of UNCLE CU, a $235 million asset credit union based in Livermore, Calif., effective Sept. 6. Roundtree brings more than 22 years of senior executive management experience in the financial services industry. He most recently served as the senior vice president of the retail banking division of Technology CU, San Jose, Calif. There he administrated and managed enterprise-wide projects consisting of 10 financial centers; mortgage originations; commercial, real estate and consumer lending; private banking; business banking; business development; and call centers. He also served in various leadership roles such as director in the loan services division at World Savings and vice president of First Interstate Bank …

Mentor program inspires second round at CUANY

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ALBANY, N.Y. (9/15/11)--A mentorship program partnership between the Credit Union Association of New York's (CUANY) Young Professionals Commission (YPC) and the Filene Research Institute's Crash Network has proved so successful that CUANY announced it will return for a second round in the program. The partnership was launched earlier this year with New York being the first state to adopt the mentorship project as an association-sponsored program, said CUANY. The program paired 10 seasoned industry leaders and young protégés from various sized credit unions. The mentorship process was conducted through weekly e-mails and twice-monthly in-person meetings or phone calls for six months. "Mentoring is the most rewarding part of my job," said Michelle McCourt, executive vice president and chief financial officer of $72 million asset Bridgeway FCU, Poughkeepsie, N.Y. "The Crash mentor program caught my interest since it involved working with up-and-coming young credit union professionals who really want to develop the skills necessary to advance," she said. Both mentors and mentees benefitted from the partnership. Mentors gleaned insights needed to engage and cultivate tomorrow's credit union leaders. Young professionals gained insights as well as skills and tricks of the trade that otherwise would take years to obtain, said CUANY. "The mentorship program provided me the opportunity to see my career through a different set of eyes," said Jo-Anne Harvey, a junior financial analyst with $1.69 billion asset NEFCU, Westbury, N.Y. Harvey is a member of YPC and McCourt's mentee. "Having been paired with a successful mentor who worked her way through the ranks was inspiring. She was able to offer me an unbiased opinion of what I needed to do both professionally and personally to continue growing within the credit union family." CUANY created the program to respond to career development needs of the state's young credit union professionals. Filene's Crash Network facilitated the program by hosting the initial introductory webinar, supplying a timeline and offering support during the program. "The mentorship program has proven to be a great vehicle to promote learning, build knowledge and connect people within the credit union industry," said Allison Barna, CUANY's community development coordinator. "It's also a way for credit unions to look to the future." She said the program will start a second six-month round of mentorships shortly.

Missouri CUs to Congress We stand ready to help small biz

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ST. LOUIS (9/15/11)--After a summer of meetings with federal lawmakers around the state, the Missouri Credit Union Association (MCUA) hand delivered to the Missouri delegation on Capitol Hill letters that pointed out banker hypocrisy and highlighted a recent Forbes editorial in favor of member business lending (MBL) legislation. The Forbes editorial endorses credit unions' efforts to raise their MBL cap to 27.5% of assets from 12.25% and explains how banks are standing in the way of giving entrepreneurs choices in financing their businesses. At the same time, Missouri banks are receiving millions of taxpayer dollars to encourage small business lending, said MCUA (The Missouri difference Sept. 13). During the last week of August, four Missouri banks received $117.1 million out of the $767 million disbursed from the U.S. Treasury Department. This includes $57.9 million for Great Southern Bancorp Inc., Springfield; $23 million for Liberty Bancshares Inc., Springfield; $20 million for The Landrum Co., Columbia; and $16.2 million for Liberty Bancorp Inc., Liberty. The funds are from the $30 billion Troubled Asset Relief Program II earmarked in Congress in 2010 to spur lending to small businesses. "In contrast, Missouri credit unions stand ready to use their own money to do the same thing," pointed out MCUA President/CEO Mike Beall. Beall's letter urges Missouri's members of Congress to support S. 509 and H.R. 1408--the Small Business Lending Enhancement Act, which would raise the cap to 27.5%. "Please help us provide stimulus with private sector funding by empowering credit unions to make more MBLs," Beall said. Missouri credit unions continue to met with the entire Missouri federal delegation to surge support for raising the cap. The Credit Union National Association (CUNA) continues to advocate lifting the MBL cap, most recently as a small provision that could be added to President Barack Obama's larger plan to reinvigorate the ailing economy via the American Jobs Act (News Now Sept. 14). CUNA says that lifting the cap will enable credit unions to inject $13 billion in loans to small businesses, helping generate as much as 140,000 new jobs the first year, without cost to the taxpayer. CUNA-sponsored ads touting the economic promise and bipartisan appeal of lifting the MBL cap will begin running next week in Capitol Hill newspapers and the Washington , D.C., regional edition of The Wall Street Journal. They will run into October. Also, credit union delegations and their leagues will be in Washington the next six or seven weeks for "Hike the Hill" visits to discuss the measures with their lawmakers.

Minnesota foundation sets free fin ed webinars

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ST. PAUL, Minn. (9/15/11)--The Minnesota Credit Union Foundation--in conjunction with the University of Minnesota Extension--will host free webinars this fall to help make financial education efforts more effective. Webinars are available to anyone who works to improve the financial literacy levels of students. Entitled “Connecting the Dots: Financial Education … Financial Capability,” the webinar series is intended to increase educators’ knowledge and competency in financial topics, making them better equipped to teach the subjects and improve the financial management skills of young adults. Webinars will be offered in “live” format and archived online for future use in training organizations and school districts. Registered participants gain access to the archive and all online resources used during the webinar. All webinars are 3:30 p.m. to 5:30 p.m. (CT) Wednesdays. Registration deadlines are one week prior to the scheduled date. Session dates and topics include:
* Oct. 12: Pedagogy, culture, poverty, National Endowment for Financial Education High School Financial Planning Program curriculum, introduction to competencies; * Oct. 19: Financial planning, budgeting; * Oct. 26: Investing, credit and debt; and * Nov. 2: Keeping your money safe and secure, insurance, careers.

Wisconsins Nicolet CU to merge into Ripco CU

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RHINELANDER, Wis. (9/15/11)--Ripco CU, a $77.8 million asset credit union in Rhinelander, Wis., said on its website it has been granted approval from the National Credit Union Administration (NCUA) and the Wisconsin Department of Financial Institutions/Office of Credit Unions to acquire the assets of Nicolet CU, a $20 million asset credit union in Eagle River, Wis. The merger is scheduled to occur Sept. 30. In the period prior to that date, Nicolet has a formal management agreement allowing Ripco executives to manage the operations of Nicolet. Ripco management staff is at the Eagle River location, working with existing Nicolet staff to ensure a smooth transition once the merger is finalized. As of Oct. 1, the Nicolet CU will operate as Ripco CU. Nicolet members will see no interruption in service, and their account numbers, checks and plastic cards will remain unchanged for the time being, Ripco said. Deposits at Nicolet will continue to be federally insured for at least $250,000 by NCUA.

CU cross-sells with alternative to banner ads

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YORKTOWN, Va. (9/15/11)--1st Advantage CU of Yorktown, Va., decided to try a different approach to cross-sell products after it realized no one was clicking on the banner ads it displays within online banking sessions. 1st Advantage boosted conversion rates for one of its products to nearly 10% in a test after it began presenting targeted questionnaires to members as they finish their online banking sessions (The Daily Exchange Sept. 13 and American Banker Sept. 12). The $537.5 million asset credit union saw a large rise in conversions once it made the application a pop-up upon log out, Jim Craig, vice president of marketing, told the Banker. The credit union tested KulaX, a product that presents three questions targeted to a specific user and designed around a specific product. The questions only are presented when a user logs out. 1st Advantage tested KulaX for several products in April and May, including auto loans, debit cards and mortgages. It plans to officially launch KulaX by the end of the month. During the test period, 22,000 of the credit union's 57,000 members visited its online banking site. 1st Advantage identified 275 who had the debit card but were not using it. Using KulaX, the credit union created a three-question online form and paired it with a cash incentive of $10 if the member agreed to use the card for 10 transactions. Of the members who received the offer, 154 viewed the survey and 25 completed it. Fourteen agreed to take the offer. The credit union’s debit card showed the most improvement in conversions. By knowing who accepted an offer and who didn’t, the credit union could retarget it, and avoid saturating users with offers they repeatedly turn down, Craig said.

FBI reports 74 CU robberies in second quarter

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WASHINGTON (9/15/11)--The Federal Bureau of Investigation (FBI) recorded 1,023 federal crimes such as robberies and burglaries in U.S. financial institutions during second quarter 2011, according to FBI's Bank Crime Statistics report. Among them: 1,007 robberies, including 74 reported at credit unions. In addition to the credit unions, 909 commercial banks, four mutual savings banks, and 20 savings and loan associations were robbed during the quarter. Burglaries for the period totaled 15, including two at credit unions. One larceny was reported at a bank. Loot totaling $7.82 million--including $7.8 million in cash--was taken in 91% of the incidents. More than $1.8 million was recovered in 23% of the incidents and returned to the financial institutions robbed, said the report. The crimes occurred most frequently on Friday, and the most frequent time frame was between 9 a.m. and 11 a.m. Four percent of the incidents involved acts of violence such as discharging firearms, assaults and hostage situations. They resulted in 31 injuries, one death and three persons taken hostage. Fifteen employees and four customers were among those injured. The person killed was a robbery suspect. Those statistics were not broken down by type of financial institution. Demand notes were the most common method of robbery. Most of the incidents occurred in the Southern U.S., which reported 373 incidents. Not all crimes are reported to the FBI. The statistics, recorded as of Aug. 2, involve only financial institution crimes reported to the bureau.

Pa.s small-dollar loans save consumers nearly 17M

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HARRISBURG, Pa. (9/15/11)--Nearly 50,000 Credit Union Better Choice loans have been issued to Pennsylvania credit union members for short-term cash needs since the program launched in 2006, according to the Pennsylvania Credit Union Association (PCUA). The 81 participating credit unions statewide have issued 49,971 loans, totaling more than $23 million since the program’s inception. It has saved borrowers nearly $17 million over using a traditional payday lending product. The Credit Union Better Choice loan is a payday lending alternative product where credit unions offer borrowers a 90-day loan with a $500 limit. Reasons cited for the loan’s purpose have included Christmas gifts, taxes, school clothes and funeral expenses. Credit Union Better Choice was developed through a collaboration of PCUA, the Pennsylvania Treasury Department and the Pennsylvania Department of Banking. During the first six-month cycle (Jan. 1 through June 30), 6,780 loans totaling $2.9 million dollars were issued. Borrowers could also place $290,000 into savings accounts during the period. “The continued increase in loans shows that consumers still need cash quick,” said Jim McCormack, PCUA president/CEO, adding that “every Pennsylvanian should be afforded access to loans at reasonable fees and rates." A typical $500 payday loan costs consumers $15 for every $100 borrowed for two weeks, or roughly $450 over 90 days, said PCUA. 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, the consumer has $50 in a savings account. Also, the program builds upon this new wealth-building component by providing financial education to consumers to help them make better informed financial decisions. Pennsylvania consumers saved an average of 80 cents in loan fees and costs for every dollar borrowed through Credit Union Better Choice rather than through a typical loan from a payday lender, PCUA said. That translates into nearly $17 million that consumers kept in their own pockets by using credit unions that offer the loans.

CU duo records ICU Day song

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MADISON, Wis. (9/15/11)--The credit union music duo The Disclosures have released a new single, “Building a Better World,” for International Credit Union (ICU) Day on Oct. 20. The song title mirrors this year’s ICU Day theme, “Credit Unions Build a Better World.” The song spotlights aspects of both credit unions and the cooperative movement as a whole. The first verse points out the worldwide connection that cooperatives share. The lyrics then call attention to the benefits of credit unions, from volunteering for the board of directors to loans that help businesses and farms grow. “It captures the spirit of the day and should excite credit union staff and members alike about being a part of this movement of building a better world.” said Joanne Sepich, CUNA’s ICU Day coordinator. The ICU Day musical endeavor is not a Disclosures-exclusive effort. Credit unions worldwide can submit videos of their members and staff singing “Building a Better World.” Cuts from the submissions will be compiled into a music video for the song that will be posted on YouTube. To submit a video, use the link. The deadline for video submissions is Sept. 21. The finished video and song will be announced in the ICU Day Update e-newsletter. The Disclosures are an acoustic thrift-rock duo based in Madison, Wis., consisting of Chad Helminak and Christopher Morris. Helminak is the Web and member development strategist at the Wisconsin Credit Union League. Morris is director of communications for the National Credit Union Foundation. The duo performs classic rock n’ roll covers in addition to their original tunes that delve into topics of life, love and the cooperative spirit.

Data breaches place vacationers cards at risk

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MADISON, Wis. (9/15/11)--Two recent hacking incidents underscore the need for credit unions and their vacationing members to monitor their accounts for suspicious activity. Hackers accessed two computer stations owned by Vacationland Vendors of Wisconsin Dells, Wis., putting about 40,000 credit or debit card users at risk (WISCNEWS.com Sept. 14). The computers were at arcades in Wilderness Resorts in popular resort towns Lake Delton, Wis., and Sevierville, Tenn. The company owns and operates 11 arcades. “Based upon its investigation to date, Vacationland Vendors reasonably believes that a computer hacker improperly acquired credit card and debit information,” a message on Vacationland Vendors website states. “This incident did not involve an internal security issue within the Wilderness Resort. Vacationland Vendors has learned that other businesses just like its own have been affected by this computer hacker.” The company was alerted to the breach, which occurred March 22, as a result of calls from one or two customers, according to Evan Zeppos, a spokesman for Vacationland Vendors. Although 40,000 credit or debit card users’ data were stored on the terminals, fewer than 20 individuals were believed to be impacted, Zeppos said. The Vacationland Vendors website advised consumers who have used their credit card or debit card at the Wilderness Resort locations in Wisconsin or Tennessee from Dec. 12, 2008 through May 25, 2011 to watch for any unusual activity on statements or accounts or suspicious items on their bills. Card issuers should be informed of the incident and consumers should place a fraud alert on their consumer credit file, the website said.

Study Small biz hit by fraud change finance behavior

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PLEASANTON, Calif. (9/15/11)--Small businesses are experiencing more identity fraud, which can affect credit unions serving them in two ways: through losses stolen from the business owner's accounts with the credit union, and through lost revenue after the business owners adjust their financial habits as a result of the fraud, said a recent study. Small businesses are attractive to fraudsters because they conduct a myriad of transactions that often span both business and personal accounts, said Javelin Strategy & Research in a report issued recently on how small business fraud impacts financial institutions' revenues and retention of business. Last year, 4.1% of small businesses were hit with $8 billion in fraud. That compares with 3.5% of consumers hit by identity theft fraud. Financial institutions, merchants and other providers absorbed at least $5.42 billion of that loss, while the cost to the business-owner victims totaled $2.61 billion, said Javelin. The mean amount of the small business fraud--the total dollar amount divided by the number of victims--was $4,851 for small businesses, with the mean out-of-pocket expense for the victim at $1,574. Identity fraud cost consumers $631 out of pocket during the same time. Small business owners "face significant financial losses as well as other issues as a result of fraud," said Philip Blank, senior analyst risk, fraud and security at Javelin. They have "higher legal costs and longer timeframes for resolution of fraud than consumers." They also do not have the same zero liability fraud guarantees that online banking consumers receive from their financial institutions. Credit unions, banks and credit card companies who partner with small businesses that become victims of fraud not only absorb billions of dollars in financial losses, but also lose the small business as clients, the Javelin report said. As a direct result of a fraud, more than 20% of small business owners switched credit card issuers, and nearly the same percentage switched financial institutions. Javelin also reported that about 32% refused to bank online and reverted back to writing checks, which drove up financial institutions' costs. "These changes create a significant amount of churn and lost revenues for financial institutions and issuers, as small business owners tend to have a higher transaction rate than the general consumer and often generate significantly more fees and charges for the financial institution or issuer," said Javelin. Because credit unions and card issuers have a vested amount, Javelin recommended that financial institutions and card issuers offer more real-time and comprehensive alerts for the business's credit, debit and demand deposit accounts, as well as fraud avoidance software, identity theft protection and credit monitoring services. "Selling anti-fraud and security services not only helps small business owners prevent fraud, but also generates revenue for the financial institutions and issuers," said James Van Dyke, president and founder of Javelin. Here are some of the schemes that recently targeted small businesses, according to The Salt Lake City Tribune (Sept. 12):
* Con artists rented an office in the same building as a California law firm and used the firm's address, but with a different suite number, to buy $70,000 worth of computers and office furniture delivered on the law firm's line of credit. The thieves simply reloaded the furniture into a truck and disappeared. * Thieves use or alter information from business registrations with state governments to open lines of credit so they can buy goods that can be easily resold for cash. In Colorado, scam artists from California revived the Secretary of State registration of a defunct company and used the name of the former owner as an officer, then took out lines of credit, ordered goods, and disappeared with what they bought on the stolen credit. * Thieves targeted "big box" stores and computer companies to buy goods with stolen credit card numbers or lines of credit. In the case of a cell phone company, they bought phones on credit. * In Pennsylvania, thieves placed malicious software on a school district's computer system and used information from the breach to steal $700,000 from the district's bank accounts in 74 transactions over two days.

CU System briefs (09/13/2011)

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* ST. LOUIS (9/14/11)--Gateway Metro FCU gained 70 new youth accounts in August through its school branch program. The St. Louis-based credit union attracted the accounts by attending school registration dates, parent nights and other events at the five schools where it has branches. "This is a great start to the school year," said Joyce Sieber, Gateway Metro's school branch coordinator. "We look forward to teaching students about money, credit unions and how saving will make a difference in their lives." Employees of the $170 million asset credit union made speeches at the events, highlighting the importance of financial education and the school branch program. Gateway Metro operates elementary school student-assisted credit union branches at Our Lady of Guadaloupe School, St. Ferdinand School, and Christ Light of the Nations School. It also runs student-assisted branches at Trinity Catholic High School and Gateway Institute of Technology High School … * PHILADELPHIA (9/14/11)--American Heritage FCU helped viewers of NBC 10's "News Today" get their morning started Monday by participating in the station's "Morning Wake-Up Call." The spots aired at 5:45 a.m. and 6:45 a.m. and were filmed on location Sept. 2 at the $1.08 billion asset credit union's Philadelphia headquarters. View the wake-up call video … * FORT WORTH, Texas (9/14/11)--The Fort Worth (Texas) Chapter of Credit Unions helped raise $44,000 for Tarrant County Cook Children's Hospital, part of the Children's Miracle Network Hospitals, at the chapter's Second Annual Shake Rattle & Bowl fundraiser Aug. 16. About 385 bowlers and cheerleaders from multiple credit unions in the area participated . In addition to bowling, the event featured a silent auction. Since 1986, credit unions have partnered with the Children's Miracle Network Hospitals through the Credit Unions for Kids program. The funds help support new facilities, equipment, research programs, patient services, special patient needs and health education programs benefitting 17 million children a year …

Man sentenced to 30 years for heist kidnapping tellers

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BILOXI, Miss. (9/14/11)--A Mississippi man was sentenced to 30 years in prison in connection with an armed robbery in 2008 at a credit union, in which two tellers were kidnapped. Daniel George Corring, 22, pleaded guilty to one count of armed robbery and two counts of kidnapping in a Circuit Court in Biloxi. The holdup occurred April 18, 2008 at a Waveland branch of Biloxi-based Keesler FCU. About $68,584 was taken in the heist, but the amount was recovered (SunHerald.com Sept. 12). The robber was allegedly armed with several weapons and arrived on foot. He took two tellers hostage and forced them into one teller's car to escape. After a high-speed chase, the card went into a ditch, and Corring was arrested. Neither teller was harmed (News Now April 22, 2008). Circuit Judge John Gargiulo sentenced Corring to 50 years for armed robbery and suspended 20 years of it, as well as 30 years for each count of kidnapping, to run concurrently with the 30-year robbery sentence, said the SunHerald.com.

Skimming methods changing says e-crimes task force

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SEATTLE, Wash. (9/14/11)--Crooks' methods of skimming card numbers at ATMs are changing, if the arrests of three men in Seattle, Wash., are any indication. Credit unions will want to alert members and staff about the new tactics. Card skimming is the unauthorized capture of magnetic stripe information by modifying hardware or software of a payment device or by using a separate card reader that sends account information to the scammer, according to the ATM Industry Association (Decatur Tribune Sept. 13). The Electronic Crimes Task Force of the U.S. Secret Service, which investigated card fraud cases leading to a number of recent arrests, said that most of the suspects used several tactics (American Banker Sept. 12), including:
* Attaching devices to the door entry card readers on financial institutions' ATM vestibules; * Installing wireless pinhole video cameras to view and record personal identification numbers (PINs); * Attaching "out of service" signs on ATMs so consumers would be forced to use another ATM with the skimming devices; * Keeping lists of ATM locations that were good or not good for skimming; * Spending as long as hour measuring and examining an ATM without conducting a transaction; * Using force to manipulate the face of the machine so it will accept the skimming device; and * Wearing baseball caps pulled down low to obscure their identity.
The Seattle ring was allegedly responsible for nearly $500,000 in losses in at least four states by placing tiny electronic skimming devices--some the size of a postage stamp and capable of holding information from thousands of cards--and pinhole cameras to record customers typing in their PINs (The Seattle Times Sept. 7 and News Now Sept. 13). The Better Business Bureau (BBB) in Chicago says card skimming is becoming a common problem at ATMs and gas stations. BBB advises consumers to:
* Inspect the machine before swiping a credit or debit card to see if there is any new or suspiciously placed camera or unusual signage; * Cover the keypad when entering the PIN; * Choose a financial institution's ATM over a stand alone ATM in public areas; * Change the PIN frequently; * Monitor account statements for suspicious charges and sign up for alerts to be notified for certain kinds of transactions; * Report fraud immediately; and * Use an RFID sleeve to prevent unauthorized access to RFID chips with personal data on credit/debit cards and driver's licenses.

PCUA Board OKs regional iBelong campaign

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HARRISBURG, Pa. (9/14/11)--The Pennsylvania Credit Union Association’s (PCUA) Board approved iBelong 2.0 regional campaigns in each of the seven media markets across Pennsylvania. The iBelong program is a cooperative campaign designed to build awareness of credit unions, and to assist consumers in helping them find credit unions. The campaign is supported by members of PCUA. The regional campaigns will be funded by participating credit unions with financial assistance from the association and its subsidiary corporation, Pacul Services Inc., according to the PCUA (Life is a Highway Sept. 13). The PCUA will continue to maintain the iBelong website and search engine, run Google adwords, Facebook advertising and other online advertising. Television ads will continue unchanged through 2012, while radio and online messaging may be revised by region, the association said. It will conduct regional meetings during the fall to market the campaign for credit unions. Other PCUA board actions taken during last week’s meeting:
* Appointed Todd Cover, CEO, USSCO Johnstown (Pa.) FCU, to a three-year term as a board member for the Pennsylvania Credit Union Foundation. Cover will fill the seat recently vacated by association board Member Paula Nihoff, CEO, HealthCare First FCU, Johnstown. * Approved a pilot program for marketing consulting services for small- to-mid-size credit unions in western Pennsylvania. The program is expected to be rolled out this fall.

CU looking for Verity Mom

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SEATTLE (9/14/11)--Verity CU in Seattle is looking for another “Verity Mom” to blog, to create videos and to connect with other moms as part of the credit union’s marketing strategy. The $367 million asset credit union’s first Verity Mom, Rosemary Garner, won the first online competition in 2009 and then returned for a second year in 2010, said a credit union press release. The credit union is looking for a new voice who will be given a paid part-time blogging position (a $20,000 one-year contract), a laptop computer and a video camera. Because moms tend to make the most purchasing decisions for a family, they usually have the most influence in determining where their children will go for their financial needs, Shari Storm, Verity chief marketing officer, told the publication. The credit union considers its “Verity Mom” to be a multi-generational strategy to retain current members and attract new ones, she added. Verity Mom provides an online place for moms to meet and talk, while also allowing the credit union to ask moms questions to learn more about them, Storm said.

SE Corporate Corporate One sign merger intent

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TALLAHASSEE, Fla. (9/14/11)--Southeast Corporate FCU in Tallahassee, Fla., announced Tuesday it has signed a letter of intent to merge with Corporate One FCU, based in Columbus, Ohio. Southeast Corporate and Corporate One both have national fields of membership, with primary footprints in the Southeast and Great Lakes regions, respectively. “Our objectives in finding a merger partner remain the same as in all our efforts--to protect and preserve member capital, maintain continuity of services, and create long-term value for members,” said Brad Miller, president/CEO of Southeast Corporate. “A partnership with the financial and operational strength of Corporate One allows us to ensure these objectives are met.” “The combination of Southeast Corporate and Corporate One is a natural fit,” said Lee Butke, president/CEO of Corporate One. “This partnership provides for a financially stronger corporate, along with operational efficiencies that will create long-term value for both memberships.” Butke and Miller said the merger plan and thorough due-diligence process is beginning this week. “We expect to move through the process as quickly as possible,” said Miller. “We will have regional meetings with our members to discuss the benefits of this strategic partnership and our progress toward merger.” Southeast Corporate announced in August it would seek a merger partner after it fell short of the $80 million it needed in capital commitments to operate as a stand-alone corporate (News Now Aug. 29).

Texas league to debut Lip Dub on YouTube

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FARMERS BRANCH, Texas (9/14/11)--The Texas Credit Union League debuted its CU Lip Dub during last week’s joint Marketing and Leadership Conference. A lip dub is a music video that combines lip synching and audio dubbing. The CU Lip Dub will be released to the public on YouTube on International Credit Union Day, which is Oct. 20. The Texas league’s lip dub is done to “I’m a Believer,” a Smashmouth cover of the Monkees’ classic song. On Aug. 16, about 100 credit union staff and families from San Antonio gathered in 106-degree heat to make the video. Two local television stations covered the credit union lip dub taping.

CUs providing more flood relief to thousands of CU people

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MADISON, Wis. (9/14/11)--Credit unions are rallying to help thousands of credit union employees and members impacted by the flooding in the North East since Hurricane Irene and Tropical Storm Lee unleashed a series of storms in the region this month. So far, about $21,000 has been raised through the credit union movement's disaster relief site, CUAid.coop, said Christopher Morris, director of communications at the National Credit Union Foundation. The New York Credit Union Foundation, the charitable arm of the Credit Union Association of New York (CUANY), announced Tuesday it has launched a Disaster Relief Fund to help credit union people in its state. "We know that nearly 1,000 credit union employees and nearly 300,000 members live and work in the most impacted areas of the Southern Tier, creating a potentially significant need for financial assistance," said William J. Mellin, CUANY president/CEO. The Southern Tier of the state was underwater for days, said CUANY.
Click to view larger imageAn Empower FCU employee looks down the street at its Johnson City branch, which ultimately was four to five feet underwater.
Click to view larger imageInside an office at Empower FCU's Johnson City branch after flood waters receded. (Photos provided by the Credit Union Association of New York)
Many staff of Endicott, N.Y.-based Visions FCU have lost their homes, according to early reports from the $2.7 billion asset credit union. Albany, N.Y.-based, $2.27 billion asset SEFCU CEO Michael Castellana told the league that while its branches in the Southern Tier were not significantly damaged, the same could not be said for the residences of a number of staff who experienced severe property damage. "I cannot encourage everyone enough to support this fund," said Mellin."Even the smallest donation adds up to support our credit union family, which is still reeling from the devastation." The goal is to raise as much as possible by Sept. 23 to ensure timely distribution. For more information, use the links. In another state that experienced severe flooding, the Pennsylvania Credit Union Association (PCUA) board of directors approved funds for the Pennsylvania Credit Union Foundation to assist flood victims. Joe Wambach, executive director of the foundation, is in the process of surveying credit union damage, PCUA said (Life is a Highway Sept. 13). PCUA also donated $3,000 to CUAid, based on $1,000 donations from the association, from Pacul Services Inc., and the state foundation, to help victims of Hurricane Irene. PCUA, which was forced to close Friday because of flooding of the Susquehanna River in Harrisburg, was expecting full phone and fax service to be restored to its headquarters Tuesday afternoon. Credit unions in the state also were collecting items to help. Tobyhanna FCU, Scranton, is collecting cleaning items at its Scranton and Wilkes-Barre offices for the American Red Cross. UFCW FCU, Wyoming, said its branches are collecting cleaning supplies, personal hygiene items and bottled water as well as holding a Hat, Mitten and Coat Drive for flood victims in the Wyoming Valley area (Life is a Highway Sept. 13). In New Hampshire, Gov. John Lynch Monday accepted a $125,000 donation from Portsmouth-based Service Credit Union on behalf of the New Hampshire Disaster Relief Fund 2011. In his thank you message, Lynch said, "Since I have been governor, New Hampshire has experienced several natural disasters and each time Service CU has led the way in reaching out to help its neighbors" (Targeted News Service Sept. 12). In Massachusetts, the Massachusetts Credit Union League presented $70,000 to the American Red Cross for disaster relief in that state. "Nobody does what the Red Cross does and nowhere near as well. Their ability to respond during a disaster and come out and try to make people's lives whole when they are in the midst of tremendous suffering is just unique," said Rob Kimmett, senior vice president of public relations and marketing at the league. The league raised the funds through its "hope initiative." Credit unions wanting to help credit union staff, volunteers and members in the disaster areas, can give directly through CUAid, or through their state-level credit union foundation. Use the links.

Irish league says governments restrictions hurt borrowers

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DUBLIN, Ireland (9/14/11)--The Irish League of Credit Unions is questioning why government regulators have restricted the lending of nearly 300 credit unions to consumers. The Irish Central Bank has imposed lending restrictions on seven out of 10 credit unions, according to several sources in the sector (The Irish Independent Sept. 13). Credit union members with good credit are being turned down for loans while other members are being forced to turn to moneylenders, credit unions told the newspaper. Some restrictions are based on the total amount a credit union can lend out in any one month, while others limit the amount that can be loaned to an individual member. In the past two years, roughly 70,000 people have joined Ireland’s 409 credit unions to gain access to credit, the paper said. Irish league President Jimmy Johnstone sent a letter to the Central Bank, which said, “The league board, like its member credit unions, is exasperated by the imposition of far-reaching regulatory restrictions, which are directly responsible for credit unions not being able to lend to long-standing, loyal members,” said the newspaper. Members are unable to pay even basic utility bills because credit unions no longer have the means to extend or reschedule members loans, the letter added. Most credit unions have enough available funds to lend to members once a proper evaluation of the members’ ability to repay the loan has been completed, a spokesman for the Irish league told the paper.

Today is Miracle Jeans Day

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SALT LAKE CITY (9/14/11)--Today is Miracle Jeans Day, supporting Children’s Miracle Network Hospitals through Credit Unions for Kids. Individuals or groups can wear jeans to work by making a donation of $5. Credit Unions for Kids is the brand under which America’s credit unions fundraise for Children’s Miracle Network Hospitals. The collaborative effort includes individual credit unions, local chapters, state leagues/associations, two national trade organizations, business partners and several trade publications. Both credit union employees and members can participate in Miracle Jeans Day:
* Credit union employees donate five dollars to the local Children’s Miracle Network Hospital and, in exchange, they are permitted to wear jeans to work. * Credit union members donate a dollar to display their name on a special Miracle Jeans Day paper icon in their credit union’s branch.

1st Advantage FCU to close Fort Story branch

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NEWPORT NEWS, Va. (9/14/11)--1st Advantage FCU, Newport News, Va., will close its Fort Story branch Sept 30. The decision to close the branch was based upon several factors, including the steadily decreasing volume of transactions, the cost to operate the branch and the control of the base changing from the Army to the Navy. The ATM at Fort Story will stay open in an announcement on its website. To serve members at Fort Story, 1st Advantage has 10 other branches and participates in the Credit Union Service Centers shared-branching network.

Raddon recognizes Top 20 CUs performance

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GLASTONBURY, Conn. (9/14/11)--Raddon Financial Group (RFG), a provider of research-based solutions to financial institutions and a strategic business unit of Open Solutions Inc., presented its Crystal Performance Awards at its annual CEO Forum last month to high-performing credit unions in two asset classes: above $500 million and below $500 million in assets. The awards recognize credit unions that achieve top ranking on a scorecard measuring growth, income, efficiency and margin management. More than 500 credit unions were evaluated in this year’s ranking. Each award recipient ranked among the top 2% or 3% of all credit unions analyzed by RFG for two consecutive reporting periods. The awards were presented to an invitation-only CEO Forum, Aug. 17-19 in Dana Point, Calif. “These organizations have consistently performed at a high-level and exhibit operational excellence in managing efficiency,” said Bill Handel, RFG vice president of research and product development. “Credit unions that receive this accolade tend to perform well despite the interest rate environment and challenges in their local economies.” Louis Hernandez, Jr., chairman and CEO of Open Solutions Inc., delivered the keynote address Collaboration: Leveraging the Power of Community. Hernandez emphasized how credit unions can improve the local communities they serve by collaborating with each other, their partners, and their members. To be eligible for the award, a credit union must participate in an in-depth analysis of its financials, sales, products and member household relationships through the CEO Strategies Group. This year’s recognition was based on the credit union’s 2010 performance. For a full list of winners’ names, use the link.

Regulator Mid American CU in charge of Enterprise CU

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WICHITA, Kan. (9/14/11)--Wichita, Kan.-based Mid American CU on Friday took over the day-to-day operations of Enterprise (Kan.) CU, which was put into conservatorship last month by the Kansas Department of Credit Unions (KDCU). John Smith, administrator of KDCU, which acted as conservator of the $1.8 million asset Enterprise, ordered a fraud audit after an examiner found an accounting irregularity, he told the Abilene Reflector-Chronicle (Sept. 13). K-State FCU, Manhattan, had agreed to temporarily take over Enterprise's operations in August while the department looked for a credit union that used similar computer systems to Enterprise's systems. Jim Holt, president/CEO of the $167.3 million asset Mid American CU, said the goal now is to supply personnel and ensure Enterprise's members receive services. He told the publication his credit union is assisting on a cost basis and does not intend to make a profit. Enterprise, which has about 577 members, was chartered in 1949 to serve employees of the ABB Raymond Co. Its field of membership later expanded to serve residents in Dickinson County, said the article.

Australia deposit insurance to drop to 250K in Feb.

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CANBERRA, Australia (9/13/11)--Australia's government has extended the time its deposit guarantee covers credit union and bank deposits up to $1 million by four months--to February, at which time a new permanent cap of $250,000 (US$288,000) per person per financial institution will take effect. The $1 million cap, which Australia's government introduced as an emergency measure to help smaller financial institutions weather the global financial crisis that hit three years ago, had been set to expire in October (The Age Sept. 12). It had been under review since May. Treasurer Wayne Swan noted that even at the new cap, the plan still would protect savings held in 99% of deposit accounts in Australian-licensed credit unions, banks and building societies, and it would protect 82% of the value of those deposits. A cap of $100,000 would not be unusually low and would cover 97% of accounts by number and 65% by value, said a Treasury paper released in May. Australia's deposit cap is less than the U.S. deposit insurance limit, but more than double programs in Japan and Canada. The change also will provide longer protection for existing term deposits, which will be protected at the $1 million level until Dec. 31, 2012. After that, the $250,000 cap will apply. The new plan will not apply to deposits sitting in branches of Australia financial institutions overseas but will apply to deposits held by foreign banks that hold an Australia-based banking license.

Speakers set for this weeks NASCUS state summit

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CHICAGO (9/13/11)--The National Association of State Credit Union Supervisors (NASCUS) hosts credit union system leaders, state and federal regulators and dual chartering supporters at its annual State System Summit in Chicago Wednesday through Friday. Illinois Gov. Pat Quinn will address the group during a luncheon on Thursday. Speakers also will include:
* Debbie Matz, chairman of the National Credit Union Administration (NCUA); * Michael Fryzel, NCUA Board member; * Steve Antonakes of the Consumer Financial Protection Bureau; * State regulators Gavin Gee of Idaho, Bill Haraf of California, Ed Leary of Utah, and Roger Little of Michigan (retired); * Jeff Post, CEO of CUNA Mutual Group; and * Bill Klewin, CUNA Mutual compliance expert.
"The discussions at our summit will focus on how regulators and credit unions can continue to operate and to thrive in this increasingly complex economic environment," said NASCUS President/CEO Mary Martha Fortney, who indicated participants would discuss ideas on "how regulators and credit unions can work together to preserve safety and soundness and promote innovation." Other topics include economic recovery, the state of credit union examination, capital reform, consumer protection, systemic risk and how credit unions are performing in today's challenging economy. State regulators and NCUA will also meet for their annual Interagency Dialogue on Friday, and the NASCUS Credit Union Advisory Council will conduct an issues briefing on topics such as enterprise risk management and lessons learned from credit union failures. The week will close with NASCUS' Illinois Directors College, focusing on Illinois credit union directors' understanding of statutory, fiduciary and regulatory responsibilities. NASCUS will present its Pierre Jay Award on Wednesday. Its business meetings began Monday and its committees meet today.

St. Louis CUs outshine area banks on loans

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ST. LOUIS (9/13/11)--In contrast to area banks, St. Louis credit unions have increased the amount of loans issued during the past two-and-a-half years. As of June 30, there were 44 St. Louis credit unions that had issued $3.46 billion in outstanding loans--$325 million and 10.3% more than loaned at the end of 2008, according to a Missouri Credit Union Association (MCUA) report (St. Louis Business Journal Sept. 9). Commercial banks based in St. Louis made 30% fewer loans during the same period--roughly $20 billion during the first half of this year, compared with $30 billion at the end of 2008, the Journal said. Eight of the 20 biggest St. Louis-area credit unions posted double-digit lending gains during the period. They include:
* Alliance CU, $185 million in assets, based in Fenton, Mo., up 30.2%; * First Community CU, $1.73 billion in assets, based in Chesterfield, Mo., up 14.5%; and * Anheuser-Busch Employees CU, $1.31 billion assets, based in St. Louis, up 10.1%.
Although St. Louis bankers admit their lending is down, they say it is because of regulatory restrictions and a lack of demand, rather than an unwillingness of banks to make loans, the Journal reported. Banks are often repeating the “mantra” of regulatory tightening and lack of demand, while in reality they are worried about profitability, Mike Beall, president/CEO of the MCUA, told the Journal.

Some Massachusetts CUs close to MBL cap cutoff

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BOSTON (9/13/11)--Some Massachusetts credit unions about to hit their member business lending (MBL) caps are looking to pending federal legislation to raise the cap limit to allow them to lend more to small businesses. Digital FCU, Marlborough; Webster First FCU, Worcester; and Millbury (Mass.) FCU are all close to their caps (Worcester Business Journal Sept. 11). The Credit Union National Association (CUNA) and credit unions are pressing Congress to increase credit unions’ MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said. CUNA and credit unions also have urged President Barack Obama to include credit unions in the federal jobs bill he was expected to release last night. Credit unions don’t want to have to cut off funding to small businesses or turn businesses away just because of the low cap ceiling, Daniel Egan, president of the Massachusetts Credit Union League, told the Journal. One credit union said its lending staff calculates its loan-to-assets ratio every day to make certain it doesn’t exceed the cap. Several credit union leaders and industry executives testified in favor of the cap increase before the Senate Banking Committee this past summer.

Two Maryland CUs to merge

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LAUREL, Md. (9/13/11)—The National Credit Union Administration has approved the merger between Market USA FCU, with $92 million in assets, Laurel, Md., and National Capital FCU, $7 million in assets, Landover, Md., with Market USA continuing as the ongoing financial institution. When the merger is finalized at the end of the month, Market USA will have nearly nearly 22,000 members (Washington Business Journalvia The Washington Post). It is the second merger of two Washington-area credit unions in less than a month. Last month, Apple FCU, Fairfax, Va., absorbed Synergy One FCU, Manassas, Va. to create a $1.35 billion asset institution (News Now Aug. 16).

Texas experts CUs cant ignore growing Hispanic market

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FARMERS BRANCH, Texas (9/13/11)--Texas credit unions need to be aware of the evolving nature of the state’s population--especially Hispanics--to effectively meet the needs of a more diverse community, Texas demographer Lloyd Potter told credit union leaders at the Texas Credit Union League’s (TCUL) Leadership Conference & Expo last week in San Antonio. Texas’ population increased 4.3 million since the 2000 census, to 25.1 million, Potter said. Roughly 90% of that growth came in counties around the major urban centers, census data shows. Of that 4.3 million, 2.8 million--65%--are Hispanic, Potter said (LoneStar Leaguer Sept. 12). “Certainly a number of those are young children, and the Hispanic population is younger, so mortality rates are low, many are in their child-bearing years and fertility rates are higher,” Potter said. Sometime in the next five to 10 years, there will be more people of Hispanic descent in Texas than there are non-Hispanic whites, he said. “If you look at kids 18 and younger, there are already more Hispanics than non-Hispanic whites,” Potter said. “And the rate of natural increase [through births] in the non-Hispanic white population isn’t even at replacement value.” “Texas is a Hispanic state, and businesses have to embrace this market if they want to survive,” Potter continued. “Without question, the opportunity is there.” Warren Morrow, president/CEO of Iowa-based Coopera Consulting, told the attendees credit unions may be reluctant to serve this market, because they perceive:
* Financial risk; * Compliance risks; and * Reputational risks--not knowing what to do, where to start; how to do it.
The Hispanic Opportunity Navigator (HON), an assessment tool developed by Coopera Consulting that provides credit unions a customized roadmap for serving the Hispanic community, is helping credit unions be successful, Morrow explained. TCUL partnered with Coopera Consulting in 2009, to make the HON available to all Texas credit unions. Before Texas credit unions can earn TCUL’s Juntos Avanzamos (Together We Advance) Hispanic outreach designation, they must complete the HON. Through the Richard L. Ensweiler Hispanic outreach fund, TCUL provides Texas credit unions grants to help cover the cost of the HON.

Second-quarter delinquencies drop 22 at Kansas CUs

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TOPEKA, Kan. (9/13/11)--Loan delinquencies fell 22% at Kansas state-chartered credit unions during the second quarter, compared with delinquencies during the same time last year, according to the Kansas Department of Credit Unions (KDCU). Delinquencies dropped 22% to $27.7 million from $36.6 million in second quarter 2010. Assets and loans grew at 80 state-chartered credit unions, according to the second-quarter 2011 report from the KDCU. Total assets increased to $4.19 billion from $3.89 billion in second-quarter 2010, a nearly 8% increase. Total loans rose nearly 6% to $2.77 billion from $2.62 billion in second quarter 2010. The average net-worth- to-tota-assets ratio for Kansas state-chartered credit unions was 10.76% as of June 30, compared to a ratio of 10.60% as of March 31 and a ratio of 10.69% as of June 30, 2010.

Robyn Young elected to CUANY board

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ALBANY, N.Y. (9/13/11)--Robyn Young, CEO of Great Erie FCU, has been elected to the Credit Union Association of New York’s Board of Directors. Young joined $58 million asset Great Erie FCU, Orchard Park, N.Y., as chief financial officer in 2003 and was promoted to CEO a year later. Prior to joining Great Erie FCU, Young was with Riverside CU, Buffalo. She also serves as treasurer of the association’s Buffalo Chapter. Young serves as a trustee for the New York Credit Union Foundation and is active in several community organizations.

PCUA CUs recovering from floods

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HARRISBURG, Pa. (9/13/11)--Pennsylvania credit unions continue to recover from flooding from heavy rains caused by Tropical Storm Lee. Ten to 20 inches of rain fell throughout the Middle Atlantic states last week, flooding parts of Maryland, Pennsylvania, New Jersey and New York. The Pennsylvania Credit Union Association (PCUA) closed at noon on Thursday and remained closed on Friday, as flooded roads made the office inaccessible. The association reopened Monday but did not have phone or fax service (Life is HighwaySept. 12). Among the Pennsylvania credit unions affected by the flooding, according to PCUA:
* Belco Community CU, Harrisburg, tweeted Friday that two branches in Harrisburg were closed due to flooding. * Pennsylvania State Employees CU, Harrisburg, alerted members via e-mail that it had to temporarily close its corporate location and Strawberry Square office in Harrisburg due to flooding. * Hershey FCU, Hummelstown, closed its Annville office for repairs due to flood damage. * Choice One Community FCU’s main and waterfront offices will be closed until further notice after the Susquehanna River rose more than 42 feet in Wilkes-Barre, beating its record crest from 1972. The Wilkes-Barre-based credit union also had to cancel its Member Appreciation Day scheduled for Sunday. * Cross Valley FCU, Wilkes-Barre, closed three branches as a result of flooding, but announced that all branches would open Monday. The credit union is collecting donated clean-up supplies for the American Red Cross. * Service 1st FCU, Danville, closed early Wednesday and remained closed Thursday, but all branches were open Friday. For some time on Thursday, telecommunications outages in the area affected some of the credit union’s ATMs and its teller-phone service.

CU System briefs (09/12/2011)

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* SPARKS, Nev. (9/13/11)--Sparks, Nev., police are looking for two men in pickup trucks who stole an ATM from Carson City, Nev.-based Greater Nevada CU early Sunday. Police received a call at 5 a.m. Sunday that someone was destroying the ATM and using a backhoe to load it into the back of a pickup truck. Three hours later, hunters in the woods discovered two suspects trying to gain access to the ATM. The hunters left the area and called police. Police arrived as two trucks left the scene. The ATM was recovered but it was not known if any money was stolen from it (KOLOTV.com Sept. 11 and The Republic Sept. 12) … * SEATTLE (9/13/11)--Three Seattle men have been charged with skimming more than half a million dollars from cash machines in two separate conspiracies that involved placing skimming equipment on ATMs or access doors and using small cameras to record personal identification numbers (PINs). Police believe Beneyam Asrat G-Sellassie, 22, who is charged with possessing counterfeit and unauthorized access devices is linked to more than 20 incidents in Washington, Oregon, California and Nevada that compromised up about 1,800 accounts. Roughly 573 people suffered losses exceeding $394,000. Ionut Buzbuchi, 55, Rendon, and Mihai Eleckes, 35, of Issaquah are charged with bank fraud related to skimming activity in 2009 in Washington, Idaho and Arizona. The ring allegedly targeted BECU, Watermark and First Tech CUs, as well as Chase Bank. Losses related to those incidents totaled more than $160,000 so far (PNWlocalnews.com Sept. 8) … * TOPEKA, Kan. (9/13/11)--Five Topeka, Kan., residents have been charged with conspiring to defraud Topeka banks and credit unions of more than $400,000 (Targeted News Service Sept. 7). Charged in the scheme are Maqsood Baloch, 31; Amanda Rene Baloch, 26; Irfan Khan, 30; Junaid Iqbal, 30; and Kanwal Baloch, 22. All but Amanda Baloch are natives of Pakistan. According to court records, the five allegedly represented themselves as owners and operators of gas stations, convenience stores and smoke shops in Topeka and Osage City. They allegedly set up accounts at Topeka financial institutions--including Educational CU--and allegedly deposited insufficient funds checks and immediately withdrew or transferred funds before the fraud was discovered. They also are charged with making e-payments using false account numbers and accounts with insufficient funds … * LANSING, Mich. (9/13/11)--The Michigan Credit Union League (MCUL) & Affiliates presented a check for more than $100,071 to Children's Miracle Network Hospitals, through Credit Unions for Kids. Accepting the check on behalf of four hospitals in Michigan was Sparrow Hospital in Lansing (Michigan Monitor Sept. 12). Funds were raised through a charity golf outing, live auctions and silent auction at the 2011 MCUL Annual Convention and Expo in May. Credit unions and staff donated more than $71,000 for children's hospitals in Michigan; candy bar sales brought $14,243 more; and the CO-OP Services Miracle Match Program matched more than $14,000. Funds went to Beaumont Hospital, Royal Oak; DeVos Children's Hospital, Grand Rapids; Hurley Medical Center, Flint; and Sparrow. From left: Stella Cash, interim executive director, the Sparrow Foundation; Maureen Lafrinere, MCUL & Affiliates; Dr. Stephen Guertin; and Joy Wiseman, Sparrow's director of development for pediatrics and Children's Miracle Network Hospitals. (Photo provided by the Michigan Credit Union League) …

ASI assesses another special deposit premium at 15 bp

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DUBLIN, Ohio (9/13/11)--Private share insurer American Mutual Share Insurance Corp. (ASI) will assess a special premium for 2011 in the amount of 15 basis points, or 15% of 1% of total shares, ASI's Board of Directors announced last week. The premium will be assessed of all primary insured credit unions of record with the company as of Sept. 30, 2011 and based on total shares reported as of June 30. Subject to final regulatory approvals, the Special Premium Assessment is expected to be billed on or about Sept. 30. The assessment does not apply to excess share insurance policyholder credit unions insured by Excess Share Insurance Corp. (ESI) or ASI. "Lower yields on our high-quality government bond portfolio and a hesitant economic recovery have strained our earnings, while weaknesses in a small number of member credit unions in select markets have required a more aggressive posture when funding our loss reserves," said ASI President/CEO Dennis Adams. "The Board of Directors has closely monitored ASI's earnings, reserves and equity throughout the year, and has arrived at this difficult decision only after long deliberation and consideration of input from the company's actuaries, member credit unions and ASI's Primary Insured Credit Union Advisory Council," Adams said. The council is comprised of 20 CEOs from primary insured credit unions in each of ASI's nine states of operation. ASI made its first-ever special premium assessment in January 2010 after some losses at a few member credit unions. That assessment was also 15 bp (News Now Dec. 30, 2009). ASI is a credit union-owned share guaranty corporate based in Dublin, Ohio. It insures savings of credit union members up to $250,000 per individual member account and insures 146 state-chartered credit unions in nine states.

CU System briefs (09/09/2011)

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* SPRING VALLEY, N.Y. (9/12/11)--The former CEO of Spring Valley, N.Y.-based Rockland Employees FCU was sentenced Thursday to 19 months in a federal prison after pleading guilty to stealing $150,000 from the credit union (Lohud.com Sept. 8). Cynthia Vaughan pleaded guilty in May to bank fraud. Court records said that while in her position, Vaughan allegedly used the computer system to transfer funds from credit union accounts to herself and her family from October 2000 to July 2006. She had been employed at the credit union since 1997. A 2006 audit discovered suspicious activity in the accounts … * BATON ROUGE, La. (9/12/11)--Ashley E. Braud, former marketing director at Dow/Louisiana FCU, Plaquemine, La., pleaded guilty Thursday to mail fraud in a U.S. District Court in Baton Rouge. She allegedly admitted taking credit union funds in August and September 2009 to purchase 30,000 "scratch-off tickets" for personal use. The worth of the tickets was not determined. A sentencing date is pending the determination of the actual amount stolen (Associated Press Newswires Sept. 9) … * PHOENIX (9/12/11)--Phoenix-based Arizona State CU sponsored Capitol Rideshare's summer Clean Air Campaign and saved state employees more than 23,000 gallons of gas, or more than 500,000 miles. The amount equates to 5.8 fewer tons of pollutants in the air during the campaign's two week period--the highest record since 2003. Arizona State CU donated prizes to help drive carpool participation during June 20-24 and July 25-29. It also visited state employee buildings to encourage more involvement. The initiative "helps Arizona State CU maintain a strong relationship with state employees," said credit union President/CEO David E. Doss, who added more than 10% of state employees took advantage of this year's program. The credit union donated Apple iPads, iPod Shuffles and iTunes gift cards (Investment Weekly News Sept. 17) … * WARMINSTER, Pa. (9/12/11)--Warminster, Pa.-based Freedom CU announced that four of its branches are now Wi-Fi hot spots. The branches are Warminster, Abington, Northeast and Lansdale Freedom Branches. The four branches are equipped with secure wireless networks, free of charge. Members can locate the network called "4Members" in the list of available wireless networks and select the network … * SUITLAND, Md. (9/12/11)--Andrews FCU has launched the GlobeTrek Visa Rewards credit card, which has both magnetic strip and the Europay, MasterCard and Visa (EMV) technology known as "chip and PIN." The card is the first to market in the U.S., said the credit union, and is targeted to members living overseas or who are frequent international travelers. The card has no annual fee, no cash advance fee and no balance transfer fee. It provides a 3.9% introductory rate for nine months on all purchases, balance transfers and cash advances. Members earn one reward point for every dollar spent and receive 5,000 rewards points when they use their card for the first time …

AVCUs raffle to raise funds for CUAid Irene victims

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MONTPELIER, Vt. (9/12/11)--The Association of Vermont Credit Unions (AVCU) has created a raffle to help victims of Tropical Storm Irene, which flooded much of Vermont, as recovery efforts continue for many of those affected throughout the state. Following AVCU’s participation in a CUAid teleconference last week, the association created a 50/50 raffle to help build contributions among employees, volunteers, and members. Half of the funds raised will go to one lucky winner, with the other half going to CUAid to help Irene’s credit union victims (Newslines Express Sept. 9). The raffle winner will be determined by an independent accounting firm. Only individuals are eligible to participate. Credit unions, other corporate entities, or individuals who want to see 100% of their charitable donation go to Irene’s victims, may support CUAid with a direct contribution through Vermont’s National Credit Union Foundation CUAid site. CUAid’s purpose is to help provide financial support for credit union employees and members when they’re still dealing with issues like meeting their insurance deductible or lacking adequate options for the recovery loan they may need. Typically, CUAid picks up where funds from the Federal Emergency Management Agency, insurance and other sources end.

Direct deposit meets Gen Ys environment concerns

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HERNDON, Va. (9/12/11)--Gen Y members are more likely than other generations to use direct deposit to reduce their impact on the environment, according to a new study by NACHA--The Electronic Payments Association--and PayItGreen. This has implications for credit unions looking to attract young adults as members. Twenty-seven percent of Gen Y say they use direct deposit to help the environment while 19% of other generations do so, per new findings from the 2011 PayItGreen Survey, unveiled during National Payroll Week, Sept. 5-9. Most Gen Y members said their habits can help change the world for the better, current research shows. A separate survey concluded that 89% of Gen Y are likely to switch from one brand to another--if price and quality are equal--when the second brand supports a cause. “Gen Y brings a new energy to products and services that support causes like environmental sustainability,” said Janet O. Estep, NACHA president/CEO. “Although convenience is still the number one reason that all generations use direct deposit, Gen Yers are leading the environmental charge to help reduce paper use by receiving their pay electronically.” The 2011 PayItGreen Survey also found that reducing clutter was a relatively greater priority to Gen Y (32%) than other generations (21%) in choosing direct deposit. Convenience was the most-cited reason to choose direct deposit for all generations--70% for Gen Y and 72% for other generations. “A quarter of Gen Y respondents cited environmental reasons for using direct deposit,” said James Van Dyke, Javelin Strategy & Research president and founder. “That might not seem like a huge number, but it’s noteworthy to us because it suggests behavioral motivation for this younger generation. If nothing else, businesses would be well served to target their payroll campaigns differently to Gen Y than other generations.” The 2011 PayItGreen Survey also noted that 38% of late adopters or “laggards” said they used direct deposit because their employers require it. The inherent safety of direct deposit versus paper checks was cited by 36% of Gen Y respondents and 35% of non-Gen Y respondents as a motivator for use. “We’re always talking about how to switch that last 25% over to direct deposit,” said Estep. “This research shows that where state law allows, employers may want to consider requiring employees to receive their pay electronically. Once employees start using direct deposit, its safety, security, and convenience make them true believers. They wonder why they didn’t do it sooner.” The PayItGreen Survey 2011 is based on data collected by Javelin Strategy & Research. The online survey polled 3,500 U.S. adults. The Credit Union National Association is a Go Direct national partner and supports the check-safety and cost-savings goals for the federal program. Go Direct is a national campaign designed to motivate more Americans to select direct deposit for their Social Security, Supplemental Security Income, Veteran’s Administration Compensation and Pension and other federal benefit payments. The U.S. Department of the Treasury and the Federal Reserve Banks are sponsoring the campaign. For more information, use the link.

Northwest CU Association to hold its first convention

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TACOMA, Wash. (9/12/11)--The Northwest Credit Union Association (NWCUA) will hold its first convention and business meeting Sept. 20-22. Expected to draw roughly 800 attendees, the 2011 NWCUA Convention & Annual Business Meeting is the first formal gathering of the combined Northwest credit union community after the Credit Union Association of Oregon and Washington Credit Union League merged earlier this year. Among the speakers at the conference will be Bill Cheney, president/CEO of the Credit Union National Association. Michael Barr, former U.S. Department of Treasury assistant secretary for financial institutions and key architect of the Dodd-Frank Wall Street Reform and Consumer Protection Act is also scheduled to speak. Other speakers include Susan Ershler, business executive, Mt. Everest climber and author, and Salim Ismail, investor, entrepreneur, director of Singularity University, former Yahoo vice president and head of Brickhouse, Yahoo’s internal ideas factory. Special events include:
* The 2011 NWCUA Annual Business Meeting; * A trade show; * Four general sessions featuring national speakers; * Nine idea exchange sessions; * 20 training and education sessions; * A Spectrum Marketing Awards luncheon; and * A Summit Awards dinner.

North Jersey FCUs green machine put into action in flood

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PATERSON, N.J. (9/12/11)--After Hurricane Irene, North Jersey FCU went to the aid of Paterson, N.J., which was hard hit by flooding from storm, by offering its Green Machine to ease things for residents needing financial services. Paterson and surrounding towns in Passaic County were left without much in the way of financial services, according to the New Jersey Credit Union League (The Daily Exchange Sept. 9). North Jersey FCU, based in Totowa, has its largest branch in Paterson. The credit union rallied its staff, who walked two miles to open its branch and provide financial services to the community, said the league. "We had no phone or power services for six days," James Griffin, vice president of business development at the $198.2 million asset credit union, told the league. This meant the credit union had limited electronic capabilities. "But we quickly responded to the needs of our members and did all we could to make sure people could access their cash," he added. The credit union requested a parking space from the city and offered The Green Machine, its 40-foot mobile biodiesel-fueled branch. It became part of the credit union's disaster recovery plan and is now stationed near the credit union's building. The Green Machine has an ATM and two teller windows, which handle hurricane victims' cash transactions and other financial needs. North Jersey Federal employees handed out ice cream sandwiches and frozen fruit bars to people waiting in line to get cash since the machine offered the only functional ATM for blocks because of extensive power outages, said the league. "We believe in our motto of 'People Helping People' and the hurricane put our motto to the test," said North Jersey Federal President/CEO Lourdes Cortez. "Not only did we provide much-needed services to our community, we were able to ease their burden during these trying times."

California league Bannan award winners announced

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ONTARIO, Calif. (9/12/11)--Pat Neighbors, strategic development officer at The Golden 1 CU, Sacramento, Calif., and Grossmont Schools FCU in El Cajon, Calif., are the 2011 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 through the cooperative spirit of “People Helping People.” The awards were named after Kim Bannan, former league vice president of credit union development and research and information. In 1992, the league founded the Shapiro Group to cooperatively pool the resources of the credit union community to help small credit unions operate efficiently and effectively. Neighbors was recognized as a long-standing champion of small credit unions. In recent years, she has served on the Shapiro Advisory Committee, working with the committee and league to offer educational training opportunities to small credit unions through the CU Comply program. Currently, more than 50 small credit unions statewide use the low-cost service to help train staff and ensure compliance in their organizations. The award recipient in the company/credit union category, Grossmont Schools FCU, was honored for the support CEO Steve Devan and staff provided for small credit unions, including El Cajon, Calif.-based Ketema FCU. Devan has been involved with the credit union industry for 18 years. He has headed Grossmont Schools CU for the past eight years. Neighbors and Grossmont Schools will be honored during this year’s California Credit Union League Annual Meeting and Convention, Oct. 26-28 in San Diego.

Speakers Perry set for this weeks Iowa CU Convention

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DES MOINES, Iowa (9/12/11)--The annual Iowa Credit Union Convention will take place this week in Des Moines, kicking off Wednesday with more than 300 representatives from credit unions and supporters focusing on advancing credit union growth and vitality. 2012 Republican presidential candidate and Texas Gov. Rick Perry will speak Friday about credit unions and the economy, and will take questions from Iowa credit union attendees. His address will be broadcast on UStream at http://www.usstream.tv/channel/iowa-credit-union-league. Aaron Thomas, son of the late Ed Thomas of Parkersburg, will be the closing keynote speaker Friday. He will share his family's story and discuss how to deal with adversity, set important goals and live a meaningful life of passion. Thomas' book, "The Sacred Acre--The Ed Thomas Story," was No. 29 on the New York Times Best Seller List last week. The conference, which ends Friday, also will feature 13 education sessions on topics such as how to prepare for a crisis, marketing and business development, what effects the economy has on credit unions and compliance updates geared to directors and others.

N.J. Senate president is leagues legislator of the year

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HIGHTSTOWN, N.J. (9/12/11)--New Jersey Senate President Stephen Sweeney (D) will be named Legislator of the Year at New Jersey Credit Union League’s 77th Annual Convention in Atlantic City. Sweeney spearheaded the municipal deposit reform legislation signed into law last month to enable credit unions to become eligible depositories for counties, municipalities, and school boards, said the league (The Daily Exchange Sept. 9). Sweeney will receive the award and address convention attendees during the dinner and awards banquet Sept. 19. First elected to the New Jersey Senate in 2001, Sweeney was chosen by the Democratic Majority to lead the Senate in the 214th Legislature and took the oath as Senate president Jan. 12, 2010. In 2011, Sweeney proposed sweeping reforms to the public employee pension and health benefits systems that will save taxpayers more than $120 billion over a 30-year period. The reforms have been hailed as a national model for other states, said the league. Sweeney was also instrumental in crafting the state’s new 2% property tax cap and has led efforts to reform the arbitration procedures for police and fire contract disputes.

Police investigate whether shooting victim was hijacked

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COLUMBUS, Ga. (9/12/11)--Columbus, Ga., police are investigating whether one of two men shot and killed by a police officer after a robbery at MEA FCU could have been a bystander whose truck was hijacked by the robbery suspect. Killed in the incident Thursday morning were Tony Carr, a Fort Benning fire inspector, who was a passenger in the truck, and Alrahiem Tolbert, 30, the driver of a pickup truck. Police originally reported the two men were robbery suspects. The incident began when a masked man who ran from the credit union was chased a block by a new police recruit. Tolbert got in the pickup truck with Carr and allegedly tried to back out of Carr's driveway and run over police officer Vincent Lockhart Jr. Lockhart fired several shots, and Tolbert died at the scene. Carr died later of a gunshot wound to the chest. Authorities are trying to determine if he was involved. Carr's brother, Michael Carr, told media he was on the phone with his brother when the incident occurred. In the middle of the conversation, he heard someone say, "Move," and another voice say, "Hey hold on." He said his brother routinely went home for lunch to let his dog out.

Corporate Wire transfer vendor to discontinue IE 6

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GREENSBORO, N.C. (9/12/11)--International wire service provider Western Union Business Solutions announced that it no longer will support the use of Internet Explorer 6 (IE), according to First Carolina Corporate CU. The Greensboro, N.C.-based corporate said it had received this message from the provider: "Based on current usage reports as well as the recent recommendation from Microsoft, Western Union Business Solutions will soon discontinue support for IE 6 for our Online RX for Corporate accounts. This will allow us to focus our support efforts on more commonly used Internet browsers and help to promote our clients' online safety." The corporate encouraged credit unions to take the necessary steps to ensure their international wires processing does not experience a service interruption. Credit unions' browsers will need to meet the minimum standard of IE 7 as of Sept. 30, said the corporate. After that time, credit unions may be able to access their account through IE 6 but likely will encounter safety and formatting issues. Western Union Business Solutions' message said it would continue to support IE 7 and 8, and as of Sept. 30, IE 9.

CU System briefs (09/08/2011)

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* BALTIMORE (9/9/11)--A Maryland woman was sentenced to six years in prison for bank fraud conspiracy and aggravated identity theft related to a scheme to obtain fraudulent loans from credit unions where she worked. Latesha Brown, 33, of Edgewood, Md., also was sentenced to seven years' supervised release after the prison term and ordered to pay restitution of $124,000. From September 2004 through August 2010, a group of family and friends allegedly sought fraudulent loans which Brown allegedly facilitated or processed. From March 2007 to Aug. 5, 2010, Brown allegedly applied for jobs at 33 credit unions and for membership in 29 credit unions, often reapplying to the same institution on multiple occasions with new false identities. In some, she applied for loans in her name and other names, using stolen ID information, said the plea agreement. Christopher Houston, 34, of Edgewood and Donald Brown, 31, Elkton, pleaded guilty to related charges of bank fraud conspiracy and are to be sentenced Sept. 22 (US Fed News Sept. 7) … * BARTONVILLE, Ill. (9/9/11)--David E. Morris, 48, East Bluff, Ill., faces up to 60 years in prison on two charges of holding up the Redbrand CU twice last month. The Bartonville, Ill.-based credit union was robbed Aug. 17 and again Aug. 29. Each time the robber implied he had a weapon. Police traced a cell phone number to Morris, said the Peoria Journal Star (Sept. 8) … * SACRAMENTO, Calif. (9/9/11)--California's Credit Union Program in the state's Department of Financial Institutions has appointed Janet Nozaki as financial institutions manager in the Los Angeles area. Nozaki was formerly chief examiner of the Financial Service Division and supervising examiner for the Division of Financial Oversight (DFI Monthly Bulletin August) … * LANSING, Mich. (9/9/11)--William Taylor, president/CEO of Motor City Co-op CU, Clinton Township, Mich., has retired, effective Thursday, after more than 40 years in the credit union industry. He had served as president/CEO of the $116 million asset credit union since 2009. He also served as president/CEO of First Financial CU. Motor City Co-op CU's Board of Directors has appointed Steven Andrews as its new president/CEO. Andrews has worked in the credit union industry for more than 12 years as an auditor. He has been executive vice president/chief financial officers of the credit union since 2006 (Michigan Monitor Sept. 6) …

California DFI to implement efficiency ratio for CUs

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SACRAMENTO, Calif. (9/9/11)--The Credit Union Program in California's Division of Financial Institutions (DFI) has implemented an efficiency ratio to quantify the efficiency of a credit union's operations. "Despite the current fact that the efficiency ratio is not considered a 'key ratio' by the National Credit Union Administration (NCUA) in the review of a credit union's earnings, the efficiency ratio has been a commonly used measure of efficiency in the financial industry for some time," said DFI in its Monthly Bulletin for August, released Thursday. More credit unions have begun to incorporate efficiency ratio targets or limits in formal policy as a means to better evaluate their own performance and to provide for better planning, said DFI. The ratio will also help examiners better identify and communicate the earnings performance of credit unions, the agency added. The efficiency ratio is basically overhead costs (without including the provision for loan loss expense) divided by operating income. It provides in cents how much it costs to produce each dollar of revenue, said DFI, which added that the lower the ratio, the better the credit union's performance. DFI said it is not required that credit unions use the ratio nor that examiners always include it in examination reports. "We recognize that, although the efficiency ratio is an important measure of a credit union's performance, examiners understand that the efficiency ratio is only a part of the picture … however, the efficiency ratio is a valuable tool and the Credit Union Program encourages its use in the examination of its credit union licensees."

CUs remember lessons of terrorist attack

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MADISON, Wis. (9/9/11)--As the nation marks the 10th year since the Sept. 11, 2001, terrorist attacks on American soil, credit unions--some directly affected, others indirectly--will be among those reflecting on the impact that day made on American history as well as how they operate. For one credit union--Xcel CU--the events of that day literally transformed the way it does business, according to Xcel President/CEO Linda McFadden. After its main branch in the World Trade Center's Tower One in New York City was destroyed in the terrorist attack, Xcel decided not to open another facility in the city. Instead, it moved its headquarters to Bloomfield, N.J. Before its office in the World Trade Center was destroyed, Xcel’s member service was driven primarily by in-branch transactions, McFadden told News Now. Today, she estimates members do 90% of their transactions electronically. Because the events also forced the Xcel to temporarily close its branch at 26 Federal Plaza, the credit union had to get creative in how it served its members, McFadden said. “First, we let members know we were alive and well through our website,” she said. “We let them know they could reach us and conduct transactions over the telephone, online or through ATMs.” The credit union had already moved its phone and information technology systems to New Jersey after the 1993 World Trade Center bombing. “We were able to make payroll that Friday (after Sept. 11), which most financial institutions weren’t able to do,” McFadden said. In the weeks following the credit union operated out of two crowded offices and joined New York State Shared Service Centers. McFadden recalled how one member service representative met a member at a subway station to personally deliver a cash withdrawal. The 10th anniversary of the Sept. 11 terrorist attacks has not created a noticeable emotional response from employees, McFadden said “Most of our staff we had at that time either moved on or relocated,” she said. The events also forced Municipal CU out of its 22 Cortlandt St. headquarters, across the street from Ground Zero. The credit union’s employees operated from temporary spaces in lower Manhattan, Brooklyn and, in some cases, their homes, until the credit union returned to its Cortlandt St. site in May 2002 (News Now May 24, 2002). The credit union, which serves firefighters, police officers, and other municipal and governmental employees, lost 129 members in the attacks. CUNA Mutual Group estimated damage costs to credit unions at about $6 million--$4 million in life insurance and $2 million in property and casualty claims (News Now Oct. 12, 2001). Despite the events, credit unions rebounded and proved that the cooperative experience can get people through the worst of events. They learned the nation's financial system could survive when institutions take measures to back up their data and processes. Credit unions met members' needs because they had business continuity plans in place. Defense credit unions assisted members in preparing for deployment to war. The attacks also turned the Web and cell phones into significant, instantaneous channels of communication that eventually changed the way credit unions get their news and communicate with each other. Credit unions learned that communications were important and vulnerable, and they beefed up their computer security. Credit unions saw more laws--such as passage of the Bank Secrecy Act's anti-money-laundering and other provisions--and became familiar with compliance requirements over a range of laws such as the Soldiers and Sailors Relief Act. For a full range of lessons credit unions learned, use the resource link. Credit unions across the nation are conducting observances and ceremonies to honor the victims of the terrorist attacks. A few examples of the kinds of activities that are taking place are:
* Andrews FCU, Clinton, Md., began events Friday and Saturday with a display of flags, and employees wearing remembrance pins. Donations are being made to several organizations to provide supplies to service members in transition from Iraq and Afghanistan back to hospitals close to their home or duty stations. Also, the credit union is sponsoring commemorative races, including The New Jersey Run for the Fallen and the Beast of the East McGuire Mud Run (credit unionsonline Sept. 6). * Bay Area CU, Oregon, Ohio, remembered the anniversary by raising money and awareness for Honor Flight Northwest Ohio. Along with accepting donations at one of its branches, the credit union will offer members and the community a chance to purchase commemorative coins, stamps and memorabilia. One hundred percent of the profits from the sales will go to Honor Flight Northwest Ohio, so local veterans can travel to Washington, D.C., to see the monuments dedicated to their honor. The “Always Remember September 11” event will run through Sept. 23 and precedes this year’s final fly day of Honor Flight Northwest Ohio, Sept. 28. * Global CU, Spokane, Wash., began its 2011 fundraising drive Sunday for Operation Spokane Heroes--an outreach program to support members of the uniformed services and their families--to sell “Hero Cards.” The cards were sold at the entrance gate to the Spokane Interstate Fair on Military Appreciation Day, kicking off a six-week long initiative going into October. The cards are displayed with a hero’s name, helping to raise money and awareness for the program. Last year’s program raised $976. * First Northern CU, Chicago, and a local auto dealer held a live radio broadcast at Lou Bachrodt Auto Mall to support the troops. They asked the community to bring a decorated hand and a dollar to benefit Operation Homefront Illinois. They displayed two steel beams from the World Trade Center that were part of the Winnebago County 9/11 Emergency Responders Memorial being built in Rockford, Ill. The donation drive was held Aug. 6 (credit unionsonline Sept. 6). * LGE Community CU, Marietta, Ga., joined the local Kiwanis Club for a “Field of Flags" to show solidary with the community. A flag will be placed in Kennesaw Mountain National Battlefield Park for each life lost in the attacks. The flags will fly through Sept. 16. Citizens can sponsor and carry a flag. The credit union has helped promote the event by sending an e-mail to its membership and placing information on its website and Facebook page (creditunionsonline Sept. 6).

Two Michigan CUs set to merge

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JACKSON, Mich. (9/9/11)--American 1 FCU, Jackson, Mich., and Michigan Services CU, Southfield, Mich., are merging this fall, with the $177.4 million asset American 1 being the continuing credit union. After months of research and negotiation, American 1’s board voted to adopt a resolution to merge with Michigan Services. By adopting the merger, American 1 will become a state- chartered credit union, making its name American 1 CU. The vote was put to the American 1 membership and finalized at a special meeting on Sept. 7. The board of directors for Michigan Services CU, with assets of $10.9 million, said that a consolidation with American 1 offers the ability to better serve its current 1,300 members.

Southeastern CUs launch 1.3M co-op ad campaign

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BIRMINGHAM, Ala. and TALLAHASSEE, Fla. (9/9/11)--The League of Southeastern Credit Unions (LSCU) launched a $1.3 million cooperative advertising campaign this week throughout Alabama and Florida to educate consumers about how credit unions are different.
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One hundred credit unions in Alabama and Florida are participating in the campaign, which uses TV, radio, billboards, online ads, and the tagline, “Credit unions: we’re giving banking a better name.” The campaign concept, which was developed by Scout Branding Co. of Birmingham, Ala., is based on research that indicates 60% of consumers don’t know what a credit union is. The campaign, geared toward Gen X, is designed to educate consumers about how credit unions are different than other financial institutions and save their members millions of dollars each year. The media buys in each of the 14 markets in the two states include a heavy online buy and television buys during shows watched by Gen X. Consumers who surf local and national websites will see banner ads and pre-rolls before online videos. Facebook’s 8.6 million users in Alabama and Florida also will see the image campaign ads. “Since the economic meltdown in 2008, credit unions have focused on providing for their membership,” said LSCU President/CEO Patrick La Pine. “Credit unions are unique, in that any profit made is returned to members in the form of lower fees and better rates on loans and savings.” The ads direct consumers to the website, www.betternameforbanking.com. It has three interactive buttons where consumers can see what they would save if they had their mortgage loan, auto loan, and a credit card with a credit union. Consumers may compare the average rates between a credit union and a bank by viewing the “what’s better?” page. Real-time rate data from Datatrac provide the comparison information, which shows the credit union rate is better in almost every category. A search function on the website to makes it easy to find a credit union nearby. The radio ads, outdoor ads, and the website have a shared-branching component. Credit unions are unique in that many share services. Members only need to look for the shared branching “swirl” to know their credit union is nearby. “Our website shows how much consumers can save if they had their loans or credit cards with a credit union,” La Pine said. “For most, it will be eye-opening the amount they would save with a credit union.”

Congressman meets with Greater Alliance FCU

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HIGHTSTOWN, N.J. (9/9/11)--U.S. Rep. Scott Garrett (R-N.J.) met with senior management from $156 million asset Greater Alliance FCU, Paramus, N.J., on Aug. 9 to discuss recent events in Washington and the needs of his constituents.
U.S. Rep. Scott Garrett, left, (R-N.J.) met with senior management from Greater Alliance FCU on Aug. 9. Garrett is shown with Joe Pedone, vice president of new business development for Greater Alliance FCU. (Photo provided by the New Jersey Credit Union League)
Greater Alliance senior managers briefed Garrett on the credit union’s efforts to help provide value for the average family, individual or business during the sluggish economy New Jersey Credit Union League (The Daily Exchange). “Given today’s economic turmoil, Greater Alliance is better equipped and has positioned itself to help everyone in Bergen and Passaic Counties save money and pay less for any loans they may need,” said Joe Pedone, Greater Alliance vice president of new business development. Garrett provided the credit union’s senior management with a brief overview on his position regarding the nation’s debt issues and what he believes should be done to help the economy going forward.

Filene Idea Idol contest seeks next CU innovation

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MADISON, Wis. (9/9/11)--That latest group of proposed innovations from the Filene Research Institute’s i3 think tank will take the stage--American Idol style--during the first Idea Idol, at 2 p.m. (CT) Sept. 14. Representatives from the i3 program will present four product or service ideas in three-minute pitches, followed by a brief question-and-answer period. The online audience will be asked to provide feedback and vote for their favorite idea, based on the impact on consumers, on the credit union, and their willingness to pilot and implement the idea. The four ideas include:
* Flex.One--a first mortgage combined into a Home Equity Line of Credit with all the capabilities of a checking account; * Heartfelt Hands--a tool that uses the “angel tree” concept of recognizing an emergency financial need and matching that financial need with members who are willing to help; * HomeTrak--a program that allows homeowners to keep track of the remaining life and replacement cost of all appliances, mechanicals, and big-ticket items in their homes; and * The Signal--a website that helps consumers navigate through the questions and complexities of disability benefits and asset building.

PCUA CUs closed today due to floods

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HARRISBURG, Pa. (9/9/11)--The Pennsylvania Credit Union Association (PCUA) is closed today due to flooding in Harrisburg, PCUA announced Thursday. The Susquehanna River flows in front of the association's headquarters and was projected to rise to more than 28 feet by today. Flood stage is at 17 feet. Thursday morning the water level had reached nearly 20 feet, said PCUA (Life is a Highway Sept. 8). The association also closed early on Wednesday and Thursday due to the flooding. "Even though we closed the office early Wednesday afternoon, some employees were unable to make it home due to flooded roads," said PCUA President/CEO Jim McCormack Thursday. "With conditions worsening overnight, more than half of the employees could not make it in to work [Thursday]. Employee safety is our main concern," he added. McCormack said credit unions are also impacted by the flooded conditions, "and we've had reports that some people are having difficulty getting to the turnpike to head for Seven Springs and the Fall Leadership Conference." Rain has fallen throughout central Pennsylvania since Monday as remnants of Tropical Storm Lee caused flooding in the eastern U.S. Pennsylvania and New York have evacuated thousands of people. Rivers and creeks were already swollen from Hurricane Irene's move through the region in late August (Reuters Sept. 8) . In Pennsylvania, major flooding was expected this weekend from York and Lancaster to Williamsport

Illinois foundation awards 37000 in second grant round

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NAPERVILLE, Ill. (9/8/11)--The Illinois Credit Union Foundation has awarded $37,207 in Small Credit Union Development (SCUD), Community Service, Marketing and Business Development, and Financial Independence & Revitalization Effort (FIRE) grants, bringing the total awarded for the year to nearly $68,000. SCUD grants totaled $15,439 and were awarded to eight credit unions. SCUD grants are used for computer hardware and software, equipment and upgrades, and other operational needs. The recipients were:
* Blaw Knox CU, Mattoon; * Bloom Township High School CU, Chicago Heights; * CT Community CU, East St. Louis; * D-B Employees CU, Johnston City; * Decatur (Ill.) Postal CU; * Northside L FCU, Chicago; * Ottawa (Ill.) Hiway CU; and * St. Mark CU, Chicago.
The foundation also awarded a $500 Community Service Grant, designed to encourage and reward chapter or credit union participation in local community projects to Hawthorne CU, Naperville. The credit union supports “Families Helping Families,” a local social service organization that provides apartments and volunteer mentors to homeless families while they work to reclaim their lives through education. Also, five credit unions and one chapter received Marketing and Business Development grants that totaled $13,268. The recipients were:
*Altonized Community FCU, Alton; * CSX Chicago Terminal CU, Calumet City; * NICE FCU, St. Charles; * Riverside Community CU, Kankakee; and * Tinley Forest Employees CU, Oak Forest.
The Rockford Area Chapter was the other recipient. Last year, the foundation awarded $56,209 in SCUD grants, $7,300 in community service grants, $6,000 in FIRE grants, $26,100 in marketing and business development grants, and $33,286 in scholarships.

Texas wildfires affect members CUs safe

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FARMERS BRANCH, Texas (9/8/11)--Tropical Storm Lee whipped up strong northwesterly winds across Texas that are blamed for the rapid spread of several wildfires burning tens of thousands of acres, affecting some credit union members, but not harming any credit unions to date, according to the Texas Credit Union League (TCUL).
Winds from Tropical Storm Lee are blamed for the rapid spread in Texas of several wildfires burning tens of thousands of acres. Some credit union members are affected, but no credit unions have been damaged to date. (Photo provided by the Texas Credit Union League)
Central Texas has been hard hit with fires raging in Bastrop, Hays, Travis and Williamson counties. The fires reportedly have scorched 40,000 acres and destroyed hundreds of homes. Many more hundreds of properties have been damaged or threatened by the blazes (LoneStar Leaguer Sept. 7). TCUL has been in contact with credit unions in the affected areas. Based on preliminary reports, the credit unions in the area are safe. At least one credit union has reported that a branch in the affected area is limiting its hours of operation. While the credit unions have not experienced any physical damage, there have been reports that some members and credit union staff have been affected. TCUL is communicating with the credit unions to determine the extent of damage that the wildfires have caused to the homes of members and staff. The Texas Credit Union Foundation is ready to assist credit union staff. Phase one emergency grants are provided to credit union employees to assist with immediate disaster relief needs, such as out-of-pocket costs that may result from being evacuated. The grants are up to $500 per credit union employee. The intent of the grants is to help stabilize credit union employees’ situation so they can return to work. Preliminary estimates for insured homeowner losses from Texas wildfires tally more than $100 million--setting records for the state, according to Mark Hanna, a spokesman for the Insurance Council of Texas (Property Casualty 360 Sept. 7).

Missouri CUs took MBL message to lawmakers

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ST. LOUIS (9/8/11)--Missouri credit union leaders met with two members of Congress in two days during the final week of the August congressional recess.
Missouri credit union leaders met with members of Congress in two days during the final week of the August congressional recess. From left, are: Carolina Decker, CU Community CU, Springfield; Craig Tabor, BluCurrent CU, Springfield; Judy Hadsall, CU Community CU; U.S. Rep. Billy Long (R-Mo.), Justin Lumby and Ashlee Oldham, Assemblies of God CU, Springfield; and Amy McLard, Missouri Credit Union Association.
U.S. Rep. Vicky Hartzler (R-Mo.) met with Missouri credit unions during the August congressional recess. From left, are: Rick Nichols, River Region CU, Jefferson City; Sharon Ichord, Mid Missouri CU, Fort Leonard Wood; Louie Delk, Conservation Employees CU, Jefferson City; Hartzler; Dana Alderman, River Region CU; Hal James, Missouri CU, Columbia; Peggy Nalls, Missouri Credit Union Association, and Pat Yokley, CommunityAmerica CU, Lenexa. (Photos provided by the Missouri Credit Union Association)
Member business lending (MBL) was the focus of the discussions with both U.S. Rep. Billy Long (R-Mo.) and U.S. Rep. Vicky Hartzler (R- 4). Bills S. 509 and H.R. 1418, the Small Business lending Enhancement Act, would raise the credit union business lending cap to 27.5% of assets from 12.25% (The Missouri difference Sept. 6). The Credit Union National Association (CUNA) and credit unions are pressing Congress to increase the MBL cap to open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said. Long met with Springfield credit union representatives Aug. 31 at his district office. Attendees included Justin Lumby and Ashlee Oldham, Assemblies of God CU, Springfield; Carolina Decker and Judy Hadsall, CU Community CU, Springfield; Craig Tabor, BluCurrent CU, Springfield; and Amy McLard, Missouri Credit Union Association (MCUA). They explained the MBL bill and the potential impact to the community. The three credit unions are approaching the 12.25% cap on MBL, and will soon be unable to lend to small businesses due to the arbitrary limit. Freshman Rep. Hartzler learned about the credit union difference from eight credit union representatives on Sept. 1 The meeting in Hartzler’s Jefferson City office provided an opportunity to discuss credit union’s structure, the debit interchange issue and how credit unions are monitoring the impact of this legislation, and the need for supplemental capital. Attendees included:
* Louie Delk, Conservation Employees CU, Jefferson City; * Sharon Ichord, Mid Missouri CU, Fort Leonard Wood; * Hal James, Missouri CU, Columbia; * Rick Nichols and Dana Alderman, River Region CU, Jefferson City; * Pat Yokley, CommunityAmerica CU, Kansas City; and * Peggy Nalls and McLard, MCUA.
Since mid-July, Missouri credit union representatives have met with:
* U.S. Sen. Claire McCaskill (D); * U.S. Rep. William Lacy Clay (D); * U.S. Rep. Russ Carnahan (D); * U.S. Rep. Blaine Luetkemeyer (R); * U.S. Rep. Emanuel Cleaver (D); * U.S. Rep. Billy Long (R); and * U.S. Rep. Vicky Hartzler (R).
MCUA representatives also met with U.S. Rep. Sam Graves’ (R) chief of staff Tom Brown. Members of Congress returned to Washington, D.C., Tuesday.

Two N.J. CUs aided members through flooding

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EDISON and TINTON FALLS, N.J. (9/8/11)--Two New Jersey credit unions found ways to operate and help members affected by Hurricane Irene, despite several days without power and with numerous road closures, said the New Jersey Credit Union League. Pinnacle FCU, based in Edison, traveled through detours to obtain back-up tapes and began operating from its disaster recovery site in Hagerstown, Md., said the league (The Daily Exchange Sept. 7). It set up a phone line for members to call for special requests and it met all members' emergency needs. The $158 million asset credit union also took off 25 basis points from home equity lines of credit and personal loans up to $5,000, and provided no-fee, skip-a-pays. These will be available throughout September. United Teletech Financial FCU, with $291.3 million assets and based in Tinton Falls, had power issues, but still put together options for members impacted by the storm. Existing borrowers could increase loans, defer payments and increase credit card limits. The credit union also waived normal documentation fees for new real estate loans and provided options for unsecured loans up to $30,000. New- and used-auto loans were also available for pre-approval within hours, said the league. Both credit unions also waived and/or reimbursed fees. "The willingness of these credit unions to step up and aid impacted members just shows credit unions' 'people helping people' philosophy in action," said Paul Gentile, league president/CEO. "These are the stories of just two of the 204 credit unions in the state. I am sure there are many more area credit unions stepping up to help members during this difficult time."

CUs wage increases freezes steady--CUNA report

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MADISON, Wis. (9/8/11)--Wage increases among credit unions have remained steady, but wage freezes held their own, too, according to a staffing survey from the Credit Union National Association (CUNA). Roughly 75% of credit unions with $1 million or more in assets offered a salary or wage increase to at least some full-time employees, reported CUNA's 2011-2012 Complete Credit Union Staff Salary Survey. A similar percentage expects to provide wage increases to employees in 2011. That compares with average salary/wage increases in 2010 of about 2.25% for both management and non-management employees at credit unions. "As the economy slowly improves and business conditions allow it, organizations will provide higher wage increases," said Beth Soltis, senior research analyst for CUNA. "To remain competitive, credit unions will need to regularly assess their ability to do the same." Many employers, including credit unions, are waiting until the economy stabilizes before increasing their fixed costs. In 2010, about 45% of credit unions initiated a wage freeze for at least some full-time employees, said the report. "The challenge for credit unions not providing wage increases is to find other ways to reward employees," Soltis added. "It's critical for credit unions to compensate employees with both monetary and intangible rewards. These two reward types work together to bolster employee morale, staff retention efforts and the credit union's bottom line." The survey provides compensation data for 89 full-time and eight part-time positions at credit unions with $1 million or more in assets. The data include base salaries, incentives, bonuses, total cash compensation and salary ranges. The report, available in print or Adobe PDF format, also contains job descriptions, benchmarks for salary and benefit expenses, base pay increases and turnover rates. An electronic version of the survey's data tables, which allow users to apply formulas and insert the data directly into the credit union's spreadsheets, is also available. Two other reports available can serve as companions to the survey. They are:
* The Geographic Customized Salary Survey, which provides average and median base salaries as well as percentile figures for selected cities or geographic areas; and * The Online Peer Comparison, which provides unlimited access to the 2011 salary survey database. It allows users to create customized peer groups using criteria such as credit union name, asset size, number of members, field of membership, number of full-time employees, number of services offered, total loans outstanding, state and geographic region.
Customized report parameters include percentiles and date-specific trending. For more information, click the link or call 800-356-9655, press three, and use these stock numbers as a reference: 29890 (print) or 29890P (PDF)

Mid-Atlantic Corporate conference spotlights security

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MIDDLETOWN, Pa. (9/8/11)--About 70 credit unions were represented at Mid-Atlantic Corporate FCU’s first Information Technology (IT) and Security Conference Aug. 16-17 in Harrisburg, Pa. The conference keynote speaker was Brian Krebs, editor of www.krebsonsecurity.com. In 2010, Krebs was named the top cyber-security journalist in the U.S. at the 2010 RSA Conference, during which his blog was named the best non-technical security blog. Krebs said the majority of victims of security breaches do not report hacks to law enforcement because it puts their companies at a competitive disadvantage. He investigates these crimes to help potential victims better understand how security breaches happen and avoid falling victim entirely. In his presentation, Krebs also discussed the types of schemes attackers will use to attack credit unions, provided tips for dealing with them, and addressed how to spot red flags for possible breaches. The IT and Security Conference also featured 13 sessions geared toward credit unions. Other industry specialists speaking included Tyler Britten, EMC2 Corp.; Angie Singer Keating, Reclamere Inc.; Richard Brackett, Dell SecureWorks; Jill Hearn, EMC2 Corp.; Mark Bell, Digital Defense Inc.; Timothy Maier, CSB Technology Partners; Kirk Drake, Ongoing Operations and Rocky Giglio, Arraya Solutions. Ongoing Operations is a CUNA Strategic Services provider.

CU System briefs (09/07/2011)

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* ALBANY, N.Y. (9/8/11)--The Credit Union Association of New York (CUANY) Wednesday has launched a blog, New York State of Mind, which addresses laws, regulations and political issues impacting New York credit unions at both the state and federal levels. It is provided through WordPress.org and written by CUANY Associate General Counsel Henry Meier. Credit unions can read and comment on Meier's blogs by signing up for http://newyorkstateofmind.wordpress.com/ for e-mail updates. "Today's credit union professionals don't always have the time to read through the myriad of information they receive on every political and regulatory issue that comes across their desks. Yet, they need to be kept informed," said William J. Mellin, CUANY president/CEO. "It's our goal to provide that information through the blog in small measures that can quickly be absorbed and acted on as necessary." … * COLUMBUS, Ga. (9/8/11)--Columbus, Ga., police had not released the identities of two robbery suspects who were shot to death near M.E.A. FCU by a young police officer who tried to stop their pickup truck Tuesday morning. The officer, one of 100 new recruits recently hired, pulled into the credit union's parking lot as a masked man fled the branch. The officer pursued him on foot to where a second man waited in a black pickup truck with a federal government license plate. The officer tried to stop the truck, but the driver put it into reverse and tried to run over the officer. The officer fired several shots. The truck driver died at the scene, and the passenger died later at a hospital (macon.com Sept. 6) …

CUNA Mutual policyholders OK new ownership structure

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WAVERLY, Iowa (9/8/11)--Credit union and individual policyholders overwhelmingly approved a new mutual ownership structure for CUNA Mutual Group at the 2011 annual meeting of policyholders Wednesday. More than 93% of policyholders who voted approved the plan to reorganize CUNA Mutual Insurance Society (CMIS) from a mutual insurance company into a mutual insurance holding company structure. A two-thirds majority was needed for approval. More than 80,000 policyholders voted. As a mutual insurance holding company, CUNA Mutual Group will continue to be mutually owned with policyholders having full ownership of the new parent mutual holding (MHC) company entity. The new structure requires regulatory approval from the insurance commissioner in Iowa, where CMIS is domiciled. The commissioner will consider the Plan of Reorganization at a public hearing today, and will issue a final order in the coming weeks. If the commissioner approves the Plan of Reorganization, the new structure could become effective by Jan. 31. “The conversion to a mutual holding company structure will maintain policyholders’ rights and significantly enhance our ability to compete and serve,” said Jeff Post, CUNA Mutual Group president/CEO. “This is a natural and positive next step in our continuing commitment to credit unions and to the successful and proven strategy we have been pursuing in recent years.” In asking policyholders for approval, the CUNA Mutual board of directors determined the MHC structure would enhance the company’s ability to access capital and provide greater flexibility to diversify in a way that keeps its focus on credit unions and strengthens its support of the credit union system and all policyholders. Insurance policies and annuity contracts would remain the same and policyholder benefits and rights would not be reduced or altered. Premiums will not increase as a result of the MHC reorganization, said CUNA Mutual.

Michigan CUs grow deposits small-business loans

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LANSING, Mich. (9/8/11)--Michigan credit unions grew both deposits and loans during the second quarter, according to National Credit Union Administration (NCUA) data. Among the highlights cited by the Michigan Credit Union League:
*A $1.87 billion or 4.72% growth in credit union assets, which now stand at $41.4 billion; by comparison, Michigan-based bank assets dropped 4.5%; * Strong growth in small-business loans, which were up $171.5 million or 18.8% to $1.09 billion, while bank’s small-business loans dropped 10.1%; * An 8.33% increase in used-auto loans; credit unions have added $337 million and brought the total of these loans outstanding to $4.39 billion; * A rise of 5.2% in total deposits with savings accounts and money market accounts leading the growth at 11% and 9.84%, respectively. Over the same period, Michigan bank deposits fell by 3.5%; * An increase in return on assets of 0.74%, on an annualized basis; * A 12-month improvement of the overall net worth ratio, the primary measure of financial strength, to 10.71% from 10.64%, above the 7% credit unions considered by regulators as well capitalized; and * A decrease in delinquent loans to 1.53% from 1.81% of total loans.

Two men killed during robbery at CU in Georgia

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COLUMBUS, Ga. (9/7/11)--Two robbery suspects were shot to death by a police officer Tuesday morning as they fled after allegedly robbing the M.E.A. FCU in Columbus, Ga. The incident occurred at 11:30 a.m. at the $62 million asset credit union on Macon Road when a police officer pulled into the rear parking lot of the credit union and saw a masked man running out of the credit union (WRBL.com (Sept. 6). The robbery suspects made it to a getaway vehicle, but the officer stopped it from leaving. The officer left the police car and demanded they get out of the car and turn the vehicle off. The driver put the car in reverse and tried to run over the officer, who fired several gunshots. One of the men was dead at the scene. The other died later at a local hospital. As a precaution, police locked down the school district's offices and several schools. No one else was injured, said police.

CU System briefs (09/06/2011)

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* MONTVALE, N.J. (9/7/11)--A loan coordinator at Paragon FCU in Montvale, N.J., has been accused of helping a mortgage broker submit false information for 13 real estate loans in a scheme that could cost the credit union an estimated $5 million, according to the New Jersey Credit Union League. The loans were for 11 multi-family houses in Bergen and Essex counties in New Jersey. Paragon Loan Officer Dawn Woolbert was one of several accomplices who allegedly aided broker Joseph Curcio, who is accused of running CNS Enterprises LLC with the intent of “supplying fictitious invoices to be added to the seller side the settlement statements,” indicating a debt to the company, even though he was the buyer, said Bergen County Prosecutor Joseph Molinelli. The properties all eventually defaulted, and Paragon investigators began a review (The Daily Exchange Sept. 2) … * TACOMA, Wash. (9/7/11)--The merger between Watermark CU, with $542 million in assets, Seattle, and Sound CU, with $510 million in assets, Tacoma, Wash., was effective Sept. 1, completing the largest merger of credit unions in the history of Washington state. Sound CU will continue as the ongoing organization. Sound President/CEO Richard C. Brandsma will lead the credit union. The next step in the merger process will be integration of member accounts, services, online banking and online bill pay, scheduled for spring. After the account and branch integration next spring, Sound will have 21 branches in the Puget Sound area … * SANTA ROSA, Calif. (9/7/11)--Redwood CU (RCU), based here, announced that it soon will provide faster small business loan approvals and credit allocations in the North Bay and San Francisco areas because the credit union has been designated a U.S. Small Business Administration (SBA) Preferred Lender. The Preferred Lender designation allows RCU to streamline the SBA loan process, which in turn can help expedite the lending process. Michael Downey, senior vice president of business services for RCU, said the credit union will be able to “shave about two weeks off the (SBA) loan process.” In 2008, RCU became the first credit union in the North Bay to introduce SBA lending, and the credit union says it has ranked among the top local SBA lenders for the past two years. The faster lending process, Downey said, will help small business members “grow, thrive and create jobs to strengthen our local economies” … * CHAMBERSBURG, Pa. (9/7/11)--Patriot FCU, Chambersburg, Pa., started the school year out by opening its first student branch, inside Chambersburg Area Senior High School. The student branch is open five days a week with students employed to run the branch with a Patriot manager. Along with having the branch open for periods of time during the week, Patriot will provide financial education to teachers and students through workshops and classroom presentations. “The ability to partner with the high school and Chambersburg School District with our student branch is a great way to encourage good money management skills across the student body,” said Mike Silvers, Patriot chief operating officer. “At Patriot, we believe that providing financial education and money management information to teens will help them for a lifetime” …

Michigan meetings emphasize value of CUs

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LANSING, Mich. (9/7/11)--The value of credit unions to their members was stressed by Michigan credit unions in recent meetings with staff from the office of U.S. Rep. Dave Camp (R-Mich.), one of two Michigan congressmen appointed to the congressional "super committee" charged with trimming the nation's budget. According to the Michigan Credit Union league, leaders from the Mid-Michigan chapter were involved in the meetings (Michigan Monitor Sept. 6). The first meeting occurred two weeks ago, when representatives from Frankenmuth CU participated in Camp's town hall meeting in Mount Pleasant, said the league. Also, credit union leaders from Dow Chemical Employees' CU, Wildfire CU and United Financial CU participated Aug. 30 in a discussion with Eric Friedman, district director of Camp's Midland office. MCUL government affairs staff joined the participants, who provided data indicating the value provided by credit unions to their members. The super committee of 12 has been charged with finding $1.2 trillion in savings from the federal budget within 100 days. The other Michigan representative on the committee is U.S. Rep. Fred Upton (R-Mich.).

Poll Americans value paying down debt over saving

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WASHINGTON (9/7/11)--Is it better to be debt free or have a robust savings account? Roughly 89% of people polled in August by the National Foundation for Credit Counseling (NFCC) say it's better to pay down debt, but NFCC says the answer is "both." Today's savings rate is 5% of disposable income, better than the 1% before the last recession hit, but much less than the 8.3% registered in January 1959, when the first savings report was made by the Bureau of Economic Analysis, said NFCC. History indicates that the rate of savings increases during difficult economic times as consumers cut back on purchases, and it declines during good economic times, said NFCC. Consumers use access to credit not only as a convenience but also as a piggy bank. "Credit replaced savings as the family's savings net, with some arguing that saving was unnecessary since they could charge or borrow their way out of any unplanned event," said Gail Cunningham, NFCC spokesperson. Now that consumers have learned their lesson about overspending, they must focus on saving in five key areas, said NFCC. The five areas:
* Rainy day fund for everyday emergencies such as home and vehicle maintenance, insurance co-pays and deductibles; * Income replacement account to sustain members if they experience job loss, major medical event, divorce and so on; * Down payment for a mortgage; * Known future expenses such as education, vehicles and vacations; and * Retirement.
"In bad times, people save out of a fear of tomorrow, and in good times they spend as if there were no tomorrow," said Cunningham. "To turn this savings/spending cycle into financial stability, consumers should recognize the unarguable importance of savings and develop a systematic plan to meet their personal savings goals." Credit unions can gear their promotions to each area to attract members' savings and provide information about financial goal setting.

ICNN MoneyI Alliant one of seven Best of 2011

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NEW YORK (9/7/11)--Alliant CU, based in Chicago, was named one of the seven “Best Banks of 2011” by CNN Money’s September issue of Money Magazine. The magazine cited Alliant CU for combining “an open-door policy with competitive offerings.” “Credit unions traditionally best the big banks for customer service and account terms …,” the magazine said. “Alliant offers 1.15% on savings. Plus, no fees on non-interest checking, but a direct deposit to the interest-bearing option gets you 1.1% with no charges,” the article added. The $7.86 billion asset Alliant has branches in Arizona, California, Colorado, Illinois, New Jersey, Texas and Virginia. To read the article, use the link.

Branch manager gives stranger a chance at life

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GREENSBORO, N.C. (9/7/11)--Linda Spain, a branch manager at Lorillard FCU, Greensboro, N.C., is anxiously awaiting a phone call. Spain will soon learn if the bone marrow she recently donated to a stranger has been accepted by the grateful recipient’s body.
Linda Spain, a branch manager at Lorillard FCU, Greensboro, N.C., donated bone marrow in early August. She is anxiously waiting to learn to the status of her recipient. (Photo provided by the North Carolina Credit Union League)
“About all I know is he is a 39-year-old man living in the U.S.,” Spain told the North Carolina Credit Union League in discussing her donation of peripheral blood stem cells (PBSC). She donated some 10 million units of PBSC on Aug. 1 and 2, quite a bit more than is usually taken. “They told me he was probably a really big guy,” Spain explained. “So I imagine he’s a weightlifter or a former football player or something like that.” While Spain may never know who the recipient of her gift is, she does know that her donation has given the man his best hope of successfully fighting a particularly deadly form of cancer: Acute Myelogenous Leukemia or AML. AML is a fast-growing cancer of the blood and bone marrow in which the white blood cells do not form fully and therefore cannot fight infections, according to the Be the Match website. Spain first learned about the Bone Marrow Registry in 1997, when a high school classmate of her daughter’s developed leukemia. “They had a blood drive at the school and they were screening people there, so that’s when I first joined,” Spain said. She had received two screening phone calls in the past, “but it never went any further than that.” But this time, “they wanted me to come in for confirmatory testing,” she said. Conducted at the end of June, the blood tests confirmed that she was the best possible match. “I was so happy I would able to help somebody,” she said. Spain received a DVD outlining how the donation procedure works and the risks, which include pain, and more serious side effects such as bleeding of the spleen. “A lot of people back out when they hear about the risks,” Spain said, “and my boyfriend wanted me to back out.” But Spain never gave a thought to changing her mind. At Wake Forest University Baptist Medical Center (WFUBMC) in Winston-Salem a few days before her donation, Spain received an injection of filgrastim, which increases the production of white blood cells. The surge in white blood cells increased the pressure within Spain’s bones, leading to a few days of pain. But Spain fought through the pain until donation day. Her blood pressure also spiked, but medication brought it back down to safe levels. Spain administered subsequent injections of filgrastim at home for three days. She then returned to WFUBMC for a final filgrastim shot, and--two months after the initial phone call, it was time for Spain to donate PBSC. Spain received needle sticks in each arm, and a cell separator machine pulled blood out of one arm and cycled it back into the other. The machine spins the blood at high speeds, which separates it, allowing the machine to collect blood-forming cells, platelets and some white blood cells. The remaining plasma and red blood cells were then pumped back into Spain’s body in the other arm. During the five-hour process, Spain could not get up or move for any reason. “My nose itched right after it started,” Spain said. Luckily a dutiful volunteer was on hand to help out. Due to the physical size of the recipient, Spain returned to WFUBMC a second day for another five hours with the cell-separator machine. Other than feeling tired for a day or two and the the bone pain, there were no complications or side effects. After one day at home to rest and regroup, Spain was back at work. An avid motorcycle rider, Spain shows the world a tough exterior. But her commitment--and the risk she took--for a total stranger, belies a caring individual underneath it all. “This is somebody’s brother or father or son,” Spain said. “I would want someone to do it for me.” Spain’s phone call will let her know if the transplant was successful and how the patient is responding. If he continues to progress and stays cancer-free, there is a chance they will one day get to meet in person. “But that’s probably a year or two away from happening,” Spain said, “because they have to make absolutely sure.” The phone call comes with no guarantees of a happy outcome. “I keep telling myself I’ve done everything I can do.” Registry participants are able to donate twice in their lifetime. Spain says no matter what happens with her mystery recipient, she is willing to donate one more time if called upon. “I’ll do it again in a heartbeat,” she says.

Illinois league Financial fairs a reality in state

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NAPERVILLE, Ill. (9/7/11)--Several interactive financial reality fairs, hosted this year by Illinois credit unions and chapters and the Illinois Credit Union League (ICUL), are providing information about money matters to students heading back to school. Fairs allow participants to make mistakes--and suffer the consequences of their decisions--in a realistic, but safe, environment. During a fair, a growing trend in teen financial education, students assume the role of an adult with a career, income and family situation--single or married, with or without children. Students make choices about how they will spend their money on needs--such as housing, food, clothing and transportation--and wants--such as home decor, leisure activities and optional purchases. Unexpected expenses and income from outside sources also are included in the fair to simulate real life. The goal is for participants to have enough income to pay for all of their monthly expenses with funds going into short- and long-term savings. The events attract large groups with several hundred students to small groups of 10 to 30 students. Fairs are attended by teens, pre-teens and young adults aged 12 to 20. ICUL conducted two financial reality fairs earlier this year. The first was for about 75 teens at the Naperville Public Library during Money Smart Week in April. The second was at Covenant United Church of Christ in South Holland for nearly 100 teens in July. Volunteers from local credit unions assisted at each event. At least four sources in the credit union community provide materials for financial reality fairs. The Credit Union National Association offers Mad City Money, the Credit Union Museum offers CU4Reality, and the Connecticut Credit Union League and Harbor One CU, Brockton, Mass., each offer their own guidebooks. In addition to the credit union sources, other organizations have created similar programs, such as University of Illinois Extension’s “Welcome to the Real World” and Junior Achievement's “Finance Park.” “Teens respond well to the interactive nature of a financial reality fair,” said Melanie Murphy, ICUL manager of member services. “Most of them are surprised at how challenging it is to live within their means.”

In the media MBL cap debit fees more

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MADISON, Wis. (9/7/11)--Credit unions' member business lending (MBL) cap, low fees at credit unions, and the advantages of credit unions over giant megabanks found their way into media reports the past week and a half. In an article entitled "Free the Economy, Free the Credit Unions," (FrumForum.com (Sept. 2), Eli Lehrer notes that credit unions are pushing Congress to lift the MBL cap to 27.5% of assets from 12.25%, and says a lot of members of Congress agree. "Total elimination of the cap would be much better and economically helpful idea," Lehrer said, noting lifting the cap "makes a lot of economic sense: credit unions have funds they would gladly lend to businesses at competitive interest rates if the government would simply let them do so. More business loans would create jobs and improve the economy." He added the limitation is a "good example of a burdensome and pointless regulation that holds back the economy." In PBS.org's "Nightly Business Report" (Aug. 24), a story on savings advice and options points out that consumers can "wring more value" out of savings by moving their money to a community institution or a credit union. "While rates aren't significantly higher, you'll find fewer fees and penalties, which means more money in your pocket," the article said, adding "The majority of credit unions offer free checking accounts with no strings attached. That's a good deal any time." Another article in the Orlando Sentinel Aug. 31, discusses advice by Clark Howard, host of a personal finance radio show and author of Clark Howard's Living Large in Lean Times. It notes that on banking issues, Howard urges people to think twice before doing business with "giant monster megabanks." "He likes small banks, especially consumer-friendly credit unions, known for lower borrowing rates and superior customer service," the article said. An article in the Chattanooga Times/Free Press (Aug. 31), discusses how big banks are phasing in monthly fees on debit card usage while smaller banks are taking a "wait and see" stance before making the decision whether to charge for bank card purchases. Smaller institutions fall under the Dodd Frank Act's $10 billion asset exemption, but electronic payment networks are built and owned by the big banks, the article said. One credit union CEO, Blake Strickland, of Chattanooga-based Tennessee Valley FCU, told the publication that he is expecting some ramification from the act. "Nine times out of 10, when they do stuff like this, it trickles down," he said.

Missouri regulator State CUs surpass 10B assets

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JEFFERSON CITY, Mo. (9/7/11)--Missouri’s 125 state-chartered credit unions have surpassed $10 billion in assets for the first time, the Missouri Division of Credit Unions announced. The division also noted that a new state law signed by Gov. Jay Nixon also took Aug 28. Senate Bill 306, passed unanimously by the Missouri Senate and House, includes a provision that has a direct impact on all state-chartered credit unions. As of Aug. 28, Missouri state-chartered credit unions are no longer required to perform a reserve transfer calculation or transfer an amount to regular reserves. There also is a regulation that requires a “recapture” or transfer amount between equity accounts equal to the amount of the quarterly provision for loan loss expense. The previous law, Section 370.320, required each credit union to perform a “reserve transfer calculation” to determine if an amount must be transferred to regular reserves, the division said in a press release. Several years ago, a federal law was enacted that established new minimum capital levels for all federally insured credit unions. As a part of this legislation, a quarterly calculation and potential transfer to regular reserves was eliminated for all credit unions above the minimum prompt corrective action thresholds, of which nearly all Missouri credit unions are.

NCUF releases first state reports on making a difference

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MADISON, Wis. (9/7/11)--The National Credit Union Foundation (NCUF) released three state pages that will be part of its forthcoming national report showing how the credit union movement is making a difference through financial education and counseling. The Delaware, Illinois and Kansas pages were put together from data collected by NCUF for its 2011 Credit Union Member Education Inventory.
Click to view larger image Above is a look at Kansas’ state page from the National Credit Union Foundation’s 2011 Credit Union Member Education Inventory, which will culminate in a free report showing how the credit union movement makes a difference through financial education and counseling nationwide. (Graphic provided by the National Credit Union Foundation).
Sponsored by state credit union leagues and NCUF’s REAL Solutions program, the report “Credit Unions: Focused on Financial Capability Across the Nation,” will give each league/association a section that contains state-specific data and comparisons to national figures. The three state pages released by NCUF are the first glimpses of what those look like. The report will be used for communications, advocacy and outreach efforts, and will be accessible to participating credit unions at no charge through the REAL Solutions Impact Center. A companion tool detailing member financial education/counseling products and credit union best practices will be published in conjunction with the report. Preliminary survey data indicate credit unions are strong providers of financial education. For example, in Kansas, 164 classroom presentations were made to 5,509 youth at Kansas schools in 2010. Nationally, more than 1.7 million members received financial counseling or advice from credit unions last year. “While the information collected so far is certainly impressive on its own, it is still important to gather more data,” said Lois Kitsch, NCUF’s national program director. “Once more credit unions complete our survey, we’ll know the true impact our industry has across America through our numerous financial education efforts.” NCUF has been using an online survey tool to gather the data since March. To date, more than 550 credit unions from 46 states have completed the survey. All U.S. credit unions are invited to participate, said NCUF. For questions and additional information, contact Lois Kitsch at lkitsch@ncuf.coop or 414-793-1991. For more survey information, use the link.

WOCCU offering CUs opportunities in Kenya

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MADISON, Wis. (9/7/11)--Credit unions can work alongside field personnel during the World Council of Credit Unions' (WOCCU) engagement program, Oct. 30-Nov. 6 in Kenya. The program provides credit union leaders with hands-on opportunity to become directly involved with credit unions internationally.
The World Council of Credit Union (WOCCU) engagement program will be held Oct. 30-Nov. 6 in Kenya. Engagement program participant Patricia Wesenberg, president/CEO of Central City CU in Marshfield, Wis., attends to a young child. (Photo provided by World Council of Credit Unions).
The deadline for registration is Sept. 30. During the trip to Kenya, located in East Africa, participants will help develop savings and credit products tailored for the rural poor and see how small credit unions are reaching the unbanked through a new technology that WOCCU developed. During the trip, participants will also volunteer at Busia Compassionate Centre, a local orphanage. The engagement program is offered through the Global Women’s Leadership Network; however, both men and women alike are eligible to participate. Participants do not need to be members of the network. Participation is limited.

Missouri CUs help small businesses succeed

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ST. LOUIS (9/6/11)--Missouri credit unions are taking to heart the plight of the small business, according to the Missouri Credit Union Association (MCUA), which provided examples of how credit unions stepped in to offer loans when banks and other lenders refused to do so. The results? The businesses are all successful, thanks to the credit unions' input during the loan process. What's more, credit unions making these small business loans have seen their lending portfolios increase. That's significant at a time when the economy has produced the first-ever decline in the nation's credit union loans outstanding, said MCUA in "Missouri Credit Unions Help Small Businesses Succeed," in the Missouri Courier (Winter). Some of the examples provided:
* CommunityAmerica's CU in Kansas City provided a loan to Emily Brown for her bridal shop, Emily Hart Bridal. Brown had been turned down by two banks for a loan, but CommunityAmerica used Brown's significant dress inventory as collateral for what she needed to relocate her business. "I would have sunk without the credit union," she told MCUA. Today, she has 2,300 square feet and already needs to expand and hire more staff. * Arsenal CU in Arnold approved a loan for Lara and David Mark to
When David and Lara Mark decided to expand their successful David's Guitar Loft, which provides music lessons to students in Missouri, none of the larger banks would risk lending to them. However, Arsenal CU, Arnold, loaned to them, and their second location is meeting its business expectations. (Photo provided by the Missouri Credit Union Association)
expand their business, David's Guitar Loft, which provides music lessons to students from ages six to 70. "We approached bigger banks where we already had accounts and good standing, but none were willing to take a risk on us," said Lara Mark. The second location is on track with its business projections. "It's crucial for credit unions and other financial institutions to help small business," she said. "It might be easier to finance big companies, but you lose the philosophy of small ones that offer a lot more to the communities we serve." * West Community CU in O'Fallon, offered a home equity loan of credit to help Kimberly Saguto turn her catering company into a full-service banquet center. Previously she was turned down by four financial institutions because she didn't have a business track record. She opened the doors in August and has experienced a steady climb in bookings. * Assemblies of God CU, Springfield, provided a loan to Marine Corps veteran Shawn Motlagh so he could buy a Rosati's Pizza franchise. "It's sad that banks don't want to loan money in this economy because small businesses could really help the economy improve," he told MCUA. * American Eagle CU, St. Louis, provided a loan to Dr. John Freund to mark his 20th anniversary in the field by expanding his St. Louis office. His business plan had been repeatedly rejected by other financial institutions and commercial lenders.
Like credit unions in other states, Missouri credit unions are working to support the Small Business Enhancement Act (H.R. 1418 and S 509), which would raise their member business lending cap to 27.5% from 12.25%, so they can offer more business loans at a time when the economy needs it. Raising the lending cap would result in an injection of $13 billion for small business lending and create 140,000 new jobs--without cost to taxpayers, said the Credit Union National Association.

CU System briefs (09/05/2011)

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* ONTARIO, Calif. (9/6/11)--The California and Nevada Credit Union Leagues and credit unions met with legislators in district meetings and town halls over a five-week period district work period about issues such as the passage of HR 1418 and S 509, which would increase credit unions' member business lending cap to 27.5% from 12.25%. Seven lawmakers supporting the legislation, including author Rep. Ed Royce (R) are from California. Credit unions met with: California Democrat U.S. Reps. Brad Sherman, Adam Schiff, and Judy Chu, and Republican Reps. John Campbell, Dana Rohrabacher; Tom McClintock, Darrell Issa and Gary Miller, as well as with Nevada U.S. Reps. Shelley Berkley (D) and Joe Heck (R). Credit union representatives also attended town hall discusses hosted by Reps. San Farr and Xavier Becerra. Becerra was named to the congressional "super committee" addressing the national debt crisis. The Credit Union National Association has urged credit unions to take the opportunity of the congressional recess to meet with lawmakers in the district. Pictured here are credit union leaders with Campbell. (Photo provided by the California and Nevada Credit Union Leagues) … * KANSAS CITY, Mo. (9/6/11)--Kansas City credit union leaders met with U.S. Rep. Emanuel Cleaver (D-Mo.) to urge support of lifting credit unions' member business lending cap to 27.5% from 12.25%. The meeting took place in Cleaver's district office Aug. 24, said the Missouri Credit Union Association (MCUA) (The Missouri difference Aug. 30). Cleaver said there is a need for jobs and he supports the bill. From left are: Jay Swearingen, MCUA; Ron Miller, Edison CU; Pat Yokley, CommunityAmerica CU; Cleaver; Amy McLard, MCUA; Tim Vogler, United Labor CU; and Mark Heineman, Catholic Family CU. The Credit Union National Association has encouraged credit unions to meet with their representatives in Congress during the August congressional recess. (Photo provided by the Missouri Credit Union Association) … * FARMERS BRANCH, Texas (9/6/11)--Members Choice CU, a $358 million asset credit union based in Houston, Texas, has been designated as a Preferred Lender by the U.S. Small Business Administration (SBA), according to the Texas Credit Union League (LoneStar Leaguer Sept. 2). The designation, which gives the credit union final credit decision and most servicing and liquidation authority for SBA 7(a) loans, streamlines the process to provide financial assistance to the small-business community. "Being part of this program allows Members Choice CU to help create jobs and further economic development in our area, and we couldn't be happier about that," said President/CEO Steve Gilman. To date the credit has granted more than $16 million in business loans to small businesses, including Kitchen 'n Bath Liquidators, Pigtails & Crewcuts, Fusion Taco among others …

Rep. Foxx receives N.C. CU Advocate award

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RALEIGH, N.C. (9/6/11)--About 45 credit union representatives joined the North Carolina Credit Union League (NCCUL) in presenting the CU Advocate Award to U.S. Rep. Virginia Foxx (R) Wednesday. Created by the league this year, the Credit Union Advocate Award honors state and federal legislators who have demonstrated an understanding of and appreciation for credit unions. “Congresswoman Foxx has consistently supported credit unions on issues of real importance, including bankruptcy cramdown, interchange and business lending,” said Dan Schline, NCCUL senior vice president of association services. “She has proven to be a terrific ally for credit unions and their three million members in North Carolina.” In accepting the award, Foxx praised credit unions for their advocacy efforts and for what she called “common-sense positions” on the issues. Members of the league's Governmental Affairs Committee vote on Credit Union Advocate Award nominees. The committee also selected U.S. Rep. Larry Kissell (D). Kissell accepted his award at the NCCUL Annual Meeting in in June. In addition to league staff, representatives attending the luncheon and award ceremony were from Allegacy FCU, Winston-Salem; Lion’s Share FCU, Salisbury; Members CU, Winston-Salem; Piedmont Advantage CU, Winston Salem; State Employees’ CU, Raleigh; Truliant FCU, Winston-Salem; Winston-Salem City Employees FCU; and First Carolina Corporate CU, Greensboro.

CUs not exempt from Texas gun law

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FARMERS BRANCH, Texas (9/6/11)--Credit unions are not exempt from a Texas law that restricts employers from preventing employees from having firearms or ammunition in their vehicles parked at work. The bill, SB 321, went into effect Thursday. It restricts an employer from prohibiting an employee who holds a license to carry a concealed handgun--or who otherwise lawfully possessed a firearm or ammunition--from transporting or storing the firearm or ammunition in a locked, privately owned motor vehicle in the employer's parking area. The law does not permit a person to carry the firearm or ammunition where it is otherwise prohibited by state or federal law. The law exempts certain schools and businesses involved in oil, gas and chemicals. Credit unions are not included in the exemptions, according to the Texas Credit Union League LoneStar Leaguer (Sept. 2). The league advised credit unions to review and possibly revise employment policies regarding employee possession of firearms or ammunition in cars parked in their parking lots.

CUs cope with Irenes inconveniences

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MADISON, Wis. (9/6/11)--Credit unions in the eastern part of the U.S. learned to cope with inconvenience in the wake of Hurricane Irene last week.
With devastating floodwaters, Vermont was among the areas most affected by Hurricane Irene. Sixty four state roads were closed due to flooding. (Photo provided by Association of Vermont Credit Unions)
Though it was not hit directly, Vermont was among areas affected most by Irene. Much of the state was devastated by flooding. Association of Vermont Credit Unions (AVCU) President Joe Bergeron summarized reports from state government, political leaders, and others to provide an update on the state’s recovery status on Friday:
* 120 homes destroyed or sustaining major damage; * 64 closed state roads; * 65 closed state bridges; * Four Red Cross shelters still in operation (along with several local shelters) for persons who lost housing; * 10,000 homes still without power; * 90 public schools still closed; and * $10 million in special low-interest financing for Vermont businesses and farms damaged by the storm is available from the Vermont Economic Development Authority.
A Vermont State Employees’ CU branch at the state office in Waterbury was flooded by the overflowing Winooski River and is expected to remain closed indefinitely. Although the homes of most of his staff avoided damage, Credit Union of Vermont CEO Brian Fogg reported that employee Austin Burbank had five feet of water in his basement. Fogg spent Monday with Burbank shoveling mud out of the basement and transporting three dump truck loads of debris, according to the AVCU (Newslines Express Sept. 2). Fogg also learned Aug. 29 that Credit Union of Vermont member Dennis Hayward was killed in a tractor accident related to the flooding. AVCU Project Manager Colin Ryan was stranded Sunday night when the road near Weston he was traveling on ended abruptly due to flooding damage.
Remnants of a metal bridge destroyed by floodwaters in Townshend, Vt. (Photo provided by River Valley CU)
Tom Edwards, manager of Green Mountain CU’s Rutland branch, was unable to reach home all week because of road damage seven miles from his home. He’s not sure when he will be able to return home, said AVCU. In Pennsylvania, Blue Chip FCU, Harrisburg, Pa., was without power until Wednesday. To continue serving members and meet end-of-the-month obligations, the credit union moved key equipment to a temporary office so back office postings such as direct deposits, share draft clearing, and posting mail/night drop deposits could be processed, according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Sept. 2). Staff set up a station in the credit union’s parking lot; distributed snacks, beverages and credit union giveaways; and employees took deposits from members. The deposits were then taken to the temporary office site for processing. Power resumed on Wednesday morning, equipment was moved back and set up, and the security system was back up and running by noon. “By noon, all was right with the world again,” Blue Chip President/CEO Cathi Martin told PCUA. Credit unions in eastern North Carolina also cleaned up in the wake of Hurricane Irene. Branch closures and some damage was reported near the direct path of the storm, but the main impact to operations seemed to be the loss of electrical power. By Thursday, all credit union branches were reported back on line and fully operational, according to the North Carolina Credit Union League (Weekly Update Sept. 2). State Employees’ CU (SECU), based in Raleigh, N.C., closed six branches Monday, while some others delayed opening. These closures and delays resulted from a loss of electrical power, but no significant structural damage was reported. Two SECU employees reported damages to their homes. A tree fell through the roof of one employee’s home. Two trees fell through the roof of another employee’s second residence. No one was injured in either instance. Marine FCU, Jacksonville, N.C., reported three branches closed early in the week due to a lack of power. The locations in New Bern, Havelock and Swansboro, which all lay near the path of Irene, reopened once electrical service was restored. Chief Operating Officer Jeff Clark noted that there was slight property damage, but the lack of power had a larger impact. Weyco CU had no power at any of its three branch locations in Plymouth, New Bern and Ayden on Monday, the North Carolina league reported. Manager Steven Hardison said Thursday that all three locations had power and had resumed normal operations. The storm damage was not limited to the immediate coastal areas, said the league. The drive through at Telco CU, Tarboro, N.C., was damaged by the wind. “The wind got underneath it and blew out some of the ceiling, a light fixture and some of the electrical lines," said CEO Charles Johnson. The exposed electrical lines and debris were secured on Wednesday and the drive through reopened. A contractor will repair the damage later. Tree limbs also snapped power lines at First Carolina People's CU, Goldsboro, N.C., which forced the credit union to close Monday. The hurricane prompted the National Credit Union Foundation to activate CUAid.coop to raise funds for credit union people impacted by the storm.

Organizations vendors vie for CUs correspondence services

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MADISON, Wis. (9/6/11)--Even before last week's developments in the corporate credit union system, service providers and other organizations, including other corporates, were announcing that they could provide correspondent, item processing services to credit unions considering leaving their current provider. Although credit unions that are members of U.S. Central Bridge Corporate, Western Bridge Corporate and Southeast Corporate FCU have been given time to weigh their options by the National Credit Union Administration (NCUA), the credit unions are being targeted with messages from service providers seizing an opportunity to grow and serve them. Last week, a group of corporates decided not to pursue a new charter, called PayNet, which would have potentially succeeded U.S. Central Bridge Corporate. Instead, they announced they would pursue partnerships to offer wholesale correspondence and investment service. Western Bridge Corporate and Southeast Corporate FCU also last week announced that their efforts to raise their capital goals by Aug. 31 had failed. Southeast Corporate is moving to Plan B--seeking a merger, and NCUA has announced contingency plans for Western Bridge. NCUA assured credit unions they need not make their service decisions immediately. It also urged credit unions to use due diligence in making the decisions about who would provide their correspondent services. (See related story, "Corporates' PayNet a no-go, prompts NCUA contingency plans.") The service providers offer an array of item processing services that can be confusing, so a credit union must be clear on which services it is getting from a provider . Some of the providers recently vying for partnerships stemming from the corporate credit union crisis include:
* Bluepoint Solutions, Vista, Calif., which announced a conversion plan for credit unions leaving Western Bridge well before the Aug. 31 capital deadline. The program provides credit unions with options of moving to their item processing in-house, to another corporate credit union or to a CUSO without investing in new branch capture software. The company, which was chosen a CUNA Technology Council "Best of Show" winner in 2010, has partnered with Catalyst Corporate, Corporate America CU, Corporate One FCU, CUsource, Mid-Atlantic Corporate FCU, and Palmetto Corporate Services. * ProfitStars' Enterprise Payment Solutions, Monett, Mo., a subsidiary of Jack Henry & Associates. It recently announced a partnership with Corporate One for electronic payments transactions and remote capture, check conversion and Check 21 settlement options. * Minnesota Item Processing Corporate (MnIPC), a St. Paul, Minn.-based credit union service organization (CUSO) that has served credit unions for more than 30 years, according to a release sent by the Minnesota Network of CUs. The check processor provides share draft processing, return item collection, long-term check image storage and home banking access, check deposit and collection, remote branch capture and merchant capture services. * iVia Exchange Services, a subsidiary of the Missouri Credit Union Association and a recently announced partner of the Kentucky Credit Union League, provides imaged item processing, remote branch capture, consumer deposit capture and point of deposit services. * ProDraft Service Inc., Bismarck, N.D., which signed up 26 credit unions this year for correspondent services such as wire, automated clearinghouse (ACH), credit, and international services, as well as share draft processing and check 21 deposit services. * Other corporates. Last week both Alloya Corporate and the new Catalyst Corporate, in press releases announcing they had met or exceeded their capital goals, touted their services to other credit unions that may be impacted by other corporates' situation.
These are just the providers that have contacted News Now in the past two weeks. There are more. What is clear is that credit unions have several options for service, but they will need to do due diligence to pick the services that best serve them and the corporate system.

Corporates PayNet a no-go prompts NCUA contingency plans

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ARLINGTON, Va., and LENEXA, Kan. (9/6/11)--The National Credit Union Administration (NCUA) said it is implementing contingency plans after the Payments Network FCU (PayNet) organizing council announced Friday that PayNet will not launch. Representatives from many of the nation's corporates met in Lenexa, Kan., last week to explore options for continued operation of payments products provided to corporates by Lenexa, Kan.-based U.S. Central Bridge Corporate FCU. Their conclusion: rather than charter a new corporate credit union, PayNet, the group will continue working cooperatively to create partnerships that allow uninterrupted products and services to the bridge's credit unions. The member-driven solution to charter PayNet as a vehicle to provide back-office payment and settlement services to consumers through the bridge corporate's member corporate credit unions "did not achieve sufficient support to launch PayNet as a viable business model," said NCUA in a press release. Scott Hunt, the agent for U.S. Central Bridge's conservatorship, announced NCUA would activate its contingency plans in a letter Friday to members of the bridge corporate. "NCUA will look to alternative resolution plans to facilitate the orderly transition of member services to other providers," Hunt said. "While we have a fiduciary duty to achieve the least, long-term cost resolution of U.S. Central Bridge, we remain committed to minimizing disruption to its corporate members, and in turn, natural person credit unions and American consumers." The agency said it has evaluated U.S. Central Bridge's individual service lines and will determine an appropriate resolution for each, including transitioning select services to other providers. It noted it has had "a number of contingency plans in place since the beginning of the corporate system resolution in preparation for this potential outcome." "We have no plans to immediately shutter U.S. Central Bridge operations, nor will we ask corporate credit unions to immediately transition away from U.S. Central Bridge," Hunt said. NCUA urged the 15 corporates involved in the failed PayNet initiative to "conduct due diligence on possible alternatives to ensure any eventual transition does not disrupt service to their members." The corporates' efforts had focused on organizing a new corporate credit union to purchase U.S. Central Bridge's various businesses to provide ongoing service to corporates. However, the group determined that would not provide the most efficient outcome for the Credit Union System, said the corporates in a press release Friday. “The efforts to organize an ongoing corporate credit union to acquire U.S. Central Bridge operations was an effort that needed to be explored, but it has been determined that partnering with leading vendors within the payments industry is the appropriate course of action at this time," said Brandt Peterson, executive vice president of SunCorp and a member of the Organizing Council. "Our primary goal always has been to ensure continuity of services to participating credit unions. We are much closer to a solution that will meet the needs of credit unions both in the short term and well into the future. The most important message for participating credit unions is that our solution will ensure minimal disruption to credit unions,” Peterson said. The group reaffirmed the importance of aggregation during the meetings with potential partners held during the past two days. Credit unions are cooperatives, and to that end, aggregating volumes and pooling resources provides the best outcome for the collective over time. Participating members include Alloya Corporate FCU, Catalyst Corporate FCU, CenCorp, CO-OP Financial Services, Corporate One, FirstCorp, Kansas Corporate, Kentucky Corporate, Missouri Corporate, SunCorp, Southeast Corporate, The Members Group, TriCorp, VolCorp, and Western Bridge Corporate FCU.

NEW Corporates explore U.S. Central Bridge service options

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LENEXA, Kan. (UPDATED at 10: 45 a.m. CT 9/2/11)--Representatives from many of the nation's corporates met in Lenexa, Kan., this week to explore options for continued operation of payments products provided to corporates by U.S. Central Bridge. Their conclusion: rather than charter a new corporate credit union, the group will continue working cooperatively to create partnerships that allow uninterrupted products and services to the bridge's credit unions. Recent efforts focused on organizing a new corporate credit union to purchase U.S. Central Bridge's various businesses to provide ongoing service to corporates. However, the group determined that would not provide the most efficient outcome for the Credit Union System. “The efforts to organize an ongoing corporate credit union to acquire U.S. Central Bridge operations was an effort that needed to be explored, but it has been determined that partnering with leading vendors within the payments industry is the appropriate course of action at this time," said Brandt Peterson, executive vice president of SunCorp and a member of the Organizing Council. "Our primary goal always has been to ensure continuity of services to participating credit unions. We are much closer to a solution that will meet the needs of credit unions both in the short term and well into the future. The most important message for participating credit unions is that our solution will ensure minimal disruption to credit unions,” Peterson said. The group reaffirmed the importance of aggregation during the meetings with potential partners held during the past two days. Credit unions are cooperatives, and to that end, aggregating volumes and pooling resources provides the best outcome for the collective over time. Participating members include Alloya Corporate FCU, Catalyst Corporate FCU, CenCorp, CO-OP Financial Services, Corporate One, FirstCorp, Kansas Corporate, Kentucky Corporate, Missouri Corporate, SunCorp, Southeast Corporate, The Members Group, TriCorp, VolCorp, and Western Bridge Corporate FCU.

CU System briefs (09/01/2011)

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* MANHATTAN BEACH, Calif. (9/2/11)--Kenecta FCU has unveiled a new Asset Utilization Loan Program for its mortgage lending division to assist high-net-worth borrowers with significant liquid assets. The program is tailored to the Manhattan Beach, Calif.-based credit union's 5/1, 7/1, or 10/1 Jumbo Adjusted Rate Mortgage (ARM). The borrowers, including self-employed and retired individuals, can use a percentage of those assets as income for qualifying purposes. "This is a valuable niche and a great opportunity for both our retail members and our wholesale business partners who have clients with strong credit histories and financial backgrounds, but are hampered by complex income situations," said Todd Helmerson, director of wholesale loan production. Eligible assets include checking, savings, certificates of deposit, stocks, bonds, 401(k)s, individual retirement accounts and insurance police surrender values. Annuities, trust funds and hedge funds can also be used if there is evidence that the funds are available to the borrower. Loans are available for $417,000 to $3 million. Kinecta has about $3.5 billion in assets … * BILLINGS, Mont. (9/2/11)--Valley FCU of Montana President/CEO C.H. "Chuck" Steele has announced he will retire, effective Jan. 1. He served the Billings, Mont.-based credit union as CEO for 26 years and served 46 years in the financial industry (BillingsGazette.com Aug. 30). The $170 million asset credit union has six branches in south-central Montana and one in Cody, Wyo. ...

Western Bridge members service will be uninterrupted--NCUA

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ALEXANDRIA, Va. (9/2/11)--United Resources FCU's bid to succeed Western Bridge Corporate FCU fell short of the bridge corporate's stated capital subscriptions goal of $200 million Wednesday, said the National Credit Union Administration (NCUA). Scott Hunt, agent for the conservator of Western Bridge, informed members Thursday in a letter that the corporate had not met its member-driven goal by Wednesday's deadline. However, NCUA "remains firmly committed to ensuring continuity of service and operations for all Western Bridge member credit unions," Hunt wrote in the letter. "We have no immediate plans to shutter Western Bridge's operations. NCUA is committed to an orderly and timely resolution that ensures uninterrupted service to all member credit unions." Credit Union National Association (CUNA) President/CEO Bill Cheney said, "We understand that a number of Western Bridge’s members are disappointed that the capital target was not reached. We believe that the agency’s actions and statement Thursday reflect its willingness to consider options for uninterrupted services to all Western Bridge member credit unions; that has been a priority of CUNA’s, and we will continue discussions with NCUA to be sure that is indeed the case. "At a meeting today with NCUA officials, CUNA’s Corporate Credit Union Next Steps Working Group will seek assurances that natural person credit unions will continue to have access to the services that they need," Cheney added. Hunt's memo also noted that "while Western Bridge is a temporary entity, NCUA seeks a holistic approach in addressing member credit union service needs that will not require significant changes to how your credit union currently does business. However, credit unions that choose to directly seek an alternative provider in the coming months are still free to do so." During the fall 2010 corporate system resolution town hall meetings, audiences were briefed on the possible inability of one or more corporates to achieve their planned capital raise. NCUA planned for that contingency when it developed its corporate system resolution plan. The agency said it is enacting its contingency plan to provide an alternative, through which Western Bridge members can continue to obtain corporate services for the long term. The service infrastructure and member service volume at Western Bridge have significant value, said NCUA, which is working to solicit acquirers to obtain the business as a package transaction that will have minimal impact on member credit unions. "This may be accomplished through a merger with or an acquisition by another corporate or wholesale financial institution," said NCUA. NCUA's efforts to negotiate for a package transaction "will be best maximized by retaining the volume of members and service activity that currently exists at Western Bridge. Stabilizing the membership and service base maintains the value of the institution for potential bidders," said NCUA. "We believe the new plan will provide critical elements that each credit union will want to consider as part of its due diligence process before making a final decision on its future service needs," said Hunt's letter. "As such, member credit unions may want to continue utilizing Western Bridge services during this process." NCUA said it expects a solicitation and bidding process to begin soon. To enable a fair bidding process, obtain the best possible solution for member credit unions, and ensure the best financial outcome, within sound public policy, for the Temporary Corporate Credit Union Stabilization Fund, much of the process must be done confidentially, said the agency. NCUA will keep Western Bridge members informed "to the greatest extent possible." Some members already may have finalized a decision to transition to other service providers. NCUA encouraged every member, as part of their individual contingency planning, "to have a full understanding of the products and services they receive from Western Bridge in order to understand the potential effect of a transition to a new provider." NCUA said its staff will work with those credit unions to ensure the process is smooth and timely. NCUA's Frequently Asked Questions about the corporate resolution emphasizes that credit unions do not need to take action at this time, and that their funds are safe. For more, use the link.

WesCorp officers offer arguments in NCUA case

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LOS ANGELES (9/2/11)--Officers of the defunct Western Corporate FCU who were sued by the National Credit Union Administration (NCUA) after the corporate's collapse have filed counterclaims to NCUA's allegations in the U.S. District Court in Los Angeles. They allege that NCUA was aware of WesCorp's investment strategies and approved them. NCUA, in its role as WesCorp's conservator, sued the officers and directors alleging breach of fiduciary duty and fraud related to investments that caused losses at the corporate during the nation's financial crisis. The court in July dismissed the case against WesCorp's former directors but denied the officers' request to dismiss separate charges against them. The counter claim documents were filed separately Aug. 15-16 by attorneys for Robert A. Siravo, former president/CEO of WesCorp; Todd M. Lane, former chief financial officer; Robert J. Burrell, executive vice president; Timothy T. Sidley, former vice president for risk assessment and chief risk officer; and Thomas E. Swedberg, former vice president. The officers' counterclaim documents say that NCUA knew, approved of and encouraged WesCorp's investment strategies and had direct oversight and supervision of WesCorp. For example, Burrell's counterclaims allege that NCUA and WesCorp's members knew, approved of and encouraged WesCorp's investment strategy. NCUA's Office of Corporate Credit Unions monitored the corporate daily, with on-site examiners, annual exams, and a full-time capital market specialist was located at WesCorp's facilities. The documents said NCUA was critical of WesCorp's prior and so-called conservative management, disapproved of that management, suggested or required that WesCorp's board hire new management and approved of…the hiring of the new management. According to court documents, the officers claim that NCUA:
* Gave WesCorp special permission to buy riskier investments than WesCorp ever bought and far riskier investments than those that the agency has attacked in its lawsuit; * Gave WesCorp authority to invest in securities rated as low as BBB; * Approved of WesCorp's investment in Option ARM mortgage-back securities (MBS), lower tranche MBS and reduced documentation MBS; * Approved of WesCorp's investment-related policies and procedures; * Knew that the ratings agencies also praised WesCorp's investments; and * Publicly stated that AA and AAA-rated private label MBS were appropriate investments and nearly as safe as agency MBS.
In addition to the allegations, each defendant is seeking reimbursement for legal expenses incurred in the case. U.S. District Judge George Wu set several dates for the case to proceed, including a post-mediation status conference on March 1, 2012. If the case proceeds according to schedule, a pretrial conference could be heard as early as Sept. 20, 2012.

Sunshine State sees mini-boom in mortgages

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MIAMI (9/2/11)--Florida--one of the states hit hardest during the recession--is experiencing a mini-boom in mortgages, according to a new national survey. The Sunshine State accounted for more than one of out five home loans from April to June, according the most recent survey of lenders from the Mortgage Bankers Association (South Florida Sun-Sentinel Sept. 1) Fewer Florida residents are missing house payments, according to the association. That sign of stability is giving lenders a sense of confidence, said Rich Helber, president/CEO of Tropical Financial CU of South Florida, Pembroke Pines, Fla. Helber told the Sun-Sentinel home prices have stabilized in South Florida. Tropical Financial CU of South Florida has loosened mortgage requirements and accepts more applicants with high debt if they have a good history of making payments. Mortgage applicants may not be required to make a 20% down payment if they have a credit score of 650 or above, he added.

CUNA closed on Labor Day no News Now Monday

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WASHINGTON and MADISON, Wis. (9/2/11)--In observance of the Labor Day holiday the Washington, D.C., and Madison, Wis., offices of the Credit Union National Association (CUNA) will be closed on Monday. News Now will not publish a Monday edition, but will resume regular publication Tuesday.

CUAD CUs sponsor flood recovery conference

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BISMARCK, N.D. (9/2/11)--More than 200 attendees and dignitaries gathered for the Community Flood Recovery Conference Wednesday in Bismarck, N.D. The Credit Union Association of the Dakotas (CUAD)
Click to view larger image Speakers at the Community Flood Recovery Conference sponsored by the Credit Union Association of the Dakotas (CUAD) Wednesday in Bismarck, N.D., and Thursday in Minot, N.D., included, from left: U.S. Rep. Rick Berg (R-N.D.) and CUAD CEO/President Robbie Thompson. (Photo provided by the Credit Union Association of the Dakotas)
teamed up with 10 credit unions to be sole title sponsor of the event. CUAD CEO/President Robbie Thompson welcomed attendees and spoke of people helping people. "Working collectively, we are able to show our commitment, dedication and support to our communities we serve," he said. Speakers included Bismarck Mayor John Warford, Mandan Mayor Tim Helbling, Major-General David Sprynczynatyk, U.S. Sen. John Hoeven (R-N.D.), and U.S. Rep. Rick Berg (R-N.D.). Also speaking was a staffer from the office of U.S. Sen. Kent Conrad (D-N.D.). The conference continued in Minot, N.D. on Thursday. "We jumped at the opportunity to jointly sponsor this important community effort along with other Bismarck and Minot area credit unions," said Thompson. "This is another of the many ways that credit unions are helping rebuild areas impacted by this summer's devastating flooding in North and South Dakota."

Alaskas Eckhardt wins Wegner lifetime achievement award

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MADISON, Wis. (9/2/11)--National Credit Union Foundation (NCUF) has named William Eckhardt, president/CEO of Alaska USA FCU in Anchorage, Alaska, as one of two winners of the 2012 Herb Wegner Memorial Award for Lifetime Achievement. This is the first time in NCUF’s history that two awards for lifetime achievement will be given. Tom Dorety, president/CEO of Suncoast Schools FCU, Tampa, Fla., will also receive a Lifetime Achievement Award. (Use the link.) The awards will be presented on March 19 during the Credit Union National Association’s (CUNA) 2012 Governmental Affairs Conference in Washington D.C. Eckhardt joined Alaska USA in 1971 as an assistant general manager. He became the organization’s CEO in 1979. “Bill Eckhardt is and has been an extraordinary leader under extraordinary circumstances,” said David Chatfield, former president/CEO of the California Credit Union League. “Under his leadership, Alaska USA FCU has consistently achieved amazing advances in operational innovation and member services, despite what to others might seem insurmountable obstacles due to its remote location, vast geography, harsh environment, and extreme ‘boom and bust’ economic conditions. A lifetime in Alaska and exceptional management skills has enabled Bill to lead Alaska USA to not just survive, but thrive in its approach to operations and the unique ‘Alaska USA’ brand of member service.” Alaska USA FCU was the first credit union to offer 30-year mortgage loans and one of the first to offer share drafts. It was also among the first to serve its members nationally and internationally through a dedicated member service center, and was a leader in providing mortgage servicing and insurance trust services. The credit union also coordinated one of the first joint ventures to create regional ATM network Alaska Option. Under Eckhardt’s leadership, Alaska USA FCU was among the first credit unions to use an in-house political and regulatory advocacy team at the state and national level. Eckhardt has served on the board of directors of CUNA and CUNA Mutual Group, and was a founding member of the Filene Research Institute. Eckhardt has also led Alaska USA FCU’s efforts in extending services to Alaska Natives (Inuit, Aleut, Athabaskan, Tlingit and Haida). When Alaska’s Natives were granted millions of dollars and millions of acres of land by Congress in 1971 to settle their aboriginal land claims, the National Credit Union Administration asked the credit union to temporarily expand its field of membership and provide badly needed financial education to Alaska’s Natives. Alaska USA FCU responded by providing membership and opening offices in larger Native villages, and trained Alaska’s Natives to staff those offices. Eckhardt personally traveled widely in the Alaska bush to explain the credit union difference and also opened accounts for Alaska’s Natives. In 1981, Alaska USA FCU was granted authority by congressional action to permanently serve Alaska’s Natives and the regional corporations formed out of the Alaskan Native Claims Settlement Act. It was the only time in history that Congress has taken action to extend the field of membership of a single credit union.

Top 10 iNews Nowi stories for August (09/01/2011)

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MADISON, Wis. (9/2/11)--An article about how a 513-point stock market plunge--a byproduct of the nation’s debt-ceiling negotiations--would affect credit unions was the most read News Now story in August. Here is a list of the top 10 most-visited stories for the month. 10. Compliance: New employee rights notices needed soon WASHINGTON (8/31/11)--The majority of private-sector employers will need to publicly post notices of employee rights as detailed under the National Labor Relations Act (NLRA) in their offices beginning on Nov. 14 under a new rule announced by the National Labor Relations Board (NLRB) Tuesday. 9. Fed action means no short-term rate hikes soon, says CUNA WASHINGTON (8/10/11)--With the decision by the Federal Reserve policymakers Tuesday to hold interest rates at between 0% and 0.25% and keep the rate at “exceptionally low levels” at least through mid-2013, credit unions can’t plan on increases to short-term rates anytime soon, said Credit Union National Association’s chief economist. 8. CUNA Mutual: Another wave of ATM fee lawsuits hits CUs MADISON, Wis. (8/10/11)--Another rash of lawsuits continues to be filed against financial institutions for failing to properly disclose ATM fees. CUNA Mutual Group reminds credit unions simple preventative steps can help them avoid costly fines and legal fees. 7. CUs outperform banks on national customer loyalty metric CHICAGO, Ill. (8/8/11)--Credit unions are outperforming banks when it comes to maintaining member/customer loyalty, according to a nationally recognized customer loyalty metric. 6. MasterCard, CUNA team up for Aug. 17 interchange call WASHINGTON (8/15/11)--MasterCard's plans for a two-tiered debit interchange fee rate structure, how that rate structure will impact credit unions, and the anticipated time table for implementation will be covered during an Aug. 17 Credit Union National Association (CUNA) audio conference call. 5. Former CU manager banned from further work ALEXANDRIA, Va. (8/17/11)--The National Credit Union Administration (NCUA) on Tuesday prohibited Brian Zimmerman, a former manager and treasurer of Lebanon, Pa.-based LEBCO Educators FCU, from future work at any federally insured financial institution. 4. TCCUSF assessment is likely 25 bp ALEXANDRIA, Va. (8/29/11)--The National Credit Union Administration’s (NCUA) 2011 Temporary Corporate Credit Union Stabilization Fund (TCCUSF) assessment, which is set to be announced at an NCUA board meeting later today, will likely be around 25 basis points (bp) of total insured shares, Credit Union National Association (CUNA) Chief Economist Bill Hampel has said. 3. Low minimum hindered prepay plan: CUNA WASHINGTON (8/3/11)--A higher minimum size for the National Credit Union Administration’s (NCUA) proposed prepayment program for corporate credit union stabilization assessments would have attracted more credit union participation, the Credit Union National Association (CUNA) noted when the agency announced Tuesday it had not received sufficient credit union pledges to go forward with the plan. 2. MasterCard tells CUs of interchange structure plans WASHINGTON (8/18/11)--MasterCard plans to implement a two-tiered debit interchange fee structure, and currently plans to keep its existing market-based rate structure in place for credit unions and other financial institutions with under $10 billion in assets, MasterCard Global Head of Public Policy Shawn Miles said during a Wednesday conference call. 1. How stock market woes may impact CUs MADISON, Wis. (8/8/11)--Thursday's 513-point plunge in the stock market--the worst decline in nearly two years--could affect credit unions and their members.

NEW Western Bridge members will get uninterrupted service says NCUA

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Members' drive for United Resources FCU to succeed Western Bridge Corporate FCU fell short of the bridge corporate's stated capital subscriptions goal of $200 million Wednesday, announced the National Credit Union Administration (NCUA). Scott Hunt, agent for the conservator of Western Bridge, informed members Thursday in a letter that the corporate had not met its goal by Wednesday's deadline. NCUA "remains firmly committed to ensuring continuity of service and operations for all Western Bridge member credit unions," Hunt wrote in the memo to members. "We have no immediate plans to shutter Western Bridge's operations. NCUA is committed to an orderly and timely resolution that ensures uninterrupted service to all member credit unions." Credit Union National Association (CUNA) President/CEO Bill Cheney said, "We understand that a number of Western Bridge’s members are disappointed that the capital target was not reached. We believe that the agency’s actions and statement today reflect its willingness to consider options for uninterrupted services to all Western Bridge member credit unions; that has been a priority of CUNA’s and we will continue discussions with NCUA to be sure that is indeed the case. "At a meeting Friday with NCUA officials, CUNA’s Corporate Credit Union Next Steps Working Group will seek assurances that natural person credit unions will continue to have access to the services that they need," Cheney added. Hunt's memo also noted that "while Western Bridge is a temporary entity, NCUA seeks a holistic approach in addressing member credit union service needs that will not require significant changes to how your credit union currently does business. However, credit unions that choose to directly seek an alternative provider in the coming months are still free to do so." During the fall 2010 corporate system resolution town hall meetings, audiences were briefed on the possible inability of one or more corporates to achieve their planned capital raise. NCUA planned for this known contingency when it developed its corporate system resolution plan. The agency said it is enacting its contingency plan to provide an alternative, through which Western Bridge members can continue to obtain corporate services for the long term. The service infrastructure and member service volume at Western Bridge have significant value, said NCUA, which is working to solicit acquirers to obtain the business as a package transaction that will have minimal impact on member credit unions. "This may be accomplished through a merger with or an acquisition by another corporate or wholesale financial institution," said NCUA. NCUA's efforts to negotiate for a package transaction "will be best maximized by retaining the volume of members and service activity that currently exists at Western Bridge. Stabilizing the membership and service base maintains the value of the institution for potential bidders," said NCUA. "We believe the new plan will provide critical elements that each credit union will want to consider as part of its due diligence process before making a final decision on its future service needs," said Hunt's letter. "As such, member credit unions may want to continue utilizing Western Bridge services during this process." NCUA said it expects a solicitation and bidding process to begin soon. To enable a fair bidding process, obtain the best possible solution for member credit unions, and ensure the best financial outcome, within sound public policy, for the Temporary Corporate Credit Union Stabilization Fund, much of the process must be done confidentially, said the agency. NCUA will keep Western Bridge members informed "to the greatest extent possible." Some members already may have finalized a decision to transition to other service providers. NCUA encouraged every member, as part of their individual contingency planning, "to have a full understanding of the products and services they receive from Western Bridge in order to understand the potential effect of a transition to a new provider." NCUA said its staff will work with those credit unions to ensure the process is smooth and timely.

Fitch affirms Southeast Corporate rating

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NEW YORK (9/2/11)--Fitch Ratings has affirmed the “A+” long-term issuer default rating (IDR) and “F1+” short-term IDR of Southeast Corporate FCU, Tallahassee, Fla. Fitch’s rating outlook for Southeast Corporate is stable. Southeast Corporate FCU announced Aug. 26 that its capital commitments received fell short of the $80 million goal necessary to operate as a stand-alone corporate (News Now Aug 29). It is looking for a merger partner. Fitch has also downgraded the viability rating of Southeast to “c” from “ccc” based on the announcement that the corporate failed to recapitalize. Southeast’s viability rating of “c” and its individual rating of “E” have been placed on rating watch negative. All other ratings were affirmed by Fitch. Fitch’s affirmation of Southeast’s long-term IDR reflects that the company’s IDR is currently at its support rating floor. Southeast continues to benefit from support mechanisms put in place to maintain liquidity in the corporate credit union system and is still operating with regulatory support from the National Credit Union Association, given its weak capital position, Fitch said. The downgrade of the viability rating and the placement on negative rating watch reflects Fitch’s concern that because of its failure to raise sufficient capital to meet new regulatory standards Southeast is at risk of regulatory intervention.

CU Central of Canada forms CU Nation grassroots effort

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TORONTO (9/2/11)--Credit Union Central of Canada has created the CU Nation, a network of grassroots advocates. CU Nation will provide:
* A chance to participate in Canada’s credit union lobby day and orientation session on Parliament Hill; * Training webinars to build skills to persuade legislators; * Templates for communicating with Parliament members; and * Information to help shape Canada’s credit union message.
Credit Union Hike the Hill 2011 will take place Nov. 14 and 15 in Ottawa. It will include a Government Relations Forum with political speakers, training and meetings with legislators. For more information, e-mail dorsek@cucentral.com.