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CU System briefs (09/29/2012)

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  • TUSCALOOSA, Ala. (10/1/12)--A Tuscaloosa, Ala., man was sentenced Wednesday in a federal court in Tuscaloosa  to 41 years in prison for three credit union robberies and an escape from a detention center in 2011 (AL.com Sept. 27). Richard Patton, 22,  pleaded guilty to two counts of armed robbery and one count of using a firearm during a crime of violence in connection with the Feb. 1,  2011 robbery of Tuscaloosa County CU and the April 20, 2011 robbery of Alabama CU. The plea bargain included a charge of escaping from the Cullman County Detention Center on Dec. 2.  The sentence also incorporated an earlier 13 1/2-year sentence for another robbery on April 26, 2011 at the Northport branch of Tuscaloosa County FCU. Some of the sentences will run concurrently and the rest will run consecutively to the earlier sentence. Patton also was ordered to pay $58,000 in restitution and undergo five years of supervision after his prison term  …
  • BENSENVILLE, Ill. (10/1/12)--A former mortgage officer pleaded guilty Wednesday to stealing nearly $200,000 from her employer, Bensenville (Ill.) Community CU.  Desiree Cortes, 31, faces four to 15 years in prison after allegedly opening five credit cards in the $19 million asset credit union's name and charging nearly $200, 000.  She allegedly confessed to her supervisor in December after learning the credit union was getting a new computer system that would expose the thefts, said the DuPage County Prosecutor's office (Daily Herald Sept. 27) …
  • TAMPA (10/1/12)--Tanisha Murphy, 22,  a teller at Tampa-based Suncoast Schools FCU, has been charged with fraudulent use of personal information and grand theft, according to the sheriff's department (Tampa Bay Online Sept. 27). Authorities said she allegedly disguised her voice and called the credit union to try to wire $8,500 from an account by pretending to be the account holder. However, the credit union caught on and did not wire the money.  Suncoast Schools FCU is considered one of the most aggressive local institutions fighting fraud in Tampa Bay, said the sheriff's office. It has helped law enforcement at least three times in the past few months, said the article …
  • PORTLAND, Maine (10/1/12)--A Maine man has pleaded guilty in a U.S. District Court to the armed robbery on May 29 of Portland-based Infinity FCU's Arundel branch (Bangor Daily News Sept. 28).  Travis Leeman, 30, of Brunswick, Maine, was charged with bank robbery and use of a firearm in a crime of violence. The incident occurred after 9:30 a.m. ET on May 29 when a man wearing a two-piece rain suit and an orange face mask entered the credit union, brandished a .380-caliber pistol, announced the robbery and demanded money. He then jumped over the counter, ordered tellers to empty the drawers and presented a dark colored cooler bag for the loot. Before fleeing with $7,691, he ordered tellers to the ground and threatened that a partner was outside and he didn't want there to be a shootout. Investigators traced the bag to a local Walmart and used store surveillance tape to identify who bought the item. The man got into a truck with a logo for a local business at which Leeman was employed. He faces up to 25 years in prison, an additional mandatory seven years to life on the gun charge …

Industry is moving to paperless mortgages

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ATLANTA (10/1/12)--The mortgage lending industry is moving toward paperless mortgages at a robust rate, according to research from Xerox Mortgage Services.

Forty-three percent of lenders surveyed indicated that within the next four years, more than half of mortgage loans will be closed electronically, said the Atlanta-based documents management company in its seventh annual Path to Paperless survey. That compares with 28% who said so in 2011.

What's more, 90% of origination, underwriting, archiving, investing/funding and servicing professionals said an access to an audit trail is a key benefit to going paperless, while 88% indicated they would consider compliance a key factor in their shopping for a paperless mortgage solution.

Collaboration is also important, said the study. If paperless mortgages are to become the norm rather than the exception, everyone from underwriters to attorneys will need to be on board with the process, said Xerox in a press release last week. Credit unions, to stay competitive with the industry, will move to e-mortgages and automated closings.

"The emphasis on collaboration has more than doubled in the last year, with 96% of survey respondents (up from 45% in 2010) indicating that working together through an electronic loan folder is critical to achieving a paperless mortgage environment," said Xerox.

The survey also showed the number of respondents who implemented components of a paperless mortgage rose 15%, with:

  • Sixty-one percent using paperless origination and underwriting;
  • Sixty-one percent electronically delivering closed loan folders to investors; and
  • Thirty-nine percent leveraging electronic acknowledgement and e-signatures on disclosure documents.
Most respondents indicated that uncertainty centering on the Mortgage Electronic Registration Systems (MERS) and the government-sponsored enterprises Fannie Mae and Freddie Mac, which underwrite many mortgages, would not impact their initiatives to go paperless on mortgages, said Xerox.

MERS, a company set up by banks, was recently ruled in the Washington state Supreme Court as not having legal authority to foreclose on mortgages. It is lobbying to build a national recording database for mortgages (Reuters Sept. 14).

Fannie and Freddie both have plans to tighten lending standards for some groups of homebuyers and the Dodd-Frank Act includes more mandates for mortgage disclosure requirements, said the American Banker (Sept. 27).

To access the Xerox survey, use the link.

20 of households have student debt but CUs helping

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WASHINGTON and FARMERS BRANCH, Texas (10/1/12)--Nearly one in five U.S. households had college debt in 2010, double the debt in 1989 and up 15% from 2007, with the biggest burdens on the young and the poor, says a new study. But credit unions are helping out in several ways.

The fact that Money Mission also offers scholarship opportunities for high school seniors is what sold Coastal Community FCU President/CEO Carol Gaylord-Purdy on the program.

"We've wanted to offer a scholarship program for some time," she told the league, "but we've lacked the expertise, as well as the time and resources to develop one."  With a child in college, she knew the financial burden college can place on families.

"With minimal monthly cost, through Money Mission we are able to offer our members an opportunity to earn scholarship dollars, thereby providing some financial relief to families," she said. The more credit unions signing up for Money Mission, the more scholarship dollars are available, she said.

A+ FCU, a $955 million asset credit union in Austin, has a scholarship program and has also partnered with Austin Community College (ACC)  Student Life to offer what it says is the nation's first community college savings challenge, the Riverbat Savings Challenge, said the league.

The first 10 contestants have been chosen from more than 90 ACC students who applied. The contestants will compete for a $2,500 grant prize and other cash prizes.  The challenge begins this month and runs to March. To follow their progress as they work toward their goals, use the savings challenge link.

BofA sees need for more small-biz services

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MADISON, Wis. (10/1/12)--While some banks have maintained that there isn't a need for more small business loans and that credit unions shouldn't be given more opportunity to lend to small businesses--the Bank of America is hiring small-business bankers to work with that specific market, a sign that small businesses do need more service--and credit--from financial institutions.

The Charlotte, N.C.-based BofA said last week it will hire 130 small-business bankers throughout Florida to offer guidance for small-business owners. That's in addition to its previous announcement that it would hire about 1,000 small-business bankers nationwide, BofA said in a press release.

"Small businesses are the lifeblood of our local and national economy," said Robb Hilson, Miami-based BofA small-business executive. The comment echoes what credit unions have been saying all along, in their attempts to get more authority to offer small-business loans to help the economy. During the financial crises, many banks cut back business lending, while credit unions made loans to that market.

The bank, in a semi-annual study in May of small-business owners, said that 27% of Miami small business owners considered themselves as very financially savvy, but the remainder admitted they need help. "Small-business owners have complex financial needs that are unique to each industry and business," said Steve Turner, BofA Southeast region sales executive.

Many small-businessowners are challenged when it comes to understanding financial management, said a Florida-based publication, HispanicBusiness.com (Sept. 27), It noted that several other banks and credit unions also offer specialized service to small-business owners.

BofA's announcement comes amid bankers opposition to credit unions' push to get Congress to pass the Small Business Lending Enhancement Act, which would increase credit unions' member business lending (MBL) cap to 27.5% of assets, up from the current 12.25%.

Small businesses are struggling to get credit, and the Credit Union National Association (CUNA) estimates that raising the cap would mean small businesses could get $13 billion in additional loans that would help create more than 100,000 jobs, at no expense to the taxpayer.

Bethpage FCU to sponsor best of awards for small biz

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LONG ISLAND, N.Y. (10/1/12)--In efforts to grow its small-business lending and brand, Bethpage FCU in Long Island, N.Y., has become the name sponsor for the "Best of Long Island" awards presented by the Long Island Press.

The $4.8 billion asset Bethpage FCU--the biggest credit union in the state--signed a three-year deal to be the name sponsor of the awards (Long Island Business News Sept. 27).

Small businesses all over the area display Best of Long Island signs, so it's a great promotion to be a part of, Linda Armyn, Bethpage senior vice president, told the publication.

In addition to the awards sponsorship, the credit union intends to hire two teams of small-business lenders in the first quarter of 2013 and more aggressively market its services to small businesses, Armyn said.

Bethpage FCU has decided to "formalize" its small-business program--which wasn't a core element to its retail branching business before--and is investing a "couple of million dollars," into the effort, she added.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

Wisconsin opens state Fin. Lit. Award nominations

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MADISON, Wis. (10/1/12)--Credit unions in Wisconsin have a chance for recognition for their financial literacy efforts in the state. Nominations for the 2012 Wisconsin Financial Literacy Award will be accepted through Nov. 30, according to the Governor's Council on Financial Literacy.

Individuals or organizations may be nominated for the award, which recognizes efforts at promoting personal financial literacy in the state, according to the Wisconsin Department of Financial Institutions (DFI).

Judges will use these criteria in deciding the awards: innovative implementation; demonstrated measurable results; collaboration with partners; and a scope that is statewide or potentially statewide or focused on need-based groups.

Last year, three organizational winners involving credit unions were among the eight organizations and individuals receiving the award. They included:

  • Investor Education in Your Workplace, a program of the Wisconsin Credit Union League;
  • Money Mission, a money management simulation game originated by the league and offered to credit unions across the country in a program administered by the Credit Union National Association;  and
  • UW CU, Madison, Wis., which hosted free financial education seminars (News Now Dec. 27).
The Governor's Council will select recipients at its December meeting. The state DFI, through its Office of Financial Literacy (OFL), promotes financial literacy statewide. DFI Secretary Peter Bildsten is vice chair of the council, and OFL Director David Mancl is the council's executive director.

Equifax More stability in auto loans credit cards

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ATLANTA (10/1/12)--Auto lending balances and new accounts in the U.S. are increasing steadily, with the number of new accounts opened in the first half approaching pre-recession levels, according to credit bureau Equifax's latest monthly National Consumer Credit Trends Report.

Credit unions should take note of these lending opportunities.   

Auto lending is gaining strength, reflecting increasing demand for new cars, Equifax said. Year-to-date through June, total auto lending has reached $207 billion, a 13.7% increase over the volume during the same period in 2011.

"The average age of cars on the road today in the U.S. is the highest ever recorded, and consumers are ready to replace these older vehicles," said Equifax Chief Economist Amy Crews Cutts. "At the same time, the financial picture has improved sufficiently that we are seeing auto lending markets become facilitators rather than obstacles to meeting this demand, especially in the near-prime segment of the market that had all but ceased to exist during the worst of the financial crisis and recession," she added.

Sales of new cars and light trucks increased nearly 15% during the first half of the year, dominated by sales of smaller, more efficient and cheaper vehicles. During the first half of this year, auto lending at 10.7 million loans is the highest since 2007, when 11 million loans were opened.

Delinquency and write-off rates on auto loans and leases are well below levels at the start of the recession, Equifax said. Write-off rates in terms of dollars in August were one-third of what they were at the peak in March 2009 (2.1% versus 6.1%), while the percentage of auto account write-offs was about half of the peak volume (2.5% versus 5.2%). Write-off rates using both dollars and units exceeded 4% at the start of the recession.

Other credit highlights from the most recent data include:

Bank Credit Cards:

  • Nationally, bank credit card origination credit limits year-to-date through June increased more than 36% from their recession low, to $87.3 billion in 2012 from $55.5 billion in 2010.
  • The total number of bank credit card accounts exceeded 300 million for the first time since April 2010, a 28-month high.
  • While the amount of credit available--the difference between credit used and credit limits--has risen since February 2011, use rates continued to fall until May of this year, when they hit a fiv-year low of 22.1%.                                                                                                                    
  • Use rates rose to 22.4% and the amount of credit available was $1.87 trillion in August.
Retail Credit Cards:

  • Nationally, retail credit card origination credit limits year-to-date increased more than 15%, to $30.4 billion through June from $25.8 billion in 2010.
  • Retail credit card balances in August were more than $51 billion--a 33-month high.
  • Total retail credit card limits were at more than $340 billion through August--a 15% increase from May's $290 billion and the highest level in 27 months.
Student Loans:

  • New student loans increased more than 15%, to $30.3 billion year-to-date through June, from $25.6 billion in 2010.
  • Student loan balances increased throughout the recession and subsequent recovery, reaching more than $800 billion through August.
  • Student loan write-offs totaled $10.6 billion year-to-date through August, an increase of more than 10% from same time a year earlier--$9.5 billion in 2011.
  • The average amount of student loans was $9,467 in June--more than 67% greater than the recession low of $5,660 in 2008.
  • The average student loan size is increasing at a slower rate than overall student borrowing. The average single student loan in June was $5,701, compared with $4,126 in June 2008, with students seeking multiple loans to cover their education costs.

Maine league endorses 99 candidates

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PORTLAND, Maine (10/1/12)--The Maine Credit Union League has endorsed 99 candidates for the 2012 Maine House and Senate elections.

For the Maine House elections, the league endorsed 70 candidates--35 Democrats, 34 Republicans and one independent (Weekly Update Sept. 28).

For the Maine Senate elections, the league endorsed 29 candidates--17 Republicans, 11 Democrates and one independent.

The endorsements were made based on responses to a questionnaire, which had a 45% return rate from candidates; candidates' voting record, if applicable; and their relationship with credit unions.

Of the 99 candidates endorsed, 12 were current or former credit union board members, six of whom are still active.

All the endorsed candidates received letters from the league last week.

"Our list of endorsements again reinforces that we are a bipartisan organization that places a high priority on supporting candidates who support credit unions, regardless of their party," said John Murphy, league president. "This positions us well as working with both parties."

Oregon CU KASASA take-over county

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From left, Scappoose Dairy Queen employees Renee Vocana, Kaitlin Eazer and Martina Marie Rose Dick pose for a photo as part of St. Helens (Ore.) Community FCU "take-over," in which SHCU employees visit a local business to promote KASASA checking account products and reward the customers of the local business with a free product.
Scappoose (Ore.) High School student tellers Kyle Sammons (left) and Jacob Stafford (as Buddy Bear) help ring in the lunch crowd for the Fultano's Pizza take-over in Scappoose. (Photos provided by St. Helens Community CU)
ST. HELENS, Ore. (10/1/12)--St. Helens (Ore.) Community FCU (SHCU) and KASASA worked with local businesses in Columbia County this summer to stage a "take-over," where the credit union's employees visit a local business to promote KASASA checking account products and reward the customers of the local business with free product.

KASASA is a new brand of free, rewards checking accounts. SHCU members can choose the type of rewards--a high-interest rate of return or digital downloads from iTunes or Amazon.com. 

During the summer months, the $161 million asset SHCU and KASASA took over six local businesses: Columbia Theatre, Sunshine Pizza, Dutch Bros. Coffee in St. Helens and Scappoose,  Hometown Pizza and Fultano's Pizza in Scappoose.

During the take-overs, they rewarded patrons with more than $2,800 in movie tickets including a drink and popcorn, pizza lunches, ice cream treats and coffee. The local businesses taken over saw a boost in business, said SHCU.

"St. Helens Community FCU is one of the best financial institutions ever," said Sandra Western of Dairy Queen Scappoose, one of the businesses taken over.

SHCU and KASASA next plan to take-over the homecoming football games at St. Helens, Scappoose and Rainier High Schools. The first 250 fans to arrive at each game will be rewarded with a free stadium seat cushion and an entry to win an Apple iPad. The iPad will be given away during the third quarter.

Indonesian co-op reps get in-depth look at Minn. CUs

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ST. PAUL, Minn. (10/1/12)--In the spirit of the International Year of Cooperatives, Minnesota Credit Union Network (MnCUN) staff met with Indonesian cooperative representatives Tuesday to discuss government oversight, credit unions and industry growth.

Click to view larger image Minnesota Credit Union Network (MnCUN) staff met with Indonesian cooperative representatives Tuesday to discuss the growth and development of the U.S. and Minnesota cooperative movements. (Photo provided by Minnesota Credit Union Network.)
The meeting was part of the group's two-week tour of Minnesota and Wisconsin cooperatives, focused on learning about the U.S. government's role in regulating the co-op industry. The event tied into MnCUN's yearlong efforts to raise awareness of the International Year of Cooperatives and the impact that cooperatives have on society.

2012 was designated by the United Nations to be the IYC, with the theme "Cooperatives build a better world."

The Indonesian representatives, which included the adviser to the Indonesian Minister of Cooperatives and two cooperative experts, visited MnCUN to learn about the structure, development and growth of Minnesota credit unions. Citing the challenges facing the relatively young Indonesian cooperative movement, the Indonesian representatives described the country's desire to learn from cooperatives and credit unions in the U.S.

MnCUN staff provided an overview of the organization's role in helping the state's credit unions grow and thrive. Department managers highlighted the organization's work in governmental affairs, education, compliance and communications. Staff also outlined MnCUN's for-profit activities and the role they play in providing products and services to state credit unions.

Focusing on credit unions' interaction with the government, MnCUN representatives explained how credit unions are regulated at the state and federal levels. Staff described the compliance burden currently faced by credit unions and the ways in which MnCUN and Minnesota credit unions work to affect and change regulatory and legislative policies.

"Through this exchange, Minnesota and Indonesia--two places that are a world apart from each other--were able to share ideas and expertise and collaborate on the issues facing cooperatives around the world," said Mark D. Cummins, MnCUN president/CEO. "Visits like this one, and thousands of others like it around the world, demonstrate how the principles of cooperatives transcend across countries and cultures."

The Indonesian group's tour also included visits to the Credit Union National Association, World Council of Credit Unions, the Cooperative Network, Land O'Lakes, Stewart Grocery Cooperative and Landmark Services Corp.

Highmark only Homes for Heroes lender in region

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RAPID CITY, S.D. (10/1/12)--Highmark FCU, Rapid City, S.D., is the only lender in western South Dakota approved to provide home loans through Homes for Heroes, a program that provides rebates and discounts for military personnel, police officers, firefighters and registered nurses who are buying or selling a home.

The program is designed to help "real-life heroes" open the door to achieve their dream of home ownership. Some of the overall savings qualified applicants receive through this program include:

  • 25% of the gross commission paid to the Homes for Heroes affiliate company, whether the hero buys or sells, or both;
  • Discounted financing and closing fees charged by Homes for Heroes lender affiliates; and
  • Other real-estate related discounts available in some states.
"On the financing side, there are real dollar savings for qualified heroes," said Joanie Howland, Highmark FCU mortgage lending manager. "Specifically, Highmark FCU provides its Homes for Heroes applicants with free appraisal reports and discounted title closing costs. In addition, there could be savings in the amount of money needed for closing due to down-payment assistance options."

Whats around the bend in biometrics for CUs

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MADISON, Wis. (9/28/12)--What kinds of measures will credit unions use to protect their members' identity and information--especially in mobile world?  Biometrics has seen some major developments this year that could render passwords, PINs, log-ins and even employee ID access cards obsolete. According to a number of sources, these are already considered passé.

Instead, credit unions should be thinking physically: fingerprints, palms, eyes, heartbeats and even one's feet will be the devices of future access. No longer will it be what one knows (such as those intricate passwords), but rather what or who one is, that will gain access.

Something as simple as getting off on the right foot may mean the difference between access to information or a facility at the credit union. Carnegie Mellon University has teamed with Ottawa, Canada-based Autonomous ID to transform biometrics monitoring into a new field--pedo-biometrics. They hope to create physical "passwords" that require the physical presence of a specific person to unlock access by testing shoe insole sensory system prototypes for a variety of identification uses. BioSoles are special insoles that can recognize individuals based on their unique walk.

Pedo-biometrics could potentially apply in medical diagnosis, forensic science, privacy, security and automation, said Vijayakumar Bhagavatula, professor of electrical and computer engineering, in a university press release in July. Researchers expect the benefits to go beyond security, to earlier detection of medical conditions such as diabetes or Parkinson's disease.

"The continuing threats to military personnel and critical infrastructure and the growing national cybersecurity vulnerabilities demand a new breed of credentialing technology, and what our group has achieved certainly puts a whole new spin on things," said Todd Gray, chairman and president of Autonomous ID.

The new lab will complement work in the use of the iris of the human eye as a "fingerprint" to trap cybercriminals.

Another group, the Biometric Research Group, indicates that the market for residential and commercial security products will reach $25 billion by 2017, with biometrics accounting for $3.5 billion of the market, according to Biometricupdate.com. (Sept. 26). Although the U.S. military and government sector dominate in the current market, the group said it expects commercial space to grow in the field.

Fingerprint technology, which has already got a thumbs' up from some credit unions, is the most established and widespread form of biometrics. It will represent $3 billion of the market in 2017. According to Biometricupdate.com, fingerprint technology is the most economical--a fingerprint lock can cost from $120 to $200 per unit. This technology also has small storage space, reduced power requirements and resists changes in temperature and background lighting. Biometric Research Group anticipates this technology will experience exponential growth.

One credit union using fingerprint technology is $2.15 billion assetService CU, based in Portsmouth, N.H., with 164,000 members worldwide and more than 600 employees. It uses DigitalPersona's U.are.U Fingerprint Readers to secure access to applications and member information. It needed an authentication solution that could simplify and secure access to more than 100 applications and websites employees use each day. The fingerprint allows employees to log in to the network once and acts as a password vault. It has resulted in the near elimination of password-related network and application lockouts and increased productivity, said the credit union in a July press release.

Voice biometrics is another area that is attracting an increasing number of financial institutions worried about data breaches. They turn to voice biometrics to improve security, lower costs and reduce consumers' frustration with the authentication process, says Opus Research Advisory  (Sept. 26).  Five million individuals are enrolled in systems or services that recognize their voiceprints as unique, personal identifiers. By 2015, this number of "protected" individuals is expected to reach 90 million. Opus noted some companies are turning to voice authentication in the cloud to make it easier to adopt, more scalable and enables pay-per-use pricing.

Last year, Phoenix-based Desert Schools FCU deployed voice biometrics using Finivation Software technology for password re-sets and high-risk transactions (Homeland Security News Wire Dec. 6). It planned to allow members to call its call center and leave a voice mail. The voice biometric software uses a mathematical algorithm to identify and record the member's unique voice characteristics for future reference. After that, the member's voice serves as a password to verify their identity.

The Federal Bureau of Investigation's Biometric Center of Excellence has noted that voice recognition systems are popular for remote authentication because of the availability of devices for collecting speech samples via telephone networks and computer microphones. Employing voice recognition requires no special equipment other than a good microphone, such as the one on a mobile phone, reports Computerworld (Sept. 25).

Waving the  palm of one's hand is also being studied as a biometric solution for security. Intel recently demonstrated a palm vein detector in which a researcher waved his hand to log into Windows 7 and view his bank account. When he moved from the computer, it locked Windows and went into sleeping mode. Once the device recognizes the user, that identity tag can be forwarded to any number of accounts securely, from banks to social networks, -mail or business networks (zdnet.com Sept. 27).

And then, there's the heart beat. Intel acquired Israel-based Idesia Biometrics in July. Idesia provides technology through which heart beats can be used to recognize users on computers and mobile devices. Intel is hoping to create a sensor that could go into a smartphone or tablet that could monitor a heart beat.

Mich.s tax rate changes affects IRA calculations

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LANSING, Mich. (9/28/12)--Two new state laws that become effective Oct. 1 will affect the way Michigan's credit unions handle individual retirement accounts (IRA), said the Michigan Credit Union League.

Gov. Rick Snyder decreased the income tax rate from 4.35% to 4.25% when he signed Public Act 223 of 2012 on June 26, said the league on its website. At that time, Snyder also signed Public Act 224 of 2012, a bill that increases the personal and dependency exemption for personal income tax payers up to $3,950 per exemption.

As a result of the changes, credit unions in the state will be affected when calculating the withholding tax for IRA withdrawals and distributions. In January, the state mandated income tax on retirement income, which includes pension and IRA distributions.

When the new tax on retirement earnings was implemented, taxes were based on a tax rate of 4.35% and a personal exemption option of $3,700. The reduction in the income tax rate and the increased exemption amount will benefit Michigan taxpayers and reduce their tax burden, the league said.

California league to recognize CU leaders

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RANCHO CUCAMONGA, Calif. (9/28/12)--Six California credit union leaders and volunteers--including 2012 Leo H. Shapiro Lifetime Achievement Award recipient Bruce Barnett, retired CEO of Fresno-based Educational Employees CU--will be honored at this year's California and Nevada Credit Union Leagues' Annual Meeting and Convention.

During his 32-year career, Barnett was involved with credit unions in California's Central Valley and at the state level beginning in 1976 when he became CEO of Electrical Workers CU. In 1982, he became assistant general manager of Educational Employees CU and became president/CEO in 1988. Under his leadership from 1982 through 2008, the credit union grew to a $1.5 billion asset credit union with 12 branches.

Award recipients, in addition to Barnett, include:

  • Distinguished Service Award: Linda White, CEO of United Health CU (UHCU), Burlingame;
  • Outstanding Volunteer Awards:  Roy Brooks, board treasurer of Mid-Cities CU, Compton, and Hugh Rafferty, board chairman, CoastHills FCU, Lompoc; and
  • Tomorrow's Star Awards:  Courtney Derby, membership development manager of San Francisco FCU, and Jennifer Kato, accounting manager, Nikkei CU, Gardena.
White has served the past 14 years as CEO of UHCU. She serves on the California Department of Financial Institutions' Advisory Committee and as president of the leagues' El Camino Chapter.  She is a founding member and secretary of the Healthcare Credit Unions of America, and a founding member of the Credit Union Bay Area Executive Coalition.

Brooks became a volunteer at Mid-Cities CU in 1969. He served as chairman of the credit union's personnel and finance committees and is currently board treasurer. He also served as interim CEO, on the California Credit Union League's Audit Committee and on the board of governors of the leagues' Long Beach (now Beach Cities) Chapter.

Rafferty has been on the board of CoastHills FCU for eight and a half years and board chairman since 2008.  He has been involved in a CEO transition, a branch expansion of three facilities and a merger with Atascadero FCU, and supported the addition of business services and development of a 5019(c)(3) organization to increase community support and better serve the underserved. He is vice chairman of the National Association of Credit Union Chairmen and worked in 2011 with leagues to establish a Chairman's Circle network for credit union chairmen in California and Nevada.

Derby, who joined San Francisco FCU in 2009, chaired the credit union's Community/Share community giving and outreach committee; promoted credit union services in the community; and developed a youth program that provides youth-specific accounts, financial education and financial resources for members age 6-17. Derby also led the credit union's efforts to give back to the community through donations, volunteerism and fundraising.

Kato has been in the movement seven years and is the first employee from Nikkei CU to have graduated from Western CUNA Management School. She was an honors graduate in 2009.  She has held various positions in the leagues' Beach Cities Chapter, including secretary, education chair, and treasurer, and she assists a number of credit unions with accounting functions.  Kato helped organize the 2012 spring training, "Inspire Me," for the Southern California Credit Union Alliance.

First Carolina Financial Conference featured AL experts

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GREENSBORO, N.C. (9/28/12)--More than 70 attendees gathered in earlier this month for First Carolina Corporate CU's 11th Financial Conference, in Greensboro, N.C., which featured insight on new regulations, balance sheet strategies and asset-liability management (ALM).

Nine attendees were recipients of grants from the Carolinas CU Foundation.

"Credit union CEOs, chief financial officers and other managers responsible for the balance sheet need up-to-date economic and financial information to make informed decisions," said Kecia Brooks, First Carolina Corporate CU vice president of member communications. "The aim of First Carolina's Financial Conference is to provide a comprehensive learning experience, as well as opportunities for discussion, and interaction with top experts in the field and each other." 

Roy Hartley, managing director of Protective Securities, First Carolina's brokerage services partner, shared insights about municipal securities. "Although munis are not common investment holdings on many credit union balance sheets, it's one area investment officers need to explore as an alternative to provide a nice complement to their existing portfolio," Hartley said.

John Worth, chief economist at the National Credit Union Administration (NCUA), gave an economic update, while other NCUA staff provided information on regulatory changes.

Of special interest was a talk on the NCUA's new interest rate risk (IRR) regulation, which becomes effective Sunday. Lisa Boylen, First Carolina's senior ALM analyst, led a session on the rule, which requires most federally insured credit unions to have a written policy on managing IRR and a program for implementation. Boylen also discussed ALM reporting.

The conference also included a discussion on the future movement of the London Interbank Offered Rate, or LIBOR, by Ira Jersey, director of interest rate strategy at Credit Suisse. Mark Beasley, the Deloitte Professor of Enterprise Risk Management at North Carolina State University, spoke on ways to strengthen enterprise risk management procedures and practices.

Study Savings accounts better option than CDs

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MADISON, Wis. (9/28/12)--Savings accounts may be a better option than certificates of deposit (CDs) in 42% of U.S. states, according to the most recent study by Go Banking Rates.

CDs--long regarded as the high-yield alternative to traditional savings accounts--no longer provide a sure bet in economic conditions that have essentially leveled the playing field, the study said.

Go Banking Rates collected the average savings account rates and average six-month CD rates offered by credit unions and community banks in each state, and in Washington, D.C., as well as national and online banks. It then compared the difference in return between both deposit products. While CD interest rates were higher than savings account rates in nearly every instance, the interest-rate gap between the two products may not always be wide enough to warrant locking in funds for a six-month commitment, said Go Banking Rates.

The difference between savings and average CD rates is 0.1% or less in 42% of the states. In Delaware, for example, average savings account rates are higher than that of six-month CD rates. It's not until depositors reach two-year CD terms that they stand to earn about one percentage point higher in interest than a traditional savings account offers.

Most consumers will find that the liquidity offered by a savings account is worth the slightly reduced interest rate in these states, and should opt for a savings account over a short-term CD if immediate access to funds is a concern, the study indicated.

However, in states such as West Virginia, Minnesota and Maine, where average six-month CD rates are closer to 0.2% higher than average savings account rates, it may be worth it to agree to limited accessibility in order to give savings that extra boost, the study said.

Four CU leaders presented awards by Iowa league

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CORALVILLE, Iowa (9/28/12)--The Iowa Credit Union League honored four credit union leaders at the Iowa Credit Union Convention in Coralville, Sept. 19-21.

Click to view larger image From left: Joe Hearn, chairman, Iowa Credit Union League; Paul Becker (Heritage Award winner), retired CEO, Citizens Community CU; and Patrick S. Jury, league CEO/President.
Click to view larger image From left: Joe Hearn, chairman, Iowa Credit Union League; Paul Lensmeyer (Professional Cooperative Spirit Award winner), CEO, Ascentra CU; and Patrick S. Jury, league president/CEO.
Click to view larger image From left: Joe Hearn, chairman, Iowa Credit Union League; Sally Miller and Art Miller (Volunteer Cooperative Spirit Award winners), Dubuque Teachers CU; and Patrick S. Jury, league CEO/President.
Click to view larger image Murray Williams (left), chief operating officer, Iowa Credit Union League, and Kathryn Johnson (Young Professional of the Year Award winner), director of operations, Sioux Valley Community CU. (Photos provided by the Iowa Credit Union League)
Paul Becker, Citizens Community CU, Fort Dodge, received the 2012 Heritage Award for demonstrating extraordinary commitment, service and leadership in the credit union movement. Becker has gone beyond the expectations of a credit union leader, said the league. His dedication to moving the credit union world forward is visible at not only the local level, but also Becker has held many roles at the regional and national level.

With more than 36 years of leading Citizens Community CU, Becker has improved the financial lives of thousands, not only within his community, but also statewide and nationwide, the league noted.

Paul Lensmeyer, Ascentra CU, Bettendorf, was presented with the 2012 Professional Cooperative Spirit Award in recognition of this outstanding service, commitment and leadership in the credit union movement. Lensmeyer's commitment to diversity and change within the credit union industry has set him apart as a relentless credit union champion, said the league's announcement.

Lensmeyer believes in the power of reaching out to the Hispanic market and has worked closely with Coopera, a partner of the Credit Union National Association, to build a program so credit unions can reach that market and make a difference in his community. Lensmeyer is committed to the "people helping people" philosophy and is an example of the cooperative spirit, the league said.

Art and Sandy Miller of Dubuque Teachers CU are the 2012 recipients of the Volunteer Cooperative Spirit Award for exemplifying the spirit of the credit union industry and the community they serve. Through their credit union leadership and engagement, they have helped their credit union increase its membership by nearly 400%.

The Millers are commended for their dedication to their work, but it's especially noteworthy when done on a volunteer basis, said the league, adding that they go above and beyond the call of duty to be there for their credit union, their members and their staff.

The league's 2012 Young Professional of the Year Award was created this year to honor outstanding professionals under the age of 35. Kathryn Johnson, Sioux Valley Community CU, Sioux City, is the recipient of this year's award for demonstrating the credit union philosophy of "people helping people" every day through hard work and dedication.

For the past 16 years, Johnson has given her time to ensure the success of not only her credit union, but the credit union movement. When her credit union CEO tragically died this year, Johnson went above and beyond to keep the credit union moving. In doing so, she earned the respect of her board and staff for putting her knowledge and experience to work.

Louisiana CUs grew several hit milestones in 2Q

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HARAHAN, La. (9/28/12)--Louisiana's 212 credit unions ended the second quarter with $9.29 billion in total assets, and several Louisiana credit unions hit asset milestones this quarter as well, according to the Louisiana Credit Union League.

Assets milestones reached by the state's credit unions include:

  • Exceeded $10 million--New Orleans Clerks & Checkers FCU ($10.08 million) and Morton Weeks FCU in Lydia ($10.10 million);
  • Exceeded $50 million--First Castle FCU in Covington ($50.97 million).
Louisiana credit unions experienced 6.2% asset growth, compared with 6.9% nationally; 6.4% savings growth, compared with 7% nationally; and 3.7% loan growth, compared with 3.5% nationally.

Membership growth for the second quarter in the state was 0.9%, compared with 2.4% nationally. The state's credit union membership growth is lower than the nation for the second quarter of 2012, but it is higher than the -0.2% growth the state's credit unions had at the end of 2011. 

At the end of June, the nation's 7,103 credit unions had $1.02 trillion in total assets.

The league works with the Credit Union National Association's Economics and Statistics Department to analyze quarterly data submitted by credit unions to the National Credit Union Administration. It then provides a quarterly report showing trends in various areas including loan and savings growth, risk trends, membership trends and other areas.

The Louisiana league also provides a "milestones" report that looks at top credit unions in the areas of loan penetration, share draft penetration and average savings balances. The report highlights credit unions that reached and exceeded certain asset amounts, members and loans.

CU goes extra mile to approve student loan

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WALL TOWNSHIP, N.J. (9/28/12)--Matthew Durst, a member of First Financial FCU, Wall, N.J., was determined to attend Rutgers University this fall. First Financial FCU helped Durst turn that dream into a reality with some personal assistance when other financial institutions denied him credit.

First Financial was among the financial institutions that had denied Durst's loan application but members of the credit union's loan department were touched by his story. They recommended that he send an e-mail formally requesting a re-evaluation of his application.

First Financial President/CEO Issa Stephan and Chief Operating Office Alice Stevens personally reviewed Durst's file and took note of his good relationship with the credit union, according to the New Jersey Credit Union League (The Daily Exchange Sept. 27).

"After we received Matthew's e-mail, we decided to invite Matthew and his mother to our office to hear their story in person and see how we could help this family," Stevens told the New Jersey league.

After meeting Durst face-to-face, the credit union's leadership decided to approve the loan application. "Matthew's maturity and commitment to his future were very impressive--and that couldn't be overlooked," said Stevens.

"Everyone deserves a second chance and sometimes that second chance can change an individual's life," said Stephan.

Filene report Debt either solid tool or slippery pit

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MADISON, Wis. (9/28/12)--A new report on lending from the Filene Research Institute "traffics in human insights" rather than the percentages and statistics that are the focus of many financial-oriented studies.

The lending process creates an intense relationship between emotional and financial factors, researchers found in "The Culture of Borrowing and Debt: An Ethnographic Approach," based on interviews with more than 100 members involved in the lending process at 11 credit unions nationwide.

"Like a tugboat pushing a ship in the harbor, they are linked," Filene Research Director Ben Rogers wrote in the report's executive summary. "For some, emotion is the tugboat; for others it's the ship."

Among the implications for credit uniond offered in the report:

  • Many members perceive credit unions as social institutions first and financial institutions second. The implications are that high-touch and education-based interactions are expected, as are underwriting criteria that are more flexible.
  • Convenience is (still) king. Interviews confirmed separate research that even loyal credit union member will default to the path of least resistance in obtaining a loan, even if the deal isn't as good.
  • Members often appreciate tough love. Many members expressed respect and even appreciation when the credit union couldn't make the loan. Credit unions were advised to communicate this message in a friendly way.
  • Positive experience helps bind members to their loans and to the credit union. Personal loans, mortgages, and using credit cards (but paying them off monthly) are all loans that members see as healthy borrowing. Helping members see the value of other types such as auto and student loans will help them be more responsible, the report said.
  • Even members with excellent finances and low debt don't always report personal satisfaction. Instead members who applied emotional and financial criteria to their borrowing decisions in what the report called a "golden mean" were most likely to report being happy.

CU System briefs (09/27/2012)

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  • HARRISBURG, Pa. (9/28/12)--U.S. Rep. Tom Marino (R-Pa.) visited the Susquehanna Valley Chapter of Pennsylvania Credit Unions during its monthly meeting Tuesday, says the Pennsylvania Credit Union Association (Life is a Highway Sept. 27). Marino expressed concerns about the climbing national debt, the probability for the future of the U.S. currency, and his support of term limits. From left are: Paul Nyman, chapter president and director, Horizon FCU; Traci Donahue, CEO of Horizon FCU; Marino; Barb Vitolo, chapter treasurer and CEO, Wyrope FCU; Tom Rachael,chapter vice president and CEO of PALCO FCU; and Robert Horner, CEO, West Branch Valley FCU. (Photo provided by the Pennsylvania Credit Union Association) …
  • HARRISBURG, Pa. (9/28/12)--Beaver, Pa.-based WEST-AIRCOMM FCU hosted a meet and greet with State Senate candidate Rep. Matt Smith Wednesday at its Moon Township branch, according to the Pennsylvania Credit Union Association (Life is a Highway Sept. 27). Smith is the Democratic nominee for the 37th District. The credit union hosted his opponent, Republican D. Raja, on Aug. 28. Smith has served in the State House since 2007 and is currently vice chair of the House Finance Committee. Smith said his first job out of college was working as a collector for Omega FCU. (Photo provided by the Pennsylvania Credit Union Association)…
  • LEOMINSTER, Mass. (9/28/12)--The board of directors at Leominster (Mass.) CU has appointed Paul D. Gilbody as president/CEO. Gilbody succeeds Gordon R. Edmonds who has served in the position since 2007 and who will retire on Sept. 30.  Gilboy has 25 years of diversified banking experience, most recently as executive vice president, chief operating officer and senior lender at Bay State Savings Bank in Worcester, where we worked for the past 15 years. He previously served as vice president at Fleet Bank …
  • NORTHAMPTON, Pa.(9/28/12)--Charles V. Pizzo, 82, of Whitehall, Pa., died Tuesday at home. He was former president of St. Elizabeth CU, Northampton,, Pa. He was a retired supervisor at Essroc Cement Co. in Coplay and Nazareth for 35 years before retiring in 1992. He is survived by his wife Irene, a son, a daughter, and two grandchildren. Viewing is today from 8:30 a.m. to 10 a.m. at Robert A. Hauke Funeral Home in Coplay, followed by services at St. Peter R.C. Church …

Manager of defunct CU sentenced in 242K theft

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CLINTON, Tenn. (9/27/12)--The former manager of the now-defunct Anderson County Employees FCU in Clinton, Tenn., has been sentenced for allegedly stealing $242,000 from the credit union.

Shirley McKinney, 53, of Harriman, Tenn., pleaded guilty to theft of more than $60,000, two counts of forgery involving more than $10,000 and two counts of forgery over $1,000 (Knoxnews.com Sept. 20). In a plea bargain, her 15-year prison sentence will be reduced and she will be placed on supervised probation after serving nine and a half months in Anderson County Jail. She also was ordered to repay more than $242,511.

A routine audit on Jan. 19, 2010, discovered funds missing. The credit union, which at the time had more than 600 members, about $1.8 million in assets and more than $1.3 million in outstanding loans, was merged into Knoxville Teachers CU in September 2010 (News Now Aug. 15, 2011). Anderson County Employees FCU's board sought the merger.

McKinney was indicted in August 2011 after an investigation by the Tennessee Bureau of Investigation. She allegedly made unauthorized withdrawals from members' accounts, forged two members' names on loan agreements for more than $10,000, and forged a third member's name on two loans of more than $1,000.

Her husband has agreed to name the Knoxville Teachers CU as beneficiary of his 401(k) plan and life insurance policy, and the couple pledged to try to sell farmland they own and use the proceeds to make restitution, said Knoxnews.com.

Generations FCU releases small biz lending guide

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SAN ANTONIO (9/27/12)--San Antonio-based Generations FCU has released its Small Business Lending Guide designed to assist small-business owners through the process of applying for financing for their companies.

The guide is a 30-page brochure that covers topics such as the business plan, types of financing, document samples and understanding corporate credit.

"Generations has been conducting small-business lending for more than 30 years," said Andrew Wilson, vice president of lending at the $394 million asset credit union.  "During that time we have seen again and again that small-business owners who are quite savvy in the day-to-day operations of their business, can sometimes struggle when it comes to compiling all the documentation that is required to gain funding."

The guide is meant to be "a step-by-step instruction manual for them in an effort to eliminate many of the hurdles, but also a lot of the mystique that comes with applying for business lending," he said.

In a recent infographic entitled "5 Essential Steps to Financing Your Small Business," the credit union highlights the need for small-business owners to review their credit reports, formulate an effective business plan, gather all necessary supporting documents and apply for the loan that best fits their needs. Ninety percent of small-business owners indicated in a national study recently that access to capital has been a problem for their business.

"This has been a rough couple of years for small-business owners," Wilson said.  "They were hit not only with the same recession that consumers faced, but then they also had to deal with many of their traditional lines of financing going away. So credit unions across the country, including Generations, are working very hard to let those small-business owners know that we are here, we have always been here, and we are ready to meet their needs."

The Credit Union National Association and credit unions are urging Congress to enable more credit unions to help small businesses by passing legislation that would raise credit unions' member business lending cap to 27.5% of total assets, from the current 12.25%. Doing so would help inject $13 billion into the economy in small-business loans and help create 140,000 new jobs the first year. Raising the cap would not cost a dime for taxpayers.

S. Dakota CUs report text scam

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SIOUX FALLS, S.D. (9/27/12)--Several credit unions in the Sioux Falls, S.D., region are receiving calls from members who have received a text message scam.

Sioux Falls FCU in a press release said the message indicates the member's debit card has been deactivated and urges the recipient to call a telephone number with a 605 area code.  If the victim calls the number, an automated voice prompts the caller to enter the debit card number and PIN.

This is a common tactic used by scammers to obtain information from unsuspecting consumers, said Fran Sommerfeld, president/CEO of Sioux Falls FCU.  Sommerfeld reassured consumers that the credit union does not send out text messages or e-mails or make phone calls asking for account information. "If you get a text, e-mail or call like this, you can be assured that it is not legitimate," said Sommerfeld.

The credit union told consumers that if they responded to such a text message and provided information to call their credit union immediately "so that appropriate action can be taken to prevent or reduce your potential losses."

Throughout the year, cyber criminals have blanketed various areas with text messaging scams that have targeted credit unions and other financial institutions.

Widely reported bank fee hikes an opportunity for CUs

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MADISON, Wis. (9/27/12)--Credit unions got another dose of positive press--and more opportunity to tout their lower fees--while media throughout the nation reported Bankrate.com's newest study indicating that banks' fees are rising on checking accounts, ATM use and overdrafts. Many media surveyed by News Now reported that plenty of credit unions still offer free checking accounts.

And that could be an opportunity for credit unions to capitalize on the publicity, by letting their local media know that they continue to provide the best deals for consumers.

Reports were carried in a Who's Who list of media that included The Today Show, The Wall Street JournalNBC News, CNBC, ABC News, CBS News, Fox Business, Businessweek, Business Insider, Chicago Tribune, The Washington Post, The Street.com, Fortune, The Huffington PostSt. Louis Post-Dispatch, The Fiscal Times, The Atlanta Journal ConstitutionWCVB Boston, Sacramento Bee,  Los Angeles Times, Crain's Cleveland Business, SmartMoney.com, Biz Journals.com in a number of major cities, GoBankingRates.com,  among others.

They sported headlines like "Banks' fee increases go into overdrive" (St. Louis Post Dispatch Sept. 25), "Bank fees soar, free-checking offers decline" (NBC News Sept. 25), "It's More Expensive Than Ever to Bank in America" (Business Insider Sept. 25 ), "Checking Fees Soar Despite 2011 Consumer Backlash" (Nonprofit Quarterly Sept. 25),  and "Is the era of free checking accounts over?' (The Week Sept. 25).

All of them noted that Bankrate found significant hikes in banks' fees in its analysis of 477 checking accounts at 247 banks and thrifts. No credit unions were in the study, which  determined that the minimum balance required to avoid fees on checking accounts had risen 23% to $723 and that banks have added fees.

Many media featured a quote from Greg McBride, Bankrate.com's senior financial analyst, who said, "There are plenty of smaller community banks and credit unions that still offer free checking." Some noted that he also pointed a recent Bankrate survey that "showed that 72% of the largest credit unions still offered free checking."

NBC News in its coverage told consumers how they can avoid fees. "There is another option: move your money. Look for a financial institution--a credit union, community bank or online bank--that offers totally free checking with no requirements to qualify. Bankrate found that 72% of the largest credit unions still offer free checking."

"Checking accounts that are free on a standalone basis continue to diminish," said McBride in Bankrate's press release. "But a free checking account is still within reach of the majority of Americans, whether by getting the fee waived through direct deposit or moving to a bank or credit union that still offers free checking."

Bankrate also reported that 72% of Americans say they would consider switching checking account providers if their financial institution raised its fees. That's up from 64% in March 2011.

Texas Trust survey Renters want to buy homes

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MANSFIELD, Texas (9/27/12)--People who are renting apartments or houses have a high interest in buying a home, although one-in-eight North Texas homeowners is interested in selling a house and buying another, according to a survey by Texas Trust CU in Mansfield, Texas.

The $754 million asset Texas Trust conducted its first online survey of the region's homeowners and renters in mid-August to gauge attitudes about home ownership. While the survey reflects a slowly recovering housing market in the region, it also highlights a more pragmatic and less-idealized vision of home ownership, said the credit union.

For example, 83% of non-homeowners surveyed say they are interested in buying a house, either this year or within the next five years. Of those, three out of four indicate their main motivations are financial, not emotional. Thirty-four percent see home ownership as a better investment than renting, and 28% see it as an investment in their family's financial future. Seven percent want to build equity, and another 7% are motivated by the mortgage-interest tax deduction.

Twenty-two percent are motivated by the "emotional" attractions of the personal pride of home ownership or having something to pass along to their children when they retire, said the credit union.

Among the current homeowners interested in buying another house at this time, financial motivations also dominated. Among the group, 50% are attracted by current low interest rates, 18% want a bigger house for less money, and 16% see another house as a good investment.

Among other survey findings:

  • Of the renters interested in buying a home, 77% define an "affordable" down payment as 5% or less of the price of the home. Among current homeowners, 48% define affordable that way, 26% of respondents would pay 10% down, and 23% of them would agree to 20% or higher down payment.
  • Sixty percent of renters interested in buying a home say they would prefer to buy an existing home, while 40% prefer a new or custom-built home.
  • Thirty-one percent of all current homeowners are considering refinancing (41% for those interested in another house and 28% for those not interested in moving). Also, 24% have refinanced within the last two years, and 19% say their mortgage is paid off.
  • Seventy-four percent of current homeowners say they are not under water on their home--that they do have equity; 9% say they don't have equity, and 17% are unsure.
  • Eighty-four percent of homeowners say they have never missed a mortgage payment; 13% admit to missing five payments or fewer during the life of their mortgage.
  • Of the renters interested in buying a home, 24% expressed confidence in their ability to get a home loan. More than 50% said obtaining a loan would be challenging or difficult, and the others weren't sure.
"What motivated most people to buy houses in the past isn't necessarily the same as what motivates them today," said Richard Whitman, Texas Trust vice president of mortgage lending. "According to our survey, Dallas-Fort Worth area residents no longer see home ownership as the American dream. Instead, they're coming to see it more as a financial investment designed to grow their net worth." 

Texas Trust surveyed 1,719 respondents, 86% of them members of the credit union.

New CU trend Highlighting local businesses

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MADISON, Wis. (9/27/12)--An increasing number of credit unions are taking part in an emerging industry trend: finding innovative ways to help highlight and assist local small businesses.

Going beyond providing member business loans (MBL), credit unions are zeroing in on the essence of boosting local businesses.   

St. Mary's CU, a $600 million asset credit union based in Marlborough, Mass., is running a We Love Local Contest that highlights a different local business each month on the credit union's Facebook page. Anyone who visits the page can enter a contest with a daily chance to win a $25 gift certificate to use at that month's highlighted business (communityadvocate.com Sept. 26).

Michigan credit unions are initiating a statewide credit union-led effort called "CU Lunch Local"--with a statewide cash mob created to show support for small businesses (Michigan Monitor Sept. 17 and Sept. 10). Similar to flash mobs, cash mobs--instead of staging some type of performance--participate by spending money at a chosen local business to support it and to encourage others to do the same, said the Michigan Credit Union League. 

Participants in CU Lunch Local will commit to buying local on Oct. 16--through something as simple as buying a cup of coffee at a neighborhood shop, to ordering lunch for a whole department at work from a deli, to purchasing furniture, the league said. Participants join the event through Facebook.

The Central Ohio Chapter of the Ohio Credit Union League began organizing cash mobs earlier this year. Each month, Central Ohio credit unions encourage their members and employees to descend upon a local business at a chosen date and time to buy products and services from that business, said the Ohio Credit Union League (eLumination May 17).

The chapter held three cash mob events through August. A cash mob helped Gallo's Pit BBQ in Linworth, Ohio, increase its Aug. 16 sales by 66% over the previous Thursday (News Now Aug. 29).

Also, North Coast CU, with $164 million assets in Bellingham, Wash., and Members 1st CU, based in Redding, Calif., with $101 million in assets, are holding monthly cash mob events to benefit specific local businesses, according to their websites.  

In Totowa, N.J., more than 100 local owners of small- to- medium-size businesses attended a small business summit hosted by North Jersey FCU to network and learn about the credit union's products and services, as well as network with other businesses that attended (News Now Sept. 26).

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses. CUNA and credit unions say that increasing credit unions' MBL cap would provide more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

Dust off those HELOCs Home improvement sales up

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MADISON, Wis. (9/27/12)--Consumers are making more purchases of home goods, according to a study released Tuesday by IBM Smarter Commerce. Credit unions can take advantage of this trend by promoting home equity lines of credit (HELOC) for home improvements.

The biggest retail gains during the back-to-school shopping season were home goods purchases which increased 30% in July and more than 25% in August over their respective months in 2012, according to IBM. Home goods include anything from house paint to appliances or furniture.

"The focus on buying items for the home isn't surprising--with home affordability near all-time highs home sales have been clipping along at a fast pace over the past few months," said Mike Schenk, Credit Union National Association (CUNA) vice president of economics and statistics. "Both July and August new home sales increased at a nearly 30% year-over-year pace and both July and August existing home sales increasing at roughly 10% year-over-year," he told News Now.

The home improvement industry is a $200 billion a year business, according the Do-It-Herself.com. About 85% of the nation's homes were built before 1980 and will need frequent maintenance, according to the website.

Almost 70% of homeowners had home improvement plans for 2012 and were planning on spending an average of $3,500, which is an increase of $100 from 2011, according to the American Express 2012 Home Decision Report. A low percentage of people buying, an increased percentage of people remodeling, and an increase in spending means homeowners are trying to add value to their homes because they are planning on staying in them longer, according to the report.

Home equity lines of credit accounted for 6.9% of credit union loans in July 2011, compared with 7.6% in August, according to CUNA statistics.

The purchase of homes and home goods should help to boost credit union loan growth, but will not necessarily translate to significant increases in HELOC and second mortgage balances, Schenk said.

"While home prices are increasing, the increases overall have been modest," he said. "For example, while the Case-Shiller home price index has increased in each of the past six months, prices are up only 1.3% year-over-year and they remain 23% lower than at the beginning of the economic downturn.  Thus, for many, tapping home equity remains difficult. More generally, having just lived through a crash caused by over-borrowing on home equity, it seems unlikely that many have the appetite to return to those behaviors any time soon."

Some credit unions are running HELOC promotions.

IBM Southeast Employees FCU, Boca Raton, Fla., is offering annual percentage rates (APR) as low as 4% on HELOCs with no closing costs, and no or application or annual fees. HELOC holders can make interest-only monthly payments. Approved applicants can enter a drawing to win a $100 Home Depot gift card.

MC FCU, Danville, Pa., is offering a $50 gas card to approved HELOC applicants and waiving the $99 application fee. The credit union offers an APR as low as 4.5% on HELOCs.

Cyprus CU, West Jordan, Utah, is offering a promotion rate of 2.99% for the first since months on its HELOC product, with rates increasing to as low as 4% after six months. No fees are required during the promotion.

Harvard U ECU wins bid for alumni credit card

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CAMBRIDGE, Mass. (9/27/12)--Harvard University Employees CU competed with several national card issuers to earn the right to develop a MasterCard rewards card fo
Harvard University Employees CU is offering a new MasterCard rewards card designed for the Harvard Alumni Association. Gene Foley, Harvard Employees CU president, announced the rollout during a gala at the Charles Hotel in Cambridge. (Photo provided by Harvard University Employees CU)
r the Harvard Alumni Association.

The $409 million credit union will purchase the Harvard alumni portfolio from Barclay's Ban and develop a new alumni program.

The Harvard Alumni MasterCard includes no annual fee, no foreign transaction fees and no balance transfer fees. It provides unrestricted travel benefits and allows holders to select any flight, cruise or car rental without blackout dates.

PSCU has been chosen as the card processor for the new Harvard card.

"Our new partnership with the HAA has been a model of collaboration, with all parties working together flawlessly to achieve a common goal--to design a credit card program that combines unparalleled benefits and rewards, exceptional security and fraud protection, and sound financial principles," said Gene Foley, Harvard Employees CU president.

Cardholders under the current Barclay's program will be converted to the new credit union program in February.

CU System briefs (09/26/2012)

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  • MASHANTUCKET, Conn. (9/27/12)--A Norwich, Conn., woman has been arrested in connection with  an embezzlement of more than $10,000 from Pawcatuck-based Connecticut Community CU's branch in Mashanatucket. Yolanda T. O'Keefe, 62, was charged Tuesday with first-degree larceny in New London Superior Court.  The credit union discovered money was missing after an audit showed suspicious activity and an undisclosed amount of cash missing from the credit union's vault  (Norwich Bulletin Sept. 26) …
  • MERIDEN, Conn. (9/27/12)--The Credit Union League of Connecticut's recently formed Young Professionals group gathered for its second outing, this time at Gouveia Vineyards in Wallingford for wine tasting and discussing the future of the credit union movement in the state. More than 20 credit union representatives explored upcoming events in government relations, leadership, collaboration  and cost-savings analysis.  The event "was a great opportunity to bring people together and talk about credit unions and what sort of challenges we face as young professionals," said David Hinchey, marketing manager at Wepawaug-Flagg FCU and a member of the group's executive committee.  The group, which will build on the strengths of its members, plans to network every month and meet around the state to allow more credit union employees to participate.  Possible future gatherings include an event pairing a CEO and young professional, topic-specific meetings for examination, education sessions, exploring what works and what doesn't, and strategies for attracting more young people into the movement as members.  (Photo provided by the Credit Union League of Connecticut) …

CU applauds city council decision to cap payday loans

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SAN ANTONIO (9/26/12)--A credit union in San Antonio is applauding the adoption of a city ordinance that limits payday loans and auto title loans. 

The San Antonio City Council adopted the ordinance, which limits payday loans to 20% of the consumer's gross monthly income. It limits auto title loans to 3% of the consumer's gross annual income, or 70% of the vehicle's value, said the Texas Credit Union League (LoneStar Leaguer Sept. 25).

San Antonio joins two other Texas cities--Dallas and Austin--that have passed tighter restrictions on the loans, and that sets right with Ashley Harris, director of public relations at San Antonio-based Generations FCU.

"I couldn't be more pleased that our city council has taken this extra step to protect the most vulnerable members of our community," Harris told the league. "Predatory lenders, unfortunately, have a strong presence in our community. But I do think the council's action sends a valuable message to our community. It lets our citizens know that San Antonio is a community that cares about their financial well-being. And it sends a strong message to the payday lenders that times are changing."

Harris acknowledged that the ordinance likely will be tied up in litigation. She noted that credit unions, particularly credit unions participating in the REAL Solutions program, should seize every opportunity to get the message out there that credit unions--as not-for-profit financial cooperatives--exist to help the community.  "We need to continue our efforts to educate consumers on why it's in their best interest to avoid these fringe financial service providers," Harris added.

REAL Solutions is a financial education program of the National Credit Union Foundation. For more information, use the link.

NCUA adds Barclays to suits over corporate CU failures

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ALEXANDRIA, Va. (9/25/12)--The National Credit Union Administration (NCUA) Tuesday filed its seventh lawsuit against Wall Street investment firms--this time against Barclay's Capital Inc.--over investment losses that contributed to the failure of U.S. Central FCU and Western Corporate FCU.

NCUA's suit, filed in the U.S. District Court in Kansas, alleges Barclay's violated federal and state securities laws through misrepresentations made in the sale of mortgage-backed securities to U.S. Central and WesCorp.  Barclay's is the U.S. subsidiary of the British financial services firm.

NCUA alleges that the price paid for the securities sold by Barclay's exceeded $55 million.

"Trust and accountability are two cornerstones of our financial system," said NCUA Board Chairman Debbie Matz in an NCUA press release. "As clearly outlined in our complaint, Barclay's violated that trust by issuing faulty disclosures on securities underwritten by the firm. As a result, two corporate credit unions collapsed, and the entire credit union industry experienced a crisis.

"Since then, NCUA has successfully worked to restore stability to the credit union system. Now we are working to hold Barclay's, and other responsible parties, accountable for their actions," she added.

As in the other six lawsuits, NCUA's complaint alleges Barclay's made numerous misrepresentations and omissions of material facts in the offering documents of the securities sold to the failed corporates. It also alleges systemic disregard of the underwriting guidelines stated in the offering documents. The misrepresentations caused U.S. Central and WesCorp to believe the risk of loss was minimal, when in fact the risk was substantial.

NCUA has filed previous lawsuits against J.P. Morgan Securities LLC, RBS Securities, Goldman Sachs, Wachovia, and UBS Securities. The cases are working their way through court. Earlier this month a federal judge in Los Angeles said NCUA's lawsuit against Goldman Sachs can proceed (News Now Sept. 10), and in July a U.S. District Judge in Kansas ruled that the suit against RBS Securities Inc. and Wachovia Capital Markets Inc. could proceed (News Now July 27).

The agency has already settled claims worth more than $170 million with Citigroup, Deutsche Bank Securities and HSBC. It is the first federal regulatory agency for depository institutions to recover losses from investments in faulty securities on behalf of failed institutions, NCUA said.

As liquidating agent for the two corporates, NCUA said, it had a statutory duty to seek recoveries from responsible parties to minimize the cost of any failure to its share insurance funds and the credit union industry.  Recoveries from these seven additional legal actions would further reduce the total losses resulting from the failure of five corporate credit unions.

NCUA explained that losses from those failures are paid from the Temporary Corporate Credit Union Stabilization Fund, and expenditures from this fund must be repaid through assessments against all federally insured credit unions. Any recoveries would help to reduce the amount of future assessments on credit unions, said NCUA.

The latest complaint filed is on NCUA's website. To access it, use the link.

Landmark CU applies to buy savings bank

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NEW BERLIN, Wis. (9/26/12)--Wisconsin's largest credit union, Landmark CU, has filed applications with federal and state regulators to acquire Hartford Savings Bank, a state-chartered mutual savings bank headquartered in Hartford.

Pending regulators' approval, the $2 billion asset, New Berlin-based Landmark CU expects to  add the bank's more than $190 million in assets, 10,000 customers and branch locations in Hartford, Juneau and Hubertus by the end of the year.

Although Landmark has completed 10 credit union mergers in the past three years, this is its first such transaction with a bank.

"Our institutions are strikingly similar in our mutual memberships, shared beliefs in excellent customer service and focus on employee satisfaction and community involvement," said Ron Kase, Landmark CU CEO, in a press release.  He noted that Landmark's "broader offering of products and services will bring a variety of benefits to the area." The credit union is a leading mortgage lender in Waukesha and Milwaukee counties and the largest auto lender in southeastern Wisconsin.

Discussions between the two institutions began in June and each CEO and board agreed quickly to the acquisition. Landmark is completing the paperwork required by the National Credit Union Administration, Federal Deposit Insurance Corp., and Wisconsin Department of Financial Institutions' Office of Credit Unions and Banking Division.

Landmark said it intends to keep all three bank branch locations and will add Hartford Savings Bank's 40 employees to its staff. Although the bank CEO and Chairman of the Board Ken Braun had planned to retire from active management in January, he will stay on a community board of directors to be established in the acquisition and will maintain an office at the bank's Hartford headquarters.

Tom Haley, the bank's president and chief operating officer, will become Landmark's regional resident/chief risk officer and continue to work from the bank's headquarters.  His position is new to Landmark and reflects its increased size.

The credit union is also evaluating Hartford as a location for a future regional center to handle a range of administration functions. Landmark will continue the bank's community commitments with the Schauer Arts & Activities Center, Medical Center Foundation of Hartford, The Hartford Area Foundation and other organizations.

Landmark is not the first credit union to propose acquiring a bank.  In March, GFA FCU in Gardner, Mass., announced it would acquire New Hampshire-based Monadnock Community Bank's assets and liability after the bank reported a $1.8 million loss in 2011 (News Now March 5). That bank, however, had been initially chartered as AWANE CU.

Last year, United FCU, St. Joseph, Mich., and Griffith Savings Bank, Griffith, Ind., announced they had agreed to the bank's purchase by the credit union (News Now July 29, 2011).

Landmark's acquisition of Hartford Savings Bank "allows us to strategically expand our branch locations and better serve all customers within our charter area," said Kase. Landmark currently serves members in Washington and Dodge counties from branches in Germantown, West Bend and Watertown.

"One of the many positives of this acquisition is that we're a strong, successful Wisconsin financial institutions that's keeping jobs in the area. We also have a track record of involvement and commitment to the communities we serve," said Kase.

Landmark has 489 employees serving more than 195,000 members at 24 locations throughout southeastern Wisconsin.

Free Online Discovery Conference registration opens

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MADISON, Wis. (9/26/12)--CUNA Mutual Group's third annual, daylong Online Discovery Conference on Oct. 9 is offering 13 free credit union-focused sessions from the convenience of participants' desks.

Online Discovery is the Web-based equivalent of a face-to-face conference without the associated expenses, or time away from the office. Nearly 1,000 credit union industry professionals have already registered to attend the event, said CUNA Mutual.

This year's agenda features networking opportunities, including chat rooms and message boards; an exhibit hall and prizes. Registration guarantees access to conference materials after the event is over.

John Lass, CUNA Mutual senior vice president, strategy and business development, is the keynote speaker. Lass will build upon the sustainable growth framework, with a particular focus on the competitive challenges posed by financial convergence, technology and consumer channel preferences.

The conference also will feature these industry thought leaders and presentations:

  • Mark Arnold, president, On the Mark Strategies, "Strengthen Your Bottom Line with Advanced Sales Techniques";
  • Tracy Ashfield, president, Ashfield & Associates, "The Regulators are Coming: How to Prepare for Your Next Real Estate Exam";
  • Alan Bergstrom, director, Brand & Creative Services, CUNA Mutual Group, "How to Build a Brand that Sticks";
  • Bill Klewin and Lauren Calhoun, compliance managers, CUNA Mutual Group, "Lending in Today's Regulatory Environment";
  • Ann Davidson, senior risk consultant, CUNA Mutual Group, "Card Chip Technology: Why You Should Act Now, Not Later";
  • Pablo DeFilippi, director of membership, National Federation of Community Development Credit Unions, "Create a Community Development Strategy and Tap into 70 million Prospective Members";
  • Patrick McElhenie, sales planner, CUNA Mutual Group, "Translating Lending Trends into Strategies to Fuel Growth";
  • Michael Ogden, media relations manager, CUNA Mutual Group, "Stop Missing the Mark with Social Media";
  • Ben Rogers, research director, Filene Research Institute, "New Insights to Grow Your Credit Union and Finding Member-Friendly Non-Interest Income";
  • Andy Sernovitz, CEO, WordOfMouth.org, "How to Get People Talking About Your Credit Union"; and
  • Howie Wu, vice president of virtual banking, Boeing Employees CU in Tukwila, Wash., "Solid Strategies to Gain Mobile Users in Our Always-On World."
Each conference session will feature video and audio--new features this year. The revamped scheduled chats also will feature live video streaming.

The online event is designed for CEOs, senior leadership and management teams of credit unions. However, all credit union and league employees are welcome, CUNA Mutual said.

For more information use the link.

Calif.Nevada leagues realign hire management team

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ONTARIO, Calf. (9/26/12)--The California and Nevada Credit Union Leagues introduced new members to its management team as part of its recent realignment.

Tony Kitt, former chief operating officer at Western Bridge Corporate FCU (formerly Western Corporate FCU), San Dimas, Calif., is the leagues' new senior vice president of strategic innovation and planning. He will oversee the areas of planning and project management, digital media, and information technology/facilities. Kitt served as a board member for Procura LLC, Pacific Processing Partners, Ensenta Inc. and DigitalMailer Inc.  

Business Solutions. Prior to joining Alta Vista CU, Palochik was president/CEO of South Bay CU, Redondo Beach, Calif. He was first vice chairman for the leagues' board of directors and served on the board of directors for CURoots, a credit union-owned credit union service organization launched in 2010 by the leagues.

Lynn Athens, former CEO of Spectrum FCU, San Francisco, has joined the leagues as vice president of human resources and collaborative office solutions.

Joe Keller is the new vice president of digital media and C-Sun Studios. For 20 years, Keller held positions at Western Bridge Corporate/WesCorp, including director of Web technology from 2004 to 2011.

The leagues also announced internal promotions. Leagues' Senior Vice President of Credit Union Growth and Development Lucy Ito has been promoted to executive vice president and chief operations officer.

Others promoted include:

  • Cindy Cavanaugh, to senior vice president and chief financial officer;
  • Melissa Ameluxen, vice president, state governmental affairs;
  • Jeremy Empol, vice president, federal governmental affairs;
  • Rita Fillingane, vice president, research and collaboration;
  • Chris Collver, manager of research and information;
  • Deanne Figueras, manager of meetings and conventions;
  • Natalie Moreno, senior graphic designer;
  • Tracy Vasilia, manager of distance learning and CU support; and
  • Matt Wrye, manager of publications.
 

Also, Rodney Wilson has joined the leagues as state legislative and regulatory lobbyist. Wilson served as legislative director for California Assemblywoman Betsy Butler, (D-Los Angeles). He is working in the Sacramento office.

Autoland had 25 hike in sales last year

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CHATSWORTH, Calif. (9/26/12)--Boosted by sustained new car demand and growth of new partnerships, Autoland Inc. reported a 25% sales increase through August over the same period last year.

Net profits for the auto buying credit union service organization have surpassed those of 2011 by 99%, the company reports.

"The sustained health of the new car market has allowed us to demonstrate how well we drive quality direct loans to our partners by providing an exceptional auto buying experience to their members," said Jeffry Martin, Autoland Inc. president. "Meeting the car buying demands of members has allowed us to surpass our 2012 sales projections with new-car volume outpacing the industry sales rate."

During the past nine months Autoland has added 15 new credit union partners and will be expanding to 50 in-house offices by the end of the year.

The most recent partnerships include:

  • CU of Southern California, Whittier, Calif.;
  • Community CU of Southern Humboldt, Garberville, Calif.;
  • UNCLE CU, Livermore, Calif.; and
  • Eagle CU, Lodi, Calif.

CU hosts business summit in New Jersey

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Recognizing that strategic partnerships lead to growth, North Jersey Federal CU in Totowa, N.J., brought together informative resources for small businesses seeking opportunities to grow their business. More than 100 attendees networked with other businesses, ate lunch and learned about North Jersey Federal products and services. (Photo provided by North Jersey FCU)

TOTOWA, N.J. (9/26/12)--More than 100 local owners of small- to- medium-size businesses attended the Second Annual Passaic County Small Business Summit hosted by North Jersey FCU to network and learn about the credit union's products and services, as well as network with other businesses that attended.

The summit, held Sept. 12 at the $224 million asset North Jersey FCU, provided information on financing, protecting and growing a business, increasing profitability, planning trends, networking opportunities and more.

Based on a survey conducted by Totowa, N.J.-based North Jersey FCU, many small-businesses owners expressed the need to network so they could learn about new trends in best practices and products that could make their operations easier.

Small-business owners often struggle with keeping up with trends in business planning and resources that could help them grow, the credit union said.  

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses, considered a staple for economic growth. CUNA and credit unions say that increasing credit unions' MBL cap would provide more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

N.J. league announces board election results

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HIGHTSTOWN, N.J. (9/26/12)--The New Jersey Credit Union League's (NJCUL) 2012 board elections ended Sept. 17, and the results are tallied.

In 2012 there were three seats up for election, one in each tier (The Daily Exchange Sept. 25 and Sept. 17).

Incumbent Michael G. Reilly, president/CEO, Central Jersey FCU, Woodbridge, was elected in Tier B (credit unions with more than $33,875,000 in assets). Incumbent Robert D. Steeves, CEO, Essex County Teachers FCU, Bloomfield, was elected in Tier C (at large).

Incumbent NJCUL Director and Elizabeth (N.J.) Firemen's FCU President/CEO Jay Flanagan was awarded the three-year term in Tier A (credit unions under $33,875,000 in assets) in an uncontested election.

Reilly ran against Ann South, president/CEO, Novartis FCU, East Hanover.

Steeves ran against Eddie Daniels, CEO, Newark (N.J.) Board of Education Employees CU.

All directors elected during this balloting will begin serving in January.

The election drew strong participation from the membership, with 47% of eligible credit unions voting, NJCUL said.

CUBAEC collaboration spreads in Calif.s Bay area

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SAN FRANCISCO (9/26/12)--The Credit Union Bay Area Executive Coalition (CUBAEC), a group of 60 credit union CEOs from the San Francisco Bay area, is the latest initiative added to the Credit Union National Association's (CUNA) new collaboration website.

CUBAEC was formed in 2004 by 11 small credit unions to network, discuss issues and find common solutions by sharing experiences and resources. CUBAEC membership includes CEOs from credit unions with up to $250 million in assets from Monterey, California's Central Valley, Northern California and San Francisco. 

The group's primary objectives are:

  • To provide networking opportunities (problem solving and information exchange);
  • To provide effective educational opportunities on topics of interest to group members; and
  • To facilitate the generation and exchange of ideas related to the business of running a credit union.
Linda White, CEO of United Health CU, Burlingame, Calif., said CUBAEC has greatly enhanced her credit union's operations--giving her the ability to more easily delve into and discuss important business strategies and tactics. One example that's been especially helpful in today's low-margin environment: "Being able to find out how others approach the decision to implement fees and service charges has been very helpful" she says.

Her interest is "not so much in the specific dollar amount of fees other credit unions are charging--but in the thought process and the methodology others use when exploring this issue," White said.

CUBAEC maintains resources of recommended service providers and credit union professionals available to provide assistance. The group has collaborated on commonly needed policies, risk assessments, marketing projects and business resumption plans.

The need to reduce back-office redundancy through more cooperation and collaboration is one of the top strategic issues facing credit unions. "Credit union professionals repeatedly tell us this but, when asked, indicate that they don't cooperate or collaborate more because they aren't aware of successful efforts," said Mike Schenk, CUNA vice president of economics and statistics. 

The CUNA collaboration website addresses these issues, Schenk said. It provides a repository of successful initiatives, policies and procedures, and a vehicle for credit unions, leagues and credit union service organizations (CUSOs) to share their stories. "Our goal with the site is to improve the cross-pollination of good ideas, enable credit unions to replicate successful initiatives and ultimately to produce substantial financial and operational benefits that help credit unions thrive," Schenk said.

Site visitors can join a collaboration list serve, share information about initiatives, and explore cooperative efforts. The site includes links to additional resources such as Credit Union Magazine articles and several Filene Research Institute studies. For more information, use the link.

CU System briefs (09/25/2012)

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  • GREENWICH, Conn. 9/26/12)--A Greenwich, Conn., woman has been charged with the theft of more than $62,000 from a trust account for a teenage relative who had received more than $90,000 as a result of an auto accident for medical care (Greenwich Time.com Sept. 24). Gail D. Citron, 51, was charged Thursday with first-degree larceny and conspiracy in the theft of the relative's account at Greenwich Municipal Employees CU. Her husband, Robert, 47, pleaded guilty in April to fourth-degree larceny and received a one-year suspended sentence and two years of probation. The thefts allegedly occurred between Jan. 25, 2009, and Sept. 1, 2009. The money was used for household expenses, including rent, groceries and an Xbox Live video game subscription, said the arrest warrant for Robert Citron …
  • HUNTINGTON, W.Va. (9/26/12)--Andrew Davis, 32, of Detroit has been charged with attempted armed robbery of the First Priority CU, a Huntington, W.Va.-based credit union after a tip with a 12-hour lead enabled police to set up SWAT teams inside and outside the credit union. When he entered the credit union shortly after 8:30 a.m. Monday, they were ready (WSAZ-TV Sept. 24). Davis allegedly entered the credit union wearing a mask, shades and a hoodie, but fled. He was caught two blocks away, still wearing the disguise. Police said Davis allegedly tried to divert them with phony 911 calls, but the ruse didn't work. He also was charged with fleeing the scene …
  • HARRISBURG, Pa. (9/26/12)--The September issue of the La Voz Latina Central  is in circulation with an advertorial promoting financial literacy and credit unions, according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Sept. 24). The advertorial campaign is a result of a grant the publication obtained from PCUA through the Latino Hispanic American Community Center to impact Latino Hispanic American communities in the Lancaster, Reading, Allentown, York and Harrisburg areas. The publication has the potential to reach 147,000 readers in Central Pennsylvania by mid-2013, said PCUA.  The grant consists of 10 advertorial articles beginning this month and ending in July 2013. Use the link to access the information …
  • NAPERVILLE, Ill. (9/26/12)--Illinois State Sen. William R. Haine (D-26, Alton) toured several credit unions in the Metro east area to learn first-hand about their business operations and ways they serve their member-owners.  He toured 1st MidAmerica CU, East Alton; GCS CU, Granite City; Laclede Community CU, Alton; Scott CU, Collinsville; and Shell Community FCU, Wood River. During the tours Haine affirmed his on-going support of preserving credit unions' tax exempt status and encouraged credit unions to serve their members by providing a valuable financial choice for consumers. Credit unions thanked Haine for his championing of credit union legislative issues in Springfield and will work with him on future issues pending before the Illinois General Assembly, said the Illinois Credit Union League. Pictured at 1st MidAmerica CU are, from left: Keith Sias, league vice president, state governmental affairs; Haine; and 1st MidAmerica CU's Robert Blacklock, vice president/chief financial officer; Alan Meyer, executive vice president/chief operating officer and a league director, Class C, District 1; and CEO Don Reedy. (Photo provided by the Illinois Credit Union League) …

Packers CU among sponsors of second fin lit summit

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MADISON, Wis. (9/25/12)--The Green Bay Packers, the Wisconsin Department of Financial Institutions (DFI), and Appleton, Wis.-based Fox Communities CU are among the sponsors of the second annual Wisconsin Summit on Financial Literacy.

The summit will be held Oct. 12 from 8:30 a.m. to 2:30 p.m. CT at Lambeau Field in

Green Bay, said DFI, which is one of three headline sponsors. The others are Economics Wisconsin and the Lakeland College Center for Economic Education.

The conference aims to support community outreach educators and teachers in strengthening their existing programs on personal finance and offering recommendations for implementing new programs to diverse communities, said DFI.

Green Bay Packers President Mark Murphy will be guest speaker.

Among those presenting will be financial industry veterans who teach personal finance within their communities, college professors with expertise in personal finance and economics, and K-12 teachers with experience teaching these disciplines.

Topics include a community financial literacy roundtable, creating a community financial literacy program, important resources on financial literacy, identifying community partners, financial coaching, best practices and strategies for successful community initiatives and financial coaching.

In addition to the headline sponsors, Fox Communities CU, and the Green Bay Packers, other sponsors include Ariens, the Council for Economic Education, IBM, the Kohler Foundation, Northwestern Mutual, State Farm Insurance, the Vollrath Co. and the Windway Foundation.

IWSJI Year later banks free checking costs more

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NEW YORK (9/25/12)--So-called free checking accounts are more expensive than ever, The Wall Street Journal reported Monday, citing a new survey from Bankrate, which analyzed 477 checking accounts at 247 banks and thrifts.

To avoid a fee, bank customers must keep an average minimum balance of $723 in checking accounts that pay no interest--up 23% since last year, reported the Journal. The average monthly fee on noninterest accounts rose 25% to a record $5.48, said the study.  Also rising are fees for ATMs, overdrafts and minimum requirements tied to account balances or regular deposits. The study also found that 39% of noninterest checking accounts are free to all customers, down from 45% in 2011 and from a peak of 76% in 2009.

The Journal, which mentions public outcry over new debit card fees last year that led to Bank Transfer Day, attributes banks' fee increases to the economy and to new regulations that have many accounts unprofitable because maintaining checking accounts costs $250 to $300 a year.

Banks are cutting costs and trying to step up profits, the article said. Still, U.S. banks earned $34.5 billion in second quarter, a 21% increase over year-ago levels, according to the Federal Deposit Insurance Corp.

The rising fees are no surprise to those who watch banks' products and services. After Bank Transfer Day on Nov. 5, when thousands of consumers switched their accounts to credit unions and community banks, a number of financial experts warned that banks would find ways, even some hidden ways, to raise fees in other areas. Today the anti-bank sentiment is still strong and fees continue to feed that discontent. (See related News Now article, "Occupy anniversary: Anti-bank sentiment still strong."  Use the link.)

Credit unions, which have lower or no fees, and better rates are not included in the study. A recent article in the Louisville, Ky., Courier-Journal (Sept. 15), noted in an article, "Credit unions vs. banks: Should you make the switch?" that better interest rates, free checking accounts  are areas where credit unions have an advantage over banks.

Bankrate.com financial analyst Greg McBride told the Courier-Journal that credit unions have "a much higher prevalence of free checking accounts in an era of declining availability of free checking."

Filene seeks input for human capital study

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MADISON, Wis. (9/25/12)--The Filene Research Institute is looking for input from 10 U.S. and Canadian credit unions for its Human Capital Credit Union Research Study.

Filene is seeking credit unions to participate in the study, which will measure and describe how knowledge management interacts with human capital and how both influence business performance in U.S. and Canadian credit unions.

The research uses both financial and human resource lenses to help participating credit unions benchmark themselves against other credit unions and identify areas of improvement.  Deadline to register as a participant in the study is Sunday.

More information and details of the study will be addressed in a discussion at 2 p.m. ET Thursday with the researcher, Dr. Nick Bontis.

For more information, use the link.

Global fraudsters tapered off in August says report

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BEDFORD, Mass. (9/25/12)--Phishing attacks decreased during 17% in August--mostly at  nationwide banks and smaller regional banks--but not at credit unions, according to RSA's Monthly Online Fraud Report.

Phishing attacks targeting credit unions accounted for 18% of the August attacks, up seven percentage points from 11% in July and up from 10% in June, but down one percentage point from August 2011.

In the U.S. financial sector, nationwide banks experienced a 7% decrease in phishing attacks, but the brands in this segment continued to be the most targeted by phishing attacks--accounting for 67% or more than two out of every three attacks in August, said the report.

The Bedford, Mass.-headquartered security firm, which is a division of EMC Corp., identified 49,488 attacks during August, compared with 59,406 in July. To date, RSA has shut down 721,165 cyber attacks.

Forty-five percent of the attacks in August targeted brands in the U.S., the United Kingdom and Australia. The U.S. hosted 80% of phishing attacks launched during the month.

RSA's report also highlighted risks in the mobile app marketplace, which are increasingly vulnerable to malware and rogue apps, and noted that corporate settings are increasingly at risk from Bring-Your-Own-Device (BYOD) policies that allow employees' devices to double as platforms for both personal and work-related communications.

In related news, hackers from Iran may have targeted the U.S.'s three biggest banks as part of broader cyber offensive against the U.S., said Reuters (American Banker Sept. 21).

It noted that Bank of America, JPMorgan Chase and Citigroup have experienced multiple attacks from hackers in Iran since 2011. The denial of service attacks seek to disrupt websites and corporate networks by flooding them with traffic. Some bank customers have experienced delays when they access their banks' websites, said the Banker.

The Federal Bureau of Investigation warned that thieves may be attacking financial firms' websites to steal information for fraudulent use, according to the Banker.

Last Wednesday, the Financial Services Information Sharing and Analysis Center raised its alerts from "elevated" to "high"--the first change since July 9, 2009, according to its website.

Calif.Nev. leagues announce awards

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ONTARIO, Calif. (9/25/12)--The California and Nevada Credit Leagues have announced the winners of the states' Louise Herring Philosophy in Action Award, the Desjardin Financial Education Award, the Dora Maxwell Social Responsibility Community Service Award and the Community Outreach Award.

Meriwest CU, based in San Jose, Calif., is the 2012 recipient of the Community Outreach Award. The award honors credit unions and chapters for outstanding community outreach efforts.

Meriwest won in the $1-billion-plus asset credit union category. As the Community Outreach recipient, the credit union's entry also received a first-place statewide award in its asset category in the Dora Maxwell Social Responsibility Community Service Award program, which recognizes credit unions for socially responsible community projects that are external to the credit union.

Meriwest was honored for its "Financial Education for All" program it launched in 2008 as the recession deepened. The credit union, seeing a need for financial education for youth and adults, reached out to schools and social services agencies as part of this new program. It has since worked with several agencies, community organizations and schools to develop specially customized financial education programs. More than 200 community members have participated in its employment skills workshops, and more than 3,800 middle and high school students have learned how to create a working budget.

Judges from the Mountain West Credit Union Association cited Meriwest CU's "positive changes crossing all income barriers." Also, they cited the number of staff members involved in teaching the free financial literacy classes. The "time and effort that went into (those) free classes were amazing," the judges noted.

The Golden 1 CU won a first-place state award in the Louise Herring for Philosophy in Action Award program. Based in Sacramento, Calif., the credit union won in the $1 billion-plus asset category for its successful operation of two in-high school branches. The Herring award honors credit unions for their practical application of the "people helping people philosophy."   

San Diego-based Mission FCU received a first-place Desjardins Youth Financial Educational Award in the more-than-$500-million-asset category for its "Mission 2 $AVE" program, an onsite program for elementary schools to help them educate students on the benefits and responsibilities towards good savings habits.

San Mateo CU in Redwood City, Calif., received a first-place Desjardins Adult Financial Educational Award in the more-than-$500-million category for its various programs, including its finance education programs at community organizations and underserved communities.

Winners of the Herring, Maxwell and Desjardins awards will compete in the national competition presented by the Credit Union National Association.

CU4Kids on pace to raise 9M for kids hospitals

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Several credit union representatives attended the pin exchange at the Children's Miracle Network Hospitals' "Celebration" event in Orlando, Fla.,  last week.  Some attendees were, from left: Melissa Kirtley, Communication FCU, Oklahoma City; Kate Czarnecki, Focal Point FCU, Canandaigua, N.Y., and Jennifer Lown, Oklahoma Employees CU, Oklahoma City.

Click to view larger image
ORLANDO, Fla. (9/25/12)--More than 40 representatives from credit unions, state credit union leagues and the Credit Union National Association attended the Children's Miracle Network Hospitals' annual "Celebration" event in Orlando.

The event brings sponsor organizations together with families from around the U.S. and Canada whose children have benefited from treatment at Children's Miracle Network -supported hospitals.

Through the Credit Unions for Kids (CU4Kids) program, the credit union community is currently the third-largest fundraiser for Children's Miracle Network Hospitals, behind Walmart and Costco.

The CU4Kids program is on pace this year to raise more than $9 million, according to the program's director, Joe Dearborn.

An emotional highlight of the celebration event is the "pin exchange," where sponsors meet the representative families from across the U.S. and Canada, give the kids colorful sponsor pins, and have the children sign a page in a booklet highlighting their story.

"There is a lot of courage out there," CMN Hospitals President/CEO John Lauck told the families gathered for the pin exchange. "These are miracle stories."

Other celebration events included a corporate partners breakout session, a forum to encourage collaboration among corporate sponsors, sessions on trends among the Millennial Generation and social media strategies, and opening remarks from actor/singer John Schneider, who along with Marie Osmond co-founded Children's Miracle Network.

Art Kremer, CEO of Sharefax CU Inc., Batavia, Ohio, and a member of the Credit Unions for Kids(CU4Kids) National Advisory Board, greets a family and presents a CU4Kids pin during the pin exchange at the Children's Miracle Network Hospitals' "Celebration" event. (Photos provided by CUNA)

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CU4Kids announced in May that it has raised more than $100 million for Children's Miracle Network Hospitals since it began its effort in 1996 (News Now May 24).

Last year, the CU4Kids program raised $8.7 million for children's hospitals nationwide.

"2011 was a landmark year for our credit union partners," John Lauck, president/ CEO of Children's Miracle Network Hospitals, said in May.

"Their performance speaks volumes about the character of those in the movement," he added. "Given the unprecedented challenges facing the industry, credit unions could have cut back on their fundraising, but instead they pushed forward to raise $100 million."

Illinois first league to host new Retirement Fair

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NAPERVILLE, Ill. (9/25/12)--The Illinois Credit Union League (ICUL) Thursday was the first U.S. league to host for its staff a new retirement fair created by the National Credit Union Foundation's (NCUF) REAL Solutions Program in concert with CUNA Mutual Group.

The fair, called "Route Your Retirement," assists credit unions in helping their members and staff better prepare for retirement.  It is suitable for people of all ages, not just those nearing retirement. More than 30 ICUL staff participated during one of three one-hour sessions.

Just as credit unions have pioneered a new way to teach budgeting skills to high school and middle school students through Financial Reality Fairs for Teens, this new type of fair for adults is poised to revolutionize the way adults approach planning and preparing for retirement, the league said.

The fair uses experiential learning techniques to help participants:

  • Assess their desired retirement lifestyle;
  • Estimate the likely cost of their chosen lifestyle; and
  • Take steps to assess whether their current savings plan is sufficient to fund their retirement lifestyle choices.
After listening to a short presentation about the intention of the fair, led by Illinois REAL Solutions coach Mark Lynch, participants visited different stations to help determine what their financial needs may be within certain categories. They included: transportation; health and fitness; gifts and donations; housing; food and clothing; communication; and leisure, travel and entertainment.

The program has been tested with Credit Union National Association and CUNA Mutual staff members in Madison, Wis. As part of the pilot fair, participants were asked to provide feedback to help refine the event.

Only 39% of investors between 21 and 50 years of age are confident they will have enough money for retirement, according to the latest research. Of those who are confident, two-thirds have yet to develop an actual retirement plan. To further compound the problem, most are underestimating how long they will live in retirement, the league said.

Federation webinar on LICU designation today

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NEW YORK (9/25/12)--The National Federation of Community Development Credit Unions is offering a free webinar at 2 p.m. (ET) today on the benefits and opportunities that low-income designation provides eligible credit unions.

In August the National Credit Union Administration (NCUA) informed another 1,003 of the nation's 7,200 credit unions of their low-income eligibility, and expedited the application process to increase credit union participation in a federal relief and recovery package for drought-stricken states.

As a result, a month after the announcement, 553 federal credit unions nationwide accepted the designation. The newly designated low-income credit unions (LICU) serve 5.9 million members and manage more than $49 billion in combined assets.

Today, 1,721 LICUs with combined assets of $100 billion provide services to 12.4 million predominantly low income consumers. If every eligible credit union accepts their designation, LICUs would have combined assets of $140 billion, providing affordable financial services to almost 17 million consumers, said the federation.

The LICU designation provides certain privileges aimed at expanding a credit union's capacity to meet the needs of their financially vulnerable members. The benefits include:

  • The authority to accept supplemental (secondary) capital;
  • Exemption from the member business lending limitation of 12.25% of assets;
  • The right to accept non-member deposits up to the greater of $3 million or 20% of total shares; and
  • Access to the NCUA's Community Development Revolving Loan Program, which provides loans and technical assistance grants.
To register for the webinar, use the link.

N.Y. Pa. leaders talk future collaboration

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ALBANY, N.Y. (9/25/12)--The boards and senior management of two leagues--the Credit Union Association of New York (CUANY) and the Pennsylvania Credit Union Association (PCUA)--gathered last week in Cooperstown, N.Y., to conduct a dialogue and foster future collaboration.

Click to view larger image Credit Union Association of New York President/CEO William J. Mellin (first row, third from right) and Pennsylvania Credit Union Association President/CEO Jim McCormack (first row, fourth from left) gather with their board members at a joint meeting last week in Cooperstown, N.Y. (Photo provided by the Credit Union Association of New York and the Pennsylvania Credit Union Association)
Among the topics discussed were emerging issues facing both associations and their credit unions, including:

  • Challenges and opportunities within the credit union environment;
  • Regulatory burden and future actions from the Consumer Financial Protection Bureau;
  • Legislative projections;
  • Industry financial performance;
  • The issue of capital modernization;
  • The importance of regulatory and legislative advocacy; and
  • Opportunities to enhance association membership value.
"Our joint meeting was a great opportunity for our respective boards to come together and build peer connections while participating in candid discussions on how today's ever-changing financial climate is impacting credit unions," said CUANY President/ CEO William J. Mellin.

"The credit union landscape in Pennsylvania and New York are very similar demographically, as both represent credit unions of all asset sizes," said PCUA President/CEO Jim McCormack.

Both Mellin and McCormack noted that their associations look forward to continuing their discussions on ways to cooperate, such as their joint Volunteer Conference next month in Pennsylvania.

The joint dialogue was led by Dennis Dollar of Dollar Associates. He is a former chairman of the National Credit Union Administration.

Entrepreneur keynotes Conn. Collaboration Conference

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MERIDEN, Conn. (9/25/12)--Louis Hernandez Jr., author, consumer advocate and chairman/CEO of Open Solutions Inc., delivered the keynote address at the Credit Union League of Connecticut's (CULCT) Collaboration Conference Thursday in Wallingford, Conn.

From left, Tony Emerson, Credit Union League of Connecticut president/CEO, shares a moment with Louis Hernandez Jr., author, consumer advocate and chairman/CEO of Open Solutions Inc., following Hernandez' address to Connecticut credit unions on the importance of collaboration between cooperatives. (Photo provided by the Credit Union league of Connecticut)
More than 70 credit union representatives attended the event.

Hernandez, who engineered a national movement to Save the American Dream to help small businesses and community-based financial institutions drive sustained economic growth, encouraged attendees to cooperate and collaborate for benefit not only of their credit unions, but also their members.

"The CULCT has been doing great work helping credit unions collaborate and I believe that by working together community-based financial institutions can gain the scale and efficiency of the largest institutions in the world," said Hernandez. "Credit unions play a vital role in local economies, and their ability to support the financial needs of consumers and small businesses is essential to saving the American dream."

Other speakers at the conference included Theran Colwell, director of strategy and business development for CUNA Mutual Group, who spoke on factors influencing the future of credit unions; and Scott Collins, president of Xtend Inc., who described collaboration strategies.

An open roundtable discussion addressed collaboration specific to Connecticut credit unions.

Michigan names Maxwell Herring Desjardins winners

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LANSING, Mich. (9/25/12)--The Michigan Credit Union League has announced the winners of its 2012 Dora Maxwell, Louise Herring and Desjardins statewide competitions (Michigan Monitor Sept. 24).

The Dora Maxwell Social Responsibility Recognition Award Program honors credit unions for their involvement in community projects and activities. Dora Maxwell Award first-place winners include:

  • Michigan One Community CU, Ionia, $50 million to $100 million in assets;                
  • Central Macomb Community CU, Clinton Township, $100 million to $200 million;           
  • CASE CU, Lansing, $200 million to $500 million;
  • Credit Union ONE, Ferndale, $500 million to $1 billion; and
  • Michigan State University FCU, East Lansing, $1 billion plus.
The Louise Herring Philosophy-in-Action Member Service Award honors credit unions for their practical application of the people-helping-people philosophy. The Louise Herring Award first-place winners include:

  • Communicating Arts CU, Detroit, less than $50 million in assets;                       
  • Public Service CU, Romulus, $50 million to $250 million;
  • Michigan First CU, Lathrup Village, $250 million to $1 billion; and
  • Michigan Schools & Government CU, Clinton Township, $1 billion plus.
The Desjardins Youth/Adult Financial Education Award recognizes leadership within the credit union movement on behalf of youth/adult financial literacy. The Desjardins Youth Financial Education Award first-place winners include:

  • CASE CU,  $150 million to $500 million in assets; and   
  • Michigan Schools & Government CU, $500 million plus.
The Desjardins Adult Financial Education Award first-place winner is:  

  • Northland Area FCU, Oscoda, $150 million to $500 million.

CU System briefs (09/24/2012)

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  • SANDY, Utah (9/25/12)--A former police officer stopped a robbery suspect as he fled from a Sandy, Utah , credit union Friday. The suspect allegedly entered Salt Lake City-based TransWest CU at 4 p.m. Friday and passed a note demanding cash to a teller (Fox 13 News Sept. 22). The former police officer entered the branch after the suspect left the building. After he received a description of the suspect, the officer left the branch in pursuit of the suspect. The man held 54-year-old Glen Lamar Jensen at gunpoint until police arrived ...
  • SPRINGFIELD, Ore. (9/25/12)--A man who was suspected of robbing the $1 billion asset Oregon Community CU in Springfield, Ore.,  turned himself in to police Saturday and now faces a robbery charge (KMTR.com Sept. 23). Springfield police were searching for Cody Daniel Gordon, 37, on Friday after the robbery occurred. After walking into the credit union, Gordon allegedly told a teller he had a weapon and then demanded cash. Before he turned himself in, police detectives identified Gordon as the robbery suspect and searched for him at several locations without finding him …
  • RALEIGH, N.C. (9/25/12)--Coastal FCU, based in Raleigh, N.C., has launched its new Student [Cu] Visa card for young adults with no or limited credit history. It touts the importance of establishing good financial practices when building credit and the credit limit increases gradually from $500 top $2,500 over a five-year period. "The basic principle behind the card teaches solid credit management and helps deter the cardholder from falling into credit card debt," said Coastal President/CEO Chuck Purvis.  The card features no interest on balances up to $250 for the first 48 months. Balances over $250 are subject to a non-variable annual percentage rate of 10%. At the end of five years, the card will have a credit limit of $2,500 and a standard 10% APR …
  • CHANDLER, Ariz. (9/25/12)--Fred L. Kent, former president/CEO of Chandler, Ariz.-based First CU, died Thursday at the age of 67. Kent dedicated his entire 37-year-career to the credit union movement. In 1975, he became a federal examiner for the National Credit Union Administration (NCUA). He also served as general manager of J.L. Bammerlin Postal FCU and later as assistant general manager for First FCU after it merged with Bammerlin. Ken was president/CEO of First CU from 1988 until he retired in 2009 and subsequently served as chairman of its board.  He also served on the board of directors of the Arizona Credit Union League for 16 years, three as the board's chairman. He served on the league's Facilities Committee, Audit Committee and Project Services Task Force. Kent also was secretary for Arizona Council of the Blind FCU's board for 23 years. In 2005, he was awarded the Very Outstanding Credit Union Person Award for his accomplishments and involvement in the credit union movement by the ACUL. He is survived by his wife Alletta, their children and grandchildren …

CU System briefs (09/21/2012)

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  • HARRISBURG, Pa. (9/24/12)--The Pennsylvania Credit Union Association (PCUA) Board voted to keep the 2013 association dues at the same level as in 2012, PCUA said (Life is a Highway Sept. 21). "The association board recognizes that credit unions still face economic challenges, and I applaud the board [members] for their strong stewardship of association funds," said PCUA President/CEO Jim McCormack. He noted that this will enable credit unions to continue their voluntary support of the association's awareness campaign for its payday loan alternative program, iBelong …
  • AURORA, Ill. (9/24/12)--Anne Schaal, 66, of Sugar Grove, Ill., has been charged with the theft of more than $30,000 from Aurora (Ill.)  Firefighters CU over a five-year period (Courier News Sept. 21).  Schaal was formerly president of the $1.8 million asset credit union until an audit earlier this year discovered accounting irregularities.  She is charged with felonies theft and unlawful use of a credit card …
  • LINCOLN, Neb. (9/24/12)--Crystal Lankford, 35, of Seward, Neb., has changed her plea Wednesday to guilty in a plea bargain related to the embezzlement of nearly $662,000 from the credit union where she was employed (The Lincoln Journal Star and Associated Press Newswires Sept. 20). The theft allegedly occurred at H.B.E. CU, Seward, from 2006 to 2011. Lankford faced up to 30 years in prison but now won't face more embezzlement or bank fraud charges.  Her sentencing is set for January …
  • WASHINGTON  (9/24/12)--Bill Bynum, CEO of HOPE (Hope Enterprise Corp. and Jackson, Miss.-based Hope FCU) participated in an event in Washington, D.C., hosted by U.S. Sen. Mary L. Landrieu (D-La.) , chair of the U.S. Senate Committee on Small Business and Entrepreneurship, to discuss strategies for bolstering small business ownership and success among African-Americans. At the meeting, Bynum noted that HOPE "has demonstrated that properly structured financing and technical assistance can be the key determinant in an entrepreneur's ability to create jobs that stabilize communities." He told lawmakers that "community development financial institutions like HOPE can make a real difference for people seeking to start and expand their businesses. Many areas are overlooked by traditional lenders. The people in those communities are ready to be successful; they just need the right tools to take the next step." The group included leaders in business, national and local governments, academia, historically black colleges and universities, and entrepreneurship  …

Article highlights phenomenal growth of Minn. CUs

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MINNEAPOLIS and ST. PAUL, Minn. (9/24/12)--Minnesota credit unions attracted nearly 30,000 new members in the first half of 2012, and that jump in membership means they can lend more to consumers and small businesses, according to an article in the Minneapolis/St. Paul Business Journal ( Sept. 21).

The Minnesota Credit Union Network, which worked with reporter Jim Hammerand, helped provide perspective on what MnCUN President/CEO Mark Cummins termed as "pretty phenomenal" growth. The numbers are from the National Credit Union Administration's aggregate data for the first half of 2012.

The article, which also describes credit unions' growth nationwide, notes that the growth came from new members were disillusioned with banks  and switched. Many were referred to the credit union by existing members.

Lending to member businesses increased by nearly 7% and overall loans by 13%. "The new members and their business will help credit unions grow their earnings and business lending," the article reported. "Business lending is capped by regulators at 12.25% of a credit union's assets. Credit unions near the cap may cull their business portfolio to issue new loans.

It reported on the loan growth and business lending experiences of three credit unions:

  • Richfield-Bloomington CU, Richfield, which has sold parts of loans to other credit unions to avoid bumping the  member business loan  (MBL) cap;
  • Spire FCU, Falcon Heights, which increased consumer checking accounts by nearly 62% and business checking accounts by 31%. The new members allowed it to increase its business loans by 55.4% to $2.26 million in the first half; and
  • Affinity Plus FCU, St. Paul, whose "Ditch Your Bank" campaign netted it  7,475 new members during the last half of 2011 and 9,932 in the first half of 2012. The new members will allow Affinity Plus to expand into new markets, develop new products and expand business lending. In the article, CEO Kyle Markland said the credit union hired two business lending specialists to start building its business portfolio by the end of the year. Small business lending was always in the credit union's plans because it is an area vacated by a lot of banks.  "We're willing to put the resources we need to into this area," he told the publication.
Credit unions and the Credit Union National Association (CUNA) are urging Congress to increase the 12.25% of assets MBL cap to 27.5%. Doing this would help the economy by injecting $13 billion for new small-business loans and would help generate 140,000 new jobs the first year. Doing so would not cost the taxpayers, CUNA said.

To access the full article, use the link.

CMG on new normal CUs must educate on retirement

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ROCKPORT, Maine (9/24/12)--Credit unions have the opportunity and obligation to educate members about the "new normal" economy and what it means for their retirement plans, a CUNA Mutual Group speaker last week told attendees of the Maine Credit Union League Management Roundtable. 

"In 1935, life expectancy was age 60. Today, retirement plans are calculated based on a possible life expectancy of age 90 for men and age 92 for women," Niemann explained. "This means people are living much longer on their retirement savings than previous generations and, therefore, need our help to plan."

"Get out in front of members," Niemann advised. "Banks aren't out there educating their customers. You have a tremendous opportunity, seize it."

Credit unions should institute an extensive program of member education to help members understand and navigate the "new normal" economy, he said. This should include educating members about interest rates, investing options, insurance options, future economic trends and providing adequately for health care costs throughout their retirement, Niemann said. Member education  also should include making sure members are fully informed about issues such as Social Security, Medicare, tax planning, estate planning and retirement income planning, he added.

The "new normal" also impacts credit union leaders, Niemann said. Credit unions and their members must assume lower rates of return, lower interest rates and sluggish economic growth for the foreseeable future, which means both credit unions and members need to diversify their sources of income.

"Many credit union members are still too highly leveraged, so they won't be borrowing as much or at all," Niemann said. "This means you need to find other sources of income, such as fee income from investments, to compensate for lower revenue from traditional activities such as lending."

Fannie Mae alerts CUs to fraudulent invoices

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WASHINGTON (9/24/12)--Several Fannie Mae customers who use Desktop Underwriter (DU) have recently reported the receipt of fraudulent invoices, said an alert from Fannie Mae.

Fannie Mae is a CUNA Strategic Services provider.

The invoices purport to come from "FMFM Agency" or "Fannie Mae/Freddie Mac Regulatory Agency." The fake invoices bill the recipient for "DO/LP Agency Access Fees" and "Correspondent Agency Lender Access Fees." Those are not Fannie Mae-generated invoices and are likely fraudulent, Fannie said.

In some cases, to attempt to appear more legitimate, the invoice included names of aggregators with which the customer also may be doing business.

Fannie Mae reminds credit unions that it does not mail invoices for DU or Desktop Originator (DO) usage. All Fannie Mae technology invoices are available through its Online Billing Service.

Fannie Mae asks that credit unions inform their accounts payable areas of the situation in case they receive this type of invoice in the mail.

If a credit union has received an invoice that appears to be fraudulent, it should contact its Fannie Mae account manager directly and provide a copy of the invoice.

IAPI IUSA TodayI INBCI report CUNA on household wealth

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WASHINGTON (9/24/12)--Several national publications and large-market media outlets ran an Associated Press article that featured comments made by a Credit Union National Association (CUNA) economist regarding households' accumulation of wealth and how that will impact the U.S. economy.

The article resulted from a meeting and subsequent discussions that Bill Hampel, CUNA chief economist, had with Associated Press economics reporter Chris Rugaber.

The AP article was picked up by, among others, USA Today, NBC News, The Huffington Post, timesunion.com, The Washington Post, New York Post, ABC News and The Los Angeles Times.

Americans will add $1.5 trillion to $2 trillion to their net worth in the current July-September quarter, Hampel told AP. That would bring their net worth to about 4.3% below its pre-recession peak, he added.

"We're not there yet, but we're getting close," Hampel said. "Households are rebuilding their capacity to spend."

An increase in wealth could provide many consumers and businesses with the confidence and wherewithal to rachet up their spending, which would bolster U.S. economic growth and job creation, Rugaber wrote.

"That's a key goal of the bond-buying plan the Federal Reserve unveiled last week," he added. "The Fed hopes to drive interest rates down and stock prices up."

To read the article, use the link.

NCUF calls for proposals to CFSI Fund

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MADISON, Wis. (9/24/12)--The National Credit Union Foundation (NCUF) says credit unions can submit grant proposals to the Financial Capability Innovation Fund II (FCIF II), an initiative led by the Center for Financial Services Innovation (CFSI), which helps underserved consumers.

FCIF II will provide financial and technical assistance to nonprofit-led initiatives that promote financial capability among low-income and underserved consumers. Credit unions can submit applications in response to CFSI's Request for Proposals, which outlines the competitive process for distribution of $2.5 million of grant funding.

NCUF's board voted to refresh its annual grant program to make a bigger impact with its philanthropy. Instead of making a number of smaller grants for different projects, NCUF will make one large grant to a single project with national reach and relevance to the credit union system. NCUF is working with CFSI to find and fund a project that not only promotes financial capability among low-income consumers, but also has significant impact to the credit union movement.

"CFSI receives a plethora of groundbreaking proposals, and we want to elevate the number of ideas proposed by our community," said Bucky Sebastian, NCUF executive director. NCUF hopes a significant number of proposals will stem from credit unions, working on their own or with other organizations. "There is a strong connection between the member-centric, community-based mission of credit unions and the goals of CFSI and the Financial Capability Innovation Fund II."

Since CFSI's inception in 2004, it has provided $3.75 million in grants to support 16 strategies to improve access to high-quality financial products and services and consumers' financial capability.

"Credit unions are well-positioned to apply to the fund given the focus on projects that couple new or improved tools for education, guidance, or advice with well-designed financial products," said Sarah Gordon, CFSI vice president, advisory services and nonprofit investments.

Some examples of recent CFSI funded projects include:

  • PiggyMojo, a New York-based start-up, which is partnering with financial institutions to develop a tool to help low-income couples capitalize on "impulse savings" moments by using their mobile phone. By sending text messages, customers can move money from their prepaid card to a savings account whenever they decide to spend less.
  • Co-Opportunity Inc., a financial coaching and counseling program based in Connecticut. It is developing an online platform, MyBudgetCoach.org, to help volunteer budget coaches coordinate with their clients. By using technology in the online channel, the coaches can serve more clients.
  • Filene Research Institute, which is conducting the Lower Interest for Timeliness (LIFT) program. It offers reductions in annual percentage rates on subprime auto loans for borrowers who make on-time payments. Several of Filene's partnering credit unions will implement the program nationwide.
 

CFSI's Request for Proposals document details its funding criteria very clearly, Sebastian said. "One key component is that the project must 'break new ground,' meaning that it represents a new or improved model in the nonprofit field or financial services industry for promoting financial capability."

For more information, use the link.

Credit unions with 501(c)(3) affiliates can apply and other credit unions can apply in partnership with a 501(c)(3) organization.  Grant applicants should complete and send proposals to CFSI, not NCUF. The deadline to submit proposals is Nov. 2.  For inquiries about CFSI's Request for Proposals, send an e-mail to questions@cfsinnovation.com.

Members have spoken Tech CU wont convert to bank

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SAN JOSE, Calif. (9/24/12)--Technology CU will continue to operate as a credit union. Members of the San Jose, Calif.-based credit union voted last week against converting the $1.5 billion asset credit union into a mutual savings bank.

"Our members have voted and overwhelmingly indicated their preference to remain a credit union," said Barbara Kamm, president/CEO of Tech CU. "We respect this decision and appreciate that so many of our members weighed in on this important vote. Providing the highest level of service for members will continue to be our top priority--and we will do so under our credit union charter."

The credit union has 69,000 members. Roughly 25% of eligible members cast votes, with nearly 77% of the votes against the conversion.

Tech CU Board Chairman Mical Brenzel noted that the responsibility of its board and management "is to consider all strategic alternatives that may be in the best interest of Tech CU and our membership as a whole." He said the proposal to convert came out of a study of trends in the industry regarding the "tremendous increase in share insurance assessments" by regulators and the "continued reluctance of Congress to expand credit union lending powers." He said the board concluded that it would receive lower assessments from the banks' regulator, the Federal Deposit Insurance Corp.

"Members at the special meeting voiced frustration, saying we did not make a compelling case for charter change," said Kamm. She said the credit union was unable to communicate its view effectively because of rules that govern how credit unions can communicate about charter change with their members.

The National Credit Union Administration's (NCUA)  rules outline disclosure and voting procedures, plus procedures to facilitate communications among members and for members to provide their comments to directors before the credit union board votes on a conversion plan.

NCUA updated its rules in 2006 to require directors adopting a conversion proposal to determine that the conversion is in the best interest of members and that directors sign a document certifying that they have fulfilled their fiduciary duty to members in pursuing a conversion (News Now Dec. 14, 2006).

The rule also requires that boxed disclosures regarding the conversion be included in all related mailings distributed 30, 60, and 90 days before a membership vote. Boxed disclosures must include:

  • What a "yes" or "no" vote means in terms of the wording on the ballots; and
  • The effect of a conversion on the credit union member in terms of the loss of beneficial savings and loan rates and charges for services when average credit union products and services are compared with those of other financial institutions.
Both NCUA and the Credit Union National Association (CUNA)  have maintained that bank charters won't benefit members (News Now May 9, 2012, and Oct. 4, 2011). CUNA also has said that ultimately the decision to convert to a bank must be made by members of the credit union who own the institution based on all the facts provided with complete transparency. Check CUNA's Principles on Credit Union to Bank Conversions by using the link.

Technology CU has served the high tech work force in Silicon Valley for 50 years.

"We recognize our members' strong commitment to the credit union industry, and we dedicate ourselves to working within the credit union charter to ensure that Tech CU continues to perform safely, securely, and successfully in the future," said Brenzel. "Our members have spoken, and we look forward to the future as we remain a very successful credit union."

Gov. Shumlin meets with Vermont CUs

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COLCHESTER, Vt. (9/24/12)--
Vermont Gov. Peter Shumlin (center) greets some of the 25 credit union leaders who met with him Tuesday during an event hosted at the new Colchester office of the Association of Vermont Credit Unions.  (Photo provided by the Association of Vermont Credit Unions)
Vermont Gov. Peter Shumlin met Tuesday with about 25 credit union leaders from around the state at an event hosted at the Association of Vermont Credit Unions' (AVCU) new Colchester office.

The event was an opportunity for the governor to meet some of the people responsible for providing credit union services to nearly one out of every two Vermonters, AVCU said (Newslines Express Sept. 21).

Shumlin, a credit union member, expressed his support for the continued tax exempt status of credit unions and for their desire to provide increased business lending to the state's small business community, said AVCU.  He also commented on the increased importance of Vermont's local credit unions in light of bank consolidation and out-of-state decision making.

"Gov. Shumlin was a supporter of credit unions when he served in the state Senate," said Joe Bergeron, AVCU president. " In his first four years as Vermont's chief administrator, he has continued to recognize their important contribution to the state's economy and to Vermont consumers," he added.

Shumlin also updated credit union leaders on the favorable Vermont economy and unemployment situation, the continued Irene recovery, the needs of small business, and his reasons for continuing to pursue changes in the state's healthcare system.

Avoid disaster within disaster--lessons from CMG

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MADISON, Wis. (9/24/12)--Three lessons have been gleaned by CUNA Mutual Group's claims specialists and Disaster Response Team over the years from credit unions that have handled disasters better than others.

John Wallace, CUNA Mutual group vice president of commercial products, is offering advice to help others avoid "disaster within a disaster." CUNA Mutual said the advice relates to September's designation as National Preparedness Month by the Federal Emergency Management Agency (FEMA).

Review and update your insurance coverage, including extra expense coverage, said Wallace. "Understand what your insurance does and doesn't cover. If your policy doesn't provide 100% replacement value for property, be sure the credit union is prepared for the co-pay. Also, take into account any property improvements made since the last time you updated your policy limits."

Wallace also advises looking closely at coverage limits for extra expenses involved in providing member service during disaster recovery. It's difficult to over-estimate what it will cost to run a credit union when a branch or main office has been damaged or destroyed. Having adequate "Extra Expense" and other coverage limits for buildings, business personal property and data processing can be the major factor in how quickly and completely a credit union recovers from severe damage and the indirect losses.

Practice your disaster response plan, Wallace said. The National Credit Union Administration requires credit unions to have a written plan for disaster recovery, but if employees have never seen and practiced implementing the plan, chances are it won't work when disaster strikes.

"Having all employees read through and practice the plan helps you find bugs and work them out. And it's important for all employees to be aware of the plan because, in an emergency, any one of them may end up having to make quick, important decisions," he said.

Set up an emergency communications procedure. "When a disaster occurs and your insurance provider has been informed, your top priority should be communicating with employees to see who's available [and] who needs help, and to share the plan for restoring service," Wallace said.

Employees must know how to get in touch with the credit union in these situations. Every employee should have a "cheat sheet" with them or at home detailing first steps to take.  The cheat sheet should provide alternate locations designated for temporary branch service and include phone numbers and e-mails to use if phones or Internet service are available.

If phone or Internet service is unreliable, add "phone trees" to employees' cheat sheets that include the names and contact information of several other employees. Instruct employees to call each person on their list--they may get through to one co-worker who in turn has found someone else, and so on. "Word about who's available, who might need assistance, and what to do next can spread surprisingly fast this way," Wallace said.

Also consider setting up an agreement with your state league to provide a toll-free number for employees to call in a disaster situation.

CUNA Mutual Group provides resources to assist with disaster preparedness on its website. The page includes links to:

  • An Extra Expense calculator to help determine whether your credit union is adequately insured;
  • Disaster preparedness risk assessment tool;
  • Property and Business Liability product sheet;
  • Information on CUNA Mutual's Disaster Response Team; and
  • U.S. Government disaster preparedness websites.
Additional information for policyholders can also be found in CUNA Mutual Group's online Protection Resource Center. Use the link.

Ohio CUs receive kudos from lawmakers candidates

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COLUMBUS, Ohio (9/21/12)--Ohio credit unions were praised at a gathering in the Statehouse, garnered loyal support from a Republican Ohio Statehouse candidate, and pledged to back a congressional candidate who has a history of helping credit unions on critical issues, according to the Ohio Credit Union League.

Joyce Beatty, a Democrat seeking election to the 3rd Congressional District, told Central Ohio credit union leaders at a Statehouse Chapter breakfast that she envisions a commercial where she states: "I'm Joyce Beatty--one of the 2.7 million people in Ohio who belong to a credit union. And I approved this message" (eLumination Newsletter Sept. 19).

Beatty shared the story of joining a credit union in her early 20s so she could buy a new car. "I will bring a new voice to Washington," Beatty said. "And I will be proud to represent you."

Dave Joyce of Ashtabula, a Republican candidate for Ohio's 14th U.S. House seat, said during a meeting in Washington, D.C., last week that he will be a friend of credit unions if elected. Joyce voiced his support for raising the member business lending (MBL) cap and maintaining credit unions' federal tax exemption, while meeting with Rose Bartolomucci, CEO of Towpath CU in Fairlawn, and John Florian, vice president of government and political affairs at the Ohio league.

Joyce explained that his support for credit unions originated while he was in his 20s when, after being turned down by a bank for a mortgage, he was offered the loan by St. Monica's (now Ohio Catholic) FCU in Garfield Heights. "Credit unions will have a friend in me," Joyce said.

Joyce Healy-Abrams, who is running for Ohio's 7th Congressional district, is receiving strong credit union backing because of her public support on crucial issues such as raising the MBL cap. She shared campaign material that highlighted her MBL support as a central plank in her broader job creation strategy with credit union officials at a meeting at CSE FCU in Canton, and has promoted the issue in radio interviews.

She is running against incumbent Bob Gibbs (R-Lakeville). Gibbs, who is not a co-sponsor of current MBL legislation, has said publicly that he supports taxing credit unions, according to the Ohio league.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses, considered a staple in the economy. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

New scam Ransomware locks computers extorts payment

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WASHINGTON (9/21/12)--A new "drive-by" Internet virus known as Reveton ransomware locks computers, carries a fake message and tries to extort money from victims--bogusly claiming it is from the Federal Bureau of Investigation (FBI), according to a report issued by the FBI's Internet Crime Complaint Center (IC3). Credit unions should be aware of the threat.

Unlike many viruses that activate when users open a file or attachment, Reveton can install itself when users simply click on a compromised website. Hence it is describe as a drive-by malware. 

Once it is infected, the victim's computer immediately locks, and the monitor displays a screen stating there has been a violation of federal law.

"We're getting inundated with complaints," said Donna Gregory of the FBI Internet IC3.

The phony message goes on to say the user's Internet address was identified by the FBI or the Department of Justice's Computer Crimes and Intellectual Property Section as having been associated with child pornography or illegal online activity.  

To unlock their machines, users are required to pay a fine using a prepaid money card service, as part of the central ploy of the scam to extort cash from victims.

IC3 suggests that victims do not pay or provide any personal information, contact a computer professional to remove the virus from their computer, file a complaint with IC3 and look for update about the Reveton virus on the IC3 website.

Accepting matricula card key to Mich. CUs growth

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FERNDALE, Mich. (9/21/12)--Credit Union ONE, Ferndale, Mich., is accepting the Matricula Consular de Mexico card as a form of identification to establish membership at its Southwest Detroit branch.

Earlier this month, Credit Union ONE, Ferndale, Mich., began to accept the Matricula Consular de Mexico card as a form of identification to establish membership at its Southwest Detroit branch. From left are: J. Abel Sanchez-Guerrero, Consulate of Mexico-Community and Cultural Affairs Department; Mariza Sanchez, Credit Union ONE Southwest Detroit assistant branch manager; Vicente Sanchez Ventura, Consul of Mexico; Gary Moody, Credit Union ONE president/CEO, and Yvette Gonzalez, Credit Union ONE Southwest Detroit branch manager. (Photo provided by Michigan Credit Union League)
The Matricula Consular de Mexico card an is identification issued by the Mexican consulate to Mexican nationals. It is primarily issued to Mexican citizens residing outside of Mexico.

Credit Union ONE has operated a branch in Southwest Detroit for decades, and recently determined that access to financial services for Mexican citizens living and working in the community was not being met, partly because of issues related to identification.

"Changes to state laws and federal laws to combat terrorism and money laundering made opening an account impossible," Yvette Gonzalez, branch manager of the Southwest Detroit branch told the Michigan Credit Union League (Michigan Monitor Sept. 17). "Matricula offers us the ability to assure access to services while also being compliant with various laws."

The credit union also takes part in a Federal Reserve funds transfer program known as Directo a Mexico.

Gary Moody, Credit Union ONE president/CEO, said offering services to families that move money between Mexico and the U.S. is critical. "This is about providing safe, secure, low-cost financial services to an important and sometimes vulnerable segment of the community," Moody added.

Coopera works in partnership with the Credit Union National Association (CUNA) and credit unions to help credit unions nationwide grow by serving the Hispanic community. Coopera and CUNA designed El Poder es Tuyo (The Power is Yours), a customizable, Spanish-language personal finance website for Hispanic credit union members and potential members. For more information, use the resource link.

Royal CU to donate 1M for community arts center

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EAU CLAIRE, Wis. (9/21/12)--Royal CU (RCU) in Eau Claire, Wis., announced a $1 million donation to help fund the Community Arts Center in Eau Claire; part of the Confluence project that was introduced this past May.

Rudy Pereira, RCU CEO, and Doug Olson, RCU's board chairman made the announcement Wednesday confirming the $1.3 billion asset credit union's commitment at a press conference held at the RCU Corporate Center in downtown Eau Claire.

"At Royal Credit Union we pride ourselves for being good community partners," Olson said. "We actively support youth, education and the betterment of our communities. We know that by giving back we can make a difference in the lives of our members and community."

The Confluence Project, located in Eau Claire across the river from the RCU Corporate Center, is a collaborative effort of public/private partnerships. This partnership will construct a new public Community Arts Center, with a private commercial/retail complex and the University of Wisconsin-Eau Claire student housing at the confluence of the Chippewa and Eau Claire rivers in downtown Eau Claire. It will showcase the local arts scene, cultivate emerging creative talent and could serve as a catalyst for revitalization, RCU said.

"As corporate citizens, we feel our participation in this collaborative project is necessary and are looking forward to playing a key role in the cultural expansion of Eau Claire," Pereira said.

The gift from RCU will be paid over five years and will be used to help build the Community Arts Center, including naming rights of the 450-seat theater.

CU System Briefs (09/20/2012)

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  • RALEIGH, N.C. (9/21/12)--To provide 5,000 holiday gift boxes for North Carolina soldiers deployed throughout the world, SECU will be collecting items through Oct. 31 in all 244 of its branches statewide in support of the Third Annual SECU Supports the Troops Campaign. The "wish list" available in SECU branches and on the SECU website includes items such as travel sized toiletries and snacks. SECU will also accept monetary donations to assist with shipping costs for the December delivery of the gift boxes to troops. Thank you cards from local school children will once again be included in 2012 packages …


  • FREMONT, Ohio (9/21/12)--Fremont (Ohio) FCU, with $153 million in assets, has partnered with Downtown Fremont Inc. to form a "cash mob" downtown event in the city to encourage shopping at locally owned small businesses (The News Messenger Sept. 14). The cash mob idea came from a national movement that started in Cleveland when a community member there implored consumers to shop at small businesses and bolster the local economy, Angie Morelock, director of downtown Fremont Inc., told the newspaper. Cash mob events go to businesses that give back to their community, have appeal for men and women, and offer items at roughly a $20 price point, the paper said ... 

Average middle-class financial error price tag 23K

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WASHINGTON (9/21/12)--Two-thirds of middle-class Americans acknowledge having made financial mistakes--often at a steep price, according to a new report from the Consumer Federation of America and Primerica. The results of the study reveal financial education opportunities for credit unions.

The new report, "The Financial Status and Decision-Making of the American Middle Class," also concluded that the financial condition of most middle class families is challenging. For example, in 2010 the typical middle-class family had financial assets of $27,300--including retirement savings but not pensions--which was 28% less than the $37,800 held in 2007.

The analysis includes a national survey of 2,015 representative adult Americans by ORC International in July of this year and a statistical examination of the Federal Reserve Board's 2010 Survey of Consumer Finances, by Professor Catherine Montalto of The Ohio State University.

In the ORC International survey, 843 out of the 2,015 respondents reported household incomes between $30,000 and $100,000 and were considered to be middle class.

Two-thirds of middle-class Americans (67%) said that, in the past, they had made at least one "really bad financial decision," and nearly half of those questioned (47%) acknowledged that they had made more than one bad decision. The median cost of these bad decisions was $5,000, but the average cost was $23,000.

Few respondents said their main source of information or advice about specific financial decisions would be from the Internet, books, magazines or TV. Others said they would not seek information or advice in making financial decisions. For example, for "saving and investing," 15% said they would rely on the Internet, publications or TV for the information, yet another 17% said they "wouldn't seek any information or advice, and just make a decision."

However, 45% said they would use information and advice from a financial professional to make a financial decision.

Middle-class Americans are much more risk-averse than those with higher incomes, according to the study. If given $1 million to invest for retirement, 21% of middle-class Americans, compared with  48% of those with higher incomes ($100,000 or more), would invest mainly in "stocks, bonds, and/or mutual funds." About 19% of the middle-class group would "invest" most of their funds in a savings account, while 25% would invest mainly in real estate.

The second source of information was the Federal Reserve Board's 2010 Survey of Consumer Finances, which was released several months ago. Catherine Montalto of The Ohio State University used its database, and that of the Fed's 2007 survey, to compute financial statistics for the 40% of households in the third and fourth income quintiles--incomes between $35,600 and $94,600 in 2010.

For middle-class families, the typical debt payments to income ratio was 20% with only 9% having debt payments that were overdue by 60 days or more. But nearly half (49%) still carried credit card debt from month to month, and the typical (median) debt for these families was $2,700.

The decline in housing prices was the main reason that the net assets of the typical middle income family declined 35%, from $145,600 to $94,700.

"Families without a lot of resources are balancing difficult and expensive priorities such as saving enough for college and retirement or paying off a mortgage and consumer debt, said John Addison, Primerica Co-CEO. "When you consider these demands within the context of the last decade's falling incomes, we are nearing a crisis in this country."

Consumers feeling better about credit cards

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WESTLAKE VILLAGE, Calif. (9/21/12)--Credit unions are known for meeting and exceeding member service expectation levels. Now it appears as if they may be getting a little more competition on the credit card front from credit card companies. Consumer satisfaction with credit cards and companies that issue them is at its highest level since the onset of the financial crisis, according to a new study from J.D. Power and Associates.

Overall credit card satisfaction averages 753 on a 1,000-point scale in 2012, up from 731 in 2011 and 714 in 2010, according to J.D. Powers credit card satisfaction survey.

The 39-point improvement during the past three years raises credit card customer satisfaction to its highest level since the study began six years ago.

The study measures customer satisfaction with credit cards in six key factors: interaction; credit card terms; billing and payment process; rewards; benefits and services; and problem resolution. Satisfaction scores in all factors have risen year over year.

Among customers who have had a credit card problem, 24% have experienced credit card fraud, the most commonly reported problem. Slightly more than one-half (52%) of customers who experienced credit card fraud were contacted by their credit card issuer before they even realized they were a victim of fraud. About 84% of customers who reported a problem in 2012 indicate their problem was resolved.

American Express again ranks highest in credit card satisfaction with a score of 807. American Express has ranked highest in the study in each of the six years the study has been conducted. Discover Card follows with a score of 799, and Chase ranks third with 762.

Among customers who have had a credit card problem, 24% have experienced credit card fraud--the most commonly reported problem. More than one-half (52%) of customers who experienced credit card fraud were contacted by their issuer before they even realized they were a victim of fraud. 

About 66% of customers in 2012 say they "completely" understand how to earn rewards, and 80% of customers say they "completely" understand how to redeem their rewards. Also, more credit card customers in 2012 than in 2011 are likely to indicate that the value of their rewards programs has increased (18% vs. 15%, respectively)

Online usage continues to increase, as 78% of customers in 2012 indicate they use their issuers' websites, an increase from 76% in 2011. Also, customers in 2012 report accessing their issuer's websites an average of 40 times per year, primarily to conduct simple transactions and to resolve problems.

CU System briefs (09/19/2012)

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  • MUNCIE, Ind. (9/20/12)--Stanley Dewayne Wills, 33, of Muncie, Ind., was sentenced to 60 years in prison for his role in a May 2009 armed robbery at Industria Centre FCU (The Star Press Sept. 18). Twenty years of the sentence stemmed from Wills' being designated a habitual offender. He had pleaded innocent to armed robbery, criminal confinement and other charges. It was reported he planned to appeal the conviction (The Star Press Sept. 19). A co-defendant, John Repass, recently was sentenced to 20 years in prison for his role in the $250,000 holdup, which was believed to be the largest holdup in local history. About $55,000 of the stolen money was recovered. Wills and Repass were ordered to pay restitution of $194,894 …
  • EAST PROVIDENCE, R.I. (9/20/12)--An East Providence, R.I., woman has been charged with robbing Columbus CU around noon Tuesday while her three-year-old son allegedly was in the getaway truck. Jennefer Gomes, 34, was charged with first degree bank robbery. The arrest was made three hours after a woman wearing a wig and Halloween mask entered the credit union and told the teller she had an explosive device. She fled with an undetermined amount of money. Police said they recovered some of the loot (Providence Journal Sept. 19 and abc6.com Sept. 18). The robbery was one of two credit union robberies in East Providence Tuesday. The second was at Pawtucket CU when a man described as the "bearded bandit" entered the credit union before 3:30 p.m. The bearded bandit is a suspect in half a dozen robberies since February (The Call Sept. 19) …
  • FARMERS BRANCH, Texas (9/20/12)--The Texas Credit Union Foundation (TCUF) said its 15th annual golf tournament hosted with the Texas Credit Union League's joint Leadership and Marketing conferences in San Antonio has raised about $85,000 in net proceeds. Proceeds will help TCUF provide resources for financial education initiatives, educational grants and scholarships for Texas credit union professionals and volunteers (LoneStar Leaguer Sept. 18). The tournament hosted 136 golfers and 62 sponsors, with dozens of volunteers at Canyon Springs Golf Club in San Antonio …

Missourians embrace mobile banking technology

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ST. LOUIS (9/20/12)--In Missouri, it is just a matter of time before mobile banking becomes the primary method for conducting financial transactions, according to an online consumer survey conducted by the Missouri Credit Union Association (MCUA).

Nearly 40% of Missourians surveyed said they currently use mobile banking. Across all ages, the top reasons for using mobile banking included confirming payments, balancing checking accounts and transferring money.

Those who don't have mobile banking were primarily age 45 and older. They were asked why they don't use the service. The three most popular answers:

  • I don't have a Smartphone;
  • I have no need for it; and
  • I have security concerns.
MCUA noted that the primary reason for not using mobile banking was a lack of technical capabilities, not a negative perception of the service.

Also more than 50% of non-users said they were "extremely likely" or "somewhat likely" to use mobile banking in the future.

Vantage CU, based in Bridgeton, offers an inclusive mobile banking product, called tweetMyMoney, which works on all cellular devices that have text messaging capabilities. The first of its kind in 2009, it is operated via Twitter.

"We have several hundred members enrolled in tweetMyMoney," said Eric Acree, Vantage executive vice president, who noted the service is free and ensures security. "No account number, nor other sensitive personal or account information, is displayed in tweetMyMoney. All the sensitive information is kept safe at Vantage behind the online banking firewall," Acree said.

More than 2,000 Missourians participated in the survey, which was conducted from June 15 to July 15, said MCUA.

CU league urge members Write CFPB on reg burden

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FARMERS BRANCH, Texas (9/20/12)--While many credit unions are weighing in on the regulatory burdens that new regulations are posing, some are explaining to their members exactly what the new regulations will mean to them--and urging their members to comment as well.

"Members of credit unions can't fathom the meaning of increased regulatory actions on their credit union--unless your tell them," said Winter Prosapio, assistant vice president of public affairs at the Texas Credit Union League, in the league's blog Wednesday.  She pointed out that Wayne Vann, CEO of the $1.5 billion asset Navy Army Community CU based in Corpus Christi, Texas, did just that.

In a newsletter article, Vann spelled out how regulatory changes recently proposed by the Consumer Financial Protection Bureau (CFPB) would impact his credit union's members.  

"Though the CFPB's purpose is to provide oversight, what we have experienced to this point has been the implementation of stricter regulations and requirements for financial institutions," Vann wrote. "These regulations drive all financial institutions' costs upward; which of course, in turn, filters down to you, the member.

"The most recent requirement involves real estate appraisals," he said. "In the past, we have relied on various no-or-low cost sources to gain valuations. Going forward, that is not an option; and therefore, every real estate advance will require a certified appraisal at an average cost of $375. Note: this is just one example of a cost increase," he wrote.

He told members he supports consumer protection but believes the agency is "misguided, and its rule-making will have unintended consequences." He recommended members go online to consumerfinance.gov to research the agency. "Write them! Call them! Email them! Encourage thorough examination and scrutiny of any rule changes and their effect on you and your wallet," he urged.

The league's blog provided three tips for crafting such a letter to credit union members.  Members need to know:

What the CFPB  is and how it works.  While very familiar to credit unions, CFPB "will come as a complete surprise to most members.  Note that the bureau is just over a year old and that its purpose is to protect consumers from bad actors in the financial sector. However, due to the nature of regulation, many of those rules will apply also to not-for-profit credit unions as well," said the league.

What the unintended consequences are. Vann told how costs will rise. Many credit unions may no longer offer certain services--such as remittances--as a result of CFPB's rule changes. And its attempt to protect consumers may actually hurt them by possibly decreasing available credit if lenders cease offering certain types of lending products because of cost and the complexity of compliance.

That their voices matter.  Regulators want to hear concerns from consumers more than anyone, said the league. "Their voices are valuable in shaping these rules, so the end result is favorable for the very individuals who will, in the end, bear the costs of these regulations. Urge members to ask CFPB to focus on bad actors, but to exempt credit unions from its costly and burdensome new regulations, said the league.

CEOs IFox BizI op ed Big bank policies hurt American dream

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GLASTONBURY, Conn. (9/20/12)--"Big bank policies are limiting the ways that Main Street banks and credit unions can generate income and lend to small businesses, while subjecting them to onerous compliance burdens," an entrepreneur specializing in banking technology wrote in an opinion-editorial in Fox Business Monday.

The article entitled "Preserving the American Dream Through Small Businesses" was written by Louis Hernandez Jr., CEO of Glastonbury, Conn.-based Open Solutions, a bank technology firm that serves credit unions and banks.

"These and other policies are also harming small businesses by limiting their access to capital and burying them under regulations that consume valuable resources and increase operational costs," Hernandez wrote.

Noting that he is an "entrepreneur who has benefitted greatly from the American Dream," Hernandez wrote that he is "troubled to see the tenets of this dream--owning a home, getting an education, having a job or owning a business, and achieving financial self-sufficiency--being crushed by regulations that are killing small businesses and community-based financial institutions that support them."

Community-based institutions disproportionately finance small business growth, which create the majority of new jobs, he wrote.

"The importance of Main Street financial institutions, which drive the national economy one community at a time, cannot be underestimated," Hernandez said. "By financing the small businesses that create 65% of new jobs, they drive consumer spending, which represents about 70% of the U.S. economy."

Community-based financial institutions can collaborate with each other, upgrade their tedchnology infrastructure, and create greater awareness of their role in the national economy, he said, noting he has written a book, Saving the American Dream: Main Street's Last Stand, which includes credit unions and community banks explaining how their institutions make a difference to small businesses and job growth.

In the article, he cited as an example Beacon CU, a $962 million asset credit union in Wabash, Wash., which gave a fresh start to a mom-and-pop office supply shop bankrupted by the recession. Today that business plays an important role in its community.

To access the full article, use the link.

The Credit Union National Association (CUNA) and credit unions nationwide are urging the House and Senate to pass measures that would introduce roughly $13 billion in new small business loans and help create 140,000 new jobs the first year. Congress can allow credit unions to help the economy simply by raising the member business lending cap for credit unions to 27.5% of assets from the current 12.25%, at no cost to the taxpayer, said CUNA.

IBiz2CreditI attributes Aug. CU slowdown to MBL cap

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MADISON, Wis. (9/20/12)--Although the overall volume of U.S. loan applications rose by 4.3% in August, credit union loan approvals declined--in part because of the member business lending (MBL) cap, according to the Biz2Credit Small Business Lending Index. 

For a third consecutive month, credit unions' loan approvals slid in August, falling to 52.9%--the lowest percentage since June 2011 (innovationheat.com Sept. 18).

The slowdown in loan approvals is partially caused by the credit unions' mandated 12.25% MBL cap, the report indicated. Small banks were reporting increases in business lending, showing the need for business loans is strong, said Biz2Credit.   

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses, considered a staple in the economy. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

On Sept. 12, CUNA sponsored a Capitol Hill event in Washington, D.C., focusing on the timeliness of adopting credit union business lending legislation. It was live-streamed on the internet, bringing the urgency of the legislation into the offices of House and Senate members, as well as to credit unions and leagues nationwide  (News Now Sept. 13).

The sponsors of the MBL legislation--Sen. Mark Udall (D-Colo.) and Rep. Ed Royce (R-Calif.)--made special appearances at the event, which drew nearly 200 credit union and small-business supporters, and members of congressional staff.

Udall said that the restriction on credit union business lending is a "regulation that we ought to lift."

"When credit unions have this additional capacity to lend to small businesses, it's a no-cost, sure-fire way to grow our economy," Udall said. "Simply put: There are credit unions with money to lend, and small businesses in many communities that need loans to spur job growth--why don't we get government out of the way and let our economy grow?"

The event also included panels of small business advocates, credit unions and small-business owners. Panelists said they saw no clear reason to oppose an MBL cap increase, and while banks have claimed there is no demand for small business loans, John Arensmeyer, CEO of The Small Business Majority, said his experience indicates universal demand for small-business loans nationwide.

To read the innovationheat.com and News Now article, use the links.

CUs starting to see repeat refinancings

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MADISON, Wis. (9/20/12)--Some credit unions are seeing more refinancings and even repeat refinancings because of the continuing drop in U.S. mortgage interest rates.

Millions of homeowners who refinanced their mortgages a few years ago when 30-year fixed-rate loans fell below 5% have opted to refinance for a second or third time as rates further decline (dailyherald.com Sept. 14).

Last year, U.S. mortgage bankers provided funds for $1.5 trillion of loans--of which 66% were refinancings. This year another $1.5 trillion in loans are on track to be originated, but refinancings likely will constitute 75% of the total, according to data compiled by National Mortgage News and the Quarterly Data Report (American Banker Sept. 18).

Amoco FCU, a $589 million asset credit union based in Texas City, Texas, is offering a 2.75% interest rate on 10-year mortgages and a 4.75% rate on 30-year mortgages, according to the Texas Credit Union League (LoneStar Leaguer Sept. 17).

The credit union is seeing more members wanting to refinance their current mortgage loans to take advantage of the lower rates, the Texas league said.

During the past couple of years, Denali Alaskan FCU Vice President Jim Picard told the Banker he is seeing a large upswing in multiple refinancing deals in his $484.3 million asset credit union's service area in Anchorage, Alaska. 

Achieva CU in Largo, Fla., set a record in August in its mortgage department, said Gary Regoli, president/CEO of the $997 million asset credit union (Tampa Bay Times Sept. 10). The majority of the transactions are refinancings, and the credit union also is seeing good business with second mortgages, Regoli added.

Last week, the refinance share of U.S. mortgage activity rose to 81% of total applications from  80% the prior week, according to the Mortgage Bankers Association (MBA).

Seven leagues collaborate on exam survey project

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HARRISBURG, Pa. (9/20/12)--Seven credit union leagues/associations in the National Credit Union Administration's (NCUA) Region 2 are collaborating on an examination survey project.

Among the state leagues participating in the project are: Pennsylvania, California/Nevada, Virginia, Delaware, New Jersey, Maryland/D.C. and West Virginia, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Sept. 19) .

The survey feedback on NCUA exam practice trends will be live through Oct. 19.

The New Jersey Credit Union League developed the program prototype to address the examination process in terms of education, preparation, follow-up and proactive interaction with regulatory agencies.

The program is designed to bring together CEOs to share their exam experiences challenges and insights, and provide them with an opportunity to share in the resolution process of addressing regulatory and examination issues.

"We realize the examination experience can be a stressful time for a credit union," said John Kilduff, PCUA vice president of credit union services. "We're collaborating with six other credit union leagues in NCUA Region 2 to seek feedback from credit unions in Pennsylvania. The information we receive from our credit unions will be aggregated with that from other Region 2 states and will be used to begin discussions with Credit Union National Association and NCUA on ways to improve the process going forward."

FBI Cybercrooks target CU bank employees

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WASHINGTON (9/20/12)--Cybercriminals are obtaining the login details of financial institution employees--targeting credit unions and small- to mid-sized banks--to illegally wire themselves hundreds of thousands of dollars, according to a new Federal Bureau of Investigation (FBI) fraud alert.

Fraudsters obtain the logins through phishing and spam e-mails before installing keystroke loggers and remote access Trojans on their computer, gaining complete access to internal networks and logins to third party systems.

In some of the incidents, before and after unauthorized transactions occurred, financial institutions were victimized by a distributed denial of service attack against their public websites or Internet banking URLs. The attacks likely were used as a distraction for credit union or bank personnel to prevent them from immediately identifying a fraudulent transaction, which in most cases is necessary to stop the wire transfer, said the FBI.

The illicit wire transfer amounts have ranged between $400,000 and $900,000. In at least one case, the fraudsters raised the wire transfer limit on a member/customer's account to allow a larger transfer. In most of the identified wire transfer failures, criminals were unsuccessful only because they entered the account information incorrectly.

The FBI recommended that financial institutions educate employees on the dangers associated with opening attachments or clicking on links in unsolicited e-mails. Also, financial institutions are advised not to allow employees to access personal or work e-mails on the same computers used to initiate payments. For a list of further FBI recommendations, use the link.

Credit bureau sued over info provided to OFAC

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SAN FRANCISCO (9/20/12)--A man who thought his name was on a terrorist watch list has sued the credit bureau Trans Union, alleging it broke California laws by failing to alert him to all the information it sells about him to third parties such as the Office of Foreign Assets Control (OFAC) .

The class action lawsuit by Brian D. Larson of Lake Forest, Calif., was filed Sept. 12 in the Superior Court of California in San Francisco. Trans Union is headquartered in Chicago and is the third-largest credit reporting bureau.

The lawsuit alleges the credit reporting bureau violated the California Consumer Credit Reporting Agencies Act (CCRAA), which oversees state consumers' rights to inspect and correct consumer information sold about them.  Trans Union "deprives consumers of these rights by willfully failing to provide consumers with complete and truthful  'OFAC  alert' information it sells about them to third parties," said the complaint.

OFAC alerts supposedly advise credit grantors whether the credit applicant is a match to terrorists, money launderers, narcotics traffickers and other enemies of the U.S. defined on OFAC's Specifically Designated National and Blocked Persons List.  OFAC requires credit unions and others to block property and reject transactions involving any country, entity or individual on OFAC's list (News Now June 20, 2008).

In the complaint, Larson said he obtained a copy of his personal credit report from Trans Union on Oct. 26, 2011. The report disclosed information under the headings "Personal Information," "Adverse Accounts," "Satisfactory Accounts," "Regular Inquiries" and "Account Review Inquiries," then stated it was the "End of Credit Report." 

Beneath that heading, under "Additional information," was a paragraph indicating that the following information was provided as a courtesy and was not part of the credit report but may be provided when TransUnion received an inquiry about the plaintiff from an authorized party. The report noted, "This additional information can include Special Messages, Possible OFAC Name Matches, Income Verification and Inquiry Analysis Information," said the court document.

Because the bureau stated that the OFAC alerts are "additional information" provided only as "a courtesy," "consumers such as plaintiff are misguided into believing that they cannot dispute, and have corrected, inaccurate OFAC information that defendant alone is attributing to them," said the complaint, which added the file did not disclose the actual OFAC alert used to determine potential or actual matches with the plaintiff.

In previous litigation, the U.S. Court of Appeals for the Third Circuit rejected Trans Union's argument that it did not need to reinvestigate or correct erroneous OFAC alerts that it placed on consumer reports because the alerts were not part of the consumer's file, the complaint said. It also indicated the defendant failed to maintain reasonable procedures to assure maximum possible accuracy of the OFAC alert information it sells.

The suit is seeking damages of $100 to $5,000 per class member per violation, punitive damages. injunctive relief and costs and attorney's fees.

Occupy anniversary Anti-bank sentiment still strong

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NEW YORK (9/19/12)--Monday's protests to mark the first anniversary of the Occupy Wall Street, a movement that attacked arrogant big banks' policies, fees and bailouts among other things, were a shadow of the events of a year ago. However, the estimated 1,000 people at the scattered protests indicate dissatisfaction with big banks still exists.

Credit unions likely will pay attention to anything sparked by the protests in case a good marketing opportunity develops, as it did last year when anti-bank sentiment and dissatisfaction with bank fees expressed on Facebook and other social media morphed into a nationwide Bank Transfer Day, a day set aside on Nov. 5 to switch accounts from big banks to credit unions and small local banks.

That resulted in something of a lovefest for credit unions, with unsolicited member testimonials and the media praising the benefits of credit unions.  The positive press resulted in heightened consumer awareness of credit unions, with a huge boost of membership and deposits for credit unions as consumers switched their accounts to credit unions.

American Banker Tuesday reported that the resurgence this week indicates many people "still hold strong negative feelings toward all things capitalist--especially banks."  However, The New York Times and ABC News (Sept. 17) noted the police presence was stronger and that 185 people were arrested as protesters tried to block access to the New York Stock Exchange. Some were also arrested at a Bank of America branch and at Goldman Sachs headquarters.

They also noted that the Occupiers seemed less focused, and crowds of protesters numbering in the hundreds caused little disruption on Wall Street as they marched and chanted, among other things, "We got sold out, banks got bailed out."

Credit unions continued to see growth sparked by last year's Bank Transfer Day publicity well into the first half of 2012, with 1.3 million new members added to credit unions, a sign that the Credit Union National Association said shows more and more consumers are eager to take advantage of the financial benefits they can realize at credit unions (News Now Aug. 31).

The National Credit Union Administration reported a membership increase of 643,322 during second quarter of 2012, with 93.1 million credit union members nationwide depositing an additional $2.7 billion in savings into their credit unions.

Green efforts take many forms at CUs

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MADISON, Wis. (9/19/12)--Credit unions' efforts to sustain the environment go beyond asking members to reduce paper and gasoline use by switching to online and mobile banking and e-statements. Across the country, credit unions are finding ways to help the environment, encourage members to do the same, and support their communities.

Here are few examples of credit unions' work with sustainable projects and how they reward their members for using green products and services.  Credit unions are:

Providing auto loans for hybrids and conversions to alternative sources of gas. In Oklahoma City, Okla. Communication FCU and Allegiance CU offer loans to help defray the cost of converting vehicles to run on compressed natural gas (CNG). They've teamed up with a CNG station to finance loans for buying new vehicles vehicle conversions or hybrids and will also finance converting a member's existing vehicle to CNG.

The $836 million asset Communication FCU will finance up to the manufacturer's suggested retail price plus the cost of the conversion, with some loans as low as 1.99%, the credit union told the Tulsa World (NewsOK.com Sept. 8). For pre-owned or member-owned existing vehicles, it will finance up to 115% of the National Automobile Dealers Association's retail value. For those who don't have sufficient equity in their vehicles to cover the CNG conversions, the credit union has a program that can finance the conversions at rates as low as 5.99% APR.

Allegiance CU, with $234 million in assets,, noted that CNG conversions offer drivers serious savings and Allegiance offers low-cost signature loans (Tulsa World).

Columbia CU, Vancouver, Wash., rewards members for driving "environmentally gentle" autos designated by the U.S. Environmental Protection Agency (EPA) as SmartWay and SmartWay Elite. The $865 million asset credit union reduces the auto loan rate by up to 0.50% APR, gives the loan recipients a 90-day break from payments, and requires them to opt for electronic statements to get the discount.

Offering loans to make the home more energy efficient. Summit CU, a $1.9 billion asset credit union in Madison, Wis., has partnered with Green Madison to provide residents a special loan for increasing the energy-efficiency of their home. To get the loan, the member must live in the city and have an owner-occupied or nonowner-occupied single-family home, duplex or condo of three units or less; prove the building is owned by an individual and not a trust, limited liability corporation or a business; and be up to date on property tax payments. Also, the potential energy savings must be 15% or more at the initial assessment, and the homeowner must agree to install a mix of recommended measures to achieve that percentage.  The range of loans can be $1,000 to $15,000, with low rates and flexible repayment terms, said Summit's website.

Changing workplace/staff behavior. Philadelphia-based American Heritage FCU has a dedicated "Green Team" of credit union employees and management that initiates green efforts such as providing bike racks for employees to reduce traffic pollution; offering a commuting subsidy to staff members and implementing a telecommuting program; and installing Geo-thermal heating and cooling in its new building projects (Life is a Highway Sept. 10), as well as participating in the Adopt-A-Highway Program and other recycling efforts.

Redwood CU, a $2 billion asset credit union in Santa Rosa, Calif., has earned a host of awards for its environmental efforts, including the Silver LEED Certification. It uses recycled paper products, including letterhead, envelopes, and restroom and kitchen supplies; prints marketing materials on econ-friendly soy-based inks and recycled paper; installs Energy Star appliances and copy/printing machines, including multi-function devices that increase scanning and double-sided printing capabilities; and uses electronic formats on many notices and correspondence.

Incorporating energy efficiency in new or remodeled credit union branches. When First Capital FCU opened a one-story, 4,160-square-foot building in South York, Pa., in August 2009, it incorporated sustainable strategies in its use of energy, lighting, water and materials. This year it became the first retail facility in York to achieve the Leadership in Energy and Environmental Design (LEED) GOLD certification, established by the U.S. Green Building Council and verified by the Green Building Certification Institute.

Columbia CU, an $865 million asset credit union in Vancouver, Wash., also received a LEED GOLD certification for its Grand Central and Washougal branch buildings, the first LEED GOLD for Washington State.  It purchases more than 50% of its electricity through a renewable energy program, uses compact fluorescent lighting in all its facilities, prints marketing materials on uncoated, recyclable paper with soy-based inks, and recycles at all locations, said its website.

Redwood CU's branches and facilities also use recycled business supplies and recycled or renewable construction, environmentally friendly paints and finishes, uses technology to enhance and maximize climate control and energy efficiency, uses natural light and senor-based office lighting to decrease energy use, and has water-efficient restroom facilities and landscaping practices.

 

Growing green as community service.
The $1.25 billion asset American Heritage FCU in Philadelphia established an Employee Gardens on its grounds. The vegetables grown by employees are sold back to employees in the credit union lunch rooms with all proceeds going to Philabundance and Aid for Friends, said the Pennsylvania Credit Union Association (Life is a Highway Sept. 12).

Columbia CU sponsors local tree plantings through Vancouver Urban Forestry. Many credit unions participate in landscaping and planting community service activities as well.

Investing in earth-friendly and socially responsible investments. Santa Fe, N.M.-based Permaculture CU, with assets of $5.4 million, shows that a credit union doesn't have to be huge to follow a sustainability philosophy. It pools its financial resources "in the ethics of permaculture--care of the earth, care of people and reinvestment of surplus for the betterment of both," says its website.  It offers earth friendly and socially responsible loans and investments, and provides educational opportunities to learn more about sustainable practices. It provides loans for home energy improvement, small business support and fuel-efficient vehicles and micro-loans to farmers through the Santa Fe Farmer's Market Institute and Permaculture Guild.

Educating members and the public about acting green. All the credit unions here engage in educating members and the community about going green. Many websites provided links to more information about acting environmentally, included articles in their newsletters and encouraged members to think green.

Redwood CU said on its website it is committed to the environment. "Simply put, we believe in 'doing the right thing,' so we practice and encourage green-friendly efforts that contribute to a healthy and sustainable environment for all."

"If everyone did one thing 'green,' it would make a huge impact," urged Columbia CU on its website.

IHuffPoI on election Break up big banks support CUs

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WASHINGTON (9/19/12)--Credit unions should be supported at the expense of big banks, a columnist in the Huffington Post said Monday.

"We need to break up big banks, which nearly brought down our economy, and instead support the local banks and credit unions that invest in the businesses and homes of our communities," wrote Sarah van Gelder, editor of Yes magazine, in the Post.

Van Gelder was writing about the five things on which this fall's presidential election should focus.

Her comments about credit unions were made under the No. 1 item: "Rebuild the economy, starting with the middle class and poor, not Wall Street and CEOs."

Placing more earning and spending power with the poor and middle class is a step needed to get the U.S economy up to speed, van Gelder wrote.

"We need small and medium-sized businesses that are rooted in their communities, not giant transnational corporations," she added. "Government should help veterans, recent graduates, and the unemployed to launch their own businesses and cooperatives, and back employees who take over companies that are threatening to close their doors."

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses, considered a staple in the economy. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

To read the column, use the link.

42 CU pros become CUDEs

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MADISON, Wis. (9/19/12)--The Credit Union Development Education (DE) Training program graduated 42 credit union professionals with the designation as Credit Union Development Educators (CUDEs) last week.

The training was held on the University of Wisconsin campus in Madison, Wis.

Graduates of the Fall 2012 Credit Union Development Educators Training stand outside of the World Credit Union Center Campus in Madison, Wis. (Photo provided by the National Credit Union Foundation)

Incorporating challenges that credit unions face today, DE Training provides lessons in cooperative principles and credit union philosophy. Participants in this month's week-long program were involved in group exercises, field trips, and discussions with speakers from throughout the credit union system. Participants are required to complete team projects proposing solutions for credit unions to help alleviate or eliminate challenging situations in any given area.

"During the entire DE training experience, we work to ensure applicability of the credit union philosophy and relevance to current events," said Lois Kitsch, DE mentor and national program director for the National Credit Union Foundation.

"For example, for the final case studies, participants worked through and presented solutions to critical issues that included social media and virtual banking, mergers and small credit unions, payday lending, small-credit union growth, National Credit Union Administration's low-income designation, and credit union development in Great Britain," she added.

"I entered DE Training as the frustrated CEO of a small credit union, unsure how much more energy we had to fight," said Chris Blough, president/CEO of Wayne County Community FCU in Smithville, Ohio. "I left DE recharged and refocused on my mission to not only empower my own small credit union, but to work to strengthen the credit union system nationwide." 

Eight program facilitator and mentors guided the Fall 2012 graduating class, which included credit union movement representatives from across the U.S., the Caribbean, Scotland, and South Africa. The South Africa representative participated through the African DE Scholars Program. To read a list of the graduates, use the link.

The next DE Training will be held at the Lowell Center in Madison, Wis., May 1-8. For more information, e-mail cude@ncuf.coop.

NWCUAs Hein visits Korean CU headquarters

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FEDERAL WAY, Wash. (9/19/12)--Dan Hein, vice president of administration and finance for the Northwest Credit Union Association (NWCUA), spent a day in August meeting with representatives of the National Credit Union Federation of Korea (NACUFOK), the hub of the Korean credit union system.

Tae-Jong Zhang (left), chairman and president of the National Credit Union Federation of Korea, visited with Dan Hein, vice president of administration and finance for the Northwest Credit Union Association, at Korean credit union headquarters in Daejeon, South Korea. (Photo provided by the Northwest Credit Union Association)
Hein's visit to South Korea was essentially a first step, an opportunity to develop a friendship between NACUFOK and the NWCUA and to share knowledge about each organization (Anthem Recap Sept. 13).

NACUFOK was established in 1964 and is the fifth-largest national credit union trade association or federation in the world, with roughly US$42.8 billion in assets, 5.86 million members, and 955 total credit unions as of 2011.

In many ways, the Korean credit union system resembles the U.S. credit union movement, with a mission founded on the same principles of cooperative finance that guide credit unions worldwide. Headquartered in the city of Daejeon in a skyscraper owned by the federation, NACUFOK is essentially Korea's equivalent of the U.S.'s Credit Union National Association (CUNA). However, instead of working with autonomous state and regional leagues and associations, NACUFOK has a number of regional branches serving credit unions on a more local level.

Hein met with NACUFOK Chairman and President Tae-jong Zhang to discuss the two countries' credit union systems and general financial industries.

Hein also talked to NACUFOK's information technology (IT) manager, who led him through the restricted-access server room. In the year 2000, NACUFOK developed and launched the Intra-Network system, which connected all of the country's credit unions onto one core system. By comparison, John Lass, senior vice president, strategy & business development at CUNA Mutual Group, recently estimated that 92 different core processors are used by credit unions in the U.S.

In 2008, NACUFOK also implemented a new IT financial system. Because of these efforts to unify the nation's credit union operations, the server room Hein toured houses all servers that process all Korean credit union transactions, online banking services, and other IT-related activities. Servers are grouped together based on their primary function.

Later in the afternoon, Hein met with NACUFOK's planning and coordination department staffers to discuss the U.S. credit union movement.

"They were very interested in the challenges that U.S. credit unions are facing and how they are working to best meet those challenges," Hein said. "They also asked about the NWCUA and our role with credit unions and how we are helping the industry."

The department also was interested in the U.S. credit union system structure, asking specifically about the credit union tax exemption. In Korea, credit unions are not taxed, and credit union members pay lower tax on interest income for certificates of deposit.

NACUFOK's nationwide marketing and public relations efforts is a unified approach that has helped create more credit union brand awareness for each credit union, Hein learned.

PCI Security Standards Council issues mobile guidance

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WAKEFIELD, Mass. (9/19/12)--As credit unions prepare for a predicted explosion in the mobile payments markets by developing their own mobile apps--amid member concerns about the security of mobile transactions--the PCI Security Standards Council (PCI SSC) last week released best practices for mobile payment acceptance security.

PCI SSC is the standards body that oversees the Payment Card Industry Data Security Standard (PCI DSS). PCI is the standard that the major credit card companies--Visa MasterCard, Discovery and American Express--use to make consumers' credit and debit card payments secure.

The PCI Mobile Payment Acceptance Security Guidelines offer software developers and mobile device manufacturers guidance on designing appropriate security controls so merchants can accept mobile payments securely, the organization explained.

At a presentation to the industry in Orlando, Fla., Nicholas J. Percoco, senior vice president, Trustwave SpiderLabs demonstrated some of the top attacks that threaten the security of payments over mobile acceptance devices.

The document released by PCI organizes the mobile payment-acceptance security guidance into two categories: best practices to secure the payment transaction itself, which addresses cardholder data as it is entered, stored and processed using mobile devices; and guidelines for securing the supporting environments, which addresses security measures essential to the integrity of the broader mobile application platform environment.

Among the recommendations:

  • Isolate sensitive functions and data in trusted environments;
  • Implement secure coding best practices;
  • Eliminate unnecessary third-party access and privilege escalation;
  • Create the ability to remotely disable payment applications; and
  • Create server-side controls and report unauthorized access.
"Applications are going to market so quickly--anyone can design their own app today that can be used to accept payments tomorrow," said PCI SSC Chief Technology Officer Troy Leach in his presentation to meeting attendees. "It's our hope that in educating this new group of developers, as well as device vendors on what they can do to build security into their design process, that we'll start to see the market drive more secure options for merchants to protect their customers' data."

The council plans to release further guidance in 2013 to help merchants leverage mobile payment acceptance securely, while continuing to collaborate with industry subject matter experts to explore how card data security can be addressed.

Ex-lawmaker charged with ID theft ploy defrauding CUs

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LOS ANGELES (9/19/12)--Federal Bureau of Investigation special agents Monday arrested former California state assemblyman Carl Washington, who allegedly stole thousands of dollars from credit unions and banks by pretending to be a victim of identity fraud.

Washington, who works for the Los Angeles County Probation Department, was charged with defrauding LA Financial FCU, First City CU, Los Angeles, and Farmers and Merchants Bank (LA Observed Sept. 18). The $360 million asset LA Financial FCU is based in Pasadena and has branches in Los Angeles. First City CU is a Los Angeles-based credit union with $492 million in assets.

He was charged with three counts of bank fraud and three counts of making a false statement to federally insured financial institutions.

Washington allegedly would use credit cards and loans from the credit unions and banks to purchase goods and services (Press-Telegram Sept. 18). According to the indictment, he would then allegedly file a police report with the Los Angeles Sheriff's Department, falsely claiming to be the victim of identity theft, and report that the credit cards and loans had been opened by someone else.

The suspect also allegedly provided a copy of the false police report to Experian, one of the three major credit reporting agencies, and request that the credit cards and loans be removed, although many of them had unpaid balances, according to the indictment. When Experian removed the items, Washington allegedly applied for new credit cards without disclosing the unpaid balances.

Washington did make several payments toward the credit cards before claiming they were the result of identity theft, according to the indictment.

CUANY Economic Forum adds speakers

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ALBANY, N.Y. (9/19/12)--The Credit Union Association of New York has announced the slate of speakers for its 2012 Economic Forum, Nov. 1-2 in Albany, N.Y.

John Lass, senior vice president of strategy and business development for CUNA Mutual Group, Madison, Wis., and Nick Perna, resident economist at Alloya Corporate FCU,  Albany, N.Y., and economics professor at Yale University, will discuss the most significant challenges and opportunities facing credit unions.

Perna specializes in economic analysis, forecasting and strategy. His Nov. 2 presentation, How Ben Bernanke Will Affect Your Credit Union During the Coming Year and Beyond, will explore the impact of Federal Reserve monetary policies on the day-to-day and longer-term running of credit unions.

Lass and Perna join keynote speaker Mark Sievewright of Fiserv, Brookfield, Wis.

Breakout speakers and topics include:

  • Tim Bruculere, Alloya Corporate FCU, Why Now is the Time to Be Thinking About Liquidity;
  • Andrew Kohl, Alloya Corporate FCU, 2013 U.S. Economic Outlook: Economic Growth & Interest Rates; and
  • Kristina Muller and Gregory Perry, Balance Sheet Solutions, Warrenville, Ill., Investing in an Uncertain World.
The 2012 Economic Forum is open to credit union leaders nationwide.

CU System briefs (09/18/2012)

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  • CONCORD, N.H. (9/19/12)--A Sanbornton, N.H., woman has been sentenced in federal court to three years in prison and three years' supervision after pleading guilty to aiding and abetting robberies at a jewelry store and at Manchester-based Northeast CU last year. Shyloe Piper Johnson allegedly admitted being the getaway car driver for a robbery of Kay Jewelers, Tilton, and providing surveillance and other assistance for the credit union robbery. The robberies occurred in November and December. Johnson's alleged boyfriend, Walter Williams of Compton, Calif., pleaded guilty to the robberies as well as to another jewelry store robbery in October. He is scheduled to be sentenced Nov. 26. A third person, Prince Sage, Brooklyn, N.Y., also pleaded guilty to the credit union robbery and will be sentenced Nov. 29. Other individuals have been arrested for the jewelry store robberies and for lesser offenses related to the heists, said a Department of Justice press release …
  • LEWISTON, Maine (9/19/12)--U.S. Rep. Michael Michaud (D-Maine) was guest of honor at a reception attended by nearly 30 credit unions and guests on Sept. 6. Fifteen credit unions were represented at the event hosted by the Maine Credit Union League (Weekly Update Sept. 14). "Congressman Michaud has stood with Maine's credit unions time and time again since he was first elected to Congress in 2002," said league President John Murphy, noting that Michaud "has been a true friend in his support of credit union issues in Congress." Michaud said, "My association with credit unions goes back to when I was a teenager, and I have always appreciated what credit unions have done for me and for all members. The support that the league and Maine's credit unions have provided me, first as a member of the Maine Legislature and, for the past 10 years as a member of Congress, has been tremendous." He noted that credit unions "played a big role" in his first congressional campaign and he thanked them for "what you have done for me, and for what you do for the people in the communities you serve." …
  • BOSTON (9/19/12)--Three Boston area credit union executives have been named 2012 Credit Union Heroes by Boston-based Banker & Tradesman, a publisher of banking and real-estate data (lowellsun.com Sept. 17). They are Steve Jones, vice president of community development at Jeanne D'Arc CU of Lowell; Nichole Curtin, assistant vice president and marketing and communications manager at Workers CU, Fitchburg; and Nancy Sequin, assistant vice president and human resources manager at Workers' CU.  The three were noted for their outstanding contributions to the industry and for their volunteerism, community service and charity …
  • FLINT Mich. (9/19/12)--The Flint, Mich., chapter of credit unions' second legislative breakfast of the year attracted 42 credit union professionals, four lawmakers and one legislative staff member, said the Michigan Credit Union League (Michigan Monitor Sept. 17). The breakfast was at the ELGA CU Administration Building in Burton. Lawmakers included Sen. John Gleason (D-Flushing), shown at left in the photo; and Reps. Kevin Daley (R-Lum); Jim Ananich (D-Flint), and Charles Smiley (D-Burton), who was accompanied by Legislative Aide Tim Sneller. The breakfast buffet was followed by discussion of a number of state and financial issues. According to the league, legislative breakfasts are a great way to build relationships with lawmakers and educate them about credit union issues. (Photo provided by the Michigan Credit Union League) …

Corporate America LaCorp withdraw merger plans

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IRONDALE, Ala., and METAIRIE, La. (9/18/12)--Corporate America CU and Louisiana Corporate CU announced today they no longer will pursue a merger. However, the two corporates will continue to collaborate on several projects.

Corporate America CU, based in Irondale, Ala., serves more than 500 member credit unions.  Louisiana Corporate CU, located in Metairie, La., serves more than 100 credit unions. In January of 2011, they had announced their intent to pursue a merger, which would have created a $3.9 billion asset Corporate America CU, with headquarters in Irondale, serving 514 member credit unions in 26 states.

"We began the merger process more than a year ago, and while it was approved by both boards of directors and state regulators, it has remained pending at [the National Credit Union Administration]," said David Savoie, president/CEO of LaCorp, in a joint press release.

"We feel it's time to move on with key initiatives at each of our organizations. For example, LaCorp independently has raised capital and eliminated all U.S. Central dependencies, while also making sure we continue to do a good job of serving our members," Savoie added.

Corporate America Interim President/CEO Dan Buckley noted that the shifts in the corporate landscape over the past year, including the impending closure of U.S. Central FCU, make it important to go forward with independent plans rather than continuing to be in "merger limbo."

"We're focused on addressing the issues facing all corporates, such as full compliance with the revised corporate rules," Buckley said. "Paramount for Corporate America is to ensure the strength, capabilities and staff skill sets needed to serve credit unions in a new regulatory area."

Even without the merger, Buckley and Savoie said, the two corporates will continue to collaborate on various projects, as they have for many years.

One project progressing will be the enactment of an agreement for LaCorp to partner with Corporate America for disaster recovery services. "It makes sense to work with Corporate America for business recovery and continuity services," said Savoie. "Our corporates have good proximity but are far enough away from each other to make it practical as a backup site."

Buckley noted that LaCorp's member credit unions "understand the value their corporate adds to their business. At Corporate America, we also recognize the value of partnering with LaCorp by leveraging our collective strengths in the delivery of products and services to our member owners," he said.

CU System briefs (09/17/2012)

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  • MUNCIE, Ind. (9/18/12)--A man has been sentenced to 20 years in prison for his role in a May 2011 robbery of Industria Centre FCU, Muncie, Ind. John D. Repass, 37, had pleaded guilty to armed robbery, a Class B felony that carried a standard 10-year sentence in a deal calling for him to testify against co-defendant Stanley DeWayne Wills, 33, of Muncie. The two are charged with being the masked men who held employees of the credit union at gunpoint and escaped with $250,000 (Muncie Star Press Sept. 15).  Wills was convicted in July of four charges in the robbery. Wills also was found guilty of being a habitual offender, which could add up to 12 years to his sentence. He is to be sentenced today.  The woman accused of being the driver of the getaway car, Maranda Zoe Conley, 31, is scheduled to enter a guilty plea to an unspecified charge on Oct. 22 …
  • WHEATON, Ill.  (9/18/12)--Hermila Garcia, 33, of Elgin, Ill., a former teller of Wheaton, Ill.-based DuPage County Employees CU has been charged with stealing $3,000 from the credit union. Garcia had been a teller for about seven years there. She is charged with two counts of theft over $500, two counts of financial institution fraud and two counts of misappropriation of financial institution property, said the DuPage County State's Attorney. The credit union discovered the theft during an audit of the vault. Garcia allegedly completed paperwork indicating she deposited money from her drawer to the vault but allegedly kept it for herself on at least two occasions, said the state attorney's office. (downersgrove.patch.com Sept. 14) …
  • MEDFORD, Ore. (9/18/12)--Rogue FCU, a $557 million asset credit union based in Medford, Ore., has made a positive impact on the campus of Southern Oregon University (SOU).  The university kicked off its 2012-2013 season last week with a new hardwood floor in the McNeal Pavilion, an arena used by the SOU Raiders for men's and women's basketball, women's volleyball, wrestling and other community events, thanks to the credit union. Rogue President/CEO is an alumnus of SOU. At the opening game against Oregon Tech, Rogue board chairman spoke on behalf of the credit unions' 54,000 members, noting that Rogue FCU started out as a teacher's credit union in 1956 and continues to support education in Southern Oregon. Through an agreement with the SOU Athletic Department, Rogue members will receive a $1 discount on all SOU sporting events through 2017 …

Inspire CU start-up merges into larger CU

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BATTLE CREEK and PARCHMENT, Mich. (9/18/12)--Inspire Community Development FCU in Battle Creek, Mich., a small start-up community development credit union (CDCU), merged into the larger First Community FCU in Parchment, Mich., on Aug. 31.

The $400,000 asset Inspire, which opened in 2010, was afflicted by start-up delays, eroding funds and understaffing. Those factors, along with a desire to expand its services, led to Inspire's decision to merge with a larger credit union (BattleCreekEnquirer.com Sept. 14).

First Community's commitment to serve low-income members made the $700 million asset credit union appealing to Inspire's board, when it was looking for a merger partner, Nancy Macfarlane, president of Inspire's board, told the newspaper.

Inspire offered several services geared to low-income consumers such as low-interest micro loans, automatic deposits and savings accounts. Those programs made Inspire eligible for federal funds to run under its CDCU designation, the paper said.

Because of understaffing, Inspire was only open three days a week, with limited hours, Macfarlane said.

Significant losses on the credit union's loans led the National Credit Union Administration (NCUA) to examine Inspire's books. Together, the credit union and NCUA decided a merger was the best path to take, Macfarlane told the paper.

IWall St. JournalI op-ed CUs need relief too

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NEW YORK (9/18/12)--Credit unions also need relief from government regulation, a St. Louis credit union executive wrote in a Monday op-ed in The Wall Street Journal, commenting on a Sept. 6 Journal op-ed by U.S former Secretaries of State George Schultz and Madeline Albright. That op-ed expressed concern about the Bangladesh government's intervention into the country's Grameen Bank and its organizational structure.

"But the virtues aren't exclusive to Grameen Bank," wrote Patrick K. Adams, president/CEO of St. Louis Community CU. "There is an entire not-for-profit, member-owned credit-union industry doing the same thing in the U.S. every day and we, too, are overrun with government regulation.

"Thanks to [the] Dodd-Frank [Act], regulation and compliance within the U.S. banking industry is much more onerous than what Bangladesh is proposing for Grameen," he added. "Unfortunately, regulation is eroding our impact in the middle- and lower-income communities we work so hard to help.

"Piling more regulation onto smaller institutions will ultimately manifest itself in the increased likelihood that people will have fewer choices in financial services. Such an occurrence ultimately serves to hurt the consumer," Adams wrote.

To read the whole op-ed, use the link.

Vermont CUs growth includes MBLs

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MONTPELIER, Vt. (9/18/12)--Vermont credit unions are growing and are highly ranked in six of eight key financial metrics, as well as seeing growth in member business lending (MBL).

Vermont's federally and state-chartered credit unions ranked in the top 10 in the categories of:
  • Asset growth;
  • Return on average assets;
  • Deposit growth;
  • Loan growth; and
  • Net charge-offs (delinquent loans) as a share of total loans (Times Argus Sept. 17).
Also, with banks--in particular large regional banks--implementing more stringent lending standards, credit unions have seen expansion in MBLs, Joe Bergeron, president of the Association of Vermont Credit Unions, told the newspaper.

Credit unions in the state have remained solid, partly because Vermont was able to avoid "the extremes of the economy" such as larges layoffs and plunging home values that hit other parts of the nation after the financial crisis of 2008, Bergeron told the paper. 

Although many Vermont credit unions rapidly are approaching the federal MBL cap of 12.25% of total assets, they are getting more requests for MBLs, Bergeron added.

Ten of the 26 credit unions in the state make MBL loans, with an average loan amount of $156,402, the paper said.

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% so that more loans could be made to small businesses, considered a staple in the economy. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

WOCCU makes recommendations on FATF AML standards

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MADRID  (9/18/12)--The World Council of Credit Unions (WOCCU) last week made recommendations to the Financial Action Task Force (FATF) regarding how to limit regulatory burdens on credit unions in the FATF's forthcoming guidance papers about anti-money laundering (AML) standards.

Click to view larger image The Banco de Espana in Madrid, Spain, hosted a Financial Action Task Force conference on new anti-money laundering standards last week. The World Council of Credit Union presented on behalf of the international credit union movement.
The new standards will expand the international AML definition of politically exposed persons (PEPs) to include domestic and international organization PEPs, said WOCCU. They also will update existing FATF guidance on new payment methods (NPMs).

National AML authorities are expected to issue regulations to implement the new guidance next year. At that time, credit unions will be required to assess whether new and existing credit union members include high-ranking national, provincial or local politicians and civil servants, or high-ranking officials at international organizations such as the United Nations, World Bank and International Monetary Fund.

Credit union AML compliance procedures regarding NPMs, such as prepaid debit cards, mobile payments and remittances will also need to adjust to the new standards.

In February, FATF issued a revised set of its International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation, better known as the "40 Recommendations," which expanded the definition of PEPs to include domestic and international organizations.

Before the update, the definition had applied only to foreign PEPs--high-ranking officials in foreign governments--and credit union common bond requirements generally limited credit unions' PEP-related compliance burdens.

World Council of Credit Unions' Michael Edwards made recommendations on how the new anti-money laundering guidance could ease regulatory burdens on credit unions. (Photos provided by the World Council of Credit Unions)
Under the new standards, even high-ranking local government officials such as mayors or members of local government councils are likely to be considered PEPs. The anticipated FATF guidance papers will clarify in detail the high-level principles on PEPs and NPMs.

Although many larger banks and credit unions currently use expensive software and vendor lists to determine who is a PEP, we related to FATF that many credit unions would be well aware of the high-ranking political officials in their local communities without needing to invest in possibly unaffordable vendor products," said Michael Edwards, WOCCU chief counsel and vice president for advocacy and government affairs.

Edwards  represented credit unions at the FATF conference on the new AML standards  Sept. 13-14 at the Baco de Espana in Madrid, Spain.

While at the conference, he shared the credit union perspective on using new payment methods to promote financial inclusion as part of an effective risk-based approach to AML compliance, which focuses on payments with the highest risk of being related to criminal activity, terrorism or nuclear proliferation.

"World Council participates in forums such as these to advocate for streamlined anti-money laundering procedures for credit unions," said Brian Branch, World Council president/CEO. "Our goal is to help credit unions provide wider access to financial services and to reduce their regulatory burden for serving the underserved."

FATF is the international standard-setting body for rules to combat money laundering and the financing of terrorism and nuclear proliferation.

WOCCU contributed its remarks during a FATF conference, which was part of FATF's private sector outreach in preparation for issuing new guidance on PEPs and NPMs in early 2013.

First student-run CU in NE Ohio to be launched

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MENTOR, Ohio (9/18/12)--Cardinal Community CU, Newark, Ohio, will launch the first student-run credit union in Northeast Ohio at Lake Catholic High School in Mentor.

The branch will serve as the centerpiece of a financial literacy education program that promotes positive money management skills such as thrift, smart spending, informed use of credit, and the benefits of regular saving and investing, said the credit union.

Officially co-branded as the SmartStart Cougar Branch, the operation will be staffed by Lake Catholic student volunteers under the supervision of $25 million asset Cardinal Community CU.

Cardinal Community CEO Christine Blake is a Lake Catholic alumnus. "The student branch program is a boon to all involved," Blake said. "The students learn real-world skills in a positive, safe environment.

In concert with the branch initiative, the credit union will provide resources and work with the school to develop financial education programs and presentations in keeping with the Ohio Grade Level Content Standards and Lake Catholic High School's goals and objectives.

Programs will be designed to introduce relevant, hands-on financial literacy concepts to students. The curriculum may comprise classroom teaching, facilitated workshop content, financial literacy roundtables, Web-based interactive coursework, and an on-site simulation of real-world personal finance challenges.

Business lending up 11 in Northwest CUs

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BEAVERTON, Ore. and FEDERAL WAY, Wash. (9/18/12)--During the past 12 months, Oregon and Washington's credit unions have increased member business lending by 11%, infusing $235 million into the region's economy, according to the Northwest Credit Union Association (NWCUA).

MBL totals have increased 7.96% in Oregon and 13.1% in Washington.

The Northwest's financial cooperatives have more than $2.3 billion--$810 million in Oregon, $1.5 billion in Washington--in outstanding MBLs as of June 31 (Anthem Recap Sept. 17)

For quarter-over-quarter, MBLs rose 2% in Oregon and 2.8% in Washington. Credit unions nationwide experienced a 1.2% increase during 2012's second quarter, according to the NCUA.

"Credit unions in the Northwest and nationwide are filling an important societal need left when banks began exiting the business lending market after 2008, when business lending at banks reached a peak," said NWCUA CEO John Annaloro. "The divergent tracks of the for-profit versus not-for-profit banking sectors in this market in some ways have become less of a balance sheet issue and more of a patriotism issue."

Despite the need for more business lending, banks instead are buying U.S. Treasuries and have increased their holding to an all-time high of $1.84 trillion, according to a report by the Small Business Administration entitled "The Increasing Importance of Credit Unions in Small Business Lending." Banks have purchased $136.4 billion in T-Bills and government debt so far in 2012--more than double the $62.6 billion purchased in all of 2011, said the report cited by the NWCUA.

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 to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

NWCUA elects foundation board

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BEAVERTON, Ore. and FEDERAL WAY, Wash. (9/18/12)--The Northwest Credit Union Foundation (NWCUF) announced the result of its board of trustees elections.

Nine Foundation trustees are in place, with Northwest Credit Union Association (NWCUA) President Troy Stang joining eight credit union professionals who each represent one of the NWCUA's geographic districts. Five of the eight incoming trustees were unopposed.

In addition to the Stang, the board of trustees includes:

  • Helen Funk, Rogue FCU, Medford, Ore.;
  • Steve Wilder, Horizon CU, Spokane Valley, Wash.;
  • Kyle Frick, Mid Oregon CU, Bend, Ore.;
  • Jill Nowacki, MAPs CU, Salem, Ore.;
  • Barbara Mathey, IBEW & United Workers FCU, Portland, Ore.;
  • Lesley Carrell, Fibre FCU, Longview, Wash.;
  • Jane Parker, Woodstone CU, Federal Way, Wash.; and
  • Gayle Yost, Community Healthcare FCU, Everett, Wash.
The foundation is working with Weber Marketing to develop new branding and imaging. The organization will showcase its work with Web marketing at the 2012 NWCUA Convention and Annual Business Meeting in Oct. 2.

The foundation said it will expand the board to 17 members, adding three trustees representing credit unions by asset size, and five additional at-large trustees through a formal nomination and appointment process. A transitional executive committee also will be seated at the Oct. 2 meeting to serve through Dec. 31.

Pa. House candidate a former CU employee

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HARRISBURG, Pa. (9/18/12)--
Pennsylvania Credit Union Association Director Cookie Yoder, left, meets Erin Molchany, candidate for the 22nd District State House Seat. (Photo provided by the Pennsylvania Credit Union Association.)
A candidate running for the 22nd State House District in Pennsylvania is a former credit union employee and has strong ties to credit unions, according to the Pennsylvania Credit Union Association (PCUA).

If elected, Erin Molchany would represent portions of Allegheny County, said PCUA (Life is a Highway Sept. 17). 

Molchany worked in a credit union and is the daughter of Fred Molchany, a board director of People First FCU, Allentown. PCUA Director Cookie Yoder, CEO of City Co FCU, Pittsburgh, attended an event last week for Molchany.

PCUA said Molchany  is devoted to making her region a better place for entrepreneurs to invest their time, energy and passion, and believes that credit unions can play a part in the process.

On a federal level, credit unions are urging Congress to pass legislation that would raise their member business lending (MBL) cap to 27.5% of assets from 12.25% so credit unions can play a larger role in the economic recovery. The Credit Union National Association (CUNA) estimates that raising the cap would allow credit unions to inject $13 billion in new small-business loans into the economy and would create140,000 new jobs the first year, without cost to taxpayers.

Chartway celebrity gala golf net 750K for charity

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VIRGINIA BEACH, Va. (9/18/12)--
Actress Marisa Ramirez, left, and LPGA Player Anna Rawson, right, are shown with We Promise children Aishah, Nasia, Mackenzie and Kennedy. They helped Chartway FCU's We Promise Foundation raise more than $750,000 to make a wish come true for children with life-threatening illnesses.
Hollywood, rock and golf stars were among the celebrities who contributed to the success of Chartway FCU's We Promise Foundation 7th Annual Diamonds in the Sky Gala and 14th Annual Charity Golf Classic, which raised $750,000 to bring smiles to children with life-threatening illnesses.

The celebrities rocked out and teed off to make dreams come true for the children. Joining the Virginia Beach, Va.-based credit union's We Promise Foundation were:

  • Actress Marisa Ramirez, known for starring roles in "Spartacus," "Bones," "The Young and the Restless," "General Hospital," and "Against the Wall";
  • Three Dog Night, the legendary classic rock and roll band;
  • LPGA player and model Anna Rawson;
  • PGA player Marc Leishman, winner of the most recent Travelers Championship;
  • Washington Redskins alumni; and
  • More than a dozen We Promise children.
Gala volunteers welcome the We Promise Children to the Diamonds in the Sky Gala on a red carpet, and help the We Promise children celebrate a big day absent glaring hospital lights and needle pricks. Here, three-year-old Zoe gives high fives to volunteers.(Photos provided by Chartway FCU)
Ramirez served as Mistress of Ceremonies for the foundation's gala, in which 16 children donned tiaras and bow ties for the event.

The black tie event featured silent and live auctions, a gourmet dinner and a live musical performance by Three Dog Night, who performed for 90 minutes before mingling with the guests.

Rawson joined the Charity Golf Classic to help the foundation raise the most funds in its history and teed off with each group on Hole No. 5.

Other celebrities who donated items and memorabilia from their personal collections included NFL players Tom Brady, Brett Favre, Chris Cooley and Shawne Merriman; the Zac Brown Band, country singers Kellie Pickler, Sara Evans, Jake Owen, Chris Young and Josh Thompson; author Jodi Picoult; astronaut Buzz Aldrin; and Olympic gold medalist Bode Miller, among others.

"We are indescribably grateful for the support of these celebrities and sponsors such as FIS, MassMutual, GTI Systems Inc., Jack Henry & Associates, Sinclair Communications, Colliers and many others," said John Blum, chairman of Chartway's We Promise Foundation.

Since Chartway began raising money to provide moments of magic to the children, it has raised more than $4.5 million.

CUs face tougher auto market competition

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MADISON, Wis. (9/17/12)--The auto lending market is experiencing three changes that can translate to more competition--and opportunity--for credit unions in what has long been their bread-and-butter loan portfolio.

The changes:

  • A pent-up demand from consumers who held onto their vehicles throughout the Great Recession and are now beginning to buy again;
  • A change in auto-buying behavior as consumers keep their vehicles longer; and
  • A recent loosening of credit as investors make more funds available to lend as a result of a drop in auto delinquencies.
AnAutoMD.com survey of nearly 4,000 automobile owners, indicates that three out of four  agree that buying a vehicle every two to three years is a thing of the past (LoneStar Leaguer

Aug. 27). The appropriate lifespan for hanging onto their vehicle is, according to 78% of those surveyed, now 10 or more years (or until the vehicle dies).  More than half of them said a better economy would not change their habit of holding onto their vehicle longer.

Sixty percent say their primary vehicle has more than 100,000 miles, and 66% believe they can get as much as 160,000 miles before they trade it in. That averages to 75,000 more miles on the car than on their previous car when they traded it in.

The trend toward holding on to vehicles longer means that:

  • Credit unions won't be making or refinancing as many car loans to the same member.  If a member keeps the car for 10 years, instead of trading in every two to three years, that is two fewer car loans to that individual during that period.
  • Trade-in value for an older car will complicate the loan procedure. "Without question, the market has become increasingly more complex as people do not have trade-able equity in their vehicles," Dale Hansard, president/CEO of Caprock FCU, Lamesa, Texas, told the Texas Credit Union League in the LoneStar Leaguer.  He indicated auto dealers are offering "soft dollar" rebates as incentives to trade, but "the simple fact is that the members do not have the income flexibility to handle an increased payment."
Auto loans are increasing for credit unions. New- and used-auto loans rose by 2.8%, according to second-quarter call report date from the National Credit Union Administration (Las Vegas Business journal Sept. 14).  

Credit unions' used-car lending in June outpaced new-car lending; used-car loans were up 4.3% over June 2011, according to Credit Union National Association statistics. However, these may not be for late model used-cars because prices of late-model used cars are approaching those of new cars, according to Kelley Blue Book.  With the average age of vehicles on the road at 10.8 years, fewer used models are up for grabs and this has had an inverse effect on residual value (Reynolds Center businessjournalism.org Aug. 31).

Low auto delinquencies also are impacting the market. During first quarter of 2012, auto loan delinquencies were below the year-ago level for 10 consecutive quarters.. Now investors are investing in the types of bundled securities pools that make more funds available for auto lenders (cnbc.com Sept. 13 and LoneStar Leaguer  Sept. 6).  That will translate to more loans available to meet the pent-up demand, both among prime borrowers and subprime borrowers. Credit unions, which continued to make loans through the recession, will now see more competitors getting back into the auto lending market.

What are credit unions doing to keep their place in the market?  Caprock FCU's Hansard noted that its overall loan growth is roughly 7.5%. It recently began offering incentives for refinances to maintain its growth. Members are opting more for extended warranties because they are keeping their vehicles longer.

Credit unions are sweetening the deal with low auto rates.  Gobankingrates.com recently reported  several credit unions announcing low annual percentage rates (APR) on auto loans. They included Chicago (Ill.)  Area Office FCU and Van Cortlandt Cooperative FCU, Bronx, N.Y., each offering 3.99% APR, and Mosaic FCU in Harrisonburg, Va., which offered 3.95%.

They also are getting more creative in their efforts to attract loans. For example, AEA FCU, Yuma, Ariz., gives back 1% of its auto loan balances to charity.  Its Go Direct Initiative commits a $10,000 donation to a community service organization when it reaches the $200,000 milestone, according to the $238 million asset credit union's website.

U.S. car sales recorded their best August in five years, at an annualized 14.5 million, which exceeded the 14.4 million forecast by Edmunds.com. Edmunds noted that interest rates are pretty high, the risk is fairly low, and the market is a good deal for investors (cnbc.com).

Massachusetts CUs 2Q assets deposits loans up

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BOSTON (9/17/12)--Massachusetts credit unions were in the top 20 states in two out of eight categories of statistics in the second quarter state-by-state performance review released recently by the National Credit Union Administration.

The review shows the percentage growth for the credit unions of each state year over year as of the end of second quarter, said the Massachusetts Credit Union League (E-Weekly Sept. 10).

The two categories were percentage improvement in charge-offs and in loan growth. Massachusetts credit unions' chargeoffs improved to 0.47%, the 17th lowest number nationally. Their loan growth increased 4.7%, which means Massachusetts ranks 19th among the states. The national average loan growth was 3.2%.

Total assets in Massachusetts credit unions rose 5.3% over June 30, 2011, compared with a national increase of 6.9%. Deposits in the state's credit unions grew 4.9%, compared with the national average of 6.90%.

Three Central Ohio CUs complete unique merger

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COLUMBUS, Ohio (9/17/12)--Three credit unions in the Columbus, Ohio, area have completed their strategic merger and formed Pathways Financial CU, effective Aug. 1.

Members First CU with $53.3 million assets and 7,063 members; Powerco CU, with more than $65.4 million assets and 8,202 members; and Western CU, with $68.7 million in assets and 10,281 members, received approval from the Ohio Division of Financial Institutions and the National Credit Union Administration to finalize the merger.

Pathways Financial CU has $187 million in assets and serves 25,500 members through six Central Ohio branches. Its field of membership includes employers such as American Electric Power and Motorists Insurance, as well as residents of Franklin, Delaware, Madison and Union counties.

Its branches are located in Delaware, Grandview Heights, Plain City, the Gahanna/New Albany area, West Columbus and in the American Electric Power building in downtown Columbus.

The credit union said the merger is unique because it involves three healthy, well-capitalized credit unions that decided to become partners to better serve their members and communities. Also, each branch location is co-branded with the new name of the credit union and the name of the partner credit union that operated there. The strategy helps Pathways leverage and build upon the brand equity each partner had cultivated among its members and communities.

"We collectively decided to pursue this strategy with the intention of developing a credit union business model with long-term sustainability that allows us to provide the convenience and the competitively priced financial services that our members expect and deserve," said Greg Kidwell, president of Pathways Financial CU.

The business model was structured to be an attractive merger alternative for other credit unions. "We believe that this model will appeal to other healthy mid-sized credit unions that are concerned about the prolonged downturn in the economy along with the increased competition within our industry," said Mike Shafer, Pathways Financial CEO.

Board Chairman Bill Knoles noted that the merger is the result of three years of planning by the boards and executive management of the three partner credit unions.

CU Staff Salary Report provides details on 100 jobs

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MADISON, Wis. (9/17/12)--The Credit Union National Association (CUNA) has released its 2012-2013 Complete Credit Union Staff Salary Survey Report. Based on research conducted by CUNA, the report features an analysis of salary information for the credit union industry.

The survey measures compensation data for 90 full-time and 10 part-time positions at credit unions with $1 million or more in assets. Data include base salaries, incentives, bonuses, total cash compensation and salary ranges.

"The lack of qualified job candidates in certain positions means that competitors may attempt to lure away your employees with highly sought-after skills," said Beth Soltis, CUNA senior research analyst. "Credit unions that analyze the competitiveness of their compensation plans are the most likely to both attract and retain top talent."

Based on growing interest in comprehensive planning tools, CUNA offers a package of salary planning resources, in print or PDF format, to help credit unions gain an understanding of compensation trends in their geographic and peer group.

The Complete Credit Union Staff Salary Survey Package includes:

  • 2012-2013 Complete Credit Union Staff Salary Survey Report;
  • 2012-2013 CU Staff Salary Metric/Calculation Worksheets (new);
  • 2012-2013 Geographic Customized Salary Survey;
  • 2012-2013 Complete Guide to Setting Salaries;
  • E-Scan Research & Advice Portal (basic access); and
  • E-Scan Newsletter (one-year subscription).
An electronic version of the survey's data tables is also available, allowing users to apply formulas and insert data directly into their credit union's spreadsheets.

Many elements of the package are customizable, allowing users to create personalized peer groups with various criteria for the most accurate comparisons possible. Credit unions may search by 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.

For more information about the full suite of CUNA Staff Salary Survey resources, use the link or call 800-356-8010 and press 3.

In the media Fees rates breaking up with banks

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MADISON, Wis. (9/17/12)--Credit unions have been widely mentioned in national media this month in regard to consumers breaking up with banks and switching to credit unions, interest rates and fees.

Last year, when U.S. banks started charging fees for services that were previously free, the banks assumed consumers would not notice fees, or if they did, that they would accept them quietly, according to the Saturday Evening Post (Sept. 1).

However, they were wrong, and six million consumers moved their money to credit unions from banks in the 90 days following Nov. 5--Bank Transfer Day--a national grass-roots movement, because credit unions have lower fees or no fees for many of the same services, the Post said.

Consumers will pay about one-third fewer fees at credit unions or small regional banks than at huge banks, Michael Moebs, CEO of Moebs Services Inc., told the Post

Mentions in other national media include:

  • Two Chicago-area credit unions are among the U.S. financial institutions offering the highest rates on certain interest-bearing checking accounts and one-year certificates of deposit, according to a new survey by data tracker SNL Financial (Chicagotribune.com Sept. 7). Alliant CU, based in Chicago with $8.3 billion assets, offers a 0.75% rate for $5,000 checking accounts, and the $28 million asset, Kankakee, Ill.-based Riverside Community CU offers a 0.5% average interest rate.
  • Consumers can join a company credit union to part ways with their bank, according to a Sept. 10 article in Bankrate.com titled "Six offbeat ways to break up with your old bank." A benefit of membership is that a credit union can help members repay loans from their company paycheck or to save more efficiently, Pat Keefe, vice president of communications and media for the Credit Union National Association, told Bankrate. The article also mentions that some credit unions have community charters so any one who lives, works or worships in the community can join. It cited Alliance CU in San Jose, Calif., with $353 million in assets, as an example.
  • SwitchAgent, a free service offered by credit unions and banks, helps consumers with switching all their recurring transactions such as automated account transfers, direct deposit and online bill payments, according to mybanktracker.com (Sept. 14). The service was created by Deluxe Corp. One in five consumers said they considered switching to another financial institution, according to a recent study by Consumers Union. Of those who decided not to switch, 63% were worried about the trouble of transferring their automatic payments and deposits, while 37% said the process would take too much effort and time.

Federally insured CUs offered Ohio biz credit program

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COLUMBUS, Ohio (9/17/12)--Federally insured credit unions in Ohio now are eligible to participate in the State Small Business Credit Initiative's (SSBCI) $35 million Collateral Enhancement Program.

The program is expected to generate more than $285 million in private lending and give credit unions a guarantee of up to 30% to 50% of the loan as a collateral shortfall, said the Ohio Credit Union League (eLumination Newsletter Sept. 5).

The Ohio Department of Development's (DOD) Natalie Burley, manager of business assistance, presented a program overview during a meeting last week at the league. Nearly 20 credit union officials from across the state, a representative of the U.S. Department of the Treasury, and league staff attended.

Although Ohio credit unions are not eligible to accept public funds, they are permitted to participate in the program because of modifications made by the state DOD.

The league is working with DOD to conduct additional training sessions statewide about the Collateral Enhancement Program.

PaCUSC shared branching volume surges

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HARRISBURG, Pa. (9/17/12)--Growth in deposit transactions and loan payments spurred an increase in transaction volume for 53 Pennsylvania credit unions offering shared branching, Pennsylvania Credit Union Service Centers Inc. (PaCUSC) reported.

Total transactions increased by 20,313 transactions in July, representing a 22.1% increase from January, according to the Pennsylvania Credit Union Association (Life is a Highway Sept. 14).

The most popular type of transactions were deposits, representing 48% of all transactions, PaCUSC reported. PaCUSC credit unions averaged 24,428 in monthly deposit transactions, with average monthly dollar volume of $23.3 million.

Loan payments accounted for 6% of transactions. Consumers made an average of 3,183 monthly loan payment transactions, with an average monthly dollar volume of $1.3 million.

With 152 shared branching facilities in Pennsylvania, PaCUSC also reported that transactions from those offices increased by 1,576 during the first seven months of the year.

TCUL launches IYC video contest

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FARMERS BRANCH, Texas (9/17/12)--Credit unions looking for a way to celebrate the 2012 International Year of Cooperatives (IYC) might consider commemorating the role credit unions play in the cooperative industry. 

For example, the Texas Credit Union League's (TCUL) International Year of Cooperatives campaign offers credit unions an opportunity to describe how credit unions make a difference in the lives of consumers.

2012 was designated by the United Nations to be the IYC, with the theme "Cooperatives build a better world."

TCUL is asking state credit unions and staff to submit short video clips that describe why cooperatives and credit unions are important for consumers. 

Applicants can download their submissions to YouTube and e-mail the link to lwebb-manon@tcul.coop. The deadline is 10 a.m. Oct. 18--International Credit Union Day.

Videos will be judged by TCUL staff. The winner will receive an iPad.

"Cooperative Enterprises Build a Better World" is the theme for the United Nations-designated IYC. "Members Matter Most" is the theme for this year's International Credit Union Day, which is traditionally celebrated the third Thursday of October each year.

CU System briefs (09/14/2012)

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  • HANSCOM AFB, Mass. (9/17/12)--Hanscom FCU, based in Hanscom AFB, Mass.,  has been named 2011 Air Force Credit Union of the Year. The honor is given annually to the Air Force credit union offering the highest quality of financial products and services, as well as membership growth and support. The award was presented at the Defense Credit Union Council's recent annual meeting in Denver. Hanscom FCU, which has $985 million in assets and serves 47,555 members across the country and overseas, provides comprehensive online services to its members, who can apply for membership, take out a loan and access account information using Web-based tools. Pictured are, from left, William Rone, director of financial management and comptroller, Headquarters Air Force Special Operations Command, who presented the award to Hanscom FCU President/CEO David Sprague.  (Photo provided by the Defense Credit Union Council) …
  • BOSTON, Mass. (9/17/12)--Credit unions from all over Massachusetts will gather Tuesday in Dorchester, Mass., for a dinner honoring U.S. Rep. Barney Frank (D-Mass.). The Metro-Boston chapter will host the event, according to the Massachusetts Credit Union League  (E-Weekly Sept. 14). Frank will retire from the U.S. House of Representatives when his term expires, after 32 years of service. Frank helped credit unions achieve passage of the landmark HR 1151, the Credit Union Membership Access Act. He also played a vital role in making certain that credit unions were not harmed by bills aimed at credit unions by banking trade groups or by overly broad laws that could inadvertently affect credit unions. After the financial crisis, said the league, Frank was known to have said, "If credit unions made all of the mortgage loans, then there would have been no subprime crisis, and therefore no economic crisis." …
  • ANCHORAGE, Alaska (9/17/12)--A real estate developer in Anchorage, Alaska, has pleaded guilty to lying about the progress made on an apartment complex he was building with a $9.4 million loan from a credit union in 2005.  Lee E. Baker Jr., 57, owner and president of Discovery Construction Inc., pleaded guilty to 12 counts of making false statements to Denali Alaska FCU. Baker was required by the terms of the loan to make certified reports on specific work being done before he could withdraw any funds from the account.  He allegedly received about $4.3 million before defaulting on the loan. The apartments were never completed (Anchorage Daily News Sept. 12) …
  • HARRISBURG, Pa. (9/17/12)--The Pennsylvania Credit Union Association (PCUA) raised nearly $43,000 for the Pennsylvania Credit Union Foundation during the fifth annual Viva Las Vegas event held during the PCUA's Fall Leadership Conference.  Foundation board members donated 15 baskets and three prints that were raffled off at the fundraiser (Life is a Highway Sept. 13). Also, prizes were awarded participants, based on the amount of their "winnings" …
  • FARMERS BRANCH, Texas (9/17/12)--Caprock FCU, Lamesa, Texas, has been designated a Juntos Avanzamos--Together We Advance--credit union by the Texas Credit Union League (TCUL). Caprock FCU is the 18th credit union to receive the distinction from the TCUL. To earn the designation, credit unions must go through an application process (LoneStar Leaguer Sept. 14). The Juntos Avanzamos designation is given to credit unions that demonstrate a capacity and the infrastructure to meet the financial needs of Hispanic families. TCUL presented Caprock FCU with the Juntos Avanzamos flag Friday …

Everest climber sports author to be at league confab

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CORALVILLE,  Iowa (9/14/12)--The annual Iowa Credit Union Convention, themed "Unlock the Potential," will take place in Coralville Sept. 19-21, with more than 350 credit union CEOs, directors, other executive staff, guests and vendors focusing on advancing credit union growth and vitality.

Charlie Wittmack, an explorer, attorney and the only person in history to complete the World Triathlon, will be the opening keynote speaker. Wittmack will share his story of extraordinary resolve, determination and success in the face of unprecedented challenges, said the Iowa Credit Union League.

Internationally recognized motivational business speaker Ross Bernstein will be the closing speaker on Friday. Bernstein is the best-selling author of 50 sports books and has appeared on thousands of TV and radio programs throughout his career. He will use sport stories as a metaphor for life and for business to energize convention attendees by challenging them to not just be ordinary, but to make a difference and be extraordinary.

Fourteen education sessions are also planned. Among the topics: How to prepare for a crisis, marketing and business development, what effects the economy has on credit unions, and compliance updates geared toward directors, among others.

In addition to a reception Wednesday night, Iowa Credit Union Foundation's (ICUF) annual Benefit Night will be Thursday night and will feature a dessert reception and live music featuring the University of Iowa's steel drum band. All proceeds will be used to fulfill ICUF's mission of helping Iowans build wealth, responsibility and independence.

New checking account to help people in economy

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RIVERSIDE, Calif. (9/14/12)--A checking account designed to help people get back on their feet financially in an area where unemployment is at 12.8% and the recovery is slow has been launched by Riverside, Calif.-based Altura CU.

The new Reliance Checking Account, designed to help individuals caught in the wake of the slow recovery, comes with a regular Visa Debit Card, online banking, mobile banking and eStatements.

Unemployment in the area, known as the Inland Empire is well above the 8% national rate and nearly two points higher than California's 10.7% rate. Local foreclosure rates were among the highest in the nation and continue to be the fifth highest in the state. Altura itself struggled for a couple of years as a result. Now that Altura is on a stronger foundation, it is reaching out to help and do what credit unions do best, said the $708 million asset credit union.

"We are offering a new beginning to people by providing a tool for recovery," said Jennifer Binkley, Altura chief operating officer. Many local residents have been left with credit problems and a negative credit history.

"Traditional banks turn them away, not just for loans, but also when applying to open a checking or savings account. Can you imagine having no access to ATMs, no resources for paying bills, no relationship with a financial institution?" Binkley said.

Altura's Reliance Checking is specifically designed to assist individuals who have financial difficulties, unpaid closures and negative history reported to ChexSystems. A negative report usually results in a denial to open a new account.

"This is an area where we want to assist," Binkley added. "Credit unions were created to do exactly this kind of thing. Our Reliance Checking is a temporary solution that can evolve into a regular Altura account. This checking account will have an immediate impact on people's lives. It will make managing the financial portion of their lives a lot easier and provide a path to a traditional account."

With the account, members can recover and rebuild their financial status, and become eligible for other checking accounts and financial services that Altura offers. It comes with a Visa Debit Card that looks exactly like every other card Altura issues--with no red flags to embarrass cardholders. It also provides access to an educational program and support. The account has a $10 monthly service fee.

After six months of positive account activity, and after having paid off an outstanding checking account-related, Reliance Checking account holders can move to the next level--the Renew Checking Account. The account has no minimum balance requirements, allows members to write personal checks, and adds ATM deposit access. After six months of positive Renew account activity, members become eligible for any Altura checking account.

"This isn't something we had to do, but something we believe is the right thing to do. To put it simply, it's needed and it will help," said Binkley.

CUs help underbanked servicemembers avoid payday lenders

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WASHINGTON (9/14/12)--The news that the unbanked and underbanked households have increased slightly since 2009 comes as no surprise to the nation's defense credit unions.  The people they serve--service members and their families--are often prey to predatory lenders. As a result, these credit unions have a myriad of programs to serve them.

The Defense Credit Union Council (DCUC) and its members have offered page-after-page of commentary to the Consumer Financial Protection Bureau (CFPB) outlining the extraordinary service and support they provide their members who are often preyed upon by check cashers and predatory lenders.

"Military credit unions have done and continue to do an absolutely superb and most effective job supporting the daily financial needs of our troops and their families," said DCUC President/CEO Roland "Arty" Arteaga, in a letter last year to the CFPB. "Not only do they provide traditional financial products and services to their military members, but they also offer special products and services tailored for today's military and the environment in which they live and work."

In addition to the traditional products and services, many offer exclusive products, such as higher interest savings, loan discounts, early paydays, guaranteed paydays, payday loan alternatives, special lines of credit, no-cost financial education and training, the Military Saves program, transition assistance, streamlined military websites, electronic banking, overseas bill pay, overseas currency sales, overseas and stateside shared branching, grants for down payments to first-time home buyers of modest means, mortgage loan modifications, guarantee utility deposits, or support of the Servicemembers Civil Relief Act.

A number of on-base credit unions "go the extra proverbial mile in the face of a government shutdown and without hesitation 'stand to' to advance the military payday" and provide no interest loans to troops, Arteaga's letter said.

One clear example of  "Serving Those Who Serve Our Country"--DCUC credit unions' motto--is Service CU, based in Portsmouth, N.H.  On Sept. 4 it rolled out its "Guaranteed Pay" product. It provides a fee-free, courtesy pay-like funds availability of $1,000 that may be drawn by service members if their total Defense Finance Accounting Service net pay is not received into their account. This is beyond what Service CU committed to last year when the federal government was facing a shutdown. The $1,000 fee-free amount can be followed by another $1,000 line of courtesy pay on which fees are assessed. The loans must be repaid within 33 days of receipt.  If not, the servicemembers are discontinued from the program and they will go into a Repayment Plan.

To counter payday lenders' efforts, the $2.45 billion asset Service CU offers a Warrior Savings Account, with a 10% annual percentage yield (APY) for servicemembers deployed in active combat zones. The rate applies up to 120 days after the soldier's return from a combat zone.

Servicemembers who earn less than $2,507 per month are eligible for Service CU's "STAR" program, which gives an additional rate increase on the base savings rate, an additional loan discount  (for example, a vehicle and unsecured loan gets 1% off) and special certificate rates.  It also offers a special military relocation loan for those moving outside the U.S.

The $2.8 billion asset Tinker FCU, based in Oklahoma City near Tinker Air Force Base, also provides services customized to its servicemembers.  Its Starting Line Certificate provides higher dividend rates and requires a minimum deposit of $25.  Its Advantage Checking allows servicemembers to carry lower balances and offers dividends free services and benefits, and Reconnect Checking offers servicemembers a second chance to rebuild their financial stability, with no minimum balance requirements.

Tinker FCU also offers a short-term loan alternative to payday loans called Personal Access Loan (PAL). Once PAL is repaid, borrowers are eligible for a Credit Builder Loan Program in which servicemembers receive  interest rate savings for going through a financial education program which has one-on-one counseling with its partner, BALANCE.

The  $880 million  asset Scott CU in Collinsville, Ill., provides a payday loan alternative to servicemembers at Scott AFB . Its Easy Cash program allows members to borrow $300 to $1,000 until their next payday. The loan has no interest for 30 days, no fees, and no credit check, and it provides free credit counseling designed to help them escape problems the servicemembers may already be facing because of high-rate payday loans.

Scott CU also participates in the Operation Project and Provide program, a short-term, low interest-rate loan of up to $10,000  to help ease the financial sacrifice of reservists who are called to active duty.

Several defense credit unions have partnered up to offer a predatory-lending alternative loan program, Asset Recovery Kit (ARK). Formed by the PenFed Foundation at Alexandria, Va.-based Pentagon FCU, the program has expanded to other credit unions. These include Fort Bragg FCU, Fayetteville, N.C.; GeoVista FCU, Hinesville, Ga.; Fort Gordon and Community  (Ga.) FCU; SAC FCU, Bellevue, Neb.; Schofield (Hawaii) FCU; AmeriCU CU, Rome, N.Y.; Ent FCU, Colorado Springs, Colo.; SD Medical FCU, San Diego; Miramar FCU, San Diego; Pearl Harbor FCU, Waipahu, Hawaii; Redstone FCU, Huntsville, Ala.; Tyndall FCU, Panama City, Fla.; Belvoir FCU, Woodbridge, Va.; and Kirtland FCU, Albuquerque, N.M..

The ARK program has helped nearly 4,000 military families with more than $2.2 million in emergency loans and financial counseling. It offers short-term, interest-free advances to active duty, reserve and national guard military personnel with emergency cash needs. Borrowers pay a fee of  $1 per $100 borrowed for immediate cash advances up to $500 (or 80% of net pay). The foundation guarantees and reimburses all losses to participating credit unions. A service member can receive five advances in a single year, but is required to complete financial counseling before each subsequent cash advance. The program is offered free to all credit unions serving the armed forces and is branded with the name and logo of the partner credit union.

These are just a few credit unions' programs, but a quick review of nine other defense-related credit unions indicates that these programs are typical of the services they provide a significant portion of servicemembers and their families.

Texas Trust debit rewards send 110K to high schools

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MANSFIELD, Texas (9/14/12)--Purchases made with Texas Trust CU's Spirit Debit Reward card have resulted in nearly $110,000 paid to high schools in four North Texas School Districts.

Consumers made more than $725,000 debit card purchases with the Spirit Debit Reward card between August 2011 and July 2012. Each time a card was used, Texas Trust paid participating schools 15 cents (Business Wire Sept. 12).

The Spirit Debit Reward program exceeded its reward goal by $35,000, or nearly 50%, because participation was so robust, said the $754 million asset Mansfield, Texas-based credit union.

Participating schools received a monthly reward check for the preceding month's purchases, so the schools would have the rewards cash available throughout the year instead of waiting for a single annual payout.

The program comprises more than 4,188 Spirit Debit Reward cardholders, consisting of students, parents, teachers and faculty of participating schools.

Texas Trust has extended the program for another school year.

Paper outlines three lessons from card rewards

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DES MOINES, Iowa (9/14/12)--A new white paper issued by the Members Group (TMG) details three truths of credit and debit card rewards programs.

"Creating Engagement and Loyalty: How to Reward Yourself and Your Cardholders" is written to provide both the card processor and the issuer perspectives. Matt Flynn, director of client relations for card processor TMG, and Jeff Russell, president/CEO of credit card agent-issuer TMG Financial Services (TMGFS), share insights on why rewards programs matter in today's competitive card environment.

TMG and TMGFS work with community financial institutions to enhance portfolio performance with rewards programs. Collectively, the companies have learned three lessons:

  1. Rewards elevate the competitive nature of a card offering, leveling the playing field between community financial institutions and the major card issuers with which they compete.
  1. Rewards, when tailored for a cardholder base, drive customer engagement and loyalty.
  1. Card rewards can provide a healthy return on investment.
The paper also offers suggestions for lowering the costs of a rewards program. The tactics include comprehensive vendor due diligence, flexible points schedules, less costly marketing programs and a merchant-funded option.

A strategy for programs targeted to different consumer segments inside the same portfolio is detailed in the paper. The authors also describe how different cardholders place different values on reward offerings.

The goal is to successfully segment cardholders, offering each group the most pertinent and compelling rewards possible. The paper identifies four cardholder segments:

  • Transactor: The cardholder makes purchases but pays off the balance most months.
  • Revolver: The cardholder carries a balance from month to month while continuing to make purchases.
  • Pay-Down: The cardholder is actively paying down a balance by making regular, over-minimum payments each month, but typically is not making purchases.
  • Inactive: The account has been dormant--no payments, no finance charges, no transactions, no balance--for six months.
"A successful cost-control strategy for issuers is portfolio segmentation," the authors wrote. "By only offering rewards to those cardholders who truly value perks (and whose transaction behavior reflects that value system), issuers can save significant per-account costs."

To download the free paper, use the link.

Richmond Fed seminar CUs an option to payday lenders

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RICHMOND, Va. (9/14/12)--Credit unions are a viable alternative to payday lenders, Nancy Pierce, field coach for the National Credit Union Foundation, told a seminar audience hosted by the Federal Reserve Bank of Richmond.

The challenge credit unions face is that they serve defined fields of membership and must match the pervasiveness of payday lenders on nearly every street corner (Richmond Times Dispatch Sept. 14).

Offering financial services to the the poor is a big business in America, with at least seven publicly traded companies in the check-cashing business, said Gary Rivlin, author of the book, "Broke USA."

Many low-income consumers do not participate in or have access to traditional financial services.

More than one in four U.S. households--28.3%--are either unbanked or underbanked, a slight increase from 2009, according to 2011 statistics released Wednesday by the Federal Deposit Insurance Corp. (News Now Sept 12).

Pierce suggested nonprofit groups, social service agencies and faith-based organizations attending the seminar could partner with credit unions to assist low-income families the groups serve.

To read the full article, use the link.

Get ready Smartphone shipments to double

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MADISON, Wis. (9/14/12)--Smartphone shipments are forecast to reach 567 million in 2012, and nearly double by 2016 as new phones such as this week's freshly unveiled iPhone 5 continue to enter the market, according to a new study by NPD DisplaySearch released Wednesday. That means credit unions can expect to gear up for more mobile banking.

"Apple's iPhone 5 will be a key product for the smartphone market in the second half of 2012. Apple shipped more than 140 million phones in 2010 and 2011, so we can expect smartphone shipments to continue flourishing as users upgrade to the new iPhone," said Hirsoshi Hayase, vice president, small/medium displays for NPD DisplaySearch.

Despite the excitement surrounding the new iPhone, the volume of new smartphone shipments is lower than expected. NPD DisplaySearch downgraded its 2012 forecast of new purchases from the 220-million-to-230-million ballpark to 177 million. The volume of replacement phones, however, is expected to increase as new smartphones enter the market.

"The timing of mobile phone contracts can also impact the smartphone market," said Hayase. "More service providers are likely to shorten mobile phone replacement cycles in an effort to boost sales."

Many credit unions added mobile-banking capabilities to their service this year, in hopes of attracting younger members.

CUNA Mutual Group said that since it launched its smartphone loan application last year, it has garnered 40 new credit unions as Loanliner platform customers (News Now Sept. 13).

With the app, CUNA Mutual has processed roughly 35,000 loan applications and generating more than $335 million in loan application volume, said InformationWeek (Sept. 11).

The smartphone app could be a key element for credit unions trying to attract younger members because the average age of a credit union member is 47 years old, while the average smartphone loan application user is 32, the publication said.

The app supports Apple and Android devices.

More than 550 credit unions have implemented the smartphone loan app, and CUNA Mutual has partnered with Fiserv, a global provider of financial services technology, to make the app available to an additional 350 credit unions, InformationWeek said.

Jekel honored with NASCUS Pierre Jay Award

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DENVER (9/14/12)--Linda Jekel, credit union regulator from Washington, past chairman of the National Association of State Credit Union Supervisors (NASCUS), and longtime NASCUS board director, was honored with the 2012 NASCUS Pierre Jay Award.

Jekel was recognized Wednesday during the NASCUS State System Summit in Denver.

Recipients of the Pierre Jay Award demonstrate outstanding service, leadership and commitment to NASCUS and the dual-chartering system. The Pierre Jay Award, first awarded in 1997, is named after the first commissioner of banks in Massachusetts.

"When we created the Pierre Jay Award, it was meant for advocates like Linda who make countless contributions to NASCUS and to the state credit union regulatory system," said NASCUS President/CEO Mary Martha Fortney. "Throughout her career, Linda has been passionate about states' rights and the important work of advocating for a strong state credit union charter in her home state of Washington and nationwide. "

Last year, NASCUS awarded the Pierre Jay to past NASCUS Chairman Roger Little, retired credit union regulator from Michigan.

NASCUS announces board exec council members

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DENVER (9/14/12)--The National Association of State Credit Union Supervisors (NASCUS) announced the appointment of its 2012 board and credit union executive council at its annual meeting this week in Denver.

Two current NASCUS Board members officially began new three-year terms. Mary Hughes, financial institutions bureau chief of the Idaho Department of Finance, and Werner Paul, deputy commissioner of the Bureau of Financial Institutions, Virginia, are continuing their service on the NASCUS board.

John D.  "J. D." Fields, deputy chief examiner of the Louisiana Office of Financial Institutions was appointed to a one-year term on the NASCUS board by Chairman Orla Beth Peck, credit union supervisor.

The remaining sitting NASCUS Board members include:

  • Tom Candon, deputy commissioner, Vermont Department of Financial Regulation;
  • John Kolhoff, deputy commissioner for credit unions, Michigan Office of Financial and Insurance Regulation;
  • Linda Jekel, director of credit unions, Washington Department of Financial Institutions;
  • Linda Charity, interim commissioner, director of financial institutions, Florida Office of Financial Regulation; and
  • Michael Wettrich, deputy superintendent for credit unions, Ohio Division of Financial Institutions.
Officers elected by the NASCUS Board include Hughes as chairman-elect and Kolhoff as secretary/treasurer. Peck will continue to serve as chairman.

Also, three incumbent state credit union CEOs began new terms on NASCUS' Credit Union Executive Council and one state credit union CEO was newly elected.

The executive council, a group of 12 credit union executives from around the country, governs the NASCUS Credit Union Advisory Council.

CEOs elected to the executive council include:

  • Ron McDaniel, California CU, Glendale, Calif., will represent District 4 for a three-year term.
  • Patty Idol, Mountain CU, Waynesville, N.C., will continue to represent District 2 for a three-year term, expiring September 2015. 
  • Cathie Tierney, Community First CU, Appleton, Wis., will continue to serve as a District 3 director for another three-year term.
  • Dan Kester, Sooper CU, Arvada, Colo., will also continue to represent District 4.
Tierney, chairman of the advisory council, re-appointed Bob Fouch, CEO of Corporate Central CU, Muskego, Wis., to serve a three-year term representing the corporate system.

Other members of the executive council include:

  • J. Parker Cann, BECU, Tukwila, Wash.;
  • Debbie Peters, Community Regional CU, Old Forge, Pa.;
  • Jack Sheets; Interra CU, Goshen, Ind.;
  • Linda Childs, Knoxville (Tenn.) Post Office CU;
  • Jason Boesch, Oklahoma RE&T CU, Oklahoma City, Okla.;
  • Mike Kurish, Associated School Employees CU, Youngstown, Ohio; and
  • Terry West, Vystar CU, Jacksonville, Fla.
 

The executive council also elected its officers. Tierney continues to serve as chairman, Childs is the chairman-elect and Kester is the secretary.

CU System briefs (09/12/2012)

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  • DES MOINES, Iowa (9/13/12)--A suspect in two robberies of the same Des Moines, Iowa-based credit union last month was arrested Tuesday afternoon by Des Moines police after a short pursuit in which he crashed his car into a post and tried to flee the scene (Des Moines Register Sept. 12). Keith A. Schwartz, 41, of Des Moines has been charged in the Aug. 1 and Aug. 29 robberies of Edco Community CU. An officer tried to pull Schwartz's vehicle over around 2 p.m. Tuesday, but the driver fled and was chased 10 blocks before losing control of the car. Schwartz was treated for injuries at a local hospital. He is charged with two counts of second degree robbery, eluding, failure to maintain control and driving without a license or insurance …
  • PORTLAND, Maine (9/13/12)--Paul Garland, 27, of Oakland, Maine, was sentenced to eight years in prison Tuesday in a federal court in Portland for allegedly robbing a credit union while wielding a knife.  The robbery occurred in June 2009 at the Skowhegan branch of the Winslow-based Taconnet FCU. Garland was also ordered to pay $9,147 in restitution and undergo five years of supervised release after the prison term (Portland Press Herald Sept. 11) …
  • ROHNERT PARK, Calif. (9/13/12)--An Oakley,Calif., woman has been arrested in Rohnert Park, Calif., on suspicion of opening at least five bank accounts using stolen identities, including trying to open up accounts on two consecutive days at a Rohnert Park credit union. Denise Michelle Hankins, also known as Denise Wagoner, 42, was arrested at a hotel where police allegedly confiscated a briefcase with stolen IDs, counterfeit checks, forged documents and stolen mail (The Press Democrat Sept. 10).  Hankins has served time in prison for mail and identity theft and is under investigation by police in Petaluma, Calistoga and Brentwood. She has been charged with suspected identity theft, burglary and forgery …

Loanliners mobile platform--from kitchen to success

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MADISON, Wis. (9/13/12)--CUNA Mutual Group said it has garnered 40 new credit unions as Loanliner platform customers since it launched its smartphone loan application last year, and the service has drawn the attention of a publication for technology experts.

The app, which got its start at a kitchen table, has resulted in CUNA Mutual processing roughly 35,000 loan applications and generating more than $335 million in loan application volume, said InformationWeek (Sept. 11).

The app is browser-based instead of being a native app, and it supports Apple and Android devices.

To date, more than 550 credit unions have implemented the smartphone loan app, and CUNA Mutual has partnered with Fiserv, a global provider of financial services technology, to make the app available to an additional 350 credit unions, the publication said.

The app could be a key element for credit unions trying to attract younger members because the average age of a credit union member is 47 years old, while the average smartphone loan application user is 32, the publication said.

In the article, CUNA Mutual Chief Information Officer Rick Roy also discussed the challenges of introducing new technology. The article has run in CMP TechWeb and other technology publications. (See related News Now story, "CUNA Mutual Group No. 75 in InfoWeek 500.")

Council paper--CFOs role is morphing

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MADISON, Wis. (9/13/12)--The chief financial officer (CFO) position at credit unions has evolved into more of a strategic partner and educator for the CEO, the board of directors and the credit union management team, according to CUNA's CFO Council's "The Transforming Role of the Credit Union CFO," a white paper that charts the quiet evolution of the position.

The CFO's role has morphed into a more complicated and demanding role befitting a financial services environment that has also become increasingly multifaceted, said the paper. In an earlier time, the job consisted of financial preparation, payroll, general ledger and accounting for fixed assets. The tools today are more complex--determining net economic value for the balance sheet, accounting for troubled debt restructures and reviewing the amount of interest-rate risk in the balance sheet under different scenarios.

"The CFO used to be the guy in the room waving hands and saying, "too much risk," while other folks saw opportunity," said Scott Waite, chief financial officer and senior vice president, Patelco CU, Pleasanton, Calif. "Today, the whole world is more aware of risk questions and chief financial officers don't feel as lonely in the risk game. The CFO is being used and viewed as a strategic adviser for the CEO and board."

The position requires a move beyond analytics--people want to know what the numbers mean and how they relate to their daily work, the paper said. The chief financial officer interprets the analytics and then provides tactics and strategies, which may mean tightening up procedures and policies.

CFOs need a thorough understanding of sophisticated financial instruments and asset-liability management to be effective. But they also must be able to explain clearly these instruments and financial management--in understandable terms--to other staff and the board.

Education is one of the best defenses against complexity risk, said the council's paper. Complexity risk is the notion that with increasing regulations, innovative technology and products, the financial services industry is becoming overly complicated for members, directors and management, which can lead to bad decisions. Employees and directors need a sense of purpose to fulfill their duties, which they lack if they are confused by the terminology, numbers and their meaning.

Serving as an educator was noted by many of those interviewed for the paper as one of the roles the CFO will play increasingly in the years to come. The CFO can help to educate members of the management team and board of directors so that each participant in the credit union system can help ensure a secure haven for their members' deposits and serve as a resource for reliable financial advice.

Educating the American public about the basics of economics and financial literacy is also a role credit unions and their CFOs can play, to help to prevent future financial calamities, the paper concluded.

The paper is available online. Use the link.

Maine CUs remember 911 with funds for Red Cross pantries

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PORTLAND, Maine (9/13/12)--Maine's credit unions' recognized five American Red Cross chapters in their 11th anniversary 9/11 tribute in Portland.

Click to view larger image Representatives from Maine's five Red Cross Chapters and food pantriesCU System briefs gather with representatives from the Maine Credit Unions' Campaign for Ending Hunger, including Maine Credit Union League Governmental and Public Affairs Manager Jon Paradise (center behind check) at the 9/11 Memorial in Portland.  The campaign, which has raised $4.3 million since 1990--including a record $447,000 in 2011--distributed funds to emergency food relief efforts statewide in honor of the 9/11 anniversary.  (Photo provided by the Maine Credit Union League)
The tribute, with the theme "People Remembering & Helping People," honored and remembered the victims of 9/11 and their families, and gave funds to charities.

The Maine Credit Unions' Campaign for Ending Hunger, which raised a record $447,000 in 2011, distributed more than $6,000 of the funds raised to the Emergency Food Relief Fund of each Red Cross Chapter in Maine, and to a food pantry located at each chapter.  

"9/11 brought about a tremendous resurgence of community in Maine and across the country, and helping make sure people have enough to eat and receive assistance during an emergency is what community is all about," said John Murphy, president of the Maine Credit Union League. The campaign "has chosen to mark the anniversary of 9/11 in this way each year in recognition of the volunteers who help communities during difficult times."   

The five Red Cross Chapters in Maine that received checks in the amount of $911 each are: the Southern Maine Chapter, the United Valley Chapter, the Mid Coast Chapter, the Pine Tree Chapter and the Pine Tree-Aroostook Chapter.

The five food pantries in Maine that received $311 checks each are: Wayside Soup Kitchen of Portland, Mid Coast Hunger Prevention Food Pantry of Brunswick, St. Mary's Food Pantry of Lewiston, MANNA Food Pantry of Bangor and Catholic Charities of Maine of Caribou.

All funds raised go directly to the cause of ending hunger and stay in Maine. The campaign for ending hunger has raised $4.3 million since 1990.

Unbankedunderbanked increase CUs there for them

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WASHINGTON (9/13/12)--More than one in four U.S. households--28.3%--are either unbanked or underbanked, a slight increase from 2009, according to 2011 statistics released Wednesday by the Federal Deposit Insurance Corp. (FDIC).  In other words, credit unions' ongoing efforts on behalf of  low-income members and their outreach efforts to largely unbanked or underbanked populations are needed now more than ever.

The announcement comes just as the National Credit Union Administration (NCUA) was announcing that hundreds of  credit unions have accepted its  low-income designation, meaning they can accept supplemental capital and use an exemption from the small business lending cap under certain circumstances to assist their members.

NCUA had notified 1,003 credit unions in August that they were eligible for the program. LICUs are also eligible for Community Development Revolving Loan grants and low-interest loans and may accept deposits from non-members, such as unbanked households relying on payday lenders for financial services.

The announcement also comes as more credit unions and leagues try creative ways to attract the unbanked and underbanked.  These include prize-linked savings programs such as Michigan's Save to Win and the Filene Research Institute's SaveUp program, which is being piloted by 20 credit unions in 12 states  to evaluate the emotional effects of rewards programs on influencing consumers to make positive financial decisions.

Other credit unions offer better rates on short-term loans to combat exorbitant fees charged by check cashers and payday lenders; have outreach efforts for Hispanic membership; and are active in financial literacy programs.

Servicemembers and their families, although not unbanked, often are underbanked and are prey to check cashers and payday lenders that are typically located near their bases, and credit unions that are members of the Defense Credit Union Council often provide special services to support the troops and their families. (News Now will feature a separate story on the efforts of a number of defense-related credit unions Friday.)

More than 821,000 more U.S. households have become unbanked since the first survey in 2009--a 0.6 percentage point increase, according to the FDIC's 2011 National Survey of Unbanked and Underbanked Households. More than half of all unbanked households say they do not have an account because they believe they do not have enough money or that they do not need or want an account. Three in 10 households in the U.S. do not have a savings account.

Other key findings:

  • One in 12 U.S. households--8.2%, or 10 million households--are unbanked. Roughly 17 million adults live in unbanked households.
  • One in five households (20.1% or 24 million households with 51 million adults) are underbanked.
  • Of the households, 29.3% do not have a savings account, while about 10% do not have a checking account. Nearly two-thirds have both savings and checking accounts.
  • One-fourth of households say they have used at least one alternative financial service such as non-bank check cashing or payday loans in the past year. Nearly one in 10 used two or more types of these services. Also, 12% of households said they have used these services in the past 30 days, including four out of 10 unbanked and underbanked households.

Tinkers Kloiber named to DCUC Hall of Honor

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OKLAHOMA CITY (9/13/12)--Tinker FCU (TFCU) President/CEO Michael D. Kloiber was inducted into the Defense Credit Union Council's (DCUC) Hall of Honor on Aug. 21 in Denver.

For his "passionate advocacy on behalf of the credit union movement and his steadfast support of the defense community," Tinker FCU President/CEO Michael D. Kloiber was inducted into the Defense Credit Union Council's Hall of Honor in Denver. (Photo provided by Tinker FCU)

Click to view larger image
The council's Recognition Task Force selected Kloiber for his "passionate advocacy on behalf of the credit union movement and his steadfast support of the defense community."

The Hall of Honor award highlights outstanding accomplishments of leaders, volunteers, management and staff, whose efforts and support of the credit union movement and DCUC epitomize the council's values and philosophy of "Serving Those Who Serve Our Country."

Kloiber has been TFCU president/CEO since 1996. His service on several organizations' committees and boards demonstrates his leadership in the credit union community, the committee said.

He is vice chair of the DCUC Midwest Sub-Council, a position he has held for six years. Kloiber is often praised for his ongoing support and assistance to smaller credit unions, even though he leads Oklahoma's largest credit union.

Under Kloiber's leadership, Tinker FCU is a strong supporter of Tinker Air Force Base in Midwest City, Okla., and Vance Air Force Base in Enid, Okla. He and his staff at those bases work closely with base personnel to help meet the special needs of military personnel.

The DCUC's Hall of Honor was established in 2000 to recognize individuals whose contributions have made a "significant and noteworthy difference" in the defense credit union community.

Tinker FCU has more than $2.8 billion in assets and in excess of 250,000 members.

Texas speaker to CUs Get politically engaged

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FARMERS BRANCH, Texas (9/13/12)--Credit union leaders must engage with policymakers in ongoing, effective relationships, Tom Haider, chief advocacy officer for the Texas Credit Union League (TCUL), told attendees at the Political Engagement breakout session at TCUL's Leadership Conference last week in San Antonio.

Connections with lawmakers will make a difference when credit unions face tough battles over legislation, Haider said.

He encouraged attendees to explore avenues beyond visits to lawmakers' offices, such as hosting "meet and greets" in the credit union, working on campaigns and being active in local civic organizations (Lone Star Leaguer Sept. 12).

Events such as Rotary Club luncheons should include a credit union presence that matches that of community bankers, he told the audience. Civic organizations often are the proving ground for community activists with political aspirations. Establishing a relationship early in a politician's career can provide long-term benefits, he said.

Credit unions also must communicate with lawmakers on the issues that affect them, Haider said. Among the most pressing issues for credit unions is the increased regulatory burden, he added. Citing a recent proposal from the Labor Department to limit children working on family farms, he noted that more than 80,000 people sent in comments, which led to repeal of the proposal.

By comparison, credit unions often send legislators a few dozen comment letters on some issues. Haider urged attendees to mobilize their efforts when new rules are proposed for credit unions. Communications can be simple and straightforward. Regulators are interested in hearing about real-world problems caused by new rules, he said.

Haider also encouraged credit unions to implement TCUL's Credit Unions: Ready, Organize, Activate, Respond program to initiate their own government relations program.

Community CU of Year Award to highlight CUNA conference

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MADISON, Wis. (9/13/12)--The Credit Union National Association (CUNA) will honor four credit unions with its 2012 Community Credit Union of the Year Award, presented at the CUNA Community Credit Union & Growth Conference, Oct. 23-26 in Denver.

The award honors credit unions that consistently excel in advancing of the ideals of the credit union movement, are proactive in their community and provide a wide array of services that meet the needs of their communities.

The awards committee comprises a panel of judges from the CUNA Community Credit Union Committee, recently completed review of the entries and remarked on the quality of submissions.

"It is inspiring and energizing to see so many credit unions doing great things in their community," said Todd Spiczenski, CUNA Center for Professional Development vice president. "It was difficult to choose from so many outstanding credit unions that embody the principles of the credit union movement."

The four honored credit unions are recognized with a first place and honorable mention winner in each asset category of less than $250 million and more than $250 million.

Session topics and speakers at the CUNA Community Credit Union & Growth Conference will include:

  • The Spark, the Flame and the Torch: How inspiration has become the most important distinctive advantage for modern organizations--Lance Secretan, teacher, management guru, Fortune 500 executive, author;               
  • Capitalizing on Small Business in Your Community--Doug Benzine, vice president, publishing, CUNA;
  • Get off My Lawn!: How to Monetize Social Media for Business Results--Jay Vanjalu, CEO and board member, Buzz Banking;
  • Product and Marketing Strategies to Attract and Create the Loyalty of the Hispanic Community--Miriam De Dios, CEO, Coopera;
  • Legislative & Regulatory Update--Ryan Donovan, senior vice president, legislative affairs, and Mary Dunn, senior vice president and deputy general counsel, CUNA; and
  • Best Practices from Successful Community Credit Unions--Jeff Rendel, president, Rising Above Enterprises.

ASI announces special premium assessment

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DUBLIN, Ohio (9/13/12)--Private share insurer American Mutual Share Insurance Corp. (ASI) has announced its board approved a special premium assessment for 2012--in the amount of nine basis points, or 9% of 1% of total shares.

The premium will be assessed of all its primary insured member credit unions of record as of Sept. 30, 2012. Subject to final regulatory approvals, the assessment will be based on total shares reported as of June 20, 2012, and invoiced on or about Sept. 30.

The assessment means the Dublin, Ohio-based ASI will end the year sustaining its equity ratio of 1.6%, said ASI in a press release.

The assessment does not apply to excess share insurance policyholder credit unions insured by Excess Share Insurance Corp. (ESI) or ASI.

"Record-low investment yields, combined with the need for ASI to continue funding loss reserves in light of the slow recovery in select markets, is what drove the ASI Board of Directors to make this decision," said ASI President/CEO Dennis Adams. 

The ASI board "closely monitored ASI's earnings and reserves throughout the year and reviewed its options for an assessment with ASI's Primary Insured Credit Union Advisory Council before arriving at nine basis points," Adams said.

The ASI Advisory Council comprises 20 CEOs from primary insured member credit unions and provides a venue for member credit union input on critical issues, said ASI.

ASI, a credit union-owned share guaranty corporation, provides share insurance for members of 143 state-chartered credit unions in nine states. It insures these members' savings up to $250,000 per individual member account.

Marketer to Texas CUs Eradicate old marketing ways

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FARMERS BRANCH, Texas (9/12/12)--Credit unions have never had a better opportunity to seize greater market share. However, they must evolve, Sean McDonald of Your Full Potential LLC, told Texas credit unions at the Texas Credit Union League Leadership Conference & Expo in San Antonio last week.

"The old way of doing things have to be eradicated," he said in his "CU Marketing: What You Simply Must do to Survive" presentation (LoneStar Leaguer Sept. 10). "I'm not saying that traditional marketing doesn't have its place, it does for certain demographics," McDonald told attendees. "But it doesn't work for younger people."

Social media isn't going away. Facebook is about to eclipse one billion users. Twitter has more than 300 million users, and LinkedIn has roughly 160 million users, McDonald said.

"The amount of time spent on computers and on the Internet by Gen X and Gen Y is staggering," McDonald said. "Why not take advantage of this? It's a whole lot cheaper than traditional marketing."

At the very least, credit unions need to have a Facebook page and a Twitter handle, McDonald said. Technology is essential, and credit unions will have to invest in new and innovative marketing techniques to capture the attention of a younger audience, he added.

What can credit unions do better? McDonald suggests:

  • Simplify. Don't over complicate products and services. If it's a holiday loan, call it a holiday loan;
  • Dedicate more resources to staff training and development;
  • Focus on big ideas;
  • Revamp and modernize old policies and procedures; and
  • Get out more; don't wait for them to come to you.
He also noted that financial literacy is an excellent way to reach a younger audience. "If your credit union isn't offering financial education, this should become a top priority in your strategic planning initiatives," he said.

Also, stop trying to come up with clever names for the sales process, and stop being afraid of the idea of selling, McDonald added.

"Sales is not a dirty word," he said. "We've got to stop thinking that all sales is pressure-selling."

Credit unions simply must approach the sales process in a different way, he explained. "Credit unions are in the relationship-building business and that is how you redefine the selling process," McDonald concluded.

NCUA lawsuit vs. St. Paul Croatian FCU figure stayed

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CLEVELAND (9/12/12)--A motion to stay the lawsuit filed by the National Credit Union Administration (NCUA) against A. Eddy Zai, a developer indicted for allegedly providing kickbacks for loans that contributed to the collapse of St. Paul Croatian FCU, has been granted by a federal court in Ohio, pending the outcome of the criminal case against Zai.

U.S. District Judge John R. Adams granted the stay on Aug. 31 in the U.S. District Court for the Northern District of Ohio Eastern Division. "The court recognizes that continuing in this civil matter will directly implicate Zai's Fifth Amendment rights. Furthermore, given the court's actions in seizing substantial portions of the funds that plaintiff (NCUA) seeks to attach, there is no risk that the funds will be dissipated at any time during the course of the criminal proceedings," said Adam's order.

The court noted that NCUA's "rights in the property will remain protected throughout those proceedings."

Zai was indicted on Feb. 7 on 34 counts related to allegedly obtaining $16.7 million in fraudulent loans from June 2009 until the Eastlake, Ohio-based credit union was liquidated on April 30, 2010.

NCUA, in its role as liquidating agent for St. Paul Croatian FCU, sued Zai; Tina Zai of Pepper Pike, Ohio; former Trumbell County Commissioner Ted M. Vannelli of Kirtland, Ohio; and The Cleveland Group and nine related entities.  Vannelli, who is Zai's father-in-law, pleaded guilty to participating in the loan scheme (News Now May 31).

The defunct credit union's former CEO, Anthony Raguz, pleaded guilty to issuing more than 1,000 fraudulent loans, totaling more than $70 million, to about 300 accountholders.  He also pleaded guilty to accepting more than $500,000 in bribes, kickbacks and gifts from the borrowers. His sentencing is set for Nov. 20 (News Now Aug. 9).

Nineteen people have been charged in the scheme. The alleged ringleader in the fraud, Koljo Nikolovski of Eastlake and Skopje, Macedonia, was sentenced in May to 18 years in prison for his role in the fraud (News Now May 14).

St. Paul Croatian FCU was one of the largest credit union failures in history, costing the National Credit Union Share Insurance Fund about $170 million.

NIHFCUs short-term mortgages take off

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ROCKVILLE, Md. (9/12/12)--The National Institutes of Health FCU (NIHFCU) in Rockville, Md., began offering short-term mortgages three months ago, and the product offerings thus far have been a success.

In that time, the $562.2 million asset credit union has originated roughly 100 five- and seven-year fixed-rate mortgage loans totaling $10 million. They comprise about 20% of the credit union's monthly mortgages (The Washington Post Sept. 7).

Those types of loans currently are extremely popular in the area, Juli Anne Callis, NIHFCU president/CEO, told the Post.

Credit unions and banks are seeing an increase in the number of vacation and second-property purchases, and many are being funded with short-term loans, the newspaper said.

NIHFCU calls that type of financing the "goodbye mortgage," Callis told the paper. Once people pay off their homes and college tuition and expenses, they can afford to purchase and pay off a dream home, Callis added.

The number of overall U.S. mortgages in June was up 23.7% from a year earlier, the Mortgage Bankers Association told the Post. It does not specifically monitor short-term loans.

Although members haven't yet requested five- or seven-year mortgages, Bill White, vice president of residential loans at $1.19 billion asset NASA FCU in Upper Marlboro, Md., told the paper, many members are aggressively paying off their 10- and 15-year loans early because they have a retirement date in mind.

To read the article, use the link.

Cooperative mobile app launched by NCBA

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WASHINGTON (9/12/12)--Consumers can now shop locally, support values-based businesses and find affordable alternatives to for-profit businesses in their communities with the new CooperateUSA mobile app and online directory.

CooperateUSA.coop and the CooperateUSA app are free resources developed by the National Cooperative Business Association (NCBA) in partnership with Co-operatives UK and National Cooperative Bank (NCB) to provide access to 29,000 U.S. cooperatives in several industries, including credit unions and financial service, grocery and consumer goods, healthcare, childcare, housing, transportation, utilities and more.

"Cooperatives continue to outperform for-profit businesses when it comes to consumer satisfaction and now consumers have a free resource at their fingertips that will enable them to experience the co-op difference firsthand," said Liz Bailey, NCBA interim president/CEO. "It's never been easier for consumers to shop locally, support values-based businesses and create jobs in their local communities."

The app is compatible with Apple and Android smartphones and tablets, and offers features that include:

  • A locator to help find 29,000 U.S. co-ops by location, industry or product type;
  • Gaming features that tally points for cooperative activities and award prizes and discounts;
  • Timely updates about cooperative news, events and local offers; and
  • Education on how co-ops affect job creation, affordable housing, healthy food access and worker empowerment.
"Many people shop at cooperatives and purchase co-op products every day without knowing much about cooperatives," said Chuck Snyder, NCB president/CEO. "This tool helps build awareness of this successful business model and makes it easier than ever for consumers to live cooperatively."

Consumers rank cooperatives higher than for-profit businesses on several measures of quality and service, according to a recent study by NCBA and the Consumer Federation of America. The study found that nearly 80% of consumers believe cooperatives can be counted on to meet the customer's needs, and 74% believe co-ops have the best interests of the consumer in mind.

"This survey illustrates that cooperatives remain a trusted choice for millions of Americans who appreciate organizations that put the needs of the consumer first," Bailey said. "Now more than ever, consumers want an alternative to businesses that focus only on the bottom line."

Schools in with help from CUs

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MADISON, Wis. (9/12/12)--School is in session, and a number of cities have students sporting new backpacks, donning new duds, and working with new school supplies, thanks to projects across the country involving credit unions.

An overflowing Dollar Dog Bus at Chetco FCU, Harbor, Ore., finished its 2012 Stuff the Bus with school supplies for the Brookings-Harbor area elementary, middle and high schools. From left are: Allan Stewart, Maine volunteer; Lorie Botnen, CFCU Brookings-Harbor Branch manager; Mr. Martindale, principal of BHHS; Mrs. Lipski, Azalea principal; Adam VanCleave, CFCU marketing; Mrs. Chirinian, Kalmiopsis principal; and Brian Hodge, District 17-C school superintendent. (Photo provided by Chetco FCU)
Here are just a few examples of the help credit unions provided to help ensure students get off to a good start for the academic year.

During July and August, Co-op Services CU in Livonia, Mich., recently collected more than 60 new backpacks filled with school supplies--folders, notebooks, pens, scissor, pencils and more--as part of an area-wide donation drive in partnership with Volunteers of America Michigan, 96.3 WDVD and Fox 2 Detroit, said the Michigan Credit Union League (Michigan Monitor Sept. 10).

The backpacks will be distributed through Volunteers of America Michigan to students of low-income families.

"We have our credit union members and team members to thank for making our fourth annual Backpack Drive an outstanding success," said Jeremy Cybulski, youth and community development coordinator for the $415 million asset credit union.  "We also received a generous donation from the Downriver Wanderers Classic Car Club that allowed us to purchase extra backpacks and supplies."

Heritage Trust FCU, Charleston, S.C., donated more than 5,000 school supply items to the Lowcountry Orphan Relief Back-to-School Drive. In participation with Charleston Chapter of Credit Unions' 2012 charitable initiatives, Heritage Trust served as the collection site for employees and community members to donate new and gently used school clothing and supplies.

"We appreciate the opportunity to participate in this noteworthy endeavor and to give back to our local community," said David D'Annunzio, Heritage Trust senior vice president/chief financial officer.

Chetco FCU (CFCU), Harbor, Ore., co-sponsored its annual 2012 Stuff the Bus and helped the community fill CFCU's Dollar Dog bus to overflowing with school supplies for the Brookings-Harbor area elementary, middle and high schools. Throughout the week, CFCU's Dollar Dog bus was parked at four locations and a similar sized school bus was parked at three locations from 9 a.m. to 4 p.m. Monday through Friday for the community to fill with school supplies for the students.

Each day local businesses sponsored the event, and volunteers from local service organizations manned the busses to collect the supplies. They had a ready list of supplies needed--pencils, pens, backpacks, rulers, crayons, makers, scissors and glue sticks, highlighters, spiral notebooks, protractors, flash drives and more. More than $2,000 was collected and a record number of school supplies stuffed the bus to overflowing. 

"This is a heart-warming event for the community; it's exciting to be able to help kids with the supplies they need to start their school year off right," said Lorie Botnen, CFCU Harbor Branch manager and coordinator of the event. "The Dollar Dog bus definitely has a big impact on the attention this promotion receives; community folks know to look for the bus to make their donation." 

District School Superintendent Brian Hodge noted the "Stuff the Bus donations were HUGE…To a child there is nothing like coming to school with a new backpack full of supplies. You make our students' educational experience richer and more meaningful."

Jeremy Cybulski of Co-op Services CU, Livonia, Mich., and Emilie Rohrbach of Volunteers of America Michigan sort through some of the more than 60 donated backpacks filled with school supplies to be delivered to students in low-income families (Michigan Monitor Sept. 10).  Photo provided by the Michigan Credit Union League).
In Fall River, Mass., St. Anne's of Fall River CU donated 47 backpacks of supplies to the John J. Doran Elementary School there. Employees donated the supplies and more than 20 backpacks, while St. Anne's President/CEO Ross Upton matched the backpack count. Upton also donated 47 credit union lunch totes for the backpacks, noting that "anything we can do to assist our future leaders is money well spent."

St. Anne's also donated two big boxes of school supplies to Carney Academy in New Bedford. A fire in July damaged five classrooms, and credit union employees stepped up to collect replacement items for teachers to use in the classrooms..

Northumberland County Schools FCU in Milton, Pa., also held its fourth annual Stuff the Buss campaign in July and August. The $17 million asset credit union collected backpacks, binders, folders, notebooks, pens, scissors, pencils, index cards, flash cards, book covers and other supplies in a "bus" located in the credit union's lobby. It promoted the supply drive this year through Facebook, its website, its lobby, and through employees, according to Brenda L. Raker, loan officer.

Great Lakes CU (GLCU) in North Chicago, Ill., partnered with 102.3 WXLC radio to Stuff the Bus with a school bus on site for the first three Fridays at a designated GLCU branch for collecting donations. WXLC performed live broadcasts at the sites.  The $543 million asset credit union purchased the first $250 worth of supplies for Kenneth Murphy Elementary in Beach Park, West Elementary in Zion and Clearview Elementary in Waukegan. The generosity of GLCU employees, members and the public produced more than $800 in cash donations. COSTCO in Mettawa contributed 200 backpacks to the cause (Lake County News-Sun Aug. 30).

In Portland, Ore., OnPoint Community CU donated $5,000 to support the St. Vincent de Paul Society of Lane County school supply drive. OnPoint collected cash donations and school supplies through Sept. 3. A special collection event was held at Moshofsky Center, Eugene, on Sept. 1 before the University of Oregon football season opener. "We want to help ensure that all students have the tools they need to start the year off right," said OnPoint President/CEO Rob Stuart, noting that the credit union was founded by teachers.

Members First CU, Midland, Mich., partnered with radio station WIOG 102.5 to collect school supplies for children in the counties served by the $320 million asset credit union. Gladwin Shelterhouse appreciated the efforts, noting, "Anything that can improve students' lives and make things a little easier is truly appreciated."

In Burnsville, Minn., US FCU partnered with Volunteers Enlisted to Assist People (VEAP), an organization that serves low-income residents in the area, for a Back-to-School Program by holding a school supply drive. With support from the community, VEAP will work to serve more than 3,000 students this year with school supplies. USFCU collected more than 140 pounds of school supplies, including 21 backpacks.

In Baton Rouge, La., Neighbors FCU helped EBR Schools kick off its inaugural Back 2 School Expo for the school year at McKinley Middle Magnet school. The expo offered booths ranging from free back-to-school haircuts to information about EBR school resources, such as school websites, registration, attendance policies, transportation routes, and information on school lunch applications and nutrition.  The event provided more than 500 people with information to start off the school year.

Iowa CUs embrace Hispanic growth

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AMES, Iowa (9/12/12)--Hispanic Heritage Month is Sept. 15 to Oct. 15. One state where Hispanic culture has taken on increased significance in recent years is Iowa.

Iowa is not typically considered to be a multi-cultural magnet, but the rural Midwestern state is among the top 10 states where Hispanic buying power is growing the fastest, according to a 2012 University of Georgia study.  Many small, rural Iowa towns are approaching 50% in Hispanic population. The Hispanic population in Iowa grew 91.6% from 2000 to 2011, according to the Data Center of Iowa. By 2040, Hispanics will represent 12.7% of the state's population.

The driver of the Hispanic population growth is Iowa's agricultural and meat processing and packing industries, according to Anna Peña, client account coordinator at Coopera, an Iowa-based economic development firm focused on the emerging Hispanic market, which presents unique growth opportunities for credit unions.

"The initial trigger was economic opportunity in the form of agricultural and meatpacking plants, but now we're seeing the birth rate of resident Hispanics increase and more families are moving into the state's larger cities," Peña told News Now.

The growth has presented opportunities for Iowa credit unions, Peña said.

"Credit unions have really adapted to the market, not necessarily by creating new infrastructure but using their existing brick and mortar," Peña said. "In some areas, where member growth and loan growth were stagnating, Hispanic membership has been a primary driver of growth."

Ames-based Greater Iowa CU, with $301 million in assets, is among the credit unions that have achieved growth by adapting its service and marketing strategies to the Latino market.

Greater Iowa's Denison branch serves 35% to 40% Latino members, according to Michael Adams, Greater Iowa vice president of marketing and public relations. Denison's population is about 45% Latino, Adams said. The credit union's East Des Moines branch serves roughly 19% Latino members, according to Adams.

In its Denison branch, three of the four employees speak Spanish. Three of seven employees in the East Des Moines branch are bilingual. "That is that type of adjustment you need to serve this community," Adams told News Now. "But it's also about reaching out to the community. We also participate in cultural events and offer basic financial education in Spanish."

Greater Iowa CU also has added products tailored to the Latino community, such as remittance services and prepaid cards.

The credit union offers Individual Taxpayer Identification loans, which are made to members without Social Security numbers. "Banks certainly won't get involved with these and a lot of credit unions are wary of them," Adams said. "In two-and-a-half to three years we've been doing them, we have not had any issues. They are a great product for us."

Greater Iowa CU dedicates 15% of its marketing budget to the Hispanic market. The credit union offers a Cosa de la Vida loan, which is underwritten as a standard consumer loan marketed to the specific cultural needs of the Latino community, such as Quinceañera (a traditional celebration of a girl's 15th birthday) or the immigration process.

In the first quarter, Greater Iowa's CU's growth among its Hispanic membership was 8%, outpacing the 2% rate of overall membership growth. About 37% of Great Iowa's Latino members have loans. Roughly, 49% have checking accounts, the same as general membership, Adams said.

"There's very real growth there, and it's not just a social mission, though part of being a credit union is reaching out to the underserved," Adams said. "We have achieved a return, and it's been very rewarding for us."

Coopera works in partnership with the Credit Union National Association (CUNA) and credit unions to help credit unions nationwide grow by serving the Hispanic community. Coopera and CUNA designed El Poder es Tuyo (The Power is Yours), a customizable, Spanish-language personal finance website for Hispanic credit union members and potential members. For more information, use the resource link.

WOCCU teams with Boom Financial on mobile banking

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PALO ALTO, Calif. (9/12/12)--The World Council of Credit Unions (WOCCU) and Boom Financial have partnered to provide Boom mobile-banking services via credit unions in the developing world.

As the global trade association and development agency for 51,000 credit unions serving 196 million people globally, WOCCU will act as a broker, technical consultant and software payments solution to lead Boom Financial's expansion into new countries. Boom Financial will tap into WOCCU's established national credit union networks globally, laying the foundation for Boom to expand and deliver its service to underserved populations.

Boom Financial's money-sharing service allows credit unions to expand their geographic footprint and membership base beyond the standard service area of each branch location.

"Boom Financial shares World Council's vision of expanding financial inclusion through mobile technology and has the resources and people necessary to make it happen," said Brian Branch, WOCCU president/CEO. "We look forward to growing our partnership with Boom Financial to reach an even wider global community."

"Boom Financial and the World Council share common values and a deep passion to provide financial access to all," said Bill Barhydt, CEO of Boom Financial. The partnership will entrench Boom in new cross-border mobile banking. "Combining Boom's mobile-banking infrastructure with WOCCU's decades of experience in providing high-quality international financial services will become a key component of Boom's scaling strategy."

CU folks wear miracle jeans to help kids

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WASHINGTON (9/12/12)--Employees from more than 500 credit unions are wearing jeans to work today in honor of Miracle Jeans Day (MJD), a national fundraising campaign organized by Credit Unions for Kids (CU4Kids) to benefit  Children's Miracle Network (CMN) Hospitals.

This year's participation reflects a 60% increase over last year's credit union involvement, according to Felicity Guerin,  CU4Kids liaison for the American Association of Credit Union Leagues. The participating credit unions represent 47 states, plus the District of Columbia and Canada.

Aspire FCU of New Jersey celebrating 2011 Miracle Jeans Day. (Aspire FCU Photo)
In addition, employees from the Credit Union National Association and approximately half the state credit union leagues are embracing the MJD slogan, "Wear Jeans. Help Kids," almost doubling league involvement from 2011.

Last year, credit unions raised almost $200,000 through the Miracle Jeans Day campaign.  This year Children's Miracle Network Hospitals has set $400,000 as its fundraising goal.  Final results will be available as funds raised are remitted to CMN Hospitals.

To participate in MJD, employees donate $5, which goes to the CMN Hospital that serves their community.  In exchange, the employees get the nod to wear jeans to work.

"Some credit unions go a step further and involve their members," Guerin noted Tuesday.  She said they let members purchase a "Miracle Balloon" icon for $1.  That paper cutout of a balloon then displays the members' names, showing that they supported the CMN Hospital fundraiser.

Miracle Jeans Day participants that need information about submitting collected funds, and credit unions that would like to make a donation, can use the resource link below.

Dakotas foundation Fin lit grant applications due soon

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BISMARCK, N.D. (9/12/12)--Applications for financial literacy grants available through The Credit Union Foundation of the Dakotas are due Sept. 29. Community organizations and credit unions affiliated with The Credit Union Association of the Dakotas are eligible to apply.

The foundation is funded by participating North and South Dakota Credit Unions. It funds projects in the areas of access to financial services, financial education, savings and asset accumulation, and small credit union development.

All grant applications must include:

  • An organization description, legal name, address, primary purpose, and history;
  • The organization's letter from the Internal Revenue Service stating that it is tax-exempt under Section 501 (c) (3) or Section 501(c)(6) and not a private foundation under Section 509(a);
  • The most recent audited financial statement and complete copy of a recent form 990 federal tax return;
  • Current organization and project budget and proposed budgets for 2012.
  • Leadership information (board and staff); and
  • Other funding sources for the organization, including letters of in-kind support/funding commitments.
Interested organizations can obtain a grant application by contacting Amy Jo Johnson at 800-279-6328 ext.3954 or ajohnson@cuad.coop. Grant applications can also be obtained on the Credit Union Foundation of the Dakotas website. Use the link.

CU System briefs (09/11/2012)

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  • WAUSAU, Wis. (9/12/12)--A Green Bay, Wis., man was sentenced to 15 years in prison related to charges from an attempted robbery Jan. 10 at Connexus CU in Wausau. David T. Samuelson, 53, also was placed on 10 years of extended supervision. He was convicted on two counts of robbing the credit union as part of a plea deal. The conviction was his fourth robbery conviction in 34 years. Samuelson was convicted in a 1978 burglary, a 1984 armed robbery, a 1993 robbery in New Mexico, a 1994 robbery, and a beating of his wife in 2009. He already has spent 21 years in prison during his lifetime. Before the sentencing, prosecutors played a 20-second surveillance video taken from four cameras at the credit union robbery scene (Wausau Daily Herald Sept. 11) …
  • EAST WINDSOR, N.J. (9/12/12)--More than 80 golfers teed off Sept. 4 at the VOICE Foundation's eighth annual Charity Golf Classic, hosted by East Windsor, N.J.-based McGraw-Hill FCU (The Daily Exchange Sept. 11). The golfers raised more than $50,000 for local charitable organizations supported by the VOICE (volunteerism, outreach, involvement, community and education) Foundation. Among the beneficiaries are the National Junior Tennis and Learning of Trenton, which strengthens character and enhances the lives of local youth by providing life skills instruction in nutrition, education and tennis, and the Children's Miracle Network Hospitals, which supports 170 children's hospitals across North America. Pictured are members of the winning team with McGraw Hill FCU President/CEO Shawn Gilfedder (second from left). The others are, from left, John Dawidowski, Todd Kimball and Felix Miranda. (Photo provided by the New Jersey Credit Union League) …

Ten people charged in auto lease scams vs. CUs

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MIAMI BEACH, Fla. (9/11/12)--Ten people, including a Miami Beach, Fla., police officer, have been charged in an auto lease theft ring that defrauded credit unions in the area out of $500,000. Nine of the suspects have been arrested.

According to court records, members of the scam ring recruited straw buyers to either lease cars that were then illegally subleased, or to secure financing from credit unions for cars that had already been purchased and moved out of the country (Miami Herald and NBCMiami.com Sept. 7).

Charged with the scam are: 

  • Tomas Manrique, 51, owner of Wachovia Auto Sales;
  • Todd Javon Smith Jr.,  29, owner of Parelelas Motors;
  • Alexandra Olivera, a clerk at a private tag agency;
  • Miami Beach police officer George Robert Navarro;
  • Shanovia Maria Smith, 26, Pembroke Pines;
  • Nicholi O'Neil Smith, 37, Miramar;
  • Francis Elizabeth Hannan, 49, Lauderhill;
  • James M. Paul, 35, Sunrise;
  • Dennis Esther Matos Torres, 42, Miami;
  • Shannon A. Reid, 56, Boca Raton. Reid is still at large.
Law enforcement authorities alleged that Manrique and Todd Smith were the ringleaders and that the straw buyers would turn over the leased vehicles to them, and they would lease them to a third party.

The police officer, Navarro, entered a not guilty plea to charges of racketeering, organized fraud, making false statements and illegal subleasing. The affidavit alleged he went with Marion Mayoli into a Lexus dealership and was told by Mayoli to submit a misleading credit application. Navarro never took possession of the car, but allegedly handed it over to Todd Smith, who sold it. The lender lost more than $31,000, but the car was recovered, said NBCMiami.com.

Mergers update in Florida New York

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LAKELAND, Fla., and NIAGARA FALLS, N.Y. (9/11/12)--Members of two Florida credit unions last week approved mergers into a third credit union, while two Niagara Falls, N.Y.-based credit unions announced they plan to merge.

In Florida, members of Indian River FCU, Vero Beach, and Bay Pines (Fla.) FCU both voted in favor of a merger with the $1.65 billion asset, Lakeland-based MidFlorida CU. Of the votes cast, 84% of Indian River votes and 87% of Bay Pines votes were in favor of the merger (News-Sun Sept. 9).

Both credit unions began operating as a division of MidFlorida on Sept. 1, but the conversion of accounts will take place later.  The Indian River conversion is tentative scheduled for late 2012 or early 2013, while the Bay Pines conversion is slated for early 2013.

In New York, the boards of directors of two Niagara-area credit unions announced that Niagara County's FCU, with assets of $47 million and 9,500 members, will merge with the $77million asset Niagara's Choice FCU, effective Dec. 1 (WNYPapers.com Sept. 8).  Niagara's Choice serves nearly 13,000 members.

Combined assets of the surviving credit union will exceed 120 million and membership will total nearly 23,000 members.

Nancy Kasprzak-Whitmore, CEO of Niagara County's FCU, said Niagara Choice will promote the merger with "Niagara County's FCU is now Niagara's Choice."

Alfred Frosolone, CEO of Niagara's Choice FCU, said all employees are expected to remain with the credit union.

Two Niagara County's board members will join the existing board of Niagara's Choice, and two members of Niagara County's supervisory committee will join the same committee at Niagara's Choice.

Southeastern CUs continue record growth in 2Q

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BIRMINGHAM, Ala., and TALLAHASSEE, Fla. (9/11/12)--The upward trend of assets and membership for credit unions in Alabama and Florida continued in the second quarter,  and credit unions in these states saw an uptick in member business lending as well, said the League of Southeastern Credit Unions (LSCU).

Credit unions in Florida added $310 million in assets to set a record of $45.6 billion in assets. Alabama credit unions added $129 million in assets, and they, too, set a record--at $17.6 billion in assets.

Combined, the two states added 46,000 new members during second quarter. But a closer look at that numbers tells a great story, said LSCU.  For the past four quarters, Florida credit unions have added 143,000 new members for a record 4.68 million members, while Alabama credit unions added 51,000 new members during the period for a record 1.81 million members.

"Since the third quarter of 2011, credit unions in Alabama and Florida have been growing at a strong rate that is higher than the national credit union average," said LSCU President/CEO Patrick La Pine.

He attributed the growth "to the overall awareness of credit unions being raised. Individual credit unions are doing a great job of promoting their brand, while the league's Statewide Image Campaign and the consumers' attitudes toward big banks have been contributing factors."

Credit unions worked more with small businesses in the second quarter by issuing more member business loans (MBL), said the league. In Alabama, MBLs jumped more than 4%, which was greater than the national credit union average and nearly double the growth rate during the past two years. In Florida, MBLs grew 3% in second quarter, right at the national credit union average, but three times higher than two years ago.

The Credit Union National Association and credit unions are urging Congress to raise credit unions' MBL cap to 27.5% of assets from the current 12.25%  to enable more business loans to be made to boost the economy. CUNA estimates that raising the cap would inject $13 billion in new small-business loans into the economy and help create 140,000 new jobs the first year. The increase would come at no expense to taxpayers.

Six CUs employ videos humor in marketing the difference

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MADISON, Wis. (9/11/12)--Several credit unions and banks have released videos that range from serious, to comical, to wacky, to get messages about their financial institutions out to the public.

The videos, including six from credit unions, are highlighted in an article featured in thefinancialbrand.com (Sept.9). Use the link.

The credit union videos included in the article are from:

  • First Tech FCU, with $5.47 billion assets, based in Palo Alto, Calif. It boasts about its blog and how it doesn't act like a typical financial institution because it listens to its members.
  • Hollywood, Calif.-based First Entertainment CU, with $971 million in assets. Its video features an actor in a skit with a live goat, which is used as a metaphor for pointless bank fees.
  • Alabama Telco CU, a $589.2 million asset credit union in Hoover, Ala. The credit union created a 30-second music video with lifestyle images, but no information about accounts, products or financial services--just a quick tagline, "Better Rates."
  • Winston-Salem, N.C.-based Allegacy FCU, which uses a 30-second video linking the $960 million asset credit union with a peaceful Sunday morning outdoors, and how it is unlike a bank.
  • IC FCU, based in Fitchburg, Mass., with $454 million in assets, which produced a two-and-a-half minute video with Claymation-style  figures and repeatedly bleeps out their expletives. The tagline is "Savings … it's not a dirty word."
  • Coast Central CU, a $965 million asset credit union based in Eureka, Calif., which highlights gun enthusiast Stephanie Casey, a loan processor with the credit union for 13 years who also is a target shooting expert. She makes analogies between her hobby and processing loans--quick and accurate.

Illinois foundation awards 28750 in new grants

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NAPERVILLE, Ill. (9/11/12)--The Illinois Credit Union Foundation has awarded $28,750 in Small Credit Union Development (SCUD), Community Service, and Marketing and Business Development grants, bringing the total awarded for the year to more than $74,300.

SCUD grants totaled $17,250 and were awarded to 10 credit unions. Purposes for the SCUD grants included computer hardware and software, equipment and upgrades, and other operational needs. The recipients were:

  • Alton & Southern Railroad Employees FCU, East St. Louis;
  • CSX Chicago Terminal CU, Calumet City;
  • D-B Employees CU, Johnston City;
  • Decatur Policemen CU, Decatur;
  • Flossmoor CU, Homewood;
  • Menard (Ill.) CU
  • Mercer CU, Aledo;
  • Peoria Fire Fighters CU, Peoria;
  • Peru Municipal CU, Peru; and
  • United Catholic CU, Granite City.
The foundation also awarded $3,000 in community service grants. The program encourages and rewards chapter or credit union participation in local community projects. Credit unions and chapters can qualify for grants by hosting, creating or volunteering at an event. Blackhawk Area CU, Savanna, will use its grant to facilitate the Bonzai financial education project, and Oak Lawn Municipal ECU, Oak Lawn, was a recipient for its "Stock the Pantries" project.

Community service grants were provided to the Carolinas Credit Union Foundation and the Southeastern Credit Union Foundation for children's hospital service projects in Charlotte, N.C., and Tampa, Fla., respectively to help support credit unions' tradition of honoring each national political convention city with a "leave-behind" project to serve the local communities long after the conventions have ended.

Also, three credit unions received Marketing and Business Development grants that totaled $8,500.  They were: Three Rivers Community CU, Mt. Carmel; Valley Bell CU, Elgin; and Western Illinois CU, Macomb. These grants help credit unions with assets of up to $30 million to start or expand outreach efforts. The maximum grant award is $5,000 per credit union per year. Requested uses for the grants included support for a membership outreach event, a plan to provide service to a new community charter area, and a website upgrade for a community charter expansion.

One more grant request deadline remains this year--on Oct. 31. Scholarships are reviewed on an ongoing basis while funds last. Online and downloadable grant request forms are available via the Illinois Credit Union League's website. Eligibility is limited to Illinois credit unions and chapters.

CUNA Councils at 5500 membership milestone

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MADISON, Wis. (9/11/12)--Membership in the six CUNA Councils has surpassed 5,500 members, the Credit Union National Association announced Monday.

"Reaching this milestone is significant," says Erin Mendez, Council Forum chair and

executive vice president/chief operating officer at SchoolsFirst FCU in Santa Ana, Calif. "The councils provide credit union executives with a unique and active community where they can reach out to one another, grow professionally, and obtain education and resources that are specific to their role at the credit union."

The CUNA Councils include six focused areas of credit union responsibility, including

Marketing & Business Development, Human Resources Training & Development, (CFO) chief financial officer, Lending, Technology, and Operations Sales & Service. At the councils, credit union executives tap into a network of senior and middle management peers to connect, learn, advise and advance the credit union, the council member's career, and the credit union movement.

Starting Monday, the councils will begin accepting memberships for 2013. Those who join on or after Monday will have an active membership for the remainder of 2012 and all of 2013 for one price.

CU System briefs (09/10/2012)

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  • NEW BERLIN, Wis. (9/11/12)--Landmark CU, based in New Berlin, Wis., has reached the $2 billion in assets milestone.  CEO Ron Kase attributed the growth to several factors. "We continue to execute on our brand promise, which is all about bringing consistent value and convenience to our members. We do this in the form of great rates on loans and deposits, a very favorable fee structure, and we continue to offer excellent service. We have also had the great fortune over the past three years to complete mergers with 10 area credit unions, which has allowed us to offer additional branches and convenience to our members throughout communities in Southeastern Wisconsin." At $2 billion, Landmark is the largest credit union in the state and among the top 100 credit unions in the U.S., based on asset size. IT has 489 employees serving more than 193,000 members at 25 locations …
  • FEDERAL WAY, Wash., and BEAVERTON, Ore. (9/11/12)--The Northwest Credit Union Association (NWCUA) has begun interviewing various Washington state and federal election candidates, including Washington Republican gubernatorial candidate Rob McKenna, shown here. He met with a group of about two dozen credit union advocates and indicated his support of the Washington State chartered credit union business and occupation (B&O) tax exemption and said he would work to resist sweeping of funds out of dedicated accounts into the state's general fund. He also expressed concern over the lack of economic literacy of teens and young adults (Anthem Recap Sept. 7).  NWCUA also scheduled interviews with seven other candidates for governor, state auditor, state attorney general, and Washington's lst Congressional District. (Photo provided by the Northwest Credit Union Association)…
  • FEDERAL WAY, Wash., and BEAVERTON, Ore. (9/11/12)--A five-alarm fire in North Portland early Sunday at a Red Lion hotel facility will not impact the Northwest Credit Union Association (NWCUA) 2012 Convention and Annual Business Meeting.  The fire destroyed a vacant building that was a former Red Lion hotel. It was being used as a storage facility for mattresses and furniture, said NWCUA (Anthem Recap Sept.7).  The convention is set for Oct. 2-4 at the Hilton Hotel in Vancouver, Wash. Because that hotel is fully booked, arrangements have been made for attendees at the Red Lion Hotel on the River in Portland, said the association.  Investigators still haven't determined the cost of the fire …

PCUA board OKs 160K to fund iBelong campaign

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HARRISBURG, Pa. (9/11/12)--The Pennsylvania Credit Union Association (PCUA) board of directors Friday authorized $160,000 from its service corporation, Pacul Services Inc., to fund new iBelong television commercials to be aired in 2013.

The new spots will focus on loans, based on PCUA member feedback that increased loan volume is a top priority, along with credit union awareness and the message that every Pennsylanvia resident can join a credit union (Life is a Highway Sept. 10). 

The iBelong campaign is a cooperative campaign coordinated by the PCUA with support from Pennsylvania credit unions designed to build awareness of credit unions and to assist consumers in finding a credit union .

iBelong spots will run in six of the seven major media markets in Pennsylvania.

Also, the PCUA's iBelong Tailgating Package promotion kicked off Monday in the Altoona/Johnstown and Berks/Lehigh Valley media markets.

The promotion runs for three weeks on WJAC-TV in Altoona/Johnstown, on WRFY's Y102 in Reading and on WAEB's B104 in Whitehall.

Members and potential members may enter a contest through the branches of participating iBelong credit unions, or online at the station's website. Each station's website will feature a listing of branch locations of participating credit unions and links to the credit unions' website.

Each station will draw one entry at random in early October. The winner will receive a pair of game day tickets to either a Philadelphia Eagles or Pittsburgh Steelers game, along with a travel grill, tailgating chair, grocery gift card, fan gear and iBelong logo wear.

Woman wins 10K grand prize in Michigan contest

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ISHPEMING, Mich. (9/11/12)--When Lynn Ylitalo, a member of Ishpeming (Mich.) Community FCU, clicked onto the credit union's website, her name was added to the more than 32,000 entries into Michigan's "Own Your Money" sweepstakes. Thursday she won the sweepstakes' $10,000 grand prize.

Lynn Ylitalo, grand prize winner of Michigan's $10,000 "Own Your Money" sweepstakes, celebrates with George Isola, general manager of Ishpeming Community FCU. (Photo provided by the Michigan Credit Union League)
"I was just doing my usual business on my credit union's website, when I saw the link to enter the sweepstakes, but I never actually thought I'd win," Ylitalo, 49, of Champion, Mich., said (Michigan Monitor Sept. 10). "With one child already in college, one about to begin college, and another not far behind, this prize is truly life changing. It means the world to be able to contribute to my children's education, and I owe it all to my credit union," she said.

"We were thrilled to find out one of our members was the big winner," said George Isola, general manager of the Ishpeming Community FCU. "I could do this every day--give out checks for $10,000."

The sweepstakes, which ran from May 14 to June 27, was part of the annual statewide campaign aimed at raising awareness about Michigan credit unions, said the Michigan Credit Union League. The campaign also launched the CU Link, the online portal for Michigan credit union information.

Members and non-members were invited to watch a video about credit unions to be entered into the drawing for the $10,000 grand prize. Many credit unions, including Ishpeming Community, also had direct links to the sweepstakes on their websites. In addition to the grand prize, more than a thousand instant prizes worth a total $20,000 were awarded.

Michigan credit unions recently awarded $700 to another member who was winner of the first of three promotions on the CU Link Facebook page. The current sweepstakes, "What would you do with $1,240?" runs through Sept. 23. The prize is $1,240. The sweepstakes highlights another benefit of credit union membership: lower auto loan rates, which can save members an average of $1,240 over the course of the loan.

Class project leads to CUs EcoMug work at WMU

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

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

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

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

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

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

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

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

Consumers No to apps sharing info yes to mobile banking

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

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

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

Key findings indicate that:

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

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

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

Other findings:

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

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

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

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

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

Utah CUs award 14K in grants to schools

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

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

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

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

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

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

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

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

Texas Trust names 16 students to youth council

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

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

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

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

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

IAmerican BankerI op-ed supports supplemental capital for CUs

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

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

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

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

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

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

To read the op-ed, use the link.

N.Y. young professionals have first meet-up

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

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

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

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

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

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

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

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

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

Fin. lit. Many members dont admit they need help

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

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

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

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

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

CU goes against the grain with in-house team

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

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

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

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

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

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

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

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

Judge NCUA vs. Goldman Sachs can proceed

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

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

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

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

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

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

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

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

CU System briefs (09/07/2012)

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

In the media CUs as shrewd choice more growth stats

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TULSA, Okla., DENVER, and DES MOINES, Iowa (9/7/12)--Newspapers in Oklahoma, Colorado and Iowa this week reinforced what credit unions and their members already know--that credit unions are a shrewd choice for today's consumer and that's why they have grown in assets, members, deposits and loans.

A reader of the Tulsa World asked "why do some people leave banks to join credit unions?"

"Rising fees and scandals have fueled consumer misgivings about banks, driving them to the alternative: credit unions," said the World in "Credit unions can be a shrewd choice."  It turned to the Credit Union National Association (CUNA), which explained credit unions gained 1.3 million members last year. "Their mission is to provide members with affordable financial services," said CUNA spokesman Pat Keefe in the article.

It noted recent customer satisfaction surveys have indicated credit unions provide superior service, leading to satisfied members and a customer satisfaction rating of 89%--seven points better than the banking industry average.

Bankrate.com explained in the article that credit unions' expanding fields of membership makes them more accessible and they have better "very competitive" interest rates and fewer strings attached to their accounts, with 72% of credit unions in Bankrate's checking survey requiring no minimum balances to avoid fees.

Two other articles, like several the week before, have picked up state statistics based on the National Credit Union Administration's recently released analysis of how well credit unions are doing state by state. 

The Denver Post and Denver Business Journal Online reported Colorado credit unions are near the top of the list for both year-to-year growth and for deposit growth, noting that the state has 9.2% in asset growth during first quarter and an 8.8% increase in deposit growth for that period.

An article in the Gazette.com (Sept. 5) also pointed out that Iowa's credit unions recorded a 9.7% year-over-year increase in lending during second quarter, with the state ranking No. 3 in loan growth nationally and No. 2 nationally with a 12.2% deposit growth increase. Iowa credit unions saw a 12.5% jump in asset growth for the quarter, over second quarter in 2011.

The Iowa article also noted national credit union statistics, including a 1.2% increase in business lending to $40.2 billion, according to NCUA statistics.

To read the articles, use the links.

CUs winning dismissals on overdraft suits

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MADISON, Wis. (9/7/12)--Credit unions have begun winning court dismissals on a variety of grounds in multiple, duplicative lawsuits that have been filed against financial institutions over overdraft policies and processes.

However, new cases continue to be filed in the cookie-cutter, class-action lawsuits, which claim financial institutions manipulate the posting order to beef up overdraft fees. The Credit Union National Association is monitoring the trend and urging credit unions to make sure they are in compliance with regulations related to their overdraft policies and disclosures of any fees.

Out of nine lawsuits brought this year against credit unions, three suits have been dismissed by the courts.  The U.S. District Court for the Northern District of California dismissed two cases on Tuesday against credit unions because they had not been served with the complaints.  In such cases, the judge rules that plaintiffs "voluntarily dismiss, without prejudice, their claims against all defendants" in the matter. Although the plaintiffs were different in these two cases, they were represented by the same attorney.

A third lawsuit was dismissed last spring after a credit union argued that the complaint should be arbitrated instead of litigated under the terms of the credit union's membership agreement, which the member had signed.

In a case before the U.S. District Court in Alabama, a credit union on Aug. 31 filed a motion seeking dismissal of a lawsuit. In its motion, the credit union made several arguments for dismissal that may be of interest to credit unions, even though part of the case is based on state law and would not apply to other jurisdictions.

Among the arguments the credit union presented:

  • The lawsuit is misdirected since it is the merchant, not the credit union, who places a hold on a transaction that can delay access to funds. Transactions are not received by the credit union for settlement in any particular order, and often are received days after the transaction.
  • Plaintiffs have authorized the credit union to post debits in any order in their member account agreement, which authorizes overdraft charges.
  • The standard posting practices "are not new--either to the banking industry or to the laws that regulate it. Indeed, the discretion of financial institutions to post transactions in the manner they do has been explicitly recognized for years under both federal and state laws," according to the court document.
  • Plaintiffs fail to cite regulations that criticize the hold processes, and the Uniform Commercial Code "explicitly provides credit unions wide discretion in determining the order in which they will post transactions" to members' accounts.
  • Agencies that oversee credit unions, including the Alabama Credit Union Administration, National Credit Union Administration and the Federal Reserve Board," have issued regulations and guidance relating to overdraft charges, but have not dictated any particular transaction processing order."
The motion seeking dismissal also argued that the plaintiffs have failed to state a claim upon which relief can be granted, that some of the claims for breach of contract are not recognized under Alabama law, and plaintiffs admit they can avoid overdrafts with minimal self-diligence.

Dozens of lawsuits have been filed across the country against banks, resulting in a number of multimillion-dollar settlements. It was only recently that credit unions became targets of lawsuits that used templates that were worded identically. Most of the lawsuits claim financial institutions charge excessive overdraft fees as a result of manipulative posting and transaction holding practices.

Survey Why consumers use small-dollar credit

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MADISON, Wis. (9/7/12)--A new study by the Center for Financial Services Innovation (CSFI) tries to find the reasons that so many consumers use small-dollar credit (SDC) products for quick access to cash.

In "A Complex Portrait: An Examination of Small-Dollar Credit Consumers," CSFI looks at who SDC consumers are, how they decide to use an SDC product, how they fare once they use product, and what they think about the product they use.

Credit unions that offer short-term loans as an alternative to payday lenders' high-interest loans can keep in mind that that the top three loan attributes that mattered most to SDC consumers surveyed were: having quick access to money, the ability to qualify for the loans, and clear terms that aren't obscured by contract jargon.

In addition to providing these three needs, credit unions also can provide financial counseling and savings plans that are related to loans that attract SDC consumers.

Some other key findings from the research:

  • An estimated 15 million consumers used at least one SDC product in the past year.
  • The average household income for an SDC consumer was $32,000, compared with $40,000 for non-SDC consumers. However, 20% of SDC consumers had an average household income between $50,000 and $75,000.
  • Twenty-seven percent of SDC consumers had a credit card, compared with 61% of non-SDC consumers.
  • The top three reasons for funds shortage included: living expenses consistently more than income, payment due before paycheck, and unexpected events such as emergency expenses or income decreases.
  • While 66% of SDC consumers had no savings, more than half of those that had savings chose not to use it all and relied on credit instead.
To download the full paper, use the link.

Prize-linked savings CUs at forefront

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MADISON, Wis. (9/7/12)--Credit unions in the U.S. have been at the forefront of creating prize-linked savings accounts for members, but now banks are looking to catch up with the product offering.

In February 2009, the Michigan Credit Union League launched the Save to Win program that focuses on how much money people save, in contrast to most reward-type programs based on how much people spend (News Now Feb. 11, 2009).

The pilot program in Michigan was supported by a partnership with the Filene Research Institute, the Doorways to Dreams (D2D) Fund, and the Michigan league. Save to Win has been championed by Harvard Business School Professor Peter Tufano, founder of the D2D Fund. The program is underwritten by a grant from the Center for Financial Services Innovation (CFSI).

For every $25 that goes into a certificate of deposit, a credit union member gets one chance at winning a weekly lottery and one entry for an annual grand prize of $100,000.

Credit unions in other states such as Nebraska and Washington have adopted the program.

The North Carolina Credit Union League intends to launch a Save to Win program in January in North Carolina (Triangle Business Journal Online Aug. 28).

Until now, banks have mostly been kept out of prize-linked savings offerings by federal and state gambling laws. However, legislation passed this spring in Maryland could be a template for expanding specialty savings accounts to banks nationwide (American Banker Sept. 5).

Two years ago, Maryland passed a law that would change state rules to allow savings account raffles. However, that law had an amendment that required federal law to be changed to allow banks to participate in such a program, the Banker said.

The attempts to alter federal law stalled, so Maryland legislators passed a new bill this spring that permits credit unions and banks to participate in prize-linked savings programs as long as the contests are designed as sweepstakes and not lotteries, the Banker said.

The Maryland law took effect June 1, and if the state's program is a success, it could pave the way for more banks to begin offering savings raffles more broadly under the sweepstakes model, said the Banker.

Brazils Sicredi CU execs in Texas

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SAN ANTONIO (9/7/12)--Eleven credit union executives from Sicredi, a financial cooperative group in Brazil, arrived in San Antonio this week to learn about U.S. credit unions, said the Texas Credit Union League (TCUL).

Eleven credit union executives from Sicredi, a financial cooperative group in Brazil, arrived in San Antonio this week to learn about U.S. credit unions in a key initiative of the World Council of Credit Unions' International Partnerships program between the Texas Credit Union League and Sicredi. (Photo provided by the Texas Credit Union League)
The group of mid- and upper-management staff participated in the experience--a key initiative of the World Council of Credit Unions' International Partnerships program between TCUL and Sicredi (LoneStar Leaguer Sept. 6).

In addition to attending TCUL's two San Antonio conferences, Marketing & Business Development Conference and Leadership Conference and Expo, the group on Tuesday visited with Security Service FCU and Generations FCU, both in San Antonio.

The Sicredi group will be divided into three groups on Monday, with one group going to Houston, another group to Dallas and a third to El Paso. During a two-week period, the group will shadow credit union staff to learn how credit unions operate in the U.S.

The SICREDI executives will focus learning in the areas of:

  • Savings products and services, including how the credit union attracts savings and what products are most popular;
  • Loan products and services, including discussion on department structure, manuals, policies and regulations;
  • Marketing, including the structure of the credit union's marketing department; the use of technology and delivery channels; and the use of social media, and its challenges, strengths, opportunities and threats;
  • Social responsibility and how the credit union demonstrates the credit union difference;
  • Political advocacy;
  • Technology; and
  • Risk management.
The Texas credit unions hosting the Sicredi delegates are:

  • Energy Capital CU, Houston;
  • Houston Police FCU;
  • PrimeWay FCU, Houston;
  • Texas Trust CU,  Mansfield;
  • Resource One CU, Dallas;
  • InTouch CU, Plano;
  • GECU, El Paso;
  • FirstLight FCU, El Paso; and
  • OneSource FCU, El Paso.
Sicredi is one the major cooperative systems in Latin America, serving members in 10 Brazilian states.

Chicago CU offers RxSavings card

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CHICAGO (9/7/12)--North Side Community FCU, Chicago, is partnering with CVS-CareMark to offer a prescription discount card to members.

The North Side Community FCU RxSavingsPlus Discount Card requires no forms and or enrollment fee. North Side Community FCU members can print the cards from the credit union's website.

Average savings are 22% of the prescription filled, and 99% of prescriptions filled by CVS are covered by the card, North Side Community FCU said (North Side Community News and Events for September Sept. 5).

The card is accepted by more than 60,000 participating pharmacies nationwide, including CVS, Walgreens, Walmart and Costco.

CU System briefs (09/06/2012)

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  • ST. HELENS, Ore. (9/7/12)--Members of St. Helens (Ore.) Community FCU voted down an effort to recall five of its seven board members during a special meeting Tuesday. More than 175 members attended the meeting. In all 1,431 ballots were received and none of the board was recalled. The initiative occurred after the board had proposed a merger with another credit union. The proposal was later withdrawn. "The membership showed strong support of the board and voted against the recall initiative. In accordance with our bylaws, we gave a fair hearing to a small group of members who launched this petition," said President/CEO Brooke Van Vleet in the credit union's press release. "We are thankful that the majority chose to show appreciation for this dedicated group of volunteer board members who were elected to serve the membership. The board and senior management team are looking forward to advancing the strategic priorities of the credit union and developing a clear roadmap for 2013 and beyond." …
  • JERSEY CITY, N.J. (9/7/12)--Stanley Powell of Jersey City, N.J., has been sentenced to 12.5 years in prison and three years of supervised release after pleading guilty to one count of bank robbery. Powell allegedly robbed Liberty Savings FCU, Jersey City, N.J., $69 million in assets, in November 2010 (Nj.com and The Jersey Journal Sept. 5).  Powell reportedly left the credit union with $20,000 in cash, and was arrested near a relative's home in Jersey City …
  • LANSING, Mich.  (9/7/12)--Wyandotte (Mich.) FCU plans to change its name to Nu Path Community CU, effective on Jan. 2, according to the Michigan Credit Union League (Michigan Monitor Sept. 4). At that time, the $90 million asset credit union also will convert from a federal charter to a state charter. The credit union chose the name so it will stand apart from other local credit unions and to illustrate its dedication to guiding members on a path to financial success. It realized that certain sectors of its communities were underserved and it could not reach its full potential with a federal charter. The credit union said. Its expanded charter will allow it to serve anyone living, working, worshipping or attending school in Wayne, Monroe, Allegan, Ottawa and Kent counties, or anyone in its more than 100 select employee groups, churches and business associations …
  • HARRISBURG, Pa. (9/7/12)--U.S. Rep. Lou Barletta (R-Pa.) stopped by the headquarters of the Pennsylvania Credit Union Association (PCUA) Wednesday morning to meet with credit unions leaders from PCUA, Hershey FCU and Pennsylvania State Employees CU (PSECU). He was greeted by PCUA President/CEO Jim McCormack, who said PCUA will be following up with the congressman on the association's initiatives. Pictured from left are PCUA staffers Corinne Sherman and John Kilduff; Nate Muniz and Greg Smith of PSECU; Barletta; PCUA's Rick Wargo; and Paul Wagner of Hershey FCU. Barletta told the group he is sensitive to the impact small businesses make in their communities and has a desire to help them grow and succeed.  Credit unions play a very important role in providing financial services to their members, Barletta said.  He and his staff also toured PSECU. (Photo provided by the Pennsylvania Credit Union Association) …
  • LANSING, Mich. (9/7/12)--The Michigan Credit Union League (MCUL) & Affiliates has endorsed incumbent U.S. House member Gary Peters (D) and candidate Kerry Bentivolio (R) ahead of this November's general elections. Bentivolio will face David Curson (D) for the right to replace former congressman Thaddeus McCotter, who left office earlier this year. MCUL CEO David Adams said the league is "proud to support candidates committed to working with local credit unions and who support our priority of serving local communities and helping small businesses get access to much-needed credit and capital that can help them grow and create jobs." …

Lansing CUs league host Hondurans

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LANSING, Mich. (9/7/12)--Four Lansing, Mich.-area credit unions last week hosted representatives from a Honduran credit union as part of an exchange program sponsored by the World Council of Credit Unions (WOCCU) and the Michigan Credit Union League (MCUL).

A group from Educators CU of Honduras recently visited four Michigan credit unions as part of a cultural and industry exchange program sponsored by the World Council of Credit Unions and the Michigan Credit Union League. Here, the visitors are at the Michigan State Capitol.
Representatives from the Educators CU of Honduras met with Lansing Automakers FCU, CASE CU, Lake Trust CU, and Michigan State University FCU (Michigan Monitor Sept. 4).

Educators CU of Honduras was founded in 1971 by a group of teachers seeking access to financial services. The credit union now serves roughly 63,000 educators across Honduras, including members in 10 of the country's 18 states, with 12 points of service and one mobile branch.

With the help of an interpreter, the Michigan hosts explained the roles of technology, board governance and culture in daily U.S. operations. The Michigan credit unions also described the features and benefits of their products and services, and discussed how they work to retain and attract members.

Representatives from Educators CU of Honduras learn about board governance at Lansing (Mich.) Automakers FCU. (Photos provided by the Michigan Credit Union League).
The group also spent a day in the Lansing office of MCUL, meeting with staff to learn about the state trade association's role in advocacy, communication and education.

Lansing Automakers FCU hosted a reception in honor of the Honduran group at Lansing's R.E. Olds Transportation Museum. There, Lansing Mayor Virg Bernero presented the visitors with an official proclamation naming Aug. 27 "Educators Credit Union of Honduras Day" in Lansing.

The group also toured the State Capitol and General Motors' Grand River plant in Lansing.

Minn. Maxwell Herring Desjardins winners named

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ST. PAUL, Minn. (9/712)--The Minnesota Credit Union Network recently announced the winners of the 2012 Dora Maxwell, Louise Herring and Desjardins statewide competitions.

The Dora Maxwell Social Responsibility Recognition Award Program honors credit unions for their involvement in community projects and activities. Dora Maxwell Award first-place winners include:

  • Minnesota Valley FCU, Mankato, $50 million to $100 million in assets;                 
  • Greater Minnesota CU, Mora, $100 million to $200 million;            
  • City & County CU, St. Paul, $200 million to $500 million; and                   
  • Hiway FCU, St. Paul, $500 million to $1 billion.      
The Louise Herring Philosophy-in-Action Member Service Award honors credit unions for their practical application of the people-helping-people philosophy. The Louise Herring Award first-place winners include:

  • Star Choice CU, Minneapolis, less than $50 million;                        
  • First Alliance CU, Rochester, $50 million to $250 million; and        
  • TopLine FCU, Maple Grove, $250 million to $1 billion.
The Desjardins Youth/Adult Financial Education Award recognizes leadership within the credit union movement on behalf of youth/adult financial literacy. The Desjardins Youth Financial Education Award first-place winners include:

  • United Educators CU, Apple Valley, $50 million to $150 million; and
  • TopLine FCU, $150 million to $500 million.
The Desjardins Adult Financial Education Award first-place winners include:

  • Greater Minnesota CU, $50 million to $150 million; and                 
  • TopLine FCU, $150 million to $500 million.
Honorees will compete with other credit unions for national-level awards presented by the Credit Union National Association.

Georgia CUs help consumers afford life in todays economy

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DULUTH, Ga. (9/6/12)--One of the main goals for credit unions is to provide practical help to members for the challenge of affording life, according to a credit union in Georgia, responding to data from the Georgia Credit Union Affiliates' (GCUA) 2012 Mid-Year Consumer Poll.

The poll found that 32% of those surveyed believe Georgia's economy is worse than it was a year ago. Of the respondents, 66.5% said they are living paycheck to paycheck--up from 59.8% who said so in 2011. What's more, 12.2% said they could survive just three to six months on their current savings if they lost their job. That's down from 14% last year, said GCUA.

Searching for better value on everything from groceries to financial services has led Georgians to credit unions. Credit unions in the state grew 3.3% in 2011 and 2.1% in first quarter of 2012, GCUA said, citing its most recent Member Benefits Index study.

Most people have been affected in some way by the challenge of affording life, according to Carol Wolfe, vice president of member services at DOCO CU, Albany.  She told GCUA that as things have become more expensive, people have had to cut luxuries.  "Before we got what we wanted. Now we get what we need," she said.

She noted that one of the main goals is to provide practical help to members. As part of the REAL Deal initiative, DOCO, like many Georgia credit unions, has designed products and programs for this purpose.

"We see the need for dependable transportation as one of the biggest priorities for our members," Wolfe told GCUA.  "In response to this need, we developed a fresh start auto loan for people with credit issues."

DOCO also offers fresh start checking accounts and small loans with very low application fees for emergencies. "Lots of people don't qualify for a bank loan," Wolfe said. "We look at each situation on an individual basis. We don't believe you should have to prove you don't need the money before you can be approved for a loan."

Koloa members to vote on merger with Garden Island

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KOLOA, Hawaii (9/6/12)--Members of Koloa (Hawaii) FCU are voting this week on whether to merge their credit union with Lihue, Hawaii-based Garden Island FCU.

Koloa has $17.1 million in assets and 2,716 members, while Garden Island has $72 million in assets and 5,758 members.

About 25 members of Koloa FCU attended a meeting Aug. 29 with staff and board members.  Koloa FCU's interim manager, Ralph Fujinaka, has retired, and members were told the credit union doesn't have enough funds to hire a full-time replacement as required by regulations (The Garden Island Sept. 3).

If the merger is approved, Koloa would become the Koloa branch of Garden Island (Pacific Business News Online Sept. 4).

Data Michigan CUs create jobs support biz

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LANSING, Mich. (9/6/12)--Michigan credit unions have seen some of the largest increases in hiring and business lending in recent years while continuing to serve an increasing membership and contribute to the state's economic turnaround, according to second quarter data released by the National Credit Union Administration (NCUA).

The Michigan Credit Union League (MCUL) & Affiliates says NCUA's data show that full-time employment at the state's credit unions increased 1.2% for second quarter--the best quarterly increase in four years. During the past year, full-time employment at credit unions rose 3.3%, compared with 2.1% nationally. Full-time employment at Michigan credit unions has increased for five consecutive quarters, said the league.

"Michigan credit unions are not only proud to provide outstanding services and products that help people and businesses save more and own their money. We're also proud that we can help put people back to work in good jobs and be part of the solution to today's economic issues," said David Adams, MCUL  CEO. "Michigan's economy is slowly coming back in several sectors, and we're pleased that our credit unions also put out the 'now hiring' sign. When people have jobs, they spend locally and that benefits our entire community."

Nearly one-third of Michigan credit unions added new full-time employees in the past year. For example, hiring at Clinton Township-based Michigan Schools & Government CU (MSGCU) rose 29%, and the number of year-to-date hires is double the pace of 2011, said MCUL.

"With more than 8,000 applicants vying for open positions at our credit union this year, the response to our job postings is quite frankly overwhelming," said MSGCU CEO Peter Gates. "Our credit union plays a central role in our community and that means doing everything we can to support the families and businesses we serve, including hiring locally and creating jobs."

The hiring trend is in part the result of growing membership. Michigan credit unions added 12,000 new members during second quarter and more than 74,000 members in the past 12 months.  More than 4.5 million Michigan residents--half the state's population--are credit union members.

Credit unions also supply much-needed capital to small businesses. The number of Michigan credit unions offering business loans is up 6.8% in second quarter, with nine new credit unions now offering these loans.  Today, 46% of Michigan credit unions offer business loans, compared with 27% nationally.  Member business loans (MBL) increased 4.2%, compared with 1.7% nationally, during the quarter. During the past 12 months, MBLs rose 13.6%, compared with 8.2% nationally.

The league noted that an arbitrary cap on credit union MBLs "threatens to limit the critical access to capital that will help the economy recover and grow."  The Credit Union National Association, the leagues, and credit unions have said that raising the MBL cap to 27.5% of assets (from the current 12.25%) would stimulate the economy by injecting $13 billion in new small business loans and helping create 140,000 new jobs the first year, without costing taxpayers a dime.

Meanwhile, Michigan credit unions continue to find ways to support small businesses. Last month, after nearly a year of advocacy efforts by the league on behalf of Michigan's credit unions, the Michigan Commissioner of Financial and Insurance Regulation singed an order authorizing credit union service organizations to provide small business equity investments to Michigan credit unions and their members.

"This unprecedented opportunity for credit unions has tremendous potential and is further evidence of our commitment to supporting  small businesses and contributing to the economic turnaround," Adams said.

CU System briefs (09/05/2012)

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  • PHILADELPHIA (9/6/12)--Ignacio "Nacho" Morales, 49, former manager of the now defunct Borinquen FCU in North Philadelphia, has pleaded guilty in a U.S. District Court  in Philadelphia to conspiracy, embezzlement, money laundering, and tax and drug charges (The Philadelphia Inquirer Sept. 5). The charges relate to a $2.3 million embezzlement which led to the credit union's collapse last year. The credit union had served North Philadelphia's Hispanic community for decades and had 7,000 members at the time it was shuttered by the National Credit Union Administration.  More than $5 million was missing, said the article. From 2006 to 2011, Morales allegedly cashed hundreds of tax-refund checks issued for fraudulent tax returns and kept 20% of the refund. From 2008 to 2011 he allegedly collected about $50,000 a month in kickbacks from one person who dropped off illegal refund checks each week from people who were not members of the credit union. He also was accused of taking $600,000 in cash from the credit union to buy real estate and bilking $700,000 from an organization that deposited $1.7 million in the credit union. Morales is cooperating with authorities investigating others' roles in the fraud. He faces 10 years in prison but could receive a shorter sentence based on cooperation with investigators, said attorneys in the case …
  • DEARBORN, Mich. (9/6/12)--An armed, 46-year old credit union robbery suspect was chased by police and arrested after crashing his alleged get-away vehicle into a Garden City, Mich., house (Detroit Free Press Sept. 4). The man, a resident of Dearborn, allegedly entered a branch of the $3.3 billion asset DFCU Financial CU, Dearborn, Tuesday. The robber, who wore a mask and brandished a rifle, demanded cash from credit union employees. The man was followed by police and allegedly fired a shot after crashing the car into a neighborhood home. No one was in the residence, and no officers were hit by the shot. The unidentified suspect, who was then taken to a hospital after complaining of chest pains, said he would have fired more than one shot if his gun had not jammed …
  • LYNN, Mass. (9/6/12)--A judge set bail at $15,000 for a man who turned himself in after he allegedly robbed Salem, Mass.-based St. Jean's CU Lynn branch, to pay of a drug debt. David Morrissey was charged with intimidation to steal from a depository institution and armed robbery after allegedly passing a note to a teller demanding "big bills, no dye pack, bait money, GPS alarm after I leave," according to the Detroit Free Press (Sept. 4). The note said the man was armed and also had an "HIV/AIDS needle. The teller handed Morrissey $5,460 in cash. Morrissey then fled in a black pick-up truck with a yellow plow. After turning himself in, Morrissey told police a drug dealer had been threatening his family over a debt he owed …
  • ONTARIO, Calif. (9/6/12)--The California and Nevada Credit Union Leagues recently earned a 2012 International Association of Business Communicators Pacific Plains Region Silver Quill Award for a 2011 annual meeting and convention marketing campaign. The campaign, whose theme was "Turning Point," earned an Award of Merit. Of the 36 Silver Quills awarded this year, 13 were Awards of Excellence, the top recognition given, and 23 were Awards of Merit. The region award competition included participation from more than 6,000 business communicators throughout the region. The campaign's primary objective was to increase the percentage of attendees at the leagues' annual meeting and convention in November in San Diego. The campaign also was designed to foster high participation. It encouraged members to "Find Your Turning Point" by attending the convention, and positioned it as an essential event for credit unions dealing with major changes in the industry. The conference saw an 11% increase in attendance from the 2010 event …

Woods re-elected chairman of First Carolina Corporate

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GREENSBORO, N.C. (9/6/12)--Scott Woods, president/CEO of South Carolina FCU, has been re-elected chairman of the board of directors for the First Carolina Corporate CU in Greensboro, N.C.

First Carolina Corporate serves more than 170 member credit unions in both states and operates with $1.5 billion dollars in assets, said a press release from South Carolina FCU.  

Woods serves on the boards for the Palmetto Cooperative Services LLC, the South Carolina ACH Association and Indirect Lending Services LLC. Woods also serves on the Community Investment Council of the Federal Reserve Bank of Richmond and the Governmental Affairs Conference Committee for the Credit Union National Association.

Woods has been president/CEO of South Carolina FCU since 2004. Prior to accepting this role, he served as chief financial officer of South Carolina FCU.  

Other officers elected at the corporate were:

  • Vice chair--Scott Weaver, president/CEO, Carolina Foothills FCU, Spartanburg, S.C.;
  • Secretary--Randy Crawford, president/CEO, WNC Community CU, Waynesville, N.C.; and
  • Treasurer--Jack Braswell, Members CU, president/CEO, Winston Salem, N.C.

Mississippi makes strides with fin counseling program

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MADISON, Wis. (9/6/12)--REAL Solutions' enhanced version of the Credit Union Financial Counseling Certification Program (FiCEP) has helped place 59 CU financial counselors in 17 Mississippi credit unions after 18 months of work and implementing two programs.

Before that, there was only one certified financial counselor in Mississippi credit unions.

The program is a partnership among the National Credit Union Foundation (NCUF)/REAL Solutions, Credit Union National Association's (CUNA) Center for Professional Development (CPD), the Mississippi Credit Union Association (MSCUA), and Mississippi credit unions to train staff who then provide professional financial counseling and education to members and potential members throughout the state, NCUF said.

MSCUA has marketed the program to credit unions and proctored all student exams. Tom McWilliams, MSCUA senior vice president, has led efforts to recruit students and to coordinate the proctored testing.

"Our graduates have emerged from the program with renewed enthusiasm, and new-found knowledge and skills to implement in their own credit unions. Our high FiCEP participation and graduation rates are an inspiration and a testimony to the commitment Mississippi credit unions share to be a partner in their members' financial future and success," said Charles Elliott, MSCUA president/CEO, noting that McWilliams has made Mississippi's success "a model for other states."   

Students used the CUNA CPD's FiCEP to study for their Credit Union Certified Financial Counselor certification. CUNA staff graded tests and issued certificates. Mark Lynch, REAL Solutions field coach, conducted eight tutorial webinars and two face-to-face training days during each of Mississippi's two programs.

Late last year, MSCUA released a short YouTube video highlighting FiCEP.  Use the link.

Hurricane tally Two dozen La. Miss. CUs with minor losses

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MADISON, Wis. (9/6/12)--Credit unions in Mississippi and Louisiana were nearly back in full operation in their recovery from Hurricane Isaac.

About two dozen credit unions--roughly 12 each in Louisiana and Mississippi--had reported damages from Isaac.

All credit unions in Mississippi were back in operation on Friday, according to the Mississippi Credit Union Association.

Of the roughly dozen credit unions that sustained damages in Louisiana, all but one were back in operation Wednesday, Connie Major, Louisiana Credit Union League executive vice president, told News Now.

Power at Louisiana league offices was restored in Harahan, La., was restored late Monday night. allowing staff to return to normal business hours on Tuesday, said the league (eNews Sept. 5).

"We made plans on Sunday (Aug. 26) to move a member of our management team to North Louisiana, away from the projected path of Isaac," Anne Cochran, league president/CEO said in the newsletter.

Immediately after the storm, the league contacted Louisiana-based and credit union trade media informing credit union members about the availability of shared branching outlets across the state and nation, Cochran said.

CUNA Mutual Group also reported no further damages had been reported Wednesday by its policy holders.

State Farm Insurance reported it received more than 16,780 claims in Louisiana and Mississippi, with more than 15,000 coming from Louisiana, primarily property claims and more than 3,500 auto claims, according to propertycasualty360.com (Sept. 5).

The Louisiana Citizens Property Insurance Company Corp. said has received about 6,000 claims, of which 326 are commercial.

Louisiana Insurance Commissioner Jim Donelon said the department is getting calls from consumers--primarily questions about coverage and reporting claims--"but frankly, they are not ringing off the hook."

Filene report outlines eight i3 ideas

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MADISON (9/6/12)--The Filene Research Institute has released eight concepts devised by its i3 (Ideas, Innovation, Implementation) team in a new report.

The ideas, described in Filene's just-released "Key Findings: Blueprints for Innovation" report, are designed to solve pressing consumer and credit union problems, Filene said.

The eight ideas include:

  1. The Working Together Mortgage--A mortgage product that helps a first-time homebuyer obtain an 80/20 mortgage without having to have 20% cash for the down payment. It uses the equity from a relative's home pledged as part of the down payment.
  1. Pick a Dream--A consumer loan connected to a bonus savings account. Linking existing borrowing needs to savings gives members a convenient method to plan for the future while paying down debt.
  1. CU Pocket Banker--A smartphone application that members can use to contact and receive service from their credit union. The app provides members with a single point of contact, along with all the other features they expect through mobile banking, eliminating the need for multiple methods of accessibility.
  1. Cover Me--Text messages that notify a member when an item has been presented that will overdraw their account. Using existing technology, the text message gives the member the opportunity to authorize a transfer of funds from an external source to cover the presented item.
  1. The Retirement Positioning System--An interactive tool that helps members navigate complex investment rules, create budgets and consider alternative scenarios for planning and maintaining their income through retirement. Members enroll through an online portal and sit down with a financial expert, who goes through the member's income sources and expenses and sets up a portal.
  1. The Smarter Gift Card--A way to give recipients a starter savings account at a credit union and access to financial services they can use for years to come--the opposite of what a traditional gift card provides.
  1. The Student Loan with Benefits--A student loan that supports the student in finding employment and a career in their field.
  1. Flash Note--A mobile payment platform that the credit union member activates through a smartphone. The member selects the payment type, and a two-dimensional quick-reference (QR) barcode is rendered. The member presents the device at a participating merchant, who scans it using its existing infrastructure. The QR code becomes invalid immediately after use, and the transaction is placed in the member's online account history.
The open-source ideas are free to be used by credit unions, Filene said in the report. Each concept is scalable, but further testing is needed, Filene said.

CUs ATM doles out 50s instead of 20s

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GRAND RAPIDS, Mich. (9/6/12)--Under the premise that nothing makes an impression like free money, Credit Union One, Grand Rapids, Mich., recently promoted  the opening of an new branch by giving some lucky consumers more money than they requested at the branch's ATM.

During July, random consumers who used the machine at the new Grand Rapids branch received a $50 bill instead of a $20 bill. About $2,000 was doled out to lucky recipients.

Many of the recipients visited the branch to report that they had received too much money, but they were excited when they learned the additional funds were a "thank you" for their patronage, Sharon Blower, Credit Union One branch manager, told the Michigan Credit Union League (Michigan Monitor Sept. 4).

Other promotional efforts included e-mail blasts, online banking notifications, flyers and Facebook promotions.

The credit union posted photos of recipients on its Facebook page during the promotion.

CU receives 40K grant from San Francisco FHLB

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SAN FRANCISCO (9/6/12)--An initiative by a San Diego, Calif.-based credit union is among 30 projects to receive an aggregate $1 million in grants through an Access to Housing and Economic Assistance for Development (AHEAD) program from the Federal Home Loan Bank (FHLB) of San Francisco.

University & State Employees (USE) CU was granted $40,000 for its Planting Justice: Re-entry Green Jobs Program in Oakland, Calif. The economic development program will train and employ men who were formerly incarcerated at San Quentin State Prison to build and maintain sustainable edible gardens. The program expects to create 50 edible community gardens at the homes of both full-paying clients and subsidized low-income households throughout the San Francisco Bay area.

The grant will subsidize wages for program participants and help pay costs for developing a training curriculum, purchasing tools and a truck, and advertising and outreach. Integrating a living-wage re-entry green jobs program with in-prison rehabilitation is expected to reduce recidivism, promote human rights and create healthier communities, said the FHLB.

The grants, which are made through the bank's member financial institutions, will be used by nonprofit organizations in Arizona, California and Nevada for projects and programs fostering economic development and promoting community stability and self-sufficiency.

This year, more than 184 projects applied for more than $8 million in AHEAD funding.

Perimeter Most malware attacks originate in U.S.

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MILFORD, Conn. (9/5/12)--A report from CUNA Strategic Services provider Perimeter E-Security puts the kibosh on the commonly held belief that most malicious software, or malware, attacks come from overseas.

During the first six months of 2012, more than half (55.6%) of  all attacks and security threats originated in the U.S., said the report from the Milford, Conn.-based company, which provides security services to credit unions and other financial institutions.

The report indicates that the number of security incidents among its 861 financial institution clients increased steadily from January to May, with a slight decline recorded in June. During the reporting period, 1,619 likely and confirmed compromises were found, with about 56% of Perimeter's clients reporting at least one security incident. Perimeter E-Security suggested that the attacks and threats are more likely to take place in spring, rather than winter (American Banker Sept. 4)

The report attributed two reasons for the trend in U.S. generated threats: Most of its clients block traffic to and from non-U.S. internet service providers, and nearly all the financial institutions under scrutiny are based in the U.S.

Most of the security threats involved Trojan-related malware infections.

Perimeter E-Security and CSS will conduct a webinar Sept. 18 on E-mail Security and Credit Unions: The Ins and Outs of E-mail Encryption. For more information, use the link.

Survey In 20 years half of todays CUs may disappear

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WASHINGTON (9/5/12)--What will the credit union movement look like in 20 years? According to one analysis of growth trends over the past five years, the credit unions of 2032 could look "remarkably different" than today, with half of today's credit unions disappearing.

A review of asset, member and branch trends in credit unions from 2007 through 2012 points to a massive shift with serious strategic implications, according to marketing strategy specialists at TheFinancialBrand.com (Sept. 4). The site specializes in marketing strategies for banks and credit unions.

Among the trends it noted in its credit union outlook from the past five years:

  • Asset growth. Credit union assets have increased to more than $1 trillion today from nearly $761 billion in 2007.  Today, 194 credit unions having more than $1 billion in assets, up 57% from 123 in 2007.  The top 100 asset credit unions have 38% of all assets in the industry as of 2012.
  • Number of credit unions. Credit unions' numbers have dropped 14% since 2007. Then, 8,332 credit unions existed, with 85% of those having less than $100 million in assets. In 2012, there are 7,165 credit unions, with 79.6% having assets totaling less than $100 million. The industry is losing about 20 credit unions per month, the site said.
  • Branches.  In 2012, for the first time ever, the number of branches declined, with 27 fewer than last year, said the study.  In 2007, credit union branches totaled 20,694, compared with 21,406 in 2012. Last year, credit unions had 21,433 branches.  Although branch growth is generally flat, the top 100 asset credit unions added 552 of the 712 new branches reported in the past five years.
  • Membership.  Membership in credit unions rose to 93.7 million in 2012 from 88.5 million in 2007, or 5.87% over five years. The top 100 asset credit unions in 2012 added 1.3 million new members, or 84.4% of all new members in the entire credit union industry.  The membership gains at the top 100 are offset for the most part by collective membership losses realized by the rest, said FinancialBrand.com.
  • Small credit unions. Credit unions with less than $100 million in assets have lost $5 billion in assets and nearly six million members the past five years. Today 80% of all credit unions are in this asset category, down from 85% five years ago.
What do these trends say for the future? The site says if growth continues, there would be 1,218 credit unions in 2032 with assets of $1 billion or more--or 31.3% of all credit unions compared with today's 2.7%. It also predicts the industry's assets would double to $2.2 trillion if the 4% annual growth rate continues and that membership growth will continue to be the biggest challenge credit unions face.

To view the report, use the link.

Hudson Valley hearing held on mortgage recording tax

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ALBANY, N.Y. (9/5/12)--Oral arguments in Hudson Valley FCU's legal challenge against New York state's mortgage recording tax  (MRT) were made Tuesday before the Court of Appeals of the State of New York--the state's highest court.

Attending the hearing on behalf of the Credit Union National Association (CUNA) and the Credit Union Association of New York (CUANY) were CUANY President/CEO William Mellin, CUANY General Counsel Mike Lanotte and CUANY Associate General Counsel Henry Meier.

Eli Mattioli, a partner in K&L Gates LLP, a law firm representing the Poughkeepsie, N.Y.-based credit union, emphasized before the court that the language of the Federal Credit Union Act and Supreme Court precedent exempt federal credit unions from paying the mortgage recording tax.  

CUNA, CUANY, the National Association of Federal Credit Unions, and the Justice Department filed amicus briefs in support of Hudson Valley.

A lower court had ruled that the credit union was not exempt from paying the MRT and the credit union appealed.

The state stuck to its argument that New York state law is not a property tax and therefore is not a tax that's forbidden by the Federal Credit Union Act, Meier told News Now.

The court has 30 to 60 days to render its decision in the appeal, said Meier. A summary of the case is live on the court's website. Use the link and scroll to Hudson Valley FCU v. New York State Department of Taxation and Finance.

Also, a webcast of the arguments will be made available on the court's oral argument archives on its website after next Monday. Use the link, then access "oral argument review" under "Live Oral Arguments Webcast" to the right of the home page.

Trunzo new president of CUNA Mutual subsidiary

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MADISON, Wis. (9/5/12)--Robert N. Trunzo has been promoted to president of CMFG Life Insurance Co. at CUNA Mutual Group, a role in which he is responsible for the products, distribution and service of the company's U.S. credit union businesses as well as its 401(k) business.

UNA Mutual Group's Asset Accumulation and Retirement Services businesses, along with the company's Information Technology area, now report to Trunzo. With this promotion, Trunzo is responsible for nearly 3,000 of the company's 4,500 employees and about $2 billion of CUNA Mutual Group's annual revenues.

His promotion follows a board of directors meeting in which the board sought to create a more effective, efficient and aligned organization after the departure last month of former Executive Vice President Kenn LaLonde, who left to become chief executive of another company. 

"Since joining the company in 2005, Bob has built a strong leadership team and improved the products and services we deliver to credit unions and their members," said Jeff Post, president/CEO of CUNA Mutual Holding Co., the parent of CMFG Life. "Bob is well-suited to take on additional responsibilities to help us continue this momentum in our core businesses."

Trunzo continues to report to Post. As part of the organizational change, Mike Connealy, president/CEO of ProAg, CUNA Mutual Group's crop insurance subsidiary, now reports to Post as well.

Trunzo's priorities are focused on the top three needs identified by credit unions: Lending, compliance and income.

"The credit union system has momentum. Member growth, improving [return on assets] and stronger capital have created a growing sense the system has weathered the economic storm," Trunzo said. "The focus of the credit union business at CUNA Mutual Group is to help continue this momentum and prove to consumers that switching to a credit union was the right decision."

Under Trunzo's leadership, the company has added and expanded programs to support credit union lending, including the development of Smartphone Loans. In 2012, CUNA Mutual Group is on pace to generate more than $1 billion in loan volume for credit unions.

Also, the company is expanding its consumer business to help credit unions grow income and membership under the newly launched TruStage  brand, with which CUNA Mutual Group aims to grow its consumer insurance and investment business by expanding its awareness with the more than 95 million credit union members. The new brand also seeks to introduce non-members to credit unions.

Trunzo has held a variety of public and private sector leadership positions during his career. Previously at CUNA Mutual Group, he was executive vice president and chief operating officer.

He joined the company in 2005 after serving in a variety of insurance leadership roles. He also served as Secretary of Commerce under former Wisconsin Gov. and current U.S. Senate candidate Tommy Thompson. In addition, Trunzo served as chairman of Southeast Wisconsin Professional Baseball Park District, the board which oversaw the design, financing and construction of Miller Park, home of the Milwaukee Brewers.

CU System briefs (09/04/2012)

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  • HARRISBURG, Pa. (9/5/12)--Leaders from three Pittsburgh area credit unions attended a meet and greet hosted by WEST-AIRCOMM FCU at its Moon Township branch for State Senate candidate D. Raja, a Republican candidate for the 37th District. Leaders from WEST-AIRCOMM FCU, Pittsburgh Central FCU and PA HealthCare CU discussed credit union issues with Raja, an entrepreneur who is supportive of credit union lending to small businesses, said the Pennsylvania Credit Union Association (Life is a Highway Aug. 29). Raja also said he favored the continued tax exempt status of credit unions. He faces State Rep. Matt Smith in November. From left are:  Lynn Stephenson, vice president of lending at WEST-AIRCOMM; Paul Fero, CEO, PA HealthCare CU; Patty Morrissey, CEO, Pittsburgh Centeral FCU; Ray Brunner, CEO, WEST-AIRCOMM; Raja; and WEST_AIRCOMM staffer Vice President Margie Ruffalo, Moon Branch ManagerJoanne Lindner and Beaver Branch Manager Scott Brunner. (Photo provided by the Pennsylvania Credit Union Association) …
  • WASHINGTON and MADISON, Wis. (9/5/12)--Susan Parisi has been promoted to senior vice president and associate general counsel of the Credit Union National Association (CUNA), announced CUNA General Counsel Eric Richard. Parisi had been vice president and associate general counsel in charge of Legal-Madison. She has been with CUNA for 25 years and took the reins of the Madison, Wis., legal office last year …

Top 10 INews NowI stories for August (09/04/2012)

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MADISON, Wis. (9/5/12)--A story about how consumers were moving money out of banks and into credit unions long before Occupy Wall Street protests and Bank Transfer Day was the most read News Now article in August.

The top 10 articles in August included:

10. New E-Scan highlights top 10 trends for CUs

MADISON, Wis. (8/3/12)--The Credit Union National Association has released its 2012-2013 Credit Union Environmental Scan, a high-level view of the credit union competitive landscape that credit unions can use as strategic planning tool.

9. Bank fees survey: Fees are rising



FOSTER CITY, Calif. (8/15/12)--"The fee environment worsened for bank customers in virtually every way possible in the first half of the year," according to a new survey from MoneyRates.com that says banks' fees are rising (Money.MSN.com Aug. 14).

8. CUNA has concerns about mortgage servicer proposal

WASHINGTON (8/13/12)--The Credit Union National Association has some serious concerns with the possible regulatory burden and added compliance costs of the proposed regulations for mortgage servicers that the Consumer Financial Protection Bureau issued on Friday.

7. CFPB proposes more rules on mortgage servicers

WASHINGTON (8/10/12)--Credit unions and other mortgage servicers would have to provide clearer monthly statements and would have to take additional steps before foreclosing on a property, under proposed regulations unveiled today by the Consumer Financial Protection Bureau.

6. Employee kidnapped, taken to CU for robbery

FORT WAYNE, Ind. (8/29/12)--A Fort Wayne, Ind., credit union employee was allegedly kidnapped from her home Monday evening and taken to the credit union, where suspects forced her to provide them access to cash before leaving the scene with her car.

5. Study: More debit card usage, more overdrafts likely

LAKE FOREST, Ill. Wis. (8/16/12)--A recent study indicates that debit card use is growing. With that, financial institutions can expect an increased possibility consumers will overdraft their checking accounts, thanks to a "financial tsunami" enacted in 2003, the study said.

4. NEW: CFPB issues final rule on remittance disclosures

WASHINGTON (8/7/12)--The Consumer Financial Protection Bureau (CFPB) just released its long-anticipated rule implementing provisions under the Dodd-Frank Wall Street Reform and Consumer Protection Act that require remittance transfer providers to disclose fees upfront, as well as the exchange rate and the amount to be received by the recipient.

3. Police shoot man who took 12 hostages at CU

LAKEWOOD, Wash. (8/28/12)--Police officers shot and critically wounded a man as he attempted to flee after he held a dozen people hostage, including his estranged wife, at gunpoint inside a Washington state credit union Saturday.

2. CFPB could require option of no-point, no-fee mortgages

WASHINGTON (8/20/12)--After floating the concepts earlier this year, the Consumer Financial Protection Bureau last Friday took the next step and issued a 369-page proposal on new loan origination standards and compensation rules for mortgage loan officers.

1. Study: Deposits at large CUs outpacing banks

CHARLOTTESVILLE, Va. (8/6/12)--Consumers were moving money out of banks and into credit unions long before Occupy Wall Street protests and Bank Transfer Day, according to a study by financial research firm SNL Financial.

July MCUE CU earnings and loan balances rise

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MADISON, Wis. (9/5/12)--Credit unions nationwide collectively saw their earnings and loan balances rise in July, and those trends should continue this year, according to a Credit Union National Association (CUNA) economist's analysis of CUNA's monthly sample of credit unions for July.

"The credit union movement's capital-to-asset ratio jumped to 10.3% in July from 10.1% in June due to capital growing much faster than assets," Steve Rick, CUNA senior economist, told News Now. "Capital levels rose over 1% in July from stronger earnings, while assets fell 0.7%. In July, credit union annualized return on assets came in strong at 1.28%, up from 0.82% for the first seven months of the year.  Earnings keep rising as provision for loan losses keep falling," he said.

"Higher earnings will allow credit unions to grow their assets faster while maintaining a given capital-to-asset ratio," Rick added.

The total dollar amount of capital for credit unions is $105 billion.

Credit union loans outstanding grew 0.4% in July 2012, the same as June. Credit union loans totaled $597.8 billion in July, compared with $579 billion in July 2011. Unsecured personal loans led loan growth with a 1.2% increase, followed by new-auto loans (1%), andadjustable-rate mortgages and used-auto loans, which each rose 0.9%. Credit card loans grew 0.7%, while home-equity loans and fixed-rate mortgages declined 0.3% and 0.5%, respectively.

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"Credit quality has improved significantly over the last year," Rick said. "The credit union delinquent loans-to-total-loans ratio came in at 1.29% in July, down from 1.59% in July 2011. This ratio is expected to fall further as the economy recovers and loan growth picks up. We expect credit union loan balances to grow 3% in 2012 and 5% in 2013.

"Faster loan growth will help counter the recent reduction in credit unions' net interest margins," Rick added.       

Credit union savings balances fell 0.9% in July, compared with a 0.8% increase in June. Credit union savings in July totaled $880.7 billion--or $50 billion more than the $830.7 billion in July 2011. Money market accounts led savings growth with a 1% gain. On the decline were one-year certificates (-0.2%), individual retirement accounts (-0.4%), and regular shares (-0.7%). Share drafts fell 6.4%.  

Regarding liquidity, credit unions' loan-to-savings ratio increased slightly in July to 68% from 67% in June.

Spencer named MCUL board chairman

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LANSING, Mich. (9/5/12)--Howard Spencer, chairman of Northland Area FCU's board of directors, has also been named board chairman for the Michigan Credit Union League (MCUL).

The Oscoda, Mich.-based Northland and MCUL & Affiliates said Spencer accepted his new post during the MCUL Annual Convention and Exposition, in Traverse City, Mich.  

"MCUL made an excellent choice," Northland CEO Pete Dzuris said. "Howard has an unwavering belief in the credit union cause and its ability to help hard-hit communities rebuild. He is a tremendous advocate for the people of Michigan" (Michigan Monitor Sept.4).

Personal achievements include a previous appointment as board chair for the National Association of Credit Union Chairmen and inclusion in the MCUL Hall of Fame.

"Howard Spencer has a long and distinguished record of service and brings decades of experience and commitment to the credit union movement," said MCUL CEO David Adams, who also thanked outgoing board Chair George Isola for his work.

"Credit unions provide a real service to the communities of Michigan," Spencer said. "And I believe in having a strong trade association that stands firm for the rights of our members. It's important for credit unions to engage politically with the elected officials who make the rules for all of us. Northland's been standing tall for its members for years, and I'm proud to be a part of MCUL on behalf of all Michigan credit union members."

NYSE chief Small biz lacking capital

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MADISON, Wis. (9/5/12)--More than 80% of U.S. small business leaders said that lack of access to capital, economic uncertainty and other burdens are having a significant impact on their ability to create jobs, Duncan L. Niederauer, NYSE Euronext chief executive officer, said in a report released last week.

Two-thirds of U.S. small business owners say they may not add jobs in 2013, with some anticipating reductions in their work force, said the "NYSE Euronext 2012 CEO Report."

About 53% of U.S. small business owners surveyed believe that reducing tax rates on businesses would be the most effective solution to accelerate the growth of permanent jobs, the report said.

When asked about policy actions that would accelerate the growth of permanent jobs, U.S. small business owners suggested increasing funding for programs targeted to small businesses, providing tax credits for hiring workers and offering incentives for the repatriation of jobs. 

The 2012 NYSE Euronext CEO Report, conducted this past July by ORC International and presented in cooperation with FOX Business Network, reflects the insights of 340 CEOs from companies listed on NYSE Euronext markets from 26 countries and 285 U.S. small-business owners.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

N.C. CU staff visit Mexicos Caja Yanga

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RALEIGH, N.C. (9/5/12)--Credit union staff from North Carolina visited Aug. 19-25 with representatives of Mexico's Caja Yanga to share marketing best practices. World Council of Credit Unions (WOCCU) coordinated the visit to the 71,000-member credit union, located in Veracruz, a state in Southern Mexico.

Members of the Semilla Cooperativa group in the village of Amplacion Pozorron, Mexico, gather to make deposits and loan payments. Javier Contreras (left) of Caja Yanga processes the member transactions. The North Carolina Credit Union League and the World Council of Credit Unions' representatives accompanied Contreras as part of their week-long visit with the credit union in Mexico.  (Photo provided by the North Carolina Credit Union League)

Ashley Ruffin, senior vice president of marketing for Local Government FCU in Raleigh, N.C., and Jeff Hardin, director of communications for the North Carolina Credit Union League, met with representatives of the board of directors, senior management and marketing teams of Caja Yanga throughout the week. Joshua Fetting, WOCCU international partnerships officer, joined Ruffin and Hardin for the week's events.

Caja Yanga has made great strides in marketing by hiring a group of graphic designers and marketing staff, Ruffin said. "Previously, the credit union outsourced quite a bit of its design work, but more recently it has brought all that work in-house," he explained. "The quality and consistency of its materials made an immediate leap forward by doing so, and its work is comparable to many large credit unions in the U.S."

Caja Yanga operates seven branches in the western part of Veracruz state. The economy there is largely farm-based, with coffee and sugar cane two of the major crops. Several small-to-medium sized cities contain a growing professional class of workers who increasingly rely on the credit union for services, the North Carolina league said.  

For more remote farming communities, accessing financial services can be difficult due to lack of transportation and as a result, many people in rural areas have traditionally been unbanked. To help bridge that gap, Caja Yanga employs the Semilla Cooperativa methodology that WOCCU developed several years ago.

Semilla Cooperativa--or "cooperative seed"--is a series of mostly small savings and lending circles located throughout the Caja Yanga service area. Once each month, a field officer from Caja Yanga travels to each Semilla Cooperativa group to accept deposits and loan payments. The U.S. visitors traveled to one such group during the week.

"The Semilla program looks a lot like the U.S. credit union movement did 100 years ago," said Hardin. "Members of these small groups know each other personally, and they come together each month and transact business. As such, there's transparency and a real accountability factor in play."

Although separated by language, the meetings between the U.S. and Mexican groups pointed out many similarities in service delivery and cooperative values. "The North Carolina League and Caja Yanga have been long-term partners with the World Council, and we are glad to see them collaborate and share techniques to achieve membership growth through targeted marketing and awareness campaigns," said WOCCU President/CEO Brian Branch.

Branch added that "exchanges such as this help World Council build the global credit union community."

The week of meetings may be the start of a series of visits between Caja Yanga and North Carolina credit unions. "These visits enrich North Carolina credit unions and help them to be more successful," said league President/CEO John Radebaugh. "As such, we are always open to these types of exchanges."

15 CU professionals designated International CUDEs

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MADISON, Wis. (9/5/12)--The fourth class of International Credit Union Development Education (I-CUDE) designees was recognized by the seven international Credit Union Development Educator (CUDE) programs and the World Council of Credit Unions (WOCCU) at the recent 2012 World Credit Union Conference in Gdańsk, Poland.

World Council of Credit Unions Director Scott Kennedy recognized International Credit Union Development Education designees at the 2012 World Credit Union Conference in Gdańsk, Poland. (Photo provided by National Credit Union Foundation)
Fifteen credit union professionals received the I-CUDE distinction. They include:

  • Sharon Angus-Crawshaw, North Wales CU, United Kingdom (U.K.);
  • Mercedes D. Castillo, VICTO National, Philippines;
  • Richard L. "Dick" Ensweiler, Texas Credit Union League, Farmers Branch, Texas;
  • Carlene Frimer,  United Communities CU, Canada;
  • Kathy Garner, Catalyst Corporate FCU, Duluth, Ga.;
  • Angela Hampson, Glasgow CU, U.K.;
  • Mary Henderson, Glasgow CU, U.K.;
  • Terri Hendrix, S.C. Telco FCU, Greenville, S.C.;
  • Alan Hignett,  Hull & East Yorkshire CU, U.K.;
  • Robert Kelly,  NHS CU, U.K.;
  • Barbara Main, Main Communications, Madison, Wis.;
  • Jill Nowacki,  Maps CU, Salem, Ore.;
  • Kelly V. Schermerhorn, CES CU, Mount Vernon, Ohio;
  • Edwina Sykes, No. 1 CopperPot CU/North Yorkshire CU, U.K.; and
  • Kevin Waters, Staffordshire CU, U.K.
The Development Education program encourages an international exchange of ideas and opportunities around credit union philosophy. The seven international CUDE programs offer their development educators the opportunity to achieve an I-CUDE designation.

To achieve this distinction, development educators must:

  • Complete their local Development Education (DE) program;
  • Complete an independent studies project appropriate to the learning objectives of the DE program;
  • Participate in an international program, conference or training opportunity. This may include but is not limited to an international DE program, an international immersion program or an international volunteer assignment; and 
  • Attend WOCCU's World Credit Union Conference or a regional confederation conference.
The seven international DE programs are based in Asia, Australia, the Caribbean, Europe, Great Britain, the Philippines and the U.S. Those holding local DE certification who are interested in applying for international certification should contact local program leaders, including:

  • Asia--Ranjith Hettiarachchi, CEO, Association of Asian Confederation of Credit Unions, Thailand;
  • Australia--Peter Mason, Credit Union Foundation Australia;
  • Caribbean--Melvin Edwards, CEO, Caribbean Confederation of Credit Unions, West Indies;
  • Europe--Marlene Shiels, chief executive, Capital Credit Union Ltd., Scotland;
  • Great Britain--Mary Henderson, Glasgow CU, U.K.;
  • Philippines--Mercedes D. Castillo, VICTO National, Philippines; and
  • U.S.-- Christopher Morris or Lois Kitsch, National Credit Union Foundation.