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St. Louis treasurer taps CU to serve unbanked

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ST. LOUIS (7/25/14)--In her quest to connect unbanked residents with financial institutions, St. Louis' treasurer has called on a credit union to lend a hand.

Tishuara Jones, who said her top priority when first elected as the city's treasurer was to improve the financial health and literacy of local families, has asked 1st Financial FCU, Wentzville, Mo., to help her achieve her goal by offering free checking and savings accounts to youth in need ( St. Louis Business Journal July 20).

The $203 million-asset credit union will provide free accounts to 700 participants--between the ages of 16 and 20--of the Summer Youth Employment Program that kicked off this week.

1st Financial also will offer financial education, with an emphasis on saving, during orientation. Further, the accounts will have no overdraft, checking or debit fees, Tracy Verner, 1st Financial brand ambassador, told the St. Louis Business Journal.

"Studies show that those with savings accounts are more likely to go to college," Jones said.     

St. Louis has the third highest percentage of unbanked residents in the United States at 29% compared with the national average of 8.2%, according to a 2011 study by the Federal Deposit Insurance Corp. ( St. Louis Business Journal ).

The local impoverished, many of them minority residents, often turn to predatory lenders such as check cashers and payday loan businesses because they either don't trust or have access to traditional financial institutions.

The estimated cost of those alternative services in lost fees and interest, the St. Louis Business Journal reported, was $89 billion in 2012, according to Center for Financial Services Innovation numbers.

Other initiatives spearheaded by Jones include:
  • A monthly financial literacy program for city employees paid for by financial institutions;
     
  • Sponsorship of the annual Financial Empowerment Fair for the general public, an event she hopes to bring the city annually; and
     
  • Making direct deposit mandatory for 7,000 city employees, which has resulted in 800 opening accounts with local credit unions and other financial institutions.

CUs a compass on path away from bank fees: Daily Finance

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MADISON, Wis. (7/25/14)--When ditching a big bank and all the charges and fees that come with it, a credit union can be a great alternative when picking a new financial institution, a recent article in Daily Finance said.

Fees tend to be significantly lower at a credit unions because they are cooperatively owned, not-for-profit organizations that exist only to serve members, explained Daily Finance 's Carol Kopp.

"Historically, membership in a credit union is open to people with a common interest--members of a union, employees of a company or worshippers at the same place," Kopp said. "But many are open to an entire community."

To find a credit union when plotting your escape from a bank, the article suggests the National Credit Union Administration's credit union locator. Another option is www.asmarterchoice.org from the Credit Union National Association.

CU System briefs (07/25/2014)

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  • SAN DIEGO (7/25/14)-- San Diego County CU, with $6.5 billion in assets, hopes to set a Guinness World Record for document shredding on Saturday, when it invites San Diegans to bring old papers and try to fill more than 40 trucks with shredded remains ( Times of San Diego July 23). The free event is scheduled for 7 a.m. to 7 p.m. (PT) in the parking lot of Qualcomm Stadium. San Diego County CU is planning to set the record for the most paper collected in 24 hours. Last July, the credit union collected and shredded 168,147 pounds of paper, setting the current record and filling 40 trucks. Ten cents for every pound of e-waste collected goes to the San Diego Humane Society and the Society for Prevention of Cruelty to Animals (San Diego County CU Photo) ...
  • KANSAS CITY, Mo. (7/25/14)--After a lot of hard work on the part of both organizations, Kansas City CU, with $28 million in assets, was granted permission to install an ATM at the KCMO Water Department in Kansas City, Mo. ( Missouri Difference July 23). "Our employees and customers have always wanted an ATM to be placed in our lobby, but we had been turned down before by a bank," said Kandi Patterson, senior accountant for KCMO Water Services, when the ATM was installed July 15. "When KCCU approached us with the idea, we jumped at the opportunity." Patterson said the ATM will provide convenience for KCMO customers, giving them the ability to withdraw money to pay their water bills. Many KCMO employees and customers are Kansas City CU members, so the ATM gives them quick, fee-free access to their money ...

KCUA's Wright appointed as Kan. CU regulator

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TOPEKA, Kan. (7/25/14)--Jerel Wright, assistant vice president of compliance at the Kansas Credit Union Association, was appointed as administrator of the Kansas Department of Credit Unions by Gov. Sam Brownback.
 
As administrator, Wright will be responsible for overseeing the daily functions of the Department of Credit Unions, the Credit Union Council and the laws, regulations and exams for state-chartered credit unions.
 
"I enjoy so much what I do with credit unions right now that I will miss working with them," Wright, 56, told News Now . Wright has been with the Kansas league since 2005 and previously had another 11-year tenure with the league.

Wright also has been appointed state administrator in the past so this gives him "the chance to serve the state of Kansas again," he said. "I've been in credit unions all my career."
 
"Jerel brings a great deal of knowledge and experience to this position," Brownback said in a release. "I appreciate his willingness to serve the people of Kansas in this capacity."
 
Although the state Senate will have to confirm his four-year appointment when it reconvenes in January, Wright will begin working at the department in September. He succeeds John Smith, 76, who has been administrator since 2006.
 
Wright has a bachelor's degree in business administration and a law degree from Washburn University, Topeka, Kan. He earned his credit union compliance expert certification in 2008.
 

Landmark exam parity bill gets Ill. gov. signature

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CHICAGO (7/25/14)--The examination process for Illinois credit unions was just upgraded, as Gov. Pat Quinn signed a bill into law Thursday that will certify that the Illinois Department of Financial and Professional Regulation administers fair examination protocols for all state-chartered credit unions.

Sean Hession, Illinois Credit Union League president/CEO, left; Patrick Smith, vice president of communications and regulatory affairs; Steve Olson, executive vice president/general counsel/chief operating officer; Ashley Niebur, manager of state governmental affairs, and Keith Sias, vice president of governmental affairs, witness Ill. Gov. Pat Quinn sign HB 5342. (Illinois Credit Union League Photo)
HB 5342 will require all state regulatory examinations to be conducted in a procedurally and consistent manner, and aims to provide clarity, flexibility and authority in a number of operational areas.

The Illinois Credit Union League (ICUL) played a key role in drafting the bill, which passed both chambers of the Illinois General Assembly with wide-ranging support in May.  

The bill was sponsored by Deputy Majority Leader Rep. Lou Lang (D-Skokie) and Sen. Dave Koehler (D-Peoria), two longtime advocates for credit unions.

"There will now be standards that state-chartered credit unions can reference and rely upon with respect to the entire regulatory examination process," said Steve Olson, ICUL executive vice president/general counsel.

Added ICUL President/CEO Sean Hession: "The contents of the bill, as well as the rules and guidelines to promulgate it, are cause for celebration and will serve as a model across the country for state and federal regulators."

The key provisions of the bill include:
  • The authorization for credit unions to form charitable donation accounts, which will allow credit unions to reach for higher yields on charitable accounts as long as 51% of the returns are donated to a recognized charity;
     
  • The ability for credit unions to share daily operational services, correspondent services and fixed assets, which will allow them to achieve economies of scale and operate more efficiently;
     
  • Permission for credit unions to forego drafting a new appraisal during either a mortgage loan renewal, refinancing or restructuring when no money is advanced;
     
  • The requirement for Illinois credit union board members to have a basic understanding of a credit union's financial statements, services, products operational risks and internal control structures; and
     
  • The requirement that Illinois credit union supervisory committee members receive annual training to their statutory duties.

CUs get national online tool for communicating reg concerns

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WASHINGTON (7/25/14)--PowerComment, a new online resource that helps credit unions take their regulatory concerns directly to state and federal regulators, was officially announced at the summer American Association of Credit Union Leagues (AACUL) meeting Thursday.

Developed by the California and Nevada Credit Union Leagues, and now being taken national by Credit Union National Association, PowerComment is an interactive tool that allows all CUNA-affiliated credit unions to write and immediately submit comment letters on regulatory proposals directly to the National Credit Union Administration, the Consumer Financial Protection Bureau and other federal and state regulators.

Credit unions can read proposed rules and how they might affect their operations and members, as well as ask fellow PowerComment users or their leagues questions related to proposed rules. In addition, they can view letters submitted by other credit unions and their leagues on the website, available exclusively to CUNA-affiliated credit unions.

"This is the power of the CUNA-League System at its best," remarked CUNA General Counsel Eric Richard. "CUNA is pleased to leverage the great of work the California and Nevada Credit Union Leagues to effectively deliver credit union comments back to the regulatory agencies."

The national rollout of PowerComment now makes it easier for credit unions throughout the United States to voice their concerns and comment on proposed rules, especially in this challenging regulatory environment," said California and Nevada Credit Union Leagues President/CEO Diana Dykstra. "By commenting at the beginning of the process, credit unions can help shape the rules, and mitigate overly burdensome directives."

Prior to the national rollout, PowerComment was tested by 10 leagues, including the Northwest Credit Union Association (NWCUA).

"PowerComment allowed us to easily track regulatory proposals, get insight from colleagues and write effective comment letters," said NWCUA President/CEO Troy Stang.

"The analysis and reminders are another benefit that helped us successfully manage our time in an efficient manner. PowerComment is an additional tool in the credit union toolbox that we look forward to seeing available to a broader audience," he added.

Use the resource link to check out the new tool.

Debit use bolsters noncash payments, says Fed payments study

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WASHINGTON (7/25/14)--Consumer use of electronic payments--whether by card or via automated clearing house (ACH)--continues to outpace cash and checks, according to updated statistics from the 2013 Federal Reserve Payments Study.
 
Of the 776 million plastic cards used in the United States in 2012, 334 million were credit cards, 283 million were debit cards and 159 million were prepaid cards.
 
Consumers pulled out their debit cards for an average 23 payments per month compared with an average of 11 payments per month for credit cards and 10 for prepaid cards. In 2012, the number of debit card payments reached 47 billion--significantly higher than the 26.2 billion credit card payments.
 
The number of online bill payments--through online banking websites, directly through billers and settled via ACH--exceeded 3 billion in 2012.
 
Notable is the use of mobile payments: Mobile wallet applications accounted for more than 250 million mobile payments, and there were at least 205 million person-to-person or money transfer payments.
 
Check usage continues to decline, although, when used, almost all checks in 2012 were either cleared by electronic image exchange or converted to ACH payments. More than 90% of the drop in total checks was due to reductions in checks for $500 or less.
 
The number of fraudulent transactions in 2012 was 32.2 million worth $6.4 billion. Only 5% of the 32.3 million were made via ACH, and checks had the lowest unauthorized transactions at 3%.
 
This revised report updates data from the December 2013 original report.  The 2013 Federal Reserve Payments Study is the fifth conducted since 2001 by the Federal Reserve System to estimate aggregate trends in noncash payments in the United States. Estimates are based on survey data gathered from depository and financial institutions, payment networks, processors and issuers.