News Now Archive

Filed on January 9, 2008, published the first business day after.

• NCUA names Woodson new CFO
• Reg Z comments due in April
• Idaho league president named to Fed advisory board
• Inside Washington
• Minnesota CUs learn importance of caucusing
• Montana CU Network trains candidates on getting elected
• 20 named to Indiana ignite working groups
• Florida league President Guy Hood to retire
• WOCCU calls for DSA, WYCUP nominations
• Gateway Metro switches to fed charter
• $100,000 earmarked to support CUs, Indiana foundation
• Record giving marks Washington foundation’s year
• Article: Missouri CUs a solution for small businesses
• North Island CU’s interactive brand displays create buzz
• Coosa Pines FCU supporting unit in Iraq
• CU System briefs
• Market News
• News of the Competition
• Consumer brief
• New white papers discuss team environment, innovative products
• SpendSpace means consumers can compare their spending
• New guide tells how to tap remittance market

NCUA names Woodson new CFO

ALEXANDRIA, Va. (1/10/08)—Mary Ann Woodson will become the chief financial officer of the National Credit Union Administration (NCUA) Jan. 14, taking the spot vacated by the retirement of Dennis Winans at the end of 2007.

Woodson has served most recently as deputy CFO at the Department of Homeland Security (DHS), which includes 22 agencies that merged when DHS was established. Before joining DHS in 2004, Woodson was the budget director for the Federal Bureau of Investigation, where her federal career began in 1979.

As CFO of the NCUA, Woodson will become responsible for the daily operations of the National Credit Union Share Insurance Fund (NCUSIF) and the NCUA Operating Fund, including the accounting and financial reporting functions for both funds.

She will over take over agency administrative functions, such as travel policies and programs, budget preparation and management, finance and accounting functions, accounts payable, payroll, and the administration of credit union operating fees and NCUSIF capitalization deposits and operations.

Winans was NCUA CFO since 1995 and had been with the agency since 1979.

Reg Z comments due in April

WASHINGTON (1/10/08)—Credit unions and other interested parties have until April 8 to comment on the Federal Reserve Board's proposed Regulation Z changes intended, in part, to address certain subprime lending practices.

The proposed revisions spanned 141 pages in the Jan. 9 Federal Register, which set the deadline for public comment. The proposed rules changes are meant to better protect consumers from unfair or deceptive home mortgage lending practices and related advertising under the Truth in Lending and Home Ownership and Equity Protection Acts.

The Fed's plan would apply four protections to a newly defined category of "higher-priced mortgages," which would include those with annual percentage rates (APRs) that exceed the yield on Treasury securities of comparable maturity by at least three percentage points for first-lien loans, or five percentage points for subordinate-lien loans. This threshold should include nearly all subprime loans.

For these higher-priced mortgages:

• Creditors would be prohibited from engaging in a pattern or practice of extending credit without considering borrowers' ability to repay the loan;
• Creditors would be required to verify the income and assets they rely upon in making a loan;
• Prepayment penalties would only be permitted if certain conditions are met, including the condition that no penalty will apply for at least sixty days before any possible payment increase; and
• Creditors would have to establish escrow accounts for taxes and insurance.

• Prohibit lenders from paying mortgage brokers "yield spread premiums" that exceed the amount the consumer had agreed in advance that the broker would receive. A yield spread premium is the fee paid by a lender to a broker for higher-rate loans.

• Prohibit certain servicing practices, such as failing to credit a payment to a consumer's account when the servicer receives it, failing to provide a payoff statement within a reasonable period of time, failing to provide a schedule of fees upon request, and imposing late fees under certain circumstances.

• Prohibit a creditor or broker from coercing or encouraging an appraiser to misrepresent the value of a home.

• Prohibit seven misleading or deceptive advertising practices for closed-end loans, such as using the term "fixed" to describe a rate that is not truly fixed. It would also require that all applicable rates or payments be disclosed in advertisements with equal prominence as introductory or "teaser" rates; and

• Provide Truth-in-Lending disclosures to borrowers within three days of application so it is early enough to use while shopping for a mortgage. Lenders could not charge fees until after the consumer receives the disclosures, except a fee to obtain a credit report.

Idaho league president named to Fed advisory board

WASHINGTON (1/10/08)—The Federal Reserve Board Wednesday named 10 new members to its Consumer Advisory Council (CAC), including the head of the Idaho CU League who was nominated by the Credit Union National Association (CUNA).

Alan Cameron, president/CEO of the league, will serve a three-year term on the CAC, which advises the Fed on its responsibilities under the Consumer Credit Protection Act and on other matters in the area of consumer financial services.

Members are appointed by the Board of Governors to the 30-member panel to serve staggered three-year terms. The council meets three times a year in Washington, D.C.

Cameron has served as chair of CUNA's Consumer Protection Subcommittee and as chair of the State Issues Advocacy Committee of the American Association of Credit Union Leagues.

Previously, he was an attorney in private practice, during which he focused on the representation of credit unions in state and federal courts. Cameron has also been involved in a variety of community affairs related to consumer financial services.

He serves as treasurer of the Hispanic Financial Education Coalition, a Jump$tart Coalition partner, as well as treasurer of the Consumer Information Council, an industry partnership dedicated to educating the public about identity theft and financial privacy issues. He was also on the board of the Consumer Credit Counseling Service of Idaho for more than twenty years.

Also named for a three-year term is Michael Calhoun, president of the Center for Responsible Lending (CRL) in Durham, N.C. The CRL is a nonprofit, non-partisan research and policy organization focusing on consumer lending issues.

CUNA Deputy General Counsel Mary Dunn said Wednesday: "It's very important for credit unions as consumer-owned co-ops to have representation on the Consumer Advisory Council because it does have the ear of the Federal Reserve Board on consumer regulatory issues.

"CUNA recommended Alan Cameron and as head of our Consumer Protection Subcommittee he will do an outstanding job on the Fed's advisory council, and we also look forward to working with Michael Calhoun, who certainly knows credit unions given his association with Self Help."

Faith Anderson, of American Airlines FCU in Fort Worth, Tex., completed her three-year CAC term at the end of 2007.

The Fed also designated a new chair and cive chair for the advisory group: President/CEO Tony Brown of Uptown Consortium, Inc., whose term runs through December 2008, was designated chair; amd Managing Director Edna Sawady Market Innovations, Inc., whose term end December 2009, was named vice chair.

Use the resource link below to see the complete list of CAC members.

Resource Links

FRB Release on CAC Positions

Inside Washington

• WASHINGTON (1/10/08)--Daniel Mudd, Fannie Mae's chief executive, expressed his concerns with how some might respond to the Bush administration's loan modification plan, saying that it could "spook investors" (American Banker Jan. 9). In a speech Tuesday before the U.S. Chamber of Commerce, Mudd said that investors left with loan losses would not be able to re-enter the market easily, thus shrinking the credit pool. Legislation should not affect the credit markets by inflicting losses onto them, he said. Bank regulators could give financial institutions credit under the Community Reinvestment Act for helping borrowers facing foreclosure, Mudd suggested, while encouraging a unified industry approach ...

• WASHINGTON (1/10/08)--The Office of the Comptroller of the Currency (OCC) announced Wednesday that John K. Hardage has been named director for congressional liaison. Hardage, who joined the agency in 1997, has served as deputy director. Hardage succeeds Carolyn Z. McFarlane, who retired last year ...

• WASHINGTON (1/10/08)--Rep. Richard Baker (R-La.) could announce Friday whether he will become president of the Managed Funds Association (CongressDaily PM Jan. 8). Baker has been in talks with the group regarding a $1 million annual salary. Baker said he could resign within one month if he takes the position. His absence would result in a special election to fill his 6th District seat ...

Minnesota CUs learn importance of caucusing

ST. PAUL, Minn. (1/10/08)--About 45 attendees learned the basis of precinct caucusing during a Minnesota Credit Union Network (MnCUN) political caucus training seminar Tuesday.

James Patrick Barone, chair of Minnesota's 4th Congressional District DFL, leads caucus training during a Minnesota Credit Union Network political caucus training seminar Tuesday. (Photo provided by the Minnesota Credit Union Network)

James Patrick Barone, chair of Minnesota's 4th Congressional District DFL Party, led the training. He provided an overview of what happens at Minnesota caucuses and how people can get involved. Topics included: when and where caucuses are held; what is on a caucus agenda; and how credit unions can caucus to push their issues forward.

"Caucuses are a powerful tool for credit unions because they center around a group of people coming together and pushing their ideals forward," said Mara Humphrey, MnCUN's vice president of governmental affairs. "We held this training to teach credit unions about the importance of caucusing and to provide them with the understanding they need to effectively caucus in February."

MnCUN President/CEO Mark Cummins encouraged attendees to be more involved politically. Minnesota credit unions can join MnCUN's GrassRoots Education and Action Team (GREAT), take part in political fundraising, run Project Zip Code at their credit union, or participate in the Political and Grassroots Network.

"Credit union professionals and volunteers have a wide variety of channels through which they can become more involved on a grassroots level, and I challenge them to do so," Cummins said.

Resource Links

GrassRoots Education and Action Team (GREAT)

CUNA Campaign Manual

Montana CU Network trains candidates on getting elected

GREAT FALLS, Mont. (1/10/08)--The Montana Credit Union Network (MCUN) has partnered with two other organizations to hold day-long classes to help potential political candidates run for office.

Credit Union National Association Political Director Trey Hawkins addresses the issue of campaign fundraising during the 2006 Campaign Academy held in Billings, Mont.

The Campaign Academy is based on a national curriculum, covering a range of issues from demographics to campaign finance rules. The nonpartisan event is held every other year (Great Falls Tribune Jan. 8).

"The Montana Credit Union Network's participation goes far beyond simple sponsorship," Beth Satre, MCUN director of communications and public relations, told News Now. "We do put in some money, but we also work closely with our other two partner organizations--the Montana Rural Electric Cooperative Association and the Montana Chamber of Commerce to plan, organize, and help publicize the campaign academies."

While the bulk of the training is provided by people from the National Rural Electric Cooperative Association and the Credit Union National Association, MCUN works to balance that focus by recruiting local experts in communications, Get Out The Vote, state election and reporting laws, as well as elected officials to give participants information from a Montana-based perspective, Satre said.

Kathy Holte (left) and Alice Kranzler, both of Plentywood, Mont., compare notes at the 2006 Campaign Academy in Billings. Holte subsequently ran a successful campaign and was elected County Treasurer in Montana's Sheridan County in November 2006. (Photos provided by the Montana Credit Union Network)

Spreading the word about the campaign academies is another area that MCUN works on--it can offer sound training, but it also needs to get people there, she added.

"We help organize these one-day, nonpartisan campaign academies because we believe they're a great value for Montana as well as the people who attend," Satre said. "They provide a good forum for participants to gain nuts-and-bolts information, explore their options, and get a realistic idea of what it means to run effective campaigns. We need to encourage Montanans who are interested in public service to run for public office, whether it be for a local, county, or state office.

"And, as one academy graduate who went on to be elected to the Montana Supreme Court said, ‘The program opens the door to the political process for the average Montanan,'" Satre concluded.

Resource Links

CUNA Campaign School Manual

20 named to Indiana ignite working groups

INDIANAPOLIS (1/10/08)--Twenty credit union professionals from 17 Indiana credit unions were selected to participate in ignite working groups. The first meeting is scheduled for Jan. 30.

The ignite initiative is a joint venture with the Indiana Credit Union League and three Indiana credit union representatives associated with Filene Research Institute's i3 program.

The individuals are: Doug True, senior vice president of Technovation, FORUM CU, Indianapolis; Bob Falk, president/COO, Purdue EFCU, Lafayette; and Nan Morrow, vice president of corporate development, Centra CU, Columbus.

The groups will create new ideas and implement existing ideas presented by the i3 group. The league will host education sessions open to all affiliates on topics such as innovation and creative thinking.

Members of the working groups include:

• Kevin Sparks, vice president/chief financial officer, Crane FCU, Odon;
• Jan Chronic, senior vice president of marketing, Eli Lilly FCU, Indianapolis;
• Joe Hasto, chief financial officer, Eli Lilly FCU;
• Tony Meier, associate vice president/business development officer, Evansville Teachers FCU, Evansville;
• Michael Hostetler, marketing coordinator, Finance Center FCU, Indianapolis;

• Blake Dearing, mortgage sales manager, FORUM CU, Indianapolis;
• Debby Blake, manager, Contact Center, FORUM CU;
• Tim Lukomski, chief financial officer, vice president of support services, Heritage FCU, Lafayette;
• Charles King, corporate attorney, Hoosier Hills CU, Bedford;
• Marie "Sam" Shanks, executive vice president, Indiana State University FCU, Terre Haute;

• Brian Wilkerson, vice president/chief operating officer, KEMBA CU, Indianapolis;
• Michelle Peterson, marketing manager, Marion School ECU, Marion;
• Carolyn Probasco, manager/CEO, Members United FCU, La Porte;
• Lora Davison, chief financial officer, Northern Indiana FCU, Merrillville;
• Gary Icenogle, vice president of marketing and business development, NorthPark Community CU, Indianapolis;

• Evelyn Royer, vice president of risk management/support services, Purdue EFCU;
• Kevin Kosek, director, business development, Regional FCU, Hammond;
• Becky Summers, vice president, Teachers CU, South Bend;
• Chad Gramling, product manager, Three Rivers FCU, Fort Wayne; and
• Jim Johnson, vice president, member services, Three Rivers FCU.

Florida league President Guy Hood to retire

TALLAHASSEE, Fla. (1/10/08)--Florida Credit Union League (FCUL) President/CEO Guy M. Hood has announced plans to retire from the league in January 2009 after serving more than 20 years in that position.

Hood began his tenure as president/CEO in 1988. During his career, he has seen significant transitions in the credit union movement, including the passage of the Credit Union Membership Access Act (H.R. 1151).

Under his leadership the league has received many awards and recognitions from national organizations for leadership and accomplishments in advocacy, grassroots organization and communications. Most recently Hood received the National Credit Union Foundation "Anchor Award" for responsive actions in disaster response.

Hood began his credit union career on April 1, 1970 as a field representative for the Alabama Credit Union League. He moved up the ranks to senior vice president of technical services before joining the Florida league.

John Hirabayashi, FCUL board chairman, termed Hood "an outstanding leader" who is "at the top of his game." Under Hood's direction, the league "has become one of the premier leagues in the country. I know he will do an outstanding job his final year leading the league and setting the stage for a smooth transition."

Although he will miss being part of the league daily, Hood said he was excited about the possibilities ahead for the league. "I am very confident my successor will have an equally rewarding experience as FCUL continues its mission to be the top resource for Florida credit unions."

The FCUL Board of Directors has retained Credit Union Employment Resources (CUER) to perform the search for a successor. CUER is a service of Credit Union Resources Inc., an affiliated company of the Texas Credit Union League.

WOCCU calls for DSA, WYCUP nominations

MADISON, Wis. (1/10/08)--The World Council of Credit Unions (WOCCU) is seeking nominations for two awards programs--the Distinguished Service Award (DSA) and the WOCCU Young Credit Union People (WYCUP) Scholarship Program.

The DSA is presented to individuals and institutions that have offered exemplary service to the credit union movement and its practices. Nominations must be made by a WOCCU member organization and are due May 1. The DSA award will be presented at the World Credit Union Conference in Hong Kong July 13-16.

The WYCUP scholarship seeks individuals who have made significant contributions to the development of their own credit unions, regional or national credit union systems, and who have demonstrated the potential to employ their talents at the international level. WOCCU is encouraging its credit unions and credit union organizations to nominate credit union leaders.

To be eligible for the scholarship, nominees must be sponsored by their credit union or credit union organization to attend WOCCU's 2008 World Credit Union Conference; be 35 years of age or younger as of Jan. 1; and submit a completed nomination form to WOCCU by June 2.

The scholarship consists of an all-expenses-paid trip to the 2009 World Credit Union Conference. It will be awarded to five recipients at the 2008 conference. The top two winners also will be able to visit a WOCCU project as part of a Cooperative Learning Tour development program.

For more information, use the links.

Resource Links

WOCCU Distinguished Service Award

WYCUP Scholarship Program

Gateway Metro switches to fed charter

ST. LOUIS (1/10/08)--Gateway Metro CU, a state-chartered credit union since 1935, received approval for a federal charter from the National Credit Union Administration, the credit union announced.

David Barton, president/CEO of Gateway Metro, attributed the switch to a new 2007 state law that restricts state-chartered credit unions from expanding beyond the counties contiguous to their main office.

Prior to the passage last April of that field-of-membership law--SB 591--credit unions were unable to expand at all--due to a stream of lawsuits against FOM expansions filed by banks and a 2006 Circuit Court decision that ruled geographic-based state-chartered credit unions could not expand.

When the law was passed, the Missouri Credit Union Association (MCUA) said the measure was the result of six months of negotiations between credit unions and the banking industry. Its purpose was to stop the field-of-membership lawsuits bankers had filed against credit union expansions since 2001 and to clarify "geographic area" in regards to field of membership.

At the time, MCUA President/CEO Rosie Holub noted that the legislation will help credit unions move forward. "Although this compromise piece of legislation does not contain all the provisions we would have wished, it clearly provides an opportunity for credit unions to grow and provides a more stringent legal threshold to thwart lawsuits going forward."

Barton considers the law as "pretty restrictive." "We have St. Louis County on one side and the Mississippi River on the other. We're already in St. Louis County, and not too many Mississippi River inhabitants are interested in joining our financial cooperative," Barton said. A federal charter, he says, would allow more flexibility to grow.

Gateway Metro was Missouri's fastest-growing credit union from 1999 through 2004, says the credit union. It is the eighth-largest credit union in the state, with $180 million in assets and 24,000 members. Gateway's new name will be Gateway Metro FCU.

Out of the 152 credit unions in the state, only 15 have federal charters.

$100,000 earmarked to support CUs, Indiana foundation

INDIANAPOLIS (1/10/08)--Representatives from 19 Indiana credit unions can attend the Credit Union National Association's (CUNA) Governmental Affairs Conference (GAC) in Washington, D.C., this year through assistance from the Indiana Credit Union League's Servicecorp.

"This is the third consecutive year we have been in a position to help underwrite the cost of attendance for some of our credit unions," said league President John McKenzie.

More than $100,000 will be put toward political involvement and supporting the Indiana Credit Union Foundation as a result of league and Servicecorp efforts. Through Servicecorp, the league granted $52,900 to assist affiliates in attending the conference.

The foundation presented its Millie Cox Scholarship to Robert Stowers, board member at Allegius FCU in Burns Harbor, to attend the GAC, but Stowers redirected the funds to Herb Singleton, president/CEO of Union Baptist Church FCU in Fort Wayne. Union Baptist, the state's newest credit union, began operations last year.

Other conference attendees were selected, based on political involvement, representation of small and medium-sized credit unions, and whether they are Servicecorp clients.

The foundation also received $50,000 in 2007 for financial literacy programs, scholarships, a Habitat House and the Biz Kid$ television series.

Record giving marks Washington foundation’s year

FEDERAL WAY, Wash. (1/10/08)--The Washington Credit Union Foundation (WCUF) disbursed a record amount of nearly $230,000 in grants and scholarships to credit unions and their community partners during 2007.

Grant dollars from the 501(c) 3 organization supported national and state-level financial literacy projects, small credit union development needs, broad community outreach efforts, professional development needs and disaster relief.

In addition to contributing $75,000 in national underwriting toward the financial literacy television series Biz Kid$, WCUF has dedicated in-kind resources to provide long-term national management to the project. Biz Kid$ began airing this month on PBS stations nationwide.

"A key goal of our foundation is to help Washington's credit unions better consumers' lives through innovative community outreach and consumer financial education programs, along with operational grants for small credit unions," said Roxanne Kruger, WCUF executive director. "Projects related to these areas received $127,515 in grant funds."

Nearly 100 credit union employees, volunteers and management staff were awarded a combined $91,500 by WCUF for professional enrichment, including $31,000 for credit union professionals to attend CUNA Management schools.

Also, $10,000 in disaster relief grants that were awarded by WCUF supported recovery efforts after the Peruvian earthquake and the Southern California wildfires last year.

Article: Missouri CUs a solution for small businesses

ST. LOUIS (1/10/08)--An article in the January issue of the St. Louis Small Business Monthly touts the financial solutions that credit unions offer small businesses.

The article is authored by Kelley Tyson, marketing coordinator at 1st Financial FCU, a $164 million asset, St. Charles, Mo.-based credit union.

Many small businesses are unaware that they have another choice besides banks for financial services, the article points out.

To keep up with members' needs, 1st Financial began offering business banking accounts. "Many of our business accounts came directly from members conducting their business through personal accounts," Joe Elder, director business service at 1st Financial, told the journal. "They were happy with the level of service they received from us, and they didn't want to add another financial institution to their busy lives."

Many of the St. Louis area credit unions that offer business banking cater to small businesses, startups and home offices, while many local banks continue to accommodate medium-sized businesses. The result is that some small business owners are left with few financing options, the article said.

"As more banks merge, the small-business owner has been getting lost in the shuffle," said Andrew Dodge, associate vice president of business development at the $112 million asset Arsenal CU in Arnold, Mo., in the article. "We're here, we listen, we're rooted in the community, and the success of the local businesses is of paramount importance to us. Without a healthy, thriving business community, our neighborhoods suffer, and we suffer. We live here, we work here; this is our life."

Kathryn Chillson-Strinic, branch manager of Electro Savings CU's Wildwood, Mo., branch, added: "We're not limited in our decision-making. We don't turn down small-business requests simply because they don't meet a list of predetermined criteria."

Resource Links

CUNA Small Business Products

CUNA Member Business Services

CUs in the Media

North Island CU’s interactive brand displays create buzz

SAN DIEGO (1/10/08)--North Island CU recently unveiled a new interactive advertising strategy targeting members of all ages.

Known as "Island Paradise," the original and interactive artwork can be seen throughout San Diego at numerous venues (Business Wire Jan. 8).

Produced by Reactrix, Island Paradise involves branding displays in malls, theatres and other spaces that respond to the physical movements of the audience.

The design reportedly has produced the highest advertising effectiveness score across all types of media, and is popular with major brands such as Coca-Cola.

The original artwork, known as "Polymorphous Paradise," was created in 1992 and has been used in the $1.5 billion asset, Chula Vista, Calif.-based credit union's advertising and marketing programs. Earlier this year, North Island updated its signature mural artwork to include 20 new landmarks and sites from San Diego to Riverside, Calif.

The interactive mural is featured on the credit union's website under the Island Extras Sections. Use the link.

Resource Links

‘Island Paradise’ art

Coosa Pines FCU supporting unit in Iraq

CHILDERSBURG, Ala. (1/10/08)--Four branches of Coosa Pines FCU have joined in Operation Troop Support to support the National Guard 621st Troop Support Command Unit, stationed in Taji, Iraq.

The branches at Sylacauga, Childersburg, Pell City and Chelsea, Ala., have been sending care packages full of snacks, candy, personal hygiene products, phone cards, games, puzzles, movies and other items to troops since November (The Daily Home Jan. 9).

"We really want to do more than business in our community," said Aimee Morris, Pell City branch manager, told the newspaper. "We want to be of service to our community, seeking out and filling needs wherever we can."

A soldier in the unit, Sgt. 1st Class John McDaniel of Childersburg, said the unit is thankful to get the donations. "The care packages have a great impact. A lot of times the care packages are the only way we can get these types of items," he said.

The credit union staff and members of the community have donated enough to send a care package to the soldiers twice a month. Morris said the program will continue until the 30-member unit returns home.

The $150.1 million asset credit union hopes to have a community-wide welcome home party when they return.

Resource Links

There's Nothing Like a CU statement stuffer

People Not Profit: The Story of the CU Movement

CUs in the Media

CU System briefs

• WASHINGTON (1/10/08)--Counterfeit checks bearing the name of Paducah, Ky.-based C-Plant FCU are reported in circulation, says the Federal Deposit Insurance Corp. (FDIC) in a special alert Tuesday. The counterfeit items display the credit union's routing number, 283980031 and the words "CASHIER'S CHECK" in the top center area. They have a light blue background and bright royal blue borders, with the credit union's name printed in royal blue. Authentic cashier's checks have a light gray-blue background with dull dark blue borders, with the name printed in black ink. Anyone receiving the counterfeit items should contact C-Plant FCU Compliance Officer Carrie Childers at 270-450-7055 or cchilders@cplant.com ...

• SALINAS, Calif. (1/10/08)--Monterey County Employees CU Monday warned members not to fall for the latest e-mail phish attempts targeting the credit union. The e-mails, claiming to be from the credit union and telling county residents they would receive a tax refund, began on Saturday. A second wave, warning recipients their accounts had been compromised, followed. An earlier scam in June offered consumers $20 for participating in a survey. The credit union took measures to shut down the June scam's link and has contacted a website that tracks scams to shut down the links on the new scams. It's online alert to members says it never asks them to provide information such as passwords or personal identification numbers through e-mail (The Salinas Californian Jan. 8 and The Californian.com Jan. 7) ...

• NORCROSS, Ga. (1/10/08)--Associated CU has promoted C. Lin Hodges to president/CEO, announced Timothy F. Kercheval, board chairman, Tuesday. Hodges succeeds George M. Clarke, who retired Dec. 31 after 29 years with the credit union. Hodges joined the $875.4 million asset credit union in 1979 and served as executive vice president and chief financial officer (CFO). He formally was with Exchange Bank in Milledgeville. In accepting the position, Hodges announced that Timothy G. Bridges has joined the credit union as senior vice president/CFO. Bridges previously served as senior vice president and CFO of Georgia Credit Union Affiliates ...

• Click for larger view

  WALNUT CREEK, Calif. (1/10/08)--Pacific Service CU has provided PCs, printers, software and supplies to THE BREAD PROJECT, a nonprofit organization that trains low-income and unemployed people in skills needed for entry-level commercial baking and cooking positions. Students of the project, shown here, will use the equipment to create resumes and conduct employment searches in the food industry. Steve Punch, president of the more-than-$1-billion asset credit union, noted the project helps "educate individuals so they have the ability to earn a living wage." (Photo provided by Pacific Service CU) ...

Market News

MADISON, Wis. (1/10/08)

• The U.S. will avoid recession as the Federal Reserve lowers interest rates more than previously expected, according to a survey of economists by Bloomberg News (Jan. 9). The odds of a recession occurring within the next year are 40%, according to the median estimate of respondents. They expect economic growth to average 1.5% during the first half of this year. Respondents expect the Fed to lower the target for the fed funds rate to 3.5% by the middle of this year. That compares with a rate cut to 4% in the previous poll. Strong export growth and business investment also are expected to help the economy avoid recession ...

• Believing a steep rate cut was needed to avoid recession, three regional Federal Reserve banks sought a larger 50-basis-point cut in the discount rate before the Fed's December policy meeting, according to minutes released Tuesday. Heads of the Boston, Minneapolis, and San Francisco Fed banks wanted the larger rate cut. The Dallas and Kansas City banks wanted to keep the rate unchanged at 5%, while the other seven regional banks sought a 25-basis-point cut. The committee lowered the rate by 25 basis points to 4.75% on Dec. 11. They also cut the target for the fed funds rate by 25 basis points to 4.25%. Economic conditions have deteriorated since that meeting, with the Labor Department reporting last week that the economy created only 18,000 new jobs in December. Most analysts expect at least another 25-basis-point cut when the Fed meets later this month (The Wall Street Journal Online Jan. 9) ...

• Concerned about recession, the Bush administration is considering a stimulus plan that would include tax rebates for consumers and tax breaks for business, say people familiar with the matter. So far, the president has only addressed the housing slump and subsequent economic fallout by proposing a subprime rescue. The major options he now is considering include tax rebates of $500 for people to stimulate spending and a tax break for businesses to encourage investment, say those familiar with the administration's discussions. President Bush plans to present a stimulus package on Jan. 28 during his State of the Union Address (The Wall Street Journal Online Jan. 9) ...

• Consumers plan to curb their spending following the holidays as they face increased household expenses. In a survey by Discover Financial Services, 24% of respondents said they expect to spend less in January--compared with 11% in December. "Not surprisingly, consumers are modifying their spending habits after the holidays," said Margo Georgiadis, chief marketing officer at Discover. "Household expense pressure remains high with nearly 50% of consumers expecting to spend more in this category." She said consumers are curbing discretionary spending and saving more to compensate for higher household expenses. In the poll, just 27% of consumers said current economic conditions are "good" or "excellent." (The Wall Street Journal Online Jan. 9) ...

• Consumers are turning increasingly to their credit cards as the housing slump and credit crunch dampen the availability and appeal of refinancing and home-equity borrowing. Consumer borrowing--excluding mortgages and other debt secured by real estate--increased at an annual rate of 7.4% in November following a 1% increase in October, the Federal Reserve reported Tuesday. Revolving credit, which includes credit cards, jumped at an 11.3% annual rate--after an 8.5% gain and the biggest increase in six months. Nonrevolving credit, which includes loans for autos, rose at a 5.1% rate following a 3.5% decline in October (Associated Press via CNNMoney.com Jan. 9) ...

• Refinancings rebounded last week as long-term mortgage rates continued to decline. The Mortgage Bankers Association's Market Composite Index jumped 32.2% during the week ending Jan. 4 to 706. The Purchase Index rose 14.7% to 414, while the refinancing index surged 53.9% to 2494.2. The refinance share of mortgage activity jumped to 57.7% last week--from 50.9% the previous week. Long-term rates were down. The 30-year, fixed-rate mortgage (FRM) tumbled 32 basis points to 5.73%, while the 15-year FRM plunged 40 basis points to 5.21%. The one-year, adjustable-rate mortgage edged up 4 basis points to 6.04% (mbaa.org Jan. 9) ...

News of the Competition

MADISON, Wis. (1/10/08)

• Countrywide Financial, the nation's largest mortgage lender, said late payments and foreclosures jumped in December. Late payments surged to 7.2% of unpaid balances, from 4.6% a year earlier, while foreclosures doubled to 1.44% of unpaid principal from 0.7%. The housing slump and rising defaults prompted a 70% decline in Countrywide shares last year, and the firm's shares have continued to slump this year--prompting speculation that the firm might file for bankruptcy, a prospect it denies. CEO Angelo Mozilo has called the current housing slump the worst since the Great Depression. The firm has retreated from the subprime market--making just $6 million in subprime loans in December--compared with $3.7 billion in the same month the previous year. Despite its problems, the company said it hopes to be profitable this year (Bloomberg.com Jan. 9) ...

• Responding to the housing slump, discount brokerage E*Trade Financial announced Wednesday that it has sold about $3 billion of mortgage-backed securities and municipal bonds. That follows the sale of the firm's $3 billion asset-backed securities portfolio in November. E*Trade's shares have plunged after it announced the initial writedown in November. The latest sale is expected to result in the loss of about $5 million. E*Trade also announced that it is exiting the institutional trading business. And it has created a special committee to "aggressively" lower risk in its real-estate portfolio. Robert V. Burton, who was recently named the firm's chef operating officer, will head the committee (Associated Press via CNNMoney.com Jan. 9) ...

• In a move to boost capital and retain its AAA credit rating, MBIA Inc said it will cut its dividend and raise $1 billion in a sale of notes. The credit quality of the securities MBIA guarantees against default has declined, and the world's largest bond insurer expects to report losses of $737 million for the fourth quarter. Fitch Ratings said the company's plans may be enough to avoid a downgrade of its ratings. In October, the firm reported a $36.6 million loss due to writedowns of mortgage-backed securities. The company also acknowledged last month that it guarantees $8.1 billion of collateralized debt obligations that it hadn't previously disclosed (Bloomberg.com Jan. 9) ...

• In an effort to cope with the housing slump, Citigroup is combining its separate mortgage units into one business unit. Bill Beckmann, head of consumer mortgage operations, will create a separate residential-mortgage unit that will issue, package, and service loans. Separate units currently conduct those operations. Citigroup hopes the shift will let it cut costs and improve risk assessment by creating a common product set, underwriting guidelines, and back-office functions. Some analysts say the reorganization is a natural byproduct of Citigroup's purchase of ACC Capital Holdings and its Argent debt-collection unit. That unit will become increasingly key, as more borrowers default on their mortgage debt (The New York Times Jan. 9) ...

Consumer brief

• NEW YORK (1/10/08)--If you took out a mortgage or refinanced in 2007, don't forget to deduct your private-mortgage-insurance (PMI) payments on your taxes, if you're eligible. Typically, you pay PMI if the equity in your house is less than 20% of the home's value. If your adjusted gross income (AGI) is $100,000 or less, you're eligible to deduct PMI payments on your taxes. Deductions are phased out up to AGI of $109,000. Congress recently extended the tax break to 2010 and it applies to your primary residence and one other residence, but not to rentals (http://www.wsj.com Dec. 27)...

New white papers discuss team environment, innovative products

MADISON, Wis. (1/10/08)--Two new CUNA Councils white papers can help credit create and thrive in a team environment.

"Thriving in a Team Environment: Leading the Finance Team to Support Credit Union Strategy" from the CUNA Chief Financial Officers (CFO) Council outlines how a CFO or manager can create and maintain a team environment and lead the finance team to support credit union strategy.

The paper also addresses broader aspects and applications of teamwork in credit unions and the different skills that managers must foster to thrive in a team environment.

"Innovative Products That Generate Revenue" from the CUNA Operations, Sales and Service (OpSS) Council discusses product and service offerings that can help credit unions stand out in the financial services industry and attract new members. The paper contains credit union case studies of payday lending alternatives, family credit cards, online savings, student loans and more.

CUNA Council members can receive complimentary copies of the papers. Non-members can purchase copies for $50 each.

For more information, use the links.

Resource Links

Thriving in a Team Environment: Leading the Finance Team to Support Credit Union Strategy

Innovative Products That Generate Revenue

SpendSpace means consumers can compare their spending

MOUNTAIN VIEW, Calif. (1/10/08)--Consumers can compare their spending with others in any major U.S. city or state through a new website feature from Mint.com.

Mint.com, a free website that allows users to track their money online, announced that SpendSpace, a consumer spending tracking solution, is available. With SpendSpace, consumers can see how much they spend on items such as food or mobile phones, compared with other consumers in their area, said Aaron Patzer, founder/CEO of Mint.

"It's helpful information to have when setting budgets, and it's just kind of fun to know where you stand," Patzer said.

Mint.com users register anonymously with a valid e-mail address, and then connect online to their financial institutions. The website downloads transaction data from more than 3,500 financial institutions daily.

An alert system lets users know about suspicious activity, low balances, bank fees and charges and upcoming bills. Mint also provides money-saving suggestions. It says the average user can find up to $1,000 in savings in the first session. All aggregations are anonymous, the company stated.

In a customer survey from December 2007, 87% of respondents said they better understood their spending through Mint, and half had changed their spending behavior. The most frequent change cited was eating and drinking at home more often.

Mint.com also has been awarded PC World's Most Innovative Products Award.

New guide tells how to tap remittance market

SAN FRANCISCO (1/10/08)--Credit unions looking to tap the remittance market can consult a new guide which explains why many immigrants don't use banks.

"Banking in a Global Market," by the Appleseed Network, a non-profit group, provides information for setting up a remittance program. It also compares current models that financial institutions use, such as offering dual ATM cards or partnering with money transfer operators (San Francisco Chronicle Jan. 8).

Western Union and other money transfer companies currently dominate the remittance market, although financial institutions, including credit unions, have begun to participate. Many credit unions offer remittances through the World Council of Credit Unions' International Remittance Network (IR Network).

Many immigrants say large financial institutions target only the wealthy, and as a result, immigrants carry their money and are then targeted by thieves. Moving away from cash-based transactions can benefit immigrants, but it takes time to change consumer behavior, said Ann Baddour, one of the guide's authors.

Financial institutions who don't serve the remittance market will lose out, she told the newspaper.

The average amount of money immigrants send back to home countries has increased. In 2006, immigrants transferred $300 billion, with $23 billion moving from the U.S. to Mexico, the newspaper stated.

Resource Links

International Remittances (IRnet)