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News Now Archive
Filed on February 20, 2009–February 22, 2009, published the first business day after.
- GAC launches today; Key issues, speakers featured
- Instant online convention coverage--GAC Blog
- House could vote this week on ‘cramdowns’
- Duke professor backs CU system
- NCUA alert on HMDA filings
- Inside Washington
- CUs participate in America Saves, Military Saves Week
- New WOCCU site matches savings, combats poverty
- Expert: CUs' prepaid cards better than Wal-Mart's
- Filene calls for innovators on economic stimulus initiative
- Chicago Tribune: Don’t overlook CUs for financing
- Vermont offers CUNA’s certified fin counselor training
- $500,000 donation to fund Polish studies chair at Columbia
- Young thieves siphon $62,000 from CU's ATM
- Shot fired in robbery at Heartland CU
- Michigan family thwarts CU's branch plans
- CU System briefs
- Market News
- News of the Competition
- Savings week also encourages responsible spending
- Digital Mailer, CU Realty Services form partnership
- Indiana league selects ad agency
GAC launches today; Key issues, speakers featured
WASHINGTON (2/23/09)—The National Credit Union Administration's (NCUA's) corporate credit union stabilization plan will be among the hot topics getting full attention at the Credit Union National Association (CUNA) Government Affairs Conference (GAC) here this week.
CUNA added a special Monday information session on the plan to offer
GAC participants an up-to-date and comprehensive view of the agency's effort, as well as CUNA's work to lighten the cost burden to credit unions. (See News NowTuesday for coverage of the session.)
CUNA also retooled its annual "Hot Exam Issues" GAC breakout session to focus specifically on the NCUA stabilization plan. Moderated by Kathy Thompson, CUNA senior vice president and associate general counsel for regulatory compliance, the Feb. 24 afternoon breakout panel will consist of six key senior staff from NCUA.
Also this week, NCUA Chairman Michael Fryzel, Vice Chairman Rodney Hood, and board member Gigi Hyland are scheduled to speak during GAC general sessions. They are expected to address the corporate assistance plan in their remarks.
Also on the GAC schedule are key lawmakers, including;
- Senate Banking Committee Chairman Christopher Dodd (D-Conn.);
- House Financial Services Committee Chairman Barney Frank (D-Mass.);
- House Minority Leader John Boehner (R-Ohio);
- Ranking Republican member of the House Financial Services Committee, Rep. Spencer Bachus of Alabama;
- Rep. Carolyn Maloney (D-N.Y.), who heads the panel's subcommittee on financial institutions and consumer credit;
- Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.), key sponsors of credit union legislation; and many more.
More highlights slated for the five-day program include economic commentary from Steve Forbes, editor-in-chief of Forbes magazine, and a political face-off between pundits Paul Begala and Tucker Carlson.
Forbes will offer economic outlook and commentary. He attained national visibility in the political arena both 1996 and 2000 when he campaigned for the Republican nomination for President.
Carlson and Begala will face off over current developments in national news, politics, and world issues. Carlson is a senior correspondent for MSNBC, and Begala is a CNN political analyst and former top aide to President Bill Clinton.
Also, Bob Woodruff of ABC News and his wife, Lee, will provide a poignant start to CUNA's event as they recall the shattering moment when Woodruff was seriously injured by a roadside bomb when assigned to report U.S. and Iraqi security forces near Taji.
The 2009 GAC has settled into the Washington Convention for its second year. For 30 years prior, CUNA's premier conference was held at he Washington Hilton, but burgeoning attendance demanded a larger venue.
Even with the economic pressures facing credit unions this year, attendance has reached 4,200, with 458 first-time attendees.
The larger space has also enabled CUNA to continue for a second year a free Sunday evening concert, featuring the Lt. Dan Band.
The Lt. Dan Band was formed by Chicago composer Kimo Williams and Gary Sinise, actor/musician and star of "CSI New York," a TV show on CBS. "Lieutenant Dan" is the character Sinise played in the 1994 film, "Forrest Gump." The band has completed six tours for the USO and performs regularly for troops.
Use the resource link below for more GAC information.
Also use the second resource link to view North Carolina CU League first video update on GAC. This installment: Why limit member business lending when there is such a need for what credit unions can provide? Read News Now this week for more.
Also, the Michigan Credit Union League will file video reports daily, covering the issues of the day, Hill visits and reaction from CEOs. The reports can be viewed through the league's CUBE TV. Use the link to view the reports.
Instant online convention coverage--GAC Blog
WASHINGTON (2/23/09)--Credit unions are encouraged to check in on the Credit Union National Association's (CUNA's) GAC Blog to get the latest news on happenings at the 2009 Governmental Affairs Conference Feb. 23-26.
More than 4,200 credit union representatives are in town for CUNA's premier conference featuring addresses by top policymakers, and more.
CUNA Editorial Communication Vice President Lisa McCue and Communications Specialist Tiffany Stronghart will provide frequent convention updates.
Also, for full coverage, read CUNA's daily online news service News Now. The CUNA GAC Daily will be distributed to conference attendees and News Now readers will have access to its electronic version.
Use the resource links below to access the GAC Blog and to sign up for News Now headlines via email.
House could vote this week on ‘cramdowns’
WASHINGTON (2/23/09)—The House is expected to vote on a mortgage "cramdown" bill this week and, though changes are expected, Credit Union National Association (CUNA) Vice President of Legislative Affairs Ryan Donovan said Friday it is likely still be unpalatable to credit unions and other lenders.
The House vote would come at the same time more than 4,200 credit union representatives are gathered in Washington, D.C. for the 2009 CUNA Governmental Affairs Conference (GAC). The GAC kicked off Sunday and continues through Thursday.
CUNA President/CEO Dan Mica issued a statement Friday following news that the "Helping Families Save their Homes in Bankruptcy Act" would reach the House floor by the middle of this week. The bill would make changes in the Bankruptcy Code, including allowing judges to change the terms of existing mortgages, and action known as a "cramdown."
"CUNA opposes HR 200 – or any similar bill – which forces credit unions to accept a lower principal on a mortgage loan by the bankruptcy court.
"This measure is overly broad in its application, scope, and duration as it applies to all mortgage loans, unfairly grouping a loan made with strong underwriting standards – such as those made by credit unions -- with a loan made in an unscrupulous manner," the CUNA leader said.
He added, "Credit unions acknowledge that bankruptcy is a legitimate option for eligible borrowers who have no other way to address their indebtedness. We believe that the Bankruptcy Code must fairly balance the rights of both credit grantors and borrowers, and it must recognize the impact that bankruptcy has on the cost of credit to borrowers who do have the ability and determination to repay their obligations.
"This legislation does not meet that test."
CUNA's Donovan added that the situation surrounding the bill remains fluid, and how this issue will be brought to the House floor, and with what other concerns it may be paired, could change.
"There is a very real possibility that the cramdown bill will be combined with our deposit insurance bill [H.R. 786] and other legislation that CUNA supports," Donovan said.
Even still, Donovan speculated that CUNA would continue to strongly oppose the legislation unless significant modifications are made.
"I am not sure that there are very many folks who would consider the prospect of mortgage cramdown and the opportunity to make permanent the increased deposit insurance coverage as equal in importance," Donovan said.
He added, "We will be encouraging opposition to the cramdown bill in the House and asking our legislators to bring the deposit insurance bill up as a stand alone measure."
Duke professor backs CU system
WASHINGTON (2/23/09)— Strengthening credit unions could be an effective way of rebuilding the nation's financial system, a Duke University economics professor told a national TV audience Friday.
Dan Ariely, James B. Duke Professor of Behavioral Economics at Duke in North Carolina, said credit unions have shown they do the right thing and he would support actions to back them.
Ariely, formerly a professor at Massachusetts Institute of Technology, made his remarks on the Lehrer News Hour on PBS. Participating on a panel discussing the country's financial crisis, Ariely brought up the positive nature of the credit union system.
Credit unions, the Duke professor said, represent an alternative banking system in the U.S., one that has done the right thing. He noted that credit unions have been "untouched by all of these problems."
"I think I would personally strengthen them," Ariely said.
Ariely is the author of a number of books, including the currently best-selling "Predictable Irrationality."
NCUA alert on HMDA filings
ALEXANDRIA, Va. (2/23/09)— Credit unions subject to Home Mortgage Disclosure Act requirements for 2008 activity must submit loan/application register (LAR) data to the Federal Reserve Board (Fed) by March 2, 2008.
Noting that date in a recent regulatory alert, the National Credit Union Administration (NCUA) also warned of the possible consequences of a late filing. After March 2, the Fed will provide a list of delinquent filers to NCUA.
Credit unions appearing on this list could become subject to civil money penalty assessments.
A credit union must file HMDA data in 2009 if it meets these three criteria:
- Had total assets as of Dec. 31, 2006 that exceeded $3 7 million, a threshold established by the the Federal Reserve Board;
- Has a home or branch office in a metropolitan statistical area (MSA); and
- Originated during 2007 at least one home purchase loan or a refinance of a home purchase loan secured by a first lien on a one-to-four-family dwelling.
Credit unions with 25 or fewer entries on their LAR may report and submit the data in paper form. However, all credit unions that have more than 25 entries on the LAR must submit their reports in an automated, machine-readable, form.
Use the resource link below to access the NCUA Alert.
Inside Washington
- WASHINGTON (2/23/09)--National Credit Union Administration (NCUA) Chairman Michael E. Fryzel commended President Barack Obama's Homeowner Affordability and Stability plan as a step forward to assist struggling homeowners. "The plan breaks new ground in several important respects, and puts more resources toward helping borrowers with refinancing options," Fryzel said. "And I am gratified to note its similarities to the CU Homeowners Affordability Relief Program, such as the refinancing feature and focus on owner-occupied, non-speculator mortgage holders." Fryzel encouraged credit unions to focus on helping their members use the mitigation efforts. "This pro-consumer focus is a natural fit for the credit union industry," he concluded ...
- WASHINGTON (2/23/09)--The National Credit Union Administration issued a regulatory alert stating that the Federal Emergency Management Agency has released a revised Standard Flood Determination Form. The new form is effective June 16. Credit unions can continue using the previous version, which expired Oct. 31, until the effective date ...
- WASHINGTON (2/23/09)--The Pennsylvania Credit Union Association (PCUA) board has adopted a position on the National Credit Union Administration's (NCUA) corporate credit union stabilization efforts. PCUA is writing Treasury Secretary Timothy Geithner saying that it supports using the Central Liquidity Facility to help corporate credit unions. PCUA also will seek Troubled Asset Relief Program (TARP) funds from the Treasury as a back-up to the National Credit Union Share Insurance Fund. "We hope that the resources of the credit union system are adequate to address the financial condition of corporates, as well as any other stresses that might confront credit unions as a whole throughout the year," said PCUA President/CEO Jim McCormack. "We want to make it clear that our position is that we are seeking TARP only as a back-up" ...
- WASHINGTON (2/23/09)--The Federal Deposit Insurance Corp. (FDIC) has reached three loss-sharing agreements this month, and financial services industry observers expect the agency to reach similar deals with other institutions. Loss-sharing, which was used prominently during the savings and loan crisis, means the FDIC absorbs some of the losses when it acquires a failed financial institution. Though loss-sharing may allow the FDIC to inherit good-performing customers and loans, some industry observers worry that loss-sharing could distract acquiring financial institutions who must deal with troubled assets. The FDIC has engaged in loss-sharing agreements with U.S. Bancorp, Citigroup, Bank of America, and PFF Bank and Trust in Pomona, Calif. ...
- WASHINGTON (2/23/09)--Wall Street is fighting restrictions on executive compensation included in President Barack Obama's economic stimulus package released last week. Financial industry representatives argue that the restrictions are preventing them from filing accurate financial statements (The Hill newspaper Feb. 20). The Financial Services Roundtable also questioned what "highly compensated" means and whether firms participating in a new program from the Treasury and Federal Reserve are required to follow the restrictions ...
CUs participate in America Saves, Military Saves Week
WASHINGTON (2/23/09)--Credit unions and the rest of the nation are celebrating smart savings habits this week. The third annual America Saves Week and Military Saves Week kicked off Sunday and will focus on savings efforts through March 1.
Today at noon EST, America Saves and the American Savings Education Council will release a survey of American's savings habits and progress. It will tell how Americans are responding to the recession, how they are managing everyday, emergency and retirement savings; how savings behavior has changed since last year's survey; progress on debt payments and key savings habits; and attitudes toward various savings practices and the use of tax refunds.
America Saves Week is part of the America Saves campaign managed by the Consumer Federation of America. Last year, more than 75,000 people attended more than 1,800 events promoting savings during the week.
Military Saves is a Department of Defense-level campaign, focusing on encouraging military members and their families to save every month to provide for their immediate and long-term goals. This year, the campaign has expanded to include Military Youth Saves program, geared to youth.
The cornerstone of the Military Saves campaign is the Saver Pledge, a commitment to exercise good financial habits and encourage others to do the same. Savers who enroll online receive electronic newsletters and e-wealth coach advice (U.S. Fed News Feb. 17) . More than 80 defense credit unions and military banks have participated in activities in the past.
Credit unions are participating in the events. For example, Aberdeen Proving Ground FCU, Aberdeen, Md., is a partner in Maryland Saves, a local savings campaign. It runs through March 7 and supports the America Saves and Military Saves national campaigns that encourage individuals and families to build wealth through savings.
In the Maryland Saves campaign, participants will automatically be entered in a drawing to win one of two $250 12-month certificates, the credit union announced.
New WOCCU site matches savings, combats poverty
MADISON, Wis. (2/23/09)--The World Council of Credit Unions (WOCCU) has launched MatchSavings.org to give the public an opportunity to combat global poverty in a new way by matching the savings deposits of the poor in the developing world.
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| Celia Ortiz Ramos, a housewife and mother of one, is saving to repair drafty wooden walls in her kitchen. MatchSavings.org Givers will help her achieve the goal sooner by providing a savings match. (Photo provided by World Council of Credit Unions) |
With the costs of living continuing to rise, the need for reliable savings becomes increasingly vital, WOCCU said.
People living in poverty are desperate to find affordable and accessible alternatives to cover necessary expenses like basic home repair, their children's education, start-up expenses for a microbusiness and healthcare. A formal credit union savings account and a match incentive help working poor families develop regular savings habits, build assets and attain financial independence, WOCCU said.
"Savings are about building wealth," said Brian Branch, WOCCU executive vice president and chief operating officer. "Families are able to and want to build their savings because that provides them with a way to finance their own growth."
MatchSavings.org builds on WOCCU's global development programs. The first group of MatchSavings.org Savers is from rural Mexico, where WOCCU is helping credit unions deliver financial services by motorcycle, bus, boat and foot, directly to marginalized communities.
Here's how MatchSavings.org works:
- Savers open their first savings account at one of WOCCU's partner credit unions in a developing country--currently rural Mexico. Savers establish a six-month savings goal and commit to make regular monthly deposits.
- Givers go to MatchSavings.org, choose which types of savings accounts they want to match (housing, education, microbusiness or health) and make a donation.
- At the end of the saving period, savers receive the givers' match on their savings principal, realize their savings goal and become members of a credit union that will help them reach their financial goals in the future.
As the effects of the economic downturn ripple across borders, givers at MatchSavings.org create a counter-effort. Givers' generosity allows the poor to lift themselves out of poverty through their own efforts and helps them get on a solid path for future, WOCCU said.
As MatchSavings.org grows, WOCCU will expand the program to reach more people, communities and countries through its global network of credit unions. Participants can spread the word through their credit union, service groups, social networks, friends and family.
Credit unions are not being asked to give to the program, but rather to promote it, WOCCU said. Start-up money for the program is coming from private donations to WOCCU's foundation.
For more information and to make a donation, use the link.
Expert: CUs' prepaid cards better than Wal-Mart's
NEW YORK (2/23/09)--An article on a popular AOL website urges consumers to avoid Wal-Mart's "lower-fee" prepaid debit card and check out the cards at credit unions first.
The article, written by Zac Bissonnette for on Wallet Pop (Feb. 18), points out that Wal-Mart is slashing the fees on its reloadable pre-paid debit cards.
However, consumer advocate Remar Sutton, a former Credit Union Magazine columnist on auto lending and author of Don't Get Taken Every Time, noted that while using the Wal-Mart card is better than check cashing "rip off rates, consumers are still paying a monthly fee to use the card, plus other fees.
"Get a free checking account and a free debit card at a credit union before locking yourself into the Wal-Mart card," Sutton told Wallet Pop. "These days, virtually anybody can join a credit union, and virtually all credit unions offer free checking and debit cards."
Filene calls for innovators on economic stimulus initiative
MADISON, Wis. (2/23/09)--Filene Research Institute is asking credit union volunteers to get involved with Filene's Future Focus initiative, a 60- to 90-day review and innovation process focusing on the national economic stimulus package.
The American Recovery and Reinvestment Act is intended to stimulate the U.S. economy in the wake of the economic downturn brought about by the subprime mortgage crisis and the resulting credit crunch. The bill includes federal tax cuts, expansion of unemployment benefits and other social welfare provisions, and domestic spending in education, health care, and infrastructure, including the energy sector.
"Innovation is an inclusive process," said Denise Gabel, Filene chief innovation officer. "Who knows, Filene may get a dozen or three thousand responses. Either way, credit unions and consumers need solutions now."
To deliver the anticipated outputs to policy-makers and credit union decision-makers, help is needed in four areas:
- Discovery--Identifying key areas like housing, lending and energy;
- Ideas--Generating new solutions;
- Shaping--Testing and narrowing the best ideas; and
- Implementation--Bringing new solutions to market.
For more information, use the link.
Chicago Tribune: Don’t overlook CUs for financing
CHICAGO (2/23/09)--Consumers looking for hard-to-find credit in today's economy should make sure not to overlook credit unions as a source for financing, according to a Chicago Tribune column Friday. The item also appeared in Sunday's Los Angeles Times.
For those among the 90 million people who belong to a credit union, there may be mortgage money available for loans, columnist Lew Sichelman wrote.
"Credit unions tend to be overlooked by borrowers, largely because they don't employ a stable of loan officers, and real estate agents rarely recommend them to their clients," Sichelman wrote. "In other instances, many members are simply unaware that their credit unions are in the mortgage business."
He also mentions how consumers can use the credit union locator to find credit unions. See the link.
Vermont offers CUNA’s certified fin counselor training
SOUTH BURLINGON, Vt. ( 2/23/09)--The Association of Vermont Credit Unions (AVCU) Social Responsibility Committee informed credit union manager/CEOs in the state last week about a new program that gives every Vermont credit union the opportunity to have a Certified Credit Union Financial Counselor (CCUFC) on staff within a year.
The Vermont CCUFC Training Program, using the Credit Union National Association's (CUNA) Center for Personal Development resources, offers the opportunity free to every AVCU credit union as a membership benefit, provided the credit union CEO signs an enrollment form that commits at least one full-time employee to the program.
Credit unions with sufficient resources can enroll additional employees to strengthen the core study group and magnify the positive effects and benefits of the program, AVCU said.
The program will utilize CUNA's self-study modules as its training base, supplemented by biweekly conference calls facilitated by project leader Ken King, an instructor at CUNA's Certified Financial Counselor Schools.
King also will lead a one-day conference in Vermont this fall to provide face-to-face counseling skills for students. The plan is for students to achieve their CCUFC designation within a year of the program's planned April inception.
"We are living in unprecedented economic times, and many people are worried about what the future holds," said AVCU President Joe Bergeron. "We already have certified financial counselors at some of our credit unions, but this program will extend those much needed skills statewide to more than 280,000 Vermont credit union members.
"It is our fervent hope that by making this program available to our credit unions at no cost, and without the expense and time needed to attend out-of-state schools, we can immediately help them provide solid financial counseling that will calm the fears of thousands of Vermont consumers," he added.
$500,000 donation to fund Polish studies chair at Columbia
BROOKLYN, N.Y. (2/23/09)--Columbia University will get a new chair of Polish Studies position, thanks to Polish & Slavic FCU (PSFCU), which Friday donated the final $181,000 toward the position's creation.
That brings the total donated by the Brooklyn, N.Y.,-based, $1.89 billion asset credit union toward the program to $500,000 the past five years. Roughly $3 was raised to create the program.
The program will provide the first Polish Studies curriculum at an Ivy League School, according to the credit union (PR Newswire Feb. 20). It will promote cultural and scientific achievements of Poland and the Polish people, and will work with the Council of Polish Supplementary Schools to help administer Polish Language Regents exams, taken annually by students attending the ethnic schools.
PSFCU is the largest ethnic credit union in the U.S. and was one of the first to sign onto the project, with an initial donation of $20,000.
"This is a prime example of what we like to call the 'credit union difference,'" said PSFCU CEO Bogdan Chmielewski. "We are deeply entwined in the lives of Polish-Americans, and we feel a strong responsibility to improving and celebrating their lives and heritage. We truly feel we make a difference in the lives of our members, and that's something no bank can do."
Young thieves siphon $62,000 from CU's ATM
ARLINGTON, Wash. (2/23/09)--Police are investigating a series of thefts at a Washington state credit union's ATM where thieves tricked the machine's software program into doubling the funds they withdrew, while giving credit to only half the amount.
The machine, at Boeing Employees CU (BECU) in Smokey Point, Wash., dispensed nearly $62,000 over several months (The Seattle Times Feb. 13).
Police used surveillance cameras at the ATM and records of the withdrawals to break the case. One 17-year old girl, who was caught on camera taking $16,000 out of the ATM, confessed and led police to other suspects, including her 18-year-old boyfriend who withdrew about $10,000.
The thieves tricked the software program so that the machine did not recognize it had dispensed money and instead repeated the withdrawals. A $100 withdrawal would net the thieves $200. They used a combination of personal accounts and prepaid debit cards to access the funds.
The credit union said the machine has been fixed.
Shot fired in robbery at Heartland CU
VERONA, Wis. (2/23/09)--A suspect fired a handgun while robbing the Verona, Wis., branch of Heartland CU Thursday, but no one was injured, police said.
The suspect--a hooded man in his late 20s--fired one shot during the robbery (Wisconsin State Journal Feb. 20).
The suspect fled the robbery scene on foot with an undisclosed amount of cash. Police said a vehicle driven by another man could be involved.
The robbery resulted in the Verona School District locking down all of it schools and barring outside visitors.
Heartland CU, based in Madison, Wis., has $146.7 million assets.
Michigan family thwarts CU's branch plans
GRAND RAPIDS, Mich. (2/23/09)--The Grand Rapids Board of Zoning Thursday upheld an earlier decision by the city Planning Commission to reject a credit union's proposal to build a branch because of concerns about traffic congestion.
Mike Buwalda and his family opposed Consumer CU's proposal to build the branch, which would have been located behind their home. Three of his school-aged children canvassed the neighborhood and collected more than 150 signatures opposing building on the site (mlive.com Feb. 20).
The credit union had hoped to build a branch with three drive-thru teller lanes and two ATM lanes through the back of its site. Opponents argued that a bank branch across the street from Breton Village could create too much traffic congestion in a neighborhood already served by seven bank branches.
They also said the drive-thru lanes would create too much noise and headlight glare behind their homes.
The zoning board voted 8-0 to uphold the Planning Commission's decision to deny the branch.
The credit union, which is headquartered in Kalamazoo and has $262.8 million in assets, told the newspaper it would not submit new plans for the site or appeal the board's ruling, but would "do what's right for the community and the neighborhood."
CU System briefs
- DEARBORN, Mich. (2/23/09)--Dearborn police and the Federal Bureau of Investigation were looking for a man who left a package inside a branch of Dearborn Financial CU during a robbery Thursday morning. The robber said the package contained a bomb. However, it contained no explosive materials, said police. Authorities evacuated the area while the package was dismantled. Police believe the suspect left the package to help secure his escape after the robbery, which occurred after 9:45 a.m. He fled with an undisclosed amount of cash (The Detroit News Feb. 19) ...
- PANAMA CITY, Fla. (2/23/09)--Tyndall FCU announced a casting call for its new television campaign. The deadline is today for submitting photos. The $884.4 million asset, Panama City-based credit union invited members and employees of all ages to submit photos for the pre-selection casting process. It's looking for members to act as a military family; older retired couple; three recent college graduates; a single male or female who is in the 20s; a family with three or four children; an intergenerational family; a dock or boat worker; a mid-40s male; and early 30s professionals ...
- DUBLIN, Ohio (2/23/09)--The Ohio Credit Union Foundation has awarded a $5,000 disaster relief grant to the World Council of Credit Unions for its Disaster Relief Fund for Australia, where a number of credit unions' employees and members lost their homes to brushfires last month (eLumination Newsletter Feb. 18). The fires killed at least 200 people, destroyed at least 7,000 homes and at least a dozen villages ...
- GORHAM, Maine (2/23/09)--Maine credit unions raised more than $25,000 in the 15th Annual Dr. Noel Paradise Memorial Swish-Out Childhood Cancer Challenge. The event, presented and coordinated by
Maine's credit unions, is named for the late father of Jon Paradise, governmental and public affairs manager at the Maine Credit Union League. It was the second straight year the event has raised more than $25,000. Since its inception in 1994, it has raised more than $148,000 for the Maine Children's Cancer Program. The basketball tournament attracted 32 co-ed teams. University CU was one of several credit unions that participated. The team was led by Captain Joe Gervais, center, executive vice president. (Photo provided by the Maine Credit Union League) ...
- PEMBROKE PINES, Fla. (2/23/09)--School budget cuts have played up the importance of financial education programs, says Power Financial
CU, a Pembroke Pines, Fla.-based credit union that has joined forces with the city's Chapel Trail Elementary to hold monthly Gator Teller Days during lunchtime. Here, students line up to make their monthly deposits at a mock teller station. A student teller, assisted by a credit union employee, takes the deposits. "By giving children these real-life financial experiences at an early age, we hope to educate them about money management and the responsibilities that come with it," said Allan M. Prindle, president/CEO of the $480 million asset credit union. "We believe that it's especially imperative now as our local public schools are facing severe budget cuts--they will rely on members of the community and we're glad to offer our assistance," he said. (Photo provided by Power Financial CU) ...
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ALBANY, N.Y. (2/23/09)--Philip Faller of Clifton, N.J., has joined the Credit Union Association of New York as a management consultant. He will work with credit unions in Queens, Manhattan, Westchester and Long Island on strategy development and operations, and act as a liaison between credit unions and the association. Faller previously was a senior business consultant for Members United Corporate FCU. Before that, he was a regional sales executive for Lorimac Corp., where he worked with credit unions to develop marketing plans for mortgage support services ...
Market News
MADISON, Wis. (2/23/09)
- Consumer prices rebounded last month amid higher energy costs, the Labor Department reported Friday. The Consumer Price Index (CPI) rose 0.3% in January, after declining in each of the three previous months. The energy index jumped 1.7% in January, the first increase in six months, while the food index edged up 0.1%. Consumer prices were unchanged over the 12 months ending in January. That's the first time it hasn't increased since 1955 (Bloomberg.com Feb. 20). Excluding food and energy, the core CPI was up 0.2% in January and 1.7% over the last 12 months, the smallest gain since March 2004. The increase in the core last month reflected higher prices for vehicles, clothing, education, and medical care. Analysts expect consumer prices to remain tame this year amid weak economic growth. However, the government's huge stimulus package and the Federal Reserve's massive asset purchases could spark an inflation surge over the long term ...
- Mortgage rates followed bond yields down last week, according to Freddie Mac. The average 30-year, fixed-rate mortgage (FRM) fell 12 basis points to 5.04%, while the 15-year FRM dropped 13 basis points to 4.68%, and the one-year, adjustable-rate mortgage (ARM) declined 14 basis points to 4.80%. "Mortgage rates followed bond yields lower this week as recent economic reports suggest the economy is still slowing, which reduces the future threat of inflation," said Freddie Mac Vice President and Chief Economist Frank Nothaft. He noted that new-home sales declined to a record low in January. "Although home builder confidence ticked up in February from a record low, builder expectations of sales over the next six months hit a record low since it was first published in January 1985." That's according to a report by the National Association of Home Builders. A year ago, the 30-year FRM averaged 6.04%, while the 15-year FRM stood at 5.64%, and the one-year ARM was at 4.98%. For CUNA's Daily Financial Rates, use the link. ...
- Jumbo-mortgage loan defaults are increasing at the fastest pace in more than 15 years as the economic slump hits wealthier borrowers. An estimated 2.57% of prime borrowers who obtained jumbo loans in 2008 were 60 days or more overdue on their payments--the highest since at least 1992, according to LPS Applied Analytics. That's nearly twice as much as the delinquency rate for 2007 borrowers. The rise in delinquencies on jumbo loans means they will be more difficult to obtain, and more expensive. Jumbo lending slowed to $11 billion, or 4% of the mortgage market, during the fourth quarter--the lowest quarterly total since Inside Mortgage Finance began tracking the statistics in 1990. In comparison, jumbo loans made up 14% of mortgage originations in 2007. The difference between the jumbo interest rate and the prime conforming rate was 181 basis points on Feb. 18, according to Bloomberg statistics. That compares with about 20 basis points for the past "several decades," according to BanxQuote CEO Norbert Mehl (Bloomberg.com Feb. 20) ...
- Microsoft Corp.'s plan to lay off U.S. workers after lobbying for more foreign-worker visas is making some employees and lawmakers angry. Microsoft, which uses more H1-B guest-worker visas than any other company in the U.S., is laying off about 5,000 workers. Other big users of the visas--including Intel Corp., International Business Machines, and Hewlett-Packard--also are cutting jobs. Senator Chuck Grassley (R-Iowa) sent a letter to Microsoft after the firm announced the layoffs, demanding that CEO Steve Ballmer fire visa holders first. Despite the layoffs, Microsoft plans to hire 2,000 to 3,000 workers over the next year-and-a-half. Some of the workers hired certainly will be on visas, said company spokeswoman Ginny Terzano. She declined to say how many laid-off workers were on visas (Bloomberg.com Feb. 20) ...
- General Motor's Stockholm-based Saab subsidiary went into court protection from creditors Friday so the unit can be spun off or sold by its U.S. parent. GM hopes the bankruptcy reorganization will ready Saab for a sale, said GM spokesman Chris Preuss. However, the Swedish government rejected a request from GM to inject money into Saab. In its restructuring, GM estimates it will need as much as $30 billion in additional funds from the U.S. Treasury Department to keep it afloat. The automaker plans to cut another 47,000 jobs worldwide and shut down five more factories in the U.S. GM is seeking about $6 billion in support from the governments of Canada, Germany, Britain, Sweden and Thailand to support its foreign operations in those countries (Associated Press via Yahoo! News Feb. 20) ...
News of the Competition
MADISON, Wis. (2/23/09)
- Many unemployed workers are paying bank fees to obtain access to their unemployment benefits, according to an analysis by Associated Press (Yahoo! News Feb. 20). Thirty states have agreements with banks including Citigroup, Bank of America, JPMorgan Chase, and US Bancorp. Several states require the unemployed to use debit cards to access benefits. Banks charge fees for withdrawals and phone customer service. Some also charge overdraft fees as much as $20, although they could simply decline charges. According to their agreements, some banks also earn money on the state deposits. With job losses mounting, the profit picture for banks is soaring. States paid $2.8 billion in unemployment benefits via debit cards in 2007, up from just $4 million in 2003, according to Mercator Advisory Group. The consulting firm predicts that total will jump to $10.5 billion by 2010. States using banks to distribute benefits save money by not having to print and mail checks. Banks say they could forgo charging the unemployed fees if the states picked up administrative costs ...
- Bank of America Chairman/CEO Kenneth Lewis has received a subpoena from the New York State Attorney General's office, related to an investigation of whether the bank violated state law by withholding information from investors, a source familiar with the matter told CNN (Feb. 20). Attorney General Andrew Cuomo has accused Merrill Lynch, which was acquired by Bank of America last year, of secretly granting huge bonuses before it reported a large loss for the fourth quarter. It "appears that, instead of disclosing their bonus plans in a transparent way as requested by my office, Merrill Lynch secretly moved up the planned date to allocate bonuses and then richly rewarded their failed executives," said Cuomo. Merrill reported a $15.31 billion net loss for the fourth quarter. Bank of America reported a $1.79 billion loss. Bank of America has said it urged Merrill to reduce bonuses. But Merrill was an "independent company" when the bonuses were awarded, said Bank of America spokesman Scott Silvestri ...
- Bank of America is rebranding its Countrywide Financial mortgage unit as Bank of America Home Loans. The Charlotte, N.C.-based bank, which acquired the struggling subprime lender in July 2008, hopes to put some distance between the tarnished name and itself through the move. BofA plans to hire about 1,000 people for the mortgage unit and shift 500 current employees to mortgage processing from home-equity processing, said Barbara Desoer, head of the mortgage unit. She said 7,500 layoffs related to the integration of the two firms still are ongoing. BofA's stock has struggled since the company received $45 billion in government bailout money. Its stock has traded between $3.77 and $43.50 a share over the past year. The bank already has taken writedowns on Countrywide's assets, said Desoer. However, Friedman, Billings, Ramsey Group analyst Paul Miller said the bank still may have to absorb $30 billion in further losses related to Countrywide (The Wall Street Journal Online Feb. 19) ...
- The performance of credit card-backed securities should improve with the federal government's $787 billion stimulus package, because of the close tie between unemployment rates and chargeoffs, said Moody's Investors Service. According to a report by the ratings agency, the chargeoff rate on receivables jumped to 7.7% in December when the unemployment rate hit 7.2%. In comparison, the chargeoff rate was 5.1% in December 2007, when the jobless rate was just 4.9%. Moody's expects the economy to stabilize by year-end. But "unemployment and credit conditions will not reach their worst until next year" (CardLine via American Banker Feb. 20) ...
Savings week also encourages responsible spending
ALEXANDRIA, Va. (2/23/09)--Saving money goes hand in hand with responsible spending during tough economic times, and America Saves Week--which ends Sunday--focuses on both.
Consumers came close to saving more money in the last three months of 2008 than in 2005 and 2006 combined. The personal savings rate jumped to 2.9% of disposable personal income as consumers squirreled away $310 billion in the final quarter of 2008 (fool.com Feb. 12).
While the increase in the personal savings rate is a step in the right direction for consumers, experts agree that the savings rate will need to climb to at least 6% to be an adequate amount for people to rely on during tough economic times (Businessweek.com Feb. 15).
So, how can you save and spend responsibly? For the third year in a row, hundreds of local and national organizations promote better savings and spending habits through events, positive press, and the Internet during America Saves Week. Visit Americasaves.org to enroll and make your dreams a reality.
In addition to the nformation provided through America Saves, here are a few tips to help you improve your savings habits:
- Re-evaluate spending. You may find extra money to sock away into savings. For example, you could skip one pizza a week, downgrade your cable package, or use the library instead of purchasing books.
- Look for layaway. Layaway programs provide an alternative to using your credit card. You pay a small fee up front, make regular interest-free payments over a period of time, and take the item home from the store once you've paid the full purchase price. But there are downsides to layaway. Not every retailer offers it, and typically there are cancellation fees and returned-check fees. Make sure that you're able to make the payments over the agreed time, and check the store's layaway policy before you plunk down your cash.
- Automatic deductions. Specify an amount to be automatically deducted from each paycheck and deposited directly into your savings account. Before you know it, you'll forget that the amount is being deducted from your paycheck and your savings will continue to accumulate. Ask the credit union or your employer how to set up the automatic transaction.
For more information, read "10 Ways to Spend Smarter," "A Dollar Saved is Two Dollars Earned" and "Living Within Your Limits" in MoneyMix: Launch Your Life.
Digital Mailer, CU Realty Services form partnership
HERNDON, Va., and SCOTTSDALE, Ariz. (2/23/09)--Digital Mailer Inc. and CU Realty Services LLC have teamed up to help credit unions grow their mortgage lending business.
CU Realty, a Scottsdale-based credit union service organization, connects participating credit unions with approved real estate agents to create home buying and selling opportunities for credit union members. It works with 80 credit unions in 19 states.
DigitalMailer, an e-marketing firm serving credit unions nationwide, will work with CU Realty to increase the awareness about participating credit unions.
Through the program, DigitalMailer will co-brand members' e-mails to reflect participation by their credit union and CU Realty. "Members want to know they are dealing with their credit union, and now there will be no confusion," said Ron Daly, DigitalMailer's president/CEO.
According to Tina Powers, CU Realty's chief operating officer, DigitalMailer will manage the look and content of the program's e-mail component and track information and results.
DigitalMailer will use its Automatic Relationship Builder, an e-mail engine that targets members with customized e-mails based on their in-market actions, needs or customer profiles. It also will employ a certified e-mail delivery system to maximize in-box delivery rates and incorporate drip e-mail schedules that regularly place messages in front of members.
The CU Realty program builds a bond between credit unions and realtors, who will help educate members about their credit unions' real estate and mortgage programs. Powers said more than 700 real estate agents are on the waiting list to participate.
"Our goal is to help credit unions become the first point of contact for members who are considering buying and/or selling a home. We help drive more business back to the credit unions, thereby closing more mortgages and increasing the awareness of our credit union partners," Powers said.
Indiana league selects ad agency
INDIANAPOLIS (2/23/09)--The Indiana Credit Union League has selected Jackson Integrated as its advertising agency to launch a statewide consumer campaign promoting the benefits of credit union membership.
Jackson Integrated has developed a campaign under the "You Belong Here" theme, which taps into consumers' need in unsettling times for financial security and the advantages of belonging to a credit union, league President John McKenzie said.
"The opportunity to help the Indiana league build awareness of credit unions and the advantages that come from membership is an opportunity that arose out of a pretty scary time for a lot of people," said Dave Reyburn, Jackson Integrated creative director. "This wasn't a time to be clever or lighthearted; we wanted to send a message that there still are institutions that inspire trust and confidence."
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