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SunCorp, Alloya to merge

CU System
WESTMINSTER, Colo. and WARRENVILLE, Ill. (8/1/14)--System United Corporate FCU (SunCorp), Westminster, Colo., has announced its intent to merge with Alloya Corporate FCU (Alloya), Warrenville, Ill.
 
SunCorp President/CEO Tom Graham said the announcement comes after "an extensive process of strategic planning and due diligence by the SunCorp board, aimed at finding the best means to deliver excellent cooperative financial services to SunCorp members. The board and management clearly saw Alloya as the best partner to help our members grow and succeed in today's competitive marketplace."
 
The merger still must be approved by the National Credit Union Administration (NCUA). Graham said he expects a member vote on the merger in February, shortly after expected regulatory approval. Prior to voting and the approval process, SunCorp plans to host multiple town hall meetings throughout the Rocky Mountain region.
 
"This merger with SunCorp clearly enhances the value that all of our members will receive," said Todd Adams Alloya president/CEO. "Combining both organizations strengthens Alloya and helps us to assure a continued, long-term cooperative value to all credit union members from coast to coast. Retaining many key staff of SunCorp also enhances our leadership and service delivery strengths, including member contact staff in all four U.S. continental time zones."
 
As part of the merger agreement, Alloya has committed to retaining SunCorp's office in Denver. It will also retain member-facing staff to further grow relationships with SunCorp's members in Colorado, Utah, Wyoming, Nebraska and California. Both boards have agreed to governance provisions for merger that include two board seats, and committee representation from former SunCorp board members.
 
The next step after the completion of due diligence would be the execution of a definitive merger agreement by both corporates and submission of an application for merger to the NCUA.

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Study: 35% of American borrowers in collections

CU System
WASHINGTON (7/31/14)--Thirty-five percent of adults have a debt in collections reported in their credit files, an Urban Institute study shows. But while the 35% figure is definitely cause for concern, it may be more a reflection of aftereffects from the recent recession than a long-term measure of household financial health, a Credit Union National Association economist advised.
 
"The depth and duration of the Great Recession left many out of work and/or underemployed--and that contributed to a huge surge in defaults--reflected in ongoing collections," Mike Schenk, CUNA's interim Chief Economist told News Now . "More recently, however, unemployment has declined from a cyclical high of 10% to 6.1% today and households collectively reflect substantial improvements in their financial position.  The stock market is trading near all-time highs and home prices have rebounded lifting the value of household financial assets."
 
The study, conducted with Encore Capital Group's Consumer Credit Research Institute, found 77 million Americans owed an average of $5,200 in September 2013.
 
Nevada, hit hard by the housing crisis, tops the list of states: 47% of people with a credit file have reported debt in collections. The state also has the highest average collections debt, $7,198.
 
Twelve other states (11 in the South) and the District of Columbia top 40%: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, New Mexico, North Carolina, South Carolina, Texas and West Virginia. On the low end, the Midwest's Minnesota, North Dakota, and South Dakota have about 20% of residents with reported debt in collections.
 
Debt in collections involves a nonmortgage bill--such as a credit card balance, child support obligation, medical or utility bill, parking ticket, or membership fee--that has been reported so far past due that the account has been closed and placed in collections, often with a third-party debt collection agency. This debt can remain in a person's credit file for seven years. Some consumers become aware of collections debt only when they review their credit report.
 
While it's true that most households carry debt--according to the Federal Reserve 75% of families carry some form of debt--Schenk said it's also is true that debt loads have been declining: Total debt outstanding peaked at roughly 125% of disposable income at the start of the recession, but declined to 98% of take-home-pay at the end of the first quarter 2014--a level not seen since 2002.
 
"With improving asset values and lower debt loads household net worth has increased dramatically and now is at the highest level ever--even after adjusting for inflation," Schenk told News Now . "These improvements have translated to substantial declines in loan delinquencies and loan defaults--with both banks and credit unions now reporting levels in these measures that are near pre-recession norms."

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#CUNAChat takes CU awareness to Twitter

CU System
WASHINGTON (8/1/14)--As credit unions approach the 100 million membership milestone, the Credit Union National Association  took the credit union awareness conversation to the Twittersphere Thursday afternoon.
 
CUNA hosted credit unions, volunteers and member-advocates as participants in its latest #CUNAchat on Twitter.



CUNA posted 10 questions for participants, focusing primarily on the meaning of credit unions and how they serve their communities. Chat participants responded with a barrage of tweets that provided a litany of reasons for consumers to join the credit union movement.
 
"This chat shows the power of the movement, coming together to raise awareness to consumers about credit union structure, community involvement and benefits of membership," said Amaia Kirtland, CUNA social and digital media manager.

"Reaching 100 million members is a significant milestone for all of us who love credit unions. Twitter chats help connect individuals to each other to learn new things and to develop new interests.  The cooperative nature of credit unions amplifies the reach of our message, that we are the preferred financial institution for 100 million credit union members and other American's should use a credit union for their financial services needs as well."
 
The 10 questions posed by CUNA:
  • What is a credit union?
  • Who is eligible to join a credit union?
  • What makes a credit union a different kind of a financial institution?
  • How is the credit union's structure/different from a bank's?
  • What are the benefits of being a credit union member?
  • How do credit unions impact their communities?
  • How do members control their credit unions?
  • Why are you a credit union member?
  • Why should consumers join a credit union?
  • How do you find a credit union that's right for you?

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Non-traditional entrants topic of World Conference panel

CU System
GOLD COAST, Australia (7/31/14)-- As non-traditional market entrants rapidly become many consumers' preferred financial service providers, credit unions must learn how to engage and adapt to stay in the race, panelists advised at the World Credit Union Conference in Gold Coast, Australia Wednesday. The conference is sponsored by the World Council of Credit Unions.
 
Click to view larger image Non-traditional market entrant spokespersons joined together for a lively panel discussion at the World Credit Union Conference Tuesday. Participants included, from left, Effie Zahos and Alan Shields, Australia; Alex Moven, United States; and Amy ter Haar, Canada. 
Dubbed "Catching the Disruption Wave: 'Three Big Ideas' for Serving a Radically Changing Marketplace," the panel brought together three primary market disruptors from Australia, Canada and the United States to give an outside perspective on credit unions' future.
 
Panelists included Alan Shields, RFi Intelligence co-founder and managing director, from Australia; Alex Sion, president of Moven president, from the United States, and Amy ter Haar, Flow Inc. CEO, from Canada. Effie Zahos, Money magazine editor, Australia, moderated the panel.
 
Topics focused on the keynoters' "big ideas" regarding the future of financial services as payments, finance and commerce emerge for a multi-dimensional consumer marketplace. All sides admitted that credit unions have a chance to capture and capitalize on the advantages of the disruption wave, with a need to differentiate their products and value propositions.
 
Click to view larger image "We are in a world where the app should be a credit union's product, not plastic, branches or telephone services," said Moven's Alex Sion.
"This is an existential moment for credit unions ... to redefine your basic product and core value proposition," said Sion, who asked the audience to reconsider his app-centric business as a potential partner, rather than a disruptor. "Credit unions must ask themselves what ... family and community mean in this digital era. The future of the model is to maintain the community aspect, but disrupt the physical distribution model."
 
To some panelists, the best practice model could be achieved through shared platforms among different credit unions, and potentially nontraditional market entrants.
 
"We need to get connected if we want to [financially] include everyone, everywhere. It's not us versus the banks. It's lateral and peer-to-peer," ter Haar said, noting credit unions' mission to provide nondiscriminatory financial access to all. "We are stronger together."

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Mass. Senate advances investment bill

CU System
MARLBOROUGH, Mass. (8/1/14)--Wednesday evening the Massachusetts Senate advanced a bill updating the list of permissible investments for state-charted credit unions, which would be the first substantive update to statutory investment provisions in decades, the Massachusetts Credit Union League reported.
 
The bill streamlines the petition process for the state Commissioner of Banks to add permissible investments available to state chartered credit unions ( CUScan July 1). The measure also updates criteria to add permissible investments, organizes the criteria into one location within Chapter 171, and adds certain "prudent person" investment authority.
 
The Massachusetts Credit Union Share Insurance Corporation's (MSIC) legislation (House 4112) also advanced and authorizes its ownership of real estate and creation of subsidiaries, expands its investment authority, and permits investments in credit union service organizations.
 
Both bills were engrossed in the Senate and have already been engrossed by the House of Representatives. Final enactments in both houses are the next step before the legislation is sent to the Governor for signature. The league continues its advocacy on House 4139, regional branching legislation, and other measures for the benefit of credit unions and their members. The legislature was scheduled to be in formal session Thursday in both the House and Sena te.
 
"We are pleased to see legal list and regional branching legislation continue to advance," said league President Paul Gentile. "These are part of our strategic efforts to improve the operating environment for credit unions so they can better serve members."

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Utah credit unions give $91,800 to local schools

CU System
SALT LAKE CITY (8/1/14)--The Utah Credit Union Association's 100% for Kids Credit Union Education Foundation awarded more than $91,800 in grants to state schools during the last school year.
 
Click to view larger image Students at Columbia Elementary School in Utah received iPads through a 100% for Kids Credit Union Education Foundation grant. (Utah Credit Union Association photo)
Nineteen districts received the funding for various projects throughout the year. 
 
The foundation grants go mostly toward supplies for the schools' core curriculum.  "We review several grant applications each quarter, looking for those that will impact the greatest number of students in the greatest possible way," said Liz White, foundation director. "As we've watched the trend lean toward technology-based resources, the foundation has awarded several grant requests for iPads and similar equipment."
 
In addition to iPads, schools across the state received funds for musical  instruments, books and science equipment.
 
"People helping people is what it's all about," said Scott Simpson, Utah Credit Union Association president/CEO. "In the true spirit of the original credit union philosophy, Utah's credit unions are giving back to the people in their communities through 100% for Kids. Every donation, large or small, goes directly to help teachers create the best classroom experience they can for their students."
 
The 100% For Kids Utah Credit Union Education Foundation was formed by the Utah Credit Union Association with a mission to improve education in Utah by enhancing and expanding classroom level resources and programs. The foundation has donated over $5 million since its inception in 2002, contributing to all of Utah's 40 school districts. All of the funds donated go directly to teachers for use in their classroom. 

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CUNA Council white paper explores big data

CU System
MADISON, Wis. (8/1/14)--A new white paper from the CUNA Marketing & Business Development Council explores how credit unions can harness big data to tell stories, create new business, and pursue revenue and growth opportunities.
 
Big data is defined as "a collection of data from traditional and digital sources inside and outside your company that represents a source for ongoing discovery and analysis," according to Lisa Arthur, a Forbes contributor. "Big Data: Telling Powerful Stories and Expanding Growth and Relationship Opportunities," describes how credit unions can look at their data, ask questions and make informed business decisions.

The challenge is that for most credit unions, the data already exists and is simply waiting for its story to be told. Cathy Graham, vice president of marketing, $3.9 billion asset Desert Schools FCU, Phoenix, recommends credit unions start with these steps;

 

  • Start with data you already have
  • Identify six-month goals;
  • Approach it in bite-size chunks;
  • Identify some smaller steps;
  • Constantly clean up the data;
  • Add to the data; and
  • Start with small goals, not the end goal.
As a cooperative industry, Graham adds, credit unions can partner with one another in this effort. "Many of the marketers who've worked with big data would be happy to share best practices with those who aren't as far down the path."

"Start small, and in area where you can achieve a big impact," said Anne Legg, senior vice president, business strategy and innovation at Third Degree Advertising. She recommends starting with loans, because of the opportunity for data insights to benefit the bottom line.

 

CU System briefs (08/01/2014)

CU System
  •  Des Moines, Iowa and Seattle, Wash. (8/1/14)-- The Federal Home Loan Bank of Des Moines and the Federal Home Loan Bank of Seattle announced Thursday that they have entered into an exclusivity arrangement regarding a potential merger of the two banks.  A merger would create a combined entity that would provide funding for more than 1,500 member financial institutions, including credit unions, over 13 states, as well as the U.S. territories of American Samoa and Guam and the Commonwealth of the Northern Mariana Islands. The mission of the FHLB system is to fund housing, and the economic and business development needs of its member institutions and, in turn, their members' communities. The merger would require approval from the FHLBs' regulator, the Federal Housing Finance Agency, as well as the member-owners of FHLB Des Moines and FHLB Seattle. ...

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