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Where FHLBs can fit in CU operations, Part 1

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PITTSBURGH (9/15/14)--The Federal Home Loan Bank (FHLB) system, made up of 12 regional cooperative banks that are governed by Congress, offer secured loans, called advances, to local lenders to help finance housing, jobs and economic growth.
This allows the banks to offer their members, which include a growing number of credit unions nationally, liquidity for a financial institution's short-term needs; lower-cost funding for mortgages and asset-liability management; and also funds for housing and community development. 
While the Federal Home Loan Bank system has seen membership rates among credit unions climb over the past few years, the participation rate might not be as high as you think, at least for now.
One reason for the gap could be that some credit unions aren't yet fully aware of the benefits these cooperative banks can provide.
"Many credit unions who are not bank members are unaware of the vast type of products the home loan bank offers," Christina Mihalik, vice president of government affairs for the Pennsylvania Credit Union Association, told News Now .
John Foff, business development manager for the Federal Home Loan Bank of Pittsburgh, says that, in the past, credit unions often only looked within the credit union system when seeking liquidity solutions, though that trend might be changing.
Foff noted that in talking with FHLBs throughout the country, many report credit unions have become their fastest growing segment of membership, especially larger credit unions.
"What they've come to realize today ... is that we can be a business partner in liquidity (as well)," Foff told News Now
At the end of June, 1,246 credit unions were members of one of the 12 regional banks, with 441 as active borrowers. Currently, credit unions comprise 10.3% of FHLB members.
Among those credit unions involved, $30 billion in advances have been secured from the FHLBs, up from $27 billion year-over-year.
Credit unions are also represented on several FHLB boards, with two board members on the FHLB of San Francisco, including Richard A. Heldebrant, president/CEO, Star One CU, Sunnyvale, Calif., with $6.7 billion in assets; and two on the FHLB of Seattle: J. Benson Porter, president/CEO, BECU, Tukwila, Wash., and Robert Teachworth, president/CEO, Denali Alaskan FCU, Anchorage, with $544 million in assets.
Credit union participation may also be on the rise, Foff added, because of the National Credit Union Administration's proposal last year that requires credit unions to ramp up liquidity requirements for emergency situations. 
Although the NCUA did not specifically name the FHLBs as an emergency source of liquidity in its rule as urged by the Credit Union National Association, the rule itself has sent credit unions in search for alternative liquidity resources.
Credit union consideration of FHLB membership has recently found another challenge. Whether it makes sense for a credit union to utilize the banks or not, a recent proposal by the Federal Housing Finance Agency threatens to make it harder for smaller credit unions to access the services they provide in the first place.
If approved, the proposed rule would require all credit unions to carry 10% of assets in residential mortgage loans to retain membership status, which could prove difficult for smaller credit unions.
CUNA is fighting hard against tougher FHLB membership requirements for credit unions. CUNA Deputy General Counsel Mary Dunn earlier this month said CUNA is urging the FHFA to provide relief for credit unions on this point ( News Now Sept. 5).
"The FHLBs are a very important source of liquidity for credit unions in the mortgage marketplace, and it is important all credit unions and their member-owners have access to these resources," Dunn said. "CUNA is working with representatives of the FHFA and three of the banks to assure access."
This is Part One of a series that will cover the relationship between credit unions and the Federal Home Loan Bank system. Part Two, which will run Tuesday, will feature the growing relationship between the FHLB of Pittsburgh and the Pennsylvania Credit Union Association.

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Showcase cultural partnerships during Hispanic Heritage Month

CU System
MADISON, Wis. (9/15/14)--Today is the first day of National Hispanic Heritage Month--an opportunity for credit unions to showcase their involvement and commitment to Hispanic members, communities and businesses.
National Hispanic Heritage Month runs through Oct. 15 and celebrates the histories, cultures and contributions of American citizens whose ancestors came from Spain, Mexico, the Caribbean and Central and South America.
Today--Sept. 15--is significant because it is the anniversary of independence for the Latin American countries of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. Mexico and Chile celebrate their independence days Sept. 16 and Sept. 18, respectively.
"Knowing the cultural makeup of your Hispanic community can influence how and on what days you may choose to celebrate or the content you develop for staff and members," said Anna Pena, client relations manager for Coopera.
Start by welcoming Hispanic members to an open house at your credit union, Pena advised. If you can't do an event on your own, consider partnering with a local business or organization that is trusted by the Hispanic community.
For example, AmeriCU CU, Rome, N.Y., with $1.2 billion in assets, is a sponsor of Tuesday's sixth annual Latino Upstate Summit, which presents networking opportunities with professionals who are immersed in the Latino culture and sharing ideas for connecting with Hispanics.
"Don't be afraid to share your objective with event organizers," Pena said, adding, "Bringing fair, dignified and trustworthy financial services to the Hispanic community is an honorable undertaking." A credit union that is committed to its Hispanic community will tailor its services to meet those needs.
Sebastian Aroca, managing partner with marketing firm Hispanic Market Advisors, suggested companies acknowledge the diversity within their own walls. It is important to recognize the contributions that come from Hispanic employees of different cultures and backgrounds, he said.

Lights, camera, action: League videos spotlight 100M memberships

CU System
MADISON, Wis. (9/15/14)--Credit union leagues across the country are challenging each other to create videos that highlight the 100 million memberships milestone.

Georgia Credit Union Affiliates started the trend by recording interviews with members of $981 million-asset Georgia United CU, Duluth, Ga., who described in their own words what consumers like best about credit unions ( News Now Aug. 28).

The Georgia league challenged the California and Nevada Credit Union Leagues, which responded with a video of its own. The California and Nevada leagues' video features a fictional Mrs. Jones who is deemed the credit union movement's 100 millionth member. Mrs. Jones envisions herself as a newly discovered celebrity, but all that is really required of her is a selfie--and Mrs. Jones is OK with that too.

The League of Southeastern Credit Unions also got in the act with a video featuring two women in a work lunchroom discussing how credit unions have surpassed the 100 million memberships mark. They share the story with some of their colleagues and eventually ask the audience to upload their selfies to .

The Cornerstone Credit Union League, serving credit unions in Arkansas, Texas and Oklahoma, weighed in with a video, featuring credit union members introducing themselves and recommending credit union membership. The video also includes humorous bloopers and outtakes.

The Cornerstone league has challenged the Ohio Credit Union League to come up with a 100 million memberships video of its own. News Now awaits its response.

Also, the Credit Union National Association will host a 100 Million Membership Forum with The Hill Wednesday in Washington, D.C. "The New Financial Services Landscape: A Policy Discussion" will highlight credit union membership growth, the implications of said growth for continued credit union service to members and overall education on the mission and value of credit unions. (See related story: CUNA-sponsored Hill forum to examine legislative, regulatory future for CUs.)

CUNA also offers a 100 Million CU Memberships campaign advocacy toolkit to help educate credit unions and their members about the campaign and its purpose. The toolkit provides a draft email from a CEO to members, an email from a CEO to employees, and a communication plan that contains several recommendations when  advertising the campaign to members. Use the link.

NerdWallet hosting today's TweetChat on CUs, fin. lit.

CU System
MADISON, Wis. (9/15/14)--Hop on Twitter and join NerdWallet for a one-hour TweetChat this morning about the various ways credit unions can, should and do help raise the level of financial literacy among high school and college students.

The Q&A-style chat begins at 11 a.m. (PT), and the discussion can be tracked using the hashtag #CUFinLit and following @NW_Banking.

Credit unions, students, financial literacy organizations and the general public are encouraged to participate and share ideas.

Featured participants include:
  • Ken Worthey, financial literacy and outreach analyst, National Credit Union Administration's Office of Consumer Protection;
  • Gigi Hyland, executive director, National Credit Union Foundation;
  • Tena Lozano, executive director, Richard Myles Johnson Foundation;
  • Rebekah Monroe and Shannon Bartlett, marketing manager and marketing specialist, respectively, Christian Financial CU, Roseville, Mich., with $325 million in assets;
  • Samantha Salazar and David Rodriguez, financial education instructor and financial education manager, respectively, Generations FCU, San Antonio, with $519 million in assets;
  • Jess Bedsole, social media producer, Alliant CU, Chicago, with $8.2 billion in assets;
  • Wendy Loeber, loan officer, CU Community CU, Springfield, Mo., with $94 million in assets;
  • Alysha Klein, Young and Free Florida Spokester, Tropical Financial CU, Miramar, Fla., with $566 million in assets; and
  • Sharon Taller, community outreach manager, Patelco CU, Pleasanton, Calif., with $4.1 billion in assets.

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Maine league educating state CUs, consumers about data breaches

CU System
WESTBROOK, Maine (9/15/14)--The Maine Credit Union League and its credit union service organization, Synergent, hosted a conference call last week to apprise the state's credit unions about the latest information on data security breaches at the Home Depot and other retailers.
Nearly 50 credit unions heard from the league's President/CEO John Murphy and Vice President of Governmental and Public Affairs Jon Paradise, as well as Synergent representatives Rebekah Higgins, assistant vice president of card services;  Gary Glenn, executive vice president; and Ben Jordan, vice president of technology services ( Weekly Update Sept. 12).
"Breaches are happening on a near-daily basis, so remaining vigilant is essential," Higgins noted, adding that in some of the breaches, criminals are taking data to access accounts in other ways.
She advised credit unions: "Monitor, watch and tighten up real-time settings is advice that cannot be stressed enough. We are continuing to take steps to help in any way we can, including making sure we have enough plastics on hand to handle these issues."
The league also has been tapped as a subject-matter expert for various media in the state such as the Portland Press Herald , Sun Journal , Bangor Daily News , WCSH-TV 6 , WLBZ-TV 2 , WMTW-TV 8 and WGME-TV 13 .
"Reinforcing what credit unions are doing to help consumers is an important message that we are getting out and we will continue to do so," Murphy said. "Credit unions are well-positioned by focusing on protecting consumers as a result of these stories." These media opportunities highlight the sophistication and expertise of credit unions, he added.

Australian co-op society expands Filene's global reach

CU System
SYDNEY and MADISON, Wis. (9/15/14)--The Customer Owned Banking Association (COBA), the industry advocate for Australia's mutual banks, credit unions and building societies, is Filene Research Institute's newest Gold Benefactor.

The Gold Benefactor designation signifies that the donor invests $50,000 annually in Filene.

The relationship will mean more collaboration on emerging trends and opportunities common to the U.S. and Australian markets, Filene said.
The new agreement "will bring the cooperatively owned financial services sector closer together, similar to our relationships with English- and French-speaking Canadian credit unions," said George Hofheimer, chief knowledge officer at Filene.
"We're struck by the similarities of challenges--such as awareness, young adult relevance and digital shifts and opportunities including in collaborative models, big data and social media--that credit unions in the United States, Canada and Australia face," said Hofheimer.
COBA Acting CEO Mark Degotardi said the new partnership will allow full access to Filene's library of industry research and collaboration on future research projects.
"The Filene team regularly visits Australia and has delivered passionate and thought-provoking insights on the future of banking services globally and the impact for local institutions," Degotardi said. "The partnership is a timely one as our sector looks for new strategies to introduce more Australians to the customer owned banking model."
Filene and COBA will also collaborate on three new research projects and one research colloquium over the next 12 months.

12 youth selected for CUNA Googolplex board

CU System
MADISON, Wis. (9/15/14)--A dozen students from across the United States have been picked to serve one-year terms as youth board members on the Credit Union National Association's microsite Googolplex: The Credit Union Guide for Student Money Makers .

The site is the youth-focused component of CUNA's personal finance microsite suite, which guides credit union members through the financial decisions they encounter at every stage of life.

"We value the feedback and fresh ideas that we receive from our youth editorial board members," said Rena Crispin, Googolplex managing editor at CUNA. "These bright students help us develop financial literacy tools that speak directly to their peers."

Googolplex features interactive games, videos, blogs and other content related to managing money and real-life issues that help promote financial literacy for youth age 8 to 18.

The newly selected board members will author critiques of stories and games in age-specific sections of the microsite, and at the end of their one-year terms each board member will write an original story for Googolplex.

The Clubhouse Crew for 5-Spot , geared towards elementary school students, are:
  • Audrey, 10, EECU, Fort Worth, Texas, with $1.6 billion in assets;
  • Beca, 8, TruGrocer FCU, Boise, Idaho, with $233 million in assets;
  • Courtney, 10, Andrews FCU, Clinton, Md., with $1 billion in assets; and
  • Erick, 11, STAR CU, Madison, Wis., with $33,000 in assets.
The Super Youth Team for AJ's , aimed at middle school students, are:
  • Reagan, 13, Neighbors CU, St. Louis, with $305 million in assets;
  • Tamiah, 12, State ECU, Raleigh, N.C., with $28 billion in assets; and
  • Priscilla, 14, VyStar CU, Jacksonville, Fla., with $5.1 billion in assets.
The Teenage Panel advising C. Note¸ for high school students, are:
  • Brittany, 17, iQ CU, Vancouver, Wash., with $534 million in assets;
  • Shemar, 17, American Airlines FCU, Dallas, with $5.6 billion in assets;
  • Colby, 14, NuVision FCU, Huntington Beach, Calif., $1.3 billion in assets;
  • Jack, 14, Bethpage FCU, Sea Cliff, N.Y., with $5.6 billion in assets; and
  • Katie, 16, EECU.
To view photos of the new board members, learn more about each student and explore Googolplex , use the link.

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CU System briefs (09/15/2014)

CU System
  • SOUTH BURLINGTON, Vt. (9/15/14)-- Joe Bergeron, president of the Association of the Vermont Credit Unions, has been re-elected to a three-year term on the National Cooperative Business Association (NCBA) board of directors (Newslines Express Sept. 12). Also elected for the first time to the board is Carla Decker, president/CEO, District Government Employees FCU, Washington, D.C., with $51 million in assets. The 22-member board is comprised of cooperative leaders from finance, rural utilities, agriculture, purchasing coops, insurance, investment funds, grocers and housing. The NCBA's 98th annual meeting was held last week in Minneapolis ...
  • FARMERS BRANCH, Texas (9/15/14)-- The Cornerstone Credit Union Foundation's 17th annual golf tournament generated more than $93,800 in net proceeds ( Leaguer Sept. 12 ). Tournament proceeds help the Cornerstone foundation provide resources for financial education initiatives and educational grants, as well as scholarships for credit union professionals and volunteers. "Foundation staff and board of trustees would like to thank this year's sponsors as well as the individual players, volunteers and door prize contributors who helped to make this year's tournament a success," said Courtney Moran, tournament director and Cornerstone foundation executive director ...

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