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CU model can weather economy Louisiana CUs told

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HARAHAN, La. (1/20/09)--Credit unions have the ability to weather a bad economy, said a Credit Union National Association (CUNA) economist at the Louisiana Credit Union League’s 2009 Economic Outlook program. Steve Rick, CUNA senior economist, opened the program by sharing his insights on the economic outlook and its impact on credit unions, highlighting the many challenges they will face in the coming year. Challenges include the fear of a wrenching recession and possible deflation, rising unemployment, falling home prices, and the financial stimulus package that will soon be implemented by the government. However, the overall the credit union cooperative model is well-suited to weather the economic turmoil, he added. The program aimed to help attendees better understand the current economic situation, where the nation is headed for the rest of 2009, and what the economic struggle will mean to credit unions and their members.
Louisiana Credit Union League’s (LCUL) 2009 Economic Outlook program panelists included (from left): Mike Hooper, chief financial officer, La Capitol FCU, Baton Rouge; Jon Flagg, supervisory examiner, National Credit Union Administration; Donna Wagoner, president/CEO, Ouachita Valley FCU, Monroe; Rhonda Hotard, president/CEO, Louisiana FCU, LaPlace; and panel facilitator Susie Fair, LCUL vice president of member services. (Photo provided by the Louisiana Credit Union League)
One of the program’s highlights was a panel discussion, facilitated by Susie Fair, LCUL vice president of member services, in which panelists shared their perspectives on how current economic conditions will impact credit unions in Louisiana. Panelists included: Mike Hooper, chief financial officer of La Capitol FCU, Baton Rouge; Rhonda Hotard, president/CEO of Louisiana FCU, LaPlace; Donna Wagoner, president/CEO of Ouachita Valley FCU, Monroe; and Jon Flagg, supervisory examiner, National Credit Union Administration (NCUA) . Attendees presented questions to the panelists and each panelist shared thoughts on topics including:
* Specific challenges credit union members are facing during difficult economic times, including delinquency or collections issues; * Asset liability management (ALM) strategies; * NCUA’s exam focus and how it has shifted as a result of the current conditions; * The importance of having a liquidity contingency plan; * Membership growth strategies; * Any impact on credit unions’ credit card portfolios; and * Human resources and hiring opportunities for credit unions.
On the state level, Loren C. Scott of Loren C. Scott & Associates, Inc., former chairman of the Economics Department at Louisiana State University, discussed the opportunities and challenges that Louisiana’s seven metropolitan areas are facing. In the closing session sponsored by Southwest Corporate FCU, Dr. Charles Idol of Asset/Liability Management Consulting & Research, reviewed credit union ALM trends. He noted that rapid share growth and low earnings diluted equity ratios; real estate lending continues to dominate; investment portfolios grew rapidly in 2008; and delinquencies through the third quarter of 2008 were higher in all categories of loans. Idol reviewed projections for Gross Domestic Product growth through 2009, discussed major issues plaguing the economy, and shared his rate outlook for 2009. He made recommendations for ALM strategies for 2009 and shared lessons learned from the credit crisis.

Wisconsins GAC kicks off today

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MADISON, Wis. (1/20/09)--The Wisconsin 2009 Government Affairs Conference (GAC) kicks off today in Madison, running through Wednesday. Conference highlights include:
* Office visits with all 132 lawmakers’ offices; * Activist training for novice activists that will provide guidance on how attendees can concisely and effectively tell their stories at the Capitol; * A panel discussion for veteran activists focusing on the state budget and its $5 billion deficit. Sitting on the panel will be David Schmiedicke, budget director for Wisconsin; Todd Berry, president of the Wisconsin Taxpayers Alliance; Joint Finance staff from the legislature; and Jeff Mayers, from WisPolitics, who will serve as moderator; * Speakers, including new Assembly Majority Leader Rep. Tom Nelson (D-Kaukana), new Assembly Chairman Rep. Jason Fields (D-Milwaukee), Senate Assistant Majority Leader Sen. Dave Hansen (D-Green Bay), Senate Minority Leader Sen. Scott Fitzgerald (R-Juneau), Assembly Minority Leader Rep. Jeff Fitzgerald (R-Horicon), and John Coleman and David Cannon, political science professors from the University of Wisconsin-Madison; and * A reception held to network with lawmakers and state officials.
A copy of the Wisconsin Credit Union 2008 Annual Report, which is a synopsis of how Wisconsin credit unions served their communities and 2.2 million members, will be distributed to all Wisconsin lawmakers at the GAC. To see the report, use the link.

CU System briefs (01/19/2009)

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* FORT WAYNE, Ind. (1/20/09)--A robbery in which a patrolman killed a suspect did not involve a credit union, as reported in trade press. The robbery occurred at People’s State Bank in Avilla, Ind. Several credit unions carry similar names … * GREENSBORO, N.C. (1/20/09)--The Carolinas Credit Union Foundation has awarded a $12,088 Micro Community Grant to the Winston-Salem Rescue Mission to upgrade its facilities. The grant will help improve the kitchen, plumbing and the entrance to the mission's thrift store. From left are: Mike Foster of the mission; Bob Donley of Members CU; Judy Tharp and Suzanne Foster of Piedmont Aviation CU; Jack Braswell of Members CU; and Patty Mauro of Piedmont Aviation CU. Both credit unions are based in Winston-Salem. (Photo provided by the North Carolina Credit Union League) … * FORT COLLINS, Colo. and LOVELAND, Colo. (1/20/09)--Two Larimer County, Colo., credit unions have announced the completion of a merger, effective Jan. 1. Sunrise CU, a $4.1 million asset credit union based in Loveland, has merged into Fort Collins-based Norbel CU, a $109.2 million asset credit union. The merger is not expected to result in any job losses, Sunrise CEO William Becker told the Fort Collins Coloradoan (Jan. 9). According to Ed Bigby, Norbel's CEO, the merger was sparked by a possible $130,000 loss from a single second mortgage that Sunrise financed in a real estate development in Kansas. Sunrise had no delinquent loans on its real estate portfolio. The National Credit Union Administration suggested Sunrise find a partner, said the newspaper. It approached Norbel because it has the same core service philosophy, Becker said … * HARRISBURG, Pa. (1/20/09)--Bob Radakovich, board chairman of Century Heritage FCU, Pittsburgh, died Jan. 12 of cardiac arrest, according to the Pennsylvania Credit Union Association (Life is a Highway Jan. 16). He was 67. He worked for the Department of Defense at its Pittsburgh office, inspecting companies that work for the military. Century Heritage President/CEO Vin Cerasulo said Radkovich's know-how and intelligence were an asset to the business. "It didn't take Bob long, once he joined the board of the credit union as a standby, to work his way up to president. Our members and the members of the board trusted Bob." Services were held Thursday …

Numerica vp on frontline at inauguration

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SPOKANE VALLEY, Wash. (1/20/09)--Numerica CU Vice President of Lending Gene Fitzpatrick is on-site at the 2009 Presidential Inauguration in Washington, D.C. Fitzpatrick will report on his experience to Numerica members provide the Spokesman Review newspaper in Washington state with live updates and observations during the inauguration. Due to the scarcity of hotel rooms in the area, Fitzpatrick will pick up a rented Winnebago recreational vehicle and camp in the parking lot of his daughter’s college campus at American University. Erin Fitzpatrick, an American sophomore, will post hour-by-hour observations regarding the inauguration on Numerica’s Gen-Y Blog. Numerica CU is a $785 million asset credit union, based in Spokane Valley, Wash.

Its a great year for CU mortgage lending

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MADISON, Wis. (1/20/09)--Credit unions may have a great year in mortgage lending, if the end of 2008 is any indication, according to several sources. Even before the current low rates entered the picture, credit unions had seen an increase in mortgage volume, at $56.5 billion for the first nine months of 2008, according to a CU Members Mortgage newsletter cited by the Association of Vermont Credit Unions (AVCU) (Newslines Express Jan. 16.). Compare that to the same period of time from the previous year, and first-mortgage loan volume has increased by a healthy 26%, the company said. In Vermont, credit unions mirrored that first-mortgage growth through Sept. 30, AVCU said, citing data from the National Credit Union Administration (NCUA) 5300 Call Report. "Nearly $90 million in new first mortgages were booked by Vermont credit unions in that time, raising the statewide credit union first mortgage portfolio to more than $580 million," said AVCU. "Add to that an additional $418 million in other real estate/lines of credit, and Vermont credit unions held just under $1 billion in real estate loans at the end of the third quarter of 2008. With rates so low and consumers having apparently lost some faith in giant national financial institutions, this trend shows no sign of slowing down." In Biloxi, Miss., at least one credit union has experienced a significant hike in applications. Keesler FCU said its mortgage applications and inquiries increased 100% during the last two weeks in December--after rates dropped below 5% for a 30-year mortgage. David Dunnaway, vice president of lending at Keesler, told the Sun Herald (Jan. 11), that there's a noticeable rush to refinance, too. Homeowners might want to refinance if they can drop their current rate by 1.25% or more, Dunnaway said, adding they should also consider the costs associated with mortgages, such as title, legal and origination fees, and how long the buyer plans to live in the house. Some members are surprised it is so easy to get mortgages and other loans from their credit union in a tight credit market nationally. Fred White, a member of Niagara County's FCU, Lockport, N.Y., needed a construction loan for the house he's building. He didn't have any trouble getting a construction loan from the credit union. "I told 'em what I needed. They said, 'no problem,'" he told the Union-Sun & Journal Jan. 11). Niagara County's President/CEO Nancy Kasprzak-Whitmore told the publication that getting a loan from a credit union today is about the same as it was before the economy slipped because credit unions "have always been willing to serve members." Credit unions look at what's good for members--sometimes like a parent, she said. Credit unions have made strides in market share, with the industry's share of the first-mortgage market now at 3.9% from 2.5% a year ago, said CU Members Mortgage's newsletter. That "will likely go up in the coming year as consumer awareness of credit unions rise and members continue to rely on the credit unions they know and trust."

CU receives AHP grant from Fed Bank-Atlanta

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ATLANTA (1/20/09)--A credit union is among 85 financial institutions who received more than $43 million from the Federal Home Loan Bank (FHLB) of Atlanta to fund 85 affordable housing projects in 10 states. The grants are offered from the bank’s Affordable Housing Program, which develops owner-occupied and rental housing for very low-, low- and moderate-income families. FHLB Atlanta offers the grants annually. Suncoast Schools FCU, Tampa, Fla., received $600,000 to construct 60 homes in the Hidden Creek at Westlake subdivision. The homes will be built using the USDA Mutual Self-Help Housing Program model. Residents will contribute 600 hours of sweat-equity labor to construct the homes in lieu of a down payment. The FHLB awards ranged from $30,000 to $1 million and were granted to financial institutions in Alabama, Florida, Georgia, Maryland, North Carolina, South Carolina and Virginia.