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First half of 2010 saw challenges opportunities for CUs

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MADISON, Wis. (1/3/11)--As credit unions turn to a new year, News Now took a step back to review credit union news throughout 2010. Later this week News Now will publish its Top 20 stories for 2010. Meanwhile, staff reviewed the top stories each month to glean a quarter-by-quarter account of the movement's activities. Contrary to expectations, the agenda wasn't all corporate restructuring and lifting credit unions' member business lending caps. News stories reflected both challenges for credit unions and opportunities to press their case and make the public more aware of the credit union difference. This article will review the first six months of 2010. Tomorrow, News Now will review the second six months of the year. At the beginning of the year, credit unions were embroiled in analyzing a decade of changes, as reflected in the second top story of January: "Ten events that changed the past decade." But they also looked ahead at steep compliance challenges. The top story for January dealt with complying with overdraft rules and Reg Z in the Truth in Lending Act. Credit unions also were preparing for the Fed's final rules related to the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009, which went into effect in February and became that month's top story. During first quarter, the Move Your Money movement took root, with CBS Moneywatch, Suze Orman on ABC, and the Larry King show, among others, expounding on distressed bank customers seeking out credit unions. CNN 's "take this bank and shove it" story in February also received note. Credit unions and leagues capitalized on the issue throughout the year. The administration's proposal in February to funnel $30 billion into small banks for small business loans was perceived as a snub by credit unions, who stepped up their efforts to progress legislation to lift their member business lending cap to 27.5% of assets from 12.25%. February also saw hints of problem credit unions in a story in which the National Credit Union Administration (NCUA) discussed an increase in credit unions with lower CAMEL ratings. Compliance took top billing in March, with stories on credit and debit cards, check hold rules under Reg CC, and overdraft incentives. However, an underpinning of the corporate system restructuring issues was reflected in several of March's top stories list. Discussions of the costs of corporate losses to the National Credit Union Share Insurance Fund, and proposals for legacy assets, and a new corporate model all surfaced at the end of the quarter. Second quarter, April through June, saw more variety on the agenda. The top story for April was financial institution closures--seven banks and one credit union--with similar stories reoccurring later in the year. The introduction of the new $100 bill and discussion on how the Securities and Exchange Commission's actions against Goldman Sachs might affect credit unions also were highly read during April. As the administration pressed its health care issues, News Now's readers' interests reflected the national agenda with stories on cutting health care plan costs prominent. The ongoing issue of credit unions as alternatives to payday lenders also received treatment in the press. Positive press for credit unions continued, with the announcement in April of credit unions topping another customer satisfaction survey--a story to be repeated with several new surveys later in the year. In May, an interchange issue related to Congress's financial regulatory reform bill forced the Credit Union National Association (CUNA) and the nation's credit unions to oppose Senate banking reform--the No. 2, No. 9 and No. 10 stories for May. NCUA announced it was considering splitting share insurance and corporate fees, the fifth most-read story for May. Credit union people were also in the news. Two top stories during the first half of 2010 centered on six people who had been banned by NCUA from future credit union work. The appointment of Bill Cheney as the new president/CEO of the Credit Union National Association ranked No. 4 for May. In June, NCUA announced its assessment of 0.134% or 13 basis points of insured shares to pay for its corporate stabilization plan. That was the top story for June, followed by stories on interchange--CUNA's call for credit unions to oppose the financial regulatory reform bill and a key congressman's reassurance that the Federal Reserve's new rules governing interchange fees would not apply to credit unions or small institutions under $10 billion in assets. Compliance issues continued, with the Fed releasing a clarification of its Regulation E, Electronic Fund Transfers, and Regulation DD, Truth in Savings, rules that addressed overdraft services. A review of the second-half 2010 activities in the news will continue later in the week.

Northwest CU Association operations began Saturday

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BEAVERTON, Ore. and FEDERAL WAY, Wash. (1/3/11)--The Northwest Credit Union Association (NWCUA), a combination of the Washington Credit Union League and the Credit Union Association of Oregon, began operations on Saturday. The NWCU’s primary phone number is 800-995-9064. Its fax line is 877-928-9064. To reach the association via postal service, use the following information:

Oregon mailing and physical address

8205 SW Creekside Place, Suite 220

Beaverton, Ore. 97008

Washington mailing and physical address

33301 9th Avenue South, Suite 200

Federal Way, Wash. 98003

Credit unions previously registered on either the Oregon association or Washington league site must register at the NWCUA’s new website at Failing to register will limit access to the site and its functionality, including event registration, training events, the online directory and compliance resources.

Consumer awareness translates to CU growth--leagues

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MADISON, Wis. (1/3/11)--For all the good publicity credit unions have generated from campaigns such as or consumer backlash against big banks, the enthusiasm does not appear to be translating to membership growth. Nationally, credit unions grew at a 0.7% rate through Sept. 30. Total loans were down -1.2%. But credit union leagues in states with coordinated awareness programs say they are bucking those trends--and they cite data to back it up. The Pennsylvania Credit Union Association’s (PCUA) iBelong awareness program has been in place for three years. Michael Wishnow, senior vice president of communications and marketing, said Pennsylvania credit unions had either lagged or maintained pace with national credit union growth statistics for 25 years when a group of state credit union CEOs convened to see what they could do about improving that status. “It all came down to one thing: awareness,” said Wishnow. PCUA leaders thought awareness was so vital to their financial health that they created a mandatory assessment for member credit unions to fund the iBelong campaign, Wishnow said. The funding was used primarily to produce a high-quality TV/radio ad campaign. Wishnow said the quality of the production has helped the campaign have a greater impact for consumers--and made a big difference for credit unions of all sizes. “Even the largest credit union probably couldn’t afford to spend on the production of the spots, [and maintain] the quality of them, let alone run them on a statewide basis,” he said. Wishnow said he believes--and just as importantly, PCUA’s members believe--the investment has translated into growth. He cited 2010 second quarter data: Pennsylvania credit unions have exceeded national rates in membership growth (2.2% vs. 0.9%), assets (8.9% vs. 3.8%), and loans (5.4% vs. -0.9%). In part, because of that success the amount Pennsylvania credit unions are assessed for the iBelong campaign will decrease by one-third in 2011. Credit unions under $20 million in assets will pay $7 per million. Credit unions between $20 million and $50 million in assets pay $27 per million. Those $50 million and over in assets will pay $40 per million. The association’s credit union service organization, Pacul, also will make a $50,000 contribution to the campaign, which will cost $1.1 million in 2011, down slightly from $1.2 million in 2010. New Jersey Credit Union League (NJCUL) President Paul Gentile also attributes his state’s credit union growth to increased public awareness. The NJCUL’s “New Jersey Credit Unions: Banking You Can Trust” campaign can be seen and heard on radio and cable TV and in New Jersey Transit stations and on buses. New Jersey credit unions grew by nearly 25,000 members in the first half of 2010. As of the third quarter, member loans had increased by 1.9%, compared with a national decline among credit unions of -1.2%. Member business loans at New Jersey credit unions rose at a 17% rate. Nationally, credit union member business lending increased at a 7% for the third quarter. First mortgages at New Jersey credit unions were up by 9.3%, compared to a 2.3% rate nationally. “The branding campaign is definitely helping,” Gentile said. “We’re pushing everybody to the [national credit union finder] website. New Jersey gets the second most visits of any state in the country, so we know we’re getting people to visit that site. We think they’re signing up for memberships and taking out loans.” Gentile said New Jersey credit unions contribute to the campaign on a voluntary basis. “As a league, we think telling the credit union story is so important that we are willing to subsidize it on our own,” Gentile said. Nowhere has the effect of the recession been felt more directly than Michigan, which has experienced the restructuring of auto industry. Yet Michigan credit unions have grown the past two years. Michigan credit unions added more than 50,000 members in 2010, the second straight year it has surpassed that figure. By comparison, that’s nearly three times the 17,000 members added in 2008, the league said. Michigan had 4.5 million credit union members as of the end of September, and 44% of the state’s residents do at least some of their banking at credit unions, the Michigan Credit Union League (MCUL) told the (Detroit News Dec. 26). Among the 10 most populous states, Michigan has the highest rate of credit union membership. MCUL President/CEO David Adams said he believes strong cooperative advertising programs such as Own Your Money and Invest in America made Michigan credit unions stand out at a time when banks fell out of favor with many consumers. “Michigan has always been a strong credit unions state, but as the state has lost population in the past decade, credit union membership growth has been negligible,” Adams said. “That is, until the past two years.” That’s when Michigan credit unions kicked in more than $3.4 million for the “Own Your Money” and “Invest in America” messages. Invest in America was a partnership with automakers that offered credit union members savings on GM vehicles while marketing the benefits of credit union membership. Own Your Money is a TV and radio advertising campaign geared to 18- to 34-year-olds, with an underlying message that credit unions offer member-focus, value and personal control. Pennsylvania’s Wishnow said that awareness campaigns such as Own Your Money, iBelong and Banking You Can Trust explain to consumers what a credit union is and inform them that almost anyone can join. “Then credit unions don’t have to invest their time and energy on explaining what a credit union is,” Wishnow said. “We’re doing that, so they can focus on specific products and services. And that’s more important now than ever before. The bottom line is a lot different than it was four years ago. This alleviates some of that pressure.”

CU System briefs (01/02/2011)

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* DULUTH, Ga. (1/3/11)--Georgia FCU, based in Duluth, Ga., has changed its name to Georgia United CU because it recently converted to a state charter (Atlanta Journal-Constitution Dec. 30). The credit union was founded as DeKalb County Teachers FCU 52 years ago. Georgia United CU serves employees of 10 school systems and more than 450 select employment groups as well as University of Georgia employees, faculty, students and alumni. It has $630 million in assets and 13 branches located throughout the state … * CHAMPAIGN, Ill. (1/3/11)--Champaign County Employees CU has merged into $240 million asset University of Illinois Employees CU. Both credit unions are located in Champaign, Ill. Champaign County Employees CU had about $330,000 in assets. Chairman John Dimit said the county employees credit union was finding it increasingly harder to manage all the administrative duties with a small asset base. Many members had dual memberships already with the UI Employees CU. The merger took effect Dec. 1 (The News-Gazette Dec. 30) … * LAUREL, Md. (1/3/11)--Robert "Bob" Byroad, first president of Tower FCU, headquartered in Laurel, Md., died Dec. 25 at the age of 81. He started at the credit union in 1959 as office manager, with two employees, about 3,000 members and $400,000 in assets. In 1978 he was named general manager and in 1986, he became president. By his retirement in 1994, Tower was a full-service credit union with $620 million in assets and nearly 92,000 members worldwide. Today, Tower is the largest federal credit union in Maryland, with more than $2.2 billion in assets, 16 branches and more than 121,000 members. Current President/CEO Martin Breland attributed the growth to Byroad's tenure. He also was active nationally in the movement. He is past president of the Maryland Credit Union League and the Metropolitan Area Credit Union Management Association. Before arriving at Tower, he assisted in chartering the Wheaton Co-op FCU. He is survived by his wife, sister, two children, five grandchildren and one great-grandchild …

CUs gave so troops could have a good holiday

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MADISON, Wis. (1/3/11)--Credit unions ended 2010 by putting their money and efforts where their philosophy is--making things better for others. Credit unions made special efforts to ensure that one group had a bright holiday: troops deployed far from home. For the third year in a row, Dover (Del.) FCU treated troops to homemade goodies and warm wishes as part of "Operation Cookie Drop." Staff and volunteers at branches throughout Delaware baked and delivered 2,196 cookies--or 183 dozen--to troops to thank them for their commitment and sacrifices on behalf of the nation. "We know that being away from your family during the holidays is hard," said President/CEO David Clendaniel. Staffers also rang the bell for the Salvation Army in Dover for two eight-hour days in mid-December. Hanscom FCU at Hanscom Air Force Base, Mass., provided 20 Thank You prepaid debit cards, each totaling $50 and supplied in partnership with the Armed Forces Financial Network (AFFN), to Fisher House Boston officials to distribute to family members while veterans receive treatment at the Veterans Affairs (VA) Boston Healthcare System. The cards are used for expenses such as food, gas and personal items. Air Force FCU, San Antonio, Texas, also was part of the Thank You card effort, presenting 100 $50 "Thank You" cards to the Lackland Air Force Base Fisher House. AFFN, the Defense Credit Union Council and the Association of Military Banks of America, have supported the Fisher House Foundation and individual Fisher Houses in Germany and the U.S. for the past seven years, contributing more than $1 million to the efforts during that period. In Oklahoma, Tinker FCU and Rose State College teamed up to help military families at Tinker Air Force Base for the holidays. They collected toys and food for the families (The Oklahoman Nov. 25). All 233 branches of State Employees' CU, Raleigh, N.C., collected 5,000 gift boxes for overseas troops in early November. The gift boxes were packed with a variety of travel size items such as dental supplies, soap, shampoo, first aid items, travel games, socks and food (The Weekly Update Dec. 17). Steve Sheppard, SECU's Raleigh-NCSU Advisory Board member, noted he was mobilized for two tours of duty for Iraqi Freedom as a Navy Reservist serving with the U.S. Army. "We were 750 strong but always looked forward to our mail and especially the care packages. Many items in the boxes were unobtainable at our bases. The long days and poor conditions were made better by the magical boxes and the thought that someone at home cared." Piedmont Advantage CU, Winston-Salem, N.C., aimed its efforts to troops seriously injured in the line of duty. The credit union had an ornament sale to benefit Hope for the Warriors, which ensures the injured troops' needs are met. It also sold ornaments last year. Belvoir FCU, Woodbridge, Va., filmed "countless" live greeting card video messages for members and nonmembers to share with soldiers overseas. It sent more than 50 personalized eGreetings in the effort. The videos were filmed at the credit union's branches in front of a "Belvoir Federal Cares" backdrop. It used YouTube to post each eGreeting.