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CU System briefs (01/24/2013)

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  • OWENSBORO, Ky. (1/24/13)--The Jan. 17 robbery of Owensboro, Ky.-based Green River Area FCU has led to the arrest of James Allen Morris, 53, of Henderson, who is also a suspect in nine robberies committed between 2006 and 2013. Two of those robberies--in January 2012 and June 2012--were at the same credit union.  Morris has been charged with eight counts of first degree robbery in Henderson (surfky.com Jan. 23) …
  • MADISON, Wis. (1/24/13)--UW CU, based in Madison, Wis., announced it has awarded $300,000 to scholarship endowment funds at the University of Wisconsin's UW System campuses they serve.  These include a new endowment fund at UW-Oshkosh, and previously established funds at UW-Madison, UW-Green Bay, UW-Whitewater and UW-Stevens Point. "UW CU has been a trusted financial partner for thousands of UW System students over the years, and we know that our Wisconsin communities are strengthened when we help keep higher education financially accessible," said UW CU President/CEO Paul Kundert. In 2008, the credit union established permanent scholarship endowment funds totaling nearly $1.5 million through an online fundraising campaign. It also supports area high schools with needs-based scholarships directly to deserving students who will attend the University of Wisconsin …
  • ST. Louis (1/24/13)--Vantage CU, based in Bridgeton, Mo., officially kicked off its search Tuesday for a new spokesperson to represent the younger set in its Young & Free St. Louis  program, a Web-based initiative to address the financial needs of 18- to 25-year-olds. Applications should include a 60-second video uploaded to YouTube, a blog post and a completed personal information form. Applications are due at 5 p.m. CT on Feb. 25. A public vote will take place Feb. 27-March 11, and the new spokesperson for a one-year term will be announced March 25. Details are at YoungFreeSt.Louis.com  …
  • HARAHAN, La. (1/24/13)--Richard Turnley Jr., former CEO of Southern Parents & Teachers FCU, died Saturday (eNews Jan. 23). He was a former Louisiana Credit Union League board member, serving from 1993 to 2007. He was an ardent supporter, leader, and champion of the credit union movement while serving in the Louisiana House of Representatives and the state Senate. He began working with the credit union in 1959. Funeral services are at 11 a.m. Saturday at Camphor Memorial United Church, Baton Rouge …

CUs poised to nab bigger share of improved housing market

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MADISON, Wis. (1/24/13)--Credit unions are poised to capture an increased share of an improved housing market in 2013--and establish themselves as the primary financial institution (PFI) of choice for American consumers.

Mortgage loans have long been considered as necessary to become a PFI. The increase goes hand in hand with the Credit Union National Association's communications strategy for 2013 is to encourage more Americans to choose credit unions as their best financial partner. (For a related News Now story, read A closer look: CUNA 2013 communications goal, lead folks to CUs as primary FI partner)

Home sales are expected to continue to rise after reaching their highest level in five years in 2012 (USA Today Jan. 23). Existing home-sales rose 9.2% last year. The National Association of Realtors Housing Affordability Index reached a record high of 198.2 November and is expected to go higher, indicating stronger household purchasing power, NAR said.

Credit unions already have captured the wave in the rising mortgage market. Credit union first mortgage originations increased 36% January through September, according to CUNA Economics and Statistics. CUNA economists expect credit union first mortgage originations to reach a record high--exceeding $100 billion in 2012.

Mortgage service providers say they are seeing more credit unions offering mortgages. CU Members Mortgage, which provides mortgage services to credit unions, signed 53 new credit unions clients in 2012 and its credit unions increased originations by 37% from 2011. In 2012, it saw a 47% increase in refinances since 2011. Purchases rose 15% during the same period.

Among the credit unions preparing for continued growth in 2013 is Partners FCU, a $1.1 billion credit union in Burbank, Calif. It partnered with CU Realty Services to offer tools that make it easier for members to buy and sell their homes.

From Partners FCU's website, members will research neighborhoods, estimate payments and find qualified real estate agents. The partnership positions the credit union as its members' first point of contact in the real estate transaction.

Consumers CU, with $430 million in assets in Oshtemo, Mich., is participating in a program designed to make home ownership more affordable for Michigan residents. First-time homebuyers in Michigan may be eligible for grants up to $5,000 through the Michigan State Housing Development Authority's Homebuyer Assistance grant program. Michigan has allocated $15 million to the grant program.

"We encourage all who feel they may qualify to contact us," said John Murphy, Consumers CU mortgage department manager. "We can then determine each homebuyer's needs to see if this beneficial grant program may work for them."

And by working with members on such a significant purchase, credit unions may become their members' PFI.

Connecticut regulator named to NASCUS board

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ARLINGTON, Va. (1/24/13)--Mary Ellen O'Neill, director of the financial institutions division for the Connecticut Department of Banking, has been appointed to the National Association of State Credit Union Supervisors board of directors.

O'Neill is filling the unexpired term held by Mary Hughes, Idaho Department of Finance Financial Institutions bureau chief.

Mary Martha Fortney, NASCUS president/CEO, expressed NASCUS' appreciation to Hughes for her services as a board and executive committee member.

O'Neill's term will end in September 2015.

For the full board, use the link.

Man shot during CU robbery in Tulsa

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TULSA, Oklahoma (1/24/13)--A man was shot while exchanging gunfire with a security guard after a branch of Tulsa Teachers CU was robbed Wednesday afternoon.

The incident occurred shortly after 1 p.m. when a man entered the credit union, hopped the counter and demanded money, said Tulsa police (TulsaWorld.com and KRMG.com Jan. 23).  Police said the guard chased the robber and fired several shots, hitting the suspect at least once. The robber fled on foot.

Later a man with a gunshot wound was discovered nearby. He was being treated at a local hospital. Identities have not been released.

No one inside the credit union was hurt.

Social Security reclamations could mean CU losses

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MADISON, Wis. (1/24/13)--Social Security reclamations could result in potential uninsurable  losses for credit unions, said a risk alert sent Friday by CUNA Mutual Group to its bond policyholders.

The situation occurs when a member dies, and the joint account surviving spouse continues to receive Social Security payments for the deceased person via automated clearinghouse (ACH) and withdraws the funds.

For example, a husband and wife have a joint account at the credit union, and his Social Security benefits are sent via ACH to that account.  He dies, but the credit union doesn't know that. His Social Security direct deposits keep arriving into the account for several months, and the wife withdraws the funds.

The Treasury Department can send a notice of reclamation to recover the payments issued after the death. In some cases, credit unions voluntarily return the funds, even though the money is no longer in the account, said the risk alert.

In other cases, if the credit union does not respond to the reclamation notice within 60 days, the Treasury automatically debits the amount from the credit union's Federal Reserve or correspondent's account.

A credit union responding properly and in time qualifies for limited liability, but that liability may be limited to the amount of post-death benefit payments received within 45 calendar days after the death., said CUNA Mutual.

If the credit union is aware of the member's death, any post-death payments should be returned.

The alert advised credit unions to refer to the Treasury Department's reclamation rules in its Green Book for proper handling procedures.

Michigan First scholarships expanded

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LATHRUP VILLAGE, Mich. (1/24/13)--Michigan First CU in Lathrup Village, Mich., together with Young & Free Michigan, its young adult financial education program, is expanding its scholarships to metro-Detroit students. It has given away more than $650,000 during the past nine years.

The credit union has expanded scholarship programs for 2013 to include a $10,000 grand prize in each of three categories.

"By expanding our scholarships this year, we'll be able to make an even greater impact in the lives and futures of local students," said Michael Poulos, president/ CEO of the $625 million asset credit union.

The three scholarship categories include: a high school video contest, a high school essay contest and a college video contest. Applicants can create their response with a 60-second video or a 300-word essay. For each category, this year's question is "What would you do with $50,000?"

The three winners will receive a $10,000 scholarship, and runners up will receive $5,000 and $3,000 scholarships. The top 10 applicants in each category will be selected by online voting, and a panel of judges will select the winners.

The Michigan First Foundation--a non-profit founded in 2012 by the credit union with a focus on youth and education in metro Detroit--funds the scholarships as part of $160,000 in contributions to local charitable organizations and students each year.

In addition to the more than $50,000 awarded through the three categories, the credit union will award up to 30 scholarships each worth $1,000 to entries from selected high schools in three counties.

"This credit union was founded by Detroit teachers and education is something we believe in doing our part to support," said Poulos. "We'll continue to work with local schools, educators and communities through our scholarships, student-run credit union branches and the Young & Free Michigan program. Investing in the communities where our members live and work is a critical part of who we are."

Student arrested for in-school branch robbery

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OKLAHOMA CITY (1/24/13)--In what could be a first, a high school student has been arrested after allegedly trying to rob an in-school, student-run credit union in Oklahoma City.

The incident happened at about 11 a.m. Tuesday at a branch of Oklahoma City-based Tinker FCU located inside John Marshall High School.

Rayqwonn Chatman, 16, is in custody on a complaint of attempted armed robbery (okcfox.com Jan. 22).

According to local reports, a teller was helping two other students when the robbery suspect allegedly walked up to the counter, with hands inside the pockets of his hooded jacket. He raised his right hand while it was still inside the pocket, indicating he had a gun, and told her to give him some money.

The teller told him the suspect he could be in a lot of trouble, and a witness urged him to leave. He refused and continued to stand at the counter. The teller refused to give him money and he left. Then the teller called police (NewsOK.com and NewsOn.com Jan. 22).

Chatman was arrested in the school gym.

The student branch opened in August as part of the school's academy of finance. Students can work at the branch as part of their career training, said NewsOK.com.

Filene: Engage members through tablets, smartphones

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MADISON, Wis. (1/24/13)--Credit unions need to engage members through tablet and smartphone apps and to stay abreast of those devices' adoptions, which have outpaced all other consumer technologies in history, according to a new Filene Research Institute study.

Filene's study, "There is an App for That: Engaging Members through Tablet and Smartphone Applications," addresses the questions:

  • What types of financial apps for mobile devices are currently present in the marketplace, and who are the key players?
  • How can customization of apps change employee and member behavior?  Is it worth customizing an app or is it better to go with a standard template?
  • What would a few app prototypes look like for the financial sector?
The number of U.S. tablet users more than doubled between 2011 and 2012 (eMarketer Jan. 9). In that year, eMarketer estimates that U.S. tablet users increased to 79.1 million from 33.7 million. By 2016, the number of U.S. tablet users will hit 154.5 million, eMarketer estimates.

The implications for credit unions are that they need to leverage the mobile app revolution, the study said. "Externally, consumers want a convenient mobile experience," Filene said. "Internally, credit unions want to be more responsive to member needs and increase operational efficiency.

"Yet, credit unions are dissatisfied and confused by the current app solutions set," the study added. "As smaller institutions, credit unions typically don't have development staff dedicated to create custom products or services, and instead rely on 'template-ized' and largely undifferentiated mobile apps."

The study advises credit unions looking for mobile apps opportunities to think about solving the issue of potential members and new members, by focusing less on their websites and more on their apps. An app should not be viewed as a mobile banking app, but rather as a branded app for the credit union.

Also, incorporating mobile instant messaging into an app will permit users to ask questions regarding credit union products and services, Filene said. That will allow users to exit the app and receive a push notification with an answer from a credit union representative.

Filene also advised credit unions considering mobile apps to ask these questions:

  • What is the right scenario for the credit union?
  • Should the credit union hire an internal developer or an external team to develop them?
  • Can the credit union do something noteworthy within its budget?
To download the study, use the link.