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Survey Affluent consumers dip into nest eggs

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NEW YORK (1/27/11)--Affluent consumers lack confidence in their financial future, with 63% of those surveyed believing that preparing for long term goals such as retirement and college education will get harder. However, 75% of the mass affluent were "highly satisfied" with the advice they receive from their credit unions and banks, according to a report released Tuesday by Bank of America. The Merrill Edge Report reviews the financial concerns and priorities of "mass affluent" consumers with $50,000 to $250,000 in investable assets. The report was timed to release with the bank's announcement that it was launching an initiative targeting "mass affluent" consumers (The Associated Press via Bloomberg (Jan. 25). Of the 1,000 mass affluent consumers surveyed, 52% sought trusted financial advice from their credit union or bank, and 53% from financial professionals, while 36% sought trusted advice from family and friends. (Plus News Pakistan Jan. 25). Nearly two in five (36%) say they are low-risk investors, with 45% indicating that their investment decisions today are more conservative than they were a year ago. Nearly half (45%) believe they will never be wealthy, even though 75% of respondents have a six-figure household income, the survey said. Balancing short- and long-term financial needs is a priority for 63% of mass affluent, but they struggle to accomplish this, the study indicated. In the past year, 28% tapped into their long-term investments such as college savings accounts and retirement to meet their monthly living expenses. Those who dipped into their nest eggs did so for monthly bills or groceries (29%) or to make a mortgage or car loan payment (14% ). Half (51%) of the respondents do not currently have a formal or written plan. Of those who had a plan in the past, nearly 60% met the goals they set. Among the concerns of the mass affluent are:
* Rising cost of healthcare, 72%; * Ensuring retirement assets last throughout their lifetime, 67%; * Being able to live the lifestyle they want in retirement, 58%; * Worrying about tax reform, 62% and the economy, 60%, on their finances; and * Retiring later than expected, with 41% saying they will retire later than they expected a year ago.
What should a credit union or other institution focus on in attracting the mass affluent member? The report noted this group would like to:
* Know more about federal and local regulations affecting finances and investments (58%); * Have access to a complete picture of finances and investments in one place (58%); * Know how to appropriately allocate assets across investment options (57%), more about financial markets (55%); and how to better manage cash flow (50%); and * Receive professional financial advice (56%).

Altura turns corner with best quarter since 06

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RIVERSIDE, Calif. (1/27/11)--Altura CU Tuesday, located in California's Inland Empire area hard hit by the recession, reported a net income of $2.9 million for fourth quarter 2010--its best results since third quarter of 2006, said Altura CEO Mark Hawkins. The Riverside, Calif.-based credit union also improved its net worth ratio to 6.18% for the year ended Dec. 31, up from 2009's net worth of 5.61% and first quarter 2010, and first quarter 2010's net worth of 4.96%. Federal regulators consider 7% to be well-capitalized. As of Dec. 31, Altura had $726.8 million in total assets and a loss of $2.8 million, unaudited. This compared to $860.1 million in assets and a net loss of $20.1 million (revised) for 2009. Also, the net loss for 2009 was revised downward from $10.4 million after an independent audit and more funds allocated to allowance for loan and lease losses. "Clearly, there are no quick fixes in a marketplace that still is troubled," Hawkins said in a press release. "However, we are seeing conditions stabilize. We aren't seeing job losses at the same pace as last year, and home values aren't declining at the same pace as last year, which is a relative improvement, he said. He noted that in the current economic conditions, loan demand remains low, resulting in a reduced emphasis on growing assets. "We just don't need the addition of shares right now with loan demand remaining at historic lows," he said. During the past three years, the credit union focused on reducing operating expenses. Operating costs for December were down about $600,000 compared with December 2009. Year over year, its costs of operation are down more than $2 million. "We have closed underperforming branch locations, reduced staff and renegotiated various contracts to significantly lower our operating costs while still focusing on delivering the products and services our members need," Hawkins said. This month, the efforts continued with the merger of Altura's two Hemet branches. "This last quarter was very strong for us, and December was above our projections," he said, adding that throughout 2011 Altura will remain focused on members' needs and take steps "to ensure Altura is well-positioned meet those needs now and in the future."

Little green visitors from Redwood invade area

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NAPA, Calif. (1/27/11)--Redwood CU (RCU) took to the streets to get the message out that as a non-for-profit financial cooperative, it is committed to helping people learn how to better manage their money.
Click to view larger image Cherie Knox, left, Redwood CU's Napa (Calif.) Branch manager, and her team prepare piggy banks for delivery to the doorsteps of Napa residents to encourage financial wellness. (Photo provided by Redwood CU) CAPTION GOES HERE
Hundreds of Napa, Calif., residents found green piggy banks on their doorsteps with an invitation to receive $5 by visiting RCU's Napa branch. Also, anyone visiting the branch at 1705 First Street between Jan. 28 and Feb. 28 may be entered in a drawing to win an iPad. The credit union is "committed to helping people find financial wellness, and if there's one thing we've learned over the past couple of years, it's that people want and need help managing their money," said Cherie Knox, manager of the Napa branch. "Not only do credit unions provide affordable banking services, but because we are cooperatives, we have a unique focus on financial education in our communities," she said. "When people know how to make the most of their money, they help to strengthen the cooperative as well as their local economy, and most importantly, can enjoy peace of mind about their daily life and their future," she added. The credit union will focus on spreading the message of financial wellness throughout 2011, including its year-long Amazing Savers Contest, which will follow five contestants as they work to improve their financial situation over several months of competition for a $10,000 prize.

CUNA Brokerage awards 18 Women of Distinction

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MADISON, Wis. (1/27/11)--CUNA Brokerage Services Inc. is honoring 18 financial advisers with Women of Distinction awards in recognition of their superior performance, value to their programs, exceptional client service and overall contribution to the financial services industry and CUNA Brokerage Services, Inc. Women of Distinction is an award recognizing the top performing female financial advisors within their broker/dealer operation nationally. Candidates are nominated by industry peers, and selections are based on the nominee’s annual performance and outlined contribution to their clientele, the credit unions they service, and the financial services industry. Recipients will participate in a national mentoring program for female advisers who are new to the industry or who wish to grow in their profession. A select group of award recipients will receive the President’s Select Women of Distinction honor--recognizing their leadership of and significant contributions to the Women of Distinction program, and its growing success, throughout 2010. 2010 President’s Select Award recipients are:
* Jane Brockway, University of Illinois Employees CU, Champaign, Ill.; * Wendy Cundari, North County CU, San Diego; * Ruby Evans, Chartway Investments & Ins., Virginia Beach, Va.; * Marcella Evans, Genisys CU, Pontiac, Mich.; and * Sophia Spencer, Red Canoe CU, Longview, Wash.
2010 Women of Distinction recipients are:
* Catherine Barnes, VyStar CU , Orange Park, Fla.; * Emmor Boslet, Belco Community CU, Camp Hill, Pa.; * Carol Diest, First Community FCU, Kalamazoo, Mich.; * Mary Finnegan-Ongaro, Members Cooperative CU, Duluth, Minn.; * Leigh Glover, Southeast Financial CU, Brentwood, Tenn.; * Anna Kamp, Anheuser-Busch Employees’ CU, St. Louis; * Jane Kilby, VyStar CU, Orange Park, Fla.; * Wendy Miletich, Wings Financial CU, Eagan, Minn.; * Stephanie Morales, Arizona Central CU, Phoenix; * Swan Shen, RTN FCU, Waltham, Mass.; * Cynthia Sforza, Schools First FCU, Huntington Beach, Calif.; * Suzi Williams, Yakima Valley CU, Yakima, Wash.; and * Gale Zumpano, Alabama CU, Tuscaloosa, Ala.

League to bring Filenes Debt-in-Focus to N.J. CUs

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HIGHTSTOWN, N. J. (1/27/11)--The New Jersey Credit Union League (NJCUL) has partnered with Filene Research Institute to provide Debt-in-Focus free to NJCUL member credit unions. Debt-in-Focus was created by the Madison, Wis.-based Filene Research Institute’s i3 program to break down barriers preventing consumers from seeking traditional financial guidance. The anonymous financial assessment tool requires no self-identifying information, is available around the clock, and provides easy-to-follow action steps free from industry jargon and sales pitches. “In New Jersey we have been taking steps toward helping our credit unions provide financial education to their members, like our recent partnership with the New Jersey Coalition for Financial Education and our work with REAL Solutions,” said Paul Gentile, NJCUL president/CEO. “With the economy the way it is, Debt-in-Focus seemed like the right tool to provide our member credit unions to help get some of their members back on the right financial path.” In addition to the basic features, credit unions offering Debt-in-Focus also obtain:
* Exclusive marketing/implementation support network; * Customizable, pre-designed marketing campaigns; * Usage analytics; * A lead-generation tool through opt-in “Follow-Up” function; and * SAS70 compliant hosting and SSL encryption.
“Consumers need help,” said Mark Meyer, CEO of Filene Research Institute. “At a time when many organizations are retrenching in response to their own financial unease, we’re thrilled that NJCUL sees this as an opportunity to both prove value to their member credit unions and get timely financial guidance to the people they serve.”

Its tax season CUs prep to help members

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MADISON, Wis. (1/27/11)--It’s tax season, and credit unions are doing their part to ease the burden of tax return preparation for their members. The programs credit unions offer are affordable alternatives to income tax filing companies and high-interest refund anticipation loans, which often charge excessive fees. Some of the efforts credit unions are making nationwide are:
* For the third consecutive year, Belco Community CU, Harrisburg, Pa., will provide free tax preparation services. Belco Community has partnered with the Internal Revenue Service and the Volunteer Income Tax Assistance (VITA) program to help prepare basic tax returns for qualifying individuals and families. Roughly eight Belco employees and nine non-Belco employees have volunteered to become certified tax preparers. The VITA Program offers free tax help to low- to moderate-income (generally $49,000 and below) people who cannot prepare their own tax returns. Certified volunteers sponsored by various organizations receive training to help prepare basic tax returns in communities across the country. * To help Michigan families and individuals access state and federal tax credits, the Michigan credit union community has launched “Just file it! We’ll help”: Free tax preparation resources for those in need. More than 50 credit unions in Michigan are participating in the Just file it! program. Filers visit a participating credit union’s website to complete their tax forms online. The technology backbone of Just File It! is I-CAN! E-File, a Web-based tax-filing solution created by the Legal Aid Society of Orange County, Santa Ana, Calif., as a tool to help those eligible for the Earned Income Tax Credit and other credits file their taxes without being charged excessive fees. * Pacific Service CU, Fresno, Calif., will again partner with the United Way of Fresno County to host the VITA program for a fourth year. “Each year the refunds processed through the VITA program increase,” said Steve Punch, president of Pacific Service CU. “For 2009, the dollars returned to families in our community surpassed $10 million from the 5,700 returns filed, an increase of over 1,000 returns from the prior year.” * The El Paso (Texas) Affordable Housing credit union service organization CUSO manages a coalition with 16 VITA sites in partnership with eight local credit unions. VITA services are offered at three credit union sites and offer savings accounts to unbanked VITA clients. Also, this year the IRS and El Paso Affordable Housing CUSO are piloting a Schedule-C free tax preparation site targeting taxpayers with very small businesses that normally file a Schedule C.

Executive base pay grew 4.35 in 2010

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COVINA, Calif. (1/27/11)--U.S. credit unions’ executive base pay increased by 4.35% in 2010--only slightly higher than what was reported in 2009, and significantly lower than the increases seen in the earlier part of the decade. However, there are signs of the recession lifting, with executives accepting bonuses they voluntarily gave up last year, said Executive Compensation Solutions (ECS) seventh annual Employees and Executive Compensation Benefits Survey for the Credit Union Movement. ECS is a credit union compensation and benefits provider. Two notable executive compensation trends since the inception of the survey in 2004 are the increase in the prevalence of pay plans and performance-linked long-term incentive plans, the survey said. The use of severance pay plans has grown to nearly 60% from roughly 20%. In a time of uncertainty, this requires more sophistication in plan design and greater protection for credit union executives, ECS said. The use of performance-linked long-term incentive plans addresses a concern raised by credit union board members and senior management--how to ensure that all elements of executive compensation adhere to a stated compensation philosophy that results in the overall betterment of the credit union. ECS said it anticipates a continuation of many of the 2010 trends. “Credit unions were not exempt from the uncertainties the economy presented in 2010,” said Don Curristan, ESC principal. “The past 12 months have seen an increase in mergers, consolidations and National Credit Union Administration involvement that only heighten the importance of attracting and retaining the best executive talent needed to take credit unions to the next level. “A comprehensive executive compensation and benefit philosophy is necessary to achieve this objective,” he concluded. The Credit Union National Association’s (CUNA) most recent “CEO Total Compensation Survey” showed that in 2009 total compensation for credit union CEOs nationwide declined, with CEOs experiencing a median net income change of -5%. For more information, use the link. CUNA’s survey for CEO compensation data in 2010 will be out this fall.

WOCCU launches PEARLS Web-based system

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MADISON, Wis. (1/27/11)--World Council of Credit Unions (WOCCU) has released a Web-based version of PEARLS, its relational financial database designed to monitor financial trends and help credit unions improve their performance. The program, first developed in the 1980s, has been streamlined for easier access through a Web-based version available as a benefit of membership to WOCCU member organizations. PEARLS is an acronym for Protection, Effective financial structure, Asset quality, Rates of return and costs, Liquidity and Signs of growth. The system is used by thousands of credit unions worldwide. Designed to complement but not replace existing accounting and monitoring programs, PEARLS produces reports, trend information, comparisons and rankings to help identify financial weaknesses and assist in the development of improvement strategies, pricing and strategic and businesses planning. “The new version of PEARLS represents technological delivery improvements without compromising the program’s solid financial standards,” said Dave Grace, WOCCU senior vice president of association services. “The financial ratios that WOCCU defines as standards of excellence that have given the program a role in statutory oversight in some countries remain the same.” The new version of PEARLS, under development for three years, replicates the software-driven program used in developed and developing countries. Credit union regulators in countries such as Ireland, Peru and Poland follow aspects of PEARLS when evaluating credit union performance. The current interface, which runs on virtually any Internet browser, is more easily accessible to WOCCU’s global audience. WOCCU this week is holding a series of free webinars for it member organizations covering basic aspects of PEARLS through train-the-trainer sessions in English, Spanish and Russian. Those organizations will then have license to share the information with member credit unions in their countries. Each webinar is being recorded and will be available for later viewing online. After the webinars, participants will receive PowerPoint presentations and other materials, allowing them to conduct their own training. WOCCU retains all ownership rights to PEARLS and will issue updates to the system as needed. A personal computer with Internet access and audio and PowerPoint capabilities is necessary to participate in the webinars.