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WOCCUs Peru Program wins USAID award

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MADISON, Wis. (1/9/09)--The U.S. Agency for International Development (USAID) has awarded its first Innovations in Financing Value Chains competition award for pioneering/ground breaking to the Credit Union Market Integration Program in Peru, co-funded by World Council of Credit Unions (WOCCU), Peru's national credit union federation (FENACREP) and USAID.
Click to view larger imageFarmers involved with WOCCU's value chain financing program in Peru offload palm hearts for palm oil production. (Photo provided by World Council of Credit Unions)
The award recognizes the top programs in providing financial and increased market access to “value chain“ participants--producers, suppliers, buyers and others involved with bringing a specific product to market. “Value chain” is an industry term for the process by which a crop or product moves from conception to consumer. One of the WOCCU-FENACREP program’s goals is to link credit unions with producers in rural areas who lack strong relationships with key markets and the necessary financing required at any individual phase of the value chain, from production to commercialization. “The ‘Value Chain Finance Methodology' submitted by WOCCU-Peru impressed our diverse panel of judges with its potential impact on the value chain, creativity of approach, validity of its model and relevance for other implementers," said Jeanne Downing, senior enterprise development advisor from USAID's Office for Microenterprise Development, which sponsored the competition. Since September 2006, WOCCU's Peru program has been working with FENACREP to bring financial access and increased market competition to small producers through credit unions in the rural Andean and Amazon regions of the country. WOCCU's approach is designed to mitigate the risks associated with each rural value chain--both agricultural and non-agricultural. It involves analysis to determine product supply and demand, identifying at which point in the value chain financial access brings the greatest value to producers and best investment for the financial institution. Credit unions facilitate direct market relationships, thus eliminating, when possible, the need for expensive intermediaries. The institution develops loan products according to production cycles, and end-buyers channel payments through the credit union, which deducts the principal loan amount plus interest and deposits the remaining amount into a savings account for the producer. Downing said the judges were especially impressed with how WOCCU's model eliminated third-party intermediaries in the value chain. Bringing together different value-chain participants without additional guarantee schemes and with loans funded from credit union resources created a positive change in value-chain structure and power relationships, she said. “Because no outside loan capital was used and because credit unions are left with the knowledge of how to access a variety of value chains, this is a highly replicable and scalable approach,” Downing said. “Overall, the program is sustainable and well documented, and the achieved results are quite impressive, particularly the expansion of the program's methodology beyond the WOCCU program." To date, credit unions have used the methodology to finance 17 distinct value chains through 25 rounds of financing. In total, credit unions have disbursed $794,000 through 531 loans to 3,285 rural producers, producer groups and other value chain actors. A four-person panel of value-chain finance experts judged submissions based on the program's impact on the value chain, its outreach approach, sustainability, replication and scalability. The competition solicited submissions from non-governmental organizations, contractors, banks, financial service providers, private-sector firms and individual practitioners who facilitated or provided financing that helped encourage greater value-chain competition and increased the income of participants within the value chain. Luis Jimenez, WOCCU-Peru program director, will receive the award at a USAID-sponsored forum in Washington, D.C. in February. He will present the program there to an audience of policymakers, donors, leading academics and practitioners. Those interested in attending the event should contact Catherine Horn, mail Catherine for more details.

Leagues support Invest in America plan

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MADISON, Wis. (1/9/09)--Several state credit union leagues have announced their support of the “Invest in America” credit union loan partnerships between America’s Credit Unions and automakers General Motors (GM) and Chrysler Corporation LLC. The partnerships were expanded to all 50 states, it was announced Wednesday. The Invest in America programs will provide 90 million credit union members across the country with access to GM's “Credit Union Member Discount Program” at participating GM dealers, and Chrysler’s “Credit Union Members Cash” rebates at Chrysler dealers. They also will provide access to affordable financing on new vehicle purchases (News Now Jan. 8). Pennsylvania’s 600 credit unions joined the expanded program, which now encompasses nearly 8,000 credit unions nationwide and makes more than $80 billion in credit union low-cost auto loans available for new vehicle purchases, the Pennsylvania Credit Union Association (PCUA) said. “Since our founding after the Great Depression, the mission of credit unions has been to provide affordable credit and financial services to Americans,” said PCUA President/CEO Jim McCormack. “Through this partnership with GM and Chrysler, more than 3.3 million members in Pennsylvania will have to opportunity to save money when purchasing and financing new vehicles. It’s truly a win-win for the automakers, auto dealers, and credit union members. “In our tough economy, I encourage all consumers to consider belonging to a credit union to save their hard-earned money,” he added. Nebraska’s 70 credit unions also announced they joined the expanded program. “Credit unions have always provided the hardworking men and women of this country with high-quality, low-cost financial services in both good and bad economic times,” said Scott Sullivan, Nebraska Credit Union League president/CEO. “The Invest in America program is a natural extension of the credit union philosophy of ‘people helping people’ by adding value to one of a credit union’s cornerstone products--car loans for 420,000 Nebraska credit union members, while supporting the auto industry in Nebraska and ultimately our nation’s economy,” he added. The Louisiana Credit Union League is encouraging credit unions in the state to take part in the program. “This is a fantastic opportunity for both your members and your credit union,” the league said in a press release. “It also speaks highly of credit unions finding solutions for their members and our local economies during this financial crisis.” “New Jersey’s credit unions are in a good position to stimulate consumer lending,” said Paul Gentile, New Jersey Credit Union League president/CEO. “We hope many of the state’s credit unions embrace this program and that New Jersey credit union members take advantage of the financing and vehicle incentives these programs offer to credit union members. “There has never been a better time to join a credit union in New Jersey,” he added. “Our credit unions continue to find new ways to meet the savings and lending needs of their members and provide the outstanding service credit unions are known for.” The Ohio Credit Union League is encouraging member credit unions to share their success stories involving the program (eLumination Jan. 7). The league was one of the four Midwest states in the original pilot of the program with GM. “The Invest in America program continues to garner media attention throughout Ohio and the nation,” the league said in its newsletter. “Members of the media are interested in speaking to credit union members that have taken advantage of the exclusive vehicle discount programs with General Motors and Chrysler. If a member of your credit union has purchased a vehicle using one of the discounts and would be willing to be interviewed, please contact [us]. The new expanded program is a great fit for Massachusetts credit unions, said Dan Egan, president of the Massachusetts Credit Union League (E-Weekly Jan. 8). “Credit unions have always been a vital part of their communities, and this new initiative, ‘Invest in America,’ is an example of how the cooperative nature of credit unions benefits the local, state and national economies,” Egan said. Arizona’s 54 credit unions also joined the expanded program. “The potential of the program is exciting,” said Arizona Credit Union League CEO Scott Earl. “This is an opportunity to offer Arizona’s 1.6 million credit union members greater purchasing power and opportunities during economic hard times. Credit unions are safe and strong and in a position to lend money. This is a chance to help move the economy forward.” The Missouri Credit Union Association (MCUA) and Wisconsin Credit Union League also announced they are supporting the program. “These vehicle-purchase discounts demonstrate how credit unions can help their members in a stressed economy,” said Rosie Holub, Missouri Credit Union Association president/CEO. “Credit unions have money to lend and can extend credit to consumers while other lenders are tightening credit access. This is just another example of the credit union difference” (The Missouri difference Jan. 7). “Credit union members can feel good knowing they’re saving money through these offers, but also because they’re helping to reinvigorate the auto industry--a vital part of the U.S. economy,” said Wisconsin league president/ CEO Brett Thompson. He added that auto lending has always been credit unions’ “bread and butter.” “In a down economy, more people are looking at used cars or simply not buying,” Thompson said. “So credit unions--which don’t chase profits--provide an obvious solution to helping people opt for a new vehicle simply because the rates credit unions can offer will give consumers more car for their money.”

Invest in America garners nationwide media attention

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MADISON, Wis. (1/9/09)--“Invest in America,” a program that connects General Motors and Chrysler with credit unions to offer financing on vehicles, has garnered national media attention. CUcorp, a marketing subsidiary of the Michigan Credit Union League, General Motors (GM) and Chrysler announced that they would expand their programs to all 50 states. Previously, GM and credit unions had piloted the program in four states and the Chrysler version piloted in 12. Media outlets covering the expansion include: Bloomberg News, The Associated Press, the Detroit Free Press,, Crain’s Detroit Business, Auto Week and Dow Jones. The Michigan Credit Union League, which organized the effort, also received positive coverage. David Adams, Michigan league president, was quoted numerous times. “I think it’s safe to say that there’s no better solution for the troubles that are facing the auto industry,” Adams told The Associated Press (via The Detroit Free Press Jan. 7). To see the articles, use the links.

Economy prompts CU in California to revisit new branches

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RANCHO CORDOVA, Calif. (1/9/09)--A troubled economy has forced a credit union in California to re-evaluate its plan to expand branch locations. “Clearly, the pressures affecting consumers in our greater economy have also had some impact here at American River HealthPro CU (ARHCU),” said CEO Bob Steponovich in a press release. ARHCU, Sacramento, tentatively planned new branches in Elk Grove and Lincoln. Based on changing factors in the two markets, the credit union is reviewing its plans. In June, ARHCU adjusted its provision for loan loss upward by an additional $4 million. The credit union also announced this week that it expects 2008 year-end results to reflect a net loss. “While our credit union’s mortgage portfolio performed relatively well in 2008, we have seen the primary impact in our consumer loans, as our members struggle to stay current on their vehicle and credit card debt,” Steponovich said. The credit union’s expansion plans were driven by healthcare employers’ capital investments, projections about significant growth, and the pace with which new healthcare facilities go online. The $220 million asset credit union opened its newest branch in Roseville in spring 2007.

CU System briefs (01/08/2009)

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* PARCHMENT, Mich. (1/9/09)--Effective Jan. 20, First Community FCU in Parchment, Mich., will host “Just File It! I-CAN E-FILE,” a Web-based tax-preparation software program that helps members and non-members with household incomes less than $50,000 file both state and federal income tax returns. Those who qualify may also claim federal and state Earned Income Tax Credit (EITC). The program is accessed via a special link on the $302.4 million asset credit union’s website or by stopping in one of three designated branches providing the service … * LOUISVILLE, Ky. (1/9/09)--Park Community FCU has named David Eib as new president/CEO of the $413.5 million asset, Louisville-based credit union. Eib, a 20-year Park employee and 35-year credit union executive, had been executive president there. He succeeds Jim Oliva, who is pursuing other interests. Oliva had been in the position since 2005. He had been president of Brown & Williamson FCU, which merged into Park FCU in 2006 (Business First of Louisville Jan. 8) … * COLUMBUS (1/9/09)--Robin Thomas, CEO of Cleveland-based Taleris CU, has been reappointed by Ohio Gov. Ted Strickland to the state’s Credit Union Council Board, says the Ohio Credit Union League (eLumination Newsletter Jan. 8). Thomas will serve a three-year term, which expires September 2011. The council is part of the Ohio Division of Financial Institutions and comprises seven members who provide advice and recommendations on credit union issues to the agency and governor. The council, chaired by Deputy Superintendent for Credit Unions Rose Bartolomucci, meets quarterly …

Wisconsin CUs raise 47000 for state hospitals

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MILWAUKEE (1/9/09)--Wisconsin credit unions and affiliated industry organizations contributed more than $47,000 in 2008--garnered from the Credit Union Cherry Blossom 10-mile run in Washington D.C.--to the state’s system of Children’s Miracle Network hospitals.
Click to view larger imageWisconsin credit unions and industry partners presented a check Tuesday for $15,858 to Children’s Hospital of Wisconsin in Milwaukee. Pictured, front row, from left: Christopher Roe, CUNA Mutual senior vice president and Credit Union Miracle Day board member; Keri Brunelle and Elisabeth Thomsen, both of Children's Hospital; Judy Kline, Lifetime CU, West Allis; Chad Helminak, Wisconsin Credit Union League; and Katye Long, Credit Union National Association; Back row: Scott Roesch, Fond du Lac (Wis.) CU; Corey Gibson, Summit CU, Madison; and Sheila McNeal, CUNA Mutual. (Photo provided by CUNA Mutual Group)
The most recent contribution--$15,858--was made Tuesday at Children’s Hospital of Wisconsin in Milwaukee. “As a result of state credit unions’ fund-raising, this contribution is one of three directed to Wisconsin Children’s Miracle Network-affiliated hospitals,” said Christopher Roe, senior vice president, corporate/legislative affairs, CUNA Mutual Group. He is a member of the Board of Directors of Credit Union Miracle Day (CUMD) Inc. “We are proud that the credit union movement in Wisconsin participates in this national event, which directly helps children in our local community.” “Each spring, the Credit Union Cherry Blossom Run in Washington, D.C., is the flagship fundraising event for CUMD,” said Sarah Turner, CUMD director, adding, “We are thrilled this event contributed more than $1 million to children’s hospitals nationwide in 2008.” CUMD is an organization of credit unions and industry affiliates dedicated to raising funds for the Children’s Miracle Network and raising awareness of the credit union difference. Credit unions and industry business partners contributing to the $47,076 Wisconsin total included: the Wisconsin Credit Union League; Lifetime CU, West Allis; Summit (Great Wisconsin) CU, Madison; Fond du Lac (Wis.) CU; Sentry CU, Stevens Point; CUNA Mutual Group; Credit Union National Association; Fiserv; Credit Union Executives Society and the National Credit Union Foundation. “Year in and year out, Wisconsin credit unions and their members do a tremendous job of supporting Children's Miracle Network and we're proud to work together on events like the Cherry Blossom Run,” said Brett Thompson, president/CEO of the Wisconsin league. “Since credit unions are locally owned and operated, they find tremendous value in raising funds to help sick children in Wisconsin get the specialized care they need.” “Local donations stay at home,” Turner added. “The monies raised by credit unions in Wisconsin and elsewhere are tracked according to donor ZIP codes, so money donated in Wisconsin goes to Children’s Miracle Network hospitals in La Crosse (Gunderson), Marshfield (St. Joseph’s) and Milwaukee (Children’s Hospital of Wisconsin).” “Children’s Hospital and Health System is committed to ensuring a healthier future for children by providing an integrated and coordinated health services network for infants, children and adolescents,” said Elisabeth Thomsen, special events manager, Children’s Hospital of Wisconsin and Children’s Miracle Network representative. “This can only be accomplished with the support of the community, and we are grateful to the Credit Unions for Kids campaign for their ongoing support.” The Children’s Miracle Network is a nationwide affiliation of more than 170 children’s hospitals.

Study Maine CUs save consumers 73 million a year

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WESTBROOK, Maine (1/9/09)--During the economy’s difficulties, a new study is providing good news for 600,000 consumers in Maine: Using a credit union saved Maine consumers nearly $73 million in 2007, nearly double the savings in 2005. In an independent study, a former Maine state economist said the latest figure is based on the ability of credit unions to offer consumers higher interest payments on deposits, lower interest rates on loans, and fewer and lower fees on financial services. In “An Examination of the Economic Impact on the Maine Economy and the Financial Benefits to Maine Consumers of the State’s Credit Union, Charles Lawton, an economist with Planning Decisions in South Portland, concluded that credit unions have significantly lower, fewer, or no fees compared to for-profit financial institutions. “Maine credit unions provide a significant benefit to not only the 600,000 members who use a credit union but for all consumers,” Lawton said. “It’s quite hard to imagine what the rates and fees of other financial institutions would be if there were no credit unions or (if) credit unions in Maine were not as strong as they are. Consumers are well-served by Maine’s credit unions,” he added. In 2007, the financial benefits of using a credit union to the state’s consumers was nearly $73 million, which breaks down to: $16 million in higher interest rates on savings accounts; $23 million in lower interest rates on loans; and $34 million in lower and fewer fees for financial services. In a similar study of 2005, benefits were nearly $40 million. According to Maine Credit Union League President John Murphy, the great efforts made to offer such savings in a challenging economy make credit unions an increasingly valuable resource for people in the state. “The credit union philosophy of putting the interests of their members first continues to highlight the difference between credit unions and other financial institutions,” Murphy said, noting the credit union difference. “Now more than ever, Maine consumers recognize and appreciate the value of using a credit union,” he added. Murphy noted that Maine’s credit unions continue to be safe, sound and strong, despite challenges facing financial institutions and the financial services industry.

Wisconsin launches CU House in state

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MADISON, Wis. (1/9/09)--About 100 credit union representatives, lawmakers and state officials attended a grand opening ceremony
Click to view larger image(Photos provided by the Wisconsin Credit Union League).
Monday for Wisconsin’s Credit Union House on the state Capitol square in Madison, Wis. The house will serve as an advocacy command center and meeting space for Wisconsin credit unions and friends, according to the Wisconsin Credit Union League. “This facility is part of Wisconsin credit unions’ ongoing commitment to serving their 2.2 million members,” said Brett Thompson, president/CEO of the league. “It’s very appropriate that Credit Union House is located on Main Street, since we serve the interests of people who walk the main streets of communities throughout Wisconsin every day.” The facility, owned and operated by the league, has 2,500 square feet of meeting space and will have seven league employees. The Wisconsin league’s headquarters will remain in Pewaukee. “Credit Union House is here to help lawmakers and public officials recognize the role credit unions will continue to play in helping state residents and businesses manage their finances despite economic challenges,” Thompson added.
Click to view larger imageFrom left: Brett Thompson, Wisconsin Credit Union League president/CEO; Michael Morgan, secretary of the State Department of Administration; and Dean Wilson, Wisconsin league board chairman, at the ribbon cutting ceremony for Credit Union House in Madison, Wis.
Click to view larger imageFrom left: Brett Thompson, Wisconsin Credit Union League president/CEO; Sue Cowan, Wisconsin director of the Office of Credit Unions; Sen. Jim Sullivan (D-Wauwatosa); Dean Wilson, Wisconsin league board chairman; and Don Davidson, CUNA Mutual vice president of credit union system relations.

Wisconsin credit unions saved members $188 million in the fiscal year ending September 2008 by offering more competitive rates on savings and loans, and lower and fewer fees, the league said. Consumers in the state can rely on credit unions during difficult times because they’re willing to work with borrowers in a financial bind, Thompson said.