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CU System Archive

CU System

CUs' true advantage--trust--will win new members--CUNA's Gentile

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WASHINGTON (1/8/13)--Credit unions should tap into their true advantage--trust--rather than their fee and rate advantages to woo new members during 2013, says the Credit Union National Association (CUNA) in an editorial in CU Insight.

"For too long the credit union system has hung its hat on its rate and fee advantage over banks," wrote Paul Gentile, CUNA's executive vice president of strategic communications and engagement. "While being competitive is always important, we need to promote our true advantage--trust," he said.

"As nonprofit financial cooperatives that exist solely to serve the lending and savings needs of consumers, credit unions' value proposition is trust. Whether we are in booming economic times or a recession, credit unions operate the same way. We learned that during the most recent recession. While banks reined in their lending, credit union lending expanded."

Many leaders say consumers "don't care about anything but the best deal they can get," he wrote. "In this low-rate environment, that has probably never been less true. Credit unions are the best deal more often than not, but in today's era of corporate mistrust we should think bigger than that. Reputation matters. Credit unions everywhere should be talking about their cooperative history and with that our value proposition of trust will shine through."

The credit union system's core mission is advancing financial literacy/education. "I have witnessed first hand how credit unions can win over people in their community, not just members, by offering financial education sessions on everything from retirement to financing college," he wrote. "We are already deep into the trust game and should be sure consumers are aware of it."

CUNA has already established a channel to get the credit union message out: aSmarterChoice.org--"a landing pad for consumers and press alike to learn about all the great things credit unions do for members, and all the reasons credit unions are 'trusted' financial providers."

Gentile encouraged credit unions to visit the site, read stories that colleagues contribute and find a story they can contribute."Together, we can build aSmarterChoice into a comprehensive repository of 'trust' stories that will help us win consumers over."

To read the full article, check out aSmarterChoice, or review News Now stories about surveys where credit unions' reputation stood out during 2012, use the links.

CU System briefs (01/08/2013)

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  • DEARBORN, Mich. (1/8/13)--Members of Dearborn, Mich.-based DFCU Financial received a special patronage dividend totaling $21.8 million--half the credit union's earnings for 2012. The average dividend amount per member was $220. "In a household of five, receiving he dividend is very important to us, said Marc Gayeski, who has been a DFCU Financial member for 31 years. "Last year I was able to pay half our care payment with the dividend. This year, it will help to pay for a trip to Arizona to visit my wife's 90-year-old aunt." For more of Gayeski's story, use the link.  The $3.3 billion asset credit union calculates the dividend on the member's total relationship with it--the greater the relationship, the larger the dividend. Qualifying members receive 0.5% on their average yearly loan and deposit balances. Each receives at least $50 …
  • MIDDLETOWN, Pa. (1/8/13)--Virginia Williams, CEO of Jersey Shore FCU, Northfield, N.J., resigned from Mid-Atlantic Corporate FCU's Board of Directors, effective Dec. 31. The board appointed Alison DeTuncq, president/CEO of University of Virginia Community CU, Charlottesville, Va., to fill Williams' seat, as of Jan. 1. DeTuncq's appointment means Mid-Atlantic has credit union representation from Virginia. The corporate and VACORP merged operations in February. DeTuncq has served on Mid-Atlantic's Supervisory Committee since December 2011 and will continue that service. She began her career at the credit union in 1988 and has been president/CEO since 1998 …
  • MILWAUKIE, Ore. (1/8/13)--The popularity of online banking contributed to the closure of Milwaukie, Ore.-based Oregonians FCU's Eugene branch. The branch will close at 6 p.m. March 1, the $296.8 million asset credit union told members on its website. "Transaction volume, loan demand and new business at this location have continued to decline and are the lowest among our branch network," it said. "This branch is no longer able to support the operating costs that go along with running a branch." Members can maintain their accounts through shared branching locations, surcharge-free ATMs, or free electronic services such as online banking, mobile banking apps, mobile deposit, online bill pay, telephone banking and direct deposit. An Oregonians FCU representative in Springfield will assist with loans or non-transactional business. Of the 1,400 members with that branch, 20% actually conducted transactions there, the credit union told The Register Guard (Jan. 5) …

November membership growth is best in 15 years

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MADISON, Wis. (1/8/13)--Credit union membership grew 0.2% in November to a record 96.12 million, according to the Credit Union National Association's (CUNA's) Monthly Credit Union Estimates. That's a 2.5% annualized growth rate--the best in a decade and a half. 

"You would have to go back 15 years to find comparable membership growth," said Mike Schenk, vice president of CUNA's economics and statistics, during CUNA's press call Monday morning.  "Consumers are continuing to vote with their feet," he said.

November added 140,000 memberships, up from the 95.98 million memberships recorded in October by CUNA's monthly report. Credit unions reported phenomenal growth in 2011, with a boost from Bank Transfer Day, but that growth has continued, indicating that consumers trust credit unions with their financial business.

Other notable numbers reported in the estimates included:

  • Strong loan growth in every loan area except mortgages, which experienced a decline. Year over year, loans grew 4.4%, to reach $610 billion in November.
  • Savings grew 7.7% year over year, to $899.2 billion.
In 2013, credit unions can expect faster loan growth and savings growth of about 5% to 5.5% each, said Schenk.

Kansas CUs end 3Q with higher than average growth

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WICHITA, Kan. (1/8/13)--Total outstanding loan balances at Kansas credit unions increased 6.5% in September from the same time a year earlier, according to the Kansas Credit Union Association (KCUA).

Kansas credit unions posted higher than average growth rates and exceeded national credit union rates in both loans and share draft balances in the third quarter, KCUA said.

Used auto loans, the largest component of the loan portfolio, increased 7.4% from September 2011. New auto loans increased 8.6%, compared with a 5.8% increase at credit unions nationwide. The overall auto loan portfolio in Kansas increased 7.6% over the past year to $1.9 billion.

The average member relationship rose to $12,100, a 5.5% increase. The increase is an indication that Kansas credit unions are gaining a higher share of wallet among their members, said Janeeen Smalley, KCUA vice president of member and strategic services. "I think it's clear that more consumers are seeing credit unions as their primary financial institution," Smalley added.

Other highlights cited by the KCUA:

  • Year over year, total shares deposited stood at $4.4 billion, an increase of 8.5%, compared with the national credit union average rate of 6.2%.
  • Share drafts were up $63.9 million, an annual increase of 10.2%.
  • In September 2012, roughly 35.7% of Kansas credit union members held share draft accounts with their credit unions, higher than any point in the past six years.
  • As of September 30, Kansas credit unions reported an average capital ratio of 11.5%, better than national peers, and behind only Kansas savings banks.
"In difficult financial times, it's important the financial institutions have a financial safety net," Smalley said. "That said, Kansas credit unions are poised to put their capital to use in a way that will serve the best interests of their members."

Wash Post: Shiloh of Alexandria FCU lives the CU difference

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ALEXANDRIA, Va. (1/8/13)--Shiloh of Alexandria FCU was cited in a Sunday Washington Post article as an example of a trusted financial institution serving a small community in an age dominated by too-big-to-fail debates and Capitol Hill reforms.

Small credit unions are often "lost in the shuffle," in the age of large financial institutions said Bill Cheney, president/CEO of the Credit Union National Association, told the Post. Banking regulations don't take into account the interests of smaller financial institutions, Cheney said.

The 20-year-old, $2.4 million assets credit union, based in Alexandria, Va., is run by volunteers and serves Shiloh Baptist Church of Alexandria, one of the country's oldest African American churches.

It provided more than $700,000 in loans, during 2012 according to the National Credit Union Administration.

The credit union's mission is to combat predatory lending and to promote wealth-building, the John DuPree, the credit union's manager, told the Post.

DuPree gathers with the credit union's president and vice president to review loan applications each Wednesday night. Most applications are to consolidate and pay off other debts, such as payday loans with prohibitively high interest rates.

The credit union also helps members meet their financial goals, such as purchasing a car or making home repairs, DuPree said.

The credit union is open on Saturday and Sunday morning. Many members do their banking when they attend church on Sunday.

NCUF April Financial Education campaign in the works

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MADISON, Wis. (1/8/13)--The National Credit Union Foundation (NCUF) will roll out a new initiative this spring to help credit unions nationwide draw attention to their financial education activities and the importance of financial education.

"Supporting financial education is essential to the success of not only the credit union movement, but our country as well," Christopher Morris, NCUF director of communications, told News Now. "We hope this campaign allows even more consumers to achieve financial freedom."

Last April, NCUF and the Texas Credit Union Foundation (TCUF) piloted "Credit Unions Support Financial Education: Leading the Way to Financial Freedom" in partnership with other state credit union foundations. It aimed to raise awareness of financial education and raise funds for NCUF and state foundations.

"The results were encouraging and now this year--after some retooling--we are inviting everyone to participate," Morris explained.

The State Credit Union Foundation Network encouraged NCUF to broaden the campaign for next year. NCUF is inviting state and member credit unions to participate in the next campaign taking place in April, which is also National Financial Literacy Month.

NCUF hopes the leagues will help promote the campaign to their credit unions.

"We're hoping the credit unions can be creative," Morris said.

To join the initiative, credit unions must commit to raising funds among staff and members through one or both of these activities:

  • Conducting a "Financially Fit Day" on April 3; and
  • Raising funds throughout April.
The campaign will kick off April 3, a dedicated day for credit unions and their members to become financially fit. Credit union staff also can encourage members to support financial education with a monetary contribution. Credit unions can become financially fit by participating in several FUNdraising activities during the month.

Additional FUNdraising ideas are included in a toolkit at financialeducation.coop, the website created for the initiative. The site includes optional pledge forms and campaign resources such as sample newsletter articles, sticker and wall pin-up templates, a sample flyer and statement stuffer, Web buttons, and more to come, said NCUF.

For more information, use the link.

Author of White House 9/11 account to speak at CUNA ACUC

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MADISON, Wis. (1/8/13)--The author of a book about developments in the White House during the terrorist attacks on Sept. 11, 2001 will keynote a session of the Credit Union National Association's (CUNA) 2013 America's Credit Union Conference (ACUC) this summer.

Retired White House Military Officer Lt. Col. Robert Darling will speak at the Sunday June 30 session.  CUNA's ACUC will take place June 30-July 3 at the Hilton New York in New York City.

"We hear from attendees that ACUC is their conference choice to get energized and equipped with big ideas," said Jill Tomalin, senior vice president of association services at CUNA. "Lt. Col. Darling is sure to evoke action with his unique insights and inspiring experiences."

Lt. Col. Darling chronicled developments during the attack in his book, 24 Hours Inside the President's Bunker, 9/11/01: The White House, a minute-by-minute account of that day's events.

As a presidential pilot with Marine Helicopter Squadron One, he was handpicked in 2000 to work for the White House Military Office, Airlift Operations Department. He was in this position during the Sept. 11 attack and supported the president, vice president and national security adviser in the underground President's Emergency Operations Center, where he witnessed unprecedented events and decision making.

He retired from the U.S. Marine Corps in 2007 after more than 20 years of active duty. Earlier in his career he piloted attack helicopters in Desert Shield and Desert Storm.

Today Darling is president of the Military Officers Association of America Heritage Chapter in Quantico, Va., and vice president for business development for Zenetex, an information technology service management company in Herndon, Va.

For more information, use the links.