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CU System Archive

CU System

South Bay CU Wins CU Smack Down Competition

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LIBERTY LAKE, Wash. (10/15/13)--Competition among friends is always a little more fun--and fierce--with a little trash talking. Two West Coast credit unions exchanged some good-natured ribbing before sharing virtual hugs and high fives upon the completion of a recent loan competition.
 
South Bay CU, Redondo Beach, Calif., accepted the trophy and congratulated United Advantage Northwest FCU, Portland, Ore., for a successful contest that brought loan growth to both credit unions.
 
South Bay CU pulled ahead in the three-month consumer loan competition in the last weeks as United Advantage was forced to slow down while addressing liquidity concerns, said a press release
 
The CU Smack Down competition was the brainchild of South Bay CU CEO Jennifer Oliver, who suggested the contest at the CU*NorthWest Annual Leadership Conference where credit union leaders who use CU*BASE for their core processing solution learn about new solutions and collaborate. South Bay had conducted a similar competition internally, dividing the staff and pitting the teams against each other.
 
Evie Rasmussen, CEO United Advantage Northwest FCU, accepted the challenge. CU*NorthWest served as referee and posted the weekly total in net consumer loan growth--and the smack talk between the two credit unions--to its website. Employees from both credit unions sent each other barbs, cartoons and friendly taunts.
 
The final numbers were: South Bay 247 loans for $1,266,239 and United Advantage, 141 loans for $896,032. The competition began July 1 and ended Sept. 30.
 
"The smack talk had us laughing together, something we haven't been able to do since the recession," said Rasmussen. "Seeing the numbers and income increase was a huge bonus. Going into September, UA was ahead and we relished in our success only to fall behind since we were starting to exceed our liquidity threshold. Darn it! But knowing the regulator was coming in late September, we couldn't afford to push things dramatically. So we fell behind with a grin on our faces."
 
In the previous quarter, the South Bay staff divided in a loan competition that yielded almost $3 million in loans. This time the staff united to win the competition.  An early barb sent by Rasmussen became their rallying cry.  "The smack talk was the most fun of all," Oliver said.
 
The two credit unions developed a family-like relationship during the competition, Oliver said.  "We know each other now, and we laugh together," she explained. "You can just feel the credit union spirit."

CU System Briefs (10/15/2013)

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  • PEWAUKEE, Wis. (10/15/13)--The Wisconsin Credit Union League is hosting its third tweet chat today at 11 a.m. CT.  The monthly chat will be tweeting about leadership at all levels, said the league.  "We're hoping to continue to have participation from credit unions and credit union friends nationwide," said Angela Klaves, league director of marketing. "The chat is the perfect chance to gain a new perspective of leadership and share what you've learned about leadership over the years," she told News Now.  To join the conversation, follow the hashtag #WICUchat on Twitter. For more information, use the link  ...
  • VISALIA, Calif. (10/15/13)--A central California man has been arrested in relation to a holdup at a credit union amid a robbery spree in the central and southern part of the state this year (Fresno Bee Oct. 10). Dennis Adamson, 24, was arrested by police in Santa Ana on Oct. 6 as a suspect in the robberies of a gas station and another business. He allegedly told the police he committed other robberies and the Santa Ana police notified the Federal Bureau of Investigation, who notified police in Visalia, Adamson's former town of residence. There he stands accused of robbing the main branch of Tucoemas FCU in April. Adamson is also a suspect in the robberies of two Chase branches and a Wells Fargo bank. Tucoemas is based in Visalia, and has $122 million in assets ...
  • PORTLAND, Maine (10/15/13)--Trademark FCU named Joann Bisson as its new president/CEO, effective Oct. 1, according to the Maine Credit Union League (Weekly Update Oct. 11). Previously Trademark's chief operations officer, Bisson replaces the retiring Hunter King, who is bowing out after more than three decades in the credit union industry. Trademark FCU is based in Augusta, Maine, and has over $76 million in assets ...
  • PORTLAND, Maine (10/15/13)--Matt Gilman, board chair of Penobscot County FCU, Old Town, Maine, died Sept. 29, the Maine Credit Union League has learned (Weekly Update Oct. 11). A volunteer for the credit union, Gilman was a well-known and respected member of the community. Memorial contributions may be made to Cancer Care of Maine, or to the Church of Universal Fellowship in Orono, Maine. Penobscot County FCU has more than $50 million in assets ...

Payday Passes, Fed Employees Seek Help From CUs

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MADISON, Wis. (10/15/13)--Friday's payday drove home the implications of the federal government's partial shutdown for many federal employees who received half their pay. With the shutdown beginning its third week, credit unions, who already have furlough assistance plans in effect, are receiving requests for help from the furloughed workers.
 
Furloughed workers on Capitol Hill have begun contacting their credit union, Wright Patman Congressional FCU. The $768 million asset credit union has received several calls from people in tears about their finances, its staff told buzzfeed.com (Oct.10).
 
The Washington, D.C.-based credit union offers a relief loan program at 0% annual percentage rate (APR) for 90 days. After that, the rate increases to 4% APR and is automatically extended to 36 payments. It also offers personal loans, lines-of-credit limit increases, payment deferment on existing loans, quick delivery of credit and debit cards and checks, and financial coaching. It requires a copy of the furlough notice or proof of employment at the impacted employer. The furloughed employee's salary and credit score determine what the loan amount will be.
 
M-O FCU, a $25 million asset credit union  in Huron, S.D., launched a "We Stand Ready..." campaign geared toward the federal and postal employees it serves, according to the Credit Union Association of the Dakotas (The Memo Oct. 10).  It took out newspaper ads and sent e-mail blasts to members, posted information on its website, hung posters in its lobby, and handed out flyers in money envelopes.  Many members responded positively, said CUAD. 
 
"We have had a few federal employees call in to discuss their options, and tell us how relieved they are that we are willing to help them out during this time of need," said Tiffanie Gebhart, M-O FCU's marketing coordinator.
 
Census Bureau employees  have asked $64 million, Washington, D.C.-based Census FCU about its Skip-a-Payment program. The credit union told the Washington Post (Oct. 11) that its staff have been working a few hours at the nearly deserted headquarters to meet the demand for assistance.
 
About a dozen furloughed federal employees have applied for the special Furlough Relief Loan offered by $29 million asset Miami (Fla.) FCU, President Athan "Buster" Castiglia told the Miami Herald (Oct. 9).  One woman earning about $55,000 annually told him she does not have enough reserves to go very long without pay. She's one of the mass of people in the U.S. who are living one paycheck away from the street, he said. "All you need is something like this."  The credit union's loan allows a worker to borrow up to $3,000 interest-free for 60 days. After two months, a 12% interest rate kicks in. However, Castiglia noted the loan is designed for workers to pay off the balance when the furlough ends and reimburses workers for lost pay.
 
Arsenal CU in Arnold, Mo., which serves a large number of National Geospatial Intelligence Agency members who have been furloughed, is offering unsecured loans at 0% for 12 months and hardship deferments, which allow members to skip a payment without penalty, said the Missouri Credit Union Association (Missouri Difference Oct. 9).
 
"As a not-for-profit cooperative, accommodating financial hardships affecting large segments of our membership is one of our core beliefs," said Linda Allen, Arsenal president/CEO, told MCUA.  "Allowing members to defer a payment or receive a short-term loan allows them to stay on a sound financial course during a temporary bump in the road. It's one less thing they have to worry about."
 
Desert Valleys CU,  a more than $23 million asset credit union in Ridgecrest, Calif., initiated "Shutdown" loans up to 100% of an employee's net paycheck amount, with options for a 60-day repayment period at 0%  interest.
 
"The mission of a credit union is to provide cooperative help and assistance to their community, and we see no better way to demonstrate this than helping these families while our country's leaders sort out political differences," said Eric Bruen, CEO of Desert Valleys.

CU-turned-bank Lays Off 24, Ends Auto Loans Via Dealers

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FORT WORTH, Texas (10/15/13)--OmniAmerican Bank--which was a Fort Worth credit union until 2005--announced that it's laying off 24 workers after deciding to discontinue its indirect auto loan program.
 
The move comes as the bank attempts to implement cost-cutting measures, which include the elimination of the chief operating officer position. The bank said it was focusing resources on commercial, mortgage and retail banking and that it was taking the actions to reduce overall costs and increase efficiency, although it remains financially strong.

"Interest margin pressure and the competitive rate environment are impacting the profitability of banks across the nation," said Tim Carter, president/CEO.

OmniAmerican currently holds about $250 million in indirect auto loans--lines of credit that originate with car dealers. They make up about 30% of its total loan portfolio. The layoffs are roughly equivalent to 8% of the bank's 307 member work force (Fort Worth Star-Telegram Oct. 9).

OmniAmerican Bank used to be OmniAmerican CU, the second largest credit union in Fort Worth, until its members voted 3-to-1 to convert to a bank in July 2005 (News Now Feb. 13, 2007). In 2010, it floated its shares on NASDAQ after a $119 initial public offering, converting from a mutual savings bank to a publicly held company (News Now Jan. 22, 2010). The bank was founded as Carswell FCU in 1956 to serve Carswell Air Force Base.

The Credit Union National Association and the National Credit Union Administration maintain that converting to a bank charter won't benefit members (News Now May 9, 2012). Ultimately, the decision to convert a credit union to a bank must be made by the credit union's member owners, based on all the facts provided with complete transparency.  Use the link to access CUNA's Principles on Credit Union to Bank Conversions.

CUs Told Authentic Brand Sells Itself

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UNCASVILLE, Conn. (10/15/13)--Brands that stress a sales culture at the cost of delivering a unique experience might succeed in the short term, but that "authenticity gap" isn't sustainable, marketing innovator Matt Purvis told attendees at a Credit Union National Association Community Credit Union & Growth breakout session.

"Sales is the result of a long line of attitudes and
Click to view larger image Matt Purvis, a former marketing executive at Northwest Community CU in Eugene, Ore., and now a consultant, says he recognizes that a "sales" environment has been anathema to credit unions.  (CUNA Photo)
knowledge and skill and technique and communication and listening," said Purvis, who runs the consulting firm Purvis Management. "When you start to get that right, the sales become really, really easy and comfortable and authentic to your brand."

Think Nike, whose "Just Do It" campaign encouraged weekend warriors to put on their athletic gear and channel their inner Michael Jordan. Or REI, which breeds visions of scaling Mount Everest, he said. Engaging credit union staff in behaviors that further the consumer experience you seek will generate growth without needing to invoke the dreaded "sales" word.

A former marketing executive at Northwest Community CU in Eugene, Ore., Purvis said he recognizes that a "sales" environment has been anathema to credit unions. 

As session attendee Asi Carmeli, vice president of human operations for Scient FCU of Groton, Conn., voiced: "For years, that was the differentiator--that was what the "B" (bank) people do. We provide solutions, build relationships--anything but 'sales.'"

Purvis offered a case study of how credit unions can grow while remaining true to their principles from his recent project at MAPS CU in Salem, Ore., which hired him to direct a 12-week initiative to increase auto loan volume.

His key points:
  • Engage employees, don't train them. Purvis convened workshops for front-line staff and sought their impressions of the credit union's "Navigate Life. Together" motto. Then, he asked employees to generate "wacky" ideas for behavior in the branch that embodied that slogan. Staff now pour coffee for colleagues and members who are meeting, and continue discussions with members all the way to the parking lot. Then they follow up with a phone call two weeks later. "Brand is in the eye of the beholder," Purvis said. "Brand is determined by the consumer, not by you. If experience in the branch doesn't change, the whole makeover was moot."
  • Measure behavior, not sales. Every week, Purvis joined staff on a fun "Campaign Call" teleconference that always began with employees exchanging tips on how to hone their efforts. No one discussed financial progress reports until the tail end of the call, to underscore that results stem from a solid product.
The program reached its goal of $6.3 million in new auto loans in six weeks, and finished the 12-week window at $11.3 million.

"There are no shortcuts to healthy growth," Purvis said. "Ask, 'What is our sustainable, competitive advantage in our marketplace, and focus your brand around that."

CUNA's annual Community Credit Union & Growth Conference was held Oct. 8-11.

Motivational Makeover Can Help CU Leaders Through Turbulence

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UNCASVILLE, Conn. (10/15/13)--Every workplace, every nation, every individual goes through turbulent times, Sarita Maybin said in an energized keynote session at the Credit Union National Association's Community Credit Union & Growth Conference in Uncasville, Conn. But, she told her credit union audience, anyone can adapt, succeed and thrive during even the uncertain times.

Think of that disembodied voice on vehicles' navigating devices that blurts out "recalculating" when you miss a turn, Maybine (shown in photo) asked her audience. Through the economic rollercoaster of the last several years, people in all industries have been forced to regularly "recalculate" as circumstances dictate they adjust on the fly.

Consider these strategies to navigate change, Maybin said:
  • Think "big picture." Keep a long-range view, confident you can surmount inevitable setbacks. Make a mark inside your credit union by defining who you are and what skills and intangibles you offer.
  • Evaluate your network. Studies show you take on the traits of your five closest friends or associates. Do you need to upgrade your circle by weeding out the whiners?
  • Humor helps. Sometimes, a person has to to laugh to keep from crying.  Are you able to see the levity in a situation? Commiserating can help a group through tough times.
  • Change the pronoun. How do you coerce cooperation? How do you pull rank when you have no rank to pull? To avoid backlash, make a subtle pronoun shift that'll produce a major change. Instead of saying, "You need to do this," try "I need you to do this."
  • Mind the three Ps to protect yourself against others' negativity. Don't take things personally--it's usually not about you. Most difficult stretches aren't permanent--remember that this, too, shall pass. And always retain your perspective--how important is this development in the big picture?

Benefits Of CUs Getting Boost From Media

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WASHINGTON (10/15/13)--The Credit Union National Association and the credit union system saw a busy week last week in the media. Mainstream press not only focused on credit unions' efforts to assist furloughed federal employees, but also carried general articles touting the benefits of credit unions.
 
CUNA was cited in The Wall Street Journal as an expert on consumer credit card behavior, and in a Tennessean opinion-editorial about preserving the credit union tax status. The Fontana Herald News picked up CUNA Chairman Patricia Wesenberg's op-ed on "Tax Reform Should Put Consumers First--Not Banks."
 
MoneyTalkNews carried a syndicated article by Stacy Johnson outlining seven reasons to join a  credit union. The article has had wide coverage, including in MSN.Money and Yahoo! Finance. Her reasons for joining a credit union include:
  • Lower rates on loans;
  • Higher rates on savings;
  • Better credit card deals
  • Lower and fewer fees;
  • Ease of borrowing;
  • Convenience via shared branches,
  • Human beings answering the phone; and
  • Deposits guaranteed by a federal insurance fund.
To join a credit union, she advises going to locator sites such as "the Credit Union National site."
 
And an article on Credit Unions Online noted that Biz2Credit Small Business Lending Index says the national member business loan growth is up 45% for August, proving that credit unions continue to be a necessary resource for business owners.
 
Others featuring articles favorable to credit unions in their furlough coverage included The Washington Post, Buzzfeed, CBSNews, and Baltimore Sun.
 
To access the articles, go to the "In the Media" link.

CUs Continue Community Outreach Efforts

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MADISON, Wis. (10/15/13)--As credit unions continue service efforts for their communities, many will pause Thursday and Unite for Good--to show the world the value of credit unions and what the credit union difference does.
 
Credit unions do big things--witness their response to the government shutdown--on behalf of their members and communities. Some are life changing--like offering a scholarship or finding creative ways to help people take the steps to make their lives better. Others such as painting or repairing an individual's house, sprucing up the community garden or planting trees are smaller events but still meaningful.
 
Thursday is International Credit Union Day, traditionally the third Thursday of October since 1948.  Many credit unions will share good news stories to heighten awareness about credit unions. Here are a few.
 
Five Miami Valley, Ohio, families will compete to win the $10,000 grand prize in Fairborn, Ohio-based Wright-Patt CU's Savings Race 6--Health and Financial Fitness Edition, which kicked off at Kettering Health Network's (KHN) Indu & Raj Soin Medical Center Wednesday with a one-mile walk to demonstrate the importance of physical activity. WPCU has teamed with KHN, Dayton Children's Hospital, Horan Insurance and the Ronald McDonald House Charities of the Miami Valley for this special edition. (Photo provided by Wright-Patt CU)
Five Miami Valley, Ohio, families will compete to win the $10,000 grand prize in Fairborn, Ohio-based Wright-Patt CU's Savings Race 6--Health and Financial Fitness Edition, which kicked off at Kettering Health Network's (KHN) Indu & Raj Soin Medical Center Wednesday. The event aims to get the entire community involved.
 
WPCU teamed with KHN, Dayton Children's Hospital, Horan Insurance and the Ronald McDonald House Charities of the Miami Valley for this year's race. Five families--The Adamses of Fairborn, the Haneys of Beavercreek, the Henry-Joneses of Centerville, The Priests of New Carlisle and The Rodriguezes of Xenia--will compete during the next eight months as they learn how to become healthier both financially and physically.
 
The organizations will provide health advisers and subject matter experts including doctors, dietitians and outreach specialists for each family's team. WPCU and the other organizations  also provide direction and resources to encourage children and families to pursue healthy lifestyles as part of the race.
 
Wright-Patt CU noted that the community can benefit from the competition by:
  • Accessing resources, reading team blogs and voting for their favorite team at SavingsRace.com;
  • Attending free community "Healthy Hot Topic" workshops;
  • Completing a Saving Race Mini Race checklist; and
  • Tuning into family updates through WDTN's Channel 2 News on Tuesdays and Saturdays.
In Minnesota, two credit union groups have been active--with scholarships and fundraisers. Last month the Family Involvement Council (FIC) announced its 2013-2014 scholarship program for Minnesota credit union members continuing their education. The FIC will award $10,000 in college scholarships next spring--two $1,000 scholarships and 16 $500 scholarships will go to 18 members throughout the state.  Applicants will be asked to write an essay that answers the question:  "The average age of credit union members in Minnesota is 47 years old. To be sustainable, credit unions need to serve younger generations, as well. What can credit unions do to attract and engage young adult consumers?"
 
Also, Minnesota Credit Unions for Kids hosted its 18th annual golf tournament fundraiser to support Gillette Children's Specialty Healthcare, helping kids with disabilities. The tournament's 105 golfers, representing 14 credit unions and 18 vendor organizations, raised more than $35,000, including $10,000 from CO-OP Financial Services' Miracle Match program.
 
This week, in Moline, Ill., IH Mississippi Valley CU will celebrate the credit union difference, with a "guerilla" marketing campaign:  employees will hand out 1,000 Visa gift cards valued at $10 each to members.  Employees are tasked with "catching" members using their debit and credit cards at everyday places like the grocery store and gas station--anywhere except a branch.  "Now our employees will be 'catching' members using an IHMVCU credit or debit card and saying thank you for being a member," said Dennis Hall, president/CEO.
 
The Northwest Credit Union Association's Boardwalk of Miracles--a silent auction held during its annual Amplify Convention last week--raised more than $130,000 for Children's Miracle Network Hospitals. "The money you raised tonight will stay right here in the Northwest," said NWCUA President/ CEO Troy Stang. "It will help to fund research. It will build ICU wings for preemies. It will help to hire the most brilliant minds in medicine, who are dedicated to saving children's lives."
 
Watch for more coverage about International Credit Union Day and the good credit unions are spreading throughout the week in News Now.

Delaware, Illinois CUs Among Latest Consolidations

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MADISON, Wis. (10/15/13)--Eleven new mergers or planned mergers of U.S. credit unions were recently announced, signaling that the trend toward consolidation continues.
 
Here are the latest mergers.
  • The members of $18 million asset Seaford (Del.) FCU met Sept. 26 to approve a merger into Del-One FCU, Dover, Del., with $305 million in assets. The challenges of a complex regulatory and compliance environment coupled with Seaford FCU's desire to expand service delivery channels and product and service offerings were the primary reasons for the merger. The effective date of the merger was Oct.1, and system conversions will be completed about Dec. 1.   
  • Southern Illinois Area CU, Swansea, Ill., will merge into Arsenal CU, Arnold, Mo., at the end of the year. Through the merger, Southern Illinois Area CU's 1,900 members will have access to more products and services and the conveniences of a larger branch network while Arsenal's 24,000 members will gain access to another branch, the credit unions said.
  • Great Lakes CU, with $632 million in assets, in North Chicago, Ill., has merged with $14 million asset Chicagoland Electrical Industry CU in Willow Springs, Ill. Chicagoland Electrical Industry CU will gain the economy of scale a larger financial institution can provide as GLCU offers a variety of financial products and services, some of which were not currently available to CEICU members (Chicago Daily Herald Oct. 8).
  • The proposed merger of $83 million asset ChevronWest CU, Bountiful, Utah, into $2.2 billion Chevron FCU, Oakland, Calif., was approved by ChevronWest members and will be finalized on Oct. 31, when ChevronWest accounts are moved onto Chevron FCU systems.
  • Members of $60 million asset United Services CU, Ashville, N.C., approved a merger with $583 million asset Self-Help CU, Durham, N.C. The credit unions described the merger as a proactive step to capitalize on their relative strengths and expand impact within Western North Carolina.
  • Genie-Watt CU, with $14 million in assets in Bismarck, N.D., and $65 million asset Railway CU, Mandan, N.D., have merged. The merger creates cost savings by eliminating expenses and creating economies of scale with more assets and members, said Paul Brucker, Railway CU president Paul Brucker.
  • Argent CU, with $191 million in assets in Chester, Va., and $10 million asset Assurance FCU, Richmond, Va., will merge, effective Feb. 1, with Argent remaining as the surviving entity. Argent's long-term strategic objective of continued growth and operating efficiency, and focus on building the cooperative nature of the credit union system through strong merger partners, were cited as reasons for the merger.
  • Church Koinonia FCU, with $2.5 million in assets, has merged with $969 million Tennessee Valley FCU, Chattanooga, Tenn. Church Koinonia FCU was started by mostly black churches to serve low- to moderate-income families specialized in helping low-to-moderate income residents get loans (Times Free Press Sept. 22). Among the reasons cited for the merger by Church Koinonia FCU were increased regulatory requirements. 
  • The National Credit Union Administration approved a merger between $849 million asset Goldenwest CU, Ogden, Utah, and $139 million USU Charter CU, Logan, Utah. The two credit unions combined will have 26 branches. USU CU branches will maintain its brand, but will acknowledge its association with Goldenwest in its signage (Standard Examiner Aug. 24).
  • Members of $3.5 million Lima (Ohio) Postal Employees FCU voted in favor of merging into TopMark FCU, also of Lima (The Delphos Herald Sept. 18). The merger, which received regulatory approval in July, became official Oct. 1. Postal Employee FCU's members will have access to more products and services, including more than 5,000 shared branching locations, 32,000 ATMs, real estate loans and more.
  • The Oklahoma State Credit Union Board and the NCUA approved the merger of $1.3 billion TTCU The Credit Union, Tulsa, Okla., with $43 million NEO FCU, Miami, Okla. (Tulsa World Sept. 7). NEO FCU's two branches will be added to TTCU 13 branches.

Patrick Adams: Crossing the Line To Fight the Good Fight

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MADISON, Wis. (10/15/13)--When you think of someone willing to cross a line in the sand, Patrick Adams should immediately come to mind. He's a credit union movement Rock Star, according to Credit Union Magazine.

The magazine is celebrating the credit union movement's rock stars--those ordinary people who manage to pull off the extraordinary--in honor of International Credit Union Day.
 
This is the first of five credit union rock stars News Now will be highlighting this week.
 
In 2012, Adams, the CEO of St. Louis Community CU defied a traditional boundary to begin a four-year collaboration with a bank.
 
His reason? The need to bring all the power he could muster to reach a dramatically underserved community.
 
"The problems in St. Louis are bigger than any rivalry between banks and credit unions," said Adams, noting the city has the nation's third-most underserved African-American population.
 
Eighty-five percent of the credit union's members are low-to-moderate income, and 80% are African-American.
 
"We're one of the largest CDFIs [community development financial institutions] in the city, and a bank could use us to satisfy its community reinvestment needs," he said. "When I ran into an old friend and asked what he was up to, he said he was working for Carrollton Bank. I told him that if his bank needed to use CRA [Community Reinvestment Act] dollars, our credit union was the one to go through. Shortly after that, I got a phone call."
 
It took about a year to set up the collaboration. "There were no problems at the local level, but we guess it took a while to get the [Federal Deposit Insurance Corp.] to fully understand--the approach was so novel. A big help to getting this done was the commitment of the bank's president to serving the market. He really understands the need."
 
Adams' biggest target is payday lenders. "Missouri has the second-largest concentration of payday lenders in the U.S. They flock here and prey on the disadvantaged because there's very little industry regulation."
 
The arrangement with Carrollton Bank involves $800,000 to help with operations, including financial education, marketing and branch space. "We funded a branch with them, and have 10 other offices as well," Adams said.
 
In an in-your-face show of taking the--fight to the foe, Adams placed one of the branches in a strip mall directly between two payday lenders.
 
"We wanted to go after them. I'm a credit union veteran who has taken the credit union movement's mission seriously for years. If credit unions drift away from their original mission, it's not good. So we decided to find an economically disadvantaged community and own it."
 
Honoring credit union rock stars is just one way credit unions and more than 196 million credit union members in 100 countries are preparing to "unite for good" with a variety of activities to celebrate the credit union difference and demonstrate the value of credit unions on ICU Day.
 
This year's theme, "Credit Unions Unite for Good," builds on the Credit Union National Association's Unite for Good campaign, which has united credit unions to work to remove barriers, create awareness of the good credit unions do for members and their communities, and foster service excellence to encourage Americans to choose credit unions as their best financial partner.

Crystal Ball Needed To See Payments' Future

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UNCASVILLE, Conn. (10/15/13)--Not even a fortune teller can forecast exactly which revolutionary new payment model might supplant "good ol' 1960s era card swipe technology," but George Hofheimer says the crystal ball will deliver the answer in a riddle:

Click to view larger image Filene Research Center's George Hofheimer tells a credit union audience that they would need a crystal ball to predict the next big thing in the payments system. (CUNA Photo)
What system's faster, more accurate, and secure, most likely adheres to the existing "payment plumbing" of liability custody, and passes muster with the five transaction touch points: Consumers, merchants, issuers, acquirers, and card associations? Whatever fits that profile is likely to pull ahead of the pack.

Clearly, the barrier to acceptance is steep, Hofheimer, chief researcher and innovator at Filene Research Institute, told Community Credit Union & Growth Conference attendees at a breakout session on the future of payments. The annual conference was held Oct. 8-11.

"In the short term, we're probably not going anywhere dramatically different anytime soon," Hofheimer said.

He asked his credit union audience to consider the hand-wringing over the 2015 liability deadlines for conversion to EuroPay, MasterCard, and Visa (EMV) chip technology. EMV doesn't even fundamentally upset the apple cart of swipe technology, which remains "absolutely dominant," and its debit and interchange fees upon which many credit unions rely.

Essentially, the new payment models "haven't taken hold because the technology we have today is good enough," Hofheimer summarized. "Consumers like it, and merchants for the most part like it, despite the fees."

That said, Hofheimer subscribes to Bill Gates' philosophy on futurism. In the Microsoft founder's words: "We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next 10."

Credit unions closely monitor developments in the payments sector but generally concede that because they pale in size compared to megabanks, they're better positioned to act as fast-followers than as first-adopters, according to Hofheimer. Two-thirds say they'll actively consider new payment providers in the next 24 months.

Investigate what systems megabanks use, since they're industry leaders, advised Hofheimer, and don't base your decision on consumer polls.

"Consumers are extremely fickle," Hofheimer said. "When you look at consumer data on how they want to pay in the future, what they say and do are two very different things. And generally, the answer to which system they prefer is, 'I really don't care. I just want to buy stuff.'"

With a long-range view in mind, Hofheimer suggested a few strategies for credit unions:
  • Capitalize on physical assets. Consumers aren't comfortable with managing their financial lives in the way they're comfortable bypassing other old standbys like the record store or book store. They always need a safety valve, and that's credit unions.
  • Leverage payments data. Take stock of the information you have in hand, make sense of it, and use it to deepen relationships with customers and merchants.
  • Focus on commerce. Go beyond payments and attempt to develop partnerships in your community. Explain to the local gas station owner (using data you've mined from your credit union) that your members spend $3 million a year there, and ask to forge a relationship.
  • Experiment with small bets. Invest in a start-up or fledgling payments technology firm with an amount of money that won't break you.
  • Collaborate with other credit unions and with vendors. This could be a coalescing moment for credit unions. They might be too small to solve the situation individually but could band together to find a solution--similar to how banks forged together on Visa to advance past the cash-and-check era. "In the worst case scenario--if interchange went away--wouldn't you wish collaboration would've happened 10 years earlier?" Hofheimer asked.