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Tax Threat 'Most Serious' For CUs, MnCUN Leader Writes In Letter To Editor

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ST. PAUL, Minn. (10/25/13)--Mark Cummins, president/CEO of the Minnesota Credit Union Network, defended the credit union tax status in a letter to the editor that appeared in the Oct. 21 issue of the St. Cloud Times. Cummins emphasized that eliminating credit unions' exemption from corporate income tax "represents the most serious threat to our industry, farmers and communities that we've faced."
 
Cummins' letter was in response to an earlier letter in the St. Cloud Times that suggested credit unions be taxed the same as banks. As noted by Cummins in the letter, the debate comes at a time when the nation's tax-policy writers are considering a "blank sheet" approach to tax reforms, where each entity has to make the case for having their current status extended.
 
"Congress is taking a close look at all tax exemptions, including credit unions' exemption to corporate income tax," Cummins wrote.
 
Credit unions emphasize communities before profits, Cummins added. "Any benefits received from the exemption are passed to members," he wrote.
 
"In fact, every $1 of credit unions' corporate income tax exemption puts $10 into the pockets of members and communities. Credit unions also pay millions of dollars in property, sales and payroll taxes each year."
 
Because of their cooperative structure, credit unions offer generally lower interest rate loans and reduced fees, Cummins wrote. "The substantial savings Minnesota credit unions provide to consumers far outweigh any revenue that would be raised by taxing credit unions," he added.
 
"Eliminating the credit union corporate income tax exemption would result in a tax increase on 1.5 million Minnesotans and ultimately could lead to less consumer choice."
 
He urged Minnesotans to contact their lawmakers in support of preserving the credit union tax status.
 
The Credit Union National Association has created a "Don't Tax My Credit Union" campaign to help credit union advocates, including their members, contact lawmakers with that message.  (See the resource link.)
 
To read Cummins' letter use the link.

Fla./Ala. CUs Meet With Cheney, LaPine And State Lawmakers

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BIRMINGHAM, Ala., and TALLAHASSEE, Fla. (10/25/13)--This week, for the third year in a row, Credit Union National Association President/CEO Bill Cheney visited Alabama and the Florida panhandle to meet with lawmakers and tour local credit unions. 
 
Click to view larger image For the third year in a row, Credit Union National Association President/CEO Bill Cheney toured Alabama and Florida credit unions. Here, from left, Cheney is joined by Patrick La Pine, president/CEO of the League of Southeastern Credit Unions and Heath Harrell, president/CEO of Guardian CU, Montgomery, Ala. (Photo provided by League of Southeastern Credit Unions)
Joined by Patrick La Pine, president/CEO of the League of Southeastern Credit Unions, Cheney met with State Sen. Slade Blackwell (R) and State Rep. Paul DeMarco (R) at a reception in Birmingham. Blackwell's and Demarco's presence were critical at a time when comprehensive tax reform is under discussion, the league said.

Also, state legislation on public deposits and an update to the State Credit Union Act will be introduced in 2014. Cheney and La Pine provided a broad view of issues concerning credit unions in Alabama and throughout the country.  

Cheney and La Pine were also able to meet with individual credit unions and attended chapter meetings in Huntsville, Ala., Montgomery, Ala., Birmingham, Ala., Mobile, Ala., and Pensacola, Fla.
 
In total during their visit they met with 43 credit unions, 37 CEOs and more than 180 credit union staff.
 
In Huntsville, Cheney presented an overview of tax reform and the "Don't Tax My Credit Union" initiative to Muscle Shoals and Northeast Chapters at Redstone FCU.
 
"Getting a chance to interact with state lawmakers was very positive," said the league's La Pine. "It's not often that they get to hear from the national movement. I think it helps to give them a better perspective of their local credit unions."
 
The chapter meetings gave credit unions a chance meet with Cheney, express concerns and offer feedback. Cheney presented a national overview of the movement, including tax reform efforts on Capitol Hill and CUNA and the state credit union leagues' "Don't Tax My Credit Union" advocacy initiative.
 
Credit unions also inquired about the Affordable Healthcare Act, National Credit Union Administration's exam issues and the Consumer Financial Protection Bureau. Cheney said the CUNA national examination survey will open again soon. He also stressed the importance of building relationship with examiners.

CUs Cited Among GoBankingRates.com Local Economic Builders

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MADISON, Wis. (10/25/13)--Credit unions were featured prominently in an Oct. 21 GoBankingRates.com article highlighting financial institution that offer strong local financial literacy programs.
 
The article, "20 Banks and Credit Unions Building Strong Local Economies Through Education," included 12 credit unions.
 
The credit unions included:
  • America First CU, Ogden, Utah, which partners with two local elementary schools to help mentor students and support school programs. America First is involved in "Warm the Soles," a program that distributes new shoes to economically-disadvantaged students in Utah.
  • Cy-Fair Federal CU, Houston, for a scholarship that recently presented $7,000 in scholarships to seven graduating high school seniors. The credit unions was also recently awarded the Boys and Girls Country 2012 "Friend of Children" designation.
  • Dakota Plains FCU, Lemmon, S.D., which supports local children and schools through scholarship programs, drives and donations. This year, the credit union plans to issue a $250 scholarship to applicants from each of its five branches.
  • Flag CU, Tallahassee, Fla., for its efforts in supporting education and the local community through partnership with local schools, supply donations and drives. Flag CU delivered donated school supplies to W.T. Moore Elementary just before this year's back-to-school season.
  • Foothill CU, Arcadia, Calif., which developed the Classroom Improvement Grantto supply funds for academic awards, equipment educational software, special books or materials. Grants are awarded in $200 amounts and teachers/learning specialists don't need to be Foothill members to qualify.
  • Great Lakes CU, Chicago, which employs the Credit Union National Association's "Mad City Money" program to teach high school students about finance through a series of real world role-play activities. The credit union also awarded six $1,000 college scholarships to local students.
  • LA Financial CU, Los Angeles, which offers scholarships and an internship program for high school and college students who want to gain real world professional experience and learn more about credit union operations.
  • Mission FCU, San Diego, for its "Mission 4 R Schools" program, which donates $25 to a school every time a member opens a Mission checking account; and "Mission 2 $ave," a financial literacy program for children. Mission was a 2012 recipient of the CUNA 2012 Desjardins Youth Financial Education Award for best youth savings program.
  • MONEY FCU, Syracuse, N.Y., its scholarship program, which gives away $7,500 in scholarships to ten high school seniors, and donations to Father Chaplain's Guardian Angel Society, which provides tuition assistance, mentoring and educational aid to local children.
  • Space City CU, Houston, which held its third annual Wolf Scholarship Golf Classic on November 5th 2012, an event that helped raise $10,000 for a new scholarship fund. The credit union 10 scholarships.
  • Travis CU, Sacramento, Calif., for its contributions to the Mary Keith Duff Memorial Scholarship Fund and support of the local Boys and Girls club.
  • Ventura County CU, Ventura, Calif., which partners with THRIVES and School on Wheels to donate books and other school supplies for local children in need.

Michigan Community CU Launches Zombie-Themed Community Events

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JACKSON, MICH. (10/25/13)--Michigan Community CU has adopted a zombie theme for Halloween--using it for everything from charitable fundraising to promotion glow-rate auto loans--all as a way to give back to the community.
 
"We take pride in giving back to our community," said Tina Hamilton, Michigan Community CU interim CEO. "It is rewarding to see our members and staff really having fun with this promotion, and we are very excited to be participating in these community events."
 
The credit union donated $500 sponsorship to Zombie Walk Jackson, a 5k event in which all proceeds go to the March of Dimes. The walk was held on Oct. 12, with Michigan Community CU employees and volunteers participating. The March of Dimes supports research aimed at preventing birth defects, premature birth and infant mortality.
 
The credit union is also offering a Zombie Auto Loan Promotion, which includes a rate as low as 2.00% annual percentage rate up to 72 months, and no payments for 90 days.
 
Michigan Community CU "zombies" also appeared at a local gas station on Oct. 18 to pump free gas. The first 25 cars receive $20 in free gas to promote the Zombie Auto Loan Promotion.

CU System Briefs (10/25/2013)

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  • CINCINNATI, Ohio (10/25/13)--Two Chicago men were indicted by a federal grand jury on Oct. 16 for allegedly conducting a fraud scheme that revolved around a credit union ATM in the Cincinnati area. Dimitar Angelov, 28, and Dimitar Kolev, 26, were accused of using a hidden camera and an electronic scanning device called a "skimmer" to steal peoples' bank account information at a Springdale, Ohio branch of Kemba CU. If convicted, the pair face up to 15 years in a federal prison for fraud in connection with access devices. Skimming is a scheme that involves a secret recording device that copies bank account data after a person uses an ATM. The stolen account data can then be subsequently written onto a blank card and used to steal money from the account-holder. The pair were apprehended by Springdale police officers on Sept. 28 after someone reported suspicious activity--they were seen by the informant individually walking to the ATM and returning to their parked car. Upon searching the vehicle, police officers found numerous cards with magnetic strips. After searching the ATM, law enforcement officials found the skimming device and a pinhole camera. Secret Service agents joined in making the arrest and filed a federal complaint against the duo. Kemba CU is based in Cincinnati and has more than $571 million in assets ...
  • LINCOLN, Neb. (10/25/13)--Frank Wilber was named Liberty First CU's new president/CEO on Tuesday. He is set to replace retiring CEO Ken Bradshaw on Nov. 25. For the past seven years, Wilbur has served as the executive vice president of ELGA CU  in Burton, Mich., a cooperative with $340 million in assets that services six counties in eastern Michigan. Chartered in 1935 as the Burlington Employees Cooperative Credit Association, Liberty First serves Lancaster and Seward Counties in Nebraska ...
  • ALBUQUERQUE, N.M. (10/25/13)--Central New Mexico Community College honored New Mexico Educators' FCU by naming an outdoor area on its main campus after the cooperative. The area was named after NMFCU to recognize the credit union's recent $200,000 donation in support of scholarships. Both the credit union and the school are based in Albuquerque. NMFCU has over $1.2 billion in assets ...

Duchess of Cornwall, Archbishop of Canterbury Work to Promote CUs in UK

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LONDON (10/25/13)--Camilla, the Duchess of Corwnall, is teaming up with Great Britain's highest ranking clergyman to expand access to credit unions in the U.K.

The wife of Prince Charles invited the Archbishop of Canterbury, the Most Rev. Justin Welby, to her London home last week to discuss a partnership, after he launched a campaign to muffle the allure of payday lenders.

Calling them a "financial cancer," the Archbishop of Canterbury declared war on payday lenders in the United Kingdom in July by creating a credit union for clergy and members of the Church of England and Church of Scotland.  (News Now July 29)

He told the payday lender Wonga that he wanted to put it out of business by using the Church of England to promote credit unions. The church is currently in the process of launching the Anglican Mutual CU.

An aide close to the duchess said that she also is an enthusiastic credit union supporter and wants the Archbishop to channel that passion into his venture. (The Telegraph Oct. 20).

In May, Camilla joined London Mutual CU, based in the southeast London neighborhood of Peckham (News Now, May 17).

In July, Queen Elizabeth also raised the profile of Britain's credit union community, after honoring Darlington CU for its service to the community. (News Now July 31)

In the United States, the Credit Union National Association and credit unions are committed to offering Americans affordable alternatives to predatory payday lenders, with credit unions across the country providing alternatives.
Annual interest rates on loans from federal credit unions are generally capped at 18%. The National Credit Union Administration does offer some flexibility on short-term loans of a relatively small amount, on which credit unions are allowed to charge interest rates up to 10 percentage points higher than the established usury ceiling at the time.
 
Most credit unions with affordable alternatives to payday loans also keep a lid on servicing fees, and offer members financial advice and incentives to get them to switch to longer-term lower-cost lines of credit.