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CU System Archive

CU System

Oxford FCU partners to help students open checking accounts

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MEXICO, MAINE (10/31/11)--Through a partnership between Oxford FCU (OFCU), Mexico, Maine, and Oxford Hills Middle School (OHMS), 285 eighth grade students learned how to open and use a checking account from financial professionals at the credit union.

Susan Graves, vice president of branch administration at the $134 million asset credit union, and volunteers from the credit union visited Oxford Hills Middle school for two days of instruction and hands on activities, using a workbook and Power Point presentation to teach the basics of using a checking account.

"OFCU is committed to inspiring and enabling financial responsibility starting at an early age," said Cindy Giroux, vice president of human resources and marketing at OFCU. "We feel it's important in this age of technology, to instill good, basic financial habits that can serve as a foundation upon which to build a better financial future."

Oxford FCU is in the third year of partnering with Oxford Hills Middle School where the mission is to provide financial literacy education to students. The classroom instruction taught the 8th graders how to write a check, endorse checks, fill out deposit slips, balance their checkbooks and use a debit card.

As a follow up to the classroom lessons, OFCU arranged a day of continued financial learning at Harvest Hill Farms, where students mixed fun and adventure together, as they applied their new financial skills to maneuver through the "Big Corn Maze Adventure". The corn maze wasn't "just a walk in the stalks," the maze is a labyrinth of passages where students stopped at "Checkbook Stations" strategically located within the maze manned by a teacher from OHMS.

Students were required to write a check, make an entry in their checkbook register or perform some other task they learned in class, in order to proceed through the maze. The credit union supplied each student with a checkbook and register, calculator and pencil, and a backpack bag to carry all their supplies.

OFCU simultaneously conducted three other events at Harvest Hill Farms that reinforced the student's new financial literacy skills. The events included a history of Harvest Hill Farms and a visit to the Petting Farm, where students learned the cost of owning a pet and wrote checks to pay for the upkeep of their own pretend pet. And just to keep it fun, students learned and sang the OFCU jingle which will be posted to You Tube for all to watch and vote on. Each student attended all four events at the farm, as they rotated throughout the day, stopping only for lunch.

"It took a lot of work to pull the event together," said Carlene Treadwell, guidance counselor at OHMS. "But OFCU, with help from teacher volunteers and some good planning, provided both classroom instruction and a day at Harvest Hill Farms for some really valuable education."

"The project began as a question of how OFCU could work with Harvest Hill Farms to help support the community, and after some brainstorming and planning, turned into this fun educational experience," said Kim Davis, OFCU marketing coordinator. "As part of OFCU's sponsorship with Harvest Hill Farms, Susan Graves and I worked with Harvest Hill Farms' marketing and educational coordinator, John Wallace, to create the custom corn maze stations, relating them to the financial literacy theme for the day.

"The kids had fun, and at the same time acquired some great knowledge and skills," she added. "OFCU is proud to provide these kids with financial literacy education; it's what credit unions are all about, helping people and the supporting our community."

CUNA helps kick off Intl Year of Co-ops in N.Y.

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NEW YORK (10/31/11)--Two days of meetings and events starting today in New York City will launch 2012 as the United Nations' International Year of Cooperatives.

The International Year of Cooperatives marks the first time the United Nations has awarded a business model an "International Year" designation. To commemorate the event, more than 150 leaders from some of the world's largest cooperatives have gathered in New York for the official launch, where they will consider how to foster conditions that will ignite cooperative enterprise growth throughout the decade. The leaders come from all sectors of the economy, including financial services, housing, health, retail and agriculture.

"I am looking forward to participating in International Year of Cooperatives events," said Bill Cheney, president/CEO of the Credit Union National Association. "I see this as an opportunity for credit unions to build on all the great attention we've been receiving in media across the country in recent weeks. It is exciting to be launching an international celebration of cooperatives at a point in time, today, when people are particularly receptive to the benefits of the cooperative business model."

"In naming 2012 the U.N. International Year of Cooperatives, the United Nations has both recognized and honored the important role that credit unions and other cooperatives play on the global stage," said Brian Branch, World Council of Credit Unions (WOCCU) president/CEO and one of 20 global leaders invited to serve on the International Year of Cooperatives Advisory Group. "Now it is up to us to advance the good work we have already started."

Today's events at the United Nations begin with a roundtable discussion involving some of the world's top cooperative leaders, including Maria Aranzazu Laskurain, secretary general of Mondragon; Li Chengyu, president of the All China Federation of Supply and Marketing Co-operatives; and Piet Moerland, chairman of Rabobank.

After the roundtable, Dame Pauline Green, president of the International Co-operative Alliance (ICA)will address the U.N. General Assembly. In her address, she will emphasize the important role cooperatives play in global sustainable development and financial stability.

She will be followed by former U.K. Prime Minister Gordon Brown, who will discuss cooperatives' contribution to the global economy.

On Tuesday, leaders of some of the world's largest cooperatives will meet at the ICA Leadership Forum in New York to identify the conditions needed to incite dramatic growth and make cooperative enterprise the fastest-growing business model by the end of the decade. Hosted by Green, delegates will hear keynote presentations from Peter Marks, CEO of the Co-operative Group, U.K., and Monique Leroux, president/CEO of Desjardins Group, Canada. Marks also spoke at WOCCU's July conference.

The Federation of Community Development Credit Unions, based in New York and operating in support of credit unions serving low-income populations, is holding its own kickoff event Tuesday at the Ford Foundation. The event, "New York: Building a Cooperative City," will host speakers from local government and the cooperative sector.

Some of the other national leaders attending the event are Mary Martha Fortney, CEO of the National Association of State Credit Union Supervisors; Charles E. Snyder, president/CEO of the National Consumer Cooperative Bank (NCB).

New York City Council Speaker Christine Quinn will issue a proclamation recognizing the contribution of cooperatives to the life of the city, to be followed by presentations by representatives of credit unions, food, housing and worker co-ops. 

Co-sponsors of the event include the Council of New York Housing Cooperatives and the National Cooperative Bank, along with the federation.

CMG Mobile technology presents challenges opportunities to CUs

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SAN DIEGO (10/31/11)--The rapid growth of mobile technology presents opportunities and challenges as credit unions attempt to meet their members' mobile banking expectations, a lending expert told attendees of the California and Nevada Credit Union League Annual Meeting on Thursday.

Gen Y members aren't alone in embracing the convenience and benefits of smartphones and other mobile devices, said Mark Nelson, LOANLINER specialist, CUNA Mutual Group. A study indicates 25% of Americans say they are now doing most of their browsing on their mobile devices instead of their computers, he added.

"It's interesting and relevant to credit unions that consumers use their mobile devices as a primary method of accessing the internet," said Nelson. "Think about it. If that's their primary method of access to the products and services on your website, are you ready for that?"

Nelson cited a CUNA Mutual Lending Strategies and Trends study in 2010 which showed approximately 30% of credit unions offered mobile-enabled loan applications and nearly the same amount planned to in the future.

"If your members are--or will be--applying for loans on your web site with a mobile device, does that loan application work on a smartphone? Is it suitable for a very small screen on a smartphone?" he asked.

Nelson cited loanliner.com, CUNA Mutual's online loan origination system used by more than 400 credit unions, to illustrate the importance of having the technology members need to navigate a loan document on their smartphones.

He identified two technology approaches to accessing a mobile loan application--Native Apps and Mobile Web. Nelson said when creating loanliner.com technology for mobile devices, CUNA Mutual opted for Mobile Web, which optimizes the loan application for use on a smartphone.

"Rather than installing a program, or app, on the smartphone, Mobile Web detects the browser used by the mobile device and serves up mobile web pages optimized for that device," he explained. "And because compliance is such a significant aspect of our loan origination product, we need to have control over app updates due to the quarterly compliance updates loanliner.com employs.

"In the mobile world, the ability to ensure the member is always applying using the most current and compliant version is complicated by whether the loan application is a Native App or uses the Mobile Web," he added. "We decided the best way to help credit unions remain compliant is to go with Mobile Web."

Nelson said Mobile Web optimizes the Web page to fit the user's mobile device so the user doesn't have to scroll around to see the entire page. "This simplifies and cleans up the page so members can more easily access and navigate a loan app--for example," he said. "It makes it less difficult to navigate the loan application on a small screen and can improve the completion rate of loan applications."

CFPB meets with Affinity on home turf

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ST. PAUL, Minn. (10/31/11)--Members of the senior management team and board of directors of Affinity Plus FCU, St. Paul, Minn., met face to face with Consumer Financial Protection Bureau leaders Wednesday in Minneapolis.

The Affinity Plus team met with Raj Date, special advisor to the secretary of the treasury for the CFPB and, Elizabeth Vale, the bureau's assistant director for community banks and credit unions. Date and Vale were in the Minneapolis-St. Paul area for a town hall meeting and to discuss the bureau's new student lending initiative.

With its "Know Before You Owe" student loan project, the CFPB is helping the Department of Education gather feedback to improve the way schools communicate financial aid offers to students. As part of that project, the bureau has released a one-page "financial aid shopping sheet," a model disclosure form that colleges and universities could use to make the costs and risks of student loans clear  and before students enroll.

Date and Vale met with the Affinity Plus team for about an hour and twenty minutes, Affinity Plus President/CEO Kyle Markland told News Now.

"They wanted to meet with a community financial institution that was involved in students lending mortgage lending and consumer education," Markland said. "Those are all areas we emphasis in building relationships with our members."

Affinity Plus FCU was one of the founders of Credit Union Student Choice, a credit union service organization that offers private student lending. The credit union also has six branches on college campuses, Markland said.

Among the additional products Affinity Plus offers is a Free2BU computer loan that allows students to lower their rate by 2% if they maintain a B average.

The credit union's Fresh Start home loan program combines mortgage lending and consumer education. Members receive a traditional 30-year mortgage with the first 12 months of interest free. As a result, members make payments that reduce their principal balance, allowing them to to build equity. When members enter into the 13th month, they transition into a fixed rate at 1% over the current market rate. During this time the member will create a budget and hold monthly meetings with a credit union representative to help them get back on track.

"We hear a lot of complaints from consumers who are current with their mortgages, but banks won't work with them," Markland said. "This is one of the ways we've responded to that need."

Date and Vale were "impressed and inquisitive" about  the Affinity Plus initatives, Markland said.

Following the meeting, Markland attended the CFPB town hall meeting, which included an open mic session where consumers spoke about negative experiences working with both traditional and nontraditional financial institutions.

These are good, honest people and something bad happened to them, but nobody's there to help them," Markland said. "It was a very sad portion of the night, but it was very eye opening. What you hear about is only the tip of the iceberg."

iChicago Tribunei CUNA notes CUs grow as mortgage option

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MADISON, Wis. (10/31/11)—An Chicago Tribune article on Friday touted credit unions as a borrower-friendly source home owners looking for refinancing options.

The article by syndicated columnist Lew Sichelman will appear in numerous newspapers and other publications nationwide.

Credit unions are on track to originate just $68 billion in mortgages, according to statistics provided by Mike Schenck, senior economist at the Credit Union National Association, for the article.

Although credit unions are often overlooked by loan shoppers, they offer the same loan products as other mortgage lenders, the Tribune said.

"Moreover, credit unions usually don't tack on all the junk fees that more traditional lenders like to charge," the article said. "They also tend to offer better, more personalized service. Indeed, they consistently earn the highest marks among financial institutions in customer satisfaction surveys."

The article specifically cited Kinecta FCU, a California-based credit union with 225,000 members, which recently launched a program that allows high-net-worth members to count a percentage of certain assets as income for qualifying purposes.

ATM suits 17 nonbank operators sued over disclosures

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LAS VEGAS (10/31/11)--A cased filed in U.S. District Court cited 17 Las Vegas nonbank operators of ATMs for for allegedly not following rules about disclosing fees.

Regulation E set by the Federal Reserve a decade ago state that any ATM withdrawal charge, typically $2, must be noticed on or near the machine and on the screen before completing a transaction. Violations can lead to penalties as high as $500,000 (Las Vegas Review-Journal Oct. 28).

The ATMs locations include the Golden Nugget casino, a Greyhound bus station restaurants and convenience stores. But plaintiff's attorney Mark Henness said the main concern is financial institutions that do not provide disclosures.

Many ATM operators are unaware that they must display free disclosures both on the outside of the machine. Many of those cited only displayed the disclosure on screen.

Henness said his law firm is pursuing the cases for the benefit of consumers.

CU delinquencies fall but loan growth could be zero

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MADISON, Wis. (10/31/11)--Although credit union loan delinquencies dropped to a cyclical low in September, this year could see no loan growth for credit unions, according to a Credit Union National Association (CUNA) economist's analysis of September's monthly  sample of credit unions.

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Credit union loans outstanding increased 0.04% during September, the sixth consecutive month of positive loan growth for credit unions. Fixed-rate mortgages led loan growth with a 2.2% increase, followed by used-auto loans (0.3%) and unsecured personal loans (0.1%). Credit card loans decreased 0.5%, home equity loans and new-auto loans both declined 0.6%, and adjustable-rate mortgages fell 2.2%. Credit union loans totaled $581.2 billion, compared with $582.5 billion in September 2010, said the monthly estimates.

"Credit union loan balances were essentially unchanged in September as loan originations were offset by loan amortizations, prepayments and charge-offs," Steve Rick, CUNA senior economist, told News Now. "It appears that 2011 will be the third consecutive year of zero loan growth. We expect loan balances to grow 3% in 2012. However, that will be due to rising job and income growth and the desire by members to release some pent up demand.

"On a brighter note, credit union 60-plus-day loan delinquency rates fell to a new cyclical low of 1.51% in September, down from 1.75% a year earlier," Rick said.

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Credit union savings balances increased 1.4% in September, compared to a 0.5% decrease in August. Share drafts grew 8%, followed by regular shares (1.4%), individual retirement accounts (0.7%), and money market accounts (0.4%). One-year certificates fell 0.5%. Credit union savings in September totaled $838.9 billion--or $1.7 billion more than the $797.2 billion in September 2010.

"Credit union savings balances rose a strong 1.4% in September because of the month ending on a Friday payday; share draft accounts rose by 8%," Rick said. "Savings balances are expected to rise 5% in 2011 with a similar number forecasted for 2012. Until now, members have preferred to pay down existing debt with any surplus funds rather than boost their savings balances."

The loan-to-savings ratio remained at 70%. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 19%.

The movement's overall capital-to-asset ratio remained at 10%. The total dollar amount of capital is $99 billion.