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Nevada CUs move to beef up auto loan market share

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RENO, Nev. (10/5/10)--Nevada's credit unions are aggressively campaigning to recover the large auto lending market share they held 18 months ago, according to Northern Nevada Business Weekly (Oct. 4). In 2009 credit unions nationwide held a 22.5% share of auto loans, thanks to a growth spurt that occurred when banks and automakers' captive finance companies tightened lending. Credit unions had money to loan, Bill Meyer of CU Direct Corp., an Ontario, Calif.-based company that provides technology for auto lending at credit unions, told the publication. Today, however, those competitors have returned to auto lending, and credit unions' share declined to about 17%, said Meyer. The article describes what local Nevada credit unions are doing to attract auto loans. Greater Nevada CU, Carson City, is talking directly to consumers via media ad campaigns urging borrowers "to drive something that's a little more you." It also has developed a preferred-dealer program in which it promotes dealers to members, and members get a price break. The credit union had $65.26 million in new-car loans at midyear, plus $68.2 million in used-car loans. The combined auto loans accounted for 40% of the credit union's $337.2 million loan portfolio. Reno-based Greater Basin FCU held about $59 million in auto loans at midyear, accounting for more than two-thirds of its loan and lease portfolio. It marketed to consumers with 3.99% loans for new- or used-vehicle purchases. It's now marketing a 1% cash rebate up to $300 on new loans and refinancings. Greater Basin also scheduled a free open house Oct. 16 where members and nonmembers can learn abut auto-financing options and the car-buying process.

One card steering lawsuit settled another filed

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WASHINGTON (10/5/10)--Visa and MasterCard announced a settlement agreement Monday with the Department of Justice (DOJ) and seven states over antitrust issues in their merchant acceptance rules involving merchants' "steering" consumers to less expensive payment forms. Meanwhile, DOJ also announced it had filed a similar antitrust lawsuit Monday against American Express Co. The DOJ said in the suit filed against AmExpress that the card company's rules it imposes on merchants that accept its cards are "anticompetitive" and "impede merchants from promoting or encouraging the use of a competing credit or charge card with lower card acceptance fees" (The Wall Street Journal and PaymentsSource Oct. 4). The Visa/MasterCard settlement did not involve any admission of wrong doing. The settlement is considered by some a victory for merchants, who have complained for years about the annual fees they pay to accept and process credit cards. The lawsuit against AmEx, which was filed in the U.S. District Court for the Eastern District of New York, stems from a DOJ review begun in 2008 of payment networks' rules. Most networks prohibit merchants from taking steps to steer consumers from using one brand's card instead of another to get lower interchange rates. AmEx, in a statement, said it has no intention of settling the case because the Justice Department is suing "a party proven not to have market power." Instead, said AmEx CEO Kenneth Chenault, the government's new approach "would hand an unfair advantage back to Visa and MasterCard." Visa said that as part of the settlement, it will allow U.S. merchants to offer discounts and other incentives to steer customers to a particular form of payment, including a specific network brand or to any card product, such as a "non-reward" Visa credit card. Reward cards cost merchants more, and merchants who agree to accept a company's cards must accept all of them, said the Journal. "The new rules will expand U.S. merchants' ability to discount for their preferred form of payment, though they will not be able to pick and choose amongst issuing banks." The settlement agreement does not address Visa's rule prohibiting U.S. merchants from surcharging customers, said Visa's press release. According to Josh Floum, general counsel at Visa Inc., "Visa has always allowed merchants to discount for cash and PIN-debit, and extending the ability to discount by network brand is a reasonable accommodation." He noted the settlement would not impact the ability to "continue growing our business by offering innovative payments products that consumers and merchants value above any others. The settlement gives U.S. merchants new tools to manage their acceptance costs while benefitting from the tremendous value electronic payments deliver." MasterCard General Counsel Noah J. Hanft noted, "Our discounting practices have long been more flexible than our major competitors' and have permitted merchants to discount for cash, checks, debit cards and other payment brands." Interchange fees has been a big topic in the U.S. Congress in recent years. Earlier this year, lawmakers passed a bill that, in part, allows the government to set interchange fees. The Credit Union National Association (CUNA) maintains that the fees are best set in the market and that the fees allow business costs, including the risk of consumer nonpaymentd, to be shared by the payments participants. CUNA also opposed the legislation on behalf of credit union members, arguing that such action could drive up consumer costs as well as limit consumer options, competition and technological innovation. This settlement and the new suit arrive as the Federal Reserve continues its work to implement the new law. Although credit unions with less than $10 billion in assets are exempt from interchange regulations the Federal Reserve Board is writing, CUNA is concerned that the law does not require the marketplace to accommodate higher fees for smaller issuers. CUNA advocates a two-tier interchange fee system to accommodate credit unions. CUNA and its Interchange Working Group are working to head off any unintended consequences of interchange regulation. (News Now July 28).

CUs Michigan First trademark issue settled

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LATHRUP VILLAGE and TROY, Mich. (10/5/10)--A Michigan credit union and a Michigan bank have settled a trademark dispute involving the words "Michigan First" in both their names. Michigan First CU, based in Lathrup Village, and First Michigan Bank of Troy announced Friday they have amicably resolved their trademark dispute, and all pending judicial and administrative proceedings stemming from the dispute have been dismissed. The details of the agreement are confidential, the two organizations said in a join press release (PRNewswire Oct. 1). First Michigan, with assets of more than $565 million, filed the trademark infringement lawsuit against the bank on May 12 in the U.S. District Court for the Eastern District of Michigan in Ann Arbor. It had sought an injunction against First Michigan Bancorp Inc., based in Troy, Mich. over the words "Michigan First" (News Now May 18). According to the complaint filed, the credit union adopted and used several service marks, all incorporating and prominently featuring the words "Michigan First." These include 'Michigan First Credit Union" for its credit union services, "Michigan First Credit Union Moneyworks,' for its internet banking services, "Michigan First Wealth Management Group" for its financial planning and estate planning services, and, the credit union's website. On April 30, state regulators closed Port Huron-based CF Bancorp, which operated 22 branches under the Citizens First name--19 of them in Michigan and many of them in the same market as the credit union. The regulators sold the bank's deposits and some of its assets to First Michigan Bank, a bank that was established in 2007 (Detroit Free Press via May 1).

CU System briefs (10/04/2010)

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* PITTSBURGH, Pa. 10/5/10)--Curtis James Porter, 46, of Ambridge, Pa., has pleaded guilty in a U.S. District Court to a Sept. 26, 2008, robbery of Friendly CU, Aliquippa, Pa. (7thspace Oct. 2). He faces up to 20 years in prison and a fine of $250,000 or both. Porter allegedly entered the bank, leaned over the teller's window and threatened, "Give me the money or I'll kill you." He fled with $9,600 but was caught outside by police officers alerted by credit union members who observed the robbery in progress and stayed on the phone with 911 until Porter was apprehended. The money was recovered. Sentencing was set for Jan. 28 ... * BEAVERTON, Ore. (10/5/10)--Three Oregon credit unions were recognized as "Top Employers" by Oregon Business Magazine, according to the Credit Union Association of Oregon. Providence FCU, Milwaukie, was the No. 1 non-profit organization in the state to work for in the 10-24 employees category. The competition involved more than 150 non-profit organizations in the state. Valley Health and Postal Employees CU, Salem, finished 14th in the small employers' competition. Oregonians CU, Milwaukie, ranked sixth among large employers, defined as having 75 or more employees ... * HARRISBURG, Pa. (10/5/10)--Citadel FCU honored U.S. Rep. Jim Gerlach(R-Pa.) during a breakfast Sept. 28 and thanked him for his support of credit unions, according to the Pennsylvania Credit Union Association (Life is a Highway Oct. 4). Here, Gerlach, center right, is shown with members of the host committee. The committee included: Jeff March, Kevin Quinn, Mike Schnably, Maria Steffy, Rosemary Helm and Tim Greim, all from Citadel; Rick Stipa, TruMark Financial CU; John Faust, Diamond CU; Rick Wargo, PCUA; John Rothwell, Rothwell Document Solutions; and Christopher Pippett, Fox Rothschild. Citadel is a $1.5 billion asset credit union located in Thorndale, Pa. (Photo provided by the Pennsylvania Credit Union Association) ...

CUNA OpSS Council names new exec committee

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MADISON, Wis. (10/5/10)--The new executive committee and officers for the CUNA Operations, Sales & Service (OpSS) Council were announced during the council’s 13th annual conference Thursday through Sunday in Las Vegas. Remaining as council chair is Jennifer Lehn, executive vice president, Numerica CU, Spokane Valley, Wash. Sue Douglas, senior vice president and chief operating officer, State Employees’ CU, Raleigh, N.C. will continue as vice chair. Two new members were elected for three-year terms: Patsy Gayda, director of branch operations, Spokane (Wash.) Teachers CU and Becky Davis, vice president, branch operations, Delta Community CU, Atlanta. Steve Langley, vice president of sales/service/training, Travis CU, Vacaville, Calif. was elected to the committee after being appointed earlier this year. Patti Dixon, vice president of service centers, Baxter CU, Vernon Hills, Ill. chose not to run for re-election. The CUNA OpSS Council executive committee also includes:
* Secretary/Treasurer Debbie Baumann, vice president operations/chief operating officer, Mazuma CU, Kansas City, Mo.; * Dave Tate, vice president branch operations, for Anheuser-Busch Employees’ CU, St. Louis.; * Tina McMinn, vice president, operations, Stanford FCU, Palo Alto, Calif.; * Robb Keith, senior vice president, retail services, Members 1st FCU, Mechanicsburg, Pa.; and * Lucy Ito, senior vice president, growth/development, The California and Nevada Credit Union Leagues, Ontario, Calif.

Ohio league Anti-bank sentiment boosts CUs growth

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CLEVELAND (10/5/10)--Ohio credit unions are experiencing record membership growth two years after the financial crisis broke out nationwide, reported the Cleveland Plain Dealer (Oct. 4). For the fifth consecutive quarter, the state’s 392 credit unions reported rising membership, according to the Ohio Credit Union League’s most recent report in July, the article said. Anti-banking sentiment and a “Move Your Money” national campaign initiated in December that encourages consumers to switch from large banks to local financial institutions, such as credit unions, account for the popularity of credit unions, the league told the newspaper. Credit union membership gains in 2006 and 2007 were due to people joining credit unions to obtain low-loan rates during the borrowing boom, Patrick Keefe, vice president of communications and media for the Credit Union National Association, told the paper. However, continuing credit union membership growth the past two years amid a recession reflects a shift in consumer sentiment, he said. “It’s really about dissatisfaction with banks,” Keefe added. Ohio Catholic FCU in Garfield Heights experienced 8% membership growth in the past year, Randy Trimm, the credit union’s CEO, told the paper. “People have grown frustrated with being underserved and overcharged by banks,” Trimm added. To read the article, use the link.

Beach to retire as CEO of CO-OP Shared Branching

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RANCHO CUCAMONGA, Calif. (10/5/10)--Carroll Beach, president/CEO of CO-OP Shared Branching (the former CUSC), a subsidiary of CO-OP Financial Services, has announced he will retire Jan. 31 to pursue other levels of personal and professional interests. Beach, a long-time executive in the credit union movement, was previously president/CEO of CUSC before assuming responsibilities with CO-OP. He began his career with credit unions as the president/CEO of the Colorado Credit Union System. During his 30-year tenure there, he was responsible for the leadership of the Colorado Credit Union League, its subsidiaries and related organizations. Beach also served on various boards, including that of the Credit Union National Association, Credit Union House LLC, U.S. Central FCU, Credit Union Service Corp. and the Association of American Credit Union Leagues (AACUL). He served on numerous committees and received AACUL's highest award, the Eagle Award. Beach also is a recipient of the Herb Wegner Lifetime Achievement Award, the most recognized award in the credit union industry. "He has played a pivotal role in leading the corporation to success with his steadfast devotion, progressive perspective and enthusiastic commitment to the betterment of the financial health of credit union members," said Bill Raker, board chairman of CO-OP Shared Branching. "Carroll was instrumental in the combination between CO-OP and CUSC in 2007, allowing credit unions to offer unprecedented access and convenience to their members," said Stan Hollen, CO-OP Financial Services president/CEO. "His vision has enabled credit unions to plug into one technologically advanced, streamlined hub, making a variety of payment channels easily available to members now and in the future."

Three regulators begin new term on NASCUS board

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SAN ANTONIO (10/5/10)--Three sitting board members of the National Association of State Credit Union Supervisors (NASCUS) began new three-year terms at the 2010 NASCUS Annual Meeting Friday. Tom Candon, Sue Cowan and Linda Jekel will serve three-year terms ending in September 2013. Kathy Stewart also was appointed to fill the at-large one-year director position. Candon is the deputy commissioner of Banking and Securities for the Vermont Department of Banking, Insurance, Securities and Health Care Administration. Cowan is the director of the Wisconsin Office of Credit Unions and Jekel, a past chairman, serves as the director of the Washington Division of Credit Unions. Stewart is the director of Financial Institutions for the Kentucky Department of Financial Institutions. Following the meeting, the board elected its officers. Orla Beth Peck will continue as the chairman-elect and Cowan remains NASCUS secretary/treasurer. Candon will serve as chairman until September 2011. Remaining board members include:
* James Forney; director, Iowa Department of Commerce; * Mary Hughes, Financial Institutions bureau chief, Idaho Department of Finance; * Jerrie Jay, administrator, North Carolina Commerce Department, Credit Union Division; * Roger Little; deputy commissioner, Michigan Office of Financial and Insurance Services; and * Peck, supervisor of Credit Unions, Utah Department of Financial Institutions.

Two Oregon CUs exploring merger

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EUGENE and BEND, Ore. (10/5/10)--Northwest Community CU, Eugene, Ore., and Mid Oregon FCU, Bend, Ore., have signed a letter of intent to explore a merger. Both boards of directors have approved the letter. The potential merger must undergo a due diligence review process, and be approved by regulators and by Mid Oregon FCU members, who will vote on joining the Northwest Community charter. “The goal of both organizations is to offer a combined credit union that is capable of offering more convenience, more locations and more technology services for banking throughout Oregon,” said Barb Blackmore, chair, Northwest Community CU. Northwest Community CU has $650 million in assets. Mid Oregon FCU has $138 million in assets. Both credit unions emphasized they are financially sound.

USAID awards WOCCU 4M for agrural finance outreach

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MADISON, Wis. (10/5/10)--The U.S. Agency for International Development (USAID) awarded World Council of Credit Unions (WOCCU) $4 million to implement a five-year Cooperative Development Program (CDP) with credit unions in Guatemala, Mexico and Kenya.
Click to view larger image The Cooperative Development Program will expand upon the World Council of Credit Unions’ (WOCCU) credit union outreach methodologies, including Semilla Cooperativa, developed by WOCCU’s rural finance program in Mexico. Credit union field officers there use personal digital assistants to provide financial services in members’ communities. (Photo provided by the World Council of Credit Unions)
The program will focus on creating and testing agricultural and financial tools to improve rural economic and financial sector development, livelihoods and food security. The resulting “toolbox” for credit unions will include a replicable and scalable methodology to meet the financial service needs of small farmers and agribusinesses, and increase their access to markets, inputs and technical assistance for production. Credit unions face challenges serving rural areas, where dispersed populations rely on extremely variable income, limited or no financial services and inadequate market information, WOCCU said. Credit unions often struggle to develop and deliver appropriate, high-quality products and services for farmers and rural entrepreneurs while keeping transaction costs low and maintaining an economic margin. At the same time, legal, regulatory and policy frameworks can prohibit product development and certain forms of outreach. Without the proper tools to grow, agricultural and agribusiness development has remained stagnant in many rural farming communities, WOCCU added. “Credit is a crucial component to increasing the income of rural producers, but credit alone does not always solve economic problems,” said Brian Branch, WOCCU executive vice president and chief operating officer. “With the CDP program, we apply an innovative approach that addresses both the financial needs and market barriers for rural producers in a more integrated way than we and other development organizations have previously tried.” WOCCU’s program will join financial and agricultural technical services and employ information technology (IT) outreach solutions to stimulate rural economic growth. The technology-based delivery systems and new agricultural products developed through CDP will enable small producers to smooth their incomes and increase production. WOCCU will draw on its value-chain finance experience in Peru, rural finance approach in Mexico and IT-based delivery systems in Colombia, Guatemala, Kenya, Mexico and Rwanda to develop the toolbox. During the first two years of the program, WOCCU will work with credit unions in Guatemala and Mexico to create and document the use of new financial products, services and delivery mechanisms for value chains and rural producers. Credit unions in Kenya will implement the methodology in the final three years of the program to test its replicability. WOCCU has participated in USAID’s CDP for 30 years. In recent years, WOCCU’s CDP developed the first Model Regulations for Credit Unions, supported the launch of a U.S.-Ecuador international shared branching network in collaboration with WOCCU’s USAID-funded development program in Ecuador, piloted a credit union remittance outreach program in the U.S. and implemented an HIV/AIDS peer training program through a teachers’ credit union in Kenya. Throughout the current five-year program, WOCCU will collaborate with partner cooperative development organizations and share lessons learned and achievements with the broader development finance community.

Coopera discusses Latino-owned biz with lawmakers

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DES MOINES, Iowa (10/5/10)--Coopera Consulting met with U.S. Rep. Nydia M. Velazquez (D-N.Y.), chairwoman of the Congressional Hispanic Caucus, and U.S. Rep. Leonard Boswell (D-Iowa) to discuss Latino-owned small businesses and how credit unions are working to serve the youngest, fastest growing and most underserved U.S. population--Hispanics.
Click to view larger image Coopera Consulting met in with U.S. Rep. Nydia M. Velazquez (D-N.Y.), chairwoman of the Congressional Hispanic Caucus, and U.S. Rep. Leonard Boswell (D-Iowa) to discuss Latino-owned small businesses and how credit unions are working to serve Hispanics. Pictured are, from left, first row: Velazquez and Boswell; Warren Morrow, CEO, Coopera Consulting; Felix Gallagher, CEO PharmServ Solutions. Second row: Francis Musignac, Alianza Ad Hoc; Anna Haug, client service coordinator, Coopera; Christina Fernandez-Morrow, board member, Iowa Credit Union Foundation; Melvin Rosario, Alianza vice president; Andrew Herrera, Alianza membership chair; Miriam De Dios, vice president, Coopera; Brent Helin, CEO, Des Moines (Iowa) Metro CU; Micah Kiel, Alianza president; Julie Vande Hoef, director of government affairs, PolicyWorks; Mark Killian, CEO of Community Business Lenders; and Michael Adams, vice president of marketing and public relations, Greater Iowa CU, Ames. (Photo provided by the Iowa Credit Union league)
Coopera Consulting works to educate credit unions on how to reach and serve Hispanics and how to implement solutions to meet the needs of the Hispanic community. The needs include personal, mortgage and commercial loans, remittances, prepaid reloadable cards and financial education. “Credit unions are helping economically empower the largely underserved Hispanic community,” said Warren Morrow, Coopera CEO. “Credit unions could do even more if legislation would permit it.” Credit unions offer member business loans (MBL) to Iowa businesses, but there is a statutory limit that restricts credit unions from lending beyond 12.25% of their total assets. As credit unions reach this lending cap, they are forced to turn away business owners in need of access to capital, said the Iowa Credit Union League. Increasing the MBL cap to 27.5% from 12.25% of assets would extend more than $10 billion in new capital and create 120,000 new jobs nationwide without any cost to the federal government or tax payers, the league added. During the meeting, Boswell and Velazquez agreed to contact the House Financial Services Committee Chair Barney Frank (D-Mass.) to encourage him to host a congressional hearing on increasing the cap. The congressional visit was made possible by Alianza Latino Business Association. Members of Alianza also attended the meeting and shared how the organization assists Iowa Latino businesses and their plans for the future.