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CU System briefs (11/01/2011)

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CU System briefs

  • RICHMOND, Va. (11/2/11)--Joseph Haddon Jr., 49, former CEO of  Richmond (Va.) Postal CU, was sentenced Wednesday to one year in jail and ordered to pay $20,271 in restitution in the embezzlement of more than $50,000 from the $84 million asset credit union. Haddon pleaded guilty to two felony counts of embezzlement (The Richmond Times-Dispatch Oct. 27).  He was accused of stealing $52,233 from the credit union between July 14, 2009 and Oct. 4, 2010, and spending the money on items such as Washington Redskins tickets that cost nearly $2,000. He also allegedly billed the credit union to pay a lawyer in a divorce and pay for health insurance for a girlfriend. Richmond Circuit Court Judge Bradley B. Cavedo sentenced Haddon to 10 years, all suspended, on one of the counts, and 10 years with nine suspected on the other. He ordered Haddon to participate in a work-release program while serving the sentence …
  • MIDVALE, Utah (11/2/11)--Police say they found pipe bombs in the home of a man suspected in several credit union and bank robberies. The man, James Brent Milligan, 52, was booked Oct. 23 on suspicion of aggravated robbery in the Oct. 22 heist of Cyprus FCU, Midvale, Utah. Police said the robber left personal items in the parking lot that helped track down the suspect. Milligan is also a suspect in an Oct. 1 robbery of Wells Fargo Bank and a Sept. 7 robbery at another credit union (Associated Press Newswires Oct. 21) …
  • GRAND RAPIDS, Mich. (11/2/11)--The new Chippewa Eagle FCU (CEFCU) located in Mt. Pleasant, Mich., announced that it has reached the $2 million asset milestone after seven months in business. Its membership is expected to exceed 1,000 members by the end of December.  The performance exceeded the National Credit Union Administration's growth expectations, said its data processor, CU*Answers.  Greg Carroll, CEFCU president/CEO, attributed the growth to its broad product suite. It participates in CU*Answers'  Starting a Credit Union program. The program provides any start-up credit union with nearly all core processing services free for an initial two-year period …

New report CUbanking second largest co-op sector

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NEW YORK (11/2/11)--The International Cooperative Alliance (ICA) marked the kickoff Monday of the 2012 International Year of Cooperatives (IYC) at the United Nations by launching  its latest Global300 Report announcing the largest 300 cooperative enterprises in the world.

The top 300 reported collective revenues of $1.6 trillion in the seven sectors of cooperatives. That is comparable to the gross domestic product of the world's ninth largest economy.

Credit unions and banking institutions account for 26.27% of the cooperative base--the second largest sector behind agriculture/forestry (28.85%) and in front of consumer/retail (21.66%), and insurance (17.23%).  Workers/industrial, health, utilities and other make up the rest. Credit unions/banking account for $430 billion in revenue.

France has the most cooperatives --28%; followed by the U.S., with 16%; Germany, 14%; Japan, 8%, Netherlands 7%; and United Kingdom 4%; Switzerland, 3.5%; Italy and Finland, 2.5% each; Korea, 2%; and Canada, 1.75%.

Although cooperatives were impacted by the global financial crisis in 2008, they provided stability and security because of their measured risk model and emphasis on service to members, not profits, the report said.

More than one billion people are involved in some way with cooperatives, including credit unions.

For the full report, use the link.

Paper Use caution in wooing angry bank customers

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DES MOINES, Iowa (11/2/11)--A new white paper encourages credit unions and community banks to woo bank customers frustrated by fees but also warns them to heed certain cautions when doing so.

The paper, "Use Caution When Wooing Angry Bank Customers," was co-authored by TJ Riha, CEO of debit consulting firm PayFusion, and Andrea Stritzke, vice president of regulatory compliance at PolicyWorks.

The report's release comes as credit unions and small community banks are gearing up for Bank Transfer Day Saturday, a day designated for switching accounts from big banks to the smaller institutions. The Credit Union National Association (CUNA), state leagues, and credit unions nationwide have been urging consumers fed up with big bank fees to switch their accounts any time. CUNA and the leagues have worked extensively the past month with media throughout the nation to drive home the benefits that credit unions offer.

Consumer opposition to the big banks' debit card fees has been so strong--with many consumers announcing they would switch accounts because of the fees--that last week several big banks began  "rethinking" their plans to charge or test debit card fees. The latest to cave in: Bank of America, which announced Tuesday it will not charge its much-denigrated $5 monthly debit card fee. That fee, announced Sept. 28, stirred a month-long barrage of opposition from consumers and unprecedented media coverage of credit unions as an alternative.

Although the banks are reconsidering the debit fees, they have not indicated what they will do to make up for revenue losses in interchange fees.

"To be sure, this extraordinary chance at growth can not be squandered," Riha and Stritzke write in the report, referring to the opportunity spurred by consumer movements like Occupy Wall Street and Bank Transfer Day. "That said, leadership at the nation's credit unions and community banks must proceed with caution when courting these angry bank customers."

They outline several warnings for community financial institutions (FIs), including:

  • Regulatory concerns with use of the word "free" in advertising. Truth in Savings regulations state that advertisements cannot refer to or describe an account as "free" or "no cost" if any maintenance or activity fee is imposed on the account.
  • The need for FIs to perform a thorough competitive analysis of their financial products and services so staff will be better equipped to answer questions they may encounter from prospective member/customers.
  • Marketing advice to help FIs provide the extra push to switch accounts, including the use of incentives to court new business; and
  • Possible repercussions of courting risky customers, who might jump ship if an FI hints of a new direction in services in the future.
 

The paper concludes with a best-practices strategy, including four tactics credit unions and community banks should put into place before marketing to frustrated bank customers.

NFCC Only 3 of consumers would use debit card with fees

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WASHINGTON (11/2/11)--Just 3% of consumers surveyed say they would continue using their debit card as usual if a fee were imposed. Instead, the overwhelming majority of more than 2,400 people in an online poll conducted by the National Foundation for Credit Counseling (NFCC) would change financial institutions to avoid paying a debit card fee.

"People have become very aware of how they spend their money, even small amounts, and that's a good thing," said Gail Cunningham, NFCC spokesperson. "The poll results send a strong message, but at this point the message remains a sentiment. Only time will tell if people will follow through and actually change long-ingrained habits."

NFCC cautioned consumers, like financial institutions, to evaluate their options and prepare for any changes that might affect their accounts. It listed pros and cons of each option for consumers.

The poll found that:

  • Sixty-two percent of those surveyed say they would find a financial institution that doesn't charge debit card fees.  That keeps the availability of a debit card while avoiding fees. However, NFCC cautioned that changing financial institutions can be difficult.  It advised consumers to keep their old account open for three months while establishing the new account so transfers can be made and to check the convenience of ATMs, the fees, and costs of a new checking account at the new financial institution.
  • Twenty-two percent would begin paying with cash.  That controls spending because a consumer can't spend more than he has. However, carrying large amounts of cash can be dangerous and inconvenient, said NFCC.
  • Eight percent would pay by check, which maximizes the use of the existing checking account that may already have a fee with it. Using checks can be inconvenient--some places don't accept them as payment. Also, consumers using checks have a chance of bouncing one and incurring overdrafts.
  • Five percent say they would begin charging purchases. While charging creates a credit history and a credit score, and, if handled responsibly, can work for the future financial needs, it's easy to charge too much and overspend. If not handled properly, charging goods and services can result in financial disaster, said NFCC.
  • Three percent said they'd keep the debit card and avoid the potential hassle of changing financial institutions. But this would add yet another fee to the terms from the bank.
NFCC advises consumers to do their homework and evaluate all options. "The bottom line is that banks have the right to assess fees, and consumers have the right to choose whom they do business with," said Cunningham.  Before leaving, the consumer should ask the bank to waive the fee.

The Credit Union National Association, state leagues, and credit unions nationwide suggest that consumers can switch to a credit union to avoid high debit card fees. They are working with media nationwide the past month to encourage consumers to consider turning to a credit union to avoid high fees charged by big banks. Saturday is Bank Transfer Day, a day set aside for people to switch institutions. However, CUNA points out that any time is a good time to switch, and that credit union membership has benefits worth a switch.

NCUF Wegner Awards Dinner tickets available

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MADISON, Wis. (11/2/11)--Credit union leaders and supporters can purchase their tickets for the National Credit Union Foundation (NCUF) Dinner Presenting the Herb Wegner Memorial Awards (formerly the "Herb Wegner Memorial Awards Dinner").

The event will be held March 19 at the Grand Hyatt in Washington, D.C., during the Credit Union National Association's 2012 Governmental Affairs Conference (GAC).

Tickets can be obtained online at ncuf.coop, or registrants can choose to download a form, complete it offline and fax or mail it to NCUF. The deadline to purchase tickets is March 2.

Individual tickets for the three-course dinner are $275 each. Tables of 10 are $2,750. The estimated value of the tax-deductible portion of each ticket purchase price is $125.

"The name has been updated but that is all that has changed about this special gala event," said Bucky Sebastian, NCUF executive director. "Attendees will again leave inspired and impressed after hearing the stories of this year's exceptional Wegner Award winners."

The awards ceremony will celebrate the highest national honors in the credit union movement, specifically:

  • Lifetime Achievement: Bill Eckhardt, president/CEO, Alaska USA FCU, Anchorage;
  • Lifetime Achievement: Tom Dorety, president/CEO, Suncoast Schools FCU, Tampa, Fla.; and
  • Outstanding Organization: Invest in America.
 To learn more about the winners, use the link.

Indiana league awards presented

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INDIANAPOLIS (11/2/11)--The Indiana Credit Union League recently presented several awards for achievement, leadership and induction into its Hall of Fame, as well as state-level awards for social responsibility, philosophy and financial responsibility.

These credit unions received first-place awards at the league's statewide convention Oct. 7.

Dora Maxwell Award for Social Responsibility:

  • General CU, Fort Wayne, $50 million to $100 million in assets;
  • Finance Center FCU, Indianapolis, $200 million to $500 million;
  • Evansville (Ind.) Teachers FCU, $$500 million to $1 billion; and
  • Indiana Members CU, Indianapolis, $1 billion or more.
Louise Herring Award for Credit Union Philosophy in Action:

  • AAA FCU, South Bend, $50 million to $250 million in assets;
  • FORUM CU, Fishers, $250 million to $1 billion; and
  • Indiana Members CU.
Desjardins Award for Excellence in Adult Financial Literacy:

  • Finance Center FCU; and
  • Centra CU, Columbus,  $500 million or more assets.
Desjardins Award for Excellence in Youth Financial Literacy:

  • Finance Center FCU.
Loren Roth (right), president/CEO of CommunityWide FCU, South Bend,  receives the Indiana Credit Union League's 2011 Professional Achievement Award from league Chairman Ron Mazur.
Those credit union entries receiving first-place honors in their asset-size category at the state level were forwarded on to the Credit Union National Association's national competition.

Loren Roth, president/CEO of CommunityWide FCU, South Bend, received the league's 2011 Professional Achievement Award.

He has been in the credit union business for 41 years. During his tenure at CommunityWide FCU, the credit union has grown to $268 million in assets with 11 branches, serving more than 37,000 members.

Jerry Walters (right), chairman of the board of Harvester Financial CU, Indianapolis,  is congratulated by Indiana Credit Union League Chairman Ron Mazur as he receives the  Leadership Achievement Award. (Photos provided by the Indiana Credit Union League)
Jerry Walters, chairman of the board of Harvester Financial CU, Indianapolis, was presented with the Leadership Achievement Award.

He has been a board member since 1977 and chairman since 1979.

William C. Hord, vice president of enterprise risk management, Finance Center FCU, Indianapolis, and Brett Rinker, chief operating officer at Centre FCU, Muncie, are 2011 recipients of the league's Emerging Leadership Awards.

Three leaders were inducted into the Indiana Credit Union Hall of Fame: Norman R. Blum, retired president and member of the board of directors of Fortress FCU, Marion; Ron Collier, CEO of Indiana Members CU, Indianapolis; and Sandy Heller, president of Northern Indiana FCU, Merrillville.

Suncoast Schools reports surge in new members

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TAMPA, Fla. (11/2/11)--To meet the increased demand of unhappy bank customers seeking to switch their accounts, Suncoast Schools FCU has created a specially designated Switch Team in its contact center.

The credit union opened 5535 checking accounts in October, compared with 2876 checking accounts opened in October 2010, an increase of 92%, according to Patti Barrow, Suncoast Schools FCU vice president of marketing.

Depending on call volume, the Switch Team comprises between eight and 13 member service representatives ready to help prospective members through the process of opening new accounts, she told News Now.

Although all of the call center's representatives are trained to open accounts, Switch Team members are in place to assist members with more detailed information.

"We find that when it comes to switching from one financial institution to another, there really is no one size fits all," Barrow said. "Every situation is unique, and everybody has different questions. Our switch team is there to help people through the process based on their individual needs."

Callers don't expect the switching process to take place overnight, Barrow said.

Most callers don't want to open an account online, or even through the contact center," she added. "That might be where they start the process, but most people want to sit down face to face with someone."

That is among the reasons that Suncoast Schools FCU is not approaching Saturday's Bank Transfer Day as a one-day event, Barrow said. The credit union is working to attract new business, though. It is offering members who open a new account through a Saturday chance to win one of 15 iPads.

Barrow also said the credit union will bulk up staffing on Saturday to prepare for the expected surge.

"We are gearing up to make sure we're ready to do whatever it takes to serve all of our members that day," Barrow said. "But for us, this is about creating growth over the long term."

CUNA, the leagues, and credit unions have worked extensively with national media to point out the benefits of credit unions as an alternative to high bank fees.

MDDCCUA ad campaign highlights better banking at CUs

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COLUMBIA, Md. (11/2/11)--Credit unions saved Maryland and District of Columbia (DC) families more than $200 million last year. Beginning this week, that's the message consumers will hear about the benefits of credit unions in a five-week cooperative ad campaign produced by the Maryland & DC Credit Union Association (MDDCCUA).

The ads are featured on radio, digital outdoor banners and online spots.

MDDCCUA said it wants to help consumers who are fed up with high fees to take action and find a credit union to join through a "What's In It For Me" website. Use the link.

"Credit unions offer a better banking option," said MDDCCUA President/CEO John Bratsakis. "We want consumers to know that they can rely on credit unions to offer higher returns on savings and lower rates and fees than other financial institutions because credit unions put peoples' needs before profits."

Credit union membership saves consumers money is the campaign theme. Some radio spots have the tag line: "Get all of the financial services like the big banks, but without all of the fees. Go to "What's in it For Me dot.org" to find a Maryland or DC Credit Union that's right for you and see how much better banking can be."

Another ad says: "Frustrated with big bank fees?  Credit unions saved Maryland and DC families over $200 million last year. Find a Maryland or DC credit union that's right for you at "What's In It For Me dot.org" today and see how you can get more for your money."

"Recent events in the banking industry have highlighted the value of credit unions, and we hope this ad campaign will elevate consumer awareness of that value," Bratsakis said.

Bratsakis was referring to the consumer outcry over debit fees announced by banks. The Credit Union National Association, leagues and credit unions have worked the past month with nationwide media to make the public aware of credit unions as an alternative to big banks' high fees.

83 Minnesota CUs pledge fair pricing for services

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ST. PAUL, Minn. (11/2/11)--In response to highly publicized consumer dissatisfaction over bank fees, 83 Minnesota credit unions have signed a pledge to offer free debit cards.

The pledge states: "I pledge to uphold the credit union philosophy of 'people helping people' by continuing to offer fairly-priced banking services to our members. In addition, I pledge that my credit union will abstain from charging a fee for members to use our debit cards for as long as market conditions allow us to do so."

"Our cooperative structure is unique among financial institutions," said Mark D. Cummins, Minnesota Credit Union Network (MnCUN) president/CEO. "While other financial institutions exist to maximize profits for their shareholders, credit unions exist to maximize their service to members. This unique business model is causing many consumers to consider joining their local credit union."

The desire for a better financial service alternative prompted California art dealer Kristen Christian to organize the "Bank Transfer Day" social media campaign, which encourages consumers to move their money from big banks to local credit unions on or by Saturday. So far more than 70,000 consumers around the country have pledged to participate in "Bank Transfer Day," and the number continues to grow, said MnCUN. Minnesota's credit unions have committed resources to help consumers move their money in conjunction with the campaign.

The Credit Union National Association (CUNA) estimates that, over the past year, the average Minnesota credit union member saved $76 ($144 per household) by doing business with a credit union.

CUNA, the leagues, and credit unions have worked extensively with national media to point out the benefits of credit unions as an alternative to high bank fees.

For a list of the credit unions that signed the pledge, use the link.

Cheney addresses N.Y. cooperative gathering

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NEW YORK CITY (11/2/11)--In an effort coordinated with the UN General Assembly's declaration of 2012 as International Year of Cooperatives (IYC), the National Federation of Community Development Credit Unions Tuesday launched a year-long campaign to highlight the long history of cooperatives in New York City, the myriad contributions of cooperatives to the local economy, and to promote cooperatives to consumers across the five boroughs.

Addressing the event billed as "New York: Building a Cooperative City," Credit Union National Association (CUNA) President/CEO Bill Cheney said, "It is an uplifting experience to celebrate the International Year of Cooperatives at the United National and here at this event in New York City."

Cheney, who thanked the Ford Foundation for its support of the federation's event celebrating cooperatives—support which included hosting the event at its headquarters--underscored that the year of cooperatives was just beginning, and added, "We have much work to do."

"It was great to hear all the support for cooperatives from around the world," Cheney said, referring to the Monday UN General Assembly session at which representatives of 19 countries--including the U.S.--rose to voice support for cooperatives.

CUNA, he noted, has been closely involved with the National Cooperative Business Association and the International Cooperative Alliance as plans moved forward to celebrate IYC.  He added that CUNA looks forward to cooperatives working together throughout the year, and remarked that cooperation among cooperatives is a key principle of the cooperative movement.

What better time to showcase the cooperative spirit, he asked, than "during this special year."

Cheney noted that the current consumer emphasis that those tired of big banks' high fees should move their accounts to a credit union for a fairer deal has highlighted the fact that credit unions, as cooperatives, have their members' best interests at heart.

"We are on the cusp of Bank Transfer Day," he said.  Cheney noted that tens of thousands of consumers have opened new accounts with credit unions in recent weeks and that more are planning to do so on Saturday, designated Bank Transfer Day by its consumer organizer.

The federation noted that its meeting was the first-ever such convening of New York City cooperatives across sectors: credit unions; food, housing, and worker co-ops; and others. Federation CEO Cliff Rosenthal said, "The interest we've seen from credit unions and other cooperatives here in New York has been very encouraging." He added,"What better way to promote our vibrant movement than by linking cooperatives of all types with their financial counterparts. In doing so we strengthen or common bond, spread our message of cooperation and build avenues for long-term credit union growth."

New York City Council Speaker Christine Quinn used her address to attendees to unveil a proclamation declaring Tuesday as Cooperative Day in all five boroughs of New York City.

In addition to remarks by  Rosenthal, others addressing "New York: Building a Cooperative City" included:
  • Steve Ryerson, vice president with United Nations FCU;
  • Charles Gould, director general of the International Cooperative Alliance;
  • International Co-operative Alliance President Dame Pauline Green;
  • National Consumer Cooperative Bank President/CEO Charles E. Snyder; and
  • National Association of State Credit Union Supervisors CEO Mary Martha Fortney.

Bank fees dominate Top 10 INews NowI stories for October

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MADISON, Wis. (11/2/11)--Media reports on credit unions as alternatives to banks that charge debit-card fees dominated the Top 10 list of most-read News Now articles for October.

Here is a list of the top 10 most-visited stories for the month:

10. ABC News: Bank Transfer Day gains momentum

MADISON, Wis. (10/20/11)--ABC News and other media outlets nationwide are reporting on Bank Transfer Day momentum, in which people are signing up to leave large banks in favor of credit unions on or before Saturday, Nov. 5.

9. Facebook: Bank Transfer Day generates pro-CU comments

MADISON, Wis. (10/11/11)--The Facebook page for Bank Transfer Day, Nov. 5, is garnering many comments that are favorable to credit unions.

8. Cheney says fees highlight CU difference, on Fox Biz Network

WASHINGTON (10/3/11)--As Fox Business Network's Gerri Willis interviewed Credit Union National Association (CUNA) President/CEO Bill Cheney and a banking consultant about debit card fees that large banks are starting to charge, Cheney explained how the credit union difference makes the financial cooperatives a better deal for consumers than profit-driven banks.

7. Durbin letter calls CUs, small banks 'superior'

WASHINGTON (10/5/11)--With the public backlash against the debit account actions of Bank of America and other large institutions continuing to grow, interchange rule author U.S. Sen. Richard Durbin (D-Ill.) said "now is the moment" for credit unions and other small institutions to make the superior benefits and customer service offered by their institutions "crystal clear" to these consumers.

6. Small CUs may be regulated out of business, CEO warns

WASHINGTON (10/5/11)--Wright-Patt FCU President/CEO Doug Fecher on Tuesday said burdensome regulations are a central challenge to his credit union's pro-consumer work, adding that it is "not an exaggeration to say our nation's small, community-based financial institutions are exposed to a situation where they ultimately may be regulated out of business."

5. CUs reach out with no-debit-fee promos

MADISON, Wis. (10/7/11)--Banks' new debit card fees have become the last straw for many outraged consumers. Credit unions are jumping at the opportunity to let consumers know they can get a better deal at credit unions through a variety of no-fee promotions and anti-fee advertisements.

4. N.Y. Times, 117 media outlets spotlight CUs, no fees

MADISON, Wis. (10/11/11)--The groundswell of attention to credit unions as the no-fee choice for debit cards continues, with Associated Press spotlighting their efforts. As of Friday afternoon, the AP item had been repeated in 117 publications and websites--including The New York Times and the Los Angeles Times (Oct. 7).

3. Nat'l media intensify reports on CUs' debit-fee relief

MADISON, Wis. (10/4/11)--Credit unions made an impact last weekend and yesterday among national media reporting on consumer backlash from debit card-fee hikes by large banks seeking revenue after limits were imposed on debit interchange by the Dodd-Frank Act . The media--including ABC's "Good Morning America," The New York Times, National Public Radio and Yahoo! Finance--told consumers to consider switching to a credit union.

2. Matz: NCUA will review TDR standards

WASHINGTON (10/7/11)--The Credit Union National Association (CUNA) strongly supports a plan announced by the National Credit Union Administration to review its Troubled Debt Restructuring (TDR) policy, and has been raising TDR-related issues in meetings with agency staff, CUNA Deputy General Counsel Mary Dunn noted Thursday.

1.Cheney on CNBC: Bank backlash leads to growing CU membership

WASHINGTON (10/18/11)--Credit unions, and their new members, are poised to benefit as more and more Americans become fed up with their banks, Credit Union National Association President/CEO Bill Cheney said during a Monday interview on CNBC's Squawk Box.