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CU System Briefs (11/11/2010)

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* TALLAHASSEE, Fla. (11/12/10)--The trial of Eugene Telfair and Robert Nixon began Monday morning in U.S. District Court in Tallahassee, Fla. (Tallahassee Democrat Nov. 8). Telfair, a former credit union president at FAMU FCU, Tallahassee, and Nixon, the former director of Florida A&M University Institute on Urban Policy and Commerce--pleaded not guilty July 8 to stealing federal grant funds from the university (Tallahassee Democrat July 8). Nixon and Telfair were indicted July 7 on charges of conspiracy, theft from an organization receiving federal funds and embezzlement of funds instructed to a federally insured credit union. About $134,253 was stolen, said the U.S. Attorney’s Office (News Now July 9). In the opening day of testimony Monday, the credit union’s outside auditor said she found discrepancies in a grant account administered by the men, said the newspaper. Auditor Holly Hursey also testified that she found inconsistencies in financial documents, some of which were approved by Patricia Walker McGill, the former director of FAMU’s Institute on Urban Policy and Commerce, who in 2008 pleaded guilty to embezzling funds from federal grant programs …

Corporate One reaches milestone in Sallie Mae student loan program

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COLUMBUS, Ohio (11/12/10)--Corporate One FCU has received its 100th contract for Sallie Mae’s Smart Option Student Loan program from Jeep County FCU, Holland, Ohio. Corporate One FCU began offering the referral-based Smart Option Student Loan program in June 2010. A Corporate One release said credit unions’ “positive and overwhelming response” to the program reflects recent changes to the student loan system as well as the need for student loan solutions to offer to members paying for higher education. Smart Option loans are underwritten, funded and serviced by Sallie Mae, which also offers support and marketing materials. Participating credit unions provide referrals primarily through a website link. The Smart Option Student Loan allows students to make payments while in school so they can graduate with less debt and pay off loans earlier when compared to other private loan alternatives that delay payments until after graduation. The program is targeted at students and families seeking private student loans to help cover college costs after they have maximized scholarships, grants and federal assistance.

Pennsylvania CU MBL growing at brisk pace

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HARRISBURG, Pa. (11/12/10)--Credit union member business loans (MBLs) are growing at a brisk pace in Pennsylvania to help small businesses gain access to credit despite a tight economy. The Pennsylvania Credit Union Association (PCUA) recently told a local business journal that MBLs grew between 5.2 % and 6.7% each quarter during the past five quarters (Central Penn Business Journal Oct. 15). That compares to a national annual rate of 18% in 2008, 10% in 2009, and 7.7% through June of this year, according to Credit Union National Association figures quoted in the article. MBLs are defined as loans of more than $50,000 used for business or agriculture made without the backing of the U.S. government. Nationwide, CUNA figures show MBLs grew 7.7% in the first six months of 2010; 10% in 2009; and 18% in 2008. MBLs at Pennsylvania credit unions made up 3.1% of all loans in June, compared with 6.5% nationwide. The PCUA said Pennsylvania credit union MBL programs developed more slowly than in other states because Pennsylvania has a higher share of small credit unions. Fewer than 10% of the state’s small credit unions offer MBLs, compared with more than 60% of those with assets over $100 million. Members 1st FCU, Mechanicsburg, which has $1.8 billion in assets, is among the leaders in offering MBLs and ranks 10th in the nation in loan volume with more than 2,000 loans valued at $263 million. In comparison, $175 million asset AmeriChoice FCU, Mechanicsburg, makes about 100 MBLs annually with an average loan size of roughly $100,000. Everence FCU, Lancaster, formerly Mennonite Financial FCU, has assets of $110 million and a loan portfolio that typically ranges from $15 million to $17 million. The article highlighted a small businessman who owned a Hanover-area RV dealership and lost his bank financing--a victim of the current credit crunch that began in earnest in 2008. After having a dozen banks turn down his request for credit for inventory, the business owner saw a Members 1st sign advertising business lending. He soon got an appointment with the credit union and a line of credit, which since has been expanded and extended.

Public Service CU launches wide-ranging branding campaign

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DENVER (11/12/10)--Public Service CU asked members and employees to share their stories to create the “Together We’re Better” branding campaign launched recently with television, radio and print advertising. A Public Service CU release said the ads are designed to reach Colorado residents looking for a fair, local financial partner. The advertisements highlight members who relate how the $1 billion-plus asset credit union helped them as they bought their first house, sent a child to college or tackled financial challenges such as paying medical costs. Credit union employees are also featured as they share the tale of people who pooled financial resources during the Great Recession to help found credit unions and provide a way to help one another. Sonny Lubick, a three-year credit union employee and former football coach at Colorado State University, provides a familiar face for Colorado residents as he talks about his pride in working for an organization that cares about members, employees and the community.

Corporate Realignment Task Force meets with Corporate CUs

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ONTARIO, Calif. (11/12/10)--The Corporate Realignment Task Force (CRTF), which consists of 12 credit union leaders from eight western states, recently met with leaders of bridge (conserved) and non-conserved corporate credit unions. CRTF is actively engaged in identifying options that meet the tests of CRTF's Guiding Principles in continuing those services credit unions have been accustomed to receiving from corporate credit unions. CRFT’s guiding principles are: the need for an enduring system solution; the need for aggregation to achieve sufficient transaction volumes; and the need for a universal solution that will accommodate the needs of all types and sizes of credit unions, said the California and Nevada Credit Union Leagues. States represented in the task force are California, Nevada, Hawaii, Idaho, Oregon, Washington, Arizona and Utah. The CRTF has recently met with leaders of large and complex corporates, mid-size and full-service corporates, and smaller, less-complex corporate credit unions. All have described their challenges in addressing changing requirements for corporate credit unions, and all have confirmed their willingness to participate in a consolidated system solution. “We appreciate the candid discussions the task force has had with key leaders in the corporate credit union system and are confident that solutions are emerging that will meet the task force's objectives of system solution, aggregation, and universal solution,” CRTF Chairman Jeff York said. “We believe the interests of credit unions will be well-served and that these solutions will be widely supported.” The task force has nearly concluded its “information-gathering” phase regarding options for structure and service, and will meet soon to agree on recommendations and an action plan to achieve the objectives. “There is adequate time to create and assemble the appropriate solutions, and to provide for an orderly transition, and credit unions will have the necessary time to review and understand these solutions,” York said. The Credit Union National Association (CUNA) Saturday will bring together several credit union stakeholders in an attempt to develop a system-wide plan for the future of corporate credit unions (News Now Nov. 8). The summit, which will take place in Chicago, will be strictly about dialogue, and will not attempt to “force outcomes,” CUNA Vice President of Communications Pat Keefe said. The summit will attempt to address the future role of corporate credit unions in providing key payments, settlement, liquidity, and investment advisory services to natural person credit unions. For more information, use the links.

Northwest CU Association is formed

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FEDERAL WAY, Wash. and BEAVERTON, Ore. (11/12/10)—The memberships of the Credit Union Association of Oregon and the Washington Credit Union League voted “overwhelmingly” to affirm the creation of the combined Northwest Credit Union Association (NWCUA). The new association will begin operations on Jan. 1, 2011. “It’s been a very exciting, very busy few months preparing for the vote, and for moving forward as a regional organization,” said Washington Credit Union League Chairman Debie Keesee, president/CEO of Spokane Media FCU, when she announced the merger affirmation. “It’s gratifying to know that our efforts will benefit credit unions for decades to come.” “Both boards acknowledged that our memberships would be listening very carefully,” says Oregon Credit Union Association Chairman Gene Pelham, president/CEO of Rogue FCU. “We made the case to our credit unions and they responded. Now it is time to move forward into our next chapter.” As its first step, the Northwest Credit Union Association is introducing its new brand identity to the credit union community. Its three-color logo is "credit union centric" and "pays homage to the association’s northwest roots", according to the new association. “As we embrace the new organization, it is also our responsibility to reflect on what the last 75 or so years have meant to our region’s credit unions,” says Washington Credit Union League President/CEO John Annaloro. “Care and tradition went into building both organizations. We would be remiss to not honor that.” The Washington Credit Union League incorporated on Nov. 3, 1934, with a mandate to increase the number of credit unions in the state, improve credit union operating methods, and to help provide adequate credit union legislation. It currently serves 118 credit unions with 2.7 million members. The Credit Union Association of Oregon was incorporated in 1936 as
The Washington Credit Union League and the Credit Union Association of Oregon have merged. Credit Union Association of Oregon Board Chairman Gene Pelham (center left) and Washington Credit Union League Board Chairman Debie Keesee (center right), cut a ceremonial wedding cake representing the uniting of the trade associations. Washington Credit Union League President/CEO John Annaloro is on the far left, and Credit Union Association of Oregon President/CEO Troy Stang is on the far right.(NWCUL photo)
the Oregon Mutual Credit League representing the legislative, educational, and service needs of Oregon’s credit unions. Serving a peak of 265 credit unions in 1970, the association currently serves 85 credit unions with 1.5 million members. Operational priorities for the new Northwest Credit Union Association will focus on government affairs, regulatory relief, compliance services and putting the final touches on a joint educational calendar. During months of merger discussions, which included the formation of committees and conversations with the membership, both trade associations united in identifying objectives and strategies for the NWCUA. “I can say unequivocally that the Northwest Credit Union Association is future focused and is prepared to usher in a new era for our region’s credit unions,” says Credit Union Association of Oregon President/ CEO Troy Stang. “It’s an exciting time to build on the strengths for which our organizations have long been recognized.”

CU lending down slightly says Fed report

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MADISON, Wis. (11/12/10)--Credit unions held $224.9 million in total consumer credit as of September, down a little from the $226.5 million in credit reported in August, according to the most recent Federal Reserve Statistical Release on consumer credit, issued Nov. 5. Revolving credit constituted $35.3 million of the September total, with nonrevolving credit accounting for the remaining $189.6 million, the Fed reported. “The Federal Reserve reported that revolving consumer credit balances fell by $8.3 billion in September,” Steve Rick, senior economist for the Credit Union National Association, told News Now. “This corresponds to a $213 million drop--0.6%--in credit card balances at credit unions in the same month, the first drop since February. “Balances are falling for three reasons,” Rick added. “First, financial institutions are writing down loans and credit card defaults. Second, low consumer confidence has reduced the demand for new credit. And finally, tighter lending standards has reduced the supply of loans. We expect the deleveraging of U.S. households to play out over the next few quarters." Total consumer credit fell by 1.5%, revolving credit declined by 8.75%, and nonrevolving credit increased by 2.5% during the third quarter. Consumer credit rose by 1% in September, the Fed added. The Fed report includes credit card debt, auto loans and other debt not secured by real estate. It excludes home mortgages and home equity lines of credit. To read the Fed release, use the link.

WOCCU seeks nominations for Distinguished Service Award

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MADISON, Wis. (11/12/10)--The World Council of Credit Unions (WOCCU) is calling for nominations for the Distinguished Service Award (DSA), the highest honor bestowed by the international credit union system. Nomination forms for individuals and organizations are due no later than March 25. Award presentations for 2011 will be made at WOCCU's World Credit Union Conference, July 24–27 in Glasgow, Scotland, United Kingdom.
Click to view larger image The Distinguished Service Award, the highest honor bestowed by the international credit union system, is represented by the crystal bowls pictured here at the 2009 World Credit Union Conference held in Barcelona, Spain. (Photo provided by the World Council of Credit Unions)
The DSA honors the outstanding achievements of individuals and organizations within the global credit union movement whose activities have furthered WOCCU’s vision of “improving people's lives through credit unions.” WOCCU does not necessarily award the DSA every year but bestows the honor based on the viability and worthiness of candidates in the eyes of the awards committee. “We encourage the leaders of our member organizations to seek out candidates within their own credit union movements who have truly set themselves apart in regard to credit union service internationally,” said Dave Grace, WOCCU vice president of association services. “The Distinguished Service Award represents a rich history of service and dedication by those who have received the honor.” In the case of individuals, recipients may be WOCCU member organization officers, directors or representatives; international credit union pioneers; field technicians with a long and outstanding service record; or persons whose actions have benefitted global credit union development. WOCCU presents up to three individual awards in a single year. Institutional recipients may be organizations or agencies that have provided financial or technical assistance to develop international credit union movements and their service infrastructures over an extended period of time. WOCCU presents no more than one institutional award each year. Nominations must be made by a WOCCU member organization and are due no later than March 25. For more information, use the link.