Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

CU System Archive

CU System

Wildfires affect CUs transaction volume

 Permanent link
PASADENA, Calif. (11/19/08)--The California wildfires this past weekend affected transaction volume at some of Wescom CU’s branches, the credit union said. Susan McCready, Wescom senior vice president of branch services, told News Now that she talked with several branches who reported that business was “much slower than usual.” “It was a frightening day because of all the fires,” she said. Wescom, which is based in Pasadena, closed its Anaheim Hills branch at 1:45 p.m. on Saturday because of smoke. The credit union handed out masks to its members--a gesture they appreciated, McCready said. Members who came into the branches didn’t appear to be panicked, she added. The fires affected California residents in Santa Barbara, Los Angeles, Orange and Riverside counties. The Orange County Fire Authority lifted the final evacuation order Tuesday for the Chino Hills area. The firefight is over, the California Department of Forestry and Fire Protection told The Los Angeles Times (Nov. 18). Calif. Gov. Arnold Schwarzenegger declared a state of emergency during the fires and the California Department of Financial Institutions also ordered its institutions including credit unions to help consumers affected by the fires (News Now Nov. 17). Some Wescom employees evacuated their homes because of the fires, but have since returned. “We are very happy that none of our employee’s homes burned,” McCready said. Wescom had asked its employees to notify the credit union if they had suffered a loss. “Some employees who evacuated didn’t get back into their homes until [Monday],” McCready said. So far, two members have contacted Wescom about losses due to the fires. One came into the branch to talk to the credit union, and another contacted the credit union through its call center. Wescom also will offer emergency fire loan assistance to members who suffered losses in the fire. Wescom has $3.69 billion in assets.

Promo results in 40 hike in new cardholders

 Permanent link
FARMERS BRANCH, Texas (11/19/08)--East Texas Professional CU's summer promotion for its card products "really rocked." It brought in more than 500 new cardholders in July and August through its in-branch promotion. The Mastercard "Roots of Rock" consumer card in-branch promotion was designed by TNB, and a number of credit unions participated, said the Texas Credit Union League (LoneStar Leaguer Nov. 18). The $334 million asset credit union, based in Longview, saw a 40% increase in the number of new cardholders compared with an in-branch promotion it offered last year, Chris Graham, card services administrator, told the league. The credit union used TNB's kit, which contained flashing guitar magnetic lapel buttons, window clings, tent cards, posters, and member giveaways. TNB also offered card information and training to ensure employees were comfortable marketing the card products. An employee sweepstakes offered every employee a chance to win prizes such as MP3 players, T-shirts and music downloads. The grand prize was a $1,000 Mastercard gift card. East Texas Professional CU also provided rewards to two employees each week during the promotion. The credit union decorated its seven branches with vintage rock music posters and inflatable guitars. Members were treated to rock-themed events each Friday, in which they received "Roots of Rock" simulated tattoos, root beer served in themed cups and popcorn bags carrying the Roots of Rock logo. The events were used to solicit members to apply for the credit union's credit card and encourage existing cardholders to use their card for a chance to win a trip to meet Jon Bon Jovi, Eric Clapton or Kenney Chesney at a concert. The consumer promotion was sponsored by Mastercard. Ruth Holden, senior vice president and loan officer for the credit union, won the grand prize. She had 62 entries in the contest, representing the number of approved card applications she generated during the promotion.

Collaboration assists CUs quick relocation

 Permanent link
PITTSBURG, Calif. (11/19/08)--Collaboration between two California credit unions helped one that was forced to relocate on short notice. Pittsburg (Calif.) Employees FCU (PEFCU) was given 90 days to relocate before its 1,250-square-foot facility was razed to make way for a new city complex. Faced with the task of finding a new location and moving by the end of April, Sophia Kern, CEO of the $8 million asset PEFCU, turned to industry peers for help. Kern had connections with the local credit union community as a result of spending eight years with Concord Diablo CU and nine years with Metro 1 CU--both located in Concord, Calif. At a local chapter meeting, Tina Fields-Dillow, CEO of the $200 million-asset Metro 1, offered to mentor Kern through the processes of funding, leasing, designing and coordinating PEFCU’s move into a new facility. After receiving several unsolicited merger offers from credit union of all sizes, Kern accepted Fields-Dillow’s offer. “I liked the way [Fields-Dillow] offered to mentor me,” Kern said. “Sometimes it is all about the approach, offering help without strings attached. A few other credit unions offered help, but when it came to crunch time, I called her first and she was there.” Kern needed to determine the credit union’s space needs, size, location and affordability. A location was found directly across a freeway from its original sight. Together, Kern and Fields-Dillow analyzed the credit union’s balance sheet and operations, allowing Kern to recommend several operational changes to her seven-member board. The move took place the weekend of April 18-20. PEFCU was open for business in its new location April 21. “PEFCU would not have been able to make this move in less than 90 days if Tina Fields-Dillow had not stepped forward to assist us in the process,” Kern concluded.

INewsweekI CDCUs are ethical subprime lenders

 Permanent link
NEW YORK (11/19/08)--Community development credit unions (CDCUs) are "ethical subprime lenders" that can help refute the argument that subprime lending is to blame for the economy's problems, says this week's Newsweek (Nov. 24). The article notes that "even amid the worst housing crisis since the 1930s, many of these [community development] institutions sport healthy payback packages. They haven't bankrupted their customers or their shareholders. Nor have they rushed to Washington begging for bailouts." Cliff Rosenthal, CEO of the National Federation of Community Development Credit Unions, told Newsweek that the federation's 200 CDCU members, serving primarily low-income communities, have a delinquency rate of about 3.1% of assets, compared with the national delinquency rate on subprime loans of 18.7%. The article outlines as examples of lenders who "put into practice the types of bromides that financial-service companies like to use in their advertising" three credit unions and features interviews with their CEOs. Interviewed are: Linda Levy, CEO at Lower East Side People's FCU, New York; Rita Haynes, CEO at Faith Community United CU, Cleveland; and Ed Jacob, manager/CEO of Northside Community FCU, Chicago. For the full article, use the link.

CU CEO confidence at lowest mark says index

 Permanent link
PLANO, Texas (11/19/08)--Credit union CEOs' confidence took its greatest plunge in four years during the week after the presidential election, says a Southwest Corporate FCU survey. The corporate's Credit Union CEO Confidence Survey skidded 14.72 points since the last survey in third quarter, to 10.50--the lowest reading since the survey began four years ago. The drop followed a seven-point increase in CEO confidence during third quarter's survey, which occurred before the nation's financial and economic crisis picked up speed. In the November Special Edition survey, CEOs expressed pessimism across the board and registered the lowest marks in survey history for current conditions and conditions in six months for both credit union and member financial conditions categories. Expectations for credit union financial condition and member financial condition six months from now dropped 22 points. Anticipation for loan demand in six months dropped by more than 20 points to zero from the last survey. The confidence index measures CEOs' feelings on six key issues:
* Members' current financial condition; * Credit union's current financial condition; * Members' financial condition six months from now; * Credit union's financial condition six months from now; * Loan demand at the credit union in six months; and * Share deposit growth at the credit union in six months.
The corporate said that $49 million asset KBR Heritage FCU, Houston, which serves a single sponsor from one on-site location, has seen a flood of deposits from the financial market turmoil and from the sponsor company's belt-tightening. The credit union is concerned about possible overcapitalization. "Members have been bringing in funds from other institutions, because they see that credit unions have avoided many of the problems others are facing," Mary Hawk, KBR Heritage president, told the corporate. In the past two months, the credit union's share base increased $4.2 million, "but we're not making loans. I have 16% capital," Hawk, said. According to Brian Turner, Southwest Corporate's director of advisory services, most credit unions are watching net margins narrow, overhead expenses increase and net incomes slide, but he also noted credit unions have experienced some insulation. "Credit unions are in a much stronger position than their financial counterparts in terms of credit quality and capitalization," Turner said. "Most anticipate traditionally strong share growth first quarter 2009, yet are concerned about loan growth over the next few quarters. With the high cost of liquidity, more credit unions might have to rely on additional investment portfolio income to successfully traverse the first half of 2009," he said. Turner advised credit unions not to let recent financial crises cause them to avoid lending or investment activities. "Conventional fixed-rate real estate loans continue to demonstrate strong relative value without requiring a compromise in underwriting standards," he said. "Reasonable expectations for 2009 earnings should clearly be discussed with boards, taking into account the current environment but also recognizing that as the economy recovers in late 2009, confidence, outlook and earnings again will return." He said many institutions are waiting it see what happens in the months after President-elect Barack Obama's inauguration. "That will set the tone for how quickly recovery might begin," Turner added.

IMarketWatchI CUs no longer your fathers CU

 Permanent link
NEW YORK (11/19/08)--The manner in which credit unions have evolved over the years and the advantages they offer consumers compared with other financial institutions was the topic of a Monday MarketWatch column. The column, “Not Your Father’s Credit Union,” by Jennifer Openshaw, discusses a reader’s response to a previous column. In it, she listed advantages credit unions have over traditional banks--such as not-for profit status, self-funding, better rates and lower fees. She also mentioned that credit unions are insured up to $250,000 through the National Credit Union Share Insurance Fund (NCUSIF). Benson Porter, CEO of Addison FCU, Palo Alto, Calif., and former Washington Mutual executive, reinforced credit unions’ advantages Openshaw had mentioned in the previous column. Porter then listed ways credit unions are “breaking old molds and evolving faster than some may realize.” Regarding credit unions, Porter told Openshaw:
* Almost anyone can join, which is a departure from the past when most credit unions solely served select employee groups; * Members can access financial services anywhere. In the past, most credit unions operated only on or near employer facilities. Today, the bigger credit unions have branches; * High-yield checking accounts are offered by credit unions, with up to 4.5% interest on balances up to $25,000, with unlimited free checking; * Business banking services are available that offer businesses checking and credit card processing; and * Investment services, which are like to rapidly grow in the current economic environment, are offered.

Yes Live summit Dec. 3 in Tampa

 Permanent link
MADISON (11/19/08)--The Credit Union National Association's (CUNA) third annual YES Summit will “go live” Dec. 3-5 in Tampa, Fla. with its recurring focus on ways to better serve members of the diverse 18-to-30 year-old demographic group. As it did last year, the conference will reach out to include the entire credit union movement via the Internet. “YES stands for 'Your Essential Strategies'--the means by which credit unions can best explore and respond to the 18-to-30 market,” said Josh Jones, YES organizer and CUNA’s manager of young adult programs. “To encourage the widest possible conversation, we’ve tied the summit to a couple of other initiatives.”
* An online network--the YES CU Community. CUNA will maintain the network so credit union professionals can discuss 18-to-30 issues and strategies with their peers. The Yes CU Community is open to anyone associated with the credit union movement who wants to network with others about better serving young adults. To join the nearly 500 current community members, click on the resource link and follow the signup prompts. * An online discussion site--the YES CU Blog. CUNA will host the site to raise issues pertinent to 18-to-30 market strategizing. The blog is ongoing, but will rachet up during the summit. Christopher Morris, Web manager for CUNA Councils, and Philip Heckman, CUNA’s director of youth and young adult programs, will be on site at the summit to provide almost instantaneous coverage of YES sessions. Their live blog posts will provide the speakers' main points, and attendees' insights and reactions, to the credit union world as they happen.
This year’s YES Summit speaker lineup includes:
* Mark Schwanhausser of Javelin Strategy & Research, speaking on attitudes and behaviors; * Kim Crockett, manager, Common Wealth CU, on media and messages; * Sarah Shirley of Consumer Federation of America, on savings and credit in the military; * Rodney Hood, vice chairman of the National Credit Union Administration, on attracting and retaining young employees; and * Claudine Oriani of As If Productions, on developing human capital.

Kenyan CU officials visit Massachusetts CUs

 Permanent link
MARLBOROUGH, Mass. (11/19/08)--The Massachusetts Credit Union League hosted a study group of nine Kenyan credit union officials last week.
The Massachusetts Credit Union League hosted a study group of Kenyan credit union officials last week. The group visited four credit unions in Massachusetts during their visit. Pictured with the Kenyan delegation at Fitchburg (Mass.) FCU is Daniel Egan, league president (back row, fifth from right), and Barbara Goodwin, Fitchburg FCU president (front row, right end), with members of her staff. (Photo provided by the Massachusetts Credit Union League)
The group represented the Kenya Union of Savings & Credit Co-operatives (KUSCCO, the league) and three credit unions--the Nyeri Teachers SACCO, Kirinyaga Tea SACCO, and the Ufundi SACCO. In Kenya, credit unions are referred to as Savings and Credit Co-Operatives (SACCO). The group’s goal was to research best practices among credit unions in the U.S.--particularly in member education, technology and governance. The visit was organized by the World Council of Credit Unions. The Kenyan officials visited HarborOne CU’s Multi-Cultural Center in Brockton, RAH CU in Randolph, then Metro CU in Chelsea and Fitchburg FCU. The group members, which represented some of the largest credit unions in Kenya, indicated that they face many of the same challenges and opportunities that the credit unions they visited do. During the visit to Fitchburg CU, Carilus Ademba, managing director of KUSCCO, received a phone call from Nairobi informing him that a long-sought piece of credit union legislation had been passed by the Kenyan Parliament. The bill, among other things, creates a separate regulatory authority for credit unions in Kenya. League President Dan Egan congratulated the credit union colleagues on their legislative achievement. The subject of politics stayed on the table during the meeting when the visitors expressed their pride and pleasure that Barack Obama, who is of Kenyan descent, had been elected to serve as the next U.S. president.

EasCorp waives November service fees

 Permanent link
BURLINGTON, Mass. (11/19/08)--Eastern Corporate FCU (EasCorp) is waiving nearly all of its service fees this month during “November Free-for-All.” The corporate will not charge product and service users for automated clearinghouse and check processing, funds transfers and settlement services, security safekeeping or statement mailing services. The savings represents a $500,000 in value for EasCorp service users, the corporate said. EasCorp experienced strong earnings and capital beyond regulatory requirements, according to Jane Melchionda, president/CEO. The $1.5 billion corporate credit union serves more than 300 credit unions in the eastern U.S.