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CUs partner with car dealers to boost auto sales

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BAKERSFIELD, Calif. (11/19/09)--Credit unions in Bakersfield, Calif., are providing incentives to their members and working with auto dealers to spur car sales, according to a California newspaper. Steve Renock, CEO of Kern Schools FCU, told The Bakersfield Californian that both credit unions and auto dealers could “use the business.” Renock met with the Bakersfield New Car Dealers Association a week ago to work on an agreement to spur sales at the dealers and more loans for the credit union. The $1.7 billion asset Kern Schools FCU plans to offer loans with rates as low as 4.25%, and list the names of association dealers in its newsletter. In return, individual dealers will offer discounts to credit union members, the newspaper said. Kern Schools hasn’t made as many auto loans this year as it has in the past. In October, the credit union made 63 loans--a 72% drop from last year. Kern members bought 1,034 new vehicles in October, which is 38% fewer than last year, and 22% less than September (Bakersfield Californian Nov. 14). Doug Kileen, president/CEO of Safe 1 CU, said its members are borrowing less, which is why loan numbers have decreased. Many auto manufacturers also are offering 0% financing--which is hard for the credit union to compete with, he added. To encourage sales, Safe 1 recently offered a 30-day sale where it lowered auto loan rates to 3.9%. The sale drew about $10 million in loans, the paper said. Other incentives recently undertaken by credit unions to spur auto sales include CUCorp’s “Invest in America” program, which offers discounts on Chrysler and General Motors vehicles to buyers who receive financing through credit unions.

Oral arguments made in Kentucky FOM case

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FRANKFORT, Ky. (11/19/09)--Oral arguments were presented Wednesday in the Supreme Court of Kentucky regarding a field of membership (FOM) case that affects Kentucky credit unions’ ability to serve members based on geography. The case, Home Fed. Sav. & Loan v. Kentucky, was brought by the Home Federal Savings and Loan Association against the Kentucky Office of Financial Institutions (OFI)--now the Department of Financial Institutions (DFI)--in May 2006. The suit alleges that the DFI has no authority under Kentucky law to approve geographic FOM bylaws for Kentucky credit unions (News Now Feb. 17). In 2007, the Kentucky Circuit Court for Franklin County ruled that the DFI exceeded its statutory authority when it approved geographic FOMs for six state-chartered credit unions between 2000 and 2005. In November 2008, an appeals court upheld the decision. In 1984, Kentucky shortened a lengthy statute about the members that credit unions can serve to “credit union memberships shall be limited to persons having a common bond or similar occupation, association or interest.” The statute does not specifically mention geography, which Home Federal used to argue that DFI can't approve geographic FOMs. During the oral arguments, several justices asked questions regarding whether the Kentucky Legislature's 1984 revisions to the FOM statute had been intended to broaden Kentucky's credit union FOM criteria, as the credit union parties have argued, or whether the legislature had instead intended to restrict credit union FOMs, as Home Federal's attorney argued. DFI had approved these geographic FOMs by interpreting the term “similar . . . interests” to include the similar interests that people living and/or working in the same community share, and the justices asked whether it was reasonable to interpret “interests” in this manner given that the word's meaning is ambiguous in context. In Wednesday’s arguments, attorney David Wilson, who represented the six credit unions, said that the lower courts’ logic was incorrect when it concluded that DFI overstepped its bounds when approving the geographic FOMs. Wilson argued that--if the Kentucky legislature had in fact intended to eliminate geographic FOMs when it revised the Commonwealth's credit union act in 1984, as Home Federal argued--the legislature must also have intended to eliminate credit union membership based on selected employee groups (SEGs). Neither geographic FOMs nor SEGs are specifically mentioned in the 1984 version of the FOM statute, even though many Kentucky credit unions serve SEG memberships and DFI has routinely approved new SEG FOM bylaws since 1984. In his brief, Wilson wrote: "the lower court's logic relative to credit union membership appears at first glance to be sound when applied to membership predicated upon geographic residence. However, if the same logic is applied to the credit union membership statute in its entirety, an absurd result is reached." Jill Endicott, who represented Home Federal, rejected Wilson's argument about the SEGs on Wednesday, saying it was not part of the issue The Supreme Court of Kentucky will issue an opinion on the matter.

CU System briefs (11/18/2009)

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* RIVERSIDE, Calif. (11/19/09)--Altura CU, Riverside, Calif., encouraged its employees to “Think Pink” in a month-long event to raise awareness and money for breast cancer, during National Breast Cancer Awareness Month in October. The employees raised just over $9,000. “All the money was donated to the Susan G. Komen Race for the Cure at their event in Temecula, Calif., in late October. Team Altura ranked third for the team donations for the walk,” said Chauntelle Moses, Altura payroll manager and breast cancer survivor. Altura Executive Vice President Ron Woodbury also provided a donation match of $5 for each employee who walked in the race. Altura CU has $890 million in assets. (Photo provided by Altura CU) ... * APPLETON, Wis. (11/19/09)--Eighteen Fox Cities, Wis.-area credit union branches have gathered more than $11,400 in donations to the Appleton Post-Crescent’s “Stock the Shelves” Community Campaign, which raises money for 19 food panties in the newspaper’s circulation area (Appleton Post-Crescent Nov. 16). The credit unions, located in the Appleton, Neenah and Menasha area, also are accepting nonperishable food items at their branches, the newspaper said ... * LYNCHBURG, Va. (11/19/09)--The Credit Unions Care Foundation of Virginia made a $1,000 donation to help victims of the Fort Hood shooting in Texas. The money will support families whose loved ones were killed during the Nov. 5 shootings and help the surrounding community. “With so many military credit unions based in Virginia, we are especially sensitive to the needs of our brave military men and women,” said Gerrianne Burks, president/CEO of Northwest FCU, Herndon, Va., and chair of the foundation. “It’s important that we show the Fort Hood community that the rest of the nation mourns with them and stands ready to help them in their hour of need” ...

CUAO announces board of directors

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BEAVERTON, Ore. (11/19/09)--The Credit Union Association of Oregon (CUAO) seated its 2010 board of directors at its annual business meeting Nov. 6. Newly elected to the board is Trisha Baker, CEO of UFCW Northwest FCU, Portland. Board officers are:
* Chair Gene Pelham, CEO, Rogue FCU, Medford; * Vice Chair Bill Anderson, president, Mid Oregon FCU, Bend; * Treasurer Kevin Cole, CEO, MaPS CU, Salem; and * Secretary Bob Newcomb, president, SELCO Community CU, Eugene.
Board members are:
* Stan Baron, president/CEO, Chetco FCU, Harbor; * Steve Canfield, executive vice president, NW Preferred FCU, Tigard; * Shirley Cate, CEO, Providence Health System FCU, Portland; * Rob Stuart, president/CEO, OnPoint Community CU, Portland; and * Jean Wheat-Palm, president/CEO, Valley Health and Postal Employees CU, Salem.
Also at the meeting, Oregon State Rep. Kevin Cameron (R-Salem) provided credit unions with a legislative update. Troy Stang, CUAO president/CEO, thanked credit unions for their efforts advocating the state credit union movement. “The credit union model, and the way you tend to the needs of your members has the attention of our elected officials in Congress,” Stang said. “And it should have their attention--it’s a model that works. Your voice is being heard and that voice needs to remain strong as we lay out the blueprint for success and build the credit union movement for the future.”

Australian CUs look to build scale through mergers

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CANBERRA, Australia (11/19/09)--Australia’s $43 billion credit union industry is experiencing increasing pressure to build economies of scale through mergers, as a result of competition for deposits significantly reducing interest margins in 2009, analysts said. The industry had shown resilience in a challenging year, according to KPMG’s annual survey of Australian credit unions and building societies (The Australian Nov. 18). A lack of alternative funding sources has led to intense competition for deposits that has slashed the net interest margin for credit unions by 42 basis points--to 2.49% from 2.91%, the newspaper said. “This, combined with the ever-increasing regulatory burden facing all mutuals, has contributed to the business case for mergers, said Martin McGrath, KPMG financial services partner. However, Australian credit unions need to be thoughtful about merger partners because part of credit unions’ appeal is the long-term relationship they have with their members, McGrath added (The Advertiser Nov. 18). “Not every merger is a good merger,” he said. “A good merger is one where you can create some efficiencies, but still maintain that long-term bond.”

CUs accounts attracting many in Wash. state

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FEDERAL WAY, Wash. (11/19/09)--Washington state residents are moving their accounts to credit unions en masse in response to better rates, safety and soundness, according to the Washington Credit Union League. During the third quarter of 2009, 173,464 consumers joined one of the state’s 119 financial cooperatives, according to Callahan & Associates, a Washington, D.C.-based firm, specializing in financial publications, software development, strategic planning, and investment management for credit unions. This latest tally shatters all previous quarterly membership increases and brings Washington state’s total credit union membership to 2,795,489, or 42% of the state’s estimated population of 6,668,200, the league said. “Media reports on problematic banks seemingly have made Washingtonians suspicious of profit-driven financial institutions, especially big Wall Street banks,” said league President/CEO John Annaloro. “Ten percent yearly growth was unheard of prior to this extraordinary migration to credit unions.” The next highest new membership total was 4.2%, which occurred in 2008 when 103,859 consumers joined a Washington-based not-for-profit credit union. This year’s third quarter membership summary brings 2009’s total new membership to 240,485. Some of the public’s move to credit unions may be the result of media reports on studies, such as a recent Pew Charitable Trust study. It found that credit cards offered by credit unions provide their members with more reasonable annual percentage rates, cash advance fees, late fees and other fees than banks, the league said. The report also found that penalty fees at the largest credit unions are nearly half those assessed by larger banks. Recognizing that it would see record-setting membership growth this year, the Washington league celebrated its 75th anniversary by honoring the 75,000th new member of 2009 with a prize package worth more than $2,300. The winner, Kristin Henkus, joined Seattle Metropolitan CU in July because she was dissatisfied with the new management of her bank. Since then, she has discovered many more reasons to stay. “It’s a nicer community feeling,” she said. “[Banking at a credit union] is really convenient because you can use everyone’s ATMs; you don’t get charged.”

Wis. CUs raise funds for hospitals Childrens Miracle Network

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MADISON, Wis. (11/19/09)--Through the Credit Union Cherry Blossom Ten-Mile Run in Washington D.C., Wisconsin credit unions and affiliated industry organizations contributed more than $81,000 in 2009 to the state’s system of Children’s Miracle Network hospitals.
Click to view larger image Credit union organizations and credit unions presented a check for $37,343 to Children’s Hospital of Wisconsin at the Wisconsin Credit Union League’s office in Madison recently. Participating were, from left, Derick Stace-Naughton, CUNA Mutual Group; Harley Skjervem, Credit Union National Association (CUNA); Christine Rockweit, president, Fond du Lac (Wis.) CU; Josie Collins, National Credit Union Foundation; Keri Brunelle, Children’s Hospital of Wisconsin/Health System Foundation; Sheila McNeal, CUNA Mutual Group; Brett Thompson, president, Wisconsin Credit Union League; Mark Condon, CUNA; Tom Liebe, government affairs, Wisconsin Credit Union League; Christopher Roe, senior vice president, corporate/legislative affairs, CUNA Mutual Group. (Photo provided by CUNA Mutual Group)
The most recent contribution of $37,343--made as part of a check presentation at the Wisconsin Credit Union League’s office across from the state Capitol--will benefit Children’s Hospital of Wisconsin in Milwaukee. “Because of state credit union fundraising, the credit union movement is proud to contribute to Wisconsin Children’s Miracle Network-affiliated hospitals,” said Christopher Roe, senior vice president, corporate/legislative affairs, CUNA Mutual Group, and a member of the board of directors of Credit Union Miracle Day, Inc., the title sponsor group of the run. “Wisconsin’s participation in this national event directly helps children in our communities and demonstrates the mission of credit unions--‘people helping people,’” he added. State credit unions and affiliated business partners also contributed $22,200 each to Gunderson Lutheran Medical Center in La Crosse and St. Joseph’s Children’s Hospital of Marshfield. “With more than 12,000 runners, including more than 6,000 credit union members, the Credit Union Cherry Blossom Run in Washington, D.C., is a flagship fundraising event for Credit Union for Kids,” said Sarah Turner, director of Credit Union Miracle Day (CUMD). “Once again, we are pleased this event contributed $1 million to children’s hospitals nationwide in 2009.” CUMD is an organization of credit unions and industry affiliates dedicated to raising funds for the Children’s Miracle Network and raising awareness of the credit union difference. Credit unions and industry business partners contributing to the $81,743 Wisconsin total included the Wisconsin Credit Union League; Lifetime CU, West Allis; Fond du Lac (Wis.) CU; CUNA Mutual Group; Credit Union National Association; Fiserv; Credit Union Executives Society and the National Credit Union Foundation. “Wisconsin credit unions take great pride in supporting the Cherry Blossom Run and the Children's Miracle Network-affiliated hospitals throughout our state,” said Brett Thompson, president/CEO of the Wisconsin league. “We’re pleased to be part of an event that raises national awareness to helping sick and injured children, yet still has a direct impact on our local communities.” “Funds collected stay at home, so every dollar generated by credit unions serves your local community,” Turner added. “The monies raised by credit unions in Wisconsin and elsewhere are tracked according to donor ZIP codes, so money donated in Wisconsin goes to Children’s Miracle Network hospitals in La Crosse, Marshfield and Milwaukee.” “Thanks to the generous support of credit unions and the Cherry Blossom Run, Children's Hospital and Health System is able to acquire new equipment that results in improved treatment, fund research to find new cures and treatments for diseases, support family services, from toys and art therapy to interpreter services,” said Keri Brunelle, fundraising manager for the Milwaukee hospital. “We are grateful to the Credit Union for Kids campaign for their ongoing support.” The Children’s Miracle Network is a nationwide affiliation of more than 170 children’s hospitals that provides state-of-art care, research, preventative health education and treatment for children with diseases and injuries.