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CUAD Gets Bank-Supported Tax Resolution Tabled In S.D.

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BISMARCK, N.D. (11/20/13)--South Dakota's Brookings County Commission Tuesday voted 4-0 to table a bank-backed resolution that would have supported taking the tax-exempt status away from credit unions and farm credit services.  Speaking on behalf of South Dakota credit unions at the meeting were Dan Cumbee, CEO Dakotaland FCU, Huron, and Jeff Olson, president/CEO of the Credit Union Association of the Dakotas (Memo Nov. 19).
 
"The County Commission decided it was not in their realm of responsibility to consider an item that had federal implications," said Olson after the commission's decision.  "Simply put, we made our case that any resolution that the committee would support was an endorsement of one business over another.  By passing the proposed resolution asking Congress to repeal the tax exemption for credit unions, they in essence would be taxing 251,000 credit union members in South Dakota."
 
CUAD coordinated a state-wide response strategy in the week leading up hearing, organizing a postcard drop, buying media time, placing news articles and urging credit unions to attend the session.
 
Olson reported that credit unions showed great support at the meeting, with members and credit union professionals from Sioux Falls (S.D) FCU, Service First FCU, Sioux Falls, Dakotaland FCU and others from Brookings and the surrounding area in attendance.
 
"Given the fact that the South Dakota banking chair lives and operates a successful bank in Brookings, getting the county commission to kill the resolution is a big win for credit unions and credit union members in South Dakota," said Olson.

CU System Briefs (11/20/2013)

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CU SYSTEM BRIEFS 11.20
 
 
  • LANSING, Mich. (11/20/13)--Johnathan Gallimore, chairman of Public Service CU, died of a heart attack on Nov. 10. Gallimore became a member of Public Service in 1953, and was elected to its credit committee in 1968. He was elected to the board in 1970, and rose to the rank of chairman in 1993. "His influence on the Public Service Credit Union family and members will be felt for years to come," PSCU President/CEO Dean Trudeau said. Gallimore was 81 years-old ...
  • ROCHESTER, N.Y. (11/20/13)--A 25-year old man was arrested Sunday for allegedly robbing a Summit FCU branch in Rochester, N.Y. (Rochester Democrat & Chronicle Nov. 18). Police detained Jimmy Nadal at about 2:40 a.m. (ET) on Nov. 17 after receiving a tip. Nadal was charged with third-degree robbery and fourth-degree grand larceny. He is accused of passing a Summit FCU teller a note demanding cash and then fleeing after taking an undisclosed amount on Nov. 15. Rochester Police Department's Major Crimes Unit is investigating the theft in tandem with the FBI. Summit FCU, based here, has over $693 million in assets ...
  • MIDDLETOWN, Pa. (11/20/13)--Credit unions in central Pennsylvania earlier
    Click to view larger image Click for larger view
    this month lent a hand raising money for Penn State Hershey Children's Hospital, a Children's Miracle Network Hospital affiliate. The fundraiser, a 28-hour radio marathon on Nov.7 and Nov. 8 sponsored by FM-105.7, The X Rocks, raised $126,863 to support treatment and programs offered to patients and their families. During the campaign, called "Pay 4 Play," listeners requested songs in exchange for donations. Mid-Atlantic Corporate FCU staff and other credit union representatives volunteered to work the phone banks for the radio station. "Pay 4 Play is a great event and a wonderful opportunity for central Pennsylvania credit unions to join forces and show our spirit of cooperation in action," said Erin Doan, chair of Mid-Atlantic Corporate community involvement committee. Pay 4 Play was started seven years ago and has raised $642,898 for local Children's Miracle Network Hospitals since its inaugural fundraiser. Mid Atlantic Corporate FCU, based here, is a wholesale lender and service provider that works with credit union service organizations, leagues, chapters, and more than 800 credit unions ...

Filene Study: Mortgage Writing Increases CU Performance

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MADISON, Wis. (11/20/13)--Credit unions that make more mortgage loans will be, on average, more profitable and grow more quickly, according to new research from the Filene Research Institute.
 
Filene states that credit unions hold a quarter of their assets in residential mortgages, and its report charts mortgage trends from the past three decades, revealing that these loans have "persistent positive effects on credit union performance."
 
The paper, Mortgages and Credit Union Performance: 1980-2011, documents how much the share of credit union assets held in mortgages rose in recent decades and estimates the size of the connections between mortgage share and credit union performance.
 
Findings from the study include:
  • Credit unions' direct holdings of mortgages grew rapidly over the past three decades, from only $3 billion in 1980 to $236 billion at the end of 2011. During that time, those holdings averaged 14% annual growth.
  • Mortgage holdings grew especially, at about 22% annually, during the 1980s. After the 1980s and until the financial crisis, growth slowed to 11%. From 2008 through 2011, nationally, credit unions still added mortgages at a 4% annual growth rate.
  • Credit unions' mortgage share rose fairly steadily from 5% in 1980 to 24% in 2011. On average, declines in mortgage share were rare and small, and occurred only when either macroeconomic or real estate conditions deteriorated considerably, as in the early 1980s and the early 1990s, and since the onset of the financial crisis.
  • As the number of smaller credit unions decreased and remaining credit unions grew in size, the percentage of all credit unions that held any mortgages rose from 17% in 1980 to 61% in 2011. By 2011, credit unions that held no mortgages accounted for only 3% of all credit union assets.
  • Averaged over the past three decades, individual credit unions that had more of their assets in mortgages had slightly higher returns on assets (ROAs) and higher inflation- adjusted asset growth.
  • On average, from 1980 to 2011, credit unions that boosted their mortgage share by 10% raised their ROAs by one basis point, they had higher costs as noninterest expenses per assets rose by nine basis points, and their inflation-adjusted assets grew nearly 1percentage point faster.
  • The effects of mortgage share on credit union performance were larger more recently. Beginning in 2000, instead of the average one basis point boost to ROAs that we estimated for the entire 1980-2011 period, a 10% increase in mortgage share raised ROAs by an estimated six basis points.
To download the study use the link.

Illinois CUs Share In Tornado Heartbreak

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MADISON, Wis. (11/20/13)--While central Illinois credit unions emerged remarkably unscathed from tornadoes that tore through the area on Sunday, they could not avoid the heartbreak that affected their employees, members and neighbors.
 
Click to view larger image At least 14 tornadoes struck Illinois and northwest Indiana Sunday, but the Illinois Credit Union League reported no damage to credit unions after reaching out to its members in central Illinois Monday and early Tuesday.
The Illinois Credit Union League reported no damage to credit unions after reaching out to its members in central Illinois Monday and early Tuesday. "As bad as the storms were, credit unions appear to come out of it relatively damage free," said Will Willie, league public relations coordinator "Most of the reports we received pertained to power outages and ATMs that were temporarily out of service."
 
At least 14 tornadoes struck Illinois and northwest Indiana on Sunday. Illinois Gov. Pat Quinn (D) declared six counties state disaster areas. The strongest of the tornadoes to hit Illinois slammed into the town of Washington near Peoria, where one person was killed.
 
A branch of CEFCU, based in Peoria, Ill., temporarily served as staging point for first responders and emergency personnel in Washington.
 
"Our branch was not damaged, and I think it served as a high profile location in the area until the responders could relocate to the local fire department, said Sue Portscheller, vice president of marketing for CEFCU.
 
At least seven CEFCU employees lost their homes in the tornadoes, Portscheller said.
 
Click to view larger image Seven employees of CEFCU, Peoria, were among the Illinois residents whose homes were destroyed in Sunday's tornadoes. (CUNA photos)
"Not only that, but we but we have really strong penetration in the severely impacted areas," she added. "Probably three out of four households are CEFCU members, so we are heartbroken, touched and involved with what's going on."
 
Three CEFCU branches were temporarily closed Monday due to power outages.
 
On Monday, CEFCU donated $100,000 to the Red Cross Central Illinois Tornado Relief Fund.
 
The credit union has also set up an emergency response team to help with members' financial needs. "Our plan was to develop a sort of one-stop shop with employees who are trained in multiple areas that can help members with whatever their needs are," Portscheller said. "Members are going to have to deal with mortgages, cars and lost account information."

Midwest CU's Auto Loans Now Certified 'Female Friendly'

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NORTH CHICAGO, Ill. (11/20/13)--A credit union in the Midwest has taken a new route to members service and has teamed up with a website that advises female car-buyers and certifies consumer automotive outfits as being friendly to women.

Great Lakes CU (GLCU) here announced last week that loan officers have completed a course issued by that website, AskPatty.com, making it the first credit union to receive credentials from the website. The credit union, which has 13 locations in Illinois and Wisconsin, is also entering into an AskPatty.com marketing support program and year-round training courses geared toward building stronger long-term relationships with women members.

The credit union said that its website will soon feature services geared towards women interested in auto loans, which include credit pre-approval, information about monthly payments, financing options and other resources that women car loan-applicants frequently request.

Susan Malo, GLCU assistant vice president of business development, said that the credit union first considered teaming up with the website last year, when it held its first annual "Chicks, Cars and Cupcakes"--a gathering held to give women car-buyers a leg-up. AskPatty CEO Jody DeVere was the keynote speaker at the event.

DeVere founded the site in 2005 to empower women looking for information about consumer automotive products and services. She has said that women are buying more than 60% of cars these days, and 85% of the decision of what model and make is brought into a household is made by women. She said that this means dealers need to find ways to "connect with us, and it's not by making things pink and treating us like we're less intelligent (Chicago Tribune Feb. 3, 2011)."

GLCU's Malo said that based on the success of that 2012 symposium and one held on Oct. 5, she asked DeVere if it would be possible for GLCU to become the first credit union to receive AskPatty certificaition. DeVere agreed, and AskPatty tailored its auto-loan certification process to meet the needs of a credit union.

Malo told News Now that while it's tough to gauge just how GLCU members are responding to the partnership, with it having just been announced last week, she did note that the initial press release received 30,000 impressions--a measure of page views. She also said GLCU will be tracking its loan volume to determine the extent to which the partnership is having an impact on female auto-loan customers.

While GLCU does have financial services geared toward certain types of consumers, like student loans, this is its first targeted auto-loan marketing and service program.
AskPatty.com also certifies car dealers, tire dealers, collision centers, and car service and repair centers.

Travis CU Testifies On Small-dollar Loans Before State Banking Committee

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VACAVILLE, Calif. (11/20/13)--Representatives from Travis CU, Vacaville, Calif., recently testified before a California Senate banking committee about a new loan product geared towards helping the unbanked and underbanked Latino community.
 
Click to view larger image Travis CU Director of Corporate Communications Sherry Cordonnier, front, and Senior Vice President and Chief Loan Officer Stacy Fifield testify before the Senate Committee on Banking and Financial Institutions, which held an informational hearing on Thursday, Nov. 14, on various nonprofit and community based organizations with small dollar loan products. (Photo provided by California and Nevada Credit Union Leagues)
Travis CU's Director of Corporate Communications Sherry Cordonnier and Senior Vice President and Chief Loan Officer Stacy Fifield were invited to testify before the Senate Committee on Banking and Financial Institutions, which held an informational hearing on Thursday on nonprofit and community based organizations with small dollar loan products.
 
Travis recently finalized a small dollar lending pilot program, the New Era Tanda Loan Program. The pilot program debuted in mid-2012, in part through a grant received by the National Credit Union Foundation. It was designed in partnership with Coopera, a firm focused on the emerging Hispanic market, to help Latino participants develop a 12-month shared savings goal and to take advantage of the credit union's unique savings and loan offerings.
 
"We developed the program concept for this unique program centered on tandas (also known as cundinas, sans or quinelas)," Cordonnier said. "Tandas--informal borrowing/lending circles--are common in immigrant cultures, especially Latin American immigrant cultures. The modernized tanda, developed by TCU, aimed at bridging a cultural custom with the credit union experience.  TCU partnered with the Yolo Family Resource Center to conduct the pilot program. The program used a grassroots and culturally relevant approach tailored to the local Latino community."
 
The initial class consisted of six people, each of whom was encouraged to attend monthly financial literacy courses, all offered in Spanish.  Participants contributed on a monthly basis to a shared savings account and also received a group share-secured loan to help save for a down-payment on a vehicle. After completing the program, each qualified participant was eligible for a TCU credit-building credit card and/or auto loan.
 
One of the goals of the program was to build Hispanic members' credit and good financial habits through financial education, Cordonnier said.
 
Travis CU found, via pre- and post-surveys, tjat those who participated were more likely to use online banking, bill pay, checking accounts, ATM/ debit cards, credit cards, savings accounts and direct deposit than they were prior to the program. They were also more likely to balance a checkbook, cash checks, and use a personal budget, Cordonnier said.
The Credit Union National Association and credit unions are committed to providing safe and affordable alternatives to predatory payday lenders. Loans from federal credit unions are generally limited to an annual percentage rate of no more than 18%, although there is some flexibility under the National Credit Union Administration's short-term, small amount loan program. That program permits federal credit unions to charge an interest rate that is a maximum of 10 percentage points above the established usury ceiling at that time. For now, this amounts to an interest rate ceiling of 28%. Most credit unions offering payday loan alternatives also limit fees, provide member financial counseling, and encourage members to open savings accounts.

CU Staff's Generosity Lifts Member After Setback

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TORRINGTON, Conn. (11/20/13)--Like her co-workers at $38 million-asset
Click to view larger image (Left to right): TMTFCU's Mike Denza, Mike Allen, Therese Pavan, Suzette Barker, Dawn Pawlow, Brooke Gunther, and Ilma Sabolik stand under the credit unions' "People Helping People." (TMTFCU Photo)
Torrington(Conn.) Municipal & Teachers FCU (TMTFCU), front line staffer Suzette Barker enjoys engaging members in conversations. That extra effort on Barker's part gave the credit union a chance recently to go "above and beyond" for a member in need.
 
Many times, members simply reply politely to Barker about that day's to-do list, an upcoming birthday, or a development around town.  But in one instance, Barker's pleasant greeting prompted a member to share a painful episode that had put her family in a tough spot.
 
According to the Credit Union National Association's Credit Union Front Line Newsletter, the member told Barker she was moving to a new apartment with her two young girls as part of a much-needed fresh start. She purchased new bedding, new furniture, and a few back-to-school items, and left them overnight in the apartment along with some other family possessions.
 
She returned the next day to find someone had broken into her apartment, stolen many of her belongings, and damaged or destroyed much of what remained. Worse, the member had
yet to purchase renter's insurance.
 
Understandably, the setback devastated the woman. She wasn't sure whether she wanted to move into the apartment complex anymore, even though she'd spent two years on a waiting list.
 
"She'd been through some hard times, and it was just unfair," Barker says.
 
The member wasn't asking for any help, according to Barker, but was merely opening up about her situation. CEO Donna Marie Battistoni and a group of TMTFCU employees consoled her.
 
Later, a colleague suggested the credit union take up a collection on the member's behalf. Barker received contributions from employees and the board.
 
"Suzette's a great example of the credit union philosophy of people helping people, and the staff and board of TMTFCU were happy to follow her lead," says Nancy Sieller, the credit union's chief operating officer.
 
With the proceeds, TMTFCU purchased a $300 Walmart gift card to help the member replace some of her belongings.
 
"She was so appreciative, you knew you did good," Barker says.
 
CUNA's Credit Union Front Line Newsletter asks credit unions to send their stories about front-line staff who went "above and beyond" to: cufrontline@cuna.com.
 
Use the resource link to subscribe to the newsletter.