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State regulator OKs First Jersey CU charter expansion

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WAYNE, N.J. (12/1/11)--The New Jersey Department of Banking and Insurance granted approval to First Jersey CU in Wayne, N.J., to expand its charter, the credit union announced.

"This approval is a very exciting step for First Jersey," Christopher Davis, First Jersey CEO, told the New Jersey Credit Union League (The Daily Exchange Nov. 29).

"Currently, our area of membership includes anyone who lives, works, worships or attends school in Passaic County," he added. "We are now permitted to expand our field of membership to include Bergen, Essex, Hudson and Union counties. As individuals in those counties become new members, we will be able to offer credit union membership to their family members as well."

The expanded charter will allow First Jersey to offer its financial services to a base of roughly 1.5 million potential new members, Davis said. The credit union has 8,653 members. First Jersey's deposit rates are higher and its loan rates are lower than nearly every other financial institution in its market area, Davis noted.

First Jersey's approval is the first state-charter expansion granted in the past five years, the league said. The credit union has more than $124 million in assets.

GCUA survey Holiday shoppers remain frugal

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DULUTH, Ga. (12/1/11)--Georgia residents remain frugal in the face of holiday shopping, according to the most recent "Paying Attention" quarterly report issued by Georgia Credit Union Affiliates (GCUA).

The report indicated 45.1% of respondents said they intend to keep their holiday shopping budget between $100 and $500. GCUA polled more than 6,000 Georgia credit union members and collected data from credit unions statewide.

"For several years in a row, shoppers have trimmed their budgets, and we believe Georgia consumers will be frugal again this year," said Mike Mercer, GCUA president/CEO. "Many Georgians are trying to avoid going into debt, and that includes cutting back on purchases throughout the year, including during the holidays."

Other key findings of the report:

  • About 51% of Georgians plan to spend the same this holiday season as last year;
  • Savings deposits at Georgia credit unions increased 9.55% during the first nine months of the year; and
  • Credit card balances of Georgia credit union members decreased by 2.15% this year.
Consumers still are hesitant to borrow money, according to savings and loan data from more than 150 credit unions in the state. Georgians are choosing to put their savings in short-term savings accounts rather than longer-term certificates of deposit--even as interest rates hover around historic lows, GCUA said. Consumers are waiting for interest rates to increase before locking into longer-term accounts, GCUA data suggest.

For more information about the poll, use the link.

Earlier this month, results from a Consumer Federation of America (CFA)/Credit Union National Association (CUNA) nationwide survey indicated 8% of respondents plan to spend more on gifts and holiday items, with 41% of respondents saying they would spend less this holiday season. The results, announced Nov. 21, are nearly identical to the two groups' 2010 consumer predictions, when the CFA/CUNA survey found that one in 10 consumers would increase their holiday spending, and 41% at that time said they would cut their holiday spending. To read the News Now article about the survey, use the link.

Also, Black Friday sales on the day after Thanksgiving increased 6.6% from a year ago, according to ShopperTrak--a retail data and consulting firm that relies on equipment placed in stores to measure traffic (News Now Nov. 29).

CMG MI details why PMI bankruptcy wont hit its operations

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SAN FRANCISCO (12/1/11)--CMG Mortgage Insurance Company's (CMG MI) leadership Wednesday said the company's operations remain strong, and its focus on credit unions' mortgage insurance needs is unaffected by the Nov. 23 announcement that The PMI Group Inc. (TPG), had filed for Chapter 11 federal bankruptcy protection.

PMI Mortgage Insurance Co. (PMI), a subsidiary of TPG, currently owns a 50% stake in CMG MI, with the other 50% owned by Madison, Wis.-based CUNA Mutual Group. CMG MI is a stand-alone, incorporated entity with its own capital and dedicated staffing from its shareholders.

Kim Shaul, CMG MI senior vice president and general manager, said the bankruptcy filing affects only PMI's holding company and will have no impact on CMG MI's operations or claims-paying activities.

Key factors supporting CMG MI's solid financial position are:

  • As of Sept. 30, the last available reporting period, CMG MI's risk-to-capital ratio was roughly 20:1. It had the industry's lowest portfolio delinquency ratio at 5.5%.                             
  • As of that date, CMG MI's liquidity-to-reserves ratio was strong, with claims-paying resources backed by cash and readily marketable securities of $330 million. This liquidity compares favorably to the company's $168 million in loss reserves for claims at the end of third quarter, CMG MI said.
  • As a separate legal entity, CMG MI's financial strength ratings--BBB (adequate protection parameters) from Standard & Poor's (S&P) and BBB (satisfactory) from Fitch Ratings--are based primarily on CMG MI's own capital, operations performance and loss mitigation, and capital support, staffing, and operational arrangements with its parents, CUNA Mutual Insurance Society and PMI. CMG MI's S&P rating was reaffirmed in September. The Fitch rating was affirmed in July.
  • CUNA Mutual Insurance Society's statutory capital grew to $1.4 billion through September, up $40.6 million from year-end 2010. The company holds an "A" (excellent) A.M. Best financial strength rating with a Stable Outlook.
TPG's federal bankruptcy filing followed a Nov. 22 action by the Superior Court of Arizona to uphold the Arizona Department of Insurance's interim control of PMI pending a hearing on the appointment of a receiver over PMI. CMG MI executive management continues to work with the Arizona Department of Insurance to ensure appropriate support for its operations, the company said.

RACOM members OK merger into DuTrac

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DYERSVILLE and DUBUQUE, Iowa (12/1/11)--The membership of $16 million asset RACOM Community CU, Dyersville, Iowa, evening overwhelming voted Tuesday to approve a proposed merger between RACOM and $501 million asset DuTrac Community CU, Dubuque.

DuTrac Community CU will be the continuing credit union, with Andrew Hawkinson serving as president/CEO.

The newly combined organization, with $517 million in assets, will serve more than 42,000 members with 11 branches throughout a 14-county region bordering the Mississippi River and serving the tri-state region of Iowa, Illinois and Wisconsin.

The merger vote took place after preliminary approval from the Iowa Division of Credit Unions and the National Credit Union Administration.

The merger is to be completed by year end.

The RACOM name will remain on the Dyersville location for the next two years with signage incorporating the look and feel of the DuTrac logo along with the words "A division of DuTrac Community CU."

VolCorp members vote to merge with W.Va. Corporate

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NASHVILLE, Tenn. (12/1/11)--Members of Volunteer Corporate CU (VolCorp) in Nashville, Tenn., approved a proposed merger with West Virginia Corporate FCU in Parkersburg, W.Va., at a special meeting held Nov. 22.

More than 50% of VolCorp's members voted, with 94% of those voting supporting the merger, said VolCorp.

Earlier in November, the Tennessee Department of Financial Institutions approved the merger, subject to a favorable review by the National Credit Union Administration (NCUA) and votes of the membership of both credit unions. Both are expected to take place in January.

"The consolidated entity will continue to meet all of NCUA's regulatory requirements, providing for a stronger corporate going forward," said Rick Veach, VolCorp president/CEO.

CU is fully independent of airlines bankrupt parent

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FORT WORTH, Texas (12/1/11)--Although its primary sponsor has filed for Chapter 11 bankruptcy, American Airlines FCU, with $5.9 billion in assets, is reassuring its members that the credit union is "well capitalized and financially strong."

The parent company of American Airlines, AMR Corp., followed a strategy that its rivals took earlier in the decade: filing for bankruptcy to rid itself of debt and reduce labor costs (New York Times Nov. 30).

"While we share the same name, and AMR is our largest partner company, our financial statements and decision-making capacity remain independent," American Airlines FCU said in a message on its website.

The credit union said it has "a very diversified membership" due to its "once-a-member, always-a-member" policy.

Less than one third of the credit union's members are AMR employees, according to the credit union.

"We stand ready to assist our members with their individual financial situations," American Airlines FCU said on its website.

AMR competitors Delta Air Lines and United Air Lines have emerged from bankruptcy more profitable after reorganizations, said the The New York Times.

CU Strategic Planning launches Native division

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KAMUELA, Hawaii. (12/1/11)--CU Strategic Planning, a provider of U.S. Treasury Community Development Financial Institution grant writing services to credit unions, has launched a new division to assist credit unions that serve Native American populations, including Native Americans, Native Alaskans and Native Hawaiians.

Alycia Juvik will lead the division as director of native initiatives. Juvik, also sits on the advisory board for the Native Hawaiian Revolving Loan Fund for Office for Hawaiian Affairs. She joins CU Strategic Planning from her position as community development director for Hawaii FCU, Honolulu.

Juvik's responsibilities will be divided between outreach to credit unions serving Native populations, and coordination of an effort with the National Federation of Community Development Credit Unions to continue increasing the number of CDFI awards and developmental services that credit unions provide to distressed communities and members in need, CU Strategic Planning said.

CU Cherry Blossom Run lottery begins today

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WASHINGTON (12/1/11)--The registration lottery for the 2012 Credit Union Cherry Blossom 10 Mile and 5K Run-Walk begins today at 10 a.m. ET

The lottery runs through11:59 p.m. Dec. 9 and guarantees participants a starting time in the event.

The 40th running of the Credit Union Cherry Blossom run will take place on April 1.

Entrants will be selected electronically for the Cherry Blossom run after the lottery registration period closes. The results of the selection process for both events will be posted on the event website Dec. 13.

"We first implemented a lottery system for the 2010 event, and found it to be a very fair and straightforward way to deal with the fact that more people want to participate in our races than the streets of Washington, D.C., can accommodate," said Race Director Phil Stewart.

Last year, about 30,000 runners applied for spots on the starting line.

The organizers announced a new policy that will guarantee entries to runners who applied but were not selected to participate via the lottery in 2010 and 2011. Eligible runners have been notified and have until Nov. 30 to register. In addition, "streakers"--individuals who completed the race 10 or more times--are eligible for guaranteed entries.

Runners who raise $500 or more for the Children's Miracle Network Hospitals via Credit Unions for Kids, the official event charity, also can secure a guaranteed spot on the starting line.

The Credit Union National Association, credit unions and affiliated organizations are sponsors of the Credit Union Cherry Blossom Run, which has raised over $5 million in 10 years for Children's Miracle Network Hospitals. If an organization sponsors the event, it can obtain guaranteed race entry slots at the prevailing rate, bypassing the lottery system. To become a sponsor, visit

Also new this year: An all-time searchable database containing information about every finisher in the race since 1973, and the addition of two "social" runners, who will share their pre-race training experiences on Facebook and Twitter.

The race staging area will be on the Washington Monument grounds, and the course will trace its traditional route past Washington's cherry blossom trees. The race headquarters hotel is located at the Westin Washington DC City Center Hotel.

This year's event takes place on the second weekend of the National Cherry Blossom Festival, a five-week celebration of sporting and cultural events that commemorates the blossoming of the trees donated to the U.S. by Japan in the early 20th century.

Scam targets direct deposit ACH transactions

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MADISON, Wis. (12/1/11)--A phishing expedition for personal information and aimed at direct deposit and automated clearinghouse transactions is hitting company e-mail in-boxes.

The Credit Union National Association became aware of the attempts to reel employees' personal account information when a number of employees received an e-mail entitled "Your Direct Deposit payment ID 016698606828 was declined." The e-mail purports to be from NACHA--The Electronic Payments Association.

The message is addressed to "Attn: Financial Manager" and notifies the recipients that their latest Direct Deposit via ACH transaction was rejected due to out-of-date Direct Deposit software. The message includes a different "transaction" number than the number in the subject line. The message offers a link, which seeks more information. It also adds that recipients should refer to their financial institution to obtain an updated version of the software.

CUNA employees were advised to not open the e-mail and not to provide personal account information--standard advice given by credit unions when members report phishing attempts.

NACHA has been targeted by a number of malicious phishing attempts this year. Dynamoo's Blog reported Nov. 14 on a similar phishing attempt making the rounds and related to Direct Deposit accounts.  A link in that message went to an Internet address in Australia.

NACHA also was targeted by phishing e-mails in September related to ACH transactions, according to (Sept. 8). Recipients were told their ACH transaction or wire transaction had been cancelled by another financial institution.

Protect Your ID Week efforts reached 21000 consumers

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WASHINGTON (12/1/11)--The national Protect Your Identity Week, held Oct. 16-22, reached more than 21,000 consumers with identity theft protection education, said the week's primary co-hosts  National Foundation for Credit Counseling (NFCC), National Sheriffs' Association and National Association of Triads.

Among the campaign's supporting organizations was the Credit Union National Association (CUNA). Many credit unions observed the week with special events, often offering events where consumers could shred documents to prevent theft of their personal information as well as informational materials.

Here are the highlights:

  • Organizations, including credit unions, held 87 events across the country;
  • Consumers shredded more than 700 tons of personal documents with Cintas, a document management company that provided free shredding to participants;
  • Nearly 1,000 unused cell phones were collected and sent to 911 Cell Phone Bank, which will refurbish and distribute them back into communities through law enforcement. The phones will go to those most at risk for identity theft, such as senior citizens and abuse victims.
This year's campaign theme was Child Identity Theft. ID theft protection expert AllClear ID was the presenting sponsor and provided hosts and materials for events to educate consumers about protecting children from identity theft.

All Clear ID and Cintas also hosted an educational contest on Facebook where parents shared their dreams for their children--dreams that could be deterred by child identity theft.  In addition to providing ID-theft prevention education, the contest awarded the winner  a $5,000 savings bond.

NFCC said its identity theft site,, will remain live throughout the year as a resource for consumers. The site contains ID theft prevention tips, instructions for victims, an active blog hosted by AllClear ID, and an identity theft risk-assessment quiz so consumers can test their ID theft knowledge.

In addition to CUNA, the campaign was supported by AFSA Education Foundation, American Bankers Association Education Foundation, American Payroll Association, Consumer Action, Consumer Data Industry Association, Consumer Federation of America, Council of Better Business Bureaus, Federal Reserve Board, Federal Trade Commission, Foundation for Financial Planning, Identity Theft Assistance Center, Identity Theft Resource Center, Jump$tart Coalition, Junior Achievement USA, National Crime Prevention Council,  National Education Association Member Benefits, Office of the Comptroller of the Currency and U.S. Social Security Administration.

"While consumers work hard to build good credit, criminals are also working hard to steal personal information and use it to their advantage," said Gail Cunningham, NFCC spokesperson. "With the holidays approaching, consumers should stay alert to the latest protection tips in order to guard against this ever-present crime."

CU System briefs (11/29/2011)

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  • ARLINGTON, Wash. (11/30/11)--Mark Morrison has been named to succeed retiring MountainCrest CU President/CEO Bob Schumacher. Morrison served as executive vice president/chief operations officer and has been in the position of CEO since Sept. 1. He will formally assume the position president/CEO title when Schumacher retires Dec. 14. Morrison began his career in 1980 at Safeway CU (Qualstar CU). He was president/CEO of Educational Community CU, which merged into MountainCrest. He also held executive positions at King County CU (Prevail CU), and Seattle Telco CU (Watermark CU). Schumacher served in the Arlington, Wash.-based credit union's senior management for 15 years, the past nine years as CEO. His 34-year credit union career began with the CUNA & Affiliates (now the Credit Union National Association) in 1977. He also worked for the Washington and Florida Credit Union Leagues, their service corporations, and a five credit union mortgage credit union service organization. Schumacher also served on two projects in the Philippines for the World Council of Credit Unions …
  • SEATTLE (11/30/11)--John Annaloro, CEO of the Northwest Credit Union Association, presented the first check to honor retiring Arlington, Wash.-based MountainCrest CU President/CEO Bob Schumacher, to National Credit Union Foundation Chair Gary Oakland. Schumacher is retiring Dec. 14 after a career that includes work at two leagues and the Credit Union National Association (see previous brief for details). Gifts made to the foundation in Schumacher's honor will benefit the Development Education program and BizKid$, the Emmy Award-winning television show that teaches money management and entrepreneurship to kids. For more information about making donations in honor of someone, use the link 

  • HONOLULU (11/30/11)--The Hawaii Credit Union League announced the promotion of Elizabeth "Liz" Ott to education and meeting coordination officer, effective Sept. 1, and the hiring of Yolanda Rucker as its administrative assistant, effective Sept. 6.  Ott, who joined the league two years ago as administrative assistant, is responsible for coordinating education and training opportunities including the annual convention. Rucker, who moved from California to Hawaii in August, is responsible for maintaining the league's database and assisting different league divisions in clerical assignments …
  • FRANKFORT, Ky. (11/30/11)--Gary Wallace, president of Frankfort, Ky.-based Commonwealth CU, announced he will retire after 35 years with the credit union on Dec. 31, according to the Kentucky Credit Union League (By The Way Nov. 29). He was hired as the credit union's manager in 1976, when it had $2.8 million in assets, 5,900 members, and six employees. Today it has more than $909 million in assets, more than 82,800 members, and 250 employees. Before his credit union career, Wallace managed the Frankfort Credit Bureau for 10 years, a small loan company for five years and was credit manager at Goodyear Tire and Rubber Co. for five years. He served 10 years on the state's Department of Financial Institutions Board. Karen Harbin, who has been with the credit union since 1986, will succeed Wallace as president/CEO on Jan.  …

CUNA analyzes consumer debt for ICNNI

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NEW YORK (11/30/11)--Declines in credit card debt and in the number of open credit accounts could mean banks are closing delinquent accounts, Bill Hampel, chief economist at the Credit Union National Association, told CNNMoney Tuesday in his analysis of consumer debt.

The article discussed how third-quarter consumer borrowing declined slightly because consumers continue to whittle away at their debt burden as they confront a troubled economy.

Third-quarter credit card debt dropped to $693 billion--a marginal change from second quarter--while the number of open credit card accounts declined 23%, falling by 6 million from its peak in 2008, CNN said.

Those figures indicate that banks may be shutting down delinquent accounts, Hampel told CNN.

"I suspect that accounts are mostly the behavior of lenders as opposed to the borrowers, because they could not collect anymore," Hampel added.

The article noted that the number of credit inquiries increased, indicating a "strong demand for credit."

To read the article, use the link.

Two Abilene CUs to merge

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ABILENE, Texas (11/30/11)--Two Abilene, Texas, credit unions are merging--with Abilene Teachers FCU absorbing the smaller People's CU of Abilene. Both credit unions have been serving members locally since the 1950s.

The $6.2 million asset People's CU of Abilene initiated the merger with the $322.5 million asset Abilene Teachers FCU, said the latter's President/CEO James Boyd ( Nov. 28).

The board of the 1,500-member People's approached the board of the 35,000-member Abilene Teachers FCU, seeking a merger because a weak economy and increased government regulations made it difficult for the small credit union to survive, Boyd told the paper.

The merger, which began in September, will be finalized today--at which time People's CU of Abilene will close its one branch, Boyd said.

Hannaford ruling centered on steps to mitigate fraud

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PORTLAND, Maine (11/30/11)--An Oct. 20 federal appeals court ruling in the Hannaford Bros. supermarket credit and debit card breach in 2008 centered on whether steps to mitigate fraud from the breach were reasonable.

The U.S. Court of Appeals for the First Circuit in Maine reversed a lower court ruling and allowed consumers to sue the company for out-of-pocket expenses incurred to lessen the impact of the breach.

The unanimous decision includes costs to get new cards from financial institutions and the purchase of identity-theft insurance.

The Maine Supreme Judicial Court had ruled in September 2010 that the victims of the massive data breach could not sue for damages if they didn't suffer financial losses, physical harm or identity theft. It had said that time and effort alone do not constitute an injury for which damages may be recovered under Maine law (News Now Sept. 23).

In its reversal of that decision, the appellate court said: "The question then becomes whether plaintiffs' mitigation steps were reasonable. This is a contextual question, depending on the facts."

The appellate ruling went on to state: "Hannaford did not notify its customers of exactly what data, or whose date was stolen. It reasonably appeared that all Hannaford customers to have used credit or debit cards during the class period were at risk of unauthorized charges. That many banks or issuers immediately issued new cards is evidence of the reasonableness of replacement cards as mitigation."  Among those issuing new cards were credit unions.

Therefore, it was foreseeable that customers--knowing their debit or credit cards "had been compromised and that thousands of dollars of fraudulent charges had resulted from the security breach--would replace their cards to mitigate against misuse of card data," the court added.

The appellate court said it partly affirmed the lower court's decision and partly reversed it. "We affirm the district court's dismissal of all claims other than the plaintiffs' negligence and implied contract claims. We reverse the district court's dismissal of the plaintiffs' negligence and implied contact claims as to certain categories of alleged damages because plaintiffs' reasonably foreseeable mitigation costs constitute a cognizable harm under Maine law."

It is estimated that the card numbers of more than four million people were stolen in the security breach, which occurred between Dec. 7, 2007 and March 10, 2008, when cyber criminals hacked into Hannaford's system and accessed card numbers used at 165 Hannaford supermarkets in the Northeast and 106 Sweetbay stories in Florida (News Now Nov. 21).

At least 1,800 numbers were used for unauthorized fraud. Hannaford discovered the breach in February 2008 and made it public March 17, 2008. Many credit unions were among the financial institutions that reissued new cards to consumers.

Calif. league Fed up consumers are joining CUs

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ONTARIO, Calif. (11/30/11)--Credit unions are reaping the benefits of consumer dissatisfaction with big banks and the positive media coverage generated by Bank Transfer Day, according to a recent survey conducted by the California Credit Union League. 

The poll indicates sustained increases in membership and deposits since the Sept. 29 announcement that Bank of America would begin charging a $5 monthly fee for use of its debit card. Although that decision was later rescinded, and Bank Transfer Day--created by a California businesswoman to encourage consumers to move their money on Nov. 5--has passed, consumers are still moving their money to credit unions in record numbers.

The results of the poll were reported in the Tuesday Sacramento Bee on Nov. 29.

The league's survey indicated an estimated 160,408 new members have joined California credit unions between Oct. 1 and mid-November. That averages to 26,735 per week--a 72% increase over the weekly average of about 15,500 for the first nine months of 2011.

Deposits at California credit unions also have increased an estimated $317,122,662 during the same period. That averages $52.8 million in new deposits per week, as compared with the weekly average of about $30.7 million for the first nine months of the year.

"Consumers continue to make a statement about their frustration with big banks by taking their financial business to a credit union, where fees are lower and service is better,"  said  said Diana Dykstra, president/CEO of the league. "We are encouraged to see that the peak levels of increases in membership and deposits we saw in October, a result of heightened awareness about credit unions, have continued throughout November.

"Word continues to spread about the benefits credit unions provide for consumers and small businesses," added Dykstra. "We'll know over the coming months whether the momentum from frustration with big banks will translate into continued increases in membership and deposits."

NEFE survey Six in 10 wont use holiday budget

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FARMERS BRANCH, Texas (11/30/11)--Most Americans don't have a budget for their holiday shopping, according to a new poll from the National Endowment for Financial Education (NEFE).

NEFE found 63% of Americans surveyed will not set or have a budget for their holiday shopping.

"It's concerning that the majority of shoppers this holiday season will not have a spending plan along with their shopping list," said Ted Beck, president/CEO of NEFE. "Having a gift budget really helps keep spending on track and prevents a situation where emotion takes over."

The NEFE survey also finds many Americans are concerned about how they will pay for their holiday expenses this year.

About 49% of Americans are much/somewhat more concerned about being able to afford holiday expenses this season, compared with their level of confidence five years ago. As a result, 54% of those who have holiday expenses plan to spend less this year than they did five years ago.

"Americans are facing a lot of challenges because of the duration of the current economic climate, so it's no surprise there is heightened concern over how much money people can spend on their loved ones," Beck said.

Sixty-four percent of Americans surveyed anticipate gifts to be their largest expenditure this year, with 60% planning to spend the most on family members. Other expenses include food/groceries for holiday meals (12%), travel (8%), entertainment/entertaining or holiday greeting cards (both 2%), gift wrap/decorating and other (both 1%). Ten percent anticipate not having any holiday-related expenses this year.

Of those anticipating holiday expenses this year, 67% plan to use cash. Forty-five percent will pay with credit, with 32% paying the full balance in the first statement cycle and 13% not paying off the full balance in that period. Seventeen percent expect to pay from savings, 7% will use layaway, 5% will rely on a holiday or year-end bonus, 3% plan on help from relatives or friends, 2% a short-term loan and 5% plan to pay by other means.

Earlier this month, the 2011 Consumer Federation of America (CFA)/Credit Union National Association (CUNA) holiday spending survey found that spending continues to improve following the great recession, but "spending plans are still considerably below where they were before the recession," according to CUNA Chief Economist Bill Hampel (News Now Nov. 22).

This year's CFA/CUNA survey has found that 8% of respondents plan to spend more on gifts and holiday items, with 41% of respondents saying they would spend less this holiday season.

A survey from the Irish League of Credit Unions indicates that 38% of respondents in the nation will borrow to finance gifts (News Now Nov. 28)

Report Online payments see surge to credit cards

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SAN FRANCISCO (11/30/11)--Changing market conditions and new regulations have led to credit cards regaining an increased share of consumers' wallets for online purchases, according to a new study from Javelin Strategy and Research.

In the five-year period from 2011 to 2016, assuming the Dodd-Frank Act's provision regulating debit card interchange stands, Javelin projects total payments volume for the online use of credit cards by U.S. consumers will climb 63%, while the total payments volume for debit cards is expected to rise 2% during that period.

The study indicates a 16% increase in the U.S. online market as retail e-commerce sales continue to rise to $309 billion in 2011 and are forecast to climb further to an estimated $444 billion by 2016.

The Federal Reserve's final interchange rule caps large issuer debit interchange fees at 21 cents, and allows an additional five basis points per transaction may be charged to cover fraud losses (News Now Sept. 14). An extra penny may be charged by financial institutions that are in compliance with Fed-established fraud prevention standards. Card issuers with less than $10 billion in assets--like most credit unions--are exempt from the fee cap. However, the routing and exclusivity rules apply to all debit card issuers regardless of asset size.

Online merchants have plenty to gain from this shift in payments share, according to "Javelin's Fourth Annual Online Retail Payments Forecast 2011-2016: New Regulations Leave Credit Poised for a Comeback." Credit cards typically generate higher consumer spending and greater revenue for merchants. Javelin's study shows that consumers spend more money on a single online transaction using credit cards than when using other payment options. They spend an average $82.10 with a major credit card versus $58.29 using a major debit card.

Javelin's study tracks the growth of online alternative payments methods, prepaid and gift cards for online purchases. The report identifies key drivers creating shifts in online payments' mix and explores the impact of these changes on consumers, payments providers and merchants.

Non-traditional payment methods also will grow in the next five years, according to James Van Dyke, founder and President of Javelin. With a projected $30 billion growth through 2016, online alternative payments will hold a 19% share of online retail payments or a share that is two percentage points below debit's projected share.

"While online alternative payments represent less than one-fifth of e-commerce transactions, these options are well-positioned to benefit from the introduction and adoption of emerging payment environments, such as the mobile channel and social networking," Van Dyke said.

The Credit Union National Association (CUNA) is monitoring merchants for any signs that they are steering consumers away from using debit cards issued by institutions that are not subject to the debit interchange cap, and has developed a website to help consumers and credit unions report any instances of steering. CUNA is also working with regulators to ensure the two-tiered interchange system is followed so the law doesn't produce unintended consequences for consumers and credit unions.

CU System briefs (11/28/2011)

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  • HARRISBURG, Pa. (11/29/11)--An alert member service representative (MSR) at LANCO FCU thwarted an identity theft scam, according to the Pennsylvania Credit Union Association (Life is a Highway Nov. 28). A new member opened an account Wednesday at the $63.3 million asset credit union based in Lancaster, Pa., showing a license with a Lancaster address. The next day the new member visited one of its branches and attempted to cash a check from Comcast for more than $2,000. The MSR questioned the check and told the member she needed to verify funds or place a hold on it. While the MSR was on the phone, the member became agitated and threatened to cash it elsewhere. Later, the same member attempted the same transaction without success at another LANCO branch. The credit union contacted the police and learned the ID was fraudulent and the person whose ID was used is from Philadelphia …
  • SANTA CRUZ, Calif.(11/29/11)--Santa Cruz (Calif.)Community CU announced its board has named Elizabeth "Beth" Carr as its new CEO. Carr brings 23 years of credit union experience, most recently as senior vice president, retail services at Ventura County CU and as president of a wholly owned subsidiary offering insurance, protection packages and car buying services. She also served as vice president, marketing/business development. Santa Cruz Community CU has $87 million in assets, more than 9,500 members and branches in Santa Cruz and Watsonville …
  • ALEXANDRIA, Va. (11/29/11)--During October, CommonWealth One FCU awarded prizes to 21 winners who played its online Turbo Charged Web Hunt Game for a chance to win one of 10 $15 gas cards, five $50 Jiffy Lube Cards, five $50 Visa Gift Cards, and a $500 Visa Gift Card grand prize.  At the beginning of each week, members were given two new clues to look for red car icons on When they located the car's icon, they moused over the icon (which produced a racing car sound effect) to add it to their game piece. There were 10 cars hidden on various pages of the credit union's website. After the game ended, winners were drawn from players who found all 10 cards.  Grand Prize winner was Katherine Russell …

Bank abandons branch lawmakers push for service

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HARRISBURG, Pa. (11/29/11)--Two Pennsylvania lawmakers have written a letter to Wells Fargo, trying to get the bank to reconsider abandoning its full-service branch in Shickshinny, Pa., which was flooded earlier this fall. Local officials say they hope a credit union or other bank can step in to fill a void in financial services in the community.

Well Fargo's branch is slated for the wrecking ball after being severely damaged in the Sept. 8-9 Tropical Storm Lee flooding, the fourth time in eight years the branch has been flooded, said the Republican Herald (Nov. 25). The bank told the newspaper that the nearly 100-year-old  building was under  more than seven and a half feet of water from the storm and rebuilding would be too costly.

Instead, the bank plans to replace the building with a park and an ATM.  That didn't sit well with local residents, and state Sen. Lisa Baker (R-Lehman Township) and state Rep. Karen Boback (R-Harvey's Lake) have written a letter to the president of Wells Fargo's Pennsylvania, asking the bank to reconsider and saying it is the only financial institution in the community.

Borough Mayor Beverly Moore told the newspaper that he bank's attitude shows it doesn't care about the community.  A lot of people used the bank because of where it was. The bank's nearest branch is 12 miles away in Plymouth, and some residents would have to go in the opposite direction from where they work to go to the bank. She said she hopes another bank or credit union will step in.

The Pennsylvania Credit Union Association noted in its newsletter, Life is a Highway (Nov. 28), that the nearest credit union is Vantage Trust FCU, which is headquartered in Wilkes-Barre. It has a branch in Nanticoke and serves the entire county of Luzerne.

Three nominations received for CUNA Board elections

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MADISON, Wis. (11/29/11)--The Credit Union National Association (CUNA) has received three nominations for the CUNA Board elections, all from incumbents.

Nominations received so far are from:

  • Pete Dzuris, Northland Area FCU, Oscoda, Mich., for a seat in District 4, Class B;
  • Brett Martinez, Redwood CU, Santa Rosa, Calif., for District 6, Class C; and
  • Winona Nava, Guadalupe CU, Santa Fe, N.M., District 5, Class A.
Deadline for nominations is Dec. 16.

CUs holiday efforts continue to fight hunger (11/28/2011)

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MADISON, Wis.  (11/29/11)--The national day of giving thanks and gorging is over. Thanks to many credit unions' efforts some people unable to get a decent meal or get home for the holidays were able to celebrate the holiday with food, and food pantries' shelves were replenished.

Here are a few examples of what credit unions did to help.

  • Staff from Great Lakes CU, North Chicago, hosted its "Giving Dinner" in
    Click to view larger image Employees and family members of Great Lakes CU, North Chicago, served a free "Giving Dinner" Nov. 20 at the Greenbelt Cultural Center  to about 300 low-income and homeless individuals and families in the area. (Photo provided by Great Lakes CU)
    partnership with the Lake County Forest Preserve District at the Greenbelt Cultural Center in North Chicago, Ill. The free holiday buffet fed about 300 low-income and homeless individuals in the area who were encouraged to attend the event by local missions and shelters. Live entertainment, games and storytelling for kids, and singing performances were among the highlights at the dinner. Great Lakes CU members and staff also donated coats, hats and warm clothing, which were distributed to individuals and families in need as part of the credit union's "Warmth Drive."
  • Belvoir FCU, Woodbridge, Va., sponsored and provided a catered Thanksgiving dinner Thursday for 70 soldiers who were unable to go home during the holidays on Fort Belvoir. Employees and their families arrived Thanksgiving evening to serve the traditional holiday dinner: turkey, ham, mashed potatoes, stuffing, vegetables, macaroni and cheese, rolls, and assorted desserts.
  • Postal CU (PCU), Woodbury, Minn., donated $6,000 for Thanksgiving to local food shelves in the communities it serves through the PCU Community Foundation. Food shelves in Eagan, Hugo, North St. Paul, West St. Paul and Woodbury each received $1,000.  Also, the credit union asked its members to vote online for food shelves in the state through Nov. 30. The winning food shelf will receive an additional $1,000.  "We hear from food shelf coordinators and volunteers that need is greater than ever and they often struggle to keep up with the demand," said PCU President Russ Plunkett. "We thought Thanksgiving would be a good time to express our thanks to our members for their ongoing support of important causes, and ask for help in restocking local food shelves during this busy holiday season."
  • The Maine Credit Unions' Campaign for Ending Hunger  will be the recipient of funds raised this week through an online auction of books signed by Maine's leading authors as part of the first annual Online Literary Auction to Fight Hunger. Authors have signed 47 books for the event, coordinated by Islandport Press, a Maine publisher, said the Maine Credit Union League (Weekly Update Nov. 25). They include Richard Russo, Tess Gerritsen, Chris Van Dusen, Gerry Boyle, Colin Woodard and Paul Doiron. The first book to be auctioned Monday was Russo's That Old Cape Magic. For more detail, go to Islandport's website
  • Board members and staff at Luso American CU, Peabody, Mass., volunteered
    Staff and board members of Luso American CU served food at the Haven From Hunger in Peabody, Mass., last week. They included, from left: Luciano Dinis, Maria Melo, Carlos Pinto, and Alfonso Barcamonte. (Photo provided by LUSO American CU)
    their services at Haven From Hunger the Monday before Thanksgiving.  "In difficult times like these, it is good to be committed to supporting local non-profits, and we are passionate about the work that Haven From Hunger does for our community," said Luso American Manager Ivone Silva. "We think this is one small way we can reinforce the credit union philosophy of people helping people." The Haven From Hunger is a privately funded non-profit organization that  provides a nightly meal to anyone struggling financially. It is now the largest food pantry on the North Shore of Massachusetts, serving many communities.
  • Gulf Winds FCU, Pensacola, Fla., presented $25,000 to help non-profit food bank
    Click to view larger image Gulf Winds FCU, Pensacola, Fla., presented $25,000 to help MANNA feed the hungry on Nov. 23 at its "Fill the Mayflower" Holiday Food Drive.  From left are Brent Lane of Cat Country 98.7 and president of MANNA; Jay Bradshaw of Coastal Moving & Storage/ Pensacola Moving & Storage and MANNA board member; The Cat Country Cat;  Fred Houston, board chairman, Gulf Winds: DeDe Flounlacker, executive director, MANNA; Chris Rutledge, president/CEO, Gulf Winds; and Gulf Winds Board members Larry Maltby, Ozzie Oswald, Shelly Fountain and Gerald Eady.  (Photo provided by Gulf Winds FCU)
    MANNA feed the hungry at its "Fill the Mayflower" Holiday Food Drive on Nov. 23. "We are experiencing unprecedented demands in service and have had a food shortage," said MANNA Executive Director DeDe Flounlacker. "This generous donation by Gulf Winds literally had our team jumping up and down with excitement because we know the impact it will have on our efforts and the communities we serve." Gulf Winds President/CEO Chris Rutledge noted that "MANNA is doing important work in our community and we wanted to help" it continue its mission.
  • Credit unions across Texas took hunger on in October, celebrating International Credit Union Day on Oct. 20 by "Collaborating to Fight Hunger" with the Texas Credit Union League ( Nov. 22). Early reports indicated credit unions raised thousands of pounds of food for food banks and tens of thousands of dollars to help local hunger organizations provide meals. The Pineywoods Chapter of Credit Unions collected 1,500 pounds of food to help East Texas families, while the Fort Worth Chapter presented the Tarrant Area Food Bank with funding and 650 pounds of food.  The El Paso Chapter showed up with a truck bed full of food and  $500 for the Rescue Mission.

PMIs bankruptcy has no impact on CMG MI daily ops

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MADISON, Wis. (11/29/11)--Mortgage insurer PMI Group Inc.'s (PMI) bankruptcy will have no effect on CUNA Mutual Group's Mortgage Insurance (CMG MI), which was created by PMI and CUNA Mutual in 1993, CUNA Mutual said.

"The bankruptcy filing affects the holding company for PMI," Kim Shaul, senior vice president and general manager, CMG MI, told News Now. "CMG Mortgage Insurance Company (CMG MI) is a joint venture between PMI's mortgage insurance company and CUNA Mutual. The filing will have no impact on the day-to-day operations of CMG MI."

PMI filed for Chapter 11 bankruptcy Wednesday after an Arizona judge rejected PMI's attempt to overturn the October seizure of its mortgage-insurance unit by state regulators (Huffington Post Nov. 23).

PMI lost $412.1 million from continuing operations between January and June, according to a regulatory filing. Because Arizona locked employees out of their offices following last month's seizure, PMI said it could not prepare its third-quarter financial report (Reuters Nov. 10).

CMG MI responded Oct. 21 to the Maricopa County, Ariz., superior court order directing the Arizona Director of the Department of Insurance to take possession and control of PMI (News Now Oct. 27).

PMI currently owns a 50% stake in CMG MI, the other 50% being owned by Madison, Wis.-based CUNA Mutual.

CMG MI's executive leadership emphasized that the company's operations remain strong and that the company's focus on credit unions' mortgage insurance needs is unaffected. CMG MI is a stand-alone, corporate entity with its own capital and dedicated staffing from its shareholders.

CUs holiday efforts continue to fight hunger

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MADISON, Wis.  (11/29/11)--The national day of giving thanks and gorging is over. Thanks to many credit unions' efforts some people unable to get a decent meal or get home for the holidays were able to celebrate the holiday with food, and food pantries' shelves were replenished.

Here are a few examples of what credit unions did to help.

  • Staff from Great Lakes CU, located in North Chicago, Ill., hosted the credit union's "Giving Dinner" in
    Click to view larger image Employees and family members of Great Lakes CU, North Chicago, served a free "Giving Dinner" Nov. 20 at the Greenbelt Cultural Center  to about 300 low-income and homeless individuals and families in the area. (Photo provided by Great Lakes CU)
    partnership with the Lake County Forest Preserve District at the Greenbelt Cultural Center in North Chicago, Ill. The free holiday buffet fed about 300 low-income and homeless individuals in the area who were encouraged to attend the event by local missions and shelters. Live entertainment, games and storytelling for kids, and singing performances were among the highlights at the dinner. Great Lakes CU members and staff also donated coats, hats and other warm clothing, which the credit union distributed to individuals and families in need as part of the credit union's "Warmth Drive."
  • Belvoir FCU, Woodbridge, Va., sponsored and provided a catered Thanksgiving dinner Thursday for 70 soldiers who were unable to go home during the holidays on Fort Belvoir. Employees and their families arrived Thanksgiving evening to serve the traditional holiday dinner: turkey, ham, mashed potatoes, stuffing, vegetables, macaroni and cheese, rolls, and assorted desserts.
  • Postal CU (PCU), Woodbury, Minn., donated $6,000 for Thanksgiving to local food shelves in the communities it serves through the PCU Community Foundation. Food shelves in Eagan, Hugo, North St. Paul, West St. Paul and Woodbury each received $1,000.  Also, the credit union asked its members to vote online for food shelves in the state through Nov. 30. The winning food shelf will receive an additional $1,000.  "We hear from food shelf coordinators and volunteers that need is greater than ever and they often struggle to keep up with the demand," said PCU President Russ Plunkett. "We thought Thanksgiving would be a good time to express our thanks to our members for their ongoing support of important causes, and ask for help in restocking local food shelves during this busy holiday season."
  • The Maine Credit Unions' Campaign for Ending Hunger  will be the recipient of funds raised this week through an online auction of books signed by Maine's leading authors as part of the first annual Online Literary Auction to Fight Hunger. Authors have signed 47 books for the event, coordinated by Islandport Press, a Maine publisher, said the Maine Credit Union League (Weekly Update Nov. 25). They include Richard Russo, Tess Gerritsen, Chris Van Dusen, Gerry Boyle, Colin Woodard and Paul Doiron. The first book to be auctioned Monday was Russo's That Old Cape Magic. For more detail, go to Islandport's website.
  • Board members and staff at Luso American CU, Peabody, Mass., volunteered
    Staff and board members of Luso American CU served food at the Haven From Hunger in Peabody, Mass., last week. They included, from left: Luciano Dinis, Maria Melo, Carlos Pinto, and Alfonso Barcamonte. (Photo provided by LUSO American CU)
    their services at Haven From Hunger the Monday before Thanksgiving.  "In difficult times like these, it is good to be committed to supporting local non-profits, and we are passionate about the work that Haven From Hunger does for our community," said Luso American Manager Ivone Silva. "We think this is one small way we can reinforce the credit union philosophy of people helping people." The Haven From Hunger is a privately funded non-profit organization that  provides a nightly meal to anyone struggling financially. It is now the largest food pantry on the North Shore of Massachusetts, serving many communities.
  • Gulf Winds FCU, Pensacola, Fla., presented $25,000 to help non-profit food bank
    Click to view larger image Gulf Winds FCU presented $25,000 to help MANNA feed the hungry Nov. 23 at its "Fill the Mayflower" Holiday Food Drive.  From left: Brent Lane of Cat Country 98.7 and president of MANNA; Jay Bradshaw of Coastal Moving & Storage/ Pensacola Moving & Storage and MANNA board member; The Cat Country Cat;  Fred Houston, board chairman, Gulf Winds: DeDe Flounlacker, executive director, MANNA; Chris Rutledge, president/CEO, Gulf Winds; and Gulf Winds Board members Larry Maltby, Ozzie Oswald, Shelly Fountain and Gerald Eady.  (Photo provided by Gulf Winds FCU)
    MANNA feed the hungry at its "Fill the Mayflower" Holiday Food Drive on Nov. 23. "We are experiencing unprecedented demands in service and have had a food shortage," said MANNA Executive Director DeDe Flounlacker. "This generous donation by Gulf Winds literally had our team jumping up and down with excitement because we know the impact it will have on our efforts and the communities we serve." Gulf Winds President/CEO Chris Rutledge noted that "MANNA is doing important work in our community and we wanted to help" it continue its mission.
  • Credit unions across Texas took hunger on in October, celebrating International Credit Union Day on Oct. 20 by "Collaborating to Fight Hunger" with the Texas Credit Union League ( Nov. 22). Early reports indicated credit unions raised thousands of pounds of food for food banks and tens of thousands of dollars to help local hunger organizations provide meals. The Pineywoods Chapter of Credit Unions collected 1,500 pounds of food to help East Texas families, while the Fort Worth Chapter presented the Tarrant Area Food Bank with funding and 650 pounds of food.  The El Paso Chapter showed up with a truck bed full of food and  $500 for the Rescue Mission.

Oregon Community CU goes WILD on sales

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EUGENE, Ore. (11/29/11)--Oregon Community CU, Eugene, Ore., motivated its work force in the third quarter with sales contest that gave everyone employees at all levels of the organization a clear target for success.

The WILD contest was an acronym for goals that every team member could track: worth, income, loans and deposits. The letters represented excellence in company pride, referrals for loans and loan protection products, internal service and dollars--either deposits brought in or expense reduction.

The competition was based on increasing sales of profitable ancillary products. Operations staff had achieved measurable results through sales incentives, but the WILD contest gave the back office an opportunity to get involved.

"We wanted to create an entire organization of sales people," said Breanna Cline, branch manager and WILD contest leader. "We wanted everyone to know that they had a role and the ability to help our team be successful as we pursued our sales goals."

Employees were split into groups that combined the customer-service-driven operations area with the internal-service-driven back office. Teams were assigned an animal-themed name.

The creative team behind the scenes set aggressive but attainable goals for the teams. Management kept their teams focused by monitoring, tracking, and sharing results regularly. Oregon Community CU partnered with its ancillary product vendors, Route 66 and State National, to fund prizes weekly.

Operations staff were rewarded for certain benchmarks. WILD cards were awarded if employees sold a particular product, so it was important to build a connection with the back office staff to earn more referrals.

Employees also built relationships with teammates from other branches--a change that differed from previous contests that measured success by branch. Employees who were usually divided by 10 branch locations in the cities of Eugene, Springfield, and Salem became allies.

Support staff could win "WILD" cards if they recognized a fellow co-worker for outstanding internal service. Both team members would receive a card. If back-office staff shared something that made Oregon Community CU great they would receive a card. This showed Oregon Community CU's employees that "sales" didn't have to be a dirty word, but could simply mean taking pride in the organization.

The chances for success were improved by training back-office employees on the benefits of the products and services, which empowered the staff to become more comfortable selling the credit union's value to others.

Senior management also joined the cause. The executive team was divided among different groups, which spurred involvement from the top down. Tellers regularly received encouragement from the Oregon Community executive team.

Managers from different departments also were divided up throughout the teams. They traced their department's progress while cheering on their "animal." While this was commonplace for branch management, it was new to most back-office managers. It became another opportunity for back-office employees to step out of their comfort zone for their team's best interests.

The WILD contest achieved results. Ancillary product sales increased 25% during the quarter. Non-real estate loans reached $27 million, a 23% increase over previous month, and the highest level year to date.

WILD organizers were so pleased with the results that they extended the contest to mid-September.

Irish league survey Holiday spending will put 1 in 3 into debt

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DUBLIN, Ireland (11/29/11)--Because of holiday spending, roughly one in three people in Ireland will go into debt, according to a new survey conducted by the Irish League of Credit Unions.

Figures from the league indicate that 38% of those surveyed will borrow to finance gifts, food and other seasonal expenses ( and Nov. 21).

Respondents said they would spend an average of $749 during the holidays. For 18% of respondents that figure was between $933 and $1,333. The average spending on "Santa" presents per child is nearly $219.

That level of spending would put 38% of people in debt, with one third saying it would take two to three months for them to get out of debt, and 12% saying they would need four months or more to recover, the league's survey said.

Also, 77% of respondents said they felt better about their financial situation this year than they did last year.

Ireland's survey comes on the heels of the 2011 Consumer Federation of America (CFA)/Credit Union National Association (CUNA) holiday spending survey, which found that spending continues to improve following the great recession, but spending plans are still considerably below where they were before the recession (News Now Nov. 22).

This CFA/CUNA survey announced Nov. 21, indicated 8% of respondents plan to spend more on gifts and holiday items, with 41% of respondents saying they would spend less this holiday season. The results are nearly identical to the 2010 consumer predictions, when the CFA/CUNA survey found that one in 10 consumers would increase their holiday spending, and 41% at that time said they would cut their holiday spending.

To read the News Now article about the CUNA/CFA holiday spending survey, use the link.

Iowa foundation announces 2012 board

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DES MOINES, Iowa (11/29/11)--The Iowa Credit Union Foundation (ICUF) announced three new board members at its annual meeting Nov.15. Board members serve three years.

New ICUF board members include:

  • Jason Norton, vice president of marketing and business development, DuTrac CU, Dubuque;
  • Mike Moroney, CEO, Alliant CU, Dubuque; and
  • Matthew Cervantez, commercial loan officer, Linn Area CU, Cedar Rapids.

Board members are elected by the board of directors. The remainder of the 2012 Iowa Credit Union Foundation board includes:

  • President, Dale Owen, Ascentra CU, Bettendorf;
  • Vice president, Helen Pearce Cedar Falls Community CU, Cedar Falls;
  • Treasurer, Lana Ross Iowa Community Action Association, Des Moines;
  • Secretary, Christina Fernandez-Morrow Lutheran Services in Iowa, Des Moines; and
  • Angela Drury, 1st Gateway CU, Camanche.

Michigan auto dealer thrives with MBLs from CU

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OSCODA, Mich. (11/29/11)--A second-generation Michigan auto dealer is thriving with the help of financing from a local credit union.

A  partnership with Northland Area CU, Oscoda, Mich., has helped Lincoln Truck and SUV grow into  $1.5 million annual business. Lenny Bobick Jr., owner of Lincoln Truck & SUV, stands with office manager Pamela Joslin.
Lincoln Truck and SUV is owned by Lenny Bobick Jr. The property was once the site of a Gulf gas station owned by Bobick's parents. After his father, Leonard Bobick Sr. passed away in 1989, Lenny bought the business from his mother, Josephine. In 2001, Northland Area FCU, Oscoda, Mich., arranged a business line of credit that allowed the younger Bobick to purchase inventory (Michigan Credit Union League Michigan Monitor Nov. 28).

Bobick made renovations and expansions, including the addition of a 3,200-square-foot auto service center that helped strengthen customer service and build the auto dealer's brand. He also bought additional property and added a 30-vehicle display lot. Northland helped finance each new project with member business loans.

"Northland Area FCU has helped our business grow, without a doubt," Bobick told the Michigan Credit Union League . "Northland Area FCU has helped us get access to capital, increase our inventory to meet demand and physically grow. Lincoln Truck and SUV has a solid relationship with Northland going back many years, and their continuing support has been the key to our ability to succeed, even in tough economic times. I think every small business needs three things: Honesty, good products--and a solid credit union in your corner."

Today, Lincoln Truck and SUV is a $1.5 million-a-year business, specializing in pre-owned, affordable vehicles in the $10,000 to $20,000 range.

Lenny Bobick Jr. started Lincoln Truck and SUV  by purchasing his father's gas station through a small business loan from Northland Area FCU. (Photos provided by Michigan Credit Union League)
Bobick has made a name for himself by personally finding vehicles for his customers, using his contacts and attending auctions.

"Our credit union is proud to help small businesses in our community at a time when others are saying no," said Don Grant, head of Northland Area FCU's lending department. "We've helped area businesses with over $28 million in loans. Local businesses like Lincoln Truck and SUV are the engines literally driving our local economy and creating jobs. Credit unions like Northland want to do even more to help small businesses and anyone with a good business idea."

Credit unions' small-business lending could potentially grow even more with the right policies, said the Michigan league. The U.S. Senate Banking Committee is considering raising credit unions' MBL cap to 27.5% of assets, up from the current cap of only 12.25%. Increasing the small-business lending cap could potentially pump $13 billion into the economy and create 140,000 new jobs in small businesses without any taxpayer costs, according to the Credit Union National Association (CUNA).

NCUF Members Trust offer Charitable Lead Trust CIF option

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MADISON, Wis. (11/29/11)--In an alliance with MEMBERS Trust Co., FSB, the National Credit Union Foundation (NCUF) has expanded its Community Investment Fund (CIF) options to include a Charitable Lead Trust commonly used by foundations nationwide. 

Through CIF, credit unions can participate in and support the programs and grants that NCUF and the state credit union foundations provide.

With the new Charitable Lead Trust option, NCUF will receive annual payments calculated as a percentage of the market value of the assets held in the trust for three to five years. Unless a donor credit union elects to renew the trust at the end of this payout period, the remaining assets in the trust will be returned to the credit union. 

The first investors in the new Charitable Lead Trust option are GTE FCU in Tampa, Fla., and BECU, Tukwila, Wash.

Earlier this year, NCUF and MEMBERS Trust entered into a strategic alliance to offer two new CIF options--an insured certificate of deposit Custodian Account and a Part 703 compliant Investment Trust. Both options are still available, with $15 million currently invested from credit unions.

Overall, $30 million is invested in the three MEMBERS Trust Co. CIF options, which includes $15 million invested by BECU and GTE FCU in the new Charitable Lead Trust option.

International students celebrate holiday with CU

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SUFFERN, N.Y. (11/28/11)--International students at Rockland Community College, Suffern, N.Y.,  had an opportunity to learn about American customs and share in Thanksgiving traditions at an event sponsored by Palisades FCU, Pearl River, N.Y.

The holiday meal was prepared fresh by students in the college's Hospitality Program using turkeys donated by a local grocery.

"We've been supporting the college for years, and we're delighted to have had the opportunity to help these students representing over 50 countries once again," said Palisades President/CEO Mark Welshoff.

Second man convicted in armored-car guards death

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DETROIT (11/28/11)--A second man was convicted  Tuesday of first-degree murder in the shooting death of an armored-car guard  during a $204,000 holdup at an ATM outside Dearborn FCU (now DFCU Financial) in Detroit in 2001.

Kevin Watson, 41, was convicted  of killing Norman "Anthony" Stephens, 30, who was delivering money to ATMs on Dec. 14, 2001, when six men committed the robbery. Stephens, the father of six, was shot twice and died at the scene.

Witnesses testified that Watson and codefendant Timothy O'Reilly, 37, had shot Stephens. In August 2010, O'Reilly was convicted in the murder and was formally sentenced to life without parole last February. He had faced the death penalty, but the jury could not reach the unanimous agreement required on who pulled the trigger (News Now Feb. 10 and Aug. 27, 2010). O'Reilly's death penalty case was rare, because Michigan was the first state to abolish capital punishment in 1846. However, the penalty can still be imposed in federal trials. 

Watson faces a mandatory life in prison sentence. He is the second of five suspects in the robbery to be convicted of murder. A sixth suspect is deceased (News Now Aug. 27, 2010).

Two mergers announced

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DEEPWATER, N.J. (11/28/11)--Two credit union mergers--one in New Jersey and one in Massachusetts--were recently announced.

Members of the Salem County Federal Employees FCU (SCFEFCU), based in Pennsville, N.J., voted unanimously at special meeting Oct. 26 in favor of a proposed merger with the $74 million asset Deepwater (N.J.) Industries FCU (New Jersey Credit Union Leagues' The Daily Exchange Nov. 23).

The merger was previously approved by the SCFEFCU board. SCFEFCU has $1.5 million in assets.

Also, $28 million asset Fitchburg (Mass.) Municipal Employees FCU, will merge into Webster First CU, a $562 million asset credit union based in Worcester, Mass. ( Nov. 23).

The merger, approved in September by the National Credit Union Administration (NCUA), will be finalized Nov. 30.

Fitchburg Municipal Employees FCU lost $84,503--according to NCUA call reports--during the first three quarters of 2011, the publication said.

U.S. Scottish CUSOs now WOCCU associate members

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MADISON, Wis. (11/28/11)--World Council of Credit Unions' (WOCCU) board of directors has approved membership applications submitted by U.S-based CU Direct Corp., and Scotland-based CUSSCO Ltd. Both are credit union service organizations (CUSOs) owned by credit unions.

"Credit unions worldwide are achieving greater efficiencies, accessing high-level expertise and investing in technology through credit union-owned business associations," said Brian Branch, WOCCU president/CEO. "We are happy to welcome both CU Direct and CUSSCO, not only for the strength they bring their credit union partners, but also their anticipated contributions to World Council's international community."

CU Direct administers the largest auto-lending network for U.S. credit unions and offers a library of products and services to help credit unions advance their lending programs.

CU Direct is the parent company of CUDL, Lending Insights, Lending 360 and CUDL retail brands. It serves more than 950 credit unions and 7,000 dealerships in the U.S. It began as a division of the California and Nevada Credit Union Leagues in 1994 and became an independent entity in 2002.

CUSSCO Ltd. is jointly owned by Capital CU Ltd. in Edinburgh and Scotwest CU in Glasgow, the site of WOCCU's 2011 World Credit Union Conference. Both credit unions have been actively involved in WOCCU for many years.

The WOCCU board approved both membership applications at its meeting earlier this month in Lima, Peru. Representatives from CU Direct and CUSCCO will be recognized formally at the WOCCU 2012 annual general meeting, which will be held with the World Credit Union Conference, July 15-18 in Gdańsk, Poland.

For more information on the conference, use the link.

Holidays bring on latest trend in online scams

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MADISON, Wis. (11/28/11)--While the holiday season is the time of the year for shopping and sharing, it's also the time for online fraud and scams. Shopping and phishing scams, viruses and malware can turn good cheer into frustration with the click of a mouse. Credit unions can help their members avoid becoming victims this holiday season. Education, as always, is the key to prevention.

E-mail scams may include these solicitations:

  • Requests for upfront shipping fees before receiving an unsolicited package;
  • Requests for "charitable contributions" from illegitimate sources;
  • Fake anti-virus software offers ("scareware");
  • Fake social media "contests" and "promotions" for gift cards or free iPads;
  • Holiday "job offers" and travel scams offering free cruises; and
  • Holiday e-cards from unnamed "friends" and relatives.
Many financial-related phishing e-mails are designed to appear oriented as "verification of account information" emails that look like official communications from financial institutions, according to the Texas Credit Union League (Lone Star Leaguer Nov. 22). In the emails, receivers are solicited to "click a link" where they will be prompted to verify their account information, such as name and account number. While most consumers will ignore these e-mails, it only takes one click to make it worthwhile to the fraudster.

As communication evolves, social media platforms are increasingly becoming a target of fraudsters. A recent scam occurred at Southwest Airlines when cybercriminals disguised the scheme as a Facebook post that read, "I love Southwest." Visitors were asked to "repost" the ad on their news feed for "free tickets." But when they clicked, they were asked to take surveys, provide personal information and sign up for free "product" trials. There were no free tickets.

In instances of malware and/or viruses intrusions, some computer owners never know their computers are infected because some virus/malware can avoid virus software detection. Malware is becoming increasingly sophisticated because fraudsters are always working to stay one step ahead of authorities.

Earlier this month, the Federal Bureau of Investigation dismantled an organized cyber network of eastern European criminals who used malware to target banner display advertising. The malware, which infected millions computers worldwide, redirected users to websites that generated at least $14 million in fraudulent advertising fees. The malware was undetectable by virus software such as MacAfee. It would swap legitimate banner ads, such as those that appear on Amazon or Google, with phony ads that directed users to bogus websites soliciting personal information.

Credit unions can advise members to take preventative measure to protect themselves. Takes these steps:

  • Educate employees so they can warn members;
  • Provide advice in newsletters and on websites;
  • Warn members not to follow unsolicited Web links in e-mail messages or on social media platforms;
  • Caution against opening email attachments;
  • Advise members to maintain up-to-date antivirus software; and
  • Explain that they should verify charity authenticity through a trusted contact number.

ICU Foundation awards 22K in third grant round

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NAPERVILLE, Ill. (11/28/11)--The Illinois Credit Union Foundation earlier this month awarded $22,000 to a variety of projects, including Small Credit Union Development (SCUD), Community Service, Marketing and Business Development, and Financial Independence & Revitalization Effort grants.

Total grants awarded by the foundation for the year is nearly $88,000.

SCUD grants this cycle totaled $8,000 and were awarded to four credit unions for computer hardware and software upgrades, a new security system, and other operational needs.

The recipients were:

  • Alton (Ill.) Bell Community CU;
  • Alton & Southern Railroad Employees FCU, East St. Louis;
  • CTA C & M FCU, Chicago; and
  • IBEW Local 146 CU, Decatur.
The foundation also awarded nine Community Service Grants of $500 each. The program is designed to encourage and reward chapter or credit union participation in local community projects. Credit unions and chapters can qualify for grants by hosting, creating or volunteering at an event.

Recipients included:

  • DHCU Community CU, Moline;
  • Imperial CU, Springfield;
  • Landmark CU, Danville; and
  • Members First Community CU, Quincy.
Five chapters--Danville Area, Egyptian, John L. Kelly, Rockford Area and Southern Illinois--also received the $500 grants. Grants awarded will go toward hosting a community shred day, financial education projects (National Endowment for Financial Education and Mad City Money) and holiday projects.

Also, three credit unions received Marketing and Business Development grants that totaled $9,900. Established in 2006, the grants help credit unions with assets of up to $30 million to start or expand outreach efforts. The maximum grant award is $5,000 per credit union per year. Grant requests this round included: a new financial security campaign for seniors, a new logo and website upgrades.

The recipients were:

  • North Side Community FCU, Chicago;
  • Three Rivers Community CU, Mt. Carmel; and
  • Northside L FCU, Chicago.

Churches pulling funds from big banks

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MADISON, Wis. (11/28/11)--The New Bottom Line, a coalition of church congregations, community organizations, and labor unions is coordinating "Move our Money," a campaign to transfer $1 billion from big banks to credit unions and community banks--financial institutions that invest their money back into local communities.

About $55 million had been moved as part of the campaign as of Nov. 23, according to the Move Our Money website.

Roughly 100 leaders from a broad cross section of Christian, Jewish and Muslim congregations pledged to move $100 million to community financial institutions, during a gathering sponsored by PICO National Network, a coalition of more than 1,000 faith-based social justice groups (The Christian Century Nov. 22).

In October, Most Holy Trinity Church and its school in San Jose, Calif., ended a longer-than 20-year relationship with Bank of America, moving its $3 million into a local credit union (News Now Oct. 24).

The New Bottom Line and its partners are introducing resolutions in 50 cities nationwide to divest transfer taxpayer funds to credit unions and community banks.

The Move Our Money campaign is not related to the "Move Your Money" project initiated two years ago by Huffington Post co-founder Arianna Huffington and economist Rob Johnson.

It is also separate from the national "Bank Transfer Day" movement started on Facebook, which encouraged consumers to transfer funds to credit unions from banks on Nov. 5.

The Credit Union National Association reported that 700,000 people joined credit unions nationwide in the month before Bank Transfer Day--more than the 600,000 who joined in all of 2010, The Christian Century said.

IMotley FoolI analysis Fin crisis hit banks harder than CUs

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NEW YORK (11/28/11)--An analysis of the number of failures by financial institution type conducted by The Motley Fool backs up credit unions' argument that credit unions fared better than commercial banks during the 2008 financial crisis and the sluggish economy since.

The Motley Fool looked at commercial banks insured by the Federal Deposit Insurance Corp. (FDIC) and at credit unions insured by the National Credit Union Administration. Its conclusion: "While negatively affected by the crisis, credit unions did not experience the sort of radical departure from their baseline rate that banks did," said the Fool (Nov. 22).

The Motley Fool is a well-known website that offers advice and analysis on money and finances.

It noted that a key narrative of the recent Bank Transfer Day events was "to pit normally sleepy credit unions against the big banking industry. Credit union skeptics are quick to point out the fact that credit unions hardly went unscathed during the 2008 financial crisis, yet credit union advocates argue that their institutions fared better than commercial banks." 

The Fool asked if credit unions' claims were backed by numbers, and concluded they were. In 2008, the rate of commercial bank failures (0.60%) was almost triple that of credit unions (0.23%), said the publication.  In 2010, banks' failure rate increased to 1.86%, nearly  five times the credit union rate of 0.40%.

"While the sluggish economy seems to have also negatively affected credit unions, they experienced nowhere near the surge of failures seen in the commercial banking sector," said the Fool.

The publication noted a similar pattern for "problematic" institutions.

CU System briefs (11/23/2011)

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  • DANVILLE, Pa. (11/28/11)--Danville, Pa., police are crediting an employee of Service 1st FCU with stopping a forgery scheme after the teller notified a Danville woman that the woman's son was making suspicious transactions (The Danville News Nov. 22). Bradley S. Olson, 20, has been charged with 40 counts, including forging 20 checks from his mother, Gloria Olson, 10 counts of theft by deception and 10 counts of receiving stolen property.  Gloria Olson told police her son stole a book of about 25 checks and forged her signature. The checks were drawn on her account at M-C FCU in Danville.  The Service lst teller became suspicious when Bradley Olson allegedly brought in two checks totaling $500. The teller called his mother to ask if the transactions were legitimate and she discovered a checkbook was missing …
  • WOODBURY, Minn. (11/28/11)--Postal CU, based in Woodbury, Minn., is giving away $1,000 a week in cash prizes through the end of 2011 to members who use their debit cards. Each time members use their PCU Cash & Check Card for purchases until Dec. 31, they will earn a chance to win one of the credit union's weekly $1,000 random drawings. Members can earn 100 bonus entries when they make 25 or more purchases a week with the card.  "This debit card promotion is designed to thank and encourage members to use their cards without penalizing them for doing so," said PCU President Russ Plunkett …
  • HARRISBURG, Pa. (11/28/11)--Pennsylvania's credit union leaders met with U.S. Rep. Lou Barletta (center)  (R-Pa.) on Nov. 21 at his Hazleton, Pa., district office, according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Nov. 22). The purpose of the meeting was to familiarize Barletta with credit unions. The group discussed the cost of regulations, small business lending, financial education and payday lending concerns in the area.  Barletta shared his concerns about the economy, the national debt and the district.  Those attending were from Choice One Community FCU, Cross Valley FCU, P.G.&W. Employees FCU, and People's Choice FCU. Christina Mihalik of PCUA also attended.  (Photo provided by the Pennsylvania Credit Union Association) …

Equifax Card debt up new credit lags pre-recession

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ATLANTA (11/23/11)--Although total consumer debt is almost back to the level it was before the recession hit,  the amount of new credit issued is lagging behind the pre-recession levels by 45%, according to a new study from Equifax.

Total consumer debt in October was $2.38 billion, compared with $2.39 billion in October 2006, said the Equifax National Credit Trends Report, a monthly report based on data from more than 585 million consumers and 81 million businesses worldwide.

Bank credit card originations remained strong. The number of new bank credit cards issued from January through August  totaled $514 billion. That compares with $942 billion during the same period in 2006 and represents a 25% increase over that timeframe in 2010, said Equifax. Retail credit card originations, which bottomed out during the period in 2010 at 19.7 million,  rose 7% to 21 million issued for the period this year.

Michale Koukounas, senior vice president of special client services at Equifax,  noted the lending industry is experiencing mixed results, depending on sector. "Bank credit card and auto lending, in particular, have consistently performed strongly this year, providing some ground for optimism, but the severe retraction within home equity lending continues to underscore the level of impact that declining home values are having on the economy."

Other findings:

  • Home equity lending continued to retract.  In 2006-2007, the total number of new home equity lines exceeded the number of total new bank credit card originations. Now it's reversed. Home equity lines opened in January-August 2011 totaled 549,000--the lowest total for that time frame in six years--compared with 2.3 million in that period in 2006.
  • Consumer finance was slow to recover to pre-recession levels. The average consumer finance amount for August 2011 was $2,902--the lowest level in six years--compared with $4,133 in August 2006.
  • Total new auto loans in August were $34.4 billion--about equal to August 2007's $34.5 billion.
  • Student loans originated in January-August remained consistent over the past six years. In 2011, the number of loans totaled 9.5 million--the same as in 2006 and 2009.  The average loan amount decreased during that same time to $3,631 in 2011 from $5,934 in 2006.
  • Subprime borrowers receiving bank-issued credit cards grew dramatically--by 56% during January-August 2011 from the same period in 2010.

Southeast Corporate Town halls see merger support

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TALLAHASEE, Fla., and COLUMBUS, Ohio (11/23/11)--Southeast Corporate FCU, Tallahassee, Fla., announced Monday that member response for its merger with Corporate One, Columbus, Ohio, has been positive, based on a series of town hall meetings.

Eight town halls were held throughout Mississippi, Florida and Alabama, and ended last week in Jacksonville, Fla.

Brad Miller, Southeast Corporate's president/CEO and Lee Butke, president/CEO of Corporate One, presented the vision for the newly combined entity.

The merged organization will have a strong capital position in terms of the ratios and actual dollars. It will be a well-capitalized institution meeting the required permanent leverage ratios today and exceeding all long-term capital ratios under the new rule, Southeast Corporate said.

The merged corporate also will provide for continuity of services for Southeast's members, based on the synergies of the two corporates' products and services and system platforms.

Miller said he was heartened by the level of participation and support evident at meetings. "It's clear that our merger with Corporate One is the best and only remaining option to protect our members' $63 million in capital while preserving the franchise value built over the past 30 years of dedicated service to credit unions," he added.

Butke agreed. "Corporate One is in the best position to help preserve member capital while continuing to provide the same products and services along with additional products not currently offered by Southeast as well as a combined balance sheet of sufficient size to provide much needed liquidity to the system," he said.

"The No. 1 question at the town halls was about our ability to preserve the members' capital,' he added. "What I heard from the attendees is a huge sense of relief that a merger between Southeast Corporate and Corporate One will preserve the members' existing capital, but also provide real value to them for their ownership investment."

Butke and Miller said the merger plan and thorough due diligence process is continuing. "We expect to move through the process as quickly and diligently as possible," said Miller. "We have completed the regional town hall meetings and are now focusing on functions and processes such as system integration and ensuring service continuity to the members. Once all that is completed, we will finalize our merger application to the National Credit Union Administration."

CU System briefs (11/22/2011)

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  • FORT WAYNE, Ind. (11/23/11)--A man arrested for trying to hold up Freedom Financial FCU in Fort Wayne, Ind., Friday morning was a member of the credit union who allegedly  told police he tried to rob it because he was in debt and in danger of losing his house.  Michael Boester, 34, also allegedly said he had banked at the Fort Wayne-based credit union for much of his life and knew employees by name.  He allegedly said he saw the scared look of one teller and started to leave, police said.  The robbery was thwarted when another member saw a man enter, yell "Give me your money" and "Put the money in the bag," and elbowed the robber, knocking him down. The member then followed the fleeing suspect and got a license number of the getaway vehicle.  Boester and Molly Hutmacher, 23, were arrested as they arrived in their driveway.  Hutmacher's two-year-old daughter allegedly was in the van during the robbery, said police (The Journal Gazette Nov. 22) …

  • WILMINGTON, Calif. (11/23/11)--Dignitaries helped Family FCU, a low-income designated community development credit union, launch a remittance corridor with the Federal Reserve and Mexican Consulate on Nov. 12 to provide low cost remittance services for members with family in Mexico . (See News Now Nov. 15 for full story.) From left are Mexican Consul General David Figueroa Ortega; U.S. Rep. Janice Hahn (D-Calif.); Family FCU CEO Lucia Moreno-Linares; National Federation of Community Development Credit Unions West Coast Program Officer Rafael O. Morales; Family FCU Founder Father Luis Valbuena, OMI; Wilmington (Calif.) Honorary Mayor Lupe Lopez; and Federal Reserve Bank Director of FedGlobal ACH Payments Jorge Jimenez. Also attending were representatives from three cajas (credit unions ) in Mexico: Ignacio Macias Mercado from Caja Popular Agustin de Iturbide; Marco Estrada and Jaime Carrillo from Finamigo; and Alejandro Olvera Cano from Caja de la Sierra Gorda. (Photo provided by the National Federation of Community Development Credit Unions) …
  • MERIDEN, Conn. (11/23/11)--The Connecticut Credit Union Charitable Foundation presented donation checks totaling $25,000 to Connecticut Gov. Dannel P. Malloy's Care & Share Holiday Food Drive. The program benefits the Connecticut Food Bank and Foodshare. Food bank reserves in the state are seriously depleted because of a destructive hurricane in August, a severe snowstorm in October, and poor economic conditions, said the foundation.  From left are Tony Emerson, president/CEO of the Credit Union League of Connecticut; Nancy L. Carrington, president/CEO of Connecticut Food Bank; Kelly Fuhlbrigge, league vice president of government relations; Gov. Malloy; Joanne Todd, league board chair and president/CEO, Northeast Family FCU; Gloria J. McAdam, president/CEO, Foodshare; and Paul V. Dorner, foundation chair and chief administrative officer, First Bristol FCU. (Photo provided by the Connecticut Credit Union Charitable Foundation)  …

Consumers CU hosts citizenship workshop

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WAUKEGAN, Ill. (11/23/11)--Consumers CU (CCU), Waukegan, Ill., is hosting a workshop to assist eligible legal applicants in obtaining U.S. citizenship.

The workshop, set for 9 a.m. (CT), Dec. 10, is offered with the New American Initiative Program, North Suburbs Collaborative formed by the Fr. Gary Graf Center, HACES, Hebrew Immigrant Aid Society and Hanul Family Alliance.

"We believe those who've lived our entire lives in the U.S., or have already obtained our citizenship, have a responsibility to assist those coming to this country looking for a better way of life, to do the same," said Sean M. Rathjen, CCU president. "This program gives eligible applicants a step in the right direction by offering the critical tools necessary to achieve their citizenship."

The cost of the citizenship application has risen during the past few years, leaving many eligible legal permanent residents without the opportunity to apply to become citizens, said CCU. It costs $680 to file an application for citizenship, according to the City University of New York, To alleviate this situation and assist eligible legal permanent residents in fulfilling the dream of U.S. citizenship, CCU, with $550 million in assets, offers a Citizenship Loan program.

The loan application is completed after the New Americans Initiative collaborative has determined eligibility for citizenship. The program consists of a loan for the amount of the application fee, to be repaid in 10 monthly installments with minimal fees and a low rate of interest.

Banks adding in new fees to replace debit fee

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MADISON, Wis. (11/23/11)--Thanks to Bank Transfer Day and other consumer backlash against bank fees, big banks have backed down from charging debit card usage fees.  Or have they? Some sources are reporting a boost in other types of fees to make up for lost revenue.

Whatever the banks' new strategy, credit unions continue to make hay of the debit card fee debacle prompted by Bank of America's $5 a month fee to use debit cards. That fee has been rescinded, and other big banks that considered the fees abandoned them.

But as the eighth week begins since BofA unveiled the fee, media reports continued to stream in about credit unions gaining members who moved their accounts from banks to credit unions. Although not as frequent as the reports leading up to Nov. 5th's Bank Transfer Day and the week after, the reports are still going strong in national, regional and local media.

Still, credit unions and consumers should stay alert to new fees from the big banks. Credit unions can continue to promote their own no-fee or lower-fee policies to attract members fed up with high fees.

Just because the banks took certain fees off the table doesn't mean they have consumers' best interests at heart,  John Ulzheimer, credit specialist at, told CNNMoney (Nov. 21). Ultimately, a bank's bottom line comes first, he said, noting financial institutions constantly look for ways to grow revenue through fees, lower deposit rates or higher credit card interest rates. Ulzheimer also told CNNMoney that banks don't care what their customers think about them --so long as the customers  keep using their services. "Banks care when they lose money--that's about it," he said.

Money Magazine reported that despite the mass retreat of banks, they are "still looking to recoup the $7 billion a year they'll lose to new limits on the debit swipe fees that merchants pay" ( Nov. 17).

Banks are having to rejigger their business models," said Richard Barrington of "They'll start charging for things you took granted."

What kinds of fees are banks charging?

  • New or increased checking account maintenance fees. These  "seem to be sticking, so expect more action there," said Money.  For example, Citibank is raising both monthly charges and minimum balances.  US Bank doubled its monthly checking account fees to $2 a month.  The article suggested avoiding monthly checking fees by banking where the consumer's  mortgage is, using direct deposit, or meeting balance minimums in deposit or investment accounts.  But since interest rates on savings are low, it doesn't make sense to put thousands of dollars in a bank just to save $10 a month, said the article.  David Robertson, publisher of The Nilson Report, indicated that switching to another big bank won't help. He suggested trying credit unions or online banks instead. (The article also linked to credit unions' to find fee-free accounts. )
  • Increased replacement card fees. CBS News reported Nov. 15 that many banks are quietly increasing existing fees and creating new ones ( Nov. 16).  For example, BofA now charges $5 to replace a debit card. But, if the customer needs the replacement quickly, it charges $20 to FedExpress it.
  • New fees for wiring funds.  TD Bank, beginning in December, will charge $15 for cash wired to accounts, said CBS.
  • Higher fees for not meeting a new or higher  minimum balance. Some banks are raising the minimum balance required for a checking account. Many are increasing checking fees by $2 to $3 a month.  BofA charges $12 a month for personal checking. It also has a new menu of checking accounts--with fees of $6 to $25 a month--in some states that it plans to roll out to more states in 2012. And, Citigroup is charging $10 a month, and Chase, $12 a month, said CBS.
To avoid fees, consumers can consolidate all their accounts with the same financial institution; move checking and savings accounts to where they have their mortgage loan; and negotiate a free checking account if they are refinancing. And "take a look at credit unions and community banks, which aren't creating and raising fees," CBS News said.

Black Friday Cyber Monday bring out shopping scams

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MADISON, Wis. (11/23/11)--Black Friday is traditionally the biggest shopping day of the year. More recently, the Monday following Thanksgiving has been adopted as Cyber Monday, endorsed by the e-commerce industry as a day of sales and promotions without interfering with the traditional way to shop.

Because credit unions process and store transactions for their members, they are among the first places consumers turn to when they suspect fraudulent activity. As such, credit unions are in an ideal position to provide their members advice on avoiding fraud and how to shop safely.

The National Foundation for Credit Counseling offers five steps credit unions can share with their members before they hit the stores Friday:

  • Beware of special credit card offers. Issuers are tempting consumers by offering incentives such as no-interest balance transfers, extra perks by meeting certain spending levels, and increased cash back in specified categories. However, no deal is a good deal if the consumers can't afford it.  Responsible shoppers will commit to spending no more than what they can repay in full when the bill arrives.
  • Review all existing debt obligations. Consumers should review loans and credit card balances before they head to the stores, so they know what they are already committed to repay.  This reality check may put a temporary damper on the holiday mood, but it's better than digging a deeper financial hole.
  • Create a plan. Consumers should know what they are shopping for, and, most critically, what they plan to spend.
  • Find the best deals at home. Shoppers should compare prices online before heading out to stores. Be aware of time restrictions. Some prices may apply only during certain times throughout the day. Once the actual shopping begins, going directly to the store that has the item at a good price will save time, gas, money and frustration.
  • Limit spending to as few cards as possible. Spreading purchases across multiple cards can trick shoppers into overspending. Holiday shoppers should designate one card for holiday spending, and remove all others from their wallets. This will not only help shoppers stay within their budgets, it will also lessen the damage in case of loss or theft.
For consumers shopping online this holiday season, credit unions can offer their members these tips from the Internet Crime Complaint Center to avoid being victims of cyberfraud:

  • Do not respond to unsolicited (spam) e-mail
  • Do not click on links contained within an unsolicited e-mail.
  • Be cautious of e-mail claiming to contain pictures in attached files, because the files may contain viruses. Only open attachments from known senders. Always run a virus scan on attachment before opening.
  • Avoid filling out forms contained in e-mail messages that ask for personal information.
  • Log on directly to the official website for the business identified in the e-mail, instead of "linking" to it from an unsolicited e-mail. If the e-mail appears to be from the consumer's financial institution, credit card issuer, or other company he or she deal with frequently, statements or official correspondence from the business will provide the proper contact information.
  • Contact the actual business that supposedly sent the e-mail to verify that the e-mail is genuine.
  • If the member is requested to act quickly or there is an "emergency," it may be a scam. Fraudsters create a sense of urgency to get consumers to act impulsively.
  • If the member receives a request for personal information from a business or financial institution, always look up the main contact information for the requesting company on an independent source (phone book, trusted Internet directory or legitimate billing statement) and use that contact information to verify the legitimacy of the request.
  • If a deal looks too good to be true, it probably is.

Tips from Mich.s Financial Counseling Best Practices guide

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LANSING, Mich. (11/23/11)--Michigan credit union financial counselors have shared their best practices and financial counseling program tips in a guide called Financial Counseling Best Practices that is available on the Michigan Credit Union League (MCUL) website.

The guide was compiled by a working group of credit union financial counselors who are members of the MCUL & Affiliates' Financial Education Council. The best practices aim to assist credit unions in forming or improving a formal or informal financial counseling program.

The guide includes program details and the experiences of several Michigan credit unions. The information is geared to credit unions hoping to start a financial counseling program or those wanting to supplement their existing program.

The guide includes:

  • Best practices to establish a financial counseling program;
  • Best practices for training;
  • Best counseling practices for sessions;
  • Reporting results;
  • Other educational opportunities;
  • Advertising; and
  • Credit union financial counseling program examples.   

To determine the need for establishing a financial counseling program, a credit union should talk to its lending department--loan interviewers, underwriters, collection and member-service staff--and survey its members, MCUL said.

Once a need has been identified, a credit union should outline a strategic plan or expected outcome for its budget counseling program. The plan should include statistics on current delinquency, results from other credit unions of similar size and situation, and the desired outcome. A chart of projected savings as result of the program may be added to the plan, the league said.

The biggest challenge to the program for a credit union is identifying the right person to be a budget counselor. Financial counselor roles include advising, instructing and motivating. Counselors must have a clear understanding of money management and the elements of creditworthiness, the guide said.

Consumers need financial guidance but tight credit union budgets often restrict the number of staff able to train. MCUL offers a guided self-study financial counseling training program, and the Credit Union National Association offers a Certified Financial Counselor School. Use the link.

To see the MCUL Financial Counseling Best Practices guide, use the link.

CUNA closed ThursdayFriday no INews NowI

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WASHINGTON and MADISON, Wis. (11/23/11)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association will be closed Thursday and Friday in observance of the Thanksgiving holiday.

News Now will not publish Thursday and Friday, but will resume regular publication on Monday.

National Desjardins fin ed winners unveiled by CUNA

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MADISON, Wis. (11/23/11)--The Credit Union National Association (CUNA) has announced the winners of the 2011 Desjardins Awards for Youth and Adult Financial Education. 

Entries from more than 30 states yielded 10 winners, along with several honorable mentions, in the two categories. 

Honored organizations will be recognized during a reception at CUNA's 2012 Governmental Affairs Conference (GAC), March 18-22 in Washington, D.C.

The awards are named for Alphonse Desjardins, the founder of the North American credit union movement, and honor credit unions for their commitment to youth and adult financial literacy.

"We congratulate this year's winners and honorable mentions for their admirable work educating youth and adults about financial education skills," said Vikki Kinsler, CUNA's program coordinator for the Desjardins Awards. "Credit unions, chapters and leagues from more than 30 states applied for the award, which shows the movement's increasing commitment to this type of service for members."

CUNA added the Desjardins Adult Financial Education Award in 2011 to its Youth Award to recognize credit unions' efforts to teach personal finance concepts and skills to members and nonmembers age 18 and older. The change brings all personal finance education activities under the Desjardins name, including the award for leagues. 

CUNA received 30 entries in the Adult category and 55 entries for the Desjardins Youth Financial Education Award.

"Part of the mission of credit unions is to promote thrift among our members," said Bill Cheney, CUNA president/CEO. "Financial education is a key component of accomplishing this mission--it's good for the members and differentiates credit unions from other financial institutions."

Winners for the Desjardins Youth Financial Education Award include (asterisks indicate repeat winners):

  • A+ FCU*, Austin, Texas;
  • Community CU, Lewiston, Maine;
  • CORE FCU, East Syracuse, N.Y.;
  • Credit Union Association of New York*, Albany, N.Y.; and
  • Service 1st FCU, Danville, Pa.;
Honorable mentions include:

  • Altra FCU*,  Onalaska, Wis.;
  • Arapahoe CU*, Centennial, Colo.;
  • Beach Municipal FCU*, Virginia Beach, Va.;
  • Greater Minnesota CU*, Mora, Minn.;
  • Knoxville TVA Employees CU, Knoxville, Tenn.;
  • Maine Credit Union League*, Portland, Maine;
  • Palmetto Citizens FCU*, Columbia, S.C.;
  • Public Service CU, Romulus, Mich.;
  • Virginia Educators CU*, Newport News, Va.
Winners for the Desjardins Adult Financial Education Award include:

  • CommunityAmerica CU, Kansas City, Mo.;
  • Community CU, Lewiston, Maine;
  • Financial Fitness Greater Austin Credit Union Facilitators,  Austin, Texas;
  • Greater Minnesota CU*, Mora, Minn.; and
  • Latino Community CU, Durham, N.C.
Honorable mentions include:

  • Credit Union 1*, Anchorage, Alaska;
  • Denver (Colo.) Community CU*;
  • Palmetto Citizens FCU,*  Columbia, S.C.;
  • Patelco CU, Pleasanton, Calif.; and
  • Tinker FCU, Oklahoma City, Okla.
In December, PDFs of the winning entries will be available for viewing on CUNA's website.

The winning entries will be on display at CUNA's 2012 GAC.

CU System briefs (11/21/2011)

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  • SAN ANTONIO (11/22/11)--San Antonio-based SACU honored retiring CEO Jeffrey H. Farver Nov. 19 by presenting a $100,000 Jeffrey H. Farver Endowed
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    Scholarship, which will benefit students at Alamo Colleges. The gift represents one of the largest endowed scholarships in operation at the Alamo Colleges Foundation. Farver led the credit union for the past 21 years. Out of town guests for the event included Credit Union National Association President/CEO Bill Cheney; Harriet May, CUNA Board chair and president/CEO of Government Employees CU of El Paso; and Richard Ensweiler, president/CEO of the Texas Credit Union League. From left are: Frank Burk, SACU Board chairman; Jim Eskin of the foundation;  Farver; and Randy Smith of the foundation. (Photo provided by SACU) …
  • ROCHESTER, N.H. (11/22/11)--Rochester, N.H.,-based Holy Rosary CU (HRCU) closed its first home loan in conjunction with The Housing Partnership (THP), a
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    not-for-profit affordable housing developer based in Portsmouth, N.H., on Nov. 3. The property, purchased by the Mercedes family as their first home, is one of five properties acquired and rehabilitated by THP using federal Neighborhood Stabilization Program (NSP) funds provided by the city.  Bill Cormier of Hourihane, Cormier  & Associates approached the credit union to work with THP to offer the homes for sale.  The NSP program is operated by the U.S. Department of Housing and Urban Development and is administered by the New Hampshire Community Development Finance Authority.  From left are: Jack Peduzzi, senior project manager, THP; Marty Chapman, executive director of THP; new homeowners Mr. and Mrs. Felix Mercedes; Cormier; and Julie Coakley, HRCU assistant vice president of lending and business development. (Photo provided by Holy Rosary CU) …
  • FORT WAYNE, Ind. (11/22/11)--An alert member foiled a robbery at Fort Wayne, Ind.-based Freedom Financial FCU by elbowing the suspect and knocking him down. When the unarmed suspect fled, the member followed and obtained the license plate number of the alleged getaway van. Police later arrested Michael Boester, 34, and Molly Hutmacher, 23, for attempted robbery. Hutmacher also faces a charge of neglect of a dependent.  A two-year -old who was in the van with the couple when police arrested them as they arrived home was placed with family. Police lauded the quick-acting member but cautioned residents to consider the consequences before trying to stop a crime in progress  (Associated Press via abclocal.go/com and The Journal Gazette Nov. 19) …

Six CUs on IDetroit Free PressI top workplaces list

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LANSING, Mich. (11/22/11)--Six credit unions have made the Detroit Free Press top workplaces list, according to the Michigan Credit Union League.

The annual ranking honors 100 employers based on a survey that gathers and analyzes employees' opinions on topics such as pay and benefits, working conditions and general direction a company is headed. Workplace Dynamics of Exton, Pa., designed and conducted the survey (Michigan Monitor Nov. 21).

Employee satisfaction, work-life balance and the potential for strong growth are some of the terms being used to describe the workplaces.

Four credit unions were among the 35 top "Midsize" companies selected.  They include:

  • Michigan State University FCU, East Lansing;
  • DFCU Financial CU, Dearborn;
  • Michigan First CU, Lathrup Village;  and
  • Genisys CU, Pontiac.
E&A CU, Port Huron, was among the 40 "Small" companies honored.

Community Choice CU, Farmington Hills, was selected in a new category called "National Standard," which describes 32 companies that did not score high enough to make the top 100 workplaces but met the standards of a national benchmark.

Iowa foundation announces scholarship program

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DES MOINES, Iowa (11/22/11)--The Iowa Credit Union Foundation (ICUF) announced the start of its 2012 Family Involvement Board Scholarship program, which will award $5,750 in scholarships to six Iowa students. Two scholarship programs are available through the program.

The first is a scholarship for high school seniors with a projected graduation date of 2012. That competition will award a total of $3,750. The first-place prize is $1,500; second place is $1,000; third place is $750; and fourth place is $500.

The second program is a post-high school scholarship, which is open to any person who is entering or attending an accredited undergraduate, graduate or vocational program. Two $1,000 scholarships will be awarded in this category.

Applicants must complete an entry form found on the ICUF website and are required to answer a question in 500 words or less. Essay questions try to encourage learning about the credit union movement and its mission.

CUNA Council paper addresses online marketing tactics

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MADISON, Wis. (11/22/11)--With technology at their fingertips virtually all the time, consumers have different expectations about how their financial institutions communicate with them, according to a new white paper from the CUNA Marketing & Business Development Council. 

Simply state, technology has put consumers in control, and they decide when and how they want to be contacted, Mark Arnold explained in "Online Marketing Tactics."

It's up to credit unions to adapt to the new rules by learning their members' preferences and appealing to them in a way that gets their attention.

"Digital media is unfamiliar territory for a lot of credit unions," Arnold writes. "It doesn't change the fact that whatever credit union marketers implement has to support their brand and promote the credit union. Whatever campaign they put together--online or traditional--it should have the three core elements of any campaign: target, offer and message. Making the online strategy what it is--a smaller piece of a much larger puzzle--helps align it with the overall business goals."

The white paper:

  • Shares current technology trends;
  • Examines online marketing elements worth considering;
  • Discusses the essentials of an online marketing strategy;
  • Provides tips on implementing online marketing tactics; and
  • Reinforces the concept that using online marketing tactics has the potential to reach more people and produce better results for less money.

Be a CU Super Saver is 2012 Youth Week theme

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MADISON, Wis. (11/22/11)--Credit union staff and youth nationwide chose "Be a Credit Union Super Saver" as the 2012 theme for National Credit Union Youth Week, which will be celebrated April 22-28.

The "Super Saver" theme draws upon the powers of superheroes that also apply to saving at a credit union, such as plotting a savings plan and acting it out, protecting and monitoring money and drawing upon resources at the credit union in order to be strong savers and smart spenders.

Balcaitis said the superheroes theme can work in multiple ways. "It not only encourages them to be Super Savers, but it can be a great opportunity for credit unions to demonstrate how they are superheroes in their own communities," she said.

In keeping with the Super Saver theme, the 2012 Youth Week poster employs comic book-inspired design and bright primary colors. The poster and related artwork will be available online in January. For updates on Youth Week, credit union staff may sign up for a free e-newsletter.

Harvard students pull BofA accounts move to CU

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CAMBRIDGE, Mass. (11/22/11)--A group of Harvard University students Saturday closed their financial accounts with Bank of America Corp. (BofA) and then opened new ones at Harvard University Employees CU (HUECU) in Cambridge, Mass.

"We were contacted by a group of students from Harvard Divinity School who decided that, in the spirit of Bank Transfer Day, they wanted to divest from Bank of America," Tom Montilli, the credit union's vice president of marketing, told News Now. "They organized a small group of about 12 students and told us the credit union was one of two community institutions it chose [to which they wanted to transfer their funds].

"The students asked to meet with HUECU Saturday morning and talk to us about credit unions," Montilli added. "Afterwards, they went over as a group to BofA to close their accounts, and then came to the credit union to open new ones."

The Harvard students had asked the credit union to stay open until 3 p.m. Saturday to accommodate their account transfers.

The students also sent an open letter to BofA's Cambridge branch to explain their divestment decision and rationale behind it.

"Your company, which controls over two trillion dollars in assets, was deemed too big to fail by the U.S. government, and we agree with this sentiment," the letter reads. "You are too big to fail. Too many people rely on you to exist so that they don't lose their mortgages, their life savings, and their livelihood. For this reason, the American taxpayers supplied your company with billions in government bailout money.

"We expected change for the better," the letter continues. "What we got was business as usual. That year your company yielded billions in profits, and your CEOs pocketed millions of dollars in bonuses. You foreclosed on more mortgages than any other American bank, and did not pay taxes despite a $10 billion profit."

To read the letter, use the link.

Although there is no way HUECU can determine what account openings  occurred directly from the  "divestment day" activities, the credit union has seen the number of checking  accounts opened during the past month grow to three times the amount opened in the same period last year, Montilli said.

Illinois small CUs group begins regional workshops

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NAPERVILLE Ill. (11/22/11)--The Illinois Credit Union League's (ICUL) Small Asset Size (SAS) Advisory Group launched its new "Lunch and Learn" workshop series last week for credit unions with less than  $25 million in assets to help them with compliance, regulatory topics and networking.

Joni Senkpeil, director of small credit union development for the Illinois Credit Union League, leads a Lunch and Learn workshop in Rosemont, Illinois Nov. 17. The workshop series aims to help credit unions with less than $25 million in assets with compliance, regulatory topics and networking. (Photo provided by the Illinois Credit Union League)
The first two workshops were held in Rockford and Rosemont. Four additional meetings are scheduled for western, central and southern Illinois between Nov. 28 and Dec. 2.

"If there's one thing that stands out in our industry, it's the ease in which small credit unions share and learn from each other and the value that comes from this unique quality that our industry possesses," said Joni Senkpeil, ICUL director of small credit union development.

"These meetings represent the first stage of what we hope will be a stepping stone to an ongoing program that will bring our small credit unions together and enhance the environment in which our small credit unions will flourish," she added.

SAS workgroups statewide have four priorities for action:

  • Reduce the regulatory and compliance burden. Small credit unions have identified regulatory compliance as a barrier to running an effective day-to-day operation.  Assistance in this area will include "Hot Topic" multi-chapter events, enhancing and expanding the online small credit union resource center available through the league's website, e-mail updates, and developing a centralized clearinghouse of common vendors.
  • Promote collaboration. Small credit unions will benefit from joining together on products and services, ideas and projects, said the league. The advisory group will help to build partnerships, establish peer networks, provide credit union mentoring, and coordinate a "market place" to catalog the availability of low-cost or no-cost furniture and equipment.
  • Enhance communication. Opening an ongoing dialogue within the small credit union community is essential to the effective implementation of programs. Initiatives, such as small credit union workgroups, "Hot Topics" conference calls, information sharing, and alternate communication methods such as the ICUL's small-credit union listserv will be facilitated.
  • Increase competitiveness. The advisory group believes adopting plans to reach non-members will bring increased unity, growth and stability. SAS credit unions will receive help promoting their Web presence, participating in the Illinois REAL Solutions program, using a marketing toolkit, and strengthening their niche in the marketplace.

Seattle and Portland Ore. plan to move funds to CUs

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MADISON, Wis. (11/22/11)--Seattle and Portland, Ore., are considering moving public funds to credit unions from banks in response to Bank Transfer Day and the Occupy movement.

By a 9-0 vote, the Seattle City Council adopted a 12-part resolution Nov. 14 "to review its banking and investment practices to ensure that public funds are invested in responsible financial institutions that support our community."

The resolution was sponsored by council members Nic Licata and Mike O'Brien, who both announced they were joining credit unions on Bank Transfer Day, according to the Northwest Credit Union Association (Anthem Nov. 15.)

The resolution presents opportunities for partnership on common issues before the state legislature, according to Mark Minickiello, league vice president of legislative affairs.

"The resolution ties the city of Seattle to issues of public funds and member business lending--two issues that credit unions have an interest in," Minickiello told newspaper.

Portland Mayor Sam Adams said Wednesday he would pursue moving some of Portland's public funds to credit unions after being challenged to do so by mayoral candidate and state Rep. Jefferson Smith (D) ( Nov. 21).

Portland has millions of dollars deposited with Wells Fargo, a target of Occupy protesters.

The topic was introduced at a Portland City Council meeting by city resident Todd Olson, who said transferring funds would address the "gross inequity" that led to the Occupy protest in Portland.

Redwood CU awards family 10000 in savings contest

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SANTA ROSA, Calif. (11/22/11)--Team Jaworski is the winner of the $10,000 grand prize in Santa Rosa, Calif.-based Redwood CU's year-long Amazing Savers contest.

Members of the Jaworski family, who saved enough to purchase their first home, captured the $10,000 grand prize in Redwood CU's Amazing Savers' contest. Here, the Jaworskis (center) celebrate the announcement. (Photo provided by Redwood CU)
RCU's Amazing Savers contest followed five teams of RCU members throughout 2011 as they worked closely with financial coaches from the credit union to improve their finances by budgeting, refinancing, reducing debt and investing.

Over the course of the contest, the Jaworski family made the most financial improvements by increasing their savings enough to purchase their first home, start a college fund for their young son, pay off their auto loan and improve their credit score.

All five teams made significant financial transformations throughout the contest, including:

  • Team Campbell improved its cashflow, started an emergency fund, purchased a more economical fuel-efficient vehicle, and improved the family's credit score.
  • Team Flores reduced debt by refinancing its auto loan to a 4.74% annual percentage rate from 7.5%, started a savings plan and improved the family's credit score.
  • Team Lynch reduced her credit card interest rate by 22%, improved her credit score, saved enough money to live independently, and is teaching her students the foundation of good money habits.
  • Team Van Patten saved nearly $400 a month by refinancing its debt and improved its credit score. Mother Sharon is teaching her daughters good money habits for their future.
Runner-up teams were awarded $1,000 each for their hard work and achievements during the contest.

The contestants' financial transformation progress was chronicled online through contestant and coach blogs. The credit union's web site also offered tips, tools and guidance for anyone who wished to improve their finances.

Redwood CU offers free financial coaching to any member seeking to improve their financial situation.

CU System briefs (11/18/2011)

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  • SAN ANTONIO (11/21/11)--Need a recipe for the big bird for your Thanksgiving dinner?  The staff at San Antonio-based Generations FCU released its inaugural ebook, From Our Home to Yours Thanksgiving cookbook. Originally intended to be an internal recipe contest for staff only, it features recipes passed down from generation to generation, said the Texas Credit Union League (LoneStar Nov. 18).  The free e-book can be downloaded from the Generations People Helping People blog. It offers tips for hosting the meal, local football and parade schedules, and a forward by Generations President/CEO Tim F. Haegelin.  The recipe book was so successful, the credit union plans to make it an annual event …
  • INDIANAPOLIS (11/21/11)--Finance Center FCU's new community charter, which was approved recently by the National Credit Union Administration, will double its field of membership, the credit union said in a press release.  The credit union can now serve people who live, worship, work, regularly conduct business, or attend school in the Indianapolis-Carmel, Ind., Metropolitan Statistical Area, which covers 10 counties. The new charter means the credit union can serve nearly 1.8 million consumers in the greater Indianapolis area. "Last year we saved current members over $3.6 million, and we look forward to bringing those benefits to more Hoosier families and businesses," said President/CEO Kevin Ryan …

Appeals court reverses ruling in Hannaford data breach

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PORTLAND, Maine (11/21/11)--A federal appeals court Friday, in a reversal of a lower court ruling, ruled that people impacted by the Hannaford Bros. supermarkets credit and debit card data breach in 2008 can sue the company to recover out-of-pocket expenses made to reduce the impact of the breach.

The unanimous decision includes costs to get new cards from financial institutions and the purchase of identity theft insurance, said local media ( Nov. 18). Details were not available at News Now's press time.

It is estimated that the card numbers of more than four million people were stolen in the security breach, which occurred between Dec. 7, 2007 and March 10, 2008, when cyber criminals hacked into Hannaford's system and accessed card numbers used at 165 Hannaford supermarkets in the Northeast and 106 Sweetbay stories in Florida.

At least 1,800 numbers were used for unauthorized fraud.  Hannaford discovered the breach in February 2008 and made it public March 17, 2008.  Many credit unions were among the financial institutions that reissued new cards to consumers.

The Maine Supreme Judicial Court had ruled in September 2010 that the victims of the massive data breach could not sue for damages if they didn't suffer financial losses, physical harm or identity theft.  It had said that time and effort alone do not constitute an injury for which damages may be recovered under Maine law (News Now Sept. 23).

Maine CU officials are winners on election day

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PORTLAND, Maine (11/21/11)--Two Maine credit union officials won political races on the Nov. 8 election day in the state, according to the Maine Credit Union League.

Ray Wallace, who serves on the su­pervisory committee at Maine Highlands FCU, Dexter, won a special election to fill the vacant State House seat in District 24. Wallace becomes the fifth credit union volunteer currently serving in the 125th Maine Legislature (Weekly Update Nov. 18).

"We congratu­late Ray on his victory and look forward to having another member in the legislature who has a unique understanding and insight of credit unions," said Maine league President John Murphy.

Dan Emery, marketing specialist at Maine State CU, Augusta, won his first political contest when he was elected to an at-large seat on the Augusta City Council.

"We support and en­courage our employees to be involved in community and public service," said Normand R. Dubreuil, Maine State president/CEO. "Dan's victory reflects well on the credit union and our commitment to the credit union philosophy of 'people helping people'," he told the league.

For a News Now story on the first four Maine state legislators who were honored for being "on board with credit unions," use the link.

Reservists letter Thankful for SECUs support

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CHARLOTTE, N.C. (11/21/11)--In a week focused on giving thanks, a letter written by a credit union employee who is thankful for the support he received from the credit union when he was deployed to active duty as a reservist seems a special way to recognize what credit unions do for people.

The letter, which appeared in Thursday's issue of the Charlotte (N.C.) Observer, was written by Jamie Applequist, a senior vice president at State Employees' CU (SECU) in Raleigh, N.C. and a master sergeant in the U.S. Air Force Reserve.

SECU was one of 15 employers nationwide to receive the 2011 Secretary of Defense Employer Support Freedom Award, the Department of Defense's highest honor for civilian employers of  National Guard and Reserve members.  Applequist in his letter tells why he nominated SECU for that award.

"As the Thanksgiving holiday approaches, I find myself reflecting on the many things I am thankful for in life." He wrote he is approaching 20 years in the U.S. Air Force, and although he made a decision not to re-enlist, he decided to commit to the Air Force Reserve.

His civilian career with SECU began in 1999. "Employers at that time accommodated Guard and Reserve employees' service, but 9/11 changed that dynamic dramatically…Two-week training periods have been replaced with long, grueling deployments."

After 9/11, he was deployed for his first extended tour as a reservist. "I was working in a small credit union branch for SECU, and I will never forget the fear I had when I went to tell my boss I was being activated. I expected the worst, but received the opposite.  He delivered a full vote of confidence and assured me the credit union would be behind me every step of the way. Not once did I worry about my position being there for me when I got back," Applequist wrote.

"And while I was gone, SECU was amazing, frequently checking on my family and regularly sending care packages to me and my fellow airmen," he added. "There are few ways to describe just how valuable this type of support and peace of mind can be when you are leaving your family and job behind for a long deployment."

He noted that most members of the Guard and Reserve have similar employer stories but also recalled a younger service member who lost his job because of his extended deployment.  Despite acquiring leadership and skill sets through their service, Guard and Reserve members face a higher unemployment rate than civilians, he said.

"That's why those of us with supportive employers feel such gratitude," he wrote. "This Thanksgiving season, I am incredibly grateful for the opportunities and experiences I have had in my life serving my country, my family, and the State Employees' Credit Union."

He encouraged all Guard and Reserve members to thank their supportive employers by nominating them for the 2012 Freedom Award at Deadline is Jan. 16.

Let the holiday food drives begin

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Wis. (11/21/11)--With the nation celebrating Thanksgiving this week and the rest of the
Mary Yasui-Yamabe (right), board chair of Kinecta Alternative Financial Solutions (doing business as Nix Financial), helps pass out bags of food during the 38th Annual Nix/Kinecta Holiday Food Drive that Kinecta FCU, Manhattan Beach, Calif.,  helped host  Nov. 13 in Los Angeles. (Photo provided by Kinecta FCU)
holiday season just around the corner, credit unions across the country are pitching in to combat hunger by helping stock food pantries and coordinate food drives.

Some examples are:

  • Kinecta FCU, Manhattan Beach, Calif., and Nix Financial hosted the 38th Annual Holiday Food Drive, Nov. 13 at Jesse Owens Park, Los Angeles. Employees from the $3.43 billion asset credit union distributed bags of food and $65 Ralphs/Food 4 Less gift certificates to nearly 1,200 families. Each year, more than 40 community organizations and churches in Southern California partner with Kinecta and Nix to select recipients for the food drive. Donations made by Kinecta members and Nix customers helped raise thousands of dollars for the event.
  • Presenting $500 to each of six area food pantries in an annual holiday tradition for Holy Rosary Regional CU (HRCU) in Rochester, N.H., are, from left, Brian Hughes, president/CEO, HRCU; Kathy Radwan, Farmington Food Pantry; Susan Ford, Homeless Center for Strafford County; Kathy Ford, Homeless Center for Strafford County Board of Directors; Torey Kortz, SHARE Fund in Rochester; Judy Strate, Somersworth SHARE Fund; Patricia Vachon, Community Food Pantry in Somersworth; David Vachon, Community Food Pantry in Somersworth; Darrin Janakis, Dover Food Pantry; and Dana Flanders, HRCU board chairman. (Photo provided by HRCU)
    Brian Hughes, president/CEO of Holy Rosary Regional CU (HRCU) in Rochester, N.H., and Dana Flanders, HRCU chairman of the board, Friday presented $500 to each of six area food pantries: Community Food Pantry in Somersworth, N.H., Dover (N.H.) Food Pantry, Farmington (N.H.) Food Pantry, the Homeless Center for Strafford (N.H.) County, the SHARE Fund in Rochester and the Somersworth SHARE Fund. This has become an annual holiday tradition for the entire HRCU staff. Providing for local area food pantries gives the staff and members of HRCU a sense of satisfaction and community especially during these times of need, HRCU said. "Every year the need is greater," Hughes said. "And, while the economy remains challenging for many, we're proud to make contributions that can help those who are less fortunate. We hope that by giving this money on behalf of our members again this year, our credit union will bring some joy to the lives of many local residents."
  • Rochester Hills, Mich., Mayor Bryan K. Barnett, holding the plaque, presents the Community First Award to Lon Bone, left, vice president of public relations and community involvement, Genisys CU; Genisys CEO Jackie Buchanan; Keri Marentette, Rochester Hills (Crooks) branch manager, and Sarah Slusher, Rochester Hills (Avon) branch manager. The award was presented after staff chipped in and bought groceries for a local handicapped senior citizen. (Photo provided by Genisys CU)
    The City of Rochester Hills, Mich., recently presented Genisys CU, Auburn Hills, Mich., with the Community First Award, recognizing the $1.35 billion asset credit union for its acts of volunteerism and community service. During a time of great financial difficulty, a Rochester Hills senior citizen was unable to buy groceries for more than four weeks. She could not meet her living expenses, pay for medication and still have enough money left to buy food. Also, the woman is handicapped, leaving her unable to access a neighborhood emergency food program. When the staff at Genisys heard of her situation, they pooled their own money to buy groceries for her and delivered them to her home (Michigan Monitor Nov. 14).
  • The 10th annual Maine Credit Unions' Ending Hunger Walking Tour is making the rounds of Maine communities and also attracting positive attention along the way, according to the Maine Credit Union League (Weekly Update Nov. 10). The tour began with a pre-walk kick-off at Penobscot County FCU in Old Town Oct. 27, then officially started a day later at Maine State CU in Augusta. Brenda Davis, who, along with the league's Social Responsibility Committee, founded the walk in 2002, is reporting an increased awareness of the tour and a favorable reception in each community she visits. The tour has also attracted several TV, radio and newspaper stories and encouraged people to get involved. As of Nov. 11, the tour had stopped in 36 communities and contributed more than $4,000 to local food pantries. By the time it ends Nov. 30, the tour will visit a record-setting 75 communities. "It's difficult time for everyone," said Jon Paradise, the league's governmental and public affairs manager. "A lot of people are having to turn to a food pantry, especially for the holidays, and that makes it more difficult if you want to have a holiday for children. This is a way for Maine credit unions to come together to help those who are going through a difficult time."
  • Texas Trust CU in Mansfield, Texas, said it will give up to $25,000 to the North Texas food bank. For every pound of food that was donated online or at its branches between Nov. 1 and Nov. 19, the $671 million asset credit union will donate $1 to the food bank. Because each dollar donated can purchase three meals, a $25,000 donation will provide 75,000 meals. Also, the anticipated 25,000 pounds of donated food will yield roughly another 20,000 meals--for a total of 95,000 meals (Investment Weekly News via Nov. 19).

Metal stamping biz helped by CUs biz loan

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ST. JOSEPH, Mich. (11/21/11)--Like many businesses, Wolverine Metal Stamping, St. Joseph, Mich., was blindsided by the effects of 2008 financial crisis. Fortunately, the company had a local credit union to partner with when it needed financial support.

In 2008, Wolverine had signed a financing agreement with GE Capital. Wolverine planned to use the capital to diversify its product line and broaden its customer base. Then stock market crashed, and the economy went into a downward spiral. GE backed out of the agreement. Wolverine's prospects for obtaining financing from national lenders in the wake of financial crisis looked dim.

Then, $269 million asset OMNI Community CU, Battle Creek, Mich., stepped in to help provide Wolverine with the capital and financial expertise it needed.

"Omni Community CU really stepped up at a time when our company was on the brink, and thanks to OMNI's assistance, Wolverine is growing and creating local jobs," said Bruce F. Weber, Wolverine chief financial officer/treasurer. "When big banks left local businesses like Wolverine in the lurch, OMNI stepped up and came through. Its small business lending program has made a real difference to our company, to our employees and to their families."

Wolverine said it worked with OMNI to tap into programs from the Michigan Economic Development Corp. and the U.S. Department of Agriculture. The company eventually obtained $3 million in financing that will allow it to grow.

"Our credit union is proud to help local communities like Wolverine Metal Stamping grow and succeed in our community," said Ted Parsons, CEO of OMNI Community CU. "Supporting small businesses is the best way to foster job creation. OMNI Community CU is looking forward to continued partnerships with small businesses and anyone with a good business idea so together we can strengthen our local economy and help create more local jobs. Credit unions can do even more with the right pro-business, pro-growth policies that allow us to lend more to entrepreneurs and innovators in Michigan."

Credit unions are lending to small businesses at a time when other financial institutions tightening credit. Michigan credit unions' small-business loans surpassed $1 billion for the first time in early 2011 with member business loan growth at 29% for the 12-month period ending June 30, according to the National Credit Union Administration. During the same 12-month period, Michigan banks' small business lending dropped 10.1%.

Small business lending by credit unions in Michigan have grown from $345 million in 2005 to more than $1 billion today. Last year, 33 Michigan credit unions pledged $43 million in loans to the Credit Union Small Business Financing Alliance, partnering with the Michigan Economic Development Corp. and the Michigan Small Business & Technology Development Council to help train entrepreneurs and fund new businesses in the state.

The U.S. Senate Banking Committee is considering a plan to let credit unions lend up to 27.5% of total assets for small-business projects, an increase from the current limit of 12.25%. Increasing the small-business lending cap could potentially pump $13 billion into the nation's economy and create 140,000 new jobs without any taxpayer costs, according to the Credit Union National Association, which along with credit unions nationwide, is pressing Congress to pass the measure.

Global womens networks inaugural outreach in Kenya

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NAIROBI, Kenya (11/21/11)--Credit unions are a global movement no matter where they
Joe Finnigan, board treasurer, Vermont FCU, discusses the World Council of Credit Unions' Kenya strategy during the recent Global Women's Leadership Network engagement program.
are located and supporting other institutions is the responsibility of all credit unions. Those  are among the key lessons learned by participants of World Council of Credit Unions' (WOCCU) Global Women's Leadership Network's inaugural engagement program trip to Kenya.

"There's no question that credit unions have a responsibility and role to play in helping smaller institutions at home and abroad," said Joe Finnigan, board treasurer for the Vermont FCU, Burlington, Vt. He and other program participants visited a variety of enterprises supporting Kenya's many small savings and credit cooperatives (SACCOs, or credit unions).  "We can and should be making a difference," Finnigan added.

The network's engagement program provides members of the international credit union movement experiences to share ideas from their different systems. Participants learned about WOCCU activities that support and foster growth among Kenya's SACCOS, shared their expertise to strengthen the development program's implementation, and evaluated ways to adapt the information and apply it back home.

Mark Cifuentes, right, senior vice president of  WOCCU Services Group, discusses WOCCU's application service provider program supporting small Kenyan credit unions, with Joe Finnigan, left, Vermont FCU, and Hank Hubbard, Communicating Arts CU.
Participants met with staff of WOCCU's Kenya program and its for-profit arm, WOCCU Services Group, in their Nairobi office and officials of the Kenyan Union of Savings & Credit Cooperatives, Kenya's credit union trade group and a WOCCU member.

The group also traveled to Kisumu to visit Busia Compassionate Centre, a credit union-supported orphanage on the Ugandan border. The visits provided insight into how SACCOs reach underserved markets, and showcased their outreach and  their increasing capabilities through WOCCU technology applications, said WOCCU President/CEO Brian Branch. "Kenya's credit unions also have come to play an important role in the lives of their members," Branch said. "There are many good lessons to learn in Kenya."

In the program, participants:

  • Learned about challenges facing Kenya's more than 4,000 credit unions, many of which are small.
  • Discussed WOCCU's application service provider (AP), which allows credit unions access to affordable banking solutions by connecting them with a central computer platform in WOCCU's Nairobi office.
  • Addressed using cellphones linked to a mobile money transfer service to provide members access to financial transaction services.
Hank Hubbard, president/CEO of Communicating Arts CU, Detroit, is greeted by an orphan at Busia Compassionate Centre in Kenya. (Photos provided by the World Council of Credit Unions).
Trip participant Hank Hubbard, president/CEO of Communicating Arts CU (CACU) , Detroit, noted the cell phone concept would be useful to his credit union. CACU's past efforts to reach its marginalized member base, 90% of whom are African American, were based on the community development credit union's attempts to provide more affordable versions of existing services. The trip to Kenya has changed how he approaches that process.

"Brainstorming during the engagement program has put a crack in my thought processes about how best to serve our members," Hubbard said. "The trip has caused me to take a look at our operations from a different angle, and I will now be thinking about new strategies that aren't necessarily tied to traditional financial service delivery," he added.

In addition to Finnigan and Hubbard, program participants included: Gene Brody, president/CEO of Bay Ridge FCU, Brooklyn, N.Y.; Linda Darling, executive vice president and chief financial officer of Suncoast Schools FCU, Tampa, Fla.; Linda Hardy, compliance officer, and Sandra Paynter, financial services representative, of Consolidated CU, Borden-Carleton, Prince Edward Island, Canada; and Stacey Walker, volunteer with Xcel FCU, Forest Hills, N.Y.

NASA astronaut helps Filene LIFT off program

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MADISON, Wis. (11/21/11)--Astronaut Janet Kavandi, director of flight crew operations at the National Aeronautics and Space Administration's Johnson Space Center, recently addressed the Filene Research Institute and five partner credit unions that are taking part in Filene's LIFT loan program.

Astronaut Janet Kavandi, director of flight crew operations at the Johnson Space Center, helped the Filene Research Institute and five partner credit unions celebrate the launch of Filene's LIFT loan program. From left, are: Matt Davis, Filene Research Institute, Madison, Wis.; Lance Potter, Vermont FCU, Burlington, Vt.; Susan Heneman, Public Service CU, Denver; Kavandi, NASA; Matt Vance, Industrial CU, Bellingham, Wash.; Leah Gjertson, UW-Madison Center for Financial Security; Jason Sherrill, Inetsolution Inc.; David Southall, Innovations CU, Panama City, Fla.; and Denise Gabel, Filene Research Institute. (Photo provided by Filene Research Institute)
LIFT, an idea shaped by Filene's i3 innovation team, is being tested as a way to improve repayment behavior and financial capacity. Kavandi spoke to help celebrate the launch of an idea that provides incentives for timely loan payments.

The University of Wisconsin-Madison's Center for Financial Security will study automobile loans to 1,200 low- and middle-income consumers with subprime credit scores, with the results to be published in 2013.

LIFT is supported by a grant by the Center for Financial Services Innovation.

"It is a fantastic experience to see an i3 idea get into the field for testing," says Denise Gabel, Filene chief innovation officer. "The LIFT program will provide credit-challenged consumers with the help they need, while managing the inherent risk in doing so."

Credit unions piloting LIFT during its research phase include:

  • Del Norte CU, Santa Fe, N.M., with $392 million assets;
  • Industrial CU, Bellingham, Wash., with $144 million assets;
  • Innovations CU, Panama City Beach, Fla., with $148 million assets;
  • Public Service CU, Denver, with $1 billion assets;
  • Vermont Federal CU, Burlington, Vt., with $330 million assets;
Filene i3 team is a work group of young professionals that shapes innovative ideas into new products and services for credit unions.

The Filene i3 innovation team behind the LIFT idea comprises:

  • Shelly Berryman, SchoolsFirst FCU, Santa Ana, Calif., with $8.8 billion assets;
  • Matt Henry, Elevations CU, Boulder, Colo., with $1 billion assets;
  • Jackie Edwards, Connexus CU, Wausau, Wis., with $351 million assets; and
  • Mike Kenzie, Patriot FCU, Chambersburg, Pa., with $432 million assets, Santa Ana, Calif.

New Hawaii CDCU center to assist native communities

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HILO, Hawaii (11/21/11)--Hawaii First FCU blessed its second Community Resource Center on the Big Island of Hawaii Nov. 10. The center, which opened Nov. 14, will use funds from the Community Development Financial Institutions (CDFI) Fund  and  a loan from the National Federation of Community Development Credit Unions to assist native communities.

Terri J. Fowlkes, left, director of community development investments at the National Federation of Community Development Credit Unions, attended a blessing ceremony for Hawaii First FCU's second Community Resource Center with Laura Aguirre, president/CEO of the credit union.
The new center, located next door to the community development credit union's (CDCU)  Hilo branch,  provides no-cost resources to any resident in the County of Hawaii.

It will offer financial education, including personal money management, debt solutions and credit repair; Individual Development Accounts (IDAs) for home purchase, higher education or financing a small business; assistance to job seekers and employment training; small business startup assistance and development; and foreclosure prevention assistance.

It also will have a computer lab and a resource library open to the community.

"We couldn't have done this without the continued support of the CDFI Fund, the
Hawaii First FCU staff are shown with local religious leader, Kumu Koh'okele Crabbe (center) after a blessing ceremony for the credit union's new Community Resource Center. (Photos provided by the National Federation of Community Development Credit Unions).
National Federation of Community Development Credit Unions, and the Office of Hawaiian Affairs," said Hawaii First FCU President/CEO Laura Aguirre. She noted the resources the center will provide "are critical tools to help our members and our community to get ahead, and it is comforting to know that community members will not have to travel such long distances to access these vital services."

Terri J. Fowlkes, federation director of community development investments, attended the blessing ceremony, which was conducted by Kumu Koh'okele Crabbe, a local religious leader.

"With Hawaiian communities facing crippling unemployment due to a decline in tourism, gentrification of native communities and rising housing costs that often displace Native Hawaiians, Hawaii First FCU and the Hawaii First Community Resource Centers have never been needed more," said Fowlkes.

The $40 million asset CDCU opened its first Community Resource Center in Kamuela in 2008, also with a CDFI Fund award. The new center uses CDFI Fund awards plus the proceeds from a secondary capital loan from the federation.

CU System briefs (11/17/2011)

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  • BERLIN, N.H. (11/18/11)--A Berlin, N.H., couple has been charged with the Monday robbery of Guardian Angel CU, a $42 million asset credit union based in Berlin. Daniel Ray Hufstetler, 32, and Sheena Craig, 29, were arrested on Route 16 in Gorham after the credit union's surveillance video tapes were publicized and generated a number of tips.  Hufstetler is charged with armed robbery and Craig is charged with conspiracy to commit armed robbery, said police ( Nov. 16) …
  •  CHELSEA, Mass. (11/18/11)--Chelsea, Mass.-based Metro CU completed its merger Friday with Secure CU in Melrose, Mass., resulting in a combined institutions with more than $900 million assets, announced Robert M. Cashman, president/CEO of Metro CU. The merger enables Metro to provide better services to residents and businesses of Melrose and surrounding communities.  Secure CU's staff will continue to serve members at the Main Street branch in Melrose, which became Metro's 13th branch. Metro also opened new branches in Boston and Salem this year.  Peter Cucinotta, chairman of Secure CU, said its members "will significantly benefit from the merger through greater convenience and access to a broader selection of banking products and services." …
  • PHOENIX (11/18/11)--Arizona State CU, a $1.3 billion asset credit union in Phoenix, announced it will pay an Arizona Sundogs fan's mortgage for a month--up to $1,000--at the team's hockey game Saturday night. The credit union is partnering with the Sundogs to sponsor a "Mortgage Match" contest to give back to the Prescott community.  "This is a prime example of a business that does things right, understands the local economic climate and is willing to do something to help," said Sundogs General Manager Chris Presson.  "The credit union's commitment to partnering with locally owned businesses  supports the local economy while promoting community pride," said David E. Doss, Arizona State CU president/CEO.  Throughout the season, people can register to be a contestant for the "Mortgage Match" at the games by completing an entry form at the Sundogs information table in front of the team store (The Daily Courier Nov. 16)…

Are branches endangered iUSA TODAYi says no

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NEW YORK (11/18/11)--With more consumers choosing online banking and using ATMs and mobile channels, are brick and mortar branches an endangered species? Not necessarily, said USA TODAY's Thursday edition, but branches are changing.

Bank customers are embracing online banking: 62% of those surveyed indicated they prefer to bank online, up from 36% from last year, according to newspaper's personal finance columnist, Sandra Block, citing an American Bankers Association survey conducted in August. Meanwhile 20% of respondents said they preferred a branch, compared with 25%  last year. About 57% of customers age 55 and older  preferred online banking, compared with 20% last year.

Many customers still value the human touch, bute too many branches exist  to serve the shrinking number of customers who use them, Celent senior banking analyst Bob Meara told the newspaper. The total number of branches declined since 2009,  but today there's still nearly four times as many branches as there were in 1970--when there were no ATMs or online banking.

Meara also noted that the decline in bank revenue sources (such as fees) is making it more difficult to justify the cost of maintaining branch buildings.  Downsizing  branch networks would save money for banks looking to recoup revenue, but so far few have closed branches and some are opening new ones to meet their customers' demand.

The article noted banks are updating their branch networks by targeting specific markets in areas they don't have a big presence in and using the branch to get a foothold in the community;  offering "specialty stores" that dispense advice on more complex financial services such as mortgages; focusing on time-intensive small-business consumers; buying the competition's and its branches to extend their reach; opening virtual branches or using technology to extend their reach; and outsourcing branch functions to other entities such as the United Postal Service.

The article noted that credit unions offer use shared branches to widen their reach; use virtual branches and technology to help them provide full financial services, and use outsourcing.

For the full article, use the link.

New CUSO CURoots Cooperative elects board

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ONTARIO, Calif. (11/18/11)--CURoots Cooperative--a credit union service organization (CUSO) launched last year by several credit unions and the California and Nevada Credit Union Leagues to help credit unions reduce back-office costs--recently held its first annual meeting and elected its new board of directors.

Re-elected board members include:

  • Chairman--Gary Perez, CEO, USC CU, Los Angeles;
  • First vice chairman--Linda White, CEO, United Health CU, Burlingame, Calif.;
  • Second vice chairman--Bill Birnie, CEO, Eagle Community CU, Lake Forest, Calif.;
  • Diana Dykstra, California League Services Corporation; Ontario, Calif.;
  • Jon Hernandez, CEO, CalCom FCU in Torrance, Calif.; and
  • Joe Schroeder, CEO, Ventura County CU, Ventura, Calif.
New to the board is Kimberly Hester, executive vice president, network services for CO-OP Financial Services, Rancho Cucamonga, Calif.

CURoots' initial service offering features onsite and remote compliance services, specialized compliance audits, and policy reviews. The CUSO has 16 participating member-owner credit unions and service organizations and employs three full-time compliance officers.

For 2012, CURoots Cooperative will launch its second service--CU Vitality--in collaboration leagues. The new service will offer a collective benefits solution, including medical, dental and vision plans for member-owners.

Also, CURoots plans to launch an enterprise risk management division, which will provide internal audits and loan portfolio analysis.

"We're also reviewing other ancillary services to offer as part of CU Vitality next year, such as group and individual life insurance, short-term and long-term disability insurance, long-term care insurance, Consolidated Omnibus Budget Reconciliation Act, workers compensation, and employee wellness programs," said CURoots CEO Lucy Ito.

Cardinal Community CEO appointed to Ohio CU Council

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MENTOR, Ohio (11/18/11)--Ohio Gov. John Kasich appointed Christine Blake, CEO of Cardinal Community CU in Mentor, Ohio, to the state's Credit Union Council to serve a three-year term.

The council is part of the Ohio Division of Financial Institutions and comprises seven members who provide advice and recommendations on issues for credit unions to the regulatory agency and governor (eLumination Newsletter Nov. 16).

The council meets quarterly and is chaired by the Ohio Deputy Superintendent for Credit Unions, Michael Wettrich. Also serving on the council are: Vidya Iyengar, Marion (Ohio) Community CU; Greg Kidwell, Members First CU, Columbus; Gary Soukenik, Seven Seventeen CU, Warren; and Matthew Studer, Toledo (Ohio) Postal Employees CU.

Kasich is expected to fill a vacant seat on the council soon, said the Ohio Credit Union League.

CU helps Mich. woman turn idea into biz in tough times

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SAGINAW, Mich. (11/18/11)--Many entrepreneurs have a personal story behind their small businesses. Alice Brown's story is a painful one.

Brown, of Saginaw, Mich., suffered a knee injury in a head-on car crash. Not one to take things sitting down, Brown designed a knee brace that eased her pain, helped her rehabilitate, and restored her normal movements.

She held such a belief in her homemade knee brace, she set her sights on creating a product line. But she faced one more hurdle: access to capital.

Brown turned to her local credit union, $643 million asset Wildfire CU, Saginaw, Mich., to provide her with the small-business loan she needed to market her  knee brace.

"I wanted to share my product with others in the hope that it could help make their lives a little better," Brown told the Michigan Credit Union League. "Thanks to Wildfire's support, I've been given the opportunity to bring my knee brace to people who need it while creating jobs and contributing to the local economy. Without the help and support from my credit union, I never would have been able to see my idea through."

Today, Brown markets her knee brace through her online company, In The Groove. In addition to helping her customers relieve pain and maximize their mobility, she has been able to hire four full-time and one part-time employee.

"Our credit union is proud to have the opportunity to finance small business owners with big ideas like Alice Brown," said Linda P. McGee, Wildfire vice president of membership development. "Local innovators provide the new ideas that drive economic growth and create new jobs. The more we can lend to small businesses, the more positive the impact on our local economy."

It's part of a Michigan and nationwide trend: Credit unions are ramping up small business lending at a time when other financial institutions are stepping back. Michigan credit unions' small-business loans surpassed $1 billion for the first time in early 2011 with member business loan growth of 29% for the 12-month period ending June 30, according to the National Credit Union Administration. During the same 12-month period, Michigan banks' small business lending dropped 10.1%.

Lending has grown from $345 million in 2005 to more than $1 billion today. Last year, 33 Michigan credit unions pledged $43 million in loans to the Credit Union Small Business Financing Alliance, partnering with the Michigan Economic Development Corp. and the Michigan Small Business & Technology Development Council to help train entrepreneurs and fund new businesses in the state.

"Credit unions are stepping up to lend as other institutions are stepping back," said David Adams, CEO of the Michigan league. "Small businesses continue to struggle with access to low-cost capital and credit unions are providing a good alternative for certain types of small business loans."

The U.S. Senate Banking Committee is considering a plan to let credit unions lend up to 27.5% of its assets for small-business projects, up from the current cap of 12.25% of total assets. Increasing the small-business lending cap could potentially pump $13 billion into the nation's economy and create 140,000 new jobs in small businesses without any taxpayer costs, according to the Credit Union National Association, which along with credit unions nationwide, is urging Congress to pass the measure.

CUNA Mutual reports strong financials through 3Q

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MADISON, Wis. (11/18/11)--CUNA Mutual Group reported it posted a strong performance in key financial measures through the third quarter, despite continuing economic pressures.

The company's credit union business played a significant role in its positive operating gain and revenue performance, the company said. With growth in its consumer business areas, operating revenue on continuing operations grew 5.8% year-to-date. Net income rose in the quarter to $97 million year-to-date, despite paying out more in catastrophe claims and weather-related crop insurance claims in the third quarter, compared with third quarter 2010.

"Overall, our results through the third quarter reflect the hard work of the organization and the strength of a diversified portfolio of products," said Jerry Pavelich, chief financial officer. "We will continue to do all we can to help credit unions and their members as the economic environment remains difficult, with high unemployment, volatile markets and low interest rates."

CUs well above banks in California performance survey

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SACRAMENTO, Calif. (11/18/11)--California credit unions rated well above the state's banks in the 2011 California Bank & Credit Union Survey by Prime Performance ( Nov. 16).

The Golden 1 CU, a $7.46 billion asset credit union based in Sacramento, had the top overall score in the survey (79%) and ranked first in all four questions that constitute the company's Prime Experience Index (PXI). Other scores for major banks were:

  • Bank of the West, 68%;
  • Union Bank, 66%;
  • U.S. Bank, 57%;
  • Wells Fargo, 51%;
  • Citibank, 48%;
  • Chase, 43%; and
  • Bank of America, 39%.
PXI indicates how credit unions and banks perform when attempting to deliver a superior member/customer experience.

In the survey, the Overall Customer Experience Score for all financial institutions in the state was 55%. The PXI for all credit unions other than The Golden 1 was 79%; and for all banks other than the seven major ones listed earlier the score was 65%.

The Golden 1's top scores in the four areas that constitute the overall index were:

  • Satisfaction with service: 86%; other credit unions, 87%; other banks, 76%; state average, 68%;
  • Likely to recommend: 86%; other credit unions, 82%; other banks, 65%; state average, 56%;
  • Likely to come to the [financial institution] first for additional products or services: 66%; other credit unions, 71%; other banks, 53%; state average, 43%;
  • Effective at meeting financial needs: 77%; other credit unions, 76%; other banks, 66%; state average, 55%.    
"Credit unions are the clear customer-experience winners in our survey," said Jim S. Miller, Prime Performance president, adding that "overall, banks have work to do to catch up with their credit union competitors."

Pa.s Reality Fair attracts state officials at Capitol

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HARRISBURG, Pa. (11/18/11)--The Pennsylvania Credit Union Association and the Pennsylvania Credit Union Foundation, through the National Credit Union Foundation's REAL Solutions Project Initiative, sponsored their first Financial Reality Fair at the state Capitol in Harrisburg, Pa.

Students visited the state capitol, in Harrisburg, Pa., for the state's first Financial Reality Fair, sponsored by The Pennsylvania Credit Union Association and the Pennsylvania Credit Union and Pennsylvania Credit Union Foundation, through the National Credit Union Foundation's REAL Solutions Project Initiative. Here, Secretary of Banking Glenn Moyer talks with students participating in the fair.

During the fair, more than 180 Pennsylvania high school students learned about the day-to-day realities of earning and spending and saving, including budgeting for a car, furniture, food and fun.

Students could spin a Reality Wheel to arrive at unforeseen gains or losses of money, such as flat tires, computer crashes, speeding tickets, tax returns, garage sale profits and overtime wages.

Volunteering at the event were 50 representatives from PCUA, the foundation and these credit unions:

  • AmeriChoice FCU, Mechanicsburg;
  • Belco Community CU, Harrisburg;
  • Cornerstone FCU, Carlisle;
  • Members 1st FCU, Mechanicsburg;
  • New Cumberland (Pa.) FCU,
  • P&G Mehoopany Employees FCU, Tunkhannock; and
  • Pennsylvania State Employees CU, Harrisburg.
State Rep. Ron Buxton met with students from Harrisburg High School and Tricia Heisey, right, of Belco Community CU, Harrisburg. (Photos provided by the Pennsylvania Credit Union Association)
Volunteers worked at booths throughout the fair to help student with their budgeting decisions.

The fair also gave students an opportunity to visit the Capitol building for the first time. Joe Wambach, executive director of the Pennsylvania Credit Union Foundation, led several of the school groups on a tour of the Capitol Rotunda, the Pennsylvania House of Representatives, and the Pennsylvania Senate.

Secretary of Banking Glenn Moyer stopped by to see the event and to meet some of the students, faculty, and volunteers. State Rep. Ron Buxton (D), and Cara Laudenslager, legislative assistant to state Sen. Pat Vance (R), also spent time visiting with students.

Survey 0 card rates attract but dont retain customers

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NEW YORK (11/18/11)--Although credit card issuers--including credit unions--are wooing new accountholders aggressively by offering teaser rates and sign-up bonuses, holding on to these new member/customers will be a challenge, according to a new study.

Credit unions especially should take note in light of all the new members they attracted (and are still attracting) surrounding the events of Bank Transfer Day, the day that was earmarked to switch accounts from big banks to credit unions and local community banks. Although most of credit unions' new business is tied to new checking accounts, they will be cross selling other products, including credit cards, to those new members and will need to know the trends aimed at retaining the new members.

Common methods to attract new credit card account holders include offering 0% rates on balance transfers, or supercharged air miles and hotel points as bonuses for signing up for a new credit card, said a survey conducted by Cardbeat, a syndicated research publication of New York and London-based Auriemma Consulting Group (ACG).

Zero percent offers for balance transfers were a hallmark of the pre-recession economy, but this time the offers are different, said Auriemma in a press release (Business Wire Nov. 15). For example, the offers are mainly for the most creditworthy consumers. And issuers are trying new tactics to combat "rate surfing," said Dr. Patricia Sahm, managing director at ACG.

"Consumers told us that their primary reason for acquiring a card was the APR [annual percentage rate], and it was also the primary reason for cancelling the same card once the teaser rate expired," Sahm said. "Now we see issuers offering zero interest with very long time frames, such as over a year on new purchases as well as promo checks."

Card issuers must get the member/customer to actually use the new card--a big step, Sahm said.  In a recent Cardbeat survey, 40% of respondents who had cancelled a card during the previous six months said they never or rarely used the card. 

Teaser rates appeal mostly to people who usually carry balances. However, consumers who pay their monthly balance in full like the airline and hotel bonus offers.

In the past, sign-up bonuses were usually 10,000 to 25,000 miles or points. Now many travel companies are offering 50,000 or more points and waiving the first year's annual fee. The travel/entertainment segment of consumers aren't interested in rate surfing. Instead, they engage in "travel hacking," collecting as many different cards they can. Some boast 20 different cards in their dresser drawer, and they aren't spending time managing those accounts, said Sahm.

"Because most travel-oriented cards have an annual fee, the issuer has less of an issue with inactive accounts," Sahm said. "Annual fees have the dual benefit of adding a revenue stream and of forcing the usage issue: if you pay an annual fee, you need to use the card to justify it."

The Web-based survey polled 400 credit card users in the U.S.

CU System briefs (11/16/2011)

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  • CONCORD, N.H. (11/17/11)--The New Hampshire Credit Union League and its  credit unions joined Gov. John H. Lynch and others last month to launch the sales season of the Make-A-Wish 2012 Calendar Raffle ( Nov. 16). The raffle, which is limited to 2,500 calendars, featured speeches from representatives of the league, Make-A-Wish, and the governor. Lynch commended New Hampshire credit unions for assisting the state's residents in the event of disasters, on meeting community-based needs, and for meeting the needs of their members when called upon.  Fundraising goal for this year's raffle is $140,000 ...
  • ONTARIO, Calif.(11/17/11)--Honda FCU CEO Jim Updike, right, was presented an
    Click to view larger image Click for larger view
    "Unsung Hero" award by the California Credit Union League. The award honors those in the credit union industry with at least 20 years' service who have make significant contributions to the community.  Henry Kertman, left, California and Nevada Credit Union Leagues vice president of public affairs, presented the award at Honda FCU in Torrance, Calif. Updike serves on the Richard Myles Johnson Foundation's board and on various league committees, including the Government Relations Committee, International Task force, League Elections Committee where he is currently chairman, and the league board. He also is active with the San Diego and Southwest Chapters of the league. (Photo provided by the California Credit Union League) …

Two employees pistol-whipped during robbery

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ORLANDO, Fla. (11/17/11)--Two employees of a credit union in Central Florida were treated at a local hospital after being pistol-whipped during a robbery Wednesday morning (The Florida News Journal Nov. 16).

One suspect is in custody and another was still at large, according to police. The incident occurred just before 8 a.m. when employees were opening Sunbelt CU on Orange Blossom Trail in Orlando. Two masked men wearing dark long-sleeved clothing walked in, ransacked the office, and pistol-whipped the employees, then left.

One robbery suspect was arrested later behind the credit union, and police were searching for the second man.  Police did not say whether they took any money ( and Nov. 16).

The credit union's employees, who did not suffer major injuries, were treated at Florida Hospital and released.

CUs participate in Underbanked Solutions Exchange

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CHICAGO (11/17/11)--Credit unions and mid-sized banks met Tuesday at the Center for Financial Services Innovation (CFSI)'s seventh Underbanked Solutions Exchange in Chicago to learn best practices in serving the underbanked.

Exchange participants put themselves in the shoes of the financially underserved consumer, cashing checks, buying and using prepaid cards, transferring money, and seeking small value loan options.

"This exercise is especially well-timed, as this is a particularly important moment for banks and credit unions to contemplate how they can maximize the value of the products they offer to all of their customers," said Karen Andres, manager and consultant, Advisory Services.  The goal of the discussion was to prompt "participants to think about ways in which their organization can contribute to a future where financial services are a force for good in people's lives."

Attendees also discussed what defines "quality" in financial services as outlined by CFSI's Compass Principles; participated in an applied behavioral economics workshop with John Balz of ideas42, and advised two credit unions--$447 million asset Centris FCU, Omaha, Neb.,  and $4 billion asset ESL FCU, Rochester, N.Y.--about their underbanked strategies.

Others participating included Kinecta FCU, Manhattan Beach, Calif.; Redstone FCU, Huntsville, Ala.; Self-Help CU, Durham, N.C., and eight banks.

CFSI is a research and consulting group specializing in financial services for underserved consumers.

October index CUs small lenders fill biz lending gap

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NEW YORK (11/17/11)--Credit unions, community development financial institutions (CDFIs), microlenders and others approved 61.8% of funding requests for small business financing applications surveyed in October, an increase from the 61.5% approval rate recorded in September, according to the Biz2Credit Small Business Lending Index.

That compares with 9.3% approvals from large banks (with assets of $10 billion or more) in October, a slight increase from September's 9.2%. Small business loan approvals at big banks have not risen above the 10% rate since April, said the

Smaller lenders continue to fill the vacuum left by banks and traditional financial institutions, said the company. The index is an analysis of 1,000 loan applications on

Loan approvals by smaller banks increased to 46.3% from September's 45.1%--the highest increase this year.

"Big banks continue their reluctance to lend money," said Biz2Credit CEO Rohit Arora. "The causes of this cautiousness include the continuing global financial crisis, as well as U.S. policy uncertainty and the impact of Dodd-Frank Wall Street Reform Act, which tightened regulations," Arora said.

Arora noted that the Occupy Wall Street movement is making an impact and said the influx of deposits credit unions gained from disgruntled bank customers who switched institutions impacts small business borrowing because credit unions now have more money to lend.

The index also discovered that 17% of small companies surveyed reported revenue growth of 5% or more through the first 10 months of the year. However, 25% of potential small business borrowers said their sales remain flat.

The index also identified five reasons small business borrowers haven't received funding:

  • Decline in sales: More than 68%  of small businesses said sales declined in the first nine months of 2011;
  • Declining profitability: Profitability declined at more than 86% of small businesses the past two years;
  • Stricter bank underwriting criteria;
  • Big banks' uncertainty, which  is leading to increased dissatisfaction among small business owners; and
  • Avoidance by small business owners who believe they won't get a loan or that the process is too time-consuming.

Halleck named Calif. league board chairman

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ONTARIO, Calif. (11/17/11)--Teresa Halleck, president/CEO of San Diego County CU, has been elected chairman of the California Credit Union League's 2012 board.

Halleck began her one-year term at the league's recent annual meeting and convention.

Larry Palochik, president/CEO of Alta Vista CU, Redlands, was elected first vice chairman; Teresa Freeborn, president/CEO of Xceed FCU, El Segundo, was elected as second vice chairman.

Rounding out the league's executive committee are Jon Hernandez, president/CEO of CalCom FCU, Torrance, and Hank Barrett, president/CEO of Valley First CU, Modesto.

Immediate past chairman Eileen Rivera, president/CEO of SkyOne FCU, Hawthorne, will serve as an ex-officio member of the committee.

Halleck, with more than 20 years of financial industry experience, joined San Diego County CU as president/CEO in August 2010. Prior to joining San Diego, she served as president/CEO of Sacramento-based The Golden 1 CU for nearly eight years.

Indiana league elects table officers (11/16/2011)

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INDIANAPOLIS (11/17/11)--The Indiana Credit Union League board of directors elected table officers at its reorganization meeting in October.

The meeting was held during the league's annual meeting and convention.

Table officers are:

  • Chairman--Lori Gonzalez, Members Choice FCU, Bloomington;
  • Vice chairman--Frank Gulley, Afena FCU, Marion;
  • Board secretary--Dave Fleming, Union Baptist Church FCU, Fort Wayne; and
  • Treasurer--Doug True, FORUM CU, Fishers.
Other board members include:

  • Randy Glassburn, Ball State FCU, Muncie;
  • Ron Mazur, Chiphone FCU, Elkhart;
  • George McNichols, Hoosier Hills CU, Bedford;
  • Lamoura Munse, Indiana Members CU, Indianapolis; and
  • Jack Sheets, Interra CU, Goshen.

Federation OFN team up on dual membership

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MINNEAPOLIS (11/17/11)--The National Federation of Community Development Credit Unions and Opportunity Finance Network (OFN) have agreed to develop a joint membership program that includes reciprocal discounts on dues to institutions that join both OFN and the federation.

The National Federation of Community Development Credit Unions and Opportunity Finance Network (OFN) Tuesday announced a memorandum of understanding to deepen collaboration between the two organizations and expand member benefits. From left, Mark Pinsky, OFN president/CEO; Pablo DeFilippi, federation director of membership; and Ignacio Esteban of the Florida Community Loan Fund, OFN board chairman. (Photo provided by the National Federation of Community Development Credit Unions)
Cliff Rosenthal, president/CEO of the federation, described the agreement as "formalizing and extending the cooperative relationship we have enjoyed with OFN going back more than two decades."

OFN is a national network of community development financial institutions.

Together the two groups helped establish the Community Development Financial Institutions (CDFI) Fund, Rosenthal noted.  The fund promotes economic revitalization and community development through investment in, and assistance to, community development financial institutions.

"We recognize that CDFIs often belong to a number of national and regional organizations to meet the range of their needs for training, technical information, advocacy and other services. This agreement helps them to manage their costs," Rosenthal said.

The agreement also envisions collaboration in data collection and cooperative development of strategies for collaborations and partnerships between CDFIs. Mark Pinsky, OFN president CEO, emphasized the goal of "increasing efficiency and impact and meeting the range of financial needs of low-income individuals and communities."

Wis. DFI CUs increase assets loans deposits in 3Q

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MADISON, Wis. (11/17/11)--Wisconsin credit unions in the third quarter saw increases in total assets, loans and savings deposits, according to data compiled by the Wisconsin Department of Financial Institutions (DFI) released Tuesday. Earnings also remained steady in the quarter.

Compared with the second quarter, Wisconsin's 211 state-chartered credit unions in the third quarter:

  • Grew assets by nearly 1%, to $21.8 billion from $21.6 billion;
  • Increased savings deposits by 1%, to $19.02 billion from $18.85 billion;
  • Expanded total loans by 1.5%, to $16.3 billion from $16.06 billion; and
  • Reported earnings of 0.52%, compared with 0.53% for the second quarter. 
The increases in deposits were recorded before the growth seen since Sept. 29 and related to the events leading up to Bank Transfer Day.

"Wisconsin credit unions had another solid performance in the third quarter," DFI Secretary Peter Bildsten said. "It is encouraging to see positive trends in several key areas. This bodes well for state credit union members and the Wisconsin economy."

Brett Thompson, CEO of the Wisconsin Credit Union League agreed. "With some of the largest credit unions, I think what you're seeing drive a good year is an increase in demand for small-business lending," Thompson told the Milwaukee Journal-Sentinel Wednesday. That "has probably been the largest area of growth for our credit unions over the last year," he said. "More and more small businesses are looking for a place to borrow money and finding it difficult, and many are turning to credit unions."

Ginger Larson, director of the Office of Credit Unions--the DFI agency that regulates Wisconsin's state-chartered credit unions--also pointed to improvement in the loan-delinquency ratio as a positive sign.

"The loan-delinquency rate dropped to 1.83% in the third quarter and that's encouraging," Larson said. "This is down from 1.84% in the second quarter and 1.87% a year ago."

WOCCU 30 microloans a good holiday gift

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A credit union loan helped Sri Lanka fisherman Sebastian Lusion repair his boat and  provide for his wife and three kids. Bank loans are hard for fishermen to obtain in Sri Lanka. Microloans of $30 are available to give as gifts through the Worldwide Foundation for Credit Unions' holiday campaign. (Photo provided by the World Council of Credit Unions)
MADISON, Wis. (11/17/11)--Credit union boards of directors and staff can give gifts easier this year through the Worldwide Foundation for Credit Unions' holiday campaign, said the World Council of Credit Unions (WOCCU).

The campaign encourages credit union advocates to make donations to support microbusiness loans in other countries on behalf of their 2011 holiday gift recipients.

Gifts of $30 will help WOCCU support farming and microbusiness loans to credit union members in Haiti, Sri Lanka, Ethiopia and Afghanistan.

The loans can make the difference between a self-sufficient small business and a family left in need, WOCCU said.

"This is a great holiday gift alternative for board members and credit union staff," said Valerie Breunig Worldwide Foundation executive director.

"Instead of giving typical corporate gifts, holiday donations will help empower the working poor in developing countries," she added. "As each small loan is repaid, donations keep circulating, helping more and more hardworking families reach financial stability."

All Holiday donors will receive a recognition card to acknowledge the donation made on their behalf.

To make a donation, use the link.

NCUA argues against paying WesCorp exec legal fees

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LOS ANGELES (11/16/11)--The National Credit Union Administration (NCUA) Monday filed in a federal court in Los Angeles motions to dismiss counterclaims and affirmative defenses of several former officers of the now-defunct Western Corporate FCU. The officers are trying to get NCUA to pay their legal fees--some in advance--in its suit against them stemming from WesCorp's $6.8 billion investment portfolio losses and ultimate collapse.

The former WesCorp officials in the case are: Robert A. Siravo, CEO; Thomas E. Swedberg, head of human resources; Timothy T. Sidley, chief risk officer;  Robert J. Burrell, chief investment officer; and Todd M. Lane, chief financial officer. Each filed amended counterclaims against NCUA, who is the liquidating agent for WesCorp, in the U.S. District Court for the Central District of California, Western Division in Los Angeles.

They allege that as former officers of WesCorp, they are entitled to indemnification; payment of defense costs, including advances of funds to pay the defense costs; and costs incurred to secure indemnity.

NCUA in court documents it filed Monday said the court lacks subject matter jurisdiction to order legal defense payments or to issue declaratory relief during the pendency of a lawsuit and that a federal credit union has discretion on whether to advance costs while a matter is pending.

The agency's motion also noted that "the regulations authorizing indemnification by financial institutions such as WesCorp apply only to solvent institutions. As a matter of law, corporate officers sued by the receiver or liquidator of a failed financial institution may not obtain indemnification from the estate of the failed institution, even if the officers ultimately defeat the claims against them."

NCUA also argued that the officers cannot obtain indemnification for actions brought by the NCUA "based upon their allegedly wrongful conduct." "First, the NCUA has brought this action in its capacity as the liquidating agency for a failed credit union, WesCorp. Second, the NCUA is suing the officer defendants for their wrongful conduct that directly led to the collapse of WesCorp. Allowing indemnification for the NCUA's lawsuit would lead to the 'absurd result' that the NCUA could succeed in its suit against the officer defendants, and then recover from itself."

The agency also noted that the Labor Code does not authorize an employee to seek indemnity from an employer; instead, the claims brought by the officers are governed by a specific statutory provision in the California Corporate Code.

Also, said NCUA, the claims for indemnification are "not ripe" because they have not prevailed on NCUA's claims against them.

In a separate motion, NCUA also attacked as "legally insufficient"  three affirmative defenses brought by the officers in their amended answers to its lawsuit.

The agency moved to strike the assertion that "the  pre-failure actions by NCUA as regulator excuses the otherwise culpable conduct of the officer defendants," adding that  "these defenses fail because 'courts have uniformly held that claims or defenses based on pre-receivership actions of regulators are legally insufficient.'"

In a second affirmative defense, the WesCorp officers asserted a "business judgment rule bars liability," but NCUA said "the court has already held that the business judgment rule does not protect the officer defendants."

It also moved to strike "bare-bones assertions that a statute of limitations bars the NCUA's claims" because the claims did not identify a specific statute and therefore "do not provide the basic notice required."

Finally, NCUA moved to dismiss amended counterclaims by some of the officials due to lack of subject matter jurisdiction and failure to state a claim upon which relief may be granted.

The case is scheduled to be heard on Jan. 9 at 8:30 a.m. PT before U.S. District Court Judge George H. Wu.

WOCCUs Branch blogs on ICNBCI also promotes IYC activities

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MADISON, Wis. (11/16/11)--Brian Branch, president/CEO of the World Council of Credit Unions (WOCCU), wrote an article explaining why credit unions are thriving worldwide, which was posted on the CNBC executive blog.

"As consumers seek trustworthy financial institutions, credit unions worldwide have seen an uptick in growth and membership--especially during the recent years of economic crisis and recession," Branch wrote. "Over the last few years, credit unions flourished as consumers took their savings and business needs to the safety of these depository institutions. From 2007 to 2010, membership around the globe increased to 188 million, up 11 million from just a few years before."

Innovation has allowed credit unions to expand into new areas of business in remote rural areas, Branch added. Widespread access to wireless communications and declining technology costs have allowed credit unions to deliver services without investing in the traditional brick-and-mortar infrastructure.

Shared branching has linked together many credit unions in Latin America, he wrote. And the use of mobile devices has empowered credit union members in Kenya, Mexico, Ecuador and Haiti, where credit unions have partnered with telephone companies so members can move money from their accounts using their cell phones.

To read the article, use the link.

Branch also recorded a video greeting used at the Singapore National Cooperative Federation's formal launch of its International Year of the Cooperative (IYC) activities last week. The United Nations has designated 2012 as International Year of the Cooperative. Use the link to see WOCCU's Special IYC blog.

Home-loan transfers could be the next BTD--ACUMA

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ANAHEIM, Calif. (11/16/11)--With hundreds of thousands of consumers nationwide already having  transferred their financial accounts to credit unions from banks as a result of the Bank Transfer Day movement, some believe consumers now will pay more attention to credit unions as viable mortgage lenders.

"We know millions of Americans are pleased with the service and rates offered at many of our nation's leading credit union home lenders," said Bob McKay, chairman of the American Credit Union Mortgage Association (ACUMA) (PRNewswire–USNewswire Nov. 11).

The revised Home Affordable Refinance Program Refinance Program (HARP) overhaul recently announced by President Barack Obama--and known as HARP 2--pertains to existing loans currently held by Fannie Mae and Freddie Mac, and could add to opportunities for credit unions, said ACUMA.

Although details of HARP 2 will not be released for a few weeks, rumored changes include expanding HARP to home-loan borrowers who are more than 25% underwater.  Also, there could possibly be some type of government waiver of underwriting violations on loans made to high-risk borrowers--which would attract private lenders who are worried about involvement with HARP-sponsored loans.

"Credit unions have stayed the course, conducted their business affairs truly in the best interest of their members, even when the temptation of huge profits were being reported by many other lenders," McKay said. "The reward for maintaining our high level of professionalism and trust may now expand our ability to serve many more homeowners for refinance and purchase money loans in the future."

Scam campaigns cause CUs to take proactive steps

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MADISON, Wis. (11/16/11)--Several scam campaigns nationwide have prompted credit unions to take proactive steps to combat fraud.

Some examples are:

  • Kaiperm Northwest CU, Portland Ore., has instituted a security program that prohibits transactions in "high-risk areas" that include Britain, Spain and Hong Kong. The $55 million asset credit union also said it may restrict debit card transactions with merchants "proven to be high risk", such as Apple's iTunes and Michael's craft stores. It urges members to notify the credit union when they plan a vacation or go shopping at a high-risk area. Kaiperm said it maintains a list of retailers on its website that have been problematic and are likely to have debit transactions blocked. The website also keeps a list of countries known for scams ( Nov. 12).
  • Several Wisconsin credit unions have notified members of a new vishing scam in Southeastern Wisconsin, in which bogus automated messages are left on consumers' voice-mail systems, including cell phones. The messages, which appear to originate from Google Voice, pretend to be from the credit union's security department and tell members their debit card has be restricted for shopping. Callers are prompted to press "1" to be transferred to the fake security department and asked to give out their account information ( Nov. 11).
  • Two Great Falls, Mont., credit unions--the $85 million asset Great Falls Teachers CU and the $173 million asset Montana FCU--have warned members about a smishing scam directed to their cell phones that tells them their credit or debit cards have been compromised. Recipients receive a text message on their cell phones. The message reads "WELLS FARGO NOTICE: Your Card 4868* has been DEACTIVAT$ED." Recipients are given a phone number to call and told to press "1," then provide their account information. The credit union advised members to hang up and call the credit union or card company (Great Falls Tribune Oct. 21).
  • Members of Georgia United CU, Duluth, Ga., including a half dozen Rockdale County sheriff's deputies, have been hit by debit card fraud in which clones of their cards are used in Los Angeles to make purchases and drain the victims' checking accounts. The common denominator in the scam: the cards are used at Los Angeles 7-Eleven ATMs, according to Sgt. Jodie Shupe at the Rockdale County Sheriff's Department. Georgia United CU has been commended by the sheriff's department for making sure all members' accounts were made whole for their losses ( Nov. 11).

Consumers prefer online card applications over mobile

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NEW YORK (11/16/11)--While an increasing percentage of consumers access their credit card accounts online, there's still a way to go to get them to access their accounts via mobile applications, according to research by Auriemma Consulting Group.

Nearly half of U.S. adults surveyed who use credit cards said they would apply for a credit card online, while 26% indicated they would mail in the application. Another 13% would call a toll-free number, and 12% would go to a branch at a financial institution to apply for the card, said Auriemma (American Banker and Bank Technology News Nov. 14).

Of those surveyed, 75% said they access their credit card accounts online. That compares with 64% in a similar study in March 2009 and 60% in April 2006.

Roughly 13% said they access their account information with a smartphone or tablet, and less than 6% accessed it through text messaging, said Auriemma. However, of those who used a mobile application, 90% said they had checked their card account balance and 70% had either viewed their payment history or made payments through the mobile device.

The study indicated that consumers who are younger and affluent (with more than $50,000 in annual income) are more comfortable with online and mobile access to their credit card accounts, said Auriemma. 

Auriemma, based in New York and London,  said its results are based on a September poll of 509 U.S. card users online.

AARP Chase froze accounts family switched to CU

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MADISON, Wis. (11/16/11)--An article in the November issue of the AARP Bulletin tells the story of a Monroe, Wash. family that switched its accounts to a credit union after megabank Chase froze their accounts.

One Saturday in August, on their daughter, Lindsay's 10th birthday, Meagan and Mike Farrell received a letter from Chase informing them that their accounts would be closed in 10 days. With an excellent credit history and no record of bouncing checks, the Farrells thought the letter was part of a mix up.

But after talking with at least eight bank employees, the family learned that no one could provide an explanation.

When the Farrells visited a local Chase branch on the following Monday, their checking and savings accounts had been frozen, causing several checks to bounce.

Chase eventually acknowledged a communication error on its part and reopened the Farrells' accounts, but only after the media and federal regulators became involved.

By that time, the Farrells had moved their accounts to a local credit union.

Meagan Farrell said that if such an incident could happen at Chase, it could also happen at another bank.

Paper Four areas of focus for community FIs in 2012

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DES MOINES, Iowa (11/16/11)--Four areas community financial institutions (FIs) will focus on in the year ahead is the subject of a new released white paper from The Members Group (TMG).

"On the surface, things may appear calm, but underneath currents are swirling and business fundamentals and structures are being transformed rapidly," writes Shazia Manus, TMG CEO, in the white paper "The Road Ahead: Four Very Important Competetencies for Community FIs in 2012." "CEOs and their executive teams, boards and staff must begin the strategic-visioning process by asking a tough question: Does our business model still work?"

The answer will lie in the answer to these questions:

  • Why is the credit union still in business?
  • Who is the strategic focus of the business?
  • What does the business offer that the target market finds valuable?
  • Is the business uniquely structured to deliver that value better than its competitors?
Manus goes on to explore each of the four areas of focus:

  1. Profitability;
  2. Efficiency,
  3. Product/service mix; and
  4. Deeper customer relationships.
Manus also shares what tactics CEOs will use to help their organizations compete better.

Deeper customer relationships will stem from a larger commitment to cross-selling, said the paper.

Several new CU mergers announced

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MADISON, Wis. (11/16/11)--Mergers continue to reshape the competitive landscape for credit unions.

Among the latest mergers in the works:

  • Community 1st CU, Ottumwa, Iowa, with $359 million in assets, and Mental Health Institute (MHI) CU, with $2.2 million assets, Mount Pleasant, Iowa, have announced their merger. MHI CU will temporarily continue to operate at its location inside the Mental Health Institute. Plans are under way for a location off site to open membership to residents of Mount Pleasant and surrounding communities.
  • Apple FCU, Fairfax, Va., completed its merger with Synergy One FCU, Manassas, Va., on Nov. 1. Apple is the continuing institution, adding $180 million to its $1.3 billion in assets, 45 new employees and $116 million in loans.
  • Peninsula Methodist FCU, Crisfield, Md., with $300,000 in assets, has merged into Dover (Del.) FCU, which has more than $300 million in assets.
  • The Kansas Department of Credit Unions and the National Credit Union Administration have given preliminary approval for a merger of $385 million asset Credit Union of America, and $70 million asset First Choice, both of Wichita, Kan. The merger must still be approved by the memberships of both credit unions.

Members OK Mid-AtlanticVACCORP merger

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MIDDLETOWN, Pa., and LYNCHBURG, Va. (11/16/11)--The memberships of Mid-Atlantic Corporate FCU and VACORP FCU have approved the merger between the two organizations, it was announced Tuesday.

The formal merger date is expected to be Feb. 4, with Mid-Atlantic Corporate as the continuing charter.

The merger had been approved by the National Credit Union Administration (NCUA) on Oct. 27, after which ballots were sent to the members of the Middletown, Pa.-based Mid-Atlantic and the Lynchburg, Va.-based VACORP. The announcement, made at a meeting of VACORP members in Richmond, Va., after tallying ballots from both corporates' members, said the vote was "overwhelmingly" in favor of combining.

Mid-Atlantic's total assets on the date of the merger are projected at $4 billion, with $130 million in Perpetual Contributed Capital (PCC) and $10 million in Nonperpetual Capital Accounts (NCA).

Capital ratios are forecast at:

  • Retained earnings ratio of 0.55%;
  • Leverage ratio of 4.73%;
  • Tier 1 risk-weighted capital ratio of 23.80%; and
  • Total risk-weighted capital ratio of 25.21%.
The combined corporate will have more than 800 members.  By year end 2012, Mid-Atlantic Corporate forecasts that retained earnings ratio will be at 0.68% and the leverage ratio at 5.04%.

"This merger will give us the opportunity to grow the usage of our products and services, helping to keep costs down for all members," said Jay Murray, president/CEO of Mid-Atlantic Corporate. "This exemplifies the power of credit unions working together for a common good and demonstrates the value of the cooperative corporate model that credit unions built."

VACORP President/CEO Don Chapman noted that the combined entity would enjoy increased economies of scale. "Further, VACORP members will benefit from a broader array of products and services, and it will ensure continuity of high quality service--a key priority to us."

As with Mid-Atlantic Corporate's current members, the VACORP member credit unions joining Mid-Atlantic Corporate are required to make a capital commitment as a condition of membership.

Mid-Atlantic Corporate will maintain its current location in Middletown, Pa.  Its directors, supervisory committee and officers will continue after the merger, said the joint announcement.

CU System brief (11/15/2011)

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  • INDIANAPOLIS (11/16/11)--Doug True has been named CEO of FORUM CU, effective Nov. 11. True has been with the credit union for more than 20 years, most recently serving as its chief lending and technology officer. He was an original member of the Filene i3 group of innovators and is treasurer of the Indiana Credit Union League, where he spearheaded the development of the ignite Indiana program, an innovation think tank of credit union professionals in the state.  He was architect of FORUM's wholly owned subsidiary, FORUM Solutions and served as president of the company. The credit union, which is celebrating its 70th year in 2012, has 12 branches, serves more than 100,000 members and employs nearly 300 people in central Indiana …

More media coverage after sixth week of record growth

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MADISON, Wis. (11/15/11)--At the risk of sounding like a broken record, credit unions began their sixth week since Sept. 29 of drawing in new members fed up with bank fees, educating new members, and basking in the positive press that continued through this past weekend.

National media such as Fox Business, Bloomberg,  CBS Radio and Huffington Post continued to seek analysis from the Credit Union National Association. See related News Now story, "CUNA's Hampel tells Fox: 'Bank Transfer Season' has begun," in today's Washington section.

Georgia Credit Unions published this full page ad to thank members for joining credit unions. (Photo provided by the Georgia Credit Union Affiliates)
Meanwhile, leagues and local credit unions noted credit unions' success in regional and local media and continued to gather stacks of media clips of positive stories in their states. Some local media declared the Bank Transfer Day event a success.

"The numbers [of new credit union members] suggest that the movement worked," reported The Trenton Times. "Credit unions in Mercer County  reported significant jumps in both consumer interest in their products and in new accounts coming in."  New Jersey Credit Union League President/CEO Paul Genile told the publication that "this is just the beginning of what we're going to see. There's such a learning curve as to what is a credit union, and the whole Bank Transfer Day kind of cut that learning curve."

Georgia Credit Union Affiliates (GCUA) said Georgia's credit unions received "good coverage,"especially in The Atlanta Journal-Constitution, which published several stories last week and during Bank Transfer Day. On Monday, Georgia credit unions published a full page ad in thanking consumers for joining credit unions. (See ad.) For the articles, use the links.

The Wall Street Journal ran a column about the benefits of switching to smaller banks or credit unions while U.S. News & World Report (Nov. 14) wrote on "Seven ways credit unions are better than banks." (See related article,"U.S. News & World Report: Seven ways CUs better than banks" in theSystem section of today's News Now.)

Weekend coverage continued to focus on "wrap ups" of the impact of Bank Transfer Day, which was Saturday Nov. 5.  Some outlets, including American Banker, reported skepticism about credit unions' growth numbers, but most agreed that a customer shift did occur, reported the Electronic Payments Coalition, which tracks media reports on the issue. "Opinion coverage continued to characterize Bank Transfer Day and the general consumer shift as a positive for consumers and the free market," said the coalition's newsletter.

CUMIS sues former CU manager on embezzlement losses

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BELLE VERNON, Pa. (11/15/11)--CUMIS Insurance Society Inc. of Madison, Wis., has filed a lawsuit against a Pennsylvania man for allegedly using a credit union's credit cards and money to make personal purchases.

The suit was filed in U.S. District Court in Pittsburgh against Gerald W. Jackson, 51, for actions while serving as CEO of BVA FCU in Belle Vernon, Pa. (Pittsburgh Tribune-Review Nov. 14).

Jackson allegedly made $67,493 in purchases using BVA's corporate credit card, and also used BVA's Lowe's card to make $36,425 in purchases, including five $500 gift cards, the lawsuit alleges.

CUMIS also alleges Jackson used credit union funds to pay for labor done at his personal residence, to buy construction materials and equipment for another business, to rent a boat for personal use, and to pay dues at a country club for himself and an acquaintance.

In the four-count lawsuit filing, CUMIS alleges fraud, breach of fiduciary duty, conversion and unjust enrichment. BVA FCU saw losses totaling $261,436. CUMIS is seeking $223,436 plus fees and expenses.

CUMIS recently has sued several individuals who have caused losses to credit unions that it insured.

CUMIS is a property and casualty insurance company that provides fidelity insurance solutions to credit unions in the U.S. It offers credit unions packages of protection, business auto, and workers' compensation liability programs.

IU.S. News and World ReportI Seven Ways CUs better than banks

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MADISON, Wis. (11/15/11)--In the aftermath of the Occupy Wall Street movement,  U.S.  News & World Report Monday noted that many Americans are looking to do business more with local businesses and financial institutions, as opposed to large corporations and banks.

The publication listed "seven ways credit unions are better than banks." Credit unions:

1. Make consumers a top priority. Credit unions work in the best interest of members, not stockholders. Therefore, they offer better customer service. Credit unions are more focused on ensuring they provide members with a high level of service and competitive rates.

2. Have low or no minimum-balance requirements. Credit unions lower balance requirements so maintaining an account is less stressful, while corporate banks continue charging high fees for dropping below a minimum balance on savings and checking products.

3. Offer lower fees on financial products. When they shop around for a loan or a checking account, consumers will find that credit unions usually offer lower fees on basic transactions. A local credit union can probably offer the best financial products and packages. Most credit unions still offer free checking with no strings attached

4. Have lower interest rates. Credit unions usually offer lower interest rates on mortgages and credit cards. Many offer the most competitive rates for mortgages, personal loans and credit cards. Nonprofit credit unions also are less prone to add on fees for different loan products.

5. Secure the member's funds. Deposits at a credit union are insured up to $250,000 by the National Credit Union Shared Insurance Fund. Members have the same level of risk as customers at a regular bank.

6. Offer bonus checks. Profits can be divided up into bonus checks for members rather than shared with a few stockholders. Members should check with their local credit unions to find out what types of bonus programs are provided to members annually.

7. Are less restrictive in credit eligibility requirements. Consumers should consider applying for a loan through a credit union if they've been denied a loan from a large bank. Many credit unions are willing to work with consumers who have a low credit score. Credit unions also can make exceptions for unique circumstances--such as going through a bankruptcy or being self-employed.

In another article published last week, U.S. News & World Report advised consumers who are looking to credit unions to check out membership requirements, fees, availability of services and interest rates. The article also urged consumers to check that a credit union they are interested in is insured by the National Credit Union Administration.

Delaware CUs governor meet on fin empowerment programs

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DOVER, Del. (11/15/11)--The Delaware Credit Union League and six credit unions attended a meeting at Delaware Gov. Jack Markell's office in  Dover, Oct. 31, to find ways for the state and credit unions to collaborate in creating financial products and services for consumers.

Attending a meeting at Delaware Gov. Jack Markell's office in Dover, Oct. 31, to collaborate in creating financial products and services for consumers, were, from left: Dion Williams, Del-One FCU, Dover; Henry Smith and Mary Dupont, Division of Health and Social Services; Patrick Mahaney, Delaware Credit Union League; Markell; Sharon Schaeffer, Delaware First FCU, Wilmington; Meredith Jeffries, New Castle (Del.) County Delaware Employees FCU; David Clendaniel, Dover FCU; Maurice Dawkins, American Spirit FCU, Newark; and Joel Romaine, Community Powered FCU, Newark. (Photo provided by the Delaware Credit Union League)
Mary Dupont, Delaware director of financial empowerment, arranged the meeting. Henry Smith, deputy director of the Delaware Department of Health and Social Services, also attended, said the league (Together Nov. 15).

Markell said he is a fan of financial empowerment programs. He encouraged the state to forge a relationship with credit unions in this area.

Delaware credit unions urged state agencies to include credit unions as a viable partner in empowerment programs.

It was pointed out that the Limited Investment for Financial Traction (LIFT) program currently only applies to banks.

The LIFT initiative, championed by Markell, is a program that uses $5 million from the state's Strategic Fund to subsidize the interests on small-business loans.

Credit union activists who attended the meeting were:

  • Patrick Mahaney and Alice Smith--Delaware league;
  • Maurice Dawkins--American Spirit FCU, Newark;
  • Joel Romaine--Community Powered FCU, Newark;
  • Dion Williams-- Del-One FCU, Dover;
  • Sharon Schaeffer--Delaware First FCU, Wilmington;
  • David Clendaniel--Dover FCU; and
  • Meredith Jeffries--New Castle (Del.) County Delaware Employees FCU.

Attendees shared information on consumer friendly products to help those who struggle financially.

Family FCU Fed Mexican consulate test remittance program

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WILMINGTON, Calif. (11/15/11)--The Federal Reserve Bank, the Mexican Consulate and Family FCU, Wilmington, Calif., have launched, "Financial Corridors to Mexico: Los Angeles to Mexico," a collaborative effort to provide safe and affordable financial services to immigrants and their families on both sides of the border.

The Directo a México program offered by the Central Bank of Mexico and the Federal Reserve will link any U.S. financial institution to any other in Mexico, including Mexican Cajas Populares (credit unions) through La Red de la Gente and Banco del Ahorro Nacional y Servicios Financieros, and to unbanked individuals in Mexico through Telecomm-Telegrafos.

Financial Corridors to Mexico seeks to increase the speed and safety transactions, lower the cost of sending remittances to Mexico and reduce the number of unbanked in the U.S. and Mexico by encouraging individuals and families to work with regulated financial institutions on the receiving end of the transactions. This, in turn, allows U.S. financial institutions a means to provide international payment services and a better service to their clients, according to the National Federation of Community Development Credit Unions.

Family FCU is a low-income designated community development credit union serving nearly 2,000 low- and moderate-income predominantly Latino residents of Wilmington and surrounding areas. The credit union has assets of nearly $10 million.

The Mexican Consulate's "consulate on wheels" will spend up to a month at the credit union to help undocumented immigrants qualify for Individual Tax Identification Numbers, consular identification and other documents that legally allow immigrants to be served by U.S. financial institutions.

CUs post-BTD challenge Building deep relationships

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MADISON, Wis. (11/15/11)--Bank Transfer Day and the weeks leading up it brought credit unions about 700,000 new members. Now credit unions face the challenge of converting dissatisfied bank customers to long-term, productive members.

At many credit unions  the relationship building begins during the account opening process. For example, $1 billion asset Elevations CU, Boulder, Colo., uses what Assistant Vice President Dennis Paul calls the "human switch kit," whereby the credit union member representative drives the migration of direct deposits and electronic fund transfers between financial institutions.

"We've found that the perception from new members is that it's a very complicated process," Paul told News Now. "We take the burden off the consumer and put it on the credit union. I can tell you that new members are amazed, and much more willing to bring us their business."

During the account opening process Elevations also conducts a free "Reality Check," a thorough review of the new member's credit history.

"We've found that free credit reports and monitoring services really aren't what they claim to be," Paul said. "For example, they might show consumers their credit report but not their credit scores, or they might charge an additional fee for more information. Reality Check is a top-to-bottom look at the members' credit history. We also look at every loan they have and compare them with our products side by side. Our goal is not to put products in the member's hands unless it is going to benefit them."

Elevations did not run any special promotions leading up to Bank Transfer Day, mainly because it is not in a primary Bank of America market, Paul said. Still, the credit union added 732 new members in October, a 75% increase over a typical month.

BECU, in Tukwila, Wash., reported that 659 people opened accounts on Bank Transfer Day in one branch alone.

The $9 billion asset BECU faces an additional challenge in engaging new members: Because the credit union operates primarily out of tellerless branches, much of its account-opening process is geared toward member education.

The credit union has 45 branches, of which only two have tellers. The remaining are what are what the credit unions terms "Neighborhood Financial Centers," equipped with ATMs. BECU also has two contact centers, one in the Seattle area and another in Spokane, Wash.

"It's not just about educating new members that we don't have tellers; it's educating them about why we don't have them," said Toby Travis, BECU senior marketing strategist. "It's about operating more efficiently, creating a better return for the members in offering better rates."

Next, new members must learn about BECU's remote delivery options. Travis calls the BECU's online banking platform the "Rosetta Stone" of its retail delivery strategy. The credit union also employs remote deposit capture.

"For us, it's not about product wrapping until new members are comfortable with who we are and how they can gain access to their accounts," Travis told News Now.

"We know we are not the right financial institution for every consumer," added Todd Pietzsch, BECU public relations manager.

But BECU's operating model does allow it to provide very competitive products, Pietzsch added. During the account opening process, new members are apprised of the Member Advantage account, which offers better rates on savings and loans if members receive e-statements and use specific electronic services.

"We also have strong confidence in our staff that they can save members money by transferring a credit card balance or a loan from another financial institution," Pietzsch told News Now. "We know our rates are competitive, and that helps in leveraging that first point of contact."

Texas Trust CU, with $695 million assets, Mansfield, Texas, which added 1,248 new members during the month leading up to Bank Transfer Day, employs a process known as onboarding to more fully engage new members.

Onboarding is a systematic process of reaching out to new members using a combination of phone calls, e-mails and direct mail during the initial months they join the credit  union.

"During the first 90 days you either lose a member or gain their trust," said Amber Danforth, Texas Trust FCU vice president of marketing and public relations. That's why we want to make sure we capitalize on it."

Texas Trust begins its onboarding process, called "Embrace the Connection," by sending new members a hand-written thank you note and an owner's guide to the products and services the credit union offers.

During the next 12 weeks, the credit union's member customer information file system generates e-mails and direct mail offerings about product and services that fit the member's financial needs, including loan offers based on the member's credit score.

"The cool thing is that every communication is from the member representative that opened the account," Danforth said. "So, members do feel like they have a direct connection with someone at the credit union."

While credit unions vow to earn their new members' trust for the long haul, more than one credit union representative sensed that Bank Transfer Day was about much more than consumers making a one-time statement against big banks.

"The people that are moving from big banks are very excited, not just to open an account at a credit union, but to bring their relationships with them," said Anne Benjamin, executive vice president/chief operating officer at Redwood CU, with $1.9 billion assets, Santa Rosa, Calif. "I've worked in credit unions for 30 years and have never seen anything this unique. People are so engaged."

Redwood CU opened more than 600 new accounts on Nov. 4 and 5, more than six times the number it normally would. During October, the credit union also experienced an 83% increase in new accounts from October 2010.

"We're not seeing people joining the credit union to just to say, 'I did it,'" said BECU's Pietzsch. "They are joining because it's best for them and they're going to use it. We see them bringing their relationships with them."

CUNA Lending Council exec committee announced

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MADISON, Wis. (11/15/11)--The CUNA Lending Council announced its executive committee and officers during its 17th annual conference, Nov. 6-9 in New Orleans.

Aaron Bresko, vice president of lending, BECU, Tukwila, Wash. remains as council chair, and Bill Vogeney, senior vice president/chief lending officer, Ent FCU, Colorado Springs, Colo. will continue as vice chair.

Jason Osterhage, senior vice president/chief lending officer, Delta Employees CU, Atlanta, was elected secretary treasurer.

Two new members were elected to three year terms:

  • Stacy Fifield, vice president, consumer lending and operations support, Travis CU, Vacaville, Calif., replacing Charles Anderson, executive vice president of commercial banking, Arizona State CU, Phoenix, who did not seek re-election; and
  • Chris Oldag, executive vice President/chief operating officer, City County CU, Margate, Fla., replacing Vicki Lovett, senior vice president/chief lending officer, Suncoast Schools FCU, Tampa, Fla., who did not seek re-election.
The CUNA Lending Council executive committee also includes:

  • Michael Long, executive vice president/chief credit officer, UW CU, Madison, Wis.;
  • Bonnie Doolin, senior vice president, business development, Massachusetts Credit Union League, Marlborough, Mass.;
  • Gayle Rust Gustafson, vice president, finance services, Rivermark Community CU, Beaverton, Ore.;
  • Keith Reynolds, vice president, lending/business services, Citizens Equity First CU, San Jose, Calif.;
  • Jennifer Cowles, vice president, real estate lending, American Eagle CU, East Hartford, Conn.; and
  • Dale Frankhouse, director of business services and mortgage lending, Sun FCU, Maumee, Ohio.

CU sets loan growth record at branch opening

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BELOIT, Wis. (11/15/11)--First Community CU, with $74 million in assets, Beloit, Wis., approved more than $1.2 million in loans on Saturday during a branch opening.

First Community CU, based in Beloit, Wis., approved more than 70 loans totaling $1.2 million during a branch opening on Saturday. By 8 a.m. (CT) there were more than 50 members were lined up waiting for the loan sale to begin. (Photo provided by First Community CU)
The credit union held a $2 million loan sale to celebrate the grand opening of its new Janesville office.

The promotion featured loan rates as low as 0.99% for the first $500,000 in loans, 1.99% for the next $500,000 in loans and 2.99% for the remainder.

The first members lined up at 4 a.m. (CT) to guarantee them the lowest promotional rate.  By 8 a.m. more than 50 people were in the queue.

The loan sale ran from 9 a.m. to 12 a.m. with more than 70 loans approved. That is a loan approval almost every 2.5 minutes.

"This is by far the most successful one-day loan sale we have ever had," said Jack Gill, First Community CU president.

CUs more efficient than banks says Celent study

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BOSTON (11/15/11)--A new study comparing efficiency ratios of similarly sized banks and credit unions says that credit unions are about 10 points more efficient than banks.

Boston research group Celent noted in its study, "EfficienCU: An Examination of Bank and Credit Union Efficiency Ratios by Asset Tier,"  that "credit unions are consistently more efficient than banks of the same asset tier."  In its comparison of efficiency ratios from 2004, 2206, 2008 and 2010, it noted "a noticeable disparity between relative efficiency" of the two groups.

Celent obtained bank efficiency ratios from Federal Deposit Insurance Corp. reports and calculated credit union efficiency ratios based upon the FDIC formula: noninterest expense less the amortization expense of intangible assets, as a percentage of the sum of net interest income and noninterest income, said Celent.

The minimum viable size for a bank is between $100 million and $300 million in assets, while the limit is roughly half that for credit unions, said Celent.  "Reasons for this disparity can be seen in the way each type of institutions handles product lines, customer centricity, commercial banking, resource sharing, and technological investment," said the report's abstract.

"Celent sees no reason why this disparity in relative efficiency will not continue into the future," it added.

"Credit unions don't participate in commercial lending, which is an 'inefficient' part of banking.  They also have shared service centers, which enable more scale and greater efficiency," said Bart Narter, senior vice president of Celent's Banking Group and author of the report.

For more information, use the link.

CU System briefs (11/14/2011)

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  • LANCASTER, S.C. (11/15/11)--Founders FCU, based in Lancaster, S.C., announced last week it will return $10 million to its members in dividends.  Members will receive an average $100 in their savings account on Nov. 30, with the amount depending on the members' account balances as of Oct. 31 (Associated Press Newswires Nov. 11).  The dividend is to thank members who have struggled during the economic downturn, said President/CEO Bruce Brumfield, saying that members need the money more than the credit union does now (Charlotte  Observer Nov. 11).  The credit union is paying the dividend because its financials are $6 million better than budgeted.  Also, the credit union's board decided to give its 490 full-time employees a $1,300 one-time bonus. Part-time employees received $650.  The member dividend marks the fifth time in 11 years that members have received a dividend. This year's was the largest …
  • TRENTON, N.J.  (11/15/11)--City of Trenton Employees CU President David G. Tallone, who is also president of AFSCME Local 2286, was charged Thursday with fraudulently obtaining $51,000 in city contracts by using impersonation and forgery ( Nov. 11). He allegedly used his sister's name on contracts to provide food for city and election campaigning events on at least five occasions between April 2007 and May 2011, according to the charges. The Faulkner Act prohibits city employees from contracting with the city to provide goods and services. He faces up to five years in prison and a $15,000 fine for each charge …
  • NAPERVILLE, Ill. (11/15/11)--The Illinois Real Solutions program conducted its secondin-person meeting for the year for its credit union partners to update credit unions on a number of products and services it offers in the realm of youth financial education, credit counseling and other areas. Attendees heard about and tried out a smaller-scale version of a reality fair that can be conducted in a classroom in about 45 minutes.  They also learned about free tools on website for financial counseling through and learned about, a budgeting program for kids ages five through 16 and, an online budgeting tool. Shown here discussing the student loan programs they offer are, from left: Greg Anderson, senior vice president/chief operating officer of University of Illinois Employees CU, Champaign; Lisa Anderson, Great Lakes CU, North Chicago; and Matt Hancock, consumer and business lending manager, Motorola Employees CU, Schaumburg.  (Photo provided by the Illinois Credit Union League) …
  • ALBANY, N.Y.  (11/15/11)--The Credit Union Association of New York's CEO/Manager Roundtable in Syracuse, N.Y., for credit unions with assets up to $50 million, attracted 40 credit unions. The event focused on compliance, social media strategies and lending. George Towle, partner with The Rochdale Group Inc., spoke about issues important to CEOs and the future of their credit unions.  John Bricker, sales executive with CUNA Mutual Group, discussed  CUNA Mutual's strategic direction and initiatives to help smaller credit unions grow and thrive. Other updates included were provided by New York Credit Union Foundation Executive Director Diane LaVigna-Wixted; Jessica Herishko from Columbia Greene FCU about the association's Young Professional Commission;  Jackie Carlson of Alloya Corporate FCU; and CUANY's director of compliance, Michael Carter, who discussed vendor due diligence and online member authentication rules.  (Photo provided by the Credit Union Association of New York) …

No media letup on where membership growth occurred

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WASHINGTON (11/14/11)--Throughout last week, extensive news coverage across the nation continued to focus on the record consumer shift to credit unions and the impact of Nov. 5th's Bank Transfer Day.  Most of the coverage shifted from the national arena to local coverage, especially local television coverage in states that released statistics about the exodus to credit unions.

The Credit Union National Association (CUNA) has continued to monitor the coverage and estimates that in addition to national media coverage, roughly 150 television stations throughout the U.S. ran segments on the consumer shift to credit unions--on Nov. 4 and Nov. 5 alone--all citing national estimates from CUNA's survey of credit unions' growth since Sept. 29.

The latest statistics:  700,000 new accounts at credit unions since Sept. 29, including 40,000 from Bank Transfer Day alone. During the period credit unions saw an influx of $4.5 billion in new deposits from new and existing members.

The statistics noted that 650,000 new accounts recorded in the month prior to Bank Transfer Day set a monthly record.  CUNA's estimates from records going back to 2001 indicate that the previous monthly record was 93,425 new members in August 2010.

The $4.5 billion in new deposits did not set a monthly record. For example, members deposited roughly $15 billion into credit unions in February.  However, the increase in deposits suggests that the recent 4% annualized trend growth in deposits rose by 50% to roughly 6% deposit growth annualized, CUNA said.

As the week progressed and state leagues received CUNA's state-by-state estimates,  many leagues distributed that information to local media and coverage picked up on local television stations, newspapers, and online sites. Often, local media continued to offer examples from credit unions in their area with sudden growth spurts in the wake of debit card fees announced--and later rescinded--by Bank of America and other large banks. Many stations interviewed consumers who told why they switched from a bank to the credit union, which generated more positive coverage about the benefits of credit unions.

CUNA's statistics indicate that the more pronounced growth was on both coasts of the U.S., as well as in urban areas and areas where the Occupy Wall Street rallies were taking place.  Areas with large concentrations of community banks or little megabank presence were less likely to report high levels of dissatisfaction among consumers and those areas seem to have had less transfer activity. However, not enough responses state by state were collected to pinpoint specific geographic differences.

Meanwhile national media examined the impact Bank Transfer Day and the rush to credit unions has had on banks.  An American Banker article noted that these events would not likely have a large impact on mega banks. Forbes published an opinion-editorial that said the shift to smaller institutions would be good for entrepreneurs. That provided an indirect boost for credit unions' and CUNA's  push to raise the member business lending (MBL) cap to 27.5% of assets from 12.25% to allow more credit unions to make MBL loans. Raising the cap would inject $13 billion into the economy through MBL loans  and help generate 140,000 new jobs without cost to the taxpayer. The Washington Post reported the impact of the Dodd-Frank Act on small banks and credit unions.

And a blog on the website of research powerhouse J.D. Powers and Associates featured CUNA's statistics and a link to a News Now story about the numbers.

Another significant footnote, besides the intensity of the coverage, is its length. Credit unions are enjoying far more than the typical media standard of "15 minutes of fame." They've enjoyed a solid seven weeks of extensive positive coverage and achieved more in making the public aware of the credit union difference than they could in years' of promotions.  As a result, credit unions are hoping this is just the beginning of a long, steady flow of new members and opportunities.

Study Big banks risk losing big bucks--185B in deposits

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WASHINGTON (11/14/11)--Bank Transfer Day had a positive impact on credit unions' membership but practically no impact on community banks, and an unestimated impact on the big banks, which are staying mum about accounts they lost as a result of consumers' dissatisfaction with high fees.

The Independent Community Bankers Association (ICBA) reported that community banks saw little of consumers' mass exodus from big banks on Bank Transfer Day Nov.5.  An unscientific quick poll ICBA conducted Nov. 7 among its members indicated that only 3% of community banks responding saw an increase in customers as a result of National Bank Transfer Day.  Seventy-five percent of those polled said they had not seen an increase, and another 22% said they didn't know. 

That contrasts  with a similar poll ICBA conducted on Oct. 17, when community bankers were asked if they had gained customers who have transferred from larger financial institutions out of frustration with their practices. In that poll, 57% said yes, 26% said now, and 7% didn't know.

The grassroots campaign that resulted in 700,000 new member accounts at credit unions since Sept. 29--the day it was revealed Bank of America planned to charge the now-rescinded $5 a month fee for debit card use--has sparked predictions about the implications for big banks.

The 10 largest retail banks are at risk of losing $185 billion of their deposits over the next year as customers move their accounts to more consumer friendly institutions, according to a survey of 5,600 bank customers conducted by Wilton, Conn.-based consulting firm cg42 and released Wednesday. That survey found that half of those polled are uncomfortable with how large some banks have grown; 71% said their banks do not have consumers' interests at heart; and 70% said they want to spread out their relationships among several banks (American Banker Nov. 9).

The survey, conducted in June, said the bank most vulnerable to consumers switching accounts was Bank of America and indicated that 10.3% of BofA customers could defect to other financial institutions during the next 12 months. The second most vulnerable bank to losing possibly losing customers was Citibank, followed by Wells Fargo, Capital One and JPMorgan Chase. The least vulnerable banks were PNC, SunTrust and U.S. Bank, the survey found.

CUs react to Wisconsins new concealed-weapon law

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MADISON, Wis. (11/14/11)--Wisconsin credit unions likely will chart their own paths in response to a state law that went into effect Nov. 1 allowing people who have obtained a concealed-carry license to carry a concealed weapon--such as a firearm--on them.

Most of the state's big banks don't intend to post signs prohibiting concealed firearms because of the difficulty in policing a ban on weapons for bank customers, said The Milwaukee Journal Sentinel (Nov. 6). Once posted, a bank must enforce the ban, and many banks have not finalized their approach.

That's true for some credit unions as well. "We have not finalized our conceal-and-carry policy right now," Rebecca Gerothanas, senior vice president of marketing at Summit CU in Madison, told News Now. "We will probably know in a week or so."

Other credit unions follow policies set by companies whose employees they serve. For instance, Aurora CU in Milwaukee is part of Aurora Health Care. "We follow the Aurora Health Care policy and  don't allow concealed weapons," Mary Pike, Aurora CU member service representative, told News Now. She said the credit union posts signs that indicate it forbids weapons on the premises.

"It's been a huge topic of discussion for us, and we haven't adopted a policy yet," Cathy Tierney, president/CEO of Community First CU in Appleton, told News Now. "We have a board meeting on Nov. 28 and I will go to the board with a recommendation to post [signs prohibiting concealed weapons]. I'm sure the board will accept the recommendation.

"A lot of credit unions and the Credit Union National Association have been discussing this a lot," she added. "Some people in the northern part of the state gave negative feedback on banning concealed weapons because there are a lot of hunters up there. Our employees wanted us to post. Out of 300-plus employees, only a handful didn't want us to post."

The other factor to posting is immunity. "My understanding is that if a credit union or any organization does not post, there is supposedly immunity under the law if something happens, such as someone getting injured or killed,' Tierney said. "You're immune from having responsibility. If you do post, you may give up your immunity--the question is what are you doing to monitor and make sure."

However, immunity is an untested concept, according to Community First's attorney, she added. "Until there is case law that really clearly defines it, it is a risk-reward situation," Tierney said.

Each credit union will have to determine what is best for it in terms of its policies regarding members coming into branches with concealed weapons, Chris Henzig, director of communications for the Wisconsin Credit Union League, told the Journal Sentinel.

"We don't advise [credit unions] one way or another," Henzig told the newspaper. "From what I know, different ones are going different directions on it."

Wisconsin is the 49th state to have a concealed weapons law, and it hasn't created many problems elsewhere, the paper said.

Many credit unions and banks in several states already ban hats, hoods and sunglasses to help thwart robberies.

iTheStreet.comi CUs among three hot trends

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MADISON, Wis. (11/14/11)--"Credit union" is among the top three "hot trend" Internet searches cited by a Wednesday article.

"'Credit union'" is trending as momentum continues to build in new memberships at credit unions following Bank Transfer Day, which occurred this past Saturday, Nov. 5," the article said.

The article cited Credit Union National Association (CUNA) statistics that on Bank Transfer Day alone, 40,000 consumers joined credit unions nationwide, depositing $80 million into their accounts. CUNA also announced that credit unions across the country added 650,000 new members in October.

Bethpage (N.Y.) FCU, saw an 85% increase in memberships during the five weeks leading up to Bank Transfer Day, compared to the same period year ago, said. Bethpage FCU also opened 1,471 new checking accounts during a one-week Bank Transfer Day promotion, the article said.

BECU, Tukwila, Wash., added 699 new members on Bank Transfer Day, a 40% increase from a typical Saturday, the article said.

CU System briefs (11/10/2011)

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  • BROOKLYN, N.Y. (11/14/11)--Polish & Slavic FCU, the nation's largest ethnic credit union, has elected Marzena Wierzbowska as its first female board chair, the credit union announced (PRNewswire Nov. 10).  It also elected four new directors: Malgorzata Gradzki, Beata Klar-Jakubowski, Leon Kokoszka, and Marzena Wojczulanis. Wierzbowska, who is in the middle of her second term on the board, completed journalism and political science studies in Poland and studied psychology at New York University. She has served as the director of the Legal and Social Services program at the Polish Cultural Foundation in Clark, N.J., and was director of the Community Action Program and manager/coordinator of the municipal ESL teaching program organized by the city of New York.  (Photo provided by the New Jersey Credit Union League) …

  • OKLAHOMA CITY, OKLA. (11/14/11)--Oklahoma credit unions recently raised $30,000 through a wine-tasting event to support the Credit Union House in Oklahoma City.  State credit unions own the facility and use it for meetings and industry gatherings. More than 250 people attended the wine tasting at the Credit Union House on Sept. 29. The event was sponsored by The Cellar and Pop's of Arcadia, and the presenting sponsor was CUNA Mutual Group. Door prizes were awarded along with a grand prize package of a trip for two to Napa Valley in California …

Marketers ignore customer complaints on social media

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NEW YORK (11/14/11)--The double-edge sword of social media turned around and bit big banks in the days leading up to Bank Transfer Day, to the benefit of credit unions' membership and deposits growth. According to a new poll that reports a "disconnect" between companies and customers' complaints, banks should have responded to customers' complaints raised on social media.

How best to deal with negative buzz is a perennial question, said (Nov. 10), reporting on a survey of U.S. company executives conducted in September by feedback management software provider MarketTools.

The study found that 34% of the executives polled know their customers used social media such as Twitter and Facebook to complain about their products and services. But nearly half of those surveyed (44%)  think that their customers don't comment or complain about their products and services online, and 22%  don't know.

"While it's possible that some business-to-business companies really don't have to worry much about customers turning to Twitter to vent their frustration, for consumer-facing firms, the probability seems high, raising the question as to whether executives are aware enough of online complaints."

The survey also found that while a sizeable number of marketers respond to customer complaints on Facebook or Twitter at least some of the time, many leave questions and negative feedback completely unanswered. On Twitter, 29% said they responded to such feedback "seldom" or "never."  On Facebook, 17% said the same.

"Consumers may not be happy with this frequency of response," said "Research tends to show that social media users want businesses to answer them, and that an interaction with a company representative online can defuse negative feedback sometimes simply by offering attention.

What's the lesson in this for credit unions?  More credit unions are using social media as a channel of communications with their members.  If the credit union gets feedback--constructive or otherwise--address it and acknowledge it.

Social media added wow factor in movement to CUs

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MADISON, Wis. (11/10/11)--While all the media coverage of consumers' exodus from banks to credit unions certainly helped get the word out about the benefits of credit unions, don't underestimate the power of social media' in what at least one media outlet called the "stampede" to credit unions.

Social media played a key role in the chain of events from Sept. 29 through Bank Transfer Day--the kind of role that communications academicians and consumer behaviorists will study for years.

One lesson learned "is the power of social media," said Massachusetts Credit Union League President Daniel F. Egan Jr. in his president's message to credit unions in the league's monthly newsletter (Values & Visions November).  "Being aware and involved with social media sites can help you interact in this new environment in a positive way. It has far reaching and dramatic effects on the public perception of many institutions in our society," Egan wrote.

As The Baltimore Sun put it, when Kristen Christian got angry at Bank of America's fee, "she did what many people do these days when they get mad: She put it on Facebook. What followed was an illustration of the power of social media" (Baltimore Sun Nov. 5).  On Oct. 4, she urged 500 of her Facebook friends to abandon their banks. Suddenly 75,000 people had pledged to participate in Bank Transfer Day. And that, said the Sun, culminated in the mass rush to credit unions.

News Now realized that Bank Transfer Day could be a serious move for credit unions after a reader forwarded a link to the Bank Transfer Day Facebook page initiated by Christian. What caught News Now's attention was the response to that page and to other similar pages. Credit union members had written in about how great their credit unions were and how they weren't charged the fees the big banks had charged. They tweeted their testimonials to others, put the information on their own Facebook pages and commented on blogs. It was a marketer's dream.

Members, in discussing their own credit union experiences, provided a direction  that disgruntled consumers could take. Realizing the potential to attract more members, credit unions took it from there. They used their own social media to get the word out about how credit unions are a better deal. To reinforce their message, many developed their own ads  and promotional campaigns and offered incentives. Some, such as Bethpage FCU, created special microsites to urge consumers to try out the credit union. On Saturday alone, it generated 672 new accounts.

The rest has made credit union history:  700,000 new members, $4.5 billion in new deposits.

Just reporting on the events brought record numbers. News Now's home page received more than 1 million hits in October. Typically the page receives 500,000 hits a month. In May, it received 300.  Although it doesn't publish on Saturdays and Sundays, the site received more than 5,900 hits on Saturday, which was Bank Transfer Day, and 4,900 on Sunday.  Its top story on the event attracted 11,000 viewers.

Sites for consumers to locate a credit union--including and all time highs: 69,999 hits Friday and 62,000 hits on Saturday, Bank Transfer Day.  Even on Monday-- after the Bank Transfer Day was officially over--the site received 29,000 hits.  The typical average is 2,000 to 3,000 hits.  After a story on Fox Business News, the site received so many e-mails that it froze up the search engine.

In New Jersey, between Nov. 1 and 6, New Jersey credit unions received 45,315 hits on the credit union locator sites, nearly quadruple the number received in an average month, reported the New Jersey Credit Union League (The Daily Exchange Nov. 7).

"I think we may look back in a few years and say that this was the spark that caused a lot of people to say, 'Yes, credit unions are a better deal,'" CUNA President/CEO Bill Cheney told the Baltimore Sun. "Because at a credit union, the members are the shareholders."

In a state that received one of the biggest boosts in new members in October, Texas Credit Union League President/CEO Dick Ensweiler said he was confident that the newest members "will continue to discover all that their credit unions have to offer, and will take advantage of  savings on loans, credit cards and other financial products. With the help of social media and consumer advocates, people across the country are discovering credit unions and are making the move" (LoneStar Leaguer Nov. 9).

CUNA announces 2011 Maxwell Herring Award winners

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MADISON, Wis. (11/10/11)--Recipients of the 2011 Dora Maxwell Social Responsibility Community Service Award and the Louise Herring Philosophy-in-Action Member Service Award were recently chosen from among the state winning entries by Credit Union National Association's (CUNA) national awards committee. 

The 2011 Dora Maxwell Award first-place winners include:

  • Marinette County ECU in Marinette, Wis.;
  • Joplin Metro CU in Joplin, Mo.;
  • General CU in Fort Wayne, Ind.;
  • Space Age FCU in Aurora, Colo.;
  • Alabama CU in Tuscaloosa, Ala.;
  • Marine FCU in Jacksonville, N.C.;
  • State Employees' CU in Raleigh, N.C.; and
  • Western Chapter of the North Carolina Credit Union League, Penrose, N.C.
First-place winners of this year's Louise Herring Award are:

  • Communicating Arts CU in Detroit, Mich.;
  • St. Louis Community CU in St. Louis, Mo.;
  • Credit Union 1 in Anchorage, Alaska; and
  • Eastman CU in Kingsport, Tenn.
"The winners of these prestigious awards embody the philosophy and ideals of our movement, and we are honored to celebrate their achievements," commented CUNA President CEO Bill Cheney. 

"It's no wonder that so many consumers are turning to credit unions these days, which are led and guided by individuals such as these to ever higher levels of service to their members. Commitment to community involvement and member financial education remain at the core of credit union success, and these award winners have demonstrated their personal commitment to these core values for credit unions. Congratulations to them--and to all in the movement who share and practice their values," Cheney said.

Maxwell was an original signer of CUNA's constitution and organizer of hundreds of credit unions throughout the U.S. She also developed volunteer organizer clubs and worked with organizations on behalf of the poor.

The Maxwell award is presented to credit unions in eight asset-size categories and a chapter or multiple credit union group category for outstanding social responsibility projects in their communities. Activities may include: solving core community problems, coordinating supply drives for the needy, raising money or organizing special events for charitable organizations, or mentoring students.

Herring was also an original signer of CUNA's constitution when she was an Ohio delegate to the 1934 national credit union conference in Estes Park, Colo. She saw credit unions as more than just financial institutions and believed they should work to better people's lives.

The Herring award is given to a credit union demonstrating the internal application of credit union philosophy to help better financial matters and increase financial education for its members.  Examples include: exceptional member service, financial counseling for members experiencing difficulties, and educating members on the credit union difference. 

Winning entries will be on display at CUNA's 2012 Governmental Affairs Conference, March 18-March 22, in Washington, D.C. The award winners will be honored during a March 21 reception.

Use the link for the full list of winners.

Colombias CUs adopt WOCCU model to expand financial inclusion

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MADISON, Wis. (11/10/11)--Through its Banca de las Oportunidades program, the Colombian government has invited World Council of Credit Unions (WOCCU) to replicate its Semilla Cooperativa [cooperative seed] rural outreach model to expand financial inclusion in some of Colombia's most marginalized areas.

WOCCU's three-year, $2.5 million program will use mobile technology to bring financial services to 100,000 previously unbanked people in rural and low-income communities nationwide.

WOCCU is working with 12 established credit unions and their 182 points of service to implement Semilla Cooperativa, a savings-based approach in which credit union field officers travel into nearby communities to provide financial services directly to members in a group setting. Beyond increasing membership among rural and low-income communities, the WOCCU program aims to expand the credit union network by at least 10% and develop new microcredit and microsavings products to meet new-member needs.

"Colombia's credit unions grew out of a need for greater financial access in areas of the country that other financial institutions were not reaching," said Brian Branch, WOCCU president/CEO. "Over the years, we have worked with the credit unions to strengthen operations, develop new products and expand outreach. Now we are ready to see how much farther they can reach using mobile technology and a model that has successfully brought access to thousands of Mexico's poorest families."

The Semilla Cooperativa model evolved from a recent three-year WOCCU program in Mexico, where 250,000 people living in marginalized rural communities became credit union members, exceeding the program's targeted 15% market penetration. The credit unions improved efficiency and financial inclusion with new technologies, including personal digital assistants (PDAs), point-of-sale devices, handheld printers and ATMs.

Credit union field officers trained in the model use PDAs and handheld printers to enroll new members, record savings and loan payments, and process small loan applications in the communities they visit. Their monthly visits save members time and money by not having to travel to the credit union, and the technology provides a secure and efficient way to process transactions.

In Colombia, WOCCU will use a similar approach to reach markets that are either geographically isolated or have not joined the formal financial system due to a lack of tailored products and the transaction costs related to reaching the nearest credit union branches. The program builds on the achievements of WOCCU's 2008-2010 program in the country, also funded by Banca de las Oportunidades, in which nine credit unions with 48 points of service streamlined operations to better serve their members and build a foundation to expand to outlying communities.

By the end of the program, credit union membership had increased by 28% (49% of which were women); institutional capital grew by 52%; and the number of savings accounts increased by 43%. Four of the program credit unions are among the 12 participating in the current program.

WOCCU helped Colombia establish its first credit unions 50 years ago. Today the sector has grown to 192 credit unions that serve more than 2.2 million people nationwide.

Catalyst shares balance sheet strategies with Belize CUs

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PLANO, Texas (11/10/110--Bryan Turner, director of advisory services for Catalyst Strategic Solutions, shared balance strategies with 130 attendees at the the Belize Credit Union League's annual meeting and training conference, held in San Ignacio, Belize, last month.

Turner's session was part of a relationship that Catalyst Corporate forged with the Belize credit union league more than five years ago.

The presentation--one of four concurrent sessions during the daylong training event---focused on financial management. The session leaned toward the basics, Turner said, with an emphasis on financial management concepts and balance sheet strategies.

The credit union movement in Belize resembles a U.S. credit unions in the 1960s, Turner said. Lending at credit unions in Belize is caught in a balancing act "between character and collateral," he added. While there appears to be an emphasis on placing members first, Turner said that philosophy must be balanced with financial fundamentals.

The credit union system in Belize serves working individuals in the city and in rural regions. Belize has 13 credit unions, with 12 belonging to the Belize league. Though some are common bond, the larger institutions are community-based, and offer consumer lending and agricultural lending products.

Britain passes dereg package for CUs

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LONDON, England (11/10/11)--A deregulatory package created to help British credit unions and cooperatives more effectively compete and grow has been approved by the British Parliament.

The Legislative Reform Order (LRO) will go into effect Jan. 8. The far-reaching changes will help credit unions and cooperatives in several ways (M2 Presswire Nov. 9), including:

  • Allowing credit unions to accept new types of members, such as partnerships and limited companies;
  • Allowing credit unions to offer interest on deposits;
  • Amending common-bond and membership requirements to allow expansion, consolidation and mergers; and
  • Giving credit unions and cooperatives the flexibility to choose their own year ends and removing the requirement to have interim accounts audited.
"Credit unions in Britain are delighted that legislation reforms have been agreed by Parliament and which free up the sector to compete on a more level playing field," said Mark Lyonette, chief executive of the Association of British Credit Unions (ABCUL). "ABCUL has campaigned long and hard for these changes, so we're happy that credit unions will be able to use the new powers from the New Year."

Lyonette also has called for credit union services to be made available to consumers through Britain's post office network, following an announcement that people no longer will be able to use post office branches to manage the National Savings and Investments savings products (ENP Newswire Nov. 7).

Two California mergers One approved another filed

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SACRAMENTO, Calif. (11/10/11)--Two California credit union mergers are in the works, with one being approved and another filed last month, according to the California Department of Financial Institutions (DFI).

Pomona, Calif.-based Inland Empire CU's plan to merge into Credit Union of Southern California, Whittier, was approved June 16.

The $40 million asset Inland Empire has one branch and 14 employees. Credit Union of Southern California has eight branches and $584 million in assets. It has a multiple group charter, serving primarily educational groups.

North Orange County CU, Fullerton, Calif., filed its plans to merge into Credit Union of Southern California with the California DFI on Oct. 5. North Orange has one branch and $60 million in assets. It has a government charter.

Vermont CUs visit Peru CUs

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SOUTH BURLINGTON, Vt. (11/10/11)--A group of 11 representatives from North Country FCU, South Burlington, Vt., and Vermont FCU, Burlington, Vt., visited Lima, Peru as part of the World Council of Credit Union's (WOCCU's) International Partnership Program.

The group was led by John Benoit, chief operating officer of North Country, Bernie Isabelle, president/CEO of Vermont FCU and Joe Bergeron, president of the Vermont Credit Union Association (Newslines Express Nov. 4).

The group visited the Peruvian trade association, Federación Nacional de Cooperativas de Ahorro y Crédito del Perú (FENACREP), then split into separate multi-day meetings with Pacifico, NorthCountry's partner, and Aeulcoop, Vermont FCU's partner.

The credit union partners will learn about each other's operations and their respective countries' governance structures, then determine how their partnerships will evolve in the future.

The Vermont association has been consulting with FENACREP on advocacy, the creation of a deposition insurance system and development of an ATM network and debit card program.

Pacifico and Aelucoop are the second and third largest credit unions in Peru. The largest, Abaco, is partnered with Heritage Family FCU, Rutland, Vt. All three are based in Lima, Peru, and share a Japanese heritage connection, though they have open memberships.

While in Lima, the Vermont group also visited Peru's Congress, where they met with the chair of the Committee on Production, Micro and Small Business and Cooperative Banks.

CU System briefs (11/09/2011)

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  • MILWAUKEE, Wis. (11/10/11)--Rick Roy, CUNA Mutual Group senior vice president and chief information officer, has been named the 2011 Chief Information Officer of the Year in the Enterprise category by the Wisconsin Chapter of the Society of Information Management (SIM) and the Business Journal of Milwaukee, Wis. The SIM Wisconsin awards highlight the significant role of technology, said Jeffery Melcher, present of SIM Wisconsin and director of technology support and energy delivery at We Energies. The Enterprise category comprises companies with more than 1,000 information technology users. Under Roy's leadership, CUNA Mutual has received several awards, including the CIO 100, InfoWorld 100, Insurance Networking News' INNovators award and InformationWeek's 500 Most Innovative IT Organizations …
  • PARAMUS, N.J. (11/10/11)--Greater Alliance CU, a $156.2 million asset credit union based in Paramus, N.J., is celebrating what it calls "Veteran's Month," as opposed to just Veteran's Day on Friday (The Daily Exchange Nov. 4). As part of the month-long celebration, Greater Alliance is offering all current members of the armed forces or veterans who either already are members of the credit union or who join in November, 0.5% off any personal, debt consolidation, or vehicle loan rate ...
  • LOUISVILLE, Ky. (11/10/11)--Trenea Eversole, a member at Park Community FCU, Louisville, Ky., captured the $5,000 first-place prize in the credit union's second $aving Families Challenge. Eversole reduced her debt more than $20,000 over 10 months. Douglas and Wendy Pederson took the second place prize of $2,500. Catrina Lowery captured the third-place prize of $1,500. Margaret Davis won the fourth-place prize of $1,000. Each family set goals such as purchasing their first home, getting out of debt, starting a college savings for their children or increasing their 401(k) balance. As a group, the participants reduced their debt nearly $50,000, increased their net worth more than $79,000, and increased their credit scores a total of 210 points …

Veterans Day is Friday no INews NowI

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Veterans Day is Friday, no News Now

WASHINGTON and MADISON, Wis. (11/10/11)--The Credit Union National Association's offices in Washington D.C. and Madison, Wis., will remain open Friday for Veterans Day, a federal holiday.

News Now will not publish a Friday issue, but will resume regular publication on Monday.

Maine lawmakers recognized for being on board with CUs

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PORTLAND, Maine (11/10/11)--The Maine Credit Union League honored four state lawmakers who are part of credit union family last month at its Legislative Forum.

Click to view larger image Maine Credit Union League President John Murphy, left, presented state Rep. Herb Clark (D-Millinocket) with a special award as one of four state lawmakers who currently also sit on credit union boards. (Photo provided by the Maine Credit Union League)
Of the 151 members of the Maine House, four are credit union board members, the largest contingent of credit union board members ever serving in the legislature at the same time, said the league (News & Views November).

Legislators recognized are:

  • Rep. Herb Clark (D-Millinocket), currently serving his 12th, non-consecutive term in the Maine House. He is vice-chair at Katahdin FCU, where he has served on the board since 1996.
  • Rep. Michel Lajoie (D-Lewiston), serving his second term in the House. Lajoie is in his 14th year as a volunteer at Lewiston Municipal FCU, where he is currently board chair.
  • Rep.  John Picchiotti (R-Fairfield), serving his first term in the House. Picchiotti is current board chair at KSW FCU and is a member of the legislature's Insurance and Financial Services Committee, which hears many measures impacting credit unions.
  • Rep. Ken Fredette (R-Newport), serving his first term in the House.  Fredette is a 15-year board member and past board chair at Sebasticook Valley FCU.
"Having individuals that not only support credit unions but who, as a credit union board member, bring that perspective to issues and legislation and what the impact would be to credit unions and members is invaluable," said John Murphy, league president. "We are fortunate to have four board members currently serving in the legislature. They are great advocates and friends, and we appreciate their efforts and service."

CUs examining next steps to keep new-member momentum

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MADISON, Wis. (11/9/11)--Credit unions have barely had time to catch their collective breath from a month of giddy, record-breaking membership increases, but already they are thinking ahead on what to expect this week and beyond.

Even though Bank Transfer Day has passed, many credit unions are still working to attract new members. The promotions and ad campaigns that many credit unions used leading up to Bank Transfer Day won't end there.  For many, BTD is just the beginning of their campaigns, some of which will last through December.
In Pennsylvania, First Capital FCU Branch Manager Sharon Miller, right, opened an account for a new member Saturday, one of about 40,000 new members who switched to credit unions on Bank Transfer Day. (Photo provided by the Pennsylvania Credit Union Association)

David Bennett, spokesman for the Northwest Credit Union Association, told The Register-Guard (Nov. 8) that the shift has been significant and is irreversible. In addition to new accounts coming into credit unions, existing members are shifting all their accounts to credit unions. "There were a lot of record-setting days at our credit unions on Saturday," he said. "The movement right now of people toward credit unions is unprecedented."

Greater Alliance FCU Hackensack, N.J., said it may step up its marketing efforts as it attempts to keep up Saturday's momentum. "It's good for us because the general consumer is learning that they have a better alternative than just joining a regular bank," said Glenn Guinto, the credit union's vice president for operations (The Record Nov. 8)

Meanwhile, credit unions continued to report on their progress with Bank Transfer Day.

Bethpage (N.Y.) FCU, the largest credit union in Long Island, opened a record 1,471 new checking accounts during its one-week BankTransfer Day promotion, compared with 383 accounts opened the same week a year ago. Of those, 672 were opened on Saturday. It has seen $100 million increase in deposits since Sept. 29, the date Bank of America's $5 debit card fee was disclosed. The consumer outcry forced the bank to rescind the fee last week.

"Bank Transfer Day provided frustrated consumers the opportunity to leverage their voices, realizing the valuable options credit unions offer, and until the mega banks eliminate all new monthly checking account fees, consumers' frustration and discontent will continue," said Kirk Kordeleski, president/CEO of Bethpage, in a press release.

Many of the new accounts were existing members, who received $100 for opening a checking account and turning in their old bank cards or checks. More than 900 members received the offer and all those on site were eager to learn more about the credit union difference, he said.

Charlotte (N.C.) Metro FCU, which opened about 75 accounts this weekend--more than four times its usual weekend business, said that is branches are closed on weekends--so the traffic was all online. It also reported it opened about 1,400 new checking accounts in October, compared with its normal monthly average of 400 (Charlotte Observer Nov. 8). "We have yet to see a slowdown," Chief Operating Officer Nicol Morris told the newspaper. "Through the week, I think we'll still see a decent amount of activity."

Most of the North Carolina's credit unions were closed last weekend, said Jeff Hardin of the North Carolina Credit Union League. The branches that were open reported a modest increase of traffic. "We suspect that it's obviously going to slow down, but we think there is going to continue to be the momentum that we've seen as people continue to evaluate their options," Hardin told the newspaper. "We just invite people to look at credit unions."

Earthmover CU, Montgomery, Ill., told the Montgomery Patch that it wasn't just the weekend but the days leading up to it that produced its growth in members. "I started to notice it the week before. We got a lot of people calling and coming in, and quite a bit coming back to get accounts opened," Doug Williams, manager of the Montgomery branch,  reported to the newspaper.

Northwest Community CU in Oregon was surprised to get 41 new accounts Saturday, said CEO John Iglesias (The Register-Guard Nov. 8). Membership growth was already 300% above normal in October. "We didn't expect to get any more on Saturday, but we did. I don't see it slowing down any time soon," he told the newspaper.

Associated CU, based in Norcross, Ga., added 889 accounts in the past week, more than double its average weekly gain after robust growth in October, said The Atlanta Journal and Constitution  (Nov. 8). It opened 90 new accounts at branches on Saturday, plus 50 new accounts this weekend via the Internet. Normally, Saturday attracts 15 new accounts.

The Georgia Credit Union Affiliates told the newspaper that many credit unions aren't open weekends. Still, Georgia credit unions welcomed more than 14,500 new members since the end of September and gained $101 million in new deposits during that time.

Delta Community CU, Atlanta, reported opening 150 new accounts Saturday, up from its normal 60 to 80 accounts. However it added more than 4,000 accounts overall in October, up 150% from its average month, said the newspaper.

Will consumers continue to shift away from the big banks? University of Louisiana at Lafayette Finance Professor Linus Wilson told the Atlanta newspaper he wasn't sure. However, he added that the Occupy Wall Street movement seems to be holding its momentum. "And if that's the barometer of how mad people are getting, it would indicate there is still momentum to people wanting to move" their accounts.

Mike Beall,  president/CEO of the Missouri Credit Union Association, noted in Maryland Heights   that the 131 credit unions in Missouri added 7,100 new members who transferred $49 million into the credit unions.   Vantage CU reported that consumers were coming into the credit union, saying they were with Bank of America and wanting to see what the credit union offered.

"We think consumers have wised up to the concept that banks will continue to charge large fees one way or another," Beall told the newspaper. "We think this will continue as a trend." He said credit union members even brought in friends and family members to make the switch and noted that "banks are on notice that they will not be able to deliver huge profits to their shareholders on the backs of their customers. They will have to re-think their business model on this."

Ohio and Michigan reported large numbers of consumers converting to credit unions. In Ohio, 15,000 new members enrolled in credit unions and added $106 million in deposits from Sept. 29 to Oct. 29, Patrick Harris, spokesman with the Ohio Credit Union League told The Blade (Nov. 8). That compares with 30,000 new members  a year.

Harris also noted that Bank Transfer Day gave credit unions the opportunity to dispel myths about credit unions, such as few locations and restrictions on who can join.

At Glass City FCU, Maumee, Ohio, new accounts totaled 121 in October, up from 100 in September, and through Sunday had added 28 new accounts so far in November. Glass City spokesperson Sarah Ritenour told the newspaper that "We also noticed that it wasn't just new members that we were receiving. Our current members who just have savings accounts, came last month and opened checking accounts with us."

David Seeger, president/CEO of Great Lakes CU, Sylvania, Ohio, noted that the bankers' fees turned out to be "the greatest Christmas gift we could ever get. It's pretty good marketing for us."

Tech CU nations first FI to offer P2P from ATMs

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SAN JOSE, Calif. (11/9/11)--Beginning in early 2012, Technology CU will be the first financial institution in the nation to enable real-time, person-to-person (P2P) payments from its ATMs to nearly anywhere in the world using a new payments service.

The $1.3billion asset credit union based in San Jose, Calif., will use a new payments service from NCR and PayPal.

"With just a mobile phone number and a few taps on a Tech CU NCR SelfServ ATM, Tech CU customers will be able to make P2P money transfers quickly, easily and securely to anyone's PalPal account," said Dan Schatt, general manager of financial innovations for PayPay.

To use the service, the member will sign in to the ATM, enter the recipient's contact information, and choose the amount to transfer. The funds will be immediately credited to the recipient's PayPal account. Recipients without PayPal accounts will need to create one to receive funds.

Tech CU President/CEO Barbara Kamm noted that ATMs, mobile phones and online banking are increasingly becoming the main channels members use for banking and the new service will spur more financial interactions through those channels. "We plan to have this capability on all of our electronic platforms by early next year so that our members can choose the payment or transfer option that's most convenient for them," Kamm said.

Speaker Fast furious reg environment a challenge

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NEW ORLEANS (11/9/11)--The pace, complexity and timing of today's regulatory changes are unprecedented and will require credit unions to rethink the way they do business, a CUNA Mutual Group regulatory expert said Tuesday.

Bill Klewin, lending compliance leader, CUNA Mutual Group, tells Lending Council attendees of the 17th annual CUNA Lending Council Annual Conference in New Orleans about the many current and future regulatory challenges credit unions are facing. (Photo provided by CUNA Mutual Group)
Bill Klewin, CUNA Mutual lending compliance leader, speaking at the 17th annual CUNA Lending Council Annual Conference in New Orleans, outlined current and pending regulatory issues that will tax staff, be expensive and potentially have a negative impact on the way credit unions serve members.

"The regulations, coupled with the effect of the new Consumer Financial Protection Bureau (CFPB), will impact all areas of a credit union's operation, including debit and credit cards, home equity and consumer loans, tellers, the way you process mortgage loans, H.R. compensation plans and auditing, to name a few,"  Klewin said.

Although it isn't clear yet what approach the CFPB will take, it appears the agency is data driven, he added. "They may take a disclosure or change in a rule and take it to the people affected to determine a course," Klewin said. "It's a remarkably different approach, and the old way of doing disclosures may go right out the window. It may make sense but it would be very foreign to how credit unions and regulators are accustomed to operating."

He encouraged credit unions to use the comment-period process, which he called a "meaningful opportunity to have influence as regulators do read the material. It's an opportunity for your voice to be heard on proposed rules, so credit unions should exercise their democratic right and speak up."

Now more than ever, credit unions won't be able to just spend time on compliance, they'll need to maintain a sharp focus on it, Klewin added. He stressed the importance of having a person in the credit union accountable to compliance issues. Noting that because compliance staffers aren't "the most loved person in the organization, it's important that they report at a certain level and not be subject to influence by business areas of the credit union," he said.

A key to making this position effective is finding quality staff who are capable of handling complex compliance issues, sophisticated and knowledgeable, and good at everything they need to do.

"You can build, buy or rent for this important position," he explained. "One, you can take someone from within your organization and give the training and tools to be good at it, or you can go out and buy someone with a proven track record of compliance expertise, but that can be expensive," he said.

Another alternative is to outsource some of the work, such as the credit union's documents business, Klewin added. "You can put it in the hands of a provider that's been in the business and knows the regs. It can take a huge burden off your shoulders," he said.

"The bottom line on this is we're operating in a new world, where you have to think of compliance organizationally, because it will affect almost every aspect of your business," Klewin said. "The pace of new regulations is daunting. Not only will credit unions be challenged but regulators will be, too."

CUNA Mutual honors excellence in lending at Council

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NEW ORLEANS (11/9/11)--Five credit unions, including a double winner, were recognized for their lending prowess Monday with CUNA Mutual Group's Excellence in Lending Awards at the CUNA Lending Council's 17th annual conference in New Orleans.

Excellence in Lending winners were announced by CUNA Mutual Group at the CUNA Lending Council's Annual Conference Monday in New Orleans. From left, are: Dan Murray, CUNA Mutual vice president, who presented the awards; John Dolan, Charter Oak FCU; Ted Bangert, Black Hills FCU; Julie Ernis, Texell CU; Roger Montes and Oscar Saavedra, Latino Community CU; Greg Baker and David Kennedy, CEO, University of Kentucky FCU; and Bill Vogeney, vice chair, Lending Council. (Photo provided by CUNA Mutual Group)
Dan Murray, CUNA Mutual Group, vice president, presented the 12th annual awards to:

  • University of Kentucky FCU, Lexington, Ky.: Consumer Lending, more than $250 million in assets. The credit union has grown its indirect business from 1,600 deals with $29 million in originations in 2009 to more than 2,600 deals with $51 million in originations in 2010.
  • Texell CU, Temple, Texas: Consumer Lending, less than $250 million in assets. Texell grew its lending nearly 27% in 2009 and 35% in 2010. That resulted in the highest loan-to-share ratio in Texell's history, higher average loan balances and net charge-offs below peer and industry averages.
  • Charter Oak FCU, Groton, Conn.: Mortgage Lending, more than $250 million in assets. An economic downturn that severely hurt its vehicle loan business prompted Charter Oak to implement a diversification strategy. The credit union became Eastern Connecticut's No. 1 mortgage lender with more than 1,000 mortgages ($130 million) originated in 2010.
  • Latino Community CU, Durham, N.C.: Mortgage Lending, Less than $250 million in assets. In 2010, LCCU experienced loan growth of about 20%, and an overall loan yield of close to 7% while limiting loan losses to less than 1%, despite many of its members having no credit history.
  • Black Hills FCU, Rapid City, S.D.: Business Lending. Black Hills took a disciplined approach to blending business lending into its corporate culture as a core product offering.
  • Latino Community CU: Low to Modest Means. The credit union delivered the overall lending products and services to meet the membership needs of many previously unbanked Latinos in North Carolina.  LCCU's attributes its 2% delinquency rate to its award-winning financial education program, despite much of its membership having no credit history.
"A record of nearly 50 credit unions were nominated for 12th annual awards and they were quality applicants," Murray said. "It's a credit to the ingenuity and resiliency of our nominees to achieve this kind of success during times of high unemployment, a poor housing market and low consumer sentiment.

CUNA Mutual Group, with support and expertise from the CUNA Lending Council, established the Excellence in Lending Awards in 2000 to recognize credit unions that have implemented outstanding lending programs while demonstrating sound financial performance. The annual awards provide an opportunity for credit unions to share best practices and ideas, build networks, and recognize and celebrate lending excellence.

PCUA foundation provides 195K in flood relief

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HARRISBURG, Pa. (11/9/11)--Disaster relief flood aid totaling nearly $195,000 was presented to 239 credit union employees and members of 35 Pennsylvania credit unions to assist victims in recovering from severe flooding along the Susquehanna River Basin.

Lonny Maurer (left), CEO of Belco Community CU, Harrisburg, Pa., presents a disaster relief check to Ada, a credit union member, after severe flooding impacted several areas of the state in September. (Photo provided by the Pennsylvania Credit Union Association)
The Pennsylvania Credit Union Association (PCUA) and the Pennsylvania Credit Union Foundation (PCUF) announced the awards this month.

The effort was the Pennsylvania credit union movement's first use of the National Credit Union Foundation's (NCUF) CUAid Emergency Relief program, which was established in 2006 in the aftermath of the Hurricane Katrina disaster in 2005 (Life is a Highway Nov. 8).

In support of the effort, PCUA contributed $50,000; PCUF, $100,000; and NCUF's CU Aid Disaster Relief Fund, $45,000.

Jim McCormack, PCUA president/CEO, praised the association and foundation boards for their "generous support to alleviate the suffering of our credit union employees and members." He also spoke about "the terrible destruction of homes along a 250-mile path of the Susquehanna River, where credit unions are located near small towns.

PCUF Executive Director Joe Wambach lauded the efforts of the credit unions and the strong partnership among the association, the NCUF, and the PCUF. "That all of us were able to process so many grants in such a short period of time and to get funds to the victims of the disaster was remarkable," Wambach said.

"While the amount distributed cannot completely fill the needs of credit union employees and members, it does represent the foundation's profound concern for them, as well as our hope that the funds are a first stage in their eventual recovery," he added.

CUANY remembers past president Berris Gordon

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ALBANY, N.Y. (11/9/11)--Berris R. Gordon, former president of the Credit Union Association of New York (CUANY), died Nov. 1 at the age of 90, according to CUANY.

Gordon was with the association, then known as the New York State Credit Union League, for 14 years.  He joined in 1964 as a field representative serving the Metropolitan Chapter. In 1970, he was promoted to educational services director, where he planned and supervised the league's newsletter and other publications, league-sponsored workshops, conferences and other educational sessions. In 1978, he was unanimously appointed president of the organization's board of directors.

Before joining the league staff, Gordon served as office manager of Local One S FCU, which served New York City employees of Macy's, for 12 years. He also served as a member of the Metropolitan Chapter Council and as co-chairman of its education committee.

Gordon retired as president of the league in 1984 to pursue horticultural interests. He held the office of president longer than any of his predecessors. He is survived by his wife Joyce, daughter Wendy and other relatives and friends. His daughter Gail preceded him in death in 2009.

Calif.Nev. CUs CUMD create national CU4Kids partnership

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ONTARIO, Calif., and WASHINGTON (11/9/11)--The partnership will bring together the Credit Union Cherry Blossom Run in Washington, D.C., and the Credit Union SacTown Ten-Mile Run in Sacramento, Calif., on April 1, 2012. Officials of both races said they have high expectations for fund raising and for raising national awareness of credit unions.

From left, Juri Valdov, chairman of Credit Union Miracle Day, the title sponsor of the annual Cherry Blossom Ten Mile Run, and John Pamer, chairman of California's SacTown Ten Mile Run, announced a partnership of the two organizations during the annual meeting of the California and Nevada Credit Union Leagues in San Diego in October. (Photo provided by Credit Union Miracle Day)
Making the announcement at the California and Nevada Credit Union Leagues Annual Meeting were Juri Valdov, CUMD chairman, and John Pamer, CEO of Diablo Valley FCU, Concord, Calif., and chairman of the CU SacTown Ten-Mile Run.

Pamer, who ran in the Cherry Blossom run said he was "so impressed by the impact credit unions have had, both in terms of fund raising for Credit Unions for Kids as well as raising awareness of credit unions in our nation's capital. It occurred to me and others that California could do the same thing."

Diana Dykstra, president of the California and Nevada leagues, agreed. "I have a vision of 50 races being run on the same day across the country, raising funds for Credit Unions for Kids while at the same time highlighting the great work credit unions do in their local communities."

Officials of both groups indicated that holding the races on the same day would better position them to leverage sponsorship support and media attention.

SacTown Ten-Mile Run also will be listed as sponsor of the Cherry Blossom run, effectively doubling the impact of its donation. CUMD officials said they welcome sponsorship from credit unions across the nation and that all funds go back into the donating credit union's local hospital.

The last Cherry Blossom run raised more than $578,000 and brought the total funds raised for the hospitals over 10 years to more than $5 million. It hosted more than 15,000 runners. Credit unions have sponsored the run for 10 years to benefit the 17 million kids treated annually at Children's Miracle Network Hospitals.

CU System briefs (11/08/2011)

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  • FRESNO, Calif. (11/9/11)--Educational Employees CU, of Fresno, Calif., received the 2011 Beacon Award from the Richard Myles Johnson Foundation for its work in reaching more than 12,000 public and private school students, as well as at-risk youth and organizations such as Boys and Girls Club, with its "Wise Up!" program of financial education. The Richard Myles Johnson Foundation is the state foundation for credit unions in California and Nevada. Educational Employees CU was honored in the more-than $100-million-asset-size category.  "Wise Up!" is made up of two components. During classroom instruction, students develop a household budget based on a career they choose and net income they would receive. That is followed by an interactive section, during which students visit eight scenarios, including a credit union, utilities, and child care, to develop good money management skills. "Wise Up!" was launched in 2009. The Beacon Award is the foundation's highest honor, and recognizes "promising or exemplary financial education programs or projects that provide information to the broader credit union community and the general public." Other finalists this year were Boulder Dam CU (Nevada), Meriwest CU (San Jose, Calif.), and Redwood CU (Santa Rosa, Calif.). Pictured are, from left: Educational Employees CU Business Development Director Patty Martin, RMJ Foundation Board Chairman and Water and Power Community CU CEO Carl Stewart, and Educational Employees CU Senior Vice President of Marketing and Lending Mark Perez ...
  • NEW YORK (11/9/11)--A Malaysian man, who pleaded guilty in April to possessing hundreds of thousands of stolen credit and debit card numbers, was sentenced this week. Lin Mun Poo, 32, who also was indicted for allegedly hacking into the Federal Reserve's computers and accessing data from several entities, including credit unions and a credit union data processor, was sentenced by U.S. District Judge Dora L. Irizarry in Brooklyn, N.Y. to 10 years in prison. It was the maximum sentence he could receive. (Bloomberg Nov. 4) The U.S. Probation Office had recommended an eight-year sentence, but the judge said the longer sentence was intended to send a message to discourage others from engaging in such illegal activity. According to Assistant U.S. Attorney Cristina M. Posa, Poo was able to install a keystroke logger into a Federal Reserve Bank. She said Poo could have wreaked financial havoc through insider trading. The government had originally said Lin had stolen 400,000 card numbers but reduced that tally once it eliminated duplicates …

CU System briefs (11/07/2011)

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  • KANSAS CITY, Mo. (11/8/11)--Mazuma CU, Kansas City, Mo., announced that Brandon Michaels, vice president/chief financial officer, will succeed retiring President/CEO Rob Givens, effective Jan. 1. Givens announced his retirement in May. Michaels, who has more than 15 years in the credit union industry, joined Mazuma in September 2009. He previously was vice president of finance (chief financial officer) of San Francisco (Calif.) Fire CU.  Michaels is a third-generation credit union CEO. His grandmother is a retired credit union CEO and his mother is CEO of Western Healthcare FCU, Concord, Calif. He began his career filing loan papers for his grandmother when he was 12 years old. Michaels said he would focus on the youth movement and innovation within Mazuma. He is a part of The Crash Network, or The Crashers, comprising young credit union professionals …
  • HERNDON, Va. (11/8/11)--Northwest FCU President/CEO Gerrianne "Winky" Burks announced her retirement after 40 years of working at the $2 billion asset credit union, the past five years as CEO. Her retirement date--the end of 2012--has been part of the credit union's transition plan for several years. Burks first joined the Herndon, Va.-based credit union as a teller  in 1971. In 1986 she was promoted to her first management position as human resources manager. She also served as vice president of member services and chief operating officer for five years before assuming the president/CEO role in 2008. Burks is chairman of the Northwest FCU Foundation and the Credit Unions Care Foundation of Virginia, and is on the board of the Credit Union Executives Society. JMFA Executive Search Group is assisting in the search for a new CEO. The credit union aims to have the new CEO on board by mid-year 2012 …

BTD seen as opportunity by CUs in other countries

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MADISON, Wis. (11/8/11)--Other countries took note of the U.S. credit unions' efforts leading up to this past Saturday's Bank Transfer Day and some took the opportunity to promote credit unions as an alternative for consumers fed up with big banks in their own countries.

Meridian CU, the largest credit union in Ontario, Canada, and based in Toronto, last week noted that the grassroots movement encouraging individuals to close their accounts in traditional and publicly traded financial institutions and transfer their funds to a credit union has quickly picked up momentum in Canada (Canada NewsWire Nov. 1).

"Credit unions have been providing Canadians with financial services, products and advice for more than 100 years, yet for many Canadians--especially here in Ontario--there is still confusion about how credit unions differ from traditional banks," said Meridian CEO/President Sean Jackson.  He urged Ontarians "to take this opportunity to experience first-hand the benefits of credit union membership."

New Zealand Association of Credit Unions (NZACU), which is a member of the World Council of Credit Unions, observed that the viral campaign initiated on Facebook that is sweeping the U.S. "is poised to give huge international profile to one of the financial world's best kept secrets: credit unions"  ( Nov. 1).

With Australia's banking industry reportedly heading for a record $24 billion profit, despite the economic environment,  NZACU CEO Henry Lynch  predicted a swing towards the cooperative, member-owned financial model "in this part of the world too."

He noted that people want to make new choices about who they deal with. "A lot of people aren't aware of what credit unions offer members, and there's a growing realization that there's a really positive, long-term sustainability in the cooperative philosophy and the structure of credit unions," Lynch said.

"With 2012 being United Nations' International Year of Cooperatives, and the continuing global dissatisfaction around what many see as purely profit-driven financial service providers, the next 12 months are likely to see unprecedented growth in credit union membership," Lynch added.

CUNAs IPlan ItI wins IFolioI gold IMoneyMixI a bronze

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MADISON, Wis. (11/8/11)--Plan It and MoneyMix, two the Credit Union National Association's (CUNA) onlineEDGE personal financial education products, have won Folio: Magazine's prestigious Eddie Award, honoring their excellence in editorial content.

The awards were announced last week at the 2011 FOLIO: Show in New York City.

Plan it, an online retirement planning tool, won the gold medal for Best Consumer Website for Non-Profit Associations. MoneyMix, a financial education and planning assistant for young adults, won the bronze medal for Best Online Column or Blog.

Plan It, which was recognized for its quality content, helps pre-retirees focus attention on their financial and personal goals by allowing them to keep track of retirement funds through interactive calculators, short courses, informative articles, FAQs, quick tips and other progress tracking tools.

"We are happy to see financial publications getting to share the media spotlight with such prestigious company," said Rena Crispin, Plan It managing editor.

MoneyMix's spending blog particularly drew the attention of the Eddie Awards panel for its originality and accessibility. The spending blog, one of the many featured on MoneyMix, is filled with spending advice written by young adults, for young adults.

"To be mentioned alongside such publishing giants as Sports Illustrated and SELF Magazine is a special treat that not only speaks to the talent of our writers but to the importance of the financial advice we give young adults." Michelle Dosher, managing editor for MoneyMix.

Both Plan It and MoneyMix have won awards for editorial excellence before. As part of onlineEDGE, CUNA's suite of member-focused financial education tools, both programs won the Association for Financial Counseling and Planning Education's Outstanding Consumer Financial Information Award in 2008.

Spanning across print and online magazine disciplines, the Eddie Awards are the largest magazine awards program in the U.S. that celebrates outstanding editorial achievement in magazine publishing. This year more than 2,000 applications were submitted; 400 were selected as winners by panelists at Folio: Magazine.

Underbanked generated 45B in fee interest revenue in 2010

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NEW YORK (11/8/11)--Roughly 60 million underbanked consumers in the U.S. generated about $45 billion in fee and interest revenue for financial services providers in 2010, according to new research.

That means credit unions aiming to serve the underbanked will see competition from sectors looking to profit from this market while themselves having the opportunity to provide low-cost alternatives.

The total dollar volume of the underbanked marketplace in 2010 was roughly $455 billion in principal borrowed, dollars transacted and deposits held, said the Center for Financial Services Innovation (CFSI) and Core Innovation Capita, which released the data last week.

The results indicate a substantial need for financial products and services to serve the unbanked population, said the organizations.  The underbanked market showed strong growth in certain segments of services. For example, payment services grew 6% and credit services grew 2% from 2009 to 2010, said the groups.

They also noted "a significant revenue opportunity in providing products and services" aimed at the underbanked. Several products experienced high revenue growth rates during the period, the organizations said. Internet-based payday lending rose 35%; general purpose reloadable prepaid cards, 33%; and payroll cards, 25%.

The new data "confirm that there is a large opportunity for the financial services industry to create products and services that are both profitable for them and provide much needed solutions for this consumer segment," said Arjan Schutte, managing partner, Core Innovation Capital. "Our vision is to transform this market in a way that is significantly more profitable to the industry, will save consumers billions of dollars and help create upward mobility for tens of millions."

The groups said there are major market sectors that suggest an opportunity for more competition and that warrant greater attention.

Early reports show Bank Transfer Day success

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MADISON, Wis. (11/8/11)--For many credit unions, Saturday's Bank Transfer Day was a huge deal. Although many had seen an influx of new members throughout October after the mega-banks announced their now-rescinded debit card fees, many made record single-day strides in new accounts opened Saturday. Some reported more than 600 new members.

More definitive numbers will be available early this week, according to the Credit Union National Association. Meanwhile individual credit unions were reporting significant spikes in new accounts.

BECU, Seattle, was still counting the new accounts Monday morning but told the Credit Union National Association (CUNA) that 659 people opened accounts Saturday in just one branch.  The credit union has 45 branches. The new accounts broke all the credit union's records for opening new accounts on a single day.

Redwood CU (RU), Santa Rosa, Calif., opened more than 600 new acc
Click to view larger image Lourdes Cortez, CEO for North Jersey FCU, Totowa, N.J., talks to Hector Garcia, a brand new member who heard about Bank Transfer Day from an existing member and opened a checking account Saturday during the credit union's open house. In 2011, the credit union has attracted 4,000 new members. (Photo provided by North Jersey FCU)
ounts Friday and Saturday as a result of Bank Transfer Day and noted that is six times the normal number of new accounts.  It said its October new accounts are an 83% increase over its October 2010 growth.

"While we're thrilled to be welcoming so many new people to RCU, the real winner is the consumer or business owner who will see immediate savings and better service by making the smart decision to switch to a credit union," said Brett Martinez, president/CEO of RCU.

Others reporting new members on Bank Transfer Day:

  • Bay FCU, Calif., opened 100 new checking accounts Saturday--a third of its monthly average.
  • Pennsylvania State Employees CU opened 153 new accounts, a 50% increase on its average daily total of about 100. New accounts in October represented a 50% increase on its monthly new member total. It has introduced a two month campaign to attract more members.
  • Randolph-Brooks FCU branch in Plugerville, Texas, opened "dozens of accounts," it told The Wall Street Journal (Nov. 7).
  • San Jose CU, Calif., opened 30 memberships Saturday--half what it usually opens during a normal month.
  • Portland, Ore.-based Northwest Resource FCU noted that 200 people marched from downtown branch of JPMorgan Chase to the credit union, where 17 people opened new accounts Saturday (Oregon Live Nov. 5).
  • Rivermark Community CU, Salem, Ore., which is usually not open on Saturday, opened five new accounts at one branch, and its Hawthorne branch in Portland opened 30 accounts, with lines snaking out the door. It was an "extremely busy day," the credit union told the Statesman Journal Nov. 5).
  • Salem, Ore.-based MaPS CU reported new accounts for October were up 73% from October 2010. Since then, 64 more accounts were opened, reported the Statesman Journal.
  • First Capital FCU, Pa., opened four new accounts.
  • Schools Financial CU, Sacramento, Calif., noted that Saturday was its biggest membership day of the year, following a record October--1,064 members for the month. It did not specify the actual number of accounts opened on Saturday.
  • Educators CU, Wisconsin, which generally aims for a 5% annual increase in membership, reported a 25% increase since October 2010 in new members.
  • Landmark CU, Wisconsin, gained 945 members in October, 733 of whom opened checking accounts--"much higher than normal."
  • Affinity Plus FCU got more than 2,000 members over October--typically averages 1,000 a month. Of those new members, about 75% opened a new checking account.
  • Lower East Side People's FCU, a community development credit union in New York, had a steady stream of people opening accounts Saturday, according to NBC Nightly News.  One woman, who owns a pet grooming shop nearby, transferred all her business accounts from Chase to the credit union, saying she was going local because she was tired of bank fees and  "these are my neighbors. They walk by my shop every day." said it was business as usual Saturday, but it had added a couple of hundred accounts the past three weeks.
  • Cooperative FCU, Berkeley, Calif., opened new accounts for 38 people.  In October, the credit union totaled 316 new accounts, compared with 106 in the same month last year.
  • NuMark CU, Joliet, Ill., opened 26 checking accounts in four hours Saturday. That is 25% of its typical monthly goal. Normally Saturday brings in two new accounts at a branch.
  • Michigan Schools and Government CU, Clinton Township, Mich., received 20 new members Saturday, compared to its one or two.
  • Asheville, N.C.-based Mountain CU noted it added 17 members and 14 accounts in four houses, despite fog in the area Saturday morning.

Several credit unions mentioned that in addition to new accounts, some new members were applying for loans.

Paper Thinking younger members Look to Hispanic market

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DES MOINES, Iowa (11/4/11)--Community financial institutions (FI), including credit unions, should look to the Hispanic market to attract younger customers/members, according to a new white paper co-authored by Konrad Christensen of card processor The Members Group and Miriam De Dios of Hispanic-market strategies firm Coopera.

"The average age of a community FI customer hovers around 45," the paper said. "While it's true that consumers in this age bracket are at the height of their earning and spending potential, it's also true that these 40-somethings won't stay that age forever. For that reason, lowering the average age of an FI's customer base is on strategic minds everywhere."

Hispanic prospects are a good path to follow when pursuing a lower average age for customers/members, Christensen and De Dios suggest. The Hispanic community--of which as many as 50% are unbanked or underserved--also represents an opportunity for community financial institutions with a "people helping people" philosophy, they wrote.

The paper discusses best practices for reaching a Hispanic youth audience, including marketing and community relations tactics, product implementations and financial education programming. However, the paper also suggests that financial institutions can be successful at reaching young Hispanics through their parents.

"With a strong sense of responsibility to family, a large number of Hispanic teens are living in tight-knit households where pride and self-reliance are core values," wrote the authors. "Many have been handed down a mistrust of  financial institutions, but will follow the lead of their parents where financial management is concerned."

For more information, use the link.

U.S. bankruptcy filings down 8 for FY 2011

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MADISON, Wis. (11/8/11)--Bankruptcy cases filed in U.S. federal courts for fiscal year 2011-- the 12-month period ending Sept. 30--totaled 1,467,221, down 8% over the fiscal year 2010 bankruptcy filings of 1,596,355, according to the Administrative Office of the U.S. Courts. That is consistent with credit union loan delinquencies, which fell to a cyclical low in the past year, according to the Credit Union National Association (CUNA).

Filings dropped during the fourth quarter of the judiciary's fiscal year, with 15% fewer filings than in fourth quarter 2010, according to the statistics released Monday.

Additional statistics released Monday include business and non-business bankruptcy filings for the 12-month period ending Sept. 30; a comparison of September 2010 and 2011 filings; fourth-quarter filings; and monthly filings for the 12-month period ending Sept. 30.

For the 12-month period, business bankruptcy filings--those cases in which the debtor is a corporation or partnership, or the debt is predominantly related to the operation of a business--totaled 49,895, down 14% from the 58,322 business filings reported in the same period in 2010.

Non-business bankruptcy filings totaled 1,417,326, down 8% from the 1,538,033 non-business bankruptcy filings in September 2010.

In fiscal year 2011, filings fell for Chapter 7 and Chapter 11 bankruptcies:

  • Chapter 7 filings totaled 1,036,950, down 10% from the 1,146,511 Chapter 7 filings in fiscal year 2010; and
  • Chapter 11 filings fell to 11,979, down 16% from the 14,191 filings reported in fiscal year 2010.
The three-month period ending Sept. 30 was the judiciary's final quarter of fiscal year 2011. Total bankruptcy filings in the fourth quarter were 348,635, down 15% from the 412,380 cases filed in the final quarter of fiscal year 2010.

Credit union 60-plus-day loan delinquency rates fell to a new cyclical low of 1.51% in September, down from 1.75% a year earlier, according to CUNA's latest Monthly Credit Union Estimates for September 2011.

For more information, use the link.

Young and Free spokester Promote shared branching to Gen Y

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PORTLAND, Maine (11/8/11)--Trying to attract the under-25 crowd?  Try promoting shared branching as a convenience that's beneficial to them, says Maine's Young & Free spokester.

Seth Poplaski, who travels the state interacting with Gen Yers as spokester for the Maine Credit Union League's Young & Free program, shared his experience at the league's Statewide Awareness Committee meeting (Weekly Update Nov. 4).

He said that in interacting with young adults, he has seen the need to promote shared branching as a convenience young members want. Many in this age group don't know what shared branching is, he said.  "The main misconception many members of Gen Y have about credit unions is that they are the same as banks," he told the group. "The many new free4ME accounts that have been opened is proof that we're starting to change this."

Also at the meeting, league president John Murphy noted credit unions have opportunities to help consumers switch financial institutions by using tools such as switch kits and focusing on convenience features that credit unions offer.

The committee viewed the campaign's television commercials and noted some related to a savings theme could complement the current climate on consumer discontent with bank fees.

Mans home ownership is on the house

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RICHMOND, Maine (11/8/11)--Rather than demolish a house on a lot where Down East CU was preparing to build its new branch in Richmond, Maine, the credit union decided to offer it-- for free--to the first person who would remove the home from the premises, said the Maine Credit Union League.

Rather than using a wrecking ball to demolish a house to make way for its new Richmond branch, Down East CU, Baileyville, Maine, gave away the house for free to the first person who would remove it. (Photo provided by the Maine Credit Union League)
The $86.4 million asset, Baileyville, Maine-based credit union said it wanted to find a way to remove the home without destroying it, according to Kaj Johansen, vice president of branch operations (News&Views November).

"We did not want to put a perfectly good home in a landfill, and with the state of the economy, it would have been a shame to just tear it down," he said.

The credit union used word of mouth, its website and in-branch monitors to spread news of it plans. Soon, telephone calls came pouring in. "The response was overwhelming and members and non-members called about it," Johansen said. "Everyone really thought it was great we went this route because the home had some historical presence in the community."

The person who arrived to pick up the new home moved it just down the street, allowing the historic house to stay a part of the community.

"He could not have been any happier to get the home," Johansen said. "It's a win-win for all involved, eliminating the need to reduce the house to rubble and soon, someone will be moving into the new home."

State estimates on switching new tools released by CUNA

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WASHINGTON (11/7/11)--State-by-state estimates of member and deposit growth since Sept. 29 were released Friday by the Credit Union National Association (CUNA), whose overall report on national growth had generated much pro-credit union attention in the media last week.

The estimates cover growth at credit unions since Bank of America unveiled its $5 debit card fee, which it rescinded after  a nationwide public outcry that culminated in Bank Transfer Day, a day set aside to switch from big banks to credit unions and community banks.

The statistics are based on estimates collected from credit unions by CUNA's Economics and Statistics Department from Sept. 29 through last Wednesday. They do not include additions from Saturday's Bank Transfer Day.

The 10 states whose credit unions reported the most growth included:

  • California, with 90,100 members and $624 million  deposits into credit unions;
  • Texas, with 47,000 new members and $326 million in deposits;
  • New York, with 39,000 members and $270 million in deposits;
  • Florida, with 32,900 members and $228 million in deposits;
  • Michigan with 27,900 members and $193 million deposited;
  • Virginia, with 26,600 members and $184 million in deposits;
  • North Carolina, with 25,900 members and $270 million in deposits;
  • Pennsylvania, with 25,000 new members and $179 million in deposits;
  • Washington, with 23,300 new members and $161 million in deposits; and
  • Massachusetts, with 19,700 new members and $136 million in deposits.
Nationwide, more than 650,000 consumers opened new accounts and deposited an aggregate of $4.5 billion into credit unions during the period, said CUNA.  More than 80% of the 5,000 credit unions surveyed said they had added members since the end of September.

CUNA also developed some Web-based tools to help consumers make "a smarter choice" and consider credit union membership. Three new videos illustrating "bad choices" and challenging viewers to learn more about making a smarter choice have been uploaded to You Tub channel. The vignettes are designed to remind viewers in a humorous way that nobody's perfect and there's always an opportunity to make a smarter choice. The videos, Painting, Grill, and Dog can be accessed at the link.

Zenith of publicity making history for CUs

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MADISON, Wis. (11/7/11)--Credit unions have "made it" in terms of public awareness. On Friday, credit unions and their growth in membership since the announcement of Bank of America's $5 monthly debit card fee (now-rescinded) were being talked about by USA Today, The New York Times, The Wall Street Journal, Time, Newsweek/The Daily Beast, HeadlineNews, NBC's "The Today Show," and more.

On Friday, the day before Bank Transfer Day, credit union growth was the No. 1 story on Bank Transfer Day's Twitter site, which featured an ABC News story leading off with the statistics from the Credit Union National Association (CUNA)  indicating 650,000 consumers have already switched accounts to credit unions since Sept. 29.  Also, Twitter reported that the Bank Transfer Day page was in the top 10 pages most tweeted.

The growth in membership--650,000 new accounts and $4.5 billion in new deposits since Sept. 29--points out that consumers are seeking alternatives to high bank fees, said The New York Times Dealbook  (Nov. 4). "I think it's a last straw thing," CUNA President/CEO Bill Cheney told the Times. "Even though banks are backing up on some of their fees, there's a sense that if it's not this fee, it's going to be something else."

The Times also talked with David Becker, president of PhilippeBecker, a San Francisco design firm, who had kept his business accounts at a small local bank for years. He found shelter from fees at a small local credit union. "I called my credit union up the other day, and someone answered the phone," he told the Times. "I was like, holy smokes! I'm on a different planet!"

Among the more noteworthy articles:

  • Time's Moneyland blog noted that credit unions' new 650,000 accounts were 50,000 more than the new accounts generated at credit unions in all of 2010. It quoted CUNA's Cheney as saying that the increase is most pronounced at the nation's largest credit unions and noting that many credit unions weree extending their hours or adding staff in preparation for Bank Transfer Day.
  • reported that in just a few weeks, credit unions have witnessed a whopping 1,200% increase in new customers. "We think that traffic is coming right out of Bank of America, based on anecdotal evidence from our member credit unions," CUNA Senior Vice President of Communications and Chief Communications Officer Mark Wolff told the publication, noting that bank customers "are seeing this retreat from banks as too little, too late."
  • USA Today noted that on the eve of "Bank Transfer Day," the grass-roots backlash against higher fees, U.S. credit unions say have added more than 650,000 members and $4.5 billion in new deposits in the past month. That's 50,000 more new accounts than for all of 2010, it said citing CUNA's statistics. Cheney said in the article that many credit unions are making special efforts to tap the surging interest in credit unions.
  • NBC's "The Today Show" featured a segment with personal finance writer Jean Chatzky  on hidden fees in banks and mentioned the statistics as well.
Use the resource links to access the stories. And to get an idea of the scope of coverage, check out the resource link on 81 media sites.

Leagues are reporting increased coverage in their states as well.. New Jersey Credit Union League President Paul Gentile said that the league monitors searches for New Jersey credit unions. "The number in October is almost 10 times what it is in a typical month," he said (The Daily Exchange Nov. 4).

Credit Union Association of New York League President/CEO Bill Mellin is not surprised that Bank Transfer Day has raised awareness of credit unions significantly in the public eye.  "This increased awareness presents a great opportunity not only for credit unions positioned for growth, but for the credit union community in general to focus on the mission and purpose of credit unions, not on fees or the business model of big banks," he said. "After all, it's not the fee structure that makes credit unions different; it's the commitment they have to their members and to helping them build financial independence."

Missouri Credit Union Association Chief Membership Officer Don Cohenour explained the benefits of credit union membership in an interview with NBC Action News in Kansas City. He noted "we have seen a considerable increase [in membership] across the state."

CUs prepared for Bank Transfer Day--and the future

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MADISON, Wis. (11/7/11)--Bank Transfer Day has come and gone, with credit unions well-prepared for the extra business as consumers switch accounts from fee-toting banks. But they know that Saturday is a beginning of a bright future in terms of public awareness of credit unions and the opportunity to deepen new member relationships.

Credit unions last week reported their plans for wooing new members on Saturday, a day designated for consumers to switch to credit unions and community banks in the wake of several big banks' plans to charge debit card fees.  The Pennsylvania Credit Union Association asked its member credit unions, "Is your credit union making preparations to accommodate potential members?"  Seventy responded, with 58.6% of them indicating they were preparing for Bank Transfer Day, 32.9% saying no, and 8.6% saying maybe (Life is a Highway Nov. 3).

Many credit unions offered incentives to entice new members. Members lst FCU, Mechanicsburg, offered members "to earn a little extra money" by referring a friend to join the credit union. It also used Facebook, Twitter and a blog to promote the day.

First American CU, a part of First Community FCU, headquartered in Parchment, Mich., prepared to use Saturday to welcome and educate new members on the business model of credit unions as a not-for-profit financial cooperative.  It also is launching a member give-back program tied to its MasterCard Check Card (debit card). During November, December and January, First American and First Community will pay members up to $5 each month based on their aggregate debit card transactions. The credit union experienced a 60% increase in new members in October over October 2010. Its total membership in all regions of both credit unions experienced a 14% increase in new members and a 15% increase in new member deposits in October. 

Texas Trust CU, Mansfield, Texas, noted that too many North Texans are suffering from F.E.E. (Feeling the Effects of the Economy) Syndrome associated with their banking choices. Its prescription for a cure:  "Change where you bank."  It offered a one-dose treatment of $155 when a new member opens a Free & Flexible checking account. "Banking shouldn't include surprises that give you heartburn, headaches, or a pain in the neck," said Jim Minge, Texas Trust CU president, adding that there are no surprises at the credit union. "Anyone suffering from F.E.E. symptoms should see us for the cure."

University of Illinois Employees CU, Champaign, announced it would offer checking account holders CardCash, a 1% cash-back rewards program on non-PIN debit card purchases. Members could earn up to $250 a year in cash back for their purchases--"a distinct advantage for consumers when many large financial institutions are shutting down their debit card rewards programs and even charging monthly fees for debit cards." The credit union hoped to sign up 500 new members before the offer expired on Bank Transfer Day. It expects the campaign to net about $100,000 over the next 12 months (The Bakersfield Californian Nov. 2).

Click to view larger image Credit Union National Association's Madison, Wis., staff sported anti-banking fees T-shirts Friday in advance of Saturday's Bank Transfer Day. One says "My credit union, FEE-H8TER,  Living in credit union land" and the other says "I did the math: CU > Bank, Credit unions are a smarter choice."  Staff planned to wear the shirts on Saturday also. (CUNA PHOTO)
Many credit unions hit the media trail with special ad campaigns to let potential members know they are an alternative to high bank fees.  Kern Schools FCU, Bakersfield, Calif. budgeted $19,000 for its billboard-newspaper-online ad campaign. The price tag includes the cost of putting up a $5 membership fee for each new direct deposit member, a box of free checks and a $25 checking account deposit.

In Pennsylvania, M-C FCU, Danville, aired a commercial Friday and Saturday with a message from President/CEO Jim Barbarich emphasizing choice. "Where you conduct your financial affairs is a personal choice. Trust, confidence and value are important factors in this decision," he said.

In New York, Buffalo Postal FCU, Buffalo, made EZ Switch Kits available, aired radio ads and donated $5 to a local charity for every person who made the switch. Capital Communications FCU placed welcome banners outside and beefed up its staff Saturday. Mid-Hudson Valley FCU ran print and Web banner ads in its local daily newspapers and promoted it on Facebook and Twitter. Teachers FCU CEO Robert Allen spoke about the credit union difference on local TV and his credit union partnered with Bethpage FCU and NEFCU to launch to show locals that credit unions are a better way to bank.

Novaris FCU in East Hanover, N.J., promoted "Every Day is Bank Transfer Day" using the New Jersey Credit Union League's Banking You Can Trust toolkit. The credit union placed sandwich board posters in front of its offices to attract consumers going to work. It will rotate the messages throughout the month (The Daily Exchange Nov. 4).

One credit union decided to expand its field of membership to make it easier to attract new members. Sb1 FCU, Philadelphia, said its board voted last month to approve an expanded charter, opening up the credit union to anyone who lives, works, worships, or attends school in parts of the city, noting that now more than 638,000 Philadelphians are now free to choose Sb1 as a banking option (Life is a Highway Nov. 4).

Many credit unions already were experiencing a uptick in new member inquiries prior to Saturday. In Stevens Point, Wis., Central City CU reported it had already opened more than 240 new checking accounts during August and September--a 140% increase over the same period a year ago.

North Jersey FCU, Totowa, N.J., said it was already getting phone calls from people wanting to know what they need to bring in to open an account on Saturday. It planned special loan incentives and credit counseling on Saturday and stayed open an hour later (The Record Nov. 3)

Elevations CU in Boulder, Colo., marked the historic day, but also noted, "The credit union model is certainly not new, and Elevations CU has been serving the Front Range for nearly 60 years." Gerry Agnes, president/CEO, added that the credit union  would "welcome consumers and businesses who are seeking a viable alternative to the traditional for-profit banking model."  Agnes also noted that making the switch is easier than many think.

Those examples are the tip of the iceberg. Many credit unions beefed up staff and extended Saturday hours. But most are offering incentives that will last in hopes of cementing new relationships long after the Bank Transfer Day hoopla has died down.

Check fraud is increasing says white paper

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MADISON, Wis. (11/7/11)--A BluePoint Solutions white paper examines the common types of check fraud and related costs to financial institutions--including credit unions--then outlines methods that are effective in fighting fraud.

Even though the volume of checks is declining, checks are the most common payment method criminals use to perpetrate payments fraud against financial institutions, according to the paper, "The Changing Landscape of Payments: Lower Check Losses by Combatting Check Fraud."

Eighty percent of U.S. financial institutions have reported losses caused by check fraud, said BluePoint Solutions. Check fraud is the fastest growing and costliest method of payments fraud. Thirty percent of financial professionals reported a higher incidence of attempted or actual check payments fraud in 2010 than 2009 and a higher rate of growth than credit- and debit card fraud, corporate card fraud, and automated clearinghouse fraud or wire transfer fraud.

Many U.S. financial institutions are fighting the problem of check fraud directly by using a collaborative ap­proach, said the paper. By sharing intelligence that includes up-to-date check and demand deposit account information, these institutions have mutually benefited from pooled information to work together to reduce check fraud. They treat check fraud as an industry problem that is best handled collectively, not competitively, said BluePoint Solutions.

The single, most-critical best practice in stopping check fraud and reducing losses is to effectively push loss avoidance to the point-of-presentment, the paper advised. The earlier the potential fraud is identified, the sooner a financial institution can counteract it. This can include a combination of actions such as notifying depositors at the teller line they are depositing a suspicious check, applying an extended Reg CC hold when receiving the deposit, and adding or modifying a check hold before it is paid or returned by the paying institution.

To view the abstract and download a free copy of the paper, use the link.

Filene CUs share secrets to lending in recession

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MADISON, Wis. (11/7/11)--Twenty-three out of more than 2,200 U.S. credit unions larger than $50 million in assets grew their new- and used-auto loan portfolios by more than 5% each year between 2008 and 2010. Eleven also grew their credit card portfolios by 5%, according to a new Filene Research Institute report. Those who were successful had strengths in common.

"Superior Consumer Lenders during the Great Recession" supported by a grant from CUNA Mutual Group, is Filene's latest examination of credit union lending.

The Great Recession reduced the flow of U.S. consumer lending, and the opportunities that remained required much effort, the report said.

Filene's researchers conducted qualitative interviews with 12 of the 23 credit unions. Each of their stories is published as a case study in the full report. Despite their different regions, some key common strengths emerged:

  • Sales culture--Few credit unions said they felt like they had mastered it, but every successful lender interviewed spent a lot of effort trying to improve the credit union's sales culture.
  • Consistent underwriting--The tumult that started in 2008 pushed scores of lenders to change their underwriting or exit consumer lending altogether. Many successful credit unions held to their standards--or tightened them slightly--and kept lending through the financial crisis.
  • Refinancing-- Dropping interest rates combined with effective data mining and sales processes meant that many of the successful credit unions could capture loan growth even without a new purchase.
  • Market power--A handful of credit unions leveraged strong positions in a local economy or particular product line to make themselves first-choice lenders during the downturn.
  • Symbiotic product lines--Although the report focused mainly on auto and credit card lines, several credit unions attributed their consumer lending success to cross-selling from other, more important products like mortgages or agriculture loans.
  • Direct lending--A strong minority of credit unions interviewed got their loans the traditional way: by relying on existing members, branch traffic and steady cross-selling.
  • Indirect lending--Most credit unions interviewed captured their lending growth primarily from indirect lending. None were indirect "dabblers." Each cultivated strong dealer relationships, invested in technology, and set its own underwriting standards.
Most credit unions interviewed for the report drew strength from two or three of these categories, and focused on doing that particular task well.

The case-study credit unions include:

  • Acadia FCU ($95 million in assets), Fort Kent, Maine;
  • Baton Rouge Telco, ($194 million), Baton Rouge, La.;
  • Columbus Metro FCU, ($203 million), Columbus, Ohio;
  • Daniels-Sheridan FCU, ($54 million), Scobey, Mont.;
  • Education Plus CU, ($71 million), Monroe, Mich.;
  • EECU, ($1.2 billion), Fort Worth, Texas;
  • Fort Worth Community CU, ($723 million) Bedford, Texas;
  • Gesa CU, ($1.1 billion), Richland, Wash.;
  • Hutchinson CU, ($170 million), Hutchinson, Kansas;
  • SAC FCU, ($506 million), Bellevue, Neb.;
  • Scott CU, ($737 million), Collinsville, Ill.; and
  • Security Service FCU, ($6.5 billion), San Antonio, Texas.

Secretary of State meets with MnCUN CUs on MBLs

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ST. PAUL, Minn. (11/7/11)--Highlighting the importance of offering small businesses greater access to credit, several Twin Cities credit unions and members of the Minnesota Credit Union Network (MnCUN) met Tuesday with Minnesota Secretary of State Mark Ritchie to discuss increased member business lending (MBL).

Minnesota Secretary of State Mark Ritchie (center) discussed member business lending Tuesday with Twin Cities credit union representatives and Minnesota Credit Union Network staff at Hiway FCU, St. Paul, Minn. (Photo provided by the Minnesota Credit Union Network)
The group discussed several credit union topics, but emphasized MBL and the Small Business Lending Enhancement Act, which would raise credit unions' cap on MBLs to 27.5% of assets from 12.25%. Ritchie has written letters to members of the congressional delegation asking for their support of the MBL legislation.

If the cap were increased, Minnesota credit unions could inject $181 million into the state's economy and help create nearly 2,000 jobs, MnCUN said.

"By working together with state officials such as Secretary Ritchie, we are able to garner more support for legislation affecting credit unions, like member business lending," said Mara Humphrey, MnCUN vice president-governmental affairs. "These meetings are an important piece in strengthening the relationships with key officials and advancing the credit union movement."

The group also discussed the 2012 International Year of Cooperatives and MnCUN's upcoming publicity efforts. Minnesota is the largest cooperative in the state, and plays a key role in promoting the benefits of cooperatives such as credit unions, MnCUN said.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase the MBL cap to open up more opportunity to offer MBLs, inject $13 billion in loans into the nation's economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

Equifax Consumer debt nears pre-recession level

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ATLANTA (11/7/11)--Total consumer debt is down slightly and almost to pre-recession levels, according to the latest monthly Equifax National Credit Trends Report

The debt totals $11.2 trillion, just above the $11.1 trillion posted before the recession in 2006. That compares with the peak debt of $12.4 trillion in October 2008.

The report looks at new credit, which includes auto loans, bank credit cards, consumer finance loans, home equity lines of credit, retail credit cards and student loans. It does not include first mortgage originations.

Other findings:

  • Roughly $436 billion of total new credit was originated between January and July 2011--the highest amount for the same period in three years. Still, it is well below the $805 billion in new credit originated from January to July 2006.
  • Although outstanding debit is on a downward trend, consumers are beginning to use bank credit cards and retail credit cards more. Both sectors saw balances rises from June to September, after a four month decline from February to May.
  • Loans originated between 2005 and 2007 posed the biggest challenge in ongoing delinquencies for all sectors tracked.  Delinquencies represent 31% of total balances; however, they also represent 65% of past due balances (at least 30 days overdue). This was particularly true for first mortgage and home equity loans originated during the period. About 74% of first mortgage loan delinquencies and 80% of home equity revolving loan delinquencies were originated then.
Michael Koukounas, Equifax senior vice president of special client services, noted that the impact of the 2005-2007 loans "continues to be felt across multiple lending sectors. More than two-thirds of delinquent loans can be sourced to those originated during that time. In contrast, loans originated after 2008 are performing substantially better due to the tighter underwriting guidelines in place since then."

Other findings:

  • Auto lending performance was consistent, with 11.3 million new loans originated between January and July. That is 13% more than in that period for 2010.
  • Lending volumes held steady with loan amounts higher overall than in 2010.
  • Bank card credit grew by $41 billion from February through September, with September bank card delinquencies 35% lower than in September 2010.
  • Home equity balances continued their 12-montyh decline. September home equity installment loan balances were 13% less than in September 2010, while revolving loan balances were 6.l6% lower than in September 2010.
  • For the past three years, new consumer finance loan amounts have remained steady, with $5.2 million originated in July, compared with $5.1 million in July of 2010 and $5.2 million in July 2009.
Equifax' analysis is from data on more than 585 million consumers and 81 million businesses worldwide.

650000 new members ahead of Bank Transfer Day

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WASHINGTON (11/4/11)--At least 650,000 consumers across the nation have joined credit unions in the past four weeks, reflecting consumers' reactions to rising fees at banks, according to a survey by the Credit Union National Association (CUNA).

They have joined credit unions since Sept. 29, when Bank of America (BofA)  unveiled its plans to charge $5 a month for debit cards. The public outcry the past month has forced BofA and other big banks to reconsider their debit fees.

CUNA estimates that credit unions have added $4.5 billion in new savings accounts. More than four in every five credit unions experiencing growth since Sept. 29 attributed the growth to consumer reaction to new fees imposed by banks, or a combination of consumer reactions to the new bank fees plus the social media-inspired Bank Transfer Day. Bank Transfer Day, which is tomorrow, urges consumers to switch from big banks to smaller credit unions and community banks.

"The results indicate that consumers are clearly making a smarter choice by moving to credit unions where, on average, they will save about $70 a year in fewer or no fees, lower rates on loans and higher return on savings," said CUNA President/CEO Bill Cheney.

Cheney added that studies have shown people living paycheck to paycheck save even more at a credit union than the average financial institution customer, as they use more credit union services.

The growth is particularly noticeable at larger credit unions--those with $100 million or more in assets, Cheney said.  They account for about 20% of all credit unions, but serve about 80% of credit union members. The CUNA survey indicated that more than 70% of these credit unions reported they have seen growth in memberships and deposits since Sept. 29.

"Many credit unions across the nation--whether they are realizing new members or not--are making special efforts to tap the surging interest in credit unions," said Cheney.

"They are conducting advertising campaigns both individually and cooperatively with others, sending 'switch kits' to existing members to share with family members or other prospective members, beefing up websites, extending hours and staffing for Bank Transfer Day, performing e-mail blasts to members, maximizing social media campaigns, putting up banners in lobbies or on their buildings, offering bonuses to members who bring in new members, and giving bonuses to members as well," Cheney said.

"They are doing whatever their resources will allow them to do to help serve this consumer surge in interest in credit unions."

Cheney noted searches for credit unions continue to surge on the website, with more than 56,000 visitors in October.

The phenomenal increases in membership this month have caught the eye of the nationwide media, many of whom bumped up their coverage of the issue Thursday, with heavy coverage of Cheney's comments and CUNA's statistics and positive press.

Among them: Bloomberg Radio, MSNBC's "Rachel Maddow Show," Businessweek's "Bank fees are a gift to credit unions,"'s "Not Your Grandmother's Credit Union," and Reuters' "Credit union business grows as consumers sour on banks." That doesn't count dozens of regional and local coverage.

Reuters (Nov. 3) reported Cheney's comments and noted the growth statistics provided by CUNA and said, "The big banks may have dropped the debit card fees, but the credit unions are the ones picking up the business."

MSNBC's (Nov. 3) Rachel Maddow, in covering Bank Transfer Day, referenced new member growth at several credit unions and pointed to Cheney's comments on credit union growth that appeared in the Reuters story.

In the article, CUNA Vice President of Economics and Statistics Mike Schenk described the features of today's credit unions, including the conveniences, such as free ATM access, shared branches, and electronic banking. He noted that 71% of credit unions belong to a surcharge-free ATM network. Some 97% of credit unions offer Web-based home banking, allowing members to check balances, view their account histories or transfer funds online. And 94% offer online billing while 47% offer mobile banking.

Meanwhile, credit unions continued to announce their readiness to help consumers switch to credit unions tomorrow, on Bank Transfer Day.

However, they also emphasized, like CUNA's Cheney, that: "Any day is a good day for a consumer to become a credit union member. Saturday, Nov. 5, is one good day to join, and we certainly encourage consumers to make the change. Because when a consumer joins a credit union, he or she takes the first step for themselves, and their families, in moving toward financial freedom."

Use the links to access the full reports in the media.

Judge approves U.S. Mortgage Corp. settlement with underwriters

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NEWARK, N.J. (11/4/11)--A U.S. District Court in Newark, N.J., approved a consent judgment against CU National Mortgage LLC and U.S. Mortgage Corp., and in favor of the companies' insurance underwriters, settling a case stemming from nearly $140 million in fraudulent mortgage loans that caused losses to 28 credit unions.

U.S. District Judge Jose L. Linares signed the consent judgment Thursday, according to court documents. It voids U.S. Mortgage's and CU National's insurance policies with Certain Underwriters at Lloyd's, London, which sued Michael J. McGrath Jr., John Kuskin, and the two former mortgage corporations. Default judgments had been entered previously against the two men.

McGrath, who was president of the former mortgage companies, pleaded guilty in 2009 to stealing $139.6 million from credit unions, and is currently serving a 14 year sentence (News Now Aug. 31).

The case prompted a string of lawsuits led by Fannie Mae, and credit unions including Dover, N.J.-based Picatinny FCU, Medford, N.Y.-based Suffolk FCU and Garden City Park, N.Y.-based Sperry Associates FCU and Nutley, N.J.-based Proponent FCU. They and the other credit unions incurred a combined $160 million in losses after Pine Brook, N.J.-based CU National Mortgage fraudulently sold 189 mortgage loans without authorization to Fannie Mae and pocketed the funds between 2004 and 2009.

The mortgage companies listed more than $200 million in debts to Fannie Mae and 19 credit unions when they filed for Chapter 11 bankruptcy in early 2009. McGrath fraudulently conveyed the mortgages to Fannie Mae by forging allonges that he endorsed in his own name.  An allonge is an attachment to a note that a party can add on for endorsements, such as signatures for transferring the note. His endorsement also included the initials "AVP," which may have been taken to mean associate vice president.

One can make endorsements on the note itself, but McGrath allegedly used allonges instead to help hide his fraud. While CU National Mortgage's non-fraudulent transfers to Fannie Mae were made using Fannie Mae's electronic mortgage note transfer system, the fraudulent transfers were made using paper copies, with the attached allonges, according to court documents from the Fannie Mae lawsuit, which was settled in August.

Call for nominations in CUNA Director elections announced

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WASHINGTON and MADISON, Wis. (11/4/11)--The Credit Union National Association (CUNA) is seeking nominations for eight positions on the CUNA Board of Directors.

Positions up for election are:

  • District 1, Class B
  • District 2, Class C;
  • District 3, Class A;
  • District 3, Class D;
  • District 4, Class B;
  • District 4, Class D;
  • District 5, Class A; and
  • District 6, Class C.

An individual must be an employee or voting board member of the nominating credit union to be an eligible candidate elected by credit unions.  

To become an eligible candidate to be elected by leagues, an individual must be a league president and must be nominated in writing by his or her league, and the nomination must be seconded in writing by at least one other league from the district.

Important dates to know:

  • Nominations are being accepted Nov. 4 through Dec. 16;
  • For contested elections, ballots will be sent Dec. 20, with voting continuing through Jan. 27; and
  • Directors will take office upon the adjournment of CUNA's Annual General Meeting on March 18.
Nomination packets are available by calling 800-356-9655, ext. 4013; using the resource link; or e-mailing

For more information use the resource link.

CUNA HRTD Council accepting award entries

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MADISON, Wis. (11/4/11)--Entries are being accepted for the 2012 HR/TD Excellence Awards, sponsored by the CUNA HR, Training & Development (HR/TD) Council.

Recognition will be given in three major categories:

  • Employee engagement--includes human resources/training department programs related to internal communications, staff development, rewards and recognition, employee satisfaction and community involvement.
  • HR/TD management practices--covers programs that include compensation and benefits, recruitment and retention, training design and implementation, workforce diversity; and
  • HR/TD strategic leadership--recognizes a senior HR/TD professional who has made significant contributions or taken an innovative approach in these areas: business solutions, change management, succession planning, culture building, learning development strategy or leadership development.
Winners will be based upon innovation, business outcomes/impact, sustainability, quality and integration.

"The CUNA HR/TD Council leaders want to honor credit unions that exemplify excellence in the human resources and training disciplines," said awards committee chair Jennifer Godel, vice president of HR/training and quality at Desert Schools FCU in Phoenix. 

Entries must be received by 5 p.m. (CT) Jan. 13.

Winners will receive a complimentary registration to the 2012 CUNA HR/TD National Conference, April 18-21 in San Antonio. Awards will be presented at the conference.

Harris Poll on BTD CUs far exceed banks in loyalty

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MADISON, Wis. (11/4/11)--When Bank Transfer Day (BTD) arrives tomorrow, large banks could be susceptible to losing more of their customers to credit unions, according to The Harris Poll.

Already, hundreds of thousands of bank customers have signed up to drop their big banks and switch to credit unions, said the Credit Union National Association.

Credit unions have a best-in-class customer retention rate with 87% saying they are extremely/ very likely to continue as members.  However, the biggest U.S. banks have garnered significantly less loyalty from their customers, said the poll (PR Newswire Nov. 3).

For example, 40% of Bank of America (BofA) customers surveyed said they are extremely or very likely to continue with BofA, along with 46% of JPMorgan Chase customers, and 54% of Wells Fargo/Wachovia customers.

Credit union members (74%) are nearly three times as likely as BofA customers (25%) to have a trustworthy relationship, and to feel valued (72% versus 24%). Trustworthiness and being valued are the major factors in a strong emotional commitment to a relationship, the poll said.

Nearly 50% of those who "like" the BTD page on Facebook are forwarding it,  discussing BTD and chatting on Facebook about the cause, compared with a 32% chat percentage for the Occupy Wall Street movement, said Harris.

The Harris Poll concludes that credit unions, community and regional banks are providing consumers with more information, help and tools to make informed financial decisions. Therefore, big banks will have to make significant changes to win back customers' trust.

Also, big banks will have to make the changes soon, before credit unions, community and regional banks make it easier for customers to switch over to them, The Harris Poll concluded.

CUNA Mutual expands services for those new deposits

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MADISON, Wis. (11/4/11)--With Bank Transfer Day arriving tomorrow, credit unions are searching for ways to invest their increased level of deposits from adding new members. To meet that need, CUNA Mutual Group, through its registered investment advisor affiliate, MEMBERS Capital Advisors (MCA), is expanding its Credit Union Investment Advisory Services (CUIAS) program.

The program aims to help credit unions improve their financial performance through investment portfolio management and strategy.

"CUIAS takes the securities selection, execution and monitoring of an investment strategy off the plate of the credit union and places it on the same portfolio managers who invest for CUNA Mutual Group's nearly $10 billion general account," said Ed Meier, director, Fixed Income Investments, MEMBERS Capital Advisors.

The Credit Union National Association (CUNA) estimates that 650,000 consumers nationwide have joined credit unions since Sept. 29--the day Bank of America announced its now-rescinded $5 monthly debit card fee. That estimate is based on a response to a CUNA nationwide survey of 5,000 credit unions. Credit unions have added $4.5 billion in saving accounts--likely attributable to new members and existing members shifting their funds from other financial institutions--since that date, CUNA said.

The company has more than 25 broker relationships to assure a selection of securities, Meier said. CUIAS also adheres to regulatory-compliant accounting and reporting practices. "We provide a monthly report that prices and 'shock-tests' all positions in the portfolio--quality, duration and mix," he said. "This can be given to regulators when they arrive if needed."

Meier noted the credit union's management can remain in control of the process by reviewing, analyzing and approving transactions as the portfolios are advised by MCA on a non-discretionary basis.

CUIAS is best-suited for credit unions with more than $20 million in investable assets, with the minimum investment being $10 million, he said. It focuses on longer-term investments of one year or longer in duration.

To strengthen the program, CUNA Mutual Group has hired Jeff Weber, an industry veteran, to help establish CUIAS. Before taking on the role of investment sales specialist for MEMBERS Capital Advisors, Weber served as managing director of equity trading for Allianz of America, where he was responsible for managing a Standard and Poor's 500 Index Fund with more than $600 million in assets.

Banks look to other fees such as limiting debit transactions

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MADISON, Wis. (11/4/11)--While Bank of America (BofA) and other big banks have dropped plans to charge monthly debit fees, consumers must be more vigilant for less transparent fees. Banks will be seeking to regain revenue lost from the new interchange rule and a stagnant economy, according to industry observers.

BofA will lose as much as $1.2 billion to $1.4 billion in revenues a year by dropping its debit fee, Jefferson Harralson, analyst at Keefe Bruyette & Woods, told the New York Post (Nov. 2). To make up for that lost income, it may impose more fees such as increased requirements for minimum balances, increased monthly fees, maintenance fees and fees for using ATMs for non-customers, Harralson told the Post.

TD Bank, Cherry Hill, N.J., is implementing a new fee and increasing others, a CNNWire report said (Nov 2).

The bank will begin charging its customers a $9 fee each time they withdraw or transfer money from their savings account once they have exceeded six transactions in a billing cycle.

In setting the fee, TD Bank cites Regulation D, which sets the six-transaction limit per billing cycle. BofA and Wells Fargo already have similar fees in place.

In the CNN report, one reader remarked that credit unions look more attractive as big banks continue to search for ways to make money.

Bank fees aren't going away, and credit unions will continue having the opportunity to show consumers the benefits of membership.

Banks also could begin charging customers for more costly services such as processing paper checks and mailing statements, banking analyst Bart Narter said in a Boston Globe (Nov. 3) article.

Rewards programs may also be eliminated at some banks, the Boston Globe said. Citizens Bank, the second-largest retail bank in Massachusetts, will stop offering its GreenSense rewards program at the end of the month. The program gives customers 10 cents each time they make a debit card purchase or electronic payment.

One-third of U.S. banks have cut their debit reward programs during the past year, according to Bankrate.

New curriculum for teens tackles gambling charity bankruptcy

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ST. PAUL, Minn. (11/4/11)--A financial literacy provider has released 10 new online offerings for teens, including "a tough take" on topics such as gambling, charitable giving and bankruptcy.

The curriculum is provided by Foolproof, a consumer advocacy initiative sponsored by 15 state trade associations used by 147 credit unions.

FoolProof is addressing topics such as gambling and bankruptcy in response to inquiries from the credit unions and teachers who use the financial literacy service.

"These modules are different," said Will de Hoo, Foolproof found. "Each module is designed to be used by itself, rather than as part of our curriculum series. But all of the modules---used alone or with our other modules--are tough as nails--and teachers love them.  We have tested these modules in Oklahoma during the past six weeks, and already over 125 high schools have started using them."

Foolproof's entire curriculum includes more than 18 topics in 22 hours of online, interactive instruction.

CU System briefs (11/03/2011)

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  • GRAND RAPIDS, Mich. (11/4/11)--The board of Michigan-based credit union service organization (CUSO) Xtend Inc. announced it will increase the price of new stock ownership, effective Jan. 1, to $23,000. The current asking price of $19,000 will remain until then, said Xtend Board Chairman Steve Searfoss of AAA FCU, South Bend, Ind. He noted the board "felt it was important for our buy-in price to reflect not only our stellar 2011 performance, but also our vision of a bright future for our CUSO and the credit unions we serve." The stock offering for the CUSO has grown steadily since its initial $5,000 price in 2003 …
  • KENILWORTH, N.J. (11/4/11)--Atlantic FCU has named Mike Fanelli as its new president/CEO. He will succeed longtime CEO Fred Beckman, who is retiring in early December, said the New Jersey Credit Union League (The Daily Exchange Nov. 3). Fanelli, who has been with the $275 million asset, Kenilworth, N.J.-based credit union for 12 years, is currently chief financial officer/chief operating officer. Beckman, who has been CEO since 1994, will stay through a transition period and will move onto the credit union's board of directors ...
  • SAGINAW,  Mich. (11/4/11)--The state of Michigan paid special tribute to Saginaw-based Catholic FCU (CFCU), which recently reached the  $1.1million benchmark in its Msgr. Forbes Scholarship Fund. Since 1982, the $300.5 million asset credit union's Scholarship Committee has awarded more than $1.1 million and presented more than 2,300 scholarships to students for their education. Sen. Roger Kahn attended a special ceremony and recognized that the awards have had a valuable impact on the ability of local students to continue their education.  From left are All Saints students Brittany Burns and Megan Marvin; Bishop Joseph Cistone; Kahn, CFCU Board Chairman Robert Looby; CFCU CEO Alan Watson; and Jose Salinas, Msgr. Forbes Scholarship Trustee.  (Photo provided by Catholic FCU) …
  • FARMERS BRANCH, Texas (11/4/11)--The Texas Credit Union League has tapped Tom Haider as its executive vice president for advocacy. Haider, who has more than 25 years of advocacy experience in the financial services industry, will be responsible for directing the league's government relations program. He formerly served for seven years as the first in-house attorney for the Minnesota Credit Union League (now Minnesota Credit Union Network), where he provided legal and regulatory compliance advice to credit unions and ran the league's government relations program.  He also was senior vice president of government affairs and chief compliance officer of MoneyGram International Inc.  According to Texas league President/CEO Dick Ensweiler, Haider has "lobbied successfully for the passage of legislation in multiple states, including Texas, as well as the U.S. Congress and the European Union's Parliament" and has "in-depth knowledge involving many issues affecting credit unions today" …

GCUA holiday shopping poll Cash is king

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DULUTH, Ga. (11/4/11)--Fifty-one percent of Georgians surveyed plan on spending the same amount this holiday season as last year, and 46.5% say they plan on spending less, according to a poll from Georgia Credit Union Affiliates. And more will be paying cash.

Of those polled, 45.1% reported their holiday shopping budget will be between $100 and $500, making bargain hunting a vital part of holiday shopping, said GCUA (Consider This Nov. 2). Another holiday survey from Accenture found 40% of consumers indicated that having a sale on an item is the most important factor in their buying decision, said GCUA.

In the GCUA poll, more than three out of four respondents said they plan to use cash for their holiday purchases, which may lead consumers to begin shopping later than usual. GCUA noted that some major retailers are reintroducing layaway service for the holidays.

Fewer members are saving in advance for the holidays, according to Sherry Hutchison, executive vice president of HALLCO Community CU, Gainesville, Ga.  This year the credit union has 519 Christmas Club accounts, compared with last year's 536. In dollars, members have saved $469,000 so far and there are still a few weeks before they funds transfer from the club accounts to their savings. That compares with last year's $490,000 total transferred.

Hutchinson said Christmas Club accounts have declined steadily since 2007, and members are withdrawing funds from the accounts before the transfer date to pay for emergency expenses.

Another Georgia credit union, Robins FCU in Warner Robins, noted some reluctance among members to borrow or use credit cards for holiday expenses the past few years.  Robert Dyal, vice president of business services and lending at Robins, noted that many members won't spend as freely this year, but he expects loan demand to be similar to the past two years.

He advised consumers to look ahead to the 2012 holiday season and save early in the year  or save a specific amount from each pay period to deposit into a savings account.  He also suggested opening a 12-month share certificate for holiday purchases. Members can't take their savings out of it until just in time for the holiday spending, he said.

CO-OP shared branch campaigns add weight to CU convenience

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ONTARIO, Calif. and RANCHO CUCAMONGA, Calif. (11/3/11)--The myth that credit unions aren't convenient because  they don't have nationwide  branches is being debunked by two organizations related to the ATM and shared branching industries.

Just in time for Bank Transfer Day, the movement to switch checking accounts to credit unions by Saturday, CO-OP Financial Services and FSCC (Financial Service Centers Cooperative Inc.)  have informed media  in separate campaigns that convenience is not an issue for many credit unions.

A campaign by  CO-OP Financial Services, which manages CO-OP Network, a nationwide network of 28,000 ATMs for members of 3,000 participating credit unions,  was launched Oct. 12. It was viewed by more than 500 editors and appeared on numerous sites, including, Marketwatch, Investor and Optimum Online  (Life is a Highway Nov. 2).

Its campaign aimed to educate business and personal finance editors, who have chronically characterized credit unions as less convenient than banks, about the advantages of credit union membership, and to obtain coverage in consumer media.

CO-OP, in support of Bank Transfer Day, placed three ads (  in major market weekly newspapers across the country. The first  was published Wednesday.  The ads, which are sympathetic with consumers' negative perceptions of banks, deliver a message that summarizes banks' less-than-remarkable behavior and what CO-OP considers as a superior alternative: "Banks don't like you. Credit unions do."

A link to a dedicated Facebook page, supported by a Twitter feed, gives Gen X and Gen Y targeted audiences direct access to participate in the conversation,  said CO-OP.  The ads also encourages them to spread the word and learn more about the benefits of credit unions.   The campaign will appear in these widely read weeklies: NY Village Voice; LA Weekly; OC Weekly in Orange County, Calif.; Chicago Reader; SF Weekly; Boston Dig; Atlanta Creative Loafing; and The City Paper in Washington, D.C.

FSCC, which is a Shared Branching Network  providing 6,700 full-service, deposit-taking locations in 50 states,  promoted convenience in a press release Wednesday "reassuring consumers that convenience is not an issue for those seeking to support Bank Transfer Day by transferring their accounts to credit unions."

It noted that more than 1,600 credit unions participate in the CU Service Centers Network and explains shared branching allows members at one participating credit union to use the branches of another or use designated service centers or self-service kiosks.

"This cooperation among credit unions allows them to operate locally while offering the same level of national service offered by the top five U.S. banks. Only credit unions, with their focus on member-owners, can achieve this level of cooperation and convenience," said FSCC. 

"We, at FSCC, have been preaching the advantages of credit unions for decades. And we're confident that when consumers experience the high level of convenience, service, and assistance our member credit unions deliver, they'll wonder why they waited so long to switch," said Sarah Bank, president/CEO of FSCC.

Survey One in four Americans use mobile banking

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MOUNTAIN VIEW, Calif. (11/3/11)--Nearly one in four Americans currently uses mobile banking, and another 17% said they will try it in 2012, according to a new survey, which also found that 36% of those surveyed would switch institutions due to new service fees.

The Intuit Financial Services' Fourth Annual Management Survey also found that many people remain loyal to their financial institutions, with 45% indicating they have been a member/customer of a credit union or bank for more than a decade. However, 36% of survey respondents indicated they planned to switch--or have already switched--institutions due to new service fees.

Intuit, based in Mountain View, Calif., is a provider of online and mobile solutions for credit unions and banks. It is a CUNA Strategic Services alliance provider.

Consumers who are 18- to 32-years old are three times more likely to adopt mobile banking than Gen X, baby boomers and seniors, the survey found. More consumers prefer to go online with their financial institutions rather than visit in person, said Intuit.

Thirty-eight percent of Americans surveyed already use the online services provided by their credit union or bank to manage their personal finances, and 33% said they would switch financial institutions for one that offers solutions that provide better member/customer experience.

"Banking on customer inertia is not a viable growth strategy," said CeCe Morken, president and general manager of Intuit Financial Services. "Financial institutions should instead lead by engaging customers on their terms and delivering the experience they define."

Other findings:

  • More consumers now have a smartphone--41% of respondents reported owning a smartphone and 23% said they use a mobile banking solution;
  •  Of those, 65% access their account information through the Internet, and 28% use a mobile application from their credit union or bank; 
  • Six percent of smartphone owners use mobile devices to remotely deposit checks, and 54% of that group do so at least once a month while 39% use it weekly;
  • When asked what is the most important feature they use while banking online, 64% of smartphone owners said that tracking account balances; 34% said paying bills, and 28% said transferring funds. However, 70% indicated they would like to see their complete financial picture and manage and pay all their bills in one place, regardless of the source of information.

"Regardless of age, each customer expects to connect with their financial institution in their own way," said Morken. "Whether it is online, mobile or most likely both, financial institutions must provide the right technologies if they are to truly engage their customers."

During the past year, an Intuit study of more than 50,000 mobile banking customers across 12 financial institutions found that people interact on average 45% more often with their financial institution if using online and mobile solutions in combination, as opposed to online alone. Those who used both solutions also held, on average, 9% more deposit and loan accounts than people without digital solutions.

INPRI media barrage highlights pro-CU efforts

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WASHINGTON (11/3/11)--National media were busy Wednesday, debunking myths and highlighting the benefit of credit unions as Bank Transfer Day drew closer and as consumers saw success in forcing big banks' hand on debit card fees. National Public Radio, Huffington Post, Bloomberg News, Baltimore Sun and AOL were among those contacting the Credit Union National Association (CUNA) for help in explaining that consumers are switching to credit unions to avoid the fees.

In more than one report Wednesday, National Public Radio spoke with Pat Keefe, CUNA vice president of communications and media outreach, who told NPR that consumers have been turning to credit unions in an attempt to escape debit card fees that big banks had announced in late September.

In the report, Norma Garcia of Consumers Union said consumers' reaction taught banks that consumers will have little tolerance for fees.  The segment also reported that social networking efforts, including a Facebook page on the upcoming Bank Transfer Day, are urging consumers to switch their deposits to credit unions before Saturday.  These efforts will live on even though the major banks have now turned their backs on the debit fees, the segment said.

While the banks' debit fees were transparent, consumers may now have to comb their through their statements to determine whether the fees will be reincarnated, the segment said.

WESH-ORD (NBC) in Orlando, Fla., reported that customer feedback led the banks to reverse the charges. In that report, CUNA said that members are reporting "tens of thousands" of new members in the past month.

In a Bloomberg News earlier this week, reported that three out of four large credit unions offer free checking and an additional 20% waive a fee in certain conditions, and CUNA's Keefe  noted that about 90% of credit unions don't impose debit-card fees ( Nov. 1)

AOL's, in an article entitled "5 Credit Union Myths Debunked, " and written by The Motley Fool columnist Matt Cropp, acknowledged the public outcry on fees and the fact that "normally low-profile credit unions have been receiving a great deal of attention as an alternative to the big banks." It cleared up five misconceptions about credit unions. Instead it reported that:

  •  Many credit unions have community charters and are easy to join (readers were referred to to locate a credit union);
  • Credit unions offer a full range of competitive products and services;
  • Credit unions through ATMs and shared service centers offer nationwide convenience;
  • Savings at credit unions are safe and sound and backed by the government; and
  • Members buy a share and "own" the credit union.

Leagues work on CU awareness for Bank Transfer Day

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MADISON, Wis. (11/3/11)--Credit union leagues nationwide have provided local and state media with credit union information and credit unions with resources to assist them in preparing for Bank Transfer Day, which is Saturday.

Michigan Credit Union League President/CEO David Adams was featured on a front-page Detroit News article Nov. 1. "U.S. consumers save $6.3 billion a year thanks to those lower fees and rates, he told the newspaper

"That's $69 per person, on average, but in Michigan, which has 4.5 million credit union members, the savings are about $200 million a year, which is $81 per person," Adams told the Detroit News. The Texas Credit Union League released a study that indicates consumers who move their accounts to credit unions save even more when they also transfer their debt. Texas credit union members save more than $436 million on better rates on loan products, according to the study.

When combined with savings on fees, Texas credit union members save $717.9 million when compared with banking fees and loan rates.

The biggest savings on loan rates is on personal unsecured loans, the type of loan that allows members to borrow for emergencies or holiday spending. The study, which compares rates from banks and not-for-profit credit unions, was conducted by the Credit Union National Association (CUNA) and is based on data from Datatrac, the National Credit Union Administration and CUNA.

"Our cooperative not-for-profit model really makes a difference," said Dick Ensweiler, Texas Credit Union League president/CEO. "Seeing so many new credit union members means that finally the 'secret' is out. Credit unions deliver the best value for members."

The Wisconsin Credit Union League noted that, the website that helps consumers find credit unions has seen an increase of 76% in searches for Wisconsin credit unions in the final week of October.

"People are excited not just because of the hundreds or even thousands of dollars per year they can save by using credit unions, but also because credit unions keep money local in a way that sustains jobs and help the communities where they live," said Brett Thompson, president of the Wisconsin league.

To help prepare credit unions for a possible increase in membership inquiries, leagues are providing resources on their websites. For example, the Louisiana Credit Union League has these resources on its site:

  • Bank Transfer Day talking points;
  • A model press release;
  • A "ready sheet" to help credit unions prepare; and
  • A Q & A to address banker myths.
Among other steps, the Louisiana league is encouraging state credit unions to:

  • Have switch kits or other switch support ready;
  • Extend business hours on Saturday; and
  • Reach out to local media (eNews Nov. 2).
Leagues are also asking credit unions to collect and share stories from consumers who join their credit unions on or before Bank Transfer Day.

CUNA announces ELLy Award winners

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MADISON, Wis. (11/2/11)--The Credit Union National Association (CUNA) honored outstanding credit union trainers and training programs at the 2011 CUNA Experience Learning Live! (ELL) conference, held Oct. 16-19 in Las Vegas. 

The ELLy awards are the only national awards presented to credit union trainers that recognize excellence in professional staff development.

The Training Professional of the Year award recognizes achievements of a visionary credit union training professional or department for exceptional contributions to the learning and performance development of credit union staff.

Training Professionals of the Year honorees included:

  • Don Vaughn of Sioux Falls CU, Sioux Falls, S.D., first place for credit unions with less than $250 million in total assets; and
  • Training staff of Spokane Teacher's CU, Spokane, Wash.,  first place for credit unions with more than $250 million in total assets;
The WOW! award is presented to the credit union with the best overall training curriculum or event that inspires learning, teaches skills that go beyond the classroom and leaves participants empowered.

WOW! award winners include:

  • Tiffany Goodman and Tiffanie Walls of Seattle (Wash.) Metropolitan CU, first place;
  • Amanda Swartz of Christian Community CU, San Dimas, Calif., award of merit; and
  • Training and Staff Development of Educators CU, Racine, Wis., award of merit.

The Catalyst award recognizes a person or department who gives energy to something or someone else, someone who knows that by giving the best of themselves, they become better, too.

Ken Kelly, Matt Milligan, Rod Snyder and Michelle Trekas of Red Canoe CU, Longview, Wash., were first-place Catalyst award winners. (Photos provided by CUNA)

Don Vaughn
Training staff of Spokane Teacher's

Tiffany Goodman and Tiffanie Walls
Amanda Swartz
Training and Staff Development of

Educators CU
Ken Kelly and Michelle Trekas

Corporate forms three Catalyst Councils

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PLANO, Texas (11/3/11)--Catalyst Corporate FCU will create three member-engagement groups designed to help shape the future of the corporate credit union.

The groups, to be known as Catalyst Councils, will focus on service delivery, product development and enhancements, and "over-the-horizon" planning, Catalyst Corporate said.

The announcement was made at a meeting Oct. 25 held in conjunction with Catalyst Corporate's annual Economic Forum. About two dozen credit union representatives attended.

The three councils, slated to begin meeting in early 2012, will gather input from the eastern, central and western regions of the U.S. Each councils will be comprised of about a dozen credit union leaders.

Credit union representatives attending the input session suggested that councils should "advocate innovation"--expressing hope that Catalyst Corporate would help credit unions be first to market with emerging products and services.

"Those attending the meeting said they would like the councils to promote the development of products and technologies that will be useful in recruiting younger members," said Amy Fuller, Catalyst Corporate vice president of communications, who facilitated the meeting with Mark Meyer, CEO of the Filene Research Institute.

Attendees also suggested the councils should emphasize continual expansion of product and service education. Others suggested council members could act as a "sounding board" and liaison between the corporate and credit unions at chapter meetings.

Creation of a listserv to keep council members in touch between four meetings slated for 2012 was also discussed.

Catalyst Corporate is kicking off its recruiting effort for the councils this week with notices in its newsletter and in an e-mail to its 865 member credit unions.

New Fed holds rates steady says 3Q growth stronger

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WASHINGTON (11/2/11--FILED 1:15 p.m. ET)--The Federal Reserve's policymakers, saying that third quarter growth is stronger, today held the target rate for federal funds at 0% to 0.25% and indicated that it would hold rates at "exceptionally low levels" at least through mid-2013.

The vote was nine to one, with Charles L. Evans supporting further easing at this time.

The Federal Open Market Committee (FOMC), which sets the Fed's monetary policy, acknowledged that economic growth reflects "in part a reversal of the temporary that had weighed on growth earlier in the year. Nonetheless, recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated."

The target rate has been near 0% to 0.25% since December 2008.

Household spending "has increased at a somewhat faster pace in recent months," the committee noted.  It said business investment continued to expand "but investment in nonresidential structures is still weak, and the housing sector remains depressed. Inflation appears to have moderated since earlier in the year as prices of energy and some commodities have declined from their peaks. Longer-term inflation expectations have remained stable."

The committee is mandated to seek to foster maximum employment and price stability, and its statement after its two-day meeting said it expects "a moderate pace of economic growth over coming quarters and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate."

It recognized "significant downside risks to the economic outlook, including strains in global financial markets." The FOMC said it anticipates that inflation will settle during the coming quarters "at levels at or below those consistent with" its dual mandate as the effects of past energy and other commodity price increases dissipate further. However it will monitor inflation and inflation expectations closely, it said.

The FOMC said it will continue its "Operation Twist" program to extend the average maturity of its holdings of securities, as announced in September, and will maintain its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. It will regularly review the size and composition of its securities holdings and "is prepared to adjust those holdings as appropriate."

The committee's statement indicted it will "continue to assess the economic outlook in light of incoming information and is prepared to employ its tools to promote a stronger economic recovery in a context of price stability.'

Voting for the policy action were: Ben S. Bernanke, chairman; William C. Dudley, vice chairman; Elizabeth A. Duke; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen. Evans was the lone dissenter.

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, 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" 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" 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.