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MCUA CEOs letter to editor highlights trust

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ST. LOUIS (12/11/08)--A letter to the editor of the St. Louis Business Journal from the Missouri Credit Union Association President/CEO Rosie Holub highlights credit unions’ trustworthiness at a time when the “blame game is rampant to seek out and punish contributors to this economic meltdown.” The item, entitled, “Credit unions put trust before profit,” appeared in the Dec. 5-11 issue. Holub wrote that “the public trusted the advice of advisors who acted with monetary self-interest,” securities regulators “to carefully scrutinize the underpinnings of complex financial investment instruments” and policymakers to ensure special interest pressures “would not influence their actions at the expense of economic stability. “Many Americans are seeking financial services providers that will renew their faith and trust in a faltering financial system,” Holub wrote. The “good news is that there are providers that put earning and preserving the trust of those they serve before profit—they are called credit unions—a life raft in a sea of economic turmoil.” Holub discussed credit unions’ conservative money management, their federal insurance, and their conservative investments “in the form of loans to their members.” “As others make credit difficult to obtain, credit unions have money to lend because that is their primary purpose—to pool members’ savings and make loans,” she wrote. She noted their People Helping People philosophy and their advancing credit during the Great Depression. “Credit unions were there for people then, and they are there for people today.” Despite today’s economic stress and uncertainty, credit unions continue to maintain public trust. Holub cited yearly independent national surveys that “confirm that credit unions are trusted to consistently act in the consumers’ best financial interests. “Perhaps it isn’t so bad to be a little conservative, and perhaps it is time to take a look at a segment of the financial services industry you can trust,” she concluded. For the full article, use the resource link.

Students to launch Web page for CU

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SAN BERNARDINO, Calif. (12/11/08)--High school and college students in graphic and Web design can submit a design for a new youth Web page on the San Bernardino School Employees FCU website. The credit union is inviting San Bernardino County students age 21 and younger to submit the design. The contest winner will receive $500 and the design will be used for a year (The Press Enterprise Dec. 9). The winner’s school also will receive $500. So far, the credit union has received 30 entries. The $60 million asset credit union plans to announce the winner next month. Isaac Ramirez, marketing and training specialist at San Bernardino School Employees FCU, told the newspaper the credit union tries to reach out to include the community and the contest encourages ties with the schools.

State program to invest in Michigan FIs including CUs

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LANSING, Mich. (12/11/08)--Michigan Gov. Jennifer Granholm announced a new program that would invest state money in Michigan financial institutions--including credit unions—for lending to businesses and consumers. The Michigan CD Stimulus Program aims to help stimulate lending to consumers and businesses, said the Michigan Credit Union League (Michigan Monitor Dec. 10). The program involves the state buying certificates of deposits (CDs) of six or 12 months in duration and purchased at below-market rates, with a minimum offer of $100,000 and a maximum of $10 million per institution. The goal is to loan up to 80% of the funds deposited with participating credit unions and banks to Michigan businesses and consumers. The funds will be available until Feb. 6. The Michigan Department of Treasury, Bureau of Investments, posted final guidelines for the program last week.

Hearing set on Wisconsin auto dealers lawsuit

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MADISON, Wis. (12/11/08)--A hearing has been scheduled for Jan. 16 in a lawsuit brought by a Wisconsin auto dealers trade against the state credit union regulator over an agreement it made with a credit union to divest its auto sales business (Milwaukee Journal Sentinel Dec. 9). The Wisconsin Automobile and Truck Dealers Association had petitioned the Dane County Circuit Court to overturn an agreement made by the state Office of Credit Unions. The agreement gave Racine-based Educators CU (ECU) 18 months to divest its auto sales business unless a state law regulating vehicle sales by credit unions is changed before then. The business involved is Educators Auto & Lease, which is a division of ECU Financial Services. It provides used-car sales, new- and used-car leases, and new-car referral services (News Now Dec. 3). The Department of Justice, which is handling the defense of the Office of Credit Unions, has asked that the dealers association lawsuit be dismissed. The regulator, Suzanne Cowan, earlier this year ruled that retail auto sales by credit unions aren’t allowed under the state statute. The situation was prompted by a complaint from an unknown auto dealer in the area about Educators CU’s auto sales. The dealers association filed a complaint saying the credit union charter doesn’t allow credit unions to offer auto sales service (News Now Nov. 4).

Scott Burt named presidentCEO of CMN

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SALT LAKE CITY (12/11/08)--Scott Burt has been appointed as Children’s Miracle Network (CMN) president/CEO. Burt previously served as interim president/CEO and chief operating officer of CMN. He joined CMN as the controller in 1986. Burt has been involved with partnerships including Credit Unions for Kids, a collaboration of credit unions, chapters, leagues and business partners that work to benefit CMN-affiliated hospitals. He also served for many years on the board of Mountain America CU in Salt Lake City. CMN is an international nonprofit organization that raises funds for more than 170 children’s hospitals.

Midwest CUs GM team up on 10 billion auto loan pilot

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LANSING, Mich. (12/11/08)--General Motors Corp. (GM) and credit unions from four Midwestern states have teamed up to help credit union members obtain vehicles with a purchase price discount from GM. Credit unions from Michigan, Ohio, Indiana and Illinois also have pledged $10 billion in the “Invest in America” low-cost auto loans program to their more than 12 million members. The purpose of the six-month pilot program, which runs through June 30, 2009, is to assist both consumers and the auto industry in dealing with the nation’s economic stress and to help move America forward. “Credit unions have a long history of helping hard-working Americans in troubled times,” said Daniel A. Mica, president/CEO of the Credit Union National Association. “In this period of severe economic stress, we are pleased credit unions can be a part of a program that utilizes one of their primary services—auto loans—to make auto purchases more affordable for millions of consumers and, in the process, help energize our nation’s economy,” Mica noted. According to David Adams, Michigan Credit Union League president/CEO, “Roughly 1,295 credit unions in the four states account for $90 million in assets and $23 billion in liquid funds that are available for loans.” Credit unions are able to make the offer because they haven’t been hit as hard by subprime lending and problems with capital markets, “so we’re in a position to help,” he said. Adams and Mark LaNeve, GM vice president, North America Sales, Service and Marketing, announced the program in a press conference Wednesday. Invest in America will provide value to consumers who take advantage of a GM Supplier for Friends price discount program on purchases of eligible new Buick, Cadillac, Hummer, Saab, Chevrolet, GMC, Saturn and Pontiac cars and trucks. An additional $250 bonus cash is offered between now and Jan. 5 on their eligible purchase. Depending on the individual credit union, total incentives could run between 5% for just the dealer program to 10%-20% when combined with other offers. Michigan Gov. Jennifer M. Granholm praised the initiative. “The purchase of a new car is one of the most significant investments citizens make,” she said. “Providing them access to the funds they need not only helps them, but provides a much-needed boost to our domestic automakers and our struggling economy. I applaud Invest in America for investing in our citizens and our state,” Granholm added. LaNeve noted that the Michigan league and GM began talking about a partnership three or four months ago. The arrangement “creates a tremendous value for GM and for thousands of credit union members. We appreciate the credit unions’ promotional support and are pleased to make this offer. “As GM maps its future, one thing is clear,” LaNeve said. “Americans are resilient and willing to step in and show confidence in each other. This is a great example of that spirit.” He added that $10 billion could finance up to 400,000 to 500,000 vehicle loans in an average price range of $20,000-$30,000. Adams noted that many credit unions in the pilot serve occupational groups such as auto manufacturers’ and suppliers’ employees, and their members are affected by what is happening in the auto industry and economy. “It’s a gesture that the credit union movement wants to be helpful in moving America forward.” He also said credit unions are less affected by the credit crisis and have strong capital ratios and liquidity positions. Credit unions also typically offer better rates than banks. He cited an October Datatrac survey in which credit unions’ rates averaged 5.4% compared with 6.9% at banks. The program will be piloted in the four states, with the potential to go nationwide in early 2009. The discount is available to credit union members in the four states no matter where they choose to finance their vehicle purchase. CUcorp, a wholly owned subsidiary of the Michigan league, will coordinate the program with GM. CUcorp also is in talks with Chrysler and Ford Motor Co. For more details or to obtain an authorization number to take to any GM dealership, use the resource link.

CU reps elected to Virginia Jumptart board

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HERNDON, Va. (12/11/08)--The Virginia Jump$tart Coalition has selected two credit union representatives to serve on its board of directors. The board Tuesday appointed Shannon Tackett, Northwest FCU Foundation communications officer, and Cherry Hedges, Virginia CU financial education director. Tackett and Hedges will work with schools, local governments, community organizations and businesses to advance financial education in Virginia. The coalition is a non profit, volunteer-driven organization representing more than 100 individuals and organizations in business, government, association and education who aim to improve the financial literacy of Virginians.

CU System briefs (12/10/2008)

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* MERIDEN, Conn. (12/11/08)--The Connecticut Credit Union Charitable Foundation has raised more than $38,000 for needy people in the state. Half the proceeds will go to the Connecticut Food Bank and Hartford FoodShare. The other 50% will go to Operation Fuel, an organization assisting families with fuel and electric bills. Mary Ann Pollaro, executive director of the foundation, said the fundraising not only helps the needy but increases awareness of the credit union philosophy of “People Helping People.” The funds raised will “help feed thousands of needy Connecticut residents and keep them warm this winter,” she said … * MARLBOROUGH, Mass. (12/11/08)--The board of Digital FCU (DCU) has
announced the upcoming retirement of President/CEO Carlo Cestra this spring and the selection of Jim Regan, DCU’s long-time chief financial officer (CFO), as his successor. A 40-year veteran of the credit union movement, Cestra has been CEO at DCU since April 1995 and led the credit union through more than 10 years as the fastest-growing large credit union in America, according to Callahan & Associate consulting firm. Cestra is a former CEO at AT&T Employees FCU, Bedminster, N.J., and Suffolk (N.Y.) FCU. The board selected Regan after a year-long search that considered more than 700 candidates. Regan began his career at DCU in 1991 as an internal auditor and became vice president of finance in 1995, then senior vice president/CFO in 1996. He is a member of the Credit Union National Association’s Accounting Task Force …