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Southeastern CUs growth outpaces nation

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BIRMINGHAM, Ala. and TALLAHASSEE, Fla. (12/13/12)--Credit unions in Alabama and Florida continue to increase membership at a record pace--outpacing the rest of the nation, according to the League of Southeastern Credit Unions.

Through the first three quarters of the year, Alabama and Florida credit unions added a collective 165,000 new members. In the third quarter, Florida credit unions added 35,000 new members and Alabama credit unions increased their memberships by 16,000. Both states have a record number of members--4.7 million in Florida and 1.83 million in Alabama.

"Southeastern credit unions' membership is growing at 2.5%, which is higher than the national credit union average," said Patrick La Pine, president/CEO. "We've seen five straight quarters of record growth. Between the two states, nearly 250,000 new members have joined a credit union during this span. This is an unprecedented stretch of membership growth."

Members business lending (MBL) also remains strong among Florida and Alabama credit unions. Florida has grown its MBLs 7.9% through the three quarters, while Alabama has increased its MBLs 7.6%. Each state is above the national credit union average of 5.7% growth. That also represents a more than 5% increase in MBL growth over 2011.

The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. CUNA and credit unions say that increasing the cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

Overall, lending also has improved as the economy picks up. Florida and Alabama credit unions saw 2% loan growth through the period--a significant gain since loan growth was negative the past two years in both states, the league said.

Delinquent loans and net charge offs are improving with each quarter. In Alabama, delinquent loans are at 1.3%--just above the national credit union average, while Florida delinquent loans are higher at 2.3%, but down considerably the past two years (2.86% and 3.16%). Net charge offs in Alabama are below the national average at 0.65%. Florida net charge offs are higher than the national average at 1.3% but again, well below the past three years (1.79%, 2.21% and 2.14%).

Asset growth in Alabama and Florida has been significant in 2012, the league said. Collectively, credit unions have added $3 billion in assets through the first three quarters, $500 million more than was added in all of 2011. Alabama credit unions are growing their assets slightly above the national credit union average and hold a record $17.6 billion in assets.

In Florida, asset growth is slightly below the national average; however, two years ago, asset growth in Florida was negative. Credit unions in Florida hold $45.5 billion in assets.

The net-worth ratio for Alabama and Florida credit unions is healthy, the league reported. Alabama credit unions have an 11% net worth ratio. Florida credit unions have a 10% net worth ratio for the first time in four years. A financial institution is considered well capitalized with a net worth ratio of 7%.

S C league meeting Going Above and Beyond

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COLUMBIA, S.C.  (12/13/12)--The South Carolina Credit Union League (SCCUL) has announced "Going Above and Beyond" as the theme for its 2013 Annual Meeting April 11-13 in Myrtle Beach, S.C.

The theme genre is "vintage circus," introduced in the league's humorous video teaser entitled, "The Carpool," on YouTube. It suggests league employees arrive together for work, then find it anything but "another day at the office." To see the video teaser, use the link.

The theme, inspired by staff exploration of key challenges for the in-state industry, reflects several characteristics of the South Carolina credit union movement, identified in a league strategic brainstorming process earlier this year.

The characteristics are:

  • A strong dedication to providing the best products and services for members, at times going above the call of duty;
  • The ability to overcome obstacles such as ever-changing regulations and compliance; and
  • Negotiating the everyday "balancing act" while reaching for new heights in innovation, membership growth, and better member service.
"This will be a celebration not only of our industry and the talent within each credit union, but of our strength and ability to work together for the next great service, capability, or training to help credit union members improve their lives," said Barbara Lehew-Bickley, SCCUL conferences and training director.

Gesa CU obtains naming rights to theatre

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WALLA WALLA, Wash. (12/13/12)--Gesa CU in Richland, Wash., and the Power House Theatre announced Monday they have entered into an 11-year, $1 million naming-rights agreement. The Power House Theatre will now be referred to as the Gesa Power House Theatre.

The agreement gives the $1.2 billion asset Gesa the exclusive naming rights to the theatre, including signage to be placed on the building following installation of a new roof. The new roof and other elements of the theatre's extensive remodeling project, will be funded largely through Gesa's financial commitment (Marketwire Dec. 10).

"Supporting a vibrant performing arts organization, such as the Power House Theatre, aligns with our credit union's core values," said Christina Lethlean, Gesa CU president/CEO.

Of Gesa's total $1 million commitment, $250,000 is to be used at fundraising events benefiting the theatre or specific capital campaigns designed to enhance the theatre's facilities as an incentive for matching future donors' contributions.

"The additional funds to be raised through the donation matching will assist the Gesa Power House Theatre in adding a new elevator to the north side of the building; restoring the original woodwork around the windows; adding heating, ventilation and air conditioning equipment; and adding technical infrastructure above the stage, while also providing for future operational growth," said Harry Hosey, the managing director of Power House Theatre.

U S mobile banking soars 50 in 2011

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MADISON, Wis. (12/13/12)--Mobile banking in the U.S. has soared 50% since 2011, according to a new global survey. Another survey found that marketing mobile banking can help credit unions and other financial institutions double the average adoption rates. And recent announcements indicate both credit unions and banks are taking advantage of mobile opportunities.

Asia has the highest mobile banking penetration, but survey respondents in the U.S. reported the highest frequency of use--an average 4.9 mobile transactions in the previous three months, according to Bain & Company's annual "Customer Loyalty in Retail Banking Report" for 2012.

Mobile banking is having the biggest impact on routine banking activities, said Bain, with 64% of mobile banking users in the U.S. saying that the future ability to use their smartphones or tablets to check account balances would be highly valued (Business Wire Dec. 11). Also, 41% of mobile banking consumers say that using their smart device for remote deposit capture through a digital image of an endorsed check would be highly valued, and 26% would value paying bills through their mobile device.

"Mobile banking presents profit-strapped banks with an opportunity to shift routine transactions from high-cost physical channels to much lower-cost digital channels," said Gerard du Toit, Bain financial services partner and lead author of the report.  "It also presents opportunities for banks to create more 'wow' experiences that use new digital technologies to delight customers and deepen customer loyalty."

The study found that across all banking models, U.S. mobile users report greater loyalty.

Marketing can significantly impact consumer adoption of mobile financial services, according to data provided by Mobiliti mobile banking and payments solutions and analyzed by Brookfield, Wis.-based Fiserv Inc. (Business Wire Dec. 12). 

Financial institutions that have actively marketed mobile banking have experienced an average adoption rate that is twice as high as financial institutions that have not promoted the service, said Fiserv. Within 12 to 18 months after launching Mobiliti, financial institutions that didn't market the service saw about 10% of eligible persons adopt mobile banking. Those who marketed the service saw adoption rates over 20% and in many cases over 30%, said Fiserv.

Credit unions and banks using Mobiliti have access to mobile adoption services from Fiserv to increase adoption and use of mobile banking, leading to a higher return on their mobile investment, said Fiserv.

"The focus on marketing mobile banking should be on educating customers--if customers understand how they can benefit from the service and how to get started, the convenience will compel them to extend the relationship with their financial institution to their favorite devices," said Steve Shaw, Fiserv vice president, strategic marketing, digital channels and electronic payments.

Bank of America has taken that advice to heart.  As part of a multi-pronged campaign to grow its mobile banking customers, it plans to outfit its teller stations with quick response (QR) codes that can be scanned by mobile devices to download the mobile app (American Banker Dec. 11).

The importance of mobile banking isn't lost on credit unions. A number in the past few months have announced various mobile banking services.

The latest is Michigan First CU, a more than $625 million asset credit union based in Lathrup Village, Mich. , which  announced Tuesday it had launched a new feature to allow mobile deposits for iPhone, iPad and Android mobile devices. Users of its mobile service can now take a photo of a check with their mobile device and deposit it directly into their checking or savings account.

"The use of mobile banking will continue to grow rapidly over the next several years, so we're investing in strengthening this technology for our members," said Michigan First President/CEO Michael Poulos. "You can't beat the convenience of snapping a quick photo with your phone to deposit a check. With today's busy lifestyles, we're constantly working to make the banking experience as fast and easy as possible for our members."

CU members targeted in scam

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BREMERTON, Wash. (12/13/12)--Kitsap CU (KCU) members were among those targeted by a phishing scam late Monday and Tuesday, but no members lost money or will have to close their accounts and open new ones, the credit union said.

KCU members received text message on mobile devices that stated their accounts required urgent attention. The messages asked them to contact a Florida telephone number (Kitsap Sun Dec. 11). Those who called were asked by an automated voice to punch in a series of numbers. Callers were first asked for the last four digits of their Social Security numbers. They were then asked for their 16-digit card numbers, expiration dates and personal identification numbers.

The Bremerton, Wash. credit union's security was not breached, and member funds and privacy are not at risk, said Mark Hughes, a credit union spokesman

Hughes told the Sun he did not know yet if members' personal identities were compromised.

KCU members within the 360 telephone area code on the Verizon Network appear to have been targets of the scam. Other Verizon customers who were not KCU members also were solicited, the Sun said.

Verizon told the newspaper it was checking on the reports.

Filene enters social media partnership

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CHICAGO and MADISON, Wis. (12/13/12)--The Filene Research Institute has partnered with QUEsocial, a social business enablement platform, to bring social media tools to credit unions nationwide.

The partnership will kick off in January with a pilot program that includes 50 credit unions using QUEsocial's platform, Filene said.  

The program "will provide individual credit unions and their employees with everything they need to use social media as effectively in their everyday work," Filene said. Features of the program include:

  • Exclusive Filene customized e-learning to help employees develop the skills to use social media effectively for specific job functions;
  • Content distribution that delivers relevant content to employees via short messaging service or e-mail for easy sharing to their social channels;
  • Gamification that motivates and rewards employees to convert social media activity into business outcomes; and
  • Business metrics that integrate with, recruiting tools, and other enterprise systems to demonstrate real return on investment.
"Our research demonstrates that social media has become an expectation for consumers today," said Mark Meyer, Filene CEO. "Credit unions that utilize social media for engagement can drive stronger business results across functional areas including recruiting, marketing and public relations and member service." 

QUEsocial is a social business solution that extends beyond marketing and enables organizations to benefit from the power of their employees' social networks, he added.

Illinois league role was key in fast-track foreclosure bill

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NAPERVILLE, Ill. (12/13/12)--The Illinois General Assembly (IGA) last week passed SB16, a measure that establishes a "fast-track" expedited foreclosure process to address the issue of abandoned residential properties in Illinois. After nearly two years of negotiations, the Illinois Credit Union League (ICUL) played a key role in advancing the legislation.

The bill, which will be sent to Illinois Gov. Pat Quinn for his signature, balances the interests of consumers, lenders and local governments and provides a solution for abandoned properties, ICUL said.

Key elements of SB16 include:

  • Establishment of a "fast-track" expedited foreclosure process. The fast-track concept has been a key focus and a fundamental priority for ICUL. The league worked with sponsors to "fine-tune" the mortgage foreclosure process to make it more efficient and expedient, and avoid provisions that penalize lenders (and, ultimately borrowers) through increased fines and penalties. SB16 accomplished those goals by allowing lenders to shorten the foreclosure process for abandoned properties by roughly 18 months. As a result, lenders will obtain title to these properties more quickly and assume responsibility under applicable ordinances to maintain and secure them, which will be good for neighbors, neighborhoods, and local governments, ICUL said.  Lenders also will acquire properties that are less damaged and deteriorated and that can be sold for more, and they will save 18 months of costs, such as property taxes, insurance and loan-servicing fees. The negotiated language includes a more efficient foreclosure process for lenders and protections for consumers, ICUL said.
  • Funding for remediation of abandoned property and pre-foreclosure counseling. An additional residential foreclosure filing fee will provide support for local governments and struggling homeowners. Institutions that have filed 175 or more foreclosures during the preceding calendar year will pay a $500 fee, those with 50-174 foreclosures will pay $250, and institutions with less than 50 foreclosures will pay $50. Most credit unions and community banks will pay the $50 fee, ICUL said. The fees are expected to generate about $41 million, with $28 million going toward abandoned property clean-up, and the remainder for housing counseling for homeowners. The fees will be remitted by the court clerks to the State Treasurer. The Illinois Housing Development Authority will then draw upon the funds to make grants to local communities and housing counseling agencies statewide.
  • Bankruptcy relief provision. SB16 also contains language that clarifies that a portion of the Conveyances Act is permissive, not mandatory, so it cannot be used to affect the validity or priority of a properly recorded mortgage by a trustee in bankruptcy. That provides a benefit to every Illinois credit union by protecting against the avoidance of mortgage liens in bankruptcy proceedings, ICUL said.
Additional provisions of the bill clarify the method of delivering foreclosure notices to municipalities, and require delivery of the notices to Chicago aldermen. The measure also directs lenders to notify the insurance company for the property, after confirmation of the property's sale. Further, the bill protects lenders and their agents from criminal and civil liability when entering, securing or maintaining abandoned residential property.

Foreclosure has been an overarching focus during the 2011 and 2012 spring sessions of the IGA. Although it was widely acknowledged by lawmakers that credit unions were not the cause of the crisis, many measures were introduced to address the issue. SB16 represents a compromise solution that will not only benefit credit unions but also the citizens of Illinois, ICUL said.

"SB 16 received the support of the Illinois Attorney General, the Speaker of the House, and both chambers of the Illinois General Assembly," said Stephen R. Olson, ICUL executive vice president and general counsel. "Throughout the process, the excellent reputation and respect credit unions have earned with legislators were very apparent. The support of Illinois credit unions played a key part in helping to pass this critical measure."