Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

CU System Archive

CU System

N.C. CUs mortgage assistance program featured in news

 Permanent link
RALEIGH, N.C. (12/14/10)--North Carolina credit unions that have begun mortgage assistance programs similar to that of the state's largest credit union--Raleigh-based State Employees' CU (SECU)--were the topic of a positive press report in which a couple--both schoolteachers--told how their credit union helped them keep their house. SECU's Mortgage Assistance Program, now two years old, calls for its loan officers to contact members at the first sign of financial problems--when the mortgage payment is more than 30 days overdue--to tell them that the credit union offers alternative payment plans for homeowners in distress Raleigh News & Observer (Dec. 12). SECU basically "turned our collectors into counselors," Mark Coburn, SECU senior vice president of loan servicing, told the publication. It offers to extend the length of the mortgage, accept partial payments for six months, and modify terms of a loan or refinancing. About a dozen credit unions in the state are working to modify mortgage terms for struggling families, the North Carolina Credit Union League told the publication. Since credit unions are owned by the members they serve, it's in their best interests to do all they can to achieve a happy outcome when the unexpected happens to a member, said Jeff Hardin, league director of communications. The Credit Union National Association provided statistics for the article comparing delinquent real estate loans in credit unions with those of banks. Credit unions in the state saw 1.85% delinquent real estate loans in June, compared with banks' 10.54%. In North Carolina, foreclosures totaled 63,284--a 47.6% hike from 2005, according to state data cited. This year's filings are on a pace to set a record. Last year SECU foreclosed 179 homes out of 121,625 mortgages and home equity loans--0.15%, which is slightly higher than in 2005. This year it has 175 foreclosures out of 123,815 loans. The article features other credit unions' similar programs--that of Raleigh-based Local Government FCU and of Durham-based Latino Community CU. It also tells about how SECU helped school teachers Eric and Misty Cain, keep their home after after Misty quit her job to spend more time with their two-year-old. Although they never fell behind on their mortgage, their credit card debt hit $20,000. They met with SECU and received an affordable plan--paying 50% of the mortgage for six months, not counting escrow payments, and refinancing at a lower interest rate to reduce their monthly payments. "It helped us keep our house," they said. For the full article, use the link.

Phish attacks vs. CUs rise to 10 in October

 Permanent link
GLASTONBURY, Conn. (12/14/10)--Credit unions in the U.S. saw the most pronounced change in phishing attempts against financial institutions in October, according to RSA Online Fraud Report for November. Credit unions accounted for 10% of phishing attacks during October, an increase from 6% in September and 3% in October. Phishing reports for credit unions haven't been that high since February, when credit unions were 12% of attacks, said RSA. The portion of attacks against regional U.S. banks fell 5%-- to 35%, the lowest since at least October 2009. Attacks against nationwide banks rose 1% during October, to account for 65% of the attacks in the U.S. financial sector, said the report. Glastonbury, Conn.-based RSA, a division of EMI, identified 16,047 worldwide phishing attacks, a 1% decrease from the total reported in September and the lowest number since 13,855 attacks were reported in June. The number of brands attacked increased slightly to 181 brands in October from 178 brands in September, said RSA's report. It was the second consecutive month that brands attacked totaled less than 200. The report also noted that botnet thefts--where criminals or security professionals "kidnap" an entire botnet by planting a poisoned configuration file into its command and control server--have seen two upgrades in the Zeus Trojan virus, making the malicious software harder to detect. The most talked-about upgrade for Zeus 2.1 is the new version's digital signature mechanism. Much like legitimate software, Zeus verifies the digital signature on all files and data it downloads, and ignores and deletes a file that doesn't match with the signature. Also, the new resources are stored in encoded form, which are decoded on-demand, when they are needed. Once the Trojan needs the resource, it decodes it, uses it, and then destroys the decoded copy, rendering it "invisible" to an outsider criminal or investigation. That makes it harder to analyze the malware.

Peoples FCU helping low-incomers to build wealth

 Permanent link
OAKLAND, Calif. (12/14/10)--People’s FCU was the only deposit financial institution in West Oakland, Calif., when it when it opened its doors in 2001--all the banks had fled in the area in the 1960s. As in most poor neighborhoods, many fringe financial service providers--check cashers, pawnshops and payday lenders--target the area’s unbanked and low-income population.
Leah Dorner of People’s CU assists Rodney Charlot at People’s FCU Volunteer Income Tax Assistance site. (Photo provided by the National Credit Union Foundation)
The credit union attacked this problem head on. It provides access to affordable financial services and savings accounts and loans. It also helps build assets by providing individual credit coaching, financial literacy and credit education workshops, and free income tax preparation. With an Innovation Grant from the National Credit Union Foundation (NCUF) this year, People’s FCU was able to expand and manage its community programs. Almost 90% of members earn below 80% of the area’s median income, including 51% that earn less than $22,000 per year, according to People FCU’s membership data. “People’s model of combining financial education with access to affordable entry-level and asset-building financial products is excellent,” said Lois Kitsch, NCUF’s REAL Solutions national program director. “Better yet, it can be replicated by other credit unions in the country. This is particularly relevant as tax season is right around the corner.” One of the most successful parts of People’s FCU’s community programs is free income tax preparation through its Volunteer Income Tax Assistance (VITA) site. The average income for households served by the credit union’s VITA site is less than $20,000. Earlier this year at its VITA site, People’s FCU:
* Completed 443 tax returns, a 41% increase over 2009; * Generated $544,099 in refunds for the West Oakland community, and; * Saved filers an estimated $110,750 in fees they would have paid to have their taxes prepared elsewhere.
Also, 25% of filers received the Earned Income Tax Credit (EITC), which usually is unclaimed by low-income workers either because they are either unaware of the credit or they don’t file their taxes to claim it. People’s FCU encourages filers to save part of their refunds and open savings accounts with the credit union. Eighty percent of new savings accounts opened at the VITA site earlier this year are still open today. The credit union also offers credit report review sessions at the VITA site to link filers to credit building education and opportunities. Its representatives also ask filers to complete a financial “wish list” or survey that inquires about their financial goals so it can offer them relevant credit union products and financial education. NCUF Innovation Grants are made possible by supporters of the foundation and the Community Investment Fund.

Growing needs are focus of Africa regulators roundtable

 Permanent link
LILONGWE, Malawi (12/14/10)--Rapidly growing membership and the increasing need for improved prudential oversight have catapulted Africa’s savings and credit cooperatives (SACCOs), or credit unions, to a new level of need.
Click to view larger imageMalawi credit unions serve people in rural areas like this mango grower.
Credit unions in the African nation of Malawi serve people in rural areas like this Mango grower.Defining credit union-appropriate oversight and operating procedures highlighted the third Africa SACCO Regulators’ Roundtable, sponsored by World Council of Credit Unions (WOCCU), the Canadian Co-operative Association (CCA) and the Irish League of Credit Unions Foundation. The three-day conference, held earlier this month in the east African nation of Malawi, attracted 50 credit union supervisors, policymakers and sector officials from 12 African countries who met to discuss ways to propel their respective credit union systems forward. It was the largest gathering yet for credit union supervisors and policymakers in Africa. Participating countries included Cameroon, Ethiopia, Gambia, Ghana, Kenya, Lesotho, Malawi, Seychelles, South Africa, Tanzania, Uganda and Zambia. Among the officials presiding over the third Africa Savings and Cooperatives Regulators’ Roundtable were (from left) Perks Ligoya, governor of the Reserve Bank of Malawi; World Council of Credit Unions Director Sylvester Kadzola, CEO of Malawi Union of Savings and Cooperatives; JoAnne Ferguson, Canadian Co-operative Association senior director of International development; Mary Nkosi, deputy governor of the Reserve Bank; and Dave Grace, WOCCU vice president of association services. (Photos provided by WOCCU.)African credit unions provide financial services to more than 15.5 million members. The credit unions, often located in rural areas, are experiencing 20% to 50% annual asset growth as they help move families from poverty to middle class. Such rapid growth creates a greater need for strong but appropriate prudential oversight, conference organizers said. “These roundtables have become a catalyst to accelerate regulatory developments on our continent,” said WOCCU Director Sylvester Kadzola, CEO of Malawi Union of Savings and Credit Cooperatives (MUSCCO), the country's credit union trade group. He said the roundtable marked a significant step forward for the movement. Following the framework of the recent Caribbean Regulators’ Roundtable co-hosted by WOCCU and the International Monetary Fund, the Malawi program offered guidance and advice on technical tools, applied training through case studies, and shared experiences of supervisory and legislative developments within Africa. As part of the roundtable activities, participants visited MUSCCO headquarters and a credit union operating in Malawi’s capital of Lilongwe.
Click to view larger imageAmong the officials presiding over the third Africa Savings and Cooperatives Regulators’ Roundtable were (from left) Perks Ligoya, governor of the Reserve Bank of Malawi; World Council of Credit Unions Director Sylvester Kadzola, CEO of Malawi Union of Savings and Cooperatives; JoAnne Ferguson, Canadian Co-operative Association senior director of International development; Mary Nkosi, deputy governor of the Reserve Bank; and Dave Grace, WOCCU vice president of association services. (Photos provided by WOCCU.)
Mary Nkosi, deputy governor of the Reserve Bank of Malawi, opened the program and later in the week joined Perks Ligoya, governor of the Reserve Bank, to meet with officials from WOCCU, MUSCCO and CCA to discuss pending credit union legislation. WOCCU drafted the new legislation in 2007, but it was approved only recently by the government’s cabinet. Before moving the legislation on to Malawi's parliament, Reserve Bank officials agreed to review provisions of the law that concerned the credit union sector. “While there is now broad acceptance of the need for prudential oversight of credit union activities in Africa, finding the right regulatory balance is especially challenging in small countries with many credit unions,” said Dave Grace, WOCCU vice president of association services, who oversaw last week’s roundtable. “There is no silver bullet. But we’re seeing a variety of innovative approaches that hold promise, and we're committed to working with those in the region on these developments.”

N.J. municipal deposits sponsor resigns

 Permanent link
TRENTON, N.J. (12/14/10)--New Jersey Assemblyman Fred Scalera (D-36), who introduced legislation to reform New Jersey’s 40-year-old municipal deposits law to allow local government entities to include credit unions when considering potential depositories, has resigned his legislative post to accept a position in the private sector, said the New Jersey Credit Union League. NJCUL said it is recruiting an additional prime sponsor for the legislation to replace Scalera (The Daily Exchange Dec. 13). The legislation passed the state Senate in June. With two prime sponsors and eight co-sponsors, the Assembly bill remains actively pending consideration in the Financial Institutions and Insurance Committee despite Scalera’s departure, the league said. Diversifying deposits to credit unions from banks would reduce risk, said Paul Gentile, league president/CEO July 8). Allowing credit unions to accept the deposits would benefit local government entities in these ways, he said:
* Credit unions receiving the deposits would be more likely to make deposited funds available to local businesses and consumers. While banks reduced business lending by 15% in 2009, credit unions increased their small business lending by 11% last year. * Depositors get better interest rates from credit unions, which will benefit the taxpayer.
Liberalizing the deposit act would help the public realize that credit unions are full-function financial institutions that almost anyone can join, Gentile said.

Consumers want to connect to FIs via social media

 Permanent link
MADISON, Wis. (12/14/10)--Consumers are interested in connecting with financial institutions through social media, according to recently announced results of a survey by Fiserv Inc., a global provider of financial services technology solutions. The survey indicated that 11% of online consumers are connected with their bank or credit union through a social site, and more than one-third (36 %) of those not connected are interested in doing so. Interest is highest among Gen Y consumers, at 45% (BusinessWire Dec. 7). “There is clearly a sizable segment of consumers who are interested in interacting with their financial institutions through social sites,” said Geoff Knapp, vice president, online banking and consumer insights, Fiserv. “An active, engaging online social media presence is a viable way to maintain and grow valuable relationships with consumers who are visiting branches less and interacting through digital channels more.” The survey, conducted by Fiserv Consumer Insights in conjunction with The Marketing Workshop in August 2010, obtained responses from 3,000 consumers, representative of the U.S. online population. To participate, respondents had to have a checking account and some responsibility for paying bills. Major findings included:
* Social media is about building relationships: The primary motivations for consumers to connect with a brand are personal and relational, not transactional; * Financial institutions have a significant opportunity to connect with customers: 84% of online consumers actively participate in social media, but only 11% have connected with a financial institution; * Consumers lack awareness: 71% of respondents who want to connect with their bank or credit union via social channels did not know they could; * Consumers don’t understand the value of connecting with financial institutions: Consumers are not entirely clear about why they should connect with their bank or credit union via social channels; and * Consumers have privacy and security concerns: Consumers of all generations are concerned about mixing their social and financial lives.
For financial institutions to maximize the opportunity social websites provide, Fiserv has several recommendations:
* Embrace the opportunity to form and enhance digital relationships through social media. * Increase awareness. To overcome this barrier, banks and credit unions should incorporate social media messaging into existing marketing efforts in other channels. This can be as simple as incorporating Facebook or Twitter icons into print or digital marketing communications. * Differentiate social media from the transaction-driven website. Financial institutions must differentiate the social media channel from the transactional channel and offer members/customers community-building activities, such as access to fellow member recommendations, they cannot get from the traditional website. * Communicate a clear value proposition. Banks and credit unions must clearly communicate and educate members/customers on the additional value of connecting through social media. Emphasizing the unique benefits of the channel such as the ability to interact with other members, receive special offers, and contact member service will help members better understand why they should connect. Social media is still relatively uncharted territory for financial institutions, providing the opportunity for banks and credit unions to customize what they deliver through social media based on what is most important to their member/customers and the institution. * Dispel security and privacy issues. Financial institutions need to clarify and communicate security and privacy expectations within social media to eliminate barriers to adoption.
To read the white paper, use the link.

CU System briefs (12/13/2010)

 Permanent link
* FERNDALE, Mich. (12/14/10)--Donald Murray, former treasurer/manager of Ferndale Co-op CU (now Credit Union ONE, based in Ferndale, Mich.), died Nov. 18, according to the Michigan Credit Union League. He was 86. Murray went to work for the credit union in 1948 and was treasurer/manager from 1950 until his retirement in 1986. He is survived by his wife, four children and six grandchildren (Michigan Monitor Dec. 13) …

REAL Solutions Illinois closes out 2010

 Permanent link
NAPERVILLE, Ill. (12/14/10)--Innovations from the Filene Research Institute were discussed and representatives from the Illinois State Treasurer’s Office presented small-dollar loan programs at the final in-person meeting of REAL Solutions Partner credit unions in Illinois for this year. The REAL Solutions program works through state credit union leagues to help credit unions offer services that have proven successful for people of modest means and “low wealth.” The Filene innovations centered on member savings and debt reduction initiatives, and loans and other support for small and start-up businesses. These included:
* Debt in Focus: A Web-based debt management tool that is anonymous, contains no financial jargon, and provides the users with a summary of their situation; *The Big Payoff Loan: A debt “snowball” plan; * Co-Opera: A co-op to co-op lending website that provides opportunity for more cooperation among cooperatives; * Two Grand Plan: A program to assist members with savings earmarked for emergency situations; * R-Bond: A solution that provides a way to reward low-income taxpayers for saving by allowing a portion of a tax refund to be directed to a savings bond; * UMatter: A member referral and benefit program; * 60-Day Loan Guarantee: Given that many less reputable lenders over the past few years have diminished trust in the marketplace, this program gives members a refund on paid interest in the first 60 days if the loan was returned/paid back, regardless of the reason; * B N Biz Fund: Provides young entrepreneurs with greater access to funding to start or expand a business; * CU Launch: A program designed to match specialized needs with customized services with a consultative approach to starting up a new business; and *LIFT (Lower Interest For Timeliness): Allows members to reduce their interest rate, pay their loan off quicker and reduce the amount of interest paid by making their loan payment on time-- each year they pay on time until the end of the term.
Staff from the Illinois Treasurer’s Office provided details on small-dollar loan opportunities available via its office. They are:
* Opportunity Illinois: The Illinois State Treasurer’s Office invests millions of dollars annually in low-interest loans to consumers and community development agencies through the Opportunity Illinois program. The office partners with eligible lenders to offer interest rate reductions to nonprofits, financial institutions, hospitals and credit unions to improve their services in underserved communities. The office also works with lenders to make loans affordable for Illinoisans with disabilities, families of U.S.military personnel called to duty, and victims of natural disasters. * The Opportunity Illinois: The micro loan program provides the capital that credit unions and community banks need to help low-income residents who might turn to payday lenders. Because of their low interest rates, micro loans may be a cost-effective way for low-income residents to pay for expenses and emergencies without racking up unmanageable debt. * Access to Capital through State Deposits: The Treasurer’s Office provides low-cost liquidity to banks, credit unions and savings and loan institutions located in the state. The goal is to provide an additional source of funding for Illinois financial institutions during the current economic and market conditions.
The Illinois Credit Union League and the Illinois Credit Union Foundation have teamed up with the National Credit Union Foundation to offer the “REAL Solutions for Low Wealth Households” program. Currently, 48 credit unions in the state are participating. REAL stands for Relevant, Effective, Asset-building, Loyalty-producing, and is being operated in 40 states and more than 1,100 credit unions.