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Filene Report: Why CUs Should Be Allowed to Accept Public Deposits

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MADISON, Wis. (12/13/13)--Allowing credit unions to accept public deposits increases choice in the marketplace, provides greater competition, and in many cases, provides better convenience for trustees of the public's money, according to a new report from the Filene Research Institute.
 
"Credit Unions and the People's Money: Estimating the Benefits of Allowing Credit Unions to Accept Public Deposits," explains why credit unions should be allowed to accept public deposits. With many differences in state laws, the report takes a national look at the consequences.
 
Among the report's findings:
  • Credit unions routinely provide depositors and borrowers with substantially and sustainably more attractive interest rates than commercial banks.
  • If the fraction of total public deposits in credit unions increased from its current low level (0.4%) to the fraction of total domestic deposits in credit unions (10%) over a 10-year period, public entities would receive an additional $1.8 billion in interest. Borrowers in local communities would pay $2.3 billion less in interest.
  • There are many small communities in the U.S. that don't have commercial bank but but do have a credit union. For public entities in these communities, the ability to deposit funds in the local credit union is of significant value. Many communities are also low-income areas with economic challenges. Restricting credit unions from participating in the public deposit market puts the cost on those least able to afford it.

CU System Briefs (12/13/2013)

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  • DECATUR, Ala. (12/13/13)--A Harselle, Ala., man accused of forging checks was nabbed by Decatur, Ala. police after Redstone FCU tipped off a business owner (The Decatur Daily Dec. 11). Joseph Nicholas Clifton, 34, was arrested Wednesday and charged with three counts of second-degree possession of a forged instrument. Clifton allegedly had used forged checks to steal money from McClary Tire and Direct Inc. The alleged victims were made aware of the situation when a Redstone FCU fraud investigator warned that checks supposedly issued by the companies had cleared, but were suspicious. Decatur Police investigators fingered Clifton as the suspect after the two companies reported the activity. A police spokesman said one of the checks, cashed against Direct Inc.'s assets, was made out for $981 to a "Joe Clifton." Redstone FCU is based in Huntsville, Ala. It has $3.54 billion in assets ...
  • BOULDER, Colo. (12/13/13)--Elevations CU won the RMPEx Peak award for 2013, a spokesperson for the credit union announced Thursday. The award, which is given for execution in business process management, is a state-level honor and a prerequisite for the Malcolm Baldridge National Quality Award. Peak Awards, according to the credit union, are given to applicants able to demonstrate "role-model results, plus systematic and mature approaches, effective deployment, process learning and process integration in their operations." Elevations CU is headquartered in Boulder, Colo. and has more than $1.4 billion in assets ...
  • COLUMBUS, Ohio (12/13/13)--A friendly competition between Credit Union of Ohio and the University of Michigan CU led to a victory for Children's Hospitals in the two states. An annual "Money War" held by the two cooperatives the week before the Ohio State University-University of Michigan football game led to $7,300 in donations. Nationwide Children's Hospital in Columbus, Ohio, is set to receive $3,922, while C.S. Mott Children's Hospital in Ann Arbor, Mich., will receive $3,385--the amount raised by each credit union. The two institutions combined raised twice as much as they did last year. "The most exciting part of this year's 'Money War' was having our entire staff work together to get our members and the community involved," said Jill Gerschutz of the Credit Union of Ohio. "We had 100% participation from our staff which is how we were able to more than double the amount we raised last year." As part of the "Money War" tradition, University of Michigan CU staff will send back the winner's trophy alongside a photo of their staff wearing Ohio State University's colors--scarlet and gray. Since the competition started four years ago, both credit unions have won twice. Credit Union of Ohio is headquartered in Hilliard, Ohio, and has $133 million in assets. University of Michigan CU is located in Ann Arbor, Mich. and had $517 million in assets ...

The Disclosures' Kids' Album Climbs the Amazon Charts

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MADISON, Wis, (12/13/13)--Less than 24 hours after the credit union singing duo, The Disclosures, announced the release of its financial education album for kids, the album was climbing the charts of hot new releases on Amazon, achieving the No. 2 spot Thursday on Amazon's educational category, ahead of "Sesame Street."
 
The album, "The Secret to Being Rich," was No. 14 in the top 20 hot new releases on the Amazon's general children's music chart Thursday and was even ahead of "Sesame Street," said Christopher Morris, who moonlights as a Disclosure when he's not working as director of communications for the National Credit Union Foundation.
 
"We are humbled by the response to 'The Secret to Being Rich,' both on Amazon and especially across the credit union movement," said The Disclosures. Morris and Chad Helminak, Web and member development strategist for the Wisconsin Credit Union League, make up the duo.
 
The album includes 10 original songs about financial literacy concepts such as saving, responsible spending, the importance of charity, the dangers of "too good to be true" advertising, and how loans work. It also features discussion materials for teachers and parents.
 
For more information, use the link to the News Now Dec. 11 story, The Disclosures Have New Fin Ed Album for Kids. Use the Amazon links to monitor the album's movement on the charts.

PCUA Testifies at State House Aging and Older Service Committee

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HARRISBURG, Pa. (12/13/13)--
Frank Serina, second from right, vice president of risk management and security services at Members 1st FCU, Mechanicsburg, Pa., represented credit unions Wednesday in testimony about combating financial abuse and exploitation of the elderly during a hearing of the Pennsylvania House Aging and Older Services Committee. (Photo provided by the Pennsylvania Credit Union Association)
A credit union representing the Pennsylvania Credit Union Association and the state's credit unions told a state House committee Wednesday what credit unions are doing to combat financial exploitation of the elderly.

Testifying before the state House Aging and Older Adult Services Committee was Frank Serina, vice president of risk and security services of Members 1st FCU, Mechanicsburg, said PCUA (Life is a Highway Dec. 12).

Among the areas he focused on were current credit union financial education efforts, training and reporting standards, and the concern about a training and reporting mandate. The committee is exploring legislation to battle the growing cases of elder abuse, neglect, exploitation and abandonment of older Pennsylvanians, said PCUA.

"In a collaborative effort, PCUA, Pennsylvania Bankers Association and Pennsylvania Association of Community Bankers are working with key policymakers to ensure that potential legislation does not increase regulatory burdens or costs for financial institutions to comply," said PCUA President/CEO Patrick Conway.

"Credit unions have been and continue to be trailblazers in financial education and targeting their efforts to protect their senior members. That's a story we're very proud to tell elected officials," Conway added.

Last month, the Credit Union National Association noted that credit unions from across the nation are working to combat financial elder abuse and exploitation. Their work includes training staff to identify and report abuse, instituting new programs to recognize irregular financial activity, and helping educate vulnerable members about avoiding fraud and theft (News Now Nov. 13).

The National Credit Union Administration has encouraged credit unions to ensure that staff are trained about potential signs that might trigger a report of elder abuse or financial exploitation.

Cornerstone Marketers Share How to Reach Young Women

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FARMERS BRANCH, Texas (12/13/13)--Women, particularly younger ones who are entering the work force, need credit union services that adapt to their busy and ever-changing lives, according to two marketers from Cornerstone Credit Union League.
 
Lorraine Howard, vice president of marketing, Diamond Lakes FCU, Hot Springs, Ark., and Rochele Drake, vice president of marketing, Fort Worth (Texas) Community CU, offered advice on how to reach Millennial females (Leaguer Dec. 12).
 
"Women, young women particularly, are holding the family wallet, paying the bills and contributing to the family bottom-line more and more," said Howard in the article. "Working with single mothers through the local community college has shown me, first hand, the determination young women have to get an education and pave the way for a better life for their family."
 
The $59 million-asset credit union focuses on mobile and Internet banking, electronic bill pay, and even person-to-person payments and transfers. Education loans for community college classes are important, as well as loans for a demographic that is currently on pace to match the wage level of men in the work force, Howard said.
 
Fort Worth Community CU engages women with its digital "spokesgal," Gabby.
 
"We know that women make 80% of all financial decisions; therefore, women are an essential demographic for our credit union," Drake said. "Women talk to one another. We share secrets and advice with one another. Gabby is that girlfriend who shares information."
 
Gabby's blog, GetYourWorthOn.com, has had about 30,000 visits. Gabby is meant to be engaging, not sales-focused. "She was never intended to push any particular product or service of the credit union," noted Drake.
 
Gabby has been so successful that the $813 million-asset credit union just launched "That's Spot On," aimed at Gen Y and defining the credit union difference.

CUNA CFO Council Paper Offers 'Portrait of Modern CEO'

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MADISON, Wis. (12/13/13)--Replace "bean counter" with "guardian of financial health." Add growth strategies to the equation of math and finance. Put together, you have today's chief financial officer, according to a new white paper from the CUNA CFO Council.
 
"Portrait of a Modern CFO" paints a picture of a CFO who meets compliance challenges as well as balances financials. It provides an industry perspective of CFOs' evolving roles, at an individual and business level.

The paper cites the International Federation of Accountants, which said today's CFOs are expected to:
  • Be the guardian of the organization's financial health;
  • Participate in driving the organization toward achieving its objectives;
  • Increase support of strategic and operational decision-making in a business partnering capacity; and
  • Fulfill traditional stewardship responsibilities related to governance, compliance and control, and business ethics.
The white paper presents the typical four categories of CFOs--finance experts, performance leaders, growth champions and generalists--and offers ways for current CFOs to assess their strengths.

Three credit union CFOs are interviewed in the white paper: Robert Reh, CIO, Nassau Financial FCU, Westbury, N.Y.; Brian Hughes, vice president of finance, wealth and business solutions, Sun FCU, Maumee, Ohio; and Paul Meissner, CU of America, Wichita, Kan.

CUs Create New Association Dedicated to Police CUs

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ORANGE, Calif. (12/13/13)--Law enforcement credit unions now have an association dedicated to helping them address the unique challenges that they face.
 
Creation of the new Police Officers' Credit Union Association (POCUA) stems from a conference launched in 2004. Since then, interest and support for an association has grown.
 
"The new normal of thin margins, increased regulatory compliance and fierce competition for business has brought about a greater need for an association," said Ken Bator of Bator Training and Consulting. He added that POCUA "will act as a conduit where members of any size will find resources and support to not just survive but to thrive."
 
To create the association, Bator Training and Consulting worked with a group of credit union executives from Chicago Patrolmen's FCU; Police FCU, Upper Marlboro, Md.; Delaware State Police FCU, Georgetown, Del.; State Highway Patrol FCU, Columbus, Ohio; and Greater Hartford (Conn.) Police FCU.
 
Member benefits include asset-liability management policy reviews, strategic planning services, training and specialized marketing materials.