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Delinquent credit card accounts increase

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SAN FRANCISCO (12/27/07)--With Americans deeper in credit card debt that they were a year ago, credit unions may want to keep tabs on their members' accounts and step up financial counseling and education efforts before others reach the delinquency point. Credit card accounts are entering delinquency at a faster rate, with serious delinquencies growing at the highest rate, says an Associated Press (AP) analysis of data from the nation's largest card issuers (The Wisconsin State Journal Dec. 24). Until recently, credit card default rates were at near-record lows. Analysts, who studied detailed monthly filings with the Securities and Exchange Commission of 17 large credit card trusts, blame the deterioration of household credit on leakage from the subprime mortgage crisis. The greatest increases--50% or more--were reported for accounts more than 90 days overdue by lenders such as HSBC, GE Money Bank and Advanta. In October, accounts that were at least 30 days late jumped 26% to $17.3 billion from a year ago. That accounts for more than 4% of the total outstanding principal balances owed to the trusts on credit cards issued by large banks and retailers. Defaults rose 18%--to almost $961 million--during October, according to filings made by the trusts with the Securities and Exchange Commission. The data represent roughly 325 million individual accounts held in trusts that were created by credit card issuers to sell the debt to investors. The accounts represent about 45% of the $920 billion that the Federal Reserve counts as credit card debt owed by Americans.

Survey Credit concerns not limited to mortgages

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CHANTILLY, Va. (12/27/07)--If there were ever a time your members needed help with setting their budget priorities, it's now. Yet another nationwide survey documents that credit concerns for consumer households aren't limited to mortgages. The mortgage sector's woes are spilling over into the broader economy and affecting consumers' ability to pay all their bills, according to a survey of more than 1,000 U.S. households by Online Resources Corp. Americans increasingly are being forced to prioritize among their bills by creating a "delinquency budget" to determine which bills get paid. While mortgage bills are the bill households are most likely to pay, businesses across other industries are facing a decreasing share of that delinquency budget. The survey found:
* One out of four households reported they were delinquent on at least one bill by at least 30 days; * If forced to choose between which bills to pay, 98% would likely pay the mortgage first; * Credit card, phone, healthcare, utility and loan payments are among the bills least likely to be paid.
Online Resources, a provider of web-based financial services, also surveyed clients--including credit unions--from its biller end-point network. Most respondents reported a negative impact already from the consumer credit crunch. Only 2% of the companies surveyed expect it to be easier to collect payments in 2008, and 84% expect to spend more on collections efforts. Both surveys point to a disconnect between billers and consumers about how consumers prefer to resolve their delinquencies. Most consumers surveyed prefer to make delinquent payments over the web because of its convenient and nonconfrontational nature. However, only 8% of billers offer online collections services beyond accepting payments that would allow consumers to resolve the delinquency. "Today's challenging credit environment could pose a serious risk to companies in all recurring-bill industries and their ability to carve out a priority spot in consumers' budgets," said Matthew P. Lawlor, chairman/CEO of Online Resources. "Billers who provide consumers with more options to resolve their delinquencies will have a distinct advantage in competing to win a priority share of the delinquency budget and also retain valuable consumer relationships."

Medias advice for 08 includes joining a CU

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WASHINGTON and NEW YORK (12/27/07)--Major media outlets are turning their financial focus to 2008 and offering consumers advice. Two well-known media--Dow Jones News Service and The Washington Post--have included credit unions in their suggestions. In The Washington Post (Dec. 23), a financial adviser tells about a woman who earns $44,000 a year and wanted to pay off $4,500 on her credit card plus save at least three months of her living expenses, but who was thwarted in her goal when her 15-year-old car died. Among the suggestions: Figure out what she could afford in a car payment every month and "join a credit union." "Credit unions typically offer lower auto financing rates than banks or dealers." She joined a credit union and was approved for a 48-month loan at 5.99%, "much less than the rates quoted by her bank." In Dow Jones (Dec. 26), columnists Gail Liberman and Alan Lavine told "How to Reap Greater Benefits from Your Bank in 2008." Among their tips: credit unions "tend to be cheaper" in ATM fees; protect your online account by using a credit union or bank with a good record of reimbursing accounts; and "Credit unions often have lower rates than banks on car loans and other types of loans." Liberman and Lavine also suggested a website--www.creditunion.coop--for consumers to use in locating a credit union.

CUs remote deposits double in one year

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PLANO, Texas (12/27/07)--Credit unions squeezed by increased expenses related to processing paper checks are discovering the cost-saving efficiencies of remote deposit services, says Southwest Corporate FCU. "This past year has seen an explosion of adoption (of the services)," said Jody Beck, senior vice president of operations at the corporate (eFACTS Dec. 26). Beck predicted that 2008 would be even busier. Southwest Corporate, one of the nation's largest payment services providers, said its statistics help illustrate a nationwide trend. In November 2006, roughly 134 credit unions, representing 548 branches, had signed up for the corporate's remote deposit service. A year later, the number has grown to 331 credit unions, with 1,177 branches in 27 states. Transactions also increased to more than five million in November 2007 from 2.5 million in November 2006. Beck, noting the service had doubled during the past year, put the numbers into context: "this is a service that didn't even exist three to four years ago." Credit unions using the remote deposit service scan the checks in batches and send the check images to Southwest Corporate, which completes the process. The credit unions no longer spend time and money encoding checks. The checks are cleared and the image is archived for online member access. Beck outlined the advantages of capturing deposit actions at the point of entry: faster identification of fraudulent activity and customer deposit errors, a reduction of lost checks during transport, and no microfilming needed. In 2006, more than two-thirds of all noncash payments in the U.S. were made electronically, according to the Federal Reserve's 2007 study of noncash payments. About 19 billion more electronic payments were made in 2006 than in 2003. The number of checks during that period fell by seven billion. With about 33 billion checks written in 2006 in the U.S., check processing will remain important. However, said Beck, the way the checks are processed will continue to change. "In this case, change is good," she said. "Lots of credit unions are going to save lots of money by processing checks electronically."

22 receive CUNAs financial counselor designation

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MADISON, Wis. (12/27/07)--Certified Credit Union Financial Counselor (CCUFC) designations were awarded to 22 people by the Credit Union National Association (CUNA) in December. This is the fourth class to receive the certification. Participants attended CUNA’s Certified Financial Counselor School: Parts I and II and successfully completed the exams to receive the designation. The program teaches how to help members prevent financial difficulties with responsible money management techniques, as well as how to design and implement a credit union financial counseling program. Certified Financial Counselor School: Part I and the new Advanced session will be offered beginning March 30 in Miami. A two-part self-study version of the program--the Credit Union Financial Counseling Certification Program (CU FiCEP)--is also available. To view the list of new CCUFC designees or for more program information, use the resource links.