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Online-shopping hike means CUs may see more member debt

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MADISON, Wis. (12/4/08)--While holiday shopping from Black Friday are indicating consumers are pulling back their spending for the holidays, Cyber Monday saw the second heaviest shopping day on record. That means shoppers are using debit and credit cards to pay for those online purchases. And because online sites usually don't take checks or cash, the purchases--and their shipping fees--are added to consumers' credit and debit card debt. Even with the economy, credit unions can expect members to have increased debt for these purchases. Online shoppers spent $846 million on Monday--a 15% increase over the Monday after Thanksgiving last year, according to comScore Inc., a research firm. Only the $881 million spent on Dec. 10, 2007, tops that Web sales figure (ComputerWorld Dec. 3). The sales were made even though websites of several national retailers failed during the four day-weekend. So far for this year's holiday season, which began Nov. 1, the $12 billion in 2008 online purchases is 2% less than last year, said comScore. The firm had predicted this year's holiday sales would be flat, compared with last year's. The state of the economy is influencing consumer shopping habits, according to a recent survey (LoneStar Leaguer Dec. 3). About 61% of consumers surveyed between Oct. 24 and Nov. 10, expected to cut back this holiday season, but 97% expected to purchase something online this year, and 55% intended to purchase more than half of their holiday gifts online--a 10% increase from last year. Purchasing online is a cost-cutting strategy, said In addition to planning to stick to a budget to control impulse buying (53%); shop at discount or outlet malls (43%); and purchase only sale items (35%), roughly 37% said they would use comparison shopping websites. predicted credit card spending would increase 3% during this year's holiday season, compared with a 10% increase for the period in 2007. It noted that the holiday shopping season is shorter this year, consumers are spending less, and credit card issuers are less likely to extend more credit, which means for slower card spending. Some shoppers shifting to a cash lifestyle to gain financial control will find that several websites will offer a cash payment alternative through eBillme, a payment option that leverages online banking for eCommerce checkout. eBillme allows shoppers to choose the option at checkout. Their order is confirmed with an eBill sent to their e-mail address. Consumers pay the eBill through their online checking or savings account. The transaction clears with no personal or financial information required. Either way, consumers are still adding to their debt.

Report Phishing incidents up fewer entities targeted

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BEDFORD, Mass. (12/4/08)--Although phishing incidents are on the increase, fewer entities are being targeted by them, according to the October Global Online Fraud Report from RSA's Anti-Fraud Command Center. The total number of attacked entities decreased in October, to the lowest level since November 2007, despite an overall increase in the number of phishing attacks, said RSA. That's because fraudsters are focusing efforts on launching a large number of attacks against a smaller number of organizations, likely with the intent of targeting those with more customers and assets, the company said. Some credit unions and banks are finding themselves targets of recurring phishing attacks with members and nonmembers receiving e-mails, automated robotic phone calls and text messages purporting to be from the credit union. The bogus messages attempt to collect personal information such as account numbers and personal identification numbers. News Now has reported on these incidents as they occur, usually several times a month. Attacks against regional banks accounted for half of the total attacks against U.S. financial institutions, while those against nationwide banks dropped slightly during October, said RSA. While the U.S. continues to retain its position as the top country hosting more than half of the world's phishing attacks, Russia's percentages decreased, dropping that country to seventh place from fourth place. The U.S. and the United Kingdom remained the most widely targeted banking brands, with 73% of all attacks. Poland also entered the list for the first time, and Mexico replaced Columbia as the most targeted Latin American country.

CU in school helps students avoid check cashers

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TAMPA, Fla. (12/4/08)--Suncoast Schools FCU has opened a branch and installed an ATM at Bowers/Whitney Career Center in Tampa, Fla., to help students keep more of their paychecks by avoiding check cashers. The move was made to help working students, said school Principal Tony Colucci (Tampa Tribune Dec. 3). Because the school is a career center, many students have part-time jobs and have had to take their paychecks to check cashers, which charge fees that take sizeable portions out of checks, Colucci told the newspaper. Some students were paying up to 18% just to cash their check. For a $100 check, that amounts to almost $20 lost, he added. After Colucci approached the credit union about opening an in-school branch, the $6 billion asset Suncoast took action and set up a place where students can conduct transactions with a teller once a week. They also can use the credit union-installed free ATM on campus. Students can open an account with a minimum of $5 and can take out as little as $1. Students have told Colucci that being able to conduct financial transactions on campus has made them feel safer and allayed fears of being robbed after cashing their paychecks. The credit union branch also has helped students budget and save, he told the paper.

Employee perceptions of CUs have operations implications

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MADISON, Wis. (12/4/08)--A Filene Research Institute study concludes that employees' perceptions of their credit union may have implications for management about the credit union's operations in six areas. The study, "Employee Perceptions of Credit Unions: Implications for Member Profitability," was the topic of a News Now story Sept. 24. Further implications of the study's findings for senior management are also discussed, according to a review by the Texas Credit Union League (LoneStar Leaguer Dec. 3). The six implications are:
* Credit unions are different. If employees commit to what a credit union is, member outreach should be more successful. "It is one thing to claim, 'We have low interest rates on loans,' but is quite another to be able to say why." * Employees are "almost there." They are fairly committed to the idea of a credit union, and they almost unanimously agree that knowing about credit unions is important. Still, the shared understanding remains mostly implicit and is not readily articulated. When asked to explain credit unions in a face-to-face context, employees generally offer only small parts of the whole. * "Ours is not to reason why." Most employees do not see the credit union's characteristics as logically or causally connected. They associate different features with these but not in a clear fashion. The study suggests embedding causal ideas within a story or mythic framework to reach rank-and-file employees. This would give them a template for explaining credit unions to nonmembers. * Trust may be a hidden strength. "Trustworthiness" describes a credit union, but it did not figure prominently in the way employees talk about credit unions in face-to-face interviews--a missed opportunity for credit unions to build on trust as a primary differentiator. Trust may be a feature best expressed tangentially but it is an asset that should not be ignored, the study said. * Some employee groups are not as 'on board' as others. One such group is the most educated group. Many of these employees may see credit unions as substituting ideology and emotion for performance. They are more negative about credit unions' future, see more "dead wood" among fellow employees, and see deficiencies in efficiency, competence and professionalism. * Local institutional cultures matter. Employee commitment, consensus score, degree of trust and wanting to know about credit unions vary significantly by local credit union. That means local management styles and education programs can make a difference; these indicators rise and fall together, suggesting each influences the rest; and all are to some degree contagious in the sense that levels of commitment, trust and so one are self-propagating among employees.
The study is available at the resource link.

California bill proposes consolidating state regulators

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SACRAMENTO, Calif. (12/4/08)--A California bill--Assembly Bill 33--proposes to consolidate all state financial industry regulators into one department, which is causing some concern for credit unions in the state. Current law provides for the licensing and regulation of banks, credit unions, and other financial institutions by the Commissioner of Financial Institutions; for the licensing and regulation of residential mortgage lenders and finance lenders by the Commissioner of Corporations; and for the licensing and regulation of real estate brokers by the Real Estate Commissioner. The bill would require the Secretary of Business, Transportation and Housing, in conjunction with the commissioners from the three agencies, to develop a plan to consolidate the operations and licensing frameworks of the three departments into a single department by Jan. 1, 2015. The plan would be submitted to the state legislature by Jan. 1, 2012. The bill would make legislative findings and declarations in that regard. Although the California Credit Union League doesn’t have an official position on the matter at this time, it does have some concerns, Keri Bailey, league director of state government affairs, told News Now. “Up until the late 1990s, all state financial regulators were consolidated under one group--the Department of Corporations,” Bailey said. “The league worked to make separation a reality in the late 1990s--to help make sure there were some firewalls [between regulations of credit unions and other financial institutions].” With that separation, the Department of Financial Institutions regulates about 400 entities--including credit unions--and the Department of Corporations regulates about 1,130 entities, Bailey said. With consolidation, “some issues would be of concern to credit unions; we’re different animals,” Bailey said. “Our folks like a regulator such as DFI that understands credit unions and how they function,” she added. “If there is just one ‘super regulator,’ that could be problematic. That move could create a risk of the uniqueness of credit unions being misunderstood or diluted, just through the sheer numbers [of entities regulated].”

CUNA blogging live from Yes Summit through Friday

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TAMPA, Fla. (12/4/08)--The 2008 Your Essential Strategies (Yes) Summit kicked off Wednesday and runs through Friday, and anyone who is not there can still attend through the Credit Union National Association’s (CUNA) live conference blog. The CUNA YES Summit focuses on serving 18- to 30-year-old credit union members. The CUNA YES Summit aims to:
* Provide information for attendees to better understand the demographic; * Educate attendees on Gen Y’s four basic financial needs and how credit unions successfully address those needs; * Foster meaningful interaction with young adults and collaboration with credit union professionals; * Generate ideas and action through interactive sessions; and * Offer information about innovative initiatives throughout the movement focused on Gen Y.
The blogs are posted by Christopher Morris, CUNA Councils Web manager, and Philip Heckman, CUNA’s director of youth programs. Credit unions can respond to the blogs by clicking “comment” to any of the postings. Also, Josh Jones, Yes organizer and CUNA manager of young adult programs, has posted a welcome video on the blog site. Participants in the blog can take part in discussions, post questions and comments and follow the key points that Summit speakers make.

CU System briefs (12/03/2008)

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* MANCHESTER, N.H. (12/4/08)--St. Mary's Bank, the nation's first credit union, has named Ronald H. Covey Jr. as the eighth president/CEO in its 100-year history, says the credit union's website. Covey has more than 30 years in banking, most recently as executive vice president of commercial banking for Ocean Bank in New Hampshire and Maine. He will succeed Ronald J. Rioux, who will retire at the end of January after serving the credit union since 1993. Board Chairman Ovide Lamontagne said Covey "understood our core values of community-oriented and member-focused service." Covey also has senior management experience at Citizens Bank, Numerica Savings Bank and BankEast. Rioux was instrumental in creating America's Credit Union Museum, which opened in 2002 at the credit union's original site. Covey will join the credit union in mid-December and work with Rioux and the board on a transition. Covey's priorities will be to continue the credit union's commitment to making loans available to members, particularly in the struggling economy; building on St. Mary's mission to serve a diversifying immigrant population of greater Manchester, and expanding technology to increase member convenience … * PHOENIX (12/4/08)--The Arizona Credit Union League and its affiliates raised more than $9,700 for local charities through its annual co-ed softball tournament Nov. 15. This year, CO-OP Financial Services matched the amount raised, bringing the total to $19,400. Proceeds will benefit CUs For Kids, which supports Children's Miracle Network hospitals, Phoenix Children's Hospital's One Darn Cool School program and Tucson Medical Center's Hand on Therapy program. Funds were raised through ticket sales, registration fees, and operating a hot dog stand provided by Enterprise Car Sales. Forty credit unions participated. Desert Schools FCU won the "Competitive" tournament, beating SunWest FCU. In the "Just for Fun" tournament, Bashas' Associates FCU earned the title in a game against Altier CU. Hughes FCU won the Spirit Award for the tournament with the most ticket sales and cheerleading … * BURLINGTON, Mass. (12/4/08)--On April 20, the Credit Unions Kids at Heart program will mark its 10th year in Boston Marathon on behalf of Children's Hospital Boston. The program has raised $2.9 million since 1996 for efforts such as a patient-family lounge for the hospital and fetal research. Since 2000, the program has sponsored a marathon team of credit union volunteers, members and employees. This year's 55 credit union sponsors expect to present a check that will put fundraising "over the top" of the $3 million mark, with 2009 expected to bring in roughly $300,000 through a combination of the marathon, annual Credit Union Invitational Golf Tournament, a raffle, and credit unions' activities. Next spring's 11 team members will be paired with a patient for the marathon event … * LAPLACE, La. (12/4/08)--Louisiana FCU President/CEO Rhonda Hotard has been named chair of the River Region Chamber of Commerce, effective in February 2009. Hotard has served on the board of the chamber since the organization's inception in 2004. She has been with the credit union for 14 years. She was comptroller at the credit union before being named president/CEO in 2000 …

Global economic crisis worries African CU regulators

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PRETORIA, South Africa (12/4/08)--The growing global economic crisis was one of many topics discussed by financial regulators gathered for the World Council of Credit Union’s (WOCCU) second annual African SACCO Regulators' Roundtable last week.
Click to view larger imageAfrican credit cooperative (SACCO) regulators gathered in Pretoria, South Africa, last week to discuss issues facing the continent's credit unions. (Photo provided by World Council of Credit Unions)
However, fallout from the global recession could have an impact on members of the continent's rapidly growing number of credit unions, known as savings and credit cooperatives, or SACCOs. “Africa is a dynamic environment for SACCOs today,” said Dave Grace, WOCCU's vice president of association services and roundtable coordinator and host. “This factor, combined with the current global economic slowdown, presents regulators with a series of challenges few regions have to face.” In Africa, 11,849 SACCOs serve 15.1 million members, up from 2006, when 8,237 SACCOs served 13.1 million members, according to WOCCU's 2007 Statistical Report released in June. The recession, coupled with other social challenges such as the HIV/AIDS pandemic, raises the stakes on the importance of SACCOs to their members and the SACCOs' continued ability to serve in the face of such crises, Grace said. Some 40 regulators from seven African nations, Canada and the U.S. gathered in Pretoria, South Africa, for the two-day roundtable sponsored by WOCCU, the Canadian Cooperative Association (CCA) and the National Treasury of The Republic of South Africa. Impact from the global recession could severely affect food prices, which already are rising, Grace said. Also, economic downturns in developed countries often result in declines in economic aid and reductions in charitable giving, all of which could present unforeseen challenges for Africa's SACCOs, he added. Regulatory and economic issues topped the agenda, which included opening comments by National Treasury Deputy Minister of Finance Nhlanhla Musa Nene, who read a letter from WOCCU President/CEO Pete Crear to finance ministers of the G-20 countries. The letter, submitted prior to the Nov. 15 G-20 meeting in Washington, D.C., asked for recognition of financial cooperatives’ lack of culpability in any regulatory steps taken to address the global economic crisis. Other agenda topics included reviewing lessons learned in legislative development, designing supervisory systems appropriate for financial cooperatives and building service capacity among the continent's SACCOs. Roundtable participants included representatives from Ghana, Kenya, Lesotho, Malawi, South Africa, Tanzania and Uganda, all of which have SACCO-specific legislation in development.