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California league State housing market stabilizing

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ONTARIO, Calif. (12/7/10)--California's housing market has begun to stabilize in some regions, and next year likely will see more real-estate market movement because unemployment likely will decline, according to California Credit Union League senior industry analyst Daniel Penrod. Penrod was featured in an article, "Calif. housing recovering, coast first," in the Orange County Register (Dec. 3 and 4). "Few places offer a better window into finances on Main Street than credit unions," the article began, adding it checked with Penrod "to see what these consumer-centric financial institutions see economically around the state." While credit unions have been willing and able to lend, demand for mortgages has been lean, with members either over-leveraged or concerned about future employment, Penrod noted. "Next year is likely to see more movement in the real estate market as employment will be more settled--and unemployment likely declining," Penrod told the publication. "In addition, we will know where the economy truly sits as stimulus will be a memory and the market will have a better sense of how organic the growth is and what we can expect going forward," he added. He noted credit union portfolios "remain strong" because they "didn't loosen their standards during the boom to drive loan demand, so the mortgages on their books tend to be stronger…" The fields of membership that fared better in the economy have helped credit unions remain strong. Those (memberships) that struggle more have had more impact on their credit union, he said, "but, as a whole, credit union members are more current on their obligations than their banking counterparts. In addition, credit unions have seen fewer strategic defaults." California credit unions remain well-capitalized at over 9% capital ratio, with significantly lower delinquency rates than banks have, and the outlook for the future "is solid," he said. For the entire article, use the link.

CUNA analyzes savings-rate strategies for INY TimesI

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WASHINGTON and NEW YORK (12/7/10)--The New York Times, in an article Friday on why earnings on savings may not be keeping up with inflation, turned to Credit Union National Association (CUNA) Chief Economist Bill Hampel to help explain why interest rates on depository institutions' savings accounts are barely above zero. The article notes that people are doing a better job of spending less than they earn but leftover money is going toward paying down debt, not borrowing more. Banks can't lend their deposits out in the quantity they used to, or aren't because of tightened credit policies. Instead, said Hampel, they buy Treasury bills, which don't pay as they once did because of the interest rate environment. Nor do they deliver the kinds of returns banks would get if they loaned money under normal conditions, he said. The resulting lower profits make it harder to raise the rates that savers earn, while lingering losses from loans pose their own pressures, the article said. The article points out that "credit union members putting money into certificates of deposit would love to earn more, and they often do get a bit more than they would from a nearby megabank. But members who are borrowers want to pay less for their loans, and they often do." "Borrowers are owners just as much as savers are," Hampel said. The article, "Why Savings Account Rates Are So Pathetic," also provides a bar graph comparing banks vs. credit unions and citing CUNA as its source. It shows how greater bank noninterest/fee income and loan losses factor into the equation. To read the full article, use the link.

CUNA Chairman to guest conduct symphony

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EL PASO, Texas (12/7/10)--Credit Union National Association (CUNA) Board Chairman Harriet May will lead a holiday melody as guest conductor during the El Paso Symphony Orchestra's holiday concert this weekend. The concert is a benefit for the El Paso Hispanic Chamber of Commerce Foundation and its program to provide financial scholarships to help area high school students further their education. May is president of $1.7 billion asset GECU, which is headquartered in El Paso. The event is Sunday at 2 p.m. in El Paso's Plaza Theatre. Henry Quintana of El Paso Electric will provide narration for the event.

Ormans tip to 20-somethings CUs are better

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SUNNYVALE, Calif. (12/7/10)--Personal finance expert Suze Orman put in a good word for credit unions in her “10 Money Tips For the 20 Something,” which recently appeared on Yahoo (Shine Nov. 30). Orman’s Tip No. 10 left little room for argument: “Credit unions are better than banks.” Orman advised readers that they can open a card at a credit union and transfer the balance from existing cards. She told Gen Yers to find a credit union card by logging Credit Card Connection, a Website dedicated to helping consumers find “fair and ethical” credit cards. Orman’s final piece of advice to 20-somethings: Be on time with payments.

League group recommends consolidation names leader

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ONTARIO, Calif. (12/7/10)--The Corporate Realignment Task Force (CRTF), which includes credit union leaders from eight Western states, has appointed former California Credit Union League CEO Dave Chatfield to assume its chairmanship. Jeff York, initial chairman of the CRTF and immediate past chairman of the California Credit Union League, will remain on the task force. States represented in the task force include California, Nevada, Idaho, Oregon, Arizona, Washington, Hawaii and Utah. “The work of this task force requires dedicated time and attention,” said York. “We are fortunate that Dave has agreed to serve as chairman, and we are extremely grateful for his personal dedication.” Chatfield agreed to serve as chairman on the condition that he would do so in a strictly voluntary capacity. In its ongoing assessment of corporate system options and solutions, the task force continues to encourage system consolidation and specifically supports merger of corporate credit union bridge entities. The task force issued the following recommendation: “Following an initial review of projected services, transaction volumes, costs, and financial results of individual corporate credit union organizations and that of merged entities, members of the Corporate Realignment Task Force strongly encourage merger of corporate credit union bridge organizations consistent with system safety and soundness principles. “Any merged entity must (a) assure that safeguards are in place to protect corporate system functions and natural person credit unions interests as well as (b) assure that the option of a competitively priced, credit union-owned corporate system remains. The Corporate Realignment Task Force pledges its support and influence to help achieve such consolidation in the corporate system.” “The task force has been unwavering in upholding its principles--a system solution that takes advantage of aggregation and that provides credit unions of all sizes and types with a universal solution,” Chatfield said.

Report Increased loyalty leads to higher loan volume

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MADISON, Wis.(12/7/10)--Credit unions that want to improve their lending volume should look to increasing their member loyalty levels, according to a report recently released by the Credit Union National Association (CUNA).
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CUNA’s Credit Union Member Satisfaction, Growth, and Loyalty benchmarking report shows that its member survey clients say 22% of their members are in the “truly loyal” classification. Those “truly loyal” members satisfy all three of the these requirements:
* They “definitely would” recommend their credit union to others; * They “definitely would” contact their credit union the next time they need a financial product or service; and * They choose the credit union as their primary financial institution.
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“Loyalty is important because members who are ‘truly loyal’--the highest loyalty level--to their credit union carry outstanding loan balances at their credit union that are nearly 70% higher than those found among less loyal members--$7,749 versus $4,613,” said Jon Haller, CUNA’s director of corporate and market research. Member loyalty tends to increase as asset size increases, with the highest loyalty levels found among credit unions with assets of $500 million or more (See Chart I). Credit unions that monitor loyalty using the SatMetrix Net Promoter Score, can use “promoter group” information in their benchmarking efforts (See Chart II). The report provides the first glimpse at CUNA’s 2010 member statistics data. Accompanying this information are CUNA’s first publicly-released member loyalty and satisfaction benchmarks to help credit unions monitor their performance. The report is designed to help each credit union discover its strengths and weaknesses. The report is available to credit unions for $149 (PDF). To order by phone, call 800-356-8010, press 3, and use the stock number as a reference.

Vermont CUs National Guard to counsel returning troops

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BURLINGTON, Vt. (12/7/10)--The Association of Vermont Credit Unions (AVCU) is partnering with the Vermont National Guard (VTNG) to provide financial counseling to service members returning from Afghanistan. With as many as 1,500 VTNG service members returning from Afghanistan, the VTNG estimates that as many as 30% will be unemployed, and an additional 30% will return to lesser paying jobs. Those figures do not account for other non-financial complications and challenges, (Newsline Express Dec. 3). “Many returning soldiers are expected to incur financial difficulties that likely require ongoing support, education and guidance,” AVCU President Joe Bergeron told credit union managers and CEOs in a letter last week. “We’re assisting the guard in building a network of participating financial institution branch offices throughout the state to serve as a local community resource of financial counseling services for these men and women coming home after serving our country.“ The Vermont National Guard Financial Institution Support Network comprises financial institution locations with staff available to teach basic personal financial skills and provide on-going counseling to service members and families. Bergeron noted that the program “is a great way to leverage the success of AVCU’s Certified CU Financial Counselor (CCUFC) Training program that began in 2009.” The program has since been implemented by the Michigan and Utah Leagues. In 2011, the National Credit Union Foundation’s REAL Solutions program plans to adapt Vermont’s CCUFC pilot for development at several partner leagues. Due to federal regulations, VTNG said it will not endorse or recommend a particular financial institution, branch, or counselor. It make the network list available and may, at the service member’s request, contact the institution and/or counselor chosen by the service member to facilitate a meeting. Bergeron asked credit unions to submit their counselor’s contact information by Friday so the association can compile a list of participating credit unions and counselors for inclusion in VTNG’s Financial Institution Support Network database. To register, use the link.

CU System briefs (12/06/2010)

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* HIGHTSTOWN, N.J. 12/7/10)--New Jersey credit union leaders
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visited Credit Union House in Washington, D.C., Thursday to present Dan Mica, former president/CEO of the Credit Union National Association for 14 years, a $5,000 check for Credit Union House. From left are: Gary Chizmadia, Credit Union of New Jersey; John Hendery, New Jersey Credit Union League (NJCUL); Tom O'Shea, Aspire FCU; Rina Pantano, N.J. Gateway FCU; Mica; Bill Kennedy, Jersey Shore FCU; Paul Gentile, NJCUL; Bob Steeves, Essex County Teachers FCU; Beth Degnan, Affinity FCU; and Harry Jacobson, Pinnacle FCU. Also present was Pete Bruno, Financial Resources FCU. While there, the group received a regulatory update from CUNA Senior Vice President and Deputy General Counsel Mary Dunn; an election update from CUNA Senior Vice President of Political Affairs Richard Gose; and a governmental update from CUNA Vice President of Legislative Affairs Ryan Donovan. (Photo provided by the New Jersey Credit Union League) … * SANTA ROSA, Calif. (12/7/10)--Redwood CU (RCU) has been named California Credit Union Advocate of the Year by the California Credit Union League. It was selected for exemplary dedication and leadership in the field of political advocacy, including ongoing efforts to educate lawmakers about credit union benefits, and engaging staff and their members in supporting political action to benefit and protect credit unions and members. "Educating lawmakers about the important roles credit unions play in providing consumers and businesses with affordable financial services is a vital role for us to play, so we can continue to serve our communities well," said Robin McKenzie, senior vice president who oversees RCU's government relations efforts … * YUMA, Ariz. (12/7/10)--A federal grand jury has indicted three Yuma, Ariz., residents-- including AEA FCU former Vice President of Business Services William "Bill" Liddle--on charges of conspiracy to commit fraudulent business loans against the credit union. Also charged in the 68-count indictment were Liddle's wife, Rhonda Liddle, and Yuma businessman Frank Ruiz. The indictment alleges that the Liddle conspired with Ruiz to approve suspicious business loans in exchange for nearly $1 million in kickbacks to the Liddles. All of Ruiz's business ventures funded by AEA FCU loans--amounting to more than $25 million have ended in default all three defendants have filed for personal bankruptcy, according to the U.S. Attorney's Office ( Dec. 2 and 3. The three have pleaded not guilty to the charges. The charges carry a maximum penalty of 30 years in prison, a fine of $1 million or both … * ORANGE, Texas (12/7/10)--Sandra H. Cooper, the president and treasurer of Orange County Employees FCU, Orange, Texas, has been indicted by a federal grand jury and charged with embezzling nearly $1.2 million in funds from the $2.6 million asset credit union. The jury returned indictments on 14 counts of embezzlement and seven counts of money laundering. Trial has been set for Jan. 24. If convicted, Cooper faces up to 30 years in prison for each embezzlement charge and up to 10 years in prison for money laundering charges ( Dec. 3) … * ROCKFORD, Ill. (12/7/10)--Rodger D. McCoy, 49, of Genoa, Ill., was sentenced to 17 months in prison Thursday for robbing the Genoa branch of Sycamore, Ill.-based Illinois Community CU on Jan. 8. McCoy pleaded guilty to breaking into the second story of the credit union and taking $69,506 in cash and a number of blank certified checks. He turned himself in to police after a surveillance video captured his face. Police recovered the checks and about $67,000 in cash. In addition to the prison term, he was sentenced to three years of parole after his release and ordered to pay $2,780 in restitution to the credit union and more than $4,514 to an insurance company to repair damage to the building during the break-in (Daily Chronicle Dec. 6) …

Ballots due Dec. 17 on contested CUNA board elections

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MADISON, Wis. (12/7/10)--Ballots for three contested Credit Union National Association board of director positions are due to an outside audit firm by the end of the day Dec. 17. Those up for election in District 2, Class B are:
* Robert Falk, president/CEO, Purdue Employees FCU, West Lafayette, Ind.; and * Stephen G. Behler, president/CEO, Kemba CU, West Chester, Ohio.
Running for election in District 4, Class A are:
* Patrick J. Drennen, CEO, 1st Gateway CU, Camanche, Iowa; * Dennis A. Fisher, president/CEO, First Security CU, Lincolnwood, Ill.; * Brian Smith-Vandergriff, board member, Catholic Family CU, Kansas City, Mo.; and * Patricia A. Wesenberg, governmental affairs liaison, Marshfield (Wis.) Medical Center CU.
Candidates in District 6, Class C race are:
* Brett Martinez, president/CEO, Redwood CU, Santa Rosa, Calif.; and * Scott Waite, senior vice president/chief financial officer, Patelco CU, San Francisco.

Cheney meets with Alabama Florida CUs

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TALLAHASSEE, Fla. and BIRMINGHAM, Ala. (12/7/10)--The League of Southeastern Credit Unions (LSCU) is conducting seven Town Hall meetings in December and January featuring Bill Cheney, CEO of the Credit Union National Association (CUNA).
The League of Southeastern Credit Unions is holding seven Town Hall meetings in December and January featuring Bill Cheney, CEO of the Credit Union National Association (CUNA). The meetings give credit unions a chance to meet CUNA’s new CEO and hear his vision for the future.
The meetings give credit unions a chance to meet CUNA’s new CEO, hear his vision for the future and spend time with the LSCU’s President Patrick La Pine, who will talk about the new league that comprises Alabama and Florida. Last week, town hall meetings were held in Alabama in Huntsville and Birmingham, and Florida in Tampa and Orlando. Cheney said his goal was to make CUNA’s leadership transition, which took place in July, as seamless as possible--given the issues the industry is dealing with now. The CUNA government affairs team had a good election for the industry by supporting 310 winning candidates of 358 House races and 27 of 31 Senate races. Cheney said that The Washington Post named CUNA the most bi-partisan organization in Washington. Cheney has strong ties to many lawmakers, but he explained that former CUNA CEO Dan Mica has been helping to introduce him to more key lawmakers. A recent meeting with new House Speaker John Boehner (R-Ohio) went well, Cheney said.
John Neusanger, CEO of Orlando (Fla.) FCU, asks Bill Cheney, CEO of the Credit Union National Association, a question at a town hall meeting in Orlando
Credit unions from Florida and Alabama listen as Bill Cheney, CEO of the Credit Union National Association, speaks in Tampa, Fla. (Photos provided by the League of Southeastern Credit Unions)
The Senate Banking Committee will conduct a hearing Thursday on the state of credit unions. The National Credit Union Administration (NCUA) Chairman Debbie Matz will be the only speaker, and CUNA is working with the regulator on messaging, Cheney said. He said he hopes she will point out that the industry, as a whole, is well-capitalized at 10%. Credit unions discussed the more aggressive supervision by the NCUA and the corresponding increase in documents of resolution and letters of understanding and agreement. CUNA has established a Supervisory Issues Working Group to create an Examination Bill of Rights for Credit Unions so credit unions can understand their rights and responsibilities, the rights and responsibilities of the examiner and the appropriate procedures if there is a dispute. Cheney said his vision for CUNA is broad. Credit unions must change the conversation in Washington about credit unions. When lawmakers are asked if they think cooperative financial institutions should exist, they all say yes, he added. With a broader view of the future, Cheney said, credit unions can see the incremental steps that CUNA is taking and how it is working. Cheney will speak to Florida credit unions in the Pensacola, Tallahassee and South Florida areas Jan. 13-14.