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DFCU Financial dividend is largest in U.S. 21M

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DEARBORN, Mich. (12/12/11)--Michigan's largest credit union, DFCU Financial CU, has declared a special patronage dividend of $21 million in cash to be paid to eligible members on Jan. 4.

The $3.05 billion asset, Dearborn-based DFCU Financial says the dividend is the largest payout in the nation to credit union members. Nearly 7,000 members in Ann Arbor will receive the dividend, as well as 5,000 in Grand Rapids, 3,000 in Lansing, and 70,000 in Metro Detroit.

"People are still struggling in our area so instead of raising fees, we're putting more money in members' pockets," said Mark Shobe, president/CEO of the credit union. "The cash payout is our way to thank them for choosing DFCU Financial as their primary financial institution."

Payment is based on the member's total relationship with the credit union.  The greater the relationship, the larger the dividend.  Qualifying members will receive 0.5% dividend on their average loan and deposit balances, with each eligible member receiving at least $50.  The dividend includes all savings accounts and loan balances.

DFCU Financial says it is the only credit union in the nation to pay members an average $18 million to $20 million for the past six years--for a total of $110 million.

"The dividend can't be matched by banks," said Shobe. "As a credit union, we do our best to take care of members and provide them with outstanding benefits of membership like the special patronage dividend, discounted insurance programs and access to affordable health-care programs. We invest in our members, not shareholders."

Young and Free Maine reports double-digit growth

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PORTLAND, Maine (12/12/11)--The Young & Free Maine program reported double-digit growth from August through November, said the Maine Credit Union League.

In that time frame, credit unions reported a 40% growth in free4ME accounts, with nearly 600 new accounts added (Weekly Update Dec. 9). Young & Free Maine includes a financial headstart with an account called the free4ME Account, designed for 18- to-25 year-olds. The Maine program has proven successful in connecting with Gen Y in other regions throughout North America, the league said (News Now June 14).

Strong statewide advertising support through new TV and radio commercials, which specifically highlight the program, helped bolster its growth, the league said.

Other high­lights of the impact of the Young & Free Maine program are:

  • 13.4% member­ship growth in 18 to 25 year-old members since the Young & Free Maine program began in April;
  • The average age of credit union members at participating credit unions decreased a full year during that period, to 45 from age 46;
  • 13% of free4ME accounts have loans with an average loan balance of $6,649; and
  • The average age of free4ME account holders is 19.
October and November showed more positive results, with 60% of free4ME account openings being new relationships, a 20% increase over August and September.

With six months remaining on the first year of the Young & Free Maine Program, the Maine league said it continues to get closer to its goal of funding a second year of Young & Free.

Calif. league on supermarket breach Not necessary to close accounts

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SAN FRANCISCO (12/12/11)--A San Francisco-area Lucky supermarket stores card-reader scam that led to identity theft for some store employees and customers has others worried about their debit or credit card accounts. However, financial institutions are aware of the situation and those affected do not need to close their financial accounts, said the California Credit Union League.

The store chain announced Dec. 5 that thieves placed card skimmers into the readers of self-checkout terminals at 23 stores, capturing personal information from 23 customers and 80 employees. Money was stolen from some victims' checking accounts. Store officials had advised anyone who used the terminals in recent months to immediately close their accounts and seek advice from their financial institutions.

However, consumers "should not be inconvenienced by opening a new account, nor is that advisable," said Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues. "Financial institutions have been notified about cards that could have been compromised, so they can now monitor accounts for possible fraud and provide that information to consumers."

If needed, consumers can get a new credit card or debit card account number over the phone or online, rather than having to go to the trouble of visiting a financial institution, the league said.

The company first learned of the breach around Nov. 11 and sent out a consumer advisory on Nov. 23, according to a company spokesperson. It has no estimate on the number of victims and said reports keep coming in.

"Thousands more could be at risk," Dykstra said.

SaveMart, the parent company of Lucky, said it checked all its stores and its card readers now are safe. It operates 233 stores in Northern California and Northern Nevada under the Save Mart, S-Mart Foods, Lucky, and FoodMaxx banners.

"It is important for the sake of the consumer that merchants quickly respond when these types of breaches occur," Dykstra said. "It is just as imperative that merchants be more responsible for the effect these types of breaches can have on financial institutions that absorb the costs of re-establishing accounts and reissuing cards."

A card breach at a chain supermarket in 2008 resulted in a major compromise of a large number of customers' accounts, with significant losses to consumers and credit unions.

In the Hannaford Bros. supermarket credit and debit card breach, which occurred between Dec. 7, 2007 and March 10, 2008, it is estimated that the card numbers of more than four million people were stolen in the security breach. During the breach, cyber criminals hacked into Hannaford's system and accessed card numbers used at 165 Hannaford supermarkets in the Northeast and 106 Sweetbay stories in Florida (News Now Nov. 21).

At least 1,800 numbers were used for unauthorized fraud. Hannaford discovered the breach in February 2008 and made it public March 17, 2008. Many credit unions were among the financial institutions that reissued new cards to consumers.

IBizKidI films at two New York CUs

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MADISON, Wis. (12/12/11)--Biz Kid$, the Emmy award-winning and credit union-funded public televison series that teaches kids about money management and entrepreneurship, recently filmed a segment on understanding a line of credit and where they are available, at Actors FCU and Montauk CU in New York City.

A still shot from the upcoming BizKid$ TV show features Steve Sobotta, director of marketing at Actors FCU, New York, talking with Susie Leavitt and Katie Shea, owners of City Slips, about a line of credit for their business. (Photo provided by the National Credit Union Foundation)
The segment was filmed for an episode from season five. It featured Susie Levitt and Katie Shea, young entrepreneurs and owners of City Slips, a company that sells "ballet slipper" style shoes that fold up and fit in a small pack that then expands to a tote that holds the heels. As they grow their business, Levitt and Shea are looking to better control their cash flow with a business line of credit.

In the episode, Levitt and Shea visited Actors FCU and Montauk CU to compare what each offers with a line of credit. They compared interest rates, repayment terms, and whether minimum balances were required.

Aside from learning that a line of credit is just one of many services a credit union can offer, viewers also learned that not only does a line of credit help with cash flow, but it also helps a business establish good credit, which can help with future loans.

Fundraising is underway to garner full funding for the upcoming fifth season, which also will put Biz Kid$ into syndication. The National Credit Union Foundation oversees the fundraising, outreach and administrative responsibilities of Biz Kid$.

The program, which premiered in January 2008, has aired on more than 340 public television stations in all 50 states with a potential viewership reach of 271 million people. Biz Kid$ has the highest recorded carriage of any children's program released by American Public Television, with a viewing audience of more than 1.2 million per episode. Its website receives more than 100,000 unique visitors a month from about 140 countries.

During the past six years, more than 260 memerbs of the credit union system and affiliated organizations have raised more than $10.4 million to support the show's production, website and curriculum.

For more information, use the link.

FSCC shareholders OK combining with CO-OP Fin Services

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ONTARIO, Calif. (12/12/11)--Financial Service Centers Cooperative Inc.'s shareholders have unanimously approved combining the company's operations with CO-OP Financial Services.

The transaction plan was originally announced in September and  is expected to close in early 2012, unifying credit union shared-branch services of the two organizations.

"This is a milestone day in our work to blend the strengths of both companies, creating a more tightly integrated shared branching network," said Stan Hollen, CO-OP president/CEO. "The combination of services will result in efficiencies and economy of scale in branding, technology and administrative costs that will benefit all shared branching participants."

Between the two companies, more than 1,700 credit unions nationwide participate in shared branching, making more than 4,400 physical branch locations available to their members, plus 2,200 Vcom kiosk locations at 7-Eleven stores.

Dischler replaces retiring Forsythe on Corp. Central board

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MUSKEGO, Wis. (12/12/11)--Gerald Forsythe has retired from his position as chairman of the board of the Corporate Central CU, and Sally Dischler, president/CEO of Heartland CU, Madison, Wis. will  fill the vacant position, announced the Muskego, Wis.-based  corporate Thursday.

Dischler  has been with Heartland CU for 34 years. She became executive vice president in 1992 and president/CEO in 2001. She is current chairman of the CUES Wisconsin Council and is a member of the Wisconsin Credit Union League's Audit Committee. 

Dischler previously served as president of the Madison Chapter of Credit Unions, as board director of Badger Shared Service Centers, and on various league committees.

Paying down debt top New Years resolution--Georgia CUs poll

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DULUTH, Ga. (12/12/11)--About 49% of Georgia respondents to a recent poll from Georgia Credit Union Affiliates (GCUA) say their top financial goal for the next 12 months is to pay down debt. This mirrors nationwide sentiment among consumers.

In an annual survey by TD Ameritrade Holding Corp., 47% of respondents said they will resolve to reduce debt such as credit cards, mortgage or education loan.

The two most common resolutions among nationwide respondents were "have more fun" (66%), and "relax and reduce stress" (65%).

Among consumers with other financially related New Year's resolutions for 2012:

  • 51% plan to reduce spending;
  • 51% want to save for a financial emergency, such as a job loss or loss of a spouse; and
  • 30% plan to start or build up their retirement savings (401(k) or individual retirement account).
Just two years ago the TD Ameritrade survey found the opposite to be true. "Save more money" was the top resolution, followed by "spend more time with family" and "relax/reduce stress," respectively.

Cindy Owens, president of Piedmont Hospital FCU, Atlanta, said she believes more consumers are taking the initiative with their financial problems. "They are setting goals to help them get back on track," Owens told GCUA. "People who had a credit card with an astronomical rate and built up debt are coming to us for help in consolidating their debt and paying it down."

Piedmont Hospital FCU members look to reduce the amount they spend on financial services so they can focus on getting out of debt, Owens said. She added the best way for people to motivate themselves to stick to their financial resolutions is to keep the benefits of reaching the goal in view.

"When people come to us, we try to show them that there is some benefit to them in reaching their goal," Owens said. "If they have a goal of improving their credit, we help them see the benefit of each small step along the way. When they take out a small $500 loan and repay it on time, then their credit score improves. With a better credit score, they will be able to qualify for a low-interest car loan. Each step builds on the one before it."

New iYouTubei video promotes CU difference

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MADISON, Wis. (12/12/11)--A new, independently produced YouTube video provides a simple, understandable description of the difference between credit unions and banks.

The video has begun making the rounds virally.  In the 43-second animated video, a child narrator asks, "What is the difference between a credit union and a bank?

"A bank is in business to make a profit," the narrator explains. "It is owned by shareholders. They use your money to make more money. Then they charge you banking fees, so they can make a profit for their shareholders.

"A credit union, however, is owned by you, the account holder," the video continues. "It's a safe, insured place to bank, with no unnecessary fees. You share in any earnings and the money stays in your local community."

To see the video, use the link.

CU System briefs (12/09/2011)

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  • ALBANY, N.Y. (12/12/11)--CUC Mortgage Corp. announced Friday the appointment of Edward Kovalefsky as its chief operating officer. Kovalefsky will report to William J. Mellin, president/chairman of CUC Mortgage and president/CEO of the Credit Union Association of New York (CUANY). Kovalefsky joined the association in 1993, first as chief financial officer. For the past 10 years, he has overseen  CUANY's for-profit subsidiaries and managed its internal administrative and support services. He will succeed Richard Maxstadt, who is retiring.  Before joining CUANY, Kovalefsky served as vice president and controller at a publicly traded insurance company and spent 12 years with a regional public accounting firm, where he became vice president and shareholder …