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CU System briefs (02/10/2014)

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  • HARRISBURG, Pa. (2/10/14)-- With widespread power outages after last week's winter storm in Pennsylvania, some Citadel FCU branches helped power up local folks . Offices in Chester, Delaware and Montgomery counties invited people to come in to have a cup of coffee and plug in their electronic devices in extra power strips ( Life is a Highway Feb. 7). Citadel FCU is a $1.8 billion-asset credit union in Exton, Pa.  ...
     
  • POUGHKEEPSIE, N.Y. (2/10/14)-- New York credit unions' excellence in the workplace was noted by the New York State Society for Human Resource Management and the Best Companies Group. Three credit unions--AmeriCU CU, $1.2 billion in assets, Rome; Empower FCU, $1.2 billion in assets, Syracuse; and Hudson Valley FCU, $3.8 billion in assets, Poughkeepsie--were honored in the large-employer category in the "Best Companies to Work for in New York State" for 2014. This is the fifth consecutive appearance on the list for Hudson Valley FCU. In the small- to medium-employer category, the Credit Union Association of New York, Albany, was among the recipients, along with SeaComm FCU, $460 million in assets, Massena; and Quorum FCU, $782 million in assets, Purchase. The list commends workplaces with practices that benefit the state's businesses, economy and workforce ...
     
  • TORRANCE, Calif. (2/10/14)--Effective April 1, Steve Brandon will succeed Jim Updike as CEO at Honda FCU , Torrance, Calif.  Brandon, who has been with the $625 million-asset credit union since 1991, most recently was chief operating officer. Updike will remain as an adviser until his retirement ... 
     
  • PEARL RIVER, N.Y. (2/10/14)-- Current Chief Financial Officer Paula Murray has been named president/CEO of Palisades FCU , Pearl River, N.Y. Murray has been with the $153 million-asset credit union for 25 years, 18 as CFO. She succeeds Mark Welshoff, who retired in October after more than 30 years at the credit union ...

CUs key to making cities good for consumer banking: NerdWallet

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SAN FRANCISCO (2/10/14)--Everyone wants to get the most bang from their buck and, according to NerdWallet , where you live makes difference on how big that bang is. If there are credit unions available in your city, it's likely to make the bang significantly bigger.

NerdWallet applied six factors--stability of the financial institutions, range of unique banking options, access to a local branch, interest on an average savings account, checking account fees, and percentage of people who have a financial account of some type and haven't recently relied on alternative financial services--to the 100 most-populated cities in the U.S.
 
Consensus by the personal finance website? Credit unions were a common theme in the top 10 for basic consumer banking--rates, fees and accessibility.
 
For the second year, No. 1 on the list is Cincinnati, Ohio, where consumers have access to more than 120 branch locations per 100,000 residents, and fee-free accounts are available at local financial institutions such as $66 million-asset Cintel CU.
 
With almost 80 financial institutions, No. 2 Pittsburgh has a wide range of options from a large national bank to a credit union such as Riverset CU, $119 million in assets.
 
Washington, D.C., jumped three spots because of its higher-than-average savings yield of 0.13%, and NerdWallet noted $50 million-asset DC Government Employees FCU.
 
Lower checking fees--$8.24 on average; credit unions such as WEA CU, $28 million in assets, with no monthly fees; and a population that is 85.5% fully banked put Madison, Wis., in fourth place.
 
Coming in at No. 5, Tulsa, Okla., has a stable environment--few bank or credit union closures--and favorable interest rates from local institutions.
 
In Miami, the access is easy and the choices are many--more than 70 unique financial institutions, including Financial FCU, $57 million in assets. The sixth-place metropolitan area also has a lower-than-average basic checking account fee of $7.88.
 
NerdWallet said the "consumer-friendly terms" of institutions such as $129 million-asset Alabama Central CU put Birmingham, Ala., at seventh place.

It you want to be fee-free, eighth-place Omaha is the place to be. The Nebraska city's average monthly checking fee is the lowest--just under $7--and Neighborhood Community FCU, $23 million in assets, is one that offers fee-free accounts.
 
Irvine, Calif., has a wide range of choices--28 unique financial institutions per 100,000 residents--making it the ninth-best consumer banking city.
 
Rounding out the top 10 is Rochester, N.Y., making its first appearance on NerdWallet 's annual list. Accessibility is Rochester's strong point--there are 72 branches per 100,000 residents--giving residents many points of contact for in-person services.

League testifies on Maine 'patent troll' bill

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PORTLAND, Maine (2/10/14)--The Maine Credit Union League testified before the state Senate last week in support of legislation that would limit patent trolling. Representing Maine credit unions was Quincy Hentzel, the league's director of governmental affairs.
 
L.D. 1660--An Act Regarding Bad Faith Assertions of Patent Infringement--is sponsored by Sen. Anne Haskell (D), who is assistant majority leader.
 
"In Maine alone, we have seen several cases where poorly researched and vague demand letters have been sent to credit union executives suggesting patent infringements and demanding a settlement or threatening to take legal action," Hentzel testified ( Weekly Update Feb. 7).
 
"These cases have dealt with patents related to topics such as Internet security technology, mobile transactions on smartphones, ATMs, and even wi-fi offered in credit union lobbies," Hentzel said. "This bill provides protections and relief for those legitimate business and organizations that are being shaken down by patent trolls and do not want to nor should they have to settle."
 
Representatives from the league met with Haskell to discuss patent trolling in December.
 
The Maine league's efforts coincide with the Credit Union National Association's continued advocacy efforts on the national level.
 
"Patent trolls present a dangerous reality to credit unions and their members, adding to the costs of providing financial services-and shouldn't be taken lightly," CUNA President Bill Cheney wrote in a Huffington Post column last week. "CUNA backs legislation that would curb abusive patent litigation by removing some of the financial incentives sought by firms that assert low-quality patents."
 
The Vermont Credit Union League submitted Cheney's piece to VTDigger.org , the Burlington Free Press , St. Albans Messenger and Vermont Business magazine ( Newslines Express Feb. 7).

Regulatory settlement reaches $14M in credits for Illinois CUs

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NAPERVILLE, Ill. (2/10/14)--A settlement negotiated with the state by the Illinois Credit Union League (ICUL) nine years ago has reached $14 million in regulatory fee credits for Illinois state-chartered credit unions.
 
This year state-chartered credit unions will receive a credit of $394,830 on their first-quarter regulatory fee invoices as part of the settlement.
 
Between an initial cash settlement of $6.2 million, the regulatory fee holidays or credits realized in six of the past 19 quarters totaling $2.7 million, and a rate reduction of $3.5 million in regulatory fees paid to the state's Department of Financial Institutions (DFI) since the settlement was reached, Illinois state-chartered credit unions to date have realized a cumulative benefit of roughly $14 million.
 
These regulatory fee credits continue because of legislation initiated by ICUL to implement the court-approved settlement of the regulatory fee case it filed against then-Gov. Rod Blagojevich in 2004. The settlement was signed into law by Gov. Patrick Quinn effective April 6, 2009.
 
The 2009 legislation implementing the settlement also accomplished two other goals, according to Stephen Olson, ICUL executive vice president and general counsel. First, it codified a rate reduction in regulatory fees on a going-forward basis commencing Jan. 1, 2009. On a going- forward basis, the rate reduction has resulted in $700,000-plus per year during the past three years, or $2.1 million back to Illinois state-chartered credit unions since the legislation became law.
 
Second, the 2009 legislation reduced the Credit Union Fund margin that triggers a credit back to Illinois state-chartered credit unions. Olson noted the Credit Union Fund is the dedicated fund into which regulatory fees are deposited to offset the ordinary administrative and operational expenses of the DFI Credit Union Section in supervising state-chartered credit unions. It is structured as an operating account, not a savings account.
 
To meet that objective, the legislation reduced the margin level to 25% from 50%. When the balance in the Credit Union Fund at the end of a state fiscal year exceeds 25% of the expenses incurred by the state in administering the Illinois Credit Union Act and related laws, the excess must be credited to the credit unions that paid the fees in the first instance.
 
As a result of the legislation, Illinois state-chartered credit unions previously received an aggregate margin credit of $1.051 million, which was slightly less than the total 2012 fourth-quarter billing for regulatory fees, and an aggregate credit of $1,256,893, which equaled a full fourth-quarter fee holiday for 2011, and a partial holiday on their 2012 first-quarter fees paid to the regulatory agency in April 2012.
 
Illinois state-chartered credit unions also received an aggregate credit of $1,452,256, which provided a total holiday on the fourth-quarter regulatory fee in 2010 as well as a partial holiday for the first quarter of 2011.

Wis. state CUs at pre-recession delinquency rates, DFI reports

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MADISON, Wisc. (2/10/14)--Wisconsin credit unions are showing signs that they've fully shaken off the 2008 financial collapse by at least one measure.
 
State-chartered credit unions saw average annual delinquency rates drop in 2013 to 1.10% from 1.36%, according to data published Friday by the Wisconsin Department of Financial Institutions (DFI).
 
Kim Santos, director of the Office of Credit Unions at the DFI, said that "the delinquent loan ratio is back to pre-Recession benchmark levels" and called it "a very encouraging trend."
 
Other positive trends revealed by Friday's data release showed that Wisconsin state-chartered increased revenue streams and net worth last year.
 
Lending and assets grew by 7.2% and 5% to $18.2 billion and $24.5 billion.
 
Net worth ratio and net income increased to 10.65% and 1.4%. The latter reached $228.8 million, with a 0.96% return on assets.
 
"Wisconsin credit unions had another solid year in 2013," DFI Secretary Peter Bildsten said. "The fact that credit unions grew their loan portfolios by $1.2 billion is a sign that the demand for consumer and business lending is picking up. That's good for Wisconsin credit unions and the state's economy."
 
Santos did note, however, that the number of state-chartered credit unions dropped to 171 from 187--something she attributed to mergers and liquidations.
 
"This is a trend we expect to continue in 2014," she said.
 
The increase in lending and the drop in the delinquency rate appears to mirror national trends. Last Wednesday, a Credit Union National Association survey showed that credit unions across the country expanded loan balances by 6.8%, while the 60-day delinquency ratio held steady at 1% ( News Now Feb. 5).

Consumer expert Chatzky: CUs stand on the side of the consumer

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DALLAS (2/10/14)--During an appearance for the Cornerstone Credit Union Foundation, personal finance expert Jean Chatzky commended credit unions and what they've done for Americans, especially during the economic downturn.
 
"You stand on the side of the consumer," she told attendees at Thursday's FOCUS Summit in Dallas. ( Leaguer Feb. 7). Chatzky, who told the group she is "a fan of credit unions," is director of education at SavvyMoney and financial editor for NBC's "Today" show.
 
When it comes to the relationships between consumers and their money, many are "a hot mess," the best-selling author said during the keynote speech.
 
Chatzky talked about "financially fragile" Americans. A significant percentage of women, African-Americans, Hispanics, elderly and the poorly educated don't have financial education, she said, adding that fewer women than men have an emergency savings fund, are comfortable with their debt load or regularly balance their checking account.
 
"Most people aren't money experts, and that is why they need you," she said. "You are in a service business, and you need to be able to anticipate people's needs."

Vt.'s Bergeron speaks on data security to state committee

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SOUTH BURLINGTON, Vt. (2/10/14)--Joe Bergeron, president of the Association of Vermont Credit Unions, Friday testified before the State Senate Economic Development, Housing and General Affairs Committee in support of legislation to strengthen merchant data security breach standards.   
 
Similar legislation was introduced in the Vermont House last year, at which time Bergeron also testified ( Newslines Express Feb. 7). 
 
In both instances, Bergeron testified that under federal and state laws credit unions already abide by the kinds of standards and notification requirements being proposed for other types of businesses.
 
In Florida, a bill was filed in the state House of Representatives' House Civil Justice Subcommittee that addresses similar data security issues. The bill would require corporations, and governmental entities that do business in Florida and collect personal information to provide notice to the Attorney General's office and any persons affected in the event of a breach. Notification would be required within 30 days of the breach's discovery unless a delay is ordered by a state or federal law enforcement agency investigating the breach.
 
The League of Southeastern Credit Unions' government advocacy team will meet with committee members to discuss the bill, which does not require merchants to cover costs of a loss in breaches where they did not appropriately protect the information.
 
On the Federal level, U.S. Sen. Patrick Leahy (D-Vt.), chair of the Senate Judiciary Committee, last week chaired a hearing on preventing data breaches and combating cybercrime.
 
"American consumers deserve to know when their private information has been compromised and what a business is doing in response to a cyber-attack" said Leahy during the hearing. "After an attack, time is of the essence for law enforcement seeking to catch the perpetrator, and also for consumers who want to protect themselves against further exposure."
 
In a letter to Leahy and Chuck Grassley (R-Iowa), the ranking member on the Senate Judiciary Committee, the Credit Union National Association called on Capitol Hill lawmakers to ensure consumers know where their information was breached. CUNA has also urged lawmakers to require that all participants in the payments system network are held to comparable levels of data security requirements, and that those responsible for a data breach be responsible for the costs of helping consumers.

GreenPath sponsors new incentives for youth saving challenge

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MADISON, Wis. (2/10/14)--GreenPath Debt Solutions is expanding its sponsorship of the National Youth Saving Challenge, held in conjunction with the Credit Union National Association's National Credit Union Youth Week.

The national non-profit, credit counseling organization is boosting incentives to help credit unions to reach a younger audience. GreenPath President/CEO Jane McNamara said, "We believe that we are not only setting each individual person up for a financially savvy life, but contributing to the prosperity of the nation's future."

The new enticements include increasing the quantity of cash prizes to participants and additional rewards for credit unions supporting the initiative. National Credit Union Youth Week is April 20-26.

"As part of the 2013 National Youth Saving Challenge, more than 117,000 young members deposited $25.2 million into their savings accounts--with 6,173 of those being new accounts," CUNA Youth Week Coordinator Janet Garkey said. "With the sponsorship from GreenPath, we're aiming to attract even more young savers."