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CU's Student Branch Wins Progress Minnesota Award

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ST. PAUL, Minn. (2/13/13)--Hometown CU has been recognized with Finance and Commerce's Progress Minnesota award for opening the state's first student-run, in-school credit union branch.

HomeTown CU hosted a grand opening event for its in-school branch office in January 2012. The credit union received the Finance & Commerce Progress Minnesota award for opening the state's first student-run, in-school credit union branch. (Photo provided by the Minnesota Credit Union Network)
The Progress Minnesota program recognizes individuals, entrepreneurs, businesses and organizations driving economic growth and development in innovative ways. Of this year's 27 honorees, the Owatonna, Minn. credit union is the only financial institution to make the list.

HomeTown CU opened the student-run branch in the fall of 2011 after working for five years with teachers, the school board and school administrators of Owatonna High School.

"We really pushed the financial literacy component when we proposed this idea (for the student credit union branch)," said Marian Murphy, vice president of business growth at the credit union. "Financial education is not a requirement in Minnesota schools, but just having a student credit union branch can help spark students' interest in financial education."

The primary objective of the branch is to promote financial literacy, Murphy said. Seven students work in the branch. The office acts as a resource for the high school's business and marketing classes, and extracurricular business clubs. The credit union included students in focus groups and product development and marketing campaigns.

HomeTown's long-term goal is to have students develop and implement their own business plan for the branch.

CU System Briefs (02/13/2013)

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  • ENTERPRISE, Kan. (2/13/13)--Pamela Emig, 48, of Solomon, Kan., was sentenced Monday to three years in prison for embezzling $817,000 from Enterprise (Kan.) CU, where she was manager. Enterprise was released from conservatorship on Oct. 12, and is now open for business. Emig also was ordered to pay $817,000 in restitution. She pleaded guilty to one count of embezzlement. From 2005 to 2011 she allegedly kited checks between accounts at the credit union to cover up the embezzlements (Salina Journal Feb. 12) …
  • POCATELLO, Idaho (2/13/13)--Virginia Mecham, 40, of Idaho Falls, pleaded guilty Friday in a federal court in Pocatello, Idaho, to embezzling $23,000 from accounts at Idaho Falls Westmark CU, where she was a teller. The theft was discovered after members contacted the credit union to report unauthorized withdrawals from their accounts, all of which were handled by Mecham. She agreed to pay restitution of $23,625, and faces up to 30 years in prison, a maximum fine of $1 million and up to three years of supervised release. Sentencing has been set for April 30 (Idaho State Journal Feb. 12) …
  • SPOKANE, Wash. (2/13/13)--Spokane Teachers CU (STCU) announced it plans to "reclaim an architectural treasure" by opening a branch in the historic Hutton Building this year. The branch will be located on the building's main floor, and the building will house STCU's commercial lending staff. The seven-story building, valued at $3.5 million, was added to the National Register of Historic Places in 1983 (The Spokesman Review Feb. 8). It was built by Levi and May Hutton who became millionaires when the Hercules Mine struck silver in 1901. They lived in the building's penthouse and hosted lavish parties. The building later was the site of Hutton Settlement, providing a home for children in need of long-term care. The previous owner, Selkirk Trading, filed for Chapter 11 bankruptcy last year. STCU has held the loan for the past 10 years …
  • BIRMINGHAM, Ala., and TALLAHASSEE, Tenn. (2/13/13)--LEVERAGE, the League of Southeastern Credit Unions Service Corp., has hired Kevin Lytle as its new vice president, innovation and business development. He has more than 22 years' experience in marketing, business development, product management and sales within the credit union industry. He will oversee LEVERAGE's product development, marketing and sales team. Lytle previously was vice president, marketing and product management at WesCorp FCU for seven years. There his duties included all marketing strategies, developing new products to reduce operating costs for credit unions and public relations. He was with the Credit Union National Association for 14 years, first with CUNA Service Corp. then as vice president of national marketing at CUNA. He began his duties Monday and is working out of the Tallahassee office …

Two US Lawmakers Express Support Of CU Tax Exemption At Idaho GAC

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BOISE, Idaho (2/13/13)--Two U.S. lawmakers--one of them the ranking Republican member of the Senate Banking Committee--expressed support of credit unions' tax exemption  last week during the Idaho Credit Union League's Governmental Affairs Conference.

Eighty-seven Idaho credit union professionals and volunteers gathered in Boise to meet with their state legislators about credit union issues and to learn more about the legislative process.

U.S. Sen. Mike Crapo (R-Idaho) and U.S. Rep. Mike Simpson (R-2) said they support maintaining the tax exemption for credit unions, Will Hall, Idaho league compliance and governmental affairs specialist, told News Now.

Crapo, the ranking Republican member of the Senate Banking Committee, urged credit unions to watch Congress regarding upcoming legislation and to be an active participant in the process. Simpson said Congress needs to make sure that all tax exemptions make sense for the 21st century and those that do should remain--that list should include the credit union tax exemption, Hall added.    

Defending the credit union tax exemption is the Credit Union National Association's No. 1 priority this year, CUNA President/CEO Bill Cheney has said. Several credit union leagues such as those in Ohio and Oregon are monitoring tax reform proposals in their states.

The day-long event also included call-in visits with U.S. Sen. Jim Risch (R-Idaho), and U.S Rep. Raul Labrador's (R-1) Chief of Staff Jason Bohrer.

All the federal delegates at the league GAC said that bringing down the federal budget deficit is of primary importance, Hall said.

Risch and Bohrer said reducing the federal budget deficit should be the primary focus for everyone. Bohrer added that everything is on the table to get a handle on the federal budget deficit and to get it down, Hall reported. 

Visits from state legislators, including Sen. Brent Hill (R-34), President Pro Tem, Rexburg; Sen. Elliot Werk (D-17), Boise; and Rep. John Rusche (D-6), Lewiston, gave credit union attendees a look at current issues in the state legislature this session from both sides of the aisle. Rusche also drew attention to the decline of household income and its long-term negative impact on the state. The state legislators did not discuss national credit union issues, Hall told News Now.

Political commentator Dr. Jim Weatherby gave an overview of the 2013 legislative session, and Republican Party Chairman Joshua Whitworth spoke on attracting new members to the party and staying relevant.

A visit from long-time friend of credit unions, Gov. C.L. "Butch" Otter, was the highlight of the event as he talked of his personal relationship with credit unions in Idaho and their community of interest. News Now covered his comments Feb. 12.

"I've always appreciated that credit unions have a local focus, and they're attuned to the needs of their members," Otter said. "It's my goal to advocate for Idaho citizens in the same way. That's why it's so important for Idaho to have a voice in designing and implementing a state-based health insurance exchange" (News Now Feb. 12).

Gavin Gee, director of the Idaho Department of Finance, told attendees that Idaho credit unions are among the nation's healthiest in terms of asset growth and new members.

State Of Bank/CU Marketing: Budgets , ROIs Top Challenges

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MADISON, Wis. (2/13/13)--Insufficient budgets and/or manpower and difficulty in measuring performance for a return on investments (ROI) are the two major challenges in 2013 facing credit union and bank marketers, reports a new survey. Top priorities for marketing staff is loan growth and deepening relationships or improving share of wallet.

The Financial Brand, a website that covers retail banking marketing topics, conducted the survey with 300 banks and credit unions. Half the survey respondents were credit unions of all sizes.

Of those surveyed,  33.8% cited budget challenges and 29.9% cited ROI challenges. It was the second year that budget was seen as a major challenge by at least one-third of the respondents, said the website.

Inadequate marketing customer information files (MCIF)/customer relationship management (CRM) was the third largest challenge. "Clearly, the financial industry is in no position to capitalize on the promise of "big data" this year," said The Financial Brand's report. "Banks and credit unions have a long way to go before they'll be in any position to wield terabyte-sized data sets."

For 2013, about 41.89% of financial marketers surveyed said their marketing budget would stay about the same as 2012, with 20.2% saying their budget would increase by up to 10% and another 11.1% indicating it would decrease by less than 10%.

The group was surveyed about marketing priorities for the year. About 36.7% of the respondents cited loan growth as the top priority while nearly 60% placed loan growth in the top three priorities. Second top priority was cross-sell, deepen relationships, improve share-of-wallet, or increase persons per household (about 65.1% ranked this priority in the top three).  Customer/member acquisition rated third, with 32.8% ranking it among their top three priorities.

Although financial marketers ranked loan growth as their top priority, loans weren't the most important product or service they would promote. Instead, mobile banking solutions took the top most important products/services spot, with 63.3% saying it was important. Auto loans, with 58.5%, and mortgage loans, with 57.6%, were the second and third most important products/services to promote.

CU Better Choice Saves Consumers $23M-plus

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HARRISBURG, Pa. (2/13/13)--Since launching in 2006, nearly 65,000 Credit Union Better Choice loans have been issued to Pennsylvania credit union members for short-term cash needs, saving borrowers more than $23 million over using a traditional payday lending product, said the Pennsylvania Credit Union Association.

The continued growth in the program, the credit union alternative to payday loans, indicates that consumers still are in need of small-dollar loans, PCUA said.

The 72 participating credit unions statewide have issued 64,930 loans totaling more than $32 million since the program's inception.

In the Credit Union Better Choice loan, in which credit unions offer borrowers a 90-day loan with a $500 limit. The loans have been used for Christmas gifts, taxes, car repairs, heating fuel and funeral expenses. The program was developed through a collaboration of PCUA, the Pennsylvania Treasury Department, and the Pennsylvania Department of Banking and Securities.

Roughly 206 locations offer the loans statewide. From July 1 to Dec. 31, 2012, about 6,044 loans totaling $3.9 million were issued. Borrowers also placed more than $385,000 into savings accounts during the period.

A typical $500 payday loan costs consumers $15 for every $100 borrowed for two weeks, or roughly $450 over 90 days. A $500 Credit Union Better Choice loan costs $42.50 for the same 90 days and at the end of the loan term, consumers have $50 in a savings account to save. Also, the program provides financial education to consumers to help them make better informed financial decisions.

Pennsylvania consumers saved an average of 80 cents in loan fees and costs for every dollar borrowed.

Ill Governor Signs League-backed Fast-track Foreclosure Act

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NAPERVILLE, Ill. (2/13/13)--Illinois Gov. Pat Quinn Friday signed into law the Illinois Credit Union League-backed Senate Bill 16, a measure that establishes a "fast track" expedited foreclosure process to help address the issue of abandoned residential properties in the state.

Click to view larger image Surrounded by representatives of the Illinois Credit Union League, state lawmakers, housing advocates, county officials and other community stakeholders, Illinois Gov. Pat Quinn Friday signed into law a league-backed landmark "fast-track" expedited foreclosure process to address the issue of abandoned residential properties in Illinois. The league played a key role in advancing the legislation. (Photo provided by the Illinois Credit Union League)
The league, after two years of negotiations, played a key role in advancing the measure. SB 16 cleared both chambers during the second week of the "veto" session of the Illinois General Assembly (IGA). It passed the House on Dec. 4 by 87 to 17 and the Senate on Dec. 5, 47-0.

"Throughout the two-year process, the excellent reputation and respect credit unions have earned with legislators were very apparent," said Stephen R. Olson, ICUL executive vice president and general counsel. "The active participation and support of Illinois credit unions played a key part in helping to pass this critical measure," he added.

"This law will help restore neighborhoods and property values while fighting crime and blight by decreasing the time a home sits empty and getting it back on the market quickly," Quinn said when he signed what is now Public Act 97-1164.. "It also allows us to make major investments to keep families in their homes by preventing foreclosures in the first place."

The new law:

  • Establishes a "fast-track" expedited foreclosure process. The league worked with sponsors to fine-tune the mortgage foreclosure process to make it more efficient and expedient and to avoid provisions that penalize lenders, and ultimately borrowers, through increased fines and penalties. Lenders can shorten the process for abandoned properties by about 18 months, obtaining the title to the properties and assuming responsibility to maintain and secure the properties more quickly. That means the properties are in better condition and more saleable when the lender obtains the title.
  • Provides funding for remediation of abandoned property and pre-foreclosure counseling. The law includes an additional residential foreclosure filing fee to support local governments and struggling homeowners. Institutions that filed 175 or more foreclosures during the preceding calendar year will pay $500, those filing 50-174 foreclosures will pay $250, and those filing fewer than 50 foreclosures will pay $50.  Most credit unions and community banks will pay $50, said the league. The fees will generate about $41 million a year, with $28 million earmarked for abandoned property cleanup and the remainder for housing counseling for homeowners.
  • Provides for bankruptcy relief. SB16's language clarifies that a portion of the Conveyances Act is permissive, not mandatory, so it cannot be used to affect the validity or priority of a properly recorded mortgage by a trustee in bankruptcy. "This provides a tremendous benefit to every Illinois credit unions by protecting against the avoidance of mortgage liens in bankruptcy proceedings," said the league.
During discussions of the foreclosure problem various measures in the Illinois General Assembly the past two years, lawmakers widely acknowledged that credit unions were not the cause of the housing crisis and said SB 16 represents a fairly balanced compromise that will not only benefit credit unions but citizens of the state.

Newtek, 10 CU CEOs Give Small Biz Advice On Nerdwallet

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MADISON, Wis. (2/13/13)--Chief executive officers from 10 credit unions and CUNA Strategic Services provider Newtek: The Small Business Authority are among those helping with advice for small businesses in a new series on business lending.

The series features interviews with 31 CEOs that do business with small businesses or offer business loans. The Credit Union National Association and the state leagues provided NerdWallet with credit union contacts for the articles.

Member business lending (MBL) is one of CUNA's top advocacy issues this year, with CUNA, the state leagues, and credit unions urging Congress to raise credit unions' 12.25%-of-assets MBL cap to 27.5% so credit unions can work with more small businesses.

In the lending predictions article, credit unions addressed the MBL cap. The cap "limits our ability to grow further in this area…Otherwise, there will continue to be less competition in the small business lending space, which might lead to higher rates and fees," said Christina Lethlean, president/CEO of Gesa CU, Richland, Wash.

CoastHills FCU, in Lompoc, Calif., will hit its MBL cap in 18-24 months, said Jeff York, CEO. "This is unfortunate considering the local pull-back of community banks and big banks in the small business lending arena." He noted that "Congress is unwilling to do what they promised on the campaign trail--provide small businesses with the tools they need to prosper. Increasing or removing the business lending cap will do just that--give small business access to billions of dollars in capital, help small businesses create tens of thousands of jobs and all this without costing taxpayers a dime."

Jim Minge, president/CEO of Texas Trust CU, Mansfield, Texas, said the lending cap increase "would make an additional $13 billion available for lending to small businesses. This investment would certainly result in new jobs and economic growth."

Other credit union and Newtek executives interviewed included:

  • Mark Antonioli, Meriwest CU, San Jose, Calif.;
  • Brad Canfield, KeyPoint CU, Santa Clara,Calif.;
  • Gary Grinnell, Corning (N.Y.)  FCU;
  • Brett Martinez, Redwood CU, Santa Rosa, Calif.:
  • Stephen O'Connell, North Island CU, San Diego, Calif.;
  • Barry Sloane, Newtek Business Services, New York, N.Y.;
  • Steven Stapp, San Francisco (Calif.) FCU; and
  • Patsy Van Ouwerkerk, Travis CU, Vacaville, Calif.
The series includes four "sidebar" articles featuring CEOs answers about: Financing Advice (a roadmap of where to go, when, what to consider), Loan Advice (how business owners can make themselves better loan candidates), General Business Advice, and Lending Predictions.

To view the articles, use the links.

News Report Features West Massachusetts CUs' Growth

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HADLEY, Mass. (2/13/13)--The growth of several credit unions in Western Massachusetts was featured Monday in a state news report.

The article mentioned UMassFive College FCU in Hadley, Freedom CU in Springfield, Holyoke (Mass.) CU, and Polish National CU, Chicopee ( Feb. 11).

Credit unions in the state had good growth last year in membership, deposits and loans based on data available through the third quarter 2012, Rob Kimmett, senior vice president of public relations and marketing for the Massachusetts Credit Union League, told the publication.

With more than $30.7 billion in assets, credit union assets were up 4.4% from third quarter 2011, Kimmett said. Loans rose 5% in that period to more than $20.5 billion, while membership in credit unions statewide increased 2.2% to more than 2.5 million members--37% of Massachusetts' population, Kimmett added.

To read the article, use the link.

Filene Report: Members' Happiness, Money Skills Related

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MADISON, Wis. (2/13/13)--Credit union members with strong financial skills are more likely to be happy and experience less stress, according to a new report from the Filene Research Institute. This presents an opportunity for credit unions, which can improve members' financial capability and, by extension, their overall well-being.

The report, Mind over Money: Measuring Health and Happiness among Credit Union Members, explores the interrelationships between financial capability and psychological well-being through analysis of 1,600 U.S. credit union respondents to an online survey.

The report also describes the importance of self-efficacy and individuals' belief in the ability to take care of their finances. Such belief engenders the confidence required to effectively control personal finances.

Findings in the report include:

  • Gender splits are real. The data suggest that female members generally believe less in their own abilities than males and that they also are more stressed and unhappier than males. When it comes to managing money, the data also suggest that women are not as good as men at keeping track of their finances. Credit unions should consider segmented outreach and tools for women.
  • Middle-aged and younger adults need more help. Adult members aged 44 years or under have significantly lower financial capability and psychological well-being than those aged 45 years or older, including those in, or nearing, retirement. Retirees, on the other hand, are the most capable group of the sample.
  • Using multiple institutions is linked to higher capability. Those who reported using another institution in addition to their credit union were more likely to report better overall financial and psychological health, affirming a long-standing tradition of credit unions referring members for products and services they don't offer.
To download the report, use the link.

NJ Law Bans Card Solicitations On Public Campuses

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TRENTON, N.J. (2/13/13)--New Jersey Gov. Chris Christie Thursday signed a law banning credit card companies from soliciting students on public college campuses in the state.

The legislation was sponsored by State Sen. Kevin O'Toole (R-40). It forbids a New Jersey public institution of higher education from entering into an agreement, or permitting its agents or a student organization from entering into any agreement, for direct merchandising of credit cards in person or by displays to students ( Feb. 7).

The New Jersey Credit Union League said it did not take a position on the bill. The law is designed to prohibit New Jersey public colleges and universities, and their sanctioned organizations from entering into agreements with credit card issuers that allow an issuer to solicit students via direct mail, exhibits and take-one stands, Chris Abeel, league director of government affairs, told News Now.

"In short, the public institution cannot profit from or assist in a credit card issuer's solicitation of its students," Abeel added. "The bill sponsors noted that in 2010, Penn State [University] made $4.2 million from such agreements."

The law affects credit unions the same way it would banks or other credit card issuers. None will be able to enter into credit card solicitation arrangements with New Jersey public colleges and universities, Abeel explained.   

The law does not prevent a college or university credit union, such as Rutgers FCU, from offering credit cards to its members, even those who are currently students, Abeel said.  

"The credit union is an instrumentality of either the state or federal government, not a college or university organization or agent," he explained. "There was no testimony--nor was it the sponsors' intention--to prevent student access to responsible financial service providers such as credit unions."