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State regulator sets teleconference about proposed fee hike

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FEDERAL WAY, Wash. (2/15/08)--In response to concerns raised by the Washington Credit Union League, the state Division of Credit Unions (DCU) will host a teleconference Feb. 29 about its proposed 5.38% credit union fee increase for fiscal year 2009. The teleconference, which will start at 10 a.m. PST, will provide data and the rationale behind the increase. The league had written a comment letter Jan. 11 asking for a full business case analysis to explain the proposed increase. The league's comment letter, written by Stacy Augustine, senior vice president and general counsel, said it supported earlier fee increases in 1995 and 2001, but it raised three concerns about the new increase proposal:
* It asked DCU to make a business case to all state-chartered credit unions, answering these questions: Why haven't organic increases associated with asset-based assessment kept pace, since more state-chartered credit unions exist today than when the formula was created? What has the division done to reduce expenses? What types of increased costs are out of DCU's control? How does its efficiency metrics compare with other credit union regulators? How will DCU improve its efficiency? * Past fees-increase support centered the desire to increase examiner quality and retention. The league asked for more detail on what DCU has done to increase examiner quality since the last increase and whether it succeeded in improving quality or reducing industry concerns. It also asked how DCU would address examiner quality in the future. * The league said it continues to be concerned about having dedicated, nonappropriated funds swept into the state's general fund during times of economic stress. Although the league supported the merging of separate divisions of credit unions, banks, securities and consumer services funds into one Department of Financial Institution Fund, it is concerned about sweeps in the future.
"Providing this information to Washington's credit union community may give credit unions more confidence that the division's fee increase is necessary and will be put to good use," said Augustine. The league's letter can be found by going to Department of Financial Institutions' website, clicking on Rulemaking Activity, then Updated Fee Regulations Rulemaking, then Comments. Due to the state's initiative 960, now in effect, the state legislature must vote on all tax and fee increases for state agencies, says DCU in a bulletin issued Feb. 7. The new process means DCU and the Washington State Department of Financial Institutions (DFI) must seek legislative approval in a bill or budget item, for even routine or minor fee increases, DCU said. A Power Point for the teleconference will be available on DCU's website before the teleconference.

How will tax rebate impact lenders

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CHICAGO, Ill. (2/15/08)--The tax rebates included in Congress' economic stimulus package will impact consumers' spending and saving, but it will also affect the economy and credit lenders, according to a new study. In the survey commissioned by credit bureau TransUnion, 42% of consumers surveyed said they would pay down debt if they received a tax rebate. Another 20% would save the money. But 21% would spend it, with 16% of those saying would buy something they considered necessary and 5% indicating they would splurge. How does that stack up to consumers' behavior during with past stimulus packages from 2001 to 2003? Ezra Becker, TransUnion's principal consultant in financial services, checked TransUnion's Trend Data database--a quarterly snapshot of 25 million consumers randomly sampled. The trends led to the conclusion that after those rebates, consumers still were relying on credit and some continued to have credit problems after a temporary relief. The trends noted were:
* Consumers saved little with the 2001 government stimulus check and instead spent it or paid down past-due debt; * Third-quarter 2001 saw the highest percentage--less than 3%--of consumers who were 60 days past due on bank cards. That percentage dropped to 2.4% during second-quarter 2002 and then increased to more than 3% during first-quarter 2003. * The average balance of bankcards that were 60 days or more past due dropped significantly in third-quarter 2001. Some of the stimulus refund check could have gone to pay down credit debt (averaging under $1,600). After the decrease during that quarter, however, the average balance of cards 60 days or more past due continued to increase--to more than $2,200 during fourth-quarter 2003. * The average balance of new bankcards dropped slightly from third quarter 2001 to fourth quarter. Consumers were paying down balances but started a steady climb until leveling off in early 2003. The average daily balance of new bankcards increased. That means consumers continued to rely on credit.
TransUnion's survey was conducted by Zogby International. The online survey of 3,036 adults was conducted Jan. 30 to Feb. 1. Its margin of error is +/- 1.8 percentage points.

Amended CU modernization bill heads to Ohio Senate

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COLMUBUS, Ohio (2/15/08)--Credit union modernization legislation--Senate Bill 247--made it through the Ohio Financial and Financial Institutions Committee Feb. 5 without opposition, says the Ohio Credit Union League (eLumination Newsletter, Feb. 13). The legislation seeks to modernize the administration, operation and governance of Ohio’s state-chartered credit unions. The committee adopted several amendments to the legislation that would:
* Require credit unions to retain Suspicious Activity Reports for five years; * Provide further clarification of nonpaper document storage requirements; and * Provide of authority for the superintendent of the Ohio Division of Financial Institutions to conduct national background checks within limits.
The bill will go to the floor for a vote when the State Senate returns to session. SB 247 is then expected to be referred to the House Financial Institutions, Real Estate and Securities Committee, according to league General Counsel John Kozlowksi. “We expect the credit union legislation to continue making solid progress through the House and in the Senate,” Kozlowski said.

Mission is the difference Crear tells Faith CU

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DUBLIN, Ohio (2/15/08)--Mission, not member service, is where the difference lies between banks and credit unions, World Council of Credit Unions (WOCCU) CEO Pete Crear told Faith Community United CU during its annual shareholders meeting and banquet Feb. 2. The strategic plans of WOCCU, Faith Community United, and all credit unions are the same, Crear said (eLumination Newsletter Feb. 13). “As our institutions have grown and become more sophisticated, the mission has never left us, but it sometimes becomes obscured by institutions striving to be more competitive, to offer the hottest transaction technology, the sharpest marketing efforts, and the most attractive savings and lending rates in town,” he said. Crear said he was amazed by the commitment of credit unions throughout the world to service members and the challenges they face. “As credit union leaders, we have an extra burden to shoulder,” he added. Credit unions must remain committed to providing high-quality financial services, and “support the credit union mission as a mission,” he said. Crear said all cooperatives should answer “yes” to the following questions:
* Do you reach out to serve various people and support that commitment through action? * Are you the source of financial knowledge and leadership in the communities you serve, (and do you) provide financial education (and do you) often temper expectations with compassion for personal circumstances? and; * When you introduce new services, do you measure their impact and define their success by how well they serve your members’ most critical needs? Faith Community United CU of Cleveland has $9.9 million in assets.

McMorris elected chairman of National CU Foundation

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DENVER (2/15/08)--Allan Kemp McMorris, president/CEO of Oakland County CU in Waterford, Mich., was elected chairman of the National Credit Union Foundation (NCUF) at its annual meeting this week in Denver. In his acceptance speech, McMorris remarked how the foundation has evolved since the Community Investment Fund was created in 1999. “We’ve seen phenomenal growth in grant dollars--from less than $200,000 to more than $6 million. We’re making a widespread impact on our industry--with foundation programs and grants reaching all 50 states, thousands of credit unions, and millions of members.” At the same time, he said, “The Foundation board has expanded and grown more diverse, representing all sectors of the credit union community.” The NCUF Board includes natural-person credit unions from all asset ranges, corporate credit unions, state credit union foundations, state credit union leagues, and national credit union support organizations. McMorris will continue to encourage credit union membership growth and youth financial education--key goals of the two largest programs receiving NCUF funding: REAL Solutions and Biz Kid$. As chairman of the Credit Union National Association (CUNA) the past year, McMorris created CUNA’s Membership Growth Task Force (News Now June 5, 2007). He focused on ways to attract Generation Y--young consumers who typically use three different financial providers. “Our challenge is to make sure credit unions are among their choices, become their primary financial institution and help them benefit from financial literacy," McMorris said. McMorris will step down as CUNA chairman on March 3. While NCUF and CUNA are separate organizations with different boards, he said, they share common goals of strengthening credit unions and empowering consumers. “Our two organizations succeed together,” he concluded.

Robbers in Pennsylvania getting bolder violent says FBI

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LANCASTER COUNTY, Pa. (2/15/08)--Gangs of violent robbers have become bolder and more dangerous as they have cut a swath through central Pennsylvania during the past two years, targeting financial institutions, the FBI said. Not only are the robberies some of the most violent that the FBI has seen seen, the level of violence is escalating, which means it is just a matter of time before people get hurt, Arturo Canedo, FBI senior special agent, told the Harrisburg Patriot News (Lancaster New Era/Intelligencer Journal Feb. 9). The FBI believes that two unrelated pairs of robbers are perpetrating the holdups, netting more than $750,000 from financial institutions in Dauphin, Lancaster, Lycoming and York counties. On Oct. 25, two masked men entered Lanco FCU, a $44.3 million asset, Lancaster, Pa- based credit union. They jumped behind the counter and forced a female clerk away from the cash drawers, according to police. Although no weapons were brandished and no one was seriously injured, the robbers made off in white pickup truck with more than $6,000 in cash. The robbers appear to be organized, have a plan and are becoming increasingly aggressive, said Malinda C. Anderson, special agent with the FBI’s Harrisburg, Pa., bureau. Although they strike at different times of the day, both pairs use the same getaway mechanism--stealing a car that they then abandon in a parking a lot about a half-mile down the road, Anderson said.

WOCCU issues new global model for CUs

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MADISON, Wis. (2/15/08)--Credit union leaders, policymakers and regulators can receive help implementing regulatory standards with the World Council of Credit Unions’ (WOCCU) new Model Regulations for Credit Unions. The regulations supplement the Model Law for Credit Unions, published in 2005. Model Regulations is based on examples of regulations assembled from numerous countries and from WOCCU’s international development experience. WOCCU research provided a policy framework for the 62-page guide, while other microfinance institutions contributed principles, said Dave Grace, WOCCU vice president of association services. “Credit unions in many countries do not have sufficient regulatory supervision,” Grace said. “WOCCU is providing the next step of guidance--model regulations to implement the laws they’ve created.” Model Regulations includes a CD-ROM with real-world examples of regulations from 18 credit union sectors. The guide will be distributed to participants at the Global Regulators’ Roundtable, scheduled for the 2008 World Credit Union Conference, July 13-16, in Hong Kong. For more information, use the links.

WOCCU to host supporters reception

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WASHINGTON (2/15/08)--The annual World Council of Credit Unions (WOCCU) Supporters Reception will be March 2 at the Chinese Embassy in Washington, D.C. The reception is scheduled during the Credit Union National Association Governmental Affairs Conference in Washington, D.C. March 2-6. WOCCU must turn in registrants' names to the embassy for security reasons today. The reception includes an introduction to the World Credit Union Conference July 13-16 in Hong Kong. Charles Yip, president of the Credit Union League of Hong Kong, will preview the conference. Melvin Edwards, WOCCU chairman, and Pete Crear, WOCCU president/CEO, will provide information on WOCCU’s activities and the role it plays in helping developing countries and their credit union movements. The reception starts at 5:30 p.m. Program speakers begin at 6.

CU System briefs (02/14/2008)

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* MADISON, Wis. (2/15/08)--The Madison, Wis., and Washington, D.C., offices of the Credit Union National Association will be open Monday, President's Day. Some leagues have announced they will be closed during the federal holiday. CUNA's News Now will publish as usual on Monday … * KIMBERLEY, Wis. (2/15/08)--Capital CU is accepting vehicle registration renewals at all of its branches as a convenience to its members. In partnership with the Wisconsin Department of Motor Vehicles, the $295 million asset, Kimberly, Wis.-based credit union said those interested in the service can bring their renewal slip and pay the fees. Capital will handle the rest of the registration. Renewals are accepted for car, truck or motorcycle registrations. The credit union charges a $6 service fee plus the renewal fee … * SAN JOSE, Calif.(2/15/08)--Technology CU has become the official credit union for the employees of Facebook, a social networking company, announced the credit union. "Facebook is a community-driven network, and so it makes sense that they would partner with a credit union for their employees," said Donna Butcher, assistant vice-president of business development for Tech CU … * ST. PETERSBURG, Fla. (2/15/08)--PSCU Financial Services announced that Kyle L. Markland, CEO of Affinity Plus FCU, St. Paul, Minn., has been named to PSCU’s board of directors, and Hubert Hoosman Jr., president/CEO of Vantage CU, St. Louis, has been appointed as associate director. Markland has more than 25 years of experience in the credit union industry, and Hoosman has worked in the industry for 24 years, according to PSCU. PSCU is a credit union service organization that serves more than 1,100 financial institutions nationwide … * ARVADA, Colo. (2/15/08)--The Credit Association of Colorado and Credit Union Association of Wyoming (CUAC/CUAW) announced the promotion of Melissa Vetterling to grassroots organizer. She will assume her new duties today. Vetterling has been a part of CUAC/CUAW’s Government Affairs Department for the past two years, serving as administrative assistant for the association’s Government Affairs department, and before that she was an administrative assistant for the association’s Marketing Communications department. In 2006, Vetterling received a Grassroots Advocate Award for the Colorado Credit Union Vote 2006 team ... * ELYRIA, Ohio (2/15/08)--School Employees Loraine County CU, based in Elyria, Ohio, has named Brent Binkley as president/CEO, reports the Ohio Credit Union League (eLumination Newsletter Feb. 14). Binkley joined the credit union in 2001 as chief operating officer and was promoted last March to senior vice president. He has 22 years' experience in the financial industry …

Dayton CUs banks sidestepped mortgage industry problems

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DAYTON, Ohio (2/15/08)--Dayton, Ohio-area credit unions and banks say they have managed to avoid many of the problems in the mortgage market. Wright-Patt CU’s home-loan applications doubled in January, compared with one year ago, Tim Mislansky, senior vice president, told the Dayton Daily News (Feb. 9). The credit union also saw an increase in demand for purchase mortgages and refinancing applications. Wright-Patt’s average home loan is $90,000, with more than half of loans going to first-time homebuyers, Mislansky told the newspaper. Credit unions usually avoid risky debts such as subprime loans, he added. Though lenders like Wright-Patt aren’t tangled up with foreclosures or subprime loans, they are still affected indirectly. Credit has tightened, and markets that bought home loans from credit unions have cut back, the newspaper stated. About 98% of state-chartered banks and credit unions were not involved with subprime lending, said Dennis Ginty, spokesman for the Ohio Department of Commerce. Though some institutions did not get involved with subprime lending, it is still a major problem, Nancy Mohan, assistant professor of finance at the University of Dayton, told the Daily News.