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CU System briefs (02/16/2011)

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* OGDEN, Utah (2/17/11)--A teller at Education 1st CU, Ogden, Utah, was punched in the face after trying to knock a gun out of a robber's hands Tuesday. The unidentified teller was not seriously injured (Salt Lake Tribune Feb. 16). The incident occurred at about 5:30 p.m. when a man wearing a bandana over his face and carrying a handgun walked into the credit union and demanded money. The teller believed the gun was not loaded, police said. During the scuffle, the bandana slipped, revealing the robber's face, and he fled * DETROIT (2/17/11)--A Michigan man who escaped the death penalty and was sentenced to life in prison for killing an armored-car guard restocking ATMs at DFCU Financial CU, Dearborn, is appealing the conviction (Detroit Free Press (Feb. 16). Timothy O'Reilly, 37, of Detroit was the first person tried under the federal death penalty in eastern Michigan since 2003. He was convicted in the death of guard Norman Stephens, 30, although the jurors could not agree on whether he fired the fatal shot. Six men took part in the heist

Survey outlines competitions communications strategies

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CHICAGO (2/17/11)--Today's challenges--and consumer expectations--are transforming the way retail banks operate and serve customers. Credit unions can learn what they're up against by examining their competitors' strategies. A recent study examines what is impacting business and what strategies retail banks and lenders are using to keep their customers. "2010 Survey Results Top Retail Banking Communications Strategies" is a survey of 458 banking executives conducted by Variolii Corp., in partnership with American Banker, Bank Technology News and US Banker. Retail bankers' greatest challenges aren't much different from credit unions'. An overwhelming 84% said that financial reform/legislation poses the greatest perceived challenge both now and for the next few years. That's more than double the next greatest challenges--increased delinquencies/defaults (39%) and tighter lending standards (38%). The fourth highest challenge, generating 29% of responses, was developing a competitive mobile/online banking strategy, and the fifth, with 26% was: increased/more sophisticated fraud activity. Garnering less than 20% of responses were reduced customer satisfaction/decreased bank brand loyalty; continued industry consolidation, harder to reach customers (due to increased mobile-only households and reduced landlines), other, and reduced spending/lower credit card volume. With this environment in mind, the survey looked at communications strategies employed by the banks. Roughly 77% of banks surveyed use traditional, high cost methods of communicating with customers most often. Direct mail/postcards and agent interaction on the phone, are used the most--68% and 64%, respectively. E-mail (56%) and the local branch (52%) are the next most popular strategies. Other findings:
* Thirty-one percent of survey respondents communicate with their customers over a mobile device. In fact 44% of institutions surveyed did not know whether their targeted customer contact was through landline or a mobile device. * Thirty-two percent said they capture customer preference data to determine whether they are using a mobile device, while 55% did not. When asked why the banks don't communicate with customers via their mobile number, 20% indicated they didn't have the appropriate technology; 15% did not have the numbers or sufficient mobile number coverage, and 13% cited legal/privacy/security concerns. * Of those who do use customer preference data in their communication strategies, 85% used the customers' preferred communication channel; 42% used preferred language; 46% used preferred time of day; and 41% used customer behavior. * Improving the customer experience is rated "important" to "very important" among 86% of survey respondents. Seventy-one percent said offering customers self-service options was important or very important. Self-service options offered included online banking (89%); IVR for balance, payments (57%); opt-in alerts for balance limits, overdrafts (49%) and mobile banking, (38%). Eighty-six percent predicted their self-service options will increase somewhat or substantially in the next few years. * Forty percent of respondents already are leveraging social media to communicate with customers in their strategies to attract younger customer segments. Social media included Facebook, used by 34%; Twitter, 22%; various social media, 13%; blogs, 9%; LinkedIn, 5%; and e-mail, 5%. Of those who are not using social media now, about 35% said they were planning to incorporate them in the future.
In spite of the changes, traditional methods remain in full force, said the study.

First CU-to-bank conversion in years pondered in Md.

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COLUMBIA, Md. (2/17/11)--For the first time in several years, a credit union has announced it is considering converting to a federal mutual savings bank charter. Har-co Maryland FCU, a $199 million asset credit union based in Bel Air, Md., on Monday published a notice to members of its consideration to convert from a federal credit union charter to that of a federal mutual savings bank. Founded in 1955, Har-co Maryland FCU serves more than 27,849 members of primarily educational groups. It's notice said it intends "to increase membership and economies of scale" to better serve members and "to preserve its tradition of competitive pricing, plus make it easier to cost-justify adding branches." It also noted a conversion would provide "additional business flexibility." Jennifer M. Simmons, interim CEO/chief membership officer at the Maryland & District of Columbia Credit Union Association, said that while the association's board "firmly believes that the credit union charter provides the best vehicle for serving the financial needs of consumers, we do support the right of member/owners to exercise democratic control of their credit union. "The association encourages credit unions considering conversion to make their decisions based solely on the best interest of the members and that the credit union provides full, plain language and timely disclosures to the membership so that an informed decision can be made by the member/owners," Simmons added. Credit union conversions to banks have been on the decline, with only 31 conversions since 1995. No credit unions converted in 2010 and only one converted in each of 2009 and 2008, according to a News Now analysis (Jan. 14).

Maine CUs help 1000 members in jewelers breach

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PORTLAND, Maine (2/17/11)--Maine credit unions have discovered a security breach impacting consumers who made purchases at a jewelry store in November and December, according to the Maine Credit Union League. Credit unions are helping more than 1,000 members who are among those reporting fraudulent activity on their credit and debit cards. The computer system breach occurred at Day's Jewelers, based in Waterville, Maine (The Associated Press Feb. 15). Day's has five stores in Maine and one in New Hampshire. State police said the breach compromised thousands of credit and debit card account numbers. Personal identification was not accessed and purchases made online were not affected, said Day's in a statement. League President/CEO John Murphy said the suspicious activity was noted during the past several days, and while the fraud activity affects thousands of consumers, the focus for Maine's credit unions is on those members impacted by the breach. "The first priority of credit unions is on assisting and answering questions from members," he said. "Cards are being reissued to those members affected and our credit unions are working to insure that the inconvenience to members is minimal." Murphy emphasized that neither consumers nor their credit union or other financial institution did anything wrong. "Credit unions have a number of advanced fraud protection and fraud prevention systems in place that operate 24 hours a day, 365 days a year to identify and eliminate fraudulent card activity," he added. The league provided these tips for consumers:
* Monitor and review accounts regularly and report unusual charges or activity; * Be warned of possible scams and avoid giving out personal information via phone or e-mail; financial institutions, including credit unions, and credit card companies will not ask for this information in this manner; and * Report suspicious solicitations and activity to your financial institution and local authorities.
Two years ago, the Maine-based Hannaford grocery chain was breached, and hackers accessed more than four million credit and debit card numbers used at 165 Hannford stores in the Northeast and 106 Sweetbay stores in Florida. At least 1,800 numbers were stolen and used for unauthorized purchases.

N.Y. corporate task force makes recommendations

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ALBANY, N.Y. (2/17/11)--New York’s Corporate Credit Union Services Task Force submitted its recommendations for Members United Bridge Corporate FCU to the Credit Union Association of New York’s board of directors after months of research and meetings. Primary on its list was a recommendation that New York’s credit unions support a reconstituted charter for the bridge corporate and an endorsement of the Members United “Forward Together” plan as the business model for the reconstituted corporate. The task force, which included 27 New York credit union leaders, was established by the association’s board of directors. Task force members were charged with finding a cost-effective solution/strategy for providing essential services that historically have been offered to credit unions by corporate credit unions. Additional recommendations that have been accepted and supported by the association’s board include:
* Advocating for a credit union-owned corporate credit union system that follows the general business model of a corporate credit union as set forth by the final corporate regulation, 704; * Supporting general consolidation/mergers within the corporate credit union system that would enhance Members United Bridge’s long-term strength and viability, in turn bringing more efficiencies and lower cost to natural person credit unions; and * Encouraging the use of non-perpetual membership capital, whenever possible, under the new corporate regulations.
The task force also concluded that each natural person credit union should conduct its own due diligence regarding future corporate credit union services and make a decision based on the best interest of the members it serves. The association said it will continue to monitor developments and pursue the most favorable options for New York credit unions and their members. “Using the recommendations developed by our Corporate Services Task Force, we look forward to working with the Credit Union National Association, the National Credit Union Administration and other key parties to shape a corporate credit union system that will provide long-term benefits and stability,” said association President/CEO William J. Mellin. To read the report, use the link.

Governor commends Iowa CUs on biz lending

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DES MOINES, Iowa (2/17/11)--Iowa Gov. Terry Branstad commended Iowa credit unions for offering business loans at a time when other financial institutions are pulling back during the Iowa Credit Union League’s (ICUL) annual Legislative Conference on Tuesday in Des Moines. More than 100 Iowa credit union representatives convened to learn more about the legislative issues affecting the credit union industry and interact with their legislators. Branstad noted that from 2007 through 2010, Iowa credit unions increased member business lending (MBL) by 54% while Iowa banks decreased business lending by 7.9%. “Credit unions are part of the solution in creating and sustaining jobs in our state,” Branstad said. Credit unions’ MBL cap, which currently stands at 12.25% of total assets, could be raised as high as 27.5% if Credit Union National Association (CUNA)-backed legislation that was offered by Sen. Mark Udall (D-Colo.) is reintroduced this year and passed into law. CUNA has estimated that the MBL cap increase would add $10 billion in new funds into the market, at no cost to taxpayers, and create 108,000 new jobs. Attendees also heard from Iowa Economic Director Debi Durham, Iowa Attorney General Tom Miller, state Sen. Jeff Danielson (R-11) and state Rep. Chuck Soderberg (R-3). Danielson and Soderberg praised the credit union industry’s sustainable, community-oriented business and leadership model.

Utah CUs have their day on the hill

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SALT LAKE CITY (2/17/11)--The Utah Credit Union Association held a Credit Union Day on the Hill Tuesday at the state Capitol, and invited state legislators and credit union representatives to meet during lunch. About 50 of the 75 state house representatives and roughly 85 credit union presidents, board members, executives, and management staff attended. Several members of the house leadership attended, including Speaker Becky Lockhart (R-64) and Majority Leader Brad Dee (R-11). “It is really important for you have some low-key interaction with these policy makers to establish relationships,” said Utah Credit Union Association President Scott Simpson, in thanking those credit union executives who attended. State Rep. David Butterfield (R-4) and chief marketing and operations officer at USU Charter CU in Logan, made it a point to meet and talk to as many people as possible, said the association. Credit union representatives were happy to see another credit union employee as part of the legislature, knowing he could represent the interests of credit unions, said the association. The association played a role in helping Butterfield get elected. At the event, Utah’s credit unions provided legislators a take-away card with facts about the state’s Utah credit unions. Credit union representatives talked with legislators seated at their tables. Afterward the association’s Government Affairs Committee commented on its success in informing legislators of credit unions’ concerns with legislation this session.

CO-OP Miracle Match raises 3M for Kids hospitals

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RANCHO CUCAMONGA, Calif. (2/17/11)--In a year of ongoing difficult economic conditions, credit unions participating in the CO-OP Miracle Match program raised more than $3 million in Credit Unions for Kids fundraisers in 2010, a 20% increase compared with 2009. “The credit union spirit of people-helping-people is something that continues to thrive even during tough financial times,” said Stan Hollen, president/CEO of CO-OP Financial Services, and a member of the Children’s Miracle Network’s board of governors. Participating credit unions raised more than $2 million for Children’s Miracle Network in 2010, with the total exceeding $3 million when combined with CO-OP Miracle Match funds. This represents an increase of $500,000 compared with the previous year. Also, 26 new events took place in 2010, a 30% increase over 2009. The Austin Chapter of Credit Unions raised the most money during two events it held in support of Dell Children’s Medical Center of Central Texas. A golf tournament raised $212,395 and a raffle, $150,000. St. Louis Community CU raised $131,500 during a dance marathon to support St. Louis Children’s Hospital. These events received $25,000 in CO-OP Miracle Match funds to add to their charitable contributions. During the 2009 program year, the top fundraising credit union produced $45,000 in funds, added to which was $10,000 in CO-OP Miracle Match funds. Mountain America CU, West Jordan, Utah, raised $100,000 plus $20,000 in CO-OP Miracle Match funds for Primary Children’s Medical Center in Salt Lake City with its Swing for the Kids Golf Tournament. Also, a bowl-a-thon held by Randolph-Brooks FCU, Live Oak, Texas, raised $59,980 and received $11,996 in CO-OP Miracle Match funds to support CHRISTUS Santa Rosa Children’s Hospital in San Antonio. CO-OP Miracle Match is managed by CO-OP Financial Services on behalf of its 3,000 member credit unions. The program awards $1 million in matching funds annually for Credit Unions for Kids events, proceeds of which go to local children’s hospitals in the Children’s Miracle Network. The credit union industry is currently the third-largest contributor to Children’s Miracle Network. Matching funds through this program are available now to credit unions planning events in 2011. Children’s Miracle Network changed its name earlier this year to Children’s Miracle Network Hospitals.

League WOCCU look to link GuatemalaU.S. remittances

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ANTIGUA, Guatemala (2/17/11)--Guatemala’s credit unions would like to have a single shared branching system that could receive remittance funds transferred from credit unions in the U.S. Representatives from credit unions and organizations in California and Nevada are helping examine such a program’s feasibility under the auspices of World Council of Credit Unions’ (WOCCU) International Partnerships Program.
Click to view larger image Participants in the recent World Council of Credit Unions (WOCCU) International Partnerships Program visit to Guatemala included (kneeling, from left) Steve Schaefer, WOCCU technical services manager, and Nathan Rogers, Financial Service Centers Cooperative (FSCC) vice president of marketing; (standing, from left) Oswaldo Oliva, CEO of Guatemala credit union trade association (FENACOAC); Victor Miguel Corro, WOCCU International Partnerships senior manager; FSCC Board Chair Steven Stapp, CEO of San Francisco FCU; Amanda Smith, FSCC vice president of innovation; Gerardo Morales, FENACOAC finance manager; Carlos Flores, FENACOAC marketing coordinator; and Deeynar Leon, FENACOAC technology manager. (Photo provided by World Council of Credit Unions)
Representatives from WOCCU, the California and Nevada Credit Union Leagues and Financial Service Centers Cooperative (FSCC), a WOCCU associate member organization, met in Guatemala last week to consider ways in which the country’s existing national shared branching system could link with a similar system in the U.S. The leagues have partnered with WOCCU member Federación Nacional de Cooperativas de Ahorro y Crédito (FENACOAC), Guatemala’s credit union trade association, as part of the International Partnerships Program since 2009. Each group participated in discussions about the possible link and other key topics, during the visit. “Such a link would provide ease, convenience and greater economy for Guatemalan workers in the U.S. who want to send money to relatives back home,” said Oswaldo Oliva, CEO of FENACOAC. “With a direct link between U.S. credit unions and Guatemala’s shared branching system, FENACOAC hopes to change the perception of credit unions as the ‘poor man’s bank’ to that of institutions that provide modern services and a safe and sound system that addresses many financial needs.” FENACOAC represents 27 credit unions that hold more than 80% of assets and serve one million members. The association has used the system-wide Mi Coope (“My Credit Union”) brand to differentiate financial cooperatives from other types of Guatemalan cooperatives. All FENACOAC credit unions share the same core operating system and participate in a national shared branching network. FENACOAC estimates that roughly 1.2 million Guatemalans have emigrated north for work, with California as the key destination. Every year, $3.7 billion is sent home to Guatemala from the U.S. In addition to FENACOAC’s Oliva, participants in the three-day planning meeting included FSCC Chair Steven Stapp, CEO of San Francisco (Calif.) FCU; FSCC’s Nathan Rodgers, vice president of marketing, and Amanda Smith, vice president of innovation; and WOCCU’s Victor Miguel Corro, senior manager of partnerships and training, and Steve Schaefer, technical services manager. The group also traveled to Antigua and Guatemala City and visited three credit unions. The meeting was capped by the development of a work plan. It is expected that the project will start in 2012 with an international shared branching link between Guatemala and the U.S. “In visiting the branch locations, I got a real sense of how important the credit unions are to the community and in helping the members improve their lives,” Stapp said. “I have a renewed sense of responsibility in helping Guatemala’s credit unions support their members.”

BECU taps legends in new card promo

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TUKWILA, Wash. (2/17/11)--Tukwila, Wash.-based BECU has enlisted famous University of Washington (UW) alumni to promote its latest addition to the MasterCard family. Among the Husky alumni appearing in a YouTube video--they’re singing the UW fight song, “Bow Down to Washington,”--are: Richard Karn of the television show “Home Improvement”; former National Basketball Association player Detlef Schrempf; football legends Sonny Sixkiller, Damon Huard and Brock Huard; philanthropist and activist Bill Gates Sr.; travel writer Rick Steves; and jazz great Kenny G (The News Tribune Feb. 16) The alumni are helping promote the UW Gold Debit MasterCard, which is part of an effort by $9 billion-asset BECU to gain traction within the Washington higher education community. The credit union also contacted Washington State University, which was contractually obligated to another financial institution, and could not participate in a similar promotion. The UW debit card is available to all individuals who open a free BECU checking account online or at any BECU location. Every cardholder receives special MasterCard gold benefits at no charge and free fraud-monitoring protection. Some of the alumni who appear in the promotion received an appearance fee. UW benefits by receiving about $400,000 annually in sponsorships, including signage at sporting events. The video will be distributed via e-mail and social networks such as Twitter and Facebook. Use the link to the view the video online.