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University of Iowa Community CU UI end contract

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IOWA CITY, Iowa (2/17/12)--The University of Iowa and the University of Iowa Community CU  have ended a five-year partnership in which the credit union was the exclusive financial services provider on the university campus.

The credit union said university officials informed it last July that they would solicit proposals from other financial service providers. Although the credit union provided two offers of optional two-year extensions, the university did not to pursue the options and instead put the contract up for bidding (The Daily Iowan Feb. 14).

After reviewing the guidelines of the bidding process, the credit union decided not to bid on the contract because the new contractual guidelines did not make financial sense for its 91,000 members, the credit union told local media. The campus business involved more transactions but didn't open many new loan or deposit accounts and the revenue generated did not justify the expense of a revised contract ( Feb. 15).

Hills Bank and Trust Co. won the bidding process and will pay more than $613,000 for branch rental space at the university and its hospitals and clinics. The move means that students' Iowa One cards linked to their checking accounts will move to the bank, which opened its first branch on campus on Tuesday. It will open a second branch at the hospitals and clinics on March 20 and a number of ATMs in March.

Hills will pay the university a guaranteed $1.04 million, and the university could earn about $600,000 more based on card transactions on campus. The Press-Citizen said the university will receive from the bank about half the revenue it received under the credit union contract. The credit union had paid the university more than $2.9 million in the five years it provided services.

N.J. bill would convert foreclosures to affordable housing

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TRENTON, N.J. (2/17/12)--A measure that would allow a New Jersey agency to purchase and deed-restrict foreclosed properties for affordable housing has been introduced into the New Jersey Senate.

State Sen. Ray Lesniak (D-20) introduced S. 1566 this week to establish a central agency under the state's Housing and Mortgage Finance Agency to use the State Affordable Housing Trust Fund to buy foreclosed properties, according to the New Jersey Credit Union League (The Daily Exchange Feb. 16).

State Sen. Barbara Buono (D-18) is co-sponsor of the measure, which was scheduled to be considered yesterday before the  Senate Economic Growth Committee. Assemblyman Jerry Green (D-22) will introduce a companion bill in the lower house, said the league.

The legislation would turn 10,000 foreclosed homes into 10,000 affordable homes, but the program wouldn't be just an affordable housing program, the article said. The "Foreclosure Relief Corp." would give municipalities 45 days to determine whether they want the vacant properties to be converted to affordable housing before the corporation goes into a market rate bulk sale.

Funeral arrangements for Coopera CEO announced

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DES MOINES, Iowa (2/17/12)--Funeral arrangements have been set for Warren Morrow, CEO and founder of Coopera Consulting, who died unexpected early Wednesday morning at the age of 34 (News Now Feb. 15).

"Warren was a unique individual of exceptional passion," said Mark Condon, senior vice president of the Credit Union National Association (CUNA), which has an exclusive, national partnership with Des Moines, Iowa-based Coopera to help credit unions reach out to Hispanics.  "He was the catalyst behind CUNA's valued partnership with Coopera, and that partnership will continue to thrive as a testament to Warren's work and what our partnership will continue to do for credit unions. He put together an incredible team that shares his passion and commitment."

Working together, CUNA and Coopera launched a Spanish personal finance website for credit unions, El Poder es Tuyo--The Power is Yours. Coopera and its sister company in Iowa, The Members Group, recently partnered to provide credit unions with the Coopera Card, a reloadable Visa prepaid card build specifically for Hispanic cardholders. Coopera works with several state leagues, and Morrow had begun fielding inquiries from Fortune 500 companies on how to better break into the Hispanic market.

"Warren had a powerful vision that outreach to the underserved Hispanic community should not be philanthropy," said Murray Williams, chief operating officers, Iowa Credit Union League, which has owned Coopera since 2006. "Instead, a business could do well by doing good--and everyone would benefit." (See resource links for a video of Morrow and local coverage of his efforts.)

Miriam De Dios, vice president of Coopera, said the legacy Morrow has created will live on through their company. "It is our mission to continue with Warren's passion and vision of Coopera as we move forward."

Visitation will be today from 5 p.m. to 8 p.m. at Dunn's Funeral Home, Des Moines, Iowa 50312. Funeral services will be Saturday at 1 p.m. at Grace United Methodist Church  in Des Moines.  He is survived by his wife Christina Fernandez-Morrow and 7-year-old daughter Ariana. In lieu of flowers, the family asks that contributions be made in his honor to the Warren Morrow Memorial Fund at Des Moines Metro CU.

Georgians savings deposits grew in 2011

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ATLANTA (2/17/12)--Georgia credit union members continue to improve the financial security of their savings account balances at the state's credit unions grew in 2011, indicating consumers maintained much of their financial prudence characteristic of recent years, according to a Georgia Credit Union Affiliates (GCUA) survey.

The most recent "Paying Attention" report from GCUA revealed that savings deposits among credit union members increased by 10.59%. Also, total credit union loan balances in the state grew 4.98% in 2011, down from the 11.17% growth rate in 2010.

The report, released quarterly, combines savings and lending data from 38 credit unions statewide--representing 91% of credit union assets and 84% of members in Georgia--with poll responses from more than 2,400 credit union members.

"Georgians remain cautious about the recovery, and many have not changed their views from a year ago," said Mike Mercer, GCUA president/CEO. "Still, there are positive signs. While savings growth rates are slightly below 2010 levels, Georgians continue to save their money, and the number of bankruptcy filings by credit union members have also fallen."

The report also revealed:

  • Business lending grew by 13.83% last year;
  • Used-car lending continued its growth at a rate of 7.67%;
  • First-mortgage balances increased by 8.94%; and
  • Bankruptcies filed by credit union members decreased by 15.12% in 2011.
"It's common to suggest that consumer behavior will change dramatically as a result of the Great Recession, similar to the way it did for the generation that lived through the Great Depression of the 1930s," said Bill Hampel, chief economist for the Credit Union National Association. "I think that's way overblown. We may see some modest long-term changes in behavior, but nowhere near the effects of 80 years ago, simply because as severe as it was, this latest recession was minor compared to the Great Depression.

"One medium-term effect is many households approaching retirement may need to work an extra year or two," Hampel added. "Longer term, we could see modest changes in the direction of greater saving, more conservative investing, and lower home-ownership rates."

"Another bright spot in Georgia's outlook is the financial prudence of credit union members," Mercer said. "When asked how they would use their tax refunds this year, an overwhelming majority plan to either save the money or use it to pay down debt."

According to the GCUA poll, 44.4% of Georgia credit union members intend to use tax refunds to pay down debt, and 36.1% of members plan to put the refund towards savings. While Georgians' trend of saving is not new, the recent focus on repaying debt and postponing loans could mean consumers are rebuilding their confidence and are determined to regain sound financial security, GCUA said.

PCUA boardGAC resolution supports H.R. 3993

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Mary Dunn, senior vice president and deputy general counsel for the Credit Union National Association, addresses the Pennsylvania Credit Union Association's (PCUA) board members and Governmental Affairs Committee members, at a joint meeting. Other panelists included Chris Pippett (left), Fox Rothschild, and Brian Knight (right), National Association of State Credit Union Supervisors. Rick Wargo, PCUA Executive Vice President/General Counsel, moderated the discussion on regulatory issues. (Photo provided by the Pennsylvania Credit Union Association)
HARRISBURG, Pa. (2/17/12)--The Pennsylvania Credit Union Association's (PCUA) Board of Directors and Governmental Affairs Committee (GAC) adopted a resolution to support H.R. 3993, which would allow credit unions to obtain supplemental capital.

The association board and GAC convened Wednesday for a joint meeting in Harrisburg. PCUA President/CEO Jim McCormack and Board Chairman Michael Kaczenski welcomed the group.

Rick Wargo, PCUA executive vice president/general counsel, served as moderator for a discussion on regulatory issues, with panelists: Mary Dunn, senior vice president and deputy general counsel for the Credit Union National Association; Brian Knight, National Association of State Credit Union Supervisors; and Chris Pippett, Fox Rothschild.

There was discussion on how supplemental capital should/could work under Congress' H.R. 3993, the Capital Access for Small Business and Jobs Act.

The resolution reaffirmed PCUA's position taken in 2009 to support supplemental capital as long as it preserves mutual ownership and the notion of one member, one vote.

There also was discussion about National Credit Union Administration (NCUA)/state regulatory exam issues, including H.R. 3461, the Financial Institution Examination Fairness and Reform Act, introduced by U.S. Rep. Shelly Moore Capito (R-W.Va.) and U.S. Rep. Carolyn Maloney (D-N.Y.). The bill would clarify the appeals process for examination issues, including an appeal that goes outside of NCUA to the Federal Financial Institution Examination Council.

PCUA is sending a letter to all members of its congressional delegation to encourage them to support the legislation.

Alloya Corporate profitable for 2011 ahead of plan

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WARRENVILLE, Ill. (2/17/12)--Alloya Corporate FCU announced Wednesday that it recorded net income of $9.6 million for the 2011 calendar year and is ahead of targeted capital projections.

After accounting for dividends paid on perpetual contributed capital (PPC), Alloya reported retained earnings of $20.5 million as of Dec. 31.

Regulatory capital (retained earning plus perpetual contributed capital plus nonperpetual capital accounts) was $93.7 million as of Dec. 31, resulting in a capital ratio of 5.6% and a retained earnings ratio of 1.2% as, based on moving daily average net assets of $1.7 billion. The results are unaudited.

"Alloya is executing on a financial plan to earn $3 million over the next 12 months to further bolster retained earnings," said Todd Adams, Alloya's chief financial officer.

When compared with the plan presented in Alloya's private placement memorandum (for the sale of perpetual contributed capital and nonperpetual capital accounts), retained earnings are three-and-a-half years ahead of base-case scenario targets, Adams said. The retained earnings ratio of 1.2% exceeds the 0.45% required in October 2013, and is ahead of the 1% target required in 2016, he said.

Alloya's balance sheet is smaller than might otherwise be expected from a corporate credit union with such a large member base and volume metrics. That is a result of Alloya's business and capital plan, which is based on how credit unions use the corporate's balance sheet and not the member credit unions' individual asset size, Adams said.

"Alloya's flexible capital plan provides significant advantages to our members," said Charles Furbee, Alloya's CEO,. "In this case, besides reducing their capital investment, by working with the Federal Reserve to implement an Excess Balance Account program and implementing it via the corporates' secure account management portal "'Premier View,'" the corporate has built an efficient process that helps minimize concentration risk for our members."

New website translates credit scores into Spanish

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WASHINGTON (2/17/12)--A new website provides information and translation services to help Hispanic Americans learn more about their credit scores.

The site, introduced by Hispanic America Saves, Consumer Federation of America and VantageScore Solutions, features questions and answers that provide the information consumers need to know about credit scores.

Especially important information for Hispanic Americans about credit scores includes:

  • Information related to race, ethnicity, country of origin, or whether consumers speak English are not reported to the three national credit reporting companies--Equifax, Experian and TransUnion--and are not factors used to determine credit scores.
  • Credit scores affect whether consumers can get credit and at what price.
  • Those who make all loan and credit card payments on time are likely to have good credit scores.
  • The scores are based on information in credit files housed by the three national credit reporting companies.
"Hispanic Americans can benefit from knowing more about credit scores because these scores affect the availability and costs of car loans, credit cards, mortgage loans, and even electricity and telephones services," said Larry Garcia, president/CEO of the credit union service organization El Paso Credit Union Affordable Housing and leader in the Hispanic America Saves program.

Hispanic America Saves is part of America Saves, a nationwide campaign that encourages consumers to save. America Saves Week begins Sunday. (See related stories, CUs encouraged to take part in America/Military Saves Week in the Washington section and H&FF Radio kicks off America Saves Week in the Consumers section.)

State leaders to Iowa CUs Stay involved

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DES MOINES, Iowa (2/17/12)--Speakers urged Iowa credit unions to stay involved in the political process during the Iowa Credit Union League's annual Legislative Conference Tuesday in Des Moines.

Iowa Gov. Terry Branstad addresses attendees at the Iowa Credit Union Legislative Conference 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 lawmakers.

"You are the people who will make a difference," U.S. Rep. Tom Latham (R-Iowa) told attendees. "If you don't speak on behalf of your issues, no one else will."

Credit Union National Association (CUNA) President/CEO Bill Cheney discussed the member business lending (MBL) cap credit unions face. At a time when banks are withdrawing credit from America's small businesses, credit unions have been expanding credit to small businesses, but with more credit unions approaching the cap, this growth is threatened.

Cheney stressed that Congress should enact legislation that increases the credit union MBL cap to 27.5% of assets from 12.25% for well-capitalized credit unions. Doing so would provide $13 billion to lend to small business owners. Injecting that amount into the economy would create roughly 140,000 new jobs at no cost to the taxpayer, according to CUNA research.

From left, U.S. Rep. Bob Kressig (D-Iowa); Bob Hoefer, Dupaco Community CU, Dubuque; U.S. Sen. Jeff Danielson (D-Iowa); U.S. Rep. Chuck Isenhart (D); and Dave Klavitter, Dupaco Community CU, at the Iowa Credit Union Legislative reception. (Photos provided by Iowa Credit Union League)
Iowa Gov. Terry Branstad discussed the value credit unions provide for small businesses. Last week, during a visit to Unified Therapy Services, an award-winning small business in Dubuque, Branstad praised Dupaco Community CU's role in helping small businesses grow and create jobs.

Iowa credit unions heard from CNN Political Analyst Paul Begala. When asked if the Iowa caucuses would continue, Begala said, "Caucuses in general are getting a black eye, but Iowa is not."

Begala encouraged credit unions to continue to be engaged and involved with the legislative process.

Attendees also had the opportunity to hear from Iowa journalists Dave Price WHO-TV 13 Emily Price of KCCI-TV 8, Kay Henderson of Radio Iowa and Jennifer Jacobs of the Des Moines Register.

CUNA open for federal holiday no INews NowI Monday

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WASHINGTON and MADISON, Wis. (2/17/12)--The Madison, Wis., and Washington, D.C. offices of the Credit Union National Association will remain open Monday for the federal holiday, Presidents' Day .

However, there will be no regular Monday issue of CUNA's News NowNews Now will resume regular publication on Tuesday.

Midstate FCU approves 311K in loans at event

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CARTERET, N.J. (2/17/12)--MidState FCU's "Love Your Loan" event Feb. 10 brought in $311,062 in loans for the day, according to the New Jersey Credit Union League (The Daily Exchange Feb. 16).

Staffers at Carteret, N.J.-based MidState FCU celebrate approving $311,062 in loans during its "Love Your Loan" event Feb. 10.  It was the largest one-day loan total in the credit union's history. (Photo provided by the New Jersey Credit Union League)
It was the largest one-day loan total in the Carteret, N.J.-based credit union's history. In fact, 30 people were waiting outside the credit union before the doors opened, said the credit union.

Rates began at 2.99% at 8:30 a.m. and then increased by 0.50% every half-hour throughout the event. The earlier the member applied, the lower the rate approved. Between 8:30 a.m. and 9 a.m., the credit union saw 41 applications. 

"It was amazing to see so many people waiting to take part in this event before we even opened for the day," said Sean McDonald, director of business development at the more than $20 million asset credit union. "It demonstrates that if credit unions offer services that are attractive to their members and that fill their needs, great things can and will happen," he told the league.

The credit union promoted the event through e-mail blasts to members, in-branch advertising and word of mouth.

Staff also were instrumental in the event's success, said Tracy Sussman, president/CEO."I have to commend the staff for their hard work promoting the event and for their eagerness the day of the loan sale," Sussman said. "Without the staff's cooperation, the loan sale would not have been as successful."