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CU System Briefs (02/21/2013)

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  • RIVERSIDE, Calif. (2/21/13)--Altura CU, Riverside, Calif., has created a fund to assist the family of San Bernardino County Sheriff Deputy Jeremiah McKay, who was killed Feb. 12 in a shootout with fugitive former Los Angeles police officer Christopher Dorner. Dorner is accused of killing four people in a revenge-style killing spree in Southern California last week. Deputy McKay is survived by his wife, Lynette, a former Altura employee who worked at the credit union for many years; a 7-year-old daughter and 4-month-old son.  "We are deeply saddened by this event," said  Jennifer Binkley, Altura chief operating officer. "Because of Lynette's time with Altura, we feel a special connection to this family and want to help them through this terrible tragedy." Altura seeded the fund with a $5,000 donation and is accepting donations from employees, members and the community at its nine branches and through its Member Services Center at 888-883-7228 …
  • GALESBURG, Ill. (2/21/13)--Two credit unions and a bank in the Galesburg, Ill., area are warning consumers of a scam involving automated phone calls to members/customers asking for account information (The Register-Mail Feb. 15).  They include Gale CU, Bulington Northern CU and Midwest Bank of Western Illinois. The institutions said the callers have more information about the member/customer than with past scams, including bank account numbers and corresponding phone numbers. One call went to Janice Gioannini, an office manager at Burlington Northern CU. It asked her to respond to "problems" with her debit card. Fewer than 25 instances were reported to the institutions, which reminded consumers that their business practices do not include calling member/customers and seeking account information …
  • KANSAS CITY, Kan. (2/21/13)--A Kansas City man was sentenced to 95 years in federal prison for robberies of Education CU in Topeka and another credit union and bank in Leavenworth. Charles Shaw, 55, also was ordered to pay more than $54,000 in restitution.  He also was convicted of trying to rob Education CU a second time. He allegedly fell during the attempted robbery and broke an ankle as he tried to flee, said The Associated Press Newswires and WIBW-AM (Feb.20). He reportedly had five other convictions for armed robbery dating back to 1983 ...
  • PHILADELPHIA (2/21/13)--Philadelphia, which local media say is not known as a bank-robbery town, is seeing a spike in robberies, according to the Federal Bureau of Investigation and Philadelphia Police (Philly.com Feb. 18). Last week, however, robbers hit five city banksin six days, making the total 14 in one month. That compares with 75 attempts each of the past two years.  None of the recent robberies were of credit unions and they all were in different parts of the city and its suburbs. Area members of the FBI Violent Crimes Task Force said the uptick is peculiar, with no serial robber, no organized crew or clear pattern.  A suspect has been identified in one of the robberies …
  • HARRISBURG, Pa.  (2/21/13)--Representatives from the Pennsylvania Credit Union Association and three credit unions met recently with U.S. Rep. Keith Rothfus (R-Pa.) to discuss credit unions and current issues, said PCUA (Life is a Highway Feb. 20). Among those meeting with the freshman congressman were PCUA Director Bill Wehr, CEO of R-S Bellco FCU, New Brighton; Dave Ackerman, CEO of USX FCU, Cranberry Township; and Joe Marzullo, CEO, Washington (Pa.) Area Teachers FCU.  PCUA said Rothfus was attentive and appreciated the briefing. Another meeting is scheduled with Rothfus next week in Washington, D.C., during the Credit Union National Association's Governmental Affairs Conference …

CUs' Mobile Banking Enters Second Generation: Special Report

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MADISON, Wis. (2/20/13)--Mobile banking is here to stay at credit unions. Today, about one-third of all credit unions offer mobile banking. The rest are likely to roll it out within the next 48 months. By comparison, online banking took about twice as long to reach similar numbers.

So says Robb Gaynor, chief product officer of Malauzai Software Inc., a provider of mobile banking applications for community financial institutions, including credit unions, for News Now's special report.

Rob Kimmett, senior vice president of marketing for the Massachusetts Credit Union League and its subsidiary, New England Credit Union Services, discussed the ascendance of the mobile channel in a recent blog post on the league's website.

"Credit unions need to think of the smart phone as an intrinsic part of their checking/debit product," Kimmett wrote. "Someday in the very near future  ... the phone will be the payment device. But for now it is still a part of the product because it manages the account. It is in the member's pocket or bag and the check book and register are collecting dust at home."

Mobile banking is already moving beyond providing members with the ability to make basic transactions to a second generation that includes account management, member engagement and lending functions.

Malauzai will focus on three growth areas in mobile banking during the next six to 12 months:

  • Tablet applications. Malauzai's first client to roll out a mobile banking application for iPad had enlisted 20% of its membership for the application within five days, Gaynor said. "A lot of people have iPads out there, and they love to use them," he added.
  • Smart phone cameras. As many as 25% of members who enroll in mobile banking use remote deposit capture when it is offered, Gaynor said. Malauzai also has rolled out Picture Pay, through which credit union members take a photo of a bill statement, confirm the amount to be paid and submit the payment to the credit union digitally. "The camera is going to shine this year," Gaynor said.
  • Mobile employees. Increasingly credit union employees will employ mobile apps internally to enlist new members and perform teller transactions, Gaynor said. Supervisors will also use mobile apps to perform the "override" function required on many teller transactions.
First Financial CU, Chicago, offers loan applications through a mobile application from CU Mobile Apps, a subsidiary of Member Service Corp. Members can view and sign their documents using their smart phones. About 1,000 members downloaded the app within 30 days of its roll out, Patrick Basler, president/CEO of the $60 million credit union told News Now. The credit union approved 67 mobile applications during a personal loan special the week of Black Friday.

"The reason I emphasize mobile technology is because it allows a small shop like mine to compete with the Bank of America and Wells Fargo," Basler said. "Mobile levels the playing field for credit unions."

Credit unions also are beginning to employ the mobile channel to market to their members. Members receive targeted advertisements and can click through to learn more about offers. These ads can have a click-through rate as high as 10% to 12%, Gaynor said.

The reason for that high rate is obvious for anyone who has sat in an airport or coffee shop and saw the high percentage of people with their eyes glued to their phones, said Rick Hargis, president/CEO of Member Service Corp.

"This is the single best opportunity in my lifetime to reach the member," Hargis said. "They have got to see that message. And the credit unions have the advantage of working from a position of trust with their members."

Kid's CU Tracks Students' Fin Ed Progress Through School Years

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Southern Chautauqua FCU President/CEO John Felton talks to students at a local school about the Kid's Credit Union program and how they can graduate high school with $10,000 by meeting yearly savings goals. Candy White, Kid's Credit Union coordinator,  is standing behind a table, with $10,000 in cash on display.
LAKEWOOD, N.Y. (2/21/13)--Southern Chautauqua FCU in Lakewood, N.Y., has expanded its "Kid's Credit Union" financial education program by more than 200% in area schools last year.

The National Credit Union Foundation provided the $59 million asset credit union a grant to cover the cost of materials for the program. 

"The vision of the credit union is to strengthen students' financial position so they will have a positive impact in the workforce after high school and become the community's bright future," said John Felton, Southern Chautauqua president/CEO. "The best way to affect the future is to teach a child the value of saving money and rewarding them for their efforts."

The program begins by providing financial education to second graders in Southern Chautauqua FCU's community and follows participants through to their graduation in high school. They have yearly goals, with the end-goal to graduate with a balance in their accounts of more than $10,000.

"Educating youth on the importance of saving and being financially savvy is critical," said Lois Kitsch, NCUF national program director. "Southern Chautauqua FCU's Kid's Credit Union program is a great mix of financial education with an attractive savings product."

Click to view larger image A billboard advertises Southern Chautauqua FCUs' Kids Credit Union program around New York. (Photos provided by the National Credit Union Foundation)
Kid's Credit Union is a 10-year project, educating students about Southern Chautauqua FCU's  "Save First" philosophy. Kid's Credit Union was established in 2005 at two elementary schools. Today, the credit union works with six area elementary schools in low-income-designated areas.

Southern Chautauqua uses its own financial education curriculum in the schools, and employees teach the lessons. It also donates piggy banks to get students started saving.

One major difference in the program is in the structuring of students' accounts as certificates. Participants receive a schedule so they see how their money will grow through the 10-year process.  As the end of the school year nears, students receive reminders about the amount in their account and the amount needed to achieve their goal for that year.

Southern Chautauqua FCU is set to expand to another area school soon.

CUAD Broadcast, Cheney Showcase CU Difference, Issues

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BISMARCK, N.D. (2/21/13)--The credit union difference and the Credit Union National Association's role in promoting it and other credit union legislative issues were discussed Tuesday by CUNA President/CEO Bill Cheney, who was a guest on a Credit Union Association of the Dakotas-sponsored "Legislature Today" podcast. 

Cheney said CUNA is trying to get credit unions exempted from regulations in many cases because "no one has to protect consumers from credit unions," he said, quoting former U.S. Rep. Barney Frank.

Maintaining the federal income tax exemption for credit unions is on top of CUNA's list of priorities this year, along with regulatory relief and some charter enhancements, Cheney added.

"A tax on credit unions isn't a corporate tax, but a tax on 96 million working credit union members," he said regarding the credit unions' exemption. "Congress, I believe, doesn't want to tax middle-class Americans." 

Show host Dale Wetzel asked Cheney about current credit union national membership trends.

"Credit unions have seen substantial growth in the past year sparked by Bank Transfer Day … on Nov. 5, 2011," Cheney said. "Bank Transfer Day shed light on credit unions and that they don't charge all the fees that banks do. It resulted in lots of media, consumer and small-business interest in credit unions. In the past 15 months, credit unions have seen the most growth they have in the past 15 years."

Since BTD, two-and-a-half million people have joined credit unions, and three million checking accounts have been opened at credit unions nationwide, he said. 

Why? "Because credit unions are a better deal," Cheney explained. "The growth is continuous and is accelerating." Word of mouth and social media have helped spread the word, he added.

What makes the credit union option truly different is that every member is on equal footing--with one member, one vote--so everyone has a say in the operation of a credit union and how it treats its members--which is different than how banks operate, Cheney explained.      

When asked about the financial shape of credit unions today, Cheney replied that while the financial crisis was tough on everyone, credit unions went into it well-capitalized, didn't engage in predatory lending practices and did not make loans that contributed to the crisis. Therefore, credit unions weathered it better than most financial institutions. Since then, they have climbed back on their feet with a quick recovery, he added, citing a key statistic

"Credit unions saw an increase in business lending of 45% during the financial crisis on a national level, while banks decreased lending by 15%," Cheney said. "Credit unions filled a void when they were most needed by consumers and small businesses."

Regarding new financial regulations, Cheney said their effects on credit unions have been huge. "Every dollar a credit union has to spend in compliance costs is a dollar they can't spend to help members,"  he explained. "It is a costly and serious issue."

To hear the podcast, use the link.

Lending Spurs Wis State CUs' Highest ROA Since 2003

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MADISON, Wis. (2/21/13)--Wisconsin state-chartered credit unions reported an average return on assets of 1.0% in 2012, the highest since 2003, the Wisconsin Department of Financial Institutions (DFI) reported Friday.

Earnings increased more than 81% over 2011 to $225.7 million.

The results were driven by a strong lending market and improved delinquency rates, said Brett Thompson, president/CEO of the Wisconsin Credit Union League.  Wisconsin credit unions' loan ratio of 1.36% was the lowest since 2007.

"Credit unions have picked up their lending, and when you see an increase in the loans you are making and a reduction in loan losses, you create greater income, and that's exactly what you are seeing here," Thompson said. "A big part of that is in the mortgage area. With rates being low, credit unions are doing more mortgage loans, some of which they are selling to the secondary market."

In the 12 months ending Dec. 31, Wisconsin's 187 state-chartered credit unions:

  • Achieved a net worth ratio of 10.25%, the highest since 2008;
  • Grew assets by 6.6% to $23.4 billion; and
  • Reduced provisions for loan losses by 21.5%.
A full report on the 2012 performance of Wisconsin credit unions will be available on the DFI website later this month.

Municipal Deposits, Other CU Bills Introduced In NY

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ALBANY, N.Y. (2/21/13)--Bills that address municipal deposits, robbery penalties and inclusion in New York's Banking Development District (BDD) Program have been introduced in the state legislature, as the Credit Union Association of New York continues to advance credit unions' state legislative agenda for 2013.

Companion bills that would allow New York municipalities to make deposits into credit unions and savings banks up to the deposit insurance limit per deposit (currently $250,000) were introduced in the state Senate and Assembly, said CUANY.

Senate Bill S.3161 was introduced by Sen. Jack Martins (R-Long Island) and was referred to the Senate Local Government Committee. Assembly Bill A.4520 was introduced by Assemblyman Harvey Weisenberg (D-Long Island) and was reported to the Assembly Banks Committee. Both legislators introduced similar bills in 2012.

An additional municipal deposits bill, A. 1112, was introduced by Assemblyman Carl Heastie (D-Metropolitan) last month and was referred to the Assembly Banks Committee, said CUANY.

Legislation to increase the penalty for robbery of property from a financial institution was introduced  in the Senate by Sen. Joseph Griffo (R-Utica-Rome) and referred to the Senate Banks Committee.  S.3559 would make the crime a class C felony.  The bill is a companion to A. 2485, introduced last month by Assemblyman Charles Lavine (D-Long Island).

Additional robbery legislation (S.3039) provides that the threat of using a firearm or explosive device during a robbery would constitute robbery in the second degree. It  was introduced by Sen. John Bonacic (R-Catskill-Hudson/Southern Tier) and referred to the Senate Codes Committee.

In the Senate, S.3569, which authorizes credit unions to participate in the Banking Development District Program, was introduced by Sen. Malcolm Smith (D-Metropolitan) and referred to the Senate Banks Committee. A similar bill, A.4555, was introduced by Assemblyman Dennis Gabryszak (D-Buffalo) and referred to the Assembly Banks Committee.

Also, companion bills that would enable low-income credit unions in cities with one million or more in population to participate in the BDD program were introduced in both the Senate and the Assembly, said CUANY.

According to the New York City Comptroller's office, the BDD program establishes bank branches in geographic locations where there is a demonstrated need for banking services and authorizes municipalities to deposit funds at below-market rates into bank branches located in the BDD.

Nebraska's 'Save To Win' Grand Prize Winner Announced

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KEARNEY, Neb. (2/18/13)--The Nebraska "Save to Win" $25,000 Grand Prize has been presented to KEE FCU member Laverne Brickner, announced the Nebraska Credit Union League.

Click to view larger image Laverne "Vern" Brickner, third from left, a member of KEE FCU, Kearney, Neb., is the $25,000 Grand Prize winner of the Nebraska Credit Union League's Save to Win program. At the check presentation were, from left:  league President/CEO Scott Sullivan; KEE FCU President/CEO Cheryl Montgomery; Brickner;  his wife DeAnn Brickner; Marion McDermott of the Kearney Chamber of Commerce; Kearney City Councilman Bob Lammers; and state Sen. Galen Hadley. (Photo provided by the Nebraska Credit Union League)
Brickner was among 1,643 credit union members across the state who participated in the program. During 2012,  Save to Win accounts opened saved more than $1.97 million, averaging about $1,200 per account.

"I want to thank credit unions for offering this program, which helped me save and helped all those members to save across the state," Brickner said at the check presentation.  He said he and his wife plan to use a part of the winnings to remodel their home.

On hand for the presentation were league President Scott Sullivan, State Sen. Galen Hadley (NP-Dist. 37) of Kearney, Kearney City Councilman Bob Lammers, Kearney Chamber of Commerce representative Marion McDermott, and KEE FCU President CEO Cheryl Montgomery.  KEE FCU is located in Kearney.

"The grand prize certainly changed the life of Mr. Brickner and his family, but we also believe it can help to change the lives of all participants in a positive way by helping them to begin saving or escalate their current savings habits," said Sullivan.

In addition to the $25,000 Grand Prize, Nebraska's Save to Win also awarded $18,000 total in monthly cash prizes throughout the year. For every $25 members deposited, up to $250 monthly, in their Save to Win account, their name was entered into the monthly drawing.

Ten credit unions from Omaha, Lincoln and Kearney began offering the savings program in 2012 by offering one-year share certificates or certificates of deposit, which the member could open with $25 and build by depositing into the account throughout the year.

The program was first launched in 2009 by the Michigan Credit Union League in partnership with Doorway to Dreams, the Filene Research Institute and eight Michigan credit unions. In 2011, the Nebraska Legislature passed legislation to allow Nebraska credit unions to offer a similar program. Throughout 2012, Michigan and Nebraska were the only states of offer Save to Win programs to credit union members.

The program's goal "is to show our members that building a savings nest egg is possible even in small amounts and that saving doesn't have to be boring, but rather, it can and should be fun," said the league's Sullivan.

Conn League: State Foreclosure Mediation Bill Adds Burden

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MERIDEN, Conn. (2/21/13)--The Credit Union League of Connecticut testified Tuesday before state lawmakers that a bill on the foreclosure mediation process would add unnecessary levels of mandated bureaucracy in the foreclosure and mediation process.

In a Connecticut State General Assembly hearing, league President/CEO Tony Emerson testified on behalf of the 125 state- and federally chartered credit unions that would be affected if the measure passes in its current form.

"The bill prescribes certain actions that may hinder the processes already used by credit unions as they diligently work to help their members remain in their homes," Emerson said.

"In addition, there may be 'unintended consequences' in the form of added provision expenses, resulting in unnecessary incurred expenses that would further deteriorate the bottom lines of a fragile, but slowly recovering economy," he said.

The bill was introduced to attempt changes in the mediation process of foreclosures, but one of its provisions would extend the process. As a result of testimony at the hearing, the committee is considering ways to amend the legislation, the league said.

Measures involving the foreclosure mediation process have cropped up in several cities and states and in congressional committees as a result of practices of mortgage originators and servicers during the housing crisis.

CSS Provider LendKey To Raise Hurricane Sandy Funds At GAC

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NEW YORK (2/21/13)--Cloud-based lending services provider LendKey (formerly Fynanz) will raise funds for credit union victims of Hurricane Sandy at this year's Credit Union National Association Governmental Affairs Conference (GAC).

Click to view larger image Click for larger view
LendKey is CUNA Strategic Services provider.

"The destruction caused by Hurricane Sandy was devastating to the New York City area," said LendKey CEO Vince Passione. "Our employees, and many of our clients, are residents in some of the hardest hit areas of New York and New Jersey. Their perseverance and dedication to their communities inspired us to match their courage with action."

Based in New York City, LendKey has strong ties to the East Coast victims of last fall's Hurricane Sandy. The company has pledged to raise donations for the storm's victims through the National Credit Union Foundation's CUAid.coop disaster relief fund, the only national online disaster relief fundraising center for credit union staff, volunteers and members.

LendKey will donate $5 for every business card posted on its booth's "Goodwill Wall" at Booth No. 347 at the GAC Feb. 24-28, in Washington, D.C.