Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

CU System Archive

CU System

Survey: Members Delay Financial Decisions On Life's Big Moments

 Permanent link
WASHINGTON (2/26/13)--Credit union members--especially younger ones--are taking longer to make decisions, causing major purchases and subsequent life events to be delayed, a survey released Monday by TruStage, the consumer brand of CUNA Mutual Group, has revealed.

The survey of more than 1,600 credit union members asked about major financial life events they face in 2013. It focused on the financial decisions members made regarding vehicle purchases, home buying, the birth of a child and planning for college, weddings and retirement.

"When we took a deeper look at the survey results, we were surprised to see that it's taking longer to make major financial decisions and purchases," said Alan Bergstrom, TruStage brand and creative services director. "Given the nature of our fast-paced culture, we anticipated those decisions to happen faster, but the results show many people are actually slowing down and taking more time to plan and decide."

The survey uncovered several generational trends in making major life purchases and decisions. For instance:

  • Generation Y (18-34 year-olds), typically the most connected and tech-savvy demographic, actually takes 18 days longer, on average, to shop for a car than those who are 45-54 years old.
  • People date much longer now before marrying, therefore delaying wedding-related purchases and big life events such as buying a home or a car.
  • Current 18-44 year-olds have underestimated how long it will take to graduate from college, despite rapidly increasing tuition costs and student-loan debt.
  • Retirements are taking longer to reach. For those planning retirement, the expected retirement age is nearly 64 years. For those already retired, the average retirement age was 59 years.
The 18-44 age group--the group underestimating time in college--"is actually attending college at least one full semester longer than they had planned," Bergstrom said. "As a result, the big moments we usually associate with post-graduation--the car buying, weddings and home-buying--are delayed."

The survey also found 18-34 year-olds plan to retire at a significantly older age than preceding generations, with 71% starting to make retirement plans earlier in life--starting, on average, at age 24.

"This presents an opportunity, as our survey indicated this generation considers credit unions to be one of several 'trusted sources' for help in planning retirement," Bergstrom said.

Credit unions should ask some very important questions, he said. "What does this information mean for credit unions?" he asked. "How are economic, social or cultural factors affecting decisions and life event plans? What role does instant access to information and mobile technology play in the decision-making process? When we learn about members' mindsets and behaviors and how they continue to change, we can apply that knowledge to member connections and relationships."

For more information, use the link.

CU System Briefs (02/26/2013)

 Permanent link
  • RALEIGH, N.C. (2/26/13)--SECU Foundation at Raleigh, N.C.-based State Employees' CU has partnered with the NC Rural Economic Development Center Inc. to fund 35 paid internships for college students from rural North Carolina this summer. The four-week internships will go to students who will be sophomores or juniors at state universities or community colleges. The member-funded foundation will contribute $7,500 per participant for the program's costs, with a total initiative cost of $262,500.  Applications will be accepted in March, with interns selected in April, said SECU ...

New York Times: Big Banks Are Allies With Online Payday Lenders

 Permanent link
NEW YORK (2/26/13)--With 15 states banning high-interest payday loans, big banks have become a critical link for online payday lenders who sometimes charge rates exceeding 500%, according to The New York Times.

Although the big banks don't make the loans, they allow automatic withdrawals for payments of the payday loans, which often trigger overdraft fee--even in states that have banned such loans.

The Federal Deposit Insurance Corp. and the Consumer Financial Protection Bureau are examining banks' roles in Internet payday loans, said the article (Feb. 23). The New York State's Department of Financial Institutions is investigating how banks enable online offshore payday lenders to make the loans in New York, which caps the interest rates at 35%.

Credit unions are often noted as lower-cost alternatives to payday loans for members needing to borrow funds short-term, the Credit Union National Association points out. They don't charge exorbitant interest rates, and some tie their programs to loans that put back funds into a savings account as a condition of the loan, helping the borrower build wealth, or they have a financial counseling component.

More payday lenders are setting up business offshore to evade statewide caps on interest rates, but they couldn't do business without giants like J.P. Morgan Chase, Bank of America and Wells Fargo, said the Times.

"In some cases, the banks allow lenders to tap checking accounts even after the customers have begged them to stop the withdrawals," said the Times.

About 27% of payday loan borrowers surveyed by Pew Charitable Trusts say that the loans caused them to overdraw their accounts, forcing fees.

The article points out that the loans are easy to obtain but hard to stop. One Chase customer told the Times she had six Internet loans. When she asked Chase to close the account in March, it kept the account open between April and May. In the meantime the lenders tried to withdraw funds from the account 55 times. Chase charged her $1,523 if fees--44 insufficient funds fees, extended overdraft fees and service fees.

US Rep Braley Backs MBL At League Conference

 Permanent link
DES MOINES, Iowa (2/26/13)--
Click to view larger image At the Iowa Credit Union League's annual Legislative and Regulatory Conference were, from left: Justin Hupfer, league vice president government affairs; Joe Hearn, CEO of Dupaco Community CU, Dubuque; U.S. Rep. Bruce Braley (D-Iowa); and Jim Hagerman,CEO of Linn Area CU, Cedar Rapids.
U.S. Rep. Bruce Braley (D-Iowa) kicked off the Iowa Credit Union League's annual Legislative and Regulatory Conference last week by speaking about the importance of member business lending (MBL).

"I believe the work you do matters," he told more than 100 Iowa credit union representatives convened in Des Moines Feb. 19-20 to learn more about the legislative issues affecting the credit union industry and to interact with their legislators. 

"The people you serve are an important part of our state," Braley said, adding he believes in the value of MBL and thinks there should be enough room for all parties involved. "To me, there should be plenty of room at the table for lenders doing commercial and business lending," he said.

Credit unions, the leagues and the Credit Union National Association are urging Congress to help credit unions make even more business loans by raising their MBL cap to 27.5% of assets, up from 12.25%. Doing so would help boost the economy by generating $14.5 billion in new loans and 158,000 new jobs, says CUNA, all without costing the taxpayer a dime.

Click to view larger image Iowa State University Head Football Coach Paul Rhoads likened building blocks for a team to that of credit unions at Iowa Credit Union League's annual Legislative and Regulatory Conference last week. (Photos provided by the Iowa Credit Union League)
Credit unions also got kudos at the Iowa conference on trust from Iowa State University Head Football Coach Paul Rhoads, said the league.

Rhoads spoke about the importance of building a team with mental toughness, willingness to continuously improve and that have a commitment to teamwork. "Credit unions have a similarity in the building blocks I use for my team. Smart decision makers. Be accountable. Trust." He explained that "You can't accomplish anything without people--especially in credit unions and the work they do for their members."

Also speaking to attendees were CUNA Chief Economist Bill Hampel, who provided the economic outlook for credit unions; Ed Wallace, deputy director of Workforce Development; and Amy Hudson, director of business development for CoOportunity Health.

OMG! One In Three CUs Abandoned Twitter Accounts

 Permanent link
WASHINGTON (2/26/13)--Nearly one in three credit unions that once had an active presence on Twitter have abandoned their accounts, according to a survey released Monday by marketing research firm, The Financial Brand.

The survey does not answer the question of why they've stopped tweeting. However, the numbers give several clues that indicate a Twitter following may not yield the marketing potential that many assume it does.

The credit unions surveyed with still active Twitter accounts averaged about 400 followers, 20% of whom are from inactive or spam accounts.  The average credit union with such accounts added about 100 new followers last year and sent roughly 500 all-time tweets, with 200 of those sent last year.

"While some of the larger banks and credit unions have been able to find traction on the world's No. 2 social media network, the overwhelming majority have enjoyed little to no success," said the company (thefinancialbrand.com Feb. 25).

As a group, credit unions' Twitter audience is about 0.79% of their aggregate membership. In other words, a credit union can expect, on average, one follower for every $1.5 million in assets, or one follower for each 126 members.

In 2011, about 3.1% of the credit unions with accounts resurrected an account they had previously abandoned, only to abandon it a second time.

Many followers of Twitter are "deadwood"--fake followers such as spam accounts or inactive ones.  The average percent of Twitter deadwood for all credit unions is 18.2%, with 4.2% of them fake followers and 14.67% inactive, said The Financial Brand.  Anyone anywhere can follow a financial institution's Twitter account, including social media self-promoters (5% of the deadwood), consultants and industry insiders (another 5%) and other credit unions and banks (5%-15%), it said.

That means the average credit union on Twitter will have potential marketing value from 50% to 60% of their followers.

The survey was conducted during the fall of 2012 and is based on 350 credit unions or roughly 5% of all U.S. credit unions. For more details from the survey, use the resource link.

Leagues Providing GAC Coverage For Folks Back Home

 Permanent link
WASHINGTON (2/26/13)--While News Now and other media and social media channels at the Credit Union National Association are covering CUNA's Governmental Affairs Conference in Washington, D.C., this week, several leagues are generating some GAC buzz on their own, by providing daily videos and other coverage about the activities for the folks back home.

The Michigan Credit Union League's online video portal, CUBE TV, is providing "Live From the GAC" updates each day about the activities, including interviews with league personnel and credit unions. Roughly 125 credit union leaders are attending from Michigan, which the league says is one of the largest delegations from the state in recent years.

The League of Southeastern Credit Unions is podcasting a daily video "LSCU from the CUNA GAC" on its eSignal Weekly for credit unions in Alabama and Florida. Each day it posts a video chronicling the day's events.  LSCU's first video set the stage for the next four days, with two credit union officials talking about what they hope to accomplish this week.  More than 130 credit union officials from Alabama and Florida are attending the GAC.

Several leagues are covering the events for their daily online or e-mail newsletters. The Credit Union Association of the Dakotas brought highlights and photos to its publication, the Memo from Monday's general session and from the CUNA Strategic Services Board meeting.  About 50 CUAD members are participating in the GAC this year--28 from North Dakota and 22 from South Dakota.

The North Carolina Credit Union League's online newsletter The Daily Conversation recaps the Twitter links shared by the league, North Carolina's credit unions and other sources.  More than 80 advocates from 20 North Carolina credit unions are attending.

Also covering the events: the Texas Credit Union League's LoneStar Leaguer, the Pennsylvania Credit Union Association's Life is a Highway, the New Jersey Credit Union League's The Daily Exchange and more.

For CUNA's extensive multimedia coverage, see related story "CUNA To Deliver Extensive On-Site Coverage Of Action-Packed GAC" in Monday's News Now.

To see the Michigan and LSCU videos, use the link.

Pat Wesenberg Is New CUNA Board Chair

 Permanent link
WASHINGTON (2/26/13)--Pat Wesenberg, president/CEO of Central City CU in Marshfield, Wis., was elected Monday as chairman of the Credit Union National Association Board of Directors, during a board meeting at CUNA's Governmental Affairs Conference in Washington, D.C.

"I look forward to working with our board under Pat's leadership as we strive to have more Americans choose credit unions as their best financial partner," said CUNA President/CEO Bill Cheney. "I have always valued Pat's perspective and insight, and the way both are energized by her passionate belief in the ability of credit unions to improve people's financial well-being."

Wesenberg succeeds outgoing board Chairman Mike Mercer, president/CEO of the Georgia Credit Union Affiliates.

Other  newly elected board officers are:

  • Vice Chair: Dennis Pierce, president/CEO, CommunityAmerica CU, Kansas City, Mo.;
  • Secretary: Susan Streifel, president/CEO, Woodstone CU, Federal Way, Wash.;
  • Treasurer: Rod Staatz, president/CEO, SECU of Maryland, Linthicum, Md.; and
  • At-large Member: Pat Jury, president/CEO, the Iowa Credit Union League.
Newly elected board members include:

  • Brad Green, president/CEO, Listerhill FCU, Muscle Shoals, Ala., replacing Laida Garcia, Floridacentral CU, Tampa, Fla.;
  • Bill Mellin, president/CEO, the Credit Union Association of New York, replacing Paul Gentile, former president /CEO, the New Jersey Credit Union League;
  • Troy Stang, president/CEO, the Northwest Credit Union Association, replacing Dennis Tanimoto, president/ CEO, the Hawaii Credit Union League; and
  • Scott Sullivan, president /CEO, the Nebraska Credit Union League, replacing Marla Marsh, president/CEO, the Kansas Credit Union Association.