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CU System Briefs (02/27/2013)

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  • RALEIGH, N.C. (2/27/13)--State Employees' CU is developing a new property management subsidiary--SECU*Real Estate (SECU*RE), announced its board Tuesday. In its initial start-up phase, SECU*RE will provide SECU with the ability to streamline management of real-estate owned (REO) properties in North Carolina.  It will take the Raleigh, N.C.-based SECU's existing REOs and work to minimize lost equity through property revitalization efforts and partnerships with the North Carolina housing industry. Its service options will range from rentals to property listings, and its ultimate objective will be to provide affordable homeownership opportunities to SECU members and their families throughout the state. The new company complements SECU's ongoing Mortgage Assistance Program, which has helped more than 8,000 families avoid foreclosure …
  • NEW YORK (2/27/13)--The National Federation of Community Development Credit Unions' second edition of its new quarterly e-magazine, The Bridge, focuses on opportunities from serving immigrant populations within a credit union field of membership. In it, the federation encourages credit unions to consider products, services and strategies to reach immigrant populations.  The cover story looks at immigrants' economic contributions in America, the role they play in their communities and the opportunity for credit unions. It also includes a brief legal background on the state of the Deferred Action for Childhood Arrivals program, a need for a loan fund that serves young immigrants and the role credit unions could play. It highlights four credit unions reaching out to immigrant communities. Also in the edition, Bill Cheney, president/CEO of the Credit Union National Association, reminds readers of a shared vision that embodies the credit union movement based on value and trust, and points to the collective potential of credit unions to become America's most trusted financial partner …

NCUF's Wegner Awards Go To Craig, Hoosman, CU Miracle Day

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Click to view larger image National Credit Union Foundation Chairman Laida Garcia and Vice Chairman John Radebaugh present Rick Craig (right), retired president/CEO of America First FCU, Riverdale, Utah, with the Herb Wegner Award for Lifetime Achievement.

WASHINGTON (2/27/13)--The National Credit Union Foundation presented three Herb Wegner Memorial Awards at its annual dinner Monday night at the Credit Union National Association's Governmental Affairs Conference in Washington, D.C.  

The event celebrated three of the highest national honors in the credit union movement:

"I am appreciative of the support and guidance that senior managers and the rest of the America First FCU team gave in insuring that we focused on the needs of the membership, especially during the Great Recession," Craig said after accepting his award. "What lawmakers permit or prohibit will be the rules under which credit unions will operate, so please become advocates for credit unions with Congress and state legislatures. Your credit union and its ideals are worth fighting for."

  • Lifetime Achievement: Rick Craig, retired president/CEO of America First FCU, Riverdale, Utah;
  • Individual Achievement: Hubert H. Hoosman Jr., president/CEO of Vantage CU, Bridgeton, Mo.; and
  • Outstanding Program: Credit Union Miracle Day.

Craig became executive vice president at America First FCU in 1977. In 1997, he was appointed president/CEO. In addition to the credit union's many community activities, Craig is regarded a leader in adopting new technologies at America First FCU to benefit members and make managing money easier. America First FCU also participates in the Member Loyalty Group, which consists of large credit unions nationwide using the Net Promoter survey score. America First FCU consistently leads the group in the highest scores from its members.

Hoosman, during the past 30 years, has held several management positions, including loan department manager, branch manager, and vice president of operations and executive vice president, before becoming president/CEO of Vantage CU in 1994. When Hoosman started his career at the credit union in 1982, the asset size of the credit union was $34 million. Today, Vantage CU is the fourth-largest credit union in Missouri, with assets approaching $700 million. Hoosman took the lead nationally with credit unions in helping to recognize Dr. Martin Luther King Jr. by raising funds for a national monument which now stands in Washington, D.C.

Click to view larger image Hubert Hoosman, president/CEO of Vantage CU, Bridgeton, Mo., speaks after accepting the Herb Wegner Award for Individual Achievement.

Credit Union Miracle Day (CUMD), through its family of races benefiting Children's Miracle Network Hospitals, has made a significant impact in the credit union industry, said NCUF. CUMD is the largest national credit union event for Credit Unions for Kids, a nonprofit collaboration of credit union organizations engaged in fundraising activities to benefit the hospitals. CUMD started with the 2002 credit union sponsorship of its now flagship event, the Credit Union Cherry Blossom Ten Mile Run in Washington, D.C. Last year, CUMD expanded its cause to a family of races benefiting children's hospitals through Credit Unions for Kids. To date, Credit Union Miracle Day has generated more than $5.5 million for 136 Children's Miracle Network Hospitals nationwide.

This year's winners will join a group of 49 individuals and 23 organizations whose efforts during the past 25 years have earned them the recognition of Herb Wegner Memorial Awards. More than 830 credit union leaders and supporters attended Monday night's dinner in conjunction with CUNA's GAC.

Click to view larger image Juri Valdov, Credit Union Miracle Day chairman, speaks after accepting the Herb Wegner Award for Outstanding Program.  (Photos provided by the National Credit Union Foundation)

Iowa League To Develop Innovation Group

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DES MOINES, Iowa (2/27/13)--The Iowa Credit Union League is seeking 15 innovative credit union professionals for its new Iowa Innovation Group to help build the future of credit unions.

The league is collaborating with the Filene Research Institute on the program, which will be exclusively for Iowa credit unions.

"We feel there is no better time for the Iowa system to make this investment," said Jim Niederhauser, vice president of Member Services at ICUL. "Innovation is such a critical approach on a number of levels, but ultimately it's concentrating resources for our future sustainability and success."

The 15 innovators should be innovative, insightful and energetic credit union professionals with substantial responsibility, be passionate about the credit union system and constantly envision ways to help credit union members.

"While the recruitment focuses on credit union senior managers who are on a career path toward CEO status, the opportunity is ripe for high potential employees who are committed to professional development, developing an innovation competency, and contributing to transformational change for credit unions at this exciting historic time," said Neiderhauser.

The program is modeled after Filene's i3 program and will use Filene's "Method of Innovation," with coaching from Filene's staff.  Participants will reveal their work at the Iowa Credit Union Annual Convention Sept. 18-20 in Des Moines.

"Over the past decade, Filene has helped develop a proven methodology for innovation that has helped transformative financial services ideas get off the ground," said Matt Davis, Financial innovation director. "ICUL's desire to put this curriculum to work for the citizens of Iowa proves, as they have time and time again, their dedication to improving consumers' lives through credit unions," he added.

Applications are due March 1. Selections will take place by March 15. For more information, use the link.

BofA Made Mistake On Fee, Cheney Tells Bloomberg News

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WASHINGTON (2/27/13)--Bank of America--the bank that started the Bank Transfer Day movement in September 2011 when it proposed a $5 fee on debit cards--made a mistake by introducing that fee, Bill Cheney, president/CEO of the Credit Union National Association, told Bloomberg News.

"Clearly, it was a strategic error, especially since they backed down from it," Cheney said in an article, which centered on a number of gaffes made by the bank's executive management, gaffes that the bank is still recovering from. Cheney was the only credit union system executive interviewed in the article.

The article pointed out that credit unions "were among the beneficiaries of [BofA CEO Brian] Moynihan's missteps, gaining 650,000 new account holders in the month after the $5 fee was announced."  It also noted that "Moynihan hit his nadir with the debit-card fee, which was seen as a move by greedy bankers to reach further into consumers' wallets."

The decision to charge the fee, said the article, "was met with protests at branches from Los Angeles to Boston." Thousands closed their accounts. Five weeks later, the bank reversed its decision.

The article also addressed customer dissatisfaction at the bank.  "Rather than court new customers, Bank of America's strategy is to wring more profit from existing ones, soliciting checking-account holders for mortgages, credit cards and investments. That's easier when people appreciate the job you're doing for them. The bank had the lowest customer satisfaction of the four biggest lenders in 2012," the article said, quoting the Ann Arbor, Mich.-based American Customer Satisfaction Index.

Credit unions were the top-rated institutions on that index. And the Bank Transfer Day surge, which urged consumers disgruntled with bank fees to switch to a credit union or local institution, helped prompt a gain of 2.2 million new member accounts at credit unions.

The article, "BofA Surge Affirms Buffett Bet as Moynihan Recovers From Gaffes," appears in Money News ( Feb. 26).  For the full article, use the link.

Full Speed Ahead For Health Care Reform Compliance, GAC Told

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WASHINGTON (2/27/13)--Credit unions can prepare for moving full speed ahead on complying with the new health care reform mandates, including those going into effect later this year and beyond, a CUNA Mutual Group product executive told a breakout session audience at the Credit Union National Association's Governmental Affairs Conference.

The presidential election's outcome and the U.S. Supreme Court's June decision to uphold the Affordable Care Act  (ACA) should signal a green light for employers--including credit unions--to  do this, said Brad Pricer, senior manager, Employee Benefits Product Management.

"Requirements are already in place, and more are slated for 2013 and 2014, which may require action by health plans, including the distribution of Summary of Benefits and Coverage and Exchange Notice Requirements to employees," Pricer said. He told the group that the U.S. government also had taken a wait-and-see approach but is now moving ahead with a spate of proposed regulations and clarifications for employers to comply with related to the ACA

The Department of Labor has started auditing health care reform compliance, although to what extent is unclear. "I have yet to hear of a credit union that has actually been audited, but now is the time to rely on your broker or consultant to stay on top of the flurry of information coming from the government," Pricer added.

As employers, credit unions have the option to sponsor health plans for employees due to the ACA's individual mandate, but they will have to pay a penalty under "Play or Pay" provisions if they choose not to offer coverage. The penalty tax will apply to certain businesses that do not offer health insurance to their employees at certain levels of coverage and affordability, or do not offer it at all.

"As more details emerge on Play or Pay penalties and how they may be calculated, it's important credit unions understand what effect this may have on them if they don't offer certain levels of coverage deemed 'affordable' under healthcare reform," Pricer said.

Enough information exists that a credit union can estimate if its current plan puts it at risk of incurring Play or Pay penalties. Pricer urged all credit unions to use CUNA Mutual Group's free calculator on its website to assist them in this analysis. Use the link.

He also recommended attendees look for potential opportunities with health care reform, such as shifting to a defined contribution approach for funding a health plan. Such an approach is made easier when combined with offering coverage through a private health exchange. "This moves the risk of incurring high health care costs from employers to employees and is similar to the previous shift with retirement plans. You may find this enables you to better plan health care costs year over year."

Public exchanges also are playing catch-up following the elections. How each will operate, and the quality of the experience for those enrolling through them, is likely to vary state-to-state, he noted.

Credit unions looking to maintain an "employer of choice" strategy in attracting and retaining talent will likely not want to stop offering coverage to employees (leaving them to buy through the public exchanges) , he said. Surveys show most employers will not drop coverage.

Health care coverage could become a deciding factor for individuals in choosing their place of employment. If a credit union no longer provides health coverage, wages for employees likely will need increased, as providing health care is considered a part of employees' compensation.

The bottom line is a credit union's decision to offer health care coverage will likely be driven by affordability and whether it embraces the philosophy of being an employer of choice to recruit and retain the best available talent.

Pricer urged the audience to stay informed about ACA requirements for 2013 and how to best form an appropriate strategy by visiting CUNA Mutual's webpage on Health Care Reform  for timelines, legislative briefs, model notices and forms. Use the link.

CUNA Mutual Contributes $135K To NCUF

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WASHINGTON (2/27/13)--CUNA Mutual Group Monday presented a $135,000 check to the National Credit Union Foundation to support the organization's general fund and for Credit Union Development Education.

The check was presented prior to NCUF's 2013 Herb Wegner Memorial Awards Dinner Monday night at the Credit Union National Association's Governmental Affairs Conference in Washington, D.C.

"The NCUF's renewed focus on consumer financial education, training of Credit Union Development Educators and its outreach to the young and elderly to help prepare them for their future or retirement aligns closely with CUNA Mutual Group's mission," said Jeff Post, CUNA Mutual president/CEO. "We are pleased to support an organization that devotes so much energy to develop and strengthen the credit union movement."

As the movement's charitable arm, NCUF funds projects that support industrywide development initiatives--including financial education to consumers of all ages, disaster assistance, greater access to affordable financial services--and empower more consumers to save, build assets and own homes.

"CUNA Mutual Group has been constant in its support of NCUF over the years," said Wendell "Bucky" Sebastian, NCUF executive director. "Our work to help improve consumer financial independence would not be possible without the continuing support of organizations like CUNA Mutual Group."

Renewed Interest In Credit Up, Market Cards More--CO-OP, TMG

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RANCHO CUCAMONGA, Calif. (2/27/13)--Now that consumers have renewed their interest in credit, credit unions should market their credit cards more aggressively, say CO-OP Financial Services and The Members Group (TMG).

"We are seeing renewed momentum for credit card usage," said Shazia Manus, TMG's CEO. "Balances are going up, credit lines are increasing, and so credit unions should be consistently marketing their credit cards to their members to remain competitive financial service providers."

"Credit and debit transactions drive non-interest revenue at credit unions," said Stan Hollen, president/CEO of CO-OP Financial Services. "If we focus on a few key priorities, credit unions can grow both debit and credit in 2013. As consumers look to deepen card usage, we can strengthen member relations by providing the convenience of these payment options."

CO-OP and TMG, which provide credit card transaction processing programs and other payment solutions to the credit union industry, will host a webinar March 20 at 12:30 p.m. PT about the debit/credit outlook.  Findings they will present include:

  • Consumers racked up $53.5 billion in credit card debt in 2012--five times what they accumulated in 2010, according to TRK Advisors.
  • Credit union card balances are up 4.6% since November 2011, according to CUNA Mutual Group. That compares with growth of 0.4% for the rest of the market.
  • Charge-offs have declined to less than 3%, says TRK Advisors.
  • Managing risk continues to be a challenge, but as the economy improves, so does the credit outlook for consumers.
CO-OP and TMG say credit unions can capitalize on the growing credit market by:

  • Increasing credit lines for responsible credit users who try to keep their card use under 30% of their total lines of credit;
  • Adding products that address credit-bruised consumers--a classic approach for credit unions;
  • Promoting credit to debit card holders and checking accounts to credit cardholders in a move to become the cardholders' primary financial  institution; and
  • Winning business with balance transfer offers.

Federation Roundtable Shows Benefits Of CDFI Certification

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WASHINGTON (2/27/13)--More than 42% of current Community Development Fund Institution (CDFI)-certified credit unions must resubmit their recertification applications by April 1, announced the National Federation of Community Development Credit Unions Monday at its CDFI Roundtable.

The roundtable was held in conjunction with the Credit Union National Association's Governmental Affairs Conference in Washington, D.C.  The federation's event addressed the benefits and process of becoming a certified CDFI and explored new programs, long-term investment prospects from the fund, and opportunities to shape the fund's agenda moving forward.

Ninety-four of the 221 current CDFI credit unions will need to submit the applications, said the federation. The federation has provided a list of credit unions that must resubmit on its website. Use the link.

Jodie Harris, senior advisor to the director of the CDFI Fund, told the group that with the tremendous growth in the number of low-income designated credit unions, the CDFI Fund anticipates the number of CDFI-certified credit unions to "go up immensely."

She commented on the fund's coordination with the federation to streamline the certification process for eligible credit unions. Harris also spotlighted CDFI Fund's grant programs and noted the "large increase in the number of credit unions receiving grants" in recent years.

Regarding streamlining the CDFI Fund's certification process, Pablo DeFilippi, the federation's  director of membership, said, "We've made tremendous progress in this front with the acceptance of our random methodology to demonstrate target market eligibility," adding "we are very pleased with their recognition of the unique governance structure of credit unions that makes them directly accountable to their target market."

Federation President/CEO Cathie Mahon noted the work the organization has done to ensure that essential financial services  that credit unions provide to low-income communities are recognized by the fund in its certification and grant-making process.

Credit unions attending also heard from several credit unions about assistance they received from the federation's CU Breakthrough consulting services in obtaining certification and grant support and about how they are using their CDFI Fund grants.

CUNA's GAC ends Thursday in Washington, D.C.

Click to view larger image The National Federation of Community Development Credit Unions has worked closely with the CDFI Fund to streamline its application process, said Pablo DeFilippi, the federation's  director of membership, at the federation's CDFI Roundtable held Monday in conjunction with the Credit Union National Association's Governmental Affairs Conference in Washington, D.C.  (Photo provided by the National Federation of Community Development Credit Unions)

Latino Network Honors Cheney, Williams

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WASHINGTON (2/27/13)--

Click to view larger image CUNA President/CEO Bill Cheney, fourth from left, poses with Network for Latino Credit Unions and Professionals (NLCUP) board members after receiving NLCUP's Leadership & Vision Award.

Hispanics are critical to the future growth of the nation's credit unions, according to Credit Union National Association President/CEO Bill Cheney.

Cheney spoke Tuesday at the annual networking reception sponsored by the Network for Latino Credit Unions and Professionals (NLCUP) at the Hall of the Americas in Washington, D.C.

Cheney was the recipient of NCLUP's 2013 Leadership & Vision Award.

He noted that the importance of ethnic diversity has been apparent during his entire career in the credit union movement, beginning in his hometown of San Antonio and continuing during his days as a credit union CEO and then as CEO of the California and Nevada credit union leagues.

"Last fall's presidential election was a clear indication of how strong a presence Hispanics now have," said Cheney. "And you can see the future by simply looking at diversity of school children across America."

Joining Cheney as an award recipient was Iowa Credit Union League Chief Operating Officer Murray Williams, who received NLCUP's Leadership & Support Award.

Murray spoke of the late Warren Morrow, the founder of the league's Hispanic consulting subsidiary,Coopera Consulting, and of the passion and vision Morrow had for credit unions and the important role they must play in building wealth in Hispanic communities.

Williams was instrumental in creating the partnership between CUNA and Coopera and the emerging partnership between those two organizations and NLCUP.

Speakers at the event included U.S. Reps. Eleanor Holmes Norton (D-D.C.) and Pete P. Gallego (D-Texas).

The luncheon was sponsored by CUNA's Hispanic Outreach Committee and Coopera Consulting.

NLCUP's event was held in conjunction with CUNA's Governmental Affairs Conference, which is meeting this week in Washington, D.C., and which will include 4,200 credit union representatives visiting their legislators on Capitol Hill this afternoon and Thursday.

Click to view larger image Murray Williams (second from left),  chief operating officer at the Iowa Credit Union League, receives the Network of Latino Credit Unions and Professionals (NLCUP) 2013 Leadership and Support Award from NLCUP Board Member Maria Martinez, while members of the NLCUP board look on. (Photos provided by CUNA)