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CU System briefs (02/29/2008)

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* ABERDEEN, Md. (3/3/08)--Aberdeen Proving Ground FCU has been named No. 1 in Maryland for youth financial literacy efforts by the National Youth Involvement Board (NYIB). In 2007, the credit union delivered 226 financial presentations to more than 4,500 students across Harford and Cecil Counties. The $621.5 million asset credit union also ranked in the Top 10 in the nation of the total number of students reached and presentations delivered … * EDMONTON, Alb. (3/3/08)--The boards of three Alberta, Canada, credit unions have separately and unanimously agreed to a merger that would make the combined credit union one of the largest in Canada, with $8.58 billion in assets. The board chairs of Servus Credit Union, Common Wealth Credit Union and Community Savings made the announcement Wednesday. The credit unions' members will vote on the merger at separate meetings this month. The resolution requires two-thirds majority support from those attending. The merged credit union would serve 357,000 members in 63 communities throughout the province and employ 1,925 people. Canada's largest credit union, Vancouver City Savings, has $12.3 billion in assets, 2,300 employees and 57 branches ( Feb. 29) … * VANCOUVER, B.C. (3/3/08)--Vancouver City Savings CU, Canada's largest credit union, said its net margin dropped 37% in 2007 and was down 50% from record earnings in 2004. Last year it earned $28.3 million, down from $45.3 million in 2006. The drop was due partly to a $13.9 million write-down of non-bank asset-backed commercial paper owned by its subsidiary, Citizens Bank of Canada, which held $77 million in those investments. Still, assets reached record levels of $14.1 billion, up 14.8% from $12.3 billion in 2006 (Vancouver Sun Feb. 28) … * MICHIGAN CENTER, Mich. (3/3/08)--A former vice president and chief financial officer of a Michigan Center credit union was charged with embezzling more than $339,000 from the credit union. Terry L. Brandt, 56, is accused of wiring money last year and this year from the general account of Cascades Community FCU to his personal investments accounts to cover stock market losses. No members were affected by the theft. Brandt is charged with two felonies: embezzlement of more than $100,000 and embezzlement from a financial institution. If convicted he faces up to 20 years in prison ( Feb. 29) …

CDCU selected to launch America Saves Week in NYC

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NEW YORK (3/3/08)--Neighborhood Trust FCU last week hosted a press event to help launch America Saves Week, an effort aimed at encouraging more institutions and individuals to save, reduce debt and build wealth.
From left: Robert V. Hess, New York City Department of Homeless Services commissioner; Lisa Mensah, executive director of the initiative on financial security at the Aspen Institute; Justine Zinkin, Neighborhood Trust FCU executive director; Elvira de la Cruz, Neighborhood Trust FCU member; and Jonathan Mintz, New York City Department of Consumer Affairs commissioner, promoted last week’s America Saves Week in New York City. (Photo provided by the National Federation of Community Development Credit Unions)
Neighborhood Trust is a $7.2 million asset, community development credit union (CDCU) serving the mostly low-income and immigrant community of Washington Heights in New York City. Organized by the Initiative on Financial Security and the Aspen Institute--an America Saves national partner--the press conference included remarks from Jonathan Mintz, New York City Department of Consumer Affairs commissioner; Robert V. Hess, New York City Department of Homeless Services commissioner; Lisa Mensah, executive director of the initiative on financial security at the Aspen Institute; Justine Zinkin, Neighborhood Trust FCU executive director; and Elvira de la Cruz, a member of Neighborhood Trust. Zinkin highlighted the importance of CDCUs in helping low-income New Yorkers save for the future, and cited members like de la Cruz for their efforts. “Opportunities to save, establish credit, and access capital are critical for families seeking to escape poverty,” Zinkin said. “Neighborhood Trust is one of many community development credit unions in New York City committed to offering financial services tailored to the needs of low-income communities, coupled with comprehensive education and counseling efforts.” The two city agencies in attendance also discussed programs they have developed to help low-income New Yorkers reach their financial goals.

Minnesota network trains political advocates

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ST. PAUL, Minn. (3/3/08)--The Minnesota Credit Union Network (MnCUN) held a training session for its new Political and Grassroots Network (PGN) last week in conjunction with Credit Union Day at the Capitol, Minnesota credit unions’ annual lobby day. PGN was launched earlier this year to enhance Minnesota credit union’s political advocacy efforts and involvement in MnCUN’s Grassroots Education and Action Team (GREAT). At the training session, staff provided an overview of grassroots, detailed credit unions’ past success with grassroots efforts and discussed Project Zip Code, the Credit Union National Association (CUNA)’s program to determine constituents by zip code. PGN contacts were encouraged to recruit volunteers for the GREAT program, political fundraising and payroll deduction. Attendees also learned about Minnesota’s revised grassroots activism website, “We are excited to form this new political network and look forward to increased opportunities to expand credit unions’ involvement and effectiveness in grassroots activities,” said Mara Humphrey, MnCUN vice president of governmental affairs. “By bringing credit unions together with the network and CUNA, we can work in sync to accomplish our goals and strengthen the credit union movement.” For more information on nationwide grassroots efforts and CUNA’s advocacy training programs, use the link.

DE training scholarship opened to help in tough economy

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MADISON, Wis. (3/3/08)--Credit union staff and volunteers can now apply for scholarships from the National Credit Union Foundation (NCUF) to attend Credit Union Development Education (DE) training. “We recognize that the economy is tough, so we want to make sure that we do everything we can to make it easy as possible for credit unions to send representatives to DE Training,” said NCUF Executive Director Steve Delfin. “Despite the challenging times, it is important not to lose the momentum the DE Program has gained. Training on cooperative principles and credit union values is now more important than ever.” Training sessions are scheduled April 3-9 at the University of Wisconsin in Madison. The scholarships are available through NCUF’s DE Fund for credit unions that could not otherwise afford the registration fee of $1,600 (double room) or $1,700 (single room). The registration fee includes all training materials, meals and lodging. Credit unions interested in a scholarship can use the link. The deadline to apply is March 17. DE training is open to everyone, from new employees who need a credit union orientation, to seasoned executives who need to recharge. The six-day class focuses on cooperative principles, social impact and credit union uniqueness as a competitive advantage in today’s marketplace. According to Program Director Tom Decker, DE graduates:
* Acquire skills in public presentations, credit union outreach initiatives, problem solving, and technical assistance; * Earn certification as Credit Union Development Educators (CUDEs), a networking group including 434 active volunteers from the credit union movement across the U.S. and 10 other countries, and; * Return to their jobs with a new understanding that local issues may indeed be global, knowing that credit unions have the unique ability to improve the lives of people everywhere by working cooperatively.
NCUF is the primary sponsor of the DE program. Support is provided by the World Council of Credit Unions, the Credit Union National Association, CUNA Mutual Group, state credit union leagues and foundations. Questions can be directed to Decker at 800-356-9655, ext. 4374 or

70 of ATM transactions are still cash withdrawals

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NEW ORLEANS (3/3/08)--Cash withdrawals accounted for 70% of last year’s transactions at the world’s 1.7 million ATMs, according to an industry executive. Michael Lee, CEO of the ATM Industry Association, told attendees last month at the organization’s two-day conference in New Orleans that the percentage has held steady for several years (ATM&Debit News Feb. 28). Cash is important to consumers because it has value, and they realize it is the most tangible and liquid form of money, Lee said. Cash provides immediate settlement, no settlement risk, and ensures anonymity and ease of use, he added. However, despite the popularity of cash, its U.S. market share has declined the past 30 years. The reason is that more alternative payment methods--debit, credit, electronic payments and automated clearinghouse--now compete with cash, Lee said. But the volume of cash in circulation is still steadily increasing. Between 1980 and 2005, the value of U.S. dollars in circulation has risen 400% from $160 billion to $700 billion, he noted, adding that the volume of notes has skyrocketed by 465%. Despite cash’s popularity, “inhibitors” limit its use and growth, Lee said. Inhibitors include the cost of cash transactions versus other types of payment methods--including debit cards, credit cards, checks and charge cards. Crime also limits the use of cash, he added. Three out of every four personal payment transactions involve cash. By 2011, consumers still will make 66% of all personal payments with cash, some analysts predict.

Wisconsin banks introduce CRA bill including CUs

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PEWAUKEE, Wis. (3/3/08)--A banker-backed bill that would require credit unions to document efforts to serve lower-income and minority consumers was introduced Thursday in the Wisconsin state legislature, but isn't expected to gain any traction, says the Wisconsin Credit Union League. "Not one valid study points to a need for more regulation of credit unions," said Brett Thompson, league president/CEO. "So why propose a new regulation, along with the significant cost it would mean to taxpayers--just for the sake of regulation?" The legislation, supported by the Wisconsin Bankers Association (WBA), has one sponsor--state Rep. Mark Gottlieb (R-Port Washington)--and was in response to a banker-supported study. The bill would apply to credit unions costly regulation similar to the Community Reinvestment Act (CRA), which was enacted to make sure banks adequately meet the financial service needs of all segments of the communities they serve. That law was never applied to credit unions in Wisconsin. A recent hearing scrutinized banks' failure to satisfy the spirit of CRA, and Thompson said he suspects the new bill, AB 897, was introduced to deflect attention from that scrutiny. Although credit unions are not subject to CRA, statistics indicate they do a better job than banks in approving mortgages and providing basic services to low-income communities and to minorities. The league cited 2006 federal data in which Wisconsin's low-income mortgage borrowers' approval rate is 78.7% at credit unions and 48.5% at non-credit-union lenders. For minority mortgage applicants, the credit union approval rate in Wisconsin is 84.6%, compared with 55.4% at non-credit union lenders. Credit unions also operate 40% of all depository institution branches in the state's low-income census tracts. By contrast, 94% of all Wisconsin banks--including 12 of the largest 20--have no branches there. Bankers cite a 2005 study by the National Community Reinvestment Coalition (NCRC) as support for the CRA push. But the same study shows Wisconsin credit unions outperformed Wisconsin banks for three years in providing single-family home purchase, refinance and home improvement loans. A recent study by the National Association of State Chartered Credit Unions concludes that credit unions do a good job of serving their members. "Wisconsin credit unions have a great story to tell about how they serve their communities," Thompson said. "If appropriate, they would look forward to the opportunity to share that story again with the legislature."

PHEAAs student-loan suspension impacts under 100 CUs

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HARRISBURG, Pa. (3/3/08)--Fewer than 100 credit unions in Pennsylvania will be directly affected by the decision of the Pennsylvania Higher Education Assistance Agency (PHEAA) to temporarily suspend its student lending program. According to Bob Hinchey, senior vice president, fee services, at Pennsylvania Credit Union Association (PCUA), PHEAA's action will impact less than one-third of the more than 300 credit unions working with the agency to provide student loans for their members (Life is a Highway Feb. 29). PHEAA announced last week it was suspending its activities as a Federal Family Education Loan Program (FFELP) lender, beginning March 7. That means it will no longer issue loans from its own funds. However, it will continue to provide the federal guarantee, origination and servicing for FFELP loans--essentially providing the systems and processes for loan delivery and repayment. The agency is one of more than 400 lenders participating in the low-cost KeystoneBEST student loan program. About 500,000 students attend postsecondary school in the state with the assistance of a low-cost FFELP loan. PHEAA will continue with other student aid programs and services and will help with the transition to other lenders who are prepared to pick up additional loan volume, said PCUA. It will continue administering the Pennsylvania State Grant Program and other state-funded student aid programs. Student aid providers throughout the nation have been forced in recent weeks to suspend or curtail the lending activity because of failed auctions and persistent turmoil in the capital markets. PCUA "will be working with any impacted credit union to find an alternate solution," Hinchey said.

Youth rap session Many youth dont know CU difference

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LA HABRA, Calif. (3/3/08)--Many youth don’t know the difference between credit unions and banks, according to a credit union education coordinator.
Michelle Lawrence, business development education coordinator for American First CU, facilitates a discussion about finances during a “Teen Rap Session” at St. Cecilia School Feb. 26.
Michelle Lawrence, business development education coordinator at American First CU, La Habra, Calif., spoke to youth during a “Teen Rap Session” at St. Cecilia School in Tustin Feb. 26. During the session, 25 members of the school’s student council shared their views on finances with Lawrence. Many didn’t understand the difference between not-for-profit credit unions and for-profit banks. Some said they’d been taught about savings by their parents, and had money in bank accounts, while others said they still used piggy banks and wanted to save up for a car or college.
St. Cecilia School eighth-grader Jacob Karp discusses finances during a “Teen Rap Session” at the school Feb. 26 with. American CU. (Photos provided by American First CU)
“I want to learn how to balance a checkbook,” said Jacob Karp, an eighth-grader. Lawrence also explained interest rates and credit rating scores to the students, who were a “little hazy” on those topics, she said. Lawrence said she was really impressed at how much they knew. “This is a great age to target. They are still at that absorbing stage, where they show an interest. “It was also refreshing to hear that the majority of these students have to save for what they want. I find they understand the value of money more when their own money is involved,” she added. American First has offered a “bank at school” program for the past two years at St. Cecilia, where students can deposit money into their accounts. This was the credit union’s second “Teen Rap Session.”