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CU System briefs (02/29/2012)

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  • CEDAR RAPIDS, Iowa (3/1/12)--Joseph Cofield, 23, of Cedar Rapids, Iowa, was sentenced Feb. 21 to 10 years in prison for the robbery of Community 1st CU last May. He had pleaded guilty in January to the heist. Cofield was fined $1,000 and ordered to pay back to the credit union more than $6,600.  Cofield was captured after relatives identified him in surveillance photos. Another man who allegedly acted as lookout and getaway car driver, Tony Perez, 32, also of Cedar Rapids, pleaded guilty last year and was also sentenced to 10 years in prison (Associated Press Newswires Feb. 24) …
  • JUNEAU, Alaska (3/1/12)--SallyJean Maki, 26, of Juneau, Alaska, pleaded guilty to laundering more than $25,000 for drug dealers accused of bringing oxycodone from California to Alaska. Maki allegedly deposited drug-sales proceeds into the account of alleged ringleader Milan Thomas at True North FCU, Juneau, between July 2010 and August 2011.  The deposits were claimed as business receipts for Southeast Alaska Tour Co., a fraudulent business set up to launder the funds. Maki faces a maximum of 20 years in prison, a $500,000 fine, and three years of supervised release.  She will be sentenced in May. Thomas, indicted on drug conspiracy and money laundering conspiracy charges, is still at large. A third person, Hilary Herndon, also alleged to be a ringleader, pleaded guilty last week to one count each of drug conspiracy and money laundering (Associated Press Newswires Feb. 23) …

W.Va. Central uses Disney to incent staff

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PARKERSBURG, W. Va. (3/1/12)--West Virginia Central CU, Parkersburg, W.Va., experienced a giant leap in loan growth during the first two months of 2012, due to the promise of a visit with a famous mouse.

At the end of February, WVCCU celebrated the $1 million mark in net loan growth--something that normally doesn't occur until about May of each year, said the credit union.  It achieved the goal with an incentive program for staff.

Mike Tucker, CEO of West Virginia Central CU, Parkersburg, W. Va., announced staff goals and incentives program while dressed as a Disney chipmunk, Chip of Chip and Dale. The credit union will treat staff--either the winning team or the entire staff, depending on the extent of loan growth--to a trip to Disney World. (Photo provided by West Virginia Central CU).
In 2011, the credit divided 28 staffers into three teams and pitted them against each other for three months, said Lisa Collins, PR coordinator, at the credit union.   Each week, the teams set different goals and were given $500 each to market their own efforts.  Weekly prizes for winning teams included small gifts and gift cards, and the final team prize was an android table.

"We saw a lot of friendly competition, and loan growth definitely improved," said Collins. "We met our loan goals for the time period, and everyone enjoyed it, but we knew there was more excitement to be mined, if we could just figure out a motivation."

The motivation turned out to be Disney World.  Two years ago, staff had been treated to a trip to Washington, D.C., a five-hour drive away, where they stayed at a Ritz Carlton near a Nordstrom.  While there, they studied both companies' customer service efforts and toured the city. Since  then, staff continued to mention  Disney as another business known for world-class service, said Collins. Management knew Disney would be a tougher trip because it required flights and more financial outlay.

After a visit from consultant Rick Olson, who conducted a Coaching College for WVCCU the past two years, Collins was inspired to put together a Disney trip.  "I went in to our CEO with a plan to incent the staff to huge numbers with the promise of Disney at the end of the year."

Management planned a surprise party just before Christmas, and when staff  arrived, the room was decked out in Disney. CEO Mike Tucker devised a "Mickey on Steroids" goal, which was announced by Vice President of Loans Mark Greenlees while dancing in a Goofy hat.

Team captains, who were not in on the secret, had created team names, slogans and plans for each group, which they announced that night. Bottom line?  Bring in outstanding referrals and loan dollars, and the winning team would receive a trip to Disney.  Bring in huge referrals and loans, and the whole staff could go.

Already hitting the million dollar loan mark three months early, the teams are setting their own goals, creating their marketing themes and contacting members directly to get refinance business and new loans.

The rivalry is friendly but fierce as the teams work to beat each other and to get the entire group to Florida. The credit union hands out weekly rewards in Disney dollars, which helps team members save for extras for their trip. The handful who will not be able to make the trip will collect the cash equivalent at the end of the three-quarter contest, so everyone wins, said Collins.

"Members are receiving a lot of extra attention from us as we help them to get the best loan deals," said Collins, "and we are bettering the overall financial picture of our credit union as we increase loan volume. The mouse has definitely helped us meet our goals," she added.

400 CU professionals earned CUCEs in 2011

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MADISON, Wis. (3/1/12)--The Credit Union National association (CUNA) announced that more than 400 credit union compliance professionals from 49 states earned or renewed their CUNA Credit Union Compliance Expert (CUCE) Certification in 2011.

CUNA created the certificate program to help credit union compliance professionals stay up-to-date with the latest compliance regulations and ensure credit unions operate within the parameters of current law. Due to the ever-changing compliance environment, the CUCE certification must be renewed every three years.

The names and the credit unions of the CUCE certified and recertified professionals are listed in the resource links below.

The CUNA CUCE Certificate will continue to be offered in 2012. Certification and recertification are available this year through CUNA Regulatory Compliance Schools (April 21-27, in Orlando, Fla., or Sept 15-21, in Anaheim, Calif.) or at CUNA Regulatory Compliance eSchools (April 18-June 27or Sept. 25-Nov. 27).

Certification also can be earned through the CUNA Regulatory Training & Certification Program, a self-study compliance certification program.

For more information, use the links.

Illinois tornado brings out CU philosophy

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NAPERVILLE (3/1/12)--A tornado that ripped through the small, southern Illinois community of Harrisburg Tuesday night apparently did not damage Illinois credit unions. However, credit unions are putting their philosophy into practice.

A well-being check by Pat Voss, Illinois Credit Union League (ICUL) regional director for the area, and other staff discovered that no credit unions in that region were significantly impacted by the storm.

This includes NYC Employees CU, which is located in Harrisburg. One other Harrisburg credit union, Southeastern Electric ECU, was closed Wednesday because rescue crews used the community center where the credit union normally operates for emergency relief operations.

This region of Illinois is represented by the Egyptian Chapter, which includes nine credit unions that serve more than 34,400 members and hold $253.2 million in assets.

Two of the credit unions in the area, SIU CU, Carbondale, with multiple branches, and River to River CU, located just south of Harrisburg in Vienna, have offered assistance to other credit unions.

"We will certainly step up if a credit union needs assistance with cash checking or anything else," said Dennis Schaefer, SIU CU CEO. Three of the credit union's staff are members of a community emergency response team. "We have a mutual agreement with the Elverado Fire Department to assist with this and other efforts, much like we were afforded assistance with past storms that affected us," Schaefer said.

"We have office space and extra furniture," said Sheila Reichert, River to River CU CEO.  "Basically, if we have it and can share it, we will be glad to."

If any credit unions need financial assistance in their recovery, the Illinois Credit Union Foundation is ready to activate its disaster relief fund. Credit unions that need assistance may contact Vicki Ponzo, foundation executive director at 630-983-3413.

Indiana Kentucky CUs collaborate on iBelong

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INDIANAPOLIS (3/1/12)--The Indiana Credit Union League, in cooperation with the Kentucky Credit Union League, organized an advertising campaign which includes TV, radio and billboard placements. The campaign began at the end of 2011 and continues through mid-March.

The campaign had support from 54 credit union affiliates across Indiana and eight affiliates in the Louisville, Ky., area, said the Indiana league.

The iBelong credit union awareness materials were licensed by the Indiana league for the campaign from the Pennsylvania Credit Union Association (PCUA). Media buys were made in designated marketing areas (DMAs) across Indiana and Louisville. Individual credit union contributions were applied to the DMA where each participating credit union is located.

"It has been a very beneficial collaborative effort by credit unions in both states, with our Servicecorp also contributing more than $106,000 for the licensing and media buys in addition to credit union contributions," said Indiana league President John McKenzie.

The message is focused on the benefits of credit union membership. The media buy included more than 3,600 TV spots, 2,200 radio spots and 68 billboards. Since launching the campaign, hundreds of additional bonus spots on radio, TV and Internet have advertised as part of the campaign.

"Participating in this campaign with our Indiana neighbors has helped Louisville area credit unions get the word out about the overall value of credit union membership," said Wendell Lyons, president of the Kentucky league.

"A great deal of research and creative expertise went into the campaign, which showcases credit union membership as the best choice in financial services," said Jim McCormack, PCUA president/CEO.

For its campaign, the Indiana league used four of the TV spots produced by PCUA. The audio was used for radio spots.

To see the spots and artwork for the billboards, use the link.

Wash. public deposits bill on governors desk

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FEDERAL WAY, Wash. (3/1/12)--Washington's government entities soon could have a local option for their public deposits that would allow them to invest their tax dollars locally and support financial institutions--including credit unions--that reinvest in their communities.

Senate Bill 5913, which allows public entities to deposit funds up to the insurance maximum of $250,000 in any credit union headquartered in Washington, was passed by the State House of Representatives Monday, 80-16, with two members excused.

SB 5913 now moves to Gov. Christine Gregoire, where she is expected to sign it into law. The legislation would take effect June 8--90 days after the end of the session.

SB 5913 is opposed by banks.

"These legislative changes in Oregon, and now Washington, rectify a near-monopoly on some aspects of our financial markets," says Northwest Credit Union Association (NWCUA) CEO John Annaloro, referring also to a recent decision to allow Oregon credit unions to accept unlimited public funds. "All government-chartered financial institutions are now available to advance the communities of our region."

The bill, which modernizes Washington's public funds laws, was passed by the Senate on a 43-2 vote Feb. 9, where it was sponsored primarily by Senate Financial Services and Insurance Committee member State Sen. Margarita Prentice (D-11), as well as the committee's chairman, State Sen. Steve Hobbs (D-44), and State Sen. Don Benton (R-17). SB 5913 also received support from the state treasurer's office and Seattle.

Following the Nov. 5 Bank Transfer Day last year, the Seattle City Council unanimously adopted a responsible banking ordinance that called on the city to examine its banking and investment practices, a movement that is gradually gaining momentum around the nation, NWCUA said.

"Hard work by the Senate, along with committed supporters and a general public disgust with big banks, negated any opposition to this bill," said Mark Minickiello, NWCUA vice president of legislative affairs. "The momentum that carried over from November was palpable."

The issue of public funds deposits was not centered on credit unions' ability to accept public dollars. Rather, it is the state and local entity's inability to deposit those dollars that was the core of the problem, NWCUA said. Credit unions have always been allowed to accept public funds. The new law makes it legal for public entities to deposit those dollars in credit unions, Minickiello said.

"For credit unions, this has always been a member-service issue," testified Debie Keesee, president of Spokane (Wash.) Media FCU and NWCUA vice chairman, to a Senate committee, earlier this year. Even though her credit union is the closest financial institution to the city of Millwood, Wash., it would be illegal for the city to deposit of any of its public funds there, she said.

CSS to pilot social media rewards program

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MADISON, Wis. (3/1/12)--CUNA Strategic Services (CSS) today begins a six-month pilot of a software platform from BuzzBanking Inc. that ties social networking to a rewards program.

"Rewards programs are prevalent across all industries," said Wes Millar, senior vice president of CSS. "The BuzzBanking platform provides credit unions with an opportunity to build member loyalty by rewarding members' behavior for being financially responsible consumers. They also can associate rewards with behaviors such as subscribing to direct deposit, applying for loans or referring new members."

BuzzBanking was designed to engage members, said Jay Valanju, BuzzBanking CEO and founder.

"It is a resourceful way to stay relevant with the credit union membership and drive members' transactional behavior, resulting in a significant increase in the credit union's revenues and profits," Valanju said. "While credit unions can determine which products are eligible for rewards, BuzzBanking permits the credit union to push achievements to and pull information from social sites like Facebook and Twitter."

Eligible credit unions can test the software with their employee groups at an introductory price.

SunCorp adds another Town Hall webinar

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WESTMINSTER, Colo. (3/1/12)--SunCorp is adding another Town Hall webinar to match increased interest from Western credit unions considering alternatives for cooperative financial solutions.

The latest webinar will be held March 13 from 1:30 p.m. to 3:30 p.m .PT.

SunCorp has held nine Town Hall meetings and webinars with credit unions in Idaho, California, Oregon, Nevada and Washington during the past five weeks.

The corporate credit union is adding members "almost daily," said Thomas R. Graham, Suncorp president/CEO. "We are seeing strong interest in SunCorp's business model, balance sheet strength, high touch service, and proven board and management team," Graham added. "SunCorp is focused entirely on serving credit unions in the West and we want to give all Western credit unions the opportunity to hear our story."

The March 13 meeting will include a discussion with SunCorp executives on business plans for the future. Credit unions also will learn about SunCorp's payment, liquidity and investment services.

Cheney addresses CU issues at Reality Check

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ATLANTIC CITY, N.J. (3/1/12)--Membership growth, supplemental capital, member business lending (MBL), and  a growing regulatory burden were topics addressed Tuesday by Credit Union National Association President/CEO Bill Cheney  during the New Jersey Credit Union League's 2012 Credit Union Reality Check conference in Atlantic City.

Credit Union National Association President/CEO Bill Cheney updated attendees at New Jersey's 2012 Credit Union Reality Check on legislative and regulatory issues. (Photo provided by the New Jersey Credit Union League)
Speaking at a networking luncheon, Cheney opened with a positive message about the growth of credit unions during the past year, noting that credit unions saw a net growth of two million members during 2011 (The Daily Exchange Feb. 29).

CUNA is working on several legislative issues that will have a positive impact on credit unions, he said. The recently introduced supplemental capital bill (H.R. 3993), which would allow credit unions to obtain supplemental capital, is a "stake in the ground" and a great start for a conversation about the need for it, Cheney said.  H.R. 3993 was introduced in early February by U.S. Reps. Peter King (R-N.Y.) and Brad Sherman (D-Calif.) and has more than eight additional co-sponsors. CUNA is looking for more co-sponsors, Cheney told the attendees.

Member business lending (MBL) is an ongoing issue that CUNA continues to support and push. In a recent poll, 64% of small business owners said that access to capital is an issue for them, Cheney pointed out. Pending legislation to increase credit unions' MBL cap to 27.5% of assets from 12.25% would inject $13 billion into  the economy in the form of small business loans and help create 140,000 jobs at no expense to the taxpayer, Cheney emphasized. Legislators are now grasping the potential positive impact of MBL, he told the group.

Cheney also addressed credit unions' concerns about their growing regulatory burden. CUNA is working with both the National Credit Union Administration and the new Consumer Financial Protection Bureau (CFPB) to get some regulatory relief for credit unions.

The current pressure from NCUA and potential CFPB regulations is "not sustainable" and NCUA needs to take a "balanced approach" in order for credit unions to survive and thrive, he said.

CUNA has met with CFPB numerous times to express credit unions' concern and to tell the good story of credit unions, Cheney said. It is working with the agency specifically on remittance issues and ATM disclosures. Cheney reminded the group that CFPB Director Richard Cordray will speak at CUNA's Governmental Affairs Conference, held March 18-22 in Washington, D.C.

J.P Morgan asks court to reject NCUAs MBS case

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WICHITA, Kan. (3/1/12)--J.P. Morgan Chase & Co. on Wednesday asked the U.S. District Court of Kansas to reject the National Credit Union Administration's (NCUA) claim that a previous court ruling supports its arguments in the agency's mortgage-backed securities (MBS) lawsuits against RBS Securities and Goldman Sachs.

The suit is one of several filed by NCUA, seeking about $2 billion total from companies that sold MBSs to corporate credit unions. It has also sued J. P. Morgan Securities LLC, Goldman Sachs and Wells Fargo, which succeeded Wachovia Bank.

J.P. Morgan's arguments were in response to a Feb. 17 by NCUA citing Mass. Mutual Life Ins. Co. v. Residential Funding, in which the U.S. District Court in Massachusetts on Feb. 14 denied motions to dismiss NCUA's similar MBS lawsuits against RBS Securities and Goldman Sachs. The Massachusetts court also rejected the same arguments that RBS and Goldman Sachs have presented in the lawsuits NCUA brought against them  involving MBS they sold to Western Corporate FCU (WesCorp) and U.S. Central FCU (News Now Feb 22).

In its response filed Wednesday, J.P. Morgan said NCUA did not conduct any "forensic analysis of loan data" underlying the securities as the plaintiff did in the MassMutual case and that it did not rely on any original witness testimony.

J.P. Morgan cited a tentative ruling by a federal judge in California to dismiss NCUA's $629 million lawsuit against RBS Securities Inc. over the mortgage-backed securities (MBS) it sold to the now defunct WesCorp. In that case, U.S. District Judge George Wu had said NCUA relied mostly on "conclusionary" allegations tied to statistics that showed how the investments were affected by the housing market collapse.

MassMutual also said that NCUA has publicly attributed the poor performance of its MBS to market factors. J.P. Morgan Chase argues this undermines NCUA's contention of a disregard of underwriting standards on the part of originators was the cause of the losses.

NCUA's claims were based on securities companies' "wholesale abandonment of underwriting standards," when the facts of the case point to only a "loosening" of standards, which NCUA admits are not equivalent to abandonment, said J.P. Morgan.

NCUA warned credit unions as early as 2005 of the potential for inflated home appraisals and the risks of liberalized underwriting practices, J.P. Morgan said.