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CU System Archive

CU System

Small FIs reluctant to spend on payment tech IT

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MADISON, Wis. (2/7/11)--Financial institutions are indicating an improvement in their financial situations, but many still are restrained on their spending for technology, said two technology providers that serve credit unions and banks. They cited general uncertainty over regulatory issues, quality of credit and capital structure as the economy slowly recovers. Officials from Fiserv Inc. based in Brookfield, Wis.,-based and Monett, Mo.-based Jack Henry & Associates both said credit unions and banks are hesitant to commit spending to large IT projects, although they both saw slightly more spending in their last performance reports. "The outlook for predicted IT spending has become slightly more positive over the last quarter, which has helped fuel our pipeline even in light of our strong sales finish to the year," said Jeffery Yabuki, president/CEO of Fiserve Inc., in a conference call Friday about the company's fourth quarter 2010 earnings. "However, clients and prospects remain disciplined in how they deploy their capital, and we believe that the pairing of undefined regulatory landscape with environmental challenges will continue to impact sales cycle," Yabuki added. He noted the "impact of comprehensive changes in the regulatory environment continues to be an unknown" and "the entire industry will change as financial institutions look for new ways to replace earning that are under pressure," according to a transcript of the call. The outlook for 2011 "is based on an assumption that technology spending and the overall environment will be incrementally better than 2010 but still not at the average rate of growth we expect to see over the next three years. We also believe that client spending will again be weighted towards the second half of the year," said Yabuki. Fiserv reported fourth-quarter revenue was up 1.5% to $1.08 billion. Jack Prim, CEO of Jack Henry & Associates, said much the same in that organization's conference call Tuesday on its Fiscal 2011 Second Quarter performance. "We are seeing what appears to be a gradual improvement in spending from our financial institution customers as the economy continues to slowly improve," Prim said, adding the company had another record quarter for revenue, gross profit and net income. For the second quarter of 2011, the revenue for the bank systems and services segment of Jack Henry rose 11% to $189 million from $171 million, with a gross margin of 43% for both periods. Credit union systems and services segment revenue in the second quarter for fiscal 2011 rose 35% to $53.6 million, with a gross margin of 39%. That compares with $39.8 million in revenue with a gross margin of 38% in the second quarter of fiscal year 2010, the company said in a press release. For the six months ended Dec. 31, 2010, the bank systems and services segment revenue rose 15% to $370.9 million from $321.4 million, providing a gross margin of 43% for the current period, compared with 42% a year ago. The credit union systems and services segment revenue increased 49% to $106.6 million for the first half of fiscal 2011 from $71.7 million for the same period a year earlier. The significant increase in credit union segment revenues relates primarily to the acquisitions of PEMCO Technology Services Inc on Oct. 29, 2009, and iPay Technologies Holding Co. LLC on June 4, 2010, said the company.

N.Y. foundation dispersed 43000 in grants in 2010

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ALBANY, N.Y. (2/7/11)--The New York Credit Union Foundation dispersed $43,126 in grant funding in 2010 to New York credit unions and community organizations. The foundation provided 56 Professional Development Grants totaling $28,626 to employees and volunteers of 37 credit unions for education and training programs offered by the Credit Union Association of New York and other industry-related organizations. Six credit unions received Financial Fitness Grants to fund general operating needs to improve member service. A total of $8,500 was awarded to:
* Gates Chili FCU, Rochester, for an online banking system and bill payment feature; * Lower East Side People’s FCU, New York City, for testing the security of its online banking, website and network systems to protect member data and provide secure online transactions, and for adding an audio on-hold system to its phone system to enhance communication with the members; * Morse Chain Ithaca (N.Y.) Employees FCU, for the permanent and temporary storage of records; * St. John’s Buffalo (N.Y.) FCU, for an upgrade of the credit union’s security system; * UHS Employees FCU, Johnson City, for purchasing, installing and training staff to use Virtual Item Processing equipment at its branch office; and * Williamsville FCU, Amherst, for facility improvements, including a new furnace, security camera and upgrades to the counter and lobby to increase safety and convenience for members and staff.
The foundation provided three New York credit unions with Smart Money Grants totaling $4,000 to help fund programs and services that promote financial literacy and independence. Recipients included:
* Buffalo (N.Y.) Metropolitan FCU, for re-evaluating, modifying and sharing the credit union’s Banking Day Program; * Bethex FCU, the Bronx, for the operation of a Volunteer Income Tax Assistance (VITA) site for the 2011 tax season; and * New York University FCU, New York City, for providing financial education seminars to incoming students.
The East River Development Alliance in New York City was one of four entities to receive $2,000 in organizational grants.

Texas CUs adding more staff--poll

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FARMERS BRANCH, Texas (2/7/11)--More credit unions in Texas added or anticipated adding new positions to their operations, according to the Texas Credit Union League's 2010 Compensation Survey. Of those polled across the state, 24.9% said they added or planned to add positions--up 10 percentage points from 2009, said Doug Foister, director of research with the league (LoneStar Leaguer Feb. 3). "Operational costs have stabilized, as well, a factor contributing to 5.4% of respondents laying off employees, down from 2009's 5.9%," he told the league. Economic conditions in Texas are slightly more favorable, with data from the Bureau of Labor Statistics indicating that the state finished the year with an unemployment rate of 8.3%, or 1.1% lower than the national average. The league said the employment increase has been reflected in the credit union movement across the state.

Council paper offers snapshot of collaborative ads

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MADISON, Wis. (2/7/11)--Even in a challenging economy--or perhaps because of it--some credit unions are participating in collaborative advertising with their state credit union leagues, other credit unions and other cooperatives, according to a new white paper from the CUNA Marketing & Business Development Council. The campaigns “extend the hopeful and practical message of credit unions as a financial alternative to many more members and potential members, at a lower cost, and with greater resources than any single credit union could accomplish alone,” said “Collective Power: How Credit Unions Collaborate to Reach More Consumers.” Credit unions have done an inadequate job of promoting themselves to nonmembers, according to a 2009 study by Forrester Research Inc., Cambridge, Mass. Forrester recommends credit unions consolidate marketing efforts to create efficiency. Many models for collaborative advertising exist, and the report provides examples of:
* State credit union leagues that have created and coordinated such programs in their regions; * League chapters with smaller-scale collaborations among member credit unions, and larger-scale efforts aimed at educating the public about credit unions’ not-for-profit nature and benefits to consumers; * Informal arrangements exist among individual credit unions, focusing on common goals such as increasing auto loans; and * Credit unions’ work with other cooperatives in mutually beneficial advertising agreements, including affinity credit cards.

Canadian CU leaves native loan program

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OTTAWA, Canada (2/7/11)--A credit union in the Canadian province of Manitoba is withdrawing from a federal loan program for aboriginal businesses. In 2008, Indian and Northern Affairs Canada selected Assiniboine CU (ACU) as one of five financial institutions to receive funds as guarantees for loans made to on-reserve businesses (Winnipeg FreePress Feb. 4). To date, the credit union hasn’t provided any loans through the native loan program and is exiting it, ACU CEO Al Morin told the newspaper. In total, two applications were received. One was denied and the other discontinued. “We had virtually no uptake,” Morin told the paper. ACU’s board of directors voted in January to withdraw from the program and notified the government in writing last week, Morin added. Aboriginal financial institutions claim they were unfairly excluded from the program after not being properly consulted about it. A group of four aboriginal financial institutions filed a court challenge against the program in 2010, the paper said.

Fed-Philadelphia names 2 CU CEOs to council

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PHILADELPHIA (2/7/11)--Two credit union CEOs were among 12 members appointed to the Philadelphia Federal Reserve’s Community Depository Institution Advisory Council (CDIAC).
The CEOs are:
* Martin J. Banecker, president/CEO of Campbell Employees FCU, Cherry Hill, N.J.; and * Stephen Cimo, president/CEO of Delaware State Police FCU, Georgetown, Del.
The CDIAC members will convene twice a year in Philadelphia to share insight on economic and business trends facing community depository institutions in their local markets. Subsequent to each local meeting, a representative from Philadelphia’s council will then meet with counterparts from other Federal Reserve Banks at a council hosted by the Federal Reserve Board in Washington, D.C.

Twelve selected for Indianas 2011 ignite project

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INDIANAPOLIS (2/7/11)--Twelve Indiana credit union representatives have been selected to be part of ignite, an initiative of the Indiana Credit Union League focused on developing innovations that can help credit unions better the financial lives of their members. The initiative is a joint venture between the league and three Indiana credit union representatives who are alumni of the Filene Research Institute’s i3 group. “We are fortunate to have so many talented and passionate Indiana credit union people wanting to be part of ignite,” said league Director Doug True, FORUM CU, Indianapolis, who is a member of the three-member ignite leadership team along with Bob Falk, Purdue FCU, West Lafayette, and Nan Morrow, Centra CU, Columbus. “Under the direction of our leadership team, the ignite initiative has thrived in Indiana,” said league President John McKenzie. “The credit union support has been tremendous, as many have shared some of their most capable and gifted staff members.” At the group’s meeting later this month, which marks the fourth year of the ignite initiative, the igniters will be organized into small working groups and will begin developing their 2011 innovations. Twelve innovations have been developed to date. Several ignite innovations were adopted by credit unions in Indiana and elsewhere. To promote the projects, members of the working groups make presentations during the league convention and at several chapter meetings statewide. A list of innovations is available on the league website. Use the link. New igniters, serving two-year terms are:
* Stacy Lengacher, Crane FCU, Odon; * Amanda Middleton, Finance Center FCU, Indianapolis; * Bridgetta Bullock, Finance Center FCU; * Jen Wolfe, FORUM CU, Indianapolis; * Clinton Miller, General CU, Fort Wayne; * Cindy Crowley, Heritage FCU, Newburgh; * Lynette McClusky, Heritage FCU; * Brett Rinker, Industrial Centre FCU, Muncie; * Chris Smith, Interra CU, Goshen; * Kelly Johns, Partners 1st FCU, Fort Wayne; * Jackie Hofman, Purdue FCU, West Lafayette; and * Tara Holloway, Teachers CU, South Bend.
Continuing igniters in the second year of their two-year terms are:
* Janet Shaffer, Afena FCU, Marion; * Kathy Houghtalen, Beacon CU, Wabash; * Chad Kiser, Centra CU, Columbus; * Emily Pierle, Eli Lilly FCU, Indianapolis; * Cari Palmer, Energy Plus CU, Indianapolis; * Nikki Healy, Fire Police City County FCU, Fort Wayne; * Andrew Spirrison, FORUM CU; * Carma Parrish, Perfect Circle CU, Hagerstown; and * Daniel Woodhouse, Teachers CU.

Illinois teams up with Filenes Debt into Focus

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NAPERVILLE, Ill. (2/7/11)--The Illinois Credit Union Foundation (ICU Foundation) has partnered with the Filene Research Institute to provide Debt in Focus free to the state’s REAL Solutions credit unions. Debt in Focus, an online financial management tool, was created by the Filene Research Institute’s i3 program to break down barriers preventing many consumers from seeking traditional financial guidance. The anonymous financial assessment tool requires no self-identifying information, is available around the clock, and provides easy-to-follow action steps free from industry jargon and sales pitches via www.debtinfocus.com. “The ICU Foundation wants to help credit unions connect with members who are concerned about their finances so they can work together to find a mutually acceptable plan for the future,” said Vicki Ponzo, foundation executive director, ICU Foundation. “We think Debt in Focus is a great first step in the process.” Debt in Focus has already provided financial assessments for more than 250,000 consumers at more than 220 credit unions nationwide and Canada since its completion in April. The Illinois partnership waives the cost of the annual license and credit unions pay only a one-time set up fee of $150. March 11 is the deadline to sign up for free access. “Debt in Focus gives families a powerful head start toward managing their finances,” says Mark Meyer, CEO, Filene Research Institute. This is a great way to give value both to credit unions and ultimately to the members they serve.” Credit unions offering Debt in Focus also will have access to the following tools:
* Exclusive marketing/implementation support network; * Customizable marketing campaigns; * Usage analytics; * Lead generation tool through opt-in “Follow-Up” function; and * Statement on Auditing Standards 70 compliant hosting and secure sockets layer encryption.
To be eligible for the free Debit in Focus license, credit unions must be REAL Solutions partners, offering or actively considering offering at least one REAL Solutions program, product, or service, and complete a Memorandum of Understanding.