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ICU Executive NewsletterI changes name to ICU360 NewsletterI

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MADISON, Wis. (2/6/08)-Credit Union Executive Newsletter is now the CU360 Newsletter, with access to online information. Published by the Credit Union National Association (CUNA), the newsletter brings the "who, what, when, where, why" of credit union management to credit union executives. By teaming up with CU360, CUNA's online research portal, CU360 Newsletter will provide research and advice for the credit union executive beginning with its Feb. 4 issue. Subscribers can receive content in both paper and online formats with access to the portal at This week's issue includes items on reverse mortgages, closing a branch, mobile banking, past government interventions in financial markets, and teen spending. For more information, use the resource link.

SandP assigns AA rating to U.S. Central

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LENEXA, Kan. (2/6/08)--Concern over values of mortgage-related securities in U.S. Central’s investment portfolio prompted Standard & Poor’s (S&P) yesterday to assign a long-term debt rating of “AA+” to the credit union. Previously, U.S. Central was rated “AAA.” S&P’s rating of U.S. Central’s commercial paper remained unchanged at “A-1+.” “U.S. Central is a healthy and profitable financial institution with $2.4 billion in capital as of Dec. 31, 2007, and access to more than $20 billion in available liquidity,” said U.S. Central President/CEO Francis Lee. To put S&P’s rating in perspective, Lee pointed out that the “AA+” rating is shared by only two other U.S. depository institutions--and only one other has a higher rating. “We believe S&P’s rating of U.S. Central is an acknowledgement of the continued strength of our balance sheet and our high liquidity position at a time of considerable uncertainty in the financial markets,” said Lee. S&P said U.S. Central continues to be “supported by the company’s strong funding and liquidity profile, which allows it to continue to hold these securities despite the market value declines.” Meanwhile, U.S. Central said yesterday it recorded unrealized mark-to-market losses on its available-for-sale securities of $760 million on its $40 billion portfolio in the fourth quarter, "as have many other institutions in the current market climate." “Such unrealized losses had no material economic effect during 2007, and are not expected to have a material impact on U.S. Central’s profitability in the future,” said the credit union in a statement.

CU Systems briefs

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* PHOENIX (2/6/08)--Arizona State CU raised $15,500 in its Super Bowl ticket auction over the radio station KTAR last weekend and sent a local Phoenix man to the event. The proceeds benefit the Phoenix Children's Hospital. The tickets received 40 bids, some from other credit unions. The winning bid of $15,000 is being donated to the 1 Darn Cool School program, which continues educational needs of hospitalized patients. Each year Arizona's credit unions raise money for the school through the Credit Unions for Kids program. "We are very happy to learn that this great Super Bowl packate has served to raise money for the Children's Miracle Network," said David E. Doss, president/CEO of the $1.18 billion asset credit union … * LAKEVILLE, Minn. (2/6/08)--Minnesota credit unions supported Dakota and Scott counties' fight against domestic violence by sponsoring the Community Action Council's Domestic Abuse Awareness Luncheon Jan. 18. The Minnesota Network Advertising Program (MNAP) sponsored the event on behalf of the state's 162 credit unions--the second year the 23-year-old event has been sponsored by credit unions. Keynote speaker Victor Rivers (shown here), actor and spokesperson for the National Network to End Domestic Violence, shared his story of growing up in an abusive home. Rivers acted in the Mask of Zorro, Blood In/Blood Out and The Distinguished Gentleman. MNAP Committee Chair is Marty Kelly of US FCU, Burnside, Minn. MNAP is a subcommittee of the Minnesota Credit Union Network board and is voluntarily funded to promote credit unions' uniqueness through cooperative advertising. (Photo provided by the Minnesota Credit Union Network) … * LATHRUP VILLAGE, Mich. (2/6/08)--Michigan First CU President/CEO Michael Poulos displays the 2007 Generation Next Award presented the credit union by the Michigan Credit Union League at a recent Metro West Chapter luncheon. The award recognizes the $475.9 million asset credit union's achievement in "outstanding contributions to the credit union youth movement" and in "effectively bridging the gap for the next generation of credit union members." The credit union's student-run branch program has grown to 10 elementary and middle schools, and it plans to add 10 more schools in 2008. Its MoneyKids and MoneyTeen programs encourage youth to save and teach financial responsibility. It also provides scholarship programs and works with many community youth initiatives. (Photo provided by the Michigan First CU) … * BALTIMORE, Md. (2/6/08)--Bill Derry, former CEO, of Washington, D.C.-based Transportation FCU, died Jan. 18, according to the Maryland and District of Columbia Credit Union Association (MDDCCUA)(FOCUS Newsletter Feb. 4). During the 1970s, Derry served as chairman of the D.C. Credit Union League. He is survived by his wife, Pat. The funeral was in Florida, said MDDCCUA … * EASTPOINTE, Mich. (2/6/08)--Loren McDonald, former CEO of East Detroit Schools CU (now Eastpointe Community CU), died Jan. 27 at the age of 79, according to the Michigan Credit Union League (Michigan Monitor Feb. 4). He served as CEO from June 1983 to November 1993. McDonald also served as a former CEO of a small Catholic credit union and as loan supervisor at Burroughs FCU (now USA CU). He is survived by his wife, Rose; two daughters, one son, six grandchildren and two sisters. Private family services have already been conducted …

Wisconsin tax-filer program offers predator alternatives

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PEWAUKEE, Wis. (2/6/08)--Wisconsin credit unions are offering help to low-income tax filers to stave off predatory financial practices that hurt filers in the past. Credit unions are assisting the filers by opening accounts into which free refunds can be deposited, providing a no-cost alternative to refund anticipation loans (RALs) that cost taxpayers $23.4 million, said the Wisconsin Credit Union League. Many low-income filers who need RALs to pay bills often turn to tax preparers who charge high interest rates. More than 93,731 Wisconsin taxpayers paid an average of $250 in RAL-related costs in 2005, according to the Wisconsin Council on Children and Families. “They paid dearly to borrow their own money,” said Brett Thompson, league president/CEO. “There’s a better option through credit unions that’s free and just as fast.” RALs siphon the tax benefit these filers should receive by claiming the Earned Income Tax Credit (EITC). About $14.3 million of EITC was lost in 2005 in Wisconsin to RALs. The RAL fees by federal EITC recipients in 2005 also denied the state as much as $47 million in economic activity, the league said. Credit unions will open the accounts at volunteer return preparation sites around the state. The sites offer free tax preparation, tax education and asset-building strategies to people with low incomes, the disabled, the elderly and those with limited English proficiency. The sites are operated in partnership with the league, the Internal Revenue Service, the Wisconsin Department of Revenue and the American Association of Retired Persons. Wisconsin credit unions also offer low-cost alternatives to low-income people through REAL Solutions, including payday loan services, check cashing and wire transfers. REAL Solutions’ goal is to meet consumers’ needs for transaction services, while moving them through the steps of opening basic deposit accounts, building creditworthiness with small loans and building wealth over time, Thompson said.

CU pays heating costs of 29 near-homeless families

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LYNN, Mass. (2/6/08)--A credit union is partnering with a Massachusetts organization to help 29 near-homeless households pay heating costs for February. Brotherhood CU, a $110.9 million asset credit union in Lynn, Mass., is working with the Massachusetts Coalition for the Homeless and its First Stop program, an early warming system for reaching households before they become homeless (The Daily Item Feb. 5). According to credit union President James Sherman, many neighbors are struggling to stay warm this winter and could be in jeopardy of becoming homeless. He noted homelessness not only means the loss of a place for someone to call home, but also holds ramifications for jobs, children's education and community stability. Credit unions across the state have been committed to finding long-term solutions, said Robyn Frost, coalition director. Their support goes beyond financial support in finding true solutions to end homelessness and ensure long-term housing stability, Frost said.

California transaction tech firms join WOCCU

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MADISON, Wis. (2/6/08)--Two California-based financial transaction technology firms have joined the World Council of Credit Unions (WOCCU) as associate members, bringing to eight the number of organizations that function as non-voting associate members of the international credit union trade association. The new associate members include: CO-OP Financial Services, the parent company to CO-OP Shared Branching, based in Rancho Cucamonga, Calif.; and Financial Service Centers Cooperative (FSCC), based in San Dimas, Calif. Both firms were unanimously approved for membership at WOCCU's board of directors meeting in Naples, Fla. Associate members receive all the benefits of WOCCU membership, including seats at the annual general meeting. However, they may not vote for members of the WOCCU board or serve on the board. CO-OP Financial Services is a credit union service organization (CUSO) that provides card services, ATM network services and shared branching for about 2,000 credit unions in the U.S. The 25-year-old CUSO, owned and controlled by credit unions, has more than 25,000 ATMs in 10 countries. CO-OP Shared Branching, headquartered in Duluth, Ga., offers shared branching for 80% of participating credit unions and 67% of all shared-branching locations. “We've supported the World Council of Credit Unions for many years,” said Stan Hollen, president/CEO of CO-OP Financial Services. “In fact, we recently worked together to complete the first true international shared branch transaction in Ecuador using our Next Generation Network. Becoming an associate member not only expands our relationship with WOCCU, but it furthers the credit union movement on a more global scale.” Financial Service Centers Cooperative, an 18-year-old CUSO, provides shared branching services at more than 5,000 locations in the U.S. and five countries. FSCC's technology has enabled it to offer 24/7 shared branch access at more than 2,000 7-Eleven stores, said Sarah Canepa Bang, FSCC president/CEO. “FSCC has maintained international branches for more than six years," said Bang. “We've long used WOCCU resources and thought it was time to pay the organization back and support its good work by becoming more involved.” The two new associate memberships signal growing support for WOCCU's mission, and indicate the increasing importance technology plays in serving emerging credit union movements, according to Pete Crear, WOCCU president/CEO. “Both organizations provide U.S. credit unions with electronic transaction services vital to their members' success, and we'll look for synergies that will enable them to help more credit unions worldwide,” Crear said. Other WOCCU associate members include: the National Federation of Urban Cooperative Banks and Credit Societies Ltd. (India); Cooperative Savings and Credit Union Mutual Insurance Society (Poland); CUNA Mutual Group (U.S.); the International Cooperative Banking Association; the International Cooperative & Mutual Insurance Federation; and the International Raiffeisen Union.

Year-end loan-to-savings ratio highest since 70s

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MADISON, Wis. (2/6/08)--With credit union loan growth outpacing savings growth, the loan-to-savings ratio increased to 84.6% in December from 83.9% in November, according to the Credit Union National Association’s (CUNA) monthly sample of credit unions for December 2007. This is the highest year-end reading since the 1970s, suggesting that for some credit unions, liquidity is very tight, Mike Schenk, CUNA senior economist, told News Now. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowing, plus other liabilities--remained at 18% during December. However, the widely reported problems in the housing market--combined
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with general weakening of economic conditions--suggests that 2008 will be a slow-growth year for credit union loans, Schenk added. Credit union loans outstanding increased 0.6% in December, ending the year with a 7.6% increase. Credit card loans outstanding increased 4.1% for the month, followed by adjustable-rate mortgages (2.5%), unsecured personal loans (1.1%), fixed rate mortgages (0.9%), and other mortgages (0.7%). Declining during the month were other loans (2.5%), new-auto loans (0.3%), and home equity loans (0.1%). Credit union savings balances fell 0.2% in December, but increased 4.8% overall in 2007. Share drafts (4.6%) and regular shares (1.2%)
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declined, while individual retirement accounts (1%), certificates (0.8%), and money market accounts (0.8%) increased. Total savings balances ended the year at $650 billion. “Our baseline forecast calls for loan growth of 5% and savings growth of 9%, as nervous consumers ratchet down their spending and borrowing,” Schenk said. “This will put downward pressure on loan-to-share ratios, and--by definition--increase credit union liquidity.” In terms of asset quality, credit union delinquency increased only 0.27 percentage points from a year ago despite the weaker economy--to 0.95% in December 2007 from 0.68% in December 2006. The credit union movement’s overall capital-to-asset ratio remained at 11.5% in December. The total dollar amount of capital ended the year at $89 billion, an increase of 6.5% from a year ago.

Federation has record year in investments

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NEW YORK (2/6/08)--2007 was a record year for the National Federation of Community Development Credit Unions and its Community Development Investments Program, according to year-end numbers. The program, formerly known as the Capitalization Program, celebrated its 25th anniversary in 2007 with a rebranding and the launch of a capital campaign aimed at raising $25 million over three years, to bring total assets under management to just over $50 million. Highlights for 2007 include:
* $10.5 million in Investments and commitments raised in a one-year period; * $8.8 million in new investments in member community development credit unions (CDCUs) in a single year; * $38.4 million in total assets under management; * 121 CDCUs participating in the program; and * 32 investors.

Georgia lending partnership helps disabled mom buy home

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ATLANTA (2/6/08)--A single disabled mother with a daughter went to her local credit union in Rome, Ga., and received the necessary help to purchase her first home. A partnership formed in 2007 between the $46.3 million asset, Northwest Georgia CU in Rome, and the $166.7 million asset, CDC FCU in Atlanta, resulted in the offering of the Georgia Dream First-Time Homebuyer Program to Georgia residents. This partnership made the two credit unions the only ones in the state to offer the Department of Community Affairs (DCA) First-Time Homebuyer Program. The Dream Program provides increased down-payment assistance and closing-cost assistance to eligible buyers who may also qualify for a low interest rate and zero-interest mortgage. When Pam Johnson’s need for a new home arose, the partners structured a program with DCA that most lenders could not put forward. The subsidized 30-year fixed loan, with a combination of $15,000 in zero-interest assistance, made Johnson’s dream a reality, CDC FCU said. Johnson found a home within her price range, received financial assistance, and made a small down payment of $500 to secure her loan. She also received grant funds from the Federal Home Loan Bank of Atlanta’s first-time homebuyer program. “It is truly rewarding to help people like Ms. Johnson in reaching her dream of homeownership, especially in such tumultuous economic times,” said John Murphy, CDC FCU vice president of mortgage services. “With the help of the first-time homebuyer resources, we are able to improve the homebuyer markets within the communities we serve.”

CO-OP Financial creates 1 million CMN matching fund

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ONTARIO, Calif. (2/6/08)--CO-OP Financial Services has created a $1 million matching funds program to encourage credit unions to participate in local fundraisers for the Children's Miracle Network (CMN). The program is called the Miracle Match Program. CO-OP Financial Services will match credit union contributions at the local level to create new fundraising opportunities for CMN's children's hospitals, said Stan Hollen, president/CEO (Life is a Highway Feb. 5). For more information about the program, use the link.