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CU System briefs (02/06/2014)

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  • SAN DIEGO (2/6/14)--Frankie Duenas, chief technology officer at San Diego's Cabrillo CU was named one of the Premier 100 information technology professionals by Computerworld magazine. "He has helped our members achieve greater access and connectivity in an evolving digital age. We are very proud of an achievement that is so well deserved," said Robin Lentz, president/CEO of the $210 million-asset credit union. Duenas, who has led the credit union's IT team since 1996, will be honored in Atlanta in March along with recipients from Verizon, DIRECTV, Intel and the Federal Bureau of Investigations ...
  • RANCHO CUCAMONGA, Calif. (2/6/14)--Linda Pettit, CEO of California Center CU, Ontario, Calif., has joined CO-OP Financial Services as vice president of customer care. She will be responsible for the company's service quality initiatives and programs. Pettit led the $8 million-asset credit union for five years and previously worked as a credit union consultant and for Evangelical Christian CU, Brea., Calif. ...
  • FORT COLLINS, Colo. (2/6/14)--Richard "Dick" Cleaver, a pioneer in Indiana credit unions, died Jan. 23 in Fort Collins, Colo.  He was 86. Cleaver was the founding CEO of RCA Employees CU in Indianapolis, retiring in 1987 after 24 years ( Coloradoan Feb. 1). He also was chairman for the Indiana Credit Union League, where he was inducted into the Hall of Fame in 1989, and Indiana Corporate Central CU. Cleaver came out of retirement to serve as CEO of Norlarco CU (now Public Service CU), Fort Collins, from 1990 to 1994 ...

Bill introduced to modernize Pa. state CU code

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HARRISBURG, Pa. (2/6/14)--Legislation was introduced in the Pennsylvania House of Representatives Tuesday to "thoroughly update" the 1933 State Credit Union Code, the Pennsylvania Credit Union Association (PCUA) reported.
 
House Bill 2009, drafted in partnership with the Department of Banking and Securities, was introduced by Rep. Lynda Schlegel Culver (R-108), chair of the House Commerce Subcommittee on Financial Services and Banking. 
 
"House Bill 2009 will modernize the State Credit Union Code for state-chartered credit unions. It has been 13 years since the code was amended with parity provisions," said Patrick Conway, PCUA president/CEO ( Life is a Highway Feb. 5). "This legislation will create a more conducive operating environment for credit unions so they can better serve their members."
 
If passed, the legislation will:
  • Clarify credit union membership's authority to amend, or appeal a board-initiated bylaw amendment. Credit unions will no longer need to submit a petition obtained from the Department of Banking and Securities when a credit union amends or appeals its bylaws;
  • Update the status of inactive accounts to reflect the Pennsylvania Treasury escheat from six years to five years;
  • Provide credit unions with the ability to correspond to membership by fax, email, or other electronic communication after obtaining member consent; and
  • Give credit unions authority to collect fees paid to outside collectors for other share or loan service related amounts owed to the credit union. In addition, credit unions may recoup the actual sums it expends.

'Don't Tax My CU' counters Mo. bank attacks

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ST. LOUIS (2/6/14)--The Missouri Credit Union Association (MCUA) is encouraging its membership to use CUNA's DontTaxMyCreditUnion.org website to fight a social media attack on the credit union tax status by state banks.
 
Missouri banks are attacking the credit union tax status through a social media campaign targeting the state's U.S. Congressional delegation. Using the #Time2Pay hashtag, bankers are directing messages to legislators via Twitter ( Missouri Difference Feb. 5).
 
MCUA is encouraging its members to visit the Don't Tax My Credit Union website and send the "Don't Tax My Credit Union" message to legislators.
 
"With a new year under way, it is a good idea to share the Don't Tax My Credit Union message with Missouri's federal lawmakers--even if you sent a message last year," said Amy McLard, MCUA senior vice president of advocacy. "Please encourage your staff, volunteers and members to re-iterate this concern with members of Congress. We don't want bankers to be the only voice lawmakers hear on this issue moving forward."
 
The Don't Tax My Credit Union website provides a platform for sending Twitter messages directly to members of Congress. Senders can tag messages #DTMCU.
 
MCUA's campaign comes in advance of the Credit Union National Association Governmental Affairs Conference (GAC), which takes place Feb. 23-27 in Washington, D.C. Missouri credit union leaders will meet with members of the Missouri Congressional delegation during the GAC on Capitol Hill.
 
In September, CUNA initiated "Don't Tax Tuesday" as a social media push using Twitter, Facebook and the DontTaxMyCreditUnion.org websites in Spanish and English to generate more than 5,000 tweets, 600 Facebook posts and 8,000 e-mails to lawmakers. The campaign earned the Social Media Innovation award from the Public Affairs Council Wednesday. (See related story: CUNA, leagues win Grassroots Innovation Award)

MCUA testifies in support of 'patent troll' bill

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JEFFERSON CITY, Mo. (2/6/14)--The Missouri Credit Union Association (MCUA) testified last week before a Missouri House committee in support of a bill that would limit patent troll abuse.
 
David Kent, director of state legislative affairs, offered credit unions' viewpoint during the Jan. 29 hearing in the House Financial Institutions Committee ( Missouri Difference Feb. 5). House Bill 1374 is sponsored by Rep. Stan Cox (R-52). Sen. Mike Cunningham (R-33) introduced  Senate Bill 706, which addresses the same issue.
 
HB 1374 sets clear criteria to help judges distinguish legitimate from illegitimate patent assertions. It also gives businesses affected by patent trolling the option to seek restitution through the circuit court.
 
"Patent troll" broadly refers to people who sue companies, such as credit unions, for patent infringement on often questionable claims in attempt to collect licensing fees.
 
The issue, which is high on the league's list to watch, also was addressed by Bill Cheney, president/CEO, Credit Union National Association, in Wednesday's Huffington Post. (See related story: Cheney in HuffPo enlists backers in 'patent troll' fight.)
 
"It's important we explain to lawmakers the severity of the issue, and that the costs associated with patent trolling affect both the credit union and the consumers that the credit union serves," MCUA Senior Vice President of Advocacy Amy McLard told News Now last week. (See Feb. 3 News Now: MCUA addressing patent abuses, multiple issues in state session .)

Weather puts big chill on Northeast CUs

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MADISON, Wis. (2/6/14)--Power outages and road closures are widespread after a one-two punch of winter storms in the Midwest and Northeast, causing some credit unions to close.
 
Click to view larger image Nearly 10 inches of snow had fallen in the Albany, N.Y., region Wednesday. This is the view from the Credit Union Association of New York's offices in Albany.
In New York, credit unions have closed branches or altered operating hours, according to Ron McLean, senior vice president, Credit Union Association of New York.
 
Ice and snow made travel treacherous, and New York Gov. Andrew Cuomo closed Interstate 84 between the Connecticut and Pennsylvania borders to traffic both ways for about six hours Wednesday. Cuomo also declared a state of emergency and urged people to stay off the roads ( Times Union Feb. 5).
 
"Credit unions located in this area are certainly significantly impacted," McLean told News Now .
 
In Pennsylvania, power outages were a grave concern. At the height of the storm, more than 623,000 customers were without power in the Philadelphia region. Peco, the power utility, said it was the second-worst storm in company history and that restoring power could take until the weekend ( Philly.com Feb. 5).
 
Click to view larger image The Pennsylvania Credit Union Association's Harrisburg offices look out over the frozen and snow-covered Susquehanna River.
"There are quite a number of areas that are really impacted by power outages," said Diane Powell, director of communications, Pennsylvania Credit Union Association. "I talked with a staff person from a credit union in this area who was working, but had no power at their residence," she told News Now .
 
People First FCU, Allentown, was closed Monday due to snow and closed early Wednesday, according to its Facebook page.
 
Credit union leagues in Massachusetts, New Hampshire, New Jersey and Rhode Island operated in business continuity mode Wednesday. Boston received 9.7 inches of snow, and more than 61,000 power outages were reported in New Jersey ( weather.com Feb. 5).
 
In the Midwest, subzero temperatures are following Tuesday's snowfall, which dumped a record-setting 7.5 inches of snow at the Kansas City International Airport ( Kansas City Star Feb. 5).
 
The Kansas Credit Union Association was open Wednesday, as were most of the state's credit unions, according to Susan Dyer, communications director.

Filene begins celebration of silver anniversary at GAC

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MADISON, Wis. (2/6/14)--The Filene Research Institute will begin its silver anniversary celebration with guest speaker Lisa Servon at its Chairman's Breakfast at the Credit Union National Association's Governmental Affairs Conference in Washington, D.C., which starts Feb. 23.
 
Servon, professor of urban policy at The New School for Public Engagement, will speak at the Feb. 25 invitation-only event.
 
"Lisa's research on the financial needs of low-income consumers resonates with Filene's original purpose to be a catalyst for a stronger credit union system and policy around all financial services," said Filene CEO Mark Meyer.
 
The credit union think-tank officially launched May 31, 1989. "The Chairman's Breakfast marks our anniversary with not only the system leaders that formed us but also the members and contributors who've made these 25 years possible," Meyer said.
 
Filene is named in honor of credit union pioneer and Boston retailer Edward Filene. CUNA, CUNA Mutual Group, the National Credit Union Administration, the American Association of Credit Union Leagues, state credit union leagues and several credit unions lent their support in the creation of a place where credit unions could research and test new ideas.
 
For its first 16 years, Filene partnered with the University of Wisconsin-Madison School of Business to produce academic research that helped credit unions respond to market needs and shape public policy.
 
Some of Filene's notable achievements from the past 25 years are:
  • Helping set the stage for the Credit Union Membership Access Act of 1998 with its "Taxation of Credit Unions" and "Field of Membership: An Evolving Concept" reports;
     
  • Launching the i3 program in 2004 to instill the power of innovation in credit unions and test ideas such as Debt in Focus (now SavvyMoney), Savings Revolution and Save Up;
     
  • Piloting REAL Solutions--now a signature program of the National Credit Union Foundation--to help credit unions better serve low- and moderate-income consumers;
     
  • Testing prize-linked savings accounts with the Doorways to Dreams (D2) Fund and the Michigan Credit Union League in 2008, encouraging consumers to save by creating a chance to win a prize with each deposit; and
     
  • Introducing The Cooperative Trust in 2012, a community of young credit union professionals.

CUNA, leagues win Grassroots Innovation Award

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WASHINGTON (2/6/14)--The Credit Union National Association's "#DontTaxTuesday" Twitter and Facebook campaigns walked away with a Grassroots Innovation Award from the Public Affairs Council Wednesday.
 
"We could not be happier with the success of credit union's social media advocacy," said Richard Gose, senior vice president of Political Affairs at CUNA. "We owe much of our success to the dedication of credit union members, who willingly engage in advocating for their credit unions."
 
The Grassroots Innovation awards are given out annually at the Public Affairs Council's National Grassroots Conference in Florida. The awards recognize the nation's best grassroots programs and campaigns in the categories of Corporate Innovation, Association Innovation and Social Media Innovation
 
On July 23 and Sept. 10 last year, CUNA and state credit union league advocacy used social media to encouraged credit unions, credit union members and other credit union advocates to contact state and federal lawmakers directly with the unified message of "Don't Tax My Credit Union." Some of the tweets incorporated videos. Below are just three of the kinds of messages sent to legislators:
  • Shiro-oni:  @MaxBaucus @OrrinHatch Truth is, credit unions provide superior deposit & loan rates & greater protection from risk than banks #DontTaxMyCU.
  • StevePoniewaz:  Cooperative status is not a subsidy. Credit Union Members have paid their tax; #DontTaxMyCU@RepAnnWagner
  • Alabama CU: CUs return profits to their members. Taxing CUs hurts 1.8 million Alabamians. Visit bit.ly/ZY97Pz and ell Congress #DontTaxMyCU
For the first "Don't Tax Tuesday" in July over 5,200 messages were posted with the #DontTaxMyCU hashtag with roughly 2,000 being sent directly to member of Congress.

For the second "Don't Tax Tuesday" in September CUNA worked to develop a Twitter and Facebook plug-in on the "Don't Tax" site (see resource link) that would allow advocates to simply enter in their address and directly Tweet their legislators or post messages on Facebook supporting the "Don't Tax My Credit Union" campaign. The second "Don't Tax Tuesday" boasted nearly 8,000 tweets with the CUNA Advocacy hashtags including 5,000 directly tagging members of Congress.
 
Overall, since the "Don't Tax My Credit Union" campaign began in May 2013, it has garnered more than 1.3 million direct messages to the U.S. Congress.

Prepaid cards can fill need in Hispanic market

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FARMERS BRANCH, Texas (2/6/14)--Prepaid reloadable cards are often touted as a good fit for unbanked Hispanic consumers who rely one expensive fringe financial service providers to cash checks and send money to relatives in another country. But Hispanic consumers will only embrace prepaid cards if the fee structure is consumer-friendly, according to Miriam De Dios, president/CEO of Coopera.
 
"While there has been a rise in popularity of prepaid solutions, particularly for the unbanked, not all solutions have been created with the Hispanic consumer in mind, nor are they generally consumer-friendly solutions," De Dios told the Cornerstone Credit Union League ( Leaguer Feb. 5).
 
Better yet, prepaid card programs should offer a path to savings and checking account status, De Dios advised.
 
Prepaid reloadable cards are a hybrid of gift cards and debit cards. Cardholders load and reload money onto their card and then use it to make purchases and withdraw cash at an ATM. It's relatively easy to obtain a prepaid reloadable card, because a financial institution account is not required, nor is a credit history.
 
"These cards provide cardholders an easy way to manage their money, have additional access to their money and a safe-tool to carry their money," De Dios said.
 
Beacon FCU, LaPorte, Texas, has offered prepaid cards since 2011. It's been a challenge getting members to embrace the product, said Adelina Gomez Abshire, director of business development for the $128 million-asset credit union.
 
"We have garnered feedback from the community about the prepaid cards, and we've discovered that there are a lot of misperceptions," Abshire said. "We learned from our dialogue with the community that Hispanics age 40 and older prefer to pay in cash because they perceive that prepaid cards have too many hidden fees."
 
The 40-and-over Hispanic demographic, unfortunately, tends not read all of the disclosures, Abshire said.
 
"They get their information from a trusted relative or friend," she added. "Once they start getting charged fees, they stop and go back to their source of using cash or money orders."
 
For the unbanked, there are advantages of having a prepaid reloadable card, De Dios said. Prepaid reloadable cardholders can save on check-cashing fees, money order fees and money transfer fees by using their card instead of using expensive fringe financial service providers.
 
"Some prepaid card solutions charge load fees, activation fees and interactive voice response system support fees," she added. "Solutions that limit their fees and have low- or no-cost services are the best solutions. The cardholder fee structure is important for credit unions to understand when selecting a prepaid reloadable card option."
 
When consumers purchase prepaid cards, they should also be offered financial education and options to develop an account-based relationship that can help the cardholder meet his or her financial goals, De Dios said.
 
"While a prepaid reloadable card can give the cardholder more access to money and can save them a lot of money, it's not going to help them build credit and get a car loan," De Dios said. "A prepaid reloadable card and a relationship with their local credit union will."
 
For those members with no other way of opening an account, prepaid cards have proven to be their best option, Abshire said.
 
Another important consideration is the cultural relevancy and language support available for the card program, she added. Without access to account information in Spanish and no bilingual cardholder support, a Spanish landing Web page is not going to be attractive to a Hispanic consumer who needs this card.
 
"Credit unions need to look at options that provide a seamless, culturally relevant and in-language experience in their prepaid reloadable card program," suggested De Dios.