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Big L.A. CUs returning to real estate loans

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LOS ANGELES (2/8/11)--Large credit unions in Los Angeles are beginning to pick up commercial real estate lending now that the economy is starting to improve, said Los Angeles Business Journal ( Feb. 7). Of the 170 or so credit unions in Los Angeles County, only about a dozen are big enough to offer this type of loan, said the article. John Bretthauer, senior vice president of commercial lending for $1 billion asset California CU, based in Glendale, Calif., told the publication that the number of active lenders is much smaller than before the recession. His credit union stopped making those loans in 2009 and had no plans to resume, he told the publication, adding that most credit unions are shrinking their assets. California and Nevada Credit Union Leagues analyst Daniel Penrod told the publication that credit unions are feeling more comfortable branching out or expanding the lines of business available to them as economic stability sets in. Some credit unions that offered the loans stopped during the recession, either to tend to the economy's impact on their loan portfolios or because the overall lending decline resulted in their assets shrinking. That, in turn, pushed them up against the regulatory business lending cap of 12.25% of total assets. The Credit Union National association and credit unions have been pushing for Congress to lift the cap to 27.5%--something that would create $10 billion in loans and 100,000 jobs without expense to the taxpayer. Kinecta FCU, a $3.5 billion asset credit union based in Manhattan Beach, resumed real estate lending last summer ago after a year-long break. It cited the cap as a major factor why it stopped commercial real estate lending. When it resumed the loans last summer, it tightened its underwriting. Paul Cleary, Kinecta's vice president of business lending told the Business Journal that the credit union did not have significant problems with the loans during the recession but decided to play it safe anyway. Since resuming the loans, he said, the credit union has noticed that there is a clear desire in the market for such loans that is not being met by traditional commercial property lenders. Credit unions, however, are coming out in the market and looking for deals, he added. Penrod said commercial loans, which include commercial real estate, held steady at $2.1 billion among all credit unions in Los Angeles County during the first three quarters last year. During the same period, equivalent loans at local banks dropped 6%, according to the Federal Deposit Insurance Corp.

SECU changes gas pump policy adds overdraft fee-free days

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RALEIGH, N.C. (2/8/11)--State Employees' CU (SECU) has changed its credit policy at the gas pump and added Overdraft Fee Free Days to its checking account to help members curb overdrafts. "At 95% of today's automated gas pumps, members have a choice of using their debit card as a debit, in which they enter the PIN code, or as a credit," Leigh Brady, SECU senior vice president education services, told News Now. "It's the credit where we've had the issue." The Raleigh, N.C.-based credit union discovered a number of members are going into the negative on their checking accounts when they used their debit card for credit at the pump. When they use the credit function, the credit union deducted $1 their account until Visa posed the actual amount to the checking account, which can take a couple of days. Brady explained the problem: A member with $60 in his checking account pumps $30 worth of gas. The pump receipt registers it as a credit of $1 from the account--the deduction the credit union made from the member's account for gas transactions until Feb. 1. The member knows he's paid $30 but doesn't realize that entire amount isn't posted with the credit union balance yet by the card company. In the meantime, the member goes to the ATM the next day and sees he has $59 in his checking account, she said. Forgetting the balance doesn't reflect the gas cost, he says, "Oh I must have had more money that I thought." And he proceeds to spend it somewhere and put his account in the negative. SECU did its research and decided to change the $1 deduction to $26 to help members cover the cost of the gas purchase. The change was effective Feb. 1. "We analyzed data from our account transactions and found that 80% of members who pump gas using the debit as a credit card spend about $26 or more with every gas transaction. Now, instead of deducting $1, we deduct $26 until the transaction is posted by Visa. Then we restore it to the actual amount spent," Brady said. That means when the member goes to the ATM the next day, his account balance is $34, reflecting the average amount of a gas transaction, and he has a more accurate idea of his balance. The amount is adjusted when the actual gas purchase amount is posted. The new credit policy "mitigates the impact for our members," Brady said. Only 5% of automated gas pumps have the technology to post the exact amount for both debit and credit at the pump, she said. The credit union also introduced Friday its Overdraft Fee Free Days for traditional checking accounts. Every SECU checking account enrolled in the Overdraft Protection Program will automatically see the benefit of having overdraft transfer fees waived for two days each calendar year. "It's to help members with those 'oops!' moments," said Brady. With the program, the member has a separate account that is tapped when the member overdraws his checking account. Normally the credit union charges 50 cents for an overdrawn transaction. "We'll waive it for the first two days that it happens in a year," Brady said. The program follows SECU's NSF Fee Free Days, launched early last year to allow members to have $12 Non-Sufficient Funds fees waived on two days during the year, regardless of the number of items marked as NSF on either of the two days. SECU's Another Chance Program provides mobile alerts and an additional day for members to cover inadvertent overdrafts without a fee, return or embarrassment. And its Two-Way Text Messaging allows members to receive current balances and account history notifications via text message. In $2010, the combined overdraft enhancements helped save SECU members more than $5 million in potential NSF charges.

Ohio foundation awarded 41 grants in 2010 for 169K

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COLUMBUS, Ohio (2/8/11)--The Ohio Credit Union Foundation awarded 41 grants, totaling $169,000, to assist credit unions, communities and individuals across Ohio in 2010 (eLumination Newsletter Jan. 26). Among the projects were:
* Funds for an online reality day program; * Two "reality day" events that served more than 1,000 high school students; * Three student-run credit unions; * Twenty-five professional development grants totaling $38,000 to help credit union staff and volunteers receive training; and * Nearly $25,000 in disaster relief to help credit union employees, volunteers and members affected by earthquakes in Haiti and Chile and a tornado in Northwest Ohio.
For 2011, the foundation's board of trustees set a $173,000 fundraising goal and a $177,000 grantmaking goal. Recently the foundation awarded a $5,000 disaster relief grant to the World Council of Credit Unions for the Disaster Relief Fund for Australia to provide immediate relief to Australian credit union staff and members affected by torrential rains, described as the worst in Australian history. Several credit union branches were forced to close or relocate.

CU System briefs (02/07/2011)

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* MADISON, Wis. (2/8/11)--Amy Nigrelli has joined the Credit Union National Association (CUNA) as vice president of marketing communications, a new position within CUNA's marketing and sales department in Madison, announced Terry Costin, CUNA senior vice president of marketing and sales. Most recently Nigrelli was director of marketing, business and project management for McDermott Will & Emery LLP, an international top 25 law firm in Chicago. Before that, she served in a variety of marketing positions for the firm. She will lead CUNA's marketing operations, which include driving consistent brand strategy across the various disciplines of the association's products and services … * SAN JOSE, Calif. (2/8/11)--Technology CU has launched a new jumbo 30-year fixed-rate home loan program intended to boost the buying power of homebuyers and homeowners up to $3 million. "It's no secret Bay Area housing prices and the cost of living are amongst the highest in the nation," said Steve Donahue, vice president of mortgage orientation for the $1.396 billion asset credit union. "This loan product was created for members with good credit who want to refinance or purchase an upper end home and enjoy the benefit of fixed payments." About 33.2% of all sales in the Bay Area during December were for $500,000 or more; during the past decade sales of homes in that price range averaged 44.9% each month, according to DataQuick Information Systems (Professional Services Close Up Feb. 7) …

Mazumas first SBA Patriot Express loan goes to sub shop

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KANSAS CITY, Mo. (2/8/11)--Mazuma CU has approved its first Small Business Administration (SBA) Patriot Express Loan. The SBA Patriot Express Loan is a business loan that can be used to start or expand a small, veteran-owned business. Mazuma CU is one of a few financial institutions nationwide that can offer a SBA Patriot Express Loan. Mazuma enjoys a strong re-payment history among current SBA recipients, one of the determining factors the SBA looks at when selecting financial institutions to offer their loans, such as the Patriot Express and Community Express loans. Mazuma CU’s first SBA Patriot Express loan was granted to HW Foods LLC, which used the loan to buy a Quizno’s franchise located in Merriam, Kan. “We develop a deep understanding of who our member is and what this offer to the customers. Once we know that, we can help the member secure the type of loan the business member needs,” said William Maher, business advocacy officer at Mazuma CU. Woody Morris, proprietor of HW Foods LLC, served in the National Guard for 12 years, which allowed him to qualify for the loan. “I started serving in the National Guard while I was a junior in high school, so that the National Guard would help pay for my college education. Now, I can still reap the benefits of serving our country through the SBA Patriot Express Loan Program,” Morris said. He plans on expanding his business. “I would like to open a second store by the end of 2011,” he said. “I know Mazuma CU will help me find the right loan that allows me to continue to grow my business.”

IWash. PostI Universitys student-run CU trains interns for real life

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WASHINGTON (2/8/11)--Georgetown University Alumni & Student FCU, a student-intern-run credit union, was featured in Sunday's column by the Washington Post columnist Thomas Heath. The credit union is a virtual training ground for big jobs in finance after graduation. The credit union’s alums end up at firms such as Goldman Sachs, J.P. Morgan Chase, First Manhattan, Barclays, Morgan Stanley, the law firm Cravath, Swaine & Moore, Procter & Gamble, and Harvard Business School. Heath described the 105 student interns as “hard-charging entrepreneurs” who work up to 50 hours as volunteers. They are familiar with financial terms such as basis points, net worth ratio and delinquency rate. The independent, student-run institution started in 1983 with a $100,000 investment from the university. Today it has 7,000 members, about $15.5 million in assets and $1.5 million in outstanding loans. Overhead is minimal since there are no human resources expenses. The credit union does pay for an occasional group dinner. The big payoff is intangible. “The reason I got my job at Goldman Sachs was because I had the credit union on my resume,” alumnus Chris Villar, 30, told Heath. “During interviews in college you're competing against thousands of other kids who all have impressive backgrounds, but the credit union gets you noticed and stands out.” Villar and another credit union alum, Aaron Shumaker, left Goldman in 2007 to start McLean-based FrontPoint Security, which sells do-it-yourself wireless alarm systems. In an e-mail, Arjun Mehta, the credit union’s CEO, described what the CU teaches interns. They learn how to:
* Excel in a professional environment; * Handle crises and other stressful situations; * Talk to members, customers and clients; and * Talk to a perfect stranger.
One lesson is how to say no. One loan applicant who wanted money for a treadmill was turned down. The applicant lived next to the gym. Katie Cohen, who will become CEO on March 1, said that working with members who are delinquent on their loans is particularly instructive. Cohen said it’s important to develop mutual respect between members and the credit union. “One of the important things is we want to find out to what extent they can actually perform under pressure,” Mehta said. “We invest a lot into our interns. So we have to make sure we have the right group of interns.” Those who pass muster start training as tellers for two hours every night for a week. Once they finish a semester as tellers, interns start working in other departments, including finance, operations, member service, collections and credit. As the interns work their way up, they may learn to evaluate loan applications, read credit scores, make accounting entries, work with clients and supervise tellers. In return for the hard work, the credit union teaches its members how to conduct themselves in the business world. It runs a virtual career center, holding mock interviews and coaching interns on how to get a job. Seniors help underclassmen through the interview process.

Former CU CEO named to Ala. CU Administration top post

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BIRMINGHAM, Ala. (2/8/11)--Alabama Gov. Robert Bentley appointed former APCO CU CEO Larry Morgan as administrator of the Alabama Credit Union Administration (ACUA) on Feb. 3.
Click to view larger image Alabama Gov. Robert Bentley (left) appointed Larry Morgan former CEO of APCO CU in Birmingham, Ala., (center) as administrator of the Alabama Credit Union Administration, Feb. 3. Patrick La Pine president/CEO of the League of Southeastern Credit Unions is pictured on the right. (Photo provided by the League of Southeastern Credit Unions)
Morgan brings credit union experience to the office, including running the Birmingham, Ala.-based APCO, which is the largest state-chartered credit union in Alabama with more than $1.8 billion in assets and more than 60,000 members. He also served on the ACUA advisory board from 2005 to 2011, and worked for the Alabama Credit Union League, now the League of Southeastern Credit Unions (LSCU). “Gov. Bentley’s appointment of Larry Morgan as administrator of the ACUA gives great confidence to Alabama credit unions,” said LSCU President/CEO Patrick La Pine. “Larry understands credit unions in Alabama and the regulatory issues facing them, which means that he will provide a steady and fair hand with the ACUA. The LSCU looks forward to working with Larry to improve the operating environment for credit unions.” ACUA is the regulator for credit unions chartered under the laws of Alabama. The administrator of this agency is the CEO of the administration, and is appointed by the governor’s office and confirmed by the senate. Earlier this year, current Administrator Glenn Latham informed Gov. Bentley that he would not seek a reappointment. “The league would also like to recognize and thank outgoing ACUA Administrator Glenn Latham for his years of service to credit unions in Alabama,” La Pine said. Morgan’s term runs through Feb. 1, 2015. His appointment has been sent to the Alabama Senate for confirmation.

Minn. officials point out CUs importance at event

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ST. PAUL, Minn. (2/8/11)--Praising credit unions for being part of the economic solution, Minnesota officials acknowledged Thursday the movement's efforts to help consumers during speeches at the Minnesota Credit Union Network's (MnCUN) Credit Union Day at the Capitol.
Minnesota Department of Commerce Commissioner Mike Rothman and other elected officials commended credit unions Thursday for their positive impact on the state's economy during the Minnesota Credit Union Network's Credit Union Day at the Capitol. (Photo provided by the Minnesota Credit Union Network)
The event welcomed more than 150 credit union professionals and volunteers, and reminded veteran and freshmen elected officials that Minnesota credit unions are local and trusted financial institutions. The day focused on establishing relationships with the state's 60 newly elected officials and nurturing connections with the legislature's new Republican majority Among those providing political insight were Minnesota Speaker of the House Kurt Zellers (R-Maple Grove), House Commerce and Regulatory Reform Committee Chair Joe Hoppe (R-Chaska) and freshman Sen. Theodore J. Daley (R-Eagan). They commended the movement for its efforts to help small businesses and community members during the recession. Keynote speaker and Minnesota Department of Commerce Commissioner Mike Rothman, who recently was appointed to the position, outlined the department's priorities and stressed credit unions' role in helping the agency meet these initiatives. "Credit unions are critical to the economy," Rothman said. "Your success is the success of our families, small businesses and the local economy. Zellers applauded credit unions for the financial assistance they provide to their members. "Your work with small businesses and consumers helps them to make good financial decisions," he said. This assistance forms a solid fiscal foundation that leads to the development of innovative products that move the state forward, Zellers said. Hoppe acknowledgedcredit unions' contribution to the economy and encouraged them to remain engaged in the political process. He complimented the political effectiveness of MnCUN's governmental affairs staff and the Credit Union Day attendees, saying, "you are the best lobbyists you have." Throughout the day, credit unions met with elected officials to discuss how they help Minnesota consumers improve their financial health and well-being. "Today's legislators are looking to community leaders to do their part to help improve the state's economy," said MnCUN President/CEO Mark D. Cummins. "Credit Union Day at the Capitol gave our credit unions the opportunity to share with legislators how they are using innovative products and services to meet their members' needs and help move the state forward." The event also provided sessions that discussed 2011 legislative priorities, advocacy basics and how to effectively community with legislators.

CUNAs recognition awards make key changes for 2011

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MADISON, Wis. (2/8/11)--The Credit Union National Association (CUNA) will adjust its three recognition programs this year to better showcase the good works that have been a hallmark of the credit union movement for more than 100 years. Among the changes for 2011:
* Creation of the Desjardins Adult Financial Education Award to recognize model credit union efforts to teach personal finance concepts and skills to members and nonmembers age 18 and older. The adult award will complement the well-established Desjardins Youth Financial Education Award and bring all personal finance education activities under the Desjardins umbrella, including the award for leagues. * Modification of the Maxwell program name to the Dora Maxwell Social Responsibility Community Service Award to recognize model credit union efforts to strengthen local institutions and improve the lives of nonmembers through community outreach programs other than personal finance education. Examples include charity fund raising, volunteer income tax assistance or earned income tax credit assistance, and lobbying on behalf of school curriculum requirements. * Modification of the Herring program name to the Louise Herring Philosophy-in-Action Member Service Award to recognize model credit union efforts to improve members’ lives through programs other than personal finance education. Examples include wealth-building or debt-reduction incentive programs, outreach to underserved populations, and student-run in-school branch operations.
“We believe that these changes will serve two purposes,” said Susan Streifel, chair of CUNA’s Awards Committee and president/CEO of Woodstone CU, Federal Way, Wash. “First, adding the Desjardins award for adult education will draw attention to the need for lifelong financial literacy. Second, adding community service to the Dora Maxwell program name and member service to the Louise Herring program name will clarify the difference between Dora’s external focus and Louise’s internal aim.” Entry instructions and forms are available on CUNA’s website or through the leagues.