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Ohio governor proposes CU budget-impacting sales tax

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COLUMBUS, Ohio (2/8/13)--Ohio state-chartered credit unions could see their business costs rise as result of the governor's proposed budget, the Ohio Credit Union League reported. 

Gov. John Kasich this week officially proposed the Ohio biennium budget, which expands the products and services subject to sales tax, and lowers the overall rate to 5% from 5.5% (eLumination Newsletter Feb. 6).

"There are more than 80 services added that could be subject to the sales tax," John Kozlowski, league general counsel, told News Now. "The areas that credit unions could see affected are in accounting, auditing, fees for financial services, and debt and credit collections. Those probably are the most logical areas that would be affected."

The league is closely monitoring the proposal.

There are two general areas of concern, Kozlowski added. One is the additional burden an increased sales tax would have on credit union members.

The other is the additional burden placed on credit unions because of additional administrative costs that would be incurred, he said. "Some of credit unions' services--such as fee-based services--and products that weren't previously taxed could be subject to sales tax," Kozlowski explained. "For instance, even areas such as credit union sales of amusement park tickets could be taxed."

With Kasich's proposal, services subject to state sales tax would include financial services' fee income (non-interest income), insurance-related services (excluding premiums), legal and accounting services, professional services (consulting, advertising marketing, lobbying), and administrative and support services (collection agencies, credit rating services).

It is important to note the governor's budget is only a proposal, and will be introduced in the Ohio General Assembly and deliberated by the legislature, the league said.

Several credit union leagues, such as the one in North Carolina, are monitoring tax-reform proposals in their states.

Small CU leader involves staff in advocacy

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CHILLICOTHE, Ohio (2/8/13)--Despite her credit union's small size, Laura Roberts insists that Chivaho FCU stands tall as an advocate for cooperative financial institutions.

Roberts, CEO of the $24 million asset Chillicothe, Ohio, credit union and president of the Ohio Credit Union League's (OCUL) South Central Chapter, developed an essay contest offering a professional development scholarship to one of her credit union's seven employees to attend the Credit Union National Association's 2013 Governmental Affairs Conference, said the league (eLuminationNewsletter Feb. 6).

CUNA's 2013 GAC will take place Feb. 24-28 at the Washington Convention Center in Washington, D.C. This year's GAC theme, "Powerful Cause, Positive Effect," reflects the credit union commitment to the 95 million working Americans who rely on credit unions every day.

Preserving the tax status of credit unions is CUNA's top advocacy priority in 2013 and maintaining that status will be the main goal of credit union grassroots and political advocacy efforts during the year--and among the topics addressed at the GAC.

"I have a passion for political involvement, and I've been to the GAC and it is awesome," Roberts told the Ohio league. "Small credit unions like ours are challenged to participate because we don't have the resources." She said she "wanted to find a way for our own staff to recognize the importance of political involvement."

Chivaho's scholarship includes travel, lodging expenses, registration fees and paid time off to attend.

Essay contest participants answered the question: Why are you interested in attending the GAC? In our current economic climate, what should our credit union do to make a difference in our community and our members' lives? In reviewing the credit union strategic plan, what specific goals of the plan do you feel are most important? If you were asked to add a goal to the plan, what would it be?

The contest winner, Gina Plummer, will detail her GAC experience in a written report that she will share with the credit union's board of directors.

Legislators on the GAC speaking schedule include: Speaker of the House Rep. John Boehner (R-Ohio); Democratic National Committee Chairman and credit union supporter Rep. Debbie Wasserman Schultz (D-Fla.); and credit union champions Sen. Mark Udall (D-Colo.), Rep. Ed Royce (R-Calif.) and Rep. Brad Sherman (D-Calif.).

House Majority Leader Eric Cantor (R-Va.)., House Financial Services Committee Chairman Jeb Hensarling (R-Texas), House Financial Services Committee Ranking Member Maxine Waters (D-Calif.), House Majority Whip Kevin McCarthy (R-Calif.), House Financial Services Committee senior member Spencer Bachus (R-Ala.), Rep. Gregory Meeks (D-N.Y.), Sen. Elizabeth Warren (D-Mass.), Sen. Jon Tester (D-Mont.), Rep. Peter King (R-N.Y.) and Rep. Blaine Luetkemeyer (R-Mo.) are also slated to speak at the 2013 GAC.

Relief funds distributed 331 Hurricane Sandy grants

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Joni Flannery (right), Teachers FCU's Amityville branch manager, presents Patricia McAuiliffe of Lindenhurst, N.Y., a check on behalf of the New York Credit Union Foundation Disaster Relief Grant program for damages caused by Hurricane Sandy. (Photo provided by the New York Credit Union Foundation)
ALBANY, N.Y. (2/8/13)--The credit union community has raised enough money to provide 331 Hurricane Sandy victims and two credit unions disaster relief grants to help fund their recovery.

Funds were raised and distributed through the National Credit Union Foundation CUAid program and the New York Credit Union Foundation (NYCUF) statewide Disaster Relief Fund.

"The devastation caused by Hurricane Sandy was significant, but so was the outpouring of support we saw from the credit union community in its aftermath," said William J. Mellin, president/CEO of the Credit Union Association of New York. "Thanks to our national and statewide disaster relief funds, we have been able to step in and help hundreds of families with their recovery."

Through the CUAid program, NCUF awarded more than $260,000 in grants to credit union employees, volunteers and members in New York and New Jersey. A total of 94 New York applicants received CUAid grants.

NYCUF's statewide Disaster Relief Fund raised and awarded $149,158 to 237 New York credit union employees, volunteers and members from 22 credit unions, and to two credit unions--Oceanside Christopher FCU in Oceanside, and Entertainment Industries FCU, New York City.

Banking mobile apps missing the boat, says study

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SEATTLE (2/8/13)--A disparity exists between what consumers want in mobile banking applications and what their financial institutions are offering them, according to a new survey. That means credit unions have an opportunity to seize a service advantage over their for-profit competitors.

"There's an app for everything in today's mobile-driven consumer environment. And, as the economy has suffered over the past few years, consumers are turning to apps for financial management as well," said Brian Moore, financial services market manager for Varolii Corp., which conducted the study. "However, our study shows that most banks are failing to deliver on consumer expectations with first or second generation mobile applications."

Nearly two in three consumers believe it's their financial institution's responsibility to immediately alert them when they have a low balance or insufficient funds to pay a bill, according to the study. Nearly 70% of survey respondents said a banking application could have helped them avoid an overdraft or bounced check.

But 68% of respondents said they have not been notified of a low balance or reminded to make a bill payment. And, the younger consumers are, the more strongly they believe in the importance of financial institutions being proactive--73% of 18- to-24-year-olds believe they should receive notifications from their financial institutions versus 56% of those over 55 years old.

Consumers also prefer to be contacted through multiple digital channels. Survey respondents said they want to receive these notifications and reminders by e-mail (47%), text message (22%) and through their smartphone application (13%).

Looking for Hispanic members? Know their mobile use

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NEW YORK (2/8/13)--Credit unions trolling for Hispanic members can pick up pointers about serving them from a recent survey examining this group's use of smartphones vs. tablets for mobile banking and determining how much Hispanics interact with their primary financial institution's mobile social media page.

Hispanics use both smartphones and tablets, but they have preferences, depending on the type of task involved, according to a 2012 Hispanic Mobile Banking Survey, a study of people age 18 to 70 by Zpryme and ThinkNow Research ( Feb. 6). 

They prefer smartphones for checking balances (80%), receiving bank alerts (43%), and asking for customer service (12%).  However, they are more apt to use tablets for all other tasks, including viewing transactions (66%), transferring money (46%), paying bills (46%), and finding the nearest bank/ATM (30%). The differences in preference were most pronounced (averaging about a 10- percentage point difference) in transferring money, paying bills.

Both devices received less than 14% use in several other areas. The tablet was used more frequently for editing account preferences (14%), managing investments (11%), and depositing checks remotely (11%). The two devices tied, at 4% in using them for applying for a loan or credit card.

The other aspect of the study examined the percentage of Hispanic respondents who have interacted with their bank's mobile media page and what social network channels they used.  Interactions were defined as visitations, shares, likes, video views, follow, posts and comments.

The most popular network was Facebook, with 44% of those surveyed using this network, nearly twice that of the next most popular contender, Google. YouTube was used by 17%, Twitter by 15% and Pinterest by 4%.

One in four small businesses lack financing: NSBA report

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WASHINGTON (2/8/13)--Financing markets for small businesses are starting to thaw, with 73% of small businesses surveyed reporting the ability to gain financing, the highest in four years. However, one in four small businesses still can't get financing for their capital business needs, said the National Small Business Association (NSBA).

NSBA's 2012 Year-End Economic Survey piles on another log in the stack of reasons why credit unions--which loaned to small businesses through the recession when banks abandoned them--are seeking legislation to allow them to continue providing more small-business loans, said the Credit Union National Association.

CUNA and credit unions are urging Congress to raise credit unions' member business lending (MBL) cap to 27.5% of total assets, up from the current 12.25%.  Doing so would generate $13 billion available for MBLs--and increase jobs by 140,000 in the first year without costing the taxpayer.  Enhancing credit unions' charter to include increased MBL authority is one of CUNA's top 10 priorities for 2013 (News Now Jan. 3).

Using data from as far back as 1993, NSBA has found a "clear correlation to a small-business owner's ability to hire and his/her ability to get financing.  While the last four years have seen a small-business community struggling to stay afloat, we also have seen their ability to get capital diminish."

The study indicates small businesses are less optimistic about their outlook and the U.S. economy than a year ago. "Despite modest gains in the number of small businesses projecting U.S. economic expansion, the overwhelming majority--86%--still believe the U.S. economy will be flat or recessionary in the coming year," said SNBA President/CEO Todd McCracken. "Half of all small businesses project no growth whatsoever in their own business year," he added.

However, the survey's timing --conducted during the fiscal cliff debates--could have lowered optimism, said NSBA.

Other findings:

  • Thirty-eight percent of those surveyed expect to grow in the coming year--the lowest indication since researchers began asking the question in December 2009;
  • Hiring remains stagnant, with 16% of those surveyed projecting decreases in employment size in the next, up from 12%;
  • Economic uncertainty is the No. 1 challenge facing small-business owners, followed by regulatory burdens and health care costs; and
  • Reducing the national deficit is the No. 1 thing small business owners want from Congress.

WOCCU seeks young CU leaders for internat'l scholarships

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MADISON, Wis. (2/8/13)--
At the presentation of the 2012 World Council of Credit Unions (WOCCU) Young Credit Union People (WYCUP) scholarships were, from left: WOCCU Chair Manuel Raines;  WYCUP recipients Miriam De Dios (U.S.), Edyta Grzybowska (Poland), Brian Aalbers (Canada), Wesley Diniz Alves (Brazil) and Maire Doyle (Ireland); WOCCU President/CEO Brian Branch; and WOCCU Director and Awards Committee Chair Ron Hance. (Photo provided by the World Council of Credit Unions)
The deadline for nominations to the World Council of Credit Unions' (WOCCU) Young Credit Union People (WYCUP) scholarship program is June 3.

The scholarship program is an international networking and educational opportunity for promising credit union leaders, said WOCCU. The program and awards ceremony will take place at the 2013 World Credit Union Conference in Ottawa, Canada, July 14-17.

"Outstanding young leaders are critical to the future success of the international credit union movement," said Brian Branch, WOCCU president/CEO. "WYCUP is an excellent opportunity to broaden the horizons and expand the depth of industry knowledge among this group of credit union professionals."

The program seeks individuals who have made significant contributions to their credit union organizations and have the potential to make a global credit union impact. Credit unions and credit union organizations affiliated with WOCCU can nominate young leaders to compete for the scholarship.

To be eligible, nominees must:

  • Be sponsored by their credit union or credit union organization to attend the conference in Ottawa;
  • Be 35 years or younger as of this past Jan. 1; and
  • Submit a completed nomination form to WOCCU with supporting materials by June 3.
Five young leaders will receive WYCUP scholarships at the Ottawa conference for an all-expense-paid trip to the 2014 World Credit Union Conference in Australia.  All nominees will receive recognition in Ottawa, where they can participate in events and networking sessions organized specifically for young leaders.  Conference registrants age 35 or younger also qualify for a discounted registration fee, regardless of whether they compete for the scholarship.

For more information, use the links.