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CU System briefs (02/28/2011)

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* ORLANDO, Fla. (3/1/11)--Insight CU, a $469 million asset credit union based in Orlando, was chosen by the Lake County Sheriff's Office to host 22 visiting Brazilian executives so they could tour an American financial institution. The international program was developed by the Sheriff's Office. The visit included a tour of Insight's Eustis branch, followed by a question and answer session (Orlando Sentinel Feb. 27) … * PHOENIX (3/1/11)--Arizona State CU has been named the No. 1 credit union in Arizona by Ranking Arizona: The Best of Arizona Business for the fifth time. The rankings are published annually by Arizona Business Magazine. Residents and business leaders throughout the state participated in the online opinion poll at the official Ranking Arizona website (Business Wire Feb. 22) …

Canadas Desjardins Group sees 34 surge in earnings

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MONTREAL, Quebec (3/1/11)--The Desjardins Group reported a 34% surge in earnings--to $1.44 billion--last year as its caisses populaires (credit unions) network stepped up its home mortgage and business lending activities and its' insurance and fund management units improved their performance. As a result, Desjardins--the largest financial cooperative in Quebec--has declared member dividends of $307 million for 2010, up from $282 million in 2009 and $186 million in 2008 (Montreal Gazette Feb. 26). The dividends will be credited to members after formal approval during the Desjardins Group's annual meetings in April. Desjardins CEO Monique Leroux said the organization is letting go some of its operating activities to focus more on longer-term strategies, governance, organization and expansion outside Quebec. She noted that the farming sector in Ontario is underserved by big banks and that Desjardins has a strong presence in eastern Ontario. Desjardins' $443 million acquisition of Western Financial Group should be in place next month, she said. Roughly half of Desjardins Group's total revenues now are accrued from outside Quebec.

CU loans and savings fall in January

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MADISON, Wis. (3/1/11)--January’s Monthly Credit Union Estimates report reflects little change in many of the key operating ratios the Credit Union National Association (CUNA) tracks: top-line results for asset quality, liquidity--measured both by the loan-to-share ratio and the liquidity ratio--and capital each are unchanged compared with year-end 2010 results, according to a CUNA economist’s analysis.
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Credit union loans in January totaled $575.4 billion, compared with 584.9 billion in January 2010. Credit union loans outstanding decreased 0.7% during January, compared with a 0.1% decrease in December 2010. Adjustable-rate mortgages led loan growth, declining less than 0.1%, followed by used-auto loans, unsecured personal loans, and fixed-rate mortgages, which decreased 0.3%, 0.7% and 1.2%, respectively. Home equity loans also dropped 0.1% while new auto loans fell 1.5% and credit card loans went down 2%. Loan portfolio contraction--a reflection of consumer debt reduction efforts--continued in January, though the pace of the reductions (-0.7%) accelerated slightly compared to December results (-0.1%), Mike Schenk, CUNA vice president of economics and statistics, told News Now. “This isn’t likely a harbinger of more dramatic declines: that’s because this looks like a typical pattern. On a seasonal basis, loan growth, especially credit card growth, tends to be relatively strong in December and then relatively weak in January as consumers concentrate on repaying holiday debts,” Schenk said. “So in the current economy, a slight decline followed by a slightly larger decline isn’t terribly surprising. “Having said this, we do expect loan demand to remain fairly weak in the first quarter and to increase weakly as the year progresses,” he added. “Labor markets will continue to have a big influence on confidence, spending and borrowing behavior. We expect labor markets to improve in 2011, though not substantially, so consumers will continue to exhibit this cautious behavior.”
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That also will mean that most savings growth is apt to be concentrated in short-term, liquid accounts. Few members will want to lock in longer-term low yields, Schenk said. Credit union savings in January totaled $802 billion--or $33.9 billion more than the $768.1 billion in January 2010. Credit union savings balances fell 0.2% in January, compared with a 0.5% increase during December 2010. Money market accounts led savings growth, rising 0.7%, followed by regular shares, which also went up 0.9%, and one-year certificates, which decreased 0.5%. Individual retirement accounts declined 0.9%, and share drafts dropped 2.4%. Credit unions’ 60-plus-day delinquencies remained constant at 1.7% during January. The loan-to-savings ratio stayed at 72% in January. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained constant at 19%. The movement’s overall capital-to-asset ratio stood at 10% in January. The total dollar amount of capital is $94 billion.

Mobile banking tops IT priorities in poll of 83 CUs

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BOSTON (3/1/11)--Basic mobile banking, online account opening, mobile payments and remote deposit capture (RDC) are the top information technology (IT) ventures shaping the future of credit unions trying to leverage technology to meet their objectives, according to a new report. The report, from Aite Group, a Boston-based research firm, is based on an online survey of 83 U.S. credit unions during December and January. The report details a demand for more than 25 different technologies among those credit unions surveyed. Credit unions rated the likelihood of whether they would invest in certain categories of technologies. Basic mobile banking (check balances/transfer funds) drew 57% citing it as "high priority," followed by online account opening (47%), mobile payments (45%), RDC (41%) , consumer online banking application (36%), e-statements (34%), personal financial management tools (31%); small-business online banking application (28%); mobile person-to-person and RDC for business members (24% each), and member analytics/business intelligence tools, 18%. Technologies receiving a "probably will invest" was mobile person-to-person payments, with 28% citing this. None of the other categories received more than 23%. Credit unions have seen far fewer failures than their bank counterparts over the past few years, but have had to alter their strategies and business models to operate in "the new normal," said the 38-page report. "These institutions continue to be challenged by stringent regulatory requirements, declining loan portfolio balances, and rising losses associated with fraud," said Aite. "The role technology plays in credit union strategies has grown more critical than ever before as a way to overcome these challenges." Technologies will be used to attract new members, compete against larger institutions, and ensure future growth and success. Christine Barry, research director at Aite and author of the report, noted that "several opportunities exist for credit unions in the current marketplace. By leveraging technology such as the online and mobile channels, and moving toward new strategies, to better target small-business customers, for example, credit unions will be better positioned to take advantage of these opportunities," Barry added.

Tips for establishing a social networking policy

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FARMERS BRANCH, Texas (3/1/11)--The opportunity to “connect” with more members and non-members than ever before make social networking an enticing platform for credit unions looking to extend their presence. An article from the Texas Credit Union League offers tips for crafting a social networking policy. “There’s no doubt that social media is a game-changing initiative that brings with it an unrivaled ability to provide timely information to literally hundreds of millions of users,” Steve Gibbs, assistant vice president of shared compliance resources with Credit Union Resources Inc., told the league (LoneStar Leaguer Feb. 25). “But all the technology and connections made possible in today’s landscape won’t matter tomorrow if your credit union is operating without establishing some guidelines and a social networking policy to protect your institution and, more importantly, your members,” he added. About 81% of respondents viewed social media as a prime learning tool for employees, according to a recent study from CARA® Consulting’s 2010 survey, “How Informal Learning is Transforming the Workplace: A Pulse Survey on Social Media’s Impact on Informal Workplace Learning.” And 98% confirmed that social media have changed how users learn and access information, the league said. “Ignoring the impact of social media can be a mistake, but joining Facebook or YouTube just to join them and start putting information out there for visitors is almost always a bigger one,” Gibbs added. “It should be a top priority for your institution to develop a social media policy if you are planning on bringing your organization into the online communities.” But where do you begin in establishing an effective policy? Gibbs advocates assessing the organization’s current status (size, time invested, etc.) and what risks may be involved (everything from the defaming reputational risks to legal and regulatory risks). After that, it is a matter of balancing a credit union’s social media output, along with employees’ use of social media and what content they share that may relate back to a credit union. “It’s not about ‘policing’ content your staff shares, but it is about designating an efficient social media contact for your team, someone who is active and proficient in utilizing social media and someone who is easy to get a hold of in the event your members or online community has questions,” Gibbs said. Other essential areas of concern for your policy should address technological safeguards, universal messages to be communicated in a significant development and other related functions. “The bottom line is that technology is changing the way we communicate and if we are not embracing these new platforms, we’re going to be missing out on educating our staff, members and communities,” Gibbs said. “But in doing so, we also need to be prepared to monitor and maintain our activities; otherwise our messages may end up doing more harm than good.”

Minn. CUs talk interchange MBL with new congressman

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CAMBRIDGE, Minn. (3/1/11)--Minnesota credit unions met with the state’s newest congressman to discuss interchange and member business lending (MBL) during a meet-and-greet with U.S. Rep. Chip Cravaack (R-8) on Friday at Minnco CU in Cambridge. Twenty-five professionals and volunteers from six credit unions attended the introductory meeting to discuss the current issues important to the movement.
Click to view larger image Welcoming the state’s newest congressman, Minnesota credit unions held a meet-and-greet with U.S. Rep. Chip Cravaack (R-8) (left) on Friday to discuss interchange, member business lending, and other credit union issues. (Photo provided by the Minnesota Credit Union Network)
Credit unions focused their discussion with Cravaack on the impact that interchange and MBL have on Minnesota consumers. Attendees stressed the inadequacy of the Federal Reserve Board’s proposed interchange rates and the effect a reduction in rates would have on credit unions’ ability to offer economical checking products. Cravaack recognized credit unions’ concerns and encouraged them to continuing working with elected officials on the issue. On the topic of MBL, credit unions shared how increasing the MBL cap would positively impact small businesses. Citing statistics compiled by the Credit Union National Association (CUNA), credit unions stated that an MBL increase would generate an additional $47 million in small business loans and more than 500 jobs in the eighth congressional district. Cravaack acknowledged the importance of small businesses in the district and stated that he is interested in looking at any avenue to strengthen them. “The Minnesota Credit Union Network (MnCUN) recognizes the importance of working together with the members of the state’s congressional delegation,” said Mara Humphrey, MnCUN vice president-governmental affairs. “Our meeting with Rep. Cravaack enabled us to establish an open line of communication with the state’s newest representative, and we look forward to working with him on issues in the future.” This week Minnesota credit unions will further develop their relationship with Rep. Cravaack during a hill visit scheduled as part of CUNA’s Governmental Affairs Conference. Minnesota credit union professionals and volunteers attending the conference will also visit the other members of Minnesota’s congressional delegation. CUNA and credit unions are trying to get Congress to increase credit unions’ MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $10 billion in loans into the economy and create as many as 100,000 new jobs, with no cost to taxpayers, CUNA said.

Ohio league educates state Senate committee on CUs

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COLUMBUS, Ohio (3/1/11)--The Ohio Credit Union League took the opportunity a couple of weeks ago to make sure members of the Ohio Senate Financial Institutions Committee are knowledgeable about credit unions, said the league. League General Counsel John Kozlowski testified before the committee and provided insight into the uniqueness of credit unions and how they make a difference in their communities (eLumination Newsletter Feb. 23). His testimony included examples of Ohio credit unions' member business lending initiatives, innovative and affordable financial products, financial education outreach, and student-run branches. The committee was also presented with data outlining credit unions' market share of assets, deposits and business lending.

Missouri CUs fed lawmakers talk about interchange

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ST. LOUIS (3/1/11)--Missouri credit unions shared their concern about the Federal Reserve's debit interchange proposal with federal lawmakers last week. U
Click to view larger image U.S. Rep. Blaine Luetkemeyer (R-Mo.), center, discusses interchange with Missouri credit unions Wednesday. (Photo provided by the Missouri Credit Union Association)
.S. Sen. Claire McCaskill (D-Mo.) hosted town meetings across the state ( The Missouri difference Feb. 25). At a meeting in Blue Springs Thursday, Mazuma CU President/CEO Rob Givens thanked McCaskill for voting against adding the debit interchange provision in the Dodd-Frank Act. McCaskill also wrote a letter to the Federal Reserve in December expressing concerns about the interchange proposal. Givens said he asked McCaskill to continue requesting that the Fed slow down the process of implementing the debit interchange provision. "She agreed that slowing down would be a very good thing," he told the Missouri Credit Union Association (MCUA). Interchange was also the main topic of conversation with U.S. Rep. Blaine Luetkemeyer (R-Mo.), who met with credit union representatives at the Missouri Credit Union House in Jefferson City on Feb. 23. Luetkemeyer took part in the House Financial Services subcommittee hearing on the Federal Reserve's debit interchange proposal on Feb. 17. He shared his perspectives on the hearing and both the interchange proposal and the overall Dodd-Frank Act, MCUA said. "Credit unions, along with community banks and insurance companies, weren't part of the problem, but you've been swept up in this," Leutkemeyer he said. "Credit unions weren't part of the problem, but you can be part of the solution if you are allowed to be." He noted many lawmakers are willing to slow down implementation of the debit interchange proposal to conduct a more thorough review of the impact and intent of the legislation, and encouraged Missouri credit unions to urge their congressional delegation to delay the debit interchange process during meetings on Capitol Hill Wednesday and Thursday. Nearly 40 people from Missouri credit unions are participating in the Credit Union National Association's Governmental Affairs Conference this week in Washington, D.C.

Richmond Fed names Ratcliff to regional CDIAC

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RICHMOND, Va. (2/28/11)--The Federal Reserve Bank of Richmond has appointed Carl Ratcliff, president/CEO of ABNB FCU, Chesapeake, Va., to its regional Community Depository Institutions Advisory Council (CDIAC). Ratcliff, who will serve a term that will expire Dec. 31, 2014, is the only credit union representative appointed to the 13-member council. The CDIAC will provide input to the Richmond Fed on the economy, lending conditions and other issues. Members were selected from representatives of banks, thrifts and credit unions in the Fifth Federal Reserve District. One member of the council will serve with counterparts from other Reserve Banks on the national CDIAC of the Federal Reserve Board, which will meet with the board twice a year in Washington. For the full list of appointees, use the link.

NCUA files second amended complaint in WesCorp suit

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LOS ANGELES, Calif. (2/28/11)--The National Credit Union Administration (NCUA) filed its second amended complaint in its $6.8 billion lawsuit against directors and officers of Western Corporate FCU (WesCorp) in a U.S. District Court in Los Angeles. The allegations in the complaint, filed Feb. 22, do not deviate much from NCUA's first amended complaint. In that complaint, NCUA alleged negligence and breach of fiduciary duties. The second amended complaint alleges that WesCorp officers and directors breached fiduciary duties by failing to impose "prudent concentration limits" on WesCorp's increasing concentration of private label mortgage backed securities (MBS) and Option ARM MBS. Defendants in the case will have the opportunity to answer the second amended complaint by filing another motion to dismiss the case. The court has not yet established the timetable for filing such pleadings in the case. U.S. District Judge George Wu allowed NCUA to file the second amended complaint during a tentative ruling that favored the former directors. In that tentative ruling, Wu warned that NCUA would have to prove the directors are not covered by California's Business Judgment Rule, which provides directors "broad discretion in making corporate decisions and [allows] these decisions to be made without judicial second-guessing in hindsight (News Now Feb. 3). He also ruled in another tentative ruling that the allegations of improper motives or conflict of interest are insufficient and said "the end result [of the amended complaint] might very well be the same."

Vote for ICU Day theme is due March 8

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MADISON, Wis. (2/28/11)--Credit union staff can vote for this year's theme for International Credit Union Day, which will be Oct. 20. The U.S. team is looking for two themes to submit to the international committee for consideration. Follow the link to rank the six themes suggested by U.S. credit unions. The poll is open through March 8. Themes to be ranked include:
* It Pays to Belong to a Credit Union; * Credit Unions: Here to Serve. Here to Stay; * Make the Change to a Credit Union; * Credit Unions: People Helping People Succeed; * A Smarter Choice: Credit Unions Build a Better World; and * Credit Unions Build a Better World.
Credit unions can also receive updates on the ICU Day theme, art, coloring page and celebration plans by subscribing to a free newsletter. Use the link. ICU Day was established in 1948 and celebrates the history, tradition and spirit of the international credit union movement. It is held annually on the third Thursday of October.

CU System briefs (02/25/2011)

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* MADISON, Wis. (2/28/11)--Scott Sysol, CUNA Mutual Group chief information security officer and vice president of information technology, has been named the 2011 Chief Security Officer of the Year by SC Magazine. The publication's awards recognize security's key contributors and outstanding products. It recognized Sysol's efforts in leading CUNA Mutual's end-to-end data protection project, which involves meeting or getting ahead of compliance mandates, while simultaneously addressing internal security policies and privacy concerns. Illena Armstrong, editor-in-chief of SC Magazine, noted that "corporate executives view Scott as a leader who tempers serious security needs with what is best for the business, given current circumstances. At the end of the day, it's about protecting sensitive information." Information technology security vendor companies nominate entries for the awards … * POUGHKEEPSIE, N.Y. (2/28/11)--Hudson Valley FCU (HVFCU) was named one of the 23 large sized Best Companies to Work for in New York for 2011 by the New York State Society for Human Resource Management and the Best Companies Group, an independent company managing the Best Places to Work programs on state, regional and national levels in the U.S. The Poughkeepsie-based HVFCU will be recognized at an awards dinner May 5. Companies were evaluated on their workplace policies, practices, philosophies, systems and demographics … * LATHRUP VILLAGE, Mich. (2/28/11)--Michigan First CU is searching for a Gen Y spokester for its new Young & Free Michigan program. The spokester will connect with young people through social media networks, local events and more, and develop entertaining educational content, tips and tools to help Generation Yers manage their lives and finances. Applicants must submit a 60-second YouTube video and write a blog post that demonstrates their writing, editing and creative skills by April 4. Three finalists will be selected,and the winner will be selected in an online vote. The winner will become an employee of the credit union for one year, receiving a salary of $30,000 and perks such as a smart phone, Apple laptop and digital video camera. The Lathrup Village-based credit union is the only credit union in Michigan offering the program …

Heritage Family Shared branching big hit with members

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RUTLAND, Vt. (2/28/11)--A little more than a year after it was rolled out, shared branching is a hit with members of Heritage Family FCU, Rutland, Vt. Heritage Family FCU has received positive feedback from members who like the convenience of accessing their accounts when they’re not near a branch, Matt Levandowski, executive vice president of marketing at the credit union, told the Association of Vermont Credit Unions (Newslines Express Feb. 25). “We’ve had stories from University of Vermont students who have their account with us here in Rutland and are able to access it at a North Country FCU or Vermont FCU branch rather than having to open up another account in Burlington,” he said. Levandowski also told the story of a couple who was in New York City to visit their son. When they arrived, their son was carrying $800 in cash and asked the father to hold onto it for him. The father didn’t want to have that much cash in New York, so he logged on to the Heritage Family FCU website, found a shared branch two blocks away, and walked down and deposited the money into his account, “which he thought was the coolest thing in the world,” he said. Levandowski discussed the volume of transactions that members of other credit unions have conducted at Heritage Family FCU branches. “It’s amazing to note that all of our branches handle transactions from people from other credit unions,” he said. Heritage Family FCU, with $254 million in assets, has members nationwide. “We’ve had transactions from Heritage members in 38 out of 50 states,” Levandowski said. “It’s great, especially for people in the armed forces.”

St. Louis Fed taps Barks Rissel for regional council

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ST. LOUIS (2/28/11)--The Federal Reserve Bank of St. Louis announced the appointment of 12 executives of smaller financial institutions--including two credit union CEOs--to the bank’s new Community Depository Institutions Advisory Council (CDIAC). Glenn Barks, CEO, First Community CU, Chesterfield, Mo., and William J. Rissel, president/CEO, Fort Knox FCU, Radcliffe, Ky., were appointed to three-year and two-year terms, respectively. The council, drawn from communities across the Eighth District, will meet twice a year at the St. Louis Fed to advise President James Bullard on local credit, banking and economic conditions. The Eighth District includes the state of Arkansas, and parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee. “Community financial institutions are vital in creating and sustaining economic growth in our nation’s communities,” said Bullard. “As a key source of credit for small businesses, these institutions provide an important perspective on the relative health of the U.S. economy. “The 12 appointees to our council are leaders in their communities and bring with them a diverse range of backgrounds and experiences that will help us paint a more complete economic picture of our region,” he added. The St. Louis Fed CDIAC will hold its inaugural meeting March 1-2.

Maine league testifies on youth fin lit before lawmakers

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PORTLAND, Maine (2/28/11)--Maine credit unions’ and the Maine Credit Union League’s efforts in coordinating and growing Financial Fitness-Money Management Experience Fairs received an enthusiastic response from members of the Maine Legislature’s Education Committee during a recent hearing, the league said. Testifying in support of L.D. 184--bill that would promote the financial literacy of high school students--Quincy Hentzel, league director of governmental affairs, highlighted the leadership role that Maine’s credit unions have taken to build and promote money management skills to Maine students (Weekly Update Feb. 25). Members of the Education Committee said they were impressed by the efforts of Maine’s credit unions and the innovative approach to exposing more students to money management skills, the league said. The league also distributed a one-page flyer highlighting and explaining the resources and initiatives Maine’s credit unions have available to partner with schools on financial education. On Wednesday, the committee voted 10-3 to Ought To Pass a bill that requires the Maine Department of Education to pull together information on all financial literacy programs available to schools and disseminate that information annually to all schools in the state. The programs offered by credit unions would be part of that listing. Also, during the league’s testimony to the Education Committee on the Financial Literacy bill, the committee expressed interest in an online education program that contains modules to help students and young adults learn about money management and personal finance. “The committee really loved [the program] and the fact that credit unions are offering this program at no cost to schools and to members,” Hentzel said. “Everyone realizes how important financial literacy is, and credit unions are clearly at the forefront of this issue and the committee recognized it,” Hentzel said.

Sens. Hagan Bennet write Fed on interchange

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WASHINGTON (2/28/11)--In a letter following hearings in the U.S. House and Senate on the Federal Reserve Board’s initial rulemaking on interchange, U.S. Sens. Kay Hagan (D-N.C.) and Michael Bennet (D-Colo.) called on the board to create a “meaningful and workable small issuer exemption” before issuing its final rules. Hagan and Bennet’s Feb. 23 letter was in direct response to Federal Reserve Board Chairman Ben Bernanke’s testimony to the Senate Banking Committee last week, according to the North Carolina Credit Union League (NCCUL) (Weekly Update Feb. 24). The letter echoed many concerns expressed by lawmakers from both parties in Congress, and provided a signal that the grassroots efforts of credit unions had been heard by Congress. In addition to the small issuer exemption, Hagan and Bennet’s letter also called on the Fed to more adequately study the true transaction costs for institutions that are not exempt. “We would also like the board to adequately account for fraud prevention costs, which issuers typically absorb, when determining the final rule,” the letter said. “We appreciate Sens. Hagan and Bennet taking the time to express their concerns on interchange in writing,” said Dan Schline, NCCUL senior vice president of association services. He added that the letter demonstrates that “members of Congress are deeply concerned that the Federal Reserve Board’s initial rules on interchange have missed the boat on the intent of Congress when it passed the Durbin amendment.” Schline noted that Hagan will speak to nearly 100 North Carolina credit union representatives in Washington, D.C., this week for the Credit Union National Association Governmental Affairs Conference. “It will be a great opportunity to hear from the senator and to of course thank her for her efforts on interchange,” Schline said.

CUNA WOCCU to Basel Standards burdensome to CUs

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BASEL, Switzerland (2/28/11)--The Basel Committee on Banking Supervision should keep the "principle of proportionality" in mind when it implements international standards that could negatively affect smaller financial institutions--including credit unions. That was the message shared by World Council of Credit Unions (WOCCU), Credit Union National Association (CUNA) and Brussels, Belgium-based World Savings Bank Institute (WSBI) shared with the Basel Committee earlier this month.
Click to view larger image Broad application of international financial standards without regard to size may threaten the safety of credit unions in many countries, Dave Grace, left, World Council of Credit Unions senior vice president of association services told the Basel Committee. He and Bill Cheney, right, president/CEO of the Credit Union National Association, visited the committee earlier this month. (Photo provided by World Council of Credit Unions)
The delegation cited concerns that the cumulative effect from blanket applications of anti-money laundering and terrorist financing obligations and other pending requirements could be “burdensome” to the continued growth and operations for smaller institutions. It also said those requirements already have created issues in some developing markets. The result has been an unnecessarily heavy regulatory burden for smaller institutions, including credit unions. "We're witnessing over-application of the international standards in developing and developed markets, creating a significant regulatory burden for smaller financial institutions such as credit unions,” said Dave Grace, WOCCU senior vice president of association services, who led the delegation with Bill Cheney, CUNA president/CEO. “Today, we made progress in getting this message across to financial regulators at the highest level.” Other issues that caused concern include non-proportionally adjusted application of international financial reporting standards, operational risk-management requirements, the application of Basel III requirements and pending liquidity standards. The delegation also raised concerns about aspects of the recently issued Microfinance Activities and the Core Principles for Effective Banking Supervision, specifically parts of the third principle that limit the maximum number of members and geographical scope that credit unions can serve. "(These rules) will suppress financial inclusion agendas, significantly hamper institutional sustainability and send a signal that, beyond a certain number of members, a cooperative ceases to be a cooperative," said Grace and Chris DeNoose, WSBI managing director in a follow-up letter to Stefan Walter, the Basel Committee's general secretary. One of the strengths smaller institutions have in many developed and developing countries is access to supplemental capital, a situation from which U.S. policymakers could learn, according to Cheney. "All other advanced credit union systems have the ability to access supplemental capital," Cheney said. "The global financial standard-setters clearly see a value in credit unions having access to additional capital because of the added strength and security it provides to institutions." Grace and Cheney were joined by WSBI staffers Judith Ay, senior adviser, and Matthias Blume, regulatory affairs manager, during their Feb. 17 visit to the Basel Committee.

Fox taps CUNA for credit-monitoring advice

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MADISON, Wis. (2/28/11)--The Credit Union National Association (CUNA) provided advice to consumers about credit-monitoring services, in a Thursday article by Fox At issue is whether such services are worth the cost to consumers to keep tabs on their credit reports, improve their credit scores, and monitor suspicious activity and fraud. After shopping around for these services, consumers should consider using a brand that they know well or an institution where they already do business, Mike Schenk, CUNA senior vice president of research and statistics, told Fox Business. “It’s always a good idea to go to someone you trust--if you’ve had a relationship with a financial institution for a while and feel it operates in your best interest and the fees … are fair and transparent, that would be a good place to start,” Schenk added. “It’s a big business, so there are a lot of providers of these services out there that generate a lot of income by selling consumers protection that they don’t really need or levels of protection that are far in excess of what they need,” he concluded. To read the article, use the link.

CU System brief (02/24/2011)

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* NEW YORK (2/25/11)--Michigan's Save-to-Win program was featured in the Freakonomics blog on The New York Times website Wednesday, according to the Michigan Credit Union League. The blog said the program, a savings program with a lottery element, had named its second winner, Charmain Hanners of Alpena Alcona Area CU, Alpena, Mich. Hanners won the grand prize of $100,000. To view the article use the link …

Banking CU bills make progress in New Jersey

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TRENTON, N.J. (2/25/11)--New Jersey Gov. Chris Christie signed into law a measure to create a state Banking Development District Program to encourage banks to establish branches in underserved areas, said the New Jersey Credit Union League (The Daily Exchange Feb. 24). While the bill's definition of a bank includes credit unions, credit unions technically are excluded because under a 40-year-old statute, they are barred from becoming eligible municipal depositories. The statue, the Government Unit Depository Protection Act (GUDPA), was enacted before credit union deposits became federally insured. A bill that would update the GUDPA law to allow federally insured credit unions to quality as eligible public depositories has passed the state Senate and is pending in the Assembly Financial Institutions & Insurance Committee. Also, the state Assembly passed a bill to make permanent a temporary authorization that expanded the range of investment vehicles for the New Jersey Cash Management Fund and state pension funds to include obligations guaranteed by the Federal Deposit Insurance Corp. or the National Credit Union Share Insurance Fund. The Senate must pass the bill next before it goes to the governor for signature. "While both developments are moves in the right direction, they fall short of enabling credit unions to better serve New Jersey's communities and property tax payers," said NJCUL President/CEO Paul Gentile. "The irony isn't lost on credit unions. It would seem that banks need an incentive to do what credit unions readily embrace, and yet even when technically included, credit unions are still excluded because of a decades-old conflicting statute," he added Although credit unions are considered safe for municipal deposits and pension funds channeled through the state, "local governments are still denied the benefits of increased competition when soliciting bids from potential depositories," he said.

McGrath gets 14 years in CU National Mortgage scam

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NEWARK, N.J. (2/25/11)--The New Jersey man at the center of the fraudulent mortgage loans that defrauded nearly $140 million from 28 credit unions, Fannie Mae and others was sentenced to 14 years in prison Thursday by U.S. District Judge Katharine Hayden in Newark (Reuters Feb. 24). Michael McGrath, 47, of Pinebrook, N.J., was president of the U.S. Mortgage Corp. and a principal of its subsidiary, Credit Union National Mortgage Co. Both companies filed for a Chapter 11 bankruptcy during February 2009 in Newark. McGrath admitted to conspiring with others from January 2004 to January 2009 to fraudulently sell credit union loans and use the proceeds to finance his company's operations and investments for himself. He also admitted diverting the funds that should have been paid to credit unions on mortgage loans he sold to Fannie Mae to pay for bad investments (News Now Aug. 12, 2010). McGrath pleaded guilty in June 2009 to two counts of conspiracy, including one to commit mail and wire fraud and one to commit money laundering, stemming from the scheme. He faced up to 30 years in prison under federal guidelines but his plea bargain called for a prison term as short as 12 and a half years. His lawyer told Reuters McGrath helped recover $13 million of the losses. The fraud sparked a number of lawsuits against Fannie Mae and insurance companies by credit unions seeking to recoup some of the losses. Four credit unions are still pursuing civil litigation against Fannie Mae.

Prize-linked savings bill passes Wash. state Senate

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OLYMPIA, Wash. (2/25/11)--One of a handful of proposals that seem to be on a fast track through the Washington Legislature, the Northwest Credit Union Association’s (NWCUA) Prize-Linked Saving (PLS) bill (SB 5232) on Wednesday passed a Senate floor vote, 46-2. With its affirmation of the PLS legislation, the Washington State Senate has voted to “encourage financial institutions to develop innovative products that create incentives to encourage consumer savings, particularly savings by low-income consumers,” according to the bill. “The household savings rates in America have been in a decade-long decline,” said NWCUA CEO John Annaloro. “Credit unions are seemingly the only group offering such innovative solutions to a complex societal trend, and always in keeping with the credit union historical mission of building the personal wealth of the average working woman or man.” The bipartisan support of the legislation that would allow savings by linking a special savings account to a series of monthly prizes and a larger, yearly prize, was summarized by its prime sponsor, State Sen. Derek Kilmer (D-26) and Ranking Minority member State Sen. Janéa Holquist Newbry (R-13). “This [legislation] rewards thriftiness, and that is a good thing,” Kilmer said. “This program doesn’t just encourage people to save, it’s actually shown to improve their saving habits. This isn’t a new government program. Rather the bill just enables the private sector to offer this product and I’d urge the body’s support.” Speaking in support of the legislation, Holquist added, “I think this is an innovative, creative way to encourage savings and I would ask for your support.” The legislation will now move to the House State Government & Tribal Affairs Committee, a body that has already heard and passed a companion measure to SB 5232, House Bill 1326. House Bill 1326 is currently in the House Rules Committee awaiting floor action. The NWCUA expects that the House State Government & Tribal Affairs Committee will schedule a hearing for SB 5232 in the next few weeks.

Pa. small-loans program saves consumers nearly 15M

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HARRISBURG, Pa. (2/25/11)--Christmas gifts, taxes, school clothes and funeral expenses are just some of the reasons cited as ways to use the 43,000 small-dollar loans that have been issued by credit unions in Pennsylvania, using the Credit Union Better Choice program. Through the Credit Union Better Choice payday lending alternative product, credit unions offer borrowers a 90-day loan with a $500 limit. Since launching in 2006, the 43,000 loans issued by Credit Union Better Choice have totaled $20.5 million. The program has saved borrowers nearly $15 million over using a traditional payday lending product, according to the Pennsylvania Credit Union Association (PCUA). Since the program’s inception, 79 credit unions with 222 locations have agreed to offer Credit Union Better Choice loans. During the final six-month cycle of 2010, about 8,173 loans totaling $3.8 million were issued by credit unions. Also, borrowers placed $380,000 into savings accounts during the six-month period. The program is offered through participating credit unions and is a partnership of PCUA and the Pennsylvania Treasury. “Credit unions were founded on the principles of small dollar lending,” says Jim McCormack, PCUA president/CEO. “For many living paycheck to paycheck, a short-term loan can help meet unexpected expenses,” said McCormack. “Every Pennsylvanian should be afforded access to loans at reasonable fees and rates.” “The economy is moving in the right direction, but the reality is that many people--even those who are working--are still having trouble making ends meet, perhaps because of a large, unexpected expense like a car repair,” said State Treasurer Rob McCord. “Many of those people have too often turned to predatory, pay-day lenders to make it through to the next paycheck, but then they found themselves drowning in exorbitant fees and outrageous interest rates. The Better Choice program provides them an alternative, he added “This latest report is great news. It shows people are taking advantage of the opportunity to avoid bad loans--and saving themselves millions in the process.” A typical $500 payday loan costs consumers $15 for every $100 borrowed for two weeks, or roughly $450 during a 90-day period. A $500 Credit Union Better Choice loan costs consumers about $42.50 for the same 90 days and at the end of the loan term, the consumer has $50 in a savings account, which helps develop a savings habit. Also, the program builds upon this new wealth-building component by providing financial education to consumers to help them make better informed financial decisions. Pennsylvania consumers saved an average of 80 cents in loan fees for every dollar borrowed through a Credit Union Better Choice loan, rather than through a typical loan from a payday lender. This translates into nearly $15 million that consumers kept in their pockets by using credit unions that offer Credit Union Better Choice loans, said PCUA. To learn more about the program, use the link.

Poll Georgians cautious on spending turnaround

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ATLANTA (2/25/11)--Georgia consumers are not optimistic about the state's economic condition, according to a poll from Georgia Credit Union Affiliates (GCUA). Just 12% of consumers surveyed said they believe the economy has improved in the past year and 40% said the economy was getting worse. The remainder characterized the state's economic situation as either "the same" or "getting worse" than last year--sentiments that could impact consumer saving and spending in the state, said GCUA in its quarterly Georgia Credit Unions' "Paying Attention" report. The report polled more than 4,000 credit union members and compiled aggregated data from credit unions statewide. While consumers are working to build a buffer of savings by cutting expenses and delaying large purchases, they still are unprepared to deal with any further financial setbacks, the report indicated. "As national statistics start to show an increase in consumer confidence, Georgia credit union members are still wary about their own personal financial health," said Mike Mercer, president/CEO of GCUA. "If the economy strengthens, consumers could become more optimistic. But, in the meantime, we expect to see cautious plans for spending and especially borrowing. In fact, loan demand at Georgia credit unions has been very soft," he said. Other key findings of the survey:
* Of those polled, 32.9% said they experienced changes in their employment situation during the recession, ranging from layoffs to pay cuts to taking a second job. * About 35.7% said they have no reserve savings to cover essential expenses if they were to lose their job or other income source. Also, 18.9% said they have savings to cover more than one year without a source of income. * About 65.5% have changed their personal savings habits the past six months, including spending less or cutting expenses like eating out and taking trips. * Consumers surveyed were more wary than in 2010 about making large purchases; 63.3% indicated they do not plan to purchase any big-ticket items in 2011. That compares with 51.2% who avoided big expenditures last year. * Half said they will pay for large purchases with cash from savings.
GCUA also compiled data from 39 credit unions representing 91% of credit union assets and 83% of members in Georgia. Data reflect a trend toward savings, with lending figures varying. Savings deposits at credit unions rose at an annualized rate of 5.42% during 2010, slightly less than the 6.24% increase in 2009. Checking account balances grew by 13.12% in 2010. New-vehicle loans continued to decline with more consumers opting for used-car loans. New-vehicle loan balances fell 10.42%, while used-car balances rose 7.16%, continuing a trend from 2009. First mortgage balances increased by 9.89%, and the number of bankruptcy filings among members rose 12.47% in 2010.

CUNA launches Volunteer Network 247

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MADISON, Wis. (2/25/11)--Recent regulatory changes and the increasingly complex and demanding role of credit union volunteers have driven the Credit Union National Association’s (CUNA) launch of the CUNA Volunteer Network, an online community and resource center for credit union volunteers. The CUNA Volunteer Network keeps members informed and connected with their credit union peers by providing exclusive access to current industry news and research, CUNA Volunteer Network listserv’s community of peers, board-training courses and discounts on educational opportunities. “It’s a CUNA priority to provide board members the best possible resources to help them strongly contribute to their credit unions’ success,” said James Carrick, CUNA’s director of strategic alliances and volunteer education. “We see the great value directors garner from networking opportunities while attending CUNA schools and conferences. “Due to tight budgets, personal schedules, lack of time and other factors we understand that attending these events is challenging, yet volunteers recognize the need for training and timely industry interaction,” Carrick added. “This is exactly what the CUNA Volunteer Network provides: access to leading industry training, business insight, tools and peer advice, 24/7.” The CUNA Volunteer Network membership benefits include online access to:
* Immediate communication with board members nationwide; * Twenty downloadable board training courses; * Free enrollment in CUNA’s Volunteer Certification Program; * Exclusive white papers and case studies; * Savings on CUNA educational events; * Credit Union magazine; * Directors newsletter; * Complimentary handbook PDFs; and * Current educational resources.

Bankrate study CUs keep free checking alive

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NEW YORK (2/25/11)--Free checking accounts are "alive and well at many of the nation's top credit unions," according to Bankrate's Second Annual Credit Union Checking Study. The study was released Thursday. The study examines fees, account balance minimums and the cost of ATM use at the 50 largest credit unions in the nation. " found that 96% of the nation's largest credit unions offer a checking account that is free, or can become free with minimal effort," said Greg McBride, senior financial analyst for "Even with the continued declines in the prevalence of free checking, it remains within the grasp of most Americans and credit unions are a viable option," he added. Among the findings:
* Of the 50 largest credit unions, free checking accounts were available at 38 of them. * An additional 20% of credit unions will waive fees, typically with direct deposit and/or e-statements. * Similar to trends among regional banks the past year, credit unions saw a slight decline--to 76% from 78%--in free checking accounts. They saw an increase--to $26.05 from $24.88--in average fees for bounced checks, as well an increase to $2.10 from $2 in ATM surcharges. * Nearly half (23) of the credit unions surveyed do not require a minimum opening balance on their free checking accounts.

MarylandD.C. New Jersey leagues exploring merger

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COLUMBIA, Md. and HIGHTSTOWN, N.J. (2/25/11)--The Maryland & District of Columbia Credit Union Association (MDDCCUA) and the New Jersey Credit Union League (NJCUL) have agreed to explore a potential merger. The boards of MDDCCUA and NJCUL have signed a letter of intent to begin researching a merger of the two associations. "The missions of the two associations are aligned," said Miguel Boluda, chairman of MDDCCUA and CEO of PAHO/WHO FCU. Both associations "are focused on advocacy as their core purpose. Both are committed to increasing consumer awareness of credit unions and to ensuring future credit union growth." The ability of the merged organization to add value for the affiliates in the core areas of advocacy, education and compliance was the primary reason for moving forward, Boluda said. MDDCCUA and NJCUL identified potential areas of added value to the membership:
* Enhanced consumer awareness; * Stronger political and regulatory advocacy committed to a solid local presence in New Jersey, Maryland and the District of Columbia; * Powerful regional events; * Additional compliance services; * Improved communications and marketing; * Savings and innovation in education content and delivery; * Additional products and services from the service corp.; * Organizational depth; and * Operational efficiencies.
NJCUL Chairman and McGraw-Hill FCU CEO Shawn Gilfedder said the merger will create a more effective association at a time when powerful advocacy is most needed. "A strong association will be vital as we work to improve the operating environment for future credit union growth," he said. "Both associations have made tremendous strides in advocacy in recent years. Combining resources provides opportunities to leverage the strengths of each association and deliver even more value to the combined membership." Boluda and Gilfedder emphasized that state-level advocacy in Maryland and New Jersey, and local advocacy in the District of Columbia, will be in full force during the merger. Also, the staff and leadership teams of MDDCCUA and NJCUL will continue to operate normally. Jennifer Simmons, interim CEO, will continue to lead day-to-day activities at MDDCCUA. Should a merger be approved, NJCUL President/CEO Paul Gentile will lead the merged association. "There is rapid change happening in the credit union space," said Gentile, who has led NJCUL since late 2007. "It is vital that credit unions are being effectively positioned with lawmakers, regulators and consumers. Our goal is to unite these two associations in a way that enhances the products and services to the membership, with an intense focus on advocacy." The associations are targeting year-end to complete the merger, pending due diligence and member approval, said Boluda and Gilfedder.

CUs offered behind-scenes look at Ritz-Carlton service

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MADISON, Wis. (2/25/11)--Credit Union National Association World-Class Service Leadership Institute will offer credit unions an opportunity to discover the strategies and tactics that help The Ritz-Carlton create its service culture. The institute will allow credit union leaders--from CEOs to branch managers--a first-hand look at how The Ritz-Carlton’s award-winning service culture permeates its entire global organization. Attendees will discover how the hotel’s “total engagement” approach influences every process and decision across its operation. The three-day institute, held at The Ritz-Carlton in Denver, May 1-4, is not a common occurrence for the hospitality-industry giant. The behind-the-scenes look has been made possible because of CUNA’s long-standing relationship with The Ritz-Carlton. “This kind of open access isn’t something that other businesses are able to experience,” said Angela Prestil, CUNA director of sales culture development. Specific strategies, such as making a risk-free hire, initiating a daily 10-minute meeting, and generating total engagement from employees will be discussed. “Credit unions will discover that to improve service in general--you must improve it in specifics,” said Rick Olson, featured speaker at the institute. During the institute, Olson will join Jeff Hargett, The Ritz-Carlton’s corporate director of learning and content delivery and a certified speaker for The Ritz-Carlton Leadership Center, in speaking about how to infuse the hotel’s strategies into credit union operations and service.

CU System briefs (02/23/2011)

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* WHEELING, W. Va. (2/24/11)--The former CEO of the now defunct Central Valley FCU, Wheeling, W. Va., was sentenced Wednesday to nine years in prison for embezzling at least $5 million from the credit union. Bernie D. Metz, 58, pleaded guilty to embezzlement and money laundering charges in January 2010. She was arrested after it was discovered that more than $9 million was missing from the $17 million asset credit union. Officials said she diverted the proceeds to finance the building of a restaurant, home improvements, expensive cars for family members, and payment of credit card debt. Metz's husband, Everett, and their children will not face charges as a result of Metz's plea bargain. U.S. District Judge Frederick P. Stamp also ordered her to pay $4.85 million in restitution. After serving the prison term, she will be on supervised release for five years (News-Register Feb. 23) … * BANGOR, Maine (2/24/11)--Robert Ferguson, 48, of Lowell, Mass., was sentenced to 10 years and one month in prison for robbing ll banks and credit unions in Massachusetts, Rhode Island, Connecticut, New Hampshire and Maine between April and July 2010 (Bangor Daily News Feb. 22). The credit unions--Digital FCU, Tyngsboro, Mass.; Pawtucket CU, Warwick, R.I.; and Rockland FCU, North Attleboro, Mass.--were robbed in May. Ferguson, a bus driver, committed the robberies along his bus route. He pleaded guilty in October to four counts of bank robbery, two counts of credit union robbery, four counts of armed bank robbery and one count of armed credit union robbery. In each incident and sometimes armed with a realistic looking toy gun, he threatened to kill an employee. He personalized the crime on several occasions by telling managers of the financial institutions he followed them home and knew where they lived. He also was sentenced to five years of supervised release after the prison term and ordered to pay more than $81,000 in restitution … * ALTAMONTE SPRINGS, Fla. (2/24/11)--An ATM owned by CFE FCU and located in Altamonte Springs, Fla., was the site of two robberies by baseball-wielding bandits on Feb. 3 and Feb. 7. The robberies occurred at 8:25 p.m. and 9:50 p.m., respectively. In each incident, three men dressed in all black and wearing bandanas confronted customers. Both times the culprits were armed with a bat and ordered the customers to withdraw funds from the ATM. CFE FCU is based in Lake Mary, Fla., and has more than $1.1 billion in assets (Orlando Sentinel Feb. 22) … * LEAVENWORTH, Kan. (2/24/11)--Melinda K. Riddle, 38, of Leavenworth, Kan., has pleaded guilty to the theft of $56,000 from Mainstreet CU, where she worked during 2009. She was charged with theft and computer crime. Riddle admitted using the credit union's computers to withdraw money from members' accounts and from the credit union's accounts. She also obtained unauthorized loans and money from checks. Her sentencing is scheduled for April 1 (Associated Press Newswires Feb. 22) … * KANNAPOLIS, N.C. (2/24/11)--U.S. Rep. Larry Kissell (D-N.C.) helped Southern Select Community CU open its newly relocated branch in Concord, N.C., Feb. 14, reported the North Carolina Credit Union League (Weekly Update Feb. 18). In a press release to local media, Kissell called attention to the branch opening and indicated his support for credit unions and businesses. "Kissell has been a strong advocate for credit unions, allowing community members to safely invest their money local," said the press release. "Kissell has also pushed for increased access to capital for small businesses, which credit unions have played a vital role in providing," it continued. Southern Select Community CU President/CEO Huyla Jackson, noting that the Branchview location will help the credit union to deepen its commitment in Concord and serve members more conveniently, thanked Kissell for joining in the "special day of growth and celebration" (Weekly Update Feb. 18) …

Ask Governor show to feature CUs message

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HIGHTSTOWN, N.J. (2/24/11)--New Jersey credit unions will take their municipal deposit message to the airwaves today during NJ 101.5 FM’s “Ask the Governor” radio show during which Governor Chris Christie answers the questions of audience viewers. As a sponsor of the broadcast, credit unions will deliver the municipal deposit reform message four times during the one-hour show, which begins at 7 p.m. ET. Credit unions receive requests from municipalities, school boards and other county and local public entities to bid on depository relationships. These requests have multiplied in recent years as municipalities try to save taxpayer dollars, said the New Jersey Credit Union League (NJCUL) (The Daily Exchange Feb. 23). While municipal deposits are permitted in nearly one-half of the states, credit unions are specifically precluded from becoming eligible depositories for New Jersey local government entities under the state’s forty-year old Governmental Unit Depository Protection Act. NJCUL maintains that allowing local government entities to include credit unions among potential depositories would promote competition among providers of government banking services and save taxpayer dollars. Selecting a credit union as a depository would increase the likelihood that taxpayer dollars would be invested back to the respective communities through lending, promoting local economic development. “NJCUL is working hard to make sure everyone knows the benefits of municipal deposit reform, and this radio show is the first move in a push to make sure we get the support of New Jersey’s residents,” said Paul Gentile, NJCUL president/CEO.

Irish CUs to undergo series of stress tests

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DUBLIN, Ire. (2/23/11)--Ireland's Central Bank is sending financial examiners to 414 Irish credit unions holding nearly $16.4 billion in deposits to stress-test their capability to withstand different scenarios that could affect capital. The stress tests will take place over the next two months, said a Central Bank spokesperson (The Irish Examiner Feb. 21). The review covers all credit unions. However, work on the top 200 credit unions already is finished, said the Central Bank. Loan book reviews are due by the end of April, and stress-testing is scheduled for completion by the end of June. The analysis follows a review by Grant Thornton sponsored by the bank at the request of Finance Minister Brian Lenihan. Loan book reviews are part of the International Monetary Fund's bail-out program for financial institutions. The stress testing will determine the capacity of the capital position of individual credit unions to withstand certain stressed scenarios and to assess whether any additional capital is required, said the bank. The Irish League of Credit Unions has stopped conducting a series of public meetings because commitments were made to the league's position by Fine Gael and the Labor Party in their manifestos. Fine Gael's document matches the league's position almost word for word, said the article.

New Jersey BEST program gains speed

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NEW YORK (2/24/11)--The Building Economic Strength Together (BEST) program, an initiative to strengthen the connection between credit unions and the disabled community in New Jersey, recently completed its pilot year, and appears poised for growth in 2011. BEST, developed by the National Federation of Community Development Credit Unions (the federation), the National Disability Institute and Allies Inc., a New Jersey-based training group for the disabled, places disabled persons in credit union internships. The disabled community is widely unbanked or underbanked, according to Pamela Owens, director of education and training for the federation. “It’s a natural fit,” Owens said of the BEST program. “So many people with disabilities don’t have banking relationships and we’re a credit union organization. This program fits the credit union philosophy perfectly. It makes sense for everyone involved.” In its first year, the BEST program placed 20 interns at 13 credit unions in New Jersey. Four of those interns went on to accept permanent positions with the credit unions. Interns have worked in the credit unions human resources, marketing and accounting departments, and as tellers and member service representatives. Owens said that accommodating the interns was relatively easy because of Americans with Disabilities Act standards. The type of disability was not a factor in placing interns, either, she said. “It all comes down to the motivation of the intern and the willingness of the credit union to be accommodating,” Owens said. “I can honestly say the interns were extremely motivated and the credit unions went out of their way to accommodate them.” Owens told News Now BEST hopes to place 30 interns in 2011. On Monday, 11 interns will begin a two-week training program. On March 14, they will begin their internships at eight credit unions. Many of the credit unions are repeat participants from 2010. “We’ve had credit unions that have participated in three training cycles already,” Owens said. Job preparedness is one of the goals of the program, but just as important are its outreach efforts. “We want participants to know they can have checking and saving accounts and teach them how they can be financial independent,” Owens said. “We want to build the relationship between the disabled community and the credit union community.”

Mass. CUs set record in mortgage refis grow

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MARLBOROUGH, Mass. (2/24/11)--Sparked by a record number of mortgage refinancings in 2010, Massachusetts credit unions are experiencing a period of prolonged growth as they also benefit from a national trend of people turning to credit unions in the wake of the banking crisis. During the past decade, credit union assets in the state have been steadily growing, said Massachusetts Credit Union League President Daniel F. Egan Jr. (The Republican Feb. 13). “After the financial crisis, people have been paying more attention to the financial services industry, and many don’t like what they see,” Eagan told the newspaper. “These people are seeking alternatives.” Massachusetts credit unions saw a 4.6% increase in assets in 2009, and although the closing figures for 2010 haven’t been finalized, Egan told the paper he expects another year of healthy growth. “Credit unions’ growth is being fueled by their commitment to the local community,” he added. The article also mentioned three credit unions in the state: Freedom CU, Springfield; Holyoke (Mass.) CU and Polish National CU, Chicopee. To read the article, use the link.

Utah bill to redefine how CUs collect debt in default

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RIVERDALE, Utah (2/24/11)--A bill pending in the Utah Senate could determine if America First CU in Riverdale, Utah, will be able to collect tens of millions of dollars of unpaid debt in default it is owed by a Utah developer. Utah State Sen. Curt Bramble (R-16) introduced a bill--SB218--that if passed would overturn a Utah Supreme Court ruling and redefine how lenders can collect debts in default (The Salt Lake Tribune Feb. 22). Bramble told the newspaper he is revising the bill and could have a committee hearing as early as this week. At issue is a $36.4 million loan provided by the $5 billion-asset credit union to Anderson Development--one of the most prominent developers in the state--in 2007 to buy and develop 320 acres of land. As part of the deal, Gerald Anderson and Michael Hutchings--the two principals in Anderson Development--personally guaranteed payment, acting as co-signers of the loan, the paper said. When Anderson Development defaulted on the loan, America First filed a notice of default. However, instead of going through foreclosure and liquidating the land, the credit union tried to collect the $19 million balance from the guarantors--Anderson and Hutchings, the paper said. Hutchings is a former state judge. America First has been entwined in litigation with the two since 2009, the paper added. According to Scott Simpson, president of the Utah Association of Credit Unions, the credit union would not only have the loss associated with the specific loan but more important for financial institutions--specifically credit unions--is the bill's effect on the notion of a payment guarantee in the future. It would mean that a company could enter an agreement under a legal requirement and sign a payment guarantee, then be able to get out of the contract if the loan went into default. "The intrigue here is the bill only applies to credit union policy." Passage of the bill would be "very bad public policy," Simpson told News Now. "Not just credit unions are opposed to it. Banks and title-lending institutions are opposed as well," he concluded.

Belvoirs check product returns 1M to members

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WOODBRIDGE, Va. (2/24/11)--Since 2008, when it launched CUXcel, a checking account that offers a high dividend rate, with minimum balance requirement and rebates on ATM surcharge fees nationwide, Belvoir FCU has paid $1.02 million in returns to its members. To qualify for the highest dividend rate and ATM-fee rebates, members must meet four monthly requirements:
* Log into their online banking accounts; * Elect to receive electronic statements; * Have one direct deposit/electronic withdrawal into their checking account; and * Complete at least 15 debit card transactions.
By offering high dividends and rebating ATM fees, Belvoir FCU, Woodbridge, Va. is able to reward those members who fully use the credit union’s products and services.

Why CUs are getting into private student loans

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MADISON, Wis. (2/24/11)--Rising college education costs and an increase in students attending post-secondary institutions in the U.S. are fueling the demand for more private student loans, and credit unions reflect that trend. That assessment was made by Fynanz, a technology provider of custom private student lending programs and a CUNA Strategic Services provider. In the past two years, Fynanz garnered 4,600 new credit union member clients nationwide, Vince Passione, Fynanz CEO, told News Now. “We have seen since 2009 that this is a very good product for credit unions,” he said. “It’s a product that credit unions need and credit unions are using.” Last year, roughly $8 billion in private loans were issued in the U.S., with the average loan size being $12,000, and the typical student taking out two to three loans during an undergraduate college career, Fynanz said. There are three primary reasons why credits unions offer private student loans, Passione said:
* The loans fill members’ needs. In 2007, many lenders left the student financial-aid market because of the economic crisis. “Lots of capital left the market, so the supply went down while demand was going up,” he said. * The average age of a credit union member is 48 years old. Private student loans make it more likely that credit unions will attract younger members from Gen Y (19-24 year olds). * As credit unions start to look for new asset classes, this is a good product--a good return and a way to provide more service to members, Passione said.
What is sparking private student loan demand? “The main driver is the increase in college education costs,” Passione said. “The average cost for one year at a four-year private college is $35,460--with a 5.5 % compound annual rate of growth.” Also, the number of students going to colleges and universities is increasing, with about 19 million students enrolled nationwide last year. The enrollments don’t look like they are going down any time soon, Passione added. “Because more people are competing for grants and scholarships, there is more of gap between what is needed and what is available, which is driving private student loans,” he said. “Also, the unemployment rate is up and more people are in the market for higher education. More are going back to school because they are unemployed.” Passione sees two major trends in student lending: making payments while going to school and consolidation of student loans. The first trend is in-school loan servicing, in which a student makes a monthly while in school. Fynanz pioneered this concept, with a $25 monthly student payment, Passione said. There are three reasons for asking for a payment while the student is in school:
* It’s a reminder to the student they have a debt, and tells them what they borrowed and what it will cost to repay it at current interest rates. It tells them the conditions for paying off their debt. * A typical student is 19 years old and has no credit rating. The in-school payment helps the student build a credit rating. * Typically the loans are co-signed, so when the student makes a payment, then the co-signer gets a notice--which helps the co-signer remember the loan, so the co-signer (usually a parent) will help the student make payments.
Sallie Mae and First Marblehead, a bank and financial intermediary, recently adopted this concept, Passione said. The second trend is consolidation of student loans. Student loans are seasonal, issued at certain times of the year. Consolidation loans are cyclical, which helps create refinance opportunities to help students obtain better interest rates and helps them better manage their cash flow, just as a consumer would by refinancing a home, Passione said. What is the future of student lending? In addition to increasing educational costs and increasing enrollments, the U.S. economy is continuing to move from a manufacturing to a service economy, Passione said. “The unemployment rates of any people who hold college degrees--such as doctors and lawyers--will be less than for others who don’t in a full-fledged service economy,” he added. “The reason why is that most [U.S.] manufacturing jobs are gone.”

Relief fund set for CUs damaged in New Zealand earthquake

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CHRISTCHURCH, New Zealand (2/24/11)--Officials from the New Zealand Association of Credit Unions (NZACU), a member of World Council of Credit Unions (WOCCU), are still assessing damages caused to their member organizations by Tuesday's devastating earthquake that all but leveled Christchurch, the country's second largest metro area.
Click to view larger image Rescue workers and a helicopter work to extinguish a fire at a collapsed building in central Christchurch, New Zealand. The earthquake responsible is now considered one of the country's worst natural disasters. (AP Photo/New Zealand Herald/Mark Mitchell)
Given the widespread devastation in Canterbury Province, the news is better than might be expected, according to Henry Lynch, NZACU CEO. "We know of two credit unions damaged in Christchurch, but no lives were lost and no injuries occurred," said Lynch. "New Zealand Credit Union South (NZCUS) is our second largest member and Christchurch Emergency CU (CECU), which serves ambulance drivers and emergency medical personal, is one of the smallest." As expected, members of the $1 million asset CECU have been heavily involved in search and rescue efforts in the earthquake's aftermath. Meanwhile, $112 million asset NZCUS staff s have been arranging emergency cash loans for members affected by the quake and will soon begin an outbound calling program to each of its 23,864 members to see further assistance is needed, Lynch said. The 6.3-magnitude tremor, which struck the area Tuesday at 12:50 p.m. local time, killed at least 75 people and trapped hundreds more people in the rubble of destroyed buildings. Devastation within the earthquake zone has been widespread, according to Ramsey Margolis, executive director of the New Zealand Cooperatives Association. Communication in the zone is limited to text messaging and occasional e-mails, and homes and businesses throughout the region have been "munted," the New Zealand term for "destroyed." Fortunately, food and milk cooperatives have stepped forward to provide aid to earthquake victims, Margolis said. "Fonterra Cooperative Group members have diverted some of their milk collection tankers to bring in fresh water," Margolis said. "The meat co-ops are helping to feed people who've been displaced and farmers in general are offering to put people from the city up." Tuesday's earthquake--the second to hit the region in five months--caused significantly greater damage that the previous stronger one that struck in September because the epicenter was located closer to downtown Christchurch and occurred closer to the earth's surface. The quake destroyed Christchurch Cathedral, sending its steeple toppling into the street below, and broke off a 30-ton block of ice from the nearby Tasman Glacier. "It is just a scene of utter devastation," New Zealand Prime Minister John Key told local press. "We may well be witnessing New Zealand's darkest day." NZACU, which serves New Zealand's 21 credit unions, is taking steps to help its member institutions. The Worldwide Foundation for Credit Unions, part of WOCCU, has also stepped in and will work with NZACU's Canterbury Earthquake Relief Fund to channel donations to credit unions in need. WOCCU will contribute from its own disaster relief funds and invites interested individuals and credit unions to contribute to New Zealand credit union rebuilding and relief. "The global credit union movement has distinguished itself through unity and cooperation, especially in times of dire need," said Brian Branch, WOCCU executive vice president and COO. "New Zealand's credit unions have consistently been among the first to step forward to provide assistance to credit unions elsewhere in need. Now it is our turn to help them so that they, in turn, can better help their own members recover from this disaster." WOCCU will send its donation directly to the Canterbury Earthquake Relief Fund. Those interested in making a contribution to New Zealand's relief efforts can send their donation via check, credit card or wire to:

Worldwide Foundation for Credit Unions

5710 Mineral Point Rd.

Madison, WI 53705 USA

Donations may be made online with a credit card (use the link). For wire transfer information, contact: Valerie Breunig, Worldwide Foundation for Credit Unions, at 608-395-2055 or at Please indicate that your donation is for Canterbury Earthquake Relief Fund.

Mendo Lake CU awarded 110000 FHLB housing grant

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SAN FRANCISCO (2/24/11)--Mendo Lake CU, a $96 million asset credit union based in Ukiah, Calif., is the only credit union among 40 recipients of $36.6 million in Affordable Housing Program grants made in the second round of 2010 funding by the Federal Home Loan Bank of San Francisco. The funds will assist more than 60 projects that address the affordable housing needs of communities in eight states. Those projects will produce or preserve 3,123 housing units that are affordable to lower-income individuals and families. The total amount of awards under the program in 2010 is $69.1 million. Mendo Park will receive $110,000 for the TAY Wellness Housing Development, sponsored by Redwood Children's Services. The project will provide 12 rental units. The grants went to projects in Arizona, California, Colorado, Illinois, Michigan, Nevada, New Jersey, and Washington. The bank has set aside 10% of its annual income since 1990 to support the program and has awarded more than $660 million in subsidies for more than 99,000 units.

Redwood CU Cal State Central CU intend to merge

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SANTA ROSA, Calif. (2/23/11)--Redwood CU (RCU) and Cal State Central CU (CSCCU), both located in Santa Rosa, Calif., announced Friday they intend to merge, with RCU becoming the surviving organization. The boards of both credit unions have approved the merger, the credit unions said in a joint press release. Approval from the National Credit Union Administration and the California Department of Financial Institutions is pending. If approved by regulators, the merger would legally take effect April 1, with actual transfer of accounts on June 1. With the combined credit union, RCU would serve nearly 200,000 members in the North Bay and San Francisco, with assets exceeding $1.8 billion. "CSCCU has served the financial needs of state employees and our community for nearly 75 years," said Jim Larson, CSCCU's CEO. "In this environment, it's been challenge to achieve the financial position and growth needed to provide the products, services and locations our members want and need. Our partnership with RCU will allow us to fulfill our mission and provided the added benefits our members deserve," he added. Brett Martinez, RCU's president/CEO, noted that "Our industry's philosophy is people helping people, and this joining exemplifies that concept." Cal State Central had $13.5 million in loan losses during the past five years, and its net worth ratio dropped to 3.65% in December 2010, down from 8.01% in 2006 (Press Democrat Feb. 19). A well-capitalized credit union has a 7% net worth ration, according to regulatory standards. CSCCU has nearly 16,500 members served by four North Bay branches and locations in Sonoma, Glen Ellen and Rohnert Park. RCU has about $1.7 billion in assets and 151,000 members in 2010, served by 15 branches. It said most CSCCU employees will be offered employment with RCU.

CU employee saves woman from fire

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HARRISBURG, Pa. (2/23/11)--An assistant branch manager at American Heritage FCU's Horsham, Pa., branch came to the aid of a handicapped woman who was trapped as her house went up in flames Feb. 16, according to the Pennsylvania Credit Union Association (PCUA). Lynnette Heary put the People Helping People philosophy of credit unions to work while she was taking a walk during her lunch break in the neighborhood near the Horsham branch of the Philadelphia-based, nearly $940 million asset credit union. While walking, Heary spotted an older woman trapped upside-down under a wheelchair at the bottom of the cement stairs in front of the woman's home. Rushing to the woman's aid, Heary found the woman's home quickly going up in flames, said PCUA. The woman said her family lived across the street, but she was too disoriented to locate the correct house (Life is a Highway Feb. 22). Heary called 911 and began knocking on doors to locate the woman's family. She then stayed with the woman until police and the fire department arrived. Horsham police later called the credit union's branch to thank Heary for her bravery.

CUs reviewing Southeast Corporates capital plan

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TALLAHASSEE, Fla. (2/23/11)--Southeast Corporate FCU has wrapped up its seventh town hall meeting last week, where it outlined its recapitalization plan for member credit unions. About 200 executives and their board members attended the meetings throughout Florida and Mississippi. "Members were fully engaged and asked good questions," said Brad Miller, president/CEO of the $2.9 billion corporate. "It's clear they are doing their due diligence, and weighing all their options inside and outside the corporate system. Our goal is to provide our members with the information they need to make a sound business decision for their credit union." Over the next few weeks, staff will continue to share details of the corporate's new business model and recapitalization plans through credit union meetings, including board presentations, chapter meetings and other opportunities. "It's really important to us that we talk with as many members as possible," Miller said. Southeast Corporate's recapitalization plan calls for member credit unions to invest a combined $80 million in new Perpetual Contributed Capital (PPC). For each credit union, that equates to 45 basis points of average assets, capping at $2 million. Concurrent with the capital raise, Southeast also will return existing member capital shares (MCS) to members after the three-year notice period on MCS expires--less any additional impairments not covered by retained earnings during that period. Based on loss projections from two outside analytic firms, Southeast Corporate expects members will receive back most of their existing $60 million in MCS after the three-year notice period. At the town hall meetings, Miller outlined key components of the corporate's new business plan. They include: increasing efficiencies, ensuring continuity of services for members, protecting and preserving member capital and developing a business model that provides members with sustainable value. "As part of the plan for moving forward and rebuilding a strong and viable corporate, we are asking members to contribute new capital as we feel having an ownership stake in your corporate is fundamental to our cooperative system and makes sure all members are treated fairly," Miller said. Southeast Corporate will submit its business and recapitalization plans to the National Credit Union Administration in March. The corporate expects to launch its capital subscription campaign sometime in April.

Oregon bill proposes tax on CUs holding public funds MBLs

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SALEM, Ore. (2/23/11)--Some Oregon credit unions will be taxed if the state’s banker association gets its way with legislation it initiated this year. The Oregon Bankers Association (OBA) late last week introduced House Bill 3263. The bill will impose a corporate excise tax on state-chartered credit unions and interstate credit unions holding one or more deposits of public funds that exceed $250,000 or holding commercial loans that in aggregate exceed an amount equal to 10% of credit union assets. The proposed legislation would apply to tax years beginning on or after Jan. 1, 2011. As the bill moves through the legislative process, and the Northwest Credit Union Association (NWCUA) learns who the key legislative players will be, the NWCUA said it will inform its credit union advocates of the next steps. The committee assignment for HB 3263 has not been made public. However, it is likely that the bill will go the House Revenue Committee, NWCUA said. Oregon credit unions won a key victory in the 2010 legislature by passing a bill to lift a cap of $250,000 on deposits of public funds. This bill was actively opposed by the bankers. House Bill 3263 is a response to that victory, NWCUA said. “Credit unions earn their tax status every day for their cooperative, not-for-profit structure that brings value to the members and the communities they serve. It has nothing to do with the products or services they provide,” Troy Stang, NWCUA president, told News Now. NWCUA staff have been meeting with key legislative leaders and committee chairs to remind them of some key points:
* Credit unions pay the same share of federal, state, and local taxes as any business, including real and personal property tax and employment taxes. Credit unions’ tax exemption only applies to corporate income tax because of their not-for-profit structure. * Congress reaffirmed its support for the credit union income tax exemption in a 1998 statement reiterating that the exemption is due to the fact that credit unions are member-owned, democratically operated, not-for-profit organizations. * Credit unions do not stop behaving like cooperatives once they reach a certain size. Whether big or small, every credit union shares the same not-for-profit structure and orientation toward member service. * Size and services are completely beside the point. The original reason for granting credit unions their income tax exemption--their not-for-profit cooperative structure--is just as valid today as when the exemption was first granted. * Cooperatives like credit unions typically do not pay income tax because they must pay all their income to their members. Credit unions, after transferring a portion of their income to reserves and loss accounts, must return all surplus earnings to the members as dividends, lower rates, and higher savings returns. * Credit unions continue to be cooperative financial institutions, dedicated to meeting their members’ financial service needs, with a volunteer board and democratic control. * Credit unions pass their savings on to members in the form of competitive interest and dividend rates, fewer or no fees, and convenience. Therefore, a tax on credit unions is another tax on consumers. * Congress’ decision to exempt federal credit unions from income taxation was based on credit unions’ structure as not-for-profit financial cooperatives, which can build net worth only through retained earnings. * Taxing credit unions’ retained earnings would result in reductions in net worth of credit unions. Federal law requires a credit union insured by the National Credit Union Share Insurance Fund to have a minimum net worth ratio of 7% to be considered well-capitalized. * A tax on credit unions is a tax directly on the people the legislators most want to help--average working men and women trying for make ends meet in a difficult economy.

Conn. congressmen urge Fed to consider CUs on interchange

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MERIDEN, Conn. (2/23/11)--The Credit Union League of Connecticut has received copies of letters written by U.S. Reps. John B. Larson (D-Conn.) and Chris Murphy (D-Conn.) to the Federal Reserve, requesting that the Fed make sure that Congress's legislative intent is upheld when it considers its debit card interchange fees and routing proposed rule. The letters to Fed Chairman Ben Bernanke were written as a result of meetings and discussions with the league, said the league. In them, the congressmen asked that the Fed make sure it upholds their intent, when the bill was passed last year, to exempt small issuers like credit unions and community banks so they can remain competitive with larger issuers, according to a press release from the league. Larson's letter said that in drafting the Dodd-Frank Wall Street Reform and Consumer Protection Act, "Congress was committed to leveling the playing field for our nation's small merchants, while also establishing a meaningful exemption for small issuers, particularly community banks and credit unions. I strongly urge you to adhere to this intent in drafting the final rule." Murphy's letter noted that in considering the legislation, "Congress was sensitive to small issuers, particularly community banks and credit unions, and worked to address their concerns with a small issuer exemption." Both letters indicated concern from credit union and community banks about the Fed's implementation of the proposed rule. In discussing the two-tiered fee system, Murphy wrote that some debit networks may eventually stop servicing cards issued by small depository institutions. "The restrictive not-for-profit capital structure of credit unions makes this particularly vexing and could force credit unions into discontinuing their debit programs," he said. According to league President/CEO Tony Emerson, members of Congress in Connecticut are "receptive to the needs of credit unions to stay competitive in the marketplace. They understand that credit unions, as not-for-profits, would not be able to sustain debit card programs unless a two-tiered system is in place." The Credit Union National Association (CUNA) also has urged the Fed to take the time to study the new interchange law, rather than forging ahead with new rules, so everyone including consumers, merchants and financial institutions, wins. The Fed should be given time to consider all interchange related costs and set a reasonable interchange rate to avoid unintended consequences such as elimination of debit card programs by credit unions, said CUNA President/CEO Bill Cheney. (See related story, "CUNA, Two-year rule delay needed for interchange study" in News Now's Washington section)

CUs delivered 203M in 2010 to Wisconsin consumers

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PEWAUKEE, Wis. (2/23/11)--Credit unions saved 2.2 million Wisconsin consumers $203 million with their competitive rates on savings and loans and lower and fewer fees for financial services, according to the REAL Solutions 2010 Scorecard for Wisconsin Credit Unions, a report by the Wisconsin Credit Union League. Members of credit unions saved more than $112 million on loans, saved more than $56 million on savings products, and paid $33 million less in fees for financial services. The report also cited millions of dollars of “intangible” value through services such as free financial counseling that has prevented home foreclosures and improved borrowers’ creditworthiness, and free-tax preparation for low-income consumers. During 2010, credit unions increased their lending to small businesses 8.3% to compensate for an almost equal decrease in available business credit from banks. About $44 million of the savings on financial product usage accrued to lower-income consumers; credit unions, in fact, operated 40% of all the financial institution branches in low-income areas. Nearly all credit unions in the state offered loans of $500 or less at modest interest rates--an alternative to costly payday loans. And credit unions also outperformed non-credit union lenders by approving 71.3% of home loans for low-income borrowers and 77% of home loans for minority borrowers, compared to a 66.2% and 56.7% approval rate by other financial institutions, respectively. Credit unions also supervised 109 branches inside schools to teach young people the regular habit of saving; students statewide have stashed $2.1 million in their in-school accounts. Credit unions also delivered:
* 1,221 presentations to 31,027 consumers to improve their financial savvy; * paid for 47 Wisconsin teachers to attend summer workshops that help them improve financial lessons offered in classrooms * purchased 75,000 copies of a personal finance magazine to help every public high school achieve state teaching standards related to money management; * supported 2,943 charities and civic activities; * granted $162,150 in student scholarships; and * trained 3,520 of their employees to encourage greater investing activity among members.

Bethpage website lets consumers vent outrage over fees

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BETHPAGE, N.Y. (2/23/11)--As part of a multi-faceted, interactive marketing campaign, Bethpage FCU has launched an interactive website inviting Long Islanders to voice their frustrations about big banks adding new fees on their existing checking accounts. The site includes links to relevant news stories, encourages consumers to fight back and offers them an alternative: Bethpage FCU’s free checking account. Bethpage Bonus Checking features no monthly service or maintenance fees, no minimum balance requirement, no per check charges, free Visa Check card, free online and mobile banking, and free online bill pay. It pays 1% interest for each month the member meets basic transactional requirements. When members sign up for online banking with e-statements, set up a monthly direct deposit, and conduct 15 point-of-sale debit card transactions per month, they earn interest each month. If transactional requirements are not met to earn interest for a particular month, there is no penalty, and the account is still free. Bethpage (N.Y.) FCU, with 3.868 billion in assets, has opened more than 33,000 free checking accounts since last summer (M2 Presswire Feb. 18).

CUNA board member to receive national Latino award

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WASHINGTON (2/23/11)--Credit Union National Association (CUNA) board member Winona Nava, president/CEO of Guadalupe CU, Sante Fe, N.M., has been named the recipient of the 2011 Leadership and Support Award by the Network of Latino Credit Unions and Professionals (NLCUP). Nava will be presented with the award at a reception March 1 during CUNA’s Governmental Affairs Conference in Washington D.C. In notifying Nava of the honor, NCLUP Chairman Maria J. Martinez cited Nava’s “indisputable commitment to financial inclusion for the Latino community and your leadership in educating credit unions about the imperative opportunity Latinos represent for the future and relevance of our movement.”

Boston Fed appoints three CUs to CDIAC

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BOSTON (2/23/11)--Three credit union representatives are among the 12 new members appointed to the newly formed Community Depository Institutions Advisory Council (CDIAC) for the First Federal Reserve District, announced the Federal Reserve Bank of Boston. The credit union representatives are:
* James W. Blake, president/CEO of HarborOne FCU, Brockton, Mass.; * John Dwyer, president/CEO of New England FCU, Williston, Vt.; and * Michael L’Ecuyer, president/CEO of Bellwether Community CU, Manchester, N.H.
The board of governors of the Federal Reserve System has created a national CDIAC to broaden the scope of input on economic credit conditions. To complement the national effort with regional perspectives, each Federal Reserve Bank is establishing a district council comprising representatives from that district’s community banks, thrifts and credit unions. The First District council is drawn from communities within Connecticut (excluding Fairfield County), Massachusetts, Maine, New Hampshire, Rhode Island and Vermont. It will provide input to the Boston Federal Reserve Bank’s senior management on topics such as economic and banking conditions, regulatory policies and payments issues. Members of the Boston Fed’s CDIAC will serve three-year terms.

IN.Y. TimesI To heal credit score talk to a CU

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NEW YORK (2/23/11)--Consumers looking to restore a poor credit score should talk to a credit union to help them gain more sound financial footing, according to a Friday article in The New York Times. Among a half-dozen suggestions, in an article titled, “Healing a Wounded Credit Score,” by Tara Siegel Bernard, is the suggestion, “Talk to a credit union.” “These institutions may be more willing to work with members who have checkered histories,” she wrote. “Their offerings vary, but they may be more likely to consider alternative credit scores, offer free credit counseling or have products tailored for people with poor credit histories.” “Certainly, many credit unions have credit builder or rebuilder loans, often structured as a loan with a built-in savings component so that a person gradually builds up funds that can act as partial collateral,” Clifford Rosenthal, president of the National Federation of Community Development Credit Unions, told Bernard. To read the article, use the link.

Malawi parliament passes financial co-ops bill

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LILONGWE, Malawi (2/23/11)--The Malawi parliament last week passed a long-awaited Financial Cooperatives Bill designed to strengthen the position of the country’s savings and credit cooperatives (SACCOs), or credit unions, and bring basic financial services to one of the poorest countries in world.
Click to view larger image Members line up for services at FINCOOP savings and credit cooperative (SACCO), Malawi’s largest financial cooperative.
Malawi President Bingu wa Mutharika is expected to sign the bill into law within the next three weeks. “The passing of the Financial Cooperatives Bill heralds a new dawn in the development and growth of safe and sound SACCOs in Malawi,” said World Council of Credit Unions (WOCCU) Director Sylvester Kadzola, CEO of Malawi Union of Savings & Credit Co-operatives (MUSCCO), a WOCCU member organization. “It’s an endorsement by the government that SACCOs are part of Malawi’s overall financial system and therefore require an enabling regulatory regime.” New laws resulting from the bill’s passage will help accelerate financial inclusion among Malawi’s poor by strengthening the institutions, which enables them to offer more services, Kadzola said. “MUSCCO believes passage of the bill will facilitate the modernization of SACCOs as fully fledged financial intermediaries offering modern and technology-driven financial services,” he added.
Click to view larger image The passage of Malawi’s Financial Cooperatives Bill heralds a new age for the country’s savings and credit cooperatives, according to World Council of Credit Unions Director Sylvester Kadzola. (Photo provided by World Council of Credit Unions)
WOCCU said its officials were instrumental in helping draft the bill on behalf of Malawi’s credit unions, working as part of a multi-national team to counsel both credit unions and governmental officials on the advantages of a strong cooperative sector. WOCCU also met numerous times with parliamentarians and officials from the Reserve Bank of Malawi to lobby on behalf of the country’s credit unions, and the association’s endorsement helped convince officials of the strength and merit of Malawi’s credit unions as part of a global network. “This is the successful culmination of many years of effort and will give Malawi credit unions their first-ever stand-alone piece of legislation,” said Dave Grace, WOCCU senior vice president of association services and primary author of the act. “Strong and sustained development requires both institutional capacity building and an enabling environment with strong prudential supervision. The passage of the bill was an important step forward in this second area.” Parliamentarians who spoke in favor of the bill’s passage last week said the measures contained within it to increase SACCO services and reach were long overdue. The bill also would establish a deposit guarantee fund designed to strengthen the movement and build confidence among members. “This means SACCOs will diversify their products, have ATMs and reduce operational costs,” Minister of Industry and Trade Eunice Kazembe told The Daily Times newspaper. “This means more members, and more savings for investments and industrialization.”

CU System briefs (02/21/2011)

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* WHITESTOWN, N.Y. (2/22/11)--A man who was supposed to load money into an ATM on Jan. 21 at the Whitestown branch of Rome, N.Y.-based AmeriCU CU, has been charged with stealing $26,000 in $20 bills during the delivery. David A. Thurston, 30, of Brutus, was employed by Loomis & Co. when he and a driver delivered the cash to the ATM. While Thurston was loading it, he allegedly took the amount in $20 bills, said state police. He was charged with third-degree grand larceny, a felony ( Feb. 17) … * SAN BERNARDINO, Calif. (2/22/11)--Steve Becker, chief operating officer of Arrowhead CU since it was put into conservatorship, has been named interim CEO-designate. He succeeds Kay Woods, who led Arrowhead after the National Credit Union National Association placed it into conservatorship in June 2010. Becker, who assumes his new position at the end of March, retired as CEO of Credit Union West, Glendale, Ariz., in 2009 and has 22 years' experience in the industry (Inland Valley Daily Bulletin Feb. 16 and The Press-Enterprise Feb. 17) … * SACRAMENTO, Calif. (2/22/11)--The Golden 1 CU paid $3.75 million in annual rebates to its Visa credit card holders in January, the $7.7 billion asset credit union announced last week. The 1% cash rebates were paid for qualified purchases made with certain Golden 1 Visa Credit Cards during 2010. Since 2004, Golden 1 has returned nearly $30 million to its members. "Giving back to our members shows them how much we appreciate their business and their continued loyalty and support," said President/CEO Donna A. Bland … * CHILDERSBURG, Ala. (2/22/11)--Coosa Pines FCU, Childersburg, Ala., kicked off 2011 the same way it did in 2010--by giving members a bonus dividend and interest refund. In early January, members receive an additional 5% of their share account dividends and 5% of their total loan interest paid to the credit union during 2010. The amount totaled more than $300,000 (The Daily Home Feb. 16) … * HARRISBURG, Pa. (2/22/11)--Bill Pfeifer, former board director of the Pennsylvania Credit Union Association (PCUA) and founder of the Line Material Employees FCU, East Stroudsburg, Pa., died Feb. 15. He was 89. He started the credit union in 1951 and had served on its board since 1955. He was PCUA director for 12 years, from 1985 to 1997. He also is credited with organizing eight credit unions and the Monroe County Chapter of Credit Unions, said PCUA (Life is a Highway Feb. 17) … * ORLANDO, Fla. (2/22/11)--Ralph E. Ullman, 88, one of the founding fathers of Riegel FCU, Milford, N.J., died Feb. 11 in Orlando, Fla. He served as president of the credit union for 29 years and retired to Orlando in 1989 (The Express-Times Feb. 13) … * GLOUCESTER, Va. (2/22/11)--Helen Deane, former manager of the Mica Plant Employees CU and Newport News (Va.) Post Office CU, died Feb. 13 at the age of 85. She was manager of the Newport News credit union until her retirement after 25 years of service (Daily Press Feb. 15) …

Maine league gets kudos from media on breach alert

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PORTLAND, Maine (2/22/11)--The Maine Credit Union League's proactive work in alerting consumers last week to a breach at a jewelry store that affected about 1,000 credit union members as well as other consumers not only garnered attention from the media, but also media kudos for the way it handled the situation. "Our primary goal in making this public was to warn consumers," said league President John Murphy when asked why the Maine's credit unions were getting the word out about the breach (Weekly Update Feb. 18). The breach involved Day's Jewelers. People who made purchases there in November and December found fraudulent transactions on their debit and credit cards. The league sent out a press release Feb. 15 informing consumers about the transactions and reassuring them that "credit unions are working to ensure that the inconvenience to members is minimal." It noted credit unions' advanced fraut protection and fraud prevention systems, and provided tips on how consumers can protect themselves. (News Now Feb. 17). It fielded a number of inquiries from media and drew positive comments. "Our decision to make this public when we did was in the best interest of our credit unions and members," Murphy said.

League testifies against child support bill in Maine

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PORTLAND, Maine. (2/22/11)--Quincy Hentzel, the Maine Credit Union League’s director of governmental affairs, testified Feb. 15 before the Maine Legislature’s judiciary committee in opposition to a proposed child support law. The bill would exempt a debtor’s interest in funds or assets that are necessary for the debtor to pay child support. The bill also stipulates that child support orders have priority over previously filed orders that are not made for the purpose of enforcing or paying child support, said the Maine Credit Union League (Weekly Standard Feb. 18). “The issue we see is that the creation of a new category of exempt property will undermine the ability of creditors to collect on their claims while doing nothing to assure that support orders are fulfilled, “ Hentzel testified. “As a practical matter, a debtor could avoid paying a creditor by declaring that he is in arrears of his support order and needs the cash to fulfill that obligation.” Hentzel also voiced the league’s opposition to another provision of the bill that would give a new priority lien to trump consensual liens given by borrowers to secure their obligations to a credit union. “Should we allow other liens to take priority over our established first priority lien, the potential now exists to erode our first mortgage and increase credit risk to the lending institution,” she said.

League testifies against child support bill in Maine (02/21/2011)

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PORTLAND, Maine. (2/22/11)--Quincy Hentzel, the Maine Credit Union League’s director of governmental affairs, testified Feb. 15 before the Maine Legislature’s judiciary committee in opposition to a proposed child support law. The bill would exempt a debtor’s interest in funds or assets that are necessary for the debtor to pay child support. The bill also stipulates that child support orders have priority over previously filed orders that are not made for the purpose of enforcing or paying child support, said the Maine Credit Union League (Weekly Standard Feb. 18). “The issue we see is that the creation of a new category of exempt property will undermine the ability of creditors to collect on their claims while doing nothing to assure that support orders are fulfilled, “ Hentzel testified. “As a practical matter, a debtor could avoid paying a creditor by declaring that he is in arrears of his support order and needs the cash to fulfill that obligation.” Hentzel also voiced the league’s opposition to another provision of the bill that would give a new priority lien to trump consensual liens given by borrowers to secure their obligations to a credit union. “Should we allow other liens to take priority over our established first priority lien, the potential now exists to erode our first mortgage and increase credit risk to the lending institution,” she said.

Western Bridge Corp. council OKs stand-alone option

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TORRANCE, Calif. (2/22/11)--Western Bridge Corporate's Member Advisory Council has voted in favor of a recommendation to apply for a new charter as a stand-alone corporate credit union. A new charter would enable the corporate to take the next step toward consolidation with Members United Bridge Corporate. The council announced Friday that 80 credit unions (94%) on the council voted in favor of the recommendation. The council and its Executive Committee had met the past six weeks to review and refine several alternative business models for the new corporate entity to take the place of Western Corporate (WesCorp). Originally, the council chose consolidation with Members United Bridge Corporate, but on Feb. 8, the National Credit Union Administration (NCUA) issued a guidance letter regarding large consolidation issues. As a result, committee Chairman Jim Updike, CEO of Honda FCU, Torrance, Calif., and Vice Chairman Scott Waite, senior vice president and chief financial officer of Patelco CU, San Francisco, met with NCUA to discuss the council's preferred choice in aggregating services for payment processing, liquidity and investments. On Feb. 11, NCUA issued a policy stating that "such a consolidation would only be considered after the bridge corporates transition to independently operating corporate." With that, the Executive Committee developed a new recommendation to apply for the stand-alone corporate charter, and the full advisory council ratified the recommendation. "We are very pleased with the level of participation by the members of the Advisory Council and the results of the vote set a clear direction for a new corporate entity," Updike said in a news release. He acknowledged that member support is the first step in the process. The next step: the committee will engage NCUA's Office of Corporate Credit Unions to gain support of a business plan to be submitted before March 31. Before the Western Bridge plan is submitted, the council will seek ratification of the final plan by the entire Western Bridge Corporate membership. "It is important for members of Western Bridge Corporate to be part of the decision making process," Updike said.

Western Bridge Corp. council OKs stand-alone option(1)

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TORRANCE, Calif. (2/22/11)--Western Bridge Corporate's Member Advisory Council has voted in favor of a recommendation to apply for a new charter as a stand-alone corporate credit union. A new charter would enable the corporate to take the next step toward consolidation with Members United Bridge Corporate. The council announced Friday that 80 credit unions (94%) on the council voted in favor of the recommendation. The council and its Executive Committee had met the past six weeks to review and refine several alternative business models for the new corporate entity to take the place of Western Corporate (WesCorp). Originally, the council chose consolidation with Members United Bridge Corporate, but on Feb. 8, the National Credit Union Administration (NCUA) issued a guidance letter regarding large consolidation issues. As a result, committee Chairman Jim Updike, CEO of Honda FCU, Torrance, Calif., and Vice Chairman Scott Waite, senior vice president and chief financial officer of Patelco CU, San Francisco, met with NCUA to discuss the council's preferred choice in aggregating services for payment processing, liquidity and investments. On Feb. 11, NCUA issued a policy stating that "such a consolidation would only be considered after the bridge corporates transition to independently operating corporate." With that, the Executive Committee developed a new recommendation to apply for the stand-alone corporate charter, and the full advisory council ratified the recommendation. "We are very pleased with the level of participation by the members of the Advisory Council and the results of the vote set a clear direction for a new corporate entity," Updike said in a news release. He acknowledged that member support is the first step in the process. The next step: the committee will engage NCUA's Office of Corporate Credit Unions to gain support of a business plan to be submitted before March 31. Before the Western Bridge plan is submitted, the council will seek ratification of the final plan by the entire Western Bridge Corporate membership. "It is important for members of Western Bridge Corporate to be part of the decision making process," Updike said.

SECU takes lead with new EMV card chip (02/21/2011)

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RALEIGH, N.C. (2/22/11)--State Employees’ CU (SECU) in Raleigh, N.C., announced the addition of EMV (chip) technology to its debit card portfolio, making it one of the first financial institutions in the U.S. to add the microchips for increased transaction security over traditional magnetic-stripe cards. Oberthur Technologies will provide SECU with the technology for its EMV migration. While there is widespread adoption of the new technology worldwide, virtually none of the more than one billion chip cards in circulation are in the U.S. SECU’s 1.6 million debit cardholders will now lead the U.S. migration. Chip cards securely store and process data efficiently, said SECU. The cards are also more difficult to copy, providing enhanced security against lost, stolen and counterfeit card fraud. SECU will begin its migration in March, with a completion target date for later this year. “SECU’s goal is to provide products and services which offer enhanced value and protection,” said Leanne Phelps, senior vice president of SECU’s card services department. “The EMV technology enables us to offer members increased fraud protection along with stress-free use of their card worldwide.” SECU has more than $21 billion in assets.

SECU takes lead with new EMV card chip

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RALEIGH, N.C. (2/22/11)--State Employees’ CU (SECU) in Raleigh, N.C., announced the addition of EMV (chip) technology to its debit card portfolio, making it one of the first financial institutions in the U.S. to add the microchips for increased transaction security over traditional magnetic-stripe cards. Oberthur Technologies will provide SECU with the technology for its EMV migration. While there is widespread adoption of the new technology worldwide, virtually none of the more than one billion chip cards in circulation are in the U.S. SECU’s 1.6 million debit cardholders will now lead the U.S. migration. Chip cards securely store and process data efficiently, said SECU. The cards are also more difficult to copy, providing enhanced security against lost, stolen and counterfeit card fraud. SECU will begin its migration in March, with a completion target date for later this year. “SECU’s goal is to provide products and services which offer enhanced value and protection,” said Leanne Phelps, senior vice president of SECU’s card services department. “The EMV technology enables us to offer members increased fraud protection along with stress-free use of their card worldwide.” SECU has more than $21 billion in assets.

Oklahoma regulator approves CUs merger (02/21/2011)

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OKLAHOMA CITY (2/22/11)--The Oklahoma State Credit Union Board approved a merger between Tulsa Metro FCU and the Fraternal Order of Police (FOP) CU, both of Tulsa. FOP CU, with $25.6 million assets absorbs Tulsa Metro CU’s $6.8 million assets. Gilbert told News Now that FOP/Tulsa Metro merger made sense from both cultural and operational perspectives. “They were not interested in becoming part of a big credit union,” he said of Tulsa Metro CU. “They still maintain that small credit union atmosphere through this merger.” FOP CU CEO Carol Webb had previously held the same position at Tulsa Metro, Gilbert noted. “She knew its operations, as well as the limitations and struggles it had,” Gilbert said. One of those limitations was access to branch facilities. Tulsa Metro FCU was previously housed in the fifth floor of a downtown building, said Gilbert. The National Credit Union Administration has also approved the merger.

Oklahoma regulator approves CUs merger

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OKLAHOMA CITY (2/22/11)--The Oklahoma State Credit Union Board approved a merger between Tulsa Metro FCU and the Fraternal Order of Police (FOP) CU, both of Tulsa. FOP CU, with $25.6 million assets absorbs Tulsa Metro CU’s $6.8 million assets. Gilbert told News Now that FOP/Tulsa Metro merger made sense from both cultural and operational perspectives. “They were not interested in becoming part of a big credit union,” he said of Tulsa Metro CU. “They still maintain that small credit union atmosphere through this merger.” FOP CU CEO Carol Webb had previously held the same position at Tulsa Metro, Gilbert noted. “She knew its operations, as well as the limitations and struggles it had,” Gilbert said. One of those limitations was access to branch facilities. Tulsa Metro FCU was previously housed in the fifth floor of a downtown building, said Gilbert. The National Credit Union Administration has also approved the merger.

New regulator addresses Iowa reg. conference(1)

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DES MOINES, Iowa (2/22/11)--The Iowa Credit Union League (ICUL) held its annual regulatory conference Wednesday in Des Moines, with more than 100 Iowa credit union representatives convening to learn more about regulations affecting the credit union industry and to hear from a new regulator. Newly appointed Iowa Division of Credit Unions Superintendent JoAnn Johnson, former chairman of the National Credit Union Administration (NCUA), kicked off the conference with an address. Johnson noted that Iowa credit unions are some of the most well-capitalized credit unions in the U.S. “Iowa credit unions are healthy, and by working together we’ll make them even stronger,” she said. As the new superintendent, Johnson said she wants to have regular and two-way communications with credit unions. Johnson and her staff intend to review as many Iowa credit union regulations as possible to determine if there are ways to streamline. “We want effective rather than excessive regulations,” said Johnson. Conference attendees also learned about federal and state regulations affecting Iowa credit unions, risk-based lending, collections issues, social media compliance and human resources/employment law update. Iowa Gov. Terry Branstad named Johnson the superintendent of IDCU after receiving the resignation of the current superintendent, James Forney, on Feb. 8. Johnson will serve the remainder of Forney’s term which ends April 30. Gov. Branstad has submitted Johnson’s name for confirmation as superintendent of IDCU for a four-year term beginning May 1. Johnson was elected to the Iowa State Senate in 1994 and served as chair of the Senate Ways and Means Committee for four years, and the Senate Commerce Committee for one year. She was appointed to the NCUA in 2002 and served as chairman of the agency from 2004 through 2008.

New regulator addresses Iowa reg. conference

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DES MOINES, Iowa (2/22/11)--The Iowa Credit Union League (ICUL) held its annual regulatory conference Wednesday in Des Moines, with more than 100 Iowa credit union representatives convening to learn more about regulations affecting the credit union industry and to hear from a new regulator. Newly appointed Iowa Division of Credit Unions Superintendent JoAnn Johnson, former chairman of the National Credit Union Administration (NCUA), kicked off the conference with an address. Johnson noted that Iowa credit unions are some of the most well-capitalized credit unions in the U.S. “Iowa credit unions are healthy, and by working together we’ll make them even stronger,” she said. As the new superintendent, Johnson said she wants to have regular and two-way communications with credit unions. Johnson and her staff intend to review as many Iowa credit union regulations as possible to determine if there are ways to streamline. “We want effective rather than excessive regulations,” said Johnson. Conference attendees also learned about federal and state regulations affecting Iowa credit unions, risk-based lending, collections issues, social media compliance and human resources/employment law update. Iowa Gov. Terry Branstad named Johnson the superintendent of IDCU after receiving the resignation of the current superintendent, James Forney, on Feb. 8. Johnson will serve the remainder of Forney’s term which ends April 30. Gov. Branstad has submitted Johnson’s name for confirmation as superintendent of IDCU for a four-year term beginning May 1. Johnson was elected to the Iowa State Senate in 1994 and served as chair of the Senate Ways and Means Committee for four years, and the Senate Commerce Committee for one year. She was appointed to the NCUA in 2002 and served as chairman of the agency from 2004 through 2008.

Federation to hold Mid-South Mid-Atlantic conferences

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NEW YORK (2/22/11)--Registration is open for two regional conferences organized by the National Federation of Community Development Credit Unions. The Mid-South Regional Conference, held in collaboration with the Louisiana Credit Union League, will take place March 21, in New Orleans. The conference is offered for the benefit of credit unions that are low-income designated or community development financial institution (CDFI) certified, have expanded into underserved areas, or want to serve low- and moderate-income (LMI) members within their fields of membership more effectively. Among the topics:
* Benefits of CDFI certification and low-income designation; * Resources available to strengthen a credit union’s capacity to serve underserved communities; * Innovative programs and products to meet the needs of LMI members and consumers; * Community partnerships to leverage and expand credit union service to the underserved; * Tools to help management develop effective outreach strategies for LMI markets; and * Reporting requirements and the regulatory environment;
The second conference, the Mid-Atlantic Regional Conference, organized in partnership with the University of Virginia’s Darden School of Business, will be April 27, in Charlottesville, Va. Professor Gregory Fairchild, executive director of the Tayloe Murphy Center and associate professor of business administration at the University of Virginia Darden School of Business, will unveil research that analyzes the impact of CDFIs , including CDFI credit unions. Participants also will learn about resources available from the federal government and regional programs, explore how to design successful strategies to meet the needs of LMI communities, gain insights from field experts and listen to community-based organizations serving these markets.

Federation to hold Mid-South Mid-Atlantic conferences (02/21/2011)

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NEW YORK (2/22/11)--Registration is open for two regional conferences organized by the National Federation of Community Development Credit Unions. The Mid-South Regional Conference, held in collaboration with the Louisiana Credit Union League, will take place March 21, in New Orleans. The conference is offered for the benefit of credit unions that are low-income designated or community development financial institution (CDFI) certified, have expanded into underserved areas, or want to serve low- and moderate-income (LMI) members within their fields of membership more effectively. Among the topics:
* Benefits of CDFI certification and low-income designation; * Resources available to strengthen a credit union’s capacity to serve underserved communities; * Innovative programs and products to meet the needs of LMI members and consumers; * Community partnerships to leverage and expand credit union service to the underserved; * Tools to help management develop effective outreach strategies for LMI markets; and * Reporting requirements and the regulatory environment;
The second conference, the Mid-Atlantic Regional Conference, organized in partnership with the University of Virginia’s Darden School of Business, will be April 27, in Charlottesville, Va. Professor Gregory Fairchild, executive director of the Tayloe Murphy Center and associate professor of business administration at the University of Virginia Darden School of Business, will unveil research that analyzes the impact of CDFIs , including CDFI credit unions. Participants also will learn about resources available from the federal government and regional programs, explore how to design successful strategies to meet the needs of LMI communities, gain insights from field experts and listen to community-based organizations serving these markets.

CU partners may feel N.C. budget cuts says league

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RALEIGH, N.C. (2/22/11)--North Carolina Gov. Beverly Perdue’s proposed budget will not affect the budget of the state’s Credit Union Division, but some cuts may impact partners who work with the state’s credit unions, said the North Carolina Credit Union League. “The Republican majority and now the governor have announced that state funding to a number of non-profits will be reduced,” said Lauren Whaley, league director of legislative and regulatory affairs. “It seems many non-profits will be encouraged to reorganize, consolidate or regionalize services” (The Weekly Update Feb. 18). The anticipated budget recommendations from the governor were announced Thursday. To balance her budget, Perdue relies on a combination of cuts, continuation of some temporary tax measures put in place two years ago and elimination of 10,000 state positions (3,000 of which are currently filled). The $19.9 billion budget includes a previously announced plan to narrow 14 agencies and departments into eight, and cut or eliminate 139 additional programs. In the aftermath of the governor’s budget recommendations to the General Assembly, work will begin in the House of Representatives and then the Senate before a final version is approved. “We remain cautious of the work ahead as many of the state’s agencies could see their reserves taken as an effort to close the now anticipated $2.4 billion budget gap,” Whaley said. Perdue’s office rolled out an interactive website that allows residents to attempt to balance the state’s budget by making hard choices such as the governor had to do before outlining her fiscal plan in the State of the State address Wednesday. Using “Charlie the Plott Hound,” Balance the Budget Challenge allows North Carolinians to see the major parts of the state budget and decide which ones to cut--or spend more money on in some cases. The budgeting tool includes an emphasis on the state’s major expenditure areas--including education, social services, public safety, expenditures aimed at attracting new jobs, and general areas of government spending. The site offers a range of spending choices under each emphasis area. Total savings are added up as people work through the exercise.

CU partners may feel N.C. budget cuts says league(1)

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RALEIGH, N.C. (2/22/11)--North Carolina Gov. Beverly Perdue’s proposed budget will not affect the budget of the state’s Credit Union Division, but some cuts may impact partners who work with the state’s credit unions, said the North Carolina Credit Union League. “The Republican majority and now the governor have announced that state funding to a number of non-profits will be reduced,” said Lauren Whaley, league director of legislative and regulatory affairs. “It seems many non-profits will be encouraged to reorganize, consolidate or regionalize services” (The Weekly Update Feb. 18). The anticipated budget recommendations from the governor were announced Thursday. To balance her budget, Perdue relies on a combination of cuts, continuation of some temporary tax measures put in place two years ago and elimination of 10,000 state positions (3,000 of which are currently filled). The $19.9 billion budget includes a previously announced plan to narrow 14 agencies and departments into eight, and cut or eliminate 139 additional programs. In the aftermath of the governor’s budget recommendations to the General Assembly, work will begin in the House of Representatives and then the Senate before a final version is approved. “We remain cautious of the work ahead as many of the state’s agencies could see their reserves taken as an effort to close the now anticipated $2.4 billion budget gap,” Whaley said. Perdue’s office rolled out an interactive website that allows residents to attempt to balance the state’s budget by making hard choices such as the governor had to do before outlining her fiscal plan in the State of the State address Wednesday. Using “Charlie the Plott Hound,” Balance the Budget Challenge allows North Carolinians to see the major parts of the state budget and decide which ones to cut--or spend more money on in some cases. The budgeting tool includes an emphasis on the state’s major expenditure areas--including education, social services, public safety, expenditures aimed at attracting new jobs, and general areas of government spending. The site offers a range of spending choices under each emphasis area. Total savings are added up as people work through the exercise.

Governments educator tool kit adds to fin lit efforts

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WASHINGTON and MADISON, Wis. (2/18/11)--The Obama administration Wednesday released its new "educator toolkit" with lesson plans teachers can use to help students prepare for the upcoming 2011 National Financial Capability Challenge. The project adds another resource to America's attempts to educate youth about finances--something credit unions, the Credit Union National Association (CUNA) and state leagues and associations have been involved in for several years. "Empowering students with the knowledge they need to make smart financial choices about saving, budgeting, and investing for the future is good for the long-term strength of our economy," said Treasury Secretary Tim Geithner. "It will help ensure that young people have the skills they need to achieve financial security, and that will help us continue to build this recovery on a strong and sustainable foundation." That's exactly what credit unions involved in educating youth have said. CUNA's National Credit Union Youth Week, which is April 17-23, has a theme this year of "Money Rock$ at My Credit Union." CUNA's Googolplex websites for youth also educate them in financial matters. Associated with that is CUNA's eighth National Youth Savings Challenge. In April 2010, roughly 352 credit unions participating in the program encouraged 176,750 youth to put a collected $24.8 million in their credit union savings accounts. Of those, 10,631 were brand new accounts. The National Endowment for Financial Education's (NEFE) High School Financial Planning Program, which many credit unions use as a basis for curricula during classroom presentations, is one of the few financial education programs that have an evaluation component typically measuring knowledge gains with a pre-test and post-test. Like many of the credit unions' projects, the government's educational toolkit covers five core competencies of financial education: earning, spending, saving, borrowing and protecting against risk. It includes lesson plans from the Federal Reserve, Federal Deposit Insurance Corp. (FDIC), and non-profit organizations. This year the educator toolkit will include interactive online lessons and Spanish language materials. The government's challenge includes a voluntary online exam for high school students that begins as of March 7 and that helps teach young Americans about saving, budgeting, investing and other skills critical to building a strong financial future. The highest scoring students on the exam will be recognized through a national awards ceremony in Washington, D.C., and other high scorers will receive official award certificates. Last year more than 76,000 students and 2,500 educators in 50 states participated in last year's National Financial Capability Challenge. It is one of several projects offered by the administration. In November, the National Credit Union Administration, the FDIC and the U.S. Department of Education announced a partnership to encourage schools and financial institutions to work together to increase students' financial capability. For more on educational efforts by credit unions, use the links.

First Carolina Corporate moves forward on PCC offering

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GREENSBORO, N.C. (2/18/11)--First Carolina Corporate CU is moving forward to present members with its Perpetual Contributed Capital (PCC) offering and is asking member credit unions to submit their subscription agreements by April 29. Beginning in October, PCC will be mandatory for all First Carolina members. The corporate is targeting a goal of $60 million to $75 million in PCC--a one-time requirement with no planned annual adjustments. PCC is an approved form of tier 1 capital investment introduced with the National Credit Union Administration's (NCUA) revised Regulation Part 704. It would give all member credit unions an ownership stake in First Carolina and ensure the capital strength to provide them products and services to succeed in today's financial arena. As perpetual capital, PCC is available to absorb possible losses from corporate operations if reserves and undivided earnings were depleted. The corporate submitted its capital restoration plan to NCUA in January. The plan calls for participating credit unions to convert existing membership capital share deposit balances and invest additional money in First Carolina to help it meet NCUA's new capital ratio requirements. "The objectives of the plan are three-fold," said David Brehmer, president/CEO of the $2 billion asset corporate. "It will allow us to maintain our current level of high quality products and member service. It will allow us to achieve a well-capitalized status under the new regulatory requirements for capital. And it positions us to successfully operate as a value-added, independent corporate within a restructured corporate network and under new corporate regulatory guidelines," he said. "With members' support, we expect to complete the offering this spring and be fully compliant with the capital standards outlined in the new regulation by the October 2011 deadline," said Brehmer. Last fall, the corporate held 12 town-hall meetings and a series of webcasts to explain its capital plan and prepare for this offering request, discuss its strategies, and obtain member credit unions' input. Most credit unions have attended at least one meeting and seem eager to move ahead with the capitalization process, said Brehmer. The capital restoration plan addresses all issues outlined in NCUA's December 2010 guidance letter, said the corporate. In August 2009, regulators approved First Carolina's plan to meet net economic value ratio requirements--before the new corporate regulation was published.

Federal holiday Monday no INews NowI

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WASHINGTON and MADISON, Wis. (2/18/11)--News Now will not publish an issue on Monday, Feb. 21, which is a federal holiday. However, the Credit Union National Association's offices in Washington, D.C., and Madison, Wis. will be open. News Now will resume regular publication on Tuesday.

America Saves Week begins Sunday

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MADISON, Wis. (2/18/11)--Credit unions will be among those joining in the fifth annual America Saves Week, which begins Sunday and ends Feb. 27. More than 1,800 organizations in 47 states are participating in activities to help Americans increase savings rates. With a motto of "Start Small, Think Big," the 2011 program is emphasizing saving automatically, through programs such as making regular, automated contributions into employer-sponsored retirement plans, signing up for regular transfers from checking to savings accounts and taking advantage of new rules that allow tax refunds to directly purchase U.S. savings bonds. One credit union participating is Credit Union of Ohio, a $115 million asset credit union in Columbus, Ohio. It is working with Ohio State University students, faculty and staff in the OSU Saves program. That program will kick off Thursday, with OSU President E. Gordon Gee becoming the first to sign up for OSU Saves. That program, presented by the credit union and Columbus Saves, an extension of America Saves, is simple: Each individual signs a pledge to save a specific amount for a targeted goal. OSU Savers will receive monthly savings tips and reminders to help them continue the savings path. "This is the first financial outreach program of its kind to be offered on a university campus in Ohio," said Credit Union of Ohio CEO Rich Capuano, noting the credit union is proud to be "leading the initiative to spread awareness, provide counseling and ultimately create smart savers on campus." America Saves Week is a partnership among financial institutions, government, military, non-profits, employers, educators and local campaigns. Coordinated by the nonprofit Consumer Federation of America in partnership with the American Savings Education Council, it seeks to focus attention on how regular savings are an essential part of financial security, and to show how anyone can start with a savings plan. The savings rate is up to about 6% of Americans saving, compared with near zero before the recession, said the organization. However, most families still don't have an emergency fund, and 34% of Americans have no retirement savings, according to a Harris poll. A number of defense credit unions are participating in the Military Saves component of America Saves Week, and at least 33 credit unions are listed among participants of the national program. For more information, use the link.

More CUs than ever report in-school branches

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MADISON, Wis. (2/18/11)--The number of credit unions reporting in-school branches to the Credit Union National Association (CUNA) rose significantly in 2010. As of Dec. 31, about 246 credit unions nationwide maintained branch offices in 936 schools, all of them student-run to some degree. The numbers reflect increases from 2009 of 6% (for credit unions), 14% (branches), and 10% (states). “Serving members in the workplace is a long-standing credit union specialty,” said CUNA President/CEO Bill Cheney. “And serving youth in the K-12 ‘workplace’ is a sterling example of credit union uniqueness.” As good as these numbers are, they don’t paint the whole picture, Cheney added. National Credit Union Administration third-quarter 2010 data show that 348 credit unions had branches in schools. But that record contains no information about the number or grade level of youth branches. That’s why CUNA said its online directory is so important. “It gives us the detail to prove our philosophy of people helping people,” Cheney said, “And with contact information, the directory also serves as a resource for credit unions that want to make it possible for young people to develop a savings habit. Currently only three of four credit unions with in-school branches report to CUNA. Let’s make that 100%.” Here’s how reported in-school branches break down by venue for year-end 2010:
* Elementary schools, 397; * Middle schools, 103; * High schools, 390; and * Other (K-12 school, youth center, college, special needs), 46.
The top states for in-school branches are:
* Michigan, 58 credit unions, 370 schools; * Wisconsin, 33 credit unions, 86 schools; * Virginia, 16 credit unions, 77 schools; * Texas, 19 credit unions, 54 schools; * Florida, five credit unions, 46 schools; * New York, 10 credit unions, 36 schools; * Oregon, six credit unions, 31 schools; * Massachusetts, five credit unions, 26 schools; * Washington, eight credit unions, 25 schools; and * Pennsylvania, 10 credit unions, 22 schools.
The credit unions having the most in-school branches are:
* CP FCU, Jackson, Mich., 50 schools; * Apple FCU, Fairfax, Va., 34 schools; * Suncoast Schools FCU, Tampa, Fla., 32 schools; and * Michigan First CU, Lathrup Village, Mich., 31 schools.
Credit unions can report their in-school branches online. For the full state-by-state in-school branch summary, use the link.

CU offering mortgages members can re-set

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FAIRFAX, Va. (2/18/11)--Fairfax (Va.) County FCU (FCFCU) is the most recent credit union to offer a loan that allows members to change their mortgage rate with one click. The HarmonyLoan is a consumer-initiated, interest rate-resetting mortgage that aligns the interests of the consumer and credit union. It allows homeowners to adjust their interest rates with the market without the expense and hassle of a traditional refinance or new mortgage (Marketwire Feb. 16). “Members look to us to help them save on their home loans, and we are constantly looking for ways to better serve our members’ needs,” said Joseph D. Thomas Jr. president/CEO of the $230 million-asset FCFCU. “The HarmonyLoan allows our members to take control of their own mortgage with literally just one click each time they want to change their rate. The one-click rate change really couldn’t be easier--there’s no need to go through the costly and time-consuming process of traditional refinancing.” In September, Mortgage Harmony formed a partnership with the Credit Union Mortgage Association (CUMA) to make the HarmonyLoan available to the association’s credit union members based primarily in the Greater Washington, D.C., area. As a result of its partnership with Mortgage Harmony, CUMA said it implemented product development, origination and servicing requirements necessary to close its first HarmonyLoan within three months.

Latino Community CUs youth contest stresses savings

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DURHAM, N.C. (2/18/11)--Latino Community CU in Durham, N.C., is accepting entries for a contest to encourage youth to start saving and to develop sound financial practices. The “What’s Your Savings Story?” contest has invited schools, nonprofit organizations and faith communities to promote the contest--which is open to youth between 10 and 18 years old ( Feb. 16). Participants can read about the stories of “Isabel” and “David”--youth who are struggling to make good financial decisions, and then write their story about their efforts. The winners in each age category (10-12, 13-15, 16-18) receive $1,000 (first place), $500 (second place) and $250 (third place) in the form of a 24-month certificate of deposit as an incentive to start saving money for their future. The award money is made available through a grant from the W.K. Kellogg Foundation. The collection of stories will be used in the community, displayed in the $98.3 million-asset credit union’s branches and published on the Latino Community CU website to help encourage savings.

Howard Dean Karl Rove spar at Texas league GAC

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FARMERS BRANCH, Texas (2/18/11)--More than 200 Texas credit union activists and 100 legislators and staff were entertained by two of the top political minds in the country during the Texas Credit Union League’s Signature Dinner on Tuesday at the league’s Governmental Affairs Conference (GAC).
Click to view larger image Howard Dean (left) and Karl Rove (right) with Texas Credit Union League President/CEO Dick Ensweiler and his wife, Judy. (Photo provided by the Texas Credit Union League)
Howard Dean, former presidential candidate, Democratic National Committee Chair, and Vermont governor, and Karl Rove, former White House official and political adviser to President George W. Bush, squared off in a 75-minute debate on some of the hottest political issues of the day. The debate was moderated by Evan Smith, leader of Texas Monthly and current CEO of the Texas Tribune. The league’s GAC is held every other year to coincide with the Texas legislative session. Austin resident Rove had the “home team advantage,” particularly given the most recent election in which Texas Republicans have a majority in the State House and Senate. Dean, however, pointed out he is a long-time credit union member and proudly wore an “I love my Credit Union” button, then took the first few swings in a debate before a capacity crowd. “It was a fabulous evening that had everyone on the edge of their seats” said league President/CEO Dick Ensweiler. “Our lawmakers and their staffs sat with their constituents--credit union leaders across the state. Everyone really enjoyed the fireworks of these two political powerhouses.” Rove and Dean debated issues such as the root causes of the economic crisis, the situation in Egypt, and illegal immigration legislation, and forecast possible 2012 presidential election scenarios. Both agreed that if unemployment is reduced to less than 8% by 2012, President Barack Obama stands a strong chance to be re-elected, but unemployment levels above an 8% rate would make re-election much tougher.

CU System briefs (02/16/2011)

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* OGDEN, Utah (2/17/11)--A teller at Education 1st CU, Ogden, Utah, was punched in the face after trying to knock a gun out of a robber's hands Tuesday. The unidentified teller was not seriously injured (Salt Lake Tribune Feb. 16). The incident occurred at about 5:30 p.m. when a man wearing a bandana over his face and carrying a handgun walked into the credit union and demanded money. The teller believed the gun was not loaded, police said. During the scuffle, the bandana slipped, revealing the robber's face, and he fled * DETROIT (2/17/11)--A Michigan man who escaped the death penalty and was sentenced to life in prison for killing an armored-car guard restocking ATMs at DFCU Financial CU, Dearborn, is appealing the conviction (Detroit Free Press (Feb. 16). Timothy O'Reilly, 37, of Detroit was the first person tried under the federal death penalty in eastern Michigan since 2003. He was convicted in the death of guard Norman Stephens, 30, although the jurors could not agree on whether he fired the fatal shot. Six men took part in the heist

Survey outlines competitions communications strategies

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CHICAGO (2/17/11)--Today's challenges--and consumer expectations--are transforming the way retail banks operate and serve customers. Credit unions can learn what they're up against by examining their competitors' strategies. A recent study examines what is impacting business and what strategies retail banks and lenders are using to keep their customers. "2010 Survey Results Top Retail Banking Communications Strategies" is a survey of 458 banking executives conducted by Variolii Corp., in partnership with American Banker, Bank Technology News and US Banker. Retail bankers' greatest challenges aren't much different from credit unions'. An overwhelming 84% said that financial reform/legislation poses the greatest perceived challenge both now and for the next few years. That's more than double the next greatest challenges--increased delinquencies/defaults (39%) and tighter lending standards (38%). The fourth highest challenge, generating 29% of responses, was developing a competitive mobile/online banking strategy, and the fifth, with 26% was: increased/more sophisticated fraud activity. Garnering less than 20% of responses were reduced customer satisfaction/decreased bank brand loyalty; continued industry consolidation, harder to reach customers (due to increased mobile-only households and reduced landlines), other, and reduced spending/lower credit card volume. With this environment in mind, the survey looked at communications strategies employed by the banks. Roughly 77% of banks surveyed use traditional, high cost methods of communicating with customers most often. Direct mail/postcards and agent interaction on the phone, are used the most--68% and 64%, respectively. E-mail (56%) and the local branch (52%) are the next most popular strategies. Other findings:
* Thirty-one percent of survey respondents communicate with their customers over a mobile device. In fact 44% of institutions surveyed did not know whether their targeted customer contact was through landline or a mobile device. * Thirty-two percent said they capture customer preference data to determine whether they are using a mobile device, while 55% did not. When asked why the banks don't communicate with customers via their mobile number, 20% indicated they didn't have the appropriate technology; 15% did not have the numbers or sufficient mobile number coverage, and 13% cited legal/privacy/security concerns. * Of those who do use customer preference data in their communication strategies, 85% used the customers' preferred communication channel; 42% used preferred language; 46% used preferred time of day; and 41% used customer behavior. * Improving the customer experience is rated "important" to "very important" among 86% of survey respondents. Seventy-one percent said offering customers self-service options was important or very important. Self-service options offered included online banking (89%); IVR for balance, payments (57%); opt-in alerts for balance limits, overdrafts (49%) and mobile banking, (38%). Eighty-six percent predicted their self-service options will increase somewhat or substantially in the next few years. * Forty percent of respondents already are leveraging social media to communicate with customers in their strategies to attract younger customer segments. Social media included Facebook, used by 34%; Twitter, 22%; various social media, 13%; blogs, 9%; LinkedIn, 5%; and e-mail, 5%. Of those who are not using social media now, about 35% said they were planning to incorporate them in the future.
In spite of the changes, traditional methods remain in full force, said the study.

First CU-to-bank conversion in years pondered in Md.

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COLUMBIA, Md. (2/17/11)--For the first time in several years, a credit union has announced it is considering converting to a federal mutual savings bank charter. Har-co Maryland FCU, a $199 million asset credit union based in Bel Air, Md., on Monday published a notice to members of its consideration to convert from a federal credit union charter to that of a federal mutual savings bank. Founded in 1955, Har-co Maryland FCU serves more than 27,849 members of primarily educational groups. It's notice said it intends "to increase membership and economies of scale" to better serve members and "to preserve its tradition of competitive pricing, plus make it easier to cost-justify adding branches." It also noted a conversion would provide "additional business flexibility." Jennifer M. Simmons, interim CEO/chief membership officer at the Maryland & District of Columbia Credit Union Association, said that while the association's board "firmly believes that the credit union charter provides the best vehicle for serving the financial needs of consumers, we do support the right of member/owners to exercise democratic control of their credit union. "The association encourages credit unions considering conversion to make their decisions based solely on the best interest of the members and that the credit union provides full, plain language and timely disclosures to the membership so that an informed decision can be made by the member/owners," Simmons added. Credit union conversions to banks have been on the decline, with only 31 conversions since 1995. No credit unions converted in 2010 and only one converted in each of 2009 and 2008, according to a News Now analysis (Jan. 14).

Maine CUs help 1000 members in jewelers breach

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PORTLAND, Maine (2/17/11)--Maine credit unions have discovered a security breach impacting consumers who made purchases at a jewelry store in November and December, according to the Maine Credit Union League. Credit unions are helping more than 1,000 members who are among those reporting fraudulent activity on their credit and debit cards. The computer system breach occurred at Day's Jewelers, based in Waterville, Maine (The Associated Press Feb. 15). Day's has five stores in Maine and one in New Hampshire. State police said the breach compromised thousands of credit and debit card account numbers. Personal identification was not accessed and purchases made online were not affected, said Day's in a statement. League President/CEO John Murphy said the suspicious activity was noted during the past several days, and while the fraud activity affects thousands of consumers, the focus for Maine's credit unions is on those members impacted by the breach. "The first priority of credit unions is on assisting and answering questions from members," he said. "Cards are being reissued to those members affected and our credit unions are working to insure that the inconvenience to members is minimal." Murphy emphasized that neither consumers nor their credit union or other financial institution did anything wrong. "Credit unions have a number of advanced fraud protection and fraud prevention systems in place that operate 24 hours a day, 365 days a year to identify and eliminate fraudulent card activity," he added. The league provided these tips for consumers:
* Monitor and review accounts regularly and report unusual charges or activity; * Be warned of possible scams and avoid giving out personal information via phone or e-mail; financial institutions, including credit unions, and credit card companies will not ask for this information in this manner; and * Report suspicious solicitations and activity to your financial institution and local authorities.
Two years ago, the Maine-based Hannaford grocery chain was breached, and hackers accessed more than four million credit and debit card numbers used at 165 Hannford stores in the Northeast and 106 Sweetbay stores in Florida. At least 1,800 numbers were stolen and used for unauthorized purchases.

N.Y. corporate task force makes recommendations

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ALBANY, N.Y. (2/17/11)--New York’s Corporate Credit Union Services Task Force submitted its recommendations for Members United Bridge Corporate FCU to the Credit Union Association of New York’s board of directors after months of research and meetings. Primary on its list was a recommendation that New York’s credit unions support a reconstituted charter for the bridge corporate and an endorsement of the Members United “Forward Together” plan as the business model for the reconstituted corporate. The task force, which included 27 New York credit union leaders, was established by the association’s board of directors. Task force members were charged with finding a cost-effective solution/strategy for providing essential services that historically have been offered to credit unions by corporate credit unions. Additional recommendations that have been accepted and supported by the association’s board include:
* Advocating for a credit union-owned corporate credit union system that follows the general business model of a corporate credit union as set forth by the final corporate regulation, 704; * Supporting general consolidation/mergers within the corporate credit union system that would enhance Members United Bridge’s long-term strength and viability, in turn bringing more efficiencies and lower cost to natural person credit unions; and * Encouraging the use of non-perpetual membership capital, whenever possible, under the new corporate regulations.
The task force also concluded that each natural person credit union should conduct its own due diligence regarding future corporate credit union services and make a decision based on the best interest of the members it serves. The association said it will continue to monitor developments and pursue the most favorable options for New York credit unions and their members. “Using the recommendations developed by our Corporate Services Task Force, we look forward to working with the Credit Union National Association, the National Credit Union Administration and other key parties to shape a corporate credit union system that will provide long-term benefits and stability,” said association President/CEO William J. Mellin. To read the report, use the link.

Governor commends Iowa CUs on biz lending

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DES MOINES, Iowa (2/17/11)--Iowa Gov. Terry Branstad commended Iowa credit unions for offering business loans at a time when other financial institutions are pulling back during the Iowa Credit Union League’s (ICUL) annual Legislative Conference on Tuesday in Des Moines. More than 100 Iowa credit union representatives convened to learn more about the legislative issues affecting the credit union industry and interact with their legislators. Branstad noted that from 2007 through 2010, Iowa credit unions increased member business lending (MBL) by 54% while Iowa banks decreased business lending by 7.9%. “Credit unions are part of the solution in creating and sustaining jobs in our state,” Branstad said. Credit unions’ MBL cap, which currently stands at 12.25% of total assets, could be raised as high as 27.5% if Credit Union National Association (CUNA)-backed legislation that was offered by Sen. Mark Udall (D-Colo.) is reintroduced this year and passed into law. CUNA has estimated that the MBL cap increase would add $10 billion in new funds into the market, at no cost to taxpayers, and create 108,000 new jobs. Attendees also heard from Iowa Economic Director Debi Durham, Iowa Attorney General Tom Miller, state Sen. Jeff Danielson (R-11) and state Rep. Chuck Soderberg (R-3). Danielson and Soderberg praised the credit union industry’s sustainable, community-oriented business and leadership model.

Utah CUs have their day on the hill

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SALT LAKE CITY (2/17/11)--The Utah Credit Union Association held a Credit Union Day on the Hill Tuesday at the state Capitol, and invited state legislators and credit union representatives to meet during lunch. About 50 of the 75 state house representatives and roughly 85 credit union presidents, board members, executives, and management staff attended. Several members of the house leadership attended, including Speaker Becky Lockhart (R-64) and Majority Leader Brad Dee (R-11). “It is really important for you have some low-key interaction with these policy makers to establish relationships,” said Utah Credit Union Association President Scott Simpson, in thanking those credit union executives who attended. State Rep. David Butterfield (R-4) and chief marketing and operations officer at USU Charter CU in Logan, made it a point to meet and talk to as many people as possible, said the association. Credit union representatives were happy to see another credit union employee as part of the legislature, knowing he could represent the interests of credit unions, said the association. The association played a role in helping Butterfield get elected. At the event, Utah’s credit unions provided legislators a take-away card with facts about the state’s Utah credit unions. Credit union representatives talked with legislators seated at their tables. Afterward the association’s Government Affairs Committee commented on its success in informing legislators of credit unions’ concerns with legislation this session.

CO-OP Miracle Match raises 3M for Kids hospitals

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RANCHO CUCAMONGA, Calif. (2/17/11)--In a year of ongoing difficult economic conditions, credit unions participating in the CO-OP Miracle Match program raised more than $3 million in Credit Unions for Kids fundraisers in 2010, a 20% increase compared with 2009. “The credit union spirit of people-helping-people is something that continues to thrive even during tough financial times,” said Stan Hollen, president/CEO of CO-OP Financial Services, and a member of the Children’s Miracle Network’s board of governors. Participating credit unions raised more than $2 million for Children’s Miracle Network in 2010, with the total exceeding $3 million when combined with CO-OP Miracle Match funds. This represents an increase of $500,000 compared with the previous year. Also, 26 new events took place in 2010, a 30% increase over 2009. The Austin Chapter of Credit Unions raised the most money during two events it held in support of Dell Children’s Medical Center of Central Texas. A golf tournament raised $212,395 and a raffle, $150,000. St. Louis Community CU raised $131,500 during a dance marathon to support St. Louis Children’s Hospital. These events received $25,000 in CO-OP Miracle Match funds to add to their charitable contributions. During the 2009 program year, the top fundraising credit union produced $45,000 in funds, added to which was $10,000 in CO-OP Miracle Match funds. Mountain America CU, West Jordan, Utah, raised $100,000 plus $20,000 in CO-OP Miracle Match funds for Primary Children’s Medical Center in Salt Lake City with its Swing for the Kids Golf Tournament. Also, a bowl-a-thon held by Randolph-Brooks FCU, Live Oak, Texas, raised $59,980 and received $11,996 in CO-OP Miracle Match funds to support CHRISTUS Santa Rosa Children’s Hospital in San Antonio. CO-OP Miracle Match is managed by CO-OP Financial Services on behalf of its 3,000 member credit unions. The program awards $1 million in matching funds annually for Credit Unions for Kids events, proceeds of which go to local children’s hospitals in the Children’s Miracle Network. The credit union industry is currently the third-largest contributor to Children’s Miracle Network. Matching funds through this program are available now to credit unions planning events in 2011. Children’s Miracle Network changed its name earlier this year to Children’s Miracle Network Hospitals.

League WOCCU look to link GuatemalaU.S. remittances

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ANTIGUA, Guatemala (2/17/11)--Guatemala’s credit unions would like to have a single shared branching system that could receive remittance funds transferred from credit unions in the U.S. Representatives from credit unions and organizations in California and Nevada are helping examine such a program’s feasibility under the auspices of World Council of Credit Unions’ (WOCCU) International Partnerships Program.
Click to view larger image Participants in the recent World Council of Credit Unions (WOCCU) International Partnerships Program visit to Guatemala included (kneeling, from left) Steve Schaefer, WOCCU technical services manager, and Nathan Rogers, Financial Service Centers Cooperative (FSCC) vice president of marketing; (standing, from left) Oswaldo Oliva, CEO of Guatemala credit union trade association (FENACOAC); Victor Miguel Corro, WOCCU International Partnerships senior manager; FSCC Board Chair Steven Stapp, CEO of San Francisco FCU; Amanda Smith, FSCC vice president of innovation; Gerardo Morales, FENACOAC finance manager; Carlos Flores, FENACOAC marketing coordinator; and Deeynar Leon, FENACOAC technology manager. (Photo provided by World Council of Credit Unions)
Representatives from WOCCU, the California and Nevada Credit Union Leagues and Financial Service Centers Cooperative (FSCC), a WOCCU associate member organization, met in Guatemala last week to consider ways in which the country’s existing national shared branching system could link with a similar system in the U.S. The leagues have partnered with WOCCU member Federación Nacional de Cooperativas de Ahorro y Crédito (FENACOAC), Guatemala’s credit union trade association, as part of the International Partnerships Program since 2009. Each group participated in discussions about the possible link and other key topics, during the visit. “Such a link would provide ease, convenience and greater economy for Guatemalan workers in the U.S. who want to send money to relatives back home,” said Oswaldo Oliva, CEO of FENACOAC. “With a direct link between U.S. credit unions and Guatemala’s shared branching system, FENACOAC hopes to change the perception of credit unions as the ‘poor man’s bank’ to that of institutions that provide modern services and a safe and sound system that addresses many financial needs.” FENACOAC represents 27 credit unions that hold more than 80% of assets and serve one million members. The association has used the system-wide Mi Coope (“My Credit Union”) brand to differentiate financial cooperatives from other types of Guatemalan cooperatives. All FENACOAC credit unions share the same core operating system and participate in a national shared branching network. FENACOAC estimates that roughly 1.2 million Guatemalans have emigrated north for work, with California as the key destination. Every year, $3.7 billion is sent home to Guatemala from the U.S. In addition to FENACOAC’s Oliva, participants in the three-day planning meeting included FSCC Chair Steven Stapp, CEO of San Francisco (Calif.) FCU; FSCC’s Nathan Rodgers, vice president of marketing, and Amanda Smith, vice president of innovation; and WOCCU’s Victor Miguel Corro, senior manager of partnerships and training, and Steve Schaefer, technical services manager. The group also traveled to Antigua and Guatemala City and visited three credit unions. The meeting was capped by the development of a work plan. It is expected that the project will start in 2012 with an international shared branching link between Guatemala and the U.S. “In visiting the branch locations, I got a real sense of how important the credit unions are to the community and in helping the members improve their lives,” Stapp said. “I have a renewed sense of responsibility in helping Guatemala’s credit unions support their members.”

BECU taps legends in new card promo

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TUKWILA, Wash. (2/17/11)--Tukwila, Wash.-based BECU has enlisted famous University of Washington (UW) alumni to promote its latest addition to the MasterCard family. Among the Husky alumni appearing in a YouTube video--they’re singing the UW fight song, “Bow Down to Washington,”--are: Richard Karn of the television show “Home Improvement”; former National Basketball Association player Detlef Schrempf; football legends Sonny Sixkiller, Damon Huard and Brock Huard; philanthropist and activist Bill Gates Sr.; travel writer Rick Steves; and jazz great Kenny G (The News Tribune Feb. 16) The alumni are helping promote the UW Gold Debit MasterCard, which is part of an effort by $9 billion-asset BECU to gain traction within the Washington higher education community. The credit union also contacted Washington State University, which was contractually obligated to another financial institution, and could not participate in a similar promotion. The UW debit card is available to all individuals who open a free BECU checking account online or at any BECU location. Every cardholder receives special MasterCard gold benefits at no charge and free fraud-monitoring protection. Some of the alumni who appear in the promotion received an appearance fee. UW benefits by receiving about $400,000 annually in sponsorships, including signage at sporting events. The video will be distributed via e-mail and social networks such as Twitter and Facebook. Use the link to the view the video online.

CU saves injured vets family home from foreclosure

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UXBRIDGE, Mass. (2/16/11)--Worcester (Mass.) CU went to bat for the family of a recuperating Iraq veteran after Countrywide Home Loans foreclosed on their Uxbridge, Mass., home. The result: the credit union helped save their home. The family, Lisa and Michael Damon and their children, Max, 6, and Abby, 9, learned that California-based Countrywide Home Loans was foreclosing on their home in late January 2008. Their story and the help it received from the credit union were featured in the Telegram & Gazette (Feb. 11). Michael Damon, who had been injured while on duty in Iraq, could not work and could not take care of the children while recuperating at home in 2007. That meant Lisa Damon couldn't work full time. That was the year the adjustable rate mortgage they took out in 2004 soared to 10%, doubling the monthly mortgage. Even though the family had paid off their vehicles and had no credit card debt, and even though Lisa Damon persistently tried to talk to Countrywide officials about their circumstances, the company foreclosed on the home in January 2008. She worked with a lawyer Andrea M. Park, and a newspaper ran a story about the foreclosure. "I read the story and said, 'This is not right,'" said Karen E. Duffy, president/CEO of $79 million asset Worcester CU. "I just thought it was so wrong that someone who was serving this country, and this family, were having this terrible problem," she told the newspaper. Duffy and Park took over the case, working closely with the Damons. The credit union stepped up to ensure that the couple received what a solidly underwritten and affordable 30-year, fixed-rate mortgage at 5.1% interest--the best rate available at that time, said Duffy. That effort led to the Damons repurchasing their home in December 2009. "Karen Duffy saved my life," Michael Damon told the newspaper. To read the full article, use the link.

CDCU growth outpaced CU industry at large--Federation analysis

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NEW YORK (2/16/11)--Community development credit unions' (CDCU) growth outpaced the overall credit union industry, according to the National Federation of Community Development Credit Unions' semi-annual analysis of trends among credit unions serving predominantly low-income communities. The report for the period through June 30, 2010, notes three forces shaping the movement in general: unabated recession, redoubled regulatory pressure and regulatory fees charged to credit unions, and positive media coverage urging consumers to "move your money" from large banks to community-based institutions. "Resilience amid stress" best captures the condition of CDCUs, according to Cliff Rosenthal, federation president/CEO and co-author of the study with Cathi Min Kyung Kim, assistant director of community development investments at the federation. Indicators of CDCUs' growth noted in the study:
* CDCU assets rose at an annual rate of 6.38%, compared with overall credit unions' 4.37% increase; * Their loan portfolio rose modestly, at an annual rate of 0.92%, compared with an annualized decline of 2.14% for the overall industry loan portfolio; and * Their collective return on assets (ROA) was 41 basis points, roughly the same as that of all federally insured credit unions.
However, said the federation, economic stress took a toll:
* The typical CDCU was marginally unprofitable with an ROA of -0.07%, due in part to deposit insurance charges of 22 basis points imposed by the National Credit Union Administration; and * Thirteen CDCUs were either merged or liquidated, a higher proportion than the overall credit union industry. Four of these credit unions were merged into other CDCUs, ensuring continued service to low-income communities, said the federation.
"The profile of the CDCU movement began to change dramatically in the first half of the year," Rosenthal said. "The announcement of the Treasury Department's Community Development Capital Initiative (CDCI) brought a major influx of credit unions into the federation's ranks," he added. Collective assets of federation member CDCUs more than doubled to $11.3 billion from $5.25 billion. Combined membership rose by 60% to 1.688 million members from 1.072 million. Credit unions that joined the federation early in the year were excluded from the mid-year trend analysis to ensure consistency of analysis, said the federation. "We expect the picture at year-end 2010 numbers to show major changes reflecting the impact of these additional CDCUs and the investment of $69.9 million in secondary capital from the Treasury Department's CDCI program in September 2010," Rosenthal said. For the complete report, use the resource link.

U.S. bankruptcy rate declines in 4Q for sixth time

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WASHINGTON (2/16/11)--Bankruptcies filed in the U.S. rose 8% during calendar year 2010, according to data released Tuesday by the Administrative Office of the U.S. Courts. However, the rate of growth of bankruptcies filed during fourth quarter 2010 declined for the sixth consecutive quarter for business filings and for the second quarter in personal filings. During fourth quarter, roughly 370,080 bankruptcies were filed, down from 372,203 filed for the same period in 2009. In 2010, 1.59 million bankruptcies were filed. That is a five-year high and up from 1.47 million filed in calendar year 2009. "These bankruptcy filing numbers roughly track credit union loan loss data," said Bill Hampel, chief economist at the Credit Union National Association (CUNA). "Household financial conditions deteriorated dramatically from 2007 to the first part of 2010. Since then, conditions have stabilized with the result that although high, bankruptcy filings are at least beginning to recede," he said. "We have a way to go, and it will take quite a while to get there, but at least we are moving in the right direction," Hampel told News Now. Filings have increased steadily since 2006, when they totaled 617,000 for the first 12-month period after the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 took effect. In 2005 more than 2 million bankruptcies were filed in the rush to beat the more restrictive requirements from the act. Most of the 2010 filings involve non-business debts, which totaled 1.536 million, up 9% from 1.4 million filed in 2009. Business filings totaled 56,282, down 7% from 60,837 in 2009. Chapter 7 bankruptcy filings totaled 1.139 million in 2010, with Chapter 13 the next highest, at 438,913 filings, followed by 13,713 under Chapter 11, and 723 under Chapter 12. The recession's end is finally bringing the expected improvement in consumer and business finances, said Moody's However, it cautioned that business and personal filings "are on different paths." Business bankruptcy filings have fallen for a year and a half, while personal filings have been slower to begin to drop. Business filings remain highly elevated by historic standard, above levels seen leading up to the bankruptcy reform legislation in 2005. "By contrast, the level of personal filings has only briefly returned to levels seen in the early part of the last decade and is slipping below them again. This is true despite high unemployment and high levels of defaults including credit card chargeoffs and foreclosures," Moody's said. For more detail, use the link.

Survey Debit card rule means higher costs restrictions

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MADISON, Wis. (2/16/11)--If a proposed Federal Reserve regulation goes into effect, people who use debit cards issued by community banks will have higher costs and increased restrictions, according to a new survey by community bankers. The regulation also would impact credit unions. Government price-fixing as proposed in the Federal Reserve rule that would implement the Durbin amendment of the Dodd-Frank Wall Street Reform and Consumer Protection Act will cause the higher costs and restrictions, the Independent Community Bankers of America (ICBA) said (ENP Newswire Feb. 15). Merchants will see $12 billion in windfall profits if this new rule is implemented, the news service said. Key findings in the ICBA survey:
* 93% of community banks say they will be required to charge their customers for services that are currently offered for free because of the new law and the Federal Reserve rule; * 72% say they will have to implement annual or monthly charges for use of a debit card; * 61% say they will have to impose a minimum balance requirement; * 50% say they will have to impose a charge each time customers use their debit card; * 65% say they will have to raise their qualification standards, either by strengthening debit card qualification thresholds or closing higher-risk transaction accounts; * Nearly 20% say they will have to eliminate jobs or halt plans to open new bank branches; * 72% of community banks say they will no longer be able to afford free checking accounts because of the new law and the Federal Reserve rule; * Nearly 70% say they will have to charge for services that are now free, such as online or mobile banking; and * Nearly half say the rule will harm their customers because it will make it difficult for them to continue offering competitive rates on deposits and loans.
Credit Union National Association President/CEO Bill Cheney recently urged the Fed to take the time to study the new interchange law, rather than forging ahead with new rules, so everyone wins, including consumers, merchants and financial institutions. The Fed should be given time to consider all interchange-related costs and set a reasonable interchange rate to avoid unintended consequences such as elimination of debit card programs by credit unions, he said. Credit unions also may be forced to impose new fees on members’ debit accounts to keep their card programs afloat, he said. In addition, he challenged retailer claims that any savings gained from the interchange fee cap would be passed on to consumers. The Fed proposal will be open for comment until Feb. 22. The U.S House Financial Institutions and Consumer Credit subcommittee has a hearing scheduled Thursday on interchange.

Green America Sends CDFIs a Valentine

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WASHINGTON (2/16/11)--Consumers not feeling the love from big banks were encouraged to break off their relationships and turn to community development financial institutions (CDFIs), including credit unions, through a Valentine’s Day campaign sponsored by the nonprofit group Green America. The campaign highlighted the ethical abuses carried out by many large financial institutions and urged fed-up consumers to “break up” with their mega-banks on Valentine’s Day (PR Newswire Feb. 14). Green America, which provides tools and strategies for solving social and environmental problems, took aim at the questionable lending practices of big banks and large bonuses paid to their executives. The organization urged consumers to opt for CDFIs instead. CDFIs are banks, credit unions, and other financial-services organizations, such as community development loan funds, that measure their returns both in terms of financial profitability and social impact. CDFIs help the hardest hit communities and consumers in the U.S., said Green America. In the campaign Green America Corporate Responsibility Director Todd Larsen urged dumping big banks with these words: “Tired of being abused by your polluting and fee-addicted mega-bank? Not willing to stay in a bad relationship where you give and give … and all your bank does is take and take? Then, it's time for you to think about dumping your mega-bank and getting into a healthy financial relationship with a community development financial institution.”

Wis. employers vie for free staff training tested by CUs

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PEWAUKEE, Wis. (2/16/11)--Wisconsin companies are rapidly enrolling employees in the Investor Education In Your Workplace program, a grant-funded program that offers 10 hours of self-paced, online training on money and investing. Several thousand Wisconsin credit union employees received training in the program, and some are certified educators, offering the same online program statewide, said the Wisconsin Credit Union League. As many as 4,000 Wisconsin workers could soon become more financially fit because of the program that, in addition to offering $400,000 in free training value to Wisconsin firms, may offer improved bottom-line results for participating companies, said the league. “When employees are financially fit, that can help the companies they work for,” said Brett Thompson, league president /CEO. “Studies have proven that financially savvy employees are less stressed, happier and more productive. And companies that help their staff achieve peace of mind with their pocketbooks often see fewer workplace distractions, improved employee morale, reduced absenteeism and decreased turnover.” More than 3,500 employees from 80 credit unions completed 30,000 hours of investment education in 2009--the year the program was developed and piloted in the U.S. Twenty-two received advanced training in 2010 to become Certified Financial Educators (CFEds)--a nationally recognized designation by the Heartland Institute. This year, they will offer the same basic online program to employers across the state. The CFEds will help recruit participating companies, coordinate the training for firms in their area and coach participants. They do not promote specific financial products, partners or services, making them a valuable third party and objective “coach” to help employees and employers alike. The coursework focuses on investing concepts including goal setting, planning for educational needs and financial emergencies, distinguishing among investment vehicles, managing risk, diversifying a portfolio, maximizing tax advantages, understanding mutual funds and working with investment professionals. Credit union employees who completed the program earned an average passing grade of 87.69% on coursework and an average 23.31% improvement in knowledge. The number of participants who created a family budget, set goals and contribute to retirement savings programs increased 5% to 50%. “The goal is to debunk a common fallacy that has prevented most Americans from doing the basic investing they’ll need to secure their futures,” Thompson explained. “Workers often mistakenly believe that they can never get ahead financially because they have too few dollars to invest and that common expenses will derail those efforts. But that’s not true. Every person with income, no matter how modest, can turn small contributions to investment accounts into significant assets while at the same time planning for life’s inevitable financial emergencies.” Wisconsin credit unions called their pilot program Real Progress & Pathways to Prosperity (or RP3). Credit unions in Pennsylvania and North Carolina also have enrolled in hopes of replicating Wisconsin credit unions’ success. Credit unions are participating in the project as part of a REAL Solutions initiative, which helps people of all incomes build wealth.

Three named finalists for CO-OP THINK PRIZE

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RANCHO CUCAMONGA, Calif. (2/16/11)--Three finalists have been named for the inaugural CO-OP THINK PRIZE, which offers $10,000 in seed money for an innovative idea to reshape the credit union industry. Judging is based on the entry’s potential positive impact on the industry, its creativity and its ability to be shared and implemented by all credit unions. The three finalists are:
* Shari Storm, senior vice president and chief marketing officer, Verity CU, Seattle. Her entry is a business plan for the Squirrel smartphone application. * Candace Vogelsong, marketing specialist, Community Powered FCU, Newark, Del. Her business plan addresses social media. * Matt Weidler, information technology asset coordinator, Evangelical Christian CU, Brea, Calif. His business plan centers on cellular ATM access.
They will present their ideas at the THINK 11 Conference on May 17 in Anaheim, Calif. Voting will be conducted by a panel of judges from CO-OP Financial Services and the Filene Research Institute, and conference attendees. Credit union industry employees--even those not attending THINK 11--can view the entry videos and cast votes on-line at from April 15 through May 6. The CO-OP THINK PRIZE was introduced last April at CO-OP’s THINK 10 Conference. Initial entries were required by Oct. 15, and from these, 25 semi-finalists were asked to provide business plans by Dec. 31. All semi-finalists received a $150 gift card from MasterCard, a sponsor of both the CO-OP THINK PRIZE and the THINK 11 Conference. Storm, Vogelsong and Weidler will work with a video production company provided by CO-OP Financial Services to present their plans online and at the conference. The $10,000 in seed money is being awarded to help bring the winning idea to reality for the benefit of winner’s credit union and the entire movement. Biographies of the finalists, capsule descriptions of their entries, and video presentations can be found online starting April 15. Registration for the THINK 11 Conference is free to credit union employees.

Mich. Senate boards delay debit interchange train

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LANSING, Mich. (2/16/11)--The Michigan State Senate Monday approved a resolution backing a delay in implementation of the Federal Reserve's proposed interchange regulation. The state House approved the resolution last week. "We appreciate the strong message sent by the Michigan state Legislature on this very bad debit interchange legislation," said Michigan Credit Union League CEO David Adams. "In an economy like Michigan's we can ill afford any regulation that so severely restricts income for lenders." The U.S. House Financial Institutions and Consumer Credit Subcommittee has scheduled a hearing Thursday on interchange issues. The Credit Union National Association has urged the Fed to take time to study the new interchange law to consider all related costs and set a reasonable interchange rate to avoid unintended consequences on credit unions' debit card programs.

N.M. CU Day attracts 100 CUs lawmakers

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ALBUQUERQUE, N.M. (2/16/11)--More than 100 credit union advocates and state legislators attended the New Mexico Governmental Affairs Conference in Santa Fe, N.M., earlier this month.
Click to view larger image New Mexico State Rep. Jane Powdrell-Culbert (R-44) presents the proclamation declaring Feb. 9 as Credit Union Day to Credit Union Association of New Mexico Vice President of Governmental Affairs Juan Fernández. (Photo provided by the Credit Union Association of New Mexico)
The lawmakers addressed CEOs and other credit union professionals who attended the conference, hosted by the Credit Union Association of New Mexico, despite single-digit temperatures, snow and icy roads. Special guest, as portrayed by David Landis, was the late, former Nebraska U.S. Sen. George Norris, the author of the 20th Amendment and lifelong credit union supporter. Feb. 9 was declared New Mexico Credit Union Day through a House Memorial introduced by New Mexico State Rep. Jane Powdrell-Culbert (R-44). The proclamation recognizes the state’s credit unions for helping members improve their economic status, teaching financial literacy to the state’s young people and improving their communities through numerous projects for more than 75 years.

CU System briefs (02/15/2011)

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* PAWTUCKET, R.I. (2/16/11)--Thomas Flannery, 36, was arrested at a hotel in downtown Providence, R.I., Monday morning on a warrant out of Massachusetts in connection with a series of robberies there. He was charged later with the robbery of Pawtucket (R.I.) CU, which occurred at about 10 a.m. Monday. The robber passed a note to a teller there and left with an undetermined amount of cash. Seized during the arrest were money, a demand note, gloves, and clothing used in the robbery, said the Rhode Island State Police. Flannery also is accused of three robberies in Brookline, Mass., on Jan. 26, Feb. 4 and Feb. 7, and is a suspect in a bank robbery Feb. 10 in South Attleboro, Mass. ( Feb. 15 and Feb. 14) … * KANKAKEE, Ill. 2/16/11)--Three Kankakee men are in custody after an apparent attempt was made to rob Riverside CU's branch in Bourbonnais, Ill. Names of the three were not disclosed. They were picked up by police Friday after tellers at the branch noticed two men making their way across the credit union's parking lot. The tellers locked the front doors and triggered an alarm at 1:51 p.m. (The Daily Journal Feb. 14) … * FORT WAYNE, Ind. (2/16/11)--Britain K. Flowers, 25, a former employee of Three Rivers FCU, was charged Friday in Allen Superior Court with four felonies related to the misappropriation of $47,900 from two members and the credit union (News-Sentinel Feb. 12). The incidents allegedly occurred between Sept. 1 and Oct. 12. Flowers was suspected of making unauthorized withdrawals of up to $36,400 from a member's money market account, $7,000 in unauthorized withdrawals from another account, and $4,000 from the teller drawer … * LANSING, Mich. (2/16/11)--Michigan's Downriver Chapter of Credit Unions sponsored its first legislative breakfast of 2011 in S
Click to view larger image Click for larger view
outhgate with 30 credit unions and two lawmakers attending. The event was hosted by Monroe County Community CU. Lawmakers attending were Sen. Hoon-Yung Hopgood (D-Taylor), left, and Rep. Doug Geiss (D-Taylor), third from right. They are pictured with attendees. Among the topics discussed include these industry specific topics: raising the zero dollar threshold for reporting requirements for political action committee contributions, a bill Geiss has introduced, and shortening the redemption period for foreclosed properties. Michigan has one of the longest redemption periods in the nation. Twenty-five states have no redemption period. (Photo provided by the Michigan Credit Union League) … * DUBLIN, Ohio (2/16/11)--BMI FCU President/CEO Sharon Custer has announced plans to retire in May, 2012. The Dublin, Ohio-based credit union's board of directors has selected Bill Allender as her successor, she said. Allender is currently executive vice president and will move into the position of president on March 1, 2011. He has been with BMI FCU for eight years and served previously as vice president of finance. Custer will keep the title of CEO until her retirement. After May 2012, Allender will become president/CEO …

Invest in America buys CUTS Performance Marketing

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LIVONIA, Mich. (2/15/11)--CU Solutions Group (CUSG) has acquired CUTS Performance Marketing to expand its Invest in America program. The acquisition, which took place Jan. 24, means greater access to offers that help credit unions with loan, membership and income, and card growth. Programs from CUSG, formerly CU Village, and CUTS will be delivered from a single source under the Invest in America brand. Credit unions will be able to leverage their combined suite of membership enhancement offers and members can take advantage of a richer offering of discounts. It also means clients can access the combined expertise and staff of both organizations. CUSG will receive CUTS' member discount programs, including a program for Intuit's TurboTax. CUTS discount programs will be offered through CUSG's partnerships with Sprint and General Motors, and will add value to the Invest in America program for its, 3,000 credit unions and their members. "CUTS will be fully integrated into CUSG," said David Adams, chairman/CEO of CUSG. He added that CUTS' San Diego-based staff will continue to support existing programs.

CU in Alabama sues over bond claim

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BIRMINGHAM, Ala. (2/15/11)--A credit union in Alabama has filed a lawsuit seeking $3 million over a bond claim regarding loan losses that was denied by CUMIS Insurance Society. The credit union also is seeking to get the case remanded back to an Alabama circuit court. Alabama Central CU, based in Birmingham, had submitted a claim to CUMIS over losses from loans approved by former credit union senior vice president William Kiser Jr. The credit union filed suit in Circuit Court of Jefferson County, Ala., on Jan. 3 against CUMIS Insurance Society and CUNA Mutual Insurance Society. CUNA Mutual Insurance Society and CUNA Mutual Group are improperly named in the lawsuit, said court records, because the bond was issued by CUMIS. CUMIS had the case removed to a U.S. District Court on Feb. 9, and the credit union responded Friday with a motion to remand the case back to the Alabama court, according to court documents. The motion to return to the original court is based on the fact that Kiser, also a defendant in the case, is an Alabama resident. "The lawsuit involves a faithful performance claim involving loans made by a former credit union vice president (not a CUMIS representative)," Phil Tschudy, CUNA Mutual Group media relations manager, told News Now. "The claim was denied because we believe it does not fall within the Faithful Performance coverage under the Bond. We hope this matter can be resolved in a fair manner for all parties," he added.

Interchange resolution moves through Mich. legislature

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LANSING, Mich. (2/15/11)--A resolution in the Michigan state legislature backing a delay in the implementation of the Federal Reserve's proposed interchange regulation was reported out of the Senate Banking and Financial Institutions Committee last week and awaits adoption today by the full Senate. Senate Resolution 14, sponsored by state Sen. Darwin Booher (R-Evert), was unanimously reported out of the committee, said the Michigan Credit Union League (Michigan Monitor Feb. 14). Earlier last week a companion bill, House Resolution 21, was adopted in the full House with bipartisan support after it was reported unanimously out of the House Banking and Financial Services Committee (News Now Feb. 11). "We continue to pull out all the stops on the debit card interchange issue," said league CEO David Adams in the Monitor. In addition to letters written to Michigan's three congressmen on the House Financial Services and to in-district meetings with lawmakers, the league also took "this unprecedented action of asking our state legislature to encourage Congress to address this serious issue." The Credit Union National Association (CUNA) is working with the league to delay implementation of the Fed's interchange provisions. The provisions would cap debit card interchange fees paid by merchants to card issuers at as little as seven cents per transaction. Issuers with less than $10 billion in assets would be exempt from the changes. CUNA President/CEO Bill Cheney recently urged the Fed to take the time to study the new interchange law, rather than forging ahead with new rules, so everyone wins, including consumers, merchants and financial institutions. The Fed should be given time to consider all interchange related costs and set a reasonable interchange rate to avoid unintended consequences such as elimination of debit card programs by credit unions, he said. Credit unions also may be forced to impose new fees on members' debit accounts to keep their card programs afloat, he said. In addition, he challenged retailer claims that any savings gained from the interchange fee cap would be passed on to consumers. The Fed proposal will be open for comment until Feb. 22.

Filene partners with CU Central of Canada

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MADISON, Wis. (2/15/11)--The Filene Research Institute and Credit Union Central of Canada have announced a formal partnership to extend their research. The new partnership, which becomes official in April, was created to help both organizations keep pace with market, regulatory and consumer change and provide information to credit unions in Canada and the U.S. Filene and Canadian Central are building on a relationship which began in 2009 and includes credit union access to Filene research reports and Canadian credit union system participants on Filene’s i3 innovation team and its Research Council. Through the partnership the organizations will work together and share costs for projects that are relevant to North American credit unions. All Canadian credit unions affiliated with Canadian Central will have access to Filene’s research library and innovation projects. As part of the agreement, Filene and Canadian Central will produce up to four joint research projects each year. The two organizations will host joint academic gatherings and appoint a Canadian member to the Filene Research Fellows panel. The Canadian credit union system will continue to participate on Filene’s i3 innovation team and on its research council. Filene and Canadian Central recently collaborated to share the findings of the study, “Credit Union Social Responsibility: A Sustainability Roadmap across Canada.” Both organizations said they are interested in credit union governance, public policy and innovation. The organizations will sponsor staff exchanges to further develop research and innovation sharing.

CU System brief (02/14/2011)

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* FRAMINGHAM, Mass. (2/15/11)--Framingham (Mass.) Municipal FCU has a new charter and a new name, MetroWest Community FCU (MWCFCU), the more than $86 million asset credit union announced. Founded in 1944 to serve municipal employees of the Town of Framingham, the credit union has been granted a community charter by the National Credit Union Administration. Anyone who lives, works, worships or attends school in the Metro-West Communities of Middlesex County is eligible to join. "Our new charter will allow us to compete more aggressively with the banks," said MetroWest President John Gallinaugh. "People everywhere are looking to credit unions as a good alternative, and now all our neighbors throughout the MetroWest community can look to us." Gallinaugh noted the credit union is eliminating monthly checking fees and fees for Internet banking while Bank of America is raising fees for checking. The credit union also will offer mobile banking, shared branching and enhanced online services, he said. "Plus, we're looking to improve rates on products like credit cards and deposits …

Gov. officials to address Iowa legislative conference

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DES MOINES, Iowa (2/15/11)--Gov. Terry Branstad and Iowa Attorney General Tom Miller will be the keynote speakers at the Iowa Credit Union Legislative Issues Conference today in Des Moines. Branstad will share his legislative priorities, and Miller will discuss hot topics and priorities for this year. Newly appointed Superintendent of the Iowa Division of Credit Unions JoAnn Johnson, Iowa Economic Development Director Debi Durham and a state legislative panel also will discuss key issues facing state lawmakers. Representatives from the U.S. Department of Agriculture and the Small Business Administration will provide an overview of agricultural lending in the state. An informal evening reception will be held tonight.

Grant funds fin-ed workshops for refugees in S.D.

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HURON, S.D. (2/15/11)--Tailored financial management workshops and individual counseling sessions have helped Dakotaland FCU, based in Huron, S.D., to make a difference with the population of Karen refugees, political refugees from Burma now calling the city home. The city of 12,000 experienced a tripling of its immigrant population after the refugees fled their homeland because of governmental unrest in Burma, said Dawn Mutchelknaus, vice president of marketing at Dakotaland FCU. Most fled to Thailand and some have come to the U.S. "The Huron community as a whole has strived to assist our immigrant population in transitioning to their new home," Mutchelknaus said.
Click to view larger image Sah Lay Lay Wah, right, shown with her family, is instrumental in Dakotaland FCU’s providing services to Huron, S.D.’s population of Karen immigrants from Burma. (Photo provided by the National Credit Union Foundation)
In 2009, the credit union partnered with Lutheran Social Services of South Dakota to provide financial management classes targeted to the Karen community, with translated materials and an interpreter. With a grant last year from the National Credit Union Foundation (NCUF), the credit union expanded these workshops. Almost 200 Karen-speaking people attended six classes in 2010 that dealt with basic financial management, checking and savings accounts, home ownership concepts and credit cards and borrowing. They also learned to manage a budget, save for future expenses and develop a positive credit history. Through individual credit counseling, the credit union is assisting families with establishing a budget, buying Governor's homes, helping them get approved for U.S. Department of Agriculture Rural Housing loans and for real estate loans with the credit union. The credit union opened 275 to 300 new accounts with the Karen population. These accounts have at least a savings account, direct deposit and ATM card, with most also having checking accounts and credit card and debit card services. It also hired Sah Lay Lay Wah, a Karen refugee, who translates and interprets for other Karen residents who have opened accounts, purchased cars or bought homes through the credit union. Wah was born in Thailand in a camp called Hway K' lot. She and her siblings grew up at the camp, knowing that leaving the camp would mean capture by Thailand soldiers or jail or worse. When Wah was 14, Burmese soldiers and the Democratic Karen Buddhist Army burned the camp and returned later to kill those who remained. Her family moved to Mae La, a second camp, where she attended school and higher education courses there and learned English. At 23, she left for the U.S. Her husband Blue secured employment with Dakota Provisions, and Wah joined Dakotaland FCU's staff. They were recently approved to buy their first home. Owning property was not possible in Thailand, she said. "I feel safe in Huron," she said. "This is a great example of a credit union helping members of the community reach financial independence," said Tom Candell, NCUF deputy executive director and chief operating officer/chief financial officer. NCUF grants are made possible by supporters of the foundation and the Community Investment Fund.

New WOCCU anniversary fund to aid farmers

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MADISON, Wis. (2/15/11)--World Council of Credit Unions' newly established 40th Anniversary Fund will help provide financial products and agricultural training for small-scale farm families in rural Africa and Latin America.
Click to view larger image World Council of Credit Unions (WOCCU) is celebrating four decades of global service this year by rededicating itself to helping small-scale farm families in rural Africa and Latin America. Here, Brian Branch (left), WOCCU executive vice president and chief operating officer, joins small-scale Kenyan farmers in examining their crop. (Photo provided by World Council of Credit Unions)
Stability gained through loans from WOCCU-supported credit unions will help farmers to better grow their farming enterprises and seek out the best prices for their crops, WOCCU said. “Financial stability and food security are two key issues facing the rural poor in developing countries,” said Brian Branch, WOCCU executive vice president and chief operating officer. “Donations to the fund will enable small credit unions to assist small-scale farmers to increase their yield, plant more profitable crops and better meet the food and nutrition needs of their families and their communities.” Supported by donations from individuals and organizations, the fund is aimed at supporting farmers having two acres or less of land under cultivation in Africa and Latin America. With assistance provided by credit union development and agricultural extension staff, farmers will learn better crop production methods and receive financial support to maintain cash flow and benefit from micro-business development strategies. Farmers will realize greater profits from higher crop yields, which in turn will help increase food availability to the community. Participating credit unions will see increased membership and more lending, which will help them grow and ultimately serve more members without the need for outside financial support, according to Branch. The fund helps celebrate the 40th anniversary of WOCCU, which was incorporated on Nov. 9, 1970, and opened its doors for business on Jan. 1, 1971. WOCCU evolved with the support of the global credit union movement from Credit Union National Association’s (CUNA) World Extension Department, first established based on the recommendation of U.S. credit union pioneer Roy Bergengren and approved by CUNA's board on May 15, 1954.

N.C. league votes to recap First Carolina Corporate

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GREENSBORO, N.C. (2/14/11)--The North Carolina Credit Union League and League Service Corp. board of directors voted unanimously to contribute its fair share toward the recapitalization of First Carolina Corporate CU, the league announced. The board made the commitment at its regular monthly meeting Feb. 3 (Weekly Update Feb. 11). "First Carolina has been a valuable partner to the league and to credit unions in North Carolina over the years," said league President/CEO John Radebaugh. "The corporate landscape has changed dramatically in the last two years, but we strongly believe that the leadership of First Carolina has a great plan in place to continue doing what it does best--serve its members well," he added. In December, the corporate booked its 2010 other than temporary impairment (OTTI) charges, which was offset by accounting adjustments on bonds the corporate had previously written off too much principal, according to a Jan. 24 letter to credit unions from David W. Brehmer, president/CEO. The letter accompanied First Carolina's December 2010 Financial Statements, which are posted on the corporate's website. "The net impact was a loss of $423,000. We sold one credit card asset-backed security at a positive gain of $249,000," said Brehmer in the letter. "After all of these transactions, we were still able to book strong positive earnings for the month. We ended the year with just over $3.2 million in net income." "With no remaining capital at risk at U.S. Central, we have begun building the organization's retained earnings and overall capital position," he said. All remaining deposits at U.S. Central Bridge Corporate are fully covered by the National Credit Union Share Insurance Fund share guarantee, he added. Assets for the corporate are $1.918 billion, about $136 million more than in December 2009. Its capital is at 1.90%, below the minimum required regulatory capital level. Under the final Regulation 704, the corporate resubmitted its Capital Restoration Plan to the National Credit Union Administration on Jan. 21. It plans to recapitalize the organization by April 29, well before the forbearance period expires, according to the financial statement. The targeted recapitalization goal and plan will put the corporate above all required minimum capital levels well before the October deadline. As of Dec. 31, capital totaled more than $39 million, excluding unrealized losses on securities and accumulated other comprehensive losses.

In the media Metaphors and mortgage modification

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MADISON, Wis. (2/14/11)--Two media reports last week on widely different topics brought up credit unions--one as a metaphor and the other as a solution in a mortgage modification request. First, the metaphor. The announcement last week that AOL was buying the Huffington Post was greeted as an oxymoron at best by Post readers. Within hours of the announcement, readers began voicing their disapproval online. There were so many that Business (Feb. 8) wrote a story about readers' reactions. Here's part of what it reported: "Huffington Post readers even made a game of one-upping each other with metaphors that conveyed the depth of their despair about the sale. 'This feels like walking into my credit union only to find out it was bought by Bank of America,' one said. '[It's] like Carol Channing taking over for Fergie in the Black Eyed Peas. Legendary, but past the expiration date by about 10 years,' another lamented. A user with the tech analogy might have been the closest to the broader sentiment: 'It's like Friendster buying Facebook.'" In the other article, a column by personal financial columnist Harry Gross in the Philadelphia Daily News, advised a reader who had been trying to get a mortgage modification since July 2009 and was turned down repeatedly to write lawmakers or try local credit unions. "I know that too many credit inquiries can hurt your credit," Gross wrote, "but I'd like you to try for a new mortgage with two of our local credit unions. With 'too much earnings,' you should be able to get one at a rate that's appreciably lower than you have." ( Feb. 10).

Ohio league board officers chosen

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COLUMBUS, Ohio (2/14/11)--The Ohio Credit Union League and its affiliated boards of directors elected their 2011 officers during their February quarterly meetings. Tim Boellner of AurGroup Financial CU, Fairfield, was elected chair of the league; Barry Shaner of Directions CU, Sylvania, as vice chair; Stan Barnes of CSE FCU, North Canton, as treasurer; and Phil Meyer of Ohio University CU, Athens, as secretary (eLumination Newsletter Feb. 9). On the OCUL Services Corp. board, Tamlyn Straight-Schervish of Unity Catholic FCU, Parma, was elected chair; Vidya Iyengar of Marion (Ohio) Community CU as vice chair; Stan Barnes of CSE FCU as treasurer, and Phil Meyer of Ohio University CU as secretary. For the Ohio Credit Union Legislative Action Committee and Ohio Credit Union League Political Action Committee Boards of Trustees, Gary Soukenik of Seven Seventeen CU, Warren, was elected chair; Mike Kurish of Associated School ECU, Youngstown, as vice chair; Catherine Herring of Communicating Arts CU, Cincinnati, as Treasurer, and Judy Andrews of State Transportation ECU, Columbus, as secretary. On the Ohio Credit Union Foundation’s Board of Trustees, Tom Furrey of Western CU, Columbus, was elected chair; Stan Barnes of CSE FCU as vice chair; Sonja Delaney of Midwest Community FCU, Defiance, as treasurer; and Sandy McCormick of Total Assurance FCU, Worthington, as secretary.

Iowa judge lifts land-deal injunction

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NORTH LIBERTY, Iowa (2/14/11)--A judge in Iowa has lifted a temporary injunction against the city of North Liberty, which means the city can move forward with a land deal to develop the new headquarters of University of Iowa Community CU (UICCU). The city had been negotiating with UICCU, landowner North Liberty LLC and several development groups for several months on the project, which would provide a tax incentive to the credit union for moving its headquarters there ( Feb. 11). In December, the Concerned Taxpayers for North Liberty, saying the project would cause taxes to increase, received a temporary injunction to prevent the project from developing. The city negotiated a new deal, and Tuesday night the City Council passed resolutions authorizing the construction of the building (News Now Feb. 10). The city had a hearing scheduled for Friday morning to determine whether the resolutions violated the injunction, but before the hearing took place, District 6 Judge Paul Miller told attorneys he was lifting the injunction, said the Press-Citizen. North Liberty will provide up to $5.4 million in incremental tax rebates on the property. Originally the city had planned to buy $11 million in bonds and use the money as a grant to a local development group to buy 64 acres. The development group would then sell the credit union the property for $1. The city would have paid for the bonds by placing the credit union in a tax incremental funding or TIF district. Instead the development group and credit union will purchase the land directly and be eligible for incremental tax rebates. A second plan would involve UICCU buying 24 acres of land, with the city rebating 100% of the taxes generated by the new headquarters for eight years.

Kansas CUs brave weather to storm Capitol

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Kansas State Rep. Richard Proehl visits with Marla Marsh, president/CEO of the Kansas Credit Union Association (KCUA), during KCUA’s Annual Day at the Capitol on Feb. 9. Proehl is vice chairman of the financial institutions committee. (Photo provided by Kansas Credit Union Association)
TOPEKA, Kan. (2/14/11)--Braving cold and snowy weather, credit union representatives throughout Kansas traveled to the statehouse Feb. 9 to meet with legislators and discuss issues affecting the state’s 101 credit unions and the 605,000 members they serve. At the Kansas Credit Union Association’s (KCUA) Annual Day at the Capitol, the message to legislators was two-fold: Be mindful of new legislative and regulatory burdens that affect credit unions’ ability to serve their members, and remember that credit unions remain especially valuable to consumers in today’s tough economy. “While the weather prevented some attendees from participating, those taking part did a great job of carrying the message,” said Marla Marsh, president/CEO of KCUA. “We heard from several legislators that they not only understand the impact of increasing regulations on credit unions, but will work to maintain a balance between protecting consumers and stifling business growth.” That was a main point made during the day’s keynote event--a panel discussion featuring the state’s top legislative leaders: Senate President Steve Morris, Senate Minority Leader Anthony Hensley, House Speaker Pro-Tem Jene Vickrey and House Minority Leader Paul Davis. “People are becoming increasingly mindful that we are over-regulated in certain areas,” said Davis. “But we also have to be cognizant that regulations are in place for a reason. It’s a balancing act.” Morris agreed. “Congress hasn’t figured out how to regulate the big institutions, so they’re over-regulating, and that is affecting smaller institutions,” he said. “We are very conscious about the effects of the laws and try to limit those that aren’t needed.” The day also included scheduled visits with state legislators in both chambers and an afternoon presentation by Kansas State Treasurer Ron Estes, whose office works with KCUA to provide financial literacy camps for students statewide.

First Gentleman launches student program at SECU

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North Carolina First Gentleman Bob Eaves (center, back row) recently visited the State Employees’ CU (SECU) Raleigh Centennial Parkway branch. Eaves, and SECU Board Chairman Jim Barber (right, back row) and Branch Vice President Tim Swinson, spoke with students from Centennial Middle School about the importance of education in workplace success. (Photo provided by State Employees’ Credit Union)
RALEIGH, N.C. (2/14/11)—North Carolina First Gentleman Bob Eaves visited the State Employees’ CU (SECU) branches in Raleigh and Greensboro Jan. 31 to begin N.C. Business Committee for Education’s Students@Work Week. Eaves, SECU’s Board Chairman Jim Barber and Raleigh Centennial Parkway Branch Vice President Tim Swinson, spoke with a group of students from Centennial Middle School about the importance of education in workplace success. Eaves, the husband of North Carolina Gov. Bev Perdue, also traveled to SECU’s Greensboro Summit Avenue branch to speak with students from Aycock Middle School. Students@Work, a program spearheaded by Eaves, focuses on raising North Carolina’s graduation rate by giving middle-school students a chance to connect their classroom learning to real-world workplace experiences. SECU branches statewide participated in the campaign, which ran through Feb. 4. Eaves launched the program in New Bern in 2010, encouraging businesses to provide job-shadowing opportunities for middle-school students. Eaves has enlisted the support of the state Department of Public Instruction and the state Business Committee for Education to grow Students@Work to 30 companies spanning all 100 North Carolina counties. The program focuses on middle-school students because middle school is a crucial time for dropout prevention. Of every 100 students who enter the ninth grade, about 29 drop out, according to the N.C. Department of Public Instruction. “Too many students don’t see the value in their education,” said Eaves. “We need to motivate these kids and let them see there is a bright future.”

Save to Win 100000 grand-prize winner presented

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Charmain Hanners (right), winner of the $100,000 grand prize in the Save to Win contest, poses for pictures with her husband Ronald (left) and grandson Charlie. (Photo provided by Michigan Credit Union League)
LIVONIA, Mich. (2/14/11)--Charmain Hanners, a member of $243 million-asset Alpena Alcona Area CU, Alpena, Mich., won the $100,000 grand prize in Michigan’s groundbreaking Save to Win contest. Save to Win is a Michigan Credit Union League (MCUL) program designed to encourage saving. Each $25 deposit into a Save to Win certificate by a credit union member is good for one entry into the annual $100,000 grand-prize drawing. The program also awards smaller monthly cash prizes ranging from $125 to $1,000. As of Dec. 31, roughly 157 Aplena Alcona Area CU members had saved $84,000 through the Save to Win program. Statewide, credit union members saved $28 million, according to the MCUL (Michigan Monitor Feb. 11). Hanners and her husband Ronald have been credit union members since 1973. Her father served on a credit union board. Hanners opened the account in July to save money for her grandson’s education. She said she plans to use some of her winnings for that purpose, and for the education of any future grandchildren. She also indicated she will share her winnings with battered women’s and homeless shelters and the American Cancer Society.

CU System briefs (02/11/2011)

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* KOHLER, Wis. (2/14/11)--Art students at Sheboygan (Wis.) High School designed checks for the Kohler CU, based in Kohler, as part of a graphic design unit, said The Sheboygan Press Feb. 6). Each student in Drawing Intensive classes was required to design a check, make it visually appealing and include all the components of a check. Students used a variety of media, including pen and ink, acrylic paint, watercolor and Prismacolors. The artwork will be displayed at Kohler's Taylor Drive branch until the end of the month … * SANTA ROSA, Calif. (2/14/11)--Redwood CU employees showed their
Click to view larger image Click for larger view
support for healthy hearts on the American Heart Association's (AHA) National Wear Red Day on Feb. 4. In addition to wearing red, employees went the distance by walking 65 miles during their breaks and lunch hour to take action against heart disease. "RCU is focused on helping people be financially healthy, but we also want our communities to enjoy the benefits of being physically healthy, so participating … is a natural fit," said Robin McKenzie, RCU senior vice president. By adding the walk-a-thon this year, "our staff was able to enjoy the unseasonably warm February sunshine while reminding our communities that there are simple steps everyone can take to prevent heart disease." (Photo provided by Redwood CU) … * HIGHTSTOWN, N.J. (2/14/11)--The New Jersey Credit Union League's
cooperative advertising campaign, "New Jersey's Credit Unions, Banking You Can Trust," this year is expanding its existing TV and radio coverage, continuing its New Jersey Transit ads, and branching into new outlets, such as this billboard (The Daily Exchange Feb. 10). Billboards will carry the message throughout Essex, Middlesex and Union Counties. (Photo provided by the New Jersey Credit Union League) …

Minnesota network restructures

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ST. PAUL, Minn. (2/14/11)--The Minnesota Credit Union Network (MnCUN) has undergone an internal reorganization so it can better serve member credit unions as a more focused, strategic trade association, announced MnCUN Friday. MnCUN has separated its not-for-profit operations from its for-profit operations to allow individual focus on both areas. Governmental affairs continues as one of the network's core functions. The new executive team includes:
* Kristina Wright, formerly vice president-communications, now vice president-association services; * John Ferstl, who will join MnCUN as vice president-Network Service Corp.; and * Mara Humphrey, who will continue as vice president-governmental affairs.
Wright has led the communications department since 2000. Ferstl has nine years' experience with a metro area credit union, where he directed sales and consumer lending. Humphrey joined the network as its chief lobbyist in 2006. According to MnCUN President/CEO Mark Cummins, "this new internal structure will allow the network staff to contribute more resources to areas of major importance, including governmental affairs and public relations. In addition, we look forward to strengthening the Network Service Corp. to offer additional value and increased products and services to credit unions."

CU System briefs (02/10/2011)

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* HARRISBURG, Pa. (2/11/11)--A credit union in Leechburg, Pa., has reported suspicious inquiries by a person seeking membership. A person identifying himself as "Samir Shah" called Allegheny Metal FCU three times Monday, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Feb. 10). The community-chartered credit union asked what his relationship is to its field of membership, and he indicated he works for Harvard Drug Group LLC, located in Michigan, and said it does business with three companies in the Leechburg area. Shah faxed a list of the businesses to the credit union, but when contacted, none had any knowledge of Shah or his company. On the third call, the credit union asked Shah why he was interested in joining the credit union. The reply: he liked the CD rates the credit union was offering. The credit union does not currently offer CDs … * EVANSVILLE, Ind. (2/11/11)--Dennis F. Burris, 55, of Evansville was indicted by a federal jury for attempting to deposit a $90,500 fraudulent U.S. Treasury check at Evansville Teachers CU in a newly opened account. If convicted, Burris faces a maximum of 25 years in prison and a $250,000 fine. An initial hearing before a U.S. magistrate judge was held Feb. 3 ( and … * MANHATTAN BEACH, Calif. (2/11/11)--Kinecta FCU has opened a Midwest Operations Center in Rosemont, Ill., as part of its expansion into wholesale mortgage lending division. The new 20,000 sq. ft. center will provide complete loan processing, underwriting and funding services as well as customer service for mortgage brokers in the Midwest. Kinecta, a $3.5 billion asset credit union based in Manhattan Beach, Calif., has operations in more than 17 states. It provides a range of fixed and adjustable home loans for purchase or refinance (PRNewswire Feb. 9) …

CUNA Mutuals crop insurance reaps 58 hike in net income

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MADISON, Wis. (2/11/11)--CUNA Mutual Group reported an increase of 58% in net income for 2010--primarily as a result of the company’s diversification into crop insurance. Net income grew to $87 million, compared with $51 million in 2009. Operating revenue on continuing operations rose 4.1%. Almost half of the growth was from crop insurance. The $15.4 billion assets company acquired Producers Ag Insurance Group of Amarillo, Texas, in 2009. CUNA Mutual said that business more than offset challenges other product lines faced due to poor economic conditions. Total operating revenue at the company inched up to $2.5 billion from $2.4 billion in 2009. Credit unions benefited from CUNA Mutual’s 2010 financial performance. The company paid $5 million more to leagues than in 2009--$35 million compared with $30 million. Overall, the company dedicated $39 million to credit union advocacy. “During these difficult economic times, CUNA Mutual has worked hard to keep premiums down, deliver greater value to credit unions and their members and still grow our company’s financial strength,” said CUNA Mutual President/CEO Jeff Post. “Our strong and diversified financial performance in 2010 enabled the company to provide record reimbursements and bonus dollars--nearly $40 million--to the credit union system.”

Montana CUs small loans increase 26 in 4Q

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HELENA, Mont. (2/11/11)—Montana Credit Unions for Community Development (MCUCD) reported an increase of more than 26% in small loans for the fourth quarter of 2010 from credit unions tracked by the organization. MCUCD attributed the growth to a statewide public awareness campaign it ran last year to educate Montana consumers about the availability of small loans at credit unions. The campaign was made possible by a National Credit Union Foundation (NCUF) grant though the REAL Solutions program. The fourth-quarter growth is part of a continuing trend. MCUCD reported that loans during the quarter increased by 26.7% from the third quarter, following a similar gain of 24.4% that quarter. The statewide awareness campaign ran in September and October. It included public-service announcements that were broadcast statewide on television and radio. The ads informed consumers that most credit unions make loans as small as $300. At the same time, credit unions, nonprofit partners and other interested groups distributed campaign materials developed by MCUCD to members and clients statewide.

Year-end net income at Corporate Central is 10.1M

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MUSKEGO, Wis. (2/11/11)--Corporate Central CU has posted its unaudited year-end December 2010 financial statement on its website. Net income, before paid-in-capital (PIC) dividends, for the month totaled $717,856, said the $1.8 billion asset, Muskego, Wis.-based corporate. That amount brings the total PIC for the year to $10.15 million, said the financial report. Income from interest totaled $1.28 million for December, bringing the total for 2010r to $18 million. The corporate's Net Economic Value (NEV), as of Dec. 31, is at $180.5 million or a NEV ratio of 10.06%, well above the regulatory minimum of 2%. Capital at the corporate as of Jan. 31 totaled $179.3 million, which brings its capital ratio to 10.07%, well above the federal regulatory capital ratio. Risk-based capital was 61.10%, according to the financial statement. Capital includes retained earnings totaling $22.48 million; PIC totaling $65.5 million; Tier 1 (Core) Capital at $87.9 million and membership capital at $91.37 million, said the corporate.

Ohio league meets with new superintendent of FIs

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COLUMBUS, Ohio (2/11/11)--Ohio Credit Union League officials met this week with the new superintendent of the Ohio Division of Financial Institutions (ODFI) to discuss the strength of Ohio’s credit unions and benefits of the state credit union charter. Paul Mercer, league president; Becky Hart, league communications director; and John Kozlowski, league general counsel, met with the new ODFI Superintendent Charles Dolezal and Deputy Superintendent of Credit Unions Mike Wettrich. Dolezal has 33 years of banking experience and in his new position oversees state-chartered credit unions (eLumination Newsletter Feb. 9). Also discussed were member business lending and the role credit unions can play in economic development; small-business lending initiatives; regulatory relief legislation for small businesses, financial and insurance services; and public funds, the league said. The ODFI officials were briefed on federal issues such as interchange, credit unions’ efforts to lift the member business lending cap to 27.5% of assets from 12.25%, and supplemental capital. Dolezal raised the topic of financial education and noted the importance of teaching financial basics at a young age. He was interested in the initiatives credit unions have underway with local schools, the league said.

CUs more popular than banks in Saskatchewan

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REGINA, Saskatchewan (2/11/11)--More residents in the Canadian province of Saskatchewan do business with credit unions than with any other type of financial institution, according to a survey released Wednesday. About 53% of Saskatchewan residents surveyed conduct business with a credit union, said a survey released by SaskCentral, a financial co-operative owned by Saskatchewan’s 61 credit unions (Saskatchewan News Network Feb. 9). Other survey results indicated:
* 67% said they deal with more than one financial institution; * 55% have switched financial institutions in the past; * 95% of those who conduct business with Saskatchewan credit unions are satisfied with the service they receive--the same percentage found in a similar survey conducted in 2006; and * 92% of those who deal with Saskatchewan banks were satisfied with service they received--up 1% from the 2006 survey.
Issues related to hours of operations, location, products provided and service charges are the key factors in determining where people go for financial services, the survey indicated.

Corporate One ends 2010 with 12M in net income

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COLUMBUS, Ohio (2/11/11)--Corporate One FCU reported its unaudited financials for December 2010, noting a turnaround to a net income of $12.1 million--exceeding its budget by $9.64 million--and a 0.36% return on assets at the end of the year. That compares with last year's $42.3 million loss generated by other-than-temporary-impairment (OTTI) charges in its securities portfolio and a -1.10% ROA year to date at the end of 2009. The global economic conditions corporates have faced the past three years continue to impact the Columbus, Ohio-based corporate's financial position. However, its "diversified investing, fee income from a strong suite of brokerage and correspondent services and conscientious spending have allowed us to weather these tough times," said Corporate One in its Unaudited Financial Statements posted on the corporate's website. As of Dec. 31, it marked a positive Reserves and Undivided Earnings (RUDE) position at $35.43 million. "Our members' capital shares and paid-in capital remain intact," said the financial statement. The corporate's assets at the end of 2010 totaled $2.88 billion, compared with nearly $3.3 billion at year-end 2009. Regulatory capital ratio was 5.39% at the end of 2010, just above the regulatory minimum required of 5%. Total regulatory capital, at $182.9 million, was a 9% or $15.2 million increase since Dec. 31, 2009, said the corporate. That includes the $35.43 million RUDE, membership capital shares (MCS) of $122.14 million and paid-in-capital (PIC) of $25.33 million. The increase in capital was attributed strong core earnings, gains on sales of securities, MCS from new members and increased capital from existing members. Total capital was reduced in November when the National Credit Union Administration redeemed about $900,000 in PIC and MCS related to a liquidated credit union and by $7.6 million in OTTI charges on securities. Its unrealized loss on securities is $166.4 million compared with the year before, which totaled $255,7 million.

Three pairs of California CUs up for mergers says DFI

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SACRAMENTO, Calif. (2/11/11)--Three California credit unions are slated to pair up with other credit unions in mergers, with two of the mergers approved and one pending approval, according to the California Department of Financial Institutions (DFI). The mergers were reported in DFI’s Monthly Bulletin for January, released on Wednesday. They include:
* Motion Picture FCU, Valley Village, to merge into Musicians’ Interguild CU, Hollywood, approved Jan. 7; * Onized Oakland (Calif.) FCU to merge into Allied Trades CU, Stockton, filed Jan. 10, approval pending; and * Star Energy CU, Bakersfield, to merge into Chevron FCU, Oakland, approved Jan. 7.

Killer in armored car robbery gets life

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DETROIT (2/10/11)--A man who faced the death penalty for the murder of an armored truck guard at a Detroit-area credit union was formally sentenced to life in prison without parole Tuesday in federal court. Timothy O’Reilly was convicted of murder in August for fatally shooting Norman “Anthony” Stephens, 30, during a 2001 robbery while the armored truck was at the Dearborn FCU, now DFCU Financial CU (The Detroit News Feb. 8). A 10-woman, two-man jury took less than an hour to convict O’Reilly, 37, on Aug. 3, but could not reach a unanimous verdict in sentencing him to death, prompting the life sentence. O’Reilly’s trial was a rare death penalty case in the state--Michigan was the first state to abolish capital punishment in 1846, the News said. The penalty can still be imposed in federal trials. The last time someone was executed in the state was 1938, when convicted bank robber Anthony Chebatoris was hanged in Milan. Stephens was shot twice while restocking ATMs at the credit union on Dec. 14, 2001. Six people were involved in the $204,000 heist. Three testified against O’Reilly. Two others faced the death penalty in trials. A sixth suspect is deceased (News Now Aug. 27).

City council goes forward on CUs tax rebate

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NORTH LIBERTY, Iowa (2/10/11)--The University of Iowa Community CU has received approval for a controversial tax-rebate agreement that will allow the credit union to build its headquarters in North Liberty, Iowa. But a group of residents question the tax implications of the project and are threatening further legal action (Iowa City Press Citizen Feb. 9). The North Liberty City Council passed a resolution Tuesday evening authorizing the credit union to build its new headquarters in the city. North Liberty will provide up to $5.4 million in incremental tax rebates on the property. In December, the Concerned Taxpayers for North Liberty received a temporary injunction to prevent the project from moving forward. On Tuesday, city attorney Scott Peterson said he had received a letter from the group’s attorney, who said he will investigate whether the most recent proposal by the city violates that injunction. In the latest proposal, the city will not provide the initial capital to pay for the land as it would have in the original proposal. Originally, the city would have issued $11 million in bonds to fund the land purchase. The University of Iowa Community CU has $1.1 billion assets and is currently headquartered in Iowa City, Iowa.

Louisiana CUs fewer assets doubled in decade

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HARAHAN, La. (2/10/11)--In the past decade, the number of Louisiana credit unions decreased, while assets nearly doubled, based on data reported to the National Credit Union Administration (NCUA) by credit unions for the period of June 30, 2000 through June 30, 2010. For that time period:
* The number of Louisiana credit unions decreased 21.13% to 224 from 284; * Assets nearly doubled, increasing 94.95% to $8.35 billion, from nearly $4.3 billion; and * Current members increased 14.85% to 1,181,795, from 1,029,026.
The Louisiana Credit Union League compared the population of Louisiana as it related to the total number of current members in credit unions. Nearly 26.07% of the population were members in 2010, up from 23.03% in 2000 (eNews Feb. 9). This is based on the number of current members reported by all credit unions in Louisiana and does not take into account the possibility of one individual having membership in multiple credit unions.

Huizenga meets with Mich. CUs on interchange

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LANSING, Mich. (2/10/11)--Freshman U.S. Rep. Bill Huizenga (R-Mich.) thanked Michigan credit union leaders Monday for their input on how the new debit interchange law and proposed regulations would affect small issuers and how the changes could lead to increased costs on consumers. More than a dozen Michigan Credit Union League (MCUL) and local credit union leaders met with Huizenga, who was appointed to serve on the U.S. House Financial Services Committee and the Financial Institutions and Consumer Credit subcommittee that will hold a hearing on Feb. 17 to discuss the Federal Reserve’s interchange proposal (Michigan Monitor Feb. 7). “He expressed concern about the effects of this provision increasing fees on consumers,” said Jordan Kingdon, MCUL’s director of governmental affairs. Huizenga told the group that he was looking forward to learning more about the interchange process. The Durbin Amendment to the Dodd-Frank Act would cap interchange fees for card issuers with more than $10 billion in assets. But there is no provision in the law that allows the Federal Reserve to enforce a two-tier system that would protect small issuers such as credit unions. “Credit union leaders encouraged Congressman Huizenga to urge his colleagues on the panel to slow down the Fed's action on this issue to ensure proper time is taken in committee to study the effects of current language on credit unions,” Kingdon said. The Credit Union National Association (CUNA) has urged the Federal Reserve to stop and study the new interchange law, rather than forging ahead with a two-tier system. CUNA has asked the Fed to take the time needed to consider all interchange related costs, and set a reasonable interchange rate to avoid unintended consequences. These unintended consequences could include the elimination of debit card programs by credit unions or the addition of new fees that would be imposed on credit union members in order to keep the programs, CUNA has said.

CUs for Kids new campaign begins March 1

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SALT LAKE CITY (2/10/11)--Credit unions will have an opportunity beginning March 1 to participate in the Credit Unions for Kids “Change A Child’s Life” campaign, a new fundraising effort for Children’s Miracle Network Hospitals, a charity that raises funds for 170 children’s hospitals. Credit unions nationwide will invite members from March 1 through April 30 to donate their spare change at coin canisters displayed at teller windows. All funds raised will benefit the local Children’s Miracle Network Hospital. Sponsoring this year’s “Change a Child’s Life” campaign is a longtime Credit Unions for Kids supporter, CO-OP Financial Services. CO-OP also underwrites the “Miracle Match” program, which provides $1 million annually in matching funds to credit unions conducting fundraisers to benefit Children’s Miracle Network Hospitals through the Credit Unions for Kids program. This year, Credit Unions for Kids and the credit union community celebrate 15 years as a Children’s Miracle Network Hospitals partner. During that time, credit unions have raised more than $80 million to support children’s hospitals. For more information use the link, or e-mail

Filene testing new green tool

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MADISON, Wis. (2/10/11)--The Filene Research Institute has told News Now it is currently fully subscribed for the first round of testing on its new social media tool to help credit unions celebrate Earth Day (April 22), join the green movement, and show their commitment to social responsibility. The Leap, created by Filene’s i3 team, is an interactive Web-based tool that shows credit union members how they can save some green in their wallets by making good choices and taking advantage of money-saving and eco-friendly options offered by a credit union. Filene is seeking credit unions to test The Leap. Participation is free. Testing credit unions will receive a marketing kit, a customizable Web tool and graphics.[EDITOR's NOTE: Filene contacted News Now Thursday afternoon to say it has been overwhelmed with credit unions volunteering to participate for the first round of testing. It doesn't need more volunteers at this time.] Filene’s i3 is a work group of young professionals who seek to create innovative products, services and resources that benefit the credit union industry.

Maine CUs offer loans to closed oil co. customers

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AUGUSTA, Maine (2/10/11)--Five credit unions with branches in the Midcoast region of Maine joined Maine Gov. Paul LePage and the State Energy Office at the State House in Augusta to announce a new credit union program to assist consumers impacted by the recent closure of a well-known energy company in Brunswick. The program, which the Maine Credit Union League helped facilitate and coordinate, will offer consumers who had prepaid for heating oil zero interest, no-fee loans to purchase fuel.
Maine State Sen. Stan Gerzofsky (D-10), from left, who, coincidentally, is a member of Atlantic Regional FCU, Brunswick, Maine; Maine Gov. Paul LePage, and Roger Sirois, president/CEO of Atlantic Regional FCU, announced a program created by credit unions to help consumers impacted by the Thibeault Energy closure. (Photo provided by the Maine Credit Union League)
At a press conference held Tuesday, LePage congratulated Maine’s credit unions “for taking action to help others. I commend the Maine Credit Union League for helping to coordinate a quick response and to the credit unions for being willing to help.” John Murphy, league president, said: “Maine credit unions have once again shown a willingness to assist consumers and communities. This is an example of the cooperative spirit of credit unions coming together to demonstrate leadership during a crisis that has impacted a number of consumers in the Midcoast region.” All five credit unions with branches in the Midcoast region are participating: Atlantic Regional FCU, Brunswick; Down East CU, Baileyville; Five County CU, Bath; Lisbon (Maine) Community FCU,; and Midcoast FCU, Bath. Speaking on behalf of the credit unions, Roger Sirois, president/CEO of Atlantic Regional FCU, said: “The recent and sudden closure of Thibeault Energy has impacted a number of area residents. This action has caused financial hardship for many residents and, with a good three months of the heating season remaining, left them wondering how they are going to come up with the funds to heat their homes. Indeed, this is one of those times when credit unions can make a difference in our communities. “In the spirit of cooperation, the five Midcoast area credit unions are providing zero interest, no fee loans of up to $2,000 to customers directly impacted by the closure of Thibeault Energy,” he added. “We are offering these special loans not only because there is an immediate need, but because it is the right thing to do.” Other features and requirements of the program are:
* A 12-month term; * No credit check; * Proof of loss must be provided; and * Disbursement will be made via check directly to the oil company.
Loans are available at the five credit unions on a first come-first serve basis through April 1.

Now not the time to let up on ID fraud says study

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SAN FRANCISCO (2/10/11)--Before the nation's financial crisis hit, Congress had as a top priority about a dozen data security bills prompted by high profile data breaches. Today, identity theft fraud is down in numbers, losses are lower, and out-of-pocket costs to consumers more than doubled. However, "now is not the time to let up," say analysts of new ID theft research. The research by Javelin Strategy & Research, reported in Wednesday's News Now, noted that ID theft had dropped 28% during 2010, with fewer victims, and the year saw the smallest amount--$37 billion--in losses in eight years. It also pointed out that consumers were paying more out of pocket expenses. The study was sponsored by Fiserv, Intersections Inc. and Wells Fargo & Co. Intersections is a CUNA Strategic Services provider. "The financial services industry, businesses and law enforcement have been working harder than ever to crack down on fraud and to educate consumers about how they can protect themselves," said Steve Cox, president/CEO of the Council of Better Business Bureaus. "This year's study clearly indicates these efforts are having a positive impact, he said. "In order to retain consumer trust and confidence, businesses must continue to take all steps necessary to safeguard data and educate customers about how to protect themselves and respond to incidents," Cox added. "Now is not the time to let up." Before the nation's financial crisis state and federal government tried to legislate data security. In addition to data security bills in several states, about a dozen rival data security bills wound their way through the House and Senate and the six committees with jurisdiction over the issues involved. Although federal lawmakers repeatedly marked the issue as a legislative priority, no consensus was reached and the matter was left pending when the 109th session adjourned. The Credit Union National Association (CUNA) supports legislation that would impose similar but separate data security requirements and enforcement on commercial companies as is currently required of credit unions and other financial institutions under the Gramm-Leach-Bliley Act of 1999. That law requires merchants and other businesses to provide notice of a security breach as early as possible to financial institutions and consumers. It also prohibits the retention by merchants and certain non-financial companies of sensitive, identifying information from plastic card magnetic strips that could be obtained in connection with financial transactions. CUNA also supports requiring that the identity of the merchant or other company responsible for maintaining a database that experiences a data breach be disclosed to credit unions and other financial institutions so they can pass this information on to consumers. New information from the Javelin study indicates that account takeover is one of the most common forms of identity fraud. The two most popular tactics fraudsters use are: adding their name as a registered user on an account, or changing the physical address of the account. In 2010, changing the physical address became the most popular method, with 44% of account takeover incidents conducted this way. Although the study doesn't mention specifically fraud caused by data breaches, information stolen during breaches can be used to set up new fraudulent accounts. New account fraud is the most damaging to consumers, said the study, which found that fraudsters are changing their patterns to make it harder to detect. During 2010, fraud shifted from banking and card accounts to opening of non-bank and non-card accounts--such as health club memberships, and home phone and cable subscriptions--that don't show up on a credit report. The study advised consumers to carefully examine financial statements and consider using a service that monitors public records. New account fraud was also the type of fraud most likely to be perpetrated by "friendly fraudsters" or those known to the victim such as a relative or roommate. This type of fraud accounted for about 30% of new account fraud for which the cause was known, said Javelin. While existing card information would seem to be easy to get from acquaintances, existing card fraud was less than half as common as new account fraud. Cox noted that consumers should "remain vigilant and be careful not to expose personally identifiable information over social networks and to acquaintances."

CU System briefs (02/09/2011)

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* ALBANY, N.Y. (2/10/11)--Credit Union Association of New York
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(CUANY) staff and credit union representatives visited the Utica office of new U.S. Rep. Richard Hanna (R-N.Y.) this week. The group discussed the role of credit unions in the financial services industry and the benefits they provide members and their communities. Also discussed: key federal issues such as member business lending, capital reform and interchange, and how each issue impacts their credit unions and members. Hanna has been appointed to the Transportation and Infrastructure Committee, and the Education and the Workforce Committee. From left are: Patrick Gallagher, CEO/manager, Utica District Telephone Employees FCU; Hanna; Larry Hitchcock, Rome Teachers FCU; John Prumo, CEO/president, GPO FCU; Mark Pfisterer, president/CEO, AmeriCU CU; Michael Parsons, president/CEO, First Source FCU; and John Deecher, president/CEO, Utica Gas & Electric FCU. (Photo provided by the Credit Union Association of New York) … * ORLANDO, Fla. (2/10/11)--A suspect in an attempted holdup of Orlando-based Fairwinds CU Monday gave the Orange County Sheriff's deputies quite a surprise. Suspect Matthew Meguiar, 26, who was arrested as he left the credit union, struggled briefly with Deputy Christopher Thomas, and Meguiar's arm popped off. Deputies managed to handcuff him anyway and placed the prosthetic arm on the roof of a patrol car while they interviewed witnesses. Mequiar allegedly walked into the credit union's lobby at about 1:45 p.m. and handed a teller a note demanding money. After filling the bag with cash, the teller tried to push it through a slot in the teller's cage. It was too big and the robber left without the cash. A teller and other witnesses recognized Meguiar, said the sheriff's office (Orlando Sentinel Feb. 9) … * LENEXA, Kan. (2/10/11)--Kansas City-based CommunityAmerica CU paid a $1 million dividend to its members Tuesday. The 2011 Owner Participation Dividend brings the total payout to members for the past decade to more than $14 million and doubles the amount paid in 2009, despite the struggling economy, said the credit union. In addition to the program, the credit union gives back to its members "year-round in the form of lower rates, low to sometimes no fees, and a long-term partnership to help them set and achieve their personal financial goals," said Dennis Pierce, CEO of the $1.7 billion asset credit union … * SAN ANTONIO (2/10/11)--San Antonio FCU (SACU) announced that Stephen S. Hennigan has assumed the title of president, effective Feb. 1, and also will continue as chief operating officer. Jeffrey H. Farver, former president, will continue to serve as CEO until his retirement Jan. 2, 2012. Hennigan began his career with SCU in 1993 as the director of treasury management. He was involved in creating Credit Union Factory Built Lending (CUBLF), a credit union service organization that is now a division of SACU and provides financing for members choosing manufactured housing. SACU is a $2.9 billion asset credit union serving more than 253,000 members with 18 locations in San Antonio, one in Houston, and in communities through the nation through its manufactured housing division … * ITHACA, N.Y. (2/10/11)--Lisa Whitaker has been named president/CEO of CFCU Community CU, a $730 million asset credit union based in Ithaca. She succeeds Robert O. Witty, who retired in December after 40 years with the credit union. Whitaker is former president/CEO of COMSTAR FCU, Frederick, Md. The board cited her strengths as collaborative leadership, communication, strategic planning, staff and product development, and strong credit union background. CFCU Community CU was established in 1953 and has more than nine locations and serves more than 57,000 members (Ithaca Journal Feb. 7) … * TICONDEROGA, N.Y. (2/10/11)--Ticonderoga (N.Y.) FCU President/CEO Gregory D. Johnson announced his retirement, which will be effective April 5. He has served in financial service management for more than 40 years, the past nine as the credit union's president/CEO. He also is an elected director and serves as treasurer of the credit union. TFCU's board also announced it has selected Shawn M. Hayes to succeed Johnson as president/CEO. Hayes has 15 years' experience, the past 11 at TFCU serving as chief financial officer, human resource director and member of its management team. He is a Certified Credit Union Executive through the Credit Union National Association and is a Certified Credit Union Compliance Expert …

Identity fraud dropped 28 during 2010

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SAN FRANCISCO, Calif. (2/9/11)--Credit unions that have applied more stringent criteria to authenticate users and determine credit risk will be happy to learn their efforts work. The number of identity fraud victims in 2010 dropped by 28% to 8.1 million U.S. adults--the largest single-year decrease since 2003. And the total amount decreased to $37 billion--the smallest amount in eight years. However, consumers out-of-pocket expenses rose significantly--63%, said a new study. The survey, independently produced by San Francisco-based Javelin Strategy & Research and whose results were released Tuesday, is the nation's longest-running study of identity fraud. It was sponsored by Fiserv, Intersections Inc., and Wells Fargo & Co. (Business Wire Feb. 8), and is based on 5,004 telephone interviews. Intersections Inc. is a CUNA Strategic Services provider. The 8.1 million fraud victims were three million fewer than in 2009, and the total amount decreased from 2009's $56 billion to $37 billion. Javelin said consumers' costs rose significantly due to the types of fraud that were successfully perpetrated and an increase in "friendly fraud." The study defined identity fraud as unauthorized use of another person's personal information to achieve illicit financial gain. "Identity fraud underwent a marked decline and shift over the past year. This great news is a testament to the significant efforts businesses, the financial services industry and government agencies are making to educate consumers, protect data, and prevent and resolve identity fraud," said James Van Dyke, Javelin's president and founder. "Economic conditions also appear to have contributed to this year-over-year decline, as well as increased security measures and some significant law enforcement successes." He noted the increase in out-of-pocket costs "carries a warning: Consumers cannot put their finances on autopilot or ignore important safeguards. Simple safeguards may dramatically reduce fraud risk, such as frequently monitoring banking, credit and other financial activities, securing computers and paper records, and activating electronic alerts to help prevent fraud and address the situation quickly when it occurs." Among other findings:
* The mean fraud amount per victim declined to $4,607 from $4,991 in 2009. A likely factor, said Javelin, was the significant drop in reported data breaches. Industry reports indicated 404 breaches in 2010 with 26 million records exposed. That compares with 604 the year before with 221 million records exposed. * The mean consumer out-of-pocket cost due to identity fraud increased in 2010 to $631 per incident from $387 in 2009. The report attributed the rise to changes in the types of fraud perpetrated. These include new account and debit card fraud, and they highlight the need for continued consumer vigilance, said Javelin. The costs include those incurred by the victim toward payoff of any fraudulent debt as well as legal and other fees to resolve the fraudulent claims. * The most damage was caused by new account fraud. Although all types of fraud declined the past year, new account fraud--in which accounts are opened without the victim's knowledge--was responsible for the largest amount--$17 billion. Javelin reasoned this type of fraud is harder to detect and is the most likely to severely impact victims. Existing card fraud amounts declined by 38% to $14 billion from $23 billion in 2009. * Friendly fraud, or fraud perpetrated by people known to the victim such as a relative or roommate, grew 7% last year. Consumers between 25 and 34 years old were most likely to be victims in this type of fraud and most likely (41%) to report theft of their Social Security number. * Fraud inversely mirrors retail sales. The amount of fraud almost perfectly inversely mirrored retail sales over the past seven years. When retail sales increase, fraud has decreased. That, said Javelin, points to economic hardships as an overall contributor to fraudsters committing an identity crime.
Watch News Now later this week for more details about the findings.

Three separate mergers of credit unions completed

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MADISON, Wis. (2/9/11)--Three mergers of credit unions have been completed, announced the credit unions involved this week. Alliant CU, Chicago, has completed its merger with Tempe, Ariz-based Continental FCU. The merger adds more than 23,000 employees, family members and retirees of Continental Airlines and U.S. Airways as new members of Alliant. Alliant CU is the sixth largest credit union in the U.S. with more than $7 billion in assets and nearly 280,000 members nationwide. Formerly known as United Airlines Employee CU, Alliant has 75 years’ experience serving the financial needs of people in the airline industry. The merger extends Alliant’s reach into three large metropolitan areas: Tempe, Houston, and Newark, N.J. Alliant also serves Chicago, Denver, Los Angeles, Oakland, San Francisco, San Mateo, Calif., and Washington D.C.--Dulles. In Wisconsin, Milwaukee-based A-B CU merged with Madison-based Heritage CU, effective Jan. 31 ( Feb. 8). A-B was established in 1932 as the Allen Bradley Employees CU to serve Allen Bradley Co. employees. It had $56 million in assets but had suffered losses the past two years. Heritage now has $210 million in assets and serves 26,000 members. It has two locations in Madison, plus branches in Milwaukee, Sauk City, Prairie du Sac, Chetek and Ladysmith. It also has branches in Rockford, Ill., and Galesburg, Ill. In Illinois, ABBCO Community CU, East Alton, has merged with Scott CU, Collinsville, as of Monday. Scott gains ABBCO's $2 million in assets and 600 members. ABBCO served employees of Smurfit-Stone and Simmons-Cooper Law Firm, plus residents living or working in Madison County and their families (St. Louis Business Journal Feb. 7). Scott CU, headed by President/CEO Frank Padak, is open to anyone who lives or works in a 17-county area, plus anyone active in or retired from the military. It has nearly $700 million in assets and more than 81,000 members. Scott CU has 15 area locations.

CU System briefs (02/08/2011)

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* HARRISBURG, Pa. (2/9/11)--A large basket filled with Pennsylvania goodies, including Hershey's chocolate, is headed to the Wisconsin Credit Union Foundation as payoff for a Super Bowl wager between the Pennsylvania and Wisconsin foundations, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Feb. 8). The basket also includes a few fun items such as a Terrible Towel. The Wisconsin foundation plans to conduct an auction for the basket, with proceeds benefitting its financial literacy program. "While we are disappointed that our Steelers didn't bring the Super Bowl championship home to Pittsburgh, we are pleased that the wager we lost will help provide financial education to Wisconsin consumers through the Wisconsin Credit Union Foundation," said Jim McCormack, PCUA president/CEO. (Photo provided by the Pennsylvania Credit Union Association) … * WAUSAU, Wis. (2/9/11)--During the past month, employees such as
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these at Wausau, Wis.-based Connexus CU raised more than $700 for the American Cancer Society Relay for Life and donated more than 200 items to the Salvation Army. The money was raised through donations by employees who wanted to show their Packer pride in the form of casual days before and after playoff games and Sunday's Super Bowl XLV. The credit union also held a celebratory potluck for employees who donated cans of soup or other items on the Friday before the big game. 2011 marks Connexus' 17th year supporting the Relay. It has been the presenting sponsor for several years. Beyond the sponsorship dollars, Connexus employees raised $15,500 for the Relay last year. This year's goal is $17,000. (Photo provided by Connexus CU) … * SKOWHEGAN, Maine (2/9/11)--Joshua Lieberman, 21, who was convicted as the getaway driver in a 2008 robbery of Skowhegan-based Franklin-Somerset FCU broke his probation last week by entering a branch of the credit union and trying to get a loan--so he could pay the restitution mandated by the court for the robbery. His probation stipulated he was not to return to the credit union. Breaking probation could cost him seven years in prison under the "three strikes" rule. Lieberman said it was an honest mistake--he didn't know the branch was a Franklin-Somerset. His hearing on the matter is today (Kennebec Journal Feb. 8) … * MOUNT VERNON, Wash. (2/9/11)--North Coast CU could tell the man was not the typical depositor: he was pushing a wheelbarrow loaded down with pennies--56,600 pennies. The $566 deposit by Rand O'Donnell weighed 300 pounds. O' Donnell said he is trying to raise $1 million--in pennies--to help needy families in Mount Vernon, Wash. He already has raised more than $4,000 for the "Mountain of Hope" fund. O'Donnell hopes the fund will generate enough interest income to provide a steady revenue source for the Skagit County Community Action Agency, which helps families with emergency food, fuel and clothing (Press-Telegram Feb. 8) …

Ex-NCUA Chairman Johnson takes on Iowa CU oversight

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DES MOINES, Iowa (2/9/11)--Iowa's state credit union regulator, the
Click to view larger image In this 2005 photo, former Office of Thrift Supervision Acting Director Richard Riccobono; former NCUA Chairman JoAnn Johnson; and former Texas Department of Banking Commissioner Randall James prepare to testify during a House subcommittee on financial institutions and consumer credit hearing on financial services regulatory relief. (CUNA archive photo)
Iowa Division of Credit Unions (IDCU), will soon be led by former National Credit Union Administration Chairman Joann Johnson. Johnson served the NCUA for a total of six years starting in 2002, and led the agency for her final four years. Johnson previously served in the Iowa State Senate, chairing both the Iowa State Senate's Ways and Means and Commerce Committees during her time there. Upon becoming the new Iowa credit union regulator Johnson said in a statement she will "work tirelessly to ensure that the interests of the more than 785,000 members of Iowa credit unions are protected through thorough analysis and evaluation." Iowa Credit Union League CEO/President Patrick Jury in a release said that he is confident that the former NCUA head will be successful in her new position, adding that the league looks forward to working with her. James Forney announced his retirement as head of IDCU Monday. The National Association of State Credit Union Supervisors thanked Forney for his service, both to that organization and for his regulatory career. The group added that NASCUS is eager to work with Johnson "as she joins the state regulatory community."

Charlotte Metro CU creates buzz with Super Bowl ad

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CHARLOTTE, N.C. (2/9/11)--Charlotte (N.C.) Metro CU ran a 30-second local ad during Sunday’s Super Bowl in an attempt to recruit new members. The ad shows an alien-like creature flying past Charlotte landmarks and then walking inside a branch of the $226.3 million asset Charlotte Metro (Charlotte Business Journal Feb. 8). Created by Limerick Studios in Charlotte, the ad ran between the first and second quarters of the game. A teller narrates the spot in a manner akin to being interviewed for a science-fiction documentary. She is asked what she did when the alien walked into the credit union and asked to open an account. “We approved him,” she says, breaking into a grin. “Anyone can be a member.” “We’ve worked with Limerick Studios before and the work they did created a real buzz for us," Bob Bruns, president of Charlotte Metro, told the Journal. “I came to them with the seed of an idea I had for a new TV spot--and they made it bloom into something spectacular and meaningful to our audience.” To see the video, use the link.

Small-biz loans still lagging

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MADISON, Wis. (2/9/11)--Small-business loans in the U.S. still are lagging for several reasons behind recent increases in other types of loans to companies and consumers, according to a Tuesday article in The Wall Street Journal. Credit unions continue to step up to fill the gap. The Federal Reserve reported last week that 10% of large U.S. banks said they eased loan terms for small businesses in the past three months, according to the Journal. In third quarter 2010, U.S. banks and saving institutions had $631 billion in outstanding “small” loans to businesses--a 5% reduction from $667 billion as of March 31, said the Federal Deposit Insurance Corp. In the third quarter, the number of small-business loans and lines of credit were more than 70% less from their pre-crisis peaks, according to data from about 380 banks, credit-card companies and other lenders, Small Business Financial Exchange and Equifax Inc. told the Journal. Healthy, profitable U.S. banks say they are geared up to increase small-business lending, the Journal said. This is something credit unions have done throughout the recession, when they haven’t hit the MBL lending cap, the Credit Union National Association (CUNA) said. CUNA and credit unions are trying to get Congress to increase credit unions’ member business loan (MBL) cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $10 billion in loans into the economy and create as many as 100,000 new jobs, with no cost to taxpayers, CUNA says. Small-business optimism increased to 94.1 in January from 92.6 in December, according to the National Federation of Independent Business (NFIB) Small Business Survey (Moody’s Feb. 8). January’s gain is the fifth increase in the past six months. The improved optimism on the part of small businesses is based on expectations for real sales during the next six months, NFIB said.

NBA star applauds Maine CUs raising 402K for hunger

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PORTLAND, Maine (2/9/11)--Maine’s credit unions celebrated their efforts towards “thawing” out hunger at the Thaw to End Hunger Celebration Event, Feb.7 in Portland. This year’s funds raised total $402,740, an increase of nearly $27,000 over last year’s record. The funds will allow food pantries across Maine to purchase nearly $5 million dollars of food through the Good Shepherd Food Bank.
Click to view larger image John Murphy (from left), president of the Maine Credit Union League; Luke Labbe, chair of the Maine Credit Union League’s Social Responsibility Committee, and National Basketball Association Hall-of-Famer Rick Barry prepare to hold the check with the record-setting amount raised by Maine’s credit unions in 2010 through the Maine Credit Unions’ Campaign for Ending Hunger. (Photo provided by the Maine Credit Union League)
The celebration luncheon featured an address by National Basketball Association Hall of Famer Rick Barry. Barry cited the accomplishment of Maine’s credit unions as “evidence of what can be done when you work as a team,” and applauded their efforts. “I applaud credit unions for taking on this cause and giving back to their communities and for the credit unions and their members for answering the call to action,” he said. “This is an extraordinary achievement, especially in these economic times." In addition to his keynote address on community service and the importance of ending hunger, Barry unveiled the check announcing the new record for Maine’s Credit Unions Campaign for Ending Hunger. Representatives from each credit union in attendance also had their picture taken with Barry, as he presented them with certificates and envelopes containing the total funds each credit union will distribute in their own community. The campaign “not only had a record setting year but it formed new relationships with food pantries across the state,” said John Murphy, president of the Maine Credit Union League. “These enhanced efforts are extremely important, as food pantries continue to see a significant increase in requests during these difficult times. The generosity of the over 600,000 credit union members in Maine is extraordinary. This marks the 15th consecutive year that the campaign has raised a record-setting total--a remarkable effort in such a challenging economy.” Since 1990, the campaign has raised $3.9 million to help end hunger in Maine.

New paper focuses on strategic tech planning

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MADISON, Wis. (2/9/11)--A new white paper from the CUNA Technology Council shares industry-expert insights on developing and following strategic technology plans, and includes four credit-union case studies. Among the topics addressed in “Strategic Technology Planning: Align Planning with Your Credit Union’s Goals”:
* Developing a technology strategy; * Operational considerations; * Selecting technology; * Technology trends; and * Common technology planning mistakes.
CUNA Council members are entitled to complimentary copies of this and more than 200 white papers; non-members may purchase the papers for $50 per copy.

MnCUN provides commissioner insight on CU issues

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ST. PAUL, Minn. (3/9/11)--Minnesota Credit Union Network (MnCUN) staff held an introductory meeting Monday with newly appointed Minnesota Department of Commerce Commissioner Mike Rothman to continue efforts to deepen government officials' knowledge of the credit union movement. Representing MnCUN were Mark Cummins, president/CEO; Mara Humphrey, vice president-governmental affairs; and John Wendland, general counsel. They provided Rothman with an overview of the current challenges and opportunities facing Minnesota's credit unions. The visit focused on continuing MnCUN's open line of communication with the regulatory agency, which experienced personnel shifts due to the election of a new governor. They discussed the importance of having a strong state credit union charter and the benefits this charter option offers to Minnesota credit unions. The group also outlined issues credit unions are monitoring at the federal level, including member business lending, supplemental capital and the Federal Reserve's proposed change to debit card interchange fees. Rothman expressed a desire to work with the movement on issues affecting the financial services industry and the state. He outlined his vision for the Department of Commerce, stating he will focus on protecting Minnesota consumers, providing business opportunities to grow, and effectively executing regulatory oversight. "Our meeting with Commissioner Rothman provided us the opportunity to discuss the various ways we can work with the Department of Commerce to advance the issues important to the agency and the credit union movement," said Cummins. "Fostering this open line of communication further develops the solid working relationship we have built with our state regulator." Rothman officially introduced himself to the movement during his keynote address at MnCUN's Credit Union Day at the Capitol last Thursday. There, he acknowledged that credit unions are critical to Minnesota's economy.

Advantis CEO on Fed-San Francisco advisory group

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SAN FRANCISCO (2/9/11)--Ronald A. Barrick, president/CEO of Advantis CU, Milwaukie, Ore., is among the nine members appointed to the newly formed Twelfth District Community Depository Institutions Advisory Council (CDIAC), announced the Federal Reserve Bank of San Francisco. The board of governors of the Federal Reserve System has created a national CDIAC to broaden the scope of input on economic credit conditions. To complement the national effort with regional perspectives, each Federal Reserve Bank is establishing a District Council comprising representatives from community banks, thrifts and credit unions. “I am looking forward to representing Advantis Credit Union and my credit union colleagues when sharing with the Federal Reserve what our members are actually experiencing on the ground and steps that might be taken to aid economic growth in the Pacific Northwest," said Barrick. "To have strong Oregon representation on this important advisory council will strengthen the Northwest’s influence and increase the focus the San Francisco Fed has on our district,” said Northwest Credit Union Association President Troy Stang. The Twelfth District council, drawn from communities across a nine-state region, will meet twice a year to provide input to the San Francisco Federal Reserve Bank’s senior management on topics such as economic and banking conditions, regulatory policies and payments issues. Members of the San Francisco Fed’s CDIAC will serve three-year terms.

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.

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 “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.

Storms wake Midwest CUs reopen Northeast digs out

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MADISON, Wis. (2/4/11)--Most credit unions and leagues in the West and Midwest were back to work Thursday after weathering this week's deep snow, ice storms and teeth chattering temperatures. Credit unions and leagues in the Northeast were at work Wednesday and Thursday, despite icy conditions and up to a foot of snow in Massachusetts and New Hampshire. Wednesday "was messy but things are back to normal today," said Rob Kimmett, senior vice president of marketing and public relations at the Massachusetts, New Hampshire and Rhode Island Credit Union Leagues. "This time the snow turned to sleet and freezing rain halfway through, so we didn't get the monster accumulations," he said Thursday, adding the Boston area received "only about 10 inches or so." "New Hampshire got the volume, because the storm was all snow there, but it ended Wednesday and was cleaned up for the morning commute," Kimmett told News Now Thursday. "Right now the area is dealing with too much snow on the side of the roads and on roof tops from our non-stop parade of snow storms. Fortunately, there are no reports of credit unions suffering any damage to their roofs from too much snow," Kimmett said. More than a foot of snow was recorded in parts of Oklahoma, Kansas, Missouri, Iowa, Wisconsin, Illinois, Indiana, Michigan, Ohio, Massachusetts and New Hampshire, with several other states close behind, reported the National Weather Service (The New York Times Feb. 3). It had to upgrade its website to handle the traffic of 20 million hits per hour. Hundreds of thousands of homes and businesses were left without power, especially in Ohio and Pennsylvania. In the Midwest, credit unions and leagues closed early on Tuesday and some stayed closed Wednesday. The storm closed the Credit Union National Association's Madison, Wis., offices early Tuesday and on Wednesday. The offices were open on Thursday. In Pennsylvania, snow varied across the state, said Janet Johnson, communications specialist at the Pennsylvania Credit Union Association (PCUA). There were no reports from credit unions of storm-related incidents. Some credit unions in the eastern part of the state had delayed openings Wednesday. PCUA is located in Harrisburg, which had a "good coating of ice overnight." However, temperatures rose early Wednesday morning and the roads were cleared. "The biggest problem in some areas was power outages, but I didn't hear of any credit unions being directly affected," said Johnson. Most schools were closed Wednesday. In Albany, N.Y., the Credit Union Association of New York was open Wednesday and Thursday, said Bonnie Sklar, public relations coordinator. "Our storm was not as bad as originally predicted. We had about six-eight inches of snow on Tuesday and around the same Wednesday." The snow turned to sleet, which reduced the snow predictions there. Some credit unions in the state may have closed based on the higher snow predictions but none reported closing or having problems, she said. The Maine Credit Union League reported the league and its credit unions were open Thursday. Jon Paradise, governmental and public affairs manager, said the state got between 10 and 14 inches of snow, depending on location. The Credit Union League of Connecticut was open Thursday and had not heard of any credit unions in the state closing. Snow varied from four inches to about eight inches. "Connecticut experienced icy rain and sleet, which made driving extremely hazardous," Ed Zagorski, director of communications, said. There were numerous incidents throughout the state of roofs caving in due to the weight of the ice on top of already large amounts of snow. Luckily no credit unions have been affected." "As far as we know, it's over," he said. "But, another storm will hit Connecticut on Saturday."

Paperless mortgage closings offered at Mountain America

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SALT LAKE CITY (2/4/11)--Members of West Jordan, Utah-based Mountain America can now close their mortgages electronically, the $2.77 billion asset credit union announced. "Members can accomplish their mortgage closings in an eco-friendly way," said Jeanie Olsen, Mountain America's vice president of mortgage services. "With all of the documents viewable online, paper can essentially be eliminated from the process. No longer do home buyers have a stack of closing documents an inch or more thick--they can sign electronically and receive all of their documents on an easily transportable flash drive," she added. The credit union also provides access to the documents online after closing, if needed, she said. Members buying homes can access and preapprove most of the documents online before the closing through a paperless mortgage closing service called Quick Close. The service is the primary communication and document delivery vehicle, where title agents, real estate professionals and lenders meet to compile the entire closing package from a secure website. It is powered by SureClose, a paperless transaction management system developed by PropertyInfo Corp., a Stewart company. Title offices that set up Quick Close and eClosingRoom, a program also provided by PropertyInfo, can close mortgages using designated computers and electronic signature capture pads. Mountain America members simply sign any remaining closing documents on the personal computer and sign a digital signature pad once. That signature is then affixed to all of the closing documents, said the credit union's press release.

Catalyst Corporate FCU to be merged corporates new name

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DULUTH, Ga. (2/4/11)--Catalyst Corporate FCU will be the new name of the combined Georgia Corporate FCU and Southwest Bridge Corporate FCU, pending Georgia's successful purchase and acquisition of Southwest. Georgia Corporate said it anticipated that a purchase and assumption proposal will be submitted to the National Credit Union Administration (NCUA) Board in mid-2011. "Choosing a name that represents the forging of a new corporate entity is an important step forward," said Greg Moore, Georgia Corporate CEO, which is based in Duluth, Ga. Both existing names--Georgia Corporate and Southwest Bridge Corporate--will be abandoned. The new name was developed by a committee representing both corporates and was approved by Georgia Corporate's board of directors. "Catalyst is a mission-driven word that implies 'building,' 'creating' and 'moving forward,'" said Dianne Addington, CEO of the Plano, Texas-based Southwest Bridge Corporate. Addington and Moore noted the name implies "an entity working to make credit unions more successful" while strongly suggesting it "is the result of credit unions coming together to create a new cooperative corporate solution." The new name won't become official until the consolidation is completed later this year. However, executives at both corporates said the name will be used unofficially in the coming months to help reinforce the direction credit unions are headed. The new entity's business plan calls for lower capital requirements than previously required by either corporate. Because of new NCUA regulations, the proposed entity will maintain a smaller balance sheet to minimize risk. However, Catalyst Corporate, if approved by NCUA and capitalized by members, will continue to offer its current product and service line-up and will leverage increased economies of scale to create additional efficient, low-cost services in the future.

Pa. Wis. foundations CUs bet on Super Bowl teams

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PEWAUKEE, Wis., and HARRISBURG, Pa. (2/4/11)--Credit unions and their state foundations in Pennsylvania and Wisconsin are making friendly wagers on the outcome of Sunday's Super Bowl XLV between the Green Bay Packers and the Pittsburgh Steelers--and finding similarities between the teams and credit unions. The Wisconsin Credit Union Foundation and the Pennsylvania Credit Union Foundation say the other foundation will provide a basket of state goodies to them when their team comes out on top. "We've seen the Steelers in action," said Wisconsin foundation Chair Carol Adler of Marshfield Medical Center CU in Marshfield. "So when the folks in Pennsylvania suggested we put a little skin in the game, we said, 'done deal.' You have to have a little fun with these things. And by that I mean have fun cashing in when we win." "Last time I looked, steel was stronger than cheese," said Pennsylvania foundation Chair Diana Roberts. "Likewise, the Steelers will surely prove to be the stronger team on Super Bowl Sunday." Regardless of the outcome, no one will be a loser. Both state foundations pledged to use their basket of state-themed goodies in an auction to raise funds for foundation programs. For example, Wisconsin's foundation provides free resources to all public high schools to help teens achieve state teaching standards for sound money management. The Pennsylvania foundation supports financial education and has projects to aid small credit unions and disaster relief. Both foundations saw similarities between their teams and credit unions. "The history of Pennsylvania credit unions and the Steelers mirror one another," said Pennsylvania Credit Union Association (PCUA) Board Chair and season ticket holder Ray Brunner. "Both were officially formed in 1933 with roots in representing hard-working Americans," Brunner said. "Each has also demonstrated that success comes through team work. Following tough early days during World Wars, merger of the AFL-NFL and business pressures, the Steelers are an elite NFL franchise. Likewise credit unions throughout the decades have had to face down fierce competitors and overcome outside pressures. "The Packers, like all credit unions, are unique in that they are community-owned not-for profits," said Wisconsin's Adler. "The Pack is the only team in the NFL jointly owned by the fans. Similarly, credit unions are financial institutions whose depositors are the owners." At the individual credit union level, three credit unions--one in Pennsylvania and two in Wisconsin--also have made a friendly wager that will benefit a local hospital. The PA Healthcare CU, Sewickley, Pa., has teamed up with Green Bay, Wis.-based Horizon Community CU and Wisconsin Medical CU in the wager, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway 2/1/11). A Steelers victory will aid the Heritage Valley Sewickley and Heritage Valley Beaver community-based health care initiatives. A Packers victory will benefit the Children's Hospital of Wisconsin. "We have had a few wagers like this over the years, and it is a great way to showcase how credit unions make a difference in our communities," Paul Fero, CEO of PA Healthcare CU, told PCUA.

WOCCU DSA nominations due March 25

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MADISON, Wis. (2/4/11)--The nomination deadline for World Council of Credit Unions’ (WOCCU) Distinguished Service Award (DSA), the highest honor bestowed by the international credit union system, is March 25.
Click to view larger image Polish parliament member Jarosław Stawiarski (left) accepted the 2010 Distinguished Service Award on behalf of the late President Lech Kaczyński and his family from World Council of Credit Unions Chair Barry Jolette at The 1 Credit Union Conference in Las Vegas. (Photo provided by the World Council of Credit Unions)
Each year, the DSA honors the outstanding contributions of its recipients to the global credit union movement. WOCCU’s vision is “Improving people’s lives through credit unions,” and the DSA recognizes the most distinguished achievements in support of that pursuit. The award is presented to individuals and organizations that have offered exemplary service to credit union movements outside their home country. “The list of past DSA recipients reads like a who’s who in international credit union development and support,” said WOCCU Director Ron Hance, president/CEO of Heritage Family CU, Rutland, Vt., and chair of the WOCCU Awards Committee. “Recognizing such outstanding talent and dedication is the goal of DSA, and we often have a very rich pool of talent and achievements from which to choose.” In 2010, DSA recognized the late Lech Kaczyñski, the former president of Poland, who was central in helping establish that country’s credit union movement. Other 2010 recipients included Credit Union National Association (CUNA) Chair Harriet May, president/CEO of GECU, El Paso, Texas; and Credit Union Executives Society (CUES), the Madison, Wis.-based professional development organization for credit union executives and volunteers. The 2010 awards were presented during The 1 Credit Union Conference, last year's event held jointly with CUNA in Las Vegas. WOCCU does not give the DSA honor every year. Award presentations this year will be made at WOCCU’s World Credit Union Conference, which is expected to attract attendees from more than 50 countries to Glasgow, Scotland, July 24-27. In the case of individuals, recipients may be WOCCU or member organization officers, directors or representatives; international credit union pioneers; field technicians with a long and outstanding service record; or persons whose actions have benefitted global credit union development. Institutional recipients may be organizations or agencies that have provided financial and technical assistance to develop international credit union movements and their service infrastructures over an extended time. WOCCU will present no more than three individual awards and one institutional award in a single year.

Three incumbents re-elected to PCUA board

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HARRISBURG, Pa. (2/4/11)--All three incumbents have been re-elected to the Pennsylvania Credit Union Association (PCUA) board of directors without opposition, PCUA Board Chairman Ray Brunner announced. These include Paula Nihoff (District 5), Mike Kaczenski (District 6) and Louise Lingenfelser (District 9). Nihoff is CEO of HealthCare First CU, Johnstown; Kaczenski is CEO of Sun East FCU, Aston, and currently serves as vice chairman of the board; and Lingenfelser is CEO of UGI Employees FCU, Wyomissing (Life is a Highway Feb. 2). Their terms will begin at the conclusion of the association’s 2011 Annual Convention & Expo in May.

Mass. league welcomes Cotney as new bank commissioner

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MARLBOROUGH, Mass. (2/4/11)--David J. Cotney has been appointed the new Commissioner of Banks in Massachusetts by Gov. Deval Patrick. Cotney, 43, began his 20-year career at the state’s division of banks as an examiner and most recently served as chief operating officer of the agency. He will oversee a staff of about 160 employees and a budget of $15.8 million, said the Massachusetts Credit Union League (e-WeeklyFeb. 3). Cotney has served as acting commissioner since the departure of Steven Antonakes in November. Cotney played a national role in the creation of the Nationwide Mortgage Licensing System, which allows regulators and consumers to track a mortgage broker through an online database of licensed brokers. Cotney and the Massachusetts Division of Banks were leaders in getting all states and territories entered into the system. League President Daniel F. Egan Jr. welcomed the news of Cotney’s appointment. “His long experience at the division together with his insight into the financial services is a real benefit to consumers of the Commonwealth and the industry,” Egan said.

Three CU CEOs on Chicago Fed advisory council

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CHICAGO (2/4/11)--Three credit union CEOs were among 12 members appointed to the Chicago Federal Reserve’s Community Depository Institution Advisory Council. The CEOs area:
Council members were sought out by the Chicago Fed through its leveraging of relationships with:
* State trade associations representing credit unions, banks and thrifts; * State and federal regulatory counterparts; and * The Chicago Fed’s knowledge of senior executives managing community depository institutions.

Minn. N.Y. leagues update state committees on CUs

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ST. PAUL, Minn. and ALBANY, N.Y. (2/4/11)--Minnesota and New York credit union leagues have been busy educating their state lawmakers on the role of credit unions within the financial services industry.
Click to view larger image Minnesota Credit Union Network President/CEO Mark D. Cummins and Vice President of Governmental Affairs Mara Humphrey spoke on the credit union difference at a State Senate hearing on Feb. 2. (Photo provided by Minnesota Credit Union Network)
Representatives from the Minnesota Credit Union Network (MnCUN) spoke Wednesday at an informational hearing for the State Senate Commerce & Consumer Protection Committee, providing an industry overview for local lawmakers. Sixty freshmen legislators were elected to the Minnesota Legislature in November. The newcomers comprise seven of 14 seats on the State Commerce Committee. MnCUN’s President/CEO Mark D. Cummins and Vice President of Governmental Affairs Mara Humphrey spoke about the credit union difference, regulatory structure and current economic trends. Cummins and Humphrey also discussed the National Credit Union Administration and the National Credit Union Share Insurance Fund. The MnCUN representatives spoke about specific state issues, future challenges for the industry and the current regulatory environment. Among the regulatory topics addressed were the Dodd-Frank Regulatory Reform Bill, the Consumer Financial Protection Bureau and the Federal Reserve’s proposed rule on interchange fees. “We understand that the future success and viability of the credit union movement is very much in the hands of our elected officials--both here at the State Capitol and in Washington, D.C.,” Humphrey said. “The more education, information and feedback we can provide to both new and veteran legislators, the more impact we can have in the long-term.” Across the country, representatives from the Credit Union Association of New York and several credit union leaders from the Utica-Rome, N.Y., area visited the Utica offices of Sen. Joseph A. Griffo (R-Utica/Rome), the new chairman of the New York State Senate Banks Committee. In his new position, Griffo will be instrumental in shaping the legislative environment for the state’s credit unions and other financial institutions. While visiting the senator, the group discussed the role of credit unions in the financial services industry and the benefits they provide members and their communities. “During our discussions, Sen. Griffo shared his vision for the Senate Banks Committee--one based on fairness, deliberation and open communication,” said Michael Lanotte, senior vice president and general counsel for the association. “We look forward to working with the senator and the entire committee this session.”

CU System briefs (02/03/2011)

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* SACRAMENTO, Calif. (2/4/11)--The Golden 1 CU is offering a $10,000 reward for information leading to the arrest and prosecution of a man and woman who robbed a Golden 1 branch at 1326 Broadway St., Sacramento, on Jan. 21. The suspects entered the credit union wearing masks and demanded money from tellers. No injuries were reported. The suspects fled in a maroon 2000 Dodge Ram, two-door truck with California license plate number 6F31406. The man was described as a black adult, about 5' 11" with a husky build, wearing all black. His jacket was black with a large white circular design. The woman was described as a black adult with a large build and wearing all black. Anyone with information can contact the Sacramento Police Department at 916-808-3835 or Crime Alert at 916-443-HELP or 800-AA-CRIME … * EAU CLAIRE, Wis. (2/4/11)--Charlie Grossklaus, president/CEO of Royal CU (RCU) the past 26 years, has announced he will retire, effective Jan. 2, 2012. He has been employed with RCU for 40 years and is the second CEO to lead RCU since it was founded in 1964 in the Uniroyal Tire Plant. Grossklaus grew RCU to $1 billion in assets in 2010 when RCU purchased 11 AnchorBank offices. When he became CEO in 1985, RCU held $100 million in assets, had 100 employees and six branches. Today it has 582 employees, 25 branches and serves 18 counties in Wisconsin and 12 in Minnesota. Grossklaus said his immediate plans are "to continue business as usual by fulfilling the 2011 goals as set by our board of directors" …

Council offers paper on CFOs evolving merger role

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MADISON, Wis. (2/4/11)--A CUNA CFO Council white paper examines new regulations adopted that require credit unions to change from the pooling to acquisitions method of accounting. The effect of this change in accounting rules made the credit union merger transaction more time consuming, costly and complex for chief financial officers (CFOs), management, staff and their boards, according to CUNA’s CFO Council. The CFO’s Evolving Merger Role is a white paper sponsored by the council that examines the increasing and evolving portfolio of the CFO in credit union mergers. Effective merger business models and the experiences of their CFOs are profiled along with lessons from the corporate world. The increased regulatory scrutiny and the resulting complexity have contributed to an evolution in the CFO’s merger role. The merger transaction in the past was fairly easy, according to Peg Lamb, CFO of Marine CU, a $410 million-asset credit union in La Crosse, Wis. “You completed due diligence, you had the acquired credit union expense as much as possible on their books before the merger, and with the pooling method you could come away with significant increases in either income or capital,” she said. “Accounting is so different now with Statement of Financial Accounting Standards (SFAS) 141-R. Most merger costs can’t be capitalized. Instead it’s required that all acquisition costs--with the exception of capital issuance costs--must be recognized as expense or period costs when incurred, which are usually after the merger.” If, for instance, two credit unions have separate core systems, the core system not chosen may have multiple years left in the contract. Because one can’t eliminate the acquired credit union’s processing system until after the merger when their members’ accounts are converted to the acquirer’s system, these costs are incurred and expensed post-merger. Not factoring these types of issues into the total cost of the merger can be a costly mistake, Lamb said. CFOs are accustomed to working independently with numbers, often in a solitary environment. In the past, the CFO focused on financials and played a minor role in the cultural transformation, but that is no longer the case, said the paper. The CFO today is expected to take a leadership role in developing a new culture that includes educating employees and modeling behavior. Organizational culture has been likened to breathing. One isn’t aware of breathing; it’s done automatically. Mergers tend to rise or fall depending on the ability of the two organizations to combine as one, taking the best parts and eliminating the negative elements of both cultures, the council said.

Blizzard closes CUNA-Madison CUs across U.S.

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MADISON, Wis. (2/3/11)--While credit unions in the Midwest, Plains and Southern states dug themselves out Wednesday from Tuesday night's blizzard, credit unions in the Northeast were just starting to receive the effects of the 2,100-mile storm. The blizzard--now dubbed the biggest in decades--closed leagues and credit unions across the nation Tuesday afternoon and Wednesday. It also closed the Madison, Wis., offices of the Credit Union National Association's (CUNA) Tuesday afternoon. The offices remained closed Wednesday after blizzard conditions dumped about 16 inches to two feet of snow during the night in the area. CUNA's offices are open today. The Wisconsin Credit Union League also was closed Wednesday, announced President/CEO Brett Thompson in a message to credit union president/CEOs. It's Madison and Pewaukee offices shut down Wednesday but expected to reopen today. Corporate Central CU delayed opening until noon Wednesday and cautioned it would evaluate conditions as the morning progressed. Even Jimmy the Groundhog, the Sun Prairie, Wis.-based equivalent of Pennsylvania's Punxsutawney Phil, knew better than to venture out. He stayed underground after his weather prognosis ceremony was canceled due to weather. Later, his owner said Jimmy was coaxed out and didn't see his shadow, predicting an early spring "and a [Green Bay] Packers win in this Sunday's SuperBowl" ( Feb. 2). Phil also predicted spring. It's assumed he is rooting for the Pittsburgh Steelers in Sunday's game. Travelers planning to attend the game are being advised to wait until later in the week to travel. Chicago, which received at least 20 inches of snow Wednesday morning in near white-out conditions, closed its public schools for the first time in 12 years (USA Today and NPR Feb. 2). Airports there canceled more 2,500 flights, and northern Illinois saw almost 80,000 people without power. The Illinois Credit Union System was closed, as was many Illinois-based credit unions. CEFCU, in Peoria, Ill., reported its branches shut down throughout Central Illinois. The Michigan Credit Union League was closed, although all staff worked remotely from home. The league said several credit unions reported closures. In Indiana, the league closed early Tuesday but staff worked remotely at home so they could provide credit unions with service needed. Purdue Employees FCU, in Lafayette, Ind., reported a weather closing as well. The Texas Credit Union League, which had closed Tuesday after an ice storm hit Dallas-Fort Worth, said Wednesday it would delay opening until 10 a.m. However, it left its options open, saying that if a later morning evaluation of the situation saw unsafe road conditions, then it would remain closed until today. The Missouri Credit Union Association's (MCUA) offices in St. Louis were delayed in opening until 10 a.m. Wednesday. However, the Kansas City and Jefferson City offices were closed Wednesday "due to the winter storm and snow accumulation," said Amy McLard, vice president of public/legislative affairs at MCUA. As the storm moved northeast Wednesday afternoon, reports of ice and downed lines were reported in Cranford, N.J. ( Feb. 2). The New Jersey Credit Union League said that Wednesday night's Union/Morris Credit Union Chapter meeting was canceled; the chapter's next meeting is March 2 (The Daily Exchange Feb. 2). The Maine Credit Union League in Portland, Maine, which was open Wednesday, reported it was getting snow, with mostly sleet in Portland. Most credit unions in the southern half of Maine were closed Wednesday, said Jon Paradise, governmental and public affairs manager. Agility Recovery Solutions, which provides business continuity services to credit unions in weather and other crisis situations, was providing its clients with a "Winter Weather Preparedness Checklist" to help clients identify the areas of their business most susceptible to winter hazards and to suggest ways to minimize damage. Agility is a CUNA Strategic Services provider.

Indiana league offers dues rebate more

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INDIANAPOLIS (2/3/11)--The challenging economy and its effect on credit unions and their members have prompted the Indiana Credit Union League and its Servicecorp to begin 2011 by taking several steps to provide financial assistance to affiliates and help them meet those challenges, the league said. "We know credit unions are working hard to deal with the impact of the continuing financial challenges presented by the current economic environment," said league President John McKenzie. "Our 2011 budget reflects an overall picture where a strong retained earnings situation positions us to continue the focus we've had for several years on additional financial support for affiliates and client credit unions. Several efforts are underway," he added. They include:
* Dues rebates to keep the net amount affiliates pay at the prior year's level for the past two years and in 2011. Those rebates totaled more than $160,000 for 2009-2011. * Financial assistance to emphasize the importance the league places on advocacy by helping more Indiana credit union representatives attend the Credit Union National Association's 2011 Governmental Affairs Conference (GAC) in Washington D.C. Feb. 27-March 3. The assistance totaled more than $80,000 during the past three years. This year, more than 100 Indiana credit union representatives will attend the GAC. * Rebates from Servicecorp to lower the cost to attend education sessions and planning sessions. Rebates have totaled $60,000 for 2009-2011. The Indiana Credit Union Foundation has provided another $75,000 in scholarships to assist credit unions for those three years.

NCUA case questioned but judge allows amended complaint

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LOS ANGELES (2/3/11)--A U.S. District Court judge who tentatively ruled in favor of former directors of Western Corporate FCU (WesCorp) in the National Credit Union Administration's (NCUA) lawsuit on the corporate's investments will allow NCUA to file yet another amended complaint. However, he said the "end-result might very well be the same." To win its $6.8 billion lawsuit alleging breach of fiduciary duty and gross negligence in the U.S. District Court in Los Angeles, NCUA must prove that the directors are not protected by California's Business Judgment Rule. The rule provides directors "broad discretion in making corporate decisions and [allows] these decisions to be made without judicial second-guessing in hindsight," U.S. District Judge George Wu wrote in December, when he tentatively dismissed the case. That tentative ruling generally found in favor of the directors but left open the possibility of NCUA filing an amended complaint if the agency filed an additional "offer" of facts. NCUA's amended "offer," filed Jan. 10, proposed allegations in three categories related to budget and interest-rate spreads; concentration limits and option adjustable-rate mortgages; and damages. The judge's latest tentative ruling will allow the agency to file such an amended complaint based on its "offer," after which another round of legal arguments are expected. In the latest tentative ruling, the court noted "the conclusory allegations of improper motives or conflict of interest are insufficient, as are general allegations of a failure to conduct an 'active investigation, in the absence of (1) allegations of facts which would reasonably call for such an investigation, or (2) allegations of facts which would have been discovered by a reasonable investigation and would have been material to the questioned exercise of business judgment." The only allegations that "even come close to satisfying" are "actions which are 'clearly unreasonable under the circumstances known to them at the time' or are the product of a failure to conduct an 'active investigation,'" this week's ruling said. These allegations "are not significantly different than what were already included" in NCUA's original complaint. A "seemingly gigantic problem with plaintiff's case is that WesCorp never invested in securities graded lower than AA," he said. He noted that if the court would conclude NCUA had overcome the business judgment rule, it "would seemingly only do so with respect to those director defendants who were members of the budget committee" but then questioned "why a budget committee should be held responsible for investment decisions." NCUA's criticism of option ARM mortgage-backed securities is "irrelevant given the business judgment rule because there are no allegations that the director defendants were aware at the time any investment decisions were made of the details underlying the incredibly weak foundation for those securities at the time, or that such information was readily available to them," Wu added. In light of the fact "that it would be difficult to conclude" that NCUA's "amendment would be clearly futile, a fuller consideration of the adequacy of such allegations is arguably warranted," Wu said in allowing NCUA to amend its first claim. However, depending on the materials considered in new briefings, "the end-result might very well be the same." NCUA must file its second amended complaint by Feb. 22, according to the court documents, which were made public Wednesday.

Winter storms close CUNAs Madison offices today

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MADISON, Wis. (2/2/11)--The Madison, Wis. offices of the Credit Union National Association will be closed today due to the inclement weather. The region received more than 12 inches of snow last night in blizzard conditions. For weather-related closings of credit unions and leagues across the nation, see related story, "CUs not immune to weather," in News Now's System section. CUNA's Madison office was closed at 2 p.m. Tuesday. CUNA advised staff late Tuesday night that offices would be closed today. News Now staff are working remotely today to provide updates. Also watch News Now's Twitter account LiveWire for updates.

CUs not immune to the weather

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MADISON, Wis. (2/2/11)--Regional groundhogs, prognosticators of just how long winter will last, got a good dose of their own medicine the past two days. Credit unions and leagues throughout the Plains, Midwest, South and Northeast began closing Tuesday in preparation for the night's snow and ice storm, billed as "potentially historic." Much of the nation was in winter's grip last night. Winter watches were posted Tuesday for 31 states, from New Mexico to Maine--more than 2,000 miles, said USA Today. A 2,100 mile path from the southern Plains to coastal New England was told to expect from a foot to 20 inches of snow. Just south of the area, another 1,500 mile stretch was expecting ice. The weather would affect nearly a third of the nation's population. The Credit Union National Association (CUNA) closed its Madison, Wis., offices at 2 p.m. Tuesday so staff could beat the storm home. CUNA's Madison office remains closed today. As of midnight the city had acquired at least 12 inches of new snow amd was still under blizzard conditions. News Now canvassed some leagues Tuesday to see how they were doing. A number reported closures, while others made contingency plans for today. All day long credit union folks from different regions checked in with each other, comparing weather notes. Their e-mails often ended with "stay warm," and "drive safe." Kansas Credit Union Association (KCUA) President/CEO Marla Marsh closed KCUA at 3 p.m., but its Expandacheck division still processed until 4 p.m. In Wichita, conditions were snowy and windy with winds of 35 mph and gusts up to 43 mph. Ten credit unions had closed "due to the inclement weather," said Susan Dyer, communications specialist, who was working remotely from home. They included:
* Emporia State FCU * CU Leavenworth County, which closed at noon; * First Choice CU, closed at noon; * Wakarusa Valley CU; * Campus CU; * USPLK Employees FCU; * Kansas Teachers Comm. CU * CU of Emporia; and * Meritrust, which closed at 2 p.m.
The Texas Credit Union League said its offices in Dallas would not open Tuesday and it would monitor conditions for today. The Dallas Fort-Worth airport canceled hundreds of flights. The Indiana Credit Union League and Servicecorp office closed at 3 p.m. Tuesday, and staff worked remotely because of "increasingly severe winter weather--a more intense ice storm moving into the Indianapolis area" and the "dangerous driving conditions around our office," said Kay Neidlinger, vice president of communications. The Missouri Credit Union Association (MCUA) said its St. Louis offices would open late today at 10 a.m. The Kansas City and Jefferson City offices remained closed due to the winter storm and snow accumulation, said Amy McLard, vice president of public/legislative affairs. MCUA was closed Tuesday although its League Item Processing Center was open until early afternoon. "They are closing shortly, however, to allow staff to get home before the snow piles on top of the icy mix." Many credit unions "either decided to close Monday night after Gov. Jay Nixon put the Missouri National Guard on alert to assist with weather related issues, or closed early today," she told News Now. News reports said the area already had six inches of snow when the day began. The Credit Union League of Connecticut closed at noon, with staff working from home, said Ed Zagorski, director of communications. "As for tomorrow, we'll have to wait and see what happens." The Maine Credit Union League remained open, but Jon Paradise, governmental and public affairs manager, noted the region "is bracing for a bigger storm due tomorrow but, as of now, I am not aware of any closings." In Colorado, Timothy Dore, senior vice president of governmental affairs at the Credit Union Associations in Colorado and Wyoming, said the association was open Tuesday. He noted temperatures of -10 degrees and a windchill of -33, saying it was "too cold to snow more than a couple of inches." The Ohio Credit Union League was open for business yesterday, said Patrick Harris, director of media relations, adding he had not heard of any credit unions changing business operations and that precipitation had been less than expected so far. Most leagues were not making the decision on closures for today until this morning. Watch News Now and its LiveWire for updates today.

Bellco receives UBIT refund from IRS

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GREENWOOD VILLAGE, Colo. (2/2/11)--Bellco CU Tuesday received three checks totaling $291,691.62 from the Internal Revenue Service (IRS), the result of the Greenwood Village, Colo.-based credit union winning its challenge to the IRS's policy toward unrelated business income tax (UBIT) and its application to credit unions. Bellco CU CEO Doug Ferraro told News Now the three checks were "a full refund of the three years in which we sued over" the IRS's policy. He noted his law firm received the checks yesterday. "It nearly brought tears to the eyes of one staff member who worked on this case for so long," Ferraro said. "In the end, credit unions prevailed on every major issue in the lawsuit. It was a decisive blow to the IRS position on various elements of UBIT for state-chartered credit unions, and serves as a template for organizing insurance and investment activities in a way to ensure they are not subject to UBIT," he said. Judge Christine M. Arguello of the U.S. District Court of Colorado in Denver ruled in November 2009 that investment and insurance products sold by Bellco to members, including credit life and disability insurance and some other products, stocks, bonds, mutual funds and annuities, were "substantially related" to Bellco's tax-exempt purposes, and therefore the income from those activities was, under the law, exempt from UBIT (News Now Oct. 20, 2010). In October 2010, the U.S. Department of Justice abandoned its plans to appeal that ruling, prompting Credit Union National Association (CUNA) President/CEO Bill Cheney to call it "fantastic news because it means the government did not see enough merit in its own position to push it further in the courts." "The UBIT Steering Committee did a terrific job in finding an outstanding firm who fought hard for credit unions," Ferraro told News Now. The credit union was represented in the lawsuit by law firm Foley & Lardner LLP and lead attorney Michael M. Conway. Ferraro thanked the UBIT Steering committee--comprised of CUNA, the American Association of Credit Union Leagues, CUNA Mutual Group and the National Association of State Credit Union Supervisors (NASCUS)--"for their leadership in fighting this much-needed battle." The case was the second time within a year that a U.S. District Court had upheld credit unions' challenges to UBIT rules. In 2009, Community First CU, Appleton, Wis., was ruled exempt from UBIT on income from credit life insurance, credit disability insurance and GAP coverage (News Now April 6, 2010).

Kentucky league KYCUL Services boards named

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LOUISVILLE, Ky. (2/2/11)--The Kentucky Credit Union League has
Kentucky CU League's board of directors' executive committee includes from left, front row, second vice chairman, Alesha Saalwaechter; lst vice chairman, Steve Sharp; chairman, Huston Reinle; secretary, Lynn Huether; and treasurer, Henry Wheatley. Other directors, back row, include: John Graham, Brian Tylers, John Graham, Brian Tyler, Ed Wessel, Sharon Board, Laurene Young, Bennie Hoppius, Joann Mason, Larry Lucas, and Carl Hicks (Photos provided by the Kentucky Credit Union League)
announced its 2011 boards of directors for the league and for its subsidiary, KYCUL Services Inc. (By the Way Feb. 1). Executive Committee members of the league board include:
* Chairman, Huston Reinle, director-at-large; * First vice chairman, Steve Sharp, director-at-large; * Second vice chairman, Alesha Saalwaechter, director-at-large; * Secretary, Lynn Huether, director-at-large; and * Treasurer, Henry Wheatley, volunteer director.
KYCUL Services Inc.'s 2011 board of directors include, from left, front row: Steve Sharp, first vice chairman; Mike Fromma, chairman; and Henry Wheatley, treasurer. Back row, Larry Moore, director-at-large; Alesha Saalwaechter, second vice chairman; Lynn Huether, stockholder director; and Carl Hicks, secretary.
Other members of the board include:
* John Graham, * Brian Tyler, * Ed Wessel, * Sharon Board, * Laurene Young, * Bennie Hoppius, * Joann Mason, * Larry Lucas, and * Carl Hicks.
KYCUL Services Inc. board officers include: Chairman, Mike Fromma; First vice chairman, Sharp; Second vice chairman, Saalwaechter; and Treasurer, Wheatley. Other directors include: Larry Moore, Huether, and Hicks.

Savings promo raffles catching on

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MADISON, Wis. (2/2/11)--American consumers have a hard time saving. But they love to play the lottery. Credit unions across the country are taking advantage of consumers’ passion for “that one chance to win big” and enticing them to save at the same time. Credit unions are offering lottery-type drawings for groups of members who make the sacrifice to sock their money away. The concept is straightforward: Members put money in a savings or certificate of deposit account for a chance to win monthly prizes and a grand prize. The more they save, the better their chances of winning. The trend began in the U.S. in Michigan in 2009 with the “Save to Win” program, an idea conceived by finance professor Peter Tufano of Harvard Business School. Through Doorway to Dreams, a foundation that seeks innovative ways to bring financial services to lower-income families, Tufano joined with the Michigan Credit Union League and the Filene Research Institute to pilot the program with eight state credit unions. Members who put $25 or more into a Save to Win one-year CD were entered into a monthly raffle for prizes up to $400, plus one annual drawing for a $100,000 jackpot. Participants could save a maximum of $250 a month--or 10 chances at winning the raffle drawing In 2009, the program attracted more than 11,600 savers who saved $8.6 million. Since then, eight additional states have moved forward with plans for prized-based savings programs. In 2009, Rhode Island, Maine and Maryland enacted laws that allow financial institutions to offers savings promotion or lotteries to boost consumer savings. Legislation is currently pending in five other states: Nebraska, Iowa, Mississippi, New Mexico and Washington. The economic meltdown was hard on consumers' retirement accounts, home equity and cash savings--the three major ways that Americans typically save money, said John Annaloro, the Northwest Credit Union Association's chief executive. Americans' personal savings rate was recently pegged at 5.3 percent. That's a major improvement from 2006 and 2007, when the rate turned negative for the first time since the Great Depression, but still far from the 10 percent saved in 1985 (Associated Press Jan 30). The programs are a “win” for states and consumers. Nebraska State Sen. Amanda McGill, in introducing the bill in her state, noted that the average American family spends $540 on lottery tickets (News NowJan. 25). Through savings raffles a state’s consumers are more financially stable. Consumers save more money--and still satisfy their urge to take a chance on winning big.

Top 10 INews NowI stories for January (02/01/2011)

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MADISON, Wis. (2/2/11)--Corporate stabilization and interchange, which dominated the News Now monthly top 10 stories list all year during 2010, didn’t crack the January top 10 list. The stories are: 10. CU Times’ parent co. files for Ch.11 bankruptcy NEW YORK (1/28/11)--Summit Business Media, the parent company of trade newspaper Credit Union Times and 12 other business-to-business publications, announced Wednesday it was filing for a Chapter 11 reorganization in a U.S. Bankruptcy Court in Wilmington, Del. 9. Four banned from future FCU work ALEXANDRIA, Va. (1/21/11)--Four former credit union employees have been banned from future work at any federally insured financial institution under prohibition orders issued by the National Credit Union Administration (NCUA). 8. CU-to-bank conversions declining MADISON, Wis. (1/14/11)--2010 was a year without a single credit union-to-bank conversion, and it arrived on the heels of two years in which only one such conversion per year occurred. News Now, sniffing a trend, decided to look closer and noted a decline in conversions since they peaked at eight conversions in 2001. 7. Technology 2011: What's next? Just three years ago, someone who mentioned “twitter” or “tweet” in a business meeting would draw blank stares. Today “Twitter” and “tweet” is part of the everyday lexicon, and using Twitter is an important branding vehicle for many companies, including credit unions. Who would have thought 140-character micro-blogging would become so vital? 6. NCUA applies salary freeze to part of work force ALEXANDRIA, Va. (1/5/11)--The National Credit Union Administration (NCUA) said yesterday it will apply President Barack Obama’s recent executive-ordered federal pay freeze to those agency employees whose salary increases were not negotiated under existing union contracts. These employees’ salaries will be frozen, NCUA Chairman Debbie Matz said, "and we will reduce our budget accordingly." 5. Truth-in-Savings changes finalized by NCUA The National Credit Union Administration (NCUA) on Jan. 13 finalized a rule that requires credit unions to disclose overdraft and returned item (NSF) fees on their members’ periodic statements. Under the rule, fees for both the statement period and for the year-to-date must be included on the disclosures. These and other changes to Regulation DD, the Truth in Savings Act, took effect on Jan. 1. 4. CUNA concerned by CARD Act creditworthiness standard WASHINGTON (1/5/11)--The Credit Union National Association (CUNA) in a recent comment letter said it is concerned by a Federal Reserve proposal that would require creditors to consider only an individual credit applicant's ability to make payments, and not other household income, when determining an individual's creditworthiness. 3. CUNA unveils extensive guidance on CU exam issues WASHINGTON (1/18/11)--After an exhaustive look at credit unions’ increasing frustrations, the Credit Union National Association (CUNA) has developed a bill of "examination rights," which is detailed and cross-referenced to the National Credit Union Administration's (NCUA) own examiner guide. 2. Supreme Court’s bankruptcy ruling a ‘positive for CUs’ WASHINGTON (1/13/11)—Tuesday’s 8-to1 ruling by the Supreme Court of the U.S. in favor of a creditor who contested a bankruptcy filer's disposable income deduction is a "positive for credit unions" or any creditor of unsecured debt in a Chapter 13 bankruptcy, according to Michael Edwards, Credit Union National Association (CUNA) counsel for special projects. 1. What CUs should do in 2011--CUNA economist MADISON, Wis. (1/7/11)--The Credit Union National Association’s (CUNA) 2011 Economic and Credit Union Forecast reflects expectations that the economy will improve, but the level of growth associated with the rebound will be lower than what is typically seen in an economic recovery. This has implications for credit unions' actions, says a CUNA economist.