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CU System briefs (02/29/2012)

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  • CEDAR RAPIDS, Iowa (3/1/12)--Joseph Cofield, 23, of Cedar Rapids, Iowa, was sentenced Feb. 21 to 10 years in prison for the robbery of Community 1st CU last May. He had pleaded guilty in January to the heist. Cofield was fined $1,000 and ordered to pay back to the credit union more than $6,600.  Cofield was captured after relatives identified him in surveillance photos. Another man who allegedly acted as lookout and getaway car driver, Tony Perez, 32, also of Cedar Rapids, pleaded guilty last year and was also sentenced to 10 years in prison (Associated Press Newswires Feb. 24) …
  • JUNEAU, Alaska (3/1/12)--SallyJean Maki, 26, of Juneau, Alaska, pleaded guilty to laundering more than $25,000 for drug dealers accused of bringing oxycodone from California to Alaska. Maki allegedly deposited drug-sales proceeds into the account of alleged ringleader Milan Thomas at True North FCU, Juneau, between July 2010 and August 2011.  The deposits were claimed as business receipts for Southeast Alaska Tour Co., a fraudulent business set up to launder the funds. Maki faces a maximum of 20 years in prison, a $500,000 fine, and three years of supervised release.  She will be sentenced in May. Thomas, indicted on drug conspiracy and money laundering conspiracy charges, is still at large. A third person, Hilary Herndon, also alleged to be a ringleader, pleaded guilty last week to one count each of drug conspiracy and money laundering (Associated Press Newswires Feb. 23) …

W.Va. Central uses Disney to incent staff

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PARKERSBURG, W. Va. (3/1/12)--West Virginia Central CU, Parkersburg, W.Va., experienced a giant leap in loan growth during the first two months of 2012, due to the promise of a visit with a famous mouse.

At the end of February, WVCCU celebrated the $1 million mark in net loan growth--something that normally doesn't occur until about May of each year, said the credit union.  It achieved the goal with an incentive program for staff.

Mike Tucker, CEO of West Virginia Central CU, Parkersburg, W. Va., announced staff goals and incentives program while dressed as a Disney chipmunk, Chip of Chip and Dale. The credit union will treat staff--either the winning team or the entire staff, depending on the extent of loan growth--to a trip to Disney World. (Photo provided by West Virginia Central CU).
In 2011, the credit divided 28 staffers into three teams and pitted them against each other for three months, said Lisa Collins, PR coordinator, at the credit union.   Each week, the teams set different goals and were given $500 each to market their own efforts.  Weekly prizes for winning teams included small gifts and gift cards, and the final team prize was an android table.

"We saw a lot of friendly competition, and loan growth definitely improved," said Collins. "We met our loan goals for the time period, and everyone enjoyed it, but we knew there was more excitement to be mined, if we could just figure out a motivation."

The motivation turned out to be Disney World.  Two years ago, staff had been treated to a trip to Washington, D.C., a five-hour drive away, where they stayed at a Ritz Carlton near a Nordstrom.  While there, they studied both companies' customer service efforts and toured the city. Since  then, staff continued to mention  Disney as another business known for world-class service, said Collins. Management knew Disney would be a tougher trip because it required flights and more financial outlay.

After a visit from consultant Rick Olson, who conducted a Coaching College for WVCCU the past two years, Collins was inspired to put together a Disney trip.  "I went in to our CEO with a plan to incent the staff to huge numbers with the promise of Disney at the end of the year."

Management planned a surprise party just before Christmas, and when staff  arrived, the room was decked out in Disney. CEO Mike Tucker devised a "Mickey on Steroids" goal, which was announced by Vice President of Loans Mark Greenlees while dancing in a Goofy hat.

Team captains, who were not in on the secret, had created team names, slogans and plans for each group, which they announced that night. Bottom line?  Bring in outstanding referrals and loan dollars, and the winning team would receive a trip to Disney.  Bring in huge referrals and loans, and the whole staff could go.

Already hitting the million dollar loan mark three months early, the teams are setting their own goals, creating their marketing themes and contacting members directly to get refinance business and new loans.

The rivalry is friendly but fierce as the teams work to beat each other and to get the entire group to Florida. The credit union hands out weekly rewards in Disney dollars, which helps team members save for extras for their trip. The handful who will not be able to make the trip will collect the cash equivalent at the end of the three-quarter contest, so everyone wins, said Collins.

"Members are receiving a lot of extra attention from us as we help them to get the best loan deals," said Collins, "and we are bettering the overall financial picture of our credit union as we increase loan volume. The mouse has definitely helped us meet our goals," she added.

400 CU professionals earned CUCEs in 2011

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MADISON, Wis. (3/1/12)--The Credit Union National association (CUNA) announced that more than 400 credit union compliance professionals from 49 states earned or renewed their CUNA Credit Union Compliance Expert (CUCE) Certification in 2011.

CUNA created the certificate program to help credit union compliance professionals stay up-to-date with the latest compliance regulations and ensure credit unions operate within the parameters of current law. Due to the ever-changing compliance environment, the CUCE certification must be renewed every three years.

The names and the credit unions of the CUCE certified and recertified professionals are listed in the resource links below.

The CUNA CUCE Certificate will continue to be offered in 2012. Certification and recertification are available this year through CUNA Regulatory Compliance Schools (April 21-27, in Orlando, Fla., or Sept 15-21, in Anaheim, Calif.) or at CUNA Regulatory Compliance eSchools (April 18-June 27or Sept. 25-Nov. 27).

Certification also can be earned through the CUNA Regulatory Training & Certification Program, a self-study compliance certification program.

For more information, use the links.

Illinois tornado brings out CU philosophy

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NAPERVILLE (3/1/12)--A tornado that ripped through the small, southern Illinois community of Harrisburg Tuesday night apparently did not damage Illinois credit unions. However, credit unions are putting their philosophy into practice.

A well-being check by Pat Voss, Illinois Credit Union League (ICUL) regional director for the area, and other staff discovered that no credit unions in that region were significantly impacted by the storm.

This includes NYC Employees CU, which is located in Harrisburg. One other Harrisburg credit union, Southeastern Electric ECU, was closed Wednesday because rescue crews used the community center where the credit union normally operates for emergency relief operations.

This region of Illinois is represented by the Egyptian Chapter, which includes nine credit unions that serve more than 34,400 members and hold $253.2 million in assets.

Two of the credit unions in the area, SIU CU, Carbondale, with multiple branches, and River to River CU, located just south of Harrisburg in Vienna, have offered assistance to other credit unions.

"We will certainly step up if a credit union needs assistance with cash checking or anything else," said Dennis Schaefer, SIU CU CEO. Three of the credit union's staff are members of a community emergency response team. "We have a mutual agreement with the Elverado Fire Department to assist with this and other efforts, much like we were afforded assistance with past storms that affected us," Schaefer said.

"We have office space and extra furniture," said Sheila Reichert, River to River CU CEO.  "Basically, if we have it and can share it, we will be glad to."

If any credit unions need financial assistance in their recovery, the Illinois Credit Union Foundation is ready to activate its disaster relief fund. Credit unions that need assistance may contact Vicki Ponzo, foundation executive director at 630-983-3413.

Indiana Kentucky CUs collaborate on iBelong

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INDIANAPOLIS (3/1/12)--The Indiana Credit Union League, in cooperation with the Kentucky Credit Union League, organized an advertising campaign which includes TV, radio and billboard placements. The campaign began at the end of 2011 and continues through mid-March.

The campaign had support from 54 credit union affiliates across Indiana and eight affiliates in the Louisville, Ky., area, said the Indiana league.

The iBelong credit union awareness materials were licensed by the Indiana league for the campaign from the Pennsylvania Credit Union Association (PCUA). Media buys were made in designated marketing areas (DMAs) across Indiana and Louisville. Individual credit union contributions were applied to the DMA where each participating credit union is located.

"It has been a very beneficial collaborative effort by credit unions in both states, with our Servicecorp also contributing more than $106,000 for the licensing and media buys in addition to credit union contributions," said Indiana league President John McKenzie.

The message is focused on the benefits of credit union membership. The media buy included more than 3,600 TV spots, 2,200 radio spots and 68 billboards. Since launching the campaign, hundreds of additional bonus spots on radio, TV and Internet have advertised as part of the campaign.

"Participating in this campaign with our Indiana neighbors has helped Louisville area credit unions get the word out about the overall value of credit union membership," said Wendell Lyons, president of the Kentucky league.

"A great deal of research and creative expertise went into the campaign, which showcases credit union membership as the best choice in financial services," said Jim McCormack, PCUA president/CEO.

For its campaign, the Indiana league used four of the TV spots produced by PCUA. The audio was used for radio spots.

To see the spots and artwork for the billboards, use the link.

Wash. public deposits bill on governors desk

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FEDERAL WAY, Wash. (3/1/12)--Washington's government entities soon could have a local option for their public deposits that would allow them to invest their tax dollars locally and support financial institutions--including credit unions--that reinvest in their communities.

Senate Bill 5913, which allows public entities to deposit funds up to the insurance maximum of $250,000 in any credit union headquartered in Washington, was passed by the State House of Representatives Monday, 80-16, with two members excused.

SB 5913 now moves to Gov. Christine Gregoire, where she is expected to sign it into law. The legislation would take effect June 8--90 days after the end of the session.

SB 5913 is opposed by banks.

"These legislative changes in Oregon, and now Washington, rectify a near-monopoly on some aspects of our financial markets," says Northwest Credit Union Association (NWCUA) CEO John Annaloro, referring also to a recent decision to allow Oregon credit unions to accept unlimited public funds. "All government-chartered financial institutions are now available to advance the communities of our region."

The bill, which modernizes Washington's public funds laws, was passed by the Senate on a 43-2 vote Feb. 9, where it was sponsored primarily by Senate Financial Services and Insurance Committee member State Sen. Margarita Prentice (D-11), as well as the committee's chairman, State Sen. Steve Hobbs (D-44), and State Sen. Don Benton (R-17). SB 5913 also received support from the state treasurer's office and Seattle.

Following the Nov. 5 Bank Transfer Day last year, the Seattle City Council unanimously adopted a responsible banking ordinance that called on the city to examine its banking and investment practices, a movement that is gradually gaining momentum around the nation, NWCUA said.

"Hard work by the Senate, along with committed supporters and a general public disgust with big banks, negated any opposition to this bill," said Mark Minickiello, NWCUA vice president of legislative affairs. "The momentum that carried over from November was palpable."

The issue of public funds deposits was not centered on credit unions' ability to accept public dollars. Rather, it is the state and local entity's inability to deposit those dollars that was the core of the problem, NWCUA said. Credit unions have always been allowed to accept public funds. The new law makes it legal for public entities to deposit those dollars in credit unions, Minickiello said.

"For credit unions, this has always been a member-service issue," testified Debie Keesee, president of Spokane (Wash.) Media FCU and NWCUA vice chairman, to a Senate committee, earlier this year. Even though her credit union is the closest financial institution to the city of Millwood, Wash., it would be illegal for the city to deposit of any of its public funds there, she said.

CSS to pilot social media rewards program

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MADISON, Wis. (3/1/12)--CUNA Strategic Services (CSS) today begins a six-month pilot of a software platform from BuzzBanking Inc. that ties social networking to a rewards program.

"Rewards programs are prevalent across all industries," said Wes Millar, senior vice president of CSS. "The BuzzBanking platform provides credit unions with an opportunity to build member loyalty by rewarding members' behavior for being financially responsible consumers. They also can associate rewards with behaviors such as subscribing to direct deposit, applying for loans or referring new members."

BuzzBanking was designed to engage members, said Jay Valanju, BuzzBanking CEO and founder.

"It is a resourceful way to stay relevant with the credit union membership and drive members' transactional behavior, resulting in a significant increase in the credit union's revenues and profits," Valanju said. "While credit unions can determine which products are eligible for rewards, BuzzBanking permits the credit union to push achievements to and pull information from social sites like Facebook and Twitter."

Eligible credit unions can test the software with their employee groups at an introductory price.

SunCorp adds another Town Hall webinar

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WESTMINSTER, Colo. (3/1/12)--SunCorp is adding another Town Hall webinar to match increased interest from Western credit unions considering alternatives for cooperative financial solutions.

The latest webinar will be held March 13 from 1:30 p.m. to 3:30 p.m .PT.

SunCorp has held nine Town Hall meetings and webinars with credit unions in Idaho, California, Oregon, Nevada and Washington during the past five weeks.

The corporate credit union is adding members "almost daily," said Thomas R. Graham, Suncorp president/CEO. "We are seeing strong interest in SunCorp's business model, balance sheet strength, high touch service, and proven board and management team," Graham added. "SunCorp is focused entirely on serving credit unions in the West and we want to give all Western credit unions the opportunity to hear our story."

The March 13 meeting will include a discussion with SunCorp executives on business plans for the future. Credit unions also will learn about SunCorp's payment, liquidity and investment services.

Cheney addresses CU issues at Reality Check

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ATLANTIC CITY, N.J. (3/1/12)--Membership growth, supplemental capital, member business lending (MBL), and  a growing regulatory burden were topics addressed Tuesday by Credit Union National Association President/CEO Bill Cheney  during the New Jersey Credit Union League's 2012 Credit Union Reality Check conference in Atlantic City.

Credit Union National Association President/CEO Bill Cheney updated attendees at New Jersey's 2012 Credit Union Reality Check on legislative and regulatory issues. (Photo provided by the New Jersey Credit Union League)
Speaking at a networking luncheon, Cheney opened with a positive message about the growth of credit unions during the past year, noting that credit unions saw a net growth of two million members during 2011 (The Daily Exchange Feb. 29).

CUNA is working on several legislative issues that will have a positive impact on credit unions, he said. The recently introduced supplemental capital bill (H.R. 3993), which would allow credit unions to obtain supplemental capital, is a "stake in the ground" and a great start for a conversation about the need for it, Cheney said.  H.R. 3993 was introduced in early February by U.S. Reps. Peter King (R-N.Y.) and Brad Sherman (D-Calif.) and has more than eight additional co-sponsors. CUNA is looking for more co-sponsors, Cheney told the attendees.

Member business lending (MBL) is an ongoing issue that CUNA continues to support and push. In a recent poll, 64% of small business owners said that access to capital is an issue for them, Cheney pointed out. Pending legislation to increase credit unions' MBL cap to 27.5% of assets from 12.25% would inject $13 billion into  the economy in the form of small business loans and help create 140,000 jobs at no expense to the taxpayer, Cheney emphasized. Legislators are now grasping the potential positive impact of MBL, he told the group.

Cheney also addressed credit unions' concerns about their growing regulatory burden. CUNA is working with both the National Credit Union Administration and the new Consumer Financial Protection Bureau (CFPB) to get some regulatory relief for credit unions.

The current pressure from NCUA and potential CFPB regulations is "not sustainable" and NCUA needs to take a "balanced approach" in order for credit unions to survive and thrive, he said.

CUNA has met with CFPB numerous times to express credit unions' concern and to tell the good story of credit unions, Cheney said. It is working with the agency specifically on remittance issues and ATM disclosures. Cheney reminded the group that CFPB Director Richard Cordray will speak at CUNA's Governmental Affairs Conference, held March 18-22 in Washington, D.C.

J.P Morgan asks court to reject NCUAs MBS case

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WICHITA, Kan. (3/1/12)--J.P. Morgan Chase & Co. on Wednesday asked the U.S. District Court of Kansas to reject the National Credit Union Administration's (NCUA) claim that a previous court ruling supports its arguments in the agency's mortgage-backed securities (MBS) lawsuits against RBS Securities and Goldman Sachs.

The suit is one of several filed by NCUA, seeking about $2 billion total from companies that sold MBSs to corporate credit unions. It has also sued J. P. Morgan Securities LLC, Goldman Sachs and Wells Fargo, which succeeded Wachovia Bank.

J.P. Morgan's arguments were in response to a Feb. 17 by NCUA citing Mass. Mutual Life Ins. Co. v. Residential Funding, in which the U.S. District Court in Massachusetts on Feb. 14 denied motions to dismiss NCUA's similar MBS lawsuits against RBS Securities and Goldman Sachs. The Massachusetts court also rejected the same arguments that RBS and Goldman Sachs have presented in the lawsuits NCUA brought against them  involving MBS they sold to Western Corporate FCU (WesCorp) and U.S. Central FCU (News Now Feb 22).

In its response filed Wednesday, J.P. Morgan said NCUA did not conduct any "forensic analysis of loan data" underlying the securities as the plaintiff did in the MassMutual case and that it did not rely on any original witness testimony.

J.P. Morgan cited a tentative ruling by a federal judge in California to dismiss NCUA's $629 million lawsuit against RBS Securities Inc. over the mortgage-backed securities (MBS) it sold to the now defunct WesCorp. In that case, U.S. District Judge George Wu had said NCUA relied mostly on "conclusionary" allegations tied to statistics that showed how the investments were affected by the housing market collapse.

MassMutual also said that NCUA has publicly attributed the poor performance of its MBS to market factors. J.P. Morgan Chase argues this undermines NCUA's contention of a disregard of underwriting standards on the part of originators was the cause of the losses.

NCUA's claims were based on securities companies' "wholesale abandonment of underwriting standards," when the facts of the case point to only a "loosening" of standards, which NCUA admits are not equivalent to abandonment, said J.P. Morgan.

NCUA warned credit unions as early as 2005 of the potential for inflated home appraisals and the risks of liberalized underwriting practices, J.P. Morgan said.

Leap Year An extra day to put finances in order

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WASHINGTON (2/29/12)--Credit unions can celebrate Leap Year today by pointing out to members that they have an extra 24 hours this year to get their finances in order.

According to the National Foundation for Credit Counseling (NFCC), the phenomenon that makes Feb. 29 occur only once every four years provides an extra day that consumers can dedicate to tackling the financial tasks they've been procrastinating.

NFCC has some suggestions that credit unions can share with members on how to use the day:

  • Prepare federal income taxes.  Members can gather all the 1099s, W-2s, and receipts for deductions. These items will be needed to prepare an accurate tax return.
  • Create or organize a home financial center.  Create files for each category of financial documents to stay organized all year long.   It will make preparing next year's tax returns much simpler.
  • Review all insurance policies.  Making a claim is not the time to become familiar with one's insurance policy. "Insurance is not something to buy and forget, as life changes often dictate adjustments to the policy. Make an appointment with your insurance provider to confirm that your current needs match your coverage," said NFCC.
  • Review retirement contributions. With the payroll tax cut, Americans have extra money in their paychecks. The best use of this money could be increasing the retirement contribution at work, said NFCC.  Maximize the benefits of an employer match and age-related allowable contribution increases.
  • Order your credit report and score. Many people don't realize that their credit score is related to information on their credit report.  Although consumers can get free reports through, NFCC said its Financial Literacy study revealed that 65% of Americans had not ordered a credit report in the past 12 months, and 63% indicated they had not ordered their credit score.  These numbers dictate much of consumers' financial future, said NFCC.
"Those who use the extra time afforded by Leap Year to accomplish these five financial moves will wake up March 1st with a well-earned sense of accomplishment," said Gail Cunningham, spokesperson for the NFCC. "The efforts they put forth on this bonus day will yield rewards throughout the year."

Occupy group seeks to launch CU

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FULLERTON, Calif. (2/29/12)--A group in Fullerton, Calif.,  calling itself  "Occupy OC"--OC stands for Orange County--is trying to launch a credit union.

The protest group said it  plans to launch a federation of member-owned credit unions that are "competitive, stable and democratic" and "dedicated to peacefully combating economic injustice," according to a report in The Orange County Register (Feb. 25).

An inaugural general assembly was set for the "Occupy First Federal Credit Unions" project for last weekend.  The group has not updated its website to reflect any decisions made at the meeting.

CUs enjoy another round of BTD publicity

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MADISON, Wis. (2/29/12)--Although Bank Transfer Day (BTD) was months ago, its impact is still being discussed. Credit unions recently were featured in more media outlets as a result of their BTD growth and the public's general dissatisfaction with banks.

Michigan credit unions gained 27,900 new members between Sept. 29 and Oct. 29--quite a bit more than typical for a month, according to estimates by the Credit Union National Association (CUNA) reported in Crain's Detroit Business (Feb. 26).

Increasing bank fees, more scrutiny of loan customers by banks, and the credit crisis in 2009 and 2010, helped credit unions gain more business, David Adams, president/CEO of the Michigan Credit Union League, told Crain's.

Michigan has 4.5 million members, the publication said.

Nationwide, nearly 700,000 people had opened new accounts at credit unions as a result of activities leading up to BTD on Nov. 5, said The Motley Fool (via Feb. 28), citing CUNA statistics.

The upshot, according to The Motley Fool, is that even if BTD fell short of its desired results in acquiring members from big banks, it will be a lot more positive for consumers in the long term for one basic reason: "It shows that they're empowered to take action to boost their own  personal financial situations.

"By moving to smaller institutions that are better suited to meet their needs, millions of customers will get better service and have a more valuable experience," the article continued. "That, in turn, should help encourage many people who otherwise would've been too intimidated to take further steps toward smarter money management moves like investing. In the end, the winners of BTD were those who saw the light and made moves to save them money. That's a lasting lesson that could serve you well throughout your lifetime."

Also, The Washington Post Tuesday reported on one of its blogs that more U.S. citizens are transferring their money out of large and mid-sized banks. About 9.6% moved their money in 2011--up from 8.7% in 2010, and 7.7% in 2009, according to a new study by J.D. Power and Associates, cited by Housing Wire. (See Feb. 28 News Now report on the study: "Big bank exodus good for smaller FIs: JD Powers").

To read the articles, use the links.

One in four online households use mobile banking

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BROOKFIELD, Wis. (2/29/12)--Here's another sign that credit unions should offer mobile banking options. One in four U.S. online households already use a mobile banking service, and many are moving beyond employing mobile devices for information (such as checking a balance or locating an ATM) and toward making transactions (paying bills and transferring money), says a new study.

Consumers access mobile banking through mobile browsers (60%), downloadable apps (41%) and text messaging (32%), according to The Consumer Trends Survey--conducted on behalf of Brookfield, Wis.-based Fiserv by The Marketing Workshop.

Roughly 40% of mobile banking users surveyed had paid a bill with their mobile phone in 2011, compared with 28% in 2010. About 32% transferred funds with the device last year, up from 25% the year before, said the report.

Other findings:

  • By mid-2012, nearly 40% of households surveyed will own a tablet. Currently 19% already own one, and another 20% expect to buy one. What's more, 37% of households that own one tablet are planning to buy a second one.
  • Forty-five percent of current and future U.S. tablet owners would like to use their tablet to access banking services. They said they want to: View monthly statements, 69%; pay bills, 56%; view real-time account information , 50%; and transfer money between accounts at the same financial institution, 49%.
  • Two out of three people surveyed indicated interest in using a downloadable app from their credit union or bank that would allow them to use their tablet for online banking and bill pay services.
  • Forty percent of mobile phone users surveyed said they would trust their credit union or bank to handle mobile payments, followed by PayPal at 35% and Visa at 33%.
  • In 2011, half of U.S. respondents who opened a money market account did so online--up from 16% in 2010. Of those who applied for a credit card, 42% did so online, compared with 31% in 2010. Similar increases were seen in first mortgages and car loans, said Fiserv.
  • Between January 2010 and July 2011, the number of U.S. online households that banked online rose by 9%. Those that paid bills at company websites rose 11%, and those that paid bills at financial institution websites also rose 11%. Online bill payments accounted for half of all bill payments, while checks accounted for 23% of the payments.
For the full report, entitled "Financial Services Continue the Digital Shift," use the resource link.

Michigan Firsts new scholarship attracts media attention

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LATHRUP VILLAGE, Mich. (2/29/12)--Michigan First CU's inaugural $10,000 college video scholarship contest has captured local media attention.

Participants in the scholarship contest are asked to submit a 60-second video answering the question: "What impact will your education have on where you will be in 10 years?"

The contest is offered as part of Lathrup Village, Mich.-based Michigan First's Young & Free Program.

Linda Douglas, Michigan First vice president of marketing, and Janelle O'Hara, the credit union's Young & Free spokesperson, were featured on WDIV television on Saturday morning promoting the contest.

Young & Free is a nationwide program designed to help credit unions connect with young adults using social media and Gen Y spokespeople.

"We understand that not everyone has the strongest essay writing skills," O'Hara said on the WDIV segment. "This offers a different medium for people who want to show their personalities in a scholarship competition."

Also, Monica Horger, Michigan First vice president of human resources, described the contest to listeners of the "Blaine & Allyson Radio Show" on 96.3 FM WDVD.

Horger appeared on the "Put You Back to Work" segment of Blaine and Allyson's show. In addition to describing the scholarship program, she said Michigan First CU has 10 job openings in several departments. Michigan First is adding 1,000 new members a month, creating the need for more employees, she said.

Current college students ages 18-25 and high school graduates planning to attend college in the fall are eligible to compete in the scholarship contest, which is offered through the credit union's Michigan First Foundation.

Beyond first prize, the foundation will award scholarships of $5,000 for second place, $2,500 for third place and an iPad 2 for the "People's Choice" winner of online voting.

"We began as a credit union for Detroit teachers, and we'll never forget that heritage or diminish our deep commitment to education," said Michael Poulos, Michigan First president/CEO. "This year, we've created the foundation to leverage our commitment to metro Detroit and expand our reach. Adding the college scholarship contest gives more students the encouragement and support to continue with higher education, paying dividends for the strength of our communities and to help build a better future for Michigan."

Garner selected as Catalyst Corporates new CEO

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PLANO, Texas (2/29/12)--Kathy Garner has been selected as the new president/CEO of Catalyst Corporate FCU, effective March 5, Catalyst's board of directors announced Tuesday.

Most recently, Garner served as executive vice president of member relations and business development at Catalyst.

She will replace Dianne Addington, who has served as the president/CEO at Catalyst Corporate since it was created in September 2011 from the combination of Georgia Corporate FCU and Southwest Bridge Corporate FCU. Addington had beens tapped by the National Credit Union Administration (NCUA)  to run Southwest Bridge when it was conserved prior to the formation of Catalyst.  Addington had long indicated her intent to return to retirement once Catalyst Corporate was on its feet and a new CEO was selected.

"I worked closely with Kathy Garner for almost 12 months at one of the most difficult times in the history of this organization," Addington said. "During her time with Southwest, Kathy helped in the development of the low-risk business plan and was instrumental in conducting the Town Hall meetings that led to the capitalization of Catalyst Corporate. She has always been a staunch supporter of Catalyst Corporate." 

As executive vice president at Catalyst Corporate, Garner was responsible for correspondent and payment services sales, communications and marketing, member services and the Northwest Regional office. She held that position since the merger of Northwest Corporate FCU with Southwest Corporate in December 2007. Prior to that merger, she was the president/CEO of Northwest Corporate from 1995 to 2007.

Garner worked for U.S. Central FCU from 1984 to 1995, primarily as a manager in the asset/liability department. Prior to that, she was the assistant manager of Corporate Central Credit Union of Utah for more than a year.

Garner has also served as past chair of CU Business Group LLC and Primary Financial Co. LLC, two credit union service organizations partially owned by Catalyst Corporate. She served on the Governmental Affairs Committee for the Credit Union Association of Oregon, and was a board member of the Oregon Credit Union Foundation, the Washington Credit Union Foundation, and the Western Payments Alliance (WesPay). Garner currently serves on the board of the North West Credit Union Foundation.

Lin Hodges, Catalyst Corporate chairman and president/CEO of Associated CU, Norcross, Ga., made the announcement.

Study CUs small banks need more sales efforts

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FORT ATKINSON, Wis. (2/29/12)--While credit unions traditionally pride themselves on superior member service, a more aggressive approach to sales by big banks is costing community financial institutions a chance to grab market share from major financial institutions, according to a new study.

In conducting the study, released jointly by IntelliShop and RateWatch, 120 auditors posed as new checking account prospects. They found that the large banks not only did a better job of assessing customer needs, they were much more proactive about "selling" the benefits of the bank and its services.

Credit unions traditionally train their member service representative to offer products and services based on long-term relationship building, rather than a "product-of-the-day" approach. But the recent backlash against Wall Street institutions provided community financial institutions a great opening to grow their customer base, said Chris Denove, IntelliShop's senior vice president of research and analytics.

The study found that account representatives at the local institutions were pleasant, but took a more laid-back approach when they answered questions and didn't bring up the institution's benefits on their own. For example, the study found that large banks were:

  • Four times more likely to try to find out about other types of banking relationships member/customers had at their current institution.
  • Nearly twice as likely to ask if the consumer wanted to actually "sign up today."
  • Nearly twice as likely to collect a prospect's contact information for follow up.
Smaller institutions, however, were more likely to hand prospects collateral material to take home and read, thereby requiring the customer to uncover the financial institution's benefits on their own.

The study also found that in addition to placing a greater emphasis on "selling," large banks also exhibited better "people skills." The mystery auditors reported:

  • Large banks were more likely to greet customers as they entered the bank.
  • Large banks were twice as likely to initiate conversation (small talk) unrelated to the transaction to build rapport with the prospect.
"The fact that the larger banks were more engaging at a personal level came as a surprise," said Rachelle Zorn, RateWatch general manager. "In the past, small banks have tended to do better in terms of customer satisfaction. It will be interesting to see if the larger banks begin carrying this service-oriented sales approach over to their existing clients."

System on way to 1 trillion assets CUNA tells IMonitorI

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WASHINGTON  (2/29/12)--The credit union system is nearing the $1 trillion total asset threshold, the Credit Union National Association (CUNA) said in an article about credit unions' and small banks' growth in The Christian Science Monitor.

Monday's  article, "Why credit unions and small businesses are beating out big banks," was written by Billy Parish, president of Solar Mosaic, a solar investment platform, and author of "Making Good: Finding Meaning, Money, and Community in a Changing World."  In it, he says that a "new economy is emerging, a kind of constructive capitalism that offers an exciting new model for American prosperity and a way out of the current economic morass."

The article notes that credit unions and community banks all over the country are growing their market share "and doing it in a way that benefits the communities they serve." It cited CUNA statistics about the number of new credit union accounts opened, and CUNA Chief Economist Bill Hampel said in the article the recent growth could cause the credit union system to have more than $1 trillion in total assets.

Investment banks still have important roles to play in the economy, but the nation can look to more community-based models for economy growth, and big banks may follow suit, the article said.

N.E. Marylands largest indoor venue named APGFCU Arena

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BEL AIR, Md. (2/29/12)--The largest indoor venue in northeastern Maryland will be named the APG Federal Credit Union Arena at Harford Community College.

The college and APGFCU jointly announced that naming rights were awarded in exchange for APGFCU's annual contribution of about $50,000 for the next 15 years. The contribution will be used for scholarships for college students as well as arena operations and programming.

Now under construction, the arena will seat 3,200 and will be the home for men's and women's basketball and women's volleyball. It also will host community and regional events, commencements, concerts, conferences and trade shows.

APGFCU's name and logo will appear on interior and exterior signage as well as the arena's floor, pillars and scoreboard. The credit union will also be recognized on arena advertising, posters, basketball and volleyball schedules, event programs and playbills.

The arena project is part of an expansion to the college's Susquehanna Center, which houses college athletics. A grand opening event will be scheduled during the 2012-13 academic year.

APGFCU's long-time partnership with Harford Community College previously included providing scholarships and supporting the Small Business Development Center.  The credit union has $874 million in assets.

International leadership program seeks candidates

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MADISON, Wis. (2/29/12)--Young credit union professionals can submit applications through March 30 for internships at Guatemala credit unions as part of the World Council of Credit Unions' (WOCCU) International Credit Union Leadership Program.

The WOCCU program will select 10 U.S. credit union professionals for internships that run June 10-23. The internships allow young credit union leaders to learn how Guatemalan credit unions reach underserved populations and support communities with member education and special projects.

Participants receive lodging from a host family, a meals stipend, local transportation, traveler's insurance and a limited communications stipend. The sponsoring U.S. credit union is expected to pay the airfare cost of $1,350.

Selection criteria include being age 40 or younger as of Sept. 1, 2011; active involvement as an employee or board member of a credit union or related organization; intermediate-to-advanced Spanish language skills; and the potential to advance the national or international credit union system through initiatives that also help the development of the participant's community.

The selection process includes an application form, an essay and a telephone or Web interview. For more information or to apply, use the link.

In the first phase of the program, 10 participants from Guatemala were chosen to intern at U.S. credit unions. The program is funded by a grant from the U.S. Department of State, Bureau of Educational and Cultural Affairs, Office of Citizen Exchanges, which is part of the larger U.S. Department of State Professional Fellows Program.

CU System briefs (02/28/2012)

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  • SUITLAND, Md. (2/29/12)--Andrews FCU joined with the Armed Forces Financial Network to donate $3,000 in gift cards and then donated an additional $3,000 in gift cards from the credit union to Joint Base Andrews Fisher House. Chris McDonald, left, Andrews FCU president/CEO,  presented the donation to Janet Grampp, Fisher House director; and Walt Serafin, Fisher House board president. Wounded soldiers and their families use Fisher House as a home away from home during medical treatment. The gift cards are used to pay for travel costs as well as the necessities of daily living  (Photo provided by Andrews FCU) …
  • RALEIGH, N.C. (2/29/12)--Students and parents in every county of North Carolina got help completing the Free Application for Federal Student Aid (FAFSA) on Feb. 18 through a partnership among State Employees' CU (SECU), the College Foundation of North Carolina and the North Carolina Association of Student Financial Aid Administrators. SECU opened its 240 branches statewide from 9 a.m. to noon for the FAFSA Day event, with employees and volunteers helping more than 2,100 students complete the FAFSA application that is required for college aid. Statewide, 4,700 FAFSA applications were completed. SECU employees also helped 3,700 high school students complete college applications during North Carolina College Applications Week last November …
  • LANSING, Mich. (2/29/12)--The Michigan Credit Union League (MCUL) & Affiliates recently hosted U.S. Rep. Bill Huizenga (R-Mich.), a member of the House Financial Services Committee, for a discussion of H.R. 1418, which would increase the member business lending (MBL) cap. Huizenga (left), met with MCUL President George Isola and MCUL CEO David Adams as well as other credit union leaders, who cited the importance of increasing access to capital for Michigan small businesses (Michigan Monitor Feb. 27). Huizenga is not currently a co-sponsor of the bill, which lists eight members of Michigan's congressional delegation among its 130 co-sponsors, said the league. The Credit Union National Association (CUNA) says that increasing the MBL limit to 27.5% of assets from the current 12.25% would help generate $13 billion for new small business loans and 140,000 new jobs, with no cost to the taxpayer.  H.R. 3993, which would give credit unions access to supplemental forms of capital, was also discussed. It would allow credit unions to raise capital from sources other than retained earnings, while maintaining their 'one member, one vote' principle and improving their safety and soundness, said CUNA . (Photo provided by the Michigan Credit Union League) ...
  • WOODBRIDGE, Va. (2/29/12)--Belvoir FCU offered a 10% annual percentage yield (APY) certificate to active duty military members for the second year as part of the Military Saves program from Feb. 21-25. More than 24 servicemen and women took advantage of the high-earning certificate offered by the Woodbridge, Va.-based Belvoir FCU as a way to thank active duty military for their service. Military Saves is part of the America Saves program and aims to encourage military families to build wealth by saving more and borrowing less. America Saves Week was Feb. 19-26  …

Ex-Chase exec Raphaelson cites CUs better fees

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CHICAGO (2/28/12)--Options, including credit unions, abound for consumers  with different banking needs, according to syndicated personal finance columnist Elliot Raphaelson, a retired Chase Bank vice president and author of two books on fiancial and retirement planning.

"Fortunately, we have many more options than we did even a few years ago, thanks to such innovations as online banking," he says in his "The Savings Game" column (Wisconsin State Journal Feb. 26).

While most of the options listed are banks, Raphaelson  devotes three paragraphs to credit unions in his column. He notes that "credit unions generally offer lower fees, lower loan rates, and higher interest rates on deposits than the competition. They are able to do this because, as nonprofits, they have a tax advantage over banks. Some credit unions provide various services by volunteers, which also gives them a competitive advantage."

"Although some credit unions have restrictions regarding membership, in most areas you will be able to find a credit union to join," he writes, noting that several years ago when he bought a new car, "I used a local credit union that offered the best rate."

He advises readers to go to the Credit Union National Association (CUNA)  and points readers to CUNA's website.

Use the link to read the full article.

We Dont Do Banks studies families on assistance

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MADISON, Wis. (2/28/12)--A new report from the Filene Research Institute paints a picture of low-income consumers' financial habits while illuminating the challenges and opportunities credit unions have in serving them.

Members of this group "especially feel the costs of accessing cash, which for many is their payment and savings vehicle of choice. Contrary to stereotypes, they seem wary of payday loans and even responsible short-term debt. And many of them devise elaborate savings mechanisms outside of traditional savings accounts," said Filene.

The brief makes several policy recommendations and spells out several lessons for credit unions designing products for cash-centric consumers like those profiled in the report. Lessons include:

  • Prepaid cards are seen as a substitute for a financial institution;
  • Interviewees prize predicable, transparent fees; and
  • Credit unions should offer transparent basic accounts.

CU members surveyed see improvement in economy

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RIVERWOODS, Ill. (21/28/12)--Credit union members were more optimistic about the economy and their personal finances in January than in December and more optimistic than non-members, according to the Discover U.S. Spending Monitor survey for January.

The respondents also were asked about their spending and saving expectations for next month. Here's the breakdown for members:  37.6% expect to spend more next month while 53% plan to spend the same and 8.4%, less.  Of those surveyed, 48.1% of members are expecting  to have less discretionary and entertainment expenses, 46% will spend less on household improvements; and 42.1% expect to spend less on major personal purchases.

More than one third (35.4%) of members surveyed said they would save or invest less money next month. That compares with 40.3% who said so in December.   Also, 12.9% said they would save more (compared with 8.7% last month); and 49.2% would save the same amount (compared with 47.3% the previous month).

The Discover U.S. Spending Monitor is a monthly index of consumer spending intentions and capacity based on interviews with a random sample of 8,200 U.S. adults, including about 2,500 credit union members. The surveys are conducted by Rasmussen Reports, an independent survey research firm. For the full findings, use the resource link.

Woman gets a day in prison in St. Paul Croatian fraud

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CLEVELAND, Ohio (2/28/12)--A federal court in Cleveland, Ohio, sentenced a woman to one day in prison for her role in a $2.5 million loan fraud ring that led to the collapse of Eastlake, Ohio-based St. Paul Croatian FCU--one of the largest credit union failures in history.

Ruth Cendol, 55, of Kirtland, Ohio, also was ordered by U.S. District Judge Christopher Boyko to pay restitution totaling $260,000 and was placed on three years of supervised release. She had pleaded guilty to one count of bank fraud. Court records alleged that Cendol was one several defendants who allowed illegal transfers to her loan account at the credit union (News-Herald Feb. 22).

More than 1,000 fraudulent loans totaling more than $70 million were allegedly made to 300 account holders from 2000 to 2010 (News Now Jan. 4).

The fraud scheme resulted in nine arrests, including two central figures in the ring:  Koljo Nikolovski, 49, of both Eastlake and Skopje, Macedonia, who pleaded guilty to 18 counts of bribery, bank fraud and money laundering; and Anthony Raguz, 51, of Mentor, former CEO of the defunct credit union, who pleaded guilty to  issuing the loans and accepting more than $500,000 in bribes, kickbacks and gifts from people obtaining the fraudulent loans. Raguz is scheduled for sentencing on June 11. Nikolovski's sentencing has been set for April 23.

The credit union was placed into conservatorship on April 23, 2010, and closed the following May 1. It held $238.8 million in funds from 5,400 members when it collapsed, costing the National Credit Union Share Insurance Fund $170 million. The collapse has prompted lawsuits by the National Credit Union Administration seeking to recoup some of the losses (News Now Jan. 4).

Court grants more time in NCUA v. Wachovia MBS lawsuit

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WICHITA, Kan. (2/28/12)--A federal judge Monday granted Wachovia Capital Markets an extension to file a response to the National Credit Union Administration's (NCUA) complaint in a lawsuit over residential mortgage-backed securities (RMBS) sold to corporate credit unions.

Wachovia has until April 4 to respond to NCUA's complaint in the U.S. District Court for the District of Kansas, Wichita. The consent order was signed by Magistrate Judge Kenneth G. Gale.

On Jan. 31 Judge Julie A. Robinson ordered the NCUA to show cause why NCUA's lawsuit against Wachovia Capital Markets LLC (now known as Wells Fargo Securities LLC)  over RMBS sold to corporate credit unions should not be dismissed for lack of prosecution (News Now Feb. 6).

NCUA filed a response to the show-cause order with the court Feb. 22 , in which NCUA said it served Wachovia within the timeframe allowed by federal rules and worked with the bank on an extension of times for a response to NCUA's complaint.

NCUA also said Wachovia's original deadline was well within the 120 days allowed for service process, with no undue delays or prejudice to Wachovia.

Wachovia and NCUA on Feb. 22 filed a mutual consent motion for extension of time for Wachovia to file a response to NCUA's complaint.

The lawsuit alleges that originators of the RMBS had systematically abandoned the stated underwriting guidelines, resulting in riskier RMBS that the corporates would not have bought, had they known, said NCUA.  Wachovia representatives sold about $100 million in RMBS to U.S. Central and WesCorp in 2006, and U.S. Central purchased approximately $80 million in RMBS underwritten by Wachovia, according to court documents (News Now Feb. 6).

NCUA placed U.S. Central and WesCorp into conservatorship on March 20, 2009. On Oct. 1, 2010, the corporates were placed into involuntary liquidation. NCUA is suing as the liquidating agency to recoup some of the losses.

Tower CU members OK merger with Connexus

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WAUSAU, Wis. (2/28/12)--Members of Tower CU, with $45 million in assets, on Sunday approved a merger with $410 million Connexus CU during a special meeting on Sunday.

Both credit unions are based in Wausau, Wis.

"Difficult economic times combined with new regulatory requirements and increased competition challenged us to evaluate our ability to serve our members as we would like," said Hal Osborn, Tower CU president. "A merger with Connexus CU will ensure that our members will receive the products and service to meet their every need now and in the future," he said.

The merger is expected to be completed later this spring.

Tower is the second Wausau-area credit union to announce merger plans with Connexus this month. Maple Hill CU, with $11 million in assets, approved its merger with Connexus on Feb. 16.

Big bank exodus good for smaller FIs J.D. Power

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WESTLAKE VILLAGE, Calif. (2/28/12)--In 2011, roughly 9.6% of large, regional and midsize bank customers defected  from those institutions, and credit unions and small banks were the beneficiaries, says new research  released Monday from J.D. Power and Associates.

The research firm's  "2012 U.S. Bank Customer Switching and Acquisition Study" noted that "consumer backlash against bank fees, coupled with poor service and unmet customer expectations, has fueled increases in defection rates among customers of large, regional and midsize banks."

"On the heels of 'Bank Transfer Day' on Nov. 5, 2011, the beneficiaries of the increased exodus from larger banks are primarily smaller banks and credit unions," J.D. Power said in its news release announcing the study results. The firm surveyed more than 5,000 customers who shopped for a new financial institution or new account during the past 12 months.

"Acquisition of new customers by smaller banks and credit unions has increased by 2.2 percentage points to an average of 10.3% in 2012 from 8.1% in 2011," said J.D. Power.

The report noted that the defection rate of customers at midsize to larger banks averaged between 10% and 11.3% last year, while small banks and credit unions lost only 0.9% on average, a significant decline from the defection rate the smaller institutions saw in 2010, said the firm.

The 9.6% of customers who said in 2012 that they had switched during the past year to a new provider is up from 8.7% who switched in 2011's study  and 7.7% in 2010's study.

About a third of customers at big banks reported fees as the reason they looked elsewhere. The report also indicated that many big-bank customers were already unhappy with the customer service there, so when fees were announced or raised, they had more incentive to switch.

"Regardless of bank size, more than one-half of all customers who said fees were the main reason to shop for another bank also indicated that their prior bank provided poor service," said Michael Beird, director of the banking services practice at J.D. Power and Associates.

J.D. Power also noted that consumers thinking about switching institutions should:

  • Shop around to compare terms and services;
  • Avoid being swayed by promotion gifts/cash alone.
  • Read account brochures and disclosures carefully, and ask questions.

Students are CUs first junior board of directors

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WHITEFISH, Mont. (2/28/12)--Whitefish (Mont.) CU, has selected its inaugural junior board of directors.

Four seniors and three juniors were selected by Whitefish High School to serve on the board. Junior board members will conduct their own board meetings, write articles for the credit union newsletter and implement a community service project, said Sue Schenck, Whitefish CU's business development director.

"One of the really important functions of a credit union, and also part of the credit union philosophy, is financial education," said Schenck. "This is a great way to get the credit union philosophy out there and hopefully have some fun with these students while we're doing it."

During their monthly meetings, the students will learn about the 77-year history of Whitefish CU and its place in the communities of northwest Montana. Guest speakers will teach junior board members about the grassroots movement that brought about credit unions in America and basic credit union philosophies.

Board members include:

  • Hailey Vasquez, senior, chair;
  • Abby Wagner, senior, vice chair;
  • Perrey Sobba, junior, board secretary;
  • Joseph Perry, senior;
  • Ally Pickeral, senior;
  • Kelsey McFeely, junior; and
  • Rachelle Brown, junior.
The junior board of directors will meet until the end of the school year.

Schenck said she and Whitefish CU "expect great things this year from these amazing students," and plan to continue the program again with another group of high schoolers in January.

CU System briefs (02/27/2012)

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  • SAN DIEGO (2/28/12)--A man dubbed by the Federal Bureau of Investigation (FBI) as "the well-dressed bandit" pleaded guilty on Feb. 21 to a string of holdups in San Diego area credit unions and banks (The San Diego Tribune Feb. 26). Anthony Pernelle Burgess, 30, of San Diego faces up to 20 years in prison at his sentencing, set for May 14. He pleaded guilty to three San Diego holdups in 2010 and four in 2011. One Carmel Valley bank was robbed three times, and a Solana Beach credit union was robbed twice …
  • ST. JOSEPH, Mich. (2/28/12)--Leaders from credit unions in the Greater Southwest Chapter in Michigan convened in St. Joseph, Mich., Feb. 22 with U.S. Rep. Fred Upton (R-Mich.) to discuss H.R. 3993, which would permit credit unions access to supplemental forms of capital. Participants pointed out that credit unions stand out as the only depository institutions in the U.S. without the ability to augment retained earnings to build capital. Two credit unions in Upton's district--United FCU and First Community FCU--merged failing institutions into their credit unions last year. The mergers, approved by the National Credit Union Administration, resulted in lower capital ratios at the acquiring institutions, said the Michigan Credit Union League (Michigan Monitor Feb. 27). The credit unions asked Upton to consider sponsoring HR 3993. Upton, second from left in the front row, said he appreciated the information and would take a closer look at the legislation. (Photo provided by the Michigan Credit Union League) …
  • DEWITT, Mich. (2/28/12)--Astera CU member Lee Preston, left, his son Mike Preston, and Sheila Mitchell, senior member service representative for Astera's DeWitt, Mich., branch, hold a check for the $100,000 Grand Prize Lee Preston won in Michigan credit unions' Save to Win program designed to encourage credit union members to save their money.  He was randomly selected in a computerized statewide drawing from more than 16,500 credit union members who deposited money into Save to Win accounts in 2011. Preston said he will use the money to help four grandchildren with college expenses. "You've taken a lot of worry off this old retiree," he told the credit union. He is retired from General Motors' former Fisher Body plant in Lansing. His advice for those who are not credit union members:  "I would say get involved in a credit union." As of Dec. 31, about 175 of Astera's members saved more than $300,000 at the credit union. Other Mid-Michigan area credit unions participating in the program reported these savings:  CASE CU, more than $678,725 saved by 261 members; CP FCU, more than $1.8 million saved by 731 members; EECU, more than $361,506 saved by 130 members; Lake Trust CU, more than $8 million saved by 1,821 members; and Portland FCU, more than $883,456 saved by 225 members. The program was launched in 2009 by the Michigan Credit Union League, the Filene Research Institute and the Doorways to Dreams Fund. The league also has a video of the event. (Photo provided by the Michigan Credit Union League) …
  • DEARBORN, Mich. (2/28/12)--Donald J. MacKinnon Jr., former CEO of what is now DFCU Financial in Dearborn, Mich., died Jan. 25, the Michigan Credit Union League has learned. MacKinnon was 93. He helped organize more than 100 credit unions and is a member of the Credit Union Hall of Fame in Washington. He was CEO of the then Dearborn FCU. Ken Bixby, who served as league president/CEO from 1982 to 1996, said he met MacKinnon in 1959 while Bixby was serving as an NCUA regional director. Bixby "was a hero of mine in the history of credit unions…and, a mentor in many ways even when we were in disagreement over what the law would permit." "Improved member service was at the forefront of any of his concepts," said Bixby (Michigan Monitor Feb. 27) …

One in five CUs abandon Twitter accounts study

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MADISON, Wis. (2/28/12)--Many credit unions are struggling to develop a following on Twitter, and about one in five credit unions surveyed have abandoned Twitter entirely, according to a new study released by the Financial Brand.

But the study also showed that many credit unions weren't very active in developing a following. The average credit union studied sent about one "tweet" every other day, or 0.6 tweets per day.

The Financial Brand analyzed 350 "activated" credit union Twitter accounts. The study's sample size represents over 5% of all U.S. credit unions, and a minimum of 10% of all those on Twitter.

Accounts were considered "activated" if the credit union's profile had been customized with an avatar/logo, at least one tweet had been sent through the account, and the account had at least one follower. For the study, any account that had not tweeted in the last three months was considered dormant or abandoned.

The study found that the more often a credit union tweets, the higher its growth rate of new followers. The top 20 credit unions sent an average of 1,486 tweets, or about 1.5 tweets per day. Credit unions with the fastest growth rate for followers--those adding at least two new followers daily--send an average of at least three tweets per 24-hour period.

The typical credit union using Twitter has 300 followers, adding about one new follower every two days, according to the study. That credit union follows 150 other Twitter accounts.

Most credit unions have activated their Twitter accounts since December 2009. The majority of tweets sent are one-directional, often with links back to a press release or similar credit union Web page. Very few @replies are sent by credit unions to other Twitter users.

Southern Oregon FCU, Grants Pass, Ore., topped the list of most followers with 10,242. The Golden  1 CU, Sacramento, Calif., was next with 4,002 followers. Southern Oregon FCU has $709 million in assets, and 71,660 members. It has one follower for every seven members, or one follower for every $69,000 in assets.

Of the 350 credit unions included in the study, 74 (21.1%) had abandoned their accounts. They created their accounts in late 2009, and sent about100 tweets before giving up.

Smaller credit unions abandoned Twitter more frequently than larger instituions. Of the 74 credit unions that gave up on Twitter, 47 (63%) had less than $200 million in assets. Only four (6%) of the 66 credit unions in the study with more than $1 billion in assets dropped out.

The study noted if consumers had any interest in connecting with financial institutions on Twitter, they'd have done it by now. "As a tool to keep tabs on other financial institutions, to connect with industry peers, and to spread press releases, Twitter can be very effective, no doubt. But Twitter's usefulness beyond that is highly disputable," the study concluded.

To view the study, use the link.

People with disabilities to staff CU branch

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ESSEXVILLE, Mich. (2/28/12)--FinancialEdge Community CU, Bay City, Mich., is building a new branch that will be staffed by people with disabilities.

FinancialEdge Community CU President/CEO Jeremy Coberley, left, and Do-All Inc. President/CEO Chris Girard prepare to begin building a branch staffed by people with disabilities. (Photo provided by Michigan Credit Union League)
The new branch represents the second phase of FinancialEdge's partnership with Do-All, a non-profit organization in Bay County, Mich. providing employment services and community opportunities for individuals with disabilities, said the Michigan Credit Union League (Michigan Monitor Feb. 27).

The credit union received a $5,000 grant from the Michigan Credit Union Foundation and $10,000 from the National Credit Union Foundation to help with the project.

Last fall, the credit union established a branch that is only open to Do-All trainees and staff at the nonprofit company's main facility in Bay City.

The newest branch--called Do-$ave--will be inside Do-All's largest store in the neighboring town of Essexville. The store will be open to the general public when it is completed in the fall.

The branch initially will be open one day per week, said Pam Swope, Financial Edge marketing manager. "We'll grow the hours as we need them," Swope said.

FinancialEdge has worked with trainees from Do-All for years, but the idea for the branches came from Do-All President/CEO Chris Girard, who was looking for new opportunities for the trainees employed by the company.

FinancialEdge President/CEO Jeremy Coberley said he hoped the partnership with Do All would serve as a model for similar projects at other credit unions.

The branch will offer most of Financial Edge's regular services, and will typically be staffed by two Do-All trainees along with one Do-All staff coach and a credit union representative, Swope said.

Survey Volunteering is up CUs show how its done

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WASHINGTON and MADISON, Wis. (2/27/12)--Voluntarism is alive in the U.S., with nearly 64.3 million people volunteering through or for an organization at least once from September 2010 to September 2011.  Since credit unions have voluntarism stamped in their DNA, it's likely that quite a few were from credit unions.

The volunteer rate rose a 0.5 percentage point--to 26.8%, or roughly 1.5 million more volunteers--in the year before September 2011, said statistics released Wednesday from the U.S. Bureau of Labor Statistics. The increase followed a decline of equal size during 2010, said the bureau, which collected the data through a supplement to the September 2011 Current Population Survey sponsored by the Corporation for National and Community Service. The increase was attributed to more full-time employees getting involved during the period.

Credit unions are well represented on the volunteer scene. For example, Shell FCU in Deer Park, Texas, reported more than 294 volunteers from the credit union donated 1,485 hours of personal time during 2011 and raised $15,785 in more than 50 sponsored events, said the Texas Credit Union League  (LoneStar Leaguer Feb. 24). Since the inception of the credit union's Furthering Community Unity Team in 2008, the team has raised $43,322 and donated 4,986 volunteer hours.

Another example is Oregon Community CU, Eugene, Ore., whose employees organized events to raise funds for local chapters of charities such as the American Cancer Society, United Way, Children's Miracle Network Hospitals and the American Red Cross. Overall, the credit union awarded $237,325 in scholarships and spent $176,500 in donations and sponsors for a total of $413,825 in 2011.  It gave more than $315,000 to non-profits and topped the Portland Business Journal's 2011 Corporate Philanthropy Awards.

During President's Day the credit union closed its offices so 230 employees could complete community service projects at nine different nonprofit organizations. They donated more than 600 volunteer hours.

"We just proved that you can do amazing things when you are a high performing team that has great expectations and believes in what you do. Being able to become a united group and devote an afternoon  to help change people's lives made a difference in our lives too," said CEO Mandy Jones.

Although credit unions have no trouble finding volunteers for their many charitable efforts among their staff and membership, they might be interested in the demographics of who is doing the volunteering for a religious, educational or other nonprofit organization.  According to the Bureau of Labor Statistics' U.S. Bureau of Statistic Report on Volunteering:

  • Roughly 29.6% of full-time workers volunteered, while 33.3% of part-time workers and 23.8% of unemployed workers did so.
  • Women continued to volunteer at a higher rate--29.9%, an increase from the previous year's 29.3%--than men. Roughly 23.5% of men volunteered, about the same as the previous year.
  • More married people (32.3%) volunteered than single people (21.5%), and people with children under age 18  (33.7%) volunteered more than those without children (24.1%).
  • Those with higher level of education were more likely to volunteer than those with lesser education.  Among people age 25 or older, 42.4%  with college degrees volunteered while 18.2% of high school only graduates and 9.8% of those with less than a high school diploma volunteer.
  • By age, the most likely to volunteer were ages 35-44 (at 31.8%) and ages 45-54 (at 30.6%). Least likely to volunteer: People in their early 20s (19.4%).
Volunteers spent a median 51 hours on volunteer activities during the period--ranging from a high of 96 hours for volunteers 65 or older to a low of 32 hours for 25- to 24-year olds.  Men tended to engage in general labor; coach, referee or supervise sports teams; or fundraise. Women were most likely to fundraise; participate in activities related to distributing food; or tutor/teach.

IAPI cites CUNA in market analysis

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NEW YORK (2/27/12)--A Credit Union National Association (CUNA) economist was quoted in an Associated Press article that analyzed the recent Dow Jones industrial average flirtation with the 13,000 level and other market volatility.

The article, "Dow flirts with 13,000 again but can't make it," by Christine Rexrode, AP business writer, discussed the factors that have made the market rise, such as good news on U.S. job gains, and the influences that send the market downward, such as the rising cost of oil and gasoline.

The article points out that the stock market has not settled into an identifiable trend. In the 35 completed trading days as of Wednesday, the Dow Jones Industrial Average rose on 20 days and fell on 15 days.

"On Tuesday the world is ending, on Wednesday the opposite happens, after two or three weeks we're right where we started because not much happened," Bill Hampel, CUNA chief economist, told the AP.

To read the article, use the link.

BizKid launches fifth season with help from CUs

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MADISON, Wis. (2/27/12)--Credit unions are continuing to back Biz Kid$ as the award-winning financial education program uses its fifth season to take a look at the economy, businesses that give back and how to make good financial choices.

A coalition of credit unions and credit union organizations underwrites the program, raising $10.4 million over the past six years to support its production, website and curriculum. The National Credit Union Foundation (NCUF) oversees fundraising, outreach and administration.

Launched in January, the 13-part fifth season resumes BizKid$' light-hearted approach to financial literacy with young hosts and comic sketches designed to appeal to kids from late elementary school through high school.

Episodes help viewers learn to identify businesses that are "green" and socially conscious; run a fundraiser; recognize media manipulation; choose a business structure; and become independent. The season ends with a profile of Beaverhead Ranch in Montana, which won a national contest to find America's favorite family business.

Every BizKid$ episode opens and closes with a narrator reminding viewers that "Production funding for BizKid$ is provided by America's Credit Unions, where people are worth more than money."

With the current season, Biz Kid$ tops 65 episodes, which means it can move into broadcast syndication. BizKid$ has been broadcast to more than 111 million households in all 50 states on more than 330 public television stations since its premiere in January 2008.

The NCUF offers starter kits to help teachers and parents tap BizKid$ for financial education. The free curriculum offered on the BizKid$ web site includes downloadable lesson plans, video segments and other resources.

NWCUA launches resources for CU4Kids fundraising

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FEDERAL WAY, Wash. (2/27/12)--The Northwest Credit Union Association has launched a website offering resources for credit unions raising funds for Credit Unions for Kids, the "charity of choice" for many credit unions nationwide.

The website shares ideas with credit unions staging events for each of the Northwest region's six Children's Miracle Network Hospitals. Also posted on the site are news release toolkits, a schedule of upcoming events and "champion stories " that chronicle services made available to young patients through the hospitals.

"We adopted the success model proven by so many contributing credit unions in Oregon and Washington, to establish a convenient one-stop resource center," said RoxAnne Kruger, association senior vice president. "A visit to the site gives our member-credit unions ideas for events and an opportunity to share their success stories."  

Credit Union For Kids began in 1986 when a group of Oregon and Southwest Washington credit unions began raising money to benefit sick children. Enthusiasm for the cause spread throughout the Northwest. A decade later, the model was adopted nationally, with more than $80 million contributed to 170 Children's Miracle Network Hospitals.

"One-hundred percent of every dollar donated is sent to the regional CMN Hospital," said Kasey Rockwell, NWCUA director of outreach programs. "Our new website gives credit unions go-to information from their peers who have a lot of experience making their fundraising ideas work."

To access the website, use the link.

Texas foundation disperses 237K in grants for 2011

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FARMERS BRANCH, Texas (2/27/12)--The Texas Credit Union Foundation followed the distribution of more than $237,285 in 2011 by awarding $73,400 in grants in the first quarter of 2012.

The 2011 grants were distributed statewide to support financial literacy initiatives, provide professional development for staff and volunteers through credit unions and chapters, offer Southwest CUNA Management School scholarships and create opportunities for credit union professionals to become development educators through the National Credit Union Foundation.

Grants made so far in 2012 include $7,500 in "Make the Difference" grants of up to $500 each to credit unions and partners to support financial education and highlight National Financial Literacy Month in April.

In addition, the Texas foundation is co-sponsoring the BizKid$ PBS education series on television station KERA with the Fort Worth Chapter of Credit Unions. The series combines on-air programming with curriculum and materials that can be used in classrooms.

ACUC offers 17 Discovery Sessions

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MADISON, Wis. (2/27/12)--The Credit Union National Association and CUNA Mutual Group announced speakers and topics for the Discovery Sessions at the 2012 America's Credit Union Conference, June 17-20, in San Diego.

"This year's Discovery Session speakers and topics address the most urgent issues facing credit unions," said Jeff Post, CUNA Mutual president/CEO. "We've found that credit union leaders really engage with the speakers and each other at these small, interactive sessions."

Additional speakers, session topics and programs will be announced in the weeks to come. For more information, use the link or follow @CUNAverse on Twitter.

Discovery speakers and sessions include:

  • Changing Trends in Executive Compensation: Presented by Scott Albraccio, sales specialist manager, executive benefits, CUNA Mutual Group. During the next five years, more than a quarter of all credit union CEOs will reach retirement age. Albraccio will show attendees how to prepare their credit union for building competitive executive retirement solutions to meet the evolving needs of top leadership.
  • Reaching Gen Y and Millennials with a Message They'll Actually Listen To: Presented by Josh Allison, founder and chief ideator, Think Café. This session presents a blueprint for creating relevant relationships with teens and young adults through smarter marketing, social relevance and strong values.
  • Don't Be an Idea Killer! The Future of Innovation at Your Organization: Presented byTasha Dahl, synergy leader, Affinity Plus FCU, St. Paul, Minn. The innovation and change needed to push the credit union movement into the next generation of financial services will not come from the usual small group of leaders. This session will explain why credit union leaders should give their employees complete control of innovation at their credit union.
  • Future of the Branch: Presented by George Hofheimer, chief research officer, Filene Research Institute. This session summarizes a Filene Research Institute colloquium on the future of the branch. Perspectives from academic thinkers, credit union executives, and branch design/building firms sketch the interplay of different branching priorities for different credit unions and memberships.
  • Effective Credit Card Program Management: Presented by Ondine Irving, founder, Card Analysis Solutions. This session covers effective portfolio analysis techniques, how to best control the expenses of a credit union's credit card program, and a review of alternative options for credit card processing.
  • Credit Union Sustainability: A Long Term Model for Success: Presented by Mike Higgins Jr., partner, Higgins & Associates. Higgins will explain a sustainability model that avoids the shortcomings of traditional measures and focuses on new drivers of longer-term value creation. He will demonstrate how the concepts can be applied to any credit union business model.
  • For Every Consumer Intention, There Should be an Equal and Opposite Credit Union Action: Presented by David Polet, Voice of Customer Program manager, CUNA Mutual Group. This interactive session will investigate how economic shifts beyond the Great Recession and housing crash will likely impact members' perceptions, attitudes and expectations of credit unions and other financial institutions and how this affects strategic initiatives concerning insurance and investment offerings.
  • "Tell Me We Aren't Doing That!": Presented by Denny Graham, president/CEO, FI-Strategies LLC. Graham will demonstrate how leading credit unions identify productivity enhancements from their own employees and how to build a stronger sales and service culture. The title is a quote from a CEO after looking at the results of a survey to his employees.
  • Innovation Technology: Redefining What IT Means for Credit Unions: Presented by Mark Sievewright, president, CU division, FiServ. Get a crash course in the primary innovations enabled by technology that will impact member acquisition and retention, and the delivery of financial services in the next three years. This session will cover the rapid evolution of "Mobiliti" and the likely impact of social business. Attendees also will get a glimpse of what online banking, new payment models and member-centric tactics and techniques will look like in the future.
  • Five Best Practices for Online Cross-Selling: Presented by Geoff Knapp, vice president, online banking and consumer insights, FiServ. This session will pinpoint five online retailer practices that can benefit credit unions and identify others that do not. Attendees will learn from consumer research and focus group findings how to successfully market online.
  • Align Your Team or Forever Fight the Steering Wheel: Neil Goldman, partner, GCS Consulting. Address the reality of the whirlwind of daily credit union life and discover new tools to create a cohesive, uniformly focused institution. Learn how to eliminate silo management and unify and focus teams for enhanced teamwork and employee engagement.
  • The Business Case for Employee Engagement: Presented by Randy Kohout, vice president, human resources, CUNA Mutual Group. Despite the volatile economy and high unemployment, a Towers Watson 2011 Survey found almost 60% of North American companies struggle to attract critical-skill employees. This presentation discusses how to align engagement programs with your business objectives, desired culture, total rewards strategy, and attraction and retention goals.
The ACUC also will feature five panels:

  • Digital Branding: Presented by Hofheimer and Katie Sollenberger, account manager, financial services vertical, Google. Mobile phones, ubiquitous internet, iPhone apps and social media are all rewiring the way consumers choose and interact with brands. This session summarizes a Filene Research Institute colloquium and presents insights on how to reach, strengthen, and sell to these markets.
  • 2012--The Year of Chip Technology: How to Eliminate Magnetic Stripe Card Fraud! Presented by Ann Davidson, consultant, risk management, CUNA Mutual Group; Leanne Phelps, senior vice president, card services, State Employees' C (SECU), Raleigh, N.C.; and Hap Huynh, Chip Center of Excellence, Visa. Attendees will learn about this chip technology and how it reduces card fraud risk. This session will retell a credit union story of how SECU incorporated chip technology successfully into its card program.
  • How to Thrive in Today's Economy: Presented by Bob Larson, financial support consultant, CUNA Mutual Group; Steve Behler, president/CEO, Kemba CU Inc., West Chester, Ohio; John Cassidy, president/CEO, Sierra Central. Attendees will participate in a dialogue with decision makers from credit unions who have consistently posted successful results in spite of challenging times. Credit union professionals will explore what these credit unions do to combat a troubling economy.
  • Working for Good: How Social Responsibility is Driving the Next Generation of Leaders: Presented by Brent Dixon, young adult advisor, Filene Research Institute; and a panel of Filene Research Institute Young Adult Group Members. In a groundbreaking research initiative, the Filene Research Institute and Net Impact partnered to examine how doing good motivates the millennial work force.
  • Superior Consumer Lenders during the Great Recession: Presented by

    Facilitator Patrick McElhenie, sales planner, CUNA Mutual Group; Garth Strand, CEO, Hutchinson (Kan.) CU; Joe Rossa, senior vice president, EECU, Jackson, Mich.; and another credit union panelist to be announced. Hear how three credit unions increased consumer lending portfolios by more than 5% each year during the Great Recession.
Conference information can be found by using the link below.

Federation beefs up growing investments program

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NEW YORK (2/27/12)--The National Federation of Community Development Credit Unions is beefing up its Community Development Investments Program with new hires to help manage more than $55 million in the program.

Doaman, who joined the federation in January, will manage the federation's portfolio of secondary capital investments and risk-shared deposits, conduct research on the products' performance and handle all investor compliance.

Lewis joined the federation in 2005 as a college intern while completing a business marketing degree at St. John's University.  She was a part-time program assistant for the CDCU Mortgage Center LLC, and in 2009 became a full-time program associate for the Community Development Investment Program and the mortgage center.

James joined the federation's Community Development Investment Program in late 2011 as a program associate, where she provided program support, including CDCU reporting and due diligence; the CDCU Mortgage Center LLC's  tax and insurance compliance, and several special projects.

A former research librarian for years, she also has served as director for a variety of programs and was a former board chairman of Hoffman LaRoche CU (now Proponent CU), Nutley, N.J.

Dirty Dozen tax scams released by IRS

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WASHINGTON (2/2712)--As credit unions help consumers with tax preparation under the Internal Revenue Services' Volunteer Income Tax Assistance (VITA) and Earned Income Tax Credit (EITC) programs, they will need to make their members aware of a new list of tax scams released last week by the IRS.

The VITA Program offers free tax help to people who make $50,000 or less and need assistance in preparing their own tax returns.

The EITC is refundable federal income tax credit for low- to moderate-income working individuals and families.

The IRS recently issued its annual Dirty Dozen ranking of tax scams so tax payers can protect themselves again schemes ranging from identity theft to return preparer fraud.

The Dirty Dozen tax scams for 2012 include:

  1. Identity theft. Responding to growing identity theft concerns, the IRS has focused on preventing, detecting and resolving identity theft cases. In addition to the law-enforcement crackdown, the IRS stepped up its internal reviews to spot false tax returns before tax refunds are issued. The agency also is working to help victims of the identity theft refund schemes.
  1. Phishing. Phishing is a scam typically carried out with the help of unsolicited email or a fake website that poses as a legitimate site to lure in potential victims and prompt them to provide valuable personal and financial information. Tell members to keep in mind the IRS does not initiate contact with taxpayers by e-mail to request personal or financial information.
  1. Return preparer fraud. Questionable return preparers have been known to skim off their clients' refunds, charge inflated fees for return preparation services and attract new clients by promising guaranteed or inflated refunds. Tell members to choose carefully when hiring a tax preparer.
  1. Hiding income offshore. While there are legitimate reasons for maintaining financial accounts abroad, reporting requirements must be met. U.S. taxpayers who maintain such accounts and do not comply with reporting and disclosure requirements are breaking the law and risk significant penalties and fines, and the possibility of criminal prosecution, said the IRS.
  1. "Free money" from the IRS and tax scams involving Social Security. Scammers prey on low-income individuals and the elderly. They build false hopes and charge people good money for bad advice. In the end, the victims discover their claims are rejected. Meanwhile, the promoters are long gone. Warn your members to remain vigilant.
  1. False/inflated income and expenses. Including income that was never earned, either as wages or as self-employment income to maximize refundable credits, is another popular scam, one that could have serious repercussions.
  1. False Form 1099 refund claims. In this ongoing scam, the perpetrator files a fake information return, such as a Form 1099 Original Issue Discount (OID), to justify a false refund claim on a corresponding tax return. Members should be advised not to fall prey to people who encourage them to claim deductions or credits to which they are not entitled. Nor should they willingly allow others to use their information to file false returns.
  1. Frivolous arguments. Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law, said the IRS.
  1. Falsely claiming zero wages. Filing a phony information return is an illegal way to lower the amount of taxes an individual owes. Members should resist participating in any variations of this scheme. Filing this type of return may result in a $5,000 penalty.
  1. Abuse of charitable organizations and deductions. IRS examiners continue to uncover the intentional abuse of charitable organizations, including arrangements that improperly shield income or assets from taxation and attempts by donors to maintain control over donated assets or the income from donated property. The IRS is investigating schemes that involve the donation of non-cash assets--including situations in which several organizations claim the full value of the same non-cash contribution.
  1. Disguised corporate ownership. Third parties are improperly used to request employer identification numbers and form corporations that obscure the true ownership of the business. These entities can be used to underreport income, claim fictitious deductions, avoid filing tax returns, participate in listed transactions and facilitate money laundering, and financial crimes.
  1. Misuse of trusts. IRS personnel have seen an increase in the improper use of private annuity trusts and foreign trusts to shift income and deduct personal expenses. As with other arrangements, urge members to seek the advice of a reputable professional before entering a trust arrangement.

Minnesota CUs showcase cooperative spirit

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ST. PAUL, Minn. (2/27/12)--Credit unions in Minnesota are not only creating awareness that they're a smarter financial choice but also furthering the mission of cooperatives and the People Helping People philosophy this year as part of the International Year of Cooperatives (IYC), said the Minnesota Credit Union Network (MnCUN).

Postal CU is a member of the Cooperative Network, which serves more than 600 member cooperatives in Minnesota and Wisconsin Postal President/CEO Russ Plunkett also serves as a board member of the Credit Union National Association's Cooperative Alliance Committee.  The network provides a powerful business and political resource, said the credit union. It also sponsors students' attendance at an annual Co-op Youth Leadership Conference, encouraging the younger generation to learn more about the cooperative model.

At SPIRE FCU, President/CEO Dan Stoltz said his credit union is an "involved supporter" of the cooperative sector. He pointed to his affiliation with several cooperative organizations, including the Cooperative Network Board and Cooperative Foundation Board. He served as chairman of the latter board.  SPIRE also offers a Visa card program through a partnership with four area grocery co-ops. The program offers special benefits to members and shares a portion of the proceeds with the participating co-ops. The card is co-branded with the grocer's logo.

Minnesota has roughly 1,000 cooperatives, including energy and agricultural co-ops.  As the IYC celebration continues, these organizations can explore more ways to create partnerships and share resources, said MnCUN.

At its Annual Meeting & Convention April 13-14, MnCUN will host a panel discussion featuring representatives from co-ops around the state who will address ways to get involved in the cooperative movement.

"Minnesota's cooperatives, including its many credit unions, offer a vast array of products, services and programs that help build the well-being of their members," said MnCUN President/CEO Mark Cummins. "Through their cooperative structure, credit unions and all cooperatives give consumers a better chance."

The United Nations designated 2012 as IYC. Cooperatives have more than one billion members across 96 countries, reports the Worldwatch Institute in its Vital Signs Online publication. In 2008, the world's 300 largest co-ops generated revenues of more than $1.6 trillion. In the financial sector, a World Bank report found that credit union branches account for 23% of bank branches worldwide and serve 870 million people, making them the second-largest financial services network in the world (CPI Financial Feb. 23).

Wright-Patt near 1B mark on home loans since 2009

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FAIRBORN, Ohio (2/24/12)--Wright-Patt CU helped more than 2,500 members  in the Dayton, Ohio, area with more than $300 million in financing for homes last year. That means it has loaned nearly $1 billion to members since 2009.

The $2 billion asset, Fairborn, Ohio-based Wright-Patt  said that the Dayton Business Journal reported the credit union now ranks third in total home loan market share in the Dayton metropolitan area.

In addition to its own mortgage production, the credit union generated another $600 million in mortgage loans for credit unions across the country during 2011 through its wholly owned subsidiary, myCUmortgage.  During the past three years, the credit union has added 22 employees to its mortgage division, which now employs 70 people.

"Homeownership is the best way to build wealth and strong communities," said Tim Mislansky, chief lending officer at Wright-Patt CU.

Although the economic downturn has been longer than expected, Wright-Patt has seen first-hand that homes are being bought and sold. Low housing prices and historically low interest rates continue to motivate people to buy a home or refinance, Mislansky said. "As history suggests, when the economy makes consistent upward progress, home prices will increase, but the fluctuations in home values we've experienced still remain a top challenge for sellers and buyers, as well as homeowners refinancing," he added.

"Our members appreciate that we work with them to determine a solution that's in their best interest because of these uncertainties," Mislansky said. He noted that the credit union's delinquency, loan losses and foreclosure activity have remained at less than half the averages for Ohio and about one-third of national averages.  "These results show that the credit union not only helps people buy homes, we help people maintain their home ownership as well."

One way the credit union encourages homeownership is through its Savings Race, in which five teams compete for a $10,000 top prize toward the purchase of a home. It also provides free home ownership classes to the general public.

Louisiana governor reappoints FI commissioner

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HARAHAN, La. (2/24/12)--Louisiana Gov. Bobby Jindal has reappointed John Ducrest as the Louisiana Commissioner of Financial Institutions, according to the Louisiana Credit Union League (eNews Feb. 22).

The commissioner has supervisory and regulatory authority over state-chartered financial institutions, including credit unions. The position is subject to state Senate confirmation.

Ducrest has served in the commissioner position since 2004, said the league. He was deputy chief examiner of the Office of Financial Institutions from 1994 to 2004, overseeing the corporate applications related to chartering new banks, bank mergers and bank branching. He also serves as chairman of the Conference of State Bank Supervisors.

N.J. CU a member resource during America Saves Week

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MADISON, Wis. (2/24/12)--As the national campaign America Saves Week winds down Sunday, credit unions are among those educating consumers about the importance of saving.  A credit union in New Jersey is just one example.

America Saves Week, which began last Sunday,  is dedicated to providing information, advice and encouragement through this year's motto: "Set Goals, Make a Plan, Save Automatically." 

In Tinton Falls, N.J., United Teletech Financial (UTF)  FCU  joined in the efforts of the nationwide campaign through its state extension, called New Jersey Saves Week, according to the New Jersey Credit Union League (The Daily Exchange Feb. 21).

UTF FCU says the goals of the campaign coincide with its mission to help people prosper. "We are here to help our members achieve financial security," said Leo R. Ardine, president/CEO of UTF. "Whether it's through affordable loans or working toward building  savings for whatever their wants or needs are, we can provide the help, information and support to reach those goals," he told the league.

"We want to be a resource for not only our members, but to our community. Getting on the right path to financial security can be a daunting task, which is why we're here to help lead the way," Ardine said. He pointed out the credit union had a "highly qualified team of financial coaches available" to work with members on their individual savings plan.

America Saves Week is coordinated by Consumer Federation of America in partnership with the American Savings Education Council and America Saves. Other efforts during the week include Military Saves Week for members of the military and their families, and Hispanic Saves Week as well as state level efforts.

On Feb. 16, National Credit Union Administration Chairman Debbie Matz encouraged credit unions to participate in the America Saves Week/Military Saves Week activities, saying that the week gives credit unions new opportunities to kick-start their savings promotions and financial education programs.  The Credit Union National Association (CUNA) supports the goals of the week, and America Saves Week was one of the topics discussed on CUNA's Home and Family Finance Radio Feb. 19 broadcast.

Gap in mobile services in large small FIs Study

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SAN FRANCISCO (2/24/12)--More than 50% of consumers will become mobile bankers by 2016, but will they use credit unions for their mobile banking needs?  One research group says there's a gap in mobile banking adoption rates between smaller institutions, such as credit unions and community banks, and the large banks.

Only 15% of consumers at credit unions and 21% of consumers at regional and community banks used mobile banking in the 90 days preceding a survey conducted by San Francisco-based Javelin Strategy & Research. That compares with 37% of consumers  at giant banks who used the devices.

Fueled by smartphone adoption, mobile banking took off last year, growing by 63%, said Javelin. The explosion in use of tablets such as iPad likely will transfer mobile banking again, and smaller financial institutions (FIs) will continue to fall behind, the research firm said.

Javelin noted that 92% of the top 25 banks now offer mobile banking, which means credit unions and smaller banks risk losing valuable customers--especially smartphone and tablet customers--to these institutions.

"The key challenge for FIs is attracting the right demographics," said Mary Monahan, executive vice president and research director, mobile at Javelin. "The typical mobile banking customer is young (ages 18 through 44), ethnic (typically Asian, Latino or African American)  and high income (earning more than $75,000).  Customers at regional and community banks and credit unions are significantly older, less wealthy, Caucasian and less tech-savvy," she added. "FIs must broaden their services, appeal to a wider range of demographics and attract new clients if they want to succeed."

Other findings:

  • Mobile is now the top communication channel. Mobile usage is surpassing online usage.
  • Consumers' use of mobile banking rose dramatically in 2011. Roughly 57 million U.S. adults conducted mobile banking in 2011--a 63% hike over 2010.
  • Consumers use an assortment of channels for mobile banking. Most continue to access their mobile banking accounts through the browser, a financial habit established through online banking. At the nation's largest banks, where the triple play--mobile banking through browsers, apps and SMS text--is offered, this tendency flips.  There, more customers use apps and SMS than browsers.
"Smaller banks and credit unions have always prided themselves on providing superior customer service, so they cannot continue to ignore the mobile channel," said Javelin President Jim Van Dyke.

"Resource-constrained institutions should focus initially on the browser method, currently used by a majority of mobile consumers. It is the most cost-effective and easiest to deploy. However, these FIs need to focus future efforts on developing app and SMS text banking to appeal to a broader array of users and technology," Van Dyke concluded.

League Include CUs in Ohio ag-linked deposit bill

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COLUMBUS, Ohio (2/24/12)--John Kozlowski, general counsel for the Ohio Credit Union League, testified against an Ohio Senate bill last week regarding the state's Agricultural Linked Deposit Program, because it failed to include credit unions in its expanded list of eligible participants.

Credit unions should be included as lenders in the linked deposit programs, Kozlowski argued (eLumination Newsletter Feb. 22).

"While [the Ohio Credit Union League] realizes there is a greater issue regarding public funds than what is contained in Senate Bill 281, I can tell this committee with certainty that many banks do not fully participate in linked deposit programs such as those contained in SB 281, and credit unions would gladly participate in programs such as Ag-LINK for the benefit of their communities," Kozlowski said.

"By continuing to maintain the mandate that prohibits credit unions from serving their communities in this capacity, Ohio, its citizens, and its businesses are missing important development opportunities," he added.

State Sen. Michael Skindell (D-Lakewood), ranking minority member on the state Senate Financial Institutions Committee, spoke in favor of credit unions during the hearing and agreed they should be included, the league said.

Consumers hanging onto cars fewer loans for CUs

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SOUTHFIELD, Mich. (2/24/12)--Credit unions could experience reduced auto loan demand as study by the firm R.L. Polk indicates American consumers are holding onto their cars and trucks longer than ever.

In the third quarter of 2011, the average length of ownership of vehicles purchased new rose to a record 71 months. Retention of vehicles bought used climbed to an all-time high of 50 months.

The average age of vehicles on the road is also on the rise, hitting a record of 10.8 years as of July, Polk said.

For credit unions that means there are fewer new cars and few used-cars on the market for financing.

Even though credit has eased in recent months, consumers may be hesitant to invest in vehicles while the job market remains weak and unemployment levels stay high, Polk said. Many consumers have financed their vehicles for longer time periods to create less expensive monthly payments, leading to longer ownership cycles.

Cars and trucks are also more durable than in the past, according to automotive agencies.

Over the next few years, new U.S. light vehicle sales will continue to trend upward slowly, reaching pre-downturn levels of 16 million by 2015, Polk projects. As the economy improves, pent-up demand for new vehicles will increase, Polk said.

However, average length of ownership will not immediately decline, Polk said. With unemployment still high and many consumers continuing to feel the effects of a long economic downturn, the trend of longer length of ownership likely will continue for at least the next few years.

Longer length of ownership has resulted in a lower used-vehicle supply, Polk said. The inventory of used vehicles and a declining supply of off-lease vehicles have allowed dealers to charge more for used cars. With the trend of increased vehicle retention expected to continue in the near future, used-vehicle sellers will benefit from higher prices for their top-line vehicles, Polk said.

Auto loan trends at credit unions reflect these trends. Growth rates for new-vehicle loans at credit unions declined 1.5% in the third quarter, according to the Credit Union National Association's U.S. Credit Union Profile Quarterly Results. In the second quarter, the new-vehicle growth rate declined 1.8%. Growth rates for used auto loans increased 2.2% in the third quarter after rising 2.3%.

New-auto loans accounted for 10.1% of credit union loan balances in December 2011, a decrease from 11% in December 2010, according to CUNA's December 2011 Monthly Credit Union Estimates. Auto loans accounted for 18.6% of loan balances in December, compared with 17.8 in December 2010.

New customer rankings CUs only FI rated excellent

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WABAN, Mass. (2/24/12)--Credit unions were the only financial institutions to receive "excellent" ratings in the Temkin Experience Ratings, which ranks the customer service across 18 industries. Credit unions ranked third across all industries.

For the purposes of the report, published by the Temkin Group, credit unions were rated as a single financial institution.

The research, which is based on a survey of 10,000 U.S. consumers in January, includes 16 financial institutions. Four banks earned "good" ratings: PNC, TD Bank, USAA, and ING Direct. Eight banks received "okay" ratings, while three banks received "poor" ratings: Citibank, Bank of America and HSBC.

The banking industry received the fifth-highest average customer experience rating, falling behind grocery chains, fast food restaurants, retailers and parcel delivery services.

Compared with 2011, financial institutions increased their ratings by three percentage points, an improvement that was outdone only by insurance carriers and personal computer makers. Thirteen of the 16 banks improved their customer experience ratings between 2011 and 2012.

"Banks made some strides to improve customer experience this past year, but some big banks continue to fall behind," said Bruce Temkin, author of the report and managing partner of Temkin Group.

To see the full report, use the link.

Global womens network offers scholarships

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MADISON, Wis. (2/24/12)--The Global Women's Leadership Network, a World Council of Credit Unions (WOCCU) initiative that addresses the contributions and needs of women credit union leaders worldwide, is offering scholarships to support education and networking opportunities.

Success Swanzi Mbiliyawaka (right), recipient of a Global Women's Leadership Network scholarship, talks with Harriet May, chair of the Credit Union National Association board of directors, at the 2011 Global Women's Leadership Forum in Glasgow, Scotland, last July. (Photo provided by the World Council of Credit Unions)
Success Swanzi Mbiliyawaka, business development coordinator with the Malawi Union of Savings & Credit Co-operatives (MUSCCO), knows that professional progress is best made through the support of friends and a strong network of peers. Raise that network to a global level, she said, and there is no limit to what can be done. Mbiliyakawa raised the stakes on her professional success because of a 2011 scholarship from the network. or (608) 395-2027.

Mass. league presents 125k to homeless coalition(1)

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MARLBORUGH, Mass. (2/24/12)--The Massachusetts Credit Union League has made a $125,000 donation to Massachusetts Coalition for the Homeless, representing contributions from the league's member credit unions in 2011.

The largest individual contribution came from Medical Area FCU, Brookline, Mass., which raised $24,000 by the "Walk Home" fundraiser.

Hanscom FCU, Hanscom Air Force Base, raised $10,000 from an employee raffle along with various other fundraising efforts.

The league also presented its Paul J. Marotta Outstanding Service Award to Nicole James, president/CEO of the Medical Area FCU.

In presenting the award, Bernie Winne, league chairman and president/CEO of Boston Firefighters CU, Dorchester, Mass., cited James' efforts in raising funds for the Massachusetts Coalition for the Homeless.

Two Nevada CUs announce merger

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RENO, Nev. (2/24/12)--Two northern Nevada-based credit unions, Great Basin FCU in Reno and Sparks (Nev.) City Employees FCU, have announced plans to merge.

The boards of directors for both organizations have approved the merger and will seek approval from the National Credit Union Administration (NCUA). Subsequent to NCUA authorization, Sparks City Employees FCU members will vote on the merger. Great Basin would be the continuing credit union.

The combining of the two credit unions will result in a financial cooperative serving more than 16,400 members in the Reno-Sparks metropolitan area and surrounding Washoe County. It will have assets exceeding $116 million.

The three employees of Sparks City EFCU will continue employment with Great Basin. The credit unions share similar values that emphasize focusing on local relationships. Those values were key factors in both credit unions' decisions.

Sparks City Employees FCU was established in 1958, and has $13.3 million in assets, more than 1,900 members, and one branch. Great Basin FCU was established in 1951, and has more than $100 million in assets, more than 14,500 members and three branches.

Great Basin FCU serves Washoe County.

Mass. league presents 125k to homeless coalition

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MARLBORUGH, Mass. (2/24/12)--The Massachusetts Credit Union League has made a $125,000 donation to Massachusetts Coalition for the Homeless, representing contributions from the league's member credit unions in 2011.

The largest individual contribution came from Medical Area FCU, Brookline, Mass., which raised $24,000 by the "Walk Home" fundraiser.

Hanscom FCU, Hanscom Air Force Base, raised $10,000 from an employee raffle along with various other fundraising efforts.

The league also presented its Paul J. Marotta Outstanding Service Award to Nicole James, president/CEO of the Medical Area FCU.

In presenting the award, Bernie Winne, league chairman and president/CEO of Boston Firefighters CU, Dorchester, Mass., cited James' efforts in raising funds for the Massachusetts Coalition for the Homeless.

CU System briefs (02/23/2012)

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  • TUMWATER, Wash. (2/24/12)--O Bee CU's new gold Visa credit card with a beer logo represents a return to the Tumwater, Wash.-based credit union's roots. The image is an Olympia beer logo, with horseshoe, Tumwater Falls, the expression "good luck" and classic "Olympia" lettering. The credit union was established in 1955 as Olympia Brewery Co. Employees and Families CU. The brewery closed in 2003. The credit union negotiated with Pabst Blue Ribbon to use the Olympia brand on its card. The new card logo is identical with the original with one exception: Visa would not permit it to use the slogan "It's the water."  The new card offers 1% cash back with no limits on most purchases, said the credit union (The Olympian Feb. 22) …
  • RANCHO CUCAMONGA, Calif. (2/24/12)--Live testing of the CO-OP NextGen ATM is underway at the CO-OP Financial Services headquarters lobby in Rancho Cucamonga, Calif. CO-OP expects the service to be generally available by the end of second quarter. Project leaders inaugurating the process are, from left, Terry Pierce, senior product manager; Eric Porter, executive vice president, business development and marketing; and Dr. Kathy Herziger-Snider, vice president, product development. CO-OP and Diebold Inc. are partners on the development of the new application software, which will allow members of participating shared-branching credit unions to conduct nearly all branch transactions at a Diebold ATM. Diebold is a CUNA Strategic Services provider.  (Photo provided by CO-OP Financial Services) …
  • HIGHTSTOWN, N.J. (2/24/12)--New Jersey credit unions, interns and representatives from the disability community were hosted by the National Federation of Community Development Credit Unions at a luncheon at the New Jersey Credit Union League's office Wednesday. The purpose was to discuss their experiences with Cycle VII of the two-year old Building Economic Strength Together (BEST) internship program, which places internships for people with disabilities. Seven credit unions are participating in the program. Accepting certificates of appreciation for their involvement in the program were, from left, Angel Santos, NJCUL; Rosanna Rever, First Jersey FCU; Jen Seder, Healthcare Employees FCU; Shirley Spruill, Renaissance Community Development CU; Michelle Fitzpatrick, North Jersey FCU; and Mike Cirillo, Affinity FCU. Mark Lynch, National Credit Union Foundation's REAL Solutions, accepted a certificate earlier for its support of the program. (Photo provided by the New Jersey Credit Union League) …
  • RALEIGH, N.C. (2/24/12)--A change made by State Employees' CU, Raleigh, N.C., in how some charities convert their donated coins has benefitted the local non-profits. SECU allows these groups to use its no-fee coin sorters, which have been in place since 2005 in each of its 240 branches. To date, SECU machines have sorted more than $1 million in coins, saving these groups roughly $75,000 in fees.  SECU's coin sorters feature a FAT CAT theme to highlight its youth program, which encourages saving at an early age.  However, sorters are popular with all ages …

Identity fraud rose in 2011 says new report

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CHANTILLY, Va. (2/23/12)--The number of identity fraud incidents increased 13% in 2011 to a total 11.6 million adult victims, according to a new survey.

The 2012 Javelin Strategy & Research Identity Fraud Report also found that some social media behaviors and the increasing number of data breach incidents contributed to the rise of identity theft  in the U.S. The study was co-sponsored for the fourth year by Intersections Inc. a consumer and corporate identity theft risk management service.

The study underlines the effects that consumer awareness programs by financial institutions such as credit unions and others had in mitigating some of the impact of the identity fraud.

Other findings:

  • Fraud incidents rose. Victims of a data breach were 9.5 times more likely to be a victim of identity fraud.  Data breach victims  increased 67% in 2011, and the increase correlates with the increase in identity fraud victims.
  • Costs of losses stayed steady. Although the number of victims increased, the total dollar amount tied to their losses remained steady in 2011. The report attributed this to more stringent authentication practices by financial institutions and increased consumer-awareness efforts by financial institutions and government.
  • Detection advanced. Electronic monitoring of accounts through the Internet, ATM or other electronic means is leading the way of detecting fraud over reviewing paper records. About 54% of victims in 2011 were notified they had been a victim of an identity theft by their financial institution, law enforcement and other authorities.
  • Social media contributed to the rise.  Consumers who actively engage with social media and use a smartphone had a disproportionate rate of identity fraud when compared with consumers who do not use these media.
The findings in this year's study indicate that fraudsters are taking advantage of consumers' increased use of social networks and hacking into large businesses where many identities are housed in a single place. Consumers must remain consistent and committed to protecting their identity, said Intersections.  Credit unions can help by advising their members to:

  • Protect their information.  Exposing common information such as birthdates and addresses puts consumers at a greater risk because financial institutions commonly use these as security questions and validation of identity to access accounts. Even seemingly harmless information could be of value to experienced ID thieves.
  • Be social, but smart.  Knowing that social networks are a hotbed for identity fraud, members should take extra care when deciding who to "connect" with and what applications to accept. Users who approve "friend" requests from strangers or who use global positioning systems (GPS)/location-based applications are far more susceptible to fraud.
  • Take caution with mobile computing. Online and mobile banking are convenient, so they are here to stay. Consumers must take the extra step of ensuring their network connection is secure and their devices have updated security.
  • Be active in detection.  Consumers must take responsibility of protecting their identities into their own hands and enroll in comprehensive identity protection services.
  • Act quickly.  The sooner a victim learns of the fraud, the sooner they can recover from. It. Consumers should remain alert, act quickly if they notice suspicious activity, and report the activity to their credit union or other financial institution, and to law enforcement.

Church sues NCUA about St. Paul Croatian FCU

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CLEVELAND, Ohio (2/23/12)--An Ohio church filed a motion Feb. 16 in a federal court seeking documents that it says were withheld by the National Credit Union Administration (NCUA) in the church's lawsuit against the agency over the church's losses when St. Paul Croatian FCU, Eastlake, Ohio, collapsed in 2010.

The church, Holy Love Ministries, based in North Ridgeville, Ohio, had filed the lawsuit in the U.S. District Court for the Northern District of Ohio Eastern Division against NCUA on June 17.  At the time the credit union was liquidated by NCUA on April 20, 2010, the church had two joint accounts totaling $1.7 million with multiple co-signers on the accounts but received only the $250,000 insurance payment available to single accounts, according to the church's complaint.

It is suing to recoup the $1.5 million remaining or at least a second $250,000 payment because the two accounts were joint accounts, according to court document.

The complaint said that several days before the credit union's collapse, a church representative tried to withdraw funds from the accounts but was told not to by NCUA. As a result, said the court document, the church's two-year $12 million building project was endangered and "the loss has rendered Holy Love's situation desperate."  The church was also denied a "hardship" exception to the $250,000 insurance limit, said the court documents.

In the motion to allow discovery filed with the court on Feb. 16, Holy Love said NCUA had not produced documents the church needed to proceed with its case and prove it could "demonstrate significant bad faith and improper behavior" by  the agency.

It cited as "fraudulent" behavior, the agency's refusal to allow a church representative to withdraw funds several days before the involuntary liquidation even though agency representatives knew about the pending conservatorship, said the motion filed. The church also alleged in the document that the agency failed to call the church, as it had done with several other members, to allow it to restructure accounts with balances over $250,000 so it could obtain more insurance coverage.

NCUA's National Credit Union Share Insurance Fund lost $170 million when the credit union collapsed due to fraudulent activities of its leaders. It was one of the largest credit union failures in history.

Judge splits card customization patent case for CUs

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WILMINGTON, Del. (2/23/12)--A U.S. District Court in Wilmington, Del., has ordered a patent infringement lawsuit brought by a London and New York company against two groups--including credit union service organizations (CUSOs) and credit unions--split and transferred to more appropriate jurisdictions in Iowa and Colorado.

The company suing, Serverside Group, alleges that two groups have products for computerizing card production equipment that infringe on two patents held by the company. The patents describe an invention of "computerized financial transaction card production equipment operable to apply one or more personalized images to a financial transaction card" and the method for applying it over the internet, according to court documents.  The products addressed in the suit include MyPhotoCard, Picture My Card, Design Your Own Card, CreataCard and Cre8 My Card.

One group of six, called the CPI card group, consists of CPI Card Group-Colorado Inc.; CPI Card Group-Minnesota Inc.;  The Members Group Inc., Iowa; Neighbors CU, Missouri; PSCU Financial Services Inc. , Florida; and Anheuser Busch Employees CU, Missouri.  Their products at issue include MyPhotoCard or Design Your Own Card.

The second group sued is Tactical 8 Technologies LLC and Bank Iowa Corp., both based in Iowa. Both groups market the products to credit unions and other financial institutions, the court documents said.

In his order, U.S. District Judge Richard G. Andrews Saturday ordered that claims asserted  against Tactical 8 Technologies LLC and Bank Iowa Corp. be transferred to the U.S. District Court for the Northern District of Iowa.

He also ordered a March 2 telephone status conference with the other group to determine whether the case will be transferred to the U.S. District Court in Colorado, the state where CPI Card Group-Colorado is headquartered. CPI Card Group-Minnesota, is a Delaware corporation with its principal place of business in Minnesota, which means Delaware would have personal jurisdiction in its case.

Andrews noted in the order that there was no act committed in Delaware that would bring the case under its jurisdiction. "Absent from any of the many exhibits provided by the plaintiffs is any evidence of the sale of a platform by any of the defendants to anyone in Delaware, or any evidence of an offer to sell a platform to anyone in Delaware (or, indeed, to anyone anywhere," said Andrews.

"It is apparent that the plaintiffs scoured the Internet looking for evidence to support personal jurisdiction over the CPI group," Andrews said.  However, he said the absence of evidence is "fairly compelling that the CPI platform technology has not been sold to any Delaware financial institution."

The ruling was on the jurisdiction, not the merits of the infringement claims themselves, said Serverside.

Student-run branches a cornerstone at Michigan CU

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PLYMOUTH, Mich. (2/23/12)--Credit unions nationwide with student-run branches bring the benefits of credit union membership and financial education to today's youth.

Community Financial CU, with $477 million in assets, Plymouth, Mich., is among many Michigan credit unions that take the extra step with their student-run branches in making a commitment to their communities and local school districts.

Community Financial CU, Plymouth, Mich., demonstrates its commitment to youth financial education with 35 student branches. Here, a student volunteer counts change. (Photo provided by Community Financial CU)
Michigan credit unions led the nation--by far--with 58 credit unions fielding 370 student credit unions as of 2010, according the CUNA Center for Personal Finance. The next closest state, Wisconsin, had 86 total student branches.

Community Financial, located in the suburban Detroit, with additional branches in Michigan's lower peninsula, has 35 student-run branches, including 23 elementary branches, eight middle school branches and four high school branches.

The credit union has more elementary than middle and high school branches because the school districts served by the credit union are set up in a tier with more elementary schools feeding into fewer middle schools and ultimately one or two high schools, said Natalie McLaughlin, Community Financial senior education partnership coordinator, said.

Community Financial has offered student branches since 1990. Typically, it adds one or two new student branches each year.

McLaughlin said the credit union has 1,838 members through its student-run branches. In the last academic year, 1,483 students participated as volunteers to run the credit unions.

The credit union's presence in local school systems is a strategic initiative set by the credit union's board, and a reflection of its community charter, McLaughlin said.

"Education has been a strategic cornerstone for our board of directors," McLaughlin said. "As [board members] looked at the credit union's initiatives and thought about what the credit union should represent within the community, they identified education as a priority. They said, 'This is one of the ways we are going to give back to the community, by educating our children.'"

Community Financial dedicates considerable resources to meet that priority. Three part-time and two full-time employees help operate the student branches as education partnership coordinators.

Elementary and middle school branches are open roughly twice a month. High school branches are open about once a week, McLaughlin said. A Community Financial CU partnership coordinator works at each student run branch during the time it is open. The coordinators bring cash to the schools, help with transactions, and use a laptop computer to log into the credit union's mainframe system.

The student branch process begins each fall with a school assembly that includes a financial education element. Students who are interested in working for the student branch fill out job applications and take part in one-on-one job interviews.

McLaughlin and her team also educate the students on preparing for interviews and conducting themselves appropriately during the interview process and while representing the credit union. "Career preparation is part of our education curriculum," McLaughlin said.

Students can hold the role of branch managers, tellers, bookkeepers, computer operators and marketing representatives.

The student-run branches are part of a three-pronged approach Community Financial takes to youth financial education that also includes classroom presentations and donations for special projects and curriculum.

McLaughlin and each of her team members each make two to three classroom presentations on financial education topics each week.

The credit union also provides curriculum supplements and donates money to schools for special projects and curricula. In the 2011, the credit union donated $44,793 to area schools--in addition to its student credit union budget and salaries for employees dedicated to the branches.

"We are looking for ways to support teachers as they are teaching," McLaughlin said. "If there is additional curriculum that teachers feel will be a benefit to their classrooms we help pay for them."

The approach has elevated Community Financial's presence in the community, and also helped attract the students' parents as new members, McLaughlin said.

"We made a decision years ago not to market to parents and teachers," McLaughlin said. "We felt that it was important to the integrity of the program. Both parents and teachers have told us they appreciate that, and as a result they open accounts with us, and they truly appreciate what we do in the community."

The Michigan Credit Union League offers tools for operating and managing a school credit union on the league's website, including a credit union school branch handbook. Use the link.

Alabama bills make CUs eligible for municipal deposits

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BIRMINGHAM, Ala. (2/23/12)--Alabama credit unions would be eligible to accept municipal deposits under a bill recently introduced to the Alabama legislature.

The bill, sponsored by the League of Southeastern Credit Unions (LSCU), was originally referred to the state House Financial Services Committee and to the Senate Governmental Affairs Committee.

The Senate bill has been re-assigned to the Senate Banking and Insurance Committee, an effort on the part of the banks to fight the bill, according to LSCU.

"[Banks] felt moving the bill to that committee presented them with their best chance to defeat the measure," said Jason Cochran, LSCU director of legislative affairs.

Commercial banks maintain that credit unions should not serve local government because of they do not pay taxes, the league noted in a bulletin urging state credit unions to contact members of the state legislature. Credit unions do pay tangible personal property taxes, real property taxes, and as employers, credit unions pay all employment taxes, according to the league. Credit unions' tax status lies in their not-for-profit structure, including cooperative ownership and volunteer leadership, the league maintains.

"Our tax status and whether or not credit unions can accept municipal deposits … obviously those are dots that we feel cannot be connected," Cochran said.

Municipalities could receive better rates of return on their tax dollars if they were allowed to deposit public funds in credit unions, which on average, pay out 0.25 to 0.50 basis points more than banks on deposit accounts, according to the league.

Filene report Competitive balance vs. level playing field

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MADISON, Wis. (2/23/12)--Federal policymakers' focus on creating a "level playing field" can impair the competitiveness of credit unions and other small financial institutions, according to a report released by the Filene Research Institute.

Blayne Haggart, author of "Keeping an Eye on the Ball: Credit Unions, the Level Playing Field, and Competitive Balance," suggests credit unions should use the metaphor of seeking "competitive balance" to advocate for policy changes that would better serve the credit union system.

Haggart, who holds a doctorate in political science with a specialization in political economy, is a visiting scholar at the Regulatory Institutions Network at Australian National University. He says the "level playing field metaphor" used by federal policymakers in the U.S. seeks to have all financial institutions operate under the same rules regardless of size, purpose or structure.

The federal rules produced by that approach govern issues ranging from money laundering and terrorist financing to interest rates and branch accessibility. The report notes that while this approach appears neutral and fair, it may lead to unintended outcomes that impair credit unions' competitiveness.

Haggart compares the two metaphors by examining the competitive settings in which they are often used. A "level playing field" metaphor may be conveyed by games such as football or hockey where teams vie for supremacy in a competition based on a fixed set of rules administered by a neutral referee.

A "competitive balance" metaphor is linked to a competition where handicapping is applied, such as in golf or chess, to use scoring compensation or other advantages to create fair competition among the participants. 

The report argues that using a competitive balance approach would force credit unions and policymakers alike to focus on objectives such as maintaining adequate competition in financial services, rather than "prejudging" the methods for achieving those results.

"A competitive balance approach to regulation thus offers the potential for more results-driven, reality-based regulation," Haggart said.

For more information about the report, use the link.

League launches Crash Delaware initiative

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NEW CASTLE, Del. (2/23/12)--In the latest addition to the credit union crash movement, the Delaware Credit Union League is awarding 10 free registrations to its annual conference, April 19-20.

Crash Delaware will launch the league's new young professionals' initiative.

Delaware credit union professionals under 35 are eligible to apply. Applicants must be employed by their credit union for at least one year and have the approval of their CEO. The deadline to apply is March 9.

Delaware crashers will participate in scheduled education events, and network with credit union leaders to share ideas about the future of credit unions and how credit unions can meet the needs of their generation, the league said.

Registration and hotel accommodations for one evening will be covered by the league. Crashers will share a room and will need to provide their own transportation.

Nationally, the burgeoning crash movement is known as the Filene Research Institute's Cooperative Trust. It was formerly the "Crash Network," a group of young credit union professionals that encourages growth for, and change by, young credit union professionals.

The Crash Network was the brainchild of Brent Dixon, Filene's young adult adviser. Twenty-five young professionals first crashed the Credit Union National Association Governmental Affairs Conference in 2010 (News Now Dec. 6, 2011.)

CU gets 50 bids on new headquarters

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ST. JOSEPH, Mich. (2/23/12)--Because it received an "overwhelming" 50 proposals to construct its new headquarters, United FCU will take additional time to explore new options and ideas offered by potential builders, said Gary Easterling, president/CEO of the credit union. 

"We are treating each submission with the same level of evaluation and working diligently to find the solution that is the best fit for UFCU," Easterling said. "We recognize the importance of this decision to our members and our employees. Hence, we will take the necessary time to complete a full evaluation. We expect to keep all interested parties appraised of any significant progress in this evaluation."

The unusually large number of bids were in response to an October request for proposals the St. Joseph, Mich.-based United FCU issued to accommodate its growing work force. The credit union expects to add 500 jobs by 2020.

The credit union is working out of multiple corporate locations, some on short-term leases, Easterling said.

United FCU doubled its asset size in last five years. In the past year, its membership grew roughly 5%, Easterling said.  Contributing to that growth was the credit union's acquisition of Griffith (Ind.) Savings Bank. The purchase marks the first time a federally chartered credit union has purchased the assets of a state-chartered, Federal Deposit Insurance Corp.-insured mutual savings bank, the credit union said.

The credit union has more than $1.4 billion in assets.

Mich. CU members save 34M through Save to Win

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LANSING, Mich. (2/23/12)--Members of Michigan credit unions saved $34 million in 2011 through the statewide Save to Win program. 

Launched in 2009, Save to Win offers cash prizes to persuade families to save money instead of spending it on the lottery or other games of chance.

Members participating in Save to Win in 2011 had an average balance of more than $2,000, which compares to an average balance of $1,871 and total savings of $30 million in 2010.

Each $25 deposit into a Save to Win certificate entitles a participating member to an entry in an annual drawing for a $100,000 grand prize. This year's winner, a member of Lansing based Astera CU, will be announced today. The program also awards monthly prizes ranging from $100 to $1,000. Participating credit unions may also choose to make individual awards to members.

The Michigan Credit Union League, the Filene Research Institute and the Doorways to Dreams Fund collaborated to develop the Save to Win program.

CU System briefs (02/22/2012)

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CU System briefs

  • HARRISBURG, Pa. (2/23/12)--Carrie Wood, left, CEO of DuBois, Pa., celebrated her birthday Tuesday by being honored as winner of the Pennsylvania Credit Union Association's (PCUA) first Paul E. Kanjorski Advocacy Scholarship.  Wood is shown here with former U.S. Rep. Kanjorski at the luncheon, which also included association staff and members of the Awards Committee. The scholarship covers Wood's expenses to attend the Credit Union National Association's 2012 Governmental Affairs Conference Feb. 18-22 in Washington, D.C.  During the luncheon, Kanjorski discussed the current political climate and issues that impact credit unions. "You have to keep cultivating new credit union champions in Congress," he told the group. "You need to make sure your message is heard."  Also at the meeting PCUA President/CEO Jim McCormack recognized Wood and thanked Kanjorski for the work he has done over the years to support the credit union movement while he was in Congress (Photo provided by the Pennsylvania Credit Union Association) …
  • ANTIGO, Wis. (2/23/12)--A $1.5 million grant from the Community Development Financial Institution Fund will help $907 million asset CoVantage CU, Antigo, Wis., expand its Rescue Refinance Program. The grant will be combined with $8.5 million in loan funds set aside by CoVantage's board for the refinance program to help members who cannot afford current mortgage payments but are blocked from refinancing by declining property values, said the Wisconsin Credit Union League (League News Feb. 20). Rescue Refinance enables homeowners to borrow up to 90% of their home's value without private mortgage insurance in an adjustable rate mortgage that carries a fixed rate for its first 10 years. Remaining funds are provided through a second mortgage that is repaid at a later date, with no payments due and no interest charged on the second mortgage ss long as the home is occupied by the owner. The combination allows homeowners to borrow up to 110% loan-to-value to pay existing mortgages, current or past-due property taxes, judgments or other refinancing …
  • HEATH, Ohio (2/23/12)--Police in Heath, Ohio, warned residents about a scam based on text messages that appear to be sent by employees at $72 million asset Hopewell Financial CU. The fraudulent message claims the recipients' credit cards were deactivated and then provides a telephone number for them to call. Police noted the scam's intent is to obtain personal information that can be used to commit fraud (The Advocate Feb. 21). Message recipients were told by police not to respond to the messages. Instead, they should contact the credit union directly …
  • PALO ALTO, Calif. (2/23/12)--Two women who are cousins will serve prison sentences for allegedly stealing more than $256,000 from an elderly couple's account at $4.9 billion asset First Technology CU, Palo Alto, Calif. A Santa Clara County Superior Court judge sentenced Pang Thao to three years in prison for identity theft, computer hacking and elder fraud with an aggravated white-collar crime enhancement, while Nancy Vang was sentenced to one year in county jail for identity theft and grand theft with an aggravated white-collar crime enhancement (Palo Alto Online News Feb. 16). Thao was an employee at Addison Avenue FCU, Palo Alto, which merged with First Tech in 2011. She is accused of creating an unauthorized PIN for online access, which she allegedly used to transfer the account's balance to Vang's account. The cousins apparently spent the funds on shopping sprees and an automobile, although $85,000 was recovered by REACT, a Bay Area high-technology crimes and identity theft task force directed by the Santa Clara County District Attorney's Office ...
  • FARMINGTON HEIGHTS, Mich. (2/23/12)--Community Choice CU, Farmington Heights, Mich., will offer $100,000 in scholarships to high school seniors graduating this spring. The $457 million credit union has awarded $305,000 in scholarships so far ( Feb. 19, 2012). This is the fourth consecutive year that Community CU will award scholarships. Applicants are required to have a 3.0 grade point average, live within the credit union's charter counties, write an essay and be accepted into a Michigan college or university …

Mass. court ruling props up MBS suits says NCUA

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LOS ANGELES, Calif. (2/22/12)--The National Credit Union Administration (NCUA) Friday filed notices to inform the U.S. District Court in Central California of a new Massachusetts court ruling that NCUA says supports its arguments in its mortgage backed securities (MBS) lawsuits against RBS Securities and Goldman Sachs & Co.

The case NCUA cited is Mass. Mutual Life Ins. Co. v. Residential Funding. On Feb. 14, the U.S. District Court in Massachusetts denied motions to dismiss similar MBS lawsuits against RBS Securities and Goldman Sachs  and rejected the same arguments that RBS and Goldman Sachs have presented in the lawsuits NCUA brought against them  involving MBS they sold to Western Corporate FCU (WesCorp) and U.S. Central FCU.

"The Mass Mutual court rejected arguments raised by underwriters Goldman Sachs and RBS that are virtually identical to the ones they have raised in this court," said NCUA's motion filed Friday in the California court.

NCUA is awaiting the written ruling of the U.S. District Court in Los Angeles in its lawsuits.  There, U.S. District Judge George Wu has indicated in two earlier tentative rulings that he would dismiss NCUA's case against the two companies.

NCUA, in its most recent filing before the California court, said that the Massachusetts court held that all nine complaints, including two that cited to internal documents and witness testimony satisfied the Securities Exchange Act's Rule 8(a)s notice pleading standard because each alleged "specific practices of abandoning [underwriting] guidelines and …link[ed] such practices with specific lending banks, including with allegations of poor loan performance.

"NCUA's complaint here plausibly alleges the same types of facts and links the alleged systematic disregard of underwriting standards to specific originators," the filing in California said. 

In addition, the Massachusetts court said that the banks' claim that poor loan performance was "due solely to the economic downturn" presented "a question of fact that cannot be resolved on a motion to dismiss."

It also rejected the banks' reliance on certain disclosures of loan risks in the offering documents, saying that the "warnings and disclosures cannot defeat…the claims here…based on wholesale abandonment of underwriting standards."

That court also ruled:

  • That the mere allegation that the banks knew of the appraisals' inaccuracy…is not enough to constitute an allegation of fraud and does not require pleading. NCUA said this is similar to its claims.
  • That inquiry notice was not created by "newspaper articles, industry publications and government reports that were publicly available before early 2007." The publications "provided only generalized reports on the industry, did not discuss [the banks'] practices specifically, and did not alert Plaintiff to potential fraud in any specific securitization it had purchased."
  • That the banks' claim that inquiry notice arose by virtue of post-sale data showing poor loan performance combined with warnings in the offering documents "did not put Plaintiff on notice that the specific underwriting and appraisal practices represented in the offering materials were false."
At the crux of NCUA's arguments  in its cases against the two banks is that the securities documents materially represented compliance with the stated underwriting standards and that its allegations in the Goldman case are stronger than those upheld in numerous RMBS cases. The agency alleges actionable misrepresentations and omissions regarding loan-to-value ratios and credit enhancement, and said the credit unions could not reasonably have discovered the falsehoods before March 20, 2008.

NCUA maintains that the two tentative rulings by the court in California on the RBS case are "erroneous, in light of the persuasive reasoning of numerous other courts." (News Now Feb. 14).

Still time to submit DSA nominations to WOCCU

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MADISON, Wis. (2/22/12)--Nominations for recipients of the World Council of Credit Unions'  (WOCCU) Distinguished Service Award (DSA) must be made by March 30 to be considered for the 2012 DSA, which will be presented in July at WOCCU's World Credit Union Conference in Gdansk, Poland.

The award, first presented in 1986, is bestowed only in years in which WOCCU's awards committee believes there are worthy candidates. To date, WOCCU has recognized 67 individuals and organizations through the award and hopes to add more names to the list during this year's conference, said WOCCU Director Ron Hance.  Hance is president/CEO of Heritage Family CU, Rutland, Va., and chair of World Council's awards committee.

"The global credit union movement is built on the contributions and sacrifice of those committed to financial cooperatives," Hance said, noting that the DSA "recognizes the best of the best."

The award honors exceptional achievements of individuals and organizations whose activities have furthered WOCCU's vision of "improving people's lives through credit unions." Individual recipients may be WOCCU member organization officers, directors or representatives; international credit union pioneers; field technicians with long and outstanding service records; or individuals whose actions have benefitted global credit union development.WOCCU presents up to three individual awards in a single year.

Institutional recipients may be organizations or agencies that have assisted with developing international credit union movements and service infrastructures over an extended time. Only one institutional award is presented each year.

Nominations must be made by a WOCCU member organization.

CU employees discover body in repossessed truck

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EVANSVILLE, Ind. (2/22/12)--Employees at a credit union in Evansville, Ind., got a shock Thursday when they opened a repossessed truck's hardshell cover and found the body of the truck's owner.

The truck had been in the parking lot of the Sterling United FCU since being towed there on Feb. 3 (The Tribune-Star Feb. 18 and Feb. 17).

The dead man, Richard A. Fulkerson II, 38, of Evansville, had been sought by police in connection with a Jan. 10 attack on an Evansville woman. His truck was found apparently abandoned in Henderson, Ky., on Jan. 11. Officers did not search the bed of the truck because Fulkerson had not been listed as missing. They had it towed back to Evansville before being repossessed and taken to the credit union earlier this month.

Police said it looked like Fulkerson slept in the back of the truck. An autopsy will be performed to determine whether the cause of death was an overdose, said Evansville Police Chief Billy Bolin.

First deadline on Wegner Awards dinner tickets is Friday

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MADISON, Wis. (2/22/12)--Credit union leaders and supporters have two weeks left to purchase tickets for the National Credit Union Foundation (NCUF) Dinner presenting the Herb Wegner Memorial Awards. The deadline for purchasing tickets online is Friday.

The event will be held March 19 at the Grand Hyatt Washington during the Credit Union National Association's 2012 Governmental Affairs Conference. The final deadline to purchase tickets via mail or fax is March 2.

The awards ceremony will celebrate the highest national honors in the credit union movement, specifically:

  • Lifetime Achievement: Bill Eckhardt, president/CEO of Alaska USA FCU, Anchorage, Alaska;
  • Lifetime Achievement: Tom Dorety, president/CEO of Suncoast Schools FCU, Tampa, Fla.; and
  • Outstanding Organization: Invest in America.
"Whether you are attending the dinner or not, members of the credit union movement and other affiliated organizations have the opportunity to recognize and congratulate award-winners through a  congratulatory message to be shown on the video screens during dinner," said Josie Collins, NCUF director of resource development & donor relations.

Individual tickets for the three-course dinner are priced at $275 each. Tables of 10 are priced at $2,750. For details on ordering the tickets, use the links.

For any questions pertaining to the dinner, please contact Josie Collins at or 800-356-9655, Ext. 4397.

NWCUA members overwhelmingly OK redistricting

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FEDERAL WAY, Wash. (2/22/12)--The Northwest Credit Union Association's (NWCUA) proposed redistricting plan was approved Feb. 13 by a significant majority. NWCUA represents credit unions in Washington and Oregon.

The final vote tally was 98.7% in favor of the plan, and 1.3% opposed (Anthem Feb. 14).

The new district boundaries are the culmination of months of research and planning conducted by the NWCUA Redistricting Task Force, consisting of nine credit union CEOs from Washington and Oregon who were appointed by the NWCUA board in early 2011.

The task force co-chairs were Diane Owen, president /CEO of Clackamas FCU, Oregon City, Ore., and Mina Worthington, president/CEO of Solarity CU, Yakima, Wash.

"The most important element was that every credit union, whether small, medium-sized or large, felt they were supported," Owen said. "So, even if you're a small credit union in a remote part of the state, you still have a connection--someone that is responsible to you that you can turn to for support. I think that was the main goal for all of us."

Nowhere in the process did the task force struggle with a division between state lines in establishing the new district boundaries, Owen noted in the newsletter.

"I believe the process went very well," she added. "The committee was made up of both Oregon and Washington CEOs, and I thought the two groups worked very well together. We were not only merging geographic areas but also merging different cultures, which can be difficult. I was very impressed with the group's ability to focus on the same collective goal."

CUs back burgeoning growth in food co-ops

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MADISON, Wis. (2/22/12)--Several credit unions have put the idea of cooperatives helping other cooperatives into direct action by helping finance start-up food cooperatives--reportedly one of the fastest-growing cooperative sectors in the U.S.

Hoosier Hills FCU in Bedford, Ind., started meeting in fall of 2006 with a group of citizens at the Lost River Community Co-op in south-central Indiana. The co-op was formed as a vehicle to run a couple of farmers markets--one in Orleans and one in French Lick--Doug Pittman, Hoosier Hills senior commercial lender for Orange County, told News Now.

However, the co-op wanted to take things a step further and consequently opened a retail co-op food store --Lost River Market & Deli--in Paoli on May 27, 2008.

The $361 million asset Hoosier Hills provided a loan in 2008 to the co-op to help start the business with money for its facility, equipment and inventory.

"We were the primary lenders but also participated with North Country Cooperative Development Fund in Minneapolis to make the loan," Pittman said. "The co-op also had help from Blooming Foods--a food co-op in Indiana, which provided advice. So it was a neat situation for everyone, all these co-ops, helping each other," he added.

Also, people in the community helped through a member loan program in which co-op members pledged funds, much like promissory notes, Pittman added.

Did the co-op have special needs and challenges?

"Yes, because food co-ops starting in a rural area--not a metropolitan area--are a tough nut to crack," Pittman explained. "They take up challenges that chains and large franchises don't.  Co-ops don't have a high level of national support from corporations.

"They see a need in the community and decide to do something about it. They are the ones that will solve those challenges," he concluded.

On the East Coast, a second credit union is working cooperatively with a co-op. Several members of Park View FCU in Harrisonburg, Va., were part of an initial group, or task force, that tested the idea of a food co-op in the area, so the credit union automatically had a relationship with the task force from the beginning, John Beiler, Park View CEO, told News Now.

As momentum for the project picked up steam, the group filed papers to begin a co-op and opened accounts with Park View. The task force selected a location for the co-op but needed money for the "build-out" of the store and improvements to it. The task force went to Park View, but "we were up against our member business lending cap," Beiler said.

The task force then went to banks but couldn't secure satisfactory options. The group returned to Park View and the $100 million asset credit union gave Friendly City Food Co-op terms for guaranteed government loans. The co-op task force members didn't like the terms of the government loans, so they decided to raise the money themselves, Beiler explained.

"One individual said he would put up one-third of the necessary funding for the co-op if members put up the other two thirds," Beiler said. "After he issued the challenge, about 40 members put in the money in the form of loans to get it off the ground to help with the build-out of the store. Some members have five-year terms and some have 10-year terms. The co-op has Park View service those member loans on its behalf. So the credit union is not the loaner, just the servicer," he added.

The co-op opened in Harrisonburg in May. It took five years from the formation of the initial task force for the co-op to open its doors, Beiler said.

Each member of the co-op pays a $200 membership fee. Any member of Friendly City Food Co-op can be a member of Park View FCU.

The credit union put an ATM in the co-op store, which helps to cross-promote service between Friendly City and Park View. The credit union also offers loan specials to co-op members, Beiler said.

Friendly City Co-op is a grocery store that specializes in locally grown food, leaning toward organic, he explained. "They have a cooler where you can get a sandwich, salad, coffee and soft drinks and then sit indoors or outdoors, with seating for 20 people.

"I think credit unions can learn a lot from the structure of a more typical co-op because members truly own a food co-op--they have a stock certificate," Belier said. "I am a member of Friendly City Co-op and want it to succeed personally. I paid the $200 membership fee.  So I have a personal stake in it. My money is a risk."

The food co-op faces a challenge similar to what credit unions confront--helping people understand what they are, Beiler said.

"Our role at the credit union is to help the public recognize what the co-op is," he added. "We have to promote its uniqueness and what the value proposition is. For example, the food co-op is open to the public, not just members."

A third credit union works with a food cooperative in New Orleans. About one year ago, ASI FCU was contacted by a real estate developer named Pres Kabacoff, who is well-known locally. He had a vision--in the aftermath of Hurricane Katrina--of a place designed for spiritual, physical and mental well-being.

Kabacoff was looking for a building for all, but especially for people of limited means, Sarah Taylor, ASI senior vice president, told News Now. The anchor tenant of the building--located in New Orleans' Ninth Ward, which was hard hit by flooding from Katrina--was going to be New Orleans Food Co-op, but the financing was falling through, Kabacoff told ASI at the time.

So, ASI FCU used $500,000 from a $3 million Healthy Food Financing Initiative (HFFI) from the Treasury's Community Development Financial Institution Fund for the New Orleans Food Co-op. "We were committed to the project no matter what, but the HFFI funding really helped out a lot," Taylor said.

On Aug. 29, the healing center opened and the food co-op and the rest of the tenants in the 60,000 square-foot three-story building--a former furniture warehouse--conducted a soft opening, with a grand opening a couple of months later in October. The co-op occupies about one-third of the space on the first floor.

In addition to the anchor of the New Orleans Food Co-op, the building contains affordable healing arts with acupuncture and massage; an athletic club; "Sweet Home New Orleans," which helps struggling musicians; an arts bazaar of local artisans; an athletic club; a restaurant with Turkish food and a juice bar; a performance theatre; a travel agency; tenants devoted to green energy; and five or six other smaller tenants.

Last fall, ASI opened a micro-branch (350 square feet) of the credit union in the building because people asked for it, Taylor said.

"The New Orleans Food Co-op is helping people with limited income purchase groceries at discounted prices or get them free by volunteering to work at the co-op," Taylor said. "The co-op also accepts state of Louisiana food stamps.

"This is the first food co-op in New Orleans, with most of the products locally grown, and a lot of them are organic," she added.

ACUC announcesThought Leader speakers

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MADISON, Wis. (2/22/12)--The Credit Union National Association (CUNA) has announced its speaker lineup for Thought Leader sessions at the 2012 America's Credit Union Conference (ACUC), to be held June 17-20 in San Diego.

Designed to connect credit union executives with big league experts, this year's sessions will focus on leadership, growing loans, streamlining efficiencies, staff dynamics, tapping into new markets, the upcoming elections and more.

ACUC also will feature keynote sessions with business innovator and renowed author, Tom Peters; U.S. Air Force pilot and philanthropist Major Dan Rooney; brand guru Sally Hogshead; and bestselling author on business, technology and media, Chris Brogan.

Thought Leaders and their topics include:

  • John Lass, "Building the Credit Union of the Future." Building upon the sustainable growth framework, Lass will lead a deeper dive into key revenue and expense challenges and opportunities facing credit unions, with a particular focus on changes in consumer channel prefers, demographics, economic events, competition and regulation.
  • Anna Liotta, "What Makes the Generations Tick and What Ticks Them Off." For the first time in history, four generations meet in the work force and marketplace. Liotta will help attendees understand their own generation's values, and the values of their colleagues, to break down communication barriers in the workplace and leverage the personality of each generation for greater success.
  • Dave Horsager, "The Trust Edge: What Top Leaders Have and Eight Pillars to Build It Yourself."  Without trust, leaders lose teams and organizations lose reputation, good people, relationships, new business and revenue. Horsager will show attendees how to gain "The Trust Edge" and list concrete steps to help credit union professionals improve their life and their career.
  • Panel, "2012 Elections: What's the Implication for Credit Unions?" CUNA panelists Bill Hampel, Mike Schenk, and Richard Gose with moderator Ryan Donovan. The election year is underway, and credit unions should be thinking about how the potential results are likely to impact the consumer psyche, economy, and, ultimately, credit unions. This discussion between economic and political experts will reveal what is at stake for credit unions at the polls.
  • John Izzo, Ph.D., "The Five Secrets You Must Discover Before You Die." What must we discover about life before it is too late?  Izzo asked seniors from the age of 60 to 106 to reflect back on their lives and pick out the memories that truly mattered. He will share these life lessons at this year's  ACUC to help credit union professionals make positive changes in their career and personal lives.
  • Kelly McDonald, "How to Market to People Not Like You." Diversity marketing is now the new norm. McDonald will detail the benefit of embracing differences and equip attendees with take-home ideas to identify and capture high potential prospects.
Additional details about ACUC, including the final keynoter, its Executive Series for CEOs and CUNA Mutual Group's popular Discovery sessions will be announced in weeks to come. For more information or to register, use the link.

Minn. advocacy day touts CUs as smarter choice

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ST. PAUL, Minn. (2/22/12)--Credit union representatives, state leaders and legislators proclaimed credit unions as a smarter choice during the Minnesota Credit Union Network's (MnCUN's) Credit Union Day at the Capitol on Feb. 16.

Minnesota Secretary of State Mark Ritchie encouraged credit unions attending the Minnesota Credit Union Network's Credit Union Day at the state Capitol in St. Paul on Feb. 16 to share with the public and legislators the advantages of being a credit union member. (Photo provided by the Minnesota Credit Union Network)
The event welcomed more than 125 credit union professionals and volunteers, and reminded state elected officials that Minnesota credit unions are trusted, hometown financial institutions with a stake in, and commitment to, the communities and the members they serve, MnCUN said.

With the theme "Credit Unions: A Smarter Choice," this year's Credit Union Day at the Capitol stressed to elected officials that credit unions are locally based financial institutions that provide consumers a better financial option, said MnCUN. Throughout the day, professionals and volunteers met with their elected officials to discuss how credit unions help Minnesota consumers improve their financial health and well-being.

The event offered sessions that discussed redistricting, 2012 legislative priorities, advocacy basics and how to effectively communicate with legislators.

"Credit Union Day at the Capitol provided us the opportunity to once again bring our stories to the State Capitol," said MnCUN President/CEO Mark D. Cummins. "Through this annual event, we are able to remind legislators that credit unions offer Minnesota consumers a unique financial service option--one that is focused on benefiting Minnesotans rather than profiting from them."

During the annual advocacy event, credit unions received political insight from state leaders, including Secretary of State Mark Ritchie, Department of Commerce Commissioner Mike Rothman, Attorney General Lori Swanson, and State Sen. Geoff Michel (R-Edina). They recognized credit unions for their unique cooperative structure and not-for-profit business model and praised them for their dedication to serving members.

"Credit unions know how to develop value for their membership," Rothman said. "Your structure is unique, and it is important to have [credit unions] in the financial services sector."

He commended attendees for their involvement in legislative advocacy activities and stressed the importance of maintaining open communications with both legislators and regulators. Citing his commitment to financial literacy, Rothman invited credit unions to join him in teaching the public about money management and other aspects of personal finance.

Swanson recognized the credit union industry as an "honest trade" that offers friendly service to members. She also outlined her office's initiatives to combat predatory and payday lenders, unnecessary foreclosures, and fraud, asking credit unions to join her in this fight. "You are close to your customers and know how to bring value to them," Swanson said. "The state needs more of that type of service."

Also, Ritchie, who classified himself as "a longtime credit union member, saver and borrower," distinguished credit unions as an important and "driving force" in the state economy. He also encouraged attendees to use the International Year of Cooperatives as an opportunity to educate the public about the cooperative sector.

"In this special year of the United Nations' International Year of Cooperatives, it is an ideal opportunity to tell all Minnesotans about the many advantages of being a member of credit unions," he said.

Ritchie urged credit unions to tell their stories to legislators and the public as part of their efforts to "lift credit unions into the consciousness of society."


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WASHINGTON (2/16/12)--Members of the Federal Reserve's monetary policymaking group were split on whether to introduce another round of qualitative easing through bond purchases, according to the minutes of the Federal Open Market Committee's (FOMC) Jan. 24-25 meeting.

"A few members observed that, in their judgment, current and prospective economic conditions--including elevated unemployment and inflation at or below the committee's objective--could warrant the initiation of additional securities purchases before long," said the minutes.

However, others indicated that "such a policy action could become necessary if the economy lost momentum or if inflation seemed likely to remain below its mandate-consistent rate of 2% over the medium run," the minutes continued.  One committee member anticipated that a pre-emptive tightening of monetary policy would be necessary before the end of 2014 to keep inflation close to 2%.

For most committee members, the "current outlook--for a moderate pace of economic recovery with the unemployment rate declining only gradually and inflation subdued--warranted exceptionally low levels of the federal funds rate at least until 2014," said the minutes. Five participants viewed the appropriate policy firming as beginning during 2015, while six indicated that "first increase in the federal funds rate would not be warranted until 2015 or 2016. As a result, those 11 participants anticipated that the appropriate federal funds rate at the end of 2014 would be 1% or lower. Those who saw the first increase occurring in 2015 reported that they anticipated the appropriate federal funds rate would be 1/2% at the end of that year."

Some assessments of appropriate monetary policy incorporated additional purchases of longer-term securities in 2012, and a number of participants indicated that they remained open to a consideration of additional asset purchases if the economic outlook deteriorated. "All but one of the committee members continued to expect the FOMC would carry out the normalization of the balance sheet according to the principles approved at the June 2011 FOM meeting, said the minutes.

At that meeting,  the committee had decided  that "prior to the first increase in the federal funds rate, the committee would likely cease investing some or all payments on securities holdings in the System Open Market Account (SOMA), and it would likely begin sales of agency securities from SOMA sometime after the first rate increase," the minutes said.

CU System briefs (02/21/2012)

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  • LONGVIEW, Wash. (2/22/12)--A former employee who was in charge of the vault at Longview, Wash.-based Cowlitz CU was arrested Feb. 15 on suspicion of money laundering and first-degree theft after $120, 000 disappeared from the vault between July 1, 2010, and last. Dec. 2 ( Feb. 16).  Police charge that Roxane Justine Ramey, 55, allegedly stole the funds and then falsified records to hide the theft  and that the funds were lost while Ramey and her husband gambled at a casino. Her husband has not been charged with a crime.  A forensic audit confirmed that $120,000 was missing from the vault.  Data from a casino indicated that Ramey had lost more than $67,000 and her husband had lost nearly $45,000. The police report said Ramey balanced the vault's cash at the end of each day and, to keep control of the accounts and hide the theft, did not miss a day of work or take vacation. The money was discovered missing when another employee began filling in for Ramey as she prepared to go on vacation, said the report …
  • BEAVER, Pa. (2/22/12)--Shirley A. Howl, a former lead teller at Beaver, Pa.-based West-Aircomm FCU, was sentenced Thursday to two years and three months in prison for embezzling $400,000 from the credit union.  Howl, 56, was also ordered to repay that amount to the credit union and to undergo five years of post-release probation (Pittsburgh Post Gazette Feb. 16). Howl allegedly faked ledger entries for three of the credit union's ATMs so it would appear that the funds from the ATM had been transferred to a vault and back again.  The thefts occurred from August 2007 to November 2009 (Associated Press Feb. 17) …

Two CUs lead in Visa EMV-chip card surge

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SAN FRANCISCO (2/21/12)--Two credit unions are at the forefront of the nation's attempt to catch up on the rest of the world's card payments systems by moving from magnetic-strip-based cards to the more secure Europay, MasterCard and Visa (EMV) chip-enabled cards that are popular overseas.

The credit unions--$23 billion asset State Employees' CU (SECU), Raleigh, N.C., and $3.4 billion asset United Nations FCU, Long Island City, N.Y.--were among  just five large financial institutions Visa named as early adopters in its announcement earlier this month  of  Visa Chip Services. Banks named as early adopters were Chase Card Services, U.S. Bank and Wells Fargo.

Visa Chip Services is new suite of services that help card issuers sidestep some of the infrastructure problems involved in authenticating EMV card transactions. Instead, Visa does the authenticating for them.

For example, the service's  iCVV service enables financial institutions to offer a more secure EMV-chip enabled card without costly, time-consuming technology investments. The iCVV is a special code that transmits with each transaction to prove the card is legitimate. It serves the same purpose as a magnetic-stripe card's CVV verification process. Visa converts the iCVV to a CVV before sending the transaction to the issuer, according to Visa's press release.

Another updated service is Visa's Chip Authenticate Service, which SECU uses. The service validates a separate cryptogram used by EMV and minimizes the need for the issuer to make authentication-related host system changes to verify the chip transaction data.

SECU "was able to build on Visa's expertise and solutions to engage quickly and launch an EMV chip card program in a matter of months, not years," said Leanne Phelps, senior vice president, card services at SECU. "The jump-start helped us to be a leader and provide our members the products and services they want and need."

Visa's EMV issuers have introduced chip card programs targeted primarily to international travelers. More than a dozen programs have been introduced since 2010.

As of Dec. 31, U.S. financial institutions had issued one million Visa branded, EMV chip cards. To put that into perspective, 18 months ago no Visa EMV contact chip cards existed in the U.S., Visa said in its news release.

Still a major roadblock continues to be merchants' reluctance to upgrade their terminals to accept the cards. Merchants say they are concerned over whether the U.S.-based chip cards would use the same level of security as the cards overseas (Bank Technology News Feb. 6).

S.C. CUs launch MADTAG campaign to make difference

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COLUMBIA, S.C. (2/21/12)--Credit unions throughout South Carolina have launched a pilot cooperative campaign called "MADTAG," hosting free and discounted gas giveaways in Charleston, Columbia, Florence and Greenville that brought media results far exceeding expenses, said the South Carolina Credit Union League (SCCUL).

The marketing task force that created the concept presented background and results Thursday at the South Carolina Credit Union Management Association (SCCUMA) meeting in Columbia.

The launch events were within a limited budget of $10,000 approved by the league's Media Committee. Yet, according to the marketing task force, the events led to an estimated $205,000 or more in media coverage from radio and television stations throughout the state.

MADTAG refers to "Make a Difference. Tag, You're It!" The campaign highlights acts of service and encourages South Carolinians to pass the goodwill along to others. The task force chose the gas launch to create a noticeable impact and prompt visits to There, credit unions can post their community involvement, while citizens touched by difference-making can comment and share their stories. 

"MADTAG is all about finding ways to 'Make a Difference' in the lives of others and our community," said Media Committee Chair Anne Shivers, who is CEO of Carolina Collegiate FCU in Columbia. "But we don't want it to stop there. Just like a game of tag, we want people to pass on the good deed to someone else."

The task force also shared with SCCUMA participants the background in creating MADTAG, including consideration of the assets carried from the former "Discover Our culture/" campaign and of grassroots support for "Every day is Bank Transfer Day" branding. The group saw limited value in based on its results and terminology, and noted that MADTAG and "Every day is Bank Transfer Day" serve different purposes and can be used simultaneously.

The MADTAG campaign--with SCCUL Media Committee approval--will feature three more service events per region and add a spring statewide radio campaign highlighting credit unions as difference-makers and sponsors of Children's Miracle Network Hospitals radio-thons in the state.

Members of Maple Hill CU vote to merge with Connexus

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WAUSAU, Wis. (2/21/12)--Members of Maple Hill CU voted Thursday to approve merging the Wausau, Wis.-based credit union with Connexus CU, also located in Wausau.

The special vote was conducted at Maple Hill CU's Annual Meeting, and the merger was "overwhelmingly approved," said the credit unions in a press release.

"While we are a strong credit union with a proud history of serving our members, stringent new federal regulations and requirements have made it impossible for us to generate a profit for the past three years," said Jack Kruit, Maple Hill board chair. "Rather than wait for a negative situation to arise, we decided to act in the best interest of our credit union and our members--as we always have--and recommend a merger with Connexus," he added.

"Connexus shares our values, has been an excellent partner to us in the past with mortgage services, and will honor our requests to keep our branches open and our employees serving our members," Kruit said.

"We appreciate the trust that Maple Hill has placed in us to serve its members' needs now and in the future," said J. David Christenson, president/CEO of Connexus.

The two credit unions expect the merger transition to be completed by the end of March.

Maple Hill, which has more than $11.3 million in assets and more than 2,000 members, was established on Sept. 10, 1965, at St. Mary's Hospital on Maple Hill in Wausau.

Connexus has more than $340 million assets and serves more than 30,000 members. It was established as Employers Mutual's CU in 1935 and changed its name to Wausau Insurance Employees CU in 1980. To reflect its growing membership, it changed its name again in 2003 to Connexus.

Wisconsin Assembly doubles CUs charity gifts

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MADISON, Wis. (2/21/12)--The Wisconsin State Assembly--at the request of credit unions in the state--has passed Senate Bill 356, which will allow credit unions to double their financial support for charitable and community organizations.

As was the case in the Senate, the bill was adopted with no dissenting votes, said the Wisconsin Credit Union League.

SB 356 increases credit unions' charitable giving limit, set in 1971 at 0.5%, to 1% of regular reserves. The State Senate passed the bill late last month.

"Wisconsin's member-owned financial institutions are socially responsible, [and] vested in and committed to making significant contributions to the communities they serve," said league President/CEO Brett Thompson.

Authors of the proposal are State Sen. Glen Grothman (R-20) and State Rep. Dale Kooyenga (R-14). The bill had more than 30 co-sponsors, he said.

Wisconsin credit unions support nearly 3,000 charities and programs, with hundreds of thousands of dollars of monetary, in-kind and volunteer support annually. That support is in addition to the more than $200 million that credit unions saved their member-owners in the form of lower rates on loans, higher rates on savings and lower and fewer fees for financial services in 2011.

Credit unions' social responsibility is detailed in the 2011 REAL Solutions Scorecard  for Wisconsin Credit Unions. Use the link.

Maine saw 1.2 M shared-branch transactions in 11

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PORTLAND, Maine (2/21/12)--Shared branching transactions in Maine broke records in 2011, with more than 1,219,000 transactions, said the Maine Credit Union League.

The state has more than 150 credit union shared branches in the Shared Branch Network--more than any single bank in the state, the league added (Weekly Update Feb. 10). The network has more than 4,400 locations nationwide.

"This high number of total transactions illustrates how Maine credit unions are meeting the consumer demand for convenience through this expanding network of shared branches," said league President John Murphy. "Sharing the fact that we have more branches than any single Maine bank is an effective way to attract new members, especially Gen Y, a demographic that is important to the continued growth of credit unions," Murphy added.

The league is launching a new Shared Branch campaign that features seasonal stories told by members--such as snowbirds heading for sunnier climates and snowmobilers heading north for recreation--who share how a shared branch helped save the day.

All ads direct consumers to a microsite,, which went live last week and features a Shared Branch locator.

Foreclosureaffordable housing bill passes N.J. committee

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TRENTON, N.J. (2/21/12)--The New Jersey Senate Economic Growth Committee Thursday approved a bill that would allow a state agency to buy and deed-restrict foreclosed properties for affordable housing.

The bill, S. 1566, would establish a central agency under the state's Housing and Mortgage Finance Agency to use the State Affordable Housing Trust Fund to buy foreclosed properties, said the New Jersey Credit Union League  (The Daily Exchange Feb. 17).

State Sen. Ray Lesniak (D-20) introduced the bill last week, and a companion bill was introduced Thursday by Assemblyman Jerry Green (D-22), the league said. The measure now goes to the Senate Budget and Appropriations committee before consideration in the full Senate.

The legislation would turn 10,000 foreclosed homes into 10,000 affordable homes, and the "Foreclosure Relief Corp." would give municipalities 45 days to decide whether they want the vacant properties converted to affordable housing before the corporation goes into a market rate bulk sale.

Hanscom FCU launches insurance agency

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HANSCOM AFB, Mass. (2/21/12)--Hanscom FCU, located at Hanscom Air Force Base, Mass., has opened its own insurance agency.

Hanscom Insurance Agency will provide car insurance, homeowners insurance, life insurance, business insurance and renters insurance, as well as specialty products such as wedding and pet insurance.

The agency will use quotes from multiple insurance carriers, the credit union said.

"Hanscom Insurance Agency is a natural fit for the credit union," says Paul Marotta, Hanscom FCU board chair. "The new agency will enhance Hanscom FCU's competitive position, and deepen its member relationships with insurance products that feature the best combination of price, convenience and selection."

Hanscom FCU has $938 million in assets.

CUs share opinions on BTD at NWCUA symposium

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BEAVERTON, Ore., and FEDERAL WAY, Wash. (2/21/12--The implications of Bank Transfer Day for credit unions were discussed by about 30 credit union leaders from Washington and Oregon  recently during the Northwest Credit Union Association's (NWCUA) first Leadership Symposium.

Bank Transfer Day and its implications for credit unions were among the topics discussed by Oregon and Washington credit unions recently at the Northwest Credit Union Association's first Leadership Symposium. (Photo provided by the Northwest Credit Union Association)
In a session facilitated by Denise Gabel, chief finance and strategy officer at Madison, Wis.-based Filene Research Institute, credit union CEOs and other leaders were asked if the outcome of Bank Transfer Day helped credit unions or hurt them, said NWCUA (Anthem Feb. 14).

Bank Transfer Day, on Nov. 5, more than 610,000 people switch accounts from large banks to credit unions and community banks on that day, according to Javelin Strategy and Research.

The 2011 membership numbers are being finalized, and annual growth is expected to follow general patterns of recent years, with spikes of growth for larger, marketing-savvy credit unions during last fall's run up to Bank Transfer Day, said NWCUA. Credit unions are waiting to see whether new members gained during the fall will translate to deeper relationships.

A regulator shared the opinion that it was good to see credit union awareness driven by real consumers, instead of by financial institutions and those who regulate them.

While credit unions have been effective in communicating why credit unions are better, said one credit union CEO, the credit union needs members to use both loans and savings. 

A popular refrain from members of the group: "You could not buy the positive publicity we go."

The CEO of a smaller credit union noted while her credit union didn't see a huge increase in membership, existing members opened more checking accounts. She called it a "great opportunity for us to build on" and added, "don't let it die."

The leadership group concluded that in the end, Bank Transfer Day presents an ongoing opportunity to market not merely membership but the full line of credit union products and services to new members, said NWCUA.

A regulator shared the opinion that it was good to see credit union awareness driven by real consumers, instead of by financial institutions and those who regulate them.

CU System briefs (02/17/2012)

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  • EUGENE, Ore. (2/21/12)--A former car dealer in Roseburg, Ore., was sentenced to three years and one month in prison for conspiring to commit bank fraud and defrauding $661 million asset Northwest Community CU, Eugene, and PremierWest Bank for a combined loss of almost $3 million (The News-Review Feb. 15). Dave Gilbert, 64, allegedly timed deposits of checks from accounts at one financial institution into the other so the bank and credit union both honored checks even when balances were insufficient to cover them. Prosecutors claimed the scheme provided Gilbert with the equivalent of interest-free loans that were unauthorized and unsecured. More than 500 checks totaling $1.9 million were deposited between Dec. 1 and Dec. 9, 2008. The court ordered Gilbert to pay restitution of $1.9 million …
  • FAIRBANKS, Alaska (2/21/12)--Two women were arrested on felony robbery and theft charges related to a robbery at the Fairbanks branch of $109 million asset True North CU, Juneau. The women are accused of using the drive-through lane's pneumatic tube to send a note claiming there was a bomb inside the branch (Fairbanks Daily News-Miner Feb. 14). The note said the bomb would go off unless the teller filled the tube's carrier with cash. The teller sent $2,198 to the van's occupants while staff checked its license plate. Police quickly spotted the van nearby and arrested Jenesa French Kempski and Paulette Josephine Akerelrea, who were held without bail. Akerelrea was also cited for driving after revocation …
  • SALT LAKE CITY (2/21/12)--The U.S. Small Business Administration's (SBA's) Utah District named $2.9 billion asset Mountain America CU as its 2011 Lender of the Year for business lending performance. Mountain America also received the 2011 Blaine Andrus Memorial Award for community efforts and diversity of its small business lending programs. Mountain America has led the nation's credit unions in SBA lending for the past eight years, the credit union said in a press release. Pictured are staff from the credit union. (Photo provided by Mountain America CU) …
  • SAN JOSE, Calif. (2/21/12)--Technology CU has received designation as a "preferred lender" for Small Business Administration (SBA) guaranteed loans. Preferred lender status allows the $1.5 billion asset credit union to document and process SBA loan requests on behalf of the SBA for loans ranging from $25,000 to $5 million. Mark Quinn, director of SBA San Francisco District, said San Jose, Calif.-based Technology CU ranked in the district's top 20 lenders for guaranteed loans for the year that ended Sept. 30, 2011. Technology CU has added Niki Wong as vice president of commercial and industrial loans to prepare for the demand for SBA loans and other commercial loans …
  • NEW YORK (2/21/12)--Michael J. Connery will retire as president/CEO of United Nations FCU on Jan. 1, 2013. Connery, 67, has led United Nations FCU for almost 24 years. During that period, the credit unions' membership grew from 18,000 to more than 95,000, while assets increased from $235 million to $3.5 billion. A statement from the United Nations FCU Board of Directors said it is relying on its two-year-old succession plan and working with an executive recruiting firm to identify leadership candidates …
  • COCOA BEACH, Fla. (2/21/12)--John R. Eggleston, 79, died Feb. 13. During his lengthy career, Eggleston served as president of Kennedy Space Center CU, Space Coast CU and Community Educators CU and earlier as assistant manager of Navy Orlando FCU. He also was president of the Central Florida Chapter of the Florida Credit Union League as well as the Florida Credit Union Executives Society. Eggleston served in the Navy from 1951 through 1971, retiring as a lieutenant commander (Florida Today, Feb. 16) …

University of Iowa Community CU UI end contract

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IOWA CITY, Iowa (2/17/12)--The University of Iowa and the University of Iowa Community CU  have ended a five-year partnership in which the credit union was the exclusive financial services provider on the university campus.

The credit union said university officials informed it last July that they would solicit proposals from other financial service providers. Although the credit union provided two offers of optional two-year extensions, the university did not to pursue the options and instead put the contract up for bidding (The Daily Iowan Feb. 14).

After reviewing the guidelines of the bidding process, the credit union decided not to bid on the contract because the new contractual guidelines did not make financial sense for its 91,000 members, the credit union told local media. The campus business involved more transactions but didn't open many new loan or deposit accounts and the revenue generated did not justify the expense of a revised contract ( Feb. 15).

Hills Bank and Trust Co. won the bidding process and will pay more than $613,000 for branch rental space at the university and its hospitals and clinics. The move means that students' Iowa One cards linked to their checking accounts will move to the bank, which opened its first branch on campus on Tuesday. It will open a second branch at the hospitals and clinics on March 20 and a number of ATMs in March.

Hills will pay the university a guaranteed $1.04 million, and the university could earn about $600,000 more based on card transactions on campus. The Press-Citizen said the university will receive from the bank about half the revenue it received under the credit union contract. The credit union had paid the university more than $2.9 million in the five years it provided services.

N.J. bill would convert foreclosures to affordable housing

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TRENTON, N.J. (2/17/12)--A measure that would allow a New Jersey agency to purchase and deed-restrict foreclosed properties for affordable housing has been introduced into the New Jersey Senate.

State Sen. Ray Lesniak (D-20) introduced S. 1566 this week to establish a central agency under the state's Housing and Mortgage Finance Agency to use the State Affordable Housing Trust Fund to buy foreclosed properties, according to the New Jersey Credit Union League (The Daily Exchange Feb. 16).

State Sen. Barbara Buono (D-18) is co-sponsor of the measure, which was scheduled to be considered yesterday before the  Senate Economic Growth Committee. Assemblyman Jerry Green (D-22) will introduce a companion bill in the lower house, said the league.

The legislation would turn 10,000 foreclosed homes into 10,000 affordable homes, but the program wouldn't be just an affordable housing program, the article said. The "Foreclosure Relief Corp." would give municipalities 45 days to determine whether they want the vacant properties to be converted to affordable housing before the corporation goes into a market rate bulk sale.

Funeral arrangements for Coopera CEO announced

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DES MOINES, Iowa (2/17/12)--Funeral arrangements have been set for Warren Morrow, CEO and founder of Coopera Consulting, who died unexpected early Wednesday morning at the age of 34 (News Now Feb. 15).

"Warren was a unique individual of exceptional passion," said Mark Condon, senior vice president of the Credit Union National Association (CUNA), which has an exclusive, national partnership with Des Moines, Iowa-based Coopera to help credit unions reach out to Hispanics.  "He was the catalyst behind CUNA's valued partnership with Coopera, and that partnership will continue to thrive as a testament to Warren's work and what our partnership will continue to do for credit unions. He put together an incredible team that shares his passion and commitment."

Working together, CUNA and Coopera launched a Spanish personal finance website for credit unions, El Poder es Tuyo--The Power is Yours. Coopera and its sister company in Iowa, The Members Group, recently partnered to provide credit unions with the Coopera Card, a reloadable Visa prepaid card build specifically for Hispanic cardholders. Coopera works with several state leagues, and Morrow had begun fielding inquiries from Fortune 500 companies on how to better break into the Hispanic market.

"Warren had a powerful vision that outreach to the underserved Hispanic community should not be philanthropy," said Murray Williams, chief operating officers, Iowa Credit Union League, which has owned Coopera since 2006. "Instead, a business could do well by doing good--and everyone would benefit." (See resource links for a video of Morrow and local coverage of his efforts.)

Miriam De Dios, vice president of Coopera, said the legacy Morrow has created will live on through their company. "It is our mission to continue with Warren's passion and vision of Coopera as we move forward."

Visitation will be today from 5 p.m. to 8 p.m. at Dunn's Funeral Home, Des Moines, Iowa 50312. Funeral services will be Saturday at 1 p.m. at Grace United Methodist Church  in Des Moines.  He is survived by his wife Christina Fernandez-Morrow and 7-year-old daughter Ariana. In lieu of flowers, the family asks that contributions be made in his honor to the Warren Morrow Memorial Fund at Des Moines Metro CU.

Georgians savings deposits grew in 2011

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ATLANTA (2/17/12)--Georgia credit union members continue to improve the financial security of their savings account balances at the state's credit unions grew in 2011, indicating consumers maintained much of their financial prudence characteristic of recent years, according to a Georgia Credit Union Affiliates (GCUA) survey.

The most recent "Paying Attention" report from GCUA revealed that savings deposits among credit union members increased by 10.59%. Also, total credit union loan balances in the state grew 4.98% in 2011, down from the 11.17% growth rate in 2010.

The report, released quarterly, combines savings and lending data from 38 credit unions statewide--representing 91% of credit union assets and 84% of members in Georgia--with poll responses from more than 2,400 credit union members.

"Georgians remain cautious about the recovery, and many have not changed their views from a year ago," said Mike Mercer, GCUA president/CEO. "Still, there are positive signs. While savings growth rates are slightly below 2010 levels, Georgians continue to save their money, and the number of bankruptcy filings by credit union members have also fallen."

The report also revealed:

  • Business lending grew by 13.83% last year;
  • Used-car lending continued its growth at a rate of 7.67%;
  • First-mortgage balances increased by 8.94%; and
  • Bankruptcies filed by credit union members decreased by 15.12% in 2011.
"It's common to suggest that consumer behavior will change dramatically as a result of the Great Recession, similar to the way it did for the generation that lived through the Great Depression of the 1930s," said Bill Hampel, chief economist for the Credit Union National Association. "I think that's way overblown. We may see some modest long-term changes in behavior, but nowhere near the effects of 80 years ago, simply because as severe as it was, this latest recession was minor compared to the Great Depression.

"One medium-term effect is many households approaching retirement may need to work an extra year or two," Hampel added. "Longer term, we could see modest changes in the direction of greater saving, more conservative investing, and lower home-ownership rates."

"Another bright spot in Georgia's outlook is the financial prudence of credit union members," Mercer said. "When asked how they would use their tax refunds this year, an overwhelming majority plan to either save the money or use it to pay down debt."

According to the GCUA poll, 44.4% of Georgia credit union members intend to use tax refunds to pay down debt, and 36.1% of members plan to put the refund towards savings. While Georgians' trend of saving is not new, the recent focus on repaying debt and postponing loans could mean consumers are rebuilding their confidence and are determined to regain sound financial security, GCUA said.

PCUA boardGAC resolution supports H.R. 3993

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Mary Dunn, senior vice president and deputy general counsel for the Credit Union National Association, addresses the Pennsylvania Credit Union Association's (PCUA) board members and Governmental Affairs Committee members, at a joint meeting. Other panelists included Chris Pippett (left), Fox Rothschild, and Brian Knight (right), National Association of State Credit Union Supervisors. Rick Wargo, PCUA Executive Vice President/General Counsel, moderated the discussion on regulatory issues. (Photo provided by the Pennsylvania Credit Union Association)
HARRISBURG, Pa. (2/17/12)--The Pennsylvania Credit Union Association's (PCUA) Board of Directors and Governmental Affairs Committee (GAC) adopted a resolution to support H.R. 3993, which would allow credit unions to obtain supplemental capital.

The association board and GAC convened Wednesday for a joint meeting in Harrisburg. PCUA President/CEO Jim McCormack and Board Chairman Michael Kaczenski welcomed the group.

Rick Wargo, PCUA executive vice president/general counsel, served as moderator for a discussion on regulatory issues, with panelists: Mary Dunn, senior vice president and deputy general counsel for the Credit Union National Association; Brian Knight, National Association of State Credit Union Supervisors; and Chris Pippett, Fox Rothschild.

There was discussion on how supplemental capital should/could work under Congress' H.R. 3993, the Capital Access for Small Business and Jobs Act.

The resolution reaffirmed PCUA's position taken in 2009 to support supplemental capital as long as it preserves mutual ownership and the notion of one member, one vote.

There also was discussion about National Credit Union Administration (NCUA)/state regulatory exam issues, including H.R. 3461, the Financial Institution Examination Fairness and Reform Act, introduced by U.S. Rep. Shelly Moore Capito (R-W.Va.) and U.S. Rep. Carolyn Maloney (D-N.Y.). The bill would clarify the appeals process for examination issues, including an appeal that goes outside of NCUA to the Federal Financial Institution Examination Council.

PCUA is sending a letter to all members of its congressional delegation to encourage them to support the legislation.

Alloya Corporate profitable for 2011 ahead of plan

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WARRENVILLE, Ill. (2/17/12)--Alloya Corporate FCU announced Wednesday that it recorded net income of $9.6 million for the 2011 calendar year and is ahead of targeted capital projections.

After accounting for dividends paid on perpetual contributed capital (PPC), Alloya reported retained earnings of $20.5 million as of Dec. 31.

Regulatory capital (retained earning plus perpetual contributed capital plus nonperpetual capital accounts) was $93.7 million as of Dec. 31, resulting in a capital ratio of 5.6% and a retained earnings ratio of 1.2% as, based on moving daily average net assets of $1.7 billion. The results are unaudited.

"Alloya is executing on a financial plan to earn $3 million over the next 12 months to further bolster retained earnings," said Todd Adams, Alloya's chief financial officer.

When compared with the plan presented in Alloya's private placement memorandum (for the sale of perpetual contributed capital and nonperpetual capital accounts), retained earnings are three-and-a-half years ahead of base-case scenario targets, Adams said. The retained earnings ratio of 1.2% exceeds the 0.45% required in October 2013, and is ahead of the 1% target required in 2016, he said.

Alloya's balance sheet is smaller than might otherwise be expected from a corporate credit union with such a large member base and volume metrics. That is a result of Alloya's business and capital plan, which is based on how credit unions use the corporate's balance sheet and not the member credit unions' individual asset size, Adams said.

"Alloya's flexible capital plan provides significant advantages to our members," said Charles Furbee, Alloya's CEO,. "In this case, besides reducing their capital investment, by working with the Federal Reserve to implement an Excess Balance Account program and implementing it via the corporates' secure account management portal "'Premier View,'" the corporate has built an efficient process that helps minimize concentration risk for our members."

New website translates credit scores into Spanish

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WASHINGTON (2/17/12)--A new website provides information and translation services to help Hispanic Americans learn more about their credit scores.

The site, introduced by Hispanic America Saves, Consumer Federation of America and VantageScore Solutions, features questions and answers that provide the information consumers need to know about credit scores.

Especially important information for Hispanic Americans about credit scores includes:

  • Information related to race, ethnicity, country of origin, or whether consumers speak English are not reported to the three national credit reporting companies--Equifax, Experian and TransUnion--and are not factors used to determine credit scores.
  • Credit scores affect whether consumers can get credit and at what price.
  • Those who make all loan and credit card payments on time are likely to have good credit scores.
  • The scores are based on information in credit files housed by the three national credit reporting companies.
"Hispanic Americans can benefit from knowing more about credit scores because these scores affect the availability and costs of car loans, credit cards, mortgage loans, and even electricity and telephones services," said Larry Garcia, president/CEO of the credit union service organization El Paso Credit Union Affordable Housing and leader in the Hispanic America Saves program.

Hispanic America Saves is part of America Saves, a nationwide campaign that encourages consumers to save. America Saves Week begins Sunday. (See related stories, CUs encouraged to take part in America/Military Saves Week in the Washington section and H&FF Radio kicks off America Saves Week in the Consumers section.)

State leaders to Iowa CUs Stay involved

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DES MOINES, Iowa (2/17/12)--Speakers urged Iowa credit unions to stay involved in the political process during the Iowa Credit Union League's annual Legislative Conference Tuesday in Des Moines.

Iowa Gov. Terry Branstad addresses attendees at the Iowa Credit Union Legislative Conference 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 lawmakers.

"You are the people who will make a difference," U.S. Rep. Tom Latham (R-Iowa) told attendees. "If you don't speak on behalf of your issues, no one else will."

Credit Union National Association (CUNA) President/CEO Bill Cheney discussed the member business lending (MBL) cap credit unions face. At a time when banks are withdrawing credit from America's small businesses, credit unions have been expanding credit to small businesses, but with more credit unions approaching the cap, this growth is threatened.

Cheney stressed that Congress should enact legislation that increases the credit union MBL cap to 27.5% of assets from 12.25% for well-capitalized credit unions. Doing so would provide $13 billion to lend to small business owners. Injecting that amount into the economy would create roughly 140,000 new jobs at no cost to the taxpayer, according to CUNA research.

From left, U.S. Rep. Bob Kressig (D-Iowa); Bob Hoefer, Dupaco Community CU, Dubuque; U.S. Sen. Jeff Danielson (D-Iowa); U.S. Rep. Chuck Isenhart (D); and Dave Klavitter, Dupaco Community CU, at the Iowa Credit Union Legislative reception. (Photos provided by Iowa Credit Union League)
Iowa Gov. Terry Branstad discussed the value credit unions provide for small businesses. Last week, during a visit to Unified Therapy Services, an award-winning small business in Dubuque, Branstad praised Dupaco Community CU's role in helping small businesses grow and create jobs.

Iowa credit unions heard from CNN Political Analyst Paul Begala. When asked if the Iowa caucuses would continue, Begala said, "Caucuses in general are getting a black eye, but Iowa is not."

Begala encouraged credit unions to continue to be engaged and involved with the legislative process.

Attendees also had the opportunity to hear from Iowa journalists Dave Price WHO-TV 13 Emily Price of KCCI-TV 8, Kay Henderson of Radio Iowa and Jennifer Jacobs of the Des Moines Register.

CUNA open for federal holiday no INews NowI Monday

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WASHINGTON and MADISON, Wis. (2/17/12)--The Madison, Wis., and Washington, D.C. offices of the Credit Union National Association will remain open Monday for the federal holiday, Presidents' Day .

However, there will be no regular Monday issue of CUNA's News NowNews Now will resume regular publication on Tuesday.

Midstate FCU approves 311K in loans at event

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CARTERET, N.J. (2/17/12)--MidState FCU's "Love Your Loan" event Feb. 10 brought in $311,062 in loans for the day, according to the New Jersey Credit Union League (The Daily Exchange Feb. 16).

Staffers at Carteret, N.J.-based MidState FCU celebrate approving $311,062 in loans during its "Love Your Loan" event Feb. 10.  It was the largest one-day loan total in the credit union's history. (Photo provided by the New Jersey Credit Union League)
It was the largest one-day loan total in the Carteret, N.J.-based credit union's history. In fact, 30 people were waiting outside the credit union before the doors opened, said the credit union.

Rates began at 2.99% at 8:30 a.m. and then increased by 0.50% every half-hour throughout the event. The earlier the member applied, the lower the rate approved. Between 8:30 a.m. and 9 a.m., the credit union saw 41 applications. 

"It was amazing to see so many people waiting to take part in this event before we even opened for the day," said Sean McDonald, director of business development at the more than $20 million asset credit union. "It demonstrates that if credit unions offer services that are attractive to their members and that fill their needs, great things can and will happen," he told the league.

The credit union promoted the event through e-mail blasts to members, in-branch advertising and word of mouth.

Staff also were instrumental in the event's success, said Tracy Sussman, president/CEO."I have to commend the staff for their hard work promoting the event and for their eagerness the day of the loan sale," Sussman said. "Without the staff's cooperation, the loan sale would not have been as successful."

A.M. Best affirms CUNA Mutual Fin. Group life subsidies

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OLDWICK, N.J. (2/16/12)--A.M. Best Co. has affirmed the financial strength rating  of CUNA Mutual Financial Group (CMFG) Life Insurance Co.--the former CUNA Mutual Insurance Society--at A (excellent) and its issuer rating at "a."

The Oldwick, N.J., ratings company also affirmed  the company's debt rating of "bbb+" on its $85 million 8.50% 20-year surplus note issued by CMFG Life (Business Wire Feb. 13).

In addition A.M. Best affirmed CMFG Life subsidiary MEMBERS Life Insurance Co. with  B++ (Good) FSR and "bbb+"  ICR ratings. Both companies are based in Waverly, Iowa.

The outlook for all ratings is stable, said A.M. Best.

CMFG Life's rating acknowledged its "continued position as the leading provider of life/health insurance products to credit union members and employees, its more than adequate risk-adjusted capitalization, consistently positive net operating gains and improved balance sheet on a consolidated basis."  Its positive ratings are offset partly by a moderate exposure to structured securities, volatility in statutory earnings performance in some core and ancillary lines of business, the agency added.

MEMBERS Life Insurance Co. ratings acknowledge "its strong risk-adjusted capitalization and status as a wholly owned subsidiary of CMFG Life." Offsetting these  is MEMBERS Life's reduced operating profile and continued net operating losses related to the amortization of the interest maintenance reserve,  said A.M. Best.

Coopera founderCEO Warren Morrow dies

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DES MOINES, Iowa (2/16/12)--Credit unions have lost a key voice in their outreach efforts to serve Hispanics. Warren Morrow, CEO and founder of Coopera Consulting, died unexpectedly early Wednesday morning, according to the Iowa Credit Union League.

A native of Mexico City, Morrow worked 12 years in the non-profit and private sectors to build wealth for Hispanics in the financial community by promoting Hispanics throughout the credit union industry, according to the Des Moines, Iowa-based Coopera's website.

Coopera Consulting, a subsidiary of the Iowa league, has been the Credit Union National Association's (CUNA)  Hispanic outreach partner since 2009. It assisted in developing products that helped credit unions culturally translate their marketing messages, instead of literally translating them.

Morrow advocated that credit unions' outreach efforts to Hispanics should engage in more than just translations (News Now Aug. 6, 2009). Together, CUNA and Coopera launched a Spanish personal finance website for credit unions, El Poder es Tuyo--The Power is Yours.

"Warren was such a positive person, and he brought his enthusiasm and charisma to our office. He was a great leader and a wonderful employee for more than six years. Warren was a good friend to many of us and throughout the credit union industry, and he will be sorely missed," said Patrick Jury, president/CEO of the Iowa league.

MWCUA reinvents its service corporation

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PHOENIX, DENVER and CASPER, Wyo. (2/16/12)--The recently formed Mountain West Credit Union Association (MWCUA) has reinvented its service corporation, Strategic Partners Inc., a subsidiary of the MWCUA.

The MWCUA board of directors voted in favor of merging the three states' service corporations and elected a new board of directors for the organization in January.

"Together we are better equipped to leverage our strength, providing our member credit unions with increased value for years to come," said Scott Earl, MWCUA president/CEO.

Mike Williams, board chairman said: "Bringing our service corporations together as one unit was the appropriate next step in unifying our credit unions."

The MWCUA board includes a representative number of directors from each state it serves --Arizona, Colorado and Wyoming.

The chairman is Mike Williams, president/CEO, Colorado CU, Littleton, Colo.; and the vice-chair is Bob Ramirez, president/CEO, Vantage West CU, Tucson, Ariz.

Board members include:

  • Larry Knopp, president/CEO, UniWyo FCU, Laramie. Wyo.;
  • Nathanael Tarwasakono, president/CEO, Pima FCU, Tucson, Ariz.;
  • Horacio Peralta, president/CEO, B.C.S. Community CU, Wheat Ridge, Colo.;
  • Rainy Thoen, president/CEO, Community Choice CU, Commerce City, Colo.;
  • Sandy Neves, president/CEO, Fitzsimons FCU, Aurora, Colo.;
  • Jim Barber, president/CEO, Minnequa Works CU, Pueblo, Colo.; and
  • Jay Curtis, president/CEO, First CU, Chandler, Ariz.

CUNA Mutual retirees appeal ruling to Supreme Court

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WASHINGTON (2/16/12)--Several CUNA Mutual Group retirees contesting a company decision on healthcare costs have asked the Supreme Court of the United States to overturn an appeals court decision that favored the CUNA Mutual Insurance Society.

The group's attorney filed a petition for a writ of certiorari on Feb. 7, asking the higher court to review the case from the U.S. Court of Appeals for the Seventh Circuit Court in Madison, Wis. 

The lower court ruled last summer that the retirees had no legal right to prevent the company from eliminating its subsidy of health insurance premiums (News Now Aug. 12) and that the company had not violated provisions of the Employee Retirement and Income Security Act (ERISA).  The subsidy included accumulated sick pay the retirees believed would be put toward those premiums.  The appeals court upheld a decision by a lower court in favor of CUNA Mutual.

"We are pleased the federal courts in Madison and Chicago dismissed this case, and confirmed CUNA Mutual Group did not violate the law when it made the difficult decision to end subsidies for retiree health coverage," said Rick Uhlmann, senior manager, media relations for CUNA Mutual Group.  "This is not a case that merits review by the U.S. Supreme Court," he added.

Filene Research measures CUs social media success

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MADISON, Wis. (2/16/12)--Social media might help credit unions create some chatter among their followers, but that "buzz" does not always translate into more business. That was among the findings of a new survey, "Measuring Social Success in Credit Unions," from the Filene Research Institute.

The survey indicates that credit unions reflect overall social media trends: more emphasis on video, less on blogs, and more use of Facebook and Twitter.

Credit unions that called their programs "successful" or "very successful" saw rises in Web traffic and loan growth. But those gains did not extend in a measurable way to membership growth or to higher products per member, said Filene.

Several key success drivers emerged and solidified during the yearlong study. Credit unions that do all or most of these are much more likely to succeed:

  • Tie the social media program to the strategic plan and include metrics for tracking progress.
  • Conduct periodic member surveys. There continues to be a correlation between success and credit unions that conduct member surveys two to four times per year and have otherwise active marketing programs.
  • Post messages in varying media formats, with topics focusing on credit union events, helpful financial information, alerts/information, product information, and community events.
  • Target between one and three Facebook posts per day. This was an area with a clear point of diminished returns: Those making more than three posts per day were less successful.
  • Consider outside consultants, which may be a good alternative for smaller credit unions that do not have a large in-house staff. Nine in ten credit unions that consider their programs successful used outside consultants.
  • Promote the program through multiple channels and with credit union staff participation and buy-in. The qualitative interviews showed that staff engagement is a huge piece of generating interest in the program.

WOCCUs rural lending project aides Guatemala farmers

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JALAPA, Guatemala (2/16/12)--Guatemala's  farmers are experiencing greater financial stability with their credit unions' support through a pilot program implemented by World Council of Credit Unions (WOCCU) in partnership with its Guatemalan member association.

Brian Branch, president/CEO of World Council of Credit Unions (WOCCU) (left), talks with Cooperativa (credit union) Tonantel CEO Elio Armando (center), and Guatemalan WOCCU member Federación de Nacional de Cooperativas de Ahorro y Crédito CEO Oswaldo Oliva about the credit union's expansion into rural agricultural lending. 
Federación de Nacional de Cooperativas de Ahorro y Crédito (FENACOAC) is the WOCCU Guatemalan member association.

The five-year Cooperative Development Program (CDP), also operating in Mexico, is supported by US$4 million in funding from the U.S. Agency for International Development. The program, which runs through 2015, focuses on creating and testing agricultural and financial tools to improve rural economic and financial sector development, personal income and food security.

Program results will include a scalable methodology to increase small farmers' access to markets, inputs and technical assistance. Participating farmers are expected to increase production, improve their livelihoods and offer better financial support to their communities.

"The CDP program at work both here and in Mexico combines new methodologies and technological delivery of financial services to help small Latin American farmers succeed," said WOCCU President/CEO Brian Branch, who led a delegation to both countries last week to evaluate the pilot program's progress since it began in 2010. "With FENACOAC's assistance, we can more effectively help Guatemalan credit unions implement the program among their rural members."

Guatemalan farmer Ángel María Najera Vicente describes how the production of French beans (in background) provides a good return because he and other farmers in his group can use loans from Cooperativa (credit union) Tonantel to cover costs for inputs, labor and maintenance. (Photos provided by the World Council of Credit Unions)
WOCCU and FENACOAC are conducting the program through four credit unions. Cooperativa Tonantel, a credit union located in Guatemala's Jalapa region, is already realizing the benefits of investing in the rural economy, said WOCCU. Tonantel last year added agricultural lending to its portfolio and lowered its interest rates on loans. Membership has since grown by 30% to 70,000 members, and loan delinquency now stands at 1%.

Part of the growth has to do with Tonantel's mobile technology strategies, which involve equipping an on-staff agronomist with a laptop computer, wireless network card and mobile printer to provide financial services to the farmers in their homes and in the fields where they work.

The credit union also is piloting relationships with 18 agent-banking outlets located within local member businesses. The businesses effectively operate as credit union branches, offering member enrollment, deposit withdrawal, bill payment and other services through a designated laptop. Transactions through these remote sites total nearly 400 per month, or about 22 per location.

Low-interest credit union loans also allow farmers to comply with sound agricultural practices that assure greater integrity of the products produced and fewer detrimental environmental impacts from farming operations, WOCCU said. Farmers in Mexico who participate in the CDP program are learning to produce organic coffee in environmentally sustainable ways, which will likely earn higher market prices. Participating Guatemalan farmers are seeking similar results.

"The CDP program helps farmers operate more effectively and in ways that offer good economic outcomes and positive environmental impacts," Branch said. "We believe the success of this model can be put to effective use in other developing countries."

To learn more about the visit at Branch's blog, use the link. For more information about World Council's CDP program, use the link.

CUs prime targets for cyber fraud--CUNA Mutual webinar

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MADISON, Wis. (2/16/12)--Financial services account for about 35% of records compromised by data breaches, according to a 2011 Verizon study. Increasingly, cyber thieves are concentrating on financial service organizations with 10 to 100 employees, the size of many credit unions, the study said.

"Credit unions seem to fit the bill that cyber thieves are targeting" said Ken Otsuka during a CUNA Mutual Group webinar,"Cyber Risks and the Data Breach Hot Seat" on Wednesday. "They are looking for the path of least resistance, which often leads to credit unions."

Otsuka, senior consultant for credit union protection at CUNA Mutual, provided advice on how credit unions can manage cyber/data breach risk.

Encryption is the best starting point to mitigate risk, Otsuka said. "Confidential data at any point should be encrypted," he said.

Encryption should be used to secure communications and data storage, authentication credentials and the transmission of sensitive information. Encryption can be used not only when sending e-mails but also within operating systems, data servers and file systems, Otsuka said.

Credit unions should employ a data loss prevention (DLP) solution, Otsuka said. A DLP helps organizations determine where confidential information is located on file servers and networks. It helps control access and security and distinguishes between authorized and unauthorized users.

For example, a DLP can send notification if an employee is attempting to download confidential data on a flash drive, Otsuka said.

Management of mobile technology also is a risk management area for credit unions, especially as credit unions increasingly use their personal smartphones for business purposes.

Encryption can help mitigate the risk presented by mobile technology, Otsuka said. Also, software is available password protects business data on mobile devices. Smartphones can attract viruses that could compromise business data, he added.

Credit unions are also increasingly providing their board members with tablets, which can download reports with confidential member data, Otsuka said. Again, encryption is an essential preventative. Tablets should be equipped with antivirus software and directors should be prohibited from downloading nonessential applications.

"There should be a corporate policy for the acceptable use of any mobile device," Otsuka said.

Kansas young professionals meet with lawmakers

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CUnext, the Kansas Credit Union Association's Young Professionals Council, met with Kansas Gov. Sam Brownback (middle) during the annual Credit Union Day at the Capitol in Topeka, Kan., last week.
TOPEKA, Kan. (2/16/12)--CUnext, the Kansas Credit Union Association's (KCUA) Young Professional Council, met with Kansas legislators on Feb. 7, during KCUA's annual Credit Union Day at the state Capitol.

Thirteen CUnext members met with Kansas Department of Credit Unions Administrator John Smith and House Speaker Pro Tem Representative Jene Vickrey. Members also learned the importance of advocacy and about the International Year of the Cooperatives, and met Kansas Gov. Sam Brownback.

CUnext member Farron Lynch attended the event, and encouraged other young professionals to consider joining CUnext.

"Since joining, I have been given excellent opportunities that I would not have had otherwise to meet and exchange ideas with my colleagues in the credit union world, " said Lynch, member services representative and Gen Y representative at Central Star CU in Wichita. "I was introduced to a passion for the credit union movement that was evident in all the executives, association staff, and the lobbyists that work extremely hard to ensure the future of all Kansas credit unions."

From left, CUnexter Jaclyn Lawson, of Quest CU in Topeka, Kan., joins advocates and fellow Quest colleagues Vickie Hurt and Valerie Taylor, in meeting with Kansas State Rep. Kay Wolf (R-21), second from right, at the Kansas Credit Union Association legislative reception. (Photos provided by the Kansas Credit Union Association)
CUnexters represented seven Kansas credit unions including Central Star CU; Golden Plains CU, Garden City; Mainstreet CU, Lenexa; Meritrust CU, Wichita; Mid American CU, Wichita; Quest CU, Topeka; and Wichita (Kan.) FCU.

"To actually see the immediate empowerment that seemed to take hold with our group was encouraging," said Lee Williams, president/CEO of Central Star CU. "Currently more than 35% of our staff is under the age of 30, and the CUnext program offers us the opportunity to expose, teach and include our young professionals so they are better prepared and more committed to taking the credit union movement to the next level."

The CUnext Council joined more than 125 credit union representatives statewide for the evening legislative reception and the morning leadership panel. They were accompanied by veteran credit union representatives on their legislator visits.

This is the second year for such an event, and each young professional event seems to grow in numbers, KCUA said.

"Last year was the first year we prepared a specific agenda for our young professionals," said Haley DaVee, KCUA vice president of governmental and public affairs, and the CUnext coordinator. "It was very well received, and since then, we've had several meetups including a special event at our annual meeting and convention."

CU System briefs (02/15/2012)

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  • KALAMAZOO, Mich. (2/16/12)--Mysterious valentines appeared Tuesday at a number of branches of Kalamazoo, Mich.-based Consumers CU.  The spray-painted hearts were visible on the front lawns at several offices, including this one at the credit union's Cambridge office. The $358 million asset credit union says it has "no idea" where the hearts came from, but the hearts are "proof" that the credit union loves its members.  A member seen entering the building commented that Consumers CU is her "one true love." Another member said he would bring his Valentine's Day date back later.  In addition to the Cambridge branch, hearts were also found at its Stadium Drive office, Ninth Street office, West Main office and Member Service Center.  (Photo provided by Consumers CU) …
  • RALEIGH, N.C.  (2/16/12)--Coastal FCU announced Wednesday that President/CEO Larry Wilson will retire at the end of June, after 38 years at the helm of the Raleigh, N.C.-based credit union. Coastal's board has selected Executive Vice President/Chief Operating Officer Chuck Purvis to succeed Wilson, effective July 1. In 1974, Wilson joined what was then IBM Raleigh Employees FCU as general manager. At that time the credit union had three employees, $3.5 million in assets and served 3,900 local IBM employees. Today, Coastal has $2 billion in assets, 400 employees serving more than 190,000 members representing more than 1,200 organizations. During his 40 years with credit unions, Wilson has served on the Federal Home Loan Mortgage Corp. Advisory Committee, the Federal Reserve Thrift Advisory Council, and the Fannie Mae National Housing Advisory Council.  He has served director for the Credit Union National Association, the North Carolina Credit Union League and other national organizations including two corporates. Purvis, who has 30 years' experience in the industry, has been with Coastal's management since 2001. Wilson will continue to advise Purvis and Coastal's board through the rest of 2012 …
  • GROTON, Conn. (2/16/12)--Charter Oak FCU has been approved as a U.S. Small Business Administration  (SBA) lender, authorized to offer SBA 7a, 504 and Express loans to qualified business owners in New London and Windham Counties, Connecticut. The Groton, Conn.-based, $688.3 million asset credit union is also Eastern Connecticut's No. 1 mortgage lender and in November it received CUNA Mutual Group's Excellence in Lending Award.  The government-backed loans are designed to encourage growth and development of small businesses. They feature longer-term financing and lower down-payment requirements to help business owners finance new business, expand or modernize facilities, acquire commercial real estate, purchase business equipment, consolidate debt, increase working capital and more, said the credit union's website.  The Credit Union National Association and credit unions are urging Congress to raise the cap on credit unions' member business lending to 27.5% of assets from 12.25% . Doing so would mean $13 billion more available for new small business loans and the creation of 140,000 jobs, without cost to the taxpayer …

Oregon banks oppose plans to move city deposits to CUs

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PORTLAND, Ore. (2/15/12)--The Oregon Bankers Association is opposing a proposal by Portland, Ore., Mayor Sam Adams to move some city funds to local credit unions and smaller banks. However, the Northwest Credit Union Association (NWCUA) says the city should keep local funds local.

"This is just positioning on behalf of the Oregon Bankers Association and nothing new," said Stacy Augustine, NWCUA senior vice president and general counsel.

"How the public's money is safeguarded and managed should indeed be the paramount concern for the City of Portland when it comes to its banking relationships, just as [Oregon Bankers Association CEO Linda] Navarro pointed out," Augustine told News Now. "We just think the city should consider keeping local funds local."

According to an article in the Portland Business Journal, the bankers association and Wells Fargo oppose the proposal, which would direct the city treasurer to deposit up to $250,000--the maximum that is insured-- into 10 credit unions and other community banks during 2012. The city also would deposit more than $250,000 in a single credit union if it meets certain criteria.

The bankers association, in a letter to the mayor, brought up the old  "credit unions were meant to serve people of modest means" rhetoric and said the city would lose tax revenues if it moved its deposits to credit unions. Wells Fargo, which had won the bidding process in 2009 to provide financial services to the city, said in another letter it considered itself a local bank that makes lending decisions locally and keeps deposits in the Portland market.

The article said public sentiment heavily favors the proposal with 15 of 17 comments on the city's website supporting the plan. In addition, 12 comments that were e-mailed to the mayor also favored the move.

CMCFCU members vote to merge with Members First

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MIDLAND, Mich.  (2/15/12)--Members of Central Michigan Community FCU, Clare, Mich., voted last week in favor of its merging with Members First CU, Midland, Mich. The continuing credit union will be Members First, effective June 1.

Central Michigan members voted five to one in favor of the merger ( Feb. 13). Michigan's Office of Financial and Insurance Regulation and the National Credit Union Administration already had approved the proposal to merge.

The merger will combine Members First's assets of $191 million and Central Michigan Community's assets of $110 million into a combined $310 million asset credit union serving 30,000 members.

Central Michigan was established in 1948 to serve employees of Clare Manufacturing Co. before expanding into a community chartered credit union. Michigan First was established to serve school employees.

MetaBank settles with CU over fraud

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BERLIN, N.H. (2/15/12)--A notice of settlement was filed Feb. 6 in a U.S. District Court in Concord, N.H., for a class action lawsuit brought by lead plaintiff Guardian Angel CU, Berlin, N.H., and other financial institutions against  Iowa-based MetaBank and Meta Financial Group. The financial institutions sought funds they lost when a MetaBank employee embezzled more than $4 million by selling false certificates of deposit (CDs).

Terms of the settlement were not disclosed. The order filed by U.S. District Judge Paul Barbadoro gave the parties 20 days to file any objections  or motions to intervene, with written responses  due in 30 days. A hearing has been scheduled for March 26 to work out final approval, according to the court document.

Barbadoro in July had refused to dismiss the case, in which Guardian Angel and 34 other depository institutions alleged the bank had breached its contract by negligently allowing an employee to steal about $4 million in 2005 ( Feb. 14). His decision did not allow punitive damages or attorney's fees.

The former MetaBank employee, Charlene Marie Pickhinke of Sac City, Iowa, who was a branch office supervisor, was sentenced in 2009 to seven years in a federal prison after pleading guilty to one count each of wire fraud, making a false statement in a bank's books or records, money laundering and aggravated identity theft.  She had faced a possible sentence of 82 years in prison.

Pickhinke worked for the bank from 1979 to 2007 and allegedly sold the CDs, suing MetaBank's name, via an independent broker. She instructed purchasers to wire the funds into one of several false accounts she created at the bank. About 50 credit unions and banks lost funds when she sold the fake CDs and pocketed the money (Des Moines Register July 11, 2009 and News Now July 14, 2009). 

MetaBank's parent company, Meta Financial Group, is based in Storm Lake, Iowa. MetaBank has 13 branches and $686 million in assets.

Guardian Angel, which has $41 million in assets, lost about $99,000 in April 2005, according to the original complaint. Four credit unions were among the eight groups that sued MetaBank in 2008 and 2009 over the fraudulent transactions.

CUNA committee releases board succession planning paper

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MADISON, Wis.  (2/15/12)--A new white paper from the Credit Union National Association (CUNA) reveals that most credit unions do not have a reliable system for attracting the next generation of board members.

CUNA's paper examines the demographics of community credit union board members, the issues that arise from the findings and strategies for successful board succession and retention.

The paper, "Effective Credit Union Board Succession Planning," commissioned by CUNA's Community Credit Union Committee, evaluates the changing demographics of community credit union board members and notes that many boards struggle to reflect the growing diversity of their members, with women and minorities being underrepresented.

Through credit union case studies and a list of expert recommendations, the paper shows how successful board succession planning looks in the real world, discusses what credit unions can do to reverse certain negative trends and provides instructions for how credit unions can prepare for the future.

Some example topics include:

  • Creation of an associate director program;
  • (Re)consideration of term limits;
  • Development of an "evergreen" list; and
  • Continuing education requirements.

"CUNA's Community Credit Union Committee has done an excellent job of identifying and addressing a critical issue facing many credit unions," said Todd Spiczenski, CUNA vice president for the center for professional development.

"Many credit unions face serious problems if board succession plans are not effectively put into place and changes are made to attract new board members," he added. "This white paper provides many practical tips and suggestions that any credit union can incorporate into its daily operations to reverse the worrisome trends seen in board demographics."

To view the full white paper, at no cost, use the link.

To learn more about CUNA's Community Credit Union Committee and its mission, use the link.

Oscar winner Maine CUs announce 450K raised for hunger

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PORTLAND, Maine (2/15/12)--Maine credit unions raised $446,929.56--an increase of nearly $45,000 over last year's record--during their 2011 Campaign for Ending Hunger, the Maine Credit Union League announced Monday.

Maine credit unions raised $446,929.56 during their Campaign for Ending Hunger in 2011. The Maine Credit Union League made the announcement Monday during the Thaw to End Hunger Celebration Event. Pictured, from left, are Luke Labbe, chair of the league's Social Responsibility Committee; Ernest Thompson, Academy Award Winning writer of the movie "On Golden Pond"; John Murphy, president of the Maine Credit Union League. (Photo provided by the Maine Credit Union League)
In addition to raising a record-setting amount in 2011, the campaign also surpassed the $4 million milestone in funds raised since the campaign began 22 years ago. 

"The generosity of the over 615,000 credit union members in Maine is extraordinary," John Murphy, league president of the Maine Credit Union League said during the Thaw to End Hunger Celebration Event on Monday. "This marks the 16th consecutive year that the Campaign has raised a record-setting total, and the milestone of the campaign surpassing the $4 million mark in funds raised since the campaign began--a remarkable effort in such a challenging economy."

The celebration was a luncheon event, and featured an address by award-winning author Ernest Thompson, who helped to unveil the big check announcing the total raised.

Ernest Thompson won an Academy Award and Golden Globe for writing the classic film, "On Golden Pond," which is based on Thompson's summers at Belgrade Lakes in Maine. "On Golden Pond" was named as one of the Top 100 romantic films of all time by the American Film Institute.

Since 1990, the Maine credit unions' campaign has raised more than $4.3 million. All money raised goes directly to end hunger and stays in Maine.

W.Va. CUs gain press for outpacing national growth

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PARKERSBURG, W.Va. (2/15/12)--West Virginia credit unions' assets grew 6.6% as of June 30 from June 2010--more than double the national median rate of 3%. Full 2011 figures are not yet available.

Projecting out to year-end 2011, credit union assets in the state will exceed $3 billion for the first time--a significant milestone, said Rich Schaffer, senior vice president of the West Virginia Credit Union League (Charleston Gazette Feb. 12).

In the mid-1990s, credit union assets in the state surpassed $2 billion, which was a big accomplishment, he told the newspaper.

Those figures don't include the effects of Bank Transfer Day on Nov. 5 and its aftermath, the paper said.

Also, loans at West Virginia credit unions grew modestly in the year ending June 30--rising 0.4%--but besting the national median, which was a 2.1% decrease.

Citing auto loans as the "bread and butter" of credit unions, Schaffer told the paper he predicts a full percentage point gain in the state's credit union loans for calendar year 2011.

Co-op launches mobile app to log volunteers hours

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CABOT, Vt. (2/15/12)--Cabot Creamery Cooperative has launched Reward Volunteers, the first U.S. mobile app that allows volunteers to log hours, post to Facebook and win rewards for themselves and the organizations they serve. 

The app is one of the International Year of Cooperatives' initiatives developed under the auspices of the National Cooperative Business Association's International Year of the Cooperatives Steering Committee, which includes CUNA among its members.

Cabot Creamery is a sponsor of CUNA's weekly Home & Family Finance Radio program.

Reward Volunteers is easy to use, said Cabot Creamery. Volunteers select the organization for which they are volunteering, log the length of time volunteered, and post their efforts on Facebook. They can win prizes for themselves and nonprofit organizations by increasing their logged hours, sharing post/photos, sending e-mails, and securing Facebook "likes" for their volunteer posts.

To download the free app, visit iTunes.

Cabot developed Reward Volunteers in collaboration with Chalo Inc., a social business start-up. It can be used on the iPhone, iPad, iPod Touch, and as a Web-based program on

For more information, use the link.

CMG CEO featured on Discovery webinar Feb. 29

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MADISON, Wis. (2/15/12)--CUNA Mutual Group President/CEO Jeff Post will present a Discovery Webinar "Special Feature" on risks and opportunities facing credit unions at 12:15 p.m. CT Feb. 29.

The webinar will be followed by a live question-and-answer session.

"Navigating Today's Risks to Capitalize on Today's Opportunities," recorded at a recent presentation Post made to a Louisiana Credit Union League Roundtable, will be presented as part of the Discovery Webinar series.

The 75-minute event is free. Credit unions can register online. Use the link.

Post will spell out the many challenges facing credit unions, including global economic duress, regulatory issues and new competition. He also will tell credit unions that business as usual is no longer an option and that there are opportunities for organizations with strong leadership.

"Credit unions can differentiate themselves and take advantage of the anger many consumers are feeling over big banks, but it will require clear strategies and sound expense management," Post said. "Credit unions cannot let themselves become paralyzed by the risks they face."

CUNA Brokerage names 2012 women of distinction

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MADISON, Wis. (2/15/12)--CUNA Brokerage Services Inc. is honoring 24 financial advisers with Women of Distinction awards for their superior performance, value to their investment and insurance programs, exceptional client service, and contribution to the financial services industry and the company.

Created by women, for women, the Women of Distinction awards recognize the top performing female financial advisers within CUNA Brokerage Services' broker/dealer operation nationally.

"Their contributions to the clients they serve, the financial services industry and to the women they mentor are exemplary and worthy of recognition," said Jim Metz, president of CUNA Brokerage Services, Inc.

Candidates are nominated by industry peers. Then, selections are based on the nominee's annual performance and outlined contribution to their clientele, the credit unions they serve and the financial services industry. 

Award recipients participate in a national mentoring program to work with other female advisers who are new to the industry or those who wish to grow in their profession.

2012 Women of Distinction recipients include:

  • Catherine Barnes, VyStar CU, Orange Park, Fla.;
  • Emmor Boslet, Belco Community CU, Camp Hill, Pa.;
  • Julie Brand, First Light FCU, El Paso, Texas;
  • Jody Brown, Summit CU, Madison, Wis.;
  • Jane Brockway, University of Illinois CU, Champaign, Ill.;
  • Kathy Chesney, Pacific Marine CU, Oceanside, Calif.;
  • Ellen Coppinger, Y-12 FCU, Oakridge, Tenn.;
  • Wendy Cundari, North County CU, San Diego, Calif.;
  • Carol Diest, First Community FCU, Kalamazoo, Mich.;
  • Judy Ebert,  Deere ECU, Moline, Ill.;
  • Mary Finnegan-Ongaro, Members Cooperative CU, Duluth, Minn.;
  • Leigh Glover, Southeast Financial FCU, Brentwood, Tenn.;
  • Kim Hamblin, America First CU, Ogden, Utah;
  • Tiffany Haupert, Beacon CU, Wabash, Ind.;
  • Anna Kamp, Anheuser-Busch Eemployees CU, St. Louis;
  • Jane Kilby, VyStar CU, Orange Park, Fla.;
  • Michelle Luce, Great Northwest FCU, Aberdeen, Wash.;
  • Stephanie Morales, Arizona Central CU, Phoenix, Ariz.;
  • Pamela Schwartz, Alcoa Tenn FCU, Alcoa, Tenn.;
  • Swan Shen, RTN FCU, Waltham, Mass.;
  • Kim Shirk, Heritage CU, Newburgh, Ind.;
  • Cindy Sforza, Schools First FCU, Huntington Beach, Calif.;
  • Suzi Williams, Yakima Valley CU, Yakima, Wash.; and
  • Gale Zumpano; Alabama CU, Tuscaloosa, Ala.

CUNA Brokerage Services Inc. uses face-to-face financial advisers to help credit unions meet member retirement, investment and insurance needs. Working onsite at credit unions, financial advisers provide members with financial services from simple transactions to complex financial planning and wealth management services.

Kansas CUs meet with lawmakers recognized as co-ops

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TOPEKA, Kan. (2/15/12)--The Kansas Credit Union Association's (KCUA) Annual Day at the Capitol attracted 140 credit union representatives from across Kansas to the Statehouse on Feb. 7 to discuss key issues affecting the state's 100 credit unions and the 625,000 members they serve.

Kansas Credit Union Association President/CEO Marla Marsh with Kansas Treasurer Ron Estes during KCUA's Annual Day at the Capitol Feb. 7. Kansas credit unions partner with Estes' office to bring financial literacy programs like Money$mart camps to schools.
Legislators in both the Kansas Senate and House of Representatives recognized 2012 as the International Year of Cooperatives during their sessions, and Kansas credit unions were acknowledged for their role in the cooperative industry.

State Sen. Marci Francisco (D) said she was glad to see credit union representation in the audience during the cooperative recognition program.

"I want to thank all the members of credit unions, and all the other cooperatives that are doing business in every county in our state as financial associations, rural electricity and telecommunication providers, natural foods grocery stores, housing co-ops, and grain and supply distributors," Francisco said. "Their members are not only helping themselves and their families, but also helping make our communities great places to live."

Attendees discussed the state of the financial services industry in Kansas and told legislators they were concerned with steep compliance costs associated with growing regulatory issues. Credit union representatives also reminded policymakers that credit unions are a valuable option for consumers and that they remain strong and well-capitalized.

Lee Williams, right, CEO of Central Star CU, Wichita, Kan., talks with State Sen. Dick Kelsey and wife Doris Kelsey at the Kansas Credit Union Association's Annual Day at the Capitol. (Photos provided by the Kansas Credit Union Association)
"Kanas credit unions continue to lend to and serve the state's 625,000 credit union members, and are faring better than credit unions nationwide," said Marla Marsh, KCUA president/CEO.

"We appreciate legislators recognizing the services that we provide to Kansas communities," Marsh said.

In addition to meeting with state legislators, credit union staff heard from Senate President Stephen Morris (R), Senate Minority Leader Anthony Hensley (D), House Majority Leader Arlen Siegfreid (R), and House Minority Leader Paul Davis (D) during an afternoon leadership panel.

After visits with legislators at the Capitol, the participating credit unions met in asset-size roundtables to discuss issues specifically related to their asset category.

During the event, KCUA's Young Professional Council also met with lawmakers. Watch for a story about that later this week in  News Now.

League valentine unveils expanded Facebook page

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ALBANY, N.Y. (2/15/12)--The Credit Union Association of New York (CUANY) unveiled its expanded Facebook page Tuesday, with a Valentine's Day promotion, "You Don't Have to Love Us…Just Like Us!" to build awareness of the changes.

Click to view larger image Click for larger view
"Social media has been a growing area of focus for the association, as I believe it has for all organizations," said William J. Mellin, CUANY president/CEO. "We've watched its progression and have been evaluating how we can use social media to be of better service to our credit unions, built a real sense of community and offer an engaging social media destination for New York credit unions."

The page, at,  includes association updates, industry news, exclusive tools and resources, photos and more. It offers a fresh look at the association's four core areas of service: governmental affairs, regulatory compliance, education and training, and outreach. It also highlights CUANY's member relations team, includes a new tab housing its blog, and has tabs so visitors can follow tweets from Mellin and the association's senior vice president, general counsel and lobbyist, Michael Lanotte.

The association will conduct a drawing to win one of 50 custom-designed T-shirts as part of the promotion. Deadline for the drawing is Feb. 29.

CU System briefs (02/14/2012)

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  • COLUMBUS, Ohio (2/15/12)--Three credit union executives from Northeast Ohio traveled to Capitol Hill in Washington, D.C.,  last week to encourage lawmakers to back legislation that would enable credit unions to do more member business lending (MBL), according to Crain's Cleveland  (Feb. 13). They were accompanied by representatives from small businesses and discussed raising the MBL cap to 27.5% from 12.25% to provide more business lending to small businesses when they need it the most. The current cap deters credit unions from seriously pursuing MBL activities, the group said. In the article, Paul Snyder, vice president for marketing at CSE FCU, Canton, told lawmakers it is building a fourth branch but not expanding its MBL or related staff because of the cap.  The Ohio Credit Union League was quoted in the article saying a handful of credit unions in the state are close to bumping the current cap.  The Credit Union National Association and credit unions are urging Congress to raise the cap so credit unions can inject $13 billion in loans into the economy and create 140,000 new jobs, at no expense to the taxpayer …
  • LEXINGTON, Ky. (2/15/12)--The Lexington, Ky.-based University of Kentucky FCU's  (UK FCU) "Lipstick on a Bank" campaign, with the slogan, "You can put lipstick on a bank, but it's still a bank," is attracting attention. To get across the message that UK FCU is a better value than a bank and that consumers can kiss bank fees goodbye, the campaign uses bright pink lipstick marks on  billboards around the city, in-branch signage, post cards, and buttons for sales staff. It also gives away Chapstick and has a microsite, Since the campaign began at the beginning of the year, the site has had more than 2,600 unique visitors …
  • SOUTH BURLINGTON, Vt. (2/15/12)--NorthCountry FCU, based in South Burlington, Vt., has selected its executive vice president, Bob Morgan, to succeed John Benoit as CEO, announced Kathy Sweeten, chair of the credit union's board of directors. Benoit, who  will retire after 30 years at the credit union, will officially step down in March but will retain the title of president through the completion of several large projects this year, said the Association of Vermont Credit Unions (Newslines Express Feb. 10). His official departure date has not been determined. Under his leadership, the credit union grew from $6 million in assets to more than $350 million, with six branches serving members. Morgan has worked with the credit union since 2000. He serves on the Association of Vermont Credit Unions' board of directors, where he has chaired the Social Responsibility Committee since 2006  …

NCUA urges courts to continue its suits vs. Goldman RBS

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LOS ANGELES (2/14/12)--The National Credit Union Administration (NCUA) Friday filed consolidated briefs opposing motions to dismiss its lawsuits in federal courts in California and Kansas against Goldman Sachs & Co. and RBS Securities for selling residential mortgage backed securities (RMBS) that caused losses to U.S. Central FCU and the Western Corporate FCU.

Dismissals had already been tentatively ruled in the U.S. District Court for the Central District of California--Western Division (Los Angeles) in another suit NCUA had brought against RBS Securities (News Now Feb. 1).

In the case against Goldman Sachs, filed in that same court in Los Angeles over 13 RMBS certificates, NCUA's response reiterates its arguments that the loan originators "systematically disregarded their stated underwriting standards and routinely made loans where no or insufficient compensating factors existed." When the loans were repackaged into RMBS, "those deficiencies caused the certificates to be worth far less than their purchasers paid. In light of such pervasive disregard, the stated underwriting standards might as well not have existed."

NCUA also noted that "virtually every court addressing claims concerning similar RMBS offerings has denied motions to dismiss--16 in all…In six prior cases, underwriter Goldman raised and lost the identical arguments it advances here, against complaints with less-detailed allegations than NCUA's complaint."

The agency challenged the assertion that statutes of limitations have run on its claims. It also noted its federal claims are timely because they were brought within three years of NCUA's placing the credit unions into conservatorship and that Congress' "extender statute" allowed NCUA more time to bring the claims.

The crux of NCUA's arguments is that the securities documents materially represented compliance with the stated underwriting standards and that its allegations in the Goldman case are stronger than those upheld in numerous RMBS cases. The agency alleges actionable misrepresentations and omissions regarding loan-to-value ratios and credit enhancement, and said the credit unions could not reasonably have discovered the falsehoods before March 20, 2008.

It also said that two tentative rulings by the court in California on the RBS case are "erroneous, in light of the persuasive reasoning of numerous other courts" and in light that Goldman already has paid the largest fine in history to resolve RMBS fraudulent sales claims, while another RBS has "not (yet) been found to have engaged in such misconduct."

NCUA's response to the motion to dismiss its case against RBS Securities in the U.S. District Court for the District of Kansas, also filed Friday,  uses similar arguments, alleging "actionable misrepresentations and omissions about systematic disregard of underwriting standards" in the sale of securities to U.S. Central.

"Virtually all courts to address similar issues have held that an RMBS purchaser can state a claim under the securities laws by alleging that the loans backing an RMBS were originated in systematic disregard of the stated underwriting standards," said NCUA's response to the motion to dismiss the case in Kansas.

NCUA has filed a total of five lawsuits related to the RMBS: two against RBS Securities, one against Goldman Sachs, one against JP Morgan Chase, and one against Wells Fargo Securities LLC (formerly Wachovia Capital Markets LLC).

In addition to the tentative ruling from the court in California that indicates a dismissal is likely in the RBS Securities suit there, the U.S. District Court in Kansas overseeing the Wachovia case has ordered NCUA to show cause why that suit shouldn't be dismissed for lack of prosecution (News Now Feb. 6).

NCUA's suits against Citigroup and Deutsche Bank Securities were settled for a combined $165.5 million, with neither bank admitting any fault (News Now Nov. 15).

CUNA to IWash PostI CUs planning for end of GSEs

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WASHINGTON (2/14/12)--Credit unions already are planning for what could happen when the government winds down Fannie Mae and Freddie Mac, the most active buyers of residential mortgages on the secondary market. Losing the mortgage giants would impact smaller financial institutions, the Credit Union National Association (CUNA) told the Washington Post Sunday.

"Credit unions individually are fairly small in this business," said Bill Hampel, CUNA chief economist in the article. "But if there's no publicly supported vehicle to secondary markets, each credit union would be so small that they would not get good pricing or access. And that would cost credit union members."

CUNA is talking with the Treasury Department about the future of the two government-sponsored enterprises, but credit unions also are working on contingency plans, Hampel told the newspaper. 

One solution could be greater reliance on credit union service organizations (CUSOs), he said.  CUSOs enable institutions of all asset sizes to make loans by collectively managing the risks. 

Traditionally, credit unions keep most of their mortgage loans on their books. CUNA estimated that credit unions sold between 25% and 40% of their mortgage loans before the financial crisis, and those percentages increased when interest rates dropped and spurred demand for mortgages.

Since private investors are inactive in acquiring mortgages, credit unions and other originators are questioning how the industry will function without Fannie and Freddie or without government support.

Juli Anne Callis, CEO of National Institutes of Health (NIH) FCU, Rockville, Md., also was interviewed for the story. She noted that private investors haven't stepped up yet although there are discussions.

For the full article, click the resource link.

aSmarterChoice makes IMSN MoneysI Best money websites

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NEW YORK (2/14/12)--The "Find a Credit Union" site, which now points to credit unions'  aSmarterChoice, org, has made MSN Money's list for the "102 best money websites." Find a Credit Union was one of five sites in the saving and investing category, none of which were bank sponsored sites.

"Credit unions offer better rates on savings and on loans than most banks. If you're not already a member, this handy tool helps you find credit unions you may be eligible to join," said personal finance writer Liz Weston, in explaining why it's on her list.

Weston called the list "an incredibly personal list." "These are the sites I like, the ones I consistently turn to for good information, solid advice, unique perspectives, really cool tools and, in at least a few cases, good laughs," she wrote. "They're sites that consistently offer something their competitors don't, which makes them worth investing my scarcest resources: time and attention."

To view the full list use the link.  Find a Credit Union/aSmarterchoice is on page three.

Teenager killed in shootout with police outside CU

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WEST PALM BEACH, Fla. (2/14/12)--An 18-year-old who opened fire in the parking lot of a Florida credit union was shot and killed Friday afternoon by sheriff's deputies responding to a 911 call about a man firing shots in the air with a rifle.

Palm Beach County sheriff's office said the shooting took place at about 4 p.m. outside the West Palm Beach-based  Palm Beach County (PBC) CU when Christopher Brown, 18,  of Palm Springs, allegedly starting firing a rifle that had a high capacity magazine,  capable of storing  more than 50 rounds of ammunition (Palm Beach Post Feb. 10 and Feb. 11 and Feb. 10).

When deputies arrived, Brown allegedly fired shots at a deputy's cruiser, hitting it three times and flattening a tire, said Sheriff Ric Bradshaw (South Florida Sun Sentinel Feb. 11). The three deputies returned fire, and Brown died at the scene.

None of the deputies and no one inside the credit union were injured. The credit union was servicing about 10 members when the incident occurred.  Someone in the credit union made the initial 911 call, saying there was a man in the parking lot with a rifle.  One member told local reporters she was opening a savings account and thought the blasts were fireworks ( Feb. 10).

The sheriff's department said that the call possibly averted a larger tragedy. It was unknown whether Brown had intended to rob the credit union or why he was there.  A bomb squad was sent to check a backpack inside a car that was left running in the parking lot, but found nothing harmful in the backpack.

The deputies involved in the incident  have been placed on administrative leave, which is the routine procedure while the sheriff's office investigates the circumstances.

Pro Blockbuster award entries due April 11

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MADISON, Wis. (2/14/12)--The Credit Union National Association is accepting entries for Pro and Blockbuster Awards. The awards recognize outstanding league and league service corporation (LSC) communications efforts.

The deadline for submitting entries is April 11. Awards will be presented at the American Association of Credit Union Leagues (AACUL)/Governmental Affairs and Political Specialists (GAPS)/Communicators Conference in Washington, D.C., June 6-8.

This year marks the 34th year that the Pro and Blockbuster Awards have recognized outstanding league and LSC communications efforts.  Pro Awards honor the best in public relations and publications. Blockbuster Awards pay tribute to excellence in marketing and advertising. These awards are the highest communications awards bestowed on leagues and LSCs.

To enter, follow the entry guidelines described. Entries not submitted as directed may be disqualified.

All the information needed on the awards and how to submit entries is in the call for entries document sent to state leagues. Contact Richard Dines at or at 800-356-9655, ext. 6721, for more information.

Iowa CUs legreg conference kicks off today

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DES MOINES, Iowa (2/14/12)--The Iowa Credit Union League will hold its annual Legislative & Regulatory Issues Conference today and Wednesday in Des Moines.

More than 100 Iowa credit union representatives are expected to attend and learn more about the legislative and regulatory issues affecting the credit union industry.

Paul Begala, CNN political analyst, will be the keynote speaker today. He will dissect the Republican race for a presidential nominee, discuss Congress and the Obama administration, and examine whether a divided House and Senate will help or hinder both political parties as they look to grow their influence over the electorate ahead of the 2012 elections.

Other speakers include:

  • Bill Cheney, president/CEO of Credit Union National Association;
  • U.S. Rep. Tom Latham (R-Iowa);
  • Iowa Gov. Terry Branstad; and
  • JoAnn Johnson, superintendent of the Iowa Division of Credit Unions.
Additional sessions include a state legislative panel session led by Jack Kibbie (D-4) from the Iowa Senate and Stew Iverson (R-9) from the Iowa House of Representatives, and observations from Iowa's major reporters, including political reporters.

Ohio league valentine Why CUs love people like no other

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COLUMBUS, Ohio (2/14/12)--In recognition of Valentine's Day, the Ohio Credit Union League has offered six ways that credit unions love their members like no other financial institution.

"Most people would not use the word 'love' when describing their financial institution," said Paul Mercer, president of the league. "However, credit union members love the fact their financial well-being is what credit unions strive for, and that credit unions always have their best interest in mind. Members certainly feel the love in their wallets."

Here are six ways credit unions love their members:

  • Credit unions care about their members. Credit unions are not-for-profit financial institutions that exist to provide affordable financial products and services that better their members' lives. In fact, according to the Credit Union National Association, credit unions put $120 million dollars in the pockets of Ohioans last year (June 2010-June 2011) thanks to direct member benefits.
  • Credit unions love their members back. Credit unions return any profits they make back directly to theirs members. That translates to low interest rates on loans, better rates on saving, low fees, new products and convenient services.
  • Credit unions are not selfish. Not only do credit unions love their members, but they love the communities they serve. According to a survey by the league, 93% of credit unions in the state spent $674,000 to provide financial education in 2010.
  • Credit unions are romantic. Credit unions were created by working-class Americans who could not afford services provided by for-profit financial institutions. The grandparents or great-grandparents of many consumers helped found credit unions.
  • Credit unions are there when their members need them. Many credit unions belong to Shared Branching, a network of more than 4,400 branch locations nationwide. In Ohio, credit unions members can make fee-free transactions at more than 300 locations, making Shared Branching the fifth largest branch network in the state.
  • Credit unions don't break their members' hearts. Once a consumer joins a credit union, he or she is a member for life.

Iowa governor notes Dupacos small biz loan efforts

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DUBUQUE, Iowa (2/14/12)--Iowa Gov. Terry Branstad Friday  highlighted Dubuque-based Dupaco Community CU's role in helping an Iowa small business grow and create jobs.

Iowa Gov. Terry Branstad Friday noted Dupaco Community CU's role in helping the Unified Therapy Services grow and create jobs during a visit Friday to the award-winning business. From left: Rick Dusil, Dupaco business lending vice president; Gina Blean, Unified Therapy Services co-owner; Terry Branstad; Kelly Heysinger, Unified Therapy Services co-owner; Joe Hearn, Dupaco chief operating officer; and Bob Hoefer, Dupaco president/CEO.
Gina Blean and Kelly Heysinger, co-owners of Unified Therapy Services, met with Branstad and provided a tour of their business--a pediatric-focused outpatient therapy clinic.

Dupaco representatives Bob Hoefer, president/CEO; Joe Hearn, chief operating officer; Rick Dusil, business lending vice president; and David Klavitter, marketing senior vice president, participated in the Branstad event.

Unified Therapy Services launched in 2006 and has grown with the help of member business loans from Dupaco Community CU and assistance from the credit union's business lending team.

"I'm happy to see Iowa businesses grow, prosper and create jobs, with help from the Small Business Administration and Dupaco," said Branstad during his tour.

Blean and Heysinger were named the 2011 Iowa Small Business Persons of the Year by the U.S. Small Business Administration.

The clinic provides physical, occupational and speech language therapy services. Through several programs, Unified Therapy Services helps children dealing with everything from a sprained ankle or trouble pronouncing the "s" sound, to a diagnosis of autism or Down syndrome.

Unified Therapy Services started with three employees, and today has a staff of 26.

Dupaco Community CU President/CEO Bob Hoefer (middle) talks with Iowa Gov. Terry Branstad (right) during the governor's visit Friday with the 2011 Iowa Small Business Persons of the Year in Dubuque, Iowa. (Photos provided by Dupaco Community CU)
In the beginning, the clinic was in a leased 4,000-square-foot space. But Blean and Heysinger soon purchased a facility more than double that size. "And now we're outgrowing this," said Blean.

Branstad talked with employees of Unified Therapy Services upon arriving and also visited with patients.

Iowa Gov. Terry Branstad highlighted Dupaco Community CU role in helping an Iowa small business grow and create jobs in the state on Friday.

The Credit Union National Association and credit unions have been pressing for Congress to raise the member business lending limit to 27.5% of assets from the current 12.25% of assets. Doing so would provide $13 billion to lend to small business owners. Injecting that amount into the economy would create roughly 140,000 new jobs at no cost to the taxpayer.

CUNA also sponsored a Small Business Hike the Hill event in Washington, D.C. to support the MBL cap increase.

MnCUN column CUs ready to boost biz lending in 2012

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ST. PAUL, Minn. (2/14/12)--Minnesota credit unions increased their small-business lending in the fourth quarter 2011 amid stagnant bank lending, according to a column written by the  Minnesota Credit Union Network (MnCUN), which was published in an area business newspaper.

In a Finance & Commerce column titled, "Association Update: Credit unions prepared to boost lending in 2012," Mark Cummins, MnCUN president/CEO, contrasted credit unions' willingness to help small businesses with that of banks.

"Despite the need for businesses to grow, a Finance & Commerce article last week highlighted that bank lending stalled in the fourth quarter," Cummins wrote. "With the headline 'Lending goes nowhere in Q4,' the article stated that 'the obstacle to new loans remains largely about weak demand.' Even so, many credit unions have experienced the opposite, citing increased demand. Perhaps this issue deserves a second look.

"Credit unions are eager to increase their efforts to help Minnesota's small businesses obtain funds," he continued. "Minnesota credit unions' business lending activity increased by nearly 3% over the past quarter and 8% over the past year. They would like to increase their lending even more but are prevented from doing so by a cap that limits member business lending (MBL) activities to 12.25% of assets."

Credit unions nationwide have millions of dollars they could lend to job creators if Congress would repeal the regulations that prevent them from lending that money out, Cummins wrote.

"America's small businesses are the engine of growth for our nation's economy. Today, small businesses need more options, and credit unions are in a position to help," he concluded.

The Credit Union National Association (CUNA) and credit unions are pressing 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 $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.

CUNA also sponsored a Small Business Hike the Hill event last week in Washington, D.C., in support of the MBL increase.

To read the column, use the link.

Fitch affirms Mid-Atlantic Corporates ratings after merger

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MIDDLETOWN, Pa. (2/14/12)--Fitch Ratings affirmed Mid-Atlantic Corporate FCU's ratings after the corporate's recent merger.

Mid-Atlantic Corporate in Middletown, Pa., and VACORP FCU, Lynchburg, Va., completed their merger and opened as a combined institution Feb. 6. Mid-Atlantic Corporate is the continuing charter and is maintaining its current location. Mid-Atlantic said that the merger, combining more than 800 credit union members and over $163 million in capital, creates one of the strongest corporates in the country (News Now Feb. 7).

Fitch affirmed the "A+" long-term Issuer Default Rating (IDR) and "F1+" short-term IDR of Mid-Atlantic Corporate (BusinessWire Feb. 9).

The ratings also reflect Mid-Atlantic's stronger capital, relative to other corporate credit unions, Fitch said.

Because of its successful capital-raising initiatives, Mid-Atlantic has met all the new regulatory requirements. The merged entity's total capital is roughly $176 million--including $16 million in retained earnings, Fitch said.

Mid-Atlantic is the fourth-biggest company in the U.S. corporate credit union network, with total assets of about $4 billion and serving more than 850 member credit unions.

CU System briefs (02/13/2012)

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  • SHEBOYGAN, Wis.  (2/14/12)--Sarah M. Gora, 33, of Sheboygan Falls, Wis., the former president of Midwest CU, was charged Friday with embezzling more than $100,000 from the credit union, falsifying loan documents and using a company credit card to purchase personal items (The Sheboygan Press Feb. 10). Gora was the only full-time employee at the Sheboygan-based credit union from June 2006 until March 2011. An internal audit revealed that $150,000 was taken from credit union funds and deposited into her account  in November 2010. Audits indicated that Gora allegedly violated rules by doubling the credit limit on her credit card and using it to make more than $62,000 in unauthorized charges. She allegedly paid the credit card balances by obtaining a car loan for $22,397 and refinancing the loan frequently over the years. She also allegedly applied for a home equity loan of $188,027, using her home for equity and completing the loan review and underwriting herself and allegedly providing false information about her credit score and the market value of the property. The home equity loan allegedly was used to pay off part of her car loan, which had risen to $62,156 …
  • YUMA, Ariz.  (2/14/12)--A Yuma, Ariz., couple was convicted Friday of a loan kickback scheme that helped cause the collapse of AEA FCU, which was placed into conservatorship in December by the National Credit Union Administration due to a large number of bad business loans ( Feb. 11). A Phoenix jury found William Liddle, former vice president of business lending at the credit union, guilty of 54 counts, including conspiracy and credit institution fraud. His wife Rhonda Liddle was convicted on 36 counts. William Liddle was accused of conspiring with businessman Frank Ruiz to approve suspicious business loans in return for nearly $1 million in kickbacks. The credit union is still operating. Sentencing was scheduled for May 21 for the Liddles. Ruiz will be sentenced in March …
  • ANNAPOLIS, Md. (2/14/12)--Maryland has recovered 43% of the jobs it lost during the recession, ncluding a net gain of 27,000 jobs in the first 11 months of 2011, Maryland Gov. Martin O'Malley told attendees at the Leadership Dinner of the Technology Council of Maryland Jan. 18. The event was sponsored by Tower FCU. O'Malley was introduced by Cyndy Scott, senior vice president of marketing at the credit union. Scott noted that Tower's growth parallels the governor's news. Tower experienced nearly 300% growth in the past decade, hired many employees and launched new technologies for members including Mobile Web Banking. (Photo provided by the Technology Council of Maryland) …

Corporate One Alloya to offer Fundtechs ACH platform

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COLUMBUS, Ohio and WARRENVILLE, Ill. (2/14/12)--Corporate One FCU, Columbus, Ohio, and Alloya Corporate FCU, Warrenville, Ill., will offer automated clearinghouse (ACH) transactions using Fundtech's platforms.

Both corporates said Fundtech's platform offers enhancements and pricing that is more favorable to their members.

"Price reductions will be most significant in one of the most fertile areas for credit unions growth--ACH for select-employee groups and small businesses," said Lee Butke, Corporate One's president/CEO.  "This is an area where credit unions can really see sizeable growth."

Also at both credit unions, Fundtech's platform replaces the APEX-ACH platform that was offered through U.S. Central FCU, the now-defunct wholesale provider of financial services to the corporate network.

"Our new ACH products provide a great framework to assist our members in moving off U.S. Central's platforms," said Kevin Brauer, Alloya senior vice president of member relations. "It also delivers an alternative for other credit unions seeking to change from their current providers."

Corporate One expects to have its members transitioned to the new platform by June 30.

Alloya said it expects to begin converting members in early summer.

CU System briefs (02/10/2012)

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  • FARMERS BRANCH, Texas (2/13/12)--The Texas Credit Union League (TCUL) is accepting nominations for the Texas Credit Union Hall of Fame through Feb. 24 (LoneStar Leaguer Feb. 10). Initiated in 1998, the hall of fame honors those in the Texas credit union movement who reflect a rich history of service. Nominees for the award are selected for their records of achievement within their own credit union and for achievements that have benefited other credit unions. Recipients are inducted into the hall because they have been key players in organizing and running credit unions. Also, they have contributed to other credit unions through service to the chapters, TCUL and in some cases, the Credit Union National Association. The individuals chosen will be recognized at TCUL's upcoming Annual Meeting & Expo, April 18-20 in Galveston. A nomination form is available online ...
  • WARNER ROBINS, Ga. (2/13/12)--Kimberly V. Brown, 35, a former Robins FCU employee, Thursday was sentenced to a three-prison term for stealing people's identities to apply for loans and credit cards (Macon Telegraph Feb. 10). Brown pleaded guilty to aggravated identity fraud and identity theft. She must pay $76,000 in restitution according to her attorney, Floyd Buford. Beginning in October 2007 and continuing through March 2008, Brown allegedly applied for three loans and five credit cards using stolen identities and false information. Using the credit lines provided by the credit cards, Brown allegedly obtained cash advances and kept the money. She also is accused of allegedly pocketing proceeds from the loans, according to the indictment. Robins FCU, based in Warner Robins, Ga., has $1.53 billion in assets ...
  • TOPEKA, Kan. (2/13/12)--A would-be robber was caught by a security guard when he was caught just moments after allegedly holding up Educational CU, Topeka, Kan. In attempting to flee on foot, the man stumbled and fell dislocating and breaking his ankle (Topeka Capital-Journal Feb. 10). He was apprehended about 50 feet from the credit union door. A security guard apprehended him and held him until police officers arrived. The alleged robber's gun was recovered between two cars in the parking lot where he fell. The credit union was also robbed at gunpoint on Dec. 30. No arrests were made in that incident …

Catalyst Corporate announces town hall webinar

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PLANO, Texas (2/13/12)--Catalyst Corporate announced it will host a town hall webinar Feb. 22, following a town hall meeting tour spanning six weeks and as many states.

The webinar and town hall meetings are a follow-up to the National Credit Union Administration (NCUA) December announcement that Catalyst Corporate in Plano, Texas, was selected to acquire the operations of Western Bridge Corporate FCU in San Dimas, Calif. NCUA's decision led to a plan that provides for a non-disruptive, low-cost transition of Western Bridge member credit unions, said Catalyst Corporate.

Although 556 people from nearly 300 credit unions attended the in-person meetings, Catalyst Corporate executives say that it's important to reach all of Western Bridge Corporate's members to explain Catalyst's future and member value proposition.

"The receptivity at each town hall has been outstanding," said Catalyst Corporate CEO Dianne Addington, following the completion of the corporate's 16th such meeting. "Credit unions have been very engaged and appreciative of the efforts Catalyst is making to ensure they are well informed."

Their reaction underscores how important it is that the Catalyst Corporate message makes its way to all potential members, explained Addington.

"As a career credit union CEO, I am thoroughly convinced that Catalyst is an excellent choice for any credit union, anywhere, of any size," she added. "And this consolidation is the best opportunity Western Bridge Corporate members have for a smooth transition. I believe it's critical that all Western Bridge Corporate members take part in a town hall meeting to ensure they make the right decision for the future of their credit unions."

Not only does Catalyst Corporate encourage executives and volunteers who did not attend an in-person meeting to tune-in for the webinar, it is recommending repeat participation.

"As the planning process unfolds, we learn more details, and we're able to expand on what we've communicated all along," Addington said. "And in many cases, a credit union may have been able to send only one or two representatives to a town hall meeting, but would benefit from having additional staff and volunteers learn what they need to know about the transition as well."

The purpose of the Town Hall meetings is to provide Western Bridge member credit unions with information about the Catalyst Corporate business model, investment requirements, and products and services, and to offer details of the upcoming transition, and provide an opportunity to ask questions.

Addington said that Catalyst Corporate is already exceeding many of the financial measures included in the business plan, such as the coverage ratio, the key measure of efficiency: "Our coverage ratio expectation was high--estimating a ratio of about 82%, compared with an industry average of about 55%; we were delighted when we realized that for the September-December period, Catalyst had achieved 94.1%."

Addington explained that Catalyst's model is designed to be less dependent on member contributed capital over time as a result of strong growth in retained earnings. "Attendees are pleased to learn that Catalyst's membership capital requirement is a one-time occurrence with no future adjustments," she said.

The town hall webinar is scheduled to occur Feb. 22, at 1 p.m. Pacific Time. Interested credit unions can register by visiting the special Western Bridge Member region of the Catalyst Corporate website. Use the link.

Indiana CUs have withstood recession well

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INDIANAPOLIS (2/13/12)--Indiana credit unions have seen increases in membership and deposits during the past five years of the national recession, said the Indiana Credit Union League. The state's increase in membership reflects a national trend.

That good new comes even though at least 25 credit unions have merged or ceased independent operations, the league said (Indianapolis Star Feb. 10).

There currently are 184 credit unions in the state--down from 209 at the end of 2007 when the recession started.

Money deposited in Indiana credit unions is roughly $16.8 billion--a 25% increase from the beginning of the recession, John McKenzie, Indiana league president, told the Star.

Lower costs of credit union operations--relative to banks--because of lower operating costs and conservative management result in up to a $90 million benefit each year for credit union members, McKenzie told the newspaper.

The article also mentioned that Eli Lily FCU in Indianapolis--the third largest credit union in the state with $974 million in assets--has added services and has grown to serve 40,000 members despite Eli Lilly, the sponsoring company, cutting thousands of jobs from its work force.

The credit union added 15 new employees in the past three months, taking the total work force to 126, and expects to add $1 billion in assets by next year, the credit union told the paper.

To read the article, use the link.

NWCUAs public funds bill passes Washington State Senate

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FEDERAL WAY, Wash. (2/13/12)--The Northwest Credit Union Association's (NWCUA's) public funds bill ( SB 5913), which would increase credit unions' capacity to accept public funds deposits--passed the Washington State Senate Thursday by a vote of 43-2, with four excused. The bill now heads to the State House, where a similar public funds bill was passed last week.

SB 5913, "An act relating to increasing the permissible deposit of public funds with credit unions and authorizing the deposit of public funds at federally chartered credit unions," would increase the permissible deposit of public funds with credit unions to the federal deposit insurance limit of $250,000 (NWCUA Anthem Feb. 10).

The bill's passage follows last week's NWCUA Washington Governmental Affairs Conference, which saw roughly 100 credit union advocates from around the state converge in Olympia, Wash., the capital city, with support for the public funds bill as a top priority. Last year's attempt to modernize the public funds law for credit unions hit roadblocks in the Senate, so association lobbyists were awaiting the result of yesterday's vote, NWCUA said. 

"The strong vote in the Senate is the result of a lot of great advocacy by our members over the past year," said Mark Minickiello, NWCUA vice president of legislative affairs. "To top that off, we received several key commitments from senators to help our bill along after credit union advocates came to Olympia last week. I have no doubt that had a significant impact when senators met in caucus before the vote," he added.

The bill will next receive a hearing in the House Business and Financial Services Committee, after which it will need to pass through the Rules Committee before being pulled to the House floor for a vote.

House Bill 1327 passed the Washington State House on Jan. 30 by a vote of 86-10 with two excused, indicating that the Senate's public funds bill should face few if any obstacles in the House, NWCUA said. The Senate version contains some technical language that is missing in the House version.

The bill also allows federally chartered credit unions to become depositories. Current law only allows state-chartered credit unions to act as public depositories.

CalNevada league CU member representation tops 90

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ONTARIO, Calif. (2/13/12)--The California and Nevada Credit Union Leagues now represent more than 90% of the more than 10 million credit union members in both states.

Eight new members--those not affiliated in 2010--either rejoined or joined the league in 2011 and 2012. They are:

  • Operating Engineers #3 FCU, Livermore, Calif.
  • Cedar-Sinai FCU, Los Angeles;
  • E-Central CU, Pasadena, Calif.;
  • Pepsi Cola FCU, Buena Park, Calif.;
  • Polam FCU, Los Angeles;
  • Rolling FCU, Turlock, Calif.;
  • Tehachapi (Calif.) FCU, Calif.; and
  • Union Oil Santa Fe Springs Employees FCU, Brea, Calif.
"While there are many benefits we see to being league members, probably the two main reasons are all the educational information now available to our employees, and our support of league representatives who constantly lobby on behalf of credit unions," said Michael Donohue, Operating Engineers #3 FCU CEO, whose credit union rejoined the league.

"We appreciate the widespread participation from credit unions, and we're especially pleased to welcome returning members to the league," said leagues President/CEO Diana Dykstra. "Their renewed affiliation adds to the strength of league membership and speaks well of the value we bring to credit unions in our two states."

The number of associate members--those headquartered out of the state that provide services or have branches locally--has remained steady at 17, according to League Membership Director Traci Miller Olszowy. "It is gratifying to see such strong participation--particularly in advocacy and educational activities--from our member credit unions."

Pa. CU Foundation tops 2M grant milestone

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HARRISBURG, Pa. (2/13/12)--The Pennsylvania Credit Union Foundation announced Friday it has--since its inception--topped the $2 million milestone for awarding grants.

During its nearly 16 years in operation, the foundation has regularly funded small credit union development grants. The most recent grant recipient--after approval of a $3,000 grant request-- Philadelphia Mint FCU, with less than $1 million dollars in assets, represents the 454th grant approved by the foundation board.

That also brings the total dollar value of grants awarded by the foundation since its inception to $2 million.

"Normally, such a grant would be used to purchase a computer for a credit union of this size," says foundation Executive Director Joe Wambach. "What is unusual is that the grant will enable the credit union to implement an automatic clearing house  and a bill pay program to increase membership."

Foundation Chairman Ray Brunner lauded the board for its commitment to advancing the credit union motto of people helping people. "The ongoing support for small credit unions and community development projects is consistent with the foundation's mission to serve the underserved," Brunner said.

Jim McCormack, president/CEO of the Pennsylvania Credit Union Association, also hailed the achievement. "In its 16 years, the foundation has far surpassed its founders' expectations," he noted. "Its work not only strengthens the credit union movement by assisting our smallest credit unions, but also through its role in the areas of financial literacy and disaster relief projects."

Since 1996, the foundation has assisted more than a half million beneficiaries and has raised more than $3 million.

The foundation, a subsidiary of the association, was formed in 1996 to benefit consumers and credit unions. The foundation is a non-profit, tax-exempt organization with a main purpose of providing individuals, credit unions and their communities with the human and financial resources to stimulate socio-economic growth.

N.C. CU employee runs for State House

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GOLDSBORO, N.C. (2/13/12)--John Bell, manager of sales and business development at North Carolina Community FCU, Goldsboro, N.C., announced his candidacy for the North Carolina House of Representatives last week.

John Bell manager of sales and business development at North Carolina Community FCU will compete in the North Carolina House of Representative's 10th District Republican primary in May. Bell (left) fields a question from WITN-TV moments after announcing his run for the North Carolina House. (Photo provided by North Carolina Credit Union League)
Bell will compete in the 10th District Republican primary in May (North Carolina Credit Union League Weekly Update Feb. 10).

Bell cited his experience at the credit union as a key qualification for the District 10 seat. "I see people struggling, looking for jobs, trying to grow their businesses every day," Bell told News Now. "My experience with credit unions, with the Boy Scouts and my background in agriculture, that all helped feed my desire to want to stand up and do make a difference."

"He's an outstanding individual," said North Carolina FCU President/CEO Mark Lesnau. "He has the fire to do whatever he sets his sights on doing, and he will do well for the counties he represents, as well as for North Carolina."

Bell cited three major goals in his campaign: bringing jobs to eastern North Carolina by investing in infrastructure, reducing wasteful spending in education while investing in the community college system, and working across party lines to strengthen eastern North Carolina's voice in Raleigh.

Bell's political career began in 2008 when he managed the campaign of Efton Sager, who at one time served as a volunteer at North Carolina FCU. Sager won his election to the North Carolina House representing the 11th District. Although Bell has been active in Republican Party politics in the years since, this is his first run for elected office.

Portland mayor calls for local investments

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PORTLAND, Ore. (2/13/12)--Portland, Ore., Mayor Sam Adams has introduced a resolution under which the city will re-examine its investment practices and allow more investment in local financial institutions, including credit unions.

"I believe we should do as much business locally as is feasible, as a city and as individuals," Adams told the Northwest Credit Union Association. "I've long had a 'buy local' passion. This isn't to take away from national or international corporations. Responsible banking is one of the reasons I was attracted to and supported Occupy Wall Street."

Portland currently has roughly $7.2 million in accounts with Wells Fargo, which was selected through a public bidding process in 2009. Umpqua Bank, based in Portland, also holds nearly $30 million of the city's funds. The proposal would have the city deposit up to $250,000 in 10 credit unions and community banks this year.

While the Portland recognizes the importance of national banks and the indispensable services they provide, the city also recognizes the value of having a portfolio that includes local investments in community-based institutions," Adams wrote in a blog post.

"In order to better serve these priorities--while still maintaining the stated principal, liquidity, and return goals of the Investment Policy--the city would like to be able to explore potential options for investment in credit unions and community-based banks and to include community investment practices as part of the evaluation criteria for selecting banking services in future contracting opportunities," Adams wrote. "This draft resolution seeks to accomplish those goals."

Current Oregon law only allows local governments to invest up to the limits of the National Credit Union Administration insurance, which is currently at $250,000. This will change in 2013 when Oregon House Bill 3700 takes effect. The bill will allow credit unions to become approved by the state treasurer if they meet the same collateralization requirements as banks.

While current Oregon statute does allow the city of Portland to invest up to $250,000 in local credit unions, the city's investment policy does not. The draft resolution amends the city's investment policy to allow investments up to the $250,000 in credit unions.

Adams was seeking input from the public through Friday.

CU Direct Corp. pays dividend for 7th consecutive year

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ONTARIO, Calif. (2/10/12)--CU Direct Corporation, parent company for the CUDL, Lending Insights, Lending 360 and CUDL Retail brands, Thursday announced the company's board of directors approved a 3% cash dividend. This is the seventh consecutive year that the credit union service organization (CUSO) has paid dividends to their credit union and credit union organization shareholders.

The dividend--on the current share price of $1,000--totals $1,395,450 million, paid to its 94 shareholders for the 2011 calendar year.

CU Direct, which has 10 regional offices nationwide, signed new agreements with 128 credit unions in 2011 to maximize their process and cost efficiencies. At year's end, 990 credit unions, serving 28 million members, were using the CUSO's lending solutions to enhance their lineup of member product offerings and services.

In a year that saw credit unions gain back marketplace momentum in a challenging economic climate, 1.75 million loans were processed through the CUDL lending platform in 2011, generating 484,000 loans at dealerships nationwide for $877.5 billion in credit union auto loans. This ranked CUDL credit unions as the eighth largest vehicle lender in 2011 in the U.S.  The CUSO also reported that 33% of the loans generated through the CUDL system in 2011.

"Our continued goal is to provide credit unions with a member centric delivery channel and financial services tools that add value to credit unions' relationships with their members and also helps them grow their loan portfolios," said Tony Boutelle, CU Direct president/CEO.

Among the credit unions that signed agreements with CU Direct in 2011 to incorporate the CUDL brand's auto lending solutions and services were:

  • Bethpage  (N.Y.) FCU;
  • Trumark Financial FCU, Trevose, Pa.;
  • University of Virginia CU, Charlottesville, Va.;
  • University of Michigan CU, Ann Arbor, Mich.;
  • Genisys CU, Auburn Hills, Mich.;
  • Greenwood CU, Warwick. R.I.;
  • Arizona State CU, Phoenix;
  • New Mexico Educators FCU, Albuquerque;
  • Weokie CU, Oklahoma City; and
  • Meridian Trust FCU, Cheyenne, Wyo.
CU Direct's Lending Insights brand continued to experience growth in 2011 by signing new agreements with 55 credit unions. Credit unions that integrated the brand's best-in-class analytical tools and business intelligence solutions included:

  • Grow Financial FCU, Tampa, Fla.;
  • Members Choice CU, Washington, D.C.;
  • Mazuma CU, Kansas City, Mo.;
  • Credit Union Student Choice Partners, LLC;
  • PrimeWay FCU, Houston;
  • Sierra Central CU, Yuba City, Calif.;
  • Members Cooperative CU, Cloquet, Minn.;
  • Kauai Community FCU, Lihue, Hawaii;
  • Big Island FCU, Hilo, Hawaii; and
  • SB1 FCU, Philadelphia.

WOCCU program provides financial access to farmers

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VERACRUZ, Mexico (2/10/12)--Through a coffee value chain financing program being implemented in rural Mexico with the support of World Council of Credit Unions (WOCCU), farmers gain access to new financial and agricultural tools that enable them to improve their organic coffee crop, sell it at higher prices and increase their personal financial returns.

A financing program in rural Mexico, supported by World Council of Credit Unions (WOCCU), helps farmers improve their organic coffee crop, sell it at higher prices and increase their personal financial returns. Caja Zongolica General Manager Dolores Rivera Ramírez (center) explains the workings of a coffee bean dehydrator to Barry Lennon (left) and Brian Branch (right), WOCCU's senior vice president and president and CEO, respectively. (Photo provided by World Council of Credit Unions)
The five-year Cooperative Development Program (CDP), launched in late 2010 with $4 million in funding from the U.S. Agency for International Development, focuses on creating and testing agricultural and financial tools to improve rural economic and financial sector development, personal income and food security. The resulting "toolbox" for credit unions includes a replicable and scalable methodology to meet the financial service needs of small farmers and increase their access to markets, inputs and technical assistance for production. In addition to Mexico, the CDP program also is being implemented in Guatemala.

"The CDP program applies an innovative approach that addresses both the financial needs and market barriers for rural producers in a more integrated way than methodologies used in the past," said WOCCU President/CEO Brian Branch, who this week led a delegation that visited program implementers in the rural highlands of Mexico's Veracruz state. "The result will be higher levels of personal income that will benefit both participating farmers and their communities."

Part of the strategy currently being implemented by Caja Zongolica, one of two pilot credit unions involved in the CDP program in Mexico, involves helping farmers switch to organic production methodologies that result in coffee that commands a higher market price. Certified organic products require stringent growing requirements for three years prior to certification, which increases production costs. The value chain financing supported by the credit unions provides farmers with financial stability throughout the field-to-market process to produce the organic coffee.

Currently, about 25% of the 122 farmers participating in the program who have switched to organic production also work as promotores, or internal inspectors who provide peer-to-peer technical assistance and guidance to other farmers interested in organic production. Participants see value in making the switch, which all but ensures a higher price for their crops, as well as the inherent strength in working collectively as part of the WOCCU-supported program.

Caja Zongolica, established 15 years ago to serve coffee farmers, for several years has been implementing the Semilla Cooperativa [Cooperative Seed] program, which sends credit union representatives by motorcycle and on foot to conduct credit union transactions where the farmers live and work.

Later this year, the credit union will update the personal digital assistant (PDA) mobile transaction technology developed by World Council that allows field officers to remotely conduct loan monitoring, evaluation and approval processes in real time.

The past success of Caja Zongolica technology applications was the inspiration for a similar program launched last year by California's Ventura County CU, which remotely serves farm laborers and others at their respective worksites. Both initiatives will be the focus of this year's engagement study programs sponsored by World Council's Global Women's Leadership Network.

"Participating credit unions are strengthened when farmers become part of the program, but this is also about making linkages that enable members to earn more stable and higher incomes," Branch said. "It's about supporting a move to more sustainable crop production, which means more stability for the community itself."

Public funds bill for CUs introduced in Ohio

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COLUMBUS (2/10/12)--Legislation that would allow credit unions to become eligible depositories for public funds was introduced Tuesday in the Ohio Senate, according to the Ohio Credit Union League.

"The legislation was introduced in response to many public officials' request to have community credit unions as a choice in public depositories," said John Kozlowski league general counsel (eLumination Newsletter Feb. 8).

Jointly-sponsored by State Sens. Scott Oeslager (R-North Canton) and Eric Kearney (D-Cincinnati), Senate Bill 292 will provide Ohio's schools, local governments, communities and businesses with greater choice by removing a current restrictive state mandate preventing them from using community-based credit unions as public depositories, the league said.

Similar companion legislation, House Bill 441, was introduced in the Ohio House of Representatives, co-sponsored by State Reps. Terry Blair (R-Washington Township) and Tracy Maxwell Heard (D-Columbus).

The league said it will soon issue a call to action to build support for the legislation.

CUNAs Cheney addresses account access on iFoxi

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MADISON, Wis. (2/10/12)--Credit Union National Association President/CEO Bill Cheney promoted consumer access to credit unions during an appearance on the "Willis Report" on Fox Business News Wednesday.

During an appearance on the "Willis Report" on Fox Business News Wednesday, CUNA President/CEO Bill Cheney said credit unions are willing to work with consumers who have experienced previous financial problems.
Cheney told host Gerri Willis that credit unions are willing to work with consumers who have experienced previous financial problems.

Cheney said that for many of these consumers, credit unions can be a viable option.  "Yes, there are people who can't have a checking account temporarily because of problems they've had in the past, but they are still able to open a savings account at a credit union," Cheney said.

Most credit unions are willing to work with members who have experienced past problems, often starting the member with a savings account and providing opportunities to earn the privileges of opening checking and credit accounts, Cheney said.

Cheney directed consumers seeking to join a credit union to to

"There are ways to get a hand up and help to find an account," Cheney said.

Texas league CUROAR initiative boosts advocacy

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FARMERS BRANCH, Texas (210/12)--CU:ROAR, a new initiative at the Texas Credit Union League, provides a template for engaging all employees at every level in the issues facing credit unions in the political sphere. It is based on the successful grass roots legislative team model developed by Shell FCU in Deer Park, Texas.

The vision of CU:ROAR is to harness a third of the 20,000 credit union employees working in Texas and put them to work in advocacy efforts in the industry, according to the Texas Credit Union League (TCUL) (LoneStar Leaguer Feb. 9).

CU:ROAR stands for Credit Unions: Ready, Organize, Activate, Respond. CU:ROAR's structure and tenets mirror much of what the Shell PIT crew has done within their credit union--provide the training and purpose to motivate and organize staff and get them politically engaged on behalf of the credit union.

"Staff understands that they are standing up for principals of the movement, and, frankly their chosen career path," said Jim Phelps, TCUL assistant vice president of advocacy and. "We focus on effective strategies to build connections with lawmakers locally, connections that will make a difference when there is a call to action."

This year, TCUL plans on establishing a minimum of 20 CU:ROAR teams in Texas. For more information on CU:ROAR, use the link.

The Credit Union National Association (CUNA) represents a full spectrum of credit union and league interests in Washington D.C. and state capitols to define and enhance a legislative environment and public awareness which benefits members and amplifies the credit union difference. Those areas include legislative affairs, state government affairs, political affairs and regulatory advocacy.

For more information, use the link.

N.J. league Hikes with small biz for MBLs

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WASHINGTON (2/10/12)--During a small business Hike the Hill initiatives in Washington Wednesday, New Jersey credit union leaders and small business owners joined hundreds of others from across the country to take the member business lending (MBL) message to the halls of Congress.

New Jersey credit union leaders and small business participated in a special member business lending Hike the Hill event Wednesday. Pictured, from left, Chris Abeel, New Jersey Credit Union League (NJCUL) director of government affairs; Marc Sovelove, senior vice president of lending, Financial Resources FCU,  Bridgewater; Paul Gentile,  NJCUL President/CEO; Rep. Leonard Lance (R-7); Jason Parker and Steven Parker of K9 Resorts, Fanwood, N.J.; and Peter Bruno, Financial Resources FCU board member. (Photo provided by NJCUL)
Credit union advocates from Financial Resources CU and two of their small business borrowers joined Paul Gentile, New Jersey Credit Union League President/CEO and Chris Abeel, NJCUL director of government affairs, for the hike.

Two of Financial Resources FCU's small business borrows who benefitted from credit union business lending, Jason and Steven Parker representatives of K9 Resorts, a daycare and luxury hotel for dogs with three locations across Central and Northern New Jersey, shared their message with lawmakers.

"The fact is we would not have achieved what we have today with our company without the capital we received from Financial Resources FCU," said Jason Parker, founder and president of K9 Resorts. "If Congress doesn't work to raise the 12.25% cap, businesses like ours, which was at a dead end with banks, will not be able to grow and add jobs to the economy."

K9 Resorts has sold two franchises in New Jersey and is working on expanding nationwide.

The credit union and small business representatives met with the offices of U.S. Reps Scott Garrett (R-5) and Leonard Lance (R-7) and U.S. Sen. Robert Menendez's legislative counsel.

Garrett is a senior member of the House Financial Services Committee and Menendez serves on the Senate Banking Committee.

"We are always well-received and our record stands on its own merits, but it's time we see more progress by Congress," said Gentile. "This isn't a bank vs. credit union issue; this is about helping our struggling economy add jobs. I urge Congress to look beyond banker rhetoric and do what's right for the economy."

During the Hike, Financial Resources FCU Senior Vice President of Lending Marc Sovelove stressed that banks and credit unions work together closer than Congress might realize.

"Community banks refer loans to us that they don't want to do, typically smaller loans. And we'll routinely refer larger loans we may not be able to do. It's about serving the business. The notion that banks are against this is more about trade politics than real world facts," said Sovelove.

The Credit Union National Association and credit unions have been pressing for Congress to raise the member business lending limit to 27.5% of assets from the current 12.25% of assets. Doing so would provide $13 billion to lend to small business owners. Injecting that amount into the economy would create roughly 140,000  new jobs at no cost to the taxpayer.

CUNA Mutual Foundation contributes 43.5K to nonprofits

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WAVERLY, Iowa (2/9/12)--The CUNA Mutual Foundation contributed $43,500 in community grants to help support activities at six Waverly, Iowa-area nonprofit organizations as part of its ongoing support for the Waverly community in 2011.

CUNA Mutual Group's Waverly employee philanthropy team, a group of local employees who help make foundation funding decisions for non-profit agencies in the Waverly area, recommended the funded grants.

"With these donations, our Employee Philanthropy Team has chosen six non-profit organizations that play a big role in their local community's quality of life," said Reid Koenig, CUNA Mutual Group vice president of customer operations. "Some of these grants are new, while others are renewals of previous contributions. They all represent CUNA Mutual's long-term commitment to the programs and organizations involved."

The grants will help the respective organizations with these initiatives:

  • Waverly-Shell Rock United Way--A $16,000 foundation grant supplements Waverly employee contributions for a total of more than $52,000, making CUNA Mutual Group the largest contributor.
  • Northeast Iowa Food Bank (NEIFB)--The $10,000 contribution is the second installment of a two-year commitment totaling $25,000 to fund construction of a new NEIFB building, which is underway.
  • Cedar Valley Friends of the Family (CVFF)--The $5,000 contribution continues support for the "client emergency fund" for persons affected by domestic violence and sexual assault. CUNA Mutual Group helped establish this fund with previous contributions. Unfortunately, the need for CVFF services continues to rise in the Waverly area.
  • Big Brothers/Big Sisters--Big Brothers/Big Sisters targets children ages 6 through 18 who live in single-parent homes, are in poverty or are coping with parental incarceration. Government funding for Waverly's program was reduced by $10,000 in 2010. CUNA Mutual Group's $5,000 contribution will help Big/Brothers/Big Sisters continue existing baseline programs.
  • Aspire--The organization's Therapeutic Riding program improves the quality of life for disabled individuals who benefit physically, emotionally and cognitively through animal-assisted activities, primarily through interaction with horses. The $5,000 foundation grant will assist Aspire as it begins a fund drive to upgrade its horse barn.
  • Larabee Center--$2,500. The Larabee Center operates Trinkets & Togs, a retail operation providing work for 44 disabled persons. Employees prepare goods to be sold and work in the retail store assisting customers. The $2,500 grant will help the Larabee Center address a long list of needs.
CUNA Mutual Philanthropy Team member Sue Jacobson spoke for all her colleagues when she said, "I love serving on this employee team. It gives us all a chance to make a real difference in the community."

Va. state-chartered CUs can pursue low-income designation

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LYNCHBURG, Va. (2/9/12)--Virginia state-chartered credit unions now have the power to pursue a low-income designation after the State Corporation Commission adopted a parity regulation, according to the Virginia Credit Union League.

The capability will allow state-chartered credit unions that are granted the designation to take advantage of benefits and resources that are currently available to federal credit unions that have obtained a low-income designation, said Rick Pillow, league president/CEO.

Last year, the league approached the state Bureau of Financial Institutions on behalf of member credit unions, who were seeking that authority. State charters granted a low-income designation will now have the same additional powers as their federal counterparts.

The commission released the proposal for comment in late 2011. Comments on the proposed regulation were filed by the Virginia Credit Union League; Virginia CU, Richmond; BayPort CU, Newport News; Beacon CU, Lynchburg; Virginia Transfer and Storage Company; Virginians Against Payday Loans; and the Virginia Interfaith Center for Public Policy.

All of the comment letters supported the proposed regulation.

"We believe in the dual-chartering system and we've worked hard to ensure parity between the state and federal charters," Pillow said. "I want to personally thank Commissioner Joe Face for his support, and special thanks also to the credit unions that joined the league in working on this proposal. It's another example of what we can accomplish together."

Low-income designated credit unions are eligible under federal law to:

  • Accept nonmember deposits;
  • Accept secondary capital;
  • Participate in the Community Development Revolving Loan Program;
  • Obtain funds from the Community Development Financial Institutions Fund operated by the United States Department of the Treasury; and
  • Become eligible for an exception to the aggregate loan limit on member business loans.

Developer Zai Indicted in Croatian FCU swindle

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CLEVELAND (2/9/12)--Eddy Zai, a Cleveland-area financier, was charged Wednesday with 34 counts related to obtaining $16.7 million in fraudulent loans from the defunct St. Paul Croatian FCU in Eastlake, Ohio.

Zai, 43, is one of 19 people charged in an indictment unsealed Wednesday morning (The [Cleveland] Plain Dealer  Feb. 8).

He significantly contributed to the credit union's collapse because he [allegedly] was the single largest recipient of the fraudulent loans, Stephen Anthony, head of the Federal Bureau of Investigation in Cleveland said in statement, according the Dealer.

Zai is charged with two counts of bank fraud, two counts of conspiracy, one count of bank bribery, 11 counts of money laundering, 17 counts of making false statements to a bank, and one count of making false statements to law enforcement, the Dealer said.

Koljo Nikolovski, 49, allegedly a central figure in the loan scam that caused the collapse of St. Paul Croatian--in one of the largest credit union failures in U.S. history--pleaded guilty Jan. 30 to 18 counts of bribery, bank fraud and money laundering. Nikolovski has been linked by Macedonian authorities to organized crime there. He is scheduled for sentencing on April 23 (News Now Feb. 1).

Nikolvoski entered the plea in the U.S. District Court in Cleveland. The charges stemmed from his alleged role in a $2.5 million fraudulent loan scam in which he allegedly obtained several loans worth about $2.9 million from 2003 through 2005 from the credit union ( and Jan. 31).

Anthony Raguz, 51, of Mentor, former CEO of the defunct credit union, pleaded guilty in January to issuing more than 1,000 fraudulent loans to more than 300 account holders from 2000 to April 2010, according to the Justice Department documents (News Now Jan. 4). He allegedly accepted more than $500,000 in bribes, kickbacks and gifts from people obtaining the fraudulent loans. His sentencing will be Feb. 24.

Zai and others allegedly submitted fake loan documents to the credit union in bilking it out of the $16.7 million and then--to thank Raguz--Zai reportedly gave him several payments, usually in  $100 bills hidden in envelopes and delivered directly to Raguz at his credit union office, the indictment stated, according to the Dealer.

St. Paul Croatian FCU was placed into conservatorship on April 23, 2010, and closed the following May 1. It held $238.8 million in funds from 5,400 members when it collapsed, costing the National Credit Union Share Insurance Fund $170 million. The collapse has prompted lawsuits by the National Credit Union Administration seeking to recoup some of the losses (News Now Jan. 4).

iAOLi Fee backlash cost banks 2M customers

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MADISON, Wis. (2/9/12)--Credit unions continue to see strong, positive effects from Bank Transfer Day, with continued media coverage of consumer's opting for more affordable financial services alternatives. 

A recent AOL Daily Finance article compared switching financial institutions with leaving a slightly abusive girlfriend--citing a 2011 Pew study that revealed the average bank account has 49 fees.

The article cites a recent study by Javelin Strategy and Research which said that 11% of the 5.6 million people who switched banks over the last three months--about 610,000--did so as part of "Bank Transfer Day," which was spurred by Bank of America's announcement to begin charging its customers $5 per month to use their debit cards for purchases. BofA ended scrapping the plan.

Another of 26% customers who switched financial institutions during the last 90 days--about 1,456,000 consumers--also cited new bank fees as the reason for the switch.

Also, the people who switched banks trended toward higher incomes, according to the Javelin study.

"As these higher-wealth, generally older consumers continue to consider their banking options, it seems likely that America's largest banks are going to continue hemorrhaging customers," the article said.

Texas league launches young professionals initiative

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FARMERS BRANCH, Texas (2/9/12)--The Texas Credit Union League (TCUL) is launching the Texas 12, a new young credit union professional's initiative. 

The league is taking applications of credit union professionals under the age of 35 who are "creative, colorful, entrepreneurial, pioneering and plugged in, with a passion for making a difference," according to Linda Webb-Manon, the league's vice president of public relations & communications.

TCUL is collaborating with the Filene Research Institute on the initiative, which will mirror Filene's Cooperative Trust. The Coopertive Trust began as the "Crash Network," a group of young credit union professionals that encourages growth for, and change by, young credit union professionals.

The Texas 12 will hold its first meeting at the Texas league's annual meeting, April 17-20.

Online applications for the Texas 12 initiative will be accepted through Feb. 22.

CU System briefs (02/08/2012)

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  • WASHINGTON (2/9/12)--The Credit Union National Association (CUNA) Wednesday announced Pat Sowick has been promoted to senior vice president of CUNA League Relations. The promotion reflects her enhanced duties for the American Association of Credit Union Leagues (AACUL), where she serves as chief operating officer, and CUNA, specifically with regard to membership development and state governmental affairs in addition to her league relations duties and oversight of Credit Union House. Sowick has been with League Relations/AACUL for more than four years, following 10 years as vice president, CUNA Washington Operations, and is key to the success of that team, said Susan Newton, executive vice president, CUNA System Relations. During the past year, she has played a significant role in the restructuring of that area and in addressing the myriad of new challenges and opportunities CUNA faces supporting leagues and member credit unions, Newton added ... 

  • Click to view larger image Click for larger view
    JACKSONVILLE, Ark (2/9/12)--Arkansas FCU President/CEO Larry Biernacki, right, presented a $67,947.91 check to Arkansas Children's Hospital Foundation Director of Development Jennifer Selig, left, at a press conference held in the main lobby of Arkansas Children's Hospital Feb. 2. Arkansas FCU employees and members raised $57,947.91 through several fundraising events, including the sixth Annual Arkansas Federal Golf Classic, candy and cardstock sales and several Bunko events. CO-OP, a credit union-owned electronic funds transfer network and processor, contributed the additional $10,000, through its Miracle Match program, which encourages credit unions nationwide to fundraise for their Children's Miracle Network hospitals. Since 1998, Arkansas FCU, based in Jacksonville, Ark., has contributed more than $600,000 to Arkansas Children's Hospital. Arkansas FCU is part of Credit Unions for Kids, a national sponsor of Children's Miracle Network Hospitals. Children's Miracle Network Hospitals is a national organization dedicated to helping raise awareness and funds for its 170 member hospitals, including Arkansas Children's Hospital …

Three CUNA vendors win awards

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MADISON, Wis. (2/9/12)--Three vendor resources that the Credit Union National Association uses to enhance its online educational products won 2011 Best of Elearning!  awards.

Among the 2011 award winners were SumTotal Systems, Adobe Connect Pro and Articulate.

Hosted by Elearning! Media Group, the industry voice of the enterprise learning and workforce technology market, the Best of Elearning! awards are the online educational industry's premiere awards event. Winners were selected from more than 1750 nominations by Elearning! and Government Elearning! magazines' reader community and altogether, 56 products across 20 categories were honored with Elearning! awards.

Sum Total Systems won the overall category of Best Talent Management system and received Awards of Excellence in the categories of Best Learning Management System and Best Learning Content Management System. Sum Total Systems' learning management system oversees all aspects of global education and training by automating and optimizing the administration, management, delivery and end-user experience of blended learning programs. CUNA uses Sum Total Systems' award winning learning management system in CUNA CPDOnline, its Web-based training service.

Adobe Connect Pro won the overall category of Best Web Seminar Solution and tied for first place in the Best Virtual Classroom category. Adobe Connect Pro is a Web conferencing solution. CUNA uses Adobe Connect Pro's software to support the CUNA Training Bundle and its unlimited access to CUNA webinars and eSchools.

Articulate won the overall category of Best E-learning Development Tool and Best Assessment Tool and won Awards of Excellence in the categories of Best Rapid Development Tool and Best Presentation Tool. Articulate provides software that allows professionals to produce employee training and other critical learning materials. CUNA CPDOnline users are able to upload Articluate's award-winning software to CUNA CPDOnline's site and train employees with their own content.

"When the vendors CUNA uses win awards for excellence, we celebrate their success as a victory for our suite of online educational products," said Marlo Foltz, CUNA director of Blended Learning. "At CUNA, we take pride in offering our credit union members access to the top online educational resources available in the industry and are very pleased to see our vendors being recognized for the outstanding work that they do. Best in class technology enables us to provide outstanding resources."

To learn more about CUNA's suite of online educational resources, visit

Rogue FCU teen garners Googolplex contest award

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MADISON, Wis. (2/8/12)--A 16-year-old member of Rogue FCU in Medford, Ore., is this year's winner of the Googolplex Grand Prize photo contest.

Googolplex, a Credit Union National Association (CUNA) onlineEDGE online tool for youth, comprises three customizable sites for elementary, middle and high school students. It offers themed photo contests for the high school site, C-Note, which culminate with a $1,000 grand prize every year.

The grand prize-winning member, Chloe, submitted her photo "Welcome to Our Wetland" in the "School Daze" theme. Describing the photo, she says of her brand-new school that "what makes it amazing is it is built next to a wetland." Chloe captures the environment, adding, "The school and students made a choice to preserve the wetland and they made it part of our learning curriculum."

"I use Googolplex to learn new money-saving techniques or to read peoples' stories on how they make money," Chloe said. "I really appreciate Googolplex for putting on the contest. I've never won something this big and it was really fun to participate in."

Chloe submitted her photo through the $516 million asset Rogue FCU, which offers its young members resources and advice about how best to learn and plan their finances.

"The current C-Note photo contest theme is Furry Friends," said Rena Crispin, CUNA managing editor of Googolplex. "This should be an easy theme for young people whether they own a pet or not."

CUNA's editors choose contest themes based on suggestions from a nationwide teenage panel of student editors. C-Note invites photo entries by publicizing the contest in subscriber e-mails and on the front page of C-Note. Every seven weeks, the theme changes and a contestant wins $100. Once a year, all winning photos from the past 12 months' themes are open to a public vote, with the winner receiving $1,000.

Students may vote in Googolplex contests or submit their photos to different contest themes throughout the year by visiting C-Note, the high-school level of Googolplex, on their credit union's website and clicking on the photo contest display at the top right of the page or use the link.

To learn more about how Googolplex and other onlineEDGE tools benefit both credit unions and their members, use the links.

CU lending inches up says Fed report

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WASHINGTON (2/8/12)--Credit unions held $225.6 billion in total consumer credit in December, up slightly from $225.1 billion reported in November, according to the most recent Federal Reserve Statistical Release on consumer credit, issued Tuesday.

Credit union non-revolving credit accounted for $187.6 billion of the December total--down   from $188.1 billion in November.

Revolving credit at credit unions increased to $38 billion in December from $37.1 billion in November.

"For the second consecutive month, consumer credit expanded at a faster pace than expected due to rising consumer confidence and a strengthening labor market," Steve Rick, CUNA senior economist, told News Now. "Revolving credit rose $2.8 billion in December for all financial institutions, with credit unions providing $0.9 billion. Credit union credit-card balances rose 2.4% in December, the fastest pace since the 1.8% growth rate reported in December of 2010.

"It appears households have put on hold their deleveraging in order to satisfy some pent up demand for consumer durables," he added. "December's annualized consumer credit growth rate--9.3%--is not sustainable, due to slow wage growth and low national savings rates."

In the U.S., total consumer credit increased at annual rate of 7.5% in the fourth quarter.  Revolving credit rose at an annual rate of 4.5%, and nonrevolving credit climbed 9%.

In December, overall consumer credit increased at an annual rate of 9.25%.

The Fed report includes credit card debt, auto loans and other debt not secured by real estate. It excludes home mortgages and home equity lines of credit.

To read the Fed release, use the link.

CDCUs support orgs. get Ford Foundation subgrants

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NEW YORK (2/8/12)--The Ford Foundation recently provided a series of investments and grants to expand the scale and capacity of several community development credit unions (CDCUs) and two CDCU support organizations. The support was given to recognize the critical role that CDCUs play in empowering low- and moderate-income communities nationwide, the foundation said.

The Ford Foundation made an indirect investment in Innovations for Poverty Action's U.S. Household Finance Initiative, which recently announced several subgrants to CDCUs, including: Freedom First FCU, Roanoke, Va.; Neighborhood Trust Financial Partners, the nonprofit affiliate of Neighborhood Trust FCU, New York; Rite Check Cashing, in partnership with Bethex FCU, New York; and the Montana Network for Community Development, a nonprofit intermediary, which supports Montana CDCUs.

The Ford Foundation also supported Self-Help FCU, Oakland, Calif., which received a direct $30 million investment to support its expansion throughout California (See News Now article Feb. 3--use the link).

The federation, which has been a Ford grantee for two decades, provides capital, technical and educational resources and advocacy, to a network of more than 240 CDCUs operating in low- and moderate-income communities across the U.S.

"Community development credit unions ... are critical because they focus on the financial service needs of low-income communities and the people who live there," said Frank DeGiovanni, Ford Foundation director of financial assets. "These institutions are rooted in the community and provide a set of well-designed and responsible financial services to help their members manage their financial lives."

A long-time supporter of economic development and asset-building through CDCUs, the Ford Foundation has a history of direct investment in community-based institutions, but also through a series of indirect investments with the National Federation of Community Development Credit Unions and other industry intermediaries.

"Ford's support of the federation has allowed us make literally hundreds of investments in CDCUs serving some of the hardest-hit communities across America," said federation president/CEO Cliff Rosenthal. "Their most recent investment in the federation, $2 million to support secondary capital investments in CDCUs, helped us bolster the net worth ratios of several CDCUs, and given the growing public interest to 'move your money' and the Bank Transfer Day phenomenon, these infusions of secondary capital are helping CDCUs grow more rapidly and serve more people in need."

The Ford Foundation's investments in the federation have supported several programs and products, most notably secondary capital investments to strengthen CDCUs and help them grow more rapidly; responsible lending products such as the recently launched "Borrow & Save" short-term small-dollar loan with a built-in savings component; Emerging Markets Reviews to help credit unions analyze their current offerings to low- and moderate-income communities and identify opportunities for greater penetration; research and documentation on the impact of CDCUs and the Community Development Financial Institution industry through funded studies and reports.

SECU provides funding for group homes

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RALEIGH, N.C. (2/8/12)--Partnering with the North Carolina Housing Finance Agency (NCHFA), State Employees' Credit Union (SECU) members, through the SECU Foundation, helped fund two group homes in North Carolina.

State Employees' CU (SECU), through the SECU Foundation, helped fund the construction of the two group homes in North Carolina. SECU also partnered with the North Carolina Housing Finance Agency. HAVEN Complex, left, is an emergency and transitional shelter for victims of domestic violence and sexual assault, with a support program for women and children. Randolph Fellowship Home is a licensed supervised substance abuse group home that assists chemically dependent individuals by providing an environment conducive to social, psychological and vocational stabilization. (Photos provided by SECU.)

CUNA Mutual Group names Shore as new CFO

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MADISON, Wis. (2/8/12)--CUNA Mutual Group has promoted Alastair Shore to executive vice president and chief financial officer.

Shore replaces the retiring Jerry Pavelich.

Shore will lead the core financial services of the company, which include financial planning, actuarial, capital planning, controller, treasury and expense management. He joined CUNA Mutual Group in 2006 and most recently served as chief risk officer and chief actuary. In those capacities, he was responsible for establishing a framework for the management of risk and for leading the company's actuarial functions.

"I'm pleased we were able to promote--from within our company--an experienced and qualified leader to serve as our next chief financial officer," said CUNA Mutual Group president/CEO Jeff Post. "Alastair has a wealth of insurance, financial and actuarial expertise. Combined with his understanding of our company and the markets in which we operate, he is ideally suited for this role."

CUNA announces board leadership roundtable

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MADISON, Wis. (2/8/12)--Registration and conference information is now available for the 2012 CUNA National Credit Union Roundtable for Board Leadership, Aug. 10-12 in Chicago. 

The CUNA National Credit Union Roundtable for Board Leadership brings together leaders from the largest credit unions in the country to discuss economic issues, membership growth strategies and governance regulations that impact the credit union industry. Each facilitated session at the roundtable is designed to foster a creative atmosphere where fresh ideas and innovative solutions can multiply.

During this event, attendees will:

  • Examine the importance of enterprise risk management;
  • Get updates on pressing industry topics;
  • Learn the latest trends in governance; and
  • Engage in facilitated open discussions on key credit union topics.
"It is not very often that board members from the nation's largest credit unions have the opportunity to meet with their peers to discuss the current state of the credit union industry," said Todd Spiczenski, vice president of the Center for Professional Development at the Credit Union National Association. "That is why the CUNA National Credit Union Roundtable for Board Leadership is such an impactful event to attend.

"Leading board members from some of the most powerful and successful credit unions in our movement once a year come together to discuss pressing issues, share best practices and learn innovative strategies on how to tackle the challenges facing their credit union," Spiczenski said. "Most importantly, the roundtable fosters an excellent networking environment where credit union directors can openly discuss issues of the day with their peers."

Charlotte Metro FCU tackles banks in Super Bowl ad

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CHARLOTTE, N.C. (2/8/12)--Charlotte (N.C.) Metro CU, with $267 million in assets, aired a local TV ad during the Super Bowl for the third consecutive year. This year the credit union targeted big bank fees.

Charlotte Metro's ad presented a man wearing a suit, using a vacuum, and displaying a sticker reading "Big Banks"--to represent sucking money away from consumers (Charlotte Business Journal Online Feb. 6).

After the man vacuums a child's hot dog out of its bun, the narrator says, "Apparently there's no limit to what big banks will do for profits. Don't get suckered. Switch to Charlotte Metro Credit Union."

The 30-second spot aired in the first half of Sunday's game between the New York Giants and the New England Patriots.

While national Super Bowl ads cost up to $3.5 million for 30 seconds of air time, local commercials cost much less, according to the Charlotte Business Journal Online.

Consumer dissatisfaction with bank fees was the impetus behind Bank Transfer Day Nov. 5. A recent Javelin Strategy & Research study reported that 610,000 consumers switched to credit unions as a result.

To view the Charlotte Metro CU ad on YouTube, use the link.

Ex CU manager admits to theft avoids jail time

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HINGHAM, Mass. (2/7/12)--The former manager of Hingham FCU received a suspended two-year jail sentence after confessing the theft of more than $100,000 from the credit union.

Joanne Taylor used her position as manager of the $46.5 million asset Hingham, Mass.-based credit union to remove money from members' accounts, which were later replenished with credit union funds (The Patriot Ledger Feb. 6).

The theft was discovered by a member whose funds had not yet been restored.

Prosecutors sought a one-year jail term for Taylor, who pleaded guilty to two counts of larceny of more than $250. Instead, Taylor was sentenced to the suspended jail term, five years of probation and restitution of $35,000, which represents the amount of stolen funds not covered by insurance.

SACU hosts Bandit Shield Program

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SAN ANTONIO (2/7/12)--San Antonio CU (SACU) is the first San Antonio financial institution to comply with a local program designed to reduce bank robberies, and to assist local, state, and federal law enforcement with their robbery investigations.

Click to view larger image The Federal Bureau of Investigation (FBI) and San Antonio Police Department (SAPD) launched the Bandit Shield Program in San Antonio Friday. San Antonio CU's main branch received the first decal issued in San Antonio, indicating the credit union has complied with the security and training requirements for the program. Pictured, from left, Robert Ramos, Jr., FBI; Erik Vasys, FBI; Capt. Adolph Zuniga SAPD; Dennis May, FBI; Jim Peters, SACU loss prevention officer; Shawn Scott, FBI; and Lt. C.W. Williams, SAPD. (Photo provided by San Antonio CU)
The Bandit Shield Initiative is a joint effort of the Federal Bureau of Investigation (FBI) and San Antonio Police Department. The regional crime reduction venture was developed through the collaboration of local law enforcement and the FBI, with input from financial institutions nationwide concerning methods that have worked to deter robberies and assisted in solving crimes.

As the first to participate, SACU's main branch received the first decal issued for compliance with the program.

"SACU is doing everything we can to ensure the safety of our members and their assets," said SACU Loss Prevention Officer Jim Peters. "Putting security measures in place and preparing our employees to respond is important in this process. When would-be robbers see the orange Bandit Shield decal on our branch window, they may think twice before taking action."

Although the program is not mandatory, other San Antonio-area financial institutions are encouraged to participate.

Va. CU offers fin ed to state Senate pages

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Richmond, Va. (2/7/12)--Virginia CU, with $2.2 billion in assets, Richmond, Va., recently hosted a financial education session for students who serve as Senate of Virginia pages and messengers.

Cherry Hedges (middle), financial education director for Virginia CU, works with two of the 34 Virginia Senate pages who participated in a financial education session offered by the credit union Jan. 30. (Photo provided by Virginia CU)
Cherry Hedges, Virginia Credit Union's financial education director, led the students through an hour-long presentation that included hands-on budgeting activities.

The students developed budgets based on the average income for several occupations. The students were randomly assigned careers, such as short-order cooks, child-care workers, legal secretaries, mail carriers, financial planners, physicians and others. The students considered the impact of careers on future-earning potential and learned to construct a realistic monthly budget based on the salaries they were assigned.

The lesson also included information about debit cards, credit cards, cash and checks. The students discussed opportunity cost and the importance of managing credit as adults.

The 34 students, most of whom were 13 or 14 years old, are in Richmond during the General Assembly session and serve the Senate clerk's office. The financial education session was one of several educational sessions offered while the General Assembly is in session.

iNY Timesi praises CU credit builder loans notes aSmarterchoice

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MADISON, Wis. (2/7/12)--A New York Times article this week cited credit union credit-builder loans as a way to help consumers establish credit or improve their scores.

"Credit builder loans are offered as a way for credit union members to do a couple of things: get something good on their credit reports and set aside some money for future use," credit scoring guru John Ulzheimer said in the article, which appeared in the New York Times "Bucks" blog.

The article explained that credit-builder loans typically work in one of two ways:  Under one arrangement, the borrower makes payments on the loan over a period of time, perhaps a year, and the credit union puts the money in an interest-bearing savings account. Once the loan is paid off, the borrower gets access to the money.

In another instance, the borrower may provide the money to the lender, who then puts the money in an interest-bearing savings account as collateral. Then, the lender provides a line of credit up to that amount, which the borrower pays off in monthly installments.

Under both arrangements, the lender reports the borrower's payments to credit reporting agencies.

Steven Rick, a senior economist at Credit Union National Association (CUNA), told New York Times reporter Tara Siegel Bernard that nearly 15% of the 7,400 credit unions in the U.S. offer a credit builder program.

"You can see if you're eligible to join a credit union through the website, though you'll have to call or go to credit union's individual sites to see if it offers these loans," Bernard wrote.

N.C. league seeks dialogue with regulators on dual exams and other issues

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RALEIGH, N.C. (2/7/12)--The North Carolina Credit Union League held a special meeting with its members Wednesday last week to discuss how the National Credit Union Administration (NCUA) and the North Carolina State Credit Union Regulator can resolve their differences regarding disclosure of a credit union's CAMEL rating and the use of dual exams.

The move came after the Raleigh, N.C.-based State Employees' CU got authorization from its state regulator and disclosed its state-issued CAMEL score (News Now Jan. 31).

The NCUA has disputed the disclosure of the credit union's CAMEL rating, for several reasons, including the fact that the state provides the rating to the NCUA which treats it as confidential information. The NCUA has discontinued its coordinated examinations with the state regulator, opting instead to begin separate exams for state-chartered federally insured credit unions in the state, over the next four weeks. In other states, the NCUA routinely conducts joint safety and soundness examinations with the state regulator.

"More than 70 people attended the meeting Wednesday to share their concerns and to ask questions of the state regulator, who was present at the meeting," John Radebaugh, league president/CEO, told News Now. "This meeting was a healthy exchange of ideas and part of the continuing process of gathering information."

The league also has talked extensively with NCUA officials.

"The solution to this situation clearly rests with both the North Carolina Credit Union Division and the NCUA," Radebaugh said. "The league will continue to work with state-chartered credit unions in the meantime to assist them through an unacceptable situation that they did nothing to cause."

The CAMEL rating system is NCUA's method of evaluating the health of credit unions. The rating, adopted by the NCUA in 1987, is based upon five critical elements of a credit union's operations: (C) Capital, (A) Asset quality, (M) Management, (E) Earnings and (L) Asset liability management.

North Carolina credit unions are well capitalized and among the healthiest credit unions in the country, said the league. As NCUA stated, the action is not the result of any safety and

soundness concern about state-chartered credit unions in North Carolina, the league added.

Because the regulatory burden on credit unions is at an all-time high, North Carolina credit unions need state and federal regulators working together to protect credit unions and their members, Radebaugh told News Now last week. Conducting dual examinations "on safe, sound, and healthy credit unions does nothing more than add to the regulatory burden and ultimately distract credit unions from focusing on serving and meeting the needs of their members," he added.

Maine Young and Free program introduces winter musical promotion

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PORTLAND, Maine (2/7/12)--Young & Free Maine has introduced a special winter promotion through a Sound Off Music Com­petition for Maine musicians ages 18-25.

The competition will be held Feb. 1 to March 5. The contest will be open to individuals, groups or artists, said the Maine Credit Union League (Weekly Update Feb. 3).

"This competition provides a new way for Maine's credit unions to connect with the state's young adults, while giving young musi­cians a unique platform to share their talent," said John Murphy, league president/CEO. "Through Young & Free Maine, and our spokesman Seth Poplaski, we've been able to hear the voice of this generation, so we can bet­ter serve them. This competition is another way we can recognize all that Gen Y in Maine has to offer, while bringing attention to our Young & Free program and driving website traffic."

Sound Off entrants must be between 18-25 years of age--in the case of bands, at least one member must be ages 18-25--and must not be under a recording contract. Entrants will submit an audio or video recording of themselves singing or performing original music to a special page on the Young & Free Maine website.

From March 7-16, the public will vote to choose a winner. The winning band or individual will receive a $1,000 gift certificate to a studio to be used for a recording session of their choice, and the opportunity to perform live at a festival, Aug. 4-9. The winner will be announced on March 19.

"Maine has an ex­citing music scene that continues to grow and evolve," said Seth Poplaski, Maine's Young & Free spokesman. "I know that 'Sound Off' will really let these musicians shine, and offers an opportunity that is very unique--with a prize of both stage and studio time."

Mid-Atlantic Corporate and VACORP complete merger

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MIDDLETOWN, Pa. (2/7/12)--Mid-Atlantic Corporate FCU in Middletown, Pa., and VACORP FCU, Lynchburg, Va., completed their merger and opened as a combined institution Monday.

Mid-Atlantic Corporate is the continuing charter and is maintaining its current location in Middletown, Pa.

Mid-Atlantic said that the merger, combining more than 800 credit union members and over $163 million in capital, creates one of the strongest corporates in the country.

"This merger exemplifies the power of credit unions working together for a common good and demonstrates the value of the cooperative corporate model that credit unions built," said Jay Murray, president/CEO of Mid-Atlantic Corporate. 

The combined entity has total assets of $4.1 billion. Its capital ratios are:

  • Retained earnings ratio of 0.49%;
  • Leverage ratio of 5.4%;
  • Tier 1 risk-weighted capital ratio of 19%; and
  • Total risk-weighted capital ratio of 22%.
"The combined institution will give us the opportunity to grow the usage of our products and services, which will help keep costs down for all members," Murray said.

CU System briefs (02/03/2012)

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  • DES MOINES, Iowa (2/6/12)--A man has been convicted on all charges related to a May 13 robbery of Tradesman Community CU, Des Moines, Iowa (Des Moines Feb. 3).  Robin Brooks Jr. was found guilty by a jury of bank robbery, possessing a .45-caliber pistol as a felon, and using the gun in a crime of violence. Police said a robber entered the credit union and passed a threatening note to a teller, who placed a tracking device inside the $5,900 stolen from the credit union. Police tracked it to a motionless but still idling van. Brooks faces up to 35 years in prison …
  • OSHKOSH, Wis. (2/6/12)--An Oshkosh, Wis., woman accused of selling fake shares of Facebook stock last fall also has been charged with using a counterfeit cashier's check for $250,000 from Winnebago Community CU, Oshkosh, to buy real estate in August 2011. Marianne A. Oleson, 46, was charged Wednesday with 33 fraud and drug-related felony charges and one misdemeanor drug charge. She faces, if convicted, a maximum of 218 years in prison and $418,000 in fines (Oshkosh Northwestern Feb. 1) …
  • LOWELL, Mass. (2/6/12)--Jeanne D'Arc CU  in Lowell, Mass., will celebrate its 100th anniversary Sunday, kicking off a yearlong celebration with events planned for members, employees and the community, according to the Massachusetts Credit Union League (Values & Visions Jan. 23).  Founded in 1912 as a cooperative credit society to encourage frugality and economic self-sufficiency among Lowell's Franco-American population, the credit union has grown into a $913.4 million asset institution. The credit union will sport a new logo, which incorporates spindles from former textile mills to illustrate the number 100 …
  • NEW YORK (2/6/12)--New York City-based Municipal CU (MCU) has launched the NYMCU Mobile Banking app, which allows members to bank safely and securely on the go 24/7 from their iPhone, iPad or iPod Touch. Members can manage their accounts, check balances, transfer funds between accounts, and find the closest branch or ATM in MCU's network. The app is available free from the iTunes app store. According to Steve Kibitel, MCU vice president of marketing, the app provides convenience to members, expands the credit union's offerings of high-tech services, and will help attract new members, "especially younger members who are comfortable with and often prefer to use digital technologies to conduct all types of transactions, including banking." …

Michigan First launches foundation scholarships

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LATHRUP VILLAGE, Mich. (2/6/12)--Michigan First CU has launched its Michigan First Foundation and an inaugural college scholarship contest with a $10,000 grand prize.

The foundation will continue the credit union's support for dozens of educational and community-focused organizations and causes across metro Detroit.

The scholarships are offered through the Young & Free Michigan program. Students  age 18-25 who plan to attend college in the fall can submit a 60-second video answering the question, "What impact will your education have on where you will be in 10 years?" The foundation is encouraging applicants to "get creative" with the video process and share the contest within their social networks. For more information, use the link, where voters will choose the 10 finalists.

In addition to the grand prize, the foundation will award scholarships of $5,000 for second place, $2,500 for third place and an iPad2 for the "People's Choice" winner of online voting. 

The foundation also will continue Michigan First's separate $1,000 high school scholarship program for the 11th year. High school seniors enter through their school counselors at participating schools, while college students apply online at the Young& Free Michigan site.

"We began as a credit union for Detroit teachers, and we'll never forget that heritage or diminish our deep commitment to education," said foundation President and Michigan First CU President/CEO Michael Poulos.

Judge orders NCUA to show cause in Wachovia case

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WICHITA, Kan. (2/6/12)--A federal judge in Kansas has ordered the National Credit Union Administration (NCUA) to show cause why NCUA's lawsuit against Wachovia Capital Markets LLC (now known as Wells Fargo Securities LLC)  over residential mortgage-backed securities (RMBS) sold to corporate credit unions should not be dismissed for lack of prosecution.

The Jan. 31 order by U.S. District Judge Julie A. Robinson of the U.S. District Court for the District of Kansas, Wichita, said NCUA had filed the case on Nov. 28, but there were no filings or court docket entries since the initial filing. It directed NCUA to show good cause in writing to the court by Feb. 26.  The Kansas court has jurisdiction because U.S. Central FCU, one of the corporates that bought the RMBS,  was headquartered in Lenexa, Kan.

To date, NCUA has not filed anything with the court confirming whether the complaint has been legally served on Wachovia.In the complaint filed in court, NCUA said the underwriting documents on the securities sold by Wachovia to U.S. Central FCU and California-based Western Corporate FCU contained untrue statements of material fact and omitted to state material facts related to the RMBSs sold. The NCUA's complaint pointed out it is not alleging fraud in the case.

The complaint alleged that originators of the RMBS had systematically abandoned the stated underwriting guidelines, resulting in riskier RMBS that the corporates would not have bought, had they known, said NCUA.  Wachovia representatives sold about $100 million in RMBS to the two corporates in 2006, and U.S. Central purchased approximately $80 million in RMBS underwritten by Wachovia, according to court documents.

NCUA placed U.S. Central and WesCorp into conservatorship on March 20, 2009. On Oct. 1, 2010, the corporates were placed into involuntary liquidation. NCUA is suing as the liquidating agency to recoup some of the losses.

The order came a day after a tentative ruling about the possible dismissal of a similar lawsuit the agency had filed against RBS Securities Inc. in the U.S. District Court for the Central District of California, Western division. A final ruling was expected late last week.

NCUA has sued several entities for a total of $2 billion related to the sale of RMBS to corporate credit unions, including RBS Securities, JP Morgan Chase, and Goldman Sachs. NCUA also settled with Citigroup for $20.5 million and Deutsche Bank Securities for $145 million, without filing lawsuits. Neither bank admitted any fault in the settlements (News Now Dec. 20 and Feb. 1).

SandP affirms CMG Mortgage Insurances BBB rating

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SAN FRANCISCO (2/6/12)--CUNA Mutual Group Mortgage Insurance Co. (CMG MI) Friday announced that Standard & Poor's Rating Services affirmed the company's "BBB" rating, maintaining a negative outlook.

Although the report expressed concerns about the private mortgage insurance sector as a whole, it noted that, "Relative to its peers … CMG MI's operating results have improved at a faster and more stable rate."

"CMG MI has worked closely with credit union customers to actively manage our portfolio, while implementing risk management practices to ensure the quality of new business," Kim Shaul, CMG MI senior vice president and co-general manager, said about the report.  

The mortgage insurance sector is experiencing high losses amid a struggling economy and very weak job and housing markets, the report said.

"Relative to its peers, however, CMG MI's operating results have improved at a faster and more stable rate," the report added. "Compared with the same period in 2010, the third-quarter 2011 pretax statutory operating loss (normalized for changes in the contingency reserve) decreased 47% to $19 million from $36 million, and the statutory loss ratio decreased to 118% from 140%. Moreover, unlike many of its peers, CMG MI did not have significant adverse reserve development.

"We believe CMG MI's capitalization relative to its operating results compares favorably to that of its peers," the report continued. "With statutory capital of $230 million and risk-to-capital ratio of 20:1 at the end of third-quarter 2011, CMG MI is better positioned to absorb operating losses expected in 2012. We also do not expect CMG MI to exceed the risk-to-capital or minimum policyholder protection thresholds put in place by certain state regulators. Because of this, CMG MI is at lower risk of facing regulatory action."

S&P explained its rationale for CMG MI's negative outlook "reflects the current trajectory of operating performance and the potential that adverse deviation may strain CMG MI's capital position."

Regarding the outlook, the report continued: "We expect delinquencies to continue at an elevated but decreasing level throughout 2012, with a full-year default rate approaching 5% and a loss ratio falling to less than 100%. We could lower the ratings if, at any time, CMG MI's pretax statutory income is not on a trajectory toward profitability in 2013."

Top 10 iNews Nowi stories for January (02/03/2012)

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MADISON, Wis. (2/6/12)--An article about Downey, Calif.-based Financial Partners CU's recently signed agreement to provide surcharge-free ATM access at all Walgreens in California was the most read News Now article in January.

The 10 most-visited stories for the month are:

10. Consumer Reports: Largest CUs' rates beat largest banks' rates

YONKERS, N.Y. (1/4/12)--The largest credit unions' rates have beat the largest banks' rates in a side-by-side comparison cover story in the prestigious comparative-shopping venue:  Consumer Reports. And they did so in all areas compared.

9. White House to use recess appointment for CFPB director

WASHINGTON (1/4/12, UPDATE 10:16 a.m. ET)--The White House Jan. 4 said it would claim use of its executive powers to install Richard Cordray as director of the Consumer Financial Protection Bureau (CFPB) after the U.S. Congress failed to take action on Cordray's nomination before the current work break.

8. Michigan First CU offers 'Turning Point' home loans

LATHRUP VILLAGE, Mich. (1/12/12)--Michigan First CU is offering an alternative lending option for consumers who have not previously qualified for a traditional mortgage.

7. NCUA names risks as 2012 supervisory priority

ALEXANDRIA, Va. (1/5/12)--While pointing out in its first letter to credit unions of the year (12-CU-01) that credit union finances continue to improve, National Credit Union Administration (NCUA) also provided credit unions with a heads up on the risk issues it will be particularly tracking this year.

6. Thrivent plans to become CU

MINNEAPOLIS and APPLETON, Wis. (1/17/12)--Thrivent Financial for Lutherans, with dual headquarters in Minneapolis and Appleton, Wis., will convert its bank subsidiary to a credit union pending approval from the National Credit Union Administration and other regulators, several news outlets reported Friday.

5. NCUA clarifies new call report questions' intent

WASHINGTON (1/11/12)--The National Credit Union Administration (NCUA) has clarified that new questions addressing minority credit unions and workplace diversity, which were added to fourth quarter call report documents with no explanation from the agency as to why, are required by the Dodd-Frank Wall Street Reform Act.

4. Mobile banking security tops 10 security threats for 2012

MADISON, Wis. (1/10/12)--While credit unions gear up for what may be radical growth in mobile banking, they also must keep in mind that mobile security is the No. 1 security issue in the list of top 10 computer security threats for 2012, according to McAfee Labs.

3. CNN Money: CUs are best borrowing alternative

NEW YORK (1/17/12)--Credit unions are the best borrowing alternative for consumers who are fed up with big U.S. banks, according to a Friday CNNMoney article.

2. Top 25 stolen passwords for 2011 announced

LOS GATOS, Calif. (1/6/12)--What was the most stolen online password of 2011? "Password." Computer users who think switching the "o" to a zero to make it "passw0rd" didn't fare much better. Both are on the list of the 25 most common passwords used on the Internet this year, according to SplashData, a provider of password management applications.

1. CU, Walgreens sign pact for surcharge-free ATMs

DOWNEY, Calif. (1/24/12)--Financial Partners CU in Downey, Calif., said it has introduced several new technological features and services to better serve its members, including a recently signed agreement to provide surcharge-free ATM access at all Walgreens in California.

AVCU state regulator offer free investor ed to CU staff

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BURLINGTON, Vt. (2/6/12)--The Association of Vermont Credit Unions (AVCU) and the Vermont Department of Banking, Insurance, Securities and Health Care Administration (BISHCA) announced a program that offers free investor education to credit union employees, available in Vermont this spring and early summer.

The Investor Education in Your Workplace (IEiYW) program is a 10-hour online investment and financial education program that credit union employees can complete over 10 weeks (Newslines Express Feb. 3).

The program was piloted in more than 200 companies throughout Wisconsin, Pennsylvania and North Carolina. Vermont's IEiYW program will begin in April and end in July, with topics ranging from the basics of saving and investing to taxes and retirement planning.

Participation in the education program is available free for up to 250 employees of Vermont credit unions and is sponsored and underwritten by the nonprofit Investor Protection Trust.

Employees nationwide are expressing less confidence in their ability to effectively manage their finances and prepare for their futures, AVCU said. BISHCA and AVCU said they believe the program will directly benefit credit union employees and will also educate them better so they are more prepared to answer member questions about investing.

CU in Vermont doubles scholarships due to rising costs

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BURLINGTON, Vt. (2/6/12)--In response to rising education costs, Vermont FCU (VFCU), with $335 million in assets, Burlington, has doubled the size of its educational scholarships and opened up the program to more students.

VFCU has increased its educational scholarships from to $2,000 from $1,000. Students of any age who have been accepted to, or are enrolled in, an accredited undergraduate program at a college, trade school, or university for the Fall 2012 or Spring 2013 semesters are eligible to apply. Applicants must be VFCU members (Newsline Express Feb. 3).

Four scholarships will be offered. Recipients will be selected based on academic achievements, enthusiasm for their planned field of study and service to the community.

VFCU's Scholarship Committee has provided scholarships for more than eight years.

Elevations CU signs 10-year contract with university

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BOULDER, Colo. (2/6/12)--Elevations CU in Boulder, Colo., was awarded a 10-year contract to provide banking services to students, faculty and staff at the University of Colorado's Boulder campus.

The contract exemplifies a long-standing partnership between the credit union and the university, Elevations said. "Our roots run deep on campus, and we were able to show the university that we are a committed partner and are able to deliver at the highest level," said Dennis Paul, Elevations assistant vice president.  

Chartered on the campus of the University of Colorado at Boulder in 1952, the credit union is a fixture in the community, Elevations said.

"Elevations has a vested interest in meeting the needs of our University of Colorado constituency, which accounts for nearly 20% of our membership," Paul said. "We will continue our focus on education and consumer advocacy with our campus partners."

In an era when university credit unions are struggling to maintain their position on campuses throughout the U.S., Elevations continues to strengthen its relationship with the University of Colorado.

The credit union will continue its scholarship support under the new contract. The contract includes financial services, a branch in the University Memorial Center and ATMs throughout the Boulder campus. The contract also includes the Buff OneCard Campus Card program, the university's multi-purpose ID card system.

Maine leagues mortgage note amendment passes committee

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PORTLAND, Maine (2/6/12)--The Maine Legislature Joint Standing Committee on Judiciary voted 9-3 'ought to pass" on an amendment proposed by the Maine Credit Union League to a mortgage bill.

The Judiciary Committee voted last week 10-3 "ought to pass" on a bill to protect homeowners subject to foreclosure by requiring the foreclosing financial institution to provide the court with original documents, a measure opposed by the league (Weekly Update Feb. 3).

The league then worked with the committee to introduce an amendment that addressed credit unions' concerns.

The amendment ensures that credit unions have ample time to obtain the note if they are not in possession of it at the time of foreclosure, and to limit the plaintiff to one request for inspection of the original note, said the league.

Last week, the league submitted the amendment to State Sen. David Hastings (R) and State Rep. Joan Nass (R), co-chairs of the committee, for their review. Nass and Hastings agreed to hold another work session to consider the amendment.

"This has taken a lot of time and resources, but we are pleased at the progress, said league President John Murphy. "Maine credit unions received praise from many members of the committee for coming up with language acceptable to most parties involved. We anticipate participating in additional discussions as the bill proceeds."

The bill will now go before the full legislature for a vote.

CFPB Consumers complain about credit cards mortgages

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WASHINGTON (2/3/12)--The new Consumer Financial Protection Bureau (CFPB) began taking credit card complaints from consumers on July 21 and mortgage complaints on Dec. 1.   As of Dec. 31, its Consumer Response team had received 13,210 consumer complaints, including 9,307 complaints about credit cards and 2,326 complaints about mortgages, CFPB said in its Semi-Annual Report Monday.

Of those complaints, 44% were submitted through CFPB's website, and 14.7% through telephone calls. Referrals from other regulators accounted for 34.9% of complaints received, and the remainder were submitted via mail, e-mail and fax, the report said.

Roughly  6,470  complaints--or  69% of all complaints about credit cards--fell into 10 basic categories. Billing disputes, identity theft/fraud/embezzlement, and annual percentage rate (APR) /interest rate issues were the most received complaints. The categories, with the number of complaints and percentage of complaints are:

  1. Billing disputes -- 1,278 complaints or 13.7%;
  1. Identity theft/fraud/embezzlement-- 1,014 complaints or 10.9%;
  1. Annual percentage rate/interest rate--950 or 10.2%;
  1. Other--854 or 9.2%;
  1. Closing/cancelling amount--478 or 5.1%;
  1. Credit reporting--437 or 4.7%;
  1. Credit card payment/debt protection--383 or 4.1%;
  1. Collection practices--378 or 4.1%;
  1. Late fee--364 or 3.9%;
  1. Other fee--334 or 3.6%.
The bureau noted that consumers are interpreting these categories differently. For example, one consumer would choose "billing dispute" to categorize a problem while another would categorize it as an "interest-rate" issue.  It may revise the options over time to promote consistent categorization.

Mortgage complaints totaled 2,326, with 100% of them falling into six types of complaints. The top complaints were in the areas of inability to pay for the loan, other, and problems with the process of making the payments. The six areas, and the number and percentages of complaints are:

  • Inability to pay (loan modification, collection, foreclosure)--889 complaints or 38.2%;
  • Other--540 or 23.2%;
  • Making payments (loan servicing, payments, escrow accounts)--501 or 21.5%;
  • Applying for the loan (application, originator, mortgage broker) --235 or 10.1%;
  • Signing the agreement (settlement process and costs)--96 or 4.1%;
  • Receiving a credit offer (credit decision/underwriting)--65 or 2.8%.

The bureau sent 75% of the total complaints, or 9,885, to companies for review and response. Here's how they responded:

  • 5,476 or 55.4% of the companies reported the issue was closed with relief;
  • 3,028 or 30.6% reported the issue was closed without relief;
  • 203 or 2.1% provided administrative response;
  • 1,178 or 11.9% of the companies were reviewing the complaint.
Roughly 7,349 of the company responses were made available to the consumers who complained and the consumers were given 30 days to notify CFPB if they wanted to dispute the company's response. Of those consumers:

  • 3,448 or 47.5% were still reviewing the company's reported resolution;
  • 2,910 or 39.3% did not dispute the company's reported resolution;
  • 951 or 12.9% disputed the company's reported resolution.
Use the link to access the full report.

Definition of capital determines Basel III impact on CUs

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WASHINGTON (2/3/12)--Basel III guidelines on financial institution capital levels may have been drafted in response to the negative impact large banks made on the economic crisis, but credit unions and other financial cooperatives likely will be included in any resulting regulation. How credit unions manage member shares relative to their capital requirements could determine how significant the impact of those regulations would be.

The role shares play in defining credit union capital was the main topic of a World Council of Credit Unions (WOCCU) webinar Wednesday on recent changes to the Basel guidelines and their impact on credit unions.

Economist Glenn Westley, who has worked in the credit union and microfinance sectors, discussed changes proposed by the Basel Committee on Banking Supervision--which is part of the Bank for International Settlements in Basel, Switzerland--particularly as they relate to credit unions.

"Are credit union shares defined on the balance sheet as capital or as a liability?" Westley asked participants from seven countries who logged into Wednesday's webinar. "It depends on what you do with them."

The two-hour online event, also recorded for later viewing, looked briefly at the history of the Basel guidelines, which have become the basis for financial regulations in a growing number of countries, and the changes that have occurred since the first Basel Capital Accord in 1988. Basel I, as it was called, was developed primarily to serve as operational guidelines for large money-center banks domiciled in the Group of 10 (G-10), the world's most economically developed countries at the time. The guidelines' safe operating principles grew in popularity and eventually applied to both large and small financial institutions in more than 100 countries.

Basel I identified credit risk as the main threat to financial institution safety and soundness, and recommended that an institution must hold at least 8% of capital in risk-weighted assets, comprised of a variety of financial instruments. The committee revised its requirements for Basel II, issued in 2004, maintaining similar capital levels to protect against risk but requiring additional capital charges for operational risk (such as fraud) and market risk (such as interest rate risk).

The Basel Committee issued the Basel III capital and liquidity guidelines in December 2010 and June 2011 after the previous guidelines failed to prevent the global economic recession of the past few years. The latest guidelines revised the view of how capital standards are measured and applied, Westley said.

"In general, Basel III narrows the definition of what's acceptable and calls for more and higher quality capital than Basel II," Westley told participants.

In addition to revising capital requirements, the new guidelines propose adding a capital conservation buffer composed entirely of higher quality capital, a countercyclical buffer that comes into play if an institution's credit growth is excessive, and a leverage ratio that provides an extra layer of protection in the event of errors in financial risk models or in the values the Basel Committee assigns to risk-weighted assets.

Despite the new features, financial institution safety still comes down to a question of capital adequacy. In the case of credit unions, adequacy may hinge on how member shares are defined and how the credit union treats member access to those shares.

Credit unions must treat shares that can be redeemed by members without restriction as liabilities on the balance sheet, Westley said, explaining that members can withdraw such shares and that necessary capital can disappear when the credit union needs it most. Credit unions that can unconditionally refuse share redemption, however, can treat those shares as capital, equivalent to common equity tier 1 (CET1) capital (the capital category that also includes retained earnings) because they can remain with the credit union in times of financial duress.

"If credit union members can only redeem shares to the extent that such redemptions are fully offset by the issue of new shares to new or existing members, then the shares are CET1 capital," Westley said. "Like the issue of common equity, credit unions can count on having the full proceeds from shares sold through the end of the previous year."

To view a recording of the webinar, use the link. The webinar will be available to viewers for a fee through July.

Metro West Community program urges Buy American

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FRAMINGHAM, Mass. (2/3/12)--MetroWest Community FCU is trying to make it easier for members to "buy American" by offering extra-low-rate car loans to its members looking to finance domestic vehicles.

The credit union, formerly Framingham Municipal CU, is offering the deal Feb. 13-25, in honor of Presidents' Day, for members to get loans to purchase a new Ford, Chrysler or General Motors vehicle.

"With our country facing record debt and unemployment, I truly believe it's important to support our economy by buying American products," said John Gallinagh, president/CEO of the $92 million asset Framingham, Mass.-based credit union, introducing the loan.

"During these challenging times, we all need to step up and do our part for our country," Gallinagh added.

Business leaders, economists and politicians from both sides of the U.S. political aisle are extoling the virtues of buying American-made goods, the credit union said.

During a recent special series on ABC World News, "Made in America," anchorwoman Diane Sawyer asked people to survey products around their homes to see how much was manufactured in the U.S. Most were surprised at how few items in their homes were made domestically, said the credit union.

Sawyer urged viewers to buy American, saying if every American spent an extra $3.33 on U.S.- made goods, it would create almost 10,000 new jobs in this country.

For more information, use the link.

Articles tell why CUs mortgage rates are better

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MADISON, Wis. (2/3/12)--Three articles from national media outlets explained why mortgages offered by credit unions have better interest rates.

Because credit unions operate on a smaller scale than banks and are not-for-profit, they focus primarily on lower-risk loans, compared with other financial institutions ( Feb 1.)

"As a result, even during a large-scale financial crisis, credit unions do not tend to suffer as much losses as their competitors or banks," the article said. "So factors like mortgage rates are not affected much. The articles added, "You also will be able to apply for auto loans at lesser rates than at any other financial institutions."

A credit union mortgage loan is like any other mortgage loan except for the rate of the interest and terms of the loan, said (Feb. 1).

"Credit union mortgage rates may vary from [credit] union to [credit] union, but they are comparatively lower than bank mortgage rates," the publication said.

And when looking to refinance a mortgage loan, consumers should always include credit unions in their searches for the best deal, said (Jan. 19).

To read the article, use the link.

Wolske to keynote CUNA Marketing Management Schools

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MADISON, Wis. (2/3/12)--Jon Wolske, culture evangelist for Zappos Insights, will be the featured speaker at the 2012 CUNA Marketing Management Schools, April 30-May 3 in Las Vegas.

Wolske, a veteran employee and speaker for the online shoe company Zappos Inc., will share his solutions for credit unions seeking to strengthen their company culture and improve their service. Zappos Inc. is regarded an innovator in company culture and service. Wolske will also share insights about the role marketers play during crisis management.

Divided into a three-year program, the CUNA Marketing Management School addresses the theories, strategies and techniques behind credit union marketing. Credit union marketers of all skill levels will learn marketing strategies and tips to take back to their credit unions. The conference is for credit union marketers of all skill levels.

First-year attendees will learn the fundamentals of marketing for credit unions and gain a working knowledge of the marketing basics. Students attending the second and third years of the CUNA Marketing Management School will build on their introductory knowledge and learn how to use these skills to implement their own strategic marketing initiatives.

Attendees of the CUNA Marketing Management Schools will:

  • Work towards their Credit Union Certified Marketing Executive (CU-CME) designation, the only marketing executive certification program in the industry;
  • Strengthen their compliance management by attending a pre-conference marketing compliance workshop;
  • Experience an event endorsed by the CUNA Marketing & Business Development Council; and
  • Network with credit union marketing peers.
Attendees of the CUNA Marketing Management School can earn the CU-CME designation by attending all three years of the CUNA Marketing Management School and passing a comprehensive exam at the end of each term.

Ford Foundations 30M helped CDCU with mergers

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NEW YORK (2/3/12)--A $30 million investment from the Ford Foundation has allowed a community development financial institution to merge with seven credit unions in California, in an effort to expand low- and moderate-income families' access to responsible and affordable financial services statewide.

The Durham, N.C.-based Self-Help FCU saw an opportunity to increase its impact as the economic downturn threatened the survival of all types of financial institutions. By merging with credit unions in low-income communities--some struggling to navigate the economic environment--Self-Help aims to preserve and expand the availability of responsible financial services for families who need them most (PR Newswire Feb. 2).

Sixty percent of low-income neighborhoods in California do not have a bank or credit union, but the state has two times the concentration of check cashers and payday lenders than the rest of the country. Predatory financial services, with loan interest rates of 400% and more, and check-cashing fees costing up to $2,000 a year, cost low-income families in California more than $8 billion a year.

In the two years since the Ford Foundation invested $30 million, Self-Help FCU's asset size grew to nearly $400 million from $75 million; its net worth to $57 million from $12 million; and its membership to nearly 50,000 from 15,000.

Self-Help loans to borrowers also shot up fivefold--to about 15,000 loans for nearly $225 million from about 3,000 loans for $41 million. More than 80% of Self-Help's members are families living in communities that are either economically distressed or have high unemployment.

Self-Help's goal is to have 40 branches with more than $1 billion in assets combine serving 100,000 members. Building off Ford's initial $30 million investment of risk capital, Self-Help is now seeking additional funding to expand the effort.

For more information, use the video link.

CU cites success of Happy Unbanking campaign

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FARMERS BRANCH, Texas (2/3/12)--In 2008, three years before grassroots activist Kristen Christian challenged consumers to transfer their funds from banks to credit unions on Bank Transfer Day, People's Trust FCU offered Houston-area consumers a similar call to action.

That was when People's Trust FCU launched its "Happy Unbanking" campaign, which highlighted the differences between credit unions and banks.

The credit union's advertising agency provided an outsider's perspective of the not-for-profit financial institutions, Patrick Flynn, sales and promotions coordinator with People's Trust FCU, told the Texas Credit Union League (LoneStar Leaguer Feb. 1). "Credit union members know how great we are, but the majority of the public does not know what a credit union is," Flynn said. "Highlighting our differences from banks is an easy way to communicate what makes us special."

The credit union formed its call to action around a microsite described the credit union cooperative structure and philosophy.

Despite the name, the purpose of the campaign wasn't to attack banks, but to bring attention to the credit union philosophy, Flynn said. "While it did cross our minds that some would consider it 'attacking,' we were confident that the majority would see it for what it was, an ad campaign trying to make a difference and catch people's attention," Flynn said.

The $416 million asset credit union measured the campaign's success through website statistics, new accounts opened, public relations received through local media and industry outlets and feedback from members.

Flynn offered five steps for credit unions considering a similar campaign:

  1. Develop a budget;
  1. Determine how the campaign will support the credit union's mission;
  1. Determine the hook--what will get consumers' attention;
  1. Obtain buy-in, from tellers to the CEO; and
  1. Develop an implementation plan;

CU System briefs (02/02/2012)

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  • NORRISTOWN, Pa. (2/3/12)--Pennsylvania's Superior Court has overturned the conviction of a former CEO of United Food and Commercial Workers (UFCW) Local 1776 FCU for theft, saying that she did not knowingly waive her right to be represented by a lawyer at her three-day jury trial in July 2010. The three-judge panel said Anne L. Clyburn, 45, of Chester County, must receive a new trial because neither the lower court judge nor prosecutor advised her of the specific elements in each of the charges against her before she waived her right to a lawyer. The district attorney's office is deciding whether to provide a new trial or appeal the higher court's ruling. Clyburn was convicted of stealing funds from the $7 million asset credit union, which is based in Plymouth Meeting, Pa.  during the more than six years she served as president/CEO.. She was charged with giving herself $32,469 in unauthorized raises and writing four unauthorized credit union checks for personal use. In September, she was sentenced to one to seven years in state prison and an additional five years' probation. During her appeal, she said the lower court judge should not have allowed her to represent herself ( Feb. 2) …
  • PITTSFIELD, Mass. (2/3/12)--Employees of Pittsfield, Mass.-based Greylock FCU  raised more than  $124,000  in its annual campaign for United Way, a 6.5% increase over last year's donation. Employees raised $91,122 of the total through payroll pledges, raffles, a flower sale, soup day, bingo night and other functions. Employee contributions were added to the $33,000 corporate support, which included Greylock's partnership--for the 12th year--with Johnson Ford Lincoln Mercury Nissan to donate a car raffled off to support the United Way and a Facebook campaign. Winner of the car was Christine Degregorio, an employee of Berkshire Community College.  From left are Greylock's Berkshire United Way team: Cathy Chenail, Mark Mancari, Brad Felix, Katy Codwise, Dan Dillon and Anna Flynn. (Photo provided by Greylock FCU) …
  • ROYAL OAK, Mich. (2/3/12)--Thomas Zamberlan, CEO of Royal Oak, Mich.-based OUR CU, is etiring, ending a 46-year career with the credit union movement, the credit union's board announced Wednesday.  Zamberlan has been with the credit union since 1985 and has been CEO since 1999. In 2008, in the midst of the nation's financial crisis, he told members, "First and foremost, we are interested in a long-term relationship with you as a member. There is no substitute for a conservative management that aims to operate by the principle that what is good for you is also good for the credit union." "Tom's departure leaves a significant void," said Board Chairman Jeremy Water. "While we would prefer not to see him go, his years of leadership and continued growth leave us in a solid position." Zamberlan was the $204 million asset credit union's fourth president in 53 years of operation …

NYIB extends scholarship deadline to Feb. 10

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MADISON, Wis. (2/3/12)--The National Youth Involvement Board (NYIB) has extended its scholarship application deadline to Feb. 10.

Available scholarships include:

  • Robert L. Curry Scholarship. This scholarship is awarded to one league liaison or state delegate within the NYIB Network. The scholarship covers lodging and registration for the 2012 NYIB Annual Conference.
  • Regional Scholarships. Three scholarships cover registration to the 2012 NYIB Annual Conference. The NYIB regions are divided into West, Central and East for the scholarships.
  • "Serving the Underserved" Scholarship. One scholarship will be awarded to cover registration to the 2012 NYIB Annual Conference. It will be awarded to an individual working with a low income designated credit union or one that focuses on serving an underserved market.
  • Development Education Training Scholarship. Up to two NYIB scholarships may be awarded annually to persons in the NYIB Network to attend the National Credit Union Foundation Credit Union Development Education Training. The scholarship covers registration fees. Travel costs are not included.
  • World Council of Credit Unions (WOCCU) Young Credit Union People Program (WYCUP) Scholarship. One scholarship may be awarded annually to an NYIB Network member to serve as the NYIB designee for the WYCUP. The 2012 scholarship covers registration for WOCCU's 2012 World Credit Union Conference in Gdansk, Poland. Travel costs are not included.
  • Top Classroom Presenter Scholarships. NYIB Network members who are leading classroom presenters may be recognized with a scholarship covering registration to the NYIB Annual Conference.
The NYIB annual conference will be held July 30-Aug. 2 in New Orleans. The conference is designed to provide tools, techniques, and insight to credit unions for reaching and teaching young consumers and members.

To apply for scholarships, use the link.

Javelin says 5.6M people switched from banks

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SAN FRANCISCO (2/2/12)--New research highlighting the impact of Bank Transfer Day and the Occupy Movement on the financial services industry estimates that 5.6 million U.S. adults with a banking relationship switched their providers in the past 90 days.

That's nearly three times more than people who moved funds from large banks for similar reasons the previous 90 days, said Javelin Strategy and Research.

It is "the first time we have market research data to measure the impact on the financial services industry," said James Van Dyke, founder of the San Francisco-based Javelin in a blog on the company's website last week.

Of the 5.6 million who switched, 610,000 U.S. adults or 11% cited Bank Transfer Day as the reason they moved their accounts from large institutions to smaller institutions, such as credit unions and community banks, said Van Dyke.

He noted that a Google search of  "bank transfer day" yielded 22 million responses. The company is not surprised at the results.

Javelin's nine years of customer-transaction research indicates that people are highly resistant to moving their money, Van Dyke said. For example, Huffington Post's 2008  "failed to barely register in previous Javelin surveys. Yet this time, Bank Transfer Day and the Occupy Movement did have a measurable impact," he added.

Of the 11% of actual bank switchers who cited BTD, 26% said they switched because the bank charged too many fees during the 90 day measurement period.

The blog also noted that individuals who state dissatisfaction with their banks have reasons that range from customer service to rates and fees.  Some individuals switch banks because they are relocating their primary residence, which points to the essential importance of a local branch or ATM. "The transition to electronic money inches steadily forward, but the evolution is far from complete."

"Javelin urges banks and credit unions alike to increasingly focus on sustainable mutual-prosperity for both provider and customer," he said, noting that technology can increasingly help make a shared-value approach possible.

The findings are from an online survey of 5,878 consumers filed in December.

CUNA Mutuals CMIS now a mutual insurance holding company

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MADISON, Wis. (2/2/12)--CUNA Mutual Insurance Society  (CMIS) is now a mutual insurance holding company. The reorganization of its structure was effective Wednesday. As a mutual holding company (MHC), CMIS is changing its legal name to CMFG Life Insurance Co.

Although the name changes, there is no change in control of the company, which will continue to be mutually owned with the same policyholders having full ownership of the new parent mutual holding company (MHC)  entity. The company and its subsidiaries will continue to use the trade name "CUNA Mutual Group."

CUNA Mutual Group received approval in October from the Iowa Insurance Commissioner for its plan for the new ownership structure, which was approved by more than 90% of policyholders in September.

"The conversion to a mutual holding company structure maintains policyholders' rights and significantly enhances our ability to compete and serve," said Jeff Post, president/CEO of CUNA Mutual Group. "This is a natural and positive step in our continuing commitment to credit unions and to the successful and proven strategy we have been pursuing in recent years."

Insurance policies and annuity contracts remain the same, and policyholder benefits and rights will not be reduced or altered, said the company, which added that premiums will not increase as a result of the MHC corporation.

VolCorp W.Va. Corporate receive members merger approval

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NASHVILLE, Tenn., and PARKERSBURG, W.Va. (2/2/12)--Members have given final approval to the merger of West Virginia Corporate FCU, Parkersburg, W.Va., and Volunteer Corporate FCU, Nashville, Tenn., the corporates announced Wednesday.

Volunteer will be the surviving entity, with offices in both Nashville and Parkersburg, the corporates said. Both corporates went into the union with capital commitments that will create a strong institution exceeding minimum regulatory requirements, they said.

The combined membership vote was 147-7 in favor of the merger, for an approval rate exceeding 95%.  Also, 82% of West Virginia Corporate's members agreed to invest in Volunteer Corporate PPC, using the same formula that applied to previous VolCorp members.

The combined corporate will have more than 250 PCC owning credit union members located in seven states. Assets will be about $1.4 billion, while capital will be about $72 million.

The National Credit Union Administration approved the merger at a closed on Jan. 26 (News Now Jan. 27).

Michigan league redirects small-CU fund

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LANSING, Mich. (2/2/12)--The Michigan Credit Union League (MCUL) is redirecting the former MCUL Small-Asset-Size Initiative Fund to include all affiliated Michigan credit unions, regardless of size, and based on need. It will be renamed the MCUL Credit Union Assistance Fund.

Because of the success of the league's subsidiaries and the continued support from affiliated credit unions, the league said it is increasing the fund to $100,000 from $70,000 (Michigan Monitor Jan. 30).

The league explained it wants to offer assistance to the state's credit unions facing the most significant financial challenges.

While the funds will assist fewer Michigan credit unions, the league will take a more targeted approach to assisting credit unions in need by offering free or discounted services on regulatory compliance, board governance, income improvement, education, marketing and asset liability management.

CU System briefs (02/01/2012)

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  • LANSING, Mich. (2/2/12)--Michigan's Office of Financial and Insurance announced a new organizational structure for the office, which regulates state-chartered credit unions and other financial institutions, said the Michigan Credit Union League (Michigan Monitor Jan. 30).  The new structure consolidates similar and/or complementary functions within divisions, and better uses the skills and regulatory experience of the staff, said OFIR Commissioner Kevin Clinton.  The major changes include the consolidation of consumer finance-related activities under a Consumer Finance Division that centralizes insurance examination and monitoring functions under an Insurance Evaluation Division and the consolidation of rate and form review responsibilities within an Insurance Rate and Forms Division …
  • PORTSMOUTH, N.H. (2/2/12)--A fifth arrest has been made in the  Dec. 19 robbery of Northeast CU, Manchester, N.H. Merry Beth Miner, 34, Laconia, was arrested on a felony charge of criminal liability to robbery. Walter Williams, 43, and Prince Sage, 27, were charged with robbery. Shyloe Johnson, 24, also was charged with criminal liability. Also arrested was Katie Falls, 28, Meredith, who allegedly drove the other suspects to scout out the credit union the day before the robbery. During the incident, two masked men entered the credit union office. One man held a gun while the other took money from teller drawers and the vault. The robbers fled with $60,000 (Union Leader Jan. 31) …
  • FAIRBANKS, Alaska (2/2/12)--Jessica Nel Brown, 33, of Fairbanks, Alaska, is charged with robbing a credit union hours before she was scheduled to appear in court on an unrelated theft charge (The Republic Jan. 31). Brown is charged with holding up a Fairbanks branch of Anchorage-based Alaska USA FCU at 12:40 p.m. Monday. Police said Brown allegedly walked into the branch and passed a robbery note to a teller. She as arrested in a vehicle at 3 p.m. Police said  Brown allegedly had a money envelope from the credit union at the time of the arrest … 
  • SEATTLE (2/2/12)--The board of directors at Seattle Metropolitan CU has named Richard Romero as CEO, effective in mid-February. Romero has more than 24 years'  financial services experience, most recently as chief operations officer at the $820 million asset Los Angeles Firemen's CU from 2004 to 2012. There he led teams responsible for consumer lending, member services, operations, call center, facilities, real estate and business services, commercial lending and information technology. From 2000 to 2002 he served as director of Branches and as vice president at Telesis Community CU, Northridge, Calif. Before that he worked in various positions at Washington Mutual and Great Western Bank …

Dakotas CU Foundation offers fin. literacy grants

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BISMARCK, N.D. (2/2/12)--The Credit Union Foundation of the Dakotas has grants available to community organizations and credit unions affiliated with the Credit Union Association of the Dakotas.

The foundation is funded by participating North and South Dakota credit unions. It funds projects in the areas of access to financial services, financial education, savings and asset accumulation, and small credit union development.

The foundation's grant committee will consider grant proposals throughout the year. Applications are due March 31.

Funds may be used for these purposes:

  • Education of credit union employees and volunteers;
  • Public education initiatives related to consumer finance;
  • Projects and programs that support new, small or community development credit unions;
  • Enhancement to league/association projects funded by other sources that are consistent with the foundation's mission and purposes;
  • Programs or projects that extend credit union services to the full range of membership, with emphasis on un-served, underserved or low-income consumers;
  • Affordable housing projects;
  • Disaster relief;
  • Partnerships that provide services or carry out projects consistent with the foundation's mission and purposes; and
  • Other purposes consistent with the foundation's 501(c) (3) mission and purpose.

Those applying must meet these criteria:

  • Be an affiliated North and South Dakota Credit Union or a community organization.  Non-credit union organizations may apply for grant funding, but must partner with a North or South Dakota credit union and clearly demonstrate how the project will impact credit unions and their members.
  • Solicit endorsement and/or funding from at least one local credit union or credit union-related supporter.
  • Be able to leverage funds from other community, philanthropic, government or other sources to maximize the benefit and ensure sustainability at the conclusion of the grant.
  • Obtain letters confirming in-kind support or funding commitments from partners within and outside the credit union movement.
  • Have tangible, achievable goals and objectives.

Organizations obtaining funds will be required to file a grant report. The report should include a summary of the project or event, and how the funds were used.

Applications for crashing the GAC due Friday

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MADISON, Wis. (2/12/12)--Applications to "crash" the Credit Union National Association's (CUNA) Governmental Affairs Conference (GAC) are due Friday.

The CUNA GAC will be held March 18-22 in Washington, D.C.

Fifteen young credit union leaders will be selected to Crash the GAC, said the Filene Research Institute.

The previously named "Crash Network" has been renamed the "Cooperative Trust," which carries the support of three-year seed funding from CUNA Mutual Group.

Crashers will design new ways for credit unions to use the cooperative model to grow, improve their communities and heighten advocacy. The crasher group with the most promising initiative, chosen by a panel of judges, will present its concept and results at CUNA's Community & Growth Conference in October.

Held for a third consecutive year, Crash the GAC will include many of its familiar elements. CUNA's Center for Professional Development has offered full scholarships for crashers to attend the conference. Crashers will attend conversational mentor sessions with system leaders, hill hikes to meet their state's representatives, and the Thunderpunch Party.

In addition to Crash the GAC, the Cooperative Trust has three national and four regional events planned with many new opportunities, including a second round of The Collider innovation tournament.

CU credit-quality metrics stabilized in December

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MADISON, Wis. (2/2/12)--Credit union credit-quality metrics stabilized in December, while 2011 saw a rise in credit union assets and a reduction in the overall number of credit unions, according to a Credit Union National Association (CUNA) economist's analysis of December's monthly sample of credit unions.

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"Credit union credit-quality metrics have stabilized at a relatively high level," Steve Rick, CUNA senior economist, told News Now. "Credit union loan delinquency rates averaged roughly 1.6% since March 2011, after falling from the recent high of 1.88% in March of 2010. With the economic recovery continuing through 2012, we expect the unemployment rate to continue to fall, albeit slowly, which should put further downward pressure on the loan delinquency rate."

For December, credit unions' 60-plus-day delinquency rate remained at 1.6%, the monthly estimates said.

Credit union loans outstanding increased about 0.4% during December, compared with a 0.1% gain in November. Credit card loans led loan growth with a 2.4% rise, followed by fixed-rate mortgages (1.9%), unsecured personal loans (0.9%) and used-auto loans (0.4%). New-auto loans and home equity loans each decreased 0.4%, and adjustable-rate mortgages declined 1.2%. Credit union loans totaled $586.3 billion, compared with $580.3 billion in December 2010, said the monthly estimates.

"Credit union loan balances increased 1% in 2011, a slight turnaround from the 1.2% drop in loan balances in 2010, according to CUNA's monthly survey of credit unions," Rick said. "Last year was the third consecutive year of basically little-to-no loan growth at credit unions.

"We expect loan growth in 2012 to be a little better, with forecasts of around 3%, as credit union members relieve some pent-up demand for durable goods such as automobiles and home furnishings," he added.

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Credit union savings balances grew 1.1% in December, compared with a 0.1% increase in November. Share drafts led savings growth with a 4.4% gain, followed by regular shares, which rose 1.3%, and money market accounts, which climbed 0.7%. Individual retirement accounts increased 0.4%, and one-year certificates increased 0.1%. Credit union savings in December totaled $846.7 billion--or $42.9 billion more than the $803.8 billion in December 2010.

The loan-to-savings ratio decreased slightly to 69%. Credit unions' liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 18%.

The movement's overall capital-to-asset ratio remained at 10%. The total dollar amount of capital is $101 billion.

Overall, last year saw an increase in credit union assets, while there was further consolidation in the industry. "Credit union assets rose 5.3% in 2011 to reach $847 billion, while the number of credit unions fell 3.4% to 7,339," Rick said.

Legislative bus tour visits Maine league praises CUs

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PORTLAND, Maine (2/2/12)--A bus tour designed to give state lawmakers a flavor of businesses and organizations across Maine pulled in Jan. 12 for a visit with the Maine Credit Union League, which was one of the sponsors of the tour.

Maine's House Assistant Minority Leader, Teresea Hayes, poses with Phil Moreau, president/CEO of Rainbow FCU and chair of the Maine Credit Union League's Governmental Affairs Committee at the Maine Development Foundation's Legislative Bus Tour. The league was a sponsor of the visit.
The league hosted a dinner and reception for nearly 60 legislators and guests during the Maine Development Foundation's Legislative Bus Tour. Legislators visited with attendees, received an update on credit unions and asked questions about credit unions' perspective on issues.

During the event, Maine House Assistant Majority Leader Andre Cushing III noted  he is "a proud member of Maine Savings FCU, which is located in my hometown of Hampden, and I see first-hand the benefits that they provide to members and the community," reported the league in the February monthly newsletter, News&Views.

House Minority Leader Teresa Hayes told the group, "I love my credit union and the services it offers."

Among the lawmakers attending were two credit union volunteers: Rep. John Picchiotti, board chair at KSW FCU, Waterville, and Rep. Ray Wallace, a member of the Supervisory Committee at Maine Highlands FCU, Dexter.  Both reiterated how supportive the league and credit unions are in the legislature.

Maine State Rep. Andre Cushing III, assistant house majority leader, was among lawmakers attending the Maine Credit Union League's dinner and reception for the Maine Development Foundation's Legislative Bus Tour. He is pictured here with Quincy Hentzel, the league's director of governmental affairs. (Photos provided by the Maine Credit Union League).
Rep. Wes Richardson, chair of the House Insurance and Financial Services Committee, noted the  league's and Maine credit unions' interactions with his committee.  "You do a great job and are well-respected in Augusta." Rep. Joan Nass, chair of the House Judiciary Committee, added that "Maine credit unions are such great advocates for consumers, and are always willing to work with me on important issues."

At the event, league President John Murphy highlighted credit unions' role in Maine's economy, noting they help 615,000 members and employ more than 2,100 full-time and part-time employees. He compared credit union statistics to those cited before a similar legislative bus tour in 2009. From January 2009 to September 2011, credit unions increased loans outstanding by $260 million to $3.6 billion, and members deposited an additional $800 million into credit union savings accounts.

"The increase in lending during the period when other lenders were pulling back, and the significant increase in deposits as consumers staged a very quick 'flight to safety,' clearly demonstrate the important role that Maine credit unions play in our economy," Murphy said.

ID theft among top consumer complaints in Wisconsin

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MADISON, Wis. (2/2/12)--Identity theft--already one of the nation's fastest growing crimes--has made its first appearance among the top 10 consumer complaints in Wisconsin in 2011, ranking fifth, according to Wisconsin Department of Agriculture, Trade and Consumer Protection.

"For identity thieves, accessing personal information like Social Security numbers, credit card numbers, and financial account information is like winning the lottery," said Sandy Chalmers, Division Administrator of Trade and Consumer Protection. "Remember that identity thieves will do or say anything to get their hands on your personal information."

Consumers should use extreme caution when sharing personal information online and safely maintain credit reports and bank statements, Chalmers said. Consumers should report irregular activity to their financial institution or credit card company.

Credit unions can alert members when any questionable activity occurs on their members accounts.

Also, the Internal Revenue Service (IRS) and the Justice Department recently completed a crackdown on suspected identity theft perpetrators as part of a stepped-up effort against refund fraud and identity theft.

The nationwide sweep, led by the Justice Department's Tax Division and local U.S. Attorneys' offices, targeted 105 people in 23 states. The initiative took place over the last week and included indictments, arrests and the execution of search warrants involving the potential theft of thousands of identities and taxpayer refunds. In all, 939 criminal charges are included in the 69 indictments related to identity theft.

IRS auditors and investigators also conducted about 150 compliance visits to check-cashing businesses in nine locations nationwide in the past week. The visits were made to help ensure these check-cashing facilities weren't facilitating refund fraud and identity theft.

The IRS has more than 250 check-cashing operations under audit nationwide to look for indicators of identity theft as part of the exam effort.The information from these audits and compliance visits will be used to assist continuing IRS investigations into refunding fraud and identity theft.

McGraw-Hill FCU launches green awareness campaign

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EAST WINDSOR, N.J. (2/2/12)--McGraw-Hill FCU has launched a solar energy awareness campaign around a renewable energy and solar panel project at The McGraw-Hill Companies' offices in East Windsor, N.J.

McGraw-Hill FCU's new awareness campaign centers around a renewable energy and solar panel project at The McGraw-Hill Companies' offices in East Windsor, N.J. The 70-acre solar facility will be fully operational in March. (Photo provided by McGraw Hill FCU)

The initiative includes an informational website, Facebook updates, and presentations at the credit union's Financial Literacy Series.

The new website provides information on McGraw-Hill Companies' solar energy project, advice for consumers considering solar energy, and links to external websites about solar energy.

Also, plans are underway to incorporate green energy advice into the credit union's monthly Financial Literacy Series seminars.

The inspiration for the renewable energy campaign came from The McGraw-Hill Companies' construction of one of the nation's largest solar energy projects on its property in East Windsor. The solar project will generate 14.1 megawatts of energy and significantly offset the need for other energy sources.

The solar facility sits on 70 acres of land across the street from the company's offices. It is reportedly the largest privately-owned, net metered solar project in the Western Hemisphere. Net metering, or net energy metering, is an electricity policy which allows utility customers to offset some or all of their energy use with self-produced renewable energy. The project is being coordinated with the involvement of NJR Clean Ventures, a subsidiary of New Jersey Resources, which promotes increased energy efficiency and the use of clean, renewable sources of energy, including solar, wind, geothermal and sustainable biomass.

"We were eager to support this initiative by showing our members how to make a difference" said Shawn Gilfedder, McGraw-Hill FCU president/CEO. 

Earlier this year, the credit union launched a "Solar Certificate of Deposit (CD)." Members responded by opening 160 CDs.