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Audit Will Delay HarborOne Conversion Vote Results By 10 Days

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BROCKTON, Mass. (3/13/13)--About 115 members of HarborOne CU in Brockton, Mass., attended a special meeting Monday evening to vote on whether to convert to a bank. However, the outcome will not be known for roughly 10 days. 

An independent inspector needs to tally the ballots before the vote can be finalized, according to James Rice, HarborOne vice president of marketing. It is mandated that the inspector complete the tabulation within 10 calendar days of the vote (Banker and Tradesman March 12).

Only about 15 people voted at Monday evening's meeting, Rice told the publication. However, he could not say how many total votes were cast because members were allowed to send in their  ballots by mail or else bring their completed ballots to any one of HarborOne's 14 branches, he added.   

The conversion, if approved, would take effect by the end of 2013 (News Now May 8).

The Credit Union National Association and the Massachusetts Credit Union League have said a credit union charter is the best option for credit union members, and any decision on converting should be in the members' best interest (News Now Feb. 17).

Plans to pursue conversion were announced by the $1.9 billion asset credit union in March 2012. HarborOne said that converting to a bank charter would allow it to raise more capital, such as through a stock sale; increase lending, especially with business loans; and expand its customer base into Boston. It also said it cannot open a branch in Boston because it is restricted to serving four counties in Southeastern Massachusetts.

CU System Briefs (03/13/2013)

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TRENTON, N.J. (3/13/13)--New Jersey Gov. Chris Christie has nominated Lourdes Cortez, president/CEO of North Jersey FCU in Totowa, N.J., with $214. 6 million in assets, to the William Paterson University Board of Trustees. Founded in 1855 as Paterson City Normal School to train teachers for Paterson public schools, the university became a liberal arts school in 1967. It now serves more than 11,500 students through five colleges, with more than 250 undergraduate and graduate academic programs and 400 full time faculty members. Named for New Jersey's second governor, the university's 370-acre campus is located in Wayne on the former family estate of Garret Hobart, the 24th U.S. vice president (The Daily Exchange March 12) ...

National Journal: Latino Community CU Serves Immigrants

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DURHAM, N.C. (3/13/13)--By understanding the special financial needs of immigrants--many of whom only speak Spanish fluently--Latino Community CU (LCCU) based in Durham, N.C., and with a total of 10 branches in six North Carolina cities, is a standout financial institution in a changing economy, notes the prominent Washington publication National Journal in a feature story this week.

The article, which included background information provided by the Credit Union National Association, explained that the $115 million asset LCCU has many members who don't speak fluent English, live paycheck to paycheck and have never opened a deposit account.

Because of a crime wave in Durham in the late 1990s in which muggers targeted Latinos because they tended to carry large amounts of cash in lieu of any financial accounts, LCCU was initially chartered as a response to that problem. Nationwide, roughly 20% of Latino households don't have a deposit account, according to the Federal Deposit Insurance Corp. 

In its eight years of existence, LCCU, which serves more than 54,000 members, has seen robberies decline by 4.2% each time it has opened a new branch, according to a University of Virginia study, said the National Journal. Also in that time period, property values in host counties increased nearly 4%, constituting $9.8 billion in overall property-value growth.

By opening accounts at the credit union to make deposits, many members now are moving into  the ranks of the middle class, Erika Bell, LCCUs vice president of strategy and service, told the publication. "They now own a home, they have gotten into the habit of budgeting and saving, and have kind of been integrated into the mainstream financial system," she added.

LCCU has contracted with the well-established State Employees' CU in Raleigh, N.C., with $25.1 billion in assets, for its bookkeeping needs and some other financial management issues so it can concentrate on front-office outreach, the National Journal said.

The article is part of a series on "The New Economy," a joint project of National Journal and The Atlantic magazines.

To read the article, use the link.

Mazuma CU Minority Business Client Wins Awards

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KANSAS CITY, Mo. (3/13/13)--Minority-owned Alpha Energy and Electric became a Mazuma CU business resources partner in 2009, after being turned away three times by different banks, when Mazuma came through by providing business loans and deposit accounts. The company now has won several awards.

"Mazuma is honored to be a small part of Alpha Energy's success," said Brandon Michaels, Mazuma president/CEO. "After being declined by numerous area banks, Mazuma simply gave a valuable, talented community asset the opportunity booster-shot to succeed." 

As a corporate sponsor of the Mid-America Minority Supplier Development Council (MSDC), Mazuma CU in  Kansas City, Mo., with $477 million in assets, saw what can be accomplished when its business resources partner Alpha Energy and Electric, Inc., Kansas City, Mo, won the MSDC 'Supplier of the Year' Award (Category II--Annual Sales between $1 million to $10 million).

Also, Alpha E&E received The U.S. Small Business Administration 2012 Minority Small Business of the Year (Kansas City District) Award. The announcement came at the 27th Annual Mid-America MSDC Award Luncheon held Jan. 30 in Kansas City, Mo. 

Alpha Energy and Electric provides innovative design-build approaches and is a local leader in green energy for some of the Midwest's highest profile clients, including the Sprint Center Arena in Kansas City, Missouri, Whiteman Air Force Base in Knob Noster, Missouri, the Robert Denney Federal Courthouse in Lincoln, Neb., and Kansas City's major league sports venues Kauffman Stadium and Arrowhead Stadium.

"In the span of a few short years, Alpha Energy and Electric grew from a tiny outfit operating in a two-room office into a company that contributes to the region's largest construction projects," said Alpha Energy and Electric Chairman and CEO Ike Nwabuonwu. "All of our clients counted on Alpha Energy and Electric's professional expertise. When our growth spurt made day-to-day finances a little tougher to achieve, we counted on Mazuma CU, and they were there for us when typical banks ran the other way.

"Without a partner like Mazuma, Alpha Energy and Electric would not necessarily be receiving the accolades our small minority business enjoys, today," he added." Frankly, our success is also Mazuma's success; we absolutely treasure our relationship."

"It's incredibly gratifying to work with and witness a company like Alpha Energy and Electric grow. All we did was add a little financial fertilizer and water the lawn," said Lisa Snead, Mazuma's vice president of business partnerships. "Never mind the recession. It was the vision, commitment and caring of their fearless principles, chairman and CEO Ike Nwabuonwu and President Gabriel Okafor, which made Alpha Energy reach this new plateau. The recognition of our city's leaders and Alpha Energy's general success is nothing short of inspirational."      

The Credit Union National Association and credit unions reintroduced in Congress last month legislation to raise credit unions' member business lending cap to 27.5% of total assets, up from the current 12.25%. Doing so would generate $14.5 billion available for member business loans--and increase jobs by 158,000 in the first year without costing the taxpayer, according to new statistics from CUNA.

Top CU Award Winners Announced By PCUA

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HARRISBURG, Penn. (3/13/13)--The Pennsylvania Credit Union Association has announced the winners of some of its highest honors, which include the Desjardin Youth Financial Education Award, the Louise Herring Philosophy in Action Member Service Award, and the Dora Maxwell Social Responsibility Community Service Award.

The awards are named after some of the most prominent names in credit union history. Desjardin, of course, was the co-founder of the Caisses Populaires Desjardins in Canada, a forerunner to North American credit unions. The award honors a core value of credit unions: To assist their members with a better understanding of their finances so that they can make the best decisions possible with their hard-earned money.

The PCUA winners of the first place Desjardins Youth Financial Education Award in their asset categories are:

  • HealthCare First CU, Johnstown--$50 million to $150 million in assets;
  • Service 1st FCU, Danville--$150 million to $500 million in assets; and
  • TruMark Financial CU, Philadelphia region, more than $500 million in assets, and honorable mention for that asset category, Clearview FCU, Moon Township.
The winners of the Louise Herring Philosophy in Action Member Service Award are:
  • First Capital FCU, York--$50 million to $250 million in assets; and
  • TruMark Financial CU, Philadelphia region, for $1 billion and more in assets.

The first place winners of the Dora Maxwell Social Responsibility Community Service Award are:

  • Keystone United Methodist FCU, Cranberry Township--$5 million to $20 million in assets;
  • HealthCare First CU, Johnstown--$50 million to $100 million in assets;
  • Tri County Area FCU, Pottstown--$100 million to $200 million in asset;
  • Merck Sharp & Dohme FCU, Chalfont--$200 million to $500 million in assets, and honorable mention in that category--Service 1st FCU, Danville;
  • For $1 billion and more in assets, first place winner is TruMark Financial CU, Philadelphia Region, and honorable mention goes to American Heritage FCU, Philadelphia; and
  • The Chapter award goes to the York Chapter.

The Dora Maxwell Award is part of a national recognition program to honor credit unions for their outstanding efforts in community projects and activities. The Louise Herring Award for Philosophy in Action was established in 1990 to commend credit unions that make exceptional efforts to include credit union philosophy in their daily operations and member service.

The PCUA said the awards will be presented on Friday, May 17, at its Annual Convention in Hershey.

Catalyst CEO Reports On Year One At Helm

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PLANO, Texas (3/13/13)--It's been about 18 months since Catalyst Corporate FCU came into being through the merger of Georgia Corporate and Southwest Bridge Corporate and about a year since Kathy Garner took the reins as president and CEO. She used the occasion of that anniversary to send out a scorecard of commitments made to member credit unions and commitments that have been kept.

"Looking back, Catalyst Corporate had a lot to prove a year ago. When we asked credit unions to trust us with their capital, we made a lot of commitments. We have kept each of those commitments," Garner said in a release.

"When I came on board a year ago, my first responsibility was to ensure that Catalyst Corporate was operating safely and soundly by executing the business plan that was presented to capitalizing credit unions," Garner said. "The Catalyst Corporate team has done that, meeting or exceeding all regulatory capital requirements, including retained earnings, prior to (the National Credit Union Administration's) deadlines."

Garner said Catalyst Corporate's retained earnings ratio at Dec. 31, 2012, was 0.84%, compared to the 0.45% that corporate credit unions are required by NCUA to meet by October of this year.

Another metric that Catalyst Corporate tracks is a "coverage" ratio that measures the percentage of the corporate's expenses covered by fee income. While there is no regulatory requirement regarding such a ratio, Garner said it is "an important measure of internal efficiency." An ability to cover expenses through fee income means less reliance on balance sheet activity for income and it means reduced exposure to risk, Garner says. At Catalyst, the ratio generally ranges between 75% and 85%, she reports.

Garner stakes claim to financial transparency as a hallmark of her first year as chief executive. She said it has been achieved through frequent and varied communications with members. They have ranged from the traditional member communications, to such things as a new "regular member update from the CEO," a boost in senior management's in-person contact with credit unions, and installation of new processes for obtaining member feedback, such as its Catalyst Councils and member surveys.

The increased communications has had positive results, Garner says, citing an example of a service that resulted from a member recommendation--Catalyst Corporate's quarterly Due Diligence Report, which pulls together all of Catalyst Corporate's financial statements and supporting documentation in one location.

"Whether you're a member credit union looking to compile a board report or a non-member credit union evaluating Catalyst Corporate's performance, you can find all the information you need on our due diligence web page," she said.

Garner says if anyone is looking for label to affix to her first year as CEO, it could be called a year of integration. Following on the heels of the merger between its own legacy corporates, Catalyst Corporate completed consolidations with both Western Bridge Corporate FCU and First Corporate CU. Garner said tight timeframes made for an intense year, but the broader membership base will benefit all.

Alabama Shared Branching Network To Pay CU Dividends For 3rd Year

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BIRMINGHAM, Ala. (3/13/13)--The Credit Union Service Centers (CUSC) of Alabama will pay a shareholder dividend for the third consecutive year. The 2013 payout will be the largest to date.

"It's important to the CUSC board to reward participating credit unions with this rebate," said CUSC Chairman Patrick La Pine. "Shared branching is one of the unique ways that credit unions are different from other financial institutions. We have seen more transactions and more growth within the network. The board hopes more credit unions will see this success and help provide members with the convenience they desire."

The CUSC board approved a Patronage Rebate Program of 60% of 2012 net income before taxes. That results in participating credit unions receiving a 20% increase in the amount of the rebate from 2012. The exact amount of the rebate will be based on the credit union's percentage of total transactions during the past year.

CUSC of Alabama currently has 131 service centers statewide, which include eight new shared branching locations that were opened throughout Alabama in 2012. CUSC provides its member credit unions with marketing materials and a promotional video within its website.

A shared branching message is also a part of the League of Southeastern Credit Unions--which represents credit unions in Alabama and Florida--Cooperative Image Campaign, which has run in 2011 and 2012.