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Superior CU sues over Norlarco payout

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DENVER (3/17/09)--A Wisconsin-based credit union that had participation loans with Fort Collins, Colo.-based Norlarco CU before it was liquidated is suing the National Credit Union Administration (NCUA) as the liquidating agent for an additional $10.2 million or more the credit union claims Norlarco owed it. Superior Choice CU, based in Superior, Wis., filed the suit in a U.S. District Court in Colorado, on Nov. 5, 2008. It was first reported by The Coloradoan on March 10. In court documents obtained by News Now, Superior Choice said it entered into participation loan agreements with Norlarco in the Florida market but was not told that many of the loans were for investor mortgage loans, instead of the less risky owner-occupied mortgages. In its complaint, Superior Choice also said it was not notified that Norlarco and the builders in 2005 had amended their agreement, releasing First Home Builders from any responsibility to pay off the construction loans if the borrowers defaulted. Superior Choice said it would not have participated in the last two participation loans if it had known this. Norlarco lost more than $50 million on the loans and was placed into conservatorship in May 2007. On Feb. 29, 2008, NCUA placed Norlarco into involuntary liquidation, and NCUA assumed part of the troubled assets as part of a merger agreement in which Denver-based Public Service CU would assume Norlarco's assets and employees. Superior Choice had initiated a lawsuit on June 27, 2007 against Norlarco in the District Court for Larimer County, Colo., and the November lawsuit is a continuation of that suit with the liquidation agent. Superior Choice said it funded more than $22 million total for 112 loans, not knowing 45 of them were investor loans. Of the 112 loans, 40% defaulted, said court records. They represented more than $9.4 million. NCUA has filed a motion for dismissal, saying that Superior failed to file its claims in a timely manner and that the credit union did not exhaust all administrative remedies for each claim.

Biz Kid grants go to 16 PBS stations

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FEDERAL WAY, Wash. (3/17/09)--Sixteen Public Broadcasting Stations have received "Biz Kid$" outreach grants ranging from $7,000 to $4,000 each, for a combined total of $102,500, to extend the television series' reach into communities. The stations and local credit unions partner with volunteers to implement their projects related to financial education. "Biz Kid$" is a television program underwritten by America's Credit Unions and aimed at teaching youths about money. It airs on more than 334 PBS stations--97% of the U.S. public television market. Outreach Extensions, the creator of educational materials for "Bill Nye the Science Guy" and other public television series, developed the "Biz Kid$" curriculum using national financial literacy standards and provided a national campaign to extend the series into the communities through partnerships with credit unions. Eleven Tier 1 grantees received a combined $82,000, or $7,500 each. They and their credit union partners are:
* Iowa Public Television, partner to be determined; * KLRN, San Antonio, partnering with Security Service FCU; * Maryland Public Television, with State Employees CU; * Mountain Lake PBS, with UFirst FCU; * UNC-TV/North Carolina, with State Employees' CU; * Rhode Island PBS, with Navigant CU; * Wisconsin Public Television, with University of Wisconsin CU; * WFYI/Indianapolis, partner to be determined; * WGTE/Toledo, Ohio, with Ohio CU, Glass City FCU, and Great Lakes CU; * WVIZ/ Cleveland, Ohio, with the Ohio Credit Union League; and * WXXI/Rochester, N.Y., partner to be determined.
Five Tier 2 grantees received a combined $20,000, or $4,000 each. They are:
* WETA/Washington, D.C., with State Department FCU; * WEDU/Tampa, Fla., with Suncoast Schools FCU; * WJCT/Jacksonville, Fla., with VyStar CU and Community First CU; * WQLN/Erie, Pa., with Erie FCU; and * WSIU/Carbondale, Ill., with SIU CU.
The funds are from a pool created by the program's national underwriters, a coalition of America's Credit Unions. The coalition includes more than 150 credit unions, credit union foundations, and other supporting organizations. The largest funder is the National Credit Union Foundation.

CUNA Council honors best practice winners

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MADISON, Wis. (3/17/09)--The CUNA Marketing and Business Development Council announced its Best Practices Award winners during its 16th annual conference last week in San Diego. The awards recognize outstanding new marketing and business development approaches with potential for universal application across the credit union movement. Without regard to asset size, judges selected winners based on strategy, process, application and results. This year’s winners are:
* Beehive FCU, Rexburg, Idaho, for its cross-selling system to help it move toward a sales culture. The $130 million asset credit union implemented a system to track employee cross sales, establish goals, and provide incentives. The system helps generate reports that measure activity for individual employees, for one or more branches, and for the entire organization. In just over a year, the new system helped bring in $1.6 million in loans, $2.7 million in deposits, and more than 4,200 additional products and services. * Financial Partners CU, Downey, Calif., for its Marketing 212 program for staff. With only three team members to service all locations, staff, and departments for the $727 million asset credit union, the marketing team created ia Marketing 212 portal linked to the credit union’s Intranet. The portal--a one-stop location for information about marketing and communications--included all internal communications, marketing presentations and forms, current promotions, and more. With its fresh content and prizes for suggestions, the portal’s traffic has been high, and it has decreased calls to the marketing department. * TLC Community CU, Adrian, Mich., for its Merillat Industries newsletter, Creating Your Financial Future. When Merillat Industries announced it would close its Adrian plant in April, TLC acted to helps 221 members employed by Merillat. The $282 million asset credit union partnered with The Taylor Agency investment firm to create the Merillat newsletter. The content focused on TLC’s “People Helping People” philosophy, gave reassurance, highlighted familiar faces, and provided options for employees. TLC also interacted with employees at the plant and analyzed account structures to maintain open communications with employees. The project was successful, and the total cost of the newsletter was $509. With more plant closings likely for Michigan, TLC is looking at future considerations for the project.
For more information on the 2009 Best Practice Award winners or to view PowerPoint presentations of the winning entries, use the resource link.

N.J. budget may raise CU payrollproperty taxes

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TRENTON, N.J. (3/17/09)--Credit unions in New Jersey should expect their payroll and property taxes to increase under the state budget announced by Gov. Jon Corzine, says the New Jersey Credit Union League. Corzine made his annual budget address to a joint session of the state legislature March 4, said the league (Weekly Update March 9). With a deepening recession, rising unemployment, mounting state debt and falling state revenues, the budget touched every sector including government, private enterprise, individuals and not-for-profits such as credit unions. Corzine promised to pump $270 million into the state Unemployment Insurance Trust Fund, but officials said that probably won't be enough to avoid triggering an automatic tax increase on July 1st. The tax is triggered when the fund dips below a threshold measured on March 31. The Labor Department said the fund, which is down to $126.6 million, is paying $75 million a week in claims--nearly double that of last year. State officials indicated a tax increase of about $70 per employee is likely, the league said. A reduction in aid to municipalities also likely will increase real property tax on both homeowners and commercial properties, including credit union facilities, the league said. The state has the nation's highest real property tax.

IWall Street JournalI CUs are safe havens

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NEW YORK (3/17/09)--Credit unions are gaining new stature as reliable sources of lending in the tempest-tossed credit market, says an article headlined "Safe Havens: Credit Unions Earn Some Interest" in Sunday's The Wall Street Journal. "Big banks have become wards of the government while smaller banks are failing at a rate of about one a week," says the article. However, "more and more savers and borrowers are finding a safe harbor in the sleepiest, most unexciting corner of the financial world: credit unions." The article discusses rates on one-year certificates of deposit, home-equity lines of credit and fixed-rate mortgages for both credit unions and banks and provides charts and statistics provided by the Credit Union National Association (CUNA). Mike Schenk, CUNA senior economist, also provides statistics on credit unions' robust loan growth in first mortgages and used-auto loans. In an interview with Stephen Birkelbach, who joined Community First CU in Jacksonville, Fla., three years ago to finance a truck, Birkelbach talks about how he was so impressed with the customer service at the credit union that he moved all his financial business, including the accounts of his local carpet-cleaning business, to the credit union. The article also discusses today's economic environment and notes that although feeling pinched, credit unions have maintained stability. To access the full article, use the resource link.

MarketingBiz Development Council exec committee named

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MADISON, Wis. (3/17/09)--The CUNA Marketing and Business Development Council announced its executive committee and officers during the council’s 16th annual conference last week in San Diego. Anne Legg, vice president of marketing, Cabrillo CU, San Diego, will remain the council chair. Rich Jones, vice president of marketing, Elevations CU, Boulder, Colo., was re-appointed vice chair. Bryn Johansen, director of marketing, First Tech CU, Beaverton, Ore., is the secretary/treasurer. During recent elections for three available seats, incumbents Jones and Johansen retained their seats. Sonya Allen, marketing manager for Pelican State CU, Baton Rouge, La., was elected to the seat formerly held by Sandi Carangi, vice president of marketing and business development for Erie (Pa.) FCU. Other continuing members of the executive committee are:
* Carol Payne, vice president of communications and marketing, California and Nevada Credit Union Leagues; * Susan Miller, business development representative, Delta Community CU, Atlanta; * Rene McKee, vice president of marketing, California Coast CU, San Diego; * Lesley Carrell, vice president of marketing, Fibre FCU, Longview, Wash: * Tyler Disburg, chief administrative officer, Montana First CU, Missoula, Mont.; * Michelle Hunter, senior vice president of marketing and development, CU of Southern California, Whittier, Calif.; and * Kerry Goodliffe Parry, vice president of marketing, Premier Members FCU, Boulder, Colo.

CU takes lead in older-homes-renovation loans

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KANSAS CITY (3/17/09)--CommunityAmerica CU is sponsoring a low-interest, fixed-rate home equity loan program for older homes in Kansas City’s Lee’s Summit area, as part of an expanded MARC Home Remodeling Loan Program. Any house in the area would be eligible as long as its value doesn’t exceed $250,000, according to Mark Dunning, city director of codes administration (The Kansas City Star March 14). The loans for homes in the Lees Summit area should be of particular benefit because many homes are smaller and older, leading residents to seek improvements such as a remodeled kitchen, Dunning added. When the MARC program began several years ago, it asked financial institutions for proposals to improve housing in Kansas City’s inner-ring suburbs, the newspaper said. There was minimal response--except for CommunityAmerica, a $1.636 billion asset, Lenexa, Kan.-based credit union, Jody Ladd Craig, public affairs directors for MARC, told the paper. CommunityAmerica has been very easy to work with, and MARC’s alliance with the credit union has created “a very good partnership,” Craig added. The program made 130 loans totaling nearly $2.3 million during its first two years, the paper said.

Mountain America SBA loans create 700 jobs

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SALT LAKE CITY, Utah (3/17/09)--Mountain America CU helped create more than 700 jobs in Utah last year through Small Business Administration (SBA) loans. The $2.772 billion asset, West Jordan, Utah-based credit union has been a top lender since the inception of its SBA program in 2003, Mountain America said. Some financial institutions--such as Mountain America--have slightly altered their application requirements, but continue to lend. The Wall Street Journal recently noted credit unions’ role in small business lending in an article titled, “Small Businesses Find a New Source for Funding. “We’re one of the only solutions for a start-up, and we want to be a part of that,” Mountain America spokesman Curtis Anderson said in the article. Experts agree that small businesses are the key to job creation, the credit union said. Utah had more than 230,000 small businesses in 2006, and from 2004 through 2005 created 86.5% of the state’s new jobs, according to the most recent statistics from the SBA. “Utah has a strong entrepreneurial spirit,” said Mike Turner, senior vice president of Mountain America’s Business Services. “Small businesses are the backbone of our society and we need to support them and generate capital to keep Utah going strong.”

IN.Y. TimesI mentions two CUs favorably

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NEW YORK (3/17/09)--The “Your Money” column in Friday’s New York Times favorably mentioned two credit unions for helping borrowers with troubled or foreclosed mortgages get back on their feet. Columnist Ron Lieber wrote about The Golden 1 CU, Sacramento, Calif., and Boeing Employees CU (BECU), Tukwila, Wash. “The Golden 1, one of the nations’ largest credit unions, now has a mortgage repair loan for people who have lost a home to foreclosure but want to buy a new one,” Lieber wrote. Aaron Bresko, BECU vice president of lending, is helping create a panel called “How to Lend to the Newly Credit Impaired” for a conference to be held later this year, Lieber added. Lieber quoted Bresko about the rationale for the panel: “Good people have bad things happen to them, so how do you find those people and reach out to them?” Bresko said. “As the year progresses, it’s going to be an emerging market.” The Golden 1 has $6.971 billion in assets. BECU has $8.639 billion in assets.

International Partnerships program adds two CUs

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CORDOBA, Mexico (3/17/09)--Two innovative North American credit unions may pair up through World Council of Credit Unions’ (WOCCU) International Partnerships Program.
Click to view larger image Steve Blakely, Servus CU president/CEO (left), confers with a Caja Yanga financial representative during a transaction with one of the Mexican credit union's rural members.
The proposed partnership would be the first time a Canadian credit union has individually participated in the program with an institution in another country, WOCCU said. Officials from both Servus CU, in Alberta, Canada, and Caja Popular de Ahorros Yanga, S.C. de A.P. de R.L. de C.V., better known as Caja Yanga, in Veracruz, Mexico, agreed to implement the two-way flow of lessons in transaction technology, management strategies and credit union philosophy they will share as part of the new relationship. The fact that Servus CU has assets of nearly $8 billion and Caja Yanga has assets of about $20 million strengthens the relationship through exposure to different approaches they bring to member service, WOCCU said. “As your credit union grows larger it can sometimes be a challenge to maintain your co-operative roots,” said Steve Blakely, Servus CU’s president/CEO. “At Servus CU, we believe deeply in our roots and that being a credit union makes a difference to the members we serve. Caja Yanga continues to help members through innovative delivery channels and services and products designed to fit its members. We were very impressed with its approach and success in growing its membership, particularly in the youth service area.”
As part of its semilla cooperativa (cooperative seed) methodology, Chja Yanga sends financial representatives, often on motorcycle, to serve members kiving in rural areas. (Photos provided by World Council of Credit Unions)
Caja Yanga has taken an additional member-service step outside of its partnership role to pilot WOCCU’s MatchSavings.org. The online program allows people worldwide to match the small savings of individual Caja Yanga members through a dedicated website. By helping Caja Yanga members save for things like housing, microenterprise, education and healthcare expenses, MatchSavings.org participants help the credit union’s poorest members build savings habits as a first step toward overcoming poverty, WOCCU said. For more information, use the link. Servus CU is the first Canadian credit union to explore a direct credit union-to-credit union partnership under WOCCU’s partnerships program. As an initial step, the two partner-credit unions last week met in Cordoba, Mexico, to examine Caja Yanga's outreach to rural communities and the success of WOCCU's PATMIR II project funded by the Mexican Ministry of Agriculture, Livestock, Rural Development, Fishing and Food. The project has helped Caja Yanga grow its membership and strengthen its role as a financial institution. The Servus delegation traveled from village to village within the state of Veracruz, then visited the small community of El Moral where Caja Yanga has implemented WOCCU's semilla cooperativa (cooperative seed) model. Members using the semilla cooperativa model form small groups of 10 to 20 people in their communities. Group members encourage each other to save and sometimes guarantee individual loans within the group. Before Caja Yanga became involved, it was impossible for El Moral's residents to receive credit or even open a savings account, because residents have few financial resources and live far from the nearest city. To serve El Moral, Caja Yanga sends field officers to the small town armed with personal digital assistant devices and handheld printers to process financial transactions in real time. Caja Yanga provides the same service to more than 60 small communities around the state. In addition to WOCCU staff members and Blakely, Servus CU delegates visiting Caja Yanga included: board member Penny Reeves, also a WOCCU board member; K. Wayne Cook, vice president of credit; and Mike Dickinson, senior manager of corporate communications. Reeves said they hope the partnership will encourage other Canadian credit unions to participate in the WOCCU partnerships program.