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PCUA announces lifetime achievement award winners (03/20/2012)

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HARRISBURG, Pa. (3/21/12)--The Pennsylvania Credit Union Association (PCUA) has announced two men will be honored with the association's 2012 Lifetime Achievement Awards.

Dave Baker, president/treasurer of York (Pa.) Education FCU, is recipient of the William W. Pratt Professional of the Year Award (Life is a Highway March 20).

A teacher, Baker began managing the credit union in January 1971. Under his leadership, it grew from 134 members to more than 3,900, and from $23,374 in assets to $26.5 million. The credit union serves 54 select employee groups and operates a student branch at Red Lion Area High School. Baker served on PCUA's board of directors 1988-1991. He was a member of the Credit Union Advisory Council of the Federal Reserve Bank of Philadelphia, 1992-1994 and was chairman in 1994. He also served on the nominating committee of Mid-Atlantic Corporate FCU and is a former two-term president of the York Chapter of Credit Unions.

Robert Greek, a board director of Pittsburgh Central FCU, is recipient of the Joseph A. Moore Volunteer of the Year Award.

Greek has been a volunteer for 38 years. For 25 years--from 1974 to 1999--he served as chairman of Union Electric Steel FCU (now Southwest Community FCU, Carnegie). In 1991, he became director at Pittsburgh Central.  Greek was a member of the steering committee to organize the Pennsylvania Credit Union Foundation and served six years--1996-2002--as a director and member of the Fundraising Committee.

The awards will be presented during PCUA's Annual Convention May 22 in Pittsburgh.

Michigan CRI report shows CUs impact

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LANSING, Mich. (3/21/12)--The Michigan Credit Union League & Affiliates' 2012 report on Community Reinvestment Initiative (CRI) shows the credit union advantage to consumers, said the league.

Credit unions in the state use the tool to show why credit unions offer a clear choice for consumers, and to provide information to members of Congress, state legislature, credit union boards and the public, the league said (Michigan Monitor March 19).

Statistics related in the report about the benefits of credit unions to consumers include:

  • Financial benefits--Michigan credit union members enjoyed an estimated $259 million in the form of lower fees and better rates between June 30, 2010 and June 30, 2011.
  • Invest in America--Roughly 499,540 credit union members nationwide received discounts on their new car purchases through the Invest in America program since it began in December 2008.
  • Save to Win--Credit union members deposited $30 million in Save to Win, a prize-linked savings account offered by credit unions in the state.
  • Youth Financial Education--Michigan credit unions educated 49,945 K-12 students during the 2010-2011 school year.

New survey CUs among elite in loyalty rankings

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WABAN, Mass. (3/21/12)--Credit unions continue to stand among the elite when consumers are asked to rate their loyalty to companies, according to a new survey.

A survey of 10,000 U.S. consumers about their loyalty to 206 large companies across 18 industries showed only seven companies have "very strong" loyalty ratings. Credit unions ranked No. 5, just behind  Sam's Club, Aldi, USAA, and Publix and ahead of Amazon.com, and H.E.B. At the other end of the spectrum, 37 companies earned "very weak" loyalty ratings.

The survey report was released Tuesday by Temkin Group, a Waban, Mass., customer experience research firm.  Last month Temkin released results of another customer satisfaction survey targeting experience and credit unions also scored highly in that survey.

In this week's survey, grocery chains, retailers and fast foods scored as the top three industries, with an average rating of "strong."  At the bottom: TV service providers and Internet service providers.  Credit card issuers and banks were in six of the bottom nine spots in the ratings.

"Our research shows that loyalty is up for grabs across many industries," said Bruce Temkin, managing partner of Temkin Group and the report's author.

The ratings examined three components of loyalty:

  • Likelihood of consumers to recommend companies;
  • Reluctance of consumers to switch business away from companies; and
  • Willingness of consumers to purchase additional products and services from the companies.
Credit unions also had double-digit loyalty leads over the banking industry average. Credit unions were among nine companies that fell into that category.  Citibank, Bank of America, HSBC were 15 or more percentage points below the banking industry average.

Credit unions were also among three companies showing the most improvement over last year. Nineteen companies saw loyalty ratings improve, the report said. For more information, use the link.

N.Y. responds in Hudson Valley mortgage tax appeal

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ALBANY, N.Y.  (3/21/12)--The State of New York filed its response Monday to Hudson Valley FCU's appeal of lower court decisions on the state's mortgage recording tax (MRT) and to amicus briefs from a number of credit union organizations and federal government entities challenging the tax.

In its response, filed with the State of New York Court of Appeals, the state argued that the Federal Credit Union Act (FCU Act) does not bar collection of recording taxes on mortgages securing federal credit union loans because the tax "is not a  property tax."

"The sweeping tax immunity Hudson Valley seeks has no statutory or constitutional basis. Although Congress exempted federal credit unions from some forms of taxation in the FCU Act, Congress did not exempt credit union members or credit union mortgages from state taxation," said the state's response. "This court has repeatedly held, contrary to Hudson Valley's claim, that the recording tax is a privilege tax imposed for the privilege of recording a mortgage, not a property tax assessed against lenders, like Hudson Valley, for possessing or owning the mortgage as a security interest," said the state.

The state argued that federal credit unions, including Hudson Valley, are not entitled to constitutional tax immunity as virtual arms of the U.S. government. It argued that Congress "expressly defined federal credit unions' tax exemptions" in the FCU Act and that denying federal credit unions the same tax immunity as government agencies lending government funds "is not unconstitutionally discriminatory."

"Hudson Valley is not entitled to constitutional tax immunity as an instrumentality of the U.S. government. Federal credit unions are privately owned and managed entities. They are not agencies of the U.S., and do not use public funds to make member loans. Moreover, because Congress expressly stated and limited the tax exemptions applicable to federal credit unions in the FCU Act, further constitutional analysis is unnecessary," said the state.

Hudson Valley, a $3.2 billion asset credit union based in Poughkeepsie, N.Y., has appealed two lower courts' decisions that denied its challenge to the MRT. It had filed suit on May 12, 2009, in the New York Supreme Court, a lower trial court, against the New York State Department of Taxation and Finance.

The lower court, in dismissing the case, said the MRT was a tax on the "privilege" of filing the mortgage under state law.  The case then went to the Appellate Division, which upheld the lower court ruling. The credit union appealed and the New York Court of Appeal, the state's highest court, agreed on Oct. 18, 2011 to hear the appeal.

The credit union maintains that the FCU Act exempts federally chartered credit unions from the state tax, which it argues is not considered a "privilege tax" under federal law. Instead, credit unions' federal tax exemption and applicable U.S. Supreme Court rulings should control in the issue, it said.

Hudson Valley's lawsuit has been supported in various amicus briefs from the Department of Justice, Federal Housing Finance Agency, the Credit Union Association of New York, the Credit Union National Association and the National Association of Federal Credit Unions.

The Department of Justice's amicus brief said the lower courts' interpretation of the FCU Act "is inconsistent with the statute's plain language" exempting federal credit unions from all taxes except real property taxes and tangible personal property taxes.

"The lower courts misinterpreted Section 122 of the FCUA Act," said the department, adding the act "expressly immunizes federal credit unions from all state taxes, with the limited exception of real property taxes and tangible personal property taxes." It also pointed out, "The United States has an interest in the proper interpretation of the FCUA and in preserving the tax exemptions afforded federal credit unions by Congress."

"Under the clear terms of the FCUA, because the MRT is not a real property or tangible personal property tax--the only two taxes permitted under the FCUA--it cannot be levied against federal credit unions such as Hudson Valley," said the Justice Department. It pointed out that "even if the FCUA exempts federal credit unions from only certain categories of taxes, as the Appellate Division erroneously concluded, federal credit unions are still exempt from paying the MRT because the MRT can be characterized as a tax on a federal credit union and its property, two of the categories prohibited by the FCUA under the Appellate Division's construction of the statute."

Because the U.S. Supreme Court "has characterized mortgage recording taxes similar to the MRT as a tax on the mortgage, the MRT can be construed as an exempted tax on intangible personal property. The MRT is also a tax on a federal credit union itself when applied to mortgages issued by the federal credit union, and thus is exempted…," said the document.

New York's MRT requires a tax of 50 cents for each $100 of debt secured by a mortgage.  Most states charge only administrative fees for recording a mortgage.

Virtual CU model near 1B in assets

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SPRING TOWNSHIP, Pa. (3/21/12)--Utilities Employees CU in Reading, Pa., a "virtual" credit union set to surpass $1 billion in assets soon, was featured in an article Sunday in the Reading Eagle.

The credit union's 45,000 members are scattered nationwide and do most of their depositing, withdrawing, and borrowing online or over the phone.

"We call our model a 'virtual' credit union model," Glenn Yeager, Utilities Employees president/CEO, told the newspaper. "Most credit unions and banks still promote the branch model."

The credit union had $504 million in assets in 2006. That total this year was $991,658,473 on Sept. 30, and Yeager told the paper he believes the $1 billion mark will be surpassed by the end of March. Meanwhile, employment at the credit union has risen to more than 90 from 74 in 2006.

"The typical billion-dollar credit union would have 250 to 300 employees, and we have 90," Yeager said. "You can see where the efficiencies come in."

Ed Williams, president/CEO of Discovery FCU, Wyomissing, Pa., and Diane Powell, director of communications for the Pennsylvania Credit Union Association, also provided insight on the operation of credit unions to the paper.

To read the article, use the link.

Texas newspaper CU helps members through recession

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LONGVIEW, Texas (3/21/12)--For Telco Plus CU in Longview, Texas, 2011 was about helping its members get through the recession, according to a local newspaper article.

"The recession affected us because it affected our members," Betty Deweese, Telco Plus president/CEO, told Longview's News-Journal newspaper (LoneStar Leaguer March 20).

Many people in the community lost their jobs or were forced to take a pay cut, as the recession ran it course, making it tougher for residents to fulfill their financial obligations and maintain good credit scores.

"We spent a lot of our time working with these members to help improve their credit and educate them about what makes their credit, so they know it gives them a better interest rate to take care of their credit," Deweese told the paper. "We also did a lot of home equity loans to help people consolidate higher interest rate credit card balances."

Telco Plus channeled substantial effort into educating the community about credit unions, Deweese told the paper.

"We are trying to get more staff involved in the community, so people know we are here and we are available, and more importantly, that we want to help," she added.

In addition to increased marketing, the credit union has also tried to get more involved in the Longview and Tyler communities, Deweese told the paper. Those efforts included attending Chamber of Commerce functions, getting involved in the Better Business Bureau and charitable organizations, and continuing its involvement with March of Dimes.

Telco Plus also hosted a "Reality Fair" at Pine Tree Junior High School to teach students about real-world finances.

Georgias Mercer elected CUNA chairman

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WASHINGTON (3/21/12)--Michael J. "Mike" Mercer, president/CEO of the Georgia Credit Union Affiliates (GCUA), has been elected chairman of the board of the Credit Union National Association (CUNA).

Mercer was elected chairman during the board's regular meeting Monday in Washington, D.C. The meeting was held in conjunction with CUNA's Governmental Affairs Conference. He succeeds Harriet May, former president/CEO of Government Employees CU in El Paso, Texas. May is retiring from the CUNA Board after serving for 20 months as CUNA chairman. Mercer was elected to a one-year term.

Following his election, Mercer told the CUNA Board that, in his view, the role of the association is to advance the successful use of cooperative consumer finance. "To the extent that we succeed, it will be helpful to every credit union in the country," Mercer said.

Bill Cheney, CUNA president/CEO, said he looks forward to working with Mercer in support of CUNA's goals in advocacy and in supporting the credit union movement. "His leadership skills are unmatched and he has broad insight into the needs of credit unions," Cheney added.

Mercer is in his fifth decade working for and with credit unions; he has been president of GCUA since 1985. In that capacity, he is responsible for the state trade association and several other state-level credit union support organizations.

Also elected officers of CUNA for one-year terms were:

  • Vice chairman--Patricia Wesenberg, president/CEO, Central City CU (formerly Point Plus CU), Marshfield, Wis.;
  • Secretary--Dennis Pierce, president/CEO, CommunityAmerica CU, Lenexa, Kan.;
  • Treasurer--Susan M. Streifel, president/CEO, Woodstone CU, Federal Way, Wash.
  • At-large member--Rod Staatz, president/CEO, State Employees CU, Linthicum, Md.
Terms for all began Monday.

HarborOne board meeting today on converting to bank

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BROCKTON, Mass. (3/21/12)--The board of HarborOne CU, Brockton, Mass., is scheduled to meet today to consider the credit union's proposal to convert to a savings bank.

Comments from members about the proposal to become a Massachusetts-chartered mutual cooperative bank were due last week. It is not known how many comments the credit union received.

The $1.9 billion asset HarborOne has said that converting to a bank would provide it with more flexibility to expand its customer base; increase lending authority, especially in business lending; and provide access to additional capital such as through sale of stock, which isn't available to credit unions.

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

If the board adopts a conversion plan, the credit union would send to regulators for review  materials to be sent to members about the conversion plans.  The review process could take months. After a review, a conversion proposal would be submitted to the membership for a vote after a notice period of at least 90 days.

Wegner Awards fete Dorety Eckhardt Invest in America

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National Credit Union Foundation chairman Gary Oakland and Vice Chairman Laida Garcia,  present Bill Eckhardt (center), president/CEO, Alaska USA FCU, Anchorage, Alaska, with the Wegner Award for Lifetime Achievement.
WASHINGTON (3/21/12)--The National Credit Union Foundation (NCUF) presented three Herb Wegner Memorial Awards at its annual dinner Monday night.  A special Anchor Award was also awarded to Bob Schumacher, the night's emcee and former CEO of MountainCrest CU, Arlington, Wash.

More than 900 credit union leaders and supporters attended the NCUF Dinner Presenting the Herb Wegner Memorial Awards, held in conjunction with the Credit Union National Association (CUNA) Governmental Affairs Conference (GAC) in Washington, D.C.

The awards ceremony celebrated 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.
"Alaska USA's success is the result of a long-standing and strong commitment to member service, as well as dedication and hard work on the part of the officials, executives and every employee, past and present," said Eckhardt. "Accordingly, I accept the Lifetime Achievement Award on behalf of that entire Alaska USA team."

Gary Oakland, right, chairman, National Credit Union Foundation (NCUF), and Laida Garcia, NCUF vice chairman, present Tom Dorety, president/CEO, Suncoast Schools FCU, Tampa, Fla., with the Wegner Award for Lifetime Achievement. (Photos provided by the National Credit Foundation)
In accepting his award, Dorety thanked many and noted: "Our board at Suncoast has shown a great deal of foresight and courage over the past four years in making decisions in the best long-term interests of our members and not focusing solely on short-term results or specific ratios that others have suggested. I am proud that, when dealing with the recent financial crisis, Suncoast followed the words of Horton the Elephant: 'I meant what I said and I said what I meant, an elephant's faithful 100%.'"

The Anchor Award, presented from time to time at the discretion of NCUF's board of directors, goes to an individual or organization that the board believes has demonstrated the foundation's mission of making financial freedom achievable through credit unions.

At this year's dinner, Schumacher was surprised with the award by NCUF Board Chairman Gary Oakland, who cited Schumacher's contributions to the credit union industry and NCUF, and his longtime support of programs such as Biz Kid$ and the Credit Union Development Education program. This also was Schumacher's last year as emcee of NCUF's Wegner Awards dinner.

"Tonight represents my 15th Wegner Awards program as your emcee and host," said Schumacher at the end of the dinner. "As some of you know, it has always been the 'best night of my credit union year' and I have had the best seat in the house."

Invest in America is presented with the Wegner Award for Outstanding Program. Pictured from left, are: Laida Garcia, vice chairman, National Credit Union Foundation; Donald Johnson, vice president of U.S. sales operations at General Motors; Dan Hesse, CEO of Sprint; Dave Adams, president/CEO of the Michigan Credit Union League; and Gary Oakland, chair, National Credit Union Foundation.
He thanked NCUF and those in the audience "because, without you, there would be no Wegner Awards to share," he added. You see, it is from within you, this body, that we draw our honorees, our credit union Wegner heroes.  So I leave you with my father's words, 'let's all make sure that we take good care of each other.'"

Invest in America is a credit union growth and loyalty program that offers members discounts on consumer purchases. It was started in 2008 by CUcorp, a wholly-owned subsidiary of the Michigan Credit Union League. CUcorp is now CU Solutions Group, a national marketing company that manages the program.

Through the program, credit unions banded together to promote and support credit unions products and services and those offered by participating American-based companies, such as General Motors or Sprint. Credit union members were given discounts to the companies, which in turn drove membership growth and loyalty.

Invest in America has since grown into an enhancement program helping credit unions to add vehicle loans, increase debit/credit card transactions/balances and provide non-interest income opportunities.

This year's winners will join an elite group of 47 individuals and 22 organizations whose efforts during the past 24 years have earned them the recognition of Herb Wegner Memorial Awards.

Federation appoints Pamela Owens as interim CEO

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WASHINGTON (3/21/12)--The National Federation of Community Development Credit Unions has appointed its vice president of programs, Pamela Owens, as interim CEO, effective May 4 when CEO Clifford Rosenthal leaves after more than 30 years with the federation.

At a press conference Tuesday during the Credit Union National Association's 2012 Governmental Affairs Conference in Washington D.C., Lynda Milton, federation board chairman and CEO of Team Financial FCU, Houston, Texas, noted Rosenthal's accomplishments and outlined the next steps for a transition to new leadership.

On May 7, Rosenthal will become assistant director of the Office of Financial Empowerment for the Consumer Financial Protection Bureau. Milton noted Rosenthal's accomplishments, including:

  • Quadrupling the federation's membership;
  • Pioneering the concept for the federal Community Development Financial Institutions (CDFI) Fund;
  • Achieving regulatory recognition for supplemental capital;
  • Developing programs to reach the underserved population through African-American faith-based credit unions, credit unions serving Latino membership and forging ties with the disability community; and
  • Bringing the federation to a sound, sustainable financial footing.
The federation's board met last weekend and ratified Owens' interim appointment, Milton said. Owens has worked with the federation since 1998, developing and managing the CDCU  Institute, a  training program for officials of community development credit unions (CDCU) and small credit unions. She also manages the federation's program to enhance the financial stability of older adults, programs to access financial services and employment for people with disabilities and more.

The federation will formally open a national search for a permanent president/CEO on April 1, with the assistance of TransitionGuides, a firm that specializes in non-profit executive transitions and sustainability planning, said Milton. The federation has worked with TransitionGudies before on its succession planning and succession planning for CDCUs.

"We anticipate the search process will be conducted throughout the spring and early summer. Our target for bringing on a successor is, tentatively, Oct. 1," said Milton.

CU System briefs (03/20/2012)

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  • AUSTIN, Texas (3/21/12)--Dan Mica, former president/CEO of the Credit Union National Association (CUNA),  has become an advisory board director of BuzzBanking, developer of a financial services platform that combines social media banking with a rewards program. BuzzBanking, powered by fisoc Inc., is a CUNA Strategic Services (CSS)  provider.  Mica is currently president of The DMA Group, a consulting firm working with financial services. CSS and BuzzBanking have teamed for a six-month pilot program for credit unions …
  • HARRISBURG, Pa. (3/21/12)--Pennsylvania's 44th student-run credit union branch celebrated its grand opening on Friday at William Tennett High School in Warminster. The student credit union was opened as part of Trevose-based TruMark Financial CU, according to the Pennsylvania Credit Union Association (Life is a Highway March 20).  Students who work at the credit union must undergo 40 hours of teller training during the summer and work in a TruMark Financial branch. The student branch is an opportunity to expand the credit union's financial education efforts within the school. It is the second student-operated  branch for the $1.4 billion asset credit union. From left:  Richard Stipa, CEO of TruMark Financial; Glenn Moyer, Pennsylvania secretary of banking; Hugh Bray, TruMark Financial board president; and Joe Wambach, executive director, Pennsylvania Credit Union Foundation.  (Photo provided by the Pennsylvania Credit Union Association) …
  • HARRISBURG, Pa. (3/21/12)--Sean Jelen, CEO of Tobyhanna FCU, Scranton, Pa., has been appointed to the board of the Pennsylvania Credit Union Service Centers Inc. (PaCUSC), announced the Pennsylvania Credit Union Association (Life is a Highway March 20). Jelen will fill out the unexpired term of Jim Kanaley, retired CEO of Tobyhanna. That term will expire in 2014 …
  • AMES, Iowa (3/21/12)--Steven E. Lunning, a member of the board of directors at Ames, Iowa-based Ace Community CU for more than 20 years, died Friday. He was 61. He retired in January 2011 after nearly 25 years as payroll coordinator with Mary Greeley Medical Center  (The Des Moines Register March 20) …