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CU's micro-funding puts venture capital spin on biz loans

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KNOXVILLE, Tenn. (3/20/14)--A Tennessee-based credit union has put a new twist on member business loans, though to some reality television viewers the concept might already be familiar.

Similar to the show "Shark Tank," where entrepreneurs pitch their businesses to a panel of potential investors, UT FCU, Knoxville, Tenn., has rolled out a program where people looking to launch a startup can present their idea, and if a panel of non-credit union advisers sign off, the $214 million-asset credit union will offer up funding to start the business.

Labeled micro-funding, the loans are smaller in size and usually carry longer payback terms to allow the businesses time to shore up their outfits.

Small or not, the funding goes a long way in supporting entrepreneurs who wouldn't normally have the means to launch their operations, said Jonathan Patrick, UT FCU senior vice president.

"There's plenty of people right now who are working in day jobs that have got a great idea, but they don't know where to start and they certainly don't have the $30,000 sitting in the bank to put into this idea to launch it in the first place," Patrick told ABC affiliate WATE 6.

In a three-step process, applicants apply online where they describe their business and lay out all the pertinent financial details and full business plan. The final step is the in-person pitch.

Those who receive the thumbs up and are awarded loans also receive connections to local resources who help the business owners get their operations off the ground. 

The program has only been available for several weeks, however the credit union has received a number of applications, according to the WATE 6 report.

CU System briefs (03/20/2014)

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  • SALT LAKE CITY (3/20/14)--The Utah Credit Union Association held board and executive committee elections during its annual conference March 14-15 in Salt Lake City (Association Update March 19). Todd Adamson, president/CEO, Cyprus FCU, West Jordan, $630 million in assets, and Jim Hofeling, president/CEO, Jordan CU, Sandy, $227 million in assets, were re-elected to the board in the $100 million and over category. Re-elected in the at-large category was Dean Hirabayashi, president/CEO, National JACL CU, Salt Lake City, $31 million in assets. Board officers are: Chairman, Mike Milovich, president/CEO, Eastern Utah Community FCU, Price, $98 million in assets; vice chairman Adamson; and Randy Gally, president/CEO, Horizon Utah FCU, Farmington, $115 million in assets ...
     
  • HARRISBURG, Pa. (3/20/14)--Jack Barth, who retired from the Pennsylvania Credit Union Association as vice president of member services, died March 6 in Harrisburg, Pa. He was 83. Barth started with the league as a field representative in the Wilkes-Barre area, becoming director of field services in 1973 (Life is a Highway March 17). He retired in 1993 after 12 years as vice president of member services. Barth began his credit union career in 1957 as treasurer and manager of Reading (Pa.) Gas Employees FCU ...

Conn. league sees success with sales tax bill

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MERIDEN, Conn. (3/20/14)--The Credit Union League of Connecticut got what it was working toward, as a bill that would deliver sales and use tax exemptions to the state's credit unions moved closer to ratification this week.  

With a 13-4 vote, the state's Banks Committee voted out HB 5470. It was referred to the Finance, Revenue and Bonding Committee for its approval, the exact result the league was hoping for in order to streamline the bill's journey through the Legislature, according to a league press release.  

Connecticut league leaders have been at the forefront of the effort to drive this bill forward, but they also commend the support that's come from individual credit union leaders statewide.

The calls and emails from credit union advocates to state legislators on the committee, in addition to the support shown by the credit union CEOs who testified at the Bank Committee hearing, made an impact, the league emphasized.  

League leadership will continue to ask for support over the next week in contacting legislators on the Finance, Revenue and Bonding Committee as the bill heads in their direction. 

Share of CU auto loans 'significant,' Schenk tells Automotive News

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DETROIT (3/20/14)--The increased presence of credit unions in the auto lending market caught the eye of industry publication Automotive News.
 
Credit unions' 36% share of total auto loans outstanding is "pretty significant" considering credit unions collectively control only about 7% of consumer financial assets, said Mike Schenk, vice president of economics and statistics for the Credit Union National Association.
 
In Wednesday's Q-an-A piece with author Jim Henry, Schenk noted better relationships with dealers and a larger membership base helped drive the increase in 2013.
 
However, the "third leg of the stool" is the democratically controlled structure of credit unions. "The deal the average consumer can get would be substantially better than they would get at commercial banks," Schenk noted.
 
In 2013, new-auto loans were the fastest-growing segment for credit unions, increasing 13% from a year prior. Credit unions have about $72 billion in loans outstanding for new autos. The used-auto portfolio had about $128 billion, a 10% increase from 2012.

Nearly 200 turn out for Minn. CU Day at the Capitol

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ST. PAUL, Minn. (3/20/14)--A contingent of Minnesota credit union leaders, 200 strong, descended upon St. Paul last week for the Minnesota Credit Union Network's 2014 Credit Union Day at the Capitol event.
Minnesota Capitol reporters detail legislative stories they plan to cover this year at the Minnesota Credit Union Network's 2014 Credit Union Day at the Capitol event, held last week. (Minnesota Credit Union Network photo)

The day serves as an opportunity for credit union leaders and advocates to meet with lawmakers and attend educational sessions focused on the industry.

"Credit Union Day at the Capitol is a great opportunity for us to share our stories directly with elected officials," said Mara Humphrey, MCUN vice president of governmental affairs. "This event allows us to show them how credit unions directly benefit their constituents and all Minnesotans."

Minnesota Speaker of the House Paul Thissen (D-Minneapolis) and House Minority Leader Kurt Daudt (R-Crown) headlined the event, each speaking about their priorities for the upcoming legislative session.

Education sessions highlighted grassroots advocacy for credit unions and pertinent 2014 legislative activity. "The Crew"--a networking group focused on credit union employees age 35 and younger--sat in with Rep. Joe Radinovich (D-Crosby) to learn about politics in general and the motivations people have to run for public office.

Radinovich also spoke about the efforts of credit unions, citing that they were "local, community institutions that are trusted."

Attendees heard from a panel of Capitol reporters as well. Each offered insight about issues they were following in the Minnesota Legislature and each spoke to connections they've had with credit unions.

Finally, advocates headed to the Capitol to meet with local legislators either to vocalize the benefits of credit unions in local communities or to relay the industry's opposition to a proposed bill that would require mandatory mediation in foreclosure proceedings.

Council honors marketing, biz professionals

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MADISON, Wis. (3/20/14)--During its annual conference last week, the CUNA Marketing and Business Development Council Conference honored three credit union professionals for their accomplishments.
 
Kristen Mashburn, vice president of marketing, Listerhill CU, $628 million in assets, was named Marketing Professional of the Year. Mashburn's creative work and business strategy helped the Muscle Shoals, Ala.-based credit union increase its assets by 60% and double its brand recognition compared with peer financial institutions. This year, Mashburn and her team won three best in category awards and 11 Diamond Awards from the CUNA Marketing and Business Development Council.
 
The Business Development Professional of the Year award went to Josh Allison, relationship development manager, Horizon CU, Spokane Valley, Wash. Allison's achievements with the $584 million-asset credit union include execution of school partner and select employee group engagement strategies, financial literacy, and weaving the credit union philosophy into those programs.
 
Amy McGraw, vice president of marketing, Tropical Financial CU, Miramar, Fla., $537 million in assets, was honored with the Volunteer of the Year award. The award recognizes the work done on behalf of the CUNA Marketing and Business Development Council by its volunteers. McGraw serves on two committees, volunteers to facilitate sessions and contributes to the council's social media channels.
 
Winners will be featured in an upcoming issue of Credit Union Magazine.

Ind. CUs step up to provide 1,345 pairs of shoes

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INDIANAPOLIS and MARION, Ind. (3/20/14)--Nearly 1,000 kids in the Indianapolis area are walking around today in style thanks to the Indiana Credit Union League and the shoe drive it orchestrated leading up to the league's 2013 convention.
Click to view larger image Elaine Rinehart, Eli Lilly FCU, Indianapolis, was one of the volunteers who washed the feet of each recipient before they got their new shoes. (Indiana Credit Union League photo)

In all, the equivalent of 1,345 pairs of shoes were donated to Samaritan's Feet, an organization that works to distribute shoes to those in need, as a result of the shoe collections and fundraising.

"Indiana credit unions have partnered with Samaritan's Feet since 2010 when Samaritan's Feet Founder Manny Ohonme spoke at a league event," said league President John McKenzie. "Since that time, Indiana credit unions have helped provide more than 7,700 pairs of shoes to those individuals who need them the most."

With the help of Grant County Boys and Girls Club, about 45 volunteers from Marion-based credit unions Afena FCU, $57 million in assets; Fortress FCU, $15 million in assets; and Via CU, $298 million in assets, handed out new shoes and socks over a weekend in January.

A second shoe distribution took place March 8 at the Shepherd Community Center on the east side of Indianapolis where 360 pairs of shoes were distributed. Employees of Indianapolis-based credit unions Eli Lilly FCU, $1 billion in assets; Financial Center FCU, $496 million in assets; Indiana Members FCU, $1.4 billion in assets; and Via CU volunteered at the event.

The league again will collect shoes for Samaritan's Feet leading up to the 2014 convention in October.