Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

CU System Archive

CU System

CU System Briefs (03/21/2013)

 Permanent link
  • TOPEKA, Kan. (3/21/13)--Deborah Bomia, a former employee of Enterprise (Kan.) CU, has been sentenced by a U.S. District Court in Topeka to two years of probation for embezzling $85,000 from the credit union between April 2005 and August 2011. Bomia also was ordered to pay that amount in restitution to the credit union. She pleaded guilty to kiting checks between accounts in her name at the credit union to create fictitious balances (Associated Press Newswires March 20) …
  • SAN FRANCISCO (3/21/13)--San Francisco-based J.R. Bruno & Associates, a consulting firm to Small Business Administration and member business lenders, has opened an office in Colorado. JRB Associate Vern Hansen will head the Colorado operations, serving credit unions in that state as well as Arizona, Wyoming, Utah and Nevada.  Hansen has 39 years of financial services and commercial lending experience. He has served in executive positions including president and executive vice president-chief lending officer at financial institutions of all sizes …
  • HARRISBURG, Pa. (3/21/13)--Bill Dooner, former field representative and consultant for the Pennsylvania Credit Union Association, died Monday. He was 83.  Born in Ireland, he came to America in 1948 and joined his first credit union--K. of C. Upper Darby FCU--in 1955 in Philadelphia, said PCUA  (Life is a Highway March 20).  He joined PCUA as a field representative in 1966 and served credit unions in southeastern Pennsylvania for 28 years, until retiring as a consultant in 1994.  He is credited with organizing 45 credit unions. He is survived by seven children and two great-grandchildren …

Court Tentatively Dismisses Some NCUA Claims Vs Goldman Sachs

 Permanent link
LOS ANGELES, Calif.  (3/21/13)--A federal judge in Los Angeles has tentatively dismissed several claims in the lawsuit filed by the National Credit Union Administration (NCUA) against Wall Street bank Goldman Sachs about residential mortgage-backed securities (RMBS) sold to several corporate credit unions before the financial crisis.

U.S. District Judge George Wu, in the tentative ruling that became available Tuesday, dismissed with prejudice  NCUA's claims about seven of the eight securities certificates at issue in the suit, saying NCUA's complaint was untimely unless it could prove the tranches were certified in covering the purchase.

Goldman Sachs had argued NCUA's claims were either barred by the applicable statute of repose--meaning the lawsuit was filed too late--or did not plead sufficient information to tell if the statute rule of tolling (extending the statute of limitations) would apply.

NCUA's complaint argued that the originators of the loans backing the RMBS vehicles engaged in a "systematic disregard or abandonment of underwriting standards and guidelines," and the court concluded that these allegations against three of the originators are sufficient.

"Although Goldman would like the court to view many of these allegations not as systematic disregard of underwriting guidelines, but instead as blind adherence to underwriting guidelines involving loan products that, by their very nature, were risky products, that is not a conclusion that the court is prepared to reach on the basis of the NCUA's pleadings,"  Wu wrote.

In the eighth certificate sold and at issue in the case, Wu said the court believes, based on arguments presented so far, that "NCUA had at least a "bona fide dispute" with respect to the standing of the representative plaintiffs in earlier cases covering the certificate. He also reiterated earlier rulings in which he said he expected "something more" than post-origination performance statistics to demonstrate systemic abandonment of underwriting guidelines.

Wu denied Goldman Sachs' motion to strike "immaterial information" from NCUA's complaint, which Goldman said relied on allegations other parties made in other court actions. His ruling cited a case that indicated "where material 'relates directly to the plaintiff's underlying claim for relief' it cannot be considered 'immaterial."

The tentative ruling comes nearly a year after Wu gave the go-ahead for the case to proceed, saying NCUA had met the requirements on an extended "tolling" statute of limitations agreement before it filed its lawsuit over the RMBS sold to U.S. Central Corporate FCU and Western Corporate FCU.

It also comes a week after the U.S. Supreme Court refused to hear Goldman Sachs' appeal of a lower court decision in a similar RMBS case, a class action lawsuit by pension funds.

NCUA, as conservator of five corporate credit unions that collapsed in 2009 from RMBS investments, has also sued RBS Secrutieis, Wachovia Capital Markets LLOC and Wachovia Mortgage Loan , JP Morgan Chase, UBS Securities, Barclay's Capital and Credit Suisse Securities and more.   The agency uses similar arguments in several of the cases.

CU Marks 10 Years Of 100% Employee Community Support

 Permanent link
CAPITOLA, Calif. (3/21/13)--In 1992, Capitola, Calif.-based Fay FCU set an ambitious goal for its annual community support initiatives: 100% employee participation. Employees accepted the challenge and during the next 12 months far exceeded their individual goals in volunteering. Ten years later, they are still going strong.

Participating at a recent fundraiser are from left, Bay FCU employees Laura Owen, Angelynn Dang, Chris Lewis, Cameron Haste, Alicia Flores and Michelle Haddix. (Photo provided by Bay FCU)
For 10 consecutive years, 100% of the $678 million asset credit union's employees have participated in volunteering and fundraising opportunities for local schools and nonprofit organizations.

"On the surface, it is remarkable that we've been able to do this," said President/CEO Carrie Birkhofer.  "However, upon quick reflection, it is not really surprising at all. Bay Federal employees believe in our community. They understand that they can make a real difference in our community by just showing up and getting involved. Volunteerism is a core value that employees readily embrace."

Volunteer projects are all employee-driven and coordinated by an all-employee steering committee. "Employees choose the organizations and events they want to support, organize volunteer teams, and bring their families and friends to help out," said Birkhofer.

They earn a credit for volunteering and receive recognition pins signifying the number of credits earned in the previous year. "It's not uncommon for employees to earn five to 10 credits or more in a year," said Birkhofer. "It's become a competition for some, but most people just enjoy knowing that their hard work is appreciated. And for most people, the reward of giving is often equal to the value provided."

"Bay Federal members have come to understand that service doesn't stop at our front doors," she added.

In 2010, Bay Federal became the first recipient of the Governor and First Lady's Medal of Service Award as California's Small Business Volunteer Program of the Year. It has received "Organization of the Year" awards from five chambers of commerce and the United Way of Santa Cruz County. It also repeatedly is voted "Best Financial Institution" in annual reader polls for the Good Times, Press Banner and Santa Cruz Weekly regional newspapers.

Texas League, Real Solutions Join On Elder Fin Abuse Project

 Permanent link
FARMERS BRANCH, Texas, and MADISON, Wis. (3/21/13)--The Texas Credit Union League and its REAL Solutions program have partnered to develop an initiative to promote awareness about elder financial abuse and exploitation in the financial services industry.

"Credit unions can play a critical role in helping to reduce elder financial abuse and exploitation," said Mike Delker, TCUL senior vice president of Credit Union Relations. "Frontline staff members are the first defense in identifying suspicious activity" (LoneStar Leaguer March 20).

Red flags regarding abuse may include unusual, suspicious or stepped-up activity by accountholders on their own or in conjunction with another person who could be coercing the accountholder to make transactions they normally would not make. Credit unions should watch for:

  • Transactions made outside a credit union, such as several ATM transactions the accountholder normally would visit inside the branch to make;
  • Unusual or accelerated debit card activity for an accountholder;
  • Closure of certificates of deposit without regard to penalties;
  • Frequent or large wire transfers, which might start small but grow in amounts as the scammer or abuser gains confidence;
  • Online banking activities: new online accounts with accelerated activity;
  • Lines of credit with accelerated activity or with the credit always maxed out;
  • Home-equity lines of credit with previous little activity and that are always maxed out;
  • New loan applications for purchases unusual for elders;
  • Stepped-up non-sufficient funds activity;
  • Several checks written on an account that usually has a few written, or many out-of-sequence check numbers;
  • Unusual changes in account beneficiaries;
  • New or unusual transactions via powers of attorneys;
  • Change of address for monthly statements but for the home address;
  • Change in marital status by widows/widowers, in combination with other red flags;
  • Unusual or suspicious automated clearing house transactions;
  • New co-signer on an account, in conjunction with other red flags; and
  • Banking by mobile phone, in conjunction with other red flags.

CUNA Mutual 2012 Net Income Increases For Fourth Year

 Permanent link
MADISON, Wis. (3/21/13)--Despite a slugging economy and weather-related losses, CUNA Mutual Group posted its fourth consecutive year of earnings growth during 2012.

CUNA Mutual  attributed the growth to strong operating results in three core credit union businesses. Consolidated generally accepted accounting principles(GAAP) operating revenue, net income and capital levels all increased over 2011. 

CUNA Mutual recorded $150 million of net income (GAAP), compared with $83 million in 2011.  Strong operating results, particularly in lending, direct-to-consumer and asset accumulation products, helped offset drought-related losses in the company's crop insurance business and weather-related losses in its auto and home businesses.  Solid investment performance also contributed heavily to higher net income in 2012, said the company. 

GAAP operating revenue grew by 3%. An improved lending environment, the company's focus on investing in and growing its consumer product lines, and strong immediate annuity sales were key factors driving the year's revenue growth, CUNA Mutual said.   

"Strong operating results in our core credit union businesses, prudent expense management and a $40 million reinvestment in a number of those businesses all contributed to very favorable results," said Alastair Shore, executive vice president and chief financial officer.

CUNA Mutual Group's total cash and investments grew to $11.1 billion in 2012, an increase of $1.2 billion over 2011.  The company's investment portfolio is well-diversified with an average credit quality of "A." 

The company continued to build its financial strength.  Statutory total adjusted capital of CMFG Life Insurance Co., CUNA Mutual's lead life insurance company, grew to $1.6 billion in 2012, up $133 million from 2011.  The company's consolidated GAAP surplus ended the year at $2.5 billion, a 17% increase.  A.M. Best recently affirmed its key insurance companies' ratings at "A" (Excellent), the third highest of 16 financial strength categories, with a stable outlook.

The company also continued its strong advocacy for credit unions in 2012, contributing $39 million to support credit union leagues and industry efforts, compared with $35 million in 2011.  It also reinvested more than $40 million in a number of businesses, including consumer, asset management, crop insurance and technology. Benefits paid to credit unions in 2012 totaled $964 million, up slightly from 2011.

NPR, Kiplinger Note CUs' Value

 Permanent link
MADISON, Wis. (3/21/13)--Credit unions' value was noted in brief pieces this week by National Public Radio, Kiplinger and Lifehacker.

In a National Public Radio, a two-minute Marketplace "Money Matters" segment Wednesday, Paddy Hirsch, Marketplace senior producer, personal finance, answered questions about why people would chose a credit union over a bank.

"You might choose a credit union because you like free checking, because 72% of credit unions offer it, whereas banks tend not to these days," Hirsch said. Credit unions also offer better rates on loans and better interest rates  on savings accounts, he added.

People are moving toward credit unions since the financial crisis, and credit unions "have stepped up their game online," with 85% of credit union online users saying they like their services, compared with 66% for bank online users, Hirsch said.    

In a question-and-answer column asking whether credit unions have deposit insurance, Kiplinger.com responded Tuesday in a segment: "Deposits in most credit unions are covered by the National Credit Union Share Insurance Fund (NCUSIF), rather than by the Federal Deposit Insurance Corporation. The coverage is similar, and the limits are the same as for the FDIC: The fund covers up to $250,000 for all of your individual accounts combined at each credit union, up to $250,000 for each person's share of their joint accounts at each credit union, and up to $250,000 for all of their retirement accounts, such as IRAs, per credit union."

For people looking for auto loans, lifehacker.com, in a brief article Wednesday, advised consumers to check out credit unions.

"You may already know to check with your credit union for financing on that new car, since their interest rates are likely lower than anything a bank or (heaven forbid) an auto dealer will offer you," lifehacker said. "However, credit unions also offer car buying and discount programs through selected auto dealerships that can cut hundreds--sometimes thousands--off of the sticker price of the car you want."

To hear or view the segments and articles, use the links.

League Poll: Texans Won't Tap Savings For Big Purchases

 Permanent link
FARMERS BRANCH, Texas (3/21/13)--Demand for affordable loans likely will rise because most Texans won't be tapping their savings accounts to facilitate big purchases, according to a poll conducted by the Texas Credit Union League.

The poll indicated 13.5% of Texans surveyed intend to buy a car this year, and 12.2% plan to purchase a house. Roughly 65.8% of Texans don't plan to purchase a car this year, and another 20% are undecided. Also, 87.8% said they won't buy a home (LoneStar Leaguer March 20).

Many consumers make the mistake of focusing exclusively on the interest rate of a loan, according to Courtney Moran, executive director of the Texas Credit Union Foundation.

"People need to consider the overall costs of the loan," she said. "Many times there is great variance in the cost of ancillary products like gap insurance and extended warranties. And sometimes dealers will aggressively sell things that people don't necessarily need or want."

Homebuyers need to ask questions regarding closing costs, discount points, and what prepaid items are required--such as prepaid insurance, Moran added.

"Often individuals focus on the monthly payment," she said. "Even though a monthly payment may be affordable, it's important to consider overall costs. Fixating on monthly payments is another common mistake, which results in paying much more over the life of the loan."

By paying their bills on time and checking their credit report often, people can protect their credit rating, Moran told the league. Zero-percent financing isn't always the best deal, she warned.

"If you can choose a rebate instead of the 0% financing, you may do better to forego the 0% financing and choose a low-interest loan elsewhere," added Moran. "It's simple arithmetic and will only take a few minutes to calculate which option is really the best deal."

Biz Kid$ Piggy Hunt Teaches Financial Literacy

 Permanent link
Josh Allison, relationship development manager at Horizon CU, Spokane, Wash., developed the Biz Kid$ Piggy Hunt, which incorporates materials from the Biz Kids$ financial literacy initiative to engage children and adults. Here, a group of teachers work on the hunt.
MADISON, Wis. (3/21/13)--Biz Kid$, a financial literacy initiative that teaches kids about money and business, is now part of a treasure hunt for financial literacy. The Biz Kid$ Piggy Hunt is a collaboration of Biz Kid$ and Horizon CU of Spokane, Wash.

Sarah Rusnak, a single mother who won the $500 prize in a Piggy Hunt sponsored by Horizon CU, Spokane, Wash., displays her winning check after finding a pig hidden in a coffee shop. (Photos provided National Credit Union Foundation.) In the case of Horizon CU, the treasure is a $500 prize, with $250 going to the winner and $250 donated to the charity of the student's choice. Allison and Horizon CU have launched the program at several area middle schools, and the initiative has been expanded to include teachers and parents.

The creators of Biz Kid$ thought so much of Allison's idea that they branded it made it available credit unions to use nationwide, said NCUF.

The game has attracted media attention. The Bonner County Daily Bee and the Columbia Basin Herald also feature articles on the Biz Kid$ Piggy Hunt. The Anthem, the newsletter of the Northwest Credit Union Association, also featured the hunt.

Biz Kid$ includes an award-wining TV series, free classroom curriculum, outreach activities, a website and a monthly online newsletter targeting children 9-16 years old.

A coalition of credit unions and credit union organizations underwrites the program, raising $13.2 million during the past six years to support its production, website and curriculum. The NCUF oversees fundraising, outreach and administration.

Free Checking? It's CUs Hands Down--More Media Coverage

 Permanent link
MADISON, Wis. (3/21/13)--More media outlets are reporting on the Bankrate.com survey released earlier this week. The survey indicated credit unions are consumers' best chance--hands down--of finding a free checking account.

News Now reported on the survey Tuesday in an article, "CNNMoney: CU Is 'Best Bet' For Free Checking."

"You want free checking account with no strings attached? You're not likely to find it at a bank," said ConsumerAffairs in a Tuesday article. "According to Bankrate.com's  2013 Credit Union  Checking Survey, 72% of America's 50 largest credit unions offer them, compared with 39% of banks."

Commenting on the same survey, The New York Daily News Monday focused on the statistic that free checking at banks is a "dwindling perk"--down to 39% now from 65% in 2010.  Meanwhile, 96% of credit unions surveyed by Bankrate offer free checking accounts or accounts that can become free if members agree to use services such as direct deposit or e-statements offered at the credit union.

"Not much is free these days--but there's a good chance you will find free checking if you go to a credit union," the Daily News said.  The newspaper added: "How can credit unions afford to hand you this perk, even as banks' fees are on the rise? Banks are looking to make up for billions of dollars in annual lost revenue as a result of regulations imposed in recent years. Because credit unions are not-for-profit institutions, they are not driven by improving their own profits and therefore can often offer their [members] better terms."

In Tuesday articles about the Bankrate survey, the Deseret News and WWLP.com also noted that more credit unions than banks offer free checking.

To read the articles, use the links.