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Local newspapers include CUs weighing in on economy

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MADISON, Wis. (3/25/08)--Local newspapers are seeing credit unions as a source for comments on economic news, especially the credit crunch. A number of newspapers--both nationwide and local--have reported credit unions weighing in on the economy. They also have featured the programs credit unions offer to stave off foreclosures. Here are three examples. In Newark, Ohio, an article about the Federal Reserve's decision last week to cut the federal funds interest rate, featured Al Smith, president/CEO of Hopewell FCU, a $61 million asset credit union based in Heath, Ohio. Smaller commercial banks and credit unions will "survive fine" because they deal with people in their hometown, said Smith, who has been at Hopewell for 25 years and in the banking industry for 40 years. He told the Newark Advocate (March 19) that the subprime crisis is unprecedented--he had never seen such a financial situation, where mortgage companies were going out of business. In Sacramento, Calif., an article in the Sacramento Bee (March 21), discussed The Golden 1 CU's modest economic stimulus package for members caught in foreclosures. The $6.7 billion asset credit union has a $20 million fund to help members who lost their home to another lender within the past 18 months get back into their own home. The "mortgage repair loan" offers 30-year, fixed-rate mortgages to qualified members. Golden 1 CEO Teresa Halleck said the credit union had the funds to do this because it didn't engage in risky subprime loans. In Wisconsin, The Post-Crescent (March 16) surveyed 19 financial institutions--seven of them credit unions--about the events of 2007 and what's in store for 2008. Cheri VerVoot, executive vice president of Unison CU, a $135 million asset credit union in Kaukauna, told the newspaper that Unison has been insulated from the subprime mortgage fallout. The credit union is financially sound with a delinquency rate well below industry averages. "We don't engage in subprime lending, and [we] use conservative underwriting practices to protect our assets," she said. Fox Communities CU, Appleton, saw solid growth, to $645 million in assets, last year, Greg Hilbert, president/CEO, said. It has a strong mortgage program and has never been involved in subprime lending practices. FCCU promotes a first-time homebuyers program for qualified moderate incomers, with discounted rates and little or no money down. FCCU is also committed to financial education. Community First CU President/CEO Catherine Tierney told the newspaper that the Appleton-based credit union--the third-largest in the state with $816 million assets--had not experienced any delinquency or loss problems. It does not offer subprime loans. "We feel strongly that now is a wonderful time to invest in a home," she said, noting the credit union is dedicated to helping members embrace the dream of home ownership. Four other credit unions were also interviewed in the article.

CU System briefs (03/24/2008)

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* RANCHO CUCAMONGA, Calif. (3/25/08)--Several credit unions nationwide joined to help Community Trust CU, Modesto, Calif., open a branch in East Palo Alto. The credit union held its grand opening March 15. The community of 40,000 residents is mostly low-income and Latino, and is served by one small bank and payday lenders. Bellco CU, Greenwood Village, Colo.; Bethpage CU, Bethpage, N.Y.; NuUnion CU, Lansing, Mich.; University FCU, Austin, Texas and PSCU Financial Services, St. Petersburg, Fla., have contributed $100,000 each in interest-free certificates of deposit. Contributing credit unions in California include LBS FCU, Long Beach; Orange County CU, Santa Ana; KeyPoint CU, Santa Clara; Meriwest CU, San Jose; and Star One CU, Sunnyvale. At the grand opening are: Stu Fisher, vice president of business development and retail sales for Addison Avenue FCU, Palo Alto; Joe Duran, Community Trust CU CEO; John Davis, CEO of Stanford CU, Palo Alto; and Andy Hunter, CEO of Patelco FCU, San Francisco. Addison Avenue, Stanford and Patelco also assisted with plans for Community Trust CU. (Photo provided by the California Credit Union League) ... * ALBANY, N.Y. (3/25/08)--Irondequoit High School students in Rochester, N.Y., won the 2008 New York State LifeSmarts title March 20. LifeSmarts. . . the Ultimate Consumer Challenge is coordinated by the New York Credit Union Foundation. The challenge aims to teach high school students about money. From left are: Foundation Executive Director Diane LaVigna-Wixted; Jesse Leonardo; Samantha Jebbett; Steve Ross; Tyler Condello; Renee Roth, team captain; Dirck Van Deusen, senior vice president of corporate relations at Members United Corporate FCU; and Louis DiCesare, team coach. (Photo provided by the New York Credit Union Foundation) ... * THORNDALE, Pa. (3/25/08)--Citadel FCU received national recognition for its customer service, Citadel Class Service, at the 13th Annual Best Practices in Retail Financial Services Symposium March 9-11 in Ponte Vedra, Fla. Jeff March, Citadel president, presented “Strive for Fives--The Quest for World Class Service” about the creation of Citadel Class Service, its delivery, measurement and effect on the company. The symposium was attended by CEOs from financial institutions nationwide and Sheila Bair, Federal Deposit Insurance Corp. chairman ... * WINDSOR LOCKS, Conn. (3/25/08)--360 FCU, Windsor Locks, was named as one of the best places to work in Connecticut. The third annual program was created by the Hartford Business Journal, the Connecticut Better Business Bureau and Best Companies Group. Companies were evaluated by workplace policies, practices, philosophies, systems and demographics, and an employee survey. 360 FCU has $164 million in assets ... * BALTIMORE (3/25/08)--Charles L. Benton Jr., a longtime finance adviser to Maryland Gov. William Donald Schaefer, died in Baltimore Saturday. Benton, 91, was a board member of Baltimore's Municipal Employees CU. One of its branches has been named in his honor, according to the Maryland and District of Columbia Credit Union Association (FOCUS Newsletter March 24). Benton oversaw Baltimore's finances for 30 years as budget director and head of the city finance department. He became state budget chief in 1987 when Schaefer was elected governor. He is survived by two sons, a daughter, four grandchildren and four great-grandchildren (The Baltimore Sun March 23) … * NORTHVILLE TOWNSHIP, Mich. (3/25/08)--Norbert "Bing" Emond, chairman of Iron Mountain Kingsford Community FCU, died March 15 in Kingsford, Mich., reported the Michigan Credit Union League (Michigan Monitor March 24). He was 79. Emond served as a volunteer at the credit union for 47 years, 43 of them as chairman. In 1981, he was named Michigan Credit Union Foundation Credit Union Person of the Year for his community service. He and his wife, Lucille, owned and operated the Twin Pines Lumber Co. from 1963 until his retirement in 1988. In addition to his wife, survivors include, a daughter, two brothers and a sister …

CUs reach younger members through MyMoney on Facebook

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BROOKFIELD, Wis. (3/25/08)--Credit unions can reach a younger audience through a new online banking application on Facebook. Fiserv’s MyMoney, which was built on the Facebook platform and went live in early February, allows credit union members to manage finances from their Facebook profile. Users can search for credit unions online, check account balances, review transaction history and transfer money between accounts. Fifty credit unions have signed up for MyMoney. Fourteen currently use it, Fiserv said. “I love the appearance of it,” Dan Veasey, director of marketing at Piedmont CU, Danville, Va., told News Now. “It has the ease of use like the rest of Facebook.” Like most credit unions, Piedmont is looking to draw younger members. Piedmont is located in a rural area of modest incomes and has an average member age of 48. It recently launched online banking, which about 500 to 600 members of the total 6,500 use. Veasey recently surveyed members about Facebook, and 40% said they’d heard of the social network, while about 10% were either using it or live with someone who is. Christian Financial CU, Roseville, Mich., also deployed the application. It’s been “really good” so far, Lauren Vance, marketing manager, told News Now. The credit union has not begun promoting the application externally. “We’re in the process of training our employees on it right now,” Vance said. The credit union has 30 “fans” on its Facebook page so far. Because Christian Financial has Fiserv’s iSwitchkit, Facebook users can join the credit union through Facebook and begin managing their accounts, she added. Christian Financial plans to promote MyMoney through Facebook ads and would like to have 500 members on it within the first year. Members have responded positively to MyMoney because it’s easy to use. Some were concerned about security, but “once they’re on it, they feel comfortable,” Vance said. Veasey also noted that he spoke with a younger member about MyMoney who expressed concerns about security. Veasey pointed out the application has multi-layered security. MyMoney is convenient for people who already use Facebook because they can do their banking without having to visit an external site, Vance added. Fiserv created MyMoney to leverage the growing popularity of Facebook, with the goal of helping credit unions attract new members from younger generations. About 94% of the 18 to 24-year-old audience does not belong to a credit union, Fiserv said. “Many credit unions we’ve spoken to are looking for ways to attract younger members,” said Jay Slavin, senior vice president of Fiserv’s Galaxy Business Line. “We researched and recognized the popularity of Facebook with this demographic, and proactively created the MyMoney application to fulfill this need.” Along with leveraging the viral marketing capabilities of Facebook, credit unions can create their own pages on Facebook by adding their logo and information about the credit union, such as recent news, rates, services, events and other details. MyMoney uses multiple layers of security to ensure that only members can access their account. In addition to the standard privacy features offered by Facebook, MyMoney uses a 128-bit encryption and a built-in two-way security system to let members know they’re connected to their credit union, and to let the credit union know a legitimate member is accessing the account. MyMoney can be used by any financial institution, regardless of its core processing system, Fiserv said. “With Facebook’s increasing popularity, viral marketing opportunities, and enhanced security measures, we felt the MyMoney application was the perfect avenue to help our clients connect with this generation,” Slavin said.

CUNA Mutual HELOC wire fraud alerts helped cut losses

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MADISON, Wis. (3/25/08)--Two e-mail RISK Alerts and nearly 2,700 phone calls from CUNA Mutual staff to at-risk credit unions have helped significantly reduce a sophisticated fraud scheme aimed at individual members with high home equity lines of credit (HELOCs). From early January to March 1, credit unions reported to CUNA Mutual 43 incidences of losses or fraud attempts totaling $8.8 million, said Gary Pate, director of insurance compliance and risk management. “The good news is we haven’t had a reported claim from this scam since Feb. 6,” Pate said. Sierra Central CU, Yuba City, Calif., thwarted an attempt to divert $584,000 after a fax arrived in the credit union’s call center from a purported member. At about the same time, an individual called to check the transfer’s status. The call center supervisor instructed the call-taker to glean as much information as possible from the caller, according to Terry Garcia, vice president of audit and compliance at the $548 million asset credit union. “The alert from CUNA Mutual was what made her so cautious,” Garcia said. “This transfer request fit the description of what we’d been told to watch out for.” CUNA Mutual launched the alert campaign, a service under its Credit Union Bond program, shortly after several credit unions fell victim to the scam. The scam involved fax or e-mail requests for wire transfers from HELOCs in amounts of $100,000 or more. CUNA Mutual immediately issued e-mail alerts to its credit union bondholders. It also--due to the sophistication of the criminals and the success of their scheme--convened a special employee task force of 27 field risk managers and home-office staff who telephoned about 2,650 credit unions to underscore the potential danger. “Part of the scam’s strategy was to confound common fraud-prevention procedures, such as callbacks to verify members’ identity,” Pate said. “Those calls appeared to be going to members’ phone numbers, but in fact were forwarded to the phones of the fraudsters. The perpetrators also had personal member information that enabled them to answer additional challenge questions used to verify identity.” Besides helping fend off a fraud attempt, CUNA Mutual’s alerts prompted Sierra Central CU to amend its wire-transfer procedures. For example, “we no longer rely solely on callbacks to members for verification,” Garcia said. Although specific instances of this type of fraud have curtailed, the perpetrators have not been identified and arrested and undoubtedly will continue to attempt this type of fraud, Pate said. “Credit unions need to continue to remain vigilant and follow specific security procedures to prevent this type of fraud,” he said. The procedures include:
* Initiating a call-back verification to a secure telephone number before the funds transfer instruction is executed. * Consulting with a CUNA Mutual sales executive to better understand their policies and coverage. * Continuing to use RISK Alerts to get just-in-time information on scams and loss control.
Policyholders can view the RISK Alerts, which include specific loss prevention recommendations at and logging into the Protection Resource Center. Access to the Protection Resource Center and RISK Alerts require a UserID and Password. Those without a UserID and Password can go to New User Registration and choose "Credit Union Protection Resource Center" from the list of services. Those with a UserID and Password, can click "Edit my Services" to add Credit Union Protection Resource Center to their personalized services. Credit unions experiencing a loss can contact CUNA Mutual’s Credit Union Protection Response Center at 800-637-2676.

SECU Foundations teachers housing effort takes root

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RALEIGH, N.C. (3/25/08)--SECU Foundation held a groundbreaking ceremony March 10 to celebrate its second new affordable teacher housing project.
Taking part in the groundbreaking ceremony for a new teacher housing project, sponsored in part by the SECU Foundation are, from left: David Oaksmith, chairman, Dare County Board of Education; Lynda Wood, chairman, Dare Education Foundation Board of Directors; Ray White, Board of Directors member, Dare Education Foundation; Warren Judge, chairman, Dare County Board of Commissioners; Tom King, immediate past chairman, SECU Foundation board of directors; and Steve Conrad, member, SECU Foundation board of directors. (Photo provided by SECU Foundation)
The project, done with Dare County Schools and Dare Education Foundation, marked the beginning of the second project of its kind, with the first located in nearby Hertford County. Each housing initiative assists the local public school system with teacher recruitment and retention. Because living costs in Dare County are high compared to many neighboring counties, new teachers struggle to find affordable housing and are discouraged when pursuing teaching positions within the area, according to the SECU Foundation. After hearing about the success of the Herftord County Initiative, Dare Education Foundation approached its local SECU office to discuss the possibility of SECU Foundation assistance. The grant request was approved by the SECU Foundation Board in 2007. “New teachers struggle to find affordable residences because of the exceptionally high cost of living,” said Tom King, immediate past chairman of the SECU Foundation board of directors. “Each SECU Foundation-approved teacher housing initiative reaffirms SECU members’ desire to make a positive impact in the areas of housing and education in North Carolina.” The new 24-unit apartment complex is slated to be available for new teachers by Aug. 1. The complex will be located within walking distance of three Dare County public schools. SECU Foundation is supplying $2.25 million to the project through a 0% interest loan for design and construction of the unit. As the funds are repaid through rental income, the SECU Foundation will recycle the funds to build additional units in other counties throughout North Carolina. The event was held at the building site with about 100 guests, including various school representatives, the SECU Foundation Board of Directors, SECU Advisory Board members, and local officials.

Diamond Award recipients announced

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MADISON, Wis. (3/25/08)--The CUNA Marketing and Business Development Council’s Diamond Awards competition winners were recognized during the council’s 15th annual conference held March 16-19 in Nashville, Tenn. The Diamond Awards, representing credit union marketing and business development achievement, feature 35 categories, ranging from annual reports to youth marketing and financial education. Judges evaluated entries, based on strategy, design and production, creative concept, copy and communication, and results. Premier FCU, Boulder, Colo., was awarded “Competition’s Best”--the highest “Best of Show” award. Entered in the Complete Campaign category, “Banking Grown Up” was designed to brand the credit union and attract younger members through a TV ad campaign that drove traffic to the credit union’s website. The $282 million asset credit union exceeded its marketing goal and attracted 2,401 new members over seven months. This year’s awards competition received 1,300 entries. Judges awarded three entries as Best of Show, along with 96 Diamond Awards and 198 Awards of Merit. Other Best of Show honorees included:
* Best Association Entry: Maine Credit Union League, Westbrook, Maine, for its “Holiday CDs” Community/PR program. The league’s objective was to sell 5,000 CDs through member credit unions to raise awareness and funds to benefit its Campaign for Ending Hunger. A total of 8,141 CDs were sold in two months. * Best Use of Art: Bellco CU, Greenwood Village, Colo., for “Refer a Friend Banner and Signs,” entered in the Point of Sale Category. The credit union sought to build its membership through a member referral campaign with a $25 incentive. The art featured unlikely friends making good in humorous drawings.
For a complete list of award winners, use the link.

Maryland Senate passes fin-lit bill

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ANNAPOLIS, Md. (3/25/08)--A Maryland and District of Columbia Credit Union Association (MDDCCUA)-backed financial literacy bill was passed by the Maryland Senate last week by a 46-0 vote. The bill would create a statewide task force to develop a plan that would lead to financial literacy education as part of the state’s school curriculum (FOCUS Newsletter March 24). The task force would inlcude representatives from the Maryland General Assembly, credit unions, banks, teachers’ unions and the State Superintendent of Schools. The bill was introduced by State Sen. Anthony C. Muse (District 26). On March 4, Mike Beall, CEO of MDDCCUA; Suzanne Curren, director of member education for Andrews FCU; and Dorothea Stierhoff, senior public affairs specialist for MECU of Baltimore Inc., testified in favor of House Bill 1242 (FOCUS Newsletter March 10).

IWall Street JournalI notes CUs low mortgage rates

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NEW YORK (3/25/08)--Credit unions and small banks are more likely to offer lower rates on jumbo mortgage loans because they usually hold the loans in their portfolio, says The Wall Street Journal (March 22). The article notes that the slowdown in the housing market is requiring Fannie Mae and Freddie Mac to buy mortgages up to $729,750--well above the traditional cutoff of $417,000 for a jumbo mortgage. Jumbo loans aren't guaranteed by Fannie and Freddie and they are paid off sooner, so they have higher rates. New rules since the housing crunch aim to reduce the growing rate gap between large loans and jumbo loans. The Wall Street Journal says shopping around can turn up better deals because smaller banks and credit unions keep their mortgages instead of selling them on Wall Street to Fannie and Freddie. That means they have lower rates and less onerous restrictions. The article notes that HarborOne CU, in Brockton, Mass., has rates at 5.75% with no points--the same rate it charges on conforming loans.