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Texas CU Launches First-Time Auto Buyers Program

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SAN ANTONIO (3/25/13)--Generations FCU in San Antonio recently launched a first-time auto-buyers program to help members deal with financial problems they may encounter when trying to buy their first new or used car.

The Your Ride, Your Rules program requires first-time buyers to be at least 18 years of age, provide proof of three months of income, show proof of insurance coverage and have no prior auto-loan credit. The loan maximum is $25,000, and the term is for 48 months. Participants' payments cannot exceed 20% of their monthly gross income (LoneStar Leaguer March 22).  

"Buying your first car, no matter if it's new or used, can be a nerve-wracking and difficult experience, especially when it comes to financing," Andrew Wilson, Generations vice president of lending, told the Texas Credit Union League. "As a credit union we are committed to being an advocate for our members. Your Ride, Your Rules helps them get a fair deal on that first car and also to be successful in paying it off and building a strong credit history."

The program requires borrowers to complete a one-hour online Financial Literacy 101 course to help ensure they can repay the loans. Topics include financing a car purchase, the total cost of ownership, negotiating a sale price, common mistakes to avoid when purchasing an auto and how to avoid surprises.

Program applicants do not need a co-signer for the loan and are not required to have a two-year employment history.

CU System Briefs (03/25/2013)

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  • FORT WORTH, Texas (3/25/13)--EECU  surpassed the $1 billion milestone in loans at the end of 2012 and has sustained that amount since, according to the Texas Credit Union League (LoneStar Leaguer March 22). The Fort Worth-based credit union offers new- and used-car loans, recreational vehicle and boat loans, mortgages, home equity loans, personal loans and credit cards. It receives and processes loans through 13 branch locations, online channels and indirect lenders such as auto dealerships. The milestone represents the credit union's "commitment to developing the financial solutions that North Texans are looking for," said Lonnie Nicholson, EECU president/CEO …
  • WINSTON-SALEM, N.C. (3/25/13)--Rodney Jerome Rainey, 41, of Winston-Salem, N.C., on trial for the Feb. 3, 2012, robbery of Latino Community CU's Winston-Salem branch, interrupted testimony by his uncle and changed his plea to guilty (Winston-Salem Journal March 21).  He had been charged with common-law robbery and being a habitual felon. His uncle was the third witness called in the case and testified that Rainey work a camouflage jacket like the one worn by the robber and had given him money after the robbery.  Rainey jumped up and told the judge he would plead guilty.  The judge dismissed the jury and sentenced Rainey to between eight years and five months to 11 years and two months in prison. During the heist, the robber demanded $7,500 from the teller and told her to avoid a stacked bundle of cash. He fled with $2,000 …
  • BATH, Maine (3/25/13)--Midcoast FCU in Bath, Maine, announced that Joe Gervais will become president/CEO of $127 million asset credit union in June, upon the retirement of Gail Richardson, according to the Maine Credit Union League (Weekly Update March 22).  Gervais has been with Orono-based University CU for the past 20 years, including the past seven years as executive vice president. He will join the credit union on April 22 and work with Richardson on the leadership transition this spring …
  • GARDINER, Maine (3/25/13)--Gardiner (Maine) FCU has announced that Vicki Lemieux will become the $37 million asset credit union's new president/CEO in June, upon the retirement of Phil Bergeron.  Lemieux has held the position of loan/collections manager for several years at the credit union, according to the Maine Credit Union League (Weekly Update March 22) …

Financial Literacy Month an Opportunity For CUs to Shine

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MADISON, Wis. (3/25/13)--As Financial Literacy Month, April will present an opportunity for credit unions to rededicate themselves to their core operating principles of education and social responsibility, says Lois Kitsch, National Credit Union Foundation national program director.

"It is part of our mission," Kitsch said. "It is why we exist. But I also think it makes good business sense. The more educated members we have the more successful and productive they will be as members of the credit union. It makes common sense that access to financial information should be the core of everything credit unions do."

NCUF raises funds, makes grants, manages programs, and provides education to help consumers achieve financial freedom through credit unions. Through NCUF grants and programs, credit unions fund financial education and empower more consumers to save, build assets and own homes.

There is evidence that a need for financial education exists among U.S. consumers. The sixth annual Financial Literacy Survey of adults, conducted in 2012 on behalf of the National Foundation for Credit Counseling and the Network Branded Prepaid Card Association revealed that:

  • Two in five U.S. adults gave themselves a C, D or F on their knowledge of personal finance;
  • 56% admit that they do not have a budget;
  • One-third, or more than 77 million Americans, do not pay all of their bills on time;
  • 39% carry credit card debt over from month to month;
  • Two in five adults indicated that they now save less than they did one year ago; and about 39% do not have any non-retirement savings.
"It's a logical step financial education should start with credit unions, which are philosophically grounded in it," Kitsch.

NCUF is inviting credit union organizations to hold a "Financially Fit Day" on April 3 to kick off National Financial Literacy Month. Credit unions can hold fundraising days with members or staff on April 3 or throughout April, NCUF said. Donations will be split between NCUF and a state's credit union foundation.

Credit unions will have plenty of resources to assist in their financial literacy efforts. In April, the Credit Union National Association will offer credit unions two opportunities to increase credit union awareness while building financial literacy among America's youth.

National Credit Union Youth Week, April 21-27, was created by CUNA so credit unions nationwide could focus on the financial needs of young people and provide financial literacy education. The event focuses on teaching the benefits of saving and goal setting, and invites youth to open savings accounts at their credit union and make deposits throughout the year.

This year's theme, "Savings Sleuth: Solve the Mystery" employs mystery and mustaches to engage youth. For National Credit Union Youth Week promotional materials and resources, use the link.

Because National Credit Union Youth Week occurs during Financial Literacy Month, credit unions can extend their youth activities throughout April.

CUNA conducts the National Youth Saving Challenge throughout April. The challenge rewards 10 savers with $100 cash prizes. Last April, 241 credit unions joined the Saving Challenge and engaged 125,867 youth, who deposited a collective $21.3 million in their credit union savings accounts, including 7,300 new member accounts.

"It makes good business sense for credit unions to help members make the most of their financial resources. We believe that educated consumers choose credit unions as their best financial partner," said Susan Tiffany, CUNA director of consumer periodicals. "We also believe it's the right thing to do."

CUs' Small Biz Loans Help Put New Sauces On The Market

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DURHAM, N.C. (3/25/13)--Two North Carolina credit unions provided member business loans (MBL) to local entrepreneur Michael Lloyd to help get his small business off the ground and parlay his family's recipe for a sauce into a mass-produced condiment.

In 2010, Self-Help FCU in Durham N.C., with $580 million is assets, loaned Lloyd $10,000 for equipment and marketing for his company (newsobserver.com March 18).

Then in 2011, the Durham-based Generations Community CU, with $23 million in assets, approved a $15,000 loan to help Lloyd increase the production of his sauce to two 60-gallon batches per month, from three 20-gallon batches per month, the newspaper said.

Lloyd, who is working toward his doctorate in food and nutritional sciences at North Carolina State University, is continuing to grow his business, which now sells sauces and mustards in 24 stores--primarily located in North Carolina and South Carolina.

Down the road, Lloyd hopes to market his Num Num brand, which has low sodium and no gluten, to schools as a substitute for high-sodium condiments. He also hopes to hire interns to educate the public about the benefits of a low-sodium condiment, the paper said.   

Credit unions want to do more to assist such entrepreneurs to start up and grow their small businesses. That's why the Credit Union National Association and credit unions supported legislation reintroduced in Congress last month to raise credit unions' MBL cap to 27.5% of total assets, up from 12.25%.  Doing so would generate $14.5 billion available for MBLs--and increase jobs by 158,000 in the first year without costing the taxpayer, according to new statistics from CUNA.  

To read the article, use the link.

NM Legislative Session Ends, No New Regs Impact CUs

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ALBUQUERQUE, N.M. (3/22/13)--New Mexico's 60-day state legislative session ended March 16, with no additional regulatory or tax burdens enacted that would impact credit unions, said the Credit Union Association of New Mexico.

Credit unions were "extremely active, visible and engaged," and they took the "opportunity to showcase the credit union difference" and the work credit unions do daily, said CUANM Vice President Governmental Affairs Juan E. Fernandez Ceballos. "We worked diligently to ensure that no additional regulatory or tax burdens were enacted and successfully achieved this goal," he added.

A key data breach bill, SB 347, which would have made it illegal for merchants to keep unencrypted credit or debit card data after an authorization process and made them liable for the costs associated with data breaches of unencrypted data,  ran out of time and was not addressed by the time the session ended.

Credit unions strongly supported the bill and had met with the Senate Majority Leader to explain credit unions' position, Ceballos told News Now. However, SB 347 "clocked out." Earlier, SB 347 "had passed unanimously in the Senate Judiciary Committee and the Corporations and Transportation Committee," he said.

"We plan to reintroduce the legislation," he added. It was modeled after legislation in other states and would have given credit unions grounds to sue breached merchants if they didn't purge or encrypt their data. It would have enabled them to sue for costs of reissuing cards, notifying breach-affected members, dealing with fraud on the accounts, and for closing and reopening the account, he said.

Other legislative proposal the association tracked included bills on:

  • Unclaimed insurance benefits and policies, which would provide an affirmative duty for insurers to search databases to find deceased policyholders. CUANM supported the legislation, which passed both chambers of the legislature. Credit unions already have processes to identify deceased members or dormant accounts. Forcing them to perform an extension search of their records, only to pay themselves as a beneficiary, would be "a costly exercise that is likely to outweigh the financial benefits," said CUANM.
  • Creation of a "state financial regulation fund" to administer funds allotted to the state from a court settlement reached by state attorneys general and mortgage lenders. The legislation was signed into law on March 3.
  • Expansion of the New Mexico Finance Authority (NMFA), which would allow NMFA to make participation loans with lenders. The association and its allies worked to amend the proposal to include credit unions, which CUANM said were purposely left off the initial proposal. Although the measure clocked out, the amendment to include credit unions passed unanimously. CUANM said it would work to make sure future bills include the credit union language.
Several other bills tracked by the association clocked out when the legislative session ended.

ACCU Featured On Terry Bradshaw Show

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GLENDORA, Calif. (3/25/13)--America's Christian CU in Glendora, Calif., was briefly featured in a recent episode of Today In America with Terry Bradshaw. The five-minute segment talked about ACCU as a business leader in the community during the show's "City Of Glendora" special.

In the episode, ACCU President/CEO Mendell L. Thompson was interviewed about ACCU's business growth and innovation since it moved to Glendora, and the community partnerships and charitable efforts that resulted from working with the city council and leaders.

"Glendora gave us a chance to hire smart, gifted and talented staff," Thompson said in the episode. He added, "Leadership here [from the city] has been very supportive of everything that we are and that we stand for."

The segment also highlighted photos from events such as the $256.5 million asset ACCU's Annual Snow Day and its staff at the Glendora Christmas Parade.

"We were honored to have been selected as a community business leader within the city of Glendora," Thompson said. "This is an outstanding city to live and work in, and we congratulate the city on their selection for this award-winning news program."

To view the segment, use the link.

Vermont Banks Oppose Bank Tax, Call For CU Tax

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SOUTH BURLINGTON, Vt. (3/25/13)--Three banks testifying before a Vermont state legislative committee brought up taxing credit unions when they spoke of their opposition to increasing a bank franchise tax. But the idea "didn't get enough traction with legislators to go anywhere," said Joe Bergeron, president/CEO of the Association of Vermont Credit Unions.

Even though the idea went nowhere, it is "just one of many reasons why Vermont leaders need to join AVCU's lobbying team at our annual Credit Unions in the Statehouse day on Wednesday, April 10," said Bergeron. "It's important for credit unions to be active in political involvement and advocacy," he told News Now.

Protecting and defending credit unions' tax-exempt status is the No. 1 legislative priority for the credit union system, said the Credit Union National Association. To that end, CUNA has made available a Credit UnionTax Status Advocacy Toolkit to help credit unions show members the value of credit union membership. Use the link for more information. (See related News Now story, "Tools Added To CUNA Tax Advocacy Arsenal.")

The banks' comments were made in testimony Wednesday morning before the House Ways and Means Committee, which is searching for $20 million to fill the state's 2014 budget deficit, said AVCU. "A broad range of approaches was entertained, including a 25% increase on the franchise fee (0.000096 of the institution's average monthly deposits held in the state) paid quarterly by banks." The franchise tax is an alternative to an income tax (Newslines Express March 22).

Vermont Bankers Association President Chris D'Elia and two bank CEOs objected to an increase in their franchise tax, then attempted to get credit unions on the table as well, without prompting by legislators, said AVCU.

AVCU's lobbying team monitored legislators' reaction to the banks' suggestions very closely, said AVCU.  By day's end, however, the suggestion to increase the banks' franchise tax was off the table and the legislators moved on to other alternatives.

15 Join Iowa League Innovators Group

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DES MOINES, Iowa (3/25/13)--The Iowa Credit Union League (ICUL) selected 15 credit union executives to join its inaugural Iowa Innovation Group (IIG) program, which fosters the development of new ideas and innovations for credit unions.

Each member will serve a seven-month term, participate in meetings led by a team from ICUL and the Filene Research Institute, and pilot new ideas at their credit unions.

"While the struggles of consumers and financial institutions are all too real, this environment is perfect for innovation," says Jim Niederhauser, ICUL vice president of member services. "We're confident that this new group of innovators has the skills, passion, and grit to transform the lives of consumers through credit unions in Iowa."

Modeled after Filene's i3 (Ideas, Innovation, Implementation), IIG seeks to launch similar programs such as the i3 Save to Win (prize-based savings accounts), nationwide Savings Challenges (reality TV meets wallet improvement) and Debt in Focus (an anonymous, online financial assessment tool).

IIG will identify ways to improve how credit unions provide financial guidance to their membership.

IIG members include:

  • Alejandro Alaniz, account relationship specialist, Des Moines (Iowa) Metro CU;
  • Dan Davis, vice president of finance/information technology, Financial Plus CU, West Des Moines;
  • Brian Day, Dwolla product leader, The Members Group;
  • Paul Farmer, innovation officer, Veridian CU, Waterloo;
  • Rich Head, information technology director, Linn Area CU, Cedar Rapids;
  • Maria Johnson, assistant vice president, marketing, Collins Community CU, Cedar Rapids;
  • Janet Lintin, CEO, Des Moines (Iowa) Police Officers CU;
  • Kris Lundquist, vice president, marketing, The Family CU, Davenport;
  • Penny McCoy, branch manager, First Class CU, West Des Moines;
  • Jonathon Miller, president/CEO, Dubuque (Iowa) Teachers CU;
  • Samantha Pingel, member service representatives, Fort Dodge (Iowa) Family CU;
  • Aaron Plein, vice president, branch manager/service delivery, Dupaco Community CU, Dubuque;
  • Denny Siemers, CEO, Town and Country CU, Harlan;
  • Kathy Steffes, branch manager, Iowa Community CU, Cedar Falls; and
  • Jennifer Tebbe, eServices branch manager, Greater Iowa CU, Ames.

AVCU Board Recommends Bylaw Changes

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MONTPELIER, Vt. (3/25/13)--The Association of Vermont Credit Unions (AVCU) Board of Directors is recommending several changes to the association's bylaws to facilitate electronic voting and add an associate membership category.

AVCU President Joe Bergeron last week informed member credit unions the board will suggest the changes at the upcoming AVCU annual meeting on May 18 (Newslines Express March 22).

The purpose of the amendments recommended is three-fold:

1. To provide the option of voting and /or meeting by electronic means. Current bylaw language presumes that meetings of members and the board and voting on any matter are in person. Since technology changes are frequent, the proposed language mirrors Vermont's not-for-profit statutory language and allows meetings to be conducted by any means where participants are aware of comments by others, visually or audibly.

2. To create an associate membership category that carries no voting or right to hold office. Although none exist in Vermont today, it is becoming common for credit unions to have a presence in another state in addition to the one where they are domiciled. Such credit unions often request the same advocacy and information sharing as those domiciled in the state.  Also, vendor organizations have increasingly sought to become associate members of AVCU to participate in events and receive AVCU communications. An associate member category would allow them to be connected to AVCU, without the same rights as Vermont member credit unions.

3. To accommodate minor housekeeping changes from a review of the bylaws, and to recognize changes in technology.

Kundert Elected Filene Board Chairman

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MADISON, Wis. (3/25/13)--The Filene Research Institute board of directors elected Paul Kundert, president/CEO of UW CU, Madison, Wis., as its new chairman during its quarterly board meeting.

Kundert replaces Pat Smith, president/CEO of  Unitus Community CU in Portland, Ore., who served as chairman for the last three years and remains on the board as a director. 

Kundert previously served as vice-chair on the Filene board. Prior to joining UW CU, he was president and chief operating officer of Think CU (formerly IBM MidAmerica, and now chartered as Think Mutual Bank of Rochester, Minn.). Kundert has previously served on the board of the Wisconsin Credit Union League, the Wisconsin Credit Union Foundation and the Filene Research Council.

Filene board officers include Patsy Van Ouwerkerk, president/CEO of Travis CU, Vacaville, Calif., as the newly elected vice-chair; Bill Cheney, president/CEO of Credit Union National Association as treasurer; and Brett Thompson, president/CEO of The Wisconsin Credit Union League, Pewaukee, Wis., as secretary. 

Jan Roche, president/CEO of State Employees FCU, Alexandria, Va., was re-elected to a second three-year term as director.  She joins Smith and Jeff Post, president/CEO of CUNA Mutual Group, as at-large board members.