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Brad Miller Named CEO Of Palmetto Cooperative Services

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IRMO, S.C. (3/28/13)--The Board of Palmetto Cooperative Services LLC Wednesday announced Brad Miller will serve as the credit union service organization's new president/CEO, effective April 8. He succeeds longtime-CEO Ed Culpepper, who retired late last year.

"His background as president/CEO for two different corporate credit unions and leadership experience with both non-profit and for profit financial service providers will be a great asset to us," said Jerry Miller, chairman of the PCS Board and president/CEO of Carolina Trust FCU in Myrtle Beach, S.C.

Miller--who has 25 years of experience in the financial services industry--served as president/CEO of Southeast Corporate FCU in Tallahassee, Fla., from 2010-2012. Previously, he was the executive director of the Association of Corporate Credit Unions (ACCU), served as president/CEO of Treasure State Corporate CU, and held management roles at the Federal Reserve Bank of Minneapolis and a consulting company.

During the past decade, Miller has served as board chairman for three CUSOs (Member Business Solutions, Accolade Investment Advisory and Corporate Synergies), as a board member of EastPay Regional Payments Association, vice chairman of the Montana Council on Economic Education and secretary/treasurer for ACCU.

CU System Briefs (03/28/2013)

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  • LINCOLN, Neb. (3/28/13)--The University of Nebraska FCU, based in Lincoln, has announced Keith Kauffeld will become its president/CEO, effective April 29. Kauffeld has more than 16 years of senior level operations and administrative management experience. He most recently served as vice president/chief administrative officer at Colorado Springs, Colo.-based Air Academy FCU.  There he was instrumental in acquiring additional non-interest income while playing a key role in reducing operating expenses through streamlining processes.  He also oversaw human resources, talent management, employee training/development, administration, contract management, non-interest income management, off-balance sheet management, security and facilities. NUFCU has more than 10,000 members and more than $70 million in assets …

FCU Drops Appeal Of Protest Against Examiner

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WASHINGTON (3/28/13)--The Credit Union National Association and the Ohio Credit Union League will work with Commodore Perry FCU to seek improvements in the examinations appeals process, they said Wednesday after it was announced that Commodore Perry had withdrawn its appeal of an exam decision by the National Credit Union Administration (NCUA).

The Oak Harbor, Ohio-based credit union had challenged an NCUA examination from 2011 that had resulted in the lowest CAMEL rating it had ever received. The$32 million asset credit union maintained that the rating was retribution for its reporting an examiner's conduct and that the final examination contained a number of factually incorrect findings (News Now Jan. 23).

The withdrawal letter from Commodore Perry CEO Thomas Renz arrived at NCUA on Tuesday.

"CUNA's Examination and Supervision Subcommittee plans to work with Renz to focus on key supervisory concerns and problem areas and to seek improvements in the appeals process," said Mary Dunn, CUNA deputy general counsel. "This review will supplement the work CUNA is undertaking to pursue examination issues identified by credit unions in CUNA's recent Examination Survey," she told News Now.

NCUA confirmed that it had received Renz'  letter and said it "will review it carefully and provide a response."

"Commodore Perry requested and received a 60-day extension to file an appeal to the NCUA Board about the Supervisory Review Committee's decision," said John Fairbanks, NCUA public affairs specialist, in an e-mail to News Now. "The deadline for filing the appeal passed on March 18.  NCUA received a letter on March 26 indicating that the credit union would not file an appeal."

He noted, "NCUA has taken steps to provide greater details to credit unions about how to file appeals, and the agency is committed to continuing to improve the examination process."

Ohio league President/CEO Paul Mercer said that the credit union's decision to drop the appeal is positive because the credit union needs to move forward and focus on serving members. Commodore Perry's willingness to share its examination experience helped the advocacy effort by revealing how the examination and appeals process works in the real world, Mercer said.

The league's position on exam reform has been the same since the first exam legislation was introduced and backed by CUNA, said Patrick Harris, director of media and public relations at the league.  "We are standing behind CUNA in getting exam legislation to move forward," he told News Now.

The next step is "between the regulator and the credit union," Harris said. "The league has been supportive of Commodore Perry's pursuit for fairness, and we've been standing alongside the credit union like any good league would do for its credit unions." He noted that Commodore Perry has submitted the letter in hopes that it will terminate the appeals process.

"We're following CUNA's lead in the exam legislations process like a good league would do and we look forward to working with CUNA and legislators to get something passed," he added.

The credit union was unavailable for comment by News Now's deadline.

Florida GAC Sees Support For Public Funds Deposit

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TALLAHASSEE, Fla. (3/28/13)--Nearly 40 credit union officials at the Florida State Governmental Affairs Conference (GAC) in Tallahassee last week heard from state officials who support their quest for public funds deposits and learned the value of credit union advocacy efforts.

Click to view larger image Florida Chief Financial Officer Jeff  Atwater drew applause when he told credit unions attending the Florida State Governmental Affairs Conference  that he supports credit unions getting public funds deposits. The event was sponsored by the League of Southeastern Credit Unions. (Photo provided by the League of Southeastern Credit Unions)
Florida Chief Financial Officer Jeff Atwater drew applause when he told credit unions that he supports their being able to accept public deposits, said the League of Southeastern Credit Unions. During a question and answer period, he reiterated that credit unions were safe and sound, and any financial institution that was safe and sound and had deposit insurance should be able to accept public deposits.

The No. 1 legislative priority for Florida's credit unions is to pass Senate Bill 918 and House Bill 251, which would allow credit unions to receive deposits from public entities.

During a reception attended by 27 legislators, State Rep. Kevin Rader (D-Delray Beach), who opposed the public deposits bill, spent time with Mack MacVicar, a director with City County CU of Fort Lauderdale. By the end of their visit, Rader told LSCU he may be coming around to the public deposits issues. "This is a great example of how credit unions can make a difference during advocacy events," the league said.

During credit unions' visits to legislators' offices, many lawmakers said they support the public deposits issue and what credit unions do for their members. Sen. Rene Garcia (R-Hialeah),  sponsor of S.B. 918, told credit unions he supports credit unions in the long run.

Other speakers included:

  • Darrick McGhee, legislative director for the governor's office, who outlined the governor's agenda, said the state will have a surplus this year, and noted the governor has given the Affordable Care Act to the legislature to determine what is best for the state.
  • Ryan Donovan, senior vice president of legislative affairs, the Credit Union National Association, who updated credit unions about federal issues and behind-the-scenes efforts by CUNA to get credit union legislation before legislators. He noted the 112th Congress passed fewer bills than the "do nothing" Congress of the 1940s did.
  • Marian Johnson, senior vice president of political strategy, the Florida Chamber of Commerce, who advised that grassroots advocacy is a 52-week-a-year job that must be ongoing at all times.
  • Bruce Ricca and Robert Hayes of the Florida Office of Financial Regulation and Robert Parrish from the National Credit Union Administration.
Rep. Jason Brodeur (R-Sanford)--who sponsored public deposits legislation last year in the House and was the first representative to co-sponsor  public deposits legislation in 2013--was presented the LSCU Lawmaker of the Year Award.

Washington CUs Launch Save To Win

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FEDERAL WAY, Wash. (3/28/13)--The Northwest Credit Union Association (NWCUA) and six credit unions in Washington have partnered with CU Solutions Group (CUSG) to offer the savings program Save to Win beginning Monday. Washington is the fourth state to offer the program.

"Research has shown that with Save to Win, un-banked and under-banked consumers become savers, often for the first time in their lives," said Troy Stang, NWCUA president/CEO. He added, "We know the result will be more financially fit consumers who are better prepared now to save for their goals."

NWCUA and its launching credit unions researched operations models and opted to contract with Michigan-based CUSG to operate the program for three years. Michigan's program has resulted in 40,000 unique accounts and deposits in excess of $70 million.

Legislation allowing credit unions to offer prize-linked savings accounts passed in the Washington Legislature in 2011. Washington's Save to Win program has a similar model to those currently offered in Michigan, Nebraska and North Carolina.

By making a $25 deposit, members at the six participating credit unions will be entered into a drawing to win a $5,000 annual prize and monthly prizes up to $5,000. The savings program is available to Washington state residents 18 years of age or older, who open accounts at a participating credit union.

Save to Win offers the excitement of a lottery without the risks of losing the money used to purchase a ticket. Members are guaranteed to have more money saved than when they started, because their funds stay in the account.  NWCUA's Strategic Link subsidiary is funding the prize pool for three years. 

Members open a share certificate and for each deposit of $25 or more they earn an entry into the monthly prize drawings, up to 10 prize entries per month. At the end of the month, prizes totaling up to $5,000 will be awarded to members. The member entries also will be entered for the annual prize drawing of $5,000 in April 2014.

Credit unions participating in this program are:

  • OBee CU, Tumwater;
  • Fibre FCU, Longview;
  • TwinStar CU, Lacey;
  • Connection CU, Silverdale;
  • North Coast CU, Bellingham; and
  • Express CU, Seattle.

ND Gov Signs Late Fee Bill, Rural Home Appraisals Bill Passes

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BISMARCK, N.D. (3/28/13)--Two bills--including a victory for credit unions--have progressed in the North Dakota legislature, says the Credit Union Association of the Dakotas.

Gov. Jack Dalrymple last week signed into law Senate Bill 2136, which will allow financial institutions to impose a late charge payment penalty if the amount of the late charge or method of calculation have been agreed to by the parties in the loan documents signed by the borrower, said CUAD (The Memo March 27).

The Financial Service Coalition, made up of credit unions, banks, independent community banks and farm credit services in the state, supported and advocated passage of the bill. "Financial institutions have not had the ability to negotiate or revise these terms since 1991," said CUAD.

Another bill, House Bill 1225, which would speed up the appraisal processes for rural homes, was passed by the House and Senate and awaits signature on the governor's desk. The bill, if approved, will make home sales prices public. That will aid real estate appraisers in gaining access to comparable sales prices in rural areas, and eliminate hurdles and delays in tracking down that information, said CUAD. The State's Tax Assessor Association also favored making the information public, it said.

To date, 29 bills of interest to North Dakota credit unions are still being debated in the legislature. Credit unions have appeared and testified at 18 hearings so far, said CUAD.

Website Recommends CUs For Short-Term Loans

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NEW YORK (3/28/13)--Credit unions are a good, lower-cost option for consumers with short-term loan needs, according to a website that links consumers with payday lenders and is touting credit unions as a good alternative.

The site, PaydayLoan-Lenders.com, has published a list of alternatives to payday lending for individuals living in any state that prohibits payday loans or who need "low-cost options for borrowing," the New York-based site said in a press release.

Credit unions are often cited as lower-cost alternatives to payday loans for members needing short-term funds, said the Credit Union National Association.  That's because they don't charge exorbitant interest rates. Some credit unions tie their programs to wealth-building loans that require putting part of  the funds into a savings account and/or participating in financial counseling, as conditions for the loan.

Currently, 13 states prohibit the use of payday loans, said PaydayLoan-Lenders.com. "Countless more have restrictions placed on the interest rates applicable to the loans, making them virtually off-limits," said the company's statement. "For servicemen and women in the U.S. military, there are additional restrictions on the total amount of interest that can be charged.

"This means that there are millions of consumers whose short-term lending needs cannot be met by payday loans or cash advances."

The website offers a free contact list that includes "information on community-based credit unions, which are well-provided for across all 50 states and the District of Columbia." The list also includes military aid societies that offer financial planning and emergency loans and grants.

The site lists six tips for consumers. The No. 1 Tip:  Approach a local credit union. "Community-based organizations called credit unions are popular and cheap ways to borrow extra money, particularly if you have a low-income or are saddled with a poor credit rating."

Other tips included using a low-cost credit card, negotiating with creditors, investigating using an overdraft on a checking account, researching extra protections and possibilities for military personnel, and asking friends, family, or an employer for a short-term loan.

Payday loans are prohibited in Arizona, Arkansas, Connecticut, the District of Columbia, Georgia, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Vermont and West Virginia, said the website.  Maine allows payday loans only from authorized lenders and the loans have interest rate caps. Since 2007, military personnel have been limited to a 36% total interest rate cap on payday loans if available in their states.

CU SacTown Race To Benefit Children's Hospitals

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SACRAMENTO, Calif. (3/28/13)--The second annual Credit Union SacTown 10 Mile Run will take place April 7 in downtown Sacramento, Calif., to raise money for Children's Miracle Network hospitals in California and Nevada.

The race increases national awareness of credit unions and will take place the same day as the 41st Annual Credit Union Cherry Blossom Ten-Mile Run in Washington, D.C. It is part of the Credit Union Miracle Day "Family of Races."

SacTown 10 raised more than $140,000 for Children's Miracle Network hospitals last year. Children's Hospital & Research Center Oakland used the funds it received to support its Pedi Rehab department, specifically for rehab equipment such as specialized wheelchairs, according to Tina L. Evans, director at the hospital.

At the University of California-Davis Children's Hospital in Sacramento, the money went to support child life programs, such as research, equipment and music therapy, said Jacquelyn Mills, director of development.  

California and Nevada credit unions have raised nearly $164,000 so far this year. Major sponsors include:

  • CO-OP Financial Services, Rancho Cucamonga, Calif.;
  • The Golden 1 CU, Sacramento;
  • Patelco CU, Pleasanton, Calif.;
  • San Francisco Fire CU; San Mateo CU, Redwood City, Calif.;
  • SchoolsFirst FCU, Santa Ana, Calif.;
  • Travis CU, Vacaville, Calif.;
  • Xceed Financial FCU, El Segundo, Calif.;
  • CU Direct Corporation, Ontario, Calif.;
  • CUNA Mutual Group;
  • Intuit; and
  • Vining Sparks.
More than 1,300 racers, including 652 credit union employees and members, are scheduled to participate. More than 200 credit union volunteers are expected to work the event.

CUNA Mutual On World's Most Ethical Companies List

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MADISON, Wis. (3/28/13)--CUNA Mutual Group was identified as one of the most ethical companies in the world, according to an international organization that rates companies' business ethics and corporate social responsibility.

The organization, Ethisphere, cited CUNA Mutual Group along with 140 other companies from three dozen industries as the World's Most Ethical Companies for outperforming their industry peers in ethical behavior.

"CUNA Mutual Group is being recognized for its credit union advocacy, commitment to ethics, and compliance and community involvement," Ethisphere officials said. 

"It's an honor to be recognized for walking the talk on our commitment to corporate responsibility and ethics in business," said Steve Koslow, senior vice president, chief ethics and compliance officer, CUNA Mutual Group.

Companies from more than 100 countries and 36 industries were reviewed. This year's listed totaled 14 new honorees, including CUNA Mutual Group.

"Not only were there more applicants for the World's Most Ethical Companies recognition this year than any year in the past, but we are also seeing more companies be proactive and create new initiatives that expand ethics programs and cultures across entire industries," said Alex Brigham, Ethisphere executive director.

Ethisphere reviewed codes of ethics, litigation and regulatory infraction histories; investment in innovation and sustainable business practices; activities designed to improve corporate citizenship; and nominations from senior executives, industry peers, suppliers and customers.

Equifax: Student Loans 'Severe Derogatory' Balances Up 36%

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ATLANTA (3/28/13)-- An Equifax report that found student loan "severe derogatory" balances increased 36% over last year hits home that consumers need the type of affordable private student loans that credit unions offer.

That's because credit unions require a small payment each month while the student is in college, which invests the student in paying back the loan from the beginning. As a result, private student loan delinquency in credit unions is  just 1.45%, according to statistics from the Credit Union National Association reported in January in News Now (Jan. 15).

Credit unions can consider student lending a niche to help them increase their loan portfolios, says Paul Gentile, CUNA executive vice president of strategic communications and outreach. And since credit unions show the credit union difference in their approach to student lending,  they can continue to keep student-loan write-offs low despite the trend with other lenders--another demonstration of the value of credit unions.

Equifax's latest National Consumer Credit Trends Report indicates that severe derogatory or charged-off balances--the bulk of student loan write-offs--for January and February hit $3 billion, or 36% more than the $1.9 billion in  same period a year earlier.

"Driven heavily by economic factors, including unemployed or under-employed consumers going back to school along with the rising cost of tuition, student lending has demonstrated consistent, year-over-year growth," said Equifax Chief Economist Amy Crews Cutts.

"Continued weakness in labor markets is limiting work options once people graduate or quit their programs, leading to a steady rise in delinquencies and loan write-offs," she said. "Many policy options are being discussed regarding how to reduce some of the burden, including graduated payments that reflect the lower starting salaries of new graduates, and improve the performance of these loans."

Other changes in student loan characteristics from February 2012 to February 2013:

  • Balances outstanding rose more than 14% on student loans, to $852.7 billion from $746.3 billion; and
  • The number of student loans outstanding increased nearly 13%, to more than $123 million from $108 million.
"Student loans are unique today in that they are the only major form of credit that is not rigorously underwritten on either a past credit-performance basis (such as using credit scores) or ability to pay based in income," Crews Cutts said.