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CUs keep providing free checking as banks bail out

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MADISON, Wis. (3/4/14)--Two new studies indicate that free checking remains a mainstay at credit unions while banks continue to charge increasing fees on checking accounts. Also, free checking at banks continues to decrease.
 
Bankrate's 2014 Credit Union Checking Survey found that 72% of the nation's 50 largest credit unions offer a free checking account, which means there are no monthly service fees or point-of-sale transaction fees associated with the account.
 
In contrast, the percentage of free checking accounts at banks fell to 38% in 2013 from 76% in 2009, according to Bankrate's data.
 
The Bankrate checking survey was also covered in a March 3 CNNMoney article. Use the link.
 
Even credit unions that don't offer free checking provide ways for members to avoid monthly fees. For instance, Alaska USA FCU in Anchorage, Alaska, waives its $5 monthly service fee if a member signs up for direct deposit. Factoring in these kinds of waivers, which also include signing up for e-statements or maintaining a minimum balance, the number of free checking accounts jumps to 96%, Bankrate reported.
 
Meanwhile, checking account fees were on the rise as free checking accounts at banks continued to disappear, the latest MoneyRates.com Bank Fees Survey found. Checking accounts got more expensive in the second half of 2013, based on a number of factors measured by the survey.
 
Monthly service fees, overdraft fees and ATM fees all climbed during the period. Also, the proportion of free checking accounts dropped below 30% for the first time in the survey's history.
 
The average overdraft fee at banks rose by 43 cents, to $32.03, MoneyRates.com said. Customers who use an ATM outside their own bank's network can potentially get hit by two fees: One from their own bank, and one from the bank that owns the ATM. Both of these types of fees climbed in the latter half of 2013, with the out-of-network fees banks charge their own customers rising by 8 cents to $1.45, while the average fee banks charge for non-customers using their ATMs rose by 7 cents, to $2.55.

Autos boost CU lending, CUNA estimates say

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MADISON, Wis. (3/4/14)--Credit unions continue to bolster their loan balances, particularly with auto lending, according to the monthly credit union estimates report released by the Credit Union National Association Monday.
 
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"Auto lending was robust with new auto loan balances rising 1.8% and used auto balances up 0.8%--more than twice as fast as reported last year," CUNA Senior Economist Steve Rick told News Now .
 
He added that credit unions reported strong loan growth in January with loan balances rising 0.5%, faster than the 0.1% reported in January 2013. Adjustable-rate mortgages also grew rapidly at 2.9% in the first month of the year as the difference between fixed-rate and adjustable rates increased.
 
Declining loan products were other mortgages (-1.6%), credit cards (-1.5%) and fixed-rate first mortgages (-0.6%).
 
The National Credit Union Administration's year-end call report numbers show strong loan activity, also led by auto loans. (See related story: CUs' 2013 financials show continued positive trends.)
 
Rick said credit quality improved in the last few months as the loan delinquency rate fell to 0.95% of total loans in January 2014, down from 1.12% one year earlier.
 
"The year-over-year decline was caused by the dollar amount of delinquent loans falling by -8.8% while total loan balances increasing by 7.3%," he said, adding that credit union loan delinquency rates are slowly approaching their historical long-run average of 0.75% of total loans. 
 
"We forecast the loan delinquency rate to continue to decline throughout 2014 before reaching 0.85% by January 2015," Rick told News Now .
 
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Credit union savings balances increased 1.2% in January compared with a 0.1% decrease in December. Share drafts led with a 4.6% pace.
 
The capital ratio remained at 10.5%, which has been holding steady since last January.  Credit unions hold a total dollar amount of capital of $115.5 billion.
 
The loan-to-savings ratio declined to 69.8% in January from 70.3% in December.
 
Total credit union membership grew 0.2% during January, putting credit unions over the 99-million mark.

CU lien priority under threat in Mo. legislature

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JEFFERSON CITY, Mo. (3/4/14)--The Missouri Credit Union Association (MCUA) is working to prevent predatory tax-lien transfer bills from progressing past committee status in the state legislature.
 
The bills, each of which have been introduced in the House and Senate, would allow a third-party company that paid off delinquent property taxes on behalf of the owner to have lien priority ( Missouri Difference Feb. 27). The property-tax lender would get priority over the mortgage-holding financial institution should the owner become delinquent.
 
The companies look for homeowners who are delinquent on their property taxes and approach them with the premise they are helping them save their homes. The interest rates are high and the financial institutions are shoved to the back of the line should a foreclosure occur ( Forbes Jan. 1, 2013)  
 
Texas is the primary home of tax lenders, and the practice has become so predatory and widespread that its legislature is trying to better regulate it
 
"These loans are dangerous for consumers," said David Kent, MCUA director of state legislative affairs. "What many people don't understand is credit unions will work with members to protect their financial well-being and most importantly, to try and keep them in their home--even if they fall behind on their tax payments," he told News Now.

Tax-reform plan leads Top 10 for Feb. News Now

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MADISON, Wis. (3/4/14)--A Feb. 26 article announcing that the specific credit union tax status is left untouched in a tax reform plan released by House Ways and Means Committee Chairman Dave Camp (R-Mich.) was the most read News Now article in February.
 
Camp's plan initially appeared to subject federal credit unions to a tax on 'unrelated business activities" (UBIT) for the first time. Another News Now story, in which senior staff members of House Ways and Means Committee clarified that it is not the committee's intention to impart any additional taxes on federal credit unions, including UBIT, was also among the Top 10 requested articles.
 
The second most-requested article announced the National Credit Union Administration (NCUA) will not charge a Temporary Corporate Credit Union Stabilization Fund (TCCUSF) assessment in 2014. The agency said the positive news is the result of a $1.4 billion settlement with JP Morgan and the continued improvement in the performance of the legacy assets underlying the NCUA Guaranteed Notes program.
 
The complete Top 10 list for the month includes:
 
10. Tax committee staff clarifies: No intention to impose additional tax on CUs--including UBIT

WASHINGTON (2/26/14)--It is not the intention of the House Ways and Means Committee to impart any additional taxes on federal credit unions, the committee staff clarified in response to inquiries by NCUA. The exchange occurred just hours after House Ways and Means Committee Chairman Dave Camp (R-Mich.) unveiled his tax code reform plan.
 
9. Matz says merchants must be subject to same data security standards as CUs

WASHINGTON (2/24/14)--The data breach at Target is the story of a double standard "that is neither healthy nor fair," NCUA Chairman Debbie Matz said today at the 2014 Governmental Affairs Conference. "While financial institutions are required by law to protect sensitive personal information, data protection standards for retailers are too often simply not adequate," Matz added.
 
8. CUNA announces star-studded media panel at the GAC

WASHINGTON (2/12/14)--The Credit Union National Association has just announced a new feature for this year's Governmental Affairs Conference. The program will include a new media panel session featuring accomplished journalists who will discuss in-depth how credit unions can better communicate their message to the media.
 
7. CUNA warns CFPB data collection could increase consumer exposure to ID theft

WASHINGTON (2/11/14)--Consumer Financial Protection Bureau data collection practices could increase the risk of identity theft and fraud for consumers, CUNA has warned.
 
6. As Congress continues data breach scrutiny, CUNA, partners correct merchant distortions

WASHINGTON (2/6/14)--Saying "it's time to stop the blame game and be part of the solution," the CUNA and partner financial services associations corrected some distortions circulated by merchants in a Wednesday communication to members of the U.S. Congress.
 
5. CU financials continue positive trend, NCUA reports
 
ALEXANDRIA, Va. (2/20/14)--The recent trend of positive financial results for the credit union system continued today, with the NCUA reporting continued declines in the number of CAMEL code 3, 4 and 5 credit unions.
 
4. NCUA risk-based capital plan could cut CU capital buffers by billions: CUNA

WASHINGTON (2/10/14)--The NCUA's proposed risk-based capital rule could prove costly for many credit unions, forcing them to increase their capital levels by a net $7.3 billion to maintain their current margins above the proposed "well capitalized" thresholds.
 
3. Internet domain name just for CUs is on its way

WASHINGTON (2/26/14)--A new Internet domain name just for credit unions, .creditunion (dot credit union), is just about a reality.
 
2. NCUA confirms: No TCCUSF assessment in '14--and less likely after

WASHINGTON (2/12/14)--There will be no TCCUSF assessment charged in 2014, the National Credit Union Administration has confirmed. And, credit unions are much less likely to be charged another TCCUSF assessment going forward.

1. Tax plan preserves tax exemption, but raises concern in other key area

WASHINGTON (2/26/14)--The specific credit union tax status is left untouched in a tax reform plan released today by House Ways and Means Committee Chairman Dave Camp (R-Mich.), but the plan does raise some additional tax issues that are of concern to CUNA.

GAC impact noted by Sunday Washington Post

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WASHINGTON (3/4/14)--The impact 4,400 credit union advocates--in town for CUNA's 2014 Governmental Affairs Conference--had on Washington's political scene was the topic of a March 2 Washington Post Capital Business article.

"Thousands of credit union representatives came to Washington last week to rally Congress to preserve a long-standing tax exemption for credit unions," reported the article, headlined "Credit unions descend on Washington in hopes of preserving tax exemption."
 
The article goes on to explain that the credit union tax status was left untouched in a tax reform plan released by House Ways and Means Committee Chairman Dave Camp (R-Mich.).
 
"Our top issue has been preserving the credit union tax exemptions, which have been in place since 1917," Bill Cheney, CUNA president/CEO, said in the article. "This is not some new-fangled, late-breaking tax loophole. This has been around a very long time."
 
The article describes how lawmakers from several states took the podium at the conference to defend the credit union tax status.
 
"Credit unions aren't banks, and it doesn't make sense to tax them like they are," Rep. Derek Kilmer (D-Wash.) was quoted in the article.
 
Another issue of concern for credit unions is data security. Most fraudulent costs--including the cost of reissuing credit cards and answering members' questions--are covered by credit unions and banks, Cheney told the Post .
 
To read the entire article, use the link.

CO-OP announces finalists for THINK '14

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RANCHO CUCAMONGA, Calif. (3/4/14)--Three credit union employees will compete for a $10,000 grand prize in CO-OP Financial Services' CO-OP THINK Prize 14 competition.
 
"This is the fourth year of the CO-OP THINK Prize, and this year we have the greatest depth of ideas in competition history," said Stan Hollen, CO-OP Financial Services president/CEO. "The entries can take any form and these ideas--emphasizing technology to educational marketing, including to the very young--reflect the diverse creative thinking we are seeking to inspire."
 
The winner will be announced May 21 at the THINK 14 Conference, set for May 19-22 in New Orleans.
 
The three finalists and their business plan titles are:
  • Sanam Kazi, project coordinator, $377 million-asset Chicago Patrolmen's FCU, "Customizable Website for Financial Education to Credit Union Members;"
  • Christopher Whalen, marketing and e-services specialist, $401 million-asset Connex CU, North Haven, Conn., "Mobile One: A Complete Financial Solution;" and
  • Brett Wooden, senior vice president, marketing and information technology, $191 million-asset Cy-Fair FCU, Houston, "Embrace a Child's Imagination to Develop Financial Literacy."
The three finalists were selected from 20 semifinalists by judges from CO-OP Financial Services and Filene Research Institute. The contestants submitted business plans for ideas to help the credit union movement compete successfully in today's financial services market.
 
Scoring of the winning entry will be based on the critique of judges from CO-OP Financial Services and Filene Research Institute; online voting by credit union employees at www.co-opthink.org; and on-site voting by registered THINK 14 Conference attendees. MasterCard is presenting the $10,000 grand prize.
 
Details on the entries by the three finalists can be viewed online. Use the link.