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Report Did credit crisis hurt lenders accurate pricing

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NEEDHAM, Mass. (3/10/10)--Credit union members, like other consumers, have shifted from spenders to savers during an all-time low interest-rate environment. Now credit unions must prepare to deal with members' price sensitivity on both the deposit and lending sides--while trying to rebuild balance sheets damaged by the economy and a record low interest rate environment. Lenders may have forgotten the importance of accurately pricing products and services in the wake of the credit crisis, according to TowerGroup, a Needham, Mass.-based research and consulting firm. The trend, which is affecting all financial services providers, was noted in a TowerGroup Viewpoint by Bobbie Britting of the firm's consumer lending division (TowerGroup Newsletter March 9). The reinvented, more sophisticated forms of pricing management such as price optimization and profit-based pricing can help institutions adjust to the new economy, Britting said. TowerGroup recommends that lenders make better use of data and analytics to offer the right product and price for each member/customer segment. Key findings include:
* Sophisticated pricing capabilities can take the new account decision from "Yes or no?' to "What level of profitability can the institution except to achieve based on the deal structure?" * In the midst of the recession, many lenders in the U.S. and the United Kingdom abandoned their emerging price optimization capabilities. * The flight of consumer funds into insured deposits continued from early 2008 through 2009 as consumers moved from borrower to saver economy. * Some institutions are winning the race to grow balances, but only a handful of banks are able to forecast consumers' price sensitivity and factor this demand variable into their pricing strategies. * Adoption of sophisticated pricing strategies on both sides of the balance sheet will best position institutions to differentiate on factors beyond pricing. * Financial services institutions in countries that were less affected by the credit crisis-- such as Australia, Canada and South Africa--have continued to adopt advanced pricing and profitability management strategies.

Three men charged with gas pump card skimming

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LOS ANGELES (3/10/10)--Prosecutors Monday charged three men suspected of stealing $2 million by using credit card skimming techniques at gas pumps in the Los Angeles area. The trio--Albert Jose Gonzalez, Josue Gustavo Albizuras and Cesar Vasquez--have pleaded not guilty to nearly two dozen criminal charges of conspiracy, grand theft, identity theft and computer access fraud (L.A. Now March 8). The three were arrested Feb. 25 after a three-year investigation by the L.A. County Sheriff’s Department and Federal Bureau of Investigation. The suspects are being held on bail of $2 million each. They are accused of using skimming devices on pay pumps at gas stations to record credit and debit card information and then downloading the information to computers and other devices to steal money, the newspaper said. Police recovered 10,000 stolen credit and debit card numbers, and computers, digital storage devices, cell phones and other equipment used to make and encode credit and debit cards. The men face a maximum of 20 years in state prison if convicted on all counts.

Illinois CUs new partner to help with Hispanic outreach

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NAPERVILLE, Ill. (3/10/10)--The Illinois Credit Union League (ICUL) and Iowa-based Coopera Consulting have partnered to help Illinois credit unions with Hispanic outreach. The league is collaborating with Coopera Consulting to strengthen its Hispanic outreach program because Coopera has developed a comprehensive tool that complements its REAL Solutions efforts. Dan Plauda, ICUL president/CEO, said he is confident the collaboration will elevate ICUL’s underserved initiatives and help expand credit union service to a segment of the population that needs it most. “Without the benefits of a credit union relationship, these consumers are forced into a fringe economy that preys upon the working class,” he said. Coopera Consulting will help motivate and assist credit unions in successfully serving the Hispanic community. As a REAL Solutions participating league, ICUL is committed to a partnership with the National Credit Union Foundation, to help Illinois credit unions better help underserved populations. The Illinois Credit Union Foundation also has committed to providing grant dollars to help credit unions reach underserved populations and pursue other strategic initiatives. Coopera created the Hispanic Opportunity Navigator (HON), an assessment of the opportunities and challenges in Hispanic outreach that are unique to a credit union. After completing the assessment, a credit union will have the prioritized steps necessary to become the financial institution of choice serving Hispanics within its field of membership, said the league. Depending on the size of the credit union and the breadth of services, the cost of the HON and a year of Coopera’s consulting typically ranges from $400 to $1,300 per month. Illinois credit unions can apply for league grants to partially offset the costs. The Credit Union National Association also has a partnership with Coopera for Hispanic outreach.

IUSA TODAYI Check out cards issued by CUs

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MADISON, Wis. (3/10/10)--Consumers should check out credit cards issued by credit unions to cope with an environment of new credit card fees and rules changes, USA TODAY said Tuesday. In a column titled, “How to cope with new fees, rules changes on credit cards,” Sandra Block, the newspaper’s personal finance columnist, cites a July 2009 survey by the Safe Credit Card Project at The Pew Charitable Trusts. “Check out cards issued by credit unions. Only 11% of cards issued by the largest credit unions charge an annual fee, versus 16% of cards from major banks ...” Block said. “The median annual fee for credit union-issued cards was $15, versus $50 for cards issued by the largest banks, the survey found," she wrote. “Credit cards issued by credit unions also have lower penalty fees,” she added. “The median late payment fee for credit union cards is $20, versus $39 for bank-issued cards, the survey found.” To read the column, use the link.

Robbery bill passes Pennsylvania House

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HARRISBURG, Pa. (3/10/10)--A bill that would expand the definition of a robbery has passed the Pennsylvania House, according to the Pennsylvania Credit Union Association (PCUA), which supported the measure. SB 605, commonly known as the Robbery Bill and sponsored by Sen. Mike Waugh (R-York), passed the state House unanimously, 193-0 (Life is a Highway March 9). The bill would expand the definition of a robbery of a financial institution to include verbal or written threats. The offense for a crime using these methods would be moved from a misdemeanor, with no mandatory sentencing, to a felony. PCUA said that due to a notable increase in robberies, it worked diligently with members of the General Assembly for the legislation.

CU System briefs (03/09/2010)

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* HARRISBURG, Pa. (3/10/10)--More than 70 people met with U.S. Rep. Paul Kanjorski (D-Pa.) Monday night at a special event in Old Forge in Pennsylvania. Event co-chairs included Deb Peters, CEO, Incol CU; John Kebles, retired CEO, Choice One Community FCU; and Jim McCormack, Pennsylvania Credit Union Association (PCUA) president/CEO. Kanjorski updated the group on bills affecting credit unions in Washington. He told the group that the member business lending (MBL) legislation (seeking to raise the MBL cap from 12.25% to 25% of assets) will probably be attached to a futures job bill, and that overdraft and interchange bills will probably not move this year ... * ABERDEEN, Md. (3/10/10)--Thanks to donations from its members and the Barnes & Noble bookstore in Bel Air, Md., Aberdeen Proving
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Ground (APGFCU) collected more than 500 news books and educational items for local schools and charitable organizations as part of the credit union's "Jump Start to Reading" book drive in January. The Aberdeen, Md., based credit union distributed the items in February and early this month to its partner schools in Harford and Cecil Counties, the Spousal Abuse Resource Center, and Faith Communities and Civic Agencies United Homeless Shelter in Harford County. In the photo, APGFCU'S Education Team shows off some of the donated books. (Photo provided by Aberdeen Proving Ground FCU) ... * SPOKANE, Wash. (3/10/10)--Global CU, based in Spokane, and Gonzaga
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Athletics have teamed up for the fifth year to invite fans to Follow the Zags to the WCC Basketball Championships. This past weekend the $370 million asset credit union footed the bill for airfare and hotel accommodations for Mary and William Shelton to attend the championships in Las Vegas. There, the Sheltons cheered on their team with Gonzaga advancing to the title WCC Championship Game, which will air Monday at 6 p.m. on ESPN. From left, Global CU Senior Vice President Ron McKay presents the Sheltons with the trip, which was announced during the final Gonzaga Men's Basketball game of the regular season on March 2. (Photo provided by Global CU) ... * ARNOLD, Mo. (3/10/10)--Eric Setzer, who worked with small credit unions in eastern and central Missouri from April 1992 through August 2002 as a field rep with the Missouri Credit Union Association (MCUA), died Feb. 18 after a five-month battle with a brain tumor. He was 62. In 1993, Setzer helped organize a new credit union--Southwest Counties School Employees CU--in Neosho, Mo. During his tenure at MCUA, he and fellow field rep Rich Wymore conceived the idea of holding Small Credit Union Roundups around the state every fall. In October 1996, Setzer spent three weeks in Swaziland, Africa, working with the World Council of Credit Unions. He is survived by his wife, daughter and father ...