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CU System Archive

CU System

Its Financial Literacy Month

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MADISON, Wis. (4/1/11)--National Financial Literacy Month officially begins today, with credit unions helping celebrate the importance of financial literacy while teaching consumers--especially youth--how to establish and maintain healthy financial habits. For 2011, the Credit Union National Association (CUNA) has designated April as Youth Month, an expansion of its annual National Credit Union Youth Week. This year Youth Week will be April 17-23, but credit unions have the option to celebrate throughout the month. The theme for Youth Month is Money Rocks at My Credit Union (or Moneyrocks@mycreditunion). This means more time for credit unions to join CUNA's National Youth Saving Challenge. Instead of limiting the challenge to Youth Week, credit unions can choose when and how long they will celebrate.. Although many credit unions already have firmed up their plans--those who have participated in the Saving Challenge tend to return year after year--it's not too late to set up special activities at the credit union. Credit unions can sign up throughout the month (participation is free). Visit CUNA's Youth Week webpage (see the link) to get graphics and materials, ideas, and giveaways to make participating easier. Rachael Gregoire at Aurora (Colo.) Schools FCU told CUNA staff how her credit union will celebrate: It is decorating its lobby with inflatable guitars and other music theme decorations. Staff will dress up as rock stars for a day, with senior management dressing up as KISS. The lobby will feature a television with Rock Band, so kids can play and feel like "saving" rock stars. Youth who open an account or make a deposit will be entered in a drawing for an iPod shuffle. The credit union will also have fun prizes, including quarter saver folders and guitar-shaped key chains displaying the credit union's logo and "My credit union rocks!" And finally, a little history about how April came to be designated as National Financial Literacy Month: National Financial Literacy Month was introduced more than a decade ago by the National Endowment for Financial Education (NEFE) to help teach students develop better money management habits. The Jump$tart Coalition for Personal Financial Literacy in 2000 designated April as Financial Literacy for Youth Month. In 2004, the U.S. Senate officially recognized April as National Financial Literacy Month, according to Keystone Extra (April 1) from the Pennsylvania Credit Union Association.. In 2006, the National Foundation for Credit Counseling (NFCC) began promoting the month with an annual survey on financial education and an annual poster contest for students, Be Money Wi$e. Also, Money Management International, a nonprofit credit and debt counseling firm, created FinancialLiteracyMonth.com, which encourages consumers to commit to improving their financial health. Whether the efforts are national, statewide, or local, a sure bet is that credit unions will be behind much of the education this month about financial literacy.

N.J. league sets Bergen Record straight on CUs

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HIGHTSTOWN, N.J. (4/1/11)--A letter to the editor written by the New Jersey Credit Union League and setting the record straight on credit unions' safety and soundness as well as members' high satisfaction level with credit unions was published Thursday in the Bergen Record. The letter, from league President/CEO Paul Gentile, defended credit unions' safety and soundness and reiterated customer/member satisfaction reports showing consumers are confident in doing business with credit unions. It was written in response to a March 6 article, titled "Credit union cutbacks," which hinted that credit unions are slipping in satisfaction and some are starting to charge fees. In his letter, Gentile noted several member satisfaction surveys. A Forrester Research survey indicated that "credit unions were ranked first among financial service institutions and 13th among all companies" and a poll by CNNMoney.com said that 51% of survey respondents chose credit unions as the safest, "once again proving the confidence credit union members have in their financial institutions," he wrote. He also compared fees of credit unions and banks, which indicated most credit unions charge less banks, and noted credit unions have fewer failures than banks--three to 25 so far this year, respectively. Lending remained strong for credit unions. "New Jersey's 208 credit unions also are lending, particularly for small businesses, for which they are true lenders. Their average small-business loan is about $123,000--loans that banks don't want to make," he said.

Corporates present biz plans to NCUA

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WASHINGTON (4/1/11)--Thursday was the deadline for corporate credit unions and the bridge corporates to file their new business plans with the National Credit Union Administration (NCUA), bringing them another step closer to restructuring the corporate system. Plans were due by the end of the day. "NCUA anticipates receiving the required capital plans from each of the corporate credit unions by the close of business today and has begun the review process," said Todd Harper, NCUA director of public and congressional affairs, Thursday afternoon. Bridge corporates were to submit to NCUA their member-approved transition plans to preserve services. Plans were to include transferring members or the bridge operations into a new corporate charter, an existing corporate charter, or another entity, according to NCUA's transition timeline document. Other undercapitalized corporate credit unions were required to submit strategic and capital compliance plans. Corporates with legacy assets remaining on their balance sheets were to include a stress test that identifies a range of potential credit or other losses from legacy assets, the impact on potential losses to capital, and a transparency framework to cultivate credibility and trust with member credit unions. NCUA had "not yet received any plan" related to a possible bid by a group of corporates to acquire U.S. Central Bridge Corporate's products and services, Harper told News Now. The agency has until April 29 to finalize its review of the plans submitted Thursday for any changes and request revision where appropriate. Other significant milestones in 2011 for corporate action include:
* May 31: Corporates present their strategic business and capital compliance plans to their members, with transparency of potential, future other-than-temporary impairment (OTTI) charges related to legacy assets. Their "capital subscription" process will begin, with corporates announcing a targeted goal for capital subscriptions. Those unable to reach their goal will be required to return funds to credit unions who participated in the subscription. They will be required to use escrow accounts to accumulate subscriptions to provide protection to credit unions if sufficient capital doesn't materialize. * May 31: Bridge corporates' leadership teams will initiate their transition plan. Those with a new or existing charter will begin the application and capital subscription process, if needed. They can use escrow accounts through the capital raise period to protect member credit unions. Within a targeted 24 months, NCUA will wind down bridge operations if members have not implemented a collective solution. * Aug. 31: Corporates must have an interim benchmark for evaluating their progress and submit a progress report to NCUA. * Oct. 20: The first capital deadline. The corporates' initial Part 704 capital requirements take effect. For those planning to raise capital to meet required minimums but falling short, all newly subscribed capital can be subject to release. These corporates will be subject to prompt corrective action, which may include filing net worth restoration plans and being subject to the discretionary and mandatory actions of the new rule. * Oct. 20: First capital deadline. Bridge corporates must meet initial capital requirements of Part 704, assuming the bridge transitions to a new charter or another corporate. If the bridge fails to meet the capital required, all subscribed capital will be released and the bridge wound down over time.
Other dates in the transition timeline include Oct. 20, 2012, which is the targeted end of bridge corporate transition period, and Oct. 20, 2013, when the full phase-in of rules on new capital requirements. By that date, Tier 1 capital (retained earnings and perpetual capital only) must equal 4%. For more detail, use the resource link.

Dakotas association welcomes three new affiliates

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BISMARCK, N.D (4/1/11)--Three new South Dakota affiliates have joined the Credit Union Association of the Dakotas (CUAD) : Dakotaland FCU, Huron; Simply Service FCU, Belle Fourche; and Dakota Star FCU, Rapid City. Dan Cumbee, president of $152 million-asset Dakotaland FCU, South Dakota’s third largest credit union, said he understood the importance of unity among credit unions both statewide and nationally. “The credit union industry as a whole is going to evolve and there is no margin for error,” said Cumbee. “By being together we can benefit from each other’s strengths.” Kelli Wold, president of $17 million-asset Dakota Star FCU said that affiliation dues are not just about dollars and cents. “When we were not affiliated, we felt like we were out there by ourselves,” she said Simply Service FCU has already seen the benefit of affiliation by taking advantages of services available through the league. The credit union has participated in Bank Secrecy Act training, strategic planning, compliance support, the Pee Wee and Friends youth program, and website/information technology services available through CUAD and its service corporation. CUAD President/CEO Robbie Thompson welcomed the three new affiliates. “We can’t change history,” Thompson said. “We can simply strive to improve every day, and I think these credit unions see that happening and want to help shape the future of their association and their industry.” “We have power in numbers,” said Doug Thompson, CUAD board chairman. “As credit unions we don’t always agree on everything, but we know we are stronger together. Hopefully other credit unions will step up and be part of the Association as well.”

WOCCUs Crear notes five global trends in interview

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MADISON, Wis. and SAN DIEGO (4/1/11)--World Council of Credit Unions President and CEO Peter Crear recently discussed five emerging trends that will affect the global credit union movement with Mike Lawson of CU Broadcast, an online interview show. The five “mega-trends” were identified at the recent World Council of Credit Unions (WOCCU) G-10 meeting (News Now March 11). Here is Crear’s perspective on each of the five trends:
* A greater need for urbanization: Crear tied this trend directly to better serving the younger generation throughout the world. As people migrate to cities—the United Nations predicts that with 40 years 92% of the world’s population will occupy urban areas. That migration will be fueled by the younger generation. “What we’re after is to get better representation with younger people … and secondly, pushing that string uphill a little bit, getting better established in areas where don’t traditionally have the strongest relationships, and that’s in urban areas.” * An increasing microfinance malaise: Microlenders have lately earned a “black eye” in some developing countries, with commercial firms reaping profits on the impoverished, Crear said. For better or worse, in many parts of the world, credit unions are painted within the broad brush strokes of micro lenders. “Therein lies a problem for us,” Crear said. “We have to separate ourselves and continue to help people of modest means because that’s where our future lies.” Crear cited the need for better metrics and standards of behavior within the micro-lending sector. *An uptick in transactional mobility: Again, Crear tied mobile communication to the younger generation. “If you’ve got the younger generation in credit unions, you’ve got to go mobile,” Crear said. “We’ve got to attract young people and get mobile at the same time, because that’s the wave of the future.” But for WOCCU and the global credit union movement, going mobile is sometimes simply the most effective way to serve members that live in outlying areas. Crear called the cell phone “a credit union in your hand.” * A push for membership growth: Again, credit unions must get better at attracting young people, but not just as members, he said. The average attendee at WOCCU events is probably late middle age. “I love our volunteers, but that tells you we’re missing that younger element we need to bridge to the future with,” Crear said. * Fostering the middle class. For the first time, about half the world is in the middle class, Crear said. That’s the good news. Most of the rest of the world lives on about $2 a day. The challenge for credit unions is meeting the needs of both groups. “We have to do what we’ve always done: Help those that are living on two bucks a day,” Crear said. “We also have to continue to help those in the middle class. We were a big component of their reaching the middle class.”

Natural disasters cost CUNA Mutual roughly 1.3 M in 2010

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MADISON, Wis. (4/1/11)--The recent tsunami and earthquake in Japan proves that disasters can strike quickly and without warning--an unfortunate element of surprise that U.S. credit unions know well. of. In 2010, CUNA Mutual Group paid out an estimated $1.8 million in claims to credit unions as a result of natural disasters, representing an estimated 113 claims. On a worldwide basis, the disaster in Japan appears to be part of calamitous trend. In 2010, losses from catastrophes increased by 59% for insurers from the previous year, according to a Swiss Re report (PropertyCasualty360 March 30). Insurance claims from 304 catastrophe events in 2010 cost the overall property and casualty insurance industry in excess of $43 billion, compared with $27 billion in 2009, according to the Zurich, Switzerland-based insurer. However, the overall economic loss from catastrophes was much worse at $218 billion. Catastrophes also claimed 304,000 lives. Natural catastrophes accounted for most of costs to insurers--about $40 billion--Swiss Re said. By comparison, man-made disasters cost about $3 billion. Swiss Re said 2010 was the seventh costliest year for insurers. The costliest? The year of Hurricane Katrina--2005--when catastrophe losses surpassed $117 billion. Earthquakes accounted for the most losses in 2010. The earthquake in Chile cost insurers $8 billion and claimed 562 lives, while New Zealand’s earthquake cost insurers $4 billion with no fatalities. The massive Tohoku earthquake that struck Sendai, Japan, on March 11 is expected to trigger significant insured losses, Swiss Re notes. CUNA Mutual noted that its numbers are based on claims from its property and casualty customers, about 80% of credit unions. The company paid $26,000 in disaster claims so far in 2011. Catastrophe modelers have given insured loss estimates from the event as high as $30 billion. Hurricane season begins June 1, and CUNA Mutual is prepared for what could be another active hurricane season, said Phil Tschudy, CUNA Mutual media relations manager. To help credit unions prepare for a potential disaster, CUNA Mutual Group’s next Credit Union Protection Webinar, set for 10 a.m. CT April 13, will focus on disaster preparedness. The session is part of the webinar series developed exclusively for the insurer’s Credit Union Bond policyholders, said Brad Mundine, senior manager of credit union protection risk management at CUNA Mutual.

PSECUs interchange site can be used by Pa. CUs

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HARRISBURG, Pa. (4/1/11)--PSECU in Harrisburg, Pa., has unveiled a website for consumers to gear up grassroots efforts to rally against the federal government’s proposed change in debit-interchange fees. The site, Don’t Lose Your Shirt, provides consumers with facts and figures about the negative consequences that the Federal Reserve’s interchange proposal will have on them. The $3.64 billion-asset credit union’s site also provides videos and links for consumers to contact their lawmakers. Use the link (Life is a Highway March 31). As of Thursday, the site had generated 2,100 hits. PSECU is offering the website to all Pennsylvania credit unions to use for their own interchange efforts. “Our goal in creating the website was to provide a tool to educate members about the importance of this issue,” said PSECU President Greg Smith. “Interchange is crucial to credit unions’ ability to offer a debit card program, and given the urgency of the situation, it’s our hope other credit unions will use the site as well.” The Credit Union National Association (CUNA) opposes the cap on interchange fees and has told federal lawmakers that such action would harm consumers by driving up costs of debit cards, limiting consumer options, and harming competition and technological innovation. Interchange fees allow business costs, including the risk of consumer nonpayment, to be shared by the payments participants, CUNA said. For more information, contact Nate Muniz at nmuniz@psecu.com.

What does Mazuma mean CUs ad campaign knows

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KANSAS CITY, Mo. (4/1/11)--A new advertising campaign/contest by Kansas City-based Mazuma CU focuses on pronouncing the credit union's name to generate more awareness of the 62-year-old credit union. "Our team members are asked all the time, 'What does Mazuma stand for?' 'What does it mean?' and 'How do you say it correctly?" said Rob Givens, president/CEO of the $420 million asset credit union. The "Pronouncing Mazuma" campaign answers the questions using billboards, radio commercials, social media, and a microsite, www.saymazuma.com, as well as the Mazuma Mystery Box Challenge. The ads use a phonetic approach. Billboards prominently display: Mazuma [Muh-zoo-muh] with dictionary-style definitions of the credit union's products and services, such as Mobile Banking [on-ur-phone] and Better Experience [warm-fuh-zees]. "Mazuma" is Yiddish slang for "money," Givens said. The credit union's radio commercials portray a humorous play-on-words so consumers get the point: that Mazuma means money. The ads depict a member and friends exchanging quips such as "Put your Mazuma where your mouth is," and "Mazuma doesn't grow on trees." The ads end with the tagline, "Pronounced Better Banking," which declares Mazuma's commitment to a better banking experience. Mazuma's microsite provides more about the credit union's history, products and services, and the credit union difference. Its Mazuma Mystery Box Challenge displays a digital box with a random item locked inside. Visitors are asked to guess what's in the box. The site reveals clues three times a week to lead consumers to the correct answer. Winners of the challenge will win prizes such as an iPad, Xbox 360 or an iPod Touch. The contest ends April 15. "The contest is a way to interact with consumers and keep them coming back to the microsite to learn more about credit unions and more about Mazuma," said Givens. The campaign was created by Beyond Marketing LLC, said the credit union.

Texas foundation funds 100 webinars for Fin Lit Month

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FARMERS BRANCH, Texas (4/1/11)--The Texas Credit Union Foundation (TCUF) is providing grant dollars to the Consumer Counseling Service Center of Greater Dallas (CCCS) to help CCCS offer 100 free webinars through April in honor of National Financial Literacy Month. Consumers who attend at least three webinars will have a chance to win one of three $100 gift cards, TCUF said. The CCCS webinars will focus on personal finance topics including information for consumers on recession proofing their finances, surviving a financial crisis, credit scores, basic money management, budgeting and savings goals, foreclosure prevention, identity theft, couples and money, and financial planning for milestones such as getting married, buying a home or having a baby. “Collaborating with CCCS is a natural fit, as our organizations have a like-minded mission of empowering people to improve their financial well-being,” said Courtney Nickels, NCUF executive director. She noted the outreach initiatives “are aimed at lifting Texas families out of financial crisis and on the path toward financial freedom.” TCUF also is partnering with CCCS and The Texas Credit Union League to host “Your money, Your Matters,” a live, weekly blog talk-radio program that informs and educates the public on issues related to personal finance--such as asset building, retirement planning and investments. The program also addresses current issues--including the economy, financial marketplace and credit unions in general. Throughout April, the program’s discussion will focus on National Financial Literacy Month.

CU System briefs (03/31/2011)

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* GRAND RAPIDS, Mich. (4/1/11)--A woman was sentenced to five years of probation and ordered to repay $232,000 that she took from her parents' account at Grand Rapids, Mich.-based Lake Michigan CU to "invest" in an Internet Nigerian scam. Mary Davis, 57, is the primary caretaker of her parents, Robert and Corinne Davis, age 89 and 86, respectively. Davis told the Kent County Circuit Court Judge Donald Johnston she thought she was doing the right thing. A friend in Indiana was in serious financial trouble and convinced the daughter to invest in the scheme. The money was wired from accounts at the credit union to overseas accounts. She originally was charged with two counts of embezzlement but she pleaded guilty to one charge in a plea bargain (mlive.com and Grand Rapids Press March 30) … * INDIANAPOLIS and WASHINGTON (4/1/11)--Mike Phipps, left, president of Evansville (Ind.) Teachers FCU, received the 2011 Buck Levins
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Award from Mike Mercer, president of the Georgia Credit Union Affiliates and a trustee of the Credit Union Legislative Action Committee (CULAC), at the Credit Union National Association's (CUNA) Governmental Affairs Conference last month. The award recognizes a league, credit union or individual whose efforts in the political arena have contributed to elevating the political presence of credit unions at the state or national level. Phipps received the award partly for his efforts with two congressmen after a representative in the credit union's district voted against HR 1151, the Credit Union Membership Access Act. Phipps' support for U.S. Reps. Brad Ellsworth (D) and Larry Buschon (R) "provide a tremendous example of political involvement to further credit union interests," said Indiana Credit Union League President John McKenzie. The award is named for Buck Levins, who was CUNA chairman during the push to pass HR 1151. (Photo provided by the Indiana Credit Union League) … * PHOENIX (4/1/11)--Vantage West CU in Tucson, Ariz., was presented
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the Arizona Credit Union League (ACUL) & Affiliates' seventh annual Indirect Lender of the Year Award for 2010. The award recognizes progress in a credit union's indirect lending program and substantial and measurable improvements in its numbers. Although auto lending has decreased, Vantage West continues to provide loans through Credit Union Advantage's indirect lending platform, the league's indirect lending arm. The credit union has provided indirect loans for about 15 years and has received the award twice. From left are Robert Ramirez, Vantage West president/CEO; Vantage West staffers Rocky Chandler, Andrew Gosewisch, Cheryl Garrett, Ed Lundgren, Beth Anderson and Bryan Brown; Dixie Hill of ACUL CU Advantage; Vantage West CU staffers Jane O'Regan, Michelle Hunter and Rene Almazan; and Larry Jones, ACUL CU Advantage.(Photo provided by the Arizona Credit Union League) … * BRIDGEPORT, Conn. (4/1/11)--More than 375 students from 10 high schools throughout Connecticut converged Wednesday on Housatonic
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Community College, Bridgeport, Conn., to try their hand at living within a budget. More than 50 volunteers from the state's credit unions and local businesses helped students through choosing housing, transportation, clothing, entertainment and other life areas affecting their lives as young adults. The Financial Reality Fair received kudos from Bridgeport Mayor Bill Finch, who said, "It's great to see these students exposed to these choices at this point in their lives," and from state Sen. Anthony Musto (D-22), who noted, "These inexperienced kids are facing tough choices and making consequential decisions. It's a great experience teaching them what options they will be facing as they enter the adult world." Shown here are, from left, Finch, Musto, and Tony Emerson, president/CEO of the Credit Union League of Connecticut. (Photo provided by Credit Union League of Connecticut) …

NCUA panelists discuss corporates future at meeting

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ATLANTIC CITY, N.J. (3/31/11)--The future of the corporate credit union network and Tier 1 corporate mergers were among the topics addressed by a panel at the 2011 Credit Union Reality Check in Atlantic City, N.J., last week. The event was sponsored by the New Jersey Credit Union League and some of its affiliates and attended by 194 credit union representatives from six states (The Weekly Exchange March 21). The panel featured Scott Hunt, director of the National Credit Union Administration's (NCUA) Office of Corporate Credit Unions; Charles "Chuck" Furbee, CEO of Members United Bridge Corporate; Robert Fouch, CEO of Corporate Central; Jay Murray, CEO of Mid-Atlantic Corporate; and Lee Butke, CEO of Corporate One. NCUA's Hunt told the group that allowing a Tier 1 merger between two corporates "would run afoul of our duties. Our board has categorically said no." A Tier 1 merger would "build the biggest competitor within the corporate system and we will not do that. The NCUA will not build a bigger corporate when [the bridges] are under control," he told attendees. However, he did not rule out the possibility of NCUA allowing bridge corporates that successfully gain independent status to merge, the league reported. The corporate CEO panelists said that one of the keys to the future of corporate credit unions was the viability of the corporates' recapitalization plans to move forward. Part of the plan for moving forward and rebuilding a strong, viable corporate includes asking its members to contribute new capital, the group said. Hunt reiterated NCUA's position that as regulator it would take all steps necessary to preserve a well-functioning system of corporate credit unions and to protect the assets of natural person credit unions and their members during the ongoing broader financial market dislocation.

MSNBC ATM-fees column strikes chord with readers

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NEW YORK (3/31/11)--A column in a popular MSNBC blog chronicled the demise of free checking services at banks, noted that banks' ATM fees are soaring, and suggested that "there's no reason not to open a credit union account." The column struck a chord with readers and generated 542 comments, with many readers extolling the virtues of credit unions. Bob Sullivan's "The Red Tape Chronicles" blog (March 29) discussed several traps banks are setting to generate fees they would lose in the debit interchange reform. He adds them up and estimates that five trends could cost a consumer $253 annually. The five trends:
* ATM fees are soaring to $5, $6 and $7 per withdrawal; * Consumers are running afoul of "movable" minimum balances that result in fees; * Banks are tricking consumers into opting into services consumers don't need (he named overdraft protection as an example); * Name changes in banks mean an acquisition--and new fees and restrictions; and * Minimum requirements on accounts mean parking money where it doesn't earn as much as an account with higher interest.
The point of the column, Sullivan said, is to get consumers to consider banking alternatives. "Credit unions and small banks still offer really free checking. In fact, BankRate.com just released a survey showing 38 of the 50 largest credit unions have free checking with no strings attached, and about half of them don't even require a minimum balance. Their ATM fees are, on average, half of traditional bank fees and one-quarter of the large credit unions charge no ATM fees at all. "That means there's no reason not to open a credit union account, even if it merely serves as a secondary checking account," Sullivan concluded. Several readers swore they would take their money out of their bank and put it into a credit union. Others commented that they had already switched to credit unions and were happy about the switch. "Best decision I ever made," said one reader. Credit unions are "the last of decent banking," shouted another in all capital letters. "Love love love my credit union!" was a third. Other readers told about the credit union difference and credit unions structure and why credit unions have tax-exempt status. Use the link to read the full blog and the 542 comments from readers.

CUNAs HandFF Radio show to mark 200th broadcast Sunday

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WASHINGTON (3/31/11)--This Sunday, April 3, will mark the 200th broadcast of Home & Family Finance Radio, the weekly personal finance radio show that the Credit Union National Association (CUNA) launched to help foster financial literacy and build the credit union brand. The one-hour program airs Sundays on the Radio America network and is “presented by America’s credit unions.” Each program offers three to five interview segments featuring experts on a wide range of personal finance topics, and responds to questions e-mailed from listeners. The show, which is aimed at a consumer audience, was launched in September 2006 and began airing in 29 media markets. Today it airs in nearly 60 markets nationwide, including Washington, Phoenix, St. Louis, Cleveland, Portland, and Sacramento. Home & Family Finance Radio is also carried each week by the American Forces Radio Network, which beams it to U.S. military bases around the world. The show’s podcasts are downloaded more than 5,000 times a month from CUNA's and Radio America’s websites, iTunes and other podcast libraries, and its Twitter page has more than 700 followers. “Each week our program addresses the kinds of pocketbook issues that people discuss around the kitchen table--how to save money and be smarter about their family finances,” said Mark Wolff, CUNA senior vice president of communications and the show’s executive producer. “Over the course of 200 broadcasts, we have provided an extraordinary amount of practical information and guidance to help with basic money management, and in doing so, we are building on the bond of trust that consumers feel toward credit unions. Reaching our milestone 200th broadcast is evidence that our show is resonating with its listeners,” he said. Wolff credited the show’s producer, Marta Trinkl; its host, veteran broadcast journalist Paul Berry (whom credit unions also know as emcee of CUNA’s Governmental Affairs Conference or GAC) ; and the staff of CUNA’s Center for Personal Finance for the work they do each week to identify topics, line up experts as guests and organize program segments. He also thanked presenting sponsor Co-op Financial Services and national sponsors Cabot Creamery Cooperative and the Defense Credit Union Council for financial support that has enabled CUNA to produce the show. Last year Home & Family Finance Radio was considered for a Peabody award. Prominent guests who have appeared on the program include House Financial Services Committee members Spencer Bachus (R-Ala.), (now its chairman); Carolyn Maloney (D-N.Y.), and Judy Biggert (R-Ill.); NBC "Today Show" personal finance editor Jean Chatzky; ABC "Good Morning America" consumer correspondent Elisabeth Leamy; MSN Money personal finance columnist Liz Pulliam Weston; Kiplinger’s Personal Finance Magazine personal finance writer Janet Bodnar; Los Angeles Times’ columnist Kathy Kristof; Consumer Federation of America Executive Director Stephen Brobeck; National Credit Union Administration (NCUA) Board members; the Comptroller of the Currency; and senior officials from the U.S. Treasury and the Internal Revenue Service. Over the years CUNA has also produced the show live from annual meetings of the Ohio, Georgia, and Texas credit union leagues, the CUNA Marketing & Business Development Council, and the CUNA GAC. Guests on this Sunday’s 200th broadcast, which focuses on April as financial literacy month, include NCUA Board Member Gigi Hyland on the importance of financial education; Jeannine Glista, co-creator and executive producer of Public Broadcasting System’s Biz Kid$ on teaching kids about money and business; consumer advocate Remar Sutton on the social cost of financial illiteracy; and Pam McClelland, senior policy analyst, Office of the Deputy Under Secretary of Defense, on the personal finance issues currently having the biggest impact on military personnel.

CU System briefs (03/30/2011)

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* SPRINGFIELD, Mass. (3/31/11)--Robert Koss, 68, of Ludlow, Mass., a former director of Western Mass. Electric Co. CU (WMECO), was sentenced Tuesday to four years' supervised probation for embezzling more than $225,000 from the credit union between 1999 and 2006, when he retired. The probation includes one year of home confinement. Koss pleaded guilty last year to embezzlement and filing a falsified tax return from the credit union, which he ran for three decades (The Republican March. 30). Judge Michael A. Ponsor also ordered Koss to write a letter of apology to the credit union and pay full restitution within 30 days. Most of the funds have been repaid. The judge said a younger person would have received a two-year sentence. However, his decision considered that Koss is confined to a wheelchair … * WHITEFISH, Mont. (3/31/11)--A former branch manager of Whitefish (Mont.) CU has pleaded guilty to embezzlement and money laundering after she admitted stealing $676,000 from the Polson branch of the credit union, which she managed. Kathleen Louis Sammons, 52, of Charlo, Mont., entered her guilty plea Tuesday in Missoula federal court before U.S. Magistrate Jeremiah C. Lynch. Sammons told investigators she used the stolen money to donate to local charities, buy a house, pay for high school sports banquets and trips, and cover thefts of cash from other employees at the $1.2 billion-asset credit union, according to documents submitted by the U.S. District Attorney for Montana (dailyinterlake.com and Associated Press March 30) … * COLORADO SPRINGS, Colo. (3/31/11)--Randy Bernstein has been promoted to president of Ent FCU from his position as the credit union's executive vice president. Bernstein has been with the Colorado Springs, Colo.-based credit union for 14 years, first as its senior operations executive. He has 34 years of credit union experience. Charles Emmer, Ent's CEO, said the promotion is to acknowledge "the importance of [Bernstein's] role in running the day-to-day operations of the credit unions." Bernstein will continue his oversight responsibilities for operations, lending, information technology, business and corporate banking, and Ent Investment Services and Wealth Management. He previously directed operations at Bethpage FCU, Long Island, N.Y., and served as vice president of D. Hilton Associates Inc., a credit union management and research consulting firm … * PORTLAND, Ore. (3/31/11)--Jim McCarthy has been named president/CEO of Northwest Resource FCU, Portland, Ore., effective April 4. For the past eight years, McCarthy served as vice president of strategic planning at TwinStar CU in Olympia, Wash., where he oversaw asset liability management, new program development, mergers, member/customer information files, and the credit union’s annual strategic business plan. McCarthy was employed by TwinStar CU for 13 years. He will be the fifth CEO in Northwest Resource's 76-year history … * WARMINSTER, Pa. (3/31/11)--Theresa Chletcos has retired from the board of Freedom CU, Warminster, Pa., after 39 years of service. Her retirement was effective Dec. 31. She served as both vice chair and chair during her time on the board. After obtaining her bachelor’s and master’s degrees in education, Chletcos began working for the Philadelphia School District in 1934 and was promoted to elementary school principal in 1952. She also taught at St. Joseph University and LaSalle University. Freedom CU has more than $470 million in assets … * DOVER, Del. (3/31/11)--Mary Frey-Foss, director of Dover (Del.) FCU for 43 years, has retired, announced the board chairman, Charles W. Miller, at the $330 million asset credit unions' annual meeting on March 19. Frey-Foss served as secretary to the board during most of her tenure. She served on numerous committees, including the building, executive, membership, personnel policy, youth membership, 401(k), marketing, and product and select employee group development committees. Frey-Foss helped shape the credit union's growth from one office at Dover Air Force Base to seven locations through the state. She also was selected twice to represent the credit union as an alternate delegate to the Delaware Credit Union League …

Ohios new regulator meets with league committee

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COLUMBUS, Ohio (3/31/11)--Ohio Division of Financial Institutions Superintendent Chuck Dolezal and Deputy Superintendent for Credit Unions Mike Wettrich recently met with the the Ohio Credit Union League’s Ohio Government Affairs Committee.
The Ohio Credit Union League’s Ohio Government Affairs Committee met with state financial institution regulators on March 17 to discuss issues of impact to credit unions. Pictured from left: Catherine Herring, CEO of Communicating Arts CU, Cincinnati; Jennifer Ferguson, CEO, Bay Area CU, Oregon; Chuck Dolezal, Ohio Division of Financial Institutions Superintendent; Steve Behler, president/CEO, Kemba CU, West Chester; and Mike Wettrich, Deputy Superintendent for Credit Unions. (Photo provided by the Ohio Credit Union League)
During the hour-long meeting, Dolezal and the committee discussed small business and student lending, opportunities to work with the department on partnership opportunities and the state budget deficit and its potential impact on credit unions (Ohio Credit Union League eLumination March 23) Dolezal emphasized the importance of credit union board education and oversight as it applies to CAMEL rating, said the league. He acknowledged credit unions’ difference in structure and mission, and said he was impressed with the capital levels of Ohio credit unions and their loyalty to the communities they serv. “Meeting with Superintendent Dolezal was an excellent opportunity to discuss emerging issues with him that could have long-term effects on credit unions,” said Paul Mercer, president of the league. “We look forward to continued meetings regarding small business and economic initiatives, and burdensome laws and regulations.”

Award winners announced by Ohio league

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COLUMBUS, Ohio (3/31/11)--The Ohio Credit Union League announced its Leadership Recognition Awards for 2011. The awards are the state’s top awards for leadership, political action, youth financial education, social responsibility, philosophy and marketing. Eileen Meeker, vice president of business development for AurGroup Financial CU, Fairfield, was named Professional of the Year (eLumination Newsletter March 23). Tom Furrey, CEO of Western CU, Columbus, and Greg Kidwell, CEO of Members First CU, Columbus, were winners of the Claude Clarke Political Inspiration Award. Classic FCU, Amelia; Fiberglas FCU, Newark; and Harvest FCU, Heath, won the Desjardins Youth Financial Education Award for their leadership on behalf of youth financial education. Wayne County Community FCU, Smithville, and KEMBA Financial CU, Gahanna, received the Dora Maxwell Social Responsibility Award for their campaigns to assist local residents and organizations. Communicating Arts CU, Cincinnati, received the Louise Herring Award for Philosophy in Action for extraordinary practical applications of the people helping people philosophy. Ohio University CU, Athens, and Ohio HealthCare FCU, Dublin, won the Cutting Edge Marketing Brilliance Award for agency and non-agency entries. The winners will be honored at the league’s annual conference, InVest48, April 5-6.

ASI FCU named SBA regional champion

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HARAHAN, La. (3/31/11)--Mignhon Tourné, CEO of ASI FCU, Harahan, La., has received a regional Financial Services Champion of the Year Award from the Small Business Administration (SBA). ASI was recognized for its commitment to serve the underserved, promote economic empowerment, and provide financial products and services to people with little or no credit at affordable rates (eNews March 30). With 14 branches, one dedicated to low-income Spanish-speaking members and one dedicated to low-income Vietnamese-speaking members, the $293 million-asset ASI remains true to its mission by concentrating efforts in neighborhoods and communities plagued by entrenched poverty, said the Louisiana Credit Union League. After Hurricane Katrina in 2005, ASI FCU under Tourné's leadership, deployed almost $20 million in grants and provided 0% to 4% interest loans to disadvantaged small-business owners. The credit union is an approved SBA lender and has piloted its own Web-based peer-to-peer micro-loan fund in the past. National Small Business Week 2011 will be celebrated during the week of May 15. Tourné and the other business champions will be honored at a reception at the Louisiana Governor’s Mansion. During the week, SBA will highlight the impact of outstanding entrepreneurs, small-business owners and entrepreneurs, and those who support and champion small business nationwide.

Cameroon CUs membership quadruples

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MADISON, Wis. (3/31/11)--Cameroon’s credit union movement has taken off, growing from 78,000 credit union members in 1993 to more than four times that figure by 2010. With 212 credit unions, a combined membership of 336,187 people and $240 million (all amounts are in U.S. dollars) in assets, the Cameroon Cooperative Credit Union League (CamCCUL) has a long history of success in the Central African country of Cameroon, said the World Council of Credit Unions (WOCCU). Adherence to credit union philosophy and a continued dedication to member service has helped the small movement prosper.
Click to view larger image Praxedes Banseka of the Cameroon Cooperative Credit Union League visits with World Council of Credit Unions (WOCCU) President/CEO Pete Crear on a recent visit to WOCCU headquarters.
“Our smallest credit union has $4,000 in assets, and our largest has $34 million,” said Praxedes Banseka, a CamCCUL field supervisor, on a recent visit to WOCCU headquarters in Madison, Wis. “We don’t care how much money a credit union has, as long as it’s serving its members well.” CamCCUL was founded in 1968 and worked closely with WOCCU in the 1980s and 1990s to implement several programs funded by the U.S. Agency for International Development. The programs provided technical assistance to CamCCUL that furthered its institutional and management development, created a central liquidity facility, started a small farmer production credit program, expanded credit unions to new areas and provided the first computerized systems to Cameroon’s movement. WOCCU’s programs in Cameroon ended in 1994. CamCCUL became a direct WOCCU member in 2007. "The Cameroonian credit union system represents one of the great success stories in WOCCU’s 40 years,” said David Grace, WOCCU senior vice president of association services. “Based on long-term and intensive development programs in the 1980s and early 1990s, a strong foundation was established. We’ve seen this in many other countries, and that positions credit unions for strong membership growth in subsequent years.”
Click to view larger image More than 5,000 help celebrate International Credit Union Day in Cameroon. Cameroon’s credit union movement has taken off, growing from 78,000 credit union members in 1993 to more than four times as many members by 2010 (Photos provided by the World Council of Credit Unions).
Cameroon has a history of staging some of the world’s largest International Credit Union Day celebrations, turning out more than 5,000 people to march in streets of local communities with thousands more observing. Collaborative radio and TV ads, cell phone programs and shared branching services have helped the movement grow. Cameroon’s credit unions also face many challenges, including competition from banks and informal lending groups. While 95% of the credit unions that are computerized share a common platform operated by CamCCUL, many small credit unions still are not computerized. “We don’t have the equipment or the infrastructure in place to provide Internet access in many areas,” Banseka said. Banseka, the daughter of a Cameroon movement founder and a 13-year credit union veteran herself, is studying in the U.S. as part of the U.S. Department of States Hubert H. Humphrey Fellowship Program. The 10-month-long program takes future leaders from foreign countries and provides experiences in the U.S. During this time, Baneska has completed an internship at Gabriels Community CU in Lansing, Mich., and plans to complete another internship in Minneapolis before returning to Cameroon.

Federation launches first of regional conferences

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NEW ORLEANS (3/31/11)--The National Federation of Community Development Credit Unions last week launched its new series of regional conferences, Credit Unions and Community Development: Lessons and Impact, in New Orleans. The Mid-South Regional Conference was organized in collaboration with the Louisiana Credit Union League and Metairie, La.-based Jefferson Financial CU. The event was held at the credit union. It was designed to help credit unions:
* Learn about innovative programs and products to meet the needs of low and moderate income consumers; * Identify resources to implement high-impact programs; * Develop community partnerships to leverage and expand credit union service to the underserved; and * Better understand benefits of community development financial institutions (CDFI) certification and the low-income designation.
Click to view larger image Speaking at the National Federation of Community Development Credit Unions’ first regional conference in New Orleans are, from left, Connie Major, executive vice president of the Louisiana Credit Union League; Kristen Reedy, vice president of operations at Jefferson Financial CU, Metairie, La.; and federation President/CEO Cliff Rosenthal. (Photo provided by the Louisiana Credit Union League)
"Among our primary goals for these regional conferences is to reach out to credit unions who might not consider themselves CDCUs, but who may in fact be doing a lot to serve their low- and moderate-income members," said federation President/CEO Cliff Rosenthal. "Often, these so-called 'mainstream' credit unions are doing outstanding community development work in their communities, and our hope is that these meetings will help us identify those that are already engaged in this work and provide them with additional resources and information to better meet their mission," he added. Joe Arnold, chief financial officer at Carter FCU, a $200 million asset credit union in Springhill, La., said he learned "that low-income-designated credit unions and CDFI-certified credit unions can be exempted from the member business lending (MBL) cap. We've been actively involved in the industry's efforts in increasing the MBL cap, but little did I know that our credit union already possesses the ability to increase MBL through our CDFI certification." The conference also included a track on foreclosure prevention strategies. League President/CEO Anne Cochran said the turnout for the first joint venture "was overwhelming and the presentations have generated a lot of interest in moving forward."

CUNA on small business radio show Saturday

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NEW YORK (3/30/11)--The Credit Union National Association (CUNA) will be among those discussing small business lending issues in a live radio broadcast Saturday afternoon from "The Small Business Authority Studio" at 77WABC Radio in New York. Bill Hampel, CUNA senior vice president of research and policy analysis and chief economist, will participate in the program, "The Small Business Authority Hour," which airs Saturday at 4 p.m. ET, following the Monica Crowley show. The program is hosted by Barry Sloane, CEO/president/chairman of Newtek Business Services, The Small Business Authority, which sponsors the program. The company is a CUNA Strategic Services provider. Joining Hampel and Sloane will be Michael Minerva, senior vice president and Regional Market Credit Executive managing Capital One's market credit executives in New York, New Jersey, Maryland and Virginia. "The credit markets are still very tight," said Sloane. "We are experiencing the deleveraging of the world and U.S. economy. Without credit expansion, the economy has headwinds that are stiff and create conditions that make it difficult to grow a small business in," he added. The show will focus on the recent history, current and future conditions of the credit market for small business, he said. Also, the panel will discuss what small businesses should do to plan for the future and address how this will affect the small business economy and government policy, Sloane added. Listeners nationwide can tune in at www.wabcradio.com and click "listen live." The panel will take questions from independent business owners during the live broadcast from 4;20 p.m. to 5 p.m. Listeners can call 800-848-9222 (WABC) to ask a question. CUNA supports bills in Congress that would raise credit unions' member business lending cap to 27.5% of assets from 12.25%. Raising the cap would create 140,000 new jobs and provide $13 billion in new small business loans, at no cost to the taxpayer.

CU System briefs (03/29/2011)

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* CONYERS, Ga. (3/30/11)--A man suspected of holding up Georgia's Own CU March 9 and tying up members and employees with duct tape in a back room before leading police on a high-speed car chase was indicted Monday in a federal district court in Atlanta. Cepeda Broughton, 40, was indicted on a charge of possession of a firearm by a convicted felon in the armed robbery. He allegedly entered the credit union, ordered three employees and a member into a back room where he bound them with duct tape, and forced a fourth employee to open the vault and give him money before binding that employee with duct tape. The robber escaped with $140,000 in a stolen vehicle, but a member outside the credit union called 911. The car chase that ensued caused multiple traffic accidents before the getaway car was stopped. Broughton was arrested after a chase into an apartment complex (Rockdale Citizen March 28) … * ST. PETERSBURG, Fla. (3/30/11)--PSCU Financial Services, a credit union service organization (CUSO) based in St. Petersburg, Fla., has issued a $21.3 million dividend for its member owners for 2010. It also passed along $6.5 million in savings in the form of price cuts and rebates, and saw a 6.3% increase in net income and revenue, the CUSO said. In addition, it also paid $8.9 million in revolving funds due to member-owners in December--four months early. The CUSO also saw a 6% growth in debit/credit/prepaid and online bill payment transactions; a 4.9% expansion in contact center volumes; and 1.3 billion transactions. It did so by reducing service billings, issuing an invoice rebate and trimming $10 million from operational costs, said Craig Esrael, president of First South Financial, Bartlett, Tenn., and chairman of PSCU Financial Services' board … * LONG ISLAND CITY, N.Y. (3/30/11)--The headquarters of United Nations FCU (UNFCU) has earned the U.S. Environmental Protection Agency’s (EPA’s) ENERGY STAR certification, the national symbol for protecting the environment through superior energy efficiency. ENERGY STAR certification signifies that Court Square Place, a 16-story, 274,000-square foot facility, performs in the top 25% of similar facilities nationwide for energy efficiency and meets industry standards for indoor air quality Court Square Place serves as headquarters for UNFCU on seven floors; the balance is occupied by four additional tenants, including the United Nations … * INDIANAPOLIS (3/30/11)--Financial Center, an Indiana credit union, is teaming up with local charities to sponsor ShiftIndiana.com, a website that promotes charitable giving and volunteerism in the state. Financial Center is the chief driver behind Shift Indiana and is collaborating with individuals and charitable organizations to create content on the site. Readers are also invited provide content by telling how they are changing Indiana through their volunteerism and charitable efforts …

Budget layoffs prompt AFCU site to help educators

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AUSTIN, Texas (3/30/11)--With many of the schools within its membership affected by state budget-crisis layoffs, A+FCU, Austin, Texas, has launched a website to help members ease the burden of financial difficulties. The site, mydream-job.org, offers free financial educational resources, including guidance on stretching a budget during unemployment, one-on-one financial coaching, lending assistance and advice on how to become one’s own boss. “The new website is another way of ensuring those in need have a support system in place, said Kerry A. S. Parker, CEO of A+FCU. “It allows us to give back to the community that has been integral in making us who we are today.” A+FCU was created by 50 Austin Independent School District teachers in 1949. Parker will appear on FOX-7’s “Good Day Austin” on April 12 to discuss mydreamjob.org and a workshop series, “Surviving My Layoff,” which begins April 21. To visit the website, use the link.

Members debt is deep Schenk tells CU Reality Check

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ATLANTIC CITY, N.J. (3/30/11)--Although the U.S. economy is improving, credit unions must confront the reality that their members’ debt is deep, and will keep credit union lending spotty, a Credit Union National Association (CUNA) economist told an event sponsored by the New Jersey Credit Union League and affiliated partners. Also, the housing market will take a long time to recover, Mike Schenk, CUNA vice president of research and statistics, told more than 194 credit union leaders from six states at the league’s 2011 Credit Union Reality Check held last week in Atlantic City, N.J. (The Weekly Exchange March 21). Despite the down economy, the credit union model still functions properly, Schenk said, providing data that indicate in 2010 credit unions collectively saved their members roughly $6.6 billion--compared with banks--by offering better interest rates and lower fees. “We have seen credit unions can endure lower earnings for short periods, but still serve their members,” Schenk told the gathering. Schenk also presented corporate credit union loss data, indicating that losses from mortgage-backed securities totaled $10 billion to $16 billion. Of that amount, $7 billion has been paid through previous assessments, leaving $3 billion to $9 billion to be paid by credit unions, he added. Also discussed at the 2011 Credit Union Reality Check were the future of the corporate credit union network, the importance of non-interest income, credit union mergers, marketing ideas for 2011, public relations strategies for credit unions, and how the National Credit Union Administration’s recent regulation on financial education requirements impact directors and volunteers.

Visterra CU establishes fund for member slain at ATM

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MORENO VALLEY, Calif. (3/30/11)--Visterra CU in Moreno Valley, Calif., has established a memorial fund for a member slain at one of its branches during a robbery. On Sunday evening, 23-year-old member Carrie Thomas, the apparent victim of a robbery, was killed while using the drive-thru ATM at the Moreno Valley location. “Visterra CU takes every precaution necessary to ensure the safety of our members and guests while operating our ATMs,” said Janet DuHaime, senior vice president/chief operating officer. “We are truly sorry for the Thomas family’s tragic loss and are working closely with Moreno Valley Police to provide whatever evidence we can supply from our security footage in hopes of finding the person responsible for this horrific crime.” In honor of Thomas, the credit union has established a memorial fund for her family. Donations can be dropped off at any Visterra CU location, mailed to Visterra CU, PO Box 9500, Moreno Valley, CA 92552-9500, Attn C. Thomas Memorial Fund, or a check-by-phone can be taken directly at 951-656-4411. Visterra CU has $350 million in assets.

Autoland gives to Japan relief monitors impact on industry

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CHATSWORTH, Calif. (3/30/11)--Autoland Inc. will donate a portion of the proceeds of each vehicle purchased through its car buying service to the American Red Cross to aid relief efforts in Japan. On March 11, an earthquake struck off the coast of Japan, causing a tsunami that swept over cities and farmland in the northern part of the country. Recorded as 9.0 on the Richter scale, it was the largest quake ever to hit the country. As the nation struggles with a rescue effort, it also faces the worst nuclear emergency since Chernobyl. As of March 29, the official death toll was raised to more than 11,000, with more than 17,000 people listed as missing, although there may be some overlap between the two groups (New York Times March 29). The final toll is expected to reach nearly 20,000. More than 190,000 survivors remain housed in temporary shelters. “This is a devastating disaster in human terms that’s magnified by the unstable nuclear situation in Japan,” said Marcia Francisco, Autoland’s senior vice president of marketing and business development. “The credit union movement is based on the idea of ‘people helping people.’ That concept goes beyond borders, and we want to do what we can to help the Japanese people as part of the global community.” Beyond the human tragedy, the disaster has also disrupted the Japanese auto industry, said Autoland. Toyota has told its workers to brace for plant shutdowns around the U.S. as inventories run out, though the company has a strong record of keeping employees on payroll through training and other duties if manufacturing is halted (Pennsylvania Credit Union Association’s Life is a Highway March 24). General Motors is the only auto maker that has announced plant shutdowns in the U.S. due to a shortage of Japanese parts. It is idling production at a plant that makes small Chevrolet Colorado and GMC Canyon pickups in Shreveport, La., and laying off more than 50 workers at a New York plant that makes engines for the pickups. “We’re watching that situation closely to see how it might impact members of our partner credit unions who are trying to purchase cars, and how we might be able to help,” Francisco said of the conditions in the auto industry.

Vermont CUs on display at Statehouse

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MONTPELIER, Vt. (3/30/11)--The Association of Vermont Credit Unions (AVCU) and its credit unions were on display in the Vermont Statehouse Card Room Thursday. The AVCU display featured headlines from mass media websites that showcased how frequently credit unions have been in the press the past 12 to 18 months.
Vermont's credit unions were on display in the Vermont Statehouse Card Room Thursday. The Association of Vermont Credit Unions (AVCU) display featured headlines from mass media websites that showcased credit unions in the press the past 12-18 months. (Photo provided by the Association of Vermont Credit Unions)
AVCU President Joe Bergeron and Legal Counsel Rick Brock promoted Vermont’s credit unions as state legislators moved through one of the busiest high-traffic rooms in the building (Newslines Express March 25). Print dailies included The New York Times and the Philadelphia Inquirer to MSN Money and The Huffington Post. The headlines covered many credit union issues, such as increased business lending, lower rates and fees on credit cards, home mortgages, car loans, and the growth of member services brought about by the consumer surge away from large banks. Legislators took handouts highlighting the name and location of all of Vermont’s credit unions and branches, enjoyed miniature chocolate bars, and entered their names into a drawing for a digital camera. Each year, the event helps set the stage for AVCU’s annual Legislator Appreciation Reception; this year it will be held April 20. Before the reception, credit union representatives will hear from several key state political leaders, including Vermont Gov. Peter Shumlin, Lt. Gov. Phil Scott, Senate President Pro Tempore John Campbell and Speaker of the House Shap Smith.

Intern program kicks off second year in N.J. CUs

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HIGHTSTOWN, N.J. (3/30/11)--An internship program that provides interns to credit unions in New Jersey and which will be a model for a national program, has kicked off its second year with Cycle IV internships.
Brenda Luengas works on projects at the New Jersey Credit Union League's office as an intern in the Building Economic Strength Together (BEST) program, which placed 20 interns in the state's credit unions during its first year. BEST provides internship opportunities for people with disabilities. (Photo provided by the New Jersey Credit Union League)
More than 20 interns worked in credit unions during the first year of the Building Economic Strength Together (BEST) internship program, said the New Jersey Credit Union League (The Daily Exchange March 25). Currently eight interns are working at the league and six credit unions: Affinity FCU, Basking Ridge; First Jersey CU, Wayne; Healthcare Employees FCU, Princeton; Member's lst of NJ FCU, Vineland; Rutgers FCU, New Brunswick; and XCEL FCU, Bloomfield. The BEST program, which provides internships for people with disabilities, aims to strengthen the connection between credit unions and the disability community, which has many underbanked and unbanked people. The program was developed by a partnership among the National Federation of Community Development Credit Unions, the National Disability Institute, and Allies Inc., a New Jersey-based training group for people with disabilities. The Kessler Foundation is providing funding. The credit union program will serve as a national model, said the league. The partner organizations pay for and conduct the training of the BEST interns. Credit union participants have little or no cost in participating.

Ohio budget cuts affect CU regulator

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COLUMBUS, Ohio (3/30/11)--Ohio's recently unveiled budget package has reduced funding for the Department of Commerce and the Ohio Division of Financial Institutions (ODFI), which supervises state-chartered credit unions, according to the Ohio Credit Union League. The two-year package was announced by Gov. John Kasich (eLumination Newsletter March 23). It allocates $729.7 million for the Department of Commerce during fiscal year 2012--a 4.9% decrease from the department's 2011 budget. That decrease stems from plans to move the state's liquor merchandising program to JobsOhio. Funding for ODFI dropped 9.7%--to $18.99 million, said the league. The budget includes a 4.9% decrease in the credit union fund for 2012 but no decline in 2013. The ODFI's banking section declined 1.7% in 2012 and 4.1% in 2013. The ODFI's administration will also see a decrease for both years. The league said the figures will become clearer when the actual budget bill language is introduced. Overall, the state cut $2.3 billion from 250 line items, but spent more in its general revenue funds than the current package. Kasich's announcement said the biennium package closes an $8 billion gap while preserving an $800 million two-year income tax cut that went into effect Jan. 1. The budget provides $34 million in job-creating tax incentives, pursues major reforms and reduces spending, the governor said.

Want to connect with members online Join the conversation

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LAS VEGAS (3/29/11)--Connecting with people online isn’t about hyping your credit union’s great rates; it’s about conversing with members, says Bo McDonald, president of Your Marketing Company, Roebuck, S.C. “People don’t care about your credit union; they care about its people, the work it does, and the community it serves,” McDonald told attendees at the 18th Annual CUNA Marketing & Business Development Council Conference in Las Vegas. “People don’t trust advertising--people trust people. That’s why social media is so important. It’s about people talking to people online.” McDonald cites an unlikely example of a company that inspires passion in its customers: Fiskars, the global scissors maker. The company formed the “Fiskateers,” a nationwide group of “crafting ambassadors” who blog about what they’re doing with their scissors. “The scissors’ one-year guarantee doesn’t excite people; connecting with others does,” McDonald explains. “Find something your members can rally around.” He advises credit unions to join the conversation in social media venues such as Facebook, Twitter, Foursquare, and blogs. Some insights about using these tools:
* People like free stuff; * There’s a big difference between updates and spam; * Include photos, videos and links in addition to updates; * Make your fans and staff famous by highlighting them; * Let your fans go crazy--don’t censor their postings; * Give people something to look forward to, such as “freebie Friday,” when you regularly give away items; and * Don’t delete complaints. Instead, address them immediately.
The particular social media vehicle is less important than the conversation, McDonald says. “Remember when MySpace was the shiny new thing? It’s dead now. Facebook and Twitter will be in the same boat someday.”

Eight tenets of successful business development

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LAS VEGAS (3/29/11)--Who’s responsible for business development? Everyone at the credit union, says Celeste Cook, CEO/founder of CUStrategies, Montgomery, Ala., and a former credit union business development executive. She addressed the 18th Annual CUNA Marketing & Business Development Council Conference earlier this month in Las Vegas. Cook offers eight tenets for successful credit union business development:
* Measure results, not activity. Cook spent so much time wooing a former select employee group (SEG) that her credit union CEO once asked her, “Why aren’t you on the golf course?” when she returned to the office. Cook’s putting paid off: The company, AT&T, rejoined as a SEG, giving the credit union access to thousands of potential members. "It doesn’t matter if you’re in the office; it’s about results,” she says. “If you show results, your CEO won’t complain about your expenses.” * Know what competitors offer. This helps credit unions differentiate themselves from others, particularly banks that employ predatory practices. Other points of differentiation: Credit unions have access to a network of 68,000 surcharge-free ATMs; they’re consumer advocates; they’re not-for-profit, member-owned cooperatives; they have lower loan rates, higher dividends, and fewer fees; and they emphasize member education. * Develop relationships. Don’t call companies SEGs, call them “preferred partners.” “And you’re not the SEG’s credit union; you’re its partner,” Cook says. “If we can talk and connect with people, we can build relationships.” * Keep in frequent contact. Cook suggests contacting each SEG at least eight times a year. “Contacting SEGs once a year isn’t a relationship,” Cook says. * Pick the right business development goals. Measure member growth, loan growth, and use of checking accounts with bill pay and e-statements. Also, the number of potential members a SEG provides is a better success measure than the number of new SEGs a business development rep signs up. * Never ask a question that gives you a 50% chance of hearing “no.” This answer is too hard to overcome. For example, don’t ask a potential SEG, “Would you like to hear about our products and our low rates and fees?” Instead, ask the SEG about its business and whether it would be interested in helping its employees save money and improve their financial savvy. * No never means no. When Cook scored a meeting with Hyundai, the human resources person told her, “Before we get started, I should tell you that we’re not going to do business with you.” The company already had a relationship with Wachovia Bank. Cook replied, “I respect your loyalty” and explained in detail her credit union could save the company’s employees money. Hyundai consented to installing three credit union ATMs on-site. Eventually, 80% of its employees converted from Wachovia to the credit union. * Create a tagline that sends a clear message. One credit union’s tagline: We’re going to save our members $1 million this year—simple and effective.

150 members get 10 gal. free gas ID theft advice

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PHOENIX (3/29/11)--Desert Schools FCU in Phoenix partnered with three local gas stations Friday to give 10 free gallons of gasoline to each of 150 members, and also used the promotion to educate members on identity theft protection. The first 50 members to show up at each of three locations in the Phoenix area and provide proof of their membership at the $2.8 billion-asset Desert Schools FCU, along with a non-personal identification number (PIN) purchase receipt and valid driver’s license, received free gas (abc15.com March 26). The purpose of the non-PIN receipt is to reduce the risk of debit-card skimming by scam artists, the paper said. Skimmers are devices placed on machines where customers swipe their debit or credit cards and allow thieves to steal personal information and PINs to perpetrate financial fraud. The credit union urges members to use the credit option at gas pumps and other retail locations because the non-PIN transaction is covered through Visa’s Zero Liability protection program, which provides additional layers of coverage on losses, Cathy Graham, Desert Schools’ assistant vice president of marketing, told the paper. The credit union’s gas giveaway to members was part of Desert Schools’ year-long “Skip the Pin and Win’ promotion.

NCUA sues to recover defunct CUs land development losses

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LAS VEGAS (3/29/11)--The National Credit Union Administration (NCUA), as liquidating agent of the former Ensign FCU, Henderson, Nev.,has sued developers and individuals who entered into real estate construction loans with the credit union in 2007, two years before the credit union was shuttered due to declining financial condition. NCUA filed suit Thursday in a U.S. District Court for the District of Nevada, Las Vegas, to recover losses stemming from the developers and guarantors' failure to pay on the $1.9 million borrowed from Ensign. The suit centers on a condominium development, Habitat Center II LLC, which entered into the construction loan agreement with the credit union on May 30, 2007, according to court documents. Defendants in the case are loan guarantors Perry Chamani, also known as Pirooz Perry Chamani: Fay Chamani; and Environmental Landscape Inc. NCUA also included unknown corporations identified as Doe and Roe Corps, which may be added to the lawsuit once identified. Habitat Center failed to make payments on the promissory note and construction loan agreement on property in Clark County, Nev., and NCUA foreclosed the property on Nov. 1, 2010, said NCUA's complaint. The proceeds from the foreclosure sale of the property did not pay the full amount of the defaulted debt, and NCUA is seeking action based on breach of guaranty and a deficiency judgment to recoup losses, the complaint said. Ensign FCU had 7,900 members and $98 million when it was placed into involuntary liquidation on Nov. 13, 2009, said NCUA. EDS CU of Plano, Texas, purchased and assumed Ensign's member share accounts (News Now Sept. 25, 2009).

In Glee-like ad members sing praises of CU

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RICHMOND, Va. (3/29/11)--Virginia CU (VACU), Richmond, Va., has created some buzz with an ad campaign that features the singing and acting talents of its members. The television ad began running March 21 in the Richmond market. More than 75 VACU members auditioned to be in the commercial, which takes a visual approach similar to the popular television program “Glee.” The program also borrowed some ideas from “American Idol.” Credit union members auditioned for the commercial before a panel of local celebrity judges. The campaign capitalizes on the popularity of television shows such as “American Idol,” America’s Got Talent” and “Glee” by using the credit union’s own members to convey the message that “We belong together.” VACU’s advertising agency, Elevation, came up with the concept and wrote songs for the campaign. The ad features lyrics that emphasize the cross-section of people who are members of the credit union and communicates that point by featuring those members--rather than trained professionals. The campaign has captured the attention of the local media. News stories about the commercial have appeared in the Richmond Times-Dispatch and in a supplement to the Virginian Pilot. The campaign has also hit the social media world. Clips from the auditions, rehearsals and final performance have been posted on YouTube. Links to the campaign from Twitter and on Facebook have ensured that the campaign reaches beyond its targeted television-viewing audience, VACU said. To view the ad on YouTube, use the link.

CDCU launches fund-raising drive to boost reserves

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TOLEDO, Ohio (3/29/11)--A Toledo, Ohio, community development credit union (CDCU), Toledo Urban FCU, will hold a fund-raising drive to bolster its shrinking cash reserves. The credit union will accept individual donations, with the rationale that no contribution is too small, said Suzette Cowell, Toledo Urban treasurer/CEO (toledoblade.com March 28). The credit union, which will begin sending out letters to the community next week to explain its situation, hopes to raise $250,000 by late September, the newspaper said. Toledo Urban is making the move to put in abeyance potential orders by the National Credit Union Administration (NCUA) to improve its financial condition, the newspaper said. NCUA requires credit unions to have capital reserves of 7% of their total assets. Following an audit of its financial condition, Toledo Urban determined it had a 4.6% capitalization rate, the paper said. The credit union’s capital reserves have diminished because the poor economy has caused members to become delinquent on their loan payments, and adversely affected the $3.6 million-asset Toledo Urban’s reserves, Cowell told the paper.

Warren initiates meeting with San Diego CUs

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SAN DIEGO (3/29/11)--Elizabeth Warren, the Obama administration's point person for the new Consumer Financial Protection Bureau (CFPB), took time out from a community bankers’ national convention to meet with California credit union leaders last week. Warren, in the San Diego area for the Independent Community Banks National Convention, met with local credit union executives at the headquarters of $4.9 billion-asset San Diego County CU. Nine credit union representatives attended the meeting, including Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues. Warren initiated the meeting and emphasized the integrity of credit unions in the wake of a financial disaster created in part by dishonest financial services companies, Dykstra said. Dykstra told News Now that Warren is intent on building regulation from “the inside out” with the CFPB, focusing on regulations that work for financial institutions with a history of serving consumers’ needs. “The idea that resonated is that credit unions are the good guys here,” Dykstra said. “We do a lot of things well and we do things the right way. The bureau isn’t there to punish us. She is saying let’s start with the financial institutions that are doing things the right way and work out from there, instead of creating a long list of regulations that primarily focus on a few big players, but make life difficult for the smaller players.” Warren stressed that the CFPB was created to serve consumers first, Dykstra said. Warren said the bureau’s most immediate areas of focus are making the Credit Card Act and Truth in Lending navigable for consumers. “At the end of the day she wants consumers to have a clear understanding of the credit products they are offered and the ability to compare products from competing financial institutions,” Dykstra said. “That is not currently the case.” Credit Union National Association (CUNA) President/CEO Bill Cheney has asked Warren to join those who are requesting a delay in implementation of the Federal Reserve's interchange fee changes. CUNA representatives and Warren have also discussed the regulatory burden faced by credit unions and other issues. Cheney has recommended that Warren consider adding a formal regulatory-burden-monitoring function to the CFPB's pending Office of Community Banks and Credit Unions. Warren spoke at CUNA’s 2011 Governmental Affairs Conference in early March.

Maine CUs have Day at the State House

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AUGUSTA, Maine (3/29/11)--More than 80 representatives from nearly two-thirds of Maine’s credit unions participated in the Maine Credit Union League’s Annual Maine CU Day at the State House Thursday.
Click to view larger image More than 80 Maine credit union representatives participated in the Maine Credit Union League’s Annual Maine CU Day at the State House Thursday. Here, staff and volunteers from New Dimensions FCU, Waterville, Maine, visit with Speaker of the House Robert Nutting, who represents part of the credit union’s field of membership. From left, Ryan Poulin, president/CEO of New Dimensions FCU; Nutting; Jeannine DeRosby, board member; and Jerome Allen, board chair. (Photo provided by the Maine Credit Union League)
With many new faces and leaders in the legislature, the league said it was pleased with the strong turn out. During the morning, about 125 of the 186 members of the Maine Legislature visited credit union and league representatives. Among those who stopped by were Speaker of the House Robert Nutting (R), Assistant Majority Leader Andre Cushing (R) and Senate Minority Leader Barry Hobbins (D). Four credit union board members--serving dual roles as credit union volunteers and members of the Maine House--visited with the group. The league provided legislators with credit union statistics, a newsletter and a new flyer highlighting the leadership and participation of Maine’s credit unions in youth financial education efforts. “We were able to discuss some of the issues of interest to credit unions and to educate new legislators about the benefits that credit unions provide to Maine consumers,” said John Murphy, president of the league. Also, both legislative chambers passed a joint resolution recognizing the Maine Credit Union League and Maine’s credit unions for the positive and significant contributions they have made to Maine citizens for more than 89 years.

Mich. league unveils Save My Free Checking campaign

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LANSING, Mich. (3/29/11)--In an attempt to stave off federal implementation of changes to the debit interchange system, the Michigan Credit Union League & Affiliates (MCUL) is launching a public campaign to support bills that would delay the changes. The bills are in the U.S. House (HR 1081) and Senate (S 575) (Michigan Monitor March 28). Using the theme “Save My Free Checking,” the campaign includes a radio ad blitz and asks listeners to contact lawmakers to advocate for Congress to stop the proposed rules and instead study the negative effects on consumers. The campaign will work along with SaveMyFreeChecking.com, which includes a petition to channel members’ voices toward their elected representative and turnkey materials for credit unions to use to supplement the campaign. Retailers already have started a radio ad campaign in Montana to intimidate one of the sponsors of legislation to delay the debit interchange rule, U.S. Sen. Jon Tester (D-Montana), MCUL said. It is important for credit unions, not only to encourage more support for the legislation, but also to show their appreciation for those who have shown political courage by sponsoring these bills, the league said. Congress is realizing the unintended consequences of the debit interchange amendment to the Dodd-Frank Act, and the credit union industry needs to show its unity and support for the new bills, their sponsors and their co-sponsors, MCUL said. The Credit Union National Association (CUNA) opposes the cap on interchange fees and has told federal lawmakers that such action would harm consumers by driving up costs of debit cards, limiting consumer options, competition and technological innovation. Interchange fees allow business costs, including the risk of consumer nonpayment, to be shared by the payments participants, CUNA says.

Pa. foundation announces grants nominates board members

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HARRISBURG, Pa. (3/29/11)--The Pennsylvania Credit Union Foundation (PCUF) board approved several grants and nominated two board members to serve as at-large members for three-year terms during a meeting Friday. Those nominated as at-large members are George Nahodil, executive vice president of Members lst FCU, Mechanicsburg, and Jeff DeBree, CEO of Penn East FCU, Scranton. The nominations are subject to approval from the Pennsylvania Credit Union Association (PCUA) board (Life is a Highway March 28. Also appointed were PCUA board members Louise Lingenfelser and Maria LaVelle to serve additional three-year terms. The PCUF board also approved:
* A $2,000 grant to the American Red Cross for Japan earthquake relief; * A $2,000 grant to Westmoreland Community FCU for tornado disaster relief; * The formation of a Haitian task force to recruit volunteer members; * Inclusion of PCUF in the National Credit Union Foundation's funding to provide Reality Fairs in Pennsylvania; and * Thirteen grants totaling $49,512, granted between Nov. 5, 2010 and March 24, 2011.
PCUF also approved the first four grants under its small credit union webinar training grant program, Credit unions with assets up to $20 million can apply for a grant up to $1,000 or the cost of four training webinars, whichever is less.

CU System briefs (03/28/2011)

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* HARRISBURG, Pa. (3/29/11)--The Pennsylvania Credit Union Association (PCUA) will match the Pennsylvania Credit Union Foundation's $2,000 grant for a local relief fund to aid victims of last week's tornado in Westmoreland County. The funds will go to those who suffered loss of homes and personal possessions, said PCUA Board Chairman Ray Brunner (Life is a Highway March 28) … * MADISON, Wis. (3/29/11)--Former teller Elizabeth R. Simonis, 29, of Custer, Wis., was sentenced Wednesday to one day in jail and fined $1,000 for embezzling $29,220 from Bull's Eye CU's Stevens Point, Wis., branch. Simonis embezzled the funds from two members' accounts to pay for medical bills for her ill husband. U.S. District Judge Barbara Crabb said during sentencing that she factored in Simonis's lack of prior convictions and the medical issues. Simonis was also placed on three years' supervised release and must pay restitution of $26,930 with a minimum of $250 a month. Bull's Eye is based in Stevens Point and has $118 million in assets … * EL PASO, Texas (3/29/11)--The Security Service FCU's (SSFCU)
Click to view larger image Click for larger view
Security Service Charitable Foundation donated $10,000 to Homes for Our Troops (HFOT), a national group that builds specially adapted homes for soldiers who have been severely injured or disabled. From left, Derrick Aguilar, SSFCU assistant vice president for member services in the greater El Paso, Texas, area, presents the foundation's check to El Paso native and Army SPC Adrian Garcia on site at a "build brigade" for his future home. The credit union also provided volunteer support at the build and serves as the official financial institution for the HFOT El Paso area builds. Its four service centers in the El Paso area also have collected more than $500 deposited in an HFOT account to contribute to current and future builds in the area. (Photo provided by Security Service FCU) … * BINGHAMTON, N.Y. (3/29/11)--GHS FCU has named Daniel Leclerc as president/CEO, effective April 18, announced Patricia Clark, GHS FCU treasurer of the board and chair of the search committee (NewsChannel34.com. Leclerc has nine years of credit union experience. He most recently served as senior vice president/chief financial officer of Aventa CU, Colorado Springs, Colo. He began his credit union career in 2002 with Park Side FCU in Whitefish, Mont., where he advanced to executive vice president. He serves as vice chair on the executive committee of CUNA's CFO Council …

Canadas Central 1 posts 50.1M in net income

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VANCOUVER, B.C. and TORONTO (3/28/11)--Central 1 Credit Union has reported net income of $50.1 million for 2010. The net income figure was down from the extraordinary level of $99.9 million in 2009, but ahead of the $26.6 million posted in 2008, when the credit union centrals of B.C. and Ontario combined at mid-year as Central 1. “Against a backdrop of volatile financial markets and a challenging economic environment, Central 1 performed well last year,” said Don Rolfe, president and chief executive officer of Central 1 CU. “In 2009, we were able to take advantage of highly unusual conditions in the financial markets and make conservative investments that produced very strong results, but we had no expectation of matching that exceptional performance in 2010.” Rolfe said gains on the sale of financial instruments and revenue from provision of services contributed to the positive results for 2010. Another factor was equity income from Central 1’s investment at the end of 2009 in The CUMIS Group. Total assets at year-end were $10.4 billion, compared with $11.1 billion in 2009 and $8.6 billion in 2008. Return on average equity was 8.9%, compared with 19.6% in 2009 and 7.7% in 2008. Central 1 paid $9.6 million in dividends to its member shareholders.

Arizona Treasurer will continue program to invest in CUs

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PHOENIX (3/28/11)--Arizona State Treasurer Doug Ducey announced the continuation of a program launched in 2010 designed to put state and local tax dollars back to work in Arizona’s banking community, including credit unions. The program is designed to invest in Federal Deposit Insurance Corporation (FDIC) or National Credit Union Share Insurance Fund (NCUSIF) products at Arizona banks and credit unions through a monthly bid process. “We are pleased that our State Treasurer will continue this valuable program and provide Arizona credit unions with the opportunity to participate,” Austin De Bey, vice president of governmental affairs for the Arizona Credit Union League, told News Now. “The program ensures that taxpayers dollars are invested back into the local community, and provides a valuable option for credit unions that may choose to bid on state monies in the future. The league will continue to work with the State Treasurer’s office and inform our credit unions on the ability to participate in the program.” Each month, the Treasurer’s Office will entertain bids from local banks and credit unions for the placement of up to $250,000 in cash per institution for either one-month, three-month, six-month, one-year, two-year or five-year products that are fully insured with the FDIC or the NCUSIF. “Investing a portion of Arizona taxpayer dollars in local banks can have a very positive economic impact,” Ducey said. “We currently have more than $50 million invested with eight Arizona banks, and look forward to expanding our relationship with those banks and others.” The program asks banks and credit unions interested in receiving these investments to provide the Treasurer’s Office with their bids five business days prior to end of each month. Awarded bids will settle on the first business day of the following month. Each institution is encouraged to quote rates for all maturities they offer. Once bids are received, the Treasurer’s Office will notify each institution if their bid is accepted. Minimum qualifications for bidders require Arizona deposits of at least $10 million; for banks a Capital Leverage Ratio of at least 6% in the previous quarter and for credit unions a Prompt Corrective Action Net Worth Ratio of at least 6% in the previous quarter.

CUs continue efforts for Japan

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MADISON, Wis. (3/28/11)--Credit unions nationwide continue to gather support for victims of the Japanese disaster. On March 11, an earthquake struck off the coast of Japan, causing a tsunami that swept over cities and farmland in the northern part of the country. Recorded as 9.0 on the Richter scale, it was the largest quake ever to hit the country. As the nation struggles with a rescue effort, it also faces the worst nuclear emergency since Chernobyl. As of March 25, the official death toll had been raised to more than 10,000, and in excess of 16,000 people are listed as missing, although there may be some overlap between the two groups. The final toll is expected to reach nearly 20,000 (New York Times March 25). Among the credit union relief efforts are:
* Credit Union 1, Anchorage, Alaska, created an account to which members could make donations for Japan relief. Members could also donate their “One for All” reward points from the credit union; * Freedom CU, Warminster, Pa, donated $1,000 to the American Red Cross. Also, Freedom CU is offering members options for making safe donations. The credit union also has provided a quick payment link to the American Red Cross in its online bill pay portal. This link will allow members to have donations securely and immediately deducted from their checking accounts and sent directly to the Red Cross. Through its website, the Freedom CU is offering links to a list of trusted relief organizations’ websites. When members make a donation to one of these organizations using a Visa credit card or check/ATM card, Visa will waive any associated interchange fees; * The Pennsylvania Credit Union Association, Harrisburg, Pa., directed its member credit unions to forward donations to the American Red Cross, Save the Children or World Vision. (Use the links below.); and * University of Louisiana FCU, Lafayette, La., spread the word about Soles4Souls efforts to collect shoes for Japanese survivors.
Melanie Riedl, director of marketing at University of Louisiana FCU told News Now, “We got a great response from people around the country who were happy to hear about another way to help everyone in Japan. I think people are looking to pitch in however they can.”

Gwinnett FCU CEO No free lunch on interchange

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ATHENS, Ga. (3/28/11)--While many questions still surround the implementation of the interchange rule, Marshall Boutwell shared a gut feeling with a Georgia newspaper that probably sums up what many people in the credit union industry are thinking about the rule. “There’s no free lunch,” Boutwell, CEO of $160 million-asset Gwinnett FCU, Lawrenceville, Ga., told the Athens Banner-Herald (March 20), not once, but twice. While the interchange rule includes an exemption for financial institutions under $10 billion, until the rule is redrafted, credit union executives like Boutwell fear its negative--even if unintended--consequences. The Credit Union National Association (CUNA) has estimated that up to 67% of credit unions would lose money on their debit card programs if the interchange regulations reduced interchange-related revenues by 40%. Boutwell told the paper the value of the member service that credit unions have built their reputation on is likely to be put to the test because of these consequences. Local banks and credit unions will likely have to charge additional fees to cover the lost revenue that results from the interchange rule, though credit union fees are likely to be a bit lower than those of large banks. But Boutwell is just as concerned about the potential “blow-back” from big retailers. He fears big box retailers like Wal-mart will refuse to pay 44 cents for debit card purchases drawn on credit union accounts when they only have to pay 12 cents if the their customers are using cards from big banks. In the end, the retail customer will have to pay the fee to the retailer when she swipes her card, or to her financial institution in the form of higher fees. Once again, Boutwell said, “no free lunch--for credit unions or consumers. And, unless the rule is rewritten, he remains fearful, he told the paper. CUNA has repeatedly said that to ensure that the planned exemption is effective, Congress should halt the progress of the interchange rule. Both the House and Senate have pending bills that would delay implementation. If an agreement to delay implementation cannot be reached, CUNA has called on the Fed to do all it can to ensure that the proposed exemption works as Congress said it would.

Best practices winners named by CUNA Marketing and BD Council

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LAS VEGAS (3/28/11)--Best Practices Award winners from the CUNA Marketing and Business Development Council were announced during the council’s 18th annual conference, which took place March 16-19 in Las Vegas. The awards recognize outstanding new marketing and business development approaches with potential for universal application across the credit union movement. Without regard to asset size, a panel of judges selected winners based on strategy, process, application and results. Representatives from the winning credit unions were present at the conference to accept their awards. This year’s winners (by category), with descriptions of their awards are:
* Business Development: Partners FCU in Burbank, Calif., for its Synergy program. As a single sponsor credit union affiliated with The Walt Disney Companies, Partners FCU’s approach to Synergy drives everything from new memberships to member education to inclusion in Cast Member (employee) publications. As a result of its efforts, in 2010 Partners FCU had a positive net member growth (+2%) for the first time in three years. Not only has the credit union experienced membership growth, but product and service referrals have increased dramatically. Partners focus on Synergy has enabled it to grow and prosper while other credit unions in their area have either experienced negative growth or have remained stagnant. * Miscellaneous: Erie FCU in Erie, Pa., for its growing business account services program. Through a combination of targeted business ads, partnerships with business organizations and realigning their employees to better serve their business members--Erie FCU was able to drive more traffic to their business webpage, increase business membership, raise business deposits and generate additional loan volume. This new focus for Erie FCU resulted in a 4.55% increase in business membership growth, a 7.37% rise in business deposit growth and $1.05 million in new business loans. * Miscellaneous: Pioneer WV FCU in Charleston, W. Va., for developing and implementing a brand for their credit union. Its brand was developed around a compass, designed to help steer members in the financial direction they wish to go. Pioneer WV FCU changed all print collateral and updated its branches to reflect the new brand. Also, it created an auto lending campaign around the new brand which resulted in more than double the loan volume of past years.
For more information on the 2011 Best Practice Award winners, use the link.

Arizona Colorado and Wyoming CUs vote for three-way merger

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PHOENIX (3/28/11)--Member credit unions throughout Arizona, Colorado and Wyoming cast their votes in favor of the three-way merger, creating the new Mountain West Credit Union Association. The results of the vote were officially announced by Mike Williams, chairman of the Credit Union Association of Colorado, with Marsha Tynsky, chairwoman of the Credit Union Association of Wyoming, and Robert D. Ramirez, chairman of the Arizona Credit Union League, during the Colorado Association’s Annual Meeting Friday in Colorado Springs, Colo. Tynsky said she is pleased with the results and “excited about the possibilities of the future of the new organization,” adding: “Serving our member credit unions is what’s most important. This merger gives us all the opportunity to increase and improve our member services.” Credit Union Association of Colorado (CUAC) chairman, Mike Williams expressed his support for the merger as well. “I am confident this merger will build an association that will be a lasting benefit to all member credit unions,” Williams said. “Working with the leaders in the other two states has been a great fit right from the beginning.” Participation in the membership vote was high with overwhelming support in favor of the merger. “The support credit unions have shown is a strong statement to the energy that is behind this merger,” said Ramirez. “The need for a league is as important as ever. The challenge is how best to achieve efficiencies and still provide what credit unions expect from their league. This merger will allow us to meet the needs of all sizes of credit unions.” Scott Earl, president/CEO of the Arizona Credit Union League will become the new CEO of the Mountain West Credit Union Association. The newly formed association will be headquartered in Denver with offices and staff maintained in Phoenix and Casper, Wyo.

Montana CU CEO tells local press Interchange limit hurts consumers

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BILLINGS, Mont. (3/28/11)--If the federal government continues with its plan to impose limits on debit card interchange fees, the move would hurt millions of consumers nationwide, a CEO for a Montana credit union wrote in a recent guest column in a local newspaper. “For 76 years, Billings FCU has represented the financial interests of its members, currently standing at 8,500 individuals in the Billings community,” wrote Tom Boos, CEO of Billings (Mont.) FCU. “As CEO, I am writing to sound the alarm that the federal government is on path to imposing new regulations on debit cards. I fear it is going down a risky path that could harm millions of people who belong to credit unions or use community banks” (Billings Gazette March 20). The largest U.S retail chains are behind this regulation and want the government to cap the fees they pay to accept debit cards, Boos wrote. Retailers have spent millions lobbying for this rule, because the biggest 2% of retailers stand to be recipients of a “$12 billion windfall--every year,” he added. “Small institutions like mine are able to issue free debit cards because of the interchange fees merchants pay for accepting them,” Boos wrote. “It is a system that works for everyone from the consumers and small businesses to credit unions and major banks. The fees level the playing field and allow our members the same zero-cost convenience enjoyed by customers of the largest financial institutions. They cover security costs, fraud protection and the vast network itself. Moreover, they permit credit unions to continue providing important services to our members. “If the retailers’ lobby is not stopped, community banks and credit unions around the country may have to increase their fees and rates just to cover debit services,’ Boos added. “Otherwise, we will have little choice but to create new restrictions or limit debit card use. Some of us may have to stop issuing cards altogether. That could spell the death of smaller financial institutions.” The Credit Union National Associations (CUNA) opposes the cap on interchange fees and has told federal lawmakers that such action would harm consumers by driving up costs of debit cards, limiting consumer options, competition and technological innovation. Interchange fees allow business costs, including the risk of consumer nonpayment, to be shared by the payments participants, CUNA says. To read the guest column, use the link

2011 Diamond award winners honored at CUNA council conference

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MADISON, Wis. (3/25/11)--Linn Area CU in Cedar Rapids, Iowa, was named “Competition’s Best”--the highest “Best of Show” award in the CUNA Marketing and Business Development Council’s Diamond Awards competition. The winners were acknowledged during the council’s 18th annual conference, March 16-19 in Las Vegas. Entered in the Television Series category, the $244.2 million-asset credit union aimed to increase the number of new accounts through testimonials of real members in a series of television commercials. By exuding their approachable, feels-like-family branding image, the credit union was able to exceed their goal of new members by 104%. This year’s awards competition received nearly 1,000 entries. Judges awarded four entries as Best of Show, along with 146 Diamond Awards and 237 Awards of Merit. Other Best of Show honorees included:
* Best Association Entry: California and Nevada Credit Union League in Ontario, Calif., for its Annual Meeting & Convention campaign, “Reimagine.” The theme captured the need for innovative thinking on the part of credit unions as they dealt with a changing industry and a down economy. The differing modes of member communication, including print pieces, e-mails, videos and a website, led to an increase of more than 100 attendees over the previous year. * Best Use of Art: Texas Trust CU in Mansfield, Texas, for its “Spirit Card Contest” entry in the Plastic Access Card Design category. By allowing students to submit a design for a Debit MasterCard, the “Spirit Card Contest” was a way to develop relationships with local school districts and businesses and a way to get students actively involved in the credit union. *Best Use of Humor: Central Credit Union of Illinois in Bellwood, Ill., for its “2010 Fall Vehicle Event” campaign. Using multiple mediums, the campaign emphasized a sense of urgency to act on the vehicle loan promotion with their use of a turkey living on borrowed time before the Thanksgiving holiday. The campaign brought in more than $1.9 million in vehicle loans, which was 195% over its marketing goal.
Diamond Awards feature 33 categories, ranging from direct mail and website marketing, to public relations and social media. Judges evaluated entries based on strategy, design and production, creative concept, copy and communication, and results. To see a complete list of award winners, use the link.

Natl experts on innovation headline CUNAs Americas CU Conference

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MADISON, Wis. (3/25/11)--The Credit Union National Association (CUNA) will host its 2011 America’s Credit Union Conference & Expo June 19-22 in San Antonio, Texas. This year’s conference, Big Time: Big Ideas & Big Opportunities, features powerful speakers, interactive sessions and energizing networking opportunities, CUNA said. The conference’s unique learning environment brings credit union decision-makers together to hear and share success-driving ideas and leadership trends. “Growth, managing change, and operating at peak performance are all top-of-mind concerns for credit unions today,” noted CUNA President/CEO Bill Cheney. “Our keynoters at this year’s America’s Credit Union Conference will take on these issues directly. Credit unions are sure to benefit from the wealth of ideas and expertise they’ll offer at a conference that has become known for its innovative and thought-provoking programming.” Keynote speakers are:
* Dan Pink--“Drive: What the Science of Motivation Can Teach You About High Performance.” As the best-selling author of A Whole New Mind, Pink uses behavioral research to reveal why the traditional approach to high performance backfires on most organizations. He explains how smart organizations can tap people’s deepest motivations to produce the highest results. * Dan Heath--“Switch: How to Change Things When Change Is Hard.” Successfully leading people and organizations through change is a must-have skill for credit union leaders. An entrepreneur and change leader, Heath has worked with organizations such as Harvard Business School, Microsoft, Philips, Vanguard, Fast Company magazine, USAID, the American Heart Association and Duke University’s Center for the Advancement of Social Entrepreneurship. * Alison Levine--“Beyond Boundaries.” Levine has survived sub-zero temperatures, hurricane-force winds, sudden avalanches and a career on Wall Street. Drawing parallels between staying alive in the mountains and thriving in the fast-paced business world, she will spark new thinking about leadership, teamwork, overcoming odds, taking responsible risks and dealing with changing environments. * Doug Hall--“Innovative Engineering: How to Innovate & Grow Your Credit Union.” Hall, a marketing inventor and the founder and CEO of Eureka! Ranch, brings his “invention and research think tank” to credit union leaders. He’ll jump ideas with techniques used by American Express, Ford, Nike, Disney and many others to make Measurably Smarter growth choices. * Eric Saperston--“The Journey: Lessons from America’s Most Influential Leaders.” Challenged by a mentor to make a post-college trip to follow the Grateful Dead and work a ski season in Aspen more meaningful, Saperston convinced a group of friends to ask some of the world’s most powerful people out for a cup of coffee. In their search for inspiration and wisdom, they talked with more than 200 famous and not so famous people. Attendees will hear these stories and Saperston’s search for the meaning of life.
For more information on CUNA’s 2011 America’s Credit Union Conference & Expo, use the link.

IAmerican BankerI Can banks learn from CU Gen Y campaign

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MADISON, Wis. (3/25/11)--In an article headlined, “Does Credit Unions’ Gen Y Campaign Have Lessons for Banks”, American Bankerrecognizes how credit unions are using the Web to create local local online communities and capture the attention of young consumers. Young & Free, a campaign launched in 2007 by Canadian marketing firm Currency Marketing is a blend of social media and product promotion built around Gen Y spokespeople, or “spokesters,” who create buzz through word-of-mouth promotion. The concept is built around a contest to determine who will become the credit union’s spokesperson. Applicants create buzz for themselves--and drive traffic to the credit union’s Web page--through their meet ups, Facebook pages, YouTube videos, and tweets. The spokester is chosen through an online vote, and receives an annual salary from the credit union, plus a car to attend community events, and all the technology needed to keep in touch with the credit union’s Gen Y members. The spokester blogs, posts videos, maintains the credit union’s Young & Free web site and interacts with young members though social media. The American Banker article, which appeared March 24, wonders if banks could benefit from using the Web to build their local customer bases. Observers quoted in the article say, “Yes, but …” Ron Strothkamp, vice president and principal analyst at Forrester Research, Cambridge, Mass., said banks would have to do some “soul searching” to engage in this type of marketing. Count Tim McAlpine in the “Yes, but …” category as well. McAlpine is the president and creative director of Currency Marketing, Chilliwack, Canada. He told News Now that Young & Free is not available to for-profit financial institutions. But concedes the concept could “potentially work” at a bank. But McAlpine further explained that almost none of the Young & Free spokesters were familiar with the credit union cooperative concept when they entered the contests. “When they realized what credit unions were all about, that they were these very cool banking institutions, they knew it was something they could get behind,” McAlpine said. “They are deeply into this. They are credit union members for life.” McAlpine believes that type of passion would be hard for a big bank to create--and to make believable for consumers--but he thinks a progressive community bank, such as Umqua Bank, Roseberg, Ore., or a niche player, such as IMG, could make a play for it. Young & Free indeed appears to fit within the “service first” credit union philosophy. The concept has caught on with credit unions in seven states--only one credit union in each state can participate--and two Canadian provinces. Credit unions have traditionally had difficulty attracting Gen Y consumers. According to Javelin Strategy and Research, only 11% of Gen Yers has a primary relationship with a credit union, versus 15% for all other age groups. One of the reasons for that might be that Gen Y’s financial needs aren’t necessarily found on a traditional products and services menu. “Of course, everyone needs a checking account, but a lot of young people need help with budgeting,” Jessica Emert, marketing director ORNL FCU, Oak Ridge, Tenn., told News Now. ORNL FCU is a Young & Free participant. “That’s not a product we traditionally offer, but it’s a service we can definitely help them with.” Emert said her credit union’s Young & Free spokesperson, Alex Oliver is “fantastic.” She admits marketing to Gen Y can be resource intensive, but she’s hopeful Young & Free has helped her credit union build long-term relationships. “We will be there when it’s time for them to get car loans, start saving and get mortgage loans,” Emert said. “You have to take the time to connect with people first.”

Iowa CUs ask state legislature to allow prize-linked savings

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DES MOINES, Iowa (3/25/11)--Iowa credit unions have put forth a proposal in the state legislature to allow credit unions and banks to offer saving accounts linked to prize drawings. Despite opposition from the Iowa Bankers Association, the legislation--Senate File 490--passed the Iowa Senate Tuesday by a 30 to 20 vote and moves to the Iowa state House for approval (The Des Moines Register March 21). Consumers’ need to find innovative ways to save has never been more pressing, Patrick S. Jury, president of the Iowa Credit Union League, said in a statement, the paper reported. Credit unions need to change their traditional ways of thinking to change consumer behavior, he added. The state bankers have criticized the effort to increase consumer savings by saying they don’t think the possibility of winning a prize should be the basis for encouraging consumers to make decisions about how they are going to save, an Iowa Bankers Association spokesperson, told the newspaper. Iowa credit unions want to start their program based on a similar one in Michigan in which members who open a “Save to Win” account have their name enter into a drawing for monthly cash prizes between $100 and $1,000. Then, once a year, a drawing is held for a $100,000 grand prize. Participants in the program are allowed to withdraw from the account once a year--but two withdrawals disqualifies them from being in the raffle, Justin Hupfer, league vice president of government affairs, told the paper. Prize money generally comes from credit unions’ operating budgets, Hupfer added. To read, the article, use the link.

Maine CUs Campaign for Ending Hunger presents 21K check

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PORTLAND, Maine (3/25/11)--Maine’s Credit Unions recently made its largest, one-time donation ever, a gift of $21,000 made through the Maine Credit Unions’ Campaign for Ending Hunger to the Good Shepherd Food-Bank .
Click to view larger image The Maine Credit Unions’ Campaign for Ending Hunger presented a check for $21,000 in memory of Good Shepherd Food Bank Founder JoAnn Pike on the seventh anniversary of her death. The funds will benefit food pantries in every Maine county. Holding the check are, from left, Luke Labbe, president/CEO of PeoplesChoice CU, Saco, Maine, and chair of the Maine CU League’s Social Responsibility Committee; Rick Small, executive director of Good Shepherd Food Bank; and Jon Paradise, governmental and public affairs manager for the Maine Credit Union League. (Photo provided by Maine Credit Union League)
The donation was made in memory of JoAnn Pike, the founder of the Good Shepherd Food Bank. Pike began the Good Shepherd 30 years ago and served as its executive director until February 2004. She passed away March 17, 2004. Two days later, Maine credit unions were the first to make a significant contribution in her memory. Every year since, Maine’s credit unions have made a donation to mark the anniversary of her death and to remember the long-time hunger pioneer. Maine’s credit unions also made a surprise contribution of $1,000 to help Good Shepherd defray the significant rise in fuel costs associated with deliveries made by the Food Mobile. Good Shepherd Food Bank serves 95% of the food pantries in Maine. Maine’s Credit Unions recently announced that in 2010 a record of $402,740 was raised, an increase of nearly $27,000 from the previous high, set in 2009. Since 1990, the Maine Credit Unions’ Campaign for Ending Hunger has raised $3.9 million.

CU System Briefs (03/24/2011)

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* HARRISBURG, Pa. (3/25/11)--This year marks the 10th anniversary that the Pennsylvania Credit Union Association has participated in Pennsylvania Department of Transportation Adopt-A-Highway program. As one of its community service projects, the association sponsors the highway cleanup for the interchange at Rt. 22-322 and Rt. 39 (Linglestown Road). Four times each year, a crew of employee volunteers and family members pick up litter along the entrance/exit ramps. The program is coordinated by Sandy Shenk, Pennsylvania Credit Union Service Centers state coordinator. A new sign was recently posted along the highway acknowledging the association’s ten-year commitment to the program … * MADISON, Wis. (3/25/11)--Mary Finnegan-Ongaro, a financial advisor at Members Cooperative CU, Cloquet, Minn., registered through CUNA Brokerage Services, Inc., has received the 2010 Women of Distinction award. The award is in recognition of Finnegan-Ongaro’s superior performance, value and overall contribution to the financial services industry. CUNA Brokerage Services, Inc. names the top female financial advisors throughout the nation as Women of Distinction. Candidates are nominated by industry peers, and selections are based on the nominee’s annual sales performance and outlined contribution to their clientele, the credit unions they service and the financial services industry as a whole …

Connecticut league announces election results

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MERIDEN, Conn. (3/25/11)--The Credit Union League of Connecticut Board of Directors Governance Committee announces the results of the 2011-2012 election of chapter and at-large directors under the newly restructured director election system. Chapter directors elected include:
* Bridgeport Chapter--Carl Skudlarek, manager/CEO, Bridgeport City EFCU, Bridgeport; * Eastern Chapter --John Dolan, chief lending officer, Charter Oak FCU, Groton; * Hartford Chapter--Joanne Todd, president/CEO, Northeast Family FCU, Manchester; * Moran/Nixon Chapter--Keith Wiemert, president/CEO, Seasons FCU, Middletown; * New Haven Chapter--James N. Farrell, CEO, New Haven County CU, New Haven; and * Stamford Chapter--Kathy L. Chartier, CEO, Members CU, Stamford.
At-large directors elected include:
* John E. Keet, Jr. (three-year term)--CEO, Personal Care America FCU, Trumbrull; * Edward V. Crowley Jr. (two-year term)--CEO, Fairfield Municipal FCU, Bridgeport; and * Garrett R. Gizowski (one-year term)--CEO, United Shoreline FC, New Haven.
Changes in bylaws for the league board elections included a reduction in number from 12 chapter directors and six alternate directors to six chapter directors and three at-large directors to streamline board governance and provide a more equitable representation of the state’s credit unions.

NCUF asks CUs to complete financial education survey

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MADISON, Wis. (3/24/11)--The National Credit Union Foundation (NCUF) is collecting data for its 2011 Credit Union Member Education Inventory. Sponsored by state credit union leagues and NCUF’s REAL Solutions program, the data and information gathered from credit unions will allow the credit union movement to demonstrate the power of financial education and counseling on the lives of members and communities nationwide. The information will provide state credit union leagues/associations and the broader credit union movement with fuel for state and national public awareness, advocacy, and related outreach efforts. Survey responses will create a rich, vibrant and sustainable source of data and statistics about the lives touched by credit unions. “No one has quantified in-depth information for the entire credit union movement around financial education,” said Bucky Sebastian, NCUF executive director. “From the limited data that we have collected through REAL Solutions, we know that credit unions have an impressive story to tell, and it behooves us to show legislators and community leaders the extent to which credit unions advance financial literacy and decision-making, especially given the government’s ever-increasing emphasis on financial education.” Each league/association will have a section in the resulting report that contains state-specific data and comparisons to national figures. Designed for maximum impact and exposure, the report will be used for communications, advocacy and outreach efforts, and will be accessible to participating credit unions at no charge through the REAL Solutions Impact Center. In addition, a companion tool detailing member financial education/counseling products and credit union best practices will be published in conjunction with the report. NCUF is using an online survey tool to gather this data during March and April. Roughly 700 credit union CEO/presidents will receive an email from Lois Kitsch, NCUF’s REAL Solutions national program director, in the coming weeks requesting their participation in the Inventory. However, NCUF is inviting all U.S. credit unions to participate in the project. To access the survey, use the link. “NCUF and state CU leagues/associations eagerly await the results of this data collection effort,” said Kitsch. “We know that credit unions are doing amazing work in the area of member financial literacy and education. And while we read and hear about these tools and programs on a daily basis, we now need to quantify your efforts so we can share credit unions’ overall impact with those who rely on numbers to measure success.” The eight sections of the inventory are:
* Financial counseling programs; * Classroom education (for students); * Seminars and workshops (for adults); * Experiential learning programs; * In-school branches; * Online resource centers/tools/courses; * Financial communication tools; and * General financial education questions.
A section of the inventory seeks to determine the extent to which credit union financial education/counseling programs align with a set of Financial Education Core Competencies developed by the U.S. Treasury Department’s Financial Literacy and Education Commission and referenced in the National Financial Capability Challenge Educator Toolkit. For questions and additional information, contact Lois Kitsch at lkitsch@ncuf.coop or call 414-793-991.

CU reps launch mutual fund to help with MBL cap

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MADISON, Wis. (3/24/11)--A small group of credit union professionals are creating a mutual fund that could help credit unions package and sell their business loans--giving these credit unions a way to better manage the member business lending cap. The new mutual fund is tentatively named the “Unity Fund.” The fund is the collaboration of Tom Campbell and Mario Pelosi, managing directors of Glasgow Partners; David Dunn former commercial lender and former president of two credit union service organizations (CUSOs) providing business services, and Guy Messick from the law firm of Messick & Weber PC. The team will partner with investor credit unions in a CUSO that is a registered investment advisor to launch the mutual fund. The group’s proposal was conditionally approved by BNY Mellon in December to become a mutual fund offered by BNY Mellon in its family of mutual funds. This was no small feat, according to Dunn. It shows the business viability of this project, he added. It has a few more hurdles to clear before it can open for business, but its prospects look bright--no fund that has gained BNY Mellon approval has ever failed to clear subsequent regulatory hurdles. At this time, the National Credit Union Administration (NCUA) has interpreted the investment regulations as not permitting federal credit unions to buy shares in the proposed mutual fund. There will be follow through with NCUA to determine if the investment regulations could be amended to permit credit unions to buy shares in the mutual fund. In the meantime, the shares will be sold to institutional investors. The quality control on the loans will be extensive, according to the fund’s creators. Only experienced and successful business lending credit unions and CUSOs will be certified to sell loans into the mutual fund. The CUSO will certify the lenders, and that certification must be reviewed and renewed annually. If a non-certified credit union wants to sell loans to the mutual fund, a certified credit union must review and approve the underwriting. The certified lenders will service the loans in the mutual fund. The CUSO will review all loans being sold into the mutual fund and there will be a third-party reviewer who will sample test the underwriting. “The mutual fund will only be successful if the loans are of the highest quality and we are sparing no effort to insure this,” Dunn said. “We are excited about this new tool for the credit union industry that will help manage the regulatory cap issue [because when credit unions sell their business loans, those assets are taken off their books], provide liquidity from outside the industry, shift some lending risk to outside the industry, and provide high underwriting standards that will tend to raise the bar for those credit unions that want to sell to the mutual fund. We look forward to the day when credit unions can buy shares in the mutual fund so they can benefit from a favorable return on their investment without the same level of risk a loan participation might pose. “There is a great deal of business lending opportunity for credit unions,” he added. “We’re not looking for the big syndicated real estate loans that have been so problematic. Credit unions can help America recover if they have the necessary business-lending expertise and regulatory relief. This mutual fund can help credit unions seize their significant business-lending opportunities.” CUNA and credit unions are trying to get Congress to increase credit unions’ MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said. For more information, contact David Dunn at ddunn@dedunnassociates.com or Guy Messick at gmessick@cusolaw.com.

IN.Y. TimesI highlights CUs advertising celebrity spokespersons

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NEW YORK (3/24/11)--Credit unions nationwide are doing more advertising to accentuate the positive advantages they provide members compared to banks, and many are even employing celebrity spokespersons, according to a Tuesday article in The New York Times about how several industries are using celebrity pitchmen. “Credit unions historically have been low-key with advertising, but in the past couple of years they have become more aggressive, occasionally addressing the distaste many consumers have shown for big banks whose lending practices contributed to the economic downturn,” the article said. The Times highlighted efforts by Municipal CU, a $1.54 billion-asset credit union based in New York City, who recently hired as spokesman John Franco, a retired relief pitcher for the New York Mets, who noted that his father, who worked for the city, was a member there. Before last year, the 96-year-old credit union had never advertised on television, but decided to elevate its profile without being negative toward competitors, Steve Kibitel, Municipal vice president of marketing, told the newspaper. “We’re not into the attack mode,” Kibitel added. “We’re comfortable within our own skin promoting who we are--the banks are the banks, this is who we are, check us out.” The article also mentioned America’s First CU in Birmingham, Ala.; Financial CU in Jacksonville, Fla.; Public Service CU in Romulus, Mich., and BECU in Tukwila, Wash, which used musician Kenny G. in a commercial promoting its new debit card with the University of Washington logo. To read the article, use the link.

CU System Briefs (03/23/2011)

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* LAS VEGAS (3/24/11)--During the closing ceremonies last July of The 1 Credit Union Conference, the meeting jointly sponsored by the Credit Union National Association and the World Council of Credit Unions (WOCCU), there were 33 nominees from 15 countries honored in the WOCCU Young Credit Union People (WYCUP) program. Of those honorees, the following five received scholarships: Scott Daukas, U.S.; Carol Karugu, Kenya; Melia Keller, U.S.; Orla O’Shea, Ireland; and Christie-Anne Scott, Australia. Each recipient will receive an all-expenses-paid trip to attend the WYCUP 2011 program in July and WOCCU’s World Credit Union Conference in Glasgow, Scotland, next July. A story in The March 23 News Now about Melia Keller had mentioned her as the only scholarship winner, when there had been five ...

IWSJI notes interchange fights progress CU lobbying efforts

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MADISON, Wis. (3/24/11)--In an article about the financial services industry’s progress in delaying interchange legislation, The Wall Street Journal made note of the 4,000 credit union representatives that lobbied their lawmakers while in Washington to the attend the Credit Union National Association’s (CUNA)Governmental Affairs Conference Feb. 27-March 3. The article, which appeared online in the March 23 print edition of The Wall Street Journal, outlined the balance-sheet challenges financial institutions would face if the Durbin Amendment were to take effect as scheduled in July. Credit unions and community banks are concerned they will have to lower their fees to match the 12-cent cap imposed on large institutions under the Durbin Amendment, which, in turn, would force them to eliminate free checking or add other fees to make up for lost revenue. However, credit unions and banks have “bombarded” lawmakers with virtually every type of communication, including face-to-face meetings with those in Washington for CUNA’s GAC, according The Wall Street Journal. “Around 4,000 credit-union employees descended on lawmakers’ Washington offices a few weeks ago while in town for meetings of their trade group, the Credit Union National Association,” the article noted. “The debit-fee rule was among their top issues, and now that the two bills have been introduced, they are urging support for them from their representatives, said CUNA [vice president of communications and media] Pat Keefe,” the article added. The story also noted that Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corp. Chairman Sheila Bair have expressed reservations that echo those of the financial services industry. Also, the financial services industry has received support for its views from groups as diverse as the National Education Association, the National Association for the Advancement of Colored People and the U.S. Hispanic Chamber of Commerce. Legislation that would delay the implementation of the interchange fee cap was introduced in the Senate and House on Tuesday. The two bills would also order regulators to study the impact that the proposed interchange rules would have on credit unions, small issuers, consumers and merchants. CUNA supports the legislation. CUNA has encouraged credit unions nationwide to contact their federal lawmakers, at home this week for a District Work Period, and ask them to “stop, study and start over” on interchange legislation.

CUNA releases white paper on branch managers changing role

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MADISON, Wis. (3/24/11)--A new white paper from the Credit Union National Association’s (CUNA) Community Credit Union Committee offers insights on the key forces that are changing the role of the branch manager and how credit unions should react. The paper, titled The Credit Union Branch Manager: A New Leader for a New Era, outlines critical expectations for the next-generation branch manager and the skill sets that must be developed to meet those expectations. The paper describes a digital shift that is beginning to affect the traditional retail banking model, and the changing role of the branch manager as credit unions see continued proliferation of mobile channels and e-payments. With this unprecedented consumer shift, financial institutions are struggling to determine where the brick-and-mortar branch fits into a future-looking business model--and what role a branch manager will play in the growth and success of their organizations. The evolution of both the branch and the profile of the branch manager will be a difficult and volatile challenge for credit union executives, according to the white paper. This will be a major topic during strategic planning, annual budgeting and the ongoing execution of the organization’s growth plans. The CUNA Community Credit Union Committee was formed in 2006 to provide support for community credit unions. The committee’s purpose is to support and service community credit unions and credit unions considering a community charter through representation of community credit unions’ unique legal, legislative and regulatory needs; and education, resources and information. To download a free copy of The Credit Union Branch Manager: A New Leader for a New Era use the link.

Belvoir FCU partners with military community for shopping challenge

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WOODBRIDGE, Va. (3/24/11)--Belvoir FCU, Woodbridge, Va., and the Fort Belvoir Army Community Service (ACS) partnered in February and March to support the 2011 ACS Shopping Challenge in recognition of Military Saves.
Belvoir FCU, Woodbridge, Va., and the Fort Belvoir Army Community Service (ACS) partnered in February and March to support the 2011 ACS Shopping Challenge in recognition of Military Saves. Pictured from left: Judy MacDonald, director of branch operations at Belvoir FCU, Woodbridge, Va.; challenge winners Wendy Windley and Sgt. Thomas Windley; and Erica F. Drame, financial readiness program manager at Fort Belvoir Army Community Services. (Photo provided by Belvoir FCU)
ACS and Belvoir FCU teamed up to give away three cash prizes. Military Saves is a national campaign to persuade, motivate and encourage military families to save money every month and to encourage the promotion of automatic savings. The ACS Shopping Challenge originated with the goal of having consumers comparatively shop to save money on their groceries. All members of the military community who wanted to participate were challenged to use coupons and shop at the commissary to compare the price of their groceries. The three-week challenge helped participating families learn how they could save money by forming a budget and using coupons to meet their budgets. Participating families that kept receipts and saved the most money were eligible for the cash prizes. After saving $279.05 in coupons at the commissary, Sgt. Thomas Windley and his wife, Wendy, won the grand prize of $200. First runner-up Kelly Ratliff saved $262, earning a $150 prize. Second runner-up Christine Jones saved $203.67, good for a $100 prize.

N.Y. league visits U.S. Rep. Hayworth

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ALBANY, N.Y. (3/23/11)--Credit Union Association of New York staffers recently visited the Goshen office of U.S. Rep. Nan Hayworth (R-N.Y.).
Credit Union Association of New York staffers and state credit union leaders recently visited the Goshen office of U.S. Rep. Nan Hayworth (R-N.Y.). Pictured from left: William Spearman, president/CEO, Mid-Hudson Valley FCU, Kingston; Thomas Powers, CEO, Hudson River Teachers FCU, Mohegan Lake; U.S. Rep. Nan Hayworth; Mark Welshoff, president/CEO, Palisades FCU, Pearl River; Roland Faucher, president/board chairman, Hudson River Teachers FCU; and Michael Lanotte, association senior vice president and general counsel.
Also in attendance were: Thomas Powers, CEO, and Roland Faucher, president/board chair, Hudson River Teachers FCU, Mohegan Lake; William Spearman, president/CEO, Mid-Hudson Valley FCU, Kingston; and Mark Welshoff, president/CEO, Palisades FCU, Pearl River. During their time with Hayworth, the group discussed the unique structure and philosophy of credit unions and their role in the financial services industry. They emphasized credit unions’ legislative priorities, including interchange, supplemental capital and member business lending. “The credit union leaders in attendance clearly demonstrated the credit union difference to Representative Hayworth, providing her with numerous examples of the ways they have benefited their members--her constituents--and the communities in her district,” shared Michael Lanotte, association senior vice president and general counsel. “Congresswoman Hayworth was very engaged, and our priorities aligned with her position on taxes and a competitive, fair business environment,” he added. “The meeting established a solid foundation for building a strong relationship.” Hayworth serves on the House Financial Services Committee.

Wanted CUs to take part in National Youth Saving Challenge

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MADISON, Wis. (3/23/11)--National Credit Union Youth Week, sponsored by the Credit Union National Association (CUNA), is less than a month away. By sponsoring the National Youth Saving Challenge, a credit union can generate excitement about setting money aside for personal goals.
A young saver makes a deposit at Erie Community CU during the 2010 National Youth Savings Challenge. (Photo provided by CUNA)
The National Youth Saving Challenge puts the spotlight on credit unions and highlights its community service and financial education efforts. Although the 2011 National Credit Union Youth Week is officially April 17-23, credit unions can challenge youth savers any time during the month. A saving challenge can be run during Youth Week, over several weeks, or through the entire month of April. Registration is open through the end of April. There is no charge for credit unions to participate in the contest. CUNA provides marketing materials, forms and creative ideas. CUNA also provides mentors from credit unions who have participated in the savings challenges previously to share their experiences and offer ideas. CUNA reports the deposits and uses Saving Challenge figures to promote the credit union difference in both state and national lobbying efforts. Thus far, 227 credit unions have registered. Participating credit unions hope to see 70,000 youth make deposits worth more than $9 million--that’s an average deposit of just under $130. “Each year, credit unions call and write me about how surprised they were to see how much youth deposit,” said Joanne Sepich, CUNA’s Youth Week coordinator. “When we first launched the Challenge in 2004, the average deposit was $87. It has grown over the years. Last year the average was $147. Clearly our youth are thinking ahead--saving for major expenses such as cars and college.”

CUNA marketing council honors three CU executives

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MADISON, Wis. (3/23/11)--Three credit union executives were honored for their credit union marketing and business development achievements during a ceremony at the CUNA Marketing and Business Development Council (CMBDC) Conference, which took place March 16-19 in Las Vegas. Joye Cox, vice president of marketing for SAFE FCU in Sumter, S.C., was the 2011 Hall of Fame inductee. Cox first served as SAFE Federal CU’s marketing director in 1984, when it was a military credit union with $64.5 million in assets and 36,800 members. A proponent of the philosophy of sharing the credit union with the entire community, Cox was instrumental in the addition of adding underserved communities in eight counties. Now the vice president of marketing, her credit union has $671 million in assets and serves more than 100,000 members through 10 branch locations. Cox was also instrumental in developing and growing SAFE’s program for members age 55 and older, and is laying the groundwork for a student-run branch in a local high school. In addition to being a co-founder and executive committee member of the CUNA Marketing and Business Development Council, Cox has won numerous industry and non-industry awards. Amy McGraw, marketing director for Public Service CU in Romulus, Mich. won the Marketing Professional of the Year Award. McGraw has helped her credit union grow from more than 19,000 members and $89.5 million in assets to more than 23,400 members and $126.3 million in assets today. This represents a 23% growth in membership and a 41% growth in asset size in a little more than 4 years. Her responsibilities, which include all aspects of marketing and design, public relations, community involvement, and the credit union’s growing scholarship program, have helped the credit union accomplish this growth during a down economy. McGraw is also very active in her local credit union chapter, the Michigan Credit Union League and serves on the conference committee for the CUNA Marketing and Business Development Council. Brynn Ammon, project manager for Pen Air FCU in Pensacola, Fla., was presented with the Business Development Professional of the Year Award. Ammon has worked in credit unions for 11 years with the past couple being at Pen Air where she is responsible for business development, community outreach, off-site loan events, business account development and management of the Mobile Service Center. In 2010, under Ammon’s leadership, Pen Air FCU opened more than 100 new business accounts and 120 new SEGs, surpassing its goals by 375% and 220%, respectively. In addition to her work at the credit union, Ammon is also very active in her local community as well as being a past executive committee member of the CUNA Marketing and Business Development Council.

Interchange rule hits CUs and consumers hard says league president

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LAS VEGAS (3/23/11)--Consumers nationwide would face increased fees when using their debit card if pending legislation before Congress becomes law, according to a speaker at a Credit Union National Association (CUNA) conference last week. Credit unions face a $1.5 billion annual price tag if the debit interchange fee regulation goes into effect, Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues, said Friday during the 18th Annual CUNA Marketing & Business Development Council Conference in Las Vegas. At issue is Section 1075 of the Dodd-Frank Act, the Interchange Amendment, which lacks any enforcement mechanism to protect small issuers such as credit unions. “We’re exempt, but there are no rules to protect us,” Dykstra said. “We can’t afford to take a $1.5 billion hit.” Credit unions should budget to receive 30% less in interchange income this year, and 70% less income six to 12 months after the interchange legislation’s implementation, she added. Magnifying the impact of potential cuts to interchange income are insurance fund assessments and declining revenues due to the economic slowdown. “Marketing is hit the hardest by budget cuts during tough times,” Dykstra said. She called upon conference attendees to contact elected officials about this issue, and to encourage friends and colleagues to do the same. The interchange provisions, which were passed as part of comprehensive financial regulatory legislation last year, direct the Fed to write rules on interchange fees for debit card purchases. While the interchange provision exempts small credit unions and other financial institutions with under $10 billion in assets from any interchange changes, these institutions would still be impacted directly by whatever rates are established, CUNA says. CUNA opposes the cap on interchange fees and has told federal lawmakers that such action would harm consumers by driving up costs of debit cards, limiting consumer options, competition and technological innovation. Interchange fees allow business costs, including the risk of consumer nonpayment, to be shared by the payments participants, CUNA says. Other key issues facing credit unions discussed at the conference are:
* Pending member business lending legislation. Dykstra acknowledged that although many credit unions don’t offer business services, the legislation is important to the movement as a whole.“We need an environment where all credit unions can thrive,” she said. “And, business lending might be important for your credit union five years from now.” * Supplemental capital. Too many credit unions are dealing with capital constraints by shrinking their assets. “That’s not acceptable,” Dykstra said. * Deficits. Cash-strapped states and the national government are looking everywhere for income, which requires constant vigilance about protecting the credit union tax exemption.
“We don’t think the government will set out to tax credit unions,” Dykstra said, but the movement needs to watch for last-minute amendments tagged onto other legislation. “It could be the Durbin Amendment all over again.”

Keller wins WOCCU Young People scholarship

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MADISON, Wis. (3/23/11)--Despite her young age, Melia Keller, CEO of Mid-Cities Financial CU in Compton, Calif., and a 2010 winner of World Council of Credit Unions’ (WOCCU) Young Credit Union People (WYCUP) Scholarship Program, has already made a significant impact in the credit union industry.
Click to view larger image Melia Keller accepts the Young Credit Union People (WYCUP) award from World Council of Credit Unions President/CEO Pete Crear. Nominations for the 2012 WYCUP award are due June 1. (Photo provided by World Council of Credit Unions)
Keller started her credit union career at 19 as a teller and by 34 had worked her way up to CEO. Her accomplishments include launching successful youth programs to help teach children and teens about personal finance, creating financial workshops for those affected by hardships and layoffs, and last year being named a WYCUP winner. “WYCUP was a great opportunity to network with other young people from all over the world,” Keller said. “It’s very interesting to see how my counterparts in other countries are addressing their problems and then finding solutions together.” WYCUP nominations are now being accepted for the 2012 program for individuals under the age of 35 who have made significant contributions within their own credit union system--locally, regionally or nationally. The deadline for nominations is June 14. Winners will be announced at this year’s World Credit Union Conference, July 24-27 in Glasgow, Scotland, where five nominees will receive an all-expense-paid trip to the 2012 World Credit Union Conference in Gdansk, Poland. “The WYCUP Scholarship Program is a way for WOCCU to engage the next generation of credit union professionals and volunteers who already are making important contributions to the movement,” said Pete Crear, WOCCU president/CEO. “Melia is a great example of that initiative because she embodies the credit union movement and inspires others to make a difference.” Keller not only works in the industry, but she promotes credit unions in every aspect of her life, including during time served in Iraq. As a member of the U.S. Army Special Operations forces she went village to village working with financial institutions to help rebuild and stimulate the local Iraqi economy. Also, Keller helped fellow soldiers build their credit and published an award-winning book, In the Company of Soldiers, about her time in Iraq. As the key to her success, Keller credits her board of directors at Mid-Cities Financial CU. “I wouldn't be where I am today without my board of directors believing in me and giving me this chance,” Keller said. “It’s very progressive to hire someone so young and we need more boards and credit union leaders like that.” All WYCUP nominees will be formally recognized in Glasgow and invited to participate in events specifically organized for those age 35 and under. Conference attendees in this age group also qualify for a discounted registration fee regardless of whether or not they compete for a scholarship. To be eligible for one of five WYCUP scholarships, nominees must: 1) submit a completed nomination form with all necessary supporting materials by June 14; 2) be 35 years of age or younger as of Jan. 1, 2011; and 3) attend WOCCU's 2011 World Credit Union Conference in Glasgow this July where winners will be announced. For more information, use the link.

NCBA Write lawmakers for Year of Co-op resolution

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WASHINGTON (3/23/11)--The National Cooperative Business Association (NCBA) is asking all U.S. members of cooperatives to urge their U.S. Senators to co-sponsor a resolution designating 2012 as the International Year of Cooperatives. The resolution is being introduced by U.S. Sens. Thad Cochran (R-Miss.) and Tim Johnson (D-S.D.). Johnson is the chairman of the Senate Banking Committee. "I'm pleased that this resolution enjoys bi-partisan support,” said NCBA president/CEO Paul Hazen said. “Cooperative enterprise knows no party, and the social and economic benefits of the model know no boundaries.” More than 29,000 cooperatives operate in every sector of the economy and in every congressional district; Americans hold more than 350 million co-op memberships, according to the NCBA. Credit unions alone, as financial cooperatives, enjoy the membership of 92 million Americans. U.S. cooperatives generate two million jobs and make a substantial contribution to the economy with annual sales of $652 billion and assets of $3 trillion, NCBA notes. “Cooperative enterprise is a vital part of our economy,” Hazen said. “Cooperatives improve the quality of lives of Americans all over this country, regardless of race, class, gender or party affiliation. That’s why we’re asking co-op members across America to urge Senators to co-sponsor this resolution.” NCBA has prepared a message that can be delivered to senators by e-mail or phone. See the link below. The United Nations designated 2012 as the International Year of Cooperatives (IYC) in order to recognize the contribution cooperatives make to social and economic development. The theme of IYC--“Cooperative Enterprise Builds a Better World”--reflects the contribution of cooperatives to the communities they serve.

Security check issues kick off Conn. league ed. series

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MERIDEN Conn. (3/22/11)--The Credit Union League of Connecticut’s 2011 Professional Education Series got off to a start with a March 9 all-day session on security, followed Wednesday by a half-day session on check issues, in Wallingford, Conn. The league’s 16-session series, spanning nine months--with a hiatus in August--provides an examination of important and essential areas to credit unions. Nearly 70 individuals from 60 credit unions attended the sessions. Also, the March 9 session included an exhibit of 10 league strategic partners and vendors that provide services to credit unions, including ATM equipment and services, insurance opportunities, marketing, and information security and technology. Speakers included Connecticut Financial Crimes Task Force Detective Mark Solomon, who explored the escalating instances of ATM skimming and fraud; Tom Nash, senior risk management analyst at American Eagle FCU and nationally recognized financial crimes investigator, who provided insight into confronting today’s instances of fraud; Michael Petrone, CUMIS/CUNA Mutual Group risk manager, who provided safety essentials during robberies; and Attorney Craig Smith, author of the online Deposit Account Guide, who reviewed regulations on dealing with checks. “With today’s rapid proliferation of ATM fraud and endless efforts of criminal attempts on all levels to defraud the public, credit unions--indeed, all financial institutions--should never let their guard down when in a position to protect their members and customers,” Solomon said. “After all, individuals put their trust in their financial institutions. They in turn are obligated to be ever vigilant in securing members’ financial assets and putting into place effective safeguards against crime. “I was happy to provide the latest examples of ATM fraud along with guidelines to preventing its success,” he added. “The law enforcement community greatly appreciates the efforts made by the Credit Union League of Connecticut to continually educate its members, as well as its efforts to advance the partnership between them and the law enforcement community.”

CUNA MarketingBusiness Dev. Council names exec committee

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MADISON, Wis. (3/22/11)--The CUNA Marketing and Business Development Council announced its executive committee and officers during the council’s 18th annual conference, March 16-19 in Las Vegas. Officers and executive committee members were selected by the council membership in the annual election preceding the conference. Newly elected council officers are:
* Sean McDonald, chief marketing officer for Liberty Savings FCU, Jersey City, N.J, council chair; * Michelle Hunter, senior vice president marketing and business development for Credit Union of Southern California, Brea, Calif., vice-chair; and * Kathryn Davis, senior vice president of marketing and human resources for Xceed Financial CU, El Segundo, Calif., secretary/treasurer.
Four new members were elected to the executive committee. They are:
* April Clobes, executive vice president for Michigan State University FCU, East Lansing, Mich.; * Andy Reed, manager of business development for American Airlines FCU, Fort Worth, Texas.; * Hilary Reed, vice president of marketing for Bucks First FCU, Bristol, Pa.; and * Debra Trautman, manager of marketing for the Maine Credit Union League, Portland, Maine.
The new members replace outgoing executive committee members who have served their terms: Lesley Carrell, vice president of marketing for Fibre FCU, Longview, Wash.; Tim Draper, vice president of marketing for Navigant CU, Smithfield, R.I.; Anne Legg, vice president of marketing for Cabrillo CU, San Diego; and Carol Payne, vice president of communications and marketing for the California and Nevada Credit Union Leagues, Ontario, Calif. The CUNA Marketing & Business Development Council executive committee also includes:
* Amy Davis, vice president of marketing for Red Canoe CU, Longview, Wash.; * Tyler Disburg, chief administrative officer for Montana First CU, Missoula, Mont.; * Yvonne Garand, vice president of marketing and business development for Vermont State ECU, Montpelier, Vt.; and * Nancy Hutchinson, senior vice president of marketing and business development for Minnesota Power ECU, Duluth, Minn.

Security giant RSA hit by cyber attack

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BEDFORD, Mass. (3/22/11)—RSA, the security division of EMC, has been hit by hackers. In an open letter posted on its website, RSA said it experienced an “extremely sophisticated” attack in which information related to the company’s SecurID two-factor authentication products were stolen. The “tokens” are employed by millions of end users, including credit unions. SecurID adds an extra layer of protection to a login process by requiring users to enter a secret code number displayed on a keyfob, or in software, in addition to their password. The number is cryptographically generated and changes every 30 seconds. In an open letter on the company’s website, RSA Executive Chairman Art Coviello categorized the attack as an “advanced persistent threat” and said a company investigation revealed “certain information being extracted from RSA’s systems.” “While at this time we are confident that the information extracted does not enable a successful direct attack on any of our RSA SecurID customers, this information could potentially be used to reduce the effectiveness of a current two-factor authentication implementation as part of a broader attack," Coviello said. Customer and employee security related to other RSA products or personal identifiable information do not appear to have been compromised, Coviello said.

Texas demographics will impact CUs services

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FARMERS BRANCH, Texas (3/22/11)--An expanding population in Texas will impact credit union membership and services, according to the Texas Credit Union league (TCUL). The state’s population has grown by more than four million people during the past decade--a nearly a 21% growth rate, according to research by Rick Grady, TCUL vice president of research, who used data from National Credit Union Administration 5300 call report and the U.S. Census Bureau (LoneStar Leaguer March 18). Although state credit union membership has grown during the past 10 years by about 1.1 million, the percentage growth is nearly four percentage points lower, closing the decade with a growth rate of 16.8%. And while credit union membership was 31% of the state’s population in 2000, it is now only 30%. All this adds up to a credit union market share of the new population at 25%--a solid market share, but still short of where TCUL said it wants to be. So how has the state’s population changed? Statistically speaking, two-thirds of the new growth are Hispanic or Latino, about an eighth are Black or African-American, around 10% each are White or Asian. Not all this population growth was the result of migration or immigration, TCUL said. Births contributed the largest number to the population expansion. And with births comes a follow-on industry of clothing, housing, nursery furniture, day care, schooling, soccer fields and minivans, the league said. Those industries could create more demand for loans and financial services that credit unions could supply. As the composition of the communities change, it can cause not only the types of services credit unions deliver to change, but how they deliver those services as well. And as the influx of new people enters a community, the familiarity with the products and services offered by merchants is minimal and must be discovered, TCUL said.

Two CU CEOs on Atlanta Feds advisory council

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ATLANTA (3/22/11)--Two credit union representatives are among the 13 members appointed to the newly formed Community Depository Institutions Advisory Council (CDIAC) for the Sixth Federal Reserve District, announced the Federal Reserve Bank of Atlanta. The credit union representatives are:
* Mark E. Rosa, Jefferson Financial CU, Metairie, La.; and * James Woodward, SunState FCU, Gainesville, Fla.
The board of governors of the Federal Reserve System has created a national CDIAC to broaden the scope of input on economic credit conditions. To complement the national effort with regional perspectives, each Federal Reserve Bank is establishing a district council comprising representatives from that district’s credit unions, community banks and thrifts. CDIACs will provide input on the economy, lending conditions, and other issues related to community banking. They are being established at Federal Reserve Banks across the country pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The Sixth District CDIAC will meet twice a year and held its first meeting on Wednesday. The Federal Reserve Bank of Atlanta serves the Sixth Federal Reserve District, which encompasses Alabama, Florida, Georgia and parts of Louisiana, Mississippi and Tennessee. With the Sixth District’s announcement, the district councils are completed.

ATMs must have proper Reg E fee disclosures CMG alert

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ST. LOUIS (3/22/11)--Nationwide, attorneys are looking at financial institutions, including credit unions, to see if the signage required by Regulation E is properly affixed to ATMs. If it is not, litigation could ensue and a violation of Regulation E may result in a fine of up to $500,000 plus costs and attorney fees based on the class action filing, warns the Missouri Credit Union Association (MCUA). Regulation E requires that if a credit union operates an ATM and charges members or nonmembers a fee for transactions and/or balance inquiries, it must ensure all ATMs comply with the fee disclosure requirements (The Missouri difference March 18). When an ATM fee is charged, credit unions should provide the following three disclosures as recently stated in a CUNA Mutual Risk Alert:
* Notice at ATM: Post a sign in a prominent and conspicuous location on or at every ATM operated by the credit union stating that a fee will (or may) apply. It is not necessary to state the amount of the fee on the sign. * Terminal screen: Display the amount of the fee on the ATM screen. Once notified, ATM users must be able to cancel the transaction to avoid the fee. *Receipt: Disclose the fee on the transaction receipt.
To ensure compliance, credit unions should follow their written procedures consistently and regularly inspect their ATM signage and functionality. Credit unions must document and retain evidence of Regulation E compliance efforts, MCUA said.

Miracle on Ice goalie Jim Craig to speak at CUANY convention

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ALBANY, N.Y. (3/22/11)--Jim Craig, the starting goalie of the 1980 U.S. Olympic gold medal “Miracle on Ice” hockey team, will be the keynote speaker at the Credit Union Association of New York’s Annual Meeting and Convention on June 3. With the theme “Credit Unions: Standing Tall,” this year’s event will take place at the Conference Center at Lake Placid from June 2-5. Craig’s performance at the Lake Placid Games is legendary. Against the heavily favored Soviet Union, he made 39 saves on 42 shots, leading the U.S. to an improbable 4-3 victory. The U.S. went on to defeat Finland to win the gold medal. Craig followed his historic hockey career with with an award-winning career in sales and marketing, utilizing the lessons he’s learned along the way to become a powerful speaker. In 2006, he directed his competitive zeal and devotion to innovation and teamwork when he launch launched Gold Medal Strategies, a Boston area-based motivational speaking and sales training company. “Gold Medal Strategies: Business Lessons from America’s Miracle Team” is also the title of new book due from Craig and best-selling author Don Yaeger, scheduled for publication in April.

ASI FCU offers college savings plan for Ninth Ward

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HARAHAN, La. (3/21/11)--ASI FCU, Harahan, La., has teamed with two partners to offer "Bridge to Start," a savings program that addresses the growing gap between family income and higher education costs as well as helps low-income families develop a savings habits and invest in their children's future. ASI, KIPP Renaissance High School and the Keller Family Foundation developed the program for families with children enrolled in KIPP, located in the Ninth Ward, according to the Louisiana Credit Union League (eNews March 16). The credit union and school, with a grant from the Keller Family Foundation, will provide a 2:1 match, up to $50, for participating families. Those who save $50 can end up with $100. KIPP has pledged $30,000 of its own funds to participate in the match. ASI is encouraging families to open savings accounts for their students and make deposits as they can afford monthly. At the conclusion of the academic year, the families' accounts--including matched funds--will be placed into Student Tuition Assistance and Revenue Trust (START) accounts through the State of Louisiana's 529 Program. START accounts are tax-free education savings accounts that allow families to earn interest on their college savings. The credit union noted the rising cost of higher education is an almost insurmountable barrier to low-income families, who remain underserved by the financial community. Many don't own bank accounts and resort to using fringe financial services such as payday lenders for basic financial tasks--which further reduces their ability to save for college. Such decisions prevent savings and asset accumulation and lead to a financial cycle of poverty that can have detrimental effects on first-generation college students struggling to balance attending class, studying and working part-time. One effect is an increase in college dropout rates. Over time, the "Bridge to Start" will strengthen the financial health of the families by equipping them with financial education and assisting KIPP Renaissance High School and KIPP New Orleans Schools in their goal to produce more than 1,000 first-generation college graduates by 2022. "The objective of this program is to give disadvantaged families an opportunity not only to save for college, but to help underbanked or unbanked families be brought into the financial mainstream," Mignhon Tourne, ASI FCU CEO, told the league.

Conway to lead MDDCCUA merger due diligence committee

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COLUMBIA, Md. (3/21/11)--Chris Conway, president/CEO of Educational Systems FCU, Greenbelt, Md., will chair a five-member committee to lead a merger due diligence review for the Maryland and District of Columbia Credit Union Association (MDDCCUA) related to its potential merger with the New Jersey Credit Union League. MDDCCUA Board Chairman Miguel Boluda tapped Conway to lead the ad hoc committee, said the association. Others named to the committee are:
* Rob Windsor, CEO of First Financial FCU, Lutherville, Md.; * Theresa Mann, CEO of The Partnership FCU, Arlington, Va.; * Marsha King, CEO of Library of Congress FCU, Hyattsville, Md.; and * Lois Profili, CEO of First Eagle FCU, Owings Mills, Md.
As part of the due diligence effort, Conway said he plans to hold a series of focus groups with the affiliated credit unions so that the committee may better understand what their concerns and desires are regarding the creation of a regional association. “This is all about listening to our constituents, understanding what the deal breakers are, and ensuring two-way communication as we negotiate our way to the final recommendations to the membership. My goal is to have a general idea of what this new association would look like and a clear understanding of the desire of Maryland and D.C. credit unions to move forward by our annual meeting in June,” Conway said.

Council speaker Build mind share to grow market share

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LAS VEGAS (3/21/11)--It’s more important than ever for credit union brands to capture members’ heads, hearts, trust, and loyalty. Credit unions are the “good guys” of the financial services industry, and they have a great story to tell. But credit unions won’t be able to exploit their “good guy” status to build market share until they build “mind share,” says brand strategist Libby Gill, speaking at the 18th Annual CUNA Marketing & Business Development Council Conference in Las Vegas last week. She says it’s more important than ever for credit unions’ brands to cut through the clutter and capture members’ mind share--their heads, hearts, trust, and loyalty--after which market share will follow. Gill cites five ways credit unions can build member mind share:
* Define and deliver authentic value. Examine what you’re providing members and whether you’re meeting their needs. * Confirm your “go-to-authority” status. Establish your credentials and credibility by sharing your expertise with members, becoming a valued source by the media, and harnessing members’ testimonials. "Nothing sells a customer like another happy customer,” Gill says. “Don’t be the greatest best-kept secret.” * Create a “sticky” message. A tagline can be a powerful way to communicate your credit union’s unique value proposition to members. “Diamonds are forever,” for example, justifies the jewels’ high price point. And “That was easy,” from Staples, addresses the company’s efforts to make consumers’ shopping experience more convenient. * Create a “wow” website. This means having a website that illustrates your credibility up-front; has a clean, professional, and contemporary look; and includes calls to action. “Your site should tell people what to do once they get there,” Gill says. “It should lead people through.” * Implement a culture of Kaizen, or continuous improvement.
“The definition of a brand is what people say about you when you’re not in the room,” says Gill, borrowing from Amazon.com’s Jeff Bezos. Live the Kaizen concept, she concluded.

Embrace bags fly free moment CUNA Council told

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LAS VEGAS (3/21/11)--The time is right for credit unions to grow market share. But it's up to credit unions to seize the day. Consumers’ disgust with banks’ predatory practices and the recent taxpayer-funded banking industry bailout gives credit unions the perfect opportunity to build market share, says Patrick Adams, president/CEO of St. Louis Community CU and master of ceremonies at the 18th Annual CUNA Marketing & Business Development Council Conference in Las Vegas last week. “This is our ‘bags fly free’ moment,” says Adams, referring to Southwest Airline’s popular brand differentiating practice of not charging passengers for their first piece of checked luggage. “If we can stay here and hold our costs, we’ll gain market share. Don’t lose this opportunity.” Credit unions overall have sufficient capital to grow, he says. Before the recession, credit unions’ average capital-to-assets ratio was 11%. As the nation begins to recover, this ratio remains at a healthy 10%. “We can take on more growth." Lack of growth was one reason former beer monolith Anheuser-Busch was taken over by a Belgian beer company, Adams says. He says the failed suds supplier serves as a cautionary tale for credit unions, having made a “six pack” of mistakes:
* It underestimated its competition. “A 900-pound gorilla eats an 800-pound gorilla every day,” Adams notes. Apparently, “too big to fail” doesn’t apply to beer makers. * It underestimated the importance of relationships. Anheuser-Busch’s founder had a poor relationship with the conglomerate that eventually took it over. * It believed its own public relations. The beer maker’s CEO was surrounded by yes-men who didn’t challenge his decisions. * Lack of expense control. Severe inefficiencies played a big role in the decline of Anheuser-Busch. Companies today must partake in “expense management on steroids,” Adams says. * Lack of board independence. Like Anheuser-Busch’s management team, the company’s board didn’t raise important questions and issues. * Lack of growth. The company was complacent and lacked innovation. As a result, it didn’t grow.
“You can never be satisfied,” Adams says.

CU in St. Louis in 1M FHLB affordable housing grant

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ST. LOUIS (3/21/11)--St. Louis Community CU and Better Family Life Inc. received two grants totaling $1 million from the Federal Home Loan Bank of Des Moines' Affordable Housing Program to assist residents in buying their first home or repairing a home. Of the $1 million, half will be allocated to help first-time home buyers with a down payment and closing costs (St. Louis Business Journal March 17). It also will help provide home ownership education for St. Louis city and county residents. Qualified buyers will be determined by income guidelines set by the Department of Housing and Urban Development. They will receive up to $3,300. The other half of the grant will go toward repairing qualified homes in the 26th Ward. Up to $10,000 is available for each project. Both programs are forgiveable in five years. Each year the Federal Home Loan Bank of Des Moines commits 10% of its annual net income to developing affordable housing.

Maine CUs expand in 2010

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PORTLAND, Maine (3/21/11)--More consumers continued to choose Maine’s credit unions for financial services in 2010, as assets, savings, loans, and membership all reflected increases, according to year-end statistics of Maine’s 64 credit unions reported the Maine Credit Union League. Combined assets at Maine’s credit unions rose to $5.39 billion, an increase of 3.8%; loans grew 2.3% to nearly $83 million; savings increased 4.5% to more than $206 million; and membership grew 0.7% for a net gain of 4,115 members. Membership at Maine’s credit unions now stands at 610,720. As Maine consumers strive for financial stability in a recovering economy, they can trust that credit unions will remain safe, strong and growing in the many ways they work to serve their members, said John Murphy, league president. “Now more than ever, Maine consumers can save on financial services thanks to lower fees and better rates on savings and loans offered by Maine’s credit unions,” Murphy said. “Maine credit unions have also demonstrated their commitment to helping members through tough times, from offering special loan programs to help with the high cost of heating their homes, to taking an active role in consumer protection and education efforts, making it all contributing factors why membership grew in 2010.” Maine’s credit unions also increased accessibility in 2010, with nearly 215 ATM locations throughout the state with the surcharge-free ATM network (SURF), and a shared-branch network that enables credit union members to conduct most financial transactions at nearly 140 locations in Maine. That is more than two-and-a-half times more than any other financial institution in the state. Also, Maine credit unions continued to offer new technology, including mobile banking, so members can deposit checks at home, as well as other tools and resources. “Using a Maine credit union has never been more convenient with enhanced access online, in-person and statewide,” Murphy added.

SECU launches estate planning program with loan feature

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RALEIGH, N.C. (3/21/11)--State Employees’ CU (SECU) in Raleigh, N.C., recently piloted a successful Estate Planning Essentials Program to volunteers and has now launched the program to members statewide--this time with an added loan feature. SECU began offering the program to fill member needs for basic estate planning, including a will, a critical element of any financial plan. The new loan product will help members who do not have a will and are deterred by the expense of having one prepared. The loan, offered at a 10.75% rate, provides members up to 12 months for repayment, for an average monthly cost of about $32. More than 3,000 members, including employees and volunteers, participated in the program. Through the program, a member’s estate planning package can include a will with possible trust provisions, a durable power of attorney, a healthcare power of attorney and living will, and Health Insurance Portability and Accountability Act Authorization--all prepared by an estate planning attorney who has agreed to complete the documents at a set member price. Services included in this basic program are priced at $250 for an individual and $350 for a couple with substantially similar estate plans and whose documents are prepared at the same time. Members who require more complex planning can work with SECU trust representatives and a local attorney of the members’ choice.

NASA FCU to aid members if government shuts down

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UPPER MARLBORO, Md. (3/21/11)--In response to a possible federal government shutdown on April 8, NASA FCU, with $1.6 billion assets, Upper Marlboro, Md., has said it will provide aid for its members employed by the federal government. If Congress does not approve the federal budget, or fails to extend its current continuing budget resolution, the $1 billion asset credit union will offer federal government members, including contractors, a 0% interest Paycheck and Furlough Relief Loan to cover delayed paychecks or furloughs PR Newswire March 17). NASA FCU services--online, mobile, in-person and over the phone--will be available despite any possible shutdown. “We’re standing by in the event of a federal government shutdown,” said NASA FCU President/CEO Doug Allman. “We’ve always been here for our members, especially in times of financial uncertainty.” The program is also available to new members who join the credit union and meet the program’s criteria. The loans will cover federal employees’ net wages interrupted by a federal government shutdown. For members with delayed paychecks, the 0% interest loans will be offered up to 30 days. After 30 days, loans would convert to a 12-month signature loan at the current annual percentage rate. For furloughed federal workers, a 12-month signature loan will be available with preferred rates, including 0% interest for the first 30 days.

N.C. CUs join builders on home-efficiency standards

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GREENSBORO, N.C. (3/21/11)--North Carolina credit union representatives joined leaders in the home-building industry on Tuesday to discuss home energy-efficiency standards at the Inaugural North Carolina Energy Efficiency Alliance (NCEEA) Summit in Cary, N.C. The event was hosted by the North Carolina Energy Office, Appalachian State University, Advanced Energy and Southern Energy Management, said the North Carolina Credit Union League (Weekly Update March 18). The NCEEA Summit brings together leaders from the home building industry to discuss ways to bring affordable, energy-efficient housing to North Carolinians. Its goal is to create at least 2,500 Energy Star-rated homes in the next 12 months. Representing the mortgage lending industry at the summit, three credit union representatives told how the NCEEA can market “green loans” to new home buyers. The representatives were: Spencer Scarboro, senior vice president of mortgage lending at State Employees’ CU, Raleigh; Melissa Malkin-Weber, green initiatives manager at Self-Help CU, Durham; and Mickey Fanney, director of political affairs with the North Carolina Credit Union League. The summit focused on what is going right and wrong in home buying, and what can be done to help promote energy-efficient housing to new home buyers. Others that were represented included: home appraisers, mortgage lenders, real estate agents, home energy raters, builders, utilities and NCEEA partners. Self-Help CU has been a longtime advocate for affordable energy efficiency building practices for low- and moderate-income homeowners, said Malkin-Weber, adding there is great value in promoting energy-efficient housing. “These are folks who often pay a disproportionate amount of their income towards utility bills,” Malkin-Weber told the league. “I hope the industry will take a lead in this really important sector.” The group will provide results to summit participants soon.

AVCUs contest winner rebuilding life after fire

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WINDSOR, Vt. (3/21/11)--The Association of Vermont Credit Unions (AVCU) helped a woman and her husband rebuild their life after their home was destroyed by a fire brought on by a severe windstorm. AVCU named the couple the winners of the CU CheckCard Family Land “Winter” Fun Edition promotion.
Donna Limoges (right) has been a member of Covered Bridge CU in Windsor, Vt., for 15 years. She told Bryan Kent (center), vice president of the Association of Vermont Credit Unions (AVCU) that the credit union has “been there” for her so many times that she refers to CEO Linda Kidder (left) as the “George Bailey”--the main character in the film “It’s a Wonderful Life”--of Windsor. AVCU recently helped Limoges and her husband after a fire destroyed their home--by naming the couple the grand prize winner of an AVCU contest. (Photo provided by the Association of Vermont Credit Unions)
Donna Limoges has been a member of Covered Bridge CU in Windsor, Vt., for 15 years. She told Bryan Kent, vice president of the Association of Vermont Credit Unions (AVCU) that the credit union has “been there” for her so many times that she refers to CEO Linda Kidder as the “George Bailey”--the main character in the film “It’s a Wonderful Life”--of Windsor (Newslines Express March 18). A violent February windstorm caused a tree to crash through the roof of the Limoges’ Cornish, N.H., home. The falling tree then landed on their wood stove, starting a fire that quickly raged throughout the home, destroying it and virtually all of their possessions. Having no other alternative, her husband converted a large shed, which had escaped damage from the storm and fire, into living quarters where the couple has been living on limited resources ever since. When Kidder finally reached Limoges to inform her she’d won not only the prizes in the giveaway, but also $1,500 in cash, Limoges and her husband were overwhelmed, said AVCU. In addition to the cash, they now have a new 32-inch LCD TV, a surround-sound entertainment system with a Blu-Ray player, and a Wii game console, to fill the living room of their new home once they begin rebuilding this spring.

Three CU CEOs on New York Feds advisory council

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NEW YORK (3/21/11)--Three credit union representatives are among the 11 members appointed to the newly formed Community Depository Institutions Advisory Council (CDIAC) for the Second Federal Reserve District, announced the Federal Reserve Bank of New York. The credit union representatives are:
* Robert G. Allen, president/chief executive officer, Teachers FCU, Farmingville, N.Y.; * Michael J. Castellana, president/chief executive officer, SEFCU, Albany, N.Y.; and * Mary D. Madden, president/chief executive officer, Hudson Valley FCU, Poughkeepsie, N.Y.
The purpose of the council is to provide information and insight to the New York Fed from the perspective of community depository institutions. The council will replace the New York Fed’s Thrift Institutions Advisory Panel. The New York Fed president and first vice president will meet with the council twice a year to discuss regional economic and financial conditions, and other issues confronting community depository institutions. The board of governors of the Federal Reserve System has created a national CDIAC to broaden the scope of input on economic credit conditions. To complement the national effort with regional perspectives, each Federal Reserve Bank is establishing a district council comprising representatives from that district’s community banks, thrifts and credit unions. The New York Fed oversees the Second Federal Reserve District, which includes New York state, the 12 northern counties of New Jersey, Fairfield county in Connecticut, Puerto Rico and the U.S. Virgin Islands. Though it serves a geographically small area compared with those of other Federal Reserve Banks, the New York Fed is the largest reserve bank in terms of assets and volume of activity.

CU System briefs (03/18/2011)

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* ST.PETERSBURG, Fla. (3/21/11)--PSCU Financial Services has named Michael J. Kelly as the organization's new president/CEO, announced Board Chairman Craig Esrael, president of First South Financial CU, Bartlett, Tenn. Before joining the credit union service organization, Kelly was general manager of Payments Network for Fiserv Inc. in Morris Plains, N.J. There he was instrumental in creating and implementing payments strategies now used by thousands of financial institutions nationwide. He also was responsible for identifying new markets and delivery channels for the payments network. PSCU Financial Services is owned by more than 680 credit unions … * BATON ROUGE, La. (3/21/11)--E FCU CEO Ken Bordelon has announced he will retire, effective July 1. Tyler Grodi has been selected to succeed him as CEO. Grodi will take the reins May 1, and will work with Bordelon during his last two months. Bordelon made his formal announcement to the board and staff last October, said the Louisiana Credit Union League (eNews March 16). Bordelon has worked with credit unions since 1981, when he became manager of Alexandria (La.) USDA FCU. He joined E FCU in 1996 and was promoted to CEO in 1998. He led the credit union from a single-sponsor credit union with $81 million in assets to a full-service, community credit union with more than $250 million in assets. In 2007, the former president of the Baton Rouge Credit Union Chapter was awarded the league's Lifetime Achievement Award … * CLAREMONT, Calif.(3/21/11)--Economist and market analyst Dwight Johnston, formerly with WesCorp FCU, announced he is launching a company, Dwight Johnston Economics. Johnston has more than 35 years of experience in the investment industry. His company produces commentaries, forecasts, media and personal appearances for the public at dwightjohnson.com. His Telly-award winning podcast on iTunes, "OnDeck with Dwight Johnston," is now in an updated version and posted on his homepage, soon to be available on iTunes … * HARRISBURG, Pa. (3/21/11)--Robert H. Moyer, a former board member and past chairman of Hershey (Pa.) FCU, died March 10 in Lebanon, Pa., according to the Pennsylvania Credit Union Association. He worked for the Hershey Foods Corp. for 37 years and served on the credit union's committees and board from 1976 to 2000, when he retired from the board. Since then, he has served as director emeritus and attended many HFCU board meetings and functions. He was instrumental in opening a branch in Lebanon County in 1998 (Life is a Highway March 17) …

Why Capital CU is IPost CrescentsI Small Biz of Year

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KIMBERLY, Wis. (3/18/11)--Capital CU, based in Kimberly, Wis., has been named The Post-Crescent's Small Business of the Year, according to the newspaper (March 16). Alan Zierler, CEO, was lauded for his voluntarism and the $393.1 million asset credit union's many charitable projects, including Rebuilding Together-Fox Valley, Haitian relief, food pantries, blood drives, financial literacy tours and the first Salvation Army Red Kettle match day in December. The 120 staffers who volunteered in programs logged nearly 1,300 hours outside the office, with top performers thanked at an annual company-paid gala dinner. Other reasons it was chosen:
* It boosted its outward physical presence in the community with a purchase of the $1.5 million former Landmark Building for its administrative offices at one of the most prominent intersections in Kimberly. * It increased assets 10% this year to $393 million, and added another $29 million in deposits last year, indicating members believe their money is safe. The past four years have seen 45% growth. It ranked in the top 10% of credit unions nationwide for safety and soundness in a bank rating service's ratings, gaining a "superior" five stars. * It is the third largest credit union in Fox Cities. Zierler noted the No. 1 goal is not to be No. 1 in assets but to remain profitable so it can grow membership and outstanding loans. Last year, Capital lent more than $90 million in new money, and it doubled its business lending portfolio in the past two years. * Its sound lending practices have meant much fewer foreclosures than the overall industry. It had 15 foreclosures out of more than 1,200 home loans, and its delinquency rate is one half of 1%, Zierler told the publication.

CU Mortgage fraud insurance claim case remanded

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NEW YORK (3/18/11)--A federal court in New York has remanded a case involving insurance coverage on claims on mortgages fraudulently sold to Fannie Mae by U.S. Mortgage/CU Mortgage back to a New York state court. TCT FCU, based in Ballston Spa, N.Y., had sued Cumis Insurance Society, of Madison,Wis., and Waverly, Iowa, and 11 homeowners whose mortgages were sold in the fraud. It won the remand back to the original trial-level court, the New York Supreme Court, Saratoga County, in a decision by Senior U.S. District Court Judge Frederick J. Scullin Jr. of the U.S. District Court Northern District of New York , Syracuse. The lawsuit stemmed from claims the credit union submitted with Cumis. The insurance company denied coverage on the claims on the ground that the insurance provided in that bond did not cover the type of losses the credit union suffered as a result of CU National's action, according to court documents. On Feb. 8, 2010, Cumis filed a notice of removal of the case to the U.S. District Court in Syracuse, noting that federally chartered credit unions are considered national citizens unless a "localization" doctrine applies. A localization doctrine would indicate that the credit union is a citizen of its home state by virtue of its activities there. The district court found that TCT is considered a New York citizen because its activities are localized to New York, and therefore would have met the "complete diversity" principle that requires federal suit parties to be from separate states but for the presence of the homeowner defendants in the case. In an earlier case involving both TCT and Cumis, TCT conceded it was diverse to Cumis. Cumis also argued that the homeowner defendants were fraudulently joined in the case to defeat the "diversity" requirement, because all the homeowners are from New York. The doctrine of fraudulent joinder is meant to prevent plaintiffs from joining nondiverse parties in an effort to defeat federal jurisdiction, Cumis maintained. The court found that Cumis met its burden of proof on the initial diversity issue, but did not meet the burden to show that the defendants were joined fraudulently. That means the individual defendants' presence in the case defeats the complete diversity requirement, and the federal court lacks subject matter jurisdiction over the case. The case will now return to New York state court.

NCUF teams with MEMBERS TRUST for CIF options

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MADISON, Wis. (3/18/11)--The National Credit Union Foundation (NCUF) and MEMBERS Trust Co., FSB have entered into a strategic alliance to expand options so credit unions can make charitable contributions to the foundation through the Community Investment Fund (CIF). CIF is a way for credit unions to participate in and support the programs and services that NCUF and the state credit union foundations provide. The alliance will give credit unions new alternatives, including an insured CD Custodian Account and a Part 703 compliant Investment Trust. NCUF and MEMBERS Trust Co. are also finalizing details for another CIF option in the form of a Charitable Lead Trust. With this trust, NCUF will receive income payments for a fixed period of time after which the assets and any excess earnings over the annual income payments would be returned to the credit union unless the term is renewed. The investments, as with the standard Charitable Lead Trust created for U.S. foundations, would be allocated with bonds and equity securities. In its 12th year, CIF gives credit unions the ability to leverage their investments to support innovative credit union programs. Credit unions invest in a CIF account through a corporate credit union, MEMBERS Trust Co., or National Cooperative Bank. Each quarter, half of the CIF dividends are returned to investing credit unions. The other half is donated to NCUF, which grants half of its dividend to each investing credit union’s state foundation or league. NCUF uses the remaining portion of the CIF dividend to support its national programs including:
* REAL Solutions; * Credit Union Development Education; * Financial Education Grants; and * CUAid-- Disaster Relief;

Tsunami update CUs helping with donations

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MADISON, Wis. (3/18/11)--Credit unions throughout North America have rallied to assist victims of the devastating earthquake and tsunami in Japan. One credit union, Altura CU, Riverside, Calif., has a special connection to the natural disaster. Riverside and Sendai, one of the hardest hit cities in Japan, have been sister cities since 1957, one of the oldest continuous sister-city relationships in the U.S. Altura has set up a Japan Relief Fund and is urging its 106,500 members to donate $1 each. "The images of the tragedy in Japan are stunning. We want to do what we can to help," said Altura CEO Mark Hawkins. "Yet we understand that people in the Inland Empire have their own financial struggles. So we are asking that each of our members contribute just $1. By pooling our donations, we can make a real difference." Donations will be collected for one month, then 100% of the funds collected will be donated to the American Red Cross. Following Haiti's earthquake in 2010, Altura members donated $42,000. Other efforts are under way from credit unions in other states. Ten credit unions in the county of Hawaii have agreed to serve as collection points for the “Aloha for Japan” relief effort, joining in a statewide campaign with the largest banks in Hawaii to assist people in Japan (damontucker.com March 16). Participating credit unions in the county of Hawaii include HFS FCU, Hilo; Hawaii Community FCU, Kailua Kona; CU Hawaii FCU, Hilo; Hawaii County Employees FCU, Hilo; and Hawaii First FCU, Kamuela. Also joining in the relief effort are the Independent Employers Group FCU, Hawaii; North Hawaii Community FCU, Honokaa; Ka’u FCU, Naalehu; Big Island FCU, Hilo; and Onomea FCU, Papaikou. “With such close ties between Hawaii and Japan, we are very happy to join in this collaborative effort of credit unions across the island to support our family, friends and all those in Japan suffering during this traumatic time,” said Bernard Balsis, president of the Independent Employers Group FCU. Redwood CU (RCU), Santa Rosa, Calif., is accepting contributions to the Red Cross Japanese Disaster Relief Fund to directly assist the victims of the earthquake and tsunami in Japan. All RCU branch locations have been designated as collection sites for donations from members and the general public. Bay FCU, Capitola, Calif., established a fund to provide assistance to Japan. Financial donations will support priority needs in Japan--food, water, temporary shelter, medical services and rescue efforts--through the American Red Cross. A second fund has been set up to provide aid to local residents who were displaced when their boat residences were damaged by strong tsunami currents in the Santa Cruz Harbor. “The victims of this devastation need our help,” said Bay Federal President/CEO Carrie Birkhofer. “The Red Cross and other organizations are doing all they can to care for victims and prevent further tragedy. I hope affected people in both Japan and Santa Cruz will be comforted by the knowledge that many caring people are stepping up to offer their support.” Mazuma CU, Kansas City, Mo., is offering free wire transfers to members who are sending money to Japan to help in relief efforts. From March 15-April 30, any member who wishes to wire money to an individual or organization for relief efforts of the earthquake and tsunami will not be charged the regular fee of $30 for each international wire transfer. “Mazuma is happy to help members who want to do what they can for the insurmountable tasks that lay before the country of Japan,” said Brandon Michaels, Mazuma chief financial officer. “It’s the least we can do to help.” In Canada, Saskatchewan credit unions are accepting cash donations to support Red Cross relief efforts in Japan. Donations will be accepted in all Saskatchewan credit unions until April 15. The 9.0 earthquake--the largest in Japan and the fifth largest in the world--knocked the island of Japan eight feet closer to the U.S. and produced a 23-foot tall wall of water that slammed into Japan’s eastern coast. Thousands are feared dead in Rukuzentakata and Sendai. It also created nuclear reactor concerns about five nuclear plants and forced the evacuation of hundreds of thousands people who lived near one of the reactors (USA Today March 14).

Mass. banking commissioner seeks clearer savings ads

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BOSTON (3/18/11)--Massachusetts Commissioner of Banks David J. Cotney asked credit unions and banks to review their deposit advertising to make sure that they are providing a “full and fair disclosure of all material terms of an offer, clearly and conspicuously,” in a letter dated March 8. He reminded managers of financial institutions that they must be in compliance with the Truth in Savings Law, whose purpose is to “allow a consumer to make meaningful comparisons among institutions on similar products,” according to the Massachusetts Credit Union League (e-Weekly March 8). Cotney also cited the state’s consumer protection statute chapter 93A, which protects consumers from unfair and deceptive practices. The letter provides specific examples. To read the letter, use the link.

Report High delinquency default rates on student loans

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MADISON, Wis. (3/18/11)--A high percentage--41%--of student borrowers who receive financial aid to fund higher education face the negative consequences of delinquency or default during the first five years after they begin repaying their loans, according to a new study. About 37% of borrowers who began making repayments in 2005 made timely payments without postponing payments or becoming delinquent, according to the Institute for Higher Education Policy report. Because credit unions are increasingly using student loans to attract young members, the credit unions need to be careful that higher percentages of loans they issue don’t become delinquent or lead to defaults. Other findings of the study include:
* Roughly 15% of student borrowers not only became delinquent, but also defaulted on their loans at some time during the first five years of their repayment term; * About 23% of borrowers used repayment tools and options provided by the federal government to postpone their payments, and therefore, avoid delinquency; * More than one-fourth--26%--of borrowers who began repayments in 2005 became delinquent on their loans, but did not default; and * Most borrowers who left postsecondary education without graduating had trouble repaying their loans. About 33% of undergraduate borrowers who left without a credential became delinquent without defaulting, and 26% defaulted.
To read the report, use the link.

Western Bridge Corp. task force Merger most viable choice

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ONTARIO, Calif. (3/18/11)--The Western States Corporate Realignment Task Force concluded that a merger of Western Bridge Corporate CU and Members United Bridge Corporate CU would be the most viable future for the corporate. However, given federal regulators' recent restriction on corporate mergers, the task force recommended Western Bridge apply for a new charter as a stand-alone corporate credit union. The task force announced its recommendations Wednesday. It also announced that Joan Opp, CEO of Palo Alto, Calif.-based Stanford FCU will be its new chairman, succeeding Dave Chatfield. The task force, which was formed on Sept. 24 is not a league committee nor associated with any corporate credit union. It is a volunteer, independent group of credit union leaders from eight western states; Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah, and Washington. Recommendations included:
* The merger of Western Bridge and Members United Bridge should be implemented at the earliest possible date."Too small to succeed" concerns warrant as much, if not more attention than "too big to fail" concerns. * Since at this time Western Bridge is precluded from proceeding with the merger by the National Credit Union Administration (NCUA), the corporate should move forward to apply for a new charter as a stand-alone corporate credit union, using either a de novo charter or employing a "reverse merger" with purchase and assumption of its operations through an existing--presumably western--non-conserved corporate credit union charter. * While continuing to encourage the proposed merger as the best option, the task force recommended natural person credit unions support the reconstituted Western Bridge by participating in its recapitalization and its services. "This support is imperative in order to help retain a cooperative, unified, affordable system solution for credit unions of all types and sizes owned and controlled by credit unions," the task force said. * In the interest of attracting capital from natural person credit unions, Western Bridge and other corporates should be encouraged to use non-perpetual capital accounts to create necessary accountabilities. "This will create positive and constructive incentives for newly formed corporates to improve their financial performance in the 2011-2013 time frame, rather than relying on the 'comfort' of perpetual capital." To the extent corporates rely on perpetual capital accounts to meet reserves and undivided earnings (RUDE) and leverage targets, fewer natural person credit unions will be willing to recapitalize their corporates. Using non-perpetual capital will be more attractive and put the onus on corporates and NCUA to assure that necessary financial disciplines and long overdue efficiencies are implemented in the broader corporate system. * Natural person credit unions should take several actions to assess whether a stand-along Western Bridge makes the most sense for them. Credit unions should assess attribution assumptions to affirm or disaffirm business model projections, and request a customized pro forma pricing comparison that:
* Models the pro forma based on the natural person credit union's payments and settlements volumes; * Compares pricing for all of its contemplated providers, such as the Fed, a third party bank, Western Bridge and other alternate corporates being considered; and * Compares service level, service quality, service gaps, product mix, and product limitations across all the contemplated providers being considered.
For more details, use the link. The report also outlines the group's guiding principles of system solution, aggregation and universal solution, and several scenarios, pricing and service comparisons with other providers, and more.

New-car shoppers 44 plan financing from CUbank

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IRVINE, Calif. (3/18/11)--Of those consumers planning to finance their next vehicle, 44% plan to obtain vehicle financing pre-approval through a credit union or bank branch, according to a recent study. About 43% plan to secure financing at the dealership at the time of purchase, and 6% plan to apply for pre-approval through an online vehicle financing company, according to a recent study. For new-car shoppers who plan to obtain pre-approval for a loan before proceeding to a dealership, 50% say they do it for the low interest rate, 28% indicate they do so for control in negotiations, 13% do it for convenience, 7% are motivated to reduce time spent at the dealership, and 3% get pre-approval because they have bad credit (PR Newswire March 17). The findings were part of the recent Kelley Blue Book Market Intelligence survey concerning car financing. The study revealed that 66% of new-car shoppers indicated they plan to finance some or all of the cost of their next vehicle purchase; 34% say they plan to pay the entire cost of their next vehicle in cash. Among new-car shoppers intending to finance some or all of their next vehicle purchase, 35% say they would choose a 60-month loan; 23% a 48-month loan; 23% a 36-month loan; 10% a 72-month loan; and 9% a 24-month loan. Of those new-car intenders planning to finance, 48% plan to use money from a trade-in as a down payment and finance the rest, 46% said they would use cash as a down payment and finance the rest, and 6% plan to finance the entire cost of their next new vehicle. Kelley Blue Book also recently expanded its current relationship with Autobytel Inc.’s Car.com to offer kbb.com site visitors with credit challenges and those in need of local auto-finance assistance access to Car.com’s network of participating dealers and lenders.

CUs not hiking ATM fees big banks test 5 surcharges

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NEW YORK (3/18/11)--Although U.S. credit unions and small banks don’t seem to be raising ATM fees, some of the largest U.S. banks are initiating new fees and even testing $5 noncustomer withdrawal charges. The banks’ moves are the most recent examples of new fees that banks are levying on customers to make up for billions of dollars in anticipated lost revenue because of new federal regulations on debit cards and overdraft charges (The Wall Street Journal March 16). JPMorgan Chase & Co., PNC Financial Services Group and TD Bank Financial Group already have amended their ATM policies to collect more fees, the Journal said. Chase is testing fees for noncustomer withdrawals of $5 and $4 in Illinois and Texas, respectively, the Journal said. While large banks are using “scare tactics” by increasing ATM fees at the same time they are battling new debit-card restrictions, credit unions and small banks don’t seem to be raising ATM fees yet, Ed Mierzwinski, consumer program director for the U.S Public Interest Research Group, told the Journal. ATMs nationwide generated $7.1 billion in fees during 2010, consulting firm Oliver Wyman told the publication. To read the article, use the link.

Discovery Webinar on economic outlook draws 1100

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MADISON, Wis. (3/18/11)--Many credit union leaders are more optimistic today than they were at this time last year. But 2011-12 will be just as challenging as the previous two years, but for other reasons, warned CUNA Mutual Group in its first Discovery Webinar of 2011, held Thursday.
Click to view larger image CUNA Mutual Group Chief Economist Dave Colby, right, answers an audience question asked by moderator Phil Tschudy, CUNA Mutual media relations manager, during Thursday’s Discovery Webinar on the economic outlook for 2011-12. (Photo provided by CUNA Mutual Group)
CUNA Mutual Group Chief Economist Dave Colby told about 1,100 registered participants that the next two years will be just as challenging, but for other reasons. The geo-political and geo-economic environment are presenting new challenges to credit unions, and previously deferred decisions by the government must now be made, Colby said in "Is it Over Yet … Or is This the Calm Before Another Economic Storm?" “The economy and credit unions achieved some recovery in 2010, including capital growth and net-worth ratio improvement,” Colby said. However, he warned credit unions will be faced with many risk factors. “We see credit unions managing their key ratios by managing growth. But the biggest challenge remains growing loans, especially short-term consumer loans," Colby said, adding this won't be easy because "consumers are in pay-off mode, and competition will continue from subsidized financing." He outlined some “headwinds” credit unions face, including weak consumer loan demand, regulatory caps on income (debit interchange, nonsufficient funds/courtesy pay) and rising compliance burdens. “All of those will continue to challenge credit unions’ ability to replenish capital by growing their bottom lines.” Further burdening credit unions are risks the economy faces on its road to a full recovery, including prolonged elevated energy prices, continuing credit market uncertainty and external shocks such as terrorism, weather or geological incidents. “The world is in a weaker state, thus the impacts of one of these external shocks would be greater,” Colby added. “All the risks to credit unions go directly to the bottom line and adversely impact our ability to replenish capital,” Colby said. He cited near-term risks that include the likelihood of rising compliance costs and the yet-to-be-written rules coming out of the Financial Reform Act. Longer-term risks are primarily two-fold, Colby said. “As we regain our capital ratios through limiting asset growth, sooner or later expense growth overwhelms us. In the spread business, it’s difficult to earn a positive spread without loans. We also need to redefine our role in consumer financial services," he added. “Boomers expect wealth preservation solutions, while the next wave of borrowers expects point-of-purchase financing. To whom will we be relevant?” Other 2011 Discovery events, which are free to credit unions, include:
* April 18--Lending Trends, presented by Dan Kaiser; * May 24--Technology Strategies and Trends, presented by Rick Roy; * June 18-21--Seventeen Discovery sessions will be offered at the Credit Union National Association's America’s Credit Union Conference (ACUC); * July 19--Regulation double-feature, presented by Bill Klewin & Brad Pricer; and * Oct. 4 – 2--Annual Online Discovery Conference.

CU System briefs (03/17/2011)

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* NEW BERLIN, Wis. (3/18/11)--With help from thousands of members
Click to view larger image Click for larger view
and its 450 employees, New Berlin, Wis.-based Landmark CU raised $30,145 for the Children's Hospital Foundation by selling $1 "links" and $10 "hearts" during its Credit Unions for Kids Chain of Hearts campaign. This represented an increase of 3.8% over the total Landmark raised last year. Joey Marczewski, teller at Landmark's Milwaukee South branch, is shown here chained down and crowned with links. Ron Kase, president of the $1.6 billion asset Landmark, noted that all donations support the Children's Miracle Network Hospital closest to where the money was raised. Nationwide, credit unions have raised $80 million for the Children's Miracle Network Hospitals since 1996. Last year, credit unions raised $8.7 million. (Photo provided by Landmark CU) … * LAUREL, Md. (3/18/11)--Tower FCU employees and members raised more than $24,000 for the Johns Hopkins Children's Center in Baltimore, Md. During Tower's annual "Have a Heart" fundraiser in February. For a donation of $1 or more, Tower members and employees wrote their name or the name of a family member on a colorful paper heart. The hearts were displayed in the $2.26 billion asset credit union's 16 branches and member service center at Tower's headquarters in Laurel, Md. Tower employees competed against each other to see who could sell the most hearts. Top sellers were Doris Aguilar, who raised $213, followed by Stephanie Langr and Jeni Newell, who raised $83 and $61 respectively. Throughout the month, members could buy raffle tickets for a chance to win a three month gym membership valued at $300 and $50 gift certificates to local retailers ...

Survey CU small bank CEOs more positive than in 10

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AUSTIN, Texas (3/17/11)--New regulatory compliance requirements and fee income issues related to Regulation E are the top two concerns voiced by credit union and community bank CEOs, in a nationwide survey that indicates CEOs have a more positive outlook this year. Credit union CEOs were found to be more positive than the bank CEOs. The survey was conducted by Abound Resources, an Austin, Texas-based, growth and technology consulting service for credit unions and banks. Among the respondents were 204 president/CEOs and 225 executives in the chief operating officer (COO), chief information officer (CIO), and chief financial officer (CFO) positions. CEOs in the survey were more positive this year. About 20% reported they were either somewhat or very pessimistic about 2011. That compared with 32% the year before. More credit union CEOs (44%) said they were "somewhat" or "very" optimistic about the year ahead, compared with 40% of community bank CEOs. Overall priorities changed, according to the survey. Last year's top priority was cleaning up the balance sheet; this year's focus is efficiency and growth, said the company. Of those surveyed, 66% of bank CEOs are focusing on growing commercial loans, and 85% of credit union CEOs are focusing on consumer loans. Using technology to increase efficiencies was a No. 2 priority of 74% of the credit union CEOs surveyed and 64% of bank CEOs. Credit union CEOs (62%) also indicated that they would "expand online presence" as an additional priority for 2011. COOs, CIOs and CFOs surveyed named as a top concern getting more value from existing technology and vendor relationships, and shared concerns about information security and compliance. These executives in credit unions added they worry about not having enough resources to complete projects and budget constraints on important projects. "One of the reasons community institutions are so concerned about the regulatory environment is that they don't have internal resources to keep up with all the changes and the documentation required," said Brad Smith, president/CEO of Abound Resources. "For most, external assistance will be required to fully prepare for the coming regulatory requirements." Other key technology findings:
* Credit unions and small bank are focusing their new or replacement technology purchases heavily on mobile banking. However, 70% of credit unions are making consumer remote deposit capture (RDC) their priority purchase, while this is a priority for 27% of banks surveyed. * Asset liability management systems and network equipment/storage/server/virtualization rank as the highest priorities for banks' utilization improvements. Credit unions are focusing on improving the use of their core processing, fraud management and new account and teller systems. * While high on bank executives' lists for contract renegotiation, core processing was surprisingly missing from the credit union executives' top five priorities.
To download the survey results report, use the link.

Prize-linked savings bill moves to Iowa house

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DES MOINES, Iowa (3/17/11)--A bill that would allow Iowa's credit unions to offer prize-linked savings account as an incentive for Iowans to save more money recently passed the Iowa Senate (SF 490) and now moves to the House for consideration, according to the Iowa Credit Union League. “Financial illiteracy is one of the root causes of our current financial crisis and the prize-linked savings program can serve as a tool to help Iowans improve their financial lives,” said Patrick S. Jury, league CEO/president of the league. “The need for innovative ways to save could not be more apparent. If we want to change behavior, we need to change our traditional ways of thinking.” Prize-linked savings programs provide incentives to consumers to save more money regularly by offering various prizes tied to a savings account. The promotions keep the saver motivated to save throughout the year. The result is a learned behavior of savings and more money in Iowans’ pockets. “This project has led to an experiment that has been successfully implemented. This approach targets the low-income population for saving, which may help [low incomers] form better savings habits,” said Dr. Tahira Hira, professor and assistant to the Iowa State University president. For example, for every $25 deposited into such an account at a credit union or bank, the saver would receive a chance to win raffle prizes. Members’ money remains in their account and accrues interest. "It’s important to stress that consumers would not lose a penny of their hard-earned savings,” said Jury. “Whether or not savers win additional prizes, they still have the money they saved plus the interest accrued. These accounts are a no-lose proposition.” This approach has proven successful in other states and has been championed by Harvard Business School professor Peter Tufano and the non-profit he founded, Doorways to Dreams Fund. Eight Michigan credit unions introduced prize-linked savings in 2009. Last year, more than 16,500 Michigan residents opened accounts through the contest, saving $28.1 million. Roughly 56% of participants hadn't saved regularly before, and 59% spent money on a lottery in the previous six months. Michigan credit unions also found that even minor rewards could spur interest: people who won a smaller monthly prize were more likely to deposit more money into their savings the next month. “The time is right for our state to increase its focus on savings habits to shore up household finances and strengthen Iowa’s economy as a whole,” said Jury. “A prize-linked savings program, which requires no public subsidies or taxpayer expense, could help more Iowans build a stronger fiscal foundation. We look forward to working with the Iowa House to advance this legislation.”

20 innovations for CUs released by Filene i3

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MADISON, Wis. (3/17/11)--The Filene Research Institute has released Key Findings: Blueprints for Innovation, a report on the latest findings from its i³--Ideas, Innovation and Implementation--group. The report, by Chief Innovation Officer Denise Gabel, features 15 new idea blueprints designed to fuel credit union growth and five updates on innovations gaining national attention. Blueprints for Innovation includes a detailed examination of Lift, a project that received a grant from the Center for Financial Services Innovation’s Financial Capability Innovation Fund. Blueprints for Innovation includes Filene i³ team projects developed to help credit union members build wealth, navigate financial waters, meet life’s milestones, make community connections, and borrow responsibly. They include:
* Savings Exchange: Empowers low-income individuals with financial literacy and ongoing support while providing small businesses with a low-cost financial service alternative; * R-Bond: Removes roadblocks to retirement savings for small businesses; * 2 Grand Plan: Creates a $2,000 emergency savings fund; * The Signal: Helps members navigate the financial road of disability benefits; * The Big Payoff Loan: Eliminates credit card debt with segmented loans from credit unions; * goalmine: Simplified way to save and invest for college and other life goals; * UMatter: A referral-based exclusive membership for Gen X; * Black Star: Fosters a cooperative environment in the food and drink industries; * VolunTIER: Rewards community volunteers for their commitment and connections through credit unions; * CU Launch: Provides professional services to small businesses through credit union volunteers; * Co-Opera: Makes co-op to co-op lending and borrowing more accessible for all cooperatives; * MI-COOP: Helps Americans achieve the dream of owning their own manufactured home; * 60-Day Loan Guarantee: Builds trust in credit unions by allowing members to return a loan in 60 days; * Be N’ Biz: Connects Gen Y entrepreneurs with credit unions for business creation; and * Lift: Lowers interest and improves credit for members who make payments on time.
Blueprints for Innovation also updates five ideas that are ready to implement and gaining national traction:
* Debt in Focus--An anonymous, debt management tool for credit union members that delivers an actionable plan to help improve their credit profiles and reduce debt; * Prize-linked Savings--An approach to saving for participants to enter prize drawings every time they deposit money into their savings account; * Savings Revolution--A program that allows people to overhaul their financial lifestyles to save money and reduce debt with strategies supported by social media with credit union collaboration; * The Leap--An interactive website that helps members jump into the green revolution by highlighting how to save money and the environment with E-products that are already in place at most credit unions; and * Virtual Finance--A program that allows participants to select and customize an avatar and interact with others in a world that beckons them to experience financial decisions, and introduces critical financial and life concepts over a simulated lifetime.
“We encourage credit union innovators to keep this catalog of ideas at hand as they develop their organization’s goals and tactics for today’s challenging times and consider how these solutions may meet member needs,” Gabel said. Credit unions should review the ideas and evaluate the fit for their organizations, then consider how the ideas might be improved and customized in the spirit of open source innovation, Gabel said. For more information, use the link or e-mail innovation@filene.org.

Former Brit prime minister to headline WOCCU Conference

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MADISON, Wis. (3/17/11)--Former Prime Minister of Great Britain Gordon Brown, MP, will open the World Council of Credit Unions' (WOCCU) 2011 World Credit Union Conference. The annual event and only global credit union conference will be held July 24-27 in Glasgow, Scotland. B
Former British Prime Minister Gordon Brown will keynote the 2011 World Credit Union Conference in Glasgow, Scotland, in July. (Photo provided by the World Council of Credit Unions)
rown's keynote address at the conference's opening general session on July 25 will discuss lessons from his new book, Beyond the Crash: Overcoming the First Crisis of Globalization, and the role that credit unions can play in strengthening the financial system and communities. Brown has been a member of the British parliament (MP) since 1983 when he was 32 years old. He succeeded Tony Blair as Britain's prime minister and leader of the country's Labor Party, serving in the position from 2007 to 2010. Brown previously served as the Labor Government's Chancellor of the Exchequer, running the country's Treasury department from 1997 to 2007. As head of the Treasury, he established the winter fuel allowance for poor pensioners, lifted a half million children out of poverty, introduced a minimum wage, created the trust fund and tax credit for children, and more. He also negotiated the government's debt cancellation for the world's poorest countries and helped stay true to his commitment to spend 0.7% on aid to the poor. He may be most recognized for devising a plan to help European and U.S. governments stabilize the global financial sector in 2008. "The challenge for our generation is to create global institutions that reflect our ideas of fairness and responsibility, not the ideas that were the basis of the last stage of financial development," Brown has said. "Combine the power of our moral sense with the power of communications and our ability to organize internationally. That, in my view, gives us the best opportunity as a community to fundamentally change the world." For more information about the conference, use the link.

Last call for WOCCU DSA nominations

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MADISON, Wis. (3/17/11)--The deadline for nominations for World Council of Credit Unions' (WOCCU) Distinguished Service Award (DSA) is March 25. Nominees for the global credit union movement's most distinguished honor must be submitted to WOCCU headquarters. Recipients will be honored at WOCCU’s World Credit Union Conference, July 24-27 in Glasgow, Scotland.
Credit Union National Association Chair Harriet May accepted her 2010 Distinguished Service Award from World Council of Credit Unions Chair Barry Jolette. (Photo provided by World Council of Credit Unions)
DSA honors are presented to individuals and organizations that have provided exemplary service to the global credit union movement in support of the concept of improving people’s lives through credit unions. WOCCU does not award the DSA every year, choosing instead to bestow the honor based on the viability and worthiness of candidates in the eyes of the awards committee. “The Distinguished Service Award recognizes the best of the best within the credit union movement,” said WOCCU Director Ron Hance, president/CEO of Heritage Family CU in Rutland, Vt., and chair of the WOCCU Awards Committee. “Our hope is that DSA will continue to foster excellence in service among credit union individuals and organizations worldwide.” In 2010, DSA honors were awarded to Lech Kaczyñski, the deceased president of Poland who was central in helping establish the country’s credit union movement; Credit Union National Association Chair Harriet May, president/CEO of GECU of El Paso, Texas; and Credit Union Executives Society, the Madison, Wis.-based professional development organization for credit union executives. “We’re not an island unto ourselves, something I realized as I reached out to our neighbor to the south, working in ways that impacted my government, my community and my country,” said May upon receiving the award at the 1 Credit Union Conference in Las Vegas last July. “If I have been one drop in the sea that lifts the life of one individual, then I have been successful.” In the case of individuals, DSA recipients may be WOCCU member organization officers, directors or representatives; international credit union pioneers; field technicians with a long and outstanding service record; or persons whose actions have benefitted global credit union development. WOCCU may present up to three individual awards in a single year. Institutional recipients may be organizations or agencies that have provided financial or technical assistance to develop international credit union movements and their service infrastructures over an extended period of time. WOCCU presents no more than one institutional award each year. Nominations must be made by a WOCCU member organization. For more information, use the link.

Shift in deposits a factor in lending says study

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CHICAGO (3/17/11)--Investor aversion to risk and low interest rates on long-term investments are shifting where clients are putting their funds, according to an analysis of the Federal Reserve's Flow of Funds report. Dramatic shifts in deposits for 2010 are contributing to lenders lending less and to only high quality borrowers, according to the analysis by Moebs Services Inc., a Chicago-based consulting firm. When banks and credit unions know their deposits will be around for months, they lend, CEO Michael Moebs said in a press release (Professional Services Close-Up March 16). He said banks have restricted their lending because of a significant consumer shift toward short-term deposits and banks' efforts to increase capital to asset ratios. The deposits have shifted to checking and money market deposit accounts at financial institutions from traditional sources such as retail certificates of deposit (CDs) and jumbo CDs. Last year, retail and jumbo CDs dropped to 22.4% of total deposits from 31.7% in 2007. Money market mutual funds declined to 23% from 26.2% for that period. CDs with longer terms have low rates driven in part by bank efforts to reduce long-term deposits to increase capital-to-asset ratios, said the Moebs analysis (Investment News March 15). Credit Union National Association Chief Economist Bill Hampel said that there's more to the shift than an institution's desire to curtail growth. "In addition to banks and credit unions moderating growth to maintain capital ratios, households are also using the money they might otherwise have placed in deposits or money market mutual funds to pay down debt, because deposit interest rates are much closer to zero right now than existing loans are," Hampel told News Now. The Fed's Flow of Funds report indicated that checking account deposits rose for both interest and non-interest types to 7.7% of total deposits in 2010 from 5.2% in 2007. Money market mutual funds deposits fell to 23% last year, compared to 26.2% in 2007. It also noted that total of insured and uninsured deposits dropped $800 million--to $12.3 trillion at the end of 2010. In 2007, those deposits weighted in at $13.1 trillion. Moebs attributed the drop to the recession and reduced earnings by workers, said Investment News.

CU System briefs (03/16/2011)

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* ST. PAUL. Minn. (3/17/11)--Following the introduction of the Small Business Lending Enhancement Act on March 9, Minnesota Credit Union Network President/CEO Mark D. Cummins used the press to advocate for the bill’s passage. A regular columnist in the Twin Cities publication Finance & Commerce, Cummins said that the lack of available credit for small businesses could be remedied by Minnesota credit unions--if the arbitrary cap on credit union business lending activities were lifted. Working to meet the demand of their business-owning members, Cummins pointed out in the March 15 column that credit unions' member business lending has grown 15% during the last year, while bank business lending has decreased 11%. “And credit unions could do even more if given the capacity, allowing for greater capital expenditures, greater economic activity and, ultimately, the creation of more jobs,” he said. “America’s small businesses are the engine of growth of our nation’s economy. At a time when small businesses need more options--not fewer--credit unions are in a position to help.” The Credit Union National Association has backed bills introduced this week in Congress to lift the cap to 27.5% of assets, from the current 12.25%. … * RALEIGH, N.C. (3/17/11)--Coastal FCU announced Wednesday it will begin offering teller services from 7 a.m. to 7 p.m. seven days a week. The increased hours are possible though its implementation of a Personal Teller System, a video interface that allows tellers to provide traditional services to multiple branches from a single remote location at Coastal's Raleigh, N.C., headquarters. The $1.9 billion asset Coastal has upgraded its branches to the system for the past two years and extended weekday service and added Saturday hours, said Larry Wilson, Coastal's president/CEO. "Now that we've fully realized the capabilities and efficiencies offered by the system, we're able to further expand our Saturday hours and add Sundays, without making a significant impact on resources or staffing needs." This weekend, the credit union wills start a staggered rollout, beginning at three locations … * Vancouver, Wash. (3/17/11)--Vancouver police have arrested Nicholas Reynold Duncan, 18, of Vancouver for allegedly placing a skimmer and pinhole camera on an ATM earlier this month at Lacamas Community CU. He was arrested Friday after a resident saw the ATM's surveillance image of a man setting up the devices and called police. Police said it does not appear any financial information was compromised at the ATM but reminded citizens to report any suspicious devices near the credit card slot at ATMs or gas pumps (KATU.com March 10 and Columbian.com March 15) … * WASHINGTON (3/17/11)--Rudy Hanley, CEO of SchoolsFirst FCU, Santa Ana, Calif., has been re-elected chairman of the board of trustees at the Trust for Credit Unions. The trust, a mutual fund family solely for credit unions, was created in 1987 by industry leaders seeking more investment options as liquidity in the movement swelled. The board of trustees, which meets quarterly, is composed of eight members from credit unions and outside professionals. The fund's administrator, CUFSLP, is a partnership of 39 credit unions with Callahan Financial Services, the fund's distributor, serving as general partner … * SALT LAKE CITY(3/17/11)--Mountain America CU President/CEO Sterling Nielsen has been recognized as one of Utah's Most Influential People for 2011 by Utah Business magazine for outstanding business leadership. Every three years the magazine forms a panel to determine business executives, entrepreneurs, nonprofit leaders, artists, politicians, university presidents and others who work to create a robust economy and better quality of life in Utah. The honor is awarded to key individuals who help shape the state's economic climate. Nielsen shared his philosophy: "Be yourself and live true to your beliefs. Never compromise who you are and what you stand for. I have faced many situations where that advice wasn't always the easy path to follow. At the same time, I have never regretted any action where I followed that simple advice." The $2.8 billion asset credit union has more than 60 branches in four states serving more than 350,000 members. It has been honored four times as one of "Utah's Best Companies to Work For" by Utah Business magazine …

CU System briefs (03/15/2011)

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* COMMERCE CITY, Colo. (3/16/11)--Denver-based Westerra CU has been named presenting sponsor for the MLS Cup Champion Colorado Rapids 2011 season. The soccer team and credit union brands will be incorporated in a new composite logo marking the partnership, which is the first of its kind in the club's history. Westerra CU President/CEO C. Alan Peppers noted that the $1.2 billion asset credit union and soccer team "share a commitment to our local community and the kind of teamwork it takes to produce excellence." The partnership includes increased community involvement focusing on the Rapids Youth Academy, Colorado youth soccer initiatives and education, the Rapids and Commerce City "4thFest," exclusive benefits and opportunities for Westerra's members, and more. The sponsorship will extend to the 2012 and 2013 seasons. Financial terms were not disclosed … * MADISON, Wis. (3/16/11)--Heritage CU, based in Madison, Wis., has promoted Anita Rauch to president. Bob Lestina will remain the credit union's CEO until his retirement. Rauch has worked with the $163.4 million asset credit union for 28 years, serving the last eight years as its chief operating officer. Heritage CU has more than $200 million in assets … * ST. LOUIS, Mo. (3/16/11)--Michael R. Miodunski, former manager of Electro Savings CU, St. Louis, died Feb. 24 at the age of 84. According to the Missouri Credit Union Association, Miodunski served several positions at the Missouri Credit Union League before his service at the credit union. He was living in Seguin, Texas, at the time of his death. He is survived by his wife, four children, five grandchildren and seven great-grandchildren (The Missouri difference March 11) …

CU rates are better deal CUNA details in letter to editor

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WASHINGTON (3/16/11)--Credit unions' rates remain a better deal for consumers than bank rates, Credit Union National Association (CUNA) Chief Economist Bill Hampel said in a letter to the editor of American Banker, which was published Tuesday. Hampel's letter addressed what he called "mixed up" assertions from an earlier letter published on March 8 and that strove to say banks pay higher rates on savings. CUNA's letter made three points:
* Financial institutions match competitive offers on rates, but the earlier analysis "would require that banks offer better than posted rates significantly more frequently than credit unions do. That is doubtful," Hampel said. * The earlier letter compared the average cost of deposits at banks and credit unions, and said banks have a higher average cost--and therefore pay higher rates on consumer deposits. However, said Hampel, the analysis actually "excludes direct deposit accounts from the denominator for banks, boosting the average yield while leaving in the almost equivalent 'share drafts' for credit unions. Credit unions typically pay interest on share drafts, but at much lower rates than on other types of deposits." * The analysis is also "mixed up because of the very different mixes of credit union and bank deposits," said Hampel. "Credit union deposits are virtually all retail. Almost nonexistent on credit union balance sheets are large, negotiable certificates of deposit and brokered deposits, both of which tend to pay much higher rates than consumer deposits."
Thirty percent of bank assets are in banks with more than $10 billion in assets. "These larger institutions are most likely to rely on more expensive wholesale funding, driving up their average cost of deposits," Hampel wrote. "Only 5% of credit union assets in the group are in credit unions that size. So the average cost of credit union deposits represents rates paid to consumers while the average cost on bank deposits is driven by a mixture of consumer and wholesale rates." "Therefore, there is no reason to doubt the basic reality revealed by rate-tracking firms: credit union rates and fees are more consumer friendly than at banks," Hampel said. Hampel also noted that "over the recent financial crisis the National Credit Union Share Insurance Fund has fared much better than the Federal Deposit Insurance Corp. (FDIC). So far, credit union insurance premiums have been quite a bit lower than at banks, and over the next decade, even after the FDIC's latest assessment changes that favor small banks, insurance costs to credit unions and community banks will be similar to each other," he concluded.

League Fla. CFO FBA ask FIs to waive holocaust-payment fees

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TALLAHASSEE, Fla. (3/16/11)--The League of Southeastern Credit Unions has joined Florida’s chief financial officer (CFO) in asking the state’s financial institutions to waive wire transfer fees charged to Holocaust survivors when receiving compensation or reparation payments, according to a release from the World Jewish Congress. The league joined state CFO Jeff Atwater and the Florida Bankers Association in the request. Atwater wrote a letter asking the chief executive officers of the financial institutions doing business in Florida to sign a commitment pledge to voluntarily waive the wire transfer or processing fees on Holocaust-related reparations. The fees range from $10 to $40 per transaction. “The transfer fee on Holocaust reparation payments essentially amounts to a 10% tax on each payment a survivor receives, a significant burden considering that the vast majority rely on these payments to make ends meet,” Atwater said. He added that waiving the fee “is a powerful reflection of the willingness of Florida’s financial community to contribute to the well-being of this important group of Floridians.” Seventeen financial institutions with more than 1,800 branches statewide have pledged to waive wire transfer fees for Holocaust survivors, according to Atwater’s office. Roughly 12,500 Florida Holocaust survivors and their families receive about $300 to $350 in monthly reparation payments.

Fed tax payment rejected message one of new scams

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MADISON, Wis. (3/16/11)--With tax season and the recent tsunami/earthquake disaster in Japan, the climate is ripe for financial scams. Several fraud attempts have been reported nationwide. Since October, Internet Crime Complaint Center (IC3) has received more than 150 complaints reporting that consumers received fraudulent e-mails titled “LAST NOTICE: Your Federal Tax Payment has been rejected.” E-mails stated, “The problem is that system doesn't process your company ID on holidays and we moved your tax payment batch to a waiting list.” Recipients were then directed to click on a link to obtain details about their company’s status and tax payment batch file. Some complainants use the electronic system to pay their estimated quarterly taxes, so the e-mail appeared relevant. Other related phishing e-mails claimed, “the identification number used in the Company Identification Field is not valid.” Recipients were directed to visit hxxp://eftps.gov/r21 and “check the information and refer to Code R21 to get details about your company payment in transaction contacts section.” Another recent complaint filed with the IC3 reported the same type of phishing e-mail except this time, recipients were directed to open an attachment contained in the e-mail. The e-mail was titled “Your Federal Tax Payment Notice.” Like the others, it claimed, “the identification number used in the Company Identification Field is not valid.” To entice the recipient to open the attachment, the e-mail stated, “check the attached information and refer to Code R21 to get details about your company payment in transaction contacts section.” In addition to keeping members apprised of such scams, credit union themselves are receiving complaints about other scams, such as debit card and texting scams. Members of two Massachusetts credit unions were warned to keep a close eye on accounts linked to their debit cards after some apparently fraudulent activity was noticed. Leominster (Mass.) CU, with $596 million in assets, and GFA FCU, with $326 million assets in Gardner, Mass., posted warnings on their websites. GFA FCU also e-mailed its members. Callers to Leominster CU were warned about fraudulent debit card activity in states other than Massachusetts (Worcester Telegram & Gazette March 12). The credit unions said they have implemented measures to protect members’ accounts, and these could cause members debit cards to be declined for certain transactions. Leominster CU Senior Vice President Carol Southworth told the newspaper many financial institutions experienced security breaches through either merchant sites or sites where credit card transactions are processed. Several credit unions and banks are issuing warnings and urging members and customers to monitor their accounts. Dozens of Denver area residents received bogus text messages on March 7 alerting them that their credit cards had been deactivated and directing them to call Sooper CU (Denver 7News March 8). The message instructed recipients to call a number listed in the text. They then received a computer generated message, which directed them to enter their credit card number to be connected to Sooper CU. Sooper CU’s will never ask for credit card or debit card information through telephone, e-mail or text message, its website said. The Texas Credit Union League (TCUL) warned its members of a door-to-door scam targeting elderly individuals in the Corpus Christi and Houston areas (LoanStar Leaguer March 9). The con artists reportedly claim to be from the Area Agency on Aging (AAA), an agency under the umbrella of local Council of Governments (COG) that provide resources and services for elderly citizens. The scammers convince the elder victim to allow them in the house to assist with their financial planning. Representatives from the AAA do not typically solicit through door-to-door activities. Its clients are referred from other community and government agencies. The TCUL offered this list of scams often target the elderly:
* You’ve Already Won … ” Official-looking documents designed to trick recipients into thinking they’ve won money are worded to appear legal. However, they often hide in tiny italic type crucial information, such as the fact that it isn’t really a prize announcement. Seniors who fall for this scam send a check (for a “processing fee”) to a post office box. The victim loses anywhere from $5 to $50. * Telemarketing scams. Seniors are also prime targets for unscrupulous telemarketers. Appreciating the opportunity to engage in conversation with friendly sounding strangers, many seniors are often duped into disclosing sensitive information like credit card and checking account numbers. * Ready-made repairs. In this scam, “gardeners” or “handymen” offer to do “necessary” repair work on just about anything, from roofs to cracked driveways, to trimming shrubs or cutting half-broken limbs. The perpetrators scare seniors into hiring them on the spot to avoid fines due to “city code violations.” Often the scammer insists on payment upfront, and/or once finished with the “job,” demands additional money. Some threaten that to call the police if the victim doesn’t pay. * Charity scams. Scammers will create a fake charity whose name rings familiar to a legitimate charity. Knowing that “causes” such as health and children’s welfare appeal to seniors, the scammer solicits “donations” from unsuspecting victims.
Also, Monday, NACHA warned of a phishing scam perpetrated by individuals who claim to be representatives of NACHA (News Now March 15). The emails, which contain harmful links, have been sent to both individuals and companies and bear the name of NACHA and, at times, the names of fictitious NACHA employees and departments.

Survey Tellers are key to satisfaction

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DENVER (3/16/11)--Tellers have a giant effect on how members/customers feel about a credit union or bank, according to a new study, “Customer Experience with Teller Transactions” by Prime Performance, which advises financial institutions on improving the client experience. Prime Performance data indicate that the net score for credit unions was 91%. The comparable score for small-bank customers gives their teller service a net score of 92%. and for large banks it was 87%, which is also the national average. Falling below that were: Chase, 77%; Bank of America (BofA), 82%; and Wells Fargo, 84% (PRWeb March 15). A net score is the percent of satisfied customers minus the percent of dissatisfied ones. A score of 100% is perfect. Credit unions led all financial institutions in these three areas:
* Credit union members are most likely to say they would recommend their credit union, with 87% of members saying they would and 2% saying they would not (next best--small banks, 82% and 2% respectively); * When asked the likelihood of switching financial institutions in the next 12 months, 88% of credit union members said they are content to stay put (next best: small banks, 86%); and * With a net score of 64%, credit union members showed the strongest response when asked how important their individual business was to their credit union (next best--small banks, 52%).
“Tellers can affect customer loyalty, satisfaction and retention. Successful service depends on simple actions,” said Jim Miller, Prime Performance president. “These include greeting the customer immediately upon entering the lobby, smiling, using the customer’s name, saying ‘thank you’ and being helpful. Quick, accurate transactions are crucial, but most banks excel at this. So, it isn’t a competitive advantage.” Prime Performance survey results measured how teller actions affected member/customer satisfaction in four areas:
* Transaction speed and accuracy. A quick, accurate transaction satisfies 90% of members/customers and displeases 1%. However, slow and inaccurate transactions satisfy 27% of members/customers and dissatisfy 22%. * Wait time. The net satisfaction score drops from 90% to 23% when members/customers wait too long for service. This occurs in 5% of teller transactions. * Valuing members’/customers’ time. The net satisfaction score falls from 92% to 27% when members/customers feel their time is not valued. * Friendliness. About 90% of members/customers are satisfied--and 1% are dissatisfied--when tellers are friendly. This results in an 89% net score. Unfriendly tellers cut the net score by 74%-- to 15%. Friendliness is demonstrated by thanking members/customers, smiling, making eye contact, greeting members/customers and using the member’s/customer’s name. Other friendliness indicators include starting the transaction by asking “How may I help you?” and finishing with “Is there anything else I can help you with?”
“All teller interactions with customers must be genuine,” Miller said. “Going through the motions is not enough to deliver a superior emotional experience. Customers overwhelmingly react positively to authentic warmth. Conversely, they respond negatively to feigned sincerity.” Selected data from the study on teller performance show these net scores for financial institutions:
* Value my time. Credit unions and small banks did best, scoring 92%. All other institutions fell below the 88% national average. Other scores were: Chase, 79%; large banks and BofA, 85%; and Wells Fargo, 86%. * Used members’/customers’ names. All institutions need to do a better job, the study found. The national average is 59%. BofA and Wells Fargo did best with scores of 64%. Other net scores were: Small banks, 61%; credit unions, 60%; large banks, 59%; and Chase, 45%. * Teller enjoys the job. Small banks led in this category with a net score of 91%. Credit unions followed closely with 90%. Wells Fargo scored 87%, which was the national average. Other scores were: Chase, 77%; BofA, 82%; and large banks, 86%.
These findings and others come from the Prime Performance 2010 Bank and Credit Union Satisfaction Survey. The survey polled more than 6,000 customers of credit unions, small banks, large banks and three mega-banks--Bank of America, Chase and Wells Fargo. For a complete copy of the Prime Performance Customer Experience with Teller Transactions study, use the link.

Tax prep sites at CDCUs lauded by San Francisco media

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SAN FRANCISCO (3/16/11)--Two San Francisco area community development credit unions (CDCUs) were the focus of recent media pieces lauding their work with the Internal Revenue Service’s Volunteer Income Tax Assistance (VITA) program.
Click to view larger image Northeast Community FCU and Cooperative Center FCU were the focus of recent media pieces lauding their work with the Internal Revenue Service’s Volunteer Income Tax Assistance (VITA) programs in the San Francisco area. Here, Northeast Community FCU CEO Lily Lo assists a member with free tax preparation at the community development credit unions VITA site in its Tenderloin branch. (Photo provided by National Federation of Community Development Credit Unions)
The VITA program offers free tax preparation services to low- and moderate-income consumers. Northeast Community FCU, San Francisco, was featured on ABC7 television’s “Money on Your Side" segment. Cooperative Center FCU, Berkeley, Calif., was featured in an article in the San Francisco Chronicle’s SF Gate. Originally organized to serve low-income residents in San Francisco's Chinatown, Northeast Community FCU has expanded over the years to other low-income neighborhoods. The $10 million asset credit union has branches in the Tenderloin and in the South of Market's (SOMA's) Sixth Street corridor, historically known as the city’s Skid Row. “We have four VITA sites in San Francisco this year,” explained Northeast Community FCU CEO Lily Lo, “in our main branch in Chinatown, our Tenderloin branch, Golden Gate Church in the Richmond District, and our newest site in our SOMA branch, which opened last year,” she said. “VITA is an important service we provide our members, and with the high unemployment in California, we’ve seen big increases in people coming in for free tax preparation compared to last year,” Lo added. “Already this year, we’ve opened 30 new accounts with previously unbanked people who came to us for VITA. It’s clear that the need is great right now, and we’re happy to help them.” Across the bay in Berkeley, another CDCU, Cooperative Center FCU, is also operating a VITA site, but in addition to preparing taxes for free, the credit union is piloting a new program that offers participants affordable refund anticipation loans (RALs) for $19. “As a nonprofit financial institution, our mission centers around serving our members and our community, not just padding our bottom line,” said Gary Bell CEO of Cooperative Center FCU. “By helping these individuals and families save their hard-earned cash, we build a trusting relationship with them and hopefully they’ll come back and become members of our credit union.” Northeast Community CU also offers RALs to its VITA filers, with 11 filers requesting them to date, nearly double the total number made during last year's entire tax season. Its RALs also are very affordable. Northeast's RALs carry a maximum interest rate of 18% and no fees. VITA provides free tax preparation to households earning less than $49,000 per year, and assists low-income people in saving millions by helping them claim their tax benefits, such as the Earned Income Tax Credit (EITC), a credit of up to $5,666 for the 2010 tax year. Many credit union VITA sites operate in partnership with United Way’s Earn It! Keep It! Save It! campaign. Tax refunds returned to low-income households are generally spent locally, multiplying their economic impact, said The United Way. Since 2003, Earn It! Keep It! Save It! VITA sites have generated an estimated $228.5 million in local sales, 1,057 jobs and $55 million in wages across the Bay Area. “Ultimately, we don’t do this because it necessarily makes the most financial sense for our institution,” Bell explained. “We do this because ‘people helping people’ is what credit unions are all about. It’s in our mission and it’s the right thing to do.”

Agility offers checklist for spring floods

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CHARLOTTE, N.C. (3/15/11)--This week is Flood Safety Awareness Week, and CUNA Strategic Services provider Agility Recovery is urging businesses--including credit unions--and families to make sure they are prepared for springtime flooding. The National Oceanic and Atmospheric Administration (NOAA) has predicted wide scale springtime flooding for many communities throughout the nation, and it has joined forces with the Federal Emergency Management Agency (FEMA) to commemorate the week. Businesses all over the U.S. have committed to preparing for the devastating effects of heavy winter snowstorms, the subsequent spring thaw and traditionally storm spring weather. Floods are the "nation's most common and expensive natural disaster" and can strike any community, said FEMA Administrator Craig Fugate, in a press release from FEMA and NOAA, He encouraged businesses and families to take these simple steps to protect themselves and their property: learn about their risk of flooding; keep an emergency preparedness kit; store important documents in a safe place; and consider purchasing flood insurance. "Flooding accounts for a large percentage of recoveries our company has performed for members over the past two years," Agility Recovery CEO Bob Boyd said in a separate press release. "The average flood insurance claim amounts to over $33,000, but the costs to a business can be far greater when considering lost revenue, lost customers and the domino effect up and down your supply chain." Several sources exist to assist businesses and families to prepare for flooding:
* Agility Recovery has shared a Flood Preparedness Checklist of the most important steps to take. * FEMA's Flood Safety Awareness landing page provides access to FEMA's resources. * The Institute for Business and Home Safety has information about protecting the business.
To access the sources, use the links.

Older long-time members more satisfied with CUs

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EMERYVILLE, Calif. (3/15/11)--Older and long-time credit union members are more satisfied with their credit unions than younger, newer members are, according to a national survey of members. Roughly 5,000 credit union members were surveyed last fall, according to MyCUsurvey.com, an online phone and Web-based member research tool for credit unions. The survey was designed to provide a benchmark against which credit unions can gauge their own performance. The survey revealed three key factors that indicate credit unions could be at risk and need to improve satisfaction among newer, younger members. The factors are member age, frequency of branch visits and length of membership. Among the findings:
* Members older than age 65 were 30 points more satisfied with their credit unions than members under age 30. * Members who visited their local branch at least once a week demonstrated 10 points higher satisfaction than those who visited less frequently and 14 points more than members who never visit their local branch. * Newer members are not as satisfied, with a 15-point spread in satisfaction ratings between those who had been members for one year or less, and those who belonged to the credit union for 10 years or more.
The findings are "critical indicators for the credit union industry," said Dr. Jack Bieda, founder of MyCUsurvey.com. "The convenience of Web and mobile banking and other trends are undermining credit union satisfaction. It's clear that credit unions need to find a way to attract younger members and get them to visit their branches for a more personalized banking experience in order to cement the member relationship," he added. The benchmarking data, which is updated every six months, measures overall satisfaction, willingness to recommend, interior branch satisfaction, exterior branch satisfaction, and service-level satisfaction. MyCUSurvey.com was launched by PinPoint Research. Surveys are conducted using MyCUSurvey's Web/interactive voice response system to avoid the risk of interviewer bias. When the survey reveals a dissatisfied member, the survey can initiate an "instant alert" so the credit union member service team can follow up with the member.

Tsunami didnt damage CUs Economy insurance hit

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MADISON, Wis. (3/15/11)--Friday's catastrophic earthquake and tsunami in Japan and the resulting tsunami waves that hit Hawaii and the U.S. West Coast did not directly affect credit unions, according to CUNA Mutual Group and the World Council of Credit Unions (WOCCU). Japan has few credit unions. WOCCU said it does not have an affiliated organization in Japan. The Association of Asian Confederation of Credit Unions--which serves a number of Asian countries and is based in Thailand--is a member organization of WOCCU but doesn't have represented credit unions from Japan. In the U.S., credit unions in Hawaii and along the West Coast reported no damages. "Although the damages in Japan are tremendous, both from the earthquake and tsunami, all credit unions CUNA Mutual contacted in Hawaii Friday report they suffered no damages from the tsunami that struck there Friday morning," said Phil Tschudy, media relations manager with CUNA Mutual Group. "We also have no reports of any tsunami-related losses along the West Coast of the continental U.S.," he told News Now. Credit unions are preparing to do what they can to help with relief efforts. Two California-based credit unions that serve Japanese-American communities are waiving fees for wire transfers so members can help families back in Japan. Nikkei CU, a $68 million asset credit union based in Gardena, began immediately eliminating fees that normally accompany outgoing wire transfers to Japan. The fee will be waived until April 30, it said on its website. JACOM CU, an $84 million asset credit union based in Los Angeles, also plans to waive fees. The UW CU in Madison, Wis., announced Monday that its members could donate directly from their Web Branch accounts to the American Red Cross to support the disaster relief. UW CU said that when members log into the Web Branch, they will find a Red Cross icon to click at the top of the main page with instructions for directing money from their accounts to the relief fund. Meanwhile analysts are predicting that the disaster will impact Japan's economy. Some say the impact won't be as severe on the economy of Japan, because it will begin rebuilding. However, it would add to Japan's debt. The country has the world's highest debt at 200% of gross domestic product (USA Today March 14). The New York Times said the economy impact is spreading, with nuclear plant problems threatening to cause an energy squeeze that could set back all sectors of the country's economy. Although power cutbacks and rolling blackouts are expected to last up to two weeks, some analysts say that if longer cutbacks could seriously affect Japan's ability to produce goods for an extended period. The Bank of Japan has already eased monetary policy by expanding an asset buying program, said the Times. The property casualty insurance industry is already estimating the costs of insuring the properties destroyed in the catastrophe. One catastrophe modeler estimated losses would be at $35 billion, according to PropertyCasualty360.com (March 14). Smaller reinsurers may suffer losses that impact their capital positions, said Standard & Poor's MarketScope Advisor. It predicted claims would set new records, and losses from the Japan earthquake and tsunami--as well as other catastrophic events this year--could spark a firming of worldwide insurance and reinsurance rates. The 8.9 earthquake--the largest in Japan and the fifth largest in the world--knocked the island of Japan eight feet closer to the U.S. and produced a 23-foot tall wall of water that slammed into Japan's eastern coast. It also created a multiple nuclear reactor nightmare Thousands are feared dead in Rukuzentakata and Sendai. It also created nuclear reactor concerns about five nuclear plants and forced the evacuation of nearly 200,000 people who lived near one of the reactors (USA Today March 14).

Americas CUs raise 8.7M in 2010 for kids hospitals

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SALT LAKE CITY (3/15/11)--Credit Unions for Kids announced today that it raised $8.7 million for Children's Miracle Network Hospitals in 2010. That marks a 5% increase over fundraising in 2009, and positions credit unions as a top three contributor to the charity. Credit Unions for Kids is a collaborative effort in the credit union community that raises money for children's hospitals. Since 1996, the program has raised more than $80 million for Children's Miracle Network Hospitals throughout the U.S. In 2010, Texas was No. 1 in statewide fundraising, generating nearly $1.37 million in contributions. The top five states and the amount raised by credit unions include:
* Texas, $1,367,597; * California, $1,003,530; * Oregon, $924,972; * Arizona, $479,674; and * Georgia, $479,235.
Portland, Ore., was once again the top individual market, raising $726,395. The top five individual markets include:
* Portland, $726,395; * Phoenix, $432,824; * Austin, Texas, $417,411; * Atlanta, $396,934; and * Los Angeles, $365,641.
"2010 was a remarkable year for our credit union partners," said John Lauck, president/CEO of Children's Miracle Network Hospitals. "Their performance speaks volumes about the character of those in the movement. Given the unprecedented challenges facing the industry, credit unions could have cut back on their fundraising, but instead they grew the program and in turn helped our hospitals impact the lives of more kids and their families." In 2011, credit unions will have three new national campaigns from which to support their local Children's Miracle Network Hospital. The Change a Child's Life coin collection campaign, which kicked off March 1 and concludes April 30, is still accepting orders for free kits to help facilitate fundraising efforts. Use the link for more information. The other two campaigns include Miracle Jeans Day, Aug. 1-Sept. 14, and the Holiday icon program, Nov. 1-Dec. 31. For more information, contact either Joe Dearborn, senior director for Children's Miracle Network Hospitals at jdearborn@cmnhospitals.org or Felicity Guerin, Credit Unions for Kids liaison at fguerin@cuna.coop.

Corporate Central well-capitalized on new measures

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MUSKEGO, Wis. (3/15/11)--With the support of existing members and a stream of new capital members, Corporate Central CU in Muskego, Wis., has achieved the “well-capitalized” mark across all capital measures of the new National Credit Union Administration corporate credit union regulations. Results indicate:
* Tier 1 (core) capital ratio stands at 5.10%, above the 5% well-capitalized mark; * Tier 1 (core) risk-based capital ratio is 30.87%, above the 6% well-capitalized mark; * Total risk-based capital ratio jumped to 61.37%, ahead of the 10% well-capitalized measure; * Total capital ratio stands at 10.13%; and * Retained earnings ratio is 1.30%, more than two-and-a-half times the three-year 0.45% regulatory requirement.
Equally as important to capital is the net economic value (NEV) of a corporate credit union’s balance sheet, said Corporate Central. NEV measures the value by taking the fair value of assets minus the fair value of liabilities. The regulations require a minimum NEV ratio of 2%. Corporate Central CU has a base-case NEV ratio of 11.25%. “At a time when others are redefining business models, shrinking balance sheets and formulating capital building plans, Corporate Central CU stands strong and well-prepared to provide solutions for credit unions and to continue responsible growth today,” said Robert W. Fouch, president/CEO. “The key to our success has always been the support of our members and the stewardship responsibility demanded by our board of directors,” he added. “Strong governance ensured no capital impairment for our members; resounding commitment from members enables strength going forward; and steadfast pursuit of member service excellence by all staff contributes to a successful future.” Corporate Central CU offers independent correspondent services delivered through partnerships serviced by Corporate Central staff. All investment and liquidity products historically provided to members continue today. Also, the corporate has partnered with Sallie Mae to offer the Sallie Mae Smart Option Student Loan program.

Texas CUs finish 2010 with 9.8 net worth

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FARMERS BRANCH, Texas (3/15/11)--Credit unions in Texas finished 2010 with a net worth of 9.8%, almost three points higher than federal examiners benchmark for well-capitalized financial institutions, according to the 2010 year-end Texas Profile. In the past five years savings in Texas credit unions grew by over $17.7 billion and loans by $9.4 billion (LoneStar Leaguer March 14). Although still strong, savings growth rates in Texas credit unions finished the year at 7%, down from the 11.6 % in 2009 and 12.1% in 2008, but still higher than the pre-recession levels. The membership growth rates were also down, indicating that the wave of dissatisfied banking customers has passed. As experienced across all financial institutions, consumers continued to pay down debt and avoid adding new debt. Credit unions’ loan growth rate was 2.6% at year end. This has caused the loan-to-share ratio to decrease to 73.4% from a high of 82.2% prior to the recession. Sixty-day delinquencies also receded. Return on assets for Texas credit unions increased to 55 basis points, a 16-point jump from the previous year and more than double the position in 2008. Net-interest margin also increased to 342 basis points. Overall market penetrations by Texas credit unions grew during the previous year and were above the 2006 level. Credit union market share increased for credit cards, unsecured loans, used automobiles, first mortgages and share-draft accounts as consumers took advantage of lower rates and better terms.

Low-income service providers struggle to meet demands

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HARRISBURG, Pa. (3/15/11)--A survey of low- and moderate-income (LMI) households in the Third Federal Reserve District shows that their financial well-being has declined, according to the Pennsylvania Credit Union Association. As households’ needs for services, such as education, employment, financial aid, food, health care and housing has increased, the organizations that provide these services to LMI populations have not increased their capacity as quickly and have actually seen decreases in funding overall (Life is a Highway March 14). This is an opportunity for credit unions, which could step up their efforts to fill the gap in services. The Federal Reserve Bank of Philadelphia’s Community Development Studies and Education Department last week released the results of its first Community Outlook Survey (COS), which monitors economic factors affecting LMI households in the Third Federal Reserve District. The survey, which will be conducted quarterly, asked 104 participants, who are service providers to LMI households, to evaluate how the financial conditions of their clients had changed from the third quarter to the fourth quarter of 2010. They were also were asked about their expectations for financial conditions three months from January 2011. Results indicated:
* More respondents reported that the availability of jobs had decreased rather than increased, but expectations for the next three months were more optimistic; * 17% of participants said that the availability of affordable housing had increased, while 46% indicated no change and 38% reported that it had decreased; * 99% of participants reported no change or a decrease in the financial well-being of LMI households in the fourth quarter of 2010; * 56% indicated that access to credit had stayed the same and 44% reported that it had decreased; and * Most service providers (71%) saw the demand for their services increase from the third quarter to the fourth quarter of 2010, with only 3% reporting a decrease and 26% indicating that demand had remained the same.
The percentage of organizations expecting an increase in demand for their services is greater than the percentage expecting an increase in capacity to help meet the increased demand. Thirty-five percent indicated that funding had decreased.

Kansas CUs end year with more assets members

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WICHITA, Kan. (3/15/11)--Kansas-chartered credit unions added both more members and assets in 2010, according to the state regulator. The Kansas Department of Credit Unions’ Fourth Quarter 2010 Call Report Statistics showed that as a whole, the state’s credit unions increased teir assets 4.08% to $4.02 billion between 2009 and 2010. Annualized membership growth was 3.71% during the same time period. The Wichita Eagle March 12). Loans increased 6.21% to $2.7 billion in 2010. Kansas credit unions’ return on average assets ratio was 0.71% compared with 0.47% a year ago, the report said. Delinquency ratios were down, from an average of 1.57% to 1.34%, according to the report. The number of state-chartered credit unions in Kansas dropped by one during 2010, to 81. Wyandotte CU merged into Lenexa-based Mainstreet CU, with $263 million in assets, on Dec. 31.

CU System briefs (03/14/2011)

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* WASHINGTON (3/15/11)--Pictures and a video of the 23rd Annual Herb Wegner Memorial Awards at the Credit Union National Association's Governmental Affairs Conference in Washington D.C., last month are now available. Those who want to revisit the festivities or who missed it and would like to catch a glimpse of the evening can access these at the links. The National Credit Union Foundation celebrated the achievements of Rudy Hanley, Dan Mica and the National Youth Involvement Board. As in prior years, people can order a DVD of the entire awards ceremony, which includes the winners’ videos, acceptance speeches, and more. To view the Wegner Award photos use the link. To view the Wegner Award video, use the link. Those with questions should contact Josie Collins by e-mailing jcollins@ncuf.coop or calling 800-356-9655, Ext. 4397 … * SACRAMENTO, Calif. (3/15/11)--The Golden 1 CU is hiring to fill 36 positions, according to local media (modbee.com March 14). The openings include call center representatives and supervisors, tellers, branch operations and sales managers, loan officers and consultants. Donna Bland, CEO and chief financial officer, told the publication the credit union expects a strong 2011 after a period of controlling expenses during which existing employees absorbed increased workloads. The credit union has about 1,200 employees and 85 branches …

League board election results announced

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FARMERS BRANCH, Texas (3/15/11)--The Texas Credit Union League (TCUL) announced that voting is complete for the mail-ballot election of league director positions for asset categories B and E (LoneStar Leaguer March 14). Elected were:
* Z. Suzanne Chism, president of Texas Health Resources CU, Dallas, for Asset Category B-- $10 million to $20 million; and * Kay Stewart, president, North East Texas CU, Lone Star, Asset Category E--more than $100 million.
The other asset categories were uncontested elections, with these individuals elected:
* Carol Murray, chairman of the supervisory committee of Express-News FCU, San Antonio, Asset Category A--under $10 million; * Nancy Croix Stroud, president, First Class American CU, Fort Worth, for Asset Category C-- $20 million to 50 million; and * Wayne Mansur, president, Texoma Community CU, Wichita Falls, for Asset Category D--$50 million to $100 million.
For this election, the directors will serve a one-year term. The 2011-2012 terms officially begin after the league annual membership meeting and board organization meeting in April.

Official Potential for CU movement to help Irelands recovery

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DUBLIN, Ireland (3/14/11)--There is huge potential for the credit union movement to help Ireland’s economic recovery, according to new Ireland Junior Minister Sean Sherlock. Sherlock was appointed Minister of State for Research and Innovation at the Department of Enterprise, Jobs & Innovation and the Department of Education and Skills Thursday (The Irish Examiner March 11). There is significant promise for a link between community enterprise boards and credit unions to get businesses up and running, he said. A new commission will look at the future of the credit union movement, in which credit unions hope to get money flowing back into communities, Sherlock told the newspaper. The credit union movement has major potential, he added. Research and development initiated at University College Cork and the Tyndall Institute should be expanded nationwide, he added. His role is to make sure the work of UCC and Tyndall can be replicated nationwide, and also to commercialize the research, Sherlock told the paper. Credit unions ought to be examining how to change the research and development tax credit to make things more accessible to smaller businesses, he added. If credit unions can commercialize research, then they will be be helping innovation, Sherlock concluded.

IAPI IFoxI highlight CU concerns on interchange

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MADISON, Wis. (3/14/11)--Credit unions’ efforts to maintain current debit card interchange fees and Credit Union National Association (CUNA) Chief Economist Bill Hampel’s thoughts on why the Federal Reserve shouldn’t cut them were highlighted in separate media reports last week. An Associated Press account of the grassroots lobbying efforts of financial institutions versus merchants referenced the 4,000 attendees of CUNA’s annual Governmental Affairs Conference were in Washington, D.C., earlier this month and how interchange was at the top of their agenda during Capitol Hill visits. AP talked to one “foot soldier” in the battle with merchants over interchange fees--Charles Garlock, president of Rock Valley FCU in Loves Park, Ill.--who said that his credit union would lose roughly one-third of its annual income, about $150,000 to $175,000 annually, if the Federal Reserve’s proposed cuts in interchange fees go through. “The little guys will be hit the worst,” Garlock said during his lobbying visit earlier this month. “I can’t sustain it.” In a separate TV segment and related story about interchange, Fox Business Network also noted last week’s Washington fly-in by roughly 100 retailers urging Congress to roll back interchange rates. Fox turned to CUNA Chief Economist Bill Hampel for the countervailing view. Hampel stressed how the new interchange law and proposed rules from the Federal Reserve would end up hurting consumers. “If financial institutions have to cover all of the costs or virtually all of the costs of debit, they will have to make it up somewhere,” he explained. “And the most likely way to make that up is through increased fees on the consumers who use the debit cards. So that could be things like a monthly fee to have access to a debit card or a per-transaction fee.” Because of new direct charges, many consumers could quit using debit cards, harming retailers themselves, Hampel added. CUNA is concerned that while the law requires the Fed to set a debit card interchange fee that is “reasonable and proportionate,” neither the law nor the Fed plan does not consider all costs associated with providing the service. To read the articles, use the links:

NACUSO opens nominations for 2011 innovation award

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NEWPORT BEACH, Calif. (3/14/11)--The National Association of Credit Union Service Organizations (NACUSO) announced Thursday that nominations for the 2011 CUSO Collaboration and Innovation Award are now being accepted from NACUSO members. The formal announcement and presentation of the award will take place April 27, during the Annual Conference & Collaboration Connection, which will be held at the Encore Las Vegas Resort. Nominations must be submitted by the close of business April 1. NACUSO will acknowledge all credit union service organizations(CUSOs) that submit applications during the annual conference. “CUSOs are examples of how collaboration can leverage the credit union system’s resources to enhance member value,” said Jay Johnson, executive vice president, Callahan & Associates and chairman of the 2011 Award Committee. “NACUSO would like to recognize the CUSO that best exhibits excellence in utilizing collaboration and innovation to serve the financial and other needs of their membership. “NACUSO is committed to supporting the collaborative model for the benefit of our industry and credit union members,” he added. “The NACUSO Collaboration and Innovation Award is a reflection of this strategic vision for the future.” The 2011 CUSO Collaboration and Innovation Award will be judged using these criteria. The nomination:
* Provides a clear description of how the organization and the collaborative model have brought value to the industry, its owners, and credit union members; * Illustrates how the organization exemplifies thought leadership and critical thinking; * Describes the value created by the organization through use of collaboration/innovation in organizational design; * Explains methods of implementation and execution; and * Includes correlating results, outcomes and performance.
“These criteria were selected to recognize those individuals and organizations that are making a significant difference and contribution to our industry,” said Jack Antonini, NACUSO president/CEO. “While the credit union industry faces diverse challenges, there are many people who are engaging in the critical, creative thinking necessary to find solutions to these issues. We want to recognize and celebrate those CUSOs that demonstrate an exemplary ability to create and implement solutions. Moving forward, innovative collaborative efforts and implementation of the collaborative solutions will serve credit unions and their members well.” Self-nominations will be accepted. Winners of any NACUSO award from 2008-2010 are ineligible. The judging panel for this year’s award will include five leaders from the credit union industry and cooperative business sector who have demonstrated experience in innovation and collaboration. Nominations may be sent by mail to NACUSO, 3419 Via Lido, PMB #135, Newport Beach, CA 92663, or e-mail Shwana@nacuso.org. The nomination form and award rules may be found with the details of the 2011 NACUSO Annual Conference; use the link. Additional queries may also be directed to Shawna by phone: 888-462-2870.

SECU honored with U.S. Department of Defense award

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Raleigh, N.C. (3/14/11)-- The Employer Support of the Guard and Reserve (ESGR) presented State Employees’ CU (SECU) with the Pro Patria Award--the highest state-level honor given to a civilian employer by ESGR on behalf of the U.S. Department of Defense--during a recent ceremony in Greensboro, N.C.
State Employees’ CU, Raleigh, N.C., was recently honored by the Employer Support of the Guard and Reserve with the Pro Patria Award, the highest state-level honor given to a civilian employer by ESGR on behalf of the U.S. Department of Defense. On hand to accept the award was, from left, SECU nominator Jamie Applequist, senior vice president of SECU’s Jacksonville branch and master sergeant with the Air Force Reserves, and Mark Twisdale, SECU’s senior vice president of human resources. (Photo provided by State Employees’ CU)
The ESGR committee gives the award annually to an employer in its state or territory that has provided the most exceptional support of U.S. national defense through leadership practices and personnel policies supporting its employees who serve in the National Guard and Reserve. On hand to accept the award was Mark Twisdale, SECU’s senior vice president of human resources and SECU nominator Jamie Applequist, senior vice president of SECU’s Jacksonville branch and master Sergeant with the Air Force Reserves. SECU is a strong supporter its National Guard employee-reservists, and the organization has been recognized throughout the years for its efforts. In 2005, the credit union received ESGR’s Five-Star Recognition for its support of guardsmen and reservists. In 2009, SECU was the recipient of ESGR’s State Chairman’s Above and Beyond Award, which is given to employers who have exceeded legal requirements for providing support to service members who serve in the Guard and Reserve. In 2010, nearly 300 managers of SECU’s branches and operations departments participated in the nation’s largest-ever statement of support signing for the ESGR program, displaying the credit union’s continuing commitment to its employees serving in the military. “SECU is dedicated to making sure our deployed SECU personnel have the strong support they need from this organization as they sacrifice to serve our Country,” said Twisdale. “We absolutely do not want these men and women worrying about job related aspects, and we want them to know how much we appreciate their efforts at home and abroad. This support comes in many forms including providing differential pay, keeping employee benefits active, sending care packages, and helping with family members at home. Still, what we do as an organization pales in comparison to what these soldiers do for all of us.” “During my career with SECU, I have been deployed three times,” Applequist added. “Throughout each and every transition, I have felt nothing but tremendous support at every level within the organization. The credit union truly recognizes the importance of military service and has gone above and beyond to assist all of us who serve dual roles as SECU and military personnel.”

CU branch opening inspires ad campaign

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ORRVILLE, Ohio (3/11/11)--CEO Chris Blough saw the opening of a new branch of Wayne County Community FCU as an opportunity to create a new personality for the credit union. Rather than competing as “the best rate in town,” the credit union decided to take a relaxed, low-complexity, high-comfort approach for its next advertising campaign. Aiming for 25- to 45-year-olds, Wayne County Community FCU is simplifying its products and clarifying its message to convey that it doesn’t have everything, but it does have what consumers need (Ohio Credit Union League eLumination March 9). The new campaign uses billboards and print ads featuring a pair of well-worn, red Converse All-Star high tops with the tag, “Some things never go out of style. We’ve been putting PEOPLE before profit since 1966.” Blough has been wearing a pair of red All-Stars to community events for several years, and is buying a pair for every board member and employee for the opening of the new branch. The mayor of Orrville and the president of the Orrville Area Chamber of Commerce will also receive shoes for the event. With today’s hectic lifestyle, Wayne County Community FCU wants “to be the one piece of the puzzle that actually fits the way it should ... the way people HOPE it would ... like a favorite pair of sneakers,” said Blough. “They might not be the fanciest thing in your closet, but they never let you down … and rarely give you blisters.”

Lots of activity on the board fin. lit front at Leagues CUNA

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MADISON, Wis. (3/14/11)--With the National Credit Union Administration’s recently imposed financial literacy requirements for credit union board members, several educational initiatives are under way nationwide. In Pennsylvania, 40 volunteers from 13 credit unions on Tuesday attended the first in a series of Pennsylvania Credit Union Association (PCUA)-sponsored Director Financial Literacy Workshops at PCUA headquarters in Harrisburg (Pennsylvania Credit Union League Life is a Highway March 9). NCUA Economic Development Specialist Vanessa Lowe led participants through a discussion on key provisions of the new regulation and guided them through a financial-trends exercise referencing four key ratios and the importance of each. The meeting concluded with an explanation of the seven market and institutional risks that directors should know. Participants received a certificate of attendance at the conclusion of the meeting. Because the NCUA is offering a free credit union workshop May 21 in Houston, the Texas Credit Union League has canceled its Basic and Advanced Volunteers Workshop that was slated for April 2 in Houston (Texas Credit Union League Lone Star Leaguer March 9). TCUL is offering several training opportunities designed to meet the new NCUA requirements in the coming months. At TCUL’s Annual Meeting & Expo April 26-28, the league will offer a tailored education track for credit union volunteers. One of the sessions available in this track is “ALM Basics of Balance Sheets.” Topics covered include financial statements, balance sheets and income statements; market versus non-market income and expense; the buy and sell process; and primary ratios. “Credit Union Governance: How Do Directors Face the New Reality ” will examine the basics of board service with an emphasis on recent regulatory changes, understanding fiduciary responsibility, governance concepts and how to best manage them. In addition to TCUL’s Annual Meeting & Expo, credit union volunteers can order previously recorded TCUL webinars, which include:
* Required Financial Literacy Training for Directors Under NCUA Guidelines: What Regulators Want & What Directors Should Know.” Presented by Tim Harrington, this webinar explains balance sheets and income statements. Harrington also addresses important ratios that should be monitored during the course of the year. After viewing this recording, credit union volunteers will gain a deeper understanding of the relationship between profit and capital, and why both are important. * Required Financial Literacy Training for Directors Under NCUA Guidelines: Ratios, Concentrations, Investment Valuations and More. Also presented by Harrington, this previously webinar will help directors understand key ratios and their origination and meaning.
Also, at TCUL’s Volunteers’ Forum June 4-5, instructors including Debbie Rightmire, Howard Bufe, Chad Stanislav and Steve Gibbs will present the six courses found in CUNA Board Financial Literacy Certificate program:
* V02--Financial Reports for Volunteers; * V03--Managing Risk for Volunteers; * V409--Financial Management; * V415--Asset-Liability Management for Directors; * V305--The Basics of Risk Assessment for Volunteers; and * V428--Understanding Audit Reports.
Volunteers who take advantage of these sessions at TCUL’s Volunteers’ Forum will have the opportunity to test online at a later date, and earn their certification. The CUNA Board Financial Literacy Certificate Kit includes all six of the CUNA Board Financial Literacy Certificate modules and exams. By successfully passing the exams for each module, participants earn the CUNA Board Financial Literacy Certificate.

CU System briefs (03/10/2011)

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* CONYERS, Ga.(3/11/11)--A suspect in a credit union robbery Wednesday afternoon was arrested after a car chase that involved ramming cars and a shootout with police before he was cornered at an apartment complex and surrendered. Cepeda Broughton, 40, of Atlanta is charged in the robbery of Georgia's Own CU in Conyers. A man entered the crdit union at about 3 p.m., brandished a 9 mm gun and fled with an undisclosed amount of money in a stolen truck. The suspect rammed three cars and a police car before police stopped the vehicle. The suspect then fled the truck and a shootout with police occurred over the next 300 to 400 yards, according to police. No one sustained gunshot wounds, but several people in the rammed cars received minor injuries (Rockdale Citizen March 9 and WSBTV.com March 10) … * WACO, Texas (3/11/11)--Michael Chad Reeves of Lacy Lakeview, Texas, was sentenced to eight years in federal prison during a hearing Wednesday in a U.S. District Court in Waco, Texas. He had pleaded guilty to robbing Centex Citizens CU, Mexia, on Oct. 12. In the incident, he handed a teller a note that demanded $10,000 in unmarked bills or the teller would die, and he displayed a pistol tucked into his jeans. He fled with $11,000 in cash. Later, when arrested on an outstanding warrant, he admitted robbing the credit union, police said. In addition to the prison term, Reeves will also serve five years of supervised release and was ordered to pay a $500 fine, $9,900 in restitution and $100 court fee (kwtx.com March 9) … * BAKERSFIELD, Calif. (3/11/11)--Gang member Irvin Briggs, 38, surrendered Tuesday night to authorities at Kern County Jail after a shooting incident outside Kern Schools FCU, Bakersfield, Calif. The incident occurred March 3. According to police he fought with two men in the credit union's parking lot and allegedly shot several times at the other men, who have not been identified. No injuries were reported, but the incident caused a lockdown at three schools nearby. He was booked on suspicion of assault with a deadly weapon, reckless discharge of a firearm, felon/gang member in possession of a firearm and participation in a criminal street gang (bakersfieldnow.com March 9) … * LOCKPORT, N.Y. (3/11/11)--A former bookkeeper at Niagara's County FCU, Lockport, N.Y., has pleaded guilty for a second time to embezzling money from the $43 million asset credit union. Gail M. Witkop, 51, pleaded guilty in Niagara County Court Wednesday to fourth-degree grand larceny and first-degree falsifying business records. She was a bookkeeper at the $42.5 million asset credit union from 2006 to 2008. Sentencing is set for May 12 and is to include restitution of $10,200. In 2008, she pleaded guilty in a city court to a reduced charge, repaid $10,136 stolen from the credit union, and served 75 days in the county work program. Judge Matthew J. Murphy rejected the defense attorney's argument that the new charges constituted illegal double jeopardy (Buffalonews.com March 10) …

Irish league to ask CUs to inject more into deposit fund

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DUBLIN, Ire. (3/11/11)--Twenty credit unions in Ireland are seeking support from the Irish League of Credit Union and the Savings Protection Fund (SPS), the league's emergency fund for credit unions in trouble. That means the league will ask credit unions to allocate more funds for financial buffer fund. The league put aside $66.7 million in its 2010 accounts to cover the financial commitments for 13 troubled credit unions, leaving the fund's value at $102.billion, according to the Irish Independent March 8 and March 10). (All amounts are in U.S. dollars). Since then the league has been approached by seven more credit unions seeking assistance, some of it with governance, not funding. The league is proposing a special levy on its 419 credit unions to raise an additional $8.3 million to boost its recovery fund. League President Mark Bailey told the newspaper that a special motion will be made at the league's Annual General Meeting in Belfast in April.

WOCCU G-10 examines mega-trends impacting CUs

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WASHINGTON (3/11/11)--The worldwide economic crisis of the past two years may have changed the playing field on which financial institutions operate, but the global credit union movement still faces many of the same challenges that it did before. However, many of those challenges require greater urgency in response, according to discussions last week among World Council of Credit Unions (WOCCU) G-10 meeting participants.
Click to view larger image Participants in this year’s World Council of Credit Unions (WOCCU) G-10 meeting included, from left: Fidelis Kimutai, Kenya; Grzegorz Bierecki, Poland; Yvonne Ridguard Harris, Caribbean; Mark Degotardi, Australia; David Phillips and Garth Mannes, Canada; Ralph Wharton, Caribbean; Manuel Bolanos Sandoval, Costa Rica; Dave Grace, WOCCU; Manuel Rabines Ripalda, Peru; Guido Piedra Bermudez, Costa Rica; Barry Jolette, U.S.; George Ototo, Kenya; Harriet May, U.S.; Pete Crear and Brian Branch, WOCCU; Mark Sievewright, moderator; and Bill Cheney, U.S. (Photo provided by World Council of Credit Unions)
The WOCCU G-10, comprising the world’s 10 largest credit union systems, meets annually to examine trends and conditions affecting financial services in general and credit unions in particular. This year’s event was held March 3-4 at the close of Credit Union National Association’s Governmental Affairs Conference and was the first G-10 meeting to be held in Washington, D.C. “WOCCU’s G-10 is a credit union movement ‘think tank’ designed to bring the largest players face to face with the most critical issues,” said WOCCU Chair Barry Jolette, president/CEO of San Mateo CU in Redwood City, Calif. “As credit unions, we have some challenges ahead of us, but we also have some opportunities to better serve our members.” Participants identified five “mega-trends” affecting credit unions, and possible approaches and resolutions to meet the challenges. The five trends are:
* A greater need for urbanization: In many countries, credit unions wield their greatest influence in rural areas by providing services to the poor. The United Nations predicts that within 40 years 92% of the world’s population will occupy urban areas. Credit unions will need to strengthen their urban presence for the movement to continue growing. * An increasing microfinance malaise: Despite good intentions, many microfinance providers, specifically microlenders, are finding their methodology questioned. Do loans provide the greatest benefit to the developing world? With their emphasis on savings programs, credit unions have demonstrated greater efficacy in addressing need, and more concentrated efforts must be made to inform and educate the public to the value that credit unions offer. * An uptick in transactional mobility: WOCCU has made great strides in using portable technology initiatives to reach the rural poor in Mexico and Kenya, with additional programs under development in other countries. Security and privacy issues are still a concern for many, so steps must be taken to help address those concerns as technology use grows. As mobility grows in usage, credit unions need to consider what role, if any, their branches play in the future. * A push for membership growth: Despite challenges to credit unions in many countries, membership worldwide continues to grow, but penetration among the 20-24 and 30-34 age groups is among the lowest. Increased effort to reach these demographics, which exhibit high levels of interest in cooperative enterprise, is the key to the movement’s future growth. * Fostering an emerging middle class: Countries with strong middle classes gain political and economic stability faster than those without, and credit unions have been especially successfully in helping foster middle-class growth. Credit unions also have benefitted from the growth of the middle class, pointing to a need to increase efforts to support this growth not only for the benefit of credit unions, but also of individuals, families, communities and countries worldwide.
“Credit unions can be extremely proud of their performance during the worst of the financial crisis, but that doesn’t mean the challenges are over,” said Pete Crear, WOCCU president and CEO. “We have a lot of work ahead of us, but credit unions’ high levels of consumer satisfaction, greater capitalization levels and other advantages inherent to the cooperative model mean that we are well-positioned to take advantage of current opportunities and re-invent ourselves to meet evolving consumer finance demands.” In addition to Crear and Jolette, G-10 participants included: Mark Degotardi, Abacus Australian Mutuals; Garth Manness and David Phillips, Credit Union Central of Canada; Yvonne Ridguard Harris and Ralph Wharton, Caribbean Confederation of Credit Unions; Manuel Bolaños Sandoval and Guido Piedra Bermudez, Federación de Cooperativas de Ahorro y Credito de Costa Rica R.L.; George Ototo and Fidelis Kimutai, Kenya Union of Savings & Credit Co-operatives; WOCCU First Vice Chair Manuel Rabines Ripalda, Federación Nacional de Cooperativas de Ahorro y Crédito del Perú; WOCCU Second Vice Chair Grzegorz Bierecki, National Association of Co-operative Savings & Credit Unions, Poland; Bill Cheney and Harriet May, Credit Union National Association; and WOCCU’s Brian Branch, executive vice president and chief operating officer, and Dave Grace, senior vice president of association services. Representatives from the Irish League of Credit Unions and Confederação Interestadual das Cooperativas Ligadas ao SICREDI in Brazil were unable to attend. Mark Sievewright, corporate vice president of strategic marketing for Fiserv Inc. moderated the meeting.

Arizona CUs raise 423301 for CU4Kids

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PHOENIX (3/11/11)--The Arizona Credit Union League announced that the state’s credit unions raised $423,301 in 2010 for Credit Union for Kids (CU4Kids), the credit union movement’s program for raising money and supporting Children’s Miracle Network Hospitals.
Click to view larger image The Arizona Credit Union League said the state’s credit unions raised $423,301 in 2010 for Credit Union for Kids (CUs4Kids), the credit union movement’s charity program for raising money and supporting Children’s Miracle Network hospitals. Pictured, from left, are: Lee Bultman, director of patient and family services Phoenix Children’s Hospital; Pat Bodnar, senior vice president, Arizona Credit Union League; and Lenore Froehlich, vice president of marketing, Canyon State CU, Phoenix. (Photo provided by the Arizona Credit Union League)
Last year, Phoenix credit unions raised $377,975 to benefit Phoenix Children’s Hospital, while Tucson credit unions raised $45,326 for Tucson Medical Center. Phoenix funds help support One Darn Cool School, a K-12 inpatient education program enabling kids to continue their regular classroom studies while at the hospital. Tucson monies support the Pediatric Expansion Capitol Campaign--Block By Block, Miracles Happen. Desert Schools FCU, Phoenix, raised the most money out of any Phoenix credit union for Phoenix Children’s Hospital. It was followed by First CU, Chandler; TruWest CU, Tempe, and Arizona Central CU, Phoenix. Canyon State CU, Phoenix, also was honored for the highest percentage increase in fundraising. In Tucson, Hughes FCU was the top earner. Rounding out the top five were Tucson FCU, Arizona Central CU, Vantage West CU, and Pima FCU.

NCUF financial reality fair conducted during GAC

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WASHINGTON (3/11/11)--The National Credit Union Foundation’s (NCUF) REAL Solutions Program held its first D.C. Financial Reality Fair in conjunction with the Credit Union National Association (CUNA) Governmental Affairs Conference (GAC) in Washington, D.C., last week.
Click to view larger image Volunteer Gerry Singleton helps a teen spin the National Credit Union Foundation Reality Fairs’ “Wheel of Reality” at the Credit Union National Association’s Governmental Affairs Conference in Washington, D.C., earlier this month.
A Reality Fair is an interactive financial literacy tool for high school students. The fair was held at the Rayburn House Office Building March 2. About 40-50 area high school students attended from H.D. Woodson High School. GAC attendees and others also stopped by to learn more about the fair’s concept. “Financial education for our nation’s youth is an integral part of the foundation’s mission as well as credit unions,” said Bucky Sebastian, NCUF executive director. The GAC event was sponsored by NCUF with support and expertise from:
* The Credit Union League of Connecticut, which created the program and materials for the D.C. fair based upon its award-winning program. Connecticut credit unions have hosted fairs since 2008 with more than 4,000 students attending the interactive educational experience. * CUNA’s Mad City Money, a hands-on simulation for youth that gives
Click to view larger image Volunteers Mark Lynch (left) and Johns Keet (right) counsel teens on their budgets after visiting all the booths at the Financial Reality Fair sponsored by the Credit Union National Association Governmental Affairs Conference. (Photos provided by the National Credit Union Foundation)
them a taste of the real world--complete with occupation, salary, spouse, student loan debt, credit card debt and medical insurance payments. To see the simulation, use the link. *America's Credit Union Museum's CU 4 Reality, a hands-on comprehensive training package centered on the interactions among students, educators, parents, credit unions and business volunteers. * HarborOne CU’s Credit for Life Fair, which has operated in high schools since 2001. The Brockton, Mass.-based credit union has won awards for its fair, which is attended by thousands of students every year. * Area credit unions such as HEW FCU, Alexandria, Va., which provided volunteers and the school connection while Congressional FCU helped with program logistics and volunteers. The Maryland & DC Credit Union Association also provided logistical support. * Credit Union Development Educators in attendance at the GAC, who also volunteered for the event.
“This fair accomplished the goal of highlighting the benefits and importance of conducting youth financial education,” said Tony Emerson, president/CEO of Connecticut league. “It also highlighted the dedication of the many credit union system volunteers that lend their time and talents to making sure these endeavors are carried out successfully.”

Ohio regulator CU exec join NASCUS leadership

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ARLINGTON, Va. (3/11/11)--The National Association of Credit Union Supervisors (NASCUS) recently announced three appointments. NASCUS Chairman Tom Candon appointed Michael Wettrich, deputy superintendent for credit unions for the Ohio Department of Commerce, to fill an unexpired term that will end in September. Wettrich has been with the department for more than 12 years and was appointed deputy superintendent for credit Unions in November. Michael Kurish, president/CEO of Associated Schools Employees CU, Youngstown, Ohio, has been appointed to fill an unexpired term on the NASCUS Credit Union Executive Council ending in September. Kurish has served as president/CEO of Associated Schools Employees CU since 1985. The appointment was made by Credit Union Advisory Council Chairman Parker Cann, senior vice president and corporate counsel of BECU, Tukwila, Wash. Also, the executive council elected Linda Childs, president/CEO of Knoxville (Tenn.) Post Office CU, Knoxville, Tenn., as secretary. The council comprises 12 credit union executives who serve in an advisory capacity to NASCUS. “NASCUS welcomes these new voices to our leadership,” said NASCUS President/CEO Mary Martha Fortney. “We are pleased to have their perspectives, especially considering Ohio has such a significant voice in the state credit union system. NASCUS looks forward to working with them during the coming months.”

Grant will help Brooklyn CDCU pilot impulse saving

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BROOKLYN, N.Y. (3/11/11)--A $300,000 grant received earlier this week by a community development credit union (CDCU) in Brooklyn, N.Y., will help it pilot a progam to curb impulse buying and promote "impulse saving." Brooklyn Cooperative FCU, a $10.4 million asset, low-income designated CDCU, received the grant from the Center for Financial Services Innovation (CFSI) to pilot Piggymojo to new and existing account holders to try to boost participants' savings balances. The program uses goal visualization, social commitments, and mobile and online technology to help consumers quantify and enjoy the act of not buying, according to a press release from the Federation of Community Development Credit Unions. The credit union, which serves 7,000 members, is a member of the federation. While impulse buying provides momentary satisfaction, it often hinders savings efforts and contributes to personal debt, said the release. The project aims to help the credit union's low-income members increase their savings by motivating and enabling them to make "impulse saves" that retain the satisfaction element of impulse buying without the financial costs. By integrating the Piggymojo solution with Brooklyn Cooperative's core processing platform, the credit union can help members' impulse saves move from their checking account into a savings account. "Our credit union serves Bushwick and Bedford-Stuyvesant, two highly underserved, low-income neighborhoods in Central Brooklyn," said Samira Rajan, the credit union's CEO. "As a young community development credit union, the reach of our programs has often been limited to those members that physically come into the branch and take advantage of our services, including financial literacy education and counseling, free tax preparation through our Volunteer Income Tax Assistance program, and so on. "This grant changes that dynamic by allowing us to offer a mobile application that any of our members can take advantage of regardless of where they are," she added, noting the credit union is interested in how its members " will take to the new program and what kind of impact it will have on their financial habits." The Center for Community Capital at University of North Carolina-Chapel Hill will study how Piggymojo promotes the financial capability of Brooklyn Cooperative members. The credit union's non-profit affiliate, Grow Brooklyn, will collaborate in the partnership to bring the program to community members. Brooklyn Cooperative's project was one of five projects to receive a combined $1.5 million in grants from CFSI (News Now March 9).

CUs push on MBL interchange cited in NYT WSJ

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NEW YORK (3/9/11)--Credit unions' efforts on raising the member business lending (MBL) cap and urging a deeper review of the implications of the Federal Reserve rule on debit interchange received attention from The New York Times, The Wall Street Journal, Bloomberg Businessweek, MarketWatch and Politico, among others, this week. In Bloomberg Businessweek (March 9), Credit Union National Association (CUNA) Chief Economist Bill Hampel provided analysis related to the MBL bill, introduced Tuesday by Sen. Mark Udall (D-Colo.) and which would increase credit unions' MBL cap to 27.5% of assets from the current 12% of assets. CUNA and credit unions have urged Congress for some time to increase the cap so credit unions could help stimulate the economy by making small business loans. In the article, Hampel noted that credit unions had about $39 billion in outstanding loans to small businesses last year, an increase from $24 billion in 2006. Similar loans at banks peaked in 2008 at nearly $799 billion and declined to $626 billion in 2010, said the article. Roughly 350 credit unions are near the cap, meaning business loans constitute between 7.5% and 12.5% of their assets, Hampel told the publication. Even at 7.5%, a credit union would start tapping the brakes on MBLs and still reach the cap in three years. Credit unions' average MBL totals $200,000. Loans go to businesses owned by credit union members, he said. The Wall Street Journal and MarketWatch were among the publications that published an article "Credit Unions Push for Small-Business Lending," which outlined credit unions efforts. In the article, Udall said that the bill "is one of the few easy ways that we have to support credit unions, small businesses and help create jobs all at once." The article also featured statistics from CUNA citing the number of new small business jobs that raising the lending cap would create. It also featured St. Mary's Bank, the nation's oldest credit union, as one of the credit unions that is bumping up against the cap. On the debit interchange issue, Politico and The New York Times were among the publications that reported credit unions' lobbying to persuade lawmakers to delay the Federal Reserve's new rules until the implications are studied further. Under the rules, it will be more expensive for a merchant to use a credit union card than a Bank of America card, Pat Keefe, CUNA vice president of communications and media outreach, told Politico. The New York Times reported testimony by credit union CEOs John P. Buckley, president of Gerber FCU, Fremont, Mich., and CUNA witness Frank Michael, president of Allied CU, Stockton, Calif., during a hearing of a House of Representatives subcommittee last week on the issue. Use the links to view the articles.

4Q data Mich. CUs still growing

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LIVONIA, Mich. (3/10/11)--Michigan credit unions added more than 37,000 members in 2010 and continued growth in deposits and small-business loans, according to 2010 fourth-quarter National Credit Union Administration call report data. “Michigan’s credit unions are growing faster than the national average, which is impressive, considering the state’s loss in population,” Michigan Credit Union League CEO David Adams said. “Recent Harris Interactive research in Michigan shows credit union members are twice as likely as bank customers to trust, value and refer their financial institution to a friend or family member. In the aftermath of the recent national economic meltdown, households are looking for a financial institution they can trust to provide fair rates and low fees.” The year-end data also showed that while overall loan activity in the state was flat at -0.4%, credit unions continued to show strength in small-business loans with an annualized growth rate of 18.8% in 2010. “Small business capital is critical for Michigan’s economy,” Adams said. “Credit unions have consistently demonstrated the ability and willingness to lend to small businesses, even as the economy struggles to recover.” Credit union members continued to save more and borrow less in the fourth quarter. As overall deposits grew by 5.8% in 2010, the strongest category of savings growth was checking accounts. Credit unions’ checking-account balances increased 5% in 2010, to $4.4 billion from $4.2 billion. The 2010 data also revealed that credit unions continue to post strong capital-to-assets ratios, averaging 10.8%, and they have lower loan delinquency rates than competitors do. Due to challenges underwriting loans, credit unions built up liquidity, with liquid capital increasing to $11.7 billion from $10.1 billion during the past year. “Credit unions have lots of money to lend, and they’re strong enough to meet most lending needs of their members and small business clients,” Adams said. “Credit unions’ strength, growth and liquidity position are the rewards of prudent lending prior to the economic meltdown.”

Young Leaders Advisory Board added by CUs for Kids

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RANCHO CUCAMONGA, Calif. (3/10/11)--Credit Unions for Kids has created a Young Leaders for Kids Advisory Board to help credit unions expand participation in fundraising events and develop strategies to engage the next generation of credit union leadership. The board includes members from credit unions and credit union organizations throughout the U.S., said Samantha Paxson, committee chair, and vice president, marketing, CO-OP Financial Services, based in Rancho Cucamonga, Calif. "We are working to maximize fundraising results for the Children's Miracle Network Hospitals in 2011, and help create an even greater grassroots following for Credit Unions for Kids," she said. In addition to Paxson, committee members are:
* Nida Ajaz, PTP New Media (CU swag/CU Grow), Pasadena, Texas; * Jaime Crooks, Ohio HealthCare FCU, Dublin, Ohio; * Brent Dixon, Filene/Crash Network, Madison, Wis., and The Haberdashery, New York, N.Y.; * Brooke Gilchrist, Enterprise Car Sales, St. Louis, Mo.; * Tina Hall, Verity CU, Seattle, Wash.; * Ronaldo Hardy, La Capitol FCU, Baton Rouge, La.; * Theresa Hilinski, Filene/Crash Network.; * Jennifer Johnson, CO-OP Financial Services; * Jill Nowacki, MaPS CU, Salem, Ore.; * Jessica Perschon-Rhodes, Filene/Crash Network and Washington State Employees CU, Olympia, Wash.; * Lisa Stokman, iQ CU, Vancouver, Wash.; * Jenn Wade, PTP New Media (CU Swag/CU Grow).; and * Audrey Wiggins, PTP New Media (CU Swag; CU Grow).
Young Leaders for Kids will provide ideas and guidance for three 2011 fundraising events, which are eligible for matching funds from CO-OP Miracle Match:
* Change a Child's Life, a loose-coin collecting campaign that runs until April. 30. To order campaign materials use the link. * The Miracle Jeans Day campaign, Aug. 1 through Sept. 14, which includes two activities--donating so employees can wear jeans on Sept. 14 and purchasing a special Miracle Jeans Day paper icon. * Holiday Icons, will run Nov. 1 to Dec.30.
"With the support of our Young Leaders and the credit union community at large, we look forward to promoting and encourage credit union events in 2011 that help fund breakthrough research, services and new facilities for children's hospitals," said Joe Dearborn, senior director of development for Children's Miracle Network Hospitals and Credit Unions for Kids. For more information use the links.

Several mergers in the works

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MADISON, Wis. (3/10/11)--Mergers continue to alter the competitive landscape for credit unions nationwide. Among the mergers in the works:
* Como Northtown CU, St. Paul, Minn., with $34 million assets, plans to merge with $270 million TopLine FCU, Maple Grove, Minn. * Cal State CU, with $90 million in assets, Santa Rosa, Calif., has filed to merge into Redwood CU, $1.7 billion in assets, also of Santa Rosa (California Department of Financial Institutions Monthly Bulletin March 8); * Guadalupe FCU, with $1 million in assets, Mountain View, Calif., has applied to merge into National 1st CU, $186 million in assets, Sunnyvale, Calif; * Motion Picture FCU, with $3.6 million in assets, Valley Village, Calif., has merged into Musicians’ Interguild CU, $78 million in assets, Hollywood, Calif; * Star Energy CU, with $5 million in assets, Bakersfield, Calif., has merged into Chevron FCU, $1.5 billion in assets, Oakland; * Putnam County FCU, Palatka, Fla., with $16 million in assets, is merging with First Coast Community CU, $73 million in assets, also of Palatka (Florida Trend March 1); * Trippler FCU, with $12 million in assets, Honolulu, will merge with $15 billion-asset Pentagon FCU, Alexandria, Va., according to the National Credit Union Administration; * Media Hawaii FCU, with $15 million in assets, Honolulu, will merge with $720 million Aloha Pacific FCU, also of Honolulu; * St. Margaret FCU, with $415,000 in assets, St. Louis, will merge with Anheuser-Busch Employees FCU, with $1.2 billion assets, also of the St. Louis; * West Haven V.A. Employees FCU, with $7 million in assets, and West Haven Municipal FCU, with $14 million in assets, will merge into Greater West Haven FCU, $5 million in assets, All three are based in Conn.; and * A-B CU, with $49 million in assets, Milwaukee, will merge with $168 million-asset Heritage CU, Madison, Wis.

PCUA names Maxwell Herring Desjardins winners

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HARRISBURG, Pa. (3/10/11)--The Pennsylvania Credit Union Association (PCUA) has announced the winners of its state-level 2011 Credit Union Recognition Awards. Dora Maxwell Social Responsibility first-place award winners are (Life is a Highway March 8):
* Timberland FCU, Du Bois, $20 million to $50 million in assets; * Meadville (Pa.) Area FCU, $50 million to $100 million; * Cross Valley FCU, Wilkes-Barre, $100 million to $200 million; * Belco Community CU, Harrisburg, $200 million to $500 million; and * American Heritage FCU, Philadelphia, $500 million to $1 billion.
The Louise Herring Philosophy in Action Award first-place winner is SPE FCU, State College, $50 million to $250 million in assets. Desjardin Youth Financial Education first-place winners are:
* Keystone FCU, West Chester, $50 million to $150 million in assets; * Service 1st FCU, Danville, $150 million to $500 million; and * TruMark Financial CU, Trevose, more than $500 million.
The awards will be presented during PCUA’s Youth Ambassador Contest, May 12, in conjunction with the association’s Annual Convention & Expo in Hershey. Winners will go on to the Credit Union National Association’s national competitions.

Dont let guard down on ID fraud warns CUNA Mutual

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MADISON, Wis. (3/10/11)--Concerned about media reports of a recent study that said identity fraud had dropped in 2010, CUNA Mutual Group's risk managers are warning that the finding goes against their experience. Their message: Don't let your guard down on ID fraud. The Identity Theft Resource Center's (ITRC) 2010 Data Breach Stats indicate that ID theft is alive and well. During the year, 662 breaches compromised records of nearly 16.2 million potential victims. (ITRC defines "breach" as an event in which an individual's name plus Social Security number, driver's license number, medical record, or a financial record/credit/debit card is potentially put at risk, either in electronic or paper format.) Of those, financial institutions accounted for 54 breaches, or 8.2%, and nearly 4.9 million records compromised. That is 30% of all records compromised, the second highest percentage of potential victims in the five institutional categories studied. Eight credit unions--about 6.75% of financial institutions breached--experienced data breaches. The number of records exposed to fraud at the credit unions is unknown, said ITRC's report. Credit unions are also vulnerable through data breaches of other groups, some of them within select employee groups or doing business with credit union members' accounts. Total breaches, broken down by category of institution breach:
* Businesses accounted for 279 (or 42.1%) of the year's breaches, which affected more than 6.6 million records (41% of total records compromised). * Educational organizations--colleges, universities and public school systems--experienced 65 or 9.8% of breaches, compromising nearly 1.6 million or 9.9% of records. * Government/military institutions totaled 104 breaches (15.7%) with more than 1.2 million records (7.5%) compromised. * Medical/healthcare breaches totaled 160 or 24.2% and accounted for nearly 1.9 million (11.6%) of records.
CUNA Mutual took issue with another study, by Javelin, which reported last month that the number of ID fraud instances reported had decreased, although these thefts were costing consumers more. "ID theft is still a serious consumer issue with global fraud implications regardless of where the breach occurs, which is why reporting exposure in conjunction with actual thefts makes more sense to me," said Brad Mundine, senior manager, risk management at CUNA Mutual. "We should all take caution in interpreting the results and conclusions of any single survey. While a sample of telephone respondents may have reported a significant drop in ID thefts, millions of other American consumers might tell a slightly different story." In the ITRC survey, the four largest breaches involved Educational Credit Management Corp., with 3.3 million records compromised; JPMorganChase-Circuit City, with 2.6 million records; and AV Medical Health Plans and Lincoln National Financial Securities, with 1.2 million records each. Growth in the international nature of ID theft is a top concern in 2011, warns ITRC. "Victims may very well find credit/debit card charges emanating from global transactions in Europe, Africa and Asia." With the depth of identity theft, credit unions will continue to be challenged with providing solutions to protect their members, said Mundine and Ken Otsuka, senior consultant, risk management at CUNA Mutual. Another survey, Kroll Fraud Solutions' 2010 Global Fraud Survey, reported that information theft is now the most common form of fraud, with 27% of companies reporting incidents in the past year. Information theft surpassed the theft of physical property for the first time in the four-year history of the Kroll survey. "While credit unions have taken commendable measures and made progress to protect member information, identity theft remains a significant threat and should not be taken off their radar in 2011," said Mundine and Otsuka. "The techniques used by criminals today are constantly evolving," they said. "Identity theft is a major source of financing for organized crime rings, both domestically and abroad. Data theft scams can be deployed through a variety of channels including the installation of malicious malware, phishing, spoofing, skimming and database hacking, all of which are designed to compromise the repositories of consumer data," they said. "ID theft remains a significant problem that isn't going away anytime soon," said Phil Tschudy, CUNA Mutual manager of media relations. "And we recommend credit unions and their members remain vigilant over the threats this criminal act causes."

Texas league submits wild-card parity brief to state

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FARMERS BRANCH, Texas (3/10/11)--The Texas Credit Union League (TCUL) submitted a supporting brief this week to keep parity between state-chartered and federally chartered credit unions in the state on payday loan alternative rates. Earlier, the Texas Credit Union Department (TCUD) filed a request for an attorney general opinion on a matter that relates specifically to loan rates for alternatives to payday loans, and what is permitted under law. State credit unions have an 18% rate cap in the Texas Credit Union Act. However, under parity laws, they could charge up to 28%, according to a recent National Credit Union Administration allowance, and other parts of the state finance code allow higher rates for short-term loans. The attorney general opinion committee will look at the legality of the matter and likely will issue an opinion by the end of July. TCUL filed a brief in support of the status quo wild-card parity provision with the attorney general on Monday, which was the deadline to submit briefs. “We want to preserve the wild-card provision to ensure parity between state and federal charters,” Buddy Gill, TCUL chief advocacy officer, told News Now. “State-chartered credit unions should be able to invoke the parity provision for anything a federal credit union can do. "Our bottom line on this is that prices for products and services should be determined by the credit union management and board members,” he added. “If alternatives to payday loans are capped at 18%, some credit unions would not be able to make them work--and then members would have to go to payday lenders.”

CU System briefs (03/09/2011)

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* MADISON, Wis. (3/10/11)--The Credit Union National Association (CUNA) has made another list--this time a list of businesses and buildings in Wisconsin that are hard to pronounce, according to MissPronouncer.com, a "pronunciation guide for everything Wisconsin." CUNA is the fifth entry on the list. The correct way to pronounce CUNA is: Q-nuh … * MADISON, Wis. (3/10/11)--New Jersey Credit Union League President/CEO Paul Gentile has joined the 13-member board of directors of the National Credit Union Foundation (NCUF) as one of three representatives with alternating terms from the Credit Union National Association (CUNA) board. Gentile will complete the unexpired term of Paul Mercer, president of the Ohio Credit Union League. Gentile's term will expire Dec. 31. The CUNA board will make an appointment for a full three-year term this fall. The other two CUNA Board representatives on the NCUF board include Vice Chairman Laida Garcia, president/CEO of Floridacentral CU, Tampa, and Sandy Lingerfelt, president/CEO of Clinchfield FCU, Erwin, Tenn. … * MINNEAPOLIS (3/10/11)--Phillip Webb, 46, of Brooklyn Park, Minn., a former network services manager for Woodbury, Minn.-based Postal CU (PCU), has been sentenced to 15 months in prison for mail fraud stemming from the theft of about $388,000 from a Cisco Systems of Bloomington, a computer parts manufacturer. In a plea agreement, Webb said that from June 2007 to October 2009, he falsely notified Cisco that parts in PCU's computer systems were faulty. He then sold the parts on the Internet and returned cheap secondhand units to Cisco as the allegedly defective parts (Associated Press Newswires and StarTribune.com March 8) … * TAMPA, Fla. (3/10/11)--Tampa-based USF FCU's online video contest is no bull. The $368.7 million asset credit union is launching a national competition to discover how creative people have become at saving their money during the economic downturn. The "Are You the Best Bull?" competition runs from March 7 through April 18. The contest winner will receive a free trip for two to Pamplona, Spain, to witness the annual running of the bulls (Plus News Pakistan March 8) … * HARRISBURG, Pa. (3/10/11)--Dennis Hevel, emeritus director and former board chairman of Pennsylvania State Employees CU (PSECU), Harrisburg, died Saturday in Carlisle, Pa. He was 71. Hevel was active in PSECU and served as board chairman stretched from 1984 to 1994 (Life is a Highway March 9 and pennlive.com March 7) …

Survey Security pros restrict social media use

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SAN DIEGO, Calif. (3/9/11)--More than half of Fortune 100 companies surveyed use Facebook and other social media to market and develop their business, but many also place restrictions on these tools because of security concerns, productivity concerns related to excessive use of bandwidth, and concern for data loss. These are concerns for credit unions, too, as more and more move deeper into social channels for outreach and marketing to attract younger members and market their services. A survey of 275 security professionals was conducted by Websense, a San Diego-based unified Web and e-mail security and data loss prevention solutions provider. Although 50% of those surveyed use social media, more than 45% said they restricted the tools out of security concerns, more than 40% did so out of productivity concerns, and more than 30% indicated concern for loss of data. More than 70% of today's threats occur on legitimate and popular websites and social Web properties, and more than 52% of malware is targeted at stealing confidential data, said the company. Malicious links are found often on popular Facebook pages, and cyber criminals can access easy kits for as little as $25 to add create malicious Facebook applications that can infect users and result in data theft. Nearly 40% of Facebook status updates have links and 10% of those links contain either spam or malware, according to other recent research by Websense. Part of the problem is that legacy solutions do not understand the actual content and data found on social media sites and cannot stop the threats such as malware, the company said. Legacy solutions like antivirus and firewalls manage social Web properties by making social networking sites static and unable to accept dynamic content. But taking away the dynamic nature of social media removes the core benefits of collaboration and networking, and turns information technology into a disabler of business potential, said the company. The company is working with its customers on technology to deal with threats and real-time content, including data in the social Web. Most other solutions turn off the social Web, remove its collaboration benefits and try to manage it in nonpractical and nonscalable ways, said Websense. Addison Avenue FCU, Palo Alto, Calif., is one credit union working with the solution. The credit union allows access to the social Web (SaaS and social networks) in a limited capacity. "Our marketing and e-commerce groups see dynamic social networking sites as a critical business function," said Phil Romero, senior security architect at the $2.4 billion asset credit union. "The Websense gateway is the kind of key component that gives us that visibility as to whether the activity being done is productive or a hindrance. My biggest security concern, being a financial institution, is the loss of data." Its alliance helps make sure "that the information that needs to stay within the organization stays within the organization and doesn't get out there by accident or exploit."

Filene CU among CFSI innovation fund grantees

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CHICAGO (3/9/11)--The Filene Research Institute and Grow Brooklyn/Brooklyn FCU are among the five recipients of grants from the Center for Financial Services Innovation (CFSI).
Click to view larger image Through a grant from the Center for Financial Services Innovation, the Filene Research Institute will test Lift, a Filene i3 idea to determine if rewarding consistent timely loan payments with interest rate reductions will lead to better payment behavior. The Lift team, are front row, from left: Jackie Edwards, Connexus CU, Wausau, Wis.; and Lisa Randall, Vermont FCU, Burlington, Vt.; back row, from left: Mike Kenzie, Patriot FCU, Chambersburg, Pa.; Shelly Berryman, SchoolsFirst FCU, Santa Ana, Calif.; and Matt Henry, Elevations CU, Boulder, Colo. (Photo provided by The Filene Research Institute)
The CFSI’s Financial Capability Innovation Fund is providing $1.5 million in grants to five nonprofit-led projects designed to help low-income, underserved consumers better manage their finances. The grantees and their projects are:
* Filene Research Institute, which will test Lift, a Filene i3 idea to determine if rewarding consistent timely loan payments with interest rate reductions will leader to better payment behavior; * Grow Brooklyn/Brooklyn Cooperative FCU and online personal financial management software firm Piggymojo, which will use goal visualization, social dynamics and mobile technology to help low-income savers turn impulse buys into impulse saves; * Consumer Credit Counseling Service of Delaware Valley, which will test whether social commitments and text alerts can help consumers reduce debt; * Co-opportunity Inc., which will leverage technology via a new online platform to enhance the effectiveness and scale of its volunteer budget coaching program; and * Mission Asset Fund, which will franchise its Cestas Populares program, a peer loan coupled with product-specific peer-led education, to help immigrants build credit and manage credit wisely;
Filene’s Lift is a loan feature that provides incentives for healthy financial habits, according to the Filene. As users make timely payments on their loans, they are rewarded with a lower interest rate. The pioneering concept allows users to pay off their loans faster and reduce the amount of interest paid. It also helps them establish healthy financial behaviors and lower their interest rates. CFSI selected the five projects from among 246 applicants totaling more than $67 million in requests. Organizations from 44 states responded to the request for proposals CFSI released in September. CFSI said it will release a white paper soon and host a webinar about the innovation trends presented in the proposals. Researchers will evaluate each of these programs to measure their impact. In addition to the financial award, grantees will receive strategic guidance, technical assistance, visibility and a network of resources within the financial services industry.

Calif. DFI emphasizes corporate governance guidance

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SACRAMENTO, Calif. (3/9/11)--The California Department of Financial Institutions (DFI) re-emphasized the importance of corporate governance guidance--the relationship of the board of directors and management--for credit unions in its February monthly bulletin. “It is the responsibility of the board to oversee the general operations of the credit union, to set policy with regard to the major aspects of the credit union’s business, and to act in good faith and exercise due care in making proper business decisions that are first and foremost in the best interests of the credit union and its members,” the DFI said. Key elements of board responsibilities are oversight of management performance and setting management compensation levels. The DFI said it expects boards to establish levels of compensation that are appropriate for the size, complexity and attributable performance of a credit union, and to document those factors. The agency said it will be looking more closely at these board processes. Several state regulators are following the lead of the National Credit Union Administration in emphasizing board governance and board financial literacy in an increasingly complex financial environment.

Michigans new CU to serve Chippewa tribe

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MT. PLEASANT, Mich. (3/9/11)--Michigan's newest credit union--the Chippewa Eagle FCU--officially opened Monday in Mt. Pleasant, Mich. The new credit union will serve members and employees of the Saginaw Chippewa Tribe and their families--about 7,800 people (The Morning Sun March 8). Ron Douglas, chairman of the Chippewa Eagle Board, told the Sun that the tribe had worked toward establishing a credit union for about seven years. So far, 300 and 500 members have joined the credit union. The credit union will offer multiple share accounts including regular shares, club accounts, money market shares, share certificates, and share draft (checking) accounts. It also plans to offer personal loans, and after a year in business, will aim for authorization to make business loans. After two years, it will offer mortgage loans. Credit cards, unsecured lines of credit, individual retirement accounts and member business accounts are planned down the line. The tribe noted that residential mortgage loans would be especially needed. Commercial lenders often are reluctant to finance on-reservation housing because the land on which the homes are built is held in trust by the federal government. Homes may be sold only to tribal members, which would limit a traditional financial institution's options if a borrower defaulted on a loan. The National Credit Union Administration granted the credit union's charter last year.

Rehash the Crash webinar March 15

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MADISON, Wis. (3/9/11)--After a whirlwind week at the Credit Union National Association’s (CUNA) Governmental Affairs Conference (GAC) in Washington D.C. last week,16 newly inaugurated and energized crashers will “Rehash the Crash” with a free webinar outlining their plans for improving credit unions nationwide. The Crash Network is a group of under-30 professionals looking for deeper involvement in the credit union industry. The “crash” concept is the group’s way of gently elbowing its way into mainstream credit union meetings to rub shoulders with system leaders and create networking and educational opportunities. As part of the application to “Crash the GAC,” the crashers were asked to submit a project idea they wanted to pursue after attending the conference. During the webinar, crasher will share their projects, what they learned through the GAC, and their progress made to take their idea to next level. Projects range from developing localized meet-up groups, to expanding financial literacy efforts, to reaching out to other young adult credit union employees. CUNA’s Center for Professional Development offered full scholarships for crashers to attend the GAC.

CUs topic of first thrift rock album

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MADISON, Wis. (3/9/11)--Introducing a new genre of music called “thrift rock,” two Madison, Wis.-based musicians, called The Disclosures, have created an album featuring songs and lyrics that deal with credit union history, financial education and cooperative structure.
Click to view larger image Introducing a new genre of music called “thrift rock,” two Madison, Wis.-based musicians, called The Disclosures--Christopher Morris and Chad Helminak, who both work in the credit union movement--have created an album featuring songs and lyrics that deal with credit union history, financial education and cooperative structure. (Submitted photo)
The album, titled “(Hey, We’re) The Disclosures,” was released Tuesday and is the band’s first attempt at combining their musical abilities with their passion for democratically controlled, not-for-profit credit unions. “Credit unions have long been thought of as a best-kept secret in the financial industry,” said Disclosure band member Christopher Morris, director of communications for the National Credit Union Foundation. “We wanted to spread that ‘secret’ in our own unique way and help people gain a better understanding of what credit unions are and how they differ from other institutions.” The all-acoustic album is comprised of seven songs written and recorded by Morris and Chad Helminak, who is the web and member development strategist at the Wisconsin Credit Union league. They completed their songwriting project outside of normal business hours. “We focused on making quality rock songs first and foremost, while still delivering on that message of thrift and cooperativeness,” Helminak said. “We had a blast writing and recording our songs and hope that comes through on our album and live performances.” In addition to the album, The Disclosures have scheduled performances at credit union events, including education break-out sessions on credit union history and philosophy--infused, of course, with their original songs. The album is available for download on major digital music stores such as iTunes, Amazon.com and others. Physical copies of the CD along with speaker and live performance information are available online through the The Disclosures’ website. The concept for the album was borne out of the success of their first credit union-themed song, “Movin’ on with my Money,” recorded for the Young & Free “Looking like a fool with your money in a bank” music video contest. Their music video came in third place in the contest, receiving thousands of views on YouTube and attention from almost every major credit union publication, as well as the Huffington Post’s “Move Your Money” campaign. In October, the band released its first single from the album, “The Ballad of Friedrich Raiffeisen,” for International Credit Union Day. An example of the lyrics to the single include: “Ich heisse Friedrich Raiffeisen, And I stand before you now, Father of a modern movement grown by leaps and bounds, We grew up right and wrote the book, On how to lend and save, While putting people before profit each and every day.”

Just File it sets records in Michigan

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LIVONIA, Mich. (3/9/11)--Just file it! tax e-filing continues to grow among Michigan credit unions. Just file it!, a partnership between the Michigan Credit Union League and the Legal Aid Society of Orange County (Mich.), allows low- to moderate-income Michigan residents to e-file their state and federal income taxes for free using the I-Can E-File program (Michigan Monitor March 7). Organizations nationwide partner with I-Can E-File to provide free e-filing to their communities. The number and amount of returns nationwide is the largest since the program’s launch. Michigan ranks second nationwide in the number of returns and total refunds initiated through Just File it! with 10,596 total returns for a total of more than $21.4 million. Nationwide there have been 46,322 filers.

Egan to IWalletpopI CUs services on cutting edge

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MADISON, Wis. (3/9/11)--Credit unions have expanded their products and services offerings to the extent that they are more on the cutting edge than most people realize, Dan Egan, president of the Massachusetts, New Hampshire and Rode Island credit union leagues, told Walletpop Monday. In an article titled “Credit Unions Offering More Services,” author Martha C. White wrote: “Credit unions, which as a group weathered the financial crisis better than banks, have been expanding their range of products and offerings recently. Today, credit unions offer much more than just ordinary deposit accounts and loans. A growing number are rolling out student and small business loans, mobile banking and even reward programs. This trend is happening even as banks are curtailing perks like debit rewards, and tightening standards for lending.” As an example of cutting-edge services, Egan told Walletpop that a service that’s been popularized by some large U.S. banks--in which a photo of a check is taken to electronically deposit it--was introduced by a credit union more than a year-and-a-half ago. Another area credit unions are expanding into is student loans, the article said. Many credit unions are switching to student loan programs because there’s pent up demand for them, Egan said. The cost of education is creating growing demand for student loans. Credit unions also are re-establishing their commitment to free checking, he added. Egan told Walletpop that credit unions are moving further into small-business lending to not only to help companies, but also to assist the economy as a whole. The Credit Union National Association (CUNA) and credit unions are trying to get Congress to increase credit unions’ member business lending (MBL) cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said. To read the article, use the link.

Georgia Corporates town meetings begin

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DULUTH, Ga. (3/9/11)--Georgia Corporate FCU kicked off Monday the first of its 11 town hall meetings to discuss its corporate structure plans and proposed consolidation with Southwest Bridge Corporate FCU. Georgia Corporate is based in Duluth, Ga., while Southwest Bridge Corporate is based in Plano, Texas. Both corporates are conducting town hall meetings this month. Georgia's 11 webinars in the state will proceed through March 17. Southwest Bridge will hold 26 meetings in eight states--Texas, Arkansas, Florida, Louisiana, New Mexico, Oklahoma, Oregon and Washington--plus two online town halls on March 31 and April 1. The two corporates plan to combine into Catalyst Corporate FCU, pending Georgia's purchase and acquisition of Southwest Bridge. A purchase and acquisition proposal will be submitted to the National Credit Union Administration (NCUA) at about mid-year. The new entity's business plan calls for lower capital requirements than previously required by either corporate. Because of new NCUA regulations, it will maintain a smaller balance sheet to minimize risk. The new corporate would need approval from NCUA and capitalization from members (News Now Feb. 4). For more information about Georgia's meetings, use the Georgia link. For more information about Southwest Bridge's meetings use the second link.

CU System briefs (03/08/2011)

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* GREEN BAY, Wis. (3/9/11)--Two employees of Pioneer CU, Green Bay, Wis., suffered minor injuries Tuesday morning after a car plowed into the credit union's building on city's east side. One was taken to a hospital and the other was treated on site. The driver of the car, who was alone and not hurt, told police she accidentally hit the gas pedal instead of the brakes. The two women injured were working when the impact of the crash caused objects on the wall to fly through the air. The impact also knocked out a section of bricks on the front of the building. The car was not seriously damaged. The incident happened at about 10:20 a.m. (Green Bay Press Gazette and WBAY.com March 8) … * BIRMINGHAM, Ala. (3/9/11)--Joy Service has been hired as director of education and training by the League of Southeastern Credit Unions (LSCU), effective March 21. She will be based in LSCU's Birmingham, Ala., office. Service has 14 years of education experience in the financial, academic and corporate sectors. Her background includes working for financial institutions in training and instructional design plus nine years in strategy and method training at Walt Disney World in Orlando. Service's most recent position was with Virginia College, where she directed the Learning and Leadership Department. She created and developed the college's New Management Success program, which trained new staff managers, deans and faculty. Service also has experience developing curriculum for computer and online learning. LSCU's Education and Training department offers more than 20 conferences and workshop, plus 84 webinars …

GAC in the media

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MADISON, Wis. (3/8/11)--The Credit Union National Association's (CUNA's) Governmental Affairs Conference (GAC) last week in Washington, D.C. attracted some attention not only from prominent media in Washington, but from far flung venues such as Germany and Asia. Comments by House Speaker John Boehner (R-Ohio), Treasury Department Undersecretary Jeffrey Goldstein, Consumer Financial Protection Bureau (CFPB) head Elizabeth Warren, and Sen. Mark Udall (D-Colo.) received the lion's share of the coverage. Those joining trade press to report on speakers at the conference included FoxNews.com, MSNBC's "FirstRead," The Hill, Politico, Digital Media, Barrons, Business Journals, the National Mortgage Professional Magazine and Las Vegas Sun as well as stations such as KJCT8.com. Even before the GAC began, an article in The Hill (Feb. 27) talked up the event, as did an earlier blog by CUNA President/CEO Bill Cheney in the Hill's Feb. 15 issue. This year social media also played a part. Sen. Udall's comments about increasing small business lending and creating jobs by using credit unions' ability to lend was posted on his Facebook page. And CFPB's website featured a video of Elizabeth Warren speaking at CUNA's GAC. A tweet from her office indicated that National Public Radio was working with her on the video. Also, media reported on CUNA Strategic Services' alliances with Fynanz, a private student loan provider; Harland Clarke and Intersections' pact on identity theft; and Ongoing Operations' new business continuity solutions.

Corporate America USC accounting firm settle suit

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BIRMINGHAM, Ala. (3/8/11)--Corporate America CU and RubinBrown LLP, an accounting firm for U.S. Central FCU, have settled a lawsuit arising from estimates of paid-in-capital (PIC) shares after U.S. Central was placed in conservatorship. The settlement is confidential and no terms were disclosed. In such settlements, neither party admits liability to the other. RubinBrown is a St. Louis-based companied hired to prepare valuation of PIC shares for conversion before U.S. Central suffered losses and went into conservatorship. The suit by Birmingham, Ala.-based Corporate America centered around U.S. Central's action in December 2009 to convert $450 million of non-permanent capital to permanent paid-in-capital shares (PIC II). RubinBrown said the shares were worth at least $450 million, and, according to the complaint filed by Corporate America, the corporate relied on the estimates when it exchanged its member capital shares in U.S. Central for PIC shortly before U.S. Central was taken into conservatorship.

Media Banks fee tactics contrast with CUs free checking

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MADISON, Wis. (3/8/11)--Several media outlets recently contrasted credit unions’ free checking with banks’ fee tactics. A Monday article titled “Banks look to Replace Lost Debit-Card Fees” in The Wall Street Journal mentioned that while big banks look for ways to make up lost money caused by new rules that limit how much merchants can charge customers for debit-card transactions, credit unions still are offering free checking to members. Large financial institutions--such as Bank of America (BofA), JPMorgan Chase & Co. and Wells Fargo--are overhauling debit card programs by eliminating rewards and adding new fees to checking accounts, the Journal said. The article described how Shilpa Banerji, a consultant in Washington, D.C., switched to a credit union last year when BofA began charging her a checking account fee. She said she usually uses her debit card for purchases under $30, and the specter of more disruptions upsets her. In other media accounts:
* Of the 50 largest U.S. credit unions, 38 “still offer free checking accounts with no strings attached,” said The Associated Press (Feb 25). The article added: “Even among the credit unions where customers have to pay for checking, nearly all offer ways to avoid fees by meeting certain conditions. For example, consumers can maintain a minimum balance, set up direct deposit or sign up for electronic statements. The survey also found that nearly half the credit unions do not require a minimum balance to open an account. Fees also rose modestly from last year; bounced check fees are up by about a dollar to $26. ATM fees rose slightly to $2.10, from $2.” * BethPage (N.Y.) CU introduced its new free checking account by “saying no to checking fees from big banks,” according to Creditunionsonline.com (March 7). The demand for a free checking product is high on Long Island, and consumers want to save money wherever they can and are not used to paying for what previously was a free checking account, Gerard Schmitt, BethPage vice president of marketing, told the publication.
To read the articles, use the links.

Heacock Krall on Minnesota Fed Advisory council

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Click to view larger image Roger Heacock (center), president of Black Hills FCU, Rapid City, S.D., has been named to the Minneapolis Federal Reserve Bank’s Community Depository Institutions Advisory Council. Heacock testified on behalf of the Credit Union National Association before the House Small Business Committee during a hearing on member business lending in 2009 (Photo provided by CUNA)
MINNEAPOLIS (3/8/11)--Roger Heacock, president of Black Hills FCU, Rapid City, S.D., and Gail Krall, president Minnesota Power Employees CU, Duluth, Minn., are among the 10 members appointed to the newly formed Minneapolis Federal Reserve Bank’s Community Depository Institutions Advisory Council (CDIAC). The appointments were announced Friday. The board of governors of the Federal Reserve System has created a national CDIAC to broaden the scope of input on economic credit conditions. To complement the national effort with regional perspectives, each Federal Reserve Bank is establishing a District Council comprising representatives from credit unions, community banks and thrifts. Heacock’s term on the council ends at the conclusion of 2012. Krall’s term expires year-end 2013.

WOCCU to APEC CUs promote financial inclusion

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SAN FRANCISCO (3/8/11)--Credit unions are at the forefront of promoting financial inclusion among poor and remote population groups, and should be considered a key resource by governments looking to increase financial service delivery to their populations. That was the message World Council of Credit Unions (WOCCU) took to the Asia-Pacific Economic Cooperation (APEC).
Credit unions have a prominent role to play in global financial inclusion strategies, Dave Grace, senior vice president of association services at World Council of Credit Unions, told delegates attending last month’s Asia-Pacific Economic Cooperation meeting. (Photo provided by World Council of Credit Unions)
APEC is an organization of 21 countries bordering the Pacific Ocean that met at the invitation of the U.S Treasury Department last month to discuss economic development in their countries. WOCCU was one of only three private-sector organizations and the only one representing financial cooperatives invited to participate in the discussions. APEC delegates gathered at the Federal Reserve Bank of San Francisco Feb. 23-24 to further work begun by the Group of 20 (G-20) nations to develop and refine financial inclusion programs in their own countries. Steps toward this goal include the measurement of gaps in service delivery, policy development and private sector engagement, and program execution and evaluation of results. Workshop participants also discussed policy options that ministries of finance could take to encourage greater use of quality and affordable financial services among their entire populations. With 16,417 credit unions already serving 124 million members throughout the APEC region, financial cooperatives are at the forefront of resources available to promote financial inclusion, according to Dave Grace, WOCCU senior vice president of association services, who participated in the meeting. “In the APEC region, ministries of finance now understand the critical role that credit unions can play in ensuring access and usage of financial services among the poor and under-banked,” Grace said. “We also helped shape policy options that encourage financial inclusion, such as utilizing government benefit payments as a gateway product to the financial system and providing tax incentives to institutions active in the financial inclusion area.” APEC’s roots took shape as a discussion group in 1989, and the APEC Secretariat was formally established in 1993 in Singapore. APEC member countries include Australia; Brunei Darussalam; Canada; Chile; the People’s Republic of China; Hong Kong, China; Chinese Taipei; Indonesia; Japan; the Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; the Republic of the Philippines; the Russian Federation; Singapore; Thailand; the U.S. and Vietnam.

Uninsured depositors file suit in New London closure

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NEW HAVEN, Conn. (3/8/11)--Five members who had deposits in the now defunct New London Security FCU filed a lawsuit Thursday in a U.S. District Court in New Haven, Conn., seeking $4 million in damages from the National Credit Union Administration (NCUA). The suit stems from a $12 million embezzlement by the $13 million asset credit union's long-time investment advisor and former A.G. Edwards branch manager, Edwin F. Rachleff. Rachleff, 82, committed suicide while the NCUA was in the processes of closing the credit union in July 2008. An audit revealed Rachleff allegedly stole the investments from 1988 to July 2008. In the suit, the five members allege that NCUA examiners, supervisors and administrators were "negligent in carrying out their ministerial duties and responsibilities" while examining the credit unions' investments. They say they lost $4 million in uninsured deposits and presented their administrative claims to NCUA on Feb. 10, 2010. NCUA denied the claims in their entirety on Aug. 11, 2010, according to the complaint filed Thursday. Filing the suit were Melvin Goldblatt and Joan Lazerow of Connecticut, Mark D. Fetcher, of Florida; Gloria Johnston of California; and Douglas C. Antupit of Connecticut. They also have filed lawsuits against Wells Fargo Advisors, a subsidiary of Wells Fargo & Co., which is a successor in interest to Wachovia and the brokerage firm A.G. Edwards and Sons.

Hackers steal 527000 from LES FCU account at bank

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BATON ROUGE, La. (3/8/11)--Computer hackers from the Ukraine made unauthorized transfers totaling nearly $527,000 from LES FCU, Baton Rouge, La., in September 2009 through the credit union’s commercial account with Capital One, according to a lawsuit filed in U.S. District Court Thursday. The hackers transferred the money by slipping an e-mail attachment with malware past a credit union accountant, according to the complaint filed against Capital One by the credit union’s insurer, Fidelity & Deposit Co. of Maryland. The insurer reimbursed LES FCU for $321,873. More than $200,000 of the siphoned funds were recovered before they could be claimed by the criminals at wire transfer locations worldwide, the court documents said. Capital One is alleged to have permitted the unauthorized transactions after an LES FCU accountant received an e-mail purporting to be from the Internal Revenue Service (IRS) around Sept 14, 2009, according to the complaint. The e-mail was from “a den of thieves,” who directed the accountant to “an official-looking” website, said the complaint filed Thursday. At that website, a “key logger program” was secretly downloaded to the accountant’s computer. The program allowed the thieves to obtain the credit union’s Capital One user IDs and passwords. On Sept. 16, the accountant accessed the credit union’s Capital One account and noticed that nine unauthorized transfers had been made Sept. 15. Capital One mailed notifications to the credit union regarding the nine wire transfers processed, but did not attempt to contact the credit union directly. At 9:15 a.m. Sept. 16, LES FCU contacted Capital and reported the unauthorized transfers. Capital One then notifed the credit union that an additional five wire transfers had been executed earlier in the morning of Sept. 16. The credit union advised Capital One that these transfers were also fraudulent. In all, Capital One processed 14 unauthorized wire transfers from LES FCU’s account totaling $526,613 in less than 24 hours. Capital One stopped the transfer of $204,740, but refused to reimburse the remaining $321,873, claiming the wire transfers were initiated through a security breach at LES FCU. Capital One reported the matter to the Baton Rouge Police Department, which referred it to the Secret Service.

Mich. OFIR outlines governance rate-risk issues

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LANSING, Mich. (3/6/11)--The first Michigan Credit Union League’s (MCUL) 2011 meeting with Michigan’s Office of Financial and Insurance Regulation (OFIR) was held on Wednesday with John Kolhoff, OFIR’s new deputy commissioner of the Credit Union Division, and Acting Assistant Director Denice Schultheiss, said MCUL.
John Kolhoff (speaking), deputy commissioner of the Michigan Office of Financial and Insurance Regulation (OFIR), and OFIR Acting Assistant Director Denice Schultheiss, to his right, discuss concerns with Michigan Credit Union League staff at OFIR's first 2011 meeting. (Photo provided by the Michigan Credit Union League)
The meeting began with a profile of the credit union industry in the state, including the impact of recent retirements on the Credit Union Division. Four vacancies exist, but the division is expected to be fully staffed. Some organizational adjustments will be made in the Upper Peninsula, which traditionally shares examiners with the Bank and Trust Division, said the league (Michigan Monitor March 7). OFIR identified key issues it is focusing on this year: continuing to work with credit union boards to clarify their governance role and working to ensure greater diversity of talent and skills on the boards. Board oversight of executive management especially during the current economy is another area that will be assessed, the OFIR officials said. Financial literacy also was discussed at the meeting. Other issues discussed included how interest-rate risk will draw the attention of examiners, with the possibility of rising interest rates negatively impacting interest-rate spreads. Allowance shortfalls, market value of loan collateral and member business lending participations also are on the table. Kolhoff stressed the importance of working with credit unions to resolve issues they experience during the examination process, saying he appreciates feedback and his door is open to credit unions.

CU System briefs (03/07/2011)

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* GREENSBORO, N.C. (3/8/11)--Piedmont Advantage CU CEO Judy Tharp was recognized as Alumni of the Year by the Cameron School of Business at the University of North Carolina Wilmington at a reception on campus March 1, said the North Carolina Credit Union League (Weekly Update March 7). Tharp graduated from the school with a concentration in management in 1978. She became the first CEO of Cape Fear Employees CU, a startup credit union, and is active in several industry organizations including the North Carolina Credit Union League and Credit Union Executives Society. She currently is vice-chair of the Carolinas Credit Union Foundation, a board member of the Carolina Credit Union Services Corp., and a member of the Cooperative Alliances Committee of the Credit Union National Association. Piedmont Advantage CU is a $212 million asset credit union based in Winston-Salem, N.C. … * FERNDALE, Wash. (3/8/11)--A 59-year-old woman who wore a gray wig and makeup to make herself look older has been charged with first-degree identity theft, criminal impersonation and multiple counts of forgery after she allegedly impersonated her deceased mother in a pension fraud scheme. Loewen B. Craft, 59, was arrested by detectives at Industrial CU, Ferndale, Wash. The credit union asked her to visit the branch to complete paperwork for an account she opened in her dead mother's name and Social Security number. Craft's mother, Betty Becker, died in 2007, and Craft allegedly began collecting Becker's retirement benefits after that (The Bellingham Herald March 4) …

Egan presented AACULs Farley Award

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MARLBOROUGH, Mass. (3/7/11)--Daniel F. Egan Jr. is this year's recipient of the American Association of Credit Union Leagues' (AACUL) Eugene H. Farley League Leadership Award. Egan is president of the Massachusetts Credit Union League, New Hampshire Credit Union League and the Credit Union Association of Rhode Island (e-Weekly March 4). AACUL bestows the award annually on a league staff person who:
* Demonstrates superior results both organizationally and financially; * Is a visionary leader at the state level; * Develops services and/or programs for member credit unions; * Focuses on cooperation within the credit union system; * Displays personal values of commitment to purpose, service to others, and integrity; and * Substantially participates as a leader and "co-operator" at the national level.
Egan was presented the award Feb. 26. The award is endowed by a contribution from Dr. Richard Heins, former CUNA Mutual CEO. League presidents make nominations and members of the Farley Award Committee, comprised of past award winners, serve as judges.

Googolplex grand prize photo award goes to AA CU member

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FORT WORTH, Texas (3/7/11)--A 14-year-old member of American Airlines FCU (AA CU) is this year's winner of the Googolplex Grand Prize photo contest. The member, Kenna of Tacoma, Wash., submitted her winning photo "Dandelion Wishes" in the "True Friends" theme. Describing the photo, she said she and her best friend "planned to take a photo of blowing wish-weeds, but she could never blow hard enough to get her seeds off the stem." Kenna captured the moment, adding, "All of my seeds were floating in the air and hers didn't go anywhere." Googolplex, a Credit Union National Association (CUNA) lifestage online magazine for youth, comprises three customizable sizes for elementary, middle and high school students. It offers a themed photo contest for the high school site, C-Note, which culminates with a $1,000 grand prize every year. Kenna submitted her photo through AA CU, which offers its young members resources and advice about how best to learn and plan their finances. "Teaching our younger member-owners the importance of financial responsibility is crucial to our future and we're glad to see Kenna has a strong financial base with which to begin planning for her own future," said AA CU President/CEO Angie Owens. CUNA's editors choose contest themes based on suggestions from a nationwide teen panel of student editors. C-Note invites photo entries by publicizing the contest in subscriber e-mails and on the front page of C-Note. Every seven weeks a contestant wins $100. Once a year, all winning photos from the past 12 months are open to a public vote. The winner receives $1,000. "The current C-Note photo contest theme is 'Messy Rooms.' This should be an easy theme for anyone, regardless of age," said Rena Crispin, managing editor of Googolplex

Bank customers still dont trust banks

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LONDON (3/7/11)--Despite efforts by banks to woo back consumer confidence from the financial industry crisis, 44% of retail banking customers around the world said their trust in the banking industry decreased in the past 12 months. For the U.S., customer confidence levels were lower: 55% of customers surveyed by Ernst & Young said they have less confidence than a year ago. The company conducted a global survey of 20,500 retail banking customers to gauge what drives their relationship with banks. Credit unions, while not part of the study, will note the report advises banks that the keys to success will be brand management, personalized services and efficient pricing--something credit unions already do. Levels of confidence are lower in regions hard hit by the economy, such as the U.S., the report said. The United Kingdom had the largest drop in confidence (63%). "In developed markets, customer confidence and trust in financial institutions has been severely damaged by the economic crisis, and our findings show that it remains under threat," said Pierre Pilorge, Ernst & Young's financial services customer leader. "Emerging market economies suffered less from the credit crisis and recession and so their banks have seen trust endure. In order to get back on track the survey clearly illustrates that banks in developed nations must rebuild customer confidence, enhance the customer experience and stem customer attrition." Other findings:
* Macroeconomic factors had the most negative impact (53%) on customer confidence. Brand strength was cited as a key factor driving customer satisfaction worldwide. * Attrition levels are highest in Europe, with 39% having switched banks in the past. Leading factors in the switch were service quality (48%) and price (43%). Also cited were product offerings, branch proximity and lack of trust. * Finding a way to effectively deliver a personal service to customers will be a key success factor in the years ahead. While internet banking (83%), ATMs (79%), and branches (79%) are touch-points customers are most satisfied with today, satisfaction with call centers in consistently weaker (44%). * Banks need to reconnect with their customer base by improving the customer experience across their operations. Some are experimenting with new tools such as mobile banking, but there is demand across all channels--including call centers and branches--for greater personalization and attentiveness.
"The banking industry in developed markets has witnessed a significant shift in confidence, and never before have loyalty and personal customer attention been such critical issues," said Ernst & Young. "Customers are demanding more personalized service if they are to remain loyal. The successful institutions of the future will be those who offer customer-focused innovative services. Those that do will be able to differentiate their organization and drive for growth," Pilorge said. The Ernst & Young report is entitled A New Era of Customer Expectation.

Small CU roundtable was deciding factor for some GAC attendees

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WASHINGTON (3/7/11)--For some attendees, the first-ever Credit Union National Association (CUNA) small credit union roundtable was more than a way to begin the Governmental Affairs Conference (GAC)--it was the primary reason they came to Washington last week. Sherrie Brooks was one of them. As CEO of $17 million Tennessee Employees CU, Brooks wears many hats. She said she needs a good reason to justify being out of the office for a week--and to convince her board on the necessity of investing a relatively large amount of money on traveling to a conference. “It really has to be geared towards something that will help your credit union,” Brooks said. When she saw that CUNA was having a small credit union roundtable, "it was the deciding factor.” While credit unions at the GAC shared virtually the same concerns--the proposed interchange rule, member business lending, supplemental capital, and protecting credit unions’ tax exempt status--240 registered small credit union roundtable attendees had their own subset of concerns, with topics like compliance, collaboration, succession and regulation dominating the four-hour session. Brooks indicated she doesn’t have a large network to discuss her decisions with on an everyday basis. “This was a re-enforcement of the thought processes I have on some things, like taking advantage of the way the economy is right now. A lot of the credit card companies raised their rate to 21%, so I did a promotion with 6.9% fixed. My credit card portfolio increased 125%. That decision was re-enforced today.” She also believes collaboration offers small credit unions opportunities to extend the services they offer. “About five years ago, I shared a loan officer with another credit union,” she said. Under the umbrella of a larger credit union, she offers her members financial counseling at no cost to her credit union. Just as important, Brooks said she learned about resources and ideas she was not aware of previously, such as League InfoSight, an online compliance resource created by the Florida, Georgia, Michigan, Ohio and Texas Credit Union leagues in 2003. The small credit union roundtable was also the reason Melissa Marquez, CEO of $10 million Genesee Co-op FCU, Rochester, N.Y, attended the GAC. “I just felt like I had to be here,” Marquez said. “These people are my closest colleagues. We all have the same concerns. And everyone is so willing to share ideas. It’s been very inspiring.” Marquez said compliance was her top concern, but she also learned how collaboration could be used as a valuable tool to grow her credit union. Like Brooks, Marquez said it wasn’t an easy decision to go to Washington. But she was determined to make the most of her time and bring her small credit union message directly to the U.S. Congress. While it can be hard to justify the conference and travel cost, "especially at the end of the month” when the credit union closes its books, Marquez added, "but while I’m here I’m going to hike the Hill.”

Hampel to AOLIWalletpopI How to tell CU is sound

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MADISON, Wis. (3/7/11)--Bill Hampel, chief economist at the Credit Union National Association, last week told readers of AOL’s Walletpop how to determine if a credit union is financially sound. Because many readers and financial experts have suggested that consumers join credit unions as an alternative to rising fees and fewer perks at many large banks, Walletpop asked Hampel what prospective credit union members should look for when considering a credit union. “The main thing is to check for deposit insurance,” he advised. “Ninety-nine percent are insured by the National Credit Union Administration (NCUA) which is equivalent to Federal Deposit Insurance Corp. (FDIC) insurance for a bank.” NCUA insurance protects credit union deposit accounts up to $250,000. Also, prospective members can ask about a credit union’s capital ratio, Hampel told Walletpop. According to their capital ratios, 96% of all credit unions fit or exceed the criteria for being well-capitalized, recent research indicates, Walletpop said. Also, Bankrate has an online tool that helps people evaluate the health of any U.S. credit union. Credit unions’ culture plays a major role in keeping them financially fit, Hampel said. “No credit union CEO or board member has any stock options, so they have a reduced incentive to take the risks that would make those stock options worth a lot of money,” he added. “They operate at a much lower risk level, and executives don’t get much of a reward for taking on risk.” To read the article, use the link.

Rep. Peters named Mich. legislator of the year

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WASHINGTON (3/7/11)--The Michigan Credit Union League has presented Rep. Gary Peters (D-Mich.) with its “Legislator of the Year” award for his ongoing support of credit unions in Michigan. “The No. 1 issue in Michigan is creating jobs, and our credit unions have been on the front lines of helping consumers and small businesses get access to credit during the economic downturn,” said Peters in a press release from his office. “I’ve been working to clean up Wall Street and strengthen Michigan’s economy, and I’m proud that my work has been able to help Michigan’s credit unions continue to support our small businesses,” Peters added. “Gary’s hard work on legislation like Wall Street reform and the Small Business Jobs Act showed that he understands the crucial role that Michigan’s credit unions play in creating jobs, ”Michigan Credit Union League & Affiliates CEO David Adams said. Credit unions are an important source of lending for small businesses in Michigan, said the press release. The financial collapse and the long-term recession in Michigan’s economy have made it much harder for small firms to secure funds from Wall Street banks. Credit unions and other community based lenders have helped to keep credit flowing to small businesses across the state, allowing them to continue operating and creating jobs. Peters helped to pass the Small Business Jobs Act, which included legislation he authored that provides funding to states for a loan portfolio insurance program that makes it easier for credit unions and community banks to make small-business loans. Peters is also a strong supporter of legislation that would allow credit unions to offer expanded business lending opportunities to their members, said the congressman’s office.

CUNAs Youth Saving Challenge grows to 139 CUs

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MADISON, Wis. (3/7/11)--The 2011 National Youth Saving Challenge sponsored by the Credit Union National Association (CUNA) is gaining steady momentum, CUNA said. The number of participating credit unions has grown to more than 100, and is expected to increase. Last year’s Saving Challenge saw nearly 350 credit unions join it. Held in conjunction with National Credit Union Youth Week throughout April, the Saving Challenge puts the spotlight on youth in a contest tracking deposits. Last year, nearly 170,000 young members deposited $24.8 million into their savings accounts during the month, and more than 10,000 opened new accounts. The 139 credit unions joining the Saving Challenge have set a goal to take in more than $4 million in deposits from about 32,000 youth in April. The challenge’s popularity comes from its fun, flexible approach to encouraging young people to develop good savings habits, CUNA said. CUNA provides resources, promotional materials and products, and celebration ideas, but individual credit unions build their own celebrations using the unique service commitment that defines the credit union movement. Jean Tatar at St. Pius X FCU in Rochester, N.Y., works with schools each week to teach youth about making deposits and earning rewards. Students can meet with credit union staff and ask questions. “It is so important to educate our youth on finances, especially in this economy,” Tatar said. The Saving Challenge also permits credit unions to set their own goals and run the contest during a timeframe that fits their community calendar. Daviess County Teachers FCU in Owensboro, Ky., has had success with Youth Week, meeting and exceeding its Saving Challenge goals each year since 2005. Involvement in both Youth Week and Saving Challenge activities has been met with enthusiasm from young savers, said the credit union. “We feel it’s the best opportunity for teaching our young members the importance of ‘paying yourself first,’” said Lauren Mayhew, marketing director at Daviess County Teachers FCU and north central region coordinator for the National Youth Involvement Board. “Our youth never cease to amaze me with their enthusiasm for saving at their credit union.” For this year’s program, CUNA has added a mentoring service designed to link up credit union staff new to the Saving Challenge with individuals who have already planned, hosted and completed many celebrations. The mentors want to share their success stories and answer any questions. For more information, use the link. Mentor Lani Fritz, from Michael Baker Jr. FCU, in Moon Township, Pa., believes in the value of Youth Week and its role in promoting financial literacy. Joining the National Youth Saving Challenge sends a strong message to young people and their parents, and cultivates longstanding relationships between credit unions and their members, she added. “We care very much about teaching our youth that every penny they discipline themselves to save, counts to us as well,” Fritz said.

Women serving on boards improve corporate success

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WASHINGTON (3/7/11)--Companies with women serving on their boards of directors enjoy greater economic and business success than those without women on the boards. That revelation was made at the Global Women's Leadership Network breakfast Tuesday at the Credit Union National Association's (CUNA) Governmental Affairs Conference (GAC).
Click to view larger image U.S. Rep. Jackie Speier (D-Calif.) told participants at Tuesday's Global Women's Leadership Network breakfast that companies with women on their board enjoy a greater rate of financial success.
The network, a part of the World Council of Credit Unions (WOCCU), gathered at the National Museum for Women in the Arts. U.S. Rep. Jackie Speier (D-Calif.) and Debbie Matz, National Credit Union Administration board chair, addressed 64 women credit union leaders about critical issues and the importance of women supporting one another's professional development. Boards of directors of companies that have women on them have a 65% higher return on investment capital, while 53% have a higher return on equity, and 42% have higher sales than those with fewer women in charge," said Speier. "Women's leadership skills are truly different, and women lead differently. It's a more consensus-driven form of leadership, which often produces better results, yet women represent only 15% of Fortune 500 executives." Speier discussed the importance of women leaders recognizing and supporting the strength of their female staffers and encouraged leaders to "femtor" them, rather than mentor them. With men and women supporting each other in the workplace, enterprises and economies will flourish because they will gain access to the full slate of human resources available, she added.
Click to view larger image World Council of Credit Unions Chair Barry Jolette makes a point with National Credit Union Administration Chair Debbie Matz at the Global Women's Leadership Network breakfast. (Photos provided by the World Council of Credit Unions)
In addition to network members, breakfast attendees included Barry Jolette, WOCCU board chair and president/CEO of San Mateo CU, Redwood City, Calif., and Manuel Rabines, WOCCU first vice chair and CEO of Federación Nacional de Cooperativas de Ahorro y Crédito del Perú (FENACREP), WOCCU's member organization in Peru. Brian Branch, WOCCU executive vice president and chief operating officer, cited a recent example of how network members have capitalized on advantages offered by the group. At a previous network event, member Dolores Rivera Ramirez of Mexico's Caja Zongolica shared how the credit union used PDA (personal digital assistant) technology to bring credit union services to its rural members. The idea resonated with Roxy Ostrem from Ventura County CU, Ventura, Calif., who initiated a similar program to reach out to local agricultural workers who lacked access to financial services. "Dolores set out to improve people's lives by bringing the credit union to where they lived and worked, and the idea resonated with Roxy," Branch said. "The Global Women's Leadership Network is about providing women with resources and opportunities that make similar differences in the lives of each other, their credit union members and their communities." The GAC breakfast was the network's first event of the year. This year's Global Women's Leadership Forum will be held with WOCCU's World Credit Union Conference, July 24-27 in Glasgow, Scotland. For more information use the link. The second annual Worldwide Foundation for Credit Unions Golf Tournament benefitting the network will take place on July 28 at the Carrick Course on Loch Lomond, Scotland. The tournament is presented by CO-OP Financial Services and will raise funds to help alleviate poverty through the empowerment of women worldwide. Last year's tournament raised US$60,000 to support WOCCU's global development programs. For more information, visit the link. "In the fight against poverty, both here and abroad, women in credit unions are often on the front lines, driving innovation to help millions of people who would otherwise be left behind by the financial system," said Sue Mitchell, network chair and president/CEO of Mitchell, Stankovic and Associates, a credit union consulting firm. "Access to affordable financial services can be life-changing, providing the building blocks for all of us to raise healthier families and stronger communities, and forge a more stable nation."

Text scams other fraud reported by CUs

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MADISON, Wis. (3/4/11)--Credit unions in several states are reporting recent text, e-mail, and telephone scams urging consumers to divulge their account numbers. Also, two credit unions reported counterfeit checks, CUNA Mutual recently alerted credit unions about unauthorized wire transfers through the Bredolab Trojan malware, and one credit union reissued debit and credit cards after a theft at a gas station. Among the reports:
* In Pennsylvania, someone posing as Beaver Valley FCU, Beaver Falls, is texting people and asking for personal debit and credit card information (Associated Press Newswires March 3). Police began receiving calls about the scam Tuesday and called the numbers given in the text message. One goes to North Carolina and another to Massachusetts. Two people fell for the scam and gave account information but no fraudulent transactions have occurred yet. On Thursday New Brighton police reported six such calls. Scammers are contacting people with cell phone numbers in the 724 area code (TimesOnline.com March 3). * ARC FCU in Altoona, Pa., told the Pennsylvania Credit Union Association recently that members received automated phone messages advising them of a problem with their debit/credit cards and instructing them to call in and enter their card number. Caller ID screens show the calls came from 1402, a number that is not associated with the credit union (Life is a Highway Jan. 31). * In North Carolina, a text message purporting to be from Tarboro-based Telco CU informs recipients their account has been suspended and asks them to call a telephone number to verify account information. Several people who do not have Telco accounts contacted the Asheville Police Department after receiving the text (Asheville Citizen-Times March 3). * Similar e-mail scams claiming something is wrong with an account are targeting Mobiloil CU members and nonmembers in Beaumont, Texas, said the Beaumont Police Department (Beaumont Enterprise Feb. 9). * West Community CU, O Fallon, Mo., cancelled and reissued about 250 cards whose numbers were compromised when a credit card machine was stolen from a Mobil station in St. Louis. (KSDK.com Feb. 21). * Security Service FCU, San Antonio, said that in January hundreds of people received automated calls from a 1-888 number about deactivated accounts and asking for account numbers (WOAI.com Jan. 31). The messages claim recipients' cards have been blocked and they must enter their account number and personal identification number to reactivate them. An example: "(888-891-2538) Hello. Call us now at 817-350-4570. Security Service FCU." Neither number belongs to the credit union.
Two credit unions--in Kansas and Pennsylvania--reported counterfeit checks circulating with their names. Lenexa, Kan.-based CommunityAmerica CU's name is used on counterfeit cashier's checks, said an alert from the Federal Deposit Insurance Corp. CommunityAmerica does not issue cashier's checks; it issues official checks. The bogus checks include a routing number, 011007092, assigned to Boston (Mass.) Safe Deposit & Trust Co. The credit union's official checks are through Moneygram Payment Systems Inc. and use an account held in the Boston Safe Deposit & Trust Co. The fake items display a security feature statement embedded within darkened top and bottom borders, and the word "CASHIER'S CHECK" in the top center. Authentic checks have a blue cubed background,dark blue top border, and a security feature statement centered above the bottom order. Seven arrows precede the numeric dollar amount. Also, Allegheny-Ludlum Brackenridge FCU in Brackenridge, Pa., said fraudulent checks with its name, address and ABA number are in circulation and use an account number from a closed account (Life is a Highway March 3). The check--from GALA GLOBAL in Andover, Mass.--is for $980 and is enclosed in a letter about GALA's Member Pulse Survey 2011 for a Walmart evaluation exercise. It asks the recipient to deposit or cash the check "preferably at your bank and NOT at any Walmart location (so the employees at Walmart won't be tipped off)." And, finally, CUNA Mutual Group's Credit Union Protection Resource Center last month told credit unions that the Internet Crime Complaint Center (IC3) recently reported more than $150,000 stolen from a U.S. business through unauthorized wire transfers when a computer was infected with the Bredolab Trojan. The method of delivering the Trojan was different from cases using the Zeus Trojan in a money mule scam, according to the New Jersey Credit Union League's The Daily Exchange (Feb. 3).. The Zeus Trojan was delivered via phishing e-mails sent to key employees at a business. Bredolab is embedded in e-mails received by the business in response to a job posting the business placed on an employment website. Bredolab compromises the business' online banking login credentials, which cyber thieves use to initiate wire transfers--one to the Ukraine and two within the U.S. Credit unions and other financial institutions will not use these methods to contact a member about an account, and will never solicit account information over the phone, e-mail, or through text.

Online crime at second highest in decade

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FAIRMONT, W.Va. (3/4/11)--Just how pervasive has Internet crime become? In 2010, the Internet Crime Complaint Center (IC3) received 303,809 complaints--the second-highest total in IC3's 10-year history and an average of 25,317 complaints per month. IC3, a repository for victim complaints, is a partnership between the Federal Bureau of Investigation (FBI) and the National White Collar Crime Center (NW3C). It has received more than two million Internet crime complaints since it was established in 2000. The three most common complaints:
* Nondelivery of payment or merchandise (14.4% of complaints); * Scams using the FBI's name (13.2%); and * Identity theft (9.8%).
Others included: computer crimes, 9.1%; miscellaneous fraud, 8.6%; advance fee fraud, 7.6%; spam, 6.9%; auction fraud, 5.9%; credit card fraud, 5.3%; and overpayment fraud, 5.3%. Of those with dollar losses reported, 21.1% related to non-delivery of payment or merchandise; 16.6% were identity theft, 10.1% were auction fraud, and 9.3% were credit card fraud. This represents a shift, said the report. Historically, auction fraud has been the leading complaint by victims, accounting for 71.2% of referrals in 2004. But in 2010, auction fraud represented slightly more than 10% of the complaints. "This demonstrates the growing diversification of crimes related to the Internet," said IC3's 2010 Annual Report. "The steady decline in the total number of complaints and referrals of auction fraud over the last several years has altered the top complaint categories." The cause is unknown, said the report, which added a possible explanation could be that "complaint levels are normalizing as businesses and consumers discover and implement ways to make previously uncharted areas of online commerce safe and more reliable." Online crime affected all demographic groups. Age groups and gender gaps were narrower. Most complainants were in the U.S., male, between 40 and 59 years old, and a resident of California, Florida, Texas or New York. Most foreign complainants were from Canada, the United Kingdom, Australia or India. Men reported greater dollar losses than women (at a ratio of $1.25 to $1). Individuals 60 and older reported higher median amounts of losses than other age groups, said the report.

Belvoir FCU launches live chat support

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WOODBRIDGE, Va. (3/4/11)--Belvoir FCU is launching a real-time, live chat support for its members, announced the Woodbridge, Va.-based credit union Thursday. The Live Chat software, powered by SightMax, allows the more than $269 million asset credit union to offer immediate online support for its members with chat functionality, language translation and customizable capabilities. By implementing the feature on its website, Belvoir Federal can service members across the world with more immediacy, and answer member and non-member questions quickly and efficiently, said the credit union. SightMax is an entity of SmartMax, which provides live chat and other products for e-commerce services and marketing strategies. It operates in a variety of industries.

Ten inducted to CU House Hall of Leaders

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WASHINGTON (3/4/11)--Ten credit union leaders who have made a significant impact on the credit union movement at the local, state or national level were inducted into the Credit Union House 2011 Hall of Leaders this week. Inductees are:
* Harold Allen, Nebraska. Allen has dedicated 30 years to advancing the credit union movement. He has served on the University of Nebraska FCU's board of directors and the Nebraska Credit Union League board. He has been an active volunteer on behalf of credit unions in legislative advocacy efforts on the state and national level. * D.S. "Scotty" Broome, Mississippi. Broome is the former president/CEO of the $1.86 billion asset Keesler, FCU, Biloxi, Miss. He retired in June 2010 after 34 years of service and was active on the legislative advocacy front on behalf of the military, veterans and the Defense Credit Union Council. * Raymond Brunner, Pennsylvania. Brunner, president/CEO of WEST-AIRCOMM FCU, Beaver, Pa., is currently chairman of the board of the Pennsylvania Credit Union Association (PCUA) . He has served on the PCUA board since 1999. He is responsible for leadership in developing a new board governance structure for PCUA. * James Bryan, Texas. Bryan is former president of Texans CU from 1975 to 2003, and served as chairman of the boards of the Texas Credit Union League, Southwest Corporate FCU and CUNA Mutual Group, as well as a board member of the Credit Union National Association (CUNA). He also served on the Federal Reserve Bank's Thrift Institutions Advisory Council and the Filene Research Institute Research Council. He was named the league's 2002 Credit Union Professional of the Year and inducted in 2004 into the Texas Credit Union Hall of Fame. * William Eckhardt, Alaska. President/CEO of Alaska USA FCU since 1979 after joining the credit union staff in 1971, Eckhardt has served on the CUNA Mutual Board of Directors since July 2005, is past chairman and current board member of the Alaska Credit Union League, and is a past board member of CUNA . He is also chairman of Alaska USA Insurance Agency and Alaska USA Trust Co., and was recipient of the league's Horace Bremner award twice for his contributions to the Alaska movement. * John Fiore, Illinois. Fiore, CEO of Motorola Employees CU, Schaumburg, Ill., is recognized for more than 40 years' devotion to the movement. He has served as an Illinois Credit Union League director since 1989, a board member of the Illinois Credit Union Foundation since 1987, a past board member of CUNA and the National Credit Union Foundation. He also has served on the board of the Illinois Credit Union Political Action Council and as a trustee of the Credit Union Legislative Action Council. * Gene Hensley (posthumously), Tennessee. Hensley, who died Feb. 19, 2010, served as president/CEO of Appalachian Community FCU (formerly Mead Kingsport CU), Kingsport, Tenn., for 31 years. He served on the board of directors of the Tennessee Credit Union League, as board treasurer for Mutual Guaranty Corp., and was a board member of Volunteer Corporate CU. He also was president of the Northeast Tennessee Chapter of the league. * John Murphy, Maine. Murphy, who is the long-time president of the Maine Credit Union League and its subsidiary, Synergent, has provided more than 32 years' service with the credit union movement at all levels, including statewide and national. * Robert Walls, Delaware. Walls was president of the Delaware Credit Union League from 1992 until 2005. He is a member of CUNA's board of directors. Walls served as a member of the site selection committee for Credit Union House and served on its board of directors and as chairman. He is active in the American Association of Credit Union Leagues and was instrumental in establishing and served as chairman of the Mid-Atlantic Regional Service Corp., a multi-league service corporation. * Jim Williams, Texas. Williams was has worked with a number of credit unions as manager or president since 1960, including Texas Crossroads FCU, Government Employees CU, Texas Central CU, and Amarillo Air Force Base CU. Currently he is consultant to Texas Dow Employees CU. A former chairman of the Texas Credit Union League board, he was inducted into the Texas Credit Union Hall of Fame in 1999. Williams was appointed by the governor to the Texas Credit Union Commission, which he served from 1971 to 1979. He also was a national director and board chairman of CUNA and served as CUNA's president from 1979 to 1986.
The Credit Union House Hall of Leaders was launched in 2008. The names of inductees and their sponsoring organizations will be prominently displayed at Credit Union House.

WOCCU seeks pure dead brilliant presentations

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MADISON, Wis. (3/4/11)--“Pure dead brilliant” is what the Scots say when referring to something extraordinarily special. That is what the World Council of Credit Unions (WOCCU) is searching for--special educational presentations for the 2011 World Credit Union Conference, July 24-27 in Glasgow, Scotland. Those who have an idea for an educational presentation should submit their presentations online to be considered for the credit union movement’s only global event. Use the link. The deadline for submissions is March 31. This year’s educational tracks will focus on four themes:
* Moving from philosophy to service; * Defining strategy and leadership; * Developing credit union movements; and * Raising finance and operational standards.
For more information, use the link.

Corporates consolidation topic of 10 town hall meetings

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PLANO, Texas and DULUTH, Ga. (3/4/11)--Executives of Southwest Bridge Corporate FCU in Plano, Texas, will host 10 town hall meetings statewide this month. The purpose of the meetings is to provide member credit unions another opportunity to obtain information about the proposed consolidation of Southwest Bridge Corporate and Georgia Corporate, Duluth, Ga. “The proposed business plan is based on less capital, less risk and uninterrupted delivery of products and services to our member credit unions,” said Dianne Addington, CEO of Southwest Bridge (LoneStar Leaguer March 3). “Our goal for these meetings is to communicate why this business plan was selected, what the new corporate would look like, why it would carry less risk, and how much capital credit unions would need to invest,” she added. “We want credit unions to understand the plan completely and get all their questions answered.” Southwest Bridge is conducting 26 town hall meetings in eight states. The meetings are part of ongoing member communication efforts regarding the future of Southwest Bridge Corporate. Some information will be repeated from previous webinars conducted by the corporate, but new information will be presented. Three webinars were conducted in December and January.

Nine indicted in St. Paul Croatian FCU collapse

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CLEVELAND (3/4/11)--A federal grand jury in Cleveland indicted nine people Wednesday on fraud charges related to the collapse of St. Paul Croatian FCU in Eastlake, Ohio, last April. Those charged include: Anthony Raguz, 51, of Mentor; Koljo Nikolovski, 48, of Eastlake; Rose Ann Nikolovski, 48, of Eastlake; Marko Nikoli, 33, of Eastlake; John Cendol Jr., 48, of Kirtland; Ruth Cendol, 55, of Kirtland; Daniel Kocher, 72, of Euclid; Edward Watral, 37, of Creston; and Jennifer Cerjan, 33, of Orrville (Fox 8.com March 2). A 26-count indictment was filed against these individuals who federal prosecutors said were responsible for the fraud that forced the National Credit Union Administration (NCUA) to liquidate what remained of the credit union’s assets, according to the Justice Department. Raguz, who was chief operating officer at the credit union, allegedly issued more than 1,000 fraudulent loans totaling more than $70 million to about 300 account holders from 2000 to April 2010, according to the indictment, Fox 8 said. Prosecutors allege that Koljo Nikolovski was one of the primary recipients of the fraudulent loans, allegedly receiving several loans from the credit union totaling $2.9 million during a two-year period from 2003 to 2005, Fox 8 said. The NCUA Office of the Inspector General (IG) revealed in October that the fraudulent loans put the credit union into liquidation, with losses to the National Credit Union Share Insurance Fund totaling $170 million (News Now Oct. 14). The IG report also noted that Raguz “manipulated loan records and masked the suspected loan fraud by constantly refinancing certain loans or making advance payment on those loans.” St. Paul Croatian FCU was placed into conservatorship April 23 and closed May 1. At the time of its closing, it held $238.8 million in funds from 5,400 members (News Now May 4).

CU System briefs (03/03/2011)

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* HARRISBURG, Pa. (3/4/11)--A homeless man turned in $1,440 in cash he found after Robert Stauffer, a lawyer who does work for APEX Community FCU, Pottstown, Pa., lost a credit union envelope stuffed with bills last week while conducting business in the area. According to the Pennsylvania Credit Union Association (PCUA), the man found the cash and flagged down a patrolman to turn it over. Stauffer, who collected the money from police Feb. 24, asked them to help him contact the Good Samaritan to "reciprocate his generosity." Dave Cocci, CEO of APEX Community, told PCUA the credit union and Stauffer plan to make a donation to the homeless shelter (Life is a Highway March 2) … * BEAVER FALLS, Pa. (3/4/11)--A Coraopolis, Pa., woman was indicted Monday by a federal grand jury on 16 counts of bank embezzlement and falsifying records while she was head teller at West-Aircomm FCU. Shirley A. Howl, 55, is accused of embezzling about $400,000 between August 2007 and November 2009 by taking money from three cash machines in the credit union's Beaver branch and making ledger entries before the machines were audited to make it appear funds were transferred to the vault. Then she allegedly "transferred" the money back to the machine so the vault's record would match the amount in the vault, said court records (Pittsburgh Tribune-Review and Pittsburgh Post-Gazette March 2) … * PLEASANTON, Calif. (3/4/11)--Patelco CU, a $3.6 billion asset credit union formerly based in San Francisco, has moved its headquarters to Pleasanton, Calif., in the East Bay area, to be closer to more members and to make it easier to recruit employees. The move occurred at the end of February. Patelco has rented 56,000 square feet in its office building. Roughly 40% of the credit union's California members reside in the East Bay area, the credit union said. It has 41 branches and 270,000 members and 540 employees (Contra Costa Times March 2) … * RIVERSIDE, Calif. (3/4/11)--Altura CU announced that Rosario
Click to view larger image Click for larger view
Inzinga, shown here, a member from Riverside, Calif., won $5,000 just by using her Altura Visa Debit Card. Members who used the card to make a purchase between Jan. 1 and Feb. 10 were entered to win $5,000 in the "Cha-Ching" Visa Debit Card promotion. They also had to have a checking account and register the card through Altura's website to participate. A member since 2005, Inzinga, a mother of two, said the money was a welcome surprise. The credit union wanted members to know that the card "is not just a tool for accessing their accounts or getting cash from an ATM," said Jennifer Binkley, Altura chief operating officer. The campaign "was designed to show members how easy it is to use" for everyday purchases, she added. (Photo provided by Altura CU) …

Friday deadline for Annie Vamper Award nominations

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NEW YORK (3/3/11)--Nominations for the National Federation of Community Development Credit Union’s 2011 Annie Vamper “Helping Hands” Award are open until Friday. The award celebrates individuals whose unselfish work for the community development credit union (CDCU) movement carries on Vamper’s legacy. The award recognizes individuals whose contributions to their credit unions have gone above and beyond the call of duty and exemplify the CDCU values. In 1990, the CDCU movement lost one of its heroes with the passing of Vamper, the federation’s associate director. Her life-long dedication to the credit union movement, and to small credit unions in particular, served as inspiration to credit union organizers and practitioners in low- and moderate-income communities nationwide, the federation said. For more information, use the link.

PCUA Lifetime Achievement Award winners announced

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HARRISBURG, Pa. (3/3/11)--The Pennsylvania Credit Union Association (PCUA) announced the winners of its 2011 Lifetime Achievement Awards. Fran Muto, president/CEO of People First FCU in Allentown, is the recipient of the William W. Pratt Professional of the Year Award (Life is a Highway March 2). Prior to assuming the CEO position at People First FCU in 1974, Muto was a National Credit Union Administration examiner for nine years. Muto served on the association’s board of directors from 2003 to 2008. He is a member of the Card Services for Credit Unions Board of Directors. Under Muto’s leadership, the former Mack Local 677 FCU has grown from a $15 million financial institution to a $285 million full-service community credit union. He is a strong supporter of community organizations and has been recognized for his involvement and activities, said PCUA. Jim Stere, a board director of Wheatland FCU, Lancaster, is the recipient of the Joseph A. Moore Volunteer of the Year Award. Stere has been a credit union volunteer for more than 27 years and served as board chairman from 1983 to 1989, and 2001 to 2002. He is an advocate of credit union education and promotes the importance of continued education among his peers to improve knowledge and training to better serve members. The awards will be presented at the association’s annual convention May 13 in Hershey.

N.C. CU regulator first to sign MOU with CFPB

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WASHINGTON (3/3/11)--The first memorandum of understanding (MOU) between a state credit union regulator and the Consumer Financial Protection Bureau (CFPB) was signed Wednesday to establish a framework for cooperation and information sharing for oversight mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Elizabeth Warren, head of CFPB, and North Carolina Administrator of Credit Unions Jerry Jay signed the MOU to address information sharing and regulatory coordination between the two entities for oversight of the nation's largest state-chartered credit union, State Employees' Credit Union (SECU), based in Raleigh, N.C. On Tuesday Warren told more than 4,000 credit union representatives attending the Credit Union National Association's (CUNA) 2011 Governmental Affairs Conference in Washington D.C., that the agency will be an ally to credit unions and help ensure that the movement's goals become reality, and that the bureau will work with credit unions "from the beginning." CFPB was given exclusive authority by the Dodd-Frank Act to examine credit unions and banks with more than $10 billion in assets and all nondepository insitutions regardless of size for consumer protection compliance. It must coordinate its exam schedule with the National Credit Union Administration or state regulators, said Kathy Thompson, CUNA senior vice president for compliance. SECU is one of three credit unions in the nation to exceed the $10 billion asset limit, said Thompson. It is also the only state-chartered credit union at this time to do so, said the National Association of State Credit Union Supervisors (NASCUS). The $10 billion cutoff doesn't mean that other credit unions will be hands-off to the bureau, said Thompson. CFPB and state regulators already have formally agreed to promote consistent examination procedures not only for banks but for nondepository institutions such as mortgage brokers, check cashers, payday lenders, finance companies and debt adjustors. CFPB will have to define what nondepository financial entities will it oversee, including privately insured credit unions, she said. CFPB will have access to all examination reports, regardless of credit unions' size or charter, so credit unions can expect more consistent and detailed consumer protection exams by their federal and state regulators, she added. At Wednesday's signing, Jay, who is also a NASCUS board director, said, "The North Carolina Credit Union Division is committed to coordination with the CFPB to fulfill both agencies' statutory and regulatory responsibilities." NASCUS will continue to facilitate the regulatory coordination necessary among state credit union agencies and the CFPB. NASCUS is working with the agency to sign an agreement to establish a framework for sharing information among state credit union regulators and for coordinating certain supervisory activities. "NASCUS will continue to work with the CFPB to facilitate additional agreements for NASCUS state credit union regulators as the agency starts to perform its duties," said NASCUS President/CEO Mary Martha Fortney.

CU member wins Visa Super Bowl Trip for Life

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CLEARWATER, S.C. (3/3/11)--With more than nine billion entries to obtain Visa’s Super Bowl Trip (and pair of tickets) for Life, a credit union member bucked the odds to win. Robyne Thomas made a $2.10 purchase at a Bi-Lo store in Clearwater, S.C., with her Visa card issued by SRP FCU in North Augusta, S.C. (Aikenstandard.com March 1). Although Thomas saw the Visa commercial--which ran many times in the days leading up to the Super Bowl XLV--promoting the contest, she didn’t think anything about it. “I could have have won the lottery easier than I won this,” she told the newspaper. Ed Templeton, SRP president/CEO called and left a message with Thomas’ niece for Thomas to call the credit union. After several missed calls, Thomas finally reached Templeton when he called her back and then … she hung up on him. Thomas said she thought the whole situation was a scam, especially when Templeton asked her to confirm her Visa card number. “[Templeton] contacted me on his personal cell phone, and I hung up on him,” Thomas said. The credit union arrived at her workplace and left cards for her to call. “I actually went to the SRP building to talk with the president,” she added (WRDW-TV News 12 Feb. 28). She received airfare, a four-night stay in Texas, and two tickets to Super Bowl XLV, and had “the experience of a lifetime,” rooting for the Green Bay Packers. However, it’s her last Super Bowl. Thomas decided to take the cash payout option for an undisclosed amount instead of the Super Bowl trip and tickets for life. With the payout, she paid off her house and car (WJBF-TV March 1).

Plenty of folks making the move to CUs--IBankrateI

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MADISON, Wis. (3/3/11)--In the aftermath of the December 2009 launch of the Move Your Money movement, people are moving their cash to credit unions. Credit union membership nationwide went up 2% in 2009, according to the Credit Union National Association (CUNA). The movement urged consumers--angered by the reckless lending practices of large national banks--to move to a credit union or community bank (Bankrate Inc. March 2). This Bankrate article was picked up by Yahoo! Finance and published March 3. “Do your banking at a community bank or credit union and there’s a good chance you'll land better interest rates on everything from credit cards and saving accounts to money markets and certificates of deposit,” the article said. “For example, a study by the Pew Charitable Trusts in July 2009 found credit card rates at the 12 largest banks at 12.24% to 17.99%. At the 12 largest credit unions, the rates were 9.9% to 13.75%.” Credit unions return surplus revenues back to members in the form of dividends, low fees, and competitive interest rates, Pat Keefe, CUNA vice president of communications and media, told Bankrate. Also, the average annual cost of fees on bank checking accounts is twice as high as the average annual cost of fees on credit union accounts, according to a November 2009 study by the Madison, Wis.-based Filene Research Institute, the article said. To read the article, use the link.

SECU adjusts several programs for members

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RALEIGH, N.C. (3/2/11)--State Employees' CU (SECU) of North Carolina announced adjustments to three programs that will benefit its members. The programs include a revamp of its mortgage assistance program, lower interest rates on its payday lending alternative, and absorbing appraisal costs for home equity lines of credit and closed-end second mortgage loans. With North Carolina facing a $2.7 billion budget deficit, SECU, based in Raleigh, is finetuning its Mortgage Assistance Program (MAP) to assist state government employees facing potential job cuts. The program, in effect since January 2009, was developed to help members state in their homes during the recession. The program has helped 7,000 families. In MAP II, members who experience job losses can meet in person with a senior credit union office and develop an individual financial plan to meet primary needs and obligations on a limited budget, said SECU. To avoid possible foreclosure situations, members with a SECU mortgage loan have several options, including partial payment alternatives, mortgage loan modifications, refinances or possible extensions. Budgeting, financial counseling and overall debt restructuring are elements of the revised program. As a prelude to MAP II, SECU is identifying members whose current loan situations warrant a refinance and has implemented a number of lending changes to accommodate possible refinance situations. SECU also is enhancing its payday lending alternative potential for nearly 100,000 monthly Salary Advance Loan (SALO) participants. The maximum $500 loan product will lower the standard 12% interest rate for many of the program's regular users to a share-secured rate of 5.5%, reducing members' interest costs by more than 50% and saving members more than $400,000 in interest costs. The credit union is also enhancing SALO's savings feature, to increase participants' savings balances and earnings by more than $1.5 million. Members saving at least $500 will see their interest on the SALO drop to 5.5% from 12%. The reduced rate remains in place as long as the savings balance is $500 or more. SECU's required savings percentage will rise to 7% from 5% to increase members' chance of graduating from the program into other long-term savings programs. A typical $500 loan advance will now result in a savings deposit of $35 instead of $25. SECU is exploring the possibility of offering a low $100 minimum balance certificate as part of the program. In the third program enhancement, SECU will absorb the cost of an appraisal for home equity lines of credit and closed-end second mortgage loans. Earlier SECU waived first mortgage loan appraisal fees for members after finding that the cost of an appraisal often deters members who are contemplating a refinance. The change is expected to save members $1.2 million annually, said SECU, which hopes the enhancement will open the door for more refinances. The credit union also has:
* Reduced the lifetime cap from 8% to 6% for a two-year adjustable rate mortgage loans; * Increased the maximum loan term for used-vehicle loans to 72 months; and * Waived Department of Motor Vehicle lien recording fees for vehicle loans.

CU System briefs (03/01/2011)

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* EUGENE, Ore. (3/2/11)--Oregon Community CU in Eugene, Ore., has donated $100,000 to Sacred Heart Medical Center Foundation to help medical school students get hands-on experience. The gift funds the Gordon and Joy Lee Hoerauf Endowment for Student Clerkships at the Center for Medical Education and Research at Sacred Heart Medical Center. More than 150 third- and fourth-year medical students receive part of their medical education in PeaceHealth’s hospitals and clinics statewide. The donation is the fourth installment toward a total gift of $1 million over 10 years by the $925 million asset credit union ... * SPRINGFIELD, Mo. (3/2/11)--Postal Federal Community CU (PFCCU) in Springfield, Mo., announced it plans to change its name by the summer, citing the desire to eliminate confusion about who can open an account at the credit union. The $129 million-asset PFCCU was started in 1929 by Springfield postal workers and then expanded membership to include federal employees. In 1994 it expanded its field of membership to serve a much larger group, including everyone who lives or works in a 10-county area in Southwest Missouri. “Now that our membership has been expanded, our current name creates confusion about who can open an account with us,” said Steve Pierson, PFCCU president/CEO. “Based on research we’ve conducted over the last few years, we learned our current name presents a barrier to people who believe they can’t use our credit union. By changing our name, we want to continue to honor our heritage while also letting members of our community know they can use our services" … * BEAUMONT, Texas (3/2/11)--Sandra H. Cooper, 56, president and treasurer of the now defunct Orange County Employees FCU, Beaumont, Texas, pleaded guilty Monday in a U.S. District Court to money laundering and embezzling more than $1.16 million of credit union funds over four and a half years. She faces up to 10 years in federal prison. A sentencing date has not been set, said U.S. Attorney John M. Bales (Targeted News Service Feb. 28). The credit union, with two employees, was housed in the administration building next to the Orange County Courthouse. The National Credit Union Administration declared the credit union insolvent in June 2010 and arranged for members' accounts to be transferred to Sabine, FCU, Orange, Texas … * SAN DIEGO (3/2/11)--Erin Diane Lovellette, 31, a former supervisor at Pacific Marine CU on the Camp Pendleton base in Oceanside, Calif., was sentenced Monday in a U.S. District Court to 18 months in federal prison for stealing $100,000 from the credit union. She also was ordered to pay the full amount in restitution. The theft occurred in May 2002 and was in the form of a tightly wrapped "brick" of $100 bills, which Lovellette later deposited in amounts of less than $10,000 into multiple bank accounts or other financial institutions to avoid currency transaction report filing requirements, said the U.S. Attorney's office (The Valley News Feb. 28) … * WINDSOR, Conn. (3/2/11)--Three branches of Windsor (Conn.) FCU received bomb threats within minutes of each other Monday afternoon, forcing the evacuation of the branches and nearby businesses. Authorities later determined the calls were false alarms. The calls arrived at branches in Windsor, Bloomfield and Granby at about 3:45 p.m. The caller said a bomb was going to detonate in the buildings, according to Granby police. The branches reopened Tuesday (WTNH.com and The Granby News Feb. 28) …

Study Why bank customers switch--its not fees

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WESTLAKE VILLAGE, Calif. (3/2/11)--Credit unions are seeing more members switching their business from banks, but they may be interested in why bank customers take the plunge to another institution. According to a new study of customers' shopping and selection process for banks, the most common reason isn't high fees--it's a change in life circumstances. Roughly 8.7% of bank customers surveyed in 2011 said they switched their primary banking institution during the past year to a new provider, according to the J.D. Power and Associates 2011 U.S. Retail Bank New Account Study, which was released Tuesday. That's up from the 7.7% who said they did so in 2010. This year, customers indicated they checked out 1.9 financial institutions while shopping around for another one--up from the average of 1.6 average banks in 2010, said the report. The most common reason for switching banks is a change in life circumstances, said Rockwell Clancy, vice president of the financial services practice at J.D. Power and Associates. Other popular reasons for switching included fees and rates, unmet expectations and poor service. Consumers who evaluated and ultimately selected a new financial institution indicated that the most important factors in their decision are advertising, branch convenience, products and services, promotional offers, and direct and indirect customer experience, including past personal interactions, recommendations and the institution's reputation. However, said Clancy, pricing--fees and interest rates--carries relatively little weight in influencing customer purchase decisions, despite media coverage of changes to fees for bank accounts and credit cards. Banks that performed well in acquiring new customers were more aggressive in their advertising and promotions, said the report. "It's undeniable that the 'blunt instruments' of ad spend, branch density and promotional offers such as gift cards have been effective during the past year in capturing market share," said Clancy. "The question is whether these provide sustainable competitive advantage, particularly when compared with customer acquisition gains resulting from positive past experiences with a brand and Other findings:
* Less than half (43%) of customers who purchased an additional banking product made that purchase at their primary financial institution. For those who turned to another institution for an additional product, promotional offers such as gift cards carried the most weight in influencing the purchasing decision. * Those who stay with their primary financial institution are most driven by positive past experience and perceptions that their institution is more focused on customers than on profits.
"Clearly, banks that are not providing a noticeably better experience are more likely to lose he business of indifferent customers who are more easily lured by the next attractive promotional offer to come along," said Clancy. The survey is based on multiple evaluations from 4,791 customers who shopped for a new banking account or new primary financial institution during the past 12 months. No credit unions were among the institutions in the study.

Watermark Sound CUs to merge

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TACOMA, Wash. (3/2/11)--The boards of Watermark CU, Seattle, and Sound CU, Tacoma, Wash., unanimously approved a merger agreement between the two organizations. The agreement is the first formal step in the merger process. Approval from state and national regulators and Watermark CU members are the next steps. The continuing credit union would use Sound CU’s charter and would operate as Sound CU with its corporate office in Tacoma. “We explored all strategic alternatives. A partnership with Sound CU presented a great opportunity,” said Bob Valentine, chair of the Watermark Board of Directors. “Both Watermark and Sound employees share the goal of providing high-quality financial services, with professionalism and enthusiasm. Combining the credit unions would allow the ongoing organization to better serve member/owners with 21 full-service branches from Lynnwood to Olympia.” The $557.3 million-asset Watermark and $536.5 million-asset Sound share a similar history. Chartered in neighboring cities to serve telephone company employees, each has expanded membership to serve anyone who lives or works in Washington. “Watermark wants to expand to serve its members in the South Puget Sound region. Sound has been working to expand north,” said Richard Brandsma, Sound CU president/CEO. “Combining the strengths from both credit unions would expand service for both membership groups through improved product lines, expanded technology offerings, and financial stability. Members would benefit from this merger of two strong credit unions.” Brandsma will lead the combined organization with assets of $1.1 billion and 21 branches in Western Washington, which would make it the fourth largest credit union in Washington. The board for the ongoing credit union would consist of 12 members with equal representation from Watermark and Sound. Sharon Sanford, Watermark CU President/CEO is scheduled to retire in late 2011.

ICBS MoneyWatchI Best way to get free checking--CUs

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MADISON, Wis. (3/2/11)--The best way for a consumer to obtain a free checking account is to join a credit union, according to a Monday article titled “Best Way to Get Free Checking,” by Farnoosh Torabi posted on CBS MoneyWatch. About 96% of 50 major credit unions offered free checking, found the Bankrate.com 2011 Credit Union Checking Study, CBS said. About 81.5% of U.S. banking customers had free checking in 2009, and that number dropped to 72.5% in 2010, according to Moebs Services. Although credit unions haven’t been completely unaffected by the financial crisis, and have raised some fees, many of those increases are less than what large banks have recently levied on customers, the Bankrate study found. “I think parking some savings at a credit union, as either your sole banking destination or part of your overall banking ‘portfolio,’ is a fine way to bank smart,” Torabi wrote. “The Credit Union National Association boasts that practically everyone is eligible to be a member at [a] credit union based on where you live, the company your work for, the school you attend or organizations you’re a part of.” Torabi added that she’s been a member of Digital FCU in Shrewsbury, Mass., since she was a teenager and even though she no longer lives there, she still keeps an active account at Digital. To read the article, use the link.

INews NowI Top 10 stories for February

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MADISON, Wis. (3/2/11)--National Credit Union Administration plans, financial literacy requirements for credit union directors and interchange dominated the News Now top 10 stories list for February. The stories are: 10. Social media gets new focus at NCUA ALEXANDRIA, Va. (2/7/11)--The National Credit Union Administration (NCUA), known already to "tweet" on Twitter, is enhancing its outreach through social media and has brought on a new employee to lead the charge. 9. Fed announces start of NMLS WASHINGTON (1/31/11)--The Conference of State Bank Supervisors' (CSBS) Nationwide Mortgage Licensing System & Registry (NMLS) has been upgraded to allow banks and credit unions to register their mortgage loan originators (MLOs), and became fully active earlier today. 8. NCUA compensation plan must address CU concerns: CUNA WASHINGTON (2/14/11)--As the National Credit Union Administration (NCUA) prepares to look at executive compensation rules later this week, the Credit Union National Association (CUNA) is urging the agency to consider credit unions' significant concerns before issuing any proposal. 7. Directors' fin. lit. requirements may be extensive WASHINGTON (2/24/11)--Larger, more complex federal credit unions may need to demonstrate a higher level understanding of financial risk to be in compliance with the National Credit Union Administration's (NCUA) newly adopted director fiduciary duties rule, Credit Union National Association (CUNA) Senior Vice President of Compliance Kathy Thompson has said. 6. CUNA: Two-year delay needed for interchange study WASHINGTON (2/23/11)--The U.S. Congress intended that small debit card issuers be protected from the rate regulations in the interchange law yet the Federal Reserve Board's implementation proposal fails to accomplish that goal, the Credit Union National Association (CUNA) said in its comment letter to the Fed filed yesterday. CUNA was commenting on the board's proposal to implement the interchange provisions of the Dodd-Frank Act. 5. House hearing hints of interchange rule delay WASHINGTON (2/18/11)--Several legislators called for a delay of implementation of the Federal Reserve's interchange fee proposal during a Thursday House financial institutions and consumer credit subcommittee hearing. Also prompting legislator concern about the impact on small issuers were comments from a Fed governor and earlier remarks by the Fed's chairman, as well as testimony from the Credit Union National Association's (CUNA) witness. 4. Oakland Municipal is first CU closing of 2011 ALEXANDRIA, Va. (2/7/11)--On Friday, the National Credit Union Administration (NCUA) was appointed liquidating agent of Oakland Municipal CU, of Oakland, Calif., by the state's Department of Financial Institutions (DFI). It was the first liquidation of a federally insured credit union in 2011. 3. NCUA details fin lit requirements for FCU directors ALEXANDRIA, Va. (2/8/11)--The National Credit Union Administration (NCUA) in its letter to federal credit unions No. 11-FCU-02 sought to remind federal credit union directors of specific financial literacy requirements that will become effective later this year as well as their general responsibilities as credit union leaders. 2. Fed ends development of three Reg Z mortgage rule changes WASHINGTON (2/2/11)--The Federal Reserve Tuesday announced that it would halt work toward finalizing three pending mortgage rulemakings under Regulation Z. Credit Union National Association (CUNA) President/CEO Bill Cheney had asked the Fed to drop these proposals and impose a moratorium on any further rulemakings on issues that will be under the authority of the Consumer Financial Protection Bureau as of July 21, 2011. 1. 2011 NCUSIF premium not a definite ALEXANDRIA, Va. (2/22/11)--The National Credit Union Administration said it may not need to assess a National Credit Union Share Insurance Fund (NCUSIF) premium on credit unions in 2011.

NCUA moves conservatorship loan suit to federal court

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MIAMI (3/2/11)--The National Credit Union Administration (NCUA) has filed a notice to remove a $15 million breach of contract lawsuit filed by a Florida credit union to the U.S. District Court for the Southern District of Florida in Miami. The suit concerns an agreement to buy mortgage loans from a credit union now in conservatorship. Power Financial CU, Pembroke Pines, Fla., filed its complaint Feb. 14 in the 11th Circuit Court against Keys FCU, Key West, Fla. NCUA filed its notice of removal with the U.S. District Court on Thursday, saying that the agency, as conservator of Keys FCU, is the real party to the case. Keys was placed into conservatorship on Sept. 24, 2009, according to court documents. The case relates to a loan sale agreement that Power Financial and Keys Federal entered into on July 12, 2010, according to the original complaint filed in the 11th Circuit Court. The complaint said Power Financial agreed to purchase certain mortgage loans of Keys Federal and that the borrowers whose mortgage loans were to be purchased would automatically become members of Power Financial. On Aug. 27, 2010, Power Financial received a letter from Keys Federal that "expressly repudiated" the contract, explaining that the transaction was "no longer in the best interest" of Keys Federal. It is "extremely difficult," said Power Financial's complaint, for it to purchase replacement mortgage loans because it "is limited by state regulation to specific preapproved geographic areas" related to its field of membership. "Mortgage loans available for purchase in the communities in which Power Financial has members are often not suitable for purchase because of the current real estate conditions in those communities," the document said. The complaint noted that on Oct. 12, Power Financial received consent for the sale from the Florida Office of Financial Regulation, and on Oct. 19, Power notified Keys' attorneys of the approval, but never heard back on the matter.

NCUF honors Hanley Mica and NYIB

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WASHINGTON (3/2/11)--The National Credit Union Foundation (NCUF) presented three Herb Wegner Memorial Awards at its annual dinner Monday night in Washington.
Click to view larger image National Credit Union Foundation Chairman Gary Oakland, right, and Vice Chairman Laida Garcia present Rudy Hanley, center, president/CEO of SchoolsFirst FCU, with the Wegner Award for Lifetime Achievement.
Click to view larger image Dan Mica, former president/CEO of the Credit Union National Association, speaks after accepting his Wegner Award for Individual Achievement. National Credit Union Foundation Chairman Gary Oakland is in the background.
Click to view larger image Rebecca Isaacs, National Youth Involvement Board (NYIB) chairman, and Brandon Pugh, NYIB chairman emeritus, speak after accepting the Wegner Award for Outstanding Organization. (Photos provided by the National Credit Union Foundation)
The awards ceremony celebrated three of the highest national honors in the credit union movement:
* Lifetime Achievement: Rudy Hanley, president/CEO, SchoolsFirst FCU, Santa Ana, Calif. Hanley has been described as a visionary, consensus builder, and a respected voice for all in the credit union industry. * Individual Achievement: Daniel A. "Dan" Mica, former president/CEO of the Credit Union National Association (CUNA). Mica helped preserve credit union access for millions of consumers, protect credit unions' federal tax exemption, raised credit union political involvement to the highest levels, and a host of additional achievements. * Outstanding organization: National Youth Involvement Board (NYIB). For 38 years, the NYIB and its volunteer network of credit union youth advocates have consistently led the charge to bring financial education and understanding of credit unions to America's young people.
"There is no honor greater than the one that comes from your peers," said Hanley. "It is especially humbling when it comes from those you admire and are far more deserving." More than 800 credit union leaders and supporters attended the event held during CUNA's Governmental Affairs Conference (GAC) this week. "This year's winners will join an elite group of 45 individuals and 21 organizations whose extraordinary efforts over the past 23 years have earned the credit union movement's highest national honors," said emcee Bob Schumacher, CEO, MountainCrest CU, Arlington, Wash., and chair of NCUF's Awards and Recognition Committee. The awards are named for the late CUNA CEO Herb Wegner, whose innovative ideas and deeds revolutionized the ways that credit unions serve their communities. They carry on his spirit of "innovative, creative, risk-taking" leadership. To learn more about this year's award recipients, use the link.