- DES MOINES, Iowa (4/2/12)--A Des Moines-based credit union wired $14,000 to an account in Australia to help out a member who wanted to pay for funeral expenses for a nephew and had requested the wire transfer. However, the request was bogus. A crook had hacked into the member's e-mail account and sent the request via e-mail to the credit union. Financial Plus CU has reimbursed the member's account and is trying to recover the funds that went overseas, police said. The member's nephew is alive and does not live in Australia (Des Moines Register and CBS 2 March 30) …
- EL PASO, Texas (4/2/12)--El Paso Mayor John Cook is the latest Texas city official to sign an "International Year of Cooperatives" proclamation, signifying the critical role played in the community by nine Texas credit unions making up the El Paso Chapter of Credit Unions. Pictured are credit union representatives who attended the signing ceremony Tuesday. "Credit unions are among the most recognizable and widely embraced cooperative businesses in Texas," said Texas Credit Union League President/CEO Dick Ensweiler. He noted the proclamations help the public understand that by joining a credit union, they are actually earning money. El Paso joins Corpus Christi, Del Rio, Fort Worth, Galveston, Houston, Kingsville, Tyler and other communities that have made proclamations that stress the opportunities that cooperatives provide for local economic development and people from a variety of socioeconomic backgrounds (LoneStar Leaguer March 30). (Photo provided by the Texas Credit Union League) …
- WYOMISSING, Pa. (4/2/12)--Utilities Employees CU (UECU), a credit union serving the energy and utility industry nationwide, has passed the $1 billion asset range, the Wyomissing, Pa.-based credit union announced Friday. UECU is a virtual credit union that provides financial services to employees for 600 utility companies and their families. The milestone makes the credit union one of the 200 largest credit unions in the U.S. in terms of asset size. "Our operating expenses are consistently less than half those of the typical credit union our size," said Glen A. Yeager, president/CEO at UECU. "We have developed a virtual business strategy that allows us to run efficiently and return profits to our members, while providing a superior level of personal service," he added. For more than 75 years, UECU has operated without a branch system, initially handling its long-distance transactions by mail. Today members can manage their accounts 24 hours a day through its online home banking system and other electronic services, or by phone …
SEATTLE (4/2/12)--When Bob Harvey retired in July as CEO of the $567 million asset Seattle Metropolitan CU, he had no idea he'd be involved in arresting a woman suspected of robbing his former credit union.
Harvey hung up the suit and ties but kept the police uniform he'd worn in the Seattle Police Department's Reserve Unit since 1994, said the Northwest Credit Union Association (NWCUA) in its newsletter, Anthem (March 27).
On March 9, Harvey was asked to participate in a stakeout along a bus route in Auburn, Wash., to wait for two female suspects in a Key Bank robbery that afternoon.
One woman was also a suspect in a Feb. 28 robbery of a credit union in Seattle. When Harvey looked at the address of the credit union, he had a "Wait a minute" moment. The address was a branch of Seattle Metropolitan.
Soon the two suspects got off the bus and they were arrested without incident."They were cooperative but were very surprised we found them," he told NWCUA. He didn't tell them he had once run the credit union one would be charged with robbing. "When I'm in that uniform, I'm Officer Harvey," he explained.
He noted that executives, business owners and other successful people do well in police reserve programs, and said other credit union professionals could consider such a program as another way to give back to their communities.
The reserve program requires full Academy training--between six and eight months' worth--followed by frequent weekend training sessions. His fellow reserve officers include business owners, government employees and a senior executive officer of an airline. They are not paid with money; their payment is in the satisfaction of serving people.
While it's nice to catch the bad guys, Harvey explained the job is more about helping people, such as reuniting many lost children with panicked parents after games at the old Kingdome. He noted that a police department's heartbeat changes when a child is reported missing.
"It is amazing," he told NWCUA. "Everything else shuts down. No one goes home for the day. No one eats dinner. Everyone stays focused until the child is found."
Harvey said he read a lot of books about how to retire. Many plan for retirement financially and socially, but some are not mentally ready to retire. So he will keep being Officer Harvey for now.
MADISON, Wis. (4/2/12)--The large-scale data breach revealed Friday at Atlanta-based card processor Global Payments Inc. has prompted CUNA Mutual Group to send its credit union bond policyholders a Risk Alert with advice on what they should do.
CUNA Mutual said it was informed of the breach by the card associations such as Visa and MasterCard. The breach involves both credit and debit cards, and the card data at risk involves the entire magnetic stripe information, both Track 1 and Track 2, the alert, issued Friday, said.
"Credit unions impacted have an exposure to future magnetic stripe fraud," said CUNA Mutual. "We strongly recommend credit unions consider blocking and reissuing the impacted open card numbers. Credit unions electing not to block and reissue could experience magnetic stripe fraud in the future," the alert said.
Among the steps to take to mitigate the risks are:
Determine fraud exposure. Evaluate the card number compromise information to determine if your credit union has an increased exposure for future magnetic stripe fraud.
Match names for Track 1. Confirm the credit union uses name matching to help prevent future card fraud where the fraudsters change cardholder names on Track 1.
Report to the credit bureau. Since Track 1 carries the cardholder name, the cardholder may want to place an initial fraud alert with the credit bureaus to prevent identity fraud.
Review card association alerts. The alerts are: Visa CAMs US-2012-0244A-PA (Proactive alert) and MasterCard's alert MCA0238-US-12.
Review open accounts. Determine which cards contained in the alerts are still active (open).
Move up card expiration dates. Accelerate the card expiration date on active cards contained in the alert if the card number will expire in the next 30 to 180 days. Credit unions could reissue those cards now.
Review other accounts. Determine which cards contained in the alerts have been closed due to fraud. Analyze the fraud pattern on the closed accounts to detect the possible common point of compromise.
Identify compromised location. If you identify a common point of purchase (CPP), report the location to Visa using its common point-of-compromise form or MasterCard (or your processor) using their ADC (account data compromise) form. These forms can be found on their secure websites.
Take recovery action. Confirm the card association's available dispute action on the compromised cards, as well as any timeframes.
Engage in ongoing monitoring. Continue to watch for any follow-up information tied to this breach and if additional action is needed.
Confirm fraud reporting. Confirm all fraud associated with the event has been reported to the card associations and to CUNA Mutual Group. (Visa: Fraud Reporting System--TC-40. MasterCard--Safe System. Plastic Card Customer Card Center.)
CUNA Mutual Groups said it will continue to monitor the situation with Visa and MasterCard and will notify policyholders when new information becomes available.
Like CUNA Mutual, the Credit Union National Association (CUNA) is monitoring events related to the breach and is seeking more detail from card associations. RELATED STORY: News Now's
article "CUNA seeks CU info in massive breach."
WASHINGTON (4/2/12)--The Credit Union National Association (CUNA) is seeking specific credit union information from Visa and MasterCard in the wake of the disclosure Friday that the companies are notifying card-issuing credit unions and banks of a massive data breach at a third-party payments processor, Atlanta-based Global Payments Inc.
In a phone call with CUNA Friday afternoon, Visa said that about two weeks ago it was notified by an entity that it suspected a breach. By March 22, Visa received a file from the entity listing the accounts it believed to be at risk. Visa distributed to issuers with impacted accounts so they could distribute cards to the impacted individuals. Visa said that malware was installed in the entity's system and the card data was "scraped."
Visa did not identify the entity. However, Atlanta-based Global Payments on Friday afternoon issued a press release saying it had discovered the breach in a portion of its systems in early March. It determined card data may have been accessed and said it "identified and self-reported unauthorized access into a portion of its processing system." It "immediately engaged external experts in information technology forensics and contacted federal law enforcement. The company promptly notified appropriate industry parties to allow them to minimize potential cardholder impact" and "is continuing its investigation into this matter," the press release said.
"It is reassuring that our security processes detected an intrusion," said Global Payments Chairman/CEO Paul R. Garcia. "It is crucial to understand that this incident does not involve our merchants or their relationships with their customers," he added.
Both Visa and Mastercard, in statements e-mailed to CUNA, noted that there was no breach of their systems.
"There has been no breach of Visa systems, including its core processing network VisaNet," said Visa's statement.
"Visa has provided payment card issuers with the affected account numbers so they can take steps to protect consumers through independent fraud monitoring and, if needed, reissuing cards," said Visa's statement.
"It's important for U.S. Visa consumer cardholders to know they are protected against fraudulent purchases with Visa's zero liability fraud protection policy, which exceeds federal safeguards," said Visa. The company encouraged cardholders to "regularly monitor their accounts and to notify their issuing financial institution promptly of any unusual activity." It provided a link for additional consumer security tips (use the resource link).
"Every business that handles payment card information is expected to protect the security and privacy of their customers' financial information by adhering to the highest data protection standards," Visa said. "Visa also supports advanced security layers such as encryption, tokenization and dynamic authentication through EMV chip technology to further protect sensitive account information and minimize the impact of data compromises," it continued.
MasterCard also confirmed today to CUNA that it "is currently investigating a potential account data compromise event of a U.S.-based entity and, as a result' we have alerted payment card issuers regarding certain MasterCard accounts that are potentially at risk."
The Purchase, N.Y.-based company, in a statement sent to CUNA, said it "is concerned whenever there is any possibility that cardholders could be inconvenienced, and we continue to both monitor this event and take steps to safeguard account information. If cardholders have any concerns about their individual accounts, they should contact their issuing financial institution."
It also noted that "law enforcement has been notified of this matter and the incident is currently the subject of an ongoing forensic review by an independent data security organization. It is important to note that MasterCard's own systems have not been compromised in any manner."
The number of cards compromised and the number of credit unions and banks being notified were not announced. The breach was first reported by Krebs On Security blog.
After it was revealed by media that Global Payments was the entity, company shares dropped 13% and the company halted trading of its shares.
Global handles electronic transaction processing services for merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies, and multi-national corporations throughout the U.S., Canada, Europe and Asia-Pacific region. Its solutions encompass credit and debit cards, business-to-business purchasing cards, gift cards, electronic check conversion and check guarantee, verification and recovery including electronic check services and terminal management.
For information on steps to take, see related the News Now article, "What to do to mitigate breach risks--CUNA Mutual."
FORT LAUDERDALE, Fla. (4/2/12)--A federal judge has ordered a Florida-based credit union and the Wall Street banks and ratings agencies it is suing over $100 million in losses from collateralized debt obligations (CDOs) to go to the negotiating table.
U.S. Magistrate Judge Barry S. Seltzer in the U.S. District Court for the Southern District of Florida Wednesday issued the order requiring mediation in the case filed by Melbourne, Fla.-based Space Coast CU, acting as successor in interest to the defunct Eastern Financial Florida CU, against Merrill Lynch and other banks and ratings agencies.
Eastern Financial Florida CU, which was based in Miramar, Fla., was acquired by Space Coast in 2009 after becoming the largest natural person credit union failure in history. The suit seeks to recover more than $100 million in investment capital paid by Eastern Financial for the CDOs during 2008 to 2010, plus damages.
Defendants in the case include: Merrill Lynch and its credit corporation, Merrill Lynch Home Loans; Wells Fargo Securities (former Wachovia Capital Markets); J.P. Morgan Securities (formerly Bear Stearns & Co. Inc.); UBS Securities; Barclay's Capital Inc.; Richard S. Fuld Jr., who ran Lehman Brothers at the time; Moody's Investors Service Inc.; and The McGraw-Hill Cos. Inc. (formerly Standard & Poor's Ratings Services).
In the order requiring mediation, the court gave the parties 14 days to agree upon a mediator. All proceedings will be confidential and privileged. At least 14 days before the mediation date, the parties, whose representatives must have full authority to enter into a compromise and settlement, must present their confidential briefs identifying the issues to be resolved. Cost of mediation will be shared equally by the parties unless otherwise ordered by the court. After the mediation conference, the mediator has seven days in which to file the mediation report.
The court noted that if mediation is not conducted, the case may be stricken from the trial calendar and other sanctions imposed.
The court, in a separate scheduling order, set a pre-trial time line with pretrial motions set for May 24, 2013. It also set a date for a two-week trial to begin Sept. 9, 2013.
PLANO, Texas (4/2/12)--Credit Union Resources Inc. has bought a one-third interest in the Catalyst Corporate FCU building in Plano, Texas, for the future headquarters for Credit Union Resources and the Texas Credit Union League (TCUL).
Key factors precipitating the purchase included: low interest rates on investments, a buyer's real estate market, and investment in a premium building in a marketplace that is expected to experience significant recovery, TCUL said (LoneStar Leaguer March 30).
"Our space requirements fit nicely into one-third of the Catalyst building and we can once again own our office space, thereby helping to control future housing costs," said Dick Ensweiler, president/CEO of TCUL and Credit Union Resources.
"Timing is everything," Ensweiler added. "The Catalyst Corporate FCU building is considered prime real estate, but we were able to take advantage of current economic conditions and purchase a share of the building at a substantially lower cost than if we were to build today."
Economies of scale that both organizations can pass on to their members will be realized by sharing space with TCUL, said Kathy Garner, Catalyst's president/CEO. "This move gives Catalyst added flexibility that will allow us to continue providing innovative products and services," Garner explained.
Credit Union Resources, a wholly owned subsidiary of TCUL, offers fee-based products and services.
MADISON, Wis. (4/2/12)--The Wisconsin Department of Financial Institutions (DFI) and Wisconsin Department of Public Instruction (DPI) have made $250,000 available to the state's K-12 public and private schools to promote financial literacy through a new program announced Friday--just in time for National Financial Literacy Month.
Schools can apply for up to $10,000 in funding to promote financial literacy through the program, a collaborative effort that includes DFI, DPI, Gov. Scott Walker's Council on Financial Literacy and the Wisconsin Women's Council.
The application deadline for grants is June 15. Award recipients will be notified by July 27. DPI is administrating the program.
The $250,000 financial commitment from DFI will come from settlement funds the department has received over the last couple of years, DFI Secretary Peter Bildsten said.
"Through our enforcement actions, DFI at times collects payments from entities that have wronged Wisconsin consumers," Bildsten said. "Some of those settlement funds are designated specifically for financial literacy efforts. What better way to invest these funds than in the personal financial knowledge of our young people."
The intent of the program is to support the efforts of individual teachers and school districts to begin new and sustainable programs and events. Teachers, schools or districts are eligible to apply for awards ranging from $500 to $10,000 and may submit proposals for each school level--elementary, middle and high school.
A subcommittee of the Governor's Council on Financial Literacy will review recommendations from DPI and select the final award recipients. All proposals must indicate how they support approved academic curriculum and integrate Wisconsin's Model Academic Standards on Personal Financial Literacy.
Credit unions and the Credit Union National Association (CUNA) are promoting financial literacy this month with the month-long National Youth Saving Challenge, held in conjunction with National Credit Union Youth Week. This year, National Credit Union Youth Week will be held April 22-28, with the theme "Be a Credit Union Super Saver."
News Now will report throughout the month on credit unions' financial literacy activities.
PORTSMOUTH, N.H. (4/2/12)--The governor of New Hampshire and mayor of Portsmouth, N.H., lauded Service CU, a $1.98 billion asset credit union based in Portsmouth, for its community service during its 55th annual meeting Thursday night.
At the event attended by nearly 300 credit union employees and members, Gov. John Lynch and Mayor Eric Spear made remarks, with Lynch serving as the keynote speaker (Seacoastonline.com March 29).
Lynch praised Service CU for consistently giving back to the community and noted the credit union's leadership in helping the state weather several natural disasters over the course of many years. He was reported as saying, "I can't think of another company who has been more helpful to the state since I've been governor than Service CU."
Spear, in his remarks, said he was thankful the credit union is based in Portsmouth. He mentioned the credit union's efforts in adding to Portsmouth's community and economic prosperity and its thoughtful investment of financial capital in local businesses and employees.
Service CU also has invested social capital into wide-ranging programs that enhance the quality of life in the area, he added.
MADISON, Wis. (4/2/12)--About 40 students participated in a financial reality fair sponsored by the National Credit Union Foundation (NCUF) during the Credit Union National Association's (CUNA) Governmental Affairs Conference (GAC) in Washington, D.C.
U.S. Rep Jim Himes (D-Conn.) (second from left) stopped by the National Credit Union Foundation's Reality Fair during the Credit Union National Association's Governmental Affairs Conference. Himes is pictured with, from left, Kathy Chartier, president/CEO, Members CU, Stamford, Conn.; Tony Emerson, president/CEO, Credit Union League of Connecticut; and Joanne Todd, president/CEO, Northeast Family FCU, Manchester, Conn. (Photo provided by National Credit Union Foundation)
The fair, in its the second year, was held in the Cannon Office Building on Capitol Hill March 21, with student from nearby Roosevelt Senior High School participating. GAC attendees stopped by to observe the fair during their Capitol Hill visits, as did U.S. Rep. Jim Himes (D-Conn.).
A reality fair a hands-on experience in which students identify their career choice and starting salaries, then complete a budget sheet requiring them to live within their monthly salary while paying for basics such as housing, utilities, transportation, clothing and food. Additional expenditures such as entertainment and travel also are factored in.
Throughout the fair, there are temptations for additional spending. Students must learn to balance their wants and needs to live on their own. After the students have visited different booths covering components of independent living, students balance their budget, and then sit down with a financial counselor for review.
Almost 90% of the students who participated said they will start a monthly budget, and 100% said the fair changed the way they will save and spend money.
The GAC event was sponsored by NCUF with support and expertise from:
- The Credit Union League of Connecticut;
- Maryland & D.C. Credit Union Association;
- Congressional FCU, Washington, D.C.;
- HEW FCU, Alexandria, Va.; and
- GPO FCU, Washington, D.C.
"Giving students a taste of 'reality' in a safe environment is one of the best ways I've ever witnessed to teach students about financial responsibility," said Charles A. Mallon, Jr., Congressional FCU president/CEO.
Texas State Rep. Jose Menendez (D-124) joined Generations FCU board of directors, senior managers and H-E-B Plus Store staff to cut the ceremonial ribbon for the credit union's five new retail branches opened within 62 days. (Photo provided by the Texas Credit Union League)
SAN ANTONIO (4/2/12)--Texas State Rep. Jose Menendez (D-124) joined Generations FCU and H-E-B Plus Store Tuesday at an event held at an H-E-B store location in San Antonio to open the credit union's five new retail branch locations Tuesday. The credit union opened the five branches within 62 days at H-E-B stores.
With the newest branches, the $385 million asset, San Antonio-based Generations now has 14 locations across San Antonio and Bexar County (LoneStar Leaguer
"This is more than just a ribbon-cutting event for us," said President/ CEO Tim F. Haegelin. "Our staff came together and opened five new branches in 62 days. It's a monumental task by any standard, and we really wanted to take this opportunity to recognize all the hard work and dedication that went into making this relationship with H-E-B a reality."
All Generations H-E-B retail locations are full-service branches where members and potential members can open accounts, request debit cards and apply for loans, among other services. Anyone who lives, works, worships, volunteers or attends school in Bexar County, and family of current members, are eligible for membership.
"One of the directives of our founding members was to be a true financial advocate for our community, and a significant aspect of that is access, convenience and availability," Haegelin said. "This relationship with H-E-B is just another way that we as a credit union can reach out into the community every day and live up to that original challenge of our founding members."
MADISON, Wis. (4/2/12)--A new research report from Filene Research Institute indicates that online education is an effective means of improving financial literacy among surveyed credit union employees--and could produce similar results with credit union members.
"Investor Education for Credit Union Employees: Survey Results for Wisconsin" analyzes research conducted at the University of Wisconsin-Madison in cooperation with the Wisconsin Credit Union League. Researchers administered a series of surveys followed by financial education modules to hundreds of employees at Wisconsin credit unions.
Researchers wanted to know whether employees would gain knowledge and improve their financial behavior after taking part in a nine-part online education series--covering topics such as "Basics of Investing," "Investing in Mutual Funds" and "Working with Financial Advisers."
Credit union employees scores on interest and credit responses rose 3% to 4% after taking part in the series. Scores improved 11% for knowledge of investing for retirement, 21% for knowledge of stocks and bonds and 25% for knowledge of investor information available online.
Following the courses, 8% of the participants reported opening an individual retirement account, 6% reported establishing a written budget, and 5% each reported drafting a written financial plan and saving for three months of expenses.
The data may be somewhat skewed because of the high proportion of married women that took part in the study.
If credit union employees mirror ordinary members, the research supports the idea that online education can lead to increased financial knowledge and better habits, according to author J. Michael Collins, PhD, assistant professor and director of the Center for Financial Security at the University of Wisconsin.
"That's promising in a cultural environment that increasingly prizes on-demand information access and in which members may be less inclined to sit through traditional financial education," Collins writes. "Granted, the time-intensive modules used in this research were given to users with some financial expertise, but if they can learn and show positive behavior changes, how much more effective might similar education be for the average member?"
WASHINGTON (Updated: 6:50 p.m. ET 3/30/12)--The Credit Union National Association (CUNA) has confirmed that Visa and MasterCard are notifying card-issuing credit unions and banks of a possible massive data breach involving Atlanta-based Global Payments Inc., a third-party payment processor.
Visa Inc. told CUNA this morning that it "is aware of a potential data compromise incident at a third party entity affecting card account information from all major card brands. There has been no breach of Visa systems, including its core processing network VisaNet."
"Visa has provided payment card issuers with the affected account numbers so they can take steps to protect consumers through independent fraud monitoring and, if needed, reissuing cards," said Visa's statement.
"It's important for U.S. Visa consumer cardholders to know they are protected against fraudulent purchases with Visa's zero liability fraud protection policy, which exceeds federal safeguards," said Visa. The company encouraged cardholders to "regularly monitor their accounts and to notify their issuing financial institution promptly of any unusual activity." It provided a link for additional consumer security tips (use the resource link).
"Every business that handles payment card information is expected to protect the security and privacy of their customers' financial information by adhering to the highest data protection standards," Visa said. "Visa also supports advanced security layers such as encryption, tokenization and dynamic authentication through EMV chip technology to further protect sensitive account information and minimize the impact of data compromises," it continued.
MasterCard also confirmed today to CUNA that it "is currently investigating a potential account data compromise event of a U.S.-based entity and, as a result' we have alerted payment card issuers regarding certain MasterCard accounts that are potentially at risk."
The Purchase, N.Y.-based company, in a statement sent to CUNA, said it "is concerned whenever there is any possibility that cardholders could be inconvenienced, and we continue to both monitor this event and take steps to safeguard account information. If cardholders have any concerns about their individual accounts, they should contact their issuing financial institution."
It also noted that "law enforcement has been notified of this matter and the incident is currently the subject of an ongoing forensic review by an independent data security organization. It is important to note that MasterCard's own systems have not been compromised in any manner."
Later in the day Global Payments Inc. announced part of its system had been accessed. It promptly notified law enforcement authorities and industry parties to allow them to minimize potential cardholder impact, said Global Payments. See Monday's News Now for more detail.
The number of cards compromised and the number of credit unions and banks being notified were not announced. The breach was first reported by Krebs On Security blog.
MADISON, Wis. (3/30/12)--Credit unions in Michigan urged their congressional delegates "to take quick action in support of a proposal that will strengthen small businesses, jumpstart local economies and create jobs." Likewise, Pennsylvania credit unions are asking their lawmakers to support the Credit Union Small Business Jobs Bill, S. 2231, when it comes up for a vote soon.
Senate Majority Leader Harry Reid (D-Nev.) has indicated he will hold a vote on Sen. Mark Udall's (D-Colo.) credit union member business lending bill S. 509. The legislation, now S. 2231, is on a fast track, with a vote expected soon. The bill would increase credit unions' member business lending cap to 27.5% of assets from the current 12.25%.
"We all can agree that credit unions need a win, and fortunately that time is now," said Pennsylvania Credit Union Association (PCUA) President/CEO Jim McCormack. "This will be the first time a stand-alone credit union bill will be considered on the floor since 1998, when the Senate voted on H.R. 1151 (the Credit Union Membership Access Act). The credit union full court press on District and Washington Senate Offices must start now," he said in PCUA's newsletter (Life is a Highway March 29).
Michigan's credit unions say that small business needs the law. "Small businesses in Michigan and across America are the engines of employment and economic growth--and these small businesses need relief from a credit crunch that is holding them back," said David Adams, president/CEO of the Michigan Credit Union League (MCUL) & Affiliates.
"Michigan's credit unions have consistently stepped up to support small businesses at a time when other lenders have stepped back. Credit unions can and want to do more to help get Michigan and America working and competing again, and that's why it's critical that the U.S. Senate pass" the bill, he added.
"One of the best ways to help small businesses get access to capital so they compete and create jobs is to unleash credit unions' full potential to support small businesses. That requires removing an arbitrary, irrational and counter-productive limit on small business lending," Adams said in a press release. "Credit unions want to play a greater role in strengthening the economy of Main Streets across Michigan and America," he said, noting that the bill is "vital to making that happen."
Michigan has an estimated 180,000 small businesses, 158,000 of which employ fewer than 20 people, according to the Small Business Administration. Small businesses represent 98.3% of Michigan employers and are responsible for 51.6% of private sector jobs in the state. "In Michigan, 90% of businesses fail by their 10th year, largely because they lack guidance; 80% fail because they don't have access to capital," said MCUL.
The league said that data show increased small business support from Michigan's credit unions comes as bank lending has remained sluggish since the 2008 recession. Federal Deposit Insurance Corp. data indicate that U.S. banks' small business lending continued to decline in fourth quarter of 2011, and that year-over-year bank small business loans outstanding declined by nearly 5% in 2011, said the Michigan league.
If approved, the bill, which is opposed by banks, would inject $13 billion in new small business loans into the economy and help create as much as 140,000 new jobs without cost to the taxpayers, said the Credit Union National Association (CUNA). CUNA and more than 4,000 attendees of its Governmental Affairs Conference last week visited legislators on Capitol Hill to urge passage of the bill.
ATLANTA (3/30/12)--Lending to sub-prime borrowers rose across all lending sectors during 2011, says Equifax's March National Consumer Credit Trends Report
, a joint product of Equifax and Moody's Analytics.
New credit in 2011 totaled $782 billion--below pre-recession levels but gaining more than 10% over 2009 and 2010 levels, which were $695 billion and $709 billion, respectively.
Total retail credit card limits rose 6% from December 2010 to December 2011. Total bank credit card limits jumped 24% during that period, while consumer finance credit limits increased a modest $1.2 billion.
U.S. consumer debt totaled $11 trillion, down 11% from the $12.4 trillion peak in fourth quarter 2008. Equifax said the drop is driven by an almost 12% decline in home financing balances, which totaled $8.7 trillion this past February, compared with $9.8 trillion in 2008.
Non-mortgage and non-student consumer debt balances dropped 22% from 2008's peak of $2.05 trillion. After reaching a post-recession low of $1.6 trillion last May, consumer debt balances have risen about 2%, said the report.
"Year-over-year results show borrowers are taking advantage of the new opportunities and seeking to diversity their financial activity, which is building momentum toward economic improvement," said Equifax chief economist Amy Crews Cutts.
Here are the findings in several key areas.
Bank credit cards:
- Lending to sub-prime consumers increased 41% from 2010 to 2011 as sub-prime borrowing hit a four-year high last December, with 1.1 million new bank credit cards issued.
- New sub-prime card limits grew 55% for the period to $12.5 billion, the highest level since $27.4 billion in 2008.
- Bank credit card growth continued, with 39.9 million bank cards opened in 2011--an 18% increase from 2010 and the highest total since 2008. However, the total is still below pre-recession levels.
- The increase in total bank card originations was accompanied by a 31% hike in total credit limits. 2011 was the first time in more than four years that credit lines increased, reaching $163 billion.
- Subprime borrowers gained share in the new-auto loan market, especially in the auto finance segment where they now make up more than 46% of the market. Prime borrowers make up 83% among auto bank originations but also lost share the past two years to subprime borrowers.
- New-auto finance loans amounts rose $11.6 billion--to $176.2 billion--in 2011 from $164.6 billion in 2010. 2011 hit the highest originations level since the $221.1 billion loaned in 2007.
- Auto bank loan amounts were up 14%--to $187 billion in 2011--from $162.1 billion in 2010.
- The number of new auto loan originations increased 2% to $19.6 million from 2010's $17.3 million. Equifax noted that the 2011 figure surpasses 2008 totals and is 9% lower than the six-year high reached in 2007 at $21.5 million.
- Severe delinquency rates for auto finance loans were worse than for auto bank tradelines; however, both rates have returned to pre-recession levels.
- For 2011, total new-auto loan originations hit a six-year high in December, although total originations for the year were at a four-year peak.
- New consumer finance loans originated in 2011 totaled $20.2 million, up 4% from 2010, and the highest since 2008.
- Delinquency rates dropped to 7% in February 2012, the lowest since July 2007.
- These loans' originations fell from 2007 to 2010, but the trend reversed in 2011, with $1.2 billion of new loan amounts added.
- Originations in December reached $5 billion; the highest since December 2008 when it was $5.1 billion.
- Although consumer finance loans typically served high-risk consumers, in February 2011, low-risk borrowers became the dominate market segment. As of February 2012, over 33% of these loans (by dollars) were to high-risk borrowers; 39% went to low-risk borrowers.
- New student loan originations are dominated by higher-risk (little income, young credit histories) borrowers . However, the share shifted slightly the past two years to low-risk student borrowers.
- As of December 2011, nearly 66% of newly originated student loans were held by higher -risk borrowers.
- Among total outstanding student loan balances, low-risk borrowers have declined in share, although they still dominate. As of February 2012, low-risk borrowers accounted for 37% of outstanding student loan balances; high-risk student borrowers accounted for nearly 35%.
- Average loan size for new student loans declined in December 2011 from December 2010, but total new student loan debt per consumer rose to a five-year high. In December 2011, the average loan size decreased 8% to $6,333 from December 2010. Total student loan debt per consumer for that period increased 3% to $9,558.
The report also addressed retail credit card balances, which increased markedly among low-risk borrowers, who hold just below 42% of these balances. High-risk borrowers make up 26%. During the period, retail card originations to sub-prime borrowers rose 4.7 percentage points to 31% of originations. Retail card limits grew nearly 6% in 2011, totaling $60 billion for newly originated cards. Retail card tradelines grew 4% over December 2010, adding 4.2 million new accounts. Delinquency rates and write-offs continued to decline, said the report.
COLUMBIA, S.C. (3/30/12)--Four South Carolina regional credit union chapters have selected candidates for the inaugural South Carolina Credit Union League (SCCUL) Palmetto Protégé Competition, which recognizes young professionals and the opportunities credit unions provide them.
These finalists will compete for the Palmetto Protégé position on April 20 during the 2012 SCCUL Annual Meeting in Myrtle Beach:
- Patricia Bivens, CPM FCU, North Charleston, representing the Charleston Area Chapter;
- James "Jay" Montgomery, SAFE FCU, Sumter, Columbia Chapter;
- Ernest "Dizzy" Felkel, SPC CU, Hartsville, Pee Dee Chapter; and
- Katie Matthews, Secured Advantage FCU, Simpsonville, Piedmont Chapter.
The Palmetto Protégé will serve as statewide leader of the league's Young Professional Initiative (YPI) and peer advocate for credit unions. Responsibilities coordinated by the league include:
- Presentations at five chapters on the protégé's background, experience, YPI, and the Palmetto Protégé program;
- Participation in the league's Leadership Conference as a secondary presenter and YPI advocate;
- Facilitator of YPI Roundtables through the remainder of the year; and
- Regular contributions via social media including the league's Facebook page.
The winner will get first choice of three development scholarships, with the remainder available to other state finalists. Scholarships are available for Southeast CUNA Management School, National Youth Involvement Board Annual Conference, and South Carolina Hike the Hill in Washington, D.C.
ALBURGH, Vt. (3/30/12)--The story of a Vermont credit union that saved a small town from losing its financial services provider has drawn media coverage from National Public Radio (NPR).
The article, published online, describes how NorthCountry FCU in South Burlington, Vt., stepped in to provide financial services to residents of the small town of Alburgh, Vt., after People's United Bank announced it was closing its branch in the town. The closure left the community with no financial services.
Community residents formed a Find a Bank Committee to recruit a financial institution to come to town.
NorthCountry FCU, based in South Burlington, Vt., "answered the call," the NPR article says.
When she learned people's bank was closing its Alburgh branch, Irene Clarke, one of the Find a Bank Committee's co-founders, realized the community's businesses would suffer without access to financial services.
Find A Bank committee co-founder Terry Tatro said NorthCountry's presence will help keep the town alive.
"If people have to go out of town to do their banking, they're going to do other services out of town also," Tatro told NPR. "Sooner or later, all you're going to have left is a bedroom community. We're close to that now, and we want to go the other way."
Having a local relationship with a financial institution matters to small businesses, according to a study by the National Federation of Independent Businesses, the article said.
Credit unions are trying to get their member business lending (MBL) cap raised so they can provide local businesses loans. Increasing the MBL cap to 27.5% of assets from 12.25% of assets would inject $13 billion in new funds into the economy, creating as many as 140,000 new jobs in the first year after enactment, estimates CUNA.
KAILUA-KONA, Hawaii (3/30/12)--Hawaii Community FCU in Kailua-Kona, Hawaii, notified its members of a data breach, impacting several hundred of its 40,000 members.
Employees of the $350 million asset credit union improperly accessed personal information of some members--including their names, addresses and last four digits of their Social Security numbers--in April 2011, said James Takamine, president/CEO (Associated Press and American City Business Journals March 28).
At this time there doesn't seem to be any risk of identity theft, Takamine said. The data breach affected less than 500 of the credit union's members, he added.
The breach happened nearly a year ago. The credit union delayed notification during an investigation by an independent attorney. Some employees involved in the incident were fired. Current employees must go through training that prohibits them from accessing members' private information, AP said.
Also, employees will be able to anonymously report suspicious activity of co-workers by using a new website, AP said.
MADISON, Wis. (3/30/12)--A new global ranking system for cooperatives, called the International Cooperative Alliance (ICA) World Cooperative Monitor, is being launched by ICA.
In 2012, ICA wants to re-launch the Global 300 report with better methodology to ensure greater accuracy and inclusiveness in its reporting, said Charles Gould, ICA director-general (2012intlsummit.coop March 28).
To accomplish that goal, ICA will partner with the European Research Institute on Cooperative and Social Enterprises to deliver more complete data. ICA first started ranking the top 300 cooperatives worldwide in 2005.
All cooperatives are being asked to fill out an application form to participate in the World Cooperative Monitor, Gould said. For more information, use the link to visit the project website.
Roughly one billion people in 96 countries belong to cooperatives, with credit unions constituting the second-largest segment. The cooperative banking/credit union segment constitutes 26% of cooperatives in the world, according to a recent WorldWatch Institute report.
Cooperatives around the world partnered in January to launch the 2012 International Year of Cooperatives (IYC). ICA is one of three hosts of the 2012 International Summit of Cooperatives, Oct. 8-11 in Quebec City, Canada.
Designated by the United Nations, IYC highlights the contributions cooperatives have made to help reduce poverty, create jobs and promote socio-economic development worldwide.
NEW YORK (3/30/12)--Credit unions have moved into the student loan market, offering borrowers a way to consolidate their private loan debt at lower rates, according to a Thursday CBSNews.com article.
While consumers have been able to consolidate federal college debt in the past, that has not be been the case with private college debt. That's because private lenders did not have a reason to offer loan consolidation at lower rates, when they could keep customers paying off loans at higher ones, CBS News said.
Because the average age of credit union members is 50, credit unions have ample incentive to attract younger members, Ken O'Connor, director of student advocacy at cu.StudentLoans.org, told the publication. The cuStudentLoans.org site is powered by Fynanz, a strategic alliance provider of CUNA Strategic Services.
Private consolidation loans for college at variable rates of 4.75%, 5.75% and 7.25% are being offered by credit unions, said the article.
Student loan debt was one of the top topics at the Senate appropriations subcommittee on financial services and general government hearing Wednesday (News Now March 28).
The hearing was the second in about a week to highlight student lending. Sen. Richard Durbin (D-Ill.), who heads the subcommittee, last spring introduced legislation that would treat privately issued student loans the same as other privately issued debt in bankruptcy proceedings in a bill, known as the Fairness for Struggling Students Act (S. 1102).
Also, combined national student loan debt hit the trillion dollar mark several months ago, and students borrowed $117 billion in federal student loans in 2011, Rohit Chopra, Consumer Financial Protection Bureau (CFPB) student loan ombudsman, noted earlier this month.
CFPB has asked credit unions and others in the student lending industry to provide information on the role of schools in the private student loan marketplace, and other issues for a study to be released this summer.
To read the CBS News article, use the link.
HARRISBURG (3/30/12)--Pennsylvanians increased their use of credit unions last year. In 2011, Pennsylvania's 526 credit unions grew in assets, loans, savings and members, according the Pennsylvania Credit Union Association (PCUA).
Assets grew by 6% to $36 billion. Membership increased by 2% to 3.7 million.
The increased growth is due in part to a greater awareness of credit unions brought on by consumer angst against increasing fees at commercial banks and other financial service providers, PCUA said.
Fourth quarter data collected by the National Credit Union Administration (NCUA), demonstrates that Pennsylvania credit unions grew from the prior in several areas, said PCUA. They grew:
- 6% in assets;
- 2% in loans;
- 6% in savings; and
- 2% in membership.
The national credit union statistics are just slightly below the Pennsylvania numbers, said PCUA. Nationally, credit unions grew by 5% in assets, 1% in loans, 5% in savings, and 2% in membership.
Roughly 7,234 U.S. credit unions serve 93 million members nationwide.
"Consumers continue to discover that credit unions offer lower fees and better service than other financial institutions. The continued fallout from Wall Street has led many consumers to seek out financial institutions operating within their communities," said PCUA President/CEO Jim McCormack. "With more than 500 credit unions operating in the commonwealth, there is truly a credit union for every Pennsylvanian."
MADISON, Wis. (3/30/12)--April is National Financial Literacy Month, providing credit unions with an opportunity to help their members understand that financial education is the first step toward financial independence.
The Credit Union National Association (CUNA) will sponsor its annual National Youth Saving Challenge during April. It is held in conjunction with National Credit Union Youth Week, also sponsored by CUNA. This year National Credit Union Youth Week will be held April 22-28, with the theme "Be a Credit Union Super Saver."
Last year nearly 146,000 young members deposited $28.5 million into their saving accounts during National Youth Savings Week---with 9,058 of these new accounts.
For National Credit Union Youth Week promotional materials, including free art work, use the link.
Among the ways credit unions and credit union-related organizations are encouraging their members to budget, save, manage credit, and pay down debt during April, include:
- The National Credit Union Foundation (NCUF) and the Texas Credit Union Foundation (TCUF) have developed "Credit Unions Support Financial Education: Leading the Way to Financial Freedom," a program to raise awareness of credit unions' financial education activities and the importance of financial education. The program is being piloted in California, Illinois, Louisiana, Nevada, New York, North Carolina, South Carolina and Texas by state credit union foundations in each state. To join the initiative, credit unions in participating states must commit to collecting pledges for supporting financial education and to holding a "Financially Fit Day" event April 4, to include fundraising among staff and members.
- CUNA Mutual Group will sponsor TCUF's April 4 "Financially Fit Day" event. TCUF will sponsor a dunking booth as its "Financially Fit Day" event.
- The California Financial Literacy Month blog featured a financial literacy program every day in March to help state credit unions gear up for April.
- TCUF is hosting its "Make the Difference," campaign to promote, celebrate and encourage financial education efforts among credit unions and their communities throughout Texas. The foundation will use the month-long event as the springboard to encourage all credit unions to begin or expand their efforts to provide financial and consumer education to their members, local schools, and communities. "Make The Difference" grants of up to $500 are available to spur these activities. These programs include credit union-based programs or local partnerships with groups such as Junior Achievement, Boys & Girls Clubs, YMCAs/YWCAs, churches and schools.
- The Michigan Credit Union League will pair credit unions with state lawmakers for youth financial education events during
its ninth annual Financial Literacy Legislative Challenge (Michigan Monitor March 5). Lawmakers will join with credit unions to host financial education events at schools, credit unions, or within their local communities. The challenge builds relationships between Michigan legislators and their constituents while providing students with financial skills.
Every month is financial literacy month at Liberty Savings FCU, which holds financial education seminars throughout the year. Karen Velasquez, marketing and business development officer, recently gave a lesson on credit to the business math class at the Kenmare Alternate High School for Women. Velasquez (center) is shown with the group of students and their teacher (far right). (Photo provided by the New Jersey Credit Union League)
- State CU, Columbia, S.C., is supporting Financial Literacy Month with a free webinar designed to help teachers, parents and grandparents raise financially savvy children. The webinar provides a road map for teaching fundamental financial skills that can be used throughout life. "Teaching Children about Money: Raise a Financially Savvy Child" will be offered four times in April.
- Liberty Savings FCU, Jersey City, N.J., celebrates financial literacy throughout the year, said the New Jersey Credit Union League. It holds free seminars on personal finance for local schools and organizations (The Daily Exchange March 23). Karen Velasquez, Liberty Savings FCU marketing and business development officer, recently gave a lesson on credit to the business math class at the Kenmare Alternate High School for Women.
NEW YORK (3/30/12)--Credit unions are a key beneficiary in the movements to use local government funds as "a battering ram against big banks," said The Wall Street Journal Online in an article Thursday.
The article, written by David Weidner and entitled, "It Takes a Village to Battle a Bank," outlines numerous community anti-big- bank efforts that have gained momentum since the start of the year among cities moving their money out of big banks for one reason or another.
It cites movements in Brockton, Mass.; Los Angeles; Kansas City, Mo.; and New York City that have resulted in resolutions, ordinances, and legislation; and it notes similar actions are underway in Austin, Texas; Boston; Chicago; Minneapolis; San Francisco; San Jose, Calif.; and Portland, Ore.
Some "dump your bank" actions have worked, said the Journal. It referred to estimates from the Move Your Money movement that roughly $59 million was moved from four big banks since mid-2011. Bank of America's deposit base 5% rose in 2011, but the bank experienced a $5 billion decline during fourth quarter at the height of the Occupy protests, it said.
"The biggest beneficiaries might be federally insured credit unions," said the article. "Credit unions added 1.3 million new member accounts and $41 billion in new deposits in 2011, according to the National Credit Union Administration," it added.
"The gains may not be entirely attributable to protesting customers, but it surprised the credit-union industry, which was expecting little if any such growth in 201. Whether account holders have continued to move away from big banks will become clearer next month when first-quarter earnings and deposit data are released," the article said.
The article also said the events mean that "big banks will take the little guys a little more seriously." For the complete article, use the link.
MADISON, Wis., and WASHINGTON (3/29/12)--Two webinars in April will highlight disaster assistance and feature CUNA Strategic Services provider Agility Recovery Solutions as a host.
The April 10 webinar, in partnership with the U.S. Small Business Administration (SBA), is scheduled for 2 p.m. to 3 p.m. ET. It will present "Five Things You May Not Know about SBA Disaster Assistance." The session will discuss the range and depth of SBA's disaster assistance programs and will focus on questions asked by the public and local media after a disaster.
It also will clarify SBA's partnership with the Federal Emergency Management Agency (FEMA) and discuss SBA's outreach to local financial institutions to expand the support network for business recovery after a disaster. Use the link for more information.
On April 11 from 2 p.m. to 3 p.m. ET, Agility will present "Business Continuity and Disaster Recovery Hot Topics: YOUR QUESTIONS ANSWERED," which will be driven by viewer/listener questions.
Agility is taking questions ahead of time and the most frequently asked questions or those broad in scope will be answered live during the webinar. All other questions will be answered off-line individually, said Agility. To submit questions use this link.
Both webinars are free. Use the links for more information.
QUEBEC (3/29/12)--A book outlining the philosophy of Alfonse Desjardins, the founder of the North American credit union movement, is being launched by Canada's Desjardins Group to mark the International Year of Cooperatives.
Entitled Alphonse Desjardins: le pouvoir d'agir, the book is the work of Monique F. Leroux, president/CEO of Desjardins Group, one of three co-hosts of the 2012 International Summit of Cooperatives.
Desjardins and his wife Dorimene founded the first caisse populaire (credit union) in Levis, Quebec, Canada, in 1900.
The book uses Desjardins' thoughts to show how the cooperative model remains relevant and how it can prove invaluable in addressing challenges in 2012.
Desjardins, who made his living as a writer and never earned a cent from starting the caisses, decided to design a cooperative financial system after hearing of a man who was ordered by the court to pay $5,000 in interest fees on an initial loan of $150.
He sought advice from all over the world about how to design a cooperative financial system suited to Quebec's needs and corresponded with several French, Belgian, Italian and Swiss heads of rural savings and credit cooperatives. He spent months poring over materials sent him, and he came up with the combined rules of European credit cooperatives with the experience of North American savings banks, Leroux' book reports
The book noted that at the dawn of the 20th century, Desjardins was well aware of the importance of international collaboration between cooperatives..
Desjardins is the namesake of the Credit Union National Association's annual Desjardins Youth and Adult Financial Education Awards.
MADISON, Wis. (3/29/12)--Listerhill CU in Muscle Shoals, Ala., was awarded the "Diamond Award Best of Show"--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 19th annual conference, March 7-10 in New Orleans.
Entered in the Complete Campaign category, the $541 million asset Listerhill CU looked to increase the number of new loans through a promotion that offered low rates and an immediate cash back incentive to those interested in refinancing. To achieve its goals, Listerhill employed a mix of media, including radio, billboards, newspaper ads, video, coffee sleeves and Facebook.
This year's awards competition received more than 1,100 entries. Judges awarded five entries as Best of Show, along with 87 Category's Best and 260 Diamond Awards.
Other Best of Show honorees included:
Color Award for Best Use of Art: Delta Community CU in Atlanta, Ga., for its entry in the Annual Reports category. The credit union showcased elements of its "Where Life Comes Together" marketing campaign in its annual report by using die-cut holes and integrating campaign images such as toy cars, doll-house figures and building blocks.
Best Use of Humor: America First CU in Riverdale, Utah, for its "Penny & Buck TV Ads" campaign. The credit union used fun, light-hearted TV ads featuring piggy bank characters named Penny & Buck discussing the benefits of membership instead of a more traditional spot using a spokesperson.
Cut Award for Most Edgy: Generations FCU in San Antonio for its youth logos. Generations conducted focus group research to determine what the youth market, the Millennials, looked for in a financial institution. The compass 'g' logo was created to speak directly to this group of members. The logo has been well received and has become recognizable to students and younger members.
Clarity Award for Most Sentimental: Alabama CU in Tuscaloosa, Ala., for its Community/Public Relations Program, "Secret Meals for Hungry Children." The program helps to discreetly feed hungry schoolchildren throughout Alabama with packets of food in their backpacks for the weekend. Alabama CU promotes and administers the Secret Meals program on a volunteer basis, with 100% of the donated funds going directly toward food purchases.
The Diamond Awards, representing credit union marketing and business development, 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.
A complete list of award winners is available at the link.
PEWAUKEE, Wis. (3/29/12)--The Wisconsin Credit Union League highlighted some of the differences between credit unions and banks, the effect of Bank Transfer Day (BTD), and savings realized by credit union members in a radio segment with Milwaukee area radio station WUWM.
The theme of the "Lake Effect" show was how credit unions have benefitted after many banks--most notably Bank of America--received heat from consumers for either raising fees or announcing intentions to increase fees for accountholders.
Show host Ed Makowski asked guest Christine Henzig, Wisconsin league director of communications, how credit unions keep money local.
"Credit unions keep money local by returning their earnings to their full membership and in terms of how they price financial services," Henzig replied.
In 2011, Wisconsin credit unions saved consumers $201 million through competitive rates, savings on loans, and lower and fewer fees, she added.
The fundamental difference between credit unions and banks is that credit unions are locally owned and run democratically by their members, who are owners, Henzig said.
Makowski asked Henzig about the results of BTD. "BTD was a great opportunity for credit unions to make consumers aware of savings they can get through membership at their financial institutions," Henzig said.
About 40,000 new members joined credit unions nationwide on BTD, she added. Also, 441,000 new members joined credit unions in the two months prior to BTD, according to Credit Union National Association estimates. "That represents 75% of all credit union member growth in all of 2010," Henzig said.
When asked if credit unions advertise the way banks do, Henzig replied that although credit unions do advertise in traditional ways, their best advertising comes through social media and word of mouth.
"Credit unions give members better rates and better treatment. People have been abuzz about that, and that's been the best form of advertising over the past couple of years," she concluded.
- LIVE OAK, Texas (3/29/12)--Low rates have helped boost lending at Live Oak, Texas-based Randolph-Brooks FCU (RBFCU), which exceeded the $3 billion milestone in total lending for the first time in its 60-year history. The $4.9 billion asset credit unions said it saw marked growth in all facets of lending, including mortgage loans, auto loans, small business loans and credit cards. "A low-rate environment can be very positive for consumers, as they have the opportunity to make needed purchases without unduly stretching their finances," said Mark Sekula, executive vice president and chief lending officer for RBFCU. "We're providing affordable solutions for our members, putting them into vehicles and homes they can afford. At the same time, their choice to take advantage of borrowing opportunities helps stimulate our South Central Texas economy," he added …
ALEXANDRIA, Va. (3/29/12)--Commonwealth One FCU member Marco Moore withdrew $40 from an ATM--and hit the jackpot. He won the $10,000 Big Money Madness grand prize in a sweepstakes presented by Allpoint Network and 7-Eleven stores. Moore initiated the at a surcharge-free withdrawal at an Allpoint Network ATM inside a 7-Eleven in Washington D.C. in December. He received his winnings last month at an in-store ceremony hosted by 7-Eleven and attended by Allpoint Network and Commonwealth One FCU representatives. Commonwealth One is based in Alexandria, Va., and has more than $297 million in assets. (Photo provided by Commonwealth One FCU) …
WEST ST. LOUIS COUNTY, Mo. (3/29/12)--Courtney Rejniak, left, of West County, Mo., who refinanced her car at Vantage CU during its Golden Opportunity loan campaign, was awarded four tickets to the St. Louis Cardinals home opener on April 13, plus a $250 Visa gift card to use while downtown and four green Cardinals ball caps. Financial Services Representative Tom Szelag, right, helped with the refinancing transaction. The promotion ended on St. Patrick's Day. Members Kimberly Mack, Dawn Osness, Jacqueline Yates, Kim Bruner, Emily Mark, Jenny Housewright and Donna Brown each won ball caps for answering trivia questions during the Golden Opportunity loan promotion, which ran eight weeks. (Photo provided by Vantage CU) …
MADISON, Wis. (3/29/12)--Roughly one billion people in 96 countries belong to cooperatives, with credit unions constituting the second-largest segment, according to a new report from Worldwatch Institute.
Also, 99% of cooperative businesses primarily operate within seven economic sectors (2012intlsummit.coop
Those sectors, including their annual revenue (in U.S. dollars) and percentage share of all cooperatives worldwide are:
- Agriculture/Forestry, $472 billion, 29%;
- Cooperative Banking/Credit Unions, $430 billion, 26%;
- Consumer/Retail, $354 billion, 22%;
- Insurance, $282 billion, 17%;
- Workers/Industrial, $35 billion, 2%;
- Utilities, $18 billion, 1%; and
The one billion members of cooperatives worldwide exceed the 893 million direct and indirect shareholders of corporations, the report noted. Also, 13.8% of the world's population is a member of at least one cooperative, compared with 5% who are direct shareholders.
Credit union branches comprise 23% of financial institutions worldwide and serve 870 million people, making credit unions the second-largest financial services network in the world, the report noted.
For a free copy of the report, contact Supria Kumar at email@example.com
DENVER (3/29/12)--The National Endowment for Financial Education (NEFE) and the Financial Planning Association (FPA) have partnered to create the Financial Four, a March Madness-like bracket of 32 concepts that helps consumers identify the financial areas that are most important to them.
Using rankings from more than 300 financial experts from FPA membership, NEFE and the FPA identified the primary topics that consumers can use to move toward financial independence.
"There aren't any upsets in this bracket," says Ted Beck, NEFE president/CEO. "It can be overwhelming to prioritize all of the things you need to accomplish to keep your financial life in order. The Financial Four is a fun way for people to visually rank and arrange their financial responsibilities."
The participating planners and advisers turned "bracketologists" ranked their priorities.
Based on their voting results, here is the 2012 Financial Four:
- Live within your means.
- Obtain adequate insurance.
- Build an emergency savings account.
- Establish life insurance for wage earner(s).
MADISON, Wis. (3/29/12)--FI-MOBILE received the CUNA Technology Council's Best of Show Award for innovation in mobile solutions for financial institutions.
The CUNA Technology Council (CTC) recognized FI-MOBILE with its Best of Show Award during the Credit Union National Association's (CUNA) 2012 Governmental Affairs Conference, in Washington, D.C. From left, Chris Chippindale, vice president of enterprise initiatives, Ent FCU, Colorado Springs, Colo.; Heather Moshier, CTC chairman and executive vice president of information technology, San Diego (Calif.) County CU; Chris O'Brien, regional sales manager, FI-MOBILE; Steve Maloney, founder, FI-MOBILE; Bill Cheney, CUNA president/CEO; and Jeff Johnson, CTC vice chairman and senior vice president of information technology, Baxter CU, Vernon Hills, Ill. (Photo provided by CUNA Technology Council).
The award was presented during the Credit Union National Association's (CUNA) 2012 Governmental Affairs Conference (GAC), March 18-22, in Washington, D.C.
FI-MOBILE develops the UniFi platform, which gives financial institutions the ability to unite all mobile-enabled content into a single, downloadable application.
"FI-MOBILE understands a financial institution's need to offer and compete with various mobile solutions," said Heather Moshier, council chair and executive vice president of information technology for San Diego County CU, in presenting the award. "CU FI-MOBILE can deliver mobile apps with an average time to market of 30-45 days."
"We're honored to be selected as this year's top technology offering by the CUNA Technology Council," said Steve Maloney, founder of the FI-MOBILE. "We've proven that any financial institution can deliver the best mobile banking experience to their customers and members quickly and easily."
Since 2001, the CUNA Technology Council has presented the Best of Show award to the exhibitor that demonstrates a commitment to delivering technology that will further the growth of products and services in the credit union marketplace. Vendors' products are evaluated according to affordability, the benefit to credit unions and their members, a commitment to open standards currently in use, and health of the company.
From left: Credit Union House Chairman Charles Elliott; Texas Credit Union League President/CEO Dick Ensweiler; Credit Union House Hall of Leaders inductee Harriet May, former president/CEO of GECU, El Paso, Texas; and Credit Union House Credit Union National Association President/CEO Bill Cheney.
Credit Union House LLC named its newest inductees to the 2012 Credit Union House Hall of Leaders at its annual meeting of members March 18.
Thirteen credit union leaders have been inducted for 2012.
The newest inductees, inducted at the meeting, are:
- Harriet May, former president/CEO GECU, El Paso, Texas. She is former chairman of the Texas Credit Union League and former chairman of the Credit Union National Association.
- Russ Plunkett, president, CEO of Postal CU in Woodbury, Minn.
- Oliver King, former manager/treasurer of Magnolia FCU, Jackson, Miss.
Scott Earl, president/CEO, Mountain West Credit Union Association, was inducted at a special event later.
Charles Elliott, left, chairman of Credit Union House and president/CEO of the Mississippi Credit Union Association, with Credit Union House Hall of Leaders inductee Oliver King, former manager/treasurer of Magnolia FCU, Jackson, Miss.
hey join nine others inducted earlier in the year:
- Audrey Bollinger, CEO of Peoples Advantage FCU, Petersburg, Va.;
- Landel Casey, former CEO of Guardian CU, Montgomery, Ala.;
- Tom Griffiths, former president/CEO, Iowa Credit Union League;
- Charles Grossklaus, former president/CEO of Royal CU, Eau Claire, Wis.;
- Lynn Kothe, president/CEO of North Memorial FCU, Robbinsdale, Minn.;
- Cyril Mann, chairman, Listerhill CU, Muscle Shoals, Ala.;
- John Prumo, president/CEO, GPO FCU, New Hartford, N.Y.;
- Diana Roberts, president/CEO of Hershey FCU, Hummelstown, Pa.; and
- William "Bill" F. Marquardt, posthumously, City County CU, Fort Lauderdale, Fla.
Russ Plunkett, center, president/CEO, Postal CU, Woodbury, Minn., was inducted into the Credit Union House Hall of Leaders. With him, from left: Credit Union House Chairman Charles Elliott and Minnesota Credit Union Network President/CEO Mark Cummins. (Photos provided by Credit Union House LLC)
"The Credit Union House Hall of Leaders was introduced to provide lasting recognition for credit union leaders whose commitment has made a significant impact on the credit union movement at the local, state, or national level," said Charles Elliott, chairman of Credit Union House LLC and president/CEO of the Mississippi Credit Union Association. "Being inducted to the Hall of Leaders is a high honor and has been an excellent way to acknowledge those who serve credit unions."
In its fifth year, the Hall of Leaders program has recognized 55 inductees from 27 states. Members of the Hall of Leaders have shown commitment that inspires others in the credit union movement.
Inductees include board chairmen, league presidents, credit union CEOs, league board members and volunteers.
Their names remind all who visit Credit Union House of the many individuals who have volunteered their time to perpetuate the credit union movement and who demonstrate commitment to the values and mission on which credit unions were founded.
NEW YORK and MADISON, Wis. (3/28/12)--Cyber thieves have used banking Trojans, such as the infamous Zeus, to compromise log-in credentials for credit unions to third-party electronic funds transfer systems, such as automated clearing houses and wire transfer systems, says a risk alert to bond policyholders of CUNA Mutual Group.
On March 19, CUNA Mutual sent the risk alert, saying the cyber thieves had transferred funds to accounts at other financial institutions, both foreign and domestic, and the losses have been significant, exceeding $1 million in one case, said a report in the New Jersey Credit Union League's newsletter, The Daily Exchange (March 20).
Access was gained at various access points, said the risk alert. In a few cases, the thieves circumvented the dual control requirement that requires a second employee to login to the ACH and/or wire transfer system to approve the transfer.
Among the suggestions made in the risk alert: use a dedicated computer to access third-party ACH and wire transfer systems, and prohibit it from being used for e-mail and Internet browsing. If a dedicated computer isn't possible, use a separate operating system and browser written to a USB flash drive and access the ACH or wire transfer system through the flash drive browser.
CUNA Mutual also suggested prohibiting telecommuters from accessing the ACH and/or wire transfer system using their home computers.
In another security development, several banking Trojans have developed a new type of attack specifically designed to postpone discovery as long as possible, said Trusteer, a security company in PCMagazine (Jan. 4). After the theft, the Trojan manipulates the victim's view of online transactions, hiding the fraudulent activity. Those who haven't gone paperless eventually receive evidence in their mailed statement, but by hiding online evidence the criminals buy more time to siphon off more funds or complete their theft.
Normally a banking Trojan like Zeus or SpyEye will insinuate itself into a victim's browser and take control of the online banking experience using a "man in the browser" attack. Some directly capture the login credentials, some display a false warning page asking the user to enter personal information, and others divert real transactions to criminal payees. By the time the victim notices, it's too late.
FARMERS BRANCH, Texas (3/28/12)--The Texas Credit Union League (TCUL) has selected 12 up-and-coming young credit union professionals to serve on its new initiative--the Texas 12.
The Texas 12 will help catalyze change in the system and spark positive growth in the community, TCUL said (LoneStar Leaguer
The Texas 12 is an incubator to bring the brightest young minds in Texas credit unions together based on three goals: incite positive change for the future, break down barriers to collaboration, and bring new perspective to the credit union system.
"Young professionals have a great deal to offer our movement, so it's important that we tap into their knowledge and provide them an outlet for getting more engaged in our movement, as well as offer them hands-on opportunities to help shape the future of credit unions," said Dick Ensweiler, TCUL president/CEO.
The individuals chosen for the Texas 12 are:
- Shelby Ames, Liberty (Texas) County Teachers FCU;
- Kelsey Balcaitis, A+ FCU, Austin;
- Doug Bedner, Resource One CU, Dallas;
- Victoria Cline, Neighborhood CU, Dallas;
- Brittany Doering, Family 1st of Texas FCU, Fort Worth;
- Kate Donovan, Texoma Community CU, Wichita Falls;
- Chad Holz, University FCU, Austin;Lori Martinez, Houston Fire Fighters FCU;
- Jana Mearns, People's Trust FCU, Houston;
- Casey Moehring, Kelly Community FCU, Tyler;
- Nikki Moore, Space City CU, Houston; and
- Jamaal Dwayne Robinson, New Mt. Zion Baptist Church CU, Dallas.
The first activity for the Texas 12 will be to "crash" TCUL's Annual Meeting & Expo, April 18-20 in Galveston.
BURTON, Mich. (3/28/12)--A Burton, Mich.-based credit union is one of the financial institutions that received an alert from a Visa processor indicating the debit or credit cards of 450 members had been compromised in a data breach at an unnamed retailer's processing network.
ELGA CU'sstaff immediately blocked the cards as a precaution and spent the weekend contacting members, explaining why the credit union was blocking the compromised cards and arranging for new cards to be reissued (mlive.com March 26).
As a result of the phone calls, the credit union identified thousands of dollars in fraudulent activity on members' cards. Frank Wilber, the executive vice president of the credit union, told mlive.com that once illegal activity was confirmed, the credit union would cover the members' loss.
The credit union estimated the breach has cost it between $14,000 and $15,000, Wilber told WNEM.com (March 27).
Most of the 450 members identified as "possibly compromised" by the Visa alert live in Genesee County. The credit union serves members in six counties.
Wilber told the newspaper that it is a difficult situation for a financial institution and its members. After it blocked all the compromised cards, the credit union got a call from a woman on her honeymoon in Las Vegas who needed to use her card. The credit union unblocked her card but monitored it all weekend until she returned home.
CHEYENNE, Wyo. (3/28/12)--The pending closure of a grocery store in Wellington, Colo., is prompting Warren FCU to search for a new site for its in-store credit union branch that will be gone when the store shutters.
Wellington's Main Street Market is slated to close its doors May 18. Warren FCU already has purchased land in Fort Collins, Colo., with intentions of building a stand-alone branch there, but no timeline has been established for its opening (coloradoan.com March 26).
Although the credit union would love to open by May 19, due diligence requirements will likely take a while longer, Michael Nagl, Warren FCU's vice president for the Colorado market, told the newspaper.
More information about the Fort Collins branch should be available later this week, Nagle added.
The $400 million asset Cheyenne, Wyo.-based credit union has five other branches in Cheyenne and one in Laramie, Wyo.
REDMOND, Wash. (3/28/12)--Botnets using Zeus malware to steal from online banking accounts suffered a lightning bolt hit after Microsoft and a coalition of financial industry players took coordinated, global, legal and technical actions last week to disrupt key Zeus botnet command and control servers responsible for the theft of hundreds of millions of dollars.
The action, against the worst known cybercrime operations, was carried out by Microsoft, the Financial Services--Information Sharing and Analysis Center (FS-ISAC) and NACHA, The Electronic Payments Association, with assistance from Kyrus Tech Inc. and F-secure, said the coalition in a press release Sunday.
Microsoft, FS-ISAC and NACHA filed a civil lawsuit in the U.S. District Court for the Eastern District of New York against 39 John Does and sought to conduct a coordinated seizure of command and control servers running some of the worst known Zeus botnets.
On Friday, escorted by U.S. Marshalls, Microsoft and the co-plaintiffs seized command and control servicers in two hosting locations--BurstNet of Scranton, Pa., and Continuum Data Centers, Lombard, Ill. (USA Today
March 26). They seized and preserved data and virtual evidence from the botnets for the court case and took down two Internet Protocol addresses behind the Zeus command and control structure.
Microsoft is currently monitoring 800 domains secured in the operation, which are helping identify thousands of computers infected by Zeus.
The action is good news for credit unions and other financial institutions plagued with having to reissue debit and credit cards after data breaches by cybercriminal groups, but the problem is far from over. The actions taken last week caused major disruptions but the Zeus botnets are notorious for their complexity and adaptability, and for staying a step ahead of law enforcement. The key value of the actions taken is the information that the actions were able to gather about the criminal operations.
The coalition's action "disrupted a critical source of money-making for digital fraudsters and cyberthieves, while gaining important information to help identify those responsible and better protect victims," said Richard Boscovich, senior attorney for the Microsoft Digital Crimes Unit.
Once a computer is infected with Zeus, the malware can monitor the victim's online activity and automatically start keylogging (recording every keystroke) when a victim types in the name of a financial institution or e-commerce site. The criminals then steal personal information for identity theft, to make fraudulent purchases or to access other private accounts.
Since 2007, Microsoft has detected more than 13 million suspected infections of the Zeus malware worldwide, including three million computers in the U.S. More than $100 million has been stolen in the U.S. the past five years (IDG-News-Service
March 26). Microsoft's lawsuit identifies 39 John Does, who use 65 online aliases. (PCWorld.com
March 25). Many are identified only by nickname in the suit.
This is the second time Microsoft has conducted physical seizures in a botnet operation, and the first time other organizations have joined as plaintiffs in a legal case on a botnet operation.
It also is the first operation for Microsoft that involved simultaneous disruption of multiple operating botnets in a single action and the first known time it has applied the Racketeer Influenced and Corrupt Organizations (RICO) Act in a consolidated civil case to charge the botnet users.
Unlike Microsoft's previous botnet seizures, the goal of this action was not to permanently shut down all impacted botnets, but to gather intelligence and to undermine the criminal infrastructure that relies on the botnets to make money. It also will provide new tools to fight the cybercrimes, said the coalition's press release.
The group also made these recommendations to computer users:
- Use safe practices such as running up-to-date and legitimate computer software, firewall protection and antivirus or antimalware protection.
- Use caution in surfing the Web and clicking on ads or e-mail attachments that may be malicious.
- Use free information and malware leaning tools if the computer is suspected to have a malware infection.(See the malware cleaning tools link.)
For businesses looking for information about corporate account takeovers, including those due to malicious software, use the link to a fraud advisory from FS-ISAC, the Federal Bureau of Investigation and the U.S. Secret Service.
WASHINGTON (3/28/12)--Robberies and related crimes decreased during third quarter 2011 to 1,094 violations of the Federal Bank Robbery and Incidental Crimes Statue, from the 1,325 reported for the same quarter of 2010, according to the Federal Bureau of Investigation (FBI).
There were 1,081 robberies, 11 burglaries, two larcenies, and one extortion of a financial institution reported between July 1 and Sept. 30, said FBI's Bank Crime Statistics report released Tuesday.
Of the 1,081 total robberies, 94 were committed at credit unions. Commercial banks experienced 959, savings and loan associations 26, and mutual saving banks two. Credit unions also saw two burglaries in the period.
Highlights of the report include:
- Loot, totaling more than $9.3 million, was taken in 89% of the incidents.
- Of the loot taken, 25%, or more than $1.9 million, was recovered and returned to financial institutions.
- Bank crimes most frequently occurred on Friday. Regardless of the day, the time frame when bank crimes occurred most frequently was between 9 a.m. and 11 a.m.
- Acts of violence were committed in 5% of the incidents, resulting in 18 injuries, three deaths, and four persons taken hostage.
- Demand notes were the most common method of operation used.
- Most violations occurred in the Western region of the U.S., with 381 reported incidents. The fewest occurred in the Northeast region with 171 reported incidents.
The statistics were recorded as of Oct. 28. Not all bank crimes are reported to the FBI, which means the report is not a complete statistical compilation of all financial institution crimes that occurred in the U.S.
To read the full FBI report, use the link.
NORWALK, Conn. (3/28/12)--One out of five consumers don't know where to turn when shopping for a mortgage, according to a recent survey by FreeScore.com.
When asked, "If you were apply for a home loan, which type of institution do you trust the most?" more than 20% of respondents selected "none of the above" when asked to choose among a credit union, bank or mortgage broker.
"This sentiment could reflect the negative public opinion that still remains following the well-publicized housing and credit market collapse, and the subsequent spate of defaults and foreclosures that have been plaguing consumers," FreeScore.com said in a press release.
This could also be an example of collateral damage--credit unions didn't cause the housing crisis but they have been affected by it in consumer perceptions.
And while credit unions are making many mortgage loans, and have received positive media coverage for their member service, they still have hurdles to clear when consumers consider where to shop for their mortgages.
In applying for a home loan, about 30% of respondents said they would trust a credit union most, while about 33% of respondents said they would trust a bank.
In December 2006, credit unions had originated 1,454,340 mortgage loans for a total of $164 billion, according to Credit Union National Association Research & Statistics Department. In December 2011, credit unions had originated 1,824,471 mortgages for a total of $236 billion.
Mortgage bankers and government-sponsored enterprises (GSEs) such as Fannie Mae were least trusted by consumers, with about 8% of consumers saying they trust mortgage brokers and about 7% trusting GSEs.
MADISON, Wis. (3/28/12)--Credit unions in New Jersey are implementing the final phase of a collaborative project that provides internship opportunities for people with disabilities.
Through the Building Economic Strength Together (BEST) program, New Jersey credit unions are providing internships for people with disabilities. A group of interns, credit union representatives, and program partners met at a recent luncheon at the New Jersey Credit Union League office to discuss their experiences. (Photo provided by the National Credit Union Foundation)
The last cycle of Building Economic Strength Together (BEST) is underway after its pilot debuted two years ago.
The BEST program was developed by a strategic partnership among the National Credit Union Foundation (NCUF) through its REAL Solutions program, the New Jersey Credit Union League and the New Jersey Credit Union Foundation, 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, with funding provided by the Kessler Foundation.
The BEST program provides internships to persons with disabilities in New Jersey credit unions with the goal of creating permanent employment opportunities while developing best practices for credit unions to serve these families.
"These interns have been very productive in the credit unions they are working in," said Paul Gentile, league president/CEO. "Some have even gone on to full-time positions and could very well become our credit union leaders of the future. It's been equally rewarding to see our credit unions learn how to better serve this underserved segment of America. I hope it can be emulated in other parts of the country."
During the two-year program, 44 New Jersey credit unions hosted 54 interns during seven cycles. While credit unions were under no obligation to hire the interns at the conclusion of the six-week training period, several interns are working either full-time or part-time at the credit unions.
- ALBANY, N.Y. (3/28/12)--National Credit Union Administration (NCUA) Board member Michael Fryzel will address attendees June 8 at the Credit Union Association of New York's (CUANY) annual convention, which will be held June 7-10 in Lake George, N.Y. "Since he joined NCUA's board, he has proposed and passed the Corporate Stabilization Plan, addressed liquidity problems facing credit unions and promoted the Credit Union Homeowner Affordability Relief and System Investment Programs," said William J. Mellin, president/CEO of CUANY. Fryzel was appointed by President George W. Bush to the board on Nov. 30, 2007 and took office on July 29, 2008. His term expires Aug. 2, 2013 …
- WILMINGTON, Del. (3/28/12)--Ronald Tate, 42, of Middletown, Del., was sentenced to two years in prison on charges related to filing fraudulent mortgage applications and cashing six loan checks totaling more than $240,000 from credit unions around the nation (The Daily Times March 26). Tate pleaded guilty in June to one count each of mail fraud and wire fraud. He allegedly submitted a fraudulent mortgage application to fund the purchase of a home valued at nearly $1 million in North Wilmington. The application allegedly included false information about his employment and income and a false verification of funds on deposit. Tate allegedly cashed the checks from the credit unions between May and September 2009. The checks were loans to be used to fund the purchase of a car. However, the money went elsewhere and no payments were made on the loans …
- DUBLIN, Ohio (3/28/12)--Ohio Healthcare FCU (OHCFCU) is reaching out to current and potential members throughout Ohio with its new full-service online branch, WebCU. WebCU provides 24/7 access to healthcare professionals who can open accounts online, manage money and communicate with credit union staff. Money management services include remote depositing, account to account transfers, account alerts, bill pay, automatic transfers and mobile banking. The credit union is also cross-promoting upcoming events in the Ohio healthcare community in its "Community" area. "We hope our members will turn to us for more than just financial services," said Bill Butler, CEO of OHCFUC. "WebCU is intended to be the portal for a wealth of healthcare community-related information," he added …
- DALLAS (3/28/12)-Dallas-based Neighborhood CU celebrated reaching the $300 million assets milestone during its 82nd Annual Meeting Thursday. "While other financial institutions are struggling to stay afloat, the active participation by 30,000 North Texans has allowed our credit union to flourish and remain relevant," said Gerald Townsend, chairman of Neighborhood CU's board. He noted the milestone is the result of proactive change and the addition of new products and services--such as Kasasa, a free checking account that gives members extra money every month and MPower, an auto loan service--to meet the changing demands of members. The products have a strong financial education focus, he said. Neighborhood CU also announced it will open a new branch in Grand Prairie in the fall; is redeveloping its technology platform to include mobile apps for iPhone, Android and iPad; and will serve as "The Official Bank of Six Flags Over Texas" this year …
MADISON, Wis. (3/27/12)--Communities across the nation continue to recognize credit unions as the best of the best in a variety of areas.
On March 8, News Now
featured a story on credit unions nabbing "best workplace" awards and said it might be a trend. Here's more proof, with credit unions recognized as best in a number of categories, ranging from "best for families" to "healthiest employer" to "best bank"--and more.
There are many ways to recognize credit unions, but all of these have something in common: credit unions are recognized for the service they provide: to employees, to members, to their communities.
A case in point: In Herndon, Va., Northwest FCU (NWFCU) and NWFCU Foundation were honored as the Best Financial Institution at the Vienna Tysons Regional Chamber of Commerce annual Youth and Education luncheon. The annual event recognizes local Vienna, Va., schools with students participating in special exhibitions. This year, more than 190 students attended.
At the luncheon, banks and credit unions competed against each other, marketing their products and services to students and encouraging students to open an account using play money. After visiting with each institution, students "voted" by opening an account with what they believed to be the best financial institution. They also evaluated each institution on products and services. NWFCU and its foundation swept all three categories and were voted Best Service, Best Product and Best Overall Financial Institution.
Other credit unions that have seen recent accolades from their communities:
- In Dallas, Credit Union of Texas was named the "Best for Families" winner in the financial institutions category by Dallas Child magazine because of the perks it has offered children under 12, as well as older students and their families, including a prepaid credit card to help teens spend wisely. It also offers Kids Savings Accounts & Dollar Dog Kids Club, and student checking accounts, the credit union told the Texas Credit Union League (LoneStar Leaguer Feb. 13).
- Pelican State CU, Baton Rouge, La., was named "Medium Business of the Year" by the Livingston Parish Chamber of Commerce for providing leadership and excellence in making the parish a better place to live and work, said the Louisiana Credit Union League (eNews Feb. 15). Credit union representatives attend all the chamber's membership meetings and fundraisers, and attend ribbon cuttings to welcome new business owners into the community. It sponsors the Antique Merchants Association and has volunteered in numerous community events, awards scholarships, and hosts a FREE Kids Bike Race for children under 12.
- Arizona State CU, Phoenix, was awarded the "Valley's Healthiest Employer" award for its workplace wellness program by the Phoenix Business Journal. The credit union's wellness program, begun in 2007, includes onsite treadmills, relaxation centers and yoga classes; offers gym reimbursements and weight loss incentives in a partnership with Weight Watchers. It has more than 200 participants. It also has associate health screenings, which have encouraged behavioral change and saved the credit union more than $325,000 in claims in 2010. The credit union was also ranked No. 1 credit union in Arizona by Ranking Arizona: The Best of Arizona Business, published annually by Arizona Business Magazine.
- In Madison, Wis., UW CU was named one of Madison Magazine's 2012 Best Places to Work. The award is presented once every two years, UW CU also received the last award, in 2010. The award is based on six areas of engagement: trust, management, development, rewards, connection and life-work balance, and on organizations' environmental sustainability and diversity efforts. The survey is based on an employee engagement framework developed by Next Generation Consulting, a Madison research and consulting firm.
- Freedom CU, based in Warminster, Pa., was named "Best Bank" in both Montgomeryville-Lansdale and in Abington in local community polls conducted by the Montgomeryville-Lansdale Patch and the Abington Patch. The unscientific polls asked readers to pick a favorite among the financial institutions in each area. In Montgomeryville-Lansdale, Freedom CU received 52% of the overall vote with 228 votes, while in Abington, it received 59% of the votes.
- Consumers CU, a $560 million asset, Waukegan, Ill.-based credit union was recipient of the 2012 Diversity Award for local businesses from the Village of Mundelein, Ill., for its outstanding community outreach program. Each year the award is presented by the Mundelein Human Relations Committee in three categories: individuals, organizations and businesses that demonstrate strong efforts to promote, create programs and advocate for cultural awareness.
- Rogue CU, Medford, Ore., ranked No. 14 in the large employers' category of the 100 Best Companies to Work For in Oregon, presented by Oregon Business Magazine. Roughly 263 companies participated in the survey, which analyzes Oregon companies' best practices for creating great places to work. More than 14,000 Oregon employees completed the survey.
- Chemcel FCU, an $88 million asset credit union in Bishop, Texas, was voted Best of the Best Reader's Choice 2011 in the Corpus Christi Caller Times. The Best of the Best is the top honor, according to the Texas Credit Union League (LoneStar Leaguer Feb. 2).
- For the 14th time in 15 years, Vacaville, Calif.-based Travis CU was the winner of the Fairfield Daily Republic's "Readers Choice Award 2011." It was voted Best Credit Union in Solano County and Best Mortgage Lender in Solano County. Each day, Travis surveys its members who make transactions at their branches or by phone. On a scale of one to 10, with 10 as the highest score, the average overall servicing rating the credit union received from members last year was 9.70.
- Workers' CU, Fitchburg, Mass, was presented the Business Partner of the Year Award by Shriver Job Corps for ongoing participation in its work-based learning program. The credit union's information technology department has provided four-week internships to students during the past four years. Job Corps is a free education and training program that helps eligible youth at least 16 learn a career, earn a high school diploma or GED, and find and keep a good job (Worcester Telegram & Gazette March 24).
- PORTLAND, Maine (3/27/12)--Maine's credit unions have launched their second search for an individual to represent Generation Y (ages 18-25) as the spokesperson for their Young & Free Maine program, said the Maine Credit Union League. The "spokester" will connect with young people using social media networks, local events and more while developing entertaining educational content, tips and tools to help Gen Yers manage their day-to-day lives and finances. The program's first spokester, Seth Poplaski, will complete his one-year term in June. Applications for the position will be accepted until noon (ET) April 20. To enter, applicants must submit a 60-second YouTube video and write a blog post that demonstrates writing, editing and creative skills. The videos and blog posts will be posted at www.YoungFreeMaine.com. The public will vote on three finalists online May 4-17. The new spokester will be announced by May 30 …
- PHOENIX (3/27/12)--Arizona State FCU has accepted 167 applications for the Home Affordable Refinance Program (HARP) to help underwater owners obtain more affordable mortgages. Homeowners who are current on their Fannie Mae mortgage but have been unable to obtain traditional refinances because their homes declined in value may be eligible for HARP, said the credit union. "If members can benefit from a lower mortgage payment, then we, as a local financial cooperative, need to meet this need," said David E. Doss, president/CEO of the $1.3 billion asset credit union, noting that it "can help Arizona residents rebound from economically challenging times." HARP has been extended by the Federal Housing Finance Agency to help homeowners take advantage of historically low interest rates …
- ST. PETERSBURG and TAMPA, Fla. (3/27/12)--GTE FCU has partnered with Suncoast Electric Vehicles, Florida's first all-electric car and truck dealer, to give away one Wheego LiFe, an all-electric car capable of driving 100 miles on a single charge. Members who close on a GTE FCU home loan through Aug. 31 will be automatically entered to win the car as the grand prize. Four finalists will be selected from all participants in September. One will drive home the car, which retails for $32,995, at GTE's member appreciation event, Memberfest, in October, in Tampa …
NEW YORK (3/27/12)--Despite warnings that cybercriminals are using more sophisticated methods to hack data from financial institutions and other companies, 97% of the cyberattacks that occurred in 2011 used relatively simple methods to commit their data breaches, according to a study released Thursday by Verizon.
Of the 855 data breaches compromising 174 million records during 2011, more than 79% were attacks of opportunity. "Target selection is based more on opportunity than on choice. Most victims fell prey because they were found to possess an (often easily) exploitable weakness rather than because they were pre-identified for attack," said Verizon's 2012 Data Breach Investigations Report.
2011 experienced the second-highest data loss since Verizon began keeping track in 2004. The annual report was compiled with help from law enforcement agencies in five countries--including the U.S. Secret Service.
Outsiders still dominated the data breaches, with 98% of breaches stemming from external agents such as organized criminal groups bent on making money. But the single most important change was the rise of "hacktivism" against larger organizations worldwide, said the report. 2011 was a year of activism on many fronts, including data breaches.
"Activist groups created their fair share of misery and mayhem last year as well--and they stole more data than any other group," said the report's executive summary. Fifty-eight percent of all data theft was tied to activist groups.
Only 4% of breaches were tied to internal employees.
How did the breaches occur? Roughly 81% used some form of basic hacking; 69% incorporated malicious software or malware; 10% involved physical attacks; 7% employed social tactics; and 5% resulted from privilege misuse.
The report noted that it was fairly easy to hack into most victims' programs; the sophisticated element of the hacks came later in the actual theft of the data, once the hackers were in. Then they often installed malware to acquire privileges, set up backdoors, enable remote control and seek sensitive data, while staying hidden on the network and covering their tracks.
Other commonalities that were found to exist:
- 94% of all data compromised involved servers;
- 85% of breaches took weeks or more to discover;
- 92% of the incidents were discovered by a third party;
- 97% of breaches were avoidable with simple or intermediate controls; and
- 96% of victims subject to Payment Card Industry Data Security Standards had not achieved compliance with the standards.
More than half the data breaches hacked the accommodations or food services industry, followed by 20% in retail trade. Finance and insurance accounted for 10% of the attacks, a significant decrease from the 22% that industry recorded in 2010.
However, when looking at the groups represented by the percent of breaches for larger organizations with 1,000 or more employees, the report gave a different picture--one of interest to credit unions. Finance and insurance account for the most records breached--28%--at larger institutions. The study also noted that large organizations have different data breach experiences than smaller ones, with more complex issues.
An analysis of the types of data stolen indicated that payment card numbers/data and authentication credentials such as user names and passwords, account for the highest percentages stolen, 48% and 42%, respectively for all organizations, and 33% and 35% for larger organizations.
All other types of data are less than 4% each, including bank account numbers/data at 2% for all organizations and 10% for large organizations.
The report emphasized taking care of shoring up the basic security measures to prevent hackers from access in the first place. If they can't get in, they can't do the damage, the report indicated.
DES MOINES, Iowa (3/27/12)--The Iowa Credit Union Foundation announced it received a $20,000 contribution from Affiliates Management Co. (AMC), the holding company of the Iowa Credit Union League, in honor of Warren Morrow, the late CEO and founder of Coopera. Coopera is part of AMC's family of operating companies.
"Warren had a tremendous impact on all of us and the credit union industry," said Patrick S. Jury, CEO, AMC and Iowa Credit Union League. "Beyond Coopera, the company he founded and led, one of the most significant legacies he left us is undoubtedly in the Iowa Credit Union Foundation (ICUF)."
Morrow was instrumental in ICUF's ability to obtain a $428,323 grant that provided matching funds to launch Iowa's first Credit Union Individual Development Account program and created ICUF's first executive director position five years ago, said Jury. In addition, Warren's wife Christina Fernandez-Morrow serves as an ICUF board member.
"The foundation would not be where it is today without Warren's talents and vision," said Marybeth Foster, ICUF executive director. "Warren dedicated his life to helping the underserved, and this very generous gift from ICUL and AMC will be used to keep his spirit alive through the foundation and our efforts to improve the financial lives of Iowans in need. The gift is an overwhelming and fitting tribute to Warren. We are all better people for having worked with and known him."
A native of Mexico, Morrow dedicated his life to helping the underserved Hispanic community achieve financial stability in Iowa and throughout the U.S. In 1999, he and his Grinnell College classmates founded the Latino Leadership Project to help Latino high school students in Des Moines strive and reach higher education.
Later, he transitioned the organization to Partners in Economic Progress. After co-founding Diverse Innovative Solutions, he started Coopera with the Iowa Credit Union League in 2006 to help credit unions grow their Hispanic market presence and create more banked families within Latino communities nationwide. Morrow passed away unexpectedly Feb 15. He is survived by his wife and 7-year-old daughter Ariana.
"Warren touched many lives and believed deeply in helping Hispanics receive dignified financial services," said Murray Williams, Coopera's interim CEO. "It was through his passion that Coopera was started, and his drive made Coopera the well-respected, successful entity it is today. The Coopera team is committed to carrying Warren's vision for the company forward and will continue to provide service to the credit union movement in his honor."
The Credit Union National Association has an exclusive, national partnership with Des Moines, Iowa-based Coopera to help credit unions reach out to Hispanics.
PONTIAC, Mich. (3/27/12)--Kensington Valley Community CU, Highland, Mich., was the site of a movie scene in a film produced by a local company.
Affinity Group CU was approached by Bright Horizon Pictures to film a scene of the feature film "Christmas Grace" in the branch lobby of Kensington Community CU (Observer and Eccentric News March 26).
Filming took place March 10.
Kensington Community CU is a brand of the Pontiac, Mich.-based Affinity Group CU.
Credit union employees were available as extras and the drive-thru remained open during the filming.
"Christmas Grace" tells the story of two rival toy store owners competing for business during several Christmas seasons. It is scheduled for release at the end of the year.
Bright Horizon Pictures is a non-profit Christian film company.
MADISON, Wis. (3/27/12)--Credit Union Magazine
is asking the credit union movement to help recognize four credit union leaders nominated by readers as "CU Heroes."
Their accomplishments have been published in the magazine, which is published by the Credit Union National Association (CUNA). Now it's time to select the 2012 CU Hero of the Year.
The candidates are:
- Rudy Hanley, president/CEO, SchoolsFirst FCU, Santa Ana, Calif. His political involvement, work ethic, and integrity have benefited his own credit union and the credit union movement overall. Hanley took the helm of SchoolsFirst Federal in 1982. The credit union's charter has expanded over the years to serve public and private school employees in 10 Southern California counties.
- Ron Kase, CEO, Landmark CU, New Berlin, Wis. One of Kase's proudest accomplishments is leading his credit union through remarkable growth, including the creation of 450 jobs in southeastern Wisconsin. During his 38 years leading Landmark, the credit union has grown from four employees, $2 million in assets, and 2,500 members in 1973, to its current 450 employees, $1.6 billion in assets, and 165,000 members.
- Frank Matous Sr. (posthumous), former CEO of Tandem FCU, Warren, Mich. A credit union pioneer, he encouraged his four sons to stay active in the credit union movement. Matous and five other Chrysler workers each deposited $10 to form Dodge Truck Forge and Amplex FCU in 1941. Today, the credit union—renamed Tandem Federal in the late 1950s--has 3,137 members and $20 million in assets.
- Joe Robertson, retired president/CEO, Our Community CU, Shelton, Wash. His credit union garnered a record $18 million increase in total deposits for 2009 (doubling the previous year's increase), during the slow recovery from the recession. Robertson's retirement comes on the heels of a 35-year career in the credit union movement--all of it at Our Community. He also served on the CUNA board of directors.
To vote, use the link. Voting will take place through April 30. This year's winner will be honored at CUNA's America's Credit Union Conference in San Diego, June 17-20.
| Permanent link
BALTIMORE (3/27/12)--Several credit unions' mergers in Maryland have sparked local bankers to say that the mergers are creating a competitive advantage for credit unions.
SECU of Maryland, the state's second-largest credit union with $2.2 billion assets, recently announced it was merging with $82.4 million Anne Arundel County Employees FCU (Baltimore Business Journal March 25).
Rod Staatz, CEO of SECU, said he is open to more mergers if they would be a good cultural fit for his credit union.
In 2011, there were five mergers among Maryland credit unions. In 2010, there was one.
Baltimore's MECU, the state's third largest credit union with $1.1 billion in assets, merged with Lever United Community CU in 2006, one year after it merged with White Eagle CU.
Dorothy Stierhoff, a spokesperson for the MECU, told the Baltimore Business Journal the credit union would consider more mergers if the right opportunity presented itself.
If credit unions want to expand beyond their original charters, they should not be allowed to maintain their tax status and should convert to banks, said Kathleen Murphy, CEO of the Maryland Bankers Association in the article.
Compliance demands and a weak lending market are forcing smaller credit unions to seek merger partners, said Kip Weissman, a Washington, D.C. lawyer who represents credit unions.
Some smaller credit unions also are unable to offer their members the menu of products and services that larger financial institutions offer, said Johan Worth, chief economist with the National Credit Union Administration (NCUA). That was among the reasons Arundel CEO Rick Stoll cited for his credit union's merger with SECU.
Credit unions also have been hit with assessments to shore up the NCUA's credit union insurance fund. Credit unions faced $3.3 billion in assessments in the last three years, Worth said.
Assessments were among the reasons why United Maryland Employees FCU, Owings Mills, Md., merged with Destinations CU, Parkville, Md., said Roxanne Miller United Maryland's former CEO. United Maryland also lost one of its primary sponsor groups with the closing of the Solo Cup manufacturing plant.
To read the full article, use the link.
WASHINGTON (3/27/12)--Immediate financial concerns such as job uncertainty and debt are causing more Americans' confidence in their ability to afford a comfortable retirement to stagnate at historically low levels, according to a new report. This could impact how credit unions help members plan for retirement.
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The most pressing issue facing workers and retirees is job uncertainty, said the 22nd annual Retirement Confidence Survey (RCS).
"Americans' retirement confidence has plateaued at the lowest levels we've seen in two decades of conducting this survey," said Jack VenDerhei, research director for the Employee Benefit Research Institute (EBRI) and co-author of the report.
Among the major finding in this year's RCS:
Confidence is stagnant: Only 14% of workers are very confident they will have enough money to live comfortably in retirement--which is statistically equivalent to the survey low of 13% measured in 2011 and 2009.
Employment insecurity looms large: Of the survey respondents, 42% identify job uncertainty as the most pressing issue facing Americans.
Concern about health costs: Worker confidence about having sufficient money to pay for medical expenses and long-term care expenses in retirement remains significantly below their confidence levels for paying basic expenses.
Little savings: Many workers report they essentially have no savings and investments. About 60% of workers report the total value of their household's savings and investments--excluding the value of their primary home and any defined benefit plans, is less than $25,000.
Workers' expected retirement age: About 25% of workers in the survey say the age at which they expect to retire has changed in the past year. In 1991, 11% of workers said they expected to retire after age 65. By 2012, that percentage has grown to 37%.
Retirees' experience: Regardless of retirement age expectations, half of current retirees surveyed said they left the work force unexpectedly because of health problems, disability or changes at their employer--such as downsizing or closure.
Reliance on Social Security: Retirees report they are more reliant on Social Security as a major source of their retirement income than current workers expect to be.
Expected versus actual pension income: Although 56% of workers and/or their spouses expect to receive benefits from a defined plan in retirement, only 33% report that they and/or their spouse have such a benefit with a current or previous employer.
Not calculating retirement needs: More than half of workers (56%) report they and/or their spouse have not tried to calculate how much money they will need to live comfortably in retirement.
Online technology: Only a minority of workers and retirees feel very comfortable using online technologies to perform tasks related to financial management. Relatively few use mobile devices such as smart phones or tablet computers to manage their finances. Only 10% of workers who use online technology say they are very comfortable obtaining advice from financial professionals online.
RIVERSIDE, Calif. (3/27/12)--Altura CU is re-staffing a branch that it closed last year as part of a company-wide reduction in operating expenses, the Riverside, Calif.-based credit union announced Monday.
It will re-staff its Murrieta branch location, effective April 18. It had converted the branch to ATM-only on May 11, 2011.
"With the slow, yet steady improvement in the Inland Empire economy, and in Altura's financial performance, we are now able to return our Murrieta location to a full-service branch for our members," said Mark Hawkins, CEO of Altura CU.
After several years of financial losses tied to the collapse of the local economy, Altura reported net income of $8.43 million at the end of 2011, the third consecutive period of strong net income, and Altura's best since 2006.
"In 2010 and 2011, we implemented a series of cost-cutting measures to reduce our day-to-day operating expenses," said Hawkins. "Among these was the difficult decision to convert the Murrieta branch to an ATM-only branch with no on-site staff support. At the time, we reaffirmed our commitment to southern Riverside County, and that is why we maintained an ATM at the location."
The branch will be staffed with eight positions, three of which are internal transfers or promotions. One person is a rehire, and four staffers are new hires.
- PITTSBURGH (3/26/12)--Heinz-Del Monte FCU, a $29 million asset credit union based in Pittsburgh , has reported that information related to six member cardholder accounts was stolen and used for fraudulent Internet purchases, according to the Pennsylvania Credit Union Association (Life is a Highway March 23). The credit union said the inquiry for balance information was conducted within the U.S. Once the fraudsters obtained the account balances, they initiated fraudulent purchases in Istanbul and Spain, said the article. The credit union blocked the accounts for the Istanbul purchases and is expecting a $1,100 loss from some purchases …
- PORTLAND, Maine (3/26/12)--Maine CUs announced that Rob Burnell , 19, of Readfield, Maine, is the winner of the Young & Free Maine's Sound Off Competition. The competition drew 60 entries and 10,621 votes. Burnell was revealed as the competition's winner at Main Street Studios, Bangor, on March 19. He received a $1,000 gift certificate from the studios for a recording session of his choice and the opportunity to perform live at the 2012 KahBang festival Aug. 9-12. He is featured on YoungFreeMaine.com, said the Maine Credit Union League (Weekly Update March 23) …
- JACKSONVILLE, Fla. (3/26/12)--Community First CU, based in Jacksonville, Fla., has committed to a three-year exclusive naming rights sponsorship of the Hale & Hearty 7K, an event produced by the Health Planning Council of Northeast Florida to showcase the benefits of happy, healthy places in the region. The inaugural Community First CU Hale & Hearty 7K will be held June 2 at Riverside Arts Market. The naming rights benefits include a co-branded event logo, featured placement in all collateral materials, the opportunity to welcome the runners and to have a booth before and during the race, and sponsorship of the run's text messaging campaign, which will send runners coupons at each mile marker from local merchants. The credit union will feature the partnership in its member materials and marketing collateral as well …
LOUISVILLE, Ky. (3/26/12)--Several Kentucky credit unions have raised money to help victims of tornadoes that struck the state and several other states during the first weekend in March.
Thirteen tornadoes touched down in Kentucky, killing at least 12 people, according to weather.com. Eight credit unions in the Midwest and the South sustained some form of damages--mostly minor--during that weekend's tornadoes (News Now
At least 39 people were killed in five of the states hit by 74 tornadoes. The deaths were in Kentucky, Indiana, Ohio, Alabama and Georgia (USA Today
The Kentucky Credit Union league and attendees of its Lending Conference earlier this month contributed $5,000 to the American Red Cross to help tornado victims in the state, said the league (By The Way
Other Kentucky credit unions that provided financial assistance to state tornado victims include:
- L&N FCU, Louisville, which held a relief effort among its employees and members, raising more than $10,000. Also, 4,000 pounds of food was donated.
- Kentucky Telco FCU, Louisville, which contributed $1,000 to the American Red Cross after the credit union sponsored a dress-down week and put in $10 for each participating employee. Credit union members also were encouraged to donate.
- Autotruck Financial CU, Louisville, donated $500 to the American Red Cross during a local telethon. The credit union also served as a collection point and sponsor for a local technical college's efforts to collect items for those in need in two area counties.
- Chemco FCU, Louisville, donated $300 and is collecting items for children's Easter baskets.
- Fort Knox FCU, Radcliff, Ky., offered its members 30-day, 0% annual percentage rate loans to pay for tornado-related expenses.
U.S. Rep. Scott Garrett (R-N.J.), left, meets with small-business leaders at a meeting held Friday at Greater Alliance FCU in Paramus, N.J. (Photo provided by the New Jersey Credit Union League)
PARAMUS, N.J. (3/26/12)--U.S. Rep. Scott Garrett (R-N.J.) met with small-business leaders Friday at Greater Alliance FCU in Paramus, N.J. to learn about issues facing small businesses.
Patrick McGrath, Greater Alliance president/CEO, welcomed Garret. Small-business leaders attending said they are concerned about access to credit and about growing regulatory burdens (The Daily Exchange
Paul Gentile, president/CEO of the New Jersey Credit Union League, told Garret and the group raising the member business lending cap (MBL) would accentuate the issues small businesses face in getting access to credit.
"Congressman Garrett is well aware that raising the MBL cap would open up $13 billion in capital for small businesses and create more than 100,000 jobs," Gentile said. "New Jersey's credit unions want to help small businesses like those in the room today grow their business. Raising the MBL cap will help do that."
The Credit Union National Association (CUNA) and credit unions are asking 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.
WASHINGTON (3/26/12)--No one does more for middle-income Americans than credit unions, U.S. Rep. Shelley Berkley (D-Nev.) told members of the Global Women's Leadership Network, a World Council of Credit Unions initiative devoted to connecting women credit union leaders worldwide.
U.S. Rep. Shelley Berkley (D-Nev.) addresses members and supporters during the 2012 Global Women's Leadership Network breakfast Wednesday during the Credit Union National Association's Governmental Affairs Conference last week in Washington, D.C.
Berkley addressed the network as part of the group's annual breakfast meeting, sponsored by CU*Answers and held at the National Museum of Women in the Arts on Wednesday during the Credit Union National Association's (CUNA) Governmental Affairs Conference last week in Washington, D.C.
The breakfast was attended by more than 100 members and supporters. The three breakfast speakers represent leaders from inside and outside the industry and all share a mutual dedication to the global credit union movement.
Berkley, who has been involved with credit unions since the 1970s and has supported credit union legislation throughout her career, thanked credit unions for providing critical services in her home district and across the country in neighborhoods and communities ignored by other financial service providers. Berkley specifically cited credit union loans to small and women-owned businesses and college loans as vital contributions to economic growth.
"Credit unions are making it possible for thousands and thousands of students to go to college," said Berkley, who urged attendees to continue blazing a trail of increased member service around the country.
U.S. Ambassador to Kenya Elkanah Odembo discusses what is currently happening in Kenya's credit unions Wednesday during the Credit Union National Association's Governmental Affairs Conference last week in Washington, D.C. (Photos provided by the World Council of Credit Unions)
Elkanah Odembo, U.S. ambassador to Kenya, also addressed the network and provided insight into changes current among Kenya's credit unions. Kenya's Savings and Credit Cooperatives (SACCOs), as credit unions are called there, are a young, male-dominated movement with less than 40 years of development experience. Because of recent legislative changes, one-third of the management and governance positions in Kenya's SACCOs will be filled by women in the upcoming months.
"Women are the backbone of our development," Odembo explained, "Over the next five years, the role of women will be very significant in transforming our economy."
Roxy Ostrem, board chair of Ventura (Calif.) County CU, also spoke to the network about how her credit union is reaching out to agricultural workers in Ventura County. To reach this group, credit union staff visit employees at their workplaces to conduct credit union business, a step Ostrem said is critical for the credit union to take.
"Many of these workers are of modest means and they have to pay for a ride to work, to get home and to the grocery store to cash their paycheck, which the grocery store then charges $35 to do," Ostrem said. "By going out in the fields, we're saving these members money and we are teaching financial literacy."
The Global Women's Leadership Network is planning an engagement program in May to Ostrem's credit union so other credit unions can learn how to start similar programs. "Get involved if you can," Ostrem said. "We can help the people in our neighborhood, state and across the country."
The network connects credit union women with fellow leaders in other credit union movements all over the world and engages them in professional and personal development through social media and educational forums. It also offers international perspectives on common worldwide challenges--such as growth strategies, alternative capital and operational efficiencies.
For more information, use the links.
PLANO, Texas (3/26/12)--Credit unions likely won't see any immediate impact soon on loan demand, even though the Labor Department reports new claims for unemployment benefits totaled 348,000 for the week ending March 17, says Brian Turner of Catalyst Strategic Solutions.
Downward trends in unemployment and benefit claims are positive signs for alleviating what is putting a damper on consumer spending and economic growth, noted Turner in the Texas Credit Union League newsletter, LoneStar Leaguer (March 23). Catalyst is an arm of Catalyst Corporate FCU.
Upward trends lately have helped increase consumer confidence, but that is not enough to entice most people to open their wallets, Turner said. Consumer spending continues to be on a 1.4% annualized pace, far from the 2.6% pace at the same time a year ago. Retail sales are at a 6/5% pace, down from 7.5% annual pace this time last year.
If the nation can continue to experience stability in benefit applications, credit unions could potentially see loan demand turn around sooner than most anticipate, Turner said. Until that time, however, "we can expect a few more vehicle loan applications to come in and certainly a steady flow of mortgage refi applications," he concluded.
LOS ANGELES (3/26/12)--In one of two filings Wednesday in a federal court in Los Angeles on separate court cases involving the National Credit Union Administration's (NCUA) attempt to recoup losses from mortgage backed securities sold to corporate credit unions, NCUA argued that a particular court case preserves NCUA's federal securities claim in the case.
In NCUA's lawsuit against RBS Securities Inc. before the U.S. District Court of the Central District of California, Western Division, NCUA filed a proposed order arguing that another court case, American Pipe Construction Co. v. Utah, impacts the statute of repose considerations on 29 certificates at issue in the suit. NCUA said American Pipe tolling preserves certain federal claims from the three-year statute of repose.
U.S. District Judge George WU, in a previous ruling that partly dismissed NCUA's case, had granted NCUA the leave to amend, or the ability to provide more information. His ruling had indicated that unless tolled by the virtue of American Pipe, all of NCUA's federal claims would be dismissed with prejudice because they are barred by a three-year federal statute of repose. An extender statute did not apply to the federal claims, he said. The ruling did not affect NCUA's state securities law claims.
Because the court has not yet ruled on the extent of the American Pipe tolling and its impact on certain certificates, NCUA is proposing an order that would direct the parties to meet and confer after the court's ruling and to file a joint list of any timely claims.
LOS ANGELES (3/21/12)--The National Credit Union Administration (NCUA) has told a federal court in Los Angeles that Goldman, Sachs & Co.--which the agency has sued for losses related to the sale of residential mortgage backed securities involved in the collapse of several corporate credit unions--is refusing to honor a tolling agreement it made with NCUA.
The tolling agreement was to forestall litigation and prevent the statute of limitations or statute of repose from running out while the parties in the lawsuit negotiated, said NCUA in a supplemental memorandum filed Wednesday in the U.S. District Court for the Central District of California, Western Division.
"It is undisputed that Goldman willingly entered the agreement in order to forestall ligitation," said NCUA's memorandum . "In doing so, Goldman expressly promised not to assert any statutes of repose or limitation in defense. This court should reject Goldman's refusal to honor its express contractual promise. Even looking past Goldman's misconduct, the law plainly permits tolling agreements to apply to statutes of repose," the document said.
NCUA said the agreement was made on Aug. 30, 2010 and broadly covered "[a]ny statute of limitations, statute of repose, or other time-related defense." The agency noted in the court document that Kansas law provides a statute of limitations of two years and a statute of repose of five years and that NCUA and Goldman entered the tolling agreement before the statute of repose expired. (Kansas is where U.S. Central FCU, one of the corporates that collapsed, was domiciled).
Goldman Sachs and NCUA met on March 20 to confer. They filed a stipulation that would have extended the time for NCUA to file until this past Friday and would have provided for Goldman to file simultaneously. The tolling agreement, plus three extensions of that agreement provided a tolling period of more than nine months--beginning Aug. 19, 2010, and ending May 31, 2011, the memorandum said.
NCUA filed its MBS complaint on Aug. 9, 2011, about five years and five months after its March 3, 2006 purchase of one of the certificates at issue, a First Franklin certificate, making that claim timely after excluding the nine months tolled under the tolling agreement, the memorandum said.
"Almost immediately after this litigation commenced, Goldman reneged on its express, voluntary agreement by asserting that '[s]tatutes of repose cannot be tolled by a private tolling agreement.'"
Goldman and other banks are seeking dismissal of NCUA's claims by arguing that the statute of limitations and statute of repose have expired for many of the certificates at issue.
LAS VEGAS (3/26/12)--Mortgage originations at U.S. credit unions have exceeded 6.5%, slowly but steadily gaining market share, according to the American Credit Union Mortgage Assocation (ACUMA).
"Our current percentage is the highest level since we began tracking this data dating to the early 1990s," said ACUMA Board Chairman Bob McKay, chief operating officer at Baxter CU, Vernon Hills, Ill. The percentage is based on dollar volume.
Among the reasons credit unions are gaining share now are, said ACUMA:
- CUs have consistent underwriting standards and maintain a high level of trust with their member/owners.
- Members are finally realizing their credit union offers mortgage products and are a better alternative than banks.
- Consumers are more aware of credit unions through more media coverage. "Interest in credit union home loan lending has been on the rise for the last several years," said McKay. "Recent media attention and social media events like Bank Transfer Day brought even further attention to the great story taking place day for American families with credit unions," he added.
Most credit unions truly care about their communities, and consumers know the people they are dealing with through both good times and bad, said ACUMA. "This simple concept had been overlooked in the minds of many homeowners during the crazy lending markets of a decade ago, but making a strong comeback today as homeowners, particularly younger borrowers, are more sensible and do more homework prior to selecting a lender," said the organization.
ITASCA, Ill. (3/23/12)--About 81% of office employees have access to paper documents containing sensitive workplace information, and nearly a quarter of employees leave sensitive paper documents on top of their desks, says a study released Thursday.
Sixty-two percent say their company has a data security policy on which employees are trained. What this means is that some untrained employees may leave their companies vulnerable to a security breach, said Fellowes' Workplace Data Security Report.
Office employees may unwittingly contribute to digital or paper-based security breaches by practicing other risky behaviors, said Fellowes. For example, of those employees surveyed:
- Twenty-six percent leave their computers unlocked when away from their desk;
- Fifteen percent throw paper documents containing sensitive information into the trash;
- Sixty percent maintain a security firewall; andLess than half (44%) ensure their mail is safe by sending it through a secure mailbox.
"Whether electronic or in paper form, confidential information In the workplace is a hot item for theft and the methods employed by criminals to obtain this information are constantly evolving," said John Sileo, national identity theft expert and CEO of The Sileo Group. "Data protection can be simple as long as the proper procedures are in place and widely practiced," he said.
Credit unions, which extensive security policies should make sure all their employees know the policy. They also can pass Sileo's advice along to members with small businesses, as well as make sure they companies they work with train employees about identity theft so that account information at risk at a small business.
- Lock the office when leaving for the day to prevent unauthorized access after hours;
- Ensure the computer is locked with a secure password with a unique combination of letters and numbers;
- Ask the information technology department to check that the computer's firewall is secure and up-to-date;
- Avoid leaving paper documents on the desk or in common printing areas, and store important documents in a locked filing cabinet; and
- Shred documents that are no longer needed.
Fellowes is an Ithasca, Ill.-based company that sells office equipment, including shredders and record storage solutions. About 1,000 full-time office workers completed the online survey conducted by Toluna Research. Respondents were drawn from a national online panel maintained by Toluna.
HOUSTON, Texas (3/23/12)--A federal judge in Houston has dismissed a lawsuit filed by five credit unions and a bank against key parties in the Heartland Payment Systems' data breach.
The ruling was filed March 14 by U.S. District Judge Lee H. Rosenthal in the U.S. District Court for the Southern District of Texas, Houston division. The financial institutions involved are Lone Star National Bank, Sea Board FCU in Bucksport, Maine; O Bee CU in Tumwater, Wash.; PBC CU, West Palm Beach, Fla.; and Pennsylvania State Employees CU, Harrisburg.
In an earlier decision the judge had ruled that the financial institutions were not protected as "third-party beneficiaries" in contracts between Heartland and its two acquiring banks, KeyBank and Heartland Bank, but allowed the financial institutions to amend their complaint, which had stemmed from the exposure of their cardholders' information when cyberthieves hacked Heartland's system in 2008. The breach was announced in early 2009.
The amended complaint, against KeyBank, alleged breach of contract, breach of fiduciary duty and negligence. Rosenthal granted the bank's motion to dismiss the case "with prejudice," noting that the financial institutions' negligence and related vicarious liability, and breach of contract claims are the same as previously dismissed.
In dismissing the breach of contract claim, the judge wrote that the contract between Heartland and KeyBank did not state an intent to benefit anyone other than the contracting parties. "The contract is clearly intended to benefit only the contracting parties…The financial institution plaintiffs may indirectly benefit from the contract between KeyBank and Heartland, but that benefit is incidental," Rosenthal said.
On the breach of fiduciary duty claim, the credit union plaintiffs had asserted that they and KeyBank were joint venturers through their common membership in the Visa and MasterCard networks, and should share losses. However, the judge found that "nowhere do they allege that issuers and acquirers generally have agreed to share all losses suffered by the networks as a whole." He said joint ventureship means sharing both profits and losses, which the plaintiffs had not alleged.
More than 560 financial institutions, including at least 178 credit unions, had to reissue credit and debit cards as a result of the breach at Heartland. Consumers and financial institutions sued Heartland to recoup their losses, and the suits were so many that they were split into two camps: a consumer track and the financial institutions track. Heartland reached several settlements last year with Visa and MasterCard and Discover, which also had sued on behalf of their financial institution clients.
In addition to the decision dismissing the financial institutions track case, the judge ruled Monday on the consumer track case. In it, he approved settlement in the case, with the exception of providing incentive awards to plaintiffs. The settlement awarded more than $606,192 in attorneys' fees, and awarded costs in the amount of $35,000, according to court documents.
SEAL BEACH, Calif. (3/23/12)--Patelcorp, a division of $3.61 billion asset Patelco CU in Pleasanton, Calif., will offer its InvestDaily mutual fund investing program to members who have Health Savings Accounts (HSAs).
Patelcorp will work with SaveDaily Inc., a provider of low-cost mutual fund investing platforms used by financial institutions. The addition to InvestDaily, which is built on the SaveDaily platform, adds to the organization's offerings of affordable self-directed mutual fund investing (PR Newswire March 21).
"Our members are looking for better ways to save and grow their money," said Patelco Vice President Mark Hoaglin. "With the high cost of healthcare today, members who have HSAs understand how important it is to make their money work for them, and this is a great way to earn a higher return versus the rates offered on traditional HSA savings accounts."
HSAs were created by a federal law aimed at helping Medicare recipients pay for their prescription drug coverage. Any adult with a high-deductible health insurance plan is eligible to create an HSA and can make tax-deductible contributions to the savings plan throughout their plan year, according to the U.S. Department of the Treasury. This is a fast-growing segment of the financial services industry, with estimated balances in excess of $12 billion being held in health savings accounts in the U.S., said SaveDaily.
"Health Savings Accounts are a perfect fit for our mutual fund investing platform," said Gregory Vacca, SaveDaily president. "Just like an individual retirement account or 401(k), which we also offer, the HSA provides another tax-favored vehicle that daily savers can use to earmark money for future needs. Ideally, these funds will grow at a better rate than traditional checking, savings, and certificates of deposit, which provide only minimal returns."
Credit unions, banks and other financial service providers adopting the platform can offer mutual fund investing to their members/customers at low-cost under their own brand. For one low flat monthly charge, investors in mutual funds can have unlimited positions and unlimited transactions without transaction fees.
BROCKTON, Mass. (3/23/12)--The board of directors at Brockton, Mass.-based HarborOne CU Wednesday unanimously voted to pursue converting the credit union's charter to a mutual cooperative bank.
The next step is to gain the approval of state and federal regulators , then set a date to have have its 155,000 members vote on the conversion proposal (Banker & Tradesman March 22).
As required under law, HarborOne will prepare an information packet explaining the conversion and send it to the National Credit Union Administration and then to the credit union's membership. Information must be sent to members three times: 90 days, 60 days, and 30 days before the date of the membership vote.
When the $1.9 billion asset HarborOne announced in February it was considering the move, it said that converting to a bank would provide it with more flexibility to expand its customer base; increase lending authority, especially in business lending; and provide access to additional capital such as through sale of stock, which isn't available to credit unions.
The Credit Union National Association and the Massachusetts Credit Union League have stated that they believe a credit union charter is the best option for members of a credit union and that any decision on converting should ultimately be in the members' interest (News Now Feb. 17).
ATLANTA (3/23/12)--Georgia residents are moving their money to credit unions at a rising pace, with membership growing statewide by 3.3% in 2011, one percentage point higher than the 2.3% growth credit unions experienced in 2010.
State consumers are taking advantage of lower fees and better interest rates on services from new- and used-car loans, to savings and checking accounts, according to the semi-annual Member Benefits Index study released Thursday by the Georgia Credit Union Affiliates (GCUA). Total assets at credit unions statewide increased 6.5% during the year (PR Newswire March 22).
The report also indicated that Georgia credit unions last year provided nearly $114.2 million in direct financial benefits to the state's 1.8 million-plus members. Those benefits--better interest rates and fewer and lower fees--average $62 per member or $118 per member household, said GCUA.
The savings have attracted new credit union members in record numbers. More than 24,700 Georgians joined credit unions in the fourth quarter.
"Although the economy has begun to show steady improvement, Georgians remain cautious and continue to seek financially prudent alternatives that help them afford life," said Mike Mercer, GCUA president/CEO and newly elected Credit Union National Association board chair.
On average, fees at credit unions are $5 less than banks for checking accounts, $15 less than banks for credit card late fees and $29 less than banks for mortgage and closing costs.
Also, interest rates for many loans are lower at credit unions than other financial institutions. For example, financing a new $25,000 automobile for 60 months through a Georgia credit union will save members an average of $175 per year in interest expenses, compared to costs at a bank, GCUA said.
The report, compiled by Datatrac, a rate survey firm, uses information from the state's 149 credit unions, and also banking institutions.
HARRISBURG, Pa. (3/23/12)--Joe Wambach, executive director of the Pennsylvania Credit Union Foundation, discussed recovery efforts from the Susquehanna River Basin flooding that occurred last fall in Athens, Pa., when he visited John Savelli, CEO of Guthrie FCU in Sayre, and Michael Viselli, CEO of Ingersoll-Rand FCU in Athens.
From left, Joe Wambach of the Pennsylvania Credit Union Foundation meets with Kathy Kilhefner, flood victim and employee of Guthrie FCU, Sayre; John Savelli, CEO of Guthrie FCU; and John Seaver, Guthrie director of lending, to assess the progress of flood relief efforts. (Photo provided by the Pennsylvania Credit Union Association)
Wambach spoke with Kathy Kilhefner, a Guthrie FCU employee, who not only had to sell her destroyed home, but also lost her husband from a heart attack shortly after the flood, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway
Wambach also spoke with Chuck Paul, a member of Ingersoll-Rand FCU, and said he was encouraged by the progress that Paul and many others had made.
"Clearly the warm weather between December 2011 and March 2012 has had a positive effect on the ability of credit union employees and members to rebuild in Athens," Wambach said.
Kilhefner expressed thanks for a $1,500 contribution from the foundation, which has helped her find an apartment and begin the long road to recovery. Paul has nearly completed work on his home and praised the foundation for providing him with $1,500, which gave him a head start before funds became available from his insurance company.
"These situations are undoubtedly being played out among many of the other 239 victims who received grants from the Pennsylvania Credit Union Foundation," said Jim McCormack, PCUA president/CEO. "This is all the more reason why it is so important that credit unions and friends continue to support those who are victims of both natural and financial disasters through the foundation."
In total, $195,000 was distributed to flood victims through the foundation in September and October.
ALBANY, N.Y. (3/23/12)--The Credit Union Association of New York has launched a new Facebook page dedicated to its annual convention.
The page will feature exclusive 2012 convention updates, stories, past convention photos, contests and giveaways.
The association has also launched a Twitter account, offering followers agenda highlights, updates, special contest announcements and more. The association will be tweeting exclusively about convention from through June.
"By taking advantage of social media channels, we can give our credit unions even more opportunities to experience the convention and stay connected," said William J. Mellin, the association's president/CEO.
"Inspiration Awaits" is the theme for this year's Annual Convention and Meeting, which will run from June 7 to 10.
- CHATSWORTH, Calif. (3/23/12)--Autoland Inc., a credit union car buying service, has created a Charitable Grant Program to assist local communities by funding charities supported by its partner credit unions. The Chatsworth, Calif.-based company said credit unions wishing to have a charity considered for a grant should apply, with details on the charity's mission and goals, the specific program or projects the grant would support, and how the project would benefit the local community. Each quarter throughout 2012, Autoland will select a different charity to receive a $1,500-$2,000 grant. Charities may also apply and list the credit unions that support their organization. The deadline for the first grant is March 30. Funds will be awarded in mid-April. To be eligible, the charity must be a non-profit 501 (c)(3) charity located in California, Oregon, Washington or Nevada …
EAST WINDSOR, N.J. (3/23/12)--McGraw-Hill FCU hosted the VOICE Foundation's fifth annual Casino Night on March 9 in Princeton, N.J. More than 150 attendees participated in a Texas Hold 'Em Poker Tournament , black jack, craps and roulette to help raise $33,470 for local charities, including National Junior Tennis and Learning of Trenton and the Children's Miracle Network Hospitals. The VOICE Foundation, the credit union's charitable arm, stands for volunteerism, outreach, involvement, community and education. In the photo, McGraw-Hill FCU President/CEO Shawn Gilfedder (third from right) joins credit union employees during a trophy presentation at the event. (Photo provided by McGraw-Hill FCU) …
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- SAN ANTONIO (3/23/12)--San Antonio Spurs forward/center Tiago Splitter (second
row, center) brought La Mariposa by Francisco Jimenez to life at the San Antonio Botanical Gardens, reading in Spanish to fourth-grade students from the Bonham Academy in San Antonio. The class won the grand prize in the High Five Readers Challenge, presented each year by $2.9 billion asset SACU and Magic 105.3. SACU, the "Official Credit Union of the San Antonio Spurs," has been involved with High Five Readers Challenge for 10 years. The challenge is extended to all elementary schools in Bexar County to help students in first through fifth grade exercise their minds and imaginations by spending more free time reading. This year 169 classes participated, involving 1,566 students from 13 school districts, six charter schools and 18 private schools. The challenge is part of the National Basketball Association's Read to Achieve Program. (Photo provided by SACU) …
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- WARMINSTER, Pa. (3/22/12)--Freedom CU, a $500 million asset credit union based in Warminster, Pa., welcomed 158 new members from Crestmont Baptist FCU, which merged into Freedom on March 15. Crestmont Baptist had about $70,000 in shares and $19,000 in loan balances and served the congregation of First Baptist Church of Crestmont, located in Willow Grove, Pa. Freedom said the new members will have access to more products and services through Freedom's Abington branch, which features a full-service lobby with interactive kids activity area and a Mac-equipped Technology Center …
- ATHENS, Ga. (3/22/12)--First Reliance FCU, an $11 million asset credit union based in Athens, Ga., has received approval from the National Credit Union Administration to expand its field of membership to include anyone who lives, works, worships, or attends school in Madison, Oconee and Oglethorp counties (OnlineAthens March 17). The credit union has served members in Clarke County since 1971. It has roughly 2,300 members …
RALEIGH, N.C. (3/22/12)--State Employees' CU (SECU) of Raleigh, N.C., is showing what good underwriting on mortgage loans can do: it has had no mortgage loan "handbacks" from government-sponsored enterprises (GSEs), and says less than 1% of its mortgages ever need force-placed insurance.
The $24 billion asset SECU has received no mortgages handed back from Fannie Mae and Freddie Mac due to poor underwriting in the past 10 years. That "gives new meaning to the phrase 'zero tolerance' in mortgage underwriting for the secondary market," it added.
SECU consistently uses "stellar underwriting practices and has historically originated and serviced all loans--in effect, 'eating its own cooking,'" the credit union said. It began offering first mortgage loans to members in 1953. Today it services more than 125,000 mortgages in the state with balances totaling more than $12 billion. Its charge-off rate is 0.25%, even in the fourth year of a recession in a state with more than 10% unemployment.
"SECU's low mortgage delinquency ratios have always been the best gauge for our organization to confirm the high quality underwriting by our financial services officers," said Spencer Scarboro, senior vice president of loan originations at SECU. Its 60-day ratio is 2.04%.
The credit union noted that it sold fixed-rate loans on the secondary market to Fannie and Freddie, but a change in risk-based delivery pricing by the GSEs prompted it to discontinue those loans and go with 15- and 20-year portfolio fixed rates, and its adjustable rate mortgages.
Force-placed insurance will be subject to new rules issued by the Consumer Financial Protection Bureau in the coming year. SEC said not only does it have less than 1% of mortgages requiring the insurance, but also only 0.60% of its mortgages require force-placed insurance for more than 60 days.
"These low percentages are the direct product of several practices at SEC, including mandatory escrow requirements, with interest earned by the member on the escrow account; direct contact with members upon initial coverage cancellation, and its ongoing Mortgage Assistance Program," said SECU.
SECU agrees with CFPB's need to propose a regulation that would prevent servicers from charging for force-placed insurance products unless there is a "reasonable basis to believe that borrowers have failed to maintain their own insurance." The credit union works with members to avoid needing force-placed insurance. Its loan servicing staff track insurance through escrow system and contact the member if there's an insurance cancellation. Members get notification two to four weeks before the cancellation date so there is time to pursue a resolution.
When the cancellation date is reach, the member has another opportunity to resolve the issue before placing force-placed coverage, with SECU staff reaching out to provide quotes for traditional insurance. The average traditional insurance cost for members is 43.5 cents per $100, compared with a force-placed premium of 85 cents per $100. The industry cost for force-placed insurance can be up to 10 times the cost for traditional insurance, said SECU.
"The ultimate goal for us as a financial cooperative is to avoid any lender-placed insurance and help members budget for the annual cost of homeowners insurance through a required escrow account," said Mark Coburn, senior vice president of loan servicing at SECU. "With SECU paying interest on these escrowed funds, the budgeting process is a win-win for members. SECU will never utilize lender-placed insurance as an initial reaction to a member's insurance cancellation dilemma--it's just not the right thing to do," he added.
FARMERS BRANCH, Texas (3/22/12)--The Texas Credit Union League (TCUL) has awarded five Texas credit unions the Juntos Avanzamos designation, which signifies a credit union has a long-term vision and commitment to serving the needs of the Hispanic market.
The designation also alerts the Hispanic community that it can receive friendly, affordable financial services at these "capacity to serve" or "Juntos Avanzamos" institutions (LoneStar Leaguer March 21).
The five credit unions who received the designation are Caprock FCU, Lamesa; Coastal Community FCU, Galveston; One Source FCU, El Paso; River City FCU, San Antonio; and Security Service FCU, San Antonio.
"Access to affordable financial services is essential to achieving financial stability," said Gary Williams, chair of the TCUL International Relations Committee. "These recently designated Juntos Avanzamos credit unions have demonstrated that they have the infrastructure in place to effectively serve the unbanked and underserved Hispanics in their respective communities."
Texas is home to the second largest Hispanic population in the U.S. Hispanics represent a significant unbanked/underserved population and pay substantially more for basic financial services from alternative financial providers such as payday lenders, TCUL said.
KLAMATH FALLS, Ore. and JACKSON, Miss. (3/22/12)--Two credit unions, one in Oregon and the other in Mississippi, announced in the past week that they are acquiring bank branches.
A purchase and assumption agreement that results in the transfer of two PremierWest Bank branches located in Dorris and Tulelake, Calif., to Pacific Crest FCU in Klamath Falls, Ore., was announced Monday. The announcement was made by Jim Ford, president/CEO of PremierWest Bancorp, the parent company of PremierWest Bank, and Kathie Philp, president/CEO of the $124.2 million asset Pacific Crest FCU (Marketwire March 19).
The two bank branches were scheduled to be closed April 20. However, both branches will remain open and transition to Pacific Crest late in the second quarter, with no interruption in service.
The acquisition has been approved by PremierWest Bank's and Pacific Crest's boards of directors. Completion of the transaction is subject to customary closing conditions, including regulatory approvals.
Hope FCU, a $140.3 million asset credit union based in Jackson, Miss., announced earlier this month that is has acquired the former BancorpSouth branch in Utica, Miss. (The Clarion-Ledger March 15).
Before the grand opening this spring, the building will undergo minor renovations, Hope FCU told the newspaper. BancorpSouth closed the Utica branch last August, leaving customers without banking services in the community. Hope FCU opened a temporary branch inside the Utica Town Hall to help fill the void and then moved to a modular branch in October, the paper said.
WASHINGTON (3/22/12)--World Council of Credit Unions (WOCCU) submitted formal support Tuesday for proposed revisions to the Basel Committee on Banking Supervision's Core Principles for Effective Banking Supervision.
The revisions would make regulatory standards "proportional" to financial institutions' risk profiles and based on their impact on global financial systems. Supervisory proportionality would help reduce unnecessary regulatory burdens on smaller institutions, WOCCU said in a Tuesday letter to the committee's headquarters in Basel, Switzerland.
"World Council supports the committee's proposed revisions to its core principles vis-à-vis banking supervision," wrote Michael Edwards, WOCCU chief counsel and vice president for advocacy and governmental affairs. "We believe the proportionality concept will help reduce unnecessary regulatory burdens on credit unions and other small financial institutions that are non-complex and do not present systemic risks to the financial system."
Proper oversight is critical to credit unions' capabilities to effectively serve their members, especially during times of economic challenge, according to Brian Branch, WOCCU president/CEO. "We support the regulatory goals outlined by the Basel Committee and we appreciate the opportunity to represent the global credit union movement in helping the committee develop a proportionality of oversight appropriate to our movement," Branch said.
In his letter to Wayne Byres, Basel Committee general secretary, Edwards expressed WOCCU's support of the proportionality concept as outlined in principle 8 ("Supervisory approach"), principle 9 ("Supervisory techniques and tools") and elsewhere in the revisions. Edwards also stressed recommendations offered in Guiding Principles for Effective Prudential Supervision of Cooperative Financial Institutions, developed in 2011 by the International Credit Union Regulators' Network (ICURN), a worldwide network of credit union regulatory authorities. WOCCU serves as ICURN's secretariat.
ICURN developed its principles based on those set forth by the Basel Committee, but tailored them to a credit union and cooperative financial institution context. "World Council believes that the ICURN guiding principles are an appropriate proportional approach to supervision of credit unions," Edwards wrote.
To see a copy of the letter, use the link.
HARAHAN, La. (3/22/12)--John P. Ducrest, commissioner of the Louisiana Office of Financial Institutions (OFI) and chairman of the Conference of State Bank Supervisors (CSBS), has been appointed to the national Financial Stability Oversight Council (FSOC), according to the Louisiana Credit Union League.
The FSOC was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act to monitor the safety and stability of the nation's financial system, identify risks to the system and coordinate responses to any threat. The act requires one of the five non-voting members of the FSOC to be a state banking supervisor selected by other state banking supervisors, said the league (eNews March 21).
William S. Haraf, former commissioner of the California Department of Financial Institutions, previously was state banking supervisors' representative on the FSOC.
Ducrest, commissioner of Louisiana's OFI since June 2004, was elected CSBS chairman in January 2011. As commissioner of OFI, he oversees financial services providers in the state, including credit unions. He first joined OFI in 1985 as a financial examiner before becoming deputy chief examiner and commissioner.
During Hurricane Katrina, he earned praise for his leadership in working with other state officials and the federal government to ensure a functional financial system for the citizens of Louisiana, the league said.
TUKWILA, Wash. (3/22/12)--Credit unions are an important source for consumer financial services and private sector lending, and need access to more supplemental capital, Gary Oakland, president/CEO of BECU in Tukwila, Wash., wrote in a blog entry Tuesday on The Huffington Post.
"Credit unions serve more than 90 million Americans and play a key role in supporting our economic recovery by extending much needed credit in communities across the country," Oakland wrote. "And our numbers are growing. Nationally, more than 1.3 million Americans opened new credit union accounts in the past year.
"Unfortunately, current law imposes inflexible regulatory capital requirements on credit unions which unfairly penalize healthy credit unions for growing to meet the needs of their members," he added. "As a result, many credit unions are being forced to consider discouraging deposits, limiting new memberships and scaling back member services. This is a disservice to the communities we serve," he said.
The Capital Access for Small Businesses and Jobs Act, H.R. 3993, bi-partisan legislation, would allow "credit unions to accept additional forms of capital to supplement their retained earnings in a manner that is consistent with their status as a not-for-profit financial cooperative," Oakland wrote.
He concluded by urging Congress to support the legislation.
The Credit Union National Association is asking Congress to allow credit unions to strengthen their ability to manage risks through the use of supplemental capital.
VANCOUVER, B.C., and TORONTO, Ont. (3/22/12)--Canada's Central 1 CU, the central facility for credit unions in British Columbia and Ontario, has weathered last year's market volatility and the adoption of new accounting standards. It announced Tuesday that it had posted a $16.7 million profit during 2011, compared with $43.6 million a year earlier.
The credit union organization saw improvement in market volatility during fourth quarter, which provided a year-end boost to the earnings. Profit for fourth quarter was $15.4 million (Marketwire
"Our core business remains strong and profitable," said Central 1 President/CEO Don Rolfe. "The market turbulence resulted in a decrease in the fair value of some financial instruments we hold, but the quality of our investment portfolio remains high."
Credit spreads on provincial and corporate debt narrowed, and earnings from operations were up, resulting in stronger earnings than had been reported earlier in the year, said Central 1.
Market volatility has resulted in mark-to-market losses on the fair value of financial instruments held by Central 1. Under the new accounting rules, securities must be recorded as "mark-to-market" or current market value, which led to a $109.7 million loss in fair value of Central 1's financial investments.
However, Central 1's securities are being held to maturity and the losses won't be realized. Also, its portfolio of bonds are diversified among government (45%-50%) , major banks (40%), and corporate bonds, Chief Investment Officer Charles Milne told the Vancouver Sun
In its press release, Central 1 noted it does not hold any European sovereign debt. It is well-capitalized, with a regulatory capital base of $675.4 million and a ratio of regulatory capital to risk-weighted assets of 34.8%.
Central 1 also reported these financial highlights:
- Total assets at year-end were $14.6 billion, up from $13.7 billion in 2010.
- Return on average equity was 2.6%, compared with 7.4% in 2010.
- Central 1 paid $7 million in dividends to its member shareholders.
- After taxes and dividends, Central 1 transferred $4.6 million to retained earnings, bringing that total to $304.7 million at year-end.
NEW YORK (3/22/12)--As many as 35% of U.S. banking customers have gone 'virtual' and are no longer using branches for day-to-day financial transactions, according to a new study by consulting firm Novantas.
The New York-based consulting firm said consumers prefer non-branch channels for a range of transactions, from deposits, to solving service problems.
"The rise of virtually domiciled customers at banks is both a huge challenge and an opportunity for the industry," said Novantas partner Kevin Travis, one of the study's authors. For traditional financial institutions, these customers "are an untapped source of cross-sales, but they are also great targets for new entrant and direct players, from internet-only banks, to wealth managers and credit unions."
The findings, based on a survey of 3,500 respondents, were presented Wednesday at a Community Bankers Association Live 2012 conference.
The changes in banking channels mean branch volumes will fall by as much as 20% in certain transaction categories, said Darryl Demos, Novantas partner and an expert in sales and service staffing and processes. With fewer customers walking in the door, banks face a sales crisis, with fewer "at-bat" opportunities to acquire new business, he added. "Banks could count on a 'if you build it, they will come' model working in most markets. Today, that's over. Returns on sales force investments are likely negative for the industry and may not be coming back," said Demos.
Novantas said the findings also indicated that banks are continuing to invest in technology that improves consumers' daily lives by giving them time they normally would spend standing in line at a branch.
HARRISBURG, Pa. (3/21/12)--The Pennsylvania Credit Union Association (PCUA) has announced two men will be honored with the association's 2012 Lifetime Achievement Awards.
Dave Baker, president/treasurer of York (Pa.) Education FCU, is recipient of the William W. Pratt Professional of the Year Award (Life is a Highway March 20).
A teacher, Baker began managing the credit union in January 1971. Under his leadership, it grew from 134 members to more than 3,900, and from $23,374 in assets to $26.5 million. The credit union serves 54 select employee groups and operates a student branch at Red Lion Area High School. Baker served on PCUA's board of directors 1988-1991. He was a member of the Credit Union Advisory Council of the Federal Reserve Bank of Philadelphia, 1992-1994 and was chairman in 1994. He also served on the nominating committee of Mid-Atlantic Corporate FCU and is a former two-term president of the York Chapter of Credit Unions.
Robert Greek, a board director of Pittsburgh Central FCU, is recipient of the Joseph A. Moore Volunteer of the Year Award.
Greek has been a volunteer for 38 years. For 25 years--from 1974 to 1999--he served as chairman of Union Electric Steel FCU (now Southwest Community FCU, Carnegie). In 1991, he became director at Pittsburgh Central. Greek was a member of the steering committee to organize the Pennsylvania Credit Union Foundation and served six years--1996-2002--as a director and member of the Fundraising Committee.
The awards will be presented during PCUA's Annual Convention May 22 in Pittsburgh.
LANSING, Mich. (3/21/12)--The Michigan Credit Union League & Affiliates' 2012 report on Community Reinvestment Initiative (CRI) shows the credit union advantage to consumers, said the league.
Credit unions in the state use the tool to show why credit unions offer a clear choice for consumers, and to provide information to members of Congress, state legislature, credit union boards and the public, the league said (Michigan Monitor
Statistics related in the report about the benefits of credit unions to consumers include:
Financial benefits--Michigan credit union members enjoyed an estimated $259 million in the form of lower fees and better rates between June 30, 2010 and June 30, 2011.
Invest in America--Roughly 499,540 credit union members nationwide received discounts on their new car purchases through the Invest in America program since it began in December 2008.
Save to Win--Credit union members deposited $30 million in Save to Win, a prize-linked savings account offered by credit unions in the state.
Youth Financial Education--Michigan credit unions educated 49,945 K-12 students during the 2010-2011 school year.
WABAN, Mass. (3/21/12)--Credit unions continue to stand among the elite when consumers are asked to rate their loyalty to companies, according to a new survey.
A survey of 10,000 U.S. consumers about their loyalty to 206 large companies across 18 industries showed only seven companies have "very strong" loyalty ratings. Credit unions ranked No. 5, just behind Sam's Club, Aldi, USAA, and Publix and ahead of Amazon.com, and H.E.B. At the other end of the spectrum, 37 companies earned "very weak" loyalty ratings.
The survey report was released Tuesday by Temkin Group, a Waban, Mass., customer experience research firm. Last month Temkin released results of another customer satisfaction survey targeting experience and credit unions also scored highly in that survey.
In this week's survey, grocery chains, retailers and fast foods scored as the top three industries, with an average rating of "strong." At the bottom: TV service providers and Internet service providers. Credit card issuers and banks were in six of the bottom nine spots in the ratings.
"Our research shows that loyalty is up for grabs across many industries," said Bruce Temkin, managing partner of Temkin Group and the report's author.
The ratings examined three components of loyalty:
- Likelihood of consumers to recommend companies;
- Reluctance of consumers to switch business away from companies; and
- Willingness of consumers to purchase additional products and services from the companies.
Credit unions also had double-digit loyalty leads over the banking industry average. Credit unions were among nine companies that fell into that category. Citibank, Bank of America, HSBC were 15 or more percentage points below the banking industry average.
Credit unions were also among three companies showing the most improvement over last year. Nineteen companies saw loyalty ratings improve, the report said. For more information, use the link.
ALBANY, N.Y. (3/21/12)--The State of New York filed its response Monday to Hudson Valley FCU's appeal of lower court decisions on the state's mortgage recording tax (MRT) and to amicus briefs from a number of credit union organizations and federal government entities challenging the tax.
In its response, filed with the State of New York Court of Appeals, the state argued that the Federal Credit Union Act (FCU Act) does not bar collection of recording taxes on mortgages securing federal credit union loans because the tax "is not a property tax."
"The sweeping tax immunity Hudson Valley seeks has no statutory or constitutional basis. Although Congress exempted federal credit unions from some forms of taxation in the FCU Act, Congress did not exempt credit union members or credit union mortgages from state taxation," said the state's response. "This court has repeatedly held, contrary to Hudson Valley's claim, that the recording tax is a privilege tax imposed for the privilege of recording a mortgage, not a property tax assessed against lenders, like Hudson Valley, for possessing or owning the mortgage as a security interest," said the state.
The state argued that federal credit unions, including Hudson Valley, are not entitled to constitutional tax immunity as virtual arms of the U.S. government. It argued that Congress "expressly defined federal credit unions' tax exemptions" in the FCU Act and that denying federal credit unions the same tax immunity as government agencies lending government funds "is not unconstitutionally discriminatory."
"Hudson Valley is not entitled to constitutional tax immunity as an instrumentality of the U.S. government. Federal credit unions are privately owned and managed entities. They are not agencies of the U.S., and do not use public funds to make member loans. Moreover, because Congress expressly stated and limited the tax exemptions applicable to federal credit unions in the FCU Act, further constitutional analysis is unnecessary," said the state.
Hudson Valley, a $3.2 billion asset credit union based in Poughkeepsie, N.Y., has appealed two lower courts' decisions that denied its challenge to the MRT. It had filed suit on May 12, 2009, in the New York Supreme Court, a lower trial court, against the New York State Department of Taxation and Finance.
The lower court, in dismissing the case, said the MRT was a tax on the "privilege" of filing the mortgage under state law. The case then went to the Appellate Division, which upheld the lower court ruling. The credit union appealed and the New York Court of Appeal, the state's highest court, agreed on Oct. 18, 2011 to hear the appeal.
The credit union maintains that the FCU Act exempts federally chartered credit unions from the state tax, which it argues is not considered a "privilege tax" under federal law. Instead, credit unions' federal tax exemption and applicable U.S. Supreme Court rulings should control in the issue, it said.
Hudson Valley's lawsuit has been supported in various amicus briefs from the Department of Justice, Federal Housing Finance Agency, the Credit Union Association of New York, the Credit Union National Association and the National Association of Federal Credit Unions.
The Department of Justice's amicus brief said the lower courts' interpretation of the FCU Act "is inconsistent with the statute's plain language" exempting federal credit unions from all taxes except real property taxes and tangible personal property taxes.
"The lower courts misinterpreted Section 122 of the FCUA Act," said the department, adding the act "expressly immunizes federal credit unions from all state taxes, with the limited exception of real property taxes and tangible personal property taxes." It also pointed out, "The United States has an interest in the proper interpretation of the FCUA and in preserving the tax exemptions afforded federal credit unions by Congress."
"Under the clear terms of the FCUA, because the MRT is not a real property or tangible personal property tax--the only two taxes permitted under the FCUA--it cannot be levied against federal credit unions such as Hudson Valley," said the Justice Department. It pointed out that "even if the FCUA exempts federal credit unions from only certain categories of taxes, as the Appellate Division erroneously concluded, federal credit unions are still exempt from paying the MRT because the MRT can be characterized as a tax on a federal credit union and its property, two of the categories prohibited by the FCUA under the Appellate Division's construction of the statute."
Because the U.S. Supreme Court "has characterized mortgage recording taxes similar to the MRT as a tax on the mortgage, the MRT can be construed as an exempted tax on intangible personal property. The MRT is also a tax on a federal credit union itself when applied to mortgages issued by the federal credit union, and thus is exempted…," said the document.
New York's MRT requires a tax of 50 cents for each $100 of debt secured by a mortgage. Most states charge only administrative fees for recording a mortgage.
SPRING TOWNSHIP, Pa. (3/21/12)--Utilities Employees CU in Reading, Pa., a "virtual" credit union set to surpass $1 billion in assets soon, was featured in an article Sunday in the Reading Eagle.
The credit union's 45,000 members are scattered nationwide and do most of their depositing, withdrawing, and borrowing online or over the phone.
"We call our model a 'virtual' credit union model," Glenn Yeager, Utilities Employees president/CEO, told the newspaper. "Most credit unions and banks still promote the branch model."
The credit union had $504 million in assets in 2006. That total this year was $991,658,473 on Sept. 30, and Yeager told the paper he believes the $1 billion mark will be surpassed by the end of March. Meanwhile, employment at the credit union has risen to more than 90 from 74 in 2006.
"The typical billion-dollar credit union would have 250 to 300 employees, and we have 90," Yeager said. "You can see where the efficiencies come in."
Ed Williams, president/CEO of Discovery FCU, Wyomissing, Pa., and Diane Powell, director of communications for the Pennsylvania Credit Union Association, also provided insight on the operation of credit unions to the paper.
To read the article, use the link.
LONGVIEW, Texas (3/21/12)--For Telco Plus CU in Longview, Texas, 2011 was about helping its members get through the recession, according to a local newspaper article.
"The recession affected us because it affected our members," Betty Deweese, Telco Plus president/CEO, told Longview's News-Journal newspaper (LoneStar Leaguer March 20).
Many people in the community lost their jobs or were forced to take a pay cut, as the recession ran it course, making it tougher for residents to fulfill their financial obligations and maintain good credit scores.
"We spent a lot of our time working with these members to help improve their credit and educate them about what makes their credit, so they know it gives them a better interest rate to take care of their credit," Deweese told the paper. "We also did a lot of home equity loans to help people consolidate higher interest rate credit card balances."
Telco Plus channeled substantial effort into educating the community about credit unions, Deweese told the paper.
"We are trying to get more staff involved in the community, so people know we are here and we are available, and more importantly, that we want to help," she added.
In addition to increased marketing, the credit union has also tried to get more involved in the Longview and Tyler communities, Deweese told the paper. Those efforts included attending Chamber of Commerce functions, getting involved in the Better Business Bureau and charitable organizations, and continuing its involvement with March of Dimes.
Telco Plus also hosted a "Reality Fair" at Pine Tree Junior High School to teach students about real-world finances.
WASHINGTON (3/21/12)--Michael J. "Mike" Mercer, president/CEO of the Georgia Credit Union Affiliates (GCUA), has been elected chairman of the board of the Credit Union National Association (CUNA).
Mercer was elected chairman during the board's regular meeting Monday in Washington, D.C. The meeting was held in conjunction with CUNA's Governmental Affairs Conference. He succeeds Harriet May, former president/CEO of Government Employees CU in El Paso, Texas. May is retiring from the CUNA Board after serving for 20 months as CUNA chairman. Mercer was elected to a one-year term.
Following his election, Mercer told the CUNA Board that, in his view, the role of the association is to advance the successful use of cooperative consumer finance. "To the extent that we succeed, it will be helpful to every credit union in the country," Mercer said.
Bill Cheney, CUNA president/CEO, said he looks forward to working with Mercer in support of CUNA's goals in advocacy and in supporting the credit union movement. "His leadership skills are unmatched and he has broad insight into the needs of credit unions," Cheney added.
Mercer is in his fifth decade working for and with credit unions; he has been president of GCUA since 1985. In that capacity, he is responsible for the state trade association and several other state-level credit union support organizations.
Also elected officers of CUNA for one-year terms were:
- Vice chairman--Patricia Wesenberg, president/CEO, Central City CU (formerly Point Plus CU), Marshfield, Wis.;
- Secretary--Dennis Pierce, president/CEO, CommunityAmerica CU, Lenexa, Kan.;
- Treasurer--Susan M. Streifel, president/CEO, Woodstone CU, Federal Way, Wash.
- At-large member--Rod Staatz, president/CEO, State Employees CU, Linthicum, Md.
Terms for all began Monday.
BROCKTON, Mass. (3/21/12)--The board of HarborOne CU, Brockton, Mass., is scheduled to meet today to consider the credit union's proposal to convert to a savings bank.
Comments from members about the proposal to become a Massachusetts-chartered mutual cooperative bank were due last week. It is not known how many comments the credit union received.
The $1.9 billion asset HarborOne has said that converting to a bank would provide it with more flexibility to expand its customer base; increase lending authority, especially in business lending; and provide access to additional capital such as through sale of stock, which isn't available to credit unions.
The Credit Union National Association and the Massachusetts Credit Union League have stated that they believe a credit union charter is the best option for members of a credit union and that any decision on converting should ultimately be in the members' interest (News Now Feb. 17).
If the board adopts a conversion plan, the credit union would send to regulators for review materials to be sent to members about the conversion plans. The review process could take months. After a review, a conversion proposal would be submitted to the membership for a vote after a notice period of at least 90 days.
National Credit Union Foundation chairman Gary Oakland and Vice Chairman Laida Garcia, present Bill Eckhardt (center), president/CEO, Alaska USA FCU, Anchorage, Alaska, with the Wegner Award for Lifetime Achievement.
WASHINGTON (3/21/12)--The National Credit Union Foundation (NCUF) presented three Herb Wegner Memorial Awards at its annual dinner Monday night. A special Anchor Award was also awarded to Bob Schumacher, the night's emcee and former CEO of MountainCrest CU, Arlington, Wash.
More than 900 credit union leaders and supporters attended the NCUF Dinner Presenting the Herb Wegner Memorial Awards, held in conjunction with the Credit Union National Association (CUNA) Governmental Affairs Conference (GAC) in Washington, D.C.
The awards ceremony celebrated the highest national honors in the credit union movement, specifically:
- Lifetime Achievement: Bill Eckhardt, president/CEO of Alaska USA FCU, Anchorage, Alaska;
- Lifetime Achievement: Tom Dorety, president/CEO of Suncoast Schools FCU, Tampa, Fla.; and
- Outstanding Organization: Invest in America.
"Alaska USA's success is the result of a long-standing and strong commitment to member service, as well as dedication and hard work on the part of the officials, executives and every employee, past and present," said Eckhardt. "Accordingly, I accept the Lifetime Achievement Award on behalf of that entire Alaska USA team."
Gary Oakland, right, chairman, National Credit Union Foundation (NCUF), and Laida Garcia, NCUF vice chairman, present Tom Dorety, president/CEO, Suncoast Schools FCU, Tampa, Fla., with the Wegner Award for Lifetime Achievement. (Photos provided by the National Credit Foundation)
In accepting his award, Dorety thanked many and noted: "Our board at Suncoast has shown a great deal of foresight and courage over the past four years in making decisions in the best long-term interests of our members and not focusing solely on short-term results or specific ratios that others have suggested. I am proud that, when dealing with the recent financial crisis, Suncoast followed the words of Horton the Elephant: 'I meant what I said and I said what I meant, an elephant's faithful 100%.'"
The Anchor Award, presented from time to time at the discretion of NCUF's board of directors, goes to an individual or organization that the board believes has demonstrated the foundation's mission of making financial freedom achievable through credit unions.
At this year's dinner, Schumacher was surprised with the award by NCUF Board Chairman Gary Oakland, who cited Schumacher's contributions to the credit union industry and NCUF, and his longtime support of programs such as Biz Kid$ and the Credit Union Development Education program. This also was Schumacher's last year as emcee of NCUF's Wegner Awards dinner.
"Tonight represents my 15th Wegner Awards program as your emcee and host," said Schumacher at the end of the dinner. "As some of you know, it has always been the 'best night of my credit union year' and I have had the best seat in the house."
Invest in America is presented with the Wegner Award for Outstanding Program. Pictured from left, are: Laida Garcia, vice chairman, National Credit Union Foundation; Donald Johnson, vice president of U.S. sales operations at General Motors; Dan Hesse, CEO of Sprint; Dave Adams, president/CEO of the Michigan Credit Union League; and Gary Oakland, chair, National Credit Union Foundation.
He thanked NCUF and those in the audience "because, without you, there would be no Wegner Awards to share," he added. You see, it is from within you, this body, that we draw our honorees, our credit union Wegner heroes. So I leave you with my father's words, 'let's all make sure that we take good care of each other.'"
Invest in America is a credit union growth and loyalty program that offers members discounts on consumer purchases. It was started in 2008 by CUcorp, a wholly-owned subsidiary of the Michigan Credit Union League. CUcorp is now CU Solutions Group, a national marketing company that manages the program.
Through the program, credit unions banded together to promote and support credit unions products and services and those offered by participating American-based companies, such as General Motors or Sprint. Credit union members were given discounts to the companies, which in turn drove membership growth and loyalty.
Invest in America has since grown into an enhancement program helping credit unions to add vehicle loans, increase debit/credit card transactions/balances and provide non-interest income opportunities.
This year's winners will join an elite group of 47 individuals and 22 organizations whose efforts during the past 24 years have earned them the recognition of Herb Wegner Memorial Awards.
WASHINGTON (3/21/12)--The National Federation of Community Development Credit Unions has appointed its vice president of programs, Pamela Owens, as interim CEO, effective May 4 when CEO Clifford Rosenthal leaves after more than 30 years with the federation.
At a press conference Tuesday during the Credit Union National Association's 2012 Governmental Affairs Conference in Washington D.C., Lynda Milton, federation board chairman and CEO of Team Financial FCU, Houston, Texas, noted Rosenthal's accomplishments and outlined the next steps for a transition to new leadership.
On May 7, Rosenthal will become assistant director of the Office of Financial Empowerment for the Consumer Financial Protection Bureau. Milton noted Rosenthal's accomplishments, including:
- Quadrupling the federation's membership;
- Pioneering the concept for the federal Community Development Financial Institutions (CDFI) Fund;
- Achieving regulatory recognition for supplemental capital;
- Developing programs to reach the underserved population through African-American faith-based credit unions, credit unions serving Latino membership and forging ties with the disability community; and
- Bringing the federation to a sound, sustainable financial footing.
The federation's board met last weekend and ratified Owens' interim appointment, Milton said. Owens has worked with the federation since 1998, developing and managing the CDCU Institute, a training program for officials of community development credit unions (CDCU) and small credit unions. She also manages the federation's program to enhance the financial stability of older adults, programs to access financial services and employment for people with disabilities and more.
The federation will formally open a national search for a permanent president/CEO on April 1, with the assistance of TransitionGuides, a firm that specializes in non-profit executive transitions and sustainability planning, said Milton. The federation has worked with TransitionGudies before on its succession planning and succession planning for CDCUs.
"We anticipate the search process will be conducted throughout the spring and early summer. Our target for bringing on a successor is, tentatively, Oct. 1," said Milton.
- AUSTIN, Texas (3/21/12)--Dan Mica, former president/CEO of the Credit Union National Association (CUNA), has become an advisory board director of BuzzBanking, developer of a financial services platform that combines social media banking with a rewards program. BuzzBanking, powered by fisoc Inc., is a CUNA Strategic Services (CSS) provider. Mica is currently president of The DMA Group, a consulting firm working with financial services. CSS and BuzzBanking have teamed for a six-month pilot program for credit unions …
- HARRISBURG, Pa. (3/21/12)--Pennsylvania's 44th student-run credit union branch celebrated its grand opening on Friday at William Tennett High School in Warminster. The student credit union was opened as part of Trevose-based TruMark Financial CU, according to the Pennsylvania Credit Union Association (Life is a Highway March 20). Students who work at the credit union must undergo 40 hours of teller training during the summer and work in a TruMark Financial branch. The student branch is an opportunity to expand the credit union's financial education efforts within the school. It is the second student-operated branch for the $1.4 billion asset credit union. From left: Richard Stipa, CEO of TruMark Financial; Glenn Moyer, Pennsylvania secretary of banking; Hugh Bray, TruMark Financial board president; and Joe Wambach, executive director, Pennsylvania Credit Union Foundation. (Photo provided by the Pennsylvania Credit Union Association) …
- HARRISBURG, Pa. (3/21/12)--Sean Jelen, CEO of Tobyhanna FCU, Scranton, Pa., has been appointed to the board of the Pennsylvania Credit Union Service Centers Inc. (PaCUSC), announced the Pennsylvania Credit Union Association (Life is a Highway March 20). Jelen will fill out the unexpired term of Jim Kanaley, retired CEO of Tobyhanna. That term will expire in 2014 …
- AMES, Iowa (3/21/12)--Steven E. Lunning, a member of the board of directors at Ames, Iowa-based Ace Community CU for more than 20 years, died Friday. He was 61. He retired in January 2011 after nearly 25 years as payroll coordinator with Mary Greeley Medical Center (The Des Moines Register March 20) …
- RALEIGH, N.C. (3/20/12)--State Employees' CU, Raleigh, N.C., continues to waive late fees on first mortgage loans up to 45 days late to maintain its efforts to help members whose lives have been disrupted by significant events such as a job loss. By doing so, the $24 billion asset SECU has saved members more than $1.8 million in fees the past year. SECU's board first implemented the waiver after hearing that members were struggling to meet day-to-day needs as a result of an unexpected event. Other changes SECU has implemented have included eliminating private mortgage insurance requirements, reducing origination fees, providing specialty mortgage programs for first-time home buyers and providing an in-house Mortgage Assistance Program to help members stay in their homes …
- LANSING, Mich. (3/20/12)--Michigan Credit Union League (MCUL) & Affiliates is welcoming Kieran Marion back to the league as vice president of governmental affairs. Marion was legislative affairs manager in 2003 when the league worked on Michigan Credit Union Act modernization. He replaces Marcia Hune, who is joining Government Consulting Services Inc., a multi-client lobbying firm in Lansing (Michigan Monitor March 19). After leaving the league, Marion worked as a government relations professional for Dykema Gossett for two years and served one year as legislative director for state Sen. Shirley Johnson, who at the time was chairwoman of the Senate Appropriations Committee before she was term-limited. Since leaving that position, Marion has served as legislative counsel for the Uniform Law Commission in Chicago, where he lobbied for passage of proposed uniform and model legislation in the 50 states, the District of Columbia, U.S. Virgin Islands and Puerto Rico. In that position, he also was primary staff counsel for legislative policy and appropriations efforts in Michigan …
RALEIGH, N.C. (3/20/12)--State Employees' CU (SECU), based in Raleigh, N.C., has written the Consumer Financial Protection Bureau (CFPB) outlining the credit union's consumer-friendly overdraft practices and mitigation efforts.
The letter, written in response to CFPB's call for comments about overdraft practices in the financial marketplace, highlights the credit union's low-cost and no-cost overdraft options, as well as services provided to help members avoid more than $53 million in overdraft-related fees.
The Credit Union National Association met with CFPB Director Richard Cordray Monday on the issue. He was a speaker at CUNA's Governmental Affairs Conference Monday in Washington D.C. (See related story on his speech in today's News Now, "Cordray says CUs give high-quality services").
SECU's regular overdraft option, used by more than 80% of its 900,000 checking accountholders, protects against high fees associated with "bounced checks." It allows members to select their deposit accounts, open-end loans or credit card to use for automatic transfer of funds if needed to "pay" a checking account item. It debits 50 cents from the protected checking account for the service.
However, SECU members can avoid fees in several ways, SECU said. Members can receive two-way text messaging and alert options on their mobile device or through online Member Access when potential "red flags"--such as low balances--occur on their checking account. Last year, 8.1 million messages and alerts were sent to SECU members.
Also, the credit union's "Another Chance" program provides an alert when an item is posting to a member's checking account without sufficient funds to cover the item. Members have until the end of the business day to make a branch or online deposit to avoid any nonsufficient funds (NSF) fees. This option saved SECU members nearly $2.6 million last year in NSF fees.
SECU also offers "Fee Free Days" where it waives any $12 NSF fees on two separate days in which items marked as NSF are returned, regardless of the number of items. SECU also waives the 50-cent overdraft transfer fees on two days each year.
FARMERS BRANCH, Texas (3/20/12)--Shell FCU, a $482 million asset credit union in Deer Park, Texas, has implemented the use of iPads for board and other meeting presentations, according to the Texas Credit Union League.
"Sharing presentations across multiple iPads not only improves visibility but cuts back on paper usage and expenses," Angela Head, the credit union's chief operating officer, told the league (LoneStar Leaguer
Click for larger view
Implementing and installing local network access via WiFi, the credit union's information systems staff set up IdeaFlight, a software program that provides access for one "pilot" to drive presentations and up to 15 "passengers" following the presentations. It created a universal presentation file format through PDF, said Joe Herrera, IS manager at the credit union. (See the photo of a typical board meeting set up).
The article also noted that a national study of small and mid-size business (SMB) owners by The Business Journals
revealed that iPad and other mobile devices have become critical to this business segment. iPad use nearly quadrupled among the SMB market over the past year--to 34% in 2011 from 9% in 2010. That indicates that the tablet is the fastest growing technology among the SMB market, said the article.
Since Apple launched the iPad in April 2010, nearly 75% of SMB owners report being "very" or "somewhat" familiar with the device--an "incredibly high" level of familiarity, said the study. Of those surveyed, 34% are tech-savvy and financially successful, 72% have annual household incomes averaging $176,000, and their companies are well-established, existing for an average of 28 years.
MADISON, Wis. (3/20/12)--The Filene Research Institute has released its latest Key Findings: Blueprints for Innovation
, a report from Filene i3 (Ideas, Innovation, Implementation), the institute's group of innovators.
The report features 16 new idea blueprints designed to help members, and three updated blueprints on ready-to-implement ideas gaining traction nationally. The ideas fall into five categories:
- Building wealth;
- Navigating financial waters;
- Meeting life's milestones;
- Making community connections; and
- Borrowing responsibly.
Mark Meyer, Filene CEO, encouraged Filene members to "keep this catalog of ideas at hand as you develop your organization's goals and tactics for today's challenging times.
Filene i3 is a group of credit union executives from across the nation. Its objectives are to:
- Develop and implement new, innovative ideas;
- Provide a forum for cooperation, collaboration, professional development, and industry succession planning; and
- Act as ambassadors for change and innovation.
For more information, use the links.
PORTLAND, Maine (3/20/12)--Maine's mortgage note bill, with credit unions' amendment attached, is making fast progress through the state legislature, and credit unions' grassroots efforts on it were praised by a state senator on the Senate floor, according to the Maine Credit Union League.
The bill requires an entity foreclosing on a home to show proof that it owns the mortgage note. The league had presented the amendment that provides consumer protection if the original document cannot be produced without harming credit unions' interests.
State Sen. David Hastings (R-Fryeburg) praised credit unions' involvement, thanking them "for all of their work on this issue. They were willing to try and find a solution, and I appreciate it." (Weekly Update March 16).
After he spoke, the Senate voted 32-2 to pass the measure, L.D. 145, The Original Mortgage Note Bill. The measure went back to the House for a second time, where it passed under the hammer. It is headed back to the Senate for final approval.
League President John Murphy noted that credit unions made thousands of e-mails and calls to urge support of the bill. "It made a big difference and once again demonstrated the impact of credit unions' grassroots efforts," he said. He noted that the league's governmental affairs team--Quincy Hentzel, Jon Paradise, Ed and Cate Pineau and Ben Marcus--have been working on the bill for more than a year.
LOS ANGELES (3/20/12)--A federal judge has granted the National Credit Union Administration's (NCUA) motion to strike down certain defenses offered by officials of the now defunct Western Corporate FCU in NCUA's suit against them to recoup $6.8 million in investment portfolio losses from mortgage-backed securities.
It was the second decision within a week that supported some of NCUA's motions in the lawsuit, which alleges that senior WesCorp executives were negligent in monitoring the corporate's investments and that there was a breach of fiduciary duty and fraud related to the investments that caused WesCorp to collapse.
U.S. District Judge George H. Wu of the U.S. District Court for the Central California, Western Division in Los Angeles, in an order filed Thursday granted NCUA's motion to strike several affirmative defenses in the executives' amended answers to its complaint.
He struck "without leave to amend," defenses that claimed NCUA ratified, consented, approved, acquiesced or participated in the events; that the state's business judgment rule applied; that there was due diligence and reasonable investigation; that the decisions were made according to business custom and usage, candor and good faith.
Judge Wu also struck several other defenses "but only to the extent that they assert as affirmative defenses the alleged approval, acquiescence, consent, participation or ratification of NCUA examiners and supervisory personnel before the NCUA placed WesCorp into conservatorship in March 2009." In these defenses, several defendants maintained there was reliance on others' expertise, apportionment, and consent, approval, acquiescence, authorization and ratification. These are struck as they relate to NCUA personnel and examiners.
The court did not strike defenses that "assert approval, acquiescence, consent, participation or ratification by the WesCorp board of directors" or its committees. It said the same for directives or guidance given to the officer defendants by WesCorp's board or committees. It also said the same for statements from NCUA to the WesCorp board or committees that might have influenced any directives or guidance given to the officers by the WesCorp board, and for reliance by the defendants on people other than NCUA personnel such as professionals.
"By striking these affirmative defenses, the court does not preclude the officer defendants from offering evidence of the NCUA's statements and conduct to the extent that such evidence is relevant to the issue of whether the officer defendants breached their fiduciary duties, as alleged by NCUA."
He also struck--but gave the defendants the ability to amend these defenses--several statute of limitations defenses asserted by the WesCorp officials, and denied NCUA's motion to strike an estoppel defense made by Thomas Sidley, WesCorp's former chief risk officer. NCUA and Sidley entered into a settlement agreement earlier this month.
The other former WesCorp officials named as defendants are: CEO Bob Siravo, Chief Financial Officer Todd Lane, Chief Investment Officer Bob Burrell and Human Resources Director Thomas Swedburg.
Last week Judge Wu dismissed WesCorp officials' efforts to get NCUA to pay legal costs and indemnification but allowed the officials an opportunity to amend their indemnification claim based on state law before April 14.
SOUTH BURLINGTON, Vt. (3/20/12)--NorthCountry FCU in South Burlington, Vt., has stepped in to provide financial services to residents of the small town of Alburgh, Vt., after People's United Bank announced it was closing its branch in the town.
The next closest financial institution to Alburgh is across the state line in Champlain, N.Y. The closest People's United Bank is on the other side of a lake and located in Swanton, Vt. (vpr.net March 15).
Banking in other towns isn't that much of an ordeal for those who commute to work. However, Alburgh has a substantial number of elderly and low-income residents who don't have access to transportation, the radio station said.
After a search by Alburgh's "Find a Bank Committee," the $350.3 million asset NorthCountry FCU offered to negotiate to buy the People's United branch.
Previously, the committee had called other banks to see if they would open a branch in the town. The committee also considered starting up a credit union or having a mobile bank visit Alburgh, the station said.
WILMINGTON, Del. (3/20/12)--A new federal credit union--Stepping Stones Community FCU in Wilmington, Del.--opened Friday.
The credit union was created through a partnership between the Delaware Community Reinvestment Action Council (DCRAC), non-profit organizations, Delaware's financial services industries and Wilmington Community leaders.
U.S. Rep. John Carney and U.S. Sens. Tom Carper and Chris Coons (all D-Del.) Friday joined those organizations to celebrate the grand opening of the credit union.
Stepping Stones FCU's goal is to assist local residents in entering mainstream banking and give them the financial tools to improve their economic situations, the credit union said in a press release.
Membership in the credit union is open to people who live, work, worship, go to school or have an interest in alleviating poverty in Wilmington.
For $5, members can open an account at the credit union and have access to other financial education programs provided by DCRAC.
"Having access to bank services and affordable credit is critical to helping families escape poverty," said Carney, who serves on the House Financial Services Committee. "Part of the challenge is encouraging those in the community to take advantage of the savings and smart money management opportunities that [credit unions] provide."
ST. LOUIS (3/20/12)--A small-business owner from St. Louis who participated in the Small Business Hike the Hill event in Washington, D.C., in February, wrote a letter to the editor of a local publication about how a credit union came through for him when he needed a loan-interest-rate reduction, and his bank said no.
He said that member business loans (MBLs) should be about jobs, not politics.
"I went to Washington, D.C. to tell my story," wrote Bob Becker, owner of Becker Contracting Inc., in a letter to the St. Loius Business Journal. "A few years ago, I went to my bank to ask for a reduction in my loan rate, and was turned down flat. They handled all of my accounts, but wouldn't work with me on one loan. So I turned to the credit union that had helped me purchase my wife's wedding ring 30 years ago.
"The credit union lowered the rates of my loan, which meant more money for running my business," he continued. "As a small-business owner, every dollar counts. Having access to funds means I can take advantage of opportunities. Without that access, those opportunities would be shut off, and that means less money put back into the community."
Becker goes on to say that credit unions would like to lend more to small businesses, but they can't because of the MBL cap.
The Credit Union National Association (CUNA) and credit unions are urging 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.
"The only group that opposes this legislation is the banks," Becker wrote. "I heard that some members of Congress didn't want to choose between banks and credit unions. But this bill isn't about credit unions. It isn't about banks. This is about helping small-business owners like me, who want to be able to grow their businesses and hire more people."
He concluded by urging Congress to listen to credit union leaders who are in Washington, D.C., this week for CUNA's Governmental Affairs Conference and to take action to help small-business owners.
YUMA, Ariz. (3/19/12)--A Yuma, Ariz., real estate developer is appealing a federal judge's dismissal of his breach of contract lawsuit against Yuma-based AEA FCU, which is under conservatorship by the National Credit Union Administration (NCUA).
An attorney for Todd Burch, who is seeking $34 million from the credit union, filed a motion to appeal the lower court's decision to the U.S. Court of Appeals for the Ninth Circuit (YumaSun.com March 15).
On March 6, U.S. District Judge Frederick Martone had denied the suit, rejecting Burch's bid to prevent NCUA from selling his real estate projects and letting stand AEA's counterclaims to receive money the credit union says is owed by Burch.
Burch, who is developer of a housing subdivision and an assisted-living condominium, filed a lawsuit on Sept. 22, alleging fraudulent misrepresentation , breach of contract and defamation. It alleged that AEA FCU cut off his line of credit and sued him to collect on his loan even though the credit union's loan officer promised it would continue to fund his projects. Burch filed for bankruptcy in the spring of 2010 with an estimated debt of $17.5 million, said the Sun.
William Liddle, the credit union's former vice president of lending, recently pleaded guilty to more than 50 counts of fraud related to his role in an alleged $50 million kickback scheme that led to loan portfolio problems that prompted the conservatorship by NCUA. Another real estate developer, Frank Ruiz, pleaded guilty in June to one count of conspiracy and one count of transactional money laundering for receiving millions of dollars in fraudulent business loans from Little (Yuma Sun March 12).
AEA FCU, with $229 million in assets, was placed into conservatorship in December 2010 after the fraudulent loans were discovered. Last August, NCUA said the credit union's financial situation was improving (News Now Aug. 3).
MADISON, Wis. (3/19/12)--Five volunteers will serve on the 2012 CUNA Experience Learning Live! (ELL) Advisory Committee, announced the Credit Union National Association (CUNA).
They will help shape the direction and content of CUNA Experience Learning Live! held Sept. 30-Oct. 3 in Denver. The conference, which meets annually, is designed for training professionals to gather ideas to improve the educational cultures at their credit union. Participants will learn how to maximize staff energy, strengthen volunteer dedication and increase the overall knowledge of their members.
The new Advisory Committee members are:
- Tobi Collins, Educators CU, Racine, Wis.;
- Kristyn Dix, Kemba CU, Cincinnati;
- Melissa Harper, Magnolia FCU, Jackson, Miss.;
- Meggy Kutz, Summit CU, Madison, Wis.; and
- Shani Vance, SunCoast Schools FCU, Tampa, Fla.
Committee members will assist in the planning and staging of CUNA Experience Learning Live! Their duties include developing relevant topics for credit union training and human resource professionals; identifying speakers that excel at delivering the confirmed topics; providing feedback and suggestions for potential networking and other benefits for attendees; encouraging credit union training professionals to attend and network; and serving as conference hosts by welcoming attendees, introducing speakers and facilitating communication during the conference.
Advisory Committee members receive complimentary registration to the conference. Committee members were chosen from a large pool of qualified applicants across the nation. Applications for the 2013 ELL Advisory Committee can be found at the link.
CLEVELAND, Ohio (3/19/12)--A Kirtland, Ohio, man is the latest person to be sentenced for his role in the $2.5 million fraud ring that brought down St. Paul Croatian FCU in one of the nation's largest credit union failures in 2010.
John Cendol Jr., 48, was sentenced Thursday by U.S. District Judge Christopher A. Boyko in Cleveland to two weeks in prison and ordered to pay $260,000 in joint restitution to the Eastlake, Ohio-based credit union. He had pleaded guilty to one count of bank fraud. He was one of several defendants charged with allowing illegal transfers into their loan accounts at the credit union.
At least 17 people have been charged in the fraud. Court records indicated that more than 1,000 fraudulent loans totaling more than $70 million were made to 300 account holders between 2000 and 2010 (News Now
Feb. 28 and May 17). The loans were instrumental in St. Paul Croatian being placed into conservatorship on April 23, 2010 and closed the following May 1. The failure cost the National Credit Union Share Insurance Fund $170 million.
Two key figures in the case are awaiting sentencing: They are Anthony Raguz, 51, former CEO of the defunct credit union, who pleaded guilty to issuing the loans and accept more than $500,000 in bribes, kickbacks and gifts from those who obtained the loans (News Now
March 8), and Koljo Nikolovski, 49, of both Eastlake and Skopje, Macedonia, who pleaded guilty to 18 counts of bribery, bank fraud and money laundering. Raguz is scheduled for sentencing on June 11, and Nikolovski's sentencing has been set for April 23.
Eddy Zai, 43, a Cleveland area financier, was charged in February with 34 counts of obtaining fraudulent loans, making him the single largest recipient of the alleged fraudulent loans (News Now
Others charged included:
- Rose Ann Nikolovski, 48, Eastlake;
- Marko Nikoli, 33, Eastlake;
- Ruth Cendol, 55 of Kirtland;
- Daniel Kocher, 72, of Euclid;
- Edward Watral, 37, Creston;
- Jennifer Cerjan, 33, Orrville;
- Arben Alia, 34, of Eastlake;
- Ilir Marku, 34, Willowick, Ohio;
- Vaso Shani, 36, Eastlake;
- Alban Sulkaj, 35, Clinton Township, Mich.;
- Zoge Ahmetaj, 68, Eastlake;
- Oerim Ahmetaj, 74, Eastlake; and
- Skender Demiri, 36, North Ridgeville, Ohio (News Now March 4 and May 17).
RALEIGH, N.C. (3/19/12)--Nearly a third of North Carolina's 48 state-chartered credit unions say they may switch to a federal charter if a dispute about the disclosure of CAMEL scores and the use of dual exams between state and federal regulators is not resolved, the North Carolina Credit Union League revealed Wednesday.
The league surveyed all but two of the 48 state-chartered credit unions in the state on the impact dual exams likely would have.
These most recent developments occurred after the Raleigh, N.C.-based State Employees' CU (SECU) received authorization from its state regulator and disclosed its state-issued CAMEL score (News Now
The National Credit Union Administration (NCUA) has disputed the disclosure of the credit union's CAMEL rating, for several reasons, saying the state provides the rating to the NCUA, which treats it as confidential information. The NCUA discontinued its coordinated examinations with the state regulator, the North Carolina Credit Union Division (NCCUD), opting instead to begin separate exams for state-chartered federally insured credit unions in the state. In other states, the NCUA routinely conducts joint safety and soundness examinations with the state regulator.
A Dec. 6 letter from NCUA to NCCUD alleges that the North Carolina Credit Union Administrator announced that NCUA had initiated the process of termination of National Credit Union Share Insurance Fund insurance of SECU share accounts, and that confidential exam documents had been leaked.
League survey results indicate that 30% of the 39 credit unions responding are "very" or "somewhat" likely to convert to a federal charter if the situation is not resolved and the two- examination structure is maintained in future years. An additional 38% of respondents say they are undecided about a potential charter switch, and less than a third (31%) respond that it is "unlikely" they will convert.
The league also asked credit unions if they planned to switch charters if the three-month old dispute was resolved prior to 2013. More than 80% responded they were "very" or "somewhat" unlikely to convert if the two agencies began working together again.
"The results speak for themselves," noted NCCUL President/CEO John Radebaugh. "Credit unions appreciate the value of the dual charter, but they do not appreciate the regulatory and operational burden they've been placed under. Clearly, credit unions want a resolution to this situation, and they are willing to reconsider their chartering status if the regulators can't find a way to resolve their differences."
The survey also asked credit unions about the operational impacts and regulatory burden an added in-person examination presented.
Taken together, the league said the survey results reveal some troubling conclusions:
- Left unresolved, the dual exam structure threatens to further erode the value of the state charter in North Carolina.
- Conflicting examination findings and the lack of a working relationship between NCUA and NCCUD have further complicated an already complex operational environment.
- The credit unions with the fewest staff resources and the greatest day-to-day operational challenges have been hit the hardest.
- The dual examination structure continues to place further regulatory and operational burdens on credit unions.
The CAMEL rating system is NCUA's method of evaluating the health of credit unions. The rating, adopted by the NCUA in 1987, is based upon five critical elements of a credit union's operations: (C) Capital, (A) Asset quality, (M) Management, (E) Earnings and (L) Asset- liability management.
To see the North Carolina league survey results, use the link.
- WHEELING, W. Va. (3/19/12)--A man convicted of robbing First Choice American Community FCU, Elm Grove, W. Va., and banks in two other states was sentenced to 12 years and seven months in prison by a federal judge last week (Associated Press March 14). Jeremy T. Dugan pleaded guilty to robbing First Choice American Community FCU; First Commonwealth Bank, Oakdale, Pa.; and PNC Bank, Perryville, Md. Dugan also will forfeit about $8,300 stolen from the banks. After he completes his sentence, he will spend three years on supervised release …
- AKRON, Ohio (3/19/12)--A Columbus, Ohio, man was sentenced last week to 20 years in prison for the armed robbery of an Akron credit union and sandwich shop last year (Akron Beacon Journal March 13). Phillip J. Bloodworth and an accomplice allegedly attempted to rob Buckeye State CU two days after Bloodworth allegedly robbed Penn Station East Coast Subs Shop. Bloodworth was convicted of two counts of aggravated robbery, a gun specification and other weapons offenses. In the credit union robbery attempt, a security guard drew his gun and the suspects fled …
- BALTIMORE (3/19/12)--A Maryland man was sentenced to 13 years in prison for a crime spree in South Dakota last year that included the robbery of the Brookings, S.D., branch of Huron, S.D.-based Dakotaland FCU. Gary Allen Densmore, formerly of Glen Burnie, Md., had pleaded guilty to the robbery in May. He was sentenced in a Baltimore court to 157 months in prison--97 for three counts of bank robbery and 60 for violating a supervised release on previous conditions. The credit union was robbed on Feb. 14, 2011. Densmore was arrested on the following March 3 in a stolen car in Savage, Minn. The crime spree included robberies in Maryland, Wisconsin and Iowa in February and March 2011 (TheBrookingRegister.com March 15) …
- SEATTLE (3/19/12)--Salal CU, Seattle, announced that Russell Rosendal has been selected as its new president/CEO. Rosendal, formerly the credit union's chief financial officer (CFO), joined the credit union's staff in September 2009. Rosendal has more than 25 years' experience in the financial industry. He has served as executive vice president/CFO at both Cascade Bank in Everett and Foundation Bank in Bellevue, and as vice president of finance, planning and analysis for Washington Mutual before joining Salal. Since he joined the credit union, it has grown to $344 million in assets from $245 million. "Salal CU has a culture of risk awareness," said Rosenthal. "We do our research and our due diligence, and when we've established the best course of action, we move aggressively. Our members know their best interests guide our every move and decision," he added …
- RALEIGH, N.C. (3/19/12)--Phil Greer, senior vice president of loan administration at State Employees' CU (SECU) in Raleigh, N.C., died March 9 at the age of 63. Greer was with the $13.5 billion asset SECU for 32 years and was responsible for all lending functions there, said the North Carolina Credit Union League in its Weekly Update (March 16). Greer served for nine years as a member of the Executive Committee for the CUNA Lending Council, including two years as chairman. He also served as a member of the Credit Union National Association governmental affairs subcommittee for consumer protection. Greer was a past member of the Fannie Mae and Freddie Mac Credit Union Advisory Boards. He is survived by his wife, two daughters and five grandchildren …
NAPERVILLE, Ill. (3/19/12)--Fifteen credit union staff will crash the Illinois Credit Union League's (ICUL) 82nd Annual Convention next month.
The initiative is part of an effort to attract young credit union professionals under age 30 to the event, under the guise of The Cooperative Trust (formerly The Crash Network), a grassroots organization comprising hundreds of young credit union professionals.
The idea behind Crash Illinois, like other Crash events, is to create a low-cost event within and alongside major credit union conferences, such as ICUL's Convention.
This year's credit union "Crashers" are:
- Kevin Quinn, NuMark CU, Joliet;
- Jessica Hamling, Blackhawk Area CU, Savanna;
- Elizabeth Schroeder, Kaskaskia Valley Community CU, Centralia;
- Scott Muniz, Maroon Financial CU, Chicago;
- Mallory Eckstein, Members Choice CU, Peoria;
- Ashley Wilson, Staley CU, Decatur;
- Alex Swigert, SJH EFCU, Springfield;
- Jon Norman, Alton Bell Community CU, Alton;
- Serina Wolber, Cornerstone CU, Freeport; and
- Amber Wilson, Members First Community CU, Quincy.
Five crashers were from Baxter CU, Vernon Hills:
- Jorge Hurtado;
- Lidya Garcia;
- Jordan Koczot;
- Shawna Becker; and
- Taylor Murray.
Sponsored by ICUL and CUNA Mutual Group, Crash Illinois will help young credit union professionals attend the full convention and additional mentor sessions with industry thought leaders each day and build relationships with other young credit union professionals.
To be held April 26-28, ICUL's 82nd Annual Convention will tout many changes and highlights. The theme is "Get in the Game!"
Brent Dixon, young adult adviser at the Filene Research Institute, is the founder of The Crash Network, which has evolved into The Cooperative Trust. This effort began informally as a revolutionary conference for young professionals under age 30 that met around other conferences since 2012.
At the ICUL Convention, Dixon will present two sessions for attendees: "Attracting and Retaining Younger Members" and "Design Thinking: A Human Centered Approach to Innovation."
Connie Payton, wife of the late football legend Walter Payton, will keynote with "Family Values, Teambuilding, Embracing Life."
MADISON, Wis. (3/19/12)--CUNA Mutual Group has appointed Thomas C. Godlasky--who has a 31-year tenure as an insurance executive--to its board of directors.
Godlasky most recently served as CEO of Aviva North America, where he conducted oversight of an operation exceeding $350 million in revenue and more than 5,000 employees. His responsibilities included the strategic management and leadership for the second largest property and casualty company (Aviva Canada) and the second-largest life and annuity company (Aviva USA) within Aviva.
Some of Godlasky's most notable achievements as CEO include post-acquisition integration of AmerUs Group into Aviva plc, creating a pan-regional headquarters for the North American businesses and doubling the size of the company's U.S. business within two years.
Other CUNA Mutual Group board members include:
- Alan Peppers (chairman), president/CEO, Westerra CU, Denver;
- Joseph J. Gasper, retired president/chief operating officer, Nationwide Insurance;
- Loretta Burd, president/CEO, Centra CU, Columbus, Ind.;
- Eldon Arnold, retired president/CEO, CEFCU, Peoria, Ill.;
- Bert J. Hash Jr., president/CEO, Municipal Employees CU of Baltimore, Inc.;
- Farouk D.G. Wang, retired director, Buildings & Grounds Management, University of Hawaii;
- Larry T. Wilson, president/CEO, Coastal FCU, Raleigh, N.C.;
- James W. Zilinski, retired chairman, president/CEO, Berkshire Life Insurance Co.;
- Robert J. Marzec, retired audit partner, PricewaterhouseCoopers;
- M. Victoria Wood Miller, retired executive vice president and chief financial officer, Turner Broadcasting System Inc.;
- Randy M. Smith, CEO, Randolph-Brooks FCU, Live Oak, Texas; and
- Jeff Post, president/CEO, CUNA Mutual Group.
State Rep. Martin Heinrich (D-N.M.), right, chats with White Sands FCU CEO William Jacobs, left, and Sandia Area FCU Vice President of Marketing Jeff Cain at a town hall for candidates for a U.S Senate seat and hosted by the Credit Union Association of New Mexico. (Photo provided by the Credit Union Association of New Mexico)
ALBUQUERQUE, N.M. (3/19/12)--New Mexico credit union representatives from around the state met with candidates vying for a U.S. Senate seat at a town hall hosted by the Credit Union Association of New Mexico Wednesday.
At the town hall were State Rep. Martin Heinrich (D-1), former State Rep. Heather Wilson (R), and state auditor Hector Balderas (D). They are running for the seat of Jeff Bingaman (D), retiring senior U.S. senator from New Mexico.
About 25 people, including credit union board members, CEOs and staff, listened to presentations from the candidates and asked questions.
Among the topics they addressed were the Dodd-Frank Act, member business lending and taxation of credit unions.
The candidates discussed their views and records on issues affecting credit unions and their members. All three said they are long-time credit union members.
This was the first step in the candidates' quest to gain the credit union movement's endorsement in the race.
PANAMA CITY, Fla. (3/19/12)--Cornelia (McCall) Downs, retired CEO of Panama City, Fla.-based NCSC FCU (now
Innovations FCU), died Wednesday. She was 78.
Downs was CEO of the credit union for about 34 years, retiring in 1996. She served on the board of directors for the Gulf Coast Chapter of Credit Unions and held numerous offices, including president of the chapter.
Downs served on the Florida Credit Union League (now the League of Southeastern Credit Unions) board of directors and became the league's first woman chairman. She served credit unions for many years and held various positions on the Credit Union National Association Board.
She is survived by three children, six grandchildren, and two great-grandchildren. Funeral services were held Saturday.
HARRISBURG, Pa. (3/19/12)--While many of the nation's credit unions are in Washington, D.C., to meet with their congressional representatives this week, credit unions in Pennsylvania have been busy pressing their key issues with their congressmen on the home front in two recent meetings.
U.S. Rep. Mike Fitzpatrick (R-Pa.), center, poses with Pennsylvania credit union leaders and hosts during a meeting hosted by American Heritage FCU, Philadelphia, Wednesday. (Photo provided by the Pennsylvania Credit Union Association)
American Heritage FCU, Philadelphia, hosted a meeting at its headquarters Wednesday for U.S. Rep. Mike Fitzpatrick (R-Pa.), who represents the 8th District, said the Pennsylvania Credit Union Association (Life is a Highway
March 15). Representatives of six credit unions and several related organizations attended. Fitzpatrick and the group discussed issues credit unions are facing including:
- Member business loans;
- Supplemental capital;
- Growing regulatory burden; and
- Consumer Financial Protection Bureau oversight.
Fitzpatrick also fielded questions from attendees on rising healthcare costs, the presidential election, concerns on the role of the government, and assisting small business growth.
Seven credit unions in Wilke-Barre, Pa., met Thursday with their new congressman, U.S. Rep. Tim Holden (D-Pa.), from the 17th District (Life is a Highway
March 16). The introductory meeting allowed Holden to learn more about credit unions in the region and their legislative and regulatory concerns, said PCUA. He answered questions from 30 people attending.
When asked by PCUA President/CEO Jim McCormack why he liked credit unions, Holden answered, "Credit unions are all I've known as a kid when getting my first auto loan. They have supported people when they couldn't access credit." Holden added that "credit unions give people a chance when many financial institutions, especially today, have used regulatory excuses not to lend or reach out to better individuals' situations."
McCormack said Holden has supported credit unions since H.R. 1151, the Credit Union Membership Access Act; supports credit unions on interchange concerns; and is a co-sponsor of member business lending legislation.
The Credit Union National Association (CUNA) and credit unions are pressing Congress to lift the cap on credit unions' member business loans to 27.5% from 12.25%. Lifting the MBL cap would inject $13 billion into the economy for new small business loans and help create 140,000 new jobs, without cost to the taxpayer, says CUNA.
New Jersey State Sen. Bob Singer (R) discussed municipal deposits in credit unions at Tuesday's South-Central Chapter of Credit Unions meeting. (Photo provided by the New Jersey Credit Union League)
EATONTOWN, N.J. (3/19/12)--New Jersey State Sen. Bob Singer told a group of credit unions last week that allowing credit unions to receive municipal deposits was the "right thing to do."
Singer, a Republican who spoke Tuesday at the South-Central Chapter of Credit Unions, played a major role in passing state legislation that allows credit unions to enter the $14 billion municipal deposits market, said the New Jersey Credit Union League (The Daily Exchange
"What we did for credit unions last year was the right thing to do," Singer told the group. "Hopefully credit unions can drive more competition and ultimately help taxpayers."
His key point to credit unions was to make sure they get themselves listed as an eligible depository with local public entities. "You should do it at the organizational meeting, but if they tell you they can't add you later, they are wrong. They can add you later," he said.
Singer noted that credit unions should be strategic in evaluating public funds opportunities and understand what they're getting into. Many municipalities have policies to put some public funds with any institutions based within their borders, so credit unions should be particularly active in their own municipalities, he advised.
New Jersey recently passed a law enabling the state's municipalities to make public funds deposits into credit unions. The measure was supported by the league.
SANTA ROSA, Calif. (3/16/12)--The mass migration toward using mobile devices such as tablets and smartphones to access corporate data, social networking and cloud computing is setting off alarms for security and risk management, and information technology (IT) executives concerned about security. One credit union is among the early adopters of a holistic approach to keeping data secure.
As smartphones and tablets become the new security "battleground," Redwood CU, a nearly $2 billion asset credit union based in Santa Rosa, Calif., is addressing the situation by incorporating end-to-end, or layered, defense so that all key elements of its IT infrastructure are protected against a variety of threats, reports Baseline, a publication for the IT industry (March 13).
For this credit union, a multilayered defense works. "We have been fortunate to not have had any loss or issues as a result of an attack," Tony Hildesheim, senior vice president of IT at Redwood, told Baseline.
Redwood's first layer consists of dual firewalls with multiple DMZs or perimeter networks that segment traffic, coupled with virtual LANs on switches and a segmented internet provider (IP) network, said the publication.
Its second layer includes a set of intrusion detection systems (IDS)and intrusion prevention systems (IPS) that watch all inbound, outbound and cross-network traffic, said Baseline. Redwood also employs an e-mail scanning and spam filtering tool to further reduce threats, as well as a virus protection on all its PCs and servers.
Redwood has aggressive policies on the network, with network restrictions to almost all files and directories on an "as needed" basis. For even more protection, it has a set of controls that includes network monitoring as well as regular checks and audits.
There's more: Its security framework includes central software management; patch management; encrypted hard drives; Internet access monitoring and limitations; and segmented, monitored and controlled network storage.
As a result it has stopped attacks such as Trojans and viruses, usually at the IDS/IPS device, before they attack a PC or other device, said Hildesheim. The credit union tries not to draw attention and, determined not to be an easy target, it aggressively deals with phishing and other attacks.
Redwood also provides security training for employees. It practices standard password rotation or employees, tests for social engineering, and performs penetration and controls testing. Redwood also educates members with awareness campaigns to help them protect their privacy.
Hildesheim noted the credit union sees about 40 attacks each month but all are averted, largely due to e-mail scanning tools and the local scanning and IDS/IPS that augment the firewall. It also experiences roughly 100 "suspicious hits" and about 20 "validated" hits a month, all averted by firewalls, patching and security procedures.
Redwood has suffered no financial or member losses because of an intrusion or attack on its systems, said Wade Painter, the credit union's chief financial officer.
TALLAHASSEE, Fla. (3/16/12)--For the second time in seven months, the Florida Office of Financial Regulation (OFR) will be getting a new commissioner. Tom Grady told OFR March 6 he has resigned to become interim president of Citizens Property Insurance Corp.
Grady started his new job Monday. Citizens Property insures nearly one in four Floridians. The company saw a 27% surge in consumer complaints in 2011 when it reduced coverage for policyholders and raised rates (South Florida Sun-Sentinel March 6).
"The league has a good working relationship with OFR," Patrick La Pine, president/CEO of the League of Southeastern Credit Unions (LSCU), told News Now. "With Tom Grady just coming on board in August, we had one brief introductory meeting with him. We intend to reach out to [staff at] the governor's office in hopes we can assist them in their search for a new commissioner."
An interim director is expected to be announced Tuesday, LSCU added.
The Florida OFR has three divisions and one bureau. Among its duties, OFR regulates credit unions and banks.
- SOMERSET, N.J. (3/16/12)--Credit Union of New Jersey, XCEL FCU and Affinity FCU are on the NJBIZ Magazine list of Best Places to Work in New Jersey in 2012. Credit Union of New Jersey, Ewing, $298 million in assets, and XCEL FCU, Secaucus, $134 million in assets, made the list in the small/medium company category, while $2.1 billion asset Affinity FCU, Basking Ridge, was included in the large company category. Both EXCEL and Affinity were also on the 2011 list. The program selects companies based on dedication to employees' growth and quality of life (The Daily Exchange March 14) …
- LATHRUP VILLAGE, Mich. (3/16/12)--Michigan First CU is seeking its second "spokester" for the Young & Free Michigan program that aims to appeal to young adults. The winner of the annual search contest held by the $600 million asset credit union receives a $30,000 salary, an Apple MacBook pro, an HD video camera and a smartphone. In addition, the winner gains the use of the Young and Free Michigan car for a year, including gas and insurance. Entrants must be between ages 18 and 25 and submit an entertaining blog post on a financial topic by noon on April 16. The "spokester" uses social media, videos and participation in special events to engage young adults in becoming financially fit …
- WICHITA, Kansas (3/16/12)--A 900-square-foot café that offers free wireless Internet and a separate drive-up window will help create a fresh experience for members who use Mid American CU's new 4,000-square-foot branch. The $168 million asset credit union plans to have employees greet branch visitors at the door and then walk them to stand-alone "dialogue" stations, which take the place of standard teller stations for transactions and cash (The Wichita Eagle March 13). Scheduled to open in November, the new building will be the credit union's only branch on Wichita's east side …
- PEABODY, Mass. (3/16/12)--Luso American CU will distribute 25% of its 2011 net income, or $93,815, as bonus dividends to members. In a news release, the $71.3 million asset credit union described the dividend as a way to thank members for a successful year. Individual payment amounts are based on member dividends earned on regular share accounts through year-end 2011 …
SALT LAKE CITY (3/16/12)--Pocahy Family CU in Pocatello, Idaho, will merge with Mountain America CU, West Jordan, Utah, on April 1.
Pocahy Family CU, which has $15.3 million in assets, approached $3 billion asset Mountain America about the merger in late 2011. Members, employees and the board approved the merger in a recent vote.
Pocahy's 2,250 members can convert to Mountain America accounts before the merger is finalized by visiting Mountain America's Idaho branches in Chubbuck or Idaho Falls, the credit unions said.
A Mountain America release cited opportunities to grow in eastern Idaho and additional services for Pocahy Family CU members as merger benefits.
NEW YORK (3/16/12)--The No. 1 consumer tip for college students seeking additional financial assistance is to "turn to a credit union," says the CBS MoneyWatch website Thursday in an article that lists seven things consumers need to know about private students loans.
"Credit unions, which are newer players in the private student loan world, almost always provide better interest rates," the article said. "Ironically most people stick with the well-known lenders even though their rates are typically higher. You can look for college loans at credit unions through cuStudentLoans."
cuStudentLoans is powered by CUNA Strategic Services provider Fynanz, which connects students in need of a private student loan with a network of credit unions. Use the link.
CBS MoneyWatch also urges consumers to check for colleges and universities that have their own credit union, and then lists some that do.
To read the article, use the link.
MADISON, Wis. (3/16/12)--Kim Wall, Anne Legg and John Godwin were honored for their credit union marketing and business development achievements during a ceremony at the CUNA Marketing and Business Development Council (CMNDC) Conference, March 7-10 in New Orleans.
Honored by the CUNA Marketing and Business Development Council at its conference in New Orleans for their achievements, were, from left: Anne Legg, vice president marketing, Cabrillo CU, San Diego; John Godwin, vice president business development/strategic alliance, MECU of Baltimore, Inc; and Kim Wall, community development director, Georgia United CU, Duluth, Ga. (Photo provided by CUNA)
Wall, community development director for Georgia United CU in Duluth, Ga., was named the 2012 Hall of Fame inductee. She has worked at Georgia United CU, formerly Georgia FCU, for 29 years. There she directs and oversees the credit union's public relations, community development, and media and government relations.
During her tenure, Wall helped craft the credit union's brand image from a small teacher's credit union to a recognized leader among credit unions in the Southeast. In addition to being a co-founder and executive committee member of the CUNA Marketing and Business Development Council, she has won several industry awards.
Legg, vice president marketing for Cabrillo CU in San Diego, Calif., won the Marketing Professional of the Year Award. She has worked in the credit union industry for 17 years, the last 12 at Cabrillo CU. While at Cabrillo, Legg has participated in two mergers, developed a new credit union brand, implemented quality programs, created a nearly virtual auto dealership, and has consistently grown loans year after year.
Legg also has been active in the credit union industry, serving on the board for the Marketing Association of Credit Unions; as a member of the California and Nevada Credit Union League Public Advocacy Committee; and on the CUNA Marketing and Business Development Council Executive Committee for eight years.
Godwin, vice president business development/strategic alliances for MECU of Baltimore Inc., was presented with the Business Development Professional of the Year Award. He has worked in the credit union industry for 16 years, with the last 11 being at MECU of Baltimore Inc. There he develops and implements strategies for new select employee group acquisition and activity, compiles strategic and business plans and strategic initiatives for the credit union, identifies merger candidates and oversees the merger process.
An article on the winners and their achievements will be in the May 2012 issue of Credit Union Magazine
For more information, use the links.
MARLBOROUGH, Mass. (3/16/12)--Massachusetts credit unions attending a joint Marketers Network and Business Development Network meeting March 6 in Marlborough, Mass., explored the cooperative advantage, according to the Massachusetts Credit Union League.
John Reske, vice president of marketing at the UMassFive College FCU, a $351 million asset credit union in Hadley, Mass., and Erbin Crowell, executive director of the Neighboring Food Co-op Association, told about their activities in the cooperative business community in Western Massachusetts and nationally (E-Weekly March 14).
One reason the United Nations has designated 2012 as International Year of the Cooperative is because cooperative businesses weathered the recent economic collapse far better than stock-owned companies, said Crowell. Cooperative ownership helped preserve billions of dollars in wealth during a period when money was disappearing from stock companies, said Crowell.
Reske told attendees how UMassFive has embraced its identity as a cooperative financial institution and how that move has benefited the credit union. Benefits included bringing new, loyal members into the credit union through partnerships with cooperatives, successful product enhancements built around cooperative principles, and increased message and product penetration among existing members because of the credit union's cooperative "brand."
Consumers are now more than ready to hear about a financial institution that is cooperatively owned and operated for the benefit of the consumer, Reske said.
The group discussed opportunities and most participants indicated they would immediately look into identifying cooperative businesses in their area and see if they would offer credit union membership to their members, said the league.
FARMERS BRANCH, Texas (3/16/12)--Texas credit unions closed out 2011 in strong form, reported the Texas Credit Union League in its fourth quarter 2011 Texas Profile.
Membership in Texas credit unions jumped to more than 7.7 million from 7.5 million. "Grassroots movements like Bank Transfer Day and International Year of Cooperatives have undoubtedly influenced consumers to take a second look at credit unions," the league said in its newsletter, LoneStar Leaguer (March 14).
Texas credit unions also saw increases in assets, loans and savings during 2011, and the percentage of credit unions to see positive returns on assets rose to 80% in 2011 from 57.8% the year before. Nationally, the percentage is at 76.3%, said the league.
The percentage of the state's credit unions reporting a 7% or better capital ratio also rose, to 95.3% from 94.5%. Delinquencies, charge-offs and member bankruptcies remained low for Texas credit unions, said the league.
NEW YORK (3/16/12)--As part of its working papers series, the Federal Reserve Bank of San Francisco has released a new study by the National Federation of Community Development Credit Unions that explores the role played by community development financial institutions (CDFI) and the community development credit unions (CDCU).
Written by federation President/CEO Cliff Rosenthal, "Credit Unions, Community Development Finance and the Great Recession" offers a detailed history of the role of CDCUs within the CDFI movement; shows how federal investments helped preserve and expand CDCU services during the Great Recession; and recommends ways to strengthen CDFI depository institutions through best-practice models and collaborations.
The paper outlined both significant developments and challenges for CDFIs, including:
The CDFI movement has grown rapidly. By the end of 1997, the recently established CDFI Fund counted 190 certified institutions; by the end of fiscal year 2000, that number had more than doubled to 415.3. By August 2011, the CDFI Fund counted 962 certified institutions. Along with the numerical expansion of the field, many individual CDFIs have grown and matured, adding significant capacity and a new sense of possibility to the field.
A new generation of CDFIs and CDFI leaders is emerging. Many new CDFIs have little connection to the historic roots of the CDFI movement. They represent a new source of energy and ideas, but a number of veteran practitioners have begun to debate whether the CDFI brand has been diluted by rapid expansion.
CDFIs are the focus of federal initiatives beyond those of the CDFI Fund. CDFIs were part of the Community Development Capital Initiative (CDCI) and the $30-billion Small Business Lending Fund, created by the Small Business Jobs Act of 2010, which carved out a window for CDFIs and established the unprecedented CDFI Bond guarantee program now under development.
CDFI certification has become a valued brand beyond the federal CDFI fund. The fund's confirmation now is required for a growing number of federal and state programs, such as those of the Small Business Administration, the Federal Home Loan Bank System and the Empire State Development Corp.'s CDFI Program in New York.
The CDFI movement has--so far--survived a "stress test." The recent recession has put great strains on the balance sheets of many CDFIs. There have been some losses, but the movement has survived, demonstrating resilience, the paper said.
The paper also makes several recommendations, including:
Increase investment in CDFI depositories. CDFI credit unions and banks offer leverage, sustainability and impact in ways that loan funds cannot, according to the paper. It calls for a re-examination of fund application forms, scoring, review procedures, and allocation formulas to take into account the characteristics of each category of applicant to the CDFI Fund.
Improve and expedite certification procedures. CDFI certification is the most important credential in the community development field and a prerequisite for accessing various funding sources. More CDFIs will bring the CDFI Fund increased visibility and support in a time of federal budget cutbacks, the paper said.
Invest strategically to build the CDFI field, through new structures and new platforms. The fund should explore supporting hybrid or complex institutions that combine the strengths of CDFI loan funds and CDFI depositories, the paper said.
Rosenthal announced earlier this month that after 32 years with the federation he will leave May 4 to take a job with the federal government. On Thursday, the federation confirmed Rosenthal would move to the Consumer Financial Protection Bureau to become the bureau's assistant director of its Office of Financial Empowerment.
To download the paper, use the link.
CINCINNATI and CLEVES, Ohio (3/16/12)--A small Ohio credit union that had difficulty attracting a new CEO has entered a management agreement with the credit union service organization of another, larger credit union in the state.
Presidents FCU, an $11 million asset credit union based in Cleves, near Cincinnati, entered the agreement with Emery Financial Services, a wholly owned subsidiary of $140.9 million asset, Cincinnati-based Emery FCU. The CUSO has assumed all managerial responsibilities for Presidents FCU, said the two credit unions.
"We had great difficulty finding a new CEO after the position was vacated in August of 2011," said John Neyer, Presidents' board chairman. "The right candidate eluded us, so our options were either to merge with another credit union or enter into a management agreement." He called the agreement "an ideal solution to our issue, as the company now serves as our CEO while we continue to exist and function as Presidents FCU."
The two credit unions have been in a shared-branching agreement for more than five years.
Under the contract, Presidents' four employees will remain in their current positions with Emery Financial Services providing all additional staffing, information technology and back office support. The two already have worked together on Presidents' financial reporting, compliance requirements, data processing and lending services.
LOS ANGELES (3/15/12)--A hearing has been set for today in the lawsuit filed by the National Credit Union Administration (NCUA) against Goldman Sachs & Co., one of the banks it is suing for selling residential mortgage backed securities (RMBS) that caused losses to U.S. Central FCU and Western Corporate FCU.
The hearing will be in the U.S. District Court for the Central District of California--Western Division, Los Angeles, the same court in which NCUA has brought suit against RBS Securities and against Wes Corp officials related to losses stemming from RMBS.
That court has tentatively ruled in favor of RBS Securities in a similar case, but NCUA in its court documents said its allegations in the Goldman case are stronger than those upheld in other RMBS cases in other courts.
In the lawsuits, NCUA maintains that loan originators "systemically disregarded their stated underwriting standards and routinely made loans where no or insufficient compensating factors existed."
NCUA has sued five banks seeking to recoup $2 billion lost by the corporates when they were sold the RMBS. In addition to the Goldman Sachs case, NCUA has filed two suits against RBS Securities, one against J.P. Morgan Chase, and one against Wells Fargo Securities LLC (formerly Wachovia Capital Markets LLC).
The agency, which is acting as liquidating agent for the failed corporates, also has settled three other other lawsuits. HSBC, which sold RMBS to five failed corporates, agreed to pay $5.25 million without admitting fault (News Now March 13). Last year the agency collected a combined $165.5 million after it settled its suits against Citigroup and Deutsche Bank, with neither bank admitting fault (News Now Feb. 14).
BROCKTON, Mass. (3/15/12)--Today is the deadline for members of HarborOne CU, Brockton, Mass., to weigh in on the credit union's plan to convert to a savings bank. Members must have their comments in by the end of the day, according to the credit union's website.
Directors of the nearly $1.9 billion asset credit union announced Feb. 16 that they were considering a possible charter conversion to a Massachusetts-chartered mutual cooperative bank. On Wednesday, after reviewing members' comments, the board of directors will consider adopting the plan.
The Credit Union National Association (CUNA) and the Massachusetts Credit Union League maintain that the credit union charter is the best option for members of a credit union and that any decision should ultimately be in the interests of the members (News Now Feb. 17).
HarborOne, in a notice on its website, said converting to a bank would provide more flexibility to expand its customer base; increase lending authority, particularly in business lending; and provide access to additional capital such as sale of stock, not currently available to credit unions.
It noted members would become depositors who would retain the same voting rights under its one-member, one-vote principle; the institution would not change fees or rates; directors would be compensated instead of volunteering; and it would pay federal and state income tax.
If the board decides Wednesday to pursue a conversion, it will file materials with the regulators for a review of conversion-related materials to be sent to members about the conversion plans. HarborOne cautioned members they would not receive materials until after the regulatory review, which can take months. After the review, the conversion proposal will be submitted to the membership for a vote after a notice period of at least 90 days.
QUEBEC CITY, Canada (3/15/12)--To celebrate International Women's Day last week, the Quebec International 2012 Summit of Cooperatives announced it will feature women ambassadors speaking at the Summit, Oct 8-11.
Innovative and creative in their management approach and in their strategies for promoting the cooperative business model, they offer a value-added perspective that will enrich the Summit.
Speakers confirmed for the 2012 Summit include:
- Kathy Bardswick, president/CEO, The Co-operators (Canada);
- Dame Pauline Miller, president, International Co-operative Alliance (Switzerland);
- Rachel Griffiths, co-founder, Reputation Consultancy (Great Britain);
- Geneva Guerin, director, Sustainability Solutions Group (Canada);
- Rebecca Kemble, president, U.S. Federation of Worker Cooperatives (U.S.);
- Monique F. Leroux, chair of the board, president/CEO, Desjardins Group (Canada);
- Judy Lipp, executive director, TREC Renewable Energy Co-op and TREC Education (Canada);
- Sylvia Okinlay-Paraguya, CEO, National Confederation of Cooperatives, (Philippines);
- Tracy Redies, president/CEO, Coast Capital Savings CU (Canada);
- Antoinette C. Roxas, youth sector representative, MSU-IIT Multi-Purpose Cooperative (Philippines);
- Robyn Shrader, CEO, National Cooperative Grocers Association, (U.S.); and
- Helene Simard, president/CEO, Conseil québécois de la coopération et de la mutualité (Canada).
For more information about the speakers, use the link.
In total, more than 130 speakers will share their expertise, accomplishments and vision for the future of the cooperative and mutualist model. They will discuss how the cooperative approach can solve the challenges presented by the major economic upheavals in the world.
LOS ANGELES, (3/15/12)--A federal judge in Los Angeles has rejected motions by Western Corporate FCU officials seeking payment of legal costs and indemnification from the National Credit Union Administration (NCUA) during the agency's lawsuit against them over the failure of WesCorp. But he is allowing the officials to amend their indemnification claim based on state law.
U.S. District Judge George H. Wu, in an opinion filed Monday, dismissed the counterclaims of the officials seeking to have NCUA pay their costs during the lawsuit, saying they must submit administrative claims with NCUA after their cases are concluded.
NCUA had argued that an advancement or reimbursement order "would directly interfere with the NCUA's exercise of its powers as a liquidating agency of WesCorp." The judge's ruling said that instead, the WesCorp officials "must follow the route of judicial review of the denial of their administrative claims for damages."
The agency had asserted the best WesCorp officials could get would be "the issuance of a certificate for claim in liquidation entitling [them] to a pro rata share of the liquidation assets available to the class of general creditors….Any judgment ordering payment of any fees to which the officer defendants might otherwise be entitled as damages would therefore run afoul of [U.S. Code] section 1787 (g) given the NCUA's role as liquidating agent of WesCorp," said the court document.
Wu wrote that "it would indeed appear that any relief this court might fashion actually ordering the NCUA to pay the officer defendants--whether by virtue of an 'advancement' or 'reimbursement' order or by way of declaratory relief determining that the officer defendants have a right to such payment--would 'restrain or affect' the NCUA's exercise of its powers."
The judge also denied that the WesCorp officers have a right to indemnification based on a California labor law provision, but is allowing them to amend their counterclaims by April 14 to add indemnification claims under the California corporate code. The WesCorp officials claimed that WesCorp's Policy 21 "maximum extent" provision transforms the provision for permissive indemnification under California law into a provision for mandatory indemnification.
However, NCUA argued that recently enacted regulation in section 701.33 of the Federal Credit Union Act "precludes any mandatory indemnification because it provides for discretionary expense payments and, even in that situation, requires that certain findings be made which have not yet been made." The defendants "have no right to indemnification or reimbursement of defense costs until the Court renders judgment in their favor on the NCUA's claims (or, presumably, unless and until the NCUA makes the necessary findings and exercises its discretion in the officer defendants' favor.)
"The only way in which the officer defendants' claim to indemnification rights would be ripe for adjudication now--albeit with the issuance of any relief delayed until later would be if they were correct in reading of Policy 21 that it effective requires indemnification regardless of whether they are the prevailing parties on the NCUA's claims against them…If they are incorrect in that view, their indemnification claim is not ripe because they have not yet prevailed," said the judge.
WesCorp was hard hit by losses related to mortgage-backed securities. NCUA's lawsuit had alleged that senior WesCorp executives were negligent in monitoring the investments of the corporate and that there was a breach of fiduciary duty and fraud related to investments that resulted in $6.8 million in portfolio losses (News Now Jan. 24). The executives filed counterclaims and affirmative defenses against NCUA, alleging the agency was aware of WesCorp's investment strategies and approved of and encouraged the strategies.
The former WesCorp executives named as defendants in the lawsuit are: CEO Bob Siravo; Chief Financial Officer Todd Lane; Chief Investment Officer Bob Burrell; Chief Risk Officer Timothy Sidley and Human Resources Director Thomas Swedberg. NCUA and Sidley entered into a settlement agreement last week.
LINTHICUM, Md. (3/15/12)--Anne Arundel County Employees FCU will merge into SECU of Maryland, the two credit unions announced Tuesday.
SECU, with $2.1 billion in assets and 246,257 members, is the second largest credit union in Maryland behind only Tower FCU, which has $2.24 billion in assets (Baltimore Business Journal March 14).
Anne Arundel County Employees FCU, based in Annapolis, Md., has $81.6 million in assets and 14,320 members.
The merger will give Anne Arundel members access to more services than they currently have, Rick Stoll, Anne Arundel, and Rod Staatz, SECU's CEO, said in a letter to members.
Anne Arundel has four branches, all in Anne Arundel County. SECU has 15 branches throughout the state. SECU also has ATM machines in 16 Mars supermarkets.
WASHINGTON (3/15/12)--A Credit Union National Association (CUNA) economist offered some analysis for Bloomberg Business Week about Tuesday's announcement by Federal Reserve Chairman Ben S. Bernanke that additional quantitative easing would be an option, even after he raised his assessment of the U.S. economic expansion.
The Federal Open Market Committee (FOMC), the Fed's policymaking body, met Tuesday and upgraded its outlook for growth, which diminished expectations that the Fed would start a third round of buying bonds, Bloomberg said.
However, the FOMC emphasized in a statement issued after the meeting that the unemployment rate is "elevated" and "significant downside risks" still exist.
Several analysts told Bloomberg that FOMC meetings in April and June would be a prime time for the Fed to take action if more fiscal stimulus is needed.
"They want to keep their powder dry in case they need to take further action later in the year," Bill Hampel, CUNA chief economist, told Bloomberg. "In case they need to do a QE3 [third round of quantitative easing], this is giving them leeway to do it if they think it's necessary later in the year."
To read the article, use the link.
MADISON, Wis. (3/15/12)--The National Credit Union Foundation (NCUF) and the Texas Credit Union Foundation have developed a new outreach initiative that offers credit unions an additional resource for National Financial Literacy Month in April.
"Credit Unions Support Financial Education: Leading the Way to Financial Freedom" is being piloted in California, Illinois, Louisiana, Nevada, New York, North Carolina, South Carolina and Texas by credit union foundations in each state.
To join the initiative, credit unions in participating states must commit to collecting pledges for supporting financial education and hold a "Financially Fit Day" event April 4, including fundraising among staff and members. Fundraising could be as simple as a jeans or casual day for staff, but additional ideas are included in a toolkit at financialeducation.coop, the website created for the new initiative, said NCUF. Also included on the website are pledge forms and other campaign resources, such as sample newsletter articles, a sample flyer and statement stuffer, and web buttons.
The purpose of the effort is two-fold:
- To raise awareness of credit unions' financial education activities and the significance of financial education; and
- To raise funds for NCUF and state credit union foundations in support of their financial education initiatives.
Donations from the new initiative will be split between NCUF and the state credit union foundation where the donation was made.
HERNDON, Va. (3/15/12)--Northwest FCU (NWFCU), based in Herndon, Va., has answered the question: "Guess What's Next on Webb?" after several weeks of placing teaser ads on billboards, postcards and in newspapers around its local community. It is opening a new credit union branch in Gainesville, Va.--and its location is 7500 Webb Drive.
Gainesville resident and contest winner Jim Aram, in front of the "What's on Webb" campaign sign at Northwest FCU's new branch in Gainesville, Va. (Photo provided by Northwest FCU)
The campaign was created to introduce the credit union to the Gainesville community and build excitement for the expansion, according to Gerrianne D. Burks, president/CEO of the $2 billion credit union.
"This is our third de novo Northern Virginia branch opening within three years and we wanted to do something out of the ordinary," Burks said. "Our campaign was designed to attract attention and the response has shown that we did."
NWFCU launched its What's on Webb campaign Nov. 1, inviting local residents to answer a series of clues, such as "Our mascot is a dog," and "We're 100,000 strong." With each clue, a winner was drawn from all entries to receive $250.
Nearly 400 participants sent in answers to the clues on the website, www.whatsonwebb.com, with more than half correctly solving the mystery.
Gainesville resident and NWFCU member Jim Aram was among the contest winners.
"I'm always curious when it looks like we're going to have a new neighbor," said Aram, who works near the new branch and saw the 'What's on Webb?' sign leaving his office each day. "Who wouldn't like to win $250? I visited the website hoping to gain insight and provide my educated guess as to who we'd be welcoming to the neighborhood. Several weeks later to my surprise, I received a call and I won. Thanks to Northwest FCU, and welcome to Gainesville."
NWFCU also invited residents to join Club Webb, the credit union's new member fan club, which offered T-shirts and other giveaways, along with special e-mail offers, to members. To date, Club Webb has attracted 150-plus members.
The Gainesville branch will open for business by April 1, with the grand opening planned for mid-May. NWFCU operates five other branches in surrounding communities, and serves more than 111,000 members.
RANCHO CUCAMONGA, Calif. (3/15/12)--CO-OP Financial Services has launched "Credit Unions Do," a consumer advertising campaign to promote credit union membership.
Campaign materials are free to all credit unions--regardless of their affiliation with CO-OP Financial Services--and can be customized by individual institutions.
The campaign is the next phase of the CO-OP's "Banks Don't Like You" consumer advertising CO-OP Financial Services initiated in November. Moving from "Banks Don't Like You," the new effort stresses "Credit Unions Do" wonderful work on behalf of their members.
"While credit unions have a huge opportunity right now to gain new members, many don't have the necessary resources to create the kind of high-end marketing materials that will get them noticed," said Caroline Lane, CO-OP Financial Services senior vice president of business development and marketing. "This integrated campaign will allow credit unions of all asset sizes to share in a unified brand message that highlights the benefits of switching to a credit union."
CO-OP Financial Services will display the campaign March 18-20 in booth 401 at the Credit Union National Association's Government Affairs Conference in Washington, D.C.
The campaign is humorously based on the trials and tribulations of earning a living, and features the tag line, "Making Money is Hard. But Putting It in the Right Place Doesn't Have to Be."
The ads can be customized to include an individual credit union's logo and Web address. Initially, materials will be offered in the form of print ads and Web banners.
"These ads are designed to educate a whole new generation of potential members about what 'Credit Unions Do'--from offering better rates and friendly member service to the convenience of a network of shared branches and surcharge-free ATMs," Lane said.
BALTIMORE, Md. (3/14/12)--Only 39% of investors between 21 and 50 years old are confident they have enough money for retirement. But most (63%) of this group have yet to develop a detailed financial plan for retirement, and many underestimate how long they will live in retirement, according to new research from T. Rowe Price.
This might be an opportunity for credit unions to provide financial education and tools to help their members in this age group think long-term about their finances after retirement, as well as savings and investment plans and individual retirement accounts (IRAs).
Of the investors surveyed who have a detailed plan, 58% say they believe they will have enough money to retire, said the survey, which focused on IRAs and the investing practices of Generation X (ages 35 to 50 for purposes of this research) and Generation Y (ages 21-34).
"This research underscores the fact that many more young investors need to get started planning for their retirement, even though the date may be decades away," said Christine Fahlund, senior financial planner for the Baltimore, Md.-based global investment management organization.
She noted the study also "demonstrates the important financial and psychological benefits of having a detailed savings and investment plan. Whether they do it on their own by using planning tools or by working with an adviser, the earlier investors begin saving, the more years their assets will be able to compound and potentially grow."
The survey looked at components a detailed plan might include. Of those who have a plan, 77% said it would target an anticipated monthly budget; 84% would have a specific monthly withdrawal strategy; and 78% would consider life expectancy and how long their savings might need to last.
Gen Xers and Yers said they expect to receive income from multiple sources. Most common are:
- 401(k)s or other workplace retirement plans, 74%;
- IRAs, 65%; and
- Non-retirement accounts such as checking, savings, stocks, bonds and mutual funds, 64%.
Sixty-three percent of investors aged 50 and under expect to receive Social Security benefits. "Younger investors' confidence in the Social Security system was surprisingly positive," said Fahlund. "Still, it shouldn't be relied upon too heavily. Investors need to consider it as only one source of retirement income and make sure they are contributing to their retirement through other accounts."
When asked at what age they expect to retire, the mean age given was 62. When asked how many years they expect to live in retirement, the mean answer was 22 years. The latter number is a significant underestimate, said Fahlund.
"To be adequately prepared and to ensure they don't outlive their money, investors should save at least 15% of their salary, including any available employer match, and consider a possible retirement of 30 or more years, to age 95," said Fahlund.
The online survey was conducted by Harris Interactive on behalf of T. Rowe Price among 860 adults ages 21-50 who have at least one investment account.
MADISON, Wis. (3/14/12)--The Wisconsin Department of Financial Institutions (DFI) has issued an alert to consumers about phone calls from bogus debt collectors. Credit unions can help by providing advice to their members on what to do if they receive such calls.
The callers attempt to collect money on loans that consumers never received or loans received but for amounts they do not owe, said DFI Tuesday.
"DFI has received calls from dozens of concerned Wisconsin consumers who have been targeted by these callers," said DFI Secretary Peter Bildsten.
Credit unions can warn members to be suspicious of callers attempting to collect debt over the phone and provide these tips for handling such calls:
- Ask callers for their name, company, street address and telephone number. Refuse to discuss any debt until you get a written validation notice in the mail. It must include the amount of the alleged debt, the name of the collection agency, the name of the creditor allegedly owed, and the consumer's rights under the Fair Debt Collection Practices Act.
- Refuse to speak to the callers if they haven't provided a written notice from the collector. If collectors call back, hang up or do not answer subsequent calls.
- Do not give the caller personal financial or sensitive information such as bank or credit union account, credit card or Social Security number to someone you don't know. Scam artists such as fake debt collectors can use the information to commit identity theft.
- Report the call to your state financial regulator, the Federal Trade Commission at www.wdfi.org or the Federal Bureau of Investigation at www.IC3.gov.
FEDERAL WAY, Wash., and BEAVERTON, Ore. (3/14/12)--Two states, Washington and Oregon, accounted for 9.2% of the nation's total new membership gain of 1,344,936 during 2011, according to National Credit Union Administration data.
The two states added 123,752 new credit union members last year, with Washington attracting 104,000 members and Oregon picking up nearly 20,000. During fourth quarter alone, they combined for 50,000 new memberships, bringing the total membership in Oregon and Washington to 4.2 million.
Nationally, the fourth quarter saw a net membership gain of 398,732. Washington added 38,301 or nearly 10% of the nation's new membership for that quarter. Oregon added about 11,400 members, which represents more than half its yearly net membership gain.
"Last year was historic in terms of credit union awareness," said Northwest Credit Union Association (NWCUA) CEO John Annaloro. "As a region, though, the Pacific Northwest--especially Washington--outperformed most of the rest of the nation by 15%-to-20% in terms of pure gains."
NWCUA noted that the 2011 membership numbers in Oregon are skewed by an interstate merger of First Tech FCU in Beaverton, with California's Addison Avenue CU. The merger caused about 162,000 Oregon members to shift under this technicality to become part of California's numbers. The data, which adjusts for this, show that 19,753 consumers joined a credit union in the state in 2011.
"A lot of factors played into what happened during last year's fourth quarter," said NWCUA President Troy Stang. "The important takeaway is that more people have access to cooperative finance than ever before at a time when it is desperately needed."
Many reasons exist as to why consumers moved their money to a credit union last year, but Bank of America's announcement that it would charge a $5 a month debit card fee undoubtedly contributed, said NWCUA.
"We've always said that if consumers have a reason to consider credit unions, that cooperative finance would win the day," said David Bennett, NWCUA director of public relations. "2011, especially its fourth quarter, proves that the benefits of being a credit union member are far more powerful than being a nameless customer of a big bank."
Washington was one of the states that worked more directly with some groups of the Occupy movement, such as Occupy Seattle.
"We did things differently here for Bank Transfer Day than what most associations did around the country," said Bennett, noting he and several credit union volunteers "actively engaged Occupy Seattle" when it requested them to help. "The group "told us what it was going to do--march people to credit unions and make a big show of it and drop them off so they could sign up [for memberships or new accounts]. They asked us to help them do it appropriately and in a way that was as comfortable for credit unions as it was going to be uncomfortable for banks," he said.
Occupy asked NWCUA and credit unions "for information on how to join and where to join. We didn't have to explain why," said Bennett. "Occupy Seattle chose us, and we had the responsibility to provide that information. Our earned media exposure was nearly 100% positive, and we had acres of it."
Bennett noted that "credit unions were not at Bank Transfer Day in Seattle to march, yell or scream. Credit unions were there to serve members of our community who were asking for help."
- BRUNSWICK, Maine (3/14/12)--Atlantic Regional FCU settled its lawsuit against a former employee convicted of embezzling about $500,000 by agreeing to accept $370,000 in restitution (Associated Press March 12). Marsha Richard, 23, of Topsham, Maine, allegedly manipulated accounting entries related to checks that members deposited but were later returned due to non-sufficient funds. Richard pleaded guilty and was sentenced to 33 months in federal prison …
- GULF SHORES, Ala. (3/14/12)--An Alabama woman was extradited to Pennsylvania on charges related to allegedly using an ex-boyfriend's name and personal information to open credit accounts. The accounts at Mechanicsburg, Pa.-based Members 1st FCU were allegedly opened by Donna Dick, also known as Donna Carbaugh. The 49-year-old woman was charged with forgery, identity theft, stalking, harassment and flight to avoid apprehension, trial or punishment. This is the third time Dick is accused of using the ex-boyfriend's information to open accounts (Press-Register March 10) …
- WARMINSTER, Penn. (3/14/12)--Freedom CU is sponsoring Biz Kid$ for the fifth year in a row on public television station WHYY. A Freedom CU release cited the program's focus on educating school-aged children about saving, budgeting, investing and giving back to the community. The approximately $500 million asset credit union has provided financial education materials to more than 250 classes to reach roughly 50,000 students since 2006. A Freedom Web tile will appear on WHYY's Newsworks.org website on the Biz Kid$ home page …
- HARRISBURG, Pa. (3/14/12)--Two credit union leaders have been named Women of Influence for 2012 by the Central Penn Business Journal. Carol Fastrich-Aranos, vice president of marketing at AmeriChoice FCU, Mechanicsburg, and Diana Roberts, president/CEO of Hershey FCU, Hummelstown, were honored for their work on behalf of credit unions as well as their community efforts (Life is a Highway March 12). Fastrich-Aranos serves on the board of directors of the Pennsylvania Credit Union Foundation. Roberts is a member of the Pennsylvania Credit Union Association board of directors and is a past board chairman, as well as a former member of the Credit Union National Association Board of Directors …
SACRAMENTO, Calif. (3/14/12)--Teveia Barnes has been appointed commissioner of the California Department of Financial Institutions (DFI), succeeding William S. Haraf, who announced his resignation Monday.
Haraf's last day is Friday.
"Credit unions and banks in California have tremendous regard for Bill Haraf's expertise as a regulator," said Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues. "He is committed to the health of the banking system in California, well versed in the financial services marketplace, and has an exceptional professional background. Bill has been open and fair with credit unions, and we have benefited from his strong leadership during one of the worst economic downturns in California and nationwide."
Barnes has been a partner at the law firm of Foley and Lardner LLP since 2005 and president and executive director at Lawyers For One America since 1999. She was executive director and general counsel at the Bar Association of San Francisco from 2001 to 2003.
Barnes worked at the Bank of America National Trust and Savings Association from 1986 to 1999 in multiple positions, including associate general counsel and senior vice president.
She serves on the boards of directors for the U.S. Bank Advisory Board of Northern California and On Lok Inc.
The position requires confirmation from the California State Senate.
PHOENIX (3/14/12)--A U.S. District Court judge postponed sentencing until April 9 for a Yuma, Ariz., businessman who allegedly took part in a scheme to defraud AEA FCU.
U.S. District Court Judge Susan Bolton rescheduled the sentencing because new information about the scope of the losses that led to AEA FCU's insolvency have emerged (Yuma Sun March 12).
Frank Ruiz in June pleaded guilty to one count of conspiracy and one count of transactional money laundering for receiving millions of dollars in fraudulent business loans from William Liddle, AEA's former vice president of business lending.
Under the terms of his plea agreement, Ruiz could have been sentenced up to 15 years in prison, but the government has requested that he receive a 12-month sentence and years of probation because of his assistance in the successful prosecution of Liddle and his wife, Rhonda.
Ruiz accounted for about $900,000 in losses, according to the government. The majority of the $50 million in fraudulent loans were made among the Liddles and other borrowers.
In postponing the sentence, Bolton said that Ruiz should be held accountable for more losses. She called the loan scam a Ponzi scheme.
According to his plea agreement, Ruiz could face a maximum $250,000 fine, a maximum five years in prison and three years of probation for the one count of conspiracy. For the second count of transactional money laundering, he faces a maximum $250,000 fine, a maximum of 10 years in prison and three years' probation (KSWT.com March 11).
AEA FCU, based in Yuma, Ariz., with $229 million in assets, was placed into conservatorship by the National Credit Union Administration until it recovered.
MADISON, Wis. (3/14/12)--Credit unions' innovative financial education programs for youth will be featured during a Capitol Hill event on Wednesday, March 21, sponsored by the National Credit Union Foundation (NCUF).
Volunteer Gerry Singleton, left, high-fives a teen after spinning the "Wheel of Reality" at the National Credit Union Foundation's Reality Fair last year at the Credit Union National Association's Governmental Affairs Conference. (Photo provided by the National Credit Union Foundation)
The NCUF's Financial Reality Fair will showcase interactive financial literacy tools for high school students from noon to 2 p.m. in the Caucus Room of the Cannon Office Building, in Washington, D.C., during the Credit Union National Association's Governmental Affairs Conference (GAC).
The event aims to introduce legislators and their staff to credit unions' efforts to engage youth in financial education. Students from Roosevelt Senior High School will take part in the hands-on event, which is open to observers from the GAC.
Students move through the reality fair by identifying a career choice and starting salary, completing a budget and then making choices that determine whether they can balance needs and wants to stay within their budget. A financial counselor meets with each student to review the outcome.
The Credit Union League of Connecticut, Maryland & DC Credit Union Association, Congressional FCU, HEW FCU, and GPO FCU provide support for the event.
MADISON, Wis. (3/14/12)--Credit unions offer a viable option for small businesses seeking financing, according to a Credit Union National Association (CUNA) economist who was quoted in an Entrepreneur magazine article that appeared online.
"Because credit unions are member-owned financial cooperatives, we don't have to make a lot of money," Mike Schenk, CUNA vice president of economics and statistics, said in the article, headlined "When Seeking Funding, Credit Unions Can Be Worth Checking Out."
"You'll often find interest rates and fees lower than at commercial banks, and because the small-business borrowers are members, the credit union leadership is often likely to have more flexibility in lending to them," Schenk added.
At the same time, credit unions are not willing to take a lot of risk, so it's important the business owners clean up their credit reports before seeking funding from credit unions. But credit union loan officers often have more authority than loan officers at larger banks, the article said.
Pat Keefe, CUNA vice president of communications and media relations, also contributed to the entrepreneur.com article. Keefe outlined the types of business services most credit unions offer.
CUNA and credit unions are pressing 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.
BIRMINGHAM, Ala. and TALLAHASSEE, Fla. (3/14/12)--Alabama and Florida credit unions saw positive growth in assets, membership and lending--including member business lending (MBL) during 2011, according to the League of Southeastern Credit Unions (LSCU).
Alabama and Florida credit unions added $2.7 billion in assets in 2011 from 2010. That includes $1.3 billion added in the fourth quarter.
Membership rose in the fourth quarter with southeastern credit unions adding 34,000 new members for a total of 110,000 new members between the states for 2011--75,000 new members in Florida, the largest gain in more than five years, and 35,000 in Alabama, the largest gain in four years.
"When we look at the membership and asset numbers for 2011, it's certainly some of the best we've seen in years," said LSCU President/CEO Patrick La Pine. "The membership numbers are most likely higher for credit union members that are using a credit union for their primary financial institution. Through our Image Campaign research, we found many people moved their money from a bank to a credit union after already having a savings account or loan with the credit union."
Florida credit unions grew their MBL portfolios by 2.6% in the fourth quarter and 2% for 2011 year over year, while Alabama credit unions grew their MBLs by 2.7% for 2011 year over year.
Delinquent loans in Alabama fell for the second consecutive year and remain below the national average. In Florida, delinquent loans remain above the national average, but have fallen for two straight years and are under 3% for the first time in four years. Net charge-offs are at a five-year low in Alabama and well below the national average. Net charge-offs in Florida dropped for the third straight year.
In 2011, Alabama credit union members' savings grew at a two-year high of 9.7%--nearly twice the national credit union average and more than 4% higher than 2010. In Florida, credit union member savings grew nearly 3%--an improvement from 2010 when credit union member savings growth was flat.
The Credit Union National Association (CUNA) and credit unions are pressing 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.
FEDERAL WAY, Wash. and BEAVERTON, Ore. (3/13/12)--Nov. 5--Bank Transfer Day (BTD)--was not the first mass movement away from banks and into cooperative financial institutions, says the Northwest Credit Union Association (NWCUA).
Instead, 2011 marked the "third significant membership milestone in the 100-year history of American credit unions," according to a special edition of NWCUA's Anthem newsletter (March 12), which puts BTD and the resulting membership gains for credit unions into perspective. It also provides information and statistics about national and statewide (Washington and Oregon) membership growth.
Consumers' movement from banks to credit unions "happened several times in America during the 20th Century under circumstances similar to those that occurred during 2011's fourth quarter," said one of the Anthem's articles, "Bank Transfer Day in Context, What Caused the Movement, and What Comes Next?" written by David Bennett, director of publications at NWCUA.
"However, at two specific points in time--in 1934 and again in the mid-Seventies--there was a confluence of events very similar to those that led to last fall's Bank Transfer Season," the article said.
"While credit unions themselves didn't exist before the first state credit union act became law in Massachusetts on April 15, 1909, the conditions that spawned them did," said NWCUA.
The article noted that "the 1909 Massachusetts Credit Union Act was passed on the heels of a systemic banking failure and crisis in 1907-08, when the labor and women's movements were converging and progress was being made to advance their causes. Personal lending was scarce but desperately needed, and most of the nation's citizens lived in rural communities where access to credit was almost nonexistent. Parallel to the interest in credit unions was an interest in maintaining a stable economy. So, with the first state credit union act also came the implementation of the first major bank reform in the U.S."
The first credit union membership spike occurred between 1934 and 1939 during the height of the Great Depression and after the passage of the Federal Credit Union Act, said the article. Credit unions experienced a heyday, while many banks closed their doors, "leaving communities without banking facilities and creating some general hostility toward and fears of banking institutions."
The World War years were lean for credit unions, but in the 1950s, credit unions would turn into a revolution running concurrently with a new economic and post-war industrial revolution. By the end of 1963, credit unions had increased membership by more than 168%--to 14.5 million from three million.
Between 1969 and 1975, the U.S. entered two recessions. "Politically, what happened in the early 1970s is nearly identical to what we are seeing today," said NWCUA. The recession then coincided with a government's attempts at fiscal tightening to close the Vietnam War budget deficit, coupled with the oil and gas crisis. The poor economic situation led to a recession in 1973. Credit unions were maturing but their environment was affected by aggressive banks and revolving retail credit added to the rising tension. The economy began its full switch to a credit-based economy as the rise of ATMs meant more convenience to bank customers, the article said.
"It was do-or-die time for credit unions, so they did," said the report. The result was sweeping changes to the Federal Credit Union Act to allow credit unions to become full-service financial institutions and to institute the corporate credit union system to provide liquidity. The regulations increased and a period of consolidation began, followed by improvements to state credit union acts. Charters advanced and some regions were positive climates for credit unions.
The next test, however, would be Sept. 11, 2001, when terrorists prompted a downward economic spiral and an increase in non-domestic government spending. While the U.S. was "distracted," economic indicators began showing signs of a slowdown. Unregulated investment products, fueled by greed, created a bubble that led to an economic crash and recession, which led to consumers' discontent, the article said.
"What credit unions provided to consumers in 2011 was the opportunity to act in their own combined personal best interests. Credit unions became a positive outlet for the public's bank-directed anger. Credit unions gave the opportunity to punish an industry in the court of public opinion when the justice system couldn't--or wouldn't--punish it in a court of law," said Bennett in the article.
"Credit unions have reached a tipping point again as all the social, political and economic signs are flashing. History is calling on credit unions again to be pillars during this time of need, to serve American consumers on a day-to-day basis in the present, but also to focus on the future of the movement and all that it can be as opposed to just the well-being of individual institutions."
The article also looks to the future and provides a graphic that illustrates 111 years of the U.S. credit union movement from 1900 to 2011. It includes a timeline of social movements, economic indicators and credit union milestones. Use the links to access both the article and the graphic.
WINSTON-SALEM, N.C. (3/13/12)--Piedmont Advantage CU, based in Winston-Salem, N.C., says it is restructuring positions to streamline its business and reflect the changing financial services environment.
The $214.4 million asset credit union, headquartered in Winston-Salem, N.C., is eliminating some positions while enhancing or adding others to reflect changes in today's financial services environment.
It told the Winston-Salem Journal (March 9) that collections services are being outsourced, which affected some jobs. CEO Judy Tharp told the publication that 11 employees were let go. However, some have the opportunity to apply for redesigned positions or new ones, such as mortgage loan positions, which the credit union expects to fill within a month.
MADISON, Wis. (3/13/12)--Best Practices Award winners from the CUNA Marketing and Business Development Council were announced during the council's 19th annual conference, which ended Saturday in New Orleans.
The awards recognize new marketing and business development approaches that have potential for universal application across the credit union movement, said the council. Winners are based on strategy, process, application and results.
Winners by category were:
Business Development: Maps CU in Salem, Ore., for its Buy Local program. The program aimed to increase the credit union's relationships with local businesses, drive additional traffic to existing businesses, and engage the community with the idea of buying local. It saw a 10% increase in participating businesses in 2011, a 95% renewal rate for 2012, increased website traffic on the Buy Local page and about $2,500 infused into the local business community.
Community Outreach and/or Political Advocacy: Truliant FCU, Winston-Salem, N.C., for R.E.A.L. (Rural Entrepreneurship through Action Learning), a program that provided participants with networking opportunities, small business education, financial literacy and counseling to build their financial strength and business skills. The program has 126 graduates. Eight individuals have already opened a new business and 22 plan to open a business within the next five years. For its efforts, Truliant FCU was honored as a 2011 recipient of the prestigious National Association of Housing and Redevelopment Officials (NAHRO) Merit Award for job creation and entrepreneurship training.
Miscellaneous: Fort Worth Community CU, Bedford, Texas, for the creation of its virtual spokeswoman "Gabby." Through social media tools including Facebook, Twitter, a blog, Pinterest, and her own website www.GetYourWorthOn.com, Gabby engages and interacts with a targeted female audience (women, ages 28-55) to develop relationships that will lead to membership growth and increased product/service usage among current members. In addition to features and accolades from various credit union organizations, the campaign has led to an 8.4% membership growth in less than 10 months and a 17.1% increase in loan growth over the previous year.
For more information on the 2012 Best Practice Award winners, go to the council's website and click on the Best Practices link on the "Events" pull-down menu.
- ALBANY, N.Y. (3/13/12)--Brett King, best-selling business writer and industry innovator, will be the June 8 keynoter at the Credit Union Association of New York's Annual Meeting, which takes place June 7-10 in Lake George, N.Y. King is author of Bank 2.0, which challenges financial institutions to adapt their structures and thinking to reconnect with evolving consumers. He is founder of Movenbank, the first pure-play mobile bank based on Near Field Communication, social media and user experience, and runs User Strategy, a consultancy focusing on improving customer interaction with financial services companies. He will talk about trends, innovations and technologies that will have the most significant impact on financial services, said the association ...
- ROYAL OAK, Mich. (3/13/12)--Deb Thompson has been selected as the new CEO/president of OUR CU, announced the Royal Oak, Mich.-based credit union. Thompson has a long history of working in financial institutions, most recently as senior vice president of operations and technology with Bank of Birmingham. Before that, she served as Michigan Schools & Government CU's vice president of strategic business services for two years. She also was with SOC CU as vice president of finance and operations for 16 years. Thompson replaces retiring CEO/President Thomas Zamberlan …
- OGDEN, Utah (3/13/12)--Shelley Burch Clarke, former CEO of Goldenwest CU in Ogden, Utah, died March 8 after a long battle with brain cancer. She was 60. Clarke spent 37 years with Goldenwest CU. She became vice president in 1983, executive vice president in 1990 and president/CEO in 2001, holding that position until her retirement in December. During her tenure, the credit union grew in assets to $775 million from $190 million, more than doubled its membership to 83,000 members, and doubled its branches to 18 locations. She served in many advisory boards and councils, was active in a number of national credit union organizations including the Credit Union National Association and served as chairperson of the Utah League of Credit Unions. She served on the Governor's Advisory Board and was recognized as one of the top businesswomen in Utah in 2001. "Shelley was a significant force behind the credit union movement's success of the last decade in our state," said Scott Simpson, president of the Utah Credit Unions Association. "Her leadership and vision will truly be missed." She is survived by her husband, two sons, a granddaughter, her parents, a sister and a brother. Funeral services will be Wednesday at 11 a.m., with viewing tonight from 5 p.m. to 8 p.m, at the Lindquist Mortuary, 3408 Washington Blvd., Ogden, UT 84401 …
- LANSING, Mich. (3/13/12)--Jackilyn Ravis, former CEO of Members CU, Travers City, Mich., died March 2, in Charleston, Tenn., where she had retired with her husband, Louis, according to the Michigan Credit Union League (Michigan Monitor March 12). She had also worked at the former Pontiac Telephone Employees CU, now known as Lakes Community CU in Lake Orion. As CEO of Members CU, she led the credit union through a name change from Government Employees CU and saw it grow from $11 million to nearly $71 million in assets. Ravis loved the credit union movement so much that she and her husband married at the MCUL annual meeting in 1985. She is survived by her husband, a son, a daughter, a sister and a grandson. One son preceded her in death. No services are planned …
LOS ANGELES (3/13/12)--Credit unions and local banks are increasingly offering short-term loans to counter an industry typically dominated by storefront payday loan centers, according to a Monday article in the Los Angeles Times.
Although more than two dozen community and regional banks offer versions of payday loans, the largest rise in payday loan alternatives has been seen at credit unions, Jim Puzzanghera reported in the article, "Credit unions, banks grabbing a share of payday loan dollars."
Nearly 400 credit unions now offer these products, the article said. Because of the troubled economy, which has a weak demand for loans, credit unions and banks have entered the payday loan arena because there is an expanding need for short-term loans. Credit unions and banks can offer them at terms that are superior to those of storefront payday lenders, the newspaper said. They have seen more financially strapped consumers turning to payday lenders.
The National Credit Union Administration (NCUA) has implemented restrictions for short-term loans--including a cap on the annual percentage rate, allowing members at least a month to repay, and not permitting them to roll over the loans, the paper said.
The number of federally chartered credit unions that offer payday loans has climbed to 390 this year from 244 in 2011. Payday loans outstanding rose to $18.7 million at the end of December, compared with $8.9 million at the end of March. The increase is a response to a real need, Debbie Matz, NCUA chair, told the Times.
The article also mentioned programs offered by Vons Employee FCU in El Monte, Calif., and Community Trust CU in San Francisco.
LIBERTY LAKE, WASH. (3/13/12)--Spokane Teachers CU in Liberty Lake, Wash., has challenged 10 teams of local high school students to make a difference with $100.
Students were asked to form a team, pick a project, set a goal and submit their idea to the credit union. Ten finalists for the contest were announced Feb. 13 (The Spokesman-Review March 1).
Throughout March, the teams will document their projects and air YouTube videos demonstrating how they've used the $100.
The scope of the projects ranges from personal to local to international.
One team is raising money to help a local teen with leukemia. It used the $100 to buy supplies for a burger night fundraiser at a local restaurant.
Another team created a clothing store at a high school to help make clothes more affordable for local residents.
A member of one team serves on a board of a nonprofit that performs service work in Uganda. Her team hopes to raise $10,150 to dig a well in Buwambo, Uganda. They will use their $100 to promote a fundraiser.
In April, the public will vote to select three winners. First place will be awarded $2,500, second place gets $1,500; third place receives $1,000.
HARRISBURG (3/13/12)--Pennsylvania State Rep. Mark Longietti (D-7) of Hermitage, Pa., is the first Pennsylvania lawmaker to win the Desjardins Financial Literacy Award for State Lawmakers from the Credit Union National Association (CUNA).
The award is given to one state lawmaker each year for leadership on behalf of youth financial literacy.
The Pennsylvania Credit Union Association (PCUA) nominated Longietti for the award to honor the work that he has done toward the advancement of financial education in the state. Longietti will be honored during the PCUA 78th Annual Convention & Exposition in May.
"It's a well-known fact that children and adults lack financial literacy skills to effectively manage their money, said PCUA President/CEO Jim McCormack. "Credit unions have been on the forefront of providing financial education in schools, so we are naturally supportive of Rep. Longietti's efforts to establish financial education programs throughout Pennsylvania," said McCormack.
Longietti sponsored the state House education bill that helps Pennsylvania's educational system incorporate financial education in school systems. After a veto by Gov. Ed Rendell, Longietti gained bipartisan support to overturn the veto. The bill was passed on Nov. 17, 2010, and officially became Act 104.
Act 104 requires the Pennsylvania Department of Education to convene an Economic Education and Personal Financial Literacy Task Force to assess the trends and needs of economic education and personal financial literacy; consider how funds are used to support economic education and personal financial literacy; and make recommendations to the governor and the General Assembly on legislative or regulatory changes to improve economic education and personal financial literacy.
PCUA serves on the state's Economic Education Task Force.
NEWPORT BEACH, Calif. (3/13/12)--The National Association of Credit Union Service Organizations (NACUSO) has expanded its annual CUSO Collaboration and Innovation Awards to recognize a credit union for using the CUSO model to serve its membership.
NACUSO is accepting nominations from its membership for this year's awards.
Nominations must be submitted by the close of business April 4. During the annual conference NACUSO will acknowledge all CUSOs and credit unions that submit applications.
"CUSOs are vibrant examples of how collaboration can leverage the credit union system's resources to enhance member value, said Jay Johnson, executive vice president of Callahan & Associates and chairman of the 2012 award committee. "By driving innovation, broadening services provided to members and capturing efficiencies, CUSOs are a critical component of credit union success today and in the future.
"NACUSO would like to recognize both the CUSO and the credit union that best exhibits excellence in utilizing collaboration and innovation to serve the financial and other needs of their membership," he added.
The judging panel for this year's awards will include five leaders from the credit union industry and cooperative business sector who have demonstrated experience in innovation and collaboration.
WASHINGTON (3/13/12)--Credit unions in the Washington, D.C., area saw a surge in earnings and membership in 2011, propelled by a spike in consumer interest as a result of a negative wave of sentiment toward banks last fall, said The Washington Post (March 11).
Last year, assets at locally based credit unions climbed 13.4% to $89 billion, while memberships jumped 15% to seven million, according to National Credit Union Administration (NCUA) data cited by the newspaper.
Also, consumer lending at Washington credit unions rose 10.1% to hit $60.1 billion by the end of last year.
A key measure of growth--return on average assets--was 0.92% for the area, compared with 0.79% the previous year.
"People have been looking for banking alternatives, and the fees issued at large banks brought heightened attention on credit unions in the fourth quarter," John Bratsakis, president/CEO of the Maryland and D.C. Credit Union Association, told the Post.
To read the article, use the link.
WABAN, Mass. (3/12/12)--Credit unions had the third-highest rating in the investments industry, beating out some of the top investment firms in a new study of customer experience in that industry.
The 2012 Temkin Experience Ratings rated experience at 206 large companies across 18 industries. In the investments arena, "a credit union" was rated 65%--in the third position and tied with Ameriprise Financial, Edward Jones and Vanguard firms.
Charles Schwab's rating at 70% and Fidelity Investments at 68% were the only investment firms with higher ratings. Credit unions topped ING Direct, rated at 62%; E*Trade and Merrill Lynch, both at 59%; Morgan Stanley Smith Barney and TD Ameritrade, both at 57%; and Wells Fargo Advisors at 54%.
Temkin Group also analyzed the changes between 2011 and 2012 and found that the investment industry has seen its sharpest decline in customer experience ratings in the past year.
The group bases its ratings on three dimensions of customer experience:
- Functional--Does the company meet consumers' needs?
- Accessible--How easy is it for consumers to do what they are trying to do?
- Emotional: How do consumers feel about their interactions with companies?
Credit unions and Fidelity Investments received the highest Emotional ratings, while Wells Fargo Advisers received the lowest.
Charles Schwab and Vanguard received the highest Functional ratings, with Wells Fargo the lowest. In the Accessible ratings, Charles Schwab and Fidelity received the highest and Wells Fargo Advisors and Morgan Stanley Smith Barney received the lowest.
The report rated customer experience at 206 large companies across 18 industries.
MIAMI (3/12/12)--Space Coast CU (SCCU), Melbourne, Fla., has sued a who's who list of Wall Street investment banks and ratings agencies over $100 million in losses from collateralized debt obligations (CDOs) sold to Eastern Financial Florida CU, a Miramar, Fla.-based credit union acquired by Space Coast in 2009.
The $3 billion asset Space Coast filed the suit as successor-in-interest to Eastern Financial, whose collapse was the largest natural-person credit union failure in history. Florida's Office of Financial Regulation issued an emergency order on June 30, 2009, authorizing the merger of Eastern Financial into Space Coast, according to the complaint filed Thursday in the Circuit Court of the 17th Judicial Circuit for Broward County, Florida.
The suit seeks to recover more than $100 million in investment capital paid by Eastern Financial for the CDOs and damages.
Named as defendants are: Merrill Lynch and its credit corporation, Merrill Lynch Home Loans; Wells Fargo Securities (formerly Wachovia Capital Markets); J.P. Morgan Securities (formerly Bear Stearns & Co. Inc.; UBS Securities; Barclay's Capital Inc.; Richard S. Fuld Jr., who ran Lehman Brothers at the time; Moody's Investors Service Inc. and The McGraw Hill Cos., Inc. (formerly Standard & Poor's Ratings Services).
"This suit was commenced on behalf of our members to seek reimbursement for losses sustained by Eastern Financial in the 2008 to 2010 timeframe," said Space Coast CU President/CEO Douglas Samuels. "It is our duty, on behalf of our members, to attempt to recover the loss and ultimate destruction of Eastern resulting from this sale of the mortgage-related securities. These mega-brokers knew at the time of sale that these securities were worth less than face value and took advantage of a less sophisticated buyer. The Eastern members had built a valued and respected credit union over the course of 70 years that was irrevocably damaged by this misrepresented investment.
"This may not be an easy battle. Space Coast is only a $3 billion financial institutions going up against the Wall Street giants," he noted. "However, we strongly believe that these large brokers should be held accountable when they take advantage of locally-owned, smaller financial institutions."
In the complaint filed, SCCU said the CDOs "generated phony demand for residential mortgage loans, fueling one of the worst economic catastrophes that Florida's investors and homeowners have ever faced."
The complaint alleges that the process of "creating and selling CDOs revolved around shoe-horning residential mortgage securities into Moody's and S&P's credit rating models to generate 'investment grade' ratings," and that the "most sophisticated investors in the world rely on those credit ratings." The ratings agencies are gatekeepers to "structured' credit markets because Wall Street must satisfy their tests and financial models to sell rated CDO notes, said the court document.
The defendants violated the Florida Securities and Investor Protection Act and that they "knowingly, or in reckless disregard of the truth, made a number of material misrepresentations and/or omissions" to induce Eastern Financial to purchase the notes, they "employed devices, schemes, and artifices to defraud," according to the court document.
The suit also alleges common law fraud related to the credit quality of the CDOs; negligent misrepresentations of facts that induced the credit union to buy the CDOs; unjust enrichment by rating CDOs more highly that they should have been rated under the rating agencies' own criteria, to earn profits and fees from Wall Street banks at the expense of" Eastern Financial; and a claim for constructive trust because the banks "promised to deliver 'Investment Grade' Rated CDO Notes" and had a "superior access to confidential information about the quality of the collateral comprising the CDOs.
Representing Space Coast in the suit is Robbins Geller Rudman and Dowd LLP, a firm that represents U.S. and international investors and consumers in contingency-based complex litigation. With nearly 200 attorneys in nine offices, the firm represents more institutional investors and pension funds in securities and corporate litigation than any other law firm in the world, said Space Coast.
NEW ORLEANS (3/12/12)--Life is one big, crazy, busy conveyor belt packed with commitments and to-do lists. And then we die. But it doesn't have to be that way for credit union marketers, performing artist Victoria LaBalme told CUNA Marketing & Business Development Council Conference attendees Thursday in New Orleans.
She suggests taking a page from singer Bob Dylan, who once said, "The purpose of art is to stop time."
Therefore, everyone should stop taking a perverse pride in being stretched thin. "Somehow this has become a status symbol," LaBalme says, "where people brag about how little sleep they get." Instead we should turn our "busyness" into art, she added.
Doing so requires three actions:1. Look
. Reconsider how you view business and personal opportunities. "What you look for, you'll find," she says. "But you'll miss other possibilities along the way because you missed the full spectrum."
Likewise, focusing solely on typical credit union solutions to business problems will keep new ideas from springing up. "Look to other organizations for marketing ideas," LaBalme advised.
Looking also includes finding your "through line," the actress says. "Through line" is an acting term that refers to the forces behind a character's actions. People can find their through lines by considering three questions:
- If you were on a desert island and could provide only one piece of advice to a loved one, what would it be? The answer is what's most important to you.
- What's the nobility behind your work? Why does it matter to you?
- What do you personally represent? What do you want to be known for?
. President Calvin Cooledge once said, "no one ever listened himself out of a job," said LaBalme. Taking the time to listen carefully--and not interrupting or "pouncing after a moment of silence"--shows that you care about the person who's talking.
. LaBalme watched from her New York City apartment on Sept. 11, 2001, as the Twin Towers fell. Three months later, she lost her mother to cancer. That taught her there's no time to lose. "Life is short--don't waste time," she said. "What are you waiting for? When you love someone, time stops."
VANCOUVER, B.C., and CALGARY, Alberta (3/12/12)--A merger among Canada's central financial facilities and trade associations for credit unions in British Columbia, Alberta, and Ontario has been called off.
Central 1 CU, based in Vancouver, B.C., and Credit Union Central Alberta Ltd. announced Thursday the merger discussions, begun in 2011, had ceased. The discussions explored whether consolidation would achieve efficiencies, offer a stronger liquidity structure, provide greater diversification of funding sources and provide better capacity in finance, payments and trade services.
A combination of the associations would have affected 190 credit unions in the three provinces.
"Our preliminary discussions focused on whether or not a potential merger might enhance our capacity to better meet the needs of credit unions and support their continued expansion in the marketplace," said Alberta Central President/CEO Graham Wetter. "We have not been able to make the progress we had hoped to, and have concluded that we should focus on other priorities, at this time."
Don Rolfe, Central 1's president/CEO, said, "What is most important for both of our organizations is the effective support of our growing and vibrant credit union systems. Although we do not believe our combination is currently achievable, Central 1 and Alberta Central will continue to explore whether opportunities to collaborate exist that will bring greater benefits to credit unions in all three provinces."
Central 1, which has offices in Vancouver, Mississauga and Toronto, represents 45 credit unions in British Columbia and 112 credit unions in Ontario. It serves more than 2.9 million members and holds $15 billion in assets.
The $2 billion asset Alberta Central, headquartered in Calgary, represents 34 credit unions in the province that serve more than 646,000 members.
NEW ORLEANS (3/12/12)--Credit unions are redefining the art of business development, realizing the practice requires building strong relationships, reaching out to companies' key decision-makers, and moving beyond select employee groups (SEGs), said a speaker Thursday at the CUNA Marketing & Business Development Council Conference in New Orleans.
"Business development isn't just showing up at a charity event and it isn't pressure-selling," said Sean McDonald, director of business development for Mid-States FCU in Carteret, N.J., and council chair, during a breakout session. "And it isn't just for SEGs anymore. Business development is important for all credit unions."
There are seven steps to boost business development, McDonald said.
1. Understand what business development is and what it isn't. That has to be is step one, McDonald said.
2. Perform a membership audit. This involves segmenting the membership, identifying trends, categorizing savers and borrowers, and determining which members are profitable or "on the cusp of profitability." Credit unions that can't afford a marketing customer information file (MCIF) system can turn to their core processor for help mining data.
"Identify which members are a drag on your profitability and those who help develop it," McDonald says. "Let's try to transfer savers into borrowers."
3. Be flexible and measure progress. If you don't measure your progress, you can't manage it, McDonald says. But business development goals should be flexible and achievable to reflect changing economic and other conditions.
"The marketplace is always changing so to have iron-clad, unchangeable business development goals is just silly," he says. "Be willing to re-assess and re-evaluate."
4. Train staff. Business development requires a specific skill set. Employees must have good communication skills, be personable, and have a passion for the job. Training and development programs will allow staff to expand these and other skills, which will help them succeed. McDonald has formed the Credit Union Business Development Academy [cubdacademy.com] to help business developers improve their skills.
5. Go out and prosper. Business development staff can't be successful staying in the office. They need to go out and meet with prospects.
"Hold them accountable, but give them the freedom to fly," McDonald said. "Don't chain them to their desks or hold them to a time clock. This isn't 'Field of Dreams.'"
McDonald acknowledged that some credit union staff resent this freedom, creating "gossip and rumblings" that can destroy morale. "Some people think if you're not in the credit union, you're not working. Get executive management on your side, and have them explain that your role requires you to be out of the office more than you're in it."
6. Don't be afraid to sell. When doing so, emphasize value above all else. "Put yourself in your members' shoes: Tell the member what your Visa card will do for them," McDonald advised. Also, explain the importance of cross-selling to the front-line staff. "Treat the tellers to lunch once in a while," he added.
7. Get in the game. "We need to be at the 'big person' table--part of the C-level discussion," McDonald said. "Business development touches every aspect of the credit union. It needs to be part of the strategic planning process. We need to show our value to the people who make the decisions."
FEDERAL WAY, Wash. (3/12/12)--Washington Gov. Christine Gregoire signed Senate Bill 5913--known as the public funds bill--into law Wednesday. The bill allows public entities for the first time to deposit funds in any credit union in Washington up to the federal insurance maximum of $250,000, according to the Northwest Credit Union Association (NWCUA).
Washington Gov. Christine Gregoire, seated, signed the state's credit union public funds bill, Senate Bill 5913, into law Thursday afternoon. The bill allows public entities for the first time to deposit funds, up to $250,000, into any credit union in the state. (Photo provided by the Northwest Credit Union Association)
The new law goes into effect on June 8--60 days after the end of the regular 2011 legislative session (Anthem
"With the signing of this legislation, all Washington credit unions are now eligible to hold public funds up to the level of insurance--if they so choose," said Mark Minickiello, NWCUA vice president of legislative affairs. "While some may not see this as having a large effect, it is one more step toward allowing not-for-profit credit unions to offer the products and services their members want."
State law previously allowed state-chartered credit unions to be depositaries up to a maximum of $100,000. The bill's passage now allows federally chartered credit unions to act as depositaries and raises the maximum to $250,000 for all credit unions.
Other states have recently pursued similar legislation, NWCUA said. New Jersey enacted a law in 2011 allowing 1,500 local government entities, including libraries and community colleges, to deposit funds in credit unions, while the Florida legislature rejected a credit union public funds bill this year after the measure was met with heavy bank opposition.
Ohio and Alabama have been the latest states to make a push, and hearings on the subject in the Ohio House are anticipated after legislators return this week from a recess. The Ohio Credit Union League has been instrumental in the legislation's introduction and education efforts and said the movement now finds itself "in a war" against banks on issues such as supplemental capital and public funds, NWCUA said.
In Alabama, the League of Southeastern Credit Unions has companion bills being reviewed by the House Financial Services Committee and the Senate Banking Committee, and continues working with its members to advocate for the bills' passage, the association said.
SAN JOSE, Calif. (3/12/12)--A "Babies in the Workplace" program at $346 million asset Alliance CU will enable employees to bring their babies--up to the age of 6 months or until they begin crawling--with them to work.
Debbie Sallen, vice president of human resources, said babies will stay with the parents throughout the day at their office, cubicle or teller station (MercuryNews.com March 8).
Sallen earlier worked at another company where 70 babies were part of a similar program over 13 years. That experience persuaded her that bringing babies to the workplace eases new parents' return to work and improves productivity while reducing child care costs.
The program was introduced on March 1 at three sites. Sallen told the newspaper the launch is perfect timing for the credit union, since employees have five babies on the way.
RALEIGH, N.C. (3/12/12)--About 60 cooperative leaders in the Southeast from food, housing and electric co-ops--as well as credit unions--attended a meeting Monday in Raleigh to discuss how cooperatives can capitalize on consumer trends toward using more local businesses and build a more cooperative economy, said the North Carolina Credit Union League.
SOUTH BURLINGTON, VT. (3/12/12)--Vermont credit unions added more than 12,000 members in 2011, an increase of 4.05% from the end of 2010, according to data from the National Credit Union Administration.
Roughly 312,000 consumers are members of Vermont credit unions, which collectively hold $2.93 billion in assets, $1.9 billion in loans, and have more than $2.5 billion on deposit, said the Association of Vermont Credit Unions (Newslines Express March 9).
Assets grew by $248 million and deposits by $223 million in 2011--increases of 9.26% and 9.74% respectively.
Lending grew at a 7.15% rate, accounting for $130 million of new mortgages and loans.
Six new credit union branches were opened in Vermont during 2011, bringing to 80 the total number of main office and branch locations statewide.
BEAVERTON, Ore. (3/12/12)--Gene Metz, a former credit union supervisory examiner primarily in the Pacific Northwest, died Wednesday as a result of an all-terrain vehicle accident.
Metz was 76 years old.
His work in the 1960s and 1970s was a factor in the creation of the National Credit Union Administration (NCUA), and the support he showed to credit unions throughout his career proved that it is possible to regulate for the best interests of the credit union mission, said the Northwest Credit Union Association (NWCUA) (Anthem March 9).
"Gene was a good friend to many in the credit union community," NWCUA CEO John Annaloro said. "His stewardship helped build the strong credit union system we have today. Even in retirement, he was considered a contemporary and colleague."
- EAST WINDSOR, N.J. (3/12/12)--The Princeton, N.J., Chapter of APICS – the Association for Operations Management--has added $278 million asset McGraw-Hill FCU to its member benefits. APICS cited the value of providing its members with access to McGraw-Hill FCU's full suite of financial products, remote account access and low-fee financial environment. APICS said its members will also benefit from the credit union's customized financial consultations and educational seminars. APICS provides certification and training to professionals in supply chain management, operations, global procurement and financing …
- SAN JOSE, Calif. (3/12/12)--Eighty prizes will be given away to celebrate the anniversary of 80-year-old San Jose (Calif.) CU. Members can visit the credit union's website to enter for prize drawings occurring every weekday in March and April. Every Monday through Thursday, two winners are selected to receive a package of two movie tickets and refreshments. Every Friday, one winner is selected to receive the movie package plus an $80 cash prize. San Jose CU has grown from four members when it opened in 1932 as Municipal Employees' CU of San Jose to more than 12,500 members and more than $130 million in assets today. Lawrence Campbell, a 104-year-old retired San Jose firefighter, helped charter the credit union and remains a member …
- LONG ISLAND CITY, N.Y. (3/12/12)--A virtual thrift store is raising funds online to support the East River Development Alliance (ERDA). ERDA is a nonprofit organization that aims to improve public housing neighborhoods in New York City by helping residents gain the tools and opportunities for self-sufficiency and economic mobility. It works closely with East River Development Alliance FCU, a community development credit union with assets of $507,465. ERDA created its virtual store at WebThriftStore.com, which enables donors to list items for sale to benefit charitable organizations. ERDA employees and volunteers launched the store with personal donations but anyone may donate items for sale. When an item is sold, donors receive a tax receipt, shipping supplies and a prepaid shipping label that is used to send the package to the buyer via U.S. Postal Service …
- WOODBRIDGE, Va. (3/12/12)--Kelli Jo Anthon, financial coach at $282 million asset Belvoir FCU based in Woodbridge, Va., has been elected to the Association for Financial Counseling and Planning Education (AFCPE) Board of Directors. The board guides professional development for financial educators and researchers through the non-profit AFCPE, which works to improve personal financial management education, training and certification …
NEW ORLEANS (3/9/12)--A record number of credit union marketers--nearly 450--are attending the CUNA Marketing & Business Development Council Conference in New Orleans, said David Rohn, vice president of CUNA Councils.
The conference began Wednesday and ends Saturday. Wednesday's preconference sessions covered topics such as: advanced sales techniques, creating a compelling marketing plan, social media tactics and an "apprentice workshop," where attendees visited a nonprofit restaurant that provides life skills and job training to at-risk youth.
At an orientation for first-time attendees, several CUNA Marketing & Business Development Council Executive Committee members encouraged newcomers to tap fellow council members for ideas.
"Networking is huge," said Nancy Hutchinson, senior vice president of marketing and business development for Minnesota Power Employees CU in Duluth, describing someone she'd met 10 years ago with whom she still maintains contact. "Network with the people around you and learn from them," she added.
"Most of us have no people, no budget, and no time," noted Amy Davis, vice president of marketing for Red Canoe CU, Longview, Wash. "But we take back what we learn here and do something with it."
"Share your story so we can steal your ideas," said Sean McDonald, director of business development for Mid-State FCU in Cateret, N.J., and council chair. The former banker added that he loves the spirit of credit unions, which includes working together.
VANCOUVER, Wash. (3/9/12)--Despite a lagging economy that caused some Vancouver, Wash.-area financial institutions to struggle, Columbia CU posted growth that was above the national averages for 2011, said the credit union.
The $815 million asset credit union saw increases in assets, loans and income over the previous year, and passed national averages in categories such as savings and checking growth, loan originations and membership, said a press release from the $815 million asset credit union.
Columbia's savings accounts and checking accounts each increased 24%, compared with the 11.3% savings and 2.2% checking national growth. Its loan originations for the year rose at nearly twice the national rate, with member business lending (MBL) originations growing 128% over its MBLs in 2010.
Like many of the nation's credit unions, Columbia's membership rose, with its highest yearly levels in October and November. It posted a net increase of 7.4% over 2010. The credit union attributed its growth to the additional media attention generated by Bank Transfer Day and an increased awareness of local financial institutions.
"We're actively seeking ways to welcome new members and show them how a Columbia membership can benefit their finances," said Columbia President/CEO Steve Kenny. He attributed Columbia's growth largely to "the underlying credit union principle of 'people helping people,'" and noted that one of Columbia's core values is "making life better."
Additional milestones for 2011 included:
Loan growth. Columbia ranked as the No. 1 Clark County vehicle lender. It also surpassed Chase and US Bank in mortgage lending, ranking as the No. 1 mortgage lender in November and No. 2 in December.
Deposit growth. The credit union was the top Clark County deposit holder, surpassing the largest deposit holder--Chase Bank--by $20 million.
Capital strength. Columbia maintained capital levels over 9% for the past five years, well above the 7% regulators define as "well-capitalized."
Community support. Management staff volunteered more than 1,200 hours to local organizations and helped raise nearly $2.9 million for area nonprofits. It received the 2011 Nonprofit Excellence Award for Corporate Community Support for helping nonprofits.
LONG BEACH, Calif. (3/9/12)--Eighty-five California high school students participating in the Upward Bound Program experienced real world responsibility during a Mad City Money
financial simulation Feb.18 at California State University of Long Beach.
Mad City Money
"I learned to put things you need in front of things you want," commented one student, as Kinecta FCU volunteers introduced 85 California high school students to the real world of budgeting in the Mad City Money simulation held Feb. 18 at California State University of Long Beach. (Photo provided by CUNA)
is a simulation game created by the Credit Union National Association where students are "transported" into Mad City. They must manage all of their financial responsibilities on their own. Participants are given jobs and yearly salaries and are then allowed to buy cars, feed their families and make the types of financial decisions adults make every day.
The event was sponsored by Kinecta FCU, a $3.12 billion asset credit union in Manhattan Beach, Calif., and the Upward Bound Program, a federal program that serves high school students from low-income families and provides opportunities to pursue higher education.
"In a society where the first principles of money management have been taken out of so many classrooms, Mad City Money gives students a chance to make mistakes and have a 'do over' in a fun and forgiving environment," said Latrice McGlothin, Kinecta community programs manager.
For many students, the two-hour simulation was an exercise in trial and error. "Don't live outside of your budget," one student advised after taking part in Mad City Money. Another stated, "The real world is not a game." One student was taken aback by the amount of debt one can accumulate so quickly. "I should have taken time to see all of what I needed to purchase before I started," he said. As in ordinary life, expenses in Mad City tended to add up.
"Financial workshops like Mad City Money are paramount in helping students experience life lessons without the pain that can come along with the dramatic events in the real world," McGlothin said. "I'm confident that the mistakes our students made in the simulation will become the smart choices they make tomorrow."
MADISON, Wis. (3/9/12)--Credit unions top the list of U.S. financial institutions when it comes to member/customer satisfaction, according to a new survey released Thursday.
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Members/customers claim they were more satisfied last year in their interactions with credit union and bank call center representatives than in 2010, according to the 2011Customer Experience with Call Center Representatives Survey by Prime Performance, which advises credit unions and banks on improving the client experience.
Based on a recent interaction with a call center representative, credit union members rate their overall satisfaction with a net score of 83%. The comparable score for small banks (banks with less than 300 branches) is 79% The industry average is 70%. Falling below that are: large banks (300 to 4,000 branches), 66%; Chase, 62%; Wells Fargo, 61%; and Bank of America, 56%.
A net satisfaction score is the percent of satisfied customers minus the percent of dissatisfied ones. A score of 100% is perfect.
"In face-to-face interactions, customers are more satisfied with the service they receive in all bank categories," said Jim S. Miller, Prime Performance president. "On the phone, satisfaction with service is up for credit unions, small banks and large banks, but not for the three mega-banks: Bank of America, Chase and Wells Fargo."
The industry average net satisfaction score increased 3% from 2010. Credit unions increased 2%. Large banks experienced the greatest increase at 5%, followed by small banks--4%.The net scores at Bank of America and Wells Fargo dropped by 2% each. Chase saw a drop of 1%.
Satisfaction increased the most among Gen X customers (born between 1965 and 1980), up 7%, followed by Gen Y (born after 1980), up 5%. Satisfaction among boomers and older customers (born before 1965) remained flat. The greatest increase in satisfaction was 8% over 2010 for customers earning more than $100,000 per year.
The survey was conducted in August and September with more than 8,000 members/customers who had recently been assisted by a representative at a credit union, small bank, large bank or one of the three mega-banks--Bank of America, Chase and Wells Fargo.
For a full copy of the report, use the link.
SAN DIEGO (3/9/12)--Less than six months after rolling out its new mobile banking service, San Diego-based California Coast CU already has more than 11,000 members--nearly 10% of its membership--enlisted in the service.
"Our members are rapidly adopting this new technology because it clearly provides much greater freedom and convenience," said Kevin Landel, senior vice president of information services at $1.5 billion asset California Coast CU. "The credit union took great care in selecting one of the industry's most versatile and secure mobile banking apps for our members."
While there are numerous mobile banking apps currently in use, features and capabilities can vary significantly, Landel said. In addition to standard features such as the ability to check account balances, view transaction histories and transfer funds between accounts, the new banking app available to California Coast members offers a few extra perks.
Cal Coast members enlisted in mobile banking can pay bills online, graphically track and display spending habits, locate a branch or the nearest surcharge-free ATMs and access the credit union's website.
Even though mobile banking was marketed through various channels, the major growth came from marketing in our online banking channel and through multiple e-mail campaigns," said Tracy Fournier, California Coast's senior online marketer. As an example, the initial e-mail communication generated a 96.3% increase in adoption.
"Smart phones, tablets and other mobile devices are quickly gaining ground on personal computers as the preferred path to accessing the Internet," Landel added.
MADISON, Wis. (3/9/12)--In recognition of National Consumer Protection Week, the Direct Selling Education Foundation (DSEF) is providing links on its website to online resources created by the Credit Union National Association (CUNA).
One video is designed to help small-business owners recognize specific types of fraud.
Six scams businesses should watch out for include:
1. Directory scams;
2. Supply scams;
3. Overpayment scams;
4. Data breaches;
5. Award scams; and
6. Phishing e-mails.
DSEF also linked to three online short courses designed by CUNA with audio and visual materials to help consumers reach their financial goals. The topics of the courses are breaking the debt cycle, saving for retirement and budget basics.
To access the resources, use the links.
FARMERS BRANCH, Texas (3/9/12)--The mail balloting has been completed for the Texas Credit Union League's (TCUL) director elections in its South Central Region Asset Category Two and South East Region Asset Category Three.
The other 10 directorships had one candidate; so no further voting was required.
The 12 directors were elected under a new TCUL board structure, composed of four regions with three asset categories in each region.Directors for the North East Region include:
South East Region:
- Z. Suzanne Chism, Texas Health Resources CU, Dallas, Asset Category One;
- Kay Stewart, North East Texas CU, Lone Star, Asset Category Two; and
- Jim Brisendine, Resource One CU, Dallas, Asset Category Three.
South Central Region:
- James S. Tuggle, Transtar FCU, Houston, Asset Category One;
- Kenny Harrington, MemberSource CU, Houston, Asset Category Two; and
- Paul Withey, Texas Bay Area CU, Houston, Asset Category Three.
- Carol Murray, Express-News FCU, San Antonio, Asset Category One;
- JoBetsy Tyler, First Central CU, Waco, Asset Category Two; and
- Tony C. Budet, University FCU, Austin, Asset Category Three.
- Nancy Croix Stroud, First Class American CU, Fort Worth, Asset Category One;
- Art Hornell, The People's FCU, Amarillo, Asset Category Two; and
- Jim Minge, Texas Trust CU, Mansfield, Asset Category Three.
Under the new governance, the 12 elected directors take office upon the adjournment of the TCUL Annual Membership Meeting on April 18.
MADISON, Wis. (3/9/12)--Many know that credit unions are good places to work, but several credit unions in the past couple of months have earned recognition with various "best workplace" awards. It could be the making of a trend.
It's natural for employees to feel good about the People Helping People philosophy at their credit unions, but these workplace awards look at more than philosophy in assessing the work environment. Most awards are presented after considering specific criteria.
The workplace awards result from feedback from the employees themselves. They don't include lists such as best financial institution and best credit union or most popular financial institution.
Here are the latest credit unions recognized for their work environment:
Rogue FCU, a $541 million asset credit union in Medford, Ore., was listed in Oregon Business Magazine's annual "100 Best Companies to Work For" in the large company (more than 100 employees) . Rogue has 193 employees. More than 14,000 employees from 263 companies participated in the survey, which considered work environment, management and communications, decision-making and trust, career development and learning; and benefits and compensation (Mail Tribune.com March 8).
Eli Lilly FCU (ELFCU), a $900 million asset credit union in Indianapolis, Ind., was one of two credit unions honored in "Best Places to Work in Indiana" by the Indiana Chamber of Commerce. The top companies were determined through employer reports and comprehensive employee surveys. Winners are selected in two asset size categories: small to medium companies with 15 to 249 U.S. employees, and large companies with more 250 or more employees nationwide. Eli Lilly FCU also was one of two credit unions recognized internationally by the American Society for Training & Development's (ASTD) BEST Award, the training industry's most prestigious recognition. (See Summit CU entry for more details on that award.)
Financial Center (Finance Center FCU), a $415 million asset credit union in Indianapolis, was the other credit union listed in the "Best Places to Work in Indiana. "Being named as one of the best places to work in Indiana is important for the future of Financial Center because it is our ability to retain quality staff that makes the difference when serving member," said Kevin Ryan, Financial Center president/CEO.
A+ FCU, Austin, Texas, was selected as a 2011 Top Workplace by the Austin-American Statesman, the second consecutive year the $857.5 million asset credit union has appeared on the list. "Our inward focus gives us an immense external advantage," said Kerry A.S. Parker, CEO. "Happy employees strive to provide exceptional service, which leads to satisfied members. A+ employees go the extra mile to build and develop their own skill sets as well as financial partnerships with the community." Workplace Dynamics, which conducted the survey, considered direction, execution, pay and benefits, career opportunities, management and working conditions. A+ received especially high ratings in career opportunities.
Unity One CU, Fort Worth, Texas, was named one of the Best Companies to Work for in Texas 2012 by the Best Companies Group last month. The survey of employees focused on eight areas: leadership and planning, corporate culture and communications, role satisfaction, work environment, relationship with supervisor, training and development, pay and benefits, and overall engagement. The credit union scored especially high on strategic planning, fair compensation, flexibility, cross-training and an attractive benefits package, said CEO Gary Williams. "This honor confirms that when you hire the right people and try to reward them personally, professionally and financially, great things can happen," he added.
Summit CU, Madison, Wis., with $1.671 billion assets, was one of two credit unions to receive the ASTA BEST award, ranking No. 8 out of 32 international award winners. The awards recognize organizations that demonstrate enterprise-wide success through employee learning and development each year. The recognition is based on Summit's overall commitment to and investment in employee learning, and proactive partnership in each individual's professional growth and development. "Whether it is internal Web-based learning, instructor-led learning, job shadowing, or external educational options, our employees have access to continuous, customized learning," said Kim Sponem, Summit CEO/president. "We believe that by providing employees with world-class training and encouraging ongoing professional development, we are positively impacting not only Summit's productivity and efficiency, but our overall culture as well. By extension, we demonstrate our commitment to our members and provide them with the best service possible."
- HARRISBURG, Pa. (3/9/12)--Keystone FCU, based in West Chester, Pa., has formed a South Chester County Advisory Group of several members of the Hispanic community to help the $80 million asset credit union support the Hispanic community and learn more about its needs, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway March 8). "Many people are unaware of the benefits of being a member in a credit union, and we want to change that" in the Hispanic community in Avondale and New Garden, said Christine Woods, president/CEO. "We offer a variety of financial services to our members and want to make sure we're delivering what the community wants and needs," she told PCUA. The credit union's Avondale branch has bilingual staff to serve members there …
- COLUMBUS, Ohio (3/9/12)--Credit Union of Ohio, based in Columbus, announced the winners of its fourth annual video scholarship competition Tuesday on the Ohio State University (OSU) campus. Eight OSU students received scholarships. The competition, themed "Think Bucks, Go Nuts," asked undergrads to use a video format to show how they manage their money and what they do with extra cash, as well as explain how the credit union can help. Winning the $5,000 first place was a team of three OSU students, Avathar Brar, Ryan Carlton and Joseph Magro, who submitted the video, "Pay It Forward." Each member of the team received about $1,660. The $1,500 second prize went to team members Sage Boggs, John Werenecke, Katie Drown, Rachel Rustemeyer and Stephen Doughten. They each received $500. The videos can be viewed at the credit union's Facebook page …
- INDIANAPOLIS, Ind. (3/9/12)--Eli Lilly FCU (ELFCU) has teamed up with personal finance expert and author Peter Dunn, known as Pete the Planner, to launch a contest focused on helping individuals change the direction of their lives. The contest is inspired by Dunn's principles from his book 60 Days to Change: A Daily How-To Guide with Actionable Tips for Improving Your Financial Life. The 500 contest participants--both members and nonmembers--will receive a free copy of the book if they commit to the 60-day program and report back with a written or video essay explaining the changes they realized in their financial lives. The contest runs from April 2 to May 31 and focuses on debt reduction, wealth accumulation and daily savings. Contestants get access to Pete the Planner and his expertise via weekly e-mails and exclusive Q&Q sessions on ELFCU's Facebook and Twitter pages. ELFCU and Dunn will award three winners $1,000 each to support their continued journey to permanent financial change. A dual contest will be held for credit union employees …
- MIDDLETOWN, Pa. (3/9/12)--MY CU Services LLC, Mid Atlantic Corporate FCU's payment services credit union service organization (CUSO), has hired Howard Stein as chief operating officer. Stein most recently served as senior vice president, chief information officer and director of operations at Graystone Bank, now part of Susquehanna Bank in Lancaster, Pa. While there, he served as division leader for operations, information technology and the bank's call center. Drew Kishbaugh, MY CU Services president/CEO, noted that the CUSO is seeing volumes and activity grow as more credit unions begin using the company's payment services program. Stein's priorities will be to grow the CUSO's existing payment services and develop new products and services, Kishbaugh said …
- MADISON, Wis. (3/8/12)--The World Council of Credit Unions (WOCCU) is reminding credit unions that there's not much time left for nominating individuals and organizations for its Distinguished Service Award. Nominations are due no later than March 30. The award will be presented by WOCCU during its World Credit Union Conference July 15-18 in Gdansk, Poland. The award honors exceptional achievements that have furthered WOCCU's vision of "improving people's lives through credit unions." Nominations must be made by a WOCCU member organization …
- MAUI, Hawaii (3/8/12)--Amy P. Waikiki, 36, formerly a teller at Kulia Ohana FCU, Wailuku, Hawaii, , was sentenced Monday in a U.S. District Court to 44 months in prison for allegedly embezzling $163,744 from the credit union. She pleaded guilty to two counts of embezzlement and a related offense. According to court documents, Waikiki allegedly stole funds from 34 member accounts through 224 unauthorized transactions while employed as a teller from Aug. 8, 2008 until June 25, 2009. She was terminated from the credit union position after being convicted in a state court on 10 theft charges of insurance premiums at a previous employer, an insurance company. The embezzlement was discovered after she left the credit union (Hawaii Reporter March 6) …
CLEVELAND, Ohio (3/8/12)--Two more people were sentenced Tuesday in a federal court in Cleveland for their roles in a $2.5 million loan fraud ring that led to the collapse of Eastlake, Ohio-based. St. Paul Croatian FCU in 2010.
Rose Ann Nikolovski, 48, of Eastlake was sentenced to one day in prison and ordered to pay $3,281,250 in restitution after pleading guilty to two counts of bank fraud. A fine was waived and she paid a special assessment of $100 at the hearing. Originally, Nikolovski, who is the ex-wife of the alleged ringleader, Koljo Nikolovski, was charged with seven counts of bank fraud and three counts of money laundering (The News Herald March 7).
Daniel Kocher, 72, of Euclid, was sentenced to one day in prison, ordered to pay $260,000 in restitution jointly and separately, and ordered to pay the $100 special assessment. His fine was also waived. He had pleaded guilty to one count of bank fraud.
They were among several defendants charged with allowing illegal transfers to their loan accounts at the credit union. Indictments indicate that more than 1,000 fraudulent loans totaling more than $70 million were made to 300 account holders between 2000 and 2010 (News Now Feb. 28 and May 17).
Twelve people have been charged in the case, including the former CEO of the defunct credit union, Anthony Raguz. He pleaded guilty to issuing the loans and accepting more than $500,000 in bribes, kickbacks and gifts from those who obtained the fraudulent loans.
St. Paul Croatian was the one of the largest credit union failures in history, costing the National Credit Union Share Insurance Fund $170 million. It was placed into conservatorship on April 23, 2010 and closed on the following May 1. At the time of the collapse, the credit union held $238.8 million in funds from 5,400 members. The collapse prompted lawsuits by the National Credit Union Administration to recoup some of the fund's losses.
NAPERVILLE, Ill. (3/8/12)--Forty individuals from Illinois credit unions are participating in the second year of the REAL Solutions Enhanced Financial Counseling Certification Program (FiCEP), funded by the Illinois Credit Union Foundation.
Two significant modifications were made in the second year of the program--which began yesterday--to allow more Illinois credit unions to participate, said the Illinois Credit Union League.
The enhancements include a reduction in cost and an increase in number and locations of proctored test sites. The Illinois foundation board of directors is covering the cost of enhancement. The only cost to Illinois credit unions is the purchase of the FiCEP books and exams from the Credit Union National Association (CUNA).
In the first year of the Illinois program, 23 individuals from 11 credit unions graduated as Certified Credit Union Financial Counselors (CCUFC).
As CUNA's financial counseling certification self-study program, FiCEP enables all credit union staff to become more confident in helping members build a stronger financial future. FiCEP is designed for credit union staff members who work in the financial counseling, collection and loan departments, or any others committed to helping members gain control of their financial futures.
Modeled after the CUNA Certified Financial Counselor Schools, FiCEP includes two parts of four learning modules each. When participants successfully complete the proctored exams for both parts, they become CCUFCs--ready to assist credit union members.
The Illinois league and foundation teamed up with the National Credit Union Foundation in 2009 to offer "REAL Solutions for Low Wealth Households." Currently, 87 credit unions in the state are participating. REAL stands for Relevant, Effective, Asset-building, Loyalty-producing, and is operated by 35 leagues representing 37 states. More than 1,000 credit unions are part of the program.
WICHITA, Kan. (3/8/12)--State-chartered credit unions in Kansas grew in nearly every performance category during the fourth quarter, except for one that reflects past-due accounts, according to the Kansas Department of Credit Unions' (KDCU) quarterly report.
Total loans at the state's 80 credit unions rose 6.4% year-over-year to $2.88 billion. Assets increased 8% to $4.43 billion. Credit union membership also climbed by 1,434 members--to 574,471 (The Wichita Eagle March 7).
The largest change was in delinquencies, which during the 12-month period fell 23% to $28 million. The steepest year-over-year drop in delinquencies occurred between the December 2010 and March 2011 period, Michael Baugh, KDCU financial examiner administrator, told the Eagle.
"Kansas credit unions have continued to support our members' loan needs, even as other financial institutions have pulled back in lending," Bob Mayes, vice president of member and strategic services at the Kansas Credit Union Association, told News Now. "The drop in delinquency demonstrates the continued commitment of Kansas credit unions to effective lending and solid underwriting processes."
Kansas credit unions' return on average assets was 0.8%, compared with 0.71% in the fourth quarter of 2010.
Because credit unions set aside fewer funds as provisions for loan losses, that likely boosted revenue growth, Baugh told the paper. Also, the National Credit Union Share Insurance Fund didn't assess credit unions a premium, he added.
For 2012, Kansas regulators said their biggest concern is rising interest rates. Credit unions that have mortgages with fixed-interest rates or government- or mortgage-backed securities with low interest rates could see downward pressure on their net interest margin, John Smith, KDCU's administrator, told the paper.
LANSING, Mich. (3/8/12)--Michigan's credit unions increased their member business loans (MBLs) by 21.7% in 2011, according to the Michigan Credit Union League (MCUL) and Affiliates in announcing year-end performance results.
The state rate of MBL growth is more than three times the annual increase for all credit unions, said the league. The increased support of Michigan's small business from credit unions comes at a time when bank lending has remained sluggish, since 2008. The league cited statistics from the Federal Deposit Insurance Corp. (FDIC) , reporting that U.S. banks' small business lending continued to decline in fourth quarter 2011, with a year-over-year bank decline of 4.3%.
"Credit unions continue to step up and support both small businesses and local families, as other institutions are stepping back," said league CEO David Adams. "Michigan still has a long way to go to recover from the recession, but our credit unions are demonstrating that they can be counted on to support local economic growth and development as we begin to turn the corner."
The Credit Union National Association and credit unions are urging Congress to raise credit unions' MBL cap to 27.5% of assets from 12/25%. Doing so would help inject $13 billion into the economy and translate into 140,000 new jobs without cost to the taxpayer.
Michigan credit unions saw strong growth in several areas, according to new data. Their total assets rose to an all-time high of $41.9 billion on Dec. 31, up $383 million for fourth quarter and $1.9 billion for the year, said the league. Overall deposits rose 4.8% in 2011, growing faster than lending. The industry's loan-to-share ratio declined to 64.33% from 2010's ratio of 67.26%.
Loans in the state totaled $23.2 billion by year-end, an annual growth rate of 0.2% over 2010 and recouping a decrease in total loans from the first quarter of 2011. During fourth quarter, consumer lending increased by $130 million for first home mortgages, $55 million for unsecured gift cards and $100 million for used cars, said the league.
New bankruptcy filings dropped 24.3% during the year, with the state's credit unions reporting 13,613 members filing for bankruptcy. Loan charge-offs due to bankruptcy dropped to 29.19% from 31.22% in 2010--a 6.5% improvement.
"In the wake of significant growth in several key areas last year, Michigan credit unions began 2012 in a very strong position," Adams said. "Credit union savings and lending are growing at healthy rates, and are showing some of the strongest results in several quarters."
Credit union membership rose to 4.47 million as of Dec. 31, with Michigan credit unions adding 24,751 new memberships and 87,209 new checking accounts in fourth quarter. It was the strongest fourth quarter growth in several years, despite the state's declining population, the league said. For 2011, the state's credit unions added 87,209 new checking accounts.
"Our membership growth shows that more families across our state and all over the nation are embracing what credit unions offer in the way of great rates and lower fees as they continue to look for ways to stretch every dollar," Adams said.
AUGUSTA, Maine (3/8/12)--Nearly 50 credit union representatives from throughout Maine made a trip Thursday to the state capital in Augusta to participate in Maine Credit Union Day at the State House.
John Murphy, president of the Maine Credit Union League, left, catches up with a familiar face, State Rep. Ray Wallace (R-Dexter), who is a volunteer serving on the Supervisory Committee at Maine Highlands FCU in Dexter, at Maine Credit Union Day at the State House in Augusta. Wallace is one of six credit union volunteers serving in the Maine Legislature. (Photo provided by the Maine Credit Union League)
The morning-long event attracted nearly 100 legislators, who visited with credit union representatives in the Hall of Flags, according to the Maine Credit Union League. One legislator called the opportunity to meet with his local credit union "a chance to touch base on important issues and get feedback on the economy from their point of view. Credit unions are so connected with their communities and members, which provide a great perspective and insight into how many of my constituents are doing."
Another legislator told the league: "Maine credit unions are a vital part of helping thousands of Maine people succeed financially. I told the credit unions I spoke with how much I appreciated the benefits and the services they provide to members."
Highlights of the day included watching the legislature in session, meeting with legislators and being recognized with a joint resolution by the Maine House and Senate.
The resolution was "for the positive contributions and significant role [credit unions] have made on the lives of Maine citizens and their communities for more than 91 years. Your service and dedication to this state is a tribute to many of those values and principles that we all hold dear."
The resolution also honored Maine's credit unions for their "leadership on ending hunger in Maine, by raising a record-setting $447,000 in 2011, and for the significant contributions credit unions provide to the people of Maine."
"It was great that, even in less than ideal weather conditions, we again demonstrated a strong presence at the State House and reinforced the commitment and involvement that Maine's credit unions have in legislative affairs," said John Murphy, league president, referring to snowy weather.
WASHINGTON (3/8/12)--Consumer focus-groups have reacted favorably to extra-thin prepaid gift cards being pilot-tested at three Arizona credit unions.
The cards are offered through ATMs by Credit Union West, Glendale; MariSol FCU, Phoenix; and Pinal County FCU, Casa Grande (News Now Jan. 12).
Visa was initially concerned that consumers would consider the thinner cards to be worthless and throw them away. But consumers correlated the Visa brand with the card, and understood the value, Visa said (American Banker March 6).
Consumers also found the cards easier to store than traditional cards, Visa said.
Better ATM Services, which initiated the pilot program in partnership with Visa, said it will offer the test at the credit unions through the second quarter, then test the gift cards at banks.
Eventually the cards will be marketed to underbanked consumers, Better ATM Services said.
FORT WAYNE, Ind. (3/8/12)--A cleaning person contracted by Partners First FCU, Fort Wayne, Ind. was injured Wednesday morning after being attacked by two people trying to rob the credit union.
Fort Wayne Police were called at 7:16 a.m. to the $240 million asset credit union, where an employee of a cleaning company claimed to have been attacked and forced inside the credit union at gunpoint.
No cash was stolen, though the investigation continues, Fort Wayne police said in a press release.
The suspects allegedly hit the cleaning worker repeatedly during the robbery attempt and fled in the worker's vehicle, the release said. Officers later recovered the vehicle.
The worker was in fair condition at the scene, police said.
Police had not released surveillance video or descriptions of the suspects as of Wednesday morning.
The incident remains under investigation by the Northeast Indiana Bank Robbery Task Force, which includes members of Fort Wayne Police, the Allen County Sheriff's Department, Indiana State Police and the Federal Bureau of Investigation.
COLUMBUS, Ind. (3/8/12)--Centra CU, Columbus, Ind., has put in place several initiatives to help victims of tornadoes that struck Indiana Friday.
Christi Lee, left, and Amber Vogt are among Centra CU employees who took paid time off to volunteer for the Salvation Army to help victims of the tornadoes that struck Indiana last weekend. Centra CU, Columbus, Ind., is offering aid to tornado victims through emergency loans and donations. (Photo provided by Centra CU)
The credit union is offering a tornado-relief loan designed as an emergency fund for members who have sustained tornado damage. The loan is $1,000 unsecured with no payments for six months. It is offered at 6% annual-percentage rate (APR) for six months; 7% APR for 24 months; and 8% APR for 36 months. Members also can apply for additional funds.
Centra CU has established accounts for members to make donations to the American Red Cross or Salvation Army, two of the primary organizations providing disaster assistance in southern Indiana.
The credit union is working with the Clark County Rural Electric Membership Corp. to set up an account for rural cooperatives to aid the tornado relief efforts.
Centra is providing employees paid time off to volunteer for the Salvation Army.
At least 42 tornadoes swept across 10 states on Friday, the National Weather Service said.
TOPEKA, Kan. (3/8/12)--Kansas Air Guard CU in Topeka is using a craigslist-type online classified advertising section on its website to connect with members.
With $5 million in assets and three employees, human resources are stretched pretty thin at the credit union, said Manager Becky Razak. Maintaining a Facebook or Twitter account isn't a reasonable option, she added.
But Razak said her nephew helped open her eyes to the power of social media. "The more often our members come in touch with us, the more likely they are to do business with us," Razak said.
An online classified page offered the credit union the opportunity to build stronger relationships without the daily time commitment of Twitter or Facebook, Razak said. A Kansas Air employee scans the classified form filled out by members and e-mails it to the credit union's core processor, who posts the ads on the website.
The concept is also a good fit for the Kansas Air Guard CU membership. The credit union serves members of the Kansas Air National Guard. Members typically work nine-hour days and have a work day off every other week. Many members have jobs on the side offering services ranging from mechanical and auto body work to website design and cake decorating, Razak said.
The classified page, called the CoyoteList, has been live for about three weeks. Feedback has been very positive, with members downloading a steady stream of listing sheets, Razak said.
"It's very compatible for the nature of our membership," Razak said. "There's also an element of trust. Normally, you're going to have anxieties [about whether] someone is going to do a good job at a fair price. If it's someone you work with, I think you're more likely to work out those issues. The credit union also has a relationship of trust."
ALBANY, N.Y. (3/8/12)--The State of New York has until Monday to respond to amicus briefs filed in December before the New York Court of Appeals by the Department of Justice, the Credit Union National Association and the Credit Union Association of New York, among others, and to Hudson Valley FCU's challenge of the state's mortgage recording tax (MRT).
Hudson Valley, a $3.2 billion asset credit union based in Poughkeepsie, N.Y., is appealing two lower courts' decisions that denied its challenge to the MRT. It had filed suit on May 12, 2009, in the New York Supreme Court, a lower trial court, against the New York State Department of Taxation and Finance.
The lower court, in dismissing the case, said the MRT was a tax on the "privilege" of filing the mortgage under state law. The case then went to the Appellate Division, which upheld the lower court ruling. The credit union appealed to the New York Court of Appeal, the state's highest court, which agreed Oct. 18, 2011, to hear the appeal.
The credit union maintains that the Federal Credit Union Act exempts federally chartered credit unions from the state tax, which it argues is not considered a "privilege tax" under federal law. Instead, credit unions' federal tax exemption and applicable U.S. Supreme Court rulings should control in the issue, it said.
The Department of Justice, in an amicus brief filed Dec. 19 by Preet Bharara, U.S. Attorney for the Southern District of New York, New York City, supported the credit union's interpretation. In its brief, the Justice Department argued that the lower courts' interpretation of the Federal Credit Union Act (FCUA) "is inconsistent with the statute's plain language" exempting federal credit unions from all taxes except real property taxes and tangible personal property taxes.
"The lower courts misinterpreted Section 122 of the FCUA Act," said the Justice Department, adding the act "expressly immunizes federal credit unions from all state taxes, with the limited exception of real property taxes and tangible personal property taxes." It also pointed out, "The United States has an interest in the proper interpretation of the FCUA and in preserving the tax exemptions afforded federal credit unions by Congress."
The appellate division's decision "conflicts with decisions of other courts interpreting the FCUA to exempt federal credit unions from all taxes not expressly authorized under the statute," said the Justice Department. "Under the clear terms of the FCUA, because the MRT is not a real property or tangible personal property tax--the only two taxes permitted under the FCUA--it cannot be levied against federal credit unions such as Hudson Valley," the document said.
"Even if the FCUA exempts federal credit unions from only certain categories of taxes, as the Appellate Division erroneously concluded, federal credit unions are still exempt from paying the MRT because the MRT can be characterized as a tax on a federal credit union and its property, two of the categories prohibited by the FCUA under the Appellate Division's construction of the statute," said the Justice Department.
Because the U.S. Supreme Court "has characterized mortgage recording taxes similar to the MRT as a tax on the mortgage, the MRT can be construed as an exempted tax on intangible personal property. The MRT is also a tax on a federal credit union itself when applied to mortgages issued by the federal credit union, and thus is exempted…," said the document.
New York's MRT requires a tax of 50 cents for each $100 of debt secured by a mortgage. Most states charge only administrative fees for recording a mortgage.
Others amicus briefs for the credit union were filed by the Federal Housing Finance Agency (see "HFA seeks to back CU in N.Y. mortgage tax appeal" in News Now's Jan. 18 issue); the Credit Union Association of New York and the Credit Union National Association ("CUANY, CUNA file amicus brief in mortgage recording tax case appeal," News Now Dec. 20), and the National Association of Federal Credit Unions.
RANCHO CUCAMONGA, Calif. (3/8/12)--CO-OP Financial Services has selected Catalyst Corporate FCU, Plano, Texas, to continue to provide payment services for CO-OP's client credit unions.
CO-OP Financial Services, which provides ATM network and payments services for credit unions nationwide, previously used payment services from Western Bridge Corporate FCU.
Catalyst Corporate began providing those services after it acquired the assets of Western Bridge Corporate in December from the National Credit Union Administration (NCUA), which held the assets in receivership.
CO-OP Financial Services President/CEO Stan Hollen said the move reflects CO-OP's support for corporate credit unions and their "key role" in the future of the credit union movement.
Catalyst's settlement services include check clearing and automated clearinghouse, electronic funds transfers and ATM transactions. Catalyst also markets CO-OP's network access and other services.
- PITTSFIELD, Mass. (3/7/12)--Felisa Kazimierczak, 43, of Adams, Mass., a head teller at Pittsfield, Mass.-based Greylock FCU, pleaded not guilty Monday to charges of embezzling $58,000 from the credit union, falsely reporting an extortion crime and witness intimidation. Kazimierczak allegedly told police that she found a note on her car threatening her teenage daughter with harm unless she handed over money. However, police said video surveillance showed no one near the car. She has worked for the credit union for 11 years (Associated Press Newswires March 6) …
- EAST ST. LOUIS, Ill. (3/7/12)--A former vice president of operations and loan officer at Alton (Ill.) Employees FCU has been sentenced to eight months in federal prison for defrauding the credit union out of $72,000. Kalicza Tegel-Mills, 26, of Plainview had pleaded guilty in November to one count of defrauding the credit union by allegedly increasing personal loan amounts without supervisory approval or proper documentation and wrongly posting payments to her and her husband's credit card accounts. She also allegedly used the money to buy a truck. Tegel-Mills also was sentenced to eight months of house arrest and ordered to repay $72,010 to the credit union. She repaid $62,842 at her sentencing hearing (STL Today and The Alton Telegraph via Associated Press Newswires March 6) …
- BOULDER, Colo. (3/7/12)--Boulder Valley CU, based in Boulder, Colo., was awarded the Education Credit Union Council's 2011 "It's About People Helping People" Lifetime Achiever Award for its financial literacy program. The more than $240 million asset credit union integrated student credit unions into the school district's financial literacy curriculum and incorporated classroom presentations to provide an educational foundation. Its primary focus was to give students an opportunity to manage their own accounts and establish credit responsibility skills before graduation. The program also incorporated on-line financial education modules. Students were trained and worked at the student branches; drafting class students designed the student branch office; media students developed viral ads to raise awareness of the benefits of joining the student credit union; and selected students served on the credit union's advisory board to develop business plans and marketing strategies …
ASBURY PARK, N.J. (3/7/12)--Many of the nation's largest banks aren't lending to homebuyers, even though they are well-capitalized, says a New Jersey Press Media investigation cited in an article in Sunday's Asbury Park (N.J.) Press.
The article, "Mortgage Loans Prove Hard to Get," is the first of a two-part series on banks' tight lending despite their position of "sitting on a mountain of cash they've accumulated since the recession." The article was cited by the New Jersey Credit Union League in the league's newsletter, The Daily Exchange (March 5).
Instead of lending to homebuyers, big banks are busy refinancing existing mortgages, paying off debt and cutting expenses, even after receiving bailout money from taxpayers, the article said.
The new lending environment is a turnaround from five years ago, when banks made mortgage loans to nearly everyone, said Park Press. Borrowers looking to buy a home in the current environment are finding banks scrutinizing every financial move they make. The changes have slammed the brakes on the housing market, the article added.
It cites examples of New Jersey residents with good income, good credit and qualifying down payments who are encountering difficulties in the mortgage-qualification process.
The league reported that the article also said banks have seen mortgage lending drop because of tighter restrictions from lenders and government agencies, less demand from potential buyers and low interest rates, the league reported.
MADISON, Wis. (3/7/12)--As banks introduce another round of fees, media across the nation continue to report on credit unions' membership growth due in part to consumers' disillusionment with bank fees. Newspapers in Ohio, Wisconsin, Los Angeles, Georgia and more, as well as CNNMoney, reported that credit unions grew in membership.
"Credit unions hit a record number of members last year, as a growing number of consumers grew fed up with the fees at the nation's biggest banks and took their money elsewhere," said CNNMoney (March 1). Credit unions added 1.3 million new memberships in 2011, bringing total membership to a record 91.8 million by the end of 2011. The article noted that much of the growth was in fourth quarter and spurred by consumer movements like Bank Transfer Day. It also referred to a J.D. Power and Associates report that showed a similar exodus from big banks to smaller banks and credit unions.
Ohio's credit unions also benefitted from banks' fees, said the Dayton Daily News Monday in the article, "Bank fees push customers to area credit unions." "Consumers frustrated with bank fees and services helped area credit unions add more than 35,000 new members last year," it said. More than 40 credit unions in a seven-county area finished the year with a record 491,160 members--a 7.6% increase over 2010 and an 11.3% increase over membership in 2009.
The Ohio Credit Union League told the Daily News that although credit unions account for about 7% of all deposits in Ohio, many are growing their memberships through word of mouth and frustration with bank fees and policies.
Jennifer Tschudi of Kettering, Ohio, said she joined Wright-Patt FCU, a Fairborn, Ohio-based credit union, and closed her Bank of America account in October because the bank was not meeting her needs and she was dismayed by its announcement in September that it would charge a $5 monthly debit card fee. That fee was rescinded after the public outcry it prompted. The article reported on Bank Transfer Day's impact, which prompted 441,000 new memberships in September and October, it said.
"The discontent with big banks in 2011 was a boon for credit unions across the nation, including many in Wisconsin," reported The Post-Crescent in Appleton, Wis., Monday. Although the area didn't get as big a membership growth last year as counterparts elsewhere in the nation, that may be "because we have such a strong credit union presence," Cathie Tierney, president of Community First CU, Appleton, told the newspaper.
Statewide the number of members increased by 39,421 over last year, said the state's Office of Credit Unions. In the month leading up to Nov. 5's Bank Transfer Day, Wisconsin credit unions added 14,700 new members and $102 million in new deposits, said the Wisconsin Credit Union League in the article.
Capital CU, Kimberly, Wis., added 800 new members last year to reach 33,000. Lakeview CU, Neenah, added 50 people "the best year we've had in a long, long time," Pat Lowney, Lakeview president, told the newspaper. He attributed the increase to the increased visibility and awareness of credit unions. Member service representatives told him people joined because of dissatisfaction with big banks.
Forty percent of the state's population belongs to a credit union.
The Los Angeles Times' Morning Money column also noted that credit unions doubled new memberships last year as major banks were targeted by the Occupy Wall Street Movement and the Bank of America's plans for the debit card fee were announced. "Consumers fed up with the rising tide of bank fees helped the nation's credit unions more than double their number of new customers last year," the article said, citing National Credit Union Administration's statistics.
In Savannah, Ga., the Savannah Morning News reported that statewide, deposits grew 10.5% last year "driven largely by new fees and account changes imposed by the large banks." It said the results of four local credit unions--Georgia Heritage FCU, Georgia's Own CU, GeoVista FCU and Workmen's Circle CU--increased their deposits and assets in 23011.
MURPHY, N.C. (3/7/12)--A branch of State Employees' CU (SECU) in North Carolina sustained some damage from last weekend's widespread tornadoes that touched down in parts of the Midwest, Southeast and Atlantic Coast regions.
Fortunately, there was only minimal damage to the Murphy, N.C., branch of SECU as a result of a tornado, Sandra Jones, SECU vice president-member education, told News Now after speaking with Bobby Hall, SECU senior executive vice president.
"There was no structural damage, only minor damage to the drive-thru area and some ceiling-tile damage due to water leakage," Jones explained. "Power was out over the weekend, but it was restored mid-morning on Monday and the branch was able to reopen before lunch. Repairs are already underway."
Also, there were no reports of damages to credit unions in Tennessee, Trish Patterson, vice president for education/information at the Tennessee Credit Union League, told News Now.
Two significant bouts of severe weather hit Tennessee Friday but no deaths were reported. Roughly 75 tornado warnings were issued in the state, with several tornadoes causing injuries statewide (weather.com March 3).
Storms and tornadoes that struck the Chattanooga, Tenn., area Friday injured at least 33 people and did damage to hundreds of homes--making it the second-largest outbreak in the past 25 years, according to local experts (timesfreepress.com March 4).
MADISON, Wis. (3/7/12)--Growth in mobile banking and payments is being driven by younger consumers, according to a new study. Most adults are more reluctant to bank over their cellphones.
In an online survey of 504 U.S. debit cardholders conducted in January, Auriemma Consulting found that 40% of respondents had a cell phone capable of performing mobile-banking tasks. Of those, (84%) used their smartphone to bank within the previous year (PaymentsSource March 2).
Younger consumers are more likely to download a mobile-banking app. The study indicated that 43% of respondents younger than 45 had downloaded a mobile app from their financial institution within the previous year, while only about 22% of those older than 45 had done so.
Most respondents expressed some discomfort in making purchases with their mobile phones. About 47% said they were very or somewhat uncomfortable, 34% were very or somewhat comfortable, and 19% were unsure.
Among respondents younger than 45, about 48% said they were comfortable making purchases with their mobile phone, compared with 21% of those older than 45 who said the same.
The top reason respondents cited for their discomfort making purchases with their mobile phone was uncertainty about the technology's security (58%). That was followed by identity theft concerns (55%), fear of losing the phone and sensitive data (52%), "not needing a new way to make payments" (43%), distrust of the mobile-payment systems (34%), concern that it "may cost money" (27%), the belief that it "would not save any time" (21%) and they "do not understand it" (15%).
Saving time (51%) was the most common reason respondents listed for making payments through mobile, followed by "like new technology" (44%), it "would be free" (41%), it would create an option for a physical wallet (36%), they "understand it" (33%), it would provide greater security (31%), and it would be a more convenient way to pay (27%).
As the banking industry and other players develop products for banking and shopping with smartphones, "mobile payments are inevitable," Auriemma said.
About 75% of respondents with mobile-banking capabilities used their smartphone to check their account balance, 36% paid a bill, 32% received a bank notification, 31% paid by phone and also made a deposit, and 3% transferred funds. Some 17% of respondents said they made no mobile payments.
Until mobile banking and payments offer tangible consumer benefits such as saving time and money and provide a more-secure method for conducting transactions, mainstream consumer adoption is unlikely to materialize, Auriemma concluded.
DALLAS (3/7/12)--When Gen Yers are financially sound, they also are likely to be socially sound, said Jared Cahill, CEO of On Your Way of Dallas, a reward-based, Web program that helps credit unions attract, engage, educate and retain Generation Y (ages 18-32) members.
Kabani travels the world talking about social and technology trends. She is CEO of The Marketing Zen Group of Dallas and author of "The Zen of Social Media Marketing," an area in which many credit unions are eager to gain traction.
"Unfortunately, GenY also has become known as Gen Debt," Cahill told the TV host. "Step into a financial hole when you are young, and it's hard to get out."
Asked by Kabani to distinguish credit unions from banks, Cahill responded: "They have distinct advantages. Credit unions are a cooperative not-for-profit, so rates are better, and they're focused on customer service and relationships."
Kabani and Cahill agreed that too many young adults--"through no fault of their own"--are not learning in school, at home, or even in college, how to effectively handle their money in economically challenging times.
"Credit unions pride themselves on building respectful relationships with their members," Cahill said. "We want to help GenYs establish relationships with credit unions, which demonstrate as an industry their willingness to invest in their members' long-term well-being."
Young adults can be turned into financially literate borrowers, he told Kabani. "Credit unions can make better-qualified loans and lower delinquencies for this fiscally challenged demographic," Cahill added.
MADISON, Wis., and EAST BRUNSWICK, N.J. (3/6/12)--CUNA Mutual Group says it will seek an appeal of a federal judge's ruling Thursday that it must pay an insurance bond claim stemming from mortgage fraud that caused the collapse of CU National Mortgage.
The fraudulent mortgage loans cost 28 credit unions, Fannie Mae and others nearly $140 million and sparked a number of lawsuits.
The U.S. District Court for the District of New Jersey, a lower trial court, found in favor of Sperry Associates FCU, a $307 million asset credit union based in Garden City Park, N.Y., which had sued CUMIS Insurance Society Inc. to recover losses the credit union says was covered under its fidelity bond insurance. At issue was whether an insured credit union's claim for fraud committed by third parties in a mortgage scheme was covered under the insurance bond.
"The trial court's decision is unfortunate, and represents an overly broad interpretation of who is covered under the bond's Employee Dishonesty coverage," said Phil Tschudy, media relations manager for CUNA Mutual Group. "But in cases involving complex legal issues like this one, it is often up to the appellate courts to render a final decision, and we intend to seek appellate review in this case," he told News Now.
Sperry had entered into a mortgage servicing agreement with CU National Mortgage, a subsidiary of U.S. Mortgage Corp. Under the agreement CU National Mortgage would sell the credit unions' mortgage loans to the secondary market, said the court document.
However, CU National Mortgage instead sold 189 mortgages of Sperry and 27 other credit unions without authorization to Fannie Mae. CU National Mortgage and U.S. Mortgage Corp filed for a Chapter 11 bankruptcy in 2009, and Michael McGrath, of Pinebrook, N.J., president of the U.S. Mortgage Corp. and a principal of CU National Mortgage, was sentenced to 14 years in prison in last year for using the mortgage sale proceeds to prop up his business (News Now Feb. 25, 2011).
In his opinion Thursday, U.S. Senior District Judge Dickinson R. Debevoise wrote that both CU National Mortgage and McGrath operated as employees under the "servicing contractor" definition of the bond. CUMIS argued that the servicing contractor definition had not applied because the fraud was not perpetrated while performing services for the credit union and was therefore outside the bounds of mortgage servicing activity covered under its bond.
"CUMIS' argument is unavailing because it ignores that the dishonesty was within the scope of a performed duty: but for the covered activity of collecting and recording loans, the fraud could not have been originated, perpetrated, nor concealed," Debevoise said in the opinion.
He noted that "this is clear based on an examination of McGrath's affidavit which attests that CUN falsely represented to Sperry that the loans remained in their servicing portfolio and continued to be serviced by CU National as provided for in the service agreement; CUN engaged in this conduct as a servicer which allowed CU National to continue to make the unauthorized loan sales without being discovered by Sperry."
MADISON, Wis. (3/6/12)--RBS Securities Inc. has responded to a lawsuit filed by CUNA Mutual Group insurance companies seeking to require it to buy back $72 million in mortgage-backed securities that the insurance companies bought before the financial crisis hit.
The suit, filed by CUNA Mutual Insurance Society, CUMIS Insurance Society, and MEMBERS Life Insurance Co., seeks rescission of 15 certificates in 10 separate residential mortgage backed securities (RMBS) they bought.
CUNA Mutual's complaint alleges that between 2004 and 2007, RBS had made "representations about the credit quality of the pools of mortgage loans collateralizing those RMBS." The supporting documents for the investments contained "untrue or misleading statements concerning the loans underlying each separate RMBS offering," and the RMBS performed poorly and the certificates lost much of their value, CUNA Mutual maintained in its complaint.
RBS' motion to dismiss, filed Feb. 15 in the U.S. District Court for the Western District of Wisconsin in Madison, said the company "did not make any of the alleged misrepresentations" in the suit. "To the contrary, each of the alleged misrepresentations at issue was made either by originators (with respect to underwriting guidelines), borrowers (with respect to owner-occupancy), ratings agencies (with respect to credit ratings) and appraisers (with respect to loan-to-value ratios). Indeed, RBS specifically disclaimed the making of these representations."
RBS's rebuttal also said that allegations aren't actionable misrepresentations. "The mere fact that the certificates suffered a decline in value in the intervening six-plus years that CUNA owned them does not plausibly suggest that misrepresentations were made in the offering documents," said RBS.
RBS also said nine of the 15 certificates at issue are time-barred and that CUNA Mutual's demand for a jury trial be "stricken because it has no right to a jury trial on its rescission claim."
"We disagree with the RBS claims and will respond accordingly in our court filings," said Rick Uhlmann, senior manager, media relations, at CUNA Mutual Group. "Again, the action we are taking is in the best interests of CUNA Mutual Group and its policyholders," he told News Now.
Five lenders who sold subprime mortgages have filed for Chapter 11 bankruptcy, according to an earlier court document. They are Washington Mutual, First Magnus Financial Corp., Delta Funding Corp., New Century Mortgage Corp., and Fremont Investment & Loan.
MADISON, Wis. (3/6/12)--About 80% of credit unions surveyed believe payment protection products are a good value for their members and increase their comfort level in obtaining a loan, according to a white paper published by CUNA Mutual Group.
"Payment Protection: Member Value, Marketing Combine for Win-Win" examines credit unions' perceptions of payment protection products, their importance to members, cross-selling perceptions and sales culture. Research showed that, in addition to accommodating members' financial needs, payment protection also addresses the loss of non-interest income for credit unions. More than 330 credit unions were included in the research.
Some statistics uncovered by the 2011 report include:
- About 92% of surveyed credit unions say a cross-sell culture is very important to their success;
- Only 33% of the credit unions surveyed say they are satisfied with their cross-sell efforts;
- Roughly 59% of these credit unions' members look to their credit union for help or advice regarding their financial situation, with members seeking information on financial products and services; and
- About 83% of credit unions say members will repurchase once they've been sold a product.
A PDF of the white paper can be found on CUNA Mutual Group's web site. Use the link. Also, Rich Trace, director, product management, CUNA Mutual Group, provides an overview of the white paper's findings in a short video. Use the link.
WASHINGTON (3/6/12)--A group of retailers and merchants organizations have filed a motion for summary judgment in a Washington, D.C. federal court, challenging as invalid the Federal Reserve Board's interchange transaction fee regulation and network non-exclusivity regulation mandated by the Dodd Frank Act.
NACS, National Retail Federation, Food Marketing Institute, Miller Oil Co. Inc., Boscov's Department Store LLC, and the National Restaurant Association--a group of merchants and trade associations that represent them--filed the motion Friday in the U.S. District Court for the District of Columbia, seeking a summary judgment declaring the interchange rule and a network non-exclusivity regulation invalid.
The motion for summary judgment claims the rules exceed the authority granted to the Fed by Congress, and that the final rule is "arbitrary, capricious, an abuse of process and otherwise not in accordance with the law in violation of the Administrative Procedure Act," said the motion filed.
The merchants' motion for summary judgment argues that the statute directs the [Federal Reserve] Board to adopt regulations limiting interchange transaction fees, and the specific amendment required "that debit card interchange fees be reasonable and proportional to the cost incurred by the issuing bank (the 'issuer') with respect to the debit card transaction."
The statute directed the board to take into account certain statutory considerations, the motion said. "Chief among them, the board must distinguish between two categories of costs associated with debit card transactions: (a) the incremental cost incurred by an issuer for its role in the authorization, clearance or settlement of a particular electronic debit transaction, which must be included in the board's interchange fee standard; and (b) other costs incurred by an issuer which are not specific to a particular electronic debit transaction, which must be excluded from consideration."
"After receiving significant pushback from the banking community in the comment process, the board reversed course and adopted a final rule that greatly expanded the costs allowed in the interchange fee standard" and "invented a third category of costs over which it claimed unbridled discretion to consider in its standard," the document alleged. The rule "doubled or even tripled the interchange fees allowable," which resulted in "shifting billions of dollars in additional costs from the issuing banks to merchants that accept debit cards."
The board--"in willful disregard of the plain text and purpose of key statutory provisions," said the complaint--created "a third category of costs found nowhere in the statute's plain text--costs 'that are specific to a particular electronic debit transaction but that are not incremental costs related to the issuer's role in authorization, clearance and settlement.'"
As for network fees--the fees charged by Visa, MasterCard and other debit card networks for their role in processing those transactions--"the board is required to adopt regulations prohibiting debit card networks and issuing banks from 'restricting the number of payment card networks on which an electronic debit transaction may be processed' to fewer than two unaffiliated networks."
The final rule "improperly implements this network non-exclusivity provision by requiring issuers to maintain two unaffiliated networks on each debit card issued to consumers. By focusing on the debit card, the board loses sight of the statute's requirement of network choice as to each electronic debit transaction.
The motion noted that "because of technological limitations and prevailing practices in the market, the majority of merchants are not enabled to accept both signature and PIN transactions." The final rule would mean "entire categories of debit card transactions--such as internet and telephone transactions, hotel stays and car rentals--are not afforded the competitive network choice required by statute," said the merchants group.
The interpretation "deprives nearly 75% of merchants that accept debit cards but that are not enabled for PIN transactions of any competitive network choice." Thus, said the merchants, "the network non-exclusivity rule contravenes both the letter and the purpose of the Durbin Amendment and cannot survive judicial review."
MADISON, Wis. (3/6/12)--Eight credit unions in the Midwest and the South sustained some form of damages--mostly minor--during last weekend's tornadoes. While most credit unions appear to have emerged relatively unscathed, they remain on alert to help members impacted by devastating storms in 10 states.
At least 39 people were killed in five of the states hit by 74 tornadoes. The deaths were in Kentucky, Indiana, Ohio, Alabama and Georgia (USA Today March 5).
"The CUMIS Property and Casualty Disaster Team has been in touch with all impacted leagues, as well as those credit unions we identified as being in the path of this past weekend's storms," said Phil Tschudy, media relations manager for CUNA Mutual Group.
"Although we've identified eight credit unions that sustained some form of damage, all but one report those damages to be minor. The one exception is to a branch facility in North Carolina that sustained damages to the exterior," Tschudy told News Now. For confidentiality reasons, he could not name the credit union.
Five tornadoes touched down in Ohio on Friday (weather.com March 3). At least three deaths have been reported. However, no Ohio credit unions appear to have suffered any structural damage, according to Patrick Harris, the Ohio Credit Union League's director of media relations. "We appear to have been very lucky," Harris told News Now.
About 80% of the town of Moscow, Ohio, was devastated by a tornado, said Karen Riels, vice president of marketing and operations for Classic FCU, Amelia. Moscow is about 10 miles from Amelia.
Most Moscow residents were not allowed to access their homes on Sunday, Riels said. Much of the area was without power through the weekend.
No homes owned by Classic FCU employees suffered major damages, but the credit union was working Monday to help members in the early stages of the recovery process. The credit union is waiving fees for check reordering and easing password standards for members logging into their accounts. "We're doing anything we can to simplify processes for them," Riels said.
Violent storms also tore through southern Indiana, killing at least 14 people and damaging several small communities, according to weather.com.
Substantial damage was sustained in Clark County, Ind., where Clark County Indiana Teachers FCU is located, said Wanda Holdaway, manager of the Jeffersonville, Ind., credit union. She heard from one member whose car was crushed during the storm. "I am waiting to hear from more people," Holdaway said. "Considering our field of membership, I know there will be more."
Thirteen tornadoes touched down in Kentucky, killing at least 12 people, according to weather.com.
The L&N FCU branch in Erlanger, Ky., located in Kenton County, suffered no damage, although "the tornadoes touched down all around us," Laquinta Strickland, branch operating officer, told News Now.
Strickland said she had heard of one member whose home had been destroyed. No branch employees' homes were damaged, she said.
At least two confirmed tornadoes struck the northern part of Alabama Friday, damaging homes and other buildings and businesses (weather.com March 3).
A deadly tornado that struck two counties was 1,000 yards wide--or the length of 10 football fields put together--and resulted in the death of one Alabama man (wsfa.com March 5). Alabama credit unions also appear to have escaped unharmed from the weekend tornadoes.
"As of right now, after checking with just about all of the state's credit unions, the tornadoes did not damage any credit unions or cause power outages for credit unions," Mike Bridges, vice president of marketing and communications for the League of Southeastern Credit Unions, told News Now Monday afternoon. "We have heard of some damage to credit union staff's homes, but have not confirmed that yet."
Illinois credit unions reported no damage from Friday's tornadoes, Will Wille, public relations coordinator for the Illinois Credit Union League, told News Now.
Two substantial waves of severe weather hit Tennessee Friday but no deaths were reported. About 75 tornado warnings were issued in the state, with several tornadoes reported resulting in several injuries statewide (weather.com March 3).
The storms and tornadoes that hit the Chattanooga, Tenn., area Friday--injuring at least 33 people and damaging hundreds of homes--constituted the second-largest outbreak in the last 25 years, according to local experts (timesfreepress.com March 4). It was unknown whether any credit unions in that state were directly impacted.
PLANO, Texas (3/6/12)--The number of credit unions that have capitalized Catalyst Corporate FCU in Plano, Texas, six months after its inception has grown to more than 1,000.
Catalyst Corporate passed that mark last week as several credit unions continued submitting paperwork to authorize capital contributions. The corporate credit union ended the week with 1,012 members that collectively provided more than $114 million in capital funding.
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"The 1,000-credit union mark is mostly significant inasmuch as it indicates that Catalyst's low capitalization levels and breadth of cooperative-priced services appeals to credit unions," said Kathy Garner, the new president/CEO of Catalyst Corporate.
More than 100 of the newest Catalyst members are recent converts from Western Bridge Corporate FCU in San Dimas, Calif., Garner said. "While credit unions from all parts of the country have joined Catalyst Corporate, there has been a surge of Western Bridge members making the transition," she said.
"Catalyst executives recently had the chance to meet hundreds of credit union officials from Western Bridge credit unions during our recent series of 20 town hall meetings," Garner added.
The meetings were a follow-up to the National Credit Union Administration (NCUA) December announcement that Catalyst Corporate was selected to acquire the operations of Western Bridge Corporate. NCUA's decision put into motion a plan that provided a non-disruptive, low-cost transition for Western Bridge member credit unions, Gamer added.
"One of the key points that we share with attendees is the way in which the model allows the corporate to maintain a low-risk balance sheet while building retained earnings sufficient to meet future regulatory requirements," Garner said. "Catalyst Corporate's efficiency will ensure that the corporate will thrive financially, meet all of the capital and retained earnings objectives, and continue to be innovative in the delivery of services."
Catalyst Corporate already is exceeding many of the financial measures such as the coverage ratio--the key measure of efficiency--in its business plan, Garner said.
"Our coverage ratio expectation was high--an 87% estimate used in our business plan, compared with an industry average of about 55%," she added. Catalyst achieved 94.1% for the September-December 2011 period.
Catalyst's model is designed to be less dependent on member contributed capital over time, as a result of strong growth in retained earnings, Garner explained. Catalyst's membership capital requirement is a one-time occurrence with no future adjustments, she said.
- OLYMPIA, Wash. (3/6/12)--Olympia (Wash.) CU alerted the Washington Department of Financial Institutions Monday that counterfeit checks bearing the credit union's name are surfacing in the area. The checks are apparently being mailed from an H&R Block branch in Olympia and appear to be drawn off an Olympia CU checking account, according to the credit union's Website. An accompanying letter states that the funds are sweepstakes winnings (Northwest Credit Union Association Anthem March 1). "Our front line staff received a call to verify funds on one of these checks," said Tammy Allender, $32 million asset Olympia CU's CEO said. After the employee informed the caller the check was not valid, an e-mail was sent to the entire staff warning about them about the possibility of fraudulent checks. More calls came in, and all staff informed the callers [the checks] were fraudulent." We had one institution that had kept its client's 'winning' letter along with a copy of the check, and they faxed it over so we could take a look. We then saw some of these checks showing up on our exception report, and of course those checks were returned" ...
LITTLETON, MASS. (3/6/12)--Octant Business Services, LLC, a credit union service organization offering business-loan underwriting, servicing and portfolio administration, is returning a 10% dividend to its owners--the third year on a row for such a payout.
The company also has expanded its client base to include 19 credit unions and earned the highest net profit in the company's history.
Member business lending provides an opportunity for credit unions to grow their membership, as well as improve their communities by turning small-business owners' dreams into reality," said Bob Cipriani, Octant Business Services president/CEO.
Octant also announced that Tom White, president/CEO of Rockland (Mass.) FCU, was elected to serve as chairman of the board. Mark Cochran, president/CEO of Jeanne D'Arc CU, Lowell, Mass., was elected vice chairman.
LOS ANGELES (3/5/12)--The National Credit Union Administration (NCUA) and Thomas T.Sidley, one of the officials it sued as a result of the collapse of Western Corporate FCU, Friday filed a settlement agreement with a federal court in Los Angeles to dismiss the case , according to a stipulation filed Friday.
The matter is before U.S. District Judge George Wu of the U.S. District Court for the Central California, Western Division in Los Angeles. The proposed order stipulates that dismissal of the case would be "with prejudice of all claims and counterclaims" between NCUA and Sidley. Each party would bear all the court costs.
Sidley was the chief risk officer at WesCorp. The proposed dismissal does not apply to NCUA's claim against any other defendant in the WesCorp case--Robert Siravo, CEO; Thomas Swedberg, head of human resources; Robert Burrell, chief investment officer; and Todd Lane, chief financial officer.
WesCorp was hard hit by losses related to mortgage-backed securities. NCUA's lawsuit had alleged that senior WesCorp executives were negligent in monitoring the investments of the corporate and that there was a breach of fiduciary duty and fraud related to investments that resulted in $6.8 million in portfolio losses (News Now Jan. 24). The executives filed counterclaims and affirmative defenses against NCUA, alleging the agency was aware of WesCorp's investment strategies and approved of and encouraged the strategies.
NEW YORK, N.Y. (3/5/12)--Longtime CEO of the National Federation of Community Development Credit Unions Cliff Rosenthal announced late Friday that after 32 years with the federation he will leave May 4 to take a job with the federal government May 7.
Although not naming his new post, Rosenthal said the government position will allow him to "pursue the mission that has guided me throughout my career: providing financial access and a route to economic self-sufficiency for low-income people."
Upon hearing the announcement, Credit Union National Association President/CEO Bill Cheney called Rosenthal the "the colossus of community development credit unions."
"For more than 30 years, he has devoted his professional life to the growth of these institutions, and has earned accolades for both the National Federation and the credit unions themselves," Cheney said, adding, "Although we will miss his dedication, enthusiasm, and intellect, we wish him success in this next chapter of his career, and look forward to working with him."
Rosenthal said the federation has come a long way since the 1980s, when its very future was in question. Now, he said, the federation is proud to count more than 200 credit unions in its membership, with total assets of some $13 billion and membership of 1.7 million.
"I can tell you that reaching these heights was beyond our wildest dreams back in the 1980s," he added.
Rosenthal said leaving the federation is personally difficult, but added the organization is "strong, stable, and sustainable."
"If I may borrow a phrase from the Peace Corps, this is the toughest job I've ever loved," he said.
- AUSTIN, Texas and CARSON CITY, Nev. (3/5/12)--A member service representative at an Austin, Texas-based call center used by Carson City, Nev.-based Greater Nevada CU saved the life of a member who had called and apparently wasn't feeling well. Annette Gutierrez, an agent for Gila Group, took the routine member service call and realized the member was ill. She alerted management, and an ambulance was dispatched to the member's home. The member later called back to say her action had saved his life. "Credit unions have a special relationship with their members. At Gila, we work to build the same strong relationship with their members and service them with the same high standard and level of care," said Bruce Cummings, CEO of Gila Group. Gutierrez has worked there since 2009 and has specifically served GNCU's accounts for almost two years. "Everyone was impressed with the extra effort made by the Gila representatives," said Patty Chang, GNVU risk manager ...
- HONOLULU (3/5/12)--A Kauai, Hawaii, woman was indicted by a federal grand jury and charged with embezzling $24,721 from Kauai Teachers FCU, based in Lihue, Hawaii. Kerry K. Higashi, 31, was an employee of the credit union and is accused of embezzling funds from two member accounts from Oct. 7, 2009, through May 30, 2011, said a press release from the Federal Bureau of Investigation. Maximum penalty for the crime is 30 years in prison and a $1 million fine …
- ST. LOUIS (3/5/12)--During March, St. Louis-based Vantage CU is challenging 18- to 25-year-olds to design a new debit card for its Young & Free account. It is accepting applications through March 30. Public voting on the designs submitted will be April 5-12. More than 5,000 Young & Free members use the Not Your Mama's Account (NYMA). The winning debit card designer will receive $500 in cash and have the opportunity for the concept to be produced and used by the credit union. For details, visit YoungFreeSt.Louis.com …
- ALBANY, N.Y. (3/5/12)--The Credit Union Association of New York has named Dirck Van Deusen as director of political and foundation development, effective today. He will work with New York credit unions to encourage their financial support for CUANY's political action initiatives and its foundation. He most recently was vice president of mortgage business development for CUMAnet. Prior to that he spent more than20 years as senior vice president of corporate relations for Members United Corporate FCU, where he was responsible for developing and leading the corporate's legislative and advocacy initiatives. He also represented the organization on both state and national boards, including the association's New York Credit Union Foundation …
WASHINGTON (3/5/12)--The impact of Bank Transfer Day (BTD) and all of its related activities on credit union memberships in late 2011 has been much publicized. With the release of Call Report Data for all U.S. credit unions as of December, BTD's effects now are clearly seen, said Credit Union National Association's (CUNA) chief economist.
The net increase in the number of credit union memberships in the fourth quarter of 2011 was 399,721--to 93,052,509 from 92,652,788--Bill Hampel, CUNA chief economist, told News Now
. The fourth quarter's increase of 400,000 memberships represents 31% of the full year increase of 1.3 million. The increase in memberships in the first three quarters of the year was 892,000--or an average of 298,000 per quarter.
"Perhaps a better indication of the transfer of activity to credit unions during the fourth quarter is the change in the number of credit union checking accounts during the period, because Bank Transfer Day was spurred in part by debit fee increases by a number of large banks," Hampel said.
"During the fourth quarter there was a net increase in the number of credit union checking accounts of 737,000," he added. "Again, that is a net increase. The number of new accounts opened was of course more than that, by the number of accounts that were closed during the period. We should also note that the net increase of 737,000 checking accounts was the result of account openings by both new and existing members."
In summary, Hampel emphasizes:
- The 400,000 net increase in credit union memberships in the fourth quarter of 2011 was 530,000 greater than the average change in members recorded in the same period during the preceding seven years.
- The 737,000 net increase in the number of checking accounts at credit unions in the fourth quarter was almost three times the average of such growth (259,000) in the fourth quarter of the previous seven years.
- This much stronger-than-usual growth in the number of memberships and checking accounts at credit unions in the fourth quarter of 2011 is strong evidence that BTD did indeed have a significant impact.
SAN DIEGO (3/5/12)--A new study says that financial institutions' members/customers who buy investments and insurance services where they bank are more likely to stay with the institution--and be more profitable to the institution--than member/customers with multiple banking relationships.
The study, "The Value of an Investment and Insurance Customer to a Bank," was conducted by investment broker dealer LPL Financial LLC, a wholly owned subsidiary of LPL Investment Holdings Inc. in San Diego. It examined the role of investment services and insurance customers at retail financial institutions.
- Households that buy investment and insurance products where they bank are among the retail financial institution's most profitable and desirable customers because they are more likely to stay than those in multiple relationships.
- By underinvesting in these services, the financial institutions are missing an opportunity to increase the "stickiness" of highly desirable member/customers.
- Member/customers who purchased these products from their primary bank or credit union have checking account balances that are 16% greater than households without a brokerage or insurance relationship.
- These member/customers have savings account balances that are on average 85% more than non-brokerage account member/customers; and
- Brokerage and insurance customers have more than twice as many credit products and 11% more remote banking products than customers who have not purchased an investment or insurance product from their primary bank or credit union.
The study was designed to help institutions see the opportunity that exists from a successful and growing investment and insurance program, said Andy Kalbaugh, managing director and president of LPL Financial's Institution Services division.
"Until now there has not been a source of industry data to test this belief [that investment and insurance services are strategically important], and this appears to have led to under-investment by banks and credit unions in their investment and insurance services capabilities," said Kenneth Kehrer, founder of Kehrer-LIMRA and co-author of the study.
The study drew on data from MacroMonitor, a retail financial services and marketing database.
GARDNER, Mass. (3/5/12)--GFA FCU, based in Gardner, Mass., will acquire a New Hampshire bank in a $6.4 million cash deal, the first such acquisition nationally by a credit union of a stock savings bank, according to announcements in local media.
The purchase price covers substantially all of Monadnock Community Bank's assets and liabilities and is 119% of book value, said the two institutions. It includes $5.50 for each of Monadnock's nearly 1.2 million outstanding shares. (Banker & Tradesman.com March 1 and Telegram.com March 2). The price also represents 13.1% price-to-deposits and a 2.73% premium on core deposits as of Dec. 31.
The acquisition is pending approval of regulators and shareholders of Monadnock and on satisfaction of customary closing conditions, including the repayment of Troubled Asset Relief Program funds by Monadnock. Monadnock reported a $1.8 million loss for 2011, said Banker & Tradesman.com.
The bank was initially chartered as AWANE CU in 1971, serving the Automotive Wholesalers Association of New England Inc., a nonprofit organization aimed at improving relations among wholesalers, manufacturers and dealers in the automotive parts industry, said the bank's website. It converted to a federally chartered savings bank in May 1996 and opened its retail banking office in November 1997 in Peterborough, N.H. It changed its name to the current name in October 2000.
GFA FCU has about $429 million in assets while Monadnock's assets total $82 million as of Dec. 31. They said they expect the deal will close during fourth quarter of 2012.
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MADISON, Wis. (3/5/12)--Credit unions began 2012 on positive note, propelled by strong earnings and a good return on assets (ROA), according to a Credit Union National Association (CUNA) economist's analysis of January's monthly sample of credit unions.
"Credit unions started the new year with a bang," Steve Rick, CUNA senior economist, told News Now
. "Return on assets--net income divided by average assets--rose to 1.10% in January, on an annualized basis, up from 0.88% in January of 2011. Strong earnings, along with slightly falling assets, pushed the movement's capital-to-asset ratio up to 10.33% in January from 10.22% in December 2011." The total dollar amount of capital is $101 billion, according to the monthly estimates.
Credit union loans outstanding decreased 0.2% during January 2012, compared with a 0.4% increase in December 2011. Adjustable-rate mortgages led loan growth with a 1.2% increase, followed by home equity loans and unsecured personal loans, which each rose 0.1%. Used-auto loans decreased 0.2%, while fixed-rate mortgages and credit card loans declined 0.3% and 1.8%, respectively. Credit union loans totaled $585.7 billion, compared with $576.8 billion in January 2011.
"Credit union members appear to be loosening their purse strings and spending as evidenced by faster seasonally adjusted loan growth in January 2012 versus January 2011 and slower savings growth," Rick said.
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Credit union savings balances fell 0.5% in January compared to a 1.2% increase in December. Money market accounts led savings growth with a 1.1% gain, followed by regular shares, which rose 0.2%. One-year certificates decreased 0.4%, while individual retirement accounts and share drafts each declined 0.5% and 4.1%, respectively. Credit union savings in January totaled $843.1 billion--or $40 billion more than the $803.1 billion in January 2011.
Regarding asset quality, credit unions' 60-plus-day delinquency rate remained at 1.6%. "Credit union loan delinquency rates--delinquent loans divided by total loans--rose to 1.63% in January from 1.62% in December, but below the 1.77% reported in January 2011," Rick said. "The January rise in delinquency is a function of seasonal effects and falling loan balances. We expect the delinquency rate to resume its decline next month."
Credit unions' loan-to-savings ratio remained at 69%. Their liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 18%.
RALEIGH, N.C. (3/5/12)--Bob Eaves, husband of North Carolina Gov. Bev Perdue, visited the State Employees' Credit Union's (SECU) Raleigh Stonehenge branch Tuesday in support of North Carolina Business Committee for Education Students@Work Week.
Bob Eaves (second row left), husband of North Carolina Gov. Bev Perdue, is shown with West Millbrook Middle School students; teacher Diane Walters, first row, right; and Karyn Roth, State Employees' CU branch senior vice president, far right, during a visit to SECU's Raleigh Stonehenge branch as part of the North Carolina Business Committee for Education Students@Work Week. (Photo provided by State Employees' Credit Union)
During his visit, Eaves spoke with students from West Millbrook Middle School, who visited the credit union to learn about the importance of education to create future career opportunities. SECU personnel gave a branch tour to the group of seventh-grade students, allowing them to see various SECU career options first-hand.
Started by Eaves in 2010, the Students@Work program focuses on raising North Carolina's graduation rate by collaborating with educators and local business communities to provide job shadowing or mentoring opportunities to students in real workplace settings.
During Students@Work Week last year, SECU personnel provided workplace tours and presentations to 11,650 students and the credit union anticipated exceeding that number this year.
SECU branches statewide took-part in the week-long program, which ran from Feb. 27 through March 2. This year, 62 companies, covering all 100 North Carolina counties, participated in the program, nearly doubling last year's number of participants.
More than 25% of North Carolina students do not complete high school, according to the North Carolina Department of Public Instruction. The Students@Work initiative focuses on middle school students because that grade level is a crucial time for dropout prevention.
"It's important that the business community understand that they are vital stakeholders in education," said Eaves. "Job shadowing opportunities can help students develop goals with the knowledge that their education will be relevant in the workplace."
ROANOKE, Va. (3/5/12)--A merger between $8 million asset Carilion FCU and Freedom First FCU, both of Roanoke, Va., is complete.
Carilion FCU accounts were transferred to Freedom First CU on Thursday.
Freedom First now has assets of more than $250 million.
Based upon Freedom First's financial strength, commitment to service, product line, and expanded branch and ATM locations, the board of Carilion FCU unanimously voted to adopt a resolution to merge with Freedom First, the credit unions announced in a press release.
On Dec. 1, the membership of Carilion FCU approved a plan to merge with Freedom First by an overwhelming majority--94% of those voting approved the merger.
Regulatory approval was also obtained from the National Credit Union Administration.
Carilion FCU was founded in 1970 to serve the Carilion Clinic community. The former Carilion FCU branch location in Roanoke will remain open as a branch of Freedom First.
WESTPORT, Maine (3/5/12)--The Maine House of Representatives voted 90-54 Ought To Pass on a foreclosure bill that included an amendment presented by the Maine Credit Union League.
The bill would require the entity foreclosing on a home to show proof that it owns the mortgage note, preventing potential fraud against homeowners.
The league provided talking points for credit unions to communicate to legislators and said it received a strong support from state credit unions (Weekly Update March 2)
The amendment provides consumer protection if original documentation cannot be produced, but does not harm credit unions, the league said. Also, the foreclosure process will not be delayed and credit unions will not be prevented from foreclosing if they are the legitimate owner of the note.
"Once again, credit unions demonstrated that credit unions are owned by the people that use their services," said Maine league President John Murphy. "It was a great opportunity to highlight credit unions in a positive way with legislators."
PLANO, Texas (3/5/12)--Credit union CEOs are significantly more optimistic about the economic environment today than they were one year ago, according to results of Catalyst Corporate FCU's CU CEO Confidence Survey.
The fourth quarter 2011 confidence index of 26.81 is nearly 16 points higher than the fourth quarter 2010 index. Historically, the index has ranged from a high of 47.40 (2004 fourth quarter) to a low of 7.90 (2009 first quarter) during the survey's eight-year history.
The survey registers credit union CEO confidence on a scale from -100 to 100 in six areas. Questions are designed to capture a snapshot of CEO state of mind and future expectations.
CEOs are asked to evaluate:
- Current financial condition of members;
- Current financial condition of the credit union;
- Anticipated financial condition of members in six months;
- Anticipated financial condition of the credit union in six months;
- Anticipated loan demand at the credit union in six months; and
- Anticipated share deposit growth at the credit union in six months.
CEOs were more optimistic about their own institutions' financial positions in this year's survey. In the 2010 fourth quarter survey, CEOs registered the lowest reading in the survey's history (15.53) for that category. One year later, CEOs' optimism was 25 points higher (40.20). Executives also see more improvement on the horizon, with responses driving an even more positive mark (43.75) in the 2011 fourth quarter survey for credit union financial condition in six months.
Other survey measurements reveal optimism across the board, said Catalyst. Although still a relatively low score, CEO assessment of their members' current financial condition jumped 13 points from -0.42 a year ago to 12.85 in 2011 fourth quarter. Likewise, CEO marks for members' anticipated financial condition in six months increased from 9.11 to 23.54 year over year.
CEO expectations for loan demand are up by 14 points from fourth quarter 2010. Expectations for share-deposit growth also increased seven points over the same time last year.
The employment sector--with reports from the Labor Department indicating improvement in the unemployment rate from 9.1% to 8.3% since June--is buoying the optimism, according to Brian Turner, director and chief strategist of Catalyst Strategic Solutions.
"Given the depth of despair felt over the past year, it is not surprising to see overall improvement in the CEO index--both from the institutions' and the members' perspectives," said Turner. "In addition to the declining unemployment rate, the rate of decline in home prices is slowing, stock prices appear to be improving, and members are considering replacement of their aging vehicles." He cited statistics from Polk Research, noting the average age of U.S. cars on the road reached a record high of 10.8 years in January, helping auto sales rebound to an annualized unit pace of nearly 13 million.
Credit card use also increased, particularly during the past two quarters, Turner said. "Rising usage suggests that consumers are again willing to open their wallets and spend a few dollars, he added. "Unfortunately, over the past few years, credit union market share of consumer loans has drifted downward from 9.6% to 9%. So, either credit union members are not the current spenders, or the industry is missing the boat when it comes to marketing consumer loans."
If credit unions want to see continued improvement, they should consider expanding efforts to attract and retain members in the appropriate demographics for these loans, Turner said.
Loans haven't been an issue in Hobbs, N.M., where loan growth increased 40% in 2010. "With gas prices going up, I expect that trend to continue," said Jeff Bruce, Lea Community CU president/CEO. "This is pick-up (truck) country, and members have come in and asked me to calculate how much they can save by buying a vehicle that gets better gas mileage."
Lea Community CU, with $34 million in assets and a charter that serves a county with a population of 100,000, is located in an area that has a strong local economy. "There are a number of energy-related businesses, and the unemployment rate is only 4%," Bruce said. "Anyone who wants a job can pretty much get one."
The improved confidence index may have another explanation. Bruce noted that "people are ready for a mental switch from the doom and gloom of the past several years, and many credit union CEOs have said, 'Let's lead the way.'"
Surveys were sent in January to 1,736 CEOs of Catalyst Corporate and Western Bridge Corporate FCU member credit unions. The response rate was 18.7%.
GLENDORA, Calif. (3/5/12)--Employees of America's Christian CU, Glendora, Calif., welcomed an additional employment benefit last week: Any employee adopting a child will receive a $5,000 grant under a new program initiated by the credit union.
The funds are for staff to use towards fees and other expenses in adopting.
"With this new grant, we want to demonstrate our solid support for our team members that want to extend their love to the orphan," said Mendell L. Thompson, America's Christian CU president/CEO.
ATLANTIC CITY, N.J. (3/2/12)--Credit unions are at a pivotal tipping point in terms of competition, attendees at the New Jersey Credit Union League's Reality Check conference in Atlantic City were told Wednesday.
John Lass, CUNA Mutual Group senior vice president of strategy and business development, made predictions for credit unions for the next four years during the New Jersey Credit Union League's Reality Check conference in Atlantic City. (Photo provided by the New Jersey Credit Union League)
John Lass, senior vice president of strategy and business development at CUNA Mutual Group , noted that four years ago, credit unions faced a very different type of competitor in the industry than they do now. PayPal, Target and WalMart are getting into the financial services industry. He dubbed them true game changers. (The Daily Exchange
He cautioned credit unions to watch out for developments in mobile payments and told them that the key organization to watch is Isis, which offers a "mobile wallet" that organizes payment cards, offers, and loyalty cards in one app on a smartphone. With JP Morgan Chase and Capital One already signed onto the Isis network, "credit unions need to get a seat at that table," Lass said.
Among the examples he cited: Japan's largest mobile phone provider, which gained a bank charter to allow its customers to bank over their phones and gained unprecedented market share, and digitized USAA, which consistently is ranked at the top in customer satisfaction, even though it is complete self-service based.
Falling behind as the financial services industry becomes digitized isn't the only challenge credit unions face, Lass said. He pointed out a trend of traditional spread income becoming "compressed." "Income comes from fees or spreads--that is pretty much it," he told attendees.
When asked what they think of the future of the traditional spread income will be in the next five years, 34% of attendees said it will widen, while 65% said it will continue to compress. After providing this "reality check," Lass presented some peace of mind. "Branches are here to stay," he said. "But credit unions need to find a way to sell away from the branch."
At other Reality Check sessions, credit unions heard this advice:
- Technology and social and economic mobility is a top priority for the Millennial Generation--the 50 million Americans born between 1981 and 2000--and those should be the top priorities for credit unions that want to attract this generation, said Kenneth O'Connor, director of student advocacy for Fynanz, a private student loan company and CUNA Strategic Services provider.
- Credit unions need to access the "credit union landscape"--strengths, weaknesses, threats and opportunities--to make their business model sustainable, said Anne Legg, vice president of marketing at Cabrillo CU, San Diego. Legg introduced the Shared Value Business Model, which provides economic value to the industry through additional income generated from peer secured loans needed to manage expenses.
- New trends are reshaping the world of financial services, said Mark Sievewright, president of Fiserv's Credit Union Solutions. He presented technology trends credit unions must embrace to stay current and viable, noting that credit unions must keep up with the digital movement and open themselves up to the world of "mobile." Debit cards and online bill pay are must-haves to attract and retain younger members. "Mobile" is a revenue opportunity for financial institutions, he said.
- To prevent identity theft, consumers must "think like a spy," said identity theft victim John Sileo. "We're leaving digital DNA all over the place," he said, emphasizing the need to take responsibility for managing, controlling and protecting data.
CHAMPAIGN, Ill. (3/2/12)--The University of Illinois Employees CU (UIECU) received a letter praising its simple and transparent checking fee disclosures from U.S. Sen. Richard J. Durbin (D-Ill.)
Durbin is known as a critic of banking fees and was author of the amendment in the Dodd-Frank Act that requires the Federal Reserve to limit interchange fees on debit cards.
In the letter, written Feb. 28, Durbin commended the $255 million asset, Champaign, Ill.-based credit union "for providing your customers with a concise and consumer-friendly disclosure form listing the fees and key terms associated with your checking accounts.
"By making comprehensive fee information available in a simple, easy-to-read format developed by the Pew Charitable Trusts, you have chosen to be upfront and honest with your customers about the fees you charge," said the letter.
Durbin said it was his understanding that UIECU "is the nation's first small credit union, as well as the nation's first university-affiliated credit union, to adopt the form" and that the credit union was leading the way "in providing transparency for student checking accounts."
"Your decision to adopt this disclosure form at your four local branches and on your website will benefit your student and community member customers, and it will help advance the cause of fee transparency to the benefit of consumers nationwide," Durbin said.
UIECU uses the disclosure forms for six types of checking accounts, according to the credit union's website. "We think banking should be simple, that's why we've made our disclosures easy to read with no hidden fees or charges. Banking, simplified," says the site.
Use the link to review the disclosures for the credit union's Share Checking, Campus Checking, Illini Advantage Checking, Illini Advantage PLUS Checking, Eco-Checking and Fresh Start Checking.
IOWA CITY, Iowa (3/2/12)--Credit card fraud write-offs decreased more than 16% in 2011 at $1.4 billion-asset University of Iowa Community CU (UICCU).
UICCU also reduced gross fraud per case by 27% in 2011 when compared to 2010 and reduced fraud write-offs per case by 41%.
The drop in fraud write-offs was the result of changes made to the credit union's fraud strategies over three years, according to a joint release from UICCU and The Members Group (TMG), Des Moines.
Changes included adjustments to ZIP code, travel, country code and compromised account strategies.
TMG created a customized ZIP code strategy for UICCU that calculates the number of miles between a retailer and the cardholder's home address, allowing the credit union to halt a transaction in real time if the transaction is too far away from home and the merchant falls into a high-risk category.
The credit union also customized its strategy for members who travel. Instead of removing all blocks from the traveling member's account, the new approach routes red-flag transactions to an in-house work center for review by a fraud analyst.
When a member travels to a country whose code is blocked to prevent fraud, UICCU asks TMG to lift the block, but only for the shortest time period possible.
Instead of adding compromised accounts to Visa and MasterCard warning bulletins, which prevents cardholders from using their cards, UICCU reissues new plastic cards. This allows the account to remain open for several days to eliminate the gap in service to the member.
A UICCU spokesman said the slight additional risk created by omitting the cards from the warning bulletin is outweighed by cost savings and uninterrupted service to members.
HARRISBURG, Pa. (3/2/12)--Borrowers in Pennsylvania have saved more than $18 million since 2006 by using Credit Union Better Choice loans instead of typical payday lending products.
According to the Pennsylvania Credit Union Association (PCUA), 79 participating credit unions statewide issued 53,714 loans totaling almost $26 million dollars since the program was launched.
The Credit Union Better Choice program provides a payday lending alternative by allowing participating credit unions to loan up to $500 to borrowers for 90 days, PCUA said in a release.
In 2011, participating credit unions made 10,829 loans totaling $5.23 million. During the final six months of 2011, credit unions made 5,098 loans totaling $2.3 million, while borrowers deposited more than $230,000 in savings accounts linked to the program.
A $500 Better Choice loan costs $42.50 for a 90-day period and encourages savings by requiring consumers to deposit $50 in a savings account by the end of the loan period. Borrowers also receive financial education to help them make better financial decisions.
In comparison, a typical $500 payday loan costs $15 for every $100 borrowed for two weeks, which adds up to $450 over 90 days. That means consumers save an average of 80 cents in loan fees and costs for every dollar borrowed through a Better Choice loan instead of a payday lender, said PCUA.
Better Choice loans were developed by the PCUA, the Pennsylvania Treasury Department and the Pennsylvania Department of Banking.
MADISON, Wis. (3/2/12)--An article about how credit unions surpassed banks in consumers' perceptions of safety and soundness was the most-read News Now
story in February.
The top 10 stories for the month were:
10. Mass. CU considers conversion to mutual co-op bank
WASHINGTON (2/17/12)--In Brockton, Mass., the directors of HarborOne CU posted an announcement to its website yesterday informing members that the credit union is considering a charter conversion from state credit union to a Massachusetts-chartered mutual co-operative bank.
9. IRS issues 'tax exempt' correction to CUs
WASHINGTON (2/8/12)--The U.S. Internal Revenue Service (IRS) sent a letter of correction to credit unions that were erroneously informed that they lost their tax-exempt status due to a filing error by the credit unions' "central organization."
8. ATM disclosure changes needed, says CUNA joint letter
WASHINGTON (2/9/12)--The Credit Union National Association (CUNA) has joined with the Electronic Funds Transfer Association (EFTA) and other groups to urge members of the U.S. Congress to eliminate an unneeded ATM fee disclosure requirement "that has encouraged a large and growing number of frivolous lawsuits across the nation."
7. King and Sherman introduce CU capital bill
WASHINGTON (2/9/12)--In a bill CUNA says will enhance the safety and soundness of the credit union system, Reps. Peter King (R-N.Y.) and Brad Sherman (D-Calif.) have proposed to permit the National Credit Union Administration (NCUA) to allow credit unions to accept additional forms of capital, provided it does not alter the cooperative ownership structure of credit unions.
6. Banking chair wants CU, bank exam practices audit
WASHINGTON (2/14/12)-- Senate Banking Committee Chairman Tim Johnson (D-S.D.) sent a letter to the inspectors general (IGs) of the NCUA, two federal banking agencies and the U.S. Treasury Department seeking an audit of the examination practices of the federal financial institution regulators.
5. New customer rankings: CUs only FI rated excellent
WABAN, Mass. (2/24/12)--Credit unions were the only financial institutions to receive "excellent" ratings in the Temkin Experience Ratings, which ranks the customer service across 18 industries. Credit unions ranked third across all industries.
4. CU employees discover body in repossessed truck
EVANSVILLE, Ind. (2/22/12)--Employees at a credit union in Evansville, Ind., got a shock Thursday when they opened a repossessed truck's hardshell cover and found the body of the truck's owner.
3. CUs back burgeoning growth in food co-ops
MADISON, Wis. (2/22/12)--Several credit unions have put the idea of cooperatives helping other cooperatives into direct action by helping finance start-up food cooperatives--reportedly one of the fastest-growing cooperative sectors in the U.S.
2. Debit cards: Use caution during some transactions
NORTH PALM BEACH, Fla. (2/7/12)--Your debit card looks like a credit card and feels like a credit card, so it must work exactly like a credit card, right?
1. Survey shows continuing growth in CU reputation
WASHINGTON (2/23/12)--Credit unions outshone banks in consumers' perceptions of safety and soundness with 40% of respondents to a recent poll saying they believe credit unions are the safest financial institutions, compared to 34% naming banks. Nineteen percent of respondents said they trusted both types of institutions equally.
MADISON, Wis. (3/2/12)--Nearly half of all adult U.S citizens own smartphones--outnumbering those who own more basic cell phones, according to a new study from the Pew Internet & American Life Project. Credit unions should take note because consumers are increasingly using Smartphones for their mobile banking needs.
The study indicated that 46% of American adults were smartphone owners as of February--an increase of 11 percentage points over the 35% of Americans who owned a smartphone last May. Two in five adults (41%) own a cell phone that is not a smartphone, meaning that smartphone owners are now more prevalent within the overall population than owners of more basic mobile phones.
Nearly every major demographic group saw a notable gain in smartphone adoption during the past year, the study said. Those groups include men and women, younger and middle-aged adults, urban and rural residents, and the wealthy and the less well-off.
Overall adoption levels are at 60% or more within several groups, such as those with an annual household income of $75,000 or more, 18-35 year olds and college graduates.
Despite the relatively widespread overall increase in smartphone ownership, several groups saw modest or non-existent growth in the last year--primarily seniors, with 13% of those ages 65 and older now owning a smartphone.
The report is based on telephone interviews conducted by Princeton Survey Research Associates International from Jan. 20 to Feb. 19, among a sample of 2,253 adults, age 18 and older.
To read the full report, use the link.
- TUCSON, Ariz. (3/2/12)--Hughes FCU was named the Indirect Lender of the Year for 2011 by the Mountain West Credit Union Association, which serves credit unions in Arizona, Colorado and Wyoming. Hughes FCU made 8,063 auto loans totaling more than $173 million through indirect lending in 2011, which represents a 345% increase when compared to 2010. During that period, the credit union increased its membership by 14%, with indirect lending accounting for just under 8% of growth. This is the second time that Tucson, Ariz.-based Hughes FCU has received the Indirect Lending of the Year Award …
- SALEM, Ore. (3/2/12)--Maps CU has created the Maps Community Foundation to coordinate its community service activities (Statesman Journal Feb. 29). The foundation is a charitable organization that will emphasize financial education and asset-building initiatives. The foundation's first activity will be recruiting applicants for $10,500 in scholarships that will be granted this year to college-bound students. The Salem, Ore.-based Maps CU, which has $401 million in assets, has contributed more than $135,000 to Credit Unions for Kids and more than $58,000 in scholarships since it began tracking its giving …
- FORT KENT, Maine (3/2/12)--Acadia FCU representatives will work side-by-side with students majoring in education at the University of Maine at Fort Kent (UMFK) to present the "Benny Banks" program in local classrooms. The pilot program for students of all ages received a $12,000 grant from the National Credit Union Foundation to coordinate events, develop resource materials and create financial literacy kits (Maine CU League's News and Views, March). From left, Acadia FCU Vice President Luis Sanclemente, UMFK Dean of Community Education Scott Voisine, Acadia FCU President/CEO Dave Desjardins and George Bragdon, Americorps VISTA volunteer at UMFK, recently accepted the NCUF grant check for the joint venture between the university and the credit union, which launched in November 2011 (Photo provided by the Maine Credit Union League) …
MADISON, Wis. (3/2/12)--Consumers who are fed up with big banks and are looking to join a credit union should use aSmarterChoice.com, according to Consumer Reports.
The website was developed a year ago by the Credit Union National Association (CUNA) and state credit union leagues to provide information on credit unions to potential members and press professionals.
The publication noted a new study by J.D. Power and Associates found poor service and more and higher bank fees have led to more defections by customers of large, regional and mid-size banks.
"The majority of individuals switching banks are moving to credit unions and smaller banks," said Consumer Reports. "Many credit unions have expanded services to match what you'll find at a bank, and since credit unions are nonprofit, fees tend to be lower."
The article then directs readers to CUNA's consumer page, which offers aSmarterChoice's credit union locator tool.
To read the article, use the link.
MANHATTAN BEACH, Calif., and HUNTINGTON BEACH, Calif. (3/2/12)--The boards of two California credit unions--Kinecta FCU and NuVision FCU--have mutually decided to terminate their merger agreement, saying it would take two additional years to process, they announced Thursday.
Roger Ballard will continue as joint CEO of both credit unions while Kinecta conducts a CEO search process and puts a transition plan in place.
Both credit unions are independently strong and well-capitalized, they said. At the outset, their boards had agreed to move forward with the merger only if it offered substantial benefits with minimal disruption to members and their business strategies and operations.
However, as the credit unions continued to assess the length of time required for merger review, approval and integration, they estimated it would take an additional two years to complete the merger given the economic environment. They concluded that continuing the merger process for that amount of time would be too disruptive to their business and members.
"Merging two large, diverse financial institutions is an incredibly complex and time-consuming process that places significant demands on resources and diverts staff focus away from core business operations," said Darryl Johnson, Kinecta board chair. "Given the length of time now anticipated to complete the merger, both credit unions decided that moving the merger forward at this point is not in the best interests of either credit union or our members."
"We still believe there are great synergies between our credit unions, and look forward to exploring strategic opportunities that benefit our members. We have tremendous respect for the NuVision organization, and know it has a great future ahead," Johnson said.
NuVision board Chair Robert Geraci noted that the two credit union boards had "made excellent progress in our integration planning work, but both agree that continuing the merger through this extended length of time isn't the right strategy for either credit union or our members. We firmly believe that taking a hard look at the prospect of a merger was a worthwhile, positive process for both credit unions, and we each came away with new best practices we've already begun implementing that will benefit our organizations into the future."
Both credit unions said they were off to a strong financial start in 2012. NuVision members will continue to use Kinecta Financial & Insurance Services investment programs and Kinecta gift cards, which were introduced to the credit union last year. The credit unions also will continue to partner on joint community programs and other internal initiatives through 2012.
Huntington Beach-based NuVision has $1.2 billion in assets. Kinecta, based in Manhattan Beach, has $3.5 billion in assets.