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Parents talk to kids about sex drugs--but not money

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WILMINGTON, Del., and APPLETON, Wis. (4/27/11)--Nearly all (95%) parents say they're primarily accountable for their kids' financial education, but only 29% say they are "excellent" financial role models. In fact, says a new survey, parents would rather talk with their kids about sex and drugs than about money. The survey, conducted by ING DIRECT USA, a direct bank based in Wilmington, Del., noted that parents are on the front line of their children's financial education but they struggle to talk about money. Among the survey findings:
* Roughly 32% of parents are prepared to talk to their kids about drugs and alcohol; * About 28% of parents are prepared to talk about sex and dating with their children; and * About 26%t are prepared to talk with their kids about about money and finances.
Prospera CU, based in Appleton, Wis., offered some advice for parents in this situation in the Green Bay Press-Gazette (April 26). Parents should not feel uncomfortable talking to their kids about money. Instead, take the opportunity to show why saving can yield results, said Kristina Florez, Prospera's director of marketing, in the article. Parents can lead by example, she said. When making a trip to the credit union or bank, take the child along and talk about what you're doing. It helps kids understand the process of where the money is going and why, Flores added. If you're planning for a vacation, the kids can see why it takes time to save for it, she said. A trip to the store also can provide a learning opportunity. If a child wants something, the parent can offer to pay for part of the item, with the child paying for the rest. This makes children think about how they spend their money and whether the item is truly something they want or need, Flores told the newspaper. The ING DIRECT USA study also found that economic uncertainty may continue to impact parents' ability to be good role models. Parents are tapping their kids' savings to pay bills and debt. About 31% of parents have withdrawn or considered withdrawing money from their kids' savings to pay bills or pay off debt. And more than half (58%) are saving less for their child's future than they did two years ago. Roughly 46% have sacrificed contributions to their child's savings. The phone survey was conducted with 2,000 adults over 18 years old, with 627 indicating they were parents of a child under 18, said ING DIRECT.

Nebraska gov. approves savings promotion raffle bill

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LINCOLN, Neb. (4/27/11)--Nebraska Gov. Dave Heineman Tuesday approved a bill that would amend Nebraska Revised Statutes to allow the state's credit unions to conduct savings promotion raffles to provide members an incentive to save by offering a chance to win a prize or prizes. LB 524 was introduced by State Sen. Amanda McGill (LD-26) of Lincoln and passed by the Legislature April 20. It will go into effect in September. "The governor's approval of LB 524 means that Nebraska's 425,000 credit union members will have a fun and innovative way in which they can save money for their future," said Scott Sullivan, president/CEO of the Nebraska Credit Union League. "It's a win-win for members because they not only have a chance to win one or more prizes, but more important, they will have personal savings that has accumulated over time when it's all said and done," he added. "Credit unions focus their efforts on improving the financial lives of their member owners and LB 524 will serve as another tool to help in that effort," Sullivan said, adding, "We believe that LB 524 will incentivize folks to save who have never saved before and will lead to a habit of saving." The league will work with participating credit unions to roll out a program in 20-12. Other states with laws that allow for savings promotion raffles include Washington, Michigan, Rhode Island and Maine.

PULSE Issuers expect 73 drop in interchange revenue

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HOUSTON (4/27/11)--Small debit card issuers such as credit unions and community banks on average expect a 73% decrease in debit interchange revenue as a result of pending interchange fee rules, according to the 2011 Debit Issuer Study commissioned by PULSE, an electronic funds network. Although institutions with less than $10 billion in assets are exempt from the regulations proposed by the Federal Reserve Board under the Durbin Amendment in the Dodd-Frank Act, they are critical of the interchange cap and skeptical the exemption will be effective, according to PULSE, a Discover Financial Services company. "The study results support broad industry consensus that the proposed interchange cap will likely affect even exempt issuers," said Steve Sievert, senior vice president of PULSE. "However, the impact small issuers say they are expecting is greater than many anticipated," Sievert added. In the study, respondents said they expect, over time, interchange income to decrease due to marketplace pressures. Even if a network offered two-tier pricing, the market-conditions shift would eventually require the interchange rate for exempt institutions to be reduced, they said. Other findings:
* The proposed network exclusivity provisions are unnecessary given the interchange cap. *Almost all issuers preferred the alternative that would require two unaffiliated networks on each debit card, given that many are already compliant with that requirement. * An alternative requiring two network choices for each method of authorization--such as two for PIN and two for signature--would create major operational challenges without providing value to consumers, respondents said. * Issuers expect the interchange proposal to significantly impact their demand deposit account business. * Fifty-four percent of regulated institutions and 27% of exempt institutions said they are evaluating additional fees or reducing benefits. Exempt issuers are considering reducing rates on high-yield check accounts, eliminating ATM fee rebates and charging account holders for the service of having a checking account. Many are assessing debit rewards. * Many said they will encourage consumers to increase use of PIN debit instead of signature debit because PIN transactions will have a better bottom-line contribution for issuers.
"There is unanimous agreement among financial institutions we surveyed that the Durbin Amendment will adversely impact consumers," said Tony Hayes, Oliver Wyman partner and project leader of the study. "To recoup lost revenue, issuers will charge higher fees for banking services, reduce debit card benefits--such as rewards and zero liability protection--and introduce restrictions on how debit cards can be used." PULSE has commissioned the benchmark Debit Issuer Study for the past six years. The Credit Union National Association has urged Congress to stop and study the fed proposed rule's impact on credit unions and consumers.

Variety of CU activities aid kids hospitals

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MADISON, Wis. (4/27/11)--Credit unions nationwide are involved in fundraising activities for Children’s Miracle Network Hospitals through Credit Unions for Kids. Among the latest fundraiser events and sponsors: * The 2011 Northwest Credit Unions for Kids Wine Auction, which benefited Children’s Miracle Network Hospitals. It raised over $135,000 on April 15. Sponsors of the event included iQ CU, Vancouver, Wash.; Financial Service Centers Cooperative, Ontario, Calif.; and CO-OP Financial Services, Rancho Cucamonga Calif.; Allied Solutions, Carmel, Ind.; CUNA Mutual Group, Madison, Wis.; Northwest Credit Union Association, Beaverton, Ore.; OnPoint CU, Portland, Ore.; BECU, Tukwilla, Wash.; Columbia Community CU, Vancouver, Wash.; Boyce Financial Group, Vancouver, Wash.; and CU Direct Corporation, Ontario, Calif. * A breakfast meeting sponsored by the Pittsburgh Chapter of the Pennsylvania Credit Union Association on April 12 at UPMC Children’s Hospital of Pittsburgh. The Children’s Hospital of Pittsburgh Foundation provided the food and venue for the 30 attendees in appreciation of their fundraising efforts for the Children’s Miracle Network Hospitals. A two-year fundraising effort by credit unions in the chapter concluded in December and resulted in more than $30,000, of which $25,000 was earmarked for a distraction therapy room within the hospital. The Pittsburgh Chapter is now the sponsor of the pirate-themed therapy room. * Northwest FCU Foundation presented Children’s Miracle Network Hospitals with $6,000 in donations given by members and employees, at the kickoff for the annual Credit Union Cherry Blossom Ten Mile Run in Washington D.C. * Kohler (Wis.) CU’s Chain of Hearts campaign, which raised $3,200 in February. The money raised will support Children's Hospital of Wisconsin. The campaign raised funds through the sale of links and other employee-sponsored fundraisers. Kohler CU’s Chain of Hearts is part of a statewide fundraising effort of more than 300 credit unions. * The Million Pennies Campaign is sponsored by the Virginia Credit Union League’s (VACUL) Community Involvement Committee and its partner Credit Unions Care Foundation of Virginia to raise money for the hospitals. Belvoir FCU placed collection jars throughout its branches for members to donate pennies to help kids associated with CMN Hospitals. Through this effort, Belvoir FCU contributed nearly $500. * The Minnesota Credit Union Foundation’s Credit Unions for Kids Committee, which raised more than $168,000 for Gillette Children’s Specialty Healthcare in 2010. Throughout 2010, the volunteer committee coordinated a variety of large- and small-scale fundraisers for credit unions and members statewide.

Federation CDCUs to expand service to older adults

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NEW YORK (4/27/11)--The National Federation of Community Development Credit Unions has received a major grant from The Atlantic Philanthropies to pilot a nationwide program to help low-income seniors gain financial security. The Atlantic Philanthropies is a foundation that works to put in place policies and programs that will create long-term benefits for disadvantaged populations. Eight U.S. community development credit unions (CDCUs)--credit unions with a specific mission of serving low- and moderate-income communities nationwide--will receive funding to reach out to older adults struggling with debt and limited resources. Savings programs, low-interest loans, consumer counseling and debt-reduction plans will be offered as the “Creating a Path to Economic Security” campaign goes into action. Participating CDCUs will partner with the National Council on Aging (NCOA) and its nationwide network of Economic Security Service Centers, and other organizations that provide one-on-one counseling to help seniors regain their economic footing. “The Atlantic Philanthropies recognizes the value of credit unions to their communities,” explained federation President/CEO Clifford N. Rosenthal. “Their generous grant will allow us to help CDCUs serve older members in their communities who may be at risk of slipping further into poverty, but may not know there are resources available to help them. “Many credit unions already offer competitive loan and savings rates, as well as free checking accounts to their members,” Rosenthal added. “Through this program, we’ll help the credit unions chosen for the pilot to tailor their services to low-income seniors and those approaching retirement age, as well as help these institutions get the word out to other older adults who may never have realized now beneficial a credit union could be for them.” The federation and the selected CDCUs also will collaborate with several national organizations working with older adults in implementing the campaign and in disseminating information gleaned from it, including NCOA, the National Disability Institute and others.

Deadline June 30 to apply for NCUF fin ed grants

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MADISON, Wis. (4/27/11)--June 30 is the deadline for credit union organizations to apply for new Financial Education Grants from the National Credit Union Foundation (NCUF). NCUF’s annual grants, formerly known as “Innovation Grants,” have been renamed to reflect the foundation’s new focus on financial education. The grants continue to be aligned with REAL Solutions, NCUF’s signature program. REAL Solutions strives to improve the financial capability of American families, including low-wealth individuals and families and young adults and children. Financial education and literacy programs from REAL Solutions are designed to increase family financial capability through access to information, training opportunities and coaching. NCUF said research shows that the low-wealth market includes not only lower-income consumers, but also consumers with moderate and middle incomes who have been unable to build significant savings or assets. REAL Solutions aims to help these consumers become credit union members, grow savings and accumulate assets that will generate wealth for their families. New Financial Education Grants can assist credit union organizations participating in these programs, or other initiatives consistent with the financial education components of REAL Solutions. They are:
* Providing financial counseling; * Building employee and member financial capacity through savings challenges and other wealth coaching programs; and * Creating experiential learning programs, such as reality fairs and poverty simulations, after-school financial education programs, product awareness and staff training.
Organizations eligible to apply include credit unions, credit union service organizations, state credit union associations and foundations and any other organizations owned or controlled by credit unions. The amount of grant dollars available depends on how much credit union organizations invest in the Community Investment Fund (CIF). With interest rates at record lows this year, NCUF will need to receive funds from more supporters and CIF investors to grant at least $300,000. Each quarter, half of the CIF dividends is returned to investing credit unions. The other half is donated to NCUF, which grants half of its dividend to each investing credit union’s state foundation or league. NCUF uses the remaining portion of the CIF dividend to support its national programs and Financial Education Grants.

Top-performing CUs more apt to use advanced address-verification tools

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MADISON, Wis. (4/27/11)--The 100 top-performing U.S. credit unions are more likely than other credit unions to use advanced forms of address verification, which provide benefits such as increased member satisfaction and reduced costs, according to a recent report from Experian. The research evaluated 50 of the top 100 credit unions, as ranked by performance in the 2011 edition of the Callahan Report. The 50 credit unions participated in a short survey about address verification practices and data quality initiatives. In the report, address verification is defined as the practice of capturing, validating, cleansing and standardizing address information. Address validation practices were divided into four categories--no verification, ZIP Code level verification, premise level verification, or secondary level verification. Experian’s “2011 Address Verification Benchmark Report: The Top 100 Credit Unions” has several recommendations for credit unions:
* Quantify the amount of time, money and member “good will” currently spent on returned mail and service. * Execute a multipronged approach to cleansing data that includes:
* Staff training on the importance of overall data quality; * Use of back-end cleansing tools to continuously clean existing information over time, and to improve the quality of purchased third-party data; and * Point-of-capture address verification wherever data is entered, such as branches, call centers and websites, to standardize and ensure accuracy.
Key business findings of the report include:
* The most common level of address verification was no verification (32%). * Thirty percent of credit unions leveraged premise level address verification. Thirty percent used secondary level verification, the most advanced type. * Only 6% of respondents verify addresses at the ZIP Code level. ZIP Code verification is better than none. However, it generally results in low levels of deliverability, with house/building number and apartment/suite number often missing or inaccurate.
To view the report, use the link.

Three CUs re-affiliate with Texas league

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FARMERS BRANCH, Texas (4/27/11)--Three credit unions have re-affiliated with the Texas Credit Union League (TCUL). Pacific Employees CU, with $4.2 million assets, Beaumont, and $1.5 million-asset Union Pacific Employees CU and $3.2 million-asset First United CU, both of Tyler have re-joined the league. “I’m fortunate to have an exceptional board of directors who recognize that in order to continue UPECU’s successful operation we need additional support and resources,” said Jan Scroggins, manager of Union Pacific Employees CU. “We found that support in the league.” Among the resources the league offers small-asset credit unions is its Small Credit Union Development Initiative, which offers tools and resources, including a library, workshops and clinics, for credit unions with assets under $20 million. TCUL has also established a small-credit union committee of 17 credit union leaders. The committee meets regularly to discuss challenges and opportunities facing small credit unions. The league has facilitated the development of 14 small-credit union groups statewide. The groups are regionally based, giving credit unions the opportunity to attend local group meetings for educational programs.

New foundation to support mission in India

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WARMINSTER, Pa. (4/27/11)--Patrick Durkin, vice president of information technology at Freedom CU, Warminster, Pa., is on the board of directors for a new charitable foundation to support the Good Shepherd Mission in Puttur, India. Freedom CU is assisting the foundation.
Click to view larger imagePatrick Durkin, vice president of information technology at Freedom CU, Warminster, Pa., fills syringes at a medical camp at the Good Shepherd Mission on his recent trip to India (Photo provided by Freedom CU).
The foundation’s creation was inspired by a trip to India in February, where Durkin and 10 other individuals worked at the Good Shepherd Mission orphanage and free medical camps. During the nine-day trip, Durkin filled syringes for vaccinations and interacted with the children of the orphanage. I brought 300 bags of M&Ms for the orphans; we sponsored a meal and they got ice cream for the first time,” Durkin said. The foundation will wire donations through a Freedom CU account to the Good Shepherd Mission. Administrative fees will be covered by the foundation and all money collected from donations will go directly to support the orphanage and free medical camps. Durkin’s personal goal is also to purchase a new car for the group, because its current vehicle was in poor condition. The foundation also sponsors nursing students for US$300, who can be hired for the medical camps. The Good Shepherd Mission is without electricity after experiencing a debilitating storm this month. Many of the buildings have been damaged or destroyed. Henry Bakshak and his wife Viola began the Good Shepherd Mission when they brought six orphan boys into their home in 1978. Today, the orphanage supports about 150 children at two locations and medical camps that provide free medical and dental care for the children and local residents. Durkin says of Bakshak: “He does all of this on a shoestring budget, almost no money at all. We’re starting a new foundation, so we can get some real money for this place.”

CU System briefs (04/26/2011)

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* DOVER, Ohio (4/27/11)--A false bomb threat closed Dover, Ohio-based Tuscarawas Schools CU for the afternoon Monday. Several calls were placed before noon to employees from a person who said a bomb had been placed in the building and would go off at 2 p.m. The credit union was evacuated and a search did not turn up a bomb. Police and firefighters stayed on the scene and gave the all-clear at 2:15 p.m. However, the credit union closed for the rest of the afternoon ( April 25) … * WICHITA, Kan. (4/27/11)--A Wichita, Kan., man was sentenced to 20 years in prison for robbing the Catholic Family FCU on Nov. 8, 2010 (US Fed News April 25). Deshane Gantt pleaded guilty to one count of brandishing a firearm during a crime of violence. Armed with a 9 mm pistol, Gantt entered the credit union and told employees that this was a robbery and he didn't "want to turn this into a homicide." He vaulted the counter and collected cash from the teller drawers in a pillow case, then fled in a car driven by co-defendant Christopher Crabtree. Police stopped the car and arrested them. Crabtree was sentenced to 51 months in prison earlier this month (News Now April 14) … * BIRMINGHAM, Ala. (4/27/11)--Michael John Young, 42, of Kimberly, Ala., former president of Birmingham-based Alabama Central CU, has agreed to plead guilty to fraud against the credit union (Associated Press Newswires April 26). Court documents filed Monday indicate the fraud involved submitting bogus bills and invoices on behalf of two fictitious companies he created. The credit union paid money into the accounts of the fake companies. The fraud began about two years ago and ended last June, said the report. Young has agreed to pay restitution and forfeit $140,000 … * HARRISBURG, Pa. (4/27/11)--Pennsylvania state Rep. Mauree Gingrich (R-101) gave praise to credit unions during a ribbon-cutting ceremony for Hershey FCU's (HFCU) new facility in Annville, according to the Pennsylvania Credit Union Association (PCUA) (Life is a Highway April 26). Gingrich presented a proclamation, saying, "I truly value the role credit unions bring to the financial services industry, this community and consumers. HFCU is contributing not only locally, but also making Pennsylvania the great state that it is." She thanked HFCU for staying in Lebanon County "so people can continue to benefit from the great services it provides." Also attending the event were Joe Wambach, Pennsylvania Credit Union Foundation executive director, and Christina Mihalik, PCUA vice president, governmental affairs. From left are Hershey FCU President/CEO Diana Roberts, Gingrich, and HFCU Board Secretary Barbara McLaughlin. (Photo provided by the Pennsylvania Credit Union Association) …