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CU System briefs (04/06/2012)

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  • BRUNSWICK, Maine (4/9/12)--Marsha Richard of Topsham, Maine, has been ordered to pay full restitution to Brunswick-based Atlantic Regional FCU as the result of a $500,000 embezzlement from the credit union she worked with for 23 years.  Richard is serving a 33-month  prison sentence after pleading guilty in September to felony theft. She had agreed to pay $370,000, but a judge ruled last month she must pay the full amount. Richard has repaid $50,000 and would owe $468,000. She allegedly manipulated accounting entries for checks deposited by members that were returned for nonsufficient funds, said prosecutors. When the funds were collected, rather than crediting the account, she allegedly credited her account as well as family members' accounts (The Associated Press via The Republic April 6 and Times Record April 5) …
  • SUFFOLK, Va. (4/9/12)--A Smithfield, Va., man was sentenced to 10 years for the May 8, 2009, holdup of a Suffolk branch of Newport News, Va.-based Bayport CU (The Virginian-Pilot April 6). Terrell Jermaine Whitley, 25, was sentenced Wednesday to 20 years, with 11 years suspended, for robbery and sentenced to five years, with four suspended, for conspiracy. Whitley was convicted of the charges in March 2010.  He was allegedly the driver of the getaway vehicle …
  • YORK, Pa. (4/9/12)--York, Pa., police have issued a robbery arrest warrant for a man who is already in Daulphin County Prison on prison-escape charges. Angel M. Pomales Jr., 42, was arrested Tuesday for an escape charge and placed in the prison. He also faces charges in connection with a robbery April 2 at White Rose CU, York, and two bank robberies in Harrisburg, Pa., on March 14 and March 22.  During the credit union robbery, the suspect held a tissue over his face and presented a note demanding money. He did not display a weapon (York Daily Record April 4) …
  • EAST HARTFORD, Conn. (4/9/12)--A man has been charged with third-degree robbery and was being held on $75,000 bond in connection with a robbery Tuesday afternoon at American Eagle CU, East Hartford, Conn.  A robber had had entered the credit union and demanded "all your 20s," then fled with at least $500.  Robert Roy, 32, was taken into custody after witnesses identified a black Ford Probe as the getaway vehicle.  When he was arrested, he allegedly had $560 in $20 bills, said police. Another man was arrested on a possession of narcotics charge but released on a non-surety bond after police determined he had no part in the holdup (The Hartford Courant April 5) …

Texas Fla. Ala. step up advocacy on MBLs

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DALLAS and TALLAHASSEE, Fla. (4/9/12)--Government efforts to pump money into small businesses have not come close to the level of lending that small businesses need, but credit unions are prepared to lend more than $800 million to small businesses in Texas, said the Texas Credit Union League.

Several leagues have stepped up advocacy efforts to support the passage of a bill in the U.S. Senate (S.B. 2231 and S.B 509) that would give credit unions more ability to help the economy with small business loans.  "The increase in small business lending hinges on the passage" of the bill, which would raise the regulatory cap on credit union member business lending (MBLs) to 27.5% of assets from 12.25%.

"Credit unions make a real difference for small businesses," said Texas league President/CEO Dick Ensweiler. "We have been here when Texans needed us, and we are prepared to do more," he said in urging senators to "vote for Texas jobs and vote for this bill."

Florida and Alabama credit unions also have asked their senators to vote for the measure, said the League of Southeastern Credit Unions (LSCU).  It noted nearly 140 credit union officials from the two states participated in meetings with their legislators in Washington, D.C., in which they discussed increasing the MBL authority for credit unions, legislation to ensure more fairness in the exam process for credit unions, and legislation to allow credit unions to accept secondary capital.

Since the meetings, seven members of the league's two delegations have signed as co-sponsors of one or more of the bills for which credit unions sought support. After follow up conversations with other congressional offices, the league said it expects to see more members of Congress join the efforts.

The league  has a video message asking credit unions to contact their lawmakers. Jefferson CU, Birmingham, Ala., also produced an MBL video.  (To view them, use the links).

The Credit Union National Association (CUNA) and credit unions are in the midst of a national effort to get the MBL legislation passed soon in Congress.  By increasing the MBL cap, credit unions can help the country inject $13 billion available for small business lending.  That, in turn, would create 140,000 new jobs at no cost to the taxpayer.  Legislation to increase the cap is active in both the U.S. Senate and the House, and a vote on S. 509 is expected to take place after Congress returns from its spring recess, said CUNA.

Catalyst taps 12 pros for councils western region

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PLANO, Texas (4/9/12)--Catalyst Corporate FCU has tapped 12 credit union professionals to serve on the western regional component of the newly formed Catalyst Councils.

The western regional members become part of the 36-member Catalyst Councils program that was created to gather members' perspectives for the corporate's planning and decision-making.

Members appointed to the Western Regional Catalyst Council are:

  • Scott Waite, senior vice president/chief financial officer (CFO), Patelco CU, Pleasanton, Calif.;
  • Ron Neumann, CFO, Oregon Community CU, Eugene, Ore.;
  • Roger Ballard, CEO, NuVision FCU, Huntington Beach, Calif.;
  • Brian Hall, president/CEO, Foothill FCU,  Arcadia, Calif.;
  • Bonnie Humphrey-Anderson, executive vice president/CFO, OSU FCU, Corvallis, Ore.;
  • Doug Kileen, president/CEO, Safe 1 CU, Bakersfield, Calif.;
  • Patrick Vaughn, president/CEO, Idaho Advantage CU, Boise, Idaho;
  • Mark Morrison, CEO, MountainCrest CU,  Arlington, Wash.;
  • Rick Hanan, president/CEO, SMW104 FCU, San Leandro, Calif.;
  • Charles Papenfus, president/CEO, Inland Valley FCU, Fontana, Calif.;
  • Elizabeth Lipke, CEO, Bourns Employees FCU, Riverside, Calif.; and
  • Valerie Jensen, president/CEO, EW401 CU, Reno, Nev.
The western regional group will meet for the first time in late May.

MCUA 42 of Missouri members lack emergency savings

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ST. LOUIS (4/9/12)--An online survey of more than 1,100 Missouri credit union members indicates that 42% have no emergency savings.

The Missouri Credit Union Association (MCUA) statewide survey of members' saving and purchasing habits also revealed that less than 30% have enough savings to last four months or more.

Barry Brakeville, corporate communications director of $1.8 billion asset CommunityAmerica CU, Kansas City, Mo., said in an MCUA release that the survey should be a "wake-up call" for credit unions. He noted that "consumers should expect their financial institution to be a partner in helping them achieve financial freedom."

Many survey comments reflected that members are worried about their lack of savings and frustrated by an inability to save, with 58% reporting they were "not at all happy" with their savings balance. For example, one respondent commented, "It's impossible to save money if you can't get a job," while another responded, "We had a year's worth of savings before my husband lost his job." 

Financial experts typically recommend building an emergency savings account that can cover three months' worth of expenses. Heather DeMint, vice president of marketing at $117 million asset United CU, Mexico, Mo., said the credit union doesn't suggest an actual dollar amount for members to save, but instead encourages them to save on budget items such as insurance, cell phone plans and cable television.

"Credit reports can help consumers pinpoint ways to save," DeMint said. "Often times, we suggest debt consolidation via low-rate credit card or home equity lines of credit."

The survey collected members' responses throughout January 2012.

Minn. Family Involvement Council leads youth sessions

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EAU CLAIRE, Wis. (4/9/12)--The Minnesota Credit Union Foundation's Family Involvement Council (FIC) led two sessions during the "Co-ops YES!" Youth Leadership Conference, March 19-20, in Eau Claire, Wis.

More than 100 students from Minnesota and Wisconsin attended the "Co-ops YES!" Youth Leadership Conference in Eau Claire, Wis. Members of the Minnesota Family Involvement Council led two sessions during the event. (Photo provided by the Minnesota Credit Union Foundation.)
More than 100 high school students attended the event, hosted by the Cooperative Network, which serves more than 600 cooperatives--including credit unions--in Minnesota and Wisconsin.

The FIC's presentation, "Credit Unions: A Cooperative. A Career," focused on working with students to understand the benefits of credit unions and their belief in the cooperative philosophy of "people helping people." They also helped the group of high school juniors and seniors develop a vision for their future by discussing the types of careers available at credit unions.

"We made these sessions engaging and interactive for the students, and they offered intriguing questions about how credit unions operate and the emerging job possibilities available," said FIC Chair Bridget Moeller of Greater Minnesota CU, Mora, Minn. "We worked to impress on the students the credit union core values of equality, participation and mutual help, as well as how credit unions strive to improve the well-being of their members."

In addition to Moeller, FIC presenters included Shannon Butler of Postal CU, Woodbury, Minn., and Andrea Molnau of United Educators CU in Columbia Heights, Minn. As a way to promote the International Year of Cooperatives, along with the credit union difference, the group also discussed the concept of cooperatives and how credit unions fit into that mold. They also described the value that credit unions, and all cooperatives, provide within the financial marketplace.

The United Nations General Assembly has declared 2012 as the International Year of Cooperatives, highlighting the contribution of cooperatives to socio-economic development, particularly their impact on poverty reduction, employment generation and social integration.

This is the third year that the foundation's Family Involvement Council has participated in the Cooperative Network's youth leadership conference, which aims to build leadership skills that will offer opportunities to tomorrow's cooperative leaders.

TCUF offers 100 free fin lit webinars in April

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FARMERS BRANCH, Texas (4/9/12)--Through a grant from the Texas Credit Union Foundation (TCUF), the Consumer Credit Counseling Service of Greater Dallas (CCCS) will offer 100 free, live webinars throughout April in honor of National Financial Literacy Month. 

The 100 webinars will focus on 27 personal finance topics, ranging from credit scores and getting out of debt to buying a home and preventing foreclosure.

"The foundation is committed to building strong communities by supporting programs and initiatives that help to improve the financial circumstances of Texas families," said Courtney Moran, TCUF executive director. "Financial stability is an essential ingredient to maintaining a strong, healthy family unit."

Todd Mark, vice president of education for CCCS of Greater Dallas, said the agency wants to offer consumers additional, convenient educational resources so they can be empowered to make healthy financial decisions, and ultimately, achieve financial freedom.

Mark said the webinars would not have been possible without the support of the foundation.

Webinar topics are as follows:

  • Recession-Proofing Your Finances;
  • Surviving Financial Crisis;
  • How Do I Get Out of Debt?;
  • How Do I Save My Home from Foreclosure?;
  • 4 C's of Credit;
  • Student Loan Affordability;
  • College Credit 101: Entering the Age of Acquisition;
  • Building Wealth;
  • Asset Protection;
  • Life after Foreclosure;
  • Conquering Credit Scores and Reports;
  • Money Matters: Financial Success Begins Today;
  • So You Want To Be a Homeowner;
  • Dealing with Divorce;
  • Demystifying Reverse Mortgages;
  • Getting Ready for Baby;
  • The Psychology of Debt;
  • Couples and Money;
  • The Wedding Planner;
  • Lil Kids and Money;
  • Seniors, Money and Scams;
  • Grocery Shopping and Coupon Savvy;
  • Wheels You Can Afford: How to Buy a Car;
  • How to Spend Your Tax Refund;
  • Alternatives to Pay Day Loans;
  • Surviving and Preventing Identity Theft; and
  • Understanding the Credit CARD Act.
The Credit Union National Association (CUNA) sponsors the National Youth Saving Challenge during the month of April in celebration of National Financial Literacy Month. It is held in conjunction with National Credit Union Youth Week, also sponsored by CUNA, which 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 new accounts.

TransUnion study Consumers pay auto loans first

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CHICAGO (4/9/12)--In 2011, consumers were more likely to pay their auto loans before their credit cards and mortgages, according to a TransUnion study.

The divergence in payment patterns--where consumers are increasingly apt to pay their credit cards before their mortgages--has continued for four straight years, according to TransUnion's Payment Hierarchy study update.

"The reversal in payment patterns between credit cards and mortgages has been well documented, but our findings were illuminating because it had not been previously clear that auto loans were considered a higher priority by consumers than both credit cards and mortgages," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit.

"With unemployment remaining high and real estate values remaining stagnant or further depreciating, consumers continued to pay their credit cards ahead of their mortgages. However, the importance of their auto loans appears to have trumped even the value they place on their credit cards," Becker added.

The TransUnion analysis looked at a sample of roughly four million consumers in each quarter of 2011 who had at least one open auto loan, one open credit card account and one open mortgage. The study found in each quarter that there was a clear preference for remaining current on auto loans, ahead of credit cards and mortgages. Specifically, of the consumers who were delinquent on any of these products:

  • 9.5% were delinquent on an auto loan while current on their credit cards and mortgages;
  • 17.3% were delinquent on a credit card while current on their auto loans and mortgages; and
  • 39.1% were delinquent on a mortgage while current on their auto loans and credit cards.
"In other words, the auto loan is seldom the first choice when a consumer has to decide which payment to miss," Becker said.

This trend goes against the advice many credit union industry financial planners have given in the past--that mortgage payments should come first so the member doesn't risk losing the family home.

Auto loans have become the preferred payment because consumers need to get to work or look for employment. Also, a car loan is not a revolving loan--the impact of repossession is greater than the loss of a credit card, Becker explained.

"In addition, consumers may have equity in their autos after several years of payments that they are looking to preserve--which is no longer the case for most homes," Becker added. "In fact, negative equity has become increasingly common for homes, which may further contribute to the shift in payment preference to auto loans."

Newspaper Calif. members count on CUs services

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SAN DIEGO (4/9/12)--More Californians are counting on services from credit unions, according to a San Diego Business Journal (March 26) report about membership growth in the state.

Overall membership in the state swelled last year to about 9.7 million, an increase of 2% or 215,000 members, said the California Credit Union League in the article, "More Members Bank on Credit Unions' Services."

During fourth quarter, the state's credit unions added nearly 167,000 new members, but on a net basis the number was closer to 77,000, after counting attrition, said Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues.

Many of the gains occurred in late September/early October and involved moving accounts from the "Big Five"--Chase Bank, Bank of America, Citibank, Wells Fargo Bank and U.S. Bank--after large banks decided to charge customers for using their debit cards, Dykstra told the Journal.

The article noted that San Diego-based California Coast CU attracted about 11,000 new members during 2011, a 57% increase over 2010 membership gains. Its CEO, Marla Shepard, told the Journal that the growth was the result of growing dissatisfaction with bigger banks. About 75% of the new members opened a checking account and got debit cards, while 24% opened a loan. 

The newspaper also noted that the league and credit unions are supporting legislation to increase credit unions' member business lending (MBL) cap to 27.5% of assets from the current 12.25%.

Shepard said her credit union is prevented from making new small-business loans because it has already reached its MBL cap--about $230 million.  She noted that banks have cut back considerably on small business lending the past several years  and said credit unions should be given the ability to extend MBLs because there is a real need for the loans.

The Credit Union National Association (CUNA) estimates that increasing the MBL cap would mean $13 billion would be available for investing in new small business loans. That, in turn, would help create 140,000 jobs the first year, without costing taxpayers a dime, said CUNA. The U.S. Senate is expected to vote on a bill to increase the cap sometime after the congressional recess.

Vermont CUs have their day at the Statehouse

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SOUTH BURLINGTON, Vt. (4/9/12)--Credit union leaders gathered Wednesday at the Vermont Statehouse to hear speakers and meet with many of the state's 180 legislators.

Vermont State Speaker of the House Shap Smith speaks at the state's annual CUs in the Statehouse event. (Photo provided by the Association of Vermont Credit Unions)
Participants heard comments from State Senate President John Campbell and Speaker of the House Shap Smith, according to the Association of Vermont Credit Unions (AVCU).  Smith spoke about Hurricane Irene's impact on the state and the state's budgetary pressures.

Perspective on state and federal issues was also provided by Vermont Department of Banking, Insurance, Securities & Health Care Administration (now the Vermont Department of Financial Regulation)  Deputy Commissioner Tom Candon,  AVCU President Joe Bergeron, and the association's lead lobbyist, Adam Necrason.

The presentations and reception were preceded by AVCU's annual display in the Statehouse Card Room.  For more than three hours, a steady stream of legislators stopped by throughout the morning and early afternoon to discuss issues such as Americans With Disabilities Act (ADA) regulations, Internet lenders, state and municipal deposits, and the credit union marketplace.  They talked with AVCU Vice President Bryan Kent, Economy of Me Program Manager Colin Ryan, and AVCU Legal Counsel/Lobbyist Richard Brock.

"This is our most important state-level legislative event," said Bergeron of the annual CUs in the Statehouse day. He noted the support from credit union leaders to join the effort "to add significant impact to daily lobbying efforts. One-on-one connections made in a Statehouse social setting go much further than any laundry list of facts and figures we can produce, he said.

"Throughout all the years we've done this, legislators have become more aware of credit unions, more appreciative of the event itself, and have told us repeatedly how much they look forward to and enjoy it."