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National CU Youth Week results announced

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MADISON, Wis. (5/2/08)--The results are in--and they’re record-breaking. National Credit Union Youth Week, hosted by the Credit Union National Association (CUNA), brought in more than $11.7 million in youth deposits April 20-26, with an average of about $150 per child. About 75,420 youth made deposits, and 6,583 new youth accounts were opened.
Click for slide show Connor (left) and Tyler Babcook show off the Got Green prizes they received for bringing plastic bags to recycle toward deposits into their Electro Savings CU youth accounts during National Credit Union Youth Week. The credit union is located in St. Louis, Mo. (Photo provided by Electro Savings CU)
Results were received from 395 credit unions. Last year, $10.1 million was deposited by youth. About 71,844 youth made deposits and 9,067 accounts were opened, at an average of $141 per child. Results were from 393 credit unions. "Not only are more young people participating in the saving challenge each year, they are also saving more," said Dan Mica, president/ CEO of CUNA. "Credit unions are spreading the word to our nation’s youth about the importance of saving, and these savvy young members are demonstrating that they have heard the message loud and clear." Youth Week’s theme was “Got Green? Grow it at Your Credit Union.” A number of credit unions used the “green” theme to promote saving and being environmentally friendly. DuTrac Community CU, Dubuque, Iowa, donated trees in honor of Earth Day and Arbor Day each time a youth deposited money into a credit union account. Both Earth Day and Arbor Day took place during Youth Week. Other credit unions reported meeting their savings goals quickly. “We surpassed our credit union deposit goal on the first day,” said Melody Aleman, marketing coordinator at SC Telco FCU, Greenville, S.C. “We had to order prizes an additional two times to keep up with the amount of kids depositing,” added Amy Blanchard, Limestone FCU, Manistique, Mich. Limestone FCU had 126 deposits, including a handful of youth certificates of deposit. “We had a great week,” Blanchard continued. “Our advantage is that we are directly across the street from the middle school and high school. We also have a branch at the school that was open on Monday and Wednesday during Youth Week.” To view a slideshow of photos from Youth Week, use the link.

Study Rise in car loan delinquencies shifts collections

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NEEDHAM, Mass. (5/2/08)--Credit unions whose bread and butter loans are auto loans may face increasing delinquency rates, but maintaining the status quo in current collections practices is no longer an option for auto lenders, according to new research. Like other types of consumer lending in the nation, auto loans' delinquency rates are increasing, with the 60 days past due category rising 25% between the second and fourth quarters of 2007, said TowerGroup. Change will be mandatory to help lenders survive current market conditions that are creating a sharp increase in collections volume, said the Needham, Mass.-based financial services research and consulting firm. Lenders do not want to repossess cars, and auto owners want to keep their cars. Unlike real estate investors, auto buyers don't speculate on auto purchases hoping for appreciation in value, and they don't try to "flip" the car to make fast money, said TowerGroup. Because auto loans involve a fixed interest rate and a fixed monthly payment, a delinquent payment is a sign of trouble auto lenders can't ignore. Instead, they should dive right in to address delinquency problems on a number of fronts, the firm said. TowerGroup identified best practices in collections and delinquency management, which fall into three categories: people, process and technology. The "people" category encompasses initiatives ranging from managing the staff already in place as collectors, to capacity planning, to properly training and supporting collections staff and offering the right staff incentives at the right time. The "process" category covers areas from member/customer segmentation strategies and approaches, to rewriting loan terms if necessary, to changing front-end processes and benchmarking performance. The "technology" applications exist to help lenders combat growing delinquency rates and mitigate losses. Lenders should think beyond the existing collection practices to appropriately leverage IT resources, said TowerGroup. The report, "Stay in Your Car Ma'am: Best Practices in Automotive Finance Collections," is authored by Bobbie Britting, a senior analyst in the consumer lending practice at TowerGroup.

CU System briefs (05/01/2008)

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* NEW YORK (5/2/08)--The New York Coalition of Community Development Financial Institutions Statewide Conference--the first statewide gathering of community development financial institutions (CDFIs)--will meet May 8 in Albany, N.Y., according to the National Federation of Community Development Credit Unions. The federation and Alternatives FCU, Ithaca, N.Y., have organized a Credit Union Collaboration Roundtable for May 9 to develop strategic partnerships. The coalition's goals include securing an initial appropriation of $5 million to the New York CDFI Fund; maintaining a separate appropriation of $1.5 million to EDSC's Minority and Women's Business Lending CDFI grant program; and raising the visibility of CDFIs on the state's economic development agenda … * PORTLAND, Maine (5/2/08)--Steve Ford, son of the late President Gerald Ford, will be among the speakers headlining the Maine Credit Union League's 70th Annual Convention, which begins today and continues through Saturday in Portland. Its theme is Maine's Credit Unions and the Maine Credit Union League--70 Years of Giving. Other speakers include U.S. Sen. Susan M. Collins, U.S. Rep Michael H. Michaud and Gov. John Baldacci … * LANSING, Mich. (5/2/08)--CASE CU hosted a visit by State Rep. Barb Byrum to the credit union's in-school branch at the Capital Area Career Center in Mason, Mich. April 21 in recognition of National Credit Union Youth Week. The credit union and career center offer a teller internship at the branch for students enrolled in the center's banking and finance curriculum. Pictured are from left, intern Sam Fata of Lansing Catholic High School, Byrum, and Nichole Putman, CASE CU sales and service leader. (Photo provided by CASE CU) … * COLUMBUS, Ohio (5/2/08)--Fewer than 23% of Ohioans encourage financial literacy in their families, reported the Ohio Credit Union League at a press conference in the Statehouse on credit unions' financial education initiative. League President Paul Mercer said Ohio credit unions are taking action to protect the state's future by teaching students to make smart financial decisions. The initiative involves promoting the website as a financial education resource. State Senate Minority Leader Ray Miller (R-Columbus), shown here, spoke in support of the credit unions' efforts. Sharon Custer, CEO of BMI FCU, noted that through partnerships with schools, Ohio's credit unions have educated more than 20,000 students in nearly 200 schools about financial matters. (Photo provided by the Ohio Credit Union League) …

Loan criteria relaxed for Virginia tornado victims

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VIRGINIA BEACH and NEWPORT NEWS, Va. (5/2/08)--Credit unions in Virginia were finding ways to make things easier for the victims of Monday's eight tornados in the state. Virginia Beach-based Chartway FCU announced it would be more flexible for loan applicants affected by the storms. The credit union has a branch office in Suffolk, one of the hardest-hit areas. "We understand that cash flow is imperative for victims at a time like this, and sometimes federal funding just doesn't come fast enough," said Chartway President/CEO Ron Burniske. The credit union will evaluate each loan request on a case-by-case basis and will be especially flexible on the dollar amount, term, and payment due day on those loans. It also will offer the option of waiving initial loan payments without a penalty fee, so victims can get back on their feet financially while waiting for federal funding and insurance checks. The leniency applies to all types of loans, both long- and short-term, Burniske said. "These people potentially lost everything they owned in a matter of seconds. We will try to help them regardless of their need," he said. "Maybe they lost their car, so we'll work with them on an auto loan. Maybe their house got torn apart, so we'll help them with a home improvement loan. If they simply need money for food or rent, we can help them with that, too. It's about us pitching in to help, as part of this community." Langley FCU, based in Newport New, announced it is matching contributions up to $10,000 in its newly created tornado relief fund for victims of the tornado. Members and non-members can visit any branch of LFCU to make contributions by cash or check throughout May. It will donate contributions to the Suffolk Chapter of the American Red Cross. The tornadoes tore apart everything in their path for about 10 miles, leaving many homeless, said Langley. More than 200 people were injured during the storms.

Slowdown in Latino remittances doesnt affect IRnet

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MADISON, Wis. (5/2/08)--Many Latin American immigrants in the U.S. have stopped sending money back to their families in the past two years, but it hasn’t affected the level of international remittances for the World Council of Credit Union’s (WOCCU) International Remittance Network (IRnet). The Inter-American Development Bank in Washington, D.C., released Wednesday a survey conducted in Spanish in February with 5,000 people (The New York Times May 1). About 50% of the 18.9 million Latino immigrants in the U.S. now regularly send money to relatives in foreign countries, compared with 73% two years ago, the survey indicated. The drop in remittances is a result of downward economic pressures due to the downturn in the low-wage U.S. job market amidst the general economic malaise and the Bush administration’s crackdown on illegal immigrations, the survey said. About 47% of the immigrants surveyed said they did not have legal status. However, while the number of immigrants sending remittances declined, the total dollar amount of remittances rose between 2006 and 2008, the study said. It estimates total remittances sent to Latin America of $45.9 billion in 2008, an increase of $500 million over 2006. WOCCU’s IRnet program overall has seen a flat, unchanged number of remittances over the past year, Greg Moser, vice president of WOCCU services, told News Now. The program serves nine countries--seven in Latin America. The participating countries are Kenya and Jamaica, and in Latin America: Bolivia, Ecuador, El Salvador, Guatemala, Honduras, Mexico and Nicaragua. Of the seven countries in Latin America, IRnet remittances declined in two countries and increased in five during the first quarter of 2008--for an overall effect of essentially no change, Moser said. There were 344,000 remittances through the first quarter of 2007, and 340,000 remittances through the first quarter of 2008, he added. There were 1.506 million total IRnet remittances in 2007, Moser said. “We’re monitoring the numbers on a monthly basis to check on any growing trends,” he said. “Our remittance program is unique in that our receiving point for remittances in those countries is credit unions, not a Western Union.” Tiffany Kultgen, WOCCU remittance services manager, said a key time frame is rapidly approaching--the Mother's Day week is the highest remittance time of year in Latin America. “If the remittance decrease continues during the Mother’s Day holiday in Mexico, it would be indicative of an ongoing trend, more than just a dip in remittances,” she said.

Missouri CUs help stop elder abuse with DVD

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JEFFERSON CITY, Mo. (5/2/08)--Missouri credit unions are taking a role in the fight to stop financial abuse of the elderly by participating in a video. As a funding sponsor of the new Missourians Stopping Adult Financial Exploitation (MOSAFE) consumer video, representatives of the Missouri Credit Union Association (MCUA) participated in the MOSAFE media conference to introduce the new MOSAFE consumer video on April 23 (CourierNetApril 30). “Credit unions have been involved in this project from the very start through funding and assisting MOSAFE with the video’s content,” said Peggy Nalls, MCUA senior vice president, public/legislative affairs. “This is an important tool for Missouri seniors and the people who care for them in helping to protect their assets.” The video is narrated by Doris Roberts, better know as Raymond’s mother on the television show, “Everybody Loves Raymond.” Missouri credit unions also helped MOSAFE produce a video in 2005 that trained employees of financial institutions to help them recognize and report elder abuse.

CUs on the Tube Check out Tinker video contest winner

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OKLAHOMA CITY, Okla. (5/2/08)--The winner of Tinker FCU’s video contest has been announced. The Oklahoma City, Okla.-based credit union invited individuals to create videos and answer the question, “What does money mean to me?” The videos were voted on by a panel of judges and viewers. The overall winner was Chase Vincent, a pre-med Oklahoma State University student. To him, money means a medical school education in chiropractics. Vincent received a $2,000 scholarship. Bracket winners received $50 iTunes gift cards, and the fan favorite, Stephanie Bowen, received a $200 iTunes gift card. To see all of the videos, use the link.

WOCCU efforts contribute to European Parliament report

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BRUSSELS, Belgium (5/2/08)--A report adopted April 22 by the European Parliament on volunteerism contains the first formal definition of credit unions to be included in a European Union (EU) document. The definition was added as a result of lobbying efforts by the World Council of Credit Unions (WOCCU). Authored by Marian Harkin, the European Parliament Rapporteur and an Irish member of the European Democrats Party, the report promotes the value of volunteerism and designates 2011 as the European Year of Volunteering. It includes a reference to the role credit unions play with regards to volunteerism. The reference reads: "…(W)hereas volunteers play an important role in achieving the Lisbon Strategy goal of socio-economic cohesion by contributing to financial inclusion, for example, by establishing credit unions which are regulated and not for profit financial cooperatives, run and governed by volunteers." The reference was supported by WOCCU in collaboration with consulting firm Policy Action Ltd. It is the first formal reference in an official EU document that defines credit union ownership and governance. It makes possible the use of the report to influence other EU decision-makers, according to Dave Grace, WOCCU's vice president of association services. "The reference to credit unions is part of a much larger, further-reaching document on the importance of volunteerism with European Union countries," Grace said. "Thanks to Marian Harkin's efforts, this is a big step forward for credit unions."

Southeast Corporate weathered 2007 well report says

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TALLAHASSEE, Fla. (5/2/08)--Despite turmoil in financial markets in 2007, Southeast Corporate FCU had a solid year, according to its 2007 annual report. “Although no institution can claim to be entirely insulated from the distress in the financial markets, Southeast was well-positioned to weather the storm,” wrote Linda S. Darling, Southeast financial officer, in the Financial Officer’s Report section of the annual report. “By adhering to conservative risk-management practices in this difficult operating environment, the corporate experienced an exemplary year.” In 2007, net income rose to $6.3 million, a 70% increase compared with 2006. The increase was driven by a 21% improvement in interest income and a 10% increase in fee income, Darling noted. The combination of these two categories more than offset the 8.3% rise in non-interest expenses, she added. Also in 2007, Southeast Corporate’s Member Business Solutions credit union service organization underwrote more than $194 million in business loans for member credit unions, a 75% increase over 2006 volume. The significant rise in net income fueled an increase in Southeast’s capital, Darling wrote. Retained earnings rose to $112.3 million, an increase of 6% compared with $106 million. Total capital increased to $213.6 million, up from $207.5 million at the end of 2006, she added.

Suit vs. CU seeks class action in Centrix repossessions

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ST. LOUIS and ARLINGTON HEIGHTS, Ill. (5/2/08)--A credit union that used subprime auto broker Centrix Financial as its agent is the target of a lawsuit seeking a class action status related to auto repossessions. The lawsuit, filed in Jackson County (Mo.) Circuit Court last week, against Arlington Heights, Ill.-based Meadows CU, names Minnie Pearl Landrum of Grandview, Mo., as the class representative, said a St. Louis-based business and legal publication (Daily Record April 28). Centrix Financial is not a party in the lawsuit because it is in a Chapter 11 bankruptcy reorganization in Colorado. The case includes Missourians who within the past six years purchased an auto with a loan from the credit union and saw the auto repossessed. Edward Buettner, CEO of the $108.6 million asset credit union, told News Now the credit union had not received anything about the lawsuit. "I have not heard about it, so I really couldn't comment about it." The suit alleges the credit union, through its agent, used faulty notices it repossessed vehicles from borrowers who fell behind in payments. Repossession notices sent by the credit union via Centrix were incomplete or misled borrowers about their rights under Missouri law, said the petition. Notices of repossession had no contact information for borrowers to inquire about the debt and did not include the amount owed. The lawsuit is asking the court to rule that the credit union cannot sue the borrowers to collect on deficient balances and is seeking monetary and punitive damages.

Pennsylvania Foundation directors announced

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HARRISBURG, Pa. (5/2/08)--New directors for the Pennsylvania Credit Union Foundation were approved at Wednesday’s board meeting for the Pennsylvania Credit Union Association (Life is a Highway May 1). The new foundation board members include:
* Terry Shoemaker, CEO, Berks Community FCU, Reading; * Paul Santoski, CEO, First CU of Scranton; * George Nahodil, executive vice president, marketing, Members 1st FCU, Mechanicsburg; and * Maria LaVelle, CEO, Westmoreland Community FCU, Greensburg.
Also, the board approved Jay Murray, Mid-Atlantic Corporate FCU, Middletown, to replace Ed Fox, retiring CEO of Mid Atlantic Corporate, as an ex-officio member of the foundation board.