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CU System Briefs (05/20/2013)

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  • WILKES-BARRE, Pa. (5/20/13)--An employee at Choice One Community FCU was charged with stealing roughly $50,000 in bonus point awards from member accounts. Officials became aware of the thefts after three members complained that bonus points to which they were entitled were not available. The Wilkes-Barre, Pa.-based credit union offered a points program to encourage members to use their debit cards. After accumulating a certain amount of points they would win a gift certificate. Donald G. Pientka, 49, Hanover Township, was an electronic services specialist at the credit union and allegedly had access to the account. He was charged with felony counts of receiving stolen property, theft  by unlawful taking, theft  by deception, using an unauthorized access device and identity theft. The credit union replaced the awards for members, and no members' personal or account information was compromised (Standard-Speaker May 12) ...
  • PLEASANT GARDEN, N.C.  (5/20/13)--A retired manager from the Greensboro (N.C.) Postal CU died Monday at her residence in Pleasant Garden,  N.C.  Evelyn Butler Arnold, 74, had given the Greensboro Postal CU 32 years of service. She was a member of the South Elm Street Baptist Church and the Order of the Eastern Star. Above all else Arnold enjoyed traveling and spending time with her family. She is survived by her husband, two daughters, one brother, three sisters, and five grandchildren. Funeral services were held Friday (Greensboro News & Record May 16 ...

Youth 'Stached Their Cash--All $25.2M--With CUs

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MADISON, Wis. (5/20/13)--Young credit union members deposited about $25.2 million into their share and savings accounts during this year's National Youth Saving Challenge, sponsored by the Credit Union National Association.

Click to view larger image Click for larger view

The 224 credit unions participating this year collectively saw 117,244 youth deposit an average of $214 each.

In 2009, the Saving Challenge expanded beyond National Credit Union Youth Week to run the entire month of April. Credit union staff told CUNA that a week wasn't long enough. This year, more than half (60%) of the participating credit unions ran the challenge for the entire month--giving them more time to open 6,173 new youth accounts.

The National Youth Saving Challenge also rewarded 10 randomly drawn savers with $100 cash prizes. The winners were:

  • Click to view larger image Holding a magnifying glass that would make Sherlock Holmes envious, super saving sleuth Rhys Hollowood cracks the mustache mystery during National Credit Union Youth Week at Clearview FCU in Moon Township, Pa.
    Amara, age 8, from Electro Savings FCU, St. Louis;
  • Sydney, age 2, from Jax FCU, Jacksonville, Fla.;
  • Bryar, age 1, from Lakeview CU, Neenah, Wis.;
  • Rylee, age 5, from North Georgia CU, Toccoa, Ga.;
  • RJ, age 6, from Richmond Community FCU, Augusta, Ga.;
  • Christopher, age 9, from Rockford Postal ECU, Loves Park, Ill.;
  • Rylee, age 2, from Sioux Valley Coop FCU, Watertown, S.D.;
  • Charleigh, age 1, from Susquehanna Valley FCU, Camp Hill, Pa.;
  • Cheyanne, age 3, from United Health CU, Burlingame, Calif.; and
  • Max, age 4, of Monument, Colo., from Wilmington (Del.) Postal FCU.
Click to view larger image Hamilton the Pig--the Kids Club mascot at Unitus FCU, Portland, Ore.--took photos with young savers at an open house and entertained third-graders at a nearby school by leading The Dollar Holler Rap, after which every student received a Hamilton piggy bank. (Photos provided by CUNA)

CUNA also sponsors National Credit Union Youth Week, which was held April 21-27. The theme for this year's youth week was Saving Sleuth: Solve the Mystery. The week was created by CUNA so credit unions nationwide could focus on the financial needs of young people and provide financial literacy education. It teaches the benefits of saving and goal setting, and invites youth to open savings accounts at their credit union and make deposits throughout the year.

In 2014, National Credit Union Youth Week will be celebrated April 20-26.

Raising awareness about credit unions is one of the steps in CUNA's, leagues' and credit unions' Unite for Good campaign to achieve the vision of Americans choosing credit unions as their best financial institution. As that awareness grows, potential members will turn to aSmarterChoice and Unite for Good websites to locate credit unions they can join and find out more.

In 2014, National Credit Union Youth Week will be celebrated April 20-26.

UNO FCU's Revamped Facebook Page Draws a Crowd

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NEW ORLEANS (5/20/13)--University of New Orleans FCU (UNO FCU) recently transformed its Facebook page to engage members rather than using it to post promotions and interest rates.

The page, created in 2009, focused primarily on announcing on-campus visits and educational programs or, posting pictures of past events. The feedback from members was positive. During the next three years, the page grew to more than 600 "likes." However, fans were not engaged with the page, said Christopher Maurer, UNO FCU president/CEO.

In late 2012, UNO FCU began the process of revitalizing the page by measuring its readership results. Each post was monitored to determine how many fans viewed it, if it engaged fans, when it was viewed, and if it earned positive or negative feedback.

"We had the best results with giveaways and sponsored advertising on Facebook" said Maurer.

A drawing for tickets to the New Orleans Jazz and Heritage Festival attracted 234,876 views and 865 likes, Maurer said. The credit union also posted more light-hearted content as opposed to only financial information, thus engaging visitors with local events and news.

UNO FCU has invested about $100 in Facebook advertising, Maurer said.

In two months, UNO FCU's fan base increased to 1,156 fans from 630. Fans are "liking," posting, and sharing daily. UNO FCU's posts are more external, highlighting online trends, university events, and New Orleans happenings, all creating a component of community involvement.

UNO FCU plans to continue this strategy with hopes to intensify awareness on campus and assist more University of New Orleans students in advancing their financial future.

"The elements that aren't advertising attract the most views," Maurer said. "By adding that human element rather than appearing as a machine that spits out advertising, we remain relevant to our audience. At the same time, we put out information that affects our members, such as financial information or school events. We promote campus organizations. No matter where you live or work, I think it's important to post things that are relevant to the group."

Bankrate: Two-thirds Of Prepaid Debit Cards Have No Monthly Fees

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NEW YORK (5/20/13)--A study of 24 widely issued prepaid debit cards indicates all charge fees of some kind. However, two-thirds either have no monthly fee or offer a fee waiver.

The fees vary widely by card and how the consumer uses it, said Bankrate.com, which conducted the survey in February. Credit union prepaid debit cards were not among those in the study.

"The biggest development in the prepaid card market over the past year was the entry of several large national and regional banks," said Greg McBride, senior financial analyst at Bankrate.com. Many offer cards with fixed monthly costs. "The ability to know the monthly cost in advance is valuable to consumers, particularly with the decline in free checking accounts," McBride said.

Only 39% of banks offer stand-alone free checking accounts. That compares with 72% of credit unions, according to a previous Bankrate.com survey.

In the prepaid debit cards study, 15 cards (63%) charged a monthly service fee of $3 to $9.95. Eight of these offer either a fee waiver or fee reduction, based on how much is automatically loaded onto the prepaid card.

Other fee findings:

  • Activation fees: Two-thirds of the cards have no activation fee if purchased online, and 54% can be purchased in person with no fee. The fees are $2.99 to $14.95.
  • Reload fees: None of the cards charged reload fees.
  • ATM withdrawal fees: All cards charged a fee, which ranged from $1.50 to $2.75 per transaction, to withdraw from another institution's ATM. Fifteen cards have their own ATM networks. Of those, 67% charge in-network consumers between $1.50 and $2.75.
  • ATM balance inquiry fees: Fifty-four percent of the cards charge this fee, which ranges from 45 cents to $1 regardless of which network the ATM belongs to. Of the remaining 11 cards, five charge this fee at some ATMs, four don't charge at all and the other two don't permit ATM balance inquiries.
  • PIN/signature point-of-sale (POS)  fees:  Roughly 71% don't charge for PIN POS transactions, and two don't permit this type of transaction. The five cards with this fee charge from 49 cents to $2. Twenty of the 24 cards, or 83%, do not charge a signature POS transaction fee. Those that do, charge 95 cents to $1.
  • Monthly statement fees:  Fifty-eight percent of cards charge $1 to $5.95 for monthly statements by mail, 33% don't charge the fee and 8% don't offer mail statements. None of the cards offer a statement that can be printed at an ATM.
  • Bill payment fees: Twenty-two cards (92%) do not charge this fee. One assesses 99 cents for each payment and another charges $1 for bills paid via paper checks.
  • Customer service fees:  Of those surveyed, 17% charge for customer service calls, with $2 the most common fee, and 88% provide at least one free call per month. Two-thirds never charge for telephone customer service.
  • Declined transaction fees: Fifteen cards--63%--do not charge for declined transactions. Five (21%) assess 25 cents to $1.95 for each declined transaction. Four charge only for  transactions declined at an ATM; they assess $1 or $2.
  • Inactivity fees: In the study, 29% of the cards charged an inactivity fee, ranging from $1.95 to $5.95 after 90 days of inactivity, and 71% don't charge the fee but may close the card after three to six months of inactivity.
For a list of cards with their specific fees, use the link.

Maine Committee Nixes Foreclosure Bills, League On Work Group

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PORTLAND, Maine (5/20/13)--Six of seven foreclosure bills introduced in Maine's Legislature failed to make it out of the state's Judiciary Committee last week. The seventh, which is supported by the Maine Credit Union League, will be the basis for a study group, which will include the league as a participant.

The state Judiciary Committee on May 13 voted "ought not to pass" on six of the foreclosure bills and voted to carry over the seventh, L.D. 1389, a measure that would expedite the foreclosure process, said the league (Weekly Update May 17).

The league had opposed four of the six measures voted down in committee. The other two measures voted down included L.D. 125, which would have preserved lender equity during foreclosures and included an amendment drafted by the league, and L.D. 392, which dealt with the original mortgage note.

The Attorney General is expected to convene a study group, which would use L.D. 1389 as a basis to study and suggest changes to the foreclosure and mediation process.   The league testified recently in support of L.D. 1389 at a public hearing and said it  will participate in the group, which expects to meet over the summer and fall.

"Many of the components of L.D. 125 are expected to be brought forward as part of the study group's discussions, and, ultimately, the defeat of the original mortgage note bill does not negatively impact credit unions in any way," the league said.

"We supported this bill with an amendment we drafted last session, and it overwhelmingly passed the House and Senate before being vetoed by the governor, so we saw no valid reason not to support it again this year," said league President John Murphy.

"Our main focus is on making meaningful changes that will curb abuse in the foreclosure process which is what our credit unions have asked us to do," Murphy said.  "We will continue to work for changes that balance the interests of the lenders and consumers, and look forward to being involved in these ongoing discussions."

MCUL & Affiliates Endorses Peters For U.S. Senate

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DETROIT (5/20/13)--The Michigan Credit Union League & Affiliates endorsed U.S. Rep. Gary Peters (D-9) for the U.S. Senate, citing his legislative record of supporting common-sense financial measures that help middle-class families, small businesses and community-based financial institutions such as credit unions.

"Congressman Gary Peters has been a true champion for reasonable, bipartisan financial solutions that benefit local economies, and Michigan credit unions are confident that he will continue the fight to move our economy forward as our next U.S. senator," said MCUL CEO David Adams (Michigan Monitor May 17).

"[He] has a been a leader in supporting families on Main Street and helping small businesses get access to much-needed credit and capital that can help them grow and create jobs," Adams added.

Peters has demonstrated understanding and support for the critical role credit unions play in moving the state and the nation's economy forward, MCUL said. Since taking office in 2009, Peters co-sponsored and helped pass the Small Business Jobs Act of 2010, making it easier for small, community-based financial institutions to increase their capacity to lend. That resulted in billions of dollars in new loans to help small businesses, MCUL said.

"Peters has a record of strong championing of credit union issues, and the Credit Union National Association  intends to work closely with the Michigan league to elect him to the U.S. Senate," Trey Hawkins, CUNA vice president of political affairs, told News Now. CUNA's Credit Union Legislative Action Council already has contributed to Peters the legal maximum of $10,000 for the 2014 election, Hawkins noted.

Peters also authored the Small Business Credit Initiative, which made available $79 million in federal funding for Michigan-specific lending programs, helping businesses create thousands of new Michigan jobs, MCUL said.

Three times Peters has co-sponsored legislation to raise the cap on credit union member business lending, a measure which would free up millions of dollars in capital for small businesses and create thousands of new jobs, without costing taxpayers a dime, MCUL said. CUNA has said raising the cap to 27.5% of a credit union's total assets from 12. 25% will generate $13 billion in new loans and create 140,000 jobs.

PCUA Meeting Speaker: To Reach Young, Serve Parents First

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HARRISBURG, Pa. (5/20/13)--To reach America's youth, credit unions should first serve their parents because children are highly influenced by their parents' recommendations, keynote speaker Mark Arnold told the opening session Thursday at the Pennsylvania Credit Union Association's 2013 Annual Convention and Expo.

Arnold, of On the Mark Strategies, presented 10 images of what future members will look like and challenged credit unions to find their own niche (Life is a Highway April 17). Credit unions are in a time of convergence between "bricks and clicks," when members value branches while also migrating using electronic/mobile services, he said.

Credit unions should train their frontline staff to ensure that members of all ages are served effectively, Arnold advised.

After the general session, Arnold conducted a special session for volunteers on how to run effective board meetings.

The exposition included 70 exhibitors offering products and services for credit unions.

Georgia Trend Highlights CUs' Growth, Stability

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DULUTH, Ga. (5/20/13)--Georgia credit unions' stability and growth in 2013 following a  five-year recession were highlighted in a feature article and sidebar in the May issue of Georgia Trend magazine.

"We have really weathered the storms well," Doug Foote, president/CEO of Georgia United CU in Duluth, Ga. told Georgia Trend. "It wasn't easy to do, but we came out the other end and still are as financially strong as we were going into it."

The credit union nearly quadrupled in size during the past 10 years--to $940 million in assets from $250 million, Foote added. Also, Georgia United saw an increase in new-auto loans of 15.4% in 2012 from 2011, and a 7.9% rise in used-vehicle loans during the same period.

"I'd say it's more the norm than an exceptional example," Mike Mercer, president/CEO of Georgia Credit Union Affiliates, told the publication. "People want to get safe with their money, and they view credit unions as safe. In the dot-com bubble and the real estate bubble eras, credit unions weren't looked at as all that cool. But when times get tough, people bring their money to credit unions, and a lot of this money is going into savings accounts." 

Mercer also mentioned efforts of the Credit Union National Association and credit unions nationwide to reduce the regulatory burden and to increase credit unions' ability to make business loans to members. 

U.S. Sen. Mark Udall's (D-Colo.) Small Business Lending Enhancement Act (S. 968), introduced in the Senate on Thursday, would increase the credit union member business lending cap to 27.5% of assets, from the current 12.25% (News Now May 17).

The Georgia Trend article also featured a sidebar interview with consumer advocate Clark Howard, who is a member of two credit unions. Because of the spread of technology in the modern financial world, Howard believes credit unions have a bright future.

"That's the leveler for them, the thing that really helps, because most credit unions are smaller than banks, but most all banking now is electronic," he explained. "It's the great equalizer."

The article also includes comments about growth and some of the attributes of credit unions from Jerry Johnson, president/CEO of Georgia Power Valdosta FCU in Valdosta, and Janet Davis, president/CEO of TIC (The Infantry Center) FCU in Columbus.

Study: CUs, Community Banks Overpay For Core Services

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PALO ALTO, Calif. (5/20/13)--Credit unions and community banks aren't doing themselves any favors in negotiating information technology (IT) service provider contracts, according to a survey of executives about their top business concerns and management priorities.

Instead, community financial institutions are overpaying for one of their largest categories of non-interest expense--outsourced core processing and IT services, said "Less Burn, More Return," a report by the Business Performance Innovation (BPI) Network and Paladin fs.

The top priorities for the next 12 months of the credit union and community bank executives surveyed include increasing the size of their loan portfolios and cutting non-interest expenses.

Other key findings:

  • The top business concern of credit unions and community banks are tight net interest margins, 79%; increased government regulation, 72%; sluggish economic growth, 54%; and greater competition from larger institutions, 33%.
  • The top management priorities for the next year include growing loan portfolios, 82%; reducing non-interest expense, 63%; management new regulatory requirements, 50%;  increasing net interest margins, 37%; and adding new technologies and bank processes, 34%.
  • Community financial institutions continue to add new customer-facing technologies and processes, with 90% saying they added new technologies and service in the past three years, and 74% planning to add more services in the next three years.
By restructuring their provider contracts using national pricing data, the executives can reduce costs by as much as 43%, the report said. Those surveyed with financial institutions from $500 million to $1 billion in assets saved an average of about $1 million over a five-year period when they restructured existing contracts based on national pricing data.

"The secret to restructuring a contract with an incumbent vendor is having the right pricing data in advance of negotiations, getting started well before the current contract expires, and negotiating a win-win agreement with the vendor," said Aaron Silva, president/CEO of Paladin fs, which worked with the BPI Network on the study.

"Many community banks and credit unions feel they are playing catch-up with larger institutions when it comes to technology-enabled services for customers. Mobile banking is an area of particular interest," said Silva, adding that contract restructuring can play a significant role. "By restructuring existing core processing and IT service costs, community financial institutions can effectively pay for these new service offerings."