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Fed Survey Half of U.S. banks tightening lending

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FARMERS BRANCH, Texas (6/2/08)--A Federal Reserve survey of senior loan officers released May 5 indicates that roughly 50% of banks nationwide are tightening their lending standards on commercial and industrial loans. This could result in opportunities for smaller lenders such as credit unions. The percentage is up from the 30% of banks that reported tightening in January (LoneStar Leaguer May 28). About 65% of banks--up from about 40% in the January Fed survey--indicated that they had increased spreads of commercial and industrial loan rates over their cost of funds for these items. Large banks were more likely to tighten, according to the survey. The pullback by the large banks could create opportunities for smaller and nontraditional lenders. However, some entrepreneurs are feeling uncertain about other types of funding sources, such as venture capital. More businesses--in excess of 5,000 firms--filed for bankruptcy in April 2008 than in any month since the new bankruptcy laws took effect in 2005, the survey indicated. The increase in filings shows that trouble in the subprime housing market and other financial instruments on Wall Street have affected small businesses. A combination of tighter credit, higher commodity prices, and stagnant sales probably account for the rise in bankruptcies, with builders and other businesses tied to the housing market accounting for many filings, the survey said.

State court Payday loans violate Pennsylvania law

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HARRISBURG, Pa. (6/2/08)--The Pennsylvania Supreme Court Thursday ruled that payday lenders who charged borrowers a $150 monthly fee plus 6% interest violated a state consumer law. The decision upheld a ruling last year by the Commonwealth Court, which asserted that Advance America Cash Advance Centers, a payday lender, charged fees that violated the state’s Consumer Discount Company Act (Associated Press May 30). Advance America charged a $149.95 “participation fee” and 5.98% interest on loans up to $500 (News Now Aug. 2). Jim McCormack, Pennsylvania Credit Union Association (PCUA) president/CEO, commended the banking department for taking action against payday lenders. PCUA offers the Credit Union Better Choice Program, “which is designed to move people away from payday lenders and provide a credit union with low-cost alternatives to short-term loans, while coaching them on financial education,” he added.

CUNA Tech Council looks at impact of global changes on CUs

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MADISON, Wis. (6/2/08)--Credit union professionals can learn how changes in global finance, media, and technology will impact credit union business, during a general session at the 2008 CUNA Technology Council Summit, July 30-Aug. 2 in Williamsburg, Va. During “Our Age of Transformation: What’s Next in Our High-Tech, Global 21st Century World?” Peter Leyden, author and former managing editor of Wired magazine, will discuss the interconnected changes taking place in technology, the economy, the media, and the restructuring of the new global order. He will explain how these developments, as well as demographical changes in the U.S., will force a political shift in the coming decade. Additional conference sessions will explore payment card industry compliance, security protection from social networks, mobile banking, information technology staff optimization, virtualization, and ATM capture and imaging. A panel discussion with seven core processors is scheduled for the conference’s final day. Each processor will cover its short- and long-term product and design plans, architecture, and answer questions from the audience. For more information, use the link.

CU Aid gives 123300 to those affected by Calif. wildfires

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RANCHO CUCAMONGA, Calif. (6/2/08)--About $123,300 in grants have been distributed to help credit union members affected by wildfires that hit Southern California last fall, the California Credit Union League said Friday. CU Aid is a centralized disaster relief fund-raising mechanism activated by the National Credit Union Foundation (NCUF) and the league during the fires. The grants were distributed throughout the San Diego area--which was one of the areas hid hardest by the fires. The grants--ranging from $500 to $10,00--were distributed to members of:
* Financial 21 Community CU, San Diego; * First Future CU, San Diego; * Great American CU, San Diego; * Ketema FCU, El Cajon; * Mission FCU, San Diego; * San Diego County CU; * San Diego Metropolitan CU; and * USE CU, San Diego.
Some of the checks were presented by NCUF Immediate Past Chairman Mary Cunningham, CEO, USA FCU, San Diego. “CU Aid grant recipients are realizing they are part of a larger credit union community,” Cunningham said. “They will be loyal credit union members for life.” Most of the recipients lost their homes, and said they are planning to use the money to rebuild. Most of the available funds raised for wildfires victims have now been distributed; some were recently reallocated--with the support of contributor--to help those impacted by the tornadoes that hit Alabama in February. This allowed the NCUF to make 17 more grants totaling over $87,000 for credit union employees and members who lost their homes. The CU Aid donation form has been restructured to ensure that relief money can be channeled efficiently to any major disaster area that impacts credit unions. Supporters can donate via www.cuaid.coop/california in California or www.cuaid.coop/nevada in Nevada. All donations are directed to the National Credit Union Foundation Disaster Relief Fund, which dedicates every dollar to grants. For donors outside of California and Nevada, use the link.

Counterfeit checks with CUs name circulating

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NEW YORK (6/2/08)--Municipal CU, New York City, has contacted the Federal Deposit Insurance Corp. (FDIC) to report that counterfeit checks bearing the credit union’s name are in circulation. The counterfeit checks display the routing number 044000804, which is assigned to JP Morgan Chase Bank in Columbus, Ohio. Municipal CU official checks are issued by Integrated Payment Systems Inc. through an account at JP Morgan Chase Bank. The counterfeit items are similar to authentic checks--but the counterfeit checks are a solid green color instead of a two-tone green. Authentic checks have a telephone number printed on the back. Counterfeit checks do not. Information regarding the counterfeit checks should be sent to Michael Rosano, senior manager, security and fraud department, Municipal CU.

SECUs Scam Jam targets elder abuse

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RALEIGH, N.C. (6/2/08)--A recent Scam Jam event focusing on protecting senior adults from abuse and identity theft was held May 3 by State Employees’ CU (SECU) in Raleigh. “Senior adults are the primary target for so many of today’s scams, including identity theft,” said Karen Daeke, vice president of SECU’s security administration department. “The credit union is aggressively working to educate our members about the various scams and fraudulent practices so they will be better prepared to recognize and avoid such activity.” The event provided workshops, information booths and shredding services. It was promoted to SECU’s Golden Circle members who are located within a one-hour driving distance of the event. SECU has partnered with the attorney general’s office to host other educational presentations related to senior scams, elder abuse and identity theft. SECU also trains its employees on scams and elder abuse. “Knowledge is key in protecting yourself from savvy fraudsters who are more prevalent than ever before,” Daeke said. “Some of our members have fallen victim to various fraudulent practices and the credit union is committed to helping members get the information they need to protect themselves now and in the future.”

Louisianas CUs holding steady with slow growth

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HARAHAN, La. (6/2/08)--In the wake of sustaining 5.7% loan growth in 2007, Louisiana credit unions are experiencing the sluggish loan growth that economists had forecast, with only 0.4% loan growth for the first quarter of 2008. The figures are provided by the National Credit Union Administration. Credit union members are likely to be more cautious about the kind of debt they assume, according to the Louisiana Credit Union League’s Research and Information Department, as indicated by the following state credit union statistics:
* Unsecured credit card loans decreased by -2.5%; * Other unsecured loans an line of credit decreased by -3.2%; * New car loans decreased by -1.7%; * Used car loans increased by 2.4%; and * First mortgage real estate loans increased by 3.8%.
“We recognize that credit union members are traditionally cautious consumers,” Jennifer Green, league assistant vice president, told News Now. “These Louisiana statistics bear out that fact. Members across the state appear to be prudently planning for what lies ahead, and they continue to trust in the strength of their credit unions to provide the resources they need to manage in tough times.” Total shares and deposits increased 4.7% to $6.03 billion from $5.76 billion. This indicates that credit unions are providing competitive savings rates for their members, but credit unions be careful continue to monitor the cost of funds to make sure that shares are priced to avoid uncontrolled share growth, the league’s research and information department said. Membership also showed slow but steady growth with an increase of 0.9% to 1,126,012 from December 2007 through March 2008, the league said. The number of branches also increased to 426 from 419. And 23 credit unions reported plans to add new branches or expand existing facilities in the next 12 months. There was nearly a 5% increase in average salary and benefits for full-time credit union employees to $45,782 in March 2008 from $43,834 in March 2007.

CUs on the Tube North Carolina CUs hike the hill

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GREENSBORO, N.C. (6/2/08)--Representatives of the Piedmont, Northwest, Foothills and Western Chapters of the North Carolina Credit Union League met with legislators in Raleigh during a Hike the Hill event Wednesday. The visits are a part of the State Capital Connections program, and followed visits made one week earlier with members of the Tarheel, North Piedmont, Northwest and Southeast Chapters and the North Carolina General Assembly (Weekly Update May 30). During the meetings, credit union representatives highlighted a study by Dr. William Jackson, which indicated that credit unions saved their members $529 million in one year. The study was based on 2006 data. The league also conducted a video interview with Rep. Trudi Walend (R-Transylvania) during the hill visit (use the link).

State Capital Connections from Jeff Hardin on Vimeo.

CU System briefs (05/30/2008)

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* TEMPE, Ariz. (6/2/08)--Margaret Hunnicutt has been named CEO of Tempe Schools CU. She has served as interim CEO for the last two months, and currently serves as chief financial officer and senior vice president of Tempe Schools CU. Hunnicutt has been with Tempe Schools CU for seven years, is a certified personal accountant, and has more than 30 years in experience in the financial services industry. Hunnicutt also was a finalist for the Tempe Chamber of Commerce’s Business Woman of the Year award in 2007. She brought the Volunteer Income Tax Assistance program to the credit union in 2004. (Photo provided by Tempe Schools CU)... * INDIANAPOLIS (6/2/08)--FORUM CU, Indianapolis, was named one of
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the best places to work in the state by the Indiana Chamber of Commerce. The program honors top companies in the state, as determined through employer reports and employee surveys. FORUM was the only credit union named to the list and among a select few financial services companies honored, according to the credit union. Pictured (from left) are Jennifer Elkin, Indiana Chamber of Commerce representative; FORUM CU representatives Anne Wiseman, Gary Irvin, Jenny Budreau, Andy Janning, and Indiana chamber representative Mark Lawrence. (Photo provided by FORUM CU) ... * HARRISBURG, Pa. (6/2/08)--The Pennsylvania Credit Union Association and the Michigan Credit Union League are wagering a bet on the outcome of the Stanley Cup Championship (Life is a Highway May 30). The leagues bet on their respective teams, the Pittsburgh Penguins and the Detroit Red Wings. A payoff from a bet for the playoff between the Philadelphia Flyers and the Penguins resulted in a $500 donation to Sewickly Valley Hospital. Paul Fero, CEO, PA Healthcare CU, Sewickley, presented the check ... * HARRISBURG, Pa. (6/2/08)--A member who requested a new credit union branch of American Heritage FCU, Philadelphia, got her wish (Life is a Highway May 30). The credit union, which serves members who work in the Social Security Administration Building, celebrated the grand opening May 21. The branch was requested by Beverly Wilmer, who wanted a new branch when an out-of-state credit union terminated full-time service at the Social Security Administration Building. The branch features an Internet cafe and free coin counting machine. A surcharge-free ATM also is available ...

CUs need to say Hey Were the good guys

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MADISON, Wis. (6/2/08)--Television commentator and retail financial services expert Ron Galloway, director of a controversial documentary about Wal-Mart, believes credit unions are the only financial institutions that consumers can trust. But as National Credit Union Foundation (NCUF) Executive Director Steve Delfin explains in his “Viewpoint” column in the June issue of Credit Union Magazine, credit unions need to tell their story. “I met and heard Galloway speak at the Credit Union Association of Colorado and Wyoming’s Annual Meeting,” Delfin said. “While not optimistic about America’s economy, he now emphatically asks, ‘Why aren’t credit unions telling their story? In case you guys haven’t noticed, banks aren’t particularly keen on credit unions. They’re trying to eat your lunch on Capitol Hill.’” As Galloway tells credit unions with his Georgia vernacular, “Y’all need to get loud! You need to say, ‘Hey! We’re the good guys!’” “He’s right,” Delfin said. “We need to tell our stories about the value of credit unions, about the help we provide, about outreach to emerging underserved populations, and about how credit unions are the only financial institutions that consumers can trust.” NCUF is offering credit unions the opportunity to tell their stories in the Social Impact and Community Outreach Special Supplement in Credit Union Magazine. The supplement will be featured in NCUF’s Annual Report to be published in the October issue of Credit Union Magazine. To reserve a spot in the supplement, credit unions and their supporters can use the resource link or call Delfin at 800-356-9655, ext. 6769. “Credit unions truly are standard bearers of social responsibility in the financial services industry,” Delfin concludes. “Credit unions are where the institutional values and principles of the cooperative business model have so clearly and emphatically resulted in socially responsible, ethical, pro-consumer behavior. Credit unions are consumers’ champions. We’re helping the people who need it most. We need to get louder.”

Arizona payday lending struggle could head to ballot box

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PHOENIX (6/2/08)--Two initiatives aimed at payday lending in Arizona could be headed for the ballot box this fall. Arizonans for Financial Reform, which received $2 million from the payday lending industry, is seeking to scrap a state law provision that would eliminate payday lending in Arizona in 2010 (Arizona Daily Republic May 24). If the initiative is approved, payday lenders would remain in Arizona and charge fewer fees. Borrowers would save $2.65 per $100 borrowed, the newspaper said. Another initiative, which was started by Rep. Marian McClure (D-Ariz.), would eliminate payday lending in Arizona entirely. McClure told the Republic that payday lenders prey on low-income individuals who need short-term loans, and payday lending storefronts tempt borrowers in need. About $150,000 signatures must be collected for each initiative by July 3 for a spot on the Nov. 4 ballot. The Arizona Credit Union System advocates financial education and REAL Solutions, Pat Bodnar, league vice president of public affairs, told News Now. REAL Solutions is a product of the National Credit Union Foundation and seeks to help low-wealth consumers accumulate assets. Some Arizona credit unions provide short-term loans, Bodnar added.