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CUs participate in new mortgage loan coalition

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WASHINGTON (6/11/09)--Credit union organizations are among 21 organizations that have formed a Ford Foundation-supported coalition group that will certify lenders as "safe," "fair," and free of predatory lending to help restore consumer confidence in mortgage lenders. The nonprofit Fair Mortgage Collaborative (FMC) will certify that lenders meet five core standards of conduct. Certified lending organizations include Boeing Employees CU (BECU), Tukwila, Wash.; Prime Alliance Solutions; Federation of Appalachian Housing Enterprises Inc.; Mortgage Grader; and Clearinghouse CDFI (community development financial institution). They will offer the new FMC-certified "fair and safe" mortgages across the U.S. "Mortgage lending practices that have taken place over the past several years have eroded consumer confidence in mortgage lenders," said Joseph Brancucci, executive vice president at BECU. "For BECU and Prime Alliance Solutions, we strive to make as many members as possible homeowners; however, it is equally important that it's with a mortgage that meets their needs and allows them to stay in their home. We fully support the rigorous certification process that is required to participate in the Fair Mortgage Collaborative," he added. Other credit-union-related organizations in the coalition include Center for Responsible Lending, National Federation of Community Development Credit Unions, and Self-Help CU based in Durham, N.C. The five core standards are:
* FMC lender works for customer, not other way around; * No steering; * Absolutely no predatory loans; * Non-standard loans require clear and compensating customer benefit; and * FMC keeps rules and standards current for new loan types.

Editorial notes CUs creative fin ed efforts

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HARRISBURG, Pa. (6/11/09)--Credit unions’ creative efforts working with students to save and invest their earnings was the focus of a recent Harrisburg, Pa., Patriot News editorial. “Tough times can make for timely lessons,” was published Tuesday by the newspaper. The editorial discussed some of the things financial institutions have done in the economy to help youth understand and manage their finances, according to the Pennsylvania Credit Union Association (Life is a Highway June 10). Credit unions have “renewed their efforts to explain to students how people make, save and invest their earnings,” the Patriot News said. Some student-run credit unions also have been established across the state that double as learning labs, the newspaper added. “Here’s to the tellers turned teachers now entering the classroom to help our kids build better futures for themselves,” the newspaper said.

Filene addresses how CUs can better serve young adults

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MADISON, Wis. (6/11/09)--The millennial generation is one of the most discussed--yet least understood--generations in America, according to the Filene Research Institute. Members of this generation have little knowledge about finances--and need the basics of saving, credit management and budgeting, Filene said. In Filene’s CU Tomorrow brief, Anya Kamenetz, a staff writer at the magazine, Fast Company, examines the millennial generation. Characteristics of millennials include:
* Unprecedented levels of student and consumer debt; * Stagnating or declining income compared with their parents’ generation; and * Lack of health insurance, access to pension and other benefits.
Credit unions looking to help millennials should offer them low-cost credit products; education; simple and relevant financial tools; and teach them how to use credit responsibly, Filene said. To read the CU Tomorrow brief, use the link.

NASCUS adds UBIT mortgage lending to Summit topics

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ARLINGTON, Va. (6/11/09)--The National Credit Union State Credit Union Supervisors (NASCUS) recently added sessions on critical accounting issues for credit unions and mortgage lending environment strategies to its annual State System Summit. The event will be Aug. 20-22 in Boston. During the session entitled Credit Union Taxation Update--Life After Community First, Kevin Fincher of Clifton Gunderson will update attendees on the unrelated business income tax (UBIT) in light of a recent jury's decision in favor of Community First CU, which challenged the government's UBIT policy. Fincher will cover what to do now to protect any potential UBIT refund. Fincher also will update attendees on the need-to-known potential tax pitfalls of employee fringe benefits and other products. And Crowe Horwath's Sydney Garmong and Mark Taylor will lead a session on essential credit union accounting and reporting issues. The summit also will feature a half-day symposium Aug. 21 on Meeting Today's Mortgage Lending Challenges. Tracy Ashfield, president/CEO of Strategic Mortgage Solutions, will discuss strategies for successful mortgage operations in the current economic environment. Richard Hagar, mortgage fraud expert, will address how credit unions can help themselves and their members avoid becoming victims of increasing financial crimes. Also, the Conference of State Bank Supervisors will present operational components of putting the S.A.F.E. Act (Secure and Fair Enforcement for Mortgage Licensing Act of 2008) to work at the credit union. The event is for credit union CEOs, chief financial officers, boards, lending staff and other leaders.

CU System briefs (06/10/2009)

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* MANISTIQUE, Mich. (6/11/09)--A preliminary hearing was held Monday and Tuesday in Schoolcraft (Mich.) County District Court for Jason Collins, 31, of Manistique, who faces 13 counts of larceny by conversion after allegedly converting several victims' investment funds to personal use. He was arrested in April on six counts of converting more than $20,000, two counts of converting more than $1,000, and five counts of using a computer to commit larceny by conversion. Six individuals, including two managers at the $18.6 million asset Manistique FCU, testified they invested personal funds with Collins. They found out in August 2006 the funds had suffered "catastrophic losses"(Daily Press June 9) … * GREENSBORO, N.C. (6/11/09)--The North Carolina Credit Union League has contracted Jeanne Couchois to staff its new Compliance Specialist Program. An attorney and longtime compliance expert, Couchois will work with credit unions on a contractual basis to help them meet specific and ongoing compliance needs, said the league. While Couchois will work with the league, she will in effect work for individual credit union participants in the program, said Kimberly Bohannon, league vice president of compliance and risk management. Couchois previously worked with the State Employees' CU as an accountant and more recently as vice president of compliance until 2006 … * FENTON, Mo. (6/11/09)--Alliance CU is partnering with Homes for Our Troops, a nonprofit group that helps build specially adapted homes for soldiers severely wounded in war ( June 2). Alliance has already met its goal of raising $5,000, but will continue to raise money through Nov. 11, Veterans Day. Alliance hopes to raise another $5,000 in donations. If that amount is achieved, members will have donated a total of $10,000, which will be matched by Alliance. Alliance CU, Fenton, Mo., has $150 million in assets ... * PHOENIX (6/11/09)--Desert Schools FCU, Phoenix, raised $18,000 for Phoenix Children’s Hospital during its annual Children’s Miracle Network BBQ and talent show. During the event, the credit union offered lunch and a video game and karaoke contest. Ron Amstutz, Desert Schools senior vice president, said the annual event keeps improving, even during tough economic times. “Raising money for Phoenix Children’s Hospital is something we’re extremely passionate about,” he said. Last year, Desert Schools gave $362,000 to the hospital, and a golf tournament held in March raised $230,000. Desert Schools FCU has $3.3 billion in assets ... * BREWER, Maine (6/11/09)--Maine food pantries statewide each received a loaf of white bread and a check for $500 as part of the Maine Credit Union League’s fifth annual Share the Bread event and a broader state Campaign for Ending Hunger. Credit unions contributed $17,000 to end hunger in Maine, Jon Paradise, league governmental and public affairs manager, said Monday. Funds were distributed to 33 nonprofit food banks, with checks presented to two pantries from each county in Maine. The league also presented $1,000 to the Good Shepherd Food-Bank, which has its distribution center in Brewer, and supplies food to 600 food pantries statewide (Bangor Daily News June 9) … * BATTLE CREEK, Mich. (6/11/09)--OMNI Community CU announced its youth members saved more than $200,000 in April. All account holders at the $210.8 million asset, Battle Creek, Mich.-based credit union were encouraged to develop their savings habits--by being made eligible to win prizes, based on deposits made at the credit union. Participants age 12 and under were entered to win a portable digital video disc player. Participants between the ages of 13 and 17 were entered to win an iPod Nano. “At OMNI, we believe it’s important to teach kids about the importance of saving at an early age, and [we] are happy to reward those who follow this message, said Ted Parsons, OMNI CEO ( June 3) …

Stanford Star One CU ink student loan deal

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STANFORD, Calif. (6/11/09)--Stanford University Graduate School of Business announced the start of a new private loan program through Star One CU to provide financial assistance to students admitted to the school’s Master of Business Administration, doctorate, and Sloan master’s programs. The custom loans cover tuition and living expenses, and will be available to those without a U.S. co-signer--which will benefit international students. “The crisis in the global financial sector had threatened our ability to provide equal access to needed assistance among all our students, who hold passports from more than 50 countries,” said Jack Edwards, director of financial aid at Stanford Business School. “By securing this loan program with Star One CU, we … offer loans to international students under similarly favorable terms and competitive rates as those available to domestic students.” Star One, based in Sunnyvale, Calif., developed the custom loan program for the school’s international graduate students with Credit Union Student Choice, a credit-union-owned organization serving certified academic institutions, and that offers customized student lending solutions to client credit unions nationwide. The loan program offers a line-of-credit structure, competitive interest rates and no origination fees. “As a not-for-profit credit union, we have a unique business model that makes us perfectly suited to meet the private loan needs of international students at Stanford's Graduate School of Business,” said Rick Heldebrant, Star One president/CEO. “We are a local cooperative with a keen focus on the communities we serve.” Star One CU has $4.122 billion in assets.

CASE CU awarded 1 million in CMOs case

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DETROIT (6/11/09)--CASE CU, based in Lansing, Mich., was awarded an arbitration award totaling more than $1 million in a case that alleged Prudential Equity Group misrepresented and omitted facts related to two mortgage-related types of investments. Prudential Equity Group was known as Prudential Securities before it merged with Wachovia Securities LLC. The investments were collateralized mortgage obligations (CMOs) and CMO Interest-Only strips (I/Os). A panel of three Detroit-area arbitrators from the Financial Industry Regulatory Authority, formerly the National Association of Securities Dealers, rendered the award, which included $900,000 in compensatory damages, $78,443 in interest and costs, and another $50,000 in legal fees. The case centered around Prudential's Credit Union Strategy Group, headed by Mark Wickard, a registered representative of Prudential and Wachovia (PRNewswire June 9). The $171.8 million asset credit union alleged that the complicated CMOs and I/Os, which are sensitive to interest-rate changes, were represented as safe and suitable, when in fact they were not. CASE suffered unexpected losses. Announcement of the decision was made by Shepherd, Smith, Edwards & Kantas LLP, a national firm specializing in litigation and arbitration of cases involving securities fraud and brokerage firm misconduct.

Daily used-vehicle value changes hit record

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LAUREL, Md. (6/11/09)--Credit unions will see some dramatic changes in the prices of the used vehicles they finance and a tighter used-auto market. The number of used vehicles whose value changed on Monday totaled 10,036--a single-day record and double the previous high, according to Black Book, which monitors vehicle-pricing data. Of that total, 9,476 used vehicles increased in value, while only 560 declined. The average dollar increase was $253 and the average decrease was $102. "We have been updating our used-vehicle values on a daily basis for a little over a year now, and we have never seen the volume of changes in a single day that we saw on Monday," said Ricky Beggs, Black Book's vice president and managing editor. He noted the 10,036 changes made by editors is "roughly double the previous high." Most of the changes were in the "extra-clean" and "clean" categories. That "reinforces the idea that really nice, low-mileage used vehicles have become fairly scarce due to the drop off in new-vehicle sales, and that dealers are willing to pay more for them," Beggs said. Last year the Laurel, Md.-based publisher "saw selected vehicles dropping over a thousand dollars a day, and many of those same vehicles have been rising steadily since the first of the year," said Black Book President Tom Cross. He noted that dealers need to keep their lots stocked with inventory and know what a vehicle is worth on any given day if they hope to be successful.

Guaranteed CIF CD attracts 10 million in two weeks

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WASHINGTON (6/11/09)--Less than 14 business days after the National Credit Union Foundation (NCUF) announced the availability of federally guaranteed certificates of deposit (CDs), credit unions have placed $10.2 million into the new offerings as part of the Community Investment Fund (CIF). Forty-two credit unions have more than tripled their dividends by converting from CIF share accounts to CDs. By taking this action, these credit unions have also secured a full federal guarantee for two years. The National Credit Union Administration (NCUA) guarantees all principal and quarterly fixed-rate dividend payments on two-year CIF CDs (News Now May 22). In addition, nine more credit unions have become first-time CIF investors. Some are extending their CIF CD terms as long as three years. "The $10.2 million definitely surpasses our projection for the first two weeks," said NCUF Deputy Director Steve Bosack. "Our ultimate goal is for the new CD to attract $30 million by Sept. 30," he told News Now. CIF allows members of corporate credit unions to earn dividends while donating to credit union charitable organizations--without creating an expense on donors’ balance sheets. New deposits in CIF help reduce credit unions’ expenses for NCUA’s Corporate Stabilization Program. When asked what natural person credit unions can do to support Corporate Stabilization, NCUA officials explained, “The more credit union funds placed in the corporate credit union system, the less reliance on external borrowings…. The less reliance on external borrowings, the less likely the potential need to sell securities at distressed prices.” “We encourage all credit unions with liquidity-- non-CIF investors as well as current CIF investors-- to place funds now in a CIF CD,” said NCUF Executive Director Steve Delfin. “CIF deposits earn dividends that fund credit union foundation programs and grants across America. For credit unions and members who need help to survive the current financial crisis, these charitable programs and grants have never been more critical.” Half of CIF dividends are donated to the foundation. It dedicates half of those donations to fund national programs including REAL Solutions, Credit Union Development Education, Innovation Grants, Biz Kid$, and NCUF grants the other half of CIF donations to each investor’s state credit union foundation or league. State credit union organizations use their CIF grants for a variety of charitable activities: financial education, training, credit union membership outreach, small credit union development, affordable housing, and disaster relief. Credit unions interested in the latest rates or CIF investment options can contact NCUF, their state credit union foundation or league, or corporate credit union.

Thirty graduate in CUDEs first class of 2009

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DELAVAN, Wis. (6/11/09)--Thirty more credit union professionals--new hires and veterans--are credit union advocates after graduating from Spring 2009 Credit Union Development Education (DE) Training in Delavan, Wis. During the week-long program, participants were involved in group exercises, encouraged to ask questions of visiting lecturers and required to complete team projects, proposing solutions for credit unions to help alleviate or eliminate challenging situations in a given area. The team projects required students to:
* Establish credit unions in the rebuilding of Iraq; * Decide whether to merge a small credit union with a large credit union; * Develop a plan to serve a low-income community; * Decide whether to convert a credit union to a mutual bank; and * Determine how credit unions can rebuild the community after the fallout of the sub-prime lending crisis.
Click to view larger image The Spring 2009 graduating class of Credit Union Development Educators included 30 representatives from the U.S., Caribbean, Kenya, Philippines and United Kingdom. (Photo provided by the National Credit Union Foundation)
“Throughout 2009, DE training will incorporate emerging economic discussions while continuing to provide critical lessons in cooperative principles and credit union philosophy,” said DE Training Facilitator Tom Decker. Decker is director of social impact management for National Credit Union Foundation (NCUF). “We plan to show this year’s trainees how the member-centric business model will enable credit unions to weather the economic storm better than most for-profit institutions.” This year’s second scheduled DE training classes will take place Aug. 12-18 at IslandWood located on Bainbridge Island, Wash. IslandWood uses the environment as a classroom. DE training is open to everyone from new employees who need a credit union orientation to seasoned executives who need to recharge. By attending DE training:
* Graduates acquire skills in credit union outreach initiatives, problem solving, technical assistance, team building and public presentations. * Graduates earn certification as Credit Union Development Educators (CUDEs). They join a networking group including more than 800 graduates worldwide. * CUDEs realize that local issues are global and that credit unions grow stronger by working cooperatively. * CUDEs return to their jobs with an understanding of how to promote cooperative principles and credit union values as advantages in today’s competitive financial services marketplace.
Scholarships are available through NCUF’s DE Fund and through several state credit union foundations and leagues. “We realize that the economy is tough, so we are doing everything we can to make it easy as possible for credit unions to send representatives to DE training,” Decker said. For more information and a list of the graduates, use the resource links. NCUF is the primary sponsor of the program. Support is provided by CUNA Mutual Group, the Credit Union National Association, the World Council of Credit Unions, state foundations and leagues.

New book captures 100 years of CU history

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MADISON, Wis. (6/11/09)--Credit union members and staff can learn more about the 100-year history of the credit union movement in the
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U.S. with a new hardcover coffee-table book from the Credit Union National Association. “For the People for 100 Years” begins with the formation of the first U.S. credit union, now known as St. Mary’s Bank, in Manchester, N.H. The book’s chapters, organized by decade and filled with historical photographs, chronicle major events and legislative victories in the credit union timeline from 1908 to today. Each chapter concludes with a summary of key events in the decade to put the credit union story in perspective with major milestones in U.S. history. Attendees of the 2009 America’s Credit Union Conference and Expo, June 21-24 in Boston, will receive a complimentary copy of the book. For more information, use the link.