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CU System Briefs (06/11/2013)

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ST. PAUL, Minn. (6/11/13)--Lee Benedict, president/CEO Soo Line CU, Savage, Minn., has been designated a Credit Union Builder by the Minnesota Credit Union Foundation. Benedict retired after 45 years of credit union service, 33 as a CEO. He oversaw three mergers, obtained two community charters, and maintained a dual presence in the Twin Cities metro area and in greater Minnesota.

ABC Consumer News: CUs Offer Better Rates, Flexibility

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NEW YORK (6/11/13)--For consumers who are fed up with banks, credit unions can be a great alternative because they offer better interest rates on financial products and greater flexibility in providing loans by listening to members and looking beyond just their credit scores, said a consumer correspondent Monday on ABCNews.com.

"It's no secret that banks got a bad rap during the financial crisis for their part in risky mortgage lending and for fees that many consumers view as unnecessarily greedy," wrote consumer guru Elisabeth Leamy. "Perhaps that's why last year, credit union membership grew by two million people and credit union deposits topped $1 trillion for the first time ever, according to the Credit Union National Association."

Credit unions are in essence "nonprofit banks" and today everyone is able to join a credit union, which many people don't realize, Leamy said. Her story included a link to aSmarterChoice.org, the website that CUNA and the leagues launched to help consumers learn the basics about credit unions and find one they're eligible to join.

The high visibility of a story about credit union benefits on ABC News.com will help make more people aware of credit unions, a key goal of CUNA and the leagues' Unite for Good campaign. By Monday afternoon, more than 2,600 visitors had searched for a credit union on aSmarterChoice.org, about four times what the site typically experiences on a Monday.

Unite for Good is CUNA's campaign to rally credit unions toward the strategic vision in which "Americans choose credit unions as their best financial partner."  The campaign's goals are: remove barriers, create awareness and foster service excellence.

In her column, Leamy addressed why people should join a credit union. "Since credit unions are non-profit, they can often afford to offer their members lower interest rates on loans," Leamy said. "They are also more flexible in listening to members' stories rather than just looking at their credit scores."

Leamy added that she researched interest rates for a $25,000 car loans and found banks were charging as much as 11.22% interest on a loan. She found that the lowest rate a credit union was charging for that amount was 4.25%. That lower rate would save consumers $2,000 interest over the course of the loan, compared with the higher bank rate, she added.  

"Consumers have told us they want banking services delivered in a caring, low-fee environment," Shawn Gilfedder, president of McGraw-Hill FCU in East Windsor, N.J., told  Leamy in the article. "Credit unions across the nation help their customers achieve financial wellness ... through a caring, needs-based approach."

Appeals Court Rules Against CUs On Taxi Medallions

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NEW YORK (6/11/13)--The New York State Court of Appeals has overturned a lower court ruling that had blocked a state law that would have allowed the sale of more New York City yellow taxi medallions. That ruling had supported a claim by credit union lenders that the state violated the "home rule" provision of the State Constitution, and the court of appeals decision is a blow to the credit union side.

The six-judge panel of the Court of Appeals, in a unanimous decision last week, rejected arguments by the taxi groups, including credit unions, that the Street Hail Livery Law, or Hail Act, was invalid because it came in the form of a law adopted by the state legislature instead of the city council (Reuters June 6).

"It has not been demonstrated that the act 'repealed, diminished, impaired or suspended' any power in 'a statute of local governments,'" the court stated in its ruling.

New York City challenged a previous ruling by New York Supreme Court Justice Arthur F. Engoron that New York City taxi service is not a matter of substantial state interest or concern and "a law that shifts power from the city's legislative branch to its executive branch, and micro-manages the exercise of that power, fails to bear a reasonable relationship to any such interest or concern."

Taxicab Service Association (TSA)--an association of credit union lenders that finance the yellow taxi medallion purchases in New York--had asked the court to invalidate the Hail Act, which was passed in 2011 to shore up an insufficient supply of taxis in the city and its outer boroughs (News Now Aug. 22, 2012). The Hail Act allowed up to 18,000 new taxi licenses in the city and its outer boroughs, according to court documents.

"As lenders, credit unions were concerned that the influx of medallions would have a negative impact of the current value of medallions that are out there and outstanding,"  Michael A. Lanotte, Credit Union Association of New York senior vice president of association services and general counsel, told News Now Monday.

Taxi medallions are symbols that are usually attached to the hood of New York City cabs. The medallions are licenses that are regulated by the city and allow drivers to pick up curb-side passengers who hail a cab.

Last Chance To Register For Fall Dev. Educator Training

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MADISON, Wis. (6/11/13)--Only a few spots remain for the Fall 2013 Credit Union Development Education (DE) training class taking place Sept. 4-11 in Madison, Wis.

Attendees of the National Credit Union Foundation's six-day total immersion experience will learn about credit unions' social responsibility and domestic and international development through interactive education and professional networking.

"Registration for the training is limited to just 42 attendees, so this is the last chance for a few credit union professionals who would like to attend training this year," said Lois Kitsch, NCUF's national program director. "You won't want to miss it as DE Training is one of the most unique and transformative credit union training events offered."

DE training is open to everyone from new employees who need a credit union orientation, to seasoned executives who need to recharge. Participants cite many benefits of 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 1,000 graduates nationwide and more than 30 other countries.
  • CUDEs realize that local issues are indeed global--and that global issues are local.
  • CUDEs understand that credit unions grow stronger by working cooperatively.
CUDEs return to their jobs with a new understanding of how to promote cooperative principles and credit union values as distinct advantages in today's competitive financial services marketplace.

The training will take place Sept. 4-11 at The Lowell Center on the University of Wisconsin campus in Madison, Wis. The registration fee includes seven nights of single-room lodging, and all training materials and meals.

"For those looking for help with funding, many state credit union foundations and leagues offer scholarships to DE training in addition to the national DE Scholarship offered," Kitsch said.

For more information, use the link.

Fiserv Paper Discusses ROI of Mobile Banking

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BROOKFIELD, Wis. (6/11/13)--Mobile banking users were found to have deeper, more cost-efficient relationships with their financial institutions than users who had yet to use the mobile channel, according to a new white paper from Fiserv.

The paper, "Next Generation Mobile Banking: Transactions Increase Potential ROI," shows how credit unions and banks can step up their efforts to achieve sustained return on investment from mobile banking.

Among the value that mobile banking users offer financial institutions:

  •  Member retention--Mobile banking members have deeper relationships with their financial institutions and have been proven to be among the least likely to leave the credit union or bank. This increased member/customer stickiness can result in measurable recurring revenue for financial institutions.
  • Reduced channel costs--Mobile banking enables the migration of members/customers from high-cost offline channels, such as the call center and branch, to the lower-cost, higher-convenience mobile channel. To project savings, financial institutions must first know the average transaction costs of each banking channel and determine how the expense will be offset by diversion to the mobile channel.
  • Transaction generation--Mobile banking use encourages value-generating activities such as debit card usage. In a TowerGroup/SunTrust study, mobile banking users demonstrated the propensity to make more debit card transactions per month, likely because they were better able to validate their account balances from mobile devices when making purchases at the point of sale.

Three Miss. CUs Partner To Focus On Community

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MERIDIAN, Miss. (6/11/13)--Despite the fact they are direct competitors, three Meridian, Miss., credit unions have chosen to define success--not based on individual achievement, but rather on how their cooperation can benefit their community, according to the Mississippi Credit Union Association.   

Last year, 1st Mississippi Federal CU, Meridian Mutual FCU and MUNA FCU initiated, organized and launched The Golden Apple Program, which recognizes area teachers for "going above and beyond the standard teaching methods." 

The idea for the program came from MUNA President/CEO Bo Pittman, who was aware of a similar program in Alabama. Pittman, married to a teacher for 30 years, thought developing a recognition program for Meridian area teachers was a worthwhile project. 

"Seeing the additional time and effort my wife Terisa has put into her classrooms over the years really highlights the heart so many teachers put into this job," Pittman explained. "They rarely get any recognition for these above-and-beyond extra efforts so when we learned about the Golden Apple Program, it was really a simple decision to try to get it started in Meridian."

However, instead of keeping the idea to himself and his own credit union, Pittman knew the program could be better and the outreach larger if other area credit unions were invited to support the program as well. 

"At MUNA, we feel that all of the Meridian credit unions complement, instead of compete, with each other so the Golden Apple program works well for all," said Pittman.

The group reached out to other local businesses for support. The Meridian Family of Stations, which includes the local Fox, NBC, and CBS affiliates, and The Meridian Star newspaper partnered to donate all of the advertising, as well as manage the overall program. This allowed the credit unions to become the key sponsor. Other local businesses became sponsors which provided the needed funding.

The program recognizes one teacher a month during the school year. Nominations come from parents or students. Winner recognition includes a cash prize donated by the three credit unions, media coverage of their award from the program's media partners, and other prizes, such as a school supply shopping spree, which are donated by other program partners. 

The program is an opportunity to highlight a unique characteristic of credit unions, which is their willingness to work together for the mutual benefit of all, Meridian Mutual FCU's President/CEO Dennis Florreich noted.

"The cooperation our credit unions are showing is something other financial industry competitors would probably never consider," said Florreich.

In The Media: Credit Union Growth, Lobbying Efforts, Community Outreach

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MADISON, Wis. (6/11/13)--As credit unions Unite for Good to help American consumers understand the value of credit unions, the Credit Union National Association continues to help credit unions attract media coverage nationwide.

Credit unions are bustling with news, Paul Gentile, CUNA executive vice president for strategic communications and engagement, wrote in an opinion editorial article, "Don't Look Now, But Credit Unions Have Gone Mainstream. Are We Ready?"  It appeared Monday on CUinsight.com.

"From intriguing stats and regulatory developments, to extraordinary advocacy campaigns and new technology, there is no shortage of important story lines. One storyline that overshadows them all is the very real opportunity for the credit union system to experience significant growth," Gentile wrote.

He said credit unions are living up to the storyline of being the white hats that do good things and deliver a great product, but must continue to advance to capitalize on the opportunities. (Use the resource link to read the entire article.)

Among other  recent media spots credit unions have captured:

  • Ryan Donovan, CUNA senior vice president legislative affairs, described how credit unions are fighting to preserve their tax exemption in the June 6 edition of the The Hill. CUNA is launching a grassroots campaign, Don't Tax My Credit Union!, imploring credit union members to tell Congress not to tinker with the industry's exemption.
  • On May 30 RStreet.com highlighted CUNA's Don't Tax My Credit Union! campaign, describing how credit unions are lobbying their 96 million members nationwide to fight lobbying efforts by banks.  Credit union members enjoyed $6 billion of benefits in 2012, while the moderating impact of credit union competition benefited bank customers by roughly $2 billion, according to CUNA. For every $1 in new credit union taxes, the government wipes out $10 in credit union benefits.
  • CUNA was among the national trade groups that plan to send representatives to a cross-industry meeting hosted by the National Retail Federation to discuss patent reform, The Hill reported June 6. Once considered a pet issue for tech firms, changing patent laws has become a priority for financial service providers, retailers, restaurant owners, hoteliers and others who are concerned about the spread of frivolous patent lawsuits.
  • CUNA concerns over the Consumer Financial Protection Bureau's proposed changes to mortgage servicing rules, were the topic of a June 6 BankCreditNews.com article. The CFPB recently proposed amendments to the small servicer exemption under Regulation X, the Real Estate Settlement Procedure Act, qualified mortgage rule and Truth in Lending Act. CUNA is concerned about several measures in the proposal that would exempt credit union servicers based on the number of loans they actually service but would disqualify them from the exemption if they use a third-party subservicer to service just one of the loans, if the third party services more than 5,000 loans, Mary Dunn, CUNA senior vice president and deputy general council, told the publication.
  • Mid-Michigan's credit unions and their thousands of members are going head to head in the fourth annual Caring Community Credit Unions campaign, ABC 12 reported June 3. Thirteen credit unions and close to 100 branches are participating.
  • Credit unions are pushing back at tightened mortgage rules for marginal buyers, fearing it will make them targets for bank regulators and plaintiffs' attorneys in cases of default, The Seattle Times reported May 31. While new rules from the Consumer Financial Protection Bureau (CFPB) aim to ensure financial institutions verify borrowers' ability to pay to as part of efforts to battle mortgage abuses that caused the financial crisis, credit unions remain dedicated to serving their members, Diana Dykstra, president and chief executive of the California and Nevada Credit Union Leagues, told the publication.

Plauda To Exit Illinois League June 2014

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NAPERVILLE, Ill. (6/11/13)--Illinois Credit Union League (ICUL) President/CEO Dan Plauda will be retiring after 37 years of service to the credit union movement, effective June 30, 2014, the ICUL announced Monday.

Geri Burek, ICUL chairman of the board, noted Plauda's legacy in the league announcement. "Because of his leadership, our league is well positioned for great success for many years to come. He truly will be missed by so many credit unions, executives and other organizations across the country, with whom he has humbly served and fostered an environment of collaboration and embraced the true 'people helping people' philosophy of our movement."

CUNA President/CEO Bill Cheney also noted that Plauda "contributed greatly to the growth and success of the Illinois league and the state's credit unions during a distinguished career that has spanned nearly four decades."

Cheney added, "He will leave behind an impressive record of achievement, dedication, and innovation.  Along with all he has done in his state, we are grateful for the Dan's past service nationally on the CUNA board and American Association of Credit Union Leagues executive board.   Dan's legacy will be long-lasting."

Plauda joined the league staff in May 1977, serving at that time as the organization's first general counsel. Before that, he was a partner in a Minneapolis law firm.

In August 1984, Plauda became the fourth president in the 83-year history of the league, and also at that time was named president/CEO of the League Service Corporation (LSC).

The ICUL announcement noted that under Plauda progressive leadership, the Illinois credit union movement has expanded to $35 billion in assets and serves more than 2.84 million members.

During his time at the helm of the league, Plauda also served five years on the CUNA board, and its affiliate, CUNA Service Group.

He also served as chairman of the board of the CU Interchange Group, the national ATM network for credit unions; and on CUNA's governmental affairs and audit committees.  Plauda is also a former member of the executive board of the American Association of Credit Union Leagues.

The league has contracted with D. Hilton Associates, Inc., the largest executive recruiting firm exclusively for credit unions, to conduct the search for its new leader.