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N.Y. CUs exceed national figures for lst Q growth

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ALBANY, N.Y. (6/17/09)--Despite the recession, New York's credit unions saw growth in assets, loans, savings and membership, according to New York's First Quarter 2009 Profile prepared by the Credit Union National Association. In each category, the state's credit unions exceeded the overall national statistics for the period. Credit union loans in the state grew by 8.7% during the first three months of the year. That was 2.5% over the national growth rate of 6.2%. During the same period, credit unions posted a 10.9% net worth to assets ratio, more than the 7% required to be considered well-capitalized and over the 9.7% national ratio. New York credit unions saw an 11.6% growth in savings contrasted to the nation's 8.3%. Assets in the state jumped 10.6%, compared with the national 7.9% growth rate. Membership increased by 2.3%, the strongest surge in the past three years and exceeding the national 1.8%. Collectively, the state's credit unions posted a return on assets of 0.71%, surpassing the national average. "The figures reflect the fact that New York's credit unions have not only remained well-capitalized throughout the financial turmoil that has captured headlines and the public's attention for the past year, but have grown in assets and loans," said William J. Mellin, president/CEO of the Credit Union Association of New York. "They also show that credit unions continue to be there for their members and for New Yorkers' recently discovering the credit union difference," Mellin said. "I believe that our credit unions will remain strong, active and vibrant financial institutions and that they will experience continued growth throughout 2009," he added.

Crisis communication tips shared with N.C. CUs

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GREENSBORO, N.C. (6/17/09)--Common sense at lightning speed is the way to handle communications in a crisis, according to Rick Amme, who recently provided North Carolina credit unions some tips on how to handle crisis communications. Amme, a communications consultant, spoke during the Governmental Affairs Forum at the North Carolina Credit Union League’s Annual Meeting, the league said (Weekly Update June 15). During a crisis, many companies are “too slow” to identify that they have a problem, Amme said. “It’s better to give the media something than nothing and then become roadkill,” he said. At the annual meeting, Amme told the story about one of his financial services clients who accidentally sent monthly statements to some customers with the cancelled checks of others inserted. By not responding to a news reporter’s inquiry quickly enough, the client received a very negative live TV news segment, which included interviews with angry customers, he told the league. Informing stakeholders is key to retaining trust. “People will want to know when you learned about the problem and what you did to fix it,” Amme said. To see a video of Amme speaking, use the link.

Greater Nevada CU closes two branches

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CARSON CITY, Nev. (6/17/09)--Greater Nevada CU, based in Carson City, Nev., has closed close two of its branches in northern Nevada and laid off 27 employees. Credit union officials attributed the closures--in Sparks and in Carson City--to the recession (The Association Press and Reno Gazette-Journal June 15. Five of the employees are part-time employees. Full-time employees who worked for the credit union at least a year were provided lump-sum separation payments.

MDDCCUA announces board elections awards

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BALTIMORE (6/17/09)--Retiring Chairman Wes Bone delivered his last chairman’s report during the Maryland and District of Columbia Credit Union Association’s (MDDCCUA) Fourth Annual Business Meeting Friday. Board election results and awards also were announced. Bone and Rick Stoll were honored for their many years of service to the association. Stoll, past MDDCCUA chairman, was recognized for his leadership during the merger of the Maryland and District of Columbia leagues (FOCUS Newsletter June 15) . MDDCCUA President Mike Beall highlighted some of the early history of the association and the key events of the past 75 years through a video produced by the Credit Union National Association. He reviewed the new strategic plan for MDDCCUA. Board election results were announced. Martin Breland, president/CEO of Tower FCU, Laurel, and Theresa Mann, president/CEO of The Partnership FCU, Washington, D.C., were elected to serve on at-large seats. A record number of votes had been cast. Other directors are: Joe Sparacino, chairman of Montgomery County EFCU, Germantown; and Jim Norris, president/CEO of AFL-CIO FCU, Washington, D.C. Jacqueline Smith of Ft. Meade (Md.) Community CU, who stepped down from her seat on the board of directors, was recognized for her service. Gary Martin of Central CU of Maryland, Baltimore, was presented the Janet C. Glomp Volunteer of the Year Award. Rod Staatz, president/CEO, SECU of Maryland, Linthicum, was named the Judith A. Burgin Professional of the Year.

Lending council doubles 2009 scholarships

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MADISON, Wis. (6/17/09)--The CUNA Lending Council more than doubled its commitment to educating lending professionals by raising its scholarship budget to $125,000 for 2009 from $55,000 last year. The increase means a minimum of 50 executives can benefit from lending-related education programs this year. “We recognize it has been a tougher year for a lot of credit unions, so we wanted to step up to the plate and help out more professionals than ever this year,” said Council Chair Lloyd Gill, executive vice president and chief lending officer at City County CU in Margate, Fla. Scholarships are awarded up to $2,500 and can be used toward expenses for CUNA Lending Council conference registration, Credit Union National Association (CUNA) school tuition, CUNA Lending Council annual dues, or coursework not offered through the CUNA program. Only coursework in lending-related subjects are applicable for the scholarship program. The council also recently extended the scholarship deadline for the CUNA Business Lending Certification Institutes to Monday. The new deadline applies to all four levels of the institute taking place simultaneously July 20-24, in Madison. These include: Fundamentals, Credit Analysis, Advanced Credit Analysis and Management Strategies. For more information, use the links.

Economy remains sluggish Hampel tells league

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PINEHURST, N.C. (6/17/09)--While the worst of the recession is behind the nation, the economic recovery will be slow and weak, Bill Hampel, chief economist for the Credit Union National Association, told attendees at the North Carolina Credit Union League annual meeting last week in Pinehurst. The economy will likely turn around in the third or fourth quarter this year, but growth will not be as robust as the country experienced in the first half of this decade because “consumers’ balance sheets are in really lousy condition,” Hampel told the league (Weekly Update June 15). “Consumers have been doing a lot of borrowing recently and it will take them a while to work that off,” he added. “We’re looking at a long and pretty weak recovery, but at least it’s a recovery, which is better than we’d had for the past six months.” Concerning national foreclosure trends and how they affect credit unions, Hampel said most foreclosures have occurred in areas that have seen the biggest price run-ups and consequently the biggest price corrections--Arizona, California, Florida and Nevada. Four to five years ago, credit unions did not see foreclosures. However, they are seeing them now, even though at a very low loss rate, compared with most other lending, he said. “When homeowners get into difficulty, they are not defending their homes as vigorously as they did in the past,” Hampel explained. “That’s why we’re seeing more loan losses.” Hampel also discussed loan growth for credit unions over the past year. “Usually when the economy turns south, borrowing slows down too,” he said. “But even though last year was an unusual year for the economy, credit union lending actually rose because other lenders that members go to were in such bad shape that they cut back lending completely.” Therefore, even though credit union members were borrowing less, credit unions got more of the lending business. That trend is likely to continue this year, Hampel said. To see a video of Hampel’s comments, use the resource link.

WOCCU Consumer protection ed critical for integrity

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PARIS (6/17/09)--A greater emphasis on consumer protection and education are necessary for financial service providers to bring higher levels of integrity to their processes and policies, says Brian Branch, executive vice president and chief operating officer for World Council of Credit Unions (WOCCU). A strong orientation toward consumer service is especially critical to help slow economic market decline during the current global crisis, Branch told more than 250 policymakers and executives at a roundtable discussion sponsored by the Organization for Economic Cooperation and Development (OECD). OECD's corporate responsibility roundtable, which convened during the organization's annual conference, this year focused on multinational companies' obligations to consumers. Branch guided Monday's roundtable, comprised of representatives from 30 OECD member nations, through criteria credit unions use to define member service. Education, integrity and an emphasis on meeting member needs constitute the credit union approach, one that puts people before profits, he explained. “Credit unions safeguard consumer interests in terms of quality, price and safety," Branch said. “Providing financial services in ways that do no harm and improve consumers' economic wellbeing and prosperity have helped credit unions, communities and even countries grow." Increased integrity comes into play among institutions that provide services reaching beyond the dictates of statutory requirements. Consumer demand for greater transparency, including fee and interest rate disclosures, will help drive greater ethical practices among financial institutions worldwide, a position Branch urged policymakers to implement within their own countries. “Thanks to the Internet, there is greater access today to financial information, which creates the demand for greater transparency," Branch said. “However, an ongoing lack of financial literacy among consumers can increase household debt, which eventually puts a strain on financial providers and affects the markets they serve. Stronger efforts to educate and protect consumers will result in better conditions for all." Branch cited WOCCU's International Credit Union Consumer Protection Principles as a barometer to measure financial institutions' consumer service initiatives. By following principles such as rate and fee disclosure, fair credit practices, dignified collection procedures, non-deceptive advertising, increased financial education and other standards, financial institutions can develop ethical service platforms focused on consumer needs, thereby improving service performances in ways that help both the institution and the individuals it serves, he said. “The fact that OECD called on WOCCU to lead the discussion in this area speaks to its understanding of the importance of the credit union model," Branch added. “The positive response received from roundtable participants indicates that more people have come to appreciate what financial cooperatives can do for members." Founded in 1961, OECD brings together countries committed to democracy and participation in a free-market economy to find better ways to boost employment and financial growth, create economic stability, raise living standards and contribute to growth in world trade. Paris-based OECD provides a setting for its 30 member governments to compare experiences, coordinate policy, identify best practices and seek solutions to common problems. For a complete copy of WOCCU's International Credit Union Consumer Protection Principles, visit the link.

FSCC elects officers

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SAN DIMAS, Calif. (6/17/09)--Financial Service Centers Cooperative (FSCC) announced its officers for the board of directors after June 10 elections at FSCC’s 18th annual shareholder’s meeting in Las Vegas. Officers include:
* Chairman Steve Stapp, president/CEO of San Francisco (Calif.) FCU; * Vice Chairman John Fiore, CEO of Motorola Employees CU, Schaumburg, Ill.; * Treasurer Patricia Smith, CEO of Unitus Community CU, Portland, Ore.; and * Secretary Roger Michaelis, president/CEO of iQ CU, Vancouver, Wash.
Steve Dahlstrom, president/CEO, Spokane Teachers CU, is stepping down as chairman after serving four years in that role. Kevin Foster-Keddie, president/CEO of Washington State Employees CU, Olympia, was newly elected to the board. FSCC is a credit union Shared Branching network with more than 5,800 deposit-taking locations nationwide and abroad.

CUs weigh pros cons of employees on Facebook

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MADISON, Wis. (6/16/09)--Using Facebook to build social networks can offer consumers many advantages--such as the chance to re-connect or build new relationships with others, and to promote themselves or other causes. However, using Facebook can also have disadvantages--including concerns about security and creating a presence on the Web that could damage one’s reputation. When it comes to Facebook use at work, some credit unions have encouraged their employees to build social networks through the site. Parkview Community FCU, McKeesport, Pa., sees Facebook as a way to connect with the younger generation. “We have a lot of younger members that come in to open accounts,” Lechelle Brown, Parkview business development specialist, told News Now. “[When you talk about Facebook with them] you want to know what you’re talking about.” Parkview has encouraged its employees to create Facebook profiles--and all but one of its employees use the site, Brown said. Pioneer CU, Green Bay, Wis., has several employees who use Facebook to communicate with each other and potential members. “It’s good to get synergy and conversation going,” said Michelle Kozak, Pioneer CU marketing specialist. “It’s indirect marketing.” However, others see possible pitfalls in having staff on social networks because of privacy. BayPort CU, Newport News, Va., decided to block access to Facebook at the credit union, said Marilyn Lamb, BayPort CU e-commerce manager. About 50 employees use Facebook, but they do so on their own time or through Blackberries, she added. BayPort recently conducted a security assessment in which employees were briefed on some concerns regarding Facebook. Employees were advised to be aware of what information others can see on their profiles, such as photos, Lamb said. Facebook users can identify others in photos through "tagging," which adds the photos to a person's profile for others to view. They also can write messages on their Facebook friends' walls. Lamb encouraged Facebook users to be aware of who is tagging them in photos or writing on their walls in case the information or photo is questionable and could harm one's reputation. “Use common sense with the information you put out there,” she said. “Be aware of what you’re advertising--it can be used against you.” She also encouraged Facebook users to understand the site and monitor their profiles to make sure they are aware of the information others can see about them. Don’t just create a page and then fail to maintain it, she said. Though BayPort blocks Facebook, it offers members an online banking application through Facebook and MShift, a mobile banking solutions provider. MShift users can check their credit union balances by logging into their Facebook profiles. The application is safe and uses multi-layered authentication, Lamb said. Dan Veasey, director of marketing at Piedmont CU, Danville, Va., said credit unions concerned about Facebook should monitor it, but not necessarily block it. “[Credit unions] can monitor it and see how much activity there is,” Veasey said. “But it’s good for credit union employees to be a part of the community.” Piedmont also recently expanded its social networking to include Twitter. The site has helped Veasey connect with members in the community online and in person, he said.

Philly Fed publication features CU small biz loans

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PHILADELPHIA (6/17/09)--Credit unions are making gains in small business lending while banks are tightening underwriting standards and making less such loans, according to Cascade (Spring/Summer 2009), a publication of the Federal Reserve Bank of Philadelphia. Because of recent bank consolidation, the small business market “has been largely underserved,” Molly Snody, director of business advisory services for the Pennsylvania Credit Union Association, told the publication. In 2009, business owners who are credit union members have been looking to credit unions for financing at a steadily rising rate, she added. To begin lending to businesses, credit unions can either develop staff with specialized skills or else outsource underwriting, servicing and other small-business lending functions, Snody told Cascade. “We tell credit unions that it’s in their best interest to train their staffs or hire experienced personnel, since the credit unions are responsible for the lending decisions,” Snody said. Larger credit unions are more inclined to make business loans, Mike Schenk, senior economist for the Credit Union National Association, told the publication. More than half (53%) of the 3,500 credit unions with an asset size in excess of $20 million reported outstanding business loans at the end of last year. Of the 4,500 smaller U.S. credit unions, only 7% reported outstanding business loans at year-end, Schenk said. Banks held 98.94% of outstanding business loan dollars at the end of 2008, Schenk added. The business community’s limited awareness of the availability of credit unions’ services and loans is a barrier to the growth of credit union business lending, Kathie A. Stone, CEO of East Coast Business Lenders, told Cascade.

McPharlin receives Michigan leagues highest honor

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LANSING, Mich. (6/17/09)--Patrick McPharlin, Michigan State University (MSU) FCU president/CEO, was named recipient of the Distinguished Service Award (DSA), the Michigan Credit Union League’s (MCUL) highest honor. In making its recommendation, the awards committee noted that McPharlin is a mentor and friend to many within the Michigan credit union community and the national credit union system. He has been a leader in community involvement and encouraged other credit unions to make similar efforts, the league said (Michigan Monitor June 15). McPharlin has been active in strengthening the credit union movement in Michigan, including serving as a member of the Michigan Credit Union Act modernization working group--even though MSU FCU in East Lansing is federally chartered. He has served on other committees for the Lansing Chapter and MCUL, including Lansing Chapter chairperson; MCUL alternate director; vice chair, secretary and trustee for the Legislative Action Fund; member of the chapter leaders steering committee; legislative representative for the Lansing Chapter; and member of the bankruptcy task force. McPharlin will receive the award during the 2009 MCUL Annual Convention and Exposition July 9-11. Other award winners announced by the league’s board include American 1 FCU (Jackson) President/CEO David Puckett, who will receive the Credit Union Professional of the Year award, and Communicating Arts CU, Detroit, which will receive the Outstanding Credit Union of the Year award. Puckett was noted as an innovator in new products and services for members, and for his heavy involvement in Jackson and the surrounding communities. Communicating Arts was hailed for its large impact on an economically impoverished area--specifically the opening of a new branch in Highland Park--and its active community involvement.

CU System briefs (06/16/2009)

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* TAMPA, Fla. (6/17/09)--A story on a Tampa news station Friday about a data breach involving accounts at Suncoast Schools FCU has resulted in several retractions from the station for airing erroneous information, says Tom Dorety, president/CEO of the credit union. Suncoast Schools was notified by Visa that some members' accounts are among those compromised in the Heartland Payment System breach disclosed to the public in January. That breach affected millions of consumers and thousands of financial institutions, including Suncoast Schools. This latest incident is not a new breach but part of the ongoing investigative process of the Heartland breach. Dorety noted, "It was a local reporter on a Friday night who didn't bother to check with us first." The credit union was swamped with calls, and "it's been a real headache," Dorety told News Now … * BALTIMORE (6/17/09)--U.S. Rep. Elijah Cummings (D-Md.) called on credit unions to find ways to "be more effective and efficient" in helping members reach their financial goals. Cummings made the comments during a speech Friday at the Maryland and District of Columbia Credit Union Association's Fourth Annual Meeting and Convention, held at the Baltimore Convention Center. Cummings added that if credit unions controlled the marketplace, the country would not be in the economic mess it is today (FOCUS Newsletter June 15) … * SYRACUSE, N.Y. (6/17/09)--Jason J. Monto, 31, was indicted last week on felony charges of second-degree grand larceny and first-degree falsifying business records after allegedly taking advantage of a glitch and stealing $75,539 from a credit union's ATM. Monto, a member of New Process Gear CU (now Focal/Point FCU), Syracuse, had $5 in an old account at the credit union but managed to repeatedly withdraw funds from the ATM after he figured out it was not directly linked to the credit union's records during non-business hours, said prosecutors (The Post-Standard June 13) … * SAN FRANCISCO, Calif. (6/17/09)--A man who pleaded guilty to the armed robbery Aug. 6, 2008, of a Pacific Postal CU branch in San has been sentenced to 11 years and one month in prison by a U.S. District Court in San Francisco. Sefo Sagote also was sentenced to five years of supervised release after the prison term and ordered to pay $79,765 in restitution to the credit union. Sagote was one of three people arrested for the robbery. Elisara Taito, 26, was sentenced in March to 78 months in prison and five years of supervised release. Sagote's niece and former credit union employee Angelica Sagote, 20, is scheduled to be sentenced on July 6. On Aug. 4, two men attempted to rob the credit union but were caught in a "bandit barrier" that protects tellers. They fled with the purses of two members. On Aug. 6, two men robbed the credit union of more than $76,000 (US Fed News June 16) … * DALLAS (6/17/09)--A "Train the Trainer" session sponsored by the Texas Credit Union Foundation taught 21 teachers in the Dallas Independent School District (ISD) about the units in the National Endowment for Financial Education's High School Financial Planning Program (NEFE HSFPP). The teachers also learned interactive exercises to ensure effective tactics for reaching students. The Dallas ISD is offering students an economics class this summer in 11 of its 22 high schools. The class incorporates the NEFE curriculum (LoneStar Leaguer June 16) … * BATON ROUGE, La. 6/17/09)--E FCU hosted its second annual Camp
Click to view larger image Click for larger view
$martMoney financial education day camp for tends on June 1-5. Fourteen teenagers learned about making, managing and multiplying their money. The camp uses educational materials from Junior Achievement, Visa's Practical Money Skills and the National Endowment for Financial Education (NEFE). Students teamed to develop summer business plans ranging from an earth-friendly landscaping business to a custom-designed flip-flop sidewalk shop. Teams received coaching from a local entrepreneur, Jared Loftus, owner of The Tiger District, a local Louisiana State University apparel retailer. Here, campers work together to develop and present a financial plan and budget for Nickelodeon cartoon character, SpongeBob Squarepants. Photo provided by E FCU) …