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IWall St. JournalI Disaster recovery business is booming

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NEW YORK (6/18/10)--Demand for disaster recovery services and products is booming, according to Agility Recovery Solutions Inc., a CUNA Strategic Services alliance provider featured in an article in The Wall Street Journal (June 17). The article, "Disasters' Silver Lining: Green," noted that the number of disaster preparedness and recovery businesses--most of them small--have increased 20% to 30% over the past five years. The businesses are cropping up because more businesses (including credit unions), government agencies and individuals are hoping to protect themselves from potential catastrophes, particularly after the Sept. 11, 2001 terrorist attacks, Hurricane Katrina in 2005, and the recent oil spill in the Gulf of Mexico. Agility Recovery Solutions, a Charlotte, N.C.-based provider of mobile offices and emergency backup computer support, was one of the businesses interviewed. President Bob Boyd told the Journal that his company is fielding more inquiries than usual, with the hurricane season now. This year is expected to exceed the average year of 11 named storms, six hurricanes and two major hurricanes along the Atlantic, according to the National Oceanic and Atmospheric Administration. "Any time there's a big disaster, we have more customers calling us, and when we call prospects, they're more receptive to hearing about potential solutions," Boyd told the publication. Agility, with 75 employees, originally served large companies when it launched in 1989, but after adding affordable options for small and medium-sized concerns in 2005, its customer base grew sevenfold. Today it serves 7,000 clients, including credit unions. Historically, Boyd said, there was never a service like this for small businesses. Agility Recovery Solutions has been an alliance provider with CUNA Strategic Services since March 2006.

CU System briefs (06/17/2010)

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* TOLEDO, Ohio (6/18/10)--Ohio's first and newly chartered Latino credit union, Nueva Esperanza Community CU, Toledo, has hired its first full-time employee. Lillian Sue Cuevas will serve as the credit union's manager, according to the Ohio Credit Union League (eLumination Newsletter June 16). Cuevas has more than 20 years experience in the banking industry. She has held positions ranging from loan director and mortgage loan officer to banking center manager and financial investment assistant. Cuevas is president of the Hispanic Awareness Organization of Northwest Ohio and a member of the Toledo Hispanic Chamber of Commerce. She is fluent in Spanish, which will help the credit union build relationships with South Toledo's Latino community, said the league ... * MISSOULA, Mont. (6/18/10)--Ben A. Diveley, 34, of Helena, Mont., pleaded guilty Tuesday to embezzling nearly $77,000 from Helena Community CU, where he worked as a loan officer for five years (Associated Press Newswires June 16). He entered his pleas to credit union embezzlement, money laundering and identity theft before a U.S. Magistrate Judge in Missoula. While working at the credit union, Diveley allegedly took out loans totaling $75,000, using false borrower names and guaranteed with a member's certificate of deposit without the member's permission. Sentencing is set for Sept.24 ... * SHELTON, Wash. (6/18/10)--Joe Robertson, president/CEO for the past 25 years of Our Community CU in Shelton, Wash., will retire Dec. 31, the credit union announced
Thursday. Bert Fisher, currently chief operations officer (COO), will be promoted to CEO on July 1, to begin the transition to succeed Robertson at the end of the year. Robertson's career with the credit union began in 1975, when he was hired as a collection manager and later promoted to operations manager. He was appointed CEO in 1985 and has been active in the credit union industry, particularly with the Washington Credit Union League and as an advocate for credit unions on both Capitol Hill and in the community. Fisher has been COO since 2005, when he was hired as part of the succession plan for Robertson's retirement. As COO, Fisher oversaw branch operations, call center, lending and collections, human resources, staff development and the compliance department. He also has more than 24 years' experience in the wood products industry ... * WASHINGTON (6/18/10)--Gordon E. Hurd, former development director with the World Council of Credit Unions (WOCCU) and later a senior development officer in institutional philanthropy for AARP, died May 17 of cancer at his home in Arlington County, Va. Hurd joined WOCCU in 1976, holding positions in strategic planning and media management and as an international liaison before becoming development director in WOCCU's Washington, D.C., office He moved to the organization in Madison, Wis., in 1989. He began working for the University of Wisconsin Foundation in 1995, before joining AARP's staff in 2005. He is survived by his wife, one son, a sister and a brother (Washington Post June 17) ... *OKLAHOMA CITY, Okla. (6/18/10)--Donald Anton Brown, 92, died June 12 in Oklahoma City. He spent 50 years in the aviation industry and maintained an active pilot's and aviation mechanic's license for 60 years. Brown was president of the FAA CU, based in Oklahoma City, for seven years. He remained on the board of directors at the credit union for 25 years and was active in many community and aviation organizations. He is survived by two sons, one daughter, four grandchildren, six great-grandchildren, one brother and one sister (The Oklahoman June 15) ...

Former CU to convert to stock organization

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WAYCROSS, Ga. (6/18/10)--The mutual holding company of a former Georgia credit union that converted to a mutual savings bank in 2000 has adopted a plan to convert to a stock form of organization. Atlantic Coast Federal Corp. announced the planned conversion of the Atlantic Coast Federal, the mutual holding company, in a press release Thursday. Atlantic Coast Bank, which had about $914 million in assets as of March 31, is the former Atlantic Coast FCU, which was based in Waycross, Ga. The credit union converted to a federal mutual savings association in November 2000. In January 2003, the Atlantic Coast Federal Corp. was formed as the holding company. The company completed its initial public stock offering in October 2004. The mutual holding company currently owns about 65% of the outstanding shares of common stock in the company, which owns 100% of the issued and outstanding shares of the capital stock of the bank. The conversion is subject to the approval of the Office of Thrift Supervision, the mutual holding company's depositors, and the company's stockholders. The conversion and offering are expected to be completed by late third quarter or early fourth quarter of 2010.

LSCUs first annual meeting attracts 1100

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ORLANDO, Fla. (6/18/10)--More than 1,100 credit unions and others from Florida and Alabama attended the first annual meeting and convention of the League of Southeastern Credit Unions (LSCU) and heard speakers on a variety of topics, including interchange and the economy. LSCU CEO Patrick La Pine laid out the foundation of the new league and the initiatives that are most important--advocacy and information.
Click to view larger image Credit Union National Association President Dan Mica speaks before Florida and Alabama credit unions at the first League of Southeastern Credit Unions annual meeting, in Orlando, Fla. (Photo provided by the League of Southeastern Credit Unions)
Credit Union National Association (CUNA) President/CEO Dan Mica, told the group that the $250,000 share insurance coverage cap on accounts by the National Credit Union Share Insurance Fund is now permanent. He also noted that House Financial Services Committee Chairman Barney Frank told him he is ready to begin looking at member business lending after the interchange issue is resolved. He also said he hoped alternative capital would be on the table by the end of the year or early next year. The league announced it was donating $15,000 to Credit Union House in Washington, D.C., in honor of Mica, as a retirement gift. He will step down from the CEO position at CUNA in July. Mike Schenk, CUNA vice president of economics and statistics spoke about the economy's impact on credit unions." Things have been bad; the worst that credit unions have seen in our lifetimes," he said. "We're through the worst, but the recovery will be slower. It won't be an event, but a process." He also noted that "more credit unions in Alabama and Florida are recording gains, but recovery will be slower in the Southeast." Jeff Post, president/CEO of CUNA Mutual Group, said that more than one million homes are owned by credit unions right now, that the "real" unemployment rate is 16% to 20%, and that the gross domestic product grew exponentially in the 1990s at 38% while it grew 17% in the 2000s. Household net worth was negative in the 2000s for the first time in history. Post said the economy has bottomed out. World Council of Credit Unions President/CEO Pete Crear showed pictures from Haiti and said most people there live in tents because they fear buildings will collapse. He noted that Ethiopia and Sri Lanka have 8,000 credit unions and Kenya has 3,000. A new initiative in the United Kingdom will open 11,000 credit union branches in post offices and fund them through taxes on banks. Others speaking included keynote speakers and political commentators Tucker Carlson and Paul Begala, and National Association of State Credit Union Supervisors CEO Mary Martha Fortney. The Filene Research Institute's Mark Meyer, and National Credit Union Foundation's REAL Solutions program director Lois Kitsch were among those conducting educational sessions.

African-American CU Coalition Conference set

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ST. LOUIS (6/18/10)--The African-American Credit Union Coalition will host its 12th annual conference Aug. 4-7 in St. Louis. The theme is “Arching for Success--Gateway to Knowledge.” The conference includes educational sessions, speakers and live entertainment (The Missouri difference June 16). Confirmed speakers include:
* National Credit Union Administration Chairman Debbie Matz; * U.S. Rep. William Lacy Clay (D-Mo.); * Missouri Credit Union Association President/CEO Rosie Holub; and * St. Louis Community CU President/CEO Patrick Adams.
For more information, use the link.

18 receive Certified CU Executive status

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MADISON, Wis. (6/18/10)--Certified Credit Union Executive (CCUE) designations have been awarded to 18 individuals from nine different states, bringing the total nationwide to 2,683, said the Credit Union National Association (CUNA). CCUE, instituted in 1975, is a program designed for managers and those aspiring to credit union leadership. It teaches advanced credit union management and operations techniques. Three individuals earned the Certified Financial Services Professional (CFSP) designation. The CFSP program began in 1999 as a designation targeted at educating credit union professionals specializing in financial services. The Certified Executive Program (CEP) awarded specialty certifications to 18 credit union professionals. The certifications require in-depth courses in a specialty area such as compliance, lending, financial management, marketing and human resources. Recommended for college credit by the American Council on Education (ACE), the classes and materials are tailored to those working within the Credit Union System. All new designations were awarded in April. Receiving high-honor designations were:
* Mark Thomas Little, CUNA Mutual Insurance Society, Madison, Wis.; * Ah Ber Lim, Wright Patman Congressional FCU, Washington, D.C.; * Cynthia T. Magliocca, State Employees’ CU, Raleigh, N.C.; and * Jennie C. Newbold, Jordan FCU, Sandy, Utah.
Receiving honors designations were:
* Christine H. Wolski, Erie (Pa.) Community CU; * Steven Farnsworth, Heartland CU, Madison, Wis.; and * Julie R. Yoder, Park View FCU, Harrisonburg, Va.
States represented by designees include Florida, Indiana, Louisiana, Minnesota, New Mexico, North Carolina, Pennsylvania, Texas and Wisconsin. For a list of designees, use the link.

Illinois league hosts Australian delegation

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NAPERVILLE, Ill. (6/18/10)--Members of the Australian credit union movement recently had the opportunity to learn more about Illinois credit unions with a visit to the Illinois Credit Union League (ICUL).
Click to view larger image Members of the Australian credit union movement recently learned more about Illinois credit unions with a visit to the Illinois Credit Union League. Pictured, from left: Debbie Balzan, quality and audit manager, Encompass CU, Sydney, Australia; Victor Corro, senior manager, International Partnerships Program, World Council of Credit Unions (WOCCU); Louise Aubusson, executive manager--Sales and Lending, Encompass CU; and Joshua Fetting, program specialist, International Partnerships, WOCCU. (Photo provided by the Illinois Credit Union League)
The delegation included: Debbie Balzan, quality and audit manager, and Louise Aubusson, executive manager--sales and lending, Encompass CU in Sydney, Australia. Also attending were representatives from the World Council of Credit Unions (WOCCU): Victor Corro, senior manager, and Joshua Fetting, program specialist for WOCCU’s International Partnerships Program. At the meeting, the representatives were briefed on credit unions in the state, ICUL’s programs and initiatives, and products and services offered by the ICUL Service Corp. Balzan and Aubusson also shared their perspective about the Australian credit union movement. The visit to ICUL was part of a two-week trip the Australian delegation made throughout North America. Other stops included: Vancouver, Canada; Madison, Wis.; Albany, N.Y., and New York City. Overall, the delegation spent time with executives to discuss the big picture areas of interest to understand overall credit union operational procedures and member service. Some of the delegation’s other goals included gaining information to improve branches, administration, collections and risk, and information technology; and to review their processes and projects to embrace new technologies and marketing initiatives. “We found the study tour to be extremely worthwhile both on a personal and professional level,” said Aubusson, who added, “we have brought back many ideas.”

State leagues interchange views in media

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BOSTON and TERRE HAUTE, Ind. (6/18/10)--State credit union leagues have expressed their views on the interchange amendment to the U.S. Senate version of the financial regulatory reform bill in various media outlets. Some of the successful league efforts are:
* Daniel Egan, president of the Massachusetts and New Hampshire Credit Union Leagues and the Credit Union Association of Rhode Island, sent a letter to the Boston Globe criticizing the newspaper’s support of the U.S. Senate’s version of the financial reform bill. “Your support of the U.S. Senate’s version of the financial reform bill, which instructs the Federal Reserve to unilaterally cap debit card interchange fees, is a mistake,” Egan wrote. “The 200 banks and 225 credit unions of Massachusetts and millions of consumers will face unintended consequences: higher big-box retailer profits and less convenience and higher costs for consumers. “The merchants who have pushed for this action have sold it as a benefit to the nation’s consumers,” Egan added. “Yet there is no requirement to pass along savings to consumers, nor for the retailers to be responsible for any fraud, liability or negligence of their own doing. The retailers are receiving a big gift, and consumers, local banks and credit unions will suffer the consequences.” * John McKenzie, president of the Indiana Credit Union League, wrote an op-ed piece in the Terre Haute, Ind., Tribune Star in which he maintains there is still time to stop the interchange amendment by contacting Congress. “The current interchange arrangement helps credit unions and community banks cover the financial risks associated with issuing the cards such as losses on unpaid balances, fraud losses and data security,” McKenzie wrote. “These are costs the merchants don’t have to worry about. “The interchange amendment that is now in the financial regulatory reform bill would put in place government price controls on the interchange rates that retail merchants pay,” he continued. “If the government sets the merchants’ interchange rate too low, it will be more expensive for consumers, because credit unions and community banks will be forced to pass along the existing costs of offering debit/credit cards directly to consumers through higher fees.” * Ohio credit union leaders and the Ohio Credit Union League are working with the media to inform the public and policymakers of the detrimental effects of the Senate interchange amendment, the league said (eLumination Newsletter June 17). League Director of Media Relations Patrick Harris conducted an on-camera interview with WBNS-Channel 10 on Wednesday, and had another scheduled with WSYX-Channel 6 for Thursday. A press release from the league resulted in an article regarding Ohio’s efforts to defeat the interchange amendment in the June 2 Dayton Business Journal. A letter to the editor from Steve Favor, CEO of First Ohio CU, Fostoria, appeared in Findlay’s The Courier. League Vice President of Government Affairs John Florian and Harris spoke to a reporter for Crain’s Cleveland Business. A letter to the editor from Jaime Crooks of OhioHealth Care FCU, Dublin, was published in Monday’s Columbus Dispatch.
Individual credit unions also have succeeded in getting the interchange issue discussed in local media. Among them:
* Jim Barbarich, president/CEO of M-C FCU, Danville, Pa., wrote a letter that was published Wednesday in The Daily Item, saying the Senate interchange amendment is harmful to consumers. “This amendment, offered without debate, will harm consumers and our ability to provide critical financial services to our members, other credit union members and community banks in our area,” Barbarich wrote. “The focus of the financial reform bill was to address the bank failures and high-risk activities that led to the worst economic crisis in many of our lifetimes.“The debit card is the new standard of convenience for consumers in this age of automated financial transactions, where fraud protection and data security are in constant focus,” he added. “This service is not free, and is supported in part by interchange revenue, an important part of our revenue stream. The amendment empowers the government with control on the amounts that merchants pay to support the system that allows you to use your card at their establishment. Everyone needs to understand that the credit union assumes all of the risk on a debit card transaction.” * An article in the Marshfield News-Herald Wednesday quotes Pat Wesenberg, president/CEO of Central City CU, Marshfield, Wis., who said smaller institutions just would break even on debit card purchases, and an interchange fee reduction might cause his credit union to raise members’ annual fees on their debit cards. “[The amendment] would change the playing field and certainly make it more favorable to the larger institutions who have larger economies of scale and built-in efficiencies in their organizations because of their size,” Wesenberg said.
For more information, use the links.

Credit card study Charge-offs are up

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PORTLAND, Ore. (6/18/10)--Credit card charge-offs are up and delinquencies are down slightly but still high, according to a first quarter 2010 credit union credit card portfolio trends study.
Click to view larger image Click for larger view
The study was conducted by AssetExchange, a credit union credit card portfolio advisory and brokerage firm, using National Credit Union Administration call report data. Charge-offs were up 4.6%, from 4.1% in March 2009, and delinquencies were down 1.9% from 2% in 2009. For the 2,150 credit unions with card portfolios of $1 million or more analyzed by AssetExchange:
* Outstanding balances grew at an annual rate of 8.5% between March 2009 and March 2010 to $33 billion. Total assets at these credit unions grew at an annual rate of 7.6% during the same period. * Credit card accounts grew at a 3% annual rate to 12.5 million. * Cards as a percentage of total assets increased slightly to 4.4% in the first quarter, up from 4.3% in the first quarter of 2009. Credit card balances grew faster than total credit union assets. The average balance was $2,619. * Credit card penetration among members continues to trend near 17%, where it has stayed the past four years. * There were no sales of credit union credit card portfolios larger than $1 million in the first quarter.
The data are based on credit card portfolios larger than $1 million for the time periods.