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CU System briefs (06/04/2014)

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  • FAYETTEVILLE, N.C. (6/4/14)--Of the more than 560 high school seniors in Cumberland County who qualified, three came away winners in the "Driven to Excel" program, co-sponsored by Beasley Broadcast Group and Fort Bragg FCU, Fayetteville, N.C. (In the Loop June 3). Students had to have a cumulative GPA of 3.2 or higher and no more than five absences. The $396 million-asset credit union provided scholarships worth $3,000 and $2,000 for second- and third-place winners. The grand-prize winner took home a 2014 Toyota Scion ...
  • MADISON, Wis. (6/4/14)--Jean Chatzky, director of education for SavvyMoney, will be part of a free, live web chat at 1 p.m. (CT) June 17, presented by the Filene Research Institute and moderated by SavvyMoney CEO JB Orecchia. Chatzky, author of "Money Rules," will share her behavioral finance research about how credit unions can encourage members to save more and spend less.  She will offer her advice for getting more members in the door. Also on the agenda is a discussion of SavvyMoney, which began as a Filene i3 program ...
  • SCHAUMBURG, Ill. (6/4/14)--After 29 years as president/CEO of $860 million-asset Motorola Employees CU, John Fiore announced his retirement, effective Aug. 29. He has been with the Schaumburg, Ill., credit union for 45 years, starting in the loan department. Fiore has served the credit union movement in a number of capacities including, but not limited to: director, Illinois Credit Union League; director, Credit Union National Association; vice chair, Alloya Corporate FCU, Warrenville, Ill.; chair, National Credit Union Foundation; and chair, Illinois Credit Union Foundation. He was named to the Illinois Credit Union League Hall of Fame in 2000 and the Credit Union House Hall of Leaders in 2011. Michael Murphy, current executive vice president and chief operating officer, will succeed Fiore on Sept 1. He has been with Motorola Employees for 18 years ...
  • COLUMBIA, S.C., and SEATAC, Wash. (6/4/14)--Credit unions on both coasts recently announced plans for mergers. The board and membership of VARO No. 319 FCU, Columbia, S.C., with $1.2 million in assets, approved a merger with Carolina Collegiate FCU, Columbia, with $82 million in assets. VARO members will have access to four Carolina Collegiate branches and more than 5,000 shared branch locations, said Anne Shivers, Carolina Collegiate CEO. The merger will be completed with all accounts transferred and services available by June 18. In the Northwest, four credit unions announced merger plans (Anthem June 3). In Eugene, Bi-Mart FCU, with $6.9 million in assets and 2,300 members, will merge July 1 with $1.2 billion-asset Oregon Community CU. The merger has been approved by boards, members and regulators. Specifically, Bi-Mart CEO Chad Olney said the merger will provide more branches, remote services and surcharge-free ATMs. In Washington, $9.3 million-asset Central Washington University FCU, Yakima, will merge with Washington State Employees CU, Olympia, with $1.9 billion in assets. Central Washington's services include deposit accounts and vehicle loans. The merger gives members access to checking accounts, debit and credit cards, online banking, mortgages and investment services. Aug. 1 is the expected effective date ...

Monthly CU survey indicates double-digit loan growth

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MADISON, Wis. (6/4/14)--Credit unions continued to experience solid loan growth in April, as year-to-date increases head toward double digits, according to the Credit Union National Association monthly credit union estimates released Tuesday.  
 
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Loans outstanding rose by 1% in April, bringing growth for the year to 2.4% and 8.9% over the past 12 months. The year-to-date growth rate of 2.4% is the strongest since 2005. The National Credit Union Administration released first-quarter numbers Tuesday, which show an 8.8% year-over-year increase in outstanding loan balances. (See related story: NCUA Q1 report highlights CU loan, membership growth.)

Adjustable-rate mortgages led loan growth, rising 4.4%, followed by unsecured personal loans at 1.9%, new and used-auto loans (both 1.8%), home-equity loans and other mortgages (both 0.8%), and credit card loans (0.4%). On the decline were fixed-rate first mortgages (-1.4%).
 
"If loans growth continues to accelerate, we could see double-digit growth for the year, and it's nice balanced growth across the portfolio," said Bill Hampel, CUNA chief economist and senior and senior vice president of policy and analysis.

In the first three months of the year, the credit union share of consumer credit outstanding inched up to 8.7% from 8.6%. 
 
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Savings fell by 0.5% in April, bringing growth for the year to 3.2%, and 3.7% over the past 12 months.  The 3.2% growth for the year-to-date is consistent with the modest savings growth recorded over the past several years and suggests full year growth won't be much more than 5%, Hampel noted.
 
Credit unions are not the only institutions experiencing soft savings growth as the credit union share of the household savings market is up slightly in the first four months of the year, to 9.7%. from 9.6%
 
The net capital-to-asset ratio rose during April to 10.5% from 10.4% while the loan delinquency rate was unchanged at 0.9% of loans outstanding. 
 
Total membership in credit unions rose by 0.2% to 99.6 million, bringing memberships very close to the 100-million milestone. "Membership growth of 2.9% over the past year is very strong, and suggests more and more Americans are choosing credit unions as their best financial partner," said Hampel.

Regional branching legislation inching through Mass. Legislature

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MARLBOROUGH, Mass. (6/4/14)--A bill that would allow Massachusetts credit unions to open branches in nearby states has advanced in the state's legislative process: to the third reading in the House--a step that precedes both a review by the House Committee on Bills and the house's final vote (Daily CU Scan June 3).

The key provisions of the bill include authorizing branching into Connecticut, Maine, New Hampshire, New York, Rhode Island and Vermont; expanding the branching radius for credit unions to 100 miles from the main offices outside of the county; a one-year delayed effective date; and a limit on applications to one per 12 months.

The state's House Ways and Means Committee--led by Chairman Brian Dempsey (D-Haverhill)--and House Financial Services Committee Chairman Michael Costello (D-Newburyport) worked closely with the Massachusetts Credit Union League over the past two weeks to produce the amended bill.

"We truly appreciate the careful consideration that the committee put into this piece of legislation," said league President Paul Gentile. "Because of their effort, we now have a bill that will really benefit the people who rely on credit unions."

Two other credit union bills have advanced alongside the interstate branching legislation, including a bank recodification bill and the Massachusetts Credit Union Share Insurance Corporation's credit union service organization bill.

The league expects all bills to reach the Senate before formal sessions conclude.

CUs have competitive advantage for CD rates: GOBankingRates

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LOS ANGELES (6/4/14)--They don't make certificate of deposit (CD) rates like they used to.

But it would behoove consumers who prefer the guaranteed interest offered by these time deposits anyway to look no further than credit unions, which consistently offer better rates on CDs than banks (GOBankingRates.com June 2).

In a recent survey conducted by GOBankingRates.com, participants were asked what interest rate it would take to compel them to put savings into a CD account for two years.

More than half of respondents answered that they'd like to see a number above 3.01%.

While neither credit unions nor banks can accommodate that type of rate these days, which pale in comparison to rates that rose above 10% in the 1980s, credit unions by far come the closest.

For one-year CDs, credit unions swept the top 10 rankings, ranging from 1.56% to 1.26% annually, according to GOBankingRates.com.

For two-year CDs, 11 out of the top 15 rates were offered by credit unions, ranging from 1.76% to 1.5%.

Credit unions also dominated two-year jumbo CD rates and both five-year CD regular and jumbo rates.

"This comprehensive list of today's high-yield CD account rates suggest that rewarding CD products do, in fact, exist," GOBankingRates said. "As the economy continues to draw closer to a full recovery, savers can expect to see CD rates rise in tandem."

Perhaps especially so at credit unions.

ACUC speaker teases social media practices with Monday's #CUNAChat

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MADISON, Wis. (6/4/14)--The Credit Union National Association will host a Twitter chat on social media best practices for credit unions at 3 p.m. (ET) Monday with Amber MacArthur, who is also a keynote speaker at America's Credit Union Conference in San Francisco, June 29-July 3.
 
The chat will last about 30 minutes.
 
Participants can follow and use #CUNAChat in their tweets. @CUNA will be the moderator and ask questions to develop the conversation. Credit union participants should also feel welcome to ask questions and share their own experiences.
 
Twitter chats work when the hashtag is included in all tweets pertaining to the conversation. Monday's hashtag is #CUNAChat. The moderator (@CUNA) will ask questions, and guest participants can respond in a conversational manner using #CUNAChat.
 
MacArthur, also known as Amber Mac, is an established speaker, author, host, producer and consultant based out of Toronto. As president of the digital marketing agency Konnekt Digital Engagement, MacArthur's areas of expertise include digital marketing, social media, branded content and other new media.

Lending, hiring on upswing in small-biz forecasts

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MADISON, Wis. (6/4/14)--Optimism is in the air for small businesses with indications that they are willing to lend and adding to their payrolls.
 
In a Sageworks survey of nearly 420 credit union and banking professionals, 67% responded that their institution would be either making "more" or "significantly more" loans to businesses this year compared with 2013.
 
About 20% said their loan volume would remain stable, and only 3% told the financial information company that they would be making fewer loans.
 
Privately held companies are growing stronger--a rate of 8%, according to Sageworks--which signals they are healthy enough to take on debt.
 
"There's a possibility that banks and credit unions may be recognizing this slow but steady improvement on the income statements and balances sheets of privately held companies that are applying for loans," said Sageworks' Tim McPeak.
 
Small businesses added 35,000 jobs in May, according to Intuit Inc.'s monthly small business employment and revenue indices. The increase is the largest in more than a year--and triple the average of 12,000 new jobs per month since April 2010.
 
The employment index is based on April 24-May 23 data from Intuit and QuickBooks online payrolls of about 231,000 small business employers.
 
"This month's employment increase is the largest we've seen in more than a year. In addition to the impressive increase of jobs this month, the hiring rate is also at the highest level we've seen since early 2009," said economist Susan Woodward.
 
However, Newtek Business Services Inc. released the May results of its SB Authority Market Sentiment Survey, which offered a different take. Of the more than 1,500 respondents, only 30% of business owners plan on hiring in the next three to six months.

"Our May survey depicts a lack of intention in our small business clientele to hire over the next two quarters and that the trend of a jobless economic recovery may continue," said Barry Sloane, Newtek chairman/president/CEO.

Filene snapshot: Bill payment most popular use of mobile

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MADISON, Wis. (6/4/14)--Bill payment is the most widely used form of mobile payment today, followed by mobile point-of-sale (POS) and person-to-person payments, according to a new white paper from the Filene Research Institute.
 
About 39% of online consumers used their mobile phones to make a bill payment, according to the white paper, "Bank Shopper Snapshot Survey Vol. 10: Mobile Payments Tracker II." Another 20% used their mobile phones to make purchases at a store, using POS capabilities provided by retailers.

About 12% used their mobile phone to send someone money. However, mobile P2P adoption is on the rise. P2P payments usage has grown by 69% since the last time the survey was taken nine months ago.
 
The report is based on 1,695 consumers responding to a Shopper Insight Survey in January.
 
In the "That's No Surprise" category, mobile POS is most likely used by consumers age 30 to 39 because they have the necessary checking accounts and credit cards and are comfortable with the technology. More than 50% of consumers in the 30-to-39 demographic who made mobile retail purchases in the last 30 days used PayPal.

Coffee and convenience retailers are winning younger consumers by providing their own mobile apps for payment. About 46% of online consumers used these apps.
 
Younger consumers are more likely to use mobile P2P because they don't have engrained customs on how to exchange money with people, are comfortable using smartphones, typically don't carry much cash, and are most likely to want to exchange small sums of money with people while they're on the go, the paper said.
 
Older consumers are less likely to pay people with their phone, and that appears to be a function of lifestyle, according to the paper. "Consumers over 40 are more likely to have established households and in a position where owing friends money isn't a concern," the paper said. "Married couples have shared bank accounts and don't exchange small amounts of money as much as younger single consumers do."
 
Last-minute payments are driving usage of mobile bill payments. Consumers using mobile bill payment services want their payments credited immediately. For that reason, the paper recommends credit unions should offer expedited bill payments to protect their role in the payments cycle.

The ability to give confirmation that the payment was accepted by the biller would also help increase the use of the credit unions mobile app to make payments, the paper said.
 
Because of this "right here, right now" expectation, consumers are closely tethered to their smartphones. The paper estimates the average smartphone user checks his or her phone more than 150 times a day.
 
To download the report, use the link.

Mass. banking division earns accreditation across the board

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BOSTON (6/4/14)--The Massachusetts Division of Banks has received accreditation from the National Association of Credit Union Supervisors (NASCUS), the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR).
 
Certification means that the division maintains the highest standards and practices for state banking, credit unions, and mortgage supervision as defined by each of the three supervisory bodies.
 
Massachusetts achieved accreditation in all three programs as part of a joint pilot program among CSBS, NASCUS and AARMR. The program is being developed to help states gain multiple accreditations at one time.
 
"This reaccreditation confirms that the division's regulatory programs are strong and positioned to protect Massachusetts consumers while ensuring the safety and soundness of the state financial system," said David Cotney, Massachusetts commissioner of banks. "Because of the CSBS, NASCUS and AARMR joint-review, the division was able to obtain several accreditations at once, saving time and allowing the division to focus more of its resources on supervision."
 
This is the division's fifth bank accreditation, receving the first in 1994. Massachusetts was first accredited by NASCUS in 1996. The division's initial mortgage accreditation was received in 2008--the first mortgage accreditation awarded as part of the nationwide program.