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Federation CDFI Fund winners were 30 of CU applicants

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NEW YORK (7/1/09)--Nine community development credit unions (CDCUs) who were awarded more than $17.15 million in capital from the Treasury Department's Community Development Financial Institutions (CDFI) Fund accounted for about 19% of the total $90 million awarded to 59 organizations. The nine CDCUs, all members of the National Federation of CDCUs, represent 30% of the 30 credit unions that applied in the fund's current round, said the federation. The $17.15 million they received amounted to 40% of the total dollars requested by credit unions. The strong showing in the current awards rounds were by "some of our most dynamic, innovative institutions, and we know they will continue to make a huge difference for the low-income communities they serve," said federation President/CEO Cliff Rosenthal. "We would always like to see a large credit union share, of course," Rosenthal said, "but these percentages are a marked improvement over recent CDCU performance in previous award rounds. Given the stress on the credit union industry, the CDFI Fund's investments could not come at a better time." Eight of the credit unions received $2 million each, while the ninth, Brooklyn (N.Y.) Cooperative FCU, received $1.15 million. For a list of the winners, use the link to Tuesday's News Now story.

Columnist notes CU advantages on Wisconsin Public Radio

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MADISON, Wis. (7/1/09)--Wisconsin Public Radio aired a show Tuesday morning in which a financial columnist for Yahoo! Finance expounded on the advantages of credit unions. Laura Rowley, Yahoo's money and happiness columnist and adjunct professor at Seton Hall University, discussed setting financial goals and protecting credit cards. She also told about credit unions and cited a recent survey noting several advantages: credit unions rates are better, their credit card fees are lower and their service is better. She appeared on the Joy Cardin's "On Your Money" show from 8 a.m. to 8:30 a.m. on Wisconsin Public Radio's Ideas Network.

Oregon Wash. CUs raise 879000 for CUs for Kids

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BEAVERTON, Ore. (7/1/09)--Credit unions in Oregon and Southwest Washington raised more than $879,000 during their 2008 campaign year for Credit Unions for Kids. It was the second highest one-year amount raised in the program's 23-year history for the two states. The funds complete the $1 million commitment credit unions made to Doernbecher Pediatric Neurosciences Research Progam at Oregon Health and Science University (OHSU). The funds will be used to recruit another researcher to the team, secure core equipment and activate a robust lab, which will be named for Credit Unions for Kids, in recognition of the donation. The funds also complete the $70,000 goal for two birth suites at the new Women's Birth Center at Sacred Heart Medical Center in Eugene, Ore., as well as a $40,000 goal for a Giraffe NICU Bed for specialized care for the smallest premature babies at Rogue Valley Medical Center in Medford, Ore. New fundraising goals include:
* Doernbecher Children's Hospital: A two-year $1 million goal to fund the professorship of Dr. Robert Steiner, who specializes in inborn errors of metabolism and osteogenesis imperfecta; * Sacred Heart Medical Center: A one-year $75,000 goal for a pediatric patient room and a labor and delivery triage room; and * Rogue Valley Medical Center: A two-year $45,000 goal for a HUGS Security System for the Pediatric Department to alert the nursing station whenever a pediatric patient is within a few feet of an exit door.

CU difference topic of Connecticut radio show

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MERIDEN, Conn. (7/1/09)--An hour-long program on WDRC-AM, Connecticut's leading talk radio station, recently highlighted the credit union difference and updated listeners on the state of the financial services industry. Tony Emerson, president/CEO of the Credit Union League of Connecticut, and Howard Pitkin, Connecticut commissioner of banking, answered questions from callers and provided an overview of key issues. Emerson focused on credit unions’ cooperative origins, the types of charters that provide membership accessibility and the benefits enabled by credit unions’ not-for-profit nature. Pitkin responded to a caller’s question by stating that credit unions can be considered generally healthier than banks. Other callers asked about the availability of student loans, whether joining a credit union carried any costs, whether credit unions offer business loans and mortgage refinancing. Host Phil Mikan ended the broadcast by sharing a caller’s story about how credit union employees redirected members from a branch that was closed after a tornado wiped out electrical power, to a nearby branch so they could make their transactions.

Gov. Doyle comes through for CUs--Wisconsin league

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MADISON, Wis. (7/1/09)--Wisconsin credit unions are celebrating Gov. Jim Doyle’s veto of several provisions contained in the state’s budget bill that would have negatively affected credit unions. “Credit unions saw all potentially damaging provisions that had been part of the $46 billion state budget removed this morning before it was signed into law,” said the Wisconsin Credit Union League Tuesday. Doyle vetoed:
* A provision that would have encouraged credit union to bank conversions. The provision was included at the request of the Wisconsin Bankers Association and would have provided a more direct route to conversion that would have not provided adequate notice and protection for members; * A limitation on credit union service organization (CUSO) lending authority. The provision would have prevented any Wisconsin CUSO from running a car sales or leasing operation; and * A requirement for credit unions to match data on delinquent taxpayers. The budget passed by the legislature had language requiring financial institutions to initiate a data match with the Department of Revenue to identify delinquent taxpayers.
The league attributed credit unions’ success to credit unions’ strong relationships with lawmakers. The budget process shows how tenuous the fate of credit unions can be, underscoring the need to have strong relationships with individuals from both parties in the state legislature, the Wisconsin league said. Many legislators stood up for credit unions during the budget process, either by signing a letter to Doyle urging his vetoes or by making critical contacts to get the job done, the league added. For a story on one of the provisions vetoed, see RELATED: “Wis. governor vetoes bill extending CU’s car sales.”

Hacker pleads guilty to stealing 2M card numbers

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SAN FRANCISCO (7/1/09)--A hacker pleaded guilty Monday in Pittsburgh to charges of hacking into computer systems belonging to other hackers and financial institutions--including a credit union. The hacker, Max Ray Vision, stole two million credit card numbers and ran up charges of more than $86 million. The breach affected Visa, MasterCard, American Express and Discover cardholders, according to the Pittsburgh Tribune-Review (June 29). Vision also hacked Pentagon FCU, Alexandria, Va. Thousands of financial institutions suffered losses due to the breach, Luke Dembosky, assistant U.S. attorney, told the newspaper. Vision pleaded guilty to two counts of wire fraud. He faces up to 60 years in prison and will be sentenced Oct. 20, the newspaper said. Vision and a partner, Christopher Aragon, created CardersMarket.com to sell and use stolen credit card information, the newspaper said. The website had 4,500 members worldwide at its peak. Aragon and Vision participated in hacking activities from 2005 until their arrests in 2007.

The Golden 1 honoring state IOUs

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SACRAMENTO, Calif. (7/1/09)--The Golden 1 CU intends to accept California state-issued IOUs from its members in response to the budget standoff between Gov. Arnold Schwarzenegger and state lawmakers. Lawmakers were meeting earlier this week to develop a budget that deals with a $24 billion funding shortfall (Sacramento Business Journal June 29). The $6.971 billion asset, Sacramento-based credit union has created state budget loans with a 0% annual percentage rate to aid state employees affected by the budget standoff. California could start issuing IOUs or registered warrants for many payments this week, John Chiang, state controller, told the newspaper. The Golden 1 has a tradition of helping communities in need, and the credit union will be there for its members if they need help during the state’s budget crisis, Teresa Halleck, Golden 1 President/CEO, told the paper.

Wis. governor vetoes bill extending CUs car sales

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MADISON, Wis. (7/1/09)--Wisconsin Gov. Jim Doyle Monday vetoed a measure contained in the state’s budget bill that would have allowed Educators CU in Racine to continue its auto sales business, which was under attack by state auto dealers. “Naturally, we’re disappointed with the veto,” Jim Henderson, Educators CU senior vice president told News Now. “We’re going to talk with local legislators to see if there are options for another bill.” The Wisconsin Credit Union League talked with Educators CU and the Wisconsin Department of Financial Institutions about pursuing this option. Doyle also vetoed several provisions that would have been harmful to credit unions. (See RELATED: "Gov. Doyle comes through for CUs, says Wisconsin league.") Educators CU had been ordered to divest its auto business in April 2010 by the Office of Credit Unions (OCU) after the Wisconsin Automobile and Truck Dealer Association complained to regulators. The OCU initially ruled that the State of Wisconsin Credit Union Statutes, Chapter 186, allows credit unions to own only car leasing services, not retail car sales. The credit union appealed the ruling and came to an agreement with the regulator, which allowed 18 months for the credit union to divest its auto sales business (News Now Dec. 3, 2008). The dealers association filed a court petition to overturn the agreement. The Wisconsin Joint Finance Committee included an amendment in the budget bill--which Doyle vetoed this week--that would have allowed the credit union to continue operating its used-car auto lot in Racine County if it passed. Local auto dealers don’t like Educators’ auto sales business because of the competition, Henderson said, but the credit union focuses on service rather than just selling a car. For instance, Educators tries to match its members with cars that are best for their needs, and will refer them to another dealership if the credit union can’t provide them with the right vehicle, Henderson said. “It’s satisfying a need more than selling,” he said. Educators established its auto dealership to provide car-buying resources and used-car sales to members and consumers in 2002. Educators has $1.1 billion in assets.

State regulator California CU assets up 3 for 1Q

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SACRAMENTO, Calif. (7/1/09)--Assets at California credit unions went up more than 3% in the first quarter of 2009, according to the California Department of Financial Institutions Quarterly Report. Credit union assets were at $76.1 billion--up 3.3% from the $73.6 billion reported as of March 31, 2008. Share drafts rose to $63.7 billion from $61.7 billion--a gain of 3.2%. Loans were down 1.4% from March 31, 2008, dropping to $51 billion from $51.7 billion. Members’ equity decreased 15.6%, falling to $6.4 billion from $7.6 billion. This in turn caused the capital-to-asset ratio to decrease to 8.47% from 10.36%. The allowance for loan losses was up 90.36%, rising to $1 billion from $537.9 million. The number of credit unions decreased to 185 from 196--a 5.6% drop. Net margin to average assets increased to 4.12% from 4.02%, while the provision for loan losses was up 71.2%, going to $385.5 million from $225.2 million. Net income went to a net loss of $553 million from a loss of $14.3 million. Delinquent loans were up 78.4%, rising to $946.9 million from $530.9 million.

CEO confidence does an about-face--SW Corporate

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DALLAS (7/1/09)--Southwest Corporate FCU’s most recent CU CEO Confidence Index did an about-face, rebounding 17 points from the all-time low recorded in the previous survey. The second quarter 2009 index registered 24.54 on a scale that ranges from -100 to +100. The jump to 24.54 compares with 7.90 in the first quarter of 2009. In the five-year history of the survey, CEO confidence reached its peak of 46.79 in the second quarter of 2004. The quarterly confidence index measures credit union CEOs’ feelings in six categories:
* Members’ current financial condition; * Members’ financial condition six months from now; * A credit union’s current financial condition; * A credit union’s financial condition six months from now; * Loan demand at a credit union in six months; and * Share deposit growth at a credit union in six months.
All six survey categories showed positive gains this quarter. The biggest was the 41-point vote of confidence that CEOs gave members’ current financial condition over last quarter. Their expectations for members’ financial condition six months from now, while somewhat tempered, still showed a 19-point quarterly increase. Credit unions were less optimistic about their own current financial condition, but did record marks 4.22 points above last quarter. Expectations for six months from now were better, reflecting a 22.78-point increase. “The survey mirrors other national and regional assessments,” said Brian Turner, Southwest Corporate’s director of advisory services. “Pockets of the country have experienced a decline in economic freefall, primarily as a result of stabilized home values, while others have seen slight improvement.” The improved outlook may be a “correction” of the dismal perception CEOs have had over the past few quarters as a result of declining margins, rising National Credit Union Shared Insurance Fund premiums and special assessment charges diluting their capitalization, Turner said. “So, whereas most of the CEOs renewed optimism comes from the hope that their institutions and the markets in general may have the worst behind them, let’s pray that it is not just post-traumatic stress syndrome,” Turner added. However, Turner noted signs that suggest the economy is beginning to improve, or at least not decline at the same rapid rate. “Consumers are paying off credit cards and deferring big ticket acquisitions to alleviate troublesome debt burdens,” he said. “This increases their disposable income, helps to save a few dollars along the way, and in turn, helps to stabilize credit union shares.” CEOs believe loan demand will improve in six months, as indicated by a 12.11-point increase in that metric, according to the survey. Expectations for share deposit growth in six months were up one point over last quarter’s results. “In southeast Texas, we’ve seen tremendous share growth the last 12 months,” said Jimmy Lackey, CEO of Education First FCU in Beaumont, Texas. “Loan demand has been very soft, so we’ve had to work to curb deposits. Delinquencies, while still low, are above our norm. Thankfully, we’re well-capitalized.” Lackey says the credit union will be better off in six months. “We’re not putting mortgages in the portfolio now, because rates below 5% are lower than we want to go,” he said. “Hopefully by the end of the year, the economy will improve, but it will probably be slower coming around this time.” “Regarding the members, I think people are doing what they should have been doing in the ’90s--saving and paying down debt,” Lackey added. “Loan demand will improve when consumers feel more confident about their jobs.” A record number of respondents--342--answered the survey, marking the highest level of participation in the five years the data has been gathered. The CU CEO Confidence Survey was sent to 1,344 credit union CEOs and generated a 25% response rate.

CU System briefs (06/30/2009)

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* ST. PAUL, Minn. (7/1/09)--The Minnesota Credit Union Network hosted a gathering for Minnesota Speaker of the House Margaret Anderson Kelliher as part of a two-day gathering of credit union professionals for legislative meetings. Kelliher, left, talked with Mark D. Cummins, president/CEO of the Minnesota Credit Union Network, at the event. She described the state’s budgeting process as a “budgeting tilt-a-whirl” amid financial instability and a $2.7 billion budget shortfall. After serving in the Minnesota House since 1998 and as speaker for three years, Kelliher recently said she is considering joining the 2010 governor’s race. Credit union representatives spoke with Kelliher about the housing market, mortgage mediation legislation and working with financially troubled members. (Photo provided by the Minnesota Credit Union Network) … * SOUTHFIELD, Mich. (7/1/09)--Three Michigan lawmakers addressed current issues facing credit unions at a recent Downriver Chapter legislative breakfast (Michigan Monitor June 29). State Sen. Ray Basham, standing, answered questions from a group of 30 credit union representatives that included, from left, CEO Phil Matous of Total Community CU and CEO Paul Assenmacher of Monroe County Community CU. State Rep. Deb Kennedy and Sue Trussell of State Sen. Bruce Patterson’s office also attended to answer questions about topics ranging from term limits to budget negotiations. (Photo provided by the Michigan Credit Union League) … * INDIANAPOLIS (7/1/09)--FORUM CU employees are focusing their 2009 fundraising efforts for the Dayspring homeless shelter on buying a 15-passenger van. Activities such as penny wars, $5 jeans days, bake sales and cookouts have already raised $13,000 of the van’s $20,000 cost. One popular fundraising option is a snack cart that is stocked with baked goods contributed by employees. The cart is then pushed around the credit union so employees can make a donation in exchange for a snack. FORUM CU has an ongoing relationship with Dayspring, which provides emergency shelter, clothing and three daily meals for homeless families with children. It serves central Indiana. (Photo provided by FORUM CU) …

Hood addresses Colorado CU Real Estate Network

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ALEXANDRIA, Va. (7/1/09)--Credit unions should seize the opportunity to engage in responsible mortgage lending, said National Credit Union Administration Vice Chairman Rodney Hood while addressing the Colorado Credit Union Real Estate Network (CUREN) in Denver Tuesday. “Although credit unions did not cause the mortgage debacle that has hurt the American economy, they certainly can be part of the solution,” Hood said. “Mortgage lending creates an excellent
National Credit Union Administration Vice Chairman Rodney Hood addressed the Colorado Credit Union Real Estate Network in Denver Tuesday. From left are: Tracy Yeager, Aventa CU mortgage director; Guy Goodenow, Public Service CU mortgage director; Hood; Stacy Campbell, Coors FCU vice president of mortgage lending; Chris Myklebust, Colorado state commissioner of financial services; Lonnie Burkholder, Air Academy FCU vice president of mortgage lending; Joe Dillon, CMG mortgage insurance senior vice president; Shannon Van Sickler, Bellco FCU director of mortgage lending; and Jon Paukovich, Ent FCU mortgage president. (Photo provided by the National Credit Union Administration)
opportunity for credit unions in the Rocky Mountain states to differentiate themselves from financial services providers.” Credit unions should pursue partnerships with results-oriented non-profit organizations that can provide resources for training outreach efforts--such as the Neighborhood Reinvestment Corp., the HOPE NOW Alliance and Operation Hope, he said. Hood also underscored the necessity for proactive risk strategies. From July 1, 2007 to June 30, 2009, financial institutions filed 62,084 Suspicious Activity Reports (SARs) regarding mortgage fraud. Credit unions filed 541 SARs during the same period--a 176% increase over the prior year. “It is also imperative to manage interest-rate risks because credit union shares grew 7.7% last year to $68.1 billion,” he said. The growth is concentrated in short-term certificates and is being used to fund long-term assets. Long-term assets to total assets are 23.2% and first mortgages comprise more than 30% of total loans, Hood said. Credit unions also have seen an uptick in real estate loan delinquencies to 119 basis points in 2008, from 67 basis points in 2007. First mortgage delinquencies jumped to 76 points from 28 points, Hood said. “We must focus efforts on helping refinance mortgages and use other tools to assist homeowners,” Hood added. “To the degree your balance sheets and risk tolerance levels allow, I encourage you to modify expensive mortgage loans and help homeowners keep their homes.”

Bellco U.S. file summary judgment briefs in UBIT case

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DENVER (6/30/09)--Bellco CU and the U.S. Department of Justice filed separate motions for summary judgment Friday in a U.S. District Court in Colorado in Bellco's challenge of the unrelated business income tax (UBIT) on three of its products. Bellco, a Greenwood Village, Colo.-based credit union, filed suit in May against the U.S. government over the Internal Revenue Service's interpretation of UBIT for three products--accidental death and disability insurance (AD&D), credit life and disability insurance, and financial services such as investments. The credit union is suing for a refund of $199,293 it paid in UBIT on the three products in 2000, 2001 and 2003, plus statutory interest. The judge may grant the summary judgment motions since both sides have indicated that there are no facts in dispute, which would bypass the need for a trial. The key legal issues discussed in the brief were whether sales of credit insurance and investment products were substantially related to the granting of loans and the promotion of thrift, and whether income from the sale of AD&D qualified as a royalty not subject to UBIT. The government's brief, filed by the U.S. Department of Justice, and Bellco's brief both center their arguments on whether the products in question were "substantially related" to the credit union's tax-exempt purposes of making loans at fair rates and promoting thrift. The government asserts that neither credit insurance nor financial services was substantially related to the exercise or performance of Bellco's tax-exempt purposes, and that the income from the sale of AD&D was not royalty income even though the credit union's insurance partner directly marketed and serviced the product. Both Bellco and the government had until last Friday to file their briefs moving for summary judgment. Each will have at least 10 days to respond to the other's brief.

CU System Briefs (06/29/2009)

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* LARGO, Md. (6/30/09)--Money One FCU has merged with $15 million asset KC Councils FCU of College Park, Md., to create a $97 million asset credit union with over 14,000 members. KC Councils' current location will serve as a branch of Money One. and the combined credit union is scheduled to open a new branch in Greenbelt, Md., this November (FOCUS Newsletter June 29) ... * PHILADELPHIA (6/30/09)--Christopher Larue, who was convicted of robbing the Warrington branch of Bristol, Pa.’s $80 million assets Bucks First FCU, as well as four other financial institutions, will serve more than 12 years in prison for bank robbery. Larue, who knocked off all five financial institutions within one month, also will pay more than $7,000 in restitution and will be subject to five years of supervised release once his sentence has been completed (US Fed News June 29) ... * PHILADELPHIA (6/30/09)--A convicted robber who collected over $58,000 in cash from Phillipsburg, N.J.-based Baker FCU, other financial institutions, and assorted convenience stores and gas stations during a seven-month thieving spree across the mid-Atlantic states will serve more than 11 years in a federal penitentiary. John Snuggs, 42, previously confessed to robbing 13 assorted businesses, one of which he robbed three times. Snuggs will pay nearly $60,000 in restitutions and special assessments (US Fed News ...

La Pine named League of SE CUs CEO

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TALLAHASSEE, Fla. (6/30/09)--Patrick La Pine, executive vice president of association services at the Michigan Credit Union League (MCUL), was named president/CEO of the newly created League of Southeastern Credit Unions, it was announced Monday. The League of Southeastern Credit Unions comprises the Florida and Alabama credit union leagues. La Pine will replace retiring CEOs Guy Hood of the Florida league and Gary Wolter of the Alabama league. Florida and Alabama league members voted in March to combine into a single entity representing 332 credit unions with combined total assets of $55 billion (News Now March 6). While executive vice president of association services at the Michigan league, La Pine managed the MCUL governmental affairs, education, public affairs, information services and membership relations functions. La Pine also serves as executive director of the CURE Defense Fund, which was formed by MCUL to engage in ongoing extraordinary defense strategies to promote the credit union movement in legal and legislative arenas and advocacy activities. While La Pine “has big shoes to fill,” it was clear that he was the right candidate to lead the League of Southeastern Credit Unions, according to Mary Wood, league executive search committee chair. “He has a proven track record and is an experienced credit union leader,” Wood added.

Pa. governor recommends CUs at budget conference

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HARRISBURG, Pa. (6/30/09)--State workers should seek out programs offered by credit unions to help their members if the state budget doesn’t pass, said Pennsylvania Gov. Edward Rendell during a press conference last week (Life is a Highway June 26). State workers will not receive paychecks if the state’s budget does not pass by Wednesday. Several Pennsylvania credit unions have said they will help members affected by the potential budget impasse. Pennsylvania State Employees CU (PSECU) has created a special loan program for its members who are state workers. Employees who stay on the job, but don't receive a paycheck can apply for a 0% Annual Percentage Rate (APR) loan (Life is a Highway May 29). For members who meet the credit criteria, the 0% rate will be available for up to 60 days after the governor signs the new budget into law. After 60 days, the loan will begin accruing interest at 3.9% APR until paid in full. Members participating in the loan program will have the option of borrowing up to $1,000 per pay period. Members 1st FCU, Mechanicsburg, Pa., will offer affected members the option to either “skip” a payment on any existing loans at no charge, or take advantage of a special 3.9% APR line of credit if they meet credit approval criteria (Life is a Highway June 8). The rate will be effective through July 31, and the first payment will be deferred until August. Qualifying members can borrow up to the amount of their normal paycheck, the credit union told Life is a Highway.

Mica touts CUs credit cards on Fox

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NEW YORK (6/30/09)--Credit Union National Association President/CEO Dan Mica emphasized the benefits of credit union credit cards during Fox Business Network’s “Money for Breakfast” program, which aired Saturday. Mica and Adam Levin of credit.com were featured on the show to provide insights on recently passed credit card legislation, The Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009. Mica noted that the legislation would bring change to the credit card industry--including lower fees. Credit union credit cards are the best deal for consumers, according to a Harvard University study, Mica said. Credit union credit cards offer lower fees and better service for their members. “[Credit cards] can be done in a way to give consumers a break,” Mica said. “The best deal is with a credit union. We’ve proven you can do it without gouging the customer--our member.” To see a video of Mica speaking on Fox, use the link.

Rockefeller foundation deposits 250000 in CDCU

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COLLEGE STATION, Ark. (6/30/09)--The Winthrop Rockefeller Foundation will make a $250,000 deposit into $69 million-asset Hope Community CU, Jackson, Miss. (PR Newswire June 29). The gift is part of the foundation’s ongoing effort to help Arkansas families move from poverty to prosperity. HOPE and its nonprofit sponsor, Enterprise Corporation of the Delta (ECD), have offered affordable financial services and technical assistance to Arkansas’ working families, homeowners, entrepreneurs and small businesses for 15 years. The deposit is part of the Winthrop Rockefeller Foundation’s “Moving the Needle” strategy aimed at closing the educational and economic gaps that leave many Arkansas families in persistent poverty, according to President/CEO Sherece West. “The board is committed to moving low-income Arkansans from poverty to prosperity and knows that HOPE will put our money to work supporting affordable housing, business development and other services in distressed areas,” West said. “At the same time, our funds are safe and earning market interest rates.” HOPE plans to use the deposit to boost its ability to offer commercial loans, mortgages and consumer financial services to low-wealth people and communities. West said the deposit reflects a trend among both individuals and institutions to invest in socially responsible financial institutions that combine financial returns with community development. HOPE CEO Bill Bynum said he hopes the foundation’s deposit will inspire others to invest in ways that result in stronger communities.

Mid-Atlantic Corporate elects board

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MIDDLETOWN, Pa. (6/30/09)--Richard C. Burtnett of Pennsylvania Grange FCU, Camp Hill, Pa., was elected chairman of the board at Mid-Atlantic Corporate FCU’s annual meeting on June 19. Other officers are Vice Chair Michael P. Pastirik, United Community FCU, West Mifflin, Pa.; Treasurer Joan M. Moran, Department of Labor FCU, Washington, D.C.; and Secretary Brian J. Vittek, Destinations CU, Baltimore, Md. (Maryland and District of Columbia Credit Union Association’s FOCUS Newsletter June 29). Re-elected to three-year board terms were Burtnett; Dennis Flickinger, First Capital FCU, York, Pa; and J. Charles Forney, Members 1st FCU, Mechanicsburg, Pa. Joining Flickinger on the Supervisory Committee will be Jerry King, DEXSTRA FCU, Wilmington, Del., and James F. McCaw, Viriva Community CU, Philadelphia.

Three Columbia CU members win loan payments for a year

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VANCOUVER, Wash. (6/30/09)--Columbia CU’s “Payment Free Promotion” will give three borrowers a year’s worth of mortgage payments, home equity loan payments or auto loan payments (BusinessWire June 26). To qualify for one of the promotion’s three grand prizes, borrowers must take out a mortgage, home equity loan or auto loan by Nov. 30. Borrowers who opt to make payments directly from a Columbia CU checking account are automatically entered in the contest, which covers 12 months of payments on the corresponding loan. The contest sends the message that $770 million-asset Columbia CU “has money to lend and at today’s low rates, really, everyone’s a winner,” according to Colleen Boccia, senior vice president of marketing. Loan applications will be accepted at the credit union’s 12 Clark County branches or online. Information and official rules are available at Columbia CU’s Web microsite for the promotion, www.WinLoanPayments.com.

SE CUNA Management School ditches ropes for folks

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ATHENS, Ga. (6/29/09)--This year, third-year students at Southeast CUNA Management School in Athens, Ga., decided to “ditch the ropes to help folks” by forgoing a planned ropes course and participating in a community service project (Athens-Banner Herald June 25). The class normally participates in a ropes course, and while the students like the ropes course, this year they wanted to give back, Jennifer Green, assistant vice president of the Louisiana Credit Union League, told News Now. The students, who gathered in Athens, Ga., for CUNA Management school, worked to promote a credit-repair class to reach Athens residents. The CreditAbility class was held June 18, with 30 credit union professionals helping 29 residents. The professionals taught the basics of credit and budgeting, and met privately to review credit reports and discuss financial concerns with the residents. Melanie Lankau, a University of Georgia professor and adviser for Southeast CUNA Management School, helped organize the project, Green said. The group’s efforts also were noted by Cathi Watkins of the Athens Banner-Herald, who wrote a column last week thanking the students for their help. “We deeply appreciate the outreach to our community from this group, which convenes here from across the Southeast,” Watkins wrote. “The endeavor was a gift to the Athens community.”

Florida league names Maxwell Herring winners

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ORLANDO, Fla. (6/29/09)--Winners of the 2009 statewide competition in the Dora Maxwell Award for Social Responsibility and the Louise Herring Award for Philosophy in Action were recognized at the 75th Annual Florida Credit Union League Convention & Exposition held June 17-20 in Orlando. Each credit union recognized as a first place, second place, or honorable mention winner was awarded a plaque at the convention’s general session June 19. The Dora Maxwell Social Responsibility Award is given to credit unions for their social responsibility projects within the community. First-place winners were:
* PBC CU, West Palm Beach, in the $50 million to $100 million asset category; * Insight Financial CU, Orlando, $200 million to $500 million; and * Pen Air FCU, Pensacola, $500 million or more.
The Louise Herring Award for Philosophy in Action is given to a credit union for its practical application of credit union philosophy within the actual operation of the credit union. First-place winners were:
* Gold Coast FCU, West Palm Beach, in the $50 million to 250 million in asset category; and * CFE FCU, Tampa, $250 million or more.

CU System briefs (06/26/2009)

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* WASHINGTON (6/29/09)--Washington, D.C., Mayor Adrian Fenty proclaimed June 18 as District Government Employees FCU (DGEFCU) Day, calling upon all city residents to join him in commending credit unions for helping to enhance the quality of life of others. DGEFCU held its 55th annual membership meeting on the same day. “Credit unions pool personal resources and leadership abilities for the good of the cooperative, encourage a regular habit of saving and foster the desire to repay loans so members may have access to credit when needed,” according to the proclamation. Pictured are DGEFCU Board Chair Joann Clark (left) and DGEFCU President/CEO Carla Decker with the mayor’s proclamation plaque. DGEFCU has more than $40 million in assets. (Photo provided by District Government Employees FCU) ... * NEW YORK (6/29/09)--William Spearman, president/CEO of Mid-Hudson Valley FCU in Kingston, N.Y., was elected treasurer of the Credit Union Association of New York’s board of directors (Poughkeepsie Journal June 25). He was elected during the association’s annual meeting in Albany. Spearman has been president/CEO of Mid-Hudson Valley FCU for 13 years. Mid-Hudson Valley FCU has $611 million in assets ...

Several CUs report more scams

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MADISON, Wis. (6/29/09)--Credit unions in Maine and Texas reported that recent scams have targeted their members. The scams have involved:
* Brewer (Maine) FCU, which is warning its members about attempts to fleece their accounts. Scam artists are sending checks to credit union members for items bought on Craigslist and other Internet sites that are “in excess of the purchase price with a request to return the excess,” said a Brewer FCU press release. Or, scammers send checks to members and ask that the checks be cashed for the scammers. “Inevitably these checks are returned either for insufficient funds or because they are fraudulent altogether,” the $39.1 million-asset credit union said (Bangor Daily News June 23). * The $6.2 million-asset, Sugar Land (Texas) Employees FCU, whose members have been targeted by text messages sent by scammers posing as the credit union. The messages claim that members’ debit cards had to be deactivated for security reasons, and that members should call an 800 number and give out personal information to reactivate their cards, according to the Texas attorney general’s office (The Fort Worth Star-Telegram June 21). * New Dimensions FCU, Waterville, Maine, which is advising members to ignore pre-recorded phone calls that tells members--for instance--that their Visa card has been restricted for supermarket use only, and that they must call a specific phone number to contact Visa security and a press “1” to speak to someone. The $5.8 million-asset credit union and local police are advising members that the calls are a scam and to ignore them.

Mission SF FCU helps teens avoid economic pitfalls

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SAN FRANCISCO (6/29/09)--A team of youth who reached out to more than 500 young San Franciscans to teach them about financial literacy is passing its responsibilities to a new team of youth charged with teaching their peers about money. The founders of the Youth Trainers for Economic Power (YTEP) prepared its new team by providing tips and reflections on their experiences with YTEP at a June 10 event in San Francisco. YTEP was founded by eight youth three years ago in connection with the Mission SF Community Financial Center, the nonprofit affiliate of Mission SF FCU in San Francisco. “Although we are moving on, we feel content that our work and efforts will continue to be carried out by a new generation of YTEP leaders,” said Glenda Flores, 18, YTEP founder. “The knowledge and experience we have learned during our participation, we will take with us and continue to create change in our community, our nation and the world.” During their tenure, YTEP founders developed a youth-friendly financial curriculum relevant to youth from urban low-income and immigrant families. They also developed an evaluation system to test the curriculum, shot videos to bring the concepts of economics and investment to life, and designed visuals. YTEP hopes to continue expanding, according to Margaret Libby, Mission SF Community Financial Center executive director. “Our vision with YTEP is to prepare youth to navigate the financial system as empowered consumers and to inspire them to be community leaders and advocates for improved financial services and a more equitable financial system overall,” she said. “We are growing the program to reach more youth in San Francisco, as well as other places, in particular communities like ours with a high concentration of fringe outlets.” One in two African-Americans and Latinos in San Francisco are unbanked and use high-cost fringe outlets, such as payday lenders, for transactions--costing $2,000 annually. YTEP aims to help low-income youth and youth of color who will be targets of predatory financial outlets when they turn 18, the center said. Mission SF Community Financial Center operates youth employment, leadership and financial training programs. It receives support from Patelco CU, San Francisco, the RMJ Foundation and others.

Arizona State CU to provide emergency assistance to workers

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PHOENIX (6/29/09)--Arizona State CU will offer emergency financial assistance to state and university employees who could be without paychecks if the state budget is not resolved. This is the second year in row that the credit union has prepared to offer emergency assistance (PR Newswire June 25). “If the Arizona state budget is not put in place in time, Arizona State CU is prepared to offer state employees emergency financial assistance,” said David E. Doss, president/CEO. “We will offer alternative products and services to help members who may not be compensated in the coming week.” The first type of assistance the credit union will offer is an extended line of credit on checking accounts that would normally have payroll direct deposit from the state. For members with these accounts, the credit union will automatically provide a $1,500 line of credit with no fees or interest. The second option, available for employees who may need more help, is an emergency payroll loan with a low-interest rate. Also, a skip-a-payment program will be offered to state employees with a loan provided through the credit union. “Arizona State CU was founded in 1951 to serve Arizona state employees,” Doss said. “Although our eligibility for membership has greatly increased, we still maintain a close relationship with state employees to ensure that they are equipped with solutions tailored to their needs. The benefit of being a member-owned financial cooperative is that we are flexible enough to move quickly so that we can provide assistance in a very meaningful way.” Arizona State CU, based in Phoenix, has $1.268 billion in assets.

ACUC attendees sign True Commitment to CUs

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BOSTON (6/29/09)–Attendees of the 2009 America’s Credit Union Conference (ACUC) in Boston pledged their “True Commitment” to credit unions by adding their signature to a signature wall in the ACUC exhibit hall.
Click to view larger image NCUF Executive Director Steve Delfin (center) accepted a $2,500 check representing the first 500 signatures on CUNA's Mutual Group's "Sign of Commitment" wall at the 2009 ACUC presented by the Credit Union National Association (CUNA). Presenting the check were Don Davidson (left), CUNA Mutual vice president of system relations--sales, and Chris Roe (right), CUNA Mutual senior vice president of corporate and legislative affairs. Roe also serves as a volunteer board member for NCUF. (Photo provided by the National Credit Union Foundation)
With each signature, they also raised money for the National Credit Union Foundation (NCUF). CUNA Mutual Group contributed $5 to NCUF for every ACUC attendee who demonstrated a commitment to credit unions by adding their signature to a 5’-by-8’ signature wall displayed at CUNA Mutual’s booth in the ACUC exhibit hall. Everyone who added their name to the Sign of Commitment was handed a wristband to wear as a symbol of their commitment to the credit union movement. “This challenging economic environment is the perfect time to remind ourselves of the cooperative character that binds us,” said Chris Roe, CUNA Mutual senior vice president of corporate and legislative affairs, who also serves as a volunteer board member for NCUF. “The Sign of Commitment is one way CUNA Mutual continues to show our support and reinforce the movement’s philosophy of ‘people helping people.’” “On behalf of the entire NCUF Board, we greatly appreciate CUNA Mutual’s ongoing commitment to the credit union movement and to the foundation,” said NCUF Chairman Allan Kemp McMorris. CUNA Mutual’s additional support will enable NCUF to sustain and grow the Development Education (DE) program, which helps credit unions leverage their commitment to cooperative principles as a competitive advantage in the financial marketplace. Nearly 900 credit union professionals and volunteers have undergone DE training and earned the designation of Credit Union Development Educator. Throughout 2009, the centennial year of the first credit union law, CUNA Mutual has been taking the Sign of Commitment to major credit union events as an opportunity to honor credit unions and their members. The signature wall was first displayed at CUNA’s Governmental Affairs Conference in Washington, D.C. During the GAC, 600 credit union advocates signed their commitment and raised $3,000 for NCUF (News Now Feb. 25).

MDDCCUA board reorganizes elects new chair

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BALTIMORE (6/29/09)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) elected Bert Hash, president/CEO of MECU in Baltimore, as its chairman during a reorganization meeting immediately following the association’s annual business meeting June 12. Other officers elected include:
* Vice Chairman: Miquel Boluda, president/CEO, PAHO/WHO FCU, Washington, D.C.; * Secretary: Rod Staatz, president/CEO, SECU of Maryland, Linthicum; and * Treasurer: Chris Conway, president/CEO, Educational Systems FCU, Greenbelt, Md.
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. Other directors are: Joe Sparacino, chairman of Montgomery County EFCU, Germantown; and Jim Norris, president/CEO of AFL-CIO FCU, Washington, D.C. The board also reorganized the association’s committee structure to better match its strategic plan. Staatz will oversee the advocacy committee; Debbie Connors, president/CEO of Money One FCU, Largo, Md., will oversee the Community Outreach Committee; and Joan Moran, president/CEO of the Department of Labor FCU, Merrifield, Va., will chair Credit Union Services Inc.

FCUL honors CU volunteer professional of year

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ORLANDO, Fla. (6/29/09)--The Florida Credit Union League (FCUL) awarded its 2009 credit union Volunteer and Professional of the Year during the league’s 75th annual convention June 17-20 in Orlando,
Fla. FCUL awarded the late John A. Davis Jr., former president/CEO of Pen Air FCU, Pensacola, as the 2009 Professional of the Year. Davis died in October after serving as Pen Air FCU president/CEO for more than 10 years. He also was active in FCUL, service as vice chairman of the FCUL Service Group Board of Directors. H.C. “Chris” Brooks of Gulf Winds CU, Pensacola, received the Volunteer of the Year award. He has been a member of Gulf Winds since 1959 and served as president/CEO of the credit union for 10 years. He also is an active member of the Northwest Chapter of Credit Unions, where he served as president for three years. Brooks served as director of the FCUL board for nine years and treasurer for six years. He has volunteered on the Gulf Winds board for 30 years. Both recipients were chosen by an FCUL-appointed committee based on his or her record of productive service to their credit union, chapter, the Florida league, the Credit Union National Association, or service to the credit union movement of special Florida significant, FCUL said.

Speaker CUs need strategy for a new world

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BOSTON (6/26/09)--Credit unions should consistently focus on their relationships with members, take advantage of competitors' weaknesses, and not be shy about investing in technology. Mark
Credit unions should consistently focus on their relationships with members, take advantage of competitors’ weaknesses, and not be shy about investing in technology, Mark Sievewright, senior vice president, Fiserv Inc., Brookfield, Wis., told America's Credit Union Conference & Expo Wednesday in Boston. (Photo provided by CUNA)
Sievewright, senior vice president, Fiserv Inc., Brookfield, Wis., delivered that message Wednesday at America’s Credit Union Conference & Expo in Boston. Sievewright shared six strategic themes changing the movement today:
* Decreasing financial performance is prompting efforts to spur growth and restore confidence in future returns. “Net interest margins have been declining since 2004, and the credit union movement won't see a 1% return on assets anytime soon,” he said. Most credit unions, he maintains, are moving to a 12- to 18-month planning schedule versus a five-year schedule. * Market consolidation, product commoditization, and more demanding consumers are changing the rules of how credit unions do business. Thousands of banks and credit unions are competing for the same business. And in consumers' minds, financial institutions are one of the least differentiated brands in the U.S., according to a recent Fifth Third Bank study. Consumers don't trust banks today, Sievewright claims. “This is a huge opportunity for credit unions to win market share. You may not get another opportunity like this,” he said. * Redefining existing business models is essential to the long-term sustainability of the industry and movement. “We're at a tipping point in the movement,” he declared. Credit unions’ net interest margins remain lower than operating expense ratios, and non-interest income has become more important. Consumers are shifting their behavior to saving, and financial firms are trying to capitalize on that mentality. Credit unions to brainstorm with staff for a suite of revenue ideas, citing examples such as gift cards, identity theft protection, and account packages, he said. * Delivery channel changes will be profound. Branches won't go away, he said, but there will be slower growth in new branches. His projected annual growth per delivery channel over the next three years: online, 27.2%; telephone, 7.1%; branch, 1.4%; and ATM, 0.5%. “In what channel would you put your money?” he asked. * Demographic shifts will redefine service and channel delivery. Recent Labor Department statistics show today’s consumers will have held six jobs by age 30. Many, in fact, will hold three jobs at once. These shifts will affect how you do business, in terms of both products and their delivery. * Regulatory changes will redefine our business and its revenue and profits. Credit unions can expect more regulatory burden, he predicted. While safety and soundness are essential, credit unions need to get involved in advocacy. A simple roadmap to a real relationship with members is: trust, plus experience, plus knowledge, plus advocacy, he said.
The CUNA-sponsored ACUC conference ended Wednesday.

Columbia CU earns second LEED certification

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VANCOUVER, Wash. (6/26/09)--Columbia CU, Vancouver, Wash., received the Leadership in Energy and Environmental Design (LEED) Gold Certification by the U.S. Green Building Council for its Grand Central branch. This is the second LEED certification Columbia CU has received--its Washougal branch was awarded gold certification earlier this year. To earn LEED certification, a building must meet certain criteria. Columbia applied for and earned 42 points toward gold certification for site selection, energy use, lighting, water and material use, waste management, air quality and innovation in design. “Our Grand Central branch uses about half the gas and electricity and 40% less water on average than our comparable branches,” said Columbia CU interim CEO Steve Kenny. The credit union also reduced construction waste by 75%. “Throughout the construction process, work crews carefully separated scrap metal, wood and concrete for recycling,” Kenny said. “This prevented excess building materials from going to landfills.” Notable green features at the branch include an omni-directional skylight, a cistern for rainwater collection, porous concrete, Forest Stewardship Council-certified lumber, corn fiber work station panels and guest chairs made from recycled seat belts. Columbia CU has $770 billion in assets. The credit union is one of several nationwide that have worked to become more environmentally friendly. News Now reported May 7 that Redwood CU, Santa Rosa, Calif., had achieved LEED status in its Santa Rosa branch and administrative building. Michigan State University FCU, East Lansing, Mich., also embraced green concepts when it built its headquarters building, and is aiming to receive LEED gold certification this year (News Now May 7).

Relevance key to social networking

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MADISON, Wis. (6/26/09)--Credit unions interested in using social networking to reach their members and communities must ensure that their social networks are relevant, according to a social media expert. “Communicate specifically to a demographic,” advised Ryan Brown, CEO of MindBlazer in Charlotte, N.C. MindBlazer is an education-based marketing and technology company that provides digital media to help financial institutions communicate. The most successful way to network socially is to create a Facebook page, for instance, that is event-driven, offers financial education, and has specific calls-to-action, Brown told News Now. When Twittering, Brown suggested credit unions come up with a list of 40 “tweets”--such as 40 tips to stretch a dollar. After the tweets are posted, the credit union can invite followers to post suggestions they have to save money. “Go beyond [twittering about] offering great rates on loans,” Brown said. “Be practical.” Being relevant can help credit unions avoid backlash on their social networking spaces. Examples of “backlash” can include a small Facebook friend or Twitter follower list, or one made up solely of employees--it doesn’t bring credibility to a site and takes away value instead of adding it, Brown said. For credit unions using YouTube, backlash could consist of negative comments--or indirect backlash--no comments at all. Credit unions engaged in social media should also integrate videos in their online space and blend them with other media--such as pictures and text. Video is the highest engaged media being used, Brown added. Using sites like Facebook and MySpace may trigger worries about security. While information on Facebook or MySpace can “fall into the wrong hands,” the benefits outweighing the risks are tremendous, Brown said. “It’s another channel,” he said. “Information technology departments need to embrace it. It’s not a distraction; it’s another business tool companies are using.” Credit unions concerned about employees posting personal info on their profiles that could reflect poorly on the credit union could create online policies about what information they should share. Or, employees could create two profiles--one personal and one for business, Brown said. Some financial institutions have began to offer their members the opportunity to bank through Facebook--using applications such as Fiserv’s MyMoney or MShift. The banking applications are still catching on, Brown said. Credit unions need to give their members a reason to use Facebook to do their online banking. “Using online banking [through Facebook] has to be more than just convenience ... it’s not a huge pain to go to a credit union’s website,” Brown said.

CU System briefs (06/25/2009)

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* MIDDLETOWN, Pa. (6/26/09)--Mid-Atlantic Corporate FCU announced the retirement of Brad Stewart, senior vice president and chief investment officer. Stewart will retire July 31 but will continue to write his economic column “FYI. Stewart joined Mid-Atlantic Corporate in 1992 as senior investment officer and manager of the corporate’s Investment department. Mid-Atlantic Corporate FCU is based in Middletown, Pa ... * CHICAGO (6/26/09)--American Airlines FCU will celebrate the grand opening of its Chicago O’Hare Cargo branch at Chicago O’Hare International Airport today. The credit union will offer specials on share certificates and auto loans during the celebration. The O’Hare Cargo branch will be open Monday through Saturday during select hours. American Airlines FCU has more than $5 billion in assets ... * WEST LAFAYETTE, Ind. (6/26/09)--Purdue Employees FCU (PEFCU) hosted a private golf outing with NFL New Orleans Saints Quarterback Drew Brees Monday to raise $50,000 for the Purdue Athletes Life Success (PALS) program at Purdue University.
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Brees, a PEFCU member since 1997, has served as PEFCU spokesman since 2000. PEFCU also awarded four PALS campers with bicycles at Purdue University. Campers (left) MacKenzie Donahue, Devon Siple, Vanessa Gonzalez and Jalen Pope received bikes from (back row, from left) Brees and PEFCU CEO Bob Falk. PEFCU has $529 million in assets. (Photo provided by Purdue Employees FCU) ... * MEDFORD, Ore. (6/26/09)--Rogue FCU, Medford, Ore., plans to promote a free foreclosure prevention and assistance program--Building Hope--statewide. The program offers three classes on budgeting, preventing foreclosure and consumer rights. Credit counseling also will be discussed during the classes (McClatchy-Tribune Regional News June 23). Building Hope was offered in Jackson County in March and was expanded to two other counties in May. Building Hope will be offered in Bend, Eugene and Portland by mid-July. More than 450 consumers have participated in the program, Rogue said. Rogue has $416 million in assets ... * SANTA ROSA, Calif. (6/26/09)--Redwood CU (RCU), Santa Rosa, Calif., will offer a Financial Literacy Academy Aug. 3-6 for students entering into 11th or 12th grades at any Sonoma County high school. RCU is partnering with the Santa Rosa school district and the Chamber of Commerce to offer the 16-hour academy. The credit union will use the High School Financial Planning Program created by the National Endowment for Financial Education. RCU has $1.8 billion in assets ...

Newport News FCU launches VIDA program

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RICHMOND, Va. (6/26/09)--Kendra Square-Jarman and Patricia Weekes are among 21 new homeowners in Virginia thanks to the Virginia Individual Accounts (VIDA) program, administered by Newport News (Va.) FCU and officials from the Virginia Department of Housing and Community Development. VIDA is a matched-savings program providing participants with a $1 to $2 savings match--up to $4,000--toward a down payment on a new home, education costs or to start a small business. Newport News FCU was the first Virginia credit union to offer the program in February 2008. Since then, the credit union has enrolled 10 savers. Weekes and Jarman each saved more than $4,000, which was matched with $8,000 through VIDA. Currently, 228 individuals statewide are participating in VIDA. About 73 have graduated so far--63% of which purchased homes. VIDA requires participants to undergo asset-specific training and complete financial training courses. Participants have two years after opening an account to complete training and save for their goal. Eligible individuals must be a U.S. citizens or legal aliens, be employed, have a dependent child age 18 or younger living in their home and meet household income requirements.

Wisconsin league helps teachers with fin ed

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PEWAUKEE, Wis. (6/26/09)--With financial pressures bearing down on families statewide, Wisconsin teachers are preparing young people for their financial futures by attending a series of workshops starting this week that will help the educators improve classroom instruction on money matters. Wisconsin credit unions are lending financial support. The three training sessions--one this week and two others July 13-17 and August 3-7--are called the National Institute of Financial and Economic Literacy. The sessions offer the latest insights from professionals experienced in the financial industry and make lesson plans, curricula, teaching strategies and other materials available for classroom use. This is the ninth year credit unions are sponsoring local teachers’ attendance, with additional financial support for the institute from the Wisconsin Credit Union League. “Our country’s economic challenges provide an opportunity for teachers to talk about the importance of living within one’s means, saving regularly, handling credit responsibly and being more savvy overall when it comes to money management,” said league President/CEO Brett Thompson. “The institute offers tools to cultivate young savers who can not only weather economic storms but get a great start to get ahead financially.” The institute is organized by the Jump$tart Coalition for Personal Financial Literacy--a consortium of public and private organizations working together to improve Wisconsin’s financial literacy. Although there is no law requiring personal finance to be taught in schools, many teachers do so using state standards as a guide because, too often, “money basics” aren’t being taught at home; studies have shown that less than 25% of parents discuss money matters with their children. In addition to supporting the institute, Wisconsin credit unions supervise 83 youth-run credit union branches inside Wisconsin schools, an effort which teaches young people the habit of saving. Credit unions also provide classroom curricula, internships and classroom speakers and sponsor local events that teach responsible financial decision-making. Credit unions support financial education as part of their REAL Solutions initiative--an effort that strives to help people save and build wealth.

Creative class could be new niche for CUs

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MADISON, Wis. (6/26/09)--Credit unions are well-suited to provide financial services to businesses that work in the arts, design, marketing, media and performing arts fields--known as the “creative class,” according to the Ohio Credit Union League. The nation’s small business population yields marketplace niches, which present opportunities for credit unions to provide tailored products and services for the organizations and their employees, the league said (eLumination June 24). Credit unions can provide better-priced, tailored solutions than their competitors for business checking, real estate loans, employer retirement plans, revolving lines of credit and other services, the league said. The workers of the creative class have financial service needs like everyone else. They need savings, loans, checking, credit and debit card services, ATM access, online banking, bill payment and more. Credit unions also should consider the unique needs of artists, designers, actors, and musicians who may not have steady work. To customize products and services to better serve the creative class, credit unions should consider flexible loan terms, special saving programs to prepare for tighter financial times, and loan programs to weather employment droughts, the league said. Credit unions should look for niche opportunities in their local communities that they can capitalize on for future growth. It could be a sector already served that could be enhanced, or a new discovery, the league added. Often, small businesses are considered a niche market. There were an estimated 27.2 million small businesses in the U.S. that employ about half of the nation’s private workforce, as of September 2008, according to the U.S. Small Business Administration. More than half of all credit union business loans were for $50,000 or less, according to a U.S. Treasury Department study.

Mecham Grassroots activism a hallmark of CU industry

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BOSTON (6/25/09)--Calling it a privilege to meet in the home city of Edward A. Filene, the father of the U.S. credit union movement, Credit Union National Association (CUNA) Chairman Kris Mecham noted that the area is rich in heritage and tradition. One such tradition: Credit unions’ history of grassroots activism began there, he told attendees at America’s Credit Union Conference and Expo.
Click to view larger image The credit union tradition of grassroots advocacy isn't new, Credit Union National Association Chairman Kris Mecham, president/CEO of Deseret First CU, Salt Lake City, told America's Credit Union Conference and Expo attendees Wednesday. Credit unions used grassroots advocacy for the first time when they mobilized a national effort to create a federal Credit Union Act in 1934. (Photo provided by CUNA)
The CUNA-sponsored conference began Sunday in Boston and ended Wednesday. “Grassroots activism is the roots and hallmark of our industry,” Mecham, president/CEO of Deseret First CU, Salt Lake City, said. U.S. credit unions’ first grassroots operation came when Filene and Roy F. Bergengren, on the heels of the Great Depression, created a network of coordinated credit unions to advocate a federal credit union act, he said. “They identified people who became advocates for the system. The first time the credit union movement engaged in a national mobilized movement was to get the Credit Union Act enacted.” President Franklin D. Roosevelt signed the act on June 26, 1934. He told of past fights with banks and grassroots efforts from the 1970s over share drafts to the 1980s when credit unions saw their independent regulator threatened and went to Washington, “standing 15,000 strong on the Mall.” They produced 6.5 million letters and petitions to Congress. And grassroots efforts hit a crescendo in the 1990s that brought about the Credit Union Membership Access Act (H.R. 1151). “Ours was a grassroots of our membership; banks’ was a grassroots of employees,” Mecham noted. Grassroots also helped when credit unions needed Congress to act on corporate credit union stabilization. This time, 30,000 e-mails helped that effort, he noted. Mecham outlined recent successes—getting stabilization expensing spread out over time, the elimination of cramdown provisions in legislation, achieving a place at the table of Senate leadership, removal of interchange fee issues from legislation, the first defeat of the Internal Revenue Service’s unrelated business income tax, and the increased national visibility of credit unions. “Our movement is poised for powerful, powerful opportunity,” Mecham said. “Don’t forget advocacy. Attend the Government Affairs Conference. Hike the Hill. Contact your legislators and regulators when called to action. And remember the words of Alphonse Desjardins (founder of Canada’s credit union movement), who said, ‘Let us never forget that the credit union above all else is an association of people, not dollars.”

CU System briefs (06/24/2009)

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* BOSTON (6/25/09)--World Council of Credit Unions Chairman Melvin
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Edwards, right, of the Caribbean Confederation of Credit Unions, presents the Credit Union National Association (CUNA) a vase in celebration of the 100th anniversary of credit unions in the U.S. Accepting is CUNA Chairman Kris Mecham, president/CEO of Deseret First CU, Salt Lake City. The presentation was made Tuesday during America’s Credit Union Conference and Expo in Boston. Mecham also presented a globe memento to CUNA on behalf of the Caribbean Confederation. CUNA President/CEO Dan Mica accepted that award. (Photo provided by CUNA) … * HONOLULU (6/25/09)--Paul Francis White, Sr., former chairman of the Hawaii Credit Union League board of directors, died June 17 at the age of 87. Originally from Dayton, Ohio, White was a U.S. Army Air Corp veteran where he was a flight instructor and captain with Hawaiian Airlines for 35 years. White was past president of Hawaiian Airlines FCU, Honolulu, and served on the Oahu Aloha Chapter board and the Hawaii board--where he was chairman from 1956-1957 and in 1960. During White’s first tenure as chairman, the Hawaii league launched a building project funded by voluntary contributions of $1 toward the purchase of bricks for the building. Under White’s second tenure, the league purchased the land on which the league building still stands ...

WOCCU CUNA collaborate to co-host conference

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WOCCU President/CEO Pete Crear takes the podium at America's Credit Union Conference just before he and CUNA President/CEO Dan Mica announced Tuesday that WOCCU and CUNA will combine their annual conferences, the World Credit Union Conference and America's Credit Union Conference, into a single conference for 2010. Next year's joint conference--The 1 Credit Union Conference--will be in Las Vegas, July 11-14, 2010. (Photo provided by World Council of Credit Unions)
MADISON, Wis. (6/25/09)--World Council of Credit Unions (WOCCU) and the Credit Union National Association (CUNA) next year will combine two of the credit union movement's largest educational opportunities--the World Credit Union Conference and America's Credit Union Conference--into one, unprecedented event. Leaders of both organizations believe “The 1 Credit Union Conference,” scheduled for July 2010 in Las Vegas, will offer credit unions worldwide a depth and breadth of knowledge unavailable in any other forum. “It is my pleasure to personally invite credit union representatives from around the world to what will undoubtedly be the most exciting event on 2010's global credit union calendar,” said Pete Crear, WOCCU president/CEO. “The 1 Credit Union Conference marks the first time World Council has met in the U.S. in more than a decade. We expect attendees from more than 60 countries to share their expertise, helping to define critical new directions for a new decade.” This is the first time the two organizations have collaborated on an event of this stature. In 2010, neither the World Credit Union Conference nor America's Credit Union Conference will be held as individual events. In their place, The 1 Credit Union Conference is expected to draw more than 2,500 attendees for four days of networking and educational sessions. For next year's conference-goers, the single professional development investment will yield greater benefits, tapping the unique resources both organizations offer, according to Dan Mica, CUNA president/CEO. “In these challenging times, education and development dollars need to bring a greater return than they ever have in the past,” Mica said. “Our combined conference provides the best and most economical opportunity we can offer for all of us to find the resources we need to help our credit unions survive and thrive.” The 1 Credit Union Conference will convene at the MGM Grand Hotel, July 11-14, 2010. Complete event details will be available in early 2010. America's Credit Union Conference and Expo ended Wednesday in Boston. For more information, use the links.

2010 will be pivotal says NCUAs Marquis

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BOSTON (6/25/09)--2010 will be a pivotal year on the credit union regulatory scene, National Credit Union Administration (NCUA) Executive Director David Marquis told a Wednesday morning breakout session on legislative and regulatory issues during the America’s Credit Union Conference (ACUC) in Boston.
National Credit Union Administration Executive Director David Marquis painted a picture for 2010 that includes "a small tidal wave" in losses at credit unions, especially at the end of the recession. He spoke during a legislative/regulatory breakout session Wednesday at America’s Credit Union Conference and Expo (Photos provided by CUNA)
Marquis noted that credit unions will have seven years to pay for corporate stabilization, with charges to the premiums estimated at 10 to 15 basis points a year. Reserve losses will go up, not down. “We still have allowances for loan losses to add to the corporate stabilization program,” he said, and there will be more pressure as the year continues for a convergence between groups’ estimates of losses and the actual losses. He anticipates that NCUA’s corporate credit union rulemaking will be proposed this fall, with a final rule perhaps by next spring. (See related story: NCUA: What corporate reform could look like) “We don’t know how many corporates there will be. It depends on how many you want to support,” he said, noting that short-term bonds are still in corporate portfolios and “selling them now would be a disaster.” For now, NCUA’s strategy includes sustaining the weakened corporates. “If you don’t, our hand will be forced and bigger losses will occur.” He noted that if corporates had not been insured, the movement would have lost 2,000 natural-person credit unions, who’ve suffered about $4 billion in losses. The fact that only credit unions put money into corporate credit unions is “a systemic problem in the corporate credit union structure.” “In the 90s, I thought I saw the worst of the worst (for natural-person credit unions). I was wrong,” he said. During the 80s, 1,300 credit unions closed or merged during that recession. In the 90s, credit unions lost money. “The biggest loss to the share insurance fund comes at the end of a recession,” Marquis added. Other factors include credit unions’ more aggressive pursuit of more complex services such as member business loans and home equity lines of credit. Also, some states are delaying foreclosures, which means foreclosures will pile up later. “There’s a small tidal wave coming,” Marquis warned. “2010 will be our pivotal year to get through.” He said NCUA is already reallocating resources so more experienced examiners are working with credit unions in troubled areas, and its board authorized hiring 50 more people this year.
Protecting credit unions' tax exempt status in a "very ambitious Congress" processing bills through at "breakneck speed" is only one priority of the Credit Union National Association (CUNA), John Magill, CUNA’s senior vice president of legislative affairs, told a breakout session at America's Credit Union Conference and Expo in Boston.
CUNA also had two speakers at the session. John Magill, senior vice president of legislative affairs at CUNA, said a “very ambitious Congress” is proposing legislative measures “at breakneck speed.” Two recent actions--credit card reform and the housing bill that contains corporate credit union stabilization fund--are of key interest to credit unions, Magill said. So far, no bill that has passed has included the interchange issue or mortgage cramdowns related to bankruptcies, but both issues likely are showing signs of resurfacing. Upcoming legislative issues include; member business lending, “which is always on a front burner for CUNA”; alternative capital; data security; student lending, where the federal government would involve itself in student lending and move aside private student lending; and Internet gambling. CUNA will continue working to protect credit unions’ tax exempt status, he said. “The tax exemption is worth $1.5 billion to $1.8 billion a year. If legislators are looking at health care funds and are down to $10 billion, we’re worried they will look elsewhere for funds. We’ll always have one eye open that issue.” The new Consumer Financial Products Agency has the potential to reduce regulatory burden, “but the devil’s in the details,” Magill said. CUNA is working closely with Harvard Professor Elizabeth Warren who is heading up the effort. “It’s important to not walk away in the beginning. If we can do better, we intend to do so. We did that with the cramdown measure. We’ll try to make a bad bill less bad, if possible.” Magill urged credit unions to contact their members of Congress to stress the importance of maintaining an independent credit union regulator. “Next week Congress is off. Pick up the phone and tell how important this bill is. Help us help you, and vice versa.” Also, CUNA Deputy Counsel Mary Dunn outlined four critical regulatory issues for credit unions:
* Regulatory restructuring. The proposed Consumer Financial Protection Agency is a “glass half empty, glass half full scenario,” Dunn said. “The fact that the agency is on the drawing board gives credit unions an important opportunity to be at the table and negotiate the best deal for credit unions.” It has serious implications as Congress addresses the full length and breadth of regulations that will be implemented. She noted that the proposal would give the Fed more authority over payments and settlements systems, which are not under regulatory oversight. The corporate credit unions could be swept into this. Corporates have a raised level of systemic risk, but for now, are not under the proposal. The present proposal does not seek to include NCUA. *
Mary Dunn, deputy general counsel of the Credit Union National Association (CUNA), outlined four issues critical to credit unions during America’s Credit Union Conference and Expo in Boston. They are: regulatory restructuring, changes at the top level of the National Credit Union Administration, examination issues, and corporate credit union system issues.
Top level changes at NCUA. The nomination of Debbie Matz as NCUA chair has been sent to the Senate. “Everytime we get someone new, there are changes. We will be on the lookout for new agendas, Dunn said. * Examination issues on the horizon. Dunn says credit unions are not as much concerned about the substance of the examinations as about the methodology used in insisting on a particular course of action. NCUA’s newly issued letter is “very positive in reinforcing that examiners want to work with credit unions that are in more difficult positions on net worth because of the stabilization process.” * Corporate credit union issues. Credit unions are being asked to help determine what the future corporate credit union system should be. It’s owned by credit unions, which means they “share in good times and share in the bad.” “Implementation of new legislation directs that the costs of the corporate system stabilization spread out.” Credit unions are encouraged to think, talk to their leagues, and CUNA. She noted a task force on the issue and said CUNA is working jointly with the National Association of Federal Credit Unions to present ideas to NCUA.
The CUNA-sponsored XCUC conference ended Wednesday.

Diabetes defense denied CU robber convicted

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OAK RIDGE, Tenn. (6/25/09)--U.S. District Court jurors in Knoxville, Tenn., did not buy into Thomas Alexander Phelan’s “diabetes defense” and found him guilty of robbing Tennessee Members 1st CU, Oak Ridge Tenn., in December 2006. Phelan’s attorney argued that Phelan’s blood sugar--recorded as abnormally high after his arrest--resulted in him being in such a strange state of mind that he didn’t realize what he was doing when he showed up at the credit union with a realistic-looking air pistol, demanding cash (The Knoxville News Sentinel June 24). Authorities allegedly had to give Phelan 15 units of insulin to steady him just so they could take him to jail, Kim Tollison, assistant federal defender, told the jury. Because of this, Phelan obviously did not understand what he was doing, Tollison argued. However, Cynthia Davison, assistant U.S. attorney, refuted that argument, claiming Phelan’s decision afterwards to celebrate the heist by quaffing a Yoo-hoo chocolate drink is what sent his blood sugar level skyrocketing, the newspaper said. Phelan entered the credit union wearing with Harley Davidson gear, including leather boots decorated with flames. He called for a limousine to serve as his getaway vehicle, and paid for his Yoo-hoo with a wad of cash he stole from the credit union while an off-duty officer from the Knoxville Police Department watched, the paper said. Phelan will be sentenced Oct. 22.

Youth attend federation conference on underserved

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PHOENIX (6/25/09)--Twenty-three youth from community development credit unions (CDCUs) nationwide gathered in Phoenix at the National Federation of Community Development Credit Unions' 35th Annual Conference on Serving the Underserved, June 11-13.
Click to view larger imageAbout 23 youth attended the National Federation of Community Development Credit Unions' 35th Annual Conference on Serving the Underserved, June 11-13 in Phoenix. (Photo provided by the National Federation for Community Development Credit Unions)
The youth traveled to Phoenix to meet their peers from around the country and to advance their skills in financial education, community economic development, and in the management and operation of youth credit union programs, the federation said. The Federation's Youth Credit Union Conference began with a service-learning project at De Colores, a monolingual-Spanish safe space for women and children forced to flee their homes due to domestic violence. Youth participants toured the site, learned about the importance of the shelter, and volunteered their time to repaint the center. The conference also offered workshops. During one workshop, Elandria Williams of the Highlander Research and Education Center in Tennessee, focused on working with youth to understand the power dynamics in their local economies. Youth discussed their experiences with issues of race and class in the economy, and how they could work to build a new solidarity economy based on the ideals of equality and community. Thom Dellwo of Cooperative FCU, Syracuse, N.Y., spent time with the youth discussing the value of money and the importance of financial education. In Dellwo's workshop, youth discussed how much money they believe is needed to live comfortably and the importance of sharing their prosperity with the community. Youth also played a financial simulation game--Mad City Money--provided by the Credit Union National Association. Mad City Money is designed to help youth understand the importance of managing their finances by simulating the multitude of expenses youth might encounter. Pascua Yaqui, Native American musician, and Alex Maldonado, artist, performed music during the opening ceremonies of the conference. Maldonado, who makes his own native flutes and drums, donated a hand-made drum to support scholarships for next year's youth conference attendees. A drawing for the drum raised more than $1,000 for next year's conference in Pittsburgh.

CUNA Mutual to acquire retirement business

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MADISON, Wis. (6/25/09)--CUNA Mutual Group will acquire CPI Qualified Plan Consultants, Inc. (CPI), a retirement plan record keeper located in Great Bend, Kan. With the acquisition, CUNA Mutual will service more than 7,500 retirement plans with assets under administration nearing $10 billion. The sale is expected to close June 30. Terms of the cash transaction are not being disclosed. CPI is the largest employee-owned, third-party administrator in the U.S. It administers employee benefit plans including 401(k), profit-sharing, money purchase, 403(b) retirement plans, 457(b), flexible benefit, and non-qualified deferred compensation retirement plans. CPI also provides payroll services and 403(b) common remitter and compliance services. CPI provides administrative services to more than 3,600 clients nationwide with plan assets under administration of about $5 billion. CUNA Mutual currently serves more than 4,000 plans and 129,000 plan participants. CUNA Mutual’s Retirement Plan Services division, in Madison, Wis., specializes in providing fully bundled retirement plans to credit unions nationwide. CUNA Mutual’s plan assets under administration total nearly $5 billion. “Our customers will not notice any changes,” said Kevin Thompson, CUNA Mutual senior vice president of asset accumulation products. “We will operate as business-as-usual to avoid any disruption. Over time, we will look for ways to leverage each other’s strengths.”

Gen Y CU members key to building future

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Credit unions are missing an opportunity to build their future if they aren't working to attract young members and their business, Kris Wickline, consumer program manager at CUNA Mutual Group, told attendees Tuesday at America's Credit Union Conference in Boston. (Photo provided by CUNA Mutual Group)
BOSTON (6/25/09)--Credit unions are missing an opportunity to build their futures if they aren’t working to attract young members and their business, Kris Wickline, consumer program manager at CUNA Mutual Group, told attendees Tuesday at America’s Credit Union Conference in Boston. Credit unions that ignore this consumer segment do so at their peril, as complacency will result in this generation building relationships with other financial institutions, Wickline said. “You can’t afford to wait until they are the most profitable customer segment or have the most income power,” she said. “By then, they will have established financial relationships, and it will either cost you more to get them or you risk not getting them at all.” Also called Millenials, Generation Next, Generation Net or Gen O, members of Gen Y were born between 1977 and 1995, making them 14 to 32 years old. A close second to baby boomers in volume--roughly 76 million in Gen Y to 77 million boomers--this generation’s income is poised to outpace boomers’ by about $500 billion in about eight years. In the meantime, they represent the borrowers of the future to credit unions with their peak borrowing years right around the corner. Credit unions have an advantage in seeking to serve the financial needs of this generation because credit unions are trusted, have experience and a long history of advocacy, which are attractive characteristics to Gen Y, Wickline said. The time for credit unions to strike in serving young adults is now, she added. CUNA Mutual conducted market research with young adults in 2008 to understand their financial needs and behaviors. “To no surprise, we found that all the key life goals of young adults require the support of some type of financial product or service,” Wickline said. “Whether starting or building their careers, continuing their education or owning their first home, credit unions can offer young adults specific products and services to help achieve their goals. This is definitely good news, but there are barriers that credit unions need to overcome. “Our research found that for young adults, there are more important considerations than trust or having the right products,” she continued. “Access is crucial. In fact, for young adults, access trumps trust, products and services when it comes to selecting a primary financial institution. And unfortunately, it’s also an area where our research shows that both members and non-members think credit unions fall short.” Strong online capabilities and a great user experience are “table stakes” for serving Gen Y. They expect to be able to research and apply for products online quickly and easily. But they also expect to do business for certain things in person. For this generation of consumers, having multiple access points and integrated delivery channels are key. She added that serving their basic needs--building or repairing credit, debt management, money management and asset building--will create a more lasting relationship with this generation because they tend to favor one-stop shopping for their financial needs. Also, developing a business strategy around this generation isn’t enough; credit unions must turn that strategy into action by appealing to the unique consumer behavior of Gen Y, she said. Wickline outlined five specific identities of this generation to help credit unions develop their plans to attract this demographic and gave examples of how to make this successful.
* I expect big things!--Because this generation was raised to believe they were special and could do anything, they come with big expectations of the world. The first big expectation is their education. Wickline cautions not to ignore the significance of student lending in developing a longer term relationship. * I connect to transact, communicate and express myself--This generation doesn’t know life without computers, Internet service or mobile phones. They spend more time on the Web than watching television and communicate with peers through text messages and social media, including Facebook and MySpace. Because technology pervades every aspect of their lives, developing and maintaining functional websites is critical to attracting and keeping their business. “Make transacting quick and easy while communicating with them simply and where they’re at,” Wickline said. “Our research also found that young adults are looking for electronic means of communications from their preferred financial institution to learn about other products and services. Unfortunately, the traditional promotional methods that credit unions use are the least preferred by this generation.” * I research, seek opinions, buy and leave opinions--When it comes to making buying decisions, they do their own research, but seek reinforcement from their family, friends or the institution from which they’re buying a product. Credit unions should provide user recommendations on their websites to help influence Gen Y decisions regarding financial services. * I can save the world, for real--Gen Y was raised with a strong sense of community and taught to think in terms of the greater good. More schools encourage volunteering, supporting the message of social and environmental responsibility and making this generation the most socially conscious consumers to date. Credit unions should promote their values and community activities, and explore opportunities to either facilitate or engage young adults in community activities. * I love my helicopter parents--Wickline reminded the audience of the hovering nature of Boomer parents. Never before has a generation been so nurtured as Gen Y. Given this reality, parents can function as both the influencer and the decision maker with their Gen Y children, depending on the product and consumer’s age. She suggested leveraging marketing, communication and promotional efforts with parents when appropriate.
For more ACUC coverage, check out News Now’s blog and Credit Union Magazine’s daily reports online. The conference ended yesterday.

TJX to pay 9.75 million in data breach settlement

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FRAMINGHAM, Mass. (6/25/09)--TJX Cos. has agreed to pay $9.75 million in a settlement regarding a data breach announced in January 2007 that compromised many credit union members’ credit and debit cards. At least 45.6 million card numbers were compromised, and card companies such as Visa and MasterCard estimate that as many as 94 million cards were exposed (News Now Jan. 22, 2008). Credit unions nationwide incurred significant costs when they replaced members’ cards whose account numbers were exposed. Framingham, Mass.-based TJX announced the settlement Tuesday. The retailer settled with a multi-state group of 41 attorneys general to resolve the states’ investigations related to a criminal intrusion into TJX’s computer system. Under the settlement, TJX has agreed to:
* Provide $2.5 million to establish a new data security fund for use by the states to advance effective data security and technology; * Provide a settlement of $5.5 million together with $1.75 million to cover expenses related to the states’ investigations; * Certify that TJX’s computer system meets detailed data security requirements specified by the states; and * Encourage the development of new technologies to address systemic vulnerabilities in the U.S. payment card system.
Eleven indictments were announced in connection to the breach on Aug. 5, 2008. Two of the indicted criminals have since pleaded guilty, and two have pleaded guilty to related charges, TJX said in a release.

Brand capital levels student loans spike ACUC interest

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BOSTON (6/24/09)--National branding, capital levels and students loans—not the corporate credit union stabilization plan—were the focus of questions to the Credit Union National Association’s (CUNA) senior management team during Tuesday morning’s general session at the America’s Credit Union Conference and Expo (ACUC). Fielding questions from attendees were CUNA President/CEO Dan Mica; Eric Richard, executive vice president and general counsel; John Magill, senior vice president of legislative affairs; Mary Dunn, deputy general counsel of regulatory advocacy; and Bill Hampel, senior vice president and chief economist. Among the questions and answers: Q: Would CUNA leverage the positive press credit unions have received through the recession to build a national brand to take credit unions to a new level in the public’s awareness? A: “I’m ready today,” said Mica. “America’s Credit Unions logo sells well and has been a huge positive force.” However, he noted, successful campaigns like the “Got Milk?” and “Pork, the other white meat” cost $40 million to $50 million a year with a minimum five-year commitment to be successful. In comparison, CUNA’s dues are about $20 million. An option would be for CUNA to prepare the ads and send them to the leagues to implement. Another option, he said: going viral, by using the Web and the Internet. Q: The capital level required is 7%. Where will the target for capital levels be in the future, and what’s the value of secondary capital? A: “I have revised my view and am now comfortable with 8-10% capital, instead of the original 7%-9%,” said Hampel. He doubted credit unions will have to increase their capital required, but does not expect a reduction either in required capital. “Credit unions will need alternative access to capital,” he said. Q: Is risk-based capital dead? A: “It’s not on a connected decline,” said Mica, noting that a survey on capital asked if credit unions would take external capital--such as offering a normally 4% CD at 5% to 6%, with part of it uninsured. “A percentage could be offered only to members and any other outside investments, but if you don’t offer both, it won’t be worthwhile.” He noted CUNA would try to get alternative capital measures passed. Q: With low interest rates today continuing down the road, will long-term low-fixed-rate mortgages squeeze credit union earnings down the road? A. Hampel said there is not much interest-rate risk unless international investors take out their money on Treasury securities. However, he urged credit unions to “be cautious when interest rates dip and refinancings pick up. Be careful not to have too many.” Q: Congress has been flooded with the administration’s proposals. How long can it continue at this rate without reaching exhaustion? A: Magill noted Congress can go forever at this rate and that the system is unlikely to break down. However, many measures—such as health care and energy--are on the front pages and costly. “Our challenge as credit unions is to come out on top of the heap. We have a 6% market share, so we can do well getting our message across.” Q: Federal student loans cost too much money compared with the commercial rate. As a result, student loans may not be profitable. A: “Congress is in mind to get out of the student loan business,” said Magill. “But it doesn’t want the private sector to offer student loans. We don’t have an answer,” he said but promised that News Now would update readers in the next few days. Q: Our credit union originates mortgages and we’ve been told to hold 5% to 10% of our mortgages. A: Mary Dunn said this is a priority for the administration to “make sure that originations don’t just sell downstream. We’ll work very closely with the administration to make sure credit unions won’t be at a disadvantage. Mica noted that when he visited the White House recently, the president orally stated that he intended to raise the capital requirement for every financial institution in the U.S. “This would have a profound effect on credit unions.” It’s one more area to review, he said. ACUC ends today in Boston. Follow the events via the ACUC weblog by News Now and the convention’s Daily Wednesday by using the links.

CUNA economists address net income pressure on bottom line

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BOSTON (6/24/09)--The overall economy has some good news, with a light at the end of the tunnel. But don’t expect boom times ahead because this isn’t a V-shaped recession, Credit Union National Association’s economists told America’s Credit Union Conference and Expo attendees Tuesday morning in Boston. In their session on the economy and its impact on credit unions, Bill Hampel, CUNA chief economist, and Mike Schenk, senior economist, presented a general overview of the economy and how that affects credit unions’ bottom lines and presented suggestions for getting through the tough times.
Click to view larger image CUNA Chief Economist Bill Hampel advises credit unions to keep their responses to the economy restrained and let their capital cushion do its work. He made the comments during a general session on the economy’s impact on credit unions at America’s Credit Union Conference Tuesday in Boston.
“Credit unions are collateral damage to the financial crisis and the recession. It wasn’t because of stupid stuff you did, it’s because of the U.S. financial markets in general. You have to take the hits, but the nasty effects are bottoming out,” Hampel told credit unions. He urged credit unions to be restrained in their responses and let their capital cushion do its work. “Avoid penalizing members with high fees and rate changes. Some credit unions that are in hard hit areas may have to make changes in loan policies,” Hampel said. Loan losses will eat net income but will back off later this year and next, and yield curves will get steeper, he said. But credit unions don’t need to run CD specials or pay higher rates. “Instead of a sale, tell members you have money to loan,” he said. Net worth is more important than net income, Hampel said. Credit unions ended 2008 with a capital-to-assets ratio totaling 10.8%. In 2009, it would reach 9.7% and by 2010, it would be 8.7%. “If we end the three worst years with a 9.7%, that’s not the worst place to be,” he added.
Click to view larger image Mike Schenk, vice president of economics and statistics and senior economist with the Credit Union National Association, outlined the general economic outlook for attendees at session at the America’s Credit Union Conference in Boston Tuesday morning. He noted that the Fed’s target interest rates likely will stay the same--near 0%-- throughout the middle of next year. (Photos provided by CUNA)
Schenk said there is good news in the overall economy. “Two or three months ago we were talking about whether the financial system we know and love would survive,” he began. “Today we see that the light at the end of the tunnel is actually the end of the tunnel and not a train. We still have a long, difficult and uncomfortable time ahead, but we’re on the way out.” He noted the rate spreads have declined but now the market is functioning more normally. “Since the downturn, we lost six million in jobs, and there are nine million who are underemployed (working part time). The rate of decline has slowed—that’s good news and says to us the worse is over.” Still, the unemployment rate is at 9.4% and will be at 10% this year and up to 10 1/2%, which means another 1 1/2 million people will be out of work by next year. He noted personal consumption is up and the majority of the economic indicators index is on the upswing. However, there are a few concerns. Net worth has declined within a short time, equities aren’t going anywhere and net worth won’t be changing dramatically anytime soon. In the housing sector, he noted, last year saw 1 1/2 million foreclosures, with another 1 1/2 million expected this year, “despite programs to soften the blow,” Schenk said. For more coverage, check out News Now’s blog and Credit Union Magazine’s Daily reports online. Use the links.

CUs have numbers that for-profits envy--Mica

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BOSTON (6/24/09)--Credit unions have numbers that banks and other for-profit financial institutions envy, said Credit Union National Association President/CEO Dan Mica Tuesday morning at America’s Credit Union Conference and Expo in Boston.
Click to view larger image Holding up Tuesday morning’s New York Times, Credit Union National Association President/CEO Dan Mica told America’s Credit Union Conference in Boston that the article compares credit cards issued by banks and credit unions. "It shows that banks don’t have to be ruthless, don’t have to punish their customers, and don’t have to charge higher fees and interest rates. They don’t have to because they can study credit unions and see how credit unions do it right." He quoted the article, which said "the whole system of credit cards ought to take a look at how credit unions do it." (Photo provided by CUNA)
Mica made the comments prior to a question and answer session with CUNA’s senior management and attendees. He discussed credit unions in the recession, credit unions vs. banks, and key legislative/regulative events impacting credit unions from Washington. Lending in credit unions is up. “Banks are good for credit unions,” he said. This recession is different because banks and for-profit institutions essentially shut down their lending and thus helped boost credit union membership, which is up by 1.6% He projected credit unions will have 100 million members in five or six years, but “if banks keep acting the way they do, (reaching that milestone) may be earlier.” Other points:
* CUNA is getting support for its efforts toward member business lending legislation. U.S. Rep. Barney Frank (D-Mass.) supports the issue, which is on the legislative schedule but not finalized for next year. “We’re going to get that legislation ready and if there’s an open time or day, with Frank’s support, we’ll move that through,” he told ACUC attendees. * Assets are up, largely because credit unions consistently beat banks in the area of consumer trust and fees. For 22 years, bankers' own surveys showed credit unions shining on consumer trust. "We won every year, so they stopped doing (the surveys)," he said. "They don't want another year where credit unions come out on top." Now, other groups have begun similar surveys and credit unions are at the top of those also. "Banks are as low as they've ever been," Mica said. Credit unions have the kind of delinquency numbers that the for-profits envy, he said. * Credit unions also are seeing a “newfound credibility” in Washington, which now has a “hyperactive” president and Congress pushing more bills and hearings. With the increase is an increase in the number of times CUNA has been invited to lend its expertise at a congressional hearing. “We’re getting invited more frequently—six times in the past five months. And we’re being asked, ‘How did you do it?’ and ‘Tell us how you did that,’” he said. * CUNA has seen successes in what has not happened in Washington, Mica said. There’s no CRA or cramdown this year, and CUNA has lobbied for a less dramatic interchange bill, and supported an independent National Credit Union Administration (NCUA). * “Corporate stabilization was a tough one, with a massive financial write-off for credit unions. About 80% of credit unions would have had a negative return on assets if legislation hadn’t passed,” he said. He also noted that if deposit insurance hadn’t been expanded to $250,000 from $100,000, credit unions would have been hurt dramatically. * Congress is attempting to determine whether there are too many corporate credit unions, whether there should be any corporates all all, or whether there should be corporates but with restrictions in transactions. A systemwide task force representing all groups in the Credit Union System is addressing the issue, he said. * A plan to regulate all financial products through a federal consumer financial product agency that would provide transparency, fairness, simplicity and access has “caught fire in Washington,” Mica said. “On their face, we are for these, but we have a very grave concern about how it’s done. Others have said a hands-down ‘no,’ but we’ll serve in good faith and reserve the ability to walk away from the table” if needed, he said. “This ship has left the dock. Everyone projects it will pass. If it passes as is, it is absolutely not what we want.”
For more ACUC coverage, check out News Now’s blog and Credit Union Magazine’s Daily reports online. Use the links. The conference ends today.

Follow ACUC live via blog (06/23/2009)

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BOSTON, Mass. (6/24/09)--Credit unions can get instant online coverage of the latest happenings during America's Credit Union Conference and Expo (ACUC) here via blogs, twitter, and daily stories in News Now and Credit Union Magazine's website. The Credit Union National Association (CUNA) conference kicked off Sunday and will end this afternoon. Leigh Gregg, CUNA online editorial director, will provide frequent convention updates on the America's Credit Union Conference blog produced by News Now. She also will tweet short news hits on News Now's LiveWire, a service through Twitter, as well as provide stories daily to News Now. Watch for the ACUC Daily and ACUC WEBLOG icons appearing on CUNA's website at www.cuna.org.

CU System briefs (06/23/2009)

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* SANTA ROSA, Calif. (6/24/09)--Redwood CU (RCU), Santa Rosa,
Click to view larger image
Calif., was recently named “Best Credit Union” and RCU President/CEO Brett Martinez was named Best North Bay Business Community Leader” in a readers’ poll by NorthBay biz magazine, which serves business communities in northern California. From left are: Bob Steele, RCU board member; Mishel Kaufman, RCU senior vice president; Cynthia Negri, RCU senior vice president; Mark Michaels, RCU senior vice president; Robin McKenzie, RCU senior bice president, Joni Rosinski, Northbay biz vice president; and Anne Benjamin, RCU executive vice president and chief operating officer. RCU has $1.8 billion in assets. (Photo provided by Redwood CU) ... * PALO ALTO, Calif. (6/24/09)--Addison Avenue FCU, Palo Alto, Calif., has partnered with US solar systems maker SunPower Corp. to offer a loan program to make solar power systems more affordable (ADP News June 15). Addison will offer five-year loans up to $50,000 that will allow homeowners to use a 30% federal tax credit to purchase the systems. Interest paid on home equity loans also may be tax deductible. Those who purchase a residential SunPower system will also receive a rebate from SunPower at a rate of 30 cents per watt ... * OSHKOSH, Wis. (6/24/09)--Jean B. Kolodzik, 71, who helped establish Winnebago Community CU in Oshkosh, Wis., died June 18 in Oshkosh. Kolodzik served in several capacities at the Winnebago Community, including teller and acting vice president. She retired from the credit union in 2004. Winnebago Community has $54 million in assets ... * FARMERS BRANCH, Texas (6/24/09)--Dick Ensweiler, Texas Credit Union League (TCUL) president/CEO, and Karen Hart, TCUL chief financial officer, dueled in a bowl-off June 15 to raise money for the American Cancer Society. Ensweiler won the bowl-off. The league raised more than $2,100 from pledges and donations from TCUL board members and staff in care of Tom Hodge, TCUL vice president of sales and marketing; and Karen Houston, regional vice president of CU Employment Resources. A video highlight reel of the bowling event is available on TCUL’s website ...

Community Trust Self-Help CUs merge

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MODESTO, Calif. (6/24/09)--Community Trust CU, Modesto, Calif., has merged with Self-Help FCU, Durham, N.C. The two credit unions said the move was a proactive step to take advantage of each of their relative strengths (Modesto Bee June 23). By partnering with Self-Help, Community Trust will be able to expand its services to members and increase its positive impact on the Modesto-area community, Joe Duran, Community Trust’s CEO, told the newspaper. The merger with Self-Help will inject money into Community Trust’s balance sheets, tripling Community’s Trust’s net capital, Duran added. The merger was approved earlier this year by federal and state regulatory agencies, and Community Trust’s membership, the paper said. Community Trust has $42 million in assets. Self-Help, based in Durham, N.C., has $333.4 million assets.

White papers cover ACH usage CU asset size

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MADISON, Wis. (6/24/09)--Credit union professionals can receive tips to get the most out of automated clearing house (ACH) use in the first of two recently released white papers from the CUNA Councils. “ACH Payments: A Key Tool in Your Electronic Payments Toolbox,” from the CUNA Operations, Sales, and Service Council, analyzes this important time- and money-saving tool for credit unions. The paper looks at how ACH works and how it has evolved, its benefits and pitfalls, and future innovations. Also, it provides examples from credit unions that use ACH to originate and receive funds transfers. It illustrates how each credit union approaches the process a little differently, and includes tips for successful use. A second white paper, “Differentiating Credit Unions by Asset Size: Key Financial Issues,” examines the characteristics of credit union groups when asset size is the distinguishing variable. The paper, sponsored by the CUNA Chief Financial Officers (CFO) Council, was authored by Dr. Harold Sollenberger and Andrew Stanecki from Michigan State University in East Lansing, Mich. Using trends from the past four years, the paper arranges credit unions into six asset size groups and draws comparisons. It then offers analysis on key issues, including: member growth, deposit growth, loans-to-deposits patterns, asset quality, capital, earnings, operating expenses and liquidity. For more information, use the links.

Expert Retaining baby boomer CU members is critical

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BOSTON (6/24/09)--The retirement of the baby boomer generation will become a crisis for credit unions if they don’t act now, Jeff Hunt, consumer program manager at CUNA Mutual Group, told attendees at America’s Credit Union Conference & Expo Monday in Boston.
The retirement of the baby boomer generation will become a crisis for credit unions if they don’t act now, Jeff Hunt, consumer program manager at CUNA Mutual Group, told attendees at America’s Credit Union Conference & Expo Monday in Boston. (Photo provided by CUNA Mutual Group)
“The size and wealth of this generation means credit unions will face a membership drop of millions and an asset loss of billions if loss rates match up with historical averages,” Hunt said. “Replacing the boomer retirees with younger generations of members is just not possible in the short term. Generation X is too small and financially stretched, and Generation Y is too far away from their peak borrowing and earning years to fill the gap.” Hunt’s findings came from a study conducted by CUNA Mutual in 2008 to determine if and why boomers were leaving their credit unions and how to retain them into retirement. Using video of boomer interviews from the study, Hunt presented his case for why credit unions need to pay attention to this key demographic. Credit unions have long enjoyed high membership numbers among middle-aged adults. The 2008 CUNA National Member Survey shows 37% among those 45-64 years old. However, the percentage drops to 26% for those 65 years and older. “This makes sense given that the credit union business model was a good fit for middle-aged boomer members in their prime borrowing years,” Hunt said. “But with that generation hitting retirement and no one to replace it, either the model has to change or the generation has to stick around; or both.” The study results bear this out. When asked how likely boomers were to stop using their credit union in retirement, 17% of boomer respondents said they were somewhat or very likely to leave. While the percentage sounds small, it translates to a loss of more than 5 million members when applied to the estimated 33 million boomer credit union members. To retain these boomer retirees, the research suggests credit unions ultimately need to evolve from being mainly lending institutions for mid-life borrowers to retirement companies that offer a full range of solutions to boomer members. Hunt provided six steps to help credit unions manage this transition:
* Create an endorsed retiree product portfolio--Offer boomers the products they need in retirement, such as individual retirement accounts; income-oriented investments and annuities, Medicare-related products; and long-term care. * Talk retirement and never stop--Just like they have effectively with lending, credit unions need to market their retirement expertise, capabilities, and products all the time. * Build awareness in each channel--The communication channels should be where boomers want to read them, which includes statement inserts, brochures sent through the mail, e-mails with appropriate links, brochures and/or seminars at the branch or announcements on the credit union’s website. * Build retirement research centers--Boomers want to research and form an opinion before they buy a product; credit unions can help drive member purchases by becoming an information resource for their members. * Build purchase channels--Boomers have strong purchase preferences, and they won’t suffer through a purchase channel they don’t like. Credit unions should be flexible and diverse in their channel offerings understanding that boomers will make trade-offs based on experience, price and convenience. * Make the credit union their retirement advisor--Achieving the coveted position of a member’s retirement adviser requires every credit union employee to play a role, and ensuring they work as a team to be successful. The credit union itself should be seen as the adviser, not just the person with that title.
For more coverage, check out News Now’s blog and Credit Union Magazine’s Daily reports online. Use the links.

NJ CUs sponsor gubernatorial candidate dinner

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PRINCETON, N.J. (6/24/09)--New Jersey credit unions sponsored the New Jersey Business and Industry Association Employer Legislative
New Jersey Gov. John Corzine (left) and New Jersey Credit Union League President/CEO Paul Gentile at a dinner sponsored by New Jersey credit unions. (Photo provided by the New Jersey Credit Union League)
Committee’s 50th Anniversary dinner where incumbent Gov. John Corzine and Republican challenger Chris Christie made their first joint appearance for the general election campaign. During the event, New Jersey Credit Union League President/CEO Paul Gentile briefed more than 450 of the state’s business leaders and policymakers on the state’s 215 credit unions and their 1.2 million members. Not only are New Jersey’s credit unions a major constituency, but they are healthy, well-capitalized and ready to play a key role in the state’s economic recovery, Gentile said. “This was a great opportunity for us to get the credit union message in front of key lawmakers, business leaders and members of the media,” Gentile said. About 40 credit union leaders attended the event, the New Jersey League said.

Financial crisis accentuates CUs significance

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BOSTON (6/24/09)--In an era of historic credit and budget deficit crises and a global recession, credit unions’ relevance may never be stronger, an industry expert told attendees of CUNA’s America’s Credit Union Conference & Expo Monday.
Credit unions' significance accentuates in the economic crisis, according to John Lass, senior vice president, strategy, CUNA Mutual Group. Lass spoke during America’s Credit Union Conference and Expo Monday in Boston. (Photo provided by CUNA Mutual Group)
“There’s no doubt that spread pressures, corporate stabilization expenses and potential regulatory oversight changes are stressing credit unions,” said John Lass, senior vice president, strategy, CUNA Mutual Group. “But credit unions’ many strengths not only make these obstacles surmountable, they pose an opportunity to shine, even during one of the worst economic downturns in the nation’s history.” Further strengthening the credit union charter’s relevance is the plummeting image of banks and their role in the country’s economic collapse, Lass said. “For the most part, credit unions avoided the subprime and related mortgage lending practices. Credit unions didn’t cause this crisis, but they have been caught in its backwash.” Lass said image alone isn’t why the credit union charter is needed now more than ever and provided reasons why they are in a position to make gains with consumers:
* Local presence/funding--Credit unions’ loanable funds are primarily through deposits. “They don’t depend on the capital markets like banks and finance companies, and credit unions utilize local underwriting and decisioning for loans. It’s more personal,” Lass said. * Cooperative ownership structure--Credit unions’ member ownership makes it very difficult for any outside group to exert undue influence on the strategic decisions, unlike banks. For example, there has been a significant infusion of capital in banks from sovereign wealth funds recently. *Affordability--Credit unions provide affordably priced financial services, which is important to consumers, now more than ever. Credit unions provided an average benefit of $170 per member household over banks, according to Credit Union National Association research. * Concentration--Although the credit union system has experienced concentration of deposits in recent years, it’s not nearly as concentrated as the banking industry. The top five bank holding companies hold 38% of all domestic deposits, while the top five credit unions hold 9% of all deposits. * Capital--To date, credit union losses have been managed from within the system, and the industry as a whole is well-capitalized: Credit unions, 10.8% capitalization level; banks, excluding Troubled Asset Relief Program funds, 7.6%. * Lower risk--The cooperative structure does not require excessive risk-taking. Credit unions’ delinquency rates and net loan charge-offs are significantly less than banks. * Compensation/risk--Compared to the “asymmetric” incentives applied in the investment banking industry, credit unions’ compensation does not reward excessive risk taking. * Consumer loyalty--Credit unions’ member intimacy is almost impossible for a bank to emulate. “Customer intimacy is considered the most powerful value proposition an organization can build. It fosters the longest-lasting relationships and allows an organization to anticipate its customers’ needs,” Lass said. * Consumer trust--Independent surveys consistently rank credit unions high in consumer trust, compared to banks. Meanwhile, the trust level in banks has plummeted. * Purpose--The current economic crisis is the same type of environment that brought about federal enabling legislation for credit unions in 1934.
For more coverage, check out News Now’s blog and Credit Union Magazine’s Daily reports online. Use the links.

Federation welcomes new board of directors

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PHOENIX (6/24/09)--The National Federation of Community Development Credit Unions elected a new board of directors June 12, during the 35th Annual Conference on Serving the Underserved in Phoenix. Randy Chambers, Self-Help CU chief financial officer, was elected chairman. Chambers, from the Durham, N.C.-based credit union, had served as vice chair for the past three years. He succeeds Eunice J. Rogers, who is retiring.
Click to view larger imageThe National Federation of Community Development Credit Unions elected a new board of directors during its 35th Annual Conference on Serving the Underserved in Phoenix. From left are: Cliff Rosenthal, Federation president; Eunice J. Rogers, former Federation chair; and Randy Chambers, newly elected federation chairman. (Photo provided by the National Federation of Community Development Credit Unions)
Rounding out the board is:
* Vice Chair: Lynda Milton, CEO, Team Financial FCU, Houston; * Treasurer: Michael Chan, board president, Northeast Community FCU, San Francisco; * Recording Secretary: Deyanira Del Rio, board chairman, Lower East Side People’s FCU, New York City; and * Corresponding Secretary: Gregg Brown, CEO, South Side Community FCU, Chicago.
Others elected include:
* Region 1 (East)--Sharon Saulters, president/CEO, Triumph Baptist FCU, Philadelphia; * Region 2 (South)--Miss. State Sen. Robert L. Jackson (D), treasurer/CEO, First Delta FCU, Marks, Miss.; * Region 3 (Mid/South West)--Brown; * Region 4 (West)--Daniel Scott, president/CEO of Faith Based FCU, Oceanside, Calif.; * At-Large--Chambers.

Top 10 emerging risks for CUs outlined at ACUC

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BOSTON (6/23/09)--Today’s fraud landscape is becoming more complex, featuring extensive intertwined risks--some old but with new wrinkles and some emerging at the pace of new technologies. The emerging risks will require credit unions to adopt rigorous, cross-channel fraud monitoring strategies, a CUNA Mutual risk expert said Monday.
Ann Davidson, CUNA Mutual Group, noted that the tough economy is not only motivating criminals but also "people you never thought would commit fraud." The product manager of the Credit Union Protection risk management spoke about emerging trends in risk and fraud during a breakout session at America's Credit Union Conference and Expo in Boston. (Photo provided by CUNA Mutual Group)
Ann Davidson, speaking Monday to a standing room only crowd at the America’s Credit Union Conference (ACUC) and Expo in Boston, recommended taking a holistic view of fraud. That means realizing that a particular fraudulent act may not directly or immediately result in a loss but may later manifest itself in another form. Fraud schemes are increasing as a tough economy motivates not only criminals but also “people you never thought would commit fraud,” Davidson said. She outlined the 10 hottest schemes in 2009 facing credit unions. They are:
* Phishing (e-mail), smishing (texting) and vishing (telephone); * I.D. fraud; * System intrusion; * Cyber crime; * Data breaches; * Transaction fraud; * Mortgage fraud; * Internal fraud; * External fraud involving numerous and varied scams; * Other emerging risks, involving compliance and regulation, and new account, existing account and check image home banking fraud.
The best way to thwart fraud by preventing it is “Education, education, education,”--educating employees and members, Davidson said. Identifying root causes and using a fraud management system can prevent or minimize risks. She offered these preventative tips:
* Implement best practices that engage all employees; * Measure savings by the effectiveness of the loss-prevention tool; * Share information to help other credit unions and members; * Be proactive--it pays off; * Ensure prevention processes and tools are in place and delivering intended results; * Find the critical balance between risk management and member service for the credit union; and * Implement a cross-channel fraud prevention solution on all transactions and at the member account level.
ACUC is presented by the Credit Union National Association. It ends Wednesday. Check out further coverage in News Now’s blog and at Credit Union Magazine’s website. Use the links for more.

Mica notes young members are most optimistic

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BOSTON (6/23/09)--
Credit Union National President/CEO Dan Mica welcomed attendees at the America’s Credit Union Conference in Boston, saying that despite the tough year for the nation’s financial institutions, credit unions can be optimistic. He discussed the optimism of younger consumers--76% of 18 to 29 year olds say their personal financial situation will improve. “That’s optimism,” he said. The movement projects it will have 100 million members in the next few years. "Young people need it (financial services) and want it. We can stand tall in this." (Photo provided by CUNA)


Credit Union National Association President/CEO Dan Mica welcomed attendees at the America’s Credit Union Conference in Boston Monday saying that despite the tough year for the nation’s financial institutions, credit unions can be optimistic about the future. Credit unions’ capital is at 10%. “Every other financial institution would love to have 10%,” he noted. Banks have regulatory hearings on their backs, shareholders on their backs and more “but we don’t have a single group in that situation.” Credit unions are No. 1 in trust, he said citing a survey released May 26 by Forrester Research Inc. He noted the optimism of future credit union members, those in the 18-29 age bracket Pew Research Center has found that this age group may be among the most optimistic. Thirty-five percent of this age group are having trouble paying the rent or mortgage, and 36% have lost their job or know someone who has, he said. Forty percent have cut their spending, and 33% have changed their cell phone plans. However, 76% still say their personal financial situation will improve. “That’s optimism,” Mica said. He ended on the note that the movement projects it will have 100 million members in the next few years. “Young people need it (financial services) and want it. We can stand tall in this.”
Chief executive optimist Bert Jacobs, co-founder of Life is good in Boston, brought the empowerment of optimism to America’s Credit Union Conference and Expo. The keynoter for Monday’s general session told how one T-shirt character, “Jake,” served as a magnet for optimism (Photo provided by CUNA)
On another note of optimism, the conference heard from the chief executive of optimism, Bert Jacobs, whose Life is good T-shirt enterprise went from selling from the back of a van 15 years ago to a multimillion dollar enterprise that now raises millions of dollars for children’s causes. Jacobs’ message is simple: Be optimistic. Be open to new things, to meeting new people. Be open to the notion that anything is possible. He told how friends came up with the cartoon character, Jake--a nerdy-looking, smiley stick man who “looks like he has life figured out.” When Jacobs and his brother John sold 48 of the T-shirts in 45 minutes, they knew they were on to something. Soon the enterprise expanded Jake. He was shown eating ice cream, playing golf, cooking in the back yard or just relaxing. The tall, laid-back Frisbee-throwing T-shirt clad Bostonian said that after 9/11, people couldn’t get enough of Jake’s messages of hope and joy. “Americans work way too hard,” he told the assembly’s hard-working credit union volunteers and professionals. After the session, credit unions waited in line for nearly two hours, queuing up to buy his “Life is Good” book.
Massachusetts Credit Union League President Dan Egan noted that in the State House, near the entrance is a plaque honoring Pierre Jay, the first banking commissioner of Massachusetts. Jay, along with Boston’s Edward A. Filene, ushered in the first general charter for credit unions after the founding of St. Mary’s Bank CU in New Hampshire. Filene put up $1 million of his own money to promote credit unions, Egan told America’s Credit Union Conference Monday morning. (Photo provided by CUNA)

Follow ACUC live via blog

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BOSTON, Mass. (6/23/09)--Credit unions can get instant online coverage of the latest happenings during America's Credit Union Conference and Expo (ACUC) here via blogs, twitter, and daily stories in News Now and Credit Union Magazine's website. The Credit Union National Association (CUNA) conference kicked off Sunday and will end Wednesday afternoon. Leigh Gregg, CUNA online editorial director, will provide frequent convention updates on the America's Credit Union Conference blog produced by News Now. She also will tweet shorter tidbits on News Now's LiveWire, a service through Twitter, as well as provide stories daily to News Now. Watch for the ACUC Daily and ACUC icons appearing on CUNA's website at www.cuna.org.

CDFI advocate Why CUs dont want to be banks

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NEW YORK (6/23/09)--During closing remarks at the National Federation of Community Development Credit Unions' 35th Annual Conference on Serving the Underserved, Ellen Seidman, community development financial institutions (CDFIs) advocate, explained why credit unions don’t want to convert to banks.
Ellen Seidman, community development financial institutions advocate, explained why credit unions don’t want to convert to banks during remarks at the National Federation of Community Development Credit Unions' 35th Annual Conference on Serving the Underserved June 12 in Phoenix. (Photo provided by the National Federation of Community Development Credit Unions)
The federation’s conference took place June 11-13 in Phoenix. “Why do you not want to become a bank?” Seidman said. “Well for one, our banking regulators are increasing their premium assessments across the board; so financially, it might not make a lot of sense. Our regulators are also very tough, especially on the smaller institutions; institutions that don’t tend to fight as well as the larger players, and thus are easier to close. “Another major factor to consider,” Seidman continued, “is that bank insurance premiums are rising, and this generally disadvantages the smaller institutions. We also have higher requirements on capital and return on assets, which are generally much tougher than those of credit unions. Of course there's always the issue of taxation, both as a for profit institution and under CRA [Community Reinvestment Act]. While your institutions would have no issue meeting CRA requirements, why on earth would you want yet another complicated exam to deal with?” Seidman addressed more than 250 community development credit union representatives, credit union organizers, regulators and government officials during her speech. She also discussed the importance of local financial institutions in addressing the current economic environment, and emerging opportunities for CDFIs under the new administration. Seidman acknowledged the challenges that CDFIs and nonprofit institutions nationwide are facing and provided some recommendations to address those challenges and strengthen those institutions, the federation said.

Financial literacy will help economy recover says CU CEO

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CHICAGO (6/23/09)--Financial literacy will help the economy recover, according to David Mooney, president/CEO of Alliant CU in Chicago. “Helping consumers become more financially literate will promote economic recovery,” he said last week at the first annual Global Financial Literacy Summit in Washington, D.C. The summit was headlined by Federal Reserve Board Chairman Ben Bernanke and sponsored by Operation HOPE, a nonprofit organization dedicated to financial literacy empowerment. Alliant CU is an Operation HOPE partner. Mooney spoke about the benefits of financially literate consumers, not only as “better” borrowers and savers, but also as a means to temper business and credit cycles--specifically reducing excessive consumer borrowing, defaults and bankruptcies. Alliant has invested in a charitable foundation whose primary focus is financial literacy, free financial education and counseling. Also, Alliant employee volunteers have conducted more than 250 free financial literacy classes attended by 2,000 middle school students in the last three years, he said. Alliant has more than $6 billion in assets.

Members United elects board officers

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WARRENVILLE, Ill. (6/23/09)--Members United Corporate FCU elected its board officers and directors for 2009-2010. Board officers include:
* Chair: John T. Fenton, president/CEO, Affinity FCU, Basking Ridge, N.J.; * Vice Chair: Kyle Markland, president/CEO, Affinity Plus FCU, St. Paul, Minn.; * Treasurer: Louis H. Jimenez, CEO, Montauk CU, New York City; and * Secretary: Lloyd M. Fredendall, president/CEO, NorthStar CU, Warrenville, Ill.
Directors include:
* Bruce Beaudette, president/CEO, Sunmark FCU, Latham, N.Y.; * Terry R. Brahm, president/CEO, DHCU Community CU, Moline, Ill.; * Donald H. Briggs, president/CEO, NorthEast Alliance FCU, Bardonia, N.Y.; * John R. Caulfield, president/CEO, St. Mary’s CU, Marlborough, Mass.; * Gary E. Furtado, president/CEO, Navigant CU, Smithfield, R.I.; * Andrew L. Jaeger, president/CEO, CU of New Jersey, Ewing, N.J.; * Nancy Kasprzak-Whitmore, president/CEO, Niagara County’s FCU, Lockport, N.Y.; * Ron Linstromberg, CEO, DeKalb Financial CU, Auburn, Ind.; and * Michael Phipps, president/CEO, Evansville (Indiana) Teachers FCU.
Members United’s supervisory committee for 2009-2010 is:
* Mooney; * Steve Ahlness, president/CEO, Greater Minnesota CU, Mora, Minn.; * Leo Ardine, president/CEO, United Teletech Financial FCU, Red Bank, N.J.; and * Rick Rice, president/CEO, Teachers CU, South Bend, Ind.
Members United, based in Warrenville, Ill., has $9.5 billion in assets.

Conference discusses key factors shaping U.S. economy

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MADISON, Wis. (6/23/09)--Credit union professionals can hear about key factors shaping the U.S. economy from several economic experts at the Credit Union National Association’s Economics and Investments Conference, Aug. 2-5, in San Diego. Lawrence Yun, chief economist and senior vice president of research for the National Association of Realtors (NAR), will discuss current trends in the housing market to help attendees determine a strategic plan for the future. Yun, who has previously made USA Today’s list of top 10 economic forecasters in the country, regularly writes columns on real estate market trends, creates NAR forecasts, and participates in economic forecasting panels nationwide. Former Chrysler corporate economist Paul Traub will overview the current state of the U.S. economy and its impact on the auto industry. Traub, who was responsible for tracking the economy and forecasting its impact on North American auto sales for the bulk of his nearly 25-year career with Chrysler, will compare the current economy to past recessions and explain what the future might hold for auto sales after the economy recovers. He also will discuss the drivers behind new vehicle sales that make up the potential long-term sales trends for the U.S. auto industry. Finally, he will answer the question: Will the U.S. ever see its auto industry sales in the 17-million-unit range again? Don Ratajczak, former director of the economic forecasting center at Georgia State University in Atlanta, will provide an overview of the U.S. economy. Ratajczak will discuss the lessons that have been learned from the worst financial meltdown since the Great Depression and the implications for the future. He also will review current indicators, statistics, and insights to forecast the economic climate. Also, attendees will discover asset-liability management techniques and gain practical tools for managing the finances of their credit unions. They also will learn competitive investment strategies and discuss current regulatory issues that impact investment options.

WOCCU helps South Africa develop deposit insurance

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NORTHWEST PROVINCE, South Africa (6/23/09)--At the invitation of South Africa's National Treasury, the World Council of Credit Unions (WOCCU) has taken steps to make sure that South African Savings and Credit Co-operatives (SACCO) members nationwide do not lose their deposits. SACCOs--or credit unions--and banks have historically lacked any type of deposit insurance.
A teller at Ditsobolta Savings and Credit Co-operative in rural South Africa describes services to a member. World Council of Credit Unions is helping South Africa develop legislation to create deposit insurance. A 2008 International Credit Union Day poster is visible on the back wall. (Photo provided by World Council of Credit Unions)
WOCCU’s initial work with South Africa’s government eight years ago to develop legislation specific to financial cooperatives culminated in January 2008 with the passage of the Cooperative Bank Act. Last week, Dave Grace, WOCCU vice president of association services, led a workshop in Pretoria for representatives from South Africa Reserve Bank, Cooperative Bank Development Agency and the National Treasury, outlining a government-backed deposit insurance plan to protect consumer savings. “South Africa's Cooperative Bank Act calls for deposit insurance,” Grace said. “Right now, South Africa has no deposit insurance for any of its financial institutions. Thanks to passage of the cooperative bank law, the path has been cleared so that South Africa's SACCOs will be the country's first financial institutions with deposit insurance to protect their members.” Despite 15 years of political freedom from apartheid, much of South Africa's population is still marginalized from sharing in the country's wealth. South Africa's SACCOs have made some inroads rebalancing economic power, but slow growth has raised concerns among government officials. Enacting deposit insurance among the country's financial cooperatives will increase the depositor confidence and enable the SACCOs to grow, according to Omega Shelembe, the National Treasury's director of banking development. “Having deposit insurance introduces a complementary element in the financial safety net,” Shelembe said. “This element, together with improved regulation and supervision will increase both the attractiveness and accountability of the SACCO sector and bode well for the growth of the movement.” During the WOCCU workshop, Grace stressed the importance of protecting the savings of small- and medium-level depositors as a way to help stabilize not only SACCOs, but the country's economic system as a whole. A deposit insurance structure that covers the majority of depositors, rather than focusing the amount of funds on deposit, would provide the best possible protection to individuals and institutions alike. The program also should be on par with that of commercial banks once bank deposits also are covered by deposit insurance, WOCCU said. “The protection provided by deposit insurance enhances the level of public confidence in South Africa's SACCOs,” Shelembe added. “Over time, we believe SACCOs will build their credibility and ultimately compete with the commercial banking sector for the mobilization of savings and provision of loans.”

CUNA Mutual Humana join to offer Medicare products

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BOSTON (6/23/09)--Credit union members will soon be able to turn to their credit union to purchase products related to Medicare. CUNA Mutual Group is announcing a new Medicare suite of products designed to help credit unions retain the growing ranks of retiring baby boomers. Medicare Suite will be offered this year through CUNA Mutual’s MemberCONNECT direct-to-member distribution channel. Targeted members of participating credit unions are able to take advantage of the remaining 2009 enrollment period for the Medicare product, which is Nov. 15 through Dec. 31. “Partnering with Humana to provide the Medicare suite of products to our credit union customers is the right decision with the right company at the right time,” said Andy Napoli, senior vice president and product group leader of consumer products at CUNA Mutual. “Competition for baby boomers’ business is heating up among financial institutions, and with good reason. Within credit unions, more than 24 million members are over 55. This is also a tough group to retain.” As baby boomers--defined as those born between 1946 and 1964--begin the retirement process, competition for their financial business is building. Research conducted by CUNA Mutual indicates credit unions have had trouble retaining this generation as it ages into retirement, primarily because it doesn’t view credit unions as providing all the products they need or seek in retirement. For the unprepared boomer retirees, Medicare will be welcomed as a safe haven of coverage. As the most widely available health care solution for retirees, traditional Medicare currently insures more than 45 million Americans. Clearly, this is a core product among older adults, CUNA Mutual said. Traditional Medicare can leave a person with large out-of-pocket expenses. To handle these additional expenses and provide other choices for coverage, private health-care companies also offer Medicare Advantage, Medicare Supplemental or Gap and Part D prescription drug coverage, CUNA Mutual said. “By providing additional Medicare insurance products to our credit union customers, CUNA Mutual is getting in on the ground floor of offering Medicare options to the next generation of retirees, the baby boomers,” Napoli said. “We know millions of Americans place a tremendous amount of trust with their credit unions, and relationships such as this new Humana--CUNA Mutual relationship are vital to Humana’s continued success as one of the nation’s leading Medicare Part D health-benefit plan sponsors,” said Lance Hoeltke, vice president of strategic alliances with Humana. Humana Inc., headquartered in Louisville, Ky., is a publicly traded health and supplemental benefits companies, with about 10.3 million medical members.

ACUC starts with historical focus

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BOSTON (6/22/09)--America’s Credit Union Conference (ACUC) and Expo is now in progress, with 1,500 total attendees scheduled today to continue the celebration in Boston of the 100th anniversary of credit unions and the 75th anniversary of the Credit Union National Association (CUNA).
Click for slide showEmcee Patrick Adams, president of St. Louis Community CU, noted that passion is what separates credit union people from other industries and turns them into heroes during the opening general session Sunday of America's Credit Union Conference and Expo in Boston (Photo provided by CUNA)
Sunday’s kickoff reception and general session focused on the movement’s revolutionary heroes, both past and present. Emcee Patrick Adams, president, of St. Louis Community CU, noted that “the passion of the movement exceeds the numbers on your paycheck. A lot of industries can’t say that. Ours is pure. Retain it.” His definition of a hero: One who does what is needed, one who hears “no” but thinks “not yet,” whose creativity and innovation may be mocked by traditionalists, who rushes in when everyone else is rushing out, and who fans the flames of progress. Highlights of the evening included:
* Kathy Pelletier of Berlin, Vt., shared family reminiscences of her grandfather, Roy F. Bergengren, who pioneered credit unions throughout the U.S. and helped found what is now CUNA. “My research took me to another understanding inside the gentle man who I learned was tenacious” in advocating for credit unions. During his crusade with Edward A. Filene to form credit unions, he said, “We agreed that when we disagreed, I’d make the decisions. Filene was Credit Union National and I was the Extension Bureau.” * CUNA President/CEO Dan Mica presented Credit Union Magazine’s 2009 Credit Union Hero Award to Cathie Tierney, CEO of Community First CU, Appleton, Wis. The credit union recently won its lawsuit against the U.S. government over the Internal Revenue Service’s policy on unrelated business income tax. The credit union stepped forward to help all credit unions. “You did it,” he told Tierney. “It took the jury about 12 seconds to rule in favor of Cathie’s credit union” in a decision “that affects all 8,000 credit unions,” he said. Mica noted that CUNA, CUNA Mutual, and the leagues spent more than $1 million to defend credit unions in the case and that other credit unions may be asked to step up on behalf of credit unions. * Attendees were treated to a special appearance by historic U.S. Sen. George Norris from Nebraska, who gave a “first hand account” of the events leading up to the Federal Credit Union Act of 1934. Norris was portrayed by former state legislator Dave Landis, who noted that “nothing is so irritating as a good example” and that’s what credit unions have been doing to banks.
In addition to regular coverage of the events, News Now will be blogging and tweeting during ACUC. Use the link to access the blog and check LiveWire regularly for tweets. Also check creditunionmagazine.com for daily stories.

CU System briefs (06/19/2009)

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* FARMERS BRANCH, Texas (6/22/09)--A Pharr, Texas-based credit union is alerting other credit unions to a scam that uses "Doing Business As" (DBA) accounts. NAFT FCU President/CEO Suzy Brinkman-Doughty told the Texas Credit Union League that a man and woman visited one of the $50 million asset credit union's branches and each opened a personal account and a DBA account. Soon after, several small checks were deposited into the DBA accounts. On the same day as the deposits, the couple visited another branch of the credit union and withdrew the funds. Brinkman-Doughty said payroll checks starting arriving but there were no funds in the DBA accounts to cover the checks so the credit union returned them. Many of the checks were cashed at a local grocery store, but others were cashed at area financial institutions, including credit unions. The credit union closed the four accounts. "My concern is that if it happened to us, it could easily happen to another credit union. We were lucky and caught it right away. By alerting others, it is my hope that we can help other credit unions avoid losses," said Brinkman-Doughty (LoneStar Leaguer June 19) … * RANCHO CUCAMONGA, Calif. (6/22/09)--The California and Nevada Youth Involvement Network (CNYIN) has awarded $500 scholarships to three high school and college students from the two states for their winning entries in the network's annual essay contest. Amy Cook, Kara Nicholls and Amber Perez each received a scholarship for their essays on the topic, "What are the advantages of credit union membership in the current economic conditions?" "The winning entries this year provided a glimpse on how credit unions have provided a safe economic haven for young people and their families, despite these tough economic times," Michael Lee, CNYIN board chairman and education manager with The Golden 1 CU, Sacramento … * HARRISBURG, Pa. (6/22/09)--Robert Vuono, CEO of Omega FCU, Pittsburgh, died unexpectedly Thursday, the Pennsylvania Credit Union Association has learned. Vuono had been CEO of the $69 million asset credit union since 1988. He served on the Pennsylvania Credit Union Service Centers Inc. board of directors. Funeral arrangements were pending (Life is a Highway June 19) …

Maine CUs support states housing incentives

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PORTLAND, Maine (6/22/09)--Maine Gov. John E. Baldacci announced a new homeownership incentive Thursday for first-time homebuyers. Among its supporters: the Maine Credit Union League. MaineHousing's new "Gift of Green" homeownership incentive provides eligible First Home program borrowers up to $5,500 in financial incentives toward the purchase of a home, said the governor in a press release (US Fed News June 19). By combining the amount with existing federal incentives, the total financial incentives can be as much as $15,000, Baldacci said. The initiative helps make homeownership more affordable for first-time homebuyers, said John Murphy, league president. "In these challenging economic times, these opportunities are even more critical. Maine's credit unions have a long history of helping people, so helping make the dream of owning a home a reality for more Maine people is consistent with that commitment," he added. The Gift of Green offers a grant of up to $5,000, not to exceed 4% of the loan amount, to help with the down payment and other closing expenses. It also offers a coupon of up to $500 for a pre-weatherization and post-weatherization home energy audit. In addition to the league, the program is supported by the Maine Association of Realtors and the Maine Association of Community Banks.

North Carolina league awards announced

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PINEHURST, N.C. (6/22/09)--The North Carolina Credit Union League recognized credit unions and credit union professionals during the league’s 74th annual meeting held last week in Pinehurst (Weekly Update June 19). Awards and winners were:
* Larry Johnson Order of Merit Lifetime Achievement Award--Roger Shelor, president/CEO, Carolinas Telco FCU, Charlotte; * Mark of Excellence Award--Maurice Smith, president/CEO, Local Government FCU, Raleigh, and Bob Cathey, chairman, Mountain CU, Waynesville; * Ronald J. Hutchins Credit Union Career Person of the Year Award--Bobby Hall, senior vice president, State Employees’ CU, Raleigh; and * Ronald J. Hutchins Credit Union Volunteer Person of the Year--Curtis Ring, Summit CU, Greensboro.
The Louise Herring Philosophy in Action first-place award winners were:
* Members CU, Winston Salem, Jack Braswell, president/CEO, $50 million to $250 million assets; and * State Employees’ CU, Raleigh, Jim Blaine. president/CEO, more than $250 million.
Desjardins Youth Financial Education first-place award-winners were:
* American Partners FCU, Reidsville, Dorinda Edwards, president/CEO, $35 million to $75 million assets; and * Allegacy FCU, Winston Salem, Ike Keener, president/CEO, more than $250 million.
Dora Maxwell Social Responsibility Award first-place award-winners were:
* Latino Community CU, Durham, Luis Pastor, president/CEO, $50 million to $100 million assets; * Premier FCU, Greensboro, Willie Combs, president/CEO, $100 million to $200 million; * Self-Help CU, Durham, Thad Moore, vice president, $200 million to $500 million; and * State Employees’ CU;
The Chapter Category first-place Dora Maxwell award-winner was the Northwest Chapter.

Milwaukee CUs face merger pressures

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MILWAUKEE (6/22/09)--Two suburban Milwaukee credit unions are dealing with regulatory requirements to address undercapitalization. One option is for the two credit unions to merge into healthier credit unions. The National Credit Union Administration (NCUA) and the Wisconsin Office of Credit Unions are working with Allco CU, West Allis, Wis., and First Security CU, Elm Grove, Wis., to fix their capital issues, said NCUA (The Business Journal of Milwaukee June 18). “Both institutions are undercapitalized per their 5300 call reports and are thus subject to net worth restoration plan requirements,” John McKechnie, NCUA director of public and congressional affairs, told News Now. “NCUA is not going to comment on the merger process regarding the names or the number of bidders. “We are saying that a merger is one of the possibilities being considered,” he added. “That’s per our regulations.” The $49.4 million asset Allco’s net worth ratio was 2.7% at the end of the first quarter, and the $35.4 million asset Security’s net worth was 0.29%. NCUA says 6% is an adequate capitalization level, the Journal said. Allco posted a first-quarter net loss of $146,915, and listed loan delinquencies of $5.4 million for the first quarter--a 16.4% increase from the previous quarter. First Security said it had a net loss of roughly $2.3 million for the quarter---mostly for loan loss provision, the Journal said. In a separate matter, Lifetime CU, a $32.4 million asset, West Allis-based credit union-- which posted a first-quarter net loss of about $2.2 million--is slated to merge into $1.282 billion asset, New Berlin, Wis.-based Landmark CU by June 30, the Journal reported.

Syndicated TV show features co-ops CUs

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MADISON, Wis. (6/22/09)--A short segment about cooperatives and credit unions will run on national television over the next few weeks. Stacy Johnson, host of a syndicated television program called Money Talks News, just launched the segment that includes Paul Hazen, president/CEO of the National Cooperative Business Association, talking about the nature of cooperatives. “Cooperatives allow small-business owners to remain independent and, at the same time, compete in the global economy against big-box stores because we’re working for each other’s benefit,” Hazen said in the segment. Johnson mentioned that cooperatives comprise not only small businesses but also credit unions. Also featured is Ralph Crockett, CEO of BrightStar CU, Fort Lauderdale, Fla. He talks about credit unions as an alternative to bigger banks. “I have people tell me about their 18.99% credit card [interest] rates,” Crockett said. “They have no idea that credit unions are available to give them a better deal.” To view the segment, use the link.

Desjardins named greatest Canadian cooperator

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OTTAWA, Canada (6/22/09)--Alphonse Desjardins, the driving force behind Canada’s credit union movement, has been named history’s “Greatest Canadian Cooperator” after an online vote of more than 8,000 people in Canada. The Canadian Co-operative Association (CCA) announced the winner in Ottawa Thursday, in celebration of the 100th anniversary of Canada’s organized national cooperative movement (Canada Newswire June 19). “There are few individuals who have contributed more to the global credit union movement and especially North American credit unions than Alphonse Desjardins,” Pete Crear, president/CEO of the World Council of Credit Unions, told News Now. “It’s not surprising he would be chosen as Canada’s top cooperator. It’s an honor that only begins to touch the many contributions he has made.” Desjardins, who died in 1920, was one of 14 pioneers of the Canadian cooperative movement nominated for the award. All 14 were inducted into the virtual Canadian Cooperative Hall of Fame, which was launched at Thursday's event. Desjardins was the founder of Canada’s sixth-largest financial institution--Desjardins Group. It is also the largest cooperative organization of any kind in Canada, based on turnover, and the 33rd largest cooperative in the world. Desjardins, born to impoverished parents in 1854, established North America’s first cooperative savings and loan society--a caisse populaire, or “people's bank”-- in Lévis, Quebec, in 1900 as an alternative to commercial banks that charged exorbitant interest rates to farmers and workers. His example inspired the creation of credit unions across Canada and the U.S., CCA said. America’s credit union movement is celebrating the 100th anniversary of its first credit union this year.

Ohio CUs among FIs sued over ATM fee notices

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TOLEDO, Ohio (6/22/09)--An Ohio credit union is among five financial institutions in the state being sued over ATM charges. Plaintiff Maryann S. Kuzila filed a class-action suit Tuesday in the U.S. District Court of Toledo against Fremont (Ohio) FCU and four banks. She alleges the credit union and banks cannot charge usage fees on ATMs without fee notices because it violates the Electronic Funds Transfer Act. The act requires that a fee notice must be posted on or at an ATM if fees are charged. Kuzila withdrew cash from an ATM in Fremont, according to court documents. She did not have any accounts with the credit union or banks operating the ATM and was charged a $2 fee. She claims that the ATM did not have a fee notice. Similar suits have been filed in Pittsburgh. Daniela Helkowski filed suit May 19 against Clearview CU, Moon Township, Pa., for charging ATM fees without notices. Helkowski claims she withdrew cash from an ATM at the credit union’s main branch and was charged $2.25. She also filed a suit against a bank in Sewickley, Pa. (News Now June 3).

State asks Pa. CUs help on volunteer service effort

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HARRISBURG, Pa. (6/22/09)--The Pennsylvania Department of Banking and the Governor's Office have asked for credit unions' help in a new state initiative involving community service by financial service professionals. The Pennsylvania Credit Union Association (PCUA) said it was contacted by the two offices to enlist help with "Get Help Now Pennsylvania," (Life is a Highway June 19). The program is a statewide outreach effort to provide free assistance and referrals to Pennsylvanians who have been negatively affected by the financial downturn. The program will run from July 7 to Sept. 11--a national day of service and remembrance--and will include members of the legal profession and the financial services industry at 21 locations throughout the state. The state will conduct a simultaneous webcast today to outline details. PCUA President/CEO Jim McCormack said the association hopes to have credit unions represented at all 13 webcast locations.

N.C. governor honors CUs 100 years

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GREENSBORO, N.C. (6/22/09)--North Carolina Gov. Beverly Perdue earlier this month issued a proclamation honoring the 100th anniversary of credit unions in the U.S. In the proclamation, Perdue notes the long history of credit unions in North Carolina and their impact on citizens in the state, according to the North Carolina Credit Union League (Weekly Update June 18). "Credit unions within and beyond this state have continually and vigorously fought the ever present evil of usury and have championed the idea that people from all walks of life should have access to low-cost consumer loans and other financial services," Perdue wrote. The June 8th proclamation was read during the North Carolina Credit Union League business meeting Wednesday. The proclamation also noted milestones in the state's credit union history, including the founding of the state's first credit union in Lowe's Grove in 1915 and the founding of the league 75 years ago.

SECU Foundation donates 300000 to hospice

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RALEIGH, N.C. (6/22/09)--State Employees CU (SECU) of North Carolina members pledged $300,000 through the SECU Foundation to complete construction of Mountain Valley Hospice and Palliative Care in Dobson, N.C.
About 250 Raleigh, N.C.-based State Employees CU (SECU) team members participated in a three-mile march May 2 to raise money for the March of Dimes. SECU raised $52,000 for the charity. (Photo provided by State Employees CU)
Mountain Valley is the first freestanding hospice facility in Surry County. It will serve terminally ill patients and their families from 16 counties. The facility offers 20 patient and family suites to help individuals who are dying and can no longer remain at home. “We know the funds for Mountain Valley Hospice will have a direct positive impact on growing numbers of families and residents seeking hospice care,” said Lilnette Phillips, senior vice president of SECU’s Mount Airy branch. SECU has $16 billion in assets.

PolishSlavic FCU hosts NCUAs Hood

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BROOKLYN, N.Y. (6/22/09)--National Credit Union Administration Vice Chairman Rodney E. Hood visited Greenpoint, Brooklyn, the neighborhood that created the $1.2 billion asset Polish and Slavic FCU (PSFCU), to see the credit union thriving because of its close affiliation with the area.
National Credit Union Administration Board Vice Chairman Rodney Hood, center, visits with, from left, Krzysztof Matyszczyk, board chairman of Polish and Slavic FCU (PSFCU), and Bogdan Chmilewski, PSFCU CEO, at the ethnic credit union's headquarters in Brooklyn, N.Y. (Photo provided by Polish and Slavic FCU)
"It is so impressive to see how this neighborhood has continued to experience such positive changes over the past few decades, and much of that credit has to go to the PSFCU, which has proven to be Greenpoint's most active advocate," Hood said, noting the "symbiotic relationship at work between neighborhood and credit union." Hood said he saw how an older, rundown neighborhood had benefited from the credit union's commitment to providing financial services to the community. "When a management team pairs with dedicated community leaders--whom you have on your board of directors--the outcome is a financial institution that posts great financial results," he told the credit union. He pointed to PSFCU's rapid growth the past year, its banking innovations and its donations and scholarship programs as examples of how to become a strong and successful community leader. "You can say that we are the 'un-bank,'" said Bogdan Chmielewski, PSFCU's CEO. "We continue to make good loans--smart, well-secured loans--and we are deeply involved in improving the prospects not only of our members, but the cities, towns and neighborhoods where they live and work." He noted that PSFCU has expanded far beyond Greenpoint but "we've never uprooted our commitment to serving our members, no matter where they live." During the meeting Hood answered questions about corporate credit unions and the impact their problems might have on natural person credit unions and emphasized the credit union movement is becoming stronger as more consumers become attracted to its safe financial practices.

52K for March of Dimes SECU sets record

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RALEIGH, N.C. (6/22/09)--State Employees CU (SECU) of North Carolina raised a record $52,000 for the March of Dimes during its Triangle March of Dimes March for Babies campaign. The figure is $9,000 more than SECU raised last year. About 250 SEC members participated in a three-mile march held May 2. SECU employees also held bake sales, raffles and other activities throughout the year to raise money. The March of Dimes focuses on research to prevent premature birth, and education to help women reduce their risks of having a premature baby, according to Sarah T. Moore, executive director of the Eastern Carolina Division of the March of Dimes. “Each year, more than a half million babies are born too soon, too small or too sick in the U.S.--that’s one in eight babies, or 26,000 babies in North Carolina,” she said. SECU, based in Raleigh, N.C., has $16 billion in assets.

CU System briefs (06/18/2009)

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* SYDNEY, Australia (6/19/09)--Australian credit unions experienced a 13% growth in deposits in the past year, according to the Australian Prudential Regulation Authority (Australian Financial Review. Deposits in the nation's credit unions totaled $4.5 billion. Of that amount $4.3 billion were term deposits, the regulator said. It did not state what caused the increase, but credit unions in the country, like credit unions all over the world, have seen an inflow of deposits from consumers worried about the economy … * HARRISBURG, Pa. (6/19/09)--Credit Union National Association senior economist Mike Schenk provided a look at the state of the economy, both national and in Pennsylvania, during a CEO Leadership Workshop in Harrisburg Wednesday, said the Pennsylvania Credit Union Association. Schenk noted that while numbers are bleak, there is light at the end of the tunnel. The outlook will still be dark for some time, but the economy is moving in the right direction, he said. The good news: credit union loan growth is nearly double the rate found during times of economic downturns, he told the group (Life is a Highway June 18) …

Internet use tripled from 1997 to 2007 says Census

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CHICAGO (6/19/09)--Credit unions might want to make more use of online delivery channels for their members, if the use of the Internet among the general population is any indication. Household Internet use has tripled in the decade between 1997 and 2007, reports the U.S. Census Bureau. In 2007, about 62% of households used the Internet. That's an 18% increase from 1997--the first year the Census Bureau began noting the population's Internet habits. Sixty-four percent of survey respondents age 18 and older accessed the Internet from any location in 2007. That compares with 22% the decade before. Of households accessing the Internet in the most recent survey, 82% did so with a high-speed connection, while 17% had dial-up connections. In 2007, households in Alaska and New Hampshire had the highest rates of Internet use from any location, such as work, home or public access, for residents aged three and older. Mississippi and West Virginia had among the lowest rates of Internet use--52%. Education played a role in how much the population accessed the Internet. Eighty-seven percent of individuals aged 25 and older and who had earned a bachelor's degree accessed the Internet from any location in the most recent study. That compares with 74% of those with "some college," 49% of those with a high school diploma, and 19% of those without a high school diploma. As for race and origin, 69% of whites use the Internet, compared with 51% of blacks, 73% of Asians, and 48% of Hispanics. It is no surprise that younger people were more likely to have online access--73% of 18- to 34-year-olds access the Internet. That figure is more than double the 35% of consumers aged 65 and older online. Of children age 3 to 17, roughly 56% used the Internet.

INews NowI will blog tweet from ACUC

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MADISON, Wis. (6/19/09)--Credit unions can get instant online coverage of the latest happenings during America's Credit Union Conference and Expo (ACUC) in Boston via blogs, twitter, and daily stories in News Now and Credit Union Magazine's website. The conference, presented by the Credit Union National Association (CUNA), will kick off Sunday and end Wednesday afternoon. Leigh Gregg, CUNA online editorial director, will provide frequent convention updates on the America's Credit Union Conference blog produced by News Now. She also will tweet shorter tidbits on News Now's LiveWire, a service through Twitter, as well as provide stories daily to News Now. Kathy Kuehn, CUNA director of credit union periodicals, and Jim Hanson, CUNA vice president of personal finance, also will be on site reporting for the ACUC Daily coverage in creditunionmagazine.com, as well as providing coverage for News Now. Coverage will begin Sunday night. Watch for the ACUC Daily and ACUC icons appearing on CUNA's website at www.cuna.org.

Record attendance at Louisiana GAC

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HARAHAN, La. (6/19/09)--Nearly 100 Louisiana credit union professionals and volunteers representing 30 credit unions statewide attended the 2009 Louisiana Credit Union League Governmental Affairs Conference (GAC) June 9-10 in Baton Rouge. The event had record attendance. The Louisiana GAC is an annual opportunity for Louisiana credit unions to be heard by their elected officials in Baton Rouge. Anne Cochran, league president/CEO, thanked credit unions for their support and political efforts on behalf of the movement. Featured guest speakers included, John Flagg, National Credit Union Administration; Kirk Cuevos, Dollar & Associates; Loren Scott, Loren C. Scott & Associates; Sid Seyour, Louisiana Office of Financial Institutions; and Michael Xenos, Ph.D., Louisiana State University. El “Bubba” Henry and Jeff Brooks, both with the league’s retained lobbyist/legal counsel, Adams & Reese, briefed attendees on state and national political activities. Attendees shared their position on credit union issues with a number of senators and representatives. Also present and representing the attorney general’s office was Malcolm Myer, director of capitol operations and legislative affairs. “Opportunities to interact one-on-one with our state legislatures provide great inspiration to our credit union officials, showing them that their long-term commitment to political action and fundraising efforts truly do make a difference,” said Connie Major, league executive vice president. “By attending the 2009 Louisiana GAC, attendees were informed and are now prepared to make decisions on upcoming legislation and regulations,” Cochran said. “They are able to play a more proactive role in the legislative future of the Louisiana credit union movement. Individually we are but one voice that could easily get lost in the crowd. But together, credit unions are a force to be reckoned with.”

Wegner Awards deadline extended

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MADISON, Wis. (6/19/09)--The National Credit Union Foundation (NCUF) has extended the deadline for Wegner Awards nominations from today to June 30. “We understand several credit union leaders are still preparing Wegner Awards nominations, and we want to make sure everyone has an opportunity to compete for the movement’s highest national honors,” said NCUF Awards and Recognition Committee Chairman Bob Schumacher. Nominations are for:
* The Individual Achievement Award. * The Outstanding Organization/Program Award. * The Lifetime Achievement Award.
Nominations can come from individuals and/or organizations. To make a nomination:
* Print out the Wegner Awards nomination form on the NCUF website; * Fill out the nomination form; * Gather at least five letters of recommendation citing examples of the nominee’s achievements relevant to the award criteria; and * Send the nomination form and recommendation letters to NCUF by June 30.
Winners will be honored during the Credit Union National Association’s 2010 Governmental Affairs Conference in Washington, D.C. The 22nd Annual Wegner Awards Dinner will take place Feb. 22 at the Grand Hyatt Washington.

Three states raise 180k for Homes for Our Troops

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BOSTON (6/19/09)--Homes for Our Troops and title sponsors--the Massachusetts Credit Union League, the New Hampshire Credit Union League and the Credit Union Association of Rhode Island--hosted a gala June 13 in Boston to honor severely injured soldiers, and to raise money to build them specially adapted homes.
Click to view larger image The Massachusetts Credit Union League, the New Hampshire Credit Union League and the Credit Union Association of Rhode Island presented a check for $180,000 to Homes for Our Troops president and founder John Gonsalves. Gonsalves (left) and Dan Egan, president of the credit union leagues, presented the check at a June 13 gala in Boston. (Photo provided by the Massachusetts Credit Union League)
During the event, Dan Egan, president of the credit union leagues, presented a check for $180,000 to John Gonsalves, president and founder for Homes for Our Troops, a national nonprofit that helps build specially adapted homes for injured soldiers. “Because of the help given by credit unions, we will be able to move another severely injured veteran, Nathan Hunt, off of our waiting list and start the process of building a home for him and his family,” Gonsalves said. Staff Sgt. Mathew Keil, a quadriplegic as the result of a sniper attack in Afghanistan, spoke at the event. He talked about his recovery and his admiration for the wives and families of severely injured veterans. The Credit Union National Association and credit unions have been active in helping Homes for Our Troops, and worked with the 2008 Democratic and Republican National Conventions to build two homes near the sites of the conventions. Credit unions helped build the homes for Army Sgt. Marcus Kuboy in St. Paul, Minn., site of the Republican convention, and Staff Sgt. Travis Strong in Golden, Colo., near the Denver site of the Democratic convention.

ATM fraud ring arrests made stole from Florida CUs

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JACKSONVILLE, Fla. (6/19/09)--Police in Jacksonsville, Fla., recently made three arrests in a complex ATM fraud ring involving more than 100 people. The ring defrauded a number of Florida credit unions. Ophel Day, Tony Fudge and Jacob Dunn were arrested for depositing bad checks into ATMs and then making withdrawals or purchases before the checks bounced, according to federal investigators (WJXT Jacksonville June 17). The fraud has cost local credit unions from $300,000 to $500,000, police said. Affected credit unions include Jacksonville-based Vystar CU and Mulberry, Fla.-based Community First CU. More arrests will be made, Paul Elliot of the Secret Service, told the newspaper. The scam begins when account holders sell their ATM cards and personal identification numbers for up to $500 to a “recruiter” in the ring, authorities said. The recruiter then passes the information on to the scam’s ringleader. Individuals giving up their card then report the card as stolen (Jacksonville.com June 17). Recruiters deposit checks that are counterfeit, stolen or from closed accounts into ATMs. The active accounts allow a percentage of the money deposited to be immediately withdrawn, with subsequent withdrawals and purchases from businesses conducted before the check is returned, authorities said. Account holders often report that their cards are stolen or lost after the thefts occur. Many are reimbursed for losses they claim--which results in a double whammy to the financial institutions involved, authorities added. In the end, costs are borne by legitimate customers through fees--or in the case of credit unions through the increased cost of conducting business, police and a credit union official told Jacksonville.com.

Newest report shows fraud trends

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MADISON, Wis. (6/19/09)--The recently released May 2009 Online Fraud report from RSA Security Inc.’s Anti-Fraud Command Center provides information for credit unions and others about the latest fraud trends and forecasts for the next 12 to 18 months. These include:
* Muling--the evolution of recruitment scams directed towards unsuspecting individuals to aid in the monetization of stolen goods; * Evolving supply chains, including fraud-as-a-service, which helps online criminals commit fraud; * Significant increase in attacks against the enterprise; * Evolution in crimeware and attack vectors including: a rise in use of the latest crimeware delivery method; fast-flux botnets (a network of compromised computers); improvements in both Trojan functionality and infrastructure; and consolidation of “traditional” phishing and malware attacks.
The number of phishing attacks in April dropped 7% from March attacks, the report said. In the next 12 to 18 months, RSA said it expects to see an increase in enterprise fraud in which online criminals can gain access to sensitive corporate data such as intellectual property and business plans. To stay ahead of the fraudsters, RSA recommends that companies deploy a layered approach to security, which has three core elements:
* Understand the threat landscape--Organizations must understand the threats that are targeting their business and the relative risks they pose. By doing so, organizations can mitigate the risks of online fraud or even prevent it from occurring at all. * Use multi-factor authentication to protect the login--Username and password authentication is not enough to protect access to sensitive data today. Multi-factor authentication--including two-factor and risk-based authentication--are critical to preventing unauthorized access to a user’s sensitive and personal data. * Monitor transactions and activities that occur post-login--Going beyond authentication solutions that can challenge users to assure their identity login, organizations should consider implementing a transaction-monitoring solution that analyzes and challenges high-risk transactions after login has occurred. Transaction monitoring can help identify suspicious post-login activities and mark them for further review.
For more information, see the RSA website.

ACUC attendees can sign True Commitment to CUs

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BOSTON (6/19/09)--Attendees at America's Credit Union Conference (ACUC) next week can pledge their "True Commitment" to credit unions by signing a "Sign of Commitment" for a 5-by-8 signature wall. With each signature, they also will raise funds for the National Credit Union Foundation (NCUF). CUNA Mutual Group will contribute $5 to NCUF for every ACUC attendee who signs the wall. The wall will be displayed at CUNA Mutual's booth, No. 209, in the ACUC exhibit hall. Everyone who signs will receive a wristband to wear as a symbol of their commitment to the credit union movement. The additional support will go toward NCUF's Development Education program, which helps credit unions leverage their commitment to cooperative principles as a competitive advantage in the financial marketplace. Nearly 900 people have earned the Credit Union Development Educator designation. Throughout 2009, the centennial year of the first credit union law, CUNA Mutual has taken the Sign of Commitment to major credit union events to honor credit unions and their members. It was first displayed at the Credit Union National Association's (CUNA) Governmental Affairs Conference in Washington. During the GAC, 600 credit union advocates signed their commitment and raised $3,000 for NCUF (News Now Feb. 25). America's CU Conference and Expo will be held Sunday through Wednesday at the Hynes Convention Center in Boston. It is presented by CUNA.

FirstCorp announces new board members

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PHOENIX (6/19/09)--First Corporate CU (FirstCorp) announced that Robert Swick and Joe Mirachi were elected as new members to the FirstCorp board of directors. Swick, president/CEO of Tucson, Ariz.-based Hughes FCU will serve a two-year term. Mirachi, president/CEO of Tucson Old Pueblo CU, will serve a three-year term. David Doss, president/CEO of Arizona State CU, Phoenix, was elected FirstCorp Board chair. Other board officers are:
* Vice Chair Bruce Rodela, Frontier Financial CU, Reno, Nev.; * Treasurer Robert Ramirez, Vantage West CU, Tucson; * Secretary Dan Desmond, TruWest CU, Scottsdale, Ariz.; and * Director Harry Mateer, Altier CU, Tempe, Ariz.
First Corporate CU is based in Phoenix.

DEs re-enact Estes Park photo of 1934

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BOULDER, Colo. (6/19/09)--A group of Credit Union Development Educators (CUDEs) met in Boulder, Colo., last week for its annual development educators (DEs) workshop and traveled to Estes Park to re-enact a historic photo of a group that met there to create the Credit Union National Association (CUNA) in 1934.
Click to view larger image Credit Union Development Educators met in Boulder, Colo., last week for the annual development educators workshop. Re-enacting a historic photo and meeting of the group that met in Estes Park to create the Credit Union National Association (CUNA) in 1934 are seated, from left, Claire Ippoliti, Kara Kirschner-Brooks, Lois Kitsch, Susan Luke, Barbara Main and Michael Ray. Standing, from left, Theodora Turula, Steven Serfozo, Jake Lay, Tom Decker, Larry Blanchard, Mike Banks, Pamela Tremblay, Bob Schumacher, Jim Dixon, Jeff Purvis and Walt Laskos. (Photo provided by the Credit Union Development Educators)
In 1934, roughly 52 delegates representing 20 states and the District of Columbia gathered to form the Credit Union National Extension Bureau--the predecessor of CUNA. This year is CUNA’s 75th anniversary. The famous photograph of the delegates and their families was taken by Fred Clatworthy Jr. The 20 DEs last week re-enacted the Clatworthy photo to pay tribute to the early pioneers of the credit union movement, and to re-dedicate CUDES to the same spirit, passion and vision of CUNA’s founders. While in Estes Park, the DE group sang a song that delegates 75 years ago sang after completing the by-laws of CUNA. The song and photo re-enactment was documented in a short video created by the group and posted to YouTube. To view it, use the link. Attendees of the workshop also discussed cooperative social responsibility to credit union sustainability. Presenters included Pat Sterner, JFB & Associates; George Hofheimer, the Filene Institute; Dennis Paul, Elevations CU, Boulder; and Mary Roosevelt, Thistle Community Housing.

Americas CU Conference kicks off Sunday in Boston

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MADISON, Wis. (6/19/09)--America's Credit Union Conference and Expo will kick off Sunday afternoon in Boston with a special general session highlighting a special year--the 100th anniversary of credit unions--and honoring the revolutionaries who created the U.S. credit union movement. About 1,500 attendees are expected this year, said Todd Spiczenski, vice president of the center for professional development at Credit Union National Association (CUNA). CUNA is presenting the conference, which will end at noon on Wednesday. "Given the economy, the attendance is better than we hoped. Last year we had 1,600 attending in New York." Spiczenski noted that 52% of attendees already registered are executives and credit union staff, with CEOs having a slight edge in numbers. Forty-eight percent of attendees are volunteer/directors. They represent credit unions averaging $803 million in assets, with the median amount at $263 million in assets. On Sunday, attendees can register for tours of America's Credit Union Museum, housed in the first credit union building in the U.S. Credit Union Magazine's Hero of the Year Award will be presented, and a reception and session honoring the first 100 years of credit unions will follow. The events will include five keynoters.
* Bert Jacobs, co-founder of Life is good, who will tell how he and his brother John turned those three words into a major T-shirt brand with more than $100 million in sales. He will address making a difference while making a profit; * Bill Hampel, CUNA's senior vice president of research and chief economist, and Mike Schenk, CUNA's vice president of economics and statistics, will discuss the best ways to respond to current economic challenges and provide an outlook for the economy; * Dan Roam, author of "The Back of the Napkin: Solving Problems and Selling Ideas With Pictures"; and * Guy Kawasaki, best-selling author of "Rules for Revolutionaries: The Capitalist Manifesto for Creating and Marketing New Products and Services."
The Exhibit Hall grand opening will be Sunday night. More than 325 vendors will be manning 148 booths during the conference. For more information, use the link.

Higher credit scores more apt to see ID theft

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COSTA MESA, Calif. (6/18/09)--Consumers having a high credit score are more likely to become victims of identity theft, because fraudsters using their identities find it easier to get credit, according to a new study from Experian. There is a "significant connection" between high credit scores and becoming a victim of identity thieves, with the occurrence rate of identity fraud rising dramatically as credit scores increase, said the Costa Mesa, Calif.-based credit bureau's fraud and identity solutions group, which conducted the study. The findings "should herald a warning for consumers and businesses alike," said Hiq Lee, senior vice president and general manager of Experian's fraud and identity solutions group. "Identity fraud can damage an individual's finances as well as a company's bottom line and reputation with consumers" (LoneStar Leaguer June 17 and Credit Card News June 9). Experian has no data that suggest thieves specifically target high scorers. Instead, the credit bureau explained that consumers with high credit scores tend to get approved for accounts on a more regular basis. Then, when fraudsters use their identification, they too are more apt to be approved for credit because of their victims' scores. The higher score means easier credit for the fraudsters; lower credit scores mean the fraudster's application is more likely to be rejected. The top 20% of borrowers--who had ratings of 815 and above on the VantageScore 501-990 scale--were victims of 48% of all self-reported identity theft cases. Consumers in the average-to-very good credit ratings--762 to 814--were victims in an additional 13% of fraud cases. Those with lower scores accounted for less than half the fraud cases, while those in the lowest 20% made up 4% of fraud cases. The credit bureau examined about 800,000 fraud cases reported in 2007 and 2008. It parsed the data by victims' VantageScores. VantageScore is an Experian rating system. The more popular FICO scores were not surveyed. Data was provided by bank card issuers, retail card issuers, retail banks, mobile phone providers and utility companies.

Montana CUs VITA sites deemed a success

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HELENA, Mont. (6/18/09)--Nearly 2,215 Montana taxpayers took their W-2s and receipts to credit union VITA sites in Montana during the past tax season to take advantage of the free tax preparation and e-filing services offered there. For the fourth consecutive year, Montana Credit Unions for Community Development (MCUCD)--the charitable giving arm of the Montana Credit Union Network--has partnered with credit unions, the Internal Revenue Service (IRS) and local volunteer tax preparers to bring IRS Volunteer Income Tax Assistance (VITA) sites to Montana communities. Thirteen credit unions sponsored 16 VITA sites in the state, said MCUCD. This past season, they filed 1,886 returns worth over $1.3 million in federal refunds back to the communities. Also, more than $300,000 in state refunds was received at credit union sites. This is an increase from 2008, when many nontraditional and elderly tax payers filed to receive the Economic Stimulus payment. MCUCD began supporting credit unions' tax sites in 2006, with two VITA sites completing 92 returns. Sponsor credit unions provide space, supplies, equipment and management for the VITA program. MCUCD provides financial support and technical assistance for the volunteers and credit unions. The IRS certified volunteers are trained to complete uncomplicated returns for people who earn $42,000 or less. For clients served in Montana's credit union sites, the average adjusted gross income was $16,900. Montana's credit union VITA program received financial support from the IRS, the National Credit Union Administration and the National Credit Union Foundation for the 2009 tax season.

Kansas association announces SFS board officers

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WICHITA, Kan. (6/18/09)--The Kansas Credit Union Association board of directors recently appointed several members to the board of directors of its service corporation, Shared Financial Solutions (SFS). Members appointed to serve a one-year term on the SFS board were:
* Jim Holt, CEO, Mid American CU, Wichita; * Angie Miller, manager, Emporia (Kan.) State FCU; * Vickie Hurt, president, CU 1 of Kansas, Topeka; and * Robert Corwin, president, Meritrust CU, Wichita.
Three members of the SFS board were elected to serve on the executive committee:
* Chairman Larry Damm, manager, Cessna Employees CU, Wichita; * Vice Chairman Garth Strand, president, Hutchinson (Kan.) CU; and * Secretary/Treasurer Erich Schaefer, president, Golden Plains CU, Garden City.

Successionleadership development have merger roles

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MADISON, Wis. (6/18/09)--The role of succession planning and leadership development in successful credit union mergers is discussed in the first of two new CUNA Councils white papers. “Converging Executive Teams: The Role of Leadership Development and Succession Planning in Successful Credit Union Mergers” by the CUNA Councils offers a glimpse into credit union mergers, and approaches for bringing together a leadership team, depending on the scope and circumstances of the merger. Current merger trends and the reasoning behind proposed consolidations, along with the potential impact of a lack of succession planning, are addressed. The paper concludes with three credit union merger case studies detailing how they selected a chief executive, brought together an executive team, and created a leadership development program to ensure the merger strengthened the continuing organization and member ties. A second new white paper examines strategies for customizing collections to fit a credit union’s membership and market. “Collections: Not a Cookie-Cutter Operation” by the CUNA Lending Council examines program structure, industry trends, and working with collections agencies. It also looks at collections philosophies related to helping members versus managing numbers. Dana Rawlings, lending council executive committee member and senior vice president and chief operations office for Smart Financial CU in Houston, said that collections objectives should echo credit unions’ “People Helping People” philosophy. “So many credit unions focus on how many calls you make, and on keeping [delinquency and charge off rates] down,” Rawlings said in the paper. “But if you help members, the numbers will take care of themselves. And those members will send others to your credit union.” For more information, use the links.

MCUA teams up with state on fin ed efforts

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ST. LOUIS (6/18/09)--The Missouri Credit Union Association (MCUA) teamed up with the Missouri Council on Economic Education and Operation Outreach to help train the state’s educators to teach personal finance to students. During difficult economic times, it’s more important than ever for students to learn the basics of finance--from saving and budgeting to money management, MCUA said. Missouri state law requires that all high school graduates take part in a personal finance course prior to graduating. Local organizations are stepping in to help teachers reach students on financial issues. The Personal Finance Workshop for Teachers took place June 11 in Cape Girardeau, Joplin, Kirksville and Poplar Bluff. About 40 teachers participated. The workshop is designed to help teachers find curricula aligned with Missouri’s requirements, provide guidance on how to incorporate all content in one semester and show how to recognize when students master personal finance concepts. “MCUA has been involved for many years in helping Missouri’s educators obtain the tools that they need to teach young people about financial education,” said Julie Schulte, MCUA education and training director. Schulte and MCUA trainer Andrea Janek addressed teachers about money management, budgeting, spending and saving, and investing.

CO-OP gives 30000 to e-payments coalition

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RANCHO CUCAMONGA, Calif. (6/18/09)--CO-OP Financial Services is providing $30,000 on behalf of its member credit unions to the Electronic Payments Coalition (EPC) to support its efforts to inform legislators surrounding interchange while opposing changes to the current interchange fee structure. EPC is a Washington, D.C.-based organization funded by more than 60 credit union, bank and payment systems organizations. The organization is leading the opposition against legislation proposed on interchange fees, such as a bill proposed by Rep. John Conyers (D-Mich.) that would allow merchants to negotiate credit card transaction fees with financial institutions. Interchange revenue is derived from the payment by a retailer’s bank to a member’s credit union when the retailer chooses to accept that member’s credit or debit card for payment. It provides revenue for credit unions to partially reimburse merchants as card issuers for the activities they perform and the risk they take on each transaction, CO-OP said. If the interchange fee is lowered, smaller financial institutions such as credit unions would have to either raise fees or stop offering credit and debit cards, said CO-OP CEO Stan Hollen. “Ultimately, of course, the consumer will be harmed in terms of restricted payment choices,” he added. The Credit Union National Association also supports EPC. CO-OP Financial Services is a credit union service organization that offers ATM network access, debit processing, ATM processing, shared branching, check imaging and mobile payments.

Colorado regulators issue cease orders vs. two CUs

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DENVER (6/18/09)--The Colorado State Commissioner of Financial Services issued cease-and-desist orders against two state-chartered credit unions--Longs Peak CU, Loveland, and Saguache County CU, Crestone. Net losses for the year ending Dec. 31 have lowered Longs Peak CU’s net worth by about $1.2 million. This is the fourth year in the past five that the credit union has suffered a net loss, Commissioner Chris R. Myklebust said in the order. The credit union cannot operate after July 31 without developing an achievable operating budget. Saguache County CU’s net worth fell to 6.40% as of March 31. National Credit Union Administration guidelines require credit unions to keep a threshold of at least 7%. The credit union’s operating expenses-to-average assets ratio is 4.65% as of March 31, without accounting for the effects of corporate credit union stabilization-related expenses. Saguache County CU's other-real-estate-owned (OREO) report indicated that it has 14 real estate loans with a value of $1.3 million and a revised appraisal value of $1.1 million. It also has seven problem loans that could result in $40,000 in write offs. The credit union also has $4.6 million, or 23% of its loan portfolio, in subprime loans. Saguache County CU cannot operate after June 30 without developing a capital restoration plan. It also cannot make additional loans to members with credit scores of 650 or less and must sell OREO property.

CU System briefs (06/17/2009)

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* AKRON, Ohio (6/18/09)--The same woman is suspected of being the prolific robber who attempted three heists in less than an hour Monday in Akron, Ohio. What's more, police suspect she also robbed the National City Bank on Friday afternoon. Monday's first robbery occurred just after 3 p.m. at First Merit Bank. That was followed by an attempted robbery at Charter One bank. The final robbery was at BFG FCU, Akron. The woman entered each institution and presented a note demanding money. However, during the two bank holdups, she fled before receiving money. She received an undisclosed amount during the credit union robbery (The Plain Dealer June 17) … * HARRISBURG, Pa. (6/18/09)--Jerry Hittinger, president/CEO of the $92 million asset PPL GOLD CU, Allentown, Pa., will retire on June 30, according to the Pennsylvania Credit Union Association (Life is a Highway June 17). He has held the position more than 20 years. In 1989, he was hired as general manager of PP&L General Office CU. A year later, it merged with PP&L Lehigh Operating Division CU and took the name PPL GOLD CU. Hittinger was also a leader with the Lehigh Valley Chapter for years. Cheryl Bartholomew will succeed Hittinger as president/CEO … * SALT LAKE CITY (6/18/09)--Sterling Nielson, president/CEO of Mountain America CU, West Jordan, Utah, has been named to the Board of Governors of the Salt Lake Area Chamber of Commerce. His three-year term begins in July. Nielson has been president/CEO at the $2.8 billion asset credit union since last fall. He is vice chairman of the Credit Union National Association accounting subcommittee, a director and past chairman of the West Jordan Chamber of Commerce, a director with the Utah League of Credit Unions, chairman of Member Business Lending LLC, and a member of the National Credit Union Roundtable …

CU Center sponsors high school budgeting seminar

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MADISON, Wis. (6/18/09)--Local high school students got a taste of what life will soon be like in the “real world” Wednesday as they participated in a hands-on budgeting simulation at the Credit Union Center in Madison.
During Wednesday's Mad City Money simulation in Madison, Wis., local high school student Sandrea, on right, receives help balancing her checkbook from Heartland CU employee Josie Matuszak, who is posing as an employee of the Mad City CU. (Photo provided by CUNA)
During the Credit Union National Association’s (CUNA) “Mad City Money” simulation seminar, each student received a job with corresponding salary, a family, and debt. Students then visited nine merchants’ shops to shop for and select necessities such as housing, child care, food, transportation, clothing and more. Their options, which ranged from basic to luxury, allowed students to determine between wants and needs while building a budget, writing checks, and balancing a checkbook. The "merchants"--who were volunteers from Heartland CU in Madison, the UW Cooperative Extension, the Wisconsin Credit Union League, and CUNA--were trained to sell their wares to the students, not to assist the students in their decision making process. While making their way from shop to shop, some students received a visit from the Fickle Finger of Fate, who presented them with an unexpected expense or windfall. At the end of the simulation, the students’ goal was to have less than $100 in their checking accounts. Many of the volunteer merchants were surprised that the students chose inexpensive or modestly priced items over luxury items. “I think these kids may have more awareness of the current recession than I had originally thought,” noted one volunteer. For more information about the Mad City Money simulation kit, use the resource link.

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 $76,000 (US Fed News June 16) … * DALLAS (6/17/09)--A "Train the Trainer" session sponsored by the Texas Credit Union Foundation taught 21 teachers in the Dallas Independent School District (ISD) about the units in the National Endowment for Financial Education's High School Financial Planning Program (NEFE HSFPP). The teachers also learned interactive exercises to ensure effective tactics for reaching students. The Dallas ISD is offering students an economics class this summer in 11 of its 22 high schools. The class incorporates the NEFE curriculum (LoneStar Leaguer June 16) … * BATON ROUGE, La. 6/17/09)--E FCU hosted its second annual Camp
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$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) …

McGrath to give up parking lot to make restitution

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NEWARK, N.J. (6/16/09)--Michael McGrath, who pleaded guilty Thursday to swindling credit unions and others out of nearly $140 million while he headed the now bankrupt U.S. Mortgage Corp. and CU National Mortgage, will lose his interest in a Hoboken, N.J. parking lot to help make restitution. McGrath, who will also forfeit several bank and brokerage accounts, said he used some of the money obtained by selling fraudulent loans to credit unions to cover cash flow problems with U.S. Mortgage's operations as well as personal investments, such as the parking lot (The Jersey Journal June 15 and Examiner.com June 11). The restitution totals about $13 million. The rest of the swindled funds is lost in bad investments. McGrath admitted he directed the servicing manager of U.S. Mortgage to generate false reports for credit unions stating that their loans--which he had sold to Fannie Mae--were still in their portfolios, and to modify data in U.S. Mortgage's servicing system. He also admitted he directed the company's chief financial officer (CFO) to pay off or make monthly payments to credit unions for the fraudulent loans, and directed the CFO and a subordinate to falsify documents. In other actions involving the case, the company's surety bond insurer, Zurich American Insurance Co. and one of its units, Fidelity and Deposit Co. of Maryland, filed a motion Friday with the U.S. Bankruptcy Court seeking relief from a stay that prevents the company from withdrawing and canceling its surety bonds on behalf of U.S. Mortgage Corp. U.S. Mortgage filed for a Chapter 11 bankruptcy on Feb. 23. On April 1, its subsidiary, CU National Mortgage filed for Chapter 11. The court granted the bankruptcy applications on April 13. Before the petition date, Zurich issued 13 surety bonds to U.S. Mortgage. Two of the bonds were cancelled before the petition date. According to the motion filed in court, Zurich says that U.S. Mortgage and CU National Mortgage have ceased originating loans and no longer need the surety bonds to support or guarantee its business operations. The motion filed noted that since the surety bonds continue to secure U.S. Mortgage's obligations up to their withdrawal and cancellation, "U.S. Mortgage is in effect continuing to use the surety bonds as post-petition credit without Zurich's consent or agreement." Zurich is seeking adequate protection in case the mortgage company contests the request to withdraw and cancel the bonds. Zurich is also filing "an administrative priority claim" totaling $21,705.54 for premiums for the surety bonds "that provided a benefit to U.S. Mortgage's estate after the bankruptcy filing." McGrath faces 150 to 240 months in prison. He will be sentenced on Oct. 1.

Ex-sponsor closes shop CU glad it diversified

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ODESSA, Texas (6/16/09)--Complex Community FCU is glad it made a decision in 1995 to expand it membership to all of Odessa, Texas, from its previous membership of only employees of Odessa Petrochemical Complex. The complex is closing. Today, the credit union serves 27,000 members and 11 counties, said Jason Berridge, CEO of Complex Community. It will open a new branch in Andrews, Texas, in August (Odessa American June 13). “We were looking ahead,” credit union board member Jack Westerfield told the newspaper. “Even though we didn’t think this would ever happen out here, in other locations, credit unions were having problems [with sponsor closures].” Although the credit union’s branch near the chemical plant normally was packed on paydays, it no longer is used only by employees. However, Berridge is concerned about the loss of the plant, he told the paper. “I hope it doesn’t have a major effect on the credit union,” he added. “But when you lose 500 jobs, it’s going to have an effect. You just don’t know what the end result will be.”

CUNA Mutual considering appeal in credit life case

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MADISON, Wis. (6/16/09)--CUNA Mutual Group says it is considering an appeal of a federal jury's "excessive" $6.2 million award Friday over its denial of a credit life disability claim on a former school teacher's home equity loan. The jury in Rapid City, S. D., awarded $200,000 in compensatory damages and $6 million in punitive damages to the estate of Teri Powell, who died of cancer in 2007. Her personal representative, Sharon McElgunn, and Powell's attorneys continued to pursue the case. Powell purchased disability insurance from the company in 2001 on a home equity loan and stopped working the following year because of deteriorating health. In 2005, she was diagnosed with cancer and applied for benefits as far back as 2002, the year she stopped working. CUNA Mutual denied the claim, saying she had not contacted the company when she first became disabled in 2002. "CUNA Mutual carefully examines each claim and pays benefits due under the policy," said CUNA Mutual in a statement. "In this case, we talked with Ms. Powell about the claim, explained how she could have our decision reconsidered and ultimately paid all of Ms. Powell's benefits after working with her on the claim. "As a closely regulated industry, CUNA Mutual routinely works with regulators to review claims handling practices. We are fully transparent, and the interpretation of the policy that the plaintiff’s lawyer challenged was one that our regulators have reviewed in the past and raised no question. And we are currently working with regulators to discuss how best to handle this situation. We have also had other courts examine this type of claim and [they] agreed that CUNA Mutual properly handled the claim. "As a mutual insurance company, our responsibility is to administer our claims fairly. We consistently meet that responsibility. In 2008, CUNA Mutual paid out $1.6 billion is benefits to policyholders, of which $385.6 million was in claims for credit insurance. While Teri Powell’s situation was tragic, we disagree with the verdict and believe the award to be excessive. As such, we are considering an appeal in this case."

Dover FCU in Delaware to hit 250M assets

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DOVER, Del. (6/16/09)--Dover FCU was recently recognized as the first credit union in Delaware to grow past $250 million in total assets. The recognition is a sign of the credit union’s strength and ability to meet the financial needs of families statewide, said the Dover, Del.-based credit union. “It is rewarding to have over 35,500 members who have chosen Dover Federal as their financial partner for more than 50 years,” said David Clendaniel, president/CEO. “Our members have trusted us to provide smart financial solutions and that confidence has allowed the organization to truly excel even during tough times.” Dover FCU was chartered by a group of Air Force and civilian workers at Dover Air Force Base in 1958. Today, it serves members, encompassing the military, Delaware families and more than 300 different select employer groups and organizations statewide. There are six credit union branches statewide, with the corporate center in Dover.

Members United Corporate closes Minn. branch

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WARRENVILLE, Ill. (6/16/09)--Members United Corporate FCU will cut its work force by 39 employees and close its Eagan, Minn., branch in 2010 to curtail costs and eventually build capital. The separation dates for the employees will be staggered, Victor Vrigian, Members United senior vice president of marketing, told News Now. The cuts are on top of 84 positions eliminated at the corporate in December. David Preter, president of the corporate, was among the staff reductions in December. After a one-time charge in June for severance and other benefits, Members United said the latest reduction in work force and other changes will result in ongoing savings to its operations of $6.5 million per year--$5.9 million of this will be realized in 2010. When fully implemented, and added to the reductions made last December, the reductions will reduce the corporate’s workforce by 38%. The cuts will realize an ongoing operational cost savings of $18.9 million per year. Reductions have occurred at all levels of the organization. Members United will reduce the size of its office space in Auburn, Mass., in 2009, and Indianapolis in 2010. “The actions announced Friday, although difficult, are a necessary response to the ongoing financial crisis,” said Joseph P. Herbst, Members United CEO. “Moreover, these changes are an essential building block toward the rebuilding of Members United as a smaller, leaner corporate credit union.”

Keeping CU control of networks important--survey

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TALLAHASSEE, Fla. (6/16/09)--Credit union executives surveyed say that keeping control of ATM and point of sale (POS) networks is important to the credit union movement. If they lost control, the executives predicted that the movement would see increases in price and decreases in income.
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The survey was conducted by Credit Union 24, a surcharge-free, credit union-owned, ATM and point of sale network. About 153 credit union executives responded. Easy access to a large network of surcharge-free ATMs is important for credit union members, according to 89.2% of credit union executives polled, and 71.3% said a credit union-owned point-of-sale (POS) network is important for the credit union movement. About 67.4% polled said that if credit unions lost control over ATM and POS access, a price increase/income decrease would occur. Currently credit unions have access to the largest fee-free networks in the nation, with more than 50,000 surcharge-free ATMs and hundreds of thousands of POS terminals at merchants. The statistics show the success achieved from credit union networks that address the direct needs of credit unions and their members, said CU 24. It also concluded that credit unions can evolve these services to even better address members' needs--when credit unions have direct control over these member-contact points. "From these results, credit unions can see the overall picture of where their products and services rank among credit unions," said Jim Park, CU 24 president/CEO. "It also allows networks to more accurately gauge where and how we need to focus our efforts to give credit unions the tools they need." About 61% of responding credit unions said that attracting consumers to become new members in the movement is the No. 1 challenge facing credit unions today--more than the 59% who cited the current economic climate as the main challenge. Roughly 67% said that consumer misunderstanding of credit union benefits over banks is the greatest challenge in attracting new members and directly affects credit union growth in a volatile economic climate. "The survey illustrated that credit unions are currently utilizing multiple products and services that ensure the longevity of their credit union, the overall credit union movement, and the individual credit union member in this challenging economic climate," said Mansel Guerry, president/CEO of Mississippi Employees CU, Jackson, Miss., and CU 24 board chairman. CU 24 also asked what challenges credit unions are experiencing and identified how credit unions are addressing those challenges. The results can help credit unions see "where to focus their membership outreach efforts and target consumers with the elements of credit union membership that benefit consumers most," said Guerry. A majority of credit unions surveyed were currently promoting free checking, online banking, surcharge-free ATM access, and lower fees on mortgages and loans to attract new members. Those polled said promoting these elements will help achieve growth. Guerry noted that credit union members benefit from being a part of the member-owned structure and from being a part of participant-owned networks, which "provide credit unions and their members with a direct voice and choice in their financial services decisions." The survey also asked credit union leaders what they look for in choosing a credit union service organization (CUSO). More than half said that credit union-owned CUSOs do a "better job" of serving credit unions. More than 70% look for exceptional customer service from a CUSO, while 40% look for flexible programs that are customizable.

Survey Non-members like online bankingbill pay

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MADISON, Wis. (6/16/09)--When it comes to preferred service delivery channels, non-members report they are using Internet banking and bill pay more frequently now than a few years ago, says a new Credit Union National Association (CUNA) survey.
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About 68% of non-members who use Internet banking and 62% of online bill payment users report an increased use, according to the 2009-2010 Survey of Potential Members: Membership Growth Strategies. Also, 59% of debit/check card users employ the cards to pay for purchases more often now than three years ago. “Many industry analysts believe that online banking and bill pay have reached the point where credit unions must offer them not just to compete for new members, but to retain current members as well,” said Jon Haller, CUNA director of business-to-business publishing. “Credit unions should also consider adding online loan application capabilities, preferably with an automated approval feature, if they have not done so already.” The survey uncovers new issues, opportunities, and strategies for reaching more than 100 million potential members. The survey breaks down this group by:
* Membership growth opportunities, demographics, and eligibility; * Keys to attracting more members; * Loyalty to current primary financial institution, including overall satisfaction and net promoter scores; * Use of financial services such as convenience, savings, and loan services, along with loan usage and outstanding loan amounts; and * Delivery channels, use and frequency of the most common channels for members versus eligible non-members.
Each chapter concludes with strategic considerations and suggestions on how to best identify and leverage a credit union’s competitive advantages to attract eligible non-members from their current providers. Also, the 2009-2010 National Member Survey--CUNA’s companion report to this survey--reveals trends involving members’ use of financial services and attitudes. It also addresses strategies to build loyalty and attract more business. The report provides information and analysis related to members’ demographics, satisfaction, interest in new services, delivery channels and more. For more information, use the link.

CU System briefs (06/15/2009)

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* BOSTON (6/16/09)--During his recent visit with two Boston area credit unions, National Credit Union Administration (NCUA) Vice Chairman Rodney E. Hood learned about Harvard University Employees CU's (HUECU) new Custom Loan Program for Harvard University Graduate Students. The plan provides financial assistance to students at Harvard's 13 graduate schools and is available to domestic and international students. It couples competitive loan terms with flexible repayment options. He also discussed credit union issues with Susan Elliott, president of the Federal Home Loan Bank of Boston, and Eric Rosengren, president/CEO of the Federal Reserve Bank of Boston. Hood also met with Winthrop FCU and CEO Joe Clark to discuss the importance of serving low-income individuals in underserved areas. From left are Gene Fokley, HUECU president/CEO; George White, HUECU board chairman; Hood; and Dan Egan, president, Massachusetts Credit Union League. (Photo provided by the National Credit Union Administration) … * CONCORD, Calif. (6/16/09)--A global positioning system (GPS) device dropped into one of the bags of money helped nab two men suspected of robbing DC FCU, Concord, Calif., Friday. A man wearing a blue bandanna and carrying a duffle bag entered the credit union, collected an undetermined amount, and got into a getaway car. The suspects were detained in Pittsburg, Calif. (Mayor of Concord.com via SFist.com June 12) … * BEAVERTON, Ore. (6/16/09)--The Credit Union Association of Oregon (CUAO) has hired Jennifer Wagner as its new director of credit union advocacy. Wagner will oversee CUAO's grassroots advocacy efforts including the CU Advocate program, Credit Union Legislative Action Committee fundraising and other legislative outreach initiatives. Previously Wagner worked as a field representative and legislative assistant for several Oregon congressional members and state representatives including U.S. Reps. Kurt Schrader (D-5) and Darlene Hooley. She also was campaign manager for state Rep. Greg Macpherson. Wagner succeeds Kasey Rockwell, who is now CUAO's director of credit union development … * RANCHO CUCAMONGA, Calif. (6/16/09)--The California and Nevada Youth Involvement Network (CNYIN), in partnership with the Richard Myles Johnson (RMJ) Foundation, awarded its second annual School of the Year Award to Liberty High School in Napa, Calif. It was nominated by Marlene Myers, financial education officer with Travis CU, Vacaville, Calif. Liberty High School, a court community school for students suspended or expelled from a comprehensive campus, received $1,000 as the winning recipient. The award is sponsored by CNYIN, the RMJ Foundation, and contributions from American First CU, Brea, Calif., and Greater Nevada CU, Carson City, Nev. From left are Liberty High School teacher MariJo Dickerson; Travis CU's Myers; and Napa County Superintendent of Schools Barbara Nemko, Ph.D. (Photo provided by the California Credit Union League) …

CU interconnectivity improves Guatemalan service

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CHIQUIMULA, Guatemala (6/16/09)--An interconnectivity device that links Guatemalan small businesses to local credit unions allows members to access their accounts and pay for purchases electronically, boosting business for merchants and credit unions.
Click to view larger image Brian Branch, World Council of Credit Unions executive vice president and chief operating officer (left), visits Guatemalan sporting goods merchant Flavio Sontay to discuss point-of-sale (POS) technology. The POS device can be seen in the foreground. (Photo provided by the World Council of Credit Unions)
Sporting goods merchant Flavio Sontay knows the way to improve his competitive edge is to offer products and services his customers need. In addition to stocking a complete line of soccer balls, athletic shoes and other related merchandise, Sontay is installing a point-of-sale (POS) device that links him to Cooperativa de Ahorro y Crédito Integral San José Obrero R.L (COOSAJO), the credit union that supports his two retail stores. The POS device will enable customers who are credit union members to pay for purchases at the store electronically and withdraw cash from their accounts. “The young people who come here to buy sports equipment are always in a hurry,” said Sontay, whose stores serve Chiquimula, an eastern Guatemalan city of more than 300,000 residents. “They do not want to stop at the credit union to pick up cash and then come to my store to shop, so I will let them do both things here.” In addition to providing convenience, both Sontay and COOSAJO will make a few cents on each transaction. That’s different than the 8% fee the merchant would pay for sales charged on an international MasterCard or Visa, which Sontay now feels less obligated to accept. The POS device is an added advantage that has attracted more businesses to the Central American country's credit unions, according to Brian Branch, executive vice president and chief operating officer for World Council of Credit Unions (WOCCU). “The credit union-issued debit cards work throughout Guatemala's credit union system” Branch said. “Members can access their accounts from any credit union branch, ATM or POS device across the country, paying just a few cents per transaction for the convenience.” Guatemala’s electronic transaction network, similar to those that link credit unions and their members in several Latin American countries, is also part of WOCCU's outreach development plan. Guatemala’s network follows networks already established in Ecuador and Bolivia and is the model for services soon to be offered in Peru. The emphasis on electronic transactions is a new addition to development strategies that in many countries previously focused on marketing efforts and brick-and-mortar facilities, Branch said. “Much of WOCCU's current outreach strategy involves technology applications that expand services into rural areas,” he explained. “We have successfully experimented with service extensions through ATMs, POS devices, personal data assistants and mobile phones.” COOSAJO began its electronic efforts by installing lobby ATMs to reduce teller traffic in late 2008. It took some time for members to warm up to the machines for several reasons, including past negative experiences with electronic transfer technology at other institutions. The credit union addressed such concerns by stationing a receptionist near the ATM who trained members on the equipment. The ATM has since been moved to an enclosure outside the credit union, where transactions have tripled since its initial installation. With the growing acceptance of electronic transaction options, particularly POS devices, merchants like Sontay, have seen increased sales and modest fee income. COOSAJO and other credit unions also benefit from growing acceptance of the technology by members and other area businesses. “The credit unions are gaining trust, along with higher transaction rates, by providing services from gas stations, convenience stores and local restaurant franchises,” Branch said. “They see the greater benefit of being able to serve more members more effectively and more often.”

Federation hails fair mortgage initiative

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NEW YORK (6/15/09)--The National Federation of Community Development Credit Unions hailed the launch of the Fair Mortgage Collaborative (FMC), a coalition of organizations to provide fair and safe loans for low- to moderate-incomers, as an important step in providing access to mortgages with consumers' best interests in mind. The FMC initiative was announced June 10 at the National Council of La Raza (News Now June 11). It aims to certify certain lenders as "safe, "fair," and free of predatory lending to help restore consumer confidence in mortgage lenders. The federation is a co-founder and executive committee member of the collaborative. Cliff Rosenthal, federation president/CEO and treasurer of the FMC, said the federation has worked on the project for four years. "This is an important building block" in certifying credit unions as equitable, trusted and sustainable providers of financial products for consumers, he said. BECU (Boeing Employees CU) in Tukwila, Wash., one of the certified lending organizations in the FMA program, is one of the federation's Community Development Partners, a group of large, high-performing credit unions helping to advance service to low- and moderate-income communities, he said. BECU is a major supporter of the Express CU in Seattle, which became a community development credit union (CDCU) affiliated with a new nonprofit organization to serve low-income communities. "In any initiative like this, reaching scale is a critical challenge. BECU, with more than 600,000 members and assets in excess of $8.7 billion, is the largest credit union in Washington State and the fourth largest credit union in the country," Rosenthal said. "Its participation in this initiative will be extremely important in demonstrating the value and impact of FMC certification, especially at a time when our country desperately needs to restructure the way the mortgage business works." The federation's CDCU Mortgage Center LLC, which purchases affordable fixed-rate mortgages from its member credit unions, has also been certified by the FMC. "We expect there to be substantial demand for certification, which requires a review of credit union mortgage portfolios and practices by an independent third party," Rosenthal said. "Because of our role in the FMC, our member CDCUs and community development partners will be the first credit unions to be eligible for certification."

Quebec banks CUs ordered to pay millions for card fees

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MONTREAL (6/15/09)--A Quebec Superior Court Thursday ordered nine Canadian banks and the federation of Desjardins credit unions in Quebec to repay roughly $200 million in credit card fees charged when consumer made purchases in foreign exchange that were converted to Canadian dollars. The judgments were rendered in three class-action suits by Justice Clement Gascon. They involved the credit unions, plus the Royal Bank of Canada, Toronto Dominion Bank, Bank of Montreal, Canadian Imperial Bank of Commerce, Scotiabank, National Bank of Canada, Laurentian Bank of Canada, Amex Bank of Canada, and Citibank Canada (National Post June 12). Consumers will be entitled to a percentage up to 2.5% on the converted charges, which include purchases made on the Internet. Some banks must pay certain cardholders $25 in punitive damages. The judge also ruled the banks must obey the Quebec Consumer Protection Act. Banks had argued they were not subject to the act because they were federally chartered institutions. In the credit union case, the judge ruled that the Desjardins group of credit unions charged illegal fees between April 17, 2000, and Dec. 31, 2007, and contravened the Consumer Protection Act. He ordered they reimburse consumers nearly $28.4 million, plus interest, but he did not award any punitive damages. The parties will meet within 30 days to iron out the details.

Heartland lawsuit transferred to Houston

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LOUISVILLE, Ky. (6/15/09)--The Judicial Panel on Multidistrict Litigation in Louisville, Ky., ruled Wednesday that the class action data-breach lawsuits against Heartland Payment Systems will be consolidated and heard in the Southern District Court of Texas in Houston. U.S. District Judge Lee H. Rosenthal will hear the case, in which plaintiffs--including credit unions--are seeking to recoup losses from the card payment processor's massive data breach revealed in January. The breach compromised roughly 100 million cards, the largest reported data breach in history, and many credit unions reissued new cards to members whose information was compromised (News Now May 7). Attorneys for the Princeton, N.J.-based Heartland and all but two of the 30 plaintiffs asked for the case to be heard in Texas, according to Bank Info Security June 11). Two plaintiffs, a bank in New Jersey and a bank in Florida, asked that the case be heard in their states. Heartland's information technology staff--who likely would be called as witnesses--are located in Texas (SCMagazine June 11). Attorney Richard Coffman, who represents the Pennsylvania State Employees CU (PSECU), Harrisburg, Pa., and Lone Summit Bank in their suits against Heartland, told Bank Info Security the decision turned around quickly. He noted that Judge Rosenthal has experience with class action lawsuits, is considered fair and even-handed, and moves her docket. "We couldn’t have pulled a better judge for this case," he told the publication. PSECU's suit alleges breach of contract, negligence, equitable indemnification (in which it says Heartland benefited from the $3.4 billion asset credit union canceling and replacing cards for its members), restitution, unjust enrichment and violations of the New Jersey Consumer Fraud Act. Thirty-one separate lawsuits, on behalf of consumers, investors, banks and credit unions, have been filed in the Heartland case. The judicial panel in Kentucky also decided that another data breach case, against RBS WorldPay, would move to Georgia.

Does Facebook pose security issues for CUs

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MADISON, Wis. (6/15/09)--With accounts of hackers and spammers infiltrating social networking sites such as Facebook, credit unions will be happy to learn that some of their colleagues using the sites for online banking have not experienced security problems. Parkview Community FCU, McKeesport, Pa., deployed an online banking application, MyMoney, through Facebook last year. MyMoney, by Fiserv, allows Facebook users to manage their credit union or bank accounts through their user profiles. MyMoney hasn’t attracted as many users as Parkview would like, but security has not surfaced as a problem. “We haven’t had anyone say why they don’t use it,” Lechelle Brown, Parkview business development specialist, told News Now. She noted that Parkview’s online banking system, PC Banking, is very popular. “That’s why we decided to use MyMoney,” she said. Parkview plans to keep the product and promote it. The credit union has seen a “boom” in youth opening up accounts at Parkview, and may send out a mass mailing to those members reminding them MyMoney is available. Brown, who uses MyMoney herself, said the application offers multi-layered security. To access MyMoney, a user must log into Facebook with a username and password, and then log into MyMoney with another username and password. Once inside MyMoney, the credit union’s members can view account balances, histories and transfer money--but only to accounts that have been previously approved. Members also can access their PC Banking service by clicking a link on MyMoney. If MyMoney doesn’t recognize the computer used, it will prompt members to answer security questions, Brown said. Because MyMoney allows only certain transactions, it could be tough for someone to steal money. “There’s only limited things you can do,” Brown said. She also noted that MyMoney users cannot see others’ balances or account information when using the application. Parkview tested MyMoney’s security when the application was first deployed to make sure it was safe, Brown said. In Danville, Va., Dan Veasey, Piedmont CU director of marketing, also deployed MyMoney for a trial last year. The credit union experienced no security issues with the application, but some of Piedmont’s younger members were nervous about banking through Facebook. “They knew people who could hack into others’ computers,” Veasey said. Veasey, who is a part-time web developer, said he tested the application’s security and didn’t notice any problems. “The problem isn’t necessarily Facebook--it’s the perception that things are at risk,” Veasey said. SIU CU, which also maintains Facebook, MySpace and Twitter profiles, has had no security issues or negative feedback, said Chris Sievers, marketing director of the Carbondale, Ill.-based credit union. Casey Braswell, marketing assistant at DATCU, Denton, Texas, also told News Now that no security issues have surfaced with Facebook or Twitter. Pioneer CU, Green Bay, Wis., which uses Facebook and Twitter, has not experienced any security problems or concerns from members regarding viruses, Michelle Kozak, Pioneer marketing specialist, told News Now. Pioneer CU does not use an online banking application through Facebook because it is looking into other banking tools, such as account aggregation. Kozak said media outlets often report on hackers and spammers infiltrating sites like Facebook, but said most Pioneer members who use Facebook are Web-savvy and understand that any viruses out there are not specific to the credit union. However, she noted that one member expressed a concern with Twitter. Pioneer, which has nearly 800 Twitter followers, used a community-oriented tool when it first signed up for Twitter to randomly add followers. One of the individuals Pioneer followed happened to be a member. The member contacted Pioneer, concerned that the credit union was specifically seeking out its members on Twitter. “We reassured him that it was completely a coincidence,” Kozak said. “We have more than 750 people who are following--we wouldn’t know or have time to see if they were all members.” Kozak emphasized that a situation like the one Pioneer encountered with a concerned member can be perceived as a good learning experience. Overall, Facebook and Twitter can be excellent tools for credit unions, Kozak said. “It’s a great fit for us,” she said. “We’re credit union people with personalities--not like stuffy banks. It’s what sets us apart.”

OpSS Council Conference to address economic trends

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MADISON, Wis. (6/15/09)--Credit union professionals can find out what is in store for the economy in the coming year and get ideas for responding to current economic challenges during a presentation at the 12th annual CUNA Operations, Sales and Service (OpSS) Council Conference, Sept. 27-30 in Las Vegas. During “Economic Update,” Credit Union National Association Senior Economist Steve Rick will offer his thoughts on the state of the economy, the economic slowdown, and more. He also will provide insight into the outlook for the economy and credit unions. Rick’s economic expertise is frequently featured at conferences, in credit union trade publications, and in media outlets such as The New York Times and Bloomberg Radio, among others. The conference will conclude with a presentation on “How to Build a Better You.” Speaker, author, and Dallas/Fort Worth radio personality Bryan Dodge will explain how top producers and effective leaders stay on the cutting edge and achieve excellence. Dodge will offer tips for personal and professional growth in three key areas: having the best year ever, creating consistent upward growth in life, and harnessing the power of personal energy. The conference also will include sessions to help credit unions become more efficient and make the most of their limited resources. Other topics include:
* Membership growth; * Compromised credit cards; * Business deposits; * Remote contact center; * Evaluating sales and service effectiveness; * Controlling expenses; * Branch efficiencies through automation; * Mergers and acquisitions; * Check 21; and * Remote capture.
For more information, use the link.

CUNA Mutual looks beyond the recession

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MADISON, Wis. (6/15/09)--CUNA Mutual Group said it is maintaining strong operational and capital positions, weathering the recession well, and looking within and beyond credit unions for future diversification opportunities engendered by the current economic downturn. CUNA Mutual has been weathering the recession from an operational standpoint and a capital standpoint, Jim Buchheim, vice president of corporate communications, told News Now. “Operationally, last year was a good year,” Buchheim said. “In 2009, we’re expecting less revenue and lower profit levels, but still a pretty solid year. We feel we’re on pace to meet our 2009 financial goals from an operational perspective.” From a capital standpoint, the company entered the recession with a good capital position and now is taking steps to maintain it, Buchheim said. Capital involves two measures: statutory capital and GAAP (generally accepted accounting principles) capital. CUNA Mutual’s statutory capital was $980 million at the end of 2008--down from $1.035 billion at the end of 2007. The drop is primarily due to losses in the mortgage securities area, Buchheim said. “We feel that by the end of 2009 we can maintain our statutory capital level,” he added. “We’re also pleased to have A.M. Best affirm our ‘A’ level rating, and Fitch Ratings affirmed our ‘A’ (strong) rating.” The company’s GAAP capital experienced more significant declines because of unrealized losses, Buchheim said. “We still have $1 billion in cash to cover operations, and we can hold on to our bonds until maturity,” he explained. “So we feel good about 2009 because our operational results and capital give us a strong financial position.” Although CUNA Mutual has felt the pain of the recession from some losses and needed cost-cutting measures including layoffs, the company sees opportunities created by the recession and wants to be prepared to take advantage of those opportunities, Buchheim said. The company sees avenues to diversify both outside the credit union space and within the credit union space, he added. Within the credit union space, CUNA Mutual is looking to add to its suite of products in areas such as “Member Connect”--a marketing engine in which the company partners with credit unions to sell insurance products to credit union members. The program generates revenues for credit unions. Also, CUNA Mutual has maintained a strong level of financial support to state credit union leagues and the Credit Union National Association in excess of $30 million per year, Buchheim said. “No other competitor provides that level of support to the credit union space as CUNA Mutual does,” he added. “It’s not even close.” Outside the credit union arena, CUNA Mutual hopes to expand in these areas:
* Crop insurance--The company launched this product a few years ago and is continuing to evaluate it; * 401(k)s--The company aims to move beyond servicing credit unions with this product and provide it for small businesses; and * Debt protection--The company successfully provided this product to credit unions, and now is looking beyond the credit union industry. CUNA Mutual began a pilot about a year ago with the farm credit business and is evaluating investing more in this area in the future.
“We remain a financially strong company committed to credit unions and credit union members. We are cautiously optimistic about seeing the end of the recession in 2009. We see opportunities for growth and expansion in reaching our goal to provide more value to credit unions and our credit union policyholders,” Buchheim concluded.

CU System briefs (06/12/2009)

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* HARRISBURG, Pa. (6/15/09)--The Pennsylvania Credit Union Association (PCUA) contributed to a public policy report on the state's economy, unveiled by the Pennsylvania Business Council at a press conference in the Capitol Rotunda. PCUA is an active member of the council, a group of representatives from pro-business organizations. The report details the group's plans to make the state's economy more competitive in the 21st century. Large and small businesses contributing were from the state's industries such as oil and gas, hospital, insurance and banking industries, and chambers of commerce (Life is a Highway June 12) … * ALBUQUERQUE, N.M. (6/15/09)--Credit Union Association of New
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Mexico (CUANM) staffers (from left) Patrick Turner, Elisa Furlan-Young, Devon Van Hecke and Maria Griego were in 1950s attire at CUANM's annual convention June 3-5 in Albuquerque. The theme was Fiftiesville, to mark the association's 50th anniversary. More than 200 credit union professionals, vendors and guests attended. The event raised about $20,000 for the pediatric emergency unit at UNM Hospital and Children's Miracle Network. This year, CUANM and affiliated credit unions will complete a five-year campaign to raise $1 million for the construction and equipment of the pediatric emergency room. (Photo provided by Credit Union Association of New Mexico) … * ST. LOUIS (6/15/09)--Missouri state Rep. Jill Schupp (D-82), right, stopped by the Electro Savings CU's main branch in St. Louis June 2 (The Missouri difference June 12). During the visit, Schupp learned more about the credit union's efforts involving Homes for Our Troops (HFOT), overcoming members' financial difficulties and maintaining the best interest of the credit union membership. Here, Schupp congratulates credit union President Stan Moeckli on the credit union's raising $900 for HFOT. "It's important for credit unions to stay in contact with legislators outside Hike the Hill and annual meeting visits," said Moeckli. "Meeting with a legislator one-on-one at a credit union office really gives us the opportunity to showcase our individual member interaction and community involvement." (Photo provided by the Missouri Credit Union Association) …

WOCCU Minn. network advocate for Paraguay CUs

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ASUNCION, Paraguay (6/15/09)--With credit unions in Paraguay playing an increasingly greater role in their members’ lives, government regulations and oversight that foster--rather than inhibit--credit unions’ ability to serve members are critical to the growth of the country's credit union movement.
From left, Minnesota Credit Union Network board members Jeff Schwalen and Dick Nesvold visit with CENCOPAN Chair Modesto Segovia and COOPEC CU CEO Juan Centurión in Paraguay. (Photo provided by World Council of Credit Unions)
That message was delivered by delegates from the World Council of Credit Unions (WOCCU) and the Minnesota Credit Union Network (MnCUN). They recently visited Paraguay's lawmakers at the invitation of Central de Cooperativas del Area Nacional (CENCOPAN), WOCCU’s member organization in the South American country. MnCUN and CENCOPAN have been partners joined through WOCCU's International Partnerships Program since 2004. The invitation to speak with lawmakers coincided with CENCOPAN's 15th anniversary and its seventh international seminar. CENCOPAN raised the need for outside advocacy efforts after a 2008 shift in the Paraguayan government brought an end to the former political party’s 61-year administration. Alianza Patriótica por el Cambio (Patriotic Alliance for Change) comprises eight political parties that CENCOPAN officials felt needed to better understand the role that Paraguayan credit unions play in their members’ lives, according to Modesto Segovia, CENCOPAN board chair. “The mission of these visits was to provide government officials with a proper perception of the industry and educate them about the work credit unions do for their members,” Segovia said. “The presence of the U.S. delegates also demonstrated that CENCOPAN maintains international ties with similar organizations worldwide.” As of December 2007, Paraguay had 224 credit unions that served 789,000 members--a market penetration rate of close to 20%. In addition to offering financial services at competitive rates, many of the country's credit unions host on-site healthcare facilities, including pharmacies and emergency medical units. They also offer financial literacy courses for individuals and micro-entrepreneurs who are members. The delegation visited Paraguayan government officials and met with Liliana Ayalde, U.S. ambassador to Paraguay, to highlight ties between WOCCU, MnCUN and the Paraguayan credit union movement, and to discuss the growing importance credit unions have played in serving low-income members nationwide. The official meetings were followed by CENCOPAN’s international seminar, which attracted more than 300 attendees nationwide. Delegation member Jeff Schwalen, MnCUN board member and president of Hiway FCU, St. Paul, Minn., spoke to attendees about challenges facing U.S. credit unions during the country’s turbulent economic climate. Joining Schwalen on the trip were MnCUN board member Dick Nesvold, CEO of SouthPoint FCU, Sleepy Eye, Minn., and Victor Miguel Corro, senior manager of WOCCU’s International Partnerships Program.

U.S. Mortgage exec pleads guilty to defrauding CUs

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NEWARK, N.J. (6/12/09)--The former president of U.S. Mortgage Corp. and its subsidiary, CU National Corp., pleaded guilty Thursday in a U.S. District Court in New Jersey to defrauding $139. 6 million from 19 credit unions, Fannie Mae and others. Michael McGrath, 46, pleaded guilty to one count of mail and wire fraud and one count of money laundering conspiracy, according to Ralph Marra, acting U.S. attorney for the District of New Jersey (Reuters June 11). Under a plea bargain, McGrath is expected to be sentenced to between 12 1/2 and 20 years in prison and to pay restitution to the victims, said prosecutors. U.S. District Judge Katharine Hayden set an Oct. 1 sentencing date. Until then, McGrath is confined to home under a $1 million bond. He admitted to conspiring with others from January 2004 to January 2009 to fraudulently sell credit union loans and use the proceeds to finance U.S. Mortgage's operations as well as investments for himself and the company. McGrath also admitted to diverting funds that should have been paid to credit unions for mortgage loans that were sold to Fannie Mae to help offset bad investments he made in mortgage-backed securities, prosecutors said. An attorney for McGrath, John Vazquez, said in a statement McGrath "extends his deepest sympathy" to the victims and will continue to work with authorities, Reuters reported. Court records indicated that McGrath posed as an executive for the credit unions, sold the mortgages to Fannie Mae for servicing without the credit unions' authorization, and pocketed the proceeds from the loans (News Now March 2). The mortgage companies, based in Pine Brook, N.J., filed for a Chapter 11 bankruptcy on Feb. 23 in Newark. The filing documents listed more than $200 million in debts to Fannie Mae and 19 credit unions, among others. The largest unsecured claims are 19 credit unions from New Jersey, New York, District of Columbia, Maryland, North Carolina, Florida and California. Nearly 300 creditors were listed in the bankruptcy petition's accompanying papers (News Now March 2). The mortgages are now being served by Midwest Loan Services and Symbionce Financial Solutions LLC.

Banks take cue from CUs try warm and fuzzy ads

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NEW YORK (6/12/09)--Banks may be taking a page out of credit unions' marketing books, using warm and fuzzy advertising to convey more optimism in an attempt to move on from the financial debacle of the past year. Credit unions had success the past year in their marketing and advertising efforts. They drew national media attention for their messages that they aren't part of the problem but are part of the solutions, that they are safe and sound, and that they are still lending when others aren't. Now, some banks, especially community banks, are starting to convey those same messages And those with ties to the cause of the recession are busy rebranding and airing advertisements that provide a more optimistic, brighter future, according to The New York Times (June 9). Some banks are trying to get the consumers to forget who they were. Case in point: GMAC Bank, long tied to the now-bankrupt General Motors, is now billing itself as the consumer's friend--"Ally Bank, a better kind of bank." AIU, "a unique franchise," is owned by American International Group (A.I.G.). Redneck Bank ("where banking's funner") is the name for Bank of the Wichitas online presence. Bank of America has quit using the Countrywide name because it was a lightning rod for the excesses of subprime lending, said the article. And it recently introduced ads such as "Home has a new address" and "Keep Moving Forward," which features doors opening. Citigroup and other industry giants are reviewing their public image and trying to keep a low profile, said the Times. Citi started airing public service ads, called "The Citi View." The ads provide tips on saving money.

FreedomTruMark Financial present charter argument

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PHILADELPHIA, Pa. (6/12/09)--Two Philadelphia-area credit unions--Freedom CU and TruMark Financial CU--presented their argument for community charters during a hearing Wednesday before the Commonwealth Court in Philadelphia. According to the Pennsylvania Credit Union Association (PCUA), the argument focused on the substantive issue of whether five counties in southeastern Pennsylvania constitute a well-defined local community, which is required in charter expansions (Life is a Highway June 11). Counsel for the credit unions reminded the court that substantial evidence is on the record supporting the credit unions' position. It also was clarified that the banks challenging the community charters had notice and an opportunity to be heard during the charter expansion process. "It's been a long, complex case," said Rick Wargo, association executive vice president and general counsel. "We were glad to have an opportunity to present the substantive issue regarding whether the five counties constitute a well-defined local community to the reviewing court." In a previous review of the case, the Pennsylvania Supreme Court, the state's highest court, instructed the Commonwealth Court to take a closer look at the procedures used by the Pennsylvania Department of Banking when it adjudicated challenges from certain banks and their trade groups in 2004. Freedom CU is a $360.4 million asset credit union in Warminster. TruMark Financial CU is a $1.080 billion asset credit union in Trevosa. They each were granted a community charter for five countries from the state banking department in 2004 (News Now May 12 and Sept. 29, 2008).

N.Y. CU association receives communicator awards

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ALBANY, N.Y. (6/12/09)--The Credit Union Association of New York received five awards in the 15th Annual Communicator Awards presented by the International Academy of Visual Arts (IAVA). The association’s five awards included one Award of Excellence in the newsletter category for its weekly electronic newsletter, The Point, and four Awards of Distinction for:
* Solutions, a bi-annual publication produced for the New York Credit Union Foundation, recognized in the Non-Profit category; * Connection, the association’s quarterly full-color magazine, acknowledged in the Association category; * Covera Card Solutions’ “See What We Have in Store for You” credit card promotion, recognized in the Campaign category; and * A comprehensive re-branding effort for CUC Mortgage, honored in the Financial Services category.
The 2009 competition received more than 7,000 entries from advertising agencies, interactive agencies, production firms, in-house creative professionals, graphic designers, design firms and public relations firms.

Ohio Senate passes budget without CU public funds power

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COLUMBUS, Ohio (6/12/09)--The Ohio Senate passed its version of the state budget but did not include language allowing credit unions to accept public funds, despite extensive advocacy efforts by the Ohio Credit Union League and its credit unions. John Kozlowski, league general counsel, testified during a hearing of the Senate Financial and Financial Institutions Committee in favor of credit unions being able to accept public funds (eLumination Newsletter June 10). The league also delivered letters to Senate members, and sent out an action alert to generate legislative support. A conference committee is working to resolve differences between the Ohio Senate and House versions of the budget. The league said it would continue to address the issue. “It is unfortunate that, by excluding credit unions from these state-backed initiatives, Ohio’s consumers and businesses have fewer choices and less access to programs that would benefit them,” Kozlowski said. Permitting credit unions to accept public funds is a “no cost” option that can save for taxpayers money, said the league. “Even if a single dollar does not change hands from an eligible institution to a credit union, the additional competition would draw down the cost for public entities to borrow funds and increase the rate they earn on deposited funds,” Kozlowski added.

S. Carolina league presidentCEO Parks to retire

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COLUMBIA, S.C. (6/12/09)--South Carolina Credit Union League (SCCUL) President/CEO Garry L. Parks will retire from that position, effective Dec. 31. A national search for a successor will begin as soon as possible, announced the league Thursday. At the time of his retirement, Parks, a U.S. Marine Corps lieutenant general who retired from the military after 35 years, will have served SCCUL and its affiliated organizations for more than five years. In that time, he and senior management have worked to:
* Establish a task force to assess and recommend facilities disposition; * Organize a think tank of credit union leaders, known as the Vision 2020 Committee, to provide continual input; and * Transition the League and Affiliates to a new structure that:
* Creates a new League Service Corp. for member services; * Establishes the Palmetto Cooperative Services as a limited liability company (LLC); and * Realigns the league as an advocacy-based organization.
"Each of these strategic actions is now either complete or well underway," wrote league Chairman Scott Woods to affiliated credit unions, noting that "new levels of confidence, integrity and prestige have been instilled in the league and its affiliates." With Palmetto Cooperative Services LLC established as a standalone company, the league will implement a structure to support an advocacy-based model, starting in January. "These past five years of working in an environment where the daily mantra is 'people helping people' has provided me a feeling of profound appreciation for the contributions that each employee delivers to credit unions, and the credit unions in turn deliver to members so enthusiastically," Parks wrote in a letter to employees. "I will always treasure the opportunities provided by this experience."

PCUA CEO letter to editor touts shared branches

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HARRISBURG, Pa. (6/12/09)--A letter to the editor touting credit union shared branches and written by Pennsylvania Credit Union Association President/CEO Jim McCormack was published Thursday in the Harrisburg Patriot-News. McCormack’s letter responds to a letter to the editor published in the June 3 Patriot-News and titled, “Too Many Banks.” The original letter questions the need for continued construction of branches with the availability of ATMs, Internet and direct deposit (Life is a Highway June 11). In his response, McCormack noted that credit unions “achieve greater efficiencies through cooperation. Currently 43 Pennsylvania credit unions offer their members account access through a ‘shared branching’ network. “Those members can obtain teller service at any of the 3,730 ‘shared’ credit union branches nationwide (including 90 in Pennsylvania), just like they would at their own credit union office,” he continued. “Likewise, many Pennsylvania credit unions offer surcharge-free ATM access to members of other credit unions, through CU$, CO-OP, and Allpoint Networks.” McCormack also noted that credit unions provide better rates on savings and loans, and referred readers to iBelong.org to find a credit union to join.

CUs offer tips for tweeting

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MADISON, Wis. (6/12/09)--Credit unions nationwide are embracing social media through Facebook and Twitter, two free websites that allow users to post updates and information about themselves. Credit unions are using the sites to connect with the communities and members they serve. The sites also are employed to reach potential members--especially the younger generations. DATCU, Denton, Texas, has been using Twitter for about two months. "We're trying to get it out to the community," Casey Braswell, DATCU marketing assistant, told News Now. DATCU began using social media to promote three new accounts for members under 24. The credit union also posts community events--with the goal of their Twitter and Facebook pages becoming sites that community members visit when they want to find local happenings. "We care about the community, and we want to be involved," Braswell said. She handles the Facebook and Twitter updates every day unless she is out of the office. It takes her about five minutes per day to post the information. Once a month, she creates a schedule with community events and other items she's researched to post. Every morning, Braswell also checks Twitter and Facebook for any messages or replies people have posted. Twitter has helped DATCU answer a lot of members' technology-related questions. DATCU recently launched Quicken and Microsoft Money, so members have posted questions about them. DATCU responds to posts within 24 hours. Credit unions should respond to posts and make the answers public in case others have the same questions, Braswell said. "It only takes a few seconds to reply," she added. DATCU, which is about 30 miles from Dallas, also hopes to use the sites to reach students at local universities and a junior college. When using Twitter or Facebook, credit unions should avoid making their pages solely about products. "Let it be a communication tool between you and your members," Braswell said. A class of business students at Southern Illinois University (SIU) at Carbondale helped launch SIU CU's Facebook page last October. SIU, which serves the university community, also hired a marketing intern who regularly updates the credit union's MySpace, Facebook and Twitter profiles. "It's another layer to our marketing effort," Chris Sievers, SIU CU director of marketing, told News Now. The social media sites, especially Facebook, have allowed the credit union to reach new students it normally wouldn't be able to because of costs. "A lot of SIU students are from Chicago," Sievers said. "We couldn't afford to put a billboard in downtown Chicago. With Facebook, we've been able to target them [at a much lower cost]." About 60% of SIU CU's Facebook and Twitter followers are members. SIU CU posts news stories about the financial industry and promotions the credit union is offering. SIU CU has two Facebook profiles--a main profile for the credit union, and another page called "Smart Young Investors," which offers products and services to the college-aged. Credit unions looking to start social networking need to be dedicated, according to Sievers. "Social networking takes time," Sievers said. "Don't create a page and then just leave it static." Laura Higgins, director of marketing at Bellco CU, Greenwood Village, Colo., agrees. "The one thing you cannot allow is your content to get stale--nothing's worse than a dusty old site that hasn't been updated in months," Higgins said. "Fortunately, the costs are minimal--all this really takes is staff time." Bellco CU is active on several sites, including Twitter and Facebook. The tools are "ubiquitous," Higgins said. "Any public-facing organization that in 2009 has not yet embraced the full complement of online marketing channels is an organization that is shrinking instead of growing," she said. Members have responded positively to Bellco's social marketing efforts because "we're careful to put a real face on our social media entries," Higgins said. She warned against using "sanitized marketing-speak." "Credibility comes from having real human beings interacting enthusiastically on behalf of their credit union," she said. Bellco continually looks for ways to engage in more social networking. "There are hundreds of these sorts of social media and networking sites out there, with more cropping up every week," Higgins said. A Wednesday USA Today article, "There's an art to writing on Facebook or Twitter--really" addressed the effectiveness of Twitter and Facebook status updates, offering users several tips:
* Give visitors a hook--a tip, a laugh or a link; * Be thought-provoking; * Include interesting detail; * Use complete sentences with the best possible grammar; and * Post optimistic messages.
The newspaper warned Twitterers against sharing too much information, ranting, speaking in code or using slang.

Texas league offering REAL Solutions

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FARMERS BRANCH, Texas (6/12/09)--The Texas Credit Union League (TCUL) is offering REAL Solutions, a payday lending alternative, to empower Texas credit unions help those individuals of modest means and “low wealth.” “REAL” stands for “Relevant, Effective, Asset-building, Loyalty-producing” Solutions. The signature program of the National Credit Union Foundation (NCUF) works through state credit union leagues to help credit unions offer services that have proven successful for people of modest means and “low wealth.” About 20% of credit union members use payday lenders, according to the league (LoneStar Leaguer June 10). REAL Solutions is currently offered through select credit unions statewide at no cost through a grant from the Texas Credit Union Foundation. Credit unions’ enrollment in the program is for a limited time, but includes access to the upcoming REAL Solutions partner meeting at the TCUL offices in Dallas on June 25. At the meeting, participants will study successful payday lending alternative models and vote for the elements they want their Texas payday lending alternative product to have.

Pandemic is official CUs are prepared

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GENEVA, Switzerland (6/12/09)--The World Health Organization (WHO) has declared a swine flu pandemic--the first global flu epidemic in 41 years--and U.S. credit unions are prepared. The move came as a result of WHO officials meeting in Geneva, Switzerland, with flu experts who gathered to deal with a steep uptick in cases in Australia--which reported 1,263 cases Thursday, and a rising number of cases in Britain, Chile, Japan and elsewhere. In a Wednesday report, WHO said 74 countries reported 27,737 cases of the disease, and 141 deaths since the outbreak began in April (The New York Times June 12). WHO said in a statement to member countries that it decided to elevate the pandemic alert to Phase Six from Phase Five, indicating a global pandemic outbreak, the newspaper said. However, WHO officials--in attempts to avoid causing panic--emphasized that the flu has resulted in mostly minor cases and is not more deadly, now that it has been declared a pandemic. Several state credit union leagues and credit unions, as well as their service providers, have been reviewing their pandemic planning operations since the outbreak was reported in April. The California, Ohio, Kansas and Texas leagues all reported working on their operations to News Now (April 28). Money FCU, an $82.3 million-asset credit union, based in Largo, Md., said it successfully performed an entire disaster recovery test in pandemic mode last month, in which it assumed that no one could physically be at the credit union’s regular location or back-up facility. “We were able to help Money One recover all of their critical information technology systems 100% remotely in a matter of a few hours,” said Hugh Smallwood, chief technology officer for Ongoing Operations, a provider of business continuity and disaster recovery solutions to credit union clients nationwide. Money One found the situation to be a learning experience. “We took a fresh look at our plan given recent events,” said Susan Wilhelm, Money One vice president of Information Systems and Technology. “We quickly realized that under this scenario, we have two issues. The first issue is accessing physical media and systems. How can we continue to accomplish critical business functions for our members if we are physically distant? The second issue is do we have enough trained staff to perform the daily functions?” The Credit Union National Association (CUNA) has a long-term business continuity plan (BCP) and has created a BCP Committee, an internal staff committee that addresses the key components of a pandemic or business interruption, Harley Skjervem, CUNA senior vice president of human relations and company pandemic response organizer, told News Now in April. It also has placed resources for credit unions on CUNA’s websites and recently conducted a webinar on the topic. For more information, use the links.

CU System briefs (06/11/2009)

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* SKOWHEGAN, Maine (6/12/09)--A knife-wielding man wearing a hoodie and sunglasses robbed Winslow, Maine-based Tacconet FCU's Skowhegan branch Wednesday morning of an undisclosed amount. He escaped on a motorcycle driven by another man. Police later found a motorcycle abandoned on a road. Witnesses in the area said one man got into a maroon pickup truck and sped away. No one was hurt during the incident (Morning Sentinel June 11) … * BATON ROUGE, La. (6/12/09)--Eight-year-olds Eli Coleman and Andrew Carter of Baton Rouge became millionaires on June 5 as
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winners of E FCU's Millionaire for a Day Contest, in which local students wrote an essay or drew a picture on "What I Would Do With a Million Dollars." They were each presented an oversized check for $1 million by CEO Ken Bordelon. They also received a five-year, $500 share certificate and received a VIP tour of the credit union's Market Street branch. They also can keep the interest earned on a 24-hour deposit of $1 million. The students also shared lunch with real-life millionaire Todd Graves, founder and chairman of Raising Cane's Chicken Fingers, an area restaurant chain. Graves showed them the kitchen, ate lunch with them and presented them with gift buckets. He also shared advice on becoming a millionaire, staying a millionaire, and developing smart financial habits. "We look forward to seeing Eli and Andrew 30 years from now as real millionaire members of E FCU," Bordelon said. From left are: Coleman, Graves, Carter and Bordelon. (Photo provided by E FCU) …

Emotional images drive lowmod-incomers to save

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MADISON, Wis. (6/12/09)--If credit unions want to attract low-to moderate-income (LMI) consumers, they'll need to understand the LMI mindset about their personal finances and financial services, and appeal to their emotional side.
So says the Filene Research Institute's latest report, Does Imagery Matter: Delving into the Mind of low- to Moderate-Income Savers. The National Credit Union Foundation provided financial support for the report by Nick Maynard, Jeff Zinsmeyer and Tim Flacke of the Doorways to Dreams (D2D) Fund Inc. The threat of financial crisis hangs over LMI families and colors their daily financial choices, but adequate savings can build a more promising future for them, says the report. It explores LMI consumers' response to different marketing images. Consumer Researcher Maya Bourdeau and the research team used the Zaltman Metaphor Elicitation Technique (ZMET)--which elicits insights about human decision making through metaphors and storytelling--to understand attitudes of LMI households toward money and saving. The report details their findings and an "emotional involvement" continuum for marketing visuals. Even subtle imagery can strongly influence the consumer experience, said Bourdeau. For example, slow tempo music increases retail sales by as much as 35%, while timing marketing with in-branch communications creates at 10%-40% return on investments. "Consumers encounter hundreds of marketing messages each day, and this study recognizes that consumers use conscious and subconscious feelings to assess the effectiveness of these messages," said George A. Hofheimer, Filene's chief research officer. "ZMET is a useful tool for marketing professionals to tap into consumers' subconscious thoughts with compelling messages and metaphors, which can lead to more members, more savings, and a more emotionally attuned membership base." Researchers found that choosing emotionally provocative images can connect successfully with LMI consumers. They also found that the marketing can be implemented on different scales, from small to substantial, and that ZMET-based imagery may be most effective when targeted at specific segments within the LMI market. "Credit unions should consider the value of community outreach as a complement to marketing images and messages," Hofheimer said. For more information, use the resource link.

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 (SIToday.com 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 (BattleCreekEnquirer.com 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 CUAid.coop. 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
Click to view larger image Click for larger view
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.

Missouri CUs see savings loan growth

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ST. LOUIS (6/10/09)--Missouri credit unions experienced a growth in loans at a time when national loan numbers dropped, according to first quarter 2009 call report data from the National Credit Union Administration. For Missouri credit unions, the first quarter of 2009 saw assets increase 7.1% --to $10 billion from $9.4 billion at year-end 2008 (The Missouri difference June 5). Loans for the state's credit unions rose 0.8% to $6.5 billion from $6.4 billion. Nationwide, credit unions' loans have declined 0.1% to $565.2 billion from $565.9 billion. Other results for the state:
* Investments rose 26.2% to $3.2 billion from $2.5 billion; * Shares increased 6.6% to $8.4 billion from $7.9 billion; * Net worth declined 5.6% to $1 billion from $1.1 billion; and * Membership increased 0.8% to 1.33 million members from 1.32 million at year-end 2008.
"First-quarter statistics support the fact that credit unions are viewed by consumers as a financial oasis during a time of economic stress," said Rosie Holub, president/CEO of the Missouri Credit Union Association. "The performance of Missouri's credit unions demonstrates their commitment to strengthening their communities."

Smaller is better say Massachusetts CUs

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WORCESTER, Mass. (6/10/09)--Small credit unions in Central Massachusetts have not succumbed to the mergers trend, while three merger deals are in the works for area banks. Several credit unions say they likely will remain small and independent. At the $9.8 million asset W-G FCU in Worcester, smaller is better, explained Deborah Beando, manager/treasurer. The credit union knows its members. "We work with them if they are having problems, and the majority of our members stick with us through thick and thin," she told the Worcester business Journal (June 8). It serves several employee groups related to the health industry. W.H. Nichols Employees FCU, a $1.08 million credit union serving employees of the former W.H. Nichols Co. in Devens, focuses on what it does well, said Helen Desrochers, treasurer/manager for the past 47 years. The credit union offers two types of loans: personal and vehicle. Its size prevents it from offering mortgages. Its future is tied closely with that of its corporate parent Parker Hannifin, she said. Leominster Employees FCU, a $12.6 million asset credit union based in Leominster, moves forward because of its service and its relationship with members, said Thomas Clark, treasurer/CEO. It entered the mortgage lending business through a partnership with Allanach Mortgage Group of Nashua, N.H., which offers mortgages for more than 50 credit unions in New England and Florida. Such partnerships make sense for survival and make it easier for small credit unions to stay independent, said Robert Kimmett, senior vice president of public relations with the Massachusetts Credit Union League. Small credit unions traditionally do well because they're well connected to their members but they face challenges because they don't have the same resources and personnel as larger institutions, Kimmett told the newspaper. He noted that the league helps keep credit unions updated on new regulations and legislation and provides group buying for debit and credit card programs and other business services. The cooperative nature works well in efforts such as shared ATM networks and shared branching he said. Use the link for the full article.

New branches in this economy are a success

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MADISON, Wis. (6/10/09)--Some credit unions have announced branch closures as part of their belt-tightening during the recession. But others are experiencing success with newly opened branches--despite the nation's economic turmoil. How do they do it? San Francisco-based Patelco CU is reporting success with its new Financial Resource Center, which opened Feb. 17 in downtown Danville, Calif. The facility is the $4.129 billion asset credit union's 18th branch on the East Bay. Since it opened, more than 525 people have joined the credit union at that location and are taking advantage of its products and services. It attributes its success to a series of community events and to its location. During its first eight weeks of operation, the new branch played host to a number of community events, such as a Pet Adoption Day with Tony La Russa's Animal Rescue Foundation, and a preview exhibition and reception for Danville Open Studios to promote local artists. At its ribbon-cutting ceremony on April 16, five residents played Patelco's Mountain of Cash game for a chance to win up to $50,000. Although no one won the full amount, each contestant took home $250 for participating. More than 75 people attended that event. The events, coupled with cross-promotions with other local merchants and a "perfect location," have propelled the new branch into one of Patelco's most popular branches. "In a time when many banks and credit unions have unfortunately needed to close certain branches, ourselves included, it's great to see this location flourish. It truly is the perfect place for Patelco to make a difference to the community and the local economy," said Danville Branch Manager Toni Sciaky. Ken Burns, Patelco's new CEO, noted that the credit union "is continuing to expand in certain key market areas, and we are certainly glad to see that not-for-profit, community-minded banking has struck a chord with Danville residents." Louisiana FCU, a $113.7 million asset credit union in La Place, La., opened its Gramercy branch in May in the heart of St. James Parish. The new location features a drive-up ATM, full-service lobby, and drive-through services (eNews June 3). A ribbon cutting ceremony and some attractive specials helped drive business to the location. The credit union offered a five-month term share certificate special at a 5% rate through the end of the month. The offer brought $1 million in less than three weeks to the credit union. The new ATM onsite dispersed random $50 bills instead of $20 bills as an incentive to drive traffic to the new machine. Members also received $100 when they opened a new checking account with direct deposit. "It's exciting to see the community support the branch," said Mia Perez, director of marketing and business development. "We're happy to be able to provide alternative financial solutions to our members and potential members in this market." Education First FCU, a $252.9 million asset credit union in Beaumont, Texas, is finding growth in a real-world lesson in what a local financial institution with a solid balance sheet can achieve, President Jimmy Lackey told The Beaumont Enterprise (June 4). The credit union has expanded by seven offices in the past year, all of them in supermarkets in the area. As a result, Education First is building a $528,209 training center next to its main office. "We've added 30 employees in the last year. We needed a training facility," Lackey said. The credit union saw an increase in assets of about 25% from last year, to its current $270 million assets. Lackey attributes the growth to the new locations.

Eastern Financial seeks judgment vs. condo developer

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PALM BEACH, Fla. (6/10/09)--Eastern Financial Florida CU is seeking a $37.25 million deficiency judgment against condominium developer Merco Group and its principals related to the defunct Palladio condominium project in West Palm Beach, Fla. The project was not finished and it became one of the Miramar, Fla.-based credit union's largest real-estate losses (Palm Beach Daily Business Review June 9). A deficiency judgment is a court order stipulating the amount a borrower still owes the lender after a foreclosure. To get the amount, the appraised value of the property on the day of a foreclosure sale is subtracted from the total amount owed on the loan. Merco Group was the guarantor on a loan used to purchase the site of the condominiums that were never built. The credit union foreclosed on the 4.5 acre site in December 2008. In January, it filed the deficiency judgment claim in Palm Beach Circuit Court against Merco Group, Belinda Mereulo and Homero Meruelo. The $37.25 million represents the loan principal, interest and fees, minus the credit union's winning $100 bid for the property at a court-ordered auction. Last year the property was appraised at $43 million. The Merco Group claims the credit union can't have both a deficiency judgment and the property. Its attorney said it will fight the lawsuit. The condo project was one of a series of real-estate losses that sent the credit union into conservatorship in April. It is being run by Melbourne-based Space Coast CU.

Universal savings accounts topic at Filene ACUC lunch

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MADISON, Wis. (6/10/09)--Universal savings accounts will be discussed during the Filene Research Institute’s 2009 Membership Luncheon and Annual Meeting during the Credit Union National Association’s America’s Credit Union Conference and Expo in Boston. The lunch will take place June 22 from 11:30 a.m. to 1 p.m. EDT. Keynoting the event will be Fred Goldberg, partner at Skadden, Arps, Slate, Leagher and Flom. The event also will feature special guest Tim Flacke, executive director, D2D Fund. Universal savings accounts have been available for more than 15 years and can be used for getting a post-secondary education, purchasing a first home, making investments, starting a small business and building retirement. Credit unions are ideally suited to implement the accounts, which could help Americans develop savings and assets, according to Filene. Great Britain implemented a universal savings account program in 2005 for its 700,000 children born each year. The accounts have triggered a dramatic increase in savings rates among poor families, Filene said. America’s Credit Union Conference and Expo will take place June 21-24 in Boston.

Two Dubuque CUs offer tips on new card law

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DUBUQUE, Iowa (6/10/09)--Two Dubuque, Iowa, credit unions are offering tips on how to deal with new credit card legislation signed into law by President Barack Obama. While Dupaco Community CU officials are still examining all the new rules, Matt Dodds, senior vice president for consumer lending, said he’s confident the law won’t result in any significant changes at his credit union (Telegraph Herald June 8). “Certainly not at Dupaco,” he told the newspaper. “But one thing you’re going to see change is more fees, bigger annual fees, [and] taking away benefits like frequent-flier programs.” Consumers need to pay attention to how they use their cards, Dodds added. To deal with the new legislation, Dodds said consumers should:
* Look for a card with a lower interest rate if a balance is carried over from month-to-month; and * Select a card with no annual fee and a longer grace period if expected to pay monthly bills in full and are not concerned about other features such as frequent-flier miles.
Jason Norton, senior vice president of marketing and business development at DuTrac Community CU, told the paper his credit union has received numerous calls from members about the legislation. He recommends that consumers:
* Read the fine print regarding any changes to or disclosures for a credit card account and don't hesitate to contact the credit card issuer or local financial institution with questions; * Question any unexplained finance charges or fees on a statement; and * Shop around for lower rates, and cards with fewer or reduced fees.

Connecticut governor signs leagues student loan bill

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MERIDEN, Conn. (6/10/09)--Connecticut Gov. M. Jodi Rell Tuesday signed into law the Credit Union League of Connecticut's student loan bill, which provides a college student loan program through credit unions. SB 842, An Act Concerning A Student Loan Guarantee Program Reserve Fund, takes effect immediately. Tony Emerson, league president/CEO and Kelly Fuhlbrigge, league vice president-government relations, will participate in a bill-signing ceremony soon. The league and officials from Connecticut’s credit unions met with Rell in December to discuss the state’s economic situation and to propose a new partnership between the state and its credit unions for a college student loan program. Credit unions pledged support of the governor’s concept and estimated that up to $17.5 million could be committed to the program. The program offers low interest rates at no higher than 6% or 5.75%. Institutions offering 6% loans can defer interest payments for one year; credit unions offering 5.75% loans would not defer interest payments. The loans are for students who may not qualify for traditional loans or who already used all their resources and are having difficulty funding tuition. The Connecticut Health and Education Facilities Authority (CHEFA) will provide 20% loan guarantees on the loans. "Credit unions remain healthy in the current economy due to key differences in our structure," said Emerson. "As cooperative financial institutions, credit unions are not reliant upon the capital markets for funding, but are instead funded through member deposits. Therefore, as the credit crunch hit much of the economy, credit unions by contrast have money that they are ready to lend out to their members." Emerson also noted that credit unions' mission of helping people makes credit unions an excellent choice for such a program. The league will administer the program with CHEFA. The program will be open to all students who live or go to school in Connecticut. The funds will not be pooled. Individual credit unions will allocate their own funds. To participate, credit unions must allocate a minimum of $100,000 of their funds. The program will run for one year, with the possibility of extending that period, based on demand and available resources. So far, 21 credit unions have committed to the program, said the league.

CU System briefs (06/09/2009)

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* PHOENIX (6/10/09)--Two small Phoenix-based credit unions serving Latino member bases have merged, effective June. 1. Chicanos Por La Causa FCU, with assets of $4 million, was merged into the $25 million asset MariSol FCU (The Arizona Republic June 9). MariSol CEO Robin L. Romano told the newspaper the combination will result in a larger entity that can provide a more competitive range of products. The economic downturn hit Chicanos Por La Causa and its members, many of whom had ties to the construction industry. It wrote off 18.4% of its loans during first quarter and had lost $1.75 million the past four quarters. It also had difficulty attracting a manager. MariSol, which serves mainly Maricopa County employees and has a significant Latino membership, began operating the smaller credit union in July 2008. The combined credit union has four branches with 24 employees, 8,400 members and $30 million in assets … * WEST JORDAN, Utah (6/10/09)--A trigger-happy robbery suspect who robbed three financial institutions and fired one round into the ceiling at each holdup was sentenced to 35 years in federal prison (The Salt Lake Tribune June 3). William Harrison, 43, of Clearfield, pleaded guilty to the robberies of Mountain America CU's Layton branch, Chase Bank in Midvale, and Cyprus CU of Sandy. The heists were between October and December 2006. In 2007, Harrison's getaway driver, Willie McNeal, 52, of Midvale, was sentenced to nearly 12 years in prison … * MOBILE, Ala. (6/10/09)--Terica Loraine Crook has been indicted for bank fraud and bank theft for allegedly spending more than $100,000 that was mistakenly deposited into her account by Navigator CU, a Pascagoula, Miss.-based credit union (Associated Press Newswires June 4). According to court records, Crook allegedly made ATM withdrawals and check card purchases at area stores in small amounts that totaled $101,918. The transactions occurred between August 2004 and Aug. 30, 2007. Crook faces a maximum of 30 years in prison if convicted, although the actual sentence under advisory guidelines could be 20 months to two years … * HARRISBURG, Pa. (6/10/09)--The Pennsylvania Credit Union Association's (PCUA) Government Affairs Committee (GAC) met in Harrisburg Monday and Tuesday for Hill visits, legislative and regulatory updates, and discussion of regulatory modernization. The 19-member committee--chaired by Mike Kaczenski, PCUA vice chairman and CEO of Sun East FCU, Ashton--was briefed on the state budget by PCUA contract lobbyist John Malady. Budget issues dominated discussions on the Hill visits (Life is a Highway June 9). The GAC met with Sen. Don White (seated at desk), chairman of the Senate Banking and Insurance Committee, where GAC members described credit union outreach efforts such as Credit Union Better Choice loans and financial literacy programs. White commended them for their community outreach work. (Photo provided by the Pennsylvania Credit Union Association) … * ALBANY, N.Y. (6/10/09)--Amy Kramer, vice president of governmental affairs for the Credit Union Association of New York, has been named to The Capitol's inaugural list of 40 (Rising Stars) Under 40. The award recognizes leaders in politics, government and advocacy from the private, public and not-for-profit sectors whose talent, tenacity and passion the past year have distinguished them from their peers. The publication unveiled the 2009 recipients in its June 6 issue. "Amy's drive to advance the credit union movement in New York is an asset to the association and the state's credit union community," said William J. Mellin, president/CEO of the association. Kramer has been with the association since 2001 and was named to her current position in 2004 … * LANSING, Mich. (6/10/09)--Patrick Hills, president/CEO of Flagship Community FCU, a $15 million asset credit union in Port Huron, Mich., died June 2 at his home. He was 64. Hills was active in the league chapter system. Prior to its merger with Metro East Chapter, he held several executive committee positions, including chairman, of the Blue Water Chapter. Funeral services were Saturday. Hills is survived by his wife, three children, 10 grandchildren, mother, two brothers and three sisters (Michigan Monitor June 8) …

1.8 M-plus deposited in Michigan Save to Win

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LANSING, Mich. (6/10/09)--Michigan credit union members have made more than $1.8 million in deposits through “Save to Win,” a program that eight Michigan credit unions have offered with the Michigan Credit Union League (MCUL) since February. For every $25 members put into a special savings account, they receive a chance at more than $400 in prizes each month and an entry into a $100,000 grand prize drawing, taking place in January. Members can receive up to 10 prize entries per month. Among the eight credit unions, 5,947 accounts have been opened through the program (Michigan Monitor June 8). Data on those using “Save to Win” indicate broad appeal among credit union members and also reveal that low- to moderate-income households are being encouraged to make deposits through the program, the league said. Among the program’s statistics:
* About 27% of participants have financial assets--excluding mortgages--and savings of $2,000 or less; * Roughly 42% of participants report household income of less than $40,000; 15% report less than $20,000; and * About 60% of participants say they spent money on the lottery or gambling in the past six months.
The program is part of a broader “Prize-Linked Savings” initiative that Michigan credit unions use to attract consumers to the concept of saving as an alternative to gambling or purchasing lottery tickets. It also gives credit unions a chance to educate members and potential members about other savings products and building personal assets. Credit unions participating in the program include:
* Central Macomb Community CU, Clinton Township; * Christian Financial CU, Roseville; * Communicating Arts CU, Detroit: * E&A CU, Port Huron; * ELGA CU, Burton; * Frankenmuth CU, Frankenmuth; * NuUnion CU, Lansing; and * Option 1 CU, Grand Rapids.

Members 1st to aid workers if no state budget

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MECHANICSBURG, Pa. (6/10/09)--Members 1st FCU, Mechanicsburg, Pa., has designed a program to assist state employees who are members of the credit union if there is a state budget impasse in Pennsylvania. Members who are affected will have the option to either “skip” a payment on any existing loans at no charge, or take advantage of a special 3.9% Annual Percentage Rate (APR) line of credit, providing they meet credit approval criteria (Life is a Highway June 8). The rate will be effective through July 31, and the first payment will be deferred until August. Qualifying members can borrow up to the amount of their normal paycheck. “We serve many state employees who may be impacted if this budget issue is not resolved,” said Bob Marquette, president of Members 1st. “We understand the difficulty this may present to them and are committed to assisting them in any way that we can.” Pennsylvania State Employees Credit Union (PSECU), Harrisburg, also has said it will help its members who may be affected if a budget agreement is not reached by July 1 (New Now June 1). If there is an impasse, PSECU will offer a special loan program for members who are state employees. Employees who stay on the job but don't receive a paycheck can apply for a 0% APR loan (Life is a Highway May 29). For members who meet PSECU’s credit criteria, the 0% rate will be available up until 60 days after the governor signs the new budget into law. After 60 days, the loan would begin accruing interest at 3.9% APR until paid in full. Members participating in the program can borrow up to $1,000 per pay period.

Peppers elected CMIS board chairman

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MADISON, Wis. (6/10/09)--Alan Peppers, president/CEO of Westerra CU, Denver, was elected chairman of the CUNA Mutual Insurance Society (CMIS) Board of Directors at a meeting May 30. He replaces Loretta Burd, president/CEO, Centra CU, Columbus, Ind. CMIS directors re-elected to three-year terms included:
* Joseph J. Gasper, retired president/chief operating officer, Nationwide Insurance; * Robert J. Marzec, retired audit partner, PricewaterhouseCoopers; * M. Victoria Wood Miller, retired executive vice president and chief financial officer, Turner Broadcasting System Inc.; and * Randy M. Smith, president/CEO, Randolph-Brooks FCU, Universal City, Texas.
Gasper was elected board vice chairman. Other CUNA Mutual board members are:
* Burd; * Eldon Arnold, retired president/CEO, CEFCU, Peoria, Ill.; * William B. Eckhardt, president/CEO, Alaska USA FCU, Anchorage, Alaska; * Bert J. Hash Jr., president/CEO, Municipal Employees Credit Union of Baltimore, Inc., Baltimore; * Farouk D.G. Wang, director, buildings and grounds management, University of Hawaii, Honolulu; * Larry T. Wilson, president/CEO, Coastal FCU, Raleigh, N.C.; * James W. Zilinski, retired chairman and president/CEO of Berkshire Life Insurance Co., Pittsfield, Mass.; and * Jeff Post, president/CEO, CUNA Mutual Group.

Avanta FCU changes name to avoid trademark problems

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BILLINGS, Mont. (6/10/09)--Avanta FCU is changing its name for the second time in five years--this time to avoid a trademark lawsuit. Advanta Bank Corp., which is registered in Delaware and conducts business in Utah, complained that the $137.2 million asset, Billings, Mont.-based Avanta FCU’s name infringed on the trademark the bank has owned since 1987 (billingsgazette.com June 9). In 2008, the Utah bank gave the Montana credit union one year to change its name. Consequently, Avanta will become Altana FCU on July 1. Avanta FCU changed its name from Laurel FCU in July 2004. The credit union hired a trademark attorney and applied for a federal trademark on the Altana name, Rhonda Diefenderfer, president/CEO, told the newspaper. She added that finding a new name wasn’t easy. “This time, out of more than 300 names, we gave 90 to the attorney,” she told the paper. “Maybe four names survived in the formal search process.” Five years ago, credit union officials obtained permission from the National Credit Union Administration and Montana regulators to use the name Avanta, so the credit union thought it was in the clear, the paper said.

CUs draw strength in global presence--WOCCU chair

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MADISON, Wis. (6/10/09)--Credit unions’ ethical leadership has given them both integrity and strength during the current financial crisis, according to Melvin Edwards, World Council of Credit Unions (WOCCU) departing chair and board representative from the Caribbean Confederation of Credit Unions.
Click to view larger image World Council of Credit Unions Chair Melvin Edwards addresses attendees at the 2008 World Credit Union Conference in Hong Kong. (Photo provided by World Council of Credit Unions)
However, credit unions can gain even greater influence by speaking as a single global body, supporting credit unions in developing countries and increasing the movement's influence worldwide, he added. “Credit unions are engines of social and economic development, and too many governments have missed the value of their influence,” said Edwards, a St. Kitts and Nevis native whose two-year term as WOCCU chair concludes in July at WOCCU's World Credit Union Conference in Barcelona, Spain. “Credit unions everywhere need to recognize that we exist as a global movement, and we need to speak in one voice.” Much of credit unions’ strength is based on their financial transparency, not-for-profit cooperative natures and focus on member service, aspects that set them apart from many for-profit financial institutions. Their emphasis on education helps financially strengthen not only the credit unions, but also the members they serve, Edwards said. In the end, he said credit unions’ “people helping people” philosophy enables them to grow the movement in developing countries and hone individual members' and their own capabilities to weather economic storms like the global financial crisis. “We need to invest more, not only in educating ourselves but also our members, correcting their assumptions about easy credit and refocusing them on increased savings and safe investments,” Edwards added. “The more members know about managing their own funds, the easier it will be for them to keep their credit unions safe, accountable and honest.” During Edwards’ tenure as chair, WOCCU expanded its membership to include 40 systems or institutions representing 69 countries. It also increased its influence with legislative and regulatory bodies, including the Basel Committee on Banking Supervision, International Accounting Standards Board, European Union, Group of 20 (G-20) Nations and others. WOCCU issued a set of International Consumer Protection Principles to set member service standards for credit unions worldwide last year, and WOCCU’s technical development efforts have employed new technology to reach the rural poor in Mexico, a program it hopes to expand to other countries later this year. “I have been very fortunate to see many sides of credit unions worldwide and have kept my ear to the ground in learning to appreciate this beautiful mosaic,” he said. “I am now better equipped to appreciate the plurality of many cultures and realize that we all gain strength from the common denominator that is the credit union philosophy.” Edwards also says he is confident that when he hands the office to his successor at the Barcelona conference, July 26-29, WOCCU will continue gaining speed in its service to credit unions and their members worldwide. “I know my successor will continue to build on the strengths that were already present when I arrived, and I counsel him to listen closely. The humility of serving in high office will enable him and WOCCU to succeed,” he concluded.

Foulke outlines CUs concerns on Pa. mortgage bill

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HARRISBURG, Pa. (6/9/09)--A credit union CEO testified on behalf of credit unions Thursday at the Pennsylvania House Commerce Committee's public hearing in Philadelphia to gather insight on a mortgage lending bill. The bill, H.B. 1042, would require mortgage lenders to meet with homeowners in trouble before a judge permits a foreclosure, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway June 8). Bruce Foulke, president/CEO of American Heritage FCU, Philadelphia, told the committee about credit unions' impeccable low foreclosure rate, how they work with members before a foreclosure situation appears, and a few minor concerns about current legislation, said PCUA. Introduced by state Rep. Michael McGeehan (D-Philadelphia), H.B. 1042 is before the committee, which is reviewing efforts already underway in some county courts to require conciliation meetings. The bill would require the Court of Common Pleas in each county to establish a residential mortgage foreclosure conciliation program to assist lenders and borrowers in achieving a mutually agreeable resolution to mortgage foreclosure action. PCUA is working with the committee and other interested parties on the measure.

Security video records ghostly vibes in CU

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ANDERSON, S.C. (6/9/09)--Anderson City Employees FCU, located in the South Carolina city's brand new Municipal Business Center, is experiencing some otherworldly vibes in the form of not-yet-explained moving blurs picked up by its security camera. The moving blur is white and floats around the room to a chair, sits down and disappears. Sometimes there are two blurs (KFOR.com June 5). The local NBC affiliate, KFOR, has the sightings on a video. Use the resource link to view it. The sightings began last month after security guard Rob Colbert spotted movement out of the corner of his eye while working late. He checked the security tape. It had captured the movement. The blurs always occur in the same office. The most recent visit was last Thursday morning. The center's IT director, Mark Cunningham, checked the cameras and found nothing wrong. The credit union closed the blinds to avoid any reflections from outside. But the apparition showed up again--this time more clearly. IT cleaned the camera lens and resealed the camera cover, but the image reappeared. It doesn't cause any trouble and the credit union has nicknamed it "Clair, for clairvoyant." The new center was built on a former service station lot but no one know of any ghosts lurking about. "If it is a ghost, maybe it's Casper the friendly ghost," Frances Parham, CEO of the $1.6 million asset credit union, told the television reporters.

Oregon governor signs CU bill

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BEAVERTON, Ore. (6/9/09)--Oregon Gov. Ted Kulongoski Thursday signed an update to the Oregon Credit Union Act, Senate Bill 438, into law, according to the Credit Union Association of Oregon (CUAO). The legislation makes several revisions to the credit union act regarding membership requirements, accounting rules, annual meeting policies and bonding requirements. It also includes three provisions designed to improve and streamline corporate governance, three technical changes regarding accounting and operational issues, and a definitional change that allows community credit unions to more fully serve employers in their geographic areas. "The bill will allow those select employee group (SEG)-based credit unions moving to a community charter to maintain groups within their current field of membership," said Pamela Leavitt, CUAO senior vice president of governmental affairs and public relations. "Our previous law made them give up their SEG groups, which didn’t allow for service outside their new community charter." The bill was the result of two years of work on behalf of the CUAO Governmental Affairs Committee and the State Issues Subcommittee, said the association’s Oregon Outlook for June.

N.J. county deposits 100K at newest CUs opening

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HACKENSACK, N.J. (6/9/09)--New Jersey's newest credit union, lst Bergen FCU in Hackensack, had as one of its first depositors Bergen County, which deposited $100,000 at the credit union's official grand opening. Bergen County Executive Dennis McNerney and members of the Freehold Board made the presentation (U.S. Fed News June 4). McNerney told the group that in today's tough economic times, "credit unions are the answer, bringing low-cost, high quality banking services to our low to moderate income neighbors." lst Bergen FCU is the first federal credit union to open in New Jersey in more than two decades. It was chartered Jan. 14 to serve people who live, work, worship, volunteer and attend school, businesses and other legal entities in Bergen County. It was organized by the Bergen County Community Action Partnership Inc., the county's anti-poverty agency (News Now Jan. 21). Among those present at the grand opening was Paul Gentile, president of the New Jersey Credit Union League (The Weekly Exchange (June 1).

ID thefts with victims names on cards rise

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PLEASANTON, Calif. (6/9/09)--The number of identity thefts where fraudsters obtained credit cards using victims' names rose during 2008, according to Javelin Strategy and Research. Javelin attributed the increase to a credit card loan application process that requires less verified information and is easier than other types of loan applications. Also, credit cards provide the most financial gain for thieves, who often don't get caught (CardLine June 8). The results, published by the Pleasanton, Calif.-based firm last week, are based on a survey conducted by the firm of 4,784 U.S. consumers last year. Of those responding, 487 said they had been victims of identity theft. Of the identity theft victims, 146 indicated that a variety of fraudulent new accounts had been opened using their name. Among the new-account fraud victims, one-third said criminals had opened new credit card accounts in their name, up from 26% from the previous year's survey. Other findings:
* Twenty-six percent of the victims said fraudsters opened new store-branded credit cards in their names, down from 29% in 2007. * Fifteen percent reported other types of fraudulent loans were in their names, down from 21%.

NCUF federation sign collaboration agreement

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WASHINGTON (6/9/09)--Building on their joint initiative, Helping Members Avoid or Survive Foreclosure, the National Credit Union Foundation (NCUF) and the National Federation of Community Development Credit Unions have signed a collaboration agreement. “The foundation and the federation share a deep commitment to helping the credit union movement fulfill its historic mission of serving people of modest means,” begins the newly signed memorandum of understanding (MOU). “This MOU establishes a framework for the foundation and the federation to collaborate effectively and make the most efficient use of scarce resources in order to achieve the greatest positive impact in areas of common interest.” Specifically, the foundation and the federation agree to:
* Actively seek areas of collaboration through frequent and open communications among officers, program staff and consultants from both parties; * Collaborate in areas of common interest and complementary capacity by identifying opportunities and developing joint strategies and plans that capitalize on the specialized resources and capacities of both parties; * Identify the source of subject matter expertise on joint efforts, and assign final editorial control over information, training or publicity materials to the identified subject matter expert; and * Seek opportunities where collaborative efforts may enable the parties to access financial resources that would otherwise be inaccessible to either party independently.
The next collaboration will take place on July 29 in Milwaukee. The two organizations will deliver joint training at the REAL Solutions League Liaisons Meeting to explain the mortgage crisis and what leagues and credit unions can do to assist their members and their communities during difficult times. “Every American will be affected in some way by the foreclosure crisis that is gripping our country,” said NCUF National Program Director Lois Kitsch and Federation Senior Consultant Terry Ratigan in a joint statement. “Credit unions, which set the highest standards as responsible lenders, are on the front lines in the battle for financial stability and economic renewal. “With more than one million families facing foreclosure this year, credit unions face unprecedented demands from their members for products, services, advice and understanding,” they added. The joint report, Helping Members Avoid or Survive Foreclosure, is available free on the REAL Solutions Impact Center and on the federation’s website. Other information on joint efforts between the foundation and the federation will be featured during workshops at the federation’s 35th Annual Conference on Serving the Underserved, which meets Thursday through Saturday in Phoenix.

State Mini-COBRA bill would affect Pa. CUs

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HARRISBURG, PA. (6/9/09)--Pennsylvania credit unions will be affected by a state bill that would extend Consolidated Omnibus Budget Reconciliation Act (COBRA) guidelines to group health insurance plans provided by employers with two to 19 employees. The bill is Pennsylvania House Bill 1089, sponsored by State Rep. Robert Matzie (D-Beaver). Under current COBRA guidelines, group plans are provided by employers with 20 or more employees. In addition to extending coverage, the bill would provide continued coverage to employees who were terminated because of a qualifying event (Life is a Highway June 8). “The implementation of this new legislation will have a significant compliance and operations impact on credit unions,” said Jim McCormack, Pennsylvania Credit Union Association president/CEO. “We are monitoring the progress of this legislation and working with our processor to ensure a smooth transition.” The Mini-COBRA Small Employer Group Health Policies are designed so Pennsylvania citizens can access premium assistance benefits provided by the federal government’s stimulus package under the American Recovery and Reinvestment Act of 2009. The bill is expected to be signed by the governor soon.

Members will revote on ousted board members

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JOHNSTOWN, Pa. (6/9/09)--USSCO Johnstown FCU says its members will revote on the credit union’s board because of a procedural error that occurred before the original May 14 elections. The original elections ousted three incumbent board members. The revote will take place because 300 of the credit union’s 13,000 members were not notified of the first vote. The 300 members have account balances that do not meet the credit union’s threshold to earn interest. Therefore, the members didn’t receive a quarterly statement, which contained the annual meeting announcement (Tribune-Democrat June 8). Some members oppose the revote, saying that the credit union is nullifying the election because it was not happy with the results. The credit union’s attorney, Guy Messick, told the newspaper that the vote was close. Having 300 “effectively disenfranchised” members violated credit union bylaws, he said. USSCO Johnstown FCU has $96 million in assets.

Article Wis. CUs weather recession better than banks

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MADISON, Wis. (6/9/09)--Most south-central Wisconsin credit unions are getting through the recession better than most banks, according to the most recent financial-strength ratings from two national ratings services. Although some have had challenges, none of the 42 area credit unions received the lowest one-star ratings, based on 2008 financial data analyzed by Bankrate.com and Bauer Financial (Wisconsin State Journal June 6). Compared with banks, credit unions have three advantages, Russ Kashian, economics professor at the University of Wisconsin-Whitewater, told the newspaper. They don’t pay taxes--which bolsters their income statements; they have a homogenous client base, which helps them make safer loans; and their average loan is smaller, which results in less risk. Credit unions usually make smaller loans than banks because credit unions tend to make consumer loans, as opposed to big commercial loan or real estate loans, Brett Thompson, president/CEO of the Wisconsin Credit Union League, told the paper. However, credit unions’ relationships with their members are the key to their success, he added. “Credit unions know their members and therefore, can [better] assess the risk,” Thompson explained.

Oklahoma CU association elects board officers

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TULSA, Okla. (6/9/09)--The board of directors at the Credit Union Association of Oklahoma (CUAO) has elected Steve Rasmussen, president/CEO of FAA FCU, Oklahoma City, as chairman. Rasmussen succeeds Mike Kloiber, president/CEO of Tinker FCU, Oklahoma City. Rasmussen joins other executive committee members: Vice Chair Jim Harig, president/CEO, Muskogee (Okla.) FCU, and Secretary/Treasurer John Ray, president/CEO, NEO FCU in Miami. Leilani Harpole, president/CEO, Sand Springs Community FCU, was newly elected to the board and will serve a three-year term, as will Harig and Kloiber. The board members were elected during CUAO’s 75th annual meeting in Oklahoma City.

CU auto loan incentives mean record May sales

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LANSING, Mich. (6/9/09)--A record monthly total of more than 38,000 General Motors (GM) and Chrysler vehicles were sold in May through credit unions’ “Invest in America” program, bringing its total to 140,000 new vehicle sales since January. The program is on pace to sell 300,000 vehicles this year. “Invest in America” is credit unions’ auto loan discount program with auto manufacturers General Motors Corp. (GM) and Chrysler Corp. The program started in December with a four-state pilot program for GM and a 12-state pilot for Chrysler. About 80% of the program’s May sales were financed through a credit union, David Adams, CEO of CUCorp, told a teleconference Monday. CUCorp is a marketing company based in Livonia, Mich., and wholly owned subsidiary of the Michigan Credit Union League. During the first four months of the program--prior to May--average monthly sales were 25,000 vehicles, Adams added. About 22% of the sales were from members who previously owned an import, and now--through the program--have decided to buy from U.S-based automotive companies, according to GM research data of 1,500 credit unions members who participated in the program in April, Adams told the teleconference. Also, 37% who are in the program had previously owned a vehicle other than a GM product. The rise in credit union members’ auto purchases comes at a time when GM and Chrysler are reinventing themselves through accelerated bankruptcy restructuring efforts, CUCorp said. The credit union sector growth suggests that consumers are buying GM and Chrysler brands despite a feared negative stigma associated with bankruptcy. “Credit union members are demonstrating that they like the quality and value associated with domestic auto brands,” Adams said. “GM and Chrysler are appealing to a broad demographic of credit union members who believe in supporting American companies and their products. “This support is despite the automakers’ challenges, not because of them,” he added. “Warranties backed by the federal government, rich incentives, credit union member discounts and the availability of affordable credit are contributing to this positive trend. This isn’t a sympathy vote. It’s a return to quality and value by people who want to support ‘Made in America’ products.” About 79% of respondents said the program strengthened their trust in credit unions, according to the GM research of the program's April sales, Adams told the teleconference. More than 1,700 credit unions, representing about 40 million credit union members nationwide are participating in “Invest in America,” Adams added.

CU System briefs (06/08/2009)

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* MADISON, Wis.(6/9/09)--CUNA Mutual Group says that in addition to 52 layoffs it announced Thursday at its Madison corporate headquarters, the company will also lay off 21 employees in its other locations. Those layoffs were announced Thursday also. The employees received 30 days notice. For more information, see CUNA Mutual story in Monday's News Now … * ARLINGTON, Va. (6/9/09)--FDIC FCU and National Science Foundation CU, both based in Arlington, Va., have merged into The Partnership FCU, as of June 1(FOCUS Newsletter June 8). The merger creates a more efficient back-office operation while allowing the front-line organizations to continue offering personal service to their members. The merged credit union "combines the strengths of our individual credit unions to help us achieve economies of scale we cannot create on our own," said Theresa Mann, CEO of The Partnership FCU. Lynn Whalen, former CEO of NSF FCU, is senior vice president of organization and people development for The Partnership FCU. The new credit union's board includes members from both credit unions' former boards. "We look at this as the beginning of a new kind of credit union that can welcome additional credit unions looking for improved cost efficiencies without sacrificing service or brand integrity," said Mann … * SALT LAKE CITY (6/9/09)--Staff at Beehive CU in Salt Lake City foiled a robbery Thursday by locking the doors so the wannabe thief couldn't get into the branch. An employee noticed a man pacing near the front door. When the man donned a beanie over his forehead and a bandanna over his lower face, the employee magnetically locked the inside doors. When he couldn't enter the credit union, he left (The Salt Lake Tribune June 5) … * LEXINGTON PARK, Md. (6/9/09)--Martha R. Thompson, 25, a former employee of Cedar Point FCU's Leonardtown, Md., branch, was charged with providing inside information to at least two men who robbed the $264.5 million asset credit union on Aug. 21, 2004. The heist netted more than $150,000. Thompson allegedly provided the men with the credit union's layout and operations, including which employees would be present the day of the heist and how much money was available. She allegedly received two cash payments to stay quiet. Thompson is charged with being an accessory before and after the incident. The alleged getaway driver, Derrick X. Green, 27, was charged May 19. His uncle, Cornelius L. Chase, 48, was arrested in 2004 as one of the two men who entered and robbed the credit union. His trial will begin next week (The Washington Post June 7) … * WESTERVILLE, Ohio (6/9/09)--Donald E. West Sr., retired CEO of Franklin County School Employees FCU, died June 3 at his home in Westerville, Ohio. He was 73. He was CEO of the $27 million asset credit union based in Columbus for 28 years before he retired. Services were Monday. He is survived by his wife, three children, nine grandchildren (The Columbus Dispatch June 7) …

Summit CUs domain expires website inaccessible Friday

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MADISON, Wis. (6/8/09)--The domain name for the website of Summit CU, Madison, Wis., expired at midnight Thursday, which meant the website was inaccessible to some members Friday. The domain name expired due to improper vendor notification. The domain, www.summitcreditunion.com, was reactivated in the early morning hours as soon as it was discovered, the credit union said in a telephone recording. Members’ Internet service providers needed to reactivate the domain, and depending on when the reactivation took place, some members may have had trouble accessing the site throughout the day Friday, Summit said. Summit assured members that their information was safe and secure. The largest credit union in the state, Summit has $1.2 billion in assets.

Wegner Award nominations due soon location set

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MADISON, Wis. (6/8/09)--Credit union supporters can nominate individuals and organizations for the 22nd Annual Wegner Awards to be presented by the National Credit Union Foundation (NCUF). Nominations are due June 19. The awards are:
* The Individual Achievement Award, which honors an unsung hero for innovative concepts and/or accomplishments that have significantly impacted the national and/or international credit union movements within the past 10 years--or have a significant potential impact now. Nominations must cite a specific subject of achievement. Examples include financial literacy, service to the underserved, alternatives to predatory lending, and/or new products. * The Outstanding Organization/Program Award, which honors an organization or program for innovative concepts and/or products/services that have made a significant impact with measured results on the national and/or international credit union movements. * The Lifetime Achievement Award, which honors individuals who have dedicated their life to promoting the credit union philosophy of “People Helping People.” This person must have created innovative concepts and provided leadership that has made a significant and lasting impact on the national and/or international credit union movements.
Nominations can come from individuals and/or organizations. Four steps to make a nomination:
* Print the Wegner Awards nomination form from the NCUF website (www.ncuf.coop). * Fill out the nomination form. * Gather at least five letters of recommendation citing examples of the nominee’s achievements relevant to the award criteria. * Send the nomination form and recommendation letters to NCUF by June 19.
“With all the negative news swirling around the financial industry, it is more important now than ever to showcase the positive impact credit unions make on consumers,” emphasized NCUF Executive Director Steve Delfin. “We encourage credit union supporters from every state to nominate their best and brightest for the national Wegner Awards.” Winners will be honored in conjunction with the Credit Union National Association’s 2010 Governmental Affairs Conference in Washington, D.C. The 22nd Annual Wegner Awards Dinner will take place on Feb. 22 at the Grand Hyatt Washington.

CUNA Mutual Group to lay off 52 staffers

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MADISON, Wis. (6/8/09)--CUNA Mutual Group Thursday notified 52 employees at its Madison, Wis., corporate headquarters that their positions will be eliminated in 30 days. The majority of the company-wide job cuts are back-office, non-customer-facing positions. The human resources and finance departments are the two areas most impacted by the cuts, Jim Buchheim, vice president of corporate communications, told News Now. CUNA Mutual has about 4,500 employees worldwide, with roughly 2,000 in Madison. To reduce expenses, the company also said it is moving to a cash-balance pension plan from a defined benefit pension plan--though employees will retain what has been accrued in their defined benefit pension. The company also is achieving expense savings through project reductions and eliminations, reductions in contracted work and company travel. However, CUNA Mutual is not using furloughs nor is it suspending the 401(k) company match, which is 5%. “The decisions that drove these savings were difficult, but necessary as we position the company to weather this economy and to take advantage of opportunities that will be available in the future,” Buchheim said. “These changes put us on track to achieve our 2009 financial plan and will help us maintain solid operating margins, strong capital and 'A'-level financial ratings. “Internally, we are emphasizing that change will continue at CUNA Mutual as we sharpen our product focus and continue to drive operational efficiencies,” he added. “For example, employees have submitted more than 1,000 expense-savings ideas--ideas that will help deliver ongoing savings and improvements.”

CU System briefs (06/05/2009)

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* MERIDEN, Conn. (6/8/09)--Representatives from 65 affiliated credit unions Wednesday attended the Credit Union League of Connecticut's RESPA Conference on updates to the Real Estate Settlement Procedures Act regulations. Shown addressing questions on specific regulations is key speaker Andrew B. Fay, supervisory coordinator, Department of Housing and Urban Development (HUD), Office of RESPA and Interstate Land Sales. Assisting Fay were Jay Friedland, president of M&M Consulting, a compliance consulting firm and a Connecticut league strategic partner, and George Meagher, compliance officer with Sikorsky Financial CU, Stratford, Conn. Friedland will provide more RESPA workshops on Aug. 27--one targeted to Connecticut Small Credit Union Support Program members, the other for medium and large credit unions. (Photo provided by the Credit Union League of Connecticut) … * MADISON, Wis. (6/8/09)--The University of Wisconsin-Madison has signed a 10-year contract giving Madison-based UW CU the exclusive right to provide students with a school identification card that is also a debit card (Associated Press Newswires June 4). In exchange, the university will receive $6.4 million in revenue from the more than $1 billion asset credit union. A committee of the university's Board of Regions approved the deal Thursday, with the full board expected to approve it Friday. The school will get the same amount of revenue no matter how many students sign up for the credit union's checking accounts …

NASCUS to mark 100th anniversary of state charter

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ARLINGTON, Va. (6/8/09)--The 2009 National Association of State Credit Union Supervisors (NASCUS) State System Summit will celebrate the 100th anniversary of the state credit union charter and provide a national forum to discuss growth strategies for the future. The event, scheduled for Aug. 20-22 at the Westin Boston Waterfront, Boston, attracts decision-makers from credit unions, regulatory agencies and the nation’s credit union associations and leagues. Summit speakers will discuss the future of the corporate credit union system, mortgage lending challenges and opportunities, regulatory restructuring, mergers and consolidation, supplemental capital, due diligence and vendor management. Speakers include:
* Tom Curry, Federal Deposit Insurance Corp. board member and former Massachusetts regulator; * Gigi Hyland, National Credit Union Administration (NCUA) board member and NASCUS/NCUA liaison; * Chip Filson, president, Callahan and Associates; * Tracy Ashfield, residential mortgage lending expert, Strategic Mortgage Solutions; * Richard Hagar, appraiser and real estate specialist; * Tom Candon, NASCUS chair-elect, Vermont Department of Banking, Insurance, Securities and Health Care Administration; and * Parker Cann, NASCUS Credit Union Advisory Council chair-elect, BECU, Tukwila, Wash.
For more information, use the link.

CU educator to share insight on Biz Kid curriculum

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COLUMBIA, S.C. (6/8/09)--Heidi Knudson, business development officer at Altana FCU, Billings, Mont., will share with peers at the National Youth Involvement Board’s (NYIB) 2009 Annual Conference her insight on the curriculum that accompanies the Emmy-nominated “Biz Kid$” financial education television program. Knudson, who has applied lessons from the Biz Kid$ companion curriculum in Montana middle school classrooms, is part of a comprehensive youth-focused agenda set for the Aug. 3-6 conferece, which meets at the Tempe, Ariz., Mission Palms. The session, “Turning Middle Schoolers into Biz Kid$,” will build on momentum for Biz Kid$, which is funded solely by credit unions and is aired on more than 97% of public television stations. Earlier this year, the Washington Credit Union Foundation announced to credit unions the availability of an online and CD-based curriculum educators can use to carry the program principles into the classroom. NYIB followed suit by adding “Biz Kid$” as a subject option within its system for collecting credit union classroom presentation data. Other NYIB Annual Conference topics include:
* Marketing to the Dot Com Generation; * Teens in Control: The Keys to a Fear-Free Student-Run Branch; * Cooperative Social Responsibility: A New Youth Marketing Tool? and * Achieving the Possible in Impossible Times.

Global Womens network inaugural forum set

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MADISON, Wis. (6/8/09)--Credit unions worldwide are stepping forward to support the Global Women's Leadership Network, launched earlier this year by the World Council of Credit Unions (WOCCU) and the Co-operative Development Foundation of Canada (CDF). The network aims to enable women credit union leaders to connect, communicate and seek confidential advice from their peers around the world. WOCCU and CDF are raising funds for the network to provide women in developed and developing countries with credit union resources to lead economic growth in their communities. Leaders who join the network also will gain access to the peer advisory group online and receive periodic updates on relevant credit union issues for women. Funds raised through the network will allow women credit union CEOs from 10 developing countries to participate in the first Global Women's Leadership Forum, the network's inaugural gathering. The forum will be offered in conjunction with WOCCU's World Credit Union Conference in Barcelona, Spain, July 26-29. To date, women leaders from Afghanistan, Belarus, Colombia, Ecuador, India, Kenya, Macedonia, Mexico, the Philippines and Sri Lanka will join the forum there. Participation in the forum is by invitation only. The forum is designed to tap the leadership experience of women who are credit union CEOs and executive team members, retired credit union executives, credit union volunteers and executives of credit union partner organizations. However, any individual contributing $250 or more to support women's leadership development through credit unions in developing countries automatically becomes a network member. For a list of network members, use the link.

5.4M students learn financial skills thanks to CUs NEFE

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MADISON, Wis. (6/8/09)--In less than a decade, the credit union movement has helped nearly 5.4 million high school students receive financial literacy training through its support of the National Endowment for Financial Education's (NEFE) High School Financial Planning Program (HSFPP). This means that about five out of six HSFPP student guides are from America’s Credit Unions. Since the agreement between the Credit Union National Association (CUNA) and NEFE took effect during the 1999-2000 school year, the America’s Credit Union logo has been displayed on the program’s financial planning materials, which were distributed to 5,373,000 students nationwide. CUNA, with help from CO-OP Financial Services, has provided monetary support for the continued distribution of the free materials. Credit unions and leagues have worked with NEFE to bring the HSFPP to more than 600,000 students since the 2000-2001 academic year--the first year CUNA began tracking credit unions' participation. “The successful partnership between NEFE and credit unions would not be possible unless CO-OP Financial Services stepped up to the plate and helped provide the funding needed to get this program into the hands of more high school students,” said Mark Condon, CUNA’s senior vice president of business and consumer publishing, whose department supervises the partnership with NEFE. “One of most reliable partners has been CO-OP’s President and CEO Stan Hollen, whose belief in the importance of financial education has never wavered, particularly now when the need to improve the rate of financial literacy has never been more obvious,” Condon added. NEFE developed the program in 1984 in response to studies indicating high school students' lack of financial knowledge as they graduate and move into the “real world.” The HSFPP student guide offers basic instruction to teenagers about such topics as personal finance planning, career/work factors and earnings potential, saving and spending money, investing, using credit wisely, protecting assets and identity, and obtaining and using financial services. It also teaches students to develop and maintain a personal spending and savings plan. The seven-unit program can be integrated into many standard classroom subjects. NEFE offers the program in partnership with CUNA and America's Credit Unions; the U.S. Department of Agriculture-Cooperative State Research, Education, and Extension Service and participating Land-Grant University Cooperative Extension Services.

Maine league honors CUs community member work

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WESTBROOK, Maine (6/8/09)--Six credit unions were recognized as the 2009 first place honorees of the Dora Maxwell Awards for Social
One of the first-place winners of the Dora Maxwell Social Responsibility Award presented by the Maine Credit Union League is Atlantic Regional FCU, Brunswick. Receiving the award for the $200 million to $500 million asset category from league board member Phil Moreau (left) is Chanel Coulombe, Atlantic Regional board member.
Among the Maine Credit Union League's Louise Herring Philosophy in Action Award first-place recipients was Down East CU, Baileyville. Here Down East CU Senior Vice President Linda Howe accepts the award from league board member Phil Moreau. The credit union's award was in the $50 million to $250 million asset category. (Photos provided by the Maine Credit Union League)
Responsibility and the Louise Herring Philosophy in Action Awards by the Maine Credit Union League. The awards were presented during the league's Annual Meeting & Convention. Six credit unions received first-place and three were awarded second-place spots. The awards are part of a national awards program coordinated by the Credit Union National Association. A Maine credit union has received a first- or second-place award in the national competition in seven of the past 10 years, a national record, said the league. Professionals from the Maine Public Relations Council and Maine Businesses for Social Responsibility judged the state-level awards, which honor credit unions for community and/or member service efforts during the past year. Dora Maxwell first-place award recipients, by asset size category, are:
* $20 million-$50 million: Great Falls FCU; * $50 million-$100 million: Central Maine FCU, Lewiston; * $100 million-$200 million--PeoplesChoice CU, Biddeford; and * $200 million-$500 million--Atlantic REgional FCU, Brunswick.
Louise Herring first-place award recipients, by asset size, are:
* Less than $50 million: Community CU, Lewiston; * $50 million-$250 million: Down East CU, Baileyville.
The state's credit unions counted among their community achievements the past year:
* Fundraising: Maine Credit Unions raised nearly $1 million for various causes including $375,296.59 for the Maine Credit Unions’ Campaign for Ending Hunger, $60,000 for Maine Special Olympics, $55,000 for the Children’s Miracle Network, $50,000 for the Maine Children’s Cancer Program and more. * Voluntarism: Maine credit unions volunteered more than 21,000 hours for community organizations and activities across the state.

Vermont law protecting seniors finances signed

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MONTPELIER, Vt. (6/8/09)--Joe Bergeron, president of the Association of Vermont Credit Unions (AVCU),
Attending the signing of the Senior Protection and Financial Services Act by Vermont Gov. Jim Douglas were Joe Bergeron, president, Association of Vermont Credit Unions (third from right); Ann Cummings, chair of the Vermont Senate Finance Committee (third from left); Paulette Thabault, commissioner of the State of Vermont Department of Banking, Insurance, Securities and Health Care Administration (BISHCA) (fourth from right); and Tom Candon, BISCHA deputy commissioner (second from right). (Photo provided by the Association of Vermont Credit Unions)
attended the signing last week of the Senior Protection and Financial Services Act by Vermont Gov. Jim Douglas. AVCU said it supported the legislation. Vermont is the 21st state to enact this type of legislation, AVCU said (Newslines Express June 5). The new Vermont law, passed by the state legislature earlier this year, aims to:
* Protect senior citizens by regulating reverse mortgages; * Certify the legitimacy of persons claiming to be experts in senior citizen financial matters; and * Prevent life insurance scams that use Stranger Owned Life Insurance (STOLI).
STOLI scams occur when an investor buys a life-insurance policy on a senior in exchange for paying the senior a small payment and designating the scamster as the policy’s beneficiary.

UsNet board officers elected

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ALBANY, N.Y. (6/8/09)--Universal Sharing Network (UsNet), a credit union service organization owned by New York credit unions, has elected new board officers at a meeting in Albany, N.Y.
Heading up the board are:
* Chair--Mark Pfisterer, president/CEO, AmeriCU CU, Rome; * Vice Chair--Vicki O’Neill, president/ACMG FCU, Solvay; * Treasurer--Edward Paternostro, CEO, Nassau Educators FCU, Westbury (re-elected at the meeting to a new three-year term); and * Secretary--Mark Welshoff, president/CEO, Palisades FCU, Pearl River.
The other UsNet board of directors are:
* Robert Allen, president/CEO, Teachers FCU, Farmingville (re-elected to a new three-year term); * Kevin Brauer, president, Northeast Region, Members United Corporate FCU, Warrenville, Ill.; * James Doig, president/CEO, Sidney (N.Y.) FCU; * Alfred Frosolone, manager/CEO, Niagara’s Choice FCU, Lockport; * Nancy Kasprzak-Whitmore, president/CEO, Niagara County’s FCU, Lockport; * William J. Mellin, president/CEO, Credit Union Association of New York; * Christine Peters, CEO, Family First of NY FCU, Rochester; and * Bruno Sementilli, president/CEO, Quorum FCU, Purchase.
UsNet is a partner of network provider, CO-OP Shared Branching, which offers participating credit unions and their members access to more than 3,700 credit union service centers nationwide.

WesCorp reports 7.6 billion loss for 2008

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SAN DIMAS, Calif. (6/5/09)--Western Corporate FCU (WesCorp) reported its losses for 2008 at nearly $7.6 billion, according to its audited Consolidated Financial Statements for 2008 and 2007. Losses on investments and securities totaled $7.736 billion but fee and operating income reduced the losses to $7.6 billion. Adjustments to reconcile net income loss to net cash indicated that $7.6 million in losses came from other than temporary impairment loss on securities. Impairment on investments in U.S. Central FCU Paid-In-Capital (PIC) totaled $114.7 million. According to the statements, Member Capital Accounts (MCA) and PIC "have been depleted to cover losses that exceeded retained earnings as of Dec. 31, 2008, and March 31, 2009," as mandated by National Credit Union Administration (NCUA) regulations. WesCorp has derecognized MCA amounting to $929.9 million, effective March 31, through retained earnings. That number is unaudited. The corporate also derecognized PIC accounts amounting to $213 million as of March 31 through retained earnings, and its corporate reserve and undivided earnings accounts were depleted and derecognized. Those figures also are unaudited. As of Dec. 31, WesCorp's capital ratio was -20.40%, well below the 5% required. Its retained earnings ratio was -24.41%, below the 2% required, and its core earning ratio was -23.66%, less than the 3% required. WesCorp and U.S. Central were placed into conservatorship on March 30 by NCUA. The financial statements are posted on WesCorp's website. For more detail, use the link.

Chatzky chats about CUs on the Today Show

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NEW YORK (6/5/09)--Consumers looking to minimize bank fees should consider credit unions as an alternative to banks, Jean Chatzky, “Today Show” financial editor, told viewers Thursday.
Matt Lauer and Jean Chatzky discuss minimizing bank fees on the "Today Show" Thursday morning. One tip: Consider a credit union. (Photo provided by CUNA)
Chatzky mentioned that banks used to have 250 different fees that they charged consumers, and that many fees are coming back because banks are looking to boost their revenues. Some banks don’t even allow customers to opt out of overdraft fees, she added. When Matt Lauer, the “Today Show” host, asked how consumers can get around some of these fees, Chatzky mentioned credit unions. “Consider banking with a small community bank or credit unions because fees at these institutions may be a little bit lower,” she said. That tip also was listed on a chart displayed on camera. The Credit Union National Association supplied comparisons of bank and credit union fees to one of Chatzky’s researchers for the segment.

Direct-deposit info sent to wrong people

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AUGUSTA, Maine (6/5/09)--Credit unions in Maine may want to note that about 600 individuals receiving unemployment benefits in the Augusta, Maine, area received direct-deposit information--including Social Security numbers--that did not belong to them. Dick Thompson, head of the state Office of Information Technology, said the office is treating the incident as a security breach. The mix-up resulted from a printing error at the office. The mailings contained information for each recipient plus that of another individual. Of the 5,000 forms the office sent, 597 were incorrect (Kennebec Journal June 4). The office sent a message to recipients about the problem within 48 hours to let them know what happened. It is taking full responsibility for the mistake, Thompson told the newspaper. There have been no reports of the data being misused, the Journal said. The incident is different from a typical credit card breach because the information was given to one other person, and if the data are misused, the office can identify who has the affected person’s information, Thompson said. Credit unions in Maine have dealt with several security breaches in recent years, including a Hannaford Bros. breach in March 2008 and a TJX data breach in January 2007. TJX owns several retail stores, including TJMaxx and Marshalls.

Three more corporates announce financials

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MADISON, Wis. (6/5/09)--Three more corporate credit unions--Southeast Corporate FCU, SunCorp FCU, and Constitution Corporate--have posted their financials and the impact of their exposures for losses. Southeast Corporate FCU noted that charges related to its shares in U.S. Central FCU and its mortgage-backed securities would result in a $79 million loss to its net income for April. That compares with a net income of $3.9 million it recorded as of Dec. 31, 2008. The $3.2 billion asset Southeast Corporate, in its statement of financial condition on its website, recorded retroactive impairment entries on its books for $23.4 million as of Dec. 31 and $60.5 million as of March 31. Analysis of Southeast's portfolio for first quarter 2009 also resulted in an additional impairment of 10 securities, for a $17.7 million loss recorded and adjusted retroactively in March. As of April 30, Southeast Corporate's exposure to securities supported by subprime mortgages represented 3.2% of its portfolio. Of the subprime exposure, $27 million (or 27%) is insured, said the report. SunCorp Corporate CU's financial statement indicates a $134.9 million loss for the year. It attributed the losses to its holdings in U.S. Central FCU and in mortgage-backed securities. Constitution Corporate FCU noted that all of its capital in U.S. Central, totaling $34 million, is fully impaired. Constitution Corporate reported an "unaudited credit loss" totaling $14.5 million for 2008 and a $36.9 million loss for first quarter 2009. These charges, combined with its holdings in U.S. Central, are expected to reduce Constitution Corporate's regulatory capital to about 2.50%, below the 4% capital limit set by the National Credit Union Administration as of March 31. Other corporates that recently made financial statements are WesCorp, Southwest Corporate FCU, Corporate One FCU and EasCorp. The latter three's results appeared in the June 4 issue of News Now, and WesCorp's is the topic of a separate story in today's issue.

UW CU launches payday-loan initiative

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MADISON, Wis. (6/5/09)--UW CU is rolling out Paycheck Advance, an alternative to traditional payday loans, on June 15. The program will give members in good standing access to a short-term loan without the traditional loan application process and will offer an interest rate dramatically lower than the average offered by storefront payday lenders. The $1.080 billion asset, Madison, Wis.-based credit union’s Paycheck Advance program has a fixed interest rate of 21.75%. The national average interest rate for payday loans in 2008 was 391%, according to The American Prospect, The New York Times and Consumer Credit Counseling Services, said the credit union in a press release. “We applaud Wisconsin legislators for recently drafting legislation which would protect consumers by capping the payday loan interest charged by licensed lenders at 36%,” said UW CU CEO Paul Kundert. The Paycheck Advance program will offer loans in amounts from $50 to $500, and require a $50 minimum payment per month. “The problem with storefront payday loans is that when you factor in the fees and the finance charges, it makes paying off the loan very difficult, if not impossible,” said Chief Credit Officer Mike Long. UW CU’s Paycheck Advance has several advantages. It:
* Requires no application fee; * Removes monthly service fee; * Has no prepayment penalty; * Can be used multiple times without reapplying; and * Provides a reasonable period for repayment.
“Paycheck Advance is a better alternative than a traditional payday loan,” Long said. “It provides members access to small, short-term loans with an option that does not subject them to unreasonable rates and fees. In addition, our financial specialists are available to work with members to determine if this product is the right fit for their situation or if they qualify for a product that is even more beneficial.”

Study Expect sustained debit transaction growth

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HOUSTON (6/5/09)--Credit unions can expect a sustained debit transaction growth despite the recession, according to a new study that identifies several positive trends for credit union and other issuers of debit cards. The 2009 Debit Issuer Study, commissioned by PULSE, also found that the use of personal identification number (PIN) debit has increased, while fraud loss rates for debit transactions has declined (BUSINESS WIRE June 4). Debit issuers surveyed saw an 8% debit transaction growth during the second half of 2008. That growth includes 15% growth in PIN debit transactions and 4% growth in signature debit. Those surveyed predicted growth in 2009 at 7% for each of the PIN and signature debit transactions. "Debit card use is expected to continue to grow as the economy bottoms out and begins to recover, because consumers use their debit cards for a large portion of necessary everyday expenses," said Cindy Ballard, PULSE executive vice president. More than one-fourth (27%) of all debit transactions last year were for less than $10. "In most cases, these transactions are replacing cash, highlighting a clear consumer preference for electronic payments," Ballard said. Penetration--the percentage of eligible accountholders who have a debit card--remained flat--at 73%. Using an expanded definition of "active" debit cards, the study found the number of issued cards used actively was 66%. PIN debit accounted for 35% of debit transactions in 2008--up from 34.2% in 2007. The average amount debited was $42 for PIN debits and $37 for signature debits. Both figures declined by roughly $1 from the year before. Active debit cardholders made on average 17.3 point-of-sale transactions per month, compared with 16.6 transactions a month in 2007. Debit card fraud losses at the point of use declined in all categories. PIN losses (in dollars per card) fell to $0.15 from $0.19. ATM losses declined to $0.56 per card, from $0.61. Signature card losses dropped to $1.81 from $1.92. Although losses for all three usage points declined year-over-year, the survey recorded an increase in share for the ATM losses, to 38% of total debit fraud losses last year. That is up from 25% in 2007. Other findings:
* Active debit cardholders averaged three ATM transactions a month, down from 3.4 in the previous survey; * More than half (53%) of issuers participate in a surcharge-free ATM network, down from 56% in 2007. And 43% offer ATM surcharge reimbursements to at least some cardholders. * Bill payments represented 10% of signature debit transactions, compared with 7% in 2007. * The percentage of debit card issuers offering debit rewards rose two percentage points to 53% this year. * Roughly 37% of debit card issuers offer mobile banking, compared with 15% in 2008, and 38% said they plan to introduce it soon, up from 28% last year.

Article notes CUs efforts to learn Spanish

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BATTLE CREEK, Mich. (6/5/09)--The Battle Creek Enquirer recently noted United Educational CU’s efforts to teach its employees Spanish. The Battle Creek, Mich.-based credit union is hoping to break down language barriers for consumers who speak Spanish as their primary language. Many Spanish-speaking residents in Battle Creek are unbanked. Instead, they use predatory lenders for their finances, the credit union told the newspaper (June 4). The credit union wants to reach out to those consumers, so they are offering their employees an eight-week language course. Because the first contact many Spanish-speaking members encounter at the credit union is a teller, United Educational member service representatives have been trained to say, “Wait, I’ll get a translator” in Spanish. They also can say, “How can I help you?” in Spanish. In addition to language training, United Educational is promoting a bilingual employee from part-time to full-time, and will hire another part-time bilingual employee. Staff also have learned that in Hispanic families, the husband usually handles all of the finances.

Summit members videos show charity campaign success

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MADISON, Wis. (6/5/09)--Summit CU, Madison, Wis., has placed nearly $8,000 into the communities it serves through its Pay It Forward initiative, and several videos on the credit union’s website show what kinds of causes members are looking to serve with the money. Earlier this spring, Summit handed out $10 bills to individuals at each of its 20 branch locations, asking, “If we gave you $10, what would you do for someone else?” The answers ranged from giving the money to local charities to giving to charities overseas. One member, Mary, said that she would give the money to a local food bank. The food bank can provide seven meals with $1, so the $10 would provide 70 meals, she said. Other members Summit interviewed said they would donate their $10 to Ronald McDonald House, purchase gas for a stranger, buy flowers for a teacher, sponsor a bicyclist for an AIDS Network race and help a friend with a prescription co-pay. Other members said they would give the money to individuals in Afghanistan, Mexico, Haiti and Darfur. Participants’ intentions were videotaped and posted on the Summit CU website. Until June 15, website visitors can rate their favorite video responses. The winner will receive $500, and Summit will donate $500 to the winner’s charity of choice. Summit has $1.2 billion in assets. To see the videos, use the link.

CUNA CFO Council honors outstanding volunteer

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MADISON, Wis. (6/5/09)--Kevin Durrance of Georgia FCU received the inaugural Outstanding Volunteer Award from the CUNA Chief Financial Officer (CFO) Council at the council's annual conference May 17-20 in Las Vegas. Durrance is executive vice president and CFO of the Duluth, Ga.-based credit union. The council delivers on its education-based mission for members with the aid of many volunteers. "Nothing we do is possible unless we get volunteers to help," said Pam Finch, council chair. She is also vice president of administration and CFO for Mid Minnesota FCU, Baxter, Minn. "They spend countless hours calling members, reading papers and reviewing regulatory updates on behalf of our members." Durrance, a 15-year member of the council, received the first award in honor of his efforts on four active council subcommittees and his willingness to regularly take on extra assignments.

CU System briefs (06/03/2009)

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* BOWLING GREEN, Ky. (6/4/09)--Service One CU's Campbell Lane Green Addition will install a LiveRoof next week. Designed by growers and experts in agriculture, roofing, logistics and ergonomics, the system will decrease indoor temperatures during warm/hot weather by six to eight degrees and reduce air conditioning costs by up to 50%, says the Bowling Green-based credit union. LiveRoof will extend the roof's lifetime by an estimated 200%-300% by protecting the rooftop from ultraviolet radiation, large temperature fluctuations, drying winds and punctures. The soil in the green roof system will act as a sponge, absorbing excess rainwater and reducing storm water runoff. Its plants and soil will create a habitat for butterflies, insects and birds. The $85 million asset credit union aims to obtain a platinum level of LEED certification. The addition already boasts geo-thermal heating and cooling, a bio-retention basin, reclaimed timbers, ICF walls, earth berms, grass pavers, recycled floor coverings, glass block windows with nanogel and natural day lighting … * INDIANAPOLIS (6/4/09)--The merger of Indianapolis-based Indiana Members CU and Marsh Employees FCU, Fishers, Ind., was completed Monday, the credit unions announced (The Herald Bulletin June 2). Indiana Members CU had $1.2 billion in assets and Marsh Employees had $13 million in assets. The combined organization will have 25 branches throughout Central Indiana … * HIGHTSTOWN, N.J. (6/4/09)--The New Jersey Credit Union League (NJCUL), in an effort to go green, has made the NJCUL Awards Program information available for download online. The forms and information are downloadable for each award … * HARAHAN, La. (6/4/09)--The Louisiana Credit Union League has awarded four scholarships to the Southeast CUNA Management School in Athens, Ga. Tami Beck, vice president of lending at Lafayette Schools FCU, received the 2009 Edgar L. Fontaine Memorial Scholarship with full tuition for the first year and 50% tuition for the second and third years. Jean Helmer of The New Orleans Firemen's FCU, Cindy Beauregard of Heart of Louisiana FCU, and Brian Leger of Lafayette Schools FCU were each awarded the 2009 SRCUS Management School Scholarship by the Southeast Regional Credit Union Schools. Those scholarships are $500 each toward tuition, said the league … * RICHMOND, Ind. (6/4/09)--Thomas A. Fitzharris, former president of NATCO CU, Richmond, Ind., died May 31 in Richmond. He was 84. Fitzharris was president of the credit union for 10 years and was active in the movement for 50 years. He retired from NATCO in 1983. Survivors include his wife, three children, eight grandchildren and one great-granddaughter, one brother and two sisters. Services are today at 10 a.m. at the Stegall-Berheide-Orr Funeral Home in Richmond (Palladium-Item June 2) … * LANSING, Mich. (6/4/09)--Dwight D. Stewart, who worked for two credit unions in Michigan and the Michigan Credit Union League, died May 27, according to the league (Michigan Monitor June 1). Stewart was a collection manager for a $100 million asset credit union beginning in 1981 and joined the league staff in 1990, where he was senior information specialist. He served as a compliance consultant on the MCUL helpline, analyzed proposals, prepared comment letters and contributed articles to MCUL's publications. In 2004, he left the league to become collector for Northwood CU. "He will be missed and our sincere sympathies go out to Dwight's family and friends," said MCUL President/CEO David Adams. Funeral services were Wednesday …

Southwest Corporate restates financials for 2008

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DALLAS (6/4/09)--Southwest Corporate FCU in Dallas has announced its restated unaudited financials for 2008, which shows its net loss for the year at $624.3 million. That compares with a $7.9 million loss reported originally. Additional other-than-temporary impairment charges accounted for nearly $490 million and reduction in U.S. Central FCU capital accounted for $127.2 million in losses. Southwest Corporate has nearly $129.9 million in membership capital shares remaining at U.S. Central and is awaiting the completion of U.S. Central's audit to finalize conclusions on the impairment of capital at U.S.Central, it said in its April financial statements. The $10.4 billion asset corporate said the losses eliminate the $317 million in retained earnings it reported previously, but changes in accounting rules reflect retained earnings totaling $10.5 million as of April 31. Distressed mortgage-backed securities (MBS) contributed $479.9 million in losses and additional $9.9 million impairment on Lehman Brothers' corporate bonds, effective Dec. 31, 2008. Members' capital accounts were more than $394 million, and total capital as of April 30, was $404.5 million. The corporate credit union's capital ratio as of April 30 was 4.08% with the retained earnings ratio at 0.11%. That compares a 6.46% capital ratio and a 3% retained earnings ratio on Nov. 30, 2008. Southwest Corporate's net income for the four months ending April 30 totaled $9.8 million, a decrease of $11.12 million over the same period in 2008. Return on assets was 0.36%.

Corporate One restates 2008 earnings

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COLUMBUS, Ohio (6/4/09)--Corporate One FCU has restated its original net income for 2008 from $21.6 million to an $18.2 million loss, according to its unaudited financial statements. Restated 2008 reserves and individual earnings are $85.2 million. The loss resulted from $39.6 million impairment charges on U.S. Central FCU capital investments made by Corporate One FCU, and $612,000 for Corporate One’s share of the National Credit Union Shared Insurance Fund stabilization expense. After the impairment charges, Corporate one said it has $34.3 million of membership capital shares remaining with U.S. Central. “We continue to evaluate the carrying over of this investment and may further adjust this balance, depending on the results of U.S. Central’s year-end audit, as well as any other additional charges that may result from continued deterioration of U.S. Central’s security holdings,” Corporate One said in its written statements. Corporate One also said it reversed bonuses of about $456,000 that accrued during 2008 but were not paid in 2009. The reversal was recorded effective Dec. 31, 2008. Corporate One’s net income for the four months ended April 30, 2009 totaled $5.9 million--a decrease of $2.9 million for the same period in 2008. The decrease is primarily due to a decrease in income due to a decline in interest rates year over year, the corporate said. The corporate’s regulatory capital ratio was 5.93% on April 30, which is “well in excess of the minimum regulatory level of 5%.”

Wis. budget may exempt CU from dealership closure

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RACINE, Wis. (6/4/09)--A provision in the Wisconsin state budget may allow Educators CU to continue operating its used-car sale business, which it was ordered by a state regulator last year to shut down. The regulator made the order after a state dealers association complained that car sales aren’t allowed under state rules governing credit unions. Last week, the state’s Joint Finance Committee included an amendment in the budget that would allow the $1.018 billion asset Racine, Wis.-based credit union to continue operating a used-car auto lot in Racine County (Milwaukee Journal-Sentinel June 2). However, auto dealers who asked the state Office of Credit Unions (OCU) last year to order Educators’ car business to cease operations said they will fight the amendment when the budget is considered by the state’s full legislature and--if it passes--by Gov. Jim Doyle, the newspaper said. In November, Educators CU said it would divest its auto dealership under an agreement with OCU (News Now Nov. 4). The credit union had established a retail automobile dealership to provide car-buying resources and used-car sales to its members and consumers in 2002. The Wisconsin Automobile and Truck Dealers Association had filed a complaint with the OCU, saying that the credit union charter does not allow credit unions to sell vehicles, the credit union said. Educators CU believes the complaint was filed to prevent competition--each year more than 700 individuals purchase high-quality used vehicles, the credit union told News Now in November. The OCU initially ruled that the State of Wisconsin Credit Union Statutes, Chapter 186, allows credit unions to own only car leasing services, not retail car sales. The credit union appealed the ruling, before the agreement was made. The dealers association filed a court petition to overturn the agreement the credit union had with the state regulator, which allowed 18 months for the credit union to divest its auto sales business (News Now Dec. 3, 2008). The petition was filed Nov. 12 in Dane County Circuit Court and named as defendants the OCU; the state Credit Union Review Board; Educators CU; and ECU Financial Services. Calls to officials at Educators CU and the OCU were not returned to News Now by press time.

EasCorp raises 18 million in new equity capital

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BURLINGTON, Mass. (6/4/09)--EasCorp FCU says that it raised close to $18 million in Paid-In Capital Accounts (PPIC II) (also known as Tier One capital) from 80 member credit unions as of May 15. That brought its total member-contributed Perpetual Paid-In Capital Accounts (PPIC I and PPIC II) to $37.7 million as of Monday. EasCorp said on its website that 104 member credit unions contributed. The new shares will count as capital equity under generally accepted accounting principles (GAAP). "In the end, the final decision was made based primarily on a relationship that has developed over the past seven years" between EasCorp and the credit union, said Bernie Winne, president/CEO of Boston Firefighters CU, told EasCorp.

Illinois CUs declare June as Shred Month

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NAPERVILLE, Ill. (6/4/09)--Due to a successful effort in 2008, Illinois credit unions statewide joined to declare June as “Shred Month” to help consumers protect themselves from identity theft and shred unwanted documents for free, said the Illinois Credit Union League (ICUL). On a credit union Shred Day, the community is invited to bring its unwanted personal documents, such as tax paperwork, old account statements, cancelled checks, credit card and ATM receipts, unwanted credit card offers to be shredded by the shredding truck in the participating credit union’s parking lot. “Every three seconds, someone becomes a victim of identity theft. Education and properly disposing of personal documents are among the best ways to deter thieves,” said Dan Plauda, IUCL president/CEO. “We invite the community to visit its local credit unions participating in Shred Days and bring their documents to protect themselves from identity theft.” Credit unions of Illinois are offering consumers guidelines about what documents to keep and for how long:
* Credit card receipts and statements--Keep receipts until a monthly statement arrives; if that’s correct, shred the receipts. Exceptions: Keep a receipt if disputing a bill or to cover a warranty or return period. Keep the statements for seven years if they contain tax-related expenses. * Pay check stubs--Make sure the information on paycheck stubs matches an annual W-2 when it is received, then shred the stubs. If an employer lists vacation/sick leave carryover on a paycheck stub, keep the last one of the year. Notify an employer if the information doesn’t match. * Credit union records--At the end of each year, go through share draft carbons or statements and keep only those related to taxes, business expenses, and housing or mortgage payments. * Tax records--The Internal Revenue Service (IRS) has three years to audit a return, and consumers have three years to file an amended return to claim a refund if they make a mistake. If a mistake is made of underreporting gross income by 25% or more on a return, the IRS has six years to challenge it. If a fraudulent return is filed or if one isn’t filed at all, the IRS can catch filers on it at any time. Keep a copy of all 1040 tax forms permanently. * Miscellaneous--Keep these permanently: Updated household inventory, birth and death certificates, marriage license, divorce papers, military records, insurance claims, accident reports and claims, proof of ownership and major debt repayment, individual retirement account contribution records and legal correspondence.

Ohio foundation grants 60k to Biz Kid

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COLUMBUS, Ohio (6/4/09)--The Ohio Credit Union Foundation (OCUF) board of trustees Tuesday approved a $60,000 grant to help underwrite season three of the Emmy-nominated television program “Biz Kid$.” The foundation is the philanthropic arm of the Ohio Credit Union League. Since 2006, OCUF has contributed $120,000 to underwriting the show. Biz Kid$ airs on 12 of 13 PBS stations broadcasting in Ohio, in all 50 states, and in 97% of national markets. Biz Kid$ was nominated in May for two Daytime Emmy Awards by the National Academy of Television Arts and Science. “The Ohio Credit Union Foundation has been committed to the success of Biz Kid$ from the start, and with the recent Emmy nominations, the show is gaining momentum and people are taking notice,” said Kathy Kanipe, OCUF board chair. A recent survey of Ohio’s PBS stations revealed better time slots for the program and growing viewership. WNEO/WEAO, which includes the Akron, Canton, Youngstown, and parts of the Cleveland markets, saw Biz Kid$ viewership increase 175% in its new time slot and more than 11,000 homes tune in regularly. PBS stations in Toledo (WGTE) and Cleveland (WVIZ) recently received grants from Outreach Extensions to promote Biz Kid$ to area educators. Biz Kid$ curricula are also on the Ohio league’s financial education resource www.MoneyAndStuff.info. Episode-specific supplemental curricula, created by Outreach Extensions, are available on the website for seasons one and two. The materials were created using national financial literacy standards. The curricula amounts to 78 hours of instruction for students in grades four through eight. Outreach Extensions is responsible for the curricula paired with the Emmy-winning television show “Bill Nye the Science Guy.”

Kansas CUs YouTube video contest a winner (06/03/2009)

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WICHITA, Kan. (6/4/09)--The Kansas Credit Union Association (KCUA) recently awarded Matt Elwood, an aspiring film director and member of Credit Union of America, Wichita, Kan., $5,000 for creating a video that encompasses the credit union difference.
Click to view larger image Credit Union of America member Matt Elwood received $5,000 for creating the winning video, the “Bank vs. Credit Union Rap Battle,” in the Kansas Credit Union Association’s (KCUA) YouTube video contest. Attending the check presentation were, from left, Ashley Bridgeman, KCUA director of marketing and communications; Josh Ellis, film collaborator; Marla Marsh, KCUA president/CEO; Frank Shoffner, Credit Union of America executive vice president; and (seated) Elwood. (Photo provided by the Kansas Credit Union Association)
Elwood and a collaborator, Josh Ellis, created a video, the “Bank vs. Credit Union Rap Battle,” which highlights credit unions’ financial services, member ownership and nonprofit status. The contest was sponsored by Kansas credit unions and moderated by KCUA. Contestants submitted videos and promoted them to family and friends to garner the most views. KCUA originally expected the videos to receive roughly 4,000 impressions, or views, but 17 videos received more than 25,000 views. The visitors were divided evenly between males and females, and individuals aged 13-25 and 45-55, KCUA said. “We have generated an astounding number of impressions in a short amount of time for a simple message: Credit unions are a viable alternative to traditional financial institutions,” said Ashley Bridgeman, KCUA director of marketing and communications. KCUA will use the messages obtained from the videos in a marketing campaign geared toward members of Generation Y. To see the videos, use the link.

HFOT readies for annual gala June 13

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BOSTON (6/4/09)--Homes for Our Troops and title sponsor The Credit Union Association of Massachusetts, Rhode Island and the New Hampshire will host a third annual gala on June 13 at the Copley Marriott in Boston. What separates this gala from the first two is that Homes for Our Troops, the national non-profit organization that helps injured troops, is five years old. It has given soldiers 40 specially adapted homes for severely injured veterans at no cost, and will build and complete over 30 homes in 2009. Special guests include:
* Eight severely injured veterans who live or will soon be living in their completed barrier-free home. * Two young wives who met at Walter Reed Hospital, Washington, D.C., when their husbands became roommates after sustaining severe head and spinal cord injuries in Iraq. Their husbands are now roommates in Tampa, Fla., at the James A. Haley Veterans Administration hospital. * A mother whose son is a paralyzed veteran who has been in and out of various VA hospitals. Also, the first severely injured female veteran to receive a specially adapted home.
“We don’t need big-name celebrities to help us celebrate our fifth year as a national non-profit organization,” said John Gonsalves founder of the Taunton, Mass.-based Homes for Hour Troops. “Our stars are the veterans who returned home severely injured that we have built specially adapted homes for.” Dan Egan, president of the credit union association for the three states, noted that "Our grassroots missions mirror one another, as credit unions are known as financial institutions of people helping people in communities throughout Massachusetts, Rhode Island and New Hampshire. “Credit unions are known for their community-based grassroots initiatives,” he added. “We proudly salute the men and women that serve in our military and are honored to support Homes for Our Troops as it helps rebuild the lives of our severely injured returning veterans.” Homes for Our Troops welcomed the help of the Republican and Democratic National Conventions, America’s credit unions, and the National Journal Group, Washington, D.C., in building new homes for wounded veterans in Denver and Minneapolis. In the months leading up to the presidential nominations last summer at the national conventions, Homes for Our Troops and its partners constructed houses in both the Colorado and Minnesota host cities.

Filene Research Institute turns 20

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MADISON, Wis. (6/4/09)--The Filene Research Institute Sunday celebrated its 20th anniversary as an outlet for academic and forward-looking research focused on the needs of credit unions. Filene was launched May 31, 1989 with support from the Credit Union National Association, CUNA Mutual Group and state credit union leagues. David Chatfield, a former National Credit Union Administration board member, was Filene’s first executive director. Since then, Filene has published roughly 250 monographs, white papers, innovation briefs and policy documents from researchers at Harvard, Cornell, Stanford, Oxford in England and other universities. Some works include the “Taxation of Credit Unions” and “Field of Membership: An Evolving Concept,” which Filene said helped lay the groundwork for the Credit Union Membership Access Act of 1998. In 2000, Filene added credit union innovation to its portfolio. It piloted REAL Solutions, which helps credit union serve the low-wealth. In 2004, Filene launched the i3 group, which stands for Ideas, Innovation and Implementation. It also has driven CU Tomorrow--a nationwide effort to make credit unions more relevant to the next generation--since 2007. “The board wanted Filene to be a place where credit unions could test new and even far-out ideas without fear of failure,” said Mark Meyer, Filene executive director. “Twenty years ago, the institute’s founders could not have foreseen the world [that] credit unions would be facing,” Meyer said. “But that’s precisely the reason for an organization like Filene: to think and to prepare credit unions for futures we can’t yet see.” “Today’s leaders are so busy running our credit unions that it’s hard to be as forward thinking as we should be,” added Patsy Van Ouwerkerk, chairman of the Filene Research Institute and CEO of Travis CU, Vacaville, Calif. “Filene research forces us to look ahead.” For a full timeline of Filene’s history, use the link.

Tierney named CU Hero of Year by magazines readers

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MADISON, Wis. (6/4/09)--Cathie Tierney, CEO of Community First CU, Appleton, Wis., is Credit Union Magazine’s 2009 Credit Union Hero of the Year. She was selected for the award by magazine subscribers and will be honored during the opening session of America’s Credit Union Conference and Expo June 21-24 in Boston. Tierney and her board were recently thrust into the national spotlight when Community First won a court case against the federal government over the Internal Revenue Service’s policy that subjected the credit union’s insurance-related products to unrelated business income tax (UBIT). The court’s decision strengthened credit unions’ position in other UBIT-related litigation. Tierney has been with the $1.1-billion-asset Community First for 33 years. Other nominees for the award:
* Carla Hedrick, CEO, Denver Community FCU; * John Herrera, senior vice president of Latino/Hispanic affairs, Self-Help FCU, Durham, N.C.; and * Regina McIlrath, president, Table Rock FCU, Shell Knob, Mo.

Shared branching saves members weekend getaway

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HARRISBURG, Pa. (6/4/09)--A few days after a Danville, Pa.-based credit union joined a shared branching network, a member put the new service to the test. Service lst FCU joined the CU Service Center network on March 9. On Friday, March 13, a member in a panic called the credit union from Vermont, according to the Pennsylvania Credit Union Association (Life is a Highway June 3). The member and his wife were on vacation. Just after arriving at their destination, he reached into his pocket and discovered he forgot to deposit his paycheck. He hoped the credit union could offer options to make the funds available for their weekend getaway. The credit union representative asked him for the ZIP Code of his location and found a CU Service Center about 10 miles from where the couple were lodged. About 30 minutes later, the member called again to say he had just visited the location and thanked the credit union for providing the service. Service lst FCU has more than $136.1 million in assets.

N.Y. official Allow CUs in underbanked program

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NEW YORK (6/3/09)--The New York State Banking Department will present its recommendations to the state banking board this week about how to expand its Banking Development District (BDD) program to bring banking services to underdeveloped areas. Some say credit unions should be allowed to participate. Critics of the current program say participants have not demonstrated they can meet the needs of underserved people, and State Banking Superintendent Richard Neiman has acknowledged a gap between what's offered by traditional banks and what's actually needed and used by underserved people (American Banker June 2). Credit unions should be allowed to participate in the program, something the banking lobby opposes, said Jonathan Mintz, commissioner of the New York City Department of Consumer Affairs. Only banks and thrifts are eligible for the program's benefits, which include tax breaks, below-market-rate municipal deposits and other incentives to banks that set up branches in underserved neighborhoods. The banking department held public hearings and received input from credit unions, community groups and alternative financial services providers, said the article. So far 38 branches in the state, including 25 in New York City, have qualified for the BDD program. Participants range from national companies like Capital One Financial Corp. and Citigroup Inc. to small local institutions.

Data breach suit targets CardSystems auditor

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NEW YORK (6/3/09)--In what may be a first in the field of data-breach litigation, a bank has sued the security auditor of CardSystems Solutions for liability in the 2004 data breach of the now-defunct card payment processor. Merrick Bank, based in Utah, sued the processor's security auditor, Savvis Inc., which had just given CardSystems Solutions an all-secure clearance three months before the hacking was discovered, according to Wired.com (June 2). The hacking compromised thousands of credit and debit cards, including those of credit union members. Hundreds of credit unions ended up closing accounts and reissuing cards and some saw losses due to fraudulent activity on the compromised accounts. The case will test the card industry's primary security standard, which was known in 2004 as Cardholder Information Security Program (CISP). CISP was the predecessor of today's current card industry standard, the Payment Card Industry Data Security Standard (PCI DSS). It will also test the liability of security auditing firms that deem companies as compliant with the standards. Merrick Bank, in its suit filed last year in Missouri, alleges that Savvis was negligent in certifying that CardSystems was complaint with industry standards. The compliance certification issue came to the forefront after Heartland Payment Systems and RBS WorldPay experienced large breaches even thought they had been certified as compliant with PCI standards. Another breached company, Hannaford Bros.,was certified in February 2008--while its customers' data were compromised in an ongoing breach process. The case moved to an Arizona court five months ago but only recently was assigned a judge, which means the case can move forward, said Wired.com. Arizona has a law that allows an entity that isn't a direct party to a contract to seek recovery if it is an "intended beneficiary" of the contract. In this case, even though Merrick didn't contract directly with Savvis to certify CardSystems, it relied on that certification being trustworthy, said the publication.

CU is among FIs sued over ATM fee disclosures

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PITTSBURGH (6/3/09)--Consumers filed nine lawsuits within two weeks in a federal court in Pittsburgh claiming there was no notice about fees on ATMs they used. A credit union is among those being sued. The suits are seeking class-action status. The credit union, $593.9 million asset Clearview CU, based in Moon Township, Pa., is being sued by Daniela Helkowski, who claims she withdrew cash on May 7 from an ATM at the credit union's main branch and was charged $2.25 for the transaction. In the suit, which was filed May 19 in the U.S. District Court for Western Pennsylvania, Helkowski said there was no sign at the ATM about the fees. The suit maintains the credit union's machine violates the Electronic Funds Transfer Act, which requires posting a notice "on or at" the ATM. The law requires notifying consumer of fees by signs located on or near the machines and on-screen before transactions are completed. Helkowki also filed a similar lawsuit against Sewickley (Pa.) Savings Bank on May 21. In that instance, she said she withdrew cash from the bank's ATM on May 6 and saw no disclosures about fees. Other defendants in similar suits include ATM Cash World, Northwest Savings Bank and Allegheny Valley Bank of Pittsburgh (Pittsburgh Tribune-Review June 1). The suits were all filed by the same Sewickley-based law firm.

CUNA-directed study supports preschool fin ed

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MADISON, Wis. (6/3/09)--Research into how young children learn indicates that they are capable of acquiring basic money concepts long before they enter school. Through social interaction and observation, preschoolers can begin to comprehend such abstractions as the purpose of money. That’s one of the key conclusions of phase one of the University of Wisconsin (UW)-Madison study into preschool financial literacy. The Credit Union National Association (CUNA) developed the concept and offered advice for the study, and a grant from the National Credit Union Foundation funded the research. Parents who guide their preschoolers in learning about money and saving obviously won’t create toddler Warren Buffets. “However, it is generally recognized that very young children can be taught about the basic benefits and tools of sharing, savings, and purchase that will support good financial habits and practices as children, leading to better managed financial lives as adult, independent spenders and savers,” the report said. In praising the study, CUNA President/CEO Dan Mica pointed out that full family membership policies put credit unions in a unique position to capitalize on this insight. “Four years ago, we created our Thrive by 5 teaching resource for parents on the hunch that it could help them explain and model smart spending and saving to their children from a very early age. This report says that we were right to push the financial literacy envelope below kindergarten," Mica said. “As the study moves forward, I expect that we’ll find out exactly what kinds of activities work best with this age group. With that knowledge we can improve Thrive by 5 if necessary, and give credit unions a tool for parents to better encourage healthy attitudes about money in their children before they begin school. The long-term result will be more financially secure adult members,” Mica added. The research was led by Karen C. Holden, Ph.D., professor in the UW’s Department of Consumer Science, and Charles W. Kalish, Ph.D., chair of the UW’s Department of Educational Psychology, with assistance from graduate students Laura Scheinholz, Deanna Dietrich, and Beatriz Novak. In the first phase of the planned three-year study, they reviewed dozens of previously unconnected studies of the development of economic concepts in early childhood. “The literature in cognitive development provides support for the proposition that financial literacy education is appropriate for young (preschool-aged) children. Children are already engaged in thinking about, and acting within, a financial environment. The conceptual tools they develop in their everyday lives will be the starting point for any formal educational efforts,” they concluded. The research team also examined 28 U.S. and 45 international programs to identify “the key financial concepts that are targeted in the financial education programs aimed at young children.” It found little evidence that these programs considered “the cognitive ability of children to grasp those concepts.” Furthermore, the researchers said, “There has been virtually no rigorous evaluation of these programs.” Future phases of the research will attempt to rectify these shortcomings by determining the most age-appropriate educational outcomes for preschool financial education and testing which methods and activities work best in preschool classrooms and in the home, starting with CUNA’s Thrive by 5. For the executive summary and the full research report, use the link.

Texas legislature ends with big CU wins some losses

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AUSTIN, Texas (6/3/09)--The 81st session of the Texas Legislature, which meets for five months every two years, ended Monday night with some wins for credit unions and some losses, the Texas Credit Union League (TCUL) said. This session, the TCUL Bill Analysis Team met weekly and reviewed captions and contents for over 7,000 filed bills, flagging over 400 for possible impact on credit unions. The team ultimately monitored more than 120 bills in the final weeks of the process (LoneStar Leaguer June 2). Texas credit unions had high hopes for the session, and most of those hopes will be rewarded, TCUL said. Among the victories for credit unions includes the passage of the Credit Union Department Sunset bill, which will allow the Texas Credit Union Department (TCUD) to continue as a separate, independent regulator of credit unions for another 12 years until 2021. Also, the Texas budget bill, SB1, fully funds the credit union department over the biennium, including providing all requested funds for examiners’ salary progressions--something that did not happen in the 2007 session, said the league. In a last-minute move over the weekend, State Rep. Drew Darby (R-72) helped pass HR 2900, a product of a conference committee going “outside the bounds.” The original bill HB 3870 and SB 2238 had died from procedural impediments. This revived bill will free the state financial regulatory agencies, including the credit union department, from being under much of the two-year appropriations/budget process in the future. Thus, TCUD will now become a semi-“self-directed” agency, with its budget set by the Texas Credit Union Commission. It is important for credit unions to make sure the commission holds the line on any unwarranted or unnecessary examination fee increases moving into the future, the league said. Credit unions also were relieved to see several bills fail to pass. These would have changed laws regarding acceptance of presented powers of attorney, and provided new penalties for internally mishandling child support lien requests. On the loss side for credit unions, two bills of interest did not get passed. HB 345, a data security breach bill, was set as the last bill on the calendar in mid-May on a procedural deadline. This is the second session that data security legislation failed to cross key hurdles in the face of business lobby opposition. Not a single vote was cast against it by a lawmaker. Democratic lawmakers, wishing to kill a Voter ID bill that had to pass May 26 or die, began to delay by eating up time talking (known as “chubbing”) on a Local and Consent Calendar for hundreds of bills. Voter ID legislation failed to make procedural deadlines and died, sinking many other pending bills, including HB 345, further down the legislative calendar. TCUL is preparing a complete legislative summary of the session, which will be made available to members in several weeks once the governor’s period to sign or veto bills has expired on June 20.

IAmerican BankerI CUs are the mouse that roared

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MADISON, Wis. (6/3/09)--Credit unions’ market share for the home loan origination market has grown to the extent that they could be called the industry’s “mouse that roared,” American Banker said Tuesday. With the reputation of large financial institutions hurt by aggressive loans that backfired during the real estate market’s boom, credit unions have gained more members, the publication said. Also, credit unions tend to have a better reputation than many lenders in the residential real estate finance business, and--for the most part--follow low-risk strategies, American Banker said. “People are looking for people they can trust to originate a mortgage,” Les Parker, president of Parker & Co., a mortgage advisory firm with clients that include credit unions, told the publication. Credit unions have some constraints on the their home loan growth such as regulatory and business culture changes they would need to implement to become bigger player in the mortgage business, and because of the nature of their membership paradigm, American Banker said. American Banker is a banking industry publication.

Clinton notes CUs in eulogy of ex-CUNA spokeswoman

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WASHINGTON (6/3/09)--Former President Bill Clinton talked about credit unions and Brooke Shearer's passion for them during a memorial service Saturday for Shearer, a former spokesperson for the Credit Union National Association (CUNA). Shearer, 58, who was communications director for CUNA in Washington during the 1980s, died May 19 at her home of cancer. She had known Bill and Hillary Clinton for 38 years, Clinton said. Clinton told about calling Shearer a week before she passed away, according to Larry Blanchard, CUNA Mutual Group legislative consultant, who attended the celebration of life service. Clinton and Shearer discussed the importance of credit unions, he told about 1,000 people at the service. She began the conversation by asking how the economy was doing, Clinton said. Clinton assured her President Barack Obama's administration had made a good start and things were improving. Shearer interrupted him and told him that they needed "to help credit unions get through that mess. We've got to get that fixed." Shearer remained enthusiastic about credit unions and during her final months sent letters to Obama's transition team and other policymakers about the positive impact credit unions had in helping members weather the recession. Other speakers at the service included Hillary Clinton; Supreme Court of the U.S. Associate Justice Stephen G. Breyer and his wife Joanna; Shearer's sons Devin and Adrian Talbott, and her daughter-in-law Lauren Talbott. Shearer served as Hillary Clinton's personal aide during Bill Clinton's 1992 presidential campaign. Shearer and her husband, Strobe Talbott, held positions in the Clinton administration. Talbott now heads the Brookings Institution research and policy center. Shearer was founding director of the Yale World Fellows program and was on the board of the International Center for Research on Women.

Canadas Central 1 CU restates financials

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VANCOUVER, B.C. (6/3/09)--Canada’s Central 1 CU announced that it has restated its 2008 financials. Central identified an error in its reporting, which led the credit union to overstate its 2008 net income by $3.2 million. The restatement reduces net income for 2008 to $26.6 million from $29.8 million. Net income, however, still represented a 9% increase over 2007. The amount transferred to retained earnings for 2008 is restated at $20.9 million, compared with the $24.1 million previously reported. Restated retained earnings at year-end 2008 were $188.1 million. Central’s Management’s Discussion and Analysis for 2008 and its 2008 Annual Report have been revised to reflect the changes. Central 1 CU provides services to credit unions in British Columbia and Ontario.

2009 WYCUP deadline is June 15

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MADISON, Wis. (6/3/09)--Those applying to the World Council of Credit Unions' (WOCCU) Young Credit Union People (WYCUP) Scholarship Program have until June 15 to submit their completed nomination materials. The program seeks individuals who have made significant contributions to the development of their own credit unions, regional or national credit union systems and have demonstrated the potential to employ their talents at the international level. Credit unions and credit union organizations that are affiliated with WOCCU members are encouraged to nominate the next generation of credit union leaders for the scholarship. To be eligible for the scholarship, nominees must be sponsored by their credit union or credit union organization to attend WOCCU's 2009 World Credit Union Conference in Barcelona, Spain, July 26-29; be 35 years old or younger as of Jan. 1; and submit a completed nomination form. The WYCUP scholarship, which consists of an all-expenses-paid trip to the 2010 World Credit Union Conference, will be awarded to five recipients at the 2009 conference. All WYCUP nominees will be recognized in Barcelona and invited to events organized specifically for participants under age 35, including a networking session. Conference registrants age 35 and under also qualify for a discounted registration fee. For more information, use the link.

Kansas CUs YouTube video contest a winner

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WICHITA, Kan. (6/3/09)--The Kansas Credit Union Association (KCUA) recently awarded Matt Elwood, an aspiring film director and member of Credit Union of America, Wichita, Kan., $5,000 for creating a video that encompasses the credit union difference.
Click to view larger image Credit Union of America member Matt Elwood received $5,000 for creating the winning video, the “Bank vs. Credit Union Rap Battle,” in the Kansas Credit Union Association’s (KCUA) YouTube video contest. Attending the check presentation were, from left, Ashley Bridgeman, KCUA director of marketing and communications; Josh Ellis, film collaborator; Marla Marsh, KCUA president/CEO; Frank Shoffner, Credit Union of America executive vice president; and (seated) Elwood. (Photo provided by the Kansas Credit Union Association)
Elwood and a collaborator, Josh Ellis, created a video, the “Bank vs. Credit Union Rap Battle,” which highlights credit unions’ financial services, member ownership and nonprofit status. The contest was sponsored by Kansas credit unions and moderated by KCUA. Contestants submitted videos and promoted them to family and friends to garner the most views. KCUA originally expected the videos to receive roughly 4,000 impressions, or views, but 17 videos received more than 25,000 views. The visitors were divided evenly between males and females, and individuals aged 13-25 and 45-55, KCUA said. “We have generated an astounding number of impressions in a short amount of time for a simple message: Credit unions are a viable alternative to traditional financial institutions,” said Ashley Bridgeman, KCUA director of marketing and communications. KCUA will use the messages obtained from the videos in a marketing campaign geared toward members of Generation Y. To see the videos, use the link.

CU System briefs (06/02/2009)

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* GADSDEN, Ala. (6/3/09)--Employees at three Etowah County branches of Gadsden, Ala.-based Community CU have gone on strike with the United Steel Workers Local 12. The strike began Monday (The Gadsden Times June 1). One branch on Albert Rains Boulevard will be closed temporarily because of negotiations. Employees picketed the main branch in Alabama City and the Rainbow City branch. Mike Morris, president of the $214 million asset credit union, told the publication that terms of the negotiations cannot be discussed publicly. He urged members to be patient and said he hoped the strike wouldn't last long. Employees from other branches outside of Etowah County and who not striking are working at the two open branches … * ST. LOUIS (6/3/09)--Canine crusaders at Arsenal CU springing into
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action on behalf of pets included the $127.3 million asset credit union's kids club mascot, Tracker the bassett hound, and employees. On May 16, the credit union's team of employees, financially supported by co-workers, family members and friends, helped raise funds for the Humane Society of Missouri's Dr. Doolittle Fund, which finances routine veterinary-medical care for homeless pets so they can be placed for adoption. The "Bark in the Park" event was held at Forest Park in St. Louis. Tracker was featured in a news report that aired on local NBC affiliate KSDK Channel 5. (Photo provided by the Humane Society of Missouri) … * SANTA ROSA, Calif. (6/3/09)--Redwood CU (RCU), based in Santa
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Rosa, partnered with the Blood Bank of the Redwoods for a blood drive at 10 locations in one week. They counted 204 donors, who gave 163 pints of blood, which has the potential to save 489 lives. Locations were Santa Rosa, Windsor, Rohnert Park, Petaluma, San Rafael, Novato, Point Arena, Ukiah, Cloverdale and Napa. Other RCU locations partnered with local businesses to hold the drives at their locations. RCU serves 145,000 members with $1.8 billion in assets. (Photo provided by Redwood CU) … * HAMILTON, Ohio (6/3/09)--Scott Edward Hester, 44, was taken into custody Monday after being on the lam since a May 27 robbery at a branch of AurGroup Financial CU, based in Fairfield, Ohio. He was considered armed and dangerous, and the incident caused evacuations and a lockdown of an elementary school. After being cornered at a residence, Hester refused to surrender, and a special weapons and tactics (SWAT) team used tear gas to capture him. Hester is charged with two aggravated robberies with a gun specification--at the credit union robbery and at a convenience store (Cox News Service June 1) … * ALBANY, N.Y. (6/3/09)--Kenneth J. Bopp, a member of Capital Communications FCU's board, died Friday in Albany at the age of 77. Through the years, Bopp served as a consultant for the Credit Union Association of New York; as branch manager of (GE) Silicone Employees FCU, Selkirk; and as president of both First Prize FCU and the Capital credit union chapter. He also was chairman of the board at Excelsior CU. "The association notes with sadness the passing of Ken Bopp," said William J. Mellin, president/CEO of Credit Union Association of New York. He added Bopp "was always ready and able to act on behalf of the credit unions of New York State…." Bopp is survived by his wife, three sons, one daughter, and 11 grandchildren …

Arizona CUs feel pain of first quarter says league

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PHOENIX (6/2/09)--Arizona credit unions were hit hard by a housing downturn, the job market and increases in bankruptcies during first quarter 2009, reports the Arizona Credit Union League. The credit unions are feeling the pain their members are feeling, Scott Earl, league president/CEO, told Associated Press. Roughly 95% of Arizona-based credit unions say they lost money during first quarter 2009. That compares with 75% of Arizona-based banks reporting losses for that period. Membership in credit unions, however, has risen to nearly 1.6 million members in the state, because people are seeking low-risk places to put their money, Earl said. More than one-third of the state's credit unions lost as least $1 million for first quarter. Arizona FCU, Phoenix, reported losing $48 million during the period, after a $116 million loss in 2008. Ron Westad, president/CEO of the $1.738 billion asset credit union noted that it's members are "middle America, and they have been drastically impacted by the local economy." The credit union reduced staff, tightened lending standards, closed some branches and reduced advertising. It also improved its loan quality and expects a better second quarter. Desert Schools FCU, a $3.167 billion asset credit union in Phoenix, reported a $12.8 million loss for the quarter. The state's largest credit union also said it still grew through the recession--with a 4% increase in membership, an 8% increase in deposits and 10% growth in loans.

First quarter saw strong growth for Michigan CUs

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LANSING, Mich. (6/2/09)--First quarter 2009 data show Michigan credit unions continued growth and increased lending in a challenging economy, says the Michigan Credit Union League. New-auto loans increased to $2.03 billion from $1.89 billion at an annualized growth rate of 30% for the quarter, said the league (Michigan Monitor June 1). Used-auto loans grew at an annualized rate of 10.8% to $3.53 billion. First mortgage loans experienced 2.8% in annualized growth rate--to $9.73 billion outstanding. "Credit union participation in the 'Invest in America' program continues to show promise as new- and used-auto loan volumes grow at a very strong rate," said Michigan league President/CEO David Adams. "The annualized growth rate of 40% in the fourth quarter of 2008 and the 30% in the first quarter of 2009 are particularly noteworthy, given the shrinking volume of car sales and auto loans affecting the industry as a whole," he added. The trend bucks the national trend. "New-auto loan volumes have been going down nationally in each of the past five quarters," Adams said. "But in Michigan, we're seeing very robust growth." Other data for first quarter:
* Total small business loans grew 16% to $713 million. Small business loans increased by 22% between March 31, 2008, and March 31, 2009. * Credit unions saw unprecedented growth in shares and deposits, which rose at an annualized rate of 26% to $30.9 billion. Total assets grew 23% to $36.4 billion. * Membership growth was a 0.64%, the strongest membership growth in the past five quarters. Total credit union net income was $13.1 million vs. $16 million during fourth quarter of 2008. The aggregate provision for loan losses continued at $72 million, down from the $99 million booked during fourth quarter 2008. * Aggregate net worth/assets ratio is 10.88%, well above the national average. Michigan credit unions held $9.1 billion in investments as of March 31, which is an increase from $8.2 billion at the end of 2008.

AARP Skip the bank look into CUs

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NEW YORK (6/2/09)--An article in AARP Bulletin Today discusses seven ways to beat the bank on fees. Its No. 7 suggestion: "Skip the bank, look into credit unions." "According to some credit union fans, the best way to beat the banks is not to use them," said the article (May 20). "When I hear my friends complaining about bank fees and service charges, I tell them to look into credit unions," Maureen Sherman of West Nyack, N.Y., told the publication. Sherman says she doesn't worry "about what new fees my credit union is tacking on to my account because, as a member-owner, not-for-profit organization, I know they have my best interest at heart." The article notes that readers will find credit unions offering the same products and services as banks but with no or lower fees than other financial institutions. It also discusses the member-owned structure of credit unions. To review the article and its seven tips for avoiding fees, use the resource link.

Michigan OFIR reaccredited by NASCUS

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ARLINGTON, Va. (6/2/09)--The National Association of State Credit Union Supervisors (NASCUS) approved the re-accreditation of the Michigan Office of Financial and Insurance Regulation (OFIR) for the fifth year in a row. The Michigan agency was the first state credit union regulatory agency to earn NASCUS accreditation status in 1989. OFIR supervises 215 credit unions with combined assets of approximately $25 billion. “Earning NASCUS re-accreditation is certainly a feather in our cap,” OFIR Commissioner Ken Ross said. “The intense review of our programs and operations provided our staff with valuable insight into where we were strong and where we had room for improvement.” NASCUS accreditation is valid for five years, subject to annual review. The annual review enables the accredited agency and the NASCUS Performance Standards Committee to measure progress and improvement. NASCUS’ 28 accredited states supervise 85% of state-chartered credit union assets. “NASCUS re-accreditation is a significant achievement and represents the effectiveness and sound supervision of the state credit union regulatory system,” said NASCUS President/CEO Mary Martha Fortney.

Altura CU postpones Coachella branch closure

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RIVERSIDE, Calif. (6/2/09)--The city of Coachella, Calif., has convinced Altura CU not to close its Coachella branch. Coachella Mayor Eduardo Garcia said closing the branch, which is located downtown, would have created a void and hurt commerce (MyDesert.com May 31). The Riverside, Calif.-based credit union had planned to close the branch Wednesday. “The city made a big push to work with us to see how they can help us out,” said Ricki McManuis, senior vice president of corporate communications with Altura, in a press release. “We know for sure we'll stay open until the end of the year,” she said. “We’ll continue to work with city officials, and hope to stay open beyond the end of 2009.” Six employees of the branch, originally slated to be laid off, now will remain Altura employees. The city may also open up some accounts at the credit union to generate business. The $889-million-asset Altura CU announced in April that it would close the San Jacinto and Coachella branches to reduce expenses (News Now April 6). The credit union is one of two financial institutions in Coachella.

GM Chrysler to continue support of CU loan program

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LANSING, Mich. (6/2/09)--With General Motors (GM) filing bankruptcy Monday and Chrysler set to come out of its bankruptcy restructuring this week, how do these events affect credit unions' auto loan program? The bankruptcies won't affect credit unions' incentive program, Invest in America, says David Adams, president/CEO of cuCorp and the Michigan Credit Union League. "We're a preferred supplier with Chrysler," said Adams, who told News Now that the same terms of the Invest in America contract will apply. "Their communications have made it clear that we will receive continued support through the contract and through the bankruptcy process. "Chrysler announced today [Monday] it would extend its terms with us to June 30," he said, terming the extension "a very rich offer for members." The program had been slated to end May 31. At GM, "our members will receive supplier pricing through the end of the year," Adams said. "Credit union discounts will remain in place," and, he noted, "credit union financing remains even more important to both GM and Chrysler." He emphasized "the partners' relationships will get stronger through this." Credit union members in Michigan have been hit hard by the auto manufacturers' problems. In the state, 24 credit unions are focused on the Michigan Big Three and their supplier companies. All have felt the pinch of cutbacks and unemployment, Adams said. The closure of a stamping plant in Grand Rapids this month was previously announced and "people were aware of it already," he said. Of the 14 dealers that will be affected by closures by 2012, seven are in Michigan. Of those seven, two are on standby. "The pain is continuing in temporary and permanent job losses," Adams said. "However, we're hoping that many plants will be redeployed in the automotive industry and many jobs brought back." He noted that not all jobs would return. The current 12.8% unemployment rate in the state is expected to increase. "We could very well see a 15% unemployment rate. "We've had eight years of recession and a steady stream of job losses in manufacturing. People have been slowly preparing for this [the closures]. With GM and Chrysler reinventing themselves, they likely will be smaller companies and employ fewer people." Michigan's credit unions serving the industry have become very diversified. One of the largest credit unions with the auto industry, Genesis CU, served employees in GM's truck and motor segments. It merged with USA CU and diversified. Each credit union had about $500 million in assets. "They are nicely diversified," Adams said. DFCU, a Dearborn-based credit union that serves Ford employees, has become a community credit union with lots of select employee groups (SEGs). It also merged with a state-chartered credit union, CapComm. And Research FCU, which served the GM tech industry in Warren, has merged with Community Choice and is no longer singularly focused on the auto industry, he said. "We've seen across the board, credit unions preparing for this. They are well-positioned and diversified. They will still have high loan losses and chargeoffs but they show strong numbers," he said. (See "First-quarter growth strong for Michigan CUs" in today's News Now.) In addition to planning and diversifying, credit unions have become very good in loan underwriting because they've seen the cycle for years. "But there's a lot more to come," Adams said. "While the rest of the country will be celebrating the national economic recovery next year, Michigan will be working through an extended recession for years to come. "It's a testament to credit unions that they are helping with auto loans and making small business loans. In the midst of the economic turmoil, credit unions show their strength by filling the voids and helping members and their communities," he noted.

CU deposits and capital rise earnings problematic

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MADISON, Wis. (6/2/09)--Credit unions are seeing a swell in deposit growth, but may find it harder to generate earnings over the next couple of years, according to a Credit Union National Association (CUNA) economist. The credit union movement’s overall capital-to-asset ratio for April is at 9.6%, and the total dollar amount of capital is at $83 billion, reported the CUNA monthly sample of credit unions.
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“After falling for three consecutive months, credit union capital levels rose 0.1% in April, reaching $83.34 billion,” Steve Rick, CUNA senior economist, told News Now. “Capital levels are now down 8.3% from the peak of $90.84 billion reached last November. “Credit unions’ return on assets is expected to fall to less than 0.20% in 2009--excluding corporate stabilization costs--as rising loan loss provisions eat up most pre-provision income,” he added. “Over the next couple of years, all financial institutions are going to find it harder to generate earnings.” Credit union asset balances rose 0.5% in April and 4.7% year-to-date, Rick said. With assets growing faster than capital, the capital-to-asset ratio fell to 9.56% in April from 10.8% at the end of 2008. “With this ratio expected to fall over the next two years, credit unions are now operating with a heightened awareness of risk, especially the systemic risks facing an economy going through the worst recession since the Great Depression,” he added. Credit union loans outstanding increased 0.2% in April 2009 and 0.3% during the first four months of 2009, down from a 1.2% increase during the same period of 2008.
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Leading loan growth was other loans, rising 1.8%, while credit card loans and home equity loans grew 1.1% each. Used-auto loans (0.8%) and adjustable-rate mortgages (0.7%) also increased this month. Declining during April were other mortgages (-1.2%) and new-auto loans (-1.1%). “Relative to other financial institutions, credit unions maintain more consistent credit standards throughout business cycles,” Rick said. “This cost credit unions some loans in good times, but is now increasing their credit market share in the current economic downturn. “Specifically, credit unions are making significant gains in the mortgage market,” he continued. “Fixed-rate mortgage loans are up 10.5% from April 2008, while home equity loan balances are up 13%. Credit unions need to guard against a rising adverse selection problem, however, as high-risk borrowers who are denied credit at banks turn to credit unions for loans.” Credit union savings balances rose 0.7% in April, but grew 6.4% during the first four months of 2009. Individual retirement accounts grew the fastest with a 3.6% increase, followed by money market accounts (1.4%), share drafts (1%) and regular shares (1%). One-year certificates declined 0.6% during April. “As U.S. households change their financial behavior by deleveraging their balance sheets, credit unions are seeing a surge in deposit growth,” Rick explained. “Savings balances rose 0.7% in April and 6.4% year-to-date, the fastest pace since the 2001 recession. Credit unions should not minimize the scale of the changes sweeping over the financial services industry and should begin planning for the ‘new normal’ business environment.” The loan-to-savings ratio remains close to 79% during the last three months. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 19%. Credit union 60-plus-day delinquencies grew to 1.6% in April 2009 from 1.5% in March.

CUs raise 222000 for Idaho childrens hospitals

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BOISE, Idaho (6/2/09)--Idaho credit unions raised nearly $222,000 to benefit the Children’s Miracle Network through their Credit Unions for Kids program. One hundred percent of the money will benefit children’s hospitals in the state. Idaho credit unions raised more than $1.8 million for Children’s Miracle Network in the past 14 years, according to the Idaho Credit Union League. Credit unions raised the money through raffles, holiday bazaars and ‘skip-a-payment’ programs, the league said. Credit Unions for Kids is a credit union industry effort to raise money for Children's Miracle Network. Credit unions nationwide contributed $9,322,827 to children's hospitals in 2008, making Credit Unions for Kids the third largest fundraising sponsor for the charity (News Now May 28).

Ohio CUs declare The Summer of Money

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COLUMBUS, Ohio (6/2/09)--Ohio credit unions have declared this summer as “The Summer of Money,” a financial education effort that coincides with the start of summer break for school-aged children. During “The Summer of Money,” the Ohio Credit Union League encourages parents to use information from the league’s website, www.MoneyandStuff.info, to teach their children money concepts. The recently updated curriculum on the site is broken down by age group. “Just because children are home from school does not mean they need to leave education in the classroom,” the league said. About 23% of Ohioans make any effort to encourage financial literacy in their families, according to the league. Five percent of consumers surveyed report being taught personal finance when they were young. The league said it sees a direct connection between financial illiteracy and rising bankruptcy rates, debt and foreclosures.

Top 10 INews NowI stories for May

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MADISON, Wis. (6/2/09)--Here are the Top 10 News Now stories most requested by readers during May. Use the link to review the entire story online. 10. Sixty gang members nabbed in $500,000 scam vs. CU SAN DIEGO (5/15/09)--More than 60 members and associates of the San Diego Lincoln Park Street Gang were arrested Tuesday and charged with stealing $500,000 from a credit union by recruiting young credit union members to give up their account information so the account could receive counterfeit check deposits. 9. House panel to discuss corporate stabilization WASHINGTON (5/13/09)--A House Financial Services subcommittee will discuss the National Credit Union Administration's (NCUA) corporate credit union stabilization plan in a May 20 hearing. 8. Member pops question at annual meeting, CEO says yes PORT HURON, Mich. (5/12/09)--It was all business at E&A CU's annual meeting May 4, but the conclusion brought a surprise and some happy drama to the Port Huron, Mich.-based credit union's meeting. 7. Kanjorski offers corporate CU stabilization bill WASHINGTON (5/14/09)--Rep. Paul Kanjorski (D-Pa.), a longtime supporter of the credit union movement, has introduced legislation that will "recapitalize the credit union deposit insurance system to ensure the long-term stability of the credit union system." 6. CU stabilization, insurance fund mods clear Senate WASHINGTON (5/7/09)--The Senate on Wednesday voted 91-5 to approve S. 896, the Helping Families Save Their Homes Act, which now includes provisions to create a temporary Corporate Credit Union Stabilization Fund and permit credit unions to spread the cost of National Credit Union Share Insurance Fund (NCUSIF) replenishment over a longer period of time. 5. More accounting guidance sent to NCUA examiners WASHINGTON (4/10/09)--National Credit Union Administration (NCUA) examiners received additional clarification today regarding credit unions' flexibility in booking the National Credit Union Share Insurance Fund (NCUSIF) deposit impairment, according to NCUA. 4. Community First CU wins UBIT case GREEN BAY, Wis. (5/15/09)--Community First CU has won its challenge against the federal government over the Internal Revenue Service's (IRS) interpretation of the unrelated-business income tax (UBIT) as it relates to three insurance products. 3. Matz to be nominated as NCUA chair WASHINGTON (5/22/09)--Debbie Matz is President Barack Obama's choice to become the new chair of the National Credit Union Administration (NCUA), the White House announced Thursday. 2. House, Senate pass corporate stabilization bill WASHINGTON (5/20/09)—The House and Senate on May 19 approved S. 896, the Helping Families Save Their Homes Act, which would extend $250,000 share and deposit insurance coverage and help credit unions manage the impact of the financial crisis on the credit union system through a corporate stabilization program. 1. President's pen turns corporate stabilization plan into law WASHINGTON (5/21/09)--In a ceremony held at the White House on May 20, President Barack Obama signed S. 896, the Helping Families Save Their Homes Act, into law.

CU System brief (06/01/2009)

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* COLUMBIA, S.C. (6/2/09)--The National Youth Involvement Board (NYIB) has instituted a referral incentive for the NYIB Conference Aug. 3-6 in Tempe, Ariz. "We are asking that people share information on the conference with peers--credit union pros, cooperative extension agents and the like--while asking that any who decide to register enter at registration the name of the person who referred them," said NYIB Chairman Brandon Pugh. Each referral constitutes a separate entry in a random drawing for a complimentary registration. Also, the person who refers the most people will receive a complimentary registration. "Because we are a volunteer organization of peers without a significant budget for outreach, word-of-mouth is a necessary tool for us to bring more people together, whether at the conference or in sharing through our listserv and the resource pages on our website." The registration page has optional fields for "Referred by name" and "Referred by CU/organization." Any credit union that registers more than one person pays $100 less for each additional participant, Pugh told News Now

MDDCCUA honors marketing outreach award winners

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COLUMBIA, Md. (6/2/09)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) announced the recipients of its marketing and outreach awards Wednesday.
District Government Employees FCU (DGEFCU), Washington, D.C., received the Christine DeWitt Memorial Award for Excellence in Marketing, Best of Show. Accepting the award were (from left): Claudia Saidon, Graphic Ideas; Joann Clark, DGEFCU chairman; Charlie DeWitt; Mallorie David, COMSTAR FCU; Carla Decker, CEO, DGEFCU; and Mike Beall, Maryland and District of Columbia Credit Union Association CEO. (Photo provided by the Maryland and District of Columbia Credit Union Association).
District Government Employees FCU, Washington, D.C., received the Christine DeWitt Memorial Award for Excellence in Marketing, Best of Show. Carla Decker, CEO; Joann Clark, chairman; and Claudia Saidon and Maximo Gastaldi from Graphic Ideas, accepted the award. The award memorializes Christine DeWitt, former vice president of operations of COMSTAR FCU, Clarksburg, Md., who died in 2007. Chessie FCU, Cumberland, Md.; MECU, Baltimore; and Credit Union Miracle Day Inc., received Dora Maxwell Social Responsibility awards. Chessie won in the $100 million to $200 million assets category, and MECU won in the $500 million assets category. Chessie and MECU also won the Louise Herring Award for Philosophy in Action, and MECU received the Desjardins Youth Financial Education Award. For a complete list of winners, use the link.

Idaho league names outstanding pro volunteer

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BOISE, Idaho (6/2/09)--The Idaho Credit Union League named recipients for its Outstanding Professional of the Year and Outstanding Volunteer of the Year awards. The awards were presented during the league’s 73rd annual meeting.
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Val Guenther, CEO of Lewis Clark CU in Lewiston, received the Professional of the Year award. She has worked in the Idaho credit union movement for more than 30 years. Guenther is an advocate for youth financial literacy; serves as vice chair of the board of League Services, Inc., the for-profit arm of the Idaho league; chairs the league’s scholarship committee; and serves on its Credit Unions for Kids Committee. Ron Anderson, chairman of Kamiah (Idaho) Community CU, received the Outstanding Volunteer award. He chairs the credit union’s board of directors and has been involved with the league’s Hike the Hill events in Washington, D.C. He also has been involved with community events, such as volunteering to repair the city’s American Legion building and contributing to Credit Unions for Kids.