Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

CU System Archive

CU System

Two Mass. CUs get state OK to merge

 Permanent link
BOSTON (7/11/12)--Massachusetts' state credit union regulator has approved the merger of Boston-based Massachusetts State Employees CU into Chelsea-based Metro CU.

The Division of Banks in the Office of Consumer Affairs and Business Regulation said in its June 29th Activity Report that it granted permission on June 12 for the two to merge, with Metro continuing as the surviving credit union. State Employees CU's sole branch will be retained as a branch office of Metro.

Metro has more than $1 billion in assets; its 13 branches serve more than 140,000 members. Massachusetts State Employees CU had $71.7 million in assets, one branch, and se4rved 12,532 members.

Scam spreading fast in Pennsylvania

 Permanent link
HARRISBURG, Pa. (7/11/12)--State police in Pennsylvania are investigating a series of blast texts and calls that have duped members of credit unions and bank customers into revealing their debit or credit card numbers during last weekend. In one township, victims have lost a total of $10,000.

The scam "is spreading across the Commonwealth and gaining momentum and victims," reported CBS 21 ( July 9).  Lower Paxton Township Police, which has received numerous reports from people who received the text message, said the scam is growing so fast that five credit unions in the area posted alerts on their websites (The Patriot News, via July 9).

Area residents received a text message on their cell phones telling them that their Visa debit or credit card had been deactivated. Some of the texts indicated the victims should call 717-553-6918--a local number--to reactivate the card. The call is answered by what sounds like an automated answering system identifying itself as "Belco Community Credit Union 24-hour Card Activation Services."

The entity is bogus. Belco Community CU is  a $372.6 million asset credit union in Harrisburg that has no relationship with the calls, said the media reports.

Callers are prompted to enter their credit/debit card number and then directed to enter their personal identification number (PIN) and change it. If they comply, the victims usually discover that someone in California is checking their balance and making large cash withdrawals from their accounts, said police.

Several reports noted that a Halifax, Pa., couple lost $2,321 when they complied with the text and provided their debit card numbers. Belco Community said one member entered their number and $3,000 was taken from the account ( Lower Paxton Township Police said so far residents in the township have lost $10,000.

One television station entered a bogus credit card number and the call disconnected.

A  member alert on Belco Community CU's website that said "Phishing scammers are targeting Belco and other financial institution members" with the fraudulent calls and texts.  It instructs visits to ignore the calls and texts. "They are fraudulent! No credit union or bank will ever request this information from you. This is a scam designed to get you to enter information for a valid credit or debit card."

CUs work on ATM bill noted in IN.Y. TimesI blog

 Permanent link
NEW YORK (7/11/12)--Prior to Monday night's passage by the U.S. House of a bill that would limit duplicative disclosure requirements about fees on ATMs, The New York Times' Bucks blog took note of efforts to pass the bill by credit unions and the Credit Union National Association (CUNA).

"Credit unions, banks and ATM operators are asking Congress to change a rule that requires them to display notices outside ATMs that warn noncustomers that they may incur fees using the ATM," the Times blog said in its lead paragraph in the article, entitled "Banks Seek Help Against ATM 'Vigilantes.'"

"The Credit Union National Association says at least 110 class-action lawsuits have been filed against credit unions over the last two years, at least 20 of which were filed in the first four months of this year," the Times blog reported.

"Banks and credit unions deem the lawsuits frivolous and have asked Congress to drop the requirement for external notices, leaving only the mandate for an on-screen device."

The bill would eliminate parts of Regulation E that require financial institutions with ATM services to display a physical notice on the ATM that a fee will be charged, and would require only a notice on screen. Some people travel around, remove physical notices, take photos of the machine without the notice and sue the institution as violating the Electronic Funds Transfer Act.

The House unanimously passed H.R. 4367 Monday night, 371-0. The measure now moves to the Senate. CUNA has urged the Senate to pass the bill. (See related story, "CUNA urges Senate to take up ATM bill," in News Now's Washington section).

To access the blog, use the link.

Midwest residents top priority Dig out of debt

 Permanent link
BELLEVUE, Neb. (7/11/12)--Regaining financial stability following the recession--mainly by managing debt--remains a primary area of focus for many who reside in the Midwest, according to a new survey co-sponsored by SAC FCU in Bellevue, Neb., and the Institute for Career Advancement Needs (ICAN).

More than 5,500 respondents participated in the online survey titled Leading the Way-The 2012 Leadership and Finances Survey. "Decreasing debt" was cited as the financial area they are most looking to improve upon in the year ahead as it relates to finances, taking priority over "growing personal savings," which was the second most popular response and "saving for retirement," which ranked third.

Respondents also expressed doubts regarding their financial outlook, 68% reporting they were only "somewhat confident" in the overall state of their finances. They said they are managing their finances as best they can, but feel there is room for improvement when preparing for the future.

Of those "not confident" in the overall state of their finances, 65% were women--reporting that they are not managing their finances well and are not prepared for the future.

So what is fueling this sentiment? The recession appears to be playing a role, with 44% of respondents reporting the recession and market volatility have made them rethink how they view their personal finances. Of this group, the majority said the recession made them realize that they should be more conservative with their money, and become more educated overall regarding money management.

Other findings:

  • 40% reported the recession made them realize they need to spend less and save more, and  57% of respondents in this group were women;
  • 28% said it made them realize they need to learn more about overall money management, such as budgeting, saving, debt consolidation and refinancing; and 61% of this group were women;
  • 24% reported it made them realize they need to learn more about their own financial situation and take more of an active role.
Of those who hope to improve in "decreasing debts," "growing their personal savings" and "saving for retirement" next year, 93% are either "confident" or "somewhat confident" they will meet their goals.

The $570 million asset SAC FCU offered these following tips for consumers:

  • Examine your current financial position--Perform an audit on personal finances, noting all major debts, interest percentages, amounts allocated to savings as well as impending expenses that will require additional planning, such as retirement and higher education.
  • Identify areas of opportunity--Given a financial situation, are there opportunities to consider for improving the outlook, such as refinancing major assets such as a car or home, consolidating debts or establishing a long-term savings plan?
  • Make it happen--Once key opportunities for optimizing finances have been identified, be sure to follow through. Find a financial partner to help prioritize and implement plans based on goals.

Ga. regulator orders fake CU to cease and desist

 Permanent link
ATLANTA (7/11/12)--The Georgia Department of Banking and Finance has issued a cease-and-desist order against an entity calling itself Georgia Entertainer's CU in Smyrna, Ga., to stop calling itself a state-chartered credit union.   

The order was made known to the credit union in a July 3 letter to Aneesah Bray-LaStrape, a representative of the credit union, sent by Kevin B. Hagler, the department's deputy commissioner for supervision.   

The letter states: "On April 12, 2012, the department sent a letter to Georgia Entertainer's CU directing this entity to cease immediately from using 'credit union' in its name and claiming to be a Georgia credit union, in organization or otherwise, in violation of Georgia law. The department required a written response to its directive by April 27, 2012. The department received a letter from you dated April 25, 2012. However, this response did not adequately address how the entity was going to comply with the department's directives."

A subsequent letter the department sent May 24 failed to elicit a satisfactory response as of July 2, so the cease-and-desist order was issued, the department explained in its July 3 letter.

In the order, the department said: "Georgia Entertainer's CU is a company which, according to documentation obtained by the department is claiming to be a credit union organization located [in] … Smyrna Ga. The department has no record of Georgia Entertainer's CU and has not approved the entity to organize a credit union and/or conduct a credit union business in Georgia. Furthermore, the department has not granted the entity permission to use 'credit union' in its name."

The department gave Georgia Entertainer's CU until July 18 to respond with the actions it has taken to comply with the order.

The Georgia Credit Union Affiliates is aware of the order but said it had no other information on the matter when contacted by News Now.

Ohio CUs consumer loans rise 37

 Permanent link
COLUMBUS (7/11/12)--Ohio credit unions' consumer-loan origination growth increased 37% year over year during the first quarter to $972 billion, outpacing the national average, said to the Ohio Credit Union League.

Consumer loans were a primary driver of that growth, rising 33.7% during the quarter to $1.5 billion, according to the league's Ohio Credit Union Quarterly Performance Summary.

Loan balances increased 4.7% over the previous 12 months at Ohio credit unions, more than double the national rate of 2.1%. Every component of loan originations posted an increase over the previous first quarter, the league said.

"Growth in consumer lending is a positive sign, not just for credit unions, but for the continued recovery of the economy as a whole," said Paul Mercer, league president. "It is also a sign that credit unions are helping their members manage difficult financial circumstances by offering affordable loan products that make sense for the consumer."

First-mortgage originations also were above levels reported in the first three months of 2011. Ohio credit unions originated $443 million in first mortgages in the first quarter of 2012, up 34.6% from 2011. First mortgages outstanding grew 4% annually to reach $4.3 billion at Ohio credit unions. Also, Ohio credit unions sold $202.3 million in first mortgages to the secondary market in the first quarter.

Auto loans grew 8.9% in the first quarter. Nationally, auto loan balances increased at a 2.6% annual rate. Used auto loan balances in Ohio increased 10.1% annually, while new auto balances rose 6.7% during the same time.

Credit card balances also posted annual growth, with balances growing 4% to $752.4 million at the end of the first quarter.

Business loan balances in Ohio grew 13.7% from the previous March, which is faster than the national average of 8.4% for the period. Outstanding business loan balances stood at $439.7 million at the end of the first quarter.

With business loan demand remaining strong, originations increased from levels reported in the previous March. During the first quarter, Ohio credit unions originated $29.9 million in business loans, up 5.4% from the $28.4 million in originations reported during the first quarter of 2011.

Although it represents just 3.4% of the Ohio loan portfolio, member business lending is becoming an increasingly important part of Ohio credit unions' product offerings, said the league. In the first quarter, 107 of Ohio's 374 credit unions reported outstanding business loan balances.

The Credit Union National Association (CUNA) and credit unions are urging the U.S. Congress to increase credit unions member business lending (MBL) cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said

Ohio credit unions added nearly 7,400 members during the past 12 months, with more than 4,000 of those members joining in the first quarter. This adds up to annual growth of 27 basis points, slower than the national average of 1.9%.

The rate of mergers and liquidations in Ohio during 2011 was below historical rates, with 10 credit unions in Ohio undergoing a merger or liquidation. The first three months of 2012 have shown a similar pace to 2011. During the first quarter, three credit unions merged.

NCCUL board elects exec committee

 Permanent link
RALEIGH, N.C. (7/11/12)--The North Carolina Credit Union League (NCCUL) board elected its executive committee for the upcoming two years, following the conclusion of its annual meeting June 12 in Pinehurst, N.C.    

The board re-elected all four directors to their previously held roles.

They are:

  • Maurice Smith, president of Local Government FCU (LGFCU) in Raleigh, who was re-elected chairman of the NCCUL board. Smith was first elected chairman in 2010. Smith will serve a two-year term. He has more than 30 years of experience in credit unions. He began his career as a loan officer with State Employees' CU, Raleigh, in 1979. He joined LGFCU as executive vice president in 1992 and was promoted to president/CEO in 1999.
  • Patty Idol, president/CEO of Mountain CU in Waynesville, who was re-elected vice chairman. Idol was first elected vice chair in 2010. She will serve a two-year term. Idol's credit union career spans 30 years. She has been president/CEO of Mountain CU since 1999.
  • Jeff Jones, president/CEO of Freedom FCU in Rocky Mount, who was re-elected NCCUL board Treasurer. Jones will serve a two-year term. His credit union career spans more than 30 years, including more than 25 years at Freedom.
  • Lola Bumbarger, manager/president of Century Employees' Savings Fund CU in Hickory, who was re-elected the board's secretary. She will serve a two-year term. Bumbarger's credit union career spans more than 30 years. She has been manager/president of the credit union since 1991.

CU System briefs (07/10/2012)

 Permanent link
  • HARRISBURG, Pa. (7/11/12)--TruMark Financial CU, a $1.4 billion asset credit union based in Trevose, Pa., hosted U.S. Rep. Pat Meehan (R-Pa.) at the credit union's Upper Darby branch recently, according to the Pennsylvania Credit Union Association's newsletter, Life is a Highway (July 10). TruMark Financial CU CEO Rick Stipa thanked Meehan for supporting the ATM disclosure reform bill, and discussed the member business lending and supplemental capital issues with the congressman. From left are, TruMark Financial CU Board Director Dan Dillard, Meehan, and Stipa. (Photo provided by the Pennsylvania Credit Union Association) …
  • ENTERPRISE, Kan.(7/11/12)--A former employee of Enterprise (Kan.) CU has pleaded guilty to one count of embezzling $85,000 from the $1.8 million asset credit union (The Capital-Journal and Associated Press via The Republic July 9). Deborah A. Bomia, 46, of Enterprise allegedly kited checks between accounts in her name and created false and fictitious balances. Bomia admitted making a large deposit toward the end of the month, which would be included in the general ledger but not sent to the corporate checking account until the middle of the next month. At the same time, another larger check would be drafted from Bomia's checking account at the credit union. The final deposit, totaling $85,000, was recorded in the general ledger July 29, 2011, but wasn't deposited into the corporate account. Bomia agreed to restitution of $85,000. Sentencing is set for Oct. 10 …

Small Biz Lending Index Some CUs hit MBL cap

 Permanent link
NEW YORK (7/11/12)--Small business lending is on the uptake at financial institutions, and credit unions continue to lead banks in business loans approved, according to the Biz2Credit Small Business Lending Index for June.

However, credit unions are hitting against their member business lending (MBL) cap, said the monthly analysis of 1,000 loan applications on Credit unions' approval rates of business loans was 55.8% during June, compared with big banks' 11.1% and small banks' 47.5%.

The June figures are slightly lower for credit unions and alternative lenders, and slightly higher for big banks and small banks than in May. In May, credit unions accounted for 57.6% approval rate, while small banks saw 45.5% and big banks saw 10.2%.

"Some credit unions have reported they had reached their yearly lending limit, which currently is 12.25%," said Biz2Credit's press release. "Sen. Mark Udall (D-Colo.) has introduced the Credit Union Small Business Jobs Bill (S. 2231) that would raise the credit union business lending cap to 27.5% of total assets," it continued. "By raising the cap, credit unions would be able to increase the number of small business loans."

The figures indicate that "small businesses remain much more likely to be approved at a credit union than at any other lender," said Mike Schenk, Credit Union National Association (CUNA) vice president of economics and statistics. He noted that "many small businesses continue to tell researchers that access to credit is problematic.  Many hundreds of credit unions are currently constrained in their lending by the existence of the artificial--and arbitrary--cap," he told News Now.

The June 2012 figures are higher than year-ago figures for all financial institutions and alternative lenders. In June 2011, credit unions led financial institutions' business lending, approving 52.3% of business loan applications while small banks approved 42.5% and big banks approved 8.9%. Alternative lenders approved 54.9%, compared with this June's 62.9%, which dropped from May's 63.2%.  The study noted that businesses turn to alternative lenders when banks stop lending. With a slight uptick in bank lending, the alternative lenders are seeing less business.

CUNA and credit unions are urging Congress to raise credit unions' MBL cap to 27.5% of  assets. Doing so would mean credit unions could invest $13 billion in new small-business loans to continue helping the economic recovery. Raising the cap would also generate about 140,000 new jobs the first year, without costing taxpayers a dime.

Biz2Credit analyzed loan requests ranging from $25,000 to $3 million from companies in business for more than two years with an average credit score above 680.

CUAid raises 25K for Colo. wildfire victims

 Permanent link
MADISON, Wis. (7/11/12)--Since activating its online disaster relief system on June 29, the National Credit Union Foundation (NCUF) has raised more than $25,000 to assist credit union people affected by wildfires in Colorado.

As donations are posted through, NCUF is coordinating with the Mountain West Credit Union Association (MWCUA) to distribute money efficiently to credit union employees and members in the affected areas.

"It's reported that the fire is 100% contained now, which is great news," said Scott Earl, MWCUA President/CEO. "However, there were more than 340 homes destroyed. Many families have been widely affected and will continue to need assistance and support for some time as they piece their community back together. The largest need right now for most organizations helping the evacuees and victims is financial."

The Waldo Canyon Fire has burned more than 18,247 acres since it started June 23, according to the El Paso County Sheriff's Office (Denver Post July 3). On July 5, the Colorado Department of Public Safety reported five active wildfires in the state.

Wildfires have also broken out in Utah, Wyoming and Montana.

Credit union supporters in every state can make donations through CUAid, a secure website that accepts credit cards and includes information on wire transfers and mail donations.

CUAid helps credit union employees, volunteers and members, as well as credit unions and state credit union foundations nationwide to contribute directly to support other involved in the credit union movement. All of the donations through CUAid go to credit union disaster relief.

CUAid was developed by NCUF in cooperation with state credit union foundations, state credit union leagues, and the Credit Union National Association's Disaster Preparedness Committee in 2006.

Four re-elected to NCCUL Board

 Permanent link
RALEIGH, N.C. (7/11/12)--The North Carolina Credit Union League (NCCUL) announced the re-election of four board members at its annual meeting June 12 in Pinehurst, N.C.

The NCCUL board is composed of eight directors who are elected by their local credit union chapters, plus three directors elected at-large.

  • Bob Donley, executive vice president of Members CU, Winston-Salem, N.C., was re-elected as an at-large director. Donley, who was appointed to the NCCUL board in 2010, will serve a three-year term. He has held his position at Members CU since 1995. In addition to serving on the NCCUL board, Donley has been a member of the board of Members CU since 1996.
  • Tony Ebron, the president/CEO of Winston-Salem (N.C.) FCU, was re-elected as the director representing the Northwest Chapter. The chapter held a special election in 2011, and selected Ebron to fill its vacated board spot. He will serve a full three-year term.
  • David Elliott, the president/CEO of Fort Bragg FCU, Fayetteville, N.C., was re-elected as the director representing the Southeast Chapter. He was appointed to the NCCUL board in 2008, and elected to a full term the following year. He will serve another three-year term. Elliott has more than 30 years of credit union experience, including 16 years as president of the Fort Bragg FCU.
  • Lori Thompson, the president/CEO of Premier FCU, Greensboro, N.C., was re-elected as the director representing the North Piedmont Chapter and will serve a three-year term. Thompson was first elected to the board in 2009. Thompson has more than 20 years of experience in the credit union movement. She began her credit union career as a loan officer with Premier. She was named executive vice president in 2002, and president of the credit union in 2010.