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Adhering to core values makes good organizations greatCollins

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LAS VEGAS (7/13/10)--Adhering to unshakeable core values is the only thing that keeps even great companies remaining great, author Jim Collins told attendees at The 1 Credit Union in Las Vegas Monday.
Jim Collins, author of Good to Great and other books, told credit unions at The One Credit Union Conference in Las Vegas Monday that great leaders of great organizations show certain traits, including having humility not arrogance, and they are driven and passionate about a cause that matters, rather than themselves or the business's bottom line. (Photo provided by the World Council of Credit Unions)
Monday’s general session keynoter at the joint conference of the Credit Union National Association (CUNA) and the World Council of Credit Unions is the author of Good to Great and other books. Collins carried on the theme of credit unions’ advantage by pointing to the fact that great companies remain great only when they adhere to unshakeable core principles. Thanks to their member-focus philosophy, credit unions have a natural advantage over many for-profit companies, but they can’t afford to think that their philosophy will make them successful in the absence of excellent management. Faith in the facts characterizes the climb to success, and failure to deal with the facts breeds a fall, he said. “Credit unions face brutal facts. They are smaller than large financial institutions which can deal with the increasing burden of regulation and take opportunities,” he added. For credit unions, a “brutal fact is that the average age of members is going up. I challenge you to confront that fact. Ask how are we going to get this next generation a part of the movement? They distrust institutions, and they require different mechanisms…but it must be done, he said. “There is one towering, giant truth,” Collins observed. “Credit unions can be trusted and they are run well. Who on earth could promise a better deal to members? But it will be up to us to communicate to the next generation if we want to survive.” Collins also outlined his five stages of decline that affect many companies and the role that leadership plays in facilitating that decline. Leaders who succeed are those passionately committed to success, but that commitment must focus on the organization and its ideals. Leaders who focus on success for their own gains quickly lose ground, he explained. The credit union philosophy helps mitigate that self interest, but requires even higher levels of commitment in order to achieve its goals. “What we stand for should never change, but how we do things should always be open to change,” Collins said. “When credit unions first came into existence, it was the realization of a BHAG--a big hairy ostentatious goal. Now, what is the credit union movement’s next BHAG?”

CU leaders note unity in One WorldOne Event

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LAS VEGAS (7/12/10)—The theme was One World/One Event, and credit union leaders who opened The 1 Credit Union Conference’s general session Monday morning in Las Vegas marked the efforts of credit unions and the unity of the credit union movement worldwide.
Credit Union National Association (CUNA), William "Bill" Cheney told attendees at the CUNA and World Council of Credit Unions (WOCCU) The 1 Credit Union Conference, that credit unions made 700,000 contacts with Congress with 1,000 persons visiting the Hill on the interchange provision in the federal regulatory reform bill. "Those are strong numbers... but we can improve on that by engaging credit union members in credit union issues that matter to them."
“Bear in mind we are a global movement,” said new Credit Union National Association (CUNA) President/CEO William “Bill” Cheney at the historic joint conference of CUNA and the World Council of Credit Unions (WOCCU). “The U.S .credit union movement is just one part, but an important one. Through our WOCCU membership, CUNA will continue a robust, important role in the world movement,” he added. The conference theme “rightly conveys the unity of the credit union movement, worldwide. In fact, CUNA and the U.S. credit union movement stand in unison with the world-wide movement’s vision--as articulated in WOCCU’s vision statement: ‘to improve people’s lives through credit unions,’” Cheney said. Earlier, Dan Mica, CUNA’s outgoing president/CEO, passed the reins to successor Cheney, who promised to pursue U.S. credit unions’ regulatory challenges with renewed vigor. “Isn’t it great to be part of the world credit union movement?” asked Mica in a now-familiar greeting, passing an oversize “key to CUNA” to Cheney. In recognition of Mica’s 14 years of service at the helm of CUNA, the National Credit Union Roundtable’s Bill Raker, president/CEO of U.S. FCU in Burnsville, Minn., read a proclamation lauding Mica’s contributions. He also presented CUNA’s former CEO with an oversize check representing a $222,650 contribution on Mica’s behalf to Credit Union House in Washington, D.C. The donation was made up of contributions from the 100 largest U.S. credit unions that make up the CU Roundtable. Cheney spoke to the challenges still facing U.S. credit unions, including the recently passed interchange regulations, member business loan restrictions, and the need for capital reform and alternative sources of capital for credit unions. He acknowledged the hard work done by credit unions to date, but stressed the need for increased grassroots efforts in terms of both lobbying and education to oppose current and future legislation that could harm credit unions’ abilities to serve members. “We’ve seen very little growth in market share during the past 20 years,” Cheney said. “To remedy that, capital reform will have to be one of our top priorities. We have to be able to define our own future.”
World Council of Credit Unions (WOCCU) President/CEO Pete Crear welcomed "2,800 of my close friends" to the conference, noting that in 97 countries, 49,000 CUs served 184 million people worldwidein 2009. Credit unions have aggregated savings totaling US$1.1 trillion, their loans increased by $65 billion over 2008, and they are "helping a lot of members in a lot of places." (Photos provided by the World Council of Credit Unions).
The theme was carried through by Crear, who talked about the “one credit union movement” that WOCCU serves, illustrating the great need credit unions fill in many of the countries in which WOCCU operates. “It’s a movement that crosses boundaries and borders, has no language barriers and operates in as many different ways as there are members to serve,” Crear said. “The one movement is something of which you all are part.” Crear’s tour through Mexico, Kenya and Afghanistan culminated in a seven-minute video that looked in greater depth at WOCCU’s program in Haiti. “Our efforts in Haiti demonstrate clearly the need for strength, for unity, for hope and for commitment to the credit union ideal,” Crear added. “As long as we continue working together toward this goal, we will be the single best answer to the financial needs of all our members.” Nearly 2,800 participants from 60 countries are gathered at the conference, which ends Wednesday.

News Now Get live updates from conference

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LAS VEGAS (7/13/10)--Couldn't get to The 1 Credit Union Conference now in progress in Las Vegas? Credit Union National Association's (CUNA) and the World Council of Credit Unions' (WOCCU) joint conference will get full coverage in News Now and other sources. News Now is covering the event daily and also will provide live updates throughout the conference on "Live at The 1" in real time. Readers can also follow events via News Now's Twitter account, LiveWire. CUNA*verse--CUNA's official blog site--will blog from the event also. CUNA's Credit Union Magazine will produce the conference daily on its website, And WOCCU's website, the official conference website, will feature daily stories on its website. The conference will end Wednesday.

Editorial Let CUs help fill lending void with more MBLs

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DALLAS (7/13/10)--Congress should “give credit unions broader authority to make the small-business loans that banks aren’t making,” according to a Saturday editorial in the Dallas Morning News, which noted it would be a way to increase capital to small businesses at no cost to taxpayers. The editorial mentioned that bankers predictably are against credit unions’ goal to have Congress raise the small-business lending cap to 27.5% of assets from the current 12.25% limit. U.S. Sen. Mark Udall (D-Colo.) has drafted an amendment that could be added to a pending small-business lending bill that would raise the cap to that level. (SEE RELATED STORY, “MBL amendment could be offered for possible Senate jobs bill today.”) “The higher cap would free the institutions to generate $10 billion in new loans in the first year and add more than 100,000 jobs nationally,” the editorial said. “And, best of all, taxpayers would not be on the hook for any of this.” Credit unions are not a threat to banks, despite bankers’ claims, the editorial said. “Even if most credit unions reached the [27.5%] cap, banks would still have more than 90% of the small-business market. “If bankers aren’t willing to be a bigger part of the solution, Congress must allow credit unions to fill the void,” the News concluded.

Federation program helps 40 CUs with CDFI certifications

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NEW YORK (7/13/10)--The National Federation of Community Development Credit Unions’ CU Breakthrough consulting service announced that in less than six weeks, between March 15 and April 30, it assisted nearly 40 credit unions with certification applications to the U.S. Department of the Treasury’s Community Development Financial Institutions (CDFI) Fund. The record demand for certification came from credit unions looking to tap into Treasury’s new Community Development Capital Initiative (CDCI), which makes low-interest, long-term secondary capital available to CDFI-certified community development credit unions (CDCUs). The federation met the increased demand by developing a methodology based on random sampling, which allowed it to determine target market eligibility much more accurately and efficiently than ever before. Only seven months into the current year, this is already the largest number of credit union CDFI certification applications ever submitted to the CDFI Fund in any given year, the federation said. If all credit union applications are approved, the total number of CDFI-certified credit unions will increase by 25%, the federation added. The most recent announcement from the CDFI Fund listed seven new CDFI-certified CDCUs:
* Cooperative Center FCU, Berkeley, Calif.; * CoVantage CU, Antigo, Wis.; * Foss Avenue Baptist Church FCU, Flint, Mich.; * Liberty County Teachers FCU, Liberty, Texas; * Northland Area FCU, Oscada, Mich.; * Potlatch No. 1 FCU, Lewiston, Idaho; and * SunTide FCU, Corpus Christi, Texas.
Six credit unions also were certified in May:
* Birmingham (Ala.) Financial FCU; * Credit Union of Atlanta; * Fidelis FCU, New York; * Old West FCU, Portland, Ore.; * Pacific Crest FCU, Klamath Falls, Ore.; and * UNO FCU, New Orleans.
The new certifications bring the total number of CDFI-certified credit unions to an all-time high of 186, and all but two of the 11 newly certified CDCUs are members of the federation, and took advantage of its CU Breakthrough consulting service to apply for certification. “We now have a system that allows us to prepare CDFI certification applications much more rapidly, and with a nearly 100% success rate,” said Pablo DeFilippi, director of membership services at the federation. “With this new technique, we were able to assist a large number of credit unions that otherwise would not have been able to meet Treasury's April 30 deadline to qualify for the CDCI program.” Last week, the CDFI Fund announced that CDFIs whose certification had expired and had been automatically extended, would be required to submit recertification applications by July 30 for CDFIs that applied to the CDCI program, and by Aug. 30 for all others. To help CDCUs with the recertification process, the federation is offering fee-based technical assistance to all credit unions through its CU Breakthrough consulting service, and limited free telephone consultations to member CDCUs. The federation also helped many credit unions apply for low-income designation, another prerequisite for participation in the CDCI program. “Many credit unions don't realize they qualify for low-income designation,” said DeFilippi. “But having the designation gives them the power to accept secondary capital and it also lifts the 12.25% member business lending cap. The designation provides credit unions serving some of our nation's poorest communities with the tools to grow more rapidly, while providing affordable financing to communities in serious need of investment.” “The federation is committed to helping credit unions of all sizes realize their potential in serving the underserved,” DeFilippi added. “The CDFI Fund is the single largest source of capital for CDFIs in the U.S., having awarded more than $80 million to CDCUs since 1995. We are proud to report that 98% of those awards went to federation-member CDCUs.” “With a projected budget of $250 million for 2011, plus the new Community Development Capital Initiative, which could provide another $200 million in secondary capital investments to CDFI-certified credit unions, there has never been a better time for credit unions to take advantage of this opportunity,” he continued. “It doesn't matter whether you’ve never thought of yourself as a CDCU,” DeFilippi added. “If your field of membership encompasses significant pockets of low- and moderate-income people, then you too can do more to serve them ... and the federation’s CU Breakthrough is here to show you how.” For more information, use the link.

CU System briefs (07/12/2010)

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* SAN RAFAEL, Calif. (7/13/10)--Marin County FCU (MCFCU), San Rafael, Calif., has launched a “Good Plastic” campaign in which 1% of the credit union’s Visa credit card net income will be donated to three local nonprofit organizations. The three beneficiaries are Marin Community Food Bank, Marin Advocates for Children and the Marin Humane Society. “We’ve guaranteed each organization a minimum of $1,000, and we hope it will be even more,” said Elesja Ingwersen, MCFCU president/CEO. MCFCU has $48 million in assets ... * VERNON, Conn. (7/13/10)--It only took a jury an hour to convict a man accused of robbing Workers FCU, Stafford, Conn., according to The Hartford Courant (July 10). Kendall O. “Mad Max” Smith Sr. was convicted of first-degree robbery and conspiracy for a Jan. 23, 2008, robbery of the credit union. Smith and Antwan Byrd, 34, crashed into a utility pole after a police chase, and then ran from the vehicle. Smith escaped police, but Byrd was caught after trying to jump a fence. He had been carrying $128,000 in a duffle bag. Smith was arrested this year. Workers FCU as $24 million in assets ...

N.H. league working to resolve BET tax issue

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CONCORD, N.H. (7/13/10)--The New Hampshire Department of Revenue Administration (DRA) has notified several credit unions in the state that they may owe back business enterprise taxes (BET) on dividends they pay to members. The New Hampshire Credit Union League disagrees and is working with legal counsel to resolve the issue. Credit unions were never meant to be subject to such a tax on member dividends, according to Rob Kimmet, senior vice president of marketing and public relations at the Massachusetts and New Hampshire leagues and the Credit Union Association of Rhode Island. “The league disagrees with DRA’s decision to attempt to begin collecting BET taxes on member dividends from credit unions now,” Kimmet said. The department sent credit unions a letter last month noting that although credit unions describe such payments as dividends, the payments are interest and are subject to BET taxes.

Wash. league elects new secretary

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FEDERAL WAY, Wash. (7/13/10)--Mina Worthington, president/CEO of Yakima (Wash.) Valley CU, was elected to fill the Washington Credit Union League’s board of director’s secretary position, the league said. Phil Jones, Harborstone CU president/CEO, was elected interim director on the board’s District 5 position following the retirement of TAPCO CU President/CEO John Bechtolt. Harborstone and TAPCO are based in Tacoma, Wash. Worthington, representing District 7 since 2007, will be secretary until the league’s reorganization meeting in September. Jones will fill the remainder of Bechtolt’s term, which expires in 2013.