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Virginia CUs add a half-million members in 15 months

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LYNCHBURG, Va. (7/16/10)--Virginia’s credit unions are adding members at a record pace, while helping rebuild the state’s economy by sharply increasing their lending to members with small businesses, according to data from the National Credit Union Administration (NCUA), said the Virginia Credit Union League. Virginia's 191 credit unions added almost a half-million new members between December 2008 and March 2010, according to information from NCUA. Total membership for Virginia-based credit unions reached 6.7 million in March of this year; with an estimated 3.25 million of those members residing in the state. Many of Virginia’s credit unions--especially military and government-affiliated credit unions--have multi-state operations, so their fields-of-membership include residents of other states. Membership growth for Virginia's credit unions consistently outpaces the national average of 1% to 1.5%, said the league. For the year ended March 2010, credit unions in Virginia experienced membership growth of 6.4%; following growth rates of 4.8% for calendar year 2008 and 4.9% in calendar years 2007 and 2006. “Consumers are looking for a better deal for financial services, and they’re finding it at Virginia's credit unions,” said league President Rick Pillow. “Consumers are heeding the advice of the major media outlets and consumer advice columnists that have been urging consumers to move their money to credit unions to take advantage of free checking, lower fees, better rates and more personalized service.” Another area in which Virginia-based credit unions continue to grow is in lending to members with small businesses. As banks reined in business lending, Virginia’s credit unions posted double-digit growth rates for member business loans, including 31.9% growth for the year ended March 2010. Virginia's credit unions have $621 million in member business loans, more than triple the amount of member business loans they held at year-end 2006. NCUA data shows 43 of Virginia's credit unions offer member business loans, though others may enter this line of business if credit unions are successful in getting a U.S. Treasury Department-supported measure through Congress that would raise the current cap on member business lending. Since 1998, credit unions have faced a restriction that limits the total amount of member business loans they can hold to 12.25% of their total assets. Legislation in Congress would more than double this cap, allowing Virginia's credit unions to provide desperately needed credit to Virginia's small businesses, perhaps as much as $275 million in the first year. Increased member business loans from Virginia’s credit unions could also help small businesses add as many as 3,000 new jobs in the state in the first year following a cap increase, according to estimates from the Credit Union National Association. Conservative lending, strong management and a deep capital cushion have also helped Virginia's credit unions weather the worst effects of the financial meltdown and the ensuing recession. As of March 2010, Virginia's credit unions had an aggregate net worth of 9.4%, meaning they are on exceptionally strong financial footing. Regulators consider a credit union well-capitalized--the highest measure--at a 7% net worth ratio. Members are also finding their credit unions to be a savings haven, with savings balances at Virginia-based credit unions having increased 10% to more than $60 billion for the year ended March 2010, led by strong increases in money market account balances and Individual Retirement Accounts (IRAs). “Virginia's 191 credit unions are strong and well-positioned to serve their member-owners,” Pillow noted. “They entered this crisis with strong balance sheets, and have money to lend despite current economic conditions.”

Texas Dow Employees CU upgrades fraud security

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LAKE JACKSON, Texas (7/16/10)--Texas Dow Employees CU (TDECU) in Lake Jackson, Texas, Tuesday unveiled an upgraded fraud system called “managed real time.” The system operates with existing fraud technology and searches for suspicious spending behavior based on debit card use, Ron Wright, TDECU vice president of payment systems, told the Victoria (Texas) Advocate (July 14). The transaction gets blocked and a call is placed to the accountholder to verify a purchase if it gets flagged by the system, Wright told the newspaper. The transaction will go through once the member’s permission is granted. The new system operates in concert with existing security measures, which are akin to a putting up a set of transaction hurdles--monitoring and blocking charges that differ from typical activity regarding the amount spent, the type of merchant and geographic location, Wright added. The upgrade follows two weeks of unauthorized charges showing up on a handful of accounts of TDECU debit card holders, Luke Billeri, TDECU regional vice president of payment systems, told the paper. Since the additional security has been implemented by the credit union’s credit card department, no additional security issues have arisen, Ron Wright, TDECU vice president of payment systems, told the paper.

CU System briefs (07/15/2010)

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* COLORADO SPRINGS, Colo. (7/16/10)--Ent FCU, Colorado Springs, Colo., has surpassed 200,000 in membership. Ent has added more than 4,100 members in the past year, and 43,000 members since 2005. “I believe this membership milestone shows not only our employees’ dedication to member service, but also that the communities we serve continue to see us as a sound source of financial products, services and education,” said Randy Bernstein, Ent executive vice president and chief operating officer. Ent has $3 billion in assets ... * VANDALIA, Ohio (7/16/10)--A man was recently sentenced to 15 years and one month in prison for a December robbery at Abbey CU, Vandalia, Ohio. Chukwuemeka O. Eziolisa, 25, pleaded guilty in March to one count of armed credit union robbery and one count of brandishing a firearm during and in relation to a violent crime (States News Service June 18). The newspaper cited court documents that state Eziolisa entered the credit union on Dec. 19, brandished a handgun, and demanded money from an employee. He fled with cash, and police later recovered the firearm from his house. Eziolisa admitted committing other crimes, including attempted robbery of a credit union on Dec. 4 and a related abduction attempt. He had followed the manager of DayMet CU, Dayton, to her car and to a restaurant. While at the restaurant, Eziolisa pulled up next to her car, pointed a firearm at her and told her to get into his car so he could take her back to the credit union to rob it. The manager escaped the abduction attempt. He was arrested Dec. 29 ...

Coopera offers Reg E Spanish opt-in forms

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DES MOINES, Iowa (7/16/10)--Coopera Consulting, a strategic partner of the Credit Union National Association (CUNA), is offering a package of Spanish Reg E opt-in forms to help credit unions reach their Spanish-speaking members. Under Regulation E, credit union members must opt-in for overdraft protection by Aug. 15. Coopera’s package includes the English and Spanish version of the opt-in form, the English and Spanish version of a member letter about the opt-in update, and a member opt-in confirmation notice in English and Spanish. All Spanish versions of the documents have compliance-reviewed language that states that the English version prevails for legal purposes. All documents are provided in a customizable Word format. Regulation E states that credit unions must get their members’ consent before enrolling them into overdraft protection services. “This turnkey solution will help credit unions reach out to their Spanish-speaking members to ensure they understand this change,” said Warren Morrow, CEO of Coopera Consulting. “It will save them money versus having to translate these forms and obtaining a legal review themselves.” For more information, use the link.

Filene New payment mix about market share

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MADISON, Wis. (7/16/10)--The new payment mix, or the different ways consumers choose to pay for goods, is more about market share than about which payment dominates or will dominate, according to the Filene Research Institute. Credit unions need to recognize that a complex mix of payments--from debit cards to credit cards, each attuned to the context and convenience of the purchase--is here to stay, Filene said. Debit cards have been used by more than half of U.S. households for barely a decade, and there is no evidence that a peak in debit use is imminent--although changes to interchange rules could affect those trends, Filene said. Filene also noted:
* Intensive credit card users have higher incomes and higher debt levels than those with neither card and those with only debit cards. Intensive users also have higher household net worth and a higher net worth to income ratio; * Intensive debit card users are generally younger. Debit-only users decrease by age, from 29% of 18- to 29-year-olds to just 7% of those over 70. Conversely, credit-only users increase by age, from 29% of 18- to 29-year-olds to 49% of those over 70; and * The fraction of households using electronic billing has grown much faster than those for earlier technological innovations.

Kaczynski May received distinguished service award

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LAS VEGAS (7/16/10)--Lech Kaczyñski, the recently deceased president of Poland who was central in helping establish the country’s credit union movement, and Harriet May, the newly named chair of Credit Union National Association (CUNA), were among honorees of the World Council of Credit Unions’ (WOCCU) Distinguished Service Award (DSA). Credit Union Executive Society (CUES), a Madison, Wis.-based professional development organization for credit union executives, also received the award, which is WOCCU’s highest honor. The awards were presented during The 1 Credit Union Conference this week in Las Vegas, which was jointly sponsored by CUNA and WOCCU. Kaczyñski’s relationship with credit unions began in 1989 when he was a direct report to Lech Walesa, the former leader of Poland’s Solidarity movement that helped secure the country’s freedom from Soviet rule. In 1991, WOCCU officials met with members of Solidarity, including Walesa and Kaczyñski, the Ministry of Finance and the Catholic Church to examine the role that credit unions could play in helping Poland’s financial services development. He served as supervisory board president of the Foundation for Polish Cooperative Savings and Credit Unions created by WOCCU at the request of the Solidarity movement. May is president/CEO of GECU of El Paso, Texas. In the 1990s, she helped WOCCU develop and launch IRnet, an international remittance program that helps U.S. workers send money through a network of credit unions. She also initiated the Texas Credit Union League’s formal Texas/Mexico CU Relationship Committee in 1999. CUES, the 2010 institutional honoree, has supported WOCCU’s development and relief initiatives for two decades. In 1990 it pledged $10,000 to support credit union development in Eastern Europe, became an inaugural WOCCU Supporter in 2000 and continues to support WOCCU’s goals and objectives on an annual basis. In 2005, CUES donated $100,000 to help rebuild credit unions in Sri Lanka that were devastated by the tsunami. It also donated $15,000 to WOCCU’s Haiti Relief Efforts. Other awards presented include Credit Union Magazine’s Hero of the Year Award, which was presented to Vic Thate, executive vice president of FAA CU, Oklahoma City, Okla. Thate earned the nickname of “godfather” of Oklahoma’s Credit Unions for Kids program. WOCCU also presented three Ambassador Awards, which given for outstanding service either to the global trade association or the global credit union movement. Recipients included Mark Sievewright, senior vice president of Fiserv; Sue Albrecht, vice president of CUNA Mutual Group; and Sue Mitchell, CEO of Mitchell, Stankovic & Associates. Also honored were 57 participants from 15 countries in the WOCCU Young Credit Union People (WYCUP) program. Of the honorees, the five received scholarships: Scott Daukas, Carol Karugu, Melia Keller, Orla O’Shea, and Christie-Anne Scott. Each recipient will receive an all-expenses-paid trip to attend the WYCUP 2011 program and WOCCU’s World Credit Union Conference in Glasgow, Scotland, next July. In a special presentation, WOCCU also recognized the following donors to WOCCU’s Haiti Relief Fund: the Caribbean Confederation of Credit Unions; CUNA; CUNA Mutual Group; the Irish League of Credit Unions Foundation; Melrose CU, Briarwood, N.Y.; Municipal CU, New York City; the National Credit Union Foundation (NCUF); and Schools First FCU, Santa Ana, Calif. Members of NCUF’s Development Educator program who had earned their International Credit Union Development Educator designation were also recognized during the ceremony. Recipients included: Carlos Calderone, Jaime Chase, Mike Delker, Ken Halkett, Nancy Johns, Bill Myers, Michael Ray, Helen Godfrey Smith, Joe Thomas, Joanne Todd, Donald Urquhart, Linda Webb-Manon and Debbie Wege.