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CU System briefs (07/09/2012)

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  • MADISON, Wis. (7/10/12)--UW CU has established a $25,000 scholarship endowment fund at Madison College, the credit union announced Monday. The funds will be allocated as needs-based scholarships annually to one full-time student at the college. "Wisconsin residents have reason to be proud of our excellent universities and colleges, but there is an urgent need to make sure talented young people are not excluded simply because they can't afford to attend," said Jaimes Johnson, director of community and campus relations for the credit union.  In the past, UW CU has funded annual scholarships for students attending Madison College such as the college's 2010 "Win a Career" scholarship program. Madison College provides "real world smart" education with technical, liberal arts and sciences, adult basic education and continuing education, as well as customized training for employers …
  • ROCKVILLE, Md. (7/10/12)--The National Institutes of Health FCU, based in Rockville, Md., has launched a new education refinancing program for nurses, physical therapists, hygienists and other healthcare professionals and specialists throughout Maryland; Virginia; Washington, D.C.; and West Virginia. The CareerBuilder Education Refinancing Program offers members low variable and fixed rate options and extended loan terms to reduce monthly payments on their student loan debt. The loan also features no pre-payment penalties and discounts for direct deposit and auto pay. With more than $562 million in assets, NIHFCU is one of the largest credit unions in the Washington, D.C. metropolitan area and the nation's largest serving the biomedical industries, it said in press release …

Texas Trust CU forms council to teach teens fin ed

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MANSFIELD, Texas (7/10/12)--Texas Trust CU in Mansfield, Texas, has formed a youth council to help educate the younger generation about avoiding too much reliance on credit and a heavy debt.

The $671 million-asset Texas Trust's Youth Advisory Council aims to train high school students how to handle money and take personal financial responsibility. Twenty students will be selected to join the council, based on an application process (LoneStar Leaguer July 9).

Today's youth are technology literate, yet fall short on financial issues.

"The recession has been a financial eye-opener for a lot of consumers," Amber Danford, vice president of marketing for Texas Trust, told the Texas Credit Union League. "Many were unprepared for the downturn, resulting in a large number of personal financial crises."

Financial literacy is the key goal of the council, although members will also receive training in service leadership, marketing, public speaking and presentation development. Council members will also participate in a community service project and volunteer at community events that Texas Trust sponsors.

There will be two councils for the 2012-2013 school year. The first session runs from August through December. The second council will be from January through May. Area high school students enrolled in public, private, charter or home schools are eligible.

The credit union is accepting applications for the first council session through July 21.

Magill to IWash. PostI Participations dont affect need to raise MBL cap

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WASHINGTON  (7/10/12)--A proposal by the world's largest credit union to purchase business participation loans from smaller credit unions nearing their member business lending (MBL) limit does not mean there is less need for Congress to raise the MBL cap, the Credit Union National Association (CUNA)  told the Washington Post Monday.

Loan participations in no way "obviates the need for Congress to raise the cap," said John Magill, CUNA executive vice president of governmental affairs.  CUNA and credit unions are urging Congress to increase the MBL cap to 27.5% of assets from 12.25%. Doing so would help inject $13 billion in new small business loans into the economy and help create 140,000 new jobs, said CUNA.

Vienna, Va.-based Navy FCU, which has $49 billion in assets, unveiled its commercial loan participation program, C-Pal, in which it would purchase a portion--from 50% to 90%--of another credit union's business loan. The other credit union would service the loan, said the Post. As of first quarter, Navy Federal held 1,061 business loans with a total value of $179 million--or less than 1% of its total assets, said the article.

CUNA's Magill noted that "even if a credit union the size of Navy Federal bought up enough credit union business loans to take it to its own cap, that would only be about a year or two years' worth of small-business loan growth."

National Credit Union Administration Chairman Debbie Matz told the publication that underwriting standards for loan participations must meet or exceed the standards that purchasing credit unions use in originating their own loans, but loan participations can be a valuable tool for credit unions seeking to diversify their portfolios.

CUNA Mutual deposits 1.25M for community investment

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MADISON, Wis. (7/10/12)--CUNA Mutual Group has provided three community development credit unions (CDCUs) in California an interest-free, $1.25 million deposit to stimulate development in their underserved areas.

The three credit unions participating are Northeast Community FCU, San Francisco; Faith Based FCU, Oceanside, Calif.; and the California operations of Self-Help FCU, an affiliate of Self-Help CU, Durham, N.C.

The zero-interest deposits to credit unions from CUNA Mutual are part of the California Department of Insurance's California Organized Investment Network (COIN). Since 1997, the COIN program has spurred insurer investment in underserved and rural communities statewide by providing modest tax benefits and fair returns to investors.

The three CDCUs each received one or two deposits of $250,000 and have discretion on where to spend the investments in their areas to encourage community development. In return, CUNA Mutual and other investors in the program receive tax credits.

"This pilot program for CUNA Mutual Group is a win for everyone involved," said Cami Douglas, vice president, corporate tax, CUNA Mutual. "It helps us live out our mission of helping credit unions and their members, and gives credit unions the opportunity to provide loans or other support to small businesses and non-profits in economically disadvantaged communities."

California's insurance commissioner, Dave Jones, called out several insurers and financial institutions for their participation in the COIN program, in a press release.

"Today, we thank UnitedHealthCare, Blue Shield of California, CUNA Mutual Group and CSE for stepping up to the plate and making major community development investments," Jones said.

The COIN program allocates $2 million annually in tax credits to support $10 million in community development investments. Under the COIN tax credit program, investors invest a minimum of $50,000 as equity or a zero-interest loan with a Community Development Financial Institution (CDFI) for 60 months. In exchange, the investor receives a state tax credit.

The CDFIs use the funds to provide loans or other support to small businesses and non-profits that serve economically disadvantaged communities. After 60 months, the loans are repaid.

St. Helens Wauna sign merger intent

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ST. HELENS, Ore. (7/10/12)--Two Oregon credit unions--Wauna CU and St. Helens (Ore.) Community FCU--have announced plans to begin merger discussions.

The boards of directors for both credit unions have signed a nonbinding letter of intent "to explore the benefits associated with merging" the two entities, according to a statement released by the two credit unions.

"Officials from both organizations are committed to do what is right for their membership and the communities they serve," said Robert Blumberg, president/CEO of Wauna CU, based in Clatskanie, Ore., with $143 million in assets. "Key factors to these discussions include the impact that the economy and competition has for credit unions of our asset size, plus both credit unions share a common heritage and serve local communities."

St. Helens FCU has $166 million in assets, according to the Northwest Credit Union Association (Anthem July 9).

A merger would produce greater efficiencies and support needed technology advancements, Blumberg said.

Minn. CUs recovering faster than states banks

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ST. PAUL, Minn. (7/10/12)--Minnesota's 130 credit unions are recovering from 2008's financial collapse much faster than the state's banks.

About 78% of Minnesota's credit unions won Bauer Financial recommendations in the first quarter, bettering the national average of 73.7%, and an improvement from 64% in the first quarter of 2012, according to Finance and Commerce (July 9).

Minnesota credit unions also posted the third-fastest rate of improvement among all the states.

About 56% of Minnesota banks were recommended by Bauer this year, an improvement from 50% last year. Nationally, 65.6% of banks were recommended by Bauer.

Faster recoveries coming out recessions are typical for credit unions, Ben Rogers, chief researcher with the Filene Research Institute, told Finance and Commerce.

Minnesota credit unions were assisted by a boost in consumer confidence, which helped improve auto and home lending, Dan Stoltz, president of Spire FCU, Roseville, Minn., told the publication.

Credit unions also improved their operational efficiency, Stoltz said.

Miracle Jeans Day materials are ready

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WASHINGTON (7/10/12)--Support materials are available for Miracle Jeans Day--designated as Sept. 12--when credit union employees nationwide will wear jeans to work in exchange for a $5 donation to their local Children's Miracle Network Hospital.

Miracle Jeans Day is a national campaign for Credit Unions for Kids.

Among the materials available are:

  • Miracle Jeans Day marketing packet;
  • League marketing calendar;
  • Newsletter articles;
  • Sample chapter president e-mail; and
  • Suggested tweets.
Credit union league employees also can participate in the campaign. Georgia Credit Union Affiliates, Montana Credit Union Network and Mountain West Credit Union Association have registered their staff to participate.

Credit unions and their leagues have come up with their own ideas to promote the event. The Northwest Credit Union Association is holding a Miracle Jeans Day at its annual meeting. Last year, the League of Southeastern Credit Unions encouraged employee participation by creating a competition among departments. Miracle Hat Day and Miracle Jersey Day have both been successful at credit unions where employees already wear jeans to work.

Credit Unions for Kids, a nonprofit collaboration of credit unions, chapters, leagues/associations and business partners nationwide, raises funds for 170 Children's Miracle Network Hospitals. Credit unions are the third-largest sponsor of the hospitals, and 100% of every dollar donated goes to support research and training, purchase equipment or pay for uncompensated care for children.