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Excellence in Lending Award nominations due Aug. 8

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MADISON, Wis. (8/1/08)--The deadline for Excellence in Lending Award nominations is Aug. 8. The ninth annual awards, which recognize outstanding lending results and practices by credit unions, will be presented Nov. 3 at the CUNA Lending Council Annual Conference. The Excellence in Lending Award identifies and shares examples of lending excellence within the credit union movement by recognizing individual credit unions for their ability to serve members while sustaining sound financial performance. Credit unions demonstrating an ability to meet their members’ needs through innovation are excellent award candidates, say the sponsors, CUNA Mutual Group and the CUNA Lending Council. The two groups established the Excellence in Lending Awards in 2000. Nominations can be made for the 2008 award in these categories:
* Consumer Lending Excellence Award--assets under $250 million and assets greater than $250 million; * Mortgage Lending Excellence Award--assets under $250 million and assets greater than $250 million; * Low/Modest Means Excellence Award--any asset level; and * Business Lending Excellence Award--any asset level.
The CUNA Lending Council annual conference is Nov. 2-5 in Orlando, Fla. Airfare, hotel and conference registration for one representative of each winning credit union is included with the award. For more information on the awards or applying for an award, use the resource link.

Judge Maine lawyers to lead Hannaford breach lawsuit

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PORTLAND, Maine (8/1/08)--A U.S. District Court judge has appointed two Maine lawyers to lead the class-action lawsuit against Maine-based grocery chain owner Hannaford Bros. in one of the largest data-breach cases in U.S. history. The data breach exposed more than four million credit and debit card numbers from customers of nearly 300 grocery outlets in New England, New York, and Florida. Hundreds experienced fraudulent transactions on their accounts. The breach caused many credit unions to reissue cards to members whose information was compromised (News Now March 24). Judge D. Brock Hornby said Peter Murray of the Portland law firm Murray, Plumb & Murray, and Lewis Saul, with offices in Portland and New York City, would lead the case, at least for the early stages of what could be a long legal process (Kennebec Journal Morning Sentinel July 31). In his order, Hornby said that involving fewer firms and having centralization in Maine "should not only be sufficient, but should help avoid unnecessary legal fees and administration." He acknowledged that a different or larger leadership structure in the case may be appropriate later "if and when a class is certified and full discovery on the merits ensues." It would be premature to make that decision now, he said. Two groups of lawyers were competing to become lead lawyers in the case. The other group includes class-action lawyers from Boston, Chicago, Miami and Philadelphia. Roughly 24 lawsuits were filed against Hannaford and its parent company, Delhaize America Inc., before the cases were ordered consolidated. Murray and Lewis will consolidate the cases into one central complaint, which must be filed by Sept. 12, said the Morning Sentinel. Hornby has not yet certified the case as a class action. If he does so, he will then decide whether Murray and Saul will continue as lead counsel or whether other lawyers will take up that role. The data breach occurred between early December 2007 and the end of February 2008 as shoppers swiped their cards for authorization of the funds. The data breach is different than others because Hannaford says it had industry standards to prevent data breaches were in place.

Arizona CU execs offer lending lessons in Antigua

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ST. JOHN'S, Antigua (8/1/08)--Four Arizona credit union executives were in Antigua last week to share their lending knowledge and other industry information with the Caribbean island's financial cooperative community.
Robin Romano, right, CEO of Marisol FCU, Phoenix, leads a training session on loan underwriting for lending staff of Community First Cooperative CU, Antigua. (Photo provided by the World Council of Credit Unions)
The visit was part of World Council of Credit Unions' (WOCCU) International Partnerships program. The Antigua & Barbuda Cooperative Credit Union League and the Arizona Credit Union System (ACUS) signed a partnership agreement in March under the WOCCU program. The relationship is one of 28 international partnerships operating as part of the program. Melanie Smith, assistant vice president of branch support for Arizona State CU, Phoenix, and Lisa Krogstad, learning development specialist for First CU, Chandler, offered member service training to the staff of all five credit unions in St. John's, Antigua's capital. Robin Romano, CEO of Marisol FCU, Phoenix, and an ACUS board member, provided training in loan underwriting to help credit union staff and credit committee volunteers better understand how to calculate debt ratio, use gross income standards and implement standardized loan policies. “Debt ratio management and assessing risk were two of the most important aspects of loan underwriting we covered during our training,“ Romano said. “The credit unions' loan portfolios would become more efficient if they were to implement a debt ratio and check the member's credit history by calling and verifying it with other financial institutions. "Currently, most credit unions in Antigua require the member to have 25% of the loan amount saved before granting the loan, ultimately limiting their loans. Using good underwriting skills allows them to be less afraid to make more loans," Romano said. During the visit, Mary Lee Blommel, ACUS member service consultant, and Josh Fetting, WOCCU's International Partnerships program specialist, facilitated the Antigua & Barbuda League's strategic planning session. League and credit union board members and credit union managers developed goals that would allow Antigua's credit union movement to grow through league involvement. By the end of the planning session, participants had crafted new mission and vision statements for the Antigua & Barbuda League, identified key areas of assistance and recognized possible league projects to provide assistance to its member credit unions. "I am optimistic about the future of the league after having completed our strategic planning sessions with the presence and input of the ACUS and WOCCU," said Ellis Southwell, president of the Antigua & Barbuda League. “We now have clear goals to take the Antigua & Barbuda Cooperative Credit Union League forward."

Missouri CUs offer incentives for staff to go green

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JEFFERSON CITY and ST. LOUIS, Mo. (8/1/08)--Some Missouri credit unions are offering incentives for employees to make more eco-friendly decisions, according to the Missouri Credit Union Association. Staff at Conservation Employees CU, Jefferson City, have accepted a challenge to conserve and “gain some green.” The $57 million asset
Bernetta Smith, a marketing specialist at Vantage CU, St. Louis, uses a gas card given to her by the credit union to fill up her car. (Photo provided by the Missouri Credit Union Association)
credit union offers employees incentives for walking or riding a bike to work, car pooling, and not driving to lunch each day. Employees can earn $25 or $50 incentives for making these conservation efforts at least 15 days a month (Courier Net July 30). The challenge began July 1, and it is estimated that about 80% of the staff will qualify for the full incentive, said Louie Delk, Conservation president. “Employees are saving money at the pump, spending less eating out and earning an incentive,” Delk said. “In these challenging economic times, it is hard to beat that combination.” Vantage CU, St. Louis, a $99 million asset credit union, also is helping employees cope with high gas prices. Through a summer incentive program, all full-time and part-time employees received a Quik Trip gas card in June and July, and can expect one in August. “We’re seeing employees change their behavior in response to the rising gas prices, said Hubert Hoosman, Vantage CEO. “We hope the gas cards will help ease some of the burden they are facing at the pump.”

Montanas first shared branch announced by CO-OP

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GREAT FALLS, Mont. (8/1/08)--1st Liberty CU, Great Falls, Mont., is the first credit union in the state to join CO-OP Shared Branching. “With members in all 50 states, we need to have extensive reach,” said Steve Grooms, 1st Liberty president/CEO. “We want to give members as many ways to reach us as possible.” 1st Liberty will open two of its branches to guest members of more than 1,500 participating credit unions while expanding access for its members who work, live or travel outside of the credit union’s proprietary branch network. The $119 million-asset credit union has 10 branches--eight in Montana and two in North Dakota. Two are on Air Force bases. 1st Liberty also uses the CO-OP Network, which offers its members access to more than 25,000 surcharge-free ATMs nationwide.

Magazine in Ohio profiles Shared Branching

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COLUMBUS, Ohio (8/1/08)--The August issue of Columbus CEO magazine profiled Shared Branching, noting its modest start-up costs, cooperative spirit and status as the third largest branch network in the nation, according to the Ohio Credit Union League. The three-page feature profiled Shared Branching’s conveniences for members, including access to more than 200 locations in Ohio and 3,000 nationally. The article also noted that Shared Branching can help members who are relocating or going away to college (eLumination Newsletter July 30). The article also featured Ohio credit union leaders from:
* BMI FCU, Dublin; * CME FCU, Columbus; * Credit Union of Ohio, Hilliard; * Members First CU, Columbus; * MidState Educators CU, Columbus; and * Western CU, Columbus.

CU connects Biz Kid fudgemaker with Texas chef

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SAN ANTONIO (8/1/08)--Security Service FCU arranged for aspiring chef Eddie Lopez, 12, to meet chef Jason Dady, owner of new San Antonio restaurant Tre Trattoria, after Lopez won the Biz Kid$ Search, a contest sponsored by the credit union and Texas public television station KLRN.
Aspiring chef and winner of Biz Kid$ Search Eddie Lopez, left, learns how to make pasta from San Antonio chef and restaurant owner Jason Dady at Dady’s new restaurant, Tre Trattoria. (Photo provided by Security Service FCU)
Lopez is a Del Rio, Texas, seventh-grader who makes and sells fudge and other chocolate confections in his business--Eddie’s OH’ Fudge. Lopez’s goal is to become a chef and open his own restaurant. Lopez uses his aunt’s family recipe to create Eddie’s OH’ Fudge, which he sells in Del Rio, according to the KLRN website. He found that reading recipes, learning measurements and managing money has helped him with his schoolwork and in trying to overcome his dyslexia. The money he earns goes into a fund for culinary arts school. He also won $100 from the Biz Kid$ Search. Lopez was one of five finalists in the contest. In addition to Tre Trattoria, Dady is chef and owner of two other San Antonio restaurants--The Lodge at Castle Hills and Bin 555. Select Service FCU is an $4.376 billion asset, San Antonio-based credit union. Biz Kid$ is a TV series exclusively underwritten by America's Credit Unions to teach kids about money, with support from the National Credit Union Foundation.

CU System briefs (07/31/2008)

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* DUBLIN, Ohio (8/1/08)--The Ohio Credit Union League announced that its first outreach survey was distributed this week via e-mail to all Ohio credit union CEOs. The data gathered will exhibit the positive outreach work underway by Ohio’s credit unions to help their members and communities, the league said (eLumination Newsletter July 30). The results will provide the league with a comprehensive look at community outreach initiatives, and will be used to strengthen the league’s current and future legislative, media, and regulatory initiatives. All league members will receive a copy of the report … * DUBLIN, Ohio (8/1/08)--Ohio State Rep. Dan Stewart, far right, visited Western CU in Columbus July 24 to discuss community issues with the $57 million asset credit union's staff. A member of the House Financial Institutions Committee and long-time friend of credit unions, Stewart learned about services the credit union provides and was particularly interested in its outreach efforts to and programs for local Latino and Somali communities. The visit is the first of a series of efforts to identify avenues for collaboration between the credit union and both local and state officials. (Photo provided by the Ohio Credit Union League) … * SHREVEPORT, La. (8/1/08)--Elaine Harris Carr, 42, has been charged with stealing $211,000 by opening three unauthorized credit card accounts in her and her husband's names while working at WESLA CU, based in Shreveport. She is accused of manipulating inactive card accounts of members to pay her credit card bills. Authorities said they believe the manipulation of accounts began seven years ago (Shreveport Times July 31) … * ST. LOUIS (8/1/08)--Missouri Credit Union Association (MCUA) and Heartland Business Services have hired three new employees to serve Missouri's credit unions (CourierNet July 30). Andrea Janek joined MCUA's education and training department as a training specialist, effective July 16. Halley Hayden is director of communications for MCUA public/legislative affairs department, effective July 21. Heartland Business Services welcomed Susan Weinstein as credit analyst on July 23. All three are based in St. Louis, said MCUA …
* MADISON, Wis. (8/1/08)--CUNA Mutual Group had added Matthew Hargrove and Shad McKnight to positions on its consumer products team. Hargrove, hired as vice president of individual life and health product management, was previously with Boston Scientific, where he was responsible for neurovascular product sales in New England. Hargrove will manage profit and loss of the portfolio of life insurance and health-related products, and drive product group-level strategy and execution. McKnight is the new vice president of individual property and casualty, responsible for overall business strategy, product management, execution and financial results for his area. He also manages a relationship with Liberty Mutual Group for auto and home products to credit union members. He formerly was an executive with Nationwide Insurance's personal and commercial product lines in the company's South Central region. Hargrove and McKnight will report to Andy Napoli, senior vice president of the consumer products group …

Suspects used Web to gather info for robbery attempt

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SAVANNAH, Ga. (7/31/08)--Two Savannah, Ga., men were convicted last week in a U.S. District Court of conspiring to rob a credit union after surfing Internet websites of credit unions and banks located in the Savannah area. Donald Floyd Brown and Charon Garray Fields, both 31, were arrested just outside the front doors of Memorial Health CU in Savannah on Sept. 25, 2007, according to the Federal Bureau of Investigation's (FBI's) Atlanta office (US Fed News July 23). Police SWAT team members found a loaded pistol in Fields' waistband and several shotgun shells and a camouflage mask in his pocket. Brown had a matching mask in his pocket. Their van had two loaded shotguns, one of them sawed off. A forensics examination of a computer from Fields' home revealed numerous visits on the morning of the attempted robbery to Internet websites of banks and credit unions in the areas, the FBI said. The visits included Web pages that displayed photographs and biographies of the financial institutions' employees--from the president to the tellers. In addition to the conspiracy charges, the two men were convicted of attempting to rob the credit union and possessing an unregistered short-barreled shotgun. Brown also was convicted of possessing a firearm by a convicted felon. The two men face a maximum of 35 years in prison and a maximum $250,000 fine. Sentencing has not been scheduled yet.

Seattle Metropolitan CU rolls out green loans

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SEATTLE (7/31/08)--Seattle Metropolitan CU (SMCU) announced the launch of its Green Loans program, which offers discounts on auto loans for fuel-efficient vehicles, home loans for certified green homes and equity loans for energy efficiency upgrades. The $480.2 million-asset, Seattle-based SMCU’s program is the most recent chapter of its ongoing “Seven [Rochedale] Principles” [the foundation upon which all modern cooperatives are based] initiative. “Green Loans, like our new Feel Good checking account, are part of the Seven Principles that guide our business and are the foundation of all co-ops,” said Bob Harvey, SMCU president/CEO. “The seventh cooperative principle states that you must give back to the community in which you do business. “Showing concern for our environment and partnering with other nonprofits in our area are just two ways that we and our members are doing our part,” he added. The three new SMCU loan products include:
* Green Auto Loans--which provide rate discounts for hybrid-electric, gas or diesel-powered automobiles that average 25 city miles per gallon or greater; * Green Home Equity Loan--which discounts rates on loans for qualifying home improvements; and * Green Home financing--which discounts closing costs for certified built green homes.
The credit union, which celebrates its 75th anniversary this year, commemorated the rollout of its new eco-friendly loan products through a partnership with the Arbor Day Foundation to plant trees where they are needed most. As part of the commemoration, SMCU also introduced: a green-themed website design, a 35-foot tall colorful Green Loans banner made from recyclable materials displayed at its headquarters, and a free shopping bag giveaway for all members who adopt paper-free electronic statements--“eStatements.” “Seattle is not alone in its commitment to take concrete actions to reduce waste and protect the environment,” Harvey said. “We are proud to serve a community that embraces these eco-friendly initiatives, as we are encouraged to see green practices as part of a growing trend that is spreading around the world.”

CUs on the Tube MECU posts outreach videos

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BALTIMORE (7/31/08)--MECU of Baltimore is broadcasting its commitment to community service through videos on YouTube. The credit union recently uploaded eight videos to its channel,, of employees working on community service projects such as Habitat for Humanity and with youth at a local elementary school. “We do a lot of outreach and give back to the community,” Dorothea Stierhoff, MECU senior public affairs specialist, told News Now. “What better way to show what our people do and the faces of people involved?” “Giving back to the community is a vital part of our mission at MECU,” said Bert J. Hash, MECU president/CEO. “I often talk about the commitment of our employees--our team members. With this series of videos, now other people can see for themselves why I’m so proud of what our MECU team accomplishes.” MECU hopes to start driving more traffic to the videos, and attract more people to the credit union movement. The organizations MECU works with have been “very pleased” with the videos, Stierhoff added. “So far, the Habitat for Humanity video has been the most popular,” she said. The credit union has always been involved in the community, and the YouTube videos “document” the projects and “give a feel for what we do,” Stierhoff added. Next month, MECU hopes to make videos of its financial education workshops to place on YouTube. “People who have a hard time getting to the workshops can view them through our website,” she said. “It’s a way to get more financial education out there.” To see the videos, use the link.

Pa. foundation names new vice chair approves 14 grants

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HARRISBURG, Pa. (7/31/08)--The Pennsylvania Credit Union Foundation named a new officer and approved 14 grants at the foundation’s summer board meeting July 24.
From left: Dave Ackerman, vice chairman of the Pennsylvania Credit Union Foundation, and Joe Wambach, foundation executive director, accept a contribution from the Enterprise Rent-A-Car Foundation. Representatives from Enterprise Car Sales making the presentation are Laura Heintzelman and Lisa Regalski, car sales marketing managers, and Tiffany Walenchok and Kaushika Kansara, group marketing managers. (Photo provided by the Pennsylvania Credit Union Association)
Dave Ackerman, CEO of USX FCU, Cranberry Township, Pa., was appointed vice chairman of the foundation. Ackerman replaces Bob Marquette, CEO, Members First FCU, Mechanicsburg, who recently completed service on the foundation board (Life is a Highway July 30). Also elected to one-year terms were board Secretary Jim McAneney, CEO, Philadelphia FCU; and board Treasurer George West, director and treasurer, Pennsylvania State Employees CU, Harrisburg. The board also approved 14 grants valued at $54,000. Eleven of the 14 grants went to individual credit unions. Of the other three grants, one went to a consortium of credit unions, one went to the World Council of Credit Unions, and one went to the National Youth Involvement Board to sponsor financial literacy at its annual conference. Of the $54,000 awarded, more than $35,000 went to financial literacy efforts. Four individuals from Enterprise Car Sales, a division of Enterprise Rent-A-Car, attended the meeting to participate in the presentation of a $7,500 contribution to the foundation. The four cited the work of their foundation, which assists community philanthropic endeavors by its Pennsylvania credit union partners. It has provided ongoing support of tsunami and Hurricane Katrina victims.

Ohio CUs build biz relationships as banks report losses

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DAYTON, Ohio (7/31/08)--While banks continue reporting losses, credit unions continue to build business relationships, according to the Ohio Credit Union League. Credit unions largely have been unaffected by the current economic climate, Patrick Harris, league media relations director, told the Dayton Daily News Sunday. The league and eight credit unions in Ohio formed Cooperative Business Services (CBS) in 2003, which helps the credit unions share resources, loan services and funding. The cooperative also creates products and services for the small business community, Keith Reed, CBS president, told the newspaper. The number of small business members in the state has grown since CBS was created. Credit unions’ structure can offer more to individual and business members, added Bill Burke, president/CEO, DayAir CU, Kettering, Ohio. Donna Hale, Wright-Patt CU, Fairborn, Ohio, said small business owners are opening accounts because they’re satisfied with credit unions and are telling their friends.

CU System briefs (07/30/2008)

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* TEMPE, Ariz. (7/31/08)--Altier CU is promoting the chance to win free gas for a year to those who open a checking account at the credit union between now and Sept. 15. The grand prize winner gets $3,000 or enough gas for a year. The $3,000 will buy 750 gallons at $4 a gallon--or 14 gallons a week for 52 weeks. Two second-chance winners will take home $300 and $200, says the Tempe, Ariz.-based credit union's website. Altier CU has $188.5 million in assets … * PEARL RIVER, N. Y. (7/31/08)--Palisades FCU, based in Pearl River, N.Y., and the New York Credit Union Foundation teamed with the Cornell Cooperative Extension to educate high school teachers on improving the way they teach financial education in the classroom. They sponsored the July 14 event, which emphasized the National Endowment for Financial Education (NEFE) and Working in Support of Education (IWSE) High School Financial Planning Program. Palisades is a $139.2 million asset credit union based in Pearl River … * COLORADO SPRINGS, Colo. (7/31/08)--Ent FCU swept seven categories in the "best in the industry awards" during voting by readers of the Colorado Springs Business Journal. This year, 47,249 votes were cast in 98 categories. Ent was recognized as "the best" in categories for Best Credit Union, Best Commercial Lender, and Best Local Ad Campaign (for the credit union's 50th anniversary). The $2.4 billion asset, Colorado Springs-based credit union also was runner-up in Best Large Company With The Most Promising Future; Best Business to Support a Local Charity; and Best Business Bank. Ent President/CEO Charles Emmer was named runner-up for Best Local CEO … * LANSING, Mich. (7/31/08)--NuUnion CU, based in Lansing, Mich., donated to local charities more than 100 usable items from the former Regent Inn, which it will demolish and redevelop. Items including beds, dressers, lamps, mirrors, appliances, an HVAC unit, televisions and sinks will benefit local non-profits Volunteers of America, Haven House, and Capital Area Child and Family Services. Demolition of the hotel, a community eyesore and location for criminal activity, will begin after the credit union receives final approval from the state. Redevelopment is made possible through use of incentives through Michigan Brownfield Program. NuUnion worked closely with the Lansing Economic Development Corp. The $795 million asset credit union said the redevelopment will be challenging because it involves demolition, underground contaminants, drainage rerouting and asbestos removal … * HARRISBURG, Pa. (7/31/08)--Clearview FCU, a $600 million asset credit union based in Moon Township, Pa., has partnered with Cricket Wireless to sponsor a visit by the Declaration of Independence to Pittsburgh this week (Life is a Highway July 30). The document is one of 25 surviving Dunlap broadside copies printed on the night of July 4, 1776. It will be on display at the Carnegie Science Center Aug. 1-2. During the event, Clearview will sponsor a booth encouraging attendees to make "Get Out To Vote" buttons. The credit union and Cricket Wireless also will give away tickets to a private viewing of the document … * ROCKLEDGE, Fla. (7/31/08)--Brevard County (Fla.) Sheriff's deputies were looking for a couple who robbed a credit union while a child was in the getaway vehicle. The credit union was a Titusville branch of Rockledge-based Community Educators CU. The couple drove a white car. No weapon was displayed during the incident, which occurred after noon Tuesday ( July 29) …

Bolivian leaders visit partners in Ohio

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DUBLIN, Ohio (7/31/08)--Bolivian credit union and bank leaders visited the Ohio Credit Union League on Monday as part of a continuing partnership among the league, Corporate One FCU (Corporate One) and the World Council of Credit Unions (WOCCU).
Click to view larger imageOhio Credit Union League staff met with credit union and bank leaders from Bolivia during a visit sponsored by the World Council of Credit Unions. (Photo provided by the Ohio Credit Union League)
League staff briefed their guests through an interpreter on services they provide to the 427 credit unions in Ohio and on the impact of state and federal regulations on not-for- profit financial institutions in the U.S. “The U.S. Agency for International Development is funding WOCCU to carry out a three-year financial sector support program in Bolivia,” said Victor Corro, who heads WOCCU’s International Partnerships Program. “The program aims to improve the economic and social well-being of the rural population in underserved areas by connecting various microfinance institutions onto the credit union-owned share branching network and uniting them into an association to advocate for an effective regulatory environment in Bolivia,” he continued. Although located on two different continents, league officials and members of the Bolivian contingent realized that the issues facing their respective financial institutions are similar in many ways, but also different. Discussions surrounding deposit insurance revealed that Bolivian financial institutions are federally insured up to U.S. $5,000 and that they must ascertain a certain asset amount to garner federal insurance. One service of particular interest to the foreign contingent was shared branching and the technology needed to become a credit union service center. Both groups discussed capitalization levels, including what level is considered adequately capitalized and how that is monitored in their respective regions. Bolivian officials also shared how foreign federal legislation, such as the USA Patriot Act, has impacted their operations. “This was a unique opportunity to learn from each other and share best practices,” said league President Paul Mercer. “It was truly educational, and although there was a language barrier, we all speak the same language when it comes to serving our members in the best possible way.” Both sides agreed to continue the discussion in the future, possibly during a visit of Ohio leaders to Bolivia. During its visit to the U.S., the group also will meet with representatives from Western CU, Columbus, Ohio; CES CU, Mount Vernon, Ohio; and Corporate One FCU. Kelly Schermerhorn, CEO, CES CU, and Kurt Lykens of Corporate One previously visited Bolivia as part of a WOCCU delegation. The Bolivian group also will travel to Washington, D.C., to meet with the National Association of State Credit Union Supervisors. Participating in the meeting from Bolivia were Fernando Prado, executive secretary of ASOFIN, which specializes in micro financing; Reynaldo Marconi, general manager of FINRURAL, an association of financial institutions serving rural populations; Marcelo Montero, executive secretary of ASOBAN, as association of private bankers in Bolivia; Vittorio Valdez Rocha, president of the ATC, a technical association representing 13 credit unions; Antonio Kierig, executive secretary of UNIVIV; and Rolando Salazar, project director of WOCCU-Bolivia, and Thom Belekevich, a WOCCU consultant.

CU System briefs (07/29/2008)

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* WEST JORDAN, Utah (7/30/08)--A Utah man has been charged with making a bomb threat against a credit union and claiming a sniper was waiting across the street. The man, who wasn't identified, allegedly called Cyprus FCU, West Jordan, and threatened the bomb if he did not get $100,000. The call was traced to a pay phone, where an officer saw the man handle the phone and then drive away. He is charged with aggravated robbery and terroristic threat (The Salt Lake Tribune July 29) … * TYLER, Texas (7/30/08)--A bomb threat that stopped business for 90 minutes at four branches of Kelly Community FCU, was deemed a hoax after no explosive device was found. The incident occurred Friday at about 12:30 p.m. when a caller called the credit union's main number and said there was a bomb in the credit union. A search of the branches found no device at the Tyler, Texas-based credit union ( July 29) … * KERMIT, Texas (7/30/08)--Winkler County CU President/CEO Devora Mitchell was appointed by Texas Gov. Rick Perry to the governing board of the Texas Department of Housing and Community Affairs' Manufactured Housing Division. The board sets policy for the division and addresses issues related to the manufactured housing industry. Mitchell is a member of the board of the Permian Chapter of Credit Unions and has served on numerous committees for the Texas Credit Union League. She replaces Valeri Stiers Malone. The appointment is subject to confirmation by the Texas Senate (US Fed News July 21) … * BREA, Calif. (7/30/08)--Evangelical Christian CU (ECCU) has revised its website,, from a portal to find information to a relationship-based resource for ministries. The site aims to be members' "ministry banking resource" and includes white papers, resource events and case studies to support, educate and encourage ministries, the $1 billion asset credit union said … * HARRISBURG, Pa. (7/30/08)--Adam Gertler, a Philadelphia actor who appeared earlier this year in a television commercial for Bucks First FCU, Bristol, Pa., was named runner-up to Aaron McCargo of Camden, N.J., in the reality show, "TV's Next Food Network Star." Gertler spent nine weeks on the show. He can be seen in Bucks First FCU's commercial on You Tube … * RIVERSIDE, Calif. (7/30/08)--Altura CU was among the sponsors of a Riverside, Calif., appearance of the 2008 USA Olympic Synchronized Swim Team July 12 in one of the team's last performances before heading to Beijing for the Summer Olympic Games. The team performed all four routines that it will present in the Olympic events for a large crowd of local well-wishers. Two Riverside swimmers are members of the Olympic team: Brooke Abel and Meghan Kinney, who is a team alternate. Altura is a $1 billion asset, Riverside, Calif.-based credit union …

Pa. to require licenses for Internet payday lenders

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HARRISBURG, Pa. (7/30/08)--Internet payday lenders and other out-of-state companies that make consumer loans to Pennsylvania residents will need to be licensed by the state department of banking and comply with state laws, Pennsylvania Secretary of Banking Steve Kaplan announced Monday. He also cited the Pennsylvania Credit Union Association’s Credit Union Better Choice program as an example of loans offered by credit unions that cost less and can be paid back over longer periods of time than traditional payday loans (Life is a Highway July 29). The announcement is the most recent action by the department of banking to protect Pennsylvania consumers from excesses associated with payday lending. The department says the Consumer Discount Company Act (CDCA) applies to any company that lends to Pennsylvania consumers. The CDCA limits the interest and fees a non-bank company can charge for non-mortgage loans of $25,000 or less. If companies do not obtain a license from the department by Feb. 1, they face possible fines and other penalties. The department previously had interpreted the state’s CDCA to apply only to companies with a physical location or employees in Pennsylvania. As a result, companies in other states made loans to Pennsylvania consumers through the Internet or mail under terms that did not comply with Pennsylvania law.

CUs assist as California cuts state workers pay

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SACRAMENTO, Calif. (7/30/08)--Credit unions in California are preparing to help their members as Gov. Arnold Schwarzenegger plans to sign an order to reduce pay for state workers to federal minimum wage until the state budget passes. About 22,000 temporary workers and retired annuitants also will be laid off until the budget is passed (Sacramento Bee July 28). To help its members who are employed as state workers, the Golden 1 CU, Sacramento, is offering loans at 0% annual percentage rate (APR) and 4.99% APR, depending on when members signed up for direct deposit. Members with direct deposit as of June 30 are eligible for the 0% APR loan, Teresa Halleck, Golden 1 CEO, told News Now. The credit union has about 100,000 state workers in its membership of 700,000. Since the executive order was reported in the press on Thursday, members have been calling the Golden 1. “Calls are up 5%,” Halleck said. “That’s 200 extra calls.” The credit union is prepared to handle the budget impasse, she emphasized. “Members know they can rely on us. We’re here for them.” Aside from the loans, the Golden 1 also offers Lifeline Advance, a payday loan alternative, Halleck said. Sacramento (Calif.) CU, also is preparing a special program to help its members who work for the state, Jim Kelly, vice president of retail and lending operations, told News Now. About 400 of the credit union’s members work for the state. Sacramento CU is creating a loan product at 0% interest for members who have direct deposit. The program is designed to help them for a few months until the budget passes, he said. The credit union also offers a skip-a-loan-payment program, which provides members with a one-time loan extension at no charge. Sacramento CU also is willing to work with members who don’t have direct deposit at the credit union on loans. “There are a number of programs out there,” Kelly said. “We make sure we’re here to take care of our members.”

CUs report big scare no damage in LA earthquake

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LOS ANGELES (7/30/08)--Credit unions and the movement's organizations based in Southern California reported no damages from the 5.8 magnitude earthquake that hit the Los Angeles area Tuesday morning. The quake occurred just before noon in California. "It happened just about 15 minutes ago," Kathy Marcelletta, Wescom Central CU branch manager, told News Now Tuesday. Marcelletta's branch, which is located near Chino Hills, the epicenter of the earthquake, didn't feel a large impact from the quake. "The branch shook a little," she said. Members were in the branch at the time of the quake, but were not concerned, she said. Barbara Ago, president/CEO of the Pomona branch of Cal Poly FCU, just arrived at her office when she was contacted by News Now. The credit union is located in a student union building on the Cal Polytechnic Institute campus, and was just retrofitted, she said. "We are fine," she told News Now. "It was a good shake. We're a few miles from the epicenter." The credit union's office wasn't damaged, and nothing was broken--which is likely due to the fact that the credit union just repainted its walls, and had unstrapped all of its bookcases from the walls. "Our computers are up," she added. But the building the credit union is located in has some damage, and there may be damage to other buildings on campus. A campus water main broke, and drywall cracked in other buildings. Glass is being cleaned up, and "I did hear some ambulances drive by," she said. Earthquakes in the area happen about once every 15 years, she said. "We're used to it." The California Credit Union League (CCUL), based in Rancho Cucamonga, Calif., is about nine to 10 miles from the quake's epicenter, Matt Buck CCUL public affairs specialist, told News Now. “People felt the quake in Los Angeles and we felt the shaking here," Buck said. “But there was no damage, just one guy’s Pez dispensers tipped over in the corner of our office.” “We haven’t heard anything from credit unions,” he added. Western Corporate FCU's (WesCorp) facilities are located in San Dimas, about 10 miles from the epicenter. "We haven't had a good shaker like that in years," Walter Laskos, public relations director at WesCorp, told News Now. "It caught people off guard and rattled our nerves, but nothing fell off the shelf. "A lot of folks evacuated, but several remained and answered the phones. The first thing we do is check the critical systems immediately, such as the gas lines, and they were fine," he said. WesCorp's building, which was visibly shaking, is built to hospital standards and can withstand an earthquake of 8.0 magnitude, he said. WesCorp had no reports from credit unions of any damages, and Laskos was preparing a message to its member credit unions stating that WesCorp was operating. "It's business as usual." Stan Hollen, president/CEO of CO-OP Financial Services, located in Rancho Cucamonga, told News Now, "It was a good jolt and lasted about eight seconds. You definitely felt it." CO-OP's three-story building is seven miles from the epicenter, he said. Staff did not evacuate the building, but "we have a few rattled employees." The aftershock, which registered 3.8, was "barely noticeable." ATMs in the CO-OP Network were undamaged. "We checked with the Network's operations center and no ATMs or lines are down," Hollen said.

Southwest Corporate white paper addresses remote deposits

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PLANO, Texas (7/30/08)--Southwest Corporate FCU has published a new free white paper to help credit unions understand what it takes to implement and maintain a successful remote deposit program for business members. The paper, “Remote Deposit for Small Business: Greater Convenience Should Not Mean Less Service,” discusses a technology that gives businesses the ability to deposit checks electronically from their business site, eliminating trips to their financial institution (LoneStar Leaguer July 29). Southwest Corporate’s 10-page white paper examines the characteristics of businesses that might be most receptive to remote deposit and how remote deposit fits into a complete business services portfolio. It also explores the future of remote deposit technology and identifies factors to consider when evaluating service providers. “Not since the introduction of the ATM has there been so much excitement around a product and such fast adoption of it,” said Christine Barry, research director with Aite Group, in a February report on credit unions and small businesses. “As banks of all sizes increasingly look to win the business of the highly desired small business customer segment, their ability to offer coveted products--such as remote deposit--will play a large role in their overall success.” Credit unions express concern that remote deposit causes a loss of personal contact with members. Credit unions have always prided themselves on providing better-than-bank customer service, the corporate said. How do they maintain that personal touch, and cross-sell additional services when business members handle their financial services remotely? The white paper includes recommendations for building a new business model for member service, interviews with operational and marketing experts, and comments from a credit union that believes it is creating greater member loyalty with remote deposit.

League State law gives Michigan CUs an FOM alternative

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PLYMOUTH, Mich. (7/30/08)--A Pennsylvania court decision earlier this month regarding field of membership issues in the state re-emphasized what credit unions in Michigan have to be thankful for, according to the Michigan Credit Union League (MCUL). “This roadblock for the Pennsylvania credit union wishing to expand its charter is a clear contrast to the flexible fields of membership enjoyed by Michigan state-chartered credit unions, thanks to the updated Michigan Credit Union Act (MCUA),” said MCUL Executive Vice President Patrick La Pine. “Credit unions in Michigan have an alternative to dealing strictly with federal laws regarding this kind of expansion, and in a case like this wouldn't have requirements for common bond," he said (Michigan Monitor July 28). “The battle for modernization of the MCUA was a long one, but five years later Michigan credit unions can still look back and realize it was certainly worth the effort,” he added. The Michigan Credit Union Act was updated in 2003 after nearly three years of work by Michigan credit unions and the MCUL, the league said. The Credit Union National Association (CUNA) expressed disappointment July 21 on the federal court ruling that the National Credit Union Administration's (NCUA) record was not sufficient to sustain its decision granting a six-county area community credit union expansion in Pennsylvania (News Now July 22). The decision, issued by Chief Judge Yvette Kane for the U.S. District Court, Middle District of Pennsylvania, involved a lawsuit filed by the American Bankers Association and the Pennsylvania Bankers Association. CUNA pledged to begin work immediately to help credit unions deal with the judge's order. The bankers argued that the NCUA acted in an arbitrary and capricious way in 2003 when it approved Harrisburg, Pa.-based Members 1st FCU's charter request. The agency decision was later used as basis to authorize two other charter expansions for two other Pennsylvania credit unions, New Cumberland FCU and AmeriChoice FCU. The court concluded that “under all the circumstances, the decision of the NCUA is arbitrary and capricious and must be set aside.” The court determined that “after a careful review of the record, that the NCUA's analysis is insufficient in this case...”

IPost-DispatchI features CU on deposit insurance

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ST. LOUIS (7/30/08)--Anheuser-Busch Employees CU provided consumers examples of just how safe deposits are in credit unions by explaining different types of coverage in an article in the St. Louis Post-Dispatch (July 27). The article noted that insurance provided by the National Credit Union Administration and the Federal Deposit Insurance Corp. "may be the best sleep aid around" because there's "no reason to worry" about money that's federally insured. David Tate, vice president of operations at the $910.5 million asset credit union, provided examples of how a consumer's accounts are insured:
* An account in a husband's name only is insured for $100,000. His wife's separate account is also insured for another $100,000; * Their joint account is insured up to $200,000--or $100,000 each; * If the husband is a trustee in a testamentary revocable trust for the wife, the account is insured for $100,000. If the wife has an account titled as a testamentary revocable trust for the husband, it's insured for $100,000.
Total insurance for all these accounts is $600,000, but Tate explained that adding accounts that are payable on death (POD) to dependents, such as children, would mean a husband and wife who have a POD account for their two children could qualify for $400,000 in insurance--or $100,000 for each spouse and child. Tate also addressed issues related to the death of one spouse, individual retirement accounts, and the addition of a second account owner.

Free gas cards promote CUs new online accounts

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PEMBROKE PINES, Fla. (7/30/08)--In a sign of the times, Power Financial CU is promoting its new online account-opening service by giving away thousands of dollars in free gas cards and discounted oil changes. The $455.3 million asset credit union, based in Pembroke Pines, also is providing nitrogen for tires and a chance to win tickets to the Ford 400 Championship at Homestead Miami Speedway. Allan M. Prindle, president/CEO, said the new online account-opening service is "an easy way for consumers to open an account without having to visit a branch. With the rising cost of gas, we recognize that many members are looking for ways to conserve, and adding more online service features eliminates back and forth trips to the branch." As part of the official launch of the online account-opening service from Aug. 11 through 15, consumers opening a new Cash Back Checking account using the online service will be eligible for a $25 gas card at the Aug. 23 kickoff event at Mobil 1 Lube Express. Existing members can stop by the event to receive a free $10 gas card while supplies last. Mobil 1 Lube Express will offer a $5.99 discount on all oil changes, $5 off the purchase of nitrogen for tires and 10% off all other services. Members also enter to win prizes, including the grand prize--a $250 gas card, two tickets to the Ford 400 Championship, and a free oil change.

Alabama league hosts its first exec outlook conference

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BIRMINGHAM, Ala. (7/30/08)--The Alabama Credit Union League hosted its first annual Executive Outlook Conference July 22-25, with a number of credit union industry experts attending. Featured guests and presenters included:
* Stan Hollen, CEO, CO-OP Network; * Jeff Post, CEO, CUNA Mutual Group; * Dennis Adams, CEO, American Share Insurance; * Mike Schenk, Credit Union National Association vice president of economics and statistics; * Mark Meyer, Filene Research Institute CEO; * Ron Insana, Wall Street author; and * Robert Novak, journalist, who shared information on topics relevant to credit unions and his predictions for the upcoming presidential elections.
Credit union and financial experts gathered at the Alabama Credit Union League’s Executive Outlook Conference last week. From left: Mike Schenk, vice president, economics and statistics, the Credit Union National Association; Dennis Adams, CEO, ASI/ESI; Jeff Post, CEO, CUNA Mutual; and Stan Hollen, CEO, CO-OP Financial Services. (Photo provided by the Alabama Credit Union League)
“Bringing together well-respected business and industry leaders at this one-of-a-kind meeting enabled our credit union executives to get an up-close national view on the country’s economic and political landscape,” said Gary B. Wolter, league president. “As intended, this will in turn sharpen and bring focus to the credit unions’ strategies when planning for their growth and success.” Conference sponsors included American Share Insurance, CO-OP Financial Services, CUNA Mutual, Print Resources Inc., Southeast Corporate FCU and Southwest Corporate FCU.

IWashington PostI CUs fill void when payday lenders leave

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WASHINGTON (7/29/08)--Credit unions in the Washington, D.C., area are filling the void left by payday lenders who vacated the city after interest rates in the District were capped at 24% in January, says Saturday's Washington Post. The article describes how Treasury Department FCU helped Stephanie Vann, a single mother, with a $500 six-month loan at 16% annual percentage rate--far lower than the typical payday loan rate of 300% and more. The credit union loan cleared her payday debt and put her on her feet. She now has a checking account at the credit union. The Post noted that at least half a dozen credit unions are attempting to use payday lending alternatives as a tool to improve financial health of borrowers and that the credit unions' programs could be key in making the district's new interest-rate cap work without unintentionally harming low-income borrowers. There's still a long way to go. The Post notes that "stretch pay" payday lending alternatives offered at 43 credit unions nationwide have issued 8,656 loans, with a few hundred made in Washington, D.C. That compares with 260,000 loans worth $125 million made by the two largest payday lenders in the district. Jennifer Porter, chief advocacy officer at the Maryland and District of Columbia Credit Union Association, told the Post that district credit unions' willingness to pick up the small loans is actually a convergence of two trends--the district's move to cap interest rates charged by payday lenders and credit unions' already-in-progress payday loan alternatives. The article also mentions Andrews CU, Clinton, Md.; CUNA Mutual Group; the Center for Responsible Lending; and HEW FCU, Alexandria, Va. Use the resource link for the full article.

RMJ Foundation celebrates half-century mark

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RANCHO CUCAMONGA, Calif. (7/29/08)--The Richard Myles Johnson (RMJ) Foundation is celebrating 50 years of supporting financial education and is looking ahead to promoting youth financial education and scholarship programs for credit union staff and volunteers. In the coming months, the RMJ Foundation will be busy with:
* RMJ/WesCorp Golf Classic, Aug. 25, Dana Point, Calif.; * Credit Union Train, which will make its annual voyage through the Garden Railroad of the Los Angeles County Fair Sept. 5-28; * The Golden 1 Leadership Scholars Program, which offers scholarships to current or future CEOs of credit unions up to $300 million in assets to attend leadership development programs; and * The Beacon Awards Gala Reception, Nov. 4, San Francisco. The awards honor those who promote the principles of the credit union movement through education.
The RMJ Foundation also is partnering with USA Today to deliver the newspaper’s Choice is Power financial literacy program to 55 schools in California and Nevada. The foundation distributed about $60,000 in community service grants this year, including:
* A grant to Community Trust CU, Modesto, Calif., to support its financial literacy program for at-risk, low-income youth in Palo Alto; * A grant to Jones Methodist Church CU, San Francisco, to continue its Financial Boot Camp for youth; * Help to launch a partnership between eight Northern California credit unions and the San Francisco Unified School District establish a multi-lingual, multicultural credit union-based financial literacy program in the school district.
The foundation provided more than $40,000 in scholarships to credit union staff and volunteers to attend educational seminars and conferences, and $24,000 to those attending Western CUNA Management School this summer. The RMJ Foundation was formed in 1958 as the California Filene Educational Foundation by 30 California credit union pioneers. In 2000, the foundation was named after Richard Myles Johnson, retired CEO of Western Corporate FCU. In 2005, it focused on youth financial literacy and has helped to fund the Biz Kid$ television series.

Staff at CUNA Mutual aid co-workers in tornadoes floods

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WAVERLY, Iowa (7/29/08)--CUNA Mutual Group and its employees contributed nearly $32,000 to fellow workers and their families in Iowa affected by May tornadoes and $13,000 for employees affected by June flooding. CUNA Mutual employees nationwide raised money for employees and their families who were impacted by the tornadoes’ resulting devastation. Those employee contributions were matched by the company. "We are grateful for the generosity showed by our fellow employees through their contribution of personal dollars to help CUNA Mutual staff, and for our company's willingness to match these generous donations," said Reid Koenig, vice president, customer operations. On May 25, tornadoes ravaged a four-county area in Northeast Iowa near Waverly where CUNA Mutual employs more than 550. Then, widespread flooding hit much of Iowa in early June, including Waverly, where employees’ homes and one CUNA Mutual business location had to be evacuated. Tornado-related contributions were disbursed to employees and their families who endured significant losses. Some employees’ contributions are being directed to the communities of Parkersburg, Dunkerton and New Hartford, which sustained significant damage from the tornado. Flood-related donations, currently at $13,000, will also be matched by CUNA Mutual funds and distributed to employees. Lissa Miller, a compliance specialist in Waverly, and her family were on the receiving end of tornado-relief contributions from the co-workers and company. “My family was awestruck when they opened the checks. Their jaws dropped at the generosity of such wonderful people whom we work with every day. I want to express my sincere appreciation of what the company has done for my family," Miller said.

32400 bottles of water donated by Arizona State CU

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PHOENIX (7/29/08)--Arizona State CU donated more than 1,350 cases of bottled water and $1,800 to the Phoenix Rescue Mission. The water is enough to support the needs of the mission for at least six weeks, the credit union said Friday. The credit union started the water drive three weeks ago with the goal of raising 500 cases of water. Associates donated $5, or a case of water, for a chance to sink their favorite executive into a dunk tank. Departmental teams competed against each other to raise money. The winning team brought in 450 cases. The lobby was filled with cases of water, creating a “pyramid of life,” according to the credit union. “It was outstanding to see our associates get so involved in this water drive, directly impacting the community,” said David E. Doss, Arizona State CU president/CEO. The Phoenix Rescue Mission’s priority is to provide heat relief to homeless people in the area. The temperatures are in the triple digits, and those living on the street are at high risk for dehydration. Arizona State CU has $1.2 billion in assets.

CU offering disaster relief for Dolly victims

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SAN ANTONIO, Texas (7/29/08)--Texas-based Security Service FCU (SSFCU) is offering a financial disaster relief program to help members and potential members recover from Hurricane Dolly. The hurricane, a Category 2, hit Brownsville, Texas, last week. The storm damaged some buildings in southern Texas and northeastern Mexico and caused some flooding (News Now July 25). Residents of Rio Grande Valley, Corpus Christi and Coastal Bend, Texas, will have access to:
* $1,000 pre-approved emergency relief loans at 3.95% for a maximum term of 12 months for existing SSFCU members; * $2,500 qualifying emergency relief loans at 4.95% for a maximum term of 24 months for qualifying SSFCU members; and * An emergency 30-day skip payment program with no fee.
“We’re offering these options to assist our members as they work to get things back to normal during this difficult time,” said David Reynolds, president/CEO of SSFCU. “Security Service is committed to helping our members and the community, especially when they are in need of our support the most.”

Montana CU group to receive NCUFs Wegner Award

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HELENA, Mont. (7/29/08)--Montana Credit Unions for Community Development (MCUCD)--the five-year-old philanthropic arm of the Montana Credit Union Network--will receive the Herb Wegner Memorial Award for Outstanding Organization for its work in helping 50,000 people.
Click to view larger imageOne of the events sponsored by Herb Wegner Memorial Award recipient Montana Credit Unions for Community Development was the Montana REAL Solutions Payday Lending Alternatives kickoff, with Nancy Pierce, president of Tipton Research Group, Kansas City, Mo., speaking (Photo provided by the National Credit Union Foundation)
The award will be presented Feb. 23 at the 21st Annual Wegner Awards Dinner hosted by the National Credit Union Foundation. The event will be at the Grand Hyatt Washington during the Credit Union National Association’s 2009 Governmental Affairs Conference. “We are proud of the real difference our organization is making in our state with 62 innovative credit unions," said Montana Credit Union Network President Tracie Kenyon. "On behalf of the 50,000 people we have helped (to) avoid predatory loans, keep more of their earned income, and open their first savings accounts, we thank the NCUF Awards & Recognition Committee for choosing the underdogs for this award.” “This organization really gets it," said NCUF Awards & Recognition Committee Chairman Bob Schumacher, CEO of MountainCrest CU, Arlington, Wash. "For credit unions to truly grow and thrive, we have to partner with other organizations who know the people most in need of credit union services. By following this innovative example, credit unions could reach millions more potential members and serve them for the greater good,” Schumacher said. MCUCD’s mission is to “implement programs, through credit unions, that improve the social and economic well-being of Montanans.” Most of its activities are directed toward serving the state’s low-wealth population. Montana’s median household income of $33,024 is substantially lower than the national average of $42,000. Fifty of Montana’s 62 credit unions have the National Credit Union Administration’s “low-income” designation. MCUCD’s services are packaged to aggregate resources and create “plug and play” products for credit unions to implement:
* Alternatives to Payday Lending--offering low-cost alternatives to meet short-term borrowing needs; * Credit Union Resource Center--web-based tools helping consumers make smarter financial decisions; * Early Awareness--educating parents of elementary-aged school children about planning and saving for college; * Financial Education--reaching classrooms, community centers, and boardrooms; * Individual Development Accounts--special matched savings accounts that encourage low-income members to become regular savers by doubling or tripling their principal; and * Volunteer Income Tax Assistance--free tax preparation sites in person and on the Internet, returning more than $1 million in Earned Income Tax Credits to working low-income families.
To grow and sustain these programs, MCUCD forged partnerships with 22 local, state and national organizations. Partners provided volunteer workers, strategic and capitalization planning, teacher training and consumer education, and $824,233 in grants. "Partnerships with MCUCD are about coming together with the resources of all partners and working together to make the best use of the gifts, talents, and resources that everyone contributes," said Kelly Chapman, executive director of the Student Assistance Foundation. "Many organizations espouse this philosophy, but too few actually live it. That’s why it’s so refreshing to work with MCUCD," Chapman added. Named for late Credit Union National Association CEO Herb Wegner, the awards recognize the spirit of “innovative, creative, risk-taking leadership.” Online registration for the awards dinner will be available later this year at

CUNA addresses plastic use in IWall Street JournalI

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NEW YORK (7/29/08)--The Credit Union National Association’s chief economist, Bill Hampel, commented on the discipline consumers need when using credit cards in an article in The Wall Street Journal Sunday. “The key to using plastic is having the discipline to count the charges as part of monthly expenditures,” Hampel told the newspaper. “That way you get the float, the convenience of using plastic and you get the goodies--the cash back or frequent flier miles.” The article provided eight tips for consumers to curb their credit card spending. For the tips and full article, use the link.

CU System briefs (07/28/2008)

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* HARRISBURG, Pa. (7/29/08)--Sayre, Pa.-based Guthrie FCU became the proud owner of "Cinnamon"--a 217-lb. pig--after 9-year-old Ryan Richardson, a member of the Grandville Squealers 4-H Club, convinced credit union CEO Erie Chase to participate in the 4-H auction at the 133rd Troy Fair July 23. To help the 4-H members, bidders ran up the price per pound to nearly eight times the market value of 55 cents per pound. Chase, with the help of Nancy DelGrippo, financial services rep at the credit union's Troy branch, had the winning bid. Since the Troy branch has a designation to serve the underserved, the credit union elected to have the meat divided to serve four needy families within its membership (Life is a Highway July 28) … * RIVERSIDE, Calif. (7/29/08)--Altura CU nearly doubled the college scholarships it granted this year to graduating high school seniors. It granted $42,000 in scholarships, with 42 recipients each receiving $1,000. "We had a record number of students, 327, apply for scholarships this year," said Ricki McManuis, senior vice president of corporate communications at the credit union and board member of the Altura CU Foundation. Since it began offering scholarships in 1993, the credit union has granted them to more than 200 students. The program is funded by credit union members--$5 from the one-time $12 membership fee goes to the scholarship fund … * MARIETTA, Ga. (7/29/08)--LGE Community CU President/CEO Edwin J. Collins will retire, effective Dec. 31, announced the credit union's board. Chris A. Leggett, LGE Community's executive vice president and chief financial officer (CFO), has been appointed as his replacement. Collins, who has been president/CEO since 1995, joined the credit union (formerly known as Lockheed Georgia Employees' FCU) in 1984. He was recipient of the Georgia Credit Union Affiliates' Lifetime Achievement Award in 2006. From 1964 to 1984, Collins served in various positions for the National Credit Union Administration. He held many positions with national organizations, including serving on the Credit Union National Association's Governmental Affairs and Renaissance committees. Leggett, before joining the credit union last fall, was president/CEO of First Coast Community CU. He held earlier positions at PSCU Financial Services, a credit union service organization, and at First Florida CU, where he was CFO. He is on the board of Credit Union 24, an ATM network owned by credit unions … * MUSKEGO, Wis. (7/29/08)--Corporate Central CU has hired Ellen Janevicius as relatioknship development officer for Corporate Central's Illinois market, the corporate announced. She will meet with members and future members of the corporate to determine their needs and provide correspondent, investment and liquidity solutions. Janevicius worked at HealthCare Associations CU, Naperville, Ill., for 11 years as marketing manager and was a member of the Illinois Credit Union League Marketing Exchange … * PARMA, Ohio (7/29/08)--David Straight, former president of the Ohio Credit Union League, died July 19 in Parma, Ohio. He was 81. A retired high school teacher, he worked full time as treasurer/manager of the Public School Employees CU, which he founded in 1955. He retired from the credit union in 1991. He served two years as president of the Ohio league and received the Volunteer of the Year award in 1985. He was named director emeritus of the league in 2004 and of the credit union in 2003. He is survived by his wife, Shirlee; three daughters, a son, six grandchildren and one sister (The Plain Dealer July 25) …

N.J. league Banks promos now center on capital insurance

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HIGHTSTOWN, N.J. (7/28/08)--Banks' commercials are shifting from products and services' features and conveniences to touting their capital position--a sign of a crisis of confidence in the banking system, according to the New Jersey Credit Union League. League President/CEO Paul Gentile, in his president's message to credit unions in the league's weekly newsletter, noted that capital strength is what banks are promoting in the wake of the failure of IndyMac bank (The Weekly Exchange July 21). In that failure, depositors lost funds beyond the limit of deposits covered by federal insurance. Credit unions throughout the country are reporting that members have inquired about federal deposit insurance, he wrote. "Credit unions of course have a higher capital ratio than banks, just over 11% compared to banks' 10%. Here in New Jersey, credit union capital is near 12%," Gentile said. Although credit unions' insurance has the same protection as that of the Federal Deposit Insurance Corp., the National Credit Union Share Insurance Fund is less recognized among consumers, Gentile noted. The situation serves as a reminder, he said, that consumers' knowledge of credit unions is still much lower than that of banks. He questioned whether credit union leaders themselves could adequately describe the differences and similarities between credit unions and banks. Gentile suggested leaders explaining the differences should emphasize the difference in credit union structure, describe how credit unions exist solely to meet the savings and lending needs of members (as opposed to shareholders demanding high profits), and explain that banks have an edge in raising capital quickly while credit unions can do so only through retained earnings. "The 11% capital level credit unions maintain has been built up over years of prudent management," he said. "Credit unions also have higher capital requirements than banks and do not enjoy a risk-based capital structure like banks. These are all things bankers would not want to deal with." He noted the league will include "How to be a credit union advocate" in its education offerings.

Northeast CU offers storm relief loan program

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PORTSMOUTH, N.H. (7/28/08)--Northeast CU (NECU) is offering a relief loan program Friday to help homeowners and renters in the area recover from severe damage to their homes and properties from storms that hit Thursday. The Relief Loan Program--Neighbors Helping Neighbors--aims to help victims recover from their losses, make necessary purchases and repairs, and get back on their feet, the Portsmouth, N.H.-based credit union announced Friday. "In many cases, our neighbors may not have insurance that will cover all of the damages sustained by this devastating storm," said Peter Kavalauskas, president/CEO of the more than $550 million asset credit union. By reacting quickly, the credit union hopes to provide "another financial option while they may be waiting for government programs, private insurance or similar funding to rebuild," Kavalauskas said. The program offers two loans:
* The Homeowner Relief Loan has no payments for 90 days, a 5.9% annual percentage rate for up to $20,000 with repayment terms of 60 months, or a 6.9% APRE with repayment terms of 84 months. It is unsecured and applications are due by Aug. 31. * The Renters Relief Loan includes no payments for 90 days, a 7.49% APR for a loan up to $5,000 with repayment terms of 60 months. It, too, is unsecured and has an Aug. 31 application due-date.

Illinois league advises CUs a safe harbor

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NAPERVILLE, Ill. (7/28/08)--While some segments of the financial services industry are experiencing economic difficulties, Illinois credit unions remain safe and sound institutions for more than 2.7 million consumers who keep their money there, said the Illinois Credit Union League (ICUL). There are about 8,500 credit unions nationwide, with more than 90 million consumers as members, holding about $800 billion in assets. In Illinois, more than 430 credit unions hold $20.8 billion in assets. Member deposits in federal and almost all state-chartered credit unions are federally insured by the National Credit Union Administration (NCUA) through the National Credit Union Share Insurance Fund (NCUSIF), the league emphasized in a press release. “Consumers who have federally insured funds in credit unions should rest assured that their deposits are safe up to at least $100,000 per account, with additional coverage of up to $250,000 for certain retirement accounts,” said Dan Plauda, ICUL president/CEO. The NCUSIF is in strong condition, with an equity ratio estimated at 1.24% for June 30, projected by year-end to be 1.28%, according to NCUA. Data from NCUA also show that Illinois credit unions are well capitalized, with an overall capital-to-asset ratio of 11.2%-- a capital cushion of $3.12 billion. In addition, data compiled by the Credit Union National Association indicates that Illinois consumers, at a time when they are concerned about their economic futures, trust credit unions to be a “safe harbor” for their money. Savings at credit unions in Illinois grew by more than 6% in the 12 months ending March 2008. When it comes to lending, credit unions operate in the best interests of their members and are more conservative, unlike other more traditional financial institutions that exist to build up profits for stockholders, the league said. As a result, credit unions steered clear of the subprime crisis and other risky lending practices. Mortgages at Illinois credit unions grew by nearly 17% in the 12 months ending March 2008--at a time when mortgage loans have forced other lenders to scale back or close their doors entirely, the league said. Also, Illinois credit union mortgage delinquencies at the end of the first quarter stood at 0.42%. First mortgage charge-offs were 0.05%. “Credit unions as a whole are very sound places to do business and exist solely to serve the best interests of their members. The more than 2.7 million consumers who belong to an Illinois credit union can have full confidence in their stability during the current national economic downturn. Not one penny of federally insured funds has ever been lost by a credit union member,” Plauda concluded.

Truliant FCU mortgage closings up 39

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WINSTON-SALEM, N.C. (7/28/08)--Truliant FCU experienced a 39% increase in closed mortgage loans from January through June over the same period in 2007. In June, a month in which area home sales dropped 18%, according to the North Carolina Association of Realtors, Truliant saw an increase of 51% in mortgages closed (Weekly Update July 25). Truliant achieved mortgage growth because it did not enter the subprime lending market, according to the North Carolina Credit Union League. This enabled the credit union to provide its members with mortgages they can afford. “Our mortgage department stays extremely busy,” said Marc Schaefer, Truliant president/CEO. “We take the necessary steps and time to analyze members’ needs to ensure they understand all of their options and the costs associated with each. By placing this information within the context of all their financial needs, we help them purchase a home that they can both enjoy and afford. “As a credit union, we are member-owned and pride ourselves on doing what is best for our members,” he added. The $1.086 billion asset Truliant FCU is based in Winston Salem, N.C.

New Mexico election rarity a way for CUs to shine

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ALBUQUERQUE, N.M. (7/28/08)--The Credit Union Association of New Mexico (CUANM) and credit unions will take advantage of a rarity in this year's election campaigns to educate candidates about issues and challenges facing credit unions. New Mexico's elections will be among the most-followed in the nation because no incumbents are running for re-election in any of the House seats open this election year, says Juan Fernandez, vice president of government affairs at CUANM (CUANM Network July). That means three races are up for grabs, with two expected to be very close races, he said. Democrat Martin Heinrich and Republican Darren White are running to replace Rep. Heather Wilson (R-1st District) in Congress. Democrat Tom Udall and Republican Rep. Steve Pearce will run for the seat vacated by Sen. Pete Domenici (R), who is retiring. Democrat Harry Teague and Republican Ed Tinsley are competing for the seat vacated in the 2nd District by Pearce. Pearce was the first New Mexico lawmaker to co-sponsor the Credit Union Regulatory Improvements Act (CURIA) and is a strong credit union supporter. "This political situation provides credit unions with a golden opportunity to shine and to demonstrate that we can have an influence in elections," Fernandez wrote. CUANM is "taking the necessary steps to make the most of this election rarity. We are reaching out to all campaigns, educating them about the issues and challenges that credit unions face, and supporting the most credit union-friendly candidates." Some credit unions in the state are planning to have spotlight events where candidates discuss their agenda with members while others will have voter registration drives, said Fernandez. CUANM is supporting Pearce for Senate, Heinrich in District 1 and Ben Ray Lujan in District 3. It also is talking with the Teague and Tinsley campaigns to educate them about credit unions. The Credit Union Legislative Action Committee (CULAC) is supporting Pearce, Heinrich and Lujan, according to Trey Hawkins, political director at the Credit Union National Association. CULAC has contributed $10,000 to Pearce and $5,000 each to Heinrich and Lujan.

eSchool will show how to analyze other income loans

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MADISON, Wis. (7/28/08)--Credit union lending professionals will learn how to analyze and qualify loan requests from members based on “other” income sources during a CUNA eSchool in September. Using Tax Returns to Qualify a Loan eSchool, Sept. 16-30, will explore how to analyze forms and schedules to verify non-traditional incomes and determine a member’s ability to repay a loan. This eSchool also will teach how to:
* Quickly obtain monthly net or gross income from a borrower's personal income tax return; * Identify the information that borrowers hide and reveal in their own interest when applying for a loan, and how this may affect their borrowing ability; and * Understand the forms involved in non-traditional income situations and obtain the relevant information.
Additional CUNA eSchools beginning in September include:
* The six-session CU Finance for Non-Financial Managers and Volunteers eSchool, which meets Sept. 16-Oct. 21 to help those without a background in finance to better understand their credit union’s numbers. While the main focus is on understanding and analyzing financial statements, students also will come to better understand asset-liability management; budgets; ratios; accounting; and rates, risks, and returns. * The 10-session CU Spanish Certification eSchool, Sept. 17--Nov. 19, which is designed for credit union staff with previous Spanish-language experience. The eSchool advances previous training and teaches vocabulary that is specific to the financial industry. Attendees also will study articles, adjectives, personal and object pronouns, verb conjugation, and proper pronunciation. Students can earn a CU Spanish certification. * The four-session Complete Credit Union Leadership eSchool, Sept. 9-18, which will cover self-awareness as an element of leadership, mastering the art of giving and receiving critical feedback, the keys to creating intended outcomes, and the power of wellness.
For more information, use the links.

Georgia CU Affiliates Consumers still confident in CUs

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DULUTH, Ga. (7/28/08)--Though consumer confidence in the financial services industry is shaky, Georgians have found safety in credit unions, according to Georgia Credit Union Affiliates (GCUA). The percentage of Americans saying that they have a “great deal” of confidence in U.S. banks fell to 32%, according to a June 23 Gallup poll. That figure is down nine percentage points from June 2007 and 17 percentage points from June 2006. About 1.8 million Georgians belong to a credit union, but many more have not discovered the benefits of belonging. “Credit unions might be one of the best kept secrets in financial services,” said Mike Mercer, GCUA president. Mortgages at Georgia credit unions grew by 14.9% for the past 12 months ending in March. Credit unions operate more conservatively and tend to hold more of their mortgage loans--70%--in portfolio rather than sell them to Fannie Mae and Freddie Mac in the secondary market, the league said. The state’s credit unions have a capital cushion of $1.84 billion. Credit union deposits are insured by the National Credit Union Share Insurance Fund up to $100,000.

CUs in several states warn of automated phone scams

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MADISON, Wis. (7/25/08)--Credit unions in at least six states across the U.S. have issued warnings in the past week about ongoing automated telephone phishing scams that attempt to collect personal information for possible identity theft. The Pennsylvania Credit Union Association (PCUA) reported that the Philadelphia area was targeted with an automated telephone message that states it was sent by a credit union's Fraud and Security Department and that the recipient's credit card account has been suspended. The message continues leaving instructions to dial variations of the exchange beginning as 515-414-xxx with the last four numbers constantly changing, PCUA said. Once the number is reached, an automated voice asks for the recipient's card number and PIN (Life is a Highway July 24). The calls have been received by members and nonmembers. Recipients who disclosed their information reported immediate fraudulent transaction activity in Spain and Romania, with significant monetary losses. Hudson Valley FCU, based in Poughkeepsie, N.Y., alerted consumers of a similar phone scam using its name to get people to provide their account numbers and other information. The caller ID is forged and in some cases recipients are asked to call 515-414-1344 where they are asked to provide information (Poughkeepsie Journal July 21). Charter Oak FCU, Groton, Conn., said it was deluged with calls related to a call trying to collect information in its name from people in southeastern Connecticut. It issued an online alert and a phone message at its main number warns callers about the scheme (The Day July 24). Several credit unions in Wisconsin reported similar incidents, where a credit union would be targeted one day and another credit union or bank the next. Bull's Eye CU, Wisconsin Rapids, said residents in Wood and Portage counties began receiving calls this week claiming their credit union accounts are closed. Wisconsin Rapids Police and Stevens Point Police reported similar calls from a "credit union." And a credit union member received two calls pre-recorded messages at her office. A return call to the number on the message resulted in a brief advertisement for an Internet-based phone service, she said (Stevens Point Journal July 16.) Blackhawk Community CU, Janesville, Wis., became aware of a scam targeting Rock County area residents in its name on Tuesday. The credit union received a number of calls from members reporting the message from "Blackhawk Community CU Security Department." The target then shifted to a Michigan-based credit union (The Janesville Gazette July 23). Fox Communities CU, Appleton, Wis., placed a fraud alert on its website after calls began Tuesday night. Again, within hours, the target shifted to another financial institution. Both nonmembers and members received the calls. The credit union reported the phisher's phone number, which has been shut down, was hijacked from a legitimate business. A credit union in Indiana also reported its name was used in a phone spam scam (South Bend Tribune July 23). Earlier, credit unions in Texas and Illinois reported similar scams. All of the credit unions whose names were used emphasized they would not call members to ask for their personal financial information. Many credit unions posted steps on their websites for members and nonmembers to take if they provided information to the phishers.

Suspect surrenders in Bellco CU shootingrobbery

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LITTLETON, Colo. (7/25/08)--A suspect in a shooting and robbery at a Littleton, Colo. branch of Bellco CU turned himself in Wednesday afternoon, said Jefferson County Sheriff's office. Tobias Archuleta, 27, called police from the Southwest Plaza shopping center, where the credit union branch is located. He was arrested without incident, said sheriff's spokesman Jim Shires (Rocky Mountain News and July 24). Police recovered an undisclosed sum of money and a handgun, which Archuleta allegedly used to fire two shots when the robbery began at about 9:15 a.m. Wednesday, according to the media reports. Investigators said the robber entered the building shortly after the credit union opened and fired several rounds from a handgun into the ceiling, then demanded money from a teller. He then stole keys to an employee's minivan and left. About 13 employees and members were in the credit union at the time. No one was injured in the incident (News Now July 24). The $1.646 billion asset Bellco CU is headquartered in Greenwood Village, Colo.

Filene selects 13 members for new i3 Group

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MADISON, Wis. (7/25/08)--The Filene Research Institute selected 13 credit union executives to join the Institute’s i3 (Ideas, Innovation, Implementation) Group, which develops new ideas and innovations for credit unions. Each member will serve a three-year term and participate in semi-annual meetings arranged by Filene. The next meeting will be held Oct. 1-3 in Portland, Ore. “The Filene Research Institute is proud to welcome these creative and energetic professionals as new members of our i3 Group,” said Denise Gabel, Filene’s chief innovation officer. “While some might shy away from even writing the number 13, I think this is exactly what we need. We need to keep taking risks, collaborating, and asking why--or better yet, why not? “These new members will join 39 current i3 members who are working in teams to develop innovative projects ranging from an airport oasis lounge for credit union members, to ideas for products to help encourage members to save more money and make saving as easy--and fun--as spending,” she continued. The group’s most recent ideas are highlighted in the Filene i3 “Key Findings: Blueprints for Innovation,” which details recent projects available for implementation in credit unions. i³ will continue developing ideas and initiatives that: address major issues facing credit unions; identify developments in other financial institutions that can be adopted by credit unions; and provide a forum for cooperation, collaboration, professional development, and industry succession planning. Nearly 75 applications were received from Canada and the U.S. The selection process evaluated innovative aptitude, experience, and other key factors including present position, leadership abilities, motivation, geography, and type of credit union. The new i³ Group members are:
* Jenny Casselman, Greater Nevada CU, Carson City, Nev.; * Jeanne Denton, Nikkei CU, Gardena, Calif.; * Eric Dillon, Common Wealth CU, Alberta, Canada; * Linda Garboczi, AmeriCU, Rome, N.Y.; * Earl Hodgkins, Carter FCU, Springhill, La.; * CJ Meyers, Teachers FCU, Farmingville, N.Y.; * Bob Morgan, NorthCountry FCU, South Burlington, Vt.; * Kelley Parks, Call CU, Richmond, Va.; * Jason Peach, West Community CU, O’Fallon, Mo.; * Jon Reske, UMass Five College FCU, Amherst, Mass.; * Brandon Riechers, Royal CU, Eau Claire, Wis.; * Charles Roberts, State Department FCU, Alexandria, Va.; and * Ginger Salt, Truliant FCU, Winston-Salem, N.C.

Texas CUs OK after Hurricane Dolly

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BROWNSVILLE, Texas (7/25/08)--Texas credit unions remained relatively unscathed in the wake of Hurricane Dolly, which made landfall early Wednesday afternoon near Brownsville. Now downgraded to a tropical storm, Dolly heaped torrential rains on southern Texas and northeastern Mexico Thursday, damaging some buildings and resulting in flooding ( July 24). “We have received feedback from several credit unions in South Texas that were impacted by the hurricane,” Mike Delker, vice president of credit union relations for the Texas Credit Union League, told News Now. “Although there was some minor damage, the majority of it does not seem to be extensive, even though the storm intensified into a category 2 hurricane. “There are reports of some roof damage, minor flooding, and some electrical lines down. Fortunately, the credit unions were very well prepared and appear to have rebounded admirably. It appears that most are open for business today,” he said Thursday. CUNA Mutual Group said Thursday that damage reports from credit unions are minimal so far. “Hurricane Dolly made almost a direct hit on Brownsville and San Padre Island, Texas, but due to its size, it appears we'll see few, if any, losses to credit unions,” Phil Tschudy, CUNA Mutual media relations manager, told News Now. “CUNA Mutual's Property and Casualty Claims staff has contacted the majority of credit unions in the impacted areas, and all report they are fine,” he continued. “However, we are continuing to reach out to those credit unions we've not yet contacted. We are cautiously optimistic we'll see few losses, and that those will be minor in nature.”

Forty graduate at Southwest CUNA Management School

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FARMERS BRANCH, Texas (7/25/08)--Forty Texas credit union professionals have graduated from the Southwest CUNA Management School (SCMS), a three-year course of study recognized in the credit union movement for innovative, intense, hands-on professional development, the Texas Credit Union League (TCUL) announced. Included in the graduating class was Guillermo Aguilar, project manager with the Caja Popular Mexicana (CPM)--the largest credit union in Mexico, based in Leon, Guanajuato (LoneStar Leaguer July 24). TCUL, along with the California Credit Union League, signed a “people to people” agreement with CPM in 2002 through the World Council of Credit Unions (WOCCU) partnership program. When Aguilar was a first-year SCMS student, he was a WOCCU project manager working with CPM. Last year, he became an employee of CPM, focusing on the implementation of ATMs and debit cards. Aguilar attended SCMS through a scholarship from the Texas Credit Union Foundation, and he is the first CPM employee to successfully complete the program. “SCMS is a superb program,” Aguilar said. “It’s given me exposure to credit unions on this side of the border, including trends, practices, challenges and opportunities. Interestingly, I have found that there are, in fact, more similarities than differences between the credit unions in Mexico and in the U.S. “We are all part of the credit union movement, thereby bounded by our mission, and we share in the desire to provide all consumers with access to affordable financial services,” he added. At the graduation ceremony, Christopher Graham, East Texas Professional CU, Longview, and Susan Tisdale, Texas Partners FCU, Killeen, received the Award of Excellence. Honors graduates were:
* Christine Marie Coulon, Texans CU, Richardson; * Carrie M. Martin, Border CU, Del Rio; * Scott Slattery, TDECU, Lake Jackson; and * Loretta Williams, TDECU.

Pennsylvania CUs uptick in deposits tied to market

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HARRISBURG, Pa. (7/25/08)--Credit unions in Pennsylvania reported an increase in deposits, many as a direct result of banking woes, the Pennsylvania Credit Union Association (PCUA) said Thursday. According to an informal poll of the state’s credit unions, credit unions are actually benefiting from the troubled economy, PCUA said (Life is a Highway July 24). In summer, deposits often fluctuate as members relocate and production facilities shut down for vacation, but the state’s credit unions are reporting fewer changes than in previous years. “It appears that the marketplace understands that credit unions are local financial institutions with a strong track record that consumers can trust,” said Jim McCormack, PCUA president/CEO.

Service CU donates 25000 for fuel assistance

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PORTSMOUTH, N.H. (7/25/08)--The ongoing high fuel prices have prompted Service CU to donate $25,000 to help poor New Hampshire families heat their homes this winter. The Portsmouth, N.H.-based credit union made the donation Wednesday to the New Hampshire Fuel Assistance Community Action Agencies. Its donation will be spread across the six state agencies and divided into amounts based on the credit union's membership distribution in the area.
New Hampshire Gov. John Lynch, left, accepts a $25,000 check from Service CU President/CEO Gordon Simmons for the New Hampshire Fuel Assistance Community Action Agencies. The money will go to residents who don't qualify for state fuel aid. (Photo provided by Service CU)
Service CU presented the check to Gov. John Lynch at the statehouse. "It is typical of Service CU to step up. It is a model for other companies to emulate," said the governor. "Service CU is part of the solution. We can all step up and come together to help." The donation was distributed to Rockingham Community Action Inc., $8,500; Southwestern Community Services (Sullivan and Cheshire), $5,500; Southern New Hampshire Services Inc. (Hillsborough), $3,750; Strafford County Community Action, $3,500; Tri-County Community Action (Carroll, Coos and Grafton), $2,250; and Community Action Program Belknap-Merrimack Counties Inc., $1,500. The credit union also is launching its Warm Hearted Savings Program, a special low-cost financing program for fuel pre-buys or payment plans, energy efficient home improvement loans, and scooter and fuel-efficient vehicles loans.

CU System briefs (07/24/2008)

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* DES MOINES, Iowa (7/25/08)--The Iowa Credit Union Foundation has awarded $500 League President's Scholarship Grants to two credit union professionals. Dana Garrett of NW Iowa CU, LeMars, will use the funds to attend the CUNA Financial Management School Part I in Denver, Colo., in August. Deborah Whittie of Village CU, Des Moines, will attend the 2008 Total Immersion Program of the World Council of Credit Unions, spending a week in Mexico with a host family and working at a credit union. The grants help defray the expense of attending a national school, education activity, or certification programs, or conducting a community education project … * BUENA PARK, Calif. (7/25/08)--California Agribusiness CU celebrated its first anniversary by giving a $300 check to each of its non-management staff. "The gesture not only directly helped employees in these turbulent economic times, it also displayed the credit union's financial strength and shows that we continue to value our employees," said President/CEO Adam Debo. The checks were presented the same day that IndyMac Bank opened under management of the Federal Deposit Insurance Corp. Denbo visited each branch and explained the difference in situations between credit unions and IndyMac. The Buena Park-based credit union was formed as a result of a merger, effective July 2, 2007, between California's First FCU, Garden Grove, and Knudsen FCU, in the City of Industry, Calif. … * SALT LAKE CITY (7/25/08)--Mountain America CU was one of seven companies named 'best place to work' in the 500+ employees category by the Utah Department of Workforce Services. Utah Gov. Jon Huntsman Jr. honored the winners at a luncheon earlier this month. This is the fourth time the credit union has been named a best place to work. Nominees were judged on workplace best practices, employee questionnaires, letters from their CEOs explaining their philosophy on workplace excellence and an onsite visit by a review committee … * ALBUQUERQUE, N.M. (7/25/08)--Dana Wildman, former controller of the Credit Union Association of New Mexico (CUANM) died July 11 after a long battle with cancer (CUANM Network July). Wildman joined the league in 1987 and oversaw its transition into the Credit Union Association of New Mexico. In 2006, her illness forced her to leave CUANM. She is survived by her husband and three children …

CUNA provides credit score advice in IIndiaPost.comI

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MADISON, Wis. (7/24/08)--The Credit Union National Association's (CUNA's) expertise has drifted overseas, with a website in India picking up CUNA's advice about credit scores. The report Wednesday in talked about what credit score numbers mean and the misconceptions surrounding credit scores. "More nontraditional types of entities are using credit scores," Jan Garkey, editor with CUNA's center for personal finance, said in the article. While credit ratings and credit scores take on more meaning and importance in everyday life, so do the misunderstandings and misconceptions that surround them, the article said. There's more than one type of credit score, said Garkey. "There are a lot of different scoring models out there," and different creditors add to the confusion by looking at different factors. Many larger financial institutions have their own scoring systems, as do credit bureaus, she said. The article also quoted staff from Experian, a major credit bureau, and Fair Isaac Corp., which pioneered credit scoring and introduced FICO scores.

CU files lawsuit vs. dissidents in conversion attempt

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ODESSA, Texas (7/24/08)--Members of First Basin CU expressed disappointment and outrage at the credit union's lawsuit against six members who opposed its bank conversion plans as well as the National Center for Member Trust and Durham, N.C.-based Self-Help CU. The Odessa, Texas-based First Basin filed the lawsuit July 14 alleging that members of Save First Basin, a conversion opposition group of credit union members, "tortiously" interfered with the its attempts to convert by disseminating false information to other members, the public and the media (Odessa American July 22). The suit says the defendants or "individuals at their discretion" contacted and warned members they would lose their deposits and their accounts would be closed; and that the officers and directors had a conflict of interest and would make money in the conversion. It seeks $600,000 in damages, primarily from the two organizations, and permanent injunction against six members. "We have not been served the papers but are aware of it," said Randy Chambers, board member of the National Center for Member Trust, Wednesday. "It's outrageous that a credit union CEO is attacking its members for engaging in free speech and rights they have under National Credit Union Administration (NCUA) regulations and the U.S. Constitution," Chambers told News Now. "Members have a right and an obligation to determine whether their credit union becomes a bank. This goes beyond the pale." Chambers said the center will "vigorously defend the members. They’ve been given a slingshot to fight with against a bazooka, and the credit union continues to fire bazookas," he added. Danny Armstrong, a school teacher and one of the members named as defendants in the lawsuit, told News Now he was served with papers last week and was "amazed that it's gone this far. "This is our credit union. My institution is suing me for letting people know that what the leadership was doing was not in the best interest of the members," Armstrong said. He noted that the credit union spent about $600,000 in its campaign to encourage members to vote for the conversion. "I'm still a member. I still believe strongly in that credit union. But I feel that in the past five years, it has taken a wrong turn," Armstrong said. He criticized its plans to get more into business lending, saying its directors had "lost sight of what they're there for--for the members." "I'm disappointed it's come to this. As an owner and member, I don't appreciate my assets used against me and wasted." Although he was worried about his family and protecting his assets, he is open to a countersuit. "I'll play it to the bitter end. I'll counterfile," he said. In addition to the two organizations and Armstrong, defendants named in the lawsuit are Letty Ayala-Moreno, Carol Uranga, Sylvia Acosta, Manny Puga and Armando Rodriguez.

Texas CUs batten down as Dolly hits coast

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BROWNSVILLE, Texas (7/24/08)--With the eye of Hurricane Dolly making landfall Wednesday afternoon on South Padre Island, Texas, near Brownsville, some Texas credit unions had battened down the hatches in preparation. The storm contained steady winds of 100 mph with gust reaching 120 mph, according to the National Hurricane Center in a Wednesday afternoon advisory (> July 23). All three credit unions located in Brownsville, Texas--Brownsville City Employees FCU, First Financial Community FCU, and Valley FCU--did not answer their phones when contacted Wednesday morning by News Now, and were assumed closed. The Texas Credit Union League (TCUL) is monitoring the situation and has a Disaster Preparation page on its website to monitor Hurricane Dolly (use the link). The Office of the Comptroller of the Currency issued a proclamation Wednesday allowing national bank offices affected by the hurricane to close at their discretion. Credit unions already are allowed the discretion to close if conditions warrant, according to John McKechnie of the National Credit Union Administration (NCUA). Therefore NCUA had no plans to issue a similar statement, McKechnie said. An advisory issued Tuesday by the Commissioner of the Texas Credit Union Department stated: “In conjunction with Gov. Perry’s proclamation concerning the threat from Hurricane Dolly, the [Texas] Credit Union Department advises Texas state-chartered credit unions with offices in areas that may be affected by this hurricane to take appropriate precautions to safeguard property and personnel. The department notes that state-chartered credit unions in Texas have the authority … to close offices threatened by an emergency if the department is notified as promptly as possible, by any means available.” CUNA Mutual Group also was taking steps on Wednesday to prepare for Dolly’s landfall and aftermath. “We’re always concerned anytime a hurricane strikes land,” Phil Tschudy, media relations manager, CUNA Mutual, told News Now. “While we have not contacted any credit unions at this point, we have activated our disaster team to handle any losses caused by this hurricane. Fortunately, there are a limited number of credit unions in and around the Brownsville area. “Due to the size of this particular storm, we don’t anticipate it will have a large impact on our insureds,” he continued. “Nonetheless, all hurricane-related loses will be handled on a priority basis. Credit unions can report losses by calling our disaster phone line, which is staffed 24/7/365, at 800-637-2676.” The National Credit Union Foundation (NCUF) will check with TCUL and the state credit union foundation in the aftermath of the hurricane to see if any help is needed, Steve Bosack, NCUF deputy director, told News Now. “Generally, state foundations take the lead and assess damages and the impact on members. Then NCUF will contact the state foundations to see what help they need and if we can assist,” Bosack explained.

Shot fired at Bellco CU during robbery no one hurt

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LAKEWOOD, Colo. (7/24/08)--County sheriff's deputies were searching Wednesday afternoon for an armed man who fired off a shot during a robbery at a Littleton, Colo., branch of Bellco CU. No one was hurt, said Grace Stanton, public relations consultant for Bellco CU. Bellco is headquartered in Greenwood Village, Colo. The robbery occurred at the Southwest Plaza in Littleton, she told News Now. The incident was reported via a 911 call from someone inside the credit union. Thirteen people--eight men and five women--were inside the credit union when the robbery occurred at about 9:30 a.m., said a spokeswoman for the Jefferson County Sheriff's office. News reports indicated those inside were forced to the ground (ABC7,, and July 23). Jefferson County Sheriff's Office spokesman Jim Shires said a SWAT officers surrounded the credit union because there were conflicting reports as to whether another gunman remained inside the credit union. Photos on various media sites showed SWAT team members with guns drawn at the site. The robber fled with an undisclosed amount of cash and the keys to an employee's minivan, which was found abandoned later, authorities said. The Littleton branch was closed for the remainder of the day, according to Bellco's website.

PCUA to host statewide call on FOM rulings impact

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HARRISBURG, Pa. (7/24/08)--The Pennsylvania Credit Union Association (PCUA) will host a statewide call-in for its member credit unions to discuss the impact of a recent court ruling related to field-of-membership (FOM) expansions. The call is scheduled for Aug. 5 at 1:30 p.m. EDT. PCUA will provide an update on the litigation and what it means to the three credit unions involved in the lawsuit, as well as its impact to other credit unions. The decision--that the National Credit Union Administration's (NCUA) record was not sufficient to sustain its decision to grant a six-county area community credit union expansion in Pennsylvania--was announced Monday by the U.S. District Court, Middle District of Pennsylvania (News Now July 22). The American Bankers Association and the Pennsylvania Bankers Association filed the suit and argued NCUA acted in an "arbitrary and capricious" manner when it approved the charter request for Members 1st FCU, based in Harrisburg, Pa. The agency decision was used later as a basis to authorize two other charter requests from New Cumberland (Pa.) FCU and from AmeriChoice FCU, Mechanicsburg, Pa. NCUA said Monday it is reviewing its options. It noted the court's decision did not challenge its community charter regulations and affects only the credit unions serving the six-county community in Pennsylvania (News Now July 22).

CU in New Hampshire sues MetaBank over fake CD

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BERLIN, N.H. (7/24/08)--A small New Hampshire credit union has filed a lawsuit against Iowa-based MetaBank, alleging the bank was negligent in allowing an employee to walk off with millions of dollars in a phony certificate of deposit (CD) scheme. Guardian Angel CU, a $39 million asset Berlin-based credit union, alleges in the suit that it deposited $99,000 in April 2005 in exchange for a CD from MetaBank. In January 2008, Guardian Angel learned the CD was a fake. Gerald Dumoulin, CEO of the credit union, confirmed that the lawsuit had been filed in the U.S. District Court of New Hampshire in Concord. However, Dumoulin told News Now that because the litigation is in progress he could not comment on the case or facts involved. According to the lawsuit, the $686 million asset MetaBank had investigated phony CDs after an earlier unspecified complaint. The bank was sued in April by two Texas banks, including The Frost National Bank in Texas. The court records and filings with the Securities and Exchange Commission said a former Metabank employee, Charlene M. Pickhinke, had sold fraudulent CDs to several financial institutions and that $4.2 million was still outstanding (New Hampshire Business Review July 15). Guardian's lawsuit identifies Pickhinke as a supervisory employee and part of the bank's management staff. It says the bank was negligent in hiring her in a supervisory position and in failing to take measures to prevent such a theft. The suit asks that the bank pay back the funds with interest to financial institutions who bought about 50 phony CDs. MetaBank in answer to a complaint filed by the Texas bank said it was unaware of and not a participant of the alleged CD sale and that Pickhinke carried out the scam individually and apart from her work authorized by the bank. It has not filed an answer to the credit union complaint, said the Business Review.

CUs 1.99gal. gas promo draws 2-3 mile line

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WORCESTER, Mass. (7/24/08)--Digital FCU (DCU) ran a promotion with a Worcester, Mass., gas station offering $1.99 per gallon gasoline Tuesday that resulted in hundreds of people showing up in their cars, causing lines stretching for miles.
Digital FCU team member Janice Hannigan (left) assists one of the 800 patrons who took advantage of the credit union's $1.99 per gallon gas promotion held at a Gulf station in Worcester, Mass., Tuesday. (Photo provided by Digital FCU)
The $3.9 billion asset, Marlborough, Mass.-based credit union was looking at various advertising opportunities when it decided that helping consumers with high gas prices would be the best way to thank area members for their business and also make a big publicity impact for the credit union. “Every media entity that we pitched this to picked it up,” John LaHair, DCU public relations manager, told News Now. “We really hit one out of the ball park this time.” Seven local TV stations and one national affiliate (CBS news) picked up the story. Also two area newspapers, two local radio stations and a couple of online news services had covered the story as of press time. About 800 vehicles showed up at the gas station for the promotion. At one time, the line was about two to three miles long, LaHair said. The regular price of a gallon of gas was going at $3.97 per gallon. The promotion began at 7 a.m.--with cars starting to lineup at 5 a.m.--and gas was pumped until 1:45 p.m. Overall, 7,429 gallons of gas were sold at the discounted price. DCU paid the Gulf station more than $14,000 to make up the balance. The promotion was two-fold: to thank the Worcester community for embracing DCU’s two branches, and to try something different, LaHair said. “From the credit union perspective, it’s the philosophy of us putting our members first,” he said. “When the opportunity presented itself, we realized we could have a one-on-one connection with members, non-members and potential members. It was a captive audience. When people wait one to two hours in line for gas, we can tell the DCU story and be able to show we understand what people are going through. “It’s an opportunity to educate once you get their attention. So we can talk about the products and services we offer and make a difference in people’s lives. We will look at similar strategies in other communities, because this time everything came together--the people, the media and the credit union itself,” LaHair added.

ATM security camera photo in robbery prompts lawsuit

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ORLANDO, Fla. (7/24/08)--A lawsuit filed Friday against an Orlando-based credit union has prompted the credit union to require more specific information from police when they request access to its security camera surveillance videotapes. Larry Tobin, president/CEO of Fairwinds FCU, said he has not yet received a copy of the lawsuit filed Friday by a member, Joyce Treutel, whose suit claims an invasion of privacy. The credit union gave police separate photos of Treutel and a man using an ATM at a branch. The police gave local media the photos and incorrectly linked them as "persons of interest" in an investigation of an ATM card theft. The photo and incorrect information were broadcast on local news. Treutel and the man were interrogated by the police but they had nothing to do with the theft. "Police requested an ATM film for a specific period of time, but they gave us no other information," Tobin told News Now. "We provided it, and the police, based on that tape, posted two photos on the news and said that they were 'people of interest.'" However, "the clock on the ATM was out of sync, and they were not the right people at the right time," he said. "Had the police given us more information, we could have pinpointed the correct people at the ATM," he said. Finding the correct people in such a time frame is challenging, he said, adding that "three or four people can use an ATM within a one-minute period." As a result of the error, "we are requiring police to provide details about what they are looking for" in addition to the time frame. The credit union likely could request a court order and is exploring its legal options, but "we'd certainly want to cooperate with authorities needing the information," he said. The second person photographed did not sue, but claimed damages, which the credit union settled, Tobin said. The credit union apologized publicly for When asked if the credit union would pursue claims against police or the media, Tobin said that would be up to its insurer.

CU System brief (07/23/2008)

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* ALBANY, N.Y. (7/24/08)--J. Raymond Curtin, former co-president/CEO of Empower FCU, Syracuse, N.Y. died Monday, according to the Credit Union Association of New York. Curtin served in the financial services industry for 30 years. He held positions at OnBank, Merchants Bank, Agway and Price Waterhouse before joining the credit union industry as president/CEO of Empire FCU. Curtin was also a professor of finance at SUNY Oswego. He served as chapter president and council member of the association, chaired its education committee and received its Educator of the Year Award in 2003. He assisted in the merger that created Empower FCU, which has more than $640 million in assets, and served as the new credit union's co-president and CEO until his retirement in December 2007. Curtin is survived by his wife, Pat; a daughter; two sons; and five siblings. Memorial donations may be sent to United Way of Central New York, P.O. Box 2129, Syracuse, NY 13220 …

CUs remain healthy say leagues

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MADISON, Wis. (7/23/08)--Credit unions and credit union leagues nationwide are continuing to spread the message that credit unions are healthy despite an economic downturn. On Monday, Kansas Credit Union Association staff met to address ways to offset the rising concern on behalf of members about the safety and soundness of credit unions, Ashley Bridgeman, communications specialist, told News Now. The association will offer a free webinar to educate credit unions on talking with their members about the soundness of their credit union and more specifically, the National Credit Union Administration’s (NCUA) Share Insurance Fund. The association also will continue public relations efforts to educate members and nonmembers about the credit union difference and the safety of members’ deposits. “In addition, we are going to initiate a conference with the members of KCUA’s Member Growth and Profitability Task Force to accurately gauge the situation and develop additional tactics to not only help credit unions communicate with their members, but also provide support for credit union operations during this time as well,” Bridgeman added. Georgia Credit Union Affiliates (GCUA) built a new web page on its league website with resources to assist Georgia credit unions, the media and general public, Anita Paul, GCUA director of communications, told News Now. Washington State Employers CU, Olympia, Wash., spoke with the Seattle Post-Intelligencer about the safety of credit unions. Ann Flannigan, spokesperson for the credit union, told the newspaper that its members’ funds are insured by the National Credit Union Administration up to $100,000. The Credit Union League of Connecticut released information in which President/CEO Anthony L. Emerson guaranteed that the state’s credit unions will “remain safe during changes in the economy and credit markets.” The league noted that credit unions’ structure, which is different from other financial institutions, is the cornerstone of why credit unions remain healthy.

Study Gens X Y more likely to switch PFIs

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ST. LOUIS (7/23/08)--Generation X and Y may be the future of retail banking, but they are the most likely to switch primary financial institutions (PFIs) because of fees or poor service, according to a poll by Maritz Inc. That means credit unions and banks will be working harder to attract and keep these groups. Maritz, a marketing services company based in St. Louis, surveyed 1,008 people and found that 53% of those in Gen X (30-42 years old) and 61% of Gen Y (18-29 years old) had either changed their PFI or considered doing so in the past two years. That compares with 20% of the Silent Generation and 37% of Baby Boomers surveyed. "The current customer experience model at banks caters to the Silent Generation and the Boomers, who more frequently bank in person at branches," said Thad Peterson, division vice president, sector strategy and solutions of Maritz's financial services sector. "But younger generation customers are much more mobile and rely more heavily on online interactions," he said. Financial institutions' "most unstable relationships exist with younger customers, because younger people often haven't settled into a stable financial pattern yet," he said. Institutions hoping to build long-term relationships with Gen Y and Gen X need to think about three basic steps, Peterson said:
* Attracting Gen Y and Gen X as customers/members in the first place. Locational convenience has been the primary tool for attracting new members/customers. That's still the case with the younger generations, but their definition of "locational convenience" is changing. Now it includes online and mobile transactions, and they expect anytime anywhere banking. Banks (and credit unions) need a strategy to attract and retain prospective customers who rarely step into a banking office, he said. * Identifying and offering products that give young people "roots" at the bank or credit union. Example: provide incentives for online bill paying services and debit rewards programs. * Treating the younger generations the way they want to be treated. Ensure that their member/customer experience is appropriate for Gen X and Gen Y, and consistent at all major banking touch points.
The survey indicates that young people can be more impatient, less tolerant and harder to please than their cohorts in the older generations. It also found that younger customers are more likely than older customers to find fault or have problems with their primary financial institutions. For example:
* 37% of Gen Y and 36% of Gen X believe they would get better customer service at a different bank; * 22% of Gen Y and 21% of Gen X reported being upset in the past year about high fees, compared with 14% of Boomer and 6% of Silent Generation respondents; and * 18% of Gen Y and 17% of Gen X reported being upset about a lack of ATM locations, compared with 11% of Boomers and 3% of the Silent Generation.
So how does a credit union reach Gen X and Y members? Businesses are beginning to reach out via social media such as Facebook, but Peterson warns against relying too heavily on social media to initially reach these groups. "Using Facebook to attract new customers is like standing in a corner passing out business cards at a cocktail party," Peterson says. "If you don't have a genuine relationship with them, all you are going to accomplish is to diminish the value of your brand to that individual." He suggests that financial institutions:
* Be the source or their primary debit card--Gen X and Y comprise the debit card generation; * Highly "incent" them to migrate to online banking with a significant reward for paying bills online; * Make sure front-line employees are treating Gen X and Y the way they want to be treated and can solve problems on the spot--a key to securing lifelong patrons; and * Stay in tune with how younger customers want to connect--online banking, bill pay and mobile banking are three touchpoints that must be state-of-the-art and part of the overall customer experience.

CU System briefs (07/22/2008)

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* NEWPORT NEWS, Va. (7/23/08)--The U.S. Attorney's Office in Newport News will seek the death penalty if David Anthony Runyon is found guilty in the for-hire murder of Navy Ensign Cory Allen Voss outside Langley FCU. Voss was shot to death by an ATM on April 20, 2007. Runyon is accused of plotting the murder for $20,000. Catherina Rose Voss, the victim's wife, Friday pleaded guilty to five counts, including conspiracy to commit murder for hire. She is accused of conspiring with her lover, Michael Anthony Eric Draven, to hire Runyon to kill Voss for $20,000. Draven faces life in prison. Voss, in an agreement that must be approved by the judge, would be sentenced to life in prison (Daily Press July 22) … * DES MOINES, Iowa (7/23/08)--The Iowa Jump$tart Coalition named Mary Dahlby, right, family and consumer science teacher at Urbandale Community School District, the 2008 Financial Educator of the Year. The award was provided by the Iowa Credit Union Foundation. Marybeth Foster, left, foundation executive director, presented the award to Dahlby during the annual Jump$tart Coalition Personal Financial Literacy Conference July 17-18. Dahlby spends more than half of her teaching time on financial concepts. She uses the National Endowment for Financial Education materials as the basis of lectures. One of her lessons, “Who Wants to Be a Millionaire,” teaches high school seniors the time value of money. The Iowa Jump$tart Coalition is a partnership of organizations dedicated to improving the financial literacy of Iowa youth ... * RALEIGH, N.C. (7/23/08)--State Employees CU (SECU) was recognized by the North Carolina Board of Education and the North Carolina Department of Public Instruction (DPI) for collaborating with DPI to improve personal financial literacy education in North Carolina’s public schools, according to SECU. SECU, a long-time promoter of the National Endowment for Financial Educations (NEFE) High School Financial Planning Program, partnered with DPI in 2007-2008 to provide NEFE training to the state’s high school civics and economics teachers. With the State Board of Education's approval of the NEFE curriculum, teachers can now incorporate the material into their courses to meet the North Carolina House Bill 1473 mandate for personal financial literacy in the classroom … * OTTAWA, Ill. (7/23/08)--Garnering inspiration from Oprah’s "Big Give" TV show, Financial Plus CU, Ottawa, Ill., has raised $34,781 for local individuals in need, as part of it own “Big Give" fundraiser, according to the Illinois Credit Union League. Each branch and department was given $100 at a recent staff meeting and told to make the money grow and find ways to give back to people and organizations in the community within 30 days. In all, 65 employees participated and grew the seed money through a number of raffles of goods and baskets, a bake sale, a car wash, cleaning windshields at the credit union’s drive-up facility, and guest bartending and waitressing at various establishments … * CHARLOTTE, N.C. (7/23/08)--Two men from Rock Hill were sentenced for plotting to detonate two pipe bombs at a Charlotte school to occupy police while they robbed Founders FCU in Charlotte. William Christopher Puckett, 19, was sentenced to seven years and eight months in prison, and Edgar Scott Williams IV, 19, received six years and eight months in prison, said a press release from the U.S Attorney's office (Rock Hill Herald and Charlotte Observer July 22). The two pleaded guilty and testified against two other co-defendants, Timothy and Steven Eddington. On the morning of the planned robbery, a Crime Stoppers tip led to the men who were sleeping in an abandoned house. Two pipe bombs were found in the house … * APPLETON, Wis. (7/23/08)--Thomas John Maday, former Wisconsin Commissioner of Credit Unions died Friday at an Appleton hospital. He was 60. Maday served as commissioner under Gov. Tommy Thompson. Services were held Tuesday in Fond du Lac, Wis. ( July 20) …

Official lauds CUs help for state workers in budget limbo

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SACRAMENTO, Calif. (7/23/08)--The Golden 1 CU was thanked by a California official for spearheading a loan program to help state government workers, who are going without paychecks while waiting for the state’s budget to be adopted. June 15 was the last payday not only for California politicians, but also for committee secretaries, security guards, legislative aides and vendors. They are waiting for an overdue budget to be approved by the state legislature and signed by Gov. Arnold Schwarzenegger (Ventura County Star July 22). The Golden 1, a $6.586 billion asset, Sacramento-based credit union, is one of three financial institutions--Wells Fargo and Bank of America are the other two--that provide loans to state legislative staff almost every July when budgets need to be renewed. Usually loans are issued with 0% interest. To qualify, borrowers must have direct deposit on their accounts. The Golden 1 was “the harbinger of the loan program,” according to Tony Beard Jr., California Senate sergeant-at-arms. He said he wanted to be the first to thank the credit union for its service to members of the state legislative staff over the past years. Almost every year, California, like many states, has to operate when one year’s budget expires and the next year’s has yet to be approved. California credit unions have a history of helping people through state budget limbos. In years past, Schools Financial CU, a $1.131 billion asset, Sacramento-based credit union, has offered zero-interest loans to state workers needing financial assistance during a budget impasse (News Now July 5, 2005). Years ago, while mired in a budget crisis, Arrowhead CU, a $1.064 billion asset, San Bernardino, Calif.-based credit union, allowed public nonprofit agencies to borrow up to a $100,000 from Arrowhead to continue operations until the state budget was adopted (News Now July 17, 2003).

CUNA shares ways to protect deposits with IWall St. JournalI

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NEW YORK (7/23/08)--The Credit Union National Association (CUNA) shared some ways to protect consumer deposits at financial institutions in a Monday article in The Wall Street Journal. To make sure that credit union or bank balances greater than $100,000 are protected, the easiest move for consumers is to open a joint account, which is insured up to $200,000, Kathleen Thompson, CUNA senior vice president of compliance, told the newspaper. Additional accounts could protect even more assets, she added. Thompson told the paper that a joint account she has with her husband is insured for up to $200,000, but adding her son to her account would result in another $100,000 under deposit insurance protection, for a total coverage amount of $300,000. While the Federal Deposit Insurance Corp. guarantees bank deposits, the National Credit Union Administration provides the same protection to credit union deposits [through the National Credit Union Share Insurance Fund], the paper mentioned.

CO-OP Financial Services hits 1 million CMN goal

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RANCHO CUCAMONGA, Calif. (7/23/08)--Due to the success of two programs, CO-OP Financial Services has already reached its annual goal of $1 million in donations to Children’s Miracle Network’s (CMN) “Credit Unions for Kids” program. CMN is a non-profit organization dedicated to saving and improving the lives of children by raising funds for children’s hospitals.
Employees of the Alabama Teachers CU, Gadsden, Ala., and Alabama Credit Union League enjoy a casino night fundraiser to benefit Children’s Miracle Network. The event, which raised more than $5,700, was part of CO-OP Financial Services' “Miracle Match” program. From left: Gina Turner, Alabama Teachers CU, and league employees Teresa Gary, director of administration and executive assistant to the CEO; Janice Jordan, director, financial services; and Larry Rodriguez, vice president, financial services. (Photo provided by CO-OP Financial Services)
The first campaign, “Miracle Match,” introduced to CO-OP members six months ago, strove to match credit union contributions at the local level, thereby expanding the money that members already donate and stimulating new credit union giving for CMN. Seventy-one credit unions participated and raised a matched total of $500,000 in record time through community-focused events ranging from balloon sales to golf tournaments. “Champions Across America” is CO-OP’s second fund-raising campaign for CMN. The program chooses a child who has been treated at a CMN hospital from each state as a champion to raise awareness of the work of children’s hospitals. Champions also travel nationwide to spread the message of better care at CMN-supported hospitals. This spring, champions traveled to Walt Disney World for the annual Children’s Miracle Network Celebration, followed by a visit with President Bush at the White House.

DFCU Financial CapCom CUs to merge

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DEARBORN, Mich. (7/23/08)--Two Michigan-based credit unions--Dearborn-based DFCU Financial FCU and Lansing-based CapCom CU--Monday filed an application with the state Office of Financial & Insurance Regulation and the National Credit Union Administration to merge the two credit unions. The new combined organization will assume the DFCU Financial CU name and retain CapCom CU's state charter. The credit union will have $2.2 billion in assets--the largest credit union in Michigan and one of the largest in the nation. It will serve more than 200,000 members with 21 full-service branches and about 500 employees. According to a press release, the new credit union will benefit from geographic market diversification with branches located from Detroit to Grand Rapids; expanded products and services; continued commitment to community initiatives; increased membership growth opportunities; greater operating economies of scale; and proven financial strength, leadership and operating performance. The new credit union's board will consist of the board of directors of both credit unions. The management team will be led by current DFCU Financial President/CEO Mark Shobe and current CapCom President/CEO Renee DeMarco, who will assume responsibility for DFCU Financial’s western Michigan presence as regional president. The credit union does not expect to eliminate any positions as a result of this merger.

Palisades FCU Members can skip summer loan payments

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PEARL RIVER, N.Y. (7/23/08)--Palisades FCU announced that its members can skip their July and August loan payments through its “Take the summer off” loan program. All members in good standing can skip paying their next two loan payments by having only the interest accrue on their accounts, the credit union said. “The extra money will help me cover the increase in energy costs this summer,” said member Alfred Soto in the credit union’s press release. Higher inflation and slower wage growth has led to falling real hourly and weekly earnings for workers in the area. The shift in buying power of workers’ paychecks is forcing families to cut back this summer, the credit union said. Through the program “we are fulfilling our promise to fit into our members’ lives, not the other way around,” said Mark Welshoff, Palisades president/CEO. Palisades FCU, headquartered in Pearl River, N.Y., has more than $147 million in assets.

CU in Texas ends disbursement of loose change

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HOUSTON (7/23/08)--Is it possible to be progressive--without making change? The newest branch of People’s Trust FCU in Houston would say yes. The branch, which opened in May, doesn’t give out loose change to its members. Instead, the credit union places the change into members’ accounts, or gives them the option of contributing the money toward charity through the credit union’s foundation. So far, two members have chosen give their money to the foundation. “We’ve gotten very positive feedback,” Vernon Babilon, executive vice president and chief financial officer, told News Now. People’s Trust decided to go coinless to encourage member savings. “It’s an easy way to get them started,” Babilon said. “When we gave members change, they didn’t count it.” Going coinless is also safer. Without coins, tellers at the credit union don’t need cash drawers, which can attract robbers. Instead, they use bill dispensers. “It’s better for the members, and it’s safer for the members and the tellers,” Babilon said. Though the tellers don’t give back coins, the branch offers a cash machine for members’ loose change, and has rolled coins available, Babilon said. The branch has a nontraditional teller layout. Members are greeted when they walk in the door and can use one of four dialog stations. The four tellers share two bill dispensers. So far, the new Houston branch is the only one of seven that is going coinless. “We hope in the future other branches will follow suit,” Babilon said. The branch also is the only coinless branch in the area, and has generated interest from local financial institutions. The chief financial officer at a Dallas bank recently called Babilon because he liked the idea, Babilon said. Even if the idea of “going coinless” catches on, Babilon doesn’t expect a cashless society. “There’s too much of a need,” he said. “There are always walks of life [that need cash].” People’s Trust has $288 million in assets.

Wisconsin revenue dept. thanks CUs for free tax prep

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MADISON, Wis. (7/23/08)--The Wisconsin Department of Revenue thanked Wisconsin credit unions at a meeting July 18 for participating in the state’s Free Tax Preparation Assistance program.
Brett Thompson (left), president/CEO of the Wisconsin Credit Union League, discussed the future of the state’s Free Tax Preparation Assistance program last week with Roger Ervin, secretary of the Wisconsin Department of Revenue. (Photo provided by the Wisconsin Credit Union League)
Roger Ervin, state revenue secretary, stressed the importance of the program, which is geared to preventing low-income tax filers from becoming victimized by predatory “refund anticipation loans.” The program offers free tax preparation assistance, according to the Wisconsin Credit Union League website. More Wisconsin credit unions need to get involved to help expand the program and to promote more electronic tax filings in the next tax season, Ervin added. Credit unions wanting to get involved in the program can make use of grants made available by the Internal Revenue Service (IRS). The grants are a component of an $8 million, one-year initiative created to extend the program, not only to the underserved population, but also to hard-to-reach areas--both urban and rural. This year, 60,190 people filed tax returns at 231 free tax preparation sites in Wisconsin. The sites were operated in conjunction with the IRS, Wisconsin Department of Revenue and the AARP. With the average cost of fees paid to a tax preparer offering refund anticipation loans at $276, Wisconsin filers saved about of $16.5 million through the free tax preparation assistance, the league said.

Hannaford data breach lawyers meet with judge

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PORTLAND, Maine (7/23/08)--More than 20 attorneys from throughout the U.S. met Monday at a U.S. District Court in Maine, for the first conference in a class-action lawsuit filed against grocery chain Hannaford Bros., which was the target of a data breach earlier this year. The data breach affected store customers, including credit union members, in New England, New York and Florida. It prompted credit unions and other credit and debit card issuers to reissue cards compromised by the data theft, which occurred while store customers swiped their cards to pay for groceries (News Now March 19). Two groups competing to become the lead counsel in the lawsuit argued their positions before U.S. District Judge D. Brock Hornby Monday. More than nine lawsuits were filed, but the court consolidated the cases in April (News Now April 17). Judge Hornby heard the arguments and said he will issue an order designating a lead counsel and establishing a case schedule case this week (Boston Globe and Portland Press Herald July 21). The two groups are competing to lead what is one of the largest data breach lawsuits in history. The first group is Portland-based Murray, Plumb & Murray, and Lewis Saul & Associates, based in Portland and New York City. The other group is Ben Barnow of Chicago-based Barnow & Associates; Lance Harke of Miami-based Harke & Clasby in Miami; Sherrie Savett of Philadelphia-based Berger & Montague; and Thomas Shapiro of Boston-based Shapiro Haber & Umy. The Scarborough, Maine-based Hannaford Bros. said the breach resulted in the exposure of 4.2 million credit and debit card numbers to potential fraud (Times Herald-Record April 16). The breach occurred between Dec. 7, 2007, and March 10. It was discovered Feb. 27, and the breach was made public March 17. The breach affected about 300 grocery stores in the Hannaford Bros. and Florida's Sweetbay chains, plus a number of independent grocers.

CU System briefs (07/21/2008)

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* WAYNESBORO, Va. (7/22/08)--Slade A. Woodson, 19, pleaded guilty Monday in a Waynesboro, Va. Circuit Court to six felony charges stemming from a March 27 shooting spree along Interstate 64, at DuPont Community CU in Waynesboro, and at a home. No one was in the credit union at the time; the incidents occurred late at night. The interstate shootings slightly injured two motorists and closed an 11-mile stretch of the highway. Video surveillance at the credit union helped identify Woodson's 1974 Gremlin. Bullets from a .22-caliber rifle struck the credit union's sign, an office window and a repossessed van in the parking lot. Woodson pleaded guilty to felony destruction of property, three counts of discharging a firearm from a vehicle and two counts of firing into an occupied dwelling. He still faces 15 felony charges in Albemarle County for the I-64 shootings. In May, a judge recommended that a 16-year-old accomplice service 12 to 18 months for his role ( July 14) … * OLYMPIA, Wash. (7/22/08)--Washington State's Department of Financial Institutions has set a hearing from 10 a.m. to noon PT Aug. 27 about its proposed rule that would increase credit union assessments and fee rates. The increases would be in accordance with a "fiscal growth chapter" in its regulations. The proposed rule also would make technical changes. The regulation for safety and soundness of state-chartered credit unions is supported by the industry fees and assessments instead of the state's general fund. DFI says the last increase was in 2002. (RegAlert July 16) … * HARRISBURG, Pa. (7/22/08)--Raymond R. Barber, former director of the Pennsylvania Credit Union Association, died July 19 in Erie, Pa. (Life is a Highway July 21). Barber, 90, served on the board for nearly 30 years. He retired from Continental Rubber Works in Erie after 44 years, and served as treasurer of Rubber Employees FCU. He was an active member of the Erie chapter and served on its board for more than 20 years. He is survived by one son, one grandson, and one great-grandson. A mass will be held today at 10 a.m. ET at Holy Rosary Church …

More leagues join CUNA to reassure members of soundness

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MADISON, Wis. (7/22/08)--Several more credit union leagues have joined the Credit Union National Association (CUNA) and credit unions in reassuring credit union members that their deposits are safe. The Indiana Credit Union League has released a statement with information about credit unions’ safety, including facts about Indiana credit unions. John McKenzie, league president, also sent letters to credit union CEOs with background on the safety and soundness issue, Kay Neidlinger, vice president of league communications, told News Now. The Credit Union Associations of Colorado and Wyoming sent memos to its credit unions about the issue. It is offering two free webinar sessions on National Credit Union Administration Share Insurance Thursday and on July 30. The hour-long sessions will provide information on share insurance rules and teach attendees how to calculate coverage on member accounts. The association also sent a media alert with background information on the states’ credit unions and their capital. Overall, Colorado and Wyoming credit unions are well-capitalized which means they are able to weather problems caused by the current economic crisis, the association said. Sample newsletter articles and talking points also were produced and sent to local media, the association said. CUNA President/CEO Dan Mica Monday sent out an update with information on how it is spreading the word on credit unions’ safety and soundness. CUNA has contacted national media outlets, such as CNN, USA Today and Fox Business Network and sent letters to members of Congress. It also sent out talking points and resources for credit unions to use when reassuring their members and communicating with local media. CUNA’s NewsWatch also is putting together a special edition highlighting the safety and soundness of credit unions.

Mich. OFIR clarifies single premium debt cancellations

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NORTHVILLE TOWNSHIP, Mich. (7/22/08)--Michigan's Office of Financial and Insurance Regulation (OFIR) has clarified its position on debt cancellation contracts (DCC) offered by the state's credit unions and other depository institutions. The Michigan Credit Union League, working with CUNA Mutual Group, had requested that OFIR clarify its 2004 declaratory ruling, which authorized depository institutions to use the contracts and debt suspension agreements without being subject to the Insurance Code. (Michigan Monitor July 21). In the ruling, OFIR said if depositories complied with an Office of the Comptroller of the Currency regulation on the subject, OFIR would consider them operating in a safe and sound manner. It also said that unless a periodic premium payment plan also was offered, the depository could not offer a single or lump sum premium plan. The new bulletin, issued July 11, supersedes the first ruling. "The commissioner has concluded that state-chartered depository institutions do not have to offer a customer the option of paying the fee for a DCC in monthly or other periodic payments when the product is what is commonly known as GAP ('guaranteed auto' or 'guaranteed asset' protection) coverage or waiver," the new bulletin said. The position is similar to that taken by a small but growing number of states, said the league.

Economy boosts surcharge-free ATM networks

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CHICAGO (7/22/08)--An ATM industry publication says the U.S. economic downturn is boosting business at surcharge-free ATM networks while cost-conscious consumers look for ways to cut costs. Community banks and credit unions are joining the four largest surcharge-free ATM networks--Allpoint, Credit Union 24, CO-OP Network and MoneyPass--to help depositors and reduce credit union members' fees during challenging economic times, reported ATM & Debit News (July 17). In the past few months, surcharge-free ATM networks announced several new deals, all resulting in growth. The largest is a 2.5 year contract between Tallahassee, Fla.-based Credit Union 24 and Bethesda, Md.-based Allpoint. The agreement means the "CU Here Premium" network will have 50,000 ATMs nationwide. Minneapolis-based MoneyPass, which has 13,000 ATMs and has added 100 financial institutions since January, also belongs to CU Here Premium, said the article. CO-OP Network, based in Rancho Cucamonga, recently announced that 111 credit unions--with more than 500 ATMs--had joined the network during the first half of the year. Jim Gowan, Credit Union 24 executive vice president and chief operating officer, told the publication that the networks help credit unions and community banks having fewer ATMs individually compete on a national scale against banks with thousands of ATMs. The networks emphasize their surcharge-free withdrawals, and CO-OP also stresses locations of ATMs for members' convenience, said James A. Hanisch, CO-OP executive vice president of development. Its network has 25,000 machines with 9,000 accepting deposits. Consumers' need to save money means that credit union membership is a viable, needed alternative to other financial institutions, said Jim Park, Credit Union 24 president/CEO. MoneyPass President Doug Miraglia noted that financial institutions are responding to their cost-conscious customers' demand that they get access to surcharge-free transactions. Banks typically charge nonblank customers surcharge fees averaging $1.78 per withdrawal, said Both the ATM owner bank and the consumer's bank charge a surcharge, meaning a cash withdrawal may cost more than $3 in fees per transaction.

Newspaper Arkansas CUs strong despite economy

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FORT SMITH, Ark. (7/22/08)--Despite a slow economy and problems in the financial markets, Arkansas credit unions are going strong, according to an Arkansas newspaper. As of March 31, about 26,000 members at seven credit unions in Fort Smith, Ark., have deposits totaling roughly $112 million (Times Record July 20). Although credit unions operate like banks, they have different goals, Katye Long, public relations specialist with the Credit Union National Association (CUNA), told the newspaper. “One of the big differences is that [credit unions] are not-for-profit cooperatives, which means that they’re existing to serve their members rather than make a profit like a lot of financial institutions,” Long said. Members of Fort Smith Dixie Cup FCU, located on the grounds of the Dixie manufacturing company, have a sense of responsibility not only with their money but with that of their co-workers because the credit union is close to the company, Vickie Newton, manager/CEO of the $11.2 million asset credit union, told the paper. Delinquencies at the credit union are less than 1%, Newton said, adding that the low delinquency rate stems from members realizing that it is their money at the credit union--not someone else’s--and that they are working together to build financial security. Credit union members in Arkansas received $27.09 million in direct financial benefits in 2007--equivalent to $94 per member, CUNA statistics reveal. In the face of economic trouble, such as the U.S. mortgage crisis, Arkansas Best FCU, an $87.4 million asset credit union, has seen minimal change in its financial status the past six to 12 months--with the exception of higher loan losses experienced by most credit unions, Norma Mears, president/CEO of the credit union, said. Because credit unions in the Fort Smith area don’t necessarily provide mortgages, they haven’t been affected by the subprime mess that has hit many banks, Newton said. Area credit unions also have benefited from the fact that banks have had to raise their rates to offset losses in the subprime mortgage area, Newton added.

CUs are exempt from Michigans new gift card law

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NORTHVILLE TOWNSHIP, Mich. (7/22/08)--Credit unions are exempt from a new gift card legislation signed into law July 10 by Gov. Jennifer Granholm, says the Michigan Credit Union League. House Bill 4680, introduced by State Rep. Michael Sak (D-Grand Rapids), is now Public Act 209 of 2008. It prohibits retailers from assessing inactivity fees against gift cards or gift certificates (Michigan Monitor July 21). It also establishes a minimum five-year expiration period from the date of issue on the gift card. Financial institutions that use multi-use gift cards, including credit unions, are exempt, said the league.

NBC News Consider a CU in search for bank

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NEW YORK (7/22/08)--Consumers should not rule out credit unions when looking for a place to bank, according to a financial editor appearing on the NBC News show “Sunday Today.” Stephanie Auwerter, editor of, discussed the economy, the failure of IndyMac Bank in California, and banking issues during the show. When Auwerter was asked if consumers are better off with bigger banks as opposed to smaller banks, she responded: “When you’re looking for a bank, don’t discount the small guys and your local credit union. You might find that the fees are lower and their interest rates are higher. They may be willing to work a little harder to get your dollars.”

Survey Small CUs look internally for new CEO

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MADISON, Wis. (7/22/08)--When replacing a credit union CEO, small credit unions are more likely than credit unions overall to give internal applicants first preference, according to the latest Credit Union National Association (CUNA) salary survey. About 48% of credit unions with $1 million to $35 million in assets give internal applicants first preference, according to the 2008-2009 Small Credit Union Staff Salary Survey, published by CUNA’s center for research and advice.
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An additional 40% of small credit unions post the job both externally and internally, while only 9% give external applicants first preference, the survey said. Credit unions overall are about evenly split between giving internal applicants first preference and posting the job externally and internally at the same time. “At a time when more and more companies are looking externally to replace their CEO, small credit unions may have an edge in recruiting candidates who are looking to eventually advance into leadership roles,” said Beth Soltis, senior research analyst for CUNA’s center for research and advice. In addition to base salaries and ranges, the report details the average incentives, bonuses, total cash compensation and job descriptions for the 24 full-time positions most commonly found in small credit unions, along with hourly wage and variable pay data for eight part-time positions. The small credit union report has a narrower asset category breakdown than the full salary report. It also displays results by region, number of full-time employees, number of services offered, number of members, number of branch offices, and the total amount of loans outstanding. For more information, use the link.

Mortgage study attracts legislators media

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ST. LOUIS, Mo. (7/22/08)--Fifty credit union representatives, legislators, consumers and the media learned about the mortgage crisis at a series of statewide meetings held by the Missouri Credit Union Association.
From left: Suzie Sifuentes, Burlington Northtown Community CU; State Rep. Jerry Nolte (R-33); and Dr. Nancy Pierce discuss the subprime mortgage situation in Kansas City. (Photos provided by the Missouri Credit Union Association)
Judy Hadsall, CU Community CU CEO, was interviewed by KSMU reporter Benjamin Fry in Springfield one of several statewide meetings hosted by the Missouri Credit Union Association.
The meetings, held July 8, 10 and 11 in St. Louis, Springfield and Kansas City, were based on a study the association commissioned, “The Subprime Mortgage Impact on Missouri Consumers” (CourierNet July 16). Dr. Nancy Pierce, study co-author, outlined how the crisis developed and its effect on consumers. “It’s not just the subprime loans that created this situation,” she said. “It’s all the greed that went along with it, including the greed of the homeowners who bought homes they could not afford.” “It’s frustrating as a lender that consumers don’t come looking for help when they get into trouble,” added Judy Hadsall, CU Community CU CEO, Springfield. “It they would come to us sooner, there’s a better opportunity for credit unions to help. It’s just really so sad.” The study suggests that credit unions:
* Provide members and the community with foreclosure avoidance education; * Conduct community presentations on foreclosure avoidance/refinancing; * Participate in the Credit Union National Association Home Loan Payment Relief program; * Include messages in marketing efforts about loan evaluation options and help; and * Develop a credit damage control plan for members facing delinquencies with other loans as a result of mortgage problems.
Lawmakers attending the meetings include: State Reps. Charlie Denison (R-135), Mike Cunningham (R-145), Jerry Nolte (R-33), Jeff Roorda (D-102), Shane Schoeller (R-139), Pat Yaeger (D-96) and Jill Schupp, Democratic District 82 candidate.

Renaissance CDCU is only FHA lender in New Jersey

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SOMERSET, N.J. (7/22/08)--Renaissance Community Development CU (RCDCU) has been approved by the U.S. Department of Housing and Urban Development (HUD) as the only Federal Housing Administration-approved community development credit union lender in the state. RCDCU Board President Shirley Spruill made the announcement Monday. “With so many small credit unions closing or merging, it’s a good feeling to know that just because you are considered small based on your asset size, that with determination and the will to succeed, you can,” Spruill said. “The key to survival for small credit unions is to drop the fear of ‘we can’t because of our size’ and offer products and services that meet the needs of our members,” she added. RCDCU is a member of the National Federation of Community Development Credit Unions. The credit union has $801,014 in assets. HUD must approve all lenders that offer FHA-backed mortgages. Through the FHA program, borrowers within minimum credit scores of 520 can qualify for mortgage insurance, make lower down payments with assistance from grants. FHA currently insures about five million mortgages.

CUs topic of L.A. radio show

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LOS ANGELES (7/21/08)--Credit unions were the topic of KNX 1070 News Radio’s “Money 101 with Bob McCormick” last week. The show contrasted the safety of credit unions with that of banks. “Disillusioned bank customers may be turning to credit unions, which have 9 million members in the state of California,” McCormick said in opening the show. Credit unions don’t make subprime loans or risky investments, McCormick noted. He also interviewed Daniel Penrod, an industry analyst with the California Credit Union League. “Credit unions can only build their money through internally generated funds so any project that loses money--is money coming from the membership,” Penrod told McCormick. “They’re much more conservative in what they’re willing to do.” McCormick told viewers they can find a credit union they’re eligible to join, and encouraged them to visit

IUSA TodayI CUs a good place for consumer savings

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MADISON, Wis. (7/21/08)--With ongoing economic turmoil and problems with some financial institutions, many people are wondering where the best place is to put their savings. USA TODAY personal finance columnist John Waggoner, mentioned credit unions as a viable option Friday in his column. Waggoner spoke with Bill Hampel, chief economist at the Credit Union National Association (CUNA), before he wrote the column, “Where can you stash your cash,” which dealt with options for consumers trying to safely save in difficult financial times. Often, credit unions will pay higher yields because they are non-profit organizations that don’t pay federal taxes, Waggoner noted. Credit unions’ deposits also are federally insured, he added. In other news, Hampel appeared on FOX News Friday. "Credit unions are very safe and sound," he told the news outlet. "Depositors have nothing to worry about." Loss rates at credit unions also are very low, he added. "You can count on one hand the number of credit unions that will likely fail," he said. To see the video, use the link.
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ICNNI financial advisor touts CUs as alternatives to banks

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WASHINGTON (7/21/08)--CNN’s personal finance editor touted credit unions on her show Friday morning as a good alternative to banks. Gerri Willis, host of “Gerri’s Top Tips” was asked by a man in Florida via e-mail, “Is it possible to find out about credit unions; how safe are they at this time?” Willis replied: “That’s a really great question … Credit unions are a good alternative to banks. They have the same guarantees [as banks]. As long as you have $100,000 or less in an individual account or $250,000 or less in a retirement account, you’re insured. “Plus, credit unions may have slightly better interest rates and rates on CDs, savings accounts and money market accounts,” she added. The Credit Union National Association provided information to assist Willis with her repsonse to the question.

Rhode Island CU considers charter conversion

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CRANSTON, R.I. (7/21/08)--Coastway CU, Cranston, R.I., is considering a charter change to a mutual savings bank, according to a notice on the credit union’s website. “The board of directors believes this conversion would allow Coastway to better meet the current and future needs of our members,” the statement said. “The conversion would also allow us to offer loans to anyone, regardless of whether they have a deposit relationship with Coastway.” Specifically, Coastway said it hopes to offer more member business loans, which would help it generate greater revenues. No director, officer or employee will receive additional compensation as a result of the conversion. The credit union is currently seeking written comments from members on the proposed charter change. Comments must be received before Aug. 20. On Aug. 21, the board will decide on the charter change. Coastway has $302 million in assets and 25,000 members.

Vermont CU partners with businesses to offer income advance loans

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SOUTH BURLINGTON, Vt. (7/21/08)--During a strategic planning session, NorthCountry FCU identified payday lending as a consumer problem it wanted to address, and has developed a product to help--the income advance loan. Bob Morgan, vice present of lending and administration for the $192 million asset, South Burlington, Vt.-based credit union, researched payday loan alternatives and eventually chose a model created by the Ohio Credit Union League, according to the Association of Vermont Credit Unions (Newslines Express July 18). “In the credit union industry, they have the most experience and longest history with payday loan alternatives,” Morgan said. “Their help was instrumental in getting our program off the ground.” Morgan needed buy-in from a local employer to launch the program. He found it with Justin Worthley, general manager at Rhino Foods, which for years had allowed employees to take advances on their pay for short-term credit needs. Because the program proved too cumbersome to manage, it was eventually discontinued. Worthley, however, saw a need for continued quick access to cash for his low- and moderately-paid employees. He contacted NorthCountry, and the income advance program was created and offered to Rhino Foods employees as a benefit. Since its inception, Worthley says employees have used the loan program for emergency expenses including car repairs, home repairs, and international travel to attend a funeral. “In our current economy, trying to provide cost effective and meaningful benefits to low- and moderately-paid employees is becoming increasingly important for employers when recruiting new people,” said Morgan. “The income advance program is one way to meet that goal.” In July, the fixed annual percentage rate for the loan was 16.99%--below the online lenders’ rates of over 400%--for a term of up to six months. Borrowers repay their loans through an automatic payroll deduction each pay period. An employee is limited to one loan at a time. The borrower pays no fee for the service. Although the income advance loans are riskier than some other types of loans, the delinquency rate so far has been only 0.5%--lower than NorthCountry’s average delinquency rate for all loans, according to the association. “This program has given us a way to help our employees build financial resources,” Worthley said. “Instead of ending an employee’s payroll deduction when the loan is repaid, we tell people ‘We’ll shut it off when you tell us to.’ Additional payroll deductions are set aside in a savings account. People have gone from a cash crunch situation to building up savings for things like a home or an upgraded vehicle.” “For many, it is a safety net for week-to-week needs,” Lorri Miller, human resources generalist at Rhino Foods said. “Our folks are very appreciative of this benefit and without fail they all let me know how much this means to them and how much worry and stress we are removing from their lives. It is extremely satisfying to help so many of our employees with income advance.” Employers pay an annual fee to participate in the credit union’s income advance program. In return, their staff members are automatically approved for immediate cash advances up to $1,500. Employees also receive counseling about how to avoid future financial emergencies. In addition to Rhino Foods, two other local employers have signed on for the service. Other local companies have contacted NorthCountry to discuss adding the program to their benefit plans. NorthCountry offers the program, which has an average loan balance of about $650, as a community service.

CUs leagues continue to reassure members their money is safe

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MADISON, Wis. (7/21/08)--Credit unions and state credit union leagues nationwide continue to work with their members and local media to get the word out that their deposits at credit unions are safe. In addition to the efforts reported in News Now last week:
* Ohio Credit Union League President Paul Mercer, along with Patrick Harris, league director of media relations, and a group of Ohio credit union CEOs, met face-to-face with the Ohio bureau of the Associated Press on Friday to talk about credit unions.

Tim Boellner, CEO, AurGroup Financial CU, Fairfield; Bill Burke, CEO, Day Air CU, Kettering; Doug Fecher, CEO, Wright-Patt CU, Fairborn; and Greg Kidwell, CEO, Members First CU, Columbus, were present at the meeting, according to the league.

“We have a distinct story to tell, and part of that story is that we are one of the best kept secrets in the country,” Fecher said. “The mission and philosophy behind credit unions is aligned with assisting people when times are difficult, and that is why we continue to succeed.”

“We are very good at what we do, and in particular in Ohio, where the economy has been sluggish for some time, credit unions have adapted and continue to serve their members,” Mercer added. * KMOX Radio, St. Louis, Mo., gave Peggy Nalls, senior vice president of the legislative affairs at the Missouri Credit Union Association, the opportunity to talk about share insurance on a radio program. The league also has provided information in its e-mail newsletter, CourierNet. * The Credit Union Association of Oregon created an online resource area for its credit unions, along with National Credit Union Administration (NCUA) resources and other materials, Laura Wieking, director of communications, told News Now.

“We also offered two training sessions on July 15 on share insurance, which were well-attended,” she said. * The Texas Credit Union League sent a statewide press release, subject material and talking points to credit unions. It also sent a special release to chapters, updated its website for credit unions and press, and created short essay pieces on specific topics related to the safety of credit union deposits in its e-mail newsletter, Rick Grady, league vice president, marketing and communications, told News Now. * The Kansas Credit Union Association submitted a press release to Kansas media and released talking points by the Credit Union National Association to credit unions, said Ashley Bridgeman, association communications specialist. * The Washington Credit Union League put together talking points, drafted a sample newsletter article discussing the strength of Washington’s credit unions, and is developing a frequently asked questions page for its website, according to David Bennett, league director of public relations. He also noted that he would be doing outreach to the largest markets in the state and creating a status report that outlines basic aspects of the state’s and nation’s credit unions compared with banks. * Cliff Rosenthal, president/CEO of the National Federation of Community Development Credit Unions, sent a letter to the editor after AM New York, a daily newspaper in Manhattan, published a front-page story about the bank crisis July 16 without mentioning credit unions. Rosenthal sent the newspaper a letter, “Federal insurance protects banks, credit unions,” which was published the next day. In it, he assured readers that the National Credit Union Share Insurance Fund is backed by full faith and credit of the U.S. government. * Mid-Atlantic FCU, Germantown, Md., also published a press release explaining how the credit union is reaching out to current and potential members in Montgomery County, offering them a safe place to put their money and receive financial counseling. * The Wisconsin Credit Union League has provided a list of resources for its credit unions, including talking points, links to press releases about the safety of credit unions, an insured funds brochure, and other items from the NCUA.

CU System briefs (07/18/2008)

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* WEST LAFAYETTE, Ind. (7/21/08)-- Purdue Employees FCU recently partnered with Purdue Athletes Life Success Program (PALS) to provide financial literacy content and activities during a four-day camp this year. “Economics has become the foundation of our entire culture, said Bill Harper, PALS director. “Kids typically are not exposed to the complications of handling money or differentiating between wants and needs. This is an opportunity to introduce kids to the reality of life in an informal setting.” Campers each received a $100 paycheck, which they had to deposit into the credit union. They used a checkbook to balance their accounts, and then moved to a computer-based program in which they had to make financial decisions based on a pre-set career and salary. They chose to purchase insurance, homes, vehicles and meals at different price levels, and had to pay off debts. (Left) PALS counselor Jill Freeland explains the importance of auto insurance to a child during the life skills game. (Photo provided by Purdue Employees FCU) ... * PORTSMOUTH, N.H. (7/21/08)--Northeast Credit Union (NECU) announced its sponsorship of the BizKid$ television series airing on New Hampshire Public Television. The show is underwritten by America’s Credit Unions, and aims to teach youth about money. Additional sponsorship is provided by the National Credit Union Foundation and the Washington Credit Union League. NECU has more than $550 million in assets ... *
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FARMINGVILLE, N.Y. (7/21/08)--Teachers FCU (TFCU), Farmingville, N.Y., sponsored the “Team TFCU Habitat Build” to support one of Habitat for Humanity of Suffolk’s home building projects. TFCU employees from its 17 branches raised $2,500 to defray the cost of building materials. Twenty volunteers from five TFCU locations volunteered to help build the home. The home will go to Denise Nicotri, a single mother with two sets of twins, Josh and Jonathan, 18, and Jared and Jordan, 13. TFCU has more than $2.2 billion in assets. (Photo provided by Teachers FCU) ... * BILOXI, Miss. (7/21/08)--Keesler FCU, Biloxi, Miss., earned a five-star superior rating from Bauer Financial Inc., Coral Gables, Fla., a credit union rating and research firm. The rating is based on the overall financial picture of the institution and indicates Keesler’s strength, the credit union said in a release. Keesler has $1.6 billion in assets ...

California CUs flooded by former IndyMac clients

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LOS ANGELES (7/18/08)--California credit unions have seen a flood of IndyMac customers after the troubled thrift was taken over by federal regulators last week, reports the San Gabriel Valley Tribune (7/18/08). E-Central CU and Wescom CU in Pasadena both told the newspaper that former IndyMac customers’ inquiries have focused on safety, security and deposit insurance. Wescom spokesman Joe Schaeffer said consumers seem to be looking for “some level of comfort and reassurance.” Many new members have parked their funds in money markets because it’s safe and liquid. Pasadena-based IndyMac Bancorp Inc., suffered a severe downward slide in recent months as a result of a meltdown in the nation's housing and mortgage markets. E-Central President/CEO Mike Theodore said he believed the mortgage lender's demise “was greed related.” “That's the difference between a for-profit company and a not-for-profit company," he told the newspaper, which pointed out that credit unions are non-profit institutions owned and operated entirely by their members. Meanwhile, other California newspapers reported the state’s more than 500 credit unions “remain safe and sound and continue to demonstrate positive growth.” California Credit Union League Analyst Daniel Penrod told the Fontana Herald News “while other financial institutions are experiencing financial difficulties and restricting services, California credit unions are well capitalized and in a great position to continue serving consumers." He reiterated that credit union deposits are insured by the “National Credit Union Administration, an agency of the federal government, up to $100,000 per account with additional coverage of up to $250,000 for certain retirement accounts, and also by private insurers,” said Penrod. “Not one cent of taxpayer funds has ever been used to bail out a credit union,” he said. Read the complete stories online using the resource links below.

Southwest Corp. white paper makes a case for mortgages

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PLANO, Texas (7/18/08)--Despite turmoil in the mortgage market caused by foreclosures on subprime real estate properties, mortgage lending still offers many opportunities for credit unions, according to a Southwest Corporate Investment Services white paper. “Making a Case for Mortgages” by Joe Arnold, senior advisor with Southwest Corporate’s advisory service, looks at the benefits of mortgage lending for credit unions in today’s turbulent marketplace (Southwest Corporate eFacts July 8). The paper refutes the notion that retaining mortgage originations--even in today’s environment--is too risky. “In addition to providing a service that your members need, mortgage lending continues to offer relative value,” Arnold said. The paper discusses:
* The outlook for mortgage originations this year; * The overall credit quality of credit union mortgage loans; * Credit unions’ current interest-rate risk position, and * Ways to mitigate risk.
“The bottom line is that credit quality of credit union mortgage loans remains high, interest rate risk is manageable, and current spreads make mortgage lending a valuable opportunity for credit unions,” Arnold said.

N.Y. Foundation introduces new grant-making program

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ALBANY, N.Y. (7/18/08)--The New York Credit Union Foundation (NYCUF) recently announced a new grant-making program designed to provide community-based organizations with funding for financial education programs and services. Grants of $500 to $2,500 will be awarded to non-profit organizations located in New York State that partner with credit unions to implement their projects. Many types of projects will be considered for funding, including, but not limited to:
* Youth or adult financial education programs; * Homeownership programs or services; * Financial counseling; * Transaction-services access being provided to the "unbanked"; * Microfinance loans; * Savings building awareness; * Tax preparation; * Entrepreneurship; * Train-the-trainer programs; * Activities that prepare students and teachers for a successful learning experience; * Programs that develop leadership skills of students and educators; and * Collaborations between credit unions and schools or community organizations.
“Through this grant-making program, credit unions will be able to offer their local community-based organizations another potential funding source,” said Diane LaVigna-Wixted, executive director of NYCUF. “We hope to support existing partnerships and encourage new ones.” Applications will be accepted on a rolling basis through Oct. 31 and may be downloaded by visiting the foundation’s website. Applicants will be notified within five weeks from the date of receipt. To be eligible for consideration, 501 (c) (3) non-profit organizations must be located in New York State with a full-time professional staff, deliver programs and services in New York State and have a credit union as a project partner. Funding for community-based organizations grants is made possible through the Community Investment Fund.

BizKid star interviewed on Chicago radio station

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NAPERVILLE, Ill. (7/18/08)--A BizKid$ cast member was recently interviewed by Bill Mollar of “The Money Show” on WGN AM 720 in Chicago about her experiences with BizKid$, a show that teaches youth about money, according to the Illinois Credit Union League.
Elizabeth Wright, a cast member of BizKid$, was interviewed by Bill Mollar of “The Money Show” on WGN AM 720 in Chicago. (Photo provided by the Illinois Credit Union League)
“I am passionate about getting financial education information out to others--there’s just not enough of it available,” said Elizabeth “Lizzie” Wright during the interview. Wright makes her own clothing and brings her sewing machine to the BizKid$ set to use during down time. Her specialty is altering prom dresses. Wright was joined by executive producer Jamie Hammond at the interview. Hammond said the program helps showcase youth who have put their foot in the door of the business world. “A college education is just not enough these days,” she said. BizKid$ airs on 311 public broadcasting stations nationwide. It is underwritten by America's Credit Unions. The show is produced in association with Junior Achievement Worldwide and WXXI Public Broadcasting. Funding is led by the National Credit Union Foundation and the Washington Credit Union Foundation.

CU System briefs (07/17/2008)

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* BATON ROUGE, La. (7/18/08)--E FCU, Baton Rouge, La., hosted its
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first-annual Camp SmartMoney, a financial education day camp for teens ages 13 and older. The weeklong camp was held at the Burnside Branch in Gonzales, La., and teens learned about managing their money. The camp used materials from Junior Achievement and the National Endowment for Financial Education. “I am very excited and thankful for the important real-word skills my granddaughter learned during the camp,” said Mary Lacey, grandmother of camper Lacey James. “Each day, she would rush home excited about what she learned and her plan for a summer dog-walking business and how she planned to spend some of her earnings and save some, too." Pictured are (from back left) Sherrell Briggs; John Thomas, Jr.; Christopher Armstrong; Lacey James; Valencia Patterson; Colby Braud; Satasha Patterson; and Wyatt Braud. (Photo provided by E FCU) ... * PITTSFIELD, Maine (7/18/08)--Sebasticook Valley FCU announced that it is bringing back its 0% Energy Loan Program, which allows members to borrow up to $3,000 to cover the cost of home heating. The program offers 0% financing over 12 months. Qualifying members receive a check made payable to their fuel provider ... * EAU CLAIRE, Wis. (7/18/08)--Royal CU, Eau Claire, Wis., raised $11,600 with the RCU Charity Classic June 28 for the Wisconsin Youth Sports Program (WYSP). The program serves more than 10,000 youth at the University of Wisconsin-Eau Claire. More than 840 participated in the charity classic. Pictured are: (left) Lisa Schuetz, WYSP activity director; Brian Levin-Stankevich, University of Wisconsin-Eau Claire chancellor; Carla Lueck, Royal CU community relations coordinator; Mark Willer, Royal CU CEO; and Vicki Reed, WYSP project administrator. (Photo provided by Royal CU) ...

CU robbery suspects arrested after seven-hour standoff

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WEST VALLEY CITY, Utah (7/18/08)--Men suspected of robbing a West Valley City branch of Salt Lake City-based Premier Services CU were arrested by police Tuesday after a seven-hour standoff at a home in the area, according to media reports. Two men, one carrying a handgun, entered Premier Services CU Tuesday afternoon at 2:45 p.m. and ordered the branch’s three employees to the floor. They emptied the cash register and left, Dennis Murray, Premier Services CU CEO, told News Now. No employees were injured during the robbery, but they were shaken, Murray said. Murray confirmed that the credit union’s employees saw two men, but noted that a witness outside of the credit union said she saw a third individual in a car that the robbers used to escape. He later learned from media reports that police arrested six individuals at a standoff, he said. John Bizzle, 20, Corey Morrison, 18, and George Dumas, 58, were arrested for the Premier Services CU robbery and are being held in a local jail, according to the Salt Lake Tribune (July 16). Three others, whose names have not yet been released, also were arrested at the standoff. The robbery at Premier Services CU took place about one hour before the standoff, West Valley Police Capt. Steve Sandquist told the Tribune. The credit union has not yet stated the amount of money stolen in the incident.

WOCCU conference highlights CU movement in Africa

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HONG KONG (7/18/08)--World Credit Union Conference attendees gained insights into credit union development in Africa on the last morning of the World Council of Credit Union's (WOCCU) annual event Wednesday, both through the eyes of one of the region's most influential leaders and by “traveling” directly to Kenya.
Click to view larger imageKeynote speaker Dr. Anna Tibaijuka, United Nations under-secretary general and executive director of UN-HABITAT in Nairobi, outlined the urgent need for affordable housing worldwide and the role that credit unions and the African savings and credit cooperatives, known as SACCOs, can play to help meet this need. She spoke Wednesday at the World Council of Credit Unions conference in Hong Kong.
The World Credit Union Conference, an annual event organized by WOCCU and its host member countries, concluded Wednesday. Keynote speaker Dr. Anna Tibaijuka, United Nations under-secretary general and executive director of UN-HABITAT in Nairobi, outlined the urgent need for affordable housing worldwide and the role that credit unions and the African savings and credit cooperatives, known as SACCOs, can play to help meet this need. Tibaijuka's oversight includes housing issues, and her presentation was a plea for assistance in meeting one of the most basic and dire needs of the world's poor. “In Africa, 72% of the urban population are slum dwellers, and in Asia, 46% are slum dwellers,” Tibaijuka told the audience. “And those who benefit by exploiting the poor don't want things to change.” Poor housing means much more than a lack of shelter, Tabaijuka explained. It causes malnutrition, poor health, low self-esteem and a raft of social issues, including crime and substance abuse. Rising food prices have only exacerbated the problem, she added. The demand for affordable housing is reaching a critical level worldwide, with 5 million new units required per year, or 4,000 new housing alternatives needed every hour by a growing population of poor, Tibaijuka said. That's not counting replacing the current inventory of substandard housing. “The advantages [of supporting the development of affordable housing] are great, and each of us must play a role,” Tibaijuka added. “The knowledge and efforts on the part of credit unions can help millions.”
Click to view larger imagePete Crear, president/CEO, Work Council of Credit Unions (WOCCU) (left), talked to WOCCU Program Manger Erick Sile (in yellow shirt) and African Savings and credit cooperative staff during a live video feed with Kenya at the World Council of Credit Unions conference in Hong Kong Wednesday. (Photos provided by Patrick Leung)
The keynote address was followed by a visit to Africa, courtesy of a live computer uplink directly to a SACCO in Kenya sponsored by Tandberg. WOCCU Program Manager Erick Sile anchored a brief discussion between WOCCU President/CEO Pete Crear and SACCO staff and members. Kenya currently has 4,000 SACCOs serving more than 4 million people, said Sile, manager of one of WOCCU's three development programs in Kenya. Sile described the way SACCOs were largely protected by their members from looting and burning during election riots and civil unrest earlier in the year. SACCO managers explained the service offered to microentrepreneurs, two of whom were present on the call. The conference closed with a speech by Khoa Do, a young Vietnamese expatriate, who survived personal peril and poverty to immigrate with his family to Australia. Do grew up to become a filmmaker who led a group of troubled youth to create a feature-length film that garnered critical acclaim, earning him the honor of being the 2005 Young Australian of the Year. “As you face your greatest obstacles you will also often find your greatest opportunities,” Do said. “Appreciate what you have and follow your heart. You will succeed.”

WOCCU awards distinguished service young CU people honors

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HONG KONG (7/18/08)--The World Council of Credit Unions (WOCCU) awarded its highest honor, the Distinguished Service Award, to two individuals and a foundation during the closing ceremonies of the World Credit Union Conference in Hong Kong. WOCCU also recognized the achievements of five young credit union leaders participating in the WOCCU Young Credit Union People (WYCUP) program.
Click to view larger image Chris Baker, former president/CEO of WOCCU, accepted the Distinguished Service Award during the World Council of Credit Unions’ World Credit Union Conference in Hong Kong. (Photos provided by Patrick Leung)
Distinguished Service Awards were presented to Chris Baker, former president/CEO of WOCCU, and Karen Schwartz, former executive director for Americas Association of Cooperative and Mutual Insurance Societies. Both Baker and Schwartz were recognized for their lifetime commitment to global cooperative development. Schwartz stressed the importance of cultivating more effective relationships among cooperative organizations. “Cooperation among cooperatives can be very difficult if you've ever taken any major steps in that direction,” said Schwartz. “But we need to reach out together to give a helping hand to a lot more poor people.” WOCCU also presented a Distinguished Service Award to the Credit Union Foundation Australia (CUFA) for its leadership in domestic and international credit union development activities. CUFA's programs in Sri Lanka, the Solomon Islands, Tonga, Fiji, Timor, Tuvalu and Cambodia have helped create access to financial services for disadvantaged communities.
Click to view larger image Peter Mason accepted the Distinguished Service Award for the Credit Union Foundation Australia during the World Council of Credit Unions’ World Credit Union Conference in Hong Kong.
CUFA's executive director Peter Mason, who accepted the award, acknowledged the efforts of everyone working in the projects in his remarks. “It's the volunteers involved and the energy they commit that leads to success,” said Mason. “In many cases, they build the credit unions with nothing but determination, and I gratefully accept this award on their behalf.” Also honored at the ceremony were 19 WYCUP program participants from eight countries. Of those nominees, five were selected as the 2008 WYCUP awardees:
* Joe Argo, Credit Union Central of Ontario, Canada; * Anna Corona, AEA FCU; * Nicholas May, Community CPS Australia; * Rachel Milan, Credit Union Central of Ontario, sponsored by The Co-operators, Canada; and * Rafal Sokolowski, Copernicus CU, Poland.
The award winners earned an all-expenses-paid trip to the 2009 World Credit Union Conference in Barcelona, Spain. At the WOCCU Supporters reception earlier in the week, two participants were honored for their outstanding contributions. The WOCCU Ambassador Award was presented to Richard “Dick“ Ensweiler, president/CEO of the Texas Credit Union League and a long-time WOCCU Supporter who played a major role in WOCCU's recent “Keep China Mutual“ campaign. CUDA, an Irish credit union trade association, was honored for its $75,000 supporter contribution. At WOCCU's annual general meeting, the board of directors presented an award to Russian delegates on behalf of Dina Plakhotnaya, considered the “mother” of the Russian credit union movement. Plakhotnaya was unable to attend the conference to accept her award.

Leagues CUNA reassure members their money is safe

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MADISON, Wis. (7/17/08)--Credit union leagues nationwide are reassuring members their money is safe after media reports regarding the IndyMac bank failure triggered concerns among consumers about the security of their deposits. The Credit Union National Association (CUNA) also distributed a list of talking points for leagues to share with local media about the safety and soundness of credit unions. That factsheet is prominently posted on and the consumer website,
* Several leagues, including the Missouri Credit Union Association (MCUA), have been contacted by credit unions receiving calls from worried members. MCUA also corrected erroneous information about credit union deposits that aired on a local radio station, said Peggy Nalls, senior vice president of public and legislative affairs. “A radio station in St. Louis ran an interview Wednesday morning with a book author who said he didn’t know if credit union accounts are insured,” Nalls told News Now. “Amy McLard [vice president of public/legislative affairs] contacted the station and followed up with an e-mail to set them straight.” * The Louisiana Credit Union League hosted a seminar July 10 in Baton Rouge led by National Credit Union Administration (NCUA) Insurance Analyst Deborah Spearing, according to Lacey Hyer, league public relations specialist. “Not one penny of insured savings has ever been lost by a member of a federally insured credit union,” Spearing told attendees. “In these uncertain economic times, credit union members are looking for a safe, sound place to invest their hard-earned money. And the credit union is just that place.”
Leagues also are putting together materials to distribute to credit unions and members and publishing stories in their newsletters to get the word out.
* The Maine Credit Union League created an insert and news article for credit unions to distribute to members called “Is My Money Safe--For Credit Union Members, the Answer is Yes!” * The Credit Union Association of Colorado and Wyoming put together a mini-communications kit for credit unions including talking points for staff, sample letters for members to be posted on websites, sample newsletter articles, how to link to the National Credit Union Administration Share Insurance estimator and background information for press releases. * The Pennsylvania Credit Union Association published an article in Life is a Highway Wednesday and sent a release noting credit union savings rates. “In 2008, savings in credit unions have grown nearly 7%. Research estimates that Pennsylvania credit unions provided $387 million in direct financial benefits to the state’s 3,388,545 members during the 12 months ending December 2007,” the league said. “These benefits are equivalent to $114 per member or $217 per member household.” * The Delaware Credit Union League plans to conduct “a survey to see how many credit unions received comments or questions from their members on this matter,” Alice Smith, league communications and governmental affairs director, told News Now. * The California and Nevada Credit Union Leagues are encouraging credit unions to post messages on their websites and in newsletters. The leagues also encouraged credit unions to hold meetings with staff to make sure they are fully advised about safety and soundness issues, said Henry Kertman, league vice president of public affairs. * The Credit Union Association of New York also sent information to its credit unions. “Credit unions always have and will continue to lend responsibly, which is why they have been able to steer clear of the subprime crisis that is negatively impacting other financial institutions,” said William J.Mellin, president/CEO of the Association. “It’s also why New York’s credit unions, which count over 4.2 million members and have more than $40 billion in assets, have gone virtually unmentioned in the adverse financial headlines that have proliferated the news.” * Georgia Credit Union Affiliates released information about how state credit unions are helping those in times of crisis. In response to the recent IndyMac collapse, CSRA FCU, Augusta, is helping its members by allowing them to restructure their accounts with balances over $100,000, free of any early withdrawal fees, according to the league. CSRA CEO Charm McCall said the offer demonstrates to members that the credit union wants to ease any concerns members might have about their money. “Our members know that their deposits are insured up to $100,000 by the National Credit Union Share Insurance Fund (NCUSIF). We want to reassure our members that their money is safe at CSRA,” McCall said. “If a member is more comfortable to restructure their certificates and shares with us, we can walk them through the process.” * The Credit Union Association of Oregon also sent a release to local press. "Oregon credit unions, which count over 1.4 million members and hold nearly 27% of our state’s financial market share, are going largely unmentioned in the adverse financial headlines," the association said. One hundred percent of Oregon credit unions are insured under NCUSIF, it added. * The North Carolina Credit Union League noted the issue in Weekly Update, and provided some resources for credit unions. "The bottom line," said John Radebaugh, league president, "is that credit unions are strong and well-positioned to serve their 3 million members in NC. They entered into this economic situation with strong balance sheets, and they will still be in very strong shape when things improve." * Wisconsin credit unions remain largely unaffected by the nation's mortgage crisis and economic downturn, the Wisconsin Credit Union League said in a press release Tuesday. Credit unions have remained strong because their community-based member-ownership puts members' interests first, according to Brett Thompson, Wisconsin league president/CEO. At the end of first-quarter 2008, Wisconsin credit unions' delinquencies remained at 1.20%, a decrease from the year-end 2007 rate of 1.29%. Net charge offs, or loans that are unrecoverable, are at .33%. "These figures show that credit unions have been making loans in their members' best interest," Thompson said. "Credit unions understand that members' ability to repay loans in a timely manner affects the stability of the cooperative, and as we've seen, our state's financial co-ops remain strong."
Use the link below to access CUNA's factsheet.

Wis. league creates Young Professionals Council

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PEWAUKEE, Wis. (7/17/08)--The Wisconsin Credit Union League this week announced its councils and committees for this year, including the newly created Young Professionals Council. The Young Professionals Council will be appointed annually at the discretion of the league president, to advise league staff on the direction and focus of the league’s initiatives to reach out to young adults. It will meet twice a year, under the direction of staff liaison Jill Weber, league director of member solutions. Council members, age 35 and younger, will be asked for input on practices to recruit young adult credit union members, employees and volunteers, and efforts to develop young credit union professionals into positions of leadership within the credit union industry. The council also may be asked to provide input on educational programs directed toward young adults and professionals. “We have a very talented group of individuals as a part of this first council,” Weber told News Now. “We hope to keep them around and increase their numbers. “The past two years, the league has provided incentives for credit unions to bring young adults to our annual convention, since that event is considered by most of our credit unions to be the premier event for networking and professional development,” Weber continued. “There are other ideas we have been considering to help with development of younger credit union employees into leadership positions within the movement. “The idea for a league council devoted to such issues stemmed from some of those discussions and was truly validated by one of our newer League Board members, who happens to be a Young Professional himself,” she added. Members include:
* Dominic Sloma, Best Advantage CU, Brillion; * Dan Fandrey, Blackhawk Community CU, Janesville; * Danielle Storck, Blackhawk Community CU, Janesville; * Ashley Borchardt, Bull’s Eye CU, Wisconsin Rapids; * Sarah Engevold, Central City CU, Marshfield; * Sarah Fecht, Community CU, Lacrosse; * Dan Winters, Cooperative CU, Racine; * Beth Krahn, County-City CU, Jefferson; * Josh Jones, Credit Union National Association, Madison; * Jennifer Schilling, Empower CU, Milwaukee; * Bill Fern, Enterprise CU, Elm Grove; * Ed Miller, Focus CU, Menominee Falls; * Scott Roesch, Fond du Lac (Wis.) CU; * Christine Petroff, Glacier Hills CU; West Bend; * Megan Pruno, Miller Electric CU; Appleton; * Mandi Paulick, Oshkosh (Wis.) Community CU; * Angie Retzlaff, Sheboygan (Wis.) Area CU; and * Elyse Smithback, St. Mary’s & Affiliates CU, Madison.
More than 100 credit union staff members from around the state are serving on Wisconson league councils, including: the League Council, Governmental Affairs Committee, the REAL Solutions Council, the Services Council, Audit Committee, and Young Professionals Council. The councils and committees advise league staff on the direction and focus of the league’s initiatives. The appointments were effective July 1.

Poll Many Maryland and D.C. voters are CU members

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COLUMBIA, Md. (7/17/08)--With the presidential election time just around the corner, a recent poll reveals that large proportions of Maryland and Washington, D.C. voters are credit union members. Of all Maryland voters, 48% are credit union members. Of all D.C. voters, 39% are members of credit unions, according to the Maryland and District of Columbia Credit Union Association. “This data demonstrates the popularity of credit unions as the preferred alternative to for-profit financial institutions,” said Mike Beall, association president. “Voters have realized that they save money by using credit unions, which are locally owned, for their financial services needs.” The poll, conducted by Garin Hart Yang for the association, was done by a telephone survey of 501 voters in Maryland and 254 voters in DC June 2-5. The poll further provides demographics of credit union membership in both Maryland and D.C. Among Maryland voters, 46% of men and 49% of women are credit union members. In terms of race, 45% of whites and 54% of African-Americans belong to credit unions. And those in the middle age categories are more likely to be credit union members--ages 18 to 34 (33% are credit union members); 35 to 49 (59%); 50 to 64 (52%); and 65 and over (39%). Among voters in D.C., 41% of men and 38% of women are credit union members. Among white voters, 32% are credit union members, while among African Americans, the proportion increases to 45%. D.C. voters ages 40 to 59 (46%) are more likely than their younger and older counterparts to be credit union members (35% of 18 to 39 year olds, and 34% of those 60 and over are credit union members.)

CUNA offers personal finance courses for CU staff

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MADISON, Wis. (7/17/08)--The first of a series of self-study personal finance courses to help credit union staff understand the basics of personal finance was recently added to the Credit Union National Association’s Web-based training service, CPDOnline. The online interactive courses--available in English and Spanish--are designed to help staff make more knowledgeable decisions about their own finances. Available topics include:
* Couples and Money. Learn the tools to help partners budget money and enhance their relationship. It teaches how to improve communication skills, set financial goals, and build a spending plan. Couples also evaluate their accounts, insurance, and loans to ensure everything is in order. * Used Car Buying. Offers strategies for finding and buying a quality used car. It helps users determine what they are looking for in a car, pre-buying research, calculating payments, dealer and seller negotiations, and using their credit unions.
More than 20 overall courses--including five additional staff personal finance courses-- will be added to the CPDOnline membership later this year. Upcoming personal finance topics will explore credit management, home buying, new car buying, checking accounts, and identity theft.

La. league implements new emergency response system

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HARAHAN, La. (7/17/08)--To more effectively communicate immediate emergency information--especially now in the midst of the hurricane season--the Louisiana Credit Union League (LCUL) has installed a telephone response system for credit unions. The Louisiana Office of Financial Institutions (LOFI), which represents Louisiana financial institutions at the Office of Emergency Preparedness, will record information and alerts related to immediate threats and/or disasters in the area, using the TelSpan system. Financial institutions will be able to dial in and hear messages or alerts at a time that is convenient to their schedules. LCUL is the only credit union league to utilize the TelSpan program, according to the league. “As Louisiana finds itself in the midst of yet another hurricane season, LCUL is making sure credit unions have access to as many resources as possible,” said Anne Cochran, LCUL president/CEO. “TelSpan will play a vital role in getting important information out in a timely manner and also in assisting credit unions across the state in the recovery process.” Heeding the importance of disaster preparedness, the league has a wide variety of resources available, including sample policies and checklists, to help credit unions in the disaster planning process. Packets were sent to credit unions at the beginning of hurricane season to better prepare them if a disaster were to strike. Included in the packets was a detailed checklist to serve as a template, along with a laminated pocket guide with both local and national disaster recovery resources. A sample tracking map was enclosed for credit unions to send their members. The tracking map includes pertinent information and can be customized with a credit union’s logo, the name of the credit union, and information specific to the credit union’s disaster recovery plan. Credit unions were asked to complete a survey form to provide the league with their appropriate contact information and an alternate disaster recovery location.

CU philosophy service debated at WOCCU conference

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HONG KONG (7/17/08)--Can credit union philosophy successfully co-exist with competitive member service? Superior service can't exist without a philosophical commitment, nor should it, according to a debate between two credit union chief executive officers during a general session at World Council of Credit Union's (WOCCU) World Credit Union Conference.
Click to view larger image Marlene Shields (left), chief executive, Capital CU, Edinburgh, Scotland, posed questions to Phylip Doughty, CEO, MECU Ltd., Australia, and Tom Dorety, (right) Credit Union National Association chairman at the World Council of Credit Unions Conference in Hong Kong Tuesday. Doughty and Dorety debated whether credit union philosophy can successfully co-exist with competitive member service. (Photo provided by Patrick Leung)
Credit Union National Association Chairman Tom Dorety, president/CEO of Suncoast Schools Federal Credit Union, Tampa, Fla., and Phylip Doughty, CEO of MECU, Ltd., Australia, took on credit union philosophy and a host of other topics during Tuesday's debate at the Hong Kong Convention & Exposition Centre. Marlene Shiels, chief executive of Capital CU in Edinburgh, Scotland, posed questions and moderated discussion before 1,300 attendees from 48 countries. The global financial situation bore some debate, including the varied impact it's having on U.S. credit unions, which Dorety said have seen a distinct downturn in lending, and in Australia where, as Doughty said, “business is booming.” “There are three reasons large credit unions should be cognizant of financial trends,” said Dorety in his opening remarks. “There's the social part--we're supposed to look after all members. There's the political part--U.S. laws tell us to provide services to members of modest means. And there's the financial part--credit unions have the capability to offer services to people at all income levels. “In the end, it just makes sense to provide good service to all members,” he added. There also was considerable discussion about demutualization. Dorety disclosed that, based on his research, he and his board would stand to make substantial sums if $6.2 billion Suncoast Schools demutualized, although that has never been considered by the credit union. Additional shares would then be offered for sale to members, an approach distinctly different than that taken in Australia, where profits from demutualization are shared with members. “It's incomprehensible to think that a U.S. credit union board of directors could give away their credit union assets for personal gain, then offer to sell back to the members something they already own,” Doughty said. The issue of “greening” credit unions also came up. At MECU, Doughty said, staff works to reduce carbon emissions, plants 700 trees per year and even mulches food scraps from the credit union cafeteria. Such efforts are not only the right thing to do, but also comprise a good business strategy, according to Doughty. “If the price of your products is right, you offer great service and you're looking after the environment, members will come to you,” he said. Dorety agreed, noting that environmental consciousness was part of the credit union difference, especially for the younger generation. That concept was supported later that day during breakout comments on serving Generation Y by Ryan Visscher of Canada's Envision CU. “We spend a lot of time preaching that difference,” Dorety said. “If you can convince members there truly is a difference, they will care, especially the young ones.”

CU System briefs (07/16/2008)

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* DULUTH, Ga. (7/17/08)--Eugene Christie of Macon, Ga., a long-time member of Robins FCU, won tickets to see country singer Leann Rimes after winning the Georgia Credit Union Awareness Campaign Sweepstakes. Christie and his daughter also met the singer backstage after the concert. The contest was for a credit union awareness campaign sponsored by Georgia Credit Unions. The campaign featured commercials featuring Rimes. From left: Maureen Bock, Georgia Credit Union Affiliates; Kim Christie; Rimes; Eugene Christie; and Kristi Arrington, Georgia Credit Union Affiliates. (Photo provided by Georgia Credit Union Affiliates) * PORTSMOUTH, N.H. (7/17/08)--Northeast CU (NECU), Portsmouth, announced that it pledged $10 million toward student loan funding in support of the New Hampshire Higher Education Assistance Foundation. Because of a drop in private sector funding, many non-profit agencies have not been able to lend to all students, NECU said. The credit union is sending out letters and calling student members to let them know that the credit union is providing money for loans ... * HARAHAN, La. (7/17/08)--The Louisiana Credit Union League is updating the method in which it distributes its two newsletters, InfoSight Compliance and eNewsletter. Newsletters will now come from Members also can choose to receive additional information by using the “Preferences” link at the bottom of each message ... * DES MOINES, Iowa (7/17/08)--Veridian CU, Waterloo, Iowa, donated $100,000 to the Iowa Credit Union Foundation’s disaster fund to help members affected by flooding and tornados. Ascentra CU, Bettendorf, also contributed $5,000 to the fund ... * PORTSMOUTH, N.H. (7/17/08)--Northeast CU (NECU) announced Tuesday that it has kicked off its “Pennies for a Change” campaign in partnership with the United Way. Members can donate one penny on their NECU Visa debit card transactions. The money will support community building strategies in areas such as housing, healthcare, substance abuse and transportation ...

CUs a family tradition for one CEO

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NAPERVILLE, Ill. (7/17/08)--Credit unions run in Jack Teausant’s family--his grandfather, mother, and sister have all been a part of the credit union he currently operates.
(Left) Sandy Burkart, Financial Plus CU president of marketing; Jack Teausant, Financial Plus CEO; and Marilyn Dudgeon, former manager of Financial Plus. Burkart, Teausant’s sister, was hired at the credit union in 1978. Dudgeon, his mother, was hired in 1951 to handle public relations part-time and later served as a manager. Financial Plus was started by Teausant’s grandfather, Charles Munks, in 1951 as Glass Workers CU. (Photo provided by Financial Plus CU)
Teausant is CEO of Financial Plus CU in Ottawa, Ill. Financial Plus, formerly known as Glass Workers CU, was started in 1951 by 36 members of the Glass, Ceramic and Silica Workers of North America. His grandfather, Charles Munks, was one of those members. Teausant’s mother, Marilyn Dudgeon, was hired as a part-time employee in 1951 to handle public relations. In 1954, she was hired as the credit union’s first full-time employee and manager. Teausant joined the credit union in 1976 as a manager trainee. He previously worked as the comptroller of a local manufacturing company and was asked to help Glass Workers CU merge with another local credit union. Two years later, Teausant’s sister, Sandy Burkart, was hired as a teller. Burkart, who has an art degree and a background in advertising, eventually worked her way up to vice president of marketing--a position she holds today. In 1979, Teausant was promoted to president. Under his leadership, the credit union changed its name to Financial Plus CU. It had $9.915 million in assets and 8,700 members when Teausant started as president and now has $150 million in assets and 19,500 members. Financial Plus CU has been in Teausant’s family for 57 years, but they do not take its success for granted. “We recognized that we have to work as a team,” Teausant said. “The reason why we’ve grown is because of our mission statement: ‘Exceptional Service to Members.’”

Point Loma CU helps migrant children learn

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OCEANSIDE, Calif. (7/16/08)--Point Loma CU (PLCU) is assisting the San Diego County Office of Education’s Migrant Education Program, which is designed to help migrant children’s academic achievement. The Migrant Education Program helps local schools offer unified education programs, incorporating early childhood education, parenting, adult literacy and basic financial education. Participating schools can customize program elements to their area’s specific needs. “We are proud to support the migrant education program because we help members achieve financial stability by bringing families together,” said Nora Parker, PLCU's Oceanside branch manager. PLCU will inform migrant families about the financial services available to them, with a focus on alternatives to the payday lenders and check-cashing services many migrants feel are their only options. In addition, the credit union will conduct free financial education seminars, in English and Spanish, for students and their parents. PLCU also offers international money transfer services at a substantially lower cost than commercial services. “The migrant community is a vital instrument to the county’s agricultural economy, and we want to do what we can to help them improve their lives,” said Parker. “It’s part of our philosophy of ‘people helping people.’ PLCU is a $470 million asset, San Diego-based credit union with more than 59,000 members and 15 branches.

Study CUs should market to Gen X Y through e-mail

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BOSTON (7/16/08)--Credit unions looking to market to members of Generations X and Y may want to reference a recent study indicating that e-mail is one of the most effective ways to reach them. Aite Group surveyed a group of 500 consumers to see in which channels--e-mail, online, at the ATM, or on their cell phones--they would most like to receive marketing offers. While nearly six in 10 consumers said they are open to receiving offers from at least one of four common marketing channels, four in 10 said they would like to receive special offers and coupons through e-mail, Aite said. Gen X demonstrated the strongest interest--53%--in e-mail marketing, followed by Gen Y at 47%. Baby boomers are less interested, and senior citizens demonstrate the least interest in being contacted through e-mail for marketing purposes. "While a surprisingly high number of consumers are open to receiving marketing offers, financial services marketers must take certain measures to capitalize on the opportunity," said Ron Shevlin, senior analyst with Aite Group and report author. “They must develop channel preference models, integrate marketing technologies and improve consumer trust in e-mail.”

CU System briefs (07/15/2008)

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* PEWAUKEE, Wis. (7/16/08)--The Wisconsin Credit Union League has launched an informational website for StretchPay, the Credit Union Salary Advance Alternative. StretchPay is an alternative to payday loans and the special line-of-credit loan helps members obtain affordable short-term credit (The League News July 7). Wisconsin had more than 524 payday lenders that made 1.7 million loans totaling $733 million last year, an increase from 2006, which had 500 payday lenders making 1.6 million loans totaling $661 million, the league said ... * WICHITA, Kan. (7/16/08)--Jim Holt, CEO, Mid American CU, was featured in a “Good Advice” blog column of the Wichita Eagle July 10. Holt was featured along with two other local business people. He described seven ways Mid American serves members who come to the credit union with a problem. “First, we always remember that our members are our owners, so we are working for them. Second, we always offer a sincere apology. Third, we ask them how they would like us to solve the issue that is making them unhappy. Sometimes they don’t want us to do anything, they just want us to know they are unhappy. [Fourth] we attempt to fix the problem. Fifth, we do something extra by giving them a gift card for allowing us the chance to fix the problem. Sixth, we follow up to make sure the problem is solved and give them direct contact if they have a future problem. Seventh, we ask for their continued business,” he said ... * HARRISBURG, Pa. (7/16/08)--Cornerstone FCU, Carlisle, Pa., was granted a community credit union charter. The credit union previously had an employer/association-based charter. The new charter opens membership to anyone who lives, works, worships, attends school or conducts business in Cumberland County and the borough of Shippensburg. Family members of those in the country and borough also can join (Life is a Highway July 10). “The growth opportunity offered by this charter change allows Cornerstone to retain our ‘down on the corner’ approach to meeting personal and small business service needs, while allowing for county-wide diversification,” said Sam Glesner, Cornerstone board president ... * CANTERBURY, N.H. (7/16/08)--The New Hampshire Credit Union League’s Eighth annual Richard D. Mahoney Credit Union Charity Golf Tournament in June raised $70,000 for the Make-A-Wish Foundation of New Hampshire. The event, coupled with 11 years of fundraising by the league’s credit unions, brings the total amount of money raised to the charity to $1.053 million ...

Pa. CUs share ideas on coping with high gas prices

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HARRSIBURG, Pa. (7/16/08)--The Pennsylvania Credit Union Association (PCUA) recently solicited ideas from credit unions and employees on gas-saving policies and other transportation cost-cutting efforts. Rising energy costs can cause stress on employees, and even impact worker productivity, PCUA said. By listening to employees, providing education on managing finances, being creative and thinking non-traditionally, employers can be leaders in helping employees (Life is a Highway July 15). Some examples of what Pennsylvania credit unions are doing to ease the gas pinch:
* Employees of AT&T Employees Pittsburgh, Pa. FCU are compensated $2 for each day they work. They are reimbursed on a monthly basis. The new benefit was implemented Jan. 1 and will be ongoing. * Incol CU, Old Forge, has adjusted its monthly staff meeting schedule. Rather than asking all employees to drive to the main office for the meeting, information packets are sent out to branch employees in advance. The meetings are then conducted via conference call--which also has reduced expenses for the credit union, because food was provided for the in-person meetings. *Timberland FCU in DuBois and Clearfield purchases large quantities of fuel cards for area gas stations. The credit union gets a 5% discount. These cards, in turn, are sold to employees at the discount. The credit union also received permission to resell the cards to members as a fundraiser. A $50 gas card is being sold for $48.50, and $1 goes to charity for each card sold. * Employees at Viriva Community CU, Philadelphia, have worked to better coordinate trips between the credit union’s five branches. Teresa Hilinski, Viriva marketing manager, says staff from various departments used to make their own trips to branches. Now, items are gathered from departments and sent with the next person making a trip. The credit union is enforcing carpooling among employees when staff meetings are held at one location. * PCUA also is considering options for staff. Management appointed a six-person task force to research and provide recommendations on what could be done to help employees. The committee has submitted a report to management for consideration.

CUNA Councils offer social networking through Connect

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MADISON, Wis. (7/16/08)--The CUNA Councils have launched CUNA Councils Connect, a Facebook-like tool that allows council members to find information, advice and solutions about credit unions through connections with more than 4,600 credit union professionals.
Click to view larger image Click for larger view
“CUNA Councils Connect has taken off faster than any of us anticipated,” said Christopher Morris, Councils Web manager. The free site is “like a list serve, bulletin board, membership directory, guide to consultants and vendor reference all rolled up and turbocharged,” said Joe Brancucci, Council forum chair and executive vice president of BECU, Seattle. Features include:
* A directory with extensive member profile information including: contact information, asset size, number branches and employees, more than 130 areas of expertise, and 32 broad categories of industry suppliers; * A unique “people map,” which allows members to find others visually; * Online discussion forums, where members can or start their own unique group around a focused and targeted issue; * Real-time chat functionality between members; and * Blogs.
“CUNA Councils Connect allows me to reach out and identify peers with very specific characteristics--such as members in California of a certain asset range who have experience in product development and evaluation,” said Anne Legg, chair of the CUNA Marketing and Business Development Council and vice president of marketing, Cabrillo CU, San Diego. “It’s extremely powerful and it’s a huge time saver. We can have an online dialogue and compare notes.” About 1% of associations use Web 2.0 tools, according to Associations Now Magazine. “Web 2.0 and social networking technology is about bringing people together and making connections,” said David Rohn, vice president of CUNA Councils. “CUNA Councils Connect allows credit union professionals to collaborate and network across a broad network, but in very focused ways. The result is a resource that offers executives assistance with day-to-day issues and provides support for long term successes.” For more information, use the link.

WOCCU keynoters Accountability transparency crucial

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HONG KONG (7/16/08)--Global economic and social uncertainty bring with them the opportunity for credit unions to prosper through
Pete Crear, World Council of Credit Unions (WOCCU) president/CEO, opens Monday's general session at the WOCCU World Credit Union Conference in Hong Kong. (Photos by Patrick Leung)
increased service to more members. Add to that the movement's transparency and responsibility to those members, and it's clear credit unions will continue thriving by doing the right things for the right reasons, according to World Council of Credit Union's (WOCCU) chief executive and a former U.S. legislator. Pete Crear, WOCCU's president/CEO and former U.S. Sen. Paul Sarbanes, co-author of the Sarbanes-Oxley legislation, mandating increased financial accountability from publicly held companies, opened Monday's educational sessions at WOCCU's World Credit Union Conference at the Hong Kong Convention & Exhibition Centre. The conference runs through today. Both shared insights and observations on why credit unions remain among the best and most ethical member-service alternatives. “History has shown us that the stability offered by credit unions in both developed and developing nations can help buoy struggling
Paul Sarbanes, former Senator and co-author of the Sarbanes-Oxley legislation, spoke at the World Council of Credit Unions' World Credit Union Conference in Hong Kong. "Credit unions' focus is always on its members. That's your purpose and your mission, and that's why I've been so supportive of credit unions over the years," he told attendees.
populations and set unsettled economies on a more even keel,“ Crear told more than 1,300 attendees from 48 countries gathered for the annual event. “Countries whose populations formerly were characterized only by groups of ‘have-nots' and ‘have-mores' have achieved greater economic balance through credit union development, enabling people to support their families and approaching a social equanimity that can lead to peace and relative prosperity,” he added. Credit unions worldwide have helped foster a “new age,” as global economic realignment is altering the strength and prosperity of many nations, Crear said. Developing countries especially have made great strides economically and socially, creating broader free-market access in which more people are able to participate. Credit union movements in many countries have helped stabilize economies and foster growth, he added. Citing evidence from WOCCU's newly released 2007 Statistical Report, Crear noted that credit unions have continued to grow,
Credit Union National Association President/CEO Dan Mica speaks at the World Council of Credit Unions' World Credit Union Conference in Hong Kong. In his speech, Mica noted that credit unions' transparency and accountability can serve as lessons to other financial service providers.
with more than 49,000 credit unions serving more than 177 million people worldwide last year. That's an increase from 46,000 credit unions serving 172 million members the year before, an increase that shows that the credit union ideal is working, he added. Sarbanes, who was introduced by Credit Union National Association President/CEO Dan Mica, himself a former Florida legislator, supported Crear's assessment, noting that credit unions' transparency and accountability can serve as lessons to other financial service providers. Sarbanes also had a strong response to Crear's “state of the credit union movement” address, including examples of credit unions in post-conflict environments like Afghanistan, where employees put themselves at physical risk to serve members. “I was very moved by Pete Crear's outline of what credit unions
A view of Hong Kong from Victoria Peak, where the Supporter's Reception of the World Council of Credit Unions' World Credit Union Conference was held this week.
worldwide are doing,“ Sarbanes said. “I think credit union principles are basic and fundamental and I commend you for holding to your principles when there is so much pressure to stray from the path.” The former legislator also drew a connection between the tenets of Sarbanes-Oxley legislation and credit union principles. Service to members and the accountability such service demands falls in line with the legislation's mandate, he added. “Credit unions' focus is always on its members. That's your purpose and your mission, and that's why I've been so supportive of credit unions over the years,” Sarbanes added. “That's also what makes your mission of ‘quality credit unions for everyone' so important.”

Low-income Mich. CUs powers expanded

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PLYMOUTH, Mich. (7/15/08)--The Michigan Office of Financial and Insurance Regulation (OFIR) issued an order June 20 expanding the powers of state-chartered credit unions approved for low-income designation by the National Credit Union Administration (NCUA), according to the Michigan Credit Union League. Michigan state-chartered credit unions now have the authority to exercise all powers granted to low-income designated federal credit unions. Low-income designated, state- chartered credit unions can accept non-member deposits; participate in the Community Development Revolving Loan Program; offer secondary capital accounts; and qualify for an exception from the aggregate loan limit for member business loans (Michigan Monitor July 15). “This is a very important development for state chartered credit unions in Michigan, and we encourage all those affected to read through the letter and develop an understanding of what actions they are now able to take that they previously could not," said league Executive Vice President Patrick La Pine. The Michigan Credit Union Act does not address low-income credit unions. The NCUA has approved the low-income designation for a number of Michigan's state-chartered credit unions with OFIR concurrence. However, until now, act provisions restricted the ability of the credit unions from exercising all powers available to low-income federal credit unions, the league said. For a copy of the order, use the link.

U.S. Central restates 2007 earnings Fitch upholds AA rating

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LENEXA, Kan. (7/15/08)--U.S. Central FCU, the nation’s only wholesale corporate credit union, announced Monday its 2007 and first-half 2008 financial results. The corporate also anounced that Fitch Ratings made no change in U.S. Central's long-term debt rating. U.S. Central, which has total assets of more than $45 billion, reported a net loss for 2007 of $51 million. This compares with net income of $63 million in the prior year. For the six months ended June 30, 2008, U.S. Central generated net income of nearly $30 million. The 2007 loss primarily reflected the turbulent conditions in the global credit markets and the resulting impairment of the value of some securities held in U.S. Central’s investment portfolio, the corporate credit union said. “In a challenging period for the financial institution sector, U.S. Central is in a strong and highly liquid position,” said Francis Lee, president/CEO of U.S. Central. “Our $2.6 billion in total regulatory capital, and access to more than $20 billion in liquidity overall, ensure that U.S. Central will continue to serve as a source of liquidity and support to the Corporate Credit Union Network. “More importantly, due to our solid earnings through the first half of 2008, we have already recouped more than half of the previous year’s loss,” he continued. Principal factors affecting U.S. Central’s 2007 results included losses representing market-to-market adjustments on trading assets and write-downs on certain residential mortgage-backed securities. Offsetting these losses was an increase in net interest income after dividends on membership capital shares of 37%, to $145 million, a 3% increase in fee income, to $19 million, and a 4% decline in operating expenses, to $60 million. “The soundness of our investment portfolio and our prudent risk management practices have enabled U.S. Central to perform well despite the turmoil in the financial services industry,” noted David Dickens, executive vice president of asset/liability management, U.S. Central. “After an in-depth evaluation of our investment holdings by both internal and third-party experts, we are confident our $40 billion investment portfolio consists of high-quality assets that will continue to perform in these difficult markets,” he added. U.S. Central also stated Monday that Fitch Ratings made no change in the credit union liquidity provider’s “AA+” long-term debt rating, which was assigned to U.S. Central in March of 2008. U.S. Central’s short-term rating of “F-1+,” individual rating of “A” and support rating of “1” also are unchanged and remain at the highest levels given by Fitch. Fitch issued a statement after its assessment of U.S. Central’s results of its 2007 financials, which showed a $51 million net loss for the year. Fitch’s release stated “… the losses are of a magnitude that Fitch considers absorbable for U.S. Central’s earnings and capital position.” “During this challenging period for the financial institution sector, U.S. Central is in a strong and highly liquid position,” said Francis Lee, president/CEO of U.S. Central. “Our $2.6 billion in total regulatory capital, and access to more than $20 billion in liquidity overall, ensure that U.S. Central will continue to serve as a source of liquidity and support to the Corporate Credit Union Network. "More importantly, due to our solid earnings through the first half of 2008, we already have recouped more than half of the previous year’s loss," he added. "The ‘AA+’ rating is shared by only two other U.S. depository institutions and, at a time of considerable uncertainty in the financial markets, we believe that Fitch’s release is an ongoing acknowledgement of the continued strength of our balance sheet and our high liquidity position.”

CU member appreciation event has 200 response

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SALT LAKE CITY (7/15/08)--Free tickets. Free food. No lines. Who could pass that up? Not very many. A member appreciation event that involved the showing of a popular new Indiana Jones movie at Mountain America CU (MACU) garnered a 200% response rate to direct mail invitations. Michael Turner, senior vice president of commercial lending at the $2.7 billion asset, West Jordan, Utah-based credit union, had seen this type of event work at other organizations and decided to give it a try. “First, I knew we needed to get a blockbuster movie and Indiana Jones: Kingdom of the Crystal Skull surely fit the bill,” said Turner. “Second, we needed to provide a pre-movie forum to give us the opportunity to thank our members, talk briefly about our products and services and allow them time to network.” The credit union has held member appreciation events in the past, but wanted to do something different. “Finally, since MACU is a family friendly organization we decided that it would be great to include not only our business members, but their families,” Turner continued. The credit union sent out just over 150 invitations to its business services members and had nearly 300 people show up. “The turnout was phenomenal. An average rate of response from direct mail is 1% and we saw a 200% response,” said Nathan Anderson, senior vice president of marketing. Turner agreed. “It was a resounding success. After the movie was over, I had several members stop me on their way out and tell me what a great event it was and how much they love doing business with us,” he said. “We wanted to thank our business members for their partnership and let them know that we appreciate them, but by the time the event had ended and they were leaving they were truly thanking us,” Anderson added.

New Hampshire payday loan bill signed into law

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MANCHESTER, N.H. (7/15/08)--New Hampshire Gov. John Lynch last week signed House Bill 267--an act relative to certain small loans--that caps interest rates for payday loans and car-title loans at 36% in the state. The cap, which takes effect Jan. 1, will protect New Hampshire citizens from a cycle of debt that occurs when payday lenders make high-interest loans to cash-poor borrowers. “Hopefully the bill will have the effect of not only preventing consumers from falling into a predatory payday lending trap, but it will also help draw their attention to the fact that there are far better ways to finance small amounts over short periods of time or to get their finances in order so that they will not be dependant on short-term financing,” Rob Kimmett, senior vice president of public relations and marketing for the Massachusetts, Rhode Island and New Hampshire credit union leagues, told News Now. When the state’s small-loan rate cap was eliminated in 2000, pay day lending was effectively legalized in New Hampshire, according to the Center for Responsible Lending. Service CU, Portsmouth, and St. Mary’s Bank, Manchester, are two New Hampshire credit unions that have programs that aim to meet the needs of payday borrowers, Kimmett said. New Hampshire is now among 15 states and the District of Columbia that have capped interest rates at or around 36% to stop predatory lending, the center said. Congress passed a 36% cap to protect military families nationwide at the request of the Department of Defenses, the center added.

CUNA institute can help keep CU staff financially fit

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MADISON, Wis. (7/15/08)--The Credit Union National Association’s (CUNA) first-ever Personal Finance Institute will help attendees learn how to develop financially fit staff and credit union members. The institute takes place Sept. 10-12 in Lansdowne, Va. The CUNA Personal Finance Institute was designed to help attendees draft a strategic financial literacy plan for their credit unions to educate youth, adults, and the underserved, with special focus on measuring the effectiveness of those educational efforts. Credit union professionals will learn how to create new financial behaviors and build a culture of financial learning to attract and help members. Also, the “Creating New Behaviors That Last” session will explore how the brain works and how it affects the way people manage money. Attendees will receive a prework packet to complete prior to the institute, as well as a copy of CUNA’s new Model Youth Program Guide. The institute was one of seven key recommendations of the CUNA Financial Literacy Task Force in its “Long-Term Strategic Plan to Empower Members by Improving Financial Literacy.” The plan was created to help elevate financial literacy to the level of a core value within credit unions to help sustain the movement’s ongoing philosophy of service to members and communities. The task force operated under the belief that long-term credit union growth depends on improving members’ financial literacy. And that the more financially literate consumers become, the more likely they are to:
* Save and borrow; * Generate fewer loan losses; * Resist competitor’s teaser rates: * Recommend membership to others; and * Raise their children to be members.
With the current economic conditions, there isn’t a topic that is more important or relevant right now than financial literacy, said Juri Valdov, task force chair and senior vice president for external affairs, Northwest FCU, Herndon, Va.

Wis. teachers learn to help students be millionaires

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MADISON, Wis. (7/15/08)--A group of 50 educators will learn how to teach their students about finances during the second session of the 2008 National Institute of Financial and Economic Literacy (NIFEL), held through Friday at Edgewood College in Madison, Wis. The Wisconsin Department of Financial Institutions (DFI) is conducting the NIFEL sessions. Attendees will spend the week learning how to teach their students about investing, financial plans, insurance and “how to be a millionaire,” the DFI said in a release. The Wisconsin Credit Union League is helping to sponsor the event, as it has done every year since 2001, according to Chad Helminak, Wisconsin Credit Union League public relations specialist. “Wisconsin credit unions have been amazing in stepping up to the plate and providing support for local teachers,” Helminak told News Now. Jim Drogue, vice president of credit union development at the league, was scheduled to present Monday about the payday lending industry, dangers of payday loans, and viable credit union alternatives, such as StretchPay. NIFEL is organized by The Jump$tart Coalition for Personal Financial Literacy. It was organized in 2001 in response to the fact that most educators lack the skills to teach personal finance, the DFI said.

WOCCU conference opens in Hong Kong

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HONG KONG (7/15/08)--The World Council of Credit Unions (WOCCU) opened its 2008 World Credit Union Conference Sunday in Hong Kong, with WOCCU Chair Melvin Edwards stressing the importance of member service.
John Tsang, financial secretary for the Hong Kong Administrative region of China, addresses the World Council of Credit Unions’ World Credit Union Conference opening general session crowd in Hong Kong.
“The primary purpose of any such gathering is a realization of our identity and a reaffirmation of our purpose,” said Edwards, who represents the Caribbean Confederation of Credit Unions, during his welcoming remarks. “As members of this unified body, we are one group and together we will achieve the mission which defines our reason for being here. It is la raison d'être, as we say in French, our ‘reason for existence' that means so much to us and to the members we serve.” The conference is being held through Wednesday at the Hong Kong Convention and Exhibition Center. More than 1,300 attendees are expected for the event, which is co-hosted by the Credit Union League of Hong Kong and the Association of Asian Confederation of Credit Unions. Officials from hosting organizations and Hong Kong government agencies welcomed attendees. Dignitary John C. Tsang, financial secretary for the Hong Kong Special Administrative Region of China, also welcomed participants, recognizing credit unions and WOCCU for their contributions to the financial well-being of middle- and low-income people worldwide. WOCCU's efforts to bring its conference to Asia for the first time in 30 years says a great deal for the organization's commitment and the growth of Asian credit unions, he added. “This conference is like the Olympics for credit unions,” said Tsang, referencing the upcoming Beijing summer games in August. “We're deeply honored that WOCCU has chosen our city.” Prior to Sunday's opening ceremonies, WOCCU held several other meetings, including its sixth annual Regulators' Roundtable, which attracted 37 regulators from 18 countries across six continents. The event convenes regulators from both mature and developing credit union systems to exchange ideas and regulatory best practices.
World Council of Credit Unions Chairman Melvin Edwards (left), and Liu Kwei-Kin, assistant director and registrar of credit unions in Hong Kong, at the World Council of Credit Union Conference in Hong Kong. (Photos provided by the World Council of Credit Unions)
The regulators participated in wide-ranging discussions on topics such as the credit crisis and its impact on credit unions, off-site surveillance as a supervisory tool, and supervising in a distressed environment. Most of the discussion focused on the day-to-day difficulties regulators face. Usha Thorat, Central Bank of India's deputy governor and Saturday's keynote speaker, identified several of these in her presentation on the components of a strong supervisory system. First time participant Loi Bakani, deputy governor and deputy registrar of Savings and Loan Societies for the Bank of Papua New Guinea, said the roundtable, “gave him valuable insight into the way that other regulators from around the world implement regulations and exercise their supervisory authority.” While the regulators discussed policies, this year's nominees for WOCCU's Young Credit Union People Program (WYCUP) and other conference attendees age 35 and under spent Sunday discussing strategies for credit unions worldwide to attract and retain younger members. Conversations developed from an analysis of marketing to the 18-35 market, with countries sharing personal stories of their own strengths, weaknesses, opportunities and threats in this area. “It is apparent that no matter the country, we all face similar challenges,” said Eleonora Zgonjanin Petrovik, 2007 WYCUP winner and a co-facilitator of the session with fellow 2007 WYCUP winner Izabela Rutkowska. “We need to take advantage of these similarities and learn from each other, if we want to make more headway with the younger credit union market.”

Desert Schools FCU receives 1 million housing grant

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PHOENIX (7/14/08)--Desert Schools FCU has received a $1 million Affordable Housing Program (AHP) grant to finance construction of a 157-unit residential development for low-income families in Phoenix. The grant is through the Affordable Housing Program and from the Federal Home Loan Bank of San Francisco. Proceeds will directly benefit UMOM New Day Centers, a local non-profit agency providing food, shelter and self-sufficiency tools to homeless and low-income families. "Credit unions are a valuable resource to their members and communities," said Jim Yacenda, vice president and community investment officer at FHLBank San Francisco. "We are delighted that Desert Schools FCU is taking advantage of its bank membership and leveraging AHP funds to extend its reach to serve families most in need." According to John Wright, Desert Schools chief financial officer, the credit union "worked side by side with UMOM every step of the way to help them understand the grant application process and better their chances for receiving the funds." The credit union will implement disbursement of funds over the next few months.

CO-OP says members not affected by 7-Eleven breach

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ONTARIO, Calif. (7/14/08)--CO-OP Financial Services says its credit union members' ATM personal identification numbers (PIN) codes are safe and were not affected in a recent breach of ATMs inside 7-Elevens. "To the best of our knowledge, no CO-OP credit union members were impacted or compromised by the Citibank PIN breach," said CO-OP Financial Services CEO Stan Hollen in a statement on its website. The statement was in response to reports that hackers broke into Citibank's ATM network inside 7-Elevens between October 2007 and March 2008. They allegedly stole consumers' PIN codes. CO-Op Financial Services and its ATM network, CO-OP Network, have been partners with 7-Eleven stores and network processor Cardtronics for more than two years. In May, they announced deposit-taking ability was available in ATMs at more than 2,200 of the stores, which meant 26 million credit union members with the CO-OP Network cards could make deposits in the machines in 12 states. Hollen said CO-OP would continue to monitor the situation closely and would inform members "immediately" if any other news surfaced.

Joe Perkowski former CUNA chairman dies

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BURNSVILLE, Minn. (7/14/08)--Joseph Perkowski, former chairman of the Credit Union National Association (CUNA) and former president/CEO of US FCU in Burnsville, Minn., died early Thursday morning. "Former CUNA Chairman Joe Perkowski served the national and worldwide credit union movement with commitment and dedication over four decades," said Dan Mica, president/CEO of CUNA. "His national service culminated in his chairmanship of CUNA from 1985-87, which followed a number of leadership positions with the association. "On the international front, Joe helped in the formation of the Foundation for Polish Credit Unions, served as president of the World Council of Credit Unions (WOCCU) from 1992-93, and was honored with the prestigious WOCCU Distinguished Service Award in 1997," he noted. The credit union movement around the world benefited greatly from the enduring consequences of his leadership," Mica said. Perkowski, 72, was chairman of the Minnesota League of Credit Unions from 1983 to 1985 and served on its board for a number of years. He began his career in credit unions as an employee of the Michigan Credit Union League from 1960 to 1966 and served on that league's board from 1967 to 1971, advancing to vice president. While CEO of the former Minneapolis Postal Employees FCU (now US FCU), Perkowski served as chairman of CUNA, CUNA Service Group Inc., and CUNA Mortgage Corp. from May 1985 to Oct. 23, 1987. He also was a former director and treasurer of U.S. Central CU, Lenexa, Kan. Visitation will be today from 4 p.m. to 8 p.m. at the Roberts Family Funeral Home at 555 Centennial Drive SW, Forest Lake, Minn. 55025. Funeral services will be Tuesday from 10 a.m. to 11 a.m., followed by a mass at 11 a.m. at St. Bridget's Catholic Church, 13060 Lake Blvd., Lindstorm, Minn.

Survey tells CU how its members are cutting back

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WINSTON-SALEM, N.C. (7/14/08)--Members of a North Carolina credit union are cutting back on driving and using online banking more as a result of high gas prices, according to a member survey. Truliant FCU conducted a two-question survey of 850 of it members to find out how high gas prices are affecting their use of online banking and their general spending habits (Weekly Update July 11). The first question was; “Considering high gas prices, do you feel online banking and Easy pay (Truliant’s bill pay service) will allow you to cut bank on your driving?” More than two-thirds of respondents said yes. Responses in three categories were:
* You bet, every dollar counts (68.8%); * Not really, I still need to make those trips anyway (27.9%); and * Depends how high gas prices go (3.3%).
The second question was: “We are interested in hearing about changes you are making to deal with high gas prices. Check all that apply.” The majority changed their driving habits, spent less and used online banking and bill payment. Responses were:
* Cut back on driving (79%); * Drive more conservatively to save gasoline (66.7%); * Spend less money on the essentials (41.9%); * Use online banking and Easy Pay more often (43.5%); * Cut back on summer vacation plans (41%); * Carpool (13%); * Walk or ride my bicycle (10.7%); * Sell my gas guzzler and buying a fuel-efficient vehicle (9.5%); * Use public transportation (5.3%); and * No changes because it’s not a problem for me (4.8%).
Some of the more than 400 suggestions made by survey participants were:
* Cut out all non-essentials; * No longer drive to the local park to walk for exercise; instead walk in the neighborhood and surrounding neighborhood, and reduce dining out expenses; * Bring lunch to work most days instead of driving out to eat; and * Plan better. Rather than going out and coming home several times a day, try to do as many errands as possible in one trip.

CU System briefs (07/11/2008)

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* KANSAS CITY, Mo. (7/14/08)--Mazuma CU's "What's the Big Idea Challenge" is helping Shila Poindexter fulfill her entrepreneurial goal to start a home health assisted-living company. Poindexter won the credit union's challenge, part of Filene Research Institute's i3 pilot program aimed at reaching those with an entrepreneurial spirit. Poindexter's reward: A $3,000 marketing package--including logo and stationery design and stationery printing costs--to help her launch her new business. "Shila's submission was well thought out and received by the judges as a feasible concept," said Ryan Reid, relationship architect at the more than $300 million asset credit union. Judges were current members who are also business owners. Erin Jones, Mazuma's vice president, business services, noted that engaging business members in the process helped strengthen the credit union's relationship with those members … * CHATSWORTH, Calif. (7/14/08)--Telesis Community CU introduced a "Hang Ten" certificate, which pays an annual percentage yield of 10% for a five-month term. The certificate is available through August for new and existing members who open their first Telesis checking account with direct deposit. It can be opened with a minimum deposit of $500 and a maximum deposit of $2,000. "In this time of high gas prices, consumers can use some good news for their finances," said Grace Y. Mayo, president/CEO of Telesis. Telesis has $600 million in assets ... * WYLIE, Texas (7/14/08)--The winner of a Texans CU 2008 Summer Send-Off Promotion received a trip for two to the Major League Baseball All-Star Game yesterday at Yankee Stadium in New York City. Susan Tarver (left), financial center manager, Texans CU's Wylie branch, presented a $1,000 check and the trip to winning member Steve Guggenbuehl and his wife Kelly. The six-week promotion encouraged members to open a new checking account and use their Texans check card for everyday purchases. Members who used their check card for a minimum of 10 signature-based transactions were automatically entered for the trip. Guggenbuehl made 22 qualifying transactions during the promotion. The prize package included roundtrip airfare for two, a two-night stay at the Sheraton New York Hotel and Towers, a $1,000 Texans Visa Gift Card, and two tickets to the All-Star Game …

California governor signs foreclosure protection law

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SACRAMENTO, Calif. (7/14/08)--California Gov. Arnold Schwarzenegger signed Senate Bill 1137 regarding residential mortgage foreclosure procedures into law Tuesday. The legislation applies to loans made from Jan. 1, 2003, to Dec. 31, 2007, secured by owner-occupied residential real property. SB 1137 requires:
* A mortgage lender or servicer to contact a borrower or satisfy due diligence requirements before filing a notice of default for assessing the borrower’s financial situation and exploring options to avoid foreclosure, according to California Department of Financial institutions (DFI); * That when a notice of sale is posted on the property for sale, the lender or servicer must mail a specific notice in English and five specific languages to the resident of a property subject to foreclosure sale; and * The legal owner must maintain vacant residential property purchased at a foreclosure sale or acquired through foreclosure. Fines of up to $1,000 per day for failure to maintain the property can be assessed.

N.C. mortgage services bill on way to governor

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GREENSBORO, N.C. (7/14/08)--A bill that would require mortgage servicers to be licensed in North Carolina was approved last week and is on its way to the governor’s desk. “The changes will have minimal impact on credit unions,” said Dan Schline, senior vice president, North Carolina Credit Union League association services. “But there were a few items added to the list of prohibited activities for lenders, including credit unions, making mortgage loans in North Carolina.” The provisions of the bill applicable to credit unions will be effective Jan. 1 (Weekly Update July 11). The bill aims to crack down on abuse by mortgage servicers by providing additional regulatory authority to the state’s banking commissioner. Prohibited activities include:
* Failing to provide notice to the borrower of force placed insurance; * Placing of insurance that exceeds the known value of the property; * Failing to refund fees for unearned premiums to borrowers; * Failing to provide borrow notice and itemized statement 45 before initiating foreclosure proceedings; and * Failing to make payments from escrow accounts in a timely manner.

Carolina budget includes two items of interest for CUs

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GREENSBORO, N.C. (7/14/08)--The North Carolina General Assembly approved a $21.4 million budget last week that includes housing-related appropriations and a fee increase to support floodplain mapping in the state, according to the North Carolina Credit Union League. The budget includes a $10 increase in the fee paid to the register of deeds when a deed of trust or mortgage is registered. Credit unions opposed the increase, the league said (Weekly Update July 11). With the increase, the assembly established a floodplain mapping fund to cover the state’s cost of providing floodplain maps to the Federal Emergency Management Agency. The budget also provides more than $14 million in funding for housing-related initiatives, including:
* Counseling services to help homeowners near foreclosure, $1 million; * Affordable housing for low-income citizens, $2 million; * Independent and supportive-living apartments for the disabled, $8 million; * Counseling and mortgage assistance to citizens at risk of foreclosure because of job loss, $3 million; and * Legal assistance to low-income consumers involved in predatory lending cases, $200,000.

White papers focus One-man marketing departments

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MADISON, Wis. (7/14/08)--Credit union professionals can learn how to balance the priorities and workloads of a one-person marketing and business development department in one of two new white papers from the CUNA Councils. Sponsored by the CUNA Marketing and Business Development Council, “Balancing Priorities in One-Person Marketing and Business Development Departments” focuses on the advice and experiences of nine credit union professionals who lead one-person departments. They discuss challenges, specialized tasks, outsourcing, technology use, personals tool and tips, and how they stay visible in the organization. The paper also addresses a common issue in one-person departments--finding help or backup in the credit union. One idea is to gain assistance from front-line staff with an interest in business development. “When work was slow at a new branch, a teller at First American CU in Beloit, Wis., asked the credit union to allow her to call small businesses to introduce the credit union and promote the value of direct deposit. That effort eventually developed into a business development position for the teller,” states the paper. The second paper, “Strengthening Member Connections: 2007 Best Practices Awards from the CUNA Operations, Sales, and Service Council,” profiles the efforts and initial results of two award-winning credit unions. Ascend FCU, Tullahoma, Tenn., won in the Branch Design category for the design of a new branch that translates into brick and mortar philosophy behind its new name, brand identity, and sales and service culture. Spokane Teachers CU, Liberty Lake, Wash., won in the Sales and Service Management category for its Conversation Engine, a member relationship management tool developed internally to suggest customized “conversation starters” to help front-line staff identify products and services to serve members’ financial needs. The awards--recognizing innovative solutions that optimize credit union performance--were presented during the council’s 10th annual conference in September 2007. For more information, use the links.

66 FCU shuts down fraudulent sites phone numbers

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BARTLESVILLE, Okla. (7/11/08)--66 FCU, Bartlesville, Okla., has submitted more than 45 websites and 40 phone numbers to be shut down by servers after scammers sent mass e-mails and text messages, and called members of the credit union asking for personal financial information. Of the credit union’s 47,000 members, 20 responded to the scammers through e-mail and phone. A total of $15,000 was withdrawn from members’ accounts, and the transactions were traced back to Chile, Romania and Spain, Chris Berger, 66 FCU director of marketing, told News Now. 66 has blocked transactions from those countries on members’ accounts. If members are traveling to those countries, they can contact the credit union and ask to have the block lifted, Berger said. The credit union sent e-mails to members about the scams. It also posted examples of fraudulent e-mail on its website--a “small percentage” compared to the total number of e-mails circulating, Berger said. “We try to post as many new ones as possible.” 66 has been affected by e-mail scams before, but this is the first time it has been hit by vishers and fraudulent text messaging. “We were prepared for both,” Berger said. “Nobody responded to the text messages.” The credit union reminded its members that it would never call them or send e-mails with links. 66 also is warning members against using numbers that have an outside area code to call the credit union. 66 has shut down several hundred websites because of scams in the past. The credit union may be targeted because it is prominent in the community, he said. It serves select employee groups--about 60% of Bartlesville, Berger said. Scammers called 90% of the population of Bartlesville--anyone with a 333 telephone prefix. “The fraud entities are getting smarter all the time,” he said. Berger noted that some members are concerned that 66’s data were compromised. Members should be reassured that their data is safe, said Marty O’Connell, 66 FCU chief information officer. “If our database was in fact compromised, then there would be no need for these criminals to send out fraudulent messages, since they would already have all the information that they are requesting.” The credit union encourages members who have been contacted by the scammers to report them. Individuals who suffer losses should file a complaint with the Federal Bureau of Investigation at, and call 800-VISA-911 to review and block transactions on their credit card.

CUs helping flood-ravaged Iowa members

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ST. LOUIS, Mo. (7/11/08)--The Iowa Credit Union Foundation is still accepting applications for aid to help those affected by flooding in Iowa, according to Marybeth Foster, executive director of the foundation. “At this point we have raised about $377,000 and would like to raise another $245,000 to meet the needs we’ve seen through the applications,” she told News Now. “The grants are each $500. The money is transferred from the foundation to the credit union to the member.” Credit unions in Missouri are helping Iowa credit union members affected by flooding with a $4,500 donation. Vantage CU, Bridgeton, Mo., sent an initial donation of $1,000 to the Iowa Credit Union Foundation and challenged other Missouri credit unions to contribute (CourierNet July 9). “I know our bottom lines are tight, but an opportunity to show what we are made of doesn’t present itself in this manner very often,” said Hubert Hoosman, Vantage president/CEO. “Our Iowa neighbors need us.” Other credit unions donating to the effort are:
* Anheuser-Busch Employees CU, St. Louis; * Century CU, St. Louis; * Mazuma CU, Kansas City; * Mid Missouri CU, Ft. Leonard Wood; and * United Consumers CU, Independence.
CommonWealth One FCU, Alexandria, Va., also donated $500 to the National Credit Union Foundation to help credit unions in Iowa. News Now has reported that credit unions in other states have helped Iowa also.

Trend for CUs is toward customized investments

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PLANO, Texas (7/11/08)--Credit unions increasingly are looking for customized investment instruments with higher yields to meet their needs in today's investments market, according to Southwest Corporate. With the economic slump, credit unions are shying away from off-the-shelf, one-size-fits-all investment opportunities. "Certainly, structured certificates have a place in the portfolios of many credit unions," said Zane Wilson, vice president of Southwest Corporate Investment Services. "However, more and more find they need flexibility and specific terms to meet their individual needs." More than half the structured certificate investments the corporate has created for its member credit unions in 2008 were customized certificates, specially designed investments known as "reverse inquiries." Southwest Corporate helped credit unions place more than $415 million in investments by creating 38 structured certificates during the first half of the year. Twenty of those were customized. The corporate noted that the growth in the customized certificates began four years ago. Investment information provided by the corporate has increased credit unions' awareness and understanding of customization, the corporate said. When investing, "credit unions should be aware that the highest rate is not always the best alternative," Wilson said. "While rates are certainly important, other factors such as option risk and cash flow play a role in shaping strategic investing." For example, credit unions currently can find five-year investment opportunities but short-term vehicles are more elusive, he noted. "Southwest Corporate is tending to short-term as well as the long-term investments," Wilson said. "With a struggling economy, credit unions should not hesitate to invest in 12- to 24-month durations. "However, with the steeper yield, if credit unions find their loan/asset ratio declining, they may have more capacity to consider longer-term certificates," he added. Cynthia Shi, vice president of portfolio management for Southwest Corporate, noted it creates and offers certificates "based on expectations and trends of where rates are going and what is in the best interest of credit unions." "From an investment standpoint, the first half of 2008 was tough," Wilson said. "Rates went down, then up, then down. Looking forward, (we believe) the housing slump and inflationary expectations will cast a strong shadow on an already sluggish economy. "The Fed will likely be 'on hold' for some time in regards to overnight rates, and credit unions can expect higher term rates over the long term, given the prevailing inflation expectations," he added. "With these conditions, credit unions can venture out in that one-two year range vs. staying in overnight cash."

CU System briefs (07/10/2008)

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* HARRISBURG, Pa. (7/11/08)--A Pennsylvania Credit Union Foundation grant recipient will be honored today for enhancing financial education at Cocalico High School, Lancaster County. Matt Bergman, a teacher there, will receive the Pennsylvania Office of Financial Education's annual "Ripple Effect Award" at the fourth annual Governor's Institute on Financial Education at Elizabethtown College. Bergman used his $2,154 grant to enhance a personal finance course with materials and software. He and three other teachers educated 336 students with 113 hours of financial education, totaling more than 38,000 hours of instruction. The grant "encouraged software use by students involved in a variety of activities that encouraged investment, savings, and even small business/entrepreneurial practices," said foundation Executive Director Joe Wambach. Bergman followed up on a foundation presentation at the institute in 2007 and partnered with LANCO FCU, Lancaster, to implement "an outstanding project," Wambach said (Life is a Highway July 10) … * ST. LOUIS (7/11/08)--The Missouri Credit Union Association (MCUA) met with state Rep. Sam Page (D-82), a candidate for lieutenant governor, Monday to discuss credit union issues and concerns. The meeting is part of MCUA's efforts to better inform candidates about the credit union difference (CourierNet July 9). He is shown meeting with Peggy Nalls, MCUA senior vice president of public/legislative affairs, who also asked for his help in supporting financial education legislation in 2009. (Photo provided by the Missouri Credit Union Association) … * ABERDEEN, Md.(7/11/08)--Aberdeen Proving Ground FCU ranks as No. 1 in Maryland for youth financial literacy efforts, according to a listing by the National Youth Involvement Board (NYIB). In 2007, the $622 million asset credit union delivered 226 financial presentations to more than 4,500 students throughout Harford and Cecil counties. It also ranked in the Top 10 list for the total number of students reached and presentations delivered in the nation … * MAPLE GROVE, Minn. (7/11/08)--TopLine FCU has added free financial preparedness services for its members and employees through the Financial Choice program from LSS Financial Counseling. "It can be tricky to keep on top of it all, so we look at our partnership with LSS Financial Counseling as another convenient tool to help our members and employees get smart with and manage their money," said TopLine President/CEO Harry Carter. LSS is a member of the National Foundation for Credit Counseling and provides face-to-face debit counselor, a counselor-on-call hotline and financial education. TopLine, based in Maple Grove, has more than $250 million in assets ... * ST. PETERSBURG, Fla. (7/11/08)--PSCU Financial Services is providing grants for 12 elementary, middle and high schools teacher to attend the 2008 Credit Union Week at the Colonial Williamsburg Foundation’s Teacher Institute in Williamsburg, Va. The event supports educational efforts regarding the foundation of the nation’s landmark democracy. Credit Union Week for middle school and high school teachers will be July 23-30; elementary school teachers will attend from July 29-Aug. 5. The interactive seminar equips American History teachers with a fresh approach to communicating the principles of America’s history and system of government, said PSCU Financial Services. The grant provides more than $2,000 for each teacher and covers program admission, room and meals, and a $200 stipend for travel expenses or the purchase of educational materials …

In tight times Mountain America doubles auto loans

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SALT LAKE CITY (7/11/08)--Mountain America FCU has seen a large increase in auto loans while much of the credit union industry has seen a plateau or decline. In April, the $2.7 billion asset, West Jordan, Utah-based credit union ran an auto loan promotion and brought in a record-breaking $110 million in loans--an amount that is nearly double any of its previous auto loan campaigns. “Our best month previous to this was about $65 million,” said Nathan Anderson, Mountain America’s senior vice present of marketing. With a budget of about $10,000 and “Route 66” as the theme, Mountain America ran a full-fledged campaign including newspaper, magazine, radio and television ads, billboards and in-branch advertising. “We put together a full campaign so members and nonmembers alike could take advantage of this opportunity,” Anderson explained. “We wanted our message to be clear and concise, so we really focused on the [4.49%] rate and made sure that people saw it in multiple places.” Anderson noted the creativity of the Mountain America’s marketing department, and said that much of the campaign’s success can be attributed to the credit union’s branches. “Our branch employees really worked hard to give great service, even with the increased volume,” he said.

California DFI raises CU assessment rate

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SACRAMENTO, Calif. (7/11/08)--The California Department of Financial Institutions (DFI) has raised the assessment rate on credit unions in the state for this year and next year. The 2008-2009 assessment rate was set at $0.59 per thousand dollars of total assets--about a 14-cent or 23.7% increase from last year’s rate of about $0.45, according to a memo sent to California state-chartered financial institutions by DFI Commissioner William S. Haraf. Invoices were mailed to each licensee on June 30, and will become delinquent if not paid by July 21. The statutory maximum rate is $2.20 per thousand dollars of total assets. Haraf also announced that DFI is adding additional benchmarking data from credit union and bank call reports to its website. DFI will update the data each quarter. The data were initially prepared as part of Haref’s due diligence efforts to become familiar with the condition of DFI licensees, he said. The new feature is an analysis of key industry ratios--such as equity to asset ratios, return on assets, delinquencies to total loans--by quintile and size. For each ratio, institutions are ranked from highest to lowest within their size range and divided into five groups or quintiles. Each quintile reports an arithmetical average of the ratios for the group. These data offer a useful measure of the dispersion of outcomes for the state’s credit union and bank licensees, unlike the simple averages previously reported, Haraf explained.

Polish and Slavic FCU grants 300000 in scholarships

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NEW YORK (7/11/08)--The Polish & Slavic FCU (PSFCU) finished off its annual scholarship program this year by donating $300,000 to more than 250 high school and college students throughout the tri-state New York area. Over the past seven years, PSFCU, the largest U.S. ethnic credit union, has given over $1.3 million to more than 800 students. In 2007, almost $300,000 was granted in scholarships to 191 students. With more than 70,000 members, the PSFCU scholarship program annually earmarks about $4 per member toward scholarships. “Time and again, our members have expressed their support for the program and the collective will to grow it,” said Bogdan Chmielewski, CEO. “That’s where our strength is. There are many banks that try to lure our members, but none that are willing to match our program. “There is no better example of how a local credit union can make a difference in this community than helping improve the educational prospects for the young generation,” he added. At a recent event in Brooklyn, PSFCU provided scholarships--ranging from $1,000 to $5,000--to undergraduate and graduate-level students. An independent panel of 12 people reviewed nearly 200 applications before choosing the final 144 winners. Joining forces with the Credit Union Association of New York earlier, PSFCU awarded 115 college-bound high school graduates with scholarships ranging from $500 to $1,750. This marks the seventh year that PSFCU has worked with the league to promote higher education for New York area students.

State regulators to discuss UBIT other topics at summit

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ARLINGTON, Va. (7/10/08)--The unrelated business income tax (UBIT) and other topics and their impact on state-chartered credit unions will be a discussion focus at the 2008 National Association of State Credit Union Supervisors (NASCUS) State System Summit. The summit meets Aug. 21-23 in Seattle. Catherine Tierney, president/CEO of Appleton, Wis.-based Community First CU, will join a member of the UBIT Steering Committee to discuss her credit union's UBIT litigation against the Internal Revenue Service (IRS). The lawsuit was filed Jan. 15. Since then, another lawsuit has been filed and the steering committee expects more. In a second session, Kevin Fincher, CPA and partner at Clifton Gunderson, will provide updates on UBIT and credit union filing requirements. He will address recent IRS developments, rate arbitrage and specified payments from controlled entities, and the use of unrelated business losses to offset unrelated business income. Other topics include: charitable contributions, royalty income, debt cancellation income, methods for reasonable cost allocations and ideas to reduce UBIT liability. Fincher also will review reporting requirements under FIN 48 and the newly revised IRS Form 990, Return of Organization Exempt From Income Tax. For more information, use the resource link.

Pennsylvania treasurer commends Better Choice loans

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HARRISBURG, Pa. (7/10/08)--Pennsylvania Treasurer Robin L. Wiessmann issued a press release Tuesday commending the Pennsylvania Credit Union Association (PCUA) for winning a national award for the marketing of the Credit Union Better Choice program. The program, which provides a short-term loan alternative to payday lending, was developed through a public-private collaboration between the Pennsylvania Treasury Department and the PCUA (Life is a Highway July 9). "I applaud the staff at PCUA who work diligently to ensure that every Pennsylvania family learns how to make the better choice when seeking short-term loans,” Wiessmann said. “Even more importantly, PCUA has worked hard to promote the savings and financial literacy components of the program, which allow consumers to make an important investment in their futures.” The program won first place in the Best Community Relations Program category, and earned the PRO Best of Show. The awards were announced at a recent luncheon in Washington, D.C., during the Communications/Government Affairs Professionals Conference, sponsored by the American Association of Credit Union Leagues. Since the program’s launch in late October 2006, 72 credit unions with 193 locations have agreed to offer Credit Union Better Choice loans, with additional participants continuing to sign on, PCUA said. Among the participating credit unions, 50 made 5,706 loans totaling $2.7 million dollars in volume.

Mission SF survey City must work together on youth savings

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SAN FRANCISCO (7/10/08)--The entire city of San Francisco needs to work together to ensure that all youth who earn wages or stipends have an account at a financial institution and financial training. That’s the main recommendation of a survey conducted by Mission SF FCU. Members of the Mission SF Community Financial Center’s Youth Credit Union Program (an affiliate of the credit union), its Action Research Committee (ARC), and its training arm--Youth Trainers for Economic Power (YTEP)--presented their findings and recommendations in a special meeting with city officials and community organizations. The findings and recommendations are a culmination of a four-month study of low-income youth and immigrant parents throughout San Francisco. From October 2007 through February 2008, teens from the Center’s Youth Credit Union Program, ARC and YTEP conducted focus groups and surveys. They found half of the young people surveyed do not have accounts, even though half earn a paycheck. And many use check cashers to cash their paychecks. On the plus side, many of these teens and their parents expressed interest in financial training and college preparation. Adult attendees brainstormed ways to collaborate toward achieving the main recommendation. “I loved how adults were actually listening to youth [at the meeting],” said Diane Tello, a 17-year-old youth researcher. “People came up to us saying, ‘Great job’ or ‘do you want to present to us?’ so I know they liked it,” said 17-year-old Luisa Sicairos. The adults were influenced by what they heard. About 95% reported--after hearing the presentation--that they thought accounts for youth that earn money were more important than before, Mission SF FCU said. The same percentage expressed interest in taking steps with staff and/or a board to determine how their agency or department could do more to support youth in these two areas. Mission SF FCU sponsors the youth program. YTEP is partially funded by a grant from the Richard Myles Johnson Foundation--the foundation for California and Nevada credit unions. Other supporters include San Francisco-based Patelco CU, and the National Credit Union Foundation.

Bay Federals flagship program targets youth

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CAPITOLA, Calif. (7/10/08)--Bay Federal CU’s youth financial program has helped create a company-wide awareness that educating people about their finances empowers them to lead more secure and fulfilling lives, according to Carrie Birkhofer, Bay Federal president/CEO. Angelica Reyes developed the Capitola, Calif.-based Bay Federal’s youth program in 2004 when the credit union joined Santa Cruz Community CU in a Bridge Project Grant. The grant was sponsored by the Ford Foundation and the National Federation of Community Development Credit Unions. The grant provided seed money for Bay Federal to create a program for economically disadvantaged youth in the area. Bay Federal serves Santa Cruz, San Benito and Monterey counties. After conducting a needs assessment in the area, Reyes created more than 80 hours’ worth of PowerPoint presentations in English and Spanish with lessons tailored from a curriculum offered free by the National Endowment for Financial Education. Subjects include the importance of general education, the importance of saving, money math, balancing checkbooks, managing credit, retirement savings, needs versus wants, how kids can make money and budgeting. She has delivered the presentations in English and Spanish to more than 5,000 students and 5,000 adults. The program is free to teachers of grades five through 12, parents and community groups. “Discussion with kids about wants and needs really hits home,” Reyes said. “I want kids to understand that money won’t buy happiness, but it opens up a world of opportunities.” Reyes also began teaching adults because she saw that her young students were losing interest in good money habits if their families weren’t serving as good role models. “Money is not the problem--they work very hard and they have the money,” she said. “The problem is what they do with the money.” The emphasis on youth has paid off. At the end of Youth Week, held April 21-26, new youth account deposits at the credit union totaled $196,861. “Our employees were especially motivated because they like helping children in our community, and Youth Week gave them an opportunity to help create a brighter future for kids,” Birkhofer said. Bay Federal has more than $600 million in assets.

MCUA research Subprime loans not the real problem

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ST. LOUIS (7/10/08)--Missouri shouldn't blame subprime mortgage problems on subprime loans, but on institutions that mismatch people's income and ability to repay with the amounts borrowed, says a credit union researcher.
Nancy Pierce, right, president of Tipton Research Group, outlines the findings of a Missouri subprime mortgage lending study to, from left: Virgil Mueller, Anheuser-Busch Employees' CU; Missouri State Reps. Pat Yaeger (D-96) and Jeff Roorda (D-102), and Jill Schupp, Democratic state representative candidate for District 82. (Photo provided by the Missouri Credit Union Association)
The Missouri Credit Union Association (MCUA) commissioned a study, "The Subprime Mortgage Impact on Missouri Consumers," by Nancy Pierce, president of Kansas City-based Tipton Research Group, and Robert O. Weagley, department chairman for personal financial planning at the University of Missouri. Pierce presented the survey's findings Tuesday in St. Louis at the first of three statewide subprime mortgage impact meetings (I>CourierNet July 9). Roughly 25 credit union leaders and state lawmakers participated in meeting, where Pierce presented information focused on the subprime mortgage crisis, how it affected Missourians and suggested responses by lawmakers, credit unions and consumers to the crisis. Pierce told The Kansas City Star (July 9) that she found that the state's subprime loan problems had much to do with mismatches between buyers' income levels and the amount of money they were borrowing, not the kind of loan itself. Some lenders improperly qualified buyers based on temporary low interest rates that held down house payments. When interest rates jumped and house prices rose, they went delinquent because many subprime loans carried adjustable rate mortgages, the article said. "Credit unions need to be good advisors," said Pierce in CourierNet. "If you don't offer home mortgage loans, partner with another credit union or credit union service organization (CUSO) so you can direct your members to a reputable source." Missouri's foreclosure rate at the end of 2007 was up 91.4% from one year ago, according to Realtytrac. The mortgage delinquency rate is above the national average. "We have a responsibility to educate our members so that they have the power to say 'no' to the persuasive talk of the mortgage broker who doesn't necessarily have our member's best interest in mind when they go to the closing table," Debora Atherton, attendee and vice president of real estate lending at Anheuser-Busch Employees' CU, told CourierNet. Attendees at the session included Rep. Jeff Roorda (D-102), Rep. Pat Yaeger (D-96) and Jill Schupp, Democratic state representative candidate for District 82. Representatives from nine credit unions also attended.

CU System brief (07/09/2008)

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* FARMERS BRANCH, Texas (7/10/08)--The Texas Credit Union League is reminding state credit unions that their support is needed for the Texas Credit Union Commission, which is up for Sunset review in 2009. The commission is an independent regulator and comes up for review every 12 years. “This is standard,” Buddy Gill, the league’s chief advocacy officer, told News Now. “It’s not unusual.” He also noted that “so far, things are going smoothly” with the regulator and the standard Sunset review process. The league thanked a number of credit unions who have already written letters to the Sunset commission voicing their support for the Texas Credit Union Commission and Department (LoneStar Leaguer July 9) ...

One prison area two CUs A forced-merger vote pending

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COXSACKIE, N.Y. (7/10/08)--About 500 employees of two adjacent correctional facilities in one New York state location--Coxsackie, N.Y.--have asked a second credit union to take over their credit union. The members are dissatisfied with the services provided by their credit union and are asking another area credit union if it is willing to step in and assume control, according to a credit union executive. Chris Langley, president/CEO of Naponoch, N.Y-based Eastern New York FCU, told News Now that a group of members said the Coxsackie Correctional Employees FCU is not meeting their needs. The employees work at the adjacent Greene Correctional and Coxsackie Correctional facilities. New York allows only one credit union to be located on a defined area of state-owned land, Langley said. “They asked us to get involved,” Langley said. “They’re circulating a petition to call for a special meeting. That’s the lion’s share of the situation.” Virginia Magee, manager of Coxsackie Correctional Employees FCU, said she had “no comment” about the situation when contacted by News Now. Only 25 members’ signatures are needed to hold a special meeting of the 500-member Coxsackie Correctional Employees FCU, Langley said, adding that he believes the membership will “force the hand” of the credit union and decide to remove the credit union’s current board of directors. Members are questioning the services of the Coxsackie FCU, which is open four hours a day for five days a week, and doesn’t offer any cash services--no checking accounts, ATMs or debit cards, Langley said. “All it offers are consumer loans and savings accounts,” Langley explained. “If a member gets a loan they are given a voucher by the credit union and they have to take it to a bank where they get charged. The prison guards have to go to a local bank to cash their paychecks; they can’t do it on site. The credit union there has a profit orientation.” Eastern New York FCU has a Trade, Industry and Professional (TIP) charter that serves a nine-county area with full-service branches, Langley said. “There’s been misrepresentation [in the media] that Eastern is trying to beat up on and take over a small credit union,” Langley said. “That’s not the case. The only ones who can push for a merger vote are the members themselves. Credit unions are a democratically controlled institution. The members should be able to drive and decide this situation. “I’ve tried to talk to Coxsackie [FCU], but we’ve been stonewalled,” Langley added.

WOCCU stats Global CU movement expanding

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MADISON, Wis. (7/10/08)--Credit unions worldwide are expanding at a stable pace, with more members served in 2007 than in 2006, according to new statistics from the World Council of Credit Unions (WOCCU). Ninety-six countries reported that 49,134 credit unions served more than 177 million people worldwide in 2007, according to the just-released WOCCU 2007 Statistical Report, an annual survey.
Click to view larger image View the PDF version.
In 2006, roughly 46,377 credit unions served slightly more than 172 million members in 97 countries. Credit union assets around the globe grew by 8.2% over the previous year, totaling US$1.2 trillion in 2007. Credit unions managed more than $900 billion in savings. Africa led asset growth last year with a 37.3% increase. Capitalization levels, a measure of financial soundness, remained strong at 9.8% of total non-risk-adjusted assets in 2007--demonstrating that the international credit union movement is on solid financial footing, said WOCCU. Global membership in credit unions grew by 3.1% in 2007 compared with the previous year, with Africa again leading the growth curve with 15.1% growth. WOCCU has collected annual statistics on the international credit union movement for the past 35 years to produce its annual Statistical Report. To download a free copy of the current report, use the resource link.

Governor signs five mortgage bills in Pa.

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READING, Pa. (7/10/08)--Pennsylvania Gov. Ed Rendell Tuesday signed five bills to protect homebuyers, strengthen oversight of the mortgage industry and end key lending practices that leave
Pennsylvania Gov. Ed Rendell noted that the mortgage process "needed tougher oversight. We're going a long way toward putting that oversight in place today." (Photos provided by the Pennsylvania Credit Union Association)
homeowners vulnerable to foreclosure, said the Pennsylvania Credit Union Association (PCUA). He also urged current homeowners worried about meeting their mortgage obligations to call the state for help (Life is a Highway July 9). A representative of PCUA--Christina Mihalik, assistant vice president of governmental affairs--attended the signing ceremony in Reading. The new laws:
From left, Christina Mihalik, assistant vice president, governmental affairs at the Pennsylvania Credit Union Association, meets with officials who played key roles in the state's mortgage reform legislation, including Dave Callen, majority executive director of the House Commerce Committee; Rep. Peter Daley, chairman of the House Commerce Committee; and Lesley Crozier, legislative assistant to Sen. Patrick Browne.
* Require loan salespeople to be licensed by the state Department of Banking (H.B. 2179); * Allow the department to more quickly inform the public about enforcement activities against mortgage companies (S.B. 484); * Restrict prepayment penalties (S.B. 483); * Increase fines for misconduct by real estate appraisers (S.B. 485); and * Require mortgage companies to notify the state when they intend to foreclose (S.B. 486).
Also attending were: Secretary of Banking Steve Kaplan and Executive Assistant to the Secretary Paul Wentzel; State Rep. Peter Daley, chairman of the House Commerce Committee; Rep. David Kessler; Rep. Dante Santoni; Rep. John Siptroth; Rep. Curtis Thomas; Sen. Michael Brubaker; Sen. Christine Tartaglione; Sen. Michael O’Pake; and Brian Hudson of the Housing Finance Authority.

Federations youth group makes a difference

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DALLAS (7/10/08)--Twenty-four middle- and high-school youth representing six Community Development Credit Union (CDCU) Youth Credit Union Programs (YCUP) gathered in Dallas for a youth conference during the National Federation of Community Development Credit Unions’ 34th Annual Conference on Serving the Underserved.
Click to view larger image Youth representing six Community Development Credit Union Youth Credit Union Programs gathered in Dallas for a conference during the National Federation of Community Development Credit Unions’ 34th Annual Conference on Serving the Underserved.
“These youth are at their CDCUs on a regular basis learning the skills they need to succeed and become important stakeholders in their communities,” said Federation President/CEO Cliff Rosenthal. The conference opened with youth spending their first full day at the Jubilee Center, a revitalization project in Dallas. “We helped them prepare classrooms for the summer, and then we got to participate in activities with some of the same kids we were helping,” said Andi Ball-Meza, one of four attendees from Women’s Southwest FCU, Dallas. One highlight of the conference was a presentation by Elsa Ramos and Stephanie Lopez, two youth from Mission SF FCU, San Francisco, who work as youth trainers for economic power. They taught youth how to run peer training programs. “Ramos and Lopez teach like seasoned trainers,” said Pamela Owens, Federation director of education and training. “Their program is an incredible resource.” Other workshops included Building Cooperative Leadership 101, where youth learned about cooperatives from Tom Decker, national program director, Credit Union Center for Social Impact Management. Virginia Trevizo-Wells, a trainer from the PLAN fund, a peer lending institution in Dallas, taught a workshop on entrepreneurship and micro lending.
Click to view larger image During the conference, youth participated in a Mad City Money simulation game, donated by the Credit Union National Association. At right is Shreveport FCU's Tarsha Williams, stationed at "Really Realty." (Photos provided by the National Federation of Community Development Credit Unions)
Youth also participated in Mad City Money, a simulation game donated by the Credit Union National Association. One participant said afterward that she learned to “make a budget, go to the credit union first and be sure to put money away for emergencies.” “It’s great to see all these youth who are excited about credit unions and financial literacy,” said Dan Apfel, fderation youth program coordinator. “We love having them at the conference every year and hope to attract even more credit unions to participate next year.” The fderation has hosted yearly CDCU Youth Conferences during its annual conferences for more than 10 years. CDCUs in the federation’s Youth Credit Union Network offer youth savings accounts, financial literacy and leadership development programs. The 15 CDCU programs have $1.5 million in assets and more than 3,000 youth members nationwide.

20 CUs top best CU brands lists

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BIRMINGHAM, Ala. (7/9/08)--Twenty credit unions are standouts because of powerful brands that help differentiate them from others, according to Bancography, a Birmingham, Ala.-based organization that ranks financial institution brands. Leading the list of best brands among the nation's largest credit unions, with assets of at least $1 billion, are:
* Mountain America CU, West Jordan, Utah; * Arrowhead CU, San Bernardino, Calif.; * JSC CU, Houston; * University of Wisconsin CU, Madison, Wis.; * Police & Fire FCU, Philadelphia; * GECU, El Paso, Texas; * Chevron FCU, Oakland, Calif.; * Tinker FCU, Oklahoma City; * MidFlorida FCU, Lakeland, Fla.; and * Onpoint Community CU, Portland, Ore.
For credit unions with assets less than $1 billion, top ranking brands are:
* ASI FCU, Harahan, La.; * Trona Valley Community FCU, Green River, Wyo.; * First Community CU of Houston, Texas; * White Sands FCU, Las Cruces, N.M.; * Pelican State CU, Baton Rouge, La.; * Utah Central CU, Salt Lake City; * Water & Power Community CU, Los Angeles; * Golden Plains CU, Garden City, Kan.; * Midland (Texas) Community FCU; and * Complex Community FCU, Odessa, Texas.
In calculating brand value, Bancography quantifies the proportion of each institution's long-term value attributable to intangible factors that constitute a brand--including reputation, service quality, image and market awareness. The brand value index identifies institutions that produce financial results beyond what their capital base, market conditions and competitive environments would predict. The leading brands show consistently strong earnings performance and the ability to grow deposits without paying above-market rates, said Bancography. "In the banking industry, product offerings are often very similar among competitors, so it is paramount for financial institutions to build differentiating brands," said John Mathes, Bancography director of brand strategy.

Haiti mob kills two suspects in CU robbery

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PORT AU PRINCE, Haiti (7/9/08)--A Haitian mob killed two journalists in what was believed to be retaliation for robbing a local credit union, the United Nations said Sunday. A member of the mob also died (British Broadcasting Corp. and Caribbean Media Corp. July 8). Georges Honourat, assistant secretary-general of the leftist National Popular Party, identified the two men as Prad Jean Vernet and Adrien Michel, journalists with a newspaper run by a small Haiti Progress Party. They were campaigning for a seat in the Haitian Senate, he said. A UN police spokesman said the mob suspected the men of helping steal more than US$1,800 from the credit union, near the northern port of Cap-Haitien. The credit union was not identified in the report.

Regulator California CUs grew in first quarter

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SACRAMENTO, Calif. (7/9/08)--California credit unions experienced slight growth in combined assets, total loans, shares and capital for the 12-month period ended March 31, according to the California Department of Financial Institutions (DFI). The DFI released its First Quarter 2008 report on Monday. At $73.6 billion, credit unions’ assets rose 4% from $70.8 billion reported at the end of the first quarter 2007. Loans increased 3.4% to $51.7 billion from $50 billion, while shares rose 2.3% to $61.7 billion from $60.3 billion. Members’ equity rose to $7.6 billion from $7.5 billion--a 2.3% rise. The allowance for loan losses went up 82.6% to $537.9 million from $294.5 million. Seven fewer credit unions existed in the state at the end of the quarter. The number of credit unions decreased 2.5% to 196 from 203. For the same period, the number of state-chartered banks increased by 6.4% to 215 from 202. Bank’s assets rose 7.1% to 226.7 billion during the quarter. Their deposit growth increased 3% to $156.3 billion.

Iowa CUSO sues real estate developer in default

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DES MOINES, Iowa (7/9/08)--An Iowa credit union service organization (CUSO) is the eighth lender to file suit against a residential development project that is in default. Community Business Lenders, based in West Des Moines, filed the lawsuit late last week in Dallas County District Court against Regency Cos., developers of Michael's Landing. The suit says Regency's executives defaulted on nearly $12 million in loans for the project. The CUSO is owned by the Iowa Credit Union League and two credit unions--Community Choice CU of Johnston and MEMBERS lst Community CU, based in Marshalltown. The lawsuit names as defendants Regency executives Jamie Myers, Richard Moffitt and John Gamble, as well as partners Michael Medved, Josh Reel and Darryl High and says they defaulted on two notes for $9.5 million and $2.4 million. The CUSO's lawsuit is the largest filed so far by eight lenders accusing Regency officials of defaulting on more than $56.76 million in loans. The group says the company owes them $51.7 million. Regency ceased operations in April, citing the troubled housing market and tightened financing.

Washington CUs kick off viral marketing campaign

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FEDERAL WAY, Wash. (7/9/08)--The Washington Credit Union League has kicked off a viral marketing campaign, “Change is Beautiful,” featuring webisodes with a well-known actor. Carl Weathers, who has appeared in “Rocky,” “Predator” and “Happy Gilmore,” plays a philosopher who travels from spot to spot, dropping Confucius-like affirmations on unsuspecting humans (Focus Newsletter June 16). The webisodes with Weathers are available at The site allows people to sign up and receive a weekly message from Weathers, the league said. Since April 14, commercials from the campaign have appeared on channels in Washington during programs such as “American Idol,” “Ghost Whisperer,” “Survivor,” “Law and Order,” and “Biggest Loser.” The current commercial features a 20-something woman driving with three others through a four-way intersection. The Cooperative Advertising Committee and Big Bang advertising agency developed “Change is Beautiful”. The effort is supplemented by This year’s campaign is similar to last year’s, but the viral portion is new. Bill Grant, Big Bang representative, said the viral content has more entertainment value. “The single most important insight about this campaign is that young bank customers are an apathetic lot,” Grant. “Engaging them creatively will help result in them rewarding us with a little more active thought about an alternative banking experience.” The Credit Unions of Washington Cooperative Advertising Committee funded the campaign through commitments from credit unions. “The more support this effort gets, the better off all of the credit unions in Washington will be,” said Kristina Walters, committee treasurer and vice president of marketing and business development for Washington State Employees CU, Olympia.

CU Aid grant helped couple who lost home in wildfires

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SAN DIEGO (7/9/08)--A donation of $3,300 from CU Aid helped two members of Point Loma CU rebuild their home after it was destroyed by wildfires last year in San Diego County.
(From left) Julia and William Fernstrom received a $3,300 grant from Point Loma CU President/CEO Ted Dennis on behalf of CU Aid. The money will help the couple recover from last year’s wildfires, which destroyed their home in San Diego. (Photo provided by Point Loma CU)
“We are so thankful,” said William Fernstrom, who lost his home in the fire. He and his wife, Julia, have been members of Point Loma since 1969. “There are so many little things that insurance and the federal government don’t cover, such as landscaping. “This will help make our lives seem normal again,” he added. CU Aid is a natural disaster relief program administered by the National Credit Union Foundation (NCUF) and state credit union leagues. It raises funds through donations from the credit union community, and helps credit union employees, volunteers and members who have suffered unrecoverable losses. Over the past eight months, NCUF and the California Credit Union League have disbursed $133,000 in CU Aid grants to credit union members in Southern California whose homes burned down in October 2007, Steve Bosack, NCUF deputy director, told News Now. “In the midst of tragedy, it’s good to see that credit union members all across the country are ready and willing to help,” said Ted Dennis, Point Loma president/CEO.

CU System briefs (07/08/2008)

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* HARRISBURG, Pa. (7/9/08)--The Pennsylvania Credit Union Association (PCUA) was expected to attend Gov. Ed Rendell's signing ceremony Tuesday for five mortgage reform bills. PCUA said Christina Mihalik, assistant vice president at the association, would attend the ceremony scheduled for noon in Reading. The bills protect homebuyers, strengthen oversight of the mortgage industry and end key lending practices that leave homeowners vulnerable to foreclosure, said the association (Life is a Highway July 8) … * HARRISBURG, Pa. (7/9/08)--The appointment of Joel S. Ario, acting Pennsylvania insurance commissioner, as Pennsylvania's new state insurance commissioner was unanimously approved Thursday by the state Senate (Life is a Highway July 8). Last year Gov. Ed. Rendell had nominated Ario, formerly chief insurance regulator of Oregon, but partisan differences over insurance delayed the confirmation. As acting commissioner, Ario was considering allowing a merger between Independence Blue Cross of Philadelphia and Highmark Inc. of Pittsburgh, the state's two largest health insurers … * SPRINGFIELD, Mass. (7/9/08)--Freedom CU issued new debit cards and personal identification numbers (PINs) to members after debit card data was electronically captured by individuals for use in a counterfeit scheme (The Republican July 2). In a letter to the affected members, the $315 million asset credit union said it had been notified that the members' card numbers were obtained during the arrest and indictment of individuals in Eastern Europe and the U.S. The existing cards will be coded as stolen as of Monday and their cards and PINs will be replaced … * LAS VEGAS (7/9/08)--A U.S. District Court judge in Las Vegas sentenced former Marine Edgar Alejandro Hermosillo of El Paso, Texas, Monday to 18 months in federal prison for stealing identities and looting accounts of Marines stationed in Iraq (Associated Press Newswires July 7). He was accused of using government computers at Camp Pendleton, Calif., to access accounts at Pacific Marine CU of at least 15 enlisted Marines. He pleaded guilty on April 2 to federal conspiracy, wire fraud and ID theft charges. An unidentified co-conspirator allegedly helped Hermosillo use false IDs at Western Union outlets to collect about $39,000 from 26 accounts. Hermosillo also was sentenced to five years of supervised probation after prison and ordered to repay the funds stolen and undergo mental health counseling … * BALTIMORE (7/9/08)--MECU of Baltimore Inc. President/CEO Bert J. Hash Jr., left, discusses book choices with a student during the credit union's annual distribution of books at six partner schools. For the past seven years, employees at MECU have collected books to distribute at the schools at the end of the school year to each student. In 2008, the team collected 3,730 books. Some employees give books their children have outgrown. Others scour yard sales and flea markets, and Goodwill. To help cover the costs, employees conducted a flea market at MECU's headquarters and seven branches and raised more than $800 to purchase books. Books that are too young for elementary school age children are donated to Our Daily Bread's Family Corner. (Photo provided by MECU of Baltimore Inc.) … * MIAMI (7/9/08)--National media tuned in to a two-county police chase Monday morning of a credit union robbery suspect in Doral, Fla., near Miami. The 10-minute chase from Miami-Dade County to Broward County and back attracted media helicopters who broadcast the pursuit. A national television morning program broadcast it Tuesday. The chase ended with the arrest of Terrence Clark, 31, of Miami. Clark, wielding a large stick, allegedly entered Dade County FCU at about 9:30 a.m. and demanded money from a teller, who complied. Police recovered the all the $7,500 taken ( July 8) …

Colorado association appoints new board member

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DENVER (7/9/08)--Kristi Porter, president/CEO, Western Rockies FCU, Grand Junction, Colo., will serve on the board of directors for the Credit Union Association of Colorado (CUAC) and Credit Union Strategic Partners (CUSP), CUAC announced Monday. CUSP is the credit union service organization of CUAC. Porter serves on the CUAC governmental affairs committee and has been with Western Rockies FCU for 28 years. She also recently completed her first year in the Southeastern Regional Credit Union National Association Management School in Georgia. “Porter has been a hardworking member of the governmental affairs committee and will be a valuable addition to our association board,” said John Dill, CUAC president/CEO.

Elliott named to NCCUL board of directors

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FORT BRAGG, N.C. (7/8/08)--Fort Bragg FCU President/CEO David Elliott was named to the board of directors of the North Carolina Credit Union League during the league's 73rd Annual Meeting June 11. He will represent the Southeast Chapter of Credit Unions and serve the remainder of Richard Jefferson's term, which ends in 2009. Jefferson left the board in June to help start a new financial institution in Jacksonville, said the league (Weekly Update July 3). Elliott will be eligible to run for re-election to a full three-year term in 2009. A 30-year veteran of credit unions, Elliott began his credit union career at Members CU, Winston-Salem, and joined Fort Bragg FCU in 1989. He has served as CEO since 1996.

Southeast Corporate phone numbers change next week

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TALLAHASSEE, Fla. (7/8/08)--Southeast Corporate FCU will be installing a new phone system, which means its extensions and direct dial numbers will change, effective July 14. The Tallahassee-based corporate said it will have one main toll free number: 800-342-0203. Although all extensions and direct dial numbers will change, phone options in the system will remain the same.

Louisiana league reports temporary fax outage

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HARAHAN, La. (7/8/08)--The Louisiana Credit Union League is experiencing a temporary interruption with its fax system, the league said yesterday. Faxes sent within the last week have not been received. The league is working to resolve the issue. To contact the league, please call 800-452-7221. E-mails also can be sent to individual staff members.

TraceSecurity Improve server networks to avoid hackers

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SAN DIEGO (7/8/08)--Credit unions need to place their ATM servers onto secured private segments on their networks to avoid hackers, said TraceSecurity Chief Technology Officer Jim Stickley. Placing the servers on different networks is “not expensive,” Stickley told News Now. “It’s easy to do. But people ignore it and it comes back to bite them.” Credit unions are more likely than other financial institutions to keep their information on the same networks. About 90% of credit unions that Stickley has worked with are set up that way, he said. “Financial institutions need to do a much better job setting up their network infrastructure,” Stickley said. “Many organizations make the assumption that as long as the servers are behind a firewall they are safe. That is simply not the case.” Credit unions also should monitor their logs “for anything that falls out of the norm.” TraceSecurity disclosed last week that Citibank customers whose funds were hacked through a connection between ATMs and third parties processing their personal identification number codes are just “the tip of the iceberg” when it comes to the overall security and compliance of the networks that process ATM transactions. “Most peoples’ home personal computers are better protected from malicious hackers than many ATM servers,” he added. “Financial institutions are failing to perform patch updates to ATM servers because third-party vendors aren’t approving the patches to be applied to the systems running their ATM software. As a result, hackers could easily exploit known security holes in operating systems.” Vendors can’t always push patches right away because they change the way the codes work with ATMs’ software. In some cases, the changes could break the machines. Credit unions and banks also often forget to patch vulnerabilities because of the delayed approval from the vendor. But a month with an unpatched vulnerability is “an eternity. It’s like dog years. I’ve seen some [patches] that have taken up to a year.” Vendors must check vulnerabilities faster, Stickley said. “It’s critical. It should take a couple of days at the most.”

Indiana league names new board treasurer

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INDIANAPOLIS (7/8/08)--Chiphone FCU CEO Ron Mazur was elected board treasurer of the Indiana Credit Union League during its meeting June 3. He replaces Dave Thieme, who left the board in April to take a new position outside the credit union industry. Mazur has represented credit unions in northern Indiana's District 1 on the league board since 2006. He has been CEO of the Elkhart-based credit union for more than 25 years. He is chairman of the league's Audit and Finance, and League and Servicecorp Products and Services committees, and is board treasurer of Credit Union Centers of Indiana, which manages Indiana's shared-branching activities.

Budreau inducted into Indiana CU Hall of Fame

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INDIANAPOLIS (7/8/08)--Jenny Budreau, FORUM CU senior vice president, human resources and administration, will be inducted into the Indiana Credit Union Hall of Fame Sept. 27. Budreau will be honored at the Chairman’s Awards Banquet during the Indiana Credit Union League’s convention. She will complete her term as league director on Sept. 26 and is immediate past chairman of the league. “Her term as chairman included the Political Involvement Task Force and Emerging Leadership Award being established, as well as laying the groundwork that led to the ignite group being formed,” said League President John McKenzie. The ignite group is a forum for the exchange of ideas and discussion for Indiana’s credit union leaders and emerging leaders. Budreau has been on the board of directors since 2001 and has been active on several committees, including Audit and Finance, Awards and Board Recruitment/Election Review. She also is on the Indiana Credit Union Foundation board.

Filene report offers new concept in debt relief

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MADISON, Wis. (7/8/08)--Credit unions seeking information about debt relief for their members can reference a new report from the Filene Research Institute on Responsible Debt Relief (RDR). Robert D. Manning, director, center for consumer financial services at the Rochester Institute of Technology, has released “Responsible Debt Relief: An Algorithmic Assessment of Household Debt Capacity and Repayment Capability.” The key to a successful RDR system is the objective and statistically precise estimate of consumer debt capacity and debt repayment capability, according to Manning. His Responsible Choice program, based on an algorithm that estimates household debt capacity and repayment capability, classifies individual consumers into tested debt management programs. “The RDR algorithm improves the efficiency of the overall system of consumer debt management programs by guiding consumers to the plans that best match their financial situation,” said George Hofheimer, Filene chief research officer. RDR applies to households that do not qualify for an accredited Consumer Credit Counseling Service. Many of those households often enroll in nefarious debt settlement programs or file for consumer bankruptcy, Filene said. Household debt has grown to more than $13 trillion in 2008, from less than $4 trillion in 1990. Current home mortgage debt is $10.5 trillion, compared with $2.5 trillion during the same time period. Credit card debt also has quadrupled to $950 billion.

New Jersey data breach bill reintroduced

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HIGHTSTOWN, N.J. (7/8/08)--A New Jersey data breach bill has been reintroduced this session and the New Jersey Credit Union League is working to move the legislation forward, according to the league. The bill, which remains unchanged this session, would limit retailers’ use and retention of personal consumer information and hold a breaching party financially responsible for losses including the cost of card replacements. Issuers also would be able to disclose to their cardholders the party responsible for the breach (Weekly Exchange June 30). “There’s nothing new,” Candice Areia, league director of marketing and communications, told News Now. The measure was heard in committee during the lame-duck session but was not reported for a floor vote because a retailer and restaurant association strongly opposed it, the league said. The bill is sponsored by Assembly Financial Institutions and Insurance Committee Chair Neil Cohen (D-20). The league partnered with the New Jersey Community Bankers Association to develop the legislative strategy.

CU System briefs (07/07/2008)

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* PHOENIX (7/8/08)--The Arizona Credit Union League and Arizona FCU co-hosted U.S. Rep. Trent Franks (R-2) July 1 at the credit union’s Bell Road branch in Glendale. Franks confirmed his support for credit unions and the positive role they have played in the community. “Franks has been a credit union supporter since serving in the Arizona legislature, and by his conversation today, he simply reinforced his belief in the Credit Union System,” said Austin De Bey, vice president of governmental affairs at the league. Arizona FCU, Phoenix, has $1.8 million in assets ... * HOUSTON (7/8/08)--Francis Kuhn, vice president of facilities and administration for Western Corporate FCU (WesCorp), has been named to the International Facility Management Association’s executive committee. Kuhn will serve as the committee's second vice chair. IFMA is an international association for professional facility managers, supporting more than 19,000 members in 60 countries. WesCorp is located in San Dimas, Calif., and has $31 billion in assets ... * SAN DIMAS, Calif. (7/8/08)--Matt Morris III, former member relationship manager at Western Corporate FCU (WesCorp), died July 3 in Boise, Idaho, after suffering a stroke in his office. Morris, 59, worked at WesCorp for 11 years and served in the financial services industry for more than 30 years. “We have all lost a loyal colleague and true friend,” said Bob Siravo, WesCorp president/CEO ...

League Ohio CUs hold their own despite economy

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DUBLIN, Ohio (7/7/08)--Ohio credit unions are doing well despite a struggling economy, the Ohio Credit Union League said last week. “Ohio’s credit unions are holding their own,” said Dave Shoup, league vice president of regulatory affairs. “Credit unions are typically--and have been for a long time--well capitalized.” The league released its First Quarter 2008 Performance Report, which details Ohio and U.S. statistics of economic conditions (eLumination July 2). “Ohio credit unions remain safe and sound institutions, despite many Ohio residents facing financial difficulties in the wake of increasing unemployment and rising energy and food prices,” the report said. Capital levels at the state’s credit unions are at 12.6% net worth-to-assets, which is higher than Ohio banks and thrifts and credit unions and banks nationwide. Ohio credit union mortgage originations rose 65.5% over the past 12 months, despite a weak housing market in Ohio, as home sales fell 19% over the year as of March. Total credit union income rose 3.9% by the end of the first quarter, as growth in investment income slowed. Mergers and liquidations also remained slow, the report said. Membership at Ohio credit unions declined less than one percent over the past year, to 2.63 million members. “Most importantly, credit unions need to focus on membership growth,” Shoup said. “The league is making concentrated efforts to examine and focus on that.”

Minnesota CUs discuss CUBTRRA with congressman

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ROCHESTER, Minn. (7/7/08)--Minnesota credit unions met with U.S. Rep. Tim Walz (DFL-1st District) to discuss credit union and national political issues June 30 at First Alliance CU in Rochester.
From left, Minnesota U.S. Rep. Tim Walz; John Shonyo, board member of Mayo Employees FCU, Rochester; and Harry Wobschall, board chairman, First Alliance CU, Rochester, discuss credit union issues during a meeting June 30 at First Alliance. (Photo provided by the Minnesota Credit Union Network)
Fifteen credit union professionals and volunteers attended the meeting and discussed a variety of current credit union and national issues with Walz. The meeting was part of the Minnesota Credit Union Network’s (MnCUN) goal to strengthen its political influence by building and cultivating positive relationships with legislators. One of the main topics of the meeting was the Credit Union, Bank, and Thrift Regulatory Relief Act (CUBTRRA), which was passed by the House as H.R. 6312 on June 24. CUBTRRA contains measures that would offer significant relief for credit unions and would also benefit banks and thrifts. The group discussed how this act would increase credit unions’ member business lending ability and help federally chartered credit unions serve underserved areas. Other topics covered in the meeting included national issues such as campaign financing and the high cost of fuel. The group also shared their concerns about the current health care system and discussed how to reform health care so that it would be easier for small credit unions to provide benefits to their employees. Walz also commented on credit unions’ community and political involvement. Minnesota credit unions are well represented in Washington, D.C., and their opinions are heard at the Capitol, Walz said. “Congressman Walz was very receptive to the issues and concerns we shared with him during the meeting,” said Mara Humphrey, MnCUN vice president-governmental affairs. “We look forward to working with him in the future and appreciate his support of credit unions.”

Missouri CUs meet with political candidates before elections

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ST. LOUIS (7/7/08)--Two Missouri credit unions recently met with political candidates in advance of elections to discuss credit union issues and concerns. Central Missouri Community CU, Warrensburg, provided Chris Benjamin (D-District 31) with a tour of the credit union on June 15. Peggy Nalls, Missouri Credit Union Association senior vice president of public and legislative affairs, also attended the meeting (CourierNet June 25). “Benjamin gave us nearly two hours to talk about credit unions,” Nalls said. “He also met every employee at the credit union.” Arsenal CU President Linda Allen also met with Sen. Mike Gibbons (R-District 15). Gibbons is running for Missouri Attorney General. “Gibbons was really appreciative,” Allen said. “Though I have visited him many times over the years, this time he extended an offer to come to the credit union and speak to our members.”

Canada CUs merge combined membership 2.8 million

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VANCOUVER, British Columbia and MISSISSAUGA, Ontario (7/7/08)--Credit Union Central of British Columbia and Credit Union Central of Ontario officially merged on Tuesday, with a combined membership of 2.8 million. The new credit union will be named Central 1 CU. Central 1 will provide services to 196 member credit unions in British Columbia and in Ontario. It will have more than $7.5 billion in assets (Marketwire July 2). Credit Union Central of British Columbia acquired the assets of Ontario Central. Central 1 shareholdings will reflect the proportion of member credit unions in each province. The merger proposal was announced on Oct. 6, 2006, based on a concept that other provincial credit unions would join to create a single entity. Canada is currently served by six provincial credit unions and a national trade association. “We continue to see this as a first step toward a national financial services organization for credit unions,” said Daniel A. Burns, Central 1 chairman.

NACUSAC honors members for service

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DEL MAR, Calif. (7/7/08)--The National Association of Credit Union Supervisory Auditing Committees (NACUSAC) presented awards during the 2008 Annual Conference in Denver to two of its members for their service. Eleanor Willhoite, vice chairman, supervisory committee, Chartway FCU, Virginia Beach, Va., received the 2008 Golden Service Award. Willhoite was commended for her dedication, loyalty and leadership by Chartway Chairman Lou Hull, who accepted the award on her behalf.
Bob Fouratt (left), managing partner, The Curchin Group, received the Associate Member of the Year Award from Bob Butler, National Association of Credit Union Supervisory Auditing Committees vice chairman.
Willhoite also was noted for her contributions to the credit union, including her help in developing written procedures for vital auditing processes and for identifying fraudulent activity on a member’s account--which later led to arrest. The second award, the 2008 Associate Member of the Year, was presented to The Curchin Group. The group is an accounting firm based in New Jersey and is one of the top 15 firms providing services to credit unions. Accepting the award was Robert Fouratt, the firm’s managing partner. The group was selected because of its dedication and professionalism in working with credit unions, NACUSAC said.

Davidson CUs need to combat aggressive thieves

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NEW YORK (7/7/08)--Credit unions need to keep up with aggressive thieves who are recycling types of fraud and expanding them into different payment areas. So says Ann Davidson, risk manager at CUNA Mutual Group, speaking Wednesday at the America’s Credit Union Conference & Expo last week. The event, presented by the Credit Union National Association, closed on Wednesday. “When the economy is not so good, the temptation is there,” Davidson said. The newest targets for fraud are electronic paychecks, via automated clearing house (ACH), and mobile payments via the .mobi Internet extension, she said. Today members can make payments through cash, check, credit and debit card, and online billing, via ACH, and through cell phones and personal digital assistants. “How do you manage the member’s fraud risk when that member uses six payment systems? Credit unions want to become the member’s primary financial institution (PFI), so you can manage fraud from a cross-channel protection point of view,” Davidson said. “Thieves are having educational sessions, identifying who has the weakest link. They come in and will keep coming in until you plug the hole,” she told credit unions. She noted the dangers of “silo fraud monitoring,” with each type of transaction monitored separately. “All those types of transactions get posted to the member’s account. You are seeing those transactions somewhere along the line.” Technology makes fraud easier, but it can help to manage fraud also. On March 20, 2009, credit unions will be required to have their systems ACH-compliant. Some best practices to help minimize the effects of fraud include:
* Use the fraud management system to identify and block suspect transactions; * Deactivate the mobile device in the event of theft or loss, like credit unions do with card fraud; * Use encryption of locally stored data; and * Implement personal identification number authorization and lockout.
Use the same methods in new risk areas, such as mobile devices:
* Make them compliant with the Federal Financial Institutions Examination Council; * Secure registration of mobile devices; * Require Secure Socket Layer connection; * Validate and confirm security layers are working effectively; and * Talk to your peers.
Also note that member business lending (MBL) presents “a huge risk, associated with ACH. It’s not wrong, but you need to manage it,” Davidson said. How does a credit union get connected to manage all these types of fraud? Through enterprise cross-channel management, she said. Centralize your fraud risk management, layer loss control solutions across all transactions; do this in real-time; and centralize compliance and regulatory requirements, Davidson advised. For more on the conference, use the link to Credit Union Magazine's ACUC Daily.

CU blog grows issues discussion

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FARMERS BRANCH, Texas (7/7/08)--Natasha Melugin, a representative with the Texas Credit Union League (TCUL), has started a community blog for credit union personnel to post their thoughts and ideas to help shape their credit unions. CU Grow 2008 began in late May and has generated dozens of responses and ideas from contributing credit union employees and volunteers from throughout Texas, according to TCUL (LoneStar Leaguer June 30). In today’s quickly evolving environment of competition and service, credit unions routinely face challenges in member growth and acknowledgement, the league said. The blog is focused on innovation, collaboration and communication. It was started to help facilitate conversation between credit union leaders. The idea of a communal effort to provide advice and encouragement is natural asset, Mellugin told the league. “Without collaboration and growth within, we cannot expect the credit union movement to grow,” she wrote in an introductory entry to the blog in May.

WOCCU World CU Conference this week

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MADISON, Wis. (7/7/08)--More than 1,300 credit union industry executives and officials will be traveling to Hong Kong this week to convene for the 2008 World Council of Credit Unions (WOCCU) World Credit Union Conference. This year’s conference, the first to convene in Asia in more than 30 years, will host representatives from 48 countries. The conference is co-sponsored by the Credit Union League of Hong Kong and the Association of Asian Confederation of Credit Unions. This year’s general session speakers span the globe. Former U.S. Sen. Paul Sarbanes, co-author of what is referred to as the Sarbanes-Oxley legislation on corporate financial accountability and transparency, will discuss credit unions’ accountability role in serving members. Dr. Anna K. Tibaijuka, United Nations Under-Secretary General and Executive Director, UN-HABITAT, United Nations Office at Nairobi, will focus on ways credit unions can globally support affordable housing. In addition, Credit Union National Association Chairman Tom R. Dorety, president/CEO of Suncoast Schools FCU, Tampa, Fla., and Phylip Doughty, CEO of MECU Ltd., Australia, will discuss how credit union philosophy can offer competitive advantages in the speakers’ respective countries. Topics addressed during the 20 breakout sessions include:
* Marketing credit unions to a value-driven generation; * Benefits and challenges of franchise models; * Global implications of a changing U.S. economy; * Attracting deposits in the age of Internet banking and falling interest rates; and * The role cooperatives play in an age of economic realignment.
For a complete list of session topics and speakers, use the resource link. WOCCU will also hold its annual awards ceremonies during the conference to honor individuals and institutions that demonstrate the true nature of the cooperative spirit. Honors include individual and organizational winners of the Distinguished Service Award and the WOCCU Young Credit Union People (WYCUP) Program, which will award scholarships to five of the 19 international applicants participating in this year’s program at the conference. In recognition of their leadership in the international credit union system, the five winners will receive an all-expense-paid trip to next year’s conference in Barcelona, Spain. The World Credit Union Conference is an annual event organized by WOCCU and the host country.

CU System briefs (07/02/2008)

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* MADISON, Wis. (7/3/08)--Credit union board members and staff can attend two free CUNA Mutual Group Credit Union Protection webinars to help mitigate fiduciary risks and better understand director responsibilities. Director Responsibilities--What Every Director Should Know will be held July 9 at 2 p.m. and 7 p.m. ET. Fiduciary Risk--A Sleeping Giant Ready to Awake? Will be held July 9 and July 23 at 11 a.m. and 3 p.m. Credit unions should register by July 7. Sign-in is required. Two days prior to the sessions, attendees will receive an e-mail with the webinar link ... * HARRISBURG, Pa. (7/3/08)--The merger between Clarion University FCU (CUFCU) and Pennsylvania State Employees CU (PSECU) was completed Tuesday. “The merger presents opportunities for members of CUFCU to enjoy many enhanced products and services offered by PSECU,” said PSECU President Greg Smith (Life is a Highway July 1) ... * ALEXANDRIA, Va. (7/3/08)--CommonWealth One FCU has merged with City of Alexandria Employees CU. The merger was approved in April. City of Alexandria served more than 7,000 members and had more than $30 million in assets. “With our combined capital and human resources we will be able to continue to make improvements to our product and service offering for our combined 40,000 members,” said John Blair Jr., president/CEO of Commonwealth One ... * RALEIGH, N.C. (7/3/08)--State Employees’ CU (SECU) will help the North Carolina State Education Assistance Authority (NCSEAA) refinance and provide funding for loans made by College Foundation Inc. (CFI) to students and parents this year. “Helping students get an education is one of the most important investments we can make to boost their future income and continue to grow our state’s economy,” said Shirley Bell, SECU board of directors chairman. SECU members who have applied for federal and state aid will receive a reduction in the interest rate on North Carolina’s EXTRA Education loan, a supplemental loan to pay educational expenses. SECU has $15 billion in assets ... *
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RICHMOND, Va. (7/3/08)--Virginia CU sponsored the second annual Bike MS: Virginia CU Ride Virginia May 31 and June 1. Riders from the credit union raised $4,671.58 toward fighting multiple sclerosis, resulting in more than $9,343 donated to the cause. From left are: Sue Church, Bill Church, Chris Woodbury, Giles Ring, and Tom Allen. Sue Church, Woodbury, Ring and Allen are staff members at Virginia CU. (Photo provided by Virginia CU) ...

How many members know why CUs help

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NEW YORK (7/3/08)--In New York City, “the epicenter of the events that led to the crisis that put us where we are financially today,” Credit Union National Association Chairman (CUNA) Tom Dorety told credit unions attending the America’s Credit Union Conference & Expo to use the economy to help point out the good that credit unions do. “We need more member involvement in appreciating credit unions cooperative structure and services to strengthen ties to garner support for their cooperative structure and gaining recognition and support with local leaders, and we need to improve our connectivity with young people,” Dorety said. Dorety, CEO of Suncoast Schools FCU in Tampa, Fla., spoke during the closing general session Wednesday. Banks are “putting people out of jobs and cutting services, but they’re making their investors happy,” he said. “Credit unions overwhelming do the opposite--we’re making loans, helping with mortgages,” and they can use a strong network to make intelligent decisions that are in the best long-term interest” for members, he added. Many stories highlighting credit unions’ good work have appeared in national, state and local media. “But how many people know why we help?” Dorety asked. He noted that strategy follows structure. “Our actions are the direct result of who our audience is. Of course we’re helping members. Why wouldn’t we?” But it’s getting harder, with the overall competition credit unions face. Being better than a bank sets “a weak standard,” and “acceptance of the previous standard often means we have none of our own,” he said. Roughly 5%--the estimates run from 1% to 10%--of members “really get [what credit unions are about]. But what if that doubled? What if four million who understand who we are became eight million people who understand who we are?” he asked. Instead of debating terms such as “membership,” “joining” and “belonging,” credit unions ought to be discussing at the state, national and local level strategic plans on how to better leverage their actions. “Use the economy to our advantage. Small businesses are begging for more affordable credit. How can anyone be opposed to increasing the member business lending cap and providing better tools to measure safety and soundness in our current economic environment?” Dorety asked. He also noted that the Credit Union, Bank and Thrift Regulatory Relief Act (CUBTRRA, H.R. 6312), “was the result of remarkable effort by many people, state leagues and particularly staff at CUNA.” “All of us agree we need more enhancements on credit union charters, we need to convince Congress to act on the member business lending cap, and the prompt corrective action risk-based cap,” he added. For more on the conference, use the link to Credit Union Magazine's ACUC Daily.

Heath CUs are an idea that hasnt stuck

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NEW YORK CITY (7/3/08)--Credit unions are a good idea that hasn’t stuck, according to Dan Heath, idea collector, who keynoted the closing general session on “Ideas That Stick” during the America’s Credit Union Conference & Expo. The conference, presented by the Credit Union National Association in New York City, ended Wednesday. Heath said he is “a huge credit union fan. I’ve been a member of Amplify CU in Austin, Texas, for 20 years. I’ve carried two mortgages, two car loans, and a savings account and share certificate there.” He told credit unions: “I support what you do, and in my judgment, you have an extreme, grotesque advantage over banks. But you’re an idea that hasn’t stuck.” Ideas that stick are understood, are remembered and change something, he said. They are:
* Simple; * Unexpected; * Concrete; * Credible; * Emotional; and * Told in stories.
Ideas are not created equal, he said. Small talk doesn’t stick. To make credit unions’ ideas stick, there are ways to get people to believe: 1. Live it; 2. Hear the story; and 3. Hear the description--which is the least effective method. For more on the conference, use the link to Credit Union Magazine's ACUC Daily.

CUNA webinar to cover BSA requirements for CU staff

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MADISON, Wis. (7/3/08)--A Credit Union National Association webinar scheduled during the third quarter of 2008 can help credit union staff get up-to-speed on Bank Secrecy Act (BSA) requirements. The July 10 “Bank Secrecy Act Requirements for Staff” closely examines BSA, the Customer Identification Program, and possible penalties for non-compliance. Attendees also will walk through the information required to accurately complete the Currency Transaction Report, Suspicious Activity Report, and Exempt Person Form. In addition, internal auditors and compliance staff can ensure the thoroughness and accuracy of BSA audits with “Preparing and Conducting a Bank Secrecy Act Audit.” The Aug. 14 webinar will provide tools and information needed to prepare and conduct an accurate and thorough BSA audit. Participants also will hear from an industry expert on what the regulation requires and what examiners are looking for. Other webinars highlighted during the third quarter include:
* “The Rise of Social Media--Connecting With Online Communities” will help attendees gain a better understanding of social media and how to incorporate these tools into conventional marketing plans. The July 22 webinar will help participants to better understand the mindset and culture driving the adoption of social media among Generations X and Y, as well as the myths associated with the social media usage of older generations. The offering is held in cooperation with the CUNA Marketing and Business Development Council. * “General Operations Regulations,” held July 9 and 16, will provide an overview of the major operations laws affecting credit unions. The two-part webinar will cover: the Bank Bribery Act, the Right to Financial Privacy Act, BSA, IRS information reporting and withholding requirements, National Credit Union Administration privacy regulations, the Office of Foreign Assets Control, and the Electronic Signatures in Global and National Commerce Act. * “Tips and Tools for Managing Your Information Technology Vendors” is designed to help anyone involved in the process of choosing and managing the credit union’s information technology vendors. The Sept. 18 offering will discuss various considerations and software for contract management, negotiation techniques, regulatory issues and more.
More than 35 webinars will take place during the third quarter of 2008 to educate busy credit union personnel about: finance and economics; human resources and training; security; lending; management and leadership; board and volunteer; marketing and business development; operations, sales, and service; and regulatory compliance. Archived versions of many recently-held webinars also are available. During a webinar, students hear and see a presentation, ask questions of the instructor and refer to handouts. With a phone and a computer with an Internet connection, students have all the benefits of a face-to-face class without leaving the walls of their credit unions.

City of Charleston gives tax on CUs low priority

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PARKERSBURG and CHARLESTON, W.Va. (7/8/08)--A proposal for a business and occupation (B&O) tax on earnings of credit unions in Charleston, W.Va., has been given a low priority status by city officials, according to the West Virginia Credit Union League. After the league pointed out legalities surrounding the tax issue, the city decided to issue it a low priority for now and “put it out for further study,” Rich Schaffer, league senior vice president, told News Now. The league will continue to monitor the issue closely, he added. In May, the league wrote a letter to city officials warning that Charleston’s intent to tax credit unions would violate both state code and the Federal Credit Union Act, after learning through a third party that the city proposed the B&O tax as part of the state’s Municipal Home Rule Pilot Program (News Now June 9). As part of the program, state legislation had given five cities permission to find new ways to tax locally. Charleston was the first city to apply. City officials may have though they had more leeway than actually allowed by law, Schaffer told News Now last month. In a letter sent to City Manager David D. Molgaard and other city officials May 30, League President Kenneth R. Watts outlined the reasons why taxing a credit union would be a violation of state and federal code.

Farber Dont be a leadership poser

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NEW YORK (7/3/08)--Have you “shifted a paradigm” lately? “Empowered” someone, perhaps? If you’ve tossed around these empty platitudes without changing your actions, you’re a leadership poser--someone who wears the “leader” label without truly being one. Shame on you. So said Steve Farber, author and president of Extreme Leadership, speaking Tuesday before America’s Credit Union Conference & Expo, which ended Wednesday in New York City. “I’m concerned that ‘leadership’ has become a buzzword,” Farber said. “If we’re not careful, we’ll convince ourselves we’re doing something because we’re using new buzzwords.” He calls the process of closing the gap between what leaders say and do “extreme leadership”--a redundant term “because leadership, if you’re really doing it, is already extreme. There’s no such thing as real leadership without frequent OS!M: Oh (darn) moments.” Farber outlined four components of extreme leadership:
* Cultivate love. Some people aren’t comfortable mixing “love” and “business,” but “love is just good business. That’s where loyalty comes from.” Ask yourself, “Why do I love this work, and how do I show it?” Farber advised. “This will help you stoke your own fire. There’s no way to motivate or inspire others if you don’t feel it first.” * Generate energy. Companies that excel have passionate, committed--sometimes obsessive--employees. Farber cited Gillette, which employs enthusiastic shaving testers who “bleed so you can get a good shave.” Test your energy level, Farber suggested, by asking, “Do I generate more energy when I walk into a room--or when I walk out of it?” * Inspire audacity. Farber’s definition of audacity: “Bold and blatant disregard for normal constraints.” This isn’t about anarchy, he said. “It’s about creating what we want to create for all the right reasons.” Ask yourself the audacious question, “How will we change the world of our employees, customers, and marketplace?” * Provide proof. “If you say one thing and do another,” he said, “people won’t follow you anywhere. You have to prove yourself all the time.”

CUNA closed Friday for holiday

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WASHINGTON and MADISON, Wis. (7/3/08)--The Washington, D.C., and Madison, Wis., offices of the Credit Union National Association will be closed on Friday, in observance of the Fourth of July Holiday. News Now will not publish on Friday but will resume regular publication Monday.

CU tax exemption legislation passes New York houses

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ALBANY, N.Y. (7/3/08)--Legislation that would exempt state-chartered credit unions in New York from paying special additional mortgage recording tax (SAMRT) in 2010 passed through the New York State Senate and Assembly last week. The legislation also would allow any federally chartered credit union that chooses to convert to a state charter an immediate exemption from the tax. Under current law, state-chartered credit unions are required to pay SAMRT, but the tax is not imposed on federal credit unions, the Credit Union Association of New York said in a release. “This legislation remedies a charter disparity and enhances the dual chartering system of New York,” said William J. Mellin, president/CEO of the Credit Union Association of New York. The legislation was sponsored by State Rep. Aurelia Greene (D-Metropolitan) and State Sen. Hugh Farley (R-Capital/Adirondack). The association and member credit unions advocated for the legislation at lobby day during the Governmental Affairs Conference in May.

Dill Ecuadors CUs effectively serving members

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QUITO, Ecuador (7/3/08)--Ecuador’s credit unions have shown sufficient development to operate more independently and with an eye to greater growth, said John Dill, president/CEO of the Credit Union Associations of Colorado and Wyoming.
Victor Miguel Corro (left), World Council of Credit Unions International Partnerships Program manager; John Dill, president/CEO of the Credit Union Associations of Colorado and Wyoming; and Jorge Huertas, Coopad general manager, met in Ecuador during Corro and Dill’s recent visit to assess credit union development. (Photo provided by the World Council of Credit Unions)
The associations have partnered with Ecuador’s credit unions through the World Council of Credit Unions (WOCCU) International Partnerships Program since 2000. Dill visited with Red Transaccional Cooperativa (RTC), the largest credit union network in the country, in June. “Ecuadorian credit unions are pioneering many cutting-edge services for their members,” Dill said. “There is a need for Ecuador’s credit union movement to begin building a strong country-wide trade association in order to advance the business and advocacy interests of the movement in Ecuador and to safeguard the many forward strides that credit unions have made in just a short time,” Dill said. Dill, who was accompanied by Victor Miguel Corro, WOCCU International Partnerships manager, spent three days in Ecuador’s capital, Quito, meeting with RTC executives, board members and member credit unions. He also met with staff at Quito credit unions Cooprogreso and Coopad to review the services RTC offers its member credit unions. Dill traveled to Cuenca, Ecuador’s third-largest city, to assess the use of RTC products in two other credit unions. RTC allows members to access mainstream and modern financial products such as remittances, national shared branching, payment services, ATMs and debit card services. RTC offers international shared branching, a project accomplished through the WOCCU partnership with the help from Credit Union Service Centers, the Credit Union Associations of Colorado and Wyoming, CO-OP Shared Branching and software provider Multisoft. About 29 of 38 regulated credit unions in Ecuador belong to RTC. They offer members 154 countrywide points of service and 3,000 more abroad. “Credit unions in Ecuador are relatively new institutions vis-à-vis American credit unions, and therefore are clearly focused on providing new alternative financial services to the average Ecuadorian who has largely been shut out of other institutions,” Dill said. “As a result, membership growth is generally high, and the emotion and enthusiasm for the credit union model is inspiring to those of us who represent more mature credit union movements.” Dill also discussed an English Immersion Executive Program with credit union executives from Jardin Azuayo, a progressing credit union involved in mobile banking, which enhances member services through the use of technology. Jardin Azuayo would like to visit other credit union systems to study state-of-the-art technology solutions. The idea for the program came from WOCCU’s Hispanic Marketing Immersion Program. A pilot program involving Colorado and Wyoming is in the planning stages.

Security No. 1 consumer credit card concern

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SAN FRANCISCO (7/2/08)--Credit unions offering credit card programs to members may want to reference a recent study indicating that security is cardholders’ No. 1 concern. Javelin Strategy and Research released a report, “Credit Card Satisfaction--an Effective Acquisition and Retention Strategy Must Focus on Multiple Facets of the Relationship,” which analyzes consumer perceptions affecting selection of a credit card issuer and a card at the point of transaction. Javelin surveyed three age groups--Baby Boomers, Generation X and Generation Y. About 80% of respondents said that as the fear of data breaches rise, security was their No. 1 concern. Security at point-of-purchase also was noted. “Security fear at the point of purchase is important for issuers to understand,” said James Van Dyke, Javelin president of strategy and research. “The focus and press coverage that data breaches have received as a point of vulnerability in card fraud has led to an increased focus by consumers on security features of their cards when choosing one to make a purchase.” Online experience, rewards programs and interest rates also were cited as driving factors in deciding on a card, Javelin said.

CUs response to the economy should be modest

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NEW YORK (7/2/08)—Credit unions’ response to the economy should be modest, attendees at America’s Credit Union Conference & Expo in New York City were told Tuesday in a session with the Credit Union National Association’s (CUNA) economists. Bill Hampel, chief economist, and Mike Schenk, senior economist, provided an economic outlook for credit unions.
Because other lenders are tightening their lending standards, making up for loan losses, people with good credit can’t get loans. That means credit unions can increase their loan volume, said Bill Hampel, Credit Union National Association chief economist, at America’s CU Conference & Expo Tuesday.
“With very few exceptions, credit unions are collateral damage to the subprime crisis and recession. If you’re a credit union in what used to be the hottest real estate market, and you have negative effects, it's not what you did--it’s where you are,” Hampel said. “Negative effects are not caused by the credit union, nor are they long-lasting. The economy won’t boom out of crisis. It will level off and gradually recover,” he said. Hampel advised:
* “Let your capital cushion do its work. You’ve saved it for a rainy day. It’s started raining and it’s pouring. The capital is an umbrella you’ve kept dry. Now is the time to open it and get it wet.” * Avoid penalizing members with higher fees and loan rates, and lower dividend rates just to protect income. * Rising delinquencies and loan losses do not require modifying lending policies. “If you’ve been stable for the past decade and loan losses have doubled, it’s OK.” * Adjust the net income budget and monitor it closely. * Tell members about share insurance. A lot of members don’t understand that credit unions are insured.
“The economy is still in the throes of correction,” Mike Schenk, senior economist at the Credit Union National Association (CUNA), told America’s Credit Union Conference & Expo Tuesday in New York. (Photos provided by CUNA)
Schenk compared the current cycle with historical cycles of inflation. “We are in a recession that started late last year. Although the economy didn’t slow down as much as expected, it will be fourth quarter or into next year before it picks up again. This recession cycle is more gradual, with slower recovery expected.” The outlook for economic growth has been 2%--below the long run average of 3%. CUNA economists expect growth to be 1% for next quarter and a little over 1% for the full year. “There’s not a lot of good news for next year. We probably will see a trend increase as the year continues, but it’s nothing to write home about.” Schenk noted that housing prices are a cyclical market, but the current cycle is different. Historically, prices go up for four to five years, then down four to five years, and up again. The housing boom, however, went up for nine years. “That suggests to us that the pain and suffering are not over,” he said. “You have a very stressed consumer. Consumers face job market weakness and slow income growth, low savings rate, a high debt, falling wealth in the housing and home equity markets, high energy prices," Schenk said. Consumer confidence is at its lowest, he added. And “the real wild card is how credit union members respond through these tough economic times.” The conference, which ends today, is presented by CUNA. To view CUNA economists’ latest economic overview, use the resource link. For more information from the conference, use the link to Credit Union Magazine's ACUC Daily.

Compliance certification training eSchool offered

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MADISON, Wis. (7/2/08)--Credit union volunteers and non-compliance staff can be recognized for their successful completion of compliance training in a new Credit Union National Association eSchool beginning in August. The 10-session Compliance Certification Training for Staff e-School is a complete compliance training package for volunteers and non-compliance staff. Running from Aug. 6 - Dec. 17, the eSchool will cover mortgage and consumer lending, deposit accounts, and general operations regulations such as the Bank Secrecy Act, Bank Bribery Act, IRS information reporting and withholding requirements, various privacy regulations, and more. Also, participants will learn about the National Credit Union Administration and federal share insurance, along with agency management issues. Those who are interested may take the Regulatory Compliance Training and Certification Program (RegTraC) Level 1 exams to test their knowledge of the topics and obtain a Compliance Achievement Award. Credit union staff and volunteers can further their financial management knowledge and learn to improve the performance of their credit unions during the eight-session Financial Management e-School: Part II. Participants of this Aug. 27--Oct. 15 eSchool will gain a better understanding of how their financial management decisions affect credit union growth through the following advanced-level topics:
* Aug. 27--Capital adequacy and measuring risk-based capital; * Sept. 3--Introduction to the financial planning case study and simulation overview; * Sept. 10--Advanced asset-liability management and credit: Interest rate risk assessment and managing core deposits; * Sept. 17--Financial planning, budgeting, and building the "ideal" capital position; * Sept. 24--Forecasting and strategically planning for long-term growth; * Oct. 1--Portfolio management strategies; * Oct. 8--Financial planning issues: Case studies and simulation case presentation; and * Oct. 15--Investment options to achieve financial goals and objectives.
An e-School is a series of interactive classroom sessions that feature live, real-time instruction from industry experts via the Internet and a telephone conference call. Students also have an opportunity to interact with the instructor and other participants through online chats and live discussion. Participants may register for specific webinars or the entire series of sessions as an eSchool.

CU MatriMoney program garners 400000 in deposits

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FARMERS BRANCH, Texas (7/2/08)--Filene Research Institute’s MatriMoney initiative is a wedding cash gift registry for newly engaged couples that acts as a savings account guests can contribute toward. The gift-giving program is a way to attract younger members to credit unions, according to the Texas Credit Union league (LoneStar Leaguer June 30). Since June 2006, when Mountain America started the program, the credit union has had more than 300 registrants open accounts, with more than $400,000 in deposits, she added. The credit union has loaned $700,000 through the program. Mountain America FCU’s success stories in introducing the MatriMoney program are the subject of a Filene podcast. In it, Annette Zimmerman, senior vice president of the $2.301 billion asset, West Jordan, Utah-based credit union, is interviewed by Filene’s Maureen Maddox. Because no other establishment offers this type of service, the MatriMoney concept is a crucial service for the credit union to offer potential members, Zimmerman said. Also, 38% of MatriMoney participants at Mountain America have become new members of the credit union. In addition to Matimoney’s basic savings account concept, the credit union also added a secondary checking account which allows money to be given via the Internet, and a specially tailored debit card, depicting wedding rings, which started conversations and stimulated public interest. Both of these features contributed to the success of the program, Zimmerman said. “It’s a great marketing opportunity and a great way to brand our credit union,” Zimmerman said. MatriMoney’s generational approach and appeal also have led to interest in mortgage assistance, car loans and other services at the credit union that closely fit the needs of newlyweds, Zimmerman said.

MCUL CUcorp hold elections

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PLYMOUTH, Mich. (7/2/08)--The Michigan Credit Union League (MCUL) and CUcorp board of directors met June 24 in Northville Township, Mich., to elect the next CUcorp board of directors and the Michigan Credit Union Foundation. Robert Brava, president/CEO, Community Choice CU, Farmington Hills, and Bradley Swee, president/CEO, Meijer CU, Grand Rapids, were elected to two-year terms on the CUcorp board. Swee will serve as secretary/treasurer. Bava and Swee join Chairman James Costello, executive vice president, NuUnion CU, Lansing; Vice chairman William Thiess, president/CEO, Detroit Edison CU; and Peter Dzuris, president/CEO, Northland Area FCU, Oscoda. MCUL Chairman Andrew List, president/CEO, Option 1 CU, Grand Rapids, serves on the board as ex officio, and MCUL Vice Chairman George Isola, manager, Ishpeming (Mich.) Community FCU, was elected to a director seat. Elected to two-year terms on the Michigan Credit Union Foundation were:
* Doug Burroughs, CUNA Mutual Group vice president, credit union services; * Karen Dahl, president/CEO, Northern United FCU, Escanaba; and * Pamela Goven, president/CEO, Shawbox Employees FCU, Muskegon Heights.
The three join:
* April Clobes, vice president of e-commerce, Michigan State University FCU, East Lansing; * Janice Rose, president/CEO, E&A CU, Port Huron; * H. Vance Bargo, president/CEO, Family First CU, Saginaw; and * MCUL President/CEO David Adams.
The next meeting of the league and CUcorp policymakers will be held Sept. 18-19.

Study Retirement accounts primary driver of income assets

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NEEDHAM, Mass. (7/2/08)--Retirement accounts, which represent more than $17 trillion of U.S. retirement funds, will be a primary driver of income assets, according to new research from TowerGroup. Therefore financial institutions, including credit unions, should focus more on this area if they wish to succeed in the overall retirement income market. The TowerGroup research report, titled “Wrestling with Retirement Income: Key Challenges and Solutions for the Wealth Management Industry,” is authored by Sean Cuniff, a research director in the Brokerage and Wealth Management Practice at TowerGroup. U.S. financial institutions are devoting enormous amounts of resources to retirement income planning, and spending millions of dollars on advisory tools, income-focused products, and marketing. However, many firms are struggling to find a way to launch effective and profitable retirement income programs, particularly those targeted to consumers comprising the large “affluent” and “emerging affluent” asset segments. TowerGroup believes that, through 2011, the largest opportunity for retirement income services is in the affluent segment ($500,000 to $1.5 million in investable assets) and the emerging affluent segment ($250,000 to $500,000 in investable assets). Clients in these markets have sufficient assets to warrant careful planning and ongoing management, yet they do not have enough wealth to be immune from concerns about running out of assets prematurely. Offering retirement income solutions to the affluent and emerging affluent U.S. population is a challenging proposition. Yet the coming wave of retiring baby boomers presents an opportunity that cannot be ignored, TowerGroup said. TowerGroup believes a “holistic” advisory solution incorporating the smart use of technology is the only way to offer clients the comprehensive solutions they need to effectively manage their retirement income. To achieve success in this area, organizations must:
* Align the divisions of the organization to overcome existing product and service silos; * Focus on holistic advice and planning to offer more than strictly a product solution; * Retain tax-advantaged accounts using experienced and well-trained personnel; * Rethink service models by applying expert teams, centers of expertise, or alliance programs; * Evolve revenue and compensation strategies towards asset-based and non-traditional fee arrangements; and * Invest in technology to improve advice, maximize the use of client data, manage complex revenue arrangements, and streamline regulatory licensing and training.
Financial institutions that effectively target retirement assets and promote fee-based solutions will be able to generate long-term stable revenue while meeting the needs of their clients, the report said. The careful use of technology will enable them to make such offerings available to clients at a reasonable cost and win a competitive advantage.

CU System briefs (07/01/2008)

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* COLUMBIA, Md. (7/2/08)--The Maryland and District of Columbia Credit Union Association is working with FDI Collateral Management to administer the electronic titling process for vehicles registered in Pennsylvania and other areas where the service is offered (Focus June 30). Credit unions can receive training through the league. The deadline for electronic titling in Pennsylvania is July 10, but a grace period is available until July 30. The league will host a webinar for credit unions interested in the service ... * CHATTANOOGA, Tenn. (7/2/08)--Margaret Hill Burton, 64, was sentenced one year for embezzling more than $91,000 from Progressive Teachers FCU, Chattanooga. Burton worked at the credit union from 1998 to 2006 (The Chattanoogan June 30). Prosecutors said she made false loan advances to members and then took the money for herself ... * WEST LAFAYETTE, Ind. (7/2/08)--NFL New Orleans Saints Quarterback Drew Brees made his annual summer return on June 13 and 14 as part of his continued partnership with Purdue Employees FCU (PEFCU) and his commitment to the Lafayette community. Brees began his visit with an appearance at the Purdue Athletes Life Success Program (PALS) at Purdue University. PEFCU awarded bicycles to children participating in the camp. Brees has been a member of the credit union since 1997. (Photo provided by Purdue Employees FCU) ... * WEST LAFAYETTE, Ind. (7/2/08)--Purdue Employees FCU (PEFCU) raised $50,000 for the Purdue Athletes Life Success Program (PALS) through the 2nd Annual Brees Dream Foundation Golf Outing. Golfers from nine different states joined football celebrities Drew Brees, Bob DeMoss, Travis Dorsch, Bernie Flowers, Nick Hardwick, Mark Herrmann, Leroy Keyes, Kyle Orton and others on the course. From left are: PEFCU CEO Bill Connors; Connors’ wife, Lisa; Brittany Brees; PALS Director Bill Harper; and Drew Brees. Brittany and Drew founded the Brees Dream Foundation. (Photo provided by Purdue Employees FCU) ...

CenCorp announces 1 million fee-waiver dividend

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SOUTHFIELD, Mich. (7/2/08)--Central Corporate CU (CenCorp) announced that it will waive processing fees for members this month and in November as a patronage dividend. The fee waiver will save members about $1 million, Cencorp said in a release. The waiver intends to reward members who use the corporate’s services the most. “These patronage refunds reward members that use the fee-based services that make a positive contribution to CenCorp’s operating results,” said Bill Walby, CenCorp CEO. CenCorp is a $3.5 billion corporate credit union that provides investment, credit and correspondent services to 400 credit unions, primarily in Michigan.

Membership Growth Task Force presents recommendations

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NEW YORK (7/2/08)--Membership Growth Task Force Chairman Dick Ensweiler presented the group’s findings and recommendations to the Credit Union National Association’s (CUNA’s) Board Tuesday during America’s Credit Union Conference & Expo this week in New York.
At a press conference, Dick Ensweiler, right, chairman of the Membership Growth Task Force and president of the Texas Credit Union League, discusses the task force’s findings and recommendations to the Credit Union National Association’s (CUNA) Board. Also shown are CUNA’s Mark Wolff, left, senior vice president of communications, and Mike Schenk, senior economist and liaison to the task force (Photo provided by CUNA)
“Fifteen percent of potential members are actually members of credit unions, and it’s not growing,” Ensweiler, president of the Texas Credit Union League, said. Potential members “are getting inconsistent messages about credit unions, and branding isn’t the answer because credit unions want to do their own marketing to show they’re unique from other credit unions,” he said. Marketing messages emphasizing member-owner benefits and tax-exemption are not messages that resonate with potential members. “We need an awareness and image campaign” that should focus on “what people care about—trust, respect, or whatever the right message is today.” Although credit unions are squeezed financially and aren’t allocating the extra funds needed for marketing, they could explore ways to work together, to collaborate, he said. Metrics is also an issue. Credit unions need to measure their growth initiatives to determine whether their approach to growth is doing what they intend, he said. The task force determined three “ripe” markets: the youth market, the Hispanic\ethnic market and the underserved. It made 21 recommendations in five areas. The group recommended that credit unions should:
* Develop a clear, consistent message with strong appeal so the market can understand and “buy into” what credit unions are promoting. * Do more to serve many markets such as youth, immigrant/ethnic groups and underserved groups. * Learn from “best practices” when exploring growth opportunities; * Free up resources, possibly through collaboration; and * Measure membership growth initiatives with crucial metrics.
The task force made recommendations that would:
* Assist with awareness and image issues; * Look at both a national image campaign and near-term options; * Assist credit unions in reaching out to new markets; * Improve the dissemination of ‘best of breed’ or ‘best practices’ ideas; * Improve back office operations and collaborative efforts the task force recommends; and * Assist in identifying and applying growth metrics.
CUNA Chairman Tom Dorety accepted the report and has directed CUNA staff to review it and report back to the board in September. Immediate past CUNA Chairman Allan Kemp McMorris, who formed the task force, said it “has produced a very timely, thorough and far-reaching report for those focused on membership growth, which today is a core concern of the credit union movement.”