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PSCU Financial CUs on forefront of EMV chipPIN wave

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ST. PETERSBURG, Fla., and SUITLAND, Md. (8/12/11)--News that Visa has announced it will accelerate its migration to Europay, MasterCard and Visa (EMV) chip technology in the U.S. comes at a time when PSCU Financial Services is positioning itself to be one of the first in the credit union industry to offer plastics that incorporate both the EMV smart chip and personal identification number (PIN) technology. The St. Petersburg, Fla.-based credit union service organization (CUSO) worked with Suitland, Md.-based Andrews FCU to launch the new card, which is now available to all PSCU Financial Services' member-owners. EMV integrated circuit cards are used widely in Europe and other regions because it offers higher security than magnetic stripe. EMV cards that offer PIN approval are preferred by international travelers because they can be used at unattended kiosks and ATMs, said PSCU Financial. "This card is a significant advantage for our credit unions that serve government, military or professional members who travel internationally," said Michael Kelly, president/CEO of PSCU Financial Services. Andrews FCU President/CEO Chris McDonald noted that its members stationed overseas and those who travel frequently "have been asking for this." The credit union currently offers a magnetic stripe Visa platinum rewards card. The new Globe Trek Visa Rewards credit card will offer the same rate and rewards program as the current platinum card, but will combine an EMV chip with PIN technology. The credit union plans to initially offer the new Globe Trek Visa Rewards card to current cardholders living near six branches in Belgium, the Netherlands and Germany. Visa said that encouraging investments in EMV contact and contactless chip technology will speed up the adoption of mobile payments and improve international interoperability and security (IT Web Business Aug. 11). Chip cards require upgrades to merchant terminals, which have not been widely deployed yet in the U.S.

CUNA to IWSJI Banks not doing enough small-biz loans

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MADISON, Wis. (8/12/11)--The Credit Union National Association (CUNA) says that small-business lending statistics indicate banks are not doing enough lending to help small-business owners, according to a Thursday article in The Wall Street Journal. “Banks have requested less than $12 billion of the $30 billion made available by the last year’s Small Business Jobs Act, the Treasury Department has said,” wrote Emily Maltby in the article. “The government program offered low-interest funds to community banks so that they could boost small-business lending.” The amount banks are lending is not sufficient, CUNA says. “Congress last year gave the banks $30 billion to make small business loans, but the banks’ response has been tepid at best,” Bill Cheney, CUNA president/CEO, told the Journal. “Credit unions don’t need $30 billion in government assistance; we’re just trying to raise a lending cap in the law that’s arbitrary and outdated.” CUNA and credit unions are pressing Congress to increase credit unions’ member business lending (MBL) cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said. The article mentioned that Lister Hill CU in Muscle Shoals, Ala., and Provo (Utah) Postal CU had to turn down loans to small businesses because they were too close to the federally mandated MBL cap. CUNA shared the article with House and Senate congressional offices, accompanied by a message Thursday from Cheney, noting “how credit unions can help small businesses create new jobs at no cost to taxpayers. “Sen. Mark Udall (D-Colo.) and Rep. Ed Royce (R-Calif.) have introduced legislation, S. 509 and H.R. 1418, to help small businesses, and we encourage your member to show support by co-sponsoring this legislation.” To read the article, use the link.

Paychecks for city employees delayed--except at CU

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LEWISTON, Maine (8/12/11)--Paychecks for employees of Lewiston, which is Maine's second largest city, were delayed because of a computer problem earlier this week. However, employees using an area credit union got their paychecks on time. A computer glitch affected 444 employees whose paychecks were supposed to be direct deposited into their accounts at their financial institutions by midnight Tuesday (Associated Press via Kennebec Journal Aug. 11). However, only employees who are members of the Lewiston Municipal CU, an $18 million asset credit union that serves primarily federal, state and local government employees, received their checks on time. The computer glitch was repaired by 10 a.m. Wednesday. Employees with accounts at large banks received their pay by 11 a.m. but smaller banks and other credit unions took longer. The city has a payroll of $244,000.

First Financial sees results with Money Mission

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SKOKIE, Ill. (8/12/11)--First Financial FCU, based in in Skokie, Ill., began offering Money Mission, which is generally targeted to 16 to 19 year-olds, a year ago and has seen great results, says the credit union. Money Mission is an interactive Web-based simulation designed to educate users in the fundamentals of financial literacy. It is made available to credit unions through a partnership between the Credit Union National Association and the Wisconsin Credit Union League. Money Mission includes inputs from external data such as stock market prices and cost of living changes; user choices in the area of life-event choices, money management; a user configurable experience including customizable characters (“Avatars”) and selectable vehicles; and entertaining animated lessons teaching users critical financial principles. The $53.6 million asset First Financial CU began using Money Mission at the end of last summer, Jennifer Kulkoski, marketing manager, told News Now. “Initially we ran it through our membership’s high school and college-age kids and gave free movie tickets to those who would try it,” she said. “This year, we started our own scholarship to offer at a school for kids with learning disabilities, and that gave us a good boost in usage as well.” Kulkoski got in touch with a teacher at the school--a contact made through a credit union board member--to offer a $500 scholarship once a year to the winner of an essay contest. Participants write a 250-word essay, answering one of four questions, she said. Students at other schools are also offered a chance at a scholarship, which is advertised through a credit union newsletter, e-mails to members and fliers in the credit union’s lobby, she added. First Financial saw 200 to 215 teens sign up for Money Mission through the credit union’s website, Kulkoski said. A lot of traffic also on the credit union’s website comes from Money Mission participants, according to First Financials’ analytics, she added. “We’ve definitely noticed that a lot of kids who signed up or asked about Money Mission heard about it through seminars they go through at their schools, Mad City Money programs and checking our website,” Kulkoski said. “Kids are really excited. It’s really picking up and is a good program for us.” Regarding future plans for Money Mission, First Financial CU is hoping to join forces with Chicago public schools to offer the program directly through the schools, Kulkoski said.

Appeals court rules for CUNA Mutual on retiree benefits

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MADISON, Wis. (8/12/11)--CUNA Mutual Group retirees had no legal right to prevent the company from eliminating the company’s subsidy of health insurance premiums, a federal appeals court ruled Wednesday. The subsidy included accumulated sick pay the retirees believed would be put toward those premiums. Court documents indicated CUNA Mutual’s current and future health insurance premium subsidies were reflected as a $121 million liability on the company's balance sheet. The U.S. Court of Appeals for the Seventh Circuit Court issued the 2-1 opinion, which sustained a decision by U.S. District Judge Barbara Crabb, who dismissed the suit. Roughly 600 retirees would have been affected (The Wisconsin State Journal Aug. 11). CUNA Mutual was sued after it stopped paying any share of employees’ health care in 2008. That move eliminated the $121 million liability from its balance sheet and, in doing so, eliminated managers’ sick pay balances accumulated since 1982. The retirees’ complaint alleged that CUNA Mutual did not fulfill its promise to compensate employees when they retired for coming into work instead of calling in sick. Some retirees had accrued up to $145,000 in sick pay and expected to use it to pay for their share of health insurance premiums, the newspaper said. An employer can put its own and investors’ interests over those of retirees and employees because the retirees didn’t have a vested interest in their sick-pay benefit, the court ruled. “CUNA Mutual has an obligation to protect the company’s financial position and its policyholders,” Rick Uhlmann, CUNA Mutual senior manager media relations, said in a statement. “As such, we made the very difficult decisions to eliminate the company-funded subsidies for retiree health insurance premiums. “We are pleased two courts have upheld CUNA Mutual’s right and authority to make changes to these types of benefit plans,” he added.

Maine CUs scholarships help college bound offset expenses

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PORTLAND, Maine. (8/12/11)--This year, Maine credit unions presented more than $215,000 in scholarship money, a significant increase from 2010, said the Maine Credit Union League. Maine credit unions provided scholarship money to more than 300 students. The scholarships represent the largest number of scholarship recipients and tuition contributions ever made by the state’s cooperative financial institutions. Nearly every credit union awarded at least one scholarship to a member of the Class of 2011. Understanding the need for many adults to return to school to succeed in a challenging job market, the credit unions also presented more than $20,000 in scholarship funds to non-traditional students. The amounts ranged from $250 to $10,000. “This clearly demonstrates the desire of Maine’s credit unions to enable more Maine people to pursue their education, regardless of where they are in life, or the current economic climate,” said Jon Paradise, league governmental and public affairs manager. “The ‘people helping people’ philosophy of Maine’s credit unions is about not just providing financial services to consumers but is also about providing opportunities to Maine people.” Many credit unions also presented free financial aid seminars in the spring to help parents and their children finance a college education.

Illinois CUs meet in-district with Rep. Kinzinger

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NAPERVILLE, Ill. (8/11/11)--Credit union executives and chapter volunteer legislative forum representatives (LFR) of the Illinois Credit Union League (ICUL) met with freshman U.S. Rep. Adam Kinzinger (R-Ill.) Tuesday at his district office in Joliet, Ill.
Click to view larger imageA delegation from Illinois Credit Union League (ICUL) met with freshman U.S. Rep. Adam Kinzinger (R-Ill.) Tuesday at his district office in Joliet, Ill. From left, are: Donald Edwards, senior vice president, federal governmental affairs, ICUL; Brian Cedergren, CEO, Abri CU, Romeoville; Terry Shuff, CEO, New Century FCU, Joliet; Sandy Burkart, vice president, Financial Plus CU, Ottawa; Tom Pierce, CEO, Canals & Trails CU, Lockport; Kinzinger; Matthew Thraen, consultant, Abri CU; Pete Fauth, ICUL legislative forum representative (LFR), Tri-County Chapter of Credit Unions; and Wade Cooper, ICUL LFR, Will County Chapter of Credit Unions. (Photo provided by the Illinois Credit Union League)
The meeting was requested to provide the congressman with input from Illinois credit unions about their issues and the impact of federal legislation on their memberships. Nearly 150,000 credit union members live in the 11th Congressional District served by 46 credit unions that hold about $1 billion in assets. Issues discussed include small business lending--an initiative that credit unions nationwide and the Credit Union National Association (CUNA) have addressed with Congress to lift credit union restrictions--the credit union federal tax exemption and regulatory burdens. Taking part in the meeting were:
* Sandy Burkart, vice president, Financial Plus CU, Ottawa; * Brian Cedergren, CEO, Abri CU, Romeoville; * Wade Cooper, LFR, Will County Chapter of Credit Unions; * Donald Edwards, senior vice president, federal governmental affairs, ICUL; * Pete Fauth, LFR, Tri-County Chapter of Credit Unions; * Matthew Thraen, consultant, Abri CU; * Terry Shuff, CEO, New Century FCU, Joliet; and * Tom Pierce, CEO, Canals & Trails CU, Lockport.
Since his election during the Fall 2010 election cycle, Kinzinger has been appointed to the Energy and Commerce Committee and was named to the House Majority Transition Team. “We previously met at the time of his inauguration earlier this year, and this is part of our on-going grassroots efforts to better acquaint lawmakers with our important issues and the chapter network of political activists,” said Edwards. “The chapters are an important link in the league’s on-going efforts to show the importance of credit unions in the financial marketplace.”

Rebranding inspires Ohio CU to form marketing CUSO

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SANDUSKY, Ohio (8/11/11)--Among the areas where small asset-sized credit unions find it difficult to compete with larger financial institutions is marketing and social media. A rebranding campaign inspired $145 million asset VacationLand FCU, Sandusky, Ohio, to form a credit union service organization (CUSO) and share its newly developed expertise in developing marketing plans and social media strategy with other credit unions. VacationLand FCU was founded in 1956 to serve the employees, families and retirees of a local General Motors plant. The credit union expanded to community charter in 2001. In 2007, new CEO Kevin Ralofsky initiated a rebranding campaign, which he describes as “tactical survival mechanism” to keep the credit union relevant. Ralofsky told News Now he feared that the credit union’s maturity would lead it to obsolescence if there wasn’t effort to reach out to the next generations. He envisioned the credit union as a bigger corporate citizen in Sandusky. Working with Mark Advertising, a local agency, VacationLand FCU designed a new logo and brand, and built a marketing strategy around reaching out to the next generations of credit union members, increasing involvement in the community, and continuing to serve its existing membership with superior service. Ralofsky also hired Bryce Roth as marketing coordinator to develop a more strategic marketing planning process and employ social media as part of VacationLand FCU’s new brand. Roth immersed himself in the local community, contacting schools and attending social and sporting events. To get around he used the credit union Big experience (CuBe), a multi-media vehicle outfitted to perform most financial transactions. With glass walls, gaming systems, LED and LED lights in the wheel wells, CuBe is designed to get attention. Roth re-enforced his appearances with what he calls the Holy Trinity of social media: YouTube, Twitter and Facebook. He touted his appearances, made videos of events and kept members engaged with questions and financial advice. “It was part guerilla marketing with appearances and word of mouth through social media to develop critical mass and get people engaged,” Roth said. The credit union also formed the Change Agent Squad (CAS), a group of high-school and college students who serve as the “pulse” of expectation for their age group. The intent of the CAS is to educate their peers and the community on the differences between credit unions and banks. Roth said the credit union surveyed a group of local students and asked them what they wanted in a financial institution. “They were very clear: They wanted a financial institution that put time and energy into the community,” Roth said. “We said, “That’s what credit unions are all about.’” The change squad’s first event--a canned food drive--raised 1,600 canned food items, enough to supply a local food bank for four months, Roth said. Since then the group has worked with the Humane Society and United Way on similar events. “Whenever we do an event, we use Facebook, Twitter and YouTube,” Roth said. “The kids like to see themselves on video, but most important, they tell their friends: ‘These people actually listened to me.” Since January, VacationLand FCU has experienced a steady increase in membership among its targeted membership age group of 15 to 45 year olds. About 60% of net new membership is under the age of 31. Also, 86% is under 46. Ralofsky was so happy with the turnaround, he thought the strategy would work at other credit unions, he said. So VacationLand FCU started its own CUSO, Chatter Yak, to bring marketing planning and social media solutions to credit unions. “We thought, ‘Wow, we can duplicate this and share it with other credit unions,’” Ralofsky said. “It all started with our need for social media. A lot of big credit unions not only have marketing departments, they [also] have people whose jobs are dedicated to social media. That doesn’t have to be the case, and they can still be very effective in reaching their audience.” In addition to social media planning, Chatter Yak offers marketing campaigns “in a box,” billboards and digital and on-hold marketing. Chatter Yak starts each client with an in-depth survey that covers the credit union’s history through its current social media needs. The survey is followed up with a Webinar or face-to-face brainstorming session to discuss survey results and the credit union’s marketing vision. Chatter Yak then develops what Ralofsky calls a “30,000-foot-view” marketing tactical plan for the credit union. “The idea is to provide the CEO with a plan outlining marketing goals that are in line with the credit union’s strategic plan that he or she can take to the board,” Ralofsky said. If a credit union is interested in employing Chatter Yak’s social media strategy, the CUSO provides social media planning campaign management, including curriculum, a branded website for a Change Agent Squad, focus group surveys and event planning. “We’re sticking our necks out to provide real value early in the process,” Ralofsky said. “We think we’ve created products, services and strategies that allow the smallest credit unions to get in the game and look like experts at marketing. That’s the key.” Chatter Yak has signed on eight clients, Ralofsky said.

CU System briefs (08/11/2011)

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* LANCASTER, Pa. (8/12/11)--A Maryland man has been arrested by York, Pa., area police in connection with seven robberies, including armed robberies of two credit unions on Wednesday. Jason Dixon of Baltimore and a female were arrested at a traffic stop near the Maryland border in a car with a handgun and a bag of cash, said police. Wednesday's robberies were at LANCO FCU, Mount Joy at about 3:15 p.m. and at AmeriChoice FCU, Lower Allen Township, at about 4 p.m. The robber was dressed in black clothing with the word "POLICE" written on his shirt and hat. Police said Dixon is a suspect in five other robberies ( Aug. 10) … * ONTARIO, Calif. (8/12/11)--The California and Nevada Credit Union
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Leagues were recognized with Awards of Distinction at the 2111 Communicators Awards. Awards went to the leagues' communications and marketing department for its 2010 Annual Meeting and Convention marketing campaign and flagship publication, Credit Union Digest. The Award of Distinction is presented for projects that exceed industry standards in quality and achievement, announced Carol Payne, vice president of communications and marketing at the leagues. The meeting campaign used the theme, "Reimagine," to acknowledge a need for new thinking for a changing industry and slumped economy while alluding to the fun aspect of the event at the Disneyland Resort in Anaheim, Calif. The Communicator Awards is the international awards program honoring creative excellence for communications professionals. (Photo provided by the California and Nevada Credit Union Leagues) … * ST. LOUIS (8/12/11)--St. Louis-based Vantage CU has named Jenn
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Cloud of St. Charles as its second Young & Free St. Louis spokesperson. Cloud, shown here with Rob Cartwright, Vantage's 2010 spokesperson, was one of 26 applicants for the position. Three finalists were voted on by the public. "Jenn impressed us with her wit and quirkiness. The tone of her videos, blogs and posts stood out, not to mention, her prior agency experience make her an ideal candidate to be the voice of the St. Louis 18-to-25 crowd," said Kathy Palmer, Vantage vice president of marketing. Cloud will be a salaried employee for one year and will attend events, update social media and create regular online videos and blog articles to keep an informative hub for the age group. (Photo provided by Vantage CU) …

CU uses pop-up branch to sign up members

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PORTLAND, Ore. (8/12/11)--Unitus Community CU, which has been using
Click to view larger image Brett Wooden, business development manager at Unitus Community CU, Portland, Ore., provides a virtual tour of products and services for a guest attending a pre-opening event for the new Unitus Mall 205 branch. The credit union is using the iPad to make membership enrollment easier for both members and the credit union.
iPads to sign up new members where they work or live, took the idea another step by creating a pop-up branch prior to the opening of its new Unitus Mall 205 branch. In the pop-up, which was a tent designed to resemble a Unitus branch, staff armed with iPads quickly checked in lines of people attending the pre-opening festivities. "So instead of standing in line for a long period, people had the extra time to enjoy food and beverages and to mingle with radio station personalities," said Brett Wooden, business development manager at the Portland, Ore.-based credit union.
Click to view larger image Amy Ferdinando, senior business development officer at Unitus Community CU, shows how easy it is to become a member by completing "paperwork" on an iPad. Unitus staff were on hand for a branch pre-opening event where use of technology cut time waiting in line for hundreds who could then enjoy the festivities. (Photos provided by Unitus Community CU)
"It also gave our staff an opportunity to take everyone on a virtual tour of Unitus' services, including Total Finance and UOnline," he added. Because the Mall 205 branch wasn't scheduled to open until July 25, those who wanted to become new members during the pre-opening event could sign up at the event. During the three -day event, Unitus welcomed 99 new members. In a similar pre-opening at the credit union's Peterkort branch in Beaverton, Unitus gained 186 new members. Unitus marketed the pre-opening with a post-card mailing and an offer of a free iPod Nano to the first 100 in line. Unitus said that judging by calls and e-mails it received from around the globe, it was the first to use iPad technology to make it more convenient for people to become members. The credit union has received invitations to speak about it at conferences and at online marketing seminars and been recognized in several national credit union industry publications.

Corporate America at 4.13 cap ratio--without members capital

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IRONDALE, Ala. (8/12/11)--Corporate America CU CACU) will be one of the surviving corporate credit unions, weighing in with a 4.13% capital ratio as of July 31--without requiring any capital from members, according to the Alabama-based corporate. The deadline for corporate credit unions to comply with the capital requirements of the National Credit Union Administration's Regulation part 704 is in October. Corporate America determined it would not require capital of its members because its leadership believes that capitalization should be a choice, not a mandate, CACU said in a press release. "By voluntarily investing in Corporate America's capital, our members have given us their highest vote of confidence," said Thomas D. Bonds, president/CEO. "We have substantially the same amount of retained earnings as we did prior to the [nation's financial] crisis and far more capital. In fact, we anticipate approaching a 5% interim leverage ratio within nine months," he added. Throughout the crisis, CACU took the approach that "it's a privilege, not a right, to have the trust of our members," Bonds said. The message resonated with membership and many other credit unions, said the corporate. CACU's asset size and the number of member credit unions have doubled in the past two years. CACU now serves more than 400 credit unions in 32 states. "Corporate America is stronger, larger, and better capitalized than ever before," said Bonds. "We're able to face our members because none of them lost capital at Corporate America. We will not require capital. We don't need to. We work for our members, not the other way around," he added.