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CU System Briefs (08/13/2013)

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  • KNOXVILLE, Tenn. (8/13/13)--A Knoxville, Tenn., man was arrested Thursday evening in connection with the robbery Wednesday of Oak Ridge, Tenn.-based ORNL FCU. The branch robbed was in a Kroger grocery store. Arrested was David Wayne Wilson, 33. The robbery occurred at about 6 p.m., when a man entered the credit union, said he had a weapon and gave the teller a demand note. He fled with an undisclosed amount of cash in a black pickup truck. Wilson was arrested without incident at residence (The Daily Times Aug. 9) ...
  • MARION, Ind. (8/13/13)--Charles Street FCU, based in Marion, Ind., plans to move downtown and change its name to Riverside CU (Chronicle-Tribune Aug. 11). Tim Moorman, CEO/president, said the new location will provide better traffic flow and help revitalize an area of downtown that has been distressed for decades. The new 6,400-square-foot building will be ready in six to eight months. The $30.3 million asset credit union will keep some operations, mostly transactions, in its old building, while the lending and corporate headquarters will move to the new location. The name change will occur later this month ...
  • NEW BEDFORD, Mass., and BROCKTON, Mass.(8/13/13)--Two Massachusetts credit unions have asked the state Division of Banks for permission to expand their membership.  Brockton-based Crescent CU, a $401 million asset credit union, plans to allow members from Barnstable, Bristol, Dukes, Norfolk, Plymouth and Suffolk counties and to expand into five counties in Rhode Island and certain communities in Middlesex and Worcester counties.  New Bedford (Mass.) CU, a $120 million asset credit union, is seeking to allow members from Barnstable, Bristol and Plymouth counties, as well as in Little Compton and Tiverton, R.I. (Boston Business Journal Online Aug. 9) ...
  • RALEIGH, N.C. (8/13/13)--
    Click to view larger image Click for larger view
    Twenty-five students from Hertford County, N.C.'s, 4-H summer Science, Technology, Engineering and Math (STEM) camp visited the outdoor community garden project sponsored by Raleigh, N.C.-based State Employees CU's Ahoskie branch. The educational field trip connected the 4-H program's mission of experiential learning and provided students a hands-on experience to see how fresh farm produce is grown and harvested. Students dug for potatoes and picked vegetables to take back to class to study, cook and taste. The group of fifth through eighth graders also toured the branch and learned more about the credit union's involvement in the community.  Pictured is James Eure (in hat), senior vice president of SECU's Ahoskie branch with some students. (Photo provided by the State Employees' CU) ...
  • ALBUQUERQUE, N.M. (8/13/13)--David Woodruff, president/CEO of Zia CU in Los Alamos, N.M., has been appointed by Credit Union Association of New Mexico Board Chairman Chris Fitzgerald as the new chairman of CUANM's Governmental Affairs Committee. The GAC works to forge relationships with congressional representatives and keep them informed about the needs and concerns of the state's credit unions and members. "I believe individual leaders from credit unions have a big impact with our legislators when we take the time to get to know our representatives and help them better understand what makes us different, appreciate the significant number of constituents we represent, and realize how our member/consumer oriented business decisions benefit their constituents and the communities they represent," Woodruff said.  He has been with Zia CU since November . Previously he was vice president of lending at CommonWealth One FCU, Alexandria, Va., for more than 11 years, and with Numerica CU, Spokane Valley, Wash., for seven years ...

Goldman Sachs Seeks Delay In RMBS Lawsuit

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LOS ANGELES (8/13/13)--Goldman, Sachs & Co.  has asked a federal court in Los Angeles to stay the discovery process in the National Credit Union Administration's  lawsuit against the firm over residential mortgage-backed securities (RMBS), until an appellate court resolves the matter of whether NCUA's lawsuits against several brokerage firms are time-barred.
 
NCUA had brought 47 claims for $491 million in losses related to 21 certificates and 13 RMBS offerings in the Goldman Sachs case, which is one of seven similar lawsuits the agency has filed against Wall Street banks over losses incurred by U.S. Central FCU and Western Corporate FCU.
 
The corporate credit unions no longer exist and NCUA has argued that the offering documents for the certificates materially misrepresented the risk involved in investing in the RMBS and contributed to the corporates' demise.
 
In the motion filed Thursday with the U.S. District Court for the Central District of California, Goldman Sachs said the certificates sold were backed by almost 45,000 loans and that some of the non-parties such as loan originators Indy Mac, First Franklin and Countrywide, depositors such as Residential Accredit Loans Inc., and even the corporates have failed "and obtaining their records will require substantial effort."
 
It is requested the stay of discovery because of  "the extraordinarily voluminous, complex, expensive and burdensome discovery from the parties and numerous non-parities (including loan originators, loan servicers, due diligence providers, and rating agencies, among many others) necessary to litigate this action may be streamlined (if not obviated entirely) by a decision from the Ninth Circuit."
 
NCUA's lawsuit is on interlocutory appeal in the Ninth Circuit Court of Appeals, while a similar case against RBS Securities is on appeal in the Tenth Circuit Court of Appeals. Both appellate courts are reviewing issues related to whether NCUA filed its lawsuits before the statute of limitations or repose expired. NCUA argues that tolling agreements signed by some of the defendant banks and an extender statute gave it more time to file.
 
Goldman Sachs pointed out that a Kansas court involved in the RBS Securities case has granted a similar stay of discovery. It based its request on four arguments: that the petitions raise serious legal questions; the discovery process would impose "staggering costs, many (if not all) of which could be avoided depending on the resolution of the appeals"; NCUA would not be injured as a result of a stay "since there is no risk that evidence would be lost during the stay"; and that granting a stay appeals to the public interest by judicial resources and avoiding burdensome non-party discovery.
 
The motion also pointed out that NCUA waited two and a half years after putting the corporates into conservatorship before it filed a suit and that the agency might also benefit from the stay by avoiding expenses related to the discovery process.
 
The court document also said NCUA has stated in its July 23 Notice of Lodging and during a July 29 status conference "that it opposes any stay of discovery." Goldman Sachs said it confirmed NCUA's opposition to a stay during a meeting on Aug. 7.
 
A hearing is set for Sept. 5, according to the court document.

CO-OP Paper: Mobile Wallets Have Arrived

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RANCHO CUCAMONGA, Calif. (8/13/13)--Credit unions should operate from the assumption that mobile wallets aren't a technology of the future, but in fact, are here now, according to a new white paper from CO-OP Financial Services.
 
What's preventing widespread adoption of the technology is the uneven experience of the options currently available, spotty awareness and low use, said the paper, "Digital Wallets in Depth: What are they? How do they work? And where do credit unions fit in?"
 
Gartner Inc. predicts 45 million people worldwide will use mobile payment technology this year, generating $235 billion in transactions, in its report, "Forecast: Mobile Payment, Worldwide, 2013 Update." By 2017, the research firm expects the ranks of mobile payment users to reach 450 million, with $721 billion in transactions.
 
"The gap between expectation and usage is still wide, which makes this the perfect time to get involved," CO-OP's paper said. "Begin now by getting your credit union's cards into mobile wallets. This strategy is not only easy, but it's also smart. You don't have to choose the winning technology. You don't have to create or mobilize your own new technology. Even if things change in the future, there's no real downside to being in today's wallets. And, for the record, interchange works the same in wallets as it does anywhere else."
 
The paper makes several recommendations about how credit union's can can become involved in the mobile wallet marketplace:
  • Encourage adoption. Members at most credit unions are using mobile wallets now, the paper said. Encouraging them to do so--especially in tandem with using payment cards--increases the chances that they will put credit union cards into their wallets. Getting in on the ground floor is an important first step.
  • Keep your options open. CO-OP is taking a nonexclusive approach to wallets. The company thinks that's a good approach for credit unions as well. Rather than trying to commit to one product, CO-OP suggests encouraging members to choose their own (or try many)--all with the credit union's cards in hand.
  • Focus on mobile payments. People aren't adopting wallets as quickly as they are mobile payments. Aligning the credit union with the mobile payment experience is an excellent way to get members to associate you with mobile wallets in the future, said the paper.
  • Stay alert. The digital wallet mark market is evolving; it's important to evolve with it.
 To download the white paper, use the link.

Ohio CU Foundation Grant Aids Flood Victims

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COLUMBUS, Ohio (8/13/13)--Integrity FCU, Barberton, Ohio, received a grant totaling $5,000 from the Ohio Credit Union Foundation to assist members faced with losses from recent storm flooding, the Ohio Credit Union League said.
 
The credit union is giving a maximum of $250 to any member who suffered losses from the July flooding (eLumination Newsletter Aug. 7).
 
The funds will help members with essentials such as food, clean supplies and small appliances, Integrity FCU CEO Karen Hardy told the league.

Bloomberg, Media Cover CUNA's Non-public Entities Comments

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WASHINGTON (8/13/13)--The Credit Union National Association's comments on the Financial Accounting Standards Board (FASB) proposal to redefine the meaning of "public business entity" and its positive impact on credit unions were the topic of several national media stories this weekend, including Bloomberg BNA, Accounting Today and Financial Planning.
 
BNA reported CUNA Deputy Counsel Mary Dunn's analysis of the proposal, which would enable credit unions as non-public entities to qualify for more flexible accounting requirements.
 
Dunn said that being able to qualify for private company generally accepted accounting principles (GAAP) modifications could potentially provide relief for nonpublic entities on how to account for credit losses.
 
"That [proposal] could be a good candidate for one of the areas that credit unions can benefit because they just don't need to have all of that reporting that would be required under [GAAP] for their stock holders because they don't have stock holders," she said. 
 
The article noted that CUNA has long advocated to FASB that credit unions, based on their structure as not-for-profit, member-owned financial cooperatives, should not be subjected to onerous and costly reporting requirements that should be applied to only publicly traded companies.  "By law, credit unions must use their earnings to build capital and as member-owned cooperative institutions, work hard to provide favorable rates on loans and savings and to minimize fees," she said.
 
Dunn also noted that although the proposal is a positive step for credit unions in terms of affirming their nonprofit status under GAAP, two potential areas for concern are its lack of applicability to existing GAAP, and the potential of interference from regulators.
 
Another article along the same lines also appeared in Accounting Today and was republished in Financial Planning, myplaniq.com, and silobreaker.com. Use the link for an example.

Wis. DFI: State-chartered CUs' Income Grew 9%

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MADISON, Wis. (8/13/13)--Wisconsin's state-chartered credit unions increased net income by 9% in the six months ending June 30, compared with the previous year, according to data released Wednesday by the Wisconsin Department of Financial Institutions (DFI).
 
"Wisconsin credit unions once again demonstrated that the way to grow earnings is through good loan quality and prudent expense management," DFI Secretary Peter Bildsten said.
 
Net income was $110.3 million, up from $101.2 million in the first half of 2012, said the Wisconsin DFI.

Compared with the six months ending June 30, 2012, Wisconsin's 179 state-chartered credit unions:
  • Grew assets by 5.1% to $24.3 billion;
  • Improved net worth to 10.28%, up from 9.83%;
  • Lowered the delinquent loan ratio to 1.26% from 1.55%; and
  • Reduced operating expense ratio to 3.33% of assets from 3.44%.
Credit unions' deposit growth of 5% outpaced loan growth of 3.3% in the first two quarters, Bildsten said.
 
"Figuring out how to put excess deposits to work in a low-interest rate environment continues to be a challenge for the industry," he added.
 
Merger activity in the past year was strong for several reasons, with the number of state-chartered credit unions declining to 179, compared with 194 as of June 30, 2012, said Kim Santos, director of the state's Office of Credit Unions.
 
"Some of our smaller credit unions are struggling with loan growth, loan quality and expense control," Santos explained.

San Diego County CU Breaks World Shredding Record

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SAN DIEGO (8/13/13)--San Diego County CU set a new Guinness World Record for the most paper collected in 24 hours when it shredded 165,000 pounds of paper July 20.
 
"SDCCU has set the new world record and put San Diego on the map," said Teresa Halleck, San Diego County CU president/CEO. "We are very grateful to our community for their support and being part of setting a world record. Moreover, we are happy that fewer individuals now have sensitive information sitting around their house."
 
The credit union began the project at 7 a.m. at the Qualcomm Stadium parking lot in San Diego's Mission Valley. Credit union members, families, friends and the public began bringing boxes full of old documents containing personal and confidential information that was shredded on the spot at no charge. Shred-It, a document destruction and recycling company, provided the shredding services.   
 
Clear Channel Media + Entertainment San Diego radio stations KISS 95.7 and KOGO 600 were on-site promoting the event. Firehouse Subs and Rita's Italian Ice provided free food to document contributors. Donations made at the event benefited the San Diego Humane Society and Society for Prevention to Cruelty to Animals, and raised more than $5,000.
 
Since 2007, when SDCCU began hosting its free Shred Day events, more than 634,500 pounds of documents have been shredded and recycled at no charge, saving more than 6,000 trees.
 
The previous record was 156,880 pounds of shredded paper, set by television station KHQ 6, American West Bank and Secure Shred in Spokane, Wash.

CUNA Mutual, CU Pledge $105K To Leader In Me

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CEDAR VALLEY, Iowa (8/13/13)--Two Cedar Valley of Iowa financial service organizations have pledged $105,000 to help ensure an effective leadership development initiative reaches students in two more schools in the area.
 
CUNA Mutual Group and Waterloo-based Veridian CU pledged the amount to the Greater Cedar Valley Alliance and Chamber's Leader Valley initiative to further implement The Leader In Me program.
 
The initiative builds personal skills as students put into practice the principles of Stephen Covey's The 7 Habits of Highly Effective People. Schools where the program has been implemented successfully see higher academic achievement, fewer discipline problems and increased engagement among teachers and parents, said the three organizations in a press release.
 
CUNA Mutual Group, through its foundation, committed $75,000 to sponsor the program's implementation at George Washington Carver Academy Middle School and Kittrell Elementary, both located in Waterloo.  Veridian CU committed $30,000 to Kittrell Elementary  and also participates in the school's Partners in Education program.
 
The amount will be distributed over three years and initially will provide training and materials to staff and educators at the sponsored schools.
 
With the addition of the two schools, the program now has 14 Cedar Valley schools participating. Roughly 6,075 students and 842 educators will participate during the upcoming 2013-2014 school year. That number represents more than one-third of total students and educators in the Waterloo, Cedar Falls and Cedar Valley Catholic schools.
 
"We believe everyone is a leader," said Jean Trainor, Veridian CEO and chief inclusion officer.  "The Leader In Me program demonstrates that same belief and benefits our entire community as much as it does the students who participate."
 
Reid Koenig, vice president of CUNA Mutual Group, said, "When one interacts with students who have been impacted by The Leader in Me, you quickly realize the effect the program is already having in transforming their lives. Our communities and businesses will reap the benefit of building great citizens and leaders for years to come."
 
Steve Dust, CEO of the Greater Cedar Valley Alliance and Chamber noted that one of that group's "primary goals is to develop a strong, highly talented and skilled workforce to help businesses of all sizes grow and prosper in Cedar Valley."
 
The combined $105,000 will be presented Thursday at the New Teachers Breakfast at Hawkeye Community College.
 
Such outreach programs provide examples of credit unions demonstrating their value to their community by fostering excellent service, raising awareness of the value of credit unions in the community and removing barriers as part of the Credit Union National Association's and state leagues' Unite for Good campaign. That campaign's goal is to have "Americans choose credit unions as their best financial partner."