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Boomers need CUs retirement advice

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MADISON, Wis. (8/24/11)--As the stock market wobbled last week and concerns about 401(k) plans grew, a study released Thursday pointed out that middle-income Baby Boomers--those with salaries for $25,000 to $75,000--are poorly prepared for retirement. Credit unions have yet another opportunity to provide solid financial education for a significant segment of their membership. Battered retirement accounts, dropping home values and boomers' lack of personal savings are shattering the retirement confidence of middle-income Baby Boomers, said Middle-Income Boomers, Financial Security and the New Retirement, a study from Bankers Life and Casualty Co. Center for a Secure Retirement (CSR). The CSR study focused on 500 middle-income Americans between 47 and 65 years old (PRNewswire Aug. 18). It found nearly 21% of boomers have not seen any rebound in the value of their retirement accounts, 16% report they owe more on their mortgage than their home is worth, and 19% have less than $10,000 in retirement savings. The economic meltdown has forced members of this group to reshape their expectations about retirement and significantly adjust their lives to the financial realities of the new retirement norms. Despite the bleak outlook, boomers are demonstrating a commitment to save for retirement. Nearly one-fifth (18%) say they are saving more money now than before the recession, and more than half (55%) are spending less on discretionary items. Other findings:
* Twenty percent of boomers whose employers contribute to a retirement plan report that their employer reduced matching contributions, while 95% of boomer who participate in these plans increased their personal contribution. * Although 52% have a 401(k) and 48% own an Individual Retirement Account (IRA), 14% have no 401(k), IRA, pension or any other type of retirement account. * Thirty-two percent of boomers surveyed have already paid of their mortgage, but another 48% said they do not expect to have it paid off by the time they retire.
Credit unions can take financial education action on the Baby Boomer retirement front, according to the Credit Union National Association's 2011 Environmental Scan. Some choices include:
* Increase members' financial literacy with a variety of educational approaches: in-person classroom, textbook, online-interactive tutorials, gaming, just in time articles, mobile apps and experiential learning. The learning-by-doing is the most effective. * Make sure your financial literacy program doesn't have any gaps in subject matter. Many credit unions provide budgeting and debt management topics but people in different life stages need different kinds of information. * Tap into the $13 trillion boomer market and help boomers manage their funds. Members who retire are looking to consolidate financial relationship, and credit unions lose members at this point. Expand the credit union's expertise in estate planning, insurance, Medicare and Social Security topics. Make sure they understand the tax implications of prematurely withdrawing retirement funds. * Many adults learn financial education at work. Work with select employee groups in your membership to promote saving for retirement early in members' careers. Tailor your financial educational program by finding out what boomers value most.
Don't forget the rest of the membership. Younger members will grow older and need retirement planning when their turn arrives. But they also have the added burden of paying into a system under the strain of the boomers' retirement years. The earlier credit unions educate young workers about their future prospects, the more likely they will make wise financial choices and perhaps avoid the boomers' experience of not preparing enough for retirement.

CU System briefs (08/23/2011)

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* ST. PAUL, Minn. (8/24/11)--Kristina Wright, vice president-association services for the Minnesota Credit Union Network, was named as a Finance & Commerce 2011 Top Women in Finance honoree. The program recognizes the efforts of women who make notable contributions to their professions and communities. Wright oversees and manages MnCUN's dues supported operations. She also served five years on the Minnesota Jump$tart Coalition for Personal Financial Literacy, two of them as vice president. Wright is MnCUN's staff liaison for its international partnership with a Paraguan credit union association. This year's honorees include four CEOs, six partners and shareholders, several presidents and senior vice presidents, and business owners from various industries. Wright and other honorees will be recognized at an awards ceremony in Minneapolis on Nov. 10 … * TRENTON, N.J. (8/24/11)--Garret Komjathy, director of the New Jersey Division of Banking announced Monday he will leave state government on Aug. 31 (The Daily Exchange Aug. 23). He said he plans to pursue management opportunities in the commercial banking industry, where he spent more than 25 years as a senior relationship manager in that industry. Before he joined the division, he held senior corporate banking positions at GE Commercial Finance, Fleet Bank and HSBC … * HARRISBURG, Pa. (8/24/11)--The Pennsylvania Credit Union Service Centers Inc. (PaCUSC) Board has appointed Troy Garvin, CEO of Omega FCU, Pittsburgh, to fill out the unexpired term of Karl Larson. Garvin's term will expire in 2012 (Life is a Highway Aug. 23). PaCUSC provides assistance to credit unions in Pennsylvania and Delaware that are interested in joining the shared branching network … * ONTARIO, Calif. (8/24/11)--A Richard Myles Johnson (RMJ) Foundation/CUNA Mutual Golf Tournament Aug. 15 in Newport Beach,
Click to view larger image Click for larger view
Calif., raised more than $37,000 for the state foundation for credit unions in California and Nevada. The event attracted 90 players and 37 sponsors. The tournament's winning group was this team from BIT Statement. Pictured are Mark Selland, Dave O'Malley, Rick Thompson and Matt Leventhall. Second place went to Jeff Smith, SkyOne FCU; Blaze Holbert and Greg Holley of Primary Partners Financial; and March Chandler of CU Dealer Alliance. Madison, Wis.-based CUNA Mutual Group served as title sponsor. Other major sponsors included CO-OP Financial Services, CUDL, and Financial Services Center Cooperatives, SchoolsFirst FCU, and California League Services Corp. (Photo provided by the California and Nevada Credit Union Leagues) …

Illinois collections staff address issues in roundtables

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NAPERVILLE, Ill. (8/23/11)--Collectors roundtable events have been hosted for the past dozen years by Creditors Resource Services (CRS), a division of the Illinois Credit Union League (ICUL) Service Corp. Two roundtables held recently at ICUL’s offices in Naperville and in downstate Glen Carbon, saw attendance by 65 individuals representing 35 credit unions. Topics discussed included bankruptcy, foreclosures and short sales, changing laws relative to repossessions, and the use of social media as part of the collections process. At the meetings, recovery specialists in the state can network, "They discover their situations are the same, no matter their location, and learn how to deal with their members in unique way to be successful.” said Sheila O’Leary, manager of CRS. The last roundtable included the real estate and bankruptcy arenas. “Sometimes opportunities are brought to our attention that we may not have dedicated time toward pursuing, and these meetings provide us with an avenue to follow up afterwards and learn more from our counterparts on a one-on-one basis," said Ann Ellingsen, vice president, Niles Township Schools CU, Morton Grove. LSC hosts a listserv so collectors around the state can network and seek advice on issues they face in their credit unions. About 150 people representing more than 100 credit unions of all sizes are on the listserv. This use of technology has significantly encouraged more interaction among colleagues, said CRS. The roundtables and listserv also act as a support group and help foster the sharing of techniques. The dialogue also helps participants benchmark their efforts against what is happening in the marketplace, as well as continue to raise the profile of how collections contribute to a credit union’s bottom line, and move past the perception of dubious tactics used in the past, said CRS.

Springfield Mo.s largest CU changes name

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SPRINGFIELD, Mo. (8/24/11)--Postal Federal Community CU (PFFC), the largest credit union in Springfield, Mo., has changed its name to Blucurrent CU, it announced Monday. The more than $130 million asset credit union said it changed its name to eliminate confusion about who can open an account there. PFCC was established in 1929 by Springfield postal workers but later expanded its membership to include federal employees. In 1994, it was granted the ability to serve everyone who lives or works in a 10-county area in southwest Missouri. "We've always struggled with the misconception that you had to be a postal or federal employee to use our credit union," said Steve Pierson, president/CEO of Blucurrent CU. "By creating a more inclusive name, this will greatly help us spread the message." To develop the new name, the credit union worked with Weber Marketing Group, a firm that has assisted more than 40 credit unions through renaming projects. "By making the decision to change our name, we are in no way changing our philosophy or turning away from our postal- and federal-based heritage," said BluCurrent board Chairman David Phelps. "We aren't being sold or merged. Account holders are going to see the same great people working here, and receive the same great service they're used to." For more information about the name change, use the link.

Virginia earthquake prompts evacuations

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MINERAL, Va. (8/24/11)--Early reports have credit unions, like most other businesses along the East Coast, largely unscathed by Tuesday's 5.8 magnitude earthquake near Richmond, Va., even though the event produced tremors felt as far away as Toronto, Cuba, and Missouri. The tremors shook buildings in Washington, D.C. and New York City, causing numerous building evacuations and early closing of federal government offices. Credit unions in the area had not reported damage by press time. "We are not aware of any damages to credit unions at this point, but our property and casualty claims staff is in the process of contacting policyholder credit unions in the area," said Phil Tschudy, media relations manager for CUNA Mutual Group. The credit unions closest to the earthquake's epicenter are in Charlottesville, which has five credit unions, and Richmond, which has about 26 credit unions. Richmond is 41 miles southeast of the epicenter in Mineral, a small farming and bedroom community in rural Louisa County. It has a population of 430 ( Aug. 23). Virginia CU, which is headquartered in Richmond and has branches throughout the state, said it had no damages to report. "It was quite an experience," said Jean Hulman, senior vice president of marketing. "But I'm not aware of any issues, nor any reports of damages, and as far as I know communications are working at our branches," she told News Now. Hulman described the earthquake, which hit at 1:51 p.m. ET, as a lot of "rattling, shaking, noise and rumbling. We weren't sure what it was. We did evacuate, but not for very long," she said. She noted the entire office park where the credit union is based was evacuated. Hulman had not heard of other credit unions with damage and said local media were reporting "minimal" damages in the Richmond area. No state-chartered credit unions had reported closing as of 3 p.m., according to Werner Paul, deputy commissioner of Virginia Bureau of Financial Institutions, Richmond. The earthquake could be felt for about one minute in the bureau's Richmond offices, but the bureau did not evacuate, he told News Now. The Federal Reserve Bank of Richmond was open and operating, and its employees did not evacuate, a spokesperson told (Aug. 23). As of press time, News Now was unable to reach the Virginia Credit Union League, which is located in Lynchburg, or the National Credit Union Administration in Arlington, Va. Several credit unions contacted had staff out of the office, but it was not clear whether that was related to the earthquake or any evacuation. The epicenter was 83 miles south of Washington, D.C. (MarketWatch Aug. 23). Federal government buildings such as the White House, Capitol and the Pentagon were at least partly evacuated when they shook for about a minute. Many at the Credit Union National Association's headquarters in Washington evacuated the building during the quake, but staff were soon allowed back inside. The federal government dismissed all the Washington metropolitan offices early and said the operating status for today would be posted by 4 a.m. News reports said that cell phone service was knocked out in New York City and that a nuclear power plant momentarily lost power but was operating normally. Computerworld reported that traffic on Twitter and Facebook "lit up with the news" on Tuesday afternoon. "People were quick to turn to their favorite social networking sites to report the quake, with many tweeting or posting while the shaking was still going on," the publication said. It noted that a reporter in Maine learned of the quake on Twitter before feeling the shock waves that reached that state. The earthquake, which originally was reported as a 5.9 magnitude before being reduced to 5.8, is the largest to hit Virginia since 1897, according to the U.S. Geological Survey ( Aug. 23).

No Suckers Here helps youth prep for managing money

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SAN ANTONIO (8/24/11)--Generations FCU in San Antonio designed its “No Suckers Here” program to convey the importance to youth of being prepared to deal with personal financial matters, said the Texas Credit Union League. The program works with high schools, colleges and universities in the area. Generations meets with school administrators to determine the specific needs of their student body and then tailors a program designed to fit those needs (LoneStar Leaguer Aug. 23). “The financial education of our children is one of the most important initiatives that a credit union can undertake,” said Generations CEO Tim F. Haegelin. “These programs reach out and guide students as they begin down the path to financial independence.” One partner is Palo Alto College (PAC). Generations met with its administrators and determined that many PAC students have different needs than traditional college students. Many students come from low-income families, most are first-generation college students, and nearly all work jobs as they pursue their degrees. Few of PAC’s students have a primary financial institution; they use payday lenders instead. The credit union tailored a six-week program that covered such topics as basics of banking, budgeting and savings; decision-making; living on your own; identity theft; and getting out of financial trouble. Generations also provided similar financial education programs to faculty, administrators and parents. Generations said that when these concepts are adopted at home and reiterated at school, they are reinforced in the mind of the student. Generations points out that its education classes are not lectures. Facebook, YouTube, blogs, and video blogs are some of the methods it used to engage students. The credit union launched the “No Suckers Here” in three schools, and within five months, their program expanded to five high schools and two colleges. The credit union is on task to double those numbers this school year. “No Suckers Here” helped Generations win a 2011 Desjardins Youth Financial Education Award, earning first place in the $150 million to $500 million in assets category at state level competition. Generations now advances to judging by the Credit Union National Association at the national level.

Study Four trends will define banking experience

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MOUNTAIN VIEW, Calif. (8/24/11)--Increased regulatory pressures, the rapid adoption of mobile devices, heightened customer expectations and relationships will reshape the financial services industry over the next decade, according to the “Intuit 2020 Report: The Future of Financial Services.” The report identifies four trend areas that will shape financial services: 1. A New Playing Field for Financial Services: Regulatory pressures will increase and competition will grow from both traditional competitors and new entrants. These forces will lead financial institutions to explore new business models, collaboration and partnerships, and increased consolidation. Credit unions are already seeing consolidation efforts in the number of mergers among credit union, leagues and corporates. Four such mergers were introduced last week. 2. Shifting Segments, Changing Markets: Member-consumer demand for financial services will increase across all age groups. The two largest contingents--aging baby boomers and GenYers--will demonstrate particularly acute shifts in their needs and types of products and services they purchase, said Intuit. Credit unions have made efforts to attract Gen Y members using social media, focus groups and marketing campaigns Young & Free--available to one credit union in each state from Currency Marketing--provides tools to engage the youth market, through a combination of social media and contests to find a young, media-savvy credit union spokesperson. Competition to serve mid-market businesses will also intensify, slimming financial institution margins However, the overall small-business sector will continue expanding, with the total number of small and personal businesses increasing by more than seven million during the next decade. Most of this growth will come from micro and personal businesses of less than $1 million in revenue, creating opportunities for financial institutions that can serve these firms efficiently. To compete in the small business lending market, credit unions are pressing Congress to increase their member business lending 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, according to the Credit Union National Association (CUNA). 3. The New Customer Connection: Technology’s role in the customer experience will take center stage. With increased cost pressures and a growing demand for flexibility, accessibility and personalization, financial services organizations will accelerate their use of technology to meet customer needs, said Intuit. Cloud computing platforms and applications will combine with advanced analytical tools, ever-larger data sets, and social and mobile computing to reshape the way the financial services industry designs and delivers value-added products and services to customers. 4. Reputation and Relationships Rule: Institutions that use technology to serve up useful customer insights will win. During the next decade, the financial service industry will shift its focus from transactions to customized value-added services. Credit unions are working to create member loyalty for the long run. At A+ FCU, Austin, Texas members can earn points through the PlusPoints Loyalty program by using services such as their debit cards, direct deposit and online banking. When members accumulate points they earn a higher interest on savings checking or become eligible for discounts on loan products. CUNA’s Creating Member Loyalty Program is designed to use exception member service as a differentiator to create member loyalty. For more information use, the link. Intuit Financial Services helps banks and credit unions grow by providing on-demand solutions and services that make it easier for consumers and businesses to manage their money.

CUNA to IWash. PostI Compliance costs could spark more mergers

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WASHINGTON (8/24/11)--Regulatory burdens in the form of higher compliance costs could lead to more credit union mergers, Bill Hampel, chief economist for the Credit Union National Association, told The Washington Post Sunday. Hampel was commenting after Synergy One FCU, with $180 million assets, based in Manassas, Va., received regulatory approval to merge into the $1.53 billion asset Apple FCU, based in Fairfax, Va. As credit unions struggle with higher compliance costs linked to the Dodd-Frank Wall Street Reform Act, those costs could lead to more credit union mergers, Hampel told the Post. “The compliance burden is a fixed cost, regardless of size,” he said, adding small credit unions may feel the need to join a larger institution to manage the additional paperwork. “What’s more, credit unions may consolidate further as net interest margins--the difference between what they earn on loans and pay on deposits--continues to decline amid tepid loan demand,” Hampel added. Partly because of mortgage defaults, regulators required more credit unions to merge or liquidate assets following the financial crisis, Hampel told the Post. CUNA said 37 credit unions merged or liquidated in 2010, compared with 13 in 2007. To read the article, use the link.

Four South Carolina CUs honored for fin-ed

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COLUMBIA, S.C. (8/24/11)--Four South Carolina credit unions earned state-level recognition for their leadership in financial education through the 2011 Credit Union National Association (CUNA) Desjardins Financial Education Awards. The state awards will be presented at the 2012 Annual Meeting of the South Carolina Credit Union League on April 21. The Desjardins Youth Financial Education Award is given to credit unions that demonstrate leadership in providing financial fundamentals to young people, in advocating for greater public and legislative support of the need, and in working together with like-minded organizations. First-place winners in 2010-11 are:
* SPC CU, Hartsville, $50 million-$150 million in assets, which hosted its third annual “Take the Stage Youth Concert” for financial literacy in 2011, scripting lessons on the credit union difference, value of membership, and money management. Targeted to students ages 13-25, the concert is promoted through member and employee communications, targeted mailings, billboards, table tents at youth-oriented businesses, and posters in branches and community venues. * Palmetto Citizens FCU, Columbia, $150 million-$500 million in assets, which engaged in two financial education programs: volunteer support for educators and participation in National Credit Union Youth Week and the Youth Savings Challenge. In-school activity with the National Endowment for Financial Education High School Financial Planning Program and Junior Achievement (JA) reached 1,620 students in 25 schools and organizations with its 22-person Financial Education Team. April 2011 savings incentive drawings and two special seminars brought 110 young people into new club accounts and 26 other new youth accounts. * SRP FCU, North Augusta, more than $500 million in assets. It helped create reusable materials from the NEFE High School Financial Planning Program, the “JA Presents NEFE” modules, and a supplemental corresponding activity to enhance the credit, identity theft, and insurance modules.
New this year, the Desjardins Adult Financial Education Award identifies outstanding credit union programs in adult and community education, especially those blending instruction with awareness and collaboration in building consumer knowledge. The first winner in South Carolina is Palmetto Citizens FCU, Columbia, in the $150 million-$500 million in assets category. Formerly an educators’ credit union, PCFCU learned that many adults share the need for financial fundamentals. Its free seminars for members and the community provide an open forum for questions and deliver a take-home resource guide. The credit union provides free dinner during the hour-and-a-half events and offers customized versions for businesses, schools, churches, and other community organizations. First-place winners in the state program move on to national judging.