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CU System briefs (08/25/2010)

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* DETROIT (8/26/10)--Arguments ended Wednesday morning in the trial that will decide whether a man convicted of killing an armored-truck guard at an ATM at Dearborn FCU in 2001 will be sentenced to life in prison or the rare death penalty. The jury received instructions from Judge Victoria Roberts and began deliberating on the sentence of Timothy O'Reilly for the death of Norman Stephens during the heist. The case is unusual because Michigan ended the death penalty but can impose it for certain crimes, such as a death while committing a robbery. A death sentence will require a unanimous vote by the 12 jurors. Deliberations will resume today (examiner.com Aug. 25) ... * WENTZVILLE, Mo. (8/26/10)--Frank Nelson has been appointed president/CEO of 1st Financial FCU, Wentzville, Mo., announced the credit union's chairman, Robert Riccardi. Nelson replaces outgoing CEO Nina Pilger. Nelson became president of the credit union in September 2009 and helped improve revenue and earnings the past year. His experience includes seven years with CommunityAmerica CU and nearly three years as an examiner with the National Credit Union Administration. 1st Financial FCU has more than 30,000 members and $220 million in assets ... * HARRISBURG, Pa. (8/26/10)--American Heritage FCU Wednesday introduced a Personal ATM (PAT machine) at Aria Health's Tornsdale campus in Northeast Philadelphia. According to the Pennsylvania Credit Union Association, the machine is the first PAT in Pennsylvania (Life is a Highway Aug. 25). The PAT is a remote video banking system combining ATM convenience and personal two-way interaction. It will handle 95% of typical teller transactions, including check cashing; cash and check deposits; cash, coin and check dispensing; account payments and transfers; new account and loan initiation;, and other service inquiries. The teller, located at a credit union call center, can be seen on a screen and will conduct a two-way conversation ...

University CU in Iowa not hurt by student card regs

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IOWA CITY, Iowa (8/26/10)--New regulations governing credit cards for young people and college students took effect this week, and one campus credit union says that the rules won't have the effect that big banks claim they will. College students will no longer receive credit cards just for being college students, according to the Daily Iowan. Credit card issuers are no longer allowed to tie card solicitations to offers of free food on campuses, and marketing agreements between credit card companies and colleges must be disclosed. Big banks such as Bank of America say lenders won't be able to impose high fees and rates on risky accounts, which will mean people with good credit may have to pay more to get credit. Those with poor credit will find credit harder to get, warned the bank. However, University of Iowa Community CU, based in Iowa City, Iowa, isn't seeing such dire effects, said the article. The new regulations go "after fees that larger banks were charging, and since we weren't really doing any of those things, it doesn't have a profound impact on our income," said Jim Kelly, senior vice president for marketing at the UI Community CU, in the article. The law requires most consumers under age 21 to have a co-signer, but the credit union saw a 60% increase the past year on approvals for its student credit card, Kelly told the Iowan. He noted the card has a low fixed rate and a low credit line. For the full article, use the link.

RV dealer Loans are available from CUs

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RENO, Nev. (8/26/10)--The owner of a Reno, Nev.-based recreational vehicle dealership wrote an op-ed piece to correct the impression that credit is tight and rates are soaring. She's seeing more banks starting to lend now and said "credit unions have never stopped lending money." Laura West, owner of Sprad's RV, wrote the item in the Reno Gazette-Journal (rgj.com Aug. 25) in response to the closure of another area RV dealer, who attributed the closure to tight credit and soaring rates, which West called "nonsense." "Banks are lending. In fact, they call us weekly asking for more business," she said. "While it is true that for about 16 to 18 months the national banking industry tightened up and loans were harder to come by, the local credit unions never stopped lending money. And now the national lenders are playing catch-up," West said. She adds that one can get an RV loan for as low as 6.49% based upon a good credit score.

Wash. educators training in K-12 fin ed program

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ABERDEEN, Wash. (8/26/10)--Educators statewide convened in Aberdeen, Wash., yesterday and today for teach-the-teacher training. The training aids the local school district in implementing personal finance and financial education components across its curriculum and in all grades K-12. Credit unions and banks are involved in the program, said the Washington Credit Union league. The training, a result of the state’s financial education push through its Financial Education Public Private Partnership (FEPPP), will be conducted by teachers for teachers. The Aberdeen teachers attending will take what they learn and teach other educators in the district so they may implement similar curricula in their classrooms. FEPPP is a coalition of public and private organizations, including several trade associations, community organizations, financial institutions, educators, elected and other state government officials, including regulators. The Aberdeen School District has a TwinStar CU branch at one of its high schools, the league told News Now. “We are very happy that [Aberdeen School District] Superintendent Thomas Opstad, as well as the local school principals and educators see financial education as an important component of public education,” said FEPPP Chairman and State Rep. Sharon Tomiko Santos (D-37). She noted the school district “has been a leader in working with community organizations … to deliver this type of education to its students. We applaud its efforts.” The training is the first step in FEPPP’s legislative charge to partner with local school districts on financial education. “With this training, FEPPP will reinforce what teachers are currently teaching and what students are currently learning with a personal finance and financial education curriculum,” said FEPPP Vice-Chairman Pam Whalley of the Washington Council of Economic Education. “It’s an each-one teach-one approach that will provide a two-way conversation about how to best educate the student,” Whalley added.

Global CU members hit 500K savings goal early

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SPOKANE, Wash. (8/26/10)--Global CU in Spokane, Wash., announced Tuesday it has reached its goal to save members a half-million dollars--three months early. The saving total tallies more than $572,799 and represents the savings of 90 members at more than $6,364 per member. How did they save the money? By refinancing at lower interest rates. “We’ve always known that as a credit union we can provide significant saving to consumers,” said Jack Fallis, Global CU president/CEO. “This campaign has helped us show, in real dollars, what a difference membership can make. During a time when many people in our communities continue to struggle with unemployment or reduced income, this difference is more important than ever.” The credit union launched its half-million-dollar savings initiative in June, anticipating it would meet the goal by the end of November. Global CU did not use mass media to promote the initiative. Rather, it relied on employees and volunteers to inform members about the cost of financing and saving by refinancing loans at lower rates, and the importance of credit. Credit card savings were calculated with the Federal Reserve’s Credit Card Repayment Calculator, which assumes the cardholder makes no more charges and pays only the minimum each month. “We know that there are more people who could benefit from refinancing a higher-interest loan,” Fallis said. So, with over three months left in our initial campaign, we’re setting a new goal to save members $1 million by the end November.”

Kansas treasurer testifies about CUs fin lit program

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LAWRENCE, Kan. (8/26/10)--Dennis McKinney, Kansas state treasurer, testified before a House subcommittee hearing held Tuesday in Lawrence, Kan., to discuss the state’s and credit unions’ efforts to help Kansans become more financially literate. McKinney told the House Financial Services Committee subcommittee regarding oversight and investigations about several of his outreach efforts and programs offered (wibw.com Aug. 24). “Our goal is to empower Kansas families to save, invest, and to create more opportunities to improve families and communities across Kansas,” McKinney said. Financial literacy outreach efforts he mentioned included Money$mart, a partnership with Kansas credit unions, which is designed to offer middle school students training in sound personal financial philosophies and practices in a fun environment that enhances leadership and teamwork skills. He also mentioned Save@School, which joins the State Treasurer’s office, local financial institutions and schools in teaching children to become educated consumers who will make responsible financial decisions in the future. To read the article, use the link.

Strong future predicted for Uzbekistan CUs

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MADISON, Wis. (8/26/10)--Uzbekistan’s fledgling credit union movement has become one of the fastest-growing in the world, and Sardor Normukhamedov, deputy director of the Central Bank of the Republic of Uzbekistan, visited the U.S. looking for ways to help increase that positive trajectory.
Click to view larger image Uzbekistan’s credit unions and banks coexist to serve the country’s population, said Sardor Normukhamedov, deputy director of the Central Bank, which regulates Uzbekistan's credit unions.
Normukhamedov developed a department to regulate the former Soviet satellite county’s credit union movement. He arrived at World Council of Credit Unions' (WOCCU) Madison, Wis., headquarters Monday with 11 Central Bank colleagues to explore best practices and other strategies to help Uzbekistan’s credit unions grow rapidly and soundly. “WOCCU is the leading organization when it comes to providing credit union development assistance worldwide,” Normukhamedov said. “When credit unions first emerged in Uzbekistan, WOCCU was there to work with the Central Bank to establish the law making credit unions possible.” WOCCU began credit union development efforts in Uzbekistan in 1998. It assisted with the policy development framework that led to guidelines governing credit union development, operations and oversight. In 2002, Uzbekistan passed its first credit union law with the assistance of WOCCU and guidance from WOCCU’s Model Law for Credit Unions publication. The country’s first three credit unions formed that same year. The Credit Union Association (CUA) of Uzbekistan was established by 11 credit unions in 2005 as the first phase of WOCCU’s development program in the Central Asian nation came to an end. CUA became a WOCCU member in 2009. Today, Uzbekistan is home to 111 credit unions that serve more than 153,000 members. The institutions hold US$140 million in assets.
Click to view larger image The Central Bank of the Republic of Uzbekistan’s delegation and hosts at World Council of Credit Unions' (WOCCU) Wisconsin headquarters this week are, from left: Muzaffar Begimqulov; guide George Palamattam, Council of International Programs; Nordirbek Rahbarov; Matt Garcia, WOCCU; Shukhrat Maksumov; Olimkhuja Tadjikhodjaev; Dave Grace, WOCCU; Vohkid Qobilov; Djasur Tulaganov; Muzaffar Abdurashitov; Alisher Sagdullaev; Gulzebo Usanova; and Sardor Normukhamedov. (Photos provided by World Council of Credit Unions)
“This is a success story for WOCCU and exactly what we like to see,” said Dave Grace, WOCCU vice president of association services. “Despite being only an eight-year-old movement, Uzbekistan’s credit unions have excellent capital, very little delinquency and an extremely strong structure. They're helping bring a solid middle-class tier to the country’s economy.” In 2009, assets held by Uzbekistan's credit unions grew 74%, placing it among the fastest-growing systems in the world. Much of their success appears to be in their ability to address the growing public demand for affordable, easily accessible financial services, Normukhamedov said. “Credit unions have become so popular because they are responding to people's needs,” the Central Bank executive said. “Credit unions have developed their own market, paying higher interest on savings and providing more immediate access to loans. Banks offer those same services, but not quite as easily.” The biggest challenges facing Uzbekistan’s credit unions are similar to those in other developing countries. Lack of credit union access to deposit insurance, the clearing and settlement system, card networks and liquidity sources will make further growth challenging, Grace said. Despite their existing strengths, the country’s credit unions will need greater liquidity for the system to expand, he added. However, access to those services may be easier to come by than in other countries. The relationship between credit unions and banks in Uzbekistan is a positive one, with each industry gaining from having a well-defined market, said Normukhamedov. “Banks and credit unions have a good relationship,” he added. “There is a healthy competition between the two markets.” The Central Bank delegation spent Tuesday visiting Westby (Wis.) Co-op CU to talk about agricultural loans, a growing need in Uzbekistan.

Wisconsin bankers swipe at CUs shameful--league

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PEWAUKEE, Wis. (8/26/10)--Wisconsin bankers' latest swipe at credit unions--claiming that co-ops need to expand their outreach to the underserved--is "another sorry attempt to deflect from the fact that credit unions' business lending benefits the very people banks turn away," said the Wisconsin Credit Union League. The league responded to a press release sent Wednesday by the Wisconsin Bankers Association, which said tax-exempt credit unions should expand outreach to the underserved rather than ask Congress for "additional advantages." (For the bankers' full press release, use the link.) "What an irony that banks suggest credit unions do more to serve the financially underserved," said Brett Thompson, league president/CEO. "Isn't that just what credit unions are trying to do in making more business loans available to small businesses that can't get loans from banks?" Thompson called banks' claim that they do a better job than credit unions in serving the underserved "outrageous," adding that "banks have virtually shut off the credit spigot for small businesses, creating a void that credit unions can't completely fill under current law." Credit unions grant the kind of small loans--averaging around $174,772--that banks won't. Also, credit unions make most of their business loans to households with incomes below $50,000, said the league. Wisconsin banks' business lending dropped 19% from March 2009 to March 2010. Credit unions increased their lending by 11% but many have maxed out what they can lend due to the 12.25% of assets limit on their member business lending. "Federal regulators and the Obama administration have expressed support for legislative language that would raise the cap to 27.5% of total assets," said the league, adding that banking trade groups oppose it. Credit unions return $200 million to members annually through better rates and lower or fewer fees. More consumers--including the financially underserved--have flocked to credit unions during financially challenging times because credit unions will help people in ways that banks won't," the league concluded. For the full press release, use the link. The Credit Union National Association supports Sen. Mark Udall's (D-Colo.) amendment to the Small Businesses Lending Fund Act, HR 5297, which is currently stalled in Congress. The amendment would increase the current cap to 27.5%.

ISmartMoneyI Private student loans see comeback

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NEW YORK (8/26/10)--The number of private student lenders has almost doubled the past 18 months, and many of them are credit unions, according to an article in SmartMoney.com on The Wall Street Journal Digital Network (Aug. 25). "Unlike most banks that were hit hard by the recession, many credit unions have generally maintained healthy balance sheets and are looking for additional sources of revenue," said the article, titled "Private Student Loans Are Making a Comeback." The number of lenders offering these loans has doubled to 23, with some lenders hoping to make up for revenue lost by the July termination of a program that allowed them to underwrite federal student loans, said FinAid.org, which keeps track of financial aid and scholarship issues, in the article. That means getting a private student loan to fill gaps from federal loan programs will get easier, the article said. Private student loan volume is estimated at about $8 billion to $10 billion, said Kevin Moehn, CEO of Moehn & Associates, a financial consulting service that focuses on education lending. After private student loan volume hit $24 billion in 2007-08, the volume declined by half the following year, but credit unions "are also jumping into the private loan space," said the article. It featured two specific credit union programs. CUNA Strategic Services' provider of private student lending, the New Jersey-based Fynanz, originates, services and underwrites private student loans for credit unions, the article said. Fynanz has 55 credit unions in the marketplace, with 33 of them joining its program since June. Another provider, Credit Union Student Choice, which processes credit unions' loans and provides regulatory compliance, helped more than 65 credit unions enter the private student loan market, including nearly 30 credit unions joining since June. Also mentioned were community banks' IHELP program, launched in November, plus several services from individual banks such as SunTrust in Atlanta and Wells Fargo. The article also provided five tips students should consider when signing up for a private student loan. See the full article for more.