Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

CU System Archive

CU System

Calif. CUs Report Fastest Rise In 2Q Loans Since 2007

 Permanent link
ONTARIO, Calif. (8/27/13)--Buoyed by an improving economy, lending at California's credit unions increased by 1.3% in the second quarter--the fastest second-quarter loan balance increase since the beginning of the recession in 2007, the California and Nevada Credit Union Leagues said. 
 
Automobile financing led the surge with a 7.8% first-half jump in new-vehicle loans and a 6.3% rise in used vehicle loans. Unsecured personal loans also grew by 1.8% in the first half.
 
"It's clear the reports of California's heating up weren't a flash in the pan," said Dwight Johnston, economist for the leagues. "This improved economic outlook is building consumer confidence with near-record increases in new loan applications for big-ticket items ranging from homes to cars."
 
The state's unemployment rate dipped to 8.5% at the end of 1012, which while still elevated, represents a decline of nearly a percentage point in the quarter and of 1.3 percentage points since the start of the year. Also, California home prices increased by 5% in the first quarter and by 17% in the year ending in March--the most recent data available for the Federal Housing Finance Agency purchase-only index.
 
Meanwhile, statewide personal bankruptcy filings declined by 26% in the first half compared to year-ago levels, according to the Administrative Office of U.S. District Courts. California credit union borrower-bankruptcy filings declined even faster--by nearly 31%--in the same time period.
 
Despite the increased spending, the report found Californians continued to save. Credit union savings balances grew 3% in the first half and by 3.2% in the year ending June 2013.
 
With historically low market interest rates, consumers continue to focus on building short-term liquid accounts. Highlights include:
  • The state's credit unions report regular savings account balances grew by 6.9% in the first half;
  • Checking account balances increased by 5.4%; and
  • Money market balances rose by 1.4%.
The leagues' report is compiled from credit unions representing 53% of all federally-insured credit unions that collectively serve 96% of the members and manage 98% of the assets reported by such institutions located statewide.

CU System Briefs

 Permanent link
  • ST. LOUIS, Mo. (8/27/13)--Columbia, Mo.-based Missouri CU has notified 39,000 members as well as former members to be alert to potential identity theft after a computer glitch resulted in the posting of member information on the credit union's website. Attorney General Chris Koster also advised members to be alert to potential fraud. The alerts explained that the information was posted for a short time this summer before it was discovered and removed by the $243.5 million asset credit union (St. Louis Business Online and Kansas City Star Aug. 26) ...
  • KNOXVILLE, Tenn. (8/27/13)--A man who claimed he had a bomb, presented a note to a teller at ORNL FCU and demanded money before fleeing with an undetermined amount. He left a box, which police determined was a hoax device (WATE.com Aug. 24).  The incident occurred Saturday at a branch of the Oak Ridge, Tenn.-based, $1.4 billion asset credit union ...
  • HATTIESBURG, Miss. (8/27/13)--Helen A. Fitzgerald, 56, a former teller at University of Southern Mississippi FCU, was sentenced to 10 years in prison--with eight years suspended--for the embezzlement of $60,300 from the Hattiesburg, Miss.-based credit union. Fitzgerald pleaded guilty on July 19 and was ordered to serve two years while the rest will be suspended on the successful completion of five years' probation. The embezzlements occurred between Oct. 31, 2011, and July 20, 2012. She also was ordered to pay $2,500 in fines, $8,800 in restitution to the credit union and $350 in special assessments for a victim compensation program and public defender fund (HattiesburgAmerican.com Aug. 24) ...

Michigan Lawmaker Opposes Taxation, Says CUs Create Jobs

 Permanent link
LANSING, Mich. (8/27/13)--Another Michigan congressman--U.S. Rep. Dan Benishek (R-Mich.)--has issued a statement supporting credit unions' tax status, but he also went a step further, saying credit unions play an important role as job creators, said the Michigan Credit Union League.
 
"As a credit union member, I am opposed to efforts that would raise taxes on any small business--including credit unions," said Benishek (Michigan Monitor Aug. 26). "I will continue to work with my colleagues in the House of Representatives to support policies that reduce regulatory burdens and promote employment for all job creators--from credit unions to the small businesses in Northern Michigan that create and provide jobs."
 
The statement demonstrates the way credit unions contribute to the economy in the state and the nation, said MCUL CEO David Adams. The league asked Benishek for a statement regarding the credit union tax status "and he went one step further," Adams said.
 
"In addition to expressing clear support for the continued tax status, he reiterated his core values that align with credit unions' top legislative priorities: namely maintaining and improving the tax and regulatory climate so credit unions can provide more capital and services to the members and businesses that create and provide jobs," he added.
 
Other Michigan lawmakers who have stated their support of credit union's tax status include Democrats Sens. Debbie Sabenow and Carl Levin as well as U.S. Reps. Dan Kildee, Gary Peters, Sander Levin and John Dingell, all Democrats, and Republicans David Camp, Mike Rogers, Tim Walberg and Kerry Bentivolio.
 
They join other lawmakers from throughout the nation responding to the credit unions' national  Don't Tax My Credit Union Campaign, which is in full swing back in lawmakers' home districts during the legislative recess. For more information about the Credit Union National Association's and leagues' campaign, go to www.Don'tTaxMyCU.org or use the links.

CUNA's Women's Financial Survey Topic In MainStreet.com

 Permanent link
NEW YORK (8/27/13)--The Credit Union National Association's Women's Financial Survey led off a story Sunday on MainStreet.com about "The One Thing You Shouldn't Do When Investing for Retirement."
 
"While a new study disclosed that women's most important financial concern is saving for retirement, investors pulled almost $1.2 billion from U.S. equity exchange-traded funds since Friday Aug. 9, according to Bloomberg data," the article starts.
 
It reiterates some of the key findings of CUNA's survey and quotes Paul Gentile, CUNA executive vice president of strategic communications and engagement, analyzing these numbers:
  • 45% of women use 401(k)s, nearly 39% use pension plans and 40% own multiple retirement plans; and
  • 51.2% are not confident in their financial ability despite the fact that 38% of married female respondents manage the household finances and 46% co-manage them.
Gentile noted that the message is getting out there that time is one of the most important aspects of retirement savings and the sooner women start, the better.
 
The article also provided advice by multi-millionaire investor Vince Stanzione, who said women may miss out on potential returns if they aren't investing in the stock market. For the full article, use the link.

Alloya Corporate CEO Bill Walby Resigns, Effective Sept. 15

 Permanent link
WARRENVILLE, Ill. (8/27/13)--Alloya Corporate FCU announced Monday that Bill Walby will resign as Alloya's CEO for personal reasons. His resignation will be effective Sept. 15.
 
"This was a difficult decision for me. The merger of Alloya and CenCorp operations is proceeding well, and we are beginning to see some of the anticipated benefits," said Walby. "Unfortunately, I also have some personal responsibilities that are difficult to address along with my responsibilities as Alloya CEO," he added.

Walby was CEO at Southfield, Mich.-based CenCorp before the merger process began (News Now March 14).
 
"Alloya's Board has regretfully accepted Bill's resignation," said Amy Sink, chair of Alloya's Board. "
 
She noted that the corporate's second quarter financials, released last week, "demonstrate that Alloya is on a sound footing. System and organizational integrations are on track, starting with the successful conversion of Michigan members to Premier View (Alloya's secure internet portal) on July 1. We understand Bill's decision, and wish him continued success."
 
The corporate's board has begun a search for a new CEO. "We are seeking a CEO to build upon the strong financial base and business model in place today. Alloya is capitalized and supported by approximately 20% of credit unions nationally," Sink said.
 
Todd Adams, Alloya senior vice president and president of Balance Sheet Solutions LLC, was named interim CEO, effective upon Walby's departure.

ICUL's Title Insurance Funds Bill Signed Into Law

 Permanent link
NAPERVILLE, Ill. (8/27/13)--An Illinois Credit Union League-backed initiative, a bill amending the Illinois Title Insurance Act to authorize the use of a cashier's check, certified check or teller's check as settlement funds at real estate closings, was signed into law Aug. 16 by Illinois Gov. Pat Quinn.

"By creating a permissive option limited to cashier's checks, teller's checks and certified checks, HB 1335 tailors the focus of the 'good funds' provisions in the Title Insurance Act to reduce unnecessary costs to consumers, while maintaining key fraud prevention components within the existing law for the benefit of lenders and title insurance agencies," said Stephen Olson, ICUL executive vice president and general counsel.

The bill provides that when a financial institution and a title company are known to each other and agree, a cashier's check, certified check or teller's check will constitute legal settlement funds at a real estate closing.

The practice that had evolved since the "good funds" provisions of the Illinois Title Insurance Act were put in place in 2010 was to require consumers to use wired funds for settlement funds in amounts over $50,000. The requirement ensures that collected funds are available before disbursement by the title insurance agency handling the closing and reduces the potential for fraud.

However, wiring funds is much more costly for consumers than obtaining certified funds from their financial institution, the league said. HB 1335 addresses situations that can avoid the added expense upon mutual agreement by the lender and title company to use a teller's check, cashier's check or certified check for settlement funds greater than $50,000.

Also, the check must be delivered to the title insurance agency in time for it to be deposited into its fiduciary trust account before disbursement from that account--although it need not actually be deposited. That change to the Title Insurance Act is entirely permissive and, if used by the title company and lender, could reduce the consumer's costs in a real estate transaction, the league said.

Fin. Planner: 'If You Don't Belong To a CU, You Should'

 Permanent link
BOULDER, Colo. (8/27/13)--Consumers should consider joining credit unions as an alternative to banks because credit unions were created in the public interest and are operated by members for their benefit, according to an op-ed by a Colorado financial planner.

"In spite of the local ownership, you still get the peace of mind that your funds won't disappear just as you do with a bank," wrote David Gardner, a certified financial planner with a practice in Boulder County, Colo., in the dailycamera.com (Aug. 25). "Instead the Federal Deposit Insurance Corp., which protects your bank deposits, you have the insurance of the National Credit Union Administration, which provides similar protection."

Gardner provides these other reasons to join a credit union:
  • Less likely to fee you to death. Many banks have reinstated and increased their fees amid a tepid economic recovery nationwide. Fees associated with checking accounts, in-person tellers, online banking, overdrafts and account statements all typically are higher at banks than at credit unions, he said, citing information from Consumer Reports.
  • Programs that target your community. Credit unions often offer programs that are tailored to the needs of local members. As an example, Elevations CU in Boulder, offers a special loan program with low fixed rates for home energy-efficiency improvements such as solar panels or more cost-effective appliances. Also, for students and others who need to establish or rebuild their credit, many credit unions offer free checking and credit card options.
  • Interest rates tend to be better. Generally speaking, consumers will find lower interest rates on loans and better terms at credit unions. Some local examples are Boulder Valley CU's 1.99% car loan, PenFed CU's innovative and low rate mortgages, or credit cards available from Elevations CU, he said.
To read the article, use the link.

CUNA Mutual: Watch Out For Fake Car Dealers

 Permanent link
MADISON, Wis. (8/27/13)--Credit unions nationwide are warned of loan-fraud schemes involving fake independent car dealers located in Indiana and Florida, according to a CUNA Mutual Group Risk Alert for its bond policyholders.
 
Fraudsters recruit individuals to open accounts at credit unions under their real identities and apply for loans to purchase high-end vehicles from the fake car dealers. The individuals are paid for their efforts (The New Jersey Credit Union League's The Daily Exchange Aug. 22).
 
CUNA Mutual said credit unions should consider these risk mitigation steps when processing loan applications submitted by new members for the purchase of vehicles, especially high-end vehicles, from unknown independent car dealers:
  • Scrutinize loan applications, whether submitted online or in person, by new members for the purchase of high-end vehicles from unknown independent car dealers.
  • Compare employment information listed in the loan application and employment/income verification documents (such as paystubs) to the current employer listed in the credit reports. If there is a discrepancy, contact the employer using a reliable telephone number to verify employment.
  • In reviewing the credit reports, be alert for a large number of recent inquiries by other financial institutions.
  • Verify vehicle identification numbers (VINs) listed on the purchase orders by using websites such as carfax.com. Use the LexisNexis Motor Vehicle Registration service to verify vehicle registration records. The department of motor vehicles in some states may offer online VIN verification. Be alert for vehicles that changed ownership.
To view the alert, use the link.

Michigan Leads In Fin. Ed Classroom Presentations

 Permanent link
LANSING, Mich. (8/27/13)--Michigan credit unions led the nation in financial education presentations made to students during the 2012-2013 school year with 2,181 classroom presentations, according to the National Youth Involvement Board.
 
Michigan-based credit unions were second in number of students reached with 44,945, the Michigan Credit Union League said (Michigan Monitor Aug. 26).
 
Individuals from Michigan recognized by NYIB included:
  • Ashley Buchholz from Wildfire CU, Saginaw, elected to the NYIB Executive Committee and will serve as the north central regional coordinator. Buchholz is a marketing specialist at Wildfire, where she specializes in services for young adults through engaging members with social media outlets, managing four student-run credit union branches and providing in-school presentations on financial education.
  • Natalie McLaughlin from Community Financial CU, Plymouth, awarded the NYIB Northern Regional Scholarship to the conference. McLaughlin is the senior education partnership coordinator at CFCU where she is responsible for coordinating 37 student-run credit union branches. She is also a longstanding member of the league's Financial Education Council.
  • Karen Alexander, education partnership coordinator at Community Financial CU, was recognized for giving the ninth most financial education presentations in the nation, with 206.
Also, 59 Michigan credit unions operated 375 student branches in state schools.

Social Media Use Puts CUNA On CU Thought-leader List

 Permanent link
CHATTANOOGA, Tenn.  (8/27/13)--Two Twitter feeds produced by the Credit Union National Association are among the "10 Twitter Feeds All Credit Unions Should Follow," according to SIGNiX, a global digital signature company.
 
CUNA's @CUNAadvocacy and @ASmarterChoice were among the 10 singled out by the Chattanooga, Tenn.-based company.
 
Of @CUNAadvocacy, SIGNiX said: "The Twitter feed for CUNA Advocacy takes on tough issues facing credit unions across the country. Most recently, they've started the movement behind #DontTaxMyCU, a campaign to influence Congress to maintain credit unions' tax status."
 
@ASmarterChoice refers to the website where consumers can go to find a credit union to join. The company noted that "this Twitter feed is a great resource on the benefits of banking at credit unions. The group posts articles comparing credit unions to large banks, which can be good resources for potential members who are on the fence about joining a credit union."
 
The company noted that "following the right people will help ensure that your feed is always full of helpful and interesting content. Plus re-tweeting influential posts can boost your social reputation." Twitter can be an invaluable tool to help attract new members and promote products and services, said SIGNiX.
 
See also @NewsNowLiveWire, another way CUNA innovates using social media.