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NEW: Al George, 'Epitome Of Volunteerism,' Has Passed Away

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SAN DIEGO, Calif. (8/29/13, UPDATED 8:44 a.m. ET)--Al George, a former California Credit Union League and Credit Union National Association chairman, has passed away.

George was called "the epitome of volunteerism and leadership, but most importantly a personal friend," by Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues, in an announcement of his passing.
 
 CUNA President/CEO Bill Cheney noted that George was "quite literally a lifetime credit union volunteer."
 
"He was a true friend, a great leader and mentor and will be missed by us all.  He will of course live on in the spirit of the credit union movement, which he so forcefully embodied for more than 65 years," Cheney said.

George dedicated his life and career to the greater good of the credit union movement, serving on the North Island CU board here board for more than 60 years.  Dykstra recalled George once said, "It's difficult for me to focus on one unique accomplishment as a volunteer. I feel every contribution is important."

George's volunteer credit union activities began in 1948 as a director of San Diego Gas & Electric CU (now Financial 21 CU) while he was a 43-year utility engineer for the company. In 1951 he became president of the board of that credit union and a director of the California Credit Union League.

"Al was league chairman in 1962 and received the Leo H. Shapiro Award in 1981, Volunteer of the Year Award, and the President's Award for his 50 years of volunteer service," Dykstra recalls.

He also served as past chair of the CUNA and was a former director of the World Council of Credit Unions. In 1953 he joined Central CU during its organization effort and continued 43 years of volunteer service there until its 1996 merger into North Island CU.  He served on the Supervisory Committee after the merger, and in 1998 began serving on the board of directors, including a three-year term as board chair. He retired from his volunteer service in July after serving this industry for 65 years.

Steve O'Connell, president/CEO of North Island CU Union, said George was "a remarkable man who embodied the true spirit of 'people helping people.'"

O'Connell added, "Al started in uniform with the U.S. Marine Corps and was called into action for four years during WWII (three major campaigns and 26 months overseas). He never forgot the importance of serving those who serve our country. Al's legacy is one of love for his family, and commitment to volunteerism, credit unions, and the country."

More Members Of Congress State Positives Of CUs

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LANSING, Mich. and CLIFFSIDE PARK, N.J.  (8/29/13)--
Click to view larger image U.S. Rep. Bill Pascrell (D-N.J.) (at podium), a member of the House Ways and Means Committee, noted his support of credit unions and discussed his stance on credit unions' tax status at a town meeting in Cliffside Park, N.J., Tuesday night. In foreground is XCEL FCU's Tom Quigley, who brought up the issue at the meeting.
A congressman from New Jersey has pledged to fight to keep legitimate tax exemptions, saying credit unions do a great job and provide necessary competition to banks.  And three more members of Congress from Michigan have made statements of support for the credit union industry.
 
U.S. Rep. Bill Pascrell (D-N.J.), who serves on the House Ways and Means Committee, which is overseeing the drafting of tax code reform, held a town meeting in Cliffside Park Tuesday night. Among the 200 people attending were Tom Quigley, XCEL FCU director of marketing, and New Jersey Credit Union League President Greg Michlig and Director of Government Affairs Chris Abeel (The Daily Exchange Aug. 28).
 
Pascrell was quick to note that the credit union tax exemption is an intentional exception like the charitable gift and mortgage interest deductions. "It's not a loophole," he said, adding all deductions are under attack but Congress should be going after the loopholes like the ones that send jobs off-shore. He pledged to fight to keep legitimate deductions and exemptions, and noted credit unions do a great job and provide necessary competition to banks.
 
Click to view larger image Tom Quigley, director of marketing at XCEL FCU, Secaucus, N.J., discusses tax reform and the need to preserve credit unions' tax status at a Town Hall Meeting held by U.S. Rep. Bill Pascrell in Cliffside Park, N.J. (Photos provided by the New Jersey Credit Union League)
"This was an excellent opportunity to communicate the 'Don't Tax My Credit Union' message to an important member of our congressional delegation who will likely play a key role as tax reform moves forward," said Abeel.
 
In Michigan, 15 out of 16 congressional delegates from that state have voiced support of credit unions, with 12 of them specifically stating support for credit unions' tax status, said the Michigan Credit Union League.

The statements from Reps. Bill Huizenga, Candice Miller and Fred Upton, all Republicans, did not specifically state support for credit unions' tax status, but the statements are strong indications of their support for credit unions in general and the friendship they have shown the movement through their political careers, said the league (Michigan Monitor Aug. 28).

"These final three statements now provide the MCUL with a near clean-sweep of support from our 14 representatives and two U.S. senators," said league CEO David Adams.

Upton (R-St. Joseph) said credit unions are a critical element of the economy and that he will continue to work to give credit unions more business-lending authority.
 
"Credit unions are at the forefront of our economic recovery, providing essential financial services to communities here in Southwest Michigan and across the country," Upton said. "As we remain focused on getting our nation back to work, these member-owned and controlled institutions are helping locally owned small businesses grow, invest, and create jobs in our area. I will continue to stand by our community credit unions and work to lift the credit union member business lending cap."

Miller (R-Harrison Township) also mentioned the important role that credit unions play for small businesses and the need to remove arbitrary regulatory and statutory roadblocks to serving members in all capacities, including business loans.

"Year after year, credit unions in Michigan and across the nation have led the way in providing high-quality, low-cost financial services to millions of credit union members, especially those in more remote locations which do not regularly receive adequate services from other financial entities," Miller said.

"It is clear how critical these nonprofit cooperatives are to so many--from families, to students seeking loans for education, to small businesses who are the drivers of our national economy. We will continue to work in Congress to ensure credit unions are able to thrive without undue regulatory burdens, and in an environment where they can continue to grow their member-lending services," Miller added.

Huizenga (R-Zeeland) pointed out that he is a longtime member of a credit union and said credit unions are vital to the country's economy.

"As a longtime member of a credit union, I understand the vital role that credit unions play in the financial services industry in Michigan and across the country," Huizenga said. "As a federal legislator, I believe that Congress's role is to help create a regulatory atmosphere in the U.S. to foster economic growth. We need to ensure that credit unions continue to provide our constituents with the opportunity and ability to achieve the American Dream.

Credit unions continue to take an opportunity with representatives' legislative recess to meet with their delegates in the home districts. Many are emphasizing the "Don't Tax My Credit Union" national campaign and urging members to contact their lawmakers. For more information, use the links.

CU System Briefs (08/29/2013)

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  • NORMAN, Okla. (8/29/13)--OU FCU in Norman, Okla., announced the selection of Shannon Hudzinski as its new president/CEO. She previously served as senior vice president and chief operating officer at First Flight FCU in Cary, N.C. "Shannon brings extensive operations and financial management experience to the credit union and is just the individual to lead OUFCU in its path of growth and development," said OUFCU Chairman David Shirley. At First Flight FCU, Hudzinski was instrumental in implementing strategic growth plans and creating an e-service platform for the credit union. She worked to increase efficiency and productivity across all operations and improve service delivery to members. She also developed a new sales culture and designed a management trainee program for credit union leaders ...
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Business Loan Growth Strong In Louisiana

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HARAHAN, La. (8/29/13)--The total dollar amount of member business loans (MBL) outstanding for Louisiana credit unions increased 16.7% as of March 2013 compared with March 2012, the Louisiana Credit Union League said.
 
Member business loans totaled $172.3 million in March compared with more than $147.6 million the same time in 2012. The number of loans rose to 803 in 2013, compared with 747 in 2012, a 7.5% increase, the league said.
 
Over half of the total loans outstanding are real-estate secured business loans. Owner-occupied non-farm non-residential property accounts for 30.51% of dollars outstanding and non-owner occupied non-farm non-residential property accounts for 27.81% of dollars outstanding.   
 
This growth in the first quarter continues of a strong growth trend business lending at Louisiana credit unions for the past five years. Since 2008, the number of business loans outstanding for Louisiana credit unions has doubled to 888 in December 2012 from 418 in December 2008. The total amount of business loans outstanding has more than tripled to more than $157 million from more than $51.2 million.
 
The Credit Union National Association and credit unions are pressing Congress to increase credit unions' 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.

Canadian Government To Fix Error That Upped CUs' Taxes

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OTTAWA (8/29/13)--Canada's Finance Department says it will fix a technical error in the government's budget bill that would have resulted in Canadian credit unions seeing a 13 percentage point increase in tax rates--higher than those paid by banks and other corporations.
 
Sweeping amendments passed by Canadian legislators in June in reforming its tax system had included a measure that would require credit unions and similar small lending institutions to pay the same tax rates as other corporations--which was a surprise to Canada's credit unions (Victoria Times Colonist Aug. 28 and The Canadian Press Aug. 27).
 
Originally the changes--introduced in an omnibus budget bill that incorporated multiple changes--increased the tax rate paid by most credit unions and caisses populaires to 15% on income in excess of the small business limit, from a federal rate of 11%.  But auditing firm Deloitte said the technical error in the legislation, if not corrected, would subject credit unions to double that amount.
 
Finance Minister Jim Flaherty's office said he is committed to fixing the technical glitch as soon as possible and will ensure no credit union is disadvantaged by the issue.
 
The March budget "blindsided" credit unions, said the Credit Union Central of Canada, which estimated taxing credit unions would cost $28 million annually. Credit Union Central said it is working to convince the government that the wording in the budget document that had indicated a tax increase would restore neutrality and fairness "probably doesn't achieve that goal."

Lack Of Big Budget For Outreach Didn't Stop This CU

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BROKEN ARROW, Okla. (8/29/13)--Credit unions are more determined than most financial institutions to reach out to their community as part of their mission. Some don't let a small budget get in the way. Case in point: Western Sun FCU in Broken Arrow, Okla.
 
The $123.2 million asset credit union took a creative approach to its community outreach program, said the Cornerstone Credit Union League (Leaguer Aug. 28). It came up with "Choose My Wish," with a goal to help smaller organizations, schools and charities in need.
 
The credit union wanted the communities it serves to know that it was interested in helping them to continue to serve people in need, Dana Harris of the credit union's marketing department, told the league.
 
"We established a website called choosemywish.com and representatives from charitable organizations and schools could ask for something they needed for a cause they were passionate about," Harris said.  "We just wanted to make a difference."
 
The credit union received 43 entries, including some from teachers who posted their wishes for items they desperately needed for their classrooms and an animal shelter seeking ID machines and used computers, Harris said.
 
Employees from each branch location served on the voting committee. They voted to make three wishes come true for charities that had not been on the credit union's radar before.
 
Western Sun FCU promoted Choose My Wish on its website and tagged all its radio spots for a planned loan campaign with a 10-second mini-commercial that drove listeners to choosemywish.com.
 
For its efforts, Western Sun FCU received first place in the state-level Dora Maxwell Social Responsibility Community Service Award in the $100 million to $200 million category, said Cornerstone CU League.
 
Outreach programs are one of the ways credit unions can demonstrate the value of credit union membership and their value to the community. Building awareness of credit unions is one of the three prongs of Unite for Good, the national campaign of the Credit Union National Association and the state leagues working toward a strategic vision in which Americans choose credit unions as their best financial partner.

Sept. 13 Is Deadline For Lending Excellence Award Entries

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MADISON, Wis. (8/29/13)--The CUNA Lending Council and CUNA Mutual Group are accepting entries through Sept. 13 for the 14th annual Excellence in Lending Awards, which recognizes outstanding lending results and practices by credit unions.

The awards identify and share examples of lending excellence within the credit union movement by recognizing individual credit unions for their ability to serve members while sustaining sound financial performance. Credit unions demonstrating an ability to meet their members' needs through innovation are excellent award candidates, said the council and CUNA Mutual.

Credit unions may be nominated for the 2013 award in the following categories:
  • Consumer Lending Excellence: Assets less than $250 million, and assets more than $250 million;
  • Mortgage Lending Excellence: Assets less than $250 million, and assets more than $250 million;
  • Low/Modest Means Excellence: Any asset level; and
  • Business Lending Excellence: Any asset level.
The awards will be presented at the CUNA Lending Council's 19th Annual Conference, Nov. 3-6, in Phoenix. Airfare, hotel and conference registration for one representative of each of the winning credit unions is included with the award.

Filene Granted $700K To Launch FI Services Incubator For Needy

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MADISON, Wis. (8/29/13)--Filene Research Institute has received a $700,000 grant with a 30-month duration from the Ford Foundation to develop and implement an accessible financial services incubator. It will test, package and scale innovative, viable financial products that benefit low-and-moderate-income U.S. consumers.

"Every American has the right to hopes, dreams, wants and a better way of life," Mark Meyer, Filene CEO, told News Now. "The alternative financial services sector's providers have ample opportunity to exploit underbanked individuals today, blocking that right. With the Ford Foundation, we want to bring to the market consumer-friendly financial products that help them achieve their fullest potential and live the lives they want."

Filene will select 25 U.S. credit unions and five products for an 18-month pilot, beginning in November. Credit unions interested in testing potential incubator products and organizations with potential product innovations for the incubator can learn more and apply by using the link.

The grant comes as one in five households, or 24 million American homes, are underbanked and lack access to affordable financial services. The socioeconomic disparity is compounded by the racial and ethnic disparities among persons denied credit; 53% of African-Americans, 43% of Hispanics and 44% of Native Americans are underbanked, said Filene.

"Mainstream financial institutions consistently fail to improve access for these vulnerable persons to affordable credit and other essential financial products," Meyer said.

"The Ford Foundation's support enables us to build an accessible financial services incubator that provides alternatives to payday lenders and other predatory providers in America's low-and-moderate-income communities," Meyer added. "The incubator will contribute significantly to creating a vibrant financial marketplace that offers products beneficial for underbanked consumers and mainstream financial institutions."

The project will have three phases:
  • The lab--testing promising product ideas;
  • The factory--manufacturing innovations and packaging products for mass adoption; and
  • The marketplace--distributing products through in-person and open-source online marketing.
The incubator will use credit unions as the proving ground for innovative products to test their viability with mainstream financial institutions. An advisory panel of financial institution staff, researchers and industry analysts will ensure the viability of the product ideas.

Filene will host the incubator at its headquarters in Madison, Wis. While this is the organization's first Ford Foundation grant, Filene received a sub-grant from the D2D Fund supported by the Ford Foundation in 2008 to plan and implement prize-linked savings products to eight credit unions. Within 11 months, 11,500 consumers saved an estimated $8.5 million. 

Illinois League Takes Key Role In Passing Prepaid Disclosure Bill

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NAPERVILLE, Ill. (8/29/13)--Illinois Gov. Pat Quinn Monday signed SB 1829, legislation that establishes a basic set of disclosures that must be furnished on general-use reloadable prepaid products. The Illinois Credit Union League took a key role in drafting and passing the law.

The disclosures will be provided to consumers on a pre-purchase basis, and on and with the cards.

"If there is going to be consumer legislation addressing general-use reloadable prepaid products, it should be done in a manner that provides meaningful basic disclosures to cardholders, but generates no additional burden to issuers of the products," said Stephen Olson, ICUL executive vice president and general counsel. "SB 1829 nicely addresses that balance by identifying disclosures commonly provided by many issuers today in the marketplace."

The cards operate like traditional debit cards but are not tied to a checking account. Instead, they are purchased with an amount loaded on the card and allow the purchaser the option of subsequently adding funds to the card.

After negotiations with the Consumer Protection Division of the Illinois Attorney General's office, ICUL led a working group coalition to draft and seek passage of the legislation. The coalition included the Community Bankers Association of Illinois, the Illinois League of Financial Institutions, and the Illinois Retail Merchants Association, and Visa, MasterCard and American Express.

The bill provides guidance to reloadable pre-paid debit card issuers in Illinois until the Consumer Finance Protection Bureau declares regulatory guidance under the federal Electronic Fund Transfer Act.

The legislation is important to ICUL and ICUL Service Corp. (LSC), its credit union service organization, which offers prepaid products as part of its suite of services and programs. Cathy Pettis, LSC senior vice president, served as a prime contact in the negotiations.

Since general-use reloadable prepaid cards were exempted from the federal Credit Card Accountability Responsibility and Disclosure Act, it was important that any set of required disclosures reflect and be consistent with marketplace practice, ICUL said. Pettis helped ensure that this was achieved, said the league.