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How CUs in Katrina states recover--Third in series

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MADISON, Wis. (9/1/10)--Credit unions affected by Hurricane Katrina in 2005 have seen unprecedented challenges the past five years since the Gulf Coast disaster. How well did they recover?
Click for slide showWearing a face mask and poncho as protection from thick mold inside The New Orleans Firemen's FCU's east branch, Kathy Dionne, former branch manager, reaches for a mold-covered musical fire engine. (Photo provided by CUNA).
Today News Now looks at one credit union that not only survived but is thriving, despite members moving from New Orleans. Tomorrow, News Now will provide statewide analysis from the Gulf Coast leagues, which helped coordinate efforts to help their credit unions survive the catastrophe. The New Orleans Firemen's FCU (NOFFCU) has seen a lot of changes since Aug. 29, 2005, according to Judy Delucca, president/CEO. Her credit union lost a branch when the New Orleans levee broke. Nineteen of its 57 employees lost their homes. Several employees lived in converted quarters at the credit union through March 2006, when the credit union provided trailers and recreational vehicles to move to their properties while they rebuilt. They ended up living in trailers through the end of 2007. Today, 15 of the 19 still work at the credit union. Those who left did so when spouses were transferred out of state. Employees who lived in St. Bernard's Parish cannot rebuild there. Instead they moved to the North Shore, to Slidell and Mandeville. The credit union has built new branches to accommodate the growing membership there. The major change is a growth spurt. Before Katrina, the credit union counted five branches. Today, it has nine. It grew from $75 million in assets before the hurricane to $135 million. Today it has more than 18,000 members--growing faster the past three years than before--and 300 select employee groups (SEGs). "Today we're more innovative about sharing facilities and working cooperatively. We're members of Shared Branching with the credit union cooperative, and we use credit union Shared Branching networks across states," Delucca said. "We had large numbers of members who moved away but kept their accounts because shared branching allowed the credit union to keep providing them great service," Delucca told News Now. She noted that the credit union's greatest number of members is in New Orleans. "Our next-greatest is in Atlanta, Houston and Dallas--where people went when they evacuated. "We've learned that though members move, the credit union can continue to serve them and serve them well, and keep them within the credit union movement." She said that the credit union had a good name after Katrina because it was there, servicing members. There were also operational changes. Before Katrina, everything was run, driven and controlled in-house. The credit union owned its ATMs. Now it outsources them to a third-party vendor and has a 24/7 call center in Dallas, with one in New Jersey as a backup. NOFFCU also added new layers to facility management, which, in an emergency, secures facilities, obtains generators, puts up plywood on windows, and turns off electricity and gas. Before Katrina, managers had to know where the water and gas lines were. "Now in the event of a hurricane, we keep operations running and have employees in a safe area. And it's seamless. The phones switch, the members get their updates with a computer. The management team doesn't have to travel. They can be in touch by cell phones, text messages, provide information for the call center...It worked well," Delucca said. In October 2005, News Now accompanied DeLucca and the credit union's East Branch manager, Kathy Dionne, to the flooded branch. The branch was covered in dried, cracked mud and mold from the flood. Its ATM was missing. Today, the branch no longer exists. "We sold the property. New Orleans East has not really recovered yet. There are still a lot of empty apartment buildings, and the area's not stable," DeLucca said. The credit union likely will deploy ATMs at strategic locations, but not provide a physical branch for the next five years. "After Katrina, we were in the recovery mode for the first two years. Now, we're planning forward, not just recovering," she said. The credit union is expanding, having merged with smaller credit unions and added a branch in Picayune, Miss. It plans to build another in New Orleans within five years, depending on the costs of federal regulators' assessments. During the recovery, the credit union considered a community charter to diversify, but "we didn't want to do that. We serve parishers but there is no one community that services the entire area where our branches are. Also, serving multiple SEGs and low-income areas mean we can penetrate more deeply. We look for the underserved; it's a part of what credit unions are supposed to do," Delucca said. "Nobody expected the region and credit unions here to survive, much less thrive," she told News Now. She attributes survival to "working cooperatively with other credit unions." She also noted that other credit unions from across the nation "helped us and took us in and sent Christmas presents for employees. We wanted to keep it a cooperative." Delucca is already preparing for the next disaster--the BP oil spill. In typical credit union fashion, she's thinking of others. The local economy is based on the fishing industry and tourism, which are affected by the spill. More people are asking for assistance in repaying of their loans. The credit union is working with them to extend agreements and provide workouts because the "the money is not coming in. The department of collections is no longer called that, thanks to Katrina. Today, it's the Member Solutions Center. The name helps employees to remember why they're there."

NCUA gets extension in Kappa Alpha Psi case

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WASHINGTON (9/1/10)--The National Credit Union Administration (NCUA) has been granted a three-day extension to file its renewed response in Kappa Alpha Psi FCU's lawsuit contesting its liquidation before a U.S. District Court for the District of Columbia. Originally NCUA was to file its renewed response to a "show cause" order by Aug. 30. However, NCUA's counsel Fred E. Haynes requested a three-day delay to Sept. 2, citing that other litigation took longer than expected, according to court documents. The credit union consented and the extension was granted Tuesday by Judge Emmet G. Sullivan. The show-cause reply will be due tomorrow. The plaintiff credit union's plaintiff's reply deadline will move to Sept. 20 from Sept. 15. That means NCUA's new deadline to file its sur-reply to the credit union's reply will move to Sept. 24 from Sept. 22, according to the documents. The hearing for the order to show cause is scheduled for Oct. 15. There NCUA is expected to show cause why it liquidated the Texas-based credit union. NCUA ordered the liquidation of the $750,000 asset credit union on Aug. 3 and formally carried out the liquidation orders Aug. 13 while the credit union's request for an injunction was being brought to court. The credit union dropped the injunction after NCUA redistributed its assets to its former members (News Now Aug. 19 and Aug. 18). Kappa Alpha Psi claims the liquidation was unjust and that its net worth ratio was affected by "full accrual accounting" and NCUA's assessments related to its Temporary Corporate Credit Union Stabilization Fund. NCUA has said the liquidation was the result of the credit union's inability to generate consistent operational profits, build its net worth position, maintain its records in a sound manner, grant quality loans and adequately collect on delinquent loans (News Now Aug. 19).

CU System briefs (08/31/2010)

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* RANCHO CUCAMONGA, Calif. (9/1/10)--CO-OP Shared Branching, a subsidiary of CO-OP Financial Services, has appointed Doug Burke to its Board of Directors. Burke is president/CEO of Lakewood, Colo.-based CU Service Network (CUSN). He has extensive credit union experience that will help ensure CO-OP Shared Branching continues to provide convenient, innovative account access solutions in the credit union movement, said CO-OP. Bill Raker, chairman of the board, noted that Burke is a "consistent, staunch and long-term champion of shared branching" and is dedicated to the "better financial health of credit unions and their members" ... * CHARLESTON, W. Va. (9/1/10)--C. Dana Rawlings has been named CEO of Pioneer West Virginia FCU, effective last month. He formerly was chief operating officer of the $430 million asset Smart Financial CU in Houston, Texas. Pioneer, the seventh largest credit union in West Virginia, has four offices, 13,000 members, $129.5 million in assets and 44 employees. An article about the new CEO in the Charleston Daily Mail (Aug. 30), also included a statement from West Virginia Credit Union League President Ken Watts, noting that "there will be great things in store" for the credit union under its new leadership ... * TALLAHASSEE, Fla. (9/1/10)--Kathy Rolfs has joined the staff of the League of Southeastern Credit Unions as communications coordinator. She previously served as communications manager at the Florida Attractions Association, a Tallahassee-based trade association, and as marketing director for Premier Bank, a locally owned community bank where she was responsible for all external and internal communications, the marketing and charitable giving budgets and the development of strategies and plans to facilitate business growth ...

Maines Fall Share It campaign begins

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WESTBROOK, Maine (9/1/10)--The Maine Credit Union League kicked off its Share It! Fall Campaign, which invites members to share their favorite Shared Branching moment or why they love Shared Branching. Members can submit comments through Facebook or www.mainecreditunions.org for a chance to win $500 or a global positioning system. The Share It! Prize Patrol also can be conducted by credit union branch staff. Each participating branch will receive $60 with campaign envelopes to split between three members. Credit unions that participate can win $500 for their favorite charity by entering a script or photos of how it presented Shared Branching and the Prize Patrol money to members. The most creative entry will win, the league said. There were a record 70,000 Shared Branching transactions in Maine during July, the league said. Shared Branching allows members to use other credit unions’ ATMs or branches to conduct financial transactions.

Gulf Coast CUs get advice on oil-spill claims

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Patrick La Pine, president/CEO of the League of Southeastern Credit Unions, explains the oil spill impact to the Gulf Coast region and proposed credit union efforts to help at a recent meeting in Pensacola, Fla., with credit union executives, the National Credit Union Administration and other area financial regulators. (Photo provided by the League of Southeastern Credit Unions)
PENSACOLA, Fla. (9/1/10)--Nearly 30 credit union executives and staff convened in Pensacola, Fla., to discuss ways they can be a resource for those impacted along the Gulf Coast in the aftermath of the huge oil spill this spring. The League of Southeastern Credit Unions (LSCU) Credit Union Response to the Gulf Oil Spill forum offered dialogue with regulators from the National Credit Union Administration (NCUA), the Florida Office of Financial Regulation (OFR), the Alabama Credit Union Administration and the Louisiana Office of Financial Institutions. Tim Hornbrook, NCUA associate regional director, told credit unions to take each possible solution on a case-by-case basis. He instructed credit unions to find simple ways, such as waiving late and ATM fees and modifying loans to help those who are hurting. Linda Charity, director, Division of Financial Institutions with OFR, suggested credit unions should be open-minded about loans and to document every loan. Robert Hayes, bureau chief, Bureau of Credit Unions with OFR, reminded attendees to look at their check-cashing policies before the oil-spill checks begin arriving. Glenn Latham, administrator for the Alabama Credit Union Administration, said credit unions should find ways to help those hurting by considering small loans to help them feed their family. “I thought we had good dialogue between the regulators and credit unions,” said LSCU President/CEO Patrick La Pine. “A lot of good ideas came from the forum that credit unions can consider.” Three Pensacola credit unions--Pen Air FCU, Gulf Winds FCU and Navy FCU, shared best practices they have implemented since the oil spill last April. “We wanted to do something more than just giving money,” said Kurt Stenerson, Gulf Winds vice president of marketing. “The response from the community to the fund has been great. We can see firsthand how the animals along the Gulf are benefitting from this program.” Two of the credit unions are participating in a Florida Bridge Loan program for small businesses.

CUs go back to school with members

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TLC Community CU, Adrian, Mich., participated in student move-in at Adrian College and Siena Heights University. Barb Bates, TLC youth financial literacy specialist, and Maria Garcia, member service representative, helped students open checking accounts. TLC also distributed magnetic calendars with each student’s schedules. (Photo provided by TLC Community CU)
North Jersey FCU, Totowa, partnered with the United Way for a “Backpacks for Kids” event last month. North Jersey employees stuffed school supplies into backpacks and donated them to the United Way Foundation. The foundation will give the supplies to a public school in the state. The credit union also plans to market its North Jersey FCU Kids Kash Club to students. The club was developed to help children 17 years or younger learn about money. (Photo provided by North Jersey FCU)
MADISON, Wis. (9/1/10)--In the midst of the beginning of school for many students nationwide, credit unions are pitching in to make the back-to-school process easier on students and their families. To help families prepare for their college-bound students’ expenses, Power Financial CU, Pembroke Pines, Fla., offered a free workshop for parents Aug. 18 at one of the credit union’s branches. The workshop was taught by local college planning specialists, who told parents that shouldn’t focus on a college’s “sticker price,” but rather what kind of financial aid packages a school offers its students. Technology CU, San Jose, Calif., is helping college and high school students with a new suite of banking products. The Plug In student banking package offers a checking account with online banking and bill pay. It also offers a credit line of up to $500 for students. Students can access their account through the credit union’s website. Finance Center FCU, Indianapolis, and North Central High School Athletics are offering a Panther Free checking account for students. In exchange for the rights to promote Panther Checking at school events, the credit union will give back a percentage of the revenue generated from the accounts to the high school’s athletic program. The account is available to students, parents, faculty, staff, alumni or fans of the high school. The accountholder receives a branded debit card and checks. The school hopes to open 500 new accounts during the school year. As schools nationwide open their doors for the year, so do student credit union branches. Fort Campbell FCU, Clarksville, Tenn., and Clarksville-Montgomery County School System are offering student-operated credit union branches at two local high schools. Thirty-two students from the schools spent their summer learning finances to help operate the student-run branches (Tennessean.com Aug. 10). The branches will be open to students during lunch breaks, and will offer deposits, withdrawals, transfers and loan payments. Christian Financial CU, Roseville, Mich., is launching its first student branch inside De Salle Collegiate High School. The branch will be operated by students at the school, with the help of Christian Financial. Students who work at the branch will receive school credit, said the Michigan Credit Union League (Michigan Monitor Aug. 31). Credit unions also have provided scholarships to students throughout the year. Some credit unions that recently awarded scholarships are Northwest Community CU, Springfield, Ore., and Northwest FCU, Herndon, Va. Northwest Community granted 10 scholarships to students. Full-time students received $1,000 each and part-time students received $500 each. The foundation of Northwest FCU awarded 21 students $90,000 through two scholarship programs. The foundation awarded 15 scholarships of $5,000 and six scholarships of $2,500. Credit unions outside the U.S. also are helping struggling families prepare their students for school. Gerry McConville, manager of Dundrum CU in Ireland, told The Sunday Independent (Aug. 29) that more parents are coming to the credit union for help with their children’s school costs. St. Dominic’s CU, Waterford, Ireland, is offering back-to-school loans at a rate of 6% annually, the newspaper added. Credit unions also have garnered media attention for their back-to-school savings tips. Bob Marquette, CEO of Members 1st FCU, Mechanicsburg, Pa., and Mike Wishow, senior vice president of marketing and communications at the Pennsylvania Credit Union Association, discussed student credit cards and how to finance college and tuition during a segment of Pennsylvania Newsmakers, said the association (Life is a Highway Aug. 27). The segment is aired across the state on Sundays, Mondays, Tuesdays and Saturdays. The Texas Credit Union League’s blog talk radio show, “Your Money, Your Matters,” also will broadcast a show about budgeting for back to school. The show, “Getting the Family Budget in Order for Back to School,” will run every Tuesday for one hour at 11 a.m. The show will offer listeners a chance to call in with questions or comments. The Credit Union National Association (CUNA), through its Home and Family Finance Center radio show, also discussed school-related topics. Phil Heckman, CUNA’s director of youth programs, was quoted in The Daily Gazette via The Associated Press, suggesting parents help their children learn how to budget for school by allowing them to buy something extra with money left over from buying school necessities (Aug. 9).

LSCU CEO proposes CU help to oil-spill claims czar

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Patrick La Pine, president/CEO of the League of Southeastern Credit Unions (left), met with Ken Feinberg, the Gulf Coast Claims Facility administrator, named by President Barack Obama as the independent manager of the $20 billion Gulf Coast Compensation fund. La Pine proposed potential credit union involvement to assist to those along the Gulf Coast affected financially by the oil spill. (Photo provided by the League of Southeastern Credit Unions)
TALLAHASSEE, Fla. (9/1/10)--The CEO of the League of Southeastern Credit Unions (LSCU) has proposed that credit unions get involved with assistance to those along the Gulf Coast affected financially by the British Petroleum (BP) oil spill. Patrick La Pine, LSCU president/CEO, and Will McCarty, league senior vice president of governmental affairs, recently met with Ken Feinberg, the Gulf Coast Claims Facility administrator, who was named by President Barack Obama as the independent manager of the $20 billion Gulf Coast Compensation Fund. The fund was set up with money from BP Oil Company in response to the Deepwater Horizon oil spill, which began in April. During the meeting, they discussed two major issues:
* Cashing of checks paid to claimants; and * Using the compensation fund to serve as a loan guarantor for small loans made by credit unions, especially to small businesses on the Gulf. Many of these businesses and their employees depend on summer revenue to survive through the off season. This year, summer revenues will not sustain coastal residents through the next nine months because of the losses incurred from fishing restrictions and a sharp decrease in tourism after the oil spill.
Feinberg recognized the value of credit unions’ strong response to the financial impact of the oil spill, LSCU said. Knowing that credit unions have the closest relationship to their members, he agreed that credit unions could offer help financially, as well as serve as a source of information for people on the Gulf who file claims. Although existing regulations and legal requirements of the fund are in place and won’t allow for the fund to guarantee loans by credit unions and banks, Feinberg did commit to speak to BP CEO Robert Dudley about the issue. He promised to tell BP that it would be beneficial to work with credit unions to assist individuals affected by the spill, and that BP guarantee loans because it would be a wise investment. LSCU said it will work to continue to build its partnership with the Gulf Coast Claims Facility, other involved parties, and state and federal regulators to assist those affected by the spill.

CU System briefs (08/30/2010)

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* SPOKANE VALLEY, Wash. (8/31/10)--Numerica CU, based in Spokane Valley, Wash., has reached the $1 billion in assets milestone, CEO Dennis Cutter announced in a video conference with staff Friday. He attributed the milestone to a merger with School Employees FCU of Richland, Wash., and to positive growth in this year's first two quarters. Cutter praised staff: "Your dedication to our members and your determination to offer financial help to all people in all walks of life have made Numerica what it is today--a positive contributor to Eastern Washington's and North Idaho's economy. Numerica has more than 85,000 members ... * WASHINGTON (8/31/10)--Maryland and District of Columbia Credit Union Association's (MDDCCUA) board has conferred "Friend of Credit Union" status to Washington, D.C. City Council Chairman Vincent Gray, who is running for the D.C. mayor seat. Gray provided strong support for a curriculum requirement for financial literacy education for D.C. public school students, MDDCCUA said. While meeting with the association, Gray said he would work with the D.C. State Board of Education to develop a course and described his vision for working with credit unions and others to develop financial literacy in all levels of the city's public schools. Gray supports incorporating parents into the lessons as well. Gray also envisions continuing to grow the district's business culture. Gray's "past support for raising the small business tax exemption from $50,000 to $225,000 shows his commitment to the small business of this city, and his understanding of how vital small businesses are to D.C.'s economy," said MDDCCUA President/CEO Mike Beall. Gray plans to make D.C. a global financial center. This type of pro-business thinking will bring more jobs and investment to the district, said MDDCCUA ... * ROANOKE, Va. (8/31/10)--Dick Williams, former CEO of the $355 million asset, Roanoke-based Member One FCU (formerly Norfolk & Western CU), died Thursday after a long illness with cancer. He was 70. He was hired in 1972 as the first president/CEO of Norfolk & Western CU, a position he held for more than 35 years until his retirement in 2008. During his tenure the credit union assets grew from $2.8 million to $335 million, and staff grew to more than 180 employees in a dozen branches. He served as president of the Credit Union Executives Society Virginia Council; as president of the Roanoke Valley Chapter of Credit Unions; as charter member of the Virginia Credit Union League Financial Literacy Council; and as charter member and treasurer of Roanoke Consumer Counseling Service. His credit union career began when he was hired by the league, first as a statewide field representative, then as education director and as director of Virginia Credit Union Services Inc. (Roanoke Times & World News Aug. 29) ... * SCHENECTADY, N.Y. (8/31/10)--Rose M. Benkovic, former manager of Upstate Telco FCU, a $5 million asset credit union based in Gloversville, N.Y., died Friday at a hospital in Amsterdam, N.Y. She was 77. Benkovic was manager of the credit union for 40 years until her retirement. She is survived by two sisters, four nieces, and many great nieces, nephews and cousins. Funeral services are today at 2 p.m., with visitation from 11 a.m. to 2 p.m., at Barter & Donnan Funeral Home, Johnstown (The Daily Gazette Aug. 29) ...

How Katrina changed staffers life Second in a series

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MADISON, Wis. (8/31/10)--For people who lost their homes and their jobs in Hurricane Katrina, there are still moments--five years later--when the loss threatens to overwhelm. But then, they pick themselves up and get on with their new lives, grateful for what they have. "I can't watch it," Cheryl Oggs, vice president of the Mississippi Credit Union Association (MSCUA), said of the news coverage of Katrina's five-year anniversary Sunday. "It brings so many memories back." Oggs is a transplant from New Orleans, where she had served as executive vice president of the Louisiana Credit Union League at the time Katrina hit on Aug. 29, 2005, and the levee broke. She lost her home in St. Bernard's Parish and most of her possessions to 10-12 feet of water. Her elderly neighbors died in the flood. She and her husband lived for four months in a repossessed camper provided by a Georgia credit union. Oggs commuted to the league's temporary office in Baton Rouge, a much longer commute. In 2006, she and her husband moved to North Port, Fla., where they bought a home. When News Now talked with her then, she had gone into real estate and was excited to sell her first house. Monday News Now caught up with her again for an update. "I sold a few houses, and then a bad turn of luck hit," she said. The housing market took a turn for the worse and began its long dive. She tried to get a job with a credit union, but the area credit unions were small branches of larger Tampa and Orlando credit unions with no openings. She ended up with two offers: one to run a bank branch, and one to run a cardiology office. "I didn't want to work for a bank," so she took the cardiology office job. "When your life has been turned topsy turvy, you don't know what you're doing. I was lost as a person," Oggs told News Now. "Everything around me that made me feel secure, with a support system, was gone. You put your feet on the foundation and you go on, but it's not overnight--and there are still moments." "I wish someone had told me not to make a decision for a while. People are not able to make good decisions with that sense of urgency. No one told me to 'take your time to regroup,'" she said. She made poor buying choices--"I bought a purple leather sofa," she laughed. "What got into me?" She said that was typical of many of the people in the same circumstances. Oggs' son and his family moved back to New Orleans and were too far away, and her friends were spread in Baton Rouge and Mississippi. "I was missing credit unions. Work wasn't fun anymore. Work didn't have that warm and fuzzy credit union feel. I was miserable." She called a friend at the MSCUA and asked her to be on the alert for any credit-union related jobs. "Ten minutes later, Charlie (Charles Elliott, president of MSCUA) called and said, 'Come talk to us.'" Elliott hired her as vice president. She is responsible for compliance training, shared branch training, the association's new cooperative advertising program, the Young and Free program, and vendor relationships. Her husband is working on a captain's license so he can work offshore. Jackson, where MSCUA is located, is three hours from the coast. "I'm at the first stop people come to when they're evacuating from a hurricane. When Gustav came through, I had a lot of family in the house." She can't go back to New Orleans. "When I go there, I feel a dark cloud over everything. I feel fortunate here. You never know where God is going to direct you. I've found a safe, quiet place to heal, and people here are great." She expressed appreciation for those who reached out. One woman from SouthWest Corporate FCU, whom she has never met, checked up on her regularly. She sent Oggs an antique fleur-de-lis pin to remind her of New Orleans. "I cried like a baby." "Credit unions really are a life saver," Oggs added. "It's hard to explain. You don't appreciate credit unions until you go away from them. They're like family, and that's the case from sea to sea."

Georgia CU Affiliates names Maxwell Desjardins awards

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DULUTH, Ga. (8/31/10)--Georgia Credit Union Affiliates (GCUA) has named its Dora Maxwell Social Responsibility Award winners and Desjardins Youth Financial Education Award winners. The 2010 state winners of the Dora Maxwell Social Responsibility Award are:
* Hutcheson FCU, Ft. Oglethorpe; * 1st Choice CU, Atlanta; * Credit Union of Atlanta, and * Robins FCU, Warner Robins.
DOCO Regional FCU, Albany, was awarded the Desjardins Youth Financial Education Award. The credit union’s outreach programs included a food drive, financial literacy, increasing employment and asset-building, and revitalizing small businesses. State winners will be acknowledged in May at the GCUA Annual Convention.

CU IDA account yields home for man daughter

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DUBUQUE, Iowa (8/31/10)--Adam Shepherd and his 4-year-old daughter, Sarah, will move into their own home this week after Shepherd saved enough money for a downpayment through a Dupaco Community CU Individual Development Account (IDA) and a three-for-one matching grant from the Iowa Credit Union Foundation.
Click to view larger image Adam Shepherd, 33, will move into his own home this week after he saved enough money for a downpayment through a Dupaco Community CU Individual Development Account and a three-for-one matching grant from the Iowa Credit Union Foundation. (Photo provided by Dupaco Community CU)
With the help of Dupaco Money Makeover coach Paula Ervolino, Shepherd saved $2,000 during a seven-month period beginning in November. The fund matched $3 for every $1 Shepherd saved. The combined $8,000 was enough for a downpayment on a home. Dupaco also provided Shepherd a mortgage loan to finalize the purchase. Through Dupaco’s program, participants’ savings are matched by a grant from another organization. Dupaco opens the savings accounts and provides the required financial education to help ensure the participant’s goals are met. The funds are matched by the foundation through private grants. Participants must meet income guidelines and be residents of or purchase assets in Iowa to qualify for a Dupaco IDA account. Individuals can use the funds to purchase an asset such as a home, start or expand a small business, pay for education or job training, or purchase a vehicle to get to work. Dupaco has four other members enrolled in the program. Others are waitlisted until more match funding becomes available. Shepherd, 33, works two full-time jobs and rents an apartment. He credited Dupaco with showing him how to effectively budget. “I knew I was making money,” Shepherd said. “But I didn’t know where it was going until I started using the program’s savings diary. “I went from a credit zero to credit maybe,” he added. “The IDA program helped me clean up unnecessary debt and taught me the power of systematic saving.” Shepherd said the home is a “wonderful” space for his daughter. Also, “the home has a great potential to help build my net worth,” he said. Financial education was key to Shepherd’s savings success. He credited Dupaco’s Ervolino with keeping him on track. Ervolino said Shepherd was successful because he stayed focused. “Adam completed his workbook of lessons early in the program and stayed on top of his financial education requirements,” Ervolino said. “So when the time came to purchase his home, there was nothing standing in his way.” Based in Dubuque, Iowa, Dupaco has $778 million in assets.

Mid-America CU Association announces state awards

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BISMARCK, N.D. (8/31/10)--The Mid-America Credit Union Association announced award winners in South Dakota for the Dora Maxwell Social Responsibility Award, and in North Dakota for the Maxwell Award, the Louise Herring Award for Philosophy in Action and the Desjardins Youth Financial Education Award. South Dakota credit unions that were first-place winners for the Maxwell award are:
* Service First FCU, Sioux Falls, $100 million to $200 million is assets; * Dakota Plains FCU, Lemmon, $20 million to $50 million; * Sioux Empire FCU, Sioux Falls, less than $5 million; and * Sioux Valley Chapter of Credit Unions, Credit Union Chapter Entry.
North Dakota first-place winners for the Maxwell award are:
* Town & Country CU, Minot, $200 million to $500 million in assets; * Citizens Community CU, Devils Lake, $100 million to $200 million; * Dakota Plains CU, Edgeley, $20 million to $50 million; and * Postal Family FCU, Fargo, $5 million to $20 million.
First-place winners in North Dakota’s Herring award competition are:
* Capital CU, Bismarck, $250 million or more; * Citizens Community CU, $50 million to $250 million; and * Dakota Plains CU, less than $50 million.
North Dakota Desjardins first-place winners are:
* Capital CU, $150 million to $500 million; * Citizens Community CU, $50 million to $150 million; and * Dakota Plains CU, less than $50 million.

WOCCU to G-20 CUs need access to economic infrastructure

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MADISON, Wis. (8/31/10)--Financial inclusion initiatives by the Group of 20 (G-20) nations would strongly benefit from the involvement of credit unions, especially in terms of their outreach capabilities to the poor, World Council of Credit Unions (WOCCU) told the G-20’s Access Through Integration Sub-Group (ATISG) in a recent letter. However, appropriate political pressure must be applied to make various countries’ financial infrastructures available to prudentially supervised financial cooperatives for credit unions to effectively serve the global poor, WOCCU said. WOCCU sent its comments to ATISG committee co-chairs Paul Flanagan, general manager of international finance for the Australian Treasury, and Rodrigo Pereira Porto of the Central Bank of Brazil. The letter, a follow-up to WOCCU’s participation in ATISG’s July 13 meeting in Rio de Janeiro, reaffirmed credit unions’ role in helping the G-20 accomplish its financial inclusion goals. “Although WOCCU is supportive of the ATISG’s Principles for Innovative Financial Inclusion, we believe there are multiple areas in which the G-20’s efforts could complement the work of credit unions in the private sector,” said Dave Grace, WOCCU vice president of association services. WOCCU identified areas in which credit unions could assist in the G-20’s financial inclusion efforts:
* Credit unions could be more effective in serving marginalized and remote consumers if they were given greater access to countries’ financial infrastructures. Although credit unions already work under prudential oversight and can accept savings deposits, they often are excluded from direct access to deposit insurance, securitization markets, payment and settlement systems, card networks, credit bureaus and central bank liquidity resources. WOCCU recommended that the G-20 encourage standards-setting bodies worldwide to allow non bank financial institutions access to these critical components of the financial infrastructure. * Innovative credit unions, especially in Mexico and Brazil, have reached the rural poor through technological alternatives that take credit union services to members’ doors or use multiple delivery channels to assure access to services. Providing credit unions access to sufficient resources will further increase access to services and promote the G-20’s financial inclusion goals, WOCCU said.
WOCCU’s letter also described the global trade association’s efforts to build credit union supervisory capacity through its support of the International Credit Union Regulators Network (ICURN), a four-year-old organization of international regulators from 19 agencies with statutory responsibility for the countries they represent. ICURN held its most recent meeting at The 1 Credit Union Conference in Las Vegas in July, attracting 30 representatives from six continents. The letter also mentioned the United Nations’ designation of 2012 as the International Year of Cooperatives as a potential platform for providing additional stimulus for credit unions’ inclusion by the G-20 in support of its economic goals. “We believe the G-20’s financial inclusion efforts can best complement the private sector efforts of credit unions by keeping up the political pressure to open up the financial infrastructure to prudentially supervised and pro-poor institutions,” Grace wrote.

CUNA Mutual Filene to boost Irish CUs future

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DUBLIN, Ireland (8/31/10)--Facing some of the most difficult challenges since their founding, Irish credit unions gathered in Dublin Thursday to take the pulse of their industry and learn from the successes and mistakes credit unions elsewhere have experienced in challenging economies.
Click to view larger image Paul Walsh, CEO, CUNA Mutual, Europe; Trisha Bulman, Swords & District CU, Dublin; and Mark Meyer, CEO of Filene Research Institute, chat outside the Dublin meeting hall where credit union managers, directors and regulators discussed the future of Irish credit unions last week. The Future of Finance one-day conference was hosted by CUNA Mutual Group. (Photo provided by CUNA Mutual Group)
CUNA Mutual Group hosted 50 managers and directors at a daylong conference in hopes of helping Irish credit unions endure a faltering economy and capitalize on opportunities. The event unveiled results of a pre-conference survey and revealed best practices learned by other credit union systems around the world. Other industry stakeholders attending were the credit union regulator, legislators and trade organization representatives. “Irish credit unions are facing the most significant challenges since their foundation,” said Paul Walsh, CEO, CUNA Mutual’s European division. “The economic climate in which they operate has collapsed. The ‘Future of Finance’ conference provides our industry leaders with a unique window of knowledge to other systems through Filene Research Institute and insight as to what their global colleagues are thinking on the credit union industry’s more pressing issues.” The survey, distributed by CUNA Mutual prior to the conference, was designed to prompt discussion among credit union leaders at Thursday’s event. Nearly 40 credit unions with an average 57% loan-to-deposit ratio and representing 654,000 members and $4 billion in assets responded to the survey. Survey results showed:
* The credit unions’ predominant financial strategy is “conservative lending”; * There is strong support for greater cooperation among credit unions and possible mergers; * There is total agreement the credit union sector is very important to Irish consumers, and a strong concurrence that governance and regulatory reform was, in itself, a good thing; * Respondents see difficulties with recruiting new volunteers and directors for future stewardship of the Irish sector; * About 90% said they are optimistic they have a future as a financial services provider; * More than 95% said the sector needs to be seen “in public” as having a coordinated view; * More than 90% said the image of credit unions must change to attract new members.
Ratings agency Moody’s downgraded the Ireland’s sovereign bond rating to Aa2 from Aa1 in July. The ratings agency said the move had been driven by the government’s gradual but significant loss of financial strength (BBC News July 19). Walsh and Mark Meyer, CEO of Filene Research Institute, implored Irish credit union leaders to be innovative and take advantage of opportunities that other credit union sectors have in defining their future. “We’re in a position to shape the future, rather than have it shape us,” Walsh said. “It’s a privilege that comes to very few and it falls on you, leaders of Irish credit unions. Change will occur, but how it looks and feels and whether it’s a force for good or not will depend on whether you seize the initiative.” The global economic downturn has driven credit union leaders worldwide to rethink their business model, Meyer said. “This downturn doesn’t just represent a cyclical moment. It’s a rethinking of consumerism and of business,” he added. “This is especially true for U.S. credit unions that have long relied on an enormous appetite for loans.” Meyer urged credit unions in Ireland not to be fooled into thinking they can ride out the current economic storm. “You face even harsher economic conditions than in the U.S. Stirring the status quo in times like these doesn’t count as a strategy,” he said. “Downturns, especially one of this magnitude, are the best times to try out new ideas,” Meyer added. “There may be few other opportunities for trying new ideas. Now is a time for leaders who think about what members need for tomorrow, not just managers who agonize over what their organization might need today.” Economist Richard Curran also presented at the “Future of Finance.” Curran is deputy editor of the Sunday Business Post, a leading business newspaper in Ireland.

N.J. league meeting discusses internships for disabled

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HIGHTSTOWN, N.J. (8/31/10)--The New Jersey Credit Union League recently hosted a meeting for credit unions to discuss internships for disabled individuals through a program that has been implemented at five credit unions in the state.
Click to view larger image The New Jersey Credit Union League hosted a meeting about credit union internships for the disabled through the Building Economic Strength Together program. From left are: Daymar Rivera and Cathyann Frank, McGraw Hill FCU; Jose Del Valle, intern; Mulu Gebreyesus, New Community FCU; Megan Timble, intern; Pamela Owens, National Federation of Community Development Credit Unions; Angel Santos, New Jersey Credit Union League; Jessica Revoir and Helga Britton, First Financial FCU; Regina Calamanco, Michael Holguin, Joshua Stanlaw and Crystal Castro, interns; Stacie Fourroux and Jennifer Seder, Healthcare Employees FCU; and Paul Gentile, CEO of the league. (Photo provided by the National Federation of Community Development Credit Unions)
The meeting was facilitated by Mark Lynch, field coach for the National Credit Union Foundation’s REAL Solutions program, and Pamela Owens, director of education and training with the National Federation of Community Development Credit Unions. It focused on the Building Economic Strength Together (BEST) program, aimed at strengthening the connection between credit unions and the disabled community. The community is widely unbanked or underbanked, said the federation. BEST was developed by the federation, the National Disability Institute, and Allies Inc., a New Jersey-based training group for the disabled. The New Jersey league supports the program through its REAL Solutions initiative. Beginning in mid-July, seven interns worked at five New Jersey credit unions: McGraw Hill FCU, East Windsor; Healthcare Employees FCU, Princeton; First Financial FCU, Toms River; New Community FCU, Newark; and Novartis FCU, East Hanover. Interns worked in the credit unions’ human resources, marketing and accounting departments, and as tellers and member service representatives. Though only New Jersey credit unions are in the BEST programs. Program participants hope their work will serve as a national model. “This program not only helps those from the disability community gain valuable on-the-job experience by interning at credit unions, but it also helps credit unions understand how to better serve this important segment of our population,” said league President/CEO Paul Gentile. “Our involvement in the BEST internship program has been a truly rewarding experience,” added Jennifer Seder, director of marketing and business development at Healthcare Employees FCU. “It has allowed ups to explore ways to understand the needs of the disability community, while providing a hands-on approach for our intern to learn about the credit union industry from the inside out.” Training for BEST interns is paid for and conducted by BEST’s partner organizations. The credit unions involved in the project have little to no cost associated with participation.

Five years later Katrina remembered

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MADISON, Wis. (8/30/10)--Five years ago, after Hurricane Katrina stunned the nation with its heart-breaking sweep through New Orleans and the Gulf Coast states of Louisiana, Mississippi and Alabama, Louisiana Credit Union League President Anne Cochran told trade press that the state's credit unions were concerned that people would forget them, once the next disaster came along.
Click for slide show More than one month after Hurricane Katrina struck on Aug. 29, 2005, street signs in unlikely places collected signs advertising house gutting, tree removal and mold treatments in the Lakeview area of New Orleans. (Photo provided by CUNA)
"We won't forget," promised News Now and Credit Union National Association's (CUNA) monthly publication, Credit Union Magazine, who were among those touring the hurricane's aftermath. Since then News Now has written nearly 745 stories about Katrina and its impact on credit unions. It didn't forget, and neither did America. Yesterday, credit unions and America took a look back to Aug. 29, 2005, at what the Louisiana league calls the largest natural disaster in American history (eNews Aug. 25). Katrina was also the largest catastrophe loss experienced by credit unions and their insurer, CUNA Mutual Group. The hurricane created at least $27 million in damages to the three states' credit unions. Four months after the hurricane hit, the company had paid out $15 million on about 327 credit union facilities affected by Katrina and Hurricane Rita, which hit Louisiana and Texas a month after Katrina (News Now Dec. 5, 2005). Another $12 million in losses were covered by CUNA Mutual's insurers. This week, News Now will feature a series of stories about the hurricane's immediate aftermath and how credit unions in those states have recovered, with updates on the credit unions it reported about and how Katrina changed credit unions in those states. It will look at how Katrina changed credit union operations, with more emphasis today on disaster preparedness and communications, as well as the growth of shared branching. It will examine the role corporate credit unions had in providing liquidity for the credit unions, and how the hurricane affected the economy. Katrina proved that credit unions' cooperative philosophy works. News Now will describe the massive, unprecedented relief efforts undertaken by credit unions and their organizations and business partners, and how Katrina changed credit unions' methods of fundraising and relief efforts. News Now will also look at how credit union employees survived "the new normal" and weathered a whole different set of challenges and limitations. And it will update readers on the status of those credit unions.

CU System briefs (08/27/2010)

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* MARLBOROUGH, Mass. (8/30/10)--The Massachusetts Credit Union League's Community Hope Initiative raised more than $35,000 at its annual golf tournament to benefit the Massachusetts Coalition for the Homeless in Northborough. The tournament attracted 128 golfers. Teams from the NMTW Community CU, Lowell, took first and second place awards. Al Santoro of Members Plus CU, Medford, had the men's most accurate drive, and Cheryl Gorman of Harvard University Employees CU, Cambridge, won the women's counterpart (e-Weekly Aug. 26) ... * COLUMBUS, Ohio (8/30/10)--Credit Union of Ohio has donated $50,000 to the Ohio Statehouse Museum, to be used to continue its third phase of construction and help with transportation costs for children to visit the museum. Phase II of the construction was completed last summer. Phase III, an inspirational area underneath the rotunda entitled The Heart of Democracy, should be completed as early as November. "We serve members throughout all 88 counties of Ohio and felt this donation would be a great way to give back to all our member communities at once," said Credit Union of Ohio CEO Rich Capuano. The credit union has $115 million in assets and 21,000 members ... * SALT LAKE CITY (8/30/10)--Mountain America CU has launched an application for the Apple iPad and is the first credit union in the country to offer an iPad optimized app, it announced. "Success in the mobile space is critical--many people have access to a cell/mobile device more often than they do a PC," said Tony Rasmussen, senior vice president of the more than $2.8 billion asset credit union. The new app is optimized to take advantage of the additional "real estate" on the screen. Previously the credit union provided an iPhone app that could also be used on an iPad, but that appeared slightly pixilated when used in full-screen mode ...

Members United Corporate records more losses in July

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WARRENVILLE, Ill. (8/30/10)--Members United Corporate FCU reported $8 million in additional other-than-temporary-losses as of July 31, creating a $4.6 million loss for the month and nearly $11.2 million in losses year to date. That leaves the Warrenville, Ill.-based corporate's with retained earnings totaling $3.9 million as of July 31. However, the corporate is seeing improving OTTI loss projections and said it expects to retain favorable net interest income relative to budget for the remainder of 2010. Its unaudited financial report as of July 31, is on the corporate's website. (Use the link). A retained earnings balance of $9.6 million was sufficient to absorb the OTTI monthly loss, and no additional capital depletions in were necessary, said the $8.9 billion asset corporate. Assets for the month a year ago totaled $8.7 billion. Regulatory capital, consisting of retained earnings and membership capital shares, totaled $18.4 million, compared with $200.5 million in July 2009. Losses the past 12 months have depleted $79.4 million of paid-in capital and $460.1 million of membership capital shares, leaving $14.6 million in qualifying membership capital shares as of July 31. Members United holds 464 separate investment positions totaling $4.7 billion in par. Roughly $610 million in OTTI has been recorded on 169 positions totaling $2.2 billion in par amount (on average 25%). No OTTI has been recorded on the other 295 positions that aggregate $2.5 billion in par. The next OTTI investment review will be based on data as of Sept. 30, and is scheduled to be recorded in the financial statements as of Oct. 31. The October results will then be reported in November. Depletion of capital shares, if required, would occur as of Nov. 30, the corporate said.

Fake checks circulating with name of Colo.-based CU

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COLORADO SPRINGS, Colo. (8/30/10)--Air Academy FCU, Colorado Springs, Colo., contacted the Federal Deposit Insurance Corp. to report counterfeit official checks bearing the institution’s name are in circulation. The counterfeit items display the routing number 092005411, which is assigned to First Interstate Bank, Helena, Mont. Air Academy FCU issues its official checks through a payable-through account held at First Interstate Bank. The items are similar to authentic official checks. However, the counterfeit items display a security feature statement embedded within a darkened top border and above the bottom border in the lower-right corner.

Five Ohio league board nominees appointed

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COLUMBUS, Ohio (8/30/10)--Five nominees for the 2011 Ohio Credit Union League Board of Directors were appointed by acclamation. Five director positions were up for election--Districts I, II, and III and Membership Categories A and C. Only one nomination was received for each position. Therefore, the five candidates are elected by general consent or acclamation (eLumination Newsletter Aug. 25). The league directors are:
* District I--Barry Shaner, Directions CU, Sylvania; * District II--Phil Meyer, Ohio University CU, Athens; * District III--Robin Thomas, Taleris CU, Cleveland; * Membership Category A--Jennifer Ferguson, Bay Area CU, Oregon, and * Membership Category C--Steve Behler, Kemba CU, West Chester.
All will serve three-year terms expiring 2014.

Filene Four governance areas ripe for improvement

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MADISON, Wis. (8/30/10)--Credit union directors are unreliable judges of their own efficacy, and there several areas ripe for governance improvement, according to a recent Filene Research Institute survey. When asked to self-judge the quality of their governance and the strength of their credit union’s performance, the directors who considered their governance practices good also said that their credit unions performed well. But when the directors were matched with their credit unions’ actual returns on assets (ROAs) over seven years, there was no statistical correlation to above-average ROAs. Volunteer credit union boards display a broad range of competence and engagement, according to Tracking the Relationship between Credit Union Governance and Performance, sponsored by the Credit Union Executives Society. The report is the latest in a string of Filene research into credit union governance practices. The research identifies several best practices that allow credit union leaders to improve both governance and performance. The research shows areas that could be improved:
* Time management--Effective meeting management is a challenge, and boards seem to have only a vague sense of how their meeting time is spent. To improve, boards must know how their time is currently spent and then prioritize agendas to spend more time on strategy. * Director evaluations--A lack of board introspection means board chairs and other directors need to be proactive in formally evaluating their own contributions. They should consider implementing annual board effectiveness surveys, formal peer feedback, formal reviews of the chair, and feedback from management. * Continuing education--One way to encourage better governance is to demand individual improvement. Surveyed directors who ranked their boards in the top decile of governance performance all had formal continuing-education policies, while those in the lowest decile rarely did. * CEO evaluations--The board/CEO link drives financial performance. The only governance practice that yielded a strong positive correlation with actual credit union ROA performance was whether boards felt they had an effective CEO evaluation in place.
“Credit union governance is one of those issues that never seems urgent, but thinking about it and improving it just might be a more important issue than anything else we face right now,” said Mark Meyer, Filene CEO. “As a credit union director myself, I can vouch for the importance of holding ourselves as accountable as we hold management.” Using in-depth interviews and survey tools, researchers from the Rotman School of Management at the University of Toronto plumbed credit union board practices in areas, such as time allocation, decision-making processes, board composition, director selection, board performance measures and credit union performance measures. The study provides other insights. Time management and meeting inertia are hard to overcome. Credit union directors mirror the feelings of their counterparts on publicly held boards in saying their boards need to spend more time on strategy and risk management, and less time on operational matters and routine items. Most directors agree that attracting and retaining younger, more diverse directors with a broader base of backgrounds is a priority. Yet, many respondents said they feel challenged to find qualified volunteers who are willing to commit. Many boards seem to be adopting a wait-and-see attitude rather than emphasizing more rigorous recruiting practices such as evergreen lists, Filene said. Several interviewees stressed that it is hard to remove underperforming directors--even when their terms are up--for fear of hurt feelings.

Indiana league convention focuses on shoes for hope

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INDIANAPOLIS (8/30/10)--Manny Ohonme, founder of Samaritan’s Feet, one of the largest humanitarian not-for-profit organizations in the world, will present the keynote address at the Indiana Credit Union League Convention next month. From humble beginnings and a poverty stricken lifestyle in Africa, to the corporate boardrooms in lower Manhattan, to his current role as a global philanthropist, Ohonme will challenge attendees to enrich their work lives, enhance innovation, and improve team dynamics to develop their skills as socially conscious, purpose-driven leaders. Attendees can participate in a special collection for Ohonme’s organization, Samaritan’s Feet, which is dedicated to changing lives through Shoes of Hope distributions in Indiana, nationwide and globally. Collection points will be available at various convention events for shoe donations. The organization is in particular need of children’s athletic shoes. The league will collect new shoes for either boys or girls. “We are looking forward to having Manny kick off the convention by sharing his enthusiasm and experience,” said league President John McKenzie. “We want to help his organization meet its goal of raising 10 million shoes in 10 years.”

Congressmans session hosted by Illinois league

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NAPERVILLE, Ill. (8/30/10)--U.S. Rep. Bill Foster (D-Ill.) and Chief of Staff Jason Linde recently visited the Illinois Credit Union (ICU) System Center for a dialogue session with area credit unions, hosted by the Illinois Credit Union League (ICUL).
Click to view larger image Visiting the Illinois Credit Union (ICU) System Center recently for a dialogue session with area credit unions, hosted by the Illinois Credit Union League are, from left: Robert Palumbo, CEO, DuPage CU; Libby Calderone, CEO, Earthmover CU; Carl Sorgatz, CEO, Hawthorne CU; U.S Rep. Bill Foster (D-Ill.); Robert Schroeder, CEO, Illinois Community CU; and Bill Hicks, chairman, DuPage CU. (Photo provided by the Illinois Credit Union League)
Credit union representation included DuPage CU, Naperville; Earthmover CU, Aurora; Hawthorne CU, Naperville, and Illinois Community CU, Sycamore. At the session, credit unions stressed that credit unions did not cause or contribute to the financial meltdown and requested that Foster, who is a member of the House Financial Services Committee, watch for opportunities to streamline unnecessary laws and regulatory burdens on credit unions. Specific topics discussed by the group included: the new Consumer Financial Protection Act (CFPA), maintaining the National Credit Union Administration (NCUA) as an independent regulator, allowing NCUA to conduct examinations on behalf of the new Bureau of Consumer Financial Protection Bureau, rejecting any amendments related to bankruptcy cramdowns, and support for pending legislation allowing federally insured credit unions to increase the cap on member business lending. Also discussed were ICUL Service Corp.’s (LSC) initiatives and the impact of recent legislation, including an interchange provision of the CFPA on LSC’s operations. Credit Unions nationwide oppose the provision. As part of the visit, George Fiegle, LSC executive vice president/chief operating officer, and Cathy Pettis, LSC senior vice president of operations, provided Foster with a tour of all ICU System departments--including its call center where LSC provides service to more than 2,500 credit unions across 45 states. “We believe [Foster] obtained a much more informed understanding and appreciation for the cooperative nature of credit unions, the league and service corporation,” said Don Edwards, ICUL senior vice president of federal governmental affairs.

Iowa MBL saves 40 jobs at grain elevator

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OTTUMWA, Iowa (8/30/10)--An Iowa credit union is receiving both media and congressional attention for saving 40 jobs at Troy Elevator, a grain elevator that was destined to close when its relationship with a bank fizzled. Pending legislation in Congress would allow credit unions to help more such businesses at no expense to taxpayers, said the Credit Union National Association (CUNA) and the Iowa Credit Union League. Troy Elevator, with locations in Troy, Bloomfield, Pulaski and Blakesburg, Iowa, will continue operations and keep 40 Iowans employed, thanks to Community lst CU, said the league. For the past 18 months, Community 1st CU worked with the grain elevator to keep it from closing. Recently it provided a guaranteed loan through the U.S. Department of Agriculture's (U.S.D.A.) Rural Development Program. Troy Elevator, in business since 1928, suffered severe damage at its Pulaski site during a tornado in 2008. Its president, Robert Newton, began working with his lender at that time to restructure the company's long- and short-term debt to recover from the tornado's damages. In January 2009, the lender informed Newton it would no longer do business with Troy Elevator. "We had never missed a payment or been late in our 18-month relationship with the bank," said Newton. "We were completely shocked and frustrated that they wouldn't help us." In December 2009, Community 1st began working with the company. "We knew Troy Elevator was having issues with its lender, and we didn't want to see them close their doors," said Terry Maloy, president/CEO of 1st Community. The grain elevator applied for the U.S.D.A. loan through the credit union and received approval earlier this month. It reorganized and kept all 40 jobs in Iowa. "We are so thankful to Community lst CU for stepping up to help us during our desperate time of need, especially when banks turned us away," Newton said. "We were able to save our business and the jobs of our employees thanks to this credit union." The league noted that although Community 1st was able to help the grain elevator, it may not be able to make a loan to the next struggling business owner because federal law restricts a credit union from lending more than 12.25% of its assets. Community 1st is at the maximum cap of its assets, which means it would be forced to turn away the next business owner in need of access to capital, even though the business would qualify for the loan. "Iowa credit unions have always practice safe lending practices, and now more than ever, Iowans are turning to credit unions with their business lending needs," said league President/CEO Patrick S. Jury. "Iowa credit unions are in a position to do even more if given the opportunity, allowing for greater capital expenditures, greater economic activity and--ultimately--more job creation," he added. CUNA urged credit unions to continue to seek federal legislators’ support for increased member business lending (MBL) authority while lawmakers are in their home districts during the current District Work Session, which ends Sept. 13. “Credit union representatives are right now talking to their senators about how an increase in the MBL cap would positively affect the economy by infusing as much as $10 billion of new credit into small businesses, and as many as 108,000 new jobs into the job market, at no cost to the taxpayer,” said John Magill Friday. Magill is CUNA senior vice president of legislative affairs. “This story shows that CUNA figures reflect the real needs of real small business owners. It is proof positive that now more than ever MBL relief is warranted--vital to small businesses--and should be passed by Congress without hesitation,” Magill added. When the Senate is back in session, it is expected that chamber will return to its work on a small business jobs bill, which is a possible vehicle for an amendment that would increase the MBL cap to 27.5% of assets, up from 12.25%.

Canadas Central 1 CU reports first-half 2010 income

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TORONTO (8/27/10)--Central 1 CU, which serves credit unions in British Columbia and Ontario, Canada, posted a net income of $12.7 million during the first six months of 2010, it announced. That compares with $53.1 million in net income for the same period in 2009 (melodika.net Aug. 26). Central 1 experienced higher financial margin and larger trading gains than in the first half of 2009, but financial markets' current volatility meant more mark-to-market losses this year compared to last year. Last year Central 1 was able to take advantage of the market situation and made exceptionally strong gains. "In the current financial climate, we had no expectation of matching last year's exceptional performance," said President/CEO Don Rolfe. Central 1 expects a strong financial margin in the second half, but noted it will be accompanied by ongoing market volatility, he said. Assets at Central 1 grew by 8.4% year-over-year to $10.3 billion as of June 30, compared with $9.5 billion for the same period in 2009. Central 1's return on equity was 4.6%, compared with 23% a year earlier. The credit union provides liquidity management, payments, Internet banking and trade association services to member credit unions, as well as banking and transaction services to customers in corporate and public sectors.

CU one of 10 companies in nation honored for benefits

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TEXARKANA, Texas (8/27/10)--Red River FCU is one of only 10 growing companies to earn national honors for its benefits offered employees, according to the Texas Credit Union League. An independent panel of employee benefits experts named the Texarkana, Texas-based credit union as one of the 2010 winners of The Principal 10 Best Companies for Employee Financial Security, citing the credit union's exceptional retirement benefits and its wellness program (LoneStar Leaguer Aug. 26). "Red River CU faces the same challenges as other businesses. What makes them extraordinary is the priority they place on employee financial security," said Luke Vandermillen, vice president of The Principal Financial Group. He noted the more than $452 million asset credit union did not cut benefits and will soon offer full-time benefits to employees working at least 30 hours a week. The credit union understands the direct connection among "strong benefits, a strong workforce and a strong bottom line--in the best and worst of times," he added. Red River has 100% participation in its 401(k) plan and offers an employer match that can be as high as 7.5% of the employee salary. It also adds another 3% for profit sharing. "That shows their real commitment to financial security," said Deborah Hall-Pope, a judge, and chief human resources and organizational services officer at ASCD, which was a 2009 winner. "We believe that our benefits are one of the hallmarks of the organization, even in these difficult times," said Robert Buck, Red River's president/CEO. "We have not taken away any of our benefits as a result of the economy--we didn't want our employees to suffer. We have actually tried to step up our benefits in some ways," he added. The Principal sponsors the program, which is in its ninth year. It will publish a summary of best practices of the winners, which will be available in January on its website at www.principal.com/10best. The credit union was the only financial institution among the winners.

Man in death penalty case to get life in prison

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DETROIT (8/27/10)--Timothy O'Reilly, 37, who was convicted in the killing of an armored-truck guard outside a Dearborn, Mich.-based credit union, will get a life sentence, without parole, instead of the rare death penalty sought by prosecutors. The death penalty would have required a unanimous decision from the 10-woman, two-man jury, but only four jurors voted in favor of the death penalty (The Detroit News Aug. 26). The jury returned its verdict late Wednesday afternoon. The guard, Norman Stephens, 30, was shot twice while restocking ATMs at Dearborn FCU (now DFCU Financial CU) on Dec. 14, 2001. Six people were involved in the $204,000 heist. Three testified against O'Reilly. Two others face the death penalty in pending trials. A sixth suspect is deceased. O'Reilly was convicted by the same jury on Aug. 3. He will be sentenced formally on Feb. 8. Michigan was the first state to outlaw the death penalty, but the penalty can be used in certain federal cases. The last execution in the state occurred in 1938. The last person sentenced to death under federal law in Michigan is still on federal death row in Terre Haute, Ind., said the Detroit Free Press (Aug. 26).

Pannier named CEO of REALTORS FCU

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ROCKVILLE, Md. (8/27/10)--The REALTORS FCU Board of Directors announced that Jane Pannier will be its new president/CEO. Pannier had been serving as acting CEO of the two-year-old virtual credit union, following the departure Aug. 1 of previous CEO Tom Glatt. “There was no need to do a large search to fill the position,” said REALTORS FCU Chairman Mike Brodie. “We knew right away that Jane would be the perfect candidate and have certainly solidified our decision in the past few weeks.” Chief Information Officer Jesse Boyer has moved into the chief operating officer role. Tamara Schiavone, chief financial officer, rounds out the senior management team. Before joining the credit union, Pannier was a partner with The Rochdale Group, a credit union consulting firm. She also served as senior compliance counsel for the National Association of Federal Credit Unions, as director of its Regulatory Compliance Department, and as CEO for the then-named, UAW FCU, now International Uaw FCU.

Como Northtown Community CU seeking merger

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ST. PAUL, Minn. (8/27/10)--Como Northtown Community CU in St. Paul, Minn., is looking at the possibility of merging with a larger credit union. The board of the $37 million-asset Como Northtown approved plans last week to explore a merger with Affinity Plus FCU, a $1.34 billion asset, St. Paul credit union (StarTribune.com Aug. 25). “The [Como Northern] board passed a resolution to pursue a merger for sometime in the future … maybe,” Bryan Roegge, Como Northern president/CEO, told News Now. “We’re looking to see if it’s in the best interest of our members. So far, it looks to be, but it’s far from being a done deal. “We’ve had many suitors, but chose to look at Affinity Plus, because they’re the best,” Roegge added. “In the long run, this is best for our members. They’re going to thank us.” “Our board passed a similar resolution Wednesday night to accept Como Northern’s resolution and continue with the merger process,” Kyle Markland, president/CEO of Affinity Plus, told News Now. “We still need to submit merger documentation to our respective regulators. We expect the merger to pass by year-end.” “Their brand fits in really nicely with our brand structure,” he added. “Also Como Northern’s members will have 23 additional locations to go to for their financial needs.” Como Northern began receiving phone calls about six months ago from other credit unions that were interested in merging, Roegge told the paper. Roegge noted that the National Credit Union Administration (NCUA) began asking about the credit union’s plans for future growth. “The NCUA didn’t come out and say, “You have to merge,” Roegge told the paper. “But reading between the lines at the questions they were asking, you could tell that [a merger] was their desire.”

Savers seeking alternatives such as CUs

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MADISON, Wis. (8/27/10)--Consumers looking to save more of their money from being depleted by rising or new fees at banks may turn to credit unions or smaller banks as an alternative, according to a Thursday article in the San Francisco Chronicle. “The average interest on savings, checking, money market and certificate of deposit accounts fell to 0.99% in July, the first decline below 1% in a decade," the article said, citing statistics from San Anselmo researcher Market Rates Insight. In response to the financial services overhaul bill that became law July 21, banks also have raised or added new fees, the article added. “The result? An increasing number of people, seeing their deposit earnings eaten up by charges, may wind up at smaller banks and credit unions,” the article continued. "Almost 80% of the 50 largest credit unions offered free checking as of April, Bankrate.com data show, while unconditional free checking is no longer offered by the four biggest banks--San Francisco’s Wells Fargo & Co., Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc.” Another article noted that consumers can save by refinancing their car loans at credit unions. Consumers with decent credit and newer vehicles should look to credit unions to refinance their car loans, said the Las Vegas Review Journal (Aug. 26). The article mentioned Nevada credit unions--such as Boulder Dam CU, Boulder City--that can save members money through refinancing auto loans at lower rates. Many credit unions in the region offer auto-loan refinancing, Daniel Penrod, senior industry analyst with the California and Nevada Credit Union Leagues, told the Journal. Members with good credit often can save from 0.5% to one or two points, especially if the consumer has a loan from another lender, he added. Credit unions typically offer refinance deals and other car loans in the range of 3.9% to 4.9%, compared with 6.9% at the beginning of the decade, Penrod told the Journal. To read the articles, use the links.

Gerlach touts small biz legislation

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READING, Pa. (8/27/10)--Small businesses create most jobs, and legislation should be enacted to allow them to grow, U.S. Rep. Jim Gerlach (R-Pa.) told attendees at a town hall meeting Wednesday in Wyomissing, Pa. Gerlach is a co-sponsor of the Small Business Assistance Relief Act, according to Reading (Pa.) Eagle (Aug. 26). He met with 25 members of the Greater Reading Chamber of Commerce and Industry, noting the act would make it easier for small businesses to obtain credit. Edwin L. Williams, CEO of Discovery FCU, Wyomissing, and a board member of the Credit Union National Association (CUNA), told Gerlach that CUNA is backing legislation that would enable credit unions to lend more money to small businesses. The legislation would increase credit unions' member business lending cap to 27.5% from 12.25% of assets, he said. Gerlach noted that credit unions have a good record for supporting small businesses, but banks likely would oppose efforts to expand credit unions' lending ability. The ideal solution, he said, would be to find ways to help both, the newspaper reported.

Kansas CU regulator testifies in fin lit hearing

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LAWRENCE, Kan. (8/27/10)--Among those testifying as to Kansas credit unions' efforts in financial literacy before a House subcommittee Wednesday was the state's credit union regulator, John Smith, administrator of the Kansas Department of Credit Unions (KDCU). He and Chris Wolgamott, community development liaison at Wichita-based Meritrust CU, testified before the House Financial Services Committee subcommittee on oversight and investigations' hearing on "Empowering Consumers: Can Financial Literacy Education Prevent Another Financial Crisis?" "A key lesson that we've learned from the financial crisis is that we need to do a better job across sectors--local, state and federal government, private industry, non-profits, etc.--to utilize scarce resources to better promote financial literacy education," said subcommittee Chairman Dennis Moore (D-Kan.), in his opening statement. In his testimony, Smith noted that many credit unions are committed to increasing financial literacy among their credit union membership and into the community. He cited three examples:
* First Choice CU, Maize, which has sponsored an in-school branch at a local high school the past three years; * Sunflower U.P. FCU, Marysville, which provides in-class financial education for grades K-12 in surrounding parochial and public schools; and * K-State FCU, Manhattan, which has participated in the State Treasurer's Save@School program since 2004.
Financial literacy enhances KDCU's position as a safety and soundness regulator, and the department supports such financial literacy efforts, Smith told the subcommittee. Wolgamott's testimony, which was featured in Thursday's News Now, highlighted Meritrust CU's financial education efforts and experiences. Wolgamott testified at the request of the Kansas Credit Union Association (KCUA). Throughout the hearing, Kansas credit unions were referred to repeatedly for their work in this area, said KCUA. Financial Services Committee member Rep. Lynn Jenkins (R-Kan.), who has worked with credit unions since her tenure as Kansas State Treasurer, said, "Kansas credit unions have stepped up to the plate in a big way to address financial literacy issues in Kansas." Current State Treasurer Dennis McKinney called the state's credit unions one of his department's "largest partners" in financial literacy efforts.

Minn. FIC helps CUs with fin lit strategies

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ST. PAUL, Minn. (8/27/10)--The Minnesota Family Involvement Council (FIC) debuted its Start 2 Go Workshop Aug. 19, guiding more than 40 credit union professionals on how to infuse energy into lifestage programs, clubs and overall financial literacy strategies.
Click to view larger image During the Minnesota Family Involvement Council’s Start 2 Go Workshop on Aug. 19, Nathan Dungan (center), founder and president of Share Save Spend, discussed with credit unions how they can help their members engage, educate and equip families to have discussions about money. (Photo provided by the Minnesota Credit Union Foundation)
FIC is a committee of the Minnesota Credit Union Foundation. In the workshop, credit unions explored ways that they can fill the gap in fiscal knowledge that exists in today’s society. Led in part by nationally recognized speaker Nathan Dungan, the workshop focused on the importance of facilitating money conversations among credit union members of all generations. Dungan is the founder and president of Share Save Spend, an organization dedicated to helping families link their money decisions to their values. He emphasized credit unions’ role in engaging, educating and equipping families to have discussions about money. “Families today lack a value system to talk and teach about money,” Dungan said. “By playing an active role in helping members participate in money conversations, credit unions will begin to see healthy spending habits develop in their members.” Dungan said this would benefit credit unions in the long run. Participants investigated steps for increasing members’ financial literacy and explored techniques for marrying financial literacy tactics with their credit union’s strategic plan and vision. “Credit unions have the opportunity to instill lifelong money management habits across multiple generations,” said LeAnn Achtenberg, FIC chair. “The Start 2 Go Workshop provided credit unions with the tools to make financial literacy more than just an event. They left with a blueprint enabling them to give financial literacy a more strategic role within their organizations.” FIC is committed to enhancing the future of the credit union movement by supporting Minnesota credit unions’ efforts to provide financial education programs and encourage full-family involvement. Through the Start 2 Go program, FIC has assisted credit unions in increasing their financial literacy efforts through the development of kids, teens and senior citizens clubs.

CU System briefs (08/26/2010)

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* ORLANDO, Fla. (8/27/10)--Orlando-based Fairwinds CU has announced a multi-year partnership with the city's pro basketball team, the Orlando Magic (Orlando Business Journal Aug. 26). Under the contract, Fairwinds will maintain a presence in the city's new Amway Center and will offer an Orlando Magic-branded debit card. The deal also means Fairwinds can have digital signage, location sponsorship of the Amway Center's tower hospitality space, ATMs and on-court promotions. The Fairwinds Tower Room will be located on the promenade level of the arena. The team and the $1.5 billion asset credit union recently hosted an online contest for the new design of the official Orlando Magic debit card. New cards will be distributed this fall in Fairwinds' local branches as the exclusive Magic-branded debit card for the team's fans ... * ONTARIO, Calif. (8/27/10)--The Richard Myles Johnson (RMJ)
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Foundation/CUNA Mutual Golf Tournament Monday at Pechanga, Calif., raised more than $30,000 for the state foundation for California and Nevada credit unions. The event attracted 80 players and 14 sponsors, with Madison, Wis.-based CUNA Mutual serving as title sponsor. The support will enable the foundation to fund more community service grants to help credit unions with their youth financial education efforts, said RMJ Executive Director Tena Lozano. The tournament's winning group is, from left, Steve VanSickler of Visterra CU, Penny Sandifer of Pacific Marine CU, and Jim Plotkin of The Plotkin Group. (Photo provided by the California and Nevada Credit Union Leagues) ... * PORTLAND, Ore. (8/27/10)--As officials of Credit Union Miracle Day (CUMD), PSCU Financial Services and others looked on, the Tom Sargent Safety Center at Doernbecher Children's Hospital was formally dedicated in Portland, Ore. The center is named for Sargent, who recently retired as CEO of Beaverton-based First Technology CU. Sargent has been a long-time supporter of Credit Unions for Kids, which raises funds for Children's Miracle Network hospitals around the country. "This is a great tribute to Tom and a significant honor for the credit union movement," said Juri Valdov, chairman of CUMD. CUMD is the title sponsor of the annual Credit Union Cherry Blossom Ten-Mile Run in Washington, D.C., a nationwide fundraiser for the hospitals. PSCU Financial Services covers expenses for the annual event to ensure 100% of donations by credit unions go back to their area hospitals ...

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.

Participation loans spark lawsuit

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ORLANDO, Fla. (8/25/10)--A lawsuit that focuses on what happens to participation loans when the credit union that sold them is absorbed by another credit union has been filed in a U.S. District Court for the Middle District of Florida. Sperry Associates FCU, a $372.3 million asset credit union based in New Hyde Park, N.Y., filed the lawsuit Friday in Orlando. It alleges that it had bought nearly $4.5 million in participation loans from the now defunct Miami-based Eastern Florida Financial CU. It also alleges that the credit union that assumed Eastern Financial last year--the $3.2 billion asset Space Coast CU, Melbourne, Fla.--is responsible for the loans. Also named in the lawsuit are Eastern Financial's credit union service organization, CU Business Capital (CUBC) of Miramar, Fla., and its successor, Small Business America of Linthicum, Md. The complaint filed in court alleges that Eastern Financial FCU and South Florida Properties entered into a loan agreement on Oct. 18, 2006 for $22.4 million in a speculative land deal involving 120.7 acres appraised at $40 million in St. Lucie, Fla. in 2007. Sperry Associates FCU was sold an undivided participation totaling nearly $3 million in the SFP loan. Sperry also entered into a participation loan with Eastern Financial involving a $15 million credit agreement with King Credit Facility, the court documents said. Sperry paid $1.5 million for the King participation loan. The loans were underwritten by CU Business Capital. In early 2009, regulators placed Eastern Financial into conservatorship, and on June 23, 2009, Eastern Financial was merged into the Space Coast CU. The participation agreements "were in full force and effect as of the merger," said the complaint filed. "As a result of the merger, Space Coast succeeded to the rights, interests, obligations, duties, responsibilities, representations, warranties and liabilities of Eastern Financial under" the participation agreements, the suit alleged. The complaint also alleged that the National Credit Union Administration, as conservator of the failed credit union, made a payment to Space Coast on the participation loans, which were in default at the time of the merger. Sperry contends that Space Coast is required to turn over the portion of the participation loan allocations to the plaintiff.

A FCU shares savings tips for dorm life on FOX station

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AUSTIN, Texas (8/25/10)--Austin, Texas-based A+ FCU was a guest Tuesday morning on a well-timed show airing on My Fox Austin television about setting up a dorm room on a budget. Kelsey Balcaitis, community education specialist at the $764 million asset credit union provided eight tips for college students to save money while decorating their dorm room. Among the tips:
* Set a budget and stick to it. * Know the room's size and layout before moving in. * Make a list of everything you think you'll need. * Contact and coordinate with your roommate so there aren't duplicate TVs and microwaves. * Decorate your dorm on the cheap. * Know the dorm rules. "Some have no nails and no tape rules[for hanging things on walls]," said Balcaitis. * Shop for deals at rummage sales and thrift stores. * Become familiar with shops close to campus.
Balcaitis is a former intern at the Credit Union National Association (CUNA) and a CUNA Governmental Affairs Conference "crasher." She also blogs for CUNA's Gen Y publication, Money Mix. She and the show's host also briefly discussed the credit union's student-run branches unions in area high schools, prompting the host to say, "Good idea." To view the broadcast, use the link.

Op-ed CUs can help ease businesses in credit squeeze

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SAN JOSE, Calif. (8/25/10)--Today's small-business owners and entrepreneurs are facing an unprecedented credit squeeze, but credit unions could help ease the crisis at no cost to taxpayers if credit unions' member business lending cap were raised, said a credit union CEO in an op-ed published in the Silicon Valley/San Jose Business Journal (Aug. 13). In "Higher business lending cap is a win-win," Barbara Kamm, president/CEO of San Jose, Calif.-based Technology CU, wrote small businesses and startups need access to capital so they can invest in infrastructure, equipment and supplies, or hire the personnel they need to grow their businesses. The article cites Credit Union National Association estimates that raising the cap could extend up to $10 billion in additional business loans to small businesses and help create as many as 108,000 jobs. "Here in California, raising the cap would infuse an estimated $1.9 billion in capital into small businesses and startups--potentially producing 20,000 new jobs," wrote Kamm. "Credit unions offer an alternative source of financing. During the same 12-month period that business loan growth among banks decreased by 15%, credit union business lending grew 11%, but that growth has started to slow as more and more credit unions approach their caps," she wrote. "Raising the cap poses no harm to community, regional or national banks, considering that credit unions hold just 4.5% of all small-business loans at depository institutions. Even if credit unions doubled their share of business loans, banks would still hold 91% of the market," she said. "The simple truth is small businesses need access to financing so they can survive, prosper and create more jobs, but banks are not currently lending to businesses at a rate that satisfies the needs of the market. Credit unions have untapped, critical resources they could provide at no cost to taxpayers. Raising the business-lending cap is a win-win all around," Kamm concluded. For the full article, use the link.

CU in Kansas tells House hearing of need for fin ed

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LAWRENCE, Kan. (8/25/10)--Credit unions are creating positive solutions to the problems caused by financial illiteracy in today's economy, but there are two areas where financial literacy can improve, a Wichita, Kan.-based credit union told a House subcommittee hearing Tuesday. Chris Wolgamott, community development liaison at Wichita-based Meritrust CU, appeared before the House Financial Services Committee's subcommittee on oversight and investigations, in a hearing in Lawrence, Kan., on "Empowering Consumers: Can Financial Literacy Education Prevent Another Financial Crisis?" Subcommittee chairman is Rep. Dennis Moore (D-Kan.)
Click to view larger image Kansas Credit Union Association President Marla Marsh and Lenexa, Kan.-based Mainstreet CU President/CEO John D. Beverlin Sr. testified on credit unions' strength during the recession and how credit unions have helped members while facing rising regulatory burdens during Monday's hearing in Overland Park, Kan., of the House Financial Services Committee's subcommittee on oversight and investigations. (Photo provided by Kansas Credit Union Association)
The hearing is the third in an "End of Excess" series and the second one to meet in Kansas. Monday, Kansas Credit Union Association (KCUA) President Marla Marsh and Lenexa, Kan.-based Mainstreet CU President/CEO John D. Beverlin Sr. testified about how credit unions have weathered the recession and helped members while facing increasing regulatory burdens. Noting that financial literacy encompasses a broad range of topics and spans a lifetime of learning, Wolgamott outlined the need for financial literacy programs, citing statistics from studies about Americans' problems with budgeting and saving and debt. Credit unions' principle of "People Helping People" is evident at both the state and national level in financial literacy, he said, adding that in the past year, credit unions reported to the National Youth Involvement Board they conducted 13,577 presentations nationwide to more than 413,000 youth, a 6.3% increase in the number of students reached. Credit unions in Kansas instructed more than 6,000 students. He highlighted KCUA's partnership with the former state treasurer to create a Money Smart Financial Camp, Meritrust CU's involvement with a Communities in School Reality U program, and the credit union's partnerships with local social organizations. "We are the only credit union in the state with a full-time paid position dedicated specifically to financial literacy, which shows our organizational commitment to improve the financial lives of those we serve," Wolgamott said. Providing financial literacy for adults remains a struggle. "It is easier to reach adults at their place of employment or by partnering with an organization they are currently affiliated with than offering classes at retail branches," he said. It also is difficult for some schools to find time to allow guests to present topics that may or may not teach exactly to a education standard. "Building a connection between schools and financial institutions is a tremendous benefit to both organizations," he said. The credit union industry is currently providing many opportunities, both locally and nationally, to strengthen the financial position of many, using their cooperative and member-centric ideology, he added.

Patelco to move headquarters out of San Francisco

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SAN FRANCISCO (8/25/10)--Patelco CU, San Francisco, has decided to move its headquarters to Pleasanton, Calif. The $3.65 billion-asset credit union expects to complete its move to Pleasanton in February, said Ken Burns, Patelco CEO (The Contra Costa Times and Oakland Tribune Aug. 24). About 150 employees will move to then new site, the article said. Patelco looked at 75 to 100 office buildings before it settled on its new building. Patelco will establish a long-term presence in Pleasanton once the lease is finalized and signed, Burns said. The credit union intends to rent the offices for 15 years, he added. “This is very compelling for us financially, in terms of signage, growth potential, parking, visibility, all of the things you would look for in a long-term facility for a corporate presence,” Burns told the paper. Access to public transit also is a big factor, Burns added. A branch that is part of the credit union’s San Francisco headquarters will move to a nearby location. “That branch presence in San Francisco will remain,” Burns told the paper.

Texas foundation takes financial literacy to Belize

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FARMERS BRANCH, Texas (8/25/10)--Courtney Nickles, executive director of the Texas Credit Union Foundation, traveled to Belize last week to lead two all-day workshops organized by several mission-driven organizations to help provide financial literacy and empower young people by teaching better decision-making skills. The workshops were geared to providing teachers and credit union educators with tools and information to institute financial education training in schools and communities, the foundation said. Nearly 50 teachers and participants discovered supplementary ideas and methods to bolster their financial literacy programs, said Carol Babb, deputy chief educations officer with the Belize Ministry of Education and Youth. “We are hoping that with this training, our teachers will develop some new ideas and strategies that will improve that aspect of the curriculum,” Baab said. “They were given a module, and we are hoping that they will take back that module along with the knowledge and skills that they have learned and do training with their staff, and then that information will be passed on to our students.” Using the National Endowment for Financial Education High School Financial Planning Program (NEFE HSFPP), a seven-part training curriculum, Nickles provided an approach detailing every aspect of money management--from saving early to writing checks. Educators and presenters from NEFE, the Belize Credit Union League, and Holy Redeemer CU in Belize City, Belize, also participated in the workshop held at the Institute for Technical and Vocational Education and Training in Belize City. The workshops, held Aug. 17 and 18 educated teachers in southern Belize districts about the necessities surrounding financial comprehension and management.

IDetroit Free PressI New bank fees near expect flight to CUs

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DETROIT (8/25/10)--New government financial regulations to protect consumers are causing many U.S. banks to institute new fees to offset losses in overdraft, credit card and other fees. The increase in fees will cause a consumer flight to credit unions, the Detroit Free Press said Tuesday. To date, roughly 20% of U.S. banks, including TCF Bank and Fifth Third, are no longer providing free checking accounts, according to Michael Moebs, who heads up a Lake Bluff, Ill.-based financial services firm. “The initial thrust to all this is it’s going to be costly to the consumer,” Moebs told the newspaper. Meanwhile, that increase in fees will drive people to nonprofit credit unions, analysts predicted. “That has already happened with Vanessa Daniel, a commodities buyer at the MGM Grand Detroit,” the paper said. “The 53-year-old Detroiter said she had been a customer of Chase Bank since 1995 but closed her account six months ago, fed up with high overdraft fees and other charges. “Daniel switched to Communicating Arts CU in downtown Detroit, where she no longer has to worry about overdraft fees,” the paper added. “Becoming a credit union member is ‘the best thing I've ever done,’” she told the paper. To read the article, use the link.

Volunteer Corporate elects new board members

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NASHVILLE, Tenn. (8/25/10)--Volunteer Corporate CU, Nashville, Tenn., announced the Aug. 19th election of three members to serve three-year terms on its board of directors. The three elected are:
* John Jacoway, executive vice president/chief financial officer, Southeast Financial CU, Franklin, Tenn.; * Gary W. Land, CEO, Chattanooga (Tenn.) Area Schools FCU, and * Bonnie Sensing, CEO, Nashville Firemen’s CU.
The election of officers for the coming year was held immediately after the annual meeting. Officers for the coming year are:
* Chairman--Hank Flury, CEO, Cornerstone Financial CU, Nashville; * Vice-chairman--Ken Swann, CEO, City of Memphis (Tenn.) CU; * Secretary--Karen Jordan, CEO, P&G CU, Jackson, Tenn., and * Treasurer--Jacoway.
Other board members include Mike Haggard, HealthNet FCU, Cordova, Tenn.; Wade Stapleton, Lifeway CU, Nashville, and Rose Melton, Altra FCU, Onalaska, Wis.

Dykstra named CaliforniaNevada league presidentCEO

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ONTARIO, Calif. (8/25/10)--Diana Dykstra has been named the new president/CEO of the California and Nevada Credit Union Leagues, effective Oct. 18. Dykstra, who has more than 30 years' experience in the financial services industry, has served as president/CEO of San Francisco Fire CU since August 2004. She succeeds Bill Cheney, who is now president/CEO of the Credit Union National Association. Former league president/CEO Dave Chatfield returned to the league in an interim role on July 6. "The league conducted an extensive search for candidates whose breadth of credit union experience is best suited to lead the leagues in moving forward as we address the current and future challenges in our two states," said California league board Chairman Jeff York, CEO of CoastHills FCU, Lompoc, Calif. "Diana was highly recommended by the search committee and unanimously approved by the league Executive Committee and Board of Directors," York added. Wally Murray, chairman of the Nevada league and CEO of Greater Nevada CU, Carson City, Nev., noted Dykstra's "passion and strong leadership skills will be welcome additions to the Nevada credit union family as we continue seeking creative ways to meet consumer needs during this challenging period." Under her leadership, San Francisco Fire CU, which serves 27,000 members with assets of more than $670 million, achieved wide recognition for innovative products and services, and for consumer satisfaction. She previously was president/CEO of CoastHills FCU, and led its team through a name and branding change. Dykstra also previously served as senior vice president of San Francisco-based Patelco CU, where she was responsible for developing market education programs, and CEO of its credit union service organization operations. Previously she worked for The Golden 1 CU, Sacramento, and was responsible for consumer lending, statewide services, real estate, collections and marketing. There she helped develop a prototype for funding loans with auto dealers, which is now the Credit Union Direct Lending (CUDL) program. A 1992 graduate and a current instructor at Western CUNA Management School, Dykstra was recipient of the James D. Likens Alumni Recognition Award. She received the California league's Distinguished Service Award in 2002. A past chairman of CUDL and the California league, Dykstra currently serves on the league's board of directors. She also is vice chair of Prime Alliance Solutions and is board chairman of O'Rourke and Associates.

Kansas CUs describe CUs role reg burdens to subcommittee

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OVERLAND PARK, Kan. (8/24/10)--The Kansas Credit Union Association and Lenexa, Kan.-based Mainstreet CU testified Monday about how credit unions have stayed strong through the recession, helping members while facing increased regulatory burdens, during one of two hearings held in Kansas this week before a U.S. House Committee on Financial Services' subcommittee. Marla Marsh, president of the Kansas Credit Union Association (KCUA), and John D. Beverlin Sr., president/CEO of Mainstreet CU, testified during Monday's hearing before the subcommittee on oversight and investigations, which is conducting a series of "End of Excess" hearings. Chairman of the subcommittee is Dennis Moore(D-Kan.). Both noted that credit unions have a strong role to play in the financial services marketplace, urging Congress to recognize the challenges faced by credit unions as they address increasing compliance burdens and to allow flexibility and increase options for credit unions to continue to serve members and put capital back into the economy. They encouraged Congress to increase credit unions' member business lending cap to 27.5% of assets from the current 12.25% limit--at no cost to taxpayers. Marsh noted that Kansas credit unions are generally healthy and well capitalized, but "they have not been immune from the effects of the downturn." She cited statistics on how Kansas credit unions stand out when compared with their credit union peers and banks. "We hope the committee will be mindful of and will monitor how the new Dodd/Frank law is implemented, including the overall impact new and current regulations will have on the operations" of credit unions, she said, citing two risks. "The greatest risk for credit unions comes from the collateral damage caused by the 'too big to fail' institutions," she said. The second "is the rise in regulatory burden and examiner 'one size fits all' approach that stifles our efforts to do what we do best--provide solutions to meet the financial needs of our members and help grow local economies," Marsh told the subcommittee. A number of lessons can be learned from the state's credit unions, she said. The key lesson: "relationships matter. The biggest difference between the Wall Street business model and the credit union business model is the member ownership component," Marsh said. She also noted credit unions' focus on making decisions that are in the mutual best interest of both parties and their solid underwriting processes. In his testimony, Beverlin discussed how his credit union's auto loans increased 195% and mortgages rose 75% last year. "It was not because more members felt confident in their future; it was a result of larger lenders exiting the lending market." Mainstreet CU survived 2009 because of its conservative approach to business and diversified loan portfolio and because the nature of a member-owned credit union is to "work with members when they are faced with financial difficulty," Beverlin said. "What was unique for us this past year and what will pose additional concerns for us in the future are legislative and regulatory burdens," he told the subcommittee. While there is agreement that Midwest banks and credit unions did not cause the financial crisis, "we all seem to be grouped together when any attempt is made to look for solutions to the crisis." Legislated changes impacted the credit union's credit card portfolio. "While not one of the abusers of fees on overdraft protection, we spent almost $50,000 educating our members because of the imposed regulatory change. The recent passing of financial reform legislation with an amendment on debit/credit card interchange will result in additional lost revenue," he said. "We are concerned with where it will all stop." He noted one area credit unions can help in the future: member business lending. Because of the arbitrary business lending cap of 12.25%, Mainstreet CU, which doesn't do business loans, finds it "hard to justify putting everything needed in place with the cap at the current level." "The impact of these regulatory changes will ultimately fall on the shoulders of our members and Kansas consumers." Yesterday's hearing was in Overland Park. Today's hearing, which is in nearby Lawrence, will feature testimony from Chris Wolgamott, Meritrust CU community development liaison.

Hannaford Associates FCU to merge with Alliance of Maine FCU

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SCARBOROUGH, Maine (8/24/10)--Two Maine credit unions--Hannaford Associates FCU, a $31 million asset credit union in Scarborough, and Alliance of Maine FCU, a $30 million asset credit union based in Augusta--plan to merge on Oct. 1 and take on a new name--Trademark FCU. Alliance of Maine members voted in late June in favor of the merger proposal. "Unlike the typical merger, this proposal represents a very rare opportunity to form a true partnership with one of the few remaining organizations solely dedicated to serving employee groups and their families," said Alliance of Maine earlier this summer when it announced the vote results on its website. "Our relationship with our members is the single most important aspect of our business and it's the principle that guides our every decision. We were fortunate to find a group of people who are similarly committed to the same principle," the credit union said. Hannaford serves employees and families of the Hannaford Bros. grocery store chain. Alliance of Maine formerly was Central Maine Power Employees FCU. Trademark FCU's headquarters will be in Augusta, with branches in Scarborough, New Gloucester, and Portland.

Prairie Trail CU acquired by Argonne CU

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ROMEOVILLE, Ill. (8/24/10--Members of Prairie Trails CU, Joliet, Ill., voted to merge with Argonne CU, Romeoville, Ill., effective Sept. 1. The combined credit union will be one of the largest in the state with more than $260 million in assets and more than 25,000 members. Headquarters for the new organization will be in Romeoville with no reduction in employees (Joliet Herald News Aug. 22). The combined credit union will have branches in six area cities and two area high schools, and limited-access branches for employees of two local companies. Brian Cedergren, Argonne CEO, will be the president/CEO of the combined credit union, and Matt Thraen, Prairie Trail CEO, will be the president of the Joliet Division, the paper said.

Kern Schools FCU cuts seven positions

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BAKERSFIELD, Calif. (8/24/10)--Kern Schools FCU, based in Bakersfield, Calif., cut seven employees Aug. 16 in a cost-cutting move that leaves the credit union with 460 employees. Each of the layoffs, ranging from financial services officers and branch operations staff to the vice president of real estate and business lending--a position that was eliminated-- received a severance package, said Steve Renock, Kern Schools FCU president/CEO (The Bakersfield Californian Aug. 20). The layoffs came about because the credit union is dealing with the recession’s aftermath in the form of defaulted loans and a decline in loan demand from its members. In the first half of 2010, the credit union lost $16 million, following a $40.6 million loss in 2009, the newspaper said. “We’re expecting to have a better year this year than last year, but the financial conditions in [the area] still are troubling,” Renock told News Now. If Kern Schools’ lending volume declines again, the $1.58 billion-asset credit union will need to make more layoffs, Renock told the paper.

25 companies including two CUs sued for patent infringement

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MARSHALL, Texas (8/24/10)--A Longview, Texas, company that has a patent for the "method and apparatus for creating and ordering customized branded merchandise over a computer network" has sued 25 major companies--including two credit unions--for alleged infringement of its eight-year-old patent for the process. The case--filed Aug. 12 in the U.S. District Court for East Texas in Marshall, Texas-- would have ramifications for retailers, banks and credit unions, credit card companies, and others offering customized branded merchandise on their websites. For credit unions, the process relates to customized debit and credit cards. Quark Images LLC, the company that filed the suit, has named as defendants some major entities such as Adidas, Capital One Financial Corp., Discover Financial Services, Hallmark Cards Inc., Mars Inc., Nike Inc., Zions Bancorporation, Reebok, and Ralph Lauren, among others. The two credit unions named are America First FCU, Riverdale, Utah, and Pasadena, Calif.-based Wescom CU. Quark Images is also suing Serverside Group Ltd., an British company with stateside headquarters in New York. Serverside provides card customization technology allowing credit unions, banks and card companies through its website, according to the complaint filed. Also named as a defendant is PAYjr, which provides customized stored-value cards, and Shoreline Business Solutions, a Connecticut-based partner of Serverside. The suit, which asks for a jury trial, seeks permanent injunctions to stop the use of the method and is seeking damages, costs, expenses and prejudgment and post-judgment interest.

SECU Foundation 5M gift largest by CU

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RALEIGH, N.C. (8/24/10)--State Employees’ CU (SECU) says the SECU Foundation, Raleigh, N.C., will contribute $5 million--the largest donation it is has ever made--toward construction of a cancer center at a local hospital. SECU will contribute the money to help build the 120,000-square-foot center--which will feature the credit union’s name--at Mission Hospital (Asheville Citizen-Times Aug. 21). The center will be completed in early 2012, the newspaper said. “We are trying to do projects across the state that can be duplicated in other areas,” Shirley Bell, chairwoman of the SECU Foundation board, told the paper. “We are helping all citizens by this center being here.” The five-level building and a 300-space parking deck will provide one location for all the hospital’s outpatient cancer services. Then, patients won’t need to travel to different locations for chemotherapy treatments, CT scans and office visits, the paper said. About 800,000 SECU members statewide contribute $1 to the foundation each month, the paper said. The foundation gives grants to projects statewide.

IWall St. JournalI Fire your banker CUs among options

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NEW YORK (8/24/10)--Consumers looking for ways to make their money work better for them should fire their bankers and look to credit unions and other local institutions, according to an article in The Wall Street Journal Sunday. In “Ten Money Moves That Will Always Pay Off,” author Brett Arends wrote that credit unions will do more for less. “Fire your banker,” Arends writes for Money Move No. 5. “This isn't just good financial sense--it’s fun, too. If you’re like most people, you're probably paying hundreds of dollars a year in account service fees, ATM charges for access to your own money and the like. “Banks need to sock you with these fees to pay for all their overpriced and useless overhead, like the expensive marketing campaigns and the executives,’ he added. “Fire them all. Chances are you have a local community bank, savings and loan, or credit union that will do the job of looking after your cash for a lot less. It’s Uncle Sam, not the institution, that guarantees your money anyway.” To read the article, use the link.

CU System briefs (08/23/2010)

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* ST. LOUIS, Mo. (8/24/10)--Vicki Sanville and Tom Brown from the office of U.S. Rep. Sam Graves (R-Mo.) met with Kansas City credit
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unions Aug. 18 and touted the importance of communication. "We get about 250 pieces of correspondence every day, and if I see a letter from someone I know, I put it high on my priority list because I know you," said Sanville. "Your communication during good times and bad keeps us informed and keeps your issues at the forefront." They told attendees their effort to meet in-district helps credit union initiatives, but also suggested visiting Washington, D.C., because "it does help you get the attention of Congress," Sanville said. Credit union leaders communicated concerns about member business lending, the interchange fee provision in Congress' regulatory reform bill, and overdraft protection. "Member business lending is one of the few issues that comes without a price tag," said Rob Givens, Mazuma CU. "Our member business lending has injected $50 million into Kansas City businesses in the past five years," he said. From left are: first row: Chris McCreary, United Consumers CU; Brown; Sanville; and Dennis Pierce, CommunityAmerica CU. Second row: Sean Yokley; Lisa Ginter, CommunityAmerica; Givens; Ron Miller, Edison CU; and Pat Yokley, Dick Baumgartner, Serri Helm, Rod Gruenberg and Jean Hughes of CommunityAmerica. (Photo provided by the Missouri Credit Union Association) ... * MENTOR, Ohio (8/24/10)--Christine Blake, has been named president/CEO of Cardinal Community CU, Lake County, Ohio's, largest credit union. Blake, a certified public accountant, previously served as a business adviser and consultant specializing in financial institutions. Her experience included audit services, mortgage banking, merger and acquisition assistance, reengineering services, project management and compliance. . She previously was a senior manager with KPMG Peat Marwick LLP in Washington D.C., and Cleveland, Ohio, where she specialized in financial services. She also was an adjunct professor at Lakeland Community College for several years. Blake also is president/CEO of the Samantha Blake and Michael DeGennaro Family Foundation, which provides support to children with hydrocephalus and Wilm's tumor, and their families ... * CEDAR RAPIDS, Iowa (8/24/10)--Cedar Rapids, Iowa-based Linn Area
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CU Executive Vice President Jenny Lorenz is a recipient of the 2010 Governor's Volunteer Award (GVA) for her involvement and leadership with the Iowa Credit Union Foundation (ICUF) board of directors. The GVA program recognizes volunteers for their commitment, service and time. It goes to volunteers demonstrating exceptional commitment to volunteerism, exemplary leadership, creativity, cooperation and hard work in service to others; and who made an outstanding contribution to state or community through volunteer service. Lorenz, shown accepting the award from Iowa Gov. Chet Culver, has served as a volunteer board member of ICUF for more than 10 years and is currently president of the board. (Photo provided by the Iowa Credit Union Foundation) ...

Utah league becomes Utahs CUs

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SALT LAKE CITY (8/23/10)--The Utah League of Credit Unions has changed its name, logo, and the address to its website. Its new name is "Utah's Credit Unions." The official corporate name of the trade association will be the Utah Credit Union Association, but it will refer to itself as Utah's Credit Unions when communicating with consumers and the media, the association said in a press release Friday. Association officials believe that average consumers will care more about their individual credit union has to say than they do a trade association, the press release said. "I tell people I work for the league, and many of them request clarification," said Utah's Credit Unions President Scott Simpson. "I have to explain that I work for all of Utah's credit unions as a group. We feel current market trends support simple, direct messaging, so that is the direction we have chosen." When the association was established in 1935, the term "league" was used widely to describe a group of people, businesses or countries that came together for mutual protection and cooperation, but now it's mistaken for a sports term, Simpson told The Salt Lake Tribune (Aug. 20). The association has used "Utah's Credit Unions" in the past, most recently in a well-received branding campaign whose logo and tagline were "Utah's credit unions. The Difference. You." It also used the phrase in its earlier "Utah's Credit Unions, the People's Choice" campaign, the release said. The association's board had been considering a name change for about a year. It is following a trend set by other leagues that have dropped the "league" and added "association" to their names. Utah's Credit Unions' new website address is www.utahscreditunions.org.

Two CUs receive first-place Calif. Desjardins awards

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RANCHO CUCAMONGA, Calif. (8/23/10)--Two California credit unions received first-place in their asset categories in the state-level Desjardins Youth Financial Education Awards, announced the California Credit Union League. Travis CU, Vacaville, and Mission SF FCU, San Francisco, were recognized for their leadership on behalf of youth financial literacy. Travis won in the $500 million and above asset category for its collaboration with a community leader coalition to connect Solano County foster youth by age 25 to opportunities to help them succeed as adults. It provided financial responsibility tools through the Money Matters program and helped 50 youth become more financially stable with training and a savings account. Mission won in the less than $50 million asset category for its Prize-linked Accounts for Youth (PLAY) program. PLAY provided children and youth with a free savings account and hands-on instruction in personal finance and building a savings habit. Five youth groups and about 50 youths participated in a pilot program this year. Each youth set a personal savings goal and learned finance basics. The credit unions reached out to an underserved and low-income population in need of financial literacy education, said Catherine Arra, league credit union growth manager and state Desjardins Award administrator. The two credit unions will advance to the national award competition presented by the Credit Union National Association. A third credit union, Redwood CU, Santa Rosa, received an honorable mention in the $500 million and above category for providing the National Endowment for Financial Education's High School Financial Planning Program to area high school students.

IMarketWatchI on refinance scams advises Join a CU

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CHICAGO (8/23/10)--A MarketWatch article warning consumers about loan-modification and auto refinance scams told readers having trouble with their auto loans to "Join a credit union." Thursday's Consumer Confidential column by Jennifer Waters described an Illinois man who got scammed by an auto finance company claiming it could reduce his $700 a month car payment to about $400 a month. His initial contacts with the company were easy, but after he paid a couple of fees, the company essentially disappeared. He took the matter to the Better Business Bureau, which helped him get an apology and his money back. The company has gone into receivership and is no longer doing business, said the article. The bureau is warning consumers to be picky and do the legwork before signing up for a company that claims it can get them out of a bad deal, the article said. "Instead, try a credit union, a group like CARS, the Consumer Federation of America or the National Foundation for Credit Counseling," said Waters. She offered several tips, including joining a credit union. "For the $5 or so membership fee, you can have your credit union review the loan and offer advice," she wrote. For the full article, use the link.

IMainstreet.comI Banks boost biz lending to keep CUs out

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WASHINGTON (8/23/10)--A blog on Mainstreet.com about credit unions' call to lift the cap on small business lending notes that big banks have begun lending more to small business to keep credit unions from business lending. Credit Union National Association President/CEO Bill Cheney says raising credit union's member business lending limit to 27.5% from 12.25% would pour $10 billion into the small business economy, creating 108,000 jobs in 2011, said the article, entitled "Credit Unions Call for Small Biz Lending Lift." While Congress "seems open to" the idea of lifting the member business lending cap as proposed in Sen. Mark Udall's (D-Colo.) amendment to the small business jobs bill, the "big banks don't like the idea," said the blog. "Bank of America and Wells Fargo have already started lending more to small businesses. So critics can say any move to raise lending limits for credit unions wouldn't have the impact CUNA says it would," the item said. "Raising the current cap on credit unions' business lending is an action which would benefit only half of one percent of all credit unions in the nation," said Rose Oswald Poels, senior vice president and counsel of the Wisconsin Bankers Association, the article reported. "Credit unions historically have not been big lenders to small business--CUNA estimates that only 23% of all U.S. credit unions offer commercial lending services," she added. The report cites a National Small Business Association study that indicates 41% of business owners can't get financing, an increase over the 22% who couldn't get financing in 2008. It also discusses points made in a recent CUNA white paper that cites "problems with the current small business financing framework in place, largely built by big banks." The points made:
* Commercial banks have no such business lending limits, and safety and soundness concerns are unfounded; * Small businesses find it increasingly difficult to obtain credit due to massive consolidation in the commercial banking arena, and those who obtain credit complain the banks' loan terms are less attractive; and * Current member business lending limits deter new entry into business lending.
For the full article, use the link.

IEntrepreneurI CUs come to the rescue on biz loans

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WASHINGTON (8/23/10)--When their bank slashed the credit limit on their business credit card despite on-time payments, the partners of WheretoFindCare.com, a Ypsilanti, Mich., healthcare information service, moved their accounts to a local credit union and found all the services the small business needed, according to Entrepreneur magazine (Aug. 20). There, they found all the services the small business needed, said the article, entitled, "Credit Unions to the Rescue?" Another small business owner, Tom Hoebbel of Brooktondale, N.Y., described how a loan from his credit union enabled him to expand his photography business to online video services. Hoebbel needed $25,000 to purchase new equipment and found the loan his county offered took too long. The credit union helped Hoebbel apply for an interim Small Business Administration loan. This let me move much more quickly [into Web-based video sales] than if I had to wait for the county loan, which ended up taking more than nine months," he told the publication. Hel decided to work with the credit union because of its free business checking services, which saves him $15 to $20 a month, and because if offered a 12-week business course to its small-business members. Credit union lending to members for business purposes is a fast-growing segment, up 10% in 2009, Pat Keefe, vice president of communications and media outreach at the Credit Union National Association (CUNA), told the publication. The average loan is $220,000 and credit unions are limited to lending 12.25% of their assets, but a measure in Congress would increase that limit and pour $10 billion in new loans into small businesses, he said. The level of personal service that Hoebbel got is a definite advantage of credit unions, said Keefe, who noted credit unions' lower rates and stringent lending standards. In 2009, credit unions had a lower charge-off rate in business loans than banks, 0.59% vs. banks' 2.36%, he added. CUNA provided other statistics for the article, and the article referred readers to CUNA's credit union locator. For the full article, use the link.

CUs small loans build N.C. Latino businesses

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DURHAM, N.C. (8/23/10)--Latino Community CU (LCCU) in Durham, N.C., is trying to help accelerate the growth of Latino entrepreneurship in the area by introducing a microlending program to increase the number of small businesses. The $91.5 million asset LCCU--known as La Cooperativa Latina de Credita in Spanish--wants to demonstrate that Latino businesses are a good investment because they usually provide basic services that are barely affected by fluctuations in the economy (newsobserver.com Aug. 17). The credit union loans up to $10,000 and avoids high-risk businesses such as restaurants. Instead, it opts for businesses with lower overhead such as construction, janitorial and landscaping services, the newspaper said. “I would hope that what we are doing is not so strange but is normal,” Alejandro Sanchez, LCCU organizational development director, told the publication. “The whole society, in one way or another, needs [the small businesses].” Lack of credit history was one of the greatest barriers for Latino startups, according to a 2006 study conducted by the University of North Carolina’s Kenan-Flagler Business School, the paper said. LCCU’s backing by State Employees’ CU (SECU), Raleigh, N.C., and Self-Help CU, Durham, has made it a national model, according to credit union executives nationwide, the paper reported. SECU provides accounting, auditing and ATM and data-processing access. Self-Help lent technical assistance and affordable rent to LCCU when it started 10 years ago. To read the article, use the link.

Superior CU offers accounts for Kitty Fido

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COLLEGEVILLE, Pa. (8/23/10)--Superior CU, Collegeville, Pa., is offering savings products for pets. Superior CU is offering pet savings accounts with a 5% annual percentage yield on the first $500. A $5 deposit is required. Even though dogs don’t have Social Security numbers, the credit union is still opening accounts for them with their owners, said Joseph Gimble, vice president of operations (Pottsmerc.com Aug. 19). The accounts are available for any pet, including dogs, cats, horses and birds. Members are asked to bring a photo of their pet as identification when they open an account. The photos will then be added to a gallery on www.BankwithBella.com. Superior’s new site, www.BankwithBella.com, has information about its pet accounts, low-interest pet loans for pet-related business--like a vet bill--and discounts for pet insurance. The site is named after Bella, the program’s mascot. Bella is a beagle/lab mix who belongs to Kim Miller, Superior CU lifestyle adviser and who goes to work with Miller each day. Members can upload pictures of their pets to the website, read Bella’s blog and learn more about pet-related services at the credit union (Life is a Highway Aug. 20). Pets also are welcome at Superior’s offices. The $37-million-asset credit union gives away dog treats and doggie bags with water dishes and food. Superior also plans to open a dog park that will be available to the community.

Three re-elected to New Jersey league board

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HIGHTSTOWN, N.J. (8/23/10)--Three incumbents were re-elected to the New Jersey Credit Union League board of directors last month. Each of the three incumbents was unopposed (The Daily Exchange Aug. 20). They are:
* Tracy Sussman, Mid-State FCU, Carteret, for tier A; * Louis Vetere, Garden Savings FCU, Parsippany, for tier B; * Leo Ardine, United Teletech Financial FCU, Tinton Falls, for tier C.
The election results will be formally announced at the league annual meeting.

75 of Wisconsin voters polled support lifting MBL cap

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PEWAUKEE, Wis. (8/23/10)--The majority of Wisconsin voters polled by the Wisconsin Credit Union League--75%--say they would support an amendment before Congress to make more credit available to Wisconsin companies through credit unions. An even larger majority of those polled--84%--say they’d be more likely to support the measure knowing it would create $389 million of new credit for Wisconsin firms, add 4,229 jobs in the state and cost taxpayers nothing. The league was referring to an amendment by U.S. Sen. Mark Udall (D-Colo.) to the Small Business Lending Fund Act, H.R. 5297, which is stalled in Congress. The Udall amendment would raise the cap on credit unions’ member business lending to 27.5% of assets from 12.25% of assets. Federal regulators support the measure, in part because of credit unions’ history of responsible business lending, said the league. As of March, the delinquency rate for Wisconsin credit union business loans was 2.23% compared with banks’ 2.77%. Credit unions’ loss rate--at 0.43%--was 30% lower than that of state banks, said the league. The measure would be a boon for small businesses with modest credit needs that find it difficult to find financing, the league said. Credit unions often will grant smaller loans. The average credit union business loan in Wisconsin is just $174,772. Most credit union business loans go to households with incomes below $50,000. The Wall Street Journal reported in March that bank lending has declined at the sharpest rate since 1942. In Wisconsin, banks’ business lending decreased 19% from March 2009 to March 2010. During that period, Wisconsin credit unions increased their business lending by 11%, but many have maxed out what they can lend to businesses because of the federal cap. Udall’s amendment mirrors legislative language sent to federal lawmakers by the Treasury earlier this year, and is backed by the Obama administration. The Credit Union National Association supports raising the cap.

Minnesota names Maxwell Herring Desjardins award winners

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ST. PAUL, Minn. (8/23/10)--The Minnesota Credit Union Network (MnCUN) has announced its statewide winners of the 2010 Dora Maxwell, Louise Herring and Desjardins competitions. All three awards are sponsored by MnCUN and the Credit Union National Association. Winners of the Dora Maxwell Social Responsibility Award are:
* Star Choice CU, Bloomington, $20 million to $50 million assets category; * Greater Minnesota CU, Mora, $100 million to $200 million; * TopLine FCU, Maple Grove, $200 million to $500 million; and * Central Minnesota FCU, Melrose, more than $500 million.
Winners of the Louise Herring Award for Philosophy in Action are:
* Star Choice CU, less than $50 million in assets; and * Affinity Plus FCU, St. Paul, more than $250 million.
The Desjardins Youth Financial Education Award was won by Greater Minnesota FCU, in the $150 million to $500 million asset category. “This year, credit unions around the state were dedicated to helping Minnesotans persevere through the economic recovery,” said Mark D. Cummins, MnCUN president/CEO. “The 2010 award winners demonstrated extraordinary dedication to helping their members and communities move forward toward a brighter future.”

Crashers meet in New York

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ALBANY, N.Y. (8/23/10)--Fifteen young credit union professionals gathered in Albany for its first-ever Crash meet-up at the state level. It was coordinated by the Credit Union Association of New York’s Young Professionals Commission (YPC).
Click to view larger image Fifteen young credit union professionals gathered in Albany, N.Y., for the state’s first Crash meet-up. The event was coordinated by the Credit Union Association of New York’s Young Professionals Commission. (Photo provided by the Credit Union Association of New York)
Crash is the brainchild of Brent Dixon, young adult adviser at the Filene Research Institute. Crash started as a subversive conference for credit union professionals under 30 that met around conferences such as the Credit Union National Association’s (CUNA) Governmental Affairs Conference and The 1 Credit Union Conference, which was jointly sponsored by CUNA and the World Council of Credit Unions in July. After conversations with a group of “crashers,” Dixon realized that for Crash to work as a place where young professionals could get together to learn, network and converse with little financial commitment, there had to be movement on local levels. At the meet-up, Dixon offered an overview of Crash and information about WOCCU and Filene. Allison Barna, the association’s community development coordinator, led a conversation about the credit union community. She pointed out that credit unions are not just local; they also are national and global, and the movement presents numerous opportunities for involvement. Participants expressed a desire to see what is going on outside of their credit unions, and to use similar networking and sharing opportunities to help find their niche in the movement and potential career opportunities. The association plans more Crash meet-ups statewide, including a second one in Albany. The gatherings are free to participants with support from state association chapters. The YPC was formed earlier this year to develop strategies and practices to assist the association and credit unions in recruiting young adults as employees and volunteers. It also aims to develop and promote them for leadership positions within the New York credit union community. The commission includes about 30 credit union employees under the age of 35 from across the state.

CDFI Fund recipients Fund will help biz loans

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NEW YORK (8/23/10)--Thursday's announcement that 21 credit unions were among the 180 community development financial institutions (CDFIs) to receive CDFI Fund awards means that credit unions can step into more business lending since banks have stopped lending, said one of the award recipients.
Click to view larger image The National Federation of Community Development Credit Unions was among the recipients of the U.S. Treasury's Community Development Financial Institutions (CDFI) Fund awards in New York Thursday. From left are: U.S. Rep. Jose Serrano, U.S. Rep. Nydia Velazquez, federation President/CEO Cliff Rosenthal, and Treasury's CDFI Fund Director Donna Gambrell.
The U.S. Treasury Department's CDFI Fund announced $104.9 million in awards to 180 CDFIs at a restaurant financed by New York City's Lower East Side People's FCU, which received a $750,000 award. "The most important thing about this grant is that it will enable us to make more funds available to businesses all over the five boroughs of New York," said Linda Levy, CEO of Lower East Side Peoples FCU. "We have almost tripled our small business lending this year, and a good part of that is due to the fact that the banks have stopped lending. I think we all know this and we're all very sorry about this, and we have been trying very hard to step into the fray, but it's been hard because we don't have a lot of capital, so this is really going to help us help the community," Levy added. Also receiving a $750,000 award this round was Bethex FCU, Bronx, N.Y. Joy Cousminer, president/CEO of Bethex, explained that while some of the award would be used to expand lending to the 60-plus small businesses the credit union serves, the bulk will provide a new teller area with three windows, instead of two, and new bulletproof glass to allow members to speak without having to bend down and shout through the cash opening.
Click to view larger image U.S. Rep. Jose Serrano presents Bethex FCU President/CEO Joy Cousminer with a $750,000 award from the U.S. Treasury Department's CDFI Fund. (Photos provided by the National Federation of Community Development Credit Unions)
National Federation of Community Development Credit Unions also was among the recipients, receiving $750,000. "The CDFI Fund is an absolutely unique source of innovative funding, which has enabled us as a national entity to support hundreds of low-income credit unions across the U.S.," said federation President/CEO Cliff Rosenthal. "We've been doing this to help them build their capital during these very difficult times and to allow them to recycle their capital for additional lending," he added. He noted that this round of funding was a more equitable distribution, with some of the largest number of awards to community development credit unions in recent years, including various credit unions new to the fund. Of the 21 credit unions receiving awards in this round, 18 are members of the federation.

New round for Bellcos UBIT case

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DENVER and WASHINGTON (8/20/10)--The U.S. government has notified a court of appeals that it will dispute a federal judge’s favorable credit union rulings in a case that challenged the Internal Revenue Service’s (IRS) policy toward unrelated business income tax (UBIT) and its application to credit unions. In a suit brought by Bellco CU of Greenwood Village, Colo., Judge Christine M. Arguello ruled in November 2009 that investment products that Bellco sold to its members, including stocks, bonds, mutual funds and annuities, were "substantially related" to Bellco's tax-exempt purposes, and therefore the income from those activities was, under the law, exempt from UBIT. Bellco had challenged the IRS's assertion that UBIT was due on the three products and sought $199,293 in tax refunds from the IRS. The same judge also ruled in April of this year that the income derived from credit life and disability insurance, sold directly or indirectly, as well as royalty income from accidental death and dismemberment (AD&D) insurance should not be subject to UBIT. The Colorado decisions were hailed by the Credit Union National Association (CUNA) as substantial victories in credit union court challenges to the IRS’s UBIT policy. For instance, Arguello’s ruling noted, "In the banking and credit union context, the concept of thrift is tied to sound financial management." "Credit insurance does just that. It permits a borrower to guard against certain difficult circumstances and to know that, if the unfortunate event of death or a serious disability occurs, the borrower's family and/or assets would be protected. For a relatively marginal payment, the borrower buys peace of mind," she added. The government will file its appeal with the U.S. Court of Appeals for the Tenth Circuit. CUNA will be closely monitoring developments. CUNA General Counsel Eric Richard said the government’s announcement that it would appeal may end up being a strong positive for credit unions on the UBIT issue: “We may get a powerful favorable precedent out of this at the Court of Appeals level. Obviously, we will be fighting hard.” Richard is CUNA's representative on the UBIT Steering Committee, which supported Bellco. Other groups on the committee are the American Association of Credit Union Leagues (AACUL), CUNA Mutual Group, and the National Association of State Credit Union Supervisors (NASCUS).

VACORP transitions services from U.S. Central

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LYNCHBURG, Va. (8/20/10)--VACORP FCU has ceased processing domestic wire transfers through U.S. Central and begun processing directly through the Federal Reserve Bank, and is planning to withdraw more services. Don Chapman, VACORP president/CEO, said in a letter to member credit unions on VACORP's website that the corporate will work with members to "transition them away from using U.S. Central's cash concentration and automated deposit transfer services" and actively pursue "alternatives to U.S. Central's securities safekeeping and international payment services. "These actions, as well as others we will undertake in the future, will continue to ensure that VACORP and our members have viable, cost-effective alternatives to U.S. Central's products and services regardless of the final outcome of the National Credit Union Administration's (NCUA) conservatorship of U.S. Central," the letter said. The corporate noted that VACORP never purchased toxic or legacy assets, so NCUA's resolution of the legacy assets issue "should have no direct impact on VACORP or its members." The Lynchburg, Va.-based VACORP will conduct several town hall meetings and webcasts in late October and early November to discuss its business plan. "The critical component of the plan will be the willingness of our members to convert their existing Membership Capital Accounts (MCA) to Perpetual Contributed Capital (PCC)," the corporate said. "VACORP is only asking for the existing MCA to be converted to PCC." Chapman said the corporate needs a commitment of about $16 million to PCC to meet what the corporate believes is NCUA's minimum Tier 1 risk-based capital ratio of 4%. "VACORP and its members have been adversely impacted over the last two years by the investment decisions made by U.S. Central," said Chapman. Like other corporates, VACORP was required to write off all of its capital at U.S. Central. That reduced VACORP members' capital by about 66%, he said.

Maine warns of credit card advance fee scam

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AUGUSTA, Maine (8/20/10)--A Maine credit union has reported an “advance fee” credit card scam that prompted Maine’s attorney general to issue a warning to consumers. PeoplesChoice CU, a $120 million-asset, Saco, Maine-based credit union, reported a scam in which fraudulent callers claiming to represent PeoplesChoice offer a credit card in exchange for $200 and bank card information (sunjournal.com Aug. 19). Maine Attorney General Janet T. Mills said a so-called “advance fee” credit card requires pre-payment and bank account information to receive a credit card with a $2,000 credit line, the newspaper said. During the past three weeks, the credit union received 25 phone calls from people contacted by the scammers, Mills told the paper. “PeoplesChoice CU has nothing to do with this illegal offer,” Brenda Piecuch, the credit union’s compliance manager and information security officer, told the paper. Consumers should never give bank account information over the Internet or phone without confirming the identity and location of persons soliciting the information, Mills wrote in her warning. “Verify, verify, verify,” she added.

League to TCUD Fees rule will deplete capital

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FARMERS BRANCH, Texas (8/20/10)--The Texas Credit Union League (TCUL) has sent a comment letter on proposed rules about recommended new fees and proposed revisions to loan rules from the Texas Credit Union Department (TCUD) that the league says will deplete credit union capital. The league noted its opposition by citing concerns that the proposed fees are “punitive and will deplete credit unions of capital when they need it most.” It also said that several of the changes in the proposed loan rules are subjective, leaving credit unions exposed to interpretation, rather than offering a clearly defined procedure (LoneStar Leaguer Aug. 19). The new fees are proposed in 97.115. Reimbursement of Expenses for Legal Services and 97.116. Recovery of Cost for Extraordinary Services. Both of the proposed rules would allow the regulator to charge new and additional fees, on an individual basis, to credit unions for:
* Reimbursement of legal expenses from the attorney general, and * A decision by the Commissioner of Credit Unions to send examiners into a credit union beyond the regularly scheduled exam.
TCUL cited key concerns in the comment letter:
* The proposed rules take away predictability as to the cost of regulation; * The fees would have a disproportionate impact on small and mid-size credit unions; and * The penalty fees are unlimited and would be completely at the discretion of the credit union commissioner.
TCUL noted that the proposed rules do not eliminate burdens on credit unions or provide new authority. Rather they add unnecessarily subjective language. Such broad language leaves credit unions vulnerable to interpretation during the exam process, the league said. The feedback from credit unions indicated they prefer the existing loan regulations, TCUL added. “This has traditionally been covered as part of the TCUD budget through the regular assessment made on credit unions for operations at the TCUD,” Jeff Huffman, league vice president for government relations, said in an e-mail to News Now in July. “The system of funding the agency that has been in place for many years has served Texas credit unions well, in good times and bad. “This proposed rule further expands the power of the regulator, giving great discretion to the commissioner. It takes away predictability of regulatory costs for state-chartered credit unions,” he added (News Now July 9). “If these types of rules are implemented, state charters in Texas will not only have to pay their regular assessments, but will also be faced with individual assessments from the TCUD when they are least able to afford additional unanticipated and unlimited regulatory costs,” Huffman said. The Credit Union Commission will consider the proposed rule changes Oct. 15.

Beall to head MCUA effective Nov. 1

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ST. LOUIS and COLUMBIA, Md. (8/20/10)--Michael V. Beall, current president/CEO of the Maryland and District of Columbia Credit Union Association (MDDCCUA), has accepted the position of president/CEO of the Missouri Credit Union Association (MCUA), effective Nov. 1. He will replace Rosie Holub, who plans to retire in December, the associations announced Thursday. "During her 11 years with MCUA, Rosie's exemplary leadership well positioned the association for the future," said MCUA Board Chairman Stan Moeckli, adding that the board has a high level of confidence in Beall and his leadership abilities. Beall has served in his current position since 2004. "Mike leaves the association much stronger after his nearly seven years of service," said Miguel Boluda Jr., chairman of MDDCCUA and CEO of PAHO/WHO FCU, Washington, D.C. "He has been a tireless advocate for the credit unions of Maryland and D.C., and has elevated our advocacy, training and community outreach activities." Moeckli said Beall plans to attend MCUA's upcoming convention and exposition in Branson, Mo., Sept. 14-16. His last day with MDDCCUA will coincide with the opening of the Volunteer Leadership Conference in Ocean City, Md., Oct. 22. Beall spearheaded efforts to merge the Maryland and DC associations in January 2006 and was instrumental in the National Credit Union Foundation's development of its REAL Solutions project. Previously, Beall managed the governmental affairs and partnerships for World Council of Credit Unions, served as executive vice president and lobbyist for the North Carolina Credit Union League, and served as a credit union general counsel where he developed, training and implemented compliance programs. He serves on the Credit Union National Association's (CUNA) Governmental Affairs Committee, is a director of the Consumer Credit Counseling Service of Maryland and Delaware, and is a lead facilitator for the Credit Union Development Education program. He earned a juris doctorate degree from the University of Richmond and a bachelor's degree in government and politics from the University of Maryland. Holub, who had had become CEO of MCUA in 1999 and announced in December 2009 she would retire at the end of this year, said, "Mike's background of strong credit union advocacy will greatly benefit the (Missouri) association in addressing the legislative and regulatory issues during these difficult times." Boluda will work with MCUA's executive committee to conduct a search for the next CEO at MDDCCUA. Member credit unions will receive details in the next few weeks.

Holy Infant CU merges with Gateway Metro

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ST. LOUIS (8/20/10)--Holy Infant CU, Ballwin, Mo., merged with Gateway Metro FCU, St. Louis, Aug. 1. Gateway plans to open a student-assisted branch office within Holy Infant School in St. Louis County, said the Missouri Credit Union Association (The Missouri difference Aug. 18). Gateway sponsors student-assisted branches at three Catholic elementary schools and opened a high school branch at Trinity Catholic High School, St. Louis, last spring. When it decided to merge with Gateway, Holy Infant considered its members’ access to innovative credit union services, and the ability of the credit union to offer financial education and a student-assisted credit union branch in the school.

CU forms first-of-kind solar group buy program

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SAN JOSE, Calif. (8/20/10)--Members of San Jose (Calif.) CU can go solar through a new program that allows them to purchase residential solar electric and solar thermal systems at a reduced cost. The first-of-its-kind San Jose Employee Solar Group Buy program results from a partnership between the credit union and San Jose’s Solar America City Program. A group of 130 city employees and retirees negotiated the group buy. Both organizations will provide technical and strategic help to group members. The group buy model lowers solar system costs for homeowners and encourages community participation. The group aims to install solar power in more than 130 homes. SunPower Corp. and SunWater Solar will provide solar power for the group. The companies will work with homeowners to perform site assessments to determine sizes and design. Installations will take place between September and February. “Solar thermal can significantly reduce utility bills today while insulating system owners from the high energy costs of tomorrow,” said Justin Weil, president, SunWater Solar. San Jose has installed more solar power than any city in the state. From Jan. 1, 2007 to July 7, 2010, the city installed 14.9 megawatts of power across 1,737 sites, according to the California Solar Initiative. San Jose CU has $125 million in assets.

CU System briefs (08/19/2010)

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* ST. LOUIS (8/20/10)--Credit unions in Springfield, Mo., met Tuesday with Billy Long, Republican candidate for the U.S. Congress District 7 seat vacated by Roy Blunt (R), at
Click to view larger image Click for larger view
Postal Federal Community CU. There he learned more about credit unions from industry experts, according to the Missouri Credit Union Association. Long said he hopes to add a business perspective to Capitol Hill and that too many unintended consequences are passed in legislation. Credit unions explained the fundamental differences between banks and credit unions and highlighted the challenges of blanket financial reform. "We deal with the member directly, and we're a cooperative," said Cathy Stroud, Community Financial CU, Springfield. "We tell the consumer the facts without the smoke and mirrors." Long is seated in the front row, second from left, with representatives from Assemblies of God CU, Community Financial CU, Educational Community CU, Metro CU, Postal Federal Community CU and TelComm CU. He faces Scott Eckersley (D) in the Nov. 2 election. (Photo provided by the Missouri Credit Union Association) ... * RALEIGH, N.C. (8/20/10)--At a recent State Employees' CU (SECU) statewide managers' meeting, SECU friends paid longtime PSCU CEO David Serlo tribute with a donation to SECU Family House in his memory. The gift will provide furnishings for one of the 40 bedrooms at the House. The gift and a plaque for the family was presented to PSCU Financial Services Group executive Chuck Fagan III, who spoke at the meeting. Fagan is shown with Leanne Phelps, senior vice president of SECU's card and record services department. Serlo lost his long-time battle with cancer in June. SECU Family House is located in Chapel Hill, N.C. The gift freed enough funds to provide 115 families a seven-night stay at the house for seriously ill patients and their caregivers. (Photo provided by State Employees' CU) ...

Georgia CUs poll Members gain confidence

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DULUTH, Ga. (8/20/10)--Georgia consumers are growing more confident about the economy but are keeping a tight hold on their wallets, according to a Georgia Credit Union and Affiliates (GCUA) survey from 162 credit unions in the state. The credit unions placed links on their websites for members to respond to the survey. The questions focused on spending, savings habits, retirement and their feelings about the economy. Only credit union members were involved in the study. Roughly 53% of 6,000 accountholders the organization surveyed said they expect to be in better financial shape a year from now. About 17% said they didn’t expect their financial situation to improve, while 31% didn’t know (The August Chronicle Aug. 19). Credit card balances have decreased by 2%, and new-vehicle borrowing has dropped 9%. Used-card lending rose 9%, the survey found. There is still a lot of uncertainty about the economy, said Mike Mercer, GCUA president. A lot of people are doing “okay” and building security, but some have neighbors or family members who are out of work, he added. Fifty percent of respondents said they could make it just three months or less on their savings, while 26% said they had no savings cushion if they became unemployed. Three out of four consumers aid they will remain focused on building their nest egg than making major purchases. Those planning a major purchase said it would be for home improvements--56% said they would use cash from savings rather than a credit card or loan, the newspaper said. Mercer also warned retailers to be cautious about Christmas-season orders. The Georgians surveyed didn’t indicate they would spend more money anytime soon--including holiday purchases.

NEW Missouri CU Assn announces Beall as new presidentCEO

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ST. LOUIS (UPDATED 8/19/10, 9:50 a.m. E.T.)--The Missouri Credit Union Association (MCUA) announced today that its board has selected Michael Beall as the new president and chief executive office (CEO) of the league. Beall, who will succeed Rosie Holub in the top MCUA position, will do so effective Nov. 1. He is currently president/CEO of the Maryland and District of Columbia Credit Union Association. Stan Moeckli, chairman of the MCUA board, said of the changing leadership, “During her 11 years with MCUA, Rosie’s exemplary leadership well positioned the association for the future, and the board has a high level of confidence in Mike and his leadership abilities to provide our state’s credit unions with dedicated support to meet the challenges ahead.” Beall has served in his current position since 2004. His leadership at the Maryland and District of Columbia Credit Union Association include orchestrating credit union efforts regarding member business lending, alternative and risk-based capital, mergers and conversions, and outreach and development products and services. He is considered instrumental in the National Credit Union Foundation’s development of the REAL Solutions project.

CU System briefs (08/18/2010)

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* KALAMAZOO, Mich. (8/19/10)--A robbery suspect was nabbed 40 minutes after Kalamazoo, Mich.-based Consumers CU was robbed Monday--because she left her identification on the teller counter. Kimberly Ramirez was arrested after allegedly leaving her personal debit card and a demand note written on the back of a prescription made out in her name on the counter as she fled. The robbery occurred at about 12:57 p.m. She was arrested at 1:30 p.m. outside her apartment. Police found almost $10,000 and a hat, sunglasses and purse identical to those worn by the bank robber. The driver of a car matching the getaway vehicle told police he had picked up a woman at the credit union and been paid $1,235 to drive her around. Police recovered that cash, also (Chicago Tribune Aug. 17) ... * WAYNESBORO, Va. (8/19/10)--A driver who mistook the accelerator on her car for her brake slammed into DuPont Community CU's Lucy Lane branch in Waynesboro, Va., and caused between $35,000 and $45,000 to the credit union's building. The incident, involving an 81-year-old driver, occurred Tuesday at about 9:30. Her vehicle sustained about $1,500 in damage. No one was hurt (The News Virginian Aug. 17) ... * FRANKLIN, Ohio (8/19/10)--MidFirst CU, a $186 million asset credit union based in Franklin, Ohio, has changed its name to MidUSA CU Inc. The change occurred because the credit union is interested in expanding into new markets while serving existing members, and because the credit union was challenged on the use of its name by a competing financial institution, MidUSA President/CEO Jim Miles told local media. The credit union will take a phased-in approach to the transition, he added (Timestcnewsnet.com Aug. 17) ... * MACON, Ga. (8/19/10)--Two Georgia-based credit unions and a bank have been targeted in a widespread credit card fraud affecting employees of Robins Air Force, said Warner Robins police (The Telegraph Aug. 17). Police received about 30 reports between Friday and Tuesday that fraudulent charges were made in New Jersey, California, and as far away as Canada and Australia on the local institutions' accounts. Members of Robins FCU, a $1.3 billion asset credit union in Warner Robins, and Macon, Ga.-based $124 million asset MidSouth FCU's Warner Robins branch experienced compromised accounts. Fraudulent purchases ranged from $2 to $200 ...

Banks drag feet on Nevadas hard-hit fund CUs may step in

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RENO, Nevada (8/19/10)--A disagreement between the Nevada Housing Division and some big-bank lenders is placing a new state emergency assistance program for homeowners in limbo, according to local media reports. If banks don’t participate in the program, however, the division will turn to credit unions for help. Nevada was approved in June to receive $102.8 million as part of the $1.5 billion national “Hardest Hit Fund” to help struggling homeowners through mortgage modifications. The division had planned to launch a program in September. Under terms of the program, lenders would match funds from the program with a principal reduction of equal value, said The Reno Gazette-Journal (Aug. 12). Major lenders, such as Wells Fargo, U.S. Bank and Bank of America, oppose the principal matching requirement, said Charles Horsey, division administrator. A representative of a state banking group also told the newspaper that the matching requirements would continue to be an item of contention for major lenders. The division is going forward with the program, and if banks don’t participate, Nevada credit unions will, Horsey told the newspaper. “We will concentrate our efforts on mortgages originated by credit unions,” he said. The California and Nevada Credit Union League said it is following the situation to see if there are any credit unions that become involved with the program. Roughly 200 Michigan credit unions are involved with the Help for Hardest Hit Homeowners Fund, which is a program to help struggling Michigan homeowners. Michigan Gov. Jennifer Granholm recently announced an additional $128.4 million from the federal government for the statewide program. The money will be distributed by the Michigan State Housing Development Authority through lenders, such as credit unions, to help homeowners avoid foreclosure (News Now Aug. 18).

Liquidated CU drops injunction quest hearing delayed

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WASHINGTON (8/19/10)--The now-liquidated Kappa Alpha Psi FCU, which went to court seeking an injunction against the National Credit Union Administration (NCUA) to stop the liquidation, said Wednesday it will drop the injunction request. The statement was made during a status hearing in the U.S. District Court for District of Columbia in Washington Wednesday morning. Attorneys for the Texas-based credit union said it no longer seeks an injunction because of a court order issued Aug. 11 requiring NCUA to show cause for the liquidation. Also at Wednesday's hearing, NCUA and the credit union agreed to extend the time for briefing and the hearing on the order to show cause. The court vacated the briefing schedule. Instead, NCUA must file its renewed response to the show-cause order by Aug. 30, the credit union must file its reply to the government's response by Sept. 15, and NCUA must file its sur-reply by Sept. 22. U.S. District Judge Emmet G. Sullivan set a hearing on the order to show cause for Oct. 15 at 11 a.m. ET. NCUA ordered the liquidation of the $750,000 asset credit union on Aug. 3 and formally carried out the liquidation orders Friday by distributing all shares to members (News Now Aug. 18). Earlier this month, the credit union challenged the liquidation, claiming it was unjust and that its net worth ratio was affected by "full accrual accounting" and NCUA's assessments related to the Temporary Corporate Credit Union Stabilization Fund. NCUA countered that the liquidation was the result of the credit union's inability to generate consistent operational profits, build its net worth position, maintain its records in a sound manner, grant quality loans, and adequately collect on delinquent loans.

Time a key roadblock to third-party vendor management

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MADISON, Wis. (8/19/10)--More than 90% of credit union executives believe vendor management will be a top priority for their CEOs, their third-party auditors and their regulators during the next 24 months, according to a new survey. Federal regulators require credit unions to perform an appropriate level of due diligence on their third-party relationships. Effective vendor management is about time: Too much and too little of it, according to the survey from Abound Resources, a new alliance provider for CUNA Strategic Services. Additional findings are available in the resulting white paper, “The Vendor Management Disconnect: Why Credit Unions Are Unhappy with Their Vendor Management Program.” To read the paper, use the link. Chief financial officers, chief information officers, chief operating officers and compliance executives with executive-level responsibility for vendor management say they are spending more than a quarter of their own time on vendor management--often on a program that doesn’t meet their expectations. A third of those executives are dissatisfied with their programs, the study revealed. The main reasons for their frustration are a lack of time to do what is required; vendors not providing the due diligence documents; and the lack of expertise to evaluate financials and Statements on Auditing Standards No. 70: Service Organizations, or SAS 70s. “Our job is to dramatically reduce the time credit unions spend on vendor management while providing an objective, repeatable and defensible program that meets or exceeds regulatory guidelines,” said Brad Smith, CEO of Abound Resources. Abound Resources’ vmRisk module helps credit unions comply with the ongoing risk monitoring regulatory requirement by providing:
* Vendor risk assessments and risk ratings; * Due diligence document gathering, evaluation and scoring; * vmRisk reports that highlight areas of concern from vendor due diligence documents and suggest risk mitigation strategies; * vmNotify service that updates executives on their vendors’ “bad news”; * Integration with CUNA Strategic Services’ VendorTrack program; and * Compliance guarantee.
Smith is the speaker for the upcoming webinar “Six Ways to Save Time and Improve Compliance with Vendor Management,” scheduled for 3 p.m. CT today, and 10 a.m. CT Tuesday. For more information, use the link.

La. league Interchange outside scope of reform bill

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HARAHAN, La. (8/19/10)--Louisiana credit unions and banks reiterated their opposition to recently enacted legislation regulating debit interchange rates. “Louisiana banks and credit unions ask Louisiana’s [lawmakers] to oppose the price-fixing and anti-consumer interchange language adopted by the Senate,” said a letter to the Tri-ParishTimes.com editor published Aug. 18 that was co-written by Anne Cochran, president/CEO of the Louisiana Credit Union League, and Robert T. Taylor of the Louisiana Bankers Association. “The impact of the Senate amendment is not limited to interchange price fixing,” said the letter. “The amendment grants merchants the unlimited ability to discriminate against certain ‘forms of payment.’ This provision is intended to encourage large retailers to enter into preferential arrangements with large institutions, with discounts and incentives for consumers who use these cards. Consumers who carry cards issued by Louisiana credit unions and banks will be out of luck. “Interchange rates had nothing to do with the financial crisis and are outside the scope of this bill,” the letter said. “The bottom line is this: A coalition of large merchants is seeking to reduce overhead costs by shifting the responsibility for the payments system entirely onto issuers and, ultimately, consumers.” To read the letter, use the link.

WOCCUs MatchSavings program featured on Wis. Public Radio

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MADISON, Wis. (8/19/10)--The World Council of Credit Unions’ (WOCCU) MatchSavings program was featured Wednesday on Wisconsin Public Radio in Madison, Wis. Jenny Bernhardt, WOCCU development communications manager, spoke with Wisconsin Public Radio’s Kathleen Dunn about the program. MatchSavings, which is based in Madison, Wis., gives the working poor in Mexico the ability to open savings accounts and provides them incentives to continue saving. Here’s how MatchSavings works:
* Savers open their first savings account at one of WOCCU's partner credit unions in a developing country--currently rural Mexico. Savers establish a six-month savings goal and commit to regular monthly deposits. * Givers go to MatchSavings.org, choose which types of savings accounts (housing, education, microbusiness or health) they want to match and make a donation. * At the end of the saving period, savers receive the match on their savings principal, realize their savings goal and become members of a credit union that will help them reach their financial goals in the future.
Once savers complete the program, they are not eligible to participate again, but they have a credit union membership and a savings habit on which to build. “We’ve had a really high success rate,” Bernhardt said. WOCCU hopes to expand the program to other countries, she added. It’s difficult for residents of rural Mexico to open savings accounts because many of the savings institutions are located so far from where they live. Bernhardt, who has traveled to Mexico to visit credit union branch offices as a part of the program, said the road conditions could prevent residents from visiting their local savings institutions. The journey also could cost a day’s wages, she said. “There isn’t a whole lot of incentive for people to open a savings account if it means they have to go [to the credit union] themselves to do this,” she said. MatchSavings also has garnered mentions in national media. The New York Times op-ed columnist Nicholas D. Kristof noted MatchSavings in, “Sparking a Savings Revolution” which focused on savings programs for individuals worldwide to fight poverty and save for their futures (Dec. 30). The article provided a link to matchsavings.org and prompted donations. To listen to the program, use the link.

Heartland CU launches Go Local initiative

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MADISON, Wis. (8/19/10)--Heartland CU, Madison, Wis., announced the launch of its “Go Local” initiative, to make consumers aware of locally oriented decisions, critical to developing strong communities throughout southwestern Wisconsin. Heartland will donate more than $75,000 to organizations and causes in the Dodgeville, Lancaster, Madison, Platteville and Verona areas through 2011. The amount includes a $10,000 cash donation to a non-profit organization, awarded by community vote. The $10,000 winner will be nominated by visitors to the Heartland CU Go Local Community Page, with finalists unveiled later this year. “For 75 years, Heartland CU has grown because our members know we are a trusted partner who truly cares about the financial well-being of our members and their surrounding communities,” said Sally Dischler, Heartland president/CEO. “With ‘Go Local,’ we get to walk the walk--honestly, we can’t wait to see how our neighbors choose to help each other,” she added. “We’re all making a real difference here." Heartland CU will celebrate the launch of its “Go Local” campaign Aug. 28 in Madison at the Marquette Neighborhood Association’s 45th Annual Orton Park Festival. Heartland CU has been a sponsor of the festival since 1988. Heartland CU has $165.6 million in assets.

Community CU and Growth Conference announces scholarships

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MADISON, Wis. (8/19/10)--The Credit Union National Association (CUNA) and CO-OP Financial Services announced a scholarship fund to help credit union professionals attend the CUNA Community Credit Union & Growth Conference, Oct. 6-9 in Boston. The scholarship entry deadline is Sept. 16. CO-OP Financial Services will provide tuition assistance to 12 credit union staffers. The conference offers educational sessions for credit unions looking to grow membership and revenue. CO-OP Financial Services is a credit union service organization that provides debit and ATM processing, 28,000 surcharge-free ATMs, shared branching, call centers and other services for credit unions. For more information, use the link.

Study FIs identify fraud as top debit concern

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DALLAS (8/19/10)--About 71% of financial institutions in the electronic payments industry identified fraud as their main concern related to debit cards, according to a recent SWACHA study. SWACHA, an electronic payments resource, commissioned a study among its members, which includes credit unions, to identify concerns associated with debit card use (Transactiondirectory.com Aug. 17). Nearly 43% of those surveyed said they spent up to 40 or more hours in 2009 dealing with fraud--specifically, with fraud from skimmers and data breaches. More than 19.2% of respondents spent up to $50,000 with the cases. SWACHA said it plans to offer additional educational resources to help its member financial institutions mitigate fraud risks.

Would-be robber gave CU five-minute warning

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SYRACUSE, N.Y. (8/18/10)--A possible would-be robber of Empower FCU, Syracuse, N.Y., has been charged with attempted robbery, according to local media reports. On Friday, a man wearing a bandanna on his face entered Empower FCU’s drive-through. He told a teller he was planning to rob the credit union and would be back in five minutes. He then left the area and police were called, said The Post-Standard (Aug. 14). Martin J. Richardson, 54, is accused of attempting to rob the credit union. Police found him about 30 minutes after the threat was made. Richardson, who was riding a bicycle, refused orders to stop and was taken into custody, the newspaper said. He was charged with attempted robbery in the third degree and resisting arrest. He is being held by authorities while he awaits arraignment in Fulton City court, the newspaper said. The potential would-be robber never entered the credit union. Empower FCU closed as a precaution after the threat was made. Empower FCU has $830.9 million in assets.

Irish league to hold special meeting on reg proposals

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DUBLIN, Ireland (8/18/10)--The Irish League of Credit Unions (ILCU) will hold a special general meeting next month to discuss regulatory proposals. More than 1,000 delegates are expected to attend the meeting to discuss moves by Ireland’s Financial Regulator to assert more control over bailout fund proposals. ILCU, which represents more than 400 credit unions in the country, called for the meeting after the regulator issued a consultation paper in June that proposed a statutory bailout fund for credit unions that become insolvent (Sunday Tribune Aug. 1). The regulator wants to replace an existing, private ILCU protection fund--a savings protection scheme (SPS)--which is outside the regulator’s purview, the newspaper said. In the past few weeks, ILCU has held roadshows nationwide to gather information and listen to feedback from credit union members. Turnout was very high and there is substantial fear about the SPS being taken over, an ILCU spokesman told the paper. The SPS is adequate to cover any problems credit unions may encounter, Kieron Brennan, ILCU chief executive, told the paper.

Invest in America gives Cadillac to CU member

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LANSING, Mich. (8/18/10)--Invest in America and GraCo FCU, Alma, Mich., gave one credit union member the keys to a new, crystal red 2010 Cadillac SRX, Aug. 9. Gerard Boyle, a longtime GraCo CU member, entered to win the three-year lease on the vehicle when he took out a loan from the credit union for another auto. Boyle picked up the new vehicle at Shaheen General Motors (GM) in Mt. Pleasant, Mich., with GraCo CEO Stacy Grube on hand (Michigan Monitor Aug. 16). Boyle said he “couldn’t believe it” when the credit union first called to let him know he had won the raffle. CUcorp, which runs Invest in America nationwide, designed the raffle to promote participation in the program. It offered the opportunity to hold the raffle to GraCo CU after it signed up during February’s Credit Union National Association Governmental Affairs Conference. This is the second year that Invest in America has held the raffle, in which all participating credit unions are automatically entered. Invest in America is a credit union auto loan discount program offered by GM and Chrysler. CUcorp is a marketing company based in Livonia, Mich., and a wholly owned subsidiary of the Michigan Credit Union League.

El Salvador turns to CUs for business financing

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SAN SALVADOR, El Salvador (8/18/10)--Government policy-makers in El Salvador last week committed to developing economic policy and payments system support for credit unions and financial cooperatives in the country, enabling them to help boost sagging loan support for the small and micro-business sector.
Click to view larger image Brian Branch, executive vice president and chief operating officer for the World Council of Credit Unions (left), and Patrick S. Jury, president/CEO of the Iowa Credit Union League (right), discuss effective lobbying techniques with Hector Cordova, CEO of El Salvador's FEDECACHES (center), at the International Seminar on Best Practices held in Panama in April. (Photo provided by the World Council of Credit Unions)
The commitment was made in response to a joint visit by officials from the Federation of Savings and Credit Cooperatives of El Salvador (FEDECACES) and the World Council of Credit Unions (WOCCU). Prior government administrations had encouraged El Salvador’s commercial banks and microfinance institutions to provide financing support to small and micro enterprises. However, during the recent financial crisis, commercial bank loans in general shrank by 5%, and the funds were redirected away from the small businesses to support larger commercial enterprises. During the same period, credit union loans expanded 16%, making more money available to small businesses in need. Hector Cordova, FEDECACES CEO, and Brian Branch, WOCCU executive vice president and chief operating officer, last week met with Salvadoran government officials to support the case for increased growth and outreach by credit unions to small and micro businesses. Cordova and Branch were executing lobbying steps discussed during the recent International Seminar on Best Practices and Credit Union Operations, an event jointly sponsored by and part of the ongoing relationship between the Iowa Credit Union League and Corporacion Fondo de Estabilizacion y Garantia de Cooperativas de Ahorro y Credito de Panama, R.L. (COFEP), originally brought together in 2005 through WOCCU's International Partnerships Program. The April meeting, held in Panama City, Panama, attracted participants from Latin America and the Caribbean. Lessons learned about market strategy and advocacy both came into play during last week's visit, according to Cordova. “We saw the crisis as an opportunity to help our members grow and to grow our credit unions,” Cordova said. Currently, the 32 credit unions in the FEDECACES system serve 132,000 members. Nearly 20% of the credit union portfolio represents loans to small or micro businesses and agricultural producers. Most business loans are made to self-employed merchants or family-owned businesses. Only 5% of the country’s financial sector is locally owned, according to Marta Evelyn de Riviera, vice president of El Salvador’s Central Bank. During the global financial crisis, the country saw both restriction and withdrawal of services by the larger foreign-owned commercial banks. The banks’ withdrawal for small business paved the way for government policy support for increased credit union participation in financing micro and small businesses, according to Mario Cerna, El Salvador's vice minister of economics. “During the civil war of the 1980s, credit unions in El Salvador maintained their operations, often as the only local institutions to provide loans to small agricultural producers, self-employed merchants and family-owned businesses,” Branch said. “During the recent financial crisis, credit unions once again stepped into the breach to provide financing to the common population who could no longer get financing from commercial banks,” he added. “This level of local commitment to small businesses is what the government would like El Salvador’s credit unions to continue providing.” Current government policy seeks to stimulate greater growth of the financial cooperative sector, including credit unions, to ensure continuity of locally sustainable and committed financial services to local producers and businesses. Central Bank officials are in the final stages of completing their policy development and will meet with FEDECACES staff next week to gather specific credit union input.

Hardest-hit homeowners get 128M boost

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LANSING, Mich. (8/18/10)--On Aug. 11, Michigan Gov. Jennifer Granholm announced another $128.4 million from the federal government to help struggling homeowners in Michigan. The money will be distributed by the Michigan State Housing Development Authority (MSHDA), along with $154.5 million in the original Help for Hardest Hit Homeowners Fund. The fund aims to help homeowners in Michigan who are unemployed avoid foreclosure (Michigan Monitor Aug. 17). Thirty individual credit unions, and credit union service organizations Mortgage Center and Member First Mortgage, are working with MSHDA, making more than 200 credit unions statewide involved, said the Michigan Credit Union League. The original fund is expected to help up to 17,000 homeowners avoid foreclosure and another 13,000 with a new appropriation. There is no limit on the number of lenders that can participate, but funds are only available on a first-come, first-served basis only. Preceding the state announcement, last week Treasury Assistant Secretary for Financial Stability Herb Allison announced the government's decision to provide additional support for homeowners struggling with unemployment through two existing foreclosure prevention programs. Treasury said it was making a total of $2 billion of additional assistance available for the Housing Finance Agency’s Innovation Fund for the Hardest Hit Housing Markets (News Now Aug. 12). For more information, use the link.

BCU hosts special dialogue session with NCUA

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NAPERVILLE, Ill. (8/18/10)--Baxter CU, Vernon Hills, Ill., recently hosted a dialogue session with National Credit Union Administration (NCUA) Board Member Gigi Hyland. Hyland, joined by Gary Kohn, NCUA senior policy adviser, discussed regulations, credit unions’ day-to-day challenges, corporate credit unions and the financial stability of the National Credit Union Share Insurance Fund.
Click to view larger image Baxter CU, Vernon Hills, Ill., recently hosted a dialogue session with National Credit Union Administration Board Member Gigi Hyland. From left, John Bratsakis, Baxter senior vice president and Illinois Credit Union League director; Hyland; and Mike Valentine, Baxter president/CEO. (Photo provided by the Illinois Credit Union League)
Forty individuals from 10 credit unions attended the meeting. “I learn so much from seeing how the credit unions interact with their members and observing their operations,” Hyland said. “It provides me a much greater understanding of what is most important to credit unions, which is how they can best serve their members.” Attending the meeting were Dennis Hall, Illinois Credit Union League chairman, and Dan Plauda, Illinois league president/CEO. “During this particularly challenging time for the credit union movement, Gigi provided some key insight into NCUA’s current assessment of a myriad of issues,” Plauda said.

Maine fin ed initiatives subject of radio program

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WESTBROOK, Maine (8/17/10)--The Maine Credit Union League's and Maine’s credit unions' initiatives regarding financial education were recently the focus of a weekly, half-hour public affairs program that is one of the most popular shows of its kind on Maine radio, the league said. The show, MainePoints, airs on Saturdays and Sundays on the following stations in the Portland market: 560 WGAN, Coast 93.1, 970 WZAN, Big Hits Y-100.9, 98.9 WCLZ, and AM 1400/1490, according to the Maine league’s Weekly Update newsletter (July 30). The league’s Governmental and Public Affairs Manager Jon Paradise was the show's guest and spoke at length about the “leading and visionary role that Maine's credit unions have taken in moving financial education, specifically geared to youth, forward in Maine.” The show's host, Ken Altshuler of the top-rated WGAN Morning News Show with Ken & Mike, praised Maine credit unions for “looking for ways to bring an important topic into schools and making a difference. I am impressed with how proactive credit unions have been and continue to be in youth financial education.”

Survey small-business confidence tempered by slow recovery

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HOUSTON (8/17/10)--About 61% of small-business owners have lowered their expectations of an economic rebound until 2011 or later because of uncertainty about the economic recovery, according to respondents to the most recent Business Confidence Survey recently released by Administaff, a provider of human resources services for small and medium-sized businesses. Only about 18% of respondents were optimistic and said a turnaround will happen in 2010, while 20% said they are unsure about the timing of a recovery (Maine Credit Union League’s The Weekly Exchange Aug. 9). The economy was listed by 78% of business owners as one of their biggest short-term concerns, up from 71% in April, followed by 53% citing government health care reform, 46% specifying rising health care costs and 40% listing controlling operating costs. For the longer-term, 70.7% of respondents said they were either very concerned or had elevated concerns about potential tax increases, followed by 70.3% listing government expansion and the effect on business, 67.9% designating the economy and 67.7% citing the federal deficit and the total national debt. When asked about their pipelines for new business for the balance of 2010, 48% of survey respondents said that they expect a sales increase, down from 55% in April; 31% predicted it will stay the same, while 12% anticipated decreasing sales, up from 7% last April. Also, 65% of owners and managers said they are either meeting or exceeding their 2010 performance plans compared to 72% in the last survey, while the remaining 35% reported that they are doing worse than expected. Administaff also announced compensation data from its base of more than 5,600 small and medium-sized businesses. Compared to 2009 second-quarter data, average compensation is up 2.1%, bonuses are up 11.2% and commissions are up 0.4%. Overtime pay is still low, running 8.2% of regular pay, under the 10% level that generally indicates a need for additional employees, but up slightly from 7.5%. “Many owners of small and medium-sized businesses seem to be hesitant to hire more workers and commit important financial resources in the face of current economic uncertainty,” said Paul J. Sarvadi, Administaff’s chairman and CEO. “However, they appear to be ready and willing to make those positive decisions as soon as key fiscal elements are in place.” When asked how they are managing the number of company employees, results were identical to April with 60% of participants stating that they are maintaining current staffing levels, 31% are adding new positions and 9% are laying off employees. The survey also found that 62% of participants expected to maintain employee compensation at current levels throughout 2010, 21% planned increases, 5% expected decreases, and 12% were unsure. Respondents to the Administaff Business Confidence Survey are among the small and medium-sized companies Administaff serves nationwide. The questions were designed to measure the state of the small-business community and gauge the activities and expectations of business owners in 2010, the company said. Administaff conducted the survey July 20-22 of CEOs, chief financial officers, and other executives in a variety of industries at its client companies.

Security officer at CU testifies at murder trial

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GOLDSBORO, N.C. (8/17/10)--A security chief at Marine FCU testified Friday in a high-profile murder trial in eastern North Carolina. Frank Davis, who is in charge of security at the $646.2 million-asset, Jacksonville, N.C.-based credit union, testified that Marine Lance Cpl. Maria Lauterbach, who went missing in December 2007, used her credit union debit card five times that month (WRAL.com Aug. 13). Cesar Laurean, a former Camp Lejeune (N.C.) Marine, is charged with killing Lauterbach in December 2007, then burying her body in a fire pit in the backyard of his Jacksonville home. Lauterbach was eight months pregnant at the time of her death. Her remains were recovered in January 2008, WRAL said. Lauterbach had accused Laurean of raping her in the spring of 2007, and although she later recanted the allegation, Camp Lejeune officials continued their investigation of the matter until she died, WRAL said. On Dec. 14, the security camera at one ATM captured an image of a pregnant woman withdrawing $500, Davis testified. Lauterbach’s roommate and other witnesses testified Thursday that they didn’t see her after Dec. 14, WRAL said. On Christmas Eve, the security camera at a different ATM showed a man tried several times to withdraw $400 to $500 using Lauterbach’s credit union card, Davis testified. The transaction was declined twice because of an incorrect identification code, and the transaction was denied the other two times because of insufficient funds in the account, he said. Prosecutors attempted to get Davis to compare the images on the security camera with the photo in Laurean’s account file at Marine FCU, but Superior Court Judge Osmond Smith stopped him after the defense objected, saying he wasn’t an expert in facial recognition, WRAL said.

CU System briefs (08/16/2010)

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* FEDERAL WAY, Wash. (8/17/10)--David Lynch, chairman of Yakima Valley CU’s board of directors, is the recipient of the Outstanding Credit Union Volunteer Award from the Washington Credit Union Foundation. He will be honored during the Washington Credit Union League Convention and Annual Meeting Sept. 16 in Sea-Tac, Wash. Lynch joined the board in 1991 and has been active with Yakima Safe Kids Coalition fundraisers and the Moxee Hop Festival, which raises money to support students and the community. Yakima Valley CU, Yakima, Wash., has $270 million in assets ... * GLENDALE, Calif. (8/17/10)--One of three suspects charged with cutting open a Los Angeles FCU ATM and then taking $80,000 from the machine has been sentenced to 190 months in prison and ordered to pay a $124,000 restitution (Cardline Aug. 13). Clinton Thompson was convicted in May of conspiracy to use fire during the commission of a felony, bank larceny and the use of fire during the commission of a felony. The thieves broke into the ATM Jan. 28 using a thermal lance, also known as a burning bar. Tavrion Dawson, who was convicted along with Thompson of the same charge, will be sentenced Sept. 27 while Samuel Eaton will stand trial Sept. 21 ... * SAN DIEGO (8/17/10)--Teresa Halleck, former president of Sacramento, Calif.-based The Golden 1 CU, began her post as president of San Diego County CU Monday, the credit union said. Irene Oberbauer, former president/CEO of San Diego County CU, retired in February. San Diego County CU had been run by interim president/CEO Tum Vongswad. The credit union has $4.8 billion in assets and 210,000 members (North County Times Aug. 13) ... * TALLAHASSEE, Fla. (8/17/10)--Florida Commerce CU, Tallahassee, Fla., won the Dock Pop All Florida Golden Image Award for its weLiveFIT! Challenge campaign, which was created to help families shape up their personal finances. The campaign is a 10-month competition to help families reduce their debt, increase savings and boost credit scores with the help of a Florida Commerce financial fitness coach. The family with the highest level of improvement is awarded $10,000. The $316-million-asset credit union worked with Salter-Mitchell, an advertising firm, on the campaign ...

CU outfits 600 students for school

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WEST MONROE, La. (8/17/10)--Ouachita Valley CU, West Monroe, La., recently helped 602 area students obtain supplies for school. Several weeks ago, the credit union had a list of students who needed supplies, but had only $300 for its Ouachita Valley-Sunny 98.3 School Supply Drive. After an article appeared in The News-Star with a photo of an empty room at the credit union that was intended to hold the supplies, and requests from area businesses and credit union workers asking for donations, the drive garnered $13,000 for supplies (The News-Star Aug. 12). Last year, the drive helped 270 students, with $6,000 in donations and $2,000 in supplies. The minimum average cost of one bag of supplies is about $30, the newspaper said. Credit union workers, volunteers and National Guard soldiers sorted and bagged the supplies. The National Guard then delivered the bags to schools. Ouachita Valley CU CEO Donna Wagoner said the community came to the rescue to help make the drive a success. A local elementary school teacher stopped by the credit union before the bags were delivered and her jaw dropped when she saw the supplies, the paper said. The supplies will help the needy children start on the right track when they begin school, she told the newspaper. Ouachita Valley CU has $121 million in assets.

Hanley wins Wegner award

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WASHINGTON (8/13/10)--Rudy Hanley, president/CEO of SchoolsFirst FCU in Santa Ana, Calif., is the winner of the 2011 Herb Wegner Memorial Award for individual achievement. The award will be one of three presented at the 23rd Annual Herb Wegner Awards Dinner hosted by the National Credit Union Foundation (NCUF) at the Grand Hyatt Washington on Feb. 28 during the Credit Union National Association’s (CUNA) 2011 Governmental Affairs Conference. Online registration for dinner tickets will be available later this year on the NCUF website. Hanley was born in Hungary and was 14 when his family fled the Soviet-occupied country in 1957. His family settled in Los Angeles, where Hanley and his brother spent six months learning English in a “foreign adjustment” program before attending public school. After high school, Hanley served for three years in the army before returning to California. Hanley earned a bachelor’s degree in mathematics from the University of California-Irvine (UCI), and a law degree from Western State University College of Law. He supported his family, which by then included two daughters, by working at a supermarket at night while attending classes during the day. Hanley’s early career was teaching high school math, and being a tax and small business consultant. Joining the Credit Union National Association (CUNA) to develop a white paper to retain tax-exempt status for credit unions set him on his ultimate career path. “I decided the ‘people helping people’ philosophy on which credit unions are built was a perfect match for me,” said Hanley in an interview for the UCI alumni paper. After his CUNA experience, he returned to California, joining the California Credit Union League as head of the league’s Research and Information department, providing compliance and operational guidance to credit unions, before taking the helm of SchoolsFirst FCU, formerly Orange County Teachers FCU, in 1982. Today, SchoolsFirst FCU is the largest educational credit union and the fifth-largest credit union in the country. It has more than $8 billion in assets, serving nearly a half a million members in 33 branch locations. “Rudy Hanley has always embraced collaboration,” said Rae Miles, CEO, Open Financial Solutions (OFS). Hanley is a founding member of OFS, a research and development credit union service organization. He has chaired The Trust for Credit Unions--created for the purpose of safe and responsive investment choices for credit unions. He also has served on the boards of the California league, CUNA, CUNA Strategic Services, CUNA Mutual Group and the Consumer Federation of America. He is a founding member of the Filene Research Institute. Working with Santa Ana city officials, he organized the formation of Comunidad Latino FCU, Santa Ana, Calif. SchoolsFirst FCU has provided financial support and ongoing operational assistance and resources. “Rudy Hanley’s accomplishments place him at the pinnacle of the credit union community,” said Tom Dorety, president/CEO, Suncoast Schools FCU, Tampa, Fla. “The most impressive thing about Rudy is his integrity. Integrity means everything to Rudy, and he lives his life and runs SchoolsFirst accordingly. He is incredibly generous and humble to a fault.”

Minnesota CUs support congressman

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ROCHESTER, Minn. (8/17/10)--Minnesota credit union representatives took to the streets in Rochester last week to show their support for U.S. Rep. Tim Walz (D-Minn.) in his bid for re-election, said the Minnesota Credit Union Network (MnCUN).
Click to view larger image Credit union professionals and volunteers gathered for an event to support U.S. Rep. Tim Walz (D-Minn.), center, in his bid for re-election at the home of Kelly McDonough, president/CEO of First Alliance CU, Rochester. (Photo provided by the Minnesota Credit Union Network)
Since elected to office in 2006, Walz has been a strong credit union ally, advocating for the movement on a variety of issues including member business lending (MBL) and interchange. During in-district and Capitol Hill meetings over the past years, he has sought industry insight on issues affecting credit unions and their members in southwestern Minnesota, said MnCUN. Credit union professionals and volunteers dispersed throughout neighborhoods last Thursday in the 1st District, distributing literature and sharing information about the congressman’s strong desire to support constituents. The door-knocking event was followed by a reception held at the Rochester home of Kelly McDonough, president/CEO of First Alliance CU, Rochester. At the event, Walz thanked attendees for their efforts. He voiced concerns with an interchange provision of the recently enacted regulatory reform bill, and urged credit unions to remain active advocates for the industry and their members. Walz also discussed the need to increase the credit union MBL cap, expressing frustration with the fact that credit unions have money to lend but are being prevented from doing so due to the cap. He stated that limiting small businesses’ access to capital is “not good business sense” for the community. During this year’s campaign season, the MnCUN will coordinate several events to increase credit unions’ involvement in local election activities. Minnesota credit unions’ campaign involvement will continue throughout the summer and fall with events for credit union allies running for office at the state and federal level.

Study One-fifth of breached entities were PCI-compliant

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MADISON, Wis. (8/16/10)--Roughly one-fifth-21%--of breached entities subject to Payment Card Industry (PCI) standards had been found to be compliant in their last annual assessment before the breaches, according to a new report. Verizon Business’ new 2010 Data Breach Investigations Report examined 141 breaches from 2009. Roughly 84 of the breaches were investigated by the Secret Service, while 57 were investigated by Verizon (Digital Transactions Aug. 5). While most of the entities that were breached were not PCI compliant, the 21% that were indicate that merchants may only focus on compliance during assessment time, instead of all year. Some companies will “ramp up” their efforts to validate themselves with an assessor comes in, but then allows compliance to “erode a little bit over the year,” said Wade Baker, director of risk intelligence at Verizon Business. However, some trusted administrators who are compliant may have problems that cannot be protected against, he added. Payment card data was involved in 54% of card breaches and accounted for 83% of compromised records. However, the share is declining. A few years ago, 80% or more of breaches and nearly all of stolen data were card numbers, the publication said.

California Nevada CUs win Maxwell Herring awards

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ONTARIO, Calif. (8/16/10)--Five California and Nevada credit unions won Dora Maxwell Awards recognizing credit unions for socially responsible community projects, and Louise Herring Awards honoring credit unions for practical application of the philosophy of “People Helping People.” The winners will now compete in the national credit union recognition programs, said the California and Nevada Credit Union Leagues. L.A. Financial CU won first-place state awards in the Dora Maxwell Social Responsibility Recognition Award, and also in the Louise Herring for Philosophy in Action Award program. Credit Union of Southern California, Grossmont Schools FCU, Silver State Schools CU, and Mission SF Federal CU each won first-place statewide honors in the annual Dora Maxwell program. The judges felt that the winning entries stood out for their commitment to the credit union ideals, exceptional results, and entry presentation, said the leagues. L.A. Financial CU, Pasadena, Calif., won a first-place Dora Maxwell award in the $200 million to $500 million asset category for its partnership with Operation Hope’s Banking on our Future program. The goal is to teach young people about money at no cost to school districts, with a focus on urban and underserved communities. The credit union also won first place in the Louise Herring Award in the greater than $250 million asset category for its Break Up with My Bank program, an internal program that helps to differentiate the credit union from other financial services providers. The Credit Union of Southern California, Brea, Calif., won first place in the $500 million and above asset category in the Dora Maxwell Award program for its holiday gift event that helped more than 100 families during the 2009 holiday season. Grossmont Schools FCU, El Cajon, Calif., received its first-place Dora Maxwell award in the $50 million to $100 million asset category for its employee stimulus book that helped local educators hard hit by budget cuts at area school districts reduce the cost of everyday expenditures. San Francisco-based Mission SF FCU earned a first-place Dora Maxwell award in the $5 million- to $20-million asset category for its Prize-Linked Accounts for Youth (PLAY) program for children and youth that pairs savings accounts and financial skill-building with incentives and peer support. Silver State Schools FCU, Las Vegas, will represent Nevada at the national level after earning a first-place Dora Maxwell award in the more than $500-million asset category. It was recognized for its high school financial literacy program. Coming in second place in the Dora Maxwell program in the asset category of more than $500 million was Travis CU, Vacaville, Calif., for its Money Matters program for foster youth. Second place in the Louise Herring Award program in the asset category of greater than $250 million went to Redwood CU, Santa Rosa, Calif., for its assistance and education programs for its members dealing with the effects of the recession. San Jose, Calif.-based Meriwest CU was recognized with the sole honorable mention handed out--in the Dora Maxwell $500 million and above asset category--for its Financial Education for All program. The awards program is administered at the state level by the California and Nevada Credit Union Leagues, and nationally by the Credit Union National Association. Entries were submitted to the leagues and judged by a committee from the Arizona Credit Union League.

Mazuma CU institutes fraud prevention Fridays

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KANSAS CITY (8/16/10)--Mazuma CU will host Fraud Prevention Fridays throughout August at several branches, by partnering with Jeff Lanza, retired FBI agent and national speaker on fraud prevention and risk management. Lanza will speak on topics to increase awareness of how consumers become victims of fraud that affects their community, and how to prevent becoming a victim. Topics include phishing (fake e-mails) /smishing (bogus text messaging) /vishing (phony telephone messages) scams, senior citizen-targeted scams such as lotteries and sweepstakes, online shopping scams and Nigerian lottery scams. During the seminars, Rob Givens, president/CEO of the $400 million asset, Kansas City-based credit union, and Lanza will be promoting the presentations during interviews on KMBZ radio, a local radio talk show. “Educating the public is one of the best lines of defense against these types of criminals,” Givens said. “The more people become aware of scams and how to protect themselves against fraud, the less likely they will become a victim of one. This proactive approach to educate the community came about as a result of several text messaging scams that looked as if they were coming from Mazuma. “Unfortunately, we had a few Mazuma members call the telephone number located in a text message or e-mail they received, and they gave out personal information,” he continued. “The next thing they know, money has been taken out of their account. Our goal is to get the message out that people need to scrutinize who they share their personal information with. “We preach to our members, Mazuma CU will not call, e-mail or text a member nor ask for their personal information, but trusting people still call and give out their information,” Givens added. “Through this series of seminars, we hope members and non-members understand how important it is to be diligent about protecting their information.” Mazuma decided to partner with Lanza because he is a recognized and trusted name in the Kansas City community, the credit union said. Lanza worked more than 20 years as an FBI agent, serving as chief of internal security for the FBI’s Kansas City region for nearly two decades. He has appeared on television programs, including The Today Show, Good Morning America, Larry King Live and Fox News. Lanza dedicates his time to educating consumers and businesses on how to avoid becoming a victim of fraud. “As soon as the public becomes wise to a scam, the crooks find new ways to trick us,” Lanza said. “It is important that we all become educated and vigilant about fraud, because ultimately we all pay the cost.” The series will conclude at Mazuma’s main office Aug. 27. “We hope many members and non-members take advantage of these seminars,” Givens said. “We can all use the valuable information Jeff Lanza is providing to help protect our pocketbooks.”

SECUs new branding logo take different direction

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LINTHICUM, Md. (8/16/10)--State Employees CU of Maryland (SECU) is introducing a new brand and new logo next week to highlight that SECU is a substantially different alternative to banks. “We want everyone in Maryland to know who we are and that we are committed to taking [financial services] in a very different direction,” Rod Staatz, CEO of the $2.02 billion-asset, Linthicum, Md.-based credit union told Investment Weekly News (Aug. 21). “The bottom line is that as a credit union, we answer directly to the people who bank with us and will always make them our priority. Unlike banks which report to stockholders and have their own--not necessarily their customers’--best interests at heart.” During the past few years, SECU has endeavored “to evaluate what consumers value most and want in a financial institution, how we do business, and what our goals are,” Statz told the publication. “And now, we are doing things better. We are taking banking in a different direction through our commitment to always do what is right, to keep things simple, to provide exceptional service, and to never be controlled by outside owners.” Specifically, the credit union has changed its blue logo to a more contemporary green design, which reflects a more modern approach to conducting business, Investment Weekly said. “In an economy such as the one we are all facing today, it is more important than ever for SECU to stand out from the crowd,” Staatz told the publication. “We want people who bank with us currently and those who are looking for an alternative to traditional big banks to understand that SECU offers great options for home and auto loans, checking and savings, credit cards and business accounts. [We are saying to consumers] we want your business and aren’t afraid to ask for it because we know we will do what is right for you.” Also, SECU has introduced the “different direction” tagline to it printed materials, website, and other collaterals. “That phrase perfectly sums up what SECU is all about,” Staatz told the publication. “The needs of those we serve will always be our No. 1 focus, and that represents a different direction for many consumers who are used to simply settling for what their banks have to offer.”

Cummins Loyalty abundant among CUs members

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ST. PAUL, Minn. (8/16/10)--Loyalty is abundant among credit unions and their members, Minnesota Credit Union Network President/CEO Mark Cummins said in a recent column in Finance & Commerce newspaper. Cummins is a regular columnist for the newspaper, and recently wrote an article titled, “Loyalty sets credit unions apart.” In it, he cited the findings of a March 2010 Minnesota statewide public opinion poll that indicated more than 70% of consumers were “very likely” to recommend their credit union to a friend or family members. This compares with 36% of consumers who said they are “very likely” to recommend their bank. The survey also showed that the public’s trust in credit unions has not faltered. Consumers have a positive attitude toward credit unions and continue to consider them as appealing and attractive. Much of this is attributed to professional and friendly services that credit unions provide, and better interest rates compared to other financial institutions, the survey indicated. “Credit unions reciprocate that loyalty to their members, too,” Cummins wrote, explaining the field-of-membership restrictions under which credit unions operate that allow them to provide top-notch service. “While [these restrictions] may sound like a disadvantage to other come-one-come-all financial institutions, it actually helps credit unions by sharpening their focus,” Cummins said. “Credit unions don’t have to worry about being ‘all things to all people.’ By knowing exactly whom they can serve, credit unions can easily focus in on their members’ unique needs, tailor their product offerings, and provide outstanding customer service.” Credit unions’ not-for-profit, member-owned structure of credit unions typically leads them to take less risk because credit unions don’t face pressure from stockholders to increase profits. “Credit unions are devoted to what’s in the best interest of their members. Period,” Cummins said. “Loyalty comes in different forms and from different places,” Cummins concluded. “Your credit union will protect your assets, treat you like family, and help you make smart choices with your money.” Cummins’ next column will run Sept. 10. To read the column, use the link.

CU System briefs (08/13/2010)

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* MADISON, Wis. (8/16/10)--UW CU, Madison, Wis., will launch My Credit Score Sept. 13, a free tool to give all UW CU members access to their credit scores through UW CU’s Web Branch. When logged into the online banking system, My Credit Score will allow a member to access the credit score. The scores reflect TransUnion’s scoring system and will be refreshed quarterly. The tool also will feature Credit Simulator, which allows users to plan ahead to see how financial decisions, such as applying for a loan or closing a credit line, may impact their credit scores. UW CU has $1.1 billion in assets ... * BURLINGTON, Mass. (8/16/10)--Eastern Corporate FCU (EasCorp), Burlington, Mass., raised $20,000 for Children’s Hospital Boston through the 2010 Credit Union Invitational Gold Tournament. EasCorp hosts the tournament each year. It is one of the corporate credit union’s biggest annual events for the Credit Unions Kids at Heart program, which has raised more than $3.2 million for the hospital. Along with the golf tournament, credit unions sponsor runners in the Boston Marathon and host individual fundraisers ...

Louisiana league announces award winners

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HARAHAN, La. (8/13/10)--The Louisiana Credit Union League awarded three Louisiana credit unions with the Credit Union National Association (CUNA) Recognition Awards--the Desjardin Youth Financial Literacy Award, the Dora Maxwell Social Responsibility Award and the Louise Herring Philosophy in Action Award. The winners advance to CUNA’s national competition. They were:
* Neighbors FCU, Baton Rouge; Desjardin Youth Financial Literacy Award; * Ouachita Valley FCU, West Monroe; Dora Maxwell Social Responsibility Award; and * Louisiana FCU, La Place; Louise Herring Philosophy in Action Award.
Louisiana credit unions were recognized with Excellence in Marketing Awards for outstanding marketing and communications efforts. The Excellence in Marketing Awards Program received a record number of entries this year. In $20 million or less category, winners were:
* Calcasieu Federal Employees FCU, Lake Charles; Best Newsletter; * Calcasieu Federal Employees FCU, Best Annual Report; and * Internal Revenue FCU, New Orleans, Best Website.
In the $20 million to $60 million category, winners were:
* Access of Louisiana FCU, Westlake; Best Newsletter; * Access of Louisiana FCU, Best Annual Report; and * Ascension CU, Gonzales; Best Website.
In the $60 million-plus category, awards winners were:
* CSE FCU, Lake Charles; Best Newsletter; * Dow Louisiana FCU, Plaquemine; Best Annual Report; and * The New Orleans Firemen’s FCU, Best Website.

Filene study CUs have opportunities to differentiate themselves

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MADISON, Wis. (8/13/10)--Credit unions have many opportunities to differentiate themselves from other financial institutions, according to a recent Filene Research Institute study. Filene has released, “Why Choose a Credit Union: An Ethnographic Study of Member Behavior,” and the first-ever audio interview or podcast for Filene with the study’s author, Stefanie Norvaisas. Norvaisas, director of research at Design Concepts, visited seven credit unions of various asset sizes and fields of membership nationwide. At each credit union, Norvaisas and her research team conducted up to a half dozen in-home, in-depth interviews with members and a similar number of in-credit-union interviews with staff members. Most consumers said they chose their credit union because of price, convenience, service and trust. However, many also didn’t understand what a credit union was or the value of membership. Many consumers also had relationships with other financial institutions, and were “hard-pressed to describe real meaningful differences,” Norvaisas said. Some consumers had chosen credit unions based not on age or income, but what was happening in their lives--like a difficult financial event, such as divorce. Norvaisas suggested that credit unions look at members’ behaviors to better serve them. Instead of saying, “What checking account do they need?” they should ask, “How can we help them pay their bills?” she said. Credit unions should have individual identities for each of their branches that are tailored to supporting the local community. Also, make sure to put things in terms people understand, Norvaisas said. For example, most consumers she talked with assumed financial advisers were only for the wealthy--instead of using the term “financial adviser,” perhaps try “financial coach,” she added. Ethnographic research can be an interesting tool, and the credit unions involved in the study said it was incredibly valuable. “There were lots of surprised reactions,” Norvaisas said. “They couldn’t believe what members said. Members’ needs were different than what [credit unions] expected.” Overall, Norvaisas said credit unions are uniquely positioned to help people and can use studies such as ethnographic research to attract members and help them improve their lives. “[Credit unions] are positioned to make a difference in people’s lives,” she said. “They are nonprofit, cooperatives, members are owners, and credit unions can pull the members in to help credit unions shape their [own] futures.” For more information or to listen to the podcast, use the link.

Richmond paper Look at CU deals Cheney tells why

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RICHMOND, Va. (8/13/10)--Credit unions historically have offered better rates and terms on financial products than banks, and consumers should include them in their search for the best deals, according to a Richmond, Va., newspaper. The article features CUNA President/CEO Bill Cheney, who explains how the credit union difference translates into savings for consumers. Informa Research Services Inc., a California-based market research company that tracks 3,500 financial institutions nationwide, including 500 credit unions, provided the Richmond Times-Dispatch (Aug. 8) with a comparison of credit union and bank rates and fees as of July 27: According to the newspaper, the comparison indicates that on average:
* A $2,500 checking account has a 0.34% annual percentage yield (APY) at credit unions, compared with a lower 0.25% at banks: * A $1,000 regular savings account has a 0.31% average APY at credit unions, compared with 0.26% at banks; * A one-year $10,000 certificate of deposit has a higher 0.96% average APY at credit unions, compared with 0.82% at banks; * A five-year new-auto loan has a 4.64% average rate at credit unions, compared with 5.98% at banks; and * Overdraft fees on checking have a $25.29 on average at credit unions, compared with $29.35 at banks.
“Credit unions generally have more competitive rates on loans and more generous rates on deposits,” Greg McBride, senior financial analyst at Bankrate.com., told the paper “Since we don't have shareholders, we don’t have to pay dividends,” Bill Cheney, president/CEO of Credit Union National Association, told the paper. That translates to savings for members, the paper added. “There’s not a one-size-fits-all answer for everyone,” McBride concluded. “However, credit unions do warrant being included in your search, whether you're looking to move your entire banking relationship or just looking for the most competitive loan rate.”

Coosa Pines Jefferson Community Development FCUs merge

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CHILDERSBURG, Ala. (8/13/10)--Coosa Pines FCU and Jefferson Community Development FCU have merged, with Coosa Pines as the remaining credit union. The merger was effective May 31 and the conversion of accounts was completed July 31. Coosa Pines is located in Childersburg, Ala. Jefferson Community had assets of $1.6 million and one location in Roebuck, Ala. Coosa Pines ended July 2010 with assets of $185 million and more than 20,000 members. Coosa Pines FCU now has five branches in Chelsea, Childersburg, Pell City, Roebuck and Sylacauga. The merger will now include membership to those in Jefferson County. The two credit unions merged because they have similar visions. Brant Malone, president/CEO of Coosa Pines, said the credit union is “consistently looking for areas of future growth and diversification of our membership base.”

Cheney in IHuffPoI Frustrate the bankers help the economy

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WASHINGTON (8/13/10)--The banks are at it again, putting their interests ahead of those of consumers and small business owners, Credit Union National Association (CUNA) President/CEO Bill Cheney said in a blog post on The Huffington Post Thursday. It’s time for the U.S. Congress to thwart the banks’ selfishness, and help the country, by giving credit unions greater authority to make more business loans, he wrote. In his blog posting titled “Frustrate the Bankers, Give Credit Unions More Biz-Lending Authority,” Cheney said, “You have to wonder what bankers are thinking, especially since just last week the government reported the nation shed more than 130,000 jobs in July--adding to the concern that more needs to be done to prevent the economic recovery from stalling.” He noted that when Congress finally broke for its summer home-district work period this week, banks had not budged from “stubbornly blocking a commonsense approach for creating more jobs: legislation that would give credit unions more authority to make business loans.” CUNA and credit unions are urging lawmakers to raise the caps on member business lending (MBL) at credit unions. Credit unions are capped at making no more than 12.25% of their assets in MBLs. Congress will return to session on Sept. 13, and credit unions should make good use of each day before that to advocate to lawmakers on their home turf for an increased credit union MBL cap, Cheney has urged. Cheney said credit unions should use the current August District Work Period to meet with senators on their home turf and seek support for the MBL increase. Use the opportunity to refute banker rhetoric in opposition to an amendment by Sen. Mark Udall (D-Colo.) to a budget stimulus bill that would raise the caps to 27.5%, Cheney said. CUNA estimates that lifting the caps would create more than 100,000 new jobs, and inject $10 billion into the economy. “There is no public policy reason not to permit credit unions to do more lending to their members who own or want to start small businesses,” Cheney added. “In fact, credit unions have proven for years they are capable of making these types of loans safely and soundly.” For more information, use the link.

Former CUNA leader Mica wins Wegner award

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WASHINGTON (8/13/10)--Daniel A. “Dan” Mica, former president/CEO of the Credit Union National Association (CUNA), is the winner of the 2011 Herb Wegner Memorial Award for Individual Achievement, presented by the National Credit Union Foundation (NCUF). The honor to Mica will be one of three awards presented at the 23rd Annual Herb Wegner Awards Dinner hosted by NCUF at the Grand Hyatt Washington on Feb. 28-- Monday night of CUNA’s 2011 Governmental Affairs Conference. Online registration for dinner tickets will be available later this year on the NCUF website.
Click to view larger imageCUNA President/CEO Dan Mica (right), testified before the House Financial Services Committee on small business lending in May, and told lawmakers that credit unions could do a lot for the U.S. economy if the statutory cap on member business lending was increased. To Mica’s right is Paul Atkins, a member of the Congressional Oversight Panel and former Securities and Exchange Commissioner. (CUNA photo)
“I am deeply humbled by and immensely appreciative of this great honor,” Mica said. “Throughout my tenure as CUNA CEO, I gave my entire heart and soul to the movement, as I became a true believer in credit unions--and I will remain so the rest of my life.” NCUF cited Mica’s efforts to preserve credit union access for millions of consumers, safeguard an independent federal credit union regulator and system, protect credit unions’ federal tax exemption, spearhead a successful challenge to the Internal Revenue Service (IRS) over unrelated business income tax (UBIT), garner unprecedented national positive press for credit unions, move credit unions to the forefront of financial literacy, raise credit union political involvement to the highest levels and other achievements. “The most significant thing about Dan is that he took credit union people into his heart,” said Mike Mercer, CUNA vice chairman and Georgia Credit Union Affiliates president/CEO. “He could have exercised commendable leadership from the stage and from his perch on Pennsylvania Avenue. But, something happened to Dan that I don’t think he anticipated. He became genuinely attracted to the philosophy and good deeds that he encountered in the credit union world. When he was defending credit union issues on the Hill or in the press, he was speaking with genuine emotion for what he believed to be right.” “Dan has demonstrated personal commitment, inspirational leadership, and innovation that have been second to none in the credit union movement in the past 14 years,” said Jeff Post, president/CEO of CUNA Mutual Group. “Without question, credit unions, their members, and the entire credit union movement have benefited from his vision, passion, political savvy and enduring spirit.” “Everyone knows about his work to preserve the credit union tax exemption, the Hike the Hill program, Project Zip Code and Credit Union House,” said Pete Crear, president/CEO of the World Council of Credit Unions (WOCCU). “Not enough people know what a wonderful international ambassador for credit unions he has been throughout his tenure at CUNA. His opinion is much valued by the Aussies, the Canadians, and the Irish among many, many others. He has served as the chair of the World Council CEO Roundtable and recently hosted the inaugural WOCCU G-10 (ten largest members) gathering.” Dan Mica’s key accomplishments as CUNA president/CEO:
* Preserving credit union access for millions of consumers; * Safeguarding an independent federal credit union regulator and system; * Protecting credit unions’ federal tax exemption; * Winning an eight-year battle for bankruptcy abuse reform legislation; * Ensuring credit unions are part of balanced regulatory relief legislation; * Raising political involvement to new levels and establishing credit unions as a powerful, ongoing, and highly visible presence in Washington; * Spearheading a successful challenge to the IRS over UBIT; * Garnering unprecedented positive national press attention for credit unions; * Changing numerous NCUA rules (with significant business/cost implications for credit unions) for the better; * And doing the same at other key federal agencies with an impact on credit unions (Defense Department, Small Business Administration, Federal Reserve, Labor Department); * Establishing unique and comprehensive compliance resources for credit unions; * Advancing programs to help lower-income and minority members; * Moving credit unions to the forefront of financial literacy; * Serving as a critical catalyst for system-wide thought leadership; * Creating the Credit Union System National Disaster Preparedness Plan; and * Turning CUNA Strategic Services into a success story that annually saves credit unions millions of dollars.

CU System brief (08/12/2010)

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* TALLAHASSEE, Fla. (8/13/10)--Southeast Corporate FCU’s board has appointed Peter Giorgianni, chief operating officer of Railroad and Industrial FCU in Tampa, Fla., to its supervisory committee. Giorgianni oversees branch operations, internal audit, human resources and training, and the call center at Railroad and Industrial FCU. He previously worked as a manager of a finance company and at Eastern Financial Florida CU, now Space Coast CU, in Fort Lauderdale, Fla. Southeast Corporate FCU is based in Tallahassee, Fla. (Photo provided by Southeast Corporate FCU) ...

New shared branches fill gap in Calif. high desert

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ONTARIO, Calif. (8/12/10)--Nearly 200 credit unions with more than 30,000 members in the high desert cities of Hesperia and Apple Valley, Calif., won't be cut off from shared branching after actions taken by several California credit unions and organizations. Financial Service Centers Cooperative Inc. (FSCC), Cardtronics, and a group of California credit unions ensured that shared branching would still be available despite the recent sale of four Arrowhead CU branches in the area. Arrowhead's branches had been active shared branch outlets prior to their sale. FSCC announced the first location is a full-service, in-store branch operated by Vons CU, in Hesperia. The second is a Vcom terminal in the 7-Eleven store in Apple Valley. FSCC also worked with its shared branching partner Cardtronics to have a Vcom terminal deployed on July 26 in Apple Valley. Vcom terminals are self-service, full-function kiosks located inside select 7-Eleven stores branch with the added convenience of 24/7 access. Although Vcom terminals rarely are moved, Cardtronics offered to help when FSCC said Apple Valley members might not have access to shared branching. “This could have been a devastating situation for thousands of members and a black eye for the concept of credit union cooperation,” said Sarah Canepa Bang, FSCC president/CEO. “We’re extremely blessed to have collaborative partners like Vons CU and Cardtronics who were willing to join us in jumping to the aid of members in the California high desert." About a dozen California shared-branch credit unions are working with FSCC to bring more shared branches to the area.

Mass. governor signs bill to remove deposit cap

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MARLBOROUGH, Mass. (8/12/10)--Massachusetts Gov. Deval Patrick has signed the Massachusetts Credit Union League's legislative filing to remove deposit caps for credit unions into law. The league reported that Senate Bill 468, "An Act Relative to Credit Union Shares and Deposits," was signed on Monday. The bill passed the state legislature on July 31, according to the document signed. It removes the deposits limit under which state-chartered credit unions in Massachusetts operated. The measure provides credit unions the opportunity to meet demands of members who preferred to invest more with their credit union but had been denied the opportunity because of the arbitrary cap, the league said (News Now Aug. 6). The law, which will be effective on Nov. 7, was introduced by Sen. Benjamin B. Downing (D-Pittsfield).

McGrath sentencing in CU Mortgage Corp. fraud delayed

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NEWARK, N.J. (8/12/10)--The sentencing date has been postponed again for former U.S. Mortgage/Credit Union National Mortgage Co. President Michael McGrath, who pleaded guilty last year to the fraud of $139.6 million from 28 credit unions, Fannie Mae, and others. The latest entry on the court docket, for July 21, in McGrath's case in the U.S. District Court of New Jersey says the sentencing was postponed to Oct. 15 due to scheduling conflicts on the part of the U.S. Attorney in the case. U.S. District Judge Katharine S. Hayden is to determine whether to accept the sentencing recommendation of 12 1/2 to 20 years in prison. McGrath remains free on bail until the sentence is imposed. He pleaded guilty in June 2009 to one count of mail and wire fraud and one count of money laundering conspiracy stemming from the fraudulent sales of hundreds of mortgage loans to Fannie Mae without authorization and without paying the credit unions for the sales. McGrath admitted to conspiring with others from January 2004 to January 2009 to fraudulently sell credit union loans and use the proceeds to finance U.S. Mortgage's operations and investments for himself and his company. He also admitted to diverting funds that should have been paid to credit unions for mortgage loans sold without authorization to Fannie Mae to help offset bad investments in mortgage-backed securities (Reuters June 11, 2009). Both U.S. Mortgage and Credit Union National Mortgage, which were based in Pine Brook, N.J., filed for Chapter 11 bankruptcy during February 2009 in Newark. They listed more than $200 million in debts to Fannie Mae and the 28 credit unions. The bankruptcies have led to several lawsuits by credit unions seeking to recoup losses against Fannie Mae and against insurance companies. Since McGrath pleaded guilty in 2009, eight sentencing dates have been set and postponed: Oct. 1, 2009; Nov. 30, 2009; Feb. 1; March 22; April 19, May 18, July 6, and July 27.

NASCUS summit to spotlight state system innovation

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ARLINGTON, Va. (8/12/10)--The state credit union system’s leaders, state and federal regulators and dual-chartering supporters will join the National Association of State Credit Union Supervisors (NASCUS) for its annual State System Summit, Sept. 30 through Oct. 2 in San Antonio. The event’s educational sessions will feature system leaders discussing key issues that must be addressed to preserve and strengthen state credit unions, NASCUS said. General session and workshop agenda items scheduled include:
* What’s Next for Credit Union Share Insurance?--John Annaloro, Washington Credit Union League, president; * National Credit Union Administration (NCUA) Outlook for 2011--Debbie Matz, NCUA chairman; * The Credit Union National Association’s (CUNA) Outlook for 2011--Bill Cheney, CUNA president/CEO; * Economic Update and the Emerging Risks Facing Credit Unions--Jeff Post, CUNA Mutual Group CEO; * State Credit Union Innovation--Royal CU’s Purchase of Bank Branches--Charles Grossklaus, CEO of Royal CU, Eau Claire, Wis., and Suzanne Cowan, director, Wisconsin Office of Credit Unions; and * The Emerging Regulatory Giant--What Regulatory Reform Means for State Credit Unions and State Authority--Bruce Jolly, NASCUS outside counsel.
NCUA national and regional staff will join NASCUS state regulators for the NASCUS/NCUA Interagency Dialogue Oct 1. For credit union attendees, the annual “State Credit Union Issues Briefing” will provide a forum for discussion on the latest credit union challenges, including the search for income and the changing nature of credit union service organizations. Also, NASCUS’ Directors College will take place Sept. 29. For more information, use the link.

CU System briefs (08/11/2010)

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* ST. LOUIS (8/12/10)--More than 12 employees and board members of seven Missouri credit unions met with U.S. Rep. William Lacy Clay (D-Mo.) for an in-district meeting Aug. 6 (The Missouri difference Aug. 11). Clay expressed concern for minorities and lower-income residents who lack financial services options, and credit unions shared their community outreach efforts. Clay asked how the Dodd-Frank Wall Street Reform and Consumer Protection Act affects credit union operations. Attendees explained concerns with the debit-card interchange provision and implementation of a two-tiered fee system. They also explained credit unions' affordable services and free financial education, and the philosophical differences between credit unions and banks. Clay, right, shown with Tom Sullivan of St. Louis Community CU, said he would consider assisting with the Federal Reserve rulemaking process on interchange. Also discussed was member business lending and overdraft protection, said the Missouri Credit Union Association. (Photo provided by the Missouri Credit Union Association) ... * HARRISBURG, Pa. (8/12/10)--Lehigh Valley (Pa.) credit unions met Tuesday with Mike Horton, Democratic candidate for the Pennsylvania House of Representatives in the 131st District, in a meet-and-greet at Allentown-based People First FCU. A member of the credit union, Horton said his door would always be open to credit unions (Life is a Highway Aug. 11). He told the group he opposes increasing financial regulations, is impressed with the Credit Union Better Choice (payday lending alternative) program and supports lifting the member business lending cap. Attending were representatives of People First FCU, First Commonwealth FCU and Lehigh Valley FCU, and Christine Seitz, director of political affairs and fundraising at the Pennsylvania Credit Union Association. A similar meeting was held last month with Republican candidate Justin Simmons ... * GREENSBORO, N.C. (8/12/10)--The North Carolina Credit Union League was among the listed sponsors for North Carolina's State Night during the annual Southern Legislative Conference in Charleston, S.C. The meeting attracted legislators from throughout the South for leadership training. Pictured are, from left, Lauren Whaley, league director of legislative and regulative affairs, and Amy Fullbright of Hunton & Williams, who lobbies on behalf of the league. "A less formal setting away from the legislature allows our lawmakers to have more casual conversations with their business constituents," Whaley said in the league's newsletter (Weekly Update Aug. 6). (Photo provided by the North Carolina Credit Union League) ... * MAPLE GROVE, Minn. (8/12/10)--TopLine FCU 's financial experts were invited to lead personal money management sessions at the 2010 Minnesota State Colleges and Universities (MNSCU) Leadership Forum, held in June at North Hennepin Community College, Brooklyn Park, Minn. One-hundred attendees represented MNSCU student leaders graduating with two-year degrees. TopLine's session, "The Real World of Personal Money Management," included how to use credit wisely; what a credit score means;how to build and maintain a good score; where to obtain a copy of a credit report and how to read it; budgeting tips; and strategies to reduce debt and prevent identity theft. They also learned how their actions today can impact future financial options ...

CUs surpass goal of reaching 400000 students

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HARBOR, Ore. (8/12/10)--Credit unions reached more than 400,000 students during 2009-2010, according to data collected by the National Youth Involvement Board (NYIB). Credit unions reached 413,460 students in 13,577 classroom presentations. The numbers increased for a second consecutive year despite fewer presenters reporting data at www.nyib.org. The number of students reached and presentations during the period grew by 6.3% and 7.3%, respectively, despite the number of presenters dropping to 476, a 6.7% decline. However, several credit unions are choosing to enter presentations as a team instead of individually. Averaged over five years, credit unions are posting annual increases of 9.98% in presentations given and 10.4% in students reached, NYIB said. Youth advocates in the NYIB network turned in their largest recent increase in students reached of 29.4% in 2007-2008, exceeding 300,000 students reached. Credit unions’ consistent performance despite recent economic pressure has been reassuring and rewarding to NYIB leaders. “Credit unions have responded to young people seeking guidance and fundamental financial knowledge, and not a moment too soon,” said NYIB Chairman Rebecca Isaacs, director of business development at the Credit Union Association of New Mexico. “Now is the time for our institutions to assert their uniqueness with young people. NYIB will continue to do all we can as a cooperative network to help each credit union do just that.” Anissa Arthenayake of OSU FCU, Corvallis, Ore., conducted the most classroom presentations--614. Marsha Lunden of Desert Schools CU, Phoenix, reached the most students--14,648--in the 2009-2010 reporting year. The NYIB “Top Classroom Presenter”--the person with the greatest percentage increase in classroom presentations over the previous year--was Natalie McLaughlin of Community Financial CU, Plymouth, Mich. In 2009-2010, she made 130 presentations, 150% more than in 2008-2009. “Most Students Reached” was achieved by Kim Beaulieu of Jeanne d’Arc CU, Lowell, Mass., whose 4,584 students reached was a 400.98% increase over 2008-09.

LCUL inducts 12 into CU Hall of Fame

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HARAHAN, La. (8/12/10)--The Louisiana Credit Union League (LCUL) inducted 12 individuals into the Louisiana Credit Union Hall of Fame at the league’s 2010 Annual Meeting and Convention, Aug. 4-7, in New Orleans. The hall of fame was established to recognize the leadership, commitment, dedication and contributions of credit union professionals and volunteers statewide. The 2010 inductees are:
* Fred Banks, inducted by Livingston Parish FCU, Denham Springs; * Donald T. Bock, The New Orleans Firemen’s FCU; * Guy C. Comes, Post Office CU, New Orleans; * Betsy Hooper, LA Capitol FCU, Baton Rouge; * Charles M. Johnson, LCUL Board of Directors; * Charles W. Kramer, ANECA FCU, Shreveport; * Susan Parry Leake, LA Capitol FCU; * Hattie B. Johnson, Livingston Parish FCU; * Cora K. Pania, SAIF FCU, Baton Rouge; and Livingston Parish FCU; * Carolyn Ricks, LCUL staff; * Richard Turnley Jr., Southern Teachers & Parents FCU, Baton Rouge; and * Donna J. Wagoner, Ouachita Valley FCU, West Monroe.
A $500 donation on behalf of the inductees will be made to the Louisiana Credit Union Foundation. The donation will help foster educational programs for credit unions and provide resources to Louisiana credit unions during natural disasters.

NYIB elects leaders for 2010-11

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ST. LOUIS (8/12/10)--Rebecca Isaacs, director of business development at the Credit Union Association of New Mexico, will serve as the National Youth Involvement Board (NYIB) chair for 2010-2011. NYIB provides a platform for credit union educators to report their presentations to classrooms and other youth events. A volunteer
Click to view larger image The National Youth Involvement Board’s new executive committee and regional coordinators for 2010-2011 include: left, Brandon Pugh, chairman emeritus; Rebecca Isaacs, chairman; Lauren Mayhew, marketing director at Daviess County Teachers FCU; Juli Lewis, secretary; Julie McLean, South West regional coordinator; Mary Ann Demczak, vice chairman; Cynthia Campbell, treasurer; and Adam VanCleave, media manager. (Photo provided by the National Youth Involvement Board)
network of more than 700 credit union professionals, NYIB also collects and shares materials, resources and insight to help educate youth and attract young members. Isaacs was elected during the NYIB 2010 annual meeting July 26. She previously served two terms as South West regional coordinator. Brandon Pugh, director of communications and public relations at the South Carolina Credit Union League, will continue for a year with the executive committee seving as chairman emeritus. Regional coordinators elected to two-year terms include:
* South East: Juli Lewis, youth marketing manager at Suncoast Schools FCU, Tampa, Fla.; * South Central: Cynthia Campbell, associate vice president of financial empowerment at Tinker FCU, Oklahoma City; and * South West: Julie McLean, director of financial education at Arapahoe CU, Littleton, Colo.
Continuing the second years of their terms are:
* North West: Adam VanCleave, marketing specialist, Chetco FCU, Harbor, Ore.; and * North East: Mary Ann Demczak, financial counselor, Clearview FCU, Moon Township, Pa.
Lauren Mayhew, marketing director at Daviess County Teachers FCU, Owensboro, Ky., was elected to complete the remaining year of the unexpired term in NYIB’s North Central Region vacated by Pam Swope of FinancialEdge Community CU, Bay City, Mich. The executive committee also elected Demczak as vice chairman, Lewis as secretary, Campbell as treasurer and VanCleave as media manager. The group will meet Sept. 25-28 for its annual planning session.

CU System briefs (08/10/2010)

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* BATTLE CREEK, Mich. (8/11/10)--A person who robbed the Battle Creek, Mich., branch of American 1 FCU, shot a teller in the arm, and carjacked another employee is still at large, said the Emmett Township Department of Public Safety. The assailant entered the credit union through a window sometime after 8 p.m. Friday and confronted a teller who had arrived for work the next morning. The teller was shot while trying to escape, and his injuries were not life-threatening. Another employee arrived and the robber, who was covered head to toe, forced her from her car and stole the car. It was found later. The credit union's surveillance camera captured images of the robber. American 1 is headquartered in Jackson, Mich. (Battle Creek Enquirer Aug. 9) ... * LOS ANGELES (8/11/10)--A man convicted of helping steal nearly $80,000 from an ATM at the El Monte, Calif., branch of Los Angeles FCU was sentenced Monday to 190 months (nearly 16 years) behind bars (SGVTribune.com Aug. 9). Clinton Elwyn Thompson III, 47, was also ordered to pay restitution of about $124,000. A federal jury convicted him in May of conspiracy to use fire during the commission of a felony, bank larceny and use of fire during the commission of a felony. Several men were involved in the robbery, which involved using a high-powered thermal lance to cut an ATM in half. The robbery occurred on Jan. 28, 2008 ...

Schenk to IUSA TODAYI FIs must rebuild trust

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NEW YORK (8/11/10)--An article in Tuesday's USA TODAY about banking regulators and others encouraging low-cost bank and credit union "second chance" checking accounts featured a Credit Union National Association (CUNA) senior economist. One of the issues is the distrust that underbanked or unbanked consumers have of mainstream financial institutions and their fees, especially overdraft fees. Rebuilding trust with consumers who have had bad experiences with mainstream financial institutions "is definitely a hurdle we have to overcome," said Mike Schenk, CUNA vice president of economics and statistics, in the article. Some financial institutions are trying to clear that hurdle by teaming up with social services groups that work with low-income families. One example cited is the National League of Cities' "Bank On Cities" campaign, which helps participating communities setup partnerships with banks and credit unions to develop safe and affordable financial products for the unbanked and underbanked. Credit unions are participating in several cities. Such services provide a second chance for consumers who've bounced checks in the past, the article said.

Merchants up NSF fees by 20 says survey

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LAKE BLUFF, Ill. (8/11/10)--National retail merchants have boosted their nonsufficient funds (NSF) fees by 20% for checks consumers write that get returned for insufficient funds, according to a recent annual survey. Merchants now are charging a median fee of $30, compared with $25 in 2009, said Moebs Services, which conducted the study (alphatrade.com Aug. 10). “This is the highest percent increase we have ever seen national and retail merchants charge consumers for writing a bad check,” said Michael Moebs, CEO and economist at Moebs Service, a national economic research firm, based in Lake Bluff, Ill. Retailers’ fees now surpass banks’ and credit unions’ median fee of $27 for an NSF, he said. The Moebs study mentions two contributors to the 20% price increase:
* Merchants, like their customers, are hurting because of the economic recession. The substantial fee increase offsets costs and creates a more profitable bottom line. * Merchants do not want to be bothered with the cost of processing paper checks, and prefer debit cards and e-checks.
With the higher NSF fees coming in the midst of the back-to-school and vacation seasons, consumers need to be cautious about how they manage their checking accounts, Moebs said. Consumers should verify they have available funds to prevent double-dip fees and hits to their FICO scores, Moebs said. The new regulations on overdraft fees go into effect Sunday. Also, whether or not consumers opt-in for overdraft protection, they should sign up to receive an e-mail or text message alert when their checking account balance falls below a certain amount, he said.

September is National Preparedness Month

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MADISON, Wis. (8/11/10)--September is National Preparedness Month, which encourages Americans to take steps to prepare for potential emergencies in their homes, businesses and communities. The month also is an opportunity for credit unions to review their business continuity plans. The awareness month is sponsored by the Ready Campaign in partnership with Citizen Corps and the Ad Council. The Ready Campaign has several tips that businesses and credit unions can use to prepare for emergencies. The campaign suggested that businesses:
* Know what kind of emergencies could affect them. Emergencies include more than disasters. For example, they can be a broken water pipe, a power loss or a faulty server; * Carefully assess how the business functions, internally and externally; * Stock the business with emergency supplies, like fresh water, food, clean air and warmth; * Make plans for shelter or evacuation; * Be prepared for fires, medical emergencies, and pandemics such as influenza.
All employees should be involved in emergency planning and business continuity. The campaign also encouraged writing a crisis communication plan; promoting preparedness through employees and families; practicing a disaster plan; and supporting employee health by recognizing that individuals who have experienced a disaster may have special recovery needs. CUNA Strategic Services provider Agility Recovery Solutions will offer several free webinars to help credit unions with business continuity planning. The webinars will be offered Wednesdays at 1 p.m. CT throughout September. The webinars include:
* Business Preparedness: Can You Go Alone for 72 Hours? Sept. 1, with R. David Paulson, former administrator of the Federal Emergency Management Agency (FEMA); * Private Sector Preparedness Certification Program: What are the Advantages for a Small to Medium-sized Business? Sept. 15, with Marcus Pollock, operations officer, FEMA; * Business Preparedness: Both Inside and Outside of Your Organization, Sept. 22, with Jackie Snelling of the Individual and Community Preparedness Division/Citizens Corp. * Survivors’ Panel: Businesses Who Survived Disasters Speak on Lessons Learned, Sept. 29.
For more information, use the links.

San Francisco CUs make loans for taxi medallions

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SAN FRANCISCO (8/11/10)--Three San Francisco-area credit unions and one out-of-state credit union are part of a consortium of lenders making loans to facilitate sales of San Francisco taxi medallions (licenses) by taxi drivers, a move that could add millions of dollars to city coffers. San Francisco FCU, San Francisco Fire CU, San Francisco Police CU and Montauk CU, New York City, are part of the consortium (San Francisco Business Times May 20). Under the pilot program, taxi drivers who are at least 70 years old or who have a disability can sell their medallions--which will be priced at $250,000. Drivers will keep 80% of the sales revenue, the citys municipal agency will get 15% and a drivers fund will receive the remaining 5%. Up to 300 medallion-holders could qualify to sell during the trial phase of the program, which means San Francisco could garner $11.2 million if all the medallions sell, the Times said. Since 1978, when voters codified the city taxi laws, medallions were issued to drivers in exchange for a small fee. However, until now, drivers who had medallions were not given a mechanism to cash out on the lucrative licenses, the Times said. A taxi advisory council will observe the pilot program and likely will determine in 2011 if the pool of potential medallion sellers should be expanded, the city told the Times.

Study Fewer consumers opening card accounts

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COSTA MESA, Calif. (8/11/10)--Consumers are opening 26% fewer cards than they did three years ago, according to a new study by Experian, a global information services company. “As expected with the current financial environment, we can see that the average person has fewer cards... and is using credit differently than in the past,” said Michele Raneri, senior director of analytics, Experian. “This implies that many American consumers are relying less on cards and potentially trying to pay down debt.” According to the Credit Union National Association’s U.S. Credit Union Profile for first quarter 2010, the credit card growth rate at credit unions for the first quarter of 2010 was 7.4%, compared with 6.4% in 2009 and 7.6% in 2008. The growth rate in 2007 was 13.5%. The Experian study also revealed that out of the top metropolitan areas Experian studied, the number of open-ended bank cards was typically greater than retail cards, except for Pittsburgh; Miami; Columbus, Ohio; and Atlanta. New Yorkers have the most open cards, while Phoenix residents have the fewest. The highest average monthly balance is $6,753 on revolving accounts in Atlanta. San Francisco and Houston have the lowest average monthly balances, with $5,323 and $5,328 respectively. Experian also shared some tips for using credit wisely:
* When you are extended a line of credit, use it, carefully and make payments on time; * Set up a budget and stick to it; * Shop around for credit. Lower interest rates, lower or no annual fees, cheaper service charges and additional benefits such as frequent flier miles or special insurance rates are available; and * Once you sign a credit agreement, you are responsible for it unless the creditor agrees to release you from the agreement.

Cash is catalyst for economic turnaround says speaker

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PLANO, Texas (8/11/10)--Business earnings will guide the U.S. economic recovery, but until corporations begin spending more cash, those earnings lack the momentum to spark a recovery, according to Don Reynolds, founder of 21st Century Forecasting and an encore presenter at Southwest Corporate FCU’s upcoming 33rd annual Economic Forum. The Federal Reserve recently reported that America’s 500 largest nonfinancial corporations have amassed $1.8 trillion in cash on their balance sheets--the highest level in nearly 50 years. Funneling that cash back into new construction, equipment and employees would go a long way toward energizing the economy, he said (eFacts Aug. 3). “According to Standard & Poor’s, these companies have an average of $1 in cash for every $10 in equity value,” Reynolds said. “They have fabulous balance sheets, and yet this cash is sitting in money market funds, because companies are uncertain which direction the country is headed.” Although business confidence is shaky, he said he believes that “over the long term, business earnings eventually will take the economy where it needs to go.” Reynolds projects that economic recovery is still five years away. He does not, however, subscribe to the belief that inflation is just around the corner (LoneStar Leaguer Aug. 9). “I don’t buy it,” he said. “Flight to quality will continue to keep downward pressure on interest rates. The giant question right now is whether deflation is coming.” Although inflation is not in his short-term forecast, he predicts an increase in energy prices as a result of growing demand. “In India, oil consumption averages two barrels per person per day. In China, oil consumption averages 0.2 barrels per person per day. Americans, on the other hand, consume an average of 25 barrels of oil per person, per day.” Reynolds identified three other questions that could impact the speed of the U.S. economic recovery. They are:
* Is China headed for an economic downturn? * Is the euro national debt crisis that began in Greece going to snowball? and * What happens when the Obama administration’s stimulus package ends?
Reynolds’ research firm concentrates on long-term global, economic, demographic and technological trends, and he is often described as a “real world economist.” He has worked for three of the nation’s largest brokerage firms, served 11 years as chairman of the investment advisory board at a $22 billion trust fund, taught at the university level for 10 years, and served on a university board of regents. Southwest Corporate FCU’s 33rd annual Economic Forum will be held Oct. 26-27 in Frisco, Texas.

LSCU plans webinarworkshop on CUs oil spill response

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TALLAHASSEE, Fla. (8/11/10)--A workshop/webinar on the "Credit Union Response to the Gulf Oil Spill" is planned for Aug. 30, according to the League of Southeastern Credit Unions (LSCU). The event will be at 1 p.m. to 4 p.m. CT at Pen Air FCU, Pensacola, Fla., and will be available with a phone-in option. "The effects of the British Petroleum (BP) oil spill in the Gulf of Mexico will be felt for years to come," said Mike Bridges, LSCU's vice president of communications. "As Labor Day approaches, the main tourist season for the Gulf Coast ends, and small businesses will need help as they try to stay afloat until industries and tourism return to the area." Credit unions have an opportunity to make small-business loans to many of the Gulf Coast businesses and serve as a resource for them as they work with BP to file claims, said the league. Bridges says the workshop/webinar stems from a meeting last month with National Credit Union Administration (NCUA) Region III Director Herb Yolles and his staff. The group discussed the devastation along the Gulf Coast and the need for flexibility in lending to those hardest hit in the area. The league is working to have regulators from Alabama, Florida and NCUA take part. The workshop will address ways credit unions can serve as resources for small businesses, best practices, and what credit unions are hearing from their members. The event will be open to all credit unions.

MDDCCUA names pro volunteer of the year

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COLUMBIA, Md. (8/11/10)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) has named its 2010 Professional and Volunteer of the Year. Lois Profili, president/CEO of First Eagle FCU, Owings Mills, was awarded the Professional of the Year Award. Herman Williams Jr., chairman of MECU of Baltimore, was awarded the Volunteer of the Year Award. Profili received her award during the MDDCCUA board meeting Aug. 6 and MECU’s vice chair accepted the award on Williams’ behalf at a conference in June.
Click to view larger image Lois Profili accepts the 2010 Professional of the Year Award presented by Maryland and District of Columbia Credit Union Association (MDDCCUA) President Mike Beall (left) and Miguel Boluda, MDDCCUA chair. (Photos provided by the Maryland and District of Columbia Credit Union Association)
Profili started as a bookkeeper at her credit union. During her tenure as CEO, which began in 2001, the credit union grew to $70 million in assets and more than 10,000 members. Williams became a volunteer in 1990, and chairman in 1992. When he found out the credit union lacked access to cash and ATMs, he changed the culture of the credit union to promote access and social responsibility and encouraged the first U.S.-United Kingdom partnership. During his tenure as chairman, the MECU of Baltimore grew to $1 billion in assets from $325 million and to more than 95,000 members from 52,000.

CU attempts to block liquidation order

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WASHINGTON and ALEXANDRIA, Va. (8/10/10)--A hearing today in a U.S. District Court for the District of Columbia will determine whether a Texas-based virtual credit union that was placed into liquidation last week will get an injunction to prevent the National Credit Union Administration (NCUA) from carrying out the liquidation. Contrary to rumors yesterday, the judge had not issued a temporary restraining order (TRO) Monday on behalf of Kappa Alpha Psi FCU (KAPFCU) against NCUA. "The court did not issue a TRO. That is inaccurate," John McKechnie, director of public and congressional affairs at NCUA, told News Now Monday evening. Today's hearing before U.S. District Judge Emmet G. Sullivan will determine whether the Henderson, Texas-based credit union succeeds in blocking the liquidation. NCUA liquidated the $836,638 asset credit union on Aug. 3. Three days later, the credit union filed its action in the U.S. District Court, seeking the injunction, according to court documents. The community development credit union is affiliated with the African-American fraternity, Kappa Alpha Psi and was established on Nov. 4, 2004 to serve fraternity members and affiliated organizations. On Dec. 31, said the credit union, its net worth ratio was 0.58% . NCUA requires a newer credit union to be "adequately capitalized" (at 6%) within 10 years of its charter, according to the complaint documents filed. The credit union said it saw a "significant drop" in its net worth ratio between 2007 and 2009 that "was attributable to 'full accrual' accounting and NCUA Corporate Stabilization assessments," referring to NCUA's plan for the corporate credit union system. NCUA told News Now that isn't what led to the liquidation action. "Kappa Alpha Psi FCU was never able to generate consistent operational profits; build its net worth position; maintain its records in a sound manner; grant quality loans; or adequately collect on delinquent loans," said McKechnie. "Those factors led to the involuntary liquidation action that the NCUA Board took" on Aug. 3. "Newly founded credit unions have 10 years to reach an adequate capital level, which is a 6% net worth ratio; however, Kappa Alpha Psi FCU has never been able to show it can reach that level of capitalization," he told News Now. "Pertinent regulations state that if a credit union does not have reasonable prospects for becoming adequately capitalized, the credit union is subject to a variety of possible administrative remedies, including involuntary liquidation," he added. At the time of liquidation, the credit union "was operating under a Published Letter of Understanding and Agreement. NCUA has spent considerable time and resources in an attempt to help the credit union to achieve adequate capitalization; unfortunately, the effort was not successful," McKechnie said, noting that "involuntary liquidation was deemed the most appropriate course of action."

Constitution Corporate OTTI charges at 2.8 M

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WALLINGFORD, Conn. (8/10/10)--Constitution Corporate FCU recorded other-than-temporary-impairment (OTTI) charges totaling $2.8 million for the first six months of 2010, according to its unaudited financial statements for June 30. Year-to-date net income for the Wallingford, Conn.-based corporate credit union was $639,000, including the OTTI charges. This compares with a net loss of $63.2 million recorded for the first six months of 2009. The corporate attributed the improvement in earnings to a $61.5 million decline in OTTI charges from $64.4 million in 2009. The National Credit Union Administration authorized Constitution Corporate to operate with special regulatory assistance under a "Prior Undivided Earnings Deficit" (PUED), which segregates the retained earnings deficit to capture permissible accumulated deficit position. The PUED is guaranteed by the National Credit Union Share Insurance Fund. Constitution ended 2009 with a PUED of $25.1 million, which was reduced to $24.5 million as of June 30, as a result of the net income recorded for 2010. Its portfolio ended 2009 with realized and unrealized losses totaling $337.3 million. That amount was reduced by 11.6% to $298.3 million as of June 30. The corporate said that market conditions had firmed, resulting in improved market prices from its independent third-party pricing service. Through June 30, OTTI charges on investments of $122 million on 48 investment positions and $33.9 million of depleted U.S. Central capital were recognized in earnings. Beginning in March, Constitution began experiencing actual losses of principal, totaling $3.7 million, on its residential mortgage related securities. These losses were experienced on two bonds deemed impaired by Constitution and on which OTTI already has been recorded. It is estimated that five bonds may incur actual credit losses during 2010, aggregating about $14 million. For the full report, use the link.

Teller shot escaping burglar injuries minor

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BATTLE CREEK, Mich. (8/10/10)--An American 1 CU teller was shot in the arm, and another employee was carjacked at gunpoint Saturday by a robber who broke into the building overnight and waited for employees to show up for work. When a teller arrived at the Battle Creek, Mich., branch of the $172.5 million-asset, Jackson, Mich-based credit union, he was accosted by a suspect who had a handgun (www.woodtv.com and The Enquirer Aug. 8). The teller then fled the credit union, but was shot in the arm by the suspect, the local media said. He was taken to a Battle Creek Hospital. His injuries were considered minor, said the local media. The burglar forced another employee arriving for work at the credit union out of her vehicle at gunpoint. The suspect then fled in her vehicle. Police later found it nearby, the local media said. The FBI and local authorities are investigating.

Palisades FCU offers summer skip payment program

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PEARL RIVER, N.Y. (8/10/10)--Palisades FCU (PFCU) announced it is again offering its “Skip-A-Pay” program, in which members can skip their summer loan payments. The program debuted in 2008. Members who have PFCU loans and are in good standing can “opt-in” to skip up to two months of their loan payments. The designated months are August and September. Members have the choice to skip both months, one month or none (PR Newswire Aug. 4). “Not only are we helping our members, but we also are helping to stimulate the still- unstable economy,” said Palisades Chief Operating Officer Sean Jelen. “By allowing members to skip loan payments, we give them the ability to spend money during a time when they might not have been able to.” The program does not charge a fee. “We wouldn’t want to reduce the impact by adding a fee in order to skip,” Jelen said. “We enjoy being able to give our members a break on their payments. They deserve it.”

NYIB Network honors volunteer delegate of year

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MADISON, Wis. (8/10/10)--Professionals, including two chosen for exemplary work in youth marketing, youth education and leadership development, were recognized at the National Youth Involvement Board’s (NYIB) 2010 Annual Conference in late July in St. Louis. NYIB named Cynthia Campbell as the 2009 Delegate of the Year. Campbell, associate vice president of financial empowerment at Tinker FCU, Tinker AFB, Okla., serves on the Oklahoma Jump$tart Coalition Personal Finance Board, Council on Economic Education Board, and the Family and Consumer Science Curriculum Committee. She also is chair and co-founder of the Credit Union Association of Oklahoma Financial Literacy Council. “We put in our five-year plan what we thought was an audacious goal of reaching 500 to 600 students per month … Cynthia came on board and had almost doubled that,” said Tinker FCU President/CEO Michael Kloiber. Last year, Campbell reached more than 10,000 students and fulfilled numerous speaker requests at credit unions and financial education conferences. NYIB’s Outstanding Volunteer of the Year is Elda Olvera, financial supervisor at Randolph-Brooks FCU, Universal City, Texas, and a member of the NYIB network. In addition to averaging more than 260 presentations to over 4,100 students each of the past two years, she facilitates peer exchange through the NYIB list serve and uses social media. Olvera is credited with helping Randolph-Brooks FCU win its second Texas Credit Union Foundation FOCUS Award in 2010. She played a major role in designing, preparing and facilitating the credit union’s community “fiscal fitness day” for high school students and their parents. She also serves on a Judson Adult and Community Education Advisory Council, helping to improve the quality of life in the community through education. NYIB is accepting nominees for its 2010 recognition including the Delegate and Volunteer of the Year, and for scholarships to attend its NYIB Annual Conference, National Credit Union Foundation Development Education Training, and the World Council of Credit Unions Young Credit Union People Program. For more information, use the link.

Keesler to open Mississippis first student-run branch

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BILOXI, Miss. (8/10/10)--Keesler FCU is establishing a student-run branch at Biloxi (Miss.) High School, the first in-school branch in Mississippi, said the credit union. The branch, named Biloxi Indian CU, will be operated by five student tellers and supervised by a full-time Keesler FCU employee. The ribbon cutting ceremony was Monday (TheSunHerald.com Aug. 8 and WLOX Aug. 9). The $1.8 billion asset Keesler has worked with several high schools across the Mississippi coast the past decade, teaching students about finances. It developed its Money Talks program at Biloxi High. Money Talks is a four-week after-school program offered one or two times a semester, Sharon Keller, vice president of marketing, told The Sun Herald. The student-run branch, located in a converted classroom, will be open during students' lunch hour, 10:45 a.m. to 11:45 a.m., on school days. The tellers are seniors enrolled in Keesler's MoneyTalks Program. They also attended orientation and teller training. In lieu of wages, they earn course credit and community service hours.

Conn. CUs meet with Rep. Himes on MBLs

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MERIDEN, Conn. (8/10/10)--The Credit Union League of Connecticut and representatives from a dozen Connecticut credit unions met with U.S. Rep. Jim Himes (D-Conn.), who provided an insider’s update on congressional bills of importance to credit unions, including member business loans, job creation and the interchange fee issue.
Click to view larger image Tony Emerson (right), president/CEO of the Credit Union League of Connecticut, shares a point Thursday with U.S. Rep. Jim Himes (D-Conn.), who spoke in Bridgeport, Conn., about legislative issues important to credit unions. (Photo provided by The Credit Union League of Connecticut)
The league met Thursday with Himes, a member of the House Financial Services Committee, at a luncheon in Bridgeport, Conn. “Creating jobs rates high importance today,” Himes said. “Most jobs will come from small businesses, not the large corporations. We need to focus on enhancing the small business loan, particularly from credit unions, and raise the percentage cap. This is what will help create jobs and work toward improving the economy.” The luncheon was part of the league’s providing “year-round opportunities to build on relationships with legislators at periodic forums,” said Kelly Fuhlbrigge, Connecticut league vice president-government relations. “These exchanges also provide legislators with the credit union perspective on important issues.”

CU System briefs (08/09/2010)

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* SACRAMENTO, Calif. (8/10/10)--The California Department of Financial Institutions (DFI) has approved two mergers of credit unions, according to its Monthly Bulletin for July. Palo Alto Community FCU, a $12.8 million asset credit union in Palo Alto, will merge with and into San Mateo CU, a $585 million asset credit union based in Redwood City. Postal Credit Union of Northern California, a $6.8 million asset credit union based in Castro Valley, will merge with and into San Jose-based Pacific Postal CU, a $243 million asset credit union ... * GREENSBORO, N.C. (8/10/10)--The North Carolina Credit Union League has cancelled its credit unions' Hike the Hill scheduled for next month in Washington, D.C., so credit unions can focus on the upcoming elections. Congress has few working days left in its current session and is reluctant to tackle contentious issues before an election, the league said in its Weekly Update Friday. "It is unlikely that issues of major importance to credit unions will be considered, the league said. However, it will continue to monitor events in the nation's capital closely and keep its credit unions informed, the league said. The Credit Union National Association (CUNA) is urging credit unions to keep pushing their position on raising the member business lending cap to 27.5% from 12.25% of assets with their representatives in their districts. CUNA backs adding MBL language to a small business jobs bill currently pending in the U.S. Senate. The Senate returns to session Sept. 13 ...

The CU difference spotlighted by CUs media efforts

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MADISON, Wis. (8/9/10)--The credit union difference received the spotlight in a number of articles last week in various media, with several pointing out the growth opportunities in member business lending. "Credit unions emphasize their essential differences," an article in the Ocala (Fla.) Business Journal (July 30), featured the Credit Union National Association (CUNA) and the League of Southeastern Credit Unions (LSCU) discussing the reasons why credit unions "seem to toe the financial line better than banks," why credit unions are growing, and why credit unions need their member business lending cap lifted to 27% from the current 12.25% of assets. "The whole impetus for financial reform was to nail the bad actors in the financial business. Credit unions are not perceived as bad actors by the Congress," Pat Keefe, CUNA vice president of communications and media outreach, said in the article. Lifting the cap would be a "great opportunity. There's a lot of capital to lend and it would help small businesses immediately," said Patrick La Pine, president/CEO of LSCU, which serves Florida and Alabama credit unions. Philip Geist, Ocala rea director for the Small Business Development Center at the University of North Florida, told the publication that local credit unions are a good option for business loans. "That's an outstanding alternative lending source for small businesses," he said. Other articles:
* Investment Weekly News (Aug. 7) and other publications picked up the CO-OP Financial Services' press release on the top 10 reasons to choose credit unions over banks. Among the reasons: customer satisfaction with credit unions have consistently rated higher than for big banks for more than 20 years. * Richmond (Va.) BizSense.com (Aug. 5) reported that regulators approved the expansion of Richmond-based Call FCU to a community charter and discussed the complaints banks have about growing credit unions. According to CEO Roger Ball, "there is a niche for all of us. There's room for all of us to have a very successful business plan." He notes that with credit unions' tax exemption comes certain limitations." * An Annapolis, Md.-based editorial in The Nonprofit Quarterly (Aug. 2) discussed the benefits of competition from credit unions, likening credit unions to George Bailey's savings and loan (S&L) in the fictitious town of Bedford Falls. It says banks complain about credit unions' "unfair advantage" but counters, "We don't know of too many credit unions that have been major competition for the Bank of America or Wells Fargo." It also notes that "the feeling of ownership is why the citizens of Bedford Falls stopped the run on the Bailey S&L in 'It's a Wonderful Life,' and why people belong to nonprofit credit unions." * A blog in articlealley.com (Aug. 5) by Walid Petiri, an investment advisor with Financial Management Strategies, outlines a number of questions to ask a bank to get "The Best Bank for Your Buck." Many of the questions are areas in which credit unions stand out. He includes this disclaimer: "Although I am using the word 'bank,' do not forget to consider credit unions as a strong viable option for your needs as they also provide many strong products along with fine service." * Some articles are positive for credit unions because they show off the good works of credit unions in action. For example, the July 29th issue of Goochland Gazette, a weekly in the Richmond, Va., area, featured the financial education efforts of Virginia CU, which sponsored a Teen Summer Money Camp, a five-day program to introduce area students to money management basics, in the Richmond area.
To access the articles, use the resource links.

MSN Money cites CUs for auto financing

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NEW YORK (8/9/10)--Exempting car dealerships from the new consumer financial protection bureau amounts to painting a big red target on consumers' backs, but consumers can take four steps to protect their wallets, said MSN Money columnist Liz Pulliam Weston in her "Money Central" column Thursday. Credit unions figure prominently among the four steps. Pulliam Weston outlaws the tricks that dealers can pull on consumers. They include:
* Marking up the interest rate; * Larding the contract with junk fees; * Talking consumers into a more expensive car than they can afford; * Baiting and switching; and * Playing yo-yo with the contract (calling after the consumer takes possession of the new car and changing the loan terms).
"Because the Bureau of Consumer Financial Protection won't have your back, you'll need to approach the car-buying transaction as the minefield that it is," Pulliam Weston wrote. The best approach, she said, includes applying for financing from a credit union or a community bank. "Don't walk onto a car lot until you have a loan approval in hand. You might want to start with your local credit union, because it's member-owned and tends to charge lower rates and fees." The other steps include pulling credit reports and checking FICO fees, setting limits on one's borrowing and saying no to the yo-yo. For the full article, use the link.

Self-Help is first CDFI Loan Fund member at Atlanta Fed

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ATLANTA (8/9/10)--Self-Help Ventures Fund, a financing affiliate of the Center for Community Self-Help, is the Federal Home Loan Bank of Atlanta's first Community Development Financial Institution (CDFI) loan fund member and the first CDFI-affiliated organization to join a federal home loan bank, the bank announced Thursday. The Center for Community Self-Help, based in Durham, N.C., works closely with its financing affiliations, Self-Help CU and Self-Help FCU, to provide financing, technical support, consumer financial services, and advocacy for economically disadvantaged individuals. In January, the Federal Housing Finance Agency implemented provisions of the Housing and Economic Recovery Act of 2008 that permitted qualifying CDFIs to become members of a federal home loan bank. CDFIs include community development credit unions. Since January, FHLBank Atlanta has worked closely with Self-Help's leadership to bring its fund through the membership process, the bank said. "We have worked for 10 years to make this partnership possible, and together with the Federal Home Loan Bank of Atlanta, we believe we can provide the financing that will enable thousands of well-qualified homeowners to buy their first homes," said Martin D. Eakes, CEO of the Center for Community Self-Help.

Missouri lawmakers make time for CUs

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ST. LOUIS (8/9/10)--Statewide in-district meetings with federal lawmakers representing Missouri began last week, and at least one congressman made time for credit unions during his appearance at the African-American Credit Union Coalition (AACUC) Conference in St. Louis Wednesday-Saturday. U.S. Rep. William Lacy Clay (D-Mo.), who was keynote speaker at the AACUC conference, met with Missouri credit union representatives for an in-district meeting before his speech. He serves on the House Financial Services Committee. More than a dozen representatives from seven credit unions took part, said the Missouri Credit Union Association (MCUA) (The Missouri difference Aug. 6).
Click to view larger image Meeting with U.S. Rep. Ike Skelton, seated, center (D-Mo.), are, from left: row one, Sharon Ichord, Mid Missouri CU, and Donna Weston, Bothwell Hospital Employees CU. Row two, Peggy Nalls and Amy McLard of Missouri Credit Union Association (MCUA), and Karen Jurgensmeyer, Kilowatt Community CU. Row three, Rick Nichols, River Region CU; Pat Yokley, CommunityAmerica CU; Hal James, Missouri CU; Bill Mustain, Employment Security CU; and Tammy Parks, MCUA. (Photo provided by the Missouri Credit Union Association)
The in-district meetings across the state began Aug. 2 when Missouri credit unions hosted U.S. Rep. Ike Skelton (D-Mo.) at the Missouri Credit Union House in Jefferson City (The Missouri difference Aug. 4). Ten Missouri representatives discussed expanding credit union member business lending, debit card interchange fees and the impact of the Frank-Dodd Financial Reform Act on credit unions, and the need for overdraft protection for consumers during their meeting with Skelton. Attendees told Skelton that regulatory burden for credit unions of all sizes has grown increasingly difficult. The meeting included credit unions ranging in size from 900 members to 200,000 members. "I am concerned that efforts aimed at the bad players are hurting credit unions and community banks," Skelton said. He also shared his perspectives for the rest of the session. "I believe we are going to be focused on job creation and employment issues," he told the group. MCUA is working to reschedule a meeting with U.S. Rep. Russ Carnahan (D-Mo.), whose Aug. 10 meeting with credit union representatives was cancelled when House leadership called a special session. U.S. House Speaker Nancy Pelosi (D-Calif.) called the House back into session to address a $26 billion jobs measure (The Missouri difference Aug. 6).

New group assists women CU leaders

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ST. LOUIS (8/9/10)--A new group, the Women’s Association of Credit Union Leaders (WACUL), will give women credit union leaders a forum for development, networking and professional recognition. WACUL was created by Lisa Ginter, chief operating officer, CommunityAmerica CU, Kansas City; and Glenna Osborn, president of Missouri Central CU, Lee’s Summit, said the Missouri Credit Union Association (The Missouri difference Aug. 6). The group will host events throughout the year for members. The next meeting, “Gaining Strategic Perspective,” will be Aug. 19 in Kansas City, Mo. The meetings are two hours and will occur four to six times per year. Participants will learn to lead more effectively in their current roles and be prepared to take on more responsibility in the future. “I believe women are an important ingredient to any successful business, and credit unions have always been very good to women by providing great opportunities,” Ginter said. “WACUL is designed to provide female credit union leaders with educational programming, equip them to become better leaders and enhance leadership opportunities in our industry.” “There are a number of networking groups made up of women from varied backgrounds, but ours specializes in the credit union industry,” Osborn said. “I want to see women in credit unions become more successful, but more importantly, I want to see credit unions of all sizes be successful.” For more information, use the link.

NCBA blogs on CUNAverse about Mozambique co-ops

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MADISON, Wis. (8/9/10)--Andrew McLeod, communications specialist at the National Cooperative Business Association (NCBA), is guest-blogging on CUNAverse about co-operatives in Mozambique. McLeod will travel to Mozambique and look at NCBA’s work in the country, which is carried out through the Cooperative League of the United States of America (CLUSA) International program. The program has helped develop co-ps in more than 50 countries, with a concentration in Africa. Mozambique has nine projects. The nation is one of the world’s poorest countries and has a population of 23 million. The projects range from helping to launch farmer associations and training farmers to increase production, to creating export opportunities through fair trade and food quality testing. The program also has improved the overall framework for co-ops by mentoring a national co-op association, the Mozambican Association for the Promotion of Modern Cooperatives, McLeod noted in his first blog. McLeod’s blogs also will be the foundation for an article in the next issue of the Cooperative Business Journal, set for release in September. CUNAverse is the official blog of the Credit Union National Association.

NYIB wins 2011 Wegner Award for outstanding organization

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WASHINGTON (8/9/10)--The National Credit Union Foundation (NCUF) has recognized the National Youth Involvement Board (NYIB) as the winner of the 2011 Herb Wegner Memorial Award for Outstanding Organization. This will be one of three awards presented at the 23rd Annual Herb Wegner Awards Dinner hosted by the NCUF at the Credit Union National Association’s 2011 Governmental Affairs Conference. The conference will be held Feb. 27-March 2.Online registration for dinner tickets will be available later this year on NCUF’s website. NYIB is led by a seven-member, volunteer executive committee elected by credit union league designated delegates chosen from the network. Committee members serves as their region’s contact to uphold and encourage activity in classrooms and communities. NYIB’s mission was to build a grassroots network of credit union advocates concerned about the perception and acceptance of credit unions among younger generations. This led to a more concrete goal: Reduce the average age of credit union members and increase membership under age 18. So far, 2.5 million young people have been reached through the classroom. NYIB’s annual conference draws about 125 participants to explore current challenges and techniques with credit union peers. A listserv for exchanging ideas has as many as 470 subscribers annually. That number closely matches the average annual number of credit union educators in classrooms each of the past five years. NYIB tracks credit union in-classroom financial education online through its website, www.nyib.org, which has a data collection feature. Credit unions nationwide average an annual growth of more than 12% in students reached and a 16% increase in presentations made in the classroom. NYIB said it expects to reach 400,000 students between 2009 and 2010. NYIB partners include:
* Junior Achievement (JA). Speakers from JA Worldwide and area chapters have been featured at NYIB Annual Conferences, and network members rely on JA where classroom support and materials are limited; * National Endowment for Financial Education (NEFE). The comprehensive materials in NEFE’s High School Financial Planning Program brought NYIB network members and other credit unions together with Cooperative Extension Service agents; * Jump$tart Coalitions. Locally, many NYIB members carry their cooperative perspective into their state coalitions, holding seats on state boards and working to provide conference speakers, breakout sessions, and teacher workshops; and * Biz Kid$. The companion curriculum for each episode of this PBS series for youth on financial responsibility and entrepreneurship is a presentation data option for NYIB members to use.
The awards are named in honor of the late Credit Union National Association CEO Herb Wegner.

Maine mid-year stats reveal CUs growth

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WESTBROOK, Maine (8/9/10)--Assets, shares, loans and membership all increased at Maine credit unions, according to mid-year statistics of the state’s 66 credit unions, said the Maine Credit Union League. From Jan. 1 to June 30, assets rose by 3% or nearly $153 million, and loans increased by 1% or $21.5 million, while the trend of share growth rose 3% with $145 million in new deposits, said Maine’s Weekly Update (Aug. 6). Membership grew 1% with a net increase of roughly 4,000 members since the start of the year. “These numbers indicate that even in the initial stages of recovery, more Maine consumers are building and strengthening relationships with credit unions,” said league President John Murphy.

Flag flown in Iraq now flies at CUNA Mutual

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MADISON, Wis. (8/9/10)--Lt. Col. Thomas Heyden’s gift to company leaders became a tribute to past and present CUNA Mutual Group employees serving in the military during a flag-raising ceremony this week on CUNA Mutual's Credit Union Center Campus, Madison, Wis.
Click to view larger image CUNA Mutual Group Chief Operating Officer Bob Trunzo, right, hands a flag flown in Tallil, Iraq, to Army Master Sgt. Philip Peters and Maj. Josephine Daniels of the University of Wisconsin-Madison ROTC Badger Battalion to fly at CUNA Mutual in honor of past and current employees serving in the military. (Photo provided by CUNA Mutual Group)
Heyden, a CUNA Mutual employee and Army Reservist serving in Iraq as a senior combat advisor to the Iraqi Army, sent a U.S. flag that had flown at Camp Adder in Iraq on June 12, during Operation Iraqi Freedom. In recognition of service by Heyden and others, the flag was raised at the company’s Madison headquarters. Heyden is a senior sales executive for CUNA Mutual who works out of Winston-Salem, N.C. He is serving in Tallil, Iraq, and will complete his 400-day deployment in December. Members of the University of Wisconsin-Madison ROTC Badger Battalion raised the flag, which was presented by Bob Trunzo, executive vice president and chief operating officer, CUNA Mutual. "It’s an honor and privilege to display this flag on the CUNA Mutual campus,” Trunzo told a small gathering at the ceremony. “We owe a debt of gratitude to Lt. Col. Heyden and many others at CUNA Mutual, past and present, who have made tremendous sacrifices in order to preserve our many freedoms.” CUNA Mutual has 111 current employees who are reservists or retired military. At home, Heyden is an active runner who competes in triathlons, adventure races and marathons. He has put that athletic competitiveness to good use in his support of credit unions. He is a founding member of “Team Little Guy,” a group of credit union runners and cyclists who raise money for charitable causes in North and South Carolina for the Carolinas Credit Union Foundation.

Members United Corp. overstated OTTI by 1.2M

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WARRENVILLE, Ill. (8/6/10)--Members United Corporate FCU said it made a "one-time formula error" that overstated its other-than-temporary-impairment (OTTI) charges by $1.2 million on its financials reported for April 30. In its financial statement for the end of April, Members United recorded $21.1 million of OTTI, but an internal audit of the OTTI has since uncovered the error, which meant it recorded $1.2 million more OTTI than required as of April 30. "From a financial statement perspective, the error represented less than 0.2% of the cumulative OTTI of $562.3 million recorded to date. From a depletion perspective, the percentage processed on May 25 would have been reduced from 89.7% to 88.8%," the corporate said in its unaudited portfolio update and financial reports for June 30. The report is available on Members United's website. The difference of 0.9% will either be applied to reduce any future depletions, or replenished to the membership capital share accounts, if deemed proper, the corporate said. The $8.1 billion asset Members United earned $1 million during June, increasing its retained earnings to $9.6 million. Regulatory capital, consisting of retained earnings and membership capital shares, totaled $23.2 million as of June 30. The corporate said it did not record any OTTI during June and that an OTTI review is underway. Charges were to be recorded in July and reported in the next portfolio update, it added. Preliminary results indicate that retained earnings of $9.6 million will be sufficient to absorb OTTI charges, and that Members United currently does not anticipate depleting MCS in August, the financial statement said.

Filene seeking social media survey participants

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MADISON, Wis. (8/6/10)--The Filene Research Institute is asking credit unions to participate in a new study on the business impact of credit unions' social media marketing strategies. Social media marketing using Facebook, Twitter, and other Web-based applications has created a lot of buzz, but no one has yet measured its financial impact or determined what mix works best for credit unions, the institute said. To address this issue, Filene's project will work to develop the first predictive model for credit unions to use to estimate the impact of their social media marketing strategies on measures such as membership and products per member. Participation requires about two hours during the next year and will involve four quarterly surveys between this month and July 2011 about marketing activities, as well as social media marketing. Each survey will take 25 to 30 minutes to complete. Natural person credit unions not currently using social media can participate, too. The research aims to produce a statistically tested method to predict changes in membership and products per member (or member share) based on social media activities. Aug. 20 is the deadline to sign up for the survey panel. To register, use the link.

Mass.s foreclosures bill passes legislature

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MARLBOROUGH, Mass. (8/6/10)--The Massachusetts legislature this week approved legislation that would affect mortgage foreclosures. The Massachusetts Credit Union League worked to represent the interest of both state and federally chartered credit unions on the topic. The league provided oral and written testimony on dozens of proposals before multiple legislative committees and requested a centralized, legislative task force to address the topic. Aspects of the myriad of proposals--which were successfully defeated at the request of the league and others--include mandatory judicial review of mortgage foreclosures, mediation, payment of utilities for tenants, the creation of an abandoned property database, translation of documents into multiple languages and the licensing of credit union mortgage loan originators (eWeekly Aug. 4). The league has prepared an analysis of the bill’s impact on Massachusetts credit union mortgage lenders.

Bill to remove deposit cap on Mass. governors desk

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MARLBOROUGH, Mass. (8/6/10)--A bill that would remove the deposit limits under which state-chartered Massachusetts credit unions operate is on Massachusetts Gov. Deval Patrick’s desk. The bill, S.B. 468, “An Act Relative to Credit Union Shares and Deposits,” was introduced by Sen. Benjamin B. Downing (D-Pittsfield), said the Massachusetts Credit Union League (eWeekly Aug. 4). State-chartered credit unions had limits, based on their asset size, as to the amount of deposits they could accept. The measure would give them the opportunity to meet the demands of their members who would prefer to invest a greater portion of their money with the credit union but had been denied that opportunity because of an arbitrary cap, the league said.

Nearly 200 CUs helping Mich.s hardest-hit homeowners

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LANSING, Mich. (8/6/10)--Roughly 200 credit unions are helping Michigan homeowners through the “Helping Hardest-Hit Homeowners Fund,” which launched July 12. The $154.5 million program aims to help Michigan homeowners who are receiving unemployment compensation, who have fallen behind in their mortgage payments or taxes due to a temporary layoff or medical emergency, or who can no longer afford their mortgage payments due to lower income. The program is expected to help 17,000 Michigan homeowners avoid foreclosure. Dort FCU, Flint, Mich., was the first financial institution in the program to help a struggling homeowner, according to the Michigan Credit Union League. Nineteen individual credit unions are participating so far, in addition to 180 credit unions represented by credit union service organizations Member First Mortgage and Mortgage Center. Participating banks number around 35. There is no limit on the number of lenders that can participate. Funds are available on a first-come, first-served basis. The funds are expected to last 12 to 18 months. For a list of lenders, use the link.

CU System brief (08/05/2010)

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* LINDEN, N.J. (8/6/10)--E53 FCU, based in Linden, N.J., has changed its name to Motion FCU, announced the $90 million asset credit union. Motion FCU President/CEO Michael Greenwood told MyCentralJersey.com (Aug.5) that the term "motion" signifies energy and action, which represent "what our membership is all about." Motion FCU's tagline, "moving dreams forward," focuses on helping members achieve their individual financial vision and goals. The credit union plans to launch new services such as virtual banking and a more user-friendly website. It also is remodeling its North Brunswick branch and planning to open a new branch in Linden as part of the credit union's rebranding ...

CUs at top of the heap in new Kellogg Trust Index

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CHICAGO (8/6/10)--Credit unions are at the top of the heap--again--in the latest consumer poll on trustworthiness. This time 62% of American consumers surveyed said they trust credit unions. That compares with 57% for local banks, 35% for national banks and 27% for banks in which the government has a stake, according to the June poll by the Chicago Booth/ Kellogg School Financial Trust Index. Credit Union National Association President/CEO Bill Cheney said the index findings are timely and that he hopes they help to further raise consumer awareness about credit unions. "Especially today, in the wake of the biggest financial crisis since the Great Depression, people want a financial institution they can trust to look out for their best interests. They only need look as far as their credit union, as we have long known and emphasized, and as the latest Kellogg Trust Index results have made clear," he said.
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The poll found that trust in America's financial system is at its highest point since the survey began in 2008, with 26% of Americans saying they trust the financial system. That's a three-percentage-point hike from March's index. The percentage of consumers who trust credit unions has steadily risen since the survey began (See chart). Credit unions were four percentage points above from their position as most-trusted in March. In December, credit unions were trusted by 56% of consumers surveyed, and in March, they were trusted by 58%. "Clearly consumers--increasingly--are recognizing the great deal, sound management and safety that credit unions offer their members and their money. Our hope is that more and more Americans jump on the bandwagon and move their money to a credit union," Cheney said. In the March poll, credit unions were the only institutions that experienced an increase in consumers' trust. In the latest survey, all four types of institutions saw the level of trust rise. Banks--especially the bottom-feeder national banks and banks with a government stake--experienced bigger percentage-point increases. However, they are so low on the trustworthiness gauge they would have to travel much farther before surfacing next to credit unions' level of trustworthiness. The latest poll covers April to June.

Arizona Central CU offers disaster relief for wildfire victims

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PHOENIX (8/6/10)--Arizona Central CU, Phoenix, is offering a loan to help those affected by recent wildfires and flooding in the area. The credit union will offer a loan up to $1,500 with a 12-month repayment term and an annual percentage rate as low as 5.99%. The loan aims to serve as a temporary stop-gap to cover insurance deductibles and unexpected repair bills connected with the flooding and wildfires. Sindy Domek, Arizona Central’s Flagstaff branch manager, said she has spoken with several Flagstaff, Ariz.-area members who are struggling to pay for repairs and deductibles. “Dealing with the flooding and fires is bad enough,” she said. “Worrying about how to pay for it just adds to their stress levels.” Arizona Central CU has $410 million in assets.

CU shopping center deal prevents eminent domain

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OXNARD, Calif. (8/5/10)--A Camarillo, Calif.-based credit union has reached an agreement with property owners of a shopping center over its lease, thus averting an eminent domain action by Oxnard city officials, according to Ventura County Star (Aug. 3). The agreement between Pacific Oaks FCU and the new owners of the Carriage Square shopping center, where it has a branch, means the credit union will move to another location in the center. Upside Oxnard, the new owners, plan to furbish the mostly vacant, boarded-up shops and build a Lowe's home improvement center as an anchor store to attract more businesses. The plans call for demolishing most of the older structures, including the building occupied by the credit union. Pacific Oaks FCU and the shopping center had been negotiating a relocation deal, but the deal collapsed earlier this summer and affected the progress on the renovation. The City Council, saying the renovation is crucial to generating sales tax revenue, considered taking over the credit union's lease under the eminent domain law, where a government agency can force property owners or businesses to sell property at fair market value to make way for projects deemed necessary for the public good. However, Mayor Tom Holden convinced the council to drop the eminent domain proposal since the two parties were close enough to iron out an agreement without the city's involvement, the Star said. An editorial in the Pacific Coast Business Times Monday urged to the city not to use eminent domain, saying it was "a harsh way to treat a financial institution that's an important part of the lifeblood of the region's largest city." It urged the city, the shoppimg center owners and the credit union to work out a deal. Shane Saunders, vice president of marketing at the $270 million asset credit union, told the Star that the parties came to a mutually agreeable accord. Everyone is happy and looking forward to the new center and new Lowe's, Saunders added.

Detroit man found guilty in guards murder at CU

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DETROIT (8/5/10)--A Detroit man was found guilty Tuesday in a U.S. District Court for the murder of an armored-truck guard who was shot to death during a heist at a credit union's ATM in 2001. Timothy Dennis O'Reilly, 36, faces the rare death penalty for the murder of Norman "Anthony" Stephens during the Dec. 14, 2001, robbery at the Dearborn FCU. The penalty phase of the case begins Monday. It will determine whether he is executed or receives the mandatory minimum life sentence in prison with no possibility of parole. The jury deliberated for several hours before returning the verdict, which ended an 11-day trail. O'Reilly and five other men robbed the truck, which was delivering money to the credit union's ATM during the early morning hours, and escaped with $204,000 in cash. O'Reilly was found guilty of conspiring between June 2000 and December 2001 with six other men to rob the credit union; of robbing the armored truck and killing Stephens; and of murder with a firearm during a violent crime. He also was convicted of a June 2003 robbery at a Comerica Bank location. Michigan banned capital punishment in 1847, but courts can impose the death penalty for federal capital crimes such as a murder during a bank robbery.

NCSL Kentucky league CUNA attract legions of legislators

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LOUISVILLE, Ky. (8/5/10)--Events hosted by the Kentucky Credit Union League and the Credit Union National Association (CUNA) attracted multitudes of legislators attending the 2010 Legislative Summit of the National Conference of State Legislators (NCSL). Many met a football legend who got his gridiron start in Louisville.
Click to view larger image Idaho State Sen. Denton Darrington, right, enjoys meeting football great Paul Hornung at an appearance sponsored by the Credit Union National Association (CUNA) and the Kentucky Credit Union League at the National Conference of State Legislators' Legislative Summit in Louisville, Ky. (Photo provided by CUNA)
The summit is the largest annual gathering of state lawmakers in the nation. There, legislators study current issues, promulgate policy for advocacy for the NCSL in interfacing with the federal government, and meet with constituents and representatives of trade associations, businesses and other organizations. CUNA's annual booth at the conference provides "a forum for lawmakers to obtain information about credit unions and meet with league representatives and CUNA in an informal setting," said Chris Johnson, CUNA vice president of state governmental affairs. At this year's conference, state credit union leagues and associations from Georgia, Virginia, Indiana, Illinois, Kentucky, Texas, New Mexico, Utah and Idaho greeted their state legislators at the booth. Legislators flocked to the booth in record numbers for special events coordinated by Debbie Painter, director of public affairs and government relations at the Kentucky league and Lynn Coard, director of state advocacy for CUNA. Two events sponsored by the league--the serving of Kentucky standards mint juleps and bourbon balls--were well attended. Another popular event, sponsored by CUNA and the league, was the appearance at the booth of Paul Hornung, Heisman Trophy winner at the University of Notre Dame and two-time NFL Most Valuable Player as a member of the Green Bay Packers. Among those who arrrived at the booth to meet Hornung was NCSL President Don Balfour, a state senator from Georgia. "Attending and participating in the NCSL's annual meeting is a vital part of the advocacy program of the Kentucky Credit Union League," said league President/CEO Wendell Lyons. "We have found that getting together with our state's legislators at a league-sponsored breakfast, visiting with them at the booth, and attending special events with them at the booth engenders a very positive impression of credit unions among our legislators," he added. "I think they are impressed by the effort that the leagues and CUNA make to welcome them during an occasion when they are away from the hectic environment of their state capitols." John Graham, president/CEO of Kentucky Employees CU and a member of CUNA's Board of Directors was a first-time volunteer at the CUNA booth. "I was impressed by the creativity and energy that the state league volunteers and CUNA staff brought to the events at the booth. Equally impressive was the response of the state legislators who came to the events," Graham said. "This type of informal interaction between credit union representatives and state legislators creates invaluable goodwill with the legislators."

Belvoir FCU to close student branches

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WOODBRIDGE, Va. (8/5/10)--Belvoir FCU is planning to close in-school branches at four Woodbridge schools so it can divert resources to serving an influx of employees at Fort Belvoir, Va. The $268.8-million-asset credit union said it is ending partnerships with branches at Woodbridge and Gar-Field high schools, and Woodbridge and Godwin middle schools. Fort Belvoir is expected to grow by 20,000 employees because of the Base Realignment and Closure Commission (BRAC) recommendations of 2005, and the credit union would be responsible for serving those individuals’ and families’ needs, said The News and Messenger (Aug. 4). Belvoir FCU had to realign resources to support the new BRAC families but will remain committed to supporting the schools. The credit union will not have a physical presence at the schools, but will participate in back-to-school nights and other events, said Bonnie Andresakes, community relations and education office, in a press release the newspaper cited. Those who were served by the school branches can remain members, and students, parents and staff at the schools can still join. Belvoir first began partnering with the schools about five years ago. It also has a branch in Fort Belvoir Elementary School.

Velocity CU video Banks schmank consumers

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AUSTIN, Texas (8/5/10)--Have you been “schmanked” by a bank lately? According to an ad campaign by Velocity CU, Austin, Texas, “schmank” means: “Any irresponsible and/or devious action taken by a bank with the intention of fleecing its customers: My bank schmanked me with multiple fees for things that weren’t my fault." The humorous ads on website www.bankschmank.com ask people several questions about banks:
* What frustrates you about banks? * What do you want to say to banks? * What word best describes banks? * Have you been schmanked?
“We’re not bashing big banks,” Carol Cain, senior vice president, marketing and business development for the $515 million-asset Velocity, told News Now. “We were getting annoyed because banks were in the news for not making loans and because of all their problems. But there was nothing about credit unions and their solutions. So we created a way to educate people and differentiate credit unions from banks.” Velocity had used the headline “BankSchmank” on billboards since 2009, before it created the microsite www.bankschmank.com in April. “We wanted a dynamic format that easily changes,” Cain said about the decision to use the Internet. “Also, the website channel would appeal to a younger audience of adults ages 21 to 34, and that is what the website is geared to. We promoted it via our Facebook page, and also supported it with some traditional media such as billboards and a few small print ads in alternative newspapers, including The Onion and The Austin Chronicle.” The unscripted ads were made in-house with a flip-video camera and featured actual members, members to-be and people who were just upset with banks, Cain said. The credit union got some creative help with the design of its microsite, she added. The response so far has been great, Cain said, noting that the credit union has seen 4,500 unique visitors to its microsite, and a 13% click-through rate to the credit union website. “Anything above 10% is good,” Cain added. Perhaps most noteworthy is that Velocity has experienced a 3% increase in active checking accounts since the launch. “That is one goal for our tangible results,” Cain said. Incidentally, Cain said that when that credit union’s employees are out and about and say they’re with Velocity CU, people will respond, “Are you the BankSchmank?” To visit the Velocity microsite and view the ads, use the link.

Two women charged in 2.4M fraud at defunct CU

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CHARLESTON, W. Va. (8/5/10)--Two former employees have been charged for their alleged roles in defrauding a now-defunct credit union in Bluefield, W.Va. Rebecca Poe, 35, former assistant manager, and Pamela Mullins, 46, former teller, were charged with defrauding N&W Poca Division CU out of $2.4 million. A federal grand jury in Beckley, W.Va., returned an indictment against Poe, which alleges that she took money union from 2003 to August 2008. Poe allegedly made fake deposits into her account and the accounts of family members. She used the funds for personal expenses, said the indictment (Bluefield Daily Telegraph Aug 4). Mullins originally was named as an aider and abettor in the indictment but not as a defendant. On Tuesday, she was charged with fraud, and an information was filed alleging she engaged in conduct similar to Poe’s, the newspaper said. If convicted, each woman could face up to 30 years in prison, a $4.8 million fine and an order of restitution. The National Credit Union Administration liquidated N&W on Oct. 3, 2008. At the time of liquidation, the credit union had 1,194 members and $6 million in assets. N&W served employees of the Norfolk and Western Railway System in West Virginia and Virginia.

A-K Valley FCU merges with Clearview FCU

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MOON TOWNSHIP, Pa. (8/5/10)--Clearview FCU, Moon Township, Pa., announced the merger between A-K Valley FCU, Lower Burrell, Pa., and Clearview was finalized Saturday. All of A-K Valley FCU’s nearly 11,000 members automatically became members of Clearview (Life is a Highway Aug. 4). Clearview will maintain A-K Valley’s four branches in Allegheny and Westmoreland Counties, bringing Clearview’s total branches to 17 in Southwestern Pennsylvania. A-K Valley’s branches will continue to be staffed by the same employees who have served their members for years. “This was a great merger and will continue to be a solid partnership between two very strong credit unions that have similar services and philosophies,” Clearview President/CEO Mark Brennan told the Pennsylvania Credit Union Association. Clearview FCU has $629 million in assets.

Focus groups point out positive presence of Maine CUs

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WESTBROOK, Maine (8/5/10)--Credit unions are an example of “buying local,” while using a bank is generally not the case, according to Maine consumers. In recent focus groups held in Bangor and Portland, conducted by Maine-based research firm, Market Decisions, the attitudes, perceptions and beliefs held by consumers toward credit unions are positive compared with other financial institutions, said the Maine Credit Union League, according to the Maine league newsletter Weekly Update (July 30). State consumers in the focus groups compared ads by credit unions and other financial institutions. The study found that advertisements by credit unions were well-received and viewed as “honest, informative and creative.” In discussing how the ads made them feel about credit unions, consumers used words like “friendly” and “stable.” They also viewed credit unions as more personable than banks, offering better interest rates, more involved in their communities and more concerned about their members. “Judging by the comments from consumers, the message is getting heard and being received--credit unions are a great option for financial services,” said John Murphy, president of the Maine Credit Union League. The research provides messages that the league’s upcoming Awareness Campaign can build upon. Key points that still need to be reinforced with consumers are the convenience and sophistication of credit unions--including online services, advanced technology such as mobile banking, and the state and nationwide ATM and Shared Branching networks, the league said.

CU System briefs (08/04/2010)

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* SAN JOSE, Calif. (8/5/10)--A shuttle bus driver is accused of robbing Provident CU, Redwood City, Calif., on July 20, according to The San Jose Mercury News (Aug. 3). Shelly Denise Jones, 34, allegedly parked her bus near the credit union, walked inside the branch with a gun, and took about $3,000 in cash before driving off in the shuttle. She was arrested while on the job July 30 after police received an anonymous tip. Jones also is accused of committing two other heists. She was charged Monday with one count of robbery with a handgun ... * SAN MATEO, Calif. (8/5/10)--San Mateo (Calif.) CU (SMCU) has seen increasing success of its Refer-a-Friend program. Every time a referral to SMCU results in a new membership, the credit union donates 20 meals to the Second Harvest Food Bank of Santa Clara and San Mateo County. This quarter, the program exceeded expectations, said the $600 million asset credit union. Due to members’ involvement, 141 referrals were converted into memberships, resulting in a contribution of 2,820 meals to the food bank--more than doubling the number of lunches donated in the first quarter. Refer-a-Friend was started in June 2009. In one year, 5,180 meals have been donated ... * ST. LOUIS (8/5/10)--Rob Cartwright, 25, of Barnhart, Mo., is the
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winner of Vantage CU's search for its first Young & Free St. Louis spokesperson. Cartwright, one of 36 applicants for the Gen Y spokesperson job, learned he had the position at a surprise party in his honor Friday night. He will become a salaried employee of the credit union for one year and serve as the voice of his age group, attending events and creating regular online videos and blog articles to keep YoungFreeSt.Louis.com an informative hub for the age 25 and under crowd. Runners up Jon Christopher of O'Fallon and Rebekah Nelson of Clayton will each receive an iPod Touch. Vantage, based in St. Louis, has more than $650 million in assets. (Photo provided by Vantage CU) ... * AUSTIN, Texas (8/5/10)--A+ FCU hosted its first annual Youth Financial Camp July 13-15 for 75 children ages 10-14. On Day One, they learned about financial goals, entrepreneurial qualities, and the value of career and education, and participated in a business proposal challenge to invent a product and market it to a panel of judges. On Day Two, campers learned about saving and investing, and played a stock market board game. On Day Three, after breakouts on car buying and credit, campers participated in a real-world simulation of living on a budget. One camper told her parents: "I never knew how difficult it was for you and Dad to really budget. I ask you for so many things we don't need and that aren't necessary." The credit union worked with volunteers from Cornerstone Financial Education and the Financial Literacy Coalition in Central Texas on the event. Here, parents and campers attend the awards ceremony at the conclusion of camp. A+ FCU has more than $780 million in assets. (Photo provided by A+ FCU) ... * MARSHALL, Mich. (8/5/10)--The Marshall (Mich.) Community CU board has appointed Heather Luciani as the credit union's new CEO, after a five-month search and reviewing more than 100 candidates (Michigan Monitor Aug. 2). Luciani, who is pursuing her MBA at Western Michigan University, completed CUNA Management School at the University of Wisconsin-Madison in 2006, and received her Certified Credit Union Executive and Certified Financial Services Professional designations in 2009. She is active in the credit union industry through her involvement with the Michigan Credit Union League, serving on its Government and Political Affairs Forum, the Future Leaders Council and the Battle Creek Chapter of Credit Unions executive committee. Marshall Community CU has more than $157 million in assets ...

CUSO adds social media tutorials to Facebook page

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ST. PETERSBURG, Fla. (8/4/10)--Social media have gone mainstream, and a credit union service organization (CUSO) is urging credit unions to "use these vital communications tools to gain awareness" for their products and services. The CUSO, PSCU Financial Services, based in St. Petersburg, Fla., has launched the first of a series of social media tutorials to help credit unions tap into the promotional potential offered by social media formats on its Facebook page. The current video is called "Social Media 101." "Social media outlets--including Facebook, Twitter, MySpace, YouTube and blogs--are now being used by many corporations to create brand awareness and consumer loyalty," said Mike Yatros, interim CEO of the CUSO. "Research shows that more than 69% of consumers have read a corporate blog and 40% of consumers have 'liked' a brand on Facebook or MySpace," he added, referring to research by Razorfish in 2009. "Credit unions that use social media can create broad consumer awareness about our unique industry and ultimately influence prospects to consider making a local credit union their primary financial services provider," he said. The new "social media" tab on the CUSO's Facebook page presents information that credit unions can use to learn how to leverage current and emerging social media tools to engage with their existing and prospective members. The first lesson sets the foundation by presenting facts and figures about consumers' online and social media habits. Future postings will provide lessons for using popular social media sites and downloadable best practices and resource guides.

Next wave of ID thefts targeting kids SSNs

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KANSAS CITY, Mo. (8/4/10)--Identity thieves are beginning to steal Social Security numbers of children, long before they're ready for a savings or checking account or a credit score--and that could threaten the nation's credit system, said an Associated Press report (TheSunNews.com Aug. 3). The thefts could be a problem for credit unions and other financial institutions because they rely on credit scores from FICO, Experian, TransUnion and Equifax. But those scores could contain false information, planted by people who use stolen Social Security numbers to piggyback on the credit of someone else, according to Kansas City law enforcement agents. Kansas City Assistant U.S. Attorney Linda Marshall and Julie Jensen, a special agent with the Federal Bureau of Investigation's office in Kansas City, said that in the fraud, online businesses use computers to locate dormant Social Security numbers, usually of children or long-term prison inmates who don't use them. The companies sell the numbers under another name to people who establish phony credit and run up huge debts without intending to pay. The sellers skirt the law by referring to the Social Security numbers as "credit privacy numbers" or CPNs. They are also called "credit profile numbers" and "credit protection numbers." Jensen discovered the scheme and says it is easy to create a false credit score using the CPNs, said the article. The crooks have years to use the numbers before the child is old enough to apply for credit. That makes the fraud difficult to detect, and authorities can't estimate how prevalent the practice is. The fraud is emerging because 25.5% of consumers have credit scores of 599 or below, which means they're poor credit risks. Many credit decisions are based on the credit scores provided by FICO and the three major credit reporting bureaus. But Jensen says those credit scores could contain false information. FICO said it has tools for businesses to protect themselves, but the tools are expensive, the article said.

Wis. league to media Banks in way of more biz lending

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PEWAUKEE, Wis. (8/4/10)--Banks are standing in the way of Congress' allowing credit unions to increase their lending to small businesses and help small businesses obtain credit and create jobs, said the Wisconsin Credit Union League, in an article in Milwaukee, Wis.-based BizTimes.com (Aug. 3). The league expressed frustration because Congress has failed to attach an amendment that would raise credit unions' member business lending cap to 27.5% of assets from the current 12.25% to its Small Business Lending Fund Act. "Banks have admitted they are unlikely to increase their business lending because of regulatory pressure that has forced them to restrict their lending," said Brett Thompson, president/CEO of the Wisconsin Credit Union League. "So, knowing full well they're not going to step up to help, it's ill-conceived that Congress would allow banks to block a credit union provision that could preserve jobs and get Wisconsin firms moving again," he said in the article. (Use the link to read the full article). In a press release, the league noted that "banks have stood in the way, threatening to oppose a bill that includes additional business authority for credit unions--although it comes at no cost to taxpayers and would help generate loans that banks are unwilling to make."

Miracle Treat Day Thursday benefits kids hospitals

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SCOTTSDALE, Ariz. (8/4/10)--Credit unions' staff, volunteers and members have a chance to help out the Children's Miracle Network and cool off with a treat on Dairy Queen's Miracle Treat Day, which is Thursday. Those buying a Blizzard treat at a participating Dairy Queen Thursday will see $1 of the cost contributed to benefit a local Children's Miracle Network hospital, according to Joe Dearborn, senior director of Credit Unions for Kids, credit unions' fundraising arm for the Children's Miracle Network. Credit Unions for Kids has raised more than $75 million for children's hospitals since 1996. Credit unions are one of the largest contributors to the Children's Miracle Network. Dairy Queen has raised over $81 million for the network's hospitals. To find a participating location, visit MiracleTreatDay.com.

Bush press secretary to keynote Maine legislative forum

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PORTLAND, Maine (8/4/10)--Former White House Press Secretary Ari Fleischer will be keynote speaker Sept. 15 at the Maine Credit Union League's Annual Legislative Forum in Freeport, announced the league. Fleischer served as press secretary under former President George W. Bush and was spokesman during the historical presidential race recount; the Sept. 11, 2001, attacks; two wars; and the anthrax attack, said the league's August newsletter, News&Views. For conference attendees, he will analyze the latest news out of Washington and discuss the obstacles and opportunities the Obama administration has in moving its agenda, as well as Hill issues that will affect the 2010 midterm elections and beyond. Prior to joining the Bush campaign, Fleischer was national spokesman and communications director for Elizabeth Dole's presidential campaign, and also served as communications director for the House Committee on Ways and Means. He is now president of Air Fleischer Communications Inc.

Candell named deputy exec director of NCUF

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WASHINGTON (8/4/10)--Tom Candell has been promoted to deputy executive director, chief operating officer and chief financial officer of the National Credit Union Foundation (NCUF), announced NCUF Executive Director Wendell "Bucky" Sebastian Tuesday. Candell will be responsible for coordinating the foundation's day-to-day operations including fundraising administration, event management, REAL Solutions, innovation grants, investment management, disaster relief and communications. He had served as NCUF's managing administrative director and was interim director during the search process before Sebastian's selection as NCUF executive director. Sebastian said Candell's promotion "will allow me to place more of my emphasis on outreach to the foundation's donor base, which is my No. 1 priority." Candell will continue to be based in NCUF's Madison, Wis., office. Other changes announced include:
* Relocation of the positions of communication and marketing coordinator and the National REAL Solutions Program manager to Madison from Washington. Both positions report directly to Candell. The executive director position will remain in Washington, D.C. * Transfer of responsibilities for the program planning and strategic direction of the Credit Union Development Education (DE) program to the program's volunteer leadership. NCUF will continue to provide logistical and administrative support to the DE program.
"Taken together, these organizational changes will enable the foundation to operate more efficiently and cost effectively, which is in line with the expectations of our donor community," Sebastian said.

Corporate Central members commit 50M to PIC

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MUSKEGO, Wis. (8/4/10)--Members of Corporate Central CU have contributed more than $50 million to paid-in-capital (PIC) since it began its capital building efforts in April 2009, the corporate announced Tuesday. “It is within our ability to make value statements and provide empirical measurements to support those statements,” Robert W. Fouch, president/CEO of Corporate Central, said. “However, our true ‘worth’ can only be defined by our members. Collectively, our members have made a profound statement of commitment to their corporate credit union.” Corporate Central said it is well ahead of all initial capital measures in the National Credit Union Administration’s (NCUA) proposed corporate credit union regulations, due to members’ PIC investments made to date and to growing retained earnings. The corporate has projected to be at least 1% in retained earnings by NCUA’s September date targeted for the new regulations. At 1%, the corporate would be more than double the 45 basis points of retained earnings required by NCUA for year three in the new regulations. Also, the $50 million of PIC moves the corporate’s core capital measurement closer to 4%, representing a strong position for the future, the Muskego, Wis.-based corporate said.

Young pros to crash Wash. league convention

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SEATAC, Wash. (8/4/10)--The Washington Crashers invites 13 credit union professionals age 30 or younger to “crash” the Washington Credit Union League Convention Sept. 14-16 in Seatac, Wash. Professionals have until Aug. 16 to apply for membership in the group. Applications can be submitted through the group’s website, www.wa.crash.coop. The group will host an event outside the convention with networking and career-building opportunities. Due to tight budgets and a lack of opportunity, many younger credit union employees have limited-to-no access and growth opportunities such as the league convention, the Crashers said. The event follows a trend born from a 2010 Filene Research Institute project in which a group of young credit union professionals “crashed” the Credit Union National Association (CUNA)’s Governmental Affairs Conference and the CUNA/World Council of Credit Unions’ The 1 Credit Union Conference. Three crashers of those events helped create the Washington event. “We wanted to continue the momentum and bring the career-building experience to more local professionals,” said Matt Vance, marketing director, Industrial CU, Bellingham, Wash. “Expect to learn, network and be animated to propel the credit union movement,” added Kris Holechek, human resources coordinator, Lacamas Community CU, Camas, Wash. Jen Shefner, crasher and assistant vice president of e-commerce at Columbia CU, Vancouver, Wash., said her former crash experience was unparalleled with anything she’d ever done during her eight-year credit union career. “I not only came back inspired by our national movement, but [came back] a more confident leader and committed credit union employee,” she said. “Credit union veterans should encourage their future leaders to apply for our upcoming event.” For more information, use the links.

North Coast CU wins Wash. Foundation Legacy Award

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FEDERAL WAY, Wash. (8/4/10)--The Washington Credit Union Foundation will present its Legacy Award to North Coast CU, Bellingham, at an awards ceremony Sept. 16. North Coast is receiving the award for its support of Bite of Skagit. Bite of Skagit raises funding and awareness to support the Skagit Food Share Alliance, which facilitates the acquisition of locally grown produce to distribute to 13 area food banks through the Skagit County Community Action Agency. The event has acquired new partnerships with nine restaurants, local banks and the Latino farming community. The credit union donated volunteer hours. The project is unique, “involving many community partners, which is what made it stand out to receive this honor,” said Earlene Fantz, CEO of American Lake CU, Tacoma, Wash., and awards committee chair. Terry Belcoe, president/CEO of North Coast, said the credit union is passionate about the project. The Legacy Award was established in 2003. Last year’s winner was Harborstone CU, Tacoma, Wash.

Glatt Leading online CU challenging exciting

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BALTIMORE (8/4/10)--Leading the nation’s first online-only credit union is a lot like “being the parent of a first child,” according to Tom Glatt. “They don’t come with instruction manuals.” Glatt, who stepped down Sunday from his post as CEO of the online-only REALTORS FCU, told News Now that his experience with REALTORS was great, though sometimes challenging. “We set up something that’s never been done before,” Glatt added. “But we don’t do anything at REALTORS that isn’t done at another credit union. Every day is a new adventure. It’s very exciting, and very challenging.” Glatt, who became REALTORS’ first CEO in 2008, said he’s leaving because he has accomplished his goal--to get the credit union off the ground and operating. As the credit union changes its growth strategy, Glatt is moving on to the next chapter in his credit union career. He’s looking for other CEO jobs, hoping to relocate closer to his wife, who is in New Jersey. Jane Pannier, REALTORS FCU executive vice president and general counsel, is acting CEO. Glatt previously was CEO of Continental FCU, Tempe, Ariz. He and his wife also founded a consulting business, Counter Intelligence Associates. REALTORS FCU serves members of the National Association of Realtors (NAR), which has 1.2 million members. Although REALTORS received its charter in 2008, the idea for the credit union has been around for nearly a decade. Today, the credit union has 5,500 members and $80 million in assets--less than the 25,000 members and $110 million in assets predicted. Though the credit union is close to its asset goal, its growth has been dependent on the economy. “In times of uncertainty, people stick with what they have, whether they like it or not, because of fear of the unknown,” Glatt said. When the economy improves, there will be an explosion of growth, he added. Two of REALTORS’ biggest challenges were security and awareness. Unlike a traditional credit union, “we never look members in the face. So whatever security the credit union had to go through with someone to open an account, it did. We triple checked everything,” Glatt said. Though NAR does a “fantastic” job marketing to members, some still don’t realize that NAR has a credit union, Glatt said. The credit union is working to heighten awareness. Potential members’ acceptance of the virtual model also is challenging. Call center staff still receive questions about where the branches are located. “We told realtors that we understand the value of the local relationship, but that’s just not our model,” Glatt said. “We’re telling folks to give us a chance, and through the virtual model, we’ll try to get as much of their business as possible.” The positives of an online credit union are huge, especially for younger people who are less concerned about the social aspect of banking. An online-only credit union offers convenience. “If you want to join at 3 a.m., you can do that,” he said. Members can open accounts, fund accounts, and apply for loans online. “If you want to make a deposit at 3 a.m., you could go to an ATM ... but at REALTORS, you can take a picture of the front and back of the check [or use a scanner], send it to us, and [the money] is in your account.” Glatt said he expects to see more online credit unions in the future. He received several calls from CEOs asking how the credit union created its virtual model. A virtual model can especially benefit credit unions with national fields of membership, because it may be hard to serve members in areas of the country where the headquarters is not located, he added. Existing credit unions seeking to move to a virtual model should create a separate entity to transition members, Glatt suggested. He likened the process to the change several decades ago to self-service gas pumps from full-service gas pumps. Gas stations slowly introduced self-service pumps while keeping some full-service. They gave customers a price break if they used self-service. Eventually, customers transitioned to the self-service pumps. However, as happened with the gas pumps, some consumers will expect all the services of a traditional credit union branch in a virtual model. That will prove challenging for credit unions, because “we love to take care of our members,” Glatt said. “If they say they want something, we say ‘Okay.’” According to Glatt, if a credit union wants to go virtual, it should:
* Talk to a credit union with a virtual model--like REALTORS. When launching, REALTORS received some help from Pennsylvania State Employees CU, Harrisburg, Pa., which has a virtual model but is a traditionally based credit union. * Do its homework. “Don’t be in a hurry. Fixing stuff on the fly is difficult,” Glatt said. * Be selective with vendors. “You don’t want someone learning the virtual model at your or your members’ expense.”
NAR had a great idea and has a great credit union, said Glatt. “I wish them nothing but success,” he added. “We parted on good terms. They have the right idea and the right model.”

Southeast Corporates members speak out on corporate value

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TALLAHASSEE, Fla. (8/4/10)--Southeast Corporate members are speaking out about the value their corporate provides, and what life might be like if corporate resources were not available. A new Value of Ownership area on the corporate’s website features video testimonials from members regarding the value they perceive from Southeast Corporate. The first pair, in what will be a series of videos, features Mansel Guerry, president of Mississippi Employees FCU in Ridgeland, Miss., and Joe Pitcher, president/CEO of Coral Community FCU in Fort Lauderdale, Fla. Both CEOs shared their perspective on the value they receive from the corporate and what things might be like without corporates as a resource. “The top of the list for me, for everybody I do business with, is I have to be able to trust them, and I trust the people at Southeast Corporate,” Guerry said. He added: “I feel like I have somewhat of a personal relationship with all the people I deal with. I know them on a first-name basis. I get quick personal responses.” “When a hurricane hit, [Coral Community FCU] was completely down, as was everything at the time,” Pitcher said in his video. “Southeast Corporate was really there for us.” He added: “If we didn’t use Southeast Corporate and had to go elsewhere for services, we wouldn’t get the economies of scale. We would be thrown to the wolves.” The website aims to serve as an educational resource for credit unions, their boards and other volunteers. It features a library of documents that help provide the “big picture” as to the volume and scope of services Southeast provides credit unions, and a cost comparison showing what these services would likely cost direct, without the cooperative resources and buying power of a corporate. Southeast Corporate’s also provides its evolving plan for the future. Links are included to three National Credit Union Administration videos that chronicle the history of corporates and the current situation involving the nation’s corporate credit union system (see News Now link for background information). Southeast plans to add resources. To see the videos, use the link.

CU System briefs (08/03/2010)

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* SYRACUSE, N.Y. (8/4/10)--Empower FCU, based in Syracuse, N.Y., has warned consumers about a hike in automated telephone calls made to area residents that attempt to "phish" information from them. The callers ask recipients to press one to reach the credit union's security department, then ask for secure information such as a personal identification number (PIN) or the three-digit code on the back of a credit card. The $831 million asset credit union says no account at the credit union has been compromised. Also, neither it nor any other financial institution will ask for secure information in this manner (pressconnects.com Aug. 2) ... * GREENBELT, Md. (8/4/10)--Felicia Douglas, 42, of Upper Marlboro, Md., a former loan supervisor at Educational Systems Employees FCU, Greenbelt, Md., has been sentenced to 51 months in prison, followed by five years of supervised release, after defrauding the credit union of more than $219,390. The sentence was part of a plea bargain. When Douglas worked for the credit union from January 2001 through November 2005, she allegedly created fraudulent checking and share accounts, loans, lines of credit and credit card accounts in the names of at least five members, including one who was deceased. The court records said she manipulated the accounts to increase credit and used the stolen funds to pay credit card bills and pay on false loans (Department of Justice press release Aug. 2) ... * WASHINGTON (8/4/10)--Counterfeit cashier's checks bearing the name of a Merced, Calif., credit union are in circulation, according to an alert from the Federal Deposit Insurance Corp. (FDIC). The credit union, Merco CU, does not issue cashier's checks; however, it does issue official checks, said FDIC. The items display a fictitious routing number, 321173386, and display a security feature statement embedded in a darkened border and long the bottom border between two padlock icons. The words, "Cashier's Check" appear near the top center along with a purchase statement, said the alert ... * MIDDLETOWN, Pa. (8/4/10)-- Mid-Atlantic Corporate CFO announced Monday the retirement of Jim Burns, senior vice president/chief financial officer (CFO), effective Aug. 31. On that date Jeff Stoner will take the position. Burns' financial services career spans about 40 years. He began as CFO with Mid-Atlantic in 1992 and was promoted in 1995 to vice president/CFO. In 2008, he became senior vice president. He also served with the Federal Reserve Bank of Philadelphia for 16 years, and in other financial institutions. Stoner began his career with the corporate in 1991 in the member services department. He was worked in progressively responsible roles in accounting, information systems and payment services, and most recently served as senior vice president, product strategy. He has served on the board of MY CU Services and on Mid-Atlantic's investment and asset liability management committees ... * JACKSONVILLE, Fla. (8/4/10)--Southeast Corporate FCU's vice president of business continuity, Ken Schroeder, has contributed to a newly published business continuity book, "My Remarkable Journey," written by Richard Arnold, founder of the "Disaster Recovery Journal." Schroeder's contribution discusses his efforts to assist credit unions in getting back up and running after Hurricane Katrina hit the Mississippi Gulf Coast in 2005. Arnold's book shows how the business continuity industry was shaped and offers insight into the journey of one of the leaders of the disaster recovery industry, said the corporate ... * TAMPA, Fla. (8/4/10)--Richard Skaggs, CEO of Consumer Credit Counseling Service of Central Florida, has resigned his position to become president of USF FCU in Tampa, said the agency. He has been with the Orlando-based credit counseling organization since 2005. He led counseling offices in the state, including locations at Tallahassee, Tampa, and Orlando (Orlando Sentinel Aug. 3) ...

U.S. Central records 39M net loss in 2Q

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LENEXA, Kan. (8/3/10)--U.S. Central FCU recorded a $39.4 million net loss for second quarter, compared with a net loss of $475.4 million for second quarter 2009. Both figures are attributed mainly to other-than-temporary-impairment (OTTI) charges, U.S. Central said in its financial report for the quarter ended June 30. The financial report is on U.S. Central's website (use the link). In it, U.S. Central noted that prices on fixed income securities generally improved during the quarter, and projections of aggregate principal losses in its existing investment portfolio declined somewhat. However, loss projections for certain non-agency residential mortgage-backed securities (RMBs) worsened, requiring an additional $44.9 million in OTTI charges for the quarter. That compares with $487.3 million in OTTI charges for the same period in 2009. While accounting guidance requires OTTI charges be recorded based on securities' projected losses, U.S. Central also tracks actual principal losses on its portfolio. Actual principal losses on 65 of its impaired securities totaled $128.1 million during second quarter of 2010. Through June 30, actual principal losses for 71 securities totaled $396.8 million. Excluding OTTI charges, U.S. Central said it recorded net losses on financial instruments of $5.8 million for the quarter, compared with net gains of $3.9 million for the same period a year earlier. "Although accounting rules don't allow OTTI charges to be reversed when securities improve, it appears that overall expected credit losses declined "somewhat" during the second quarter. That is a good sign," said Bill Hampel, chief economist at the Credit Union National Association. "This report reminds us that the vast bulk of the actual losses that will be borne on securities held by corporates are yet to occur," Hampel told News Now. "Although U.S. Central has expensed about $7 billion in OTTI charges on its portfolio, through June it has only recorded actual losses of $400 million," he said. "This does not, however, mean the OTTI charges have over-estimated the actual losses. The actual losses just have not happened yet. They could end being around $7 billion, they could be much more, or they could be much less. Only time will tell." Assets as of June 30 totaled $30.2 billion, a decline of $4.9 billion, or 13.9%, from $35.1 billion assets recorded for Dec. 31, 2009. As of June 30, 2010, U.S. Central's regulatory capital ratio was 7.2%, compared with 6.9% on June 30, 2009. Its retained earnings ratio was 1.9%, compared with 1.8% for the period last year. Using actual capital balances as of this past June 30, U.S. Central's capital ratio and retained earnings ratio were 0.8% and 0.0%, respectively. Those compare with 3.8% and 0.0%., respectively, as of June 30, 2009.

Southwest Corporate OTTI losses increase

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PLANO, Texas (8/3/10)--Southwest Corporate FCU announced a net loss of nearly $20 million for the first six months of 2010, compared with a net income of more than $16.6 million for the same period last year. As a result, the corporate will be required to deplete members' capital accounts in July to eliminate the deficit. The $9 billion asset corporate said the net loss was primarily due to $31.6 million in other than temporary impairment (OTTI) charges recorded in April related to further deterioration of certain non-agency residential mortgage-backed securities since Dec. 31, 2009. Southwest Corporate recorded more than $1.6 million in OTTI charges in June, which was offset by other operating income of nearly $2.6 million. The corporate's net loss for the six months ended June 30 is partially offset by net operating income totaling more than $15 million. The July depletion of members' capital accounts increases the cumulative members' capital account depletion percentage to 77.62% from 72.68%. The corporate reported in its unaudited financial statements posted on its website members' capital accounts totaling $106 million minus the nearly $20 million retained deficit leaves $86.1 million in total regulatory capital. That amount is net of $4 million related to the portion of shares on notice that cannot be counted as regulatory capital as of June 30. The corporate's capital ratio is 1.03%. National Credit Union Administration rules and regulations require a minimum of 5%.

Mississippi mourns Rudy Dill former league president

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JACKSON, Miss. (8/3/10)--Rudolph "Rudy" Dill, former president of the Mississippi Credit Union League (now Mississippi Credit Union Association) died Saturday in Ocean Spring, Miss. He was 97. Dill served in the U.S. military from 1939 to 1961 in both the Army and Air Force, and earned two Purple Hearts. He entered the credit union industry after retiring from the military in 1961, first working at Keesler FCU, Biloxi, Miss., and later managing Mutual CU in Vicksburg, Miss. He was elected to the Mississippi league board in 1970 and was appointed league president in 1983. Dill spent 21 years on the league's legislative committee and helped organize 24 credit unions. In 1985, he was named was named CUNADATA Corp. League Executive of the Year. He retired as league president in 1989.

Hudson Valley files appeal in mortgage tax case

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POUGHKEEPSIE, N.Y. (8/3/10)--Attorneys for Hudson Valley FCU filed an appeal in a New York state appellate court, asking for reversal of a lower state court's dismissal of the credit union's challenge against the state's mortgage-recording tax (MRT). The challenge was based on the Federal Credit Union (FCU) Act's tax exemption for federal credit unions. The Poughkeepsie, N.Y.-based credit union's appeal was filed July 27 in the Appellate Division of the Supreme Court of New York. The original decision was rendered by New York Supreme Court Justice Judith Gische on May 14 and filed May 20. New York's Supreme Court is a trial-level court in that state. "Federal credit unions' immunity from taxation under the Supremacy Clause of the U.S. Constitution and the FCU Act prohibits the state's imposition of mortgage recording taxes on mortgages granted to secure loans made by federal credit unions to their members, regardless of how the Court of Appeals has characterized the tax for other purposes and in other contexts," said the appeal. The lower court "had reasoned in its dismissal that it was constrained to follow two decisions of the New York Court of Appeals that for purposes and in contexts unrelated to the impact of federal credit unions' immunity from state taxation, characterized the MRT as a tax on the 'privilege of recording' rather than as a tax on property. On this basis, the court determined that the state may continue to impose the tax," said the appeal document. The credit union had filed the suit on May 12, 2009 against the New York State Department of Taxation and Finance, Commissioner Robert L. Megna, and the State of New York (News Now May 24). It sought a declaratory judgment that the state may not impose the MRT on mortgages granted to secure loans made by the credit union because it is a federal credit union. Federal credit unions are federal instrumentalities and thus are immune from such state taxation under the Supremacy Clause of the U.S. Constitution, the credit union argued. It also noted that under the FCU Act, federal credit unions, their franchises and their intangible personal property, including mortgages, are exempt from "all federal, state, local and territorial taxation." "We hope and expect it will be a successful appeal for the benefit of the credit union and its members, and other federal credit unions and their members," Dale J. Lois of the Fishkill, N.Y.-based law firm Quartaratro & Lois, PLLC., one of the credit union's attorneys, told News Now Monday. Lois and Eli R. Mattioli of K&L Gates LLP law firm in New York City represent the credit union in the proceedings. Amicus briefs on behalf of the credit union were filed by the U.S. Department of Justice, Credit Union Association of New York, the Credit Union National Association, and the National Association of Federal Credit Unions.

N.J. CUs brace for interchange impact

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TRENTON, N.J. (8/3/10)--A Sunday article in The Times of Trenton, N.J., examines the federal financial reform bill signed last week by President Barack Obama--in particular, the bill’s interchange language and its impact on credit unions. Titled “Credit Unions Brace for Impact of Changes in ‘Swipe Fees,’” the article explains that the bill’s interchange provisions could force credit unions “to institute new fees for checking and savings accounts and reduce incentives for customers, hurting the general public who the bill is designed to protect.” “The consumers certainly did not win on this bill on interchange fees,” Paul Gentile, president/CEO of the New Jersey Credit Union League, told the newspaper. One provision in the new law requires the Federal Reserve to limit interchange or “swipe fees” that merchants pay financial institutions when their customers use debit cards, the league said. The fees must be set at a level “reasonable and proportional to the processing costs,” but it is unclear what those levels will be. That is why credit unions are concerned that the card networks that process debit card transactions will apply the new fee limit to all financial institutions, depriving them of funds needed to provide and oversee debit cards, the league said. “That could have a very significant impact on the smaller institutions that rely heavily on the income to cover the program costs to monitor fraud and to issue plastic,” Andrew Jaeger, CEO of the Credit Union of New Jersey in Ewing, told the paper. To read the article, use the link.

IUSA TodayI IN.Y. PostI note CUs service

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MADISON, Wis. (8/3/10)--The benefits of membership at credit unions were noted in articles Sunday in the New York Post and Monday in USA Today. Credit unions are “a quiet success story [that] remains largely unsung,” except for credit union members who “think they have the answer to what ails us,” the Post said in an article titled “Giving credit where credit (union) is due.” “I would rather do whatever it takes to finance through [credit unions] than go anywhere else,” Maureen Robinson, told the newspaper. Robinson’s mortgage application was initially rejected by Bethpage (N.Y.) FCU. But she then got her finances in order, reapplied and now is “comfortably paying off her first home loan,” the paper said. The Post also mentioned ads created by Connex CU, North Haven, Conn.; America’s First FCU, Birmingham, Ala.; and Boeing Employees CU, Tukwila, Wash., that are creatively showing how credit unions favorably compare with banks. A USA Today “Money” column briefly mentioned that credit unions are the best place for consumers trying to consolidate their debts. To read the articles, use the links.

NFCC One-fourth of consumers will opt-in on overdrafts

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SILVER SPRING, Md. (8/3/10)--Twenty-six percent of Americans surveyed say they intend to opt-in to overdraft protection in spite of there being a fee charged for the service, said the National Foundation for Credit Counseling (NFCC). Although most overdrafts from paper checks and automatic payments will continue to be covered (for a fee), consumers must now opt-in to authorize this service for ATM and debit card transactions made at a point of sale. “It is disturbing that this many people live so close to the financial edge,” said Gail Cunningham, NFCC spokeswoman. “Anticipating that they will overdraw their account, they are willing to exacerbate the problem by paying a fee to have their purchases approved. The real answer lies in examining the root problem and resolving it, as continued overdrafts can result in some significant financial damage.” As of Aug. 15, existing and new customers of financial institutions must sign up for overdraft protection before a financial institution is allowed to charge the customer a fee for clearing the transaction. If consumers do not notify their bank or credit union, they will not be covered. No action is necessary from consumers who do not wish to opt in. Industry studies show that the average overdraft fee is $27, with about half of the more than $37 billion generated in fees in 2009 coming from debit card and ATM overdrafts. Banks are anxious to retain these fees, with many having launched significant campaigns encouraging consumers to opt in, NFCC said. Credit unions can tell members to:
* Keep your check register current, recording all withdrawals and balancing often. Be sure to note all ATM and debit card transactions along with any paper checks written on the account. * Link your checking account to your savings account. In case of an overdraft, the money will be automatically taken from your savings with little or no fee attached. * Pad your checking account by carrying a balance that you will not likely exceed. Most people spend a similar amount each month. If possible, keep an extra $100 in your checking account to cover unplanned expenses. * Use technology. If your financial institution offers it, sign up for e-mail or text alerts that notify you when your balance is low. * Reach out to your creditors. If payment due dates do not coincide with paydays, contact your creditor and request a due date change. You may have to pay a little extra interest to cover the gap for the first month, but over time this step should help to organize your finances. * Get help managing your finances. Reach out to an NFCC member agency by going online at National Foundation for Credit Counseling (use the link) or to be automatically connected to the closest agency, call 800-388-2227. For assistance in Spanish dial 800-682-9832.
“Even though there may be a small embarrassment if a transaction is denied, the consumer should evaluate this inconvenience against the potential savings and value of solving the underlying financial issue that resulted in the overdraft,” Cunningham said. “Know that if you have already opted in, you can always cancel the program.” NFCC’s July Financial Literacy Opinion Index was conducted via the homepage of its website from July 1 though July 31 and answered by 2,089 respondents.

Davis to leave NACUSO

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NEWPORT BEACH, Calif. (8/3/10)--Tom Davis, CEO of the National Association of Credit Union Service Organizations (NACUSO), plans to step down from his position, effective at year-end. Davis plans to use the opportunity to “walk the talk” that he espoused while heading NACUSO and build collaborative businesses, NACUSO said in a release. Davis accepted his CEO position at NACUSO four years ago and has served on its board for 20 years. He will now serve as CEO of CUSO Development Company LLC. He also owns a management consulting firm, Davis and Company. While at NACUSO, Davis initiated the National Center for Collaboration and Innovation. Programs initiated through the center include a joint educational program on collaboration and network businesses, annual conferences with a focus on collaboration, a regional conference series featuring 3.0: The Next Generation of Collaboration, and regulatory advocacy for credit union service organizations. NACUSO has formed a search committee for Davis’ replacement. NACUSO, based in Newport Beach, Calif., is a trade association representing credit union service organizations.

Top 10 INews NowI stories for July (08/02/2010)

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MADISON, Wis. (8/3/10)--Regulatory reform topped July’s list of top 10 stories in News Now, with a story about the CEO of an Atlanta credit union shot and killed in a New Jersey park claiming the second spot. July’s top 10 stories are: 10. Voluntary merger, P&A guidance released by NCUA ALEXANDRIA, Va. (7/2/10)--The National Credit Union Administration on Thursday provided credit unions with background information on its purchase and assumption (P&A) and merger process and detailed the criteria that the agency uses to evaluate P&As and mergers. 9. CU loans, savings and asset trends see reversals in May MADISON, Wis. (7/6/10)--The Credit Union National Association’s monthly review of credit unions for May reflected three reversals in recent trends--in loans, savings balances and asset quality, according to a CUNA economist’s analysis. 8. Cheney on board, outlines priorities as CUNA’s new CEO WASHINGTON (7/6/10)--William “Bill” Cheney, who officially became president/CEO of the Credit Union National Association over the long holiday weekend--on July 5--says his first priority upon taking the helm at CUNA is to assure a smooth transition of power during this volatile time for credit unions. 7. Police say CEO threatened officer before shooting NEWARK, N.J. (7/22/10)--The CEO of an Atlanta, Ga., credit union threatened a police officer before being fatally shot in a New Jersey park Friday, according to a statement from the prosecutor’s office of Essex County. 6. NCUA announces CU liquidation, merger ALEXANDRIA, Va. (7/2/10)--The National Credit Union Administration on Thursday allowed Virginia Beach, Va.-based Chartway FCU to assume some of the assets and liabilities of Saint George, Utah’s, Southwest Community FCU, which was liquidated on Wednesday. 5. Cheney refutes American Banker CU criticism WASHINGTON (7/8/10)--Responding to a recent American Banker story on poor credit union performance, Credit Union National Association President/CEO Bill Cheney said that credit unions are “coping with today’s economic challenges and continue to shine.” 4. NCUA cautions CUs on home equity schemes ALEXANDRIA, Va. (7/19/10)--The National Credit Union Administration in a regulatory alert warned credit unions of potential red flags for home equity fraud schemes. 3. Four barred by NCUA from CU work ALEXANDRIA, Va. (7/21/10)--The National Credit Union Administration issued orders prohibiting the following individuals from participating in the affairs of any federally insured financial institution. 2. CEO of CU Atlanta killed by police ATLANTA (7/20/10)--The CEO of CU of Atlanta was shot and killed by New Jersey police over the weekend, according to local media reports. 1. CUNA: Final reg reform has some CU improvements WASHINGTON (7/16/10)--Following the Senate’s 60 to 39 vote approval of comprehensive financial regulatory reform legislation, Credit Union National Association President/CEO Bill Cheney said that credit unions would work with regulators to ease the impact that interchange provisions could have on their operations and members.

MBL cap lift long overdue says Calif. CUs

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ONTARIO, Calif. (8/3/10)--Lifting credit unions’ member business lending cap is long overdue, California credit unions told The Los Angeles Business Journal Monday. U.S. Sen. Mark Udall (D-Colo.) has proposed an amendment to a jobs bill that would raise credit unions’ cap to 27.5% from 12.25%. The Senate is expected to vote as early as this week on the measure, the publication said. The Credit Union National Association (CUNA) and credit unions support the amendment. Grace Mayo, CEO of Telesis Community CU, Chatsworth, Calif., said that the bill is “long overdue” because there are many credit unions that can and should be able to make business lending “a regular program.” An increase in lending could generate $694 million in small business loans in Los Angeles County over the next year, according to California Credit Union League data the publication cited. The league also estimated that the higher caps could create 7,500 jobs in the area. Of the 140 credit unions in Los Angeles County, about 53 engage in small business lending. The credit unions have about $3.2 billion in outstanding commercial loans. During the first quarter of this year, business lending was up 9.5% year-over-year at credit unions nationwide, while bank lending has declined, the Journal added. Some California credit unions, including Kinecta FCU, Manhattan Beach, plan to increase their business lending if the caps are raised. Paul Cleary, Kinecta vice president of lending, said he regularly receives calls from businesses looking for capital. Kinecta began offering such loans in 2006 but pulled back because of the economy. Kinecta wants to offer the loans again, and a higher cap would allow the credit union to dedicate more resources to lending, he added. CUNA has estimated that nationally, lifting the caps could free up $10 billion in credit and create more than 108,000 jobs.

CUNAs back-to-school advice featured in nations media

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MADISON, Wis. (8/3/10)--The Credit Union National Association (CUNA) provided some back-to-school money-saving tips for families to The Associated Press and CNBC.com Thursday. Phil Heckman, CUNA director of youth programs, suggested that parents allow their children to buy something extra for school with money left over after parents have bought school supply necessities. Some children may want to buy multiple items of clothing, but parents need to determine what their children really need--and prepare a list before heading to the store, the article said. The AP story also was picked up by several media outlets, including The Shreveport Times, Telegram.com, WSLS 10, The Northwestern, The Tuscaloosa News, Lubbock Online, and The Post and Courier. Other media noted the ways credit unions are helping students:
* Campus FCU, Baton Rouge, La., offers college students credit cards with low interest rates. Campus, which serves students at Louisiana State University, offers students free checking accounts that are linked to their student identification cards with online checking and bill pay (Walletpop.com Aug. 2). * Northern Star CU, Portsmouth, Va., received a Creating Excellence Award from Virginia’s education department for providing financial services to students at two local high schools through an in-school credit union branch. The credit union partnered with Portsmouth Schools to offer the services as a way to teach teens about saving. About 45 students and 18 school employees are members of the credit union (The Virginian-Pilot and Ledger-Star Aug. 1). Northern Star also awarded $1,000 college scholarships to several high school graduates.

CU System briefs (08/02/2010)

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* MECHANICSBURG, Pa. (8/3/10)--A software administrator at Mechanicsburg, Pa.-based Members 1st CU was arrested Monday and charged in the alleged hacking of the credit union's computers and embezzlement of nearly $90,000. Kim Allen Heim allegedly manipulated a test version of the credit union's software to generate changes in account records and transfer credit union funds into his private loan accounts, then moved the money from the account into his checking account (The Patriot-News Aug. 2). The scheme was uncovered in May 2009 during a routine system check when an employee noticed a 10-year car loan in Heim's name. The credit union does not allow car loans that long, said investigators. Heim was arraigned Monday on three counts each of theft by deception, unlawful use of a computer, tampering records and computer trespass. A preliminary hearing was set for Aug. 31 ... * DETROIT (8/3/10)--Closing arguments were made Monday in the trial of Timothy Dennis O'Reilly, 37, who is charged with murdering an armored truck guard during a Dec. 14, 2001, heist outside Dearborn FCU. If jurors determine that O'Reilly is guilty of murdering Norman "Anthony" Stephens, a separate trial will be held to determine whether O'Reilly should be sentenced to death or to life in prison. Michigan was the first state to ban capital punishment--in 1847--but the death penalty can still be imposed for certain federal crimes, such as murder during a bank robbery (The Detroit News Aug. 2) ... * BASKING RIDGE, N.J. (8/3/10)--Credit Union Mortgage Alliance Network (CUMAnet), a credit union service organization (CUSO) that provides mortgage origination and servicing to credit unions, has appointed Diane Johnson as president and Dirck Van Deusen as vice president, mortgage business development. CUMAnet, which originated in the northeast, has expanded to Washington D.C., Chicago and other markets. Johnson's goals include improving efficiencies and expanding CUMAnet's business on the brokerage side. Van Deusen's role is to raise overall industry awareness of CUMAnet (New Jersey Credit Union League's The Daily Exchange July 26-30) ... * HARRISBURG, Pa. (8/3/10)--Mike Casper, former Pennsylvania Credit Union Association (PCUA) board member and charter member of the Doehler-Jarvis Pottstown FCU (now Apex Community FCU), Pottstown, died July 29, at the age of 88. He was treasurer of the credit union for many years, said PCUA (Life is a Highway Aug. 2).Casper served on PCUA's board for 27 years, from 1957 to 1984, and was chairman from 1978 to 1980. He was a past president of the Montgomery County Chapter of Credit Unions. He is survived by his wife, a son and a daughter. Services are today ...