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CU System

Texas league prepares to aid CUs through Ikes impact

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FARMERS BRANCH, Texas (9/11/08)--The Texas Credit Union League has sent out an advisory to all Texas credit union employees preparing for a potential disaster with a strengthening Hurricane Ike headed toward the state's coastline. According to Richard Grady, vice president of marketing, public relations and communications, the advisory went out Wednesday. The Category 1 hurricane strengthened to Category 2 as of early Wednesday evening and was expected to continue strengthening over the next 36 hours. Forecasters are predicting it will hit landfall somewhere along the Texas coast Saturday morning (weather.com Sept. 10). "If Hurricane Ike comes on shore as a Category 3 or larger, we may need to execute procedures in our offices to support displaced workers and credit unions," said the league advisory. "Preparations are being made at this time. Our website will carry information, as well as advisements to you and your members." The advisory said that if the hurricane continued its current course, it would hit the Mantagorda Bay, San Antonio Bay/Victoria area on Saturday morning. However the state is preparing for the effects to be felt on Friday. The brunt of the higher winds and storm surge will be felt up to the Galveston Bay area, said the advisory. Once on land, the hurricane would continue inland as a tropical storm, which pack winds of up to 75 mph, up to Austin. The Texas Credit Union Department, the state regulator, advised state-chartered credit unions to "monitor this storm closely, heed warnings form your local leaders, and take necessary and appropriate precautions to safeguard property and personnel." Credit unions in Texas have temporary authority to close offices threatened by the storm if they notify the department as promptly as possible, said the department's advisory. They also have authority to alter payment terms or grant new loans to assist members through the temporary aftermath of a natural disaster. Credit unions impacted by the hurricane are asked to contact the regulator by phone, fax or e-mail within 24 hours after the storm to report any damages and the operational status of the credit union. CUNA Mutual Group said it is also watching the hurricane. "As Hurricane Ike positions itself to make landfall sometime early Saturday morning, we will continue efforts to proactively contact credit unions in the current projected path of this storm, which is currently near Corpus Christi, Texas and the surrounding area," said Phil Tschudy, CUNA Mutual media relations manager. "Ike has proven to be challenging with its unpredictable track, and we will continue to monitor and reassess our strategy as this storm progresses," he said. "CUNA Mutual's Credit Union Protection Disaster Team remains activated and will address any storm-related losses and coordinate property-casualty relief efforts. We encourage credit unions that need assistance to contact our Disaster Phone 24 hours a day, seven days a week at 800-637-2676."

Gustav damages to CUs less than 1 million

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MADISON, Wis. (9/11/08)--Damages to credit unions from last week's Hurricane Gustav have added up to less than $1 million, according to CUNA Mutual Group. And the National Credit Union Administration reported that only a few are still not operating. "We had reports of wind and rain damage, mostly in Louisiana, with some extension into Mississippi, and we continue to see a few claims trickle in as credit unions get back to business," said Phil Tschudy, media relations manager at CUNA Mutual. "About 30 policyholder credit unions have submitted slightly more than 50 claims to date, with losses totaling less than $1 million," he told News Now. "Fortunately, damages from Hurricane Gustav were far less than we expected; however, as I mentioned last week, this doesn't mean some credit unions will not have challenges ahead of them," he said. The National Credit Union Administration (NCUA) checked the overall operating status of 211 credit unions in Louisiana and Texas affected by the hurricane. Of those, "only 13 remained non-operational Sept. 9," the agency said Wednesday, adding that 98% of credit union members affected by the hurricane have access to their accounts. NCUA and credit unions in the Gulf Coast took a variety of proactive measures that enabled rapid recovery from the potentially disastrous Gustav, the agency said. In the days leading up to the hurricane Sept. 1 landfall in eastern Louisiana, NCUA established a toll-free telephone number to provide members with immediate access to information and assistance. It activated backup continuity teams and provided direction on Aug. 29 through regional offices about hurricane preparations. It also released a public service announcement (PSA) for consumers to nearly 60 media outlets in the potentially affected areas. The PSA detailed:
* Federal deposit insurance coverage for credit unions; * How members could access their credit union funds in a natural disaster; * The toll-free credit union member hurricane telephone line; and * How to access NCUA via the Internet for information about affected credit unions.
Since 2006, NCUA has advised credit unions in hurricane-prone states to review contingency of operation plans and business continuity procedures to ensure their ability to provide financial services to their members, the agency said. IT also promoted U.S. Treasury's GoDirect program, the electronic delivery of federal benefits to ensure consumers have consistent electronic access to their funds, even in a disaster. Many credit unions came through Gustav just fine. In Louisiana, New Orleans Firemen's FCU, based in Metairie, said it was able to provide continuous service during Hurricane Gustav. "We were able to provide continuous service to our members via shared branching and through an alliance with CUNA Mutual's Loanlink center," said Cami W. Crouchet, chief operations officer of the $122.7 million asset credit union. "We also work with Telecom Recovery, which was a wonderful way to update our staff on what was going on," she told News Now. The credit union also updated its website several times a day with the most current information on the credit union, she said.

WOCCU IASB to reconsider CU accounting standards

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LONDON (9/11/08)--The International Accounting Standards Board (IASB) Wednesday agreed to reconsider applying its International Financial Reporting Standards to credit unions, based on a comment letter submitted earlier this year by the World Council of Credit Unions (WOCCU). “IASB's reconsideration of its standards is rare as a rulemaking body,” Dave Grace, WOCCU vice president of association services, said. “We consider the move a strong vote of confidence in the global credit union movement.” Certain provisions in the IASB-proposed accounting standards for small and medium-sized enterprises (SME) could be detrimental to credit unions, according to an April 4 letter by Grace to IASB board member Thomas E. Jones. WOCCU’s greatest concerns focused on the draft’s failure to clearly identify to whom the standards apply and failure to clearly sufficiently simplify reporting requirements for smaller institutions, Grace wrote. “Excluding credit unions from the scope of the SME standards and requiring adherence to the full IFRS is both impractical and counter to the IASB’s intention of making accounting requirements more accessible to smaller non-listed institutions,” Grace said. IASB has indicated that credit unions take public deposits, requiring that members be given access to full International Financial Reporting Standards as opposed to the simplified SME standards. However, IASB agreed to reconsider whether credit unions would fit within the scope of entities employing the SME reporting standards. Grace's letter said standards should be applied to entities that hold assets “for a broad group of outsiders such as a bank, insurance entity, securities broker/dealer, pension fund, mutual fund or investment banking entity.” Failure to include credit unions in the list may imply inclusion in full International Financial Reporting Standards, which could create insurmountable hurdles for many SMEs, WOCCU said. IASB is expected to respond to WOCCU’s recommendation by year-end. WOCCU will work with its member organizations and other interested parties to mobilize support for IASB’s reconsideration of its standards.

Hearing on tax uniformity postponed

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HARRISBURG, Pa. (9/11/08)--The Pennsylvania Department of Banking, Pennsylvania attorney general, bankers, and credit union parties have agreed to postpone a hearing on uniformity of taxation pending the outcome of the community charter appeal currently in the state Supreme Court (Life is a Highway Sept. 10). No timeframe was given during the status conference for resolution of the community charter matters. Pennsylvania Commonwealth Court Judge Dante Pelligrini had scheduled the status conference Tuesday with legal counsel for all parties in the case. The conference's purpose was to discuss moving the case forward, said the Pennsylvania Credit Union Association (PCUA). The case stems from a lawsuit by bankers involving the applications for community charters by Trumark Financial CU, based in Trevose, and Freedom CU, based in Warminster (News Now Aug. 15). At issue is whether credit unions and banks are sufficiently distinguishable to merit different tax treatment consistent with the Pennsylvania Constitution. A provision in the state constitution states that like entities should be taxed in a like manner, Rick Wargo, PCUA general counsel, told News Now last month. Three credit unions, the PCUA and the state Department of Banking filed briefs Aug. 6 regarding community charter lawsuits by the Pennsylvania Bankers Association (PBA) (News Now Aug. 12). Corry Jamestown CU, Corry; Freedom CU, Philadelphia; and TruMark Financial CU, Trevose, filed the briefs in support of the banking department's approval of their community charter changes (Life is a Highway Aug. 11). The approval came in December, and PBA appealed the decision earlier this year. One of the bankers' issues is community charters and what procedures the banking department must follow when reviewing a credit union's intent to convert to a community charter. The bankers also contend that the tax-exempt status provision of the Pennsylvania Credit Union Code violates the state constitution.

Connecticut league announces dues discount

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MERIDEN, Conn. (9/11/08)--Affiliated Connecticut Credit Union League credit unions can receive a 5% discount each year on their dues if they commit to the league for two years, the league announced Wednesday. Credit unions may also pay the full dues while electing up to 5% to be placed in the league’s Small Credit Union Support Fund. The program will help the league budget on a longer-term basis, the league said. The league is excited to “reward credit union for their commitment...while at the same time, being able to provide a funding mechanism for [Small Credit Union Support Fund],” said Anthony Emerson, league president/CEO. The program will begin with dues notices effective January 2009 through Dec. 31, 2010.

Traveling billboards a bonus for 17 CU employees

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WEST MIFFLIN, Pa. (9/11/08)--United Community FCU, West Mifflin, Pa., is going the extra mile to market itself to potential members.
Click to view larger imageUnited Community FCU, West Mifflin, Pa., recently gave each of its 17 employees 2009 Chevrolet HHRs to drive for three years. The cars will market the credit union. From left are: Joyce Anderson, United Community executive vice president, and Michael Pastirik, CEO. (Photo provided by United Community CU)
On Thursday, the credit union handed over keys to new Chevrolet HHRs branded with the United Community FCU logo to all 17 of its employees. The cars will be driven by the employees for three years to market the credit union. “The employees couldn’t believe it,” Michael Pastirik, United Community FCU CEO, told News Now. “They’re as excited as we are.” The goal of the program is two-fold--to attract new accounts and loans, he said. On the back of each car is a number that cell phone users can text and receive the credit union’s phone number and address. United Community will place the numbers in a database and market to those who texted the credit union, Pastirik said. “We’ve had 13 messages since Thursday,” he added. Sixteen of the cars are white, and one is silver. Pastirik said the credit union made sure the logo design looked sharp, so employees wouldn’t feel like they were driving a “clown car.” The credit union is covering the costs for each car--employees are only responsible for gas. As an added incentive, employees will receive cash bonuses if they talk to potential members who end up coming in to sign up for membership. The cars were financed with half of United Community FCU’s marketing budget. The credit union had primarily advertised through direct mail and print ads. “We’ll still do some ads and mail, but about half as much,” Pastirik said. The credit union’s board was “100% behind us,” he said. He emphasized that financing the cars will not affect members’ dividends. Pastirik has been told by some in the industry that the money to buy the cars should be given back to members, but “if we don’t attract new people, we won’t be here,” he said. “We need to have people know who we are.” United Community FCU’s 29-year-old chief financial officer came up with the idea to use the cars for marketing. “He came up with a great idea to attract young people,” Pastirik said. A woman from Pittsburgh recently contacted United Community saying that she’d heard about the marketing program and was so impressed that she was planning to switch her account to the credit union from another institution. “She said, ‘I want to deal with someone who treats their employees so well,’” Pastirik said. “It was refreshing.”

Bigby appointed to NASCUS CU exec council

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ARLINGTON, Va. (9/11/08)--The National Association of State Credit Union Supervisors (NASCUS) announced that Ed Bigby, president/CEO of Norbel CU in Fort Collins, Colo., will serve as a director on the NASCUS Credit Union Executive Council. The announcement was made by NASCUS Credit Union Advisory Council Chairman Mendell Thompson of America's Christian CU, Glendora, Calif. Bigby, a 40-year veteran of the financial services industry, has served in the credit union industry since the mid 1970s. He is a NASCUS committee member and the NASCUS state liaison for Colorado. He also has served on the boards of the Credit Union Association of Colorado and the Credit Union Executives Society. He will fill the unexpired term vacated by Rick Schmidtke, Harborstone CU, Tacoma, Wash., who is retiring. Bigby's term began Monday and will run until September 2009. The NASCUS Credit Union Advisory Council is governed by the Executive Council, a group of 12 directors who are credit union executives from around the country.

Thousands line up for gas subsidized by Billings FCU

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BILLINGS, Mont. (9/11/08)--Billings (Mont.) FCU subsidized a $1.81-per gallon gas sale Aug. 29 at a Kwik Trip gas station in Billings that drew thousands of people.
Click to view larger image Billings (Mont.) FCU staff pumped gas on the Friday before Labor Day weekend for four hours at a discounted rate of $1.81 per gallon--subsidized by the credit union--for thousands of people who lined up in their cars for the promotion. (Photo provided by Billings FCU)
The fuel price in that market was about $3.88 per gallon, so customers saved about $2 per gallon for up to 18 gallons of gas per vehicle sold between 6 a.m. and 10 a.m. that day. Thousands of people lined up--some starting at midnight--for the promotion (billingsgazette.com Aug. 30). “We wanted to offer a promotion that helped spread the word about credit unions, and invest in the community we live and work in every day,” Kevin Rookhuizen, BFCU vice president of sales and marketing, told News Now. “Gas prices are a hot topic, so we thought we would supplement the high fuel prices with a discounted fuel day on the Friday before Labor Day weekend,” he said. “We marketed this to our members and the community as a whole,” he added. “Our sales team was onsite pumping fuel, washing windows, handing out bags of goodies to participants that included gauges, pens, BFCU information and feature product offers.” BFCU staff wore bright green shirts with “Pit Crew” stamped on the back. “It was neat to have the privilege to serve the community in a way that doesn’t happen every day,” Rookhuizen said. BFCU has about $70 million in assets.

IBankrateI CUs help young savers during credit crunch

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NEW YORK (9/11/08)--Credit unions can help during the credit crunch, but they are often overlooked by Americans--especially young adults--who need help saving money, according to Bankrate.com. Young adults often have a hard time getting credit because they don’t have a credit history or their incomes are low, Mike Schenk, vice president of economics and statistics at the Credit Union National Association (CUNA), told Bankrate (Sept. 10). The credit crisis has caused many lenders to tighten their standards, making it more difficult for young people to obtain credit, he added. Credit unions looking to attract young adults should note that young adults are interested in online banking, mobile banking, and ATM conveniences, Josh Jones, CUNA manager of young adult programs, told Bankrate. About 68% of credit unions offer online banking and 49% offer electronic bill pay. Many credit unions also belong to a network with surcharge-free ATMs and are less likely to charge for other institutions’ ATM services, Jones added. CUNA’s 2007 Credit Union Profile Report indicate that 99% of credit unions offer certificates of deposit, checking, auto loans and individual retirement accounts, the article said. Credit unions have lower rates on loans, mortgages and credit cards, and pay higher rates of return on savings accounts. On average, credit union members nationwide save $10.9 billion per year--which is about $126 per person or $239 per household, Bankrate said.

Merger to result in Australias second-largest CU

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MELBOURNE, Australia (9/11/08)--Austral CU, Melbourne, Australia, will merge with South Australian Savings and Loans credit union--making the country’s second-largest credit union. The combined credit union will have nearly $3.5 billion in assets. Austral has four branches and six agencies. Savings and Loans, which has 39 branches, has three branches in Melbourne (The Advertiser Sept. 9). Savings and Loans had $10.9 million in net profits this month. Austral CU declared a profit of $1.1 million last year on interest revenue of $11.9 million, the newspaper said.

New York governor signs mortgage tax exemption law

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ALBANY, N.Y. (9/11/08)--New York Gov. David A. Paterson signed a law exempting state charters from a mortgage tax, according to the Credit Union Association of New York. He signed the Special Additional Mortgage Recording Tax (SAMRT) bill at the end of last week. One of a package of 66 bills signed, the bill (Ch. 522) exempts state-chartered credit unions from the special addition mortgage recording tax beginning in 2010. The new law levels the field with their federal credit unions, said the association. Effective immediately, the law also allows federal credit unions choosing to convert to a state charter to retain their exemption from the tax. "This pro-credit union legislation is a major victory for New York credit unions," said William J. Mellin, president/CEO of the association. "The signing of this bill was the result of a great team effort by the association and our member credit unions who lobbied heavily for this charter parity measure." He noted the law remedies a charter disparity and enhances the dual chartering system in the state for every credit union. "It is clear that our state's elected leadership recognize that credit unions have always granted affordable and responsible home loans and that, by making their mortgages more affordable, they are allowing state charters to do more for their members and their communities." Sponsors of the legislation were Assemblywoman and Speaker Pro Tempore Aurelia Greene (D-Metropolitan) and Sen. Hugh Farley (R-Capital/Adirondack), chair of the Banks Committee. The legislation was passed by both the Senate and the Assembly in June.