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Marketer to Texas CUs Eradicate old marketing ways

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FARMERS BRANCH, Texas (9/12/12)--Credit unions have never had a better opportunity to seize greater market share. However, they must evolve, Sean McDonald of Your Full Potential LLC, told Texas credit unions at the Texas Credit Union League Leadership Conference & Expo in San Antonio last week.

"The old way of doing things have to be eradicated," he said in his "CU Marketing: What You Simply Must do to Survive" presentation (LoneStar Leaguer Sept. 10). "I'm not saying that traditional marketing doesn't have its place, it does for certain demographics," McDonald told attendees. "But it doesn't work for younger people."

Social media isn't going away. Facebook is about to eclipse one billion users. Twitter has more than 300 million users, and LinkedIn has roughly 160 million users, McDonald said.

"The amount of time spent on computers and on the Internet by Gen X and Gen Y is staggering," McDonald said. "Why not take advantage of this? It's a whole lot cheaper than traditional marketing."

At the very least, credit unions need to have a Facebook page and a Twitter handle, McDonald said. Technology is essential, and credit unions will have to invest in new and innovative marketing techniques to capture the attention of a younger audience, he added.

What can credit unions do better? McDonald suggests:

  • Simplify. Don't over complicate products and services. If it's a holiday loan, call it a holiday loan;
  • Dedicate more resources to staff training and development;
  • Focus on big ideas;
  • Revamp and modernize old policies and procedures; and
  • Get out more; don't wait for them to come to you.
He also noted that financial literacy is an excellent way to reach a younger audience. "If your credit union isn't offering financial education, this should become a top priority in your strategic planning initiatives," he said.

Also, stop trying to come up with clever names for the sales process, and stop being afraid of the idea of selling, McDonald added.

"Sales is not a dirty word," he said. "We've got to stop thinking that all sales is pressure-selling."

Credit unions simply must approach the sales process in a different way, he explained. "Credit unions are in the relationship-building business and that is how you redefine the selling process," McDonald concluded.

NCUA lawsuit vs. St. Paul Croatian FCU figure stayed

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CLEVELAND (9/12/12)--A motion to stay the lawsuit filed by the National Credit Union Administration (NCUA) against A. Eddy Zai, a developer indicted for allegedly providing kickbacks for loans that contributed to the collapse of St. Paul Croatian FCU, has been granted by a federal court in Ohio, pending the outcome of the criminal case against Zai.

U.S. District Judge John R. Adams granted the stay on Aug. 31 in the U.S. District Court for the Northern District of Ohio Eastern Division. "The court recognizes that continuing in this civil matter will directly implicate Zai's Fifth Amendment rights. Furthermore, given the court's actions in seizing substantial portions of the funds that plaintiff (NCUA) seeks to attach, there is no risk that the funds will be dissipated at any time during the course of the criminal proceedings," said Adam's order.

The court noted that NCUA's "rights in the property will remain protected throughout those proceedings."

Zai was indicted on Feb. 7 on 34 counts related to allegedly obtaining $16.7 million in fraudulent loans from June 2009 until the Eastlake, Ohio-based credit union was liquidated on April 30, 2010.

NCUA, in its role as liquidating agent for St. Paul Croatian FCU, sued Zai; Tina Zai of Pepper Pike, Ohio; former Trumbell County Commissioner Ted M. Vannelli of Kirtland, Ohio; and The Cleveland Group and nine related entities.  Vannelli, who is Zai's father-in-law, pleaded guilty to participating in the loan scheme (News Now May 31).

The defunct credit union's former CEO, Anthony Raguz, pleaded guilty to issuing more than 1,000 fraudulent loans, totaling more than $70 million, to about 300 accountholders.  He also pleaded guilty to accepting more than $500,000 in bribes, kickbacks and gifts from the borrowers. His sentencing is set for Nov. 20 (News Now Aug. 9).

Nineteen people have been charged in the scheme. The alleged ringleader in the fraud, Koljo Nikolovski of Eastlake and Skopje, Macedonia, was sentenced in May to 18 years in prison for his role in the fraud (News Now May 14).

St. Paul Croatian FCU was one of the largest credit union failures in history, costing the National Credit Union Share Insurance Fund about $170 million.

NIHFCUs short-term mortgages take off

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ROCKVILLE, Md. (9/12/12)--The National Institutes of Health FCU (NIHFCU) in Rockville, Md., began offering short-term mortgages three months ago, and the product offerings thus far have been a success.

In that time, the $562.2 million asset credit union has originated roughly 100 five- and seven-year fixed-rate mortgage loans totaling $10 million. They comprise about 20% of the credit union's monthly mortgages (The Washington Post Sept. 7).

Those types of loans currently are extremely popular in the area, Juli Anne Callis, NIHFCU president/CEO, told the Post.

Credit unions and banks are seeing an increase in the number of vacation and second-property purchases, and many are being funded with short-term loans, the newspaper said.

NIHFCU calls that type of financing the "goodbye mortgage," Callis told the paper. Once people pay off their homes and college tuition and expenses, they can afford to purchase and pay off a dream home, Callis added.

The number of overall U.S. mortgages in June was up 23.7% from a year earlier, the Mortgage Bankers Association told the Post. It does not specifically monitor short-term loans.

Although members haven't yet requested five- or seven-year mortgages, Bill White, vice president of residential loans at $1.19 billion asset NASA FCU in Upper Marlboro, Md., told the paper, many members are aggressively paying off their 10- and 15-year loans early because they have a retirement date in mind.

To read the article, use the link.

Cooperative mobile app launched by NCBA

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WASHINGTON (9/12/12)--Consumers can now shop locally, support values-based businesses and find affordable alternatives to for-profit businesses in their communities with the new CooperateUSA mobile app and online directory.

CooperateUSA.coop and the CooperateUSA app are free resources developed by the National Cooperative Business Association (NCBA) in partnership with Co-operatives UK and National Cooperative Bank (NCB) to provide access to 29,000 U.S. cooperatives in several industries, including credit unions and financial service, grocery and consumer goods, healthcare, childcare, housing, transportation, utilities and more.

"Cooperatives continue to outperform for-profit businesses when it comes to consumer satisfaction and now consumers have a free resource at their fingertips that will enable them to experience the co-op difference firsthand," said Liz Bailey, NCBA interim president/CEO. "It's never been easier for consumers to shop locally, support values-based businesses and create jobs in their local communities."

The app is compatible with Apple and Android smartphones and tablets, and offers features that include:

  • A locator to help find 29,000 U.S. co-ops by location, industry or product type;
  • Gaming features that tally points for cooperative activities and award prizes and discounts;
  • Timely updates about cooperative news, events and local offers; and
  • Education on how co-ops affect job creation, affordable housing, healthy food access and worker empowerment.
"Many people shop at cooperatives and purchase co-op products every day without knowing much about cooperatives," said Chuck Snyder, NCB president/CEO. "This tool helps build awareness of this successful business model and makes it easier than ever for consumers to live cooperatively."

Consumers rank cooperatives higher than for-profit businesses on several measures of quality and service, according to a recent study by NCBA and the Consumer Federation of America. The study found that nearly 80% of consumers believe cooperatives can be counted on to meet the customer's needs, and 74% believe co-ops have the best interests of the consumer in mind.

"This survey illustrates that cooperatives remain a trusted choice for millions of Americans who appreciate organizations that put the needs of the consumer first," Bailey said. "Now more than ever, consumers want an alternative to businesses that focus only on the bottom line."

Schools in with help from CUs

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MADISON, Wis. (9/12/12)--School is in session, and a number of cities have students sporting new backpacks, donning new duds, and working with new school supplies, thanks to projects across the country involving credit unions.

An overflowing Dollar Dog Bus at Chetco FCU, Harbor, Ore., finished its 2012 Stuff the Bus with school supplies for the Brookings-Harbor area elementary, middle and high schools. From left are: Allan Stewart, Maine volunteer; Lorie Botnen, CFCU Brookings-Harbor Branch manager; Mr. Martindale, principal of BHHS; Mrs. Lipski, Azalea principal; Adam VanCleave, CFCU marketing; Mrs. Chirinian, Kalmiopsis principal; and Brian Hodge, District 17-C school superintendent. (Photo provided by Chetco FCU)
Here are just a few examples of the help credit unions provided to help ensure students get off to a good start for the academic year.

During July and August, Co-op Services CU in Livonia, Mich., recently collected more than 60 new backpacks filled with school supplies--folders, notebooks, pens, scissor, pencils and more--as part of an area-wide donation drive in partnership with Volunteers of America Michigan, 96.3 WDVD and Fox 2 Detroit, said the Michigan Credit Union League (Michigan Monitor Sept. 10).

The backpacks will be distributed through Volunteers of America Michigan to students of low-income families.

"We have our credit union members and team members to thank for making our fourth annual Backpack Drive an outstanding success," said Jeremy Cybulski, youth and community development coordinator for the $415 million asset credit union.  "We also received a generous donation from the Downriver Wanderers Classic Car Club that allowed us to purchase extra backpacks and supplies."

Heritage Trust FCU, Charleston, S.C., donated more than 5,000 school supply items to the Lowcountry Orphan Relief Back-to-School Drive. In participation with Charleston Chapter of Credit Unions' 2012 charitable initiatives, Heritage Trust served as the collection site for employees and community members to donate new and gently used school clothing and supplies.

"We appreciate the opportunity to participate in this noteworthy endeavor and to give back to our local community," said David D'Annunzio, Heritage Trust senior vice president/chief financial officer.

Chetco FCU (CFCU), Harbor, Ore., co-sponsored its annual 2012 Stuff the Bus and helped the community fill CFCU's Dollar Dog bus to overflowing with school supplies for the Brookings-Harbor area elementary, middle and high schools. Throughout the week, CFCU's Dollar Dog bus was parked at four locations and a similar sized school bus was parked at three locations from 9 a.m. to 4 p.m. Monday through Friday for the community to fill with school supplies for the students.

Each day local businesses sponsored the event, and volunteers from local service organizations manned the busses to collect the supplies. They had a ready list of supplies needed--pencils, pens, backpacks, rulers, crayons, makers, scissors and glue sticks, highlighters, spiral notebooks, protractors, flash drives and more. More than $2,000 was collected and a record number of school supplies stuffed the bus to overflowing. 

"This is a heart-warming event for the community; it's exciting to be able to help kids with the supplies they need to start their school year off right," said Lorie Botnen, CFCU Harbor Branch manager and coordinator of the event. "The Dollar Dog bus definitely has a big impact on the attention this promotion receives; community folks know to look for the bus to make their donation." 

District School Superintendent Brian Hodge noted the "Stuff the Bus donations were HUGE…To a child there is nothing like coming to school with a new backpack full of supplies. You make our students' educational experience richer and more meaningful."

Jeremy Cybulski of Co-op Services CU, Livonia, Mich., and Emilie Rohrbach of Volunteers of America Michigan sort through some of the more than 60 donated backpacks filled with school supplies to be delivered to students in low-income families (Michigan Monitor Sept. 10).  Photo provided by the Michigan Credit Union League).
In Fall River, Mass., St. Anne's of Fall River CU donated 47 backpacks of supplies to the John J. Doran Elementary School there. Employees donated the supplies and more than 20 backpacks, while St. Anne's President/CEO Ross Upton matched the backpack count. Upton also donated 47 credit union lunch totes for the backpacks, noting that "anything we can do to assist our future leaders is money well spent."

St. Anne's also donated two big boxes of school supplies to Carney Academy in New Bedford. A fire in July damaged five classrooms, and credit union employees stepped up to collect replacement items for teachers to use in the classrooms..

Northumberland County Schools FCU in Milton, Pa., also held its fourth annual Stuff the Buss campaign in July and August. The $17 million asset credit union collected backpacks, binders, folders, notebooks, pens, scissors, pencils, index cards, flash cards, book covers and other supplies in a "bus" located in the credit union's lobby. It promoted the supply drive this year through Facebook, its website, its lobby, and through employees, according to Brenda L. Raker, loan officer.

Great Lakes CU (GLCU) in North Chicago, Ill., partnered with 102.3 WXLC radio to Stuff the Bus with a school bus on site for the first three Fridays at a designated GLCU branch for collecting donations. WXLC performed live broadcasts at the sites.  The $543 million asset credit union purchased the first $250 worth of supplies for Kenneth Murphy Elementary in Beach Park, West Elementary in Zion and Clearview Elementary in Waukegan. The generosity of GLCU employees, members and the public produced more than $800 in cash donations. COSTCO in Mettawa contributed 200 backpacks to the cause (Lake County News-Sun Aug. 30).

In Portland, Ore., OnPoint Community CU donated $5,000 to support the St. Vincent de Paul Society of Lane County school supply drive. OnPoint collected cash donations and school supplies through Sept. 3. A special collection event was held at Moshofsky Center, Eugene, on Sept. 1 before the University of Oregon football season opener. "We want to help ensure that all students have the tools they need to start the year off right," said OnPoint President/CEO Rob Stuart, noting that the credit union was founded by teachers.

Members First CU, Midland, Mich., partnered with radio station WIOG 102.5 to collect school supplies for children in the counties served by the $320 million asset credit union. Gladwin Shelterhouse appreciated the efforts, noting, "Anything that can improve students' lives and make things a little easier is truly appreciated."

In Burnsville, Minn., US FCU partnered with Volunteers Enlisted to Assist People (VEAP), an organization that serves low-income residents in the area, for a Back-to-School Program by holding a school supply drive. With support from the community, VEAP will work to serve more than 3,000 students this year with school supplies. USFCU collected more than 140 pounds of school supplies, including 21 backpacks.

In Baton Rouge, La., Neighbors FCU helped EBR Schools kick off its inaugural Back 2 School Expo for the school year at McKinley Middle Magnet school. The expo offered booths ranging from free back-to-school haircuts to information about EBR school resources, such as school websites, registration, attendance policies, transportation routes, and information on school lunch applications and nutrition.  The event provided more than 500 people with information to start off the school year.

Iowa CUs embrace Hispanic growth

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AMES, Iowa (9/12/12)--Hispanic Heritage Month is Sept. 15 to Oct. 15. One state where Hispanic culture has taken on increased significance in recent years is Iowa.

Iowa is not typically considered to be a multi-cultural magnet, but the rural Midwestern state is among the top 10 states where Hispanic buying power is growing the fastest, according to a 2012 University of Georgia study.  Many small, rural Iowa towns are approaching 50% in Hispanic population. The Hispanic population in Iowa grew 91.6% from 2000 to 2011, according to the Data Center of Iowa. By 2040, Hispanics will represent 12.7% of the state's population.

The driver of the Hispanic population growth is Iowa's agricultural and meat processing and packing industries, according to Anna Peña, client account coordinator at Coopera, an Iowa-based economic development firm focused on the emerging Hispanic market, which presents unique growth opportunities for credit unions.

"The initial trigger was economic opportunity in the form of agricultural and meatpacking plants, but now we're seeing the birth rate of resident Hispanics increase and more families are moving into the state's larger cities," Peña told News Now.

The growth has presented opportunities for Iowa credit unions, Peña said.

"Credit unions have really adapted to the market, not necessarily by creating new infrastructure but using their existing brick and mortar," Peña said. "In some areas, where member growth and loan growth were stagnating, Hispanic membership has been a primary driver of growth."

Ames-based Greater Iowa CU, with $301 million in assets, is among the credit unions that have achieved growth by adapting its service and marketing strategies to the Latino market.

Greater Iowa's Denison branch serves 35% to 40% Latino members, according to Michael Adams, Greater Iowa vice president of marketing and public relations. Denison's population is about 45% Latino, Adams said. The credit union's East Des Moines branch serves roughly 19% Latino members, according to Adams.

In its Denison branch, three of the four employees speak Spanish. Three of seven employees in the East Des Moines branch are bilingual. "That is that type of adjustment you need to serve this community," Adams told News Now. "But it's also about reaching out to the community. We also participate in cultural events and offer basic financial education in Spanish."

Greater Iowa CU also has added products tailored to the Latino community, such as remittance services and prepaid cards.

The credit union offers Individual Taxpayer Identification loans, which are made to members without Social Security numbers. "Banks certainly won't get involved with these and a lot of credit unions are wary of them," Adams said. "In two-and-a-half to three years we've been doing them, we have not had any issues. They are a great product for us."

Greater Iowa CU dedicates 15% of its marketing budget to the Hispanic market. The credit union offers a Cosa de la Vida loan, which is underwritten as a standard consumer loan marketed to the specific cultural needs of the Latino community, such as Quinceañera (a traditional celebration of a girl's 15th birthday) or the immigration process.

In the first quarter, Greater Iowa's CU's growth among its Hispanic membership was 8%, outpacing the 2% rate of overall membership growth. About 37% of Great Iowa's Latino members have loans. Roughly, 49% have checking accounts, the same as general membership, Adams said.

"There's very real growth there, and it's not just a social mission, though part of being a credit union is reaching out to the underserved," Adams said. "We have achieved a return, and it's been very rewarding for us."

Coopera works in partnership with the Credit Union National Association (CUNA) and credit unions to help credit unions nationwide grow by serving the Hispanic community. Coopera and CUNA designed El Poder es Tuyo (The Power is Yours), a customizable, Spanish-language personal finance website for Hispanic credit union members and potential members. For more information, use the resource link.

WOCCU teams with Boom Financial on mobile banking

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PALO ALTO, Calif. (9/12/12)--The World Council of Credit Unions (WOCCU) and Boom Financial have partnered to provide Boom mobile-banking services via credit unions in the developing world.

As the global trade association and development agency for 51,000 credit unions serving 196 million people globally, WOCCU will act as a broker, technical consultant and software payments solution to lead Boom Financial's expansion into new countries. Boom Financial will tap into WOCCU's established national credit union networks globally, laying the foundation for Boom to expand and deliver its service to underserved populations.

Boom Financial's money-sharing service allows credit unions to expand their geographic footprint and membership base beyond the standard service area of each branch location.

"Boom Financial shares World Council's vision of expanding financial inclusion through mobile technology and has the resources and people necessary to make it happen," said Brian Branch, WOCCU president/CEO. "We look forward to growing our partnership with Boom Financial to reach an even wider global community."

"Boom Financial and the World Council share common values and a deep passion to provide financial access to all," said Bill Barhydt, CEO of Boom Financial. The partnership will entrench Boom in new cross-border mobile banking. "Combining Boom's mobile-banking infrastructure with WOCCU's decades of experience in providing high-quality international financial services will become a key component of Boom's scaling strategy."

CU folks wear miracle jeans to help kids

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WASHINGTON (9/12/12)--Employees from more than 500 credit unions are wearing jeans to work today in honor of Miracle Jeans Day (MJD), a national fundraising campaign organized by Credit Unions for Kids (CU4Kids) to benefit  Children's Miracle Network (CMN) Hospitals.

This year's participation reflects a 60% increase over last year's credit union involvement, according to Felicity Guerin,  CU4Kids liaison for the American Association of Credit Union Leagues. The participating credit unions represent 47 states, plus the District of Columbia and Canada.

Aspire FCU of New Jersey celebrating 2011 Miracle Jeans Day. (Aspire FCU Photo)
In addition, employees from the Credit Union National Association and approximately half the state credit union leagues are embracing the MJD slogan, "Wear Jeans. Help Kids," almost doubling league involvement from 2011.

Last year, credit unions raised almost $200,000 through the Miracle Jeans Day campaign.  This year Children's Miracle Network Hospitals has set $400,000 as its fundraising goal.  Final results will be available as funds raised are remitted to CMN Hospitals.

To participate in MJD, employees donate $5, which goes to the CMN Hospital that serves their community.  In exchange, the employees get the nod to wear jeans to work.

"Some credit unions go a step further and involve their members," Guerin noted Tuesday.  She said they let members purchase a "Miracle Balloon" icon for $1.  That paper cutout of a balloon then displays the members' names, showing that they supported the CMN Hospital fundraiser.

Miracle Jeans Day participants that need information about submitting collected funds, and credit unions that would like to make a donation, can use the resource link below.

Dakotas foundation Fin lit grant applications due soon

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BISMARCK, N.D. (9/12/12)--Applications for financial literacy grants available through The Credit Union Foundation of the Dakotas are due Sept. 29. Community organizations and credit unions affiliated with The Credit Union Association of the Dakotas are eligible to apply.

The foundation is funded by participating North and South Dakota Credit Unions. It funds projects in the areas of access to financial services, financial education, savings and asset accumulation, and small credit union development.

All grant applications must include:

  • An organization description, legal name, address, primary purpose, and history;
  • The organization's letter from the Internal Revenue Service stating that it is tax-exempt under Section 501 (c) (3) or Section 501(c)(6) and not a private foundation under Section 509(a);
  • The most recent audited financial statement and complete copy of a recent form 990 federal tax return;
  • Current organization and project budget and proposed budgets for 2012.
  • Leadership information (board and staff); and
  • Other funding sources for the organization, including letters of in-kind support/funding commitments.
Interested organizations can obtain a grant application by contacting Amy Jo Johnson at 800-279-6328 ext.3954 or ajohnson@cuad.coop. Grant applications can also be obtained on the Credit Union Foundation of the Dakotas website. Use the link.

CU System briefs (09/11/2012)

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  • WAUSAU, Wis. (9/12/12)--A Green Bay, Wis., man was sentenced to 15 years in prison related to charges from an attempted robbery Jan. 10 at Connexus CU in Wausau. David T. Samuelson, 53, also was placed on 10 years of extended supervision. He was convicted on two counts of robbing the credit union as part of a plea deal. The conviction was his fourth robbery conviction in 34 years. Samuelson was convicted in a 1978 burglary, a 1984 armed robbery, a 1993 robbery in New Mexico, a 1994 robbery, and a beating of his wife in 2009. He already has spent 21 years in prison during his lifetime. Before the sentencing, prosecutors played a 20-second surveillance video taken from four cameras at the credit union robbery scene (Wausau Daily Herald Sept. 11) …
  • EAST WINDSOR, N.J. (9/12/12)--More than 80 golfers teed off Sept. 4 at the VOICE Foundation's eighth annual Charity Golf Classic, hosted by East Windsor, N.J.-based McGraw-Hill FCU (The Daily Exchange Sept. 11). The golfers raised more than $50,000 for local charitable organizations supported by the VOICE (volunteerism, outreach, involvement, community and education) Foundation. Among the beneficiaries are the National Junior Tennis and Learning of Trenton, which strengthens character and enhances the lives of local youth by providing life skills instruction in nutrition, education and tennis, and the Children's Miracle Network Hospitals, which supports 170 children's hospitals across North America. Pictured are members of the winning team with McGraw Hill FCU President/CEO Shawn Gilfedder (second from left). The others are, from left, John Dawidowski, Todd Kimball and Felix Miranda. (Photo provided by the New Jersey Credit Union League) …