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WOCCU monitoring disasters overseas

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MADISON, Wis. (10/1/09)--The World Council of Credit Unions (WOCCU) has not received any reports from the field about credit unions in several nations and territories hard-hit by earthquakes, tsunamis and Typhoon Ketsana along the Pacific Rim Tuesday and Wednesday. The countries, some of which have areas of widespread damage and climbing death tolls, are:
* Sumatra, an Indonesian island hit by an 7.6 earthquake, killing at least 75 people and trapping thousands. Padang, a city of 900,000 people, is on one of the most active fault lines where the Indo-Australia tectonic plate grinds against the Eurasia plate (Reuters Sept. 30); * The Samoa Islands--Samoa and American Samoa--hit by a tsunami with four waves, each 15 to 20 feet high. The death toll stood at 119 people, with dozens more missing. The tsunami caused a tsunami advisory along the West Coast of the United States, but the impact was uneventful(The New York Times and Los Angeles Times (Oct. 1). *Tonga, south of the Samoas--Six people were confirmed dead and four were missing. * Vietnam, hit by Typhoon Ketsana, confirmed at least 41 deaths from flash floods and mudslides. Hardest hit were the provinces of Quang Nam, Thu Tien Hue and Quang Tri, with four other provinces also affected, said the government. * Cambodia, hit by the typhoon, has 11 confirmed dead. * Philippines, hit by Typhoon Ketsana, confirmed at least 246 deaths and 2.3 million people with flooded homes. More storms were heading toward the Philippines Wednesday.
According to WOCCU's 2008 Statistical Report, Vietnam has 1,015 credit unions, and Indonesia has 950. Any credit unions in Sumatra are counted in the Indonesia total. Figures for Samoan Islands were not available, said WOCCU spokesman Michael Muckian. Cambodia has 80 credit unions, Tonga has 63, and the Philippines, 1,278. None have reported damages so far.

Economy sparks more CUs in mortgages FHA programs

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MADISON, Wis. (10/1/09)--Credit unions are playing an increasing role in the lending arena--particularly mortgage lending. As qualification standards tighten and private mortgage insurance (PMI) becomes harder to obtain, lenders are turning to Federal Housing Administration (FHA) programs to meet demand, explained Linda Clampitt, senior vice president of CU Members Mortgage. Clampitt added that CU Members Mortgage processed 111 FHA loans ($15.6 million) in 2007. However, that number jumped to 851 loans ($129 million) in 2008, and 1,341 loans ($198.5 million) to date in 2009. “FHA loans offer a valuable option for originators because it is one of the most flexible mortgage products available during these difficult economic times,” Clampitt said. “We’ve added 142 credit unions this fiscal year to our list of FHA sponsored agents, and seven additional credit unions are in process right now--that’s more than double what we had last year. “FHA programs offer low down-payment options for the credit qualified at reasonable costs,” she added. “And because an FHA loan insures the lender against loss, this type of loan typically has an interest rate that is among the best in the market.” In previous years, there were so many conventional products available that many credit unions did not work FHA programs extensively, Clampitt said. Also, until last year, credit unions saw success by offering other loan options. But the sweeping changes in the mortgage industry have changed the lending environment completely. The challenge now facing many credit unions is having a strong compliance department to help navigate regulatory changes accurately and having the technology to respond to demand and the expense to manage both, Clampitt said. Credit unions originated 38.8% more first-lien mortgages in second quarter of 2009 compared to the same time in 2008, according to Callahan & Associates’ First Look Program market research. Credit unions surveyed reported originating a combined $30.7 billion in mortgages during the quarter, up 16.1% from the first quarter of 2009. Growth in credit union lending comes at a time when credit availability for consumers remains a key issue. Consumers are looking for help and value, and they are finding both at credit unions nationwide, the company said.

Survey How FIs can help consumers through economy

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BROOKFIELD, Wis. (10/1/09)--Credit unions can help their members survive a tough economy by providing more robust online functionalities--such as same-day bill pay, free budgeting tools and alerts to avoid service fees, says a new survey. Fiserv, a financial services technology provider based in Brookfield, Wis., asked consumers how their financial activities have been impacted by the recession and how financial institutions can help them gain a greater sense of control of their finances. The survey, “Coping with the Crisis,” was conducted by Forrester Consulting on behalf of Fiserv. It questioned 1,002 online adults in the U.S. The survey updates a previous study conducted by Fiserv in October 2008. About 91% of consumers who use online banking said it is critical for managing finances. Because of the recession, 32% of online banking users said they are accessing their accounts more often--an increase from 28% in October 2008. Roughly 74% said they are paying more attention to their finances than in previous years, compared with 71% last October. Thirty-eight percent of consumers said they wanted their financial institutions to send them alerts to avoid service fees. About 33% indicated they wanted same-day bill payments, 31% wanted free budgeting tools, and another 31% said they wanted reminders when their online bills are due. The survey also asked consumers what functionalities would help them control their finances the most. Some of the suggestions included:
* Being able to pay bills the same day they are due (64%); * Alerting consumers to issues they need to pay attention to, such as due dates or a low balance (56%); and * The ability to manage all accounts from one site (53%).
More than one-third of consumers surveyed noted that personal financial help from their financial institution also would help them feel in control of their finances.

GTE FCU cuts nearly 5 of staff

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TAMPA, Fla. (10/1/09)--Due to a struggling economy, GTE FCU laid off about 5% of its employees at its Tampa, Fla., headquarters on Friday. The credit union had roughly 600 employees. The board looked at several scenarios when assessing the layoffs--including the “human factor” and net worth, Doug Richardson, GTE FCU senior vice president of marketing, told News Now. Employees who were laid off received severance packages based on their years of service. The credit union is not planning any future layoffs, unless area unemployment rates significantly increase. Currently, the unemployment rate in the Tampa area is at 10%. “We made loans to people who had jobs and now they’ve lost their jobs,” Richardson said. GTE FCU also closed eight branches Sept. 15. The branches were located in Portland, Maine; Baton Rouge, La.; New Orleans; and north Florida. The credit union alerted members prior to the closings that they could still receive service through GTE’s telephone center, shared branching and CO-OP network ATMs. “We did the best we could,” Richardson said. The closings allow the credit union to focus more on the Tampa area--where 75% of members are located, he added. Although GTE FCU is being careful with its funds given the tough economy, it is still putting a lot of time and energy into its U22 savings and debit account program, which was launched this year and targets 12- to 22-year old members. As of this week, the program has 1,600 accounts with 56% brand-new accounts, Richardson said. The credit union has offered some incentives, such as meeting Tampa Bay Rays baseball player Evan Longoria, and is looking to further promote U22 at an upcoming music festival.

SW Corp. keynoter Feldstein Expect double dip recession

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DALLAS (10/1/09)--Although recent data has brought hopeful signs to the economy, credit unions can expect a recovery that will be difficult to sustain, according to Harvard University Professor of Economics Martin Feldstein. Feldstein will be a speaker at Southwest Corporate FCU's 32nd annual Economic Forum Oct. 27-28 in Dallas. Credit Union National Association (CUNA) Chief Economist Bill Hampel and others will also speak at the forum. "This recovery is very different from a normal business cycle, so results cannot be interpreted like a normal business cycle," Feldstein said. "Recent economic improvements have been driven by fiscal stimulus and special programs. Consequently, I think this recovery will run out of steam next year, and we'll see 'double dip' recession." His presentation at the forum will explore the reasons why he believes the recent economic upswings are only temporary. Feldstein is a member of President Barack Obama's Economic Recovery Advisory Board. He previously was a member of President George W. Bush's Foreign Intelligence Advisory Board and was President Ronald Reagan's chief economic adviser. He also served for nearly 30 years as president/CEO of the National Bureau of Economic Research, a private, nonprofit research organization specializing in the American economy. To solidify the current economic recovery, said Feldstein, the Obama administration must deal with two hurdles: bank balance sheets and downward pressure on real estate prices that comes from the foreclosure process. "The administration recognizes the problems but doesn't have policies to deal with them effectively. That's going to increase risk going forward," he said. He indicated that the real estate market's woes may not be over. "About one-third of existing home sales today are the result of defaults and foreclosures. I don't think we've seen the end of declining home values," he said. "And commercial real estate may be the next big disaster. Banks are not going to be willing to roll over loans to commercial investors, so defaults are likely to increase." The Federal Reserve will face challenges in trying to keep a lid on inflation, Feldstein said. "The Fed has played a non-traditional role over the past year--issuing credit--and the effect has been to put a lot of extra cash in the bank. The question is: 'Are there going to be problems with inflation in undoing that?'" He acknowledged recent positive indicators in industrial manufacturing and housing, but suggested that the consequences of a fiscal deficit that is 5% of the gross domestic product will be a slowing of economic growth and a rise in inflationary risk. "The fiscal deficit is much bigger and much worse than any we've seen," Feldstein said. In addition to Feldstein and CUNA's Hampel, other speakers will include financial experts Marci Rossell, former economist at the Dallas Federal Reserve and former chief economist at CNBC; William Ford, former president of the Federal Reserve Bank of Atlanta and former American Bankers Association chief economist; Gigi Hyland, National Credit Union Administration board member; Charles Idol, Southwest Corporate consultant and credit union industry economist; and Phil Gramm, former U.S. senator from Texas. Early bird registration will end Tuesday.

CU savings surprisingly down loans up

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MADISON, Wis. (10/1/09)--Credit union savings balances unexpectedly declined in August, while loans grew slightly, according to a Credit Union National Association (CUNA) economist’s analysis of CUNA’s monthly sample of credit unions.
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Credit union savings balances declined 0.5% in August, but grew 8.3% to $755.1 billion during the first eight months of 2009. In August, money market accounts led savings growth with a 1.4% increase, followed by individual retirement accounts (1.2%). One-year share certificates declined 0.7%, while regular shares and share drafts declined 1.6% and 2.1%, respectively. “Credit union savings balances fell a surprisingly large 0.5% in August, reversing the surge in savings balances seen this year,” Steve Rick, CUNA senior economist, told News Now. “We typically see a seasonal savings decline of 0.46% in August as members withdraw funds for vacations and back-to-school shopping. But we had been seeing a strong underlying trend of monthly growth in savings of around 0.8%. “Year-to-date credit union savings balances are up 8.3%, compared to a 5.8% gain for the similar period last year,” he added. “Given the savings pace so far, credit unions could end up posting a 10% increase in savings balances this year, the fastest pace since the 11.3% posted in 2002.”
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Credit union loans outstanding increased 0.7% to $590.5 billion during August and 1.7% during the first eight months of 2009, down from a 5.1% increase during the same period in 2008. During the month, credit card loans led loan growth, rising 1.6%, followed by unsecured personal loans (1.4%) and home equity loans (1.3%). New-auto loans, used-auto loans, and other loans each increased 0.7%, while fixed-rate and adjustable-rate mortgages increased 0.6%. Other mortgages decreased 0.8%. “Loan balances grew a modest 0.7% in August, slower than the 1% pace set last August,” Rick said. “Credit union members are still hesitant to take on new credit due to worries of possible job losses. The government's ‘Cash for Clunkers’ program did reverse a nine-month slide in new-auto lending. “Credit unions posted a 0.73% increase in new-auto loan balances in August, up from no growth last August,” he added. “The program probably pulled forward new-auto demand, so we expect a sharp drop in new-auto lending for the next few months.” The movement’s overall capital-to-asset ratio increased to 9.9% in August. The total dollar amount of capital is $89 billion. Credit union 60-plus-day delinquencies remained constant from July 2009 to August 2009 at 1.7%. “The credit union movement's capital-to-asset ratio climbed back over 9.9% in August, up from its recent low of 9.4% in May, but below the 11% set last August,” Rick said. “Delinquent loans now stand at 1.72% of total loans outstanding as rising unemployment and falling home prices increase both default and collateral risk.” The loan-to-savings ratio increased slightly to 78.2% in August 2009. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--decreased slightly to 19%.

Rosenthal honored for community economic development

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WASHINGTON (10/1/09)--Clifford Rosenthal, president/CEO of the National Federation of Community Development Credit Unions, will be honored by the Insight Center for Community Economic Development in Washington, D.C., Nov. 12, for his commitment to community economic development. The center, formerly known as the National Economic Development and Law Center, is honoring individuals who have played important roles in improving the lives of low-income and working families. The center and federation have been longtime partners to help those in poverty, the low-income and working families. The federation represents more than 200 community development credit unions, which provide credit, savings, transaction services and education to more than one million residents of low-income urban and rural communities.

CU System briefs (09/30/2009)

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* MILFORD, Conn. (10/1/09)--A man robbing Sikorsky Financial CU in Stratford, Conn., Tuesday morning threatened to shoot the tellers and members during the incident (Connecticut Post Sept. 30). The man wearing a dark hoodie pulled over his head entered the $605.2 million asset credit union, yelling and screaming. He vaulted over the counter, ordered four tellers and four customers to "get down" on the floor, and threatened to shoot everyone, said police. He grabbed money from cash drawers, jumped over the counter again and ran toward a donut shot. No weapon was displayed and no one was injured … * HARRISBURG, Pa. (10/1/09)--Angelique Pattillo has joined the Pennsylvania Credit Union Association (PCUA) as a compliance and operations officer. She has 14 years of credit union experience in positions from teller to branch manager at Members 1st CU, Mechanicsburg, and Patriot FCU, Chambersburg. In her new position, Pattillo will assist credit unions with compliance questions on PCUA's toll-free hotline and e-mail, and provide Compliance Cavalry services in the central part of the state (Life is a Highway Sept. 30) … * TEMPE, Ariz. (10/1/09)--Tempe Schools CU today will launch its first Health Education Loan Program (HELP), which focuses on reduced interest rates on auto loans, credit cards, mortgage loans, and loan consolidation with fiscal checkups and special loan experts. The HELP Program was inspired by Statewide FCU, Flowood, Miss., which piloted a similar program called Credit Emergency Room. This month the Tempe Schools CU staff will wear scrubs and be identified with name badges and area of expertise. Special LOANcologists will help consolidate loans. The AUTOstesiologists and CARdiovascular Surgeons will assist with reducing rates on auto loans. The HOMEotology Specialist and OrthoHELOC Technologist will provide a no-cost mortgage analysis and waive appraisal fees if the loan is refinanced with the credit union. And VISAcular Specialists will assist with credit cards …

Bankrate Banks charging record fees

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NEW YORK (10/1/09)--Banks fees for bounced checks, ATM use and checking account service charges hit record highs in August, according to a Bankrate.com study released Wednesday. Bounced-check fees averaged $29.58 for the first bounced check, an increase of 2.1% from 2005 (ABCNews and USA TODAY Sept. 30). Roughly 26% of banks surveyed use a tiered pricing system to impose progressively higher fees for multiple overdrafts in a 12-month period. The average cost for the second, third, and fourth bounced checks rose to nearly $34 each. Charges for an interest-bearing checking account were up nearly 3.5% from 2004 data-- to a record $12.55 per month, said Bankrate(USA TODAY). Last year the cost was $11.97 or 5% less. The average minimum-opening balance requirement increased to $473.12 from $376.75. ATM fees also rose. In 2009, the average fee to use another bank's ATM was $3.54, up 16% from 2004 and 7% since 1999, when the average fee was $1.12. This includes the fee charged at the ATM as well as that charged by the consumer's bank. Consumers also paid more for online banking. Online checking accounts that earn interest have a higher average minimum balance--$681.50--than traditional banks but they offer better yields, lower balance requirements and lower monthly fees, said Bankrate. Bounced-check fees at online banks increased to $29.78 and the average ATM surcharge increased to $1.88.

CU System briefs (09/29/2009)

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* LANSING, Mich. (9/30/09)--The Grand River Chapter of the Michigan Credit Union League met with U.S. Rep. and gubernatorial candidate Peter Hoekstra (R-Holland) and six state lawmakers for a legislative breakfast Sept. 21 (Michigan Monitor Sept. 28). Forty-five credit union representatives attended the event, which included a panel discussion on federal and state issues. Issues discussed included President Barack Obama's health care plan, the economy, term limits and a part-time legislature, revenue sharing, education, the state budget and the federal stimulus. In addition to Hoekstra, lawmakers present included State Reps. Roy Schmidt and Robert Dean (both D-Grand Rapids); Dave Hildenbrand (R-Lowell); Tom Pearce (R-Rockford); Kevin Green (R-Wyoming); and Dave Agema (R-Grandville). Staff was present from the office of State Sen. Mark Jansen (R-Grand Rapids) … * BIRMINGHAM, Ala. (9/30/09)--Jefferson County Employees CU, based in Birmingham, has made a $5,000 contribution to the County Employees Relief Fund and created a Member Assistance Plan (MAP) to help members through the economy. The fund is for employees affected by furloughs in paying their health insurance premiums in September. Charles Faulkner, CEO, personally contributed $2,500 to the fund, which is managed by the Jefferson County Employees Association, said Patrick Nicovich, board chairman at the $63.1 million asset credit union. MAP was created to help members having trouble making loan payments or needing tips on stretching their budgets, said Faulkner. MAP provides resources, advice and solutions to meet challenges, including loan restructuring, financial counseling, financial review and budgeting resources … * DENVER (9/30/09)--David Maus, president/CEO of Public Service CU (PSCU) in Denver, received the 2009 Ally of the Year Award from the Women's Vision Foundation Tuesday at the Colorado Convention Center. He was honored as a senior executive man recognized as a champion for the advancement and support of women within their organization and the community. Maus was recognized for providing multiple education opportunities, understanding the balance between women's professional and personal lives, and fostering women's programs and advancements. He also was praised for support of nonprofit organizations and for making it a priority at the credit union to leave a responsible corporate footprint on the environment (PR Newswire Sept. 29) …

Team Little Guys first fundraiser nets 8000

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GREENSBORO, N.C. (9/30/09)--Team Little Guy, a group of cyclists in North Carolina hoping to raise $100,000 for Hope for the Warriors, a nonprofit that assists and cares for wounded veterans, kicked off the team's first event Saturday and raised nearly $8,000. North Carolina Credit Union League and Marine FCU are sponsoring the team, which will participate in a series of athletic events to raise money for the Warrior's Hope and Care Center, which will be built near Camp LeJeune (ENCToday.com Sept. 29). Saturday's event was the Tour to Tanglewood in Greensboro. Team Little Guy--named after the Credit Union National Association's Little Guy featured in its advocacy and awareness campaign--has been taking part in fundraisers for about three years, according to Eric Gelly, executive vice president and chief operating officer of the league. He told the newspaper that the Little Guy featured on team T-shirts and logos represents the credit union ideal of "looking out for the average everyday folks." Most of the team work for local credit unions. They range in age from 27 to 63, but most are in their 40s, Gelly said. He added that the group's relationship with Hope for the Warriors is more personal this year. One of the team's veteran riders, Army reserve Lt. Col. Thomas Heyden, shipped out to Iraq on Sunday.

Pressing Compliance Issues audio conference next week

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MADISON, Wis. (9/30/09)--Another "Pressing Credit Union Compliance Issues" audio conference will be offered next week to address new "hot topics" in the compliance area, according to the Credit Union National Association (CUNA). The conference is set for Wednesday, Oct. 7 from 1 p.m. to 2:30 p.m. CDT (or 2-3:30 p.m. EDT; 12 to 1:30 p.m. MDT; and 11 a.m.-12:30 p.m. PDT). Participants can:
* Get ready to comply with the Internet gambling regulations, effective Dec. 1--with commonly asked questions; * Understand what changes must be made in their overdraft programs by year-end (Truth-in-Savings regulations are effective Jan. 1) and get an update on the Fed's Reg E proposal on charging fees on ATM and one-time debit card overdrafts; * Get a quick review of the Department of Housing and Urban Development's (HUD) amended Real Estate Settlement Procedures Act (RESPA) regulation (effective Jan. 1), and the agency's recently issued "Frequently Asked Questions on RESPA; * Get an update on a recently issued Currency Transaction Reporting (CTR) Exemption with Frequently Asked Questions; * Prepare for the new Reg Z open-end lending provisions, with four things your credit union should do now (effective next July); and * Hear where things stand on the implementation of the Credit Card Act provisions scheduled to go into effect Feb. 22, on proposed regulations and congressional concerns.
Also, CUNA Regulatory Affairs staff will provide quick status updates on:
* Implementation of the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act's Nationwide Mortgage Licensing System and Registry; * The Fed's Reg Z proposal on closed-end mortgage lending and home equity lines of credit rules; * Financial Crimes Enforcement Network's (FinCEN) plan to issue a proposal to apply the Bank Secrecy Act to store value cards; and * Fair and Accurate Credit Transactions Act (FACTA) rulemaking on risk-based pricing.
Cost is $89 for the live audio conference, which also includes six months' access to the archive. For more information, use the link.

FOM expansion ruling a win for all Pa. CUs

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HARRISBURG, Pa. (9/30/09)--Monday's ruling by a Pennsylvania court--which upheld the state Department of Banking's decision to grant five-county field of membership (FOM) expansions to two credit unions--is significant, according to the Pennsylvania Credit Union Association (PCUA). "This ruling is significant because it is the first time in all of the state litigation that the courts have addressed the 'well-defined local community' analysis employed by the banking department," said Rick Wargo, general counsel for PCUA. In a 54-page opinion, the Commonwealth Court of Pennsylvania upheld the expansions granted by the banking department to Freedom CU, Warminster, and TruMark Financial CU, Trevose, in 2003. They sought to expand to five counties--Bucks, Chester, Delaware, Montgomery and Philadelphia Counties, all within the Philadelphia metropolitan area. The opinion addressed the evidence the credit unions presented to the department in support of their community charter notices. It held that the evidence given by the credit unions supported the banking department's conclusion that the credit unions' notices contained evidence that the expansions constituted a "well-defined local community." The ruling also addressed other banker arguments in the context of litigation. The court found in favor of the banking department and the credit unions on all arguments. (Use resource link to access News Now's article in Tuesday's edition on the decision.) "It's been a long, hard battle, but worth the cost to establish this type of precedent in the community chartering area for Pennsylvania credit unions," said Jim McCormack, PCUA president/CEO. "Advocacy involving these types of issues is specifically why trade associations exist and is why the association committed its resources and support in this important litigation," he added. He thanked the association's legal staff, Rick Wargo and Laurie Kennedy, for their "outstanding work on this case," and the credit unions "for persevering and remaining committed to this case during the past five years. This is a win for all Pennsylvania credit unions," McCormack concluded. The court ruling "may have implications for states with 'wildcard' provisions in their statutes that give state-chartered credit unions parity with the Federal Credit Union Act's field of membership provisions," said Michael Edwards, counsel for special projects at the Credit Union National Association (CUNA). However, that depends on state law. Many of the state 'wildcard' statutes give wildcard parity for only for "powers"--such as making loans, accepting deposits-- rather than powers and field of membership, as Pennsylvania's statute does, Edwards told News Now. "The 'well-defined local community' issue has been extensively litigated in federal court with regards to federal credit union FOM expansions, including in federal court in Pennsylvania in a case that concluded last year," Edwards said. But the court "endorsed the Pennsylvania Department of Banking using the NCUA Chartering Manual as, in the words of the court, 'guidelines' instead of following all of the provisions of the manual--which the banks tried to argue the Pennsylvania Banking Department should have done, but the court did not agree." A number of cases have been brought by Pennsylvania's bankers in state court challenging the validity of the new community charters of credit unions and administrative procedures the state regulator used to approve those charters. All the cases have ended in a final disposition or been dismissed unless the banks choose to appeal the Commonwealth Court's decision to the Pennsylvania Supreme Court. Other issues were resolved earlier, including:
* On May 21, the court issued an order in the Freedom CU and Trumark Financial CU case that "discontinued" the bankers' challenges on two credit union state taxation issues--whether the state legislature had authority to confer tax-exempt status on credit unions and whether the state's Constitution required "uniformity of taxation" between credit unions and banks. * On Dec. 18, 2008, in a case involving the community charter application of Belco CU, Harrisburg, the Pennsylvania Supreme Court rejected most of bankers' argument--that they had a right to a hearing and discovery as part of the community charter application process under state regulations. In late March 2009, the Commonwealth Court dismissed the remaining aspects of the matter, effectively ending the case.

OpSS Council announces new executive committee

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Madison, Wis. (9/30/09)--The new executive committee and officers for the CUNA Operations, Sales & Service Council (OpSS) were announced during the council’s 12th annual conference, which ends today in San Diego. Jennifer Lehn, executive vice president, Numerica CU, Spokane Valley, Wash., moved from the vice chair to the chair position, replacing Carolyn Jordan, senior vice president of retail operations at Neighborhood CU, Dallas. Sue Douglas, senior vice president and chief operating officer, State Employees’ CU, Raleigh, N.C. was named to the vice chair position, and Debbie Baumann, chief financial officer and chief operating officer, Mazuma CU, Kansas City, Mo., is the new secretary/treasurer. Three new executive committee members were elected for three-year terms:
* Dave Tate, vice president, branch operations for Anheuser-Busch Employees’ CU, St. Louis; * Tina McMinn, vice president, operations, Stanford FCU, Palo Alto, Calif.; and * Robb Keith, senior vice president of retail services, Members 1st FCU, Mechanicsburg, Pa.
The three replace: Chris Lamb, executive vice president and chief operating officer, E1Financial CU, Monterey Park, Calif.; Mike Fanelli, chief financial officer and chief operating officer, Atlantic FCU, Kenilworth, N.J.; and Jordan. The CUNA OpSS Council executive committee also includes:
* Keith Kauffeld, vice president of operations, Air Academy FCU, Colorado Springs, Colo.; * Lucy Ito, senior vice president of growth/development, California and Nevada Credit Union Leagues, Ontario, Calif.; and * Patti Dixon, vice president of service centers, Baxter CU, Vernon Hills, Ill.

Developers sue CU for failed condo project

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DAVENPORT, Iowa (9/30/09)--Two property developers are suing a Moline, Ill.-based credit union for up to $16 million in damages on behalf of a failed condominium complex, according to opening statements in Scott County District Court in Iowa. IH Mississippi Valley CU is the target of a suit filed by Cypress Point Developments, which claims the credit union wanted out of a $3.5 million loan to develop a condominium complex in Davenport, Iowa. The developers, Niky and Thomas Bowles, seek damages of $16 million--the amount that they thought they would make from the project (Quad City Times Sept. 29). The Bowleses claim the credit union wanted to get rid of the loan because it had locked in a lower interest rates for them than it would have received from other borrowers. The developers also said the credit union had gone over its regulatory lending limits, the newspaper said. The credit union had not exceeded its lending cap, according to a 5300 call report from the National Credit Union Administration. Credit unions granting member business loans are not allowed to lend out more than 12.25% of their assets. Jon Fox, the credit union’s attorney, said when IH Mississippi Valley CU decided not to extend the loan and file for foreclosure, the Bowleses began blaming the credit union for the failed project. The Bowleses want to be bailed out from their own mistakes, Fox said. News Now contacted the credit union, but a spokesperson said it did not wish to comment due to the ongoing litigation. The trial could last through next week, the newspaper said. The condominium complex and the land on which it is located have been involved in at least six lawsuits. Several contractors have won suits against the Bowleses for unpaid work and contract disputes (Quad City Times March 18, 2008). The Bowleses announced plans for the condo development in 2003. Niky Bowles said the development would have 168 townhouses in 14 buildings, with the units priced below $90,000. One building was constructed, with four of the 12 units sold. The condos have sold for prices ranging from $186,700 to $219,770, the Times said.

Fourth leader nominated for CUNA Board

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MADISON, Wis. (9/30/09)--The Credit Union National Association (CUNA) has received another nomination for its 2009-2010 board elections. The fourth nominee and district category is Dennis E. Pierce, CommunityAmerica CU, Kansas City, Mo., District 4, Class C. Already nominated are:
* John A. Graham, Kentucky Employees CU, Frankfort, Ky., District 2, Class A; * Marla S. Marsh, Kansas Credit Union Association, Wichita, Kan., District 5, Class D; and * Susan Steifel, Woodstone CU, Federal Way, Wash., District 6, Class A.
The deadline for nominations is Oct. 16. Nominations are being accepted in eight categories:
* District 1, Class C; * District 2, Class A; * District 3, Class B; * District 4, Class C; * District 5, Classes B and D; and * District 6, Classes A and D.
Eligible candidates must be an employee or voting board member of the nominating credit union. Nominations must be in writing and seconded in writing by two other credit unions of the same size group from the district. Only two seconds will be recorded for each candidate. Upon request, a list of credit unions by size group and district will be furnished to candidates to assist in obtaining seconds. To be an eligible league candidate for a CUNA Director position, individuals must be a league president and be nominated in writing by their league, with a second in writing by at least one other league from the district. CUNA’s Corporate Governance Committee will verify eligibility of each candidate, the credit union's affiliation, size group and district, and date/time of receipt. Voting will begin Oct. 23 and close Dec. 18. For more information, use the link.

National CU Foundation seeks nominations for board

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MADISON, Wis. (9/30/09)–The National Credit Union Foundation (NCUF) is seeking nominations for two board seats: Credit Union Executive or Director, and System Affiliate. For the executive or director seat, each candidate must be an executive officer or director of a credit union serving consumers. The incumbent for the seat is Mark Twisdale, senior vice president of human resources for State Employees’ CU in Raleigh, N.C. Twisdale is completing his first three-year term on the NCUF Board. Volunteers can serve up to three three-year terms on the board as long as they are re-nominated by the NCUF Governance and Nominations Committee and re-elected by the NCUF board. For the system affiliate seat, each candidate must be an executive officer or director of a national organization that meets all these criteria:
* The organization’s primary purpose is to support credit unions or some element of the credit union movement; * A significant portion of the organization’s ownership or membership comes from the credit union system, and; * The organization has demonstrated a commitment to the purposes of the foundation. NCUF’s mission is to “promote and improve consumers’ financial independence through credit unions.”
The current incumbent in the system affiliate seat is not eligible for re-election. Francois Henriquez, just appointed interim CEO of U.S. Central FCU in Lenexa, Kan., is serving the final year of his third three-year term on the NCUF board. To apply for either seat, use the resource link and click “Volunteer for our Board.” Applications must be received by Nov. 20. The board will vote on the nominees in December. In January, NCUF board members will elect four officers at their organizational meeting. The 13 voting seats on the NCUF board include representatives of seven consumer credit unions, two national organizations serving credit unions, one corporate credit union, one state credit union foundation, one state credit union league and one at-large seat.

500 attend Iowa CU convention

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DES MOINES, Iowa (9/30/09)--More than 500 credit union representatives and vendors attended the Iowa Credit Union Annual Convention held Sept. 23-25 in Des Moines, according to the Iowa Credit Union League (ICUL). Thursday’s opening keynote presenter Bill Hampel, senior vice president of research and policy analysis and chief economist for the Credit Union National Association, offered a perspective on the economic challenges facing the credit union industry. “Credit unions are collateral damage to the financial crisis and recession,” Hampel said. He pointed out that Iowa credit unions are faring far better than credit unions nationwide by maintaining lower delinquency rates and higher savings rates. Other educational sessions focused on compliance issues, social media, Hispanic outreach, share insurance and compensation. “As the financial environment evolves in Iowa, credit unions will continue modifying their services to help the next generation of working Iowans,” said Patrick S. Jury, league president/CEO. “The league and Iowa’s credit unions work together to ensure our industry remains vital and healthy for the benefit of all Iowans.” The league also honored three Iowa credit union representatives for their contributions to the industry. Kent Strawn, president/manager of First Class CU, West Des Moines, received the 2009 Heritage Award for lifetime achievement within the credit union industry. Strawn has been active in the credit union movement for more than 33 years. Prior to serving as president/manager of First Class CU, Strawn served as director of Central Iowa Chapter of Credit Unions, as past-president, and current chairman of ICUL’s Transfer System, and was the chairman of ICUL’s board of directors. Denny Skelton, senior vice president of strategic alliances for Veridian CU, Waterloo, received the 2009 Professional Cooperative Spirit Award. Skelton has worked in the credit union industry for more than 30 years. Iowa State Rep. (D-83) and Veridian CU board member Bob Kressig received the 2009 Volunteer Cooperative Spirit Award. This award recognizes an individual who has exceeded expectations of a credit union leader and who provides outstanding service, commitment and volunteer efforts to improve the Iowa credit union movement. A few of Kressig’s involvements include leading the legislative financial services sub-committee, the credit union’s policy/education committee and the strategic planning committee. The 2010 Iowa Credit Union Convention will be held Sept. 22-24 in Bettendorf.

CUNA to IMSNI CU secured loan can build credit

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MADISON, Wis. (9/30/09)--Obtaining a secured loan from a credit union is a good way to improve a person’s credit history without using credit cards, the Credit Union National Association (CUNA) told MSN Money Tuesday. Susan Tiffany, CUNA director of consumer publications, told Liz Pulliam Weston in a column titled “Build Credit Without Credit Cards” that a secured loan from a credit union--often called a “share-secured loan”--may be easier to get than bank loans. This is because credit unions usually are willing to look beyond credit scores when lending, Tiffany added. “[Credit unions] don't treat credit scores as the only source of information about you,” Tiffany told the publication. “They're looking for ways to say yes. Are you responsible with your checking account? Are you demonstrating that you're trying to be a regular saver? Those behaviors can help.” The article includes seven tips and four traps to avoid when trying to build a good credit history. It also links to CUNA’s website and its credit union locator to help readers locate a credit union. For the full article, use the link.

CU System briefs (09/28/2009)

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* MECHANICSBURG, Pa. and WASHINGTON (9/29/09)--Two scams have been reported involving targeted credit unions. Members 1st FCU, Mechanicsburg, Pa., is warning about a texting scam that says the credit union has blocked recipients' credit cards. The message instructs recipients to call a number and "unblock" their card by entering their card number and other information (WPMT-TV Sept. 27). Also, the American Bankers Association (ABA) is alerting consumers that cash prize letters claiming to be from ABA are a fake-check scam. The fake checks for amounts ranging from $1,000 to $5,000 are listed as being from ABD FCU, Warren, Mich., but ABA says it believes other financial institutions may be targeted (The Daily News Sept. 26) … * ROCKVILLE, Md. (9/29/09)--During October, MCT FCU will conduct a video contest for elementary, middle or high school students in Montgomery County, Md., to stress saving. Students submit short (less than two minutes) videos that answer the question, "Why do you need to save money?" Deadline for video entries is Oct. 30 at 5 p.m. ET. MCT FCU will select winners for each type of school. Each winner will receive $500 and designated $250 of the winnings for a favorite school organization. Winning videos will be posted on MCT's website. Videos will be judged on creativity and originality, overall impact to inspire individuals to save, and message clarity and relevance to the topic … * DUBLIN, Ohio (9/29/09)--Ohio HealthCare FCU is offering Mobile Banking so members can access their accounts via their cell phone as part of its enhanced online banking package, CU@Home. Features added include account to account transfers between financial institutions; automated transfers between two accounts at the credit union; account alerts and enhanced security. Its new PayBills@Home online bill-pay service now offers eBills, automated payments and expedited payments. This fall, the Dublin, Ohio-based credit union also will roll out its DeposZip service to allow select members to make deposits to their accounts from their home … * RALEIGH, N.C. (9/29/09)--Allegacy FCU, based in Winston-Salem, N.C. will open a student-operated credit union Monday at R.B. Glenn High School, Kernersville, N.C. The partnership aims to give students experience in personal finance so they can make educated decisions about money. Sen. Kay Hagan (D-N.C.), whose first piece of legislation in Congress would provide states with incentives to expand financial literacy education, will attend the opening (Associated Press Newswires Sept. 28) … * GARLAND, Texas (9/29/09)--Sometimes the early bird doesn't get the worm. Case in point: a masked man with a gun tried to hold up America's CU branch in Spanaway, Texas, Friday. But he arrived before the credit union opened for business. When an employee at the $1144.2 million asset credit union refused to let him inside, then ran and hid in the back of the credit union, he left empty handed. The incident was reported at about 8:15 a.m. Friday (The News Tribune Sept. 26) …

Combined CUNA WOCCU conference to double the impact

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MADISON, Wis. and WASHINGTON (9/29/09)--The 1 Credit Union Conference--next year's combination of America's Credit Union Conference and Expo with the World Credit Union Conference--will provide a concentrated use of resources to help credit unions nationwide and worldwide with strategies for the challenges they face. The 1 Credit Union Conference--one of the industry's largest conferences--is slated for July 11-14 in Las Vegas at the MGM Grand Hotel on the Las Vegas Strip. Its theme: One world, one event. Its sponsors: the Credit Union National Association (CUNA) and the World Credit Union Council (WOCCU). CUNA expects more than 2,500 attendees from 60 countries at the global event. By budgeting now, attendees can take advantage of various discounts on early bird registration discounts before May 20, 2010. Also, special discounts are available for attendees from small credit unions under $35 million in assets, from developing countries, from the younger-than-35 set, and more. The single professional development investment in attending will yield greater benefits, according to CUNA President/CEO Dan Mica. He noted that challenging times have meant that education and development dollars "need to bring a greater return than they ever have in the past. Our combined conference provides the best and most economical opportunity we can offer for all of us to find the resources we need to help our credit unions survive and thrive. The combination is unprecedented. It also marks the first time the World Credit Union Conference has met in the U.S. in more than a decade, said Pete Crear, WOCCU president/CEO. For more information or to register, use the link.

Pa. Commonwealth Court rules in favor of CUs

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HARRISBURG, Pa. (9/29/09)--The Commonwealth Court of Pennsylvania Monday overwhelmingly affirmed the state Department of Banking's procedures and decision to grant two credit unions--TruMark Financial CU and Freedom CU--expansions of their fields of membership (FOM) to community charters. The case began in 2003 when both credit unions received community charters to serve members in five counties in the Philadelphia metropolitan area. Banks and their state trade association intervened and a series of hearings before the department and court cases made their way through the state court system. The current case was remanded from the Supreme Court. The central concern of this case was the definition of a "well-defined local community" in determining whether the credit unions could expand. The banks claimed the banking department's decision was not supported by substantial evidence and denied them due process by limiting their access to only documents voluntarily disclosed by the credit unions. The court was not persuaded by any of the banks' arguments. Instead, Judge Robert Simpson cited the federal parity provision found in the state law that "allows a state-chartered credit union to create, amend or expand its field of membership as authorized by Section 109 of the Federal Credit Union Act, 'subject to reasonable conditions, limitations and restrictions as may be imposed by the department including, but not limited to, conditions, limitations and restrictions based on safety and soundness.'" "We reject banks' contention that this statutory language was meant to limit the department's discretion in dealing with community membership conversions. To the contrary, the plain language of the federal parity provision preserves for the department discretion to impose its own reasonable conditions, limitations and restrictions," wrote Judge Simpson. Neither the federal regulation nor NCUA Manual provides a clear method to assess integration and shared community interests in determining the community, said the decision. The term "local" is "not as narrowly interpreted as banks would like. The federal regulation…specifically provides that charters consisting of 'multiple counties or local areas with populations of any size' may meet the community requirements… In view of the expansive language of the federal regulation, we cannot state that the department's broad application is prohibited," said the decision. The court noted that "a reasonable mind could conclude based on the evidence presented that the proposed community is a well-defined local community for purposes of credit union field of membership. Therefore, we must reject banks' assertions that substantial evidence does not support the department's orders approving credit unions' conversion notices." One argument made by banks was that the department failed to undertake an analysis of the tax consequences of the credit unions' expansion. The court found "no indication that the General Assembly harbored an unexpressed intention that the department undertake a tax analysis," and said "an implied duty of tax analysis is inconsistent with the department's express duty to act on matters within the narrow 60-day time period provided in the Credit Union Code…We presume the General Assembly did not intend such an unreasonable result." The banking department "did not deny banks due process," said Simpson, citing credit unions' voluntary disclosure to banks of information about whether the five-county area was a "well-defined local community." "After notice, there was a full hearing on this issue… Thus, the issue of well-defined local community was robustly litigated here, and all parties received all process due on that issue." The court noted the "current controversy between banks and credit unions arises from the federal parity provision. Therefore, it is helpful to keep in mind the process available where a federal-chartered credit union seeks to convert its membership field. Usually there is no disclosure of confidential credit union information, even where there is a Freedom of Information Act request." He noted "our conclusions regarding the process due in proceedings before the department may therefore be compared to process due before the NCUA." The court also rejected banks argument that their right to intervene based on public interest extends beyond safety and soundness to an inquiry of all requirements for community charter conversions in the NCUA Manual. The "language of the Credit Union Code does not support such a broad reading…" and "in the absence of clear direction from our Supreme Court or from the General Assembly, we are reluctant to allow the unelected administrators of the NCUA to redefine the 'public interest' which triggers due process protections in proceedings before the department." Banks also "did not prove that the community-based credit unions will have an unfair competitive advantage or that they will lose customers to credit unions." Banks had a chance to prove harm in the original jurisdiction part of the case but discontinued the alternate proceedings. Judge Simpson noted that the procedures in the case included "additional safeguards which reduce any risk of erroneous deprivation of the public interest." The safeguards included a full hearing on "well-defined local community," which addressed the General Assembly's "basic requirement of a common bond for all credit unions," and the department's receipt of evidence from banks as to the safety and soundness of credit unions' proposed conversions. Unless the banks appeal this decision to the Pennsylvania Supreme Court, all of the field of membership cases brought by the banks against the Department of Banking will have ended in a final disposition and/or been dismissed.

Bridge account eases from savings to investing

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RALEIGH, N.C. (9/29/09)--State Employees’ CU (SECU) Bridge account, introduced in 2007, is helping transition savers into investors, says the credit union. The account provides an avenue for saving without the risk of loss associated with the stock market by offering the security of National Credit Union Administration insurance. With earnings tied to the quarterly change in the Standard & Poor’s (S&P) 500 Index, the account can earn as much as 3% per quarter and did so for the second quarter of 2009. With only one week left in the third quarter, it is likely that maximum earnings also will be paid for this quarter, SECU said. More than 4,500 members of the $16.7 billion asset, Raleigh, N.C.-based credit union have Bridge accounts with assets totaling more than $3.5 million. Accountholders are working toward accumulating funds needed to open investment accounts at SECU, which have grown in recent months, SECU said. Bridge accounts can be opened with a minimum of $25 and will accept deposits up to $3,000. If market returns are positive during a quarter, dividends will be paid up to the maximum rate of 3% --or a 12% annual percentage rate/12.55% annual percentage yield. If market returns are negative, no dividends will be declared for that quarter, but there also will be no loss, SECU said. “The SECU Bridge account is an excellent no-risk tool to help members establish the savings needed to ultimately become investors,” said Joan McCool, SECU senior vice president of individual retirement account and investment services.

Two Hawaii CUs receive CDFI Native American grants

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WASHINGTON (9/29/09)--Two federal credit unions were among the 10 awardees receiving $4.4 million from the Department of the Treasury’s Native American Community Development Financial Institutions (CDFI) Assistance (NACA) Program. First Hawaiian Homes FCU, Hoolehua, Hawaii, was awarded $225,000, and Molokai Community FCU, Kaunakakai, received $470,000, according to the NACA website. Neither credit union has received official notification of the awards, and therefore are declining comment at this time, a spokeswoman for First Hawaiian Homes FCU, told News Now Monday. The CDFI Fund’s Native Initiatives work to increase access to credit, capital and financial services in communities by creating and expanding CDFIs primarily serving Native communities. This is achieved through two initiatives:
* A funding program--the NACA program--targeted to increasing the number and capacity of existing or new Native CDFIs; and * A complementary series of training programs, called “Expanding Native Opportunities,” that seeks to foster the development of new Native CDFIs, strengthen the operational capacity of existing Native CDFIs, and guide Native CDFIs in the creation of important financial education and asset building programs for their communities.
The Treasury’s CDFI Fund announced the awards are being made with fiscal year 2009 appropriated dollars. The awardees are in eight states--Alaska, Arizona, Hawaii, New Mexico, North Carolina, Oklahoma, South Dakota and Wisconsin. “The growth in Native CDFIs is a remarkable accomplishment and their increasing reach and impact within the Native communities they serve have been tremendous,” said CDFI Fund Director Donna J. Gambrell. “We are committed to working with Native CDFIs to increase economic opportunities and bring all Native communities into the nation’s economic mainstream,” she added. “I am confident that the CDFI Fund’s new five-year Native Initiatives Strategic Plan, which lays out our long-term, comprehensive strategy to overcoming the barriers to capital in Native communities, will greatly advance these commitments.”

CDFI application help session scheduled

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WASHINGTON (9/29/09)--The U.S. Treasury Department’s Community Development Financial Institutions (CDFI) Fund is offering a webinar workshop Wednesday to assist with applications for the 2010 round of the CDFI program. The webinar is intended for all CDFIs interested in applying for Financial Assistance (FA) or Technical Assistance (TA) grants. CDFI staff will discuss the application process and will be available to answer questions during the 2 p.m. (EDT) webinar. The Treasury's CDFI Fund helps locally based financial institutions offer small business, consumer and home loans in communities and populations that lack access to affordable credit, and credit unions are eligible for certification. The Fund recently announced that it will make a total of $113 million in funding available through the upcoming year. That funding round, marking the CDFI’s fifteenth year, is the largest-ever annually appropriated funding round. Last week, National Credit Union Administration Chairman Deborah Matz encouraged credit unions to use the CDFI program as a means to "expand service to low-income consumers." “Consumers across the income spectrum benefit when credit union service is made more accessible, and CDFI has been a reliable partner for many credit unions in making this a reality," Matz added. The CDFI will post an archived version of the webinar on its website. To register, use the link.

D.C. area CUs post stellar earnings says journal

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WASHINGTON (9/29/09)--Credit unions in the Washington, D.C., area posted “stellar” earnings in the second quarter, mostly due to substantial refunds from the federal government, the Washington Business Journal said Friday. Local credit unions’ median net income shot up 860% from a year ago to $155,728--and up from a first-quarter loss of $100,637. Also, median assets at credit unions went up 49% from a year ago to $46.2 million, leading to 20% growth in median loan portfolios from year ago to $25.2 million, according to a Journal analysis of second-quarter data from the National Credit Union Administration. The refunds came about after federal regulators changed the way credit unions would be charged to replenish the National Credit Union Shared Insurance Fund, the Journal said. Originally, credit unions were required to pay the entire expense in one year, but new legislation allows them to spread out payments over seven years. As a result of the change, credit unions that had paid most or all of the stabilization expense in one year, received a substantial portion of that money back through refunds in the second quarter, said the Journal. The refunds helped 83% of the 128 locally based credit unions move into profitability for the second quarter--a marked improvement from the first quarter when only 24% posted a profit. That indicates credit unions are doing the right thing and continuing to lend during the credit crunch, Mike Beall, CEO of the Maryland and District of Columbia Credit Union Association, told the Journal.

Three nominations in for CUNA Board

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MADISON, Wis. (9/29/09)--The Credit Union National Association (CUNA) has received three nominations for its 2009-2010 board elections. All are current incumbents. Nominees and their district categories are:
* John A. Graham, Kentucky Employees CU, Frankfort, Ky., District 2, Class A; * Marla S. Marsh, Kansas Credit Union Association, Wichita, Kan., District 5, Class D; and * Susan Steifel, Woodstone CU, Federal Way, Wash., District 6, Class A.
Deadline for nominations is Oct. 16. Nominations are being accepted in eight categories:
* District 1, Class C; * District 2, Class A; * District 3, Class B; * District 4, Class C; * District 5, Classes B and D; and * District 6, Classes A and D.
Eligible candidates must be an employee or voting board member of the nominating credit union. Nominations must be in writing and seconded in writing by two other credit unions of the same size group from the district. Only two seconds will be recorded for each candidate. Upon request, a list of credit unions by size group and district will be furnished to candidates to assist in obtaining seconds. To be an eligible league candidate for a CUNA Director position, individuals must be a league president and be nominated in writing by their league, with a second in writing by at least one other league from the district. CUNA's Corporate Governance Committee will verify eligibility of each candidate, the credit union's affiliation, size group and district, and date/time of receipt. Voting will begin Oct. 23 and close on Dec. 18. For more information, use the link.

CU System briefs (09/25/2009)

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* MONTPELIER, Vt. (9/28/09)--Steven D. Post, CEO of Vermont State Employees CU (VSECU), a $472 million asset, Montpelier, Vt.-based credit union, was profiled in the September issue of Vermont Business People magazine. When Post replaced retiring General Manager Clyde Coffrin Jr. in the early 1990s, the credit union had roughly $80 million in assets, 20 employees and about 16,000 members. Today VSECU has 45,000 members and employs more than 130 people. “The purpose of the credit union is to have it run for the benefit of its members, not for stockholders or making profits,” said Joe Bergeron, president of the Association of Vermont Credit Unions, who also was interviewed. “[Post] just naturally has that in front of his mind at all times” … * DURHAM (9/28/09)--Latino Community CU, Durham, N.C., has launched its first annual essay writing and photo contest that emphasizes savings. The contest is offered in three age categories: 13-14, 15-16, and 17-18 (HeraldSun.com Sept. 16). The credit union will award $1,000 to first place winners, $500 to second place winners and $250 to third place winners. The money, made possible through a grant from the National Credit Union Foundation, will be given to winners in 24-month share certificates. Submitted photos and essays will be displayed in the credit union’s branches and published online. Latino Community CU said it hopes the contests will raise awareness about the importance of building wealth. The credit union has $75 million in assets ... * VANCOUVER, B.C. (9/28/09)--The merger of two Canadian credit unions will result in the third largest credit union in British Columbia (Vancouver Sun Sept. 23). Envision Financial and Valley First CU announced the members approved the merger. The combined credit union--which will have $5.6 billion in assets, 167,000 members and 1,250 employees--will be known as First West CU. The merger will take effect Jan. 1. Evision President/CEO Gord Huston will be First West's CEO during the transition, while Valley First President/CEO Harley Biddlecomb has been appointed special adviser … * PORTLAND, Ore. (9/28/09)--A paroled credit union robber was sentenced in a federal court Wednesday to 115 months (more than nine years) in prison for a string of credit union robberies in Eugene, Ore., and the Portland area. Marc Timothy Rzegocki also was sentenced to three years of supervised release and ordered to pay $23,124 in restitution to the credit unions (Targeted News Service Sept. 23). When the eight robberies at six credit unions occurred between June 27, 2007 and Aug. 20, 2007, he was out on parole from a sentence related to two unarmed robberies stemming from nine credit union robberies in 1986. The new sentence will run concurrently with a parole revocation sentence on the earlier charges …

Corporate Uncertainty sharpens rationale for ALM

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DALLAS (9/28/09)--Rampant change is reason enough for credit unions to renew their interest in managing liquidity and interest rate risks, says Southwest Corporate. It lists five reasons a sound asset/liability management (ALM) process makes sense in today's economy:
* ALM is valuable for more than just compliance reasons. Credit unions historically use ALM to assess balance sheet risk, but many haven't incorporated overall risk exposure into their strategic decision-making. They need to begin evaluating the results of their risk analysis as it relates to the credit union's long-term strategies and goals so they can be adept at adjusting near-term decisions, said the corporate. Information gleaned from ALM reports enable credit unions to manage interest-rate risk, assists in strategic planning and budgeting, and helps credit unions respond to member deposit behaviors, said Mark DeBree, Southwest Corporate Investment Services' manager of ALM analysis, in an article on the corporate's website. * Credit union balance sheets are becoming more complex as mortgage portfolios grow. Credit unions are making fewer vehicle loans and more mortgage loans. In 2008, mortgage loans represented 38% of credit unions' total loan portfolio, a 6% increase from 2005. Vehicle loans for 2008 totaled 21%, or 4% less than in 2005. The growth in mortgages brings concerns about their longer average lives and durations, said DeBree. The average life of a vehicle loan is 2 1/2 years, he said. Mortgages also are more exposed to extension and contraction risk because of the embedded prepayment option. And hybrid mortgages have added complexity to the portfolio. * Regulators are pressuring financial institutions to understand and accurately measure interest-rate risk. The National Credit Union Administration has expanded the ALM portion of the exam and contends that credit unions familiar with their tools and the information those tools can provide are better prepared when adjustments are called for from economic events, said Southwest Corporate. * Uncertainty prevails in the market. Interest rates are near historically low levels and the inflation outlook isn't clear. Mortgage delinquencies and foreclosures are rising, and financial institutions are finding it difficult to operate profitably. DeBree noted that given the Federal Reserve's actions Wednesday--plus the addition of a second stimulus package and possible extension of homebuyers' assistance to all homebuyers, "it is not likely we are headed toward a recovery any time soon." Addressing risks embedded in credit union balance sheets is more critical than ever, said the corporate. * The potential for rising interest rates is high. An economy in recovery means interest rates likely will rise. With stimulus spending and restructuring of consumer and corporate balance sheets, the recovery will see rapidly increasing interest rates. "A quick rise in rates can be tough on financial institutions," said DeBree. "Upward pressure on cost of funds eats into the already narrow net interest margin that has resulted from the fixed-rate loans on the books at recent low rates."
For more detail, use the link to Southwest Corporate's website.

Nine named to WOCCU International Exec Volunteer Corps

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MADISON, Wis. (9/28/09)--World Council of Credit Unions (WOCCU) has welcomed nine credit union professionals to its International Executive Volunteer Corps. (IEVC). Established in 1995, the corps recognizes inductees for their years of international service to WOCCU. The 2009 inductees are:
* Mike Delker, vice president of credit union relations, the Texas Credit Union League; * Pat Drennan, president/CEO, 1st Gateway CU, Camanche, Iowa; * Patrick Jury, president/CEO, Iowa Credit Union League (ICUL); * Mike Lanotte, senior vice president of association services, Credit Union Association of New York; * Luis Lopez, executive president, Cooperativa Abraham Rosa, Puerto Rico; * Sue Mitchell, CEO, Mitchell, Stankovic & Associates, Boulder City, Nev.; * Murray Williams, chief operating officer, ICUL; * Vicki Williams, senior executive vice president and chief operating officer, League of Southeastern Credit Unions (formerly Alabama Credit Union League); and * Gary Wolter, retired president/CEO of the former Alabama league.
"These are individuals who have repeatedly given their time and expertise to credit unions around the world," said Brian Branch, WOCCU executive vice president and chief executive officer. "Their volunteer work enables us to reach out to many more credit unions than we can by ourselves." IEVC members and other volunteers contribute valuable technical assistance and credit union industry know-how, bolstering WOCCU's efforts in developing countries. Participants also gain international development experience through volunteer service to the global credit union movement. "Credit unions derive their strength from volunteer efforts," said Pete Crear, WOCCU president/CEO. "Thanks to the generosity of this year's inductees and those who have come before, we've been able to tap into this vital energy and commitment on behalf of credit unions worldwide." Past inductees into the four-year-old program include: Pat Bodnar, Arizona Credit Union League; Carlos Calderón, OAS Staff FCU; Kathy Chartier, Members CU; David Chatfield, formerly of the California and Nevada Credit Union Leagues (CCUL); Anne Cochran, Louisiana Credit Union League; Letty Cordon-Hernandez, formerly with CCUL; Richard Ensweiler, Texas Credit Union League (TCUL); John Florian, Ohio Credit Union League; Mary Martha Fortney, National Association of State Credit Union Supervisors (NASCUS); Dana Hofmann-Geye, formerly with the Minnesota Credit Union Network; David Low, OSU FCU; Kurt Lykins, Corporate One FCU; Rick Myxter, Pennsylvania Credit Union League; Barbara Pogue, NASCUS; Bill Raker, US FCU; Kasey Rockwell, Credit Union Association of Oregon; Marcus Schaefer, Truliant FCU; Sarah Turner, Maryland and District of Columbia Credit Union Association; and Linda Webb-Mañon, TCUL.

Scammed Spammed Stung webinar set for Oct. 21

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MADISON, Wis. (9/28/09)--As part of National Protect Your Identity Week (PYIW) Oct. 17-24, the Credit Union National Association (CUNA) will offer a webinar aimed at helping credit unions protect themselves and their members from identity theft fraud. The webinar, Scammed, Spammed and Stung: Protect Your Credit Union and Your Members from ID Theft Fraud, is scheduled for Wednesday, Oct. 21, at 1-2:30 p.m. CDT (2-3:30 p.m. EDT, 12-1:30 p.m. MDT, and 11 a.m.-12:30 p.m. PDT). The webinar is sponsored by CUNA Strategic Services, CUNA, and three strategic alliance partners. Speakers will include:
* Kevin Prince, chief technology officers, Perimeter eSecurity; * Lynn Scheck, senior vice president of business development for Intersections, an identity theft prevention services; * Jamie King, president and co-founder of Verafin, a software company specializing in money laundering and fraud detection solutions; and * Janet Garkey, manager of group education at CUNA's Center for Personal Finance.
According to the National Foundation for Credit Counseling (NFCC), a sponsor of the PYIW, 45% of U.S. adults--roughly 101 million people--feel at most risk for identity theft when they make a purchase with a credit card that requires the card to be temporarily taken out of their sight. Only 21% of consumers said they were concerned about falling victim to ID theft when using their card in person. In 2007, roughly 8.4 million Americans reported ID theft. In 2008, the number increased 19% to 10 million victims, said Susan C. Keating, president/CEO of NFCC. Joining NFCC as full sponsor of PYIW is the Council of Better Business Bureaus. CUNA is one of the supporting PYIW coalition members. The webinar costs $99. For more information, use the link.

Environment a focus for N.C. CUs

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GREENSBORO, N.C. (9/28/09)--Two North Carolina credit unions are partaking in green initiatives to help the environment. State Employees’ Credit Union (SECU), a $16.7 billion asset credit union based in Raleigh, has recently expanded its “green” program offerings to include a Green Second Mortgage. The new loan product is designed for energy efficient improvements such as replacement windows, heating/air conditioning systems, insulation, solar water systems and Energy Star appliances. As much as $50,000 may be financed for up to 10 years with at least 75% of the proceeds used for energy efficient improvements. “SECU encourages its membership to seek energy efficient home improvements in order to cut costs and save on their utility bills,” said Phil Greer, SECU senior vice president of loan administration. “There are also some federal and state tax credits and utility company rebates to assist homeowners who make energy efficient home improvements, and we recommend that our members take advantage of those as well.” Self Help CU, a $349.3 million asset, Durham-based credit union, said it is offering an Environmental Term Certificate (CD) to environmentally conscious members (Weekly Update Sept. 25). The CD has several maturity terms and gives members a return on their investment while supporting the credit union’s Environmental Stewardship initiative. For more information, use the link. Through the initiative, Self Help was able to provide a loan to Piedmont Biofuels in Pittsboro so it could purchase a truck for collecting grease from area restaurants. The loan allowed Piedmont to begin collecting more grease instead of buying other forms of raw materials for fuel production on the open commodities market. As a result, the company can deliver fuel to its members more inexpensively. For more information, use the link.

One dead three arrested after CU robbery

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TAMPA, Fla. (9/28/09)--Three robbery suspects were apprehended by police and one person was found dead, an apparent suicide, in the aftermath of a Thursday robbery of Grow Financial CU, in Tampa, Fla. Officers surrounded a Tampa home looking for suspects after receiving a tip that the suspects were driving a Chevrolet Yukon and following the car to a Tampa home (abcactionnews.com Sept. 25) . Once at the home, police caught one man who ran down the street, while two others ran into the house. The two suspects turned themselves in when a SWAT team arrived. A third man fired several shots at officers during a standoff. The standoff ended when members of the police tactical response team broke into the house after firing tear gas inside. The third man was found dead by police. He took his own life, according to the medical examiner. He had a bullet wound to his head (St. Petersburg Times Sept. 24). The 12:24 p.m. robbery prompted lockdowns at area schools while police searched for the robbers. The incident may be related to a string of robberies by perpetrators who have worn strange disguises--most notably sticking up a pawn shop while wearing beauty shop sinks over their heads, police said.

ATM skimmers steal funds from 90 people

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SAN BERNANDINO, Calif. (9/28/09)--ATM card skimming schemes have compromised accounts at Alaska USA FCU and Arrowhead FCU in California and an area bank. Police in San Bernardino County, Calif., where the credit union branches are located, suspect that members’ accounts have been affected from fraudulent use of ATM cards. At least 90 people in the High Desert area have been affected (San Bernardino Sun Sept. 24). Authorities have noticed a spike in thefts in Apple Valley, Hesperia and Victorville, Calif., the newspaper said. Card skimming occurs when a thief places a device on the outside of an ATM. The device captures information from a card’s magnetic stripe when swiped. The skimmers also use video cameras to watch accountholders enter their personal identification numbers. The newspaper provided several tips to prevent fraud:
* Inspect ATMs for unusual devices; * Cover the hand used to enter a personal identification number; and * Check account balances frequently.

Blanchard named to 2010 Coop Hall of Fame

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WASHINGTON (9/28/09)--Credit union pioneer Larry Blanchard was selected for spring induction into the Cooperative Hall of Fame, the Cooperative Development Foundation announced. He will be recognized at the annual Hall of Fame Dinner and Induction Ceremony at Washington’s National Press Club May 5. Blanchard’s nomination was recommended by the Credit Union National Association (CUNA) Cooperative Alliances Committee with the approval of the CUNA board. He was head of communications in CUNA’s Washington, D.C., office during the late 1980s and early 1990s before going to CUNA Mutual Group. Blanchard retired from CUNA Mutual in December 2008 as senior vice president for special projects. He now serves as a consultant for corporate and legislative affairs at CUNA Mutual. Blanchard was a shaper of today’s credit union landscape, the foundation said. He was an employee and organizer of credit unions who worked for every major credit union organization in the U.S. Blanchard also was a credit union development educator who helped guide the evolution of the Campus Credit Union Council. Blanchard was a leader of Operation Grassroots--an effort to maintain regulatory independence for credit unions. He was one of four people selected. The others are Glenn English (rural utilities), Werqu Mekasha (agriculture) and David Thompson (general).

Indiana awards note service fin lit philosophy

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INDIANAPOLIS (9/28/09)--The Indiana Credit Union League honored credit unions for achievements in community service, credit union philosophy in action, and excellence in youth financial literacy with awards named after credit union pioneers in each area. First place Dora Maxwell Awards for social responsibility and community service, by asset category, went to:
* Great Horizons FCU, Hammond, less than $5 million assets; * Evansville (Ind.) FCU, $20 million-$50 million in assets; * First Trust CU, Michigan City, $50 million-$100 million; * Industrial FCU, Lafayette, $100 million to $200 million; * Finance Center FCU, Indianapolis, $200 million to $500 million; and * Centra CU, Columbus, more than $500 million.
Winners of first place Louise Herring Awards for philosophy in action were:
* Partners 1st FCU, Fort Wayne, $50 million to $250 million assets category; and * Centra CU, more than $250 million assets.
First place winner of the Alphonse Desjardins Award recognizing excellence in youth financial literacy efforts was Finance Center FCU, Indianapolis. The state-level winners will proceed on to the national awards competition coordinated by the Credit Union National Association.

California league to honor six CU leaders

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RANCHO CUCAMONGA, Calif. (9/28/09)--The California Credit Union League will honor six credit union leaders at this year’s California
and Nevada Credit Union Leagues’ Annual Meeting and Convention Nov. 16-18 in Las Vegas. Recipients will be presented with distinguished service awards, volunteer awards and Tomorrow’s Star Awards--which are given to credit union professionals under the age of 35. Judith A. McCartney will receive the 2009 Leo H. Shapiro Lifetime Achievement Award. The award is the league’s highest honor and is named after the father of the California credit union movement and founder of the league. McCartney, a retired CEO from Orange County’s CU, Santa Ana, has worked in the credit union movement since the late 1960s when she became CEO of a small credit union in Alaska. She is involved with the World Council of Credit Unions and has served on the California league’s board of directors. Other recipients include:
* Mary Cunningham, CEO, USA FCU, San Diego, Distinguished Service Award; * Marshall Holloway, board chairman, Desert Valleys FCU, Ridgecrest, Outstanding Volunteer Award; * Phillip A. Meserve, SAFE CU, board vice chairman, North Highlands, Outstanding Volunteer Award; * Erin Hodson, Kern Schools FCU, Bakersfield, branch manager, Tomorrow’s Star Award; and * Wendy Zanotelli, UNCLE CU, Livermore, chief operating officer, Tomorrow’s Star Award.
The Distinguished Service Award honors leaders who have provided service to the credit union community outside the usual scope of employment. Cunningham has served as a board chairman of Western CUNA Management School, the National Credit Union Foundation, the Richard Myles Johnson Foundation and the Credit Union National Association.

Consumers revolt online against bank fee hikes

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NEW YORK (9/25/09)--Consumers have gone online before to voice complaints about banks fees and rates and service. But one debtor took her complaint to new heights via the viral route to voice her displeasure when Bank of America raised her interest rate. And she got results. The "debtors' revolt" on a YouTube video by Ann Minch was viewed more than a quarter million times and resulted in Bank of America calling her to reduce her interest rate, said CBS News with Katie Couric (Sept. 23). The bank had raised her credit card interest rate to 30% from 13%. "I could get a better rate from a loan shark," she said in the video. She offered an ultimatum: Lower the rate or she won't pay. "Stick that in your bailout pipe and smoke it," she said. Thousands of people who saw the video responded, complaining about their own banks. Minch claimed a small victory for the debtor's revolt movement.

IWSJI item on GMAC notes CUs market gain

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NEW YORK (9/25/09)--A Wall Street Journal article about General Motors Co.'s (GM) former captive finance company, GMAC, notes that credit unions have gained a significant share of the auto loan financing market. Melinda Zabritski, a director with Experian Information Solutions, told the publication that a year ago, credit unions had less than 20% of the auto finance market. Now, "thanks to financial flexibility and a relative lack of exposure to mortgage risk--credit unions have stormed past 30%," she said (The Wall Street Journal Sept. 24). The article was about GMAC using its new access to low-cost capital and the rising prominence of its Ally bank to compete more directly with banks such as Wachovia Corp. and J.P. Morgan Chase. GMAC turned itself into a bank holding company after it the federal government rescued and separated it from GM. GMAC plans to begin offering new auto-related financial programs to card dealers called the Ally Dealer Rewards program, GMAC President Bill Muir told the Journal, to help blunt the gains major banks have made into auto financing. This year Chase and Wachovia became the top providers of loans for new and used vehicles, according to Experian. Chase has 6.7% of the auto loan market, and Wachovia has 4% share, while GMAC has 3% market share. Muir said GMAC is shifting from a culture of relying heavily on making GM happy to a culture that is aggressively looking to steal market share from banks, credit unions and captive lenders of other auto makers.

Wisconsin league Banks put self-interest ahead of consumers

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PEWAUKEE, Wis. (9/25/09)--Brett Thompson, president/CEO of the Wisconsin Credit Union League, has issued a response to the Wisconsin Bankers Association (WBA) that refutes WBA’s rationale for repeated calls of unnecessary regulation, which would prove costly to Wisconsin credit unions and their members, the league said. “Not-for-profit credit unions remain steadfast about operating in the best interest of their 2.2 million member-owners and providing services that help build savings and wealth over time, regardless of financial position,” Thompson said. The WBA supports its claims with statistically flawed and misleading studies, he added. The league said WBA misapplied data that showed credit unions overwhelmingly outperform banks--in 64 of 72 areas of service delivery--constituting 89% of the service areas that were reviewed. Also, credit unions’ outperformance of banks held true for almost every demographic group and loan type over three years, Thompson said. “The WBA’s efforts to further tax and regulate credit unions demonstrate that they do not keep Wisconsin taxpayers’ best interests in mind, but instead are focused on eliminating competition and maximizing profits,” Thompson said. “Otherwise, they wouldn’t look to harm Wisconsin credit unions and their members, who save $208 million annually by saving at and borrowing from their local credit unions instead of banks.” The WBA uses unreliable data to support its position, including a report by the National Community Reinvestment Coalition (NCRC), which mistakenly assumes that credit unions are intended to serve only the poor. This concept exists nowhere in state or federal law, Thompson said. The NCRC bases its conclusions on a 2006 Government Accountability Office (GAO) study--another source WBA cites--that has been all but disavowed by the GAO itself, which concluded its data were flawed and that no conclusions about credit unions or the people they serve could be drawn from it, he added. Thompson outlined several facts:
* “State-chartered credit unions serve their members in a manner consistent with their history as financial cooperatives serving groups based on occupation, association or community, by charging lower loan rates and providing higher return on savings,” according to the National Association of State Credit Union Supervisors, 2007: NASCUS Survey of the State Credit Union System. * “Although no state enabling act establishes as a criterion for organizing state-chartered credit unions an explicit requirement that the institution serve the underserved or low- or modest-income groups, state-chartered credit unions do reach out and provide financial services to all income groups within their fields of membership, both through pricing and community outreach efforts,” said the NASCUS study. * “Despite changes over time in the law, the economy, technology, and member demographics, [credit unions] have remained faithful to their originally conceived cooperative, not-for-profit, democratic structure,” reported the National Credit Union Administration, 2006: Member Service Assessment Pilot Program: A Study of Federal Credit Union Service. * Wisconsin’s low-income mortgage borrowers’ approval rate is 74.7% at credit unions compared with 49.6% at non-credit union lenders. For minority mortgage applicants, the credit union approval rate is 72% compared with 46.6% at non-credit union lenders, according to Home Mortgage Disclosure Data for 2007. * Although credit unions have only a 10% market share for financial services in Wisconsin, they operate 40% of the financial institution branches in the state’s low-income census tracts. By contrast, 94% of Wisconsin banks--including 12 of the largest 20 banks--have no branches in low-income census tracts, report a number of sources, including the U.S. Census Bureau, Federal Financial Institutions Examination Council, Federal Deposit Insurance Corp., Wisconsin Department of Financial Institutions, and the Credit Union National Association.
“In addition to paying millions in state and local taxes each year, legitimate studies and data have shown time and again that credit unions are meeting the needs of working Americans,” Thompson said. “Essentially, what the WBA is calling for is unwarranted, unnecessary, and harmful to Wisconsin families.”

Louisiana CUs review shows growth across the board

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HARAHAN, La. (9/25/09)--Louisiana credit unions experienced across-the-board growth in assets, loans and membership in the quarter ending June 30, according to data submitted to the National Credit Union Administration (NCUA) in the Second Quarter 2009 Call Report, said the Louisiana Credit Union League. Total assets of Louisiana's credit unions increased 1.9% during the second quarter to $7.9 billion from $7.7 billion. The increase is slightly higher than the national increase of 1.5% (eNews Sept. 23). Membership growth in the state during the second quarter continued on a slow but steady pace, reaching 1,163,755 members as of June 30. That is a 1.1% increase over the first quarter, the league said. The number of potential members rose 5.9% from 9.9 million to 10.5 million. Louisiana’s credit unions reported a higher net worth ratio, lower cost of funds, and higher return on average assets as compared to national averages. The statistics are:
* Net Worth Ratio: Louisiana--12.27; National--10.04; * Cost of Funds (annualized): Louisiana--1.91; National--2.22; * Return on Average Assets (annualized): Louisiana--0.53; National--0.26.
Despite the weak national housing market, Louisiana's credit unions continue to see a steady increase in real estate lending, the league said. Louisiana’s credit unions reported $1.4 billion in total real estate loans outstanding for the second quarter, which is a 3.8% increase over the first quarter and an 11.5% more than the same period last year. Total loans rose 3.1% for the quarter and 9.2% from this time last year. Yield on loans (annualized) was higher than the national average, 7.05%, compared with 6.30% nationally. Delinquent loans to total loans was below the national average, at 1.22% for Louisiana compared with 1.59% nationally. The state’s economy has remained healthy despite the national recession, and Louisiana's credit unions are no exception, the league said.

I Hate My Car Contest is clunkers alternative

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BURNSVILLE, Minn. (9/25/09)--US FCU and a Burnsville auto dealer have teamed up with an alternative to the expired "Cash for Clunkers" program. The "I Hate My Car Contest" extends beyond replacing only cars defined by the federal government as "clunkers." Earlier this month the Burnsville, Minn.-based credit union teamed up with Jeff Belzer's Chevrolet, Dodge, Kia dealership to launch the contest, which enables car owners to vent their frustration with their current vehicle in hopes of winning a new 2009 Chevy Aveo to replace their wretched ride. So far, in the first two weeks, the contest has generated 300 rants from disgruntled car owners and 2,700 visits to the contest's official website. US FCU and Belzer's also are offering discounts and I Hate My Car removable car clings so members can publicly profess their anti-love.

CU System briefs (09/24/2009)

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* LANSING, Mich. (9/25/09)--The Kalamazoo (Mich.) Chapter of Credit Unions hosted four state legislators for a legislative breakfast Sept. 14 at First Community FCU in Parchment (Michigan Monitor Sept. 21). Roughly 27 credit union representatives met with State Sen. Patty Birkholz (shown addressing attendees) (R-Saugatuck) and State Reps. Robert Jones (D-Kalamazoo), Larry DeShazor (R-Portage) and Tonya Schuitmaker (R-Lawton). Schuitmaker made a brief appearance before her legislative assistant addressed the group. Among the topics discussed: financial exploitation legislation, term limits, the state budget, the lottery and its contribution to education, and the House Speaker's healthcare proposal (Photo provided by the Michigan Credit Union League) … * ST. PAUL, Minn. (9/25/09)--The Minnesota CU Foundation (MNCUF) launched its new website earlier this month, with a new look, new features and a more navigable organizational structure. All functions of the foundation--including grant program summaries, application forms and e-contributions--are now online. MNCUF Chair Kristi Mukomela, president of Novation CU, noted the site serves as a one-stop shop" for contributors and grant applicants. Website visitors also can explore activities of two foundation committees, Minnesota Credit Unions for Kids and the Minnesota Family Involvement Council … * GREELEY, Colo. (9/25/09)--A Colorado woman convicted of murdering an employee of the Greeley branch of Colorado State Employees CU (now Credit Union of Colorado) is seeking a hearing to claim she had ineffective counsel during the trial. Shawna Nelson filed papers to drop her appeal of the first degree murder conviction in favor of the hearing. She is serving a mandatory life sentence for the murder of Heather Garraus outside the credit union. The murder occurred after Garraus' husband ended an affair with Nelson (Fort Collins Coloradoan Sept. 23) … * OCALA, Fla. (9/25/09)--A former branch manager of the Gainesville, Fla.-based Campus USA CU has been charged with taking more than $52,000 by creating false loans on a member's account and spending the funds. Michael Aubrey Groves, 32, Citra, is being charged with criminal use of personal identification information, offenses against intellectual property to defraud and grand theft. He was fired from his job in March (Ocala.com Sept. 24). The fraud apparently occurred from June 2007 through February 2009 …

Community CU conference to focus on hard-hitting issues

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MADISON, Wis. (9/25/09)--Credit unions attending this year’s Credit Union National Association (CUNA) Community Credit Union and Growth Conference can hear from credit union experts on hard-hitting economic, legislative and regulatory issues affecting credit unions. The conference will be held in Las Vegas Oct. 21-24. It targets not only community credit unions, but all credit unions looking to grow, according to CUNA. The conference is a combination of the YES Summit, the Reach Out! Conference, and the Community Credit Union Conference. This year’s theme is “Share the vision. Shape the future.” The conference will feature several hard-hitting sessions regarding core issues facing credit unions. For example:
* Bill Hampel, CUNA chief economist, will provide an economic update and its impact on credit unions during the general session on Oct. 22. * Gigi Hyland, National Credit Union Administration (NCUA) board member, will provide an update from NCUA. She is slated to speak during the general session Oct. 23; and * CUNA’s Mary Dunn, senior vice president and deputy general counsel, and Ryan Donovan, vice president of legislative affairs, will provide attendees with a legislative and regulatory update during an afternoon general session Oct. 23.
Related breakout sessions include:
* “Handling Problem Loans in this Economy,” by Matt Davidson, consultant, and Keith Reynolds, vice president of lending, CEFCU, Peoria, Ill.; * “Mergers and Future Implications for Credit Unions,” by Frank Drake of Smith Debnam Narron Wyche Saintsing & Myers LLP; and * On The Radar: Credit Unions 2010, George Towle, The Rochdale Group.
For more information, use the link.

Indiana league honors six individuals

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INDIANAPOLIS (9/25/09)--The Indiana Credit Union League recently honored six individuals for their contributions to the credit union movement.
Ann Garmon, president/CEO of Horizon One FCU, was inducted in the Indiana Credit Union League’s Credit Union Hall of Fame Sept. 11. Pictured are Garmon (left) and league board chairman George McNichols.
Lisa Schlehuber, president/CEO of Eli Lilly FCU, received the Professional Achievement Award from Indiana Credit Union League board chairman George McNichols at the league’s state convention Sept. 11.
Vicki Garrett, vice chairman of the board at Energy Plus CU, received the 2009 Leadership Award from George McNichols, Indiana Credit Union League board chairman. (Photos provided by the Indiana Credit Union League)
All recipients were honored Sept. 11 during an awards banquet at the Indiana league’s state convention. Ann Garmon, Horizon One FCU president/CEO, was inducted into the Indiana Credit Union Hall of Fame. Her credit union career spans four decades. Garmon also is president of the Combined Council of America’s Credit Unions and a board member of the Council of General Motors Credit Unions. Horizon One FCU is in Indianapolis. Lisa Schlehuber, president/CEO of Eli Lilly FCU, Indianapolis, received the league’s 2009 Professional Achievement Award. The award honors individuals for their professional accomplishments and commitment to the credit union movement. Schlehuber has been president/CEO of Eli Lilly FCU since January 2005. Vicki Garrett, board vice chair at Energy Plus CU in Indianapolis, received the 2009 Leadership Award. She has been a credit union official since 1975 when she became a volunteer member of the Supervisory Committee at Citizens Gas Utility CU, now Energy Plus CU. The league also honored three individuals with Emerging Leadership Awards:
* Michael Hostetler, market research manager at Finance Center FCU, Indianapolis; * Kevin Sparks, vice president and chief financial officer at Crane FCU, Odon; and * Matt Snively, senior vice president of sales and marketing at Eli Lilly FCU, Indianapolis.

CU System briefs (09/23/2009)

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* NEWARK, N.J. (9/24/09)--A New York man was sentenced Tuesday to 141 months (nearly 12 years) in prison for stealing Social Security numbers and selling them to an identity theft ring that targeted home equity lines of credit at New Jersey credit unions and banks. Yomi Jagunna, 44, of Queens, pleaded guilty in May to selling 39 of the numbers for $30 each to a group believed to have siphoned at least $2.5 million from dozens of banks and credit unions, including New Jersey credit unions in Basking Ridge, Bridgewater and Toms River. Jagunna was one of eight people charged last year in connection with the ring (The Star Ledger Sept. 22) … * PROVIDENCE, R.I. (9/24/09)--A Pawtucket man was sentenced Tuesday to eight years in prison for robbing a bank and the Central Falls branch of Smithfield-based Navigant CU. Anthony Soares, 46, pleaded guilty in June to the Sept. 15, 2008, robbery of the credit union. He also pleaded guilty to robbing a bank in Providence five days later (Associated Press Newswires Sept. 23) … * FARMERS BRANCH, Texas (9/24/09)--John Reap, president/CEO of Town North Bank, which is owned by a group of Texas credit unions, has announced his retirement. He had been at the bank for 30 years, the past 15 as CEO. Steve McDonald, who served as executive vice president and chief financial officers of the bank since September 2008, was been appointed as Reap's successor. Town North Bank was purchased by credit unions in 1975 and formed its card processing operation, TNB Card Services, in 1976. Initially focused only on Texas credit unions, it now provides credit and debit card processing for more than 550 credit unions nationwide. Reap was also a charter member of the Texas Credit Union Foundation board of directors as an advisory director, said the Texas Credit Union League (LoneStar Leaguer Sept. 23) …

Seek CU input WOCCU urges G-20 nations

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MADISON, Wis. (9/24/09)--As finance ministers from the Group of 20 (G-20) nations prepare for this week's summit in Pittsburgh, World Council of Credit Unions' (WOCCU) leadership hopes the gathering will consider credit unions’ point of view more than it has in the past. Despite success in reaching other international regulatory bodies, WOCCU does not feel the G-20 has effectively used input from the global financial cooperative movement, according to a letter from Pete Crear, WOCCU president/CEO, to the G-20 leaders. “While we recognized the need for the G-20 governments to act rapidly over the past year, we have been disappointed by the lack of consultation in the process,” Crear wrote. “We hope that greater consultation with all parts of the financial sector will occur as the reform process continues.” This week's G-20 Summit in Pittsburgh, a location chosen by President Barack Obama because of the area's strong economic recovery, will review the progress made since the Washington D.C. Summit in November 2008 and London Summit in April. Plans include outlining further actions to assure a sound and sustainable recovery from the global economic crisis. Crear's letter commented on several areas that will be discussed by summit attendees, the finance ministers and central bank governors of 19 nations and the European Union. WOCCU said it largely applauds and supports the G-20 efforts to date, particularly as they relate to capital adequacy, liquidity needs and executive compensation. The organization hopes that greater distinction will be made between large, complex international banks and retail cooperative financial institutions in designing new guidelines, Crear’s letter said. “We agree that retained earnings should be the cornerstone of capital bases,“ Crear wrote, “but the rules for non-joint stock firms, such as financial cooperatives, must also recognize the importance of access to additional forms of capital.” Crear urged the G-20 ministers to support improved access to liquidity, clearing and settlement systems for credit unions in both developed and developing countries. Also, financial institution executive compensation should be tied to meeting long-term performance goals in an effort to assure that consumers’ well being is not compromised by bankers in pursuit of pay bonuses, he added. “Finally, as the implementation of regulatory reforms proceeds, we favor a gradual process to allow sufficient time for changes to be communicated,” Crear wrote. “This will help organizations and institutions work through the ongoing aftermath of the economic crisis.” The G-20 is an informal forum that promotes discussion among industrial and emerging-market countries on issues related to global economic stability. The G-20 includes Argentina, Australia, Brazil, Canada, China, France, Germany, Great Britain, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the U.S. and the European Union. In G-20 countries, financial cooperatives serve 637 million people and have more than $9 trillion in assets.

Ten no budget ideas for ICU Day

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MADISON, Wis. (9/24/09)--If credit unions have no budget for International Credit Union Day (ICU) celebrations on Oct. 15, no problem, says the Credit Union National Association (CUNA). Joanne Sepich, ICU Day coordinator for CUNA, has 10 ideas for resourceful staffs. They include:
* Add an ICU Day poster design to your website; * Print signs for your branch announcing your plans; * Color. Put out crayons and coloring pages to entertain children; * Open the door. Valley Oak CU, Three Rivers, Calif., opens doors all day long, giving staff the opportunity to personally thank members; * Clean windshields in the drive-up--another idea from Valley Oak CU; * Put out Small Change, Big Difference boxes to help credit unions worldwide; * Hold a book drive, and donate books to a school or library in need; * Cook off. Hold a “best treats” cook-off contest for staff to feed members on Oct. 15; * Send a letter to the editor of a local paper; and * Dress up for the occasion. Employees at Chemical FCU in Texas dress in attire native to countries around the world.
For more information, use the link.

AP Consumers new money mindset includes CUs

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NEW YORK (9/24/09)--The recent recession has created a new mindset for consumers to take control of their finances, and one way to do that is to join a credit union, according to a Tuesday Associated Press article. “In ways big and small--from scrutinizing their bills and joining credit unions to scaling back weddings and college plans--people are finding creative ways to deal with the worst recession in a generation,” the article said. “In short, there's a quiet revolution taking place in the way people save, borrow and spend that represents a retreat from old habits, and the first steps toward new ones.” The article, “Meltdown gives consumers new money mindset,” by Candice Choi and Eileen AJ Connelly, says that because credit is harder to obtain nowadays, people are becoming more creative in locating sources of money. “Bank loan balances declined by 4.6% for the year ending in June,” the article said. “But credit union loan balances rose by 4.5%, according to industry associations. Credit unions--which are nonprofits and weren't as tangled in subprime mortgages--are in better shape to make consumer loans.” For the full article, use the link.

Missouri Oklahoma CUs attend first joint convention

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BRANSON, Mo. (9/24/09)--Missouri and Oklahoma credit unions are meeting in Branson, Mo, this week for a combined Credit Union Convention and Exposition. It is the first time the Missouri Credit Union Association (MCUA) and the Credit Union Association of Oklahoma (CUAO) have held a conference together. MCUA President/CEO Rosie Holub and CUAO President/CEO D.J. Morrow Ingram welcomed 170 participants from 65 credit unions and nearly 40 vendors. Morrow Ingram noted that by combining the events, the states "doubled the valuable networking opportunities." The conference, which ends today, opened with a panel discussion moderated by Mark Sievewright, Fiserv senior vice president of strategic marketing. Providing perspectives on a variety of issues were National Association of State Credit Union Supervisors President Mary Martha Fortney, Missouri state Rep. Paul LeVota (D-52), and economist Dr. Christopher Thornberg. Fortney shared what she is hearing from state agencies regarding credit union examinations. "Regulators are seeing a 'back to basics' mentality," she explained. "Due diligence is very important and regulators are also very mindful of the difficult times our credit unions are in." Speakers addressed what they view as the most critical issues facing credit unions today and steps for the future. "Credit unions have taken their lumps, but they are not at the center of this economic mess," said Thornberg. "You look great in comparison, and it's an opportunity--don't squander it." LeVota said it is a "critical time in the credit union movement. It's incumbent on you to use this time to educate your members and lawmakers. Otherwise, the people with the loudest voices--which usually are those who have the most money--will be the ones who are heard." The event also included a concert with Lee Greenwood and the Bellamy Brothers to raise funds for Homes for Our Troops, a non-profit organization that builds adapted homes for severely injured veterans.

Indiana league elects table officers

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INDIANAPOLIS (9/24/09)--The Indiana Credit Union League board elected table officers at its reorganization meeting Sept. 11 during the league's annual meeting and convention.
Table officers elected are:
* Chairman: Lamoura Munse, Indiana Members CU, Indianapolis; * Vice chairman: Ron Mazur, Chiphone FCU, Elkhart; * Board secretary: Lori Dauksas, Members Choice FCU, Bloomington; and * Treasurer: Frank Gulley, Afena FCU, Marion.
Others serving on the board include:
* Dave Fleming, Partners lst FCU, Fort Wayne; * Randy Glassburn, Ball State FCU, Muncie; * Sandy Heller, Northern Indiana FCU, Merrillville; * George McNichols, Hoosier Hills CU, Bedford; and * Doug True, FORUM CU, Fishers.

Illinois CUs active during legislative recesses

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Credit union representatives from Illinois met with Rep. Bill Foster (D-Ill.) during a summer legislative recess. From left are: Robert Palumbo, CEO, DuPage CU, Naperville; Bill Hicks, board chairman, DuPage CU; Robert Schroeder, CEO, Illinois Community CU; Libby Calderone, CEO, Earthmover CU; and Don Edwards, senior vice president of governmental affairs at the Illinois league.
Rep. Kay Hatcher (R-Ill.) also met with credit union representatives. From left are: Libby Calderone, CEO, Earthmover CU; Robert Schroeder, CEO, Illinois Community CU; and Hatcher. (Photos provided by the Illinois Credit Union League)
NAPERVILLE, Ill. (9/24/09)--Credit union representatives from Illinois visited with U.S. Rep. Bill Foster (D-Ill.) and State Rep. Kay Hatcher (R) in their local districts during recent legislative recesses, according to the Illinois Credit Union League. Credit unions updated Foster with key legislative and regulatory issues and priorities, including maintaining the independence of the National Credit Union Administration and the National Credit Union Share Insurance Fund, support of increasing the member business lending cap, and opposing to proposals regarding interchange. Foster serves on the subcommittee on Financial Institutions and Consumer Credit of the House Financial Services Committee. Staff from the Illinois Credit Union League; DuPage CU, Naperville; Earthmover CU, Aurora; and Illinois Community CU, Sycamore, were at the meeting. During a session with Hatcher, staff from the league, Earthmover CU and Illinois Community CU discussed credit union principles and how credit unions serve everyday consumers.

CUNA Mutual on CIO InfoWeek top tech lists

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MADISON, Wis. (9/24/09)--CUNA Mutual Group has been named to the CIO 100 and InformationWeek 500, two technology award rankings that recognize companies for their information technology. The 22nd annual CIO 100 award program, sponsored by IDG’s CIO Magazine, recognizes organizations worldwide for their operational and strategic excellence in information technology. CUNA Mutual was honored for its Retirement Recordkeeping Web system and fully integrated back-office processing. CUNA Mutual has received the CIO 100 honor four of the past five years. The InformationWeek 500 is an annual listing of the nation’s most innovative users of business technology. CUNA Mutual has been listed at No. 134 in this year’s InformationWeek 500, marking the seventh year it has been named to the list and the third time it has been ranked in the top 150. CUNA Mutual’s voice signature technology also was recognized as one of InformationWeek’s 2009 technology great ideas.

CU System briefs (09/22/2009)

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* SAN DIEGO (9/23/09)--A former employee of San Diego-based USA FCU's branch at the Yokota (Japan) Air Base has been sentenced to three years in federal prison for bank fraud stemming from the theft of about $1.5 million. Leticia Figuracion, 56, who was in charge of reporting the daily balance at the branch's vault, pleaded guilty to stealing roughly $10,000 a month for years from the vault and lying about the balance. She used the account of a credit union member to wire money to an account in the U.S. and changed the mailing address on the member's account to hide her action. She used some of the money to open a restaurant in Los Angeles and sent money to relatives in the Philippines and the U.S. The incidents occurred from 1992 until September 2008. Figuracion eventually came forward and admitted the crime. She also was ordered to repay $1.5 million to the credit union (The San Diego Union-Tribune Sept. 21) … * WEST ALLIS, Wis. (9/23/09)--Senister Smith, 21, has been charged with the Tuesday armed robbery of Guardian CU in West Allis. Smith was apprehended at the credit union after a member tackled him after he allegedly took $8,000 from the tellers during the robbery. The charge says that Smith admitted to robbing the credit union, saying he was having financial problems, was a former member and knew the location well. If convicted, Smith could face up to 40 years in prison. (620WTMJ.com Sept. 22) … * SPRINGFIELD, Ill. (9/23/09)--Norma L. Lynn, 74, of Springfield, Ill. died Aug. 21. She was the former president/manager of Sangamo Chapter CU, Springfield. Lynn is survived by a companion, one daughter, one son, two grandchildren and two great-grandchildren (News-Leader Aug. 23) …

Ohio CUs reverse trend in mortgage auto loans

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COLUMBUS, Ohio (9/23/09)--The "flight to safety" trend continues in Ohio with 30,000 more Ohioans joining credit unions to take advantage of lower loan rates, better savings rates and fewer fees, reported the Ohio Credit Union League. The 1.28% increase in members through the first six months of 2009--to 2.66 million--represents the first annual growth in five years for the state's credit unions, said the league Tuesday. As of June, total shares deposited in Ohio credit unions stood at $16.9 billion--or 18.4% over the previous year. Total assets grew nearly 18.5% during that same period. "We are seeing growth in membership that we have not seen in some time," said league President Paul Mercer. "Credit unions have done an outstanding job positioning themselves for growth by staying true to their philosophy, offering financial solutions to existing members, and helping new members understand the value of the credit union difference." Despite a weak housing market and slow auto sales in the second quarter, Ohio credit unions are reversing this trend, showing growth in both lending categories--a 50.2% increase for mortgage originations and an eight-percentage point increase to 8.94% for auto loans over a year earlier. Year-to-date vehicle sales through June were down 35.1% nationally, while total outstanding auto loans at Ohio credit unions increased by 12%. First mortgage originations for the period totaled $960.5 million at Ohio's credit unions, vs. $639.5 million during the same period in 2008. Overall loan growth from June 2008 to June 2009 in the state was up nearly 7.5%--almost double credit unions nationwide. Capital growth for Ohio credit unions more than doubled the national credit union average of 0.74%. The average Ohio credit union has 6,605 members, $49.04 million in assets and $30.25 million in loans. Credit unions employ more than 6,800 Ohioans and contribute nearly $140 million in compensation to employees annually, according to the most recent quarterly financial report.

Texas citys CUs have strong presence

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SAN ANGELO, Texas (9/23/09)--Despite being outnumbered by banks by a three-to-one margin, credit unions in the San Angelo, Texas, area have established and maintained a solid presence in the community despite tough economic times. Membership in six San Angelo credit unions with open membership totaled 59,542 members as of March, according to National Credit Union Administration figures (San Angelo Standard-Times Sept. 19). After peaking at 64,570 members in 2003, the number dipped to a recent low of 57,583 in 2007 before rebounding, the newspaper said. “A credit union is a co-op, like a farmers’ co-op,” Brett Nikolauk, president of Qualtrust CU, Irving, Texas, told the paper. “A credit union serves people who are like-minded.” Credit unions have weathered the economic turbulence better than banks mostly because they are financially conservative organizations, Dwight Johnston, vice president for economic and market research for Western Corporate FCU, in San Dimas, Calif., told the paper. Kaye Edwards, president of San Angelo FCU, observed a trend toward more saving among her credit union’s members. While the credit union’s assets are growing, loans remain flat, she told the paper. Although the credit union’s outlook is positive, she has some concerns about the long-term future, she added. “Our membership is growing older; the boomers are aging,” Edwards told the paper. “A lot of young people are ‘unbanked,’ you know, like people are ‘unchurched’--they don’t have a financial institution. What we really want to do is show people how financial institutions can help them. We’d like to draw in more young people.” For the full story, use the link.

Expect card issuers to cut paper statements

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NEW YORK (9/23/09)--Credit card issuers likely will take steps to eliminate paper statements within the next several years, say several analysts studying the paperless trend. But for now, the issuers are wary of consumer backlash and the card issuers are waiting to see what happens in the telecommunications industry's efforts to go paperless. Initial steps in eliminating statements could include offering new card products with online-only bill payment and/or charging customers who demand paper statements a fee, according to card advisory firm RK Hammer. It said that mailing paper statements could be seen as an add-on benefit that could be offered free at first, then move into a fee (American Banker Sept. 22). Aite Group told the publication that card issuers probably wouldn't call the fee a statement fee. Instead, the issuers could bundle it with other customer service fees and features consumers used to get for free. American Express Co. is testing the idea with corporate credit card customers. In June it began eliminating their monthly paper billing statements. However, it still mails statements to employees of businesses with extenuating circumstances, upon request and with no fee. United Kingdom-based HSBC Holding PLC's Hong Kong unit announced in August that beginning on Jan. 1, 2011, it would charge its customers $2.60 a year to continue receiving paper statements. However, customers can apply for a fee waiver. Several major U.S. card issuers said they have no plans to charge customers for paper statements, according to the article. However, many urge customers through mailings and bill-payment websites to switch to paperless. Wells Fargo & Co. and JPMorgan Chase & Co. have offered in the past incentives to credit card customers to opt out of paper statements.

IT budgets lower but payment systems spending up

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NEW YORK (9/23/09)--Many financial institutions have cut their technology budgets, but some are increasing the amount they spend on payment systems, according to a recent study. About 73% of credit unions and banks are keeping their technology budgets at or below last year’s levels, and 72% of their budgets will be lower than this year’s, according to an Aite Group study (American Banker Sept. 21). However, payment system spending is increasing. A study released last week by a community banking trade group indicates 52% of community banks upped their payment system spending projects from 2007 to 2009. About 11% cut back on payment systems spending. Merchant remote deposit capture, which allows merchants to scan checks for deposit themselves, will increase to 78% by 2011, the study said. It also found that online bill payment has become “ubiquitous.” About 99% of the institutions surveyed said they offer online bill pay. Of those surveyed, 82% said they receive cash letters electronically, and 9% plan to do so next year. Eight percent have no plans to send image cash letters, and 9% have no plans to begin adoption of image receipt by 2011.

Kennebec bank conversion vote concludes

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AUGUSTA, Maine (9/23/09)--The vote on a proposed merger between Kennebec Valley (KV) FCU and Kennebec Savings Bank in Augusta, Maine, has concluded, but official results have not been released. Last year, KV FCU proposed converting to a bank and then merging with Kennebec Savings Bank. The proposal was approved by KV FCU's board last fall (News Now Aug. 11). The results of Monday’s vote will be known within 10 days, Beverly Beaucage, KV FCU president/CEO told the Morning Sentinel (Sept. 22). Julie Brawn, leader of KV Members Voting Yes for the Merger, told the Sentinel Tuesday that nobody could tell how members voted. Lucille Cloutier, a leader of the group KV Members Matter, which opposes the conversion, agreed. “A lot of people have been very passionate about this,” she told the paper. If the merger is approved, it would be the first combination of its kind in Maine. Only 20 similar combinations have taken place nationally, the Sentinel said, citing research from CU Financial Services.

Hampel to IL.A. TimesI CUs lending to small biz

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LOS ANGELES (9/23/09)--Credit unions are lending to small businesses, Bill Hampel, Credit Union National Association chief economist, told The Los Angeles Times. “About one-quarter of the nation’s 8,000 credit unions also do business lending,” Hampel said. “There is a legal cap on how much credit unions can lend, but loans under $50,000 do not count toward that cap.” Hampel was quoted in a column, “In Box,” by Karen Klein on Tuesday. Klein’s column was based on a question from a reader: “Are my chances for getting a small business loan improving?” Klein said large banking institutions are reluctant to lend to small companies, but smaller institutions haven’t been affected. If the business is profitable and creditworthy, and “you have a good reason for wanting a loan, your chances are good,” Klein added.

L.A. journal notes consumers flight to quality

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LOS ANGELES (9/23/09)--Consumers are flocking to non-profit financial institutions, including credit unions because they perceive them as safer than commercial banks. The Los Angeles Business Journal reported Sept. 14 that Los Angeles County credit unions experienced a jump in their deposits of 4%, or $1.2 billion, in the first half of the year. The data the paper cited were from the California Credit Union League. Consumers are trying to save more in the tough economy, Daniel Penrod, California league analyst, told the Journal. When the boom first hit, savings wasn’t a priority. However, “as the economy turned, people have realized that they can’t use their home as an ATM anymore,” Penrod added. Flocking to credit unions is a “flight to quality,” he said. Credit unions’ capital ratio has risen to 9.25% in the second quarter, which outpaces the state average of 9.08%. Anything above 7% is considered well-capitalized for credit unions, the paper said.

Bayh named league Outstanding Hoosier Legislator

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INDIANAPOLIS (9/23/09)--U.S. Sen. Evan Bayh has been named as the Indiana Credit Union League's Oustanding Hoosier Legislator for 2009. The award is presented each year during the league's convention to honor a legislator who has gone the extra mile to support Indiana's credit unions and their 2.2 million members. With Congress in session, Bayh was unable to attend a special luncheon Sept. 11, but his regional director, Andrew Homan, read his letter to the group of more than 150 attending. "Indiana's credit unions have remained strong and stable institutions even through this difficult economic time," Bayh wrote. "Moreover, credit unions have shown that the most successful financial institutions are those who seek to serve their customers and lend fairly. Indiana's 202 credit unions have proven that they are a reliable source of credit to Hoosier businesses and consumers," he added. "Evan Bayh has been a longtime credit union friend supporting key legislation like bankruptcy reform and regulatory relief, and voicing his support for credit unions' federal tax exemption," said league President John McKenzie. "In early 2009, credit unions faced a significant threat as Congress considered changes to bankruptcy law that would have harmed credit unions' ability to make mortgage loans. Sen. Bayh stepped strongly into the debate to lead the efforts in the Senate to try to reach a more targeted approach that would have a significantly less severe impact on credit unions," McKenzie said.

Rosenthal named to N.Y. Fed advisory council

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NEW YORK (9/23/09)--The Federal Reserve Bank of New York has named 11 individuals to serve on its Community Affairs Advisory Council. Among them is Clifford Rosenthal, president/CEO of the National Federation of Community Development Credit Unions. Rosenthal is the council's only representative currently working directly with credit unions. The council is an information-sharing group to elicit "ground-level intelligence on conditions and challenges for low- and moderate-income communities," said the New York Fed in a press release. The Fed will use the feedback and information from the council for the Fed's knowledge building and outreach efforts relating to those communities. "The council is an effective way for us to hear a broad range of perspectives about our communities in a regular and consistent way from local experts," said Kausar Hamdani, vice president and head of the Community Affairs Office at the New York Fed. Rosenthal noted that the appointment is "an honor," adding, "The creation of this council shows a real commitment by the Federal Reserve Bank of New York to promote mainstream financial services in underserved constituencies. I look forward to working with the rest of the council to assist the bank in developing programs that benefit low- and moderate-income people and communities." Rosenthal previously served on the Consumer Advisory Council of the Federal Reserve Board from 1989 through 1991. Other appointees to the community affairs council include Cathie Mahon, executive director of the New York City Department of Consumer Affairs, Office of Financial Empowerrment. She is a former community development credit union practitioner and senior federation staff member.

BuffaloNiagara CUs receive kudos from lawmakers

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ALBANY, N.Y. (9/23/09)--More than 40 representatives from 11 credit unions in the Buffalo and Niagara chapters of the Credit Union Association of New York welcomed county, state and federal
New York State Sen. George D. Maziarz (R-Niagara) recognized credit unions' 100 years of service at a legislative event in Amherst, N.Y.
representatives at a reception and heard lawmakers say positive things about credit unions. Association Board Chair Alfred Frosolone, CEO of Niagara's Choice FCU, and Board Member Marie Betti, CEO, Western New York FCU, introduced the legislative guests. State Sen. George D. Maziarz (R-Niagara) talked about how credit unions serve their members well and said there is an essential need for credit unions during difficult economic times. A member of two credit unions, Maziarz presented a proclamation honoring credit unions for 100 years of service to their members and communities. The proclamation also honored Western New York credit unions. Erie County Comptroller Mark Poloncarz spoke about his four years cleaning up Erie County's finances, creating additional revenue and steadily moving the county toward recovery. He commended credit unions for the important role they play in their communities and the county's overall economy. Assemblyman Mark Schroeder's (D-Buffalo) office presented proclamations recognizing every credit union in his district. Staff
New York Assemblywoman Francine DelMonte (D-Niagara) praised credit unions for helping those in need of financial services, especially in the inner city. Looking on was Alfred Frosolone, CEO of Niagara's Choice FCU and board chair of Credit Union Association of New York. (Photos provided by the Credit Union Association of New York)
read a letter of appreciation from U.S. Rep. Louise Slaughter (D-Buffalo/Niagara). Staff from Assemblyman William B. Hoyt III's office also attended. Other legislators attending from the Buffalo/Niagrara districts included: Sen. Michael Ranzenhofer (R), Sen. William T. Stachowski (D), Sen. Dale M. Volker (R), Assemblywoman Jane Corwin (R), Assemblywoman Francine DelMonte (D), Assemblyman Dennis Gabryszak (D), Assemblyman James P. Hayes (R) and Assemblyman Jack Quinn (R). Credit unions talked with the lawmakers about pro-credit union legislation, specifically, pending legislation addressing municipal depository choice, said the New York association.

Closed bank worked closely with CU mortgages

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WASHINGTON (9/22/09)--The Federal Deposit Insurance Corp. (FDIC) Friday seized two subsidiaries of Irwin Financial Corp., a Columbus, Ind.-based banking company that worked in the past with credit unions on mortgage lending. The actions bring the total number of failed banks this year to 94. Citing previous cease-and-desist orders and directions for the banks to increase capital, regulators closed the $2.7 billion asset Irwin Union Bank and Trust Co., based in Columbus, Ind., and $493 million asset Irwin Union Bank of Louisville, Ky. The failures were estimated to cost FDIC $850 million. The institutions' holdings were transferred to First Financial Bank, Hamilton, Ohio, FDIC said. Irwin Mortgage Corp., a wholly owned subsidiary of Irwin Financial Corp., formerly offered mortgage loans through sales staff located onsite at about 50 credit unions. In 2005, it sold its credit union lending business to American Home Mortgage, a subsidiary of American Home Mortgage Investment Corp. (News Now March 17, 2005). The community mortgage loan production branches were located in Arizona, California, Colorado, Hawaii and Washington. Irwin also sold 17 branches and its Carson, Calif.-based loan operation to Pinnacle Financial Corp. (News Now March 19, 2005). American Home Mortgage Investment Corp. later went bankrupt in August 2007(News Now Sept. 20, 2007).

Heartland CU part of investment education study

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MADISON, Wis. (9/22/09)--Heartland CU will participate in an 18-month study that aims to identify the right mix of online education, coaching and follow-up information to encourage proactive investment behavior. The Madison, Wis.-based credit union said it will immerse as many staff as possible in an investment education project that will aim to motivate their own investing and stimulate investing. As many as 4,000 credit union staff and volunteers in Wisconsin--including tellers, member service representatives, loan officers, management and others--will participate in the program, which offers 30,000 hours of online investment education, according to the Wisconsin Credit Union League. "Fear of job losses has pushed Americans to save more now than ever, but saving without regular investing still wouldn't be enough to properly prepare people for their long-term goals," said Sally Dischler, president/CEO of Heartland CU. "Our nation is in dire straits in part because so many individuals and families are under-prepared for retirement and commonly fail to use other investment vehicles, such as savings programs for health care and higher education," Dischler said. "So we not only need to get more Americans growing their nest eggs through investing but also figure out--in light of today's extraordinary economic circumstances--how best to motivate consistent investing over a lifetime," she said. Heartland's participation is part of its ongoing REAL Solutions initiative, which strives to help Wisconsin families improve their financial position over time by encouraging saving and investing, improved creditworthiness and long-term wealth building. The study is being conducted in partnership with the Puelicher Center for Banking Education at the Wisconsin School of Business, University of Wisconsin-Madison, Precision Information, the Wisconsin Credit Union League, Gov. Jim Doyle's Council on Financial Literacy and the Wisconsin Department of Financial Institutions. It is funded by a grant from Investor Protection Trust, a nonprofit organization devoted to investor education.

Another news report notes CUs low fees

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PHOENIX (9/22/09)--Credit unions' low fees received a mention in a Phoenix television station's consumer report about how college students can build their credit. One of tips shared by the AZCentral.com's Channel 12 was to consider a secured credit card. "This is another good way for students to build credit in this environment. Fees can be very high, so look to credit unions since they often have the lowest fees on secured card," said the consumer reporter. The article continues a recent trend of reporting about credit unions' low fees. For the full report, use the research link.

Tentative Pennsylvania budget agreement reached

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HARRISBURG, Pa. (9/22/09)--Pennsylvania Gov. Ed Rendell and state legislators announced Friday they have reached a tentative agreement on the state's budget, with a spending plan totaling nearly $28 billion. The plan would end a more than 80-day budget impasse, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway Sept. 21). "During the 80-day budget impasse, the association worked diligently to ensure that credit unions were removed from taxation conversations during budget negotiations," said PCUA President/CEO Jim McCormack. "As caucus leaders begin to implement legislation to enact the budget, we will continue to monitor, analyze and share any implications that might affect daily business operations," he said. The tentative budget calls for the state to spend $400 million less this year than in fiscal 2008-09. The plan calls for increasing spending on basic education needs by $300 million. The agreement package will be drafted into a bill to go before a joint House and Senate conference committee to pass and send to their respective chambers. Then the full chambers will vote on the bill without the ability to change it. Once passed, it will go to the governor for signature, likely within the next two weeks. Credit unions in the state, like in other states with budget problems, assisted members who are state employees with emergency funds to get them through hardships caused by the extended budget process.

Suit alleges Chrysler deputy CEO owes CU 609286

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MANHATTAN BEACH, Calif. (9/22/09)--Western FCU, in Manhattan Beach, Calif., is suing Chrysler Group LLC Deputy Chief Executive Officer James Press for $609,286. The $2 billion asset, Manhattan Beach, Calif.-based credit union is taking legal action against Press because he allegedly failed to make two payments last year on his Birmingham, Mich., home (Bloomberg.com Sept. 20). Press told the credit union he would be unable to make two pending loan payments of $203,000, according to the lawsuit. The credit union also is seeking attorney’s fees. The alleged debt occurred on an unsecured line of credit Press received while working for Toyota Motor Corp. in Torrence, Calif., said the Los Angles Times (Sept. 18). In a statement, Press said that troubles in the auto industry resulted in the denial of his request for a bonus payment. That led to his inability to make loan payments to the credit union. Press said he is trying to arrange for a loan against a future bonus with Chrysler so he can pay off his loan to Western FCU. Also, the Internal Revenue Service placed a $947,409 lien on his home because of unpaid federal taxes, according to documents from court and the Oakland County Register of Deeds, in Pontiac, Mich.

Va. CUs tell why theyre boosting market share

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ROANOKE, Va. (9/22/09)--Credit unions in the Roanoke, Va., metro area recently told The Roanoke Times why they’re increasing their market share. Credit unions in the U.S. collectively posted assets of $82 billion this past summer. Credit union membership growth hit 2% this summer, the highest rate since 2004 (The Roanoke Times Sept. 21). The newspaper asked why credit unions are growing, and six Southwest Virginia credit unions gave the Times a link to a website: CreditUnionsAreBetter.com, a promotional campaign site that declares credit unions as “People Over Profit.” Paul Philips, CEO of Freedom First CU in Salem, Va., told the newspaper that there is no “fat cat.” The credit union tries to charge its members the least amount possible for services, he added. Freedom First has $273 million in assets. Wei Jiang, senior analyst at SNL Financial in Charlottesville, said banks work for their investors, whereas credit unions work for their members. “[Credit unions’] purpose is not to make money,” Jiang said. Credit unions may not be as popular as traditional banks, but that’s because many people don’t understand what credit unions are about. It’s a matter of awareness, Mark Wolff, Credit Union National Association spokesman, told the newspaper. The paper also noted that credit union deposits are backed by the National Credit Union Administration.

CU 24 hosts Costa Rican delegates for EFT Roundtable

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TALLAHASSEE, Fla. (9/22/09)--Credit Union 24, a credit union-owned ATM and point-of-sale (POS) network, is collaborating with delegates from the World Council of Credit Unions (WOCCU) to share best practices and develop effective electronic funds transfer (EFT) strategies within the Costa Rican market. “We explored many issues within the EFT arena, all of which resulted in both parties learning valuable information and best practices,” said Jaime Castro, CEO of Coopeorotina, based in Costa Rica. “Credit Union 24 is an expert in this industry and has member touchpoints throughout the world in the form of ATMs and POS locations. “The organization has extensive experience that we can hopefully share with all of our credit unions in Costa Rica and implement similar solutions,” Castro added. While ATMs are common in Costa Rica and throughout Latin America, POS is in the beginning stages of infrastructure development. Topics at the initial meeting between Credit Union 24 and Costa Rican delegates included POS processor and merchant relations, POS interchange income and interchange income models, the current EFT landscape in Costa Rica, and fee-free ATM terminals and POS locations. “Credit unions around the world are experiencing very similar opportunities and challenges as countries’ economies become more dependent on each other, presenting the chance for all of us to learn from each other,” said Jim Park, president/CEO of Credit Union 24. “The credit union-owned Credit Union 24 network offers services that are not yet introduced in Costa Rica, so we are thrilled and honored to collaborate and create an open forum to discuss these topics.” WOCCU delegates who attended the first collaborative meeting at Credit Union 24’s headquarters Aug. 18, included: Jaime Castro, CEO of Coopeorotina; and Alvaro Vargas, chief of manager compliance; Milton Sancho, information technology manager; and Carlos Zamora, marketing manager, all from Coopenae in Costa Rica.

Credit is key to Hispanic outreach says lender

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NEW YORK (9/22/09)--When reaching out to unbanked Hispanics, credit unions may want to consider offering them credit, instead of just trying to target them with an account. James Gutierrez, founder of Progress Financial, which gives small loans to Hispanics with limited or no credit history, said not having a credit score is like “not having a face.” He said his business tries to “build that face” by helping Hispanics establish credit scores (American Banker Sept. 21). Progress Financial has funded $20 million in loans during the past four years. It hopes to begin working with financial institutions, and has applied for status as a community development financial institution. The company makes uncollateralized loans for $350 to $2,500. The annual interest rate is 36% and average loan terms are nine months. Payments are due biweekly. Many credit unions already follow the advice. They offer short-term loans under programs such as the Ohio Credit Union League’s StretchPay. The Credit Union National Association (CUNA) has identified Hispanic outreach as a top priority for credit unions. The Hispanic population is expected to reach nearly 103 million by 2050, and about 40% to 55% are unbanked. They access fringe financial service providers such as check cashers, remittance shops, and pawn shops--many of which charge exorbitant fees, according to CUNA research (News Now June 23).

IN.Y. TimesI CUs clear deposits quicker than banks

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NEW YORK (9/22/09)--Credit unions generally clear deposits quicker than banks do, according to a finance columnist for The New York Times. In his Saturday column “Hurry Up and Credit My Account,” Rob Lieber wrote that many readers have sent him angry questions about overdraft fees after he wrote about them earlier this month. The questions have come as the fifth anniversary for the law known as Check 21 approaches, Lieber noted. Check 21 allows financial institutions to turn paper checks into digital images and handle them electronically instead of having to send volumes of paper checks around the U.S. on airplanes to settle them. “Banks can and do move faster than regulations require,” Lieber wrote. “And some have pushed their daily deadlines for depositors later by a few hours. Credit unions in particular tend to clear deposits more quickly, according to a 2007 Federal Reserve study of the effects of Check 21.” For the full story, use the link.

CU System briefs (09/21/2009)

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* WEST ALLIS, Wis. (9/22/09)--A member of Guardian CU in West Allis, Wis., tackled an attempted robber at the credit union Sept. 15 (FOX 21 Sept. 21). The member said he feared for his wife’s safety. Senister Smith, 23, was arrested by police and charged with armed bank robbery. To watch a video of the incident, use the link ... * SEATTLE (9/22/09)--A man accused of robbing 17 financial institutions this summer has been caught by police. Quincy Quinn, 36, was arrested Friday and is being held on a $750,000 bail for 17 counts of bank robbery (Seattle Times Sept. 16). A second suspect who robbed the financial institutions with Quinn has yet to be identified. Three credit unions were included in the robberies--Seattle Metropolitan CU, Tukwila, on June 1; Group Health CU, Seattle, Sept. 3.; and Alaska USA FCU, Shoreline, Wash., on Thursday ... * SAGINAW, Mich. (9/22/09)--A Saginaw, Mich., credit union is one of several area financial institutions open for business on Sundays to help members who cannot do their banking during the rest of the week. The institutions hope to draw in customers from the surrounding area, according to one bank executive. Team One CU, a $297.3 million asset credit union, is among the financial institutions staying open all week. Team One has three branches inside Wal-Mart stores in Bay City, Clio and Grand Blanc, Mich., that are open noon to 4 p.m. Sundays. Employees are on hand to help open accounts, take loan applications and provide regular banking services. “The nature of Wal-Mart is that it is open 24 hours, seven days a week, “ said Jenney Robishaw, Team One marketing specialist. “For us not to be open on Sundays, when a lot of people do their shopping, doesn’t make sense,” she added (Mid-Michigan Business Sept. 20) … * HARRISBURG, Pa. (9/22/09)--Edward C. Ward Jr., board secretary of Norristown Bell CU, Blue Bell, Pa., died Sept. 17, according to the Pennsylvania Credit Union Association (Life is a Highway Sept. 21). Ward was active in the community, serving on the Norristown School Board and was president of the Joint Operating Committee at the Center of Technical Studies …

Pacific CUs form new network

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NADI, Fiji (9/22/09)--Credit unions in the South Pacific will gain greater political leverage and more educational opportunities with the formation of the Pacific Credit Union Network.
Click to view larger imageMembers of the Pacific CU Network Advisory Committee and its supporter organizations are, from left: Michael Koisen, Papua New Guinea; Brian Branch, World Council of Credit Unions; Penisimeni Fifita, Tonga; Faataga Faataulofa, Samoa; Peter Mason, Credit Union Foundation Australia; and Manoa Seruvakaula, Fiji. Seruvakaula represented Anane Vadei, who will be Fiji's permanent committee representative.
The new organization, sponsored by Credit Union Foundation Australia (CUFA) and facilitated by World Council of Credit Unions (WOCCU), held its first organizational meeting last week at the Pacific Credit Union Technical Congress, a four-day educational event jointly sponsored by CUFA, WOCCU and the Fiji Savings & Credit Union League. The network will provide technical assistance, communications and advocacy support, and develop a Pacific credit union database, said Peter Mason, CUFA CEO. The Australian credit union development organization began planning the network last year. "The distance between credit unions located on South Pacific islands has kept many of them from developing the critical mass necessary for growth," said Mason. "The new network will provide the political and technological relationships to help them better serve their members." The network was introduced to 102 congress participants from 11 countries. In addition to participants from Australia, Fiji and the U.S., countries attending were Kiribati, Papua New Guinea, Samoa, Solomon Islands, Timor-Leste (East Timor), Tonga and Vanuatu. Other congress highlights included sessions on board/management relationships, strengthening credit union legislation, understanding the cost of delinquency, credit union marketing and a regulatory forum.
Click to view larger image Faataga Faataulofa from Samoa makes a point during the Pacific Credit Union Technical Congress, which met last week. (Photos provided by the World Council of Credit Unions)
Members of the new network's advisory committee, which will help lead the group's development initiatives, include Anane Vadei, Fiji, who was represented on the committee by fellow countryman Manoa Seruvakaula; Michael Koisen, Papua New Guinea; Faataga Faataulofa, Samoa; and Penisimeni Fifita, Tonga. CUFA will serve as the network's secretariat, with WOCCU providing facilitation and resources. The network and congress are the latest cooperative efforts between WOCCU and CUFA designed to help develop credit unions in the South Pacific. This is a region in which CUFA's influence especially has been of great value in fostering credit union growth, according to Brian Branch, WOCCU executive vice president and chief operating officer. "CUFA has provided critical leadership in developing and supporting Pacific region credit unions for many years," said Branch. "We are now seeing the fruits of CUFA's dedication, and our collaboration as credit unions puts improved management practices in place to prepare for increased regulatory oversight that is coming in the wake of the global financial crisis."

Iowa students having difficulty finding loans CU says

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IOWA CITY, Iowa (9/22/09)--As the private student loan market becomes tighter and more regulated, the gap between college costs and loan availability is widening, according to University of Iowa Community CU, Iowa City. Higher tuition and other costs mean there is a $30,000 shortfall for students attending a public university for four years and $100,000 for private schools, the $838.4 million asset credit union told Iowa City Press-Citizen (Sept. 21). Steve Quigley, senior vice president for retail sales at the credit union, noted that the need posed by the gap is why the credit union decided to get into the student loan business. It is one of 80 credit unions throughout the nation offering private student loans through Credit Union Student Choice, a private student loan provider for credit unions. One student, a senior at the university, told the publication he is $10,000 short because he couldn't get enough loans--from institutions that previously lent to him--to cover his costs. Private student loans can fill that gap, said the credit union, but many lenders are leaving the private insurance market after the economy crashed. With a bill in Congress to terminate a key federal student loan program--the Federal Family Education Loan Program (FFELP)--the gap could become a canyon. The Credit Union National Association has gone on record opposing the elimination of the FFELP program. Eliminating FFELP would remove a "valuable option" for students (News Now Sept. 18) A University of Iowa (UI) official said that overall it hasn't seen a gap between loan availability and college costs. It provided $59 million in grants and scholarships this year, 11% more than last year. UI's student financial aid office suggested students compare lenders and examine interest rates, terms and fees when taking out a private loan.

Nevada CUs serve members despite tough economy

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RANCHO CUCAMONGA, Calif. (9/21/09)--Credit unions in Nevada--a state hit harder by the economy than most--are still managing to serve their members. "Despite the economy, credit unions there are seeing an improvement in some areas," said Daniel Penrod, senior industry analyst for the California and Nevada Credit Union Leagues. For example, members are saving more and deposits have grown 3.75% through the first two quarters, mostly in basic savings and money market savings. "Credit unions are doing their best under very difficult circumstances. The state has been hit by the local economy and the local housing crisis. Most of the state lives off tourism. And the global economy has exacerbated problems for financial institutions," Penrod told News Now. "Still, credit unions are finding ways of making mortgages. Their primary fixed rate was 1.5% for second quarter. That's not a large number, but any positive number for that area is huge," Penrod said. Historically the number is 4% or 5%. Credit union members, like credit unions, are conservative. "They're not out seeking exotic mortgages and aren't racking up more debt than income." Being conservative means that during the good times, the numbers might not be as high as others. But when the economy drops, they don't drop as low as other financial institutions' numbers, he said. Nevada is dealing with a struggling job market--unemployment was greater than 13.2% in August, according to the Bureau of Labor Statistics. But struggling members can get help from credit unions. "Credit unions are very different than other lenders. They are able to lend, willing to lend, and they have the means to do so," Penrod said. In areas where they can, credit unions have always been big on modifications and being proactive with members in terms of offering deferment options, modifying principal or rate, or offering to delay a payment two months and tack the missed payment onto the end of the loan term, he said. "They help as much as they can. Of course, with an upside down mortgage situation, help is limited." According to Henry Kerman, league spokesman, credit unions can provide member assistance through Credit Union Home Loan Payment Relief (HLPR) loans and personal loans. The nation's auto industry struggles have bled over into financial institutions, and Nevada's auto loan programs are no exception--both new- and used-auto loans are down. "Members are more wary of large purchases, and manufacturers are taking market share with 0% and 1% loans. Credit unions can't match that. Manufacturers make money on the sale and therefore can decrease the rate on the loan. Credit unions don't have that," said Penrod. Kertman noted that credit unions perform loan modifications on auto loans (as well as on mortgage loans). Of the 27 credit unions in Nevada, 12 work with CU Direct Lending (CUDL) on auto loans, according to Bill Meyer, communications coordinator for the auto lending service provider. Nationwide, CUDL works with 700 credit unions' programs, he told News Now. CUDL doesn't have data specific to Nevada, but provided a look at second-quarter auto trends in 60+ day delinquency rates, noting that credit unions' delinquencies are the lowest of all lender categories--at 1.18%--compared with banks at 1.62%, captives at 1.34%, finance companies at 4.47%, and others at 4.88%. "CUDL is telling credit unions across the board that they should make sure their underwriting criteria and risk lending and risk management practices are current," Meyer told News Now. "It's imperative that they take a close look at these and make the necessary adjustments to correspond with economic conditions. They must take proactive steps toward reviewing their practices and review them on a regular basis." Indirect lending in Nevada is especially under heat. "It's important for credit unions not to abandon the point-of-purchase lending as a way to generate loans," Meyer said. "Ninety percent of car buyers are getting their loans at the point of sale--at the dealership. Credit unions must work closely with members, and they need indirect lending with the dealership so they can be there for the members. Members will buy cars. Credit unions need to be there to capture that loan." Credit unions have been able to maintain a high level of market share in auto lending. "In the past 18 months, they have increased their markets share to 22%-23% from 20%--share even with the current conditions," he said. Credit unions had 22.8% of the market share in second quarter. That compares with 30.7% for banks, 29% for finance companies, and 17.5% for captives. Credit unions are consistent in their lending practices and in who they loan to, he added. "Dealers look to credit unions as a stable, true resource for auto loans. Other financial institutions can't say that." The bottom line is Nevada credit unions are well capitalized at 7.84% for second quarter, said Penrod. "That's above the 7% standard NCUA (National Credit Union Administration) has set for well-capitalized credit unions. "Despite the struggles and issues Nevada credit unions face, they are maintaining their capital level and do the best to have as much leverage as possible to serve their members," he said. Kertman noted that the league's annual convention Nov. 16-18 in Las Vegas will help out the Nevada's largest city, and it will address credit unions' financial condition for California and Nevada credit unions. "It will be one of the key topics." But holding a meeting there means that Nevada's credit unions are also conducting "business as usual," he said.

CU System briefs (09/18/2009)

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* ANCHORAGE, Alaska, and APPLE VALLEY, Calif. (9/21/09)--High Desert FCU, Apple Valley, Calif., is now part of Anchorage-based Alaska USA FCU, officials said Thursday. NCUA put High Desert FCU, which had been hit by home-construction losses, into conservatorship in October. Alaska USA FCU completed a purchase and assumption of High Desert FCU on July 1. No employees have been laid off, and the takeover has added services such as consumer loan options for recreational vehicles. Commercial loans won't be offered, spokesman Dan McCue told Daily Press (Sept. 18). The combined credit union is focusing on High Desert members and working to continue business as usual … * GREENSBORO, N.C. (9/21/09)--Team Little Guy, a group of credit union cyclists in North Carolina, will mount their bikes this weekend for a 170-mile Tour to Tanglewood to raise funds for the Warriors Hope and Care Center. The rehabilitative center is a project of Hope for the Warriors, which assists Iraq and Afghanistan veterans who have lost limbs. The group will participate in biking and running events throughout the year to raise $100,000 by June 30. The final ride will be the Ride for the Warriors, which begins June 17 at Ft. Bragg, according to the North Carolina Credit Union League's Weekly Update Sept. 18. During the past two years, the team ran 208 miles and raised more than $145,000 for the Carolinas Credit Union Foundation's Micro Community Grant program … * NEW ORLEANS (9/21/09)--Phishing attacks are being reported by Homeland FCU and Parish Employees FCU, both located in the New Orleans area, according to the Louisiana Credit Union League (LCUL). Members and nonmembers report receiving text messages that inform them that their accounts are experiencing suspicious activity, have negative balances, or have been closed. The text-message recipients are told to call a toll free number or visit a website to check the status of their accounts. The calls are not from a legitimate source, and individuals should never provide their personal private information on the phone or the Internet, LCUL said. Those receiving the text messages should contact the Federal Trade Commission, the league added (LCUL’s eNews Sept. 16) … * NEWPORT NEWS, Va. (9/21/09)--Charges have been dismissed against a man accused of robbing Virginia Educators’ CU, Newport News, Va., in May. A second look at the case by a police detective resulted in Perez Perado Thomas Jr. 25, being “totally exonerated” in late August, said Thomas’ attorney, Robert W. Lawrence. Thomas looks nearly identical to the man who robbed the credit union. Also, calls were made from Thomas’ cell phone near the vicinity of the bank at the time of the robbery, Lawrence said. However, a more detailed examination of surveillance photos by Detective A.J. Matthews determined that Thomas was not the robber because Thomas’ hairline and eyebrows did not match the robber’s, and Thomas is shorter than the robber, Lawrence said (Daily Press Sept. 18) … * MACON, Ga. (9/21/09)--A Macon, Ga., man was convicted Thursday for helping rob a credit union of roughly $200,000. Merkuri Stanback and two others allegedly walked into a Macon branch of Park Community FCU, based in Louisville, Ky., on Dec. 28, 2007, with firearms (Macon Telegraph Sept. 18). They restrained employees, ransacked the teller area, and took $198,439--but dropped $49,000 when leaving. Stanback was found guilty of armed robbery and weapons charges. He could face a life sentence for one charge, 25 years for the robbery and 10 years for possession of a firearm by a convicted felon ... * BEAVERTON, Ore. (9/21/09)--The Credit Union Association of Oregon’s (CUAO) primary Twitter feed will go live as the Oregon delegation hikes Capitol Hill Tuesday through Thursday, said CUAO. The username is CUAOregon. The delegates will “tweet” as they meet with legislators and network with other credit union delegations in Washington, D.C. ...

Fed overhaul wont affect private student loans

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WASHINGTON (9/21/09)--A bill passed Thursday by the House of Representatives to eliminate the Federal Family Education Loan Program (FFELP) has no impact on private student lending opportunities for credit unions, says Credit Union Student Choice, a student lending credit union service organization. The Student Aid and Fiscal Responsibility Act of 2009 (H.R. 3221) cuts out private lending institutions from originating the FFELP loans. While this measure would have grave ramifications for all lenders who originate federal student loans, the opportunity for credit unions in private student lending remains strong, according to Jon Jeffreys, president of Credit Union Student Choice. "The bill obviously has a huge impact on lenders who participated in …FFELP, whereby they were able to originate federal student loans," said Jeffreys. "However, it's important to note the distinction between federal and private student loans. "While they do share the same bankruptcy exemption as federal student loans, private loans are completely separate from the federal government and are meant to help students fill the funding gap after federal loans have been exhausted," he said. "The demand for these loans remains very strong--to the tune of nearly $15 billion this year alone." With ongoing economic challenges and ever-increasing college costs, Jeffreys said demand surely will remain strong for years to come, giving credit unions an "incredible" opportunity. "Credit unions involved in the Student Choice program experienced tremendous loan volume this summer," he said. "There is a critical need for lenders who can offer fair-value private student loans, and our credit unions are filling that need. We certainly look forward to helping credit unions who've been active in FFELP, as they look for new business solutions in replacing those federal student loans." The Credit Union National Association (CUNA), which lobbied against the bill, sent a letter Wednesday to House speaker Nancy Pelosi and other members of Congress expressing concern that the elimination of FFELP would remove a "valuable option" for students. CUNA President/CEO Dan Mica's letter noted that more than 1,000 credit unions--particularly those with membership bases related to a university--provide student loans. Many provide individualized service and support to loan holders. Jeffreys said that credit unions' not-for-profit, cooperative business model give them the ability to lend from their own balance sheet and makes them uniquely suited to deliver superior economic value in private student lending. This summer, its client credit unions approved more than $100 million in loans, helping more than 5,000 students attend college this fall. The average loan rate was below 6%, nearly 400 basis points below the average private student loan rate being charged by the nation's largest student lending companies. "It's very apparent that credit unions are providing superior economic value to consumers," Jeffreys said. Credit Union Student Choice is a credit unions service organization that provides turnkey private student lending services to 83 credit unions, which offer private student loans to more than five million members.

Illinois league iPod giveaway promotes iBelong CU awareness

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NAPERVILLE, Ill. (9/21/09)--The Illinois Credit Union League (ICUL) is giving away 30 iPods at CUs in 30 days to promote International Credit Union Day Oct. 15 and the iBelong awareness campaign in the state. This campaign, which runs through Sept. 30, provides residents with 30 opportunities to win an Apple iPod Shuffle by visiting www.ibelongillinoissurvey.org and filling out a brief survey describing their banking patterns and preferences. Every day this month, one participant will win an Apple iPod Shuffle, regardless of whether the winner is a member of one of Illinois’ participating credit unions. ICUL officials hope Illinois residents will hear their message detailing the perks of credit union membership, including lower rates on loans and higher yields on savings. There is no obligation for residents who fill out the survey to become credit union members. “Credit unions are not-for-profit financial cooperatives that work hard to give you better service, a safe place to save money, and access to affordable loans,” said Dan Plauda, ICUL president/chief executive officer. “No wonder 90 million people across the country, including 2.7 million in Illinois, belong to a credit union.” ICUL is in its second year running its “iBelong” campaign, licensed last year from the Pennsylvania Credit Union Association (PCUA), with Chicago-based advertising agency HGadgroup. The awareness campaign has been partially responsible for increasing credit union membership in the state by more than 39,000 in 2008. The 2009 campaign is ongoing.

Know demographics Gen Y tech savvy harder to please

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MADISON, Wis. (9/21/09)--Credit unions may be interested in some new survey results outlining traits Generation Y members possess to more effectively serve this growing demographic of 75 million members. Gen Y is new to banking, but has high expectations. A survey by Maritz indicated that Gen Y can be less patient, tolerant and harder to please than their older counterparts (Teller Vision Oct. 1). According to Deloitte, members of Gen Y also are:
* Self-directed and resourceful in researching financial services, but seek recommendations from family and friends. They often are skeptical of traditional advertising; * Motivated and concerned with receiving products and services at a competitive price; * Tech-savvy and view technology as an extension of themselves. They use smartphones, blogs, Facebook, Twitter, Second Life, YouTube and Flickr.
Fraud protection is important to Gen Y, Deloitte said. They want to be notified of fraud immediately on their cell phones, and are most likely to leave a financial institution if a fraud occurs. Financial institutions may have unstable relationships with younger consumers because they haven’t settled into a financial pattern yet, said Thad Peterson, Maritz division vice president of sector strategy and solutions. He suggested financial institutions focus on three concepts when attracting Gen Y:
* Locational convenience to include online and mobile banking; * Appropriate customer experience; and * Products and services that give young people roots--such as providing incentives for online bill pay and debit rewards programs.
“It’s critical for [financial institutions] to stay ahead of the curve and build good relations with younger customers,” Peterson said. “After all, they’re the future.”

Little man with umbrella inspires Herring winner

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BURNSVILLE, Minn. (9/21/09)--US FCU captured the Minnesota state-level Louise Herring Award for Philosophy in Action this past month by highlighting a demonstration of credit union philosophy in action through its Umbrella Project. The Umbrella Project is a widespread initiative that re-emphasized resources already in place at US FCU and initiated new ones to respond to challenges brought on by the change in the economy.
Click to view larger image Click for larger view
The project was inspired by “The Little Man” cartoon created in the 1920s--ironically around the same time US FCU was established--by cartoonist Joe Stearn. He depicted The Little Man being protected from hard times and financial distress by the credit union umbrella he carried, illustrating how credit unions would help people during the difficult times of the Great Depression. The imagery reflected the nation’s economic condition at that time, and the ability of credit unions to protect and serve their members. The resources offered by US FCU through the Umbrella Project included borrower resources, fraud and security resources, and budgeting resources. This compilation of resources offers access to tools, from free budgeting programs and educational seminars, to credit card management and financial counseling. The goal of the resources was to help those needing immediate financial education or guidance and to promote proactive measures so all members can take control of their finances in the future. The state-level award was presented by the Minnesota Credit Union Network. US FCU now enters national competition, sponsored by the Credit Union National Association (CUNA). National honors will be conferred in March 2010 at CUNA’s Governmental Affairs Conference in Washington, D.C. US FCU, based in Burnsville, Minn., has $802.4 million in assets.

TV station offers CU perspective on interchange

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MANKATO, Minn. (9/21/09)--Minnesota Valley FCU, Mankato, Minn., recently shared its perspective on interchange fees with a Minnesota Fox TV station. The U.S. House and Senate have bills in committee that could reduce the interchange fees charged to merchants. Getting rid of the credit fees would increase profit margins for businesses, said Nick Meyer, Minnesota Valley FCU president (Fox TV Sept. 17). “There have really been a number of years of history where merchants were trying to legislatively limit Visa, MasterCard, American Express and Discover as to how much interchange income they could get because that reduces their profits a little bit,” he told the station. “But abolishing fees for retailers could prompt the processing companies to look elsewhere to make up the difference, including consumers,” Meyer added. Consumer may not see the effects of the fees at the point of sale, but the costs will show up later at their financial institutions. For instance, free checking may not be as accessible at credit unions, Meyer said. Credit unions and small banks won’t want to make the changes, but since debit and credit cards barely break even right now, it may be necessary, he said. The Credit Union National Association has indicated it favors the current interchange fee structure. It said regulating the fees would adversely affect consumers, competition and innovation. The fees also help credit unions cover expenses and losses while giving merchants a guaranteed source of payment when the transaction occurs (News Now Aug. 10). To see the news story, use the link.

CU System briefs (09/17/2009)

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* HOUSTON (9/18/09)--A Houston man was sentenced to 16 1/2 years in prison for firing a shotgun in Investex CU's Spring, Texas, branch on Nov. 5, 2008 during a heist that involved help from an intern at the credit union. Dominique Sherrard Ervin, 20, was the second person to be sentenced for the crime. Earlier, Carl Edward Preston, 20, was sentenced to 12 years and 9 months in prison. Both men pleaded guilty to the crime. In the heist, the two men phoned the intern, Dorcell Johnson, 19, who was inside the credit union and allegedly gave the go-ahead for the robbery to proceed. Ervin and Preston entered the credit union armed with shotguns. Preston pointed his gun at an armed security guard and Ervin point his at Johnson, pretending to take Johnson hostage. In the vault, they forced the guard and a female employee to lie down, and Ervin fired a shot from his shotgun over their heads, striking the vault's security cameras. The robbers fled with more than $202,000. Preston and Ervin also were ordered to make restitution and must serve three years of supervision after their release from prison. Johnson, who also pleaded guilty, is scheduled to be sentenced Sept. 25 (States News Service Sept. 16) … * HARRISBURG, Pa. (9/18/09)--Erie (Pa.) General Electric FCU says it will help members laid off from GE Transportation, a builder of electric locomotives. The company announced that the 1,200 workers on temporary layoff are now permanently without jobs (Life is a Highway Sept. 17). It also announced another 480 job cuts, effective in two weeks. The credit union posted a message on its website reminding members that the credit union is available to help them through challenges and offered free services and financial counseling … * WHITEFISH, Mont. (9/18/09)--Whitefish (Mont.) CU, Montana's largest credit union, has named James A. Kenyon III as its new CEO, announced Board Chairman Leo Tracy. Kenyon succeeds Charlie R. Abell. Kenyon previously was with Missoula (Mont.) FCU for 16 years. He served as senior vice president, operations and lending for 14 of those years. His tenure began Monday. Whitefish CU has more than $1.134 billion in assets and 57,000 members …

Kansas CUs see strong 2Q

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WICHITA, Kan. (9/18/09)--Kansas credit unions experienced growth in assets, loans and deposits in the quarter ending June 30, according to the Kansas Department of Credit Unions’ Second Quarter 2009 Call Report. Loans increased to $2.45 billion from $2.2 billion the year before. Total assets rose to $3.7 billion--a more than 12% increase, the department noted in the Wichita Eagle (Sept. 17). Total deposits climbed to $3.05 billion from $2.77 billion. Kansas credit unions experienced a 33% increase in loan delinquencies, largely because of assessments they pay to revive the National Credit Union Share Insurance Fund. Delinquencies rose to $31.9 million from $24 million, the newspaper said. Richard Yadon, Kansas Department of Credit Unions’ financial examiner administrator, said the gain in assets and deposits is because people are moving money out of the stock market and other investments into credit unions.

CUNA Mutual sells ownership in Canadian affiliate

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MADISON, Wis. (9/18/09)--CUNA Mutual Group announced today it is selling the majority ownership of its independently managed affiliate, The CUMIS Group Ltd., to a longtime business partner of the Canadian company and a Canadian credit union central. CUMIS’ board decided to enter into an agreement with Co-operators Life Insurance Co., and Central 1 credit union, which will assume full ownership of CUMIS by the end of the year. Central 1 is a Canadian corporate credit union based in Vancouver, B.C. “We have been approached on numerous occasions by companies interested in obtaining an ownership interest in CUMIS,” said Jeff Post, president/CEO of CUNA Mutual. “The time is right for both organizations to make this move. While improving our financial strength, this decision also simplifies CUNA Mutual’s business, enhancing our ability to become more competitive in our core insurance products and provides us flexibility to prudently pursue new avenues for growth.” CUMIS became an affiliate of CUNA Mutual in 1977. It provides insurance and financial solutions to the Canadian credit union system. Its principal companies are CUMIS Life Insurance Co. and CUMIS General Insurance Co. As of Dec. 31, CUMIS’ assets were almost $1 billion. The organization is based in Burlington, Ont. Co-operators is a Canadian-based cooperative that focuses on insurance and investment products for consumers. It is owned by a group of Canadian co-operatives and credit union centrals. CUNA Mutual Group provides financial services to cooperatives, credit unions, their members and customers worldwide.

White named chairman of CU Association of Rhode Island

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MARLBORUGH, Mass. (9/18/09)--Stephen J. White, president/CEO of Westerly (R.I.) Community CU (WCCU), has been chosen to serve as chairman of the Credit Union Association of Rhode Island's board of directors. A member of the board since 2002, White has served as board vice chairman as well as chairman of several association committees. He serves on the Audit Committee of North East Member Business Services. White has 30 years' experience in the credit union industry, serving the past nine years in his current position at the $210 million asset WCCU. Prior to joining WCCU, he was chief operating officer of The People's CU in Middletown, R.I.

Ohio CUs 2Q growth defies state trends

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DUBLIN, Ohio (9/18/09)--The second quarter of 2009 was strong for Ohio's credit unions, according to the Ohio Credit Union League. Mortgage originations at Ohio credit unions experienced "phenomenal growth" the past 12 months, increasing 50.2% despite the weak housing marketing, said the league, citing its latest Ohio Credit Union Quarterly Performance Summary. Outstanding auto loans rose by 12% annually in June, which brought Ohio credit unions' market share to 18.4%. That is up from 10% a year earlier, said the league (eLumination Newsletter Sept. 16). Membership growth in the state during the first quarter continued through June, reaching 2.66 million members. Total delinquencies rose to 1.37% in June, up from 1.09% the previous year and below the national average of 1.59%. Capital levels remained high at 11.3% of assets, said the league.

Banks double biz account fees CUs stay the same

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CHICAGO (9/18/09)--Business checking account fees rose this year, according to a new survey. Minimum balances required on the accounts more than doubled at large banks, while credit unions and community banks maintained the same levels as the year before. The national median for business checking overdrafts was up $3--to $28 from last year, but the same for nonsufficient funds or returned checks and most other fees, according to Moebs Services, an economic research firm based in Lake Bluff, Ill. (Professional Services Close-Up Sept. 15). Wall Street banks with more than $500 billion in assets charged $35 per overdraft. Of the more than 2,000 banks and credit unions surveyed by the firm, 94.3% of banks and 27.8% of credit unions offer business checking. Roughly 40.9% of financial institutions surveyed offer a "free" business account. This is up from last year for all institutions, as large banks try to protect loss of business, especially small business, and community banks and credit unions try to get market share, Michael Moebs, CEO of the firm, told the publication. For a business owner to avoid a checking account fee, large banks required a $2,250 minimum balance--nearly double the $1,250 required in 2008. Community banks and credit unions that require minimum balances kept the requirement level this year, with the banks requiring $1,000 minimum and credit unions $500. "Main Street institutions definitely offer a better pricing deal than the big Wall Street banks," Moebs said. "In these hard economic times, businesses should seek the better deal." Wall Street banks also increased their use of account analysis (a cash management review). This year, 92% of them offered accounting analysis while 66.3% of community banks and credit unions offer them. Of the more than 27 million businesses in the nation, 10,000 are listed on Wall Street and the exchanges. Small business produces 65% of all U.S. jobs. Financial institutions charged businesses about $9 billion in service charges on deposits in 2008, said Moebs.

TECH CU approved to serve as public funds depository

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CROWN POINT, Ind. (9/18/09)--TECH CU in Crown Point, Ind., has been approved to receive public funds for deposit. Indiana’s State Board of Finance this week approved the $266.5 million-asset credit union’s application to serve as a depository of public funds, which means the credit union can accept deposits from state or local governments in Indiana. Deposits will earn interest (nwitimes.com Sept. 17). The Public Deposit Insurance Fund protects all government funds in state depositories.

StretchPay underwriting ops changes in effect

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COLUMBUS, Ohio (9/18/09)--Changes have been made to StretchPay--a credit union salary advance alternative--to make it compliant with the federal Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009. As of Tuesday, StretchPay no longer is a 30-day, short-term loan product. It now is a short-term revolving loan with repayment due dates, ranging from 28 to 60 days, said the Ohio Credit Union league League (eLumination Newsletter Sept. 17). The changes were made to ensure that credit unions offering StetchPay are compliant with Regulation Z--Truth-in-Lending--which the Card Act amended in August. StretchPay was affected because it is an open-end loan product. “The operational change will grant participating credit unions an opportunity to continue offering their members a valuable service,” said Laura Busque, league outreach manager. StretchPay provides annual lines of credit to credit union members during budgeting emergencies. Participating members pay a $35 annual fee to access a $250 line of credit for 12 months at an 18% annual percentage rate or the state usury rate. “StretchPay would not nearly be the success it is today without the involvement of the National Credit Union Foundation's REAL Solutions program," said Doug Fecher, CEO of Wright-Patt CU in Fairborn, Ohio. "REAL Solutions gave StretchPay a voice in the national credit union community it could not have attained on its own.”

Pa. foundation board introduces two new grants

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HARRISBURG, Pa. (9/18/09)--The Pennsylvania Credit Union Foundation board introduced two new grants into its portfolio during its
The Pennsylvania Credit Union Foundation board introduced two new grants at a meeting Sept. 10. From left, front row, are: Jim McCormack, Pennsylvania Credit Union Association president/CEO and ex officio; Ed Williams; Dave Ackerman, foundation vice chair; Diana Roberts, foundation chair; Jeff DeBree, treasurer; Denise Kaczmarek, secretary; and Joe Wambach, executive director. From left, back row, are: Norb Kaczmarek, ex oficio; Hugh Bray; Barb Bowker; Louise Lingenfelser; Bob Behlke, ex officio; Chris Woods; Maria Lavelle; George Nahodil; Paula Nihoff; Jay Murray, ex officio; and Margie Coan. (Photo provided by the Pennsylvania Credit Union Association)
meeting Sept. 10 during the Fall Leadership Conference, said the Pennsylvania Credit Union Association. The Home Banking/Bill Pay grant project is expected to expand access to specialized services for small credit unions and enhance marketing opportunities. The Public After School Education project grant will provide financial literacy to students at libraries in Pennsylvania (Life is a Highway Sept. 17). Diana Roberts, foundation chair, said credit union volunteers will provide financial tutoring to students in the library program. Ed Williams, Grants Committee chairman, said the Home Banking grants will help pay for introducing Internet banking networks to small credit unions.

Illinois chapter leaders discuss environment

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NAPERVILLE, Ill. (9/18/09)--Nearly 70 chapter leaders representing 17 of the Illinois Credit Union League's (ICUL) 25 chapters attended the annual Chapter Leaders Conference hosted by the league and the Illinois Quad Cities Chapter. This year's theme was "CUs … Naturally Better" and topics centered on promoting chapter activities and events related to environmental issues. Speaking at the event was Chat Pregracke, founder of Living Lakes & Waters, an organization to clean up the Mississippi River. Pregracke and his mother KeeKee told about how Pregracke founded the organization in 1998, starting with a small loan from a credit union in Quad Cities. Today the $1.3 million relief organization travels the country with several employees and a fleet of barges and workboats. Thousands of volunteers have cooperated to help with community cleanups, Riverbottom Forest Restoration, and Adopt-a-Mississippi River Mile programs. He was presented a $500 donation by the chapter Chairman Ray Rogers on behalf of the chapter and the league. The group also heard from local business community leaders about "How Credit Unions Can Help Their Communities Go Green." The panel consisted of the former mayor and current staff of Rock Island, Ill.; the manager of a local grocery chain; and editor of a local consumer environmental publication. They discussed their green initiatives and told how credit unions can become involved in discussing the projects with their communities. A silent auction during the conference raised $1,500 for the Credit Union Political Action Council, the Illinois Credit Union Foundation and an iBelong campaign in Illinois.

Historic CU photo recreated at CUNA anniversary

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ESTES PARK, Colo. (9/17/09)--Leaders from the Credit Union Association (CUNA) and today’s credit union system held a commemorative ceremony yesterday on the YMCA camp grounds in Estes Park, Colo., the original site of CUNA’s founding 75 years ago. About 150 system leaders gathered to hear commemorative remarks from CUNA Chairman Kris Mecham; CUNA President/CEO Dan Mica; American Association of Credit Union Leagues (AACUL) Chair Rosie Holub; Bill and Catherine Herring, the son and daughter of early credit union organizer Louise Herring who attended the 1934 Estes Park meeting; and Kathy Pelletier, the granddaughter of credit union pioneer Roy F. Bergengren. The following are excerpts from their remarks:
* CUNA Chairman Kris Mecham recalled that back in 1934, before
Click to view larger image Seventy-five years ago, pioneers of the credit union movement--including Edward Filene, Roy Bergengren and Claude Orchard--posed at the YMCA campsite in Estes Park, Colo., to record the founding of the Credit Union National Association on Sept. 10, 1934. The photo has become an icon in the credit union movement history. (Photos provided by CUNA).
setting out for the Colorado meeting, Roy Bergengren expressed his thoughts about the movement in a letter to his boss, Edward Filene. "I sincerely believe," Bergengren wrote, "that what we are going to do at Estes Park will have extraordinary consequences." Added Mecham: “How right he was. The system that sprang forth on Aug. 10, 1934, is ‘extraordinary.’ Our early founders would be proud of their work, and they would marvel at how our system has grown and evolved during the last three-quarters of a century. But we’ve maintained the same values as the pioneers initiated in those early days. We are still ‘not for profit, not for charity, but for service,’ and all about ‘people helping people.’" * AACUL Chair Rosie Holub noted that in 1934 there were only five sustaining leagues (New York, Illinois, Massachusetts, Minnesota, and Missouri). “A primary purpose of CUNA then was to form leagues in every state to develop the credit union movement and credit unions in those states. In the early days Roy Bergengren emphasized the importance of unity; it was difficult to achieve even then. Let us pledge, as did the credit union leaders, to work together cooperatively and collectively to achieve unity of purpose and voice.” * Kathy Pelletier read portions of a moving speech her grandfather,
Click to view larger image Leaders and supporters of the credit union movement gathered Wednesday in Estes Park, Colo., to commemorate the founding of the Credit Union National Association (CUNA) there. One of the day's highlights was a group photo similar to the original photo of CUNA founders taken there in 1934.
Roy F. Bergengren, delivered in Estes Park on CUNA’s 20th anniversary in 1954. Her grandfather took note of great events in history--the signing of the Magna Carta (the beginning of democracy), the Mayflower compact (symbol of the right to worship according to the dictates of conscience); the Declaration of Independence (our American charter of liberty); the U.S. Constitution (which gave practicality to freedom); the Gettysburg Address (rededicating us to government by the people). He explained how these are all milestones that are “great days of remembrance.”

“We too, would add a day of remembrance,” Bergengren said then. “Because there are nine million of us today and the prospect of 100 million in the not too remote future, and our day is of more than passing significance.” He went on to say the day is made significant because “usury has existed all through the centuries because of the false assumption that the average man was not entitled to normal money credit.” The solution was found “in the hitherto unsuspected capacity of the people to work together, to pool their savings, however small, and thereby to create normal credit for themselves without usury.” He later concluded: “May our children and our children’s children return to this spot, from time to time over the years, here to renew their inspiration to carry on the war for economic opportunity, which their ancestors started.” Even today, her grandfather remains “her role model,” Pelletier concluded. * Bill Herring, a CUNA board member, and Catherine Herring are both CEOs of Ohio credit unions and each recalled their mother, Louise, sometimes referred to as “the mother of the CU movement” who in her day organized more than 500 credit unions. Bill said that his mother and her fellow founders 75 years ago saw the effect of the high cost of credit on every day people. “They had a vision that a national organization working with state leagues would organize credit unions and represent credit unions as a strong voice at the state and national level. The founders 75 years ago would be proud of CUNA today.”.”

Catherine Herring noted that her mother was among the youngest attendees at the 1934 Estes Park gathering, but all her life was never one to be shy or intimidated, especially when it came to credit unions. “If you think about it, it was a pretty radical concept at the time. Working people would work together for the common good. She felt credit unions would make a difference in people’s lives,” Catherine said. She also told the audience how her mother summed up what was distinct about credit unions: “Their aim is to allow the average working person to exchange their paycheck for the maximum amount of goods and services.” * CUNA President/CEO Dan Mica told the audience how he was struck by the “simplicity of the original photo 75 years ago. The majesty of the mountains, the beautiful scenery.” Looking at the same surroundings today, Mica said, “It is truly great to be part of the credit union movement. We have something special to be proud of.” But he said we should “honor and learn from the past, but we should not be chained to the past. There’s still a lot of work to be done to educate the rest of the world about who we are and what we do. We have tomorrow’s opportunity in front of us.”
Guests at yesterday’s commemoration included the CUNA and CUNA Stratetgic Services (CSS) boards and executive management teams, league presidents and their chairs, representatives from affiliated and guest credit union organizations, and National Credit Union Administration board member Gigi Hyland. Additionally, honored guests included past CUNA chairs J. Alvin George, Gary Janacek, Nancy Pierce, Dave Maus, Barry Jolette, Dick Ensweiler, Juri Valdov, Allan Kemp McMorris, and Tom Dorety as well as former CUNA President Ralph Swoboda. To further mark CUNA’s 75th anniversary, a photo of today’s group was taken at the same location where 52 credit union delegates from 21 states and the District of Columbia originally posed for the iconic photo taken in 1934 against the backdrop of the Rocky Mountains.

Wisconsin CUs outperform state banks in service

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PEWAUKEE, Wis. (9/17/09)--Credit unions' mission is to serve all working Americans and their families, not just the poor, and in Wisconsin, they are doing a better job at it, even though banks are required to serve low-income areas through the Community Reinvestment Act (CRA), says the Wisconsin Credit Union League. League President CEO Brett Thompson noted that a recent report by the National Community Reinvestment Coalition (NCRC) uses faulty methods to conclude that banks do a better job that credit unions serving low and moderate-income people and calls for unnecessary legislation. NCRC's report has several flaws, said the league. It mistakenly assumes credit unions are intended to serve only the poor and "cherry picks data and ignores findings from federal regulators that show credit unions are fulfilling their true mission--to serve all working Americans," Thompson said. A previous NCRC study's state-specific data indicates that Wisconsin credit unions outperform Wisconsin banks in serving minorities and people of modest means, despite the fact banks are subject to CRA while credit unions are not, said Thompson. Wisconsin credit unions outperformed state banks in all three areas covered in the study: providing single family home purchase loans, refinancings and home improvement loans. Home Mortgage Disclosure Act (HMDA) data says Wisconsin's low-income mortgage borrowers' approval rate is 74.7% at credit unions and 49.8% at non-credit union lenders. For minority mortgage applicants, the Wisconsin credit union approval rate is 72%, compared with 46.6% at non-credit union lenders, said the league. Credit unions have 10% of the Wisconsin financial services market share but operate 40% of the financial institution branches in the state's low-income census tracts. Roughly 94% of all Wisconsin banks, including 12 of the largest 20 banks, have no branches in low-income census tracts, said the league. "Wisconsin's credit unions are doing a great job serving all of their 2.2 million members," Thompson said. "Last year, their members saved $208 million by saving at and borrowing from their local credit unions instead of banks. Credit unions don't need more regulation to do right by their members--they're already doing it. One more flawed study can't change the real facts."

Study CUs have loyalty edge on banks gap narrows

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SALT LAKE CITY (9/17/09)--Credit unions continue to have a much higher member/customer engagement level and loyalty than banks, says a firm that specializes in loyalty and engagement benchmarking surveys. However, the gap is narrowing, according to the mid-year results reported from the Allegiance National Benchmarking/Pulse of America Survey, conducted by Utah-based Allegiance, Inc. Among the findings:
* Member/customer expectations of credit unions and banks have shifted from the more traditional roles of industry leader, guardian and protector of member/customer finances. * Credit unions continue to have much higher engagement levels than at banks. However credit unions surveyed saw member/customer engagement decrease to 49% from 57% between January and June--the sharpest drop since the survey began in October 2007, said the firm. It did not provide reasons why the drop occurred. * Engagement levels among older member/customers have fallen. While levels remained constant for consumers 54 or younger, those who are older dropped 10% on average in engagement with their financial institutions. * Both banks and credit unions surveyed focused their member/customer engagement resources on the most profitable demographics. While engagement fell by 8% among consumers surveyed with incomes of $50,000 or less, engagement rose by 3% for those with incomes ranging from $50,000 to $150,000.
Allegiance National Benchmarking service helps financial institutions uncover what drives consumer engagement in specific industries so they can retain their customers and grow.

Mass. treasurer teams with CU on finance essay contest

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BOSTON (9/17/09)--Massachusetts Treasurer Tim Cahill announced Monday that his office's Financial Education Department is teaming up with Chelsea, Mass.-based Metro CU and a radio station to offer "Four Downs for Finance," an essay contest for K-12 students. Joining the $763.5 million asset credit union in the project is WBZ-FM 98.5 The Sports Hub. In the contest, students submit essays about the importance of saving money to the website: Mass.gov/Treasury. A grand prize winner will receive a $500 savings account, a school visit from Cahill and New England Patriots offensive lineman Dan Koppen, and an invitation to attend the season's last Patriots game on Dec. 27. Each week during the Patriots regular season, three winning essays will be selected. Weekly winners will be announced on Patriots Radio Network and receive an autographed photo from Koppen. The grand prize winner, plus second and third place finalists will be chosen from the group of weekly winners for the opportunity to see the last game.

Illinois small CUs conference attracts 100

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NAPERVILLE, Ill. (9/17/09)--A record number of 100 participants from small credit unions throughout Illinois attended the Illinois Credit Union League’s (ICUL) annual Small Asset Size (SAS) credit union conference held recently.
Ray Rogers, left, chairman of the Illinois Quad Cities Chapter of Credit Unions, presented a $500 donation to Chad Pregracke, founder and president of environmental relief organization Living Lands and Waters, during the Illinois Credit Union League's recent Chapter Leaders Conference. (Photo provided by the Illinois Credit Union League)
The two-day conference for credit unions under $20 million in assets addressed challenges and concerns of this particular asset group. Topics focused on helping small credit unions compete in today’s turbulent and constantly changing marketplace. Nearly 270--or 72%--of ICUL’s member credit unions hold $20 million or less in assets. Highlights from the first day of sessions included a panel of speakers from the National Credit Union Administration (NCUA) and Illinois Department of Financial and Professional Regulation’s (IDFPR) Division of Financial Institutions (DFI). They included Ron Jones, NCUA economic development specialist; Gerald Schultz, NCUA supervisory examiner; and David Anderson, DFI senior financial institution examiner. The panelists discussed the Bank Secrecy Act (BSA) and common BSA violations, NCUA’s programs for small credit unions, and how small credit unions can work together with the IDFPR for the benefit of their members. They also provided information about identity theft and red flags. The second day of the conference included ICUL regional directors Joyce Jackson and Penni Gebke, who presented information on the benefits of strategic planning and creating a unique business plan. Carol Bertoux, ICUL associate general counsel, led a discussion on developing basic credit union policies. Other topics discussed included board member relations, marketing, shared branching and student outreach. “The SAS continues to be a premier educational event for our small credit unions,” said Dan Plauda, ICUL president/CEO. “This is a core group in our state, and we are very interested in providing them with all of the information and resources they need to be successful.” This year’s conference, the eighth annual event, was sponsored by the Illinois Credit Union Foundation and CUNA Mutual Group.

Texans CUSOs Chapter 11 bankruptcy approved

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RICHARDSON, Texas (9/17/09)--The U.S. Bankruptcy Court for the Northern District of Texas approved all motions for bankruptcy relief Sept. 10 for Texans CUSO Insurance Group. The group, a subsidiary of Texans CU, filed for bankruptcy relief under Chapter 11 reorganization on Sept. 5. The group filed its case to resolve temporary operational and liquidity issues. The court granted:
* Approval to pay pre-petition commissions owed to its independent agents; * Approval to remit all insurance premiums to insurance carriers; * Approval to honor pre-petition wages and benefits of its employees; and * Interim approval to use cash collateral. The final cash collateral hearing is scheduled for Oct. 8.
Mike Haselden, group president, said its agents, employees and customers would not experience any interruption in service as the organization works through the Chapter 11 process. Texans CU, Richardson, Texas, has $1.7 billion in assets.

PCUA launches Small CU Network

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HARRISBURG, Pa. (9/17/09)--The Pennsylvania Credit Union Association (PCUA) has launched the Small Credit Union Network (SCUNet) to provide resources specifically for credit unions under $10 million in assets in the state.
Rick Myxter, Pennsylvania Credit Union Association (PCUA) associate vice president, co-chaired a task force that created PCUA’s Small Credit Union Network to help credit unions under $10 million in assets. (Photo provided by the Pennsylvania Credit Union Association)
Under the network, PCUA staff will work with small credit unions to facilitate mentoring relationships between CEOs of small credit unions and credit union professionals in various disciplines. The network was created by a task force appointed by PCUA in May to identify small credit unions’ needs. Cookie Yoder, PCUA director and Pittsburgh FCU CEO, chaired the task force. Rick Myxter, PCUA associate vice president, is co-chair (Life is a Highway Sept. 16). PCUA is asking credit union CEOs to sign a pledge sheet to commit to success working through the framework of “The Seven C’s.” The Seven C’s is an acronym for core areas that the task force identified as critical to credit unions’ success. They are:
* Competent staff; * Committed volunteers; * Communicate credit union value; * Commitment to staff and board education; * Contribute to well-being of membership; * Change and adapt for growth and prosperity; and * Collaboration.

Hartford Healthcare FCU hosts Trinidad CU

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HARTFORD, Conn. (9/17/09)--Hartford (Conn.) Healthcare FCU strengthened its decade-long relationship with the West Indian
Hartford (Conn.) Healthcare FCU employees Karen Viets, standing, and Kim Gavon spent more than a week interning at the San Fernando Community CU in Trinidad in a cooperative international exchange program.
population of the Hartford metropolitan area, hosting more than a dozen credit union visitors Monday from the both the Co-operative Credit Union League of Trinidad and Tobago and Trinidad credit unions. The visitors spent the day touring the Connecticut state Capitol and meeting with representatives of the legislative and executive branches of state government. The West Indian population of the Hartford metro area is the third largest in the U.S. The event was a follow-up to last September when the credit union signed an International Partnership agreement through the World Council of Credit Unions with San Fernando Community CU (SFCCU) of Trinidad, pledging to share procedures, philosophy and staff for the cooperative improvement of both financial institutions. The credit union this year hosted Angelica George, an SFCCU employee, to intern in Hartford for eight days, and also sent Karen Viets and Kim Govan, two Hartford employees, to the SFCCU in Trinidad. Several Connecticut and Trinidad credit unions are in cooperative efforts. “U.S. credit unions are recognizing the importance of making an international connection,” said Carol Bayreuther, president/CEO of
Joy Chance, left, president of the West Indian Foundation of Hartford, chats with Angelica George, an employee of the San Fernando Community CU in Trinidad and an intern at Hartford Healthcare FCU. (Photos provided by Hartford Healthcare FCU)
Hartford Healthcare FCU. “We’re learning to reach out not only locally, but also globally to encourage the strength of credit unions and foster the progress of financial independence of credit union members everywhere.” Hartford Healthcare FCU recently was selected by the West Indian Foundation of Hartford as an integral part of its community, Bayreuther added. Hartford HealthCare FCU has $29 million in assets.

CU System briefs (09/16/2009)

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* DALLAS (9/17/09)--The Environmental Protection Agency (EPA) has recognized Acequia, a business based in Athens, Texas, and its partners and clients for their leadership in water management. Among the partners and clients recognized is $5.3 billion asset Security Service FCU, San Antonio. Acequia was one of six Water Efficiency Leader Award winners in 2008, exceeding expectations in water management based on three criteria: leadership, innovation and water saved. It surpassed its five year goals of sustaining measured water reductions from 20% to 54% across nearly 70 commercial properties. Acequia, the credit union and nine other businesses documented they saved more than 899 million gallons of water in Texas … * MARLBOROUGH, Mass. (9/17/09)--Floyd E. Russell, 50, of Marborough, Mass., has been charged with cashing a dead friend's disability checks and selling the man's van, netting about $25,000 in income, said police. St. Mary's CU, a $509.8 million asset credit union in Marborough, called police after suspecting the fraud. The friend died in September 2008 before the most recent checks were cashed. Russell told police he cashed the checks to finance the friend's funeral. He has been charged with 23 counts of forgery and larceny between October 2009 and May 2009 (TheBostonChannel.com Sept. 15) … * FARMINGTON, Mich. (9/17/09)--LOC FCU based in Farmington, Mich., has added two new programs to its Summer Financial Literacy Program, now in its third year. More than 100 children and teens
Click to view larger image Click for larger view
participated. In addition to its program at the Farmington Library, the $121 million asset credit union, added a program in Hartland. Children ages 7-12 earn play money for attending, participating, and doing homework during the five-week program. They track their earnings on a check register so they will know how much money they have to spend on the last day of class (shopping day). The curriculum includes wants/needs and how to make change, budgeting with jelly beans, the power of marketing, what is a bargain, and putting it all to work--going shopping on a budget. The second program added included the Financial Literacy Camp Reality Check, a one-week program for ages 12 to 18, in which they make and market a product, discuss financial tools and undergo a mock life experience session. (Photo provided by LOC FCU) * PANAMA CITY, Fla. (9/17/09)--Tyndall FCU announced it will make a one-time Community Service Grant to area organizations to improve Christmas for underprivileged children. A total of $25,000 in donations, or $2,500 each, will go to 10 charitable organizations in Northwest Florida and Southeast Alabama. Although the past year has been difficult economically for many families, Tyndall's financial performance continues to be exceptional with net income substantially above its business plan, said the credit union. Every dollar donated will be dedicated to a program to improve Christmas for the children …

Calif. league honors Bay FCU CEO Terry Agius

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RANCHO CUCAMONGA, Calif. (9/17/09)--Communidad Latina FCU CEO Terry Agius and Bay FCU are the 2009 recipients of the first-ever Community Outreach Awards, given out by the California Credit Union League. The award was formerly the league’s Diversity Award. Agius, who also works for SchoolsFirst FCU in Santa Ana, Calif., was the recipient in the individual category, while Capitola, Calif.-based Bay FCU won in the greater than $100 million asset credit union category. The awards are presented by the league’s Community Outreach Committee. The Community Outreach Awards are presented to individuals, credit unions or organizations that have demonstrated an understanding of the importance of credit union membership and financial education, and awareness of diverse and underserved groups within the community. Agius was honored for her successful partnerships with community organizations, her involvement with a new Bank on Santa Ana initiative, and her work in helping Communidad Latina FCU--chartered in 2006--succeed in its mission to provide financial services to people of modest means. Bay FCU was recognized for its breadth of community outreach activities—ranging from its community support team and sponsorships of community events to its youth education program and membership awareness campaigns. Bay FCU and Agius will be honored during the league’s Annual Meeting and Convention Nov. 16-18 in Las Vegas.

Borrowers sue over Huron River real estate deals

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TAMPA, Fla. (9/16/09)--Twenty-eight borrowers from nine states filed a lawsuit Sept. 9 in a U. S. District Court in Tampa, Fla., against Michigan-based Huron River Area CU and several real estate venturers over Florida speculative land deals that contributed to the failures of Huron River, and Norlarco FCU and New Horizons Community FCU. Also named in the suit is Huron River's liquidating agency, the National Credit Union Administration (NCUA). NCUA assumed control of the credit union in February 2007 and liquidated it the following November. It is in the process of trying to collect on loans made by the credit union in the undeveloped Cape Coral and Lehigh Acres projects in Florida. Those developments went bust when the real estate market bottomed out. Among the defendants are Russ Whitney and his firm, the Whitney Education Group, which conducts real estate investment seminars throughout the U.S. under the name "Millionaire University" (MU); Michael O. Kane and Gulfstream Realty; United Mortgage; the Construction Loan Co. (CLC) and other partners. The suit alleges that the defendants worked together in an enterprise to sell, develop, finance, market and manage Florida real estate to and for MU students, who were the targets of the fraud. CLC acted as Huron River's agent for a Florida construction loan program and would close the construction loans and attempt to assign each loan to the credit union. The assignments were allegedly "illegal and void because the plaintiffs were not legal members of Huron River Area CU," according to the complaint filed. The plaintiffs are from California, Florida, Illinois, Maryland, Massachusetts, Minnesota, Michigan, Tennessee and Texas. The case is similar to a lawsuit filed by nearly 60 borrowers in a Circuit Court in Florida, now in U.S. District Court in Ft. Myers, Fla. That suit was filed on July 31, 2007, against both Huron and Norlarco. Although the plaintiffs are different, both sets of plaintiffs are represented by the same law firm, Conwell Kirkpatrick of Tampa, Fla., and many of the allegations are identical. In both cases, plaintiffs alleged violations of the Racketeer Influenced Corrupt Organization (RICO) Act. In July, the Department of Justice, representing NCUA in the case, filed a motion for sanctions against the lawyers and plaintiffs of the earlier lawsuit, asserting that the plaintiffs' RICO claims against Huron River Area CU "had no evidentiary support." No rulings have been made on the sanctions motion. Plaintiffs in the new lawsuit also present as evidence for their arguments a copy of the NCUA Office of Inspector General's Nov. 26, 2008, Material Loss Review of the Huron River Area CU. The report analyzes why the credit union failed and concludes the credit union:
* Did not exercise due diligence by evaluating the third-party relationship held with its lender, CLC; * Allowed CLC to concentrate a majority of the credit union's loan portfolio in the speculative Florida real estate construction project; * Allowed CLC to make construction loans to applicants outside the credit union's approved field of membership; * Misclassified construction loans and violated NCUA's Member Business Loan limits; * Did not have adequate liquidity controls in its asset liability management policy; and * Failed to develop or follow adequate plans to guide the direction of the credit union and the Florida construction loan program.
The report also said management of the credit union was not forthcoming with examiners about the construction loan program and may have ignored warnings regarding the expected decline of housing values, especially those in the Florida market. In the earlier lawsuit, NCUA presented a D'Oench Doctrine argument--that federal common law and the Federal Credit Union Act bar suits and recoveries of this type against NCUA when it is acting as the liquidating agent of a federally insured credit union. On Sept. 3, the judge gave the plaintiffs and defendants 11 days to present the status of their mediation efforts from the case filed in 2007. No ruling has been made yet. In the latest suit, the plaintiff borrowers ask for a jury trial; for the court to declare their loans held by the liquidating agent as illegal and void; and for a judgment that NCUA has no standing to enforce the terms of the loans.

Refinancings boost Georgia CUs loan portfolios

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DULUTH, Ga. (9/16/09)--Georgia credit unions saw a boost in lending, largely due to refinancings, during the first six months of 2009, says an article in The Atlanta Journal-Constitution (Sept. 14). Credit unions in the state reported $2.1 billion in loans originated during the first half of the year, compared with $2 billion for the first six months of 2008. The number of loans dropped slightly but the average loan size rose. Mike Mercer, president/CEO of the Georgia Credit Union Affiliates, said that much of the new business was generated from homeowners refinancing their mortgages. He told the publication the league was "pleasantly surprised that originations have been as good as they have." The article noted that loan volume growth has slowed, and earnings are down by about 50% across the board, with about one-fourth of the state's 168 credit unions reporting a loss over the period. Mercer told the newspaper that credit unions' deposit levels have shot up faster than money can be lent out. Credit unions are parking cash in overnight or short-term investment accounts, which earn far less than the 1% to 2% returns paid on the deposits, and that eats into the credit unions' earnings. Deposits are up about 16% over the same period last year because members are keeping money in their accounts rather than spending or investing. While credit unions' loans were up, the state's banks loan volume dipped slightly, to $207 billion at the end of June. That compares with $214 billion in June 2008.

Auto lending helps Michigan CUs gain popularity

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LANSING, Mich. (9/16/09)--Michigan credit unions saw an 8.5% increase in new auto loans during second quarter, says the Michigan Credit Union League, citing data from the National Credit Union Administration. The increase equals $2.2 billion in auto loan balances as of June 30--a 32% increase in new-vehicle loans over June 2008 (Michigan Monitor Sept. 14). "More than 200 credit unions statewide have stepped in to fill the void in auto lending," said league President/CEO David Adams. "Credit unions are financially stable, increasing members' savings deposits, and supporting their members and Michigan's auto companies by making the loans that put new and used cars on the road," Adams added. He cited credit unions' "Invest in America" program, which "has strengthened credit union relationships with auto dealers and shown the importance of buying American." Used-car loans increased 14% over the period, and small business loans grew about 17%. That momentum continued into the third quarter of 2009, with the state's credit unions increasing their market share of new- and used-car loans from 23% July 31, 2008, to 36% on July 31, 2009. This is the highest market share increase of the 20 most populous states, the league said. On Tuesday, the Oakland Press featured the statistics and Adams' comments, as well as a comment from Claudia York, CEO of Chief Financial FCU, Pontiac, who noted the increase in business in both new- and used-car loans.

PCUA board approves five policies

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HARRISBURG, Pa. (9/16/09)--The Pennsylvania Credit Union Association’s (PCUA) board of directors Friday approved five policies during its Fall Leadership Conference. The association reaffirmed its existing policy to fully defend any adverse tax ruling at all costs--at federal, state, or municipal levels--through the courts or the legislature. The board voted to modify the association’s partnership with the Credit Union National Associations (CUNA) to broaden its education programming. PCUA will continue to promote CUNA education products and services where appropriate (Life is a Highway Sept. 15). The board also voted to continue its iBelong credit union awareness campaign, basing assessments on a three-tier funding option for credit unions that stipulates:
* Less than $20 million in assets--0.10 basis points; * $20-$50 million in assets--0.40 basis points; and * Greater than $50 million in assets--0.60 basis points.
This will result in nearly all credit unions seeing a decrease in their iBelong assessments, PCUA said. The board also approved increased membership fees for all asset categories over $100 million by $1,000 per asset category. Finally, the board agreed to a one-time free trial membership for non-affiliated credit unions, from Oct. 1 through Jan. 31.

Scammers access energy companys account client info

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BRUNSWICK, Maine (9/16/09)--Eastern European scammers used a sophisticated e-mail scam to gain access to a Brunswick, Maine, heating fuel company’s bank account it uses to allow customers to pay for fuel with electronic funds transfers from their checking accounts. The scam has implications for credit unions. The breach of Downeast Energy and Building Supply’s account cost the company roughly $150,000 and exposed checking account information of hundreds of customers, the company said Monday (MaineBusiness.com Sept. 15). The scam began with an e-mail to a Downeast employee that claimed to be from the company’s bank. An e-mail link that seemed to be from KeyBank took the employee to a bogus website that was identical to the bank’s, the publication said. Once the company’s bank-issued user name and password were entered, the information was delivered to the scammers who then used it to steal money from Downeast, MaineBusiness said. Internet criminals are stepping up their targeting of small- and mid-sized companies because they have less sophisticated security than larger companies, a Federal official told the publication. About 87% of data breaches could be thwarted with simple-to-intermediate preventive measures, said a Department of Homeland Security official. Cybercrime has cost the nation nearly $8 billion, U.S. Sen. Susan Collins (R-Maine), ranking member of the Senate Homeland Security and Governmental Affairs Committee, told the committee. Data relating to more than 130 million credit and debit cards have been stolen from corporations, the publication said.

Hampel to IBizWeekI Why inventory is hard to finance

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LOS ANGELES (9/16/09)--Inventory financing will be one of the most difficult things to obtain this year, according to the Credit Union National Association’s (CUNA) chief economist. Inventory financing is hard to get because inventory is basically useless, Bill Hampel told BusinessWeek Friday. “Inventory is, by definition, self-liquidating, extinguishing collateral because if the business does not sell the vast majority of its inventory, it’s essentially worthless,” Hampel said. “For a lot of business lenders, inventory financing is essentially viewed as unsecured lending.” BusinessWeek’s article noted that Josh Lipton, owner of BikeShopHub.com, had received a $32,000 revolving line of credit from Bank of America. BofA cut the line in half this summer. Lipton said he used the credit during the slow season last fall, but paid it off in full in spring. After he paid off the line of credit, he received a note from Bank of America saying he did not qualify anymore for that large of a credit line.

Pittsburgh CUs prep for G-20 Summit impact

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HARRISBURG, Pa. (9/16/09)--The Pennsylvania Credit Union Association held a conference call Monday with credit unions in the Pittsburgh area to discuss preparations for operations during the Group of 20 (G-20) Summit, which will be held Sept. 24-25 in Pittsburgh. The G-20 Finance Ministers and Central Bank Governors was established in 1999 to bring together systemically important industrialized and developing economies to discuss key issues in the global economy. The credit unions shared information and plans. Most of the credit unions are closing or having limited hours during the event. Sandy Shenk, Pennsylvania Credit Union Service Centers Inc. state coordinator, discussed how shared branching really helps during situations such as the G-20 Summit. Nine credit unions participated in the call (Life is a Highway Sept. 15):
* A-K Valley FCU, Lower Burrell; * AT&T Employees Pittsburgh, Pa. FCU; * Clearview FCU, Moon Township; * City Co FCU, Pittsburgh; * Financial Advantage FCU, Homestead; * Pittsburgh Firefighter’s FCU; * P A T A FCU, Pittsburgh; * riverset CU, Pittsburgh; and * Tri-Point FCU, Pittsburgh.

GM expresses appreciation to CUs outlines plans

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LANSING, Mich. (9/16/09)--Management officials at General Motors expressed appreciation for credit unions and their "Invest in America" auto-sales incentive program during a conference call Monday. Mark LaNeve, vice president of sales and marketing for GM North America, told more than 100 credit unions on the call that "Invest in America" is not just a program GM considered when credit was tight, but a critical partnership for the newly restructured automaker. He outlined GM's plan for moving forward and how credit unions fit into that plan. CUcorp CEO David Adams also spoke during the call, describing the partnership as a catalyst to how business can be done in today's economic environment. CUcorp is a service corporation of the Michigan Credit Union League. "This is another positive example of how today's economic climate is creating unprecedented opportunities for credit unions and their members," Adams said. LaNeve explained that 60% of credit union members who requested a GM authorization code for a discount are purchasing the vehicle. The normal rate is about 15% to 20%, and he expressed satisfaction with the credit unions' statistic. LaNeve also pointed out that 66% of credit union members buying a GM vehicle is either a new GM customer or returning after using another company. Credit unions had an opportunity to ask questions directly with GM and give senior management an idea of how the program worked from the credit union perspective. "This meeting was likely the first time that General Motors Corp., the venerable powerhouse in the auto industry, has had a dialogue with some of the largest credit unions in the nation about a partnership," said Adams, adding that CUcorp is committed to being a catalyst for partnership between credit unions and GM. So far, more than 190,000 vehicles have sold under the "Invest in America" program, with credit unions financing more than 150,000 of the sales. This has resulted in new credit union loans of about $3 billion, said CUcorp.

IUSA TodayI Stashing cash Try high-yield CU account

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NEW YORK (9/16/09)--USA Today Tuesday suggested that consumers look to credit unions as a place to stash their cash. Consumers are spending less and saving more, but they should put their money in a place where it can earn interest. The article suggested consumers look into rewards checking accounts with interest rates of 4% or higher, which are offered by some credit unions and banks (USA Today Sept. 15). It also suggested placing emergency funds in a credit union account as opposed to a money market account, which allows consumers to put money they’re planning to invest in stocks or mutual funds. The advantage of placing money in a high-yield account is liquidity--which means consumers can withdraw their money at any time without penalty. “It you’re looking for a place to stash your emergency savings, a high-yield bank or credit union account is a better choice,” the article said. USA Today also reminded readers that deposits in credit unions are backed by the National Credit Union Administration up to $250,000.

Series on CUs appears in Arizona biz mag

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PHOENIX (9/16/09)--Arizona Business Magazine this month published a series of six articles, including three profiles, on Arizona credit unions and their employees. The individuals profiled by the magazine were: Mary Marshall, retired CEO of Alhambra CU, Phoenix; Pat Bodnar, senior vice president of the Arizona Credit Union League; and Robert Ramirez, president/CEO of Vantage West CU, Tucson. The magazine noted:
* Marshall’s commitment to credit unions after a credit union provided needed support to her family when she was growing up; * Bodnar’s enthusiasm for her job at the Arizona league. “I fell in love with credit unions and their philosophy,” she told the magazine; and * Ramirez’s promotion to acting chief financial officer after one day on the job. Six months later, he was challenged to turn around the credit union’s finances. Three months after that, he fulfilled the task and was promoted to chief financial officer.
Arizona Business Magazine also noted the transformation of the Arizona League throughout the decades, Arizona credit unions’ outreach efforts to small businesses, and the league’s partnership to help credit unions in Antigua. To read the full articles, use the link.

CU System briefs (09/15/2009)

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* HONOLULU (9/16/09)--A credit union has apologized to members after sending letters to them with their account numbers displayed on the envelope. Hawaii State FCU said no harm can be done because the account number wouldn't be enough to access an existing account or open a new one. As a test, a local television station took one member's name, address and account number, and tried to create an online account. But since it didn't have her Social Security number, it couldn't open a new account, said the station. The credit union said that members will not be liable for any unauthorized access to their accounts and advised members to monitor their accounts as a precaution (KITV.com Sept. 14) … * ALEXANDRIA, Va. (9/16/09)--More than 225 members of CommonWealth One FCU showed their support Aug. 28 for H.R. 3380, the Promoting Lending to America's Small Business Act. The bill--introduced by Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.)--would raise the cap on member business lending (MBL) to 25% of assets from 12.25% and raise the minimum threshold for a loan to be considered an MBL. The credit union's Legislative Awareness Day at each branch informed members about the bill. Staff used the mycuisme.com Website to help members write their congressional representatives. The credit union will absorb the cost of mailing the letters. "It's great to see members come out and show their support for the credit union movement and exercise their roles as a member-owner," said John R. Blair, president/CEO of the $288 million asset credit union … * INDIANAPOLIS (9/16/09)--Mildred "Millie" South Cox, 69, former Indiana Credit Union League vice president of governmental affairs, died in her sleep Friday, according to the league. Cox was a league employee for 26 years, serving in the governmental affairs position from 1986 until retiring in 2003. That year she was recipient of a Sagamore of the Wabash Award from the late Gov. Frank O'Bannon; a special resolution adopted by the Indiana General Assembly honoring her dedication and efforts on behalf of credit unions; a special resolution read into the Congressional Record by her friend, U.S. Rep. Dan Burton; a resolution adopted by Indiana's credit unions at the 2003 League Annual Meeting, and a national credit union award at the Credit Union National Association's (CUNA) Governmental Affairs Conference (GAC) in 2004. The Indiana Credit Union Foundation established the Millie Cox Scholarship Award, which has helped recipients attend the CUNA GAC each year. "Millie was a tireless advocate, leader, and champion of credit unions throughout her career with the league. Her work in national political circles as well as at the Indiana Statehouse had a very positive impact and will continue to benefit credit unions for years to come," said John McKenzie, league president. She is survived by one son, three sisters, and two brothers. A celebration of her life will be today at 2:30 p.m. at Flanner and Buchanan Funeral Center, Washington Park East, Indianapolis. Visitation will start at 1:30 p.m. * ALBANY, N.Y. (9/16/09)--Alfred J. Mariani, former manager/CEO of Syracuse University FCU and former national director of the Credit Union National Association (CUNA), died Monday. He joined the credit union movement during the late 1940s, serving as treasurer of both Oneida FCU and Bendix FCU before becoming a field representative for the Syracuse chapter of the Credit Union Association of New York. Mariani served in that position for 14 years, organizing more than 100 credit unions from Binghamton to Massena and nurturing them. He also served as association volunteer; president, director and first vice president of the Syracuse chapter; and director-at-large. Mariani also was a founding member of Members United Corporate FCU and a member of CUNA Mutual's Policyowner's Board. He was the association's first two-term president/chairman and was inducted into the New York Credit Union Hall of Fame in 2008. Mariani is survived by one son, one daughter, two sisters, six grandchildren and three great-grandchildren … * ALBANY, N.Y. (9/16/09)--Richard K. Moore, chairman of Reliant Community FCU, died Sunday, according to the Credit Union Association of New York. Moore joined the credit union's board in 1985 and served as board chairman from 1986 until his death. Moore was also a member of the credit union's Supervisory Committee and was active in the National Association of Credit Union Chairmen. In 1997, he received the Certified Credit Union Director designation from the Credit Union Executives Society. Moore was inducted into the 2009 New York Credit Union Hall of Fame last month. He is survived by his wife, two sons, five grandchildren and a sister …

CU System briefs (09/14/2009)

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* ATLANTA (9/15/09)--Two Bulgarian men pleaded guilty to using an ATM skimming device to steal bank debit card numbers and passwords, and tens of thousands of dollars from victims' accounts. Yordan Kavaklov, 29, was sentenced Thursday in a U.S. District Court in Atlanta to four and a half years in prison and to make restitution of $64,876. His co-defendant, Nikolay Nikolov, 23, will be sentenced later this month (Atlanta Journal-Constitution Sept. 10). They were arrested in November at an ATM after people noticed them using multiple cards for withdrawals from adjoining ATMs. They had stolen 80 gift cards with altered magnetic stripes with the passwords written on the face of the cards. Police found more than $57,000 in cash, mostly in $20 bills in their car and hotel room. The men would download information to skimming devices and send it to foreign e-mail accounts in Russia and Bulgaria. They then received information to load onto the magnetic stripes of the gift cards. Bulgarians with similar skimming scams have hit Australia, New Zealand and Greece (The Sofia Echo Sept. 4) … * KINGDOM CITY, Mo. (9/15/09)--A suspect in 14 robberies in six states was arrested Saturday in Kingdom City, Mo., after a former state trooper recognized him from media reports of a bank robbery in Caseyville, Ill., and from the "America's Most Wanted" television show. Chad E. Schaffner, 37, of Indianapolis was captured at a restaurant without incident. The robbery spree allegedly began on May 15 with the robbery of United Service CU in Fletcher, N.C. Schaffner was released from prison in December after serving time for armed robbery. His face also appeared on electronic billboards in Alabama, Kentucky, Georgia, North Carolina, South Carolina, Tennessee, Virginia and West Virginia (Citizen-Times.com Sept. 14) … * DAYTON, Ohio (9/15/09)--Scam artists are sending simultaneous texts scams to family members' cell phones, according to an alert from John North, president/CEO of the Better Business Bureau (BBB). BBB received a call from a woman inquiring about text messages she and her husband received on their cell phones simultaneously from a four-digit number. The texts said, "We found a problem in your credit union account. Call urgently!" and left a number to call. A recorded message asked for a credit card number. The woman called to verify the message with her credit union, Day Air CU, Kettering, and was told the message was a scam. Day Air CU has posted a fraud alert message on its website saying it is not sending out such text messages. It won't ask for personal information via texting because it is not a secure channel for communication … * DETROIT (9/15/09)--Michigan's Metro West Chapter of Credit Unions, a chapter of the Michigan Credit Union League, has raised $14,000 for charities. The chapter's 17th annual golf outing to benefit a variety of charities and organizations was held in August in Northville and attracted more than 140 players. This year's $14,000 raised brings the total raised to more than $65,000 the past five years. All of the beneficiaries for this year's proceeds have not yet been named, said a press release …

N.C. governor signs foreclosure-prevention measure

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RALEIGH, N.C. (9/15/09)--North Carolina Gov. Beverly Perdue signed a new law last week that will give state homeowners a 60-day reprieve before their homes undergo foreclosure (CongressDaily Sept. 14). The law allows a clerk of court to postpone a foreclosure hearing for up to 60 days to allow the homeowner additional time to work out a payment plan with the mortgage holder and to remain in the home. Nearly 40,000 homes in North Carolina have gone into foreclosure during 2009. According to the Center for Responsible Lending, more than 2.2 million North Carolina homeowners will see property values decline during the next three years because of foreclosures in their neighborhood (ConsumerAffairs.com Sept. 14). Perdue said the legislation, which sets new rules for debt collectors, protects both homeowners and the state economy from the effects of foreclosure. The law "makes it easier for homeowners to work out a deal with their lenders and avoid foreclosure," said Perdue.

Regional ad campaign launched in MarylandD.C.

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COLUMBIA, Md. (9/15/09)--The Maryland and District of Columbia Credit Union Association (MDDCCUA) Monday announced the launch of its largest integrated advertising campaign this week, designed to educate consumers about the benefits of joining a credit union. The “What’s in it for me?” campaign touts the products, services, and lower rates and fees offered by credit unions versus those of traditional banks through radio spots, regional transit advertisements and an informational website. It will run throughout the Maryland, Washington, D.C. metro, Baltimore metro and Northern Virginia regions. In addition to the transit and bustail advertisements, the campaign’s radio spots were scheduled to air on regional stations in Washington, D.C., and in Baltimore, starting Monday. “The public has rediscovered how accessible credit unions are, the multiple benefits they afford, and how strongly they have weathered this year’s tough economic climate,” said Michael V. Beall, association CEO. “Over 50 regional credit unions are supporting this campaign as a direct result of the increase in member loyalty they have seen this year, and they want to keep that momentum going strong,” Beall said. “Consumers keep coming to credit unions to meet their needs; they see them as a trusted depository for their savings.” Recent industry data has shown an increase in credit union membership participation nationwide. Specifically, the Maryland, District of Columbia and Northern Virginia regions have experienced increases in:
* Share growths of 9.5% in Maryland and 7.4% in Washington, D.C., from June 2008 to June 2009; * Volumes of loan originations throughout Washington, D.C., totaling 34% for the first two quarters of 2009; and * Number of financial products used per person--2.37 in Maryland and 2.44 Washington, D.C.--compared with the national average of 2.35.
MDDCCUA also is planning other community outreach initiatives to create additional awareness of credit unions among consumers. These include:
* Educational tool kits and other consumer-oriented materials; * A year-round schedule of consumer financial events to be hosted by local credit unions; * Coordination with other regional providers of financial literacy and consumer education to benefit the public; and * Continuous updates via www.WhatsInItForMe.org.

Robbery suspect killed by deputies had toy gun

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SHORELINE, Wash. (9/15/09)--A man who was shot and killed by three King County sheriff’s deputies in the aftermath of a credit union robbery Thursday near Seattle, had pulled a toy gun on the officers. The gun was a replica of a G-26 Glock pistol, which some deputies and officers carry on the job (Seattle Post-Intelligencer Sept. 14). The King County Medical Examiner’s Office identified the dead man as Jason W. Williams, 32, the newspaper said. James Bartlow, 47, was arrested in connection with the robbery of an Alaska USA FCU branch in Shoreline, Wash., according to FBI agent Mary Prewett (News Now Sept. 14) . The FBI believes that Bartlow and Williams committed four bank robberies and one attempted robbery that the bureau attributed to a robber dubbed the “Fashion Faux Pas Bandit.” After Thursday’s robbery, witnesses followed the two men to a parking lot about 10 blocks from the credit union and called in the location to police, the FBI said. When King County sheriff’s officers arrived, they confronted Williams, and three officers fired at him. Williams died on the way to a local hospital, the FBI said. A stun gun was deployed on Bartlow to take him into custody. All three officers were placed on paid administrative leave--standard procedure after an officer-involved shooting, a sheriff’s spokesman told the paper. Alaska USA FCU, based in Anchorage, Alaska, has $3.9 billion in assets.

Cards drive increase in non-cash payments worldwide

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PARIS (9/15/09)--Non-cash payments grew 8.6% to 250 billion transactions in 2007 compared with the previous year, according to the World Payments Report 2009. The use of cards is the single strongest driver for the growth, with global card transactions--credit and debit--growing 14.5% in 2007 and 11.2% in 2008. Markets are dominated by the U.S. and Europe, which account for 61% of the transactions. Developing economies continue to grow steadily, the report said. Non-cash payments appear to have withstood the financial crisis, but 2008 figures will indicate the crisis’ full effect on the market, the report added. The report cited Global Transaction Services (GTS) divisions as a stable and profitable source of revenue for financial institutions amidst weak economic conditions. However, they saw reduced volumes in the first quarter of 2009. GTS accounts for 5% to 20% of group revenues. The World Payments Report studies the resiliency of the payments industry, drawing on 36 interviews from 16 major banks and 20 of their corporate clients. The report was written by Capgemini, a consulting firm; the Royal Bank of Scotland; and the European Financial Management and Marketing Association.

Consumers cut card use turn to CUs CUNA tells IWSJI

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WASHINGTON (9/15/09)--The weekend edition of The Wall Street Journal outlines the "new rules for personal finance," with Credit Union National Association Chief Economist Bill Hampel noting that consumers are turning to credit unions for help. In the article, entitled, "By Choice and By Force, Consumers Cut Back on Plastic" (Sept. 11), reporter Jane Kim recommends credit unions and local banks as a still-accessible source for loans. Revolving credit is declining at an 8% annual rate, which indicates that Americans are ditching their plastic both by choice and by force as issuers tighten up, the article says. "In some cases, consumers are turning to credit unions and their local banks for help," said the article. Through March, loan growth at credit unions--including mortgages, small business and car loans and credit cards--rose 5.8%, compared with a decline of 2.9% for commercial banks, Hampel told the publication.

CU helps with car wash biz classic cars

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PLYMOUTH, Mich. (9/15/09)--A car-wash entrepreneur and classic car collector in the Detroit area has relied on a beneficial relationship with Community Financial Members FCU to fund his business and his hobby.
Ray Hicks, a long-time member of Community Financial Members FCU, stands next to one of his award-winning 1953 Corvettes, which he purchased with a loan from the credit union. (Photo provided by Community Financial Members FCU)
Seven years ago, while checking auto loan rates to purchase a car, Ray Hicks visited a Community Financial branch near his home in Northville, Mich. Remembering the first car he bought more than 30 years before with a credit union loan, Hicks knew that credit union loan rates were usually lower than those of other lenders. “After that visit, not only did I become a Community Financial member and purchase a new Cadillac for my wife, I was able to get a commercial loan to expand my business, Hicks said. “Community Financial also helped me with loans for my classic car collection, including several 1953 Corvettes.” During the past 30 years, Hicks’ car wash business has grown to include nearly two dozen properties throughout metropolitan Detroit--success he attributes to being a hands-on worker. He spent 18 years in a General Motors plant before growing his car wash business. Hicks said these experiences have led him to pay attention to bottom-line details such as loan rates. “I don’t change unless there’s a reason to change,” said Hicks, who describes himself as a loyal credit union member. “When you walk in the branch, everyone calls you by your first name. They also look at your goals and what you’re trying to achieve.” “Ray has the business savvy to leverage his classic car collection and car-wash properties to get the best deal,” said David Sanctorum, Community Financial director of business services. Community Financial Members FCU is headquartered in Plymouth, Mich., and has $455 million in assets.

Banks UW CU discover gold in college students

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MADISON, Wis. (9/15/09)--University of Wisconsin CU (UW CU) was one of several financial institutions that visited the University of Wisconsin campus in Madison, Wis., in hopes of attracting incoming students. UW CU was promoting its student account programs. More than 50% of incoming UW students become UW CU members, and 60% keep their accounts after graduation (Wisconsin State Journal Sept. 12). UW CU is offering students the ability to use their student identification card, the WisCard, as a debit card linked to a UW CU checking account. The credit union has a seven-year agreement with UW to offer the program. UW CU will build a new branch at the university’s second student union, which is expected to open in 2011. Students also can sign up for a “campus package” at UW CU that includes a no-minimum balance checking account, unlimited free ATM transactions, e-mail or text message alerts, and Money Link, which allows anyone to transfer money into a UW CU account from any financial institution, the newspaper said. UW CU also offers financial education to its members. Last year, the credit union provided more than 225 financial seminars that reached more than 5,000 people. Other financial institutions appearing at the University of Wisconsin included U.S. Bank and Associated Bank. Both offer account programs targeting college students and said that students are a major focus of their financial institutions. The Journal also interviewed several university students, asking what they would like from their financial institutions. The students cited credibility, online statements, free checking, credit cards with rewards, and competitive interest rates on student loans.

TJX breach suspect pleads guilty in Massachusetts

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BOSTON (9/15/09)--A Miami man who allegedly masterminded the Heartland Payment Systems and TJX Cos. breaches, which involved hacking activity and credit card fraud, pleaded guilty to charges Friday in the U.S. District Court in Boston. Albert Gonzalez, 28, pleaded guilty to 19 counts of computer fraud, wire fraud, conspiracy and other charges for his involvement in breaches that affected major U.S. retailers, including TJX, OfficeMax, Barnes & Noble, and Boston Market, according to the Department of Justice. According to indictments, Gonzalez and his co-conspirators broke into retail credit card payment systems through a series of techniques including “wardriving” and installing sniffer programs to capture credit and debit card numbers at retail stores. Wardriving involves driving in a car with a laptop computer looking for accessible wireless computer networks of retailers. With these techniques, Gonzalez and his co-conspirators could steal more than 40 million credit and debit card numbers from retailers and sell the numbers. They also engaged in ATM fraud by encoding the data on the magnetic stripes of blank cards and withdrawing tens of thousands of dollars at a time from ATMs, according to the indictments. Gonzalez faces a minimum of 15 years and a maximum of 25 years in prison. He also faces a fine of up to twice the victims’ pecuniary loss or $250,000, whichever is greatest, per count. He is scheduled to be sentenced Dec. 8. Earlier, he pleaded guilty to charges in New York for wire fraud in relation to hacks of the Dave & Buster’s restaurant chain. He faces up to 20 years in prison and a maximum fine of $250,000 for the New York case. Gonzalez also remains under indictment for charges brought in August 2009 by the U.S. Attorney’s Office for the District of New Jersey for conspiring to hack into the computer networks of Heartland Payment Systems and Hannaford Brothers Co. Hundreds of credit unions were affected by the breaches because they were forced to replace many of their members’ credit and debit cards whose numbers were exposed as a result of the breaches.

Prelim hearings begin in Heartland data breach case

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HOUSTON (9/15/09)--Preliminary hearings are underway in the class action suit brought by financial institutions against Heartland Payment Systems, the payments processor that suffered the largest data breach in history last year. More than 30 financial institutions--including several credit unions--from 22 states are involved in the lawsuit, which is different than the class action lawsuit brought by consumers against the Princeton, N.J.-based processor. The breach compromised roughly 130 million credit and debit cards. In June, a Multidistrict Litigation (MDL) panel decided the suits would be heard in Houston (News NowJune 15). Richard Coffman, a Beaumont, Texas-based attorney representing the Pennsylvania State Employees CU (PSECU), Harrisburg, Pa., and Lone Summit Bank, told Bank Info Security (Sept. 9) that a case management conference in August was a "very good one" for the financial institutions. Judge Lee H. Rosenthal of Houston's Southern District Court of Texas held a preliminary case management hearing Aug. 24 and named three co-lead counsel: Mike Cadell of Houston; Joe Sauder of Haverford, Pa.; and Coffman. Also at issue in the hearing was discovery--what Heartland will be required to produce now and what can be deferred to next spring after its anticipated motion to dismiss is argued. Heartland has filed a motion for a stay on all discovery until the court rules on the motion to dismiss. The financial institutions are required to file their amended consolidated complaint by Sept. 23, with Heartland required to file its motion to dismiss by Oct. 23. Briefing on that motion is expected by mid-December. If the case is argued in early January, Coffman said a ruling could be issued shortly after that, BankInfoSecurity reported. Coffman estimated that the number of financial institutions impacted by the data breach is much higher than the 670 institutions listed on BankInfoSecurity's website. He said the list reflects about 20% of institutions that had to replace compromised credit and debit cards and absorb unauthorized charges on their cardholders' accounts. That would bring the total number of institutions affected to 3,350. A third set of cases, involving securities issues, was filed in New Jersey and likely will be consolidated into one court later this fall. The MDL panel will decide those cases in October. Heartland hopes to consolidate them and hear them in Houston as well, Coffman told the publication.

Ga. CU loans save members 70 million

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ATLANTA (9/14/09)--Loans issued by Georgia credit unions saved their members roughly $70 million during the first half of this year compared to banks, according to Georgia Credit Union Affiliates’ (GCUA) Georgia Credit Union Benefits Index. The report serves as a barometer to help Georgia consumers make informed personal financial decisions, GCUA said. “The index shows credit unions saved Georgians more than $138 million on an annual basis from lower interest rates, higher rates on savings and lower fees,” said Michael Mercer, GCUA president/CEO. The loans issued by Georgia credit unions were for consumer purchases, including new and used vehicles, mortgages, home equity lines of credit and credit cards. Other statistics from the report:
* Loans totaled more than $2.1 billion in the first half of 2009; * Average loan amounts were $12,416 compared with $11,557 in 2008; * Higher rates on savings products yielded $32 million in savings for members compared with banks; * Auto loan rates for new cars were 5.54% for 60 months, compared with 7.14% at banks; * Auto loan rates for used cars were 5.71%, compared with 7.74% at banks; and * Average rates for credit cards were 11.7% for credit unions, compared with 12% at banks.
For more information, use the link below to access the GCUA site.

CU System briefs (09/11/2009)

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* TREVOSE, Pa. (9/14/09)--TruMark Financial CU, Trevose, Pa., was recently named as one of the best places to work in Pennsylvania for the large company category. The award recognizes employers that benefit the state’s economy, workforce and business. The awards program is sponsored by the Team Pennsylvania Foundation, the Pennsylvania Department of Community and Economic Development, the Pennsylvania Chamber of Business and Industry and the Central Penn Business Journal. Workplaces are picked as "best places to work" based on policies, practices, philosophies, systems, demographics and an employee evaluation. TruMark has more than $1.2 billion in assets ... * JANESVILLE, Wis. (9/14/09)--The Delavan branch of Blackhawk Community CU sponsored a school supply drive for the Delavan-Darien school district of Wisconsin for the third consecutive year. The theme this year was “Cram the Van.” The credit union garnered enough school supply donations--2,353 items--to fill two vans. Kunes Country Chevrolet/Ford furnished two vans at the credit union to fill with supplies. Two Blackhawk staff members, JoAnne Wilson and branch manager Kelly Herwald, divided the supplies and delivered them to schools. Blackhawk Community CU, Janesville, Wis. has more than $320 million in assets ... * ALBERTA, Canada (9/14/09)--Servus CU of Alberta, Canada, is opening a new branch Sept. 28 and plans to partner with Strathcona County Library (Sherwood Park News Sept. 9). Each time a member under age 18 opens an account at the branch, they can choose a book that the credit union will donate to the library in the member’s name. The partnership is a great lesson for youth to learn about savings, the value of a dollar and how it’s tied to literacy, said Muriel Abdurahman, Strathcona County Library chair. Servus CU also plans to provide a yet-to-be-determined corporate donation to the library. The money will help the library pay for its new location, updating computers and equipment, and programming ...

CU wheelchair robber with hoax bomb to serve 3 years in prison

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MELBOURNE, Fla. (9/14/09)--A paraplegic who attempted to rob Merritt Island Space Coast CU was sentenced to 34.5 months in prison after pleading guilty to robbery charges. The man, Christopher Reed, also was charged with possession of a hoax bomb. Reed entered Space Coast CU Nov. 14 and demanded money after telling employees he had an explosive. Police found him 10 minutes after he left the credit union. Reed told police he had given the cash to two unknown individuals who had threatened him with a gun and told him to rob the credit union (Florida Today Sept. 9). Police found a bottle of vodka in Reed’s wheelchair and money inside his prosthetic leg. Reed had his leg amputated about six weeks before the incident and was taking prescription drugs, the newspaper said. Robbery and possession of an explosive are second-degree felonies and punishable by up to 15 years in prison for each offense. Reed’s plea agreement allowed him to limit his prison term to no more than six years.

Officers shoot and kill CU robber

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SHORELINE, Wash. (9/14/09)--One man was arrested and another shot and killed in the aftermath of a credit union robbery Thursday near Seattle. James Bartlow, 47, was arrested in connection with the robbery of an Alaska USA CU branch in Shoreline, Wash., according to FBI agent Mary Prewett. The dead man was not immediately identified (Associated Press Sept. 11). The FBI believes that Bartlow and the second man committed four bank robberies and one attempted robbery that the bureau attributed to a robber dubbed the “Fashion Faux Pas Bandit.” After the robbery, witness followed the two men to a parking lot about 10 blocks from the credit union and called in the location to police, the FBI said. When King County sheriff’s officers arrived, they confronted a man with a gun, and three officers fired at him. The man died on the way to a local hospital, the FBI said. A stun gun was deployed to take the second man into custody. All three officers were placed on administrative leave, a sheriff’s spokesman said. Alaska USA FCU, based in Anchorage, Alaska, has $3.984 billion is assets.

CUs Project Flipside draws Generation Y

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BUCKS COUNTY, Pa. (9/14/09)--Bucks First FCU has launched “Project Flipside” to attract members of Generation Y to the credit union. Since June 1, Bucks County, Pa.-based Bucks First has opened about 50 new Flipside accounts.
Click to view larger imageBucks First CU launched “Project Flipside” to attract members of Generation Y to the credit union. From left are the Flipside crew members: Alex, Zach and Antonio. (Photo provided by Bucks First CU)
The accounts are available for youth between the ages of 16 and 25, said Hilary Reed, Bucks First vice president of marketing. The account offers a free Visa check card with rewards, no maintenance fees, free checks, online bill pay, online banking, text banking, access to more than 30,000 free ATMs, and refunded non-sufficient funds fees provided the accountholders take a financial class at the credit union. “We deem this project one of the most successful programs we've ever created,” Reed told News Now. “We've been able to reach hundreds of youth as well as parents, from community events to high school classes and college orientations. “You know it's successful when a kid tells their friends about it,” she added. “For us, harnessing the power of word of mouth was a big goal and we feel we've definitely achieved it, and this is only the beginning.” The difference between the project and other programs is that everything ties back to education. For instance, the program offers youth the ability to “flip their fees” by attending a personal financial literacy class to lift their non-sufficient funds fees. During the last class, a credit union representative asked the students how they accumulated their fees, and then talked with them to try and figure out how to save and budget, Reed said. The project also employs the Flipside Crew, which consists of three young individuals who promote the program. The crew has posted more than 80 blogs and made more than 270 Facebook friends. They regularly post videos, including a recent rap video (use the link), that offer educational components. They’ve also attended more than 30 community events to promote the project. Crew members have no hourly requirements, but spend about 15-20 hours per week blogging and attending events. This summer, Bucks First sponsored a concert series at a local mall where crew members regularly appeared. Crew members receive a digital camera, a car to use, and a monthly stipend. To become a crew member, individuals submit a video. They are chosen for their communication skills, video editing skills and personality. The crew works for Bucks First for about one year, and then a new group is chosen. Bucks First researched the project for about one year before launch and executed it with three marketing staff members in-house. It spent very little on advertising. “You don’t need an agency to do this,” Reed said. The project is especially good for small credit unions that can’t afford to hire an advertising agency. Bucks First relied mainly on word-of-mouth advertising and its strong relationships with local schools, including high schools and colleges, she said. The biggest challenge credit unions could face when undertaking a project like Flipside is board approval. “It’s tough to show the return on investment,” Reed said. “But the key is to convince boards that the results show for themselves.” She advised credit unions to be involved with the community, and spread the word by mouth. Even if it takes awhile, the project will come to fruition, she said.

Savings push leads to CUs reviving Christmas clubs

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MADISON, Wis. (9/14/09)--With more Americans increasing their personal savings in a troubled economy, credit unions and banks are helping to revive a concept that was thought to be defunct--the Christmas club account. Holiday savings clubs--along with layaway plans, which also are making a comeback--have once again become desirable to consumers coping with rising unemployment and uncertainty regarding the economy, Steve Rick, senior economist for the Credit Union National Association, told the Associated Press Thursday. “It’s a throwback to a bygone era,” Rick told the news service. “Instead of a general savings account, it’s a way to focus the mind on what you really want to do, just like a college account,” Rick added. Roughly 78% of member credit unions run holiday savings clubs, and interest has spiked this year, Rick told the news service. The clubs most often are offered by credit unions, and small and mid-sized banks, the Associated Press said. For the complete story, use the link.

Heins wins Wegner Award for Lifetime Achievement

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MADISON, Wis. (9/14/09)--Retired CUNA Mutual Group President/CEO Dick Heins will be the 22nd Wegner Award honoree for Lifetime Achievement, bestowed by the National Credit Union Foundation (NCUF). The lasting impressions of Heins are those of being an innovative thinker, independent leader, tenacious motivator, life-long learner and model credit union movement executive, NCUF said. Heins’ award will be one of four awards presented at the 22nd Annual Wegner Awards Dinner hosted by the NCUF on Feb. 22. The dinner will take place on the Monday night of the Credit Union National Association’s 2010 Governmental Affairs Conference. Online registration will be available later this year on NCUF’s website. “Throughout his life, when teaching his students and challenging the credit union community, Dick Heins has pushed us all to see beyond what is there and explore new possibilities,” said NCUF Awards and Recognition Committee Chairman Bob Schumacher. “Dick is one of those unassuming gentleman who believes in ideas, then pushes himself and those around him to make the world a better place.” Among Heins’ achievements at CUNA Mutual:
* Conceived and developed a program so credit unions could write loans for families paying as little as 5% down. Heins’ risk management tool guaranteed lenders the other 15% in case of default. Today, Heins’ invention is known as Private Mortgage Insurance or PMI. * Led the development of a brokerage of insurance products for CUNA Mutual and CUNA Mutual Insurance Society (CUMIS) that broadened the offerings of CUNA Mutual Group and increased collateral protections for credit unions and their members. * Participated in the design and implementation of the original CUMIS Bond to replace the bond program of Employers Mutual. The CUMIS Bond became the fidelity bond coverage for nearly 100% of U.S. credit unions. * Led the development of CUNA Mutual Group’s expansion in delivery of direct response marketed products to credit union members. These products include life insurance, property and casualty insurance, and investment opportunities through joint ventures with large national providers including Capital Holding Group, Colonial Penn, and T. Rowe Price. * Initiated a marketplace internship program to give CUNA Mutual management employees experience working at credit unions.
Heins recognized that as a cooperative insurance provider for credit unions and their members, CUNA Mutual must be actively involved in dealing with challenges and opportunities facing the credit union movement. Practicing cooperative principles including concern for community and member education, Heins helped change credit union history, NCUF said. Some examples include:
* Preserving the independent regulator--When legislative proposals threatened credit unions’ independent regulator, Heins provided financial support that made possible the Operation Grassroots Campaign. Organized by the Credit Union National Association (CUNA) and 50 state credit union leagues, the year-long campaign culminated in more than 15,000 credit union supporters rallying in front of the U.S. Capitol to support preservation of an independent National Credit Union Administration. Had Operation Grassroots not succeeded, losing the independent regulator would likely have led to a merger of the National Credit Union Share Insurance Fund into the now-defunct Savings Association Insurance Fund. * Advancing philanthropy--Heins recognized the need for the U.S. credit union movement to benefit from a philanthropic entity. He was instrumental in creating the National Credit Union Foundation. * Promoting education--Heins also recognized the importance of two educational initiatives that still exist today. He was a strong supporter of NCUF’s Credit Union Development Education program as well as the National Youth Involvement Board. He promoted these two programs because he believed in educating future leaders on credit union philosophy and pooling credit unions’ resources to improve financial literacy of our nation’s youth. * Providing thought leadership--Filene Research Institute’s i3 Group was inspired by a casual comment Heins made, according to Filene Executive Director Mark Meyer. Heins continues to serve on Filene’s Administrative Board as director emeritus. * Strengthening unity--Under Heins’ leadership, CUNA Mutual Group “forged a lasting partnership with the state credit union leagues around the country that continues to reap benefits for credit unions and their members today,” said Susan Newton, executive director of the American Association of Credit Union Leagues. Heins was first to appoint a league research and advisory committee to build and maintain relationships between CUNA Mutual and the leagues. Twice a year, the committee held strategic discussions on credit union issues, which Heins used as a sounding board for new ideas and initiatives. * Rebuilding credit unions--After decades of Communist suppression of the credit union movement in Poland, Heins was involved in supporting the redevelopment of Polish credit unions. He personally donated $40,000 to the Polish credit union community, and worked directly with President Lech Walesa and the new Solidarity-led coalition government to establish a sound framework for Polish credit unions to thrive again.
Heins personally endowed the University of Wisconsin’s Richard Heins Chair of Risk Management and the Eugene Farley League Leadership Award, which is presented annually during CUNA’s Governmental Affairs Conference. This year, Heins contributed another $50,000 to keep the Farley Awards program alive for another 20 years, NCUF said.

US FCU exec flies for veterans

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BURNSVILLE, Minn. (9/14/09)--Bob Stowell, US FCU senior vice president
Click to view larger imageBob Stowell, US FCU senior vice president and chief operations officer, flew his plane with Liz Strohfus, 89, a women’s air service pilot in World War II. (Photo provided by US FCU)
and chief operations officer, piloted his plane over the 2009 Harley’s Heroes ride in Faribault, Minn., this summer. Stowell, a Vietnam veteran and law enforcement official, announced the start of the 75-mile ride from the air. He piloted his plane with Liz Strohfus, 89, a women’s air service pilot in World War II. “I rarely miss a chance to support our men and women in uniform,” Stowell said. “It’s the least I can do for those who have given us so much.” Harley’s Heroes is a national effort, coordinating rides nationwide at more than 175 Harley-Davidson dealerships. The events pay tribute to veterans and those currently serving in the military, police, firefighters or other public servants. US FCU has $802 million in assets.

Business checking survey says CUs have lower costs

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CHICAGO (9/11/09)--Small businesses will find lower checking account costs at credit unions and community banks, according to a national survey conducted by Moebs Services, an economic research firm, based in Lake Forest, Ill. “… Large banks try to protect loss of business, especially small business, and community banks and credit unions try to take as much market share as they can get,” Moebs said (Business Wire via Reuters Sept. 9). Evidence of a potential market move is reflected in the minimum balance to avoid a fee, with the large banks almost doubling from $1,250 in 2008 to $2,250 in 2009, while credit unions and community banks stayed the same at $500 and $1,000 respectively, the Moebs survey indicated. “Main Street institutions definitely offer a better pricing deal than the big Wall Street banks,” Moebs said. “In these hard economic times, businesses should seek the better deal.” For more information, use the link.

CUNA says NCRC report on CU lending flawed

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MADISON, Wis. (9/11/09)--The Credit Union National Association (CUNA) says a National Community Reinvestment Coalition (NCRC) report unfavorably comparing credit union lending practices to that of banks is flawed and should be dismissed by policymakers. The NCRC analyzed Home Mortgage Disclosure Act (HMDA) data for credit unions and banks. The report claims that credit unions lag behind banks on 64% of the fair lending indicators examined and concludes that credit unions should therefore be placed under Community Reinvestment Act (CRA) rules. “While we haven’t concluded our evaluation, it’s clear that the NCRC report isn’t worth the paper it’s printed on,” Mike Schenk, CUNA vice president of economics and statistics, told News Now. There are a handful of obvious fatal flaws in the NCRC analysis, Schenk said. First, NCRC acknowledges but makes no attempt to statistically adjust for the fact that credit unions and banks--from a legal standpoint--cannot serve the same groups of people. “Banks and thrifts can serve anyone. But one-third of credit unions serving 20% of all credit union members have single-group occupational charters,” Schenk explained. “By definition, credit union membership fields cannot and will not perfectly reflect the income or racial make-up of the geographic community in which they are located,” he added. “While it’s true that about one-quarter of credit unions have community charters, many of these institutions have just recently converted to the wider charter. What does the NCRC analysis do to account for these fundamental differences? Nothing.” A second flaw in the NCRC analysis is that it focuses only on “prime” loans--a glaring oversight for a study that presumes to gauge the effectiveness of lending to lower-income individuals, Schenk said. A third flaw is that the NCRC study uses “disparity ratios” to measure lender effectiveness, he said. Disparity ratios are esentially statistics that are attained by dividing a denial (or approval) rate for a target group (e.g., low-income people) by the denial (or approval) rate for all other applicants. “But disparity ratios are a horrible metric--they simply do not measure lender effectiveness,” Schenk added. “For example, using disparity ratios, NCRC’s 2007 analysis finds that banks outperform credit unions in 23 of 42 disparity metrics they published,” he said. “But, the underlying data NCRC used to produce these disparity ratios clearly shows that credit unions outperform banks: it shows that credit unions approve mortgage loan applications at higher rates--usually much higher rates--and they deny applications at lower rates-- usually much lower rates--compared to banks. “This is true in almost every single demographic group analyzed, among every loan type analyzed and across each of the three years of data it analyzed,” Schenk added. Specifically, looking at 2007 approval and denial rates, NCRC data shows that credit unions outperform banks in 64 out of 72 of these metrics--89% of the total, Schenk said. “Of course, NCRC benefits directly and indirectly when it increases the number of institutions that are subject to CRA,” Schenk explained. “Many of its member organizations receive significant funding from banks as part of the banks’ CRA investment obligations. In addition, the NCRC has formed a strategic partnership with the nation’s ‘top banks.’ “It would not surprise me if these considerations influenced the study’s methods and conclusions,” he added.

MACUA CEO resigns

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BISMARCK, N.D. (9/11/09)--Tony Richards, president/CEO of Mid-America Credit Union Association (MACUA), has resigned, effective immediately. The MACUA board plans to explore a full range of options in searching for a successor. In the interim, Stephanie Merrill, vice president of human resources and administration; Karla Clark, chief financial officer; and Jeff Olson, political affairs and public relations director; will assist in overseeing the operations of the association. Headquartered in Bismarck, N.D., MACUA serves 86 credit unions in North and South Dakota, with 422,000 members and assets of more than $3.8 billion.

Federation graduates 13 students at CDCU Institute

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MADISON, Wis. (9/11/09)--The National Federation of Community Development Credit Unions recently celebrated the 10th anniversary of its Community Development Credit Union (CDCU) Institute with the graduation of 13 students in the Institute's ninth graduating class Aug. 14, in Madison, Wis. Developed in partnership with Southern New Hampshire University's School of Community Economic Development and with support from the Credit Union National Association (CUNA), the CDCU Institute is a training program for the board and staff of CDCUs and other credit unions interested in serving low-income and underserved communities more effectively. "The current economic environment has been especially challenging for credit unions serving low- and moderate-income people,” said Pamela Owens, Federation director of education and training. “With credit union resources stretched to the limit, it will be the best trained credit unions that are able to take advantage of the growth opportunities around them.” This year’s graduates include:
* Cecil Anderson, Central Oklahoma FCU, Davenport, Okla.; * Kathie Black, Inspire Community Development FCU, Battle Creek, Mich.; * Winston Brumfield, AME Church FCU, Baton Rouge, La.; * Thom Dellwo, Cooperative Federal CU, Syracuse, N.Y.; * Nathan Farrior, Generations Community CU, Durham, N.C.; * Cindy Harrison, Straits Area FCU, Cheboygan, Mich.; * Brenda Kyser, Triumph Baptist FCU, Philadelphia, Pa.; * Vanessa Lowe, National Credit Union Administration, Alexandria, Va.; * Regina Martin, AME Church FCU, New Orleans, La.; * Frances Morris, Citizens Choice FCU, Natchez, Miss.; * Permelia Murphy, Citizens Choice FCU, Natchez, Miss.; * Stacey Woiderski, Straits Area FCU, Cheboygan, Mich.; and * DeAndre L. Zachery, Shreveport FCU, Shreveport, La.

Michigan CU loan business fueled by autos

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LANSING, Mich. (9/11/09)--Michigan credit unions experienced growth in the auto-lending market with an 8.5% increase in new loans in the second quarter, which equates to $2.2 billion in auto-loan balances as of June 30, according to the Michigan Credit Union League (MCUL). This represents a record 32% increase in new-vehicle loans from June 2008 to June 2009. The growth coincides with the launch of the “Invest in America” program in December, which offers credit union members discounts on select General Motors (GM) and Chrysler products, and low-cost financing. The “Invest in America” member discounts are helping the domestic automakers during a critical time when credit is tight. It’s also helping to promote “buy American” which is on the minds of most Americans right now, MCUL said. “More than 200 credit unions statewide have stepped in to fill the void in auto lending,” said David Adams, MCUL CEO. “Credit unions are financially stable, increasing members’ savings deposits, and supporting their members and Michigan’s auto companies by making the loans that put new and used cars on the road. “The ‘Invest in America’ program has strengthened credit union relationships with auto dealers and shown the importance of buying American,” he added. “This is not just about market share; it’s about credit unions helping the auto industry, jobs and our economy.” “Invest in America” has facilitated more than 190,000 new-vehicle purchases for GM and Chrysler nationwide since January. The program has resonated with Michigan car buyers as the Detroit automakers work to reestablish market share, the league said. By offering a discount on a new GM or Chrysler vehicle, the program encourages Michigan’s 4.4 million credit union members to buy American-made products and support local jobs. By offering lower rates than competing lenders, the program prompts members to finance their purchase through their credit union. The average new-car loan rate from a credit union is lower--at 5.8%--than bank rates at 7%, according to Datatrac July 2009 data. Used-car loans increased 14% from June 2008 to June 2009, and small-business loans grew 17% over the same time period. The momentum continued into the third quarter of 2009, as Michigan credit unions increased their market share of new- and used-car loans to 36% on July 31 from 23% on July 31, 2008. This is the highest market-share increase of the 20 most populous states, the league said. Reflecting the trend in the broader economy, credit union savings deposits grew by 2.5% in the second quarter. This represents the strongest growth rate in six years. Overall credit union loans also are on the rise with an increase of 1.6% in the second quarter. This represents a 12-month growth rate of 5.8%--the highest since 2005.

SECU gives 250000 challenge grant to library

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RALEIGH, N.C. (9/11/09)--State Employees’ Credit Union (SECU) members via the SECU Foundation have given a $250,000 challenge grant to a library in Jackson County, N.C. The grant will allow the Friends of the Library to complete the fundraising goal needed for the construction of the 20,000-square-foot library, which will be located next to the recently restored, historical Jackson County Courthouse. The SECU Foundation partnered with the non-profit Friends of the Jackson County Main Library to provide services to citizens in Macon, Swain and Haywood counties. The complex also will benefit the local university and community college and other regional libraries. “The $250,000 challenge grant is a strong incentive for our community to reach the $1.6 million we need to complete the new library complex,” said June Smith, Friends president. “For every dollar given to the New Library Fund, the SECU Foundation will match it up to $250,000.” SECU, located in Raleigh, N.C., has $18 billion in assets.

Today is the last day for early-bird ICU Day pricing

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MADISON, Wis. (9/11/09)--Today is the last day for credit unions to receive early-bird pricing on International Credit Union (ICU) Day materials. ICU Day, which will take place Oct. 15, was established by the Credit Union National Association (CUNA) in 1948 to celebrate the international credit union movement. This year’s theme is “Your Money, Your Choice, Your Credit Union.” Credit unions can order materials such as posters, balloons, pens, buttons and shirts to celebrate ICU Day. Several credit unions have shared their ICU Day plans:
* Ever-Green CU in Liberia, West Africa, will celebrate ICU Day with a membership drive, clean-up stress campaign, and a lecture on what makes credit unions different from other financial institutions at local schools; * Seattle Metropolitan CU in Washington will hand out “Intentionally Left Bank” shirts for its “Intentionally Left Bank” marketing campaign; * Wichita FCU, Kan., will have its annual picnic. Employees will wear ICU Day buttons and give away Skittles candy; and * Good Shepherd Parish CU in Ghana, Africa, will host an educational campaign to attract more members. The credit union also will have clean-up activities in conjunction with the youth of Good Shepherd Catholic Church in Ghana.

Fire damages new Bellco CU building

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DENVER (9/10/09)--A fire that started on Sunday night damaged a new branch site of Bellco CU in Grand Junction, Colo., according to local media. The fire started in an air conditioner on the roof of the building. A passing motorist saw the flames around 11:30 p.m. Sunday night and called the fire department. The Grand Junction Fire Department was able to put out the fire before it caused serious damage (Grand Junction Daily Sentinel Sept. 7). The credit union building was being remodeled from a restaurant during the past three months, but will open on time despite the fire, said Nancy Hill, vice president of Bellco’s Western Slope branch. The credit union’s interior was not affected and there was no smell of smoke. Damages are estimated at $100,000, but the estimate may be high, the newspaper said.

SECU partners with others to fight foreclosures

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RALEIGH, N.C. (9/10/09)--State Employees’ Credit Union (SECU) and its members are partnering with the Center for Responsible Lending, the North Carolina Commissioner of Banks (NCCOB) and Capital Broadcasting Corporation to launch a major media effort to reach homeowners at risk of foreclosure. The “Fight NC Foreclosure” campaign aims to educate the public on the foreclosure crisis and provide guidance on where to turn for help. The campaign will include repeated public service announcements (PSAs) on prime-time television, combined with a visible presence on a website. “Fight NC Foreclosure” is set to launch with a press conference Tuesday and run through December. The PSAs will highlight the State Home Foreclosure Prevention Project, bringing North Carolinians an awareness of resources available to prevent foreclosures. The project aims to increase the percentage of North Carolina homeowners who save their homes, and also prevent consumers from becoming victims of foreclosure scams, especially scams affecting those with subprime mortgages. While the credit union has never, and will never, originate subprime loans, SECU, as a non-profit cooperative, feels strongly about helping North Carolinians who may be in subprime situations, SECU said. And, SECU will assist its own members who have experienced loss of income in recent months, the credit union added. In February, SECU launched a Mortgage Assistance Program (MAP), which offers members an opportunity to meet in person with a senior officer of SECU and develop an individualized financial plan if members have concerns about future payments on their SECU mortgage. Options in MAP include mortgage loan extensions, mortgage loan modifications or refinances, and partial payment alternatives. Budgeting, financial counseling and overall debt restructuring are also part of the MAP initiative--free to the SECU membership. “Based on our most recent data, we estimate that one out of every 12 mortgage-holders in North Carolina will face foreclosure between now and 2013 unless drastic steps are taken to reverse the trend,” said Susan Lupton, senior policy associate with the Center for Responsible Lending. “The ‘Fight NC Foreclosure’ outreach campaign will hopefully make a tremendous difference in educating those who desperately need the help to stay in their homes. We are extremely pleased to have SECU as a partner on this campaign.” Mark Pearce, NCCOB deputy commissioner added: “Foreclosures don’t have to happen. Even if our state’s citizens have experienced hard times, they may be able to keep their home if they take advantage of available resources. The state of North Carolina has a network of free counselors and partners like SECU, who have processes in place to help homeowners avoid foreclosure.” “SECU understands the importance of helping members improve their financial lives--it’s the mission of SECU and goes hand in hand with the ‘People Helping People’ philosophy of the Credit Union,” said Phil Greer, senior vice president of SECU’s Loan Administration department. “And even if our cooperative was not part of the subprime debacle, we must help to educate all North Carolinians on the resources available to them during these difficult economic times. “The ‘Fight NC Foreclosures’ campaign is a great way to get the word out to all North Carolinians, letting them know of available assistance,” he added. “We strongly encourage all SECU members who are struggling with possible foreclosure or loss of income to reach out to the Credit Union. We’re here to help.”

Wash. league commends TARP special inspector

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FEDERAL WAY, Wash. (9/10/09)--The Washington Credit Union League last week commended the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), Neil Barofsky, for asserting his office’s autonomy from the U.S. Department of Treasury, in tracking money spent to bail out the financial system through TARP. The letter called the move “essential” to investigations and audits of the biggest bank bailout in history. The letter was written on the heels of Treasury withdrawing a request to the Justice Department that sought a legal opinion on how much independence is given to the Special Inspector General, who tracks money spent through TARP to bail out the financial system. “The stand taken by the Special Inspector General is important for institutional independence as industry leaders devise a plan for prosperity in the 21st century,” said league President/CEO John Annaloro. Meanwhile, Barofsky told members of Congress in a letter that Treasury’s withdrawal of its request for an opinion is acknowledgement of SIGTARP’s independence. The letter to Barofsky also conveyed appreciation from Washington credit unions for the achievements made to date and also the important role the Special Inspector General is fulfilling in the administration of the U.S. government’s efforts to rebuild the financial sector.

Mich. league-backed fin-lit bill passes state House

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PLYMOUTH, Mich. (9/10/09)--A bill that would allow Michigan high school students to take a personal finance course in place of a second algebra class passed the Michigan State House Sept. 3. The bill is backed by the Michigan Credit Union League. The bill, sponsored by State Rep. Joel Sheltrown (D-West Branch), would allow students to replace the required second algebra class with a personal finance course. The bill opens the door for young people to receive lessons in money management, the league said (Michigan Monitor Sept. 8). High school students in Michigan must complete algebra I, geometry, algebra II and another math credit to graduate. Last year, a law passed to allow a personal finance course to count as the fourth math credit. Sheltrown’s legislation takes the change one step further, the league said. “We’re hopeful the Senate will move their version of the bill and that it will ultimately land on the governor’s desk, so more students can have the option of receiving money management skills that will be necessary as they get older,” said Marcia Hune, league vice president of government and public affairs. A Senate version of the bill, sponsored by State Sen. Wayne Kulpera (R-Holland), is on the Senate floor.

Ensweiler wins Wegner Award

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FARMERS BRANCH, Texas (9/10/09)--Texas Credit Union League President and Credit Union Development Educator Dick Ensweiler will receive the 2010 Wegner Award for Individual Achievement at this year’s Credit Union National Association (CUNA) Governmental Affairs Conference (GAC). The award will be one of four presented at the 22nd Annual Wegner Awards Dinner hosted by the National Credit Union Foundation (NCUF) Feb. 22. The gala will take place at the Grand Hyatt Washington on the Monday night of the GAC. Ensweiler embodies timeless qualities of U.S. credit union movement founder Ed Filene, who always urged credit union advocates to “Keep purpose constant,” said NCUF Awards and Recognition Committee Chairman Bob Schumacher. “Dick Ensweiler is a rare individual who has kept his purpose constant while advancing his career all the way from a teller at a small credit union to the chairman of our largest trade association,” Schumacher reflected. “Every organization Dick has touched has grown to become more successful. His secret to success is simple: Live the credit union philosophy of ‘people helping people;’ practice all seven cooperative principles; and always act in the best interests of your members.” “I have seen Dick’s Midas touch at work many a time,” observed Harriet May, president/CEO of Greater El Paso’s CU. “Dick came to the Texas Credit Union League at the lowest point in its history. Not only did Dick restore trust and belief in the organization, he took it to new levels of respect and admiration within the credit union movement. “His strategy: Continue to share and live the vision of the credit union movement; exhibit strong, tireless, and inspiring leadership; and get people involved at all levels,” she added. Ensweiler has been involved with:
* American Association of Credit Union Leagues; * Credit Union House; * Credit Union Legislative Action Council; * CUNA; * CUNA Mutual Group; * CUNA Strategic Services; * Illinois Credit Union Foundation; * Illinois Credit Union League; * Illinois Youth Involvement Council; * League InfoSight; * Michigan Credit Union League; * Minnesota Credit Union League; * NCUF; * Southwest Corporate FCU; * Southwest CUNA Management School; * Texas Credit Union League, and; * World Council of Credit Unions (WOCCU).
He also helped advance many programs, including:
* Credit Union Development Education, NCUF’s program that trains credit union leaders to leverage the cooperative business model as a competitive advantage; * Image Survey, the Texas CU League’s benchmark/planning tool to improve services based on members’ needs; * International Remittance Network, WOCCU’s affordable alternative to expensive country-to-country wire transfers; * Juntos Avanzamos (Together We Advance), the Texas CU League’s program to help credit unions reach first-generation immigrants; * Loss Avoidance Alert System, the Internet application that informs credit unions with near-immediate updates on fraud and other illegal financial activities; * Members Financial Services Network, CUNA Mutual Group’s comprehensive investment management program; and * Richard L. Ensweiler Fund, a special community investment fund that pools dividends to educate early-generation Hispanics about the benefits of credit unions.

Southeast Corporate CEO will retire in 2010

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TALLAHASSEE, Fla. (9/10/09)--Southeast Corporate CEO Bill Birdwell announced he is proceeding with plans to retire when he turns 65 in February. “Together we have built a solid management team at Southeast Corporate and they demonstrate to me and to members every day their high level of commitment and knowledge,” Birdwell’s said. “I am very proud of them and I know your needs will continue to be well-met.” “Finding a replacement for [Birdwell] has been a work in progress,” said Southeast Board Chairman Tim McMurry, who reported that a search is actively underway to find his replacement. McMurry called Birdwell a “true craftsman” of corporate credit unions with a deep devotion to the credit union movement. Birdwell’s more-than-30-year’s tenure in the credit union movement also includes service at Southwest Corporate, WesCorp and Volunteer Corporate. “His leadership within the industry has had a positive impact and will be sorely missed,” McMurry said. The right replacement will be capable of positioning Southeast Corporate to continue to serve credit unions in the future, McMurry said. The board is reviewing candidate qualifications and hopes to make a decision by year-end.

Mystery shopper scam victimizes Pa. CU member

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LANCASTER, Pa. (9/9/09)--A Lancaster (Pa.) Red Rose CU member became a victim of a mystery shopper scam that reportedly took his name from information provided to an online job search database. The individual received a letter from FreePayingSurvey.com of Wichita, Kan., which included a check for $2,960.50, and instructions to deposit the check into its account and get “trained in financial transaction by sending an international Western Union transfer (of $2,320) to our training agent: Rachel Thomas in Valencia, Spain.” A Western Union service fee was listed at $140 (Life is a Highway Sept. 8). The letter also instructed the recipient to spend $50 at two of the listed retail locations, and offered a rate of $100 per hour for four hours of evaluations (mystery shopping). It is unfortunate that the member--who is unemployed--fell for this scam, and as a result, now has a negative balance, Dave Kilby of Lancaster Red Rose CU, told the Pennsylvania Credit Union Association.

Half of parents confident about youths financial skills

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WASHINGTON (9/9/09)--About half of parents say their children will leave home knowing how to manage money, according to the results of a Consumer Federation of America (CFA) survey. During a press briefing Tuesday, CFA presented results of a survey it conducted Aug. 27-31 of 553 representative parents, or guardians, with children under age 18 living at home. About 53% of parents said they were “very confident” their children would leave home with personal financial skills. Nearly all parents surveyed--98%--said they felt “very” or “somewhat” responsible for teaching their children how to manage money and credit. Roughly 86% said they felt “very” responsible. However, only 73% said they felt capable of instructing their children how to manage money, CFA said. Jim Hanson, vice president of the Credit Union National Association’s (CUNA) Personal Finance department, said there is a disconnect between the fact that only half of parents surveyed are confident their children will leave home with money skills, yet almsot all parents think it is their responsibility to teach money management skills. “That’s why credit unions stepped to the forefront of financial education so long ago,” Hanson told News Now. “Teaching young people about the value of money, how to save, spend and borrow wisely can't start too young.” Phil Heckman, CUNA director of youth programs, agreed. “Parents have a unique opportunity to influence the lifetime money management habits of their children by intervening early,” Heckman said. For instance, it’s easier to guide preschoolers to make good decisions about small amounts of money than it is to correct bad spending habits and saving ignorance of teenagers. “By starting young, parents can learn with their children, and become personal finance experts in the process,” he added. Heckman suggested that credit unions should offer to help parents become good financial role models for their children. “Parents who might otherwise deny they need money-management help are willing to seek it for their children,” he said. “By training them to teach their own kids at home, credit unions can kill two financial literacy birds with one educational stone.” The CFA also released the top 10 myths held by 14- to 21-year olds:
* I don’t have to worry about credit at my age; * Bad credit can’t keep me from getting a job; * All loan companies have the same rates; * All credit cards are alike; * The job of financial advertising is to tell the truth; * It’s OK to bounce a few checks; * It’s OK to make minimum payments on a credit card; * Paying late occasionally can’t hurt my credit; * Fine print isn’t important; and * Young people don’t have credit scores.
CFA noted the struggles Rachel Silverman, 25, encountered when she attended music school at New York University. She racked up $130,000 in credit card and student loan debt, and is now struggling to keep her dream alive of being an opera singer, CFA said. “It was terrible,” Silverman told CFA. “I wasn’t sure what I was getting into.” No one, including her teachers and parents, prepared her how to manage credit and debt, she said. “I probably wouldn’t have been in this situation if I had simply known the basics about credit cards, student loans and interest calculations,” Silverman said. “In hindsight, I was like a lamb being led to slaughter.” Also at the press briefing Tuesday, CFA announced the resources available through FoolProofMe.com, a website that offers free online tutorials to high school and college-age individuals about money management. Will deHoo, 29, who founded FoolProofMe.com, said he recently spoke to a group of 60 seniors at the University of Colorado. One of four students said they knew poor credit could affect their job opportunities, and only three out of 60 knew their credit score. They said they had bounced checks and were borrowing on one credit card to pay another, he said. Many young individuals had missed out on financial education because the medium in which the education was offered did not engage them, deHoo said.

CU System brief (09/08/2009)

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* DENVER (9/9/09)--Two Colorado credit unions have announced plans to merge (Boulder Daily Camera Sept. 4). Premier Members FCU, Boulder, and Colorado United CU, Denver, plan to combine with an expected closing date of Jan. 1. The resulting credit union would be Premier Members CU with $400 million in assets and 11 branches, the newspaper said. All jobs will be protected for one year, and no locations are expected to close, Rhett Bartley Rowe, CEO of Premier Members, told the newspaper. The merger will help Premier Members expand to northern Denver. Colorado United members also will receive more services, Rowe said. Colorado United’s CEO Branda Abbott will remain as president/CEO ...

Former CU exec commits suicide during arrest

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MACON, Ga. (9/9/09)--A former manager of a Georgia credit union committed suicide when local authorities tried to arrest her on charges of embezzlement. Linda Rice, 57, was accused of embezzling more than $354,000 from Brosnan Yard FCU from June 2007 to December 2008. She worked at Brosnan Yard CU as a director, loan officer and manager. The missing funds were discovered during an audit (Macon.com Sept. 5). The money had been taken through fraudulent loans, misplaced credit union assets and check fraud, the newspaper said. Rice shot herself after Jones County Sherriff’s deputies entered her Gray, Ga., home Aug. 20. A deputy had been following her as she went to get a pair of shoes, but she ran away from him and locked herself in a room where she killed herself, the newspaper said. Brosnan Yard FCU, Macon, has $4.4 million in assets.

Texans CUSO Insurance Group files for bankruptcy

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RICHARDSON, Texas (9/9/09)--Texans CUSO Insurance Group, a subsidiary of Texans CU, filed for bankruptcy protection under Chapter 11 on Saturday in the U.S. Bankruptcy Court for the Northern District of Texas. The group filed its case to resolve temporary operational and liquidity issues, according to a press release. “The policyholders of Texans CUSO Insurance Group will not be affected by the filing,” said Michael Sauer, president/CEO of Texans CU. “The filing will not impact any credit union member accounts or services.” Texans CU, based in Richardson, Texas, has more than $1.7 billion in assets.

National publications say get credit cards at CUs

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MADISON, Wis. (9/9/09)--The Los Angeles Times and USA Today mentioned credit unions as a good place for consumers to obtain credit cards. Credit unions are a potential source for low-interest-rate credit cards because they made “fewer costly mistakes in the credit heyday and now have money to lend,” said personal finance writer Kathy M. Kristof in the Sunday Los Angeles Times. Kristof also directed readers to check the Credit Union National Association’s site, www.creditunion.coop, to locate a credit union in their area. In an article about how college students can build a credit history amidst new federal legislation that restricts marketing of credit cards to those under the age of 21, USA Today financial columnist Sandra Block told readers Tuesday that “many credit unions offer secured credit cards with lower interest rates and fees.” To read the stories in their entirety, use the links.

Hamburger stand built with CU financing

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PLYMOUTH, Mich. (9/9/09)--After years of crossing the U.S. in search of a diner, long-time restaurateur Alex (Vinnie) Altier located a 1955 Kullman diner for sale in Atlantic Highlands, N.J. His next challenge was finding the right piece of property to build his hamburger stand. That’s when Community Financial Members FCU stepped up to help.
Click to view larger image Dave Sanctorum of Community Financial Members FCU Business Services, Plymouth, Mich., congratulates Alex (Vinnie) Altier, at right, on his 1955 Kullman diner that will be refurbished and renamed “Vinnie’s Hamburger Stand” when it is moved to its new location in Canton, Mich. (Photo provided by Community Financial Members FCU)
The land Altier wanted was in Canton, Mich., only a few blocks from a former Vinnie’s Italian Sub Shop. The site was owned by Community Financial, the $54.5 million asset, Plymouth, Mich.-based credit union that had opened a new Canton branch office. When Altier met with Community Financial to inquire about purchasing the adjacent acreage, he was unfamiliar with credit unions or the services they offer. One of Altier’s first questions was, “Do you make commercial loans?” When he learned that credit unions can finance members’ commercial mortgage and business loans as well as personal loans, Altier decided to become a member. “When we learned about Vinnie’s dream of purchasing the land and building a hamburger stand that included the stainless steel diner, we were intrigued,” said David Sanctorum, Community Financial director of business services “We help a lot of members who are small business owners, but this was not your conventional transaction.” Sanctorum and other credit union team members assisted Altier with the necessary paperwork to finance the purchase of property and building construction, and to also obtain a personal home equity loan on his house in Livonia, Mich. Altier described the entire financing process as very smooth and without all the red tape he had experienced in past years with other financial institutions. “When I walk into the credit union’s offices, I can immediately tell that people enjoy their jobs, and I always receive exceptional service,” added Altier. “In my business, I hire an attitude, because I can teach the rest.” Since the ground for “Vinnie’s Hamburger Stand” was broken in July, Community Financial members and employees of the nearby branch have been watching the construction progress. The diner, which remains in storage at another location, is scheduled to be moved to the site in the fall and added to the front of the building after construction is completed. Altier, a lifelong Michigan resident, has been asked what prompted him to open a new business in such a tough economy and quickly responds, “You can’t wait for your ship to come in. You have to swim out to it. I’m not participating in this economy." “Community Financial is well-positioned to arrange financing for small business owners like Altier,” Sanctorum said. “We do our best to provide personalized service and find a way to help them achieve their goals.”

Contactless debit mobile use aim to attract members

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BOSTON (9/8/09)--Attracting new members, especially younger ones, remains a critical challenge for more than half of credit unions, says a recent study. As a result, some credit unions are altering their marketing strategies and testing products such as contactless debit cards and mobile banking services. More than 55% of credit unions have trouble attracting new members, according to a report by Boston-based Aite Group LLC. They are testing innovative products in hopes of attracting Gen Y consumers--the 76 million consumers ages 29 to 33 (ATM & Debit News Sept. 3). In January, PSCU Financial Services, a credit union service organization (CUSO), launched its contactless debit card a week after it announced it would resell mobile-banking services to its member credit unions. More credit unions may choose to convert to contactless debit cards now that huge merchants such as Best Buy and Home Depot accept their payments, Ron Silvia, PSCU director of debit and ATM product services, told the publication. Like PIN-debit, contactless cards have started out slow because of the investment. But once the return on the investment is realized, merchants seem to be moving swiftly to them, said Silvia. Gen Yers would like contactless payments because they like instant gratification. When they check out, they want to do so fast, Silvia said. CO-OP Financial Services recently signed partnership agreements to promote mobile banking--something that is popular with Gen Yers--to the credit unions it serves. CO-OP told ATM & Debit News that credit union services need to be more relevant--credit unions can't be the parents' credit union and stay relevant to the Gen Yers. CO-OP is also piloting contactless debit card products with two credit unions and has the infrastructure to process such transactions, said Kim Hester, CO-OP Financial executive vice president of network services. According to Aite, credit unions studied say they are increasing their social networking marketing through Facebook and Twitter to attract new members. Eighteen percent of credit unions surveyed said using social networking was a high priority, while 32% said they were considering it.

CUNA Mutual acquires crop insurer

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MADISON, Wis. and AMARILLO, Texas (9/8/09)--CUNA Mutual Group announced today it has reached agreement with Producers Ag Insurance Group (ProAg) to become sole owner of the multi-peril crop insurer, serving farmers and agricultural producers nationwide. CUNA Mutual said the acquisition with the Amarillo, Texas-based insurer will:
* Support CUNA Mutual’s growth strategies and diversify the risk the company insures; * Enhance CUNA Mutual’s flexibility and financial strength while enabling ProAg to continue to expand its business; and * Support ProAg’s growth objectives. ProAg will operate as a stand alone subsidiary of CUNA Mutual.
“This acquisition builds on the initial investment we made in ProAg in 2007,” said Jeff Post, President /CEO, CUNA Mutual. “It in no way affects our commitment to credit unions. For us to continue to strengthen and diversify our financial position, we need to identify new avenues for growth. “In looking for new opportunities to build on our expertise and continue to strengthen our financial position, crop insurance and our recent acquisition of CPI Qualified Plan Consultants were natural fits,” added Post. “These acquisitions build off our core competencies, help diversify our business, and provide revenue streams that give us flexibility to invest and grow in the future.’’ CUNA Mutual noted its relationship with ProAg began in 2006 when it began serving as the lead reinsurer for ProAg as a direct writer of crop insurance. In 2007, CUNA Mutual acquired a minority ownership position in ProAg. During its partnership with CUNA Mutual, ProAg since 2006 has grown from a 70-employee company doing business in 25 states to a 400-employee company serving more than 40 states. ProAg is on pace to generate more than $530 million in premium in 2009, CUNA Mutual said. “ProAg has been the fastest-growing crop insurer this decade,” said ProAg Chairman/CEO Ben Latham. “CUNA Mutual’s support of our growth as a reinsurer and minority shareholder, as well as their commitment to our way of doing business, makes them the natural provider of the institutional support we need to reach our goals of becoming a market leader.” Crop insurance protects farmers from financial losses that result from natural causes such as drought, excessive moisture, hail, wind, frost, insects and disease. Multi-peril crop insurance is an $8 billion industry in the U.S.

Lockheed L.A. Police collect contributions for fire victims

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BURBANK, Calif. (9/8/09)--Lockheed FCU announced that its branches in Southern California will accept contributions to help the Fire Family Foundation until Friday. The collection will help families of two firefighters who were killed Sunday while fighting wildfires in California. L.A. Police FCU, Los Angeles, is also accepting contributions to the fund. The firefighters are Arnaldo Quinones, 35, and Tedmund Hall, 47. Lockheed will give $1,000 to the fund. Members can donate money at any of the credit union’s 10 branches. The Fire Family Foundation (FFF) announced Friday that funds are being made available to assist the victims of the fires. “When you have lost everything, assistance in any amount helps the victims get back on their feet. Firefighters support our communities every day, and now is the time to support them and the victims who have lost their homes and belongings,” said FFF Board Member Pat Engel. On Friday, Bloomberg News reported that the Los Angeles County sheriffs were seeking a suspected arsonist behind the wildfire. The “Station Fire” has burned an area the size of Chicago in the foothills and canyons north of Los Angeles. Besides killing two firefighters, the blaze has destroyed 96 buildings. As of Friday, the fire was about 42% contained.

Deputies help Florida tellers prepare for heists

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TAMPA, Fla. (9/8/09)--Sheriffs’ deputies in Pasco County, Fla., formed a coalition to help prepare tellers at credit unions and other financial institutions in the area to deal with attempted robberies. The Financial Institution Security Coalition of Pasco County staged a robbery Wednesday at Suncoast Schools FCU in Tampa, Fla., to show about 40 area financial-institution employees how to respond to armed robbers who wear disguises, wave weapons and yell out demands (Tampa Tribune Sept. 4). Since the coalition’s inception 18 months ago, the sheriffs’ major crimes division has regularly met with area financial institutions, coalition spokesman Kevin Doll told the newspaper. “We prepare them about what to look out for,” Doll told the paper. “When it happens, a lot of times [the teller] is in shock about being robbed, so when [law enforcement] asks them questions later, they don't know what to tell you. We’ve had suspects go from white to black, male to female. Of course, some of that is due to the disguises [robbers] wear.” There are three basic types of financial-institution robbers, Sheriff’s Sgt. Jim Sessa told the paper. Those who wear disguises, those who use weapons and “the note passer”--which is the most common in the Pasco area, he added. Employees who are taught a procedure and told what to look for in a robbery situation will have more confidence and be able to give authorities more factual and useful information, Sessa told the paper. Technological advances and working with the Federal Bureau of Investigation have helped the sheriff’s office solve more financial-institution robberies, he added.

Teacher 13 wins Landmarks Biz Kid contest

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NEW BERLIN, Wis. (9/8/09)--A thirteen-year-old teacher has been named the grand prize winner in Landmark CU’s Biz Kid$ Essay Contest for young entrepreneurs age 6-14.
Megan Baker, 13, was the recipient of a $500 grand prize for Landmark CU’s Biz Kid$ essay contest. From left are Ron Kase, Landmark CU president; Maureen Bradley, Milwaukee Public TV Director; and Baker. (Photo provided by Landmark CU)
Megan Baker received a grand prize of $500 from the New Berlin, Wis.-based credit union. Baker wrote about teaching kindergarten readiness classes and other subjects at her Jump Ahead Summer Preschool. She earns about $80 a week. Four runners-up who received $100 are:
* Emma Landowski, 14, Kewaksum, who sells handmade scarves and bags; * Dillon Muth, 14, Palmyra, who sells natural meats; * Emma Lowe, 8, Grafton, who sells soap and air fresheners; and * Bethany Buikema, 11, Elkhorn, who sells decorated flip-flops.
Three honorable mentions were given to:
* Gloria Grzybowski, 11, Brookfield, who runs a jewelry-making business; * Morgan Laufer, 12, Watertown, for her Scent Sachet business; and * Michael Misorski, Hales Corners, for his MSJ Lawn Services.
The entries were judged on success of the youth’s business, creativity, originality, and the organization and legibility of submitted materials, the credit union said. Landmark has more than $1.4 billion in assets. The credit union is also a sponsor of the Emmy-awarded television series, BizKid$.

Iowa CUs benefit from serving Hispanics

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DES MOINES, Iowa (9/8/09)--Jose Francisco Batres and Martha Alarcon moved to the U.S. from the Mexican state of Veracruz six years ago. They put in 14-hour days at a Des Moines restaurant. They also became active members of Village CU, which serves anyone working and living in Polk and surrounding counties.
Click to view larger image Village CU members Jose Francisco Batres, center, and Martha Alarcon, right, are saving up for a restaurant and to pay for the education of their daughter, Nayeli, left.
The couple joined VCU to send money home to Mexico using World Council of Credit Unions' (WOCCU) international remittance program, IRnet, a service offered through credit unions by the for-profit WOCCU Services Group. The credit union's fees were lower and the service friendlier than at the large commercial bank the couple previously patronized. Eventually Batres and Alarcon opened a savings account so they could save enough money to educate their daughter Nayeli and one day open their own restaurant. The pair also joined VCU's Hispanic Advisory Group to help the credit union increase its membership penetration deeper into Des Moines' growing Hispanic community. VCU quickly became one more Iowa credit union to see the value in providing services to this rapidly growing demographic. "The Iowa Credit Union League (ICUL) believes credit unions have a huge opportunity to help solve the current economic crisis by serving the underserved Hispanic market," said Patrick Jury, league president/CEO. "Hispanics demonstrate a high work force participation rate, increasing household income, collective purchasing power and booming entrepreneurship, all elements that will help credit unions drive membership, portfolio and asset growth." ICUL in 2006 formed Coopera Consulting to help the state's credit unions better serve Iowa's Hispanic market, Jury said. Coopera's success has led to additional work with credit unions or credit union systems in Louisiana, Nebraska, New York and Oregon, and most recently, with Credit Union National Association to develop a credit union strategy to serve Hispanics nationwide.
Click to view larger image Discussing the advantages of serving Hispanic members are, from left, Patrick Jury, Iowa Credit Union League president/CEO; Brian Branch, World Council of Credit Unions executive vice president/chief operations officer; and Murray Williams, Iowa league chief operations officer. (Photos provided by the World Council of Credit Unions
"The work that Coopera has done with Iowa's credit unions has helped them reach out effectively and serve these communities. Across the U.S., we have seen Coopera's positive impact on credit unions seeking to improve their services to Hispanics," said Brian Branch, WOCCU executive vice president/chief operations officer. "Success is determined by how well credit unions understand and adjust to Hispanic cultural elements that contribute to their member loyalty. Coopera is a great resource for serving Hispanics and providing cultural sensitivity that can result in a groundswell of new member applications," said Branch. Like VCU, Des Moines Metro CU (DMMCU) has benefited from serving the city's Hispanics. It had been losing members as the city's limits expanded westward. After a demographic analysis, DMMCU discovered a large population of working class Hispanics and Sudanese in the downtown neighborhoods near the credit union. The groups were not being served. The credit union reformulated its marketing mix to include Spanish radio stations and publications. It also offered credit-building loans starting at $500 to help new immigrants establish credit and gain a foothold in the local economy. Membership grew, and the credit union found itself in nontraditional services, including sending remittances through WOCCU's IRnet. Credit union staff even helped one couple sort out purchase problems with a local auto dealership as part of their auto loan application and another member cope with identity theft. The extra effort has been worthwhile, said Traci Stiles, DMMCU's business development manager, because news of the credit union's services spread rapidly by word-of-mouth through the Hispanic community, resulting in an influx of members. "This is a market segment that is very loyal and a pleasure to serve," Stiles added.

Invest in America adds Allied Van Lines

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LIVONIA, Mich. (9/8/09)--The Invest in America program, which offers credit union members discounts on select vehicles at select automakers, now includes Allied Van Lines and its agent Carey Moving and Storage. Last week, Invest in America announced that it had partnered with Thor Industries, a recreational vehicle manufacturer. Invest in America offers discounts on vehicles from General Motors and Chrysler. Ford Motor Co. also is undergoing a pilot with the program. The Allied discounts include a minimum 60% off interstate moves and savings on intrastate full-service moves and storage. Credit unions also can take advantage of enhanced transit times, expedited claims settlements, and complementary pairs and sets valuation protection--which means that if a piece of a furniture set is broken, Allied will replace the whole set, said CUcorp. “We hope that Allied’s credit union member discounts will make things easier for the many families who may need to relocate in this tough economy,” said Bill Lyon, Allied vice president and general manager. David Adams, CEO of CUcorp, an arm of the Michigan Credit Union League that facilitates the Invest in America program, said the partnership will give credit union members “access to moving services that are the equivalent of flying first class.”

Businesses surviving under CUs preferred program

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TOTOWA, N.J. (9/8/09)--North New Jersey businesses are participating in a program created by North Jersey FCU (NJFCU) as an alternative for businesses to reach new customers. The program offers exclusive discounts and perks for NJFCU members, the credit union said. The NJ Preferred program debuted last week. Although NJFCU has not been immune to the severe economic crisis hitting both the local financial and automotive industries, it has paid close attention to signs that the U.S. is on the verge of a rebound. Under the program, more than 30,000 NJFCU members can buy cars, eat at restaurants or buy clothes, and receive exclusive discounts at participating businesses. Also, participating businesses can insert coupons in credit union statements, and advertise discounts and offers in NJFCU branches or on its website. In return, the credit union’s members obtain exclusive discounts offered by NJ Preferred businesses. The idea came from James Giffin, NJFCU vice president of sales and marketing. He is now one of many members of the $166 million asset, Totowa, N.J.-based credit union taking advantage of good deals in the area, NJFCU said.

CU System briefs (09/07/2009)

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* TACOMA, Wash. (9/8/09)--Tacoma-based Sound CU and MilePost CU announced Wednesday that MilePost has merged into Sound to allow "new opportunities for growth" and to "enhance the range of branch locations and services available" to members. The merger was completed Aug. 31. Sound CU is now a $477 million asset credit union with 47,000 members served by 12 branches in Pierce, Thurston and King counties (The News Tribune Sept. 3) … * Meridian, Miss. (9/8/09)--Police were looking for a man with the letters "D.A." tattooed on his upper right arm after he was videotaped Aug. 24 staking out an ATM at Meridian Mutual FCU and attacking it with a crowbar. He left empty-handed. A sign on the machine warns ATM users that their actions are being taped (Associated Press Newswires Sept. 3) … * MERIDEN, Conn. (9/8/09)--Connecticut credit unions expect more than 350 students from seven schools to participate
Click to view larger image Click for larger view
in a statewide Financial Reality Fair at the State Capitol on Nov. 4, said the Credit Union League of Connecticut. In 2009, credit unions working cooperatively focused on improving youth financial literacy through the fairs offered to high schools. The students "live on their own" on hypothetical but realistic budgets based on their selected occupation and make choices in lifestyle categories such as housing, transportation and recreation. "I can't think of a better way to involve our youth in learning to understand and manage their finances than putting them through such a practical lifestyle exercise," said league President/CEO Tony Emerson. Legislators and other government officials will observe, and a representative of the National Credit Union Foundation REAL Solutions program will attend. In the photo, students discuss lifestyle choices at a booth during a recent fair. (Photo provided by the Credit Union League of Connecticut) … * DULUTH, Ga. (9/8/09)--More than 250 people, representing 17 credit unions, raised $70,000 for Children's Miracle Network at the Greater Atlanta Credit Union Chapter's seventh annual Bowl-a-Thon in Decatur, Ga. The event was orchestrated by a committee of credit union employees and supported by 24 sponsors. The funds will benefit the Asthma Center at Children's Healthcare of Atlanta. Nationwide, credit unions have raised more than $63 million since 1996 through the Credit Unions for Kids program. In the Atlanta area, credit unions have contributed more than $900,000 for Children's Healthcare of Atlanta … * LOUISVILLE, Ky. (9/8/09)--Robert "Abe" Lincoln, 78, of Summerfield, Fla., died Aug. 27. He was former CEO of L&N FCU and Autotruck FCU in Louisville, Ky., before moving to Gainesville, Fla., to become president of Florida CU. During his credit union career, he was author of an international newsletter, "A Point of Order." He is survived by his wife, two children, and a stepgrandson. Funeral services are Sept. 25 at the Florida National Cemetery (The Courier-Journal Sept. 3) …

90 of U.S. currency tainted by cocaine

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DARTMOUTH, Mass. (9/8/09)--Nine out of 10 pieces of U.S. currency contain traces of cocaine, according to a new study by the American Chemical Society conducted at the University of Massachusetts-Dartmouth. Even bills not involved in drug deals can become contaminated during the automated bill counting process in financial institutions. The drug--a fine powder--adheres to the green ink on the bills--mostly $5, $10s, $20s and $50s--and spreads easily, according to the study. Scientists studied banknotes from nearly three dozen cities in five countries--the U.S., Canada, Brazil, Japan and China. The bills from the U.S. and Canada saw between 85% and 90% contamination. A similar study two years ago found the U.S. contamination rate at 67%. China and Japan had the cleanest bills, with 20% and 12% contamination, respectively. Banknotes from Washington, D.C., had the most contamination--95% had traces of the drug. Other cities with larger amounts of contaminated bills included Detroit, Boston, Baltimore, Miami, Orlando and Los Angeles. The amounts of cocaine are not enough to cause any health or drug-testing concerns, researchers said.

CUNA closed Monday for holiday no INews NowI

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WASHINGTON and MADISON, Wis. (9/4/09)--The Credit Union National Association's Washington, D.C., and Madison, Wis., offices will be closed Monday in observance of the Labor Day holiday. News Now will not publish a Monday edition. It will resume regular publication on Tuesday.

CUNA calls for board nominations

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WASHINGTON and MADISON, Wis. (9/4/09)--The Credit Union National Association (CUNA) is accepting nominations for its 2009-2010 Board of Directors in several district/classes. They are:
* District 1, Class C; * District 2, Class A; * District 3, Class B; * District 4, Class C; * District 5, Classes B and D; and * District 6, Classes A and D.
Leagues or credit unions eligible to run for an election will receive the Call for Nominations letter, which is being mailed today, or they can access the letter using the resource link. To be an eligible credit union candidate for a CUNA Director position, the candidate must be an employee or voting board member of the nominating credit union. Nominations must be in writing and seconded in writing by two other credit unions of the same size group from the district. Only two seconds will be recorded for each candidate. Upon request, a list of credit unions by size group and district will be furnished to candidates to assist in obtaining seconds. To be an eligible league candidate for a CUNA Director position, individuals must be a league president and be nominated in writing by their league, with a second in writing by at least one other league from the district. Deadline for nominations and seconds is Oct. 16. CUNA's Corporate Governance Committee will verify eligibility of each candidate, the credit union's affiliation, size group and district, and date/time of receipt. Voting will Oct. 23 and close on Dec. 18. For more information, use the link.

TJX Cos. settles data breach lawsuit with CUs

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FRAMINGHAM, Mass. (9/4/09)--TJX Cos. has agreed to pay $525,000 to settle a lawsuit brought by two credit unions and two banks related to the huge data breach of its customers' information in 2005 and 2006. The Framingham, Mass.-based company will reimburse HarborOne CU of Brockton, Mass., and Eugene, Ore.-based SELCO Community CU, as well as AmeriFirst Bank and Trustco Bank for part of the expenses they incurred related to the breach, TJX said in a press release Thursday. The settlement agreement "will result in the dismissal of the putative financial institutions class action" and "all related litigation," TJX said. The $525,000 reimbursement does not include attorneys' fees. It is part of $118 million that TJX had set aside during second quarter 2007 to cover costs related to the breach. The settlement is the latest in a string of cases that have plagued the discount retailer for two and a half years. In June, TJX agreed to pay nearly $10 million to settle lawsuits filed by attorneys general in 41 states (ComputerWorld Sept. 3). In November 2007, it announced it would pay up to $40.9 million to Visa USA Inc. card issuers affected. The breach forced thousands of credit unions and banks to reissue debit and credit cards for millions of member/customers whose information was compromised by the hacking. More than 45 million cards were compromised in what was at that time the largest data breach ever and one of the costliest. Since then breaches at Hannaford Bros. grocery chain and Heartland Payment Systems have exceeded that number of cards compromised. Last week, a Miami man pleaded guilty to masterminding the attacks on TJX and other retailers, including Dave & Busters, BJ's Wholesale Club, OfficeMax, Boston Market, Barnes & Noble, Sports Authority, Forever 21 and DSW. Albert Gonzalez, 28, faces between 15 and 25 years in prison (News Now Sept. 1). TJX owns retail discount stores such as Marshalls and T.J. Maxx.

Its Natl. Preparedness Month. Wheres disaster plan

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MADISON, Wis. (9/4/09)--September is National Preparedness Month, and the No.1 thing credit unions can do to prepare for a disaster is test their preparedness plans, according to the president/CEO of Agility Recovery Solutions. “Most credit unions have a written plan in place for disaster recovery,” Bob Boyd, president/CEO of Agility, told News Now. “But they really need to ask questions: What would happen if a piece of infrastructure didn’t work? Does that plan help? Who will do what?” To help credit unions with disaster planning, Agility is hosting several free webinars:
* Pandemic Planning--How to Prepare Your Business for the Upcoming Flu Season, Sept. 16 at 2 p.m.; * Social Media--What Role Does It Play in Business Preparedness, Sept. 23 at 2 p.m.; and * Creating a Culture of Preparedness, Sept. 30, 2 p.m.
Agility Recovery Solutions, a CUNA Strategic Service provider, also has partnered with the Federal Emergency Management Agency to encourage disaster preparedness. Credit unions’ apprehension about a possible H1N1, or swine flu, pandemic is increasing. However, most credit unions’ disaster plans don’t deal with swine flu. Boyd suggested credit unions prepare for a pandemic by cross-training staff and giving them the ability to work from home. Credit unions won’t hurt their business by preparing for swine flu. And while many credit unions may think that testing disaster plans is expensive, it doesn’t have to be, Boyd added. “There are steps [credit unions] can take today,” Boyd said. “If they don’t do it now, they will be behind the gun, and that’s when mistakes happen.” Most credit unions find ways to improve each time they test a plan, he added. The Massachusetts Credit Union League posted a message on its website encouraging credit unions to prepare for a possible epidemic. “Whether the H1N1 flu virus will worsen with symptoms this fall or winter remains to be seen, but the Center for Disease Control reports that this is a new flu strain with little immunity amongst the citizenry,” the league said. “As a result, at the very least, businesses should expect many more of their employees and members to come down with the flu this flu season.” Last week, a presidential advisory group of the nation’s leading scientists and engineers released a report assessing the Obama Administration’s preparations for this fall’s expected resurgence of H1N1 flu and outlined key steps officials can take to minimize the disease’s impact on the nation. The report concluded that the H1N1 flu is unlikely to resemble the deadly flu pandemic of 1918-19. But in contrast to the benign version of swine flu that emerged in 1976, the report says the current strain “poses a serious health threat” to the nation. The issue is not that the virus is more deadly than other flu strains, but rather that it is likely to infect more people than usual because it is new and few people have immunity. This means doctors’ offices and hospitals could fill to capacity, the group said in a release. Individuals should wash their hands frequently, and stay home from work when sick. “Workplaces could liberalize rules for absenteeism so employees don’t feel pressured to come to work when sick,” the group said. Since it’s hurricane season, credit unions and leagues also are preparing for potentially dangerous storms. The Texas Credit Union League (TCUL) added a storm tracker system with scrolling updates concerning weather developments on its website. Users can access storm preparation resources by clicking on a “Disaster Preparation” banner on the TCUL website. Disaster recovery is also needed during power or phone outages, regardless of whether they are triggered by a natural disaster. Schools FCU, Los Angeles, recently experienced a phone outage, which prevented the credit union from accessing the Internet or its account database. “The phone line went down on a Friday--payday--creating a potentially troublesome situation for our members who were likely to move thousands of dollars among their accounts,” said Barbara Abraham, Schools FCU operations manager. Although members could not conduct transactions at Schools’ physical branches, they could make deposits and withdrawals through shared branching. While the phone line was being repaired, PSCU Financial helped credit union members conduct transactions through its call center and also helped staff maintain a transaction log. “It is hard to forsee when a crisis will disrupt regular credit union workflow, but there is no need to reinvent the wheel in adverse scenarios to ensure effective and continuous service,” said Peter Schmitt, PSCU Financial Services executive director. The U.S. Small Business Administration (SBA) posted a message Tuesday on YouTube with Administrator Karen Mills reminding the public about National Preparedness Month and the effects of a disaster. She encouraged everyone to develop and implement preparedness plans. “There’s a tendency to think that a large-scale disaster is not going to happen ‘where I live,’” Mills said. “We should all realize that storms, floods, earthquakes, fires and man-made disasters can strike at any time and anywhere.” SBA’s suggested disaster prep includes:
* An emergency response plan; * Adequate insurance coverage; * Copies of important records; and * A disaster survival kit with a flashlight, portable radio, batteries, first-aid supplies, non-perishable food, bottled water, a basic tool kit, plastic sheeting and garbage bags, cash and a digital camera to take pictures of damage.
The Credit Union National Association also offers disaster preparedness resources, including archived Agility webcasts on pandemic planning. For more information, use the links.

Mission FCU helps schools bridge funds gap

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SAN DIEGO (9/4/09)--Mission FCU is attempting to drum up extra financial support for local schools hit by budget cutbacks through its “Mission 4 R Schools” initiative. For every new account opened at the $2 billion asset, San Diego-based credit union through Dec. 31, Mission FCU will deposit $25 in the new account and make a matching $25 donation to a school chosen by the new member (Reuters Sept. 1). The matching funds can be used by local elementary, middle and high schools, and also colleges and universities, the credit union said. “At Mission Federal, we are acutely aware of the critical need for additional funding sources for our local schools, so we developed this groundbreaking fundraising opportunity to show our support during these extreme budget times,” said Tricia Link, Mission Federal vice president of communications and community relations, in a press release. “The ‘Mission 4 R Schools’ matching donation funds will be provided to schools by Mission Fed without any strings attached,” she added. “Funds can be used for everything from classroom computers to museum field trips, instruments for the band to science equipment and classroom supplies.”

CUs get more press on state employee assistance

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WASHINGTON (9/4/09)--Credit unions nationwide received more media attention for helping state workers through challenging economic times. A Thursday Stateline.org article noted Virginia CU, Richmond, Va., for its Virginia State Employee Loan Program, which the credit union operates in partnership with the Commonwealth of Virginia Campaign to help state workers who face emergency expenses and would benefit from a low-cost, emergency loan with a required financial education component. The loans have a 24.99% annual percentage rate, and are intended to prevent state workers with poor credit from using payday lenders--who could charge 300% or more in interest, the publication said. Since the program was announced by Virginia Gov. Tim Kaine July 13, more than 1,620 employees have received loans. North Carolina State Employees’ CU, Raleigh, also was noted for its Salary Advance program that allows members to borrow up to $500 at a 12% interest rate. Members must repay the amount, plus interest, by the next paycheck. Since 2001, more than 111,800 individuals have borrowed $1.5 billion from the program with a default rate of 0.002%. Hawaii State FCU, Honolulu also allows members who are furloughed or who have reduced incomes to borrow up to $5,000 from the credit union at a low interest rate. More than 20 Pennsylvania credit unions offer low-interest or zero-interest loans to help state workers who were not getting paid. Some dropped off thank-you cards at one credit union to show their gratitude, Stateline.org said. Several states have had budget impasses over the past few months that have affected state workers.

IUSA TodayI notes CU debit card program

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PALO ALTO, Calif. (9/4/09)--A credit union’s debit card reward program was noted by USA Today Tuesday in an article about how debit-card issuers are instituting new reward programs as consumers use their debit cards more during the recession. Addison Avenue FCU--a $2.375 billion asset credit union based in Palo Alto, Calif., primarily serving employees of high-tech companies--is offering new perks to members who use their debit cards a specified number of times, the nationwide newspaper said. Addison started a checking account in July 2008 to pass on to members some of its income when debit cards are used, Benson Porter, Addison CEO, told the paper. Credit union members earn 3.51% interest on their money in Addison’s Dividend Rewards checking account if they make a minimum of 12 debit purchases per month, make one electronic deposit per month and agree to receive online statements, Porter told the paper.

Minnesota foundation elects board officers (09/03/2009)

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ST. PAUL, Minn. (9/4/09)--The Minnesota Credit Union Foundation
(MNCUF) Board of Directors has named its table officers and elected directors at its annual meeting in July. These board members will serve staggered terms:
* Chuck Albrecht, Mid-Minnesota FCU, Baxter; * Mary Hansen, Mayo Employees FCU, Rochester; * Lynn Kothe, North Memorial FCU, Robbinsdale; * Kristi Mukomela, Novation CU, Oakdale; and * Judy Root, Bluestone FCU, Eagan.
Mukomela will continue to serve as board chair, with Kothe continuing as vice chair and Root as secretary/treasurer. Since attaining status as a public charity in 2007, the MNCUF board completed a strategic planning process to examine the overall organization to strengthen the foundation's governance structure and broaden its focus. It revised its bylaws, created and altered operational policies, and established a greater Web presence. MNCUF will add two new board members this fall, bringing the total to seven. Lon Krueger, retired CEO from Accentra CU, is working for MNCUF as a volunteer to assist implementing the strategic plan. Recently, MNCUF provided funds for:
* The Minnesota Credit Union Network's Small Credit Union Conference; * The Cooperative Network's Youth Leadership Conference; * Financial education activities and scholarships through the Minnesota Family Involvement Council; * Charitable giving to Gillette Children's Specialty Healthcare through Minnesota Credit Unions for Kids; * The Homes for Our Troops project to support construction of a home for a wounded Iraq War veteran; * Disaster relief for credit unions in the state; and * Educational grants for credit union professionals and volunteers.

ICNNI ITheStreet.comI IMarketWatchI feature Hampel on economy

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NEW YORK and WASHINGTON (9/4/09)--Bill Hampel, chief economist for the Credit Union National Association, was quoted in three national publications regarding his perspectives on the economic recovery, the Federal Reserve’s actions and the Federal Open Market Committee’s (FOMC) August deliberations on the economy. Several economists concur that the Fed, Congress and the Bush and Obama administrations should share the credit for steps taken to help end the recession, said CNN.com Thursday. “The actions of the Fed and Treasury starting last October actually worked, regardless of how unpopular they were,” Hampel told CNN.com. “It was messy. It was dirty. It required a lot of money. But they were successful in preventing the implosion of a lot of institutions.” The FOMC noted in its minutes and statement regarding its August meeting that it will keep its key interest rate at zero for “an extended period,” said The Street.com Wednesday. If other factors remain relatively the same, that decision likely will result in an interest rate hike in the middle of 2010, Hampel told the publication. “The Fed does a good job of being apolitical, but they're still in Washington, so I find it unlikely that they'll raise the fed funds rate until employment improves,” Hampel said. “Don't expect the fed funds rate to increase till next summer.” And Hampel told MarketWatch Wednesday, “The bottom line is that until we see a demonstrable improvement in the labor market, they [the Fed] are not going to raise the fed funds rate.” He also told the publication that Fed officials were “less worried that they were too optimistic about a second-half recovery.” Considering the high debt burden consumers are carrying, the recovery “will not be too much to write home about,” he added. On a related topic, Hampel told MarketWatch that deflation is unlikely to occur. However, the fact that federal officials are discussing it should indicate how remote the possibility is of inflation going up.

N.Y. judge rules free speech no shield in lawsuit

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NEW YORK (9/4/09)—In a rating agency case that may have broad implications, a U.S. District Court judge here rejected arguments by Moody’s Investor Services Inc. and Standard & Poor’s (S&P) that investors can’t sue over deceptive ratings of private-placement notes because those ratings are protected by the First Amendment right of free speech. In her decision, U.S. District Judge Shira Scheindlin declined to dismiss fraud charges brought by two investors, Abu Dhabi Commercial Bank and Kings County, Washington, against Moody’s, S&P, and Morgan Stanley & Co. The ruling will force the three companies to respond to fraud charges in the class action suit that claims certain risks associated with securities backed by subprime mortgages were not exposed for investors. The case could be of interest to credit unions because similar questions regarding rating agency responsibility and investors' right to sue the ratings agencies have circulated in the credit union movement regarding investments made by corporate credit unions. “Although this court’s decision is not technically binding on the myriad of similar cases currently pending against the ratings agencies, it likely will have some influence on other judges because the U.S. District Court for the Southern District of New York is influential in financial services law,” assessed Michael Edwards, Credit Union National Association counsel for special projects. "This case did not directly involve mortgage-backed securities per se, but the court's reasoning may be applicable to a variety of debt instruments rated by these companies. Because the National Credit Union Administration (NCUA) is the conservator of U.S. Central (FCU) and (Western Corporate FCU) WesCorp, NCUA may wish to examine this decision to analyze whether it opens any paths to recovery on behalf of the conserved corporates. Reaching any sort of conclusion, however, will take a lot of research and analysis," Edwards added. Scheindlin did not rule on the merits of the lawsuit, which brings 32 counts of fraud against eight companies, but she did opine that free-speech rights cannot be used as a shield from lawsuits because the ratings firms opinions were not distributed generally to the public but rather to a select group of investors. She also noted that there is an unresolved question regarding whether the ratings agencies "genuinely or reasonably" believed that the ratings they assigned "were accurate and had a basis in fact."

CU System briefs (09/03/2009)

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* HARTFORD, Conn. (9/4/09)--A bookkeeper for the now-defunct Meriden (Conn.) Franco-American CU pleaded guilty to embezzling more than $743,000 from the credit union. Melissa Laliberte, 39, of Wallingford pleaded guilty to embezzlement and filing a false income tax return. The credit union was placed into liquidation in July 2008 by the National Credit Union Administration (NCUA). At the time it had 206 members and less than $340,000. Prosecutors said Laliberte withdrew her salary multiple times each month; took loan payments from members to pay personal expenses; failed to post cash withdrawals from her and her husband's accounts; and falsified deposits to the accounts. She was ordered to pay restitution to NCUA, plus back taxes, penalities and interest to the Internal Revenue Service. Laliberte faces up to 30 years in prison and a maximum $1 million fine (WTIC.com and Associated Press Newswires Sept. 2) … * LIMA, Ohio (9/4/09)--A defendant's outburst in a courtroom and his family's reaction at his sentencing for a credit union robbery resulted in the family's eviction from the courtroom. Shortly before he was sentenced to the maximum 26 years in prison for robbing a bank and Superior FCU, Lima, Devonne Wilson cursed the judge and jury. His family began yelling and were evicted. Wilson calmed down and politely asked for an appeal. He was convicted of aggravated robbery with a gun in the March 9 holdup of Chase Bank and the March 20 robbery of Superior FCU. Wilson also was ordered to pay $19,000 in restitution to the two institutions (The Lima News Sept. 3) … * HARRISBURG, Pa. (9/4/09)--U.S. Rep. Kathy Dahlkemper (D-Pa.), left, was welcomed by Erie FCU President/CEO and Pennsylvania Credit Union Association (PCUA) board member Norb Kaczmarek, right, during her recent visit to the credit union. They discussed several credit union issues but focused primarily on the Credit Card Accountability, Responsibility and Disclosures (CARD) Act and the act's effect on Erie FCU, and the costs associated with health reform. PCUA said Dahlkemper is a strong supporter of credit unions and has co-sponsored multiple credit union measures, including member business lending (Life is a Highway Sept. 2). (Photo provided by the Pennsylvania Credit Union Association) … * KANSAS CITY, Mo. (9/4/09)--More than a dozen Kansas City-area
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credit unions met with U.S. Rep. Sam Graves (R-Mo.) Aug. 26 in Kansas City. Concerns about the Credit Card Accountability, Responsibility and Disclosures (CARD) Act dominated the discussion, reported the Missouri Credit Union Association (MCUA). Credit unions explained how the CARD Act hurts some consumers by including open-end lending. He indicated he would check into the issue (The Missouri difference Aug. 28). From left are Don Cohenour, MCUA; Suzie Sifuentes, Burlington Northtown Community CU; Pat Yokley, CommunityAmerica CU; Glenna Osborn, Missouri Central CU; Rep. Graves; Phil Weber, Central Communications CU; James Spafford, Postal and Community CU; and Rob Givens, Mazuma CU. Also attending from MCUA were Jean Hadley, Amy McLard and Peggy Nalls. (Photo provided by the Missouri Credit Union Association) … * SALT LAKE CITY (9/4/09)--Mountain America CU employees helped "Fill the Bus" to raise money and take donations of school supplies for students of an elementary school that was damaged by fire a month and half ago. Volunteers from the credit union and the Wal-Mart Distribution Center in Tooele, Utah, collected the items to replace items lost in the blaze at Grantsville Elmentary. More than $1,500 was raised. The fire occurred after teachers had set up their classrooms for the coming year and all their supplies were destroyed …

Southwest Corporates July net loss 178.2M

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DALLAS (9/3/09)--Dallas-based Southwest Corporate FCU has recorded additional investment losses on its mortgage-backed securities and further depletions of its membership capital shares at U.S. Central, according to its July financial statement posted on its website. The numbers were initially reported to its members in July. Southwest Corporate recorded a net loss in July of $178.2 million, which results in a year-to-date net loss of $161.6 million and a retained deficit of $160.9 million. Its operating earnings before investment-related losses was $21.4 million. Investment losses contributing toward the net loss included $113 million of other than temporary impairments in its portfolio of mortgage-backed securities, reflecting increased loss projection from March 31 to June 30. The corporate also recorded $67.6 million in additional depletion of U.S. Central membership capital, reflecting U.S. Central's depletion of those funds on July 31. Southwest Corporate's 2008 audit remains in process pending the completion of U.S. Central's audit, which the corporate said was expected this week. "Once U.S. Central's audited financial statements are reviewed, our audit is expected to be completed approximately four weeks later," said Melissa Wardell, Southwest Corporate senior vice president/chief financial officer, in the posted financial statement. For the full report, use the link and click on July 2009 monthly report.

Columnist Hundreds of complaints about banks none on CUs

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FORT WORTH, Texas (9/3/09)--Dave Lieber, “Watchdog” columnist for the Fort Worth Star-Telegram, told Texas credit unions that he receives hundreds of requests for help with bank problems and none for credit unions. He recently gave a presentation titled “Why Americans Hate their Banks but Don’t Know Enough to Love their Credit Unions,” at the Fort Worth Chapter of Credit Unions’ monthly meeting. Lieber’s column helps readers who have issues or problems with current situations affecting their communities (LoneStar Leaguer Aug. 28). He said that while he has had hundreds of requests from readers to address or correct complaints facing the banking industry, he had not received any asking for help in dealing with a credit union. With many “horror” stories relating to banking customers’ complaints, Lieber had his audience laughing when he said he now understood why it was called “BANKruptcy” and not “CREDITUNIONruptcy.”

CU System briefs (09/02/2009)

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* NEW BERLIN, Wis. (9/3/09)--WISCOR CU, a $15 million asset credit union in West Allis, Wis., has merged with Landmark CU, a $1.4 billion asset credit union in New Berlin, announced Landmark. The merger was effective on June 30, with data processing systems merged on Aug. 28, enabling WISCOR members to begin using Landmark branches. WISCOR's West Allis location has closed and its five employees are now Landmark employees. Earlier this summer another West Allis-based credit union, Lifetime CU, also merged into Landmark. WISCOR CU posted a net loss of $115,563 during first quarter 2009. The loss included a $126,054 payment to the National Credit Union Share Insurance Fund (Business Journal Milwaukee Sept. 1) … * NORTH MIAMI, Fla. (9/3/09)--Mount Sinai FCU, Miami, has been approved by the Florida Office of Financial Regulation to merge with Peoples CU in North Miami. The merger was approved Aug. 26 without a shareholder vote because regulators considered Mount Sinai FCU to be undercapitalized (South Florida Business Journal Sept. 2). After the deal is complete, the credit union’s branches will be managed by Peoples CU. Mount Sinai has $17.7 million in assets as of June 30. The credit union has a net worth-to-asset ratio of 1.43%, below the 7% threshold considered to be well-capitalized. Peoples CU has $61.7 million in assets as of June 30. The combined credit unions will have $79.4 million in assets and a net worth ratio of 9.75% ... * BEAVERTON, Ore. (9/3/09)--Enterprise Car Sales presented $5,000 to Doernbecher Children’s Hospital (DCH) Aug. 25 to make a contribution to the Credit Unions for Kids program of Oregon and Southwest Washington, said the Credit Union Association of Oregon. “[The contribution] will go to help us reach our current goal at DCH, which is a two-year $1 million goal to fund the professorship of Dr. Robert Steiner, who specializes in inborn errors of metabolism and osteogenesis imperfect,” said Kasey Rockwell, association director of credit union development and Credit Unions for Kids program coordinator. Credit Unions in Oregon and southwest Washington raised more than $879,000 during the 2008 campaign year for Credit Unions for Kids …

University FCU challenge to students Stretch 20.09

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AUSTIN, Texas (9/3/09)--University FCU (UFCU) is challenging Central Texas college students to prove how far they can stretch $20.09 in 2009. It is hosting an online video contest and social media campaign, which runs through Sept. 17. The purpose of the challenge is to teach young adults the benefits of making smart financial decisions at each stage of life and to let people know how much can be achieved with only $20.09. Participants record creative ways to make $20.09 last as long as possible and post their videos, which must be between 30 seconds and three minutes long, on YouTube via www.twenty09challenge.com or UFCU’s Facebook page. Entries will be judged on how creatively participants spend their money and how inspiring their actions are to others. The first place winner will receive a $500 Visa gift card; second place, a $300 card; and third place a $100 card. David Lee, University of Texas student and social media strategist representing UFCU, came up with the contest idea. “I was inspired by the basic concept of showing people the benefits of an action rather than merely telling them that it’s beneficial,” Lee said. University FCU, based in Austin, Texas, has $1.067 billion in assets.

Pa. auditor clarifies proposed tax status changes

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HARRISBURG, Pa. (9/3/09)--Pennsylvania Auditor General Jack Wagner Tuesday sent a letter to the Pennsylvania Credit Union Association (PCUA) responding to PCUA's concern about a proposal to tax non-profit entities as part of his state budget recommendations. In a letter to PCUA President/CEO Jim McCormack, Wagner clarified that while he recommended a review of tax credits, exemptions, and loopholes provided to select individuals and organizations, he did not mention any specific entities, including credit unions. "Nor did I dispute their value or suggest they do not focus on service to their members," he wrote (Life is a Highway Sept. 2). Wagner asked that his clarification be communicated with credit unions and expressed interest in meeting with McCormack soon. "We were very pleased to get this letter of clarification…recognizing the value that credit unions bring to Pennsylvania consumers," McCormack said. "We also look forward to meeting with the Auditor General and his staff to see how our organizations can work together for the benefit of Pennsylvanians." McCormack had sent Wagner a letter expressing strong opposition against the proposal to tax non-profit entities. The suggestion is one of seven recommendations Wagner has made at least twice to the governor and General Assembly to explore during the state's budget impasse (News Now Aug. 18). Pennsylvania entered its second month without a state budget on Tuesday, when the state's House and Senate conference committee resumed meetings after three weeks of suspended private talks. State government has operated on a "bridge" budget funding only day-to-day operations since Aug. 5. Christina Mihalik, PCUA vice president, governmental affairs, attended Tuesday's meeting, and PCUA staff is monitoring any budget talks for any impact on credit unions (Life is a Highway Sept. 2)

Raleigh council approves SECUs tower

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RALEIGH, N.C. (9/3/09)--The Raleigh, N.C., City Council Tuesday approved a plan for a 12-story, mixed use building that State Employees’ CU (SECU) wants
State Employees’ CU, Raleigh, N.C., was recently approved to construct an office building in downtown Raleigh that will house a credit union branch, office space and a parking deck. (Photo provided by State Employees’ CU)
to build downtown at the original site of the credit union’s first branch. SECU said its board had considered building the facility for several years and decided to implement the plans to boost the state’s economy. Construction is expected to begin this fall (News Now June 6). The building will be about 240,000 square feet. The project will include a credit union branch, 31 residential units, office space, and an eight-level parking deck with 165 spaces (wral.com Sept. 1). SECU also plans to open 15 new branches in the next fiscal year, the credit union said. SECU, Raleigh, N.C., has $18 billion in assets.

WOCCU Asia pioneer Augustine Kang dies

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MADISON, Wis. (9/3/09)--Augustine J.R. Kang, 85, a pioneer of the Asian credit union movement and founder of the first South Korean credit union, died Aug. 22 in Madison, Wis. Kang was the first general manager of the Asian Confederation of Credit Unions, which became affiliated with the World Council of Credit Unions (WOCCU) in 1971. As manager, Kang worked with 20 Asian countries (Wisconsin State Journal Aug. 24). In 1983, Kang moved to Madison to start a special project at WOCCU that launched the credit union movement in China. He worked for WOCCU until his retirement in 1995. In addition to his work in the credit union movement, Kang authored two books: “Just As It Is” and “The Conversation That I’d Like To Share With Someone.” Kang also received the Ramon Magsaysay Award for International Understanding in 1981 and an honorary law degree from St. Francis Xavier University in Nova Scotia, Canada, in 1984.

Defense council honors three CUs

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SAN FRANCISCO (9/3/09)--Three defense credit unions were recognized
Click to view larger image On hand at the Defense Credit Union Council presentation of the Army credit union of the year award to Fort Sill FCU were, from left: Cpt. Marocco Roberts, Army liaison; Robert Hopper, Fort Sill FCU chairman; Col. Marlene Fey, commander of USAFINCOM; Denise Floyd, Fort Sill FCU president/CEO; and Dennis Potter, Fort Sill FCU liaison officer.
with Distinguished Service Awards by their branches of the armed services during the Defense Credit Union Council's 46th Annual Conference Aug. 17. The Defense Credit Union of the Year awards and their recipients were:
* Army Award: Fort Sill FCU, Fort Sill, Okla.; * Navy/Marine Corps Award: Navy FCU Souda Bay Branch, Crete, Greece; and * Air Force Award: Andrews FCU, Andrews AFB, Md.
Click to view larger image The Defense Credit Union Council presented its Air Force credit union of the year award to Andrews FCU. Pictured are, from left: Audrey Davis, deputy assistant secretary of the Air Force-FO; Chris McDonald, president/CEO of Andrews FCU; and Henry Bowman, Andrews FCU.
Fort Sill was acknowledged for its outreach efforts in the military and civilian community and its encouragement of financial literacy, specifically among Fort Sill's junior enlisted soldiers and their families. The credit union offers programs such as the In-Balance Check Book Revitalization and the Break-Out Loan, semi-annual training to units on use and potential problems with credit cards and the ATM card, and one-on-one counseling on family finances and budgeting. Navy FCU Souda
Click to view larger image At the Defense Credit Union Council's presentation of the Navy/Marines credit union of the year award to Navy FCU Souda Bay Branch, Greece, were, from left: Capt. James Reich, acting deputy assistant secretary of the Navy-FO; Jean Jeffries, branch manager at Navy Souda Bay; Lt. Johnny Quesada, Souda Bay CU liaison officer; and Lee Gounds, executive vice president, branch operations. (Photos provided by the Defense Credit Union Council)
Bay Branch was recognized for service despite being the only U.S. financial institution in Greece and for overcoming the difficulties of a remote location. Its service included "strong community outreach and exceptional teamwork." Members of the team were also noted for their participation with a welcoming committee, offering on-the-spot financial assistance for personnel on visiting ships that could not enter the branch, and for volunteering to remain open after normal branch hours to meet sailors' needs. Andrews FCU was cited for: its support of Andrews Air Force Base; its extensive financial education through regular briefings, educational seminars and participation in Airmen and Family Readiness Center workshops; its support of the Military Saves campaign through seminars and special savings accounts for new savers; its efforts against payday lending by providing alternative loans and education and participating in town hall meetings in the community.

Capital levels rise with increases in member savings

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MADISON, Wis. (9/3/09)--Credit union capital levels closed in on their pre-financial crisis highs, and credit union members increased their savings balances by a significant amount in July, according to a Credit Union National Association (CUNA) economist’s analysis of CUNA’s monthly sample of credit unions.
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“In July, total credit union capital grew 0.7% to reach $89.037 billion, just shy of the high-water mark reached last November of $90.840 billion,” Steve Rick, CUNA senior economist, told News Now. “However, the 9.3% asset growth since November has pushed the credit union capital-to-asset ratio down to 9.8% in July from 10.9% last November.” Credit union savings balances increased 1.0% in July to $763.8 billion. That’s 9.5% more than during the first seven months of 2009. During the month of July, share drafts increased 3.9%, followed by money market accounts (2.1%), regular shares (0.7%) and one-year certificates (0.3%). Individual retirement accounts declined (-0.6%). “Credit union members increased their savings balances by a strong 1% in July, with the fastest pace set in the share draft (3.9%) and money market account (2.1%) products,” Rick said. “Much of this growth, however, was due to a month-end payday. But so far this year, savings balances are up 9.5%, faster than the 5.8% pace set during the first seven months last year. “Many credit union members are trying to increase their precautionary savings balances due to job-loss fears,” he added. “But for many, this has become a difficult endeavor as layoffs, furloughs and paycuts reduce their income.” Credit union loans outstanding increased 0.2% during July to $586.3 billion, which is 1.0% more than in the first seven months of 2009. That is down from a 4.1% increase during the same period of 2008.
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In July, other loans led loan growth, rising 2.8%, followed by credit card loans (1.3%), home equity loans (1.0%), used-auto loans (0.6%), unsecured personal loans (0.5%) and other mortgages (0.2%). However, new-auto loans declined (-0.2%), as did fixed-rate mortgages (-0.5%) and adjustable-rate mortgages (-1.4%). “Loan growth has dropped off sharply so far this year as members try to deleverage their balance sheets,” Rick said. “Loans grew only 1% during the first seven months, compared to 4.1% increase for the similar period last year. Fixed-rate first mortgages are the only loan category reporting decent growth--5.7%--so far this year, but the growth still is less than half the pace set last year--12.4%.” The loan-to-savings ratio decreased slightly to 76.8% in July from 77.5% in June. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--increased to 21% in July from 20% in June. “The growth rate disparity between credit union loan and savings balances has increased the investment portfolio by 31% over the last seven months,” Rick explained. “Deposits at corporate credit unions have fallen from 17.2% of surplus funds--cash plus investments--in July 2008 to 13.8% today. Government securities and deposits at banks were the investment categories with a rising share of surplus funds.” Sixty-plus-day delinquencies at credit unions remained constant at 1.5% in July. “The weak labor and housing markets were the major factors contributing to a 3.3% jump in total credit union loans delinquent--$8.8 billion--in July,” Rick said. “The ratio of delinquent loans-to-loans now stands at 1.5%, up from 0.95% this time last year. With net job creation not expected until the spring of 2010, credit unions should plan for rising delinquency and loan charge-off rates well into next year.” The movement’s overall capital-to-asset ratio remained constant at 9.8% in July. The total dollar amount of capital is $88 billion.

CUs CUNA featured in Forbes other major media

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WASHINGTON (9/2/09)--Credit unions and the Credit Union National Association (CUNA) were featured prominently in national media such as The Wall Street Journal, CNBC, and Forbes.com last week. CUNA served as a key a resource for a positive student lending story in Forbes.com (Aug.26). Entitled "When a Credit Union Beats a Bank," the story advised college students that "it pays to check out the university's not-for-profit credit union." The story spotlighted several credit unions with university ties--including Princeton FCU, Michigan State University FCU, and the University of Nebraska FCU--as well as the CO-OP Network's surcharge free ATMs. William Jordan of The Sentinel Group told the publication that a few years of loyalty to a national bank does not generate the same benefits as membership in a credit union. He noted credit unions' better rates. Forbes also included a testimonial from Megan Collins, the first student at the University of Nebraska to open an account at the University of Nebraska FCU. Other media hits last week included:
* CUNA Chief Economist Bill Hampel was interviewed Thursday on CNBC's "Closing Bell," discussing whether the economy is really recovering and whether the government stimulus funds are playing a role in the signs of recovery so far. Hampel also was interviewed by Reuters about consumer spending (News Now Sept. 1). * Mary Dunn, CUNA deputy general counsel, was featured in The Wall Street Journal (Aug. 27), discussing the temporarily increase in deposit insurance to $250,000 per person, per account, which some believe may become a permanent change. When consumers are accustomed to a higher level of government protection, "it will be tough to roll it back," she said. The article notes credit unions can help consumers make their cash work hardest, and gave as an example Baton Rouge, La.-based Pelican State CU's eXtra Bonus Checking account, which pays 5.25%. * Credit unions as payday lending alternatives was the subject of three op-ed pieces by Brett Thompson, president/CEO of the Wisconsin Credit Union League. His articles all appeared Sunday in Wisconsin newspapers--the Capital Times in Madison.; The Northwestern in Oshkosh; and the Milwaukee Journal Sentinel.

CU first in Ireland to offer real-time accounts

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NEWRY, Ire. (9/2/09)--Newry CU is the first credit union in Ireland to offer a "current" or real-time account service for its members. The new service means members will have access to direct debits, standing orders, ATM and Visa access at no cost to them. Members will be able to access their funds around the clock both locally and globally and pay for online and in-store purchases (Newry Democrat Aug. 4). Newry CU Manager Brendan Jackson said the current account is part of the credit union's ongoing aim to tackle financial exclusion.

Calif. DFI authorizes FI closures for fires CU closed

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LOS ANGELES, Calif. (9/2/09)--At least one California credit union closed because its area was evacuated during wildfires raging about 12 miles from Los Angeles, and the California Department of Financial Institutions (DFI) has authorized financial institutions to close for the emergency, if necessary. CalTech Employees FCU based in La Canada Flintridge was closed, not because of damage but because it is near NASA's Jet Propulsion Laboratory (JPL), which closed as a precaution, the California Credit Union League told News Now. The laboratory and Mt. Wilson Observatory were in danger from the so-called "Station" fire, but JPL's situation eased on Monday. The fire burning in the Angeles National Forest is near homes on the north side of La Canada Flintridge. The fire was within one-quarter to one-eighth of a mile from JPL on Saturday but retreated. The 50,000-acre fire doubled in size overnight Monday, charring another 50,000 acres. Tuesday morning Bloomberg.com said conditions are favorable for the fire to spread. The Station fire, which began on Aug. 26, is the largest of eight blazes burning in the state. It was about 5% contained Monday and estimates were that the blaze won't be under control until Sept. 8. Smoke from the fire is visible from the city. The areas evacuated include: La Canada Flintridge, Acton, Altadena, and La Crescenta. The latter three areas have no credit union branches. The state's DFI Monday authorized financial institutions located in areas declared to be a state of emergency by the governor to close any or all offices affected by the fires. Commissioner of Financial Institutions William S. Haraf authorized the closures in these counties: Los Angeles, Mariposa, Monterey, Placer and Yuba. He noted that consumers can have access to their funds through their financial institutions' ATM network, Internet or telephone banking. He urged financial institutions to review their lending policies in order to grant appropriate latitude to existing member/customers affected by the fire and to expedite the extension of new credit to finance cleanup or building. Use the link to access a photo of the Station fire.

Federation notes Micas work in advocacy

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NEW YORK (9/2/09)--The National Federation of Community Development Credit Unions Monday commented on the strong working relationship it has had with Credit Union National Association (CUNA) President/CEO Dan Mica, who announced he would step down from the position in January 2011. "It's been a pleasure for the federation to work with Dan Mica and his dedicated team, especially Richard McBride, for more than a decade," said federation President/CEO Cliff Rosenthal. "In the months before he actually departs, we expect to have an opportunity to express our appreciation and respect more extensively, but for now, we look forward to Dan's continued and vigorous advocacy on behalf of all credit unions at a critical time in our shared history," Rosenthal added. Others commenting included Missouri Credit Union Association President/CEO Rosie Holub and Pennsylvania Credit Union Association President/CEO Jim McCormack. Mica "has been a tremendous asset to the credit union movement, and his leadership will be missed. CUNA, under Dan's leadership, has become an exemplary trade association and one of the most respected and influential organizations in our nation's capital," said Holub. "Dan has done a great job and led us in a new direction. He will be missed," said McCormack. McBride, who works closely with and was brought to CUNA by Mica, will also step down. Mica, a former Democratic congressman who represented Florida from 1979 to 1989, has been one of the longest-serving CEOs in CUNA's history.

TCUL announces state award recipients

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FARMERS BRANCH, Texas (9/2/09)--The Texas Credit Union League (TCUL) has announced the Dora Maxwell, Louise Herring and Desjardins award winners. The awards are sponsored by the league and the Credit Union National Association. The Austin Chapter of Credit Unions received a first place award in the Dora Maxwell Social Responsibility Award program for its Credit Unions for Kids project. The credit union raised $344,985 for the Children’s Medical Foundation for 2008-2009. Four Texas credit unions also received the award:
* Coastal Community FCU, Galveston; * Coastal Community and Teachers FCU, Corpus Christi; * DATCU, Denton; and * Mobiloil FCU, Beaumont.
Coastal Community was recognized for its efforts to help members during Hurricane Ike last year. Mobiloil FCU was noted for participating in a forestry project with elementary school students. Coastal Community and Teachers was honored because of its “Steppin’ Up and Out for Kids” fundraiser, while DATCU was recognized for its Apple Tree project to help students from low-income families receive school supplies, clothes and shoes. DATCU also received first place in the Louise Herring Award for Philosophy in Action for its financial literacy efforts. A+ FCU in Austin is the Desjardins Youth Financial Education Award recipient for its efforts to teach youth about money and help them develop strong savings habits, TCUL said.

Maine CUs youth fin ed efforts featured on radio

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WESTBROOK, Maine (9/2/09)--The Maine Credit Union League participated in radio interviews to discuss the teaching and learning opportunities that back-to-school shopping can offer to help children better understand personal finance and money management. Jon Paradise, league governmental and public affairs manager, told parents how to incorporate simple financial skills and topics into a back-to-school shopping trip. In separate interviews that aired recently on the morning shows of two of the top stations in the Augusta/Waterville radio markets, he discussed setting a budget, taking advantage of coupons and sales, and getting the most value and return on spending. “Helping children of all ages better understand money does not have to only happen in schools but can be incorporated in simple, everyday events and activities,” Paradise said. “Making kids a part of shopping is an easy way to introduce and strengthen fiscal responsibility concepts in a way in which it can be fun and educational.” The interviews also referenced the free resources that the league and Maine’s credit unions offer for youth financial education, including fitness fairs held throughout the state, in-school presentations and a growing clearinghouse of resources and ideas on the league’s Youth Financial Services link on the league’s website. Jon James, co-host of the Moose Morning Show on 92 MOOSE radio in Augusta, one of the stations that aired the interview, applauded Maine credit unions for “taking the initiative to look for ways in which kids can be exposed to financial education by bringing attention to tasks and activities that parents can talk and work with their children on. “Credit unions are doing a great service by bringing awareness to this issue and offering ways in which we can engage our children and help them become financially responsible and successful adults,” he added. “As a parent, I really appreciate that.”

Calif.Nev. leagues Hertz offer rental discounts

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ONTARIO, Calif. (9/2/09)--California and Nevada Credit Union Leagues staff and member credit unions can receive discounts on rental cars through a partnership with the leagues and Hertz Corp. Staff and credit union members can receive discounts between 5% and 15%, depending on the vehicle, by using a discount program code--available on the leagues’ website-- when they rent cars. The leagues are developing marketing materials for credit unions to advertise the discounts to their members. Hertz is a rental car company with more than 8,100 locations nationwide and in 148 countries.

Top 10 News Now stories for August

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MADISON, Wis. (9/2/09)--Stories about the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, which went into effect last month, dominated five of the 10 top News Now stories for August. The Credit CARD Act sets rules for card companies including those that arbitrarily change interest rates and terms on cards with existing balances. A story about Credit Union National Association (CUNA) President/CEO Dan Mica stepping down from his post in 2011 was the 12th most read story of August. Here are the top 10 most requested News Now stories during July. Use the links to read the stories online. 10. Letter to editor questions CU/bank merger AUGUSTA, Maine (8/11/09)--A letter to the editor appearing in the Saturday Kennebec Journal questioned Kennebec Valley FCU's proposed merger with Kennebec Savings Bank. 9. Dodd urges Fed to extend CARD Act deadline for CUs WASHINGTON (8/13/09)--Working closely with the Connecticut Credit Union League, Senate Banking Committee Chairman Chris Dodd (D-Conn.) yesterday urged the Federal Reserve Board to provide relief to credit unions regarding the 21-day rule under the CARD Act as it applies to open-end plans other than credit cards. 8. Eight former CU employees under prohibition orders ALEXANDRIA, Va. (8/13/09)--The National Credit Union Administration (NCUA) has issued orders prohibiting eight individuals from participating in the business of any federally insured financial institution. 7. Fed to CUNA: CUs have some leeway on 21-day rule WASHINGTON (8/19/09)--The Federal Reserve Board on Tuesday reiterated that credit unions will be allowed to be technically "inconsistent" with the 21-day requirement under the new Credit Accountability, Responsibility and Disclosure (CARD) Act for a "short period of time." 6. CFA asks Fed to extend CUs’ open-end credit deadline WASHINGTON (8/12/09)--The Consumer Federation of America Tuesday has sent letters asking that credit unions be granted more time to comply with the 21-day Credit CARD Act notice requirement for open-end plans other than credit cards. 5. CUNA, CUs rebut USA TODAY item NEW YORK (8/4/09)--CUNA is providing resources so leagues and credit unions can answer questions that may be prompted by a front-page article in Monday's USA TODAY that was critical of some credit unions' payday loan alternatives. The article cited the loans of a single credit union in Nevada. 4. CUNA doc helps CUs cope with CARD Act regs WASHINGTON (8/6/09)--CUNA is working for legislative or regulatory relief for the by-now-well-known 21-day notice provisions for open-end credit plans, other than credit cards set, set to take effect Aug. 20. Meanwhile, however, CUNA has created a compendium of information to help credit unions tackle the "horrendous" compliance challenges that loom ahead. 3. IRS issues a new UBIT opinion WASHINGTON (8/5/09)--The Internal Revenue Service has released a new Technical Advice Memorandum stating that income derived by state-chartered credit unions from shared-branching arrangements, management services to other credit unions, certain CUSOs, and sales of financial management services and certain insurance products are subject to unrelated business income tax. 2. 21-day rule: CUNA urges CUs ‘document everything’ WASHINGTON (8/20/09)--Starting today, periodic statements sent to members on their open-end loans must be provided at least 21 days before the payment due date in order for a credit union to charge a late fee, report the account as delinquent to credit bureaus, or impose a penalty interest rate. 1. Credit CARD Act: CUNA addresses CUs’ FAQs WASHINGTON (8/18/09)--CUNA has prepared a document to assist state leagues and credit unions with credit unions' questions regarding CARD Act provisions--especially on the 21-day periodic statements provision.

Bruen TUCOEMAS FCU honored for assisting small CUs

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RANCHO CUCAMONGA, Calif. (9/2/09)--The California Credit Union League’s 2009 Kim Bannan Eternal Flame Awards went to Eric Bruen, CEO of Desert Valleys FCU in Ridgecrest, and to TUCOEMAS FCU, Visalia. The awards recognize contributions to the success and future of Shapiro Group credit unions through the cooperative spirit of “People Helping People.” The Shapiro Group is a league group providing assistance to small credit unions. Kim Bannan was the league’s former vice president of credit union development and research and information. Bruen, this year’s recipient in the individual category, was recognized for his assistance to Shapiro Group credit unions in understanding net worth restoration plans and management of prompt corrective action concerns. One Shapiro Group credit union he helped was Palm Springs FCU--formerly Palm Springs City Employees FCU. Bruen helped the credit union--among other things--file its quarterly National Credit Union Administration 5300 reports, with its allowance for loan loss calculations. He also assisted and with issues related to the National Credit Union Share Insurance Fund. Bruen has served on the league board of directors and various league committees, including the Shapiro Group Advisory Committee. The award recipient in the credit union category, TUCOEMAS FCU, was honored because of assistance it provided to El Futuro CU, Porterville, in handling a Bank Secrecy Act (BSA) annual audit. El Futuro was unable to hire an accountant to complete the audit this year, so TUCOEMAS’ certified BSA officer and certified assistant BSA officers visited El Futuro and completed the audit and tested transactions. Also, TUCOEMAS has agreed to help El Futuro with BSA staff training and using online league resources. Both will be honored during the California and Nevada Credit Union Leagues’ Annual Meeting and Convention Nov. 16-18 in Las Vegas.

CU System briefs (09/01/2009)

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* NAPERVILLE, Ill. (9/2/09)--A food drive conducted by the Illinois Credit Union League collected 405 pounds of food for the hungry served by the Northern Illinois Food Bank (NIFB), said the league. "Hunger never takes a vacation and we received a great response by our staff to this first-time event," said Dan Plauda, ICUL president/chief executive officer. NIFB--a member of Feeding America (formerly America's Second Harvest, the Nation's Food Bank Network)--distributed more than 22.5 million pounds of food in 2008 to more than 520 sites in 13 northern Illinois counties … * CHICAGO (9/2/09)--Alliant CU Foundation announced its official launch of operations as a 501c3 not-for-profit organization by
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presenting a $35,000 grant to Operation HOPE, a national organization promoting financial literacy and economic opportunity. The foundation was established through a $4 million grant from Chicago-based Alliant CU to promote economic empowerment and self sufficiency of people in the communities where Alliant CU members and employees live and work. Pictured at the check presentation are, from left: Patricia Robles, program manager, Operation HOPE Chicago office; John HOPE Bryant, Operation HOPE founder and chairman; David W. Mooney, president/CEO of Alliant CU and foundation president; Wayne Rosenwinkel, foundation vice president; and Mona Leung, Alliant CU senior vice president/chief financial officer. (Photo provided by Alliant CU) … * FORT WORTH, Texas (9/2/09)--American Airlines FCU (AA CU) donated $40,000 Friday to the United Way
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of Tarrant County after raising the funds through the 13th Annual AA CU Golf Tournament May 15 in Grapevine, Texas, and through several fund-raising activities throughout the year. This year's tournament was sponsored by several credit union partners: CO-OP Financial Services; GlobalVision Systems Inc.; Fiserv; PSCU Financial Services Inc.; DMN3; BIT; Diebold; Intercontinental Warranty Service Inc.; Mercedez Benz USA; Manheim; Prime Alliance Solutions Inc.; Providence Title; and others. Here, Tim McKinney, left, president/CEO of United Way of Tarrant County, receives the check from AA CU President/CEO Angie Owens and AA CU eMarketing Manager Pedro Noda. (Photo provided by American Airlines FCU) … * HONOLULU 9/2/09)--Aloha Pacific FCU, Honolulu, announced Monday its second merger of the year, this time with First Insurance FCU (FI FCU), a $2.3 million asset credit union based in Honolulu. Aloha Pacific has more than $575 million in assets. The National Credit Union Administration has approved the deal, Aloha Pacific said. FI FCU was established in 1951 for employees of the insurance company. The combined credit union will have $578 million in assets, 31,000 members, 130 employees, seven branches and 45 ATM locations. Aloha Pacific intends to keep all of First Insurance's employees and a branch in the First Insurance building. Last December, Aloha Pacific merged with Inter-Island FCU (Pacific Business News Aug. 31) … * MANITOWOC, Wis. (9/2/09)--Dennis Lombard retired Friday from the position of president of UnitedOne CU, Manitowoc, after 34 years in the position. He is being succeeded by Kim Rooney, former vice president at the $178 million asset credit union. During Lombard's tenure, the credit union's assets grew from $3.1 million to $178 million in assets with 25,000 members in Manitowoc, Kewaunee and Sheboygan counties (htrnews.com Aug. 28) … * APPLETON, Wis. (9/2/09)--A 17-year-old former employee of the Green Bay branch of Appleton-based Fox Community CU was charged with robbing the credit union Thursday morning. Julian Rubio is charged with using wearing a bandanna, forcing his way into the credit union when employees opened for business and threatening them with a nine-inch knife. The robber removed money from the vault and escaped but was caught a short time later after employees said they recognized his voice. He had worked at the credit union as a co-op student from a local high school. The money, knife and clothing were recovered after Rubio led officers to a field where the items were buried (Green Bay Press Gazette Aug. 29 and wbay.com Aug. 28) …