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Filed on November 2, 2009, published the first business day after.
- Congress this week: More overdraft action, arguments near
- NCUA update: U.S. Central, WesCorp coping with liquidity issues
- Matz: Consumers want overdraft protection
- CUNA: 21-day CARD fix compliance issues
- NCUA opens registration for MBL webinar
- Inside Washington
- N.Y. Times notes CUs’ aggressive ads vs. giant banks
- Delayed retirements a succession-planning opportunity
- L.A. Council OKs bank development districts for CUs, banks
- Computerworld: CU shrinking its data center
- Data breach victims at 4 x greater fraud risk--study
- N.Y. CUs meet on Young Adult Outreach Initiative
- Maine league: H1N1/pandemic webinar sets record
- Dupaco Holiday Club deposits payout totals $3.3 million
- MECU pays loan interest rebate early--for holidays
- Altura CU helps U. employees through furloughs
- CU System briefs
- Market News
- News of the Competition
- CUs get expanded FinanceWorks for online banking
- CO-OP Network contract renewals are brisk
Congress this week: More overdraft action, arguments near
WASHINGTON (11/3/09)--The House Financial Services Committee heard testimony regarding on overdraft fees late last week, and the Senate Banking Committee may also discuss the issue by the end of the year, according to the Credit Union National Association's (CUNA) Vice President of Legislative Affairs Ryan Donovan.
While the timing of potential legislation addressing overdraft protections is not known, Donovan said that the House leadership generally only brings legislation to the floor if they expect that that bill would pass. House Financial Services Chairman Rep. Barney Frank (D-Mass.) last week indicated that overdraft legislation would not be on the committee's agenda this week.
Timing questions also surround the ongoing development of Consumer Financial Protection Agency (CFPA) legislation, and while the House may consider the CFPA legislation during the week of Nov. 16, there is not a definite timetable for the Senate version of the legislation.
While the exact schedule is not known at this time, President Barack Obama this week could sign H.R. 3606, the CARD Act Technical Corrections Act. The legislation, which was approved by the House earlier last month, made its way through the Senate late last week. In a letter sent Friday, CUNA President/CEO Dan Mica urged Obama to swiftly sign the bill, which corrects section 601 of the original Credit Card Accountability, Responsibility and Disclosure (CARD) Act and declares that a 21-day late-notice rule would apply not open-end credit in general, but only to credit cards.
While there is not a great deal of credit-union specific legislation on the House or Senate floor this week, Senate legislation that would extend unemployment insurance benefits, which includes an amendment that would extend the homebuyers tax credit, was discussed on Monday.
The House Financial Services Committee later today will also begin full mark-up sessions of H.R.3817, the "Investor Protection Act of 2009," H.R.2609, the "Federal Insurance Office Act of 2009," and the "Financial Stability Improvement Act of 2009."
NCUA update: U.S. Central, WesCorp coping with liquidity issues
ALEXANDRIA, Va. (11/3/09)--In its latest update on the status of the corporates, the National Credit Union Administration (NCUA) reported that "normal operations continue without interruption" at U.S. Central FCU (U.S. Central) and Western Corporate FCU (WesCorp) and both corporate credit unions, with the help of the agency, "have been effective in managing the seasonal liquidity pressures that occur during this time of the year."
Average share balances for the corporates have "remained relatively flat, removing some measure of liquidity pressures," the NCUA added.
The corporates also reported on their Other-Than-Temporary-Impairment (OTTI) charges for the recently-passed third quarter of 2009, with U.S. Central reporting a total of $320 million and WesCorp reporting a total of $356 million.
These charges "have fully exhausted Paid-in-Capital (PIC) I and PIC II balances and depleted MCS to $140 million as of September 30, 2009" for U.S. Central and "have fully exhausted all PIC and MCS balances, and created a retained earnings deficit of $4.6 billion as of September 30, 2009" for WesCorp, the NCUA reported.
Both U.S. Central and WesCorp have issued medium term notes to fund a total of $8.2 billion in outflows that will occur due to Credit Union System Investment Program (CUSIP) funds that will mature in January, February, and March of next year.
CUSIP funds are issued under the Temporary Corporate Credit Union Loan Guarantee Program (TCCULGP).
The NCUA in the release also confirmed that it will present its in-development proposed corporate credit union rule at its upcoming board meeting, scheduled for November 19th.
"The proposed rule reflects a comprehensive review of the existing corporate regulations," and "incorporated feedback obtained" from recently held online and live town hall meetings, the NCUA said.
Matz: Consumers want overdraft protection
ALEXANDRIA, Va. (11/03/09)—National Credit Union Administration (NCUA) Chairman Debbie Matz, speaking at a recent league chapter meeting, said she supports overdraft protection plans that are carefully done with minimal impact on members, such as limiting the number of transactions and corresponding fees per day.
Having worked at a credit union that offers overdraft protection, she said that she realizes that consumers would not be happy if the service was eliminated. Credit unions can provide a service members want that also is balanced and pro-consumer, she said.
Matz made her remarks last week to credit union representatives attending a Suburban/D.C. chapter meeting of the Maryland & D.C. Credit Union Association.
The league also reported that Matz acknowledged that the NCUA's Region II staffing changes have recently been in flux. She attributed this to needs in other regions, and said it is like "robbing Peter to pay Paul" to shift personnel resources. Matz added that the agency plans to bring Jane Walters back as Region 2 director in March 2010. Walters currently is serving as Acting Regional Director, Region V.
CUNA: 21-day CARD fix compliance issues
WASHINGTON (11/03/09)-Passage by the House and Senate of the CARD Act Technical Corrections Act is raising some questions by credit unions on what steps to "uncomply" with the former terms of the 21-day mailing provision. President Obama is expected to sign that bill, H.R. 3606, at any time and the Credit Union National Association (CUNA) has urged him to act quickly.
As a "technical correction" to the May 2009 law—known now mostly as the Credit CARD Act--to make clear that a 21-day late notice mailing requirement only applies to credit card accounts, "it's like the requirement never existed for the rest of open-end loans," explained Mike McLain, CUNA's Senior Compliance Counsel and Assistant General Counsel.
"The Federal Reserve Board doesn't have to amend its interim regulation because there's no longer a statutory basis for the 21-day mailing requirement as it applies to open-end loans other than credit cards."
Credit unions, however, spent the summer struggling to comply with the requirement to provide at least 21 days after mailing the periodic statement for any open-end loan before assessing late payments fees or imposing other penalties. Numerous compliance problems were identified affecting consolidated periodic statements, bi-weekly payment plans, existing due dates, and more.
"We know that credit unions expended a lot of time and resources to come up with a variety of ways to comply with this burdensome requirement, and now are asking what should they do next," said McLain.
Some credit unions simply followed a temporary solution permitted by the Fed in its interim rule to put a special notice on their periodic statements: Your Payment will not be considered as late for any purpose if it is made within 21 days of the date your statement is mailed or delivered, regardless of the due date that is reflected on the statement. "These credit unions can just stop putting this special notice on their periodic statements," McLain said.
Other credit unions decided to comply by listing several upcoming due dates on the current periodic statement to make sure that the member had plenty of notice. They also can just discontinue printing outward due dates on their periodic statements, noted McLain.
Once it was clear in July that the Fed would not resolve credit unions' problems with the 21-day mailing requirement by a regulatory interpretation, CUNA established as a high legislative priority to amend the CARD Act to resolve this problem. However, since no one could predict in August if and when a technical corrections bill would pass, many credit unions decided to make more comprehensive changes to their open-end lending terms and practices.
"Credit unions that took actions such as changing due dates to the end of the month or altering bi-weekly payment plans will have to make their own business decisions on whether they want to revert to what they did prior to August 20," said McLain. "As the Fed made clear this summer, changing a loan's payment due date is not an action that requires compliance with Regulation Z's change-in-terms rules."
However, McLain emphasized that there are certain situations where the 21-day notice will continue – beyond of course credit card programs, which are definitely subject to the 21-day notice.
"Some credit unions apparently provide a grace period for repayment before charging any finance charge on certain open-end loans they offer. If there is a grace period on any type of open-end loan, the credit union must give the member 21 days to take advantage of the grace period," McLain emphasized. "Congress was unwilling to change this aspect of the 21-day rule."
Anytime a lender decides to eliminate a grace period, a change-in-terms notice is required. If the loan is a credit card, the change-in-terms notice must be provided 45 days in advance (a rule that became effective August 20). If the loan is any other type of open-end loan, the change-in-terms notice must be given 15 days in advance – but starting July 1, 2010, all open-end loans will require a 45-day advance notice similar to the new credit card rule.
"Credit unions are also asking about potential liability between May 22 – the date the CARD Act became law -- and today if there were any issues about their compliance efforts with the now-repealed 21-day notice requirement," said McLain. "There isn't any potential liability, because the technical correction made clear that the 21-day notice provision in the CARD Act was always intended to only apply to credit card accounts."
NCUA opens registration for MBL webinar
ALEXANDRIA, Va. (11/3/09)—Registration is now open for the Nov. 18 member business lending webinar announced recently by National Credit Union Administration board member Gigi Hyland.
Entitled "Member Business Lending: Regulators' Perspective," the webinar is scheduled to begin at 1:00 p.m. (ET) and end at 2:30 p.m. ET. The webinar is free and open to the public.
The free webinar will provide guidance, best practices and insight into examination of member business lending, from both federal and state credit union regulators' perspectives. The webinar is designed to be interactive and Q&A will be an integral part of the presentation.
Panelists include:
- Linda Jekel, director of credit unions for the state of Washington, Division of Credit Unions;
- Erika Eastep, member business lending program officer, Office of Examination and Insurance, NCUA; and
- Linda Vick, former agricultural and commercial lending specialist and current problem case officer, Region IV, NCUA.
Inside Washington
- WASHINGTON (11/3/09)--Fannie Mae and Freddie Mac will be allowed to back larger loans for another year (American Banker Nov. 2). The House and Senate approved legislation Thursday allowing the government-sponsored enterprises to guarantee loans up to $729,750 through 2010. President Barack Obama is expected to sign the legislation soon. Without the legislation, the enterprises could only guarantee loans up to $625,000, their previous limit, at year-end ...
- WASHINGTON (11/3/09)--The Federal Reserve Board said it will not share the results of its latest review on industry compensation practices, citing the confidential nature of supervision (American Banker Nov. 2). The Fed reviewed compensation that targets executives and other employees of 28 large financial institutions. The Fed's decision not to publicize the review contrasts with its focus on transparency in the financial markets, observers said. Releasing compensation data is different from publicizing which financial institutions have enough capital to weather a financial crisis, said Fed Chairman Ben Bernanke, referring to the stress tests. Gil Schwartz, former Fed lawyer, said the public has a right to know which institution's compensation practices could affect the economy ...
N.Y. Times notes CUs’ aggressive ads vs. giant banks
MADISON, Wis. (11/3/09)--Some credit unions are using aggressive marketing campaigns to differentiate themselves from big banks, The New York Times business section noted Monday.
The Times interviewed Edward Speed, CEO of Texas Dow Employees CU in Lake Jackson, Texas, about the credit union's campaign to persuade consumers to take their cash out of banks, such as Wells Fargo, and turn it over to smaller, homegrown institutions like his credit union.
Speed saw an opportunity to capitalize on public outrage that resulted from taxpayer- funded bailouts that rescued big national banks, the newspaper said.
One of his ads targeting national banks reads: "Real Texans bank locally. We respectfully suggest they head on back home and make their profits where they live."
Launching a website, bankwithtexans.org, Speed implores consumers to switch their financial accounts from "out-of-state carpetbaggers" to local institutions, such as credit unions, that have eschewed the risky investments that have beset Wall Street.
Credit unions have remained loyal to practices such as accepting deposits and making old-fashioned loans, Speed told the paper. To read the full article, use the resource link.
The issue also had a four-page advertorial on credit unions in its business section that features prominent credit union leaders including Credit Union National Association President/CEO Dan Mica. News Now will include a report on it in Wednesday's issue.
Delayed retirements a succession-planning opportunity
MADISON, Wis. (11/3/09)--Credit unions look like they'll be in a good position when their current CEO retires. Roughly 63% of credit unions with $100 million or more in assets have a succession plan in place that specifies how the CEO will be replaced, says the Credit Union National Association's (CUNA's) recently released 2009-2010 CEO Total Compensation Survey.
Among credit unions in that asset group, 19% of credit union CEOs plan to retire in the next five years, down from 29% in 2008, says the new CUNA report. CEOs across the nation are delaying retirement, either because they experienced a loss in retirement savings or they are invested in seeing their organization through these trying times.
"Although the number of CEOs planning to retire in the near future has decreased, it is crucial that credit unions have a succession plan in place so that they are prepared for the CEO's departure," said Beth Soltis, senior research analyst for CUNA.
"Credit unions' performance will suffer if they do not have the right talent in place," Soltis added. "Considering today's shortage of qualified leaders, leadership development and succession planning should be a top priority for every organization."
The survey provides nationwide CEO compensation data for credit unions $100 million plus in assets. Results are categorized by asset size, region and other points of comparison to help credit unions attract or retain top CEO talent. The report--available in print or PDF format--also provides the monetary value of the total compensation package to help measure the bottom-line value of CEO compensation packages compared with other credit unions.
Those who purchase the report may also receive a discount on the CEO Total Compensation: Self-Selected Peer Analysis, a customized analysis that reveals CEO salaries, health plans, contract terms, bonuses, retirement plans and more for 10 or more credit unions that meet a credit union's own peer criteria. Each report is presentation ready.
For more information, use the resource link.
L.A. Council OKs bank development districts for CUs, banks
LOS ANGELES (11/3/09)--The Los Angeles City Council decided Friday to draft an ordinance that would benefit credit unions by creating districts for banking development throughout the city, according to a local business journal.
The Los Angeles Business Journal reported Friday that the ordinance, which was proposed in May, would provide property tax relief and expedite land-use approval for credit unions and banks to open branches in underserved areas. The ordinance is modeled after a similar measure passed in New York City.
The ordinance would guarantee municipal deposits for credit unions and banks. The city treasurer also will create a task force to work with department heads and council members to determine how to model the Los Angeles program after the New York City program.
Councilmember Richard Alarcon introduced the ordinance in response to the high number of payday lenders and check-cashing outlets in low-income areas of Los Angeles. The lenders and outlets outnumber credit unions and banks and charge customers unnecessary fees. Each year, unbanked families pay more than $100 million in fees because they don't have access to local banks, Alarcon said.
Los Angeles has more than 1,200 check-cashing outlets and payday lenders, according to Pew Charitable Trusts.
Computerworld: CU shrinking its data center
DENVER (11/3/09)--Credit Union of Colorado's information technology (IT) department is shrinking its data center footprint from 45-by-15-feet to 12-by-12 to help the credit union with its space needs in a tight economy, reports Computerworld (Nov. 2).
Tom Gonzalez, senior network administrator at the Denver-based credit union, told the publication that the data center is "returning" some of its space to the company and doing more with less.
Computerworld noted that other IT managers are helping their companies by making their data centers smaller by using virtualization, high-density and multifunction hardware, alternative energy sources and modular design techniques. These make a data center more efficient and less costly.
At the credit union, server virtualization helped lower space required from 40 boxes stored to just a couple. Twelve racks of information will consolidate to four, freeing up space for the credit union's departments that provide "member-facing services."
For the $881 million asset Credit Union of Colorado, shrinking the data center eliminated 33 power ports and two circuits, said Gonzalez. However, the credit union doesn't have power-measurement tools so it can't quantify the actual energy and cost savings.
The biggest challenge in downsizing a data center is planning and making sure every last piece fits and there's no wasted space, said Gonzalez. He also noted that a smaller data center doesn't reflect on the skills or work his team performs. "We're judged on how well we do our job, not on how much area we consume," he told the publication.
Data breach victims at 4 x greater fraud risk--study
SAN FRANCISCO (11/3/09)--Consumers who received a data-breach notification within the past year are four times more likely than typical consumers to have been victims of identity fraud, says new research. However, consumers rarely attribute the fraud to their data breach exposure.
"Data breach notifications are intended to help consumers take protective action," said Mary Monahan, managing partner and research director at Javelin Strategy & Research, which conducted its third annual survey of nearly 5,000 U.S. consumers.
"Notification is critical because consumers are over four times more likely to encounter actual fraudulent transactions if they receive a data-breach notification," Monahan said in a press release. "But our research shows a disconnect between breach notifications and consumer awareness of risk, which results in individuals not being adequately protected."
During the past three years, roughly 11% of consumers received a breach notification, said the report. More than one-third of breach victims experienced exposure of their Social Security numbers, and 15% had their ATM personal identification numbers (PINs) compromised.
Despite almost 20% of breach victims suffering some kind of fraud in the past year, only 2% attribute their fraud to the breach.
"Consumers who receive notification of breaches need to be better protected by resolving the disconnect between breach notification and consumer awareness of actual fraud risk," said Javelin's Risk, Fraud and Security Analyst Robert Vamosi.
Vamosi told SCMagazineUS.com that results are not a blip. In 2007 and 2006, Javelin saw a similar pattern.
He noted the correlation between receiving a breach notification letter and the increased risk of suffering an actual identity theft may be do to the fact that alerts many times are sent only to people severely impacted by a breach.
N.Y. CUs meet on Young Adult Outreach Initiative
ALBANY, N.Y. (11/3/09)--Participants in the Credit Union Association of New York's Young Adult Outreach Initiative recently held their final session at the association's Albany headquarters. The session was the culmination of a five-month program focused on the young adult market.
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| The Credit Union Association of New York recently wrapped up its Young Adult Outreach Initiative. From left are: Kip Summerlin, Columbia Greene FCU; Jennifer Habecker, Family First FCU; Teri Mulverhill, North Franklin FCU; Jody Carpenter, UFirst FCU; and Megan Armstrong, Sunmark FCU. (Photo provided by the Credit Union Association of New York)
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In partnership with the Filene Research Institute and through REAL Solutions, the association offered the free program to New York credit unions interested in pursuing the young adult market to grow membership, and recruiting and retaining talented young professionals and volunteers.
The youth program began in June with an informational webinar by Ben Rogers, research director for the Filene Research Institute. Rogers led the program's live webinars and in-person meetings.
"Credit unions that look beyond the membership challenge to provide great opportunities for young professionals and young volunteers will innovate faster and position themselves as financial institutions of choice for consumers," Rogers said.
Forty-five individuals from 28 credit unions participated in the program. They focused on assessments, brainstorming ideas about young adult issues, goal setting, identifying and/or creating transaction products and loan products for the young adult market, and using social media.
During the final session, participants presented the findings of their young adult focus groups, their goals, what they've accomplished and their young adult outreach plans for 2010 and beyond.
Each credit union recognized the importance of product bundling to attract its target audience and using parents, who are already loyal credit union members, to reach the youth market. Participants also found that credit unions of various sizes and memberships can use the same principles to attract youth.
Participants also reported that their credit union CEOs and board members were more supportive of their young adult initiatives after seeing findings and future outreach plans they created as part of the program.
"We felt the Filene program on youth outreach hit all of the important aspects that credit unions are searching for within this demographic," said Sue Siegel, Sunmark FCU senior vice president of marketing and retail operation. "Credit unions are making huge strides in reaching out to the youth marketplace."
Maine league: H1N1/pandemic webinar sets record
WESTBROOK, Maine (11/3/09)--More than 200 individuals participated in a recent Maine Credit Union League webinar last week about the H1N1 virus and pandemic planning.
The 90-minute free presentation were offered to Maine's 67 credit unions. The webinar covered H1N1 and seasonal flus in Maine, recommendations on preventing the flu, preparing for its potential impact on staff, tips for communicating information with internal and external audiences, and legal and human resource procedures and policies that credit unions should follow with staff and members.
Presenting information during the webinar was Fran Simmler, business continuity planning coordinator for Synergent and the Maine league; league Jon Paradise, governmental and public affairs manager; and Robert Bower Jr., attorney with Norman, Hanson and DeTroy.
After the webinar, the league unveiled a new page on its website to help credit unions with pandemic planning. The page includes a Pandemic Plan template, checklist, communications templates, a PowerPoint presentation from the webinar, and links to other resources.
"One of our roles is to serve as a resource for our member credit unions and this was an opportunity to try and help provide some answers to the many questions credit unions have about this issue," said John Murphy, league/president CEO.
Dupaco Holiday Club deposits payout totals $3.3 million
DUBUQUE, Iowa (11/3/09)--More than $3.3 million was injected into Dubuque, Iowa's local economy when Dupaco Community CU paid out this season's Holiday Club deposits to more than 3,400 Dupaco members.
The funds were deposited into members' share draft checking or savings accounts on Saturday.
Members traditionally open Holiday Club accounts in November with small deposits made into the account weekly or bi-weekly throughout the year. On or about the following Nov. 1, all savings, plus accumulated dividends, are paid out automatically to the depositor.
Dupaco Holiday Club accounts are the perfect way for individuals to learn the art of thrift and avoid a post-holiday "financial hangover," according to Dupaco Community CU President/CEO Bob Hoefer.
"The habit of systematically saving money is a core principle of Dupaco and its Money Makeover," Hoefer said. "This regular practice of thrift through a Holiday Club account--which also earns daily dividends year round--better prepares members when the holidays arrive."
Dupaco began offering its Holiday Club account in 1954. Since 1999, Dupaco members have saved more than $33 million through the program. The average Holiday Club payout this year is $971--up $65 from $906 during 2008.
However, Hoefer pointed out the larger average Holiday Club payout doesn't necessarily mean people will spend more on gifts this year.
"Based on our experiences, concerns about the economy mean Dupaco members are approaching the holidays with a more disciplined approach to spending," he said. "Some will use holiday savings to purchase necessities. Overall, we'll see consumers will rely less on credit cards to purchase holiday gifts."
Dupaco expanded the "save for your goals" thrift concept in 2000 when it launched a variation of the Holiday Club called "You-Name-It" savings accounts.
The You-Name-It accounts allow members to save for specific goals--such as a vacation, furniture or a child's braces--and automatically set aside money into an account and name it whatever they choose, such as "2010 Family Vacation to Florida," "New Red Leather Couch," or "Jimmy's Braces."
Members can open an unlimited number of these accounts with no minimum balance, Dupaco said.
MECU pays loan interest rebate early--for holidays
BALTIMORE (11/3/09)--Municipal Employees CU (MECU) of Baltimore Thursday paid its members loan interest rebates totaling $1.14 million, a month earlier than usual.
MECU has paid its members a cash bonus with loan interest rebates and extraordinary dividends every year since 1981. In 2007, the MECU board of directors decided to pay half the bonus in June and the second half in December, a practice that continues today.
"We decided to pay our members the loan interest rebate early this year to help families shopping for the holidays," said MECU's Board Chairman Herman Williams Jr. "This has been a tough year for some of our members, and I'm glad we're in a position to do something to help."
"MECU will also pay our members an extraordinary dividend at the end of December, when it's usually paid," said Bert J. Hash Jr., MECU president/CEO. "That will be approximately another million dollars returned to our members. It's at times like this that the benefits of credit union membership really stand out."
MECU has $956.2 million in assets.
Altura CU helps U. employees through furloughs
RIVERSIDE, Calif. (11/3/09)--Altura CU has created a special loan program to help University of California Riverside (UCR) staff taking furloughs this school year.
State colleges and universities have asked employees to take unpaid days during the 2009-2010 school year to deal with the state budget crisis and cuts in funding. Most UCR employees will have to take between 10 and 26 days without pay.
The "UCR Furlough Loan Program" offers UCR employees tools to help them deal with what is likely to be a significant financial crisis, said Altura. It offers:
- The ability to borrow up to $10,000 from a guaranteed line of credit with rates as low as 3.49% annual percentage rate;
- Repayment terms of up to 36 months, with a 12-month draw period;
- Waiver of a $55 loan processing fee;
- No pre-payment penalty for early pay-off; and
- Online transfers to make it easy to manage draws on the line of credit and to set up recurring transfers for each pay period.
"As a partner of UCR, Altura is concerned about the impact of the recent pay cuts and furloughs on UCR employees," said Jennifer Binkley, Altura executive vice president. "We developed a program that will allow UCR employees to borrow the amount their pay is reduced from a line of credit each pay period. The tool will allow for personal budgeting ease during a difficult time."
As Altura members, UCR employees also qualify for the VIP Checking account, which features a free interest-bearing checking account and a Visa credit card. They also can attend free financial workshops on budgeting, credit scores and investment strategies, including one at the local university branch for UCR employees.
A financial fitness program with educational materials and online courses, and access to certified financial counseling are available for members on Altura's website, Binkley added.
CU System briefs
- PENROSE, N.C. (11/3/09)--Carolina Mountains CU (CMCU), based in Penrose, N.C., has merged with Durham, N.C.-based Self-Help CU, effective Sunday. "For 35 years our first priority has always been to provide outstanding financial service to our members. By merging with Self-Help CU, we remain dedicated to that mission. We believe wholeheartedly that the decision to merge will not only increase the financial stability of CMCU, but also expand the ability of CMCU to serve communities throughout Western North Carolina," said CMCU CEO Diane Rogers. CMCU has four branches serving more than 7,000 western North Carolina residents and assets of $43 million. It will operate as a division of Self-Help, joining three eastern North Carolina credit union divisions: Cape Fear CU, Scotland Community CU and Wilson Community CU. The merger will give Self-Help a balanced presence of full-service credit unions in western and eastern parts of the state, the credit unions said ...
- RALEIGH, N.C. (11/3/09)--Nearly 1,000 members attended State Employees' CU's 2009 Annual Meeting Oct. 20 in Greensboro, N.C. SECU 2008-2009 Board Chairman
Shirley Bell noted that more than 3,000 volunteers serve the Raleigh-based credit union. Three volunteers--Grady Cooper, Charles Koonce and William Locus--were honored with a video tribute and board resolutions for their cumulative volunteer service of more than 100 years. Irv Ellington and Dr. Al Wentzy were honored by the North Carolina National Guard for their commitment to several of the credit union's initiatives supporting National Guard families in the state. The credit union also elected a new board. Officers include Jim Barber, chairman; McKinley Wooten, vice-chairman, and Jim Johnson, secretary-treasurer. (Photo provided by State Employees' CU) ...
- SLIDELL, La. (10/3/09)--Adept thieves broke into an ATM at ASI CU Saturday after 11 p.m. by drilling into the combination lock to the ATM's safe. Slidell, La., police said the thieves disabled the ATM's video cameras around 11:30 p.m., and did not force their way into the ATM. The suspects either had a key to the machine or they picked the exterior lock. Then they drilled into the safe's combination lock, opened the door and took an undetermined amount of money. Police estimate the heist took about nine minutes (St. Tammy News Nov. 2) ...
- RICHLAND, Wash. (11/3/09)--HAPO Community CU donated funds so a children's football team could receive awards after $3,000 of the team's funds went missing. The Kennewick Huskies Grid Kids team bookkepper, Charity A. Smith, 35, of Kennewick, has been charged with second-degree theft. The money was collected to pay for expenses throughout the year, including game and practice jerseys, T-shirts, hats and sweatshirts for 90 players and their families. HAPCO said Friday it would donate $250 to cover the cost of the T-shirts (Tri-City Herald Oct. 31) ...
- FORT WAYNE, Ind. (11/3/09)--A former CEO of General CU, an $83.4 million asset credit union based in Fort Wayne, Ind., was sentenced to two years in a state prison for embezzling more than $1.57 million from the credit union. David L. Thieme, 50, of Huntertown, pleaded guilty in September to the felony. He was CEO of the credit union from 2004 until he was fired in April 2008. He had been with the credit union since 1988. Thieme also was sentenced to two years of probation and restitution of the $1.57 million. He repaid $982,000 to GCU within a week of his dismissal, said The News-Sentinel (Oct. 31). Court records indicated that Thieme made more than 6,000 unauthorized loan transactions, many of which violated GCU policies and in several instances Indiana law. The theft resulted in losses to GCU from underperforming or nonperforming loans of nearly $2.5 million. His actions included masking loan delinquencies by using general-ledger funds to make payments on them; pulling the trigger on undocumented, interaccount transfers or loans involving unrelated parties or trusts; and approving account maintenance transactions such as modifying obligation dates or delaying payment dates to avoid a loan review, said the article ...
- AUGUSTA, Maine (11/3/09)--Maine credit unions kicked off the Eighth Annual Ending Hunger Walking Tour Friday at Maine State CU in Augusta. Representatives
joined Brenda Davis, executive director of Cross Roads Ministries, an Old-Town-based hunger agency that serves Eastern Maine, who will make the month-long journey. The walk is expected to encompass more than 650-750 miles and visit a record 62 communities as well as every county. At each credit union she visits, Davis will pick up a contribution from the Maine Credit Unions Campaign for Ending Hunger, which as pledged nearly $25,000. Pictured at the kick-off are from left, Cindy Barnes of Maine State CU, Davis and the Wompkee, the longest- running, continuous character in the Macy's Thanksgiving Day Parade. Credit unions have partnered with the Wompkee and are selling finger puppets and DVDs to benefit the end-hunger campaign. (Photo provided by the Maine Credit Union League) ...
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Market News
MADISON, Wis. (11/3/09)
- Buoyed by the biggest jump in housing construction in more than six years, U.S. construction spending unexpectedly rose in September. The September increase was largely due to residential home builders pushing to finish projects before the possible end of the first-time home-buyers' $8,000 tax credit, analysts said. The 0.8% increase--the largest since September 2008--followed a revised 0.1% drop in August previously reported as a 0.8% gain, according to Commerce Department figures released Monday. Spending on government and residential projects rose, while outlays for private commercial construction fell for a fifth consecutive month, the department said. Total construction spending for September tallied $940.3 billion compared with the revised figure of $933 billion in August (The New York Times, Bloomberg.com and Moody's Economy.com Nov. 2) ...
- For the eighth consecutive month, pending U.S. home sales increased, marking the longest streak of gains since the measurement began in 2001, according to the National Association of Realtors (NAR). The Pending Home Sales Index, a forward-looking indicator based on contracts signed in September, rose 6.1% to 110.1 from 103.8 in August, and is 21.2% higher than September 2008 when it stood at 90.9. The gain from a year ago is the largest annual increase on record, and the index is at the highest level since December 2006 when it was 112.8. Lawrence Yun, NAR chief economist, said the momentum is understandable. "What we're witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month," he said. "Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery." For Pending Home Sales Rise for Record Eight Straight Months, use the link ...
- Ford Motor Co. posted a third-quarter profit of nearly $1 billion--the first profitable quarter in its North American unit in more than four years. The quarterly gain was due to cost cutting, higher pricing and increased market share, the automaker said. On Monday, Ford posted a profit of $997 million--or 29 cents per share--compared with a year-ago loss of $161 million--or seven cents per share. However, Ford is warning that a stronger North American operation will not be able to mitigate the European market--which is anticipated to be steeply down for the quarter and into 2010 (The Wall Street Journal and The New York Times Nov. 2) ...
- The federal deficit is too high, according to Treasury Secretary Timothy Geithner, who appeared Sunday on NBC's "Meet the Press" (The Associated Press Nov. 2). Geithner said President Barack Obama wants to deal with the deficit in a way that does not add to the tax burdens of those making less than $250,000 a year. He also noted that the administration is focused on economic recovery, job creation and helping small businesses. Despite the fact that 115 banks failed this year, Geithner said he thinks there is a dramatic improvement in confidence with private capital in the financial system. However, he warned that if banks "overcorrect" and don't take on enough risk, the economy may not recovery as quickly. "We need them to take a chance again on the American economy," he said ...
News of the Competition
MADISON, Wis. (11/3/09)
- Independent U.S. mortgage bankers and subsidiaries made an average profit of $1,358 on each loan they originated in the second quarter of 2009--up from an average profit of $1,088 per loan, according to the Mortgage Bankers Association's (MBA) most recent Quarterly Mortgage Bankers Performance Report. The report provides performance measures for independent mortgage banks, and subsidiaries of banks, thrifts and hedge funds. "The refinance boom continued in the second quarter of 2009," said Marina Walsh, MBA's associate vice president of industry analysis. "The big increase in production volume allowed lenders to spread their fixed costs over a larger number of loans, thus increasing net profits. At the same time, purchases picked up as homebuyers with good credit took advantage of low interest rates. Not only do we see an uptick in average borrower FICO, but we see pull-through rates at close to 73% in the second quarter from about 67% in the first quarter. These factors contributed to the further drop in production operating expenses per loan." For MBA Study Shows Continued Profits For Independent Mortgage Bankers and Subsidiaries, use the link ...
- Federal bank regulators closed nine more U.S. banks Friday and appointed the Federal Deposit Insurance Corp. (FDIC) as receiver. U.S. Bank of Minneapolis would assume the banks' deposits, FDIC said. The nine banks are owned by parent company FBOP Corp. of Oak Park, Ill. The most recent closures bring the tally of failed U.S. banks this year to 115. As of Sept. 30, the nine banks had combined assets of $19.4 billion and deposits of $15.4 billion, FDIC said. The closures will cost the deposit insurance fund an estimated $2.5 billion, FDIC added (Triangle Business Journal Nov. 2 and MarketWatch Oct. 30) ...
- In a final move to restructure and keep its doors open, CIT Group Inc. Sunday filed for bankruptcy protection. CIT needs to maintain its customer base as it tries to rehabilitate itself under finance Chapter 11 protection, analysts said. The lender to nearly one million small and midsize businesses obtained support from roughly 90% of voting debt holders for a prepackaged reorganization plan. The plan could allow CIT to move rapidly through Chapter 11 and emerge with a new business model by the end of 2009, analysts said. The plan is designed to allow bondholders to exchange their debt for new debt that matures later--and almost all the equity--in a reorganized CIT, analysts said (The Wall Street Journal Nov. 2) ...
CUs get expanded FinanceWorks for online banking
CALABASAS, Calif. (11/3/09)--Digital Insight announced that FinanceWorks, an online financial management solution, is now available for credit unions that do not use Digital Insight's Internet banking platform.
FinanceWorks, powered by Quicken, gives users control over their financial decisions by accessing account information from more than 12,000 financial institutions and credit card sites. Users receive a view of their cash flow and spending habits, and can manage their budget.
FinanceWorks's data on early users indicate that they:
- Are up to four times more profitable than the average credit union or bank customer. They have twice as many accounts, 30% higher loan balances and higher incomes;
- Log into online banking twice as often as active online banking users, and are more active online bill payers--61% versus 41%;
- Are likely to recommend their financial institutions based on the solution.
About 80% of Americans say their financial institution's online channel is the best place to manage their finances, yet 27% say they manage their finances online, Digital Insight said.
CO-OP Network contract renewals are brisk
RANCHO CUCAMONGA, Calif. (11/3/09)--CO-OP Financial Services received 21 contract renewals from credit union clients for its CO-OP Network Full Processing service since July 1.
The service provides credit unions with electronic funds transfer processing for ATM transactions.
Credit unions renewing their contracts include:
- San Diego (Calif.) County CU;
- Addison Avenue FCU, Palo Alto, Calif.;
- South Carolina FCU, North Charleston, S.C.; and
- Honda FCU, Torrance, Calif.
Many clients who renewed their contracts also use CO-OP's Signature Debit Card Processing. Many chose to renew the debit service, CO-OP said.
CO-OP Financial Services, Rancho Cucamonga, Calif., offers 28,000 surcharge-free ATMs through the CO-OP Network.
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