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NEW YORK (CBS.MW) -- A new technology is shortening the time it takes a check to clear the bank. Businesses that adopt something called accounts receivable check conversion, will save time and money in applying customer's payments to their accounts. Instead of sending back your check, the process takes a snapshot of the payment and sends an electronic version through an automated clearinghouse.

Many people are used to checks taking about six days before the amount is deducted from your checking account. For customers of mortgage, utility, and credit card companies that use the faster, less expensive process, the lag time will drop to one or two days.

Because a billpayer's paper check is destroyed after it has been electronically reproduced, some people have been frustrated when they find out the check won't be returned to them, according to the results of initial pilot programs. Another common complaint has been that people can't tell where the payment is reflected in their statements because the check may show up as an electronic transaction instead of a numbered check.

Further tests of the system have produced fewer consumer complaints, and more companies are turning to this faster processing method of processing payments by check.

Cold wind blowing for golf stocks

SAN FRANCISCO (CBS.MW) - The shoulder-deep fescue, whipping winds and cavernous sand traps tormenting PGA Tour players at the British Open this week pales compared to the hazards faced by investors in the golfing stock game.

With the continuing dominance of high-profile names like Tiger Woods and Annika Sorenstam along with the emergence of youngsters like Michelle Wie, star power isn't lacking in the sport.

What has been lacking, however, is the number of leisurely ball strikers taking it to the links -- a key gauge as to the health of the broad golf market.

"Rounds played has been down for three years now," said Tom Stine, partner at research firm Golf Datatech. The drivers: A weaker economy, Sept. 11, the Iraq war and less willingness to travel on golf getaways.

Sunnier skies

Still, consumer confidence is rising, the stock market is firming up, and the East Coast has emerged from its rainiest spring in decades. In lockstep with the improving economic climate, golf sales also have shown some improvement.

"Retail sales, in general, are holding steady." Stine said. "There have been down times and down months, but people are spoiled when they don't see that kind of growth [like in the late nineties]."

Club manufacturers like Callaway and Taylor Made as a group have increased unit sales and overall revenue, with particular strength in drivers and woods, Stine said.

Does that mean it's time to take a flyer on your favorite golf equipment or apparel company? After all, grandpa always said, "invest in what you know," and the average golf addict knows his or her equipment.

But beware. Even if these stocks have bottomed, it doesn't mean a rebound is on the way, said Bud Leedom, an analyst at Wells Fargo.

"With the concentration of market share among the top five players and the rising cost of advertising and marketing," he said, "the heyday of the golf market is far off into the sunset. Not to say we won't see another meteor at some point, its just exceedingly tough out there."

Bad lies

Since Callaway went public in early 1992, followed by a proliferation of pretenders, few golf-related companies have been able to maintain a successful run.

Look at the fate of Adams Golf . The Tight Lies creator rode infomercial acclaim to a screaming stock climb, only to chili dip into the realm of penny stock. Orlimar's TriMetal run, with that fancy Alpha Miraging technology, was also fleeting.

The bogeys don't end there. Club maker Women's Golf Unlimited faded into the over-the-counter collection area after having two runs into double-digits during the nineties. National Golf Properties, a real estate investment trust, also crumbled. The company was purchased by a Goldman Sachs-led investor group, but only after its precipitous fall.

Here's where many of these companies stand today relative to their all-time high:

The big dogs

Last month, Callaway, already the dominant player in the driver realm, made a bold move to bolster its ailing golf ball business by bidding $125 million on Top-Flite, maker of the Top-Flite, Strata and Ben Hogan brands.

The all-but-completed deal would push Callaway into second position in the golf-ball market, trailing only Titleist. But if sniffing out the next acquisition is your game, don't waste your time.

"Top Flite is an isolated incident," Leedom said. "The company was imploding under the weight of the debt. I don't see a wave of consolidation, especially with 3 of the top 5 club makers already owned by conglomerates."

If you're looking to tap into the club and ball market, your options, as far as a pure play, are limited beyond Callaway. In other words, your investment in Titleist and Foot Joy would be hitched to Fortune Brands. Cleveland to Rossignal. Nike to all things Nike. Taylor Made to Adidas Salomon .

In all these cases, the golf segment is only a small portion of the company's overall business. But considering the recent performance of most golf stocks, being married to more than the golf market isn't a bad thing.

Conglomerates that have chipped into the golf market have fared relatively well in the past 10 years. Fortune Brands is up 150 percent at $54. Adidas Salomon has jumped more than 50 percent to $42.50. Nike has tripled to $53 and, with those deep Nike pockets, the shoe giant is poised to further its relatively meager presence in the sector.

"This is a very mature slow to marginal growth market," said Tim Conder, analyst at A.G. Edwards. "Consolidation inevitably happens. Callaway, Titleist, Taylor made and Nike will be there. This should help bring more rationality to actions by other manufacturers and stabilize the market."

Bottom line: when it comes to lobbing money into golf stocks, considering laying up. Like the British Open, par is at a premium.

Cold wind blowing for golf stocks

SAN FRANCISCO (CBS.MW) - The shoulder-deep fescue, whipping winds and cavernous sand traps tormenting PGA Tour players at the British Open this week pales compared to the hazards faced by investors in the golfing stock game.

With the continuing dominance of high-profile names like Tiger Woods and Annika Sorenstam along with the emergence of youngsters like Michelle Wie, star power isn't lacking in the sport.

What has been lacking, however, is the number of leisurely ball strikers taking it to the links -- a key gauge as to the health of the broad golf market.

"Rounds played has been down for three years now," said Tom Stine, partner at research firm Golf Datatech. The drivers: A weaker economy, Sept. 11, the Iraq war and less willingness to travel on golf getaways.

Sunnier skies

Still, consumer confidence is rising, the stock market is firming up, and the East Coast has emerged from its rainiest spring in decades. In lockstep with the improving economic climate, golf sales also have shown some improvement.

"Retail sales, in general, are holding steady." Stine said. "There have been down times and down months, but people are spoiled when they don't see that kind of growth [like in the late nineties]."

Club manufacturers like Callaway and Taylor Made as a group have increased unit sales and overall revenue, with particular strength in drivers and woods, Stine said.

Does that mean it's time to take a flyer on your favorite golf equipment or apparel company? After all, grandpa always said, "invest in what you know," and the average golf addict knows his or her equipment.

But beware. Even if these stocks have bottomed, it doesn't mean a rebound is on the way, said Bud Leedom, an analyst at Wells Fargo.

"With the concentration of market share among the top five players and the rising cost of advertising and marketing," he said, "the heyday of the golf market is far off into the sunset. Not to say we won't see another meteor at some point, its just exceedingly tough out there."

Bad lies

Since Callaway went public in early 1992, followed by a proliferation of pretenders, few golf-related companies have been able to maintain a successful run.

Look at the fate of Adams Golf . The Tight Lies creator rode infomercial acclaim to a screaming stock climb, only to chili dip into the realm of penny stock. Orlimar's TriMetal run, with that fancy Alpha Miraging technology, was also fleeting.

The bogeys don't end there. Club maker Women's Golf Unlimited faded into the over-the-counter collection area after having two runs into double-digits during the nineties. National Golf Properties, a real estate investment trust, also crumbled. The company was purchased by a Goldman Sachs-led investor group, but only after its precipitous fall.

Here's where many of these companies stand today relative to their all-time high:

The big dogs

Last month, Callaway, already the dominant player in the driver realm, made a bold move to bolster its ailing golf ball business by bidding $125 million on Top-Flite, maker of the Top-Flite, Strata and Ben Hogan brands.

The all-but-completed deal would push Callaway into second position in the golf-ball market, trailing only Titleist. But if sniffing out the next acquisition is your game, don't waste your time.

"Top Flite is an isolated incident," Leedom said. "The company was imploding under the weight of the debt. I don't see a wave of consolidation, especially with 3 of the top 5 club makers already owned by conglomerates."

If you're looking to tap into the club and ball market, your options, as far as a pure play, are limited beyond Callaway. In other words, your investment in Titleist and Foot Joy would be hitched to Fortune Brands. Cleveland to Rossignal. Nike to all things Nike. Taylor Made to Adidas Salomon .

In all these cases, the golf segment is only a small portion of the company's overall business. But considering the recent performance of most golf stocks, being married to more than the golf market isn't a bad thing.

Conglomerates that have chipped into the golf market have fared relatively well in the past 10 years. Fortune Brands is up 150 percent at $54. Adidas Salomon has jumped more than 50 percent to $42.50. Nike has tripled to $53 and, with those deep Nike pockets, the shoe giant is poised to further its relatively meager presence in the sector.

"This is a very mature slow to marginal growth market," said Tim Conder, analyst at A.G. Edwards. "Consolidation inevitably happens. Callaway, Titleist, Taylor made and Nike will be there. This should help bring more rationality to actions by other manufacturers and stabilize the market."

Bottom line: when it comes to lobbing money into golf stocks, considering laying up. Like the British Open, par is at a premium.

Cold wind blowing for golf stocks

SAN FRANCISCO (CBS.MW) - The shoulder-deep fescue, whipping winds and cavernous sand traps tormenting PGA Tour players at the British Open this week pales compared to the hazards faced by investors in the golfing stock game.

With the continuing dominance of high-profile names like Tiger Woods and Annika Sorenstam along with the emergence of youngsters like Michelle Wie, star power isn't lacking in the sport.

What has been lacking, however, is the number of leisurely ball strikers taking it to the links -- a key gauge as to the health of the broad golf market.

"Rounds played has been down for three years now," said Tom Stine, partner at research firm Golf Datatech. The drivers: A weaker economy, Sept. 11, the Iraq war and less willingness to travel on golf getaways.

Sunnier skies

Still, consumer confidence is rising, the stock market is firming up, and the East Coast has emerged from its rainiest spring in decades. In lockstep with the improving economic climate, golf sales also have shown some improvement.

"Retail sales, in general, are holding steady." Stine said. "There have been down times and down months, but people are spoiled when they don't see that kind of growth [like in the late nineties]."

Club manufacturers like Callaway and Taylor Made as a group have increased unit sales and overall revenue, with particular strength in drivers and woods, Stine said.

Does that mean it's time to take a flyer on your favorite golf equipment or apparel company? After all, grandpa always said, "invest in what you know," and the average golf addict knows his or her equipment.

But beware. Even if these stocks have bottomed, it doesn't mean a rebound is on the way, said Bud Leedom, an analyst at Wells Fargo.

"With the concentration of market share among the top five players and the rising cost of advertising and marketing," he said, "the heyday of the golf market is far off into the sunset. Not to say we won't see another meteor at some point, its just exceedingly tough out there."

Bad lies

Since Callaway went public in early 1992, followed by a proliferation of pretenders, few golf-related companies have been able to maintain a successful run.

Look at the fate of Adams Golf . The Tight Lies creator rode infomercial acclaim to a screaming stock climb, only to chili dip into the realm of penny stock. Orlimar's TriMetal run, with that fancy Alpha Miraging technology, was also fleeting.

The bogeys don't end there. Club maker Women's Golf Unlimited faded into the over-the-counter collection area after having two runs into double-digits during the nineties. National Golf Properties, a real estate investment trust, also crumbled. The company was purchased by a Goldman Sachs-led investor group, but only after its precipitous fall.

Here's where many of these companies stand today relative to their all-time high:

The big dogs

Last month, Callaway, already the dominant player in the driver realm, made a bold move to bolster its ailing golf ball business by bidding $125 million on Top-Flite, maker of the Top-Flite, Strata and Ben Hogan brands.

The all-but-completed deal would push Callaway into second position in the golf-ball market, trailing only Titleist. But if sniffing out the next acquisition is your game, don't waste your time.

"Top Flite is an isolated incident," Leedom said. "The company was imploding under the weight of the debt. I don't see a wave of consolidation, especially with 3 of the top 5 club makers already owned by conglomerates."

If you're looking to tap into the club and ball market, your options, as far as a pure play, are limited beyond Callaway. In other words, your investment in Titleist and Foot Joy would be hitched to Fortune Brands. Cleveland to Rossignal. Nike to all things Nike. Taylor Made to Adidas Salomon .

In all these cases, the golf segment is only a small portion of the company's overall business. But considering the recent performance of most golf stocks, being married to more than the golf market isn't a bad thing.

Conglomerates that have chipped into the golf market have fared relatively well in the past 10 years. Fortune Brands is up 150 percent at $54. Adidas Salomon has jumped more than 50 percent to $42.50. Nike has tripled to $53 and, with those deep Nike pockets, the shoe giant is poised to further its relatively meager presence in the sector.

"This is a very mature slow to marginal growth market," said Tim Conder, analyst at A.G. Edwards. "Consolidation inevitably happens. Callaway, Titleist, Taylor made and Nike will be there. This should help bring more rationality to actions by other manufacturers and stabilize the market."

Bottom line: when it comes to lobbing money into golf stocks, considering laying up. Like the British Open, par is at a premium.

Travel Medicine Tips for Traveling Abroad
Pay-As-You-Go Wireless: Prepaid Is Ideal for Light Cell Phone Users
Prepaid Calling Cards: A Real Deal?
It's Your Identity: Who Should Protect It?

In 1935, when credit unions were helping Americans through the Great Depression, the treasurer of a Midwestern credit union said that credit unions were "not for profit, not for charity, but for service," and that philosophy holds true today. Credit unions continue to look out for their members' interests and provide a level of service that generally is not available at other financial institutions. Whether it's providing a loan to help a member cover unexpected medical bills, giving financial counseling to a member whose employer closed its doors, or simply offering a better deal on a used-car loan or mortgage, credit unions make a difference for their members and the communities they serve. In 1984, the World Council of Credit Unions approved the nine International Credit Union Operating Principles that remain the cornerstone of the credit union movement. They are: •
  • Open and voluntary membership
  • • Democratic control • Nondiscrimination • Service to members • Distribution to members • Building financial stability • Ongoing education • Cooperation among cooperatives • Social responsibility These principles are founded in the philosophy of cooperation and its central values of equality, equity, and mutual self-help. They express, around the world, the principles of human development and the brotherhood of man through people working together to achieve a better life for themselves and their communities.

    Travel Medicine Tips for Traveling Abroad
    Pay-As-You-Go Wireless: Prepaid Is Ideal for Light Cell Phone Users
    Prepaid Calling Cards: A Real Deal?
    It's Your Identity: Who Should Protect It?

    Dec 2010 Turning Point

    June 2010, Find the Path to Home Ownership (PDF file).



    Dec 2010 Turning Point

    Dec 2010 Turning Point

    June 2010, Find the Path to Home Ownership (PDF file).



    video

    Personal vs Biz records from CUNA on Vimeo.

    Don't Tax My Credit Union

    Your dream summer may consist of traveling and laying on a beach, but for most of us reality probably means working. Having a summer job can help with tuition, housing, books, and other expenses, but a summer job is much more than an income source. Varsity Tutor's from USA Today College also tells us how It can teach you skills relevant to your academic and future careers. 1. Managing your money Although a summer job is great experience and a reference for future jobs, making money is typically why most people find one. Once you have a job, managing your income can be tricky. A summer job can teach you the value of money and how to spend and save wisely. If you aren't one already, become a member of your local credit union. Credit unions are financial cooperatives, which means they're owned by the people who bank there. Credit unions offer saving accounts, debit cards, and loans just like banks do, but at a credit union the money you depositóno matter how paltryómakes you a partial owner or "member." To take control of your spending habits, the next time you want to buy something, think about how many hours it will take to save enough money to purchase it. Is it a "want," like the newest pair of headphones? Or is it a "need," such as textbooks for next semester? Decide what you can go without. 2. Time management Allowing enough time to get ready in the morning and making it to work in traffic or giving yourself enough personal time away from friends to unwind after long days to get enough sleep are great time management examples. It's also important to manage time wisely while on the job. Wasting time checking personal social media sites or arriving late will make you fall behind on tasks and stress you out. Time management is one of, if not the most important skill that you learn as a college student. You can apply what you've learned during your summer job when you get back to school in the fall. You'll find that everything moves smoother as your time management skills improve. Not to mention, by the time you get a full- time job you'll be a pro. 3. Team building A summer job can teach you basic teamwork skills such as problem solving, collaborating, and sharing. All are essential for group projects in college and effectively communicating and working with colleagues in a professional career. Make sure you listen and notice how your colleagues communicate in a team setting and mimic them. Also, let your voice be heard as a part of the team. Your co-workers will respect what you have to say even if you're the youngest one in the office.

    There are many ways to have fun in the winter that don't cost a dime. Here are a few suggestions.

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    New fin lit survey: 56% of U.S. adults don't budget

    WASHINGTON (4/4/12)--More than half of U.S. adults--56%--admit they do not have a budget, according to the 2012 Financial Literacy Survey, released Tuesday in recognition of April as Financial Literacy Month.
     
    The survey was conducted by the National Foundation for Credit Counseling (NFCC) and the Network Branded Prepaid Card Association (NBPCA).  In its sixth year, the survey provides annual data and trending about Americans' attitudes and behaviors related to personal finance.
     
    The survey revealed "a disturbing lack of basic financial skills that are critical to building a stable financial future," said the two organizations.
     
    Among other findings:
    "This year's survey unveiled some disturbing trends, showing that a significant number of Americans are saving less, spending more and carrying credit card debt over from month to month, suggesting that the painful financial lessons of the past are quickly being forgotten," said Susan C. Keating, NFCC president/CEO.
     
    "Coupled with the two in five adults who gave themselves a C, D, or F on their knowledge of personal finance, the need for an increase in financial education becomes not only clear, but urgent," she added.

    For the first time, the survey evaluated responses related to prepaid debit cards. Those findings include:
    "Consumers feel empowered using prepaid debit cards and revealed in the NFCC/NBPCA survey that the top three reasons for using the cards were their convenience, safety and ability to control spending," said Kirsten Trusko, NBPCA president/executive director.
     
    "Additionally, about three in four prepaid debit card users indicated they believed prepaid cards are a better value for their money compared to a credit card or debit card connected to a traditional bank account," Trusko added.
     
    The telephone survey was conducted by Harris Interactive between March 14 and March 19 among 1,007 adults age 18 or older. Of those, 89 use prepaid debit cards.

    Merger convinces CU to change core processing

    FARMINGTON, Utah (4/4/12)--Idaho State University FCU (ISUCU), Pocatello, Idaho, has chosen the CUProdigy Core software system provided by Credit Union Data Processing, Inc. (CUDP) for its core processing needs. 
     
    The $130 million asset ISUCU was introduced to the CUProdigy system through a recent merger with $17M Pocatello Teachers FCU (PTFCU).
     
    Robert Taylor, ISUCU CEO, said he was initially wary of PTFCU's core system because the credit union was so small. However, he changed his view when he saw the credit union's technology.
     
    "CUProdigy is truly the first open system I have ever encountered, and CUDP has demonstrated the ability and willingness to adapt the system to our credit union's needs," Taylor said.
     
    Taylor held such conviction for CUDP's technology that he convinced his board of directors to purchase a 16% ownership stake in the company. CUDP is a Utah-based credit union service organization serving the data processing needs of credit union of all sizes.

    CUSN holds inaugural Connection Series Seminar

    LAKEWOOD, Colo. (4/4/12)--The CU Service Network (CUSN) held its inaugural CUSN Connection Series Seminar on March 9 in Denver, with concurrent events in Iowa, Nebraska, New Mexico and Idaho.
     
    Bill Hampel, chief economist for the Credit Union National Association presented "An Economic View," which focused on the current economic climate for credit unions.
     
    Credit unions outside the Denver area joined the seminar via webinar after a sponsored luncheon. A question-and-answer period followed. Additional credit unions from Arizona, Nebraska, Texas, and Wyoming also attended via webinar.
     
    CUSN developed its Connection Series to expand the depth of its partnerships with credit unions throughout the region. Several events planned for 2012 focus on topics related to credit union growth and development. Each will be presented by industry experts. Time is included in each event for networking and roundtable discussions on key topics.
     
    The next Connection Series event will be held in Santa Fe, N.M., on April 19. CUSN will host the CUSN Connection Mini-Series luncheon. The presentation will address one of the challenges credit unions face when connecting to their members.

    SacTown run nets $140K for kids' hospitals

    SACRAMENTO, Calif. (4/4/12)--The first Credit Union SacTown 10 Mile Run--which took place Sunday in downtown Sacramento, Calif.--raised more than $140,000 for Children's Miracle Network Hospitals in California and Nevada.
     
    The first Credit Union SacTown 10 Mile Run raised more than $140,000 for Children's Miracle Network Hospitals in California and Nevada. The Sacramento, Calif., event was sponsored by Credit Union Miracle Day Inc. along with 64 credit unions and credit union businesses, including the California and Nevada Credit Union Leagues. Pictured are SacTown 10 Mile Run participants, including individual race winners: Tesfaye Alemayehu and Jane Kibii, with 11 year-old Parmina Valentine, a cancer patient at UC Davis, and members of the SacTown 10 Committee. (Photo provided by California and Nevada Credit Union League.)
    The event was sponsored by Credit Union Miracle Day Inc., along with 64 credit unions and credit union businesses, including the California and Nevada Credit Union Leagues.
     
    The "SacTown 10," also designed to increase national awareness of credit unions, took place the same day as the 40th Annual Credit Union Cherry Blossom Ten-Mile Run in Washington D.C., followed by Credit Union Freedom Runs for troops overseas.
     
    Combined, the "Family of Races" raised a total of $515,000 for Children's Miracle Network Hospitals across the country.
     
    Nearly 1,050 runners participated in the Sacramento race, which started and finished in front of the State Capitol building, with a $15,000 prize purse awarded.
     
    Cara Cooper, a St. Francis High School junior who credits treatment she received at UC Davis Children's Hospital with helping her recover from the H1N1 virus (swine flu), sang the national anthem to start the event . Eleven-year-old Parmina Valentine, a cancer patient at UC Davis, cheered the runners on to the finish line and presented awards.
     
    The Credit Union SacTown 10 kicked off with a craft day and news conference Friday  for credit union sponsors at UC Davis Children's Hospital in Sacramento. At the event, California and Nevada Credit Union Leagues President/CEO Diana Dykstra and SacTown 10 Committee Chairman John Pamer, CEO of Concord, Calif-based Diablo Valley FCU, presented Children's Miracle Network Hospitals with a check representing the $515,000 raised for children's hospitals.
     
    Children's Miracle Network Hospitals is an alliance of premier children's hospitals across North America that treat 17 million critically ill children annually‚ regardless of their ability to pay.
     
    Credit Union Miracle Day is the title sponsor group of the Credit Union Cherry Blossom Ten Mile Run. It is a partnership of credit unions, credit union service organizations, and partner organizations nationwide that joined under the umbrella of Credit Unions for Kids to support Children's Miracle Network Hospitals.

    Wis. governor signs three credit union bills

    MADISON, Wis. (4/4/12)--Wisconsin Gov. Scott Walker has signed legislation that will allow credit unions to continue to expand support for their communities.
     
    The bills signed into law include:
    "Wisconsin's member-owned financial institutions are vested in and committed to making significant contributions to the communities they serve," said Brett Thompson, Wisconsin Credit Union League president/CEO.
     
    "These new laws help credit unions continue to provide top notch service to their 2.2 million members in communities across the state. We appreciate the strong bi-partisan support for these measures from the state Senate, Assembly and the Governor in ensuring they became law," he added.

    CUNA in Daily Caller: MBLs are all about small business

    WASHINGTON (4/4/12)--Lawmakers should cast aside bankers' objections to increasing the credit union member business lending (MBL) cap and recognize that supporting MBL legislation is all about helping small businesses, Credit Union National Association (CUNA) President/CEO Bill Cheney wrote in a Daily Caller blog post Tuesday.

    Increased lending to small businesses "shouldn't be about banks versus credit unions," Cheney said.

    Legislation that would increase the MBL cap for credit unions from 12.25% of assets to 27.5% of assets is active in both the U.S. House and the Senate, and a vote on S. 509, the Senate bill, is expected to take place once Congress returns from its spring recess. Cheney said "the reality is that credit unions have money to lend, their track record is considerably better than the banks, and freeing up credit unions to do more will enhance competition and marketplace choice."

    Banks have kicked their opposition into high gear in advance of this vote, with American Banker Association-backed radio ads playing frequently in Washington, D.C.-area radio markets. The ads, Cheney said, feature bankers grumbling about credit unions but show no concern about what banks would do for small business. "It's not like they haven't had a chance to do something," he said.

    Cheney noted that banks currently control 95% of the small business lending market, but said many would think that number was actually 0.95% "the way they have been carrying on in opposition to a bipartisan bill that would let credit unions do more small business lending." Bankers have also continued to complain about the credit union nonprofit tax status during this debate, but those complaints "strike an incredibly false note given the enormity of the taxpayer bailouts that went to their industry," Cheney said.

    Credit unions hear all the time from small business owners who have received no help from banks on the credit front, Cheney said, citing a Small Business Majority surveys that in February found 60% of small businesses say it's still too difficult to get a loan. Cheney also noted a January National Federation of Independent Business (NFIB) report that showed a 9% increase in the amount of small businesses that wished to borrow from financial institutions, but no corresponding change in the number of small businesses obtaining credit. NFIB concluded that "the more competition that exists, the more likely small-business owner customers will receive sympathetic consideration for their loan requests, favorable rates (and terms and conditions), and better service, other factors equal."

    More competition is sure to ensue if Congress passes S. 2231, the Credit Union Small Business Jobs Act, and Cheney said credit unions are currently working to convince their legislators to lift the cap and let them help their local businesses. Approval of MBL legislation would free up credit unions to make $13 billion in new loans to small businesses in just the first year, giving these businesses the wherewithal to create an estimated 140,000 new jobs, all by simply raising a cap — no expense to the U.S. taxpayer involved, Cheney said.

    The Daily Caller is an online news and opinion site co-founded by 20 year print and broadcast journalist Tucker Carlson. For the full post, use the resource link.

    Pro-MBL editorials also appeared in the Wisconsin Corporate Report and the Huffington Post on Tuesday. (See related story: HuffPo, Wis. op eds: MBL bill to help small biz grow).

    NCBA urges members to call for MBL bill support

    WASHINGTON (4/4/12)--The National Cooperative Business Association (NCBA) has asked members of the cooperative community to communicate the crucial funding needs of small businesses, and the importance of supporting credit union member business lending (MBL) cap legislation, to members of the U.S. Congress.

    "By allowing credit unions to make more business loans, we'll be putting more Americans to work and improving our economy," NCBA Interim President/CEO Liz Bailey said in a release. The NCBA release cited Credit Union National Association (CUNA) estimates that show that lifting the MBL cap from 12.25% to 27.5% of assets would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.

    The NCBA release noted that 90% of small business owners that responded to a recent survey said they were having issues accessing credit, with 61% adding that it is harder to get loans today than it was a few years ago. The release asks NCBA members to reach out in support of S. 2231, the MBL cap increase legislation, and adds that one of the easiest ways to help small businesses gain access to the credit they need and start hiring is to lift the credit union member business lending cap.

    The National Council of Textile Organizations, the American Small Business Chamber of Commerce, the National Farmers Union, the National Association of Realtors, the Realtors Land Institute, the Small Business Majority, the Society of Industrial and Office Realtors, the CCIM Institute, Americans for Tax Reform, the American Consumer Institute, the Hardwood Federation, the Institute of Real Estate Management, NCB Capital Impact MultiFunding, the National Association of Home Builders, the National Association of Professional Insurance Agents, AMT--The Association for Manufacturing Technology, the U.S. Women's Chamber of Commerce, and the Heartland Institute have also supported increasing the MBL cap in recent weeks.

    For the full NCBA release, use the resource link.

    CUNA President/CEO Bill Cheney also touted the benefits of an MBL cap increase in a Tuesday Daily Caller editorial. (See related story: CUNA in Daily Caller: MBLs are all about small business)

    Sioux Falls FCU offers adopt-a-classroom grants

    SIOUX FALLS, S.D. (4/4/12)--Sioux Falls (S.D.) FCU has created the Adopt-A-Classroom grant program to promote financial literacy in local classrooms for students in grades kindergarten-12.
     
    The $163 million asset credit union plans to award up to six grants of up to $500 each for 2012-13 school year projects that include a student financial literacy component.
     
    The grants will go directly to certified teachers in accredited public or private schools so they can obtain the resources required to implement creative financial literacy projects. A Sioux Falls FCU release noted that budget constraints make it more challenging each year to provide children with the tools for learning.
     
    "It's important to give students in our communities the tools and guidance they need to become financially responsible adults," Sioux Falls FCU President/CEO Fran Sommerfeld said.
     
    Application materials have been distributed to schools and are available on the credit union's website.

    Inside Washington

    NCUA replies to tentative rulings in Goldman Sachs case

    LOS ANGELES (4/4/12)--The National Credit Union Administration (NCUA), in its lawsuit against Goldman Sachs & Co. over residential mortgage backed securities (RMBS) sold to Western Corporate FCU and U.S. Central FCU before their collapse, has filed supplemental memos and responses related to tolling time issues brought up in a tentative ruling by a federal judge in Los Angeles on March 15.
     
    The March 15 tentative ruling is in addition to other tentative rulings made by U.S. District Judge George H. Wu in the U.S. District Court of the Central District of California, Western Division, in several cases involving NCUA seeking to recoup losses incurred by the corporates from investment banks.
     
    The suit alleges that Goldman Sachs, GS Mortgage Securities, and Residential Accredit Loans violated securities law in connection with underwriting and issuing the RMBS sold to WesCorp FCU and U.S. Central. NCUA is suing as the liquidating agent for WesCorp and U.S. Central.
     
    The latest flurry of filings relate to whether an "extender statute" and another court case, American Pipe Construction Co. v. Utah, apply to the statute of limitations and statute of repose arguments about whether NCUA had missed deadlines for filing the lawsuit.
     
    NCUA had entered an agreement with Goldman Sachs to extend the time allowed for filing the lawsuit. NCUA says the limitations deadlines for filing the suit had not passed; Goldman Sachs says they had, despite the agreement between the parties.  Goldman also alleged NCUA didn't have standing to sue, since it was not one of the corporates that had bought the RMBs in question.  
     
    In its response to tolling issues raised in an earlier filing, NCUA said Wu's March 15th tentative ruling "correctly concludes that this court should follow the strong majority of courts holding that American Pipe tolling applies whether or not the named plaintiff in a class action had standing to pursue direct claims for the injuries suffered by class members…," said NCUA's response.
     
    In his March 15 tentative ruling, Wu said that "assuming the Court reaches the conclusion that the extender statute and American Pipe apply to the claims raised herein, the court would deny any attempt to dismiss [NCUA's] claims on statute of limitations grounds. " However, he added that "if any federal claims barred by the applicable statute of repose do not enjoy American Pipe tolling, those claims would be dismissed without leave to amend.  Assuming the court concludes American Pipe applies, the court would still order [NCUA] to amend its American Pipe-related allegations."  The court also said it would dismiss claims relying on origination activity of Homecomings Financial Network Inc., which failed to tie allegations to particular loans, but gave NCUA leave to amend its arguments there.
     
    NCUA's reply memorandum said Goldman could have declined to enter the tolling agreement, in which case NCUA would have filed suit within the repose period. Noting that "Goldman's voluntary entry into the tolling agreement was permissible legal tolling that is fundamentally unlike equitable tolling," NCUA said Goldman "agreed to toll the statute of repose before its expiration--and thus induced NCUA to forbear from filing suit during the tolling period."
     
    Regarding NCUA's claims under Kansas law, it "dooms Goldman's argument that the tolling agreement is somehow ineffective as to Kansas statutes of repose," said NCUA, adding that American Pipe tolling is "legal tolling that applies to statute of repose even though equitable tolling doctrines do not, so long as the tolling class action was filed before expiration of the statute of repose."
     
    "The policies that preclude equitable tolling of the statute of repose in no way preclude enforcing a voluntary legal waiver of the repose period by sophisticated parties," argued NCUA. "Goldman identifies no benefit to a policy that permits large banks such as Goldman to renege on a voluntarily negotiated agreement to forestall litigation in hopes of reaching a settlement, and there is none," the agency said.
     
    "There is no more sophisticated party in the U.S. than Goldman, which voluntarily entered into the tolling agreement, received the benefit of NCUA's consideration in delaying litigation pending settlement discussions, and then willfully flouted its promises when it sense some advantage to doing so," said NCUA.  "Goldman should not be permitted to profit from such unvarnished misconduct. The court should enforce Goldman's agreement," NCUA concluded.
     
    In a previous ruling that partly dismissed NCUA's claims in a separate but related action against RBS Securities and other defendants, Wu had granted NCUA the leave to amend, or the ability to provide more information. His ruling had indicated that unless tolled by the virtue of American Pipe, all of NCUA's federal claims would be dismissed with prejudice because they are barred by a three-year federal statute of repose. An extender statute did not apply to the federal claims, he said.  The ruling did not affect NCUA's state securities law claims.

    The court, in a separate development, has continued a non-appearance status conference that was originally to be held last week to April 12, according to court documents.

    SAC FCU launches 'Baby Bundle Savings Plan'

    BELLEVUE, Neb. (4/4/12)--SAC FCU has introduced the "Baby Bundle Savings Plan" to encourage saving for the future by making it possible for parents, friends and family members to deposit funds in an infant's certificate of deposit throughout the certificate's term.
     
    "Baby Bundle Savings Plan" accounts can be opened during the child's first year and then may remain open and grow throughout the child's lifetime, said the Bellevue, Neb.-based credit union.
     
    When the account is opened, each participating infant receives a Baby Bundle "onesie," pacifier and piggy bank. When Baby Bundle accounts reach maturity, the $564 million asset credit union contributes $25 to every one-year term certificate and $50 to every two-year term certificate.
     
    A credit union release stated the product is designed to help parents prepare for each child's future dreams and is part of a range of accounts designed to help people meet challenges at any life stage.
     
    "Baby Bundle rewards parents who take advantage of the benefits of saving right from the start," SAC FCU President/CEO Gail DeBoer said.

    CU savings up, loans down, assets close to $1 trillion

    MADISON, Wis. (4/4/12)--Credit union assets nearly broke the $1 trillion threshold in February, and credit union membership remains strong, as it has since Bank Transfer Day, according to a Credit Union National Association economist's analysis of February's monthly sample of credit unions.
     
    Click to view larger image Click for larger view
    The movement's total assets reached $999.1 billion in February, a 1.9% increase from January and a 5.3% increase from February 2010.
     
    Credit union membership increased 0.4% in February, an increase of 2.2% from Feb 2010.
     
    "Credit unions are poised to pass the $1 trillion asset mark in March" said Bill Hampel, CUNA's chief economist. "That's one of the easiest predictions I've had to make. It's also gratifying to see strong membership growth continue into 2012.  Membership growth in just the first two months of 2012 is close to membership growth for the whole year 2010."     
     
    Credit union savings balances grew 2.1% in February to $859.2 billion compared to a 0.4% decrease in January. Savings a year ago totaled $817 billion. Share drafts led savings growth with an 8.3% increase, followed by regular shares and money market accounts, which rose 3.4% and 1.2%, respectively. One-year certificates grew 0.1% while individual retirement accounts fell less than 0.1%.
     
    Click to view larger image Click for larger view
    Credit union loans outstanding decreased 0.2% during February to $584.8 billion, after a 0.1% decline in January. Loans totaled $574.2 billion in February 2011. Adjustable-rate mortgages led loan growth with a 0.7% increase, followed by fixed-rate mortgages, which grew 0.4%. Used-auto loans remained constant while home equity loans declined 0.6% and new-auto loans fell 0.7%. Unsecured personal loans and credit card loans dropped 1.9% and 2%, respectively.
     
    The loan-to-savings ratio fell slightly to 68%. The liquidity ratio (the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities) grew to 21% in February.
     
    Credit unions' 60+ day delinquency rate remained at 1.6%.
     
    The movement's overall capital-to-asset ratio remained at 10%. The total dollar amount of capital is $102 billion.

    Market News

    MADISON, Wis. (4/4/12)

    Comp Blog roundup: Latest on NCUA, CFPB changes

    WASHINGTON (4/4/12)--In the March edition of the Credit Union National Association's CompBlog Monthly Wrap Up, CUNA presents a new list of compliance questions that credit union CEOs should ask members of their staff.

    Among the items addressed in this month's list are:
    The March update also highlights some notable upcoming events, including an upcoming Senate vote on legislation that would increase the credit union member business lending cap. The CompBlog update urges all credit unions – even those not involved in MBLs – to make their voices heard in Congress about the need to allow credit unions to better serve businesses.

    The CompBlog update also notes some Letters to Credit Unions that are expected to be issued in the near future, as well as a recent NCUA Letter to Credit Unions (No. 12-CU-03) that reminds credit unions that the Temporary Corporate Credit Union Share Guarantee expires on Dec. 31, 2012.
     
    As a result, effective Jan. 1, 2013, National Credit Union Share Insurance Fund coverage on deposits in corporate credit unions will once again be limited to the standard maximum amount of $250,000.

    The monthly wrap-up also features effective dates, various new requirements, important compliance articles, and upcoming CUNA training programs.

    For more of CUNA CompBlog's monthly wrap up, and other compliance gems, use the resource links.
     

    News of the Competition

    MADISON, Wis. (4/4/12)

    Special CUNA Board election to be held for May's seat

    MADISON, Wis. And WASHINGTON (4/4/12)--The Credit Union National Association (CUNA) will conduct a special CUNA Board election for a seat representing District 5, Class C, CUNA announced Tuesday.
     
    The seat was vacated when Harriet May, former CUNA Board chairman and former CEO of GECU, El Paso, Texas, announced her retirement, which was effective on Saturday.  The term for that position will expire at the adjournment of CUNA's Annual General Meeting in 2014.
     
    A notice was sent Tuesday to eligible credit unions in District 5, Class C, who can nominate a candidate for the special election. District 5 is comprised of leagues in Arizona, Colorado, Kansas, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Utah and Wyoming.
     
    Nominations are due April 27.  The election will be conducted by written ballot from April 30 to May 25. The term of office will begin immediately after the successful candidate is determined.
     
    To be eligible, a candidate must be an employee or voting board member of the nominating credit union. The nomination must be in writing and be seconded in writing by two other credit unions of the same size group from the district.
     
    Nomination packets were sent to eligible credit unions.  Nomination forms can be faxed to 608-231-4874, e-mailed to thanson@cuna.coop,or mailed to 5710 Mineral Point Road, Madison, WI 53705).

    Fed minutes indicate less interest in QE

    WASHINGTON (4/4/12)--The Federal Reserve's policymaking group  may be less likely to introduce another around of bond buys or asset purchases--known as quantitative easing--to assist the economy, according to minutes of its March 13 meeting, which the Fed released Tuesday afternoon.
     
    The Federal Open Market Committee (FOMC) did not discuss at length any form of qualitative easing at the meeting, a fact that was reflected in the stock market as world stocks dropped within minutes of the news (Reuters and The Wall Street Journal April 3).
     
    The minutes noted that the committee "is prepared to adjust the size and composition of its securities holdings as appropriate to promote a stronger economic recovery in a context of price stability.  A couple of [committee] members indicated that the initiation of additional stimulus could become necessary if the economy lost momentum or if inflation seemed likely to remain below its mandate-consistent rate of 2% over the medium run," said the minutes.
     
    Media reports indicated that this is a subtle shift in policy, with only  a  "couple " of FOMC members" expressing interest in qualitative easing at the meeting. The reports point out that at January's meeting, "a few" committee members indicated that the Fed could introduce more long-term securities before long while "a number of participants" said they were open to that idea if the economy lost ground  (MarketWatch, CBSNews.com, Reuters and The Wall Street Journal April 3).
     
    The committee members  at the March meeting noted recent signs of slightly stronger growth.  "Members viewed the information on U.S. economic activity received over the intermeeting period as suggesting that the economy had been expanding moderately and generally agreed that the economic outlook, while a bit stronger overall, was broadly similar to that at the time of their January meeting," the minutes said. 
     
    The document noted that  FOMC "members generally expected a moderate pace of economic growth over coming quarters, with gradual further declines in the unemployment rate."
     
    FOMC members  agreed that  "for the period ahead …it would be appropriate to maintain the existing highly accommodative stance of monetary policy," the minutes said.

    Nearly all the members agreed to indicate that the committee expects to maintain a "highly accommodative stance for monetary policy and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run are likely to warrant exceptionally low levels for the federal funds rate at least through 2014."
     

    HuffPo, Wis. op-ed: MBL bill to help small biz grow

    MADISON, Wis. and WASHINGTON (4/4/12)--An article in Wisconsin Corporate Report and a blog in Huffington Post feature credit union leagues telling why Congress should pass the member business lending (MBL) bill to increase credit unions' MBL cap.
     
    Wisconsin Corporate Report recently carried an article Feb. 29 on how businesses in Reedsburg, Wis., had been hurt by banks that were either pulling their lines of credit or not renewing their loans, despite good payment histories (To read the article, use the link). 
     
    That prompted Wisconsin Credit Union League President/CEO Brett Thompson to contact the publication. The result: an interview in the "The Last Word" column (March 28), the most frequently read page of the publication. The article emphasized that credit unions want to step in and help but many can't, because of the MBL cap that limits credit unions' MBLs to  12.25% of assets.  Credit unions, Thompson explained, are trying to get that changed in Congress to 27.5% of assets, but banks are opposing the bills.
     
    Thompson was asked about the bankers' argument that business loans should be left to banks and that credit unions weren't good at this kind of lending.  "Nothing could be further from the truth. For many years, many (credit unions) have made loans effectively." He called banks' level-the-playing-field stance "disingenuous."  "If the playing field were that uneven, you would not be in a situation where 93% of all commercial lending in Wisconsin is done by banks."  He noted credit unions have done very well making MBLs.  The average MBL in the state is just under $178,000--the type of loans banks aren't interested in, he said.
     
    "We have the ability to help borrowers, many of whom are the type that banks are not interested in, and at the same time give a shot in the arm to the economy," Thompson said. "It would mean $408 million in business credit in Wisconsin and we believe that would result in 4,447 new jobs" in the state.
     
    In a Huffington Post (April 2) blog, Dave Adams, president/CEO of the Michigan Credit Union League & Affiliates, notes  banks aren't lending because of tough economic times and tough new regulations.  "While many banks are not making these loans, Michigan's credit unions have once again stepped up. In 2011, credit unions' small business loans were up over 14% for the fifth  year in a row during extraordinarily difficult economic circumstances when most banks were pulling back on business lending," he said.
     
    To read all three articles, use the links. (See related story, "CUNA in Daily Caller: MBLs are all about small business," in News Now's Washington section.)

    Six banned by NCUA from credit union work

    ALEXANDRIA, Va. (4/4/12)—Six former credit union employees—three from New York, one from Hawaii, one from Kansas, one from North Carolina—have been banned from  participating in the affairs of any federally insured financial institution by the National Credit Union Administration (NCUA).
     
    The NCUA issued prohibition orders to the following individuals:
     
    Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million.
     
    Use the resource link to see NCUA enforcement orders online.

    CUs help Mexican banana growers prosper

    COAHAYANA, Mexico (4/5/12)--The World Council of Credit Unions (WOCCU)  is working with Caja Providencia, a local credit union, to develop a value chain financing program that ensures that banana growers in Mexico's Michoacan state get a fair market price for their crop to better support themselves and the local economy.
     
    Click to view larger image Dora Leticia Garibo, an acopiador, or collection and processing agent, supports the value chain network launched by World Council of Credit Unions with Caja Providenica to assure banana growers in rural Mexico get fair prices for their crops.
    Value chain financing provides financial infusion to farmers at key points in the planting, growing and harvesting cycle so they have sufficient funds to operate their businesses.  Acopiadors, or collection and processing agents, serve as the link among the grower, the buyer and the credit union, through which funds are provided,to support the farming cycle. Farmers who are Caja Providencia members can become part of the value chain process and gain access to additional credit union services.
     
    "The value chain model has worked well to support rural growers, producers and craftspeople throughout Latin America," said Brian Branch, WOCCU president/CEO. "The partnership with Caja Providencia has made a positive difference in the lives of the members involved in this program."
     
    The partnership is part of WOCCU's five-year Cooperative Development Program (CDP), supported by $4 million in funding from the U.S. Agency for International Development.  The program focuses on creating and testing agricultural and financial tools to improve rural economic and financial sector development, personal income and food security. Results from the program, which runs through 2015 and also operates in Guatemala, will include a scalable methodology to increase small farmers' access to markets, inputs and technical assistance.
     
    The programs benefit credit unions by increasing member growth and participation. Caja Providencia, which serves 40,000 members, provides funds for the value chain model and provides the organization necessary to secure market-based prices from buyers.
     
    Click to view larger image Teams of workers, called cuadrillas, spend entire days loading up to 23 tons of bananas into semi-trailer trucks for shipment to market in Mexico.(Photos provided by the World Council of Credit Unions)
    WOCCU's partnership with Fideicomisos Instituidos en Relacion con la Agricultura, a development bank that offers credit and guarantees, training, technical assistance and technology-transport support to Mexico's agriculture, livestock, fishing, forestry and agribusiness sectors, has helped Caja Providencia members gain access to subsidized loans to grow their business.
     
    The grower uses the loans, which currently have a 1.5% interest rate, to invest in better equipment, machinery and other inputs that will lead to higher quality crops. That, in turn, will increase prices and enable sale to buyers from markets currently out of the farmers' reach.
     
    Members who participate in the program must increase production, improve their livelihoods and offer better financial support to their communities. Currently, a cuadrilla, or team of 15 workers, spends entire days loading up to 1,300 boxes--totaling 23 tons--of bananas into semi-trailer trucks for transport to market. 
     
    For more information about the value chain finance methodology, use the link.

    Dakotas association's new campaign draws media

    BISMARCK, N.D. (4/5/12)--The Credit Union Association of the Dakotas' (CUAD) press conference this week announcing the launch of its new awareness campaign drew the attention of Bismarck, N.D., media, says CUAD.
     
    Click to view larger image Robbie Thompson, left, president/CEO of the Credit Union Association of the Dakotas, talks with television station reporters at a press conference launching the "We've Been Waiting For You" campaign to create awareness about the benefits of credit unions in North and South Dakota.(Photos provided by the Credit Union Association of the Dakotas)
    Click to view larger image Flanking "The CU on the Road" vehicle that the Credit Union Association of the Dakotas will use to promote the benefits of credit unions in North and South Dakota are, from left: CUAD President/CEO Robbie Thompson; Vice President of Advocacy/Awareness Jeff Olson; Board Chairman Steve Davis; Director of Strategic Initiatives Kristie Heit; and CUAD staffers Karla Clark, Shawn Brummer, Deb Kruckenberg, Joell Kautzman, Amy Jo Johnson and Steve Rahrich.
    The event launching "We've Been Waiting For You" was "well-covered by local media, including two local television stations," the association said.

    The campaign goal is to create awareness about the benefits of credit unions across North and South Dakota.
     
    "This is a unique campaign in our region," said Robbie Thompson, CUAD president/CEO.

    "'We've Been Waiting For You' is about credit unions in North and South Dakota coming together as one to spread the beneficial credit union message," he said.
     
    The campaign relies on testimonials from credit union members in the two states, describing experiences they have had with their credit unions. The testimonials will be incorporated into television and radio spots as well as the campaign's website. Use the resource link for more information.
     
    "Another vital aspect of the campaign will be a grass roots road tour called 'CU on the Road,'" said Thompson.  "CUAD staff will be traveling in our CU on the Road vehicle across both states to meet with the public and talk about the benefits of credit unions."
     
    The road tour kicks off April 17 and runs the rest of the year. Other tour stops include Bismarck, Grand Forks, Rapid City, Sioux Falls and more. Use the link for the full schedule.
     
    CUAD will be conducting a second press conference later this week in Fargo.

    Two re-elected to PCUA board

    HARRISBURG, Pa. (4/5/12)--The results of a recent director election for positions on the Pennsylvania Credit Union Association (PCUA) Board of Directors have been announced by board Chairman Michael Kaczenski.

    The results were announced in PCUA's newsletter, Life is a Highway Wednesday.
     
    Maria LaVelle, CEO of  $52 million asset Westmoreland Community FCU,  based in Greensburg, Pa., has been re-elected to her board seat.

    She will represent credit unions in Asset Category 2, with total assets of more than $30 million to $100 million.
     
    Ray Brunner, CEO of  the $179 million asset WEST-AIRCOMM FCU, located in Beaver, Pa., has been re-elected to the board and will represent credit unions in Asset Category 3, total assets greater than $100 million.
     
    Their three-year terms will begin after PCUA's Annual Convention in May.

    Catalyst Councils hold preliminary meetings

    PLANO, Texas (4/5/12)--Nearly two dozen credit union officials--representing the membership of Catalyst Corporate FCU in the central and eastern regions of the U.S,---met last week to offer their perspectives on topics such as mobile banking and person-to-person payment initiatives; enterprise risk management concerns and member satisfaction surveys.
     
    Attendees were members of the newly formed Catalyst Councils, which focus on service delivery, product development and enhancements, and "over-the-horizon planning," said Kathy Garner, Catalyst Corporate FCU president/CEO.
     
    "There was a good mix of topics to cover, and the participation among the council members was well-balanced," said Sam Whitehurst, president/CEO of the $135 million Summit CU, in Greensboro, N.C. and a representative of the Eastern Catalyst Council. "I think the council members rallied around the Catalyst spirit of member-ownership, so everyone was engaged in a meaningful way."
     
    Catalyst Corporate was launched last September with 860 member credit unions that contributed nearly $90 million in capital. Catalyst's credit union membership now approaches 1,200, with $139 million in capital.
     
    "From the start, the Catalyst team has understood the importance of building upon a member-focused culture," Garner said. "This council process deepens the cooperative relationship between member credit unions and staff as they work side-by-side to set and achieve organizational objectives."
     
    Garner noted that the council input will help Catalyst align its offerings with member credit unions' own strategic plans. "Catalyst Councils will serve as a springboard for member-driven service enhancements, and help ensure that resources are allocated to projects that members need and appreciate," Garner added.
     
    Catalyst will soon announce the formation of a third council to represent credit unions in the western region of the U.S. The corporate had delayed formation of the Western Council to accommodate credit unions migrating to Catalyst Corporate as a result of the National Credit Union Administration's wind-down of Western Bridge Corporate.

    Texas tornado destroys home of CU employee

    MADISON, Wis. (4/5/12)--The home of at least one Texas credit union employee was destroyed by tornadoes that swept through the Dallas-Fort Worth area Tuesday. However, Texas credit unions appear to have escaped major damage.
     
    One tornado destroyed the home of an employee of City CU in Dallas, and another employee was temporarily displaced when an apartment building was damaged, the Texas Credit Union League told News Now.
     
    "It's devastating," Taunya Williams, City CU chief marketing officer, said of the employee's loss. Williams said the credit union is opening an account to accept donations for the employee. Other employees have offered to volunteer with clean up and other assistance.
     
    CUNA Mutual Group's Credit Union Protection Claims unit contacted credit unions in the disaster area, and there were no reports of any major damages to credit unions, said Phil Tschudy, CUNA Mutual Group's media relations manager. A few credit union locations sustained some wind and hail damage to their facilities, but these were minor in relation to other damages in the affected areas.
     
    A branch of Neighborhood CU received roof and window damage, Carolyn Jordan, senior vice president at the credit union, told News Now. The glass door of a community room was also blown out, Jordan said.
     
    About 20 vehicles owned by employees of YOUR Community CU in Irving, Texas, suffered hail damage, according to Rick Stokes, assistant vice president of marketing at the credit union. Although the area wasn't hit by tornadoes, storms did bring golf ball-sized hail, which broke windshields and dented vehicles, Stokes said.
     
    The YOUR Community CU branch in Irvine does not appear to have been damaged, Stokes said. "We seem to have been right on the edge of the tornadic activity," Stokes said. "A block away there was no hail."
     
    The Texas league told News Now it had been in contact with member credit unions throughout the Dallas-Fort Worth area. The area was hit by an estimated 18 tornadoes, according to PropertyCasualty360.com.
     
    TCUL spokesperson Linda Webb-Manon said she expects to hear from credit unions with members who were affected by the tornadoes. The American Red Cross estimates 650 homes were damaged in the Dallas-Fort Worth area on Tuesday.  
     
    "It usually takes a couple days to get reports credit unions, but we expect more people will need some help," Webb-Manon said. "The tornadoes hit a heavily populated area, and we know there were extensive damages to some residential areas."
     
    Texas Credit Union Foundation said it is ready to implement phase one emergency grants to any credit union employees affected by the tornadoes (Lone Star Leaguer April 4).
     
    Phase one emergency grants are provided to credit union employees to assist with immediate disaster relief needs, such as out of pocket costs that may result from being evacuated. The grants are up to $500 per credit union employee. The grants are provided to help stabilize credit union employees' individual situations so they can return to work.
     
    Although her credit union escaped damaged, Stacey McDonald, CEO of Corner Stone CU, in Lancaster—the hardest hit area, according to USA Today--saw one of the tornadoes first hand about a mile from her credit union as she stood outside the branch.
     
    "We are just lucky we didn't get any damage," McDonald said. "The area just up the street did."
     
    McDonald directed about 12 employees and three members--including her pregnant daughter--into the credit union's restrooms until the storms passed.
     
    One employee was frantic because she heard the tornado was headed directly for her neighborhood, McDonald recalled. "But somebody called to tell her that it bounded over the neighborhood just like a frog," McDonald said.
     
    The American Red Cross estimated that about 300 Lancaster homes were damaged.
     
    "As a financial institution, we will do whatever we can to help," she said. "Right now I feel like someone was looking out for us."

    Inside Washington

    WOCCU supports global AML reg revisions

    PARIS (4/5/12)--The World Council of Credit Unions (WOCCU) Tuesday said it strongly supports revisions to regulations developed by the Financial Action Task Force (FATF) designed to combat money laundering and terrorist financing, and supports the FATF's revised due diligence recommendations that can be scaled to acknowledge credit union members' relative lack of risk in these areas.
     
    Click to view larger image World Council of Credit Unions' Michael Edwards (left) and Credit Union Central of Canada's David Phillips represented financial cooperatives to support revisions of regulations developed by the Financial Action Task Force designed to combat money laundering and terrorist financing. Edwards and Phillips also promoted credit unions' low-risk as money laundering targets. (Photo provided by the World Council of Credit Unions)
    World Council representatives spoke to this issue at an April 2 FATF meeting at the Paris headquarters of the Organization for Economic Cooperation and Development, where the inter-governmental regulatory body is domiciled.
     
    More than 100 participants attended the two-day meeting to discuss revisions to FATF's International Standards on Combatting Money Laundering and the Financing of Terrorism and Proliferation, better known as the 40 recommendations. WOCCU supports the recommendations overall, and especially the FATF's revised customer due diligence (CDD) recommendations that should apply to the relatively low-risk scenarios offered through credit unions, according to Michael Edwards, WOCCU chief counsel and vice president for advocacy and government affairs.
     
    "World Council strongly supports the FATF's recommendations and interpretive notes regarding simplified CDD measures for lower risk customers and transactions," said Edwards, who represented the global credit union trade organization with David Phillips, president/CEO of Credit Union Central of Canada, a World Council member organization. "We asked the FATF to consider issuing additional guidance on this issue to help reduce regulatory burdens on credit unions when there is no indication of money laundering or terrorist financing."
     
    The revisions WOCCU supports recognize the relative lack of risk generally offered by credit union members and their transactions. As natural-person financial cooperatives, credit unions do not serve corporate entities with opaque ownership structures that might easily hide criminal money laundering or terrorist activities, said WOCCU.
     
    Language already exists within the CDD recommendations offering a simplified approach, which WOCCU believes will reduce regulatory burdens to levels appropriate to the general risk found in credit unions, Edwards explained. FATF reacted positively to WOCCU's comments, noting that while a simplified CDD could not uniformly apply to all credit unions on an institution-wide basis, national or provincial regulators could reduce regulatory burdens on credit unions in cases where members were likely to be low-risk.
     
    FATF's revisions also indicate further recognition that credit unions generally pose less risk overall due to their cooperative nature and the role played by their member-owners, according to Brian Branch, WOCCU president/CEO.
     
    "We urge FATF to recognize the value of financial cooperatives' relationships with their members through the simplified customer due diligence revisions," said Branch. "Credit unions continue to be a positive global economic force and recognition of that role by global regulatory bodies is necessary to maintain and protect that positive role that financial cooperatives fulfill."

    ProfitStars, ACH Alert introduce fraud solutions

    MONETT, Mo. (4/5/12)--Through a partnership with automated clearinghouse and wire risk management solution provider ACH Alert, ProfitStars has introduced two new solutions to financial institutions using its ACH Client and Enterprise Payment Solutions (EPS) platform.
     
    ACH C.O.P.S. provides systematic fraud detection to outbound ACH credit and wire entries by requiring transaction-level validation after transactions are received by the financial institution and prior to their being released to the respective payment network.
     
    In line with Federal Financial Institutions Examination Council's supplemental guidance to its Authentication in an Internet Banking Environment, ACH C.O.P.S. provides out-of-band authentication for ACH credit and wire transfers by requiring customer approval of all suspect ACH and wire transactions prior to transmission. This prevents money from going to an account that is not preapproved by the originator.
     
    To mitigate losses from the posting of unauthorized ACH debits, ACH A.L.E.R.T. offers ProfitStars clients real-time control over ACH debit approvals. Financial institutions can allow member/customers to determine their debit notification parameters, notification method and contact information as well as automate the return and re-credit process.

    MBL push at state level grows, reported in media

    CHARLOTTE, N.C. (4/5/12)--Small businesses in North Carolina are supporting credit unions' push to get passage of the bill that would increase their member business lending (MBL) cap, according to a report in The Charlotte Observer.
     
    Several small businesses described to the Observer (April 4) how credit unions saved their businesses after they were turned down by banks. They support a bill before Congress that would enable credit unions to make more small business loans by increasing credit unions' MBL cap to 27.5% of assets from the current 12.25% so credit unions can make more small business loans.
     
    For example:
    The article noted that several North Carolina credit unions are bumping up against the cap, or close to it. It cited the Credit Union National Association's (CUNA) statistics: credit unions hold about $40 billion in business loans, less than 6% of all small-business loan. Dan Schline, senior vice president of association services at the North Carolina Credit Union League,  said the total has grown more than 44%.
     
    If the cap is increased, North Carolina would likely see an additional $200 million in loans closed, creating 2,100 jobs, the league said.
     
    CUNA projects that increasing the cap would inject $13 billion in new investments in small businesses, creating 140,000 jobs at no cost to the taxpayer.
     
     

    Cheney makes video, radio, venues for business lending advocacy

    WASHINGTON (4/5/12)--Credit Union National Association (CUNA) President/CEO Bill Cheney emphasized the benefits to small businesses of increased credit union member business lending (MBL) on two fronts Wednesday: in a new CUNA video encouraging all credit unions to seek lawmakers' support for legislation to increase the MBL cap, and during a guest appearance on Bloomberg Radio's Taking Stock with Pimm Fox.

    In the video, Cheney calls on credit unions and small business-owning credit union members to "do all they can" to help contact their Senators during the current spring recess and ask them to support Sen. Mark Udall's (D-Colo.) credit union small business jobs bill (S. 2231).



    The legislation would increase the MBL cap from 12.25% of assets to 27.5% of assets. CUNA estimates that this MBL increase would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.

    A vote on that bill is expected to be held in the Senate later this month.

    If the cap is not increased, credit unions that are currently lending to small businesses would be forced to stop lending, leaving small businesses holding the bag, Cheney said in the Bloomberg Radio interview. He noted that 75% of small businesses say it is difficult to get credit. "We need businesses to have more access to credit to help create jobs, he said, adding that credit unions are not looking for government loans to lend this money, Cheney said. "We're just looking for congress to say credit unions can do more."

    He also discussed recent sales of banks to credit unions, the need for regulatory relief, recent loan growth seen by credit unions, and the U.S. economy in general.


    WOCCU extends leadership program deadline to April 20

    MADISON, Wis. (4/5/12)--The World Council of Credit Unions has extended the application deadline for the latest phase of its International Leadership Program to April 20.
     
    The International Credit Union Leadership Program, which promotes internships for young credit union people from various countries, is designed to facilitate idea exchanges, promote foreign language skill development, enhance cultural diversity and improve problem-solving within a global credit union context.

    NerdWallet promotes CUs' checking accounts as top picks

    SAN FRANCISCO, Calif.  (4/5/12)--Checking accounts at America's credit unions offer "free checking with good karma," according to consumer financial website NerdWallet.
     
    In a recent blog post, NerdWallet highlighted the advantages of credit unions' checking accounts and other products when compared to banks. The April 2 blog post honored six credit unions for offering "top" checking account options:
    NerdWallet noted that while banks are increasing fees, credit unions are "rolling out the welcome mat" for new members.
     
    "In the ongoing battle of credit union vs. bank, credit unions almost always come out ahead," NerdWallet reminded readers.
     
    To read the full article, "Top Free Checking Accounts at Credit Unions," use the link.

    CUNA/NCUA interest rate risk webinar on April 17

    WASHINGTON (4/5/12)--Credit Union National Association (CUNA) and National Credit Union Administration (NCUA) staff, and a credit union CFO, will team up to offer an April 17 webinar on the NCUA's new interest rate risk (IRR) regulation.

    The webinar will feature insight from:
    The NCUA has amended its federal share insurance regulations to include a requirement that federally insured credit unions have both a written IRR policy and an effective interest rate risk management program. Credit unions with less than $10 million in assets are exempted from the new regulation, and a credit union between $10 and $50 million in assets is only subject to the requirements if its first mortgage loans plus investments with maturities over five years equal or exceed 100% of its net worth. The rule will become effective on Sept. 30.

    During the webinar, NCUA staff will explain why the agency adopted the rule, which credit unions will be subject to the rule, what is required of those credit unions, and how the rule guidance can help affected credit unions.

    Schenk will address recent IRR trends and will bring to light possible future IRR scenarios that credit unions should plan for.

    D'Annunzio will discuss the rule and provide practical advice to help prepare and implement the rule from a CFO perspective.

    "With the exemptions provided by NCUA to address regulatory burdens on smaller credit unions, about 3,200 credit unions will be subject to this new regulation," noted Kathy Thompson, CUNA Senior Vice President for Compliance. "But the important figure is '800.' That's the number of credit unions that NCUA feels have to build IRR programs and policies to meet agency expectations."

    The hour-long webinar is scheduled to begin at 2:00 p.m. CT.

    To register for the webinar, use the resource link.

    Pelican State CU transfers branch to Eagle FCU

    CHALMETTE, La. (4/5/12)--A branch acquired to help credit union members in the wake of Hurricane Katrina is being transferred from $191 million asset Pelican State CU to $92 million asset Eagle FCU as of April 17. Both credit unions are based in Baton Rouge, La.
     
    Pelican State CU acquired the branch in Chalmette, La., through a merger with Chalmette Refinery CU, which was in danger of closing after Hurricane Katrina.
     
    In a Pelican State CU release, CEO Jeffrey K. Conrad noted that while Chalmette Refinery CU's members needed a helping hand, Pelican State's strategic plan did not call for growth in the greater New Orleans area.
     
    The release noted the branch is being transferred to Eagle FCU because Chalmette members can benefit from a credit union with a larger presence in the community and plans for growth in that area.
     
    Conrad noted the branch and accounts will not be sold for a profit, but transferred in an "even exchange." Eagle FCU intends to retain all Pelican employees and members.
     
    Eagle FCU CEO Ginger Manint said the transfer demonstrates both the cooperative spirit of credit unions and decision-making that is in the best interest of members.

    Allow CU derivative investments as risk management tool: CUNA to NCUA

    WASHINGTON (4/5/12)--State and federal credit unions should be permitted to manage their interest rate risk (IRR) through investments in derivatives, the Credit Union National Association (CUNA) said in a comment letter sent to the National Credit Union Administration (NCUA).

    The NCUA is considering allowing more credit unions to hedge IRR by using limited types of derivatives, and has released an advanced notice of proposed rulemaking on this subject. The agency has suggested that credit unions that demonstrate a relevant, material IRR exposure, have demonstrated the ability to manage derivatives, and have the net worth and financial health needed to manage derivatives could be allowed to invest in interest rate swaps and interest rate caps.

    The agency currently allows only a select number of federal credit unions to engage in derivatives through an investment pilot program, but could permit more credit unions to independently use derivatives to hedge IRR.

    CUNA commended the NCUA for taking on the derivatives issue, and said it supports allowing well-managed credit unions to invest in derivatives through third-parties. CUNA also supports granting independent derivative investment authority for certain credit unions with adequate derivatives experience.

    The list of derivatives that are approved for credit union investment should include basic interest rate swaps, such as interest rate swaps that are payfixed or receive-floating instruments. These types of derivatives, CUNA said, would offset the credit union's balance sheet since floating rates would be paid on shares and payments with fixed rates would be received from mortgages and loans. CUNA also suggested that interest rate caps could be used by credit unions to hedge IRR. "Certain other types of derivatives to hedge IRR may be appropriate for well managed credit unions as long as they comply with any counterparty requirements, as applicable, as addressed in a regulation," CUNA added.

    Any derivatives regulation that is eventually developed by the NCUA should "provide a sufficient number of eligible derivatives counterparties to provide credit unions with greater access to products and more competitive pricing," CUNA said.

    For the full CUNA comment letter, use the resource link.

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    Kansas CUs finish 2011 on strong note, says KCUA

    WICHITA, Kan. (4/5/12)--Kansas credit unions finished 2011 with high growth rates in loans, assets, shares and members, according to the Kansas Credit Union Association's  (KCUA) Quarterly Performance Summary for fourth quarter 2011.
     
    Loan growth continued, with a 5.88% increase--five times the national average--over fourth quarter 2010, said KCUA. Used-auto loans and mortgages were the leaders in the loans category.  Used-auto loans grew 8.5% annually, offsetting a 4.7% in new-auto balances. 
     
    Credit unions in Kansas originated $354 million in first mortgages during the year, nearly 22.5% of total loan originations. The fourth quarter of 2011 was one of the strongest quarters for first mortgage originations in Kansas credit union history, with more than $120 million loaned out. This was the second highest quarter in more than five years, since $128.8 million was originated in fourth quarter 2010, said KCUA's report.
     
    Shares or savings increased nearly 8% last year, to $4.1 billion deposited with credit unions. Checking shares showed the largest percentage increase, up 15.6%.  The checking penetration also increased, indicating more credit union members are opening checking accounts, the association said.
     
    Membership rose 2.4% --to 627,564--with Kansas credit unions adding 14, 638 members during the year, compared with the national average of 1.4%.
     
    "Kansas credit unions remain strong, especially in light of our economy," said Bob Mayes, vice president of Member and Strategic Services at KCUA.  "With unemployment declining, delinquency and losses seem to have stabilized. Our used-auto loan growth continues to be high, balancing new-auto loans, which have declined in 2011," he added.

    Merger OK'd in Pa., another set for Texas

    TREVOSE, Pa., and HOUSTON, Texas (4/5/12)--Two mergers of credit unions in Pennsylvania and Texas are in the works.
     
    The Pennsylvania Department of Banking approved on Sunday the merger of $1.3 million asset Kenrick FCU, Bryn Mawr, Pa., with TruMark Financial CU, a $1.36 billion asset credit union in Trevose, announced TruMark Financial in a press release.
     
    The merger provides the former Kenrick members access to an expanded branch network and a wider menu of financial products and services, said TruMark Financial.  The new members will have access to consumer loans, first mortgages, and insurance and investment products, as well as online and mobile banking services and a large surcharge-free ATM network.
     
    In Texas, Houston-based Space City CU, with more than $34 million in assets, said it plans to merge this year with Independence Parkway FCU, a $21 million-plus asset credit union located in La Porte.
     
    Combined, they will serve 8,200 members and have more than $56 million in assets (Houston Business Journal Online March 30).  The  challenging economy prompted Independence Parkway to merge as the best move to provide its members with quality services, said a statement by Space City in the article.
     
    With the merger, members will have access to branches in downtown Houston, the Galleria area, and in La Porte, as well as access to mobile banking, online check deposit, free checking and business services.

    Latino CU Conference to be held with CUNA's ACUC

    MADISON, Wis. (4/6/12)--The Network of Latino Credit Unions & Professionals' (NLCUP) Seventh Latino Credit Union Conference will be held in conjunction with the Credit Union National Association's (CUNA) 2012 America's Credit Union Conference (ACUC).
     
    The NLCUP conference will take place, June 15-17 in San Diego, immediately before the ACUC, June 17-20. Conference information and registration can be found at acuc.cuna.org under preconference events. To encourage communication and networking between the two conferences, NLCUP conference attendees will receive a $200 discount off ACUC registration.
     
    "Our goal is to help credit union leaders connect with the greater Latino community and raise awareness amongst the credit union community of the incredible opportunities that exist in serving the Hispanic market," said Maria Martinez, NLCUP chairman. "The momentum-driving content and leadership focus of ACUC is a perfect match with our vision for a more vibrant Latino presence in credit union movement."
     
    NLCUP was created to expand the market share of credit unions serving Latino communities and to increase Latinos' representation and participation in the credit union movement.
     
    The NLCUP conference is designed to help Latino credit union professionals gain exposure in the larger credit union movement and forge connections among fellow Latino credit union leaders. This year's conference theme, "Creating Opportunity ~ Creando Oportunidad," will feature journalist, author and performer Ruben Martinez and nationally syndicated journalist Ruben Navarette Jr. In addition, the conference will offer workshops and events in partnership with major system players.
     
    "CUNA is committed to enriching our credit unions' relationships with Latino professionals and the larger Hispanic community," said Bill Cheney, CUNA president/CEO. "We are delighted that this year's NLCUP meeting is co-located with ACUC, and I expect there to be powerful synergies between the two events. This is a great opportunity for our two organizations to strengthen and grow the credit union industry."
     
    Keynoting this year's ACUC in San Diego are business innovator and author Tom Peters; USAF pilot and philanthropist Major Dan Rooney; science-based marketer Sally Hogshead; bestselling business, technology and media author Chris Brogan; and a surprise keynoter, to be announced soon.

    Mich. league CEO is SBA National Fin Services Champion

    LANSING, Mich. (4/6/12)--David Adams, president/CEO of the Michigan Credit Union League (MCUL), has been recognized by the U.S. Small Business Administration (SBA) as the 2012 National Financial Services Champion for his advocacy and work to increase small business lending at a time when access to capital is a national challenge.
     
    The recognition of Adams marks the first time in recent memory that a credit union representative has been honored as a financial services champion for small businesses.
     
    "Your hard work, innovative ideas and dedication to your community have helped you succeed," SBA Administrator Karen G. Mills wrote in the letter announcing the award. "The SBA is pleased to recognize your achievements and your role in driving our nation's economic growth."
     
    Adams also received the state-level Financial Services Champion award from the Michigan Celebrates Small Business organization, made up of the U.S. SBA, the Michigan Economic Development Corp., the Small Business Association of Michigan,  Greater Lansing Business Monthly, the Edward Lowe Foundation and the Michigan Small Business & Technology Development Center.
     
    During Adams' tenure, Michigan credit unions' small business loans have increased by an average of 21% annually in the past five years--more than quadruple the U.S. credit unions' 2011 growth rate of 5.1%. This comes during tough economic times when most banks were pulling back on business lending.
     
    Nationally, credit union member business lending (MBL) has increased by nearly 45% between 2007 and 2011, while business lending by banks fell nearly 15% during that period, according to the Credit Union National Association (CUNA).
     
    MCUL has been a strong advocate for efforts to strengthen small business lending, including calling for passage of a bipartisan plan to increase the arbitrary cap on credit unions' MBL from 27.5% of credit union assets to 12.25%. CUNA estimates that this member business lending increase would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.
     
    The Credit Union Small Business Jobs Bill (S. 2231/H.R. 1418) has the support of U.S. Sens. Carl Levin and Debbie Stabenow, and nine of Michigan's 15 members of Congress, including Reps. Gary Peters, Thaddeus McCotter and Bill Huizenga, who sit on the House Financial Services Committee. The legislation is expected to come before the full Senate in the next few weeks.
     
    "For me to be recognized as the financial services champion by the U.S. Small Business Administration as well as the state level Financial Services Champion award from the 'Michigan Celebrates Small Business' consortium, truly is a testament to the good works of credit unions on behalf of small businesses," Adams said. "Whether working to pass important enabling legislation like the Credit Union Small Business Jobs Bill or the recently passed Small Business Lending Fund Act (H.R. 5297), MCUL and CUNA are strong advocates for expanded credit union business lending authority for all lenders. The league's other efforts to showcase and expand our credit unions' commitment to business lending are the basis for this wonderful recognition from the Small Business Administration, which I consider to be a team award for our industry."

    CUAD Mindburst Webinar addresses SEG relationships

    BISMARCK, N.D. (4/6/12)--The Credit Union Association of the Dakotas (CUAD) will sponsor a webinar at 1 p.m. CT Thursday on strategies to develop beneficial relationships with select-employee groups (SEG).
     
    Lead by Josh Allison, founder of Think Café, the webinar, part of CUAD's Mindburst series, will focus on the four Cs of business development--content, connection, communication and conversion. 
     
    "This particular webinar would be a great learning opportunity for business development professionals, marketing people, and managers tasked with SEG relationship management," said Amy Jo Johnson, CUAD director of learning.
     
    Any credit union, regardless of association, can attend the Mindburst Webinars, CUAD said

    CU Members Mortgage has first quarter signup spree

    DALLAS (4/6/12)--Credit union mortgage services provider CU Members Mortgage signed 11 new credit union clients in the first quarter.
     
    Each of the clients will begin using the mortgage company's services in the second quarter.
     
    "It's been a whirlwind of credit union signings since January, which bodes well for the industry and the economy, we believe," said Linda Clampitt, senior vice president of CU Members Mortgage.

    Poland's Buczkowski to keynote WYCUP at World CU Conference

    GDAŃSK, Poland (4/6/12)--Grzegorz Buczkowski, president and chair the Cooperative Savings and Credit Union Mutual Insurance Society (TUW SKOK), a World Council of Credit Unions' (WOCCU) associate member organization in Poland, will keynote this year's WOCCU Young Credit Union People (WYCUP) program.
     
    The WYCUP program will be held in conjunction with the World Credit Union Conference, July 15-18 in Gdańsk, Poland.
     
    Buczkowski didn't know he was headed down a credit union career path when he was hired in 1990 as a translator by Poland's Solidarity movement. At the time, a delegation from the trade union that helped overthrow communism was searching for an alternative to a financial service industry left in ruins by the departing communist government. Buczkowski helped bring together parties from Poland and the U.S. to create one of the world's fastest-growing and most successful credit union movements.
     
    But in 2001, Buczkowski won a scholarship from the WOCCU WYCUP that helped set him on his career path. "Participating in WYCUP gave me the opportunity to network, exchange ideas and create professional relationships that have lasted to this day," said Buczkowski. "The experience was, to me, priceless."
     
    The program, designed for credit union professionals and volunteers under the age of 35, provides specialized educational and networking sessions, and allows participants to participate in the conference networking and general sessions. Five WYCUP participants will receive scholarships that provide all-expense-paid trips to the 2013 World Credit Union Conference in Ottawa, Canada.
     
    The WYCUP program seeks individuals who have already made significant contributions to the development of their own credit unions or regional/national credit union systems and have demonstrated the potential to employ their unique talents at the international level. Credit unions and credit union organizations that are World Council members can nominate young leaders to compete for a WYCUP scholarship.
     
    To be eligible for the scholarship, nominees must:

    Filene report examines 'highly effective' CU managers

    MADISON, Wis. (4/6/12)--Because they must learn quickly and solve problems effectively, about 87% of middle managers are above average learners, according to a recent study conducted by the Filene Research Institute.
     
    The results of the survey--and the implications for credit unions--are described in Filene's latest report, "Attributes and Skills of Highly Effective Credit Union Managers," written by Michael Neill, president and founder of Michael Neill & Associates Inc.
     
    Filene said the report can be used as a tool in hiring and promoting credit union middle managers.
     
    The study also identifies other traits of effective middle managers, including:
    Also noted in the survey is where the group scores below average employees. Being lower than average is not negative; it highlights traits where good middle managers are atypical, according to the study. These traits include:

    Collection tactics prompt Dykstra letter to Amer. Banker

    ONTARIO, Calif. (4/6/12)--The April 4 edition of American Banker included a letter to the editor from Diana Dykstra, in which the president/CEO of the California and Nevada Credit Union Leagues admonishes financial institutions to not victimize their members and customers with inaccurate record keeping.
     
    Dykstra praised the Banker for an article which revealed that Bank of America knowingly sold credit card receivables that contained inaccurate information to a collection agency.
     
    "My first instinct as a credit union CEO is to say that more banking institutions need to stop looking at their customers as just numbers on a balance sheet," Dykstra wrote.  "At credit unions, one tends to find far less of this activity, because our organizations are so people centric. Indeed, our institutions are owned and operated by our own members. The people who belong to the organization also serve the organization."
     
    The article should serve as a wake-up call to the financial services industry, Dykstra said.
     
    Financial institutions should focus on providing service to their members and customers, she added.
     
    To read Dykstra's letter to the editor, use the link.

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    NCUA names two to new posts

    ALEXANDRIA, Va. (4/6/12)--Ronnie Levine will soon serve as the National Credit Union Administration's (NCUA) chief information officer (CIO), and Tim Segerson will take on the role of deputy director of the NCUA's Office of Examination and Insurance (OEI), the agency announced on Thursday.

    Levine most recently served as CIO at the Bureau of Land Management, and has also worked for the Department of Transportation and the Joint Chiefs of Staff. She will replace now retired former NCUA CIO Doug Verner on April 23.

    Segerson has worked at the NCUA since 1992, when he first joined as an examiner. He has served as a supervisory examiner, director of supervision, problem case officer, and director of risk management during his time with the agency. He will take on the role of former OEI Deputy Director John Kutchey, who was recently promoted to the OEI deputy executive director position.

    NCUA Chairman Debbie Matz said both Levine and Segerson will play key roles in shaping the agency's future. "Their professional backgrounds, personable management styles, and forward looking perspectives are well suited for NCUA. Ronnie will ensure that NCUA stays at the cutting edge of information technology management providing critical support to our examiners, and Tim will facilitate our ongoing efforts to reach out and better communicate with credit unions," she added.

    PCUA, CRIF Lending deliver merchant lending

    HARRISBURG, Pa. (4/6/12)--A new partnership between the Pennsylvania Credit Union Association (PCUA) and CRIF Lending Solutions, Atlanta, will help Pennsylvania credit unions compete with finance companies for merchant lending.
     
    A PCUA release stated the partnership will provide full-service, outsourced merchant lending to enable credit unions to offer 24/7 instant financing on products ranging from ATVs to swimming pools to online jewelry sales. 
     
    The point-of-sale financing solution aims to ease credit unions' entry into a new market by handling every aspect of merchant lending, including merchant sourcing and sign-up, contract funding and disbursement.

    Former Coastway CU applies for stock IPO

    CRANSTON, R.I. (4/5/12)--Coastway Community Bank, which converted from Coastway CU to a banking charter in 2009, is seeking regulators' approval to form a depositor-governed mutual holding company.
     
    Creating a mutual holding company typically allows banks to shift to stock ownership through an initial public offering (IPO). A Coastway release said the mutual holding company would be a separate legal entity that would own and control the bank as a subsidiary (Providence Business News April 4).
     
    Depositors will vote on Coastway's plan later this month. The reorganization would then become subject to approval by the Federal Reserve Board, the Federal Deposit Insurance Corp. and the Rhode Island Department of Business Regulation.
     
    Coastway stated it intends to use the reorganization to expand financial products and services, expand its capital base and establish relationships with other banks and financial service providers.

    Bankers' 'friends' form SuperPAC

    WASHINGTON (4/6/12)--A group of 10 state banking association leaders have joined together to form a new pro-banker SuperPAC, dubbed "Friends of Traditional Banking."

    The SuperPAC's mission, as stated on its homepage, friendsoftraditionalbanking.com, is to support members of Congress that support bank interests, and "to replace those members of Congress who do not."

    While political action committees are limited in the amount of money they can spend on a given contest, SuperPACs do not have such limitations. They are only prevented from having direct contact with the candidate they are supporting.

    The Washington Post reported that the SuperPAC intends to focus on two electoral contests per cycle.

    "Congress isn't afraid of bankers… They don't think we'll do anything to kick them out of office. We are trying to change that perception," Oklahoma Bankers Association President/CEO Roger Beverage told American Banker (April 5).

    Credit Union National Association (CUNA) Vice President of Political Affairs Trey Hawkins said the development of this pro-bank SuperPAC highlights the importance of credit union grassroots advocacy, and political action by CUNA's Credit Union Legislative Action Council (CULAC), in this critical election year.

    "Many credit union friends in Congress are stepping up on behalf of credit unions in the face of increased banker opposition, and CULAC and credit unions must be there to stand with those who stand with credit unions, especially if our friends are going to find their re-election campaigns targeted by a banker Super PAC," he added.

    CULAC has engaged in independent expenditures on behalf of credit union friendly candidates for nearly a decade, and currently collects contributions from more than 29,000 individuals, with the average contributor donating around $65 per calendar year, Hawkins said.

    The many, small-dollar individual contributions are indicative of the depth of credit unions' grassroots support, which has always been the movement's greatest political asset, Hawkins added. "We have one great advantage that banks cannot compete with, and that is our 94 million members, 65% of whom say that a candidate's stance on credit union issues matters."

    CULAC raised an estimated $1.8 million in funds from credit union supporters in 2011, and those funds were distributed evenly among Republican and Democratic candidates.

    CULAC, as of Jan. 1, had nearly $800,000 in funds to spend on 2012 elections.

    CUs help kick off hospital project for conventions

    CHARLOTTE, N.C. (4/6/12)--When the 2012 Democratic National Convention ends, credit unions will leave behind a rejuvenated children's playground on the rooftop of Charlotte, N.C.'s Levine Children's Hospital.

    The Credit Union National Association (CUNA), state credit union leagues, credit unions nationwide and the National Journal are working with the Democratic National Convention Committee (DNCC) to complete the project in time for the September convention.

    Click for slide showThere was a significant contingent of Carolina credit union representatives at the kickoff event for the rejuvenation of the rooftop playground at Carolinas HealthCare System's Levine Children's Hospital in Charlotte. Shown here from left are: John Radebaugh, president/ CEO of the North Carolina Credit Union League, Raleigh, N.C.; Judy Tharp, president/CEO of Piedmont Advantage CU, Winston-Salem, N.C. ; Maurice Smith, chair, Local Government FCU, Raleigh, N.C.; John Carlson, president/CEO of Sharonview FCU, Fort Mill, S.C.; John Slack, former Carolina Credit Union Foundation (CCUF) CEO; Jennifer Parker, senior vice president, Founders Federal Credit Union, Lancaster, S.C.; Steve Fowler, president/ CEO, South Carolina Credit Union League, Columbia, S.C.; Beverly Gagne, president/CEO, SAFE FCU, Sumter, S.C.; and, John McGrail, CEO, CCUF, Kernersville, N.C. (CUNA Photo)
    Credit union volunteers are expected to lend hands-on support to help convert the existing rooftop space on the hospital's 12th floor to a dynamic play area with new features such as a touch-activated light and color "bubble wall," a deck and pavilion, outdoor play equipment and environmental improvements.

    The project was launched with a ceremonial "water sprinkling" of freshly planted seeds that will become flowers on the finished playground.

    "We're excited to put the credit union philosophy of people helping people into action by helping with this worthy project, and in the process join with the Democratic National Convention to shine a light on the amazing work that Levine Children's does for the communities it serves," John Radebaugh, North Carolina Credit Union League president/CEO, said.

    A similar playground renovation project is planned for All Children's Hospital in St. Petersburg, Fla. That project, which will retrofit an existing playground with special play equipment for ill and injured children suffering from a variety of illnesses and accidents, will honor the 2012 Republican National Convention, which will take place in nearby Tampa.

    "Credit unions really see this as an opportunity to leave something positive behind that will continue to benefit the Charlotte and Tampa communities long after the balloons have dropped and the convention ended," CUNA President/CEO Bill Cheney said.

    Since 2000, credit unions have honored the host cities for each national convention with a "leave behind" project that benefits local communities.

    The two projects will cost a combined $600,000, and credit unions nationwide, the Carolinas Credit Union Foundation, the Southeastern Credit Union Foundation, CO-OP Financial Services, and CUNA Mutual Group have begun fundraising efforts.

    April open NCUA meeting cancelled

    ALEXANDRIA, Va. (4/6/12)--April's open board meeting has been cancelled, the National Credit Union Administration (NCUA) said on Thursday.

    That meeting was scheduled to be held on April 12. The closed board meeting that was scheduled for that date will still be held, the NCUA said, and supervisory matters are on the agenda.

    This is the second open board meeting the agency has cancelled this year. The NCUA previously cancelled its Feb. 16 open board meeting, with NCUA Chairman Debbie Matz saying board members concluded there were no essential Board action items to publicly consider at that time.
    Matz said the agency is "carefully evaluating which NCUA rules need to be streamlined, eliminated or clarified in 2012," and may cancel additional meetings this year, if needed.

    Any additional meeting cancellations will be made the month of the meeting.

    Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said the April cancellation is consistent with Matz's recent statement that the agency plans to slow the pace of new regulations. "Any time a regulator avoids issuing new rules, it is a positive development, and we view the cancellation of the April meeting—the second NCUA board meeting cancelled this year—in that light," Dunn said.

    Judge throws out ATM notice lawsuit vs. PSECU

    HARRISBURG, Pa. (4/6/12)--A federal judge in Harrisburg, Pa., has dismissed a lawsuit that had alleged a credit union violated the Electronic Funds Transfer Act (EFT) with improper ATM fee notification, saying in his ruling that the credit union showed undisputed evidence that an unknown third party had removed its posted notice illegally.
     
    The suit was filed on May 24, 2011 by Gerald Rivello Jr., who withdrew funds from an ATM owned by Pennsylvania State Employees CU, a $3.8 billion asset credit union located in Harrisburg, on April 30, 2011, according to the court documents.
     
    In the past two years, there has been a spike in the number of lawsuits filed by individuals against more than three dozen credit unions and banks based on missing ATM fee notifications. Some plaintiffs travel the country looking for ATMs without the proper notices attached, take photographs, and sue several financial institutions (News Now A.
     
    In this suit, Rivello, who was not member of the credit union, alleged he was charged a fee for the transaction and alleged that at the time there was "no clear and conspicuous external notice at or near the ATM that a fee would or may be charged."
     
    U.S. District Judge Robert D. Mariani, in a ruling issued March 28, ruled that Rivello failed to provide evidence rebutting the credit union's complete defense, citing section 1693 (h) of the U.S. Code, which says that if the required ATM notice has been posted by the operator in compliance with the law and the notice is subsequently removed, damaged or altered by any person other than the operator of the machine, the operator has no liability.
     
    His ruling cited affidavits and photographs that indicated the credit union posted a compliant fee notice to the ATM in 2006, that none of the credit union's employees removed the ATM fee notice, and when employees discovered the sticker was missing during a routine examination of the machine, they promptly affixed a new notice to the ATM.
     
    The credit union testified that on February 2011, it initiated procedures to provide for routine inspections of its ATMs to ensure the compliant notices were posted. On May 12, 2011, an employee noticed the machine did not have a properly affixed fee notice and replaced it and other signage on the ATM and photographed the machine.  After the complaint was served another employee photographed the machine on Aug. 9, 2011 and the photo showed old adhesive next to the existing fee notice, which showed an earlier fee notice had been affixed.
     
    "These affidavits present facts, which if unrebutted, require a finding that some third-party, and not the defendants, removed the required fee notice from the ATM," said the judge's ruling.  Rivello failed to offer evidence that would cast doubt on the defense and did not offer a rebuttal beyond merely stating the factual allegations from his original complaint. "Plaintiff's papers and submissions to this court fail to provide any evidence rebutting [the credit union's] defense beyond the assertion that the ATM did not contain the appropriate fee notice. Such submissions do not constitute evidence of a disputed fact."
     
    A rash of lawsuits in 2010  prompted CUNA Mutual Group to warn credit unions to develop and write procedures for regularly inspecting their ATMs to ensure their signs are posted, to photograph the ATMs at the time of inspection, and to maintain the inspection log for all ATMs and have credit union management review the log (News Now April 25, 2011).
     

    Iowa business owner : Raise MBL cap

    IOWA CITY, Iowa (4/6/12)--The owner of an Iowa City bed and breakfast has written a letter to the Iowa City Press-Citizen, urging Congress to pass the legislation that would increase credit unions' ability to provide more member business lending (MBL).
     
    Shirley Hendrickson wrote that when her family loved to Iowa City from Arizona several years ago, they purchased the Mission House Bed and Breakfast.
     
    "We went directly to the credit union, and they learned with us and gave us the support we needed, personally and for our business," she wrote in Sunday's Press-Citizen
     
    She noted that legislation is moving in the U.S. Senate "that would enable credit unions to make more loans to small businesses, like mine. This legislation would be a great help to credit unions. And the timing is certainly right. The additional lending authority would enable credit unions to do more of what they do best--make safe and sound to their members in this case members who are looking to start or expand a business."
     
    "Credit unions stand ready to help" but are constrained by the current 12.25% of assets MBL cap. The bipartisan legislation introduced in the House and Senate would raise the cap to 27.5%.  She cited the Credit Union National Association's statistics:  passing the legislation would mean $13 billion more available for small businesses, providing capital to create 140,000 new jobs at no cost to the taxpayer.  "More than 2,000 of those jobs would be right here in Iowa," Hendrickson said.
     
    "Congress needs to act," she urged. "With more capacity to make small business loans, credit unions such as mine can do more to help their members, spur the creation of new jobs and help accelerate our nation's economic recovery."
     
    Use the link to read the full letter.  Also, see links to videos of Mike Kelley and Joe Trettel, two small business owners in North Carolina, talking about their support of credit unions in raising the MBL cap. News Now reported about their support in an article, "MBL push at state level grows, reported in media," on Thursday. Use the links.

    Former WesCorp officials ask court for jury trial

    LOS ANGELES (4/6/12)--Officials of the former Western Corporate FCU have filed amended counterclaims and a demand for a jury trial in the lawsuit filed against them by the National Credit Union Administration (NCUA). 
     
    The counterclaims were made Wednesday before the U.S. District Court Central District of California in Los Angeles by two of the officials NCUA had sued--Robert A. Siravo, former president/CEO of WesCorp, and Thomas E. Swedburg, former director of human resources.
     
    Their second amended answer and counterclaims docuoment seeks dismissal of the case, with prejudice, and asks the court to order that NCUA, as liquidating agent for WesCorp, reimburse Siravo and Swedberg for their defense costs, damages, and other court costs. The filed document said they had incurred more than $100,000 in attorney's fees and costs of their defense. Siravo and Swedberg also demanded NCUA indemnify them under Policy 21 adopted by WesCorp to so current and former officials and employees could recover costs and attorney fees in case of a lawsuit.
     
    NCUA sued five WesCorp senior executives to try to recoup $6.8 million in investment portfolio losses from mortgage backed securities, alleging the executives were negligent in monitoring the corporate's investments. NCUA also alleged a breach of fiduciary duty and fraud related to the investments that contributed to WesCorp's collapse.
     
    In earlier decisions last month U.S. District Judge George H. Wu  granted NCUA's motion to strike certain defense but allowed the executives to amend their arguments related to their indemnification claim.
     
    The court document filed Wednesday by the WesCorp executives also addressed the issues of decision-making related to investments WesCorp purchased and to WesCorp's Supplemental Executive Retention Plans (SERPs). Siravo received a lump sum SERP payments in 2008 totaling $6.8 million and Swedberg received $1.2 million, the document said.
     
    Siravo and Swedberg argue that they acted in "reasonable good faith reliance on the statements, representations, and approvals of others upon whom they were entitled to rely, including but not limited to the WesCorp Board of Directors, individual directors, other WesCorp officers, the ALCO [WesCorp's Asset and Liability Committee], rating agencies, underwriters, brokers, issuers, auditors, investment bankers, financial advisors, and counsel."

    Vermont CUs have their day at the Statehouse

    SOUTH BURLINGTON, Vt. (4/9/12)--Credit union leaders gathered Wednesday at the Vermont Statehouse to hear speakers and meet with many of the state's 180 legislators.
     
    Vermont State Speaker of the House Shap Smith speaks at the state's annual CUs in the Statehouse event. (Photo provided by the Association of Vermont Credit Unions)
    Participants heard comments from State Senate President John Campbell and Speaker of the House Shap Smith, according to the Association of Vermont Credit Unions (AVCU).  Smith spoke about Hurricane Irene's impact on the state and the state's budgetary pressures.
     
    Perspective on state and federal issues was also provided by Vermont Department of Banking, Insurance, Securities & Health Care Administration (now the Vermont Department of Financial Regulation)  Deputy Commissioner Tom Candon,  AVCU President Joe Bergeron, and the association's lead lobbyist, Adam Necrason.
     
    The presentations and reception were preceded by AVCU's annual display in the Statehouse Card Room.  For more than three hours, a steady stream of legislators stopped by throughout the morning and early afternoon to discuss issues such as Americans With Disabilities Act (ADA) regulations, Internet lenders, state and municipal deposits, and the credit union marketplace.  They talked with AVCU Vice President Bryan Kent, Economy of Me Program Manager Colin Ryan, and AVCU Legal Counsel/Lobbyist Richard Brock.
     
    "This is our most important state-level legislative event," said Bergeron of the annual CUs in the Statehouse day. He noted the support from credit union leaders to join the effort "to add significant impact to daily lobbying efforts. One-on-one connections made in a Statehouse social setting go much further than any laundry list of facts and figures we can produce, he said.
     
    "Throughout all the years we've done this, legislators have become more aware of credit unions, more appreciative of the event itself, and have told us repeatedly how much they look forward to and enjoy it."

    Newspaper: Calif. members count on CUs' services

    SAN DIEGO (4/9/12)--More Californians are counting on services from credit unions, according to a San Diego Business Journal (March 26) report about membership growth in the state.
     
    Overall membership in the state swelled last year to about 9.7 million, an increase of 2% or 215,000 members, said the California Credit Union League in the article, "More Members Bank on Credit Unions' Services."
     
    During fourth quarter, the state's credit unions added nearly 167,000 new members, but on a net basis the number was closer to 77,000, after counting attrition, said Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues.
     
    Many of the gains occurred in late September/early October and involved moving accounts from the "Big Five"--Chase Bank, Bank of America, Citibank, Wells Fargo Bank and U.S. Bank--after large banks decided to charge customers for using their debit cards, Dykstra told the Journal.
     
    The article noted that San Diego-based California Coast CU attracted about 11,000 new members during 2011, a 57% increase over 2010 membership gains. Its CEO, Marla Shepard, told the Journal that the growth was the result of growing dissatisfaction with bigger banks. About 75% of the new members opened a checking account and got debit cards, while 24% opened a loan. 
     
    The newspaper also noted that the league and credit unions are supporting legislation to increase credit unions' member business lending (MBL) cap to 27.5% of assets from the current 12.25%.
     
    Shepard said her credit union is prevented from making new small-business loans because it has already reached its MBL cap--about $230 million.  She noted that banks have cut back considerably on small business lending the past several years  and said credit unions should be given the ability to extend MBLs because there is a real need for the loans.
     
    The Credit Union National Association (CUNA) estimates that increasing the MBL cap would mean $13 billion would be available for investing in new small business loans. That, in turn, would help create 140,000 jobs the first year, without costing taxpayers a dime, said CUNA. The U.S. Senate is expected to vote on a bill to increase the cap sometime after the congressional recess.

    PolicyWorks paper: Sound policies important to CUs

    DES MOINES (4/9/12)--Incomplete or nonexistent policies can trigger a sequence of serious consequences and potentially end a profitable product or service, according to a new white paper from PolicyWorks.
     
    "More than simply alerting examiners to a problem, insufficient policies expose a credit union to needless risk," writes PolicyWorks Senior Compliance Officer Jami Weems. "Policies exist for a reason--to provide guidance and to ensure rules are consistently followed by all credit union staff."
     
    In an excerpt from her white paper, "In Turbulent Times, Credit Union Policies Are Life Preservers," Weems notes that examiners operate under the premise that credit unions are up to date on all rules and regulations, which means they expect a credit union's policies and procedures to reflect current practices.
     
    If a credit union has a new product or service that requires a new policy (or if a policy for an existing product or service was never drafted), Weems offers two ways to simplify the process.
     
    The first is to borrow from a similar financial institution. By their very nature, credit unions are cooperative, so many are willing to share their policies. If employing this method, however, use caution, Weems notes. Examiners want to see that policies accurately reflect business practices, so credit unions should analyze any policy borrowed from another credit union carefully after it's been tailored, to ensure it complies with the necessary regulations.
     
    The second way to simplify the process of writing a new policy is to download customizable templates. To save time--and the potential for red-flag mistakes--downloading customizable policy templates is an excellent route for credit unions of all sizes, even those fortunate enough to have a compliance specialist on staff, Weems said.
     
    To be in compliance with all the current rules and regulations, Weems recommends credit unions put together a plan for updating policy manuals. This plan, she says, needs to detail how the credit union will make policymaking and maintenance a part of the credit union's overall strategic plan. "Think of this plan as 'a policy for policies,'" suggests Weems.
     
    PolicyWorks is an Iowa-based firm that provides solutions to credit unions' regulatory compliance needs.
     
    To download the white paper, use the link.

    TransUnion study: Consumers pay auto loans first

    CHICAGO (4/9/12)--In 2011, consumers were more likely to pay their auto loans before their credit cards and mortgages, according to a TransUnion study.
     
    The divergence in payment patterns--where consumers are increasingly apt to pay their credit cards before their mortgages--has continued for four straight years, according to TransUnion's Payment Hierarchy study update.
     
    "The reversal in payment patterns between credit cards and mortgages has been well documented, but our findings were illuminating because it had not been previously clear that auto loans were considered a higher priority by consumers than both credit cards and mortgages," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit.
     
    "With unemployment remaining high and real estate values remaining stagnant or further depreciating, consumers continued to pay their credit cards ahead of their mortgages. However, the importance of their auto loans appears to have trumped even the value they place on their credit cards," Becker added.
     
    The TransUnion analysis looked at a sample of roughly four million consumers in each quarter of 2011 who had at least one open auto loan, one open credit card account and one open mortgage. The study found in each quarter that there was a clear preference for remaining current on auto loans, ahead of credit cards and mortgages. Specifically, of the consumers who were delinquent on any of these products:
    "In other words, the auto loan is seldom the first choice when a consumer has to decide which payment to miss," Becker said.
     
    This trend goes against the advice many credit union industry financial planners have given in the past--that mortgage payments should come first so the member doesn't risk losing the family home.
     
    Auto loans have become the preferred payment because consumers need to get to work or look for employment. Also, a car loan is not a revolving loan--the impact of repossession is greater than the loss of a credit card, Becker explained.
     
    "In addition, consumers may have equity in their autos after several years of payments that they are looking to preserve--which is no longer the case for most homes," Becker added. "In fact, negative equity has become increasingly common for homes, which may further contribute to the shift in payment preference to auto loans."

    TCUF offers 100 free fin lit webinars in April

    FARMERS BRANCH, Texas (4/9/12)--Through a grant from the Texas Credit Union Foundation (TCUF), the Consumer Credit Counseling Service of Greater Dallas (CCCS) will offer 100 free, live webinars throughout April in honor of National Financial Literacy Month. 
     
    The 100 webinars will focus on 27 personal finance topics, ranging from credit scores and getting out of debt to buying a home and preventing foreclosure.
     
    "The foundation is committed to building strong communities by supporting programs and initiatives that help to improve the financial circumstances of Texas families," said Courtney Moran, TCUF executive director. "Financial stability is an essential ingredient to maintaining a strong, healthy family unit."
     
    Todd Mark, vice president of education for CCCS of Greater Dallas, said the agency wants to offer consumers additional, convenient educational resources so they can be empowered to make healthy financial decisions, and ultimately, achieve financial freedom.
     
    Mark said the webinars would not have been possible without the support of the foundation.
     
    Webinar topics are as follows:
    The Credit Union National Association (CUNA) sponsors the National Youth Saving Challenge during the month of April in celebration of National Financial Literacy Month. It is held in conjunction with National Credit Union Youth Week, also sponsored by CUNA, which will be held April 22-28, with the theme "Be a Credit Union Super Saver." Last year nearly 146,000 young members deposited $28.5 million into their saving accounts during National Youth Savings Week--with 9,058 new accounts.

    Inside Washington

    Minn. Family Involvement Council leads youth sessions

    EAU CLAIRE, Wis. (4/9/12)--The Minnesota Credit Union Foundation's Family Involvement Council (FIC) led two sessions during the "Co-ops YES!" Youth Leadership Conference, March 19-20, in Eau Claire, Wis.
     
    More than 100 students from Minnesota and Wisconsin attended the "Co-ops YES!" Youth Leadership Conference in Eau Claire, Wis. Members of the Minnesota Family Involvement Council led two sessions during the event. (Photo provided by the Minnesota Credit Union Foundation.)
    More than 100 high school students attended the event, hosted by the Cooperative Network, which serves more than 600 cooperatives--including credit unions--in Minnesota and Wisconsin.
     
    The FIC's presentation, "Credit Unions: A Cooperative. A Career," focused on working with students to understand the benefits of credit unions and their belief in the cooperative philosophy of "people helping people." They also helped the group of high school juniors and seniors develop a vision for their future by discussing the types of careers available at credit unions.
     
    "We made these sessions engaging and interactive for the students, and they offered intriguing questions about how credit unions operate and the emerging job possibilities available," said FIC Chair Bridget Moeller of Greater Minnesota CU, Mora, Minn. "We worked to impress on the students the credit union core values of equality, participation and mutual help, as well as how credit unions strive to improve the well-being of their members."
     
    In addition to Moeller, FIC presenters included Shannon Butler of Postal CU, Woodbury, Minn., and Andrea Molnau of United Educators CU in Columbia Heights, Minn. As a way to promote the International Year of Cooperatives, along with the credit union difference, the group also discussed the concept of cooperatives and how credit unions fit into that mold. They also described the value that credit unions, and all cooperatives, provide within the financial marketplace.
     
    The United Nations General Assembly has declared 2012 as the International Year of Cooperatives, highlighting the contribution of cooperatives to socio-economic development, particularly their impact on poverty reduction, employment generation and social integration.
     
    This is the third year that the foundation's Family Involvement Council has participated in the Cooperative Network's youth leadership conference, which aims to build leadership skills that will offer opportunities to tomorrow's cooperative leaders.

    Kansas appeals court ruling favors CU in state tax case

    WICHITA, Kan. (4/10/12)--A Kansas appeals court has overturned an order by the Kansas Court of Tax Appeals,  with the higher court saying that Wichita-based Cessna Employees CU (CECU) is exempt from a state retailers' tax on travel-related expenses that were passed on to the credit union in a vendor's invoice.
     
    According to the ruling Friday by the Court of Appeals of the State of Kansas, Cessna had made a claim on June 30, 2008, for a $3,333 refund of the state taxes on travel, hotel and meals listed by an invoice from a service provider, Jack Henry & Associates (JHA), with whom the credit union had contracted computer upgrade services that required its employee to travel to Wichita.  JHA invoiced CECU for its services, hardware and software, and presented a separate invoice for the travel purchases (its employee's transportation, meals and lodging).  Cessna paid the invoice but sought a refund of the sales tax amount.
     
    The state tax department denied the claim on June 30, 2008, and CECU appealed the denial on Nov. 11, 2008 to the department secretary, who upheld the department's denial on July 17, 2009. The $209 million asset credit union then appealed to the Court of Tax Appeals on Aug. 17, 2009,
     
    The lower court said in its summary judgment that the travel expenses billed to the credit union were "part of the total amount of consideration given by CECU in the transaction for which the taxable goods and goods and services were sold" and thus subject to Kansas retailers sales tax as part of the 'gross receipts' of JHA in the transaction."
     
    However, the Kansas Court of Appeals concluded there was no "sale" of the reimbursed travel expenses, and it reversed and remanded the case with directions to grant CECU's refund claim.
     
    It said the amount invoiced was the original travel expenses plus sales tax paid, but with sales tax then computed on that total and billed for reimbursement to CECU. "The sales tax at issue here has been levied upon the total amount of consideration given by CECU in the transaction with JHA for providing the upgrades. In this transaction…we find that the travel is properly considered an expense incurred by the seller," the ruling said.
     
    "We found no ambiguity in the statutory language as it applies to this case. Quite simply, there were no retail sales involving the travel expenses, so no retail sales tax may be applied to them--those taxes already having been fully paid by the end consumer of those expenses …," the ruling continued.
     
    The higher court also noted that even if the statutes were ambiguous, "the rule of strict construction of tax imposition statutes must favor the taxpayer."

    MCUA: 42% of Missouri members lack emergency savings

    ST. LOUIS (4/9/12)--An online survey of more than 1,100 Missouri credit union members indicates that 42% have no emergency savings.
     
    The Missouri Credit Union Association (MCUA) statewide survey of members' saving and purchasing habits also revealed that less than 30% have enough savings to last four months or more.
     
    Barry Brakeville, corporate communications director of $1.8 billion asset CommunityAmerica CU, Kansas City, Mo., said in an MCUA release that the survey should be a "wake-up call" for credit unions. He noted that "consumers should expect their financial institution to be a partner in helping them achieve financial freedom."
     
    Many survey comments reflected that members are worried about their lack of savings and frustrated by an inability to save, with 58% reporting they were "not at all happy" with their savings balance. For example, one respondent commented, "It's impossible to save money if you can't get a job," while another responded, "We had a year's worth of savings before my husband lost his job." 
     
    Financial experts typically recommend building an emergency savings account that can cover three months' worth of expenses. Heather DeMint, vice president of marketing at $117 million asset United CU, Mexico, Mo., said the credit union doesn't suggest an actual dollar amount for members to save, but instead encourages them to save on budget items such as insurance, cell phone plans and cable television.
     
    "Credit reports can help consumers pinpoint ways to save," DeMint said. "Often times, we suggest debt consolidation via low-rate credit card or home equity lines of credit."
     
    The survey collected members' responses throughout January 2012.

    CUNA nominates 28 for CFPB consumer advisers

    WASHINGTON (4/9/12)--The Consumer Financial Protection Bureau (CFPB) is developing a Consumer Advisory Board to help keep the agency abreast of emerging trends and practices in the financial services and products industry, and the Credit Union National Association (CUNA) last week submitted a list of 28 nominees from credit unions across the country.

    "All of these individuals have indicated a willingness to serve and to provide the agency with the benefit of their experience, knowledge and expertise on issues relating to consumer protection, financial institution operations, financial regulations and public policy concerns," CUNA President/CEO Bill Cheney said.

    Cheney added that the advisory board "has the potential to be extremely important to the agency in its oversight of consumer protection," and added that CUNA strongly supports "balanced membership on the board who will appreciate the need for protections for consumers in the financial marketplace while understanding the need to avoid burdening entities such as credit unions that already work hard to ensure their members are well served."

    The work of the agency "will be enhanced if several members of the board are from credit unions or credit union leagues," Cheney added. The CUNA CEO suggested that nominees that are not accepted for the consumer board be considered for the CFPB's planned Credit Union Advisory Council.

    Those interested in more information on the CUNA nominees may contact CUNA Senior Vice President and Deputy General Counsel Mary Dunn at mdunn@cuna.coop.

    Catalyst taps 12 pros for council's western region

    PLANO, Texas (4/9/12)--Catalyst Corporate FCU has tapped 12 credit union professionals to serve on the western regional component of the newly formed Catalyst Councils.
     
    The western regional members become part of the 36-member Catalyst Councils program that was created to gather members' perspectives for the corporate's planning and decision-making.
     
    Members appointed to the Western Regional Catalyst Council are:
    The western regional group will meet for the first time in late May.

    Covera, N.E. CU Services announce partnership

    ALBANY, N.Y. (4/9/12)--The Massachusetts Credit Union League's member credit unions will offer training, portfolio development support, fraud prevention and marketing support through a partnership with Covera, a provider of credit union payment solutions.
     
    "We have known and worked with Covera's team for years and truly respect their integrity, expertise and responsiveness to the member credit union's needs," said Bonnie Doolin, senior vice president and chief operating office of N.E. Credit Union Services, which is owned in partnership by the Massachusetts, New Hampshire and Rhode Island credit union leagues.
     
    Covera provides debit, credit and ATM programs to more than 300 credit unions.

    CUNA/league radio ads tout MBL aid for small biz

    WASHINGTON (4/9/12)--The Credit Union National Association (CUNA) and state credit union leagues are today letting small business-owning listeners that have had trouble accessing loans know that "credit unions are ready to lend a hand," and will have more money to lend to them, once Congress moves to increase the credit union member business lending cap.

    CUNA and the Mountain West Credit Union Association, the Virginia Credit Union League, the Credit Union Association of the Dakotas, the Nebraska Credit Union League, the Wisconsin Credit Union League, the South Carolina Credit Union League, the Iowa Credit Union League, the League of Southeastern Credit Unions, the Mississippi Credit Union Association, and the Idaho Credit Union League are sponsoring radio ads in key states.



    The ads seek to increase public support in key markets for legislation that would increase the MBL cap from 12.25% of assets to 27.5% of assets.

    Listeners are encouraged to call their senators and ask them to support Senate MBL cap increase legislation. A senate bill that would increase the MBL cap, injecting $13 billion in new funds into the economy and creating 140,000 new jobs, is expected to come up for a vote in the Senate once Congress returns from their spring district work period.

    Many of the ads use testimony from local business owners that have been denied by banks, but helped by credit unions.

    The ads are scheduled to run in Arizona, Virginia, Wisconsin, Iowa, Alabama, Nebraska, South Dakota, South Carolina, and Idaho radio markets, and are part of an array of in-district activity.

    CUNA has urged credit unions to use the current April District Work Break as an opportunity to meet with lawmakers in their home offices, attend town-hall type meetings, and use every opportunity to get across the credit union message that increasing the member business lending cap is good for small businesses and therefore good for the economy.

    News of the Competition

    MADISON, Wis. (4/9/12)

    NCUA OIG recommends asset management changes

    ALEXANDRIA, Va. (4/9/12)--A National Credit Union Administration (NCUA) Office of the Inspector General (OIG) review of the agency's Asset Management Assistance Center (AMAC) found "deficiencies over the valuation process of real estate owned (REO) by AMAC."

    The NCUA's AMAC conducts credit union liquidations and performs management and recovery of assets, and can, at times, assist NCUA regional offices with the review of large complex loan portfolios and actual or potential bond claims, the NCUA OIG said.

    Many of the properties cited in the report were owned by now-defunct credit unions Norlarco CU and Huron River Area CU.

    Norlarco, of Fort Collins, Colo., was placed into conservatorship by state regulators in May 2007, and the credit union was eventually purchased by nearby Public Service CU, Denver, Colo. Huron River Area CU, Ann Arbor, Mich., was taken under NCUA control in early 2007, and was liquidated later that year.

    Credit risk and strategic risk were major factors in the failures of both of these credit unions, and the NCUA OIG in an earlier report on both failures said the management of each credit union failed to adequately manage and monitor the credit risk within their loan programs.

    Both failures led to 850 properties that were owned by the credit unions being taken over by the NCUA, and 409 of those properties have been sold so far, the OIG report said. These NCUA-owned properties have sold for around 42.8% of their market value, on average, according to the report.

    The NCUA OIG report specifically noted that AMAC did not perform valuations on the properties in accordance with industry standards and did not always maintain proper support for the valuations that were completed.

    In the report, the OIG recommended that NCUA AMAC improve its review and documentation process for appraisals over $250,000, perform and document their analysis when determining whether to maintain properties versus selling them in a bulk sale, and improve its account reconciliation processes. Other recommendations were also made, and the AMAC agreed to follow the majority of the recommendations. The AMAC also noted that it has already acted to address some of the deficiencies identified in the OIG report.

    For the full OIG report, use the resource link.

    Market News

    MADISON, Wis. (4/9/12)

    Please delete this

     

    Consumer borrowing rose in February, declined at CUs

    WASHINGTON (4/9/12)--Consumers' borrowing increased $8.7 billion or 4.25%  during February to a total of $2.522 trillion, rising less than forecast because of a drop in consumers' credit card debt, reported the Federal Reserve's Consumer Credit report released Friday.

    Economists surveyed by Bloomberg.com (April 6) had forecast a $12 billion increase in borrowing  during the month.
     
    Credit union members borrowed  $224.6 billion in February, less than  the previous month's total of  $226.4 billion, but more than the $218.1 billion members borrowed during first quarter 2011, according to the report. 
     
    Consumers' overall revolving credit, which includes credit cards, totaled $794.8 billion in February. That marked a decrease of $2.2 billion or 3.25% from January, which had seen a $3 billion decrease that month, said the Fed.
     
    Revolving credit at credit unions totaled $36.7 billion, down from $37.3 billion in January but more than $35 billion in first quarter of 2011.
     
    U.S. non-revolving credit, which includes student loans, auto loans and mobile homes, increased by 7.75% in February, to more than $1,723 trillion, from January's total of more than $1,712 trillion.
     
    For credit unions, members who took out nonrevolving loans in February borrowed $187.9 billion, compared with $189.2 billion in January and $183.1 billion borrowed in first quarter of 2011.
     
    The Fed's report doesn't include statistics related to home mortgages or other real-estate secured loans.

    Texas, Fla., Ala. step up advocacy on MBLs

    DALLAS and TALLAHASSEE, Fla. (4/9/12)--Government efforts to pump money into small businesses have not come close to the level of lending that small businesses need, but credit unions are prepared to lend more than $800 million to small businesses in Texas, said the Texas Credit Union League.
     
    Several leagues have stepped up advocacy efforts to support the passage of a bill in the U.S. Senate (S.B. 2231 and S.B 509) that would give credit unions more ability to help the economy with small business loans.  "The increase in small business lending hinges on the passage" of the bill, which would raise the regulatory cap on credit union member business lending (MBLs) to 27.5% of assets from 12.25%.
     
    "Credit unions make a real difference for small businesses," said Texas league President/CEO Dick Ensweiler. "We have been here when Texans needed us, and we are prepared to do more," he said in urging senators to "vote for Texas jobs and vote for this bill."
     
    Florida and Alabama credit unions also have asked their senators to vote for the measure, said the League of Southeastern Credit Unions (LSCU).  It noted nearly 140 credit union officials from the two states participated in meetings with their legislators in Washington, D.C., in which they discussed increasing the MBL authority for credit unions, legislation to ensure more fairness in the exam process for credit unions, and legislation to allow credit unions to accept secondary capital.
     
    Since the meetings, seven members of the league's two delegations have signed as co-sponsors of one or more of the bills for which credit unions sought support. After follow up conversations with other congressional offices, the league said it expects to see more members of Congress join the efforts.
     
    The league  has a video message asking credit unions to contact their lawmakers. Jefferson CU, Birmingham, Ala., also produced an MBL video.  (To view them, use the links).
     
    The Credit Union National Association (CUNA) and credit unions are in the midst of a national effort to get the MBL legislation passed soon in Congress.  By increasing the MBL cap, credit unions can help the country inject $13 billion available for small business lending.  That, in turn, would create 140,000 new jobs at no cost to the taxpayer.  Legislation to increase the cap is active in both the U.S. Senate and the House, and a vote on S. 509 is expected to take place after Congress returns from its spring recess, said CUNA.
     

    Fed amends Regs D, J

    WASHINGTON (4/9/12)--The Federal Reserve has amended its Regulation D, which governs reserve requirements of depository institutions, in a bid to simplify those requirements and reduce costs.

    According to the Fed, the amendments simplify reserves administration by:

    The Fed said the amendments will be implemented in two waves.  The contractual clearing balance and direct compensation changes will take effect on July 12. The remaining amendments will take effect on Jan. 24, 2013.

    The Fed added that it would notify financial institutions by Nov. 14 if it decides to delay the Jan.24 effective date further.

    Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said CUNA supports the changes and the Fed's decision to use staggered effective dates.

    The Fed has also amended Regulation J (Collection of Checks and Other Items by Federal Reserve Banks and Funds Transfers through Fedwire) to eliminate references to "as-of adjustments."  These changes will take effect on July 12.

    For the full Fed release, use the resource link.

    CU System briefs

    iPads change America First's financial reports

    RIVERDALE, Utah (4/10/12)--America First CU has used Apple iPads to cut costs and offer a more visual depiction of the credit union's financial results.
     
    The $5 billion credit union began to replace laptops in November 2010 as a cost-cutting measure, according to a recent article in American Banker. At $499 to $699 each, iPads cost about 50% to 75% less than the notebooks America First had previously used, according to the article.
     
    At the same time, America First CU was trying to find a more timely and user-friendly way to reproduce the credit union's financial information. National Credit Union Administration was pressuring credit unions to translate numbers faster to prove they had adequate risk controls.
     
    "It was taking executives too long to make sense of the credit union's financial information," said the article, headlined "The Whole Bank on an iPad."
     
    Thayne Shaffer, America First's controller and vice president, was put in charge of organizing a team and maximizing the iPad's potential.
     
    Shaffer and his team sought a business intelligence app that transforms financial data into pictures with descriptive text and also display trends in a manner that could be easily understood by nonfinancial experts.
     
    After efforts to develop an application took too long, Shaffer found Roambi, a data visualization app for iPads, in Apple's app store.
     
    Roambi works with the credit union's main data engines for financial and historical analyses of budgets and forecasts and loan studies. Reports are used to monitor how economic indicators are affecting asset liability; monitor risks in loan distribution, concentration, delinquency and writeoffs; gauge revenue opportunities; and measure branch performance.
     
    Roambi serves 47 users at American First CU. Users access financial information, which is presented graphically, as soon as the data are compiled.
     
    To read the article, use the link.

    cbanc Network acquires Bankerstuff

    AUSTIN, Texas (4/10/12)--cbanc Network, a collaboration community of more than 9,300 credit union and bank users, has acquired Bankerstuff, a webinar company that produces online education for the financial industry.
     
    Bankerstuff's archived and ongoing inventory of online webinars is immediately available for purchase by cbanc's community of financial services professionals.
     
    Bankerstuff's customer base will receive an incentive for joining cbanc's collaboration community. Bankerstuff said it will deliver access to new resources to expand the scope of its webinars, and deliver key industry trends and content from inside cbanc.
     
    All webinars will be provided through the Bankerstuff website, beginning this month. The webinars will be visible in the Daily Digest, cbanc Network ads, and optional education e-mails. Eventually, a fully interactive webinar store will be available in cbanc.

    Inside Washington

    It's not too late to sign up for Youth Week

    MADISON, Wis. (4/10/12)--There's still time to register for the National Credit Union Youth Week and the National Youth Saving Challenge--two events sponsored by the Credit Union National Association (CUNA) in celebration of National Financial Literacy Month.
     
    Credit Union Youth Week is April 22-28. This year's theme is "Be a Credit Union Super Saver."
     
    Click for slide show For a look at the past 11 years of National Credit Union Youth Week Posters, click on the slide show.
    National Youth Saving Challenge is held during the entire month of April. Last year nearly 146,000 young members deposited $28.5 million into their saving accounts during National Youth Saving Week---with 9,058 new accounts.
     
    Events such as youth week and the savings challenge offer credit unions an opportunity to differentiate themselves within their communities, said JoAnne Sepich, CUNA's Youth Week coordinator. For that reason credit unions should spread the news that they are participating, she added.
     
    "Let people within your community know about it," Sepich said. "Tell your sponsor groups. Nothing endears you to people more than doing something for their children."
     
    Even credit unions without a budget can participate in Credit Union Youth Week. Sepich offers these tips:
    Here's how three credit unions around the country will celebrate Credit Union Youth Week:
    Amid all the games, events and activities, good financial management and savings, credit unions have one simple message that holds true for both children and adults: Take care of your needs before your wants.
     
    "That is very easy for children to understand, and it can be a life-changing message for entire families," Sepich said.

    NWCUA: CUs should track MBL stories online

    BEAVERTON, Ore. (4/10/12)--Credit unions are working to educate the media and public about their efforts to get Congress to raise the member business lending (MBL) cap. And some credit unions are succeeding. But what happens after their articles are published or aired?
     
    Once the first media hits are registered, credit unions should track those stories online and consistently post on the story's comment section, said David Bennett, Northwest Credit Union Association (NWCUA) director of public relations.
     
    Bennett called this "camping a site" to make sure accurate information and positive comments appear near the top of the comments section.
     
    "Sharing those stories on Facebook, Twitter, on credit union websites--even in branch lobbies--is another important aspect of moving this to social media and spreading the word," Bennett said.
     
    Every social media message on this topic should have an action item, said NWCUA Anthem April 5). In the case of MBL, the action item is asking consumers to call or write their legislators.
     
    Credit unions in the Northwest are among those selling positions on MBL in the local media. Mid-Oregon CU, Bend, Ore., was recently featured in the Central Oregonian touting the benefits of increasing the MBL cap for credit unions.
     
    On March 29, Mid-Oregon placed a story in the Bend Bulletin that said increasing the MBL cap to 27.5% of assets from 12.25% would add 2,700 more jobs in Oregon and 140,000 nationwide, according to the NWCUA.
     
    The Credit Union National Association (CUNA) and credit unions are in the midst of a national effort to get the MBL legislation passed through in Congress. By increasing the MBL cap, credit unions can help the country inject $13 billion available for small business lending.
     
    North Coast CU in Bellingham, Wash., is engaging members directly on its website with a pop-up box that asks members for their help. The box explains why their help is needed, and provides a link to contact their legislators. Developed as a reaction to help alert credit unions to phone scams, the pop-up box has become part of the credit union's repertoire of tactics when engaging members.
     
    Spokane-area credit unions held a conference call recently to unify their message. Working in solidarity, local leaders outlined a strategy that includes petitions and a letter drive.
     
    "It would be counter-productive for every credit union to work individually on this effort, because it will surprise journalists who think of us as competitors," Dan Hanson, Spokane Teachers CU senior writer and public relations expert, told NWCUA. "And because a good idea coming from any credit union should be shared with all the others."
     
    Many Northwest credit unions are also engaging editorial page editors and editorial boards to offer information about elected officials and their constituents.
     
    "Pitching to the editorial page comes with some risks, depending on what is being pitched and the general leanings of the outlet, but the rewards can be tremendous," said Bennett. "Because most (traditional newspapers) are pro-business, editorial board meetings can be effective as long as arguments are well prepared and practiced. Those being interviewed should also be ready to be filmed, as many newspapers use these to fill their social media requirements."
     
    Opinion editorials and letters to the editor come with far less risk, but carry less weight to readers, generally, because they are not third-party endorsements and present one side of an issue, Bennett said.

    CU System briefs

    Some CUs could be forced out of remittances: CUNA

    WASHINGTON (4/10/12)--Credit unions need meaningful relief from the Consumer Financial Protection Bureau's recently adopted final regulation on remittances, Credit Union National Assocation (CUNA) Deputy General Counsel Mary Mitchell Dunn wrote in a comment letter filed yesterday with the agency.

    The letter was filed in response to the agency's proposed rule designed to provide some limited relief regarding the regulation of remittances.

    A new remittance rule was adopted by the CFPB earlier this year and would require remittance transfer providers to disclose the exchange rate, all fees associated with a transfer, and the amount of money that will be received on the other end. Remittance transfer providers will also be required to investigate disputes and fix mistakes. The rule will become effective on Feb. 7, 2013.

    The remittances regulation will likely affect most U.S. credit unions that provide consumers with international electronic funds transfer services because it broadly defines the term "remittances" to include virtually all cross-border electronic funds transfers initiated by consumers in the U.S., other than most transfers involving credit, debit, and prepaid cards.

    Credit unions want to make sure their members are well informed about transactions at the credit unions, including remittances, the letter said. However, many credit unions rely on independent third parties to complete the transfers and do not have control over their activities, making it difficult to provide the disclosure information the CFPB requires, the letter pointed out.

    The CFPB has proposed a safe harbor that would exempt credit unions that provide 25 or fewer international consumer-initiated electronic funds transfers per year from all aspects of the rule. However, credit unions performing more than 25 of these transactions a year would be subject to the rule if they provide remittance transfers in the ordinary course of business" under a facts and circumstances test.

    The  proposed safe harbor threshold of 25 transfers annually is much too low to provide meaningful relief to credit unions, CUNA stated.

    Instead, CUNA urged the agency to provide much broader relief for credit unions under the agency's authority to grant exemptions, which it is authorized to do under the Dodd-Frank Act and the Electronic Fund Transfer Act, which includes the remittance provisions.

    Alternatively, CUNA recommended that the agency limit its reach to remittance providers that receive at least 30% of their net income income from remittance transfers. If the agency determines a numerical benchmark is the only approach it can support, then CUNA advocated raising the limit from 25 to 1,000.

    The proposed rule also applies to any consumer-initiated electronic transfer using open networks, such as international wire and international automated clearing house (ACH) transactions. International transactions using open networks typically involve three or more financial institutions and, once initiated, the transfer is usually beyond the sending-credit union's control, CUNA has noted.

    The open-network transfer rules could create high compliance costs for small credit unions, and force these credit unions with relatively small volume international payments programs to stop offering such programs since they will no longer be economically sustainable.

    Overall, CUNA in the comment letter said the CFPB's final remittance rule did not address credit union concerns, and added that some credit unions will be forced to stop offering remittances if they are required to comply with the disclosure requirements as stated in the final rule.

    "Credit unions provide these transfers to their members as one of many services they offer and are not in business solely to offer remittance transfers. They are not seeking to charge exorbitant fees or to prevent consumers from having reliable information about their transactions," Dunn said.

    CUNA also suggested the agency use its statutory discretion to extend the compliance date by an additional year, but also said the extended compliance date may not be needed if the CFPB made certain changes to the rule, as advocated for by CUNA in its comment letter.

    Those changes would include compliance relief for "open network" remittance transfers, preauthorized transfers, and other disclosure changes.

    NCUF/ICUF grant finances Iowa fin ed projects

    DES MOINES, Iowa (4/11/12)--Through grants from National Credit Union Foundation and the Iowa Credit Union Foundation (ICUF), 43 Iowa credit unions have received training and technical assistance to provide financial education to members living below the poverty level.
     
    Click to view larger image Pictured are Iowa Credit Union Foundation (ICUF) board members and credit union CEOs who received a 2011 financial education grant from ICUF through a Financial Education Grant from the National Credit Union Foundation. From left, Paul Lensmeyer, Ascentra CU, Bettendorf; Pat Drennen, 1st Gateway CU, Camanche; Debbie Whittie, Village CU, Des Moines; Becky DeVries, Midland CU, Urbandale; Dale Owen, ICUF president of the ICUF; Helen Pearce, ICUF vice president; and Marybeth Foster, ICUF executive director. (Photo provided by the National Credit Union Foundation)
    "Financial education is key to building the financial assets of low-income populations," said Marybeth Foster, ICUF executive director. "Our goal is to strengthen the capacity and build leadership in credit unions to deploy financial education."
     
    The financial education training was delivered by Adam Carroll, president/CEO of National Financial Educators.
     
    Highlights of financial education project included:
    The project is closely tied to the ICUF's Credit Union Family Partnership Individual Development Account program (CUFPP), which empowers building assets for individual development account (IDA) savers wanting to buy a first home, pursue education or a small business.
     
    The project's focus is on financial education to families at or below 300% of the federal poverty level, who typically qualify for the federally funded Children's Health Insurance program. ICUF chose this target market because these families can be served by CUFPP under legislation passed in Iowa. Families have a household net worth of less than $10,000 at the time of application to the IDA program.
     
    Financial education is a core component of the IDA program because savers must complete financial education to receive matching funds. Before the program began, participating credit unions did not have the resources to offer financial education programs.

    CUNA seeks comment on FinCEN due diligence plan

    WASHINGTON (4/10/12)--The Credit Union National Association (CUNA) is seeking credit union comment on how the Financial Crimes Enforcement Network's (FinCEN) proposed changes to consumer due diligence (CDD) rules would impact credit union operations and compliance procedures.

    FinCEN recently released an Advanced Notice of Proposed Rulemaking (ANPR) proposing to codify, clarify, consolidate, and strengthen current CDD rules.

    The proposed CDD rule would apply to financial institutions, brokers or dealers in securities, mutual funds, futures commission merchants, and introducing brokers in commodities. A key part of the FinCEN ANPR addresses standards for verifying the identity of each member/customer and understanding the "nature and purpose" of each account that is held at an institution to assess the likelihood of suspicious activity.

    Credit unions and other institutions would also need to establish and maintain policies for monitoring the accounts they hold under the proposal.

    Establishing a uniform CDD regulation would strengthen the ability of financial institutions to identify and report illicit financial transactions, help federal authorities as they investigate potential crimes, and promote greater global financial transparency and aid efforts to combat transnational illicit finance, FinCEN added.

    The new regulations, if created, would be one part of a broader U.S. Treasury strategy to enhance financial transparency in order to strengthen efforts to combat financial crime, including money laundering, terrorist financing, and tax evasion, FinCEN said.

    In the comment call, CUNA asks credit unions what compliance cost changes, if any, they would need to make if the CDD rule changes are approved. CUNA also asks whether the CDD rules, if approved, should be extended to also cover other institutions covered by FinCEN regulations, including prepaid card providers, money services businesses, non-bank mortgage lenders or originators, and certain other entities. FinCEN has also asked which entities should be exempted from the CDD changes, and how the changes, if adopted, could impact members and customers.

    CUNA is accepting credit union comment on the ANPR until April 20. FinCEN will accept public comment until May 4.

    For the full CUNA comment call, use the resource link.

    Filene report urges CU digital branding

    MADISON, Wis. (4/10/12)--Digital branding and social strategies are becoming the necessary norm for all businesses, including credit unions. But there is a danger that managers, while acknowledging this new norm, can get in trouble by not approaching it strategically, according to a recent report from the Filene Research Institute.
     
    Filene convened a panel of expert researchers and practitioners in November to discuss and show how credit unions should think about their own branding and digital presence as marketing moves to an increasingly electronic format. Filene wanted to know what tools are out there--and what's coming down the pike--along with what digital messages and channels resonate with today's consumers.
     
    It is not enough to turn traditional collateral and messaging into digital collateral and messaging, the report noted. Instead, credit unions need to capitalize on the deeper trend of social connections to make sure their marketing reaches the right audience in the first place and has its intended effect when it arrives. Mobile usage, more emphasis on design, and social marketing are trends that every credit union needs to consider, especially as it looks for new members, said Filene.
     
    The colloquium included a cross-section of social media practitioners and researchers and strategists from Google and Facebook. Each brought a different message, but the unspoken message was that digital marketing is becoming ever more important. Adopting it won't be enough; embracing it is the only acceptable route, said the report.
     
    Other credit union implications the colloquium noted:

    Senate bill would require pre-loan student counseling

    WASHINGTON (4/10/12)--Legislation that would require schools to counsel students before they take out private student loans, and would help students research their own federal student loan eligibility, has been introduced in the U.S. Senate.

    The bill, the Know Before You Owe Act of 2012 (S. 2280), is sponsored by Sens. Richard Durbin (D-Ill.) and Tom Harkin (D-Iowa).

    Under the legislation, higher education institutions would also require the prospective borrower's school to confirm the student's enrollment status, cost of attendance and estimated federal financial aid assistance before the private student loan is approved, according to a release on Durbin's website. The bill, the release said, would make lenders provide students with quarterly updates on the status of their loans, including details on accrued interest and capitalized interest. Lenders would also be required to inform the Consumer Financial Protection Bureau on their student lending activities.

    Information on federal financial aid availability and eligibility, and how taking out a private loan could impact their eligibility for federal loans, would also need to be disclosed ahead of time, the release said.

    Another piece of student loan legislation, the Fairness for Struggling Students Act (S. 1102), was introduced by Durbin last year and was discussed at a Senate Appropriations subcommittee on financial services and general government hearing last month.

    That bill would treat privately issued student loans the same as other privately issued debt in bankruptcy proceeding by restoring a pre-2005 provision in the bankruptcy code allowing for discharge of privately-issued student loans – like other forms of private debt, including credit cards--in bankruptcy.

    The Consumer Financial Protection Bureau (CFPB) is also working to address student loan issues, working with the U.S. Department of Education and launching the "Know Before You Owe" project to help borrowers, including student borrowers, understand debt implications.

    The agency has also asked credit unions and other financial institutions, students, the higher education community, and others in the student loan industry to provide information on the role of schools in the private student loan marketplace, student loan underwriting criteria, repayment terms and behavior, loan servicing and loan modification, and financial education and default avoidance.

    The full results of this study on the private student loan market will be released this summer. (See related March 28 News Now story: Hearing on student loans set for today)

    For prior News Now coverage and the Durbin release, use the resource links.

    N.J. CUs promote MBL benefits via ad

    HIGHTSTOWN, N.J. (4/10/12)--The New Jersey Credit Union League (NJCUL) is publicizing the promise of credit union member business lending legislation through an in-state radio ad and a postcard campaign ahead of a possible vote on a Senate MBL bill later this month.

    The NJCUL radio and internet advertisements encourage Sens. Frank Lautenberg (D) and Robert Menendez (D) to vote in favor of Sen. Mark Udall's Credit Union Small Business Jobs Act (S. 2231). The bill, which would increase the MBL cap from 12.25% of assets to 27.5% of assets, is expected to come up for a vote in the Senate after Congress returns from their spring district work period next week. A vote on similar U.S. House MBL legislation has been promised by sponsor Ed. Royce (R-Calif.)

    Both bills would inject $13 billion in new funds into the economy and create 140,000 new jobs, according to Credit Union National Association (CUNA) estimates.

    The ads also direct listeners to www.bankingyoucantrust.com, a NJCUL website that features information on the MBL legislation and information to help citizens contact their Senators. NJCUL has also sent more than 800 postcards to the two Senators as part of the MBL campaign, and created a website, is also asking credit union employees, volunteers and members to send their own cards in.

    "Our ads help communicate the necessity of support from Senators Lautenberg and Menendez and seek to inform New Jersey consumers of the true economic benefits of the Senate lifting the MBL cap. We hope that this is just the push the Senators need to vote yes when the bill comes before the Senate," NJCUL President/CEO Paul Gentile said.

    CUNA and state credit union leagues in Arizona, Virginia, Wisconsin, Mississippi, Iowa, Alabama, Nebraska, South Dakota, South Carolina, and Idaho have also released their own radio ads to let small business-owning listeners that have had trouble accessing loans know that "credit unions are ready to lend a hand," and will have more money to lend to them, once Congress moves to increase the credit union member business lending cap. The ads are part of heavy in-district activity, and CUNA has urged credit unions to use every opportunity during the current April District Work Break to speak up on behalf on an MBL cap lift. (See related April 9 News Now story: CUNA/league radio ads tout MBL aid for small biz)

    CDCU reps nominated for CFPB advisory panel

    WASHINGTON (4/10/12)--Three community development credit union (CDCU) representatives, heeding the encouragement of the National Federation of CDCUs, have nominated themselves for membership on the Consumer Financial Protection Bureau's (CFPB) new Consumer Advisory Board.
     
    The federation noted Monday that by the March 30 nominating deadline, the following three individuals were among the nominees for the advisory panel: The CFPB's consumer advisory board is expected to be comprised of 20 members with varied backgrounds and the panel is scheduled to meet at least twice a year here to discuss, advise and consult with the bureau of emerging consumer financial issues.
     
    Rafael Morales, public affairs and west coast program officer at the federation, said the above-named nominees are ones that notified the federation of their action, and others in the industry could also have been nominated.
     
    Morales said credit unions, both within the CDCU movement as well as the "broader credit union world," are well-suited for membership to the advisory board.
     
    "We don't know yet how many will be selected, but credit unions were created to maximize service to their members ahead of profits, and this consumer-oriented approach makes them ideal candidates to help guide this new agency," Morales added

    Catalyst Corporate membership tops 1,190

    PLANO, Texas (4/10/12)--Catalyst Corporate has reached more than 1,190 capitalizing member credit unions nationwide after launching with 890 members last September.
     
    Although membership rose steadily throughout the final months of 2011, the greatest influence on growth is transition of Western Bridge Corporate members, the corporate said.
     
    Two hundred eighty-five Western Bridge members pledged more than $46.5 million in capital to Catalyst Corporate, bringing total Perpetual Contributed Capital to more than $144 million.
     
    "We have exceeded our business plan target well in advance of the acquisition date and will continue to accept new member capital as long as credit unions want to join," said Kathy Garner, Catalyst Corporate president/CEO. Catalyst's upcoming acquisition of certain Western Bridge assets and is slated to occur on July 1.
     
    Catalyst continues to lay the groundwork for serving its coast-to-coast membership. In addition to its Plano, Texas, headquarters, Catalyst maintains branch offices in Georgia and Hawaii, and is working to secure space in Southern California.
     
    The corporate also has staff in California, Oregon, Washington, Oklahoma, Florida, Utah and Idaho. They also provide coverage for the neighboring states of Nevada, New Mexico, Arkansas and Louisiana.
     
    "Even though the majority of our business can be performed remotely, we believe that a local presence is important, especially in states where we have large concentrations of members," Garner said.
     
    In Georgia and Hawaii, Catalyst's employees share office space with local leagues. Last week, the space-sharing arrangement between Catalyst and the Texas Credit Union League was made public. Catalyst said it will see substantial savings in its operating costs while furthering the cooperative relationship with the league.

    "We all have the same stakeholders, and physical proximity can serve as a valuable reminder that collaboration can help us with future endeavors to serve those stakeholders," Garner said.
     
    Also, the board of directors is adding two new seats to accommodate representation from Western Bridge Corporate's membership. These directors will be selected for recommendation to the board by a Governance Advisory Council--also made up of Western Bridge members.
     
    Catalyst's Western Regional Council was established this week, shortly after the kick-off meetings of the Eastern and Central Regional Council meetings in late March.

    Market News

    MADISON, Wis. (4/10/12)

    More media report CUs' stand on MBLs

    MADISON, Wis. (4/10/12)--More small businesses are letting media know how credit unions have helped them through a tight credit market.
     
    Their support comes at a time when credit unions, leagues and the Credit Union National Association (CUNA) are pushing for Congress to raise credit unions' member business lending (MBL) cap to 27.5% of assets from 12.25% so credit unions can help more small businesses and the economy.
     
    In a letter to the editor of The Columbus Dispatch (April 7), Ohio Credit Union League President Paul Mercer  wrote that the Credit Union Small Business and Jobs Bill (Senate Bill 2231) would help generate up to $275 million in new credit available to Ohio small businesses and more than 3,000 new jobs.
     
    "Since the beginning of the economic decline, when many banks began limiting access to credit, Ohio credit unions saw demand soar, increasing outstanding business loans by 98.5% from December 2007 to December 2011," Mercer wrote.  During the past 12 months, loans to businesses by Ohio credit unions grew 24% to $430 million. Roughly 57% of small business owners who sought financing from banks were turned down, he wrote, citing statistics from Pepperdine University.
     
    Also during the weekend, small businesses in Iowa and North Carolina were speaking up on behalf of raising the MBL cap.
     
    In the Winston-Salem (N.C.) Journal (April 8),  Jim Dobbins, owner of a 23-year-old construction company, Sharp Interiors Inc., told of his quest for a six-figure loan.  A slowdown in demand and customer payments had left the company struggling in late 2010 and its existence--as well as 32 jobs--were in jeopardy.  The company was sick but knew that it could weather the storm with a loan, he told the Journal.
     
    Dobbins' request was turned down by seven large and community banks. Some banks said their hands were tied because of increased regulations after they had accepted Troubled Asset Relief Program money from the U.S. Treasury. Instead of lending to small businesses, they were bolstering their own capital levels, said the article.
     
    Other banks were unwilling to risk a loan for a small business without stellar credit, said Dobbins. He eventually got a loan from Allegacy FCU in Winston-Salem after three months of due diligence and uncertainty, said the article. "Allegacy stood up when no other financial institution would," Dobbins told the paper. "I had gotten to the point of literally having no other option available to me." 
     
    The loan enabled Sharp Interiors to not only survive but also more than double its work force in the past 18 months to 70 employees. It did $10 million in business last year, and expects a10% increase this year.
     
    Others who spoke up on behalf of credit unions:
    The Iowa Credit Union League also noted it is airing tv ads in support of raising the MBL lending cap.  Use the link to the ad on youtube.

    News of the Competition

    MADISON, Wis. (4/10/12)

    Arizona State CU helps underwater homeowners refinance

    PHOENIX (4/10/12)--Arizona State CU, based in Phoenix, has accepted 167 applications for the Home Affordable Refinance Program (HARP) to help underwater homeowners obtain more affordable mortgages in today's low-interest rate environment.
     
    Homeowners who are current on their Fannie Mae mortgage and have not been able to obtain traditional refinances because of the decline in their home's value, may be eligible for HARP.
     
    "If members can benefit from a lower mortgage payment, then we, as a local financial cooperative, need to meet this need," said David Doss, president/CEO of the $1.3 billion asset credit union.  "The opportunity to offer HARP is significant to the credit union as it can help Arizona residents rebound from economically challenging times," he said.
     
    HARP has been extended by the Federal Housing Finance Agency to help eligible homeowners refinance to take advantage of historically low interest rates, even if the outstanding balance of the mortgage is greater than the value of the home.

    Illinois REAL Solutions network has first meeting of 2012

    NAPERVILLE, Ill. (4/10/12)--Illinois REAL Solutions program partner credit unions attended their first in-person meeting of  2012 last week. They discussed attracting new members and eco-friendly loans, and compared popular prepaid cards.
     
    Jonthan Fuhrman, marketing consultant with CU Solutions Group, noted that Generation Y (ages 17-32) is a group most credit unions hope to attract as new members. The evolution of technology and this group's lack of experience in managing money makes reaching Gen Y an interesting challenge, he said. 
     
    He shared information on understanding Gen Yers, then reviewed marketing methods--traditional, online, social responsibility, mobile and referral--and explained how to maximize their effectiveness in reaching out to Gen Yers. Among the suggestions for marketing to this group:
    Abby Coroso of the Delta Institute discussed Eco-Friendly Loans and Energy Impact Illinois (EI2), a collaborative effort to help residents, businesses and non-profits reduce energy use. El2 is looking for credit unions to participate as lenders in its Residential Retrofit Loan Program. Homeowners use the loans to make home improvements that improve energy efficiency. Examples include upgrading boilers or furnaces, water heaters, programmable thermostats, central air conditioning and other qualified appliances or equipment. MembersAlliance CU, Rockford, and North Side Community FCU, Chicago, are involved in the program, which launched in November.
     
    Jim Byrnes, executive director, national accounts for the ICUL Service Corp. (LSC) compared the Suzy Orman-endorsed prepaid card for consumers with others in the market, including LSC's CU Money product.
     
    The second of the two in-person meetings for 2012 will be Oct. 16 in Naperville. The meetings are part of the REAL Solutions for Low Wealth Households program. The Illinois Credit Union League and ICU Foundation teamed with the National Credit Union Foundation in 2009 to offer the program. Currently 87 Illinois credit unions are participating. The program is operated by 35 leagues representing 37 states and includes more than 1,000 credit unions nationwide.

    Minnesota partnership highlights commitment to financial lit

    ST. PAUL, Minn. (4/11/12)--The Minnesota Credit Union Network's (MnCUN's) Network Service Corp. has partnered with Lutheran Social Services Financial Counseling Service (LSS) to help credit union members learn financial skills.
     
    Through the new relationship, Minnesota credit unions can offer members access to financial counseling.
     
    LSS financial counselors are certified in both credit and housing counseling and specialize in helping individuals avoid bankruptcy, foreclosure and debt settlement scams. Through LSS, credit unions can offer members education on how to develop money management skills, and guidance on reading a credit report, budget and debt counseling, debt management planning, and foreclosure prevention counseling.
     
    "The services offered through LSS help to further differentiate credit unions as the smarter financial alternative," said John Ferstl, MnCUN vice president, Network Service Corp. "LSS has combined social responsibility with the need to minimize losses in order to develop financial services that are mutually beneficial for both credit unions and members."

    CUNA sets Supervisory Committee & Internal Audit Conference

    MADISON, Wis. (4/11/12)--Registration and school information is now available for the 2012 CUNA Supervisory Committee & Internal Audit Conference, Dec.2-5 in Las Vegas, the Credit Union National Association (CUNA) announced.
     
    The CUNA Supervisory Committee & Internal Audit Conference provides supervisory committee members and internal auditors with information to keep pace with today's regulatory changes. Attendees will gain insight into the topics and issues specific to their supervisory and internal audit duties, and connect with supervisory committee peers from the credit union movement.
     
     "The CUNA Supervisory Committee & Internal Audit Conference places oversight issues at the top of its agenda and gives these topics the dedicated attention that they require," said Kevin Smith, CUNA director of volunteer education.
     
    The conference focuses on supervisory committee issues. "By pinpointing the typical concerns that committee members encounter, this school not only helps volunteers feel more secure in their role at their local credit union, it helps ensure that every credit union is protected by at least one expert overseer," Smith said.
     
    Supervisory committee members and internal auditors working toward their Certified Credit Union Volunteer (CCUV) designation can earn credits by attending the designated breakout sessions at the 2012 CUNA Supervisory Committee & Internal Audit Conference and successfully completing the optional exams.
     

    Inside Washington

    Minnesota CUs launch 'Bankziety' campaign

    ST. PAUL, Minn. (4/11/12)--The Minnesota Credit Union Network (MnCUN) has launched its "Bankziety" campaign, a response to consumer frustration with banks and a showcase for credit unions as an alternative.
     
    The campaign includes SeeYouLaterBank.com, a website offering events, contests and promotions to provide consumers with tools and resources that highlight the benefits of credit union membership. The site also features a credit union finder, information comparing banks and credit unions, and money management tips.
     
    "Our credit unions have been telling us that they're seeing more and more new customers coming through their doors because people are ready for something different," said Mark Cummins, MnCUN president/CEO. "Based on what we were hearing, the time is definitely right to capitalize on this 'bankziety,' a term we use to describe the anxiety and frustration consumers are feeling right now about banks."
     
    The "Bankziety" campaign also includes a Facebook contest asking Minnesotans to share their stories of banking anxiety, money stress or how credit unions have been the bankziety cure. Up to 12 entrants will win cash prizes and gift cards, with the top four entrants awarded $2,000 and a chance to tell their stories as part of a video series.
    Stories can be submitted through May 7 on the MnCUN Facebook page.
     

    Hyland: Fin Lit month good for aiding members, employees

    ALEXANDRIA, Va. (4/11/12)--As credit unions celebrate April's Financial Literacy Month, credit union leadership should ask what they can do to empower their employees and members financially, National Credit Union Administration (NCUA) Board Member Gigi Hyland said in this month's NCUA Report.

    Hyland said "the terminology of financial literacy is shifting to a more holistic and robust view of financial empowerment," a view that goes beyond simple financial literacy. "Financial empowerment is the process of increasing capacity of members to make financial choices and to transform those choices into desired financial goals.

    In her column, Hyland noted that credit unions, "because of their philosophy and structure, are uniquely poised to serve as financial empowerment agents."

    "How can you meet your members where they are in life to help them achieve their financial dreams? How can you offer an array of products and services that accomplish the dual goals of making good business sense and financially empowering your members," Hyland asked.

    The NCUA this month is using Twitter and other social media outlets to help increase financial literacy, and will focus its outreach on issues such as taxes, money management for youth, savings, investing, retirement, and homeownership. (See related April 3 News Now story: CFPB, NCUA promote financial literacy month.)

    The Credit Union National Association (CUNA) is also celebrating Financial Literacy Month by again sponsoring its annual National Youth Saving Challenge, and credit unions across the country are also encouraging their members to budget, save, manage credit, and pay down debt. (See related March 30 News Now story: April is National Financial Literacy Month.)

    For more of this month's NCUA Report, use the resource link.

    Call report site enhancements coming, NCUA says

    ALEXANDRIA, Va. (4/11/12)--An enhanced version of the National Credit Union Administration's (NCUA) Credit Union Online system will be unveiled in May, the NCUA said in the April edition of its NCUA Report.

    The Credit Union Online system allows credit unions to file 5300 call reports and to post profile information on their credit union, submit data to the agency, and receive key bits of information from the NCUA.

    The changes, according to the NCUA, will include an enhanced user interface, the ability to convert call report and profile information into .pdf files, and other basic interface changes that will help users make their call report calculations and avoid leaving information out of their profiles.

    The agency said it would provide more information on these and other changes to the system in an upcoming webinar. The webinar has not been scheduled at this time.

    For the full NCUA report, use the resource link.

    Kiplinger slideshow features, '7 CUs anyone can join'

    MADISON, Wis. (4/11/12)--An online slideshow on kiplinger.com features "7 Credit Unions Anyone Can Join," and directs consumers to a link for asmarterchoice.org, the online credit union locator tool.
     
    The tool, asmarterchoice.org, also compares average rates and fees at credit unions vs. banks, highlights the latest "good news" on credit unions appearing in the media, and presents real-life comments submitted by people who belong to credit unions. It is presented by the Credit Union National Association and the leagues.
     
    "[Credit unions] tend to charge lower loan rates, pay higher savings yields and 'treat borrowers who are struggling more sympathetically,'" said Stephen Brobeck, executive director of the Consumer Federation of America, in the kiplinger.com article.
     
    The seven credit unions included in the slideshow are:
     To view the slideshow, use the link.

    Guatemalan CU professionals intern in California, Iowa

    MADISON, Wis. (4/11/12)--Ten Guatemalan credit union professionals arrived in the U.S. last week to begin the first phase of a month-long internship program with credit unions in California and Iowa. The interns, all under the age of 40, are the first cohort of World Council of Credit Unions' (WOCCU) new International Credit Union Leadership Program.

    Victor Manuel Garcia Salazar (right), a Guatemalan intern with Des Moines (Iowa) Metro CU, shakes hands with Iowa Democratic state Rep. Bob Kressig during a visit to Iowa's capitol while Linda Gibbs, business development specialist for Greater Iowa CU in Ames, looks on.
    The program, funded by a grant from the U.S. Department of State, Bureau of Educational and Cultural Affairs, Office of Citizen Exchanges, is part of the State Department's larger Professional Fellows Program.

    With assistance from the California and Nevada Credit Unions Leagues, six interns were placed in credit unions in the Los Angeles and San Francisco metro areas. The Iowa Credit Union League has helped place the remaining four interns at credit unions in Des Moines and Ames.

    During the program's second cohort, 10 young professionals from the U.S. will intern in Guatemalan credit unions to further broaden international relations and establish higher levels of credit union professionalism worldwide, according to Brian Branch, WOCCU president/CEO.

    "The goal of the Professional Fellows Program is to increase networking among young professionals and foster higher performance levels," Branch said. "For participants in the International Credit Union Leadership Program, this will translate into a stronger global credit union network and better member service delivered by credit unions in participating countries."

    Interns traveling to California will focus on gaining skills in credit union management including greater marketing awareness, training in financial disciplines and techniques for new product and service delivery methodologies, while improving their English.

    Guatemalan intern Roberto Monge (right), human resources director at the Guatemalan credit union trade association (right), learns new strategies from Fernando Arias of Patelco CU in Pleasanton, Calif. (Photos provided by World Council of Credit Unions)
    Although the program is not part of the WOCCU International Partnerships Program, the California and Nevada leagues view the internships as a natural extension of their existing relationship with credit union trade association Cooperativas Federeadas de Ahorro y Crédito de Guatemala, their Guatemala partner organization, according to Diana Dykstra, the leagues' president.

    "This is another great example of our partnership with Guatemala--to share expertise and experiences, and improve the credit union movements in both countries," Dykstra said.

    Interns in Iowa will gain expertise in many of the same areas, and will seek potential solutions to operational challenges they're facing at their credit unions back home. Also, the exchange program allows host credit unions to gain a greater perspective on Hispanic culture and business practices that may have practical applications in helping the credit unions better serve their own Hispanic populations, according to Patrick S. Jury, president/CEO of the Iowa league.

    "Our credit unions will provide a unique perspective and training environment for our guests looking to take home new experiences," Jury said.

    At the conclusion of their fellowships, all participants will travel to Washington, D.C., where they will take part in the Professional Fellows Congress, May 3-5. The congress marks the culmination of the U.S. exchange experience, providing a forum for participants to discuss best practices, meet other young leaders within their profession, and develop concrete projects and networks they can implement upon their return home.

    In October, WOCCU's International Credit Union Leadership Program will pair interns from the Dominican Republic with credit unions in Wisconsin and North Carolina. The Wisconsin Credit Union League also is paired with the Asociacion de Instituciones Rurales de Ahorro y Creditor Inc., the Dominican Republic's credit union trade association, as part of the program. In January 2013, the next group of U.S. program participants will intern with credit unions in the Dominican Republic.

    WOCCU's International Credit Union Leadership Program, which promotes internships for young credit union people from various countries, is designed to facilitate idea exchanges, promote foreign language skill development, enhance cultural diversity and improve problem-solving skills as they relate to credit union development and management on a global basis.

    The program's second cohort, which will involve choosing 10 Spanish-speaking U.S. applicants to intern in Guatemala credit unions, begins in June. The deadline for applications is April 20.

    For more information, use the links.

    NCUA's Myers outlines CU benefits in MarketWatch

    WASHINGTON (4/11/12)--Bill Myers, director of the National Credit Union Administration's (NCUA) Office of Small Credit Union Initiatives, discussed credit unions' benefits to consumers, and more complex issues facing small credit unions in a recent MarketWatch interview.

    In a question-and-answer format, Myers said "the cool thing about most credit unions" is their service to small communities, including churches and employees of certain businesses that need tailored financial service offerings. "Depending on what little niche you fit into, there's a credit union for you," he said.

    The NCUA official highlighted the fact that credit unions serve individual communities, and as such, "did not get caught up in some of the complex financial practices of the recent bank bust."

    Most credit unions don't have the complex financial products a bank has to offer; that is a strength in terms of safety, even if they don't earn as much income as a result, he said.

    When asked if lower income levels were a concern, Myers responded, "Well, first, credit unions are member-owned, and don't have to produce profits or please anxious shareholders. But second, and more to the point, not having complex products does hurt the funding, and also causes some customers to drift away. 

    "It's especially hard on small credit unions, which are closing or merging at a significant pace: in 1979 there were 22,000, and now there are 7,100 credit unions in the U.S."

    However, Myers also noted during the interview that many credit unions are finding their membership increasing as new members that do not trust big banks move to the safety of credit unions.

    Georgians will hit the road, but monitor vacation budgets

    DULUTH, Ga. (4/11/12)--Georgians will hit the road this summer, after years of economizing and staying close to home with "staycations," according to a survey by the Georgia Credit Union Affiliates (GCUA). Although higher gas prices aren't likely to be an impediment, the added cost may cause some people to alter the lengths of their vacations or find cheaper alternatives. That mirrors national trends, said GCUA.
     
    Sixty-three percent of respondents to the GCUA Consumer Survey said they plan to spend more or the same on travel in 2012 than they did last year. That's up from 49% who said the same thing in 2010 (GCUA's Consider This April 3).

    Traveling on a budget remains a priority. The GCUA survey found that 31.7% of respondents worked harder to find deals and save on travel in 2011 than they did in previous years.

    With many travel bargains and regional destinations to choose from, people can still find the money-- and the time--to take trips this year, GCUA said.
     
    On a national level, travel experts expect people to change the type or length of their travel rather than opt to cut out travel entirely, according to a CBS.com report in March. Many travelers have found that remaining flexible with timing and destination can help. Travelers can search for discounts on several destinations and choose the one with the best deals, GCUA said.
     
    Regional destinations are expected to be popular this year, reducing the fuel costs associated with vacations. Thetravelguide.com suggests vacationers book their vacations in bundles instead of booking airfare, hotel and attractions separately. The site also recommends asking lots of questions when making plans. Sometimes booking for a particular day of the week can result in savings.
     
    During the past few years, family camping trips have seen a resurgence, especially in national parks and forests, with that trend seeming to continue into 2012 (prweb.com April 3). 
     
    Many national parks are seeing a consistent rise in the number of visitors, which makes it harder to find campsites in a park's campgrounds and to enjoy solitude and the appeal of the outdoors. Once in the park, visitors likely will find attractions crowded, roads congested and campgrounds full, prweb.com said.   
     
    Camping in a national forest is a good alternative because there are 175 national forests located in 43 states--many within a day's drive from most big metropolitan areas, and many surrounding a national park, prweb.com added.
     
    Many of her members are still approaching vacations cautiously, Tina Burkhalter, president of Nashville (Ga.) CU, told GCUA. "I believe rising gas prices will certainly affect our members' decisions on where to go and how far to travel," she said.
     
    To save money, she suggests that people consider taking shorter vacations. A shorter trip costs less, but still provides the chance to relax and get away. "Most of our members rely on loan proceeds to fund their vacations," Burkhalter said.
     
    A better option is for people to prepare in advance for their vacations by saving a little at a time throughout the year in a vacation club savings account, and funding it through payroll deduction, she added. With a small amount saved each week, people can give themselves the freedom to take the trip they want, Burkhalter concluded.

    Diversification aids CUNA Mutual's bottom line

    MADISON, Wis. (4/12/12)--CUNA Mutual Group posted stronger-than-expected results in 2011, positioning itself to withstand continuing economic pressures in 2012. The company said its bottom line was bolstered by the performance of its credit union businesses and diversification.
     
    Cuna Mutual Group said its 2011 bottom line was bolstered by the performance of its credit union businesses and diversification.
    The company's diversification strategy has begun to pay dividends. In 2010, when its credit union business didn't perform as well, ProAg, CUNA Mutual Group's crop insurance affiliate, helped improve the company's financial results. In 2011, when natural disasters stymied crop insurance results, CUNA Mutual Group's credit union businesses withstood the year's economic challenges.
     
    "Our credit union and Wealth Accumulation businesses performed well in 2011, which offset the large amount we paid out in crop claims due to natural disasters," said Jeff Post, CUNA Mutual president/CEO. "We enter 2012 confidently, focusing on a three-pronged approach to growing our business--continuing expansion in the credit union market, crop insurance and through acquisitions via our recent mutual holding company restructuring."
     
    Total operating revenue grew 5.4% to $2.5 billion from $2.4 billion in 2010, with more than half of that growth coming from crop insurance. Credit union consumer products--Auto & Home and Life & Health--and Wealth Accumulation offset lending-related revenue due to poor economic conditions.
     
    Net income was slightly up--at $88 million from $87 million in 2010--due to strong operating performance and lower investment impairments.
     
    Assets increased to $16.5 billion from $15.4 billion in 2010.
     
    To see the CUNA Mutual annual report, use the link.

    CFPB begins mortgage rule discussions

    WASHINGTON (4/11/12)--The Consumer Financial Protection Bureau (CFPB) this week said it is considering a series of new mortgage rules that aim to increase transparency and accountability in the market.

    "The mortgage servicing rules we are considering reflect two basic, common-sense principles – no surprises and no runarounds," CFPB Director Richard Cordray said. "For too long, mortgage servicers have not been held accountable to their customers, and the result has been profoundly punishing to homeowners in distress. It's time to put the 'service' back in mortgage servicing," he added.

    The CFPB said it would release an advanced notice of proposed rulemaking this summer, and release the rules for public comment before finalizing them in January of 2013. The agency said it could provide an implementation period of up to one year, but has not decided how long of a transition period is necessary yet.

    According to the CFPB, some of the rules under consideration would require:
    Lenders could also be required to provide greater information on help that is available to homeowners facing foreclosure.

    Some of the rules would also address force-placed insurance, which can be purchased by mortgage servicers when mortgage borrowers do not maintain hazard insurance on their properties. Force-placed insurance can often be far more expensive than privately purchased insurance. Under one of the proposals, alternatives to force-placed insurance could be offered to consumers, and warnings and disclosures would need to be provided before force-placed insurance is purchased.

    Other proposed rules could require servicers to post mortgage payments promptly after they have been received, to increase mortgageholder ease of access to their own account information, and to quickly correct account errors.

    The agency said it may also work with other regulators to collaboratively address mortgage servicing issues. The CFPB said it would meet with a Small Business Review Panel to discuss the proposal and "will also be conducting other outreach to gather feedback from consumer groups, industry, and other agencies."

    The CFPB also continues to work on revised mortgage applications and mortgage loan closing documents, and proposed forms of these disclosures are scheduled to be released in July.

    For more on the CFPB's potential mortgage servicing rules, use the resource link.

    California DFI: State CU assets up 1.7%

    SACRAMENTO, Calif. (4/11/12)--California state-chartered credit unions assets went up 1.7% to $73.1 billion in the fourth quarter 2011 from $71.9 billion a year earlier, according to the California Department of Financial Institutions (DFI).
     
    Shares at $62.9 billion rose 2.5% from $61.4 billion during the same period. Loans declined 4.8%, going to $40.5 billion from $42.5 billion.
     
    State-chartered credit unions net worth was up 7.3%, hitting $7.3 billion from $6.8 billion a year earlier. That caused the net worth to asset ratio to increase to 9.95% from 9.43% a year ago, said DFI.
     
    The fourth-quarter loan loss allowance totaled $1.1 billion, a 13.5% decline from $1.3 billion one year prior, while delinquent loans at $920.7 million dropped 15.3% from $1.1 billion at year-end 2010. Delinquent loans as a percentage of total loans were 2.27%, down from 2.55% a year earlier. Other real estate owned increased 14.7% to $152.3 million from $132.8 million the previous year.
     
    Net margin to average assets was at 4.18% down from 4.38%, while the provision for loan losses decreased 45.2% to $419.6 million from $765 million.
     
    Fourth-quarter net income rose 52.2% to $510.6 million from $335.4 million at year-end 2010.
     
    The number of credit unions declined 2.5% to 158 from 162.

    CUs announce trio of mergers in Calif., Conn.

    SAN JOSE, Calif. and SHELTON, Conn. (4/11/12)--Three credit union mergers have been announced, two in California and one in Connecticut.
     
    San Jose, Calif.-based Pacific Postal CU, with $188 million in assets, announced Monday it will absorb East Bay Postal CU, an $8.2 million asset credit union based in Oakland, Calif. (Silicon Valley/San Jose Business Journal Online April 9).
     
    Pacific Postal has four branches and 14,600 members. East Bay has one branch and 1,700 members. The merger could be completed by July 1, East Bay CEO Cynthia La Croix told the publication. 
     
    El Camino Hospital FCU, an $8.3 million asset credit union based in Mountain View, Calif., has been approved to merge into Provident, CU, a $1.52 billion asset credit union, based in Redwood City, Calif., according to the California Department of Financial Institutions.   
     
    Mutual Security CU, a $235 million asset credit union in Shelton, Conn., plans to absorb $3.1 million asset, Bridgeport, Conn.-based Connecticut Energy Employees CU--formerly SoConn Gas Employees CU (CEECU) Inc.
     
    CEECU employees are slated to vote on the merger April 23. CEECU has 600 members. Mutual Security CU has 34,405 members.
     

    Market News

    MADISON, Wis. (4/11/12)

    News of the Competition

    MADISON, Wis. (4/11/12)

    Wachovia court filing claims MBS risks were clear

    KANSAS CITY, Kan. (4/11/12)--Wachovia Capital Markets filed a motion Friday in a federal court in Kansas to dismiss the National Credit Union Administration's (NCUA)  lawsuit to recoup losses from residential mortgage backed securities (RMBS) that corporate credit unions bought from Wachovia before the financial crisis.
     
    In its motion to dismiss, filed in the U.S. District Court for the District of Kansas, Kansas City,  Wachovia argued that the MBS bought by U.S. Central FCU and Western Corporate FCU before they were placed into conservatorship by NCUA fell into a category known as "Alt-A" or mortgages that are neither "prime" nor "subprime" and that  its prospectuses for the investments outlined clearly the risks involved.
     
    In its motion, Wachovia says that "approximately 73% of the loans were reduced documentation or no documentation loans, i.e., loans for which the borrower was not required to submit proof of his or her income, assets, or both."
     
    Wachovia issued, underwrote and sold the funds, which were originated by four lenders: National City Mortgage, Accredited Home Lenders Inc., Wachovia Mortgage Corp., and American Mortgage Network.
     
    NCUA's original complaint against Wachovia alleged that originators of the RMBS had systematically abandoned the stated underwriting guidelines and resulted in riskier RMBS that the corporates would not have bought, had they known.  Wachovia representatives sold about $100 million in RMBS to the corporates in 2006. U.S. Central purchased about $80 million in RMBS underwritten by Wachovia, according to the complaint NCUA filed Nov. 28 (News Now April 3).
     
    Wachovia's motion included "the extensive risk disclosures" in the prospectuses for two offerings, the Wachovia Mortgage Loan Trust and the NovaStar Mortgage Funding Trust. They included:
    Wachovia also said the complaint lacked any allegations specific to the originators of the mortgage loans underlying the offerings and said that "generic allegations" are not enough for a claim.
     
    The crux of Wachovia's motion to dismiss focused on NCUA's meeting requirements for statute of repose and statute of limitation deadlines for filing the lawsuit and whether an extender statute applies to the case. Wachovia noted that the three-year statute of repose extinguishes NCUA's federal claims and that the extender statute, which would grant an extension to the deadline for filing in some cases, does not apply.
     
    Those arguments followed a tentative ruling set in a U.S. District Court in California on a similar RMBS case, NCUA vs. RBS Securities, and said a case cited by NCUA, American Pipe Tolling, does not apply.
     
    News Now contacted NCUA for a comment. NCUA's policy is to not comment on pending litigation. 

    Alloya, Central Corporate signal intent to merge

    WARRENVILLE, Ill. And SOUTHFIELD, Mich. (4/11/12)--The boards of Alloya Corporate FCU and Central Corporate CU have signed a non-binding letter of intent to merge the two corporates.
     
    In an announcement Tuesday, the Warrenville, Ill.-based Alloya and the Southfield, Mich.-based CenCorp said the action allows for ongoing discussions, due diligence and joint planning.  The new organization would serve nearly 20% of the nation's credit unions, primarily in a 10-state region spanning from the Midwest to the East Coast.
     
    The combined corporate would continue under Alloya's federal charter and operate under the Alloya name.  CenCorp's current CEO, Bill Walby, would become CEO of Alloya with the headquarters located in Warrenville.  Board and committee representation would reflect the combined membership.
     
    Given the geographic distribution of the combined memberships, the boards envision significant operations to remain in Alloya's current locations in Warrenville and Albany, N.Y., as well as CenCorp's Southfield, Mich. location.
     
    "While very successful in its own right, the current and future operating environment  for corporates has prompted CenCorp to consider alternatives, including merger, that would enhance member value and better serve its members," said Walby.  "A merger with Alloya would create enhanced value for both memberships in the form of significantly increased scale, additional revenue growth, reduced operating costs, and additional financial strength," he added.
     
    "With the enactment of the amended corporate regulations in 2011, corporates have needed to orient their business plans to a new paradigm," said Chuck Furbee, Alloya's CEO. "This merger would result in a corporate credit union with core markets in 10 states. With a strong reputation for service through a local presence in the regions served, the combined corporate will be staffed by an experienced team that is dedicated to serving the needs of the membership first and foremost," Furbee said.
     
    Credit Union Association of New York President/CEO William J. Mellin said the association supports the planned merger, noting that the "unification of these two corporate credit unions is in the best interest of our credit unions here in New York and beyond. It will provide long-term strength and viability, not to mention long-term value and a continued service presence in New York."
     
    The merger also "will help ensure the health and well-being of the credit union movement, as it provides a stronger credit union-owned solution to service credit unions--one that will bring more efficiencies and lower costs to natural person credit unions."   The partnership would  put into practice the cooperation advocated by not-for-profit financial cooperatives, Mellin added.

    After due diligence is completed, the next step would be to execute a definitive merger agreement by both corporates.  The merger would be subject to approval of members of CenCorp and regulators.

    CUNA Mutual: Data breach ups exposure to phishing

    MADISON, Wis. (4/11/12)--CUNA Mutual Group is advising credit unions to warn their members about the potential for increased phishing attacks on the heels of a recent data breach at Atlanta-based Global Payments Inc.
     
    In a risk alert to its credit union policyowners , CUNA Mutual also said the attacks could target members who were not impacted by the data breach.  The company also has posted a video update to Google+ and YouTube featuring  Risk Manager Ann Davidson discussing the alert. (To access the video, use the link.)
     
    Global Payments "contained" the breach to less than 1.5 million debit and credit cards, Global said in a press release on April 1. Track 2 data may have been stolen, the company said. Track 1 and Track 2 data include names, card numbers and validation codes. Cardholder names, addresses and Social Security numbers were not obtained by cyber criminals who hacked part of its system. The hacking called Visa to drop the company from its "compliant service providers" list (News Now April 3).
     
    Credit unions should alert members to be aware--especially in the next several days or weeks--of any suspicious e-mails, text messages or phone calls requesting any personal or financial information, especially card data, said CUNA Mutual's risk alert, the second issued since the Global Payments breach.
     
    Card information that may be requested includes cardholder billing address, three digit CVV2/CVC2 code found on the back of the card, or enrollment criteria/passwords for Verified by Visa or MasterCard SecureCode.  "This card information was not part of the recent Global Payments breach. Criminals may ask members for this information to add to the other card data they may have obtained from the breach to perform card present (key entered) or card not-present (mail/telephone/internet) non-magnetic stripe transactions," the alert said.
     
    Continue to advise members to never respond to e-mails, text messages or phone calls requesting this type of information.  If members receive suspicious requests advise them to contact the credit union, said CUNA Mutual.
     
    CUNA Mutual offered these risk mitigation tips:
    If a member has responded to a phishing scam with the requested information, take these steps:
    CUNA Mutual will continue to monitor the Global Payments breach and notify its policyholders when new information becomes available.

    Ruiz gets two years in prison for fraud at AEA FCU

    PHOENIX, Ariz. (4/11/12)--A Yuma, Ariz., businessman was sentenced to 24 months in prison and three years' supervision for one count each of conspiracy and transactional money laundering for his role in a $50 million fraudulent business loan scheme that helped put Yuma-based AEA FCU into conservatorship.
     
    Frank Ruiz, 62, who had pleaded guilty in June to the charges allegedly received $4.75 million in fraudulent business loans from William Liddle, AEA's former vice president of lending. Ruiz initially faced 68 felony counts but the charges were reduced in a plea bargain and because he gave "substantial" assistance in the case against Liddle (KYMA.com and Loansafe.org April 10 and LSWT.com April 9).
     
    In February Liddle was found guilty of 54 counts of conspiracy, fraud and transactional money laundering. His wife, Rhonda Liddle, was found guilty on 36 counts. Their sentencing is set for May 21.
     
    AEA FCU, with $229 million in assets, was placed into conservatorship by the National Credit Union Administration (NCUA) in December 2010. In August, NCUA said the credit union's financial situation was improving.

    CU System brief

    The Small Business Authority offers mobile payment product

    NEW YORK (4/12/12)--Newtek Business Services Inc., The Small Business Authority, has introduced NewtPay Mobile, a product that allows consumers to use their smartphones or tablets as mobile credit card terminals. 
     
    Newtek Business Services Inc., The Small Business Authority is a CUNA Strategic Services provider.
     
    NewtPay Mobile includes a free card reader with no setup, cancellation or monthly processing fees. It is pay as you go processing with rates starting at 1.69%. 
     
    The product works with Apple iOS, Blackberry and Android devices.

    Interra, member turn 80 together

    GOSHEN, Ind. (4/12/12)--Interra CU, Goshen. Ind., celebrates its 80th anniversary in 2012. One Interra CU member can say she's been with the credit union for every one of its--and her--80 years.
     
    Interra CU will celebrate its 80th anniversary this year. Harriet Bainter, who will celebrate her 80th birthday this year, has been a member of the credit union since its inception. Pictured are Jack Sheets, Interra CU president, and Bainter at the credit union's 75th anniversary in 2007. (Photo provided by Interra CU)
    Harriet Bainter was born in 1932, the same year six men and one woman deposited $19.50 to charter Elkhart County Farm Bureau CU. Bainter's uncle, Burnette Burkey, was one of the founding members.
     
    As a gift to his niece, Berkey opened a savings account for her. The board report of March 1932 shows that her account had a balance of 75 cents.
     
    In 1970, Bainter became the credit union's third full-time employee, and worked in that capacity until 1985. After that she spent her winter months in Arizona, and worked at the credit union part time. She retired in 1995.
     
    Jack Sheets began working at the credit union in 1976 and has served as its president since 1987. When Sheets was a young member, Bainter helped him obtain a motorcycle loan.
     
    Elkhart County Farm Bureau CU, changed its name to Interra CU in 2008. It now has $577 million in assets.
     
    Bainter recalls that her two favorite departments to work in were member services and lending.
     
    "That's where I got to know people and help them," she said. "Some are friends to this day."

    DigitalMailer launches MyVirtual StrongBox

    HERNDON, Va. (4/12/12)--DigitalMailer Inc. has introduced software that allows members and customers to securely upload important documents such as wills and insurance documents to their financial institutions' online document library.
     
    My Virtual StrongBox allows members to load documents into their financial advisors' protected document library using the same secure document technology financial institutions now use to deliver online statements, notices and tax documents.
     
    The software  is similar to physical safe deposit boxes in bank and credit union vaults, but with online capabilities that include easy and accessible permission-based retrieval, said DigitalMailier. The product is equipped with initial strongbox storage sizes designed for individual and small businesses, but members and customers can purchase additional space.
     
    Users can customize folders to aggregate documents and share them as necessary. For example, a member can retrieve a copy of a will via a smartphone while sitting at an attorney's office.
     
    Northwest FCU, Herndon, Va., is the first financial institution to offer My Virtual StrongBox to its members, said DigitalMailer. The 110,000-member credit union has contracted for the service and has set up virtual strongboxes for all of its 68,000 electronic statement users.

    Inside Washington

    SECU ATMs save $8M+ for unemployed, child support recipients

    RALEIGH, N.C. (4/12/12)--With nearly 1,100 no-surcharge ATMs located throughout North Carolina, State Employees' CU's CashPoints ATM network is saving the state's unemployment and child support beneficiaries more than $8.4 million in ATM transaction fees annually, with nearly three million transactions each year.
     
    As North Carolina's unemployment rate continues to hover around 10%, recipients of unemployment benefits rank top among non-member use of CashPoints services. In the past year these recipients, who receive their claims payments via an Employment Security Commission debit card, performed more than 1.8 million transactions at SECU machines. The no-surcharge SECU CashPoints network saved this user group more than $5.4 million.
     
    Also, child support recipients performed more than one million transactions on the CashPoints network during 2011. And military personnel performed nearly one million additional transactions at CashPoints machines in the past year.
     
    SECU in 2010 signed bi-lateral agreements with four military-based credit unions. Under this agreement, SECU military members also have no-surcharge access at ATMs owned by several defenses credit unions in the state, providing a worldwide benefit for these members.
     
    "A goal of our not-for-profit cooperative is to help keep money in the pockets of members, while also providing an overall economic benefit to all citizens of our state," said Leanne Phelps, SECU senior vice president of card services. "A no-surcharge benefit of $8.4 million to these groups in great need of support is doing just that."
     
    Based in Raleigh, N.C., SECU has more than $23 billion in assets.

    WOCCU welcomes new members from Colombia, Moldova

    MADISON, Wis. (4/12/12)--World Council of Credit Unions (WOCCU) last week welcomed Colombia and Moldova as new members.
     
    Click to view larger image The World Council of Credit Unions (WOCCU) last week welcomed Colombia and Moldova as new members. WOCCU Chair Manuel Rabines, CEO of the National Federation of Credit Unions of Peru, left, welcomes Cooperativa Médica del Valle and Jose Luis Blanco Saenz, its corporate manager for strategic planning and marketing, as a WOCCU associate member.
    The WOCCU board approved Cooperativa Médica del Valle (COOMEVA), a cooperative financial holding company from Colombia, as an associate member.
     
    The board also approved Central Association of Savings and Credit Associations (CASCA), Moldova's credit union trade association, as a direct member.
     
    Applications from both organizations were approved during WOCCU's first-quarter 2012 board meeting in New York.
     
    "The global credit union movement continues to grow thanks to the good work of organizations like COOMEVA and CASCA," said Brian Branch, WOCCU president/CEO.
     
    COOMEVA, based in Cali, Colombia, provides health services, mutual insurance, investment, savings and lending services to 250,000 members. COOMEVA heads a group of 16 companies with $2.8 billion assets. The organization is one of a growing number of World Council associate members.
     
    Click to view larger image Ion Gangura, standing, chairman of Central Association of Savings and Credit Associations, Moldova's credit union trade association, moves to apply for World Council of Credit Unions membership at the organization's annual general meeting as Efim Lupanciuc, CASCAs chief executive officer (far right), looks on. (Photos provided by World Council of Credit Unions)
    CASCA was formed in 2009 by Moldova's 49 largest credit unions. Its affiliates control 42%, or $12.7 million, of Moldova's credit union assets and account for 32%, or 40,735, of the country's credit union members. CASCA, provides representation, training and liquidity management services for its members.
     
    "We see the continued growth of our organization as a sign of confidence not only in the work we do, but also in the global credit union movement," said WOCCU Chair Manuel Rabines, CEO of the National Federation of Credit Unions of Peru. "Such support signals a brighter future for us all."
     
    Representatives from CASCA and COOMEVA will be formally recognized at the WOCCU 2012 annual general meeting, which will be held in conjunction with the organization's World Credit Union Conference, July 15-18 in Gdańsk, Poland.

    News of the Competition

    MADISON, Wis. (4/12/12)

    Market News

    MADISON, Wis. (4/12/12)

    Kids fin lit site launched by NCUA

    ALEXANDRIA, Va. (4/12/12)--Pocket Cents, a new website that introduces young people to the benefits of credit unions and the importance of setting financial goals, was unveiled by the National Credit Union Administration (NCUA) on Wednesday.

    During the unveiling,  NCUA Chairman Debbie Matz noted the agency is committed to developing financial literacy materials for people of all ages.

    The  new site specifically  includes information and tools to teach school-aged youth about the history of credit unions, how to locate a credit union nearby, and how to start their own credit union at their school. The site also addresses positive financial habits, offers important lessons about the value of a dollar, and, for fun, contains a map section that allows users explore the currencies of different nations.

    The Pocket Cents website launch is part of the  NCUA's celebration of April as  national financial literacy month. The agency also is using Twitter and other social media outlets to help increase financial literacy, addressing issues such as taxes, money management for youth, savings, investing, retirement, and homeownership. (See related April 3 News Now story: CFPB, NCUA promote financial literacy month.)

    The Credit Union National Association (CUNA) is also marking Financial Literacy Month by continuing its annual sponsorship of the  National Youth Saving Challenge, and credit unions across the country are also encouraging their members to budget, save, manage credit, and pay down debt. (See related March 30 News Now story: April is National
    Financial Literacy Month.)

    For more on the NCUA's new site, use the resource link.

    CMG risk manager: CUs among targets from breach

    MADISON, Wis. (4/12/12)--The number of credit unions affected by the Global Payments data breaches could number into the hundreds, though the exact number or amount of fraudulent transactions is not yet known, said a CUNA Mutual Group security expert.
     
    "One credit union has more than $100,000 in fraud, and some have zero," said Ann Davidson, CUNA Mutual Group risk manager. "It's in that window."
     
    The University of Iowa Community CU has recalled 200 cards from account holders as a result of the Global Payments breach (Daily Iowan April 11).
     
    Visa and MasterCard continue to expand the window during which the data breach occurred. As of Wednesday, Visa reported that the breach occurred between Dec. 12 and Feb. 25. MasterCard has said it could have begun as early as Dec. 3.
     
    "I don't think anyone really knows how far back this is going to go until the investigation has been completed," Davidson told News Now.
     
    Credit union fraud prevention practices such as system monitoring and daily limits are among the best in the financial services industry, but the level of trust members have for their credit unions can make them easy victims of social engineering scams, Davidson said.
     
    "Members have to be ever so cautious and never give out any personal financial information," she added. "That can't be emphasized enough."
     
    U.S. financial institutions are among the last in the world to adopt the more secure chip technology for debit and credit cards. Magnetic stripe technology is much more vulnerable to fraud, Davidson said.
     
    On Wednesday, CUNA Mutual issued a risk alert to its bondholders advising them to move forward with chip technology.
     
    "Implementing chip technology (point-of-sale and ATM terminals) will significantly reduce magnetic stripe counterfeit fraud and improve the overall security of the U.S. payment infrastructure," the CUNA Mutual risk alert said. "Chip security provides a number of benefits, including authentication of cardholders and transaction authorizations based on issuer defined rules."

    CU System briefs

    Similar CU names prompt lawsuit

    AKRON, Ohio (4/12/12)--A name change for a Pennsylvania-based credit union serving members in Ohio and Pennsylvania has prompted a lawsuit by an Akron, Ohio-based credit union with a similar name, alleging the change violates federal trademark infringement and other unfair competition laws.
     
    FirstEnergy Family CU, a $38 million asset credit union in Akron, Ohio, filed the suit Tuesday in the U.S. District Court  for the Northern District of Ohio, Eastern Division, against Greensburg, Pa.-based, $56 million asset FirstEnergy FCU, which  changed its name Jan. 1 from Allegheny Energy FCU.
     
    The Akron credit union 's complaint said it has used its service mark FirstEnergy Family CU since at least May 22, 1998, and it has invested "significant resources" into using the name in its products and services offerings and its advertising and marketing. It also has referred to itself as FirstEnergy FCU, and/or FEFCU.
     
    The Pennsylvania credit union does business in Northern Ohio, was aware of the other's use of FFCU when the name change occurred and did not obtain authorization from FFCU to use the FFCU service marks, the suit alleged. The suit alleges damages, but did not specify an amount.
     
    "The actions of Allegheny …are likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection or association of Allegheny with FFCU, or as to the origin, sponsorship, or approval of Allegheny's goods, service or commercial activity," said the court document.
     
    The Ohio credit union is seeking temporary and permanent injunctions against the use of "FirstEnergy Family CU," "FirstEnergy FCU," "FEFCU," and any other similar marks that may cause confusion . It also is seeking destruction of all materials bearing the new name, removal of all Web pages with the name, and a written report on how the credit union is complying.
     
    FirstEnergy Family also asked for damages to be trebled and for any profits the other credit union had made as a result.
     
    The Pennsylvania credit union, on its website (April 11), noted that a recent expanded membership charter allows it to offer services and membership to all FirstEnergy Corp. employees and their families, since Allegheny Energy Inc. was acquired by FirstEnergy Corp. 
     
    In it FAQ section about its new name, it said it "will also go by the abbreviated name FirstEnergy FCU." It advised members not to make checks out to the credit union as FEFCU, but they could write them to FirstEnergy FCU.

    Two conferred with Annie Vamper awards

    NEW YORK (4/12/12)--The National Federation of Community Development Credit Unions announced the 2012 recipients of the Annie Vamper "Helping Hands" Award, the highest honor given by the federation to community development credit union (CDCU) staff and volunteers.
     
    This year's recipients of the awards are Phillip H. (Phil) Conner, board member at the $542,000 asset Mt. Zion Indianapolis FCU in Indianapolis, and Helen Godfrey-Smith, president/CEO of the $87 million asset Shreveport (La.) FCU. 

    The awards celebrate the organization's late Associate Director, Annie Wilma Vamper, whose lifelong dedication to the credit union movement, and to small credit unions in particular, served as inspiration to many low- and moderate-income people and communities nationwide.
     
    The award is presented to individuals whose unselfish work carry on her legacy and whose contribution to their credit union and community has gone above and beyond the call of duty, exemplifying the CDCU values.

    Departing federation President/CEO Clifford N. Rosenthal, himself a recipient of one of the first awards in 1993, commented on the significance of the award.
     
    "Annie Vamper embodied the very ideals of the CDCU movement," Rosenthal said. "An African-American woman born in Alabama in the 1930s, Annie became a credit union manager in the midst of the Civil Rights struggle. She became a champion of low-income people during the War on Poverty, helping to organize 12 new credit unions to serve truly 'un-served' communities, and she also led the way for both women and minorities in government, reaching high-level positions at the Bureau of Federal Credit Unions and eventually the National Credit Union Administration.

    "It's also a testament to the diversity of the CDCU movement that these two honorees from vastly different credit unions, one with less than a million in assets, and the other quickly approaching the one-hundred million milestone, should be honored in the same year," he added, noting that "credit unions of all sizes can make important and indelible contributions to their communities, and these two honorees demonstrate this reality."

    Conner joined the credit union's board more than 25 years ago. Most recently, as chairman of its delinquent loan committee, he has taken the collection of delinquent loans to new heights, managing to reduce the delinquency rate from over 26% at its highest point, to nearly 0% now.
     
    He and his committee work non-stop contacting credit union members directly, sending notices and letters, and occasionally making personal visits to members' homes or place of business to collect payments.
     
    In 1983, Godfrey-Smith became CEO of Shreveport FCU and built the $1.9 million credit union into an $88 million CDCU operating seven branches, with an eighth branch planned. 

    Godfrey-Smith has also selflessly shared her knowledge with others, traveling nationwide and worldwide mentoring credit unions. In addition to her work domestically, she has traveled to South Africa, Trinidad and Tobago and other locations outside the U.S., helping credit unions survive and thrive. 

    In late 2009, she convinced her board to merge a troubled credit union in the impoverished Mississippi Delta region, the First Delta FCU, a historic CDCU founded during the Civil Rights movement. The merger maintained crucial services in a community with few regulated financial institutions. Since taking in that credit union, Shreveport FCU has expanded its service to other parts of the Delta and operates three branches in Marks, Miss.; Clarksdale, Miss.; and Batesville, Miss. Under her management, the Mississippi credit unions have doubled in both assets and loans.

    In 2010, Godfrey-Smith partnered with the City of Shreveport to open a Community Empowerment Center to deliver affordable financial services while offering training, counseling, job readiness and business development to low- and moderate-income residents. A second center is scheduled to open in Shreveport later this year, with a third being planned in Mississippi.
     
    Conner and Godfrey-Smith will receive their awards at a special ceremony June 15, during the federation's 38th Annual Conference on Serving the Underserved in Atlanta. For more information about the event, use the link.

    CUNA takes on banks for MBL claims

    Click to view larger image Click to download pdf
    WASHINGTON (4/12/12)--The Credit Union National Association (CUNA) is warning lawmakers to not be fooled by the misinformation being circulated by bankers in an attempt to derail potential Senate action that could increase the credit union member business lending (MBL) cap."

    Sen. Mark Udall's (D-Colo.) legislation, S. 2231, would increase the MBL cap from 12.25% of assets to 27.5% of assets, injecting $13 billion in new funds into the economy and creating 140,000 new jobs, at no cost to taxpayers, CUNA has said. A vote on the Senate bill is expected once members of Congress return to Washington on April 16, and Rep. Ed Royce (R-Calif.), a key sponsor of House MBL legislation, has promised a vote on his bill after any Senate action.

    CUNA Senior Vice President of Legislative Affairs Ryan Donovan said "bankers have been pelting legislators with twisted facts ahead of the vote."

    To challenge this misinformation campaign, CUNA has distributed a fact sheet that corrects banker assertions to all members of Congress.

    The fact sheet notes that:
    MBL cap increase legislation "is only controversial because the banks don't like it… everyone else thinks it's a no-brainer," the fact sheet adds.

    CUs' auto lending market share at 17.4%

    ONTARIO, Calif. (4/12/12)--After hitting a monthly low of 15.2% in March 2011, credit union auto lending market share has climbed, maintaining above 17% each month since May 2011, according to CUDL's quarterly Auto Lending Trends & Credit Union Analysis.
     
    CUDL, part of Ontario, Calif.-based CU Direct Corp., presented the findings in a webcast March 27 that outlined key metrics on auto financing trends for credit unions and competing financial institutions, provided a fourth-quarter 2011 credit union auto lending market analysis and discussed auto manufacturer and sales trends.
     
     Among the highlights presented by Andrea Salgado, market research analyst for CUDL:
    The webcast noted that new- and used-auto sales rose through February, with new-car sales up 14% and used-car sales up 10%. Credit union indirect loans outstanding totaled $71 billion in 2011, less than the $71.7 billion in 2011.
     
    To view a PDF presentation or a video of the webcast, use the resource links.

    NCUA suggests CU, agency steps to improve exams

    ALEXANDRIA, Va. (4/12/12)--In this month's National Credit Union Administration (NCUA) Report, Director of Examinations and Insurance Larry Fazio said NCUA examiners and credit union management "can both take a lot of specific steps to contribute to a conducive exam environment."

    Fazio said these steps include: "Each of these steps largely revolves around effective communication," he said. Fazio noted that the agency will soon kick off a series of "listening sessions" with credit unions across the country.

    The NCUA listening sessions will begin on May 2 in Boston, Mass., and are also scheduled for: Fazio said during these meetings he is interested in hearing opinions on how examiners and credit unions can better "understand and recognize the challenges and demands of their corresponding roles, and the associated points of view."

    He added that he wants to listen to suggestions on best practices NCUA examiners can use to achieve results-oriented examinations conducted with professionalism and empathy, and thoughts on how to build "a constructive working relationship and trust" between examiners and credit unions. He said he is also looking forward to discussing how credit union management should interact with examiners, and how the appeals process for examiner decisions could be improved.

    For the full NCUA Report, use the resource link.

    CUs, National Journal to revitalize playground at Tampa children's hospital

    ST. PETERSBURG, Fla. (4/13/12)--All Children's Hospital in St. Petersburg, Fla., will soon boast a freshly renovated playground for its patients and their families through funds raised with the help of credit unions. Groundbreaking took place yesterday on the "leave behind" project, which will retrofit an existing playground with special play equipment for ill and injured children suffering from a variety of illnesses and accidents, will honor the 2012 Republican National Convention taking place in nearby Tampa.

    Credit Union National Association (CUNA) Board Chair Mike Mercer, League of Southeastern Credit Unions President/CEO Patrick La Pine, the National Journal Group's Political Correspondent and event emcee Beth Reinhard, All Children's Hospital's Physician-in-Chief and Interim President Dr. Jonathan Ellen, St. Petersburg Mayor Bill Foster and Rep. Bill Young (R-Fla.) broke ground for the playground project.

    Mayor Foster said he is "grateful to everyone who is helping to make this playground a lasting legacy for the families of St. Pete," and  Congressman Young said "seeing all these groups come together to provide a safe place where children can rehabilitate while at the same time play and have fun is a way in which they can give back to our area and demonstrate what the spirit of the upcoming convention is all about."

    La Pine noted that Florida credit unions have a long history of supporting All Children's Hospital, with $1.5 million in donations and supporting the development of a 28-bed Pediatric Intensive Care Unit, a state-of-the art dialysis wing and a new autism center. The playground project gives the league and others a chance "to demonstrate that credit unions are local and give more to their communities than just financial services."

    Dr. Ellen thanked the group for making the vision of a therapeutic playground "a reality for All Children's patients and their families."

    The Republican National Convention is scheduled to begin on August 27 and end on August 30.

    A similar project that would build a rooftop playground was kicked off last week at Levine Children's Hospital in Charlotte, N.C. Charlotte is the location of the 2012 Democratic National Convention. (See related April 6 News Now story, CUs help kick off hospital project for conventions)

    Since 2000, credit unions have honored the host cities for each national convention with a "leave behind" project that benefits local communities.

    The two projects will cost a combined $600,000, and credit unions nationwide, the Carolinas Credit Union Foundation, the Southeastern Credit Union Foundation, CO-OP Financial Services, and CUNA Mutual Group are raising funds for the projects. National Journal is also sponsoring the renovations.

    Credit unions really see this as an opportunity to leave something positive behind that will continue to benefit the Charlotte and Tampa communities long after the balloons have dropped and the convention ended," CUNA President/CEO Bill Cheney said.

    Pa. banking dept.'s new outreach unit meeting with CUs

    HARRISBURG, Pa. (3/12/12)--The Pennsylvania Credit Union Association met Tuesday with two members of the Pennsylvania Department of Banking's new business unit, the Office of Client Financial Services, which aims to provide proactive outreach to the state's financial services companies.
     
    Two members of the unit's Area Executives Team, Donna Riling and Becky MacDicken, visited PCUA's headquarters in Harrisburg and reviewed the new initiative with PCUA President/CEO Jim McCormack and Senior Vice President Mike Wishnow (Life is a Highway April 11).
     
    During the next few weeks, the team of six Area Executives will visit credit unions across the state to gather information on the state of the economy and regulatory issues facing financial institutions. They will call on both state-chartered and federally chartered credit unions to take back detailed information to Banking Secretary Glenn Moyer, PCUA said.
     
    "We welcome this Relationship Manager program and the efforts of the Area Executives team [members], as they collect regulatory feedback from credit unions and other regulated institutions," said McCormack. "Working together, we can help the department develop fair and consistent regulatory policies for all financial institutions," he added.
     
    Riling works in the Western area and MacDicken in Southcentral. Other Area Executives are: Dick Moriarty, Central; Felix Zorrilla, Northcentral; Rosemary Garland, Northeast; and Kevin Pyle, Southeast.

    S.D. CUs discuss reg burden with CFPB's Cordray, Sen. Banking chair

    SIOUX FALLS, S.D.  (4/12/12) --
    Click to view larger image CFPB Director Richard Cordray; Leandra English, CFPB senior advisor for external affairs, meet with South Dakota credit unions community banks.
    South Dakota credit unions emphasized the importance of helping consumers without adding unnecessarily to their regulatory burden during a meeting in Sioux Falls yesterday with Consumer Financial Protection Bureau  (CFPB) Director Richard Cordray and Sen. Tim Johnson (D-S.D.), the chairman of the Senate Banking Committee.
     
    The roundtable session was with about 100 leaders of the state's credit unions  and community banks.

     Representatives from 26 South Dakota CUs and the Credit Union Association of the Dakotas (CUAD) attended.

    Sen. Johnson said he was particularly interested in having the CFPB's Cordray hear the key issues and concerns directly from these smaller financial institutions.

    Cordray noted that he will continue to be open to hearing from credit unions and other smaller institutions.
     
    Robbie Thompson, president of the CUAD, told News Now that Sen. Johnson made clear at the session that he understood that credit unions and community banks did not cause the financial crisis, and said that was why he authored the provision in the Dodd-Frank financial reform law directing the CFPB to consider the impact of its rules on smaller financial institutions, including credit unions and community banks in rural areas.

     The Credit Union National Association, the leagues and credit unions supported this key provision.
     
    Click to view larger image Jeff Schmidt, middle, chief operating officer, Voyage FCU, Sioux Falls, S.D., at roundtable of South Dakota credit unions, community banks. (Photos provided by Credit Union Association of the Dakotas)
    "This was a great opportunity to hear directly from the CFPB director and receive some assurances that their mission aligns with ours," said Thompson.

    "Our credit unions are concerned about the impact of the CFPB on our overall regulatory burden, and any time we have a chance to express this point face to face with the director, it is a welcome opportunity.  We thank Mr. Cordray for his participation and applaud Sen. Johnson in his efforts to ensure that credit unions were included in this meeting with the CFPB."
     
    The roundtable session also included a panel discussion with three financial institution representatives from a larger bank, a community bank, and credit union.

     Speaking for credit unions on the panel was Jeff Schmidt, chief operating officer of Voyage FCU in Sioux Falls and chairman of CUAD's governmental affairs committee.  The panel focused on the burdens of regulations and how difficult it can be to manage the load, especially when an institution is smaller in size.

    Economy continues expansion, says Fed Beige Book

    WASHINGTON (4/12/12)--The nation's economy continued to expand, growing at a "modest to moderate pace" from mid-February through late March, the Federal Reserve said in its monthly "Beige Book," for the third month in a row.
     
    The Beige Book, prepared by the Federal Reserve Bank of Cleveland, is based on anecdotal reports from the 12 Federal Reserve Districts. Information was collected before April 2. 
     
    All districts reported growth, with manufacturing continuing to expand in most districts, especially in automotive and high technology industries. Manufacturers were "somewhat concerned about rising petroleum prices." Demand for professional business services also showed modest to strong growth, said the Beige Book.
     
    Reports on retail spending were positive, bolstered with unusually warm weather, the Fed said.  However, "while the near-term outlook for household spending was encouraging, contacts in several districts expressed concerns that rising gas prices could limit discretionary spending in months to come," it added.
     
    New vehicle sales were strong or strengthening across most of the U.S. Tourism increased in most districts.  Residential real estate improved some, with many of the district contacts citing expansion in multi-family housing industry.
     
    Banking conditions remained stable with modest improvements in demand for lending, said the report.  Demand for commercial and industrial loans remained steady while several districts reported an increase in commercial real estate lending activity.  Consumer lending remained stable or rose modestly across a few districts.  The Cleveland and Richmond Districts reported increased home equity and auto lending, while Chicago reported improved credit availability for auto loans and credit cards.  Several districts reported credit standards remain stable, but Richmond bankers were said to be offering easier terms to attract commercial borrowers. Several districts reported increased credit quality, with delinquencies continuing to decline and few problem loans reported.
     
    Overall wage growth was "constrained," and overall price inflation was modest, said the Beige Book. Hiring was steady, but several districts reported difficulty in finding qualified workers for high-skill positions, it said.
     
    To view the full report, use the link.

    San Antonio business owners, CUs urge lifting MBL cap

    SAN ANTONIO (4/13/12)--San Antonio small business owners united with credit unions in the Texas community Wednesday for a joint press conference at Freetail Brewery Co. to call on lawmakers to support the measure before Congress to raise credit unions' member business lending (MBL) cap.
     
    San Antonio  business owner and Generations FCU small business lending member Kathy Carrizales talks to a local Univision reporter about the need to raise credit unions' member business lending cap to infuse more business loans into the economy. (Photo provided by Generations FCU)
    They urged support of the Small Business Lending Enhancement Act (S. 2231), which would raise the MBL cap to 27.5% of assets, up from the current 12.25% of assets.
     
    "Ninety percent of small business owners have indicated that access to capital is a significant issue for them, hindering them from growing their business and hiring new employees," said Tim F. Haegelin, Generations FCU president/CEO. 
     
    "Fifty percent of Americans work for small business owners," Haegelin said. "At a time when our country is struggling to get its economy back on track, it doesn't make sense to limit responsible growth that will enable these individuals, who are the backbone of our communities, to hire workers and expand their businesses," he added.
     
    The press conference was attended by numerous San Antonio small business owners as well as Generations FCU, Firstmark CU, United SA FCU, and Randolph-Brooks FCU.
     
    Each of the small business owners had approached multiple banks but was unable to obtain necessary funding to grow and expand its business. However, all later received funding from their local credit unions.
     
    The Credit Union National Association estimates that passage of S. 2231 would infuse $13 billion into the economy and create roughly 140,000 jobs nationwide. According to the credit unions present at the conference, that would include more than 8,500 jobs in Texas alone, at no cost to taxpayers and without expansion of government. Also, banks would still keep about 90% of their market share of business loans.
     
    "The average credit union business loan is a little over $200,000," said Haegelin. "These are quite literally the loans that banks do not want to make because [the loans] are too small and because it doesn't provide enough return on investment for [the banks]."
     
    "As not-for-profit financial institutions, credit unions can make these smaller loans. And that helps the local nail salon owner or air conditioning repairman buy equipment, expand their business and hire more workers, putting our community and our economy back to work," Haegelin said.
     
    The vote on the S. 2231 is expected within the next two weeks.

    Tax deadline means extra hours helping members

    MADISON, Wis. (4/13/12)--With the April 17 tax deadline approaching credit unions nationwide are dedicating resources to helping community members prepare their tax returns.
     
    The Wisconsin Credit Union League maintains the website www.freetaxrefund.org, which explains how consumers can access a free refund whether they prepare their own taxes, use a paid tax preparation service, or use a free tax preparation service. The site explains how to use direct deposit to get a no-cost tax refund, where to find free tax assistance sites and what to bring for help with filing.
     
    Each of Wisconsin's more than two million credit union members already has a savings account that can be used to receive a free tax refund, according to the Wisconsin league.
     
    Many credit unions are offering their expertise through the Internal Revenue Service Volunteer Income Tax Assistance (VITA) program and the Earned Income Tax Credit (EITC) program. Also, IRS has a Tax Counseling for the Elderly (TCE) Program offering free tax help to taxpayers who are 60 and older.
     
    VITA offers free tax help to people earning $50,000 or less. It provides trained and certified community and credit union volunteers to help taxpayers access special tax credits and complete their forms. Through the VITA program, credit unions help lower-income consumers keep more of their EITC refunds in their own pockets, according to the National Credit Union Foundation's REAL Solutions VITA site.
     
    Taxpayers who qualify can claim the EITC credit and could pay less federal, tax, no tax, or get a tax refund. The credit is for low-income working families to offset the burden of Social Security taxes and provide an incentive to work (News Now Jan. 30).
     
    GHS FCU, Greenville, S.C. used volunteer tax preparers from Broome Community College to assist with its VITA program for low-income families (Press & Sun Bulletin March 29).
     
    In a Pennsylvania Credit Union Association Highway Quick Poll, 40%, or 32, of 80 responding credit unions said they are offering VITA services this year (Life is a Highway Feb. 17).
     
    Responding Pennsylvania credit unions also offered feedback on how they would provide tax preparation services. Responses included:
    The $876 million asset Georgia United CU, Duluth, Ga., is partnering with IRS and the College of Family and Consumer Sciences of the University of Georgia to provide its VITA program.
     
    State Employees' CU, Raleigh, N.C., will operate its VITA until April 17. It has offered the VITA service for four years and its own low-cost tax preparation service for consumers earning more than the $50,000 VITA annual income cutoff for two years. In 2011, SECU tax preparers filed more than 53,000 returns, with members receiving $82 million in refunds and saving $7.9 million in tax preparation fees.
     
    For the ninth year, the $4.2 billion asset Bethpage (N.Y.) FCU is helping low- to moderate-income households on Long Island through the VITA program at 12 of its branches. Bethpage FCU is making available 150 IRS-certified volunteers, including bilingual tax assessors, to members and nonmembers.
     
    Royal CU, a $1.2 billion asset credit union in Eau Claire, Wis., is among the credit unions offering the VITA program. Royal CU offers assistance filling out basic tax forms (1040EZ, 1040A and 1040). Volunteers are University of Wisconsin-Eau Claire and Chippewa Valley Technical College accounting students certified by the IRS, says RCU's website (News Now Jan. 31).
     
    More than 100 Michigan credit unions are offering Just File It, a web-based program that allows individuals and families to file for state and federal tax credits that might otherwise be overlooked, said First Community FCU, Parchment, Mich., one of the credit unions offering the program. The program uses a free, online software program that poses questions to users and offers assistance via online chats. The technology was development by the Legal Aid Society of Orange County, California.
     
    Oregon Community CU, Eugene, Ore., is again offering the use of a meeting room and equipment to host a Tax-Aide site for the AARP Tax-Aide program. The credit union's South Eugene branch is serving as a Tax-Aide through Saturday. Tax-Aide is available to all taxpayers with low to moderate incomes, with special attention to those ages 60 and over. Membership with AARP is not required.
     
    North Side Community FCU, Chicago, offered free and reduced rate tax preparation services on April 5 and April 12 to both members and nonmembers.
     
    For tax filers fortunate enough to get a refund, Nino Gemma, CEO of Stark FCU, Canton, Ohio, offers these recommendations for making good use of the funds (CantonRep.com April 2):
    See related story, "Last-minute tax tips on H&FF Radio," in News Now's Consumer News section.

    Wellness programs are focus of HR/TD Council paper

    MADISON (4/13/12)--While more credit unions have introduced wellness programs to help employees their health, the initiatives must be well-designed to have a positive impact, according to a new white paper from the CUNA HR/TD Council.
     
    "Credit Union Wellness Programs: Good Health is Good Business"  makes the case for well-designed employee wellness programs.
     
    While each credit union should develop a wellness program that fits its culture, employees and organizational goals, certain elements are essential, according to the paper.
     
    These elements include:
    The paper also includes four cases studies featuring credit unions that have produced positive results from their wellness programs. The council serves credit union human resources and training and development professionals.

    Inside Washington

    CUNA talks MBLs in Marketplace, American Banker

    WASHINGTON (4/13/12)--Credit unions continue to advocate for increasing the member business lending cap in a number of media outlets, and two notable media appearances were Credit Union National Association (CUNA) comments on American Public Media's Marketplace radio and in the pages of the American Banker.

    Marketplace is broadcast across the nation on National Public Radio affiliates. In the Marketplace story, CUNA Executive Vice President John Magill emphasized the benefits of an MBL cap increase, noting that raising the MBL cap "would put $13 billion into the coffers of small businesses that aren't otherwise getting loans--and at no cost to taxpayers."

    Sen. Mark Udall's (D-Colo.) MBL cap lift legislation, S. 2231, would increase the MBL cap from 12.25% of assets to 27.5% of assets. Senate Majority Leader Harry Reid (D-NV) has pledged to bring the bill to the floor for a vote following the Senate's return to Washington.

    The American Banker story quoted comments CUNA CEO Bill Cheney made in a video message to credit unions on CUNA's home page. The current battle over the MBL bill "isn't about banks and credit unions," but about "small businesses that desperately need access to capital," Cheney said.

    In the same story, Ryan Donovan, CUNA senior vice president of legislative affairs, stressed that credit unions' grassroots push in the Senate is going strong and will continue right up until the floor vote. "Our interest right now is making sure that when it happens, that we have the votes. And we're going to get there," Donovan said.

    CUNA has also made efforts to refute banker claims ahead of the vote, warning lawmakers to not be fooled by the misinformation being circulated by bankers in a fact sheet sent to all members of Congress. (See May 12 News Now story: CUNA takes on banks for MBL claims)

    In a letter to the editor published in The Daily News of Newburyport, Tom Stites, a citizen of Newburyport, Mass., urged Massachusetts Sens. John Kerry (D) and Scott Brown (R), who have voiced support for the state's small businesses, to follow through and vote for the Senate MBL bill.

    "Massachusetts' small businesses are a driving force of employment and economic improvement," Stites wrote. "In a recent national survey, 90% of small businesses identified availability of credit as a problem, and 61% of them said it's harder to get loans today than it was a few years ago.

    "One of the advantages of credit unions is that they are legally set up as financial service cooperatives, owned by their depositors and governed by elected, volunteer boards of directors," he added. "This is why they don't waste money on elaborate lobbies, have hidden costs or back bad loans."

    To read the letter and listen to the radio spot, use the links.

    NCUA opens registration for Orlando listening session

    ALEXANDRIA, Va. (4/3/12)--Registration for the Orlando, Fla. edition of the National Credit Union Administration's credit union "listening sessions" has opened, the agency said Thursday.

    The session is scheduled to be held between 1 and 4 p.m. ET on June 12. Registration will be limited to the first 150 reservations.

    "Stakeholders can now register for any of our first four Listening Sessions, and we expect to open registration for our final two sessions next week," NCUA Chairman Debbie Matz said. "Credit union officials and volunteers are welcome to take this opportunity to tell us how we can improve our exam process, regulations, and any other initiatives to protect credit union safety and soundness," she added.

    The NCUA listening sessions will begin on May 2 in Boston, Mass., and are also scheduled for:
    For more on the sessions, use the resource link.

    NCUA Director of Examinations and Insurance Larry Fazio in the latest NCUA Report said he is interested in hearing opinions on how examiners and credit unions can better "understand and recognize the challenges and demands of their corresponding roles, and the associated points of view," and looks forward to discussing how agency examiners and credit unions can build "a constructive working relationship and trust." (See April 12 News Now story: NCUA suggests CU, agency steps to improve exams)

    Iowa pizza place owner: CUs help fuel American dreams

    DES MOINES, Iowa (4/13/12)--Credit unions are a key to helping small businesses operate, and as such, they should be allowed to provide more loans to small businesses than currently allowed under the federal member business lending (MBL) cap, an owner of several pizza stores in Iowa wrote Thursday in a letter to the editor of the Des Moines Register.
     
    "As a small business owner, I agree with the phrase, 'small businesses are the engine of our economy,'" wrote Brad Loney, who owns Little Caesar's Pizza stores. "I also know my small business engine wouldn't be running without the critical fuel provided by my Iowa credit union. I am the proud owner of pizza-franchise outlets, with locations in Fort Dodge, Newton and West Des Moines. None of this would have been possible had it not been for Community Choice CU [based in Johnston, Iowa]."

    Loney wrote that he personally met with nearly every banker in Central Iowa and also sent his business plan to 12 other banks, and was told in each instance that even though his business plan was good, they weren't lending.

    "Community Choice reviewed my business plan and saw the potential of my business," Loney explained. "But more important, it understood that I had a dream. It was willing to loan my business money when the banks wouldn't.

    "I now employ more than 40 people in Iowa and hope to continue to expand," he added. "Because my credit union experience has been so positive, I've gone back to it for my home loan as well."
     
    The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.
     
    To read the letter, use the link.

    Market News

    MADISON, Wis. (4/13/12)

    News of the Competition

    MADISON, Wis. (4/13/12)

    CU's video in NJ taps into anti-bank sentiments

    PARSIPPANY, N.J. (4/13/12)--Parsippany, N.J.-based Garden Savings FCU has launched a new video pointing out the difference between credit unions and banks. This time, the video taps into the negative press that big banks have attracted since Bank Transfer Day in November.
     
    In the video, which is depicted in a dark setting, a man, in closeup, introduces himself as a bank and outlines a less-than-flattering list of features the bank has for the consumer.
     
    "We realize it's a fairly aggressive video in some respects," Garden Savings Chief Sales Officer Michael Powers told the New Jersey Credit Union League (The Daily Exchange April 12).  "But on the other hand, it's clearly meant to be a little bit over the top and at the end of the day, it does show what we believe to be some clear differentiations between banks and credit unions."
     
    He noted it shows the $206.5 million asset credit union's take on what the perceptions of those differences are from the consumer's standpoint, and "it is meant to call people to action and say to themselves, 'Why am I still banking at a bank?'"
     
    The video in its full form, as well as a 30-second version, will air on county cable television in Morris and Essex counties next month.
     
    To view the video, use the link.

    Wisconsin regulator: New business formation up 12.2%

    MADISON, Wis. (4/13/12)--The number of new businesses formed in Wisconsin in the first quarter increased by 12.2%, compared with the same period in 2011, according to data released April 9 by the Wisconsin Department of Financial Institutions (DFI). That growth is due in part to assistance from credit unions, said the Wisconsin Credit Union League.
     
    In the first quarter 9,821 new businesses were formed in Wisconsin, compared to 8,752 during the same period in 2011.
     
    March showed a 4.3% improvement over 2011, the 10th time in the past 12 months that new business activity has increased over the previous year, said the DFI, which regulates state-chartered credit unions and banks.
     
    Since the start of the recession in 2007, Wisconsin banks increased their business loans a mere 5%, while state credit unions grew member business loans (MBL) by 52.3% to compensate, noted Brett Thompson, league president/CEO.
     
    "During challenging economic times, many discouraged job seekers are more likely to form businesses," Thompson said. "And that means credit unions that make loans to them are helping 'Main Street' Americans. For example, the Treasury Department found that 25% of credit unions' business loans were made to members with household income of less than $30,000 and another 20% went to households with incomes between $30,000 and $50,000."
     
    The Credit Union National Association (CUNA) and credit unions are urging Congress to increase the MBL cap to 27.5% of assets from 12.25%. Doing so, would inject $13 billion in the U.S. economy for small business lending. That, in turn, would create 140,000 new jobs at no cost to the taxpayer. 
     
    Legislation to increase the cap is active in both the U.S. Senate and the House, and a vote on S. 2231 is expected to take place after Congress returns from its spring recess, said CUNA.

    Washington Post article cites credit union-friendly resources

    MADISON, Wis. (4/16/12)--A recent article in The Washington Post on financial literacy resources for teens and families offered three sources with credit union ties.
     
    April is Financial Literacy Month and credit unions nationwide are encouraging their members to budget, save, manage credit, and pay down debt.
     
    In the Post article, the National Endowment for Financial Education (NEFE) was cited as a source for information to help students comprehend the financial world. The Credit Union National Association (CUNA)  has partnered with NEFE to provide financial curriculum to high schools. Use the link.
     
    The article also described Jump$tart as a curriculum-based website on financial responsibility, planning and money management, credit/deb savings and investment. Jump$tart works with credit unions and state credit union leagues nationwide.
     
    Apple FCU, Fairfax, Va., was highlighted for its student-run credit unions and for providing tips on good financial habits for teens.
     
    Credit Union Youth Week, sponsored by CUNA, is April 22-28. This year's theme is "Be a Credit Union Super Saver."
     
    National Youth Saving Challenge, also sponsored by CUNA, is held during the entire month of April. Last year nearly 146,000 young members deposited $28.5 million into their saving accounts during National Youth Savings Week---with 9,058 new accounts.

    CUs, National Journal help launch Tampa hospital project

    ST. PETERSBURG, Fla. (4/13/12)--All Children's Hospital in St. Petersburg, Fla., will soon boast a freshly renovated playground for its patients and their families through funds raised with the help of credit unions. Groundbreaking took place Wednesday on the "leave behind" project, which will retrofit an existing playground with special play equipment for ill and injured children and  will honor the 2012 Republican National Convention taking place in nearby Tampa.

    Click for slide showCredit union representatives helped kick off a renovation project to benefit All Children's Hospital in St. Petersburg, Fla. at a groundbreaking event this week. CUNA, state credit union leagues, credit unions nationwide and the National Journal are working together on the "leave-behind" project to honor the Republican National Convention to be held in Tampa in August. Shown here breaking ground (L to R): Brendan Garrison; Beth Reinhard of National Journal; Patrick La Pine, president/CEO, League of Southeastern Credit Unions; Cynthia Scott-Butler; Rep. C.W. Bill Young (R-Fla.); Riley Christian; Mike Mercer, CUNA chair and president /CEO, Georgia Credit Union League & Affiliates; Dr. Jonathan Ellen, Interim president/CEO of All Children's; St. Petersburg Mayor Bill Foster; and Caden Riley. (CUNA Photo)
    Credit Union National Association (CUNA) Chair Mike Mercer, League of Southeastern Credit Unions President/CEO Patrick La Pine, the National Journal Group's Political Correspondent and event emcee Beth Reinhard, All Children's Hospital's Physician-in-Chief and Interim President Dr. Jonathan Ellen, St. Petersburg Mayor Bill Foster and Rep. Bill Young (R-Fla.) broke ground for the playground project.

    Foster said he is "grateful to everyone who is helping to make this playground a lasting legacy for the families of St. Pete."  Young said "seeing all these groups come together to provide a safe place where children can rehabilitate while at the same time play and have fun is a way in which they can give back to our area and demonstrate what the spirit of the upcoming convention is all about."

    La Pine noted that Florida credit unions have a long history of supporting All Children's Hospital, with $1.5 million in donations and supporting the development of a 28-bed Pediatric Intensive Care Unit, a state-of-the art dialysis wing, and a new autism center. The playground project gives the league and others a chance "to demonstrate that credit unions are local and give more to their communities than just financial services," he said.

    On behalf of the hospital, Ellen thanked the group for making the vision of a therapeutic playground a reality for All Children's patients and their families.

    The Republican National Convention is scheduled to begin on Aug. 27 and end on Aug.  30 in Tampa.

    A similar project to build a rooftop playground was kicked off last week at Levine Children's Hospital in Charlotte, N.C. Charlotte is the location of the 2012 Democratic National Convention. (See related April 6 News Now story: "CUs help kick off hospital project for conventions.")

    Since 2000, credit unions have honored the host cities for each national convention with a "leave behind" project that benefits local communities.

    The two 2012 projects will cost a combined $600,000, and credit unions nationwide, the Carolinas Credit Union Foundation, the Southeastern Credit Union Foundation, CO-OP Financial Services, and CUNA Mutual Group are raising funds for the projects.

    Credit unions really see this as an opportunity to leave something positive behind that will continue to benefit the Charlotte and Tampa communities long after the balloons have dropped and the convention ended," CUNA President/CEO Bill Cheney said.

    FHFA 'forgiveness' plan could spill to private lenders: CUNA

    WASHINGTON (4/13/12)--If the Federal Home Finance Administration (FHFA) proposes a mortgage principal forgiveness program, it should take into account any potential spillover effects such a program could have on private sector mortgage modifications, Credit Union National Association (CUNA) President/CEO Bill Cheney said in a letter to Edward DeMarco, acting FHFA director.

    The letter follows remarks that De Marco made earlier this week before the Washington, D.C.-based think tank The Brookings Institution. In his speech, De Marco addressed a potential FHFA principal forgiveness program. Such a program would be limited to borrowers with GSE-backed mortgages, and the program would likely impact a fraction of the estimated 11 million underwater borrowers in the country today, De Marco said.

    The acting FHFA head outlined his objections to allowing the GSEs to pursue a broad principal forgiveness program for troubled homeowners. "This is not about some huge difference-making program that will rescue the housing market," DeMarco said, adding that the debate over this type of relief is "about which tools, at the margin, better balance two goals: maximizing assistance to several hundred thousand homeowners while minimizing further cost to all other homeowners and taxpayers."

    The anticipated benefit of principal forgiveness is that by reducing foreclosures relative to other modification types, losses would be lowered and housing prices would stabilize faster, producing broad market benefits, DeMarco said. However a larger group of underwater borrowers who have remained faithful to paying their mortgage obligations are a greater risk to housing markets and taxpayers, he added. Encouraging their continued success could have a greater positive impact on the recovery of housing markets, he said.

    Cheney said CUNA agrees it is important for the FHFA to conduct a thorough up-front analysis of the possible effects of implementing any principal forgiveness program aimed at GSE-backed mortgages. However, he warned, such a program, if implemented, could lead to some of the underwater borrowers without GSE-backed mortgages to seek similar principal forgiveness packages from their lenders or servicers.

    "CUNA shares FHFA's concerns regarding the possibility that such a program would incentivize borrowers to strategically default in order to obtain principal forgiveness," Cheney said, adding that an FHFA program may have a domino effect leading to strategic defaults outside of the body of mortgages backed by the GSEs.

    In the letter, Cheney said credit unions have traditionally originated high quality mortgage loans with stringent underwriting standards, have had lower default rates than most banks during the recent economic crisis, and have been at the forefront of efforts to provide reasonable mortgage modifications to their members who are in distress. Many credit unions have also sold mortgages to government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, but holding mortgages in portfolio is still a more common practice among credit unions than in other parts of the financial services sector, he added.

    Even though an FHFA-sponsored principal forgiveness program would not directly affect credit unions' balance sheets, if such a program spills over into the private sector, CUNA is concerned that it could have a significant negative impact on credit unions with regard to the loans held in their portfolios, Cheney said.

    Several leagues report MBL advocacy efforts

    MADISON, Wis, (4/13/12)--As credit unions nationwide step up their grassroots efforts to expand their ability to offer  loans to small businesses, several leagues reported what their credit unions are doing to support the effort.
     
    They are urging Congress to pass Senate Bill 2231, the Credit Union Small Business Jobs Bill, which would raise the MBL cap to 27.5% of assets from the current 12.25%. The Credit Union National Association says that doing so would inject $13 billion into small businesses to help create 140,000 new jobs, without costing the taxpayer a dime.
     
    In New York, credit unions are engaging their members in MBL advocacy and have reported "extremely positive results," said the Credit Union Association of New York (CUANY).  Corning (N.Y.) FCU, for example, obtained 2,256 signatures in two days for advocacy letters to lawmakers on the issue.
     
    On Wednesday, New York credit union CEOs from across the state participated in two MBL conference calls hosted by CUANY. They shared advocacy strategies and discussed the importance of contacting their lawmakers in Congress and recognizing those who already support the measure in Congress.
     
    New Jersey credit union representatives discuss member business lending with Sen. Frank Lautenberg (D-N.J.) during a political event in New Jersey. (Photo provided by the New Jersey Credit Union League) .
    Some lawmakers "have been strong advocates of MBL reform, and we know they are being bombarded by banker opposition as a result," said CUANY President/CEO William J. Mellin. He urged New Jersey credit unions to "flood their offices with credit union e-mails, letters and phone calls expressing our appreciation and reaffirming how essential they are to the success of this legislation--legislation that will benefit small business owners, create jobs and help stimulate the economy without any cost to taxpayers."
     
    In Lawrenceville, N.J., credit unions took advantage of an opportunity to meet with Sen. Frank Lautenberg (D-N.J.) to make the case for MBL reform personally. They attended  Rider University's Rebovich Institute for New Jersey Politics' financial session of its 2011-12 Governing New Jersey series, said the New Jersey Credit Union League  (NJCUL) (The Daily Exchange April 12).
     
    Credit Union of New Jersey Director  Gary Chizmadia, Advanced Financial FCU CEO  Alan Feigenbaum,  Hamilton-Horizons CEO Cindy Rein-Zima and McGraw-Hill FCU Marketing Manager Rob Carabelli joined NJCUL Director of Government Affairs Chris Abeel urged supporting the bill comes up for a vote, expected any time after the Senate returns to session on April 16.
     
    "This wasn't a small opportunity," said league President/CEO Paul Gentile. "We need our senators to hear a loud voice here in New Jersey. We're running radio and internet ads, generating lots of e-mails, letters and calls, and have an MBL postcard campaign in full swing. But to have people there to be able to pose the question live and in-person is incredibly valuable for our efforts as we have never before seen such a high level of anti-credit union propaganda coming from the bankers," he said.
     
    Pennsylvania Credit Union Association (PCUA), which sent out a special advocacy edition of its newsletter, Life is a Highway Thursday, noted that representatives from Members 1st CU, Mechanicsburg, including CEO Bob Marquette, met Tuesday with a lawmaker's
    regional staff in Harrisburg. They shared statistics on MBL, provided a package of information and delivered copies of letters written by several of the credit union's member businesses.
     
    Mary Beth Wilcher, CEO, of Erie (Pa.)  FCU, and Trent Mason, chief marketing officer, Erie General Electric FCU, also met with a lawmaker's regional office in Erie. They explained the credit union difference and the importance of the MBL legislation. Other meetings with regional staff are in the works with American Heritage FCU, Cross Valley FCU, First Commonwealth FCU, Freedom CU, Penn East FCU, SPE FCU, Sun East FCU, and TruMark Financial CU.

    "Come Monday, we will have six of the seven regional offices covered," said a special edition of PCUA's Life is a Highway (April 12).

     

    Ohio CUs preparing to march for hospitals

    DUBLIN, Ohio (4/13/12)--Ohio credit unions are breaking in their walking shoes to prepare for the 2012 "Ohio Credit Unions: Marching Miles for Miracle Kids," which aims to raise $135,000 this year to add to the more than $500,000 they've raised for Ohio Children's Miracle Network Hospitals since 2007.
     
    The Credit Unions for Kids Steering Committee believes the campaign has the momentum to reach the goal, said committee Chair Jaime Crooks of Ohio Healthcare FCU, Dublin.  "We have infused the 2012 campaign with new, unique fundraisers. I think the result will be more involvement on the grassroots level, helping us reach our goal."
     
    Credit union staff, volunteers, members and the general public can participate as marchers or sponsors in the march-a-thon. The first march will be in Youngstown on May 5, with subsequent walks to follow in other areas of the state through May 12. 
     
    Ohio Credit Union League President Paul Mercer noted, "This is another example of how credit unions are making a difference in the communities they serve."
     
    Funds go to local children's hospitals.  Nationally, credit unions contribute to their local Children's Miracle Network Hospitals through Credit Unions for Kids fundraising efforts. For more information use the links.

    DuTrac teams with Walgreens to expand ATM network

    DUBUQUE, Iowa (4/13/12)--Du Trac Community CU has expanded its ATM network through a new partnership with national retailer Walgreens.
     
    Beginning immediately, DuTrac members can withdraw cash and make balance inquiries at ATMs located within any Walgreens store throughout Iowa without paying a surcharge.
     
    Also, the $551 million asset, Dubuque, Iowa-based credit union has begun branding ATMs inside the Walgreens stores in Dubuque and on the Iowa side of the Quad Cities area.
     
    "DuTrac's focus is always finding new and improved ways to serve our members' financial needs," said DuTrac President/CEO Andrew Hawkinson, adding the partnership will provide more ways for members to access cash free of charge.
     
    The new standalone ATMs are typically located just inside the stores' entrance.
     
    DuTrac has an existing partnership with Casey's General Stores throughout eastern Iowa, and is a member of the Privileged Status ATM network.

    CU System brief

    Inside Washington

    CFO Council paper: Forecasting in turbulent times

    MADISON, Wis. (4/16/12)--If there is a "new normal" in financial forecasting it is defined by uncertainty, and that calls for decision-makers to have a better understanding  than ever about the assumptions underlying their forecasts, according to a new white paper from CUNA CFO Council.
     
    "Financial Forecasting and Analysis in Turbulent Times" identifies the issues credit unions face in producing effective forecasts in volatile times and highlights several strategies and best practices.
     
    Chief financial officers and industry consultants contributing to the white paper share how to remain agile, be more efficient, and cope with all the competitive and regulatory changes in the industry. They focus on what the numbers mean rather than just what the numbers are.
     
    Specifically, the white paper presents:

    Study: FIs not promoting mobile banking

    BOSTON (4/16/12)--If credit unions want more of their members to use mobile banking, it might be as easy as asking them to do so. Financial institutions are not adequately promoting their mobile banking offerings, according to a new study.
     
    The ath Power 2012 Mobile Banking Study found that only 10% of consumers using mobile banking were prompted by their financial institution to do so.
     
    This indicates a clear lack of consumer education, yet an obvious opportunity for financial institutions to take initiative to promote their offerings, said Mike McEvoy, managing director of ath Power.
     
    Also, remote deposit capture was the missing feature most sought by consumers, according to the study.
     
    Other key findings:

    NCUA, WesCorp's Swedberg settle suit

    LOS ANGELES (4/16/12)--The National Credit Union Administration (NCUA) and Thomas Swedberg, one of the officials it sued as a result of the collapse of Western Corporate FCU, Wednesday filed a settlement agreement with a federal court in Los Angeles to dismiss the case, according to a stipulation filed Friday.
     
    The documents were filed before U.S. District Judge Margaret Nagle of the U.S. District Court, Central District of California.
     
    A further settlement conference will be conducted off the  record, according to the court document.
     
    Swedberg was the director of human resources for the former $34 billion corporate credit union.
     
    Settlement discussions continue under court supervision regarding the claims of NCUA against defendant WesCorp CEO Robert Siravo, according to the document filed Wednesday.
     
    Swedberg's agreement follows a settlement with Timothy J. Sidley, the former chief risk officer at WesCorp.
     
    WesCorp was hard hit by losses related to mortgage-backed securities. NCUA's lawsuit had alleged that senior WesCorp executives were negligent in monitoring the investments of the corporate and that there was a breach of fiduciary duty and fraud related to investments that resulted in $6.8 billion in portfolio losses (News Now Jan. 24).  The executives filed counterclaims and affirmative defenses against NCUA, alleging the agency was aware of WesCorp's investment strategies and approved of and encouraged the strategies.

    Two Maryland educational CUs to merge

    ROCKVILLE/GREENBELT, Md. (4/16/12)--Montgomery County Teachers (MCT) FCU, Derwood, Md., has signed a letter of intent to join Educational Systems FCU, Greenbelt, Md.
     
    The merger would create a combined credit union of nearly $750 million in assets and serve more than 95,000 members to establish one of the largest education-based credit unions in the region, serving educators, students and their families in six Maryland Counties.
     
    "We have found a partner who truly shares a similar history, membership, and mission to help the members of the education community achieve their financial goals and dreams," said Tom Hickman, chairman of MCT FCU with $384 million in assets.
     
     "We welcome the members, volunteers and staff of MCT FCU to our organization," said Rosemary Brinkley, chairman of Educational Systems FCU, with $367 million in assets. "Together, we hope to create the premier financial services provider for the education community."

    Pa. CUs familiarize political candidates with CU issues

    Erie (Pa.) area credit unions meet Republican State Senate candidate Janet Anderson at Erie FCU.
    HARRISBURG, Pa. (4/16/12)--Pennsylvania credit unions statewide have been initiating early involvement with political candidates to make them familiar with credit unions and credit union issues, according to the Pennsylvania Credit Union Association (PCUA).
     
    Elections bring many opportunities for credit unions to engage with candidates, volunteer for campaigns and build relationships. Early relationship building of this type is how credit unions gain friends in the state General Assembly and some have risen to become members of Congress, PCUA said.
     
    Republican State Senate Candidate for the 49th district, Janet Anderson, met with Erie-area credit unions to discuss issues that are important in the district, and at the state and federal level (Life is a Highway April 11).

    Republican candidate for U.S. Senate Steve Welch (fourth from left) meets with a group of credit union leaders at TruMark Financial CU in Trevose, Pa.
    Discussion topics included: the Erie airport expansion; keeping jobs and businesses in Erie; the need to match workforce with skill sets; energy initiatives; differences between credit unions and banks; state and federal regulatory burdens; fiscal responsibility; downsizing Pennsylvania government responsibly; urgency to pass the member business lending bill; and data breach responsibility.

    Credit union leaders from the Philadelphia and Harrisburg areas met Wednesday with U.S. Senate Republican candidate Steve Welch at TruMark Financial CU in Trevose (Life is a Highway April 6) .

    The meeting allowed credit unions to learn more about Welch's platform, share legislative and regulatory concerns facing credit unions, and further educate him on credit unions.

    Lonny Maurer, president/CEO of Belco Community CU, Harrisburg, Pa., meets with State House Democratic Candidate Patty Kim. (Photos provided by the Pennsylvania Credit Union Association)
    Welch shared his thoughts about the damage of the Dodd/Frank Wall Street Reform and Consumer Protection Act and how he believes it hurts businesses and credit unions. He also expressed his commitment to credit union member business lending legislation (S. 2231) and supplemental capital.

    Credit unions in attendance included: TruMark Financial CU; Sb1 FCU, Philadelphia; Fairless CU, Morrisville; Sun East FCU, Aston; Keystone FCU, West Chester; Upper Darby (Pa.) Belltelco FCU ; American Heritage FCU, Philadelphia; PSECU, Harrisburg; and Members 1st FCU, Mechanicsburg.

    If successful in the primary election, Welch will face U.S. Sen. Bob Casey in the November general election.

    Belco Community CU President/CEO Lonny Maurer recently met with the 103rd State House Democratic Candidate Patty Kim. Kim is running for recently retired Representative Ron Buxton's seat, which is being contested by three other candidates (Life is a Highway April 2).
     
    The meeting allowed Kim to learn more about credit unions and share what she envisions for the district, PCUA said.

    Conn. CU league annual meeting has record attendance

    MERIDEN, Conn. (4/16/12)--The 78th Annual Meeting of the Credit Union League of Connecticut attracted record attendance of more than 300 participants, including league staff, credit union employees and volunteers, league strategic partners and exhibitors.
     
    Joanne Todd (left), president/CEO, Northeast Family FCU, Manchester, named 2012 Connecticut Credit Union Professional of the Year, receives her award from Tony Emerson, Credit Union League of Connecticut president/CEO.
    Held last Tuesday in Plantsville, Conn., the one-day gathering offered more than 50 industry-related vendors, three education sessions, an address by Cardtronics CEO Steve Rathgaber, a luncheon buffet, and a cocktail reception.
     
    Attendees listened to guest speakers covering current hot topics--investing in today's unpredictable economic climate; avoiding pitfalls in establishing core processing agreements; and developments in the ATM industry--as well as the wide range of products and services germane to the credit union industry.
     
    At the conclusion of the annual business meeting, award presentations were made to honor two individuals for their outstanding contributions to the credit union industry: Joanne Todd, president /CEO, Northeast Family FCU, Manchester, was named 2012 Connecticut Credit Union
    Rosa Taylor (left) , board chair, Hartford (Conn.) Healthcare FCU, receives her award after being named 2012 Connecticut Credit Union Volunteer of the Year. (Photos provided by the Credit Union League of Connecticut)
    Professional of the Year, and Rosa Taylor, board chair, Hartford (Conn.) Healthcare FCU, was named 2012 Connecticut Credit Union Volunteer of the Year.
     
    "It was gratifying to see so many of our member credit unions participate in this annual event with such enthusiasm," said League President/CEO Tony Emerson.

    "We wanted to provide a friendly, informative, and professional opportunity--at no cost to attend--for credit unions to network, discuss the state of the industry, and discover the latest in products and services that will help them enhance their service to their own members. Mission accomplished," he concluded.


     

    Saskatchewan CUs have record year

    SASKATCHEWAN, Canada (4/16/12)--By generating record-high net income of nearly $92 million, credit unions in the Canadian province of Saskatchewan posted a record year in 2011.
     
    The credit unions also returned $18 million to members through patronage and dividend programs (TheStar Phoenix April 12).
     
    In 2010, credit unions posted a net income of $88 million and returned roughly $20 million to members.
     
    Last year, assets grew 11.3% to $15.6 billion, and deposits rose  9% to $13.8 billion.
     
    Also, loans grew by 10.5% $11.7 billion from $10.5 billion in 2010, with the increase coming mostly from consumer loans--75% of the growth. Loan delinquencies decreased to historic lows of 0.75% in 2011 from 1.09% in 2010. The five-year average is 0.98%.
     
    The numbers reflect a strong business model, Ken Anderson, CEO of SaskCentral, the umbrella organization for the provinces 60 credit unions, told the publication.
     
    As a support organization, SaskCentral recorded a consolidated net income of $27.2 million. Assets grew to $2.2 billion, compared with $1.9 billion in 2010. SaskCentral's return on equity was 8.4 %, compared with 11.8 % in 2010.
     
    SaskCentral is owned by 60 Saskatchewan credit unions that serve about 500,000 members in 270 communities through 303 service outlets.
     

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    MBLs and more on tap as Congress returns

    WASHINGTON (4/16/12)—Although increasing member business lending (MBL) authority for credit unions remains the top priority for the Credit Union National Association (CUNA) and credit unions as members of the U.S. Congress return to Washington this week, CUNA Senior Vice President of Legislative Affairs Ryan Donovan said there are a number of other issues of interest to credit unions brewing.

    A vote on  Senate MBL legislation, to increase the lending cap to 27.5% of assets, up from 12.25%, is expected soon, but likely will not happen this week. House MBL sponsor Rep. Ed Royce (R-Calif.) has said that a vote in that chamber would follow a Senate vote.

    The House and Senate will remain in session until April 30.  Agendas for this stretch of the congressional calendar are still being developed, but a House Financial Services Committee vote is scheduled this week to address a deficit package that incorporates some changes to the Consumer Financial Protection Bureau (CFPB) and the National Flood Insurance Program (NFIP), among other issues.

    Under the House package, funding for the CFPB would be subject to the congressional appropriations process. The NFIP provisions would extend the flood insurance program for five years. Similar NFIP legislation is active in the Senate. The flood insurance program is set to expire on May 31. It has been extended through a long series of short-term extensions since 2008.

    Other portions of this package would end the Dodd-Frank Act's so-called "Too Big to Fail" bailout fund and eliminate the Home Affordable Modification Program (HAMP). According to a committee release, the total spending cut package would reduce the national deficit by an estimated $35 billion.

    Other pieces of  pending legislation of interest to credit unions include:
    There also are bills to enhance the fairness of financial institution examinations pending in both the House and Senate. Housing finance reform and cybersecurity standard improvements are also current topics of interest in Congress.

    Donovan said the 21st Century Postal Service Act of 2012 (S. 1789) is also of interest, as the bill would reduce postal service days from six to five and give the postal service greater flexibility in how it increases its rates.

    As noted, the House and Senate will remain in session until late April.
     
    After that, the Senate will take an in-district work period between April 30 and May 6, and then will remain in D.C. until the long Memorial Day weekend. The Senate is then scheduled to be out of session between May 28 and June 3. A nearly monthlong Senate session will begin on June 4 and last until July 1.

    The Senate will not be in session the week of July 4, but will return to Washington on July 9. A four-week Washington-based work session will follow.

    The House has a similar schedule, but House members will return to their districts in the week before Memorial Day, May 21 through May 25. Unlike the Senate, the House is scheduled to be in session on May 30 and 31. The House has also scheduled a week-long district work period from June 11 until June 15.

    Both chambers of Congress are scheduled to begin their summer recesses on Aug. 6.

    FIs could be responsible for third-party actions: CFPB

    WASHINGTON (4/16/12)--The Consumer Financial Protection Bureau (CFPB) last week reminded its supervised financial institutions that they could be held responsible for the actions of third-party service providers they contract with, and said it would "take a close look at service providers' interactions with consumers."

    The CFPB said it expects the financial institutions that it supervises to maintain effective processes for coping with some of the risks that working with third party vendors can pose. The agency suggested that financial institutions:
    For the full CFPB release, use the resource link.

    CFPB accepting comment on Reg Z change

    WASHINGTON (4/16/12)--The Consumer Financial Protection Bureau (CFPB) is considering revising Regulation Z so that a current 25%-of-available-credit limit would apply only to fees that are charged at account opening.

    The Fed last year adopted language that would apply the 25% of credit-limit restriction to fees that are charged before an account is opened, such as application fees. That rule was scheduled to go into effect last October, but was blocked by a successful challenge. The CFPB became rule writer of the Reg Z provision under a transfer of responsibilities required by the Dodd-Frank Wall Street Reform Act.  

    First Premier Bank and Premier Bankcard LLC last year filed a lawsuit against the CFPB arguing that the regulator was exceeding its authority by seeking to regulate fees that are paid before account opening, and U.S. District Court for South Dakota Chief Judge Karen Schreier granted a motion for preliminary injunction.

    The CFPB is considering amending Reg Z to Prompted by this recent litigation, the CFPB said it has proposed amending Reg Z to apply the 25% only to by only applying the 25% limitation to the first year following account opening. The potential amendment will remain open for public comment until June 11.

    For a full CFPB release, use the resource link.

    WECU staffer, wife killed in marina fire

    BELLINGHAM, Wash. (4/17/12)--A business loan officer at Bellingham, Wash.-based Whatcom Educational CU (WECU)  and his wife were killed when a fire swept through a Bellingham marina on March 30.
     
    The deaths of WECU Business Loan Officer Jim Langei, 43, and Sterling Taylor, 33, were confirmed April 5 by authorities, said the Northwest Credit Union Association (Anthem April 12).
     
    Police had said they received a 911 call indicating the couple was trapped. Langei and Taylor lived aboard their 42-foot boat. The early morning fire destroyed about 10 boats and a boat house at Squalicum Harbor (The Bellingham Herald April 6).
     
    Langei joined the credit union staff in 2003 as a loan officer.  Taylor was also a former WECU employee.
     
    Langei is survived by his parents, Wayne and Kathy Langei, brothers Robert and Tom Langei, and sons Spencer and Ian Langei, all of Bellingham. A joint celebration of life was held Saturday for the couple.

    N.Y. CUs, league run full-page MBL ad in N.Y. Times

    NEW YORK (4/17/12)--
    Click to view larger image Click for larger view
    A full-page ad touting raising credit unions' member business lending (MBL) cap was placed in the national edition of The New York Times Sunday by New York credit unions and the Credit Union Association of New York (CUANY). The ad appears in the front section of Sunday's newspaper.
     
    The message of the ad was two-fold, said the association:
     
    First, it was to have New York credit unions and their 4.6 million members commend and thank Sens. Charles Schumer (D-N.Y.) and Kirsten Gillibrand (D-N.Y.) for their leadership in support of S. 2231, the Credit Union Small Business Jobs Bill.
     
    Second, the ad urges the U.S. Senate to pass the bill, which would raise credit unions' MBL cap to 27.5% of assets from 12.25%. The bill, said CUANY, will support small businesses, create jobs for more Americans and build a stronger economy in New York State and nationwide.
     
    "Right now, it is imperative that our senators know we appreciate their continued support and leadership on this legislation," said William J. Mellin, CUANY president/CEO.
     
    "This advertorial will accomplish that goal in a powerful, highly visible way--and it will better position both senators to advocate on our behalf and use their considerable influence with their peers, which could prove absolutely critical once the Senate votes on the bill," Mellin added.
     
    The advertorial was funded by New York credit union contributions to a general MBL advocacy fund, said CUANY.

    The national edition of The New York Times has a circulation of 1.25 million and is one of the most highly read newspapers in the nation.

    The Credit Union National Association estimates that passing the bill would help inject $13 billion into the economy for small businesses and thus generate 140,000 jobs the first year, all at no cost to the taxpayer.  Congress is expected to vote on the bill soon.

    Iowa league CEO: Tax status is due to ownership structure

    DES MOINES, Iowa (4/17/12)--Credit unions are exempt from federal income tax because of their not-for-profit, cooperative ownership structure and volunteer, elected boards, said Patrick Jury, president of the Iowa Credit Union League, in a recent letter to the editor published in the Des Moines Register.
     
    "Our not-for-profit structure is part of the reason credit unions provide better rates on loans, pay higher rates on savings and charge lower fees to our members," Jury wrote. "In 2011, we saved Iowans more than $68 million through better rates and lower fees."
     
    Jury was writing in response to letters written by John Sorensen, president, Iowa Bankers Association, in the Register and The Gazette criticizing credit union tax status.
     
    "Banker criticism of the credit union tax exemption is highly hypocritical in light of the substantial tax reductions they receive as a result of Subchapter S status," Jury wrote. "Sub S status creates a significant tax break for a corporation that elects it."
     
    Jury cited Credit Union National Association (CUNA) estimates that the 2,311 banks that chose Subchapter S status cost the U.S. Treasury about $700 million. At the end of 2011, there were 203 Subchapter S banks in Iowa and CUNA estimates that foregone federal tax revenue arising from Iowa bank Subchapter S election was $41.9 million in 2011.
     
    "If credit unions were taxed like banks, it would alter our not-for-profit business model," Jury wrote. "Priorities would change, in that the shareholder would end up being more important than the customer."
     
    To read Jury's letter, use the link.

    Agility webinar focuses on workplace violence

    CHARLOTTE, N.C. (4/17/12)--Agility Recovery, a CUNA Strategic Services provider of disaster recovery solutions to credit unions, will offer a free webinar, "Violence in the Workplace: Are you Prepared?" at 2 p.m. (ET) today.
     
    The webinar, part of Agility's 2012 Webinar Series, will feature Lynn Berger, executive vice president with Business Health Systems (BHS) as a guest presenter. BHS is a provider of workplace solutions, including training on topics such as preventing workplace violence.
     
    "Our society has undergone many changes regarding safety since Sept. 11, 2001," said Bob Boyd, Agility Recovery CEO. "As a result, preventing workplace violence and promoting safety have become primary concerns for all workplaces, especially financial institutions dealing with the general public."
     
    The webinar will focus on recognizing signs of workplace violence and how to react to them.

    CU Centers re-elects four directors

    INDIANAPOLIS (4/17/12)--Shared-branching vendor Credit Union Centers' (CUC) members recently elected four directors to represent the credit union service organization (CUSO).
     
    Each director will serve a three-year term.
     
    CUC directors represent credit unions based in each of the CUSO's six regions throughout Illinois and Indiana.
     
    The directors, elected at the CUSO's annual meeting, include:
    Other CUC directors who continue to serve are:
    CUC comprises 78 credit unions from Indiana, Illinois and Tennessee. The CUSO offers shared-branching services at more than 300 locations in Illinois and Indiana. Through its affiliation with CO-OP Shared Branching, CUC provides member credit unions access to 4,500 locations in 50 states.

    CUNA asks Fitch to revise MBL statements

     WASHINGTON (4/17/12)--The Credit Union National Association (CUNA) asked Fitch Rating Services to revise or reconsider a statement critical of credit union business lending that the ratings agency issued late last week, pointing out information about credit union lending that the statement's authors "may not have been aware" of in preparing their message.

    "I would hope that you might consider revising or extending your remarks after reviewing this additional information," CUNA Chief Economist Bill Hampel said in an email to the statement's authors.

    In preparing his comments, Hampel underscored that credit union member business lending (MBL) is a safe and sound activity and that pending legislation to increase the MBL cap includes provisions that allow only safe and measured growth.

    He noted that to ensure that pending legislation does not increase risk to credit unions by lifting the MBL cap to 27.5%, both the House (H.R. 1418) and Senate (S. 2231) bills explicitly contain the following three provisions a credit union must meet to go beyond the current 12.25% cap. The credit union:
    Hampel also reminded that credit unions are not novices to member business lending, with some credit unions having been engaged for decades.

    To assuage any doubt regarding whether a shortage of small business credit has existed throughout the recession and its aftermath, Hampel cited the monthly survey results generated by the National Federation of Independent Business, which show a reading of negative 11 for availability of credit.

    Hampel reiterated a CUNA point that the NFIP has also made: any time there is an increase in the supply of a product, small business loans in this case, users of that product will find more of it available, on better terms, and more of it will be consumed.

    "In other words, small businesses would benefit from this bill," Hampel noted.

    Hampel also warned to be wary of banking groups' "analysis" of the number of credit unions that are impaired by the current low lending cap.

    In assessing the need for a higher MBL cap to further help small businesses, CUNA classifies as:
    In total, these roughly 500 credit unions account for about 75% of credit union business loans subject to the cap and they have to progressively retard their business lending the closer they get to the cap.

    To the Fitch writer's stated concern that smaller credit unions with limited resources might find it difficult to successfully compete in a larger business loan environment, Hampel reminded that MBL legislation would not require--nor would allow-- all credit unions, of all sizes, to ramp up business lending facilities. 

    "Any significant increase in business lending at credit unions would come only from those credit unions that already have extensive experience in business lending," Hampel said, and pointed out that National Credit Union Administration rules already require a credit union to use the services of an experienced individual (at least two-years) before even setting up a business lending program. 

    The CUNA communication, which was also distributed to the legislative directors of every U.S. House and Senate office, also noted that credit union member business loan net charge-off rates have been significantly lower than bank rates year-in and year-out for over a decade.  In fact, CUNA said that since 1997, credit union member business loan net charge-off rates have averaged 0.23%, a figure that is one-fourth the 0.91% bank average over the same period.

    Sherman boosts CU capital bill in Roll Call

    WASHINGTON (4/17/12)--A bill to broaden credit unions' ability to build capital would simply fix a flaw in current law that unfairly punishes healthy credit unions for growing to meet the needs of their members and their communities, writes Rep. Brad Sherman (D-Calif.) in an op-ed in the Monday issue of Roll Call.
     
    Sherman and Rep. Pete King (R-N.Y.) introduced the Capital Access for Small Businesses and Jobs Act (H.R. 3993) in February to allow credit unions additional sources of capital.  Currently capital can only be built from retained earnings.
     
    "This bipartisan legislation simply gets the government out of the way, allowing credit unions to expand consumer access to their affordable financial services while improving the overall safety and soundness of the credit union system.
     
    "The bill makes a simple fix to current law to boost economic growth without spending a dime of taxpayer dollars or adding to the deficit," the Sherman op-ed says.
     
    Sherman says the result of the current law's inflexibility on capital for credit unions results in credit unions of all sizes being forced to turn away deposits and scale back on lending to limit their growth.
     
    "(The current) capital-based standards were never intended to discourage manageable asset growth by well-managed, financially healthy credit unions, yet that is exactly what is happening in every part of the country.
     
    "As consumers and small-business owners will tell you, this is a real problem that harms everyone looking for reasonably priced financial services," Sherman writes.
     
    Sherman notes that H.R. 3993 ensures adequate safeguards. It gives the National Credit Union Administration the flexibility to adjust capital requirements in response to changes in economic conditions. That flexibility, Sherman adds, is something the U.S. Congress has already provided to every other financial regulator.
     
    "Credit union access to supplemental capital does not cost the taxpayer a dime and would not disturb the cooperative and mutual structure fundamental to the credit union model, and it has no bearing on the federal tax status of credit unions. By definition, our bill excludes any form of supplemental capital that would alter the cooperative nature of the credit union.
     
    "Best of all, unlike other financial institutions, no credit union ever accepted a taxpayer bailout or Troubled Asset Relief Program money, and today we are eager to put more of their capital to work to help sustain the recovery," Sherman writes.

    Roll Call is a widely read publication covering Capitol Hill.

    NCUA bans former FCU employee for theft

    ALEXANDRIA, Va. (4/17/12)--The National Credit Union Administration (NCUA) Monday issued an order prohibiting Nicole M. Vincent, a former employee of Bangor (Maine) FCU, from participating in the affairs of any federally insured financial institution.

    The NCUA reported that Vincent was convicted of theft by unauthorized taking or transfer and was sentenced to 15 days in prison.

    It is a felony offense to violate a prohibition order; such a breach is punishable by imprisonment and a fine of up to $1 million.

    Use the resource link to view NCUA enforcement orders.

    Inside Washington

    Michigan, Texas CUs argue MBL case in media

    MADISON, Wis. (4/17/12)--Credit unions in Michigan and Texas are making a case in the media for increased member business lending (MBL).
     
    The Texas Credit Union League told the story of the Frescas family who sought to open a daycare center and was turned down by 15 banks in El Paso, Texas. Also, when looking to open a bagel shop, Suzanne and John Hermann were turned down by six banks in San Antonio. And Mike McLean, who was a commercial customer at a bank for 15 years, was denied a loan when he looked to expand his successful business, the league said (PR Newswire April 13).
     
    However, because all three entrepreneurs belonged to credit unions, they obtained MBLs for their projects. These small business owners are joining other small business owners in asking U.S senators to vote on raising the MBL cap for credit unions, the league said.
     
    The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.
     
    The U.S. Senate is expected to consider the matter soon.
     
    Credit unions in Houston say raising the MBL cap would equate to $152.6 million in new loans in the first year (Houston Business Journal April 13).
     
    In Michigan, bankers have shown during the most recent economic recession that they have not been able to come through for consumers when times became tough, Dave Adams, president/CEO of the Michigan Credit Union League, told The Flint Journal (via mlive.com April 15).
     
    Therefore, "it makes no sense" for lawmakers to restrict credit unions that are willing and able to provide small businesses with much-needed capital, he added.
     
    Michigan credit unions saw a 14% rise in MBL last year, compared with 5% growth nationwide, the Journal said.
     
    To read the article, use the link.

    Leadership network builds on African women's leadership

    GABORONE, Botswana (4/17/12)--Monique Dunbar, training and development manager for $35 million asset Communicating Arts CU in Detroit, traveled to Botswana last month to participate in the Africa Women's Forum, a Global Women's Leadership Network event jointly hosted by the African Confederation of Cooperative Savings & Credit Associations (ACCOSCA) and the Canadian Co-operative Association.
     
    In Botswana last month to participate in the Africa Women's Forum Monique Dunbar of Communicating Arts CU, Detroit, met Ma Hooud (left), a village elder.
    Dunbar went to lead sessions on human resource and training initiatives, but left as a student of leadership, said the World Council of Credit Unions (WOCCU). She brought lessons in staff development and retention to Botswana, but she learned as much as she taught. The transference from teacher to student is something not unusual for forum participants, according to Brian Branch, World Council president/CEO.
     
    "The purpose of the Global Women's Leadership Network is to provide women with an international network that engages them in professional and personal development," Branch said. "We are grateful to Canadian Cooperative Association and to Monique for their work to provide this professional development across borders for African credit union women."
     
    The Global Women's Leadership Network, is an initiative co-founded by WOCCU and the Canadian Cooperative Association (CCA) to bring together women credit union leaders from around the world. Dunbar had never been to Africa before traveling to Botswana.  Nor had she ever met anyone like Ma Hooud, a Morwa village elder and treasurer for the Morwa Savings and Credit Cooperative (SACCO or credit union).
     
    Monique Dunbar of Communicating Arts CU, Detroit, brought lessons in staff development and retention to Botswana, but said she learned as much as she taught. (Photos provided by World Council of Credit Unions.)
    "She commands great respect in her village," said Dunbar. "The women I met in Africa are so strong, so proud and so resolute that I came away from the experience inspired to succeed."
     
    Dunbar also worked on building rapport with members and boards of directors and striving to reach consensus to pursue credit union goals and objectives. Communication is key, she explained, stressing the need for listening actively in any discussion or negotiations.
     
    "My primary message to the group was to stay positive," Dunbar said. "It's too easy to see so many conflicting demands as a way to keep you from achieving your goals, but you should never stop trying."
     
    In addition to the U.S. and Canada, the forum was attended by women from nine African nations: Botswana, Gambia, Ghana, Kenya, Malawi, Nigeria, South Africa, Swaziland and Uganda. Dunbar's teachers were many, she said, and their lessons valuable, including an eye-opening view of the mobile banking transaction technology used by SACCO members in Kenya, a program supported by WOCCU.
     
    "Cellphone banking in Kenya is advanced beyond anything we're doing," Dunbar said. "If I could put that work with our members in Detroit, it would be awesome."
     
    Reaching out in ways members need and want to deliver services is critical to success for any credit union or SACCO, Dunbar counseled the women at the forum. Educating staff and members about ways to take advantage of those changes is an important part of training for leadership.
     
    "You don't see a lot of African-American women who are credit union CEOs, but that's not going to stop me from pursuing that goal," Dunbar said. "It's extremely important to me that future generations of staff exceed what I have done and that they, in turn extend their hand to the next in line. I feel that the women I met in Botswana have given me some wonderful examples to take home."

    NCUF opens 2013 Wegner Award nominations

    MADISON, Wis. (4/17/12)--Credit union supporters can nominate individuals and organizations for the 25th Annual Herb Wegner Memorial Awards to be presented by the National Credit Union Foundation (NCUF). The deadline for nominations is June 29.
     
    Winners will be honored at NCUF's awards dinner Feb. 25, in conjunction with the Credit Union National Association Governmental Affairs Conference in Washington, D.C.
     
    "NCUF's Wegner Awards turn 25 next year and the caliber of recipients over the years has been truly remarkable," said Josie Collins, NCUF director of donor relations and resource development. The awards are widely considered the highest national honors in the credit union movement, she said.
     
    Nominations can be made for these awards:
    Nominations can come from individuals and/or organizations.  To make a nomination:
    1. Complete the Wegner Awards nomination form on the NCUF website. Use the link.
    1. Gather at least five letters of recommendation citing examples of the nominee's achievements relevant to the award criteria.
    1. Send the nomination form and recommendation letters electronically to NCUF by June 29.
    Questions about the Wegner Awards can be directed to Josie Collins at jcollins@ncuf.coop or 800-356-9655, ext. 4374.

    Leveraging social media in the MBL battles

    LANSING, Mich. (4/17/12)--The Michigan Credit Union League (MCUL) has been working with credit unions to place stories about the member business lending (MBL) issue in media outlets to draw attention to an impending vote in the U.S. Senate to raise the credit union MBL cap. Social media need to be leveraged in the MBL battles, MCUL says.

    Because of social media, readers have the ability to share and participate in the news, and the MBL coverage provides an opportunity to do that, said MCUL (Michigan Monitor April 16).

    Credit unions can leverage the current MBL coverage online to reinforce the issue and expand the circle of influence, Jonathan Fuhrman, marketing consultant for CU Solutions Group, who specializes in social media, told MCUL.

    "Credit unions can search for the topic on Twitter, and then engage directly with anyone who is talking about it," Fuhrman said. "This can include more mainstream media sources (local news and radio), along with bloggers, or anyone else with a strong influence online.  Perhaps there are local businesses with a strong social media following who could greatly benefit from MBL. You can engage those businesses directly on the issue, then get them to talk to their followers about it," he said.

    Credit unions can use the hashtag #raiseMBLcap in all MBL-related Tweets to make it easier for others to search for the topic and share information. Fuhrman added that credit unions can set up Google Alerts for keywords related to the topic, which will alert them each time a new article appears online. Also, consistently post in the story's comment section, which ensures that accurate information and positive comments remain near the top of the comments.

    Also, the California Department of Financial Institutions discussed what goals and objectives management should consider in developing a social media plan (Monthly Bulletin March).

    Financial institution managers should ensure they cover all applicable social media activities when establishing policies and procedures.

    Key elements to address are:

    Forbes: CUs a lifeboat for students drowning in debt

    NEW YORK (4/17/12)--"For all those drowning in student debt, a credit union just might be a lifeboat," wrote personal finance writer Sheryl Nance-Nash in an article on Forbes' website (April 13).
     
    Outstanding student loan debt now exceeds $1 trillion, Nance-Nash said, adding that many people may not realize "credit unions are surely worth a look-see."
     
    She interviewed Alice Stevens, chief operating officer of First Financial FCU, Toms Rivers, N.J., who is also chairman of cuStudentLoans, a network of more than 130 credit unions offering a student loan with common underwriting and pricing. Its custudents.org website is powered by Fynanz, a strategic alliance provider of CUNA Strategic Services.
     
    The author pointed out that credit unions are not-for-profit, "so that alone probably means you're going to do better than traditional banks" at refinancing private student loans at lower rates. 
     
    Stevens told Forbes that private student loans from traditional banks, especially between 2008 and 2012, left some borrowers holding interest rates of up to 14%, compared with cuStudentLoans' rates of 4.75% to 7.25%. One student with more than $100,000 in student debt at interest rates up to 14.13% refinanced and saved $8,400 a year in payments.
     
    Nance-Nash cited another "big plus" from credit unions:  a co-signer on  a student loan can help get a lower rate for a student, but a credit union may allow the co-signer to leave the obligation once the student borrower has made payments for 12 consecutive months.
     
    To view the article or to learn more about credit unions' private student loans program, use the links.

    Market News

    MADISON, Wis. (4/17/12)

    don't use this

     

    CU CEO decries 'flood of regulations' at field hearing

    CLEVELAND, Ohio (4/17/12)--Although credit unions did not cause the financial crisis, "they have been subjected to a flood of regulations that create an unnecessary burden without any measure of the effectiveness of these changes," Stan Barnes, president/CEO of Canton, Ohio-based CSE FCU said during a Monday House subcommittee on financial institutions and consumer credit field hearing in Cleveland, Ohio.

    Barnes in his statement noted that Ohio credit unions have been subjected to more than 160 new rules and regulations from 27 different federal agencies since 2008, and added that there are at least 27 rulemaking proposals pending at various agencies, including the National Credit Union Administration (NCUA), the Federal Reserve, and the Consumer Financial Protection Bureau.

    He said credit unions have told the NCUA that the agency's examiners "are practicing regulatory micromanagement and overreach," and "are dictating the business of operating a credit union."

    Steps to stem this tide have been suggested by the Credit Union National Association (CUNA) and credit unions, and Barnes repeated this call in his testimony, suggesting that the NCUA impose a moratorium on new regulations for at least the next six months and reinstate the Regulatory Flexibility Program, "which provides well-managed and well-capitalized credit unions an exemption from regulations that are not statutorily required."

    The credit union CEO also told members of the committee that the Financial Institution Examination Fairness and Reform Act (H.R. 3461), which is sponsored by the subcommittee chair, Rep. Shelly Moore Capito (R-W. Va.), and its ranking subcommittee member, Rwp.  Carolyn Maloney (D-N.Y.), "would be a positive step in balancing the relationship between the regulated and the regulator."

    The hearing also featured testimony from Bill Blake, senior vice president and associate general counsel for KeyBank; Courtney Haning, chairman, president and CEO of Peoples National Bank; Steven Fireman, president and general counsel of the Economic and Community Development Institute; and Martin Cole, president and CEO of Andover Bank.

    For more testimony from the hearing, use the resource link.

    Fed seeks summary judgment in interchange case

    WASHINGTON (4/17/12)--The Federal Reserve in a brief filed Friday asked the U.S. District Court for the District of Columbia to declare summary judgment in its favor in a case brought against the regulator by a coalition of retailer organizations seeking to invalidate the Fed's debit card interchange rule.

    NACS, National Retail Federation, Food Marketing Institute, Miller Oil Co. Inc., Boscov's Department Store LLC, and the National Restaurant Association filed their own motion early last month, seeking a summary judgment ruling declaring the interchange rule and a network non-exclusivity regulation invalid.

    The Fed's initial interchange proposal originally would have set a per-transaction debit interchange fee cap of between 7 and 12 cents per transaction. However, after receiving more than 11,500 comments, the Fed decided to add many costs related to debit card use, such as network connectivity, hardware, software, and labor costs, in the calculation of the final debit card interchange cap, and settled on a final debit interchange rule that caps fees for issuers with assets of $10 billion or more at 21 cents.

    The merchants' motion claimed the Fed's interchange rule exceeds the authority granted to it by Congress, arguing that the final rule is "arbitrary, capricious" and "an abuse of process." (See related March 6 News Now story: Retailers file for summary judgment on interchange rule)

    In its April 13 legal brief, the Fed argued that its final interchange fee regulation "complies in all respects" with the authority granted to the Fed by the U.S. Congress "to promulgate regulations regarding interchange transaction fees in debit card transactions and network exclusivity and routing."

    The Fed also argued that Congress granted the Fed the authority to "consider other costs specific to a particular electronic debit transaction" as it developed the interchange fee regulation.

    "Congress provided only limited guidance on how the Board should fulfill its statutory mission, and thereby expansively delegated to the Board authority to fill statutory gaps in establishing the statutory standard," the Fed said.

    The merchants' claims that fixed authorization, clearance, or settlement (ACS) costs, transaction monitoring costs, fraud losses, and network processing fees should not have been included in the final interchange fee calculation were also challenged by the Fed brief. Nothing in the interchange statute prohibits the Fed "from taking network processing fees paid by issuers as part of the ACS costs considered as part of the interchange fee standard," the Fed's brief said.

    The merchant representatives are scheduled to reply to the Fed's request for summary judgment on May 11. The Fed is then scheduled to reply to that merchants' brief on June 1.

    The Credit Union National Association (CUNA) this year joined the Financial Services Roundtable, the Clearing House Association, the National Association of Federal Credit Unions, the Midsize Bank Coalition of America, the Independent Community Bankers of America, the Consumer Bankers Association, the National Bankers Association and the American Bankers Association to file a friend of the court brief asking the court to dismiss the merchant's case.

    The friend of the court brief maintains that the final interchange fee is too low, as it does not allow debit card issuers to cover their costs and receive a reasonable rate of return on their investments. The joint brief also described how small and large financial institutions are harmed by the Fed's tight fee ceiling, and underscores that consumers have not seen any pricing benefits for products and services promised by the merchants when they were fighting for a government-set cap on what card issuers may charge for their services. (See related March 16 News Now story: CUNA, coalition seek dismissal of merchant interchange suit)

    News of the Competition

    MADISON, Wis. (4/17/12)

    CFPB overdraft plan needs more comment time, says CUNA

    WASHINGTON (4/17/12)--Overdraft protection is an extremely important topic for credit unions, which offer a variety of related programs, and the Credit Union National Association (CUNA) has asked the Consumer Financial Protection Bureau (CFPB) to extend a comment period for its overdraft fee initiative, which is scheduled to end on April 30.

    In a communication to Dan Sokolov, CFPB deputy associate director for research, markets and regulations, CUNA requested an additional 30 to 45 days to develop comments on the issue. "We want to make sure the agency has the information it needs," CUNA Deputy General Counsel Mary Mitchell Dunn told Sokolov.

    The CFPB earlier this year announced a new overdraft fee initiative, under which the bureau distributed questionnaires to large banks in an effort to evaluate how those institutions' overdraft policies affect consumers.

    The CFPB has said it is particularly focused on the practice of re-ordering purchases and payments to maximize overdraft fee charges, on whether consumers can anticipate and avoid overdraft fees, and on how differences in the way institutions explain and promote overdraft programs may affect opt-in rates.

    The CFPB has said it plans to use overdraft comments from consumers, the financial services industry, and other interested parties to craft new overdraft fee disclosures and rules, assist with policymaking on overdraft practices, and to prioritize the bureau's regulatory and education work. (See related Feb. 23 News Now story: CUs represented in CFPB overdraft discussion.)

    The CFPB is also considering requiring a so-called "penalty- fee box" – which would add information on the amount overdrawn  and total overdraft fees charged each month to a consumers monthly checking account statement.  The bureau also is developing a consumer overdraft fee education project.

    Robert Allen, president/CEO of Long Island, N.Y.'s Teachers FCU, and CUNA Regulatory Counsel Jared Ihrig were among those that met with the CFPB earlier this year to discuss the overdraft fee project and other issues with CFPB staff.

    Allen told the CFPB that credit unions support meaningful overdraft fee disclosures, but added that the CFPB needs to consider the costs that credit unions and other institutions would bear as it addresses overdraft fee issues. He noted that credit unions routinely charge lower overdraft fees than those charged by banks, and said his credit union refunds many account fees and makes financial counseling available to members.

    CUNA details how CFPB could address ATM issue

    WASHINGTON (4/17/12)--The Consumer Financial Protection Bureau has "more than sufficient authority" under the Dodd-Frank Wall Street Reform Act and the Electronic Fund Transfer Act to amend Regulation E and eliminate the requirement for on-machine ATM fee disclosure notices, Bill Cheney, president/CEO of the Credit Union National Association (CUNA), said in a recent letter to the agency.

    Regulation E currently requires credit unions and other financial institutions that provide ATM services to display a notice on the ATM that a fee will be charged. More detailed ATM fee information must also be provided before the transaction is completed, either by showing it on the ATM's screen or providing the ATM user with a small printed disclosure before the consumer is committed to paying the fee.

    CUNA has noted that credit unions and others have found that the outside notices on ATMs are, in some cases, being intentionally removed or destroyed, without the financial institution's knowledge, and that pictures are then taken of the ATM to show noncompliance. Some ATM users may then use this as evidence of apparent non-compliance and as grounds for lawsuits, and the number and cost of these lawsuits continues to climb. CUNA in the letter estimated that the total number of these lawsuits could be in the hundreds.

    CUNA in its letter to CFPB Director Richard Cordray said "Congress has provided the agency with general and specific authority to relieve the burdens of Regulation E for certain service providers, consistent with sufficient consumer protection.

    "We believe Congress intended for the agency to use this authority to ensure those institutions that are not abusing consumers may be relieved from certain burdens under the rule—and we believe this congressional intent applies to the regulation of remittances as well as to ATM fee notices," the letter added.

    "Moreover, sound public policy supports removal of the on-machine ATM fee notice requirements given that these notices are replicated on-screen and are of questionable utility to ATM users," Cheney wrote.

    The letter follows a recent meeting between Cordray and CUNA's Executive Committee and senior staff in which the CFPB director asked for CUNA's analysis of how the CFPB could address the ATM issue. CUNA has also discussed this issue on several occasions with the CFPB director and has written about it in comment letters and other communications to the agency.

    CUNA is also pursuing a legislative remedy to this ATM problem, working with other financial advocacy organizations to forestall litigation related to ATM fee disclosure notices.
     

    No CU damages reported from Midwest tornadoes

    MADISON, Wis. (4/17/12)--More than 120 tornadoes that hit Midwestern states this past weekend left credit unions unscathed.
     
    The twisters hit Saturday and early Sunday in Kansas, northwest Oklahoma, Nebraska and Iowa, killing five people in Woodward, Okla., and injuring dozens (USA TODAY April 16).  Seventy-five percent of the town of Thurman, Iowa, was destroyed.  Neither town had credit unions.
     
    "Over the weekend, the CUMIS Property & Casualty Claims area monitored the severe storms and tornadoes that passed through the nation's midsection," said Phil Tschudy, media relations manager at CUNA Mutual Group. On Monday, "we contacted leagues, CUNA Mutual Group field staff and credit unions in the impacted areas. So far, we have had no reported losses from credit unions, which is certainly good news," he told News Now.
     
    On Saturday nearly 100 tornadoes touched down in Kansas, said the Kansas Credit Union Association. "The good news is, most were in rural areas, and people were made very aware of the severity of the storms and took the necessary precautions," said Susan Dyer, KCUA communications director. "There was damage in south Wichita, and crews are still assessing the situation."
     
    Dyer told News Now, "We have reached out to our credit unions to see if or how they were affected."
     
    It was too early to tell whether the homes of employees or members were among those damaged.
     

    Former NAFCU chairman Dave Miller dies

    KALAMAZOO, Mich. (4/17/12)--Dave Miller, former CEO of Kalamazoo District Bell FCU, died April 11 in Kalamazoo at the age of 72. He was instrumental in forming the campaign that led to the Credit Union Membership Access Act.
     
    Miller served as chairman of the National Association of Federal Credit Unions for 12 years and treasurer for three years, and was active in state level credit union organizations.
     
    With the late Pete DiSylvester, former Credit Union National Association chairman, Miller was involved in forming the Credit Union Campaign for Consumer Choice,  an advocacy campaign that resulted in the passage of H.R. 1151, the Credit Union Membership Access Act.
     
    The campaign was formed in response to banks winning a 1996 federal appeals court ruling that denied federal credit unions the ability to serve multiple employer groups.  The case went to the U.S. Supreme Court, which upheld the ruling and led to credit unions' advocacy for legislation to preserve multiple group fields of membership.
     
    Among the provisions in the act was the authority for employment-based credit unions to serve more than one sponsor group.
     
    Miller was CEO of the credit union for 43 years until his retirement in 2009.  He also represented the Credit Acceptance Corp. to the Federal Reserve Board.  He is survived by his wife, Nancy; three sons, two sisters and several nieces and nephews (Battle Creek Enquirer via Legacy.com April 13).

    SBA seeks non-profit lenders for 2nd round of program

    WASHINGTON (4/18/12)—The U.S. Small Business Administration (SBA) has opened its second round of a program intended to provide long-term loans to eligible non-profit intermediary lenders to finance loans to small businesses.

    Eligible intermediaries must have at least one year of lending experience; they include state and federal credit unions, certified nonprofit Community Development Financial Institutions, private, nonprofit community development corporations, consortiums of private, nonprofit organizations or community development corporations, or agencies or nonprofit entities established by Native American tribal governments.

    Under the Intermediary Lending Pilot (ILP)Program, SBA makes loans of up to $1 million to participating lenders. The lenders then use the funds to make smaller loans to newly established or growing small businesses.

    SBA said in a release it anticipates that an ILP Program participant will re-lend the funds approximately 2.5 times over the 20-year term.

    The program funded 20 ILP intermediaries in 2011; none of them were credit unions, however. The agency hopes to identify another 20 participants this year in the second round.

    Use the resource link for more program information.

    MnCUN elects directors, officers

    BLOOMINGTON, Minn. (4/18/12)--The Minnesota Credit Union Network (MnCUN) held its Annual Meeting & Convention Friday and Saturday in Bloomington where it elected its table officers and board of directors.
     
    More than 330 credit union professionals and volunteers, representing 78 credit unions attended. Also, the meeting welcomed more than 125 individuals from 52 service organizations.
     
    The MnCUN Board elected its table officers for 2012:
     


    Also at MnCUN's annual business meeting, three incumbent and three new representatives were elected to terms on the MnCUN Board of Directors:

    Teamwork, diligence help Texas branch nab ID thief

    SAN ANTONIO, Texas (4/18/12)--Employees of River City FCU recently used teamwork, diligence and intuition to apprehend an identity theft fraudster with a full-scale operation in the San Antonio area.
     
    A fraudster's complaints about a check-hold procedure during an account opening raised the suspicions of Derek Maldonado, right, a member service specialist at River City FCU, San Antonio. River City Branch Manager Chris Hanson, left, and his team worked with the San Antonio Police Department to apprehend the identity thief within 30 days. (Photo provided by Texas Credit Union League)
    "It was a stressful, but we assigned everyone in the branch a role in the event we had the chance to act," Bitters Branch Manager Chris Hanson told the Texas Credit Union League (LoneStar Leaguer April 17).  "There were no questions about what to do when it happened.  We just went to work, because we knew this person would keep trying to cause losses."
     
    In early March, Derek Maldonado, a member service specialist at the $154 million asset River City FCU, had a bad feeling when the fraudster complained about a check hold procedure while attempting to open an account at the credit union.  Fewer than 30 days later, Maldonado's instincts led to the arrest of an identity thief and fraudster.
     
    Maldonado mentioned the member's comments to Hanson, who shared the information with the branch team. When the check was returned due to an unidentifiable account, the team members believed they had seen the last of the member.
     
    However, two weeks later the suspect applied for a loan online. The loan application generated a credit report that showed a fraud alert with a verification phone number. 
     
    The person Hanson called to verify the account said his identity had been stolen, and that he had an active case with the San Antonio Police Department (SAPD) due to the perpetrator's acts of fraud and forgery using his name. 
     
    Also, a branch employee who recently joined River City FCU from another local financial institution realized the same man had created a loss for the previous employer. This information was reported to SAPD.
     
    Hanson and his team worked out a plan to contact police while the perpetrator arrived at the branch to close on the loan. The individual walked out of the scheduled loan closing after becoming restless. The police just missed him. 
     
    A week later, the perpetrator returned unannounced to close on the loan. Again, credit union staff called police. After he walked out again, a teller noticed him parking across the street. When police arrived, he was apprehended attempting to flee.
     
    "If we had not discussed this in advance, the arrest could not have happened so quickly," Hanson said. "We all had phone numbers, license plates, and a visual ID on this person. The only variable we had was how this person would respond, but because we stayed focused, we were able to put this person behind bars. Now his victim has a chance to clear his name."

    CUs maintain commitment to private student loans

    New York (4/18/12)--Credit unions nationwide remain committed to assisting students and families with higher-education financing through private student loans, while traditional banks have recently been reducing their footprint in student lending. More than 180 credit unions are providing private student loans through Fynanz, a CUNA Strategic Services alliance provider, which provides student loan marketing, education, origination, and repayment solutions for lenders.
     
    Recent announcements by Chase Bank and US Bank to reduce and eliminate their respective private student loan programs is further downsizing an industry that services hundreds-of-thousands of students each year, said Fynanz. Chase Bank will continue to originate private student loans but only for existing Chase customers.
     
    Private student loans are used by students to bridge the funding gap in their higher-education financing after all federal options have been exhausted.
     
    "Private student lending has experienced significant change over the past several years," said Wes Millar, CUNA Strategic Services senior vice president. "Credit unions have created a strong foundation in student lending during this period and will remain steadfast in supporting students and families nationwide."
     
    The majority of credit unions on the Fynanz platform participate in the cuStudentLoans program, which is a private student loan program that is managed and designed by participating credit unions using common underwriting and pricing.
     
    The program, which features the cuScholar Private Student Loan and the cuGrad Private Student Loan Consolidation, includes loan participations to enhance risk mitigation.

    CU staffer ambushed by robber in fair condition

    FORT WAYNE, Ind. (4/18/12)--An employee of Freedom Financial FCU, Fort Wayne, Ind., was in fair condition after being struck several times in the face and head after she was ambushed by a robber Tuesday morning.
     
    The employee was arriving to work before 8:30 a.m., when a man  approached her from behind and made her let him into the credit union (The Journal Gazette and Indiana's NewsCenter April 17).  When she could not open the vault, the man struck her with an unknown object, then fled with some cash from a cash drawer.
     
    A police canine unit tracked the suspect to a parking lot of a nearby apartment complex, where police say he may have had a getaway car waiting.
     
    The credit union staffer was taken to a hospital and is in fair condition, said the police. It was the third robbery at the $8.5 million asset credit union in the past six months. It was also held up on Nov. 18 and Dec. 16, said police.

    Healthcare CUs form collaborative association

    ANAHEIM, Calif.  (4/18/12)--Fifty credit unions serving the healthcare industry have joined to form the Healthcare Credit Union Association (HCUA).
     
    The HCUA has member credit unions in several states, according to a press release. The group originally began in 2005, led by co-founders Maury Pilver, retired CEO of Healthcare's Cooperative CU, Jacksonville, Fla., and John Saatela, CEO of CarePoint CU, Anaheim, Calif.
    HCUA's mission is to promote the growth, viability and unity of healthcare credit unions.
     
    "From the beginning, our vision was simple but powerful," says Saatela. "We wanted to create an alliance of healthcare credit unions to exchange ideas, share resources and discuss the challenges and opportunities that face healthcare credit unions today. We're amazed at how well our colleagues have responded to this collaborative community."
     
    The group seeks to facilitate opportunities for partnership and collaboration among its membership, Saatela said.
     
    The HCUA will conduct a conference Sept. 27-28 in Seattle.

    CUs piloting SaveUp savings reward program

    SAN FRANCISCO (4/18/12)--Twenty credit unions have been selected to participate in SaveUp, a new pilot program that evaluates the emotional effects that rewards programs have on influencing consumers to make positive financial decisions.
     
    Participating credit unions will distribute customized versions of the program to their members. The Filene Research Institute will track usage, monitor member feedback and compile the results of the project.
     
    Members who use SaveUp will be rewarded each time they contribute to savings or retirement accounts, pay down credit cards or other loans, or use SaveUp's financial education materials.
     
    Users can earn credits that can be redeemed for prizes from brands such as Virgin America, TurboTax and Banana Republic.
     
    Since its launch in November, users have deposited more than $29.5 million in savings and paid down more than $25 million in debt.
     
    Participating credit unions include:

    Q2ebanking, Trusteer offer fraud protection

    AUSTIN, Texas (4/18/12)--Q2ebanking, a provider of secure electronic banking solutions for credit unions and banks, has partnered with Trusteer, a provider of cybercrime prevention solutions, to add an additional layer of security to Q2ebanking's platform. 
     
    The partnership integrates the Trusteer Product Suite, including Trusteer Rapport, with Q2ebanking's single platform of e-banking solutions. As a result, Q2ebanking clients have access to another fraud protection solution, which can strengthen their security and Federal Financial Institutions Examination Council (FFIEC) compliance for multi-layer fraud protection.
     
    Trusteer said its solutions prevent financial malware from infecting endpoints, secure Web browser's against tampering and data theft, and provide automated remediation.
     
    Q2ebanking's platform of online, voice and mobile banking solutions operates on a single secure foundation that helps keep clients in compliance with new and updated guidance, the company said. Its security features meet FFIEC guidance by including multi-endpoint native out-of-band transaction authentication, security alerts, administrative controls with dual authorization, multi-factor authentication and VeriSign tokens to protect both consumer and commercial transactions.

    European financial experts visit northwest CUs

    OREGON CITY, Ore. (4/18/12)--Financial experts and policy advisers serving nine European Union countries visited Clackamas FCU, Oregon City, Ore., as part of a multi-city fact-finding tour of U.S. financial markets. The delegation wanted to explore the differences between credit unions and banks, and how credit unions navigated the global financial crisis that began in 2008.
     
    The "European Regional Project" participants were invited to the U.S. through the Department of State's International Visitor Leadership Program (IVLP) of the U.S. Department of State's Bureau of Educational and Cultural Affairs (ECA). ECA promotes international mutual understanding through a wide range of academic, cultural, professional and sports exchange programs.
     
    The program was arranged by the World Affairs Council of Oregon, a member of the National Council for International Visitors (NCIV), under the sponsorship of the IVLP.
     
    Countries represented included Bulgaria, the Czech Republic, Germany, Hungary, Latvia, the Netherlands, Portugal, Russia and the United Kingdom. The delegates are employed in high-level roles in their native countries such as advisers to prime ministers, portfolio strategists and parliament members.
     
    The team visited the headquarters of Clackamas FCU, where they saw personal service in action, while credit union members conducted financial transactions in the lobby. They also met with credit union leadership and representatives of the Northwest Credit Union Association (NWCUA), which represents credit unions in Washington and Oregon.
     
    Led by Clackamas FCU President Diann Owen and senior managers of the 26,000-member credit union, the participants learned how credit unions remained safe and sound financial institutions throughout the financial crisis, with well-managed risks and investment strategies.
     
    "The opportunity to meet and engage in dialogue with financial experts from these various European countries" was very worthwhile, Owen said. "It was interesting to exchange financial concepts, models and policies with them, as well as learn more about the credit union structure in their prospective countries."
     
    Owen and the Clackamas FCU team walked the visitors through the cooperative model and gave examples of how member loyalty and service are fostered in their locally operated credit unions. There are no shareholder dividends to pay and each account holder gets to vote for the volunteers who serve on the board of directors, giving local consumers a unique voice in the financial arena, the visitors learned.
     
    "The cooperative financial services model is inspiring to learn about, and even more so when it's possible to see it in action, in a real credit union," said Kasey Rockwell, NWCUA director of outreach programs.

    ATM fee-notice lawsuits spread to West Coast

    MADISON, Wis. (4/18/12)--Lawsuits brought against credit unions and banks alleging violations of the ATM-fee disclosure provisions in the Electronics Funds Transfer Act (EFTA) are on the increase again, this time on the West Coast with the latest filed against a credit union in Washington state.
     
    A class action lawsuit was filed Thursday by New York resident Don Anderson--who is also involved as a plaintiff in similar suits in six other states--in the U.S. District Court for the Western District of Washington, Seattle.
     
    This time he sued North Coast CU, Bellingham, Wash., alleging that it charged him for a transaction at its Mt. Vernon, Wash., ATM on Dec. 2, 2011, in violation of the EFTA's fee disclosure provision.  According to the complaint, Anderson alleged that at the time of the transaction, "there was no notice posted 'on or at' the ATM operated by defendant apprising consumers that a fee would be charged for the use of the ATM." He also is alleged to have filed lawsuits in Arkansas, Texas, Louisiana, New Mexico, Oklahoma and Nevada.
     
    News Now reported in December that Anderson had filed ATM fee disclosure lawsuits against four credit unions and nine banks in two states (Dec. 2). The credit unions included: FirstLight FCU, El Paso, Texas; Firestone Community FCU, Bridge City, Texas; Centric FCU, West Monroe, La.; and Monroe Telco FCU, West Monroe, La.
     
    A number of similar suits have been filed by others as well, who travel around the country, looking for ATMs without notices posted on the machines and taking photos of the machines as evidence for their lawsuits. EFTA requires both an external notice physically on the machine as well as a notice on screen informing ATM users of fees charged for transactions. In 2010 and 2011, a retired couple, Nancy Kinder and Ray Harrison of Fowlerville, Mich., filed dozens of lawsuits in Michigan, New Mexico and Texas (News Now May 24).
     
    The rash of nuisance lawsuits has prompted alerts to credit unions about their ATM procedures from CUNA Mutual Group. They also have prompted the Credit Union National Association to alert credit unions and the Consumer Financial Protection Bureau of the increase in lawsuits where ATM notices have been removed, damaged or destroyed (News Now Jan. 3). CUNA also conducted audio conference with CUNA Mutual Group to assist credit unions with the issue.
     
    Credit unions and others have found that the outside notices on ATMs have in some cases been intentionally removed or destroyed without the financial institutions' knowledge.  Earlier this month, Pennsylvania State Employees CU, Harrisburg, Pa., succeeded in getting a court to dismiss an EFTA ATM fee disclosure lawsuit because the credit union showed undisputed evidence that an unknown third party had removed its posted notice illegally (News Now April 6).
     
    However, several other financial institutions have settled the suits with some of the plaintiffs.
     
    CUNA and credit unions have urged Congress to pass a measure to address the nuisance lawsuits filed. (See related story on the introduction of a bill in Congress that would address ATM disclosures in today's News Now Washington section, "Luetkemeyer/Scott bill would address ATM disclosure problems.")

    Let Congress set privacy rules, CUNA tells CFPB

    WASHINGTON (4/18/12)--The Credit Union National Association (CUNA) has urged the Consumer Financial Protection Bureau (CFPB), which sought comments on a proposal that is intended to protect privileged information provided to the agency, to postpone its rulemaking pending action in the Senate on legislation to accomplish similar goals.

    A recent CFPB proposal seeks to clarify that protections such as the attorney-client privilege would not be waived when information is provided to the CFPB and when such information is transferred from the CFPB to other federal or state agencies.

    However, there is a concern, CUNA said, because the CFPB does not have statutory authority to ensure that will be the case.

    Legislation that would provide these types of protections passed the House earlier this year, and similar legislation could soon be considered in the Senate.

    CUNA Deputy General Counsel Mary Mitchell Dunn in a comment letter said it is concerned that the CFPB's intent to address privacy issues on its own could encourage the Senate not to act, "thus foregoing an important opportunity to provide a stronger statutory basis for the protection of privilege than the CFPB's rule would afford, given the current uncertain legal foundation."

    The letter also noted that the CFPB may not have the statutory authority to alter rules that generally govern when privileged information is and is not protected. "This doubt will persist even in the face of regulatory amendments that purport to have the force of law, even though that is the agency's objective by seeking public comments," the letter added.

    If new privacy protections are, eventually, implemented, CUNA encouraged the CFPB to set parameters on the kinds of materials that the agency will request from financial institutions that it supervises and to first seek information that is not privileged.

    For the full comment letter, use the resource link.

    Wash. Post: CU attracts young members with iTunes

    WASHINGTON (4/18/12)--Money One FCU in Largo, Md., has been attracting younger members for two years through a program that offers free iTunes downloads, The Washington Post reported Monday.
     
    Through its Kasasa Tunes program, members can choose between getting 3% interest on their checking accounts or $10 in iTunes downloads every month.
     
    There are no account balance minimums or monthly fees involved in the program, but members must use their debit card a minimum of 10 times per month and sign up for online banking to receive iTunes.
     
    Because growth in the credit union's checking account activity was stagnant, Money One had to take a different approach, Debbie Connors, Money One president/CEO, told the Post.   
     
    She decided to use BancVue, an Austin, Texas, company that in 2009 created the Kasasa Rewards program to help credit unions and community banks level the competitive landscape with huge banks such as Bank of America and JPMorgan Chase, the newspaper said. 
     
    Having a national brand such as Kasasa helps credit unions and community banks garner more leverage with giant banks, Gabe Krajicek, BancVue CEO, told the paper.
     
    Participating credit unions and other financial institutions pay a monthly licensing fee to access Kasasa software, and also provide some of the advertising budget to BancVue, the Post said.
     
    To read the article, use the link.

    Inside Washington

    Luetkemeyer/Scott bill would address ATM disclosure problems

    WASHINGTON (4/18/12)--Legislation that would ease current ATM fee disclosure regulations "will protect credit unions and other ATM operators from frivolous lawsuits while at the same time maintaining important consumer protections," Credit Union National Association (CUNA) President/CEO Bill Cheney said.

    The bill, H.R. 4367, was introduced by Reps. Blaine Luetkemeyer (R-Mo.) and David Scott (D-Ga.) on Tuesday.

    Regulation E currently requires credit unions and other financial institutions that provide ATM services to display a notice on the ATM that a fee will be charged. More detailed ATM fee information must also be provided before the transaction is completed, either by showing it on the ATM's screen or providing the ATM user with a small printed disclosure before the consumer is committed to paying the fee.

    Under the legislation, ATMs would only be required to display the ATM disclosures on a screen, and give ATM users the choice of opting in to such a fee. The physical ATM fee disclosure notice requirement would be eliminated.

    Cheney thanked the congressmen for offering the legislation, calling the bill common sense legislation that will reduce regulatory burden without harming ATM users. He said CUNA looks forward to working with them as the bill makes its way through Congress.

    ATM disclosure requirements have caused issues for credit unions and other financial institutions. CUNA has noted that outside notices on ATMs are, in some cases, being intentionally removed or destroyed, without the financial institution's knowledge, and that pictures are then taken of the ATM to show noncompliance. Some ATM users may then use this as evidence of apparent non-compliance and as grounds for lawsuits, and the number and cost of these lawsuits continues to climb. CUNA recently estimated that the total number of these lawsuits could be in the hundreds.

    CUNA this week communicated with the Consumer Financial Protection Bureau on the ATM issue, telling that agency that it has "more than sufficient authority" under the Dodd-Frank Wall Street Reform Act and the Electronic Fund Transfer Act to amend Regulation E and eliminate the requirement for on-machine ATM fee disclosure notices. (See related April 17 News Now story: CUNA details how CFPB could address ATM issue)

    Lawsuits brought against credit unions and banks alleging violations of the ATM-fee disclosure regulations are on the increase again, this time on the West Coast with the latest filed against a credit union in Washington state. (See related News Now story: ATM fee-notice lawsuits spread to West Coast)

    Missouri CUs raise $217,247 for children's hospitals

    ST. LOUIS (4/18/12)--Missouri credit unions raised $217,247 in 2011 for Credit Unions for Kids, which benefits the Children's Miracle Network Hospitals, said the Missouri Credit Union Association (MCUA).
     
    Credit Unions for Kids is a nonprofit collaboration of credit unions, credit union chapters, leagues and business partners nationwide that raise funds for the hospitals, the credit union industry's charity of choice. 
     
    "We collect donations at each of our seven branches and have made Children's Miracle Network our primary philanthropic organization," said Kyle Hudson, business development officer for United Consumers CU in Kansas City. "Our mission to help local children and families gives us pure joy and a sense of accomplishment when we hear the stories of young ones who have benefited from Children's Miracle Network's good deeds."
     
    Missouri credit unions have donated more than $2.8 million since the program's inception in 1996. Last year, 62 credit unions in the state took part in fundraising activities that included trivia nights, golf tournaments, bake sales, silent auctions and employee casual dress days.
     
    "This is the third year in a row that we have been honored as a top contributor out of all Missouri credit unions; however, the greatest award is being able to continue our credit union philosophy of people helping people in our community," said Frank Nelson, president/CEO, 1st Financial Federal CU, Wentzville. "We are grateful to have these outstanding hospitals to help our area children when they need it the most."
     
    Missouri is home to five children's hospitals that use donations to adopt life-saving equipment, perform breakthrough research and provide charitable medical care for children. Missouri ranks 12th in the nation for donations raised by credit unions per state, said MCUA.
     
    "Credit unions are always looking for ways to give back to their communities, and Children's Miracle Network provides a phenomenal opportunity to do so," says Mike Beall, MCUA president/CEO.

    Hawaii First FCU joins CDFI leaders program

    WASHINGTON (4/18/12)--Hawaii First FCU, Kamuela, Hawaii, is among the 16 native community development financial institutions (CDFIs) taking part in the CDFI Fund's Leadership Journey, a capacity building initiative designed for Native American organizations.

    The program, which the CDFI Fund has named The Leadership Journey: Native CDFI Growth & Excellence, is a two-year training program that aims to help participating organizations develop their staff and organization.

    Representatives of the 16 organizations met earlier this year in Albuquerque, New Mexico, to discuss a myriad of business issues, including staff and human resource management, finance, sustainability practices, and succession plans. Three other similar meetings are scheduled for this group, and the first of those meetings is scheduled to be held in New Orleans, La., between May 7 and 11 of this year.

    Other participants include the Community Development Financial Institution of the Tohono O'odham Nation, the Citizen Potawatomi Community Development Corporation, the Council for Native Hawaiian Advancement, the Four Bands Community Fund, the Hopi Credit Association, the Indian Land Capital Company and the Karuk Community Loan Fund, Inc. The Lakota Fund, Mazaska Owecaso Otipi Financial, Inc., Native Community Finance, the Navajo Partnership for Housing, Inc., Niijii Capital Partners, Inc., the Northern Shores Loan Fund, Inc., the Northwest Native Development Fund, and Salt River Financial Services Institution are also taking part, according to the CDFI fund.

    For the full CDFI Fund release, use the resource link.

    Market News

    MADISON, Wis.  (4/18/12)

    News of the Competition

    MADISON, Wis. (4/18/12)

    CFPB can cut CU reg burden on TILA/RESPA form, says CUNA

    WASHINGTON (4/18/12)—As the Consumer Financial Protection Bureau (CFPB) moves to the final stages of its project to integrate Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) disclosures into a single form, the Credit Union National Association (CUNA) has provided a number of specific recommendations the bureau could take to reduce the regulatory burdens faced by credit unions.

    In a letter to CFPB Director Richard Cordray, CUNA Senior Assistant General Counsel Jared Ihrig said CUNA supports the CFPB's work to consolidate the mortgage disclosures currently required by TILA and RESPA, and added that credit unions will welcome the elimination of the duplication which has been inefficient for consumers and industry for the past many years.

    However, CUNA said, the CFPB's stated goals of speeding up the lending process to benefit the consumer and improving the accuracy and clarity of disclosures for consumers are admirable objectives, but added that it will be difficult to achieve both goals through the same regulatory change.

    The mortgage form changes will require significant systems, software and operational changes within credit union mortgage lending departments, and the costs of most of these changes will likely be passed on to consumers, CUNA said. "These costs will significantly increase the cost to lenders of originating mortgage loans, and ultimately, the consumer will face these increased costs in either rate or fee adjustments, which will have the end result of further tightening the availability of mortgage credit for consumers," the letter adds.

    CUNA in the letter requested that the CFPB give credit unions and other financial institutions at least one year to comply with the TILA/RESPA changes, once they are finalized. The agency should also attempt to minimize implementation costs for credit unions and exempt credit unions from portions of the regulation, where possible.

    The letter also urged the CFPB to remove parts of the proposed changes that would require lenders to maintain "standardized, machine-readable" electronic versions of the proposed loan estimate and settlement disclosure forms that are provided to consumers, and recommended that the CFPB not expand its definition of "finance charge" to include currently excludable real estate and other charges.

    The CFPB continues to work toward final versions of the combined TILA/RESPA forms, and the agency is required to publish a proposed rule and proposed disclosure forms by July. The regulations are scheduled to be finalized by Jan. 21, 2013.

    For the full CUNA comment letter, use the resource link.

    Study: Gas retailers not passing fee savings to consumers

    WASHINGTON (4/18/12)--Although gas retailers in the U.S. are saving $1 billion a year through the subsidy provided by the Dodd-Frank Act's interchange fee provision, they are not passing the savings on to consumers, according to a new study from the Electronic Payments Coalition (EPC).
     
    The interchange amendment to the Dodd-Frank Act has seen interchange rates reduced by 70% for debit card payments for gasoline, said EPC, which is a coalition of banks, credit unions and card networks opposed to the interchange rules. Dodd-Frank capped what retailers pay to accept debit interchange beginning last October.
     
    Nearly 134 billion gallons of gas were sold in 2011, with debit cards used to purchase 48 billion gallons, said EPC, citing statistics from the U.S. Energy Information Administration.  "However, there continues to be no evidence that retailers are passing along savings from this windfall--even at gas stations, where debit is the overwhelmingly most popular form of payment," said EPC.
     
    Half of all non-cash payments for fuel are made with debit cards, which account for 36% of all payments including cash, said the coalition, citing new research by the Phoenix Marketing International.  Among households with income of less than $50,000, debit card share of gas station transactions was twice as high as that of credit cards.
     
    "Given that Congress capped debit card interchange fees at around 23 to 24 cents, gas stations are only paying around one to two cents per gallon on a $50-$75 tank of gas. This is roughly 70% of what they were paying six months ago in debit interchange fees--with no evidence of lower prices as a result," said EPC.
     
    "Wherever Congress meddles in an industry debate over who pays what, consumers never win," said Trish Wexler, EPC spokeswoman. "One side gets a leg up and keeps its windfall, while consumers end up footing the bill." She added that "no one is surprised to see that gas retailers are keeping billions of dollars for themselves, while their customers continue to be punished at the pump. Americans should go to their gas stations and demand what's theirs--a discount for debit."
     
    Consumers can compare the costs per gallon and the interchange rates for credit and debit purchases with its Debit Discount for Gas Calculator to determine the amount of savings retailers should be passing on to them at the pump (Use the link to calculate.)  EPC said the average 16 gallon fill-up paid with a debit card at today's gas prices could receive four to five cents per gallon as a discount.
     
    EPC noted that cash discounts are more prevalent in gas retailing, while discounts for debit--the area the interchange amendment is supposed to subsidize--are virtually non-existent. "Unlike a debit discount, cash discounts lure customers away from the convenience of the pump and into the convenience store, where they are lured into buying items with high mark-ups," Wexler said.
     
    The Credit Union National Association (CUNA) has maintained that capping interchange fees would harm consumers by driving up costs of debit cards, limiting their options, and harming competition and technological innovation. Consumers have not seen any pricing benefits for products and services promised by merchants when they argued for the government-set cap, said CUNA.

    MBL roundup: Landscaper--CU acted when banks would not

    MADISON, Wis. (4/18/12)--More letters to the editor about member business lending (MBL) are rolling in from small businesses and credit unions, and one Alabama credit union has put its case for raising the MBL cap on video by interviewing small businesses it has helped. Here's a recap of those efforts.
     
    A landscaping business owner, in a letter the Des Moines Register (April 17) told how Cornerstone CU made a difference to him and to his employees with an MBL and why credit unions should be allowed to increase their MBL cap to 27.5% of assets from 12.25%.
     
    "When I dreamed of starting my landscaping business, I needed a loan," wrote Martin Ortiz Rangel of  Landscapes by Martin, in Des Moines.  "I went to a bank and was denied.  I didn't have bad credit--I just didn't have any credit.
     
    "A credit union was the only financial institution willing to take a chance on me to build my credit history," Rangel said. "I could tell they believed in me and valued my business plan. I haven't let them down. Landscapes by Martin is now a thriving local business," Rangel said.
     
    He said Cornerstone CU and others are at the cap and may not be able to serve other small business owners unless the Credit Union Small Business Jobs Bill is passed in Congress.  "To each of the employees I've been able to hire, the jobs I've created matter, and those jobs are a direct result of the faith Cornerstone put in me."  He noted raising the lending cap would be good for Iowa's economy.
     
    In Alaska, a letter written to the Alaska Dispatch (April 17) by Al Strawn, CEO of Matanuska Valley FCU in Palmer, Alaska, asks why banks are spreading misinformation about  credit unions wanting expanded lending
     
    Strawn pointed out that "during the recent financial crisis when banks reduced their lending to businesses and individuals by 15% nationally, credit unions recognized the critical need to continue supporting businesses and individuals and increased their lending by 45%. Thus, businesses and jobs were saved. Credit unions have been taking such action for over 100 years."
     
    He suggests that "deep down inside, bankers resent credit unions because of our mission of service."  As for the vote on Senate Bill 2231, "it will be very interesting to see if Congress votes for more service for members or more profits for banks."
     
    Listerhill CU, based in Muscle Shoals, Ala., has produced a video about what it is doing to help small businesses.
     
    In the video, several business owners tell how Listerhill helped them.  Keith and Debbie, owners of All American Swim Supply noted they had approached several different national banks but none would take them seriously because the banks didn't want to finance merchandise.  However, Listerhill "caught our vision. They understood and related to what we were trying to do." Today, All American Swim Supply is among the top 10 largest swim shops internationally.
     
    For their story, and others, check out the video by using the link.
     
    The Credit Union National Association said that if Congress supports the Credit Union Small Business Jobs Bill, it would help inject $13 billion into the economy in loans for small businesses and thus help create 140,000 new jobs, at no cost to the taxpayer.

    CU System briefs

    CU System briefs

    delete this please

    Cheney provides national insights at MnCUN meeting

    BLOOMINGTON, Minn. (4/19/12)--Offering a national perspective on the credit union movement's current issues, Credit Union National Association (CUNA) President/CEO Bill Cheney provided Minnesota credit unions insight into successes and opportunities during the Minnesota Credit Union Network's (MnCUN's) annual meeting April 13-14 in Bloomington.
     
    Credit Union National Association President/CEO Bill Cheney speaks at the Minnesota Credit Union Network's annual meeting April 13-14.
    Speaking on topics including membership growth, member business lending (MBL) legislation, supplemental capital, and growing regulatory burden, Cheney encouraged attendees to remain engaged credit union champions and advocates.
     
    Credit unions experienced tremendous growth in 2011 and have an opportunity to further distinguish themselves in communities nationwide and on Capitol Hill, Cheney noted. He explained that credit unions' legislative initiatives now are more aggressive and focused on furthering the issues important to the movement, regardless of potential backlash from the banking industry.
     
    "For too long, we let the bankers set the tone," Cheney said. "We're not going to do that anymore."
     
    Cheney outlined how MBL legislation would distinguish credit unions as a strong political force to be respected. Legislation being considered in the U.S. Senate would raise credit unions' MBL cap to 27.5% of assets from 12.25%. The bill would allow credit unions to provide more capital to small businesses nationwide.
     
    "MBL isn't a bank versus credit union issue. It's about small businesses. The passage of this legislation is important--even if your credit union has never made a business loan and never plans to make a business loan," Cheney said.
     
    During the Minnesota Credit Union Network's (MnCUN) annual meeting, Bill Cheney (left), Credit Union National Association president/CEO, provided career insight, wisdom and advice to young credit union professionals who are a part of MnCUN's Crew group. (Photos provided by the Minnesota Credit Union Network)
    CUNA and credit unions are urging Congress to increase the MBL cap to open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.
     
    Cheney also outlined CUNA's efforts to lessen credit unions' compliance burden by representing their interests in conversations with several regulatory agencies, including the National Credit Union Administration and the Consumer Financial Protection Bureau.
     
    Throughout the weekend, Cheney participated in conference events focused on further developing Minnesota credit union professionals and volunteers. During a luncheon on Friday, he sat on a panel of cooperative leaders who discussed how credit unions and cooperatives can more effectively work together.
     
    Cheney stressed the importance of cooperatives developing mutually beneficial relationships that help members. He also cited CUNA's involvement with the National Cooperative Business Association and how their activities help further the development of the cooperative movement.
     
    Also, Cheney provided wisdom, advice and insight to young professionals during a Crew event held in conjunction with MnCUN's annual meeting. The Crew is Minnesota's informal networking group for credit union professionals age 35 and younger looking to grow in their career. Cheney was part of a network of experienced credit union professionals who answered Crew members' questions and provided insight into how young adults can develop and advance their careers.

    Market News

    MADISON, Wis. (4/19/12)

    CUs in full swing for financial literacy month

    MADISON, Wis. (4/19/12)--Credit unions and credit union organizations nationwide are doing their part to teach their members the value of good financial habits as part of April's Financial Literacy Month.
     
    The Pennsylvania Credit Union Association recently asked readers of its Life is a Highway newsletter (April 13), "How do you keep young members interested in your credit union?" From the 44 responses, offering incentives for savings deposits was the most popular selection, followed by Youth Week/Month special activities, and Youth Clubs. The results were:
    National Credit Union Youth Week and the National Youth Saving Challenge are two events sponsored by the Credit Union National Association (CUNA) in celebration of National Financial Literacy Month.
     
    Credit Union Youth Week is next week, April 22-28. This year's theme is "Be a Credit Union Super Saver."
     
    The Student Life team at Generations FCU, San Antonio, hosted 71 students from San Antonio's Churchill High School for a Financial Scavenger Hunt through the credit union's historic downtown branch. (Photo provided by the Texas Credit Union League)
    National Youth Saving Challenge is held during the entire month of April. Last year nearly 146,000 young members deposited $28.5 million into their saving accounts during National Youth Saving Week---with 9,058 new accounts.
     
    Lafayette (La.) Schools' FCU incorporated the Youth Week "Super Savers" theme throughout its branches. With the help of adult marketing postcard art from CUNA, the credit union developed a statement insert promoting its youth rewards savings account to parents and grandparents. Lafayette youth savings account members received a youth week invitation and blank super-hero mask to decorate. The credit union is offering a free coin counter machine, rewards for saving and giving away T-shirts for deposits of $25 or more. Kids can have their photos in costumes holding old-school cloth coin bags. Some of the credit union's front line staff also is wearing own super hero capes.
     
    The Greater Chautauqua FCU, Falconer, N.Y., is again hosting its annual April Youth Month Challenge. The financial institution has about 1,000 child members who can participate in the contest, according to  Kelly Haaksma, Greater Chautauqua FCU chief executive officer. Young members can take three fitness, savings, reading and community challenge activities. Once the children complete the challenges, they will be eligible to enter a drawing for an Xbox 360 with Kinect or a Playstation Vita. In total, there are more than $2,000 in cash and prizes, such as an iPod Touch, bicycles and passes to a Splash Lagoon water park.
     
    In recognition of Financial Literacy Month, Extra CU, Warren, Mich., is offering interactive discussions on understanding credit reports and money management for college bound students during April.
     
    The Student Life team at Generations FCU hosted 71 students from San Antonio's Churchill High School for a financial scavenger hunt through the credit union's historic downtown branch. Students got a behind-the-scenes view of the day-to-day operations of the credit union, working with frontline tellers, visiting the vault and drive-thru teller pod and meeting with Tim F. Haegelin, Generations FCU president/CEO (Texas Credit Union League LoneStar Leaguer April 17).
     
    Generations FCU also will partner with every college in the Alamo Community Colleges district to bring financial literacy classes to their students. MyGenLife will teach more than 25 classes during April at San Antonio College, Palo Alto College, Northeast Lakeview College, St. Philip's College and Northwest Vista College.
     
    In recognition of Financial Literacy Month, Emery FCU, Cincinnati, launched MyMoney, its own financial literacy program. Emery's National Financial Literacy Month celebration--and ongoing MyMoney program--will address financial literacy for adults and children through videos, online and offline content, and workshops and seminars.

    Akcelerant teams with ESA on collateral insurance

    MALVERN, Pa. (4/19/12)--Akcelerant, a provider of connected software technology, and Evans, Simpson and Associates (ESA) have entered a partnership to develop integration between ESA's collateral protection insurance services (CPI) and Akcelerant's multiple product lines.
     
    Joint customers using either the Akcelerant Framework or Akcelerant Elements for collections will soon be able to administer their CPI program from one centralized system.
     
    Through the ESA partnership, Akcelerant's financial institution customers can automate CPI claims management, view lender-placed and borrower insurance details, generate reports, and more from a single, real-time interface while simultaneously managing collections with the Akcelerant Framework or Akcelerant Elements.

    MnIPC supports CFC Technology's Mobile Deposit

    MINNETONKA, Minn. (4/19/12)--Minnesota Item Processing Corp. (MnIPC), a check processor serving credit unions and financial institutions, is now supporting CFC Technology's Mobile Deposit solution.
     
    CFC's Mobile Deposit solution allows consumers and small-business owners to deposit checks into their checking or savings account by taking a photo of the front and back of their checks with their smartphones, then submitting the images to their financial institution through a secure smartphone software application. 
     
    Credit unions will benefit from Mobile Deposit's ability to reduce check transactions at the branch, strengthen existing member relationships and attract new deposit members, the companies said.

    Tech Council paper looks at online account access

    MADISON, Wis. (4/19/12)--Credit unions that seek to meet members' needs for electronic account access must keep pace with the emergence of the mobile lifestyle, according to a new CUNA Technology Council white paper.
     
    The Future of Electronic Account Access: Adapting to the Mobile Lifestyle is based on information gathered from technology leaders at four credit unions and five experts from companies that provide financial services for credit unions.
     
    The paper explores the mobile lifestyle, in which consumers shift from one electronic device to another as they move from place to place and task to task. Industry experts say credit unions who fail to meet the needs of these members may risk losing their relationships with members.
     
    The report identifies account access options that credit unions should be prepared to offer now and in the near future. Online banking is already an essential service, for example, while mobile banking is likely to become a necessity soon, says the paper.
     
    The experts who shared their opinions and research in the white paper predict that game-changing technology will continue to emerge, which means credit unions cannot afford to become complacent.
     
    Daniel Steere, director of consumer insights at Fiserv, Brookfield, Wis., said Fiserv research into consumer behavior reflects broad trends in three categories that impact the financial sector, especially financial institutions. They are:
    1. Consumer electronic behavior is evolving. "Think about the proliferation of devices: iPhones, iPads, smartphones, tablets, PCs, plasma screen televisions," Steere said. "That's driving so much new and different consumer behavior." As consumers explore their electronic options, their behavior is likely to continue to be shaped by the capabilities of their devices.
    1. Internet connectivity is becoming inescapable. "There's a blurring of lines between being online and being offline," Steere said. "There's going to come a point in time where you're never really offline. Everyone is going to be connected to something that's connected to the Internet."
    1. Societal trends and electronic connections are changing human interactions. Conversations are changing from face-to-face, handshake encounters to electronic interactions through Skype, texting, video chat, Web conferences and other electronic conversations. Digital relationships can become as important as friendships that rely on person-to-person contact. Credit unions need to monitor these "macro trends" as they ponder their products and their connectivity.

    News of the Competition

    MADISON, Wis. (4/19/12)

    NCUA report notes CU burden in diversity standards

    ALEXANDRIA, Va. (4/19/12)--The administrative burden on credit unions will be taken into account as new diversity standards are developed, since "credit unions face some challenges in developing diversity policies and programs," the National Credit Union Administration's (NCUA) Office of Minority and Women Inclusion (OMWI) said in its yearly report to Congress.

    Section 342 of the Dodd-Frank Wall Street Reform Act requires the NCUA and other federal regulators to create standards to assess the work force diversity policies and practices of their regulated institutions, and OMWI, which began its work last year, is in charge of developing the NCUA's diversity policy. The NCUA and other regulators are still developing these policies and rules on how they will develop these standards.

    The Credit Union National Association (CUNA) in a letter sent to the NCUA late last month urged the agency to implement diversity standards "in a manner that would minimize the information gathering and reporting burden on credit unions." (See related March 28 News Now story: Avoid CU burdens in diversity policy: CUNA to NCUA)

    OMWI in its annual report noted that credit unions have suggested applying the diversity standards only to "large credit unions with sufficient resources."  The agency said that some credit unions may face challenges in developing their own diversity policies and programs, as their limited number of employees, geographic location, and field of membership may limit their opportunities to truly diversify their own staff.

    The office added credit unions have offered various suggestions to NCUA on how to implement the diversity policy assessment standards, such as developing diversity best practices and model diversity standards that credit unions could use as guides, and allowing credit unions to perform self-assessments of their own diversity practices.

    The NCUA also said credit unions have requested NCUA use Equal Employment Opportunity Commission data to gauge credit union diversity compliance, in some cases.

    OMWI also noted that its own efforts to work with a more diverse group of outside contractors have had positive results, with the NCUA's changes to procurement practices resulted in the amount of contracting dollars that were awarded to women- and minority-owned businesses doubling between 2010 and 2011.

    For the full NCUA report, use the resource link. See particularly Part III on "Regulated Entities."

    Jenkins to receive AACUC lifetime achievement award

    MADISON, Wis. (4/19/12)--Shirley Jenkins, a long-time active supporter and advocate in the credit union industry, was named the 2012 Pete Crear Lifetime Achievement Award-winner by the African-American Credit Union Coalition (AACUC).
     
    The award is presented annually to recognize a credit union professional or volunteer whose career best embodies the AACUC's mission to "increase the global credit union movement's strength by adding the focused perspective and energy of credit union volunteers and professionals of African-American and African descent."
     
    Jenkins serves as board secretary/legislative chair at the $1.66 billion asset Municipal CU (MCU) in New York City.
     
    In 1983, she was elected to the MCU board of directors, and later became the first female president in the history of MCU.
     
    She was inducted into the Credit Union Association of New York's Hall of Fame in 2005 for her work in promoting the credit union movement locally, nationally and internationally.
     
    Jenkins was a founding member of AACUC and served as vice chair of its board of directors.  
     
    Jenkins will receive the award at a dinner Aug. 3 during the 14th Annual AACUC Conference in Charleston, S.C.

    CFA asks senators to support MBL cap increase

    WASHINGTON (4/19/12)--The Consumer Federation of America (CFA) has joined the list of organizations that support a member business lending (MBL) authority increase for credit unions, telling senators that the Small Business Lending Enhancement Act of 2012 (S. 2231) would "expand access to affordable credit for small businesses and help strengthen local marketplaces that serve consumers well."

    S. 2231, which is expected to come up for a Senate vote soon, would increase the MBL cap from 12.25% of assets to 27.5%. The Credit Union National Association (CUNA) has estimated that lifting the MBL cap from 12.25% to 27.5% of assets would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.

    CFA Executive Director Stephen Brobeck in a letter to members of the Senate said MBL cap increase legislation "would be particularly beneficial at this time," and would "benefit consumers both by promoting competition and innovation in local marketplaces and by strengthening credit unions."

    Moreover, to the extent new jobs were created, some consumers would gain additional income, the letter said.

    "Credit unions are especially deserving of this opportunity" and "have a strong record of serving consumer and communities, especially moderate-income areas that have been particularly hard-hit by the recession." Credit unions also "have had much past success in providing low-cost, sustainable credit to consumers and small businesses," and would "be able to invest in loans that likely will increase credit union earnings, capital contributions, and overall safety and soundness, directly benefitting all credit union members," if greater MBL authority is given to them, the letter added.

    The National Cooperative Business Association (NCBA) earlier this month asked members of the cooperative community to communicate the crucial funding needs of small businesses, and the importance of supporting MBL cap increase legislation, to members of the U.S. Congress.  A number of other groups have also stepped up to back credit unions and an MBL cap increase. (See related April 4 News Now story: NCBA urges members to call for MBL bill support)

    Those organizations include the National Council of Textile Organizations, the American Small Business Chamber of Commerce, the National Farmers Union, the National Association of Realtors, the Realtors Land Institute, the Small Business Majority, the Society of Industrial and Office Realtors, the CCIM Institute, Americans for Tax Reform, the American Consumer Institute, the Hardwood Federation, the Institute of Real Estate Management, NCB Capital Impact MultiFunding, the National Association of Home Builders, the National Association of Professional Insurance Agents, AMT--The Association for Manufacturing Technology, the U.S. Women's Chamber of Commerce, and the Heartland Institute.

    Inside Washington

    CFPB to target credit discrimination

    WASHINGTON (4/19/12)--The Consumer Financial Protection Bureau (CFPB) will "combat unlawful, discriminatory practices--including those that have an illegal disparate impact on protected borrowers," and examine mortgage lending, student lending, auto lending, and credit card practices for evidence of lending discrimination, the agency said on Wednesday.

    The CFPB in its bulletin 2012-04 said it would continue to adhere to the fair lending principles outlined in Regulation B, which implements the Equal Credit Opportunity Act (ECOA). ECOA bans creditors from discriminating against credit applicants based on their race, color, religion, national origin, sex, marital status, and other select factors.

    In the bulletin, the CFPB said it would employ the legal doctrine of "disparate impact" as it exercises its supervision and enforcement authority to enforce compliance with the ECOA and Reg B.

    According to the CFPB, lending policies that seem evenhanded but have a disproportionate, negative effect on a group that is protected under ECOA are said to have a "disparate impact," and "are unlawful unless they meet a legitimate business need that can't be met by an alternative that has a less disparate impact."

    "Discrimination that disparately impacts borrowers in violation of the law hurts consumers and can threaten the economic stability of our communities," and "that is why the law has long recognized this form of unlawful credit discrimination," the CFPB said.

    For the CFPB release, use the resource link.

    New small CU deputy director is appointed

    ALEXANDRIA, Va. (4/19/12)--Credit union veteran Martha Ninichuk will take on the role of deputy director of the National Credit Union Administration's (NCUA) Office of Small Credit Union Initiative (OSCUI) on Sunday, the agency has announced.

    Ninichuk most recently served as the Michigan Credit Union League's director of cooperative initiatives, and has also worked with the Maryland and D.C. Credit Union Association.

    Her work has focused on helping credit unions provide innovative financial products and services to underserved and low-income populations, addressing governance issues, and developing financial products, the NCUA noted.

    She also led Warren, Michigan-based St. Cletus CU.

    NCUA Chairman Debbie Matz said Ninichuk's "mix of small credit union management and broad credit union field work is ideal for this hands-on position" and added that her "wide range of experiences, from running a small credit union in Michigan, to consulting for two state leagues, to international credit union development projects, will also bring fresh perspectives to OSCUI's work."

    For the NCUA release, use the resource link.

    New LCUL member biz council announces 50 members

    HARAHAN, La. (4/19/12)--The Louisiana Credit Union League's new Member Business Services Council (MBSC), which was launched in January, already has 50 members, the league announced.
     
    The MBSC was developed through collaborative efforts of the league and serves credit union professionals in the state who offer member business services such as business lending or are considering offering the services (eNews April 18).
     
    Members are paid staff from affiliated credit unions, credit union service organizations, other credit union-related organizations, and the league.
     
    Since January, the council, under the direction of its Advisory Committee, has developed a members-only website with articles, regulatory guidance, sample documents and other resources, and a members-only e-mail listserv
     
    It also has hosted a webinar with Dennis Dollar on "Is Business the Business of Credit Unions?" and organized a face-to-face workshop, "Growing Your CU Business Services: Coaching Strategies for Sales & Service Success." The workshop will be presented this week in Baton Rouge by Kevin Neufeld of Fusion Performance Group and David Kovacs of Servus CU.

    Irish CU commission report calls for restructuring

    DUBLIN, Ire. (4/19/12)--Ireland's Commission on Credit Unions Wednesday announced its final report, which recommends the credit union movement there undergo a four-year voluntary restructuring process that would include mergers and transfers.
     
    Under the recommendation, a new Restructuring Board would facilitate the process by giving funding to approved credit unions to ensure they have enough money and to upgrade their systems (Irish Examiner and Irish Times April 18).
     
    A tiered regulatory framework would be phased in with less onerus requirements on smaller credit unions, said the commission, whose recommendations were announced in a press conference by Commission Chairman Prof. Donal McKillop.
     
    An operating work team would act as a catalyst, identifying strong credit unions that could act as anchors for other amalgamated credit unions. The decision to engage in the process would be up to each credit union, McKillop said.
     
    He pointed out that 60% of Ireland's population is in a credit union, but the movement had not developed to the extent that it had in the U.S., Canada and Australia. He said he envisioned a long-term consolidation process within the movement. 
     
    Most of the 51 credit unions that had insufficient funds for the required reserves level at the end of 2011 were smaller credit unions.
     
    The Irish Credit Union League (ICUL) said members of smaller credit unions will particularly benefit from the restructuring.
     
    ICUL CEO Kieron Brennan noted smaller credit unions that currently keep limited opening hours and services could offer a broader range of services and hours under the restructuring.
     
    Legislation incorporating the commission's recommendations will be published in late June.

    CUNA to AP: Europe's market impact hard to classify

    NEW YORK (4/19/12)--The impact of Europe's economy on the U.S. stock market isn't clear because so much is unknown, a Credit Union National Association (CUNA) economist told Associated Press Wednesday.
     
    The market is "really difficult to classify" at the moment, Mike Schenk, senior economist and vice president of CUNA's economics and statistics, told the world's largest news organization.
     
    "On one hand you hear about 'best day since whatever,' on the other hand you have days and weeks that don't look good at all," he said in the interview.
     
    The market has been volatile, with each report coming out of Europe swinging stock market indexes up or down, depending on the news, for the past two weeks.  After a first quarter of mostly gains, the 11 days of trading in the second quarter have fallen, reported AP.
     
    Dow Jones, Standard & Poor's and the Nasdaq indexes fell Wednesday after a report about bad loans at banks in Spain and an International Monetary Fund report on the state of the European economy.
     
    "We don't have clarity there, we don't know what's going to happen, and we don't know, if things don't go our way, what the ramifications will be," Schenk said. "You and I and the rest of the investment world will continue to worry about uncertainty and volatility for a good while."
     
    Major publications began picking up AP's report late Wednesday afternoon.  Among the first was Bloomberg's Businessweek.

    Franken, Pawlenty praise CUs at MnCUN meeting

    BLOOMINGTON, Minn. (4/20/12)--U.S. Sen. Al Franken (D-Minn.) and former Minnesota Gov. Tim Pawlenty  cleared their schedules for credit unions this past weekend to speak at the Minnesota Credit Union Network's (MnCUN) Annual Meeting & Convention. They praised credit unions for their service model and contributions to their communities and Minnesota as a whole.
    Click to view larger image U.S. Sen. Al Franken (D-Minn.), left, spoke with Credit Union National Association President/CEO Bill Cheney, center, during the Minnesota Credit Union Network's Annual Meeting April 13-14 about the need to increase business lending.
     

    Focusing on credit unions' member business lending (MBL) efforts, Sen. Franken applauded the movement for its commitment to making loans during the financial crisis. He noted that credit unions fulfilled the business lending need during the recession, even when banks pulled back on their lending efforts.
     
    Franken, who is a co-sponsor of the MBL bill in the Senate that would raise the cap on credit unions' MBL to 27.5% of assets from the current 12.25%, expressed his dedication to helping credit unions continue to boost their business lending activities.
     
    "I want you to be able to continue providing capital [to small businesses] and to continue doing that at a more robust rate by raising the cap," Franken said.
     
    In a meeting with Franken, Credit Union National Association (CUNA) President/CEO Bill Cheney thanked the senator for his support of the MBL bill and urged him to encourage his colleagues to also co-sponsor the bill.
     
    Click to view larger image Former Minnesota Gov. Tim Pawlenty told credit unions that small and mid-size businesses are the 'real juice of the economy' during the  Minnesota Credit Union Network's Annual Meeting. (Photos provided by the Minnesota Credit Union Network)
    During the conference, Pawlenty provided an insider's look at political campaigns and praised credit unions for the work they do for Minnesotans.
     
    "I'm a member of a credit union, and I'm a very satisfied member," Pawlenty said. "I hope you are proud to be working with and for credit unions. They do wonderful work." 

    He also provided credit unions insight into his run for president last year. The campaign trail provides for a very humbling experience as candidates work to persuade a small subset of the population to vote for them, he said. Pawlenty noted that in the end "a very small number of people in a very small number of states get to decide who the major candidates are."
     
    He also discussed the nation's unemployment challenges, budget problems, and the desire to build up the economy. The primary focus, he said, should be on strengthening small businesses, which are the engine of economic growth.
     
    "The answer resides not with career politicians but with entrepreneurs. The real juice of the economy is small and mid-size businesses," Pawlenty said.
     
    CUNA estimates that by raising the MBL cap, credit unions can help inject $13 billion into the economy for small business loans, which would create 140,000 new jobs, without costing the taxpayer a cent.

    Wanted: CU global brand identity

    MADISON, Wis. (4/20/12)--
    Click to view larger image Participants at World Council of Credit Unions' Build a Brand Workshop include, standing from left, Mary De Sousa, Canada; Lynda Savoit, U.S.; Trish Shermot, U.S.; Rich Harries, Canada; Mark Wolff, U.S.; Daniel McDougall, Australia; Denise Gabel, U.S.; Peter Challis, Australia; Sue Mitchell, U.S.; Nathalie LaChance, Canada; Paula Martin, Canada; and Suzanne Gendron, Canada; kneeling, WOCCU staffers Liliana Tangwell, left, and Tiffany Litscher.
    Credit unions have made great strides worldwide from consumers' disillusionment with banks during the recession. However, they still need to better articulate the credit union difference in a way that resonates with consumers, according to an international group gathered by the World Council of Credit Unions (WOCCU) to take the first step toward developing a global credit union brand.
     
    The Build a Brand Workshop, funded by a grant from Vancity CU, Vancouver, B.C., brought together 12 credit union and trade association executives from Australia, Canada and the U.S. earlier this week. Its goal was to identify best practices in current credit union messaging and work together toward a refreshed approach as part of the larger strategy to build a global credit union brand, said WOCCU President/CEO Brian Branch.
     
    "We have learned a lot about changes in consumer preferences, and our members around the world are adapting their messages to today's changing market," Branch said.
     
    In addition to Branch and WOCCU staff, participants included: 
    Click to view larger image Peter Challis, left, explains marketing challenges Australia credit unions face to Canada's Nathalie LaChance, and World Council of Credit Unions President/CEO Brian Branch.
    The session was moderated by Maya Bourdeau and Jiao Zhang, partners of consulting firm Attune LLC.  The group told of these challenges facing credit unions:
    Click to view larger image Credit unions need to have a clear voice and clear choice, explained Canada's Mary De Sousa at the World Council of Credit Unions' Build a Brand Workshop. (Photos provided by the World Council of Credit Unions)
    Changing consumer behavior is always a challenge, and one made even more complicated by the complex process of changing financial institutions, said Bourdeau.  "People need a compelling reason to switch financial institutions," Bourdeau said, adding, "There is a distinct difference between awareness and action. Action occurs when it can be easily accomplished."
     
    Participants agreed, also citing a need for clear, simple articulation of the credit union difference presented as a benefit to consumers.  "In a world where banks hold us for ransom, we need to have a voice and choice," said First Ontario's De Sousa, herself a former banker.
     
    Bourdeau advised participants to keep their marketing consumer-centric, pitch a solid benefit and choose an engaging emotional hook in their explanations of the credit union difference.  If a messaging strategy incorporates those attributes, the credit union difference has a better chance of resonating with more consumers, including the Gen Ys.
     
    Results from the workshop and the next steps of the brand development process will take place during a session at WOCCU's World Credit Union Conference July 15-18 in Gdansk, Poland, during which the panelists will present the workshop's results.

    CFPB clarifies state reciprocity in MLO licensing

    WASHINGTON (4/20/12)--Consistent with the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act), a state may grant a transitional mortgage loan originator (MLO) license to an individual who holds a valid loan originator license from another state, according to a clarification issued by the Consumer Financial Protection Bureau (CFPB) Thursday.
     
    However, the CFPB also clarified that its regulations do not allow states to provide transitional licensing for registered but unlicensed loan originators who leave a credit union or bank to act as loan originators for a non-depository institution while pursuing a state license. 
     
    The CFPB inherited authority to enforce and implement the SAFE Act from the U.S. Department of Housing and Urban Development under the Dodd-Frank Wall Street Reform Act.  CFPB Director Richard Cordray said the Bureau is committed to working with states and the industry to make interstate transitions as smooth as possible for loan originators.

    Texas 12 'crashes' league annual meeting

    Members of the Texas 12--a Texas Credit Union League (TCUL) initiative for up-and-coming young credit union professionals under the age of 35--'crashed' the TCUL annual meeting Wednesday. (Photo provided by the Texas Credit Union League)
    FARMERS BRANCH, Texas (4/20/12)--Members of the Texas 12 talked about credit union issues with Texas Credit Union League (TCUL) President/CEO Dick Ensweiler Wednesday. The Texas 12 is a new TCUL initiative, involving up-and-coming young credit union professionals under the age of 35.
     
    "We are an aging movement and we need to attract a younger audience," Ensweiler told the group. "To successfully attract younger members, it's important that we have engaged young professionals serving in our movement"  (LoneStar Leaguer April 19).
     
    TCUL should not dictate what the Texas 12 does, but rather the group members should share their thoughts and ideas for making the credit union movement more relevant to young people, Ensweiler said.
     
    The league, in collaboration with the Filene Research Institute, created the Texas 12 to help catalyze change in the system and spark positive growth in the credit union community.
     
    The Texas 12 also will hold a planning session today, and throughout the three-day conference in Galveston, its members will attend educational sessions, social functions and network with veteran credit union leaders.

    The Texas 12 members are:
     

    CUNA chairman to Texas CUs: 'What you do makes a difference'

    "No matter your role at a credit union--you could be a hired strategist or an elected official--the highest form of gratification is to know that what you do makes a difference," Mike Mercer, CUNA chairman and president of Georgia Credit Union & Affiliates, told attendees of the Texas Credit Union League annual meeting Wednesday. (Photo provided by the Texas Credit Union League) 
    FARMERS BRANCH, Texas  (4/20/12)--The chairman of the Credit Union National Association  (CUNA) and several other speakers told Texas credit unions that they make a real difference for members at many levels, during the Texas Credit Union League (TCUL) annual meeting Wednesday.

    "If you're like most people serving in the credit union movement today, you likely discovered your credit union professional or volunteer career by accident," CUNA Chairman and President of Georgia Credit Union & Affiliates Mike Mercer told attendees (LoneStar Leaguer April 19).

    "I was supposed to be a rock star," Mercer said. "But I soon discovered I wasn't very good at it."

    Instead, Mercer went to college, studied finance, and by accident, discovered credit unions. "After college, I had planned to go to Wall Street, but I found my passion was credit unions," he added.

    "No matter your role at a credit union--you could be a hired strategist or an elected official--the highest form of gratification is to know that what you do makes a difference," said Mercer.

    Other speakers gave similar positive  messages. They included:

    CU System briefs

    CUNA FUSE--Branch Ops/Biz. Development School announced

    MADISON, Wis. (4/20/12)--CUNA FUSE--Branch Operations & Business Development School will be presented July 30 to Aug. 2 in Las Vegas, with the theme, "People, Passion and Process," said the Credit Union National Association (CUNA).
     
    The school provides credit union branch managers and business development professionals with an opportunity to meet and explore blended approaches to their specific credit union duties. Participants will discuss ideas to fuse responsibilities, and drive efficiency and growth.
     
    The theme centers on people to help professionals learn what motivates their staff; passion to push them to do more and make an impact in the future, and process to help their teams think like entrepreneurs and find the most efficient way to operate.
     
    "This school embodies what sets credit unions apart from other financial institutions," said Courtney Cantwell, manager of instructional design at CUNA. "The idea that sales and service are not competing ideals but components of the same cooperative spirit is distinctly a credit union value.  Every year we see branch managers and operational professionals leave more in tune with one another, and charged with an unmistakable enthusiasm for the credit union cause," she added.
     
    CUNA FUSE--Branch Operations & Business Development School will also feature a pre-conference event with international productivity expert, Neen James, to be held on July 29 in Las Vegas.  The pre-conference is designed to help credit union professionals focus attention and manage their time.  Neen will discuss topics such as:
    Use the links for more details about and registration information for the school and the pre-conference workshop.

    NCUA responds to CUNA: Agency can improve exam process

    WASHINGTON (4/20/12)--National Credit Union Administration (NCUA) Chairman Debbie Matz identified regulatory relief measures her agency is pursuing, in a letter this week to Credit Union National Association (CUNA) President/CEO Bill Cheney. Matz's letter was in response to a follow-up letter Cheney sent to the chairman after she appeared at the CUNA Governmental Affairs Conference in March.
     
    The CUNA Executive Committee met with Matz during the GAC. "I believe those present would agree that the meeting produced useful discussions," Cheney said Monday, "although we all realize that there are many issues yet to be resolved regarding regulatory burdens, examination concerns and others."
     
    Matz's letter indicates the NCUA will be pursuing a number of actions that CUNA urged on behalf of credit unions. They  include:
     
    Regarding the NCUA's review of its examination process, CUNA's Examination and Supervision Subcommittee hopes to meet regularly with NCUA's Director of Examination and Insurance Larry Fazio to develop and pursue recommendations for improvements. Also, CUNA will be closely monitoring developments in the areas addressed by the NCUA chairman's letter.
     
    "I believe the letter from the NCUA board chairman overall reflects an increased awareness on the part of the agency to the merits of the issues and concerns that CUNA, leagues, and credit unions have raised,"  Cheney said.  He added that CUNA welcomes the steps the chairman has laid out.
     
    In its meeting and communications with the NCUA, CUNA has urged the agency to direct examiners to take a number of actions that would result in a more effective and productive exam for credit unions as well as for the agency. Such steps include providing the authority that an examiner directive is based on and ensuring examiners refrain from aggressive tactics in their dealings with credit unions, which CUNA will continue to pursue.

    TCUF honors fin. literacy champions

    FARMERS BRANCH, Texas (4/20/12)--The Texas Credit Union Foundation honored the dedication, commitment and hard work of Texas' best financial literacy advocates with its annual FOCUS Awards.

    The awards were given during the Texas Credit Union League's 78th Annual Meeting & Convention in Galveston Wednesday (LoneStar Leaguer April 19).

    Honored were:
    Generations FCU was commended for collaborating with private and public schools, as well as colleges and universities to ensure that students of all ages have access to resources and to make smart financial choices. The credit union offers NerdWallet.com, an online financial literacy library, and its "No Suckers Here" employee-driven program that helps students in local high schools, colleges and universities understand basic financial concepts.

    The Fort Worth Chapter of Credit Unions earned accolades for sponsoring CU 4 Reality Fairs at two different local middle schools, reaching more than 300 students. Financial reality fairs give young people the opportunity to participate in a hands-on event that guides them through the personal financial management process, including budgeting, saving and investing in a simulated real-world environment.

    Balcaitis was recognized for being a dedicated advocate for improving the financial knowledge of young people. Under her direction, A+ FCU operated a Youth Financial Camp for the past two years. In her role as community education specialist, Balcaitis developed the "Business Proposal Challenge" for the credit union's first Youth Financial Camp in 2010. The goal of the challenge is to give campers hands-on experience with being an entrepreneur.

    For the 2011 camp, Balcaitis developed the "Great Money Race," an interactive board game that tests campers' financial knowledge and decision-making skills. In 2011, 117 young people attended the summer camp-- a 60% increase from the previous year.

    One dead, one injured in shooting in CU parking lot

    CHESTERFIELD, Va. (4/20/12)--One person is dead and another injured as a result of a shooting that occurred in the parking lot of Virginia State University FCU in Ettrick, Va.
     
    Police said Tyrail W. Hughes, 20, of Petersburg, Va., was fatally wounded after he and two other young men confronted a group of four males sitting on a curb near the $11 million asset credit union, said Chesterfield police Capt. David Pritchard (Richmond-Times Dispatch April 18).
     
    Hughes and his friends approached the second group of males, who felt threatened, resulting in a confrontation, Pritchard told the newspaper.
     
    An unidentified male from the second group then pulled a pistol and fired several shots, fatally wounding Hughes. A stray bullet struck an 18-year-old university student who was not involved in the confrontation and happened to be walking by, Pritchard told the paper.
     
    The unidentified student was treated at a local medical facility for a gunshot wound to his foot and released.
     
    Surveillance cameras in the area captured the entire incident, Pritchard told the paper. Investigators are reviewing that footage to identify the participants, he added.

    CU remittance concerns aired at D.C. symposium

    WASHINGTON (4/20/12)--Credit union concerns regarding the Consumer Financial Protection Bureau's (CFPB) remittance transfer regulations were laid out at a symposium held this week in Washington, as the Credit Union National Association (CUNA) underscored that credit unions continue to have many compliance concerns regarding the remittance transfers final rule, especially with "open network" transfers.

    CUNA also raised its continuing opposition to the rule with senior CFPB staff in a meeting at CUNA April 18.

    The day-long symposium was hosted by Appleseed Network, a public interest group that advocated for strong consumer protections on remittance transfers. Staff from CUNA, the World Council of Credit Unions and the National Federation of Community Development Credit Unions were among those in attendance. Representatives from other financial associations, payment companies, law firms, non-profits, and consumer groups also took part in the symposium.

    A new remittance rule that was adopted by the CFPB earlier this year would require remittance transfer providers to disclose the exchange rate, all fees associated with a transfer, and the amount of money that will be received on the other end. Remittance transfer providers will also be required to investigate disputes and fix mistakes. The rule will become effective on Feb. 7, 2013, and will impact U.S.-based credit unions that provide consumers with international electronic funds transfer services.

    During the symposium, CUNA Regulatory Counsel Dennis Tsang said CUNA continues to support regulatory flexibility that would allow credit unions to continue to offer remittances and complement the many financial services and financial literacy programs that credit unions provide to consumers and communities.

    Tsang added that the final remittance rule would impose unsustainably high compliance costs and legal liabilities on credit unions that provide transfers through "open networks," such as international wire transfers and international automated clearing house transfers through unrelated correspondent institutions. CUNA has called for "meaningful relief" from the remittance rules, and continues to discuss this and other remittance issues with CFPB staff. (See related April 10 News Now story: Some CUs could be forced out of remittances: CUNA)

    The meeting also featured discussions on the final rule's requirements with CFPB staff, compliance and new disclosure changes, and future developments on remittance transfers and research.

    Market News

    MADISON, Wis. (4/20/12)

    News of the Competition

    MADISON, Wis. (4/20/12)

    Business coalition joins MBL push

    WASHINGTON (4/20/12)--A group that identifies itself as a coalition of conservative, libertarian and free-market organizations voiced support Thursday for increased member business lending for credit unions and encouraged lawmakers to vote in favor of legislation that would achieve that end.  The group called Sen.  Mark Udall's (D-Colo.) Small Business Lending Enhancement Act of 2012 (S. 2231) "a sound, free-market, deregulatory action that will create jobs, help small business, and assist veterans."

    S. 2231 would increase the MBL cap to 27.5% of assets from 12.25% of assets. The Credit Union National Association (CUNA) has estimated that lifting the MBL cap in this manner would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers. The legislation is expected to come up for a Senate vote soon.

    The coalition said they support S. 2231 or "any similar measure lifting the arbitrary cap on member business lending by credit unions."

    "As the economy is struggling to kick-start, this bill would give businesses much-needed capital to expand by simply raising the arbitrarily low lending cap," said the group's letter, that was widely distributed to lawmakers' offices on Capitol Hill.

    The big winners, the letter said, will be small business owning job creators; but the group also noted that military veterans and their families would also be helped by the measure, as two of the largest credit unions in the credit union system work primarily with servicemen, servicewomen and their families.

    The bill "would allow many well-capitalized smaller credit unions to expand business lending," and would not harm the banking industry, the coalition noted.,

    "Most of the new credit loans will almost certainly go to businesses that wouldn't get any loans at all today, and credit unions would specialize in serving the types of businesses of their member populations," the letter said.

    The letter was cosigned by Heartland Institute Vice President Eli Lehrer, Competitive Enterprise Institute Senior Fellow for Finance and Access to Capital John Berlau, Americans for Tax Reform President Grover Norquist, Less Government President Seton Motley, Citizen Outreach President Chuck Muth, Institute for Liberty President Andrew Langer, American Commitment President Phil Kerpen, Freedom Research Foundation President Jack Wheeler, Freedom Action President Myron Ebell, 60 Plus Association Chairman Jim Martin, and Council for Citizens Against Government Waste President Thomas Schatz.

    The Consumer Federation of America (CFA) this week also spoke out in support of an MBL cap increase. CFA Executive Director Stephen Brobeck in a letter sent Wednesday to members of the Senate said MBL cap increase legislation "would be particularly beneficial at this time," and would "benefit consumers both by promoting competition and innovation in local marketplaces and by strengthening credit unions."

    The CFA said MBL legislation would "expand access to affordable credit for small businesses and help strengthen local marketplaces that serve consumers well." (See related April 19 News Now story: CFA asks senators to support MBL cap increase.)

    A vote is expected soon in the Senate, with a House vote to follow.

    For the full letter, use the resource link.

    IRS changes add to CU compliance burden: CUNA

    WASHINGTON (4/20/12)--Changes to the Internal Revenue Service's (IRS) 1042-S reporting requirements will create a new compliance burden for credit unions, Credit Union National Association (CUNA) Deputy General Counsel Mary Mitchell Dunn has warned.

    The IRS this month approved new tax reporting requirements that will impact credit unions, banks, savings institutions, securities brokerages, and insurance companies that pay interest on deposits. Under the IRS rule, credit unions and other financial institutions will be required to report on their forms 1042-S interest of $10 or more earned annually on deposit accounts held by nonresident aliens who are residents of any foreign country. The current nonresident reporting requirement only applies to Canadian expatriates.

    The IRS rule change is an attempt to combat tax evasion.

    Dunn said some credit unions may not have the data processing abilities needed to identify affected accounts and prepare the required IRS forms.

    Overall, Dunn said, the costs that the rule change would create for financial institutions and consumers would far outweigh any benefit to the IRS, and CUNA last year said the IRS has not proven that the new regulation is needed.

    Inside Washington

    Fed: Mobile banking rising, security still a barrier

    WASHINGTON (4/20/12)--Mobile phones and mobile Internet access are in widespread use, and the ubiquity of the devices is changing the way consumers access their financial services, according to a report commissioned by the Federal Reserve. However, two issues continue to hold back others from adopting mobile financial services.
     
    About 87% of the U.S. population has cell phones, said the Fed's report, entitled "Consumers and Mobile Financial Services March 2012."  
     
    Roughly  21% of those with cell phones used them for mobile banking in the past 12 months, and others plan to--11% of the rest said they  probably will do so in the next 12 months.
     
    Those who used their phones for mobile banking indicated that the most common use was to check  their account balances (90% of mobile banking users did this). The second most common activity: transferring money between accounts, (42% of mobile banking users).
     
    Mobile phones also are changing the way consumers make payments, said the Fed's report.  About 12% of mobile phone users making a mobile payment in the past 23 months, with 47% of those making an online bill payment with their phones and 21% transferring money directly to another person's bank, credit card, or Paypal account.
     
    Two issues, however, continue to plague adoption of mobile banking services: security and a perception of limited usefulness, said the Fed.
     
    Fifty-eight percent of mobile phone users who have not adopted mobile banking yet said that their banking needs were already being met without the use of mobile banking.  Later in the report, however, it was noted that consumers who employ mobile phones to timely financial incentives and emotional appeals about saving time and convenience.
     
    Security was cited as the main reason for not mobile banking by 42% and the second main reason by another 48% . They expressed concerns about hackers gaining access to their phones and their personal financial information and about the costs related to security.
     
    More than one-third of mobile phone users who don't engage mobile banking said they didn't see any benefit from using mobile payments. They also said they found it easier to pay with another method.
     
    Another key finding:  The "underbanked" make significant use of mobile financial services, with 29% using mobile banking and 17% using mobile payments in the past 12 months.  Of the 17% who made mobile payments, 62% did so to pay bills.
     
    Mobile phone use is high among the younger generations, minorities and those with low levels of income--groups that are prone to be underbanked or unbanked, said the Fed.
     
    A lesson for credit unions from this report:  Offering mobile banking  to these groups might be the ticket to developing relationships with new members, especially those in two areas targeted for growth by many credit unions: serving Gen Y and serving Hispanics. But credit unions will have to have the technology to ensure their mobile banking services are more secure.
     
    The survey was administered by Knowledge Networks, an online consumer research company commissioned by the Fed. It took samples of adults ages 18 and 0ver. There were 2,290 respondents who completed the survey. To see the report, use the link.

    MBL appraisal addressed in NCUA legal opinion

    ALEXANDRIA, Va. (4/20/12)--In response to an inquiry from an Oregon-based credit union LLC, the National Credit Union Administration has issued a legal opinion letter stating it is unnecessary for a credit union to obtain an appraisal when it sells a participation interest in a member business loan (MBL)  under the Interagency Appraisal and Evaluation Guidelines.

    The LLC said it works with credit unions that offer to sell participations in commercial real estate secured MBLs to other credit unions from the originating credit union's MBL portfolio.  The loans have been held by the originating credit union for several years, are in current repayment status, and have a loan-to-value ratio of less than 80%, with no deterioration in the subject property.  Also, according to the LLC's description, the terms, conditions and pricing of the loan at origination remain the same at the time of the participation sale.
     
    "The (g)uidelines do not require that an appraisal be obtained under the facts you have presented, " wrote Hattie M. Ulan, NCUA associate general counsel.  She added, however, that a purchasing credit union should continue to perform its risk assessment and due diligence consistent with agency guidance on real estate lending and loan participation programs.

    Use the resource link to read the complete letter.
     
     

    Health care law changing how CUs offer coverage

    SAN ANTONIO (4/23/12)--Regardless how the U.S. Supreme Court rules on the constitutionality of the Patient Protection and Affordable Care Act or a specific provision mandating that individuals purchase coverage, the health care reform law is changing the way credit unions offer and fund employee health plans, said CUNA Mutual Group Friday at the the CUNA Human Resources and Training and Development Council Conference.
     
    Brad Pricer, human resources process leader for CUNA Mutual Group, discusses how health care law is changing the way credit unions offer and fund employee health plans, at the CUNA Human Resources and Training and Development Council Conference in San Antonio Friday. (Photo provided by CUNA Mutual Group)
    That shouldn't prohibit credit unions and leagues from tailoring their benefit offerings and the platforms used for those offerings, Brad Pricer, CUNA Mutual Group human resources process leader, told attendees in San Antonio. "The landscape is definitely changing, but credit unions will be able to take advantage of a post-health care reform environment while controlling costs and maintaining an 'employer of choice' strategy if they so choose," Pricer said.
     
    Health care insurance exchanges are moving forward and will continue to do so regardless of the Supreme Court's decision, which is expected in June. Exchanges are meant to facilitate the purchase of health plans, making the process easier and more efficient.

    Pricer said a common question he gets is whether credit unions will still need to sponsor health plans for employees due to the individual mandate (assuming it survives Supreme Court review). The answer is no, but they will have to pay a penalty under "play or pay" provisions. The penalty tax will apply to certain businesses that do not offer health insurance to their employees at certain levels of coverage and affordability, or do not offer it at all.

    Employers will likely follow their peers when deciding whether to offer coverage after exchanges are established by Jan. 1, 2014.  A 2011 HighRoads Pulse Survey indicated 80% employers do not intend to drop health care coverage in 2014, but 65% said they would drop coverage if the majority of other companies in their industry did.

    "Whether your credit union should continue to provide coverage comes down to whether the businesses you are competing with to attract and retain employees decide to offer coverage or not. If they do, and your credit union discontinues its plan, it will be more difficult to attract and retain talent," Pricer said.
    Credit unions that want to continue to promote an employer of choice strategy in attracting and retaining employees by continuing to offer health insurance may need to look at new ways of purchasing that coverage through state-sponsored or private exchanges.

    Pricer said purchasing through exchanges and employing a defined contribution approach to funding is gaining momentum. A shift to a defined contribution approach moves the risk of incurring high health-care costs from employers to employees and is similar to the previous shift with retirement plans, he added.
    "Instead of providing a set of pre-defined health insurance benefits through one or two employer -sponsored plans, employers will provide a fixed amount of funding. Employees will use that amount in an employer-sponsored exchange to help pay for the level of coverage he or she deems appropriate."

    While awaiting the Supreme Court decision, credit unions should not to ignore health care reform compliance requirements, Pricer advised. "In my opinion, it's highly unlikely that all of health care reform will be struck down even if the individual mandate falls."

    Either way, credit unions' decision to offer health care coverage in the future will likely be driven by affordability and whether a credit union embraces the philosophy of being an employer of choice to recruit and retain the best available talent.

    Pricer encouraged attendees to go to a special website for timelines, legislative briefs, model notices and forms. (Use the resource link.)

    VINtek serves 80% of Texas CUs with ELT Services

    PHILADELPHIA (4/23/12)--VINtek provides electronic lien and title (ELT) services for 104 of the 128 Texas credit unions participating in the state's ELT program, representing an 82% share, the Philadelphia-based company said.
     
    VINtek was selected as the preferred product provider of ELT services by Credit Union Resources, Inc., the service corporation of the Texas Credit Union League, in 2010. Through the partnership between VINtek and Resources/TCUL, credit unions have been provided with the education, guidance and technology needed to replace paper vehicle titles with electronic titles.
     
    ELT programs allow credit unions to receive digital titles from the Department of Motor Vehicles instead of paper titles with liens. ELT reduces paper use, title storage, manual processing and postage costs; eliminates exposure to lien release fraud; and improves member service by eliminating the chance of losing a title.
     

    MnCUN honors pro, volunteer of year

     BLOOMINGTON, Minn. (4/23/12)--The Minnesota Credit Union Network (MnCUN) announced the recipients of its two most prestigious awards on April 14: the Outstanding Credit Union Volunteer of the Year and the Outstanding Credit Union Professional of the Year.
     
    The awards are bestowed upon two individuals for demonstrated excellence and embodiment of the credit union mission and were presented during the MnCUN 2012 Annual Meeting & Convention, April 13-14.
     
    Yvonne Condell of Affinity Plus FCU in St. Paul was presented the Volunteer of the Year award. Condell has served Affinity Plus as a board member for 16 years. In that time, she has served as secretary, vice chair and board chair. She is also actively engaged in the Affinity Plus Foundation, committing her time to its many initiatives and fundraisers.
     
    Dick Nesvold, president/CEO of SouthPoint FCU in Sleepy Eye, received the 2012 Professional of the Year Award.
     
    Nesvold has been president/CEO for 16 years. Under his leadership, the credit union has seen a steady rise in membership, an expansion in its products and services, and the opening of two branch offices. He involved himself and his staff in many charitable causes. He was a member of the Credit Unions for Kids committee, and SouthPoint FCU participated in Kids Against Hunger events.
     
    Nesvold's international activities include working to develop a partnership between credit unions in Minnesota and Paraguay--through the organization CENCOPAN. He also has hosted visitors from CENCOPAN on three occasions in an effort to offer insight on the development of credit unions in South America.

    Dick Nesvold, right, SouthPoint FCU president/CEO, was presented Minnesota Credit Union Network (MnCUN) 2012 Professional of the Year by Mark Cummins, MnCUN president/CEO. Yvonne Condell was honored with the Outstanding Volunteer of the Year Award at the 2012 Minnesota Credit Union Network annual meeting. She is shown with Cummins.
    (Photos provided by the Minnesota Credit Union Network)

    CUs teach financial skills year round, too

    PEWAUKEE, Wis. (4/23/12)--While financial literacy is being highlighted across the nation this month, the Wisconsin Credit Union League said credit unions provide financial literacy education throughout the year.
     
    Here are examples of how credit unions teach money management in the state:
    This week, News Now will provide an update of how credit unions are educating their members during Financial Literacy Month, including National Credit Union Youth Week, April 23-28.

    Inside Washington

    HR/TD elects officers/Wozniak is chair

    MADISON, Wis. (4/23/12)--Diane Wozniak, human resources manager for Tampa Bay FCU, has been elected as chair of the CUNA HR/TD council.
     
    Suzanne Oliver, senior vice president of educational services and chief learning officer for Mountain America FCU in West Jordan, Utah, will become council vice chair. Robert Davis, senior vice president of human resources for VyStar CU in Jacksonville, Fla., will become the council secretary/treasurer.
     
    Oliver also was was re-elected to the executive committee.
     
    Newly elected to the executive committee is Cindy Swigert, chief human resources officer for United FCU in St. Joseph, Mich., who replaces outgoing committee member Kathy Spahr, human resources of training and development director for EECU in Jackson, Mich., who served a three-year term.
     
    Norma Stein, vice president of human resources and learning and development for SchoolsFirst FCU in Santa Ana, Calif., replaces Michelle Greear, assistant vice president of training and career development for Technology CU, San Jose, Calif., who has stepped down from the committee.
     
    The CUNA HR/TD Council executive committee also includes:

    DigitalMailers CU clients grow eStatements 25%

    HERNDON, Va. (4/23/12)--DigitalMailer's credit union clients collectively grew their eStatement users by 25%  in 2011, resulting in savings of nearly $1 million.
     
    "Credit unions can't control the cost of postage, but they can control the number of mailings sent to members – and the number of members who receive their statements electronically,"said Ron Daly, DigitalMailer, president/CEO.
     
    As statements grow heavier to include additional types of transactions, the cost to mail paper statements will rise, possibly moving credit unions into the higher-priced, multi-ounce mailing category, Daly said.
     
    Earlier this year, DigitalMailer recognized Carter FCU in Springhill, La.; Warren FCU Cheyenne, Wyo.; and TopLink FCU in Maple Grove, Minn., as its top eStatement leaders in the annual "Move It and Lose It" competition. Client credit unions were challenged to increase the number of members switching from paper to electronic statements using creative campaigns, simple usage changes and product coupling.
     
    Dliminating paper statements has many positive effects on the environment and financial benefits: reducing the use of paper and gasoline, lessening greenhouse gasses and waste water, and helping to preserve U.S. forests, according to PayItGreen, a NACHA-led coalition promoting electronic billing and payments.
     
    The group reports that if 10% of U.S. households made the switch, nearly 7.5 million gallons of gas would be saved. The greenhouse gases prevented would be equal to preserving 535 acres of forest from deforestation.
     
    "Helping members switch to eStatements is both pro-environment and pro-bottom line," said Daly. "When you consider the cost of postage, printing and marketing materials, clients are saving approximately $8 to $12 a year per switched user, on average. And that adds up quickly the more members switch."

    Alabama Central CU employee prohibited by NCUA

    ALEXANDRIA, Va. (4/23/12)—Michael John Young, a former employee of Alabama Central CU, Birmingham, Ala., has been prohibited from future work at any federally insured financial institution by the National Credit Union Administration (NCUA) following his conviction on one count of bank fraud.

    Young was sentenced to 17 months in prison, five years of supervised probation, and ordered to pay$140,000 in restitution, according to an NCUA prohibition order released Friday.

    Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million.

    Use the resource link below to access NCUA enforcement orders online.

    Royce, media highlight MBL bill

    MADISON, Wis. (4/23/12)--U.S. Rep. Ed Royce (R-Calif.) and several media outlets highlighted credit unions' push to pass a member business lending (MBL) bill--the Small Business Lending Enhancement Act--before the U.S. Senate this month.
     
    "My bill provides small businesses access to credit they desperately seek by safely raising the member business lending cap set on credit unions," Royce, a sponsor of the bill, said in a featured column in flashreport.com, operated by GOP party official Jon Fleischman and read by politically versed people. "Many of our country's local businesses turn to financial institutions, which are often times credit unions. Nothing beats the peace of mind coming from the familiarity through proximity.
     
    "A 'ma and pa' flower shop looking to expand into e-commerce--creating possible employment for delivery drivers and packers--would turn to their neighborhood institution first before anywhere else," he continued. "Why not give these credit unions, so heavily relied on by local small businesses, the ability to safely supply the demand for credit?"
     
    The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.
     
    The Baltimore Business Journal noted Friday that the bill "has become a flash point of contention between credit unions and banks."
     
    The Journal added: "Many credit union CEOs say the legislation would boost jobs by providing another source of credit to small businesses that want to expand and hire more workers. Bankers, on the other hand, counter that credit unions are infringing on their turf and taking advantage of laws that give them an unfair advantage by exempting them from paying corporate income tax."
     
    Raising the credit union MBL cap is good for consumers because it would boost lending by $201 million in Maryland in the first year alone, creating nearly 2,200 jobs, John Bratsakis, CEO of the Maryland and District of Columbia Credit Union Association, told the Journal.
     
    SECU, based in Linthicum, Md., wants to issue more business loans, and there is sufficient member demand to support a raising of the cap, Rod Staatz, CEO of SECU, told the Journal.
     
    Also, Rogue FCU (RFCU), a $542 million asset credit union, based in Medford, Ore., hopes to double its small-business lending by this time next year if the MBL bill becomes law (Mail Tribune April 20).
     
    With no taxpayer dollars involved and capital sitting idle, it makes sense to deploy it, Gene Pellham, RFCU president/CEO, told the newspaper.
     
    Heritage Community CU, a $198 million asset credit union based in Sacramento, Calif., has launched a business lending program, which will offer members business credit cards, commercial real estate loans, and loans for commercial vehicles and equipment  (Sacramento Business Journal April 20).
     
    The credit union is joining a growing credit union movement to expand beyond consumer markets, the Journal noted.

    NCUA highlights green progress for Earth Day

    ALEXANDRIA, Va. (4/23/12)--With many participating in Earth Day observations this past Sunday, the National Credit Union Administration (NCUA) took the opportunity to highlight the positive steps it has taken through the "greeNCUA" initiative, which aims to help the agency decrease its overall environmental footprint.

    NCUA Chairman Debbie Matz said her agency understands its environmental responsibility, and takes that responsibility seriously each and every day.

    "The greeNCUA initiative encompasses thousands of small, individual decisions throughout the year in order to make it a big, ongoing success," she added, and Matz encouraged "all credit unions to make the same commitment by creating a culture that promotes and rewards individual decisions that add up to environmental successes."

    The NCUA noted it has helped reduce unneeded paper use by distributing email communications through its NCUA Express and NCUA CU Express systems, purchasing only recycled paper, and setting all office printers to print double-sided documents. The agency over the past year has also adopted energy efficient lighting in its Alexandria, Va. central office, and has installed motion detectors in that office to keep the lights off in unoccupied rooms.

    Old electronics, used cell phones, and paper have also been recycled, and the agency also requires contractors to use low volatile organic compound paint in any refurbishing projects that are done in the building.

    "Going green is a total commitment NCUA has made," Matz said.

    For the full NCUA release, use the resource link.

    Market News

    MADISON, Wis. (4/23/12)

    CUNA releases 12-question CU overdraft survey

    WASHINGTON (4/23/12)—The Credit Union National Association (CUNA) is asking credit unions to share information regarding their overdraft protection programs, and overdraft transfer and marketing practices, through a short, 12-question CUNA survey.
     
    CUNA developed the survey in response to an action by the Consumer Financial Protection Bureau (CFPB) earlier this year when it distributed questionnaires to financial institutions to help evaluate how those institutions' overdraft policies affect consumers.
     
    In the CUNA survey, CUNA asks for basic information on the credit union's asset size, and what types of overdraft programs are offered to members.
     
    More specific questions addressing how members are made aware of available overdraft protection programs and how members are alerted to the possibility that a transaction may trigger an overdraft fee are also among the survey questions.
     
    The CUNA survey does not collect any identifying information, and credit union participation will be strictly anonymous. Responses must be received by CUNA by April 27.

    The CFPB's overdraft project is particularly focused on addressing the practice of re-ordering purchases and payments to maximize overdraft fee charges, on whether consumers can anticipate and avoid overdraft fees, and on how differences in the way institutions explain and promote overdraft programs may affect opt-in rates.

    The CFPB has said it plans to use overdraft comments from consumers, the financial services industry, and other interested parties to craft new overdraft fee disclosures and rules, assist with policymaking on overdraft practices, and to prioritize the bureau's regulatory and education work.
     
    For the CUNA survey, use the resource link.

    News of the Competition

    MADISON, Wis. (4/23/12)

    GAO identifies some FDIC insurance fund issues

    WASHINGTON (4/23/12)--Some of the Federal Deposit Insurance Corporation's (FDIC) processes for deriving and reporting estimates of losses to its deposit insurance fund are deficient, but, overall, that agency's controls over financial reporting are effective, the Government Accountability Office (GAO) said in its audit of the FDIC's 2011 financial statements.

    The GAO audit specifically found issues in the FDIC's loss estimate reporting of resolution transactions involving shared loss agreements.

    Under shared loss agreements, the FDIC absorbs a portion of the loss on a specified pool of assets. This approach maximizes asset recoveries, minimizes FDIC losses, and reduces immediate cash needs, the agency said. This approach is used in selected purchase and assumption transactions.

    The audit said these deficiencies resulted in undetected errors in draft 2011 insurance fund financial statements. These errors were flagged and ultimately corrected by the FDIC. "While these deficiencies, individually and collectively, do not constitute a material weakness in internal control over financial reporting, they nevertheless increase the risk of additional undetected errors or irregularities in the DIF's financial statements," the GAO said.

    The GAO also reported other less significant matters involving FDIC's internal control over financial reporting. The GAO did not make any recommendations in the report, but did say it would produce a separate report on the issues identified in the audit, and provide recommendations on how the FDIC could strengthen its own internal controls.

    For the GAO report, use the resource link.

    Succession plans--Don't ignore development

    SAN ANTONIO (4/23/12)--Even if they have CEO succession plans in place, credit unions risk losing CEO replacements to other organizations if their plans do not have an executive development component that includes financial incentives to retain top talent, said CUNA Mutual Group's John Moreno Friday.
     
    Credit union succession plans should include financial incentives to retain executive talent, said CUNA Mutual Group's John Moreno during a CUNA HR/TD Council Conference breakout session Friday. (Photo provided by CUNA Mutual Group)
    He spoke during a CUNA Human Resources/Training and Development Council Conference breakout session in San Antonio.
     
    Moreno, an executive benefits specialist with the insurer, said credit unions need to take a hard look at their succession plan and determine if they have a true succession plan or a "Break in Case of Emergency" plan.
     
    The latter is an emergency CEO succession plan that prepares the credit union for the death or rapid, unexpected departure of the CEO. It's a short-term disaster recovery plan to keep the institution going until a new, permanent CEO is hired.
     
    "The 'Break in Case of Emergency Plan' is important to have, but it shouldn't be the only plan," Moreno said. "Essentially, it is the proverbial sealed envelope in the board chairman's desk that names the next CEO. It's not adequate by itself."
     
    A true succession plan doesn't just choose internal successors to a credit union's top executive positions; it prepares internal successors, which provides more stability and consistency with the organization's strategic plan. Moreno cited 2011 research from the Krannert School of Management at Purdue University that indicated CEOs hired as part of an organization's internal succession plan tend to stay longer and perform better--for less initial compensation--than the average new CEO.
     
    "It's about building bench strength, to use a sports analogy, and involves staff development rather than replacement," Moreno said. "That requires nurturing and developing people, and it requires active involvement of the board of directors, chief executive and human resources functions."
     
    But even with a true succession plan, credit unions can still lose potential internal CEO successors to competing organizations, including other credit unions. Linking executive development with financial incentives is critical, he added.
     
    "A successful human resources pro is going to look to bring in talent by finding candidates who are already succeeding in other organizations," Moreno said. "Unless you also provide monetary incentives to keep your top talent at your credit union, you run the risk of having your staff poached by others."
     
    That means creating "golden handcuffs" for top talent who could be a flight risk. Doing so makes their decision to leave the credit union difficult, if not costly. Plus, it makes it more expensive for the acquiring organization.
     
    Moreno suggested aligning non-qualified deferred compensation arrangements with a sound succession and development plan. "Part of creating a sustainable ethic of succession is building in a cost, beyond salary, for competitors to acquire your next-in-line executives. A properly structured SERP (supplemental executive retirement plan) adds to a competitor's cost while creating a deferred compensation incentive for your executives to stay."
     
    Executive salaries have increased commensurate with the size and complexity of credit unions over the years. However, tax regulations can limit credit unions' contributions to pension and defined-contribution retirement plans. Executives also face Social Security maximums and potential limitations on disability insurance and corporate-purchased life insurance.
     
    As a result, highly paid executives can expect a much larger gap than other employees between their pre- and post-retirement income.
     
    Moreno suggested considering multiple options for closing this gap. Among these were:
    Due to potential tax and legal risks inherent in a plan design, he advised working with a qualified attorney and experienced providers for any type of non-qualified deferred compensation plans. "As with your entire succession plan, review them regularly so the next time your credit union must replace a top executive, the right person is already on board."

    Catalyst files preemptive patent lawsuit

    SHERMAN, Texas (4/23/12)--Catalyst Corporate FCU has filed a lawsuit in a federal court in Texas, seeking a declaratory judgment that it has not infringed on any processing patents, after it received a letter from a company representing an unknown "John Doe" patent holder threatening Catalyst with a lawsuit if it did not sign a confidentiality agreement.
     
    Plano, Texas-based Catalyst filed the pre-emptive strike in the U.S. District Court for the Eastern District of Texas, Sherman Division. In the complaint, Catalyst said it received a letter and a "Proposal to Negotiate Patent License" on March  27 from IP Navigation Group,  also known as IPNav, a Dallas-based company that bills itself as a "leading global intellectual property advisory firm" that has "expertise in monetizing patents."
     
    According to the complaint filed, IPNav claims that it focuses on "turning intangible assets into tangible profits" with its "monetization solutions," and that it "employs an aggressive approach to monetizing patents, which has resulted in the filing and litigating of a large number of patent infringement lawsuits."
     
    The letter to Catalyst Corporate noted that an "analysis of your products shows that your company makes, uses, or sells products or services that would benefit from a license to [Doe's] patents." It demanded Catalyst sign a confidentiality agreement "as a predicate to IPNav identifying 'specific patents and provid[ing] information outlining the basis for the infringement claims against your products or services.'"
     
    Catalyst claims the letter indicates that IPNav and Doe "are prepared to sue if Catalyst does not agree to their terms." The terms include provisions that would bar Catalyst from suing the firm, but not barring IPNav or Doe from filing a patent infringement lawsuit.
     
    "Catalyst has been placed in the untenable position of being forced to choose between waiving its legal rights pursuant to the terms of the agreement or subjecting itself to an ongoing threat of litigation and unspecified allegations of infringement directed at the core of Catalyst's business. Catalyst refuses to make such a choice and, instead, asks this court to declare Catalyst's legal rights now in its home court."
     
    The suit seeks a declaration that Catalyst "has not infringed and is not infringing, directly or indirectly, any valid claims of the asserted patents" and an order permanently enjoining IPNav, Doe, and their representatives from asserting that the corporate infringed on any valid patent claim.
     
    Advances in technologies and processes such as remote deposit capture technology, payments processing, and online and mobile banking technologies have been targets of several patent infringement lawsuits. Credit unions and banks using both third-party service providers and in-house processes for their new technologies have been  threatened with litigation as a result.

    Maximize HR investment with simpler human capital strategy

    SAN ANTONIO (4/23/12)--Understanding the overall health and readiness of a credit union's human capital and effectively communicating the value of employee benefits can help attract and retain talent and favorably impact the bottom line, attendees at the CUNA Human Resources/Training and Development Council Conference in San Antonio were told Friday.
     
    CUNA Mutual Group's Mike Roche, employee benefits specialist, discussed the employee benefits concept of "Human Capital Management" and how it can help organizations enjoy a stable, talented and energized work force during the CUNA Human Resources/Training and Development Council Conference in San Antonio Friday. (Photo provided by CUNA Mutual Group)
    Mike Roche, employee benefits specialist at CUNA Mutual Group, and Brad Pricer, CUNA Mutual human resources process leader, discussed the employee benefits concept of "Human Capital Management" and how it can help organizations enjoy a stable, talented and energized work force.
     
    Human resources leaders in today's competitive marketplace are challenged by hard-to-reach bottom lines, job consolidation, technology changes, health care reform and a shrinking labor pool. Also, employees are often confused or not engaged when making benefits decisions. Roche cited a 2011 AFLAC Workforce Report that stated only 8% of workers strongly agreed they were fully engaged in making benefits decisions.
     
    Simplifying human capital management acknowledges that your employees are not all the same, which forces you to provide them choices, Roche said. "It aids in analyzing work force strengths and vulnerabilities, and identifies opportunities and strategies to proactively manage employees," he added.
     
    Roche suggested offering a good voluntary benefits program coupled with clear communications that articulate the personal benefit they receive. "These efforts will help your credit union attract and retain talent, which directly impacts the bottom line," he said.
     
    Pricer said credit unions should get away from the traditional metric-based approach when analyzing the state of their human capital.
     
    "Human capital is more than just the people in the organization; it includes an individual's ability, behavior, skills and tenure," Pricer explained. "The problem with using metrics to define and measure human capital is it doesn't necessarily create a clear picture of your current human capital state and how you should manipulate it going forward."
     
    Too much time is spent identifying, measuring, and tracking human capital metrics. Instead, Pricer suggested creating a simplified approach to more easily define the strategy and identify needed resources. "This allows you to quickly explain human capital needs to C-level management or the board of directors and where resources should be targeted," he said.
     
    Pricer discussed "heat mapping" as a means to quickly define and explain the state of a credit union's human capital.  Heat maps tell a concise story that can be told with just a few sheets of paper (or slides) instead of thick binders full of metrics.
     
    Heat maps identify strengths and weaknesses within the technical functions of an organization by using a color-coded chart listing the different functional roles against the categories being measured within each role. Those categories should be: subject-matter expertise, capacity, and capability.
     
    Pricer said creating a heat map offers numerous advantages that allow credit unions to: Put in place a succession-type plan at all levels; "By employing a human capital strategy, your credit union can ease the challenges and burdens of tracking day-to-day human capital management and free up staff to pursue other initiatives to increase employee engagement and satisfaction," Pricer said. "Ultimately, this will help attract and retain key individuals."

    NCUA to WesCorp court: Conservators can deny officials' coverage

    LOS ANGELES (4/23/12)--The National Credit Union Administration (NCUA) has filed more documents in its negligence lawsuit against former Western Corporate FCU senior executives, telling a federal court in Los Angeles that , as the failed corporate's conservator, it has authority to deny the former executives indemnification and insurance coverage.
     
    NCUA filed the documents April 18 in the U.S. District Court, Central District of California, Western Division, in response to counterclaims by the former WesCorp officials. 
     
    The original suit named as defendants: Robert A. Siravo, former president/CEO; Thomas Swedburg, former vice president of human resources; Todd Lane, former chief financial officer; Robert J. Burrell, former chief investment officer; and Timothy T. Swidley, former risk officer. Swedburg and Sidley have settled their lawsuits (News Now April 16).
     
    In its response, NCUA said that "defendants may not pursue a claim for indemnification against the NCUA because officers or directors of a failed institution may not obtain indemnification for actions brought against them by the institution's receiver, regardless of whether they might have had a right to indemnification by the financial institution had it not failed."
     
    The agency noted in the documents that because the defendants were responsible for purchasing an insurance policy on behalf of Wes Corp and elected to purchase the policy that they did, then the executives "are barred from pursuing a claim against WesCorp's successor the NCUA based upon any alleged inadequacy in the insurance policy so purchased."
     
    It also said that--without conceding any act of the NCUA caused damages to the three--it is entitled to offset and recoup against any judgment that may be entered favoring the executives.
     
    NCUA sued the WesCorp senior executives to try to recoup $6.8 million in investment portfolio losses from mortgage backed securities, alleging the executives were negligent in monitoring the corporate's investments. NCUA also alleged a breach of fiduciary duty and fraud related to the investments that contributed to WesCorp's collapse.
     
    In addition to their defense costs, damages and other court costs, the WesCorp executives had demanded that  NCUA indemnify them under Policy 21 adopted by WesCorp so current and former officials and employees could recover costs and attorney fees in case of a lawsuit.

    NCUA said in the documents filed last week that it did not renew the policy when it expired.

    May receives Texas league Hall of Fame award

    FARMERS BRANCH, Texas (4/23/12)--Harriet May, retiring CEO of El Paso-based GECU and immediate past chairman of the Credit Union National Association, received the Texas Credit Union League's prestigious Hall of Fame award last week.
     
    May's 38-year credit union career began in the mid-70s when she became a teller at GECU.  She rose through the ranks, serving in various management and executive management positions until she became CEO in 1996, said the league (LoneStar Leaguer April 20).
     
    Under May's leadership, GECU more than tripled in size. Today it has more than $1.8 billion in assets, with more than 720 employees serving more than 300,000 members, and is the largest independently owned financial institution in El Paso.

    J.D. Power: Consumer satisfaction with bank fees drops

    WESTLAKE VILLAGE, Calif. (4/23/12)--Consumers grew increasingly dissatisfied with retail banking fees in the past year, with a satisfaction index at 608, down significantly from 625 in 2011 and 656 in 2010, says  a new survey released Thursday by J.D. Power and Associates.
     
    The 2012 U.S. Retail Banking Study, in its seventh year, indicated that overall retail banking customer satisfaction is stagnant, improving by one point in 2012--to 753 on a 1,000-point scale.  The study measured six factors of satisfaction:  account activities, account information, facility, fees, problem resolution and product offerings.
     
    Monthly maintenance fees had the most significant impact on fees satisfaction this year--more so than in the 2011 and 2010 studies--while ATM and debit card fees had less negative impacts on fees satisfaction, said the study.
     
    "The negative reaction to fees reflects customers' irritation about paying for something they didn't have to pay for in the past," said Michael Beird, director of banking services at J.D. Power and Associates. "It also reflects a lack of their complete understanding about what they're getting for those fees. Customers understand why they're being charged for ATM and debit card use, but are not clear on what they're getting for monthly maintenance fees, which drives the bigger drop in satisfaction with those fees."
     
    The study noted improvements in satisfaction with facilities and routine transactions, and with reliability and ease of using ATMs, with the percentage of customers who use ATMs to make deposits more than doubling to 40% in 2012 from 19% in 2008.  Regional banks--defined by the survey as banks with $33 billion to $180 billion in deposits--saw the biggest drop in satisfaction, dropping to 759 from 760, when compare to small banks and big banks.
     
    Big banks still lag other banks in overall satisfaction, but they have improved in reducing the number of problems customers experience and in problem resolution, especially at first contact, said Beird.
     
    Although credit unions aren't included in the study, plenty of recent studies have reported that member/customer satisfaction with credit unions have topped bank customer satisfaction.  Examples include an American Customer Satisfaction Index survey ( News Now Dec. 13),  2011 Bank and Credit Union Satisfaction Survey by Prime Performance (News Now Dec. 8), a 2011 Customer Experience survey by Prime Performance (News Now March 9 ) and a loyalty survey by Temkin Group (News Now March 21).

    CU System briefs

    West Va. CU league elects officers, presents awards

    CHARLESTON, W.Va. (4/24/12)--The West Virginia Credit Union League re-elected David Van Middlesworth as chairman of its board of directors.

    Van Middlesworth is a director of Eastern Panhandle FCU in Martinsburg.
     
    The elections were conducted following the league's 76th annual meeting, held Saturday in Charleston, W.Va.
     
    Other officers elected included:
    Also at the meeting, Harry DeVilling, Tin Mill EFCU, Weirton, received the league's highest annual recognition of a volunteer, the William Bryan Hawkins Award.
     
    Receiving the Pacesetter Award was Shelli Roberts, Eastern Panhandle FCU. The award symbolizes excellence among paid credit union staff in West Virginia.

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    Excellence Award winners honored at HR/TD Council Conference

    MADISON, Wis. (4/24/12)--The CUNA HR/TD Council Excellence Award winners were announced during the council's 18th annual conference, which took place April 18-21 in San Antonio.
     
    The award recognizes and honors credit unions that exemplify excellence in the human resources and training disciplines and serves to promote credit union philosophies through people leadership.
     
     This year's winners are (by category):

    How one CU branch manager started a coop in Nigeria

    SANTA ROSA, Calif. (4/24/12)--During a visit to his native Nigeria to pay his final respects to his mother in 2010  Amy O. Ahanotu, branch manager at Redwood CU, Santa Rosa, Calif., helped bring life to a new financial cooperative.
     
    Click to view larger image During a 2010 visit to his native Nigeria, Amy O. Ahanotu, branch manager at Redwood CU, Santa Rosa, Calif., helped start a financial cooperative. Ahanotu, at right, in red hat, teaches Nigerian children about making smart choices with money.
    During his visit, women who were aware of Ahanotu's financial services background came to him with stories about the troubles they were having building up their farms and businesses because banks would not lend to them.
     
    "I realized that, instead of just giving them money, I could teach them to help themselves by forming a lending cooperative," Ahanotu wrote in a recent letter that was published in the Napa Valley Register, Marin Independent Journal and the Ukiah Daily Journal. "Similar to the credit union model I know so well, the members of this new cooperative borrow money from a central pool of funds to purchase seed for the upcoming season or provisions for their stores.  Once the harvest has come in or the goods have been sold, they return the money for another member to use. "
     
    Ahanotu worked with members to develop a business plan and discuss ideas for how to put profits back into the business to help the cooperative grow. He also invested $300 of his own money into the project.   When he returned home, he kept in contact with members and maintained his advisory role.
     
    "I returned one year later and saw how well the cooperative was progressing," he wrote in his letter.  "The women had seen a productive harvest, sold their farm products at profit, and had money saved for the next planting season.  The loans had a zero percent default rate, partly because of the social stigma attached to defaulting in the village."
     
    Click to view larger image Redwood CU branch manager Amy Ahanotu (back row, center) makes financial learning fun for children from his home village in Nigeria. (Photos provided by Redwood CU)
    Ahanotu describes the cooperative as a work in progress. He has invested additional funds to help the cooperative reach its goals and solidify its foundation.  " My goal is to help them become a respected institution in the village, so that those in neighboring areas will see the results and realize they can do this, too," he said.
     
    Ahanotu said his mentor role would work just as well in the U.S.
     
    "Local business people and community leaders have a great deal to offer the workforce in terms of experience and advice," Ahanotu wrote in his letter . "We should think of ourselves as valuable local resources who can, with a small commitment of time, contribute to the increased economic prosperity of the region.  Whether you decide to mentor someone just starting out or volunteer to teach youth the skills they need to be successful, each effort will build on the next and improve our area's future."
     

    Temkin Group: CUs' good will makes members forgive mistakes

    WABAN, Mass. (4/24/12)--U.S. credit unions have accumulated good will with consumers because they are steadfastly working on members' behalf. This has resulted in consumers being more willing to forgive credit unions when they make an honest mistake when compared with banks, according to the most recent Temkin Group Report.
     
    Temkin Group, a customer experience research and consulting firm, announced the release of its 2012 Temkin Forgiveness Ratings that rates how likely consumers are to forgive 206 large companies across 18 industries if they deliver a service miscue (PR Newswire April 17).
     
    This is the second year that Temkin Group has published these ratings. The research, which is based on a survey of 10,000 U.S. consumers in January 2012, shows that consumers are most likely to forgive USAA, credit unions, H.E.B., Hy-Vee, Dollar Rent A Car, Chick-fil-A, Publix, Costco, and Amazon.com.
    Credit unions continue to look out for their members' interests and provide a level of service that generally is not available at other financial institutions.
     
    At the other end of the spectrum, consumers were least likely to forgive Citigroup, Charter Communications, HSBC, Chrysler dealers, EarthLink, Bank of America, Comcast, Quest and US Airways.
     
    "Forgiveness is a valuable asset that you earn by consistently meeting customers' needs, but many companies don't have enough forgiveness stored-up to recover from their miscues," said Bruce Temkin, author of the research and managing partner of Temkin Group.
     
    The 2012 Temkin Forgiveness Ratings cover 18 industries: Airlines, appliance makers, auto dealers, financial institutions (banks and credit unions), car rental agencies, computer makers, credit card issuers, fast food chains, grocery chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, parcel delivery services, retailers, TV service providers and wireless carriers.
     
    Temkin Group examined industry averages and found that grocery chains have earned the most forgiveness from consumers, followed by retailers, appliance makers and parcel delivery services. However, consumers are not very likely to forgive mistakes by credit card issuers, Internet service providers and TV service providers.
     
    The research also examined how individual companies are rated, relative to their industry peers. USAA holds the top two spots, outpacing its credit card and banking peers by more than 30 percentage points in the Temkin Forgiveness Ratings. USAA also outpaces the insurance industry by more than 20 percentage points.
     
    Credit unions, Hyatt, US Cellular, Dollar Rent A Car, Chick-fil-A, and Bright House Networks are also more than 15 percentage points above their industry averages.
     
    Five companies fell 15 or more percentage points below their industry's average Temkin Forgiveness Ratings: Chrysler dealers, Citigroup, Travelers, Charter Communications and RadioShack.
     
    Temkin Group also analyzed changes in Temkin Forgiveness Ratings between 2011 and 2012. The research shows that consumers are more forgiving this year than they were last year. Led by financial institutions and insurance carriers, all 12 industries that were in both the 2011 and 2012 Temkin Forgiveness Ratings showed improvement.
     
    Sixty-eight of the 139 companies that were in the 2011 and 2012 Temkin Forgiveness Ratings earned double-digit improvements, and four companies improved by more than 25 percentage points: credit unions, TD Ameritrade, Lenovo and USAA.
     
    Ten companies lost ground during the past year, with the biggest declines coming for Citigroup, Continental Airlines, Travelers, Sears, Holiday Inn Express and The Hartford.

    New online discussion forum on CUNA Volunteer Network

    MADISON, Wis. (4/23/12)--The Credit Union National Association (CUNA)  has opened an online discussion forum, available exclusively on the CUNA Volunteer Network.
     
    CUNA's new online discussion forum, designed in partnership with Passageways for the CUNA Volunteer Network, provides a safe, convenient online atmosphere where board volunteers can share their ideas and connect with one another without being in the same room. Members can distribute volunteer materials, hold board meetings, join in conversations and conduct their day-to-day board volunteer business. 

    Passageways is a strategic alliance provider of CUNA Strategic Services.

     
    The CUNA Volunteer Network's new online discussion forum features:

    CU survey: Youth showing financial maturity

    MANSFIELD, Texas (4/24/12)--More than half of all North Texas teens and young adults say they have some form of relationship with a financial institution, in a survey conducted by Texas Trust CU. Seven out of 10 survey respondents have a checking account, and nearly the same number have a savings account. In about half the cases, these accounts are held in the youth's name.
     
    More than 72% of the people surveyed say they use a debit card as their primary means of accessing their funds. Only 16% replied that they rely on their parents for money. Separately, 38% report they have their own credit card. Fifty-nine percent have no credit card, while only a small percentage use a credit card in their parents' name.
     
    Most teens surveyed did not regularly balance their checkbooks. About 34% surveyed took the view that  balancing your checkbook "doesn't matter as long as you don't overdraw or exceed your charge limit." About 33% replied that they reconcile once a month,  and 3% balance their accounts once a year.
     
    When it comes to learning about personal finances and budgeting, parents are a young person's primary teacher. About 74% of those surveyed said their parents taught them how to budget, while only 11% said they have no budget at all.
     
    "This survey confirmed what we suspected, which is a high level of financial maturity among young people," said Amber Danford, Texas Trust vice president of marketing. "Young people are clearly more independent today and many are opening their own accounts without anyone co-signing for them. They also have access to a greater number of financial products and services geared to them, and exercise a fair amount of control over their own money, making it easier for them to participate in commerce."

    Inside Washington

    Senate leader reiterates support for MBL vote

    WASHINGTON (4/24/12)--Senate leadership remains committed to a floor vote on credit union legislation to increase the member business lending (MBL) cap, a pledge reiterated Monday by Sen. Charles Schumer (D-N.Y.), the third-ranking Democrat in the Senate.
     
    "If the banks want to go to sleep on this legislation, that's fine with us," said Credit Union National Association (CUNA) President/CEO Bill Cheney Monday in response to a report started by the New York Bankers Association that claimed Schumer had said the MBL bill has been pulled from the Senate voting calendar.

    Sen. Schumer's office yesterday reiterated that the legislation is still on the Senate's agenda, with a voting date yet to be determined, and nothing procedurally has changed. Banks have been waging war against the MBL bill as CUNA, credit unions, small businesses, and consumer and businesses groups have ramped up their advocacy efforts in advance of a vote that Senate Majority Leader Harry Reid (D-Nev.) also has said is coming.
     
    "The fact is, Senate leadership remains committed to a floor vote on this bill, a promise Sen. Schumer reiterated again today," Cheney said. "Senators recognize our bill would create hundreds of thousands of jobs and inject billions of dollars into the economy--at no cost to taxpayers.
     
    "Credit unions will continue to advocate for this bill with no letup. The bill remains on the Senate calendar, and we know that small business will continue to join us in the push for approval. After all, small business continues to need help finding credit--and more jobs are certainly needed in this economy."
     
    Schumer has said that lifting the "job-killing" lending cap "would be a win" for small businesses.

    S. 2231, like its counterpart introduced in the House (H.R. 1418), would increase the MBL cap to 27.5% of a credit union's assets, up from 12.25%. 

    Within the first year of enactment, the increased MBL authority would help to inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA estimates show.

    CUNA does not anticipate the MBL vote will come up for a vote this week.  The House and Senate both begin a one-week Spring District Work Break on April 30, but then return for a three-week work session in Washington, D.C.
     

    ATM bill sponsors urge support

    WASHINGTON (4/23/12)--Reps. Blaine Luetkemeyer (R-Mo.) and David Scott (D-Ga.) are asking their House colleagues to sign on in support of their bill, introduced last week, that would ease current ATM fee disclosure regulations to cut bogus lawsuits against ATM operators.

    Current law requires all ATM operators to display both a physical placard on the machine and to provide an electronic disclosure of a fee that an ATM user may incur.

    The lawmakers' joint letter explains, "Recently, some have found it advantageous to remove the physical placard and sue (or threaten to sue) financial institutions and merchants for noncompliance of the requirement.

    "This is despite the fact that the electronic disclosure goes above and beyond the physical disclosure in that it not only informs the user there is a fee, but what that fee is, and then requires the user to affirmatively accept the fee."

    Under H.R. 4367, supported by the Credit Union National Association (CUNA), ATMs would only be required to display the ATM disclosures on a screen, and give ATM users the choice of opting in to such a fee. The physical ATM fee disclosure notice requirement would be eliminated.

    "Our bill eliminates an outdated and unnecessary regulatory burden on all financial institutions while continuing to ensure consumer protections for all ATM users through mandated on-screen fee disclosures," Luetkemeyer and Blaine wrote, urging support.

    CUNA last week sent a etter of support to Luetkemeyer and Scott, calling the bill common sense legislation that will reduce regulatory burden without harming ATM users.

    The bill currently has the following six co-sponsors: Reps. Francisci Canseco (R-Texas, Michael Grimm (R-N.y.), Ted Poe (R-Texas), David Schweikert (R-Ariz.), Scott, and Lynn Westmoreland (R-Ga.)

    Illinois CUs realize $11M benefit in regulatory fee credits

    NAPERVILLE, Ill. (4/24/12)--Illinois state-chartered credit unions are receiving a partial credit on their April 2012 first-quarter regulatory fee invoice. This partial credit is due in part to these credit unions receiving $11 million in the aggregate as a result of legal action undertaken by the Illinois Credit Union League (ICUL) eight years ago, ICUL said.
     
    Between an initial cash settlement of $6.2 million, the regulatory fee holidays or credits realized in four of the past 12 quarters totaling $2.7 million, and a rate reduction of $2.1 million in regulatory fees paid to the state's Department of Financial Institutions (DFI) since the settlement was reached, Illinois state-chartered credit unions to date have realized a cumulative benefit of roughly $11 million.
     
    The latest regulatory fee credit is the result of the remaining financial year 2011 amount due to Illinois state-charters after they enjoyed a total holiday on their fourth-quarter regulatory fee that would otherwise have been paid this past January to the Illinois DFI. The credit exceeded the total fourth-quarter billing to credit unions for regulatory fees, which meant state-chartered credit unions were entitled to, and received, a carry-forward credit applied toward first quarter fees, for a grand total of $1.25 million in the aggregate.
     
    These credits continue to occur because of legislation initiated by ICUL to implement the court-approved settlement of the regulatory fee case it filed against then Gov. Rod Blagojevich in 2004, which was signed into law by Gov. Patrick Quinn effective April 6, 2009 (as Public Act 95-1047). Under the terms of the settlement, Illinois state-chartered credit unions received a cash payment from the state in June  2009--the aggregate amount paid to credit unions was about $6.2 million.
     
    The payment represented a credit for the overpayment in regulatory fees made under the Blagojevich Administration's fee escalation and transfer ("sweep") budgetary arrangement adopted by the state in its fiscal years 2004 through 2006.
     
    The 2009 legislation implementing the settlement also accomplished two other goals, according to Stephen Olson, ICUL executive vice president and general counsel. First, it codified a rate reduction in regulatory fees on a going forward basis commencing January 1, 2009. On a going- forward basis, the rate reduction has resulted in $700,000-plus per year during the past three years, or $2.1 million back to Illinois state-chartered credit unions since the legislation became law.
     
    Second, the 2009 legislation reduced the Credit Union Fund margin that triggers a credit back to Illinois state-chartered credit unions. Olson noted the Credit Union Fund is the dedicated fund into which regulatory fees are deposited to offset the ordinary administrative and operational expenses of the DFI Credit Union Section in supervising state-chartered credit unions. It is structured as an operating account, not a savings account.
     
    To ensure adherence to that objective, the legislation reduced the margin level to 25% from 50%.
    When the balance in the Credit Union Fund at the end of a state fiscal year exceeds 25% of the expenses incurred by the state in administering the Illinois Credit Union Act and related laws, the excess must be credited to the credit unions that paid the fees in the first instance, Olson explained.
     
    As a result of the legislation, Illinois state-chartered credit unions received an aggregate financial year 2010 margin credit of $1.45 million, which equaled a full  fourth-quarter fee holiday for 2010, as well as a partial holiday on their 2011 first quarter fees paid to the regulatory agency in April 2011. That was in addition to the aforementioned financial year 2011 fee holiday and partial credit for fourth-quarter  2011 and first quarter 2012, respectively.
     
    "We are particularly pleased that the prosecution and favorable settlement of the regulatory fee case continues to provide direct financial remuneration to our 285 Illinois state-chartered credit unions," Olson said.
     
    "The latest credit shows that the settlement terms we negotiated with the State in 2008 remain beneficial for our credit unions," said Dan Plauda, ICUL president/CEO. "Certainly, it comes at a good time given the continuing difficult economic and regulatory environment."
     

    Cybersecurity, postal bill on tap this week in Congress

    WASHINGTON (4/24/12)--Credit unions remain on the lookout for a potential vote on a Senate bill that would increase member business lending authority, and while that vote could come at any time, it is unlikely to occur before the next Senate recess begins on April 30 because of a busy legislative schedule.

    However, there is still plenty to watch in Washington this week.

    Debate on the 21st Century Postal Service Act of 2012 (S. 1789), which would reduce postal service days from six to five and give the postal service greater flexibility in how it increases its rates, is expected to begin again today and could conclude this week.

    A group of cyber-security bills are also expected to come up for discussion in the U.S. House. Those bills are:
    The Cyber Intelligence Sharing and Protection Act (H.R. 3523) is also expected to be discussed in the House this week. That bill would task the Office of the Director of National Intelligence with developing cyberthreat information sharing guidelines between public- and private-sector organizations. The Credit Union National Association supports this legislation. (See related NewsWatch story: What is Congress doing about Cyber-Security)

    The Small Business Credit Availability Act (H.R. 3336), which would preserve the rights of credit unions and other small financial institutions to use swaps to hedge interest rate risk, is on the House schedule for Wednesday, and CUNA also supports this bill.

    The committee calendar is also busy this week. The House Homeland Security subcommittee on oversight today will hold a hearing entitled: "America is Under Cyber Attack: Why Urgent Action is Needed." Oversight of the U.S. Securities and Exchange Commission will be covered during a Wednesday House Financial Services capital markets subcommittee hearing.

    Wednesday will also feature home refinancing discussions during a Senate Banking housing, transportation and community development subcommittee hearing, and the Senate Homeland Security and Governmental Affairs' oversight and government management subcommittee has scheduled a Thursday hearing on financial literacy. 

    Thursday will also feature a House Ways and Means select revenue measures subcommittee hearing on tax extenders.

    SECU tax prep services save members $86M

    RALEIGH, N.C. (4/24/12)--State Employees' CU (SECU) tax preparers have just completed the 2012 tax season, helping nearly 65,000 North Carolina taxpayers claim more than $86 million in refunds and save in excess of $8 million in preparation fees.
     
    Through the Internal Revenue Service Volunteer Income Tax Assistance (VITA) program, SECU tax preparers filed over 57,000 member returns--a substantial increase from last year's figure of nearly 48,000.
     
    For members whose income thresholds fall above the VITA guidelines, SECU's low-cost tax preparation services helped 7,000 tax return filers, up 30% from the nearly 5,000 served in 2011. Also, more than 26,000 credit union members took advantage of discounted TurboTax services via SECU's website. 
     
    SECU continues to actively promote its tax preparation services and ensure that members not only avoid high fees associated with tax return preparation, but are educated on various tax credits for which they qualify. The efforts also have paid off for members, with 65,000 members claiming more than $40.7 million in tax credits in 2012, including $22.7 million in Earned Income Tax Credits and more than $12 million in Child Tax Credits.
     
    VITA and low-cost tax prep services appointments also provide SECU staff time to assist members with budgeting and financial counseling.
     
    "Our goal at SECU is to help members and all North Carolinians keep more money in their pockets," said Tenesha Carter, SECU's senior vice president of tax preparation services. "The dedicated efforts of credit union tax preparers are helping SECU achieve that goal, and the amount of dollars saved on tax preparation fees confirms the positive difference SECU is making in the financial well-being of our state."
     
    SECU, based in Raleigh, N.C., has more than $23 billion in assets.  

    Mortgage SARs up in 2011; crimes could be declining

    WASHINGTON (4/24/12)--The total number of mortgage loan fraud suspicious activity reports (MLF SARs) increased by 31% between 2011 and 2010, mainly due to mortgage repurchase demands, the Financial Crimes Enforcement Network (FinCEN) reported.

    The agency released its MLF SARs report on Monday, and FinCEN Director James Freis Jr. also discussed these latest mortgage fraud numbers and other FinCEN issues at the Mortgage Bankers Assocation's National Fraud Issues Conference on Monday.

    Financial institutions submitted 92,028 MLF SARs in 2011 and 70,472 in 2010, FinCEN said. MLF SARs accounted for 12% of all SARs filed in 2011, the FinCEN report said, representing an increase from the 10% share of total shares they represented in 2010.

    However, the report added, the total number of MLF SARs filed in the fourth quarter of 2011 was lower than the 2010 fourth quarter total. While it is too soon to call this a trend, Freis in the report said initial numbers for the first quarter of 2012 appear to show a continued decline in MLF SAR filings.

    Around 84% of the MLF SARs reported involved amounts below $500,000, according to the FinCEN report. Some of the types of suspicious activity reported included: Overstated income on loan applications, loan workout or debt elimination attempts, questionable refinance or loan modification attempts by borrowers or others targeting distressed homeowners, and Social Security number discrepancies submitted in the original loan application and the workout request.

    Income misrepresenations and invalid documents are, in some cases, being spotted and rejected before they can cause any damage, and FinCEN said the 2011 annual roundup indicates that due diligence by mortgage lenders has improved significantly since the height of the housing bubble. Financial institutions are "spotting activity that appears to be fraud before it happens and in the process, helping to prevent it," Freis said in the release.

    California, Hawaii, Florida, Nevada, and the District of Columbia had the highest amounts of SAR filings, per capita.

    Fries said that FinCEN's recently enacted rule that requires non-bank residential mortgage lenders and originators to establish anti-money laundering programs and file SARs "will augment FinCEN's initiatives in the mortgage fraud area." FinCEN is also considering adding "a range of consumer and commercial finance businesses" to the list of businesses that are required to file SAR reports, and will also consider regulations for settlement related businesses, Freis added in his remarks.

    For the full FinCEN report and Freis's remarks, use the resource links.

    Media highlights MBL progress

    MADISON, Wis. (4/25/12)--Credit unions continue to reap media attention for their efforts to increase member business lending (MBL) authority.
     
    A pending Senate bill (S.  2231), like its counterpart introduced in the House (H.R. 1418), would increase the MBL cap to 27.5% of a credit union's assets, up from 12.25%, under certain conditions.
     
    Within the first year of enactment, the increased MBL authority would help to inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA estimates show.
     
    Senate leadership remains committed to a floor vote on the credit union legislation to increase the member business lending (MBL) cap, a pledge reiterated Monday by Sen. Charles Schumer (D-N.Y.), the third-ranking Democrat in the Senate.
     
    An article in the April 22 edition of The Wichita Eagle described how two Kansas credit unions, reaching current MBL thresholds, may have to start saying 'no' to small businesses seeking loans because of the current 1225% cap.
     
    "Our small business members have been hearing the message we may have to say 'No,' because this arbitrary cap is upon us," Garth Strand, CEO of Hutchinson (Kan.) CU, told the Eagle. "Short of being out of compliance and being out of regulation, we don't have any choice but to comply."
     
    Strand stressed that increased business lending should not be framed as a banks-versus-credit union issue.
     
    "It's really a small-business issue," Strand said. "Our economy is struggling, and we need as many jobs as we can get. We should be looking for solutions and not roadblocks."
     
    In the same article, Bob Corwin, CEO of the state's largest credit union at $820million in assets,  Wichita-based Meritrust, said member business loans account for about 5% of its asserts right now.
     
    "We think, just from the principle of the thing, credit unions should not be restricted in any kind of lending without any real rationale or justification for it," Corwin told the paper.
     
    Haley DaVee, vice president of governmental and public affairs for the Kansas Credit Union Association, noted in the article that an MBL cap increase would not  mean an immediate explosion in business lending by credit unions. She noted the bill would lift the cap only for credit unions that:

     
    Hutchinson Strand concluded the article expressing hopes the bill passes because he doesn't want to be forced to turn away from his small business members' needs:  "We are trying to find a solution for them, and we are stuck," he said.

    The current MBL cap also prevents some credit unions from entering the business lending market, Scott Earl, president/CEO of Mountain West Credit Union Association told the Colorado Springs Business Journal  (April 23).  "It was not a big enough part of their lending portfolio to hire experts in small business lending," Earl said. "But, with a higher cap, credit unions that had been reluctant to get into small business lending may embrace it.
     
    Mountain West Credit Union Association represents credit union in Arizona, Colorado and Wyoming.
     
    "That is where we could see the biggest change happening," Earl said. "Most (credit unions) would find it appealing --if it fits into their business plan, they would think about this."
     
    In an article in Finance & Commerce, Patrick Pierce, CEO at the City and County CU in St. Paul, stressed that the MBL legislation would improve the economy at no cost to tax payers.
     
    "Congress wants to see the economy grow, and we want to get more loans out to businesses that will put people back to work," said Pierce said. "If they let credit unions do what we do well, we'll help create jobs, and it's not going to cost the government a dime."
     
    Ryan Donovan, senior vice president of legislative affairs for the Credit Union National Association, explained in the Finance & Commerce article that credit unions increased  their business lending efforts during the recession, while commercial lending at banks declined.
     
    Data from regulators showed business lending at Minnesota credit unions grew between 1.1 % and 11.8% between 2007 and 2011. Meanwhile, business lending (excluding commercial real estate) fell 11.3% at Minnesota-chartered banks in the 2009- 2011 period.
     
    In a April 22 NewsOK article, Gary Jones, president of Credit Union Association of Oklahoma, said allowing credit unions to make more business loans would create more jobs and enhance the U.S. economy.
     
    "The members of the credit unions have not been able to get money from the commercial banks because generally they're not of a size that they (the banks) are even interested in," Jones said. "Our members have come to us and said we'd like to have some money for our business, and there is an artificial cap on what we can loan that we know is restricting our ability to respond to these requests from our members."
     
    Bill Hammond, president/CEO of the Texas Association of Business contributed an opinion editorial to the Houston Chronicle in favor of the legislation. Hammond also noted that business lending at banks has plummeted in recent years.
     
    "But there has been one bright spot in the tough lending picture, and that is credit unions," Hammond wrote.
     
    "Credit unions have been not-for-profit for more than 100 years and still have less than 5% of the business-lending market," he added. "It's unlikely that raising the cap will do anything other than provide more small business owners the chance to succeed while filling gaps in the marketplace."
     
    Mike Beall, Missouri Credit Union Association president/CEO, contributed a letter to the editor to recent edition of the Springfield Business Journal.  Beall described how the MBL legislation would create jobs and help small businesses in Missouri.
     
    "It's time to do all we can to raise capital safely and soundly for small businesses," Beall wrote in his letter.

    Market News

    MADISON, Wis. (4/24/12)

    News of the Competition

    MADISON, Wis. (4/24/12)

    Kansas CUs honor five

    WICHITA, Kansas (4/25/12)--More than 350 Kansas credit union representatives gathered in Wichita last weekend to mark the Kansas Credit Union Association's (KCUA) 77th Annual Meeting and Convention, and to witness five of their colleagues receive honors. 
     
    Click to view larger image Larry Eisenhauer, left, president/CEO of Kansas Corporate CU, Wichita, received the Henry Peterson Professional of the Year Award at the Kansas Credit Union Association's (KCUA) 77th Annual Meeting and Convention .  Pictured with Eisenhauer are KCUA staff Marla Marsh, Bob Mayes and Elizabeth Stuart.
    The two-day event featured industry speakers and a variety of educational and networking opportunities. The keynote presentation by Mark Sievewright, president of CU Solutions at Fiserv, addressed the ever-changing financial landscape.  Other sessions included social media, member relations, credit bureau fraud and sessions specifically for young professionals.
     
    The five credit union leaders honored at the event included:
    Mid American CU was also recognized for winning a first-place award in the Desjardins Youth Financial Education Program. The Wichita-based credit union won the award for teaching a financial literacy course to more than 500 students as part of a summer youth program in some of Wichita's most culturally diverse and economically disadvantaged neighborhoods.
     
    Click to view larger image From left, Bob Corwin and Rick Dodds of Meritrust CU with John Smith, Kansas Department of Credit Unions at the Kansas Credit Union Association Annual Meeting. (Photos provided by Kansas Credit Union Association.)
    As part of the association's business meeting, KCUA conducted its annual board elections. The Executive Committee was elected. It includes:
    Newly-elected board members include:
    KCUA board members continuing their terms include:

    Inside Washington

    CFPB extends deadline for overdraft information

    WASHINGTON (4/25/12)--Interested parties now have until June 29 to provide information to the Consumer Financial Protection Bureau (CFPB) about overdraft protection plans and how they affect consumers.

    The CFPB launched its comment initiative on Feb. 28 and first intended it to end April 30.

    The Credit Union National Association (CUNA) in an April 16 comment letter told the bureau that overdraft protection is an extremely important topic for credit unions, which offer a variety of programs. CUNA asked the CFPB to extend a comment period.

    The CFPB has said it is particularly focused on gathering information on the practice of re-ordering purchases and payments to maximize overdraft fee charges, on whether consumers can anticipate and avoid overdraft fees, and on how differences in the way institutions explain and promote overdraft programs may affect opt-in rates.

    The longer comment timeframe, CUNA wrote, would help ensure the agency has the information it needs.

    American Banker survey shows strong reader MBL support

     WASHINGTON (4/25/12)--In a poll of its readers, American Banker  found that 70% of respondents backed the idea of increased member business lending (MBL) authority for credit unions.

    The poll results, which first ran in the April 23 issue and were updated Tuesday, showed 60% of respondents flat-out supported more credit union MBLs, choosing the answer option that stated:  Yes--competition is as healthy for lending as it is for other markets.

    Another 10% indicated they could support increased MBL authority if credit unions are required to hold plenty of capital to cover losses.

    The remaining 31% opposed increased small business lending for credit unions.

    American Banker is owned by SourceMedia and is geared toward senior-level financial services executives. SourceMedia's Banking Group is comprised of American Banker  (website, daily newspaper, eNewsletters, and iPad app), Bank Technology News (website and monthly print publication), and American Banker Magazine, formerly USBanker.

    Credit Union National Association Executive Vice President John Magill noted that the survey results come in the middle of an all-out assault by banking trade groups trying to block CUNA-backed legislation that would increase the MBL cap to 27.5% of assets, up from 12.25%.

    "CUNA, credit unions, small businesses, and consumer and business groups support an increase in the MBL cap and are urging lawmakers to allow credit unions to do more to help the economy through more lending," Magill said Thursday. "Who knew 70% of bankers feel the same way?"

    Senate leadership has put Sen. Mark Udall's (D-Colo.) MBL cap increase bill on the voting calendar for this year, and just yesterday that body's third-ranking member, Sen. Charles Schumer (D-N.Y.), reiterated the Senate's commitment to a floor vote.

    "While much was made earlier this week of whether the MBL vote will come earlier in this session of Congress or later, the truth is--respect to the procedural status of the MBL bill--nothing has changed," Magill said.

    He added, "Scheduling of a vote is always a function of a crowded Senate schedule. What is more important than the timing of the vote is winning the vote."

    CUNA: Will CFPB card limits plan impact CUs?

    WASHINGTON (4/25/12)--Credit unions are asked to weigh in on a Consumer Financial Protection Bureau (CFPB) plan to revise Regulation Z regarding credit card fee limitations, and whether the proposal will have any direct impact on their operations.
     
    In a Comment Call to credit unions, the Credit Union National Association noted that the CFPB proposal would amend the provision of Reg Z that limits the total amount of fees that can be charged on a credit card account "prior to account opening and during the first year after account opening." 
     
    Under the proposed rule, this limitation would apply only "during the first year after account opening."
     
    It is CUNA's opinion, the Comment Call said, that overall the proposal is positive and will benefit some credit card issuers, but that it will not have a major impact on credit union issuers directly, based on the fees they typically charge on members' credit card accounts.
     
    The CFPB is accepting public comments on its proposal until June 11. CUNA's comment deadline is May 28.

    EMV dilemma explored in TMG paper

    DES MOINES, Iowa (4/2512)--Even as the terms "EMV" and "chip-and-PIN" became nearly synonymous over the past few years, some players have chosen a different route--namely, chip-and-signature. That is the subject of a new white paper from TMG, "Chip Card Debate: U.S. Weighs Benefits of PIN and Signature Formats."
     
    Chip & PIN is the brandname adopted by the banking industries in the United Kingdom and Ireland for the rollout of the EMV smartcard payment system for credit, debit and ATM cards.

    Chip-and-signature technology features both an embedded encrypted chip and traditional magnetic strip to accommodate merchants in the United States
     
    The paper follows updated roadmaps to EMV migration from Visa, Mastercard and Discover. Throughout, author Aris Jerahian,TMG vice president of client relations, compares the benefits and limitations of each and discusses the elements to the Europay- Mastercard-Visa (EMV) standard migration that smaller issuers, like credit unions and community banks, need to take into account.
     
    "Until such a time as EMV achieves critical mass in the U.S., issuers must consider leaving mag-stripes on all EMV plastic," writes Jerahian. "Even with Visa's 2015 deadline, merchants across the country are still evaluating whether or not to invest in chip-card terminals now. And after they inevitably make the decision, switching point of sale and back-office systems to the new technology will take time."
     
    Magnetic stripe technology is essentially insecure, Jerhian explains in the white paper. Because fraudsters are unable to skim data from a chip card, EMV in the U.S. is predicted to greatly reduce losses from the sophisticated skimming rings already operating within our borders.
     
    Indeed, the U.S. has gained international attention for its failure to adopt EMV as a standard. The U.S. accounted for 47% of global credit and debit card fraud as of December 2011, according to Global Card Fraud. The stat is even more troubling when taken in the context that Americans only generate 27% of the total volume of purchases and cash.
     
    Jerahian concludes the paper with five considerations for financial institutions thinking about a migration to EMV, including current and future fraud losses, cardholder convenience, interchange income, portfolio segmentation and education.

    One nomination received for CUNA Board election

    MADISON, Wis. (4/25/12)--The Credit Union National Association is holding a special election for the District 5, Class C Board of Directors position, previously held by Harriet May, who resigned March 31. 
     
    Tony Budet, president of University FCU in Austin, Texas has been nominated for the position.
     
    Credit unions in this category were notified of the special election on April 3. 
     
    All nominations must be received by close of business on Friday.  If contested, ballots will be sent and voting will take place from April 30 to May 25. 
     
    The term of office will begin immediately upon election and will continue through the adjournment of the 2014 CUNA Annual General Meeting.
     
    Class C credit unions are those with at least 86,000 natural person members. 
     
    To request additional information or file a nomination, call 800/356-9655, x4013 or email thanson@cuna.coop.

    Two CUs settle ATM lawsuits in Michigan federal courts

    DETROIT (4/25/12)--Two Michigan credit unions, ACC Community CU in Grand Rapids and Lenco CU in Adrian, have settled separate ATM class-action lawsuits brought by area retiree Nancy Kinder who has filed nearly 40 lawsuits against credit unions and banks under the Electronic Funds Transfer Act (EFTA).
     
    The ACC Community case was settled in U.S District Court for the Western District of Michigan. The Lenco CU case was in U.S. District Court for the Eastern District of Michigan.
     
    Michigan couple Nancy Kinder and Ray Harrison of Fowlerville, Mich., who are both retirees--have driven around the country looking for ATMs without proper fee notification signs. The two then photographed ATMs that lack legal signage and filed class actions against the credit unions and banks that own the ATMs, saying that nondisclosure of fees for ATM transactions violates EFTA, according to court records. In 2010 and 2011, Kinder and Harrison filed dozens of lawsuits in Michigan, New Mexico and Texas (News Now May 24). 
     
    The EFTA requires ATM owners to post a fee notice on the outside of their machines. As stated in the settlement documents filed with the court, both credit unions dispute that the plaintiffs have suffered any actual harm or damages as a result of the absence of an on-machine posted fee notice, and acknowledge that the ATMs are equipped with on-screen fee notices that permit the customer to cancel the transaction before incurring a fee.

    However, given the expense of litigation, both credit unions agreed to settle the cases against them. Under the settlement, both credit unions have agreed to pay nonmember users of specific ATMs up to $250 to settle EFTA violations.
     
    Each credit union also will pay $1,000 to Kinder, and $15,000 in legal fees. Lenco CU has agreed to set aside $23,500 to satisfy the claims of up to 1,155 potential claimants--based on the number of nonmember transactions that took place at a specific credit union ATM in Adrian between April 19, 210 and April 18, 2011. Each nonmember withdrawing from that ATM is eligible for a pro-rata share of the settlement fund, but no claimant may receive more than a $250 payment.

    After all individual claims have been settled, any money remaining in the settlement fund--up to $5,000--will be donated to Kinder's designated charity--the Karmanos Cancer Institute.
     
    ACC Community CU agreed to put aside $27,000 to satisfy the claims of up to 1,844 claimants, which is based on the number of nonmember transactions that took place at ACC's ATMs in three locations between April 26, 2010 and April 25, 2011. Each nonmember withdrawing from that ATM is eligible for a pro-rata share of the settlement fund, but no claimant may receive more than a $250 payment. Any funds remaining after the claimants are paid--up to $7,000--will be donated to Kinder's designated charity--the Karmanos Cancer Institute.

    In both cases, after all claims have been satisfied, and any charitable contribution up to the allowed amounts have been paid, any remaining funds will go back to the credit union or CUNA Mutual Group, which is its insurer. CUNA Mutual, under its bond, is funding the settlement.
     
     

    Design thinking the focus of first 'crash' the ACUC

    MADISON, Wis. (4/25/12)--For the first time, attendees of the Credit Union National Association (CUNA) America's Credit Union Conference (ACUC) will be joined by a select group of 15 young credit union leaders, known across the industry as the Crashers, according to the Filene Research Institute.

    The Crash trend was born from a 2010 Filene Research Institute project in which a group of young credit union professionals crashed the Credit Union National Association (CUNA)s Governmental Affairs Conference and the CUNA/World Council of Credit Unions The 1 Credit Union Conference. Three crashers of those events helped create the Washington, D.C., event. This Crash builds on the original program.

    This Crash, like previous events will coincide with the basic conference agenda established by CUNA--including scholarships for registration--but the projects, as a result of the experience, will be different.

    The 2012 Crash the ACUC will be taking on a unique approach when it comes to problem-solving. Starting June 17th, the selected Crashers for Crash the ACUC will be partake in a day-long Design Thinking Workshop led by Julie Norvaisas, design researcher and strategist.

    The team of 15 will initially focus on learning the concepts of design thinking and its applications to solving real-world problems.  During the week, the selected 15 will apply design thinking methods and theory to spark innovation. The result will be a viable business concept for credit unions. Pre-conference assignments will be required to engage the topic and to feed intense research and discovery sessions. In the end, the group will create something wholly new and applicable in the credit union system.

    Sparking the conversations on Sunday will be a focus on community development.

    "The time is ripe for credit unions to be bold," Norvaisas said. "The unbanked and under-banked are a dreadfully underserved market; they commonly fall prey to predatory business practices and struggle to deal with financial transactions that most of us take for granted. Together the group will understand their needs and motivations and discuss the constraints that make it difficult to serve them in traditional financial services businesses, such as credit unions, so we can rise to the challenge."

    There is increased commitment this time around, both from extended on-site time and required homework in advance. With this added investment, Crashers can guarantee their time out of the office will be valuable, as they return home with a real-world solution for their credit union and their community, Filene said.

    In addition to Crash the ACUC, The Cooperative Trust has three national and four regional events planned alongside new opportunities, including year two of The Collider innovation tournament.

    The Cooperative Trust is a grassroots organization hosted by the Filene Research Institute and supported by CUNA Mutual Group. The Cooperative Trust connects and enables young people fighting for the future of socially responsible finance through meet-ups, mentorships, and collective action. For more information, use the link.

    Gov. signs public deposits bill supported by Minn. CUs

    ST. PAUL, Minn. (4/25/12)--Minnesota Gov. Mark Dayton signed legislation late last week after the Minnesota Credit Union Network (MnCUN) and its governmental affairs department were successful in a push for credit union inclusion in the language of a bill involving deposits from public entities.
     
    The public deposits bill (H.F. 2174) was part of an advocacy effort led by MnCUN's governmental affairs team to include credit unions as approved financial institutions able to redeposit funds from the state's cities and counties. The bill unanimously passed in the state House in March and the state Senate last week. It now includes credit unions alongside other financial institutions.   
     
    H.F. 2174 was a key focus for MnCUN's governmental affairs team this legislative session. The MnCUN-supported bill provides additional flexibility to financial institutions in Minnesota that accept public deposits.
     
    "The signing of this public deposits bill recognizes the important role credit unions play in our communities," said MnCUN President/CEO Mark D. Cummins. "This bill equips credit unions for the future in enabling them to promote products and services associated with accepting these deposits."
     
    Several other states also allow credit unions to accept deposits from public entities or else have legislation pending, including California, Illinois, Missouri, New Jersey, New York, Ohio, Oregon and Washington.
     
    Another top priority for MnCUN's governmental affairs team was continuing to ensure that credit unions' tax-exempt status was protected as the state House and Senate considered tax reform legislation. The current state legislative session is expected to conclude soon.

    ACUC speaker explores generational mix

    MADISON, Wis. (4/25/12)--For the first time in history, four generations work, compete, purchase and--often--clash in the marketplace. That trend will only continue as Baby Boomers extend their working years and Nexters-- those born between 2000 and the present--assimilate into the marketplace.
     
    Businesses, including credit unions, have a stake in understanding the differences, nuances and commonalities of each generation.  In her presentation at America's Credit Union Conference, What Makes the Generations Tick and What Ticks Them Off, Anna Liotta, creator of Generationally Savvy Communication Solutions, will describe how credit unions can leverage this understanding to improve the performance of their organizations.
     
    "A lot of money is spent work around people's personalities when a better perspective of what shaping and informing their decisions would provide more value," Liotta told News Now. "This talk will help people understand why the approach one person takes may seem so ineffective to you but comes naturally to them. "
     
    Most generational clashes are unintended, and most of the parties involved have no idea how they are rubbing the other party the wrong way, Liotta said.
     
    She offers the different approaches of Generation X—those born between 1964 and 1979 and Baby Boomers, who were born between 1946 and 1963.
     
    "Gen Xers want to get right to the bottom line," Liotta explained. "Gen Xers don't think there's any business conversation that should take any longer than 20 minutes."
     
    Baby Boomers, on the other hand are all about relationships, she explains. "They want to know where you're from and how many kids you have and where you went for vacation," Liotta said. "This drives Gen Xers crazy."
     
    As for Generation Y,  those born between 1980 and 1999? "They like to tell you about their accomplishments," Liotta said.
     
    Credit unions offer a value proposition that resonates with Boomers, Xers and Gen Y.
     
    For Boomers, many of whom helped form credit unions,  they offer great financial value, a better deal than the banks, Liotta said.
     
    For Gen X, credit union offer a transparency and a spirit of individualism that Xers can relate to with big financial institutions. "Xers are looking for boutique-type organization and that independent credit union brand appeals to them as both consumers and employees."
     
    Gen Yers, who are always looking for a cause to align themselves with, prefer credit unions community based approach, Liotta said.
     
    Liotta said credit unions must communicate who they are and what they do within a framework that identifies the values of each generation.  Her ACUC presentation will help credit unions understand those values.
     
    "We will learn what shapes each generation's world and what it looks like on a day-to-day basis as they make decisions," Liotta said. "Then we'll explore  how credit unions can be effective in communicating to them at a level that appeals to each generation."

    Fed policymakers expected to leave rates unchanged

    WASHINGTON (4/25/12)--Federal policymakers are expected to leave policy rates unchanged after the Federal Open Market Committee (FOMC) meeting yesterday and today.
     
    Policymakers likely will repeat their plan to keep the benchmark interest rate low at least through 2014, economists said (Bloomberg.com April 24). 
     
    However, the Federal Reserve will raise borrowing costs by June 2014, according to a survey of economists conducted by Bloomberg News this month.
     
    Traders will be focusing on any changes in the evaluation of the economy in the meeting announcement and on changes in guidance. Also, the Fed will release its quarterly forecast between the announcement and the chairman's press conference, according to the FOMC meeting announcement.
     
    It is not expected that any announcement will be made regarding another round of quantitative easing (QE3) until the May/June FOMC meeting (heryliuforex.com April 24).
     
    The FOMC will release its policy statement and forecasts early this afternoon in Washington.
     
    Watch today's News Now coverage for a live update on the meeting. 

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    Texans CU improves under NCUA oversight

    ALEXANDRIA, Va. (4/25/12)—The financial condition of Texans CU, which was taken under conservatorship by the National Credit Union Administration (NCUA) last April, has improved, with that credit union posting $5.87 million in income in the first quarter of 2012, the NCUA reported.

    The credit union held $1.48 billion in total assets as of March 31, an increase from the $1.42 billion it held at the end of 2011. The credit union's net worth also improved by 35 basis points during the first quarter of 2012.

    NCUA Region IV Director Keith Morton said the agency wants to "continue efforts to transition Texans to a financially strong credit union."

    For the past year, we reduced expenses, streamlined operations, retooled infrastructure, and began the process of returning Texans to the core credit union business model," and the NCUA is "very encouraged by the credit union's positive financial results," Morton said. The credit union is planning to introduce new financial products and a new website and online banking and bill payment platform this year, the NCUA added.

    The Richardson, Texas-based credit union serves residents of Collin, Dallas, Rockwall, Travis, and Williamson, as well as parts of Denton County.

    CU short-term loans; the safe, affordable choice: CUNA

    WASHINGTON (4/25/12)--Credit unions and the Credit Union National Association (CUNA) are committed to providing a safe and affordable alternative to predatory payday lenders, and credit unions across the country have implemented various programs in order to provide individuals in their communities an alternative to high-priced payday lenders, CUNA said in a comment letter to the Consumer Financial Protection Bureau (CFPB).

    The comment letter followed a recent CFPB hearing on payday lending. That hearing featured testimony from Daryl McMinn, vice president of operations of Listerhill CU of Sheffield, Ala., and various payday lending experts, regulators, and financial industry representatives.

    In the comment letter, CUNA Assistant General Counsel Luke Martone said CUNA supports the ability of credit unions to provide beneficial short-term, small amount loans as alternatives to predatory payday lending, which have "no place in the financial marketplace."

    Payday loans from federal credit unions are generally limited to an annual percentage rate of no more than 18%. However, under the National Credit Union Administration's (NCUA's) short-term, small amount loan program, federal credit unions may offer certain short-term loans at an APR as high as 28%, provided certain terms are met.

    To offer the NCUA-approved higher loan rate, the loan principle must be between $200 and $1,000, and the term of the loan must be between one and six months. Fees tied to the loan may not exceed $20, and lenders may not roll over the short-term loans.

    For the full comment letter, use the resource link.

    CUNA backs swaps exemption bill

    WASHINGTON (4/25/12)--The Credit Union National Association (CUNA) on Tuesday said it supports the Small Business Credit Availability Act (H.R. 3336), which would preserve the rights of credit unions and other small financial institutions to use swaps to hedge interest rate risk.

    Under the terms of the legislation, credit unions and other small financial institutions with under $1 billion in cumulative current uncollateralized credit risk exposure and potential future credit risk exposure would be granted an exception from portions of the Dodd-Frank Act that barred certain institutions from engaging in swap transactions.

    CUNA President/CEO Bill Cheney in the letter thanked H.R. 3336 sponsor Vicky Hartzler (R-Mo.) for introducing the legislation, and said CUNA looks forward to working with her as the bill moves through Congress.

    Relatively few credit unions use derivatives to hedge interest rate risk, but the National Credit Union Administration (NCUA) is considering allowing more credit unions to use derivatives to hedge those risks.

    The NCUA currently allows a limited number of federal credit unions to engage in derivatives through an investment pilot program, and the agency could permit more credit unions to independently use derivatives to hedge IRR. The agency in an advanced notice of proposed rulemaking has suggested that credit unions that demonstrate a relevant, material IRR exposure, have demonstrated the ability to manage derivatives, and have the net worth and financial health needed to manage derivatives could be allowed to invest in interest rate swaps and interest rate caps.

    CUNA earlier this month commended the NCUA for taking on the derivatives issue, and said it supports allowing well-managed credit unions to invest in derivatives through third-parties. CUNA also supports granting independent derivative investment authority for certain credit unions with adequate derivatives experience. (See related April 5 News Now story: Allow CU derivative investments as risk management tool: CUNA to NCUA)

    Pa. primary candidate has CU backing

    WASHINGTON (4/25/12)—The Credit Union Legislative Action Council (CULAC), the Pennsylvania Credit Union Association (PCUA), and local credit unions are among those that helped former State Rep. Scott Perry (R) in his Republican U.S. House primary efforts, which concluded last night.

    Perry defeated fellow nomination hopefuls York County Commissioner Chris Reilly, Kevin Downs, Eric Martin, Sean Summers, Mark Swomley and Ted Waga in Tuesday's primary.

    He will face Democratic challenger Harry Perkinson in November's general election. The candidates will vye for Pennsylvania's fourth district U.S. House seat, which is being vacated by current congressman Todd Platts (R).

    Perry served two terms representing Pennsylvania's 92nd district, which includes parts of Cumberland County and York County. He is also a military veteran and currently serves as a Colonel in the Pennsylvania Army National Guard.

    The former state legislator is supportive of credit union member business lending increase legislation and other credit union priorities, and has used his credit union to obtain funding for his own small business. The PCUA and credit unions have supported Perry with canvassing efforts, and CULAC financially supported the candidate.

    Credit Union National Association (CUNA) Vice President of Political Affairs Trey Hawkins said CULAC "will continue to be in the game on behalf of credit union-friendly candidates, and will aggressively support credit union friends in this year's elections."

    The presidency, congressional seats, and state and local positions are all at stake in 2012.

    NCUA reminds of dos-and-don'ts of compensating loan originators

    ALEXANDRIA, Va. (4/25/12)--Credit unions that make closed-end residential mortgage loans will have "new flexibility" regarding how they compensate some of their loan originators, the National Credit Union Administration (NCUA) said in a letter (12-RA-03) sent to credit unions this week.

    Under the terms of the Dodd-Frank Act, loan originators may not be paid funds that originate from any mortgage transaction. The rule is intended to prevent loan originators from increasing their own compensation by raising the consumers' loan costs, such as by increasing the interest rate or points.

    However, the CFPB earlier this month said, in its interpretation, that the compensation rules would permit financial institutions to use funds collected from loan originations to pay for employee qualified profit sharing, 401(k), and employee stock ownership plans. This determination is not final, the CFPB said, adding that a rule addressing this issue is expected to be released by the bureau before January 21, 2013.

    As a result of the CFPB guidance, Matz said, credit unions may now make contributions to qualified plans for loan originators out of a pool of profits derived from loans originated by employees.

    The NCUA Chairman did, however, warn credit unions with discretionary non-qualified pension plans that are tied to profit targets to amend those plans to exclude income from closed-end mortgage loan originations. "If your credit union has a pension plan that establishes the employer's contribution amount based on a loan originator's income, that plan is particularly at risk," Matz said.

    For the full NCUA letter, use the resource link.

    NEW: FOMC keeps federal funds rate at 0% to 0.25%

    WASHINGTON (4/25/12--Filed at 1:15 p.m. ET)--The Federal Open Market Committee (FOMC)--the Federal Reserve's monetary policymaking group--voted to maintain the target range for the federal funds rate at 0% to 0.25% at its meeting concluded today. The FOMC also said there are likely to be very low levels for the federal funds rate at least through late 2014.

    The FOMC said information it received since it met in March suggests that the economy has been expanding moderately. Labor market conditions have improved in recent months; the unemployment rate has declined but remains elevated. Household spending and business fixed investment have continued to advance. Despite some signs of improvement, the housing sector remains depressed. Inflation has picked up somewhat, mainly reflecting higher prices of crude oil and gasoline. However, longer-term inflation expectations have remained stable.

    Consistent with its statutory mandate, the FOMC seeks to foster maximum employment and price stability. The FOMC expects economic growth to remain moderate over coming quarters and then to pick up gradually. Consequently, the committee anticipates that the unemployment rate will decline gradually toward levels that it judges to be consistent with its dual mandate.

    Strains in global financial markets continue to pose significant downside risks to the economic outlook. The increase in oil and gasoline prices earlier this year is expected to affect inflation only temporarily, and the FOMC anticipates that subsequently inflation will run at or below the rate that it judges most consistent with its dual mandate.

    To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the FOMC expects to maintain a highly accommodative stance for monetary policy.

    In particular, the FOMC decided today to keep the target range for the federal funds rate at 0% to 0.25% and currently anticipates that economic conditions--including low rates of resource use and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

    The FOMC also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction.

    The FOMC will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.

    Voting for the FOMC monetary policy action were: Ben S. Bernanke, chairman; William C. Dudley, vice chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen.

    Voting against the action was Jeffrey M. Lacker, who does not anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate through late 2014.
     

    Lt. Gov. addresses Michigan league GAC

    LANSING, Mich. (4/26/12)--Michigan Lt. Gov. Brian Calley, addressing the Michigan Credit Union League (MCUL) Governmental Affairs Conference (GAC) in Lansing, Mich., last week, talked about state tax structure, jobs, and credit union member business lending.
     
    Mich. Lt. Gov. Brian Calley was the keynote speaker the Michigan Credit Union League Governmental Affairs Conference in Lansing, Mich. last week.
    The 1990s were great for Michigan with lower unemployment and higher prosperity than the national averages, but those numbers were flipped for the 2000s, Calley said. (Michigan Monitor April 23).
     
    Calley ran with Michigan Gov. Rick Snyder on a platform that they would reinvent Michigan to be more business friendly and to encourage existing companies to expand.
     
    For the first time in 15 years, the state's tax policy is not designed to promote outside businesses coming in, meaning existing businesses actually pay more, Calley said.
     
    "Everybody's for jobs," he added, "but if you want more of them, it's kind of important to understand where they come from."
     
    One of the most important changes the administration made was to reform the state's business tax, which was considered the second worst in the United States, and replace it with one that is simple and now ranked seventh best, Calley said.
     
    Michigan Credit Union League CEO David Adams said credit unions can offer more services by taking advantage of resources such as credit union service organizations. (Photos provided by Michigan Credit Union League)
    He said that the state still has $638 million in tax breaks on the books, but slowly, that number will fall. Despite the tax breaks, the state ended up losing jobs in the relocation category anyway.
     
    In addition, the Snyder administration has gone after needless regulations by forming the Office of Regulatory Reinvention. In just one year, Calley said, the state reduced the number of regulations by 400.
     
    He added that the work is starting to show dividends. Last year, the state saw 80,000 new private sector jobs and per-capita income rose 5.2%.
     
    Calley said that like credit unions, the state has focused on customer satisfaction. He also challenged credit unions to learn what their members dream of and find out what they can do to help.
     
    MCUL CEO David Adams told the GAC audience that when he was recognized as U.S. Small Business Administration (SBA) as the 2012 National Financial Services Champion,  both in the state and nationally, it showed that the industry as a whole is really on an upward path.
     
    "It's reflective of what our industry has been doing," Adams said. "People are discovering credit unions like never before."
     
    He emphasized that credit unions have an unprecedented opportunity during this session of the U.S. Congress when the Senate is expected to vote on an historic credit union bill that would raise the limit on member business lending.
     
    "Credit unions are being noticed for their efforts on small business lending," Adams said.
     
    Adams said credit unions--even small institutions--can do a better job of marketing more services by taking advantage of resources such as credit union service organizations.
     
    Because of their tax-exempt status, Adams said credit unions have an obligation to reach out to consumers to help the country reverse some troubling statistics, such as the one-third of U.S. adults who say they have no non-retirement savings and the 32% who say they are saving no part of their household income for retirement.

    CUNA, Coopera offer Hispanic Webinar series

    DES MOINES, Iowa and MADISON, Wis. (4/26/12)--Coopera has partnered with the Credit Union National Association (CUNA) to host a series of webinars for credit unions. The objective is to educate as many credit union leaders as possible on the importance of adapting products and services to meet the needs of Hispanic members. 
     
    The webinar series has so far garnered attendees from more than 100 credit unions. More webinars are scheduled for the remainder of the year, with the next set to take place on May 16 from 1:30 to 2:30 (CT).
     
    Each hour-long webinar will offer credit unions ideas and best practices for reaching --and best serving --Hispanic consumers in local communities nationwide.
     
    "Savvy credit union executives realize the face of the American consumer is changing," said Coopera Vice President Miriam De Dios. "To grow a credit union's membership, leadership must adapt to their new consumers. It is the integration of a Hispanic growth strategy with the credit union's overall strategic future that will ultimately create sustainable success."
     
    Upcoming webinar events include:

    In addition to the upcoming webinars, credit union staff may also view archived webinars for a limited time:

    Senate bill would extend NFIP through Dec. 31

    WASHINGTON (4/26/12)--Some good news--temporary though it may be--for credit unions and other mortgage lenders who have been watching the National Flood Insurance Program escape demise through a series of temporary extensions: a new short-term reprieve has been introduced in the U.S. Senate.
     
    The NFIP is currently set to expire on May 31; somewhat ironically that is the day before the nominal start of the Atlantic hurricane season. Credit unions, as well as other lenders, cannot write certain mortgages without NFIP coverage, and in the past the program has lapsed for brief periods--three times in 2010.
     
    Sen. David Vitter, a Republican from Louisiana, introduced S. 2344 Tuesday night to extend the NFIP through the end of this year. The bill was placed directly on the Senate's legislative calendar, thereby circumventing the banking committee, which has been working on controversial on NFIP reform issues for years.
     
    The Credit Union National Association (CUNA) strongly supports the NFIP program and backs short-term extensions, but also advocates for longer-term approval.
     
    The reforms proposed in the Senate, and which appear to be holding up any long-term reauthorization, are problematic for credit unions, CUNA has noted.  In fact, CUNA has warned lawmakers, they could have the unintended effect of driving some small mortgage lenders, including credit unions, out of the mortgage business.
     
    Particularly at issue is a section of the Senate Banking Committee's NFIP reform discussion draft, which would require all mortgage lenders to escrow for NFIP premiums.
     
    Current law only requires lenders that escrow for taxes and insurance to also escrow for NFIP premiums. CUNA has alerted key Senate lawmakers that there is a significant cost involved with establishing escrow accounts, particularly for credit unions, community banks, and community-based lenders that have small lending volumes.

    MBL increase brings choice, credit access: ACI blog

    WASHINGTON (4/26/12)--Increasing the credit union member business lending cap "means more competition, greater choice, and increased access to capital," American Consumer Institute (ACI) Center for Citizen Research President Steve Pociask said in a recent blog post.

    Separate pieces of House and Senate MBL legislation would increase the MBL cap to 27.5% of a credit union's assets, up from 12.25%. Within the first year of enactment, the increased MBL authority would help to inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA estimates show.

    The Senate version of MBL legislation, the Small Business Lending Enhancement Act of 2012 (S.2231), is on the Senate schedule, but a voting date has not been determined.

    Passing MBL legislation "will mean new investment," and "there is plenty of pent up demand for capital as a result of very restrictive lending by banks," Pociask said. "During the last recession, bank loans fell by the double digits, while credit union lending increased toward its cap. In 2011, banks denied 60% of small business bank loan applications. So the legislation would increase small business access to capital and increase market investment," he added.

    Pociask said the only reason banks oppose the legislation is because it increases market competition. "Because credit unions are pretty good in managing risks and providing affordable loans, banks do not want the market competition – they want market protection. The reality is that heightened market competition would benefit the economy." The increased competition that an MBL cap increase would bring would be good for the economy in general, Pociask said.

    "The [American Bankers Association] doesn't like the bill, and that is precisely why the bill is a step in the right direction. It is as simple as that. It's time to let the market work," he added.

    The nonprofit ACI says its focus is "to support concepts which spur competition, encourage innovation, create jobs and benefit consumers overall, while maintaining reasonable and necessary consumer safeguards."

    For the full blog post, use the resource link.

    CUNA Mutual offers more Discovery Webinars

    MADISON, Wis.  (4/26/12)--CUNA Mutual Group's free Discovery Webinar series  continues in May with two risk management-related events.
     
    Ann Davidson, CUNA Mutual senior consultant, risk management will present "Mobile Financial Services: The New Frontier," at 12:15 p.m. CDT, May 2. The presentation will discuss both the risks and rewards of offering bill payment, money transfer, remote deposit, and other services via mobile devices. Participants will learn how to maintain their competitive edge by offering this service while effectively managing its risks.
     
    Brad Mundine, CUNA Mutual senior manager, risk management will present "Member Business Lending: Get the Volume Without the Noise," will at 12:15 p.m. CT on May 23. The session will focus on the current member business lending environment in the credit union space, providing a practical approach to implementation for risk management recommendations. He'll explore risk management techniques to align credit union lending program with their appetite for risk and examine additional member business lending income-related opportunities to consider as part of credit unions' strategic planning.
     
    Both Discovery Webinars are free, 60-minute events that include live question-and-answer sessions.
     
    To register, use the link.

    Mortgage rule relief needed, CU rep tells CFPB

    WASHINGTON (4/26/12)--The Consumer Financial Protection Bureau (CFPB) should consider meaningful exemptions for credit unions and other small financial institutions as it develops new mortgage servicing rules, American Southwest CU CEO Brian Barkdull said at a CFPB Small Business Regulatory Enforcement Fairness Act (SBREFA) panel discussion held this week in Washington.

    The CFPB earlier this month began working on a series of new mortgage rules that aim to increase transparency and accountability in the market. The SBREFA panels, which are required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, are intended to bring credit unions and other small financial service providers into discussions on any proposed rules that may have a significant economic impact on a substantial number of small providers.

    The Credit Union National Association suggested that Barkdull take part in the panel. Tiffany Michel, vice president of lending at Omaha Police FCU, Omaha, Neb., and Victor Petroni, senior vice president of lending at First New England FCU, East Hartford, Conn., also joined representatives from the CFPB, the U.S. Small Business Administration (SBA), and the Office of Management and Budget at the panel discussion. Representatives from Services Center FCU, Yankton, S.D., Rocky Mountain Law Enforcement FCU, Denver, Colo., and community banks also took part in the discussion.

    During the panel discussions, Barkdull noted that regulatory changes in mortgage servicing do affect and increase his credit union's costs in other areas, such as business loans.

    He also said that he includes regulations alsongside other financial institutions when he thinks of the "competition" his credit union faces, because his Tuscon, Arizona credit union must address both concerns.

    Panel participants also reviewed the CFPB mortgage servicer proposals under consideration, discussed the direct and indirect impact on businesses and consumers, responded to CFPB staff questions, and provided detailed examples from their experiences.

    The panelists urged the agency to minimize duplicative regulations, consider the costs on small financial institutions, consider meaningful exemptions or multi-tiered approaches, and focus on targeting specific problem areas instead of developing overly broad rules.

    The CFPB also plans to conduct additional outreach on the mortgage servicing project to gather feedback from consumer groups, industry, and other agencies.

    Some of the rules under consideration would require mortgage servicers to provide regular mortgage statements covering the mortgage loan's principal, interest, fees, and escrow, the amount of and due date of the next payment, and, in some cases, information on financial and foreclosure avoidance counseling. Servicers would also be required to warn mortgage holders before interest rate changes are made to their adjustable-rate mortgages, to post mortgage payments promptly after they have been received, to increase mortgageholder ease of access to their own account information, and to quickly correct account errors.

    Some of the rules would also address force-placed insurance, which can be purchased by mortgage servicers when mortgage borrowers do not maintain hazard insurance on their properties. Force-placed insurance can often be far more expensive than privately purchased insurance. Under one of the proposals, alternatives to force-placed insurance could be offered to consumers, and warnings and disclosures would need to be provided before force-placed insurance is purchased.

    An advanced notice of proposed rulemaking on the mortgage servicing rules is scheduled to be released this summer, and the rules are scheduled to be finalized in January of 2013. The agency said it could provide an implementation period of up to one year, but has not decided how long of a transition period is necessary yet.

    The CFPB also continues to work on revised mortgage applications and mortgage loan closing documents, and proposed forms of these disclosures are scheduled to be released in July.

    CUNA will be following up with the CFPB on the mortgage servicer rules and other rulemaking efforts, and we will continue to work with the Leagues and credit unions on any further developments.

    Ongoing Operations unveils new website

    HAGERSTOWN, Md. (4/26/12)--Ongoing Operations, the expanding business continuity and cloud solutions credit union service organization, recently unveiled its new website.
     
    Ongoing Operations is a CUNA Strategic Service provider.
     
    The new site showcases the company's expanded product line, which now includes a full-range of cloud solutions. Hosted Exchange, Virtual Desktop, and Application Hosting are three of the featured products that will help credit unions take advantage of production-grade, hosted options that meet their strict security requirements.
     
    "What we can offer credit unions has expanded dramatically over the last year or so," said Kirk Drake, CEO of Ongoing Operations. "We're no longer just a back-up solution. Our production-grade options are helping credit unions streamline their everyday IT operations. It's very exciting."
     
    The website--which can be viewed by visiting either www.ongoingoperations.com or www.cloudworks.com--also reflects the new Ongoing Operations logo and brand--which were updated after the company's recent acquisition of Cloudworks, an experienced cloud services provider.
     
    Resources available to current and potential clients now include both business continuity/disaster recovery and cloud reference materials.

    CUNA, other trades jointly back cyber-security reforms

    WASHINGTON (4/26/12)--The financial services industry is committed to ensuring national cyber-security standards remain strong, and the Credit Union National Association (CUNA) has joined with the Electronic Funds Transfer Association (EFTA) and other groups to urge members of the U.S. Congress to support legislation that is designed to further protect national security in cyberspace.

    The letter, which was sent to Speaker of the House John Boehner (R-Ohio), Minority Leader Nancy Pelosi (D-Calif.,) and all other members of the House of Representatives, noted that the financial services industry has been a leader in defending against cyber attacks, and continuously adopts new technologies and techniques to protect against existing and emerging cyber threats. However, the ever-growing scope, organization and sophistication of those engaging in cyber attacks requires the  government and the private sector to work even harder and more effectively cooperate and share cyber threat information, the letter adds.

    A group of cyber-security bills that aim to address cyber attacks and other online security issues are scheduled to be brought to the U.S. House floor this week.

    The Cyber Intelligence Sharing and Protection Act (H.R. 3523) is among those bills. H.R. 3523 would task the Office of the Director of National Intelligence with developing cyberthreat information sharing guidelines between public- and private-sector organizations. The bill would also provide privacy protections for consumers by limiting the inclusion of consumer data in shared threat information.

    The other bills are:
    The Financial Services Roundtable, NACHA – The Electronic Payments Association, the Financial Services Information Sharing and Analysis Center, The Clearing House, the American Financial Services Association, the National Association of Federal Credit Unions, the Consumer Bankers Association, The Independent Community Bankers of America, and the American Bankers Association joined CUNA and the EFTA in signing the letter.

    For the full letter, use the resource link.

    Credit unions celebrate youth week, financial literacy

    MADISON, Wis. (4/26/12)--This week is National Credit Union Youth Week, sponsored by the Credit Union National Association (CUNA). Credit unions nationwide are focusing providing financial literacy education for young members.
     
    Shamzy Romero, business development officer for Security Service FCU, San Antonio, and Richard Maki, vice principal of the Academy of Finance at Business Careers High School, congratulate Jasmine Ancira for her winning essay on financial literacy. Ancira won $500 and her name added to the academy's "Wall of Honor" through a program developed by SSFCU that encourages students to go through a financial reality check, then write about their plans to be financially stable adults. Ancira is a graduating senior who plans to pursue a career in the financial industry. (Photo provided by Security Service FCU)
    National Credit Union Youth Week was created by the Credit Union National Association (CUNA) in 2001 as an opportunity for credit unions nationwide to focus on the financial needs of young people and provide financial literacy education.  The event focuses on teaching the benefits of saving and goal setting and invites youth to open savings accounts at their credit union and make deposits throughout the year
     
    This year's theme for National Credit Union Youth Week is "Be a Credit Union Super Saver."
     
    National Youth Saving Challenge, also sponsored by CUNA, is also held during the entire month of April. Last year nearly 146,000 young members deposited $28.5 million into their saving accounts during National Youth Saving Week--with 9,058 new accounts.
     
    National Credit Union Youth Week and the National Youth Saving Challenge take place during April, which is National Financial Literacy Month.
     
    There are several ways credit unions are celebrating financial literacy and National Credit Union Youth Week:
     
    FORUM CU, Fishers, Ind. will be celebrating National Credit Union Youth Week at all FORUM branch locations this week.  Events include kids' activities, giveaways, prizes, and three enter to win contests with prizes including an Amazon gift card, iPod Shuffle, and iPod Nano.  FORUM will deposit $5 into any Aware Kids, Aware Teens or Sprout Account that is opened.  FORUM will also deposit $10 into any free Student Checking Account that is opened, which is available for 16 to 24 year olds. Along with accounts for young people, FORUM also provides interactive financial sites as resources.  These sites feature games, activities, blogs, and useful links relating to money.
     
    Maine credit unions' theme for youth this week is "Super Powers of Savings," reflecting the national theme.
     
    Maine's credit unions will be holding events throughout the week including hosting open houses, contests and other activities for younger members. Many credit unions have also partnered with their local school systems to bring financial education to the students, from holding special financial education sessions to running one of Maine's five in-school branches. 
     
    Jon Paradise, Maine Credit Union League governmental & public affairs manager, said  the week is an opportunity to highlight all that credit unions do for financial education in Maine. "The many activities and events offered by credit unions during this time provide the perfect opportunity for parents to engage their children in an active dialogue about personal finance because parental involvement is critical to helping children become fiscally responsible adults," Paradise said. 
     
    Recent proclamations from the governor and the legislature have recognized the "significant leadership role of Maine's credit unions in furthering financial education learning among Maine's youth."  
     
    As part of the youth week celebration, all 18 branches of Grow Financial CU, Tampa, Fla., will be distributing lollipops, activity books and piggy banks to the children of parents who open a new youth savings account or make a deposit to an existing youth savings account.
     
    At Service CU, kids who make a deposit in their  Smart Savers accounts this week will enter the CUNA Savings Challenge. Service CU will also draw one name from the entries to win a $200 gift card. Free gifts are available to all young members visiting a branch. Service CU offers financial education specifically tailored to its three Smart Saver clubs. The three clubs all include a youth savings account and ATM card.
     
    Six credit unions from The Erie Area Credit Union Partnership participated in the recent Annual Kids Expo in Erie, Pa. Hundreds of children attended event, which include music, games, clowns and prizes. At the credit union booth, children received glow-in-the-dark pencils, activity books, and a chance to have their photo taken as a Credit Union Super Saver Hero.
     
    The six credit unions that participated in the Kids Expo included:
    The Erie Area Credit Union Partnership is a collaboration of 12 credit unions located in Erie and the surrounding area.
     
    Youth Club members at Belco Community CU, Dauphin, Pa., will receive special prizes for all branch deposits, special prizes, contests and refreshments when they visit one of Belco's 12 local branches during April. With every deposit of $10 or more into their youth club account, they will be entered to win an Apple iPad2. By saving their money at Belco, children will be helping Belco meet its goals in the National Youth Week Savings Challenge. If the goals are met, Belco will donate $1,000 to the Ronald McDonald House in Hershey, Pa.
     
    Wichita (Kan.) FCU is celebrating youth the entire month of April with promotional activities and contests in its lobbies and on its website and Facebook page. The credit union will match up to $12.50 for children that open up Kids or Teen accounts. Also, every time a teen between the ages of 13 and 18 makes a deposit of at least $10 into their savings account during the month, they will automatically be entered into a drawing. Wichita FCU is also holding a coloring contest for children 12 and under. Kids that bring in a "Credit Union Super Saver" colored page to a location during the month of April to receive a free piggy bank and a chance to win a $25 Toys "R" Us gift card.
     
    ESL FCU, Rochester, N.Y., is holding a workshop on basic personal finance issues. The workshop will cover how to manage money day-to-day, investing and planning for retirement, and setting and reaching financial goals.
     
    California Coast CU, San Diego, has developed a series of new consumer-focused workshops. The financial workshops also offer an opportunity to educate individuals about credit unions and the not-for-profit financial services they offer. California Coast CU works closely with area high schools and colleges in conducting financial literacy presentations. In addition to the financial workshops, the credit union also offers Financial Fitness, a free service designed to help members maximize their paycheck and create a spending plan that they can live with.
     
    At Catholic Vantage Financial CU, Livonia, Mich., kids who make deposits during April will receive a prize and have the opportunity to enter coloring contest or do a puzzle.  During National Credit Union Youth Week at Catholic Vantage Financial, kids who make a deposit will be entered in a drawing to win a larger prize at the end of the week. The credit union is also offering financial literacy reading program. The readings engage students in discussion and allow them to discover new information on finances.
     
    Hughes FCU, Tucson, Ariz., co-hosted the Arizona Financial Face Off, in which students from 14 local schools tested their knowledge of financial issues.
     
    Security Service FCU, San Antonio, held a financial literacy essay contest. Contest winner Jasmine Ancira received $500 and her name was added to the academy's "Wall of Honor." The contest encouraged students to go through a financial reality check, then write about their plans to be financially stable adults.
     
    Michigan First CU was featured on the National Public Radio station WDET 101.9 FM discussing the credit union's 27 student-run branches and extensive financial education programs.
     
    Torrance (Calif.) Community CU offers Indie Money a program of financial services and education designed to teach financial responsibility and to help teens between the ages of 16 and 17 establish credit in a monitored, conscientious way with real-world credit and debit products. To ensure teens are armed with the knowledge and skills necessary to manage their new accounts, they must first pass the Indie Money Challenge and attend orientation with a TCCU staff member.
     

    Texas Trust CU donates $60K to schools via debit rewards program

    MANSFIELD, Texas (4.26/12)--Texas Trust CU in Mansfield has donated more than $60,000 to four area school districts since August as part of its Spirit Debit Reward program.
     
    The schools earn 15 cents every time a Spirit Debit Reward card is used to make a purchase. Thus far, cardholder transactions have exceeded 405,000 (LoneStar Leaguer April 25).
     
    The program was launched last year as a way to help area schools that are facing tight budgets. Participating schools receive a check at the end of each month, based on the number of transactions swiped from their school-specific Debit Reward Card. Schools get to choose how to use the money they earn.
     
    Within the four school districts that have a Texas Trust Spirit Debit Reward card, there are 11 high schools and two administrations participating.
     
    "The money we earned from the Spirit Debit Reward Card allowed us to provide student planners, which would have otherwise been cut," said Tammy Mariani, principal at Cedar Hill High School. "Texas Trust has given us an easy way to raise money without requiring students to sell candy bars or wrapping paper."
     
    The Spirit Debit Reward Card is part of Texas Trust's Spirit in Action campaign, which supports schools in several ways: a financial education curriculum for high school students; financial literacy workshops for students, teachers, administrators and the community; volunteers for school-related activities; financial donations; and student scholarships.
     
    Credit union members can earn rewards for designated schools when opening a checking account or taking out an auto loan, personal loan, or mortgage. In 2011, Texas Trust donated more than $150,000 to participating schools, including $20,000 in student scholarships.

    Market News

    MADISON, Wis. (4/26/12)

    Inside Washington

    News of the Competition

    MADISON, Wis. (4/26/12)

    FOMC keeps federal funds rate at 0% to 0.25%

    WASHINGTON (4/45/12)--The Federal Reserve's decision to maintain the target range for the Federal Funds Rate at 0% to 0.25% will hurt credit unions' margins, but that will be offset by lower loan-loss provisions, according to a Credit Union National Association (CUNA) economist.

    The Federal Open Market Committee (FOMC)--the Federal Reserve's monetary policymaking group--voted to maintain the target range for the federal funds rate at 0% to 0.25% at its meeting concluded today. The FOMC also said there are likely to be very low levels for the federal funds rate at least through late 2014.

    "The Fed reiterated that 'economic conditions … are likely to warrant exceptionally low levels for the Federal Funds Rate at least through late 2014,'" Steve Rick, CUNA senior economist told News Now. "This is the ELEP policy, where the Fed Funds Rate is kept 'Exceptionally Low for an Extended Period.' Eleven of the 17 FOMC members do not foresee an increase in the Fed Funds Interest Rate target before 2014. So it is becoming increasing clear that we can take the Fed at its word that it won't raise short-term interest rates for another two-and-half years."
     
    The Fed has kept short-term interest rates in the 0% to 0.25% percent range since December 2008, or more than 40 months, Rick explained. This is still having a negative impact on credit union net interest margins (yield on assets minus cost of funds). "More than likely we will see credit union net interest margins fall below 3% for the first time in credit union history during the first half of 2012," Rick said.
     
    "Fortunately, the tighter credit union margins will be more than offset by lower provisions for loan losses as loan credit quality continues to improve," he added. "Credit union loan delinquency rates fell to 1.54% in February, the lowest rate in three years. Therefore, we expect credit union return on assets to reach 90 basis points in 2012, from 68 basis points in 2011."

    The FOMC said information it received since it met in March suggests that the economy has been expanding moderately. Labor market conditions have improved in recent months; the unemployment rate has declined but remains elevated. Household spending and business fixed investment have continued to advance. Despite some signs of improvement, the housing sector remains depressed. Inflation has picked up somewhat, mainly reflecting higher prices of crude oil and gasoline. However, longer-term inflation expectations have remained stable.

    Consistent with its statutory mandate, the FOMC said it seeks to foster maximum employment and price stability. The FOMC expects economic growth to remain moderate over coming quarters and then to pick up gradually. Consequently, the committee anticipates that the unemployment rate will decline gradually toward levels that it judges to be consistent with its dual mandate.

    Strains in global financial markets continue to pose significant downside risks to the economic outlook. The increase in oil and gasoline prices earlier this year is expected to affect inflation only temporarily, and the FOMC anticipates that subsequently inflation will run at or below the rate that it judges most consistent with its dual mandate.

    To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the FOMC expects to maintain a highly accommodative stance for monetary policy.

    In particular, the FOMC decided Wednesday to keep the target range for the federal funds rate at 0% to 0.25% and currently anticipates that economic conditions--including low rates of resource use and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

    The FOMC also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction.

    The FOMC will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.

    Voting for the FOMC monetary policy action were: Ben S. Bernanke, chairman; William C. Dudley, vice chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen.

    Voting against the action was Jeffrey M. Lacker, who does not anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate through late 2014.

    CU Association of New York GAC kicks off

    ALBANY, N.Y. (4/26/12)--The Credit Union Association of New York's 2012 State Governmental Affairs Conference (GAC) kicked off Wednesday, with nearly 100 credit union advocates gathering in downtown Albany for legislator meetings, peer discussions and updates.
     
    Leaders from state-chartered credit unions gathered for a roundtable discussion Wednesday to exchange ideas and address topics most relevant to state-chartered credit unions. All attendees then heard compliance and legal updates from Michael Lanotte, the association's senior vice president and general counsel, and Michael Carter, the association's compliance director.
     
    "I participate in State GAC because it is important to connect with our legislators, both at home and at their Albany offices, and ensure our credit union voice is heard," said Pamela Heald, president/CEO of Reliant Community FCU in Sodus. "I also value the opportunity to network with other credit union professionals and, at the same time, be educated and updated by the association on key legislative issues."
     
    The association offered a Lobbying 101 workshop for new advocates or those looking for a refresher, followed by a legislative briefing to prepare all attendees for their legislator visits tomorrow. 
     
    "I am looking forward to gaining more knowledge about what issues are facing the credit union movement, as well as having the opportunity to meet with legislators," said attendee Aimee Johnson, vice president of lending at Oswego (N.Y.) County FCU and member of the Association's Young Professionals Commission (YPC). Johnson is one of several young professionals to attend this year's conference.
     
    "This is my first time attending State GAC, so I'm looking forward to seeing Albany at work and meeting with my local elected officials on Thursday," Corning (N.Y.) FCU employee and fellow YPC member Stephanie Carl noted. "I feel it's especially important for young professionals to participate in these advocacy efforts so that lawmakers at all levels can see our involvement and passion for the credit union movement."
     
    The group will visit the offices of their New York state legislators, where they will build support for the state legilsative agenda and share stories of the credit union difference in New York.

    U.S. Treasury designates Mid Cities CU as CDFI

    COMPTON, Calif. (4/26/12)--Mid Cities CU in Compton, Calif., has been awarded Community Development Financial Institution (CDFI) certification by the U.S Treasury. Certification allows the credit union to apply for grants from the federal CDFI Fund.

    The CDFI Fund was created to promote economic revitalization and community development through investment in and assistance to CDFIs. The CDFI Fund was established by the Riegle Community Development and Regulatory Improvement Act of 1994, as a bipartisan initiative. Through monetary awards and the allocation of tax credits, the CDFI Fund helps promote access to capital and local economic growth in urban and rural low-income communities nationwide.

    The credit union said it plans to put the new CDFI status "to good use helping the inner cities we serve," says Mid Cities President/CEO Melia Keller. "We couldn't have received our certification without the assistance of National Federation of Community Development Credit Unions. As with most government application processes, CDFI certification is long and tedious.
     
    "The federation was instrumental in hand holding us throughout the detailed application process," she added. "Their knowledgeable staff was able to assist us in quickly collecting the data we needed to support CDFI status and to address any questions or concerns we had throughout the process. I highly recommend the federation to any credit unions considering seeking CDFI status."
     
    Mid Cities CU received assistance from the National Federation of Community Development Credit Union's in its CDFI certification application process.

    "This certification recognizes the unique role Mid Cities CU plays in terms of promoting financial inclusion and expanding access to affordable financial services and education to low income consumers and distressed communities," said Pablo DeFilippi, director of membership at the federation. The CDFI certification is a recognition that "sets this credit union apart from many other financial institutions and we welcome them to the growing family of CDFI certified CUs the federation represents," he added.

    CUNA highlights Banker survey showing readers back MBLs

    WASHINGTON (4/27/12)--The Credit Union National Association (CUNA) queried the American Banker Thursday asking: Based on your publication's own online survey results, why not write about all the banks that apparently have no quarrel with credit unions' member business lending (MBL) bill?

    John Magill, CUNA executive vice president, government affairs, posed the question in a letter to the editor that ran in the online edition Thursday in response to the publication's April 23rd story, "Third Credit Union Dissents on Business Lending Bill."

    If three dissenters is a story, asked Magill, then what about all the banks that have no objection to raising the credit union small business lending cap?  He noted that the American Banker's own online survey this week suggests such bankers are out there, apparently in droves.

    "Your survey posed the question, 'Should credit unions be permitted to expand credit union small-business lending?' Sixty percent of your readers said yes, the competition is healthy, another 10% said yes, as long as credit unions have sufficient capital, and only 31% said no," Magill wrote.

    Magill noted that it can be presumed the majority of American Banker readers are directly involved in or favorably disposed toward the banking industry.

    "Who knew 70% support our efforts to increase small business lending and job growth? I think American Banker should write about some of these bank executives.

    "Based on your survey, it shouldn't be at all hard to find them."

    Magill said that in a credit union universe of some 7,500 institutions, one will never find an issue that sparks total agreement. But, he said, CUNA has tracked at least 60,000 contacts to the U.S. Congress since late March from credit unions, small businesses and others in support of S. 2231, the Credit Union Small Business Jobs Act. That bill would increase the MBL cap to 27.5% of assets, up from 12.25%, under certain conditions.

    "Clearly,  our legislation has broad industry and small-business support, and the dissenters are in the distinct minority," Magill pointed out to the Banker.

    Use the resource link to access the opinion letter and to read News Now coverage of the American Banker survey.

    Credit Unions Kids at Heart celebrates Boston Marathon

    BURLINGTON, Mass. (4/27/12)--The Credit Unions Kids at Heart marathon team participated in the 116th running of the Boston Marathon on April 16, raising $100,000 for Children's Hospital Boston. Patient partners, families and friends gathered at Boston's fire station Engine 33, Ladder 15 to cheer on the team as eight credit union runners took to the course in the heat.
     
    One of the world's most challenging courses also featured record-high temperatures, making this year's Boston Marathon especially difficult.
     
    Click to view larger image Credit Unions Kids at Heart raised more than $100,000 for Children's Hospital Boston by participating in the Boston Marathon earlier this month. Members of the 2012 Credit Unions Kids at Heart team gather for a celebratory breakfast at the Westin Copley Place on April 14.
    Seven credit union runners made it across the finish line with their patient partners and the children's siblings. The tradition of crossing the finish line together symbolizes the unity of the team, and how they successfully achieved this accomplishment together. Each runner and patient partner team was met with an eruption of cheers from the crowd.
     
    Marathon weekend began with a Credit Unions Kids at Heart breakfast at the Westin Copley Place. Credit union runners, patient partners, family and friends gathered together as Jane Melchionda, EasCorp president/CEO and founder of Kids at Heart, thanked each one for their contributions to the program.
     
    Patient partner Everett Chase with runner Nicole Polex.  Both were are sponsored by Jeanne D'Arc CU. (Photos provided by Credit Unions Kids at Heart)
    After the breakfast, guests continued the celebration at a Children's Hospital Boston reception. Nicole Polex of Jeanne D'Arc CU was honored for running the marathon for five years to raise money for the hospital, and for her dedication to the program. Seamus Slattery and Jane Melchionda were both honored with the prestigious Katie Lynch Award. This award is given to those who possess the determination and generous spirit of the award's namesake.
     
    Established in 1996, the Kids at Heart program is a group of credit unions that collectively raise funds to provide programs and services to the children and families receiving treatment at Children's Hospital Boston, as well as for other organizations that work for the benefit of children.
     
    Kids at Heart has donated $3.5 billion to Children's Hospital Boston. The cornerstone of the Credit Unions Kids at Heart program is the Boston Marathon team. Each year, runners sponsored by credit unions are paired with a patient partner who is receiving care at Children's Hospital Boston. These children, who overcome their own challenges every day, inspire the runners to push through their own obstacles as they train for the Boston Marathon.

    Minnesota CU Network, co-ops discuss collaborations

    BLOOMINGTON, Minn. (4/27/12)--The Minnesota Credit Union Network (MnCUN) hosted a panel of leaders discussing how credit unions can develop mutually beneficial partnerships with local cooperatives, as part of its celebration of the International Year of Cooperatives.
     
    During the Minnesota Credit Union Network's Annual Meeting & Convention on April 13-14, cooperative leaders participated in a panel discussion on how credit unions can develop mutually beneficial relationships with area cooperatives. (Photo provided by the Minnesota Credit Union Network)
    Held April 13-14 during MnCUN's Annual Meeting & Convention, the session provided credit unions tangible ideas of how they can help strengthen the cooperative movement. Facilitated by cooperative consultant Adam Schwartz, the panel of cooperative leaders shared collaboration success stories.
     
    The panelists included Credit Union National Association (CUNA) President/CEO Bill Cheney, The Wedge General Manager Lindy Bannister, SPIRE FCU President/CEO Dan Stoltz, and Crow Wing Power CU Vice President Diane Viehauser.
     
    Schwartz, who previously served as the National Cooperative Business Association's (NCBA's) vice president for public affairs, said it is important for credit unions to emphasize the "cooperative essence of who they are."
     
    Understanding the importance of cooperative partnerships, Stoltz outlined his credit union's cross-promotional work with four area grocery co-ops. SPIRE FCU, based in Falcon Heights, offers a branded Visa card program to the members of grocery co-ops and shares a portion of the interchange income with the cooperative. Stoltz stated that this relationship adds value to the membership offerings of the credit union and the grocery co-ops.
     
    One of SPIRE FCU's partners is The Wedge Community Co-op, which is the largest single-store cooperative in the country. General Manager Bannister emphasized the benefits of the co-op's relationship with SPIRE FCU. She encouraged credit unions to examine their existing products and services and look for natural ways these offerings can be used to benefit members of other local cooperatives.
     
    "Anything we can do together--as a cross sector--is going to make us stronger together," Bannister said.
     
    The third representative on the panel was Viehauser of Crow Wing Power CU in Brainerd who shared the story of how the credit union developed from the Crow Wing electric cooperative. Viehauser outlined the credit union's rapid growth and strong connection to the cooperative. She said community members appreciate the cooperative business model and strongly support the two organizations.
     
    CUNA President/CEO Bill Cheney praised the panelists for their collaboration efforts and encouraged attendees to build similar relationships.
     
    "I can't think of a better time to promote cooperatives--with this year being the International Year of Cooperatives," Cheney said. "I think it's greatly important that credit unions work together with cooperatives. The bottom line is cooperatives are a better way."
     
    Cheney went on to outline CUNA's commitment to supporting and strengthening the cooperative movement thought involvement with the NCBA and other cooperative organizations. He also highlighted examples of cooperatives nationwide that educate consumers about the benefits of co-ops.
     
    As the state with the most cooperatives, Minnesota is actively involved in celebrating the International Year of Cooperatives. In addition to hosting the cooperative panel at its Annual Meeting & Convention, MnCUN has coordinated media relations and consumer awareness activities to spread the message about cooperatives and the benefits they bring to communities and individuals.

    CO-OP Financial Services introduces bill pay

    RANCHO CUCAMONGA, Calif. (4/27/12)--CO-OP Financial Services is introducing CO-OP Bill Pay, the company's first online bill pay product line for credit unions
     
    The bill-pay product is the result of CO-OP's  acquisition in January of Corporate Network eCom LLC, the company said. "The new line is a perfect extension of our e-commerce solutions, and will help our clients compete even more effectively against banks in terms of access and convenience services they can offer their members," said Stan Hollen, president/CEO of CO-OP Financial Services.
     
    The line is backed by CO-OP's eCom service organization, with 13 years of experience and providing support to more than 750,000 credit union members.
     
    With CO-OP Financial Services' aggregation of client volume and processing, the company can offer clients bill pay solutions at a better price than that they could secure on their own, the company said.
     
    CO-OP Bill Pay allows members to receive, view, manage and pay all of their bills when they log-on to their credit unions online banking site. The new product line is available in three versions to maximize the range of options credit unions can offer their members.
     
    Features of the CO-OP Bill Pay include:

    SourceLink rolls out REV auto refinancing

    CHICAGO (4/27/12)--SourceLink, a customer relationship management  and direct marketing firm, has released REV, a solution that gives lenders the ability to reach prime prospects by through direct mail and personalized campaign microsites while lowering acquisition costs.
     
    REV is an auto refinance solution that creates multichannel campaigns to target qualified candidates. The integration of direct mail and Web-based marketing with automotive refinance has proven to drive new account activity and expand existing relationships for credit unions and banbank. Using a calculator and personalized URLs, REV uses direct mail pieces to help members make informed decisions on terms and associated refinance savings.
     
    By using SourceLink's data modeling, loan candidates are automatically identified within the institution's lending area. Paired with mail-tracking solution, REV identifies key attributes for maximum conversion and manages the entire delivery cycle. REV also gathers data through campaign analysis and summary reports, strengthening follow-up efforts. This process allows a lender to make informed decisions for current and future marketing campaigns.
     

    Inside Washington

    UW CU set to launch student loan exit program

    MADISON, Wis. (4/27/12)--UW CU, Madison, Wis., is launching a new exit counseling program for its student loan borrowers.
     
    When a student graduates with a UW CU student loan, they'll be invited to attend a free, educational seminar. The credit union will host in-person seminar sessions to students that are graduating May 2012 or this summer.
     
    Sessions will cover topics such as UW Credit Union Loan information, including estimated payments, repayment options and whom to contact with questions. Also, federal financial aid information, budgeting after college and the ways student loans can affect personal credit history will be discussed.
     
    "Providing financial education is a core business value for our organization," said Mike Long, UW CU executive vice president and chief credit officer. "Our commitment to student success continues well beyond the initial loan transaction. Our intent is to make our program very accessible, so graduates will take advantage of the seminar to get the information and skills they need to make good financial choices."
     
    For this pilot counseling program, in-person sessions are being offered on six campuses--UW-Madison, UW-Milwaukee, UW-Stevens Point, UW-Whitewater, UW Oshkosh and UW-Green Bay. The credit union provides student loans for students attending any UW System school, Madison College or Edgewood College.
     
    UW CU invited roughly 600 students to attend the sessions, Long said. "If this pilot program is as successful as we're hoping it will be, we will look to expand to offer additional in-person sessions at more UW System schools and potentially an online counseling option," he added.

    CDFIs have succeeded, but also face difficulties, report says

    WASHINGTON (4/27/12)--Community Development Financial Institutions (CDFIs) "have succeeded in lending to and investing in individuals and communities not served by conventional financial institutions, while maintaining loan performance standards generally equivalent to those of the conventional financial sector," but have also experienced some difficulties while doing so, the CDFI Fund said in a recent report.

    The "CDFI Industry Analysis: Summary Report" was developed by the University of New Hampshire Carsey Institute's Center on Social Innovation and Finance, and examines the performance of 612 CDFIs between 2005 and 2010. The report examined 197 credit unions as part of the study. The study focused on capitalization, liquidity, portfolio health and risk-management issues faced by CDFIs, and how those institutions were impacted by the recent recession.

    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.

    The report found that CDFI credit unions "have been experiencing greater risk in their loan portfolios than traditional credit unions," with more than double the rate of delinquent loans as a percentage of total assets as the overall credit union industry. However, most of the CDFI credit unions examined had excellent portfolio quality, the report said.

    CDFI Fund credit unions also recorded higher operating expense ratios, declining earnings, and rising delinquency rates, and had higher delinquency rates than the credit union industry as a whole, according to the report. Net income, returns on assets, and net interest margins also declined.

    While the costs of working with underserved communities can be "somewhat higher," CDFI credit unions and other CDFIs "have learned to effectively manage the 'risk' that discourages conventional financial institutions from serving low- and moderate-income individuals and communities," the report said. Some of the risks and costs could be mitigated through certain operating procedure changes, according to the report.

    Those changes include:
    For the full CDFI Fund report, use the resource link.

    Registration for July 31 NCUA session opens

    ALEXANDRIA, Va. (4/27/12)—Registration for the July 31, Denver, Colo.-based National Credit Union Administration's credit union "listening session" has opened, the agency said Thursday.

    The session is scheduled to be held between 1 and 4 p.m. ET. Registration will be limited to the first 150 reservations.

    NCUA Chairman Debbie Matz said agency representatives are looking forward to hearing from credit union officials and volunteers in all six listening sessions, and added the agency welcomes open dialogue to improve its exam processes, regulations, and credit unions' safety and soundness.

    The NCUA listening sessions will begin on May 2 in Boston, Mass., and are also scheduled for:
    The agency also recently rescheduled a June 12 session in Orlando, Fla., moving it back a day to June 13.
    For more on the sessions, use the resource link.

    CU-backed swap bill moves on to Senate

    WASHINGTON (4/27/12)--The Small Business Credit Availability Act (H.R. 3336), which would preserve the rights of credit unions and other small financial institutions to use swaps to hedge interest rate risk, will move on to the Senate after it passed a U.S. House vote this week.

    The bill passed by a 312 to 111 vote, with 8 members of the House abstaining.

    The Credit Union National Association (CUNA) supports the legislation, which would grant credit unions and other small financial institutions with under $1 billion in cumulative current uncollateralized credit risk exposure and potential future credit risk exposure an exception from portions of the Dodd-Frank Act that barred certain institutions from engaging in swap transactions.

    "The House considered this legislation to reinforce that small financial institutions, including the credit unions eligible to engage in this activity, receive the exemption that Congress intended to provide under the Dodd-Frank Act," said Ryan Donovan, CUNA's senior vice president of legislative affairs.

    The National Credit Union Administration (NCUA) currently allows a limited number of federal credit unions to engage in derivatives through an investment pilot program, and is considering expanding credit union derivative investment authority. CUNA has commended the agency for taking on the derivatives issue, and said it supports allowing well-managed credit unions to invest in derivatives through third-parties. (See related April 5 News Now story: Allow CU derivative investments as risk management tool: CUNA to NCUA)

    Overdraft comments now due to CUNA May 25

    WASHINGTON (4/27/12)--The Credit Union National Association (CUNA) has pushed its own overdraft comment deadline back to May 25 after the Consumer Financial Protection Bureau (CFPB) announced it would collect overdraft comments from credit unions and other interested parties until June 29. 

    The CFPB launched its comment initiative on Feb. 28 and first intended it to end April 30. CUNA and others earlier this year requested the agency delay the comment deadline by at least 30 days.

    CUNA Deputy General Counsel Mary Mitchell Dunn said the delay is a good development and will allow credit unions, leagues and CUNA, along with other interested parties, ample time to develop comments.

    The CFPB is seeking information on how financial institutions' overdraft policies and practices affect consumers. The overdraft comments from consumers, the financial services industry, and other interested parties will be used to determine whether new overdraft fee disclosures and rules are needed and to assist with policymaking on overdraft practices. It will also be used to prioritize the CFPB's regulatory and financial education work, the agency said.

    Concerned that the CFPB's questions were open ended, CUNA developed its own survey for credit unions to complete, the results of which will be used by CUNA to develop its overdraft comment letter.

    In the survey, CUNA asks for basic information on the credit union's asset size, and what types of overdraft programs are offered to members. More specific questions addressing how members are made aware of available overdraft protection programs and how members are alerted to the possibility that a transaction may trigger an overdraft fee are also among the survey questions.

    The CUNA survey does not collect any identifying information, and credit union participation will be strictly confidential.

    For the CUNA survey, use the resource link.

    Market News

    MADISON, Wis. (4/27/12)

    News of the Competition

    MADISON, Wis. (4/27/12)

    PCUA meets with officials about loans for the disabled

    HARRISBURG, Pa. (4/27/12)--The Pennsylvania Credit Union Association (PCUA) met with state officials April 20 to discuss how credit unions can help get the word out about the availability of assistive technology loans for people with disabilities.
     
    Jim McCormack, PCUA president/CEO, and staff members Rick Wargo and Mike Wishnow, hosted the Pennsylvania Secretary of Banking Glenn Moyer, and officials from the Department of Labor & Industry and the Pennsylvania Assistive Technology Foundation (Life is a Highway April 23).

    Participating in the meeting were: Jennifer Peterson, Esq., special assistant to Labor & Industry Secretary Julia Hearthway; James Kreider, executive assistant to Stephen Suroviec, executive director of Labor & Industry's Office of Vocational Rehabilitation; Susan Tachau, executive director, Pennsylvania Assistive Technology Foundation (PATF); and Tracy Beck, operations director, PATF.

    The group discussed specific financial education needs of people with disabilities, as well as a role credit unions can play in helping disabled members.

    "The credit union mission of 'People Helping People' fits very nicely with PATF's goal to help disabled Pennsylvanians live independently," said Jim McCormack. "Friday's meeting was a good first step in exploring how our two organizations can work together for the betterment of Pennsylvania consumers."

    Early bird deadline looms for World CU Conference

    MADISON, Wis. (4/27/12)--The "early bird" deadline for World Council of Credit Unions' (WOCCU) 2012 World Credit Union Conference in Gdańsk, Poland, July 15-18 is looming. On May 10, the registration fee will increase to $200 per attendee.

    Conference attendees will have the opportunity to connect with peers from around the world; hear from leading business minds Youngme Moon, Harvard University professor, and mobile banking guru Brett King, who are driving change in and outside the credit union industry; and take in sightseeing tours highlighting the historical significance of Gdańsk.

    "This summer we also have the pleasure of joining Poland's credit unions, Spoldzielcze kasy oszczędnościowo-kredytowe or better known as SKOKs, in celebrating their 20th anniversary," said Brian Branch, WOCCU president/CEO. "What started as a small grassroots effort has grown to become one of the most successful and respected credit union systems in the world, and attendees will have the chance to see this amazing transformation firsthand and celebrate its success."

    Also, this year's conference features local credit union visits, breakout sessions featuring field-tested solutions, The Worldwide Foundation for Credit Unions' charity golf tournament, the third annual Global Women's Leadership Forum and opportunities to network and build a strong professional network that will continue after attendees leave Gdańsk.

    A companion program and sightseeing tours also are scheduled for guests to join in this year's activities, and spaces are still available on the pre-tour, July 10-14, from Kraków to Gdańsk and the post-tour, which will head to St. Petersburg, Russia, July 19-22, after the conference. Early registration is recommended.

    Register on or before May 10 to take advantage of discounted registration fees. For more information about the conference and to register for the event, use the link.

    Credit unions press MBL case with media

    MADISON, Wis. (4/27/12)--As they continue to press the U.S. Congress to pass legislation to extend their members business lending (MBL) authority, credit unions are receiving positive media coverage about their efforts to help small businesses and improve the economy.
     
     Bills in the House and Senate would increase the MBL cap to 27.5% of a credit union's assets, up from 12.25%, under certain conditions.
     
    Within the first year of enactment, the increased MBL authority would help to inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, Credit Union National Association (CUNA) estimates show.
     
    Patrick Keefe, CUNA vice president of communications and media, was quoted in a April 26 article in The Tennessean assessing the bills' chances in Congress.
     
    "The game is really on in the Senate," Keefe told The Tennessean. "We feel that we have a real good case in the House. We just have to get through the Senate. I'm not saying it's adone deal in the House, but the Senate is key."
     
    The April 26 edition of The Baltimore Sun featured an opinion editorial article written by Rod Staatz, president/CEO of SECU of Maryland.
     
    Staatz cited a recent nationwide survey, in which 9 out of 10 small businesses indicated that availability of credit was impeding their ability to hire. Nearly two-thirds said it had become significantly harder to get loans today than just a few years ago. Similarly, a National Federation of Independent Business survey found a nearly 10% increase in the number of small businesses trying to borrow but no change in the number of small businesses actually obtaining credit.
     
    "Business lending is consistent with the mission of credit unions," Staatz said. "Credit unions were founded to 'promote thrift and make loans for provident purposes' through a not-for-profit cooperative structure focused on member-owners, not profit margins. Meeting the credit needs of their members--including business credit--is why credit unions exist."
     
    The San Antonio News Express published an opinion editorial from Bill Hammond, Texas Association of Business CEO, touting the willingness of credit unions to make loans to small businesses, in contrast to banks.
     
    "A government program designed to provide loans to small businesses was only 14% loaned-out a year after its implementation. But there has been one bright spot in the tough lending picture--credit unions," Hammond wrote.
     
    "Credit union lending to small businesses went up 44% over the last four years after small business entrepreneurs gave up on banks and looked elsewhere for loans," he continued. "The average credit union loan is almost $220,000, making credit unions the perfect partner for small businesses."
     
    An April 8 article that appeared in in the Winston-Salem Journal  cited Credit Union National Association statistics that indicate credit unions hold less than 6% of all small-business loans, or a combined value of about $40 billion.
     
    Credit unions would provide loans that banks have chosen not to offer, according to credit union sources quoted in the article.
     
    "If just four credit unions in North Carolina that are at or above 65% of their member business lending cap are unable to continue lending, over 2,200 jobs and $200 million in credit will likely be lost in the next year," Marcus Schaefer, Truliant CU president/CEO tols the Winston-Salem Journal.
     
    Jeff Hardin, communications director for the North Carolina Credit Union League, said MBL bills are not a bank-versus-credit union issue.
     
    "Over the past several years, small-business owners have had a particularly hard time getting access to that capital, Hardin said. "Credit unions have dollars to lend and the expertise to help these small businesses."
     
    Eli Lehrer, vice president of the Heartland Institute wrote an opinion editorial supporting MBL legislation in the Californail business and political journal Fox & Hound. "Anyone who favors a freer, less regulated economy, should take victories where they can find them,"  Lehrer wrote. "And it's why conservatives should flock to support an effort to deregulate credit union lending. It's one of the best things Congress can do to create jobs and help small business in the short term."
     
    The Heartland Institute and 10 other free-market organizations sent a joint letter to Senate Majority Leader Harry Reid, (D-Nev.), and Senate Minority Leader Mitch McConnell, ( R-Ky.), asking that they take up legislation that would loosen regulatory constraints on the amount of loans credit unions can make to business members.
     
    "Doing away with these regulations would inject over $13 billion into the economy and foster the creation of up to 140,000 new jobs in its first year, all at no cost to taxpayers," the groups wrote. "As the economy is struggling to kick-start, this bill would give businesses much-needed capital to expand by simply raising the arbitrarily low lending cap."
     
    In an 18-page policy document, Katherine E. Howell-Best of the North Carolina Banking Institute examined whether credit unions could effectively serve the small business market through their member business lending products.
     
    "Banks allege that credit unions are creeping into the banking industry's share of the business lending market.  The empirical evidence, however, does not support this allegation," Howell-Best wrote. She cited a U.S. Department of Treasury report that showed credit union member business lending almost doubled in seven years, from $2 billion in 1993 to $3.9 billion in 1999. During the same time, banks increased commercial and industrial lending by almost 85%, to to $824.7 billion in 1999 from $447.8 billion in 1993.
     
    "Credit unions whose business lending goal is to allow members who need business lending services to make credit unions their primary financial institution should devise business lending and business services strategies," Howell-Best concluded.
     
    "This includes offering business accounts, gaining experience that will enable the development of ancillary services, and, ultimately, mastering member business lending. Perhaps most importantly, though, credit unions must make their services and product lines known to their members in order to tap their unmet financial services needs."
     
    The La Crosse Tribune published a letter from Brett Thompson, CEO of the Wisconsin Credit Union League, in response to a letter from the Wisconsin Bankers Association:
     
    Thompson made the following points about MBL legislation:
    On Bloomberg TV, Dale Kluga, head of Cobra Capital, LLC, addressed how big banks are not extending credit to small businesses. The housing market cannot make a full recovery until small businesses begin making more loans, Kluga said.
     
    "My opinion is if the banks are not interested in supporting small businesses then they need to step aside and let the credit unions at least try," Kluga said.
     
    Kluga suggested that small business lending is not currently a part of big banks' business model.

    "Why should they preclude the credit unions from getting in the business?" Klug said.
     
    To watch the video, use the link.

    Illinois league annual convention in 82nd year

    NAPERVILLE, Ill. (4/27/12)--More than 650 executives representing 120 credit unions have signed up to attend the Illinois Credit Union League's (ICUL) 82nd Annual Convention, which began Thursday and runs through Saturday, and features many new enhancements.
     
    With a sports theme of "Get in the Game!" the convention will tout a new location for the event--the Renaissance Convention Center in Schaumburg, Ill., which will host more than 80 vendors.
     
    The convention will feature the keynote and awards ceremony, in which credit unions and individuals will win accolades for their accomplishments for the past year, including one inductee into the Illinois Credit Union Hall of Fame and one recipient of the Illinois Credit Union Foundation's Tribute Award.
     
    Winners of the Dora Maxwell, Louise Herring, and Desjardins awards competition, and supporters of the Credit Union Political Action Council, will also be recognized. Connie Payton, wife of the late football legend Walter Payton, will serve as keynote speaker and present "Family Values, Teambuilding, Embracing Life." This session will also include the changing of the gavel for ICUL's chairman of the board.
     
    The annual convention also includes 24 educational sessions, including a pre-conference workshop on Thursday followed by the first group of sessions, which will begin Friday morning.
     
    One session at this year's event will be Organ Donation Importance. More than 5,000 men, women and children in Illinois are on the organ transplant waiting list. Because April is "Organ Donor Awareness Month," ICUL will be offering complimentary onsite donor registration sponsored by the Illinois Secretary of State's office following Brittany Payton's break out session. One donor can save or enhance more than 25 lives. 
     
    Other new features for this year's convention include:

    NJCUL contest winner announced, helps disabled

    TOTOWA, N.J. (4/30/12)--North Jersey FCU, Totowa, N.J., has been named the winner of New Jersey Credit Union League's (NJCUL) "Banking You Can Trust" story contest for its happy tale of helping one member, who had been turned down again and again by banks, get the financing she needed for a wheelchair accessible van for her disabled son.
     
    North Jersey FCU President/CEO Lourdes Cortez (left) receives a "Banking You Can Trust" certificate from New Jersey Credit Union League Marketing and Communications Coordinator Marissa Anema. (Photo provided by New Jersey Credit Union League)
    NJCUL asked credit unions to share their personal stories about how they have helped members in a profound way (The Daily Exchange April 27).
     
    Alberta Gordon, a long-time and loyal North Jersey FCU member since 2000, wanted to purchase a specially equipped van for her son. An innocent bystander in a shootout, the elementary-age child was left wheelchair bound.
     
    When Gordon approached North Jersey FCU about her situation, the staff was able to provide the financing she needed and help her and her son adjust to this major lifestyle change.
     
    As the winner of NJCUL's "Banking You Can Trust" Story Contest, North Jersey FCU receives a feature story in NJCUL's Weekly Exchange newsletter, a framed reprint of the story, a feature story in NJCUL's legislative newsletter NJ CU Digest, the story featured on the home page of the league website, the story sent to the local press, and a certificate certifying that the credit union provides "Banking You Can Trust."

    Illinois league seats new board, officials elected

    NAPERVILLE, Ill. (4/30/12)--Many elections by the Illinois Credit Union League (ICUL) and affiliated organizations have taken place at ICUL's 82nd Annual Convention, including the seating of ICUL's new 12-member board of directors.
     
    The change in the size of the ICUL board was as a result of a bylaw amendment passed by the delegates in 2009 to address corporate governance of the league, through a reduction in the current size of its board to 12 directors, effective Jan.1. The bylaw amendment also redefined the league board by three multi-chapter regions (districts) of four directors each based on member size: less than 3,000 members (Class A), 3,000 to 9,999 (Class B), 10,000 or more (Class C) and At Large (Class D).
     
    New Illinois Credit Union League Board chairman Geri Burek, took her oath of office with outgoing Chairman Dennis Hall, CEO, IH Mississippi Valley CU, at ICUL's 82nd Annual Convention held last week. (Photo provided by the Illinois Credit Union League)
    Geraldine Burek, CEO of South Division CU, Evergreen Park, was elected chairman. Burek will serve on the league board as the Class B director for District 2 and has been an ICUL director since 2003. During that time, she has also been chairman of the annual convention and legislative committees, served on the executive committee, and on the CUPAC board for 21 years. In addition, she began serving on the ICU Foundation board in 2009. Burek also willserve as ICUL Service Corporation (LSC) chairman.
     
    Pete Paulson, CEO, Corporate America Family CU, Elgin, was elected vice chairman. Paulson, from the Fox Valley Chapter, will serve as the Class D At Large director for District 3 and has been on the League board since 2003. During that time, Paulson has also participated on the annual convention and executive committees. He also was on the LSC board for four years.  Paulson will serve as LSC vice chairman.
     
    Peggy Cummins, CEO, Three Rivers Community CU, Mt. Carmel, was elected secretary/treasurer. Cummins, from the Southern Illinois Chapter, will serve as the Class A director for District 1. She has been on the league board since 1996 and during that time has also served on the annual convention, credit union support group, executive and legislative committees. In addition, she has served on the ICU Foundation board since 2001.
     
    Election of new officers for the Illinois Credit Union (ICU) Foundation; Credit Union Political Action Council (CUPAC) and Illinois Youth Involvement Council (IYIC) also took place.
     
    The ICU Foundation held its annual meeting and elected its officers. In addition, CUPAC elected new officers at its annual meeting held in conjunction with the convention. The IYIC re-elected its executive committee, also during the convention.
     
    With a sports theme of "Get in the Game!" ICUL's three-day convention concluded Saturday at the Schaumburg Renaissance Convention Center. More than 650 executives representing 120 credit unions attended.

    News of the Competition

    MADISON, Wis. (4/30/12)

    Minn. CU4Kids committee members recognized

    BLOOMINGTON, Minn. (4/30/12)--The Minnesota Credit Unions for Kids (MnCU4Kids) committee and the Minnesota Family Involvement Council (FIC), committees of the MNCU Foundation, recently honored two members for their contributions.
     
    Roxi Jensen (right) assistant manager of Embarrass (Minn.) Vermillion CU, was recognized as the Minnesota Credit Union for Kids Volunteer of the Year at an awards banquet held in conjunction with the Minnesota Credit Union Network's (MnCUN's) 2012 Annual Meeting & Convention. Jensen is pictured with Mark Cummins, president/CEO of the Minnesota Credit Union Network.
    Roxi Jensen of Embarrass (Minn.) Vermillion CU and Bridget Moeller of Greater Minnesota CU received their volunteer awards on April 14 during an awards banquet held in conjunction with the Minnesota Credit Union Network's (MnCUN's) 2012 Annual Meeting & Convention.
     
    Jensen, assistant manager of Embarrass Vermillion FCU, was recognized for her contributions to MnCU4Kids with its Volunteer of the Year Award. She became a committee member in 2006. She has been actively involved in serving on subcommittees for the Credit Union for Kids golf tournament, annual meeting fundraiser and the Bowl-O-Rama event.
     
    "I'm honored to be recognized for this award, and I'm happy to serve on a committee that raises money for such a worthwhile cause," Jensen said. "With our fundraisers and other activities, we can directly help the kids and families who need it at Gillette. It's fulfilling work, and I'm proud to be a volunteer for this committee."
     
    Bridget Moeller, right, vice president of human resources and training at Greater Minnesota CU, Mora, Minn., was honored for the second time as the Minnesota Family Involvement Council Outstanding Volunteer. Moeller is pictured with Mark Cummins, president/CEO of the Minnesota Credit Union Network. (Photos provided by the Minnesota Credit Union Network)
    Last year, Minnesota raised nearly $160,000 for Gillette Children's Specialty Healthcare in St. Paul, which has outreach clinics statewide. Nationally, fundraising for CU4Kids takes place in all 50 states.
     
    Moeller, vice president of human resources and training at Greater Minnesota CU in Mora, earned the Minnesota Family Involvement Council's Outstanding Volunteer Award for her service on the committee. Moeller joined the FIC in 2005 and was elected to serve as the chair of the committee in 2011.
     
    Before serving Chair, Moeller served as the FIC's vice chair since 2007. She plays an integral role in coordinating the committee's annual silent auction fundraiser, and she is involved in the committee's scholarship program. This is the second consecutive year she has received the award.
     
    The FIC is a volunteer-based organization run by credit union professionals. Its mission is to enhance the future of the credit union movement by providing financial awareness to families. The FIC focuses on providing scholarships to Minnesota credit union members to help further their education and to nurture their relationship with credit unions. The recipient of the annual award is voted on by members of the council.
     
    "The FIC is an incredible group of people," Moeller said. "I know there are many people on this committee who work very hard and are quite deserving of this award, and it is a great honor to be recognized by them again. The committee's dedication to our scholarship program and their commitment to financial education are notable contributions to Minnesota's credit unions. It's a great feeling to be part of this team."
     
    "It's the dedication of people like Roxi and Bridget and their significant contributions to credit unions that help strengthen the movement," said Rachel Anderson, MnCUN director of communications and MnCU4Kids and FIC liaison. "They truly believe in their respective causes, and the accolades they received are well-deserved."

    Market News

    MADISON, Wis. (4/30/12)

    New NCUA video preps CUs for improving economy

    ALEXANDRIA, VA. (4/30/12)--The improving economy's impact on credit unions, and how credit unions can access the latest economic data online, are both addressed in the latest YouTube briefing by National Credit Union Administration (NCUA) Chief Economist John Worth.

    "Continued improvement in key economic indicators is good news for credit unions. Falling unemployment and stronger consumer spending will likely help credit unions' bottom lines in 2012," Worth said in an NCUA release. "Credit unions also could expect to see increased deposits, fewer delinquencies and charge-offs, and increased loan demand," he added.




    The video also shows how credit unions can access information on key economic indicators like unemployment rates and housing price trends.

    The agency earlier this year announced it would release an ongoing series of YouTube videos to inform the public and credit unions about general economic and credit union specific developments.

    The videos can also be viewed on the NCUA's YouTube page by using the resource link below.

    MCUA adds CUDE expertise

    ST. LOUIS (4/30/12)--The Missouri Credit Union Association (MCUA) has expanded its team of Credit Union Development Educators (CUDEs). Three MCUA staff members earned their CUDE designation last week, bringing MCUA's staff total to 13 CUDEs.
     
    Kevin Brueseke, chief financial officer; Don Cohenour, chief membership officer and Mark Hohenstein, shared branching vice president, joined 37 credit union professionals from across the world for the Spring program in Madison, WI.
     
    After completing development educator school in 2005, Kevin Shaw, MCUA  Office of Small Credit Unions director, returned to the program to serve as a group mentor.   
     
    "MCUA is the most invested league in the country, and perhaps organization, in the country in our credit union movements premier philosophy training program and boot camp," said Mike Beall, president/CEO. "At MCUA, we believe that our commitment to our credit unions, and to the philosophy of our movement is made stronger by the CUDE designations earned by these professionals."
     
    MCUA's commitment to the CUDE philosophy extends beyond internal staff to outside counsel and business partners including legal, strategic, corporate, foundation and website consultants. 
     
    "Each of these folks adds to the value of what MCUA brings to the table in our work with and on behalf of credit unions," said Beall.

    Partnership offers property inspection/preservation

    SOUTHFIELD, Mich. (4/30/12)--GCC Servicing Systems, a provider of mortgage servicing technology, has partnered with Dallas-based MSI, a field services provider, to offer automated property inspection ordering services.
     
    Automating the ordering process allows servicers to avoid unnecessary steps and reduces the amount of time spent manually ordering property inspections. By incorporating MSI ordering into the G/SERV platform, lenders can determine the need for property inspections and order or even cancel them in real-time without leaving the G/SERV portal. GCC customers can also order MSI's property preservation services through the servicing platform.
     
    "It is essential to simplify and automate as many processes as possible for mortgage servicers with the ever-increasing number of regulations and growing workloads," said Jack Bryant, MSI executive vice president of client relations. "Our partnership with GCC provides servicers a simpler, automated ordering process. All appraisals and inspections can be ordered with data uploaded and housed in one location, streamlining the way mortgage servicers and field service providers collaborate."
     
    G/SERV also runs reports that pull all loans needing an inspection and submits the results to MSI for ordering, without any user input. Servicers can assess inspection results directly through the G/SERV platform, alleviating the need to visit multiple websites and compile data from siloed sources.
     
    "As regulations continue to significantly impact appraisals, it is important for mortgage servicers to work with field servicing companies like MSI that are efficient, well trained and adhere to all necessary compliance requirements," said Glenn Liebowitz, GCC president. "Property inspections and preservation services ordering are time-consuming tasks for our clients, but GCC's integration with MSI eases the process by enabling services to order inspections with the click of a button and house all information in one location. This in turn allows servicers to focus their efforts in other business areas to increase profitability and customer service."

    Federation highlights CU difference at NYC Green Festival

    NEW YORK (4/30/12)--The National Federation of Community Development Credit Unions and several of its member credit unions highlighted their advantages for individuals looking for affordable financial services and access to credit, during New York City's Green Festival held at the New York City's Javits Convention Center earlier this month.
     
    The event also showcased the economic benefit of financial cooperatives to the communities they serve.
     
    Several New York City-based member credit unions participated, including Bethex FCU, the Lower East Side People's FCU, Union Settlement FCU and United Nations FCU. The federation's table was located near the front of the 20,000 square-foot convention room.
     
    The event--with more than 25,000 visitors attending--afforded the federation and its member credit unions (CDCUs) the opportunity to discuss the benefits of community-based financial cooperatives regarding the advantages available to individuals looking for affordable financial services and access to credit.

    The federation's credit union volunteers were among the few exhibitors discussing alternative banking and responsible financial services. They answered questions from interested consumers looking to learn more about the differences between credit unions and banks, the types of products offered at credit unions, where to find their local credit union and how to join.

    "It was great to have our volunteers come out and represent UNFCU at this event to discuss our greening initiatives, as well as to support the federation in this UN-declared International Year of Cooperatives," said Pamela Agnone, senior vice president of retail services at United Nations FCU. "There was just so much positive energy filling the exhibit hall, with each organization working to do their part for their communities and the environment."

    "This was an extremely successful event," said federation program associate Elizabeth Friedrich, who coordinated the credit union volunteers participating at the festival. "There was a lot of interest in the work that credit unions are doing. We spoke with literally hundreds of attendees about the benefits of banking local through credit unions and handed out nearly all the informational materials we brought with us. Hopefully our member CDCUs will have lots of new members knocking on their doors as a result of our efforts."
     
    The Green Festival--one of the premier sustainability events in the U.S.--hosted more than 100 authors, leaders and educators, including Russell Simmons and Amy Goodman; how-to workshops; cutting-edge films; fun activities for children; organic beer and wine; vegetarian cuisine; and live music.

    40 CU professionals become CU Dev. Educators

    MADISON, Wis. (4/30/12)--Forty credit union professionals were guided by eight program facilitators and mentors through the week-long Credit Union Development Education (DE) Training. The April 18-25 training was held on the University of Wisconsin campus in Madison, Wis., said the National Credit Union Foundation (NCUF).
     
    During the week-long program, participants were involved in group exercises, field trips, encouraged to ask questions of visiting speakers, and completed team projects proposing solutions for credit unions to help alleviate or eliminate challenging situations in any given area.
     
    "DE Training provides critical lessons in cooperative principles and credit union philosophy while incorporating challenges credit unions face today," said Lois Kitsch, DE facilitator and national program director for NCUF. "It is timeliness that we strive for in the entire DE training experience as participants work through critical issues that include member business lending, mergers and small credit unions, bank conversion, serving emerging markets, national branding, and credit union development in Haiti."
     
    "This was an eye-opening experience that allowed me to separate myself from my daily routine and take a macro view of our movement," said Tony Emerson, class attendee and president/ CEO of The Credit Union League of Connecticut. "As a league president, I found it especially motivating to see the passion and dedication others have for seeing our industry survive and be there for our members. It should be everyone's goal to attain this designation."
     
    The 2012 graduating class included credit union movement representatives from across the U.S. and one from Kenya participating through the African DE Scholars Program.
     
    "Industry trainings and conferences remind you that you are a part of something bigger than yourself and your credit union, but DE Training goes a step beyond," said Lisa Totaro, marketing associate at Sunmark FCU in Latham, N.Y. "DE reminds us that we are part of a worldwide cooperative movement united by deep philosophical principles, and helps cement what sets us apart. It reminds us what 'people helping people' is really about."
     
    "The Poverty Simulation (or Life Simulation) on its own, is worth the price of attendance," said Jeff Kunberger, service center manager at Suncoast Schools FCU location. "Being able to put yourself in your member's shoes as they live week to week and day to day, and the frustration of all the obstacles placed in front of them opens your eyes to all the potential products, services and solutions we as a credit union can offer to improve the quality of our member's lives."
     
    The next DE Training will be held at the Lowell Center in Madison, Wis., Sept. 6-13. Registration is still open and can be found at the NCUF website. Use the link.

    To see a list of the new 40 Credit Union Development Educators, use the link.

    ACI op-ed: MBL cap inhibits competition, hurts small business

    WASHINGTON (4/30/12)--American Consumer Institute (ACI) Center for Citizen Research President Steve Pociask, in an editorial published in The Hill last week, said the only "unlevel playing field" in the fight between credit unions and banks regarding increased member business lending (MBL) is that credit unions are subject to an MBL cap that prevents them from lending to small businesses.

    He said the banks' cry of an "unlevel" playing field is just "weak and disingenuous lobby-speak." Pociask also noted that compared with banks, credit union lending produces a third of the delinquency rate and bad debt. Current law limits the amount credit unions can loan to business-owning members to 12.25% of the credit union's total assets. "This is unfortunate since, compared with banks, credit union lending produces a third of the delinquency rate and bad debt," Pociask said.

    Keeping the MBL cap in place also "maintains an economic barrier to entry that protects near-monopoly status for banks that collectively control 95% of small business lending," Pociask said. "In other words, the arbitrary cap on credit union lending is a regulation that inhibits competition and protects competitors (the banks)," he added.

    Legislation that would increase the MBL cap to 27.5% of assets has been introduced in the House and Senate, and Senate leadership remains committed to a vote on their version of MBL legislation. Rep. Ed Royce (R-Calif.), who is an original cosponsor of House MBL legislation, has said he would push for a vote on his bill once Senate action is complete. "Public policy needs to encourage competition, remove market entry barriers, encourage investment— and do all of this without government funding," Pociask said, adding that the MBL cap increase would mean "more loans at lower market risk."

    Pociask also wrote in favor of the MBL cap bills in a blog post last week. (See related April 26 News Now story: MBL increase brings choice, credit access: ACI blog) CUNA is encouraging credit union supporters to ask their elected representatives to support MBL cap increase legislation during this current weeklong congressional district work period. (See related News Now story: In-district MBL advocacy key this week: CUNA) For the full editorial, use the resource link.

    Two elected to South Carolina CU League board

    COLUMBIA, S.C. (4/30/12)--South Carolina credit unions elected one new director and re-elected another to the South Carolina Credit Union League (SCCUL) Board of Directors, and both will serve full three-year terms.
     
    Election results were announced at the April 21 business session of the SCCUL & Affiliates 2012 Annual Meeting in Myrtle Beach, S.C.
     
    New to the 2012-2013 SCCUL Board of Directors is Nick Wodogaza, president/CEO of Palmetto Citizens FCU, Columbia. Re-elected is Faye Crocker, CEO of Greater Abbeville (S.C.) FCU.
     
    Continuing their multi-year terms in 2012-2013 are: Rick Hammond, president/CEO of S.C. State FCU, Columbia; Robert Harris, CEO of Health Facilities FCU, Florence; W. Ray Partain, board member for Anderson (S.C.) FCU; Anne Shivers, president/CEO of Carolina Collegiate FCU, Columbia; and Linda Weatherford, vice president at SPC CU, Hartsville.
     
    Following the business session, the board named its officers: Crocker, chairman; Shivers, vice chairman; Partain, treasurer; and Harris, secretary.
     
    As immediate past chairman, Weatherford will serve one more term as a board member before acting as an ex officio member. Scott Woods, president/CEO of SC FCU, North Charleston, remains as an ex officio member of the board, as is SCCUL President/CEO Steve Fowler.
     
    Of the 73 member credit unions eligible to vote for the new directors, 59 completed required voting credentials. Of those, 57 submitted ballots to independent accounting firm Cantey, Tiller, Pierce, & Green, LLP of Camden, S.C.
     

    Inside Washington

    In-district MBL advocacy key this week: CUNA

    WASHINGTON (4/30/12)—Increased media coverage and still-growing support from Washington advocacy groups have kept member business lending (MBL) legislation in the spotlight in recent weeks, and continued credit union support of legislation that would increase the MBL cap will remain pivotal as members of Congress return home to their districts this week.

    Pending Senate and House bills would increase the MBL cap to 27.5% of a credit union's assets, up from 12.25%, under certain conditions, and the Credit Union National Association (CUNA) has estimated that this increased MBL authority would help to inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

    Senate leadership remains committed to a floor vote on the MBL legislation, but a voting date has still not been determined.

    "We have more confidence in the level of support in Congress today than we did two months ago, and we continue to build support every day," Ryan Donovan, CUNA's senior vice president of legislative affairs, said. To help build upon this strong base of support, Donovan said, credit union representatives can arrange to meet with federal lawmakers in their home offices, town hall meetings, and other venues this week. Credit unions should contact lawmakers on their Facebook pages and through Twitter to urge them to vote in favor of MBL legislation.

    The House and Senate members are scheduled to remain in their home districts until May 6.

    While bankers have stepped up their vocal opposition to increasing the MBL cap in anticipation of the Senate vote, several political- and consumer-oriented Washington groups have also joined the fray, touting the boost that an MBL cap increase could give to small businesses.

    A group that identifies itself as a coalition of conservative, libertarian and free-market organizations have voiced their support for the MBL cap increase, calling MBL legislation "a sound, free-market, deregulatory action that will create jobs, help small business, and assist veterans."

    The Consumer Federation of America (CFA) also urged legislators to support the MBL bills, which, in the CFA's words, would "expand access to affordable credit for small businesses and help strengthen local marketplaces that serve consumers well." And American Consumer Institute (ACI) Center for Citizen Research President Steve Pociask has supported an MBL increase in a blog post and an editorial in political news publication The Hill. (See related News Now story: ACI op-ed: MBL cap inhibits competition, hurts small business)

    The MBL fight, and the benefits that a cap increase could provide to the broader economy, have received press coverage in other localities, with The Wichita Eagle, the Colorado Springs Business Journal, Oklahoma's NewsOK, Minnesota's Finance & Commerce, the Baltimore Business Journal, the Sacramento Business Journal and Missouri's Springfield Business Journal running original reporting and editorials. (See related April 27 News Now story: Credit unions press MBL case with media)

    For more News Now MBL coverage, use the resource links.

    CDFI CUs remain true to mission, study says

    WASHINGTON (4/27/12)--Community Development Financial Institutions (CDFIs) have remained true to their mission, and "have succeeded in lending to and investing in individuals and communities not served by conventional financial institutions, while maintaining loan performance standards generally equivalent to those of the conventional financial sector," the CDFI Fund said in a report.

    The "CDFI Industry Analysis: Summary Report" was developed by the University of New Hampshire Carsey Institute's Center on Social Innovation and Finance, and examines the performance of 612 CDFIs between 2005 and 2010. The report examined 197 credit unions as part of the study. The study focused on capitalization, liquidity, portfolio health and risk-management issues faced by CDFIs.

    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.

    The CDFI fund report found that CDFI credit unions, and other institutions, have been "willing to take risks and serve customers with financial products that traditional capital markets are unlikely to provide."

    However, the report noted, these risks, when coupled with the recent recession, created issues in some cases. While the majority of CDFI credit unions examined in the report had excellent loan quality, some CDFI credit unions experienced greater amounts of delinquent loans, higher operating expense ratios, declining earnings, and higher delinquency rates between 2005 and 2010.

    Some of the risks and costs could be mitigated through certain operating procedure changes, according to the report.

    For the full report, use the resource link.

    Healthcare payment costs should be limited: CUNA to NACHA

    WASHINGTON (4/30/12)--The Electronic Payments Association (NACHA) should minimize costs on financial institutions that process healthcare reimbursement payments through the automated clearing house (ACH) network, the Credit Union National Association (CUNA) suggested in a comment letter.

    NACHA has considered changing some of its information processing protocols for healthcare payments, and has provided three different approaches for how this change could be accomplished. According to CUNA, all three possibilities would result in higher costs for credit unions and other Receiving Depository Financial Institutions (RDFIs). CUNA said that rather than adopting one of the three suggested changes, NACHA should continue to permit RDFIs to provide healthcare payments information on CCD+ entries to assist their healthcare receivers based on the capabilities and preferences of both the RDFI and its receiver.

    The CUNA comment letter also said RDFIs should not be required to automatically deliver reassociation data to healthcare receivers for each payment that is processed, as most payments are processed correctly. Not all healthcare receivers would want to receive the reassociation data automatically for every payment that is processed, CUNA added.

    For the full comment letter, use the resource link.

    Remote payment council announces debit chip/PIN working group

    WESTWOOD, N.J. (5/1/12)--The Secure Remote Payment Council (SRPc) has formed a working group to define and adopt a point of sale and ATM solution for chip and PIN acceptance for PIN debit networks. 
     
    The group's goal is to provide interoperable adoption of chip and PIN debit payments to the industry, while supporting innovation, choice, and the proven track record of PIN security in reducing payment fraud, SRPc.
     
    The working group includes leading PIN debit networks STAR, SHAZAM, PULSE, NYCE, AFFN, ACCEL/Exchange, ATH, Credit Union 24, CO-OP Financial Services and Jeanie.
     
    SRPc  is a nonprofit, inter-industry trade association that supports the growth, development and market adoption of debit-based internet e-commerce and mobile channel payment methods that meet or exceed the security standards for PIN-based, card-present payments.  Its members include merchants, financial institutions, merchant processors, issuer processors, payment brand companies, payments authentication hardware providers, payments authentication software providers and payments consultants. 
     
    In February, the SRPc published an open letter on chip and PIN calling on the industry to review the ramifications, understand their risks and come together to ensure that chip and PIN deployment in the U.S. is open to all market participants in an equitable manner.  This working group is a first step in answering that call to action.
     
    The debit networks have a history of working together--especially with regard to improving security--to define standards that maintain the integrity and quality of the U.S. payment industry.
     
     
    PIN debit is a growing payment method. In 2009, debit cards were used in 35% of noncash payment transactions. They eclipsed checks as the most frequently used noncash payment method, and 88% of debit cards supported both PIN- and signature-based transactions, according to Federal Reserve statistics on the debit card industry.  
     
    The SRPc and the debit networks are concerned that the current international standards for chip technology do not consider the competitive, newly regulated, real-time payment infrastructure within the U.S. For example, the new regulations on debit card interchange fees and routing now require that issuers support at least two unaffiliated brands on debit cards to provide merchant routing choice--a requirement that will need to be accommodated within chip technology going forward, said the council.  Deployment of a single interoperable chip and PIN solution for PIN debit should put in place one of the biggest remaining puzzle pieces to spur the U.S. payment industry toward adoption of chip technology, said SRPc.

    March mergers continue trend

    WASHINGTON (5/1/12)--The National Credit Union Administration (NCUA) announced 21 mergers in March, citing six primary reasons for the consolidations.
     
    Among the reasons cited for the mergers were expanded services, poor financial conditions, poor management, lack of sponsor support, lack of growth and loss of field of membership.
     
    Credit Union National Association statistics show 14 mergers of affiliated credit unions took place in March, and a total of 54 mergers of affiliated credit unions had taken place year to date through March. That compares with 61 mergers of affiliated credit unions year-to-date in 2011.
     
    NCUA approved the following mergers:

     

    Minn. FIC names 22 CU recipients of scholarships

    ST. PAUL, Minn. (5/1/12)--The Family Involvement Council (FIC), a committee of the Minnesota Credit Union Foundation (MNCUF), awarded $12,000 in scholarships to 22 individuals for the 2012-2013 school year.
     
    The scholarship program is the focus of FIC's mission to provide financial awareness to families and to further the education of Minnesota credit union members. Scholarship applicants submit information about their extra-curricular activities and accomplishments, and an essay on an FIC-selected topic.
     
    Two $1,000 Harvey Bakke scholarships and 20 $500 scholarships were awarded this year to college students in traditional (high school seniors entering college) and non-traditional categories.
     
    "We had a great response to our scholarship program this year, and the insightful responses to the essay question made it tough to choose our winners," said Bridget Moeller, FIC Chair. "The quality of applicants we have each year makes it clear that credit union members in Minnesota care about their education and the credit unions they belong to."
     
    The winners of the $1,000 scholarships were Bobbi Seibert of Members Cooperative CU, Cloquet, in the traditional category, and Ann Anderson of Affinity Plus FCU, St. Paul, in the non-traditional category.
     
    The winners of the $500 scholarships were:
     
    Traditional recipients                     
    Non-traditional recipients   
     
    In their essays, applicants answered the question, "What impact has social media had on your financial decisions and how could credit unions use these tools to help you with your financial goals?"
     
    Funds for the FIC's scholarship program are raised each year during the committee's silent auction, which is held during the Minnesota Credit Union Network's annual meeting and convention.                                                          

    Global women's forum announces keynoters

    MADISON, Wis. (5/1/12)--The Global Women's Leadership Forum in Gdańsk, Poland, will convene on July 15 in conjunction with the World Credit Union Conference to address issues facing credit unions today, including finding ways to better differentiate credit unions from their competition and providing a greater understanding of international credit union development work.
     
    Click to view larger image The Global Women's Leadership Forum will meet during the World Credit Union Conference in Gdańsk, Poland . Attendees gathered in Glasgow, Scotland last summer for the 2011 Global Women's Leadership Forum. (Photo provided by World Council of Credit Unions)
    During the forum, participants will meet with branding expert Jiao Zhang, a partner with Attune LLC, a marketing research and strategy firm that focuses on return on investment; and international development professional Gabriela Zapata, consultant for the Consultative Group to Assist the Poor.
     
    Zhang will explore how credit unions can do a better job with brand differentiation, while Zapata will provide an inside glimpse into international development and women's issues, specifically why the role of credit unions is crucial to both developed and developing countries.
     
    Despite operating in different environments, women in the network face similar leadership challenges at their credit unions and together find insight and strategic solutions.
     
    Prior to the event, on July 14 the Worldwide Foundation for Credit Unions will host a charity golf tournament benefiting the Global Women's Leadership Network at the Sierra Golf Club in Petkowice, Poland, hosted by presenting sponsor CO-OP Financial Services.
     
    The Global Women's Leadership Network, co-founded by World Council of Credit Unions and the Canadian Co-operative Association, provides women the opportunity and resources to make a measureable difference in each other's lives, and in their credit unions and communities. The international network engages members with professional and personal development through social media and educational forums, and provides the tools for women to connect and seek confidential advice from their peers.

    CU System briefs

    Budet elected by acclamation to CUNA Board

    MADISON, Wis., and WASHINGTON (5/1/12)--Tony C. Budet, president of University FCU, Austin, Texas, has been elected by acclamation to the open Credit Union National Association (CUNA) Board seat in District 5, Class 5, CUNA announced Monday.
     
    The seat was vacated when Harriet May, former CUNA Board chairman and former CEO of GECU, El Paso, Texas, announced her retirement.
     
    Budet will begin his term immediately and will serve through the 2014 Annual General Meeting. District 5 is comprised of leagues in Arizona, Colorado, Kansas, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Utah and Wyoming.

    CUANY, Coopera provide new resources to service Hispanics

    DES MOINES, Iowa (5/1/12)--The Credit Union Association of New York (CUANY) and Coopera are collaborating to offer the 2012 Hispanic Member Growth Strategy, a program to help New York credit unions increase their memberships within the Hispanic community.
     
    Under the program, Coopera will provide new resources to New York credit unions working to grow Hispanic membership.
     
    With one out of two Hispanics being unbanked or underserved, serving Hispanic members provides significant opportunities for credit unions, Miriam De Dios, Coopera vice president.   

    "Hispanics comprise the youngest, fastest-growing segment of the U.S. population, making them ideal next-generation credit union members," De Dios added.
     
    Five mid-sized credit unions ($25 million-$250 million in assets) participating in the 2012 Hispanic Member Growth Strategy program will receive a one-time Hispanic Opportunity Navigator (HON) assessment; semi-annual member analysis reports; access to Coopera's library of education tools including marketing guides, templates and webinars; and an annual follow-up to its HON assessment.
     
    Three small credit unions (with assets under $25 million) in the program will receive a one-time member analysis report, and access to Coopera's library of education.
     
    "The mission of the Hispanic Member Growth Strategy program is to help New York credit unions lead their customers down a path to financial responsibility," De Dios said. "Credit unions can provide many products and services to the Hispanic community that larger financial institutions cannot. The program will help New York credit unions identify Hispanic outreach opportunities within their neighborhoods and create affordable banking alternatives to meet the needs of this community."
     
    Seventeen percent of New Yorkers are Hispanic, and by 2025, one in five New York residents will claim Hispanic heritage, according to the CUANY. "Because the Hispanic population is very young as compared to other U.S. ethnic groups, we expect New York credit unions will be interested in investing in service to Hispanic members as a part of their efforts to lower the average age of membership," said Allison Barna, director of the New York Credit Union Foundation and community development for the association.
     
    The Credit Union National Association and Coopera Consulting, a subsidiary of the Iowa Credit Union League formed a partnership to design "El Poder es Tuyo" (the power is yours) a customizable, personal finance a Spanish-language personal finance Website for Hispanic credit union members and potential members. For more information use the link.
     

    Postal reform OK'd before District Work Break

    WASHINGTON (5/1/12)--Before members of the U.S. House and Senate returned to their home districts for this week's district work break, the Senate passed the 21st Century Postal Service Act of 2012 (S. 1789) by a 62 to 37 vote.

    The bill would reduce postal service days from six to five and, of greater interest to credit unions since it could affect operational costs to some degree, give the U.S. Postal Service (USPS) more flexibility in how it increases its rates.

    The bill would also require the postal service to consider how certain office location changes would impact small and rural communities, and to alter postal employee compensation and benefit structure in some cases.

    These and other moves are bids to cut costs and increase revenues. USPS earlier this year moved forward with a one-cent increase in first-class mail rates, bringing that rate to 45 cents.

    CFPB receives 1,800 advisory board nominations

    WASHINGTON (5/1/12)--More than 1,800 people contacted the Consumer Financial Protection Bureau (CFPB) regarding nominations for membership to the bureau's Consumer Advisory Board (CAB), according to a communication sent to nominees and those who nominated them.
     
    The CFPB said it will review each nomination and then select a group of "knowledgeable, experienced and committed individuals; representing a diversity of perspectives and backgrounds, to serve the consumer interest."
     
    The CFPB is developing the consumer advisory panel to help keep abreast of emerging trends and practices in the financial services and products industry.
     
    Credit union officials and their representatives are among those nominated. The Credit Union National Association (CUNA) has met with several CFPB officials to work to ensure credit union candidates are given full consideration for the board.
     
    CUNA submitted a list of 28 nominees from credit unions across the country. CUNA President/CEO Bill Cheney indicated at the time that the work of the advisory board will be enhanced if members are from credit unions or credit union leagues.
     
    CUNA also has encouraged the bureau to proceed with assembling its planned Credit Union Advisory Council. CUNA urged that nominees that are not accepted for the consumer board be considered for the CFPB's credit union advisory board.
     
    The CFPB communication to CAB nominees said a further public status update will not be made until the final board is selected. However, nominees selected as semi-finalists will participate in a phone interview and be required to complete a financial disclosure.

    CUs can tap into social media, mobile access

    MADISON, Wis. (5/1/12)--Two recent reports by Corporate Insight and Infosys indicate the importance of social media and mobile banking, respectively, to financial services companies, including credit unions.  
     
    Corporate Insight's report, "Getting Started with Pinterest," said that there a seven financial areas in which a firm could do so. Pinterest is a platform that uses pictures, images and videos more than text, and incorporates many social aspects of Facebook and Twitter to make connections between users and to disseminate content. 
     
    The seven topic areas are:
     
    1. Retirement: Conducting interactive, image-centric retirement marketing campaigns;
     
    2. Savings and investment goals: Posting photos of investment and saving goals;
     
    3. Credit card rewards: Showcasing credit card reward options and experiences users had redeeming them;
     
    4. Lifestyle: Posting photos from company-sponsored events;
     
    5. Corporate Mascots: Using pin boards to highlight a mascot's proprietary imagery;  
     
    6. Contests: Holding contest to monitor public sentiment; and  
     
    7. Charitable Giving: Chronicling  philanthropy to accentuate a company's charitable initiatives.
     
    Concerning mobile banking, an Infosys study released Thursday found 94% of survey respondents said conducting financial services operations on their mobile phone is easy (PRNewsWire April 26). 
     
    Also, 77% think conducting financial transactions of mobile phone is more convenient than traditional forms of banking However, only 42% surveyed said mobile banking is reliable.
    Other findings of the Infosys survey indicate:
    To read the reports, use the links.

    Inside Washington

    IRS changes to FATCA burden CUs: CUNA

    WASHINGTON (5/1/12)--U.S. credit unions should not be subject to any of the Internal Revenue Service's (IRS) recently proposed changes to Foreign Account Tax Compliance Act (FATCA) regulations, as the compliance burdens and overhead costs credit unions would face as a result of these proposed changes would far exceed any benefit to the IRS, the Credit Union National Association (CUNA) said in a Monday comment letter.

    The planned FATCA changes are designed to create a tax information reporting and withholding system for certain payments that are made to foreign financial institutions (FFIs) and other entities.

    Under the proposed regulations, credit unions and other domestic financial institutions as "withholding agents" would be required to identify members or customers that are FFIs and determine their compliance with FATCA and whether or not they have entered into a reporting agreement with the IRS. Credit unions would also be required to identify members that are foreign entities that are not financial institutions, and be able to verify whether such entities have any substantial U.S. owners.

    U.S. credit unions would also be required to identify and withhold on so-called "pass-thru payments" to FFIs involving a transfer of funds to a customer of the FFI that should be subject to withholding, but is not having withholding tax taken out of their account.

    Credit unions are concerned that the proposal would impose new compliance requirements on them at a time when credit unions are already subject to a range of additional regulatory responsibilities from a variety of other agencies, the letter said.
    To cope with the FATCA changes, credit unions would need to establish procedures and practices, including staff training, for ongoing identification of covered entities and transactions, and take additional steps to ensure they met their reporting and withholding compliance responsibilities when facing transactions that come under IRS regulations.

    CUNA said Congress did not appear to have credit unions in mind when it developed the FATCA provisions, and urged the IRS to "weigh the minimal benefits related to reporting and withholding that might be obtained from applying these requirements to U.S. credit unions."

    The IRS should exempt domestic financial institutions from the requirements, CUNA said. At a minimum, CUNA added, the IRS could exempt remittance transfers from the reporting requirements of the final rule.

    For the full comment letter, use the resource link.

    First Carolina Corporate reports strong financials

    GREENSBORO, N.C. (5/1/12)--First Carolina Corporate CU in Greensboro, N.C., reported 2011 earnings of $5.2 million--more than twice its original budget projections.
     
    Retained earnings were $8.4 million, for a ratio of 0.53%, which surpassed the National Credit Union Administration's (NCUA) October 2013 required threshold of 0.45%.
     
    First Carolina also exceeded NCUA's requirement of total capital--4% by October 2011--at 5.20% at year-end 2011, based on 12-month rolling average assets. Calculated on December 2011's average assets alone, the ratio is 6.10%.
     
    Year-end assets were $1.45 billion, compared with $1.918 billion in 2010. The drop was intentional, based on its capital restoration plan, said the corporate.
     
    "Our strategy called for moving a portion of members' deposits off balance sheet, allowing us to maintain average assets at a target managed level of $1.5 billion," said David Brehmer, president/CEO of the corporate. "The off-balance-sheet funds are completely liquid and accessible on a daily basis, earning the same rate as if they were to stay on our balance sheet. Taken together, members' on- and off-balance-sheet deposits were flat in 2011."
     
    Other initiatives in 2011 included First Carolina's new Private Label Student Loan Solution, provided through an exclusive arrangement with Campus Door, said Brehmer. The program gives credit unions an affordable, customizable way to help their members pay costs of higher education, said the corporate.
     
    First Carolina focused on new product development and transitioning services from U.S. Central Bridge FCU to other platforms. First Carolina, which had previously planned to eliminate operational dependencies on U.S. Central, has nearly completed the process.
     
    The corporate will hold its annual meeting in Pinehurst, N.C., in June, where it will elect board members and committee chairpersons.

    CU Online changes detailed in May 15 webinar

    ALEXANDRIA, Va. (5/1/12)--The National Credit Union Administration (NCUA) is offering a free webinar scheduled for May 15 that will outline changes the agency intends to make to its Credit Union Online system will answer questions from credit unions about the innovations.

    The CU Online system is a web-based data collection system that allows credit unions to file 5300 call reports and to post profile information.  The NCUA launched CU Online Sept. 1, 2009, and the changes coming in late May are the first major upgrade to the system.

    The changes, according to the NCUA, will include an enhanced user interface, the ability to convert call report and profile information into .pdf files, and other basic interface changes that will help users make their call report calculations and avoid leaving information out of their profiles.

    "We worked to incorporate the many valuable suggestions we received from credit unions to improve data integrity, enhance security, and make CU Online more user-friendly," said NCUA Examination and Insurance Director Larry Fazio.

    The agency also is planning to cease sending paper Call Report notices to credit unions that use the CU Online service, a change that will reduce waste and save the NCUA an estimated $20,000 in paper and postage costs per year.

    The webinar is scheduled to begin at 2 p.m. (ET) and will last 90 minutes. Advanced registration is required and the agency plans to archive the webinar on its homepage.

    To register for the webinar and read the full NCUA release, use the resource link.

    Wash. DFI names Lacy-Roberts as CU division program manager

    OLYMPIA, Wash. (5/1/12)--The Washington State Division of Credit Unions has promoted Doug Lacy-Roberts to program manager, effective today.
     
    Lacy-Roberts, who has been with the division for 12 years, will succeed Mike Delimont, who is retiring, said the Northwest Credit Union Association (NWCUA) (Anthem April 24).
     
    Previously, Lacy-Roberts supervised six examiners and was instrumental in the division's examination and supervision program. He also worked for seven years as a credit specialist for the Federal Deposit Insurance Corp. during the savings and loan crisis in the late 1980s and early 1990s.
     
    The division is within the Washington Department of Financial Institutions and is directed by Linda Jekel, who said that Lacy-Roberts "has a reputation of being fair with credit unions and is a great resource for examiners."

    Illinois league awards announced

    NAPERVILLE, Ill. (5/1/12)--The Illinois Credit Union League's (ICUL) 82nd Annual Convention provided a forum for recognizing several credit unions and individuals.
     
    They included:
     
    Desjardins Financial Education Awards. Scott CU, Collinsville, in both the youth and new adult categories, for credit unions with more than $500 million in assets.
     
    Dora Maxwell Social Responsibility Community Service Awards.  First-place winners were:
    Illinois Hall of Fame Inductee. Jack Teausant, CEO of Financial Plus CU, Ottawa.
     
    Illinois Credit Union Foundation Commemorative Awards. Donald Edwards, ICUL senior vice president, federal governmental affairs, was honored with a tribute award. Also, a repeat memorial scholarship in memory of George G. Burnett was recognized. The award was made possible with a gift from 1st Mid America CU, Bethalto.
     
    Louise Herring Philosophy in Action Award. Only credit unions in the more than $250 million to $1 billion assets category competed this year. The first-place winner was Scott CU, Collinsville.
     
    Also acknowledged were the many individuals, credit unions and chapters who contributed more than $364,000 to the Credit Union Political Action Council and who assisted the Illinois Credit Union Foundation in providing nearly $129,000 in grants and scholarships in 2011.
     
    With a sports theme of "Get in the Game!" the ICUL Annual Convention saw more than 650 executives representing 120 credit unions attending.

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    Small businesses urge passage of MBL bill

    MADISON, Wis. (5/1/12)--Small businesses continue to write to news outlets, urging the passage of a bill in Congress that would raise credit unions' member business lending (MBL) limit to 27.5% of assets from 12.25%.
     
    One of the latest example of small businesses stepping up to urge passage of Senate Bill 2231, the Credit Union Member Business bill, is featured in an Iowa newspaper, The Cedar Rapids Gazette, which on Sunday published, "Credit union came through when banks wouldn't," written by Robert H. Sternowski.
     
    Sternowski, a former engineer and manager at Rockwell Collins, retired in 2003 after 34 years and started a small business in aerospace electronics. "We were strictly a 'bootstrap' startup: zero capital, three engineers, a rented store front, and used furniture and equipment," Sternowski wrote.  The company performed electronic design and prototype work for the government/military market. It grew. It received an opportunity to manufacture what it was designing, which would mean more profits, but it could not take the effort "unless we could get a loan or line of credit to finance the work for our orders.
     
    "I went to the local banks--and was scoffed at by all. The reasons: You don't have 100% collateral, purchase orders are meaningless, the net worth of the company is too little, you are in the high-risk government business, and you have no track record. Basically every excuse in the book was thrown at me," Sternowski wrote. "All I wanted was a 90- to 120-day note in the amount of $300,000 to finance inventory and build costs for an approved blue-chip purchase order in hand."
     
    He turned to Collins Community CU, where he had been a member for 30 years. "They were willing to work with me, listened, offered suggestions, and finally gave me the line of credit I desperately needed to pull off the manufacturing order. We completed that order, and that was our stepping stone for further growth. We are now 25 people and going strong in a new, larger facility."
     
    Today he receives "cold calls from many of the local banks offering the moon in loans and services. They, of course, ask who our bank is, and when I tell them, they denigrate credit unions. I politely answer: I'm sorry, You made your own bed, now sleep in it. I already have a really good financial partner, and no one can prove to me otherwise."
     
    Sternowski's op-ed piece was so powerful that he received an e-mail from another small business owner who read it, said the Iowa Credit Union League. The e-mailer said he too had been bounced around by the banks and that the next time he needs a loan, he'll go to a credit union.

    Iowa newspapers have featured 11 op-eds, letters to the editors, and articles about the MBL issue since March 31, said the league. Many were from small businesses like Sternowski's supporting credit unions because of similar stories.

    CU System briefs

    NEW: Fed releases interchange survey

    WASHINGTON (UPDATED: 12:30 p.m. ET, 5/1/12)—The Federal Reserve's interchange study, as required by the Dodd-Frank Act, was released earlier today.

    Among the findings:
    The Fed reported there were 46.7 billion debit card transactions in 2011, with a value of more than $1.8 trillion. This total was a 24% increase from 2009's transaction total of 37.6 billion, and a 27% increase from the amount of interchange income tallied in 2009, $1.4 trillion, the Fed added.

    The Fed's interchange market surveys collect data on all costs associated with debit card programs and debit card transactions. The survey results are drawn from debit card issuers and payment card network representatives.

    The surveys are intended to compile aggregate or summary information concerning the costs incurred, and interchange transaction fees charged or received by issuers or payment card networks in connection with debit card transactions.

    The Fed surveys are intended to help the regulator monitor the interchange rule's impact on markets and the effectiveness of the interchange fee limitation exemption for small issuers.

    The debit interchange fee cap regulations, which became effective last fall, limit debit interchange fees for issuers with assets of $10 billion or more to 21 cents, and allow an additional five basis points per transaction to be charged to cover fraud losses. An extra penny may be charged by financial institutions that are in compliance with established fraud prevention standards. Most credit unions are exempt from the fee cap.

    The Credit Union National Association is analyzing the Fed report, and more on CUNA's analysis will be featured in Wednesday's News Now.

    For more on the Fed survey, use the resource link.

    Interactive program unites philosophy, business

    MADISON, Wis. (5/2/12)--The National Credit Union Foundation and the Missouri Credit Union Association have partnered to offer a new program to teach the credit union difference.
     
    The Credit Union Learning Map is in an interactive program consisting of three sessions that take participants through the history and structure of credit unions and concludes with a call to action.
     
    The sessions, ranging from two hours to a full-day, include:
    "The Learning Map  is valuable for all credit union board members, leadership teams and staff to participate in," says Gary Oakland, president/CEO of Seattle-based BECU. "Our credit union board [members] saw this training as an effective use of their time as they discussed consumer trends and how our actions align with credit union cooperative operating principles. I'm confident our board members will continue to reflect on this exercise during future planning sessions as they determine our strategy and actions."
     

    Lawsuits, breaches top News Now's Top 10 April stories

    MADISON, Wis. (5/2/12)--ATM fee notification lawsuits and new data breaches dominated the top 10 News Now stories for April. Here are the top 10 stories for the month:
     
    10. MBLs and more on tap as Congress returns

    WASHINGTON (4/16/12)--Although increasing member business lending (MBL) authority for credit unions remains the top priority for the Credit Union National Association (CUNA) and credit unions as members of the U.S. Congress return to Washington this week, CUNA Senior Vice President of Legislative Affairs Ryan Donovan said there are a number of other issues of interest to credit unions brewing.
     
    9. Former WesCorp officials ask court for jury trial

    LOS ANGELES (4/6/12)--Officials of the former Western Corporate FCU have filed amended counterclaims and a demand for a jury trial in the lawsuit filed against them by the National Credit Union Administration (NCUA).
     
    8. CUNA releases 12-question CU overdraft survey

    WASHINGTON (4/23/12)--The Credit Union National Association (CUNA) is asking credit unions to share information regarding their overdraft protection programs, and overdraft transfer and marketing practices, through a short, 12-question CUNA survey.
     
    7. What to do to mitigate breach risks--CUNA Mutual

    MADISON, Wis. (4/2/12)--The large-scale data breach revealed Friday at Atlanta-based card processor Global Payments Inc. has prompted CUNA Mutual Group to send its credit union bond policyholders a Risk Alert with advice on what they should do.
     
    6. Visa drops Global Payments from 'compliant' list

    ATLANTA (4/3/12)--Atlanta-based Global Payments  Inc. has been removed from Visa's "compliant service providers" list after revealing Friday that part of its third-party card processing system had been breached. However, Global says it has "contained" the breach to less than 1.5 million debit and credit cards.
     
    5. Two CUs settle ATM lawsuits in Michigan federal courts

    DETROIT (4/25/12)--Two Michigan credit unions, ACC Community CU in Grand Rapids and Lenco CU in Adrian, have settled separate ATM class-action lawsuits brought by area retiree Nancy Kinder who has filed nearly 40 lawsuits against credit unions and banks under the Electronic Funds Transfer Act.
     
    4. CU savings up, loans down, assets close to $1 trillion
     
    MADISON, Wis. (4/4/12)--Credit union assets nearly broke the $1 trillion threshold in February, and credit union membership remains strong, as it has since Bank Transfer Day, according to a Credit Union National Association economist's analysis of February's monthly sample of credit unions.
     
    3. CUNA takes on banks for MBL claims

    WASHINGTON (4/12/12)--The Credit Union National Association is warning lawmakers to not be fooled by the misinformation being circulated by bankers in an attempt to derail potential Senate action that could increase the credit union member business lending cap."
     
    2. CUNA seeks CU info in massive breach

    WASHINGTON (4/2/12)--The Credit Union National Association (CUNA) is seeking specific credit union information from Visa and MasterCard in the wake of the disclosure Friday that the companies are notifying card-issuing credit unions and banks of a massive data breach at a third-party payments processor, Atlanta-based Global Payments Inc.

    1. Judge throws out ATM notice lawsuit vs. PSECU

    HARRISBURG, Pa. (4/6/12)--A federal judge in Harrisburg, Pa., has dismissed a lawsuit that had alleged a credit union violated the Electronic Funds Transfer Act with improper ATM fee notification, saying in his ruling that the credit union showed undisputed evidence that an unknown third party had removed its posted notice illegally.
     

    CO-OP, Diebold to test two way ATM video support

    RANCHO CUCAMONGA, Calif. (5/2/12)--CO-OP Financial Services is partnering with Diebold  Inc. to test two-way video member service on CO-OP Network Diebold ATMs.
     
    Diebold is a CUNA Strategic Services provider.
     
    The two companies said they hope to migrate sales, additional teller functions and member service functions to the self-service channel. The goal of the partnership is to allow credit unions to reduce costs and expand their channels while maintaining a high level of personal service, they said. 
     
    Through the two-way video, members can connect to a call center member service representative for real-time, "face-to face" interaction . The service will facilitate call center services such as transfers and account opening.
     
    CO-OP Financial Services will provide the terminal driving capability and network access, and Diebold will provide member identification and video services to support the two-way video capabilities.

    cbanc Network launches subscription service

    AUSTIN, Texas (5/2/12)--cbanc Network, a collaboration community of more than 9,700 credit union and bank users, has launched a premium subscription service that offers exclusive features for credit union and bank subscribers.
     
    The new subscription tiers reward members that use the network heavily, while helping support the free network that members visit for assistance with policies, exams, best practices and vendor reviews.
     
    cbanc Plus members receive access to the new "Peer Trends" feature so they can see what peers from similar institutions are paying attention to the most. These members receive five "Free Content Downloads" to download any content item regardless of points price. In addition, a 1.5x Points Booster allows them to earn 50% more points every time they complete a vendor review, survey, content review or exam watch.
     
    cbanc Pro includes the same benefits as cbanc Plus, in addition to one free registration to a webinar, five additional Free Content Downloads (10 total), and access to the Vendor Management and Due Diligence software solutions, which have a combined value of 4,500 cbanc points.
     
    The new subscription tiers add an additional layer of value to reward cbanc members for participating in the Network, according to cbanc President  Myers Dupuy. The free content downloads alleviate the pressure of earning points by allowing members to purchase expensive content immediately, without having to contribute to earn points first.
     

    CU comment sought on NCUA annual reg review

    WASHINGTON (5/2/12)--Each year, the National Credit Union Administration (NCUA) reviews one-third of its regulations to identify any rule or provision that it deems "outmoded, ineffective, insufficient, or excessively burdensome," and the Credit Union National Association (CUNA) has asked credit unions to share their concerns regarding the NCUA's 2012 regulatory reform list, which was released earlier this year.

    Regulations under review in 2012 include rules governing bylaws, fields of membership, fixed-asset ownership, mergers, and corporate credit unions, among others.

    The NCUA will review the following regulations in 2012: NCUA Chairman Debbie Matz in announcing the list said the agency is "committed to 'modify, streamline, expand, or repeal' rules that are not required by statute and would not jeopardize safety and soundness," and the NCUA has noted the 2012 round of reviews begins a new three-year rotation that will result in another complete review of all NCUA regulations by 2014.

    Comments should be sent to CUNA by July 16.

    The NCUA is accepting public comments on the substance and wording of each rule until Aug. 3.

    For the full CUNA comment call, use the resource link.

    Filene accepting applications for innovators group

    MADISON, Wis. (5/2/12)--The Filene Research Institute is accepting applications for 17 spots in its innovation program, called i3.
     
    The group for innovators has a lower acceptance rate than Cornell University and 13% of its participants become credit union CEOs, said Filene, noting "the future of credit unions depends on its success."
     
    The recruits will help create new products, services, business models and processes that aim to help transform consumers' financial lives.
     
    To be considered, candidates must be executives at credit unions or credit union service organizations (CUSOs) who are not quite at the CEO level but who are considered a leader or future leader in the credit union system.
     
    Seventeen candidates will be selected for two-year terms. The program requires they have commitment and support from their credit union's CEO or manager to participate in the program. Other requirements include a commitment to:
    The next meeting is in Ann Arbor, Mich., Oct. 9-11.
     
    Applicants must complete the application form, take an online 100-question behavioral/entrepreneurial assessment, and take a short "grit" test (to determine perseverance and passion for the work).  
     
    Application deadline is at 12 a.m. CT May 31. Candidates will be selected and notified by mid-August. For more information, use the link.

    WOCCU urges key changes to proposed FATCA rules

    WASHINGTON, D.C.  (5/2/12)--The World Council of Credit Unions (WOCCU) this week said it is opposed to some aspects of the U.S. Internal Revenue Service's (IRS) proposed implementation of the Foreign Account Tax Compliance Act (FATCA).
     
    The proposed regulations would require many foreign financial institutions (FFIs), including credit unions, to register with the IRS to detect taxable account activity by U.S. citizens in foreign countries. They would place unnecessary and inappropriate burdens on small non-U.S. credit unions, WOCCU said in an April 30 letter to the IRS.
     
    "Credit unions are in most cases small, localized financial institutions that, like banks, provide members with retail banking services," wrote Michael Edwards, WOCCU chief counsel and vice president for advocacy and public affairs. "Unlike banks, only people within the credit union's common bond can become members. Credit unions are unlikely to have accounts held by 'U.S. persons' who are not residents of the credit union's home country."
     
    WOCCU further urged the IRS to revise current definitions within FATCA rulings so that small local credit unions are exempt from compliance with the rule. Some credit unions' current inability to qualify as "nonregistering local banks" as defined by the proposed legislation puts an undue and inappropriate burden on the institutions, a concern of credit union leaders around the globe. Appropriately revising the proposed rule would help small credit unions avoid noncompliant activities, the letter said.
     
    WOCCU also urged the IRS to make other changes to the rule, including actions that would:
    "We appreciate the opportunity to comment on the proposed FATCA regulations," said Brian Branch, WOCCU president/CEO. "We urge the IRS to review our recommendations and act in a way that removes undue compliance burdens on small, locally owned credit unions, freeing them to use their resources to serve their members."
     
    The public comment period on the proposed FATCA regulations closed April 30. WOCCU has petitioned the IRS to be allowed to participate in a public hearing in Washington, D.C., on May 15 to further support its recommendations. The final law, due to take effect Jan. 1, will be released before year-end.

    Despite Fed survey, jury out on interchange impact: CUNA

    WASHINGTON (5/2/12)--While the Federal Reserve's study of the impact of the debit card interchange fee cap suggested that smaller issuers have only seen modest changes in their rates, Credit Union National Association (CUNA) President/CEO Bill Cheney said "the jury is still out" and credit unions continue to be concerned that market forces will ultimately drive down the fees that the exemption for smaller institutions is intended to protect.

    For a CUNA summary of the Fed survery report, use the resource link below.

    The survey, which was required by the Dodd-Frank Wall Street Reform and Consumer Protection Act and is intended to help the regulator monitor the interchange rule's impact on markets and the effectiveness of the interchange fee limitation exemption for small issuers, found that:
    The Fed reported there were 46.7 billion debit card transactions in 2011, with a value of more than $1.8 trillion. This total was a 24% increase from 2009's transaction total of 37.6 billion, and a 27% increase from the amount of interchange income tallied in 2009, $1.4 trillion, the Fed added.

    The survey collected data on all costs associated with debit card programs and debit card transactions from card issuers and payment network representatives.

    The surveys are intended to compile aggregate or summary information concerning the costs incurred, and interchange transaction fees charged or received by issuers or payment card networks in connection with debit card transactions.
    Overall, Cheney said, it would be a mistake to read too much into the results of Federal Reserve's debit card interchange fee survey.

    The debit interchange fee cap regulations, which became effective last fall, limit debit interchange fees for issuers with assets of $10 billion or more to 21 cents, and allow an additional five basis points per transaction to be charged to cover fraud losses. An extra penny may be charged by financial institutions that are in compliance with established fraud prevention standards. Most credit unions are exempt from the fee cap.

    Cheney on Tuesday noted that the debit fee regulations do not require card networks to maintain a two-tiered system; they do so only at their discretion. And secondly, it is too soon to tell whether the routing and exclusivity provisions that dictate the use of PIN or signature networks will over time undermine any two-tiered interchange fee structure by driving small-issuer rates toward the large-issuer cap.

    The routing and exclusivity provisions in the interchange regulation have only been in effect since April 1, and the Fed survey only covers the fourth quarter of 2011, he also noted.

    For more on the Fed survey, including CUNA's summary, use the resource links.

    IRS announces 2013 VITA application deadline

    WASHINGTON (5/2/12)--Applications for the Internal Revenue Service's Tax Counseling for the Elderly (TCE) and Volunteer Income Tax Assistance (VITA) grant programs will be accepted until May 31, the IRS has announced.

    The TCE Program offers free tax help to taxpayers who are 60 and older, and VITA offers free tax help to people earning $50,000 or less. Many credit unions offer these forms of tax preparation assistance.

    Credit unions and community organizations that take part in the VITA Program receive IRS-provided training in the preparation of basic tax returns and establishment of tax preparation sites. Organizations that apply for funding in this round may receive annual VITA funding for as many as three years.

    The IRS in a release noted it awarded $5.6 million in funds to 30 TCE grantees ahead of the most recent tax filing season. A total of $12 million was awarded to 213 VITA grantees in that same time period, and the IRS said the two programs had processed more than 2 million returns as of April 9.

    La. insurance commission is first to partner with FinCEN

    VIENNA, Va. (5/2/12)--The Louisiana Commissioner of Insurance and the Financial Crimes Enforcement Network (FinCEN) have signed a Memorandum of Understanding (MOU) that will allow the state and federal regulators to share information meant to better protect the financial industry and consumers from criminal activity and fraud.

    FinCEN hopes this is just the first of many such agreements with states. The goal of the MOU are to enhance communication and coordination between FinCEN and state insurance departments to help states better identify, deter and interdict financial crime. FinCEN the agreement should also help states to efficiently pass information along to FinCEN, which would enhance its crime-fighting efforts.

    Louisiana's insurance commissioner, James J. Donelon, is president-elect of the National Association of Insurance Commissioners, and FinCEN said he will "help set the standard for other states to follow."

    "This is a significant tool that will enhance our efforts to better protect our consumers from fraud and other criminal activity," said Commissioner Donelon in the MOU announcement.
     

    May 8 webinar is for CTR, SAR tech specifications

    VIENNA, Va. (5/2/12)--Information technology (IT) professionals--those responsible for integrating upcoming technical specifications for updates to the Financial Crimes Enforcement Network's (FinCEN) new Currency Transaction Report (CTR) and Suspicious Activity Report (SAR)--may be interested in a May 8 informational webinar.

    The FinCEN webinar will also address recently released specifications for its new Designation of Exempt Person (DOEP) report. The session is specifically designed for those IT professionals responsible for integrating the new technical specifications into batch filing processes; these may be vendors of batch filing programs as well as in-house IT staff of financial institutions.

    FinCEN representatives will discuss the following topics during the webinar:
    FinCEN will be offering a separate webinar at a later date for financial institution employees and compliance professionals with BSA-related responsibilities.

    It is recommended that participants of the IT webinar review the technical specifications prior to the session and document any specific questions for discussion. Use the resource link to access the specifications.

    Two surveys indicate Americans need financial overhaul

    MADISON, Wis. (5/2/12)--Two recent surveys indicate Americans need a finance habit overhaul and represent an opportunity for credit unions to provide financial education to members.
     
    Credit unions can sit down with members and educate them on savings, investing, spending and their financial goals by providing counseling, educational services and brochures.
     
    A majority of consumers surveyed are not financially prepared for a medical emergency, with 28% saying they have less than $500 saved for medical expenses, and 51% indicating they have less than $1,000, according to an April 2012 Aflac Workforce Report.
     
    There are roughly 38.9 million medically consulted injuries per year, according to the National Safety Council.
     
    When asked how they would pay for out-of-pocket expenses due to an unexpected illness, more than half (57%) of respondents said they would have to tap into savings, 30% would use a credit card and 19%--nearly one out of five people--would have to withdraw funds from their 401(k) plans to cover the costs.
     
    Of those surveyed, 58% admitted they have no financial plan to handle a large, unexpected cost, while 8% said they're financially prepared.
     
    Also, 51% said one of the major reasons for not setting money aside for emergencies is that they were trying to pay down debt, the survey said.
     
    In a related matter, when asked to describe the state of their personal financial situation, 80% of more than 1,400 respondents admitted their finances were in need of a major overhaul, according to an April poll hosted on the National Foundation for Credit Counseling (NFCC) website. 
     
    "This statistic parallels the findings of the recent NFCC Financial Literacy Survey in which 80% of adults indicated they could benefit from additional advice and answers to everyday financial questions from a professional," said Gail Cunningham, NFCC spokesperson. "It is encouraging that people recognize how perilous their financial situation has become. Now they need to take action to resolve the problem and keep it from spiraling out of control."
     
    To help consumers determine if their finances could use an overhaul, the NFCC developed a 10-question true/false quiz.
     
    A summary category question on the state of respondents' overall finances and the results:

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