Wednesday, April 30, 2008

Fight's not over for CU relief

WASHINGTON (4/30/08)—The Credit Union National Association (CUNA) said Tuesday that the fight on Capitol Hill for credit unions and their members will continue, despite banker attempts to derail the Credit Union Regulatory Relief Act (CURRA, H.R. 5519) this week.
"This is not over. We will continue to push for passage of CURRA," CUNA President/CEO Dan Mica said Tuesday.

CUNA's lobbying team was on Capitol Hill early Tuesday morning after learning that a much-anticipated action on CURRA was pulled from the day's House voting schedule.
CURRA's noncontroversial status changed when the bankers disregarded House leadership wishes and objected to the credit union bill. House leaders had planned to pair the credit union measure with a regulatory relief bill for banks.

"From our perspective, the bankers thumbed their noses at House and committee leadership by violating an agreement for each of our industries to get relatively modest regulatory relief legislation now and work on broader elements later," Mica said, adding that he had talked to the bill's key sponsors, Reps. Paul Kanjorski (D-Penn.) and Ed Royce (R-Calif.).

"They are determined to bring CURRA back to the House floor for a vote as soon as possible either on suspension or under regular order," Mica said.

He noted that in coming days, CUNA will be holding private discussions with the two congressmen, as well as with Chairman Barney Frank (D-Mass.) of the House Financial Services Committee, to assess strategy and options.

Mica also said that had the bankers stuck by the agreement and not interfered with credit union legislation, the bill likely would have been approved easily in the House.

"By our whip count, we had at least 80% of the House with us yesterday had a vote been allowed to proceed. So we feel we go into these discussions in a strong position," Mica told credit unions.
CURRA proposes, among other things, to permit federal credit unions to add service to underserved areas regardless of original field of membership. It would also omit member business loans to underserved areas from counting toward the current cap.

CUNA and the leagues support CURRA, but emphasize that credit unions need additional regulatory relief measures that are included in the provisions of the broader credit union bill, the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537). CURIA would address the overall member business lending cap and approve a risk-based capital system for credit unions.

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Tuesday, April 29, 2008

House won't vote today on CU bill

WASHINGTON (4/29/08)—The Credit Union National Association's (CUNA) lobbying team will be on Capitol Hill early Tuesday morning to focus on next steps after learning that a much anticipated Credit Union Regulatory Relief Act (CURRA, H.R. 5519) was pulled from Tuesday's House voting schedule.

Reasons for the House leadership decision to pull the bill were not yet clear, according to CUNA President/CEO Dan Mica. However, he pointed out that the suspension calendar is reserved for noncontroversial measures.

CURRA's noncontroversial status changed when the bankers disregarded House leadership wishes and objected to the credit union bill. House leaders had planned to pair the credit union measure with a regulatory relief bill for banks.

CUNA and the leagues late Friday and Monday urgently requested that credit unions contact their members of Congress in advance of the expected House vote.

"The bankers will sacrifice their own regulatory relief measure simply to ensure credit unions get absolutely nothing from Congress," said Mica. "This behavior ultimately squeezes working Americans, who now more than ever should benefit from affordable financial services provided by credit unions."

CURRA proposes, among other things, to permit federal credit unions to add service to underserved areas regardless of original field of membership. It would also omit member business loans to underserved areas from counting toward the current cap.

However, only the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537) would address the overall MBL cap and approve a risk-based capital system for credit unions.

"We will do our utmost to get CURRA back on the House schedule under regular order, if at all possible," said Mica.

The CUNA leader thanked state leagues and credit unions for their tremendous grassroots efforts in recent days. "Our preliminary reports indicated we would have had a solid victory if this had come to a vote," he added.

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Monday, April 28, 2008

Report: CUs keeping key presence in auto loan market

RANCHO CUCAMONGA, Calif. (4/28/08)--Credit unions' performance in the auto lending marketplace mirrored the performance of banks and other financial institutions in 2007, according to CU Direct Corp. (CUDL).

The annual report, which highlights key credit union auto lending trends and statistics during the course of the previous year, indicated that credit unions maintained a significant market presence in 2007.

Of all auto loans originated last year, 16.9% were through credit unions--down slightly from 18.0% in 2006, according to the report. Likewise, banks' market share declined to 32.6% in 2007 from 34.2% in 2006.

CUDL, which administers the nation's largest indirect and point-of-sale lending network for credit unions, has developed the Auto Lending Business Intelligence Report as a resource for credit union organizations to better understand credit unions' role in the auto lending market, benchmark their performance and learn best practices.

The network includes more than 500 credit unions and 9,000 automotive dealers nationwide.
A key to credit unions' success in 2007 was their ability to offer competitive financing to their members when compared with other lending institutions, the report said.

Credit unions continued to offer low rates and flexible loan terms to grow loan volume, while other financial institutions turned to nonprime and subprime lending to boost their loan volumes. For instance, subprime loans made up nearly half of all the loans that finance companies originated in 2007.

"Auto lending continues to be the one area in which credit unions hold a significant market share," said CUDL Market Research Analyst Joe James. "In fact, there are five states in which an individual credit union is the top lender in the entire state."

The report also indicated that credit unions continue to effectively manage risk of their auto lending portfolios.

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Immediate CU grassroots action urged for CURRA

WASHINGTON (4/28/08)—On the cusp of an important House vote on credit union regulatory relief legislation, the Credit Union National Association (CUNA) and the leagues are urging credit unions to push back banker opposition and help clear the way for H.R. 5519, the Credit Union Regulatory Relief Act (CURRA).

The House is scheduled to consider the bill Tuesday (see related story : House set for CURRA vote tomorrow) and the credit union groups urged their members to contact House lawmakers in support of CURRA.

"Unfortunately, the bill is facing opposition by the American Bankers Association and other anti-credit union interests. We need your help to secure CURRA's passage in the House of Representatives," CUNA and the leagues said in their Friday Action Alert.

It added: "The bankers have declared that credit unions can have nothing, not now or ever. We need this win to show them otherwise! "

Credit unions were asked to call or email Congress immediately with the following messages:
H.R. 5519 should be non-controversial – most of the provisions of bill have already passed the House in 2004 and 2006. The only new provisions within CURRA are targeted to allow credit unions to serve underserved people and areas and were very recently discussed at a hearing before the House Financial Services Committee on March 6.

This is the first major piece of credit union specific legislation to be considered in the House of Representatives since 1998.

CURRA would help credit unions serve people and areas that do not have access to mainstream financial service providers. This is common sense. It is part of the core mission of credit unions to serve consumers, but only multiple group credit unions are eligible to serve the underserved under current law. CURRA makes all federally chartered credit unions eligible to serve the underserved areas.

VOTE YES on H.R. 5519. This is important legislation that will help credit unions serve their members well in the 21st century. CUNA and the leagues support CURRA, but emphasize that credit unions need additional regulatory relief that are included the provisions in the broader credit union bill, the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537).

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Friday, April 25, 2008

CUNA to NCUA: No new regulatory burdens

WASHINGTON (4/25/08)—The Credit Union National Association (CUNA) said it does not support any new regulations suggested by a National Credit Union Administration (NCUA) on credit union corporate governance issues.

The NCUA has requested comments on whether new regulations are needed on a range of issues such as mergers, conversions, private insurance and related topics.

"This is one of the most significant comment letters CUNA will file this year," said CUNA Deputy General Counsel Mary Dunn. "Comments are not due until April 30 and we encouraged leagues and credit unions to weigh in with NCUA to oppose new regulations as we have done."

In January, the NCUA approved an advanced noticed of proposed rulemaking (ANPR) with proposals to amend its rules to more clearly define a credit union board's fiduciary duties in the face of major decisions, such as mergers or conversions to mutual thrifts.

In an April 18 comment letter to the agency, CUNA said it feels "very strongly" that credit unions need more regulatory relief, not additional constraints and that agency action on mergers and conversions is unwarranted at this time.

CUNA said the proposals would "needlessly intrude in the operations of credit union boards." Instead, CUNA recommended the NCUA consider "carefully crafted and circumscribed guidance on a very limited number of issues," such as communications with the members of a target credit union in a "hostile" takeover situation.

"We urge NCUA to work with CUNA and the credit union system in the development of such guidelines," the letter said, adding that CUNA would also like a role in future discussions on whether an appropriate standard could be developed on the scope of fiduciary duties of federal credit union board members.

The CUNA letter acknowledged efforts by the NCUA to provide some regulatory relief through its annual review of its regulations and initiatives, and urged the regulator to also review how the examination process could be improved.

"Federally insured credit unions are feeling besieged under the regulatory encumbrances they face daily," CUNA wrote. While not all of the burden is the result of NCUA-driven regulations—Bank Secrecy Act requirements play a huge role—CUNA noted that the NCUA has, in fact, adopted or proposed a number of initiatives in recent months.

"Further, credit unions across the country are increasingly raising concern about over-zealous examiners on a number of issues."

CUNA also warned that BSA compliance and negative examiner responses to reasonable efforts to assist members with mortgage workout plans are among the escalating concerns of credit unions.

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Thursday, April 24, 2008

Earth Day prompts CU activities

MADISON, Wis. (4/24/08)--This year's Earth Day, celebrated Tuesday, prompted credit unions to undergo activities to promote being environmentally friendly.

Belco Community CU, Harrisburg, Pa., participated in the Adopt-A-Highway initiative April 19 for the second consecutive year. Credit union employees and their families gathered 16 bags of trash along the highway. Belco has adopted a section of a nearby interstate and committed to volunteer throughout the year.

Belco's Adopt-A-Highway program is a part of the credit union's "Promise to Give" pledge. Employees voluntarily sign an agreement committing at least five hours of non- paid volunteer time.

Boulder Valley CU, Boulder, Colo., celebrated Earth Day by hosting an Eco-Expo that featured more than 30 local environmentally friendly businesses and organizations. The credit union also offers discount financing for fuel-efficient vehicles, solar panel additions and other green home improvement products.

Service 1st FCU, Danville, Pa., is offering green loans for hybrid vehicles this week. Qualifying loans will receive a 1.00% discount on the loan rate, said the Pennsylvania Credit Union Association (Life is a Highway April 22).

Philadelphia FCU celebrated Earth Day by gardening at Friends Hospital. Riverfront FCU, Reading, Pa., collected more than 100 computers, monitors, printers and keyboards to be recycled for new machines (Life is a Highway April 23).

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CUNA thanks Rep. Clarke for pro-CU comments

WASHINGTON (4/24/08)—Credit Union National Association (CUNA) President/CEO Dan Mica Wednesday thanked Rep. Yvette Clarke (D-N.Y.) for her strong statement of broad praise of credit unions submitted for the April 22 Congressional Record.

Clarke, a credit union member herself, made her statement to "recognize the importance of credit unions" to their communities.

"I am a true believer that people should help people," which, Clarke said, is the mission of credit unions.

"Members know that during the economic downturn that we are currently facing right now, credit unions will always be there to serve their members to the best of their ability," Clarke said.

Clarke noted that as the nation suffers through the current mortgage crisis, credit unions have displayed an "outstanding record of service to both minority and low- to moderate-income mortgage applicants and have a long history of responsible mortgage lending."

"What is impressive to that in 2006, credit unions approved an overwhelming 71% of applications from low- to moderate-income mortgage applicants," she added.

Clarke also lauded credit unions for their generally higher interest rates on deposits and lower interest rates charged for loans and other services than those charged by banks.

"(C)redit unions are extremely vital to my hometown, New York City. Credit unions serve more New Yorkers living in low-income and underserved areas that are continually being abandoned by big corporate banks," Clarke said.

She also called lawmakers' attention to the following figure: She said that more than one-third of credit union CEOs nationwide are women.

In a letter to Clarke, CUNA's leader noted credit unions' appreciation of the congresswoman's remarks for the official record of Congress. He commended her for her understanding of the credit union difference.

"Credit unions do indeed seek to fill the vacuum created in many communities as banks and other types of financial institutions leave to serve more lucrative markets. The credit union movement was founded to serve people who had little or no access to mainstream financial services." Mica wrote.

He also noted that House Financial Services Committee Chairman Barney Frank (D-Mass.) made similar favorable comments about the responsible mortgage lending practices adhered to by credit unions.

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Wednesday, April 23, 2008

Membership growth just ahead of population growth

FARMERS BRANCH, Texas (4/23/08)--Credit union membership growth is barely staying ahead of population growth, an industry expert told the Texas Credit Union League's Annual Meeting and Expo last week.

Steve Rodgers, editorial director for the Credit Union National Association, addressed the issue of why 78 million consumers eligible for credit union membership aren't joining (LoneStar Leaguer April 21).

There are many reasons consumers aren't joining credit unions, Rodgers said. Consumers don't perceive credit unions to be convenient, they are not aware of their eligibility for membership, and they don't want to hassle with switching financial institutions.

Rodgers shared case studies of 15 U.S. credit unions that are growing at a significantly faster pace than other credit unions--not only in membership, but also in assets and loans.

When considering growth strategies, credit unions should go for planned, controlled growth--defining why they want to grow--and don't just grow for growth's sake, Rodgers said.

While each of the 15 credit unions approached growth uniquely--whether it be membership, loans or assets--there were many similarities in their strategies, he said.

For example, in five case studies the credit unions sought to grow their assets. Each credit union maintained high community visibility; allocated resources to conduct member and nonmember research to test its assumptions; added new and profitable products; and invested heavily in training staff so the credit union could offer better member services.

The five credit unions that focused on growing their loans had a higher risk tolerance, were effective in product bundling, and worked closely with members to understand their unique circumstances, Rodgers said.

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Lawmakers urge halt to Internet Gambling rulemaking

WASHINGTON (4/23/08)—Some congressional heavy hitters urged the Federal Reserve Board and U.S. Treasury Department to set aside their endless and toilsome efforts to implement the Unlawful Internet Gambling Enforcement Act (UIGEA).

House Financial Services Committee Chairman Barney Frank (D-Mass), and three other of the panel's members, sent an April 21 letter to Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke regarding what they termed "the unworkable regulations" of UIGEA. Treasury and the Fed are charged by the law to issue rules to implement its provisions.
The letter noted an April 2 House Financial Services subcommittee hearing on the internet gambling law, at which representatives from both the implementing agencies, as well as financial services industry, testified.

Through that hearing "the Federal Reserve, the Treasury and the industry made clear that regulations from the UIGEA are vague, confusing, burdensome, and generally unworkable," the letter said.

The hearing resulted in the introduction of a bill, H.R. 5767, which would prohibit the implementation of UIGEA regulations. The bill is sponsored by Frank and Rep. Ron Paul (R-Texas), who is also a House Financial Services Committee member.

"The regulations, like the underlying legislation, fail to define the term 'unlawful internet gambling,' leaving it to each financial institution to reconcile conflicting state and federal laws, court decisions and inconsistent Department of Justice interpretations, when determining whether to process a transaction.

"Furthermore, some of the information needed to make this determination would likely be unavailable to banks, because customers or financial institutions in foreign jurisdictions will likely be unwilling or unable to provide it," the letter noted.

It went on to say that given the implementation difficulties, other national priorities that demand the agency's attention, such as the mortgage crisis, and the pending legislation that would prohibit implementation of the law, "(W)e believe it would be imprudent for you to devote additional agency resources to this Sisyphean task." Sisyphus is the sinner in Greek mythology condemned to the endless toil of rolling a boulder uphill then watching it roll back down again--for eternity.

The letter was signed by Frank, Rep. Luis Gutierrez (D-Ill.), who heads the House subcommittee on domestic and international monetary policy, Paul, who is ranking member of that subcommittee, and Rep. Peter King (R-N.Y.), who is former chairman of the House Homeland Security Committee.

The Credit Union National Association (CUNA) was among the witnesses at the UIGEA hearing. CUNA board member Harriet May, CEO of GECU, El Paso, Texas,, testified on the compliance burden for credit unions that would be associated with UIGEA. She urged the subcommittee to halt current efforts to implement the law.

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Tuesday, April 22, 2008

American Banker notes banker 'doublethink'

WASHINGTON (4/22/08)—The ability of the leader of the American Bankers Association to hold two contradictory beliefs simultaneously—at least where credit unions are concerned—was questioned in the April 21 issue of American Banker.

Confused yet? asked a subhead in the publication's "Washington People" section. The short article pondered whether ABA President Ed Yingling has been "flipping through the pages of George Orwell's '1984,' which defined 'doublethink' as the power to hold two contradictory beliefs simultaneously."

The article noted that after the Treasury Department outlined its blueprint for financial regulatory reform, Yingling issued a statement that said, "We are no more ready to abandon the thrift charter than we are to abandon the American family dream of living in a house that you own."

That release was closely followed, the article said, by an ABA letter of praise for the Treasury plan, which suggested merging the credit union and bank charters, by saying the two types of institutions are very similar and should be treated as such.

"The letter raised eyebrows among some observers, since, generally speaking, the bank and thrift charters are considerably more alike than the bank and credit union ones.

"For example, credit unions are cooperatively owned not-for-profits, as opposed to banks, which are for-profit institutions owned by shareholders. In contrast, both bank and thrifts are for-profit organizations," American Banker noted.

The article said the ABA "rejected the claim that the ideas are contradictory."

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Monday, April 21, 2008

Are you paying attention to 401(k) fees?

WASHINGTON (4/21/08)--Even if you've been diligently directing funds into your company's 401(k), hidden charges may be slowly taking a bigger bite from your nest egg than you think (Kiplinger's May 2008).

A study released last year by AARP revealed that 83% of 401(k) plan participants don't know how much they're paying in fees, and 54% say they don't feel knowledgeable about how those fees affect the balance of their retirement savings.

Investment fees--which make up the brunt of the fees you pay--aren't easy to calculate. And don't expect to find a line item on your statement that spells out the costs. To figure out what you're paying for investment fees, use the investment fees calculator at, or follow these steps:

Go to your 401(k) Web site and look for the expense ratio--expressed as an annual percentage of your total investments--for each fund in your portfolio. Or, look it up using Kiplinger's Fund Finder at

Write each expense ratio beside the balance in each fund listed on your statement. Multiply the expense ratio by your ending balance, which is the cost of each fund. If the ratio is 0.55% and your balance is $30,000, you're paying $165 a year in direct investment fees.

Then, add up all the expenses for all the funds you own and divide that into your total balance. If your total expense ratio is 1% or less, that's considered reasonable.

Even a one-percentage-point difference adds up to big bucks over time. If you think your plan's expenses are too high, talk with your boss or a human resources representative to see if there are lower-cost alternatives.

For more information, read "401(k) Fees: Know What You're Paying, What You're Getting" in Home & Family Finance Resource Center.

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CUNA chairman attacks 'new breed of CUs' misnomer

WASHINGTON (4/21/08)--Credit Union National Association (CUNA) Chairman Tom Dorety isn't happy about the Treasury's blueprint to revise the financial system--and most of all, he's "tired of this idea that there's a new breed of credit unions."

The "new breed" of credit unions refers to a label that bankers use to describe some of the nation's larger credit unions. At a hearing March 6, American Bankers Association Chairman Bradley Rock said expanding the credit union charter, while keeping the tax waiver, would help the "new breed of credit unions" (American Banker April 18).

Rock's testimony made Dorety's blood boil, Dorety told the newspaper.

Bankers argue larger credit unions have abandoned their original mission. But the larger size makes them "no less of a credit union," Dorety told the newspaper. Dorety is CEO of Suncoast Schools FCU, Tampa, Fla., which has $6 billion in assets, making it the seventh-largest in the U.S.

Suncoast has grown because it's successfully provided services to its members, and if credit unions don't grow, "we're going to die," he added.

Dorety's credit union was created by teachers as a non-profit collaborative with a few thousand dollars in assets and a volunteer board of directors. Today, though the credit union's assets have grown, the collaborative status and volunteer board has not changed, Dorety said.

But credit unions "can't just serve people of modest means." While Suncoast has members in low-income areas, it also has branches in wealthier ones, he told the newspaper.

Small credit unions cannot be separated from larger credit unions because they depend on them for help. Requiring them to pay taxes would eliminate the credit union industry, Dorety said.
Credit unions also do a better job than banks lending during a crisis. They are in a position to keep lending, he told the newspaper.

CUNA has lobbied against the Treasury blueprint since it was released March 31. CUNA CEO Dan Mica has spoken against the plan, with his comments appearing in major media outlets such as The New York Times, Associated Press, The Wall Street Journal, The Washington Post and others.

CUNA's Credit Union Magazine also filed an open records request under the Freedom of Information Act to disclose bankers' attempts to affect the Treasury plan in ways intended to put credit unions out of business (News Now April 4).

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Thursday, April 17, 2008

Delta/Northwest merger an opportunity for CUs

ATLANTA, Ga., and APPLE VALLEY, Minn. (4/17/08)--It's too early to tell what effects--if any--the proposed merger of Delta Air Lines and Northwest Airlines will have on members of the credit unions that serve those airlines' employees.

Delta Air Lines and Northwest Airlines Monday announced their intent to merge in a $3.1 billion deal that would create the world's biggest airline. Two credit unions serve the airlines' employees: Delta Community CU, based in Atlanta, and Wings Financial CU, based in Apple Valley, Minn.

The merger--far from a done deal--is not a situation that will filter into the credit unions and their members anytime soon, according to the two credit unions. Nothing will change for their members soon. However, down the line, the merger could be an opportunity to provide services to their existing and new members.

Even though the future's not clear, "We stand ready to meet the financial needs of Delta's employees now and in the future regardless of the outcome of the current proposed merger with Northwest Airlines," Mary Olson, vice president of marketing at Delta Community CU, told News Now. "This merger creates a tremendous opportunity for Wings Financial," CEO Paul Parish wrote in a message to its members. "We'll be exposed to thousands of potential new members, each with the opportunity to bring their financial services needs to Wings Financial."

Wings earlier had diversified its membership beyond serving Northwest Airlines by adding family membership and expanding its charter to include the entire air transportation industry. In 2006, it opened an office in Atlanta, which "is well-located to serve the employees of the new combined carrier," Parish said.

However, "we have no intention of changing any of our office operations at the present time. While that might change as the merger process progresses," the credit union will keep members informed of its plans as they develop, the notice said.

If the merger goes through and layoffs ensue, Delta Community CU already has in place a strategy for such situations.

"We have a program available to all of our members whose income and/or employment status has been adversely affected as a result of an involuntary furlough, job change, voluntary leave of absence, severance or early retirement program," according to Mary Olson. "These members may be eligible for deferral of loan payments through our Member Assistance Program. Once they qualify, all consumer loan (excluding Visa, and first and second mortgage loans) payments may be deferred for a specified period of time," she added.

Should the merger occur, the two credit unions likely would be competing for the same membership. Olson indicated that wouldn't be a problem. "People have choices. Many credit unions overlap (membership) with others, and many people can join more than one credit union." Regardless of the outcome, Delta Community CU will be there.

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Merger rates up overall, liquidation rates down in '07

MADISON, Wis. (4/17/08)--Merger rates of credit unions overall rose during 2007, while liquidation rates overall dropped, according to year-end statistics from the Credit Union National Association.

During the year, 15 credit unions were liquidated and 341 credit unions merged. The year also saw the formation of five new credit unions and the reactivation of a sixth credit union. Seventy-one credit unions started merger or liquidation processes during the year.

Although merger rates were higher overall, despite asset size, except among two asset groups: credit unions with assets of less than $0.5 million or greater than $100 million.

Liquidation rates rose or held steady among credit unions larger than $1 million in assets.

Merger rates increased for both federal and state-chartered credit unions last year, with 0.1% of federal chartered credit unions merging, and 0.21% of state-chartered credit unions did so.

Liquidation rates fell among state-chartered credit unions and stayed steady for federal charters.

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Wednesday, April 16, 2008

Summer job outlook for teens looks bleak

NEW YORK (4/16/08)--It's likely there won't be nearly as many "help wanted" signs, and that's bad news for teens looking for part-time work this summer ( March 24).

The recent economic downturn is the culprit. In a survey of 1,100 companies released in late March by, a job site for hourly positions, nearly half of hiring managers said they don't have plans to hire seasonal workers this year. And teens are in for a particularly tough time given the increasing number of older workers and immigrants applying for jobs in the retail and food services industries.

Good advice for teens who want to gain experience in a specific field: Don't wait until the last minute to send out applications.

For teens who are successful in landing a job, Lin Standke, manager of youth programs at the Credit Union National Association advises parents to take advantage of the teachable moment and instill valuable lessons that help establish a good money management foundation:
  • Learn the value of a dollar. Once a teen earns a paycheck, she's less likely to take money for granted. Those $100 sneakers take on new meaning when she realizes she has to work 17 hours--at minimum wage--to pay for it. Show her those "wants" come with a higher price tag.
  • Take on responsibility. Learning to handle a job--as well as a paycheck--leads to increased self-confidence.
  • Decide who pays for what. Discuss what the teen is expected to pay for out of earnings, and what you--the parent--will pay for. For example, if you pay for car insurance, you might require your teen to pay for gasoline.
  • Develop a work ethic. The earlier a child starts to gain experience and get to the job on time as scheduled, the more natural it becomes, instilling a good work ethic for life.
  • Live within one's means. Learning to spend less than you earn--as well as the value of saving a portion of each paycheck--are two of the best money-management lessons for any child or young adult.

Helping teens become financially literate is critical in any economic environment, but it's particularly important given last week's disappointing financial literacy survey results released by the Federal Reserve. High school seniors scored a failing grade in the survey, correctly answering only 48.3% of questions about personal finance and economics. These results show that the nation's teens need to beef up their money skills sooner, rather than later, so they can compete in today's tough economic climate.

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Sub-Zero layoffs may impact small CU

MADISON, Wis. (4/16/08)--Layoffs at a manufacturer of high-end refrigeration and cooking appliances could have an impact on a small Wisconsin credit union that serves some if its employees.

About 200 Madison area employees will be laid off from Sub/Zero Wolf of Fitchburg, Wis. Of those, about 125 belong to Members First CU, Madison, according to Nicholas Kessenich, president of the credit union.

"I do not know how much of an impact it will have on our credit union," Kessenich told News Now.

The $15.5 million asset Members First serves about 15 different employer groups, Kessenich said. It has about 2,680 members.

"We will work with each of the laid-off employees who are our members as much as we can to help them," Kessenich said. "There are different ways we can work with people on this."

Some of the ways the credit union can help members is to give them loan extensions and rewrite loans to give members a lower monthly payment, Kessenich said.

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Tuesday, April 15, 2008

CU chapter op-ed: One solution to economy is CUs

EL PASO, Texas (4/15/08)--There is only one solution to today's economy woes that doesn't involve a single dollar of tax money or rebates: credit unions. So says an opinion/editorial in the El Paso Times.

The op-ed item was written by Imelda Loya, president of the El Paso Chapter of Credit Unions (El Paso Times April 13).

In it she notes that access to credit is getting tough, especially for small businesses needing capital. She cites the story of Graciela Frescas, whose family operated an in-home daycare that was becoming increasingly popular.

When it wanted to build a full-fledged daycare center, the family sought credit and was turned away by more than a dozen banks. West Texas CU, however, came through with a loan.

Grammie's Daycare now employs 30 people, takes care of 130 children, and the family is about to open a second location.

The article discusses how loans for small businesses has dried up and that credit unions could help, if they weren't capped at 12.25% of assets. It urges Congress to remove the arbitrary business lending cap and let small business lending take off through credit unions.

"A stimulus package is one step to help get the nation on track. But to really get our economy off the starting line and back in the running, Congress must release power of not-for-profit credit unions," wrote Loya, adding, "Especially when other lenders are taking a pass on the race."

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NY Daily News: CU only one who'd lend to blind mechanic

BRONX, N.Y. (4/15/08)--On Monday, when the New York Daily News published a story about Bronx, N.Y.-based Bethex FCU giving a business loan to a blind mechanic when no other would, two people called Bethex wanting to join.

"That's how we found out (about the article)," said Bethex CEO Joy Cousminer.

Bethex gave a business loan to mechanic Fitz Octave about one year ago. Octave, who is legally blind, came to the U.S. from his native Caribbean with skills in auto repair. He wanted to open his own business, but the banks he visited turned him down.

Octave had a savings account with Bethex, so he went to the credit union for help. "He had a good business plan," said Bethex Loan Officer Maria Estrella.

Bethex gave Octave a $15,000 loan, and his business is doing well, Estrella said. Octave had a $15,000 state grant and $30,000 in savings also, but he needed more. The banks he visited--Bank of America, Washington Mutual, Chase and HSBC--had all turned him away (New York Daily News April 14).

Unlike a conventional bank, which gives out loans based on credit scores, Bethex looks at each situation individually. "We're old-fashioned," Estrella said.

She calls Octave once a month. "We always call him," she said. "We want to make sure he's doing okay."

Bethex lends to about 42 small businesses. The credit union also helps market the businesses by sending out a list of the businesses the credit union serves with each member's statement in the mail. "When people are looking for auto repair, they know where to go," Estrella said.

Aside from being the only credit union in the area that helps start-up businesses, according to Estrella, Bethex also provides free tax preparation for its members and remittances.

"We're the great one," Estrella said. "There's no other credit union like Bethex."

Bethex started as a credit union serving mothers on welfare and continued serving only those on welfare for about five years, Cousminer said. Now, members' incomes are varied, but all borrowers must abide by the same rules. "Some people feel that trust goes along with the amount of income," she said, but noted that it isn't always the case.

Bethex caters to the "poorest of the poor," but all of Bethex's employees are from the community, so they know what members need, Cousminer added.

"We do wonderfully," she said. "We're a good credit union."

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CUNA and Treasury meet on CU issues

WASHINGTON (4/15/08)—Credit Union National Association (CUNA) representatives met Monday with U.S. Treasury Assistant Secretary for Financial Institutions David Nason and other Treasury official to further discuss CUNA's opposition to certain provisions of the agency's regulatory reform ideas.

The CUNA team also discussed prompt corrective action reform proposals, the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537), which contains a PCA reform provision, and the Credit Union Regulatory Relief Act (CURRA, H.R. 5519) with Nason, his deputy assistant secretary, Jeremiah Norton and other Treasury representatives.

The CUNA contingent included President/CEO Dan Mica, Senior VP of Legislative Affairs John Magill, General Counsel Eric Richard, and Deputy General Counsel Mary Dunn.

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CU fin lit efforts spotlighted in CUNA statement

WASHINGTON (4/15/08)--The Credit Union National Association (CUNA) Tuesday will urge approval of a House resolution endorsing the goals of Financial Literacy Month, during a House hearing on the proposal.

"Credit unions have traditionally made financial education a part of their mission, providing financial information and training to members on a one-to-one basis," the CUNA statement points out. It also notes that many credit unions actively sponsor community- and school-based educational programs.

The statement, submitted for a House Financial Serivices Committee hearing record, says these programs include school-based courses and seminars that provide resources on such issues as how to maintain a checking account.

CUNA's statement highlights CUNA's Financial Literacy Summits, events that that bring together representatives from credit unions and partner organizations to discuss financial literacy challenges and set an educational agenda for the credit union movement.

In January 2007, CUNA notes, it released its National Financial Literacy Summit report which highlighted recommendations for the financial services system, including:
  • Committing to educating the undeserved;
  • Making a long-term commitment to financial education as part of the educational curricula in your community;
  • Supporting making personal financial education a high school graduation requirement; and
  • Measuring the effectiveness of these efforts.

CUNA also points out that the credit union system sponsors and participates in financial literacy programs such as:

  • National Credit Union Youth Week;
  • The National Endowment for Financial Education's (NEFE) High School Financial Planning Program, which has distributed materials to more than 1,200 schools and 500,000 students nationwide since 2000;
  • BizKid$ television series;
  • The "Thrive by Five" program, to teach preschoolers about spending and saving;
  • Desjardins Youth Financial Education Awards;
  • National Youth Involvement Board;
  • In-School credit union branches, which extends financial literacy to youth through in-school and youth center branches across the nation;
  • Personal Finance Camps: and
  • Credit union staff training programs.

The CUNA statement also says the congressional resolution to designate April as Financial Literacy Month will make an important contribution by bringing national attention to this issue.
"For credit unions, financial literacy is not just something we do in April – financial education is a service we provide our members each day of the year," CUNA concludes in its statement.

National Credit Union Administration Chairman JoAnn Johnson, along with other financial services regulators and private sector representatives, is slated to testify at today's hearing on financial literacy initiatives.

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Monday, April 14, 2008

Weakening labor market hits grads, says CUNA economist

MADISON, Wis. (4/14/08)--The weakening U.S. labor market may hurt the prospects of college students, especially those approaching graduation, a Credit Union National Association (CUNA) economist told a student newspaper, The Badger Herald Thursday.

About 80,000 jobs were lost in March nationwide, which comes on the heels of significant job losses in previous months, Steve Rick, CUNA senior economist, told the University of Wisconsin-Madison newspaper. The job market may not rebound as quickly as the economy, which should recover by late 2008 or early 2009, he added.

"Firms are historically slow to hire after a recession, preferring to increase the productivity of current workers," Rick told the paper. "So I expect the unemployment rate to keep rising through 2009."

However, prospects for student financial aid look better. Students should not have problems obtaining federally subsidized student loans, Mike Long, vice president of lending, University of Wisconsin CU, Madison, Wis., told the paper.

Although there might be slight reductions in financial aid, there should be sufficient money to lend because the federal government doesn't want to be an obstacle to students getting an education, Long said.

It actually might be a good time to be a student, because students don't have to worry about plummeting home values or pension funds, Long said. The current low interest rates are just what college students are looking for from financial institutions at this stage of their lives, he added.

It is important for college students to establish good credit with the current higher standards for obtaining loans, which students will need to purchase electronic gadgets, cars or homes after they graduate, Long concluded.

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CUs start decorating for Youth Week

MADISON, Wis. (4/14/08)--Credit unions around the nation are preparing for the Credit Union National Association's (CUNA) National Credit Union Youth Week April 20-26. Some have already undergone financial literacy activities to honor April as Financial Literacy Month.

NAFT FCU, Pharr, Texas, held a Mad City Money Seminar, purchased through CUNA, at a local high school this week as a part of Financial Literacy Month. About 200 students attended, and 25 of the credit union's 42 employees participated.

"It was an eye-opening experience for the students and a great opportunity for our credit union to promote financial literacy," Becky Palacios, NAFT marketing director told News Now.

TopLine FCU, Maple Grove, Minn., created Get Smart With Your Money, an initiative to encourage youth and their parents to talk about money. The credit union will offer seminars, saving challenges and giveaways at each of its seven branches.

"It's important for kids of all ages to understand how money works and how to make informed financial decisions at some level," said Mark Hodowanic, TopLine market manager. "Our seminars will cover spending and saving money, balancing needs and wants, using and managing credit effectively, budgeting, and paying yourself first.

"We'll help kids learn how to develop their own personal spending and savings plans by encouraging them to open a share savings account. And if they do it here, we'll even match their first $25 in savings," he added.

Other credit unions have begun decorating their branches to align with this year's Youth Week theme, "Got Green? Grow it at Your Credit Union."

Caswell CU, South Burlington, Vt., will allow youth to add a leaf to a large tree on the wall each time they make a deposit. The credit union also will give youth a pine tree sapling to plant in their yard.

Family Financial CU, Muskegon, Mich., will give away seed packets for each deposit, piggy banks for every new account, and hold coloring contests. The credit union also will have posters of flower stems and blank dollar bills that can be colored and put on the stem.

Baylands FCU, West Point, Va., decorated a teller window decorated to make children feel welcome. Youth aged 12 and younger making deposits of $15 or more will receive a prize of the day--which range from jump ropes to tree saplings. Teens making deposits of $50 or more will receive a green hackey sack.

Beaver Valley FCU, Beaver Falls, Pa., is distributing Youth Week reminder slips with each member receipt. On April 25, the credit union will help children plant marigold seedlings to take home. Juice boxes and snacks will be distributed. Each youth making a deposit during Youth Week will be entered into a drawing to win one of four $100 savings bonds.

Rogue FCU, Medford, Ore., is hosting five field trips for first-graders at local elementary schools. It also will host a movie night, deposit contests, and credit classes at local high schools, and will have downloadable "go green" coloring pages on its website.

South Carolina FCU, Charleston, S.C., will offer a cash prize to children who report the best green practices. Children can receive a $1,000 deposit to a education savings account or a $1,000 share certificate with a five-year term (Charleston Post and Courier April 10).

Thirty eighth grade students from Rogers Herr Year Round Middle School in Durham, N.C., are scheduled to tour Latino Community CU and Generations CU during Youth Week. Credit union staff will provide information about credit unions and will host a financial board game called "Cashflow for Kids" to teach them about money, said the North Carolina Credit Unions League's Weekly Update (April 9).

Credit unions can purchase marketing materials for Youth Week, such as posters, seeds, and statement stuffers, from CUNA. For more information, use the link.

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Credit card reform gets April 17 spotlight

WASHINGTON (4/14/08)—Rep. Carolyn Maloney has scheduled an April 17 hearing on her bill intended to reform abusive practices of the credit card industry and improve consumer protections.

The New York Democrat, who chairs the House Financial Services subcommittee on financial institutions and consumer credit, said in her announcement that the American consumer is feeling dual pressures concerning their credit card use.

As more consumers use their credit cards to "help pay bills, buy groceries, and make ends meet in a troubled economy," they find the relationship between cardholder and car company has become "very one-sided in recent years" to the disadvantage of consumers, she said.

Maloney introduced her package of credit card reforms, which is being billed as the Credit Cardholder's Bill of Rights (H.R. 5244), in February. It was introduced with 40 co-sponsors and is intended to curb abusive practices, such as some interest-rate increases and late fees and the subcommittee held its first hearing on it on March 13.

In part, the bill would require card issuers to provide a 45-day notice period for consumers before an interest rate could be executed. Cardholders would then have the right to cancel their card and pay off their existing balance at the existing rate and repayment schedule.

H.R. 5244 would also prohibit a practice known as "double-cycle billing," in which card companies charge interest on payments made on time during a grace period. It would also ban arbitrary changes in the credit card contract.

A witness list has not yet been made public, but Maloney said the subcommittee will hear from consumers, regulators, and credit card industry representatives.

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CUNA urges Bush to continue CU support

WASHINGTON (4/14/08)—Credit Union National Association (CUNA) President/CEO Dan Mica went straight to the top and sent a letter to President George W. Bush about a credit union concern involving the U.S. Treasury Department's plan to restructure the regulation of the financial sector.

Mica noted that in its restructuring "blueprint," Treasury seeks a presidential order to expand a Presidential Working Group (PWG) on financial markets policy to include all federal banking regulators, while excluding the National Credit Union Administration (NCUA).

"While we feel it is important that all financial institutions, including credit unions, be represented on the PWG, it is particularly significant now as the Administration and other key policymakers seek ways to deal with the current economic concerns," Mica said.

He reiterated that CUNA and credit unions were "stunned and dismayed by the long-term recommendation of the report which would effectively eliminate credit unions and NCUA."

Mica added that CUNA is concerned that excluding NCUA from the PWG now is a prelude to the pursuit of those recommendations, yet has been heartened by the statements of congressional support following the release of the report.

"Throughout both your administrations, credit unions have been very grateful for your support of their tax exempt status, and we urge you to continue recognizing their role, as well as that of NCUA, in helping to offer financial alternatives. We urge you to include NCUA on the PWG," Mica concluded.

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Friday, April 11, 2008

NCUA 'low-income' definition on agenda

ALEXANDRIA, Va. (4/11/08)—The National Credit Union Administration (NCUA) Thursday posted its agenda for its April 17 open board meeting, which includes a notice of proposed rulemaking on "The Low-Income Definition."

Low-Income Definition is one of the four categories into which the 12 recommendations of the NCUA Outreach Task Force were sorted. The task force was created in November 2006 to review recommendations from the Member Service Assessment Pilot Program (MSAP) on credit unions' mission.

The NCUA task force recommendation seeks to make the NCUA's definition of the term more in line with that of the other federal financial institution regulators.

No other task force recommendations are slated for NCUA board consideration at this time.
Other items on the agenda include a proposed rule addressing Part 740 of NCUA's Rules and Regulations, which governs the official sign that all federally insured credit unions must display where deposits are received.

Those signs appear such places as teller windows, Internet Web pages if online banking is officered, and they carry the official advertising statement: "This credit union is federally insured by the National Credit Union Administration" or "Federally insured by NCUA."

Also scheduled for consideration is the agency's Quarterly Insurance Fund Report, which is expected to reflect the costs to the National Credit Union Share Insurance Fund of the agency's dealings with current conservator ships.

The final items:
  • Proposed Rule: Part 792 of NCUA's Rules and Regulations, Revisions for the Freedom of Information Act and Privacy Act Regulations; and
  • Proposed Rule: Parts 712 and 741 of NCUA's Rules and Regulations, Credit Union Service Organizations.

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Tax measure could add HSA burden for CUs

WASHINGTON (4/11/08)—The House Ways and Means Committee passed the Taxpayer Assistance and Simplification Act of 2008 this week, a measure could threaten credit union participation in Health Savings Accounts (HSAs), according to the Credit Union National Association (CUNA).

Although the bulk of the measure is not cause for concern for credit unions, John Hildreth, CUNA senior legislative representative, said Thursday that it contains a provision that "would be very detrimental to HSAs and would drive many credit unions out of this market."

This legislation would require the account provider to take on the role of verifying that each distribution is used for a qualified medical expense.

This, of course, would drive most credit unions and banks out of the HSA business and move it to plan administrators who are accustomed to substantiation from the services that they provide, like Flexible Spending Accounts (FSAs) and Health Reimbursement Accounts (HRAs).

He said the increased compliance burden would be detrimental to consumers because it would likely restrict the general availability of HSAs.

Also, Hildreth noted that if credit unions must track the validity of their members' HSA expenses, they are place in the awkward position of disputing with their members as to whether expenses may or may not be qualified.

The bill (H.R. 5719) passed the committee 24 to 17.

CUNA launched a significant lobbying effort against the HSA substantiation provisions prior to the committee's vote and won a two-year delay in the implementation of the provision.

Rep. Paul Ryan (R-Wisc.) offered an amendment to strike the substantiation clause from the tax bill, but lost that effort in a 25 to 15 vote. He had urged his colleagues not to let anecdotal evidence of abuses sway them to include the burdensome provision.

CUNA will continue its efforts to oppose the HSA provision as the bill makes its way to the House floor for a vote. There currently is no similar bill introduced in the Senate.

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Thursday, April 10, 2008

Study: Financial literacy down for high school seniors

WASHINGTON (4/10/08)--High school seniors' knowledge of finance has dropped the past two years, says a new study. That doesn't mean, however, that credit unions' financial education efforts are for naught.

High school seniors, on average, answered correctly less than half (48.3%) of questions about personal finance and economics in a nationwide survey released Wednesday by the Federal Reserve. The survey is conducted every two years by the Jump$tart Coalition for Personal Financial Literacy, an organization that promotes financial competence for students.

The score compares with 52.4% answered correctly in the 2006 study. This year's was the worst score out of the past six surveys conducted so far.

While the results are disappointing, they are "not entirely a surprise because financial education is required coursework in only a handful of states," said Jim Hanson, vice president of personal finance with the Credit Union National Association (CUNA).

Credit union financial education efforts make a difference, "but it is difficult to measure the successes we've had," Hanson said. "Credit unions in all areas of the country can point to their efforts in schools and through organizations like the NEFE (National Endowment for Financial Education) High School Financial Planning Program, knowing they reached a half million young people. But success is hard to measure."

CUNA has online programs like Guides to Independence that many teachers use in schools, and these help. "But the unfortunate truth is most young people get most of their financial education at home--and their parents don't know enough about money management," Hanson told News Now.

"We know from pilot studies conducted for CUNA's Googolplex products that financial education works, but the effort has to be consistent, sustainable, relevant, and experiential. People learn by doing. They also learn when the subject matter is relevant to them--most high school kids aren't thinking about investments," Hanson said.

Two years ago, CUNA held its first Financial Literacy Summit. "The No. 1 issue mentioned by nearly every speaker and credit union participant was measuring success," Hanson said. "There are a ton of financial education programs, but the problem is measurement. And every two years we get reminded how much work needs to be done."

Hanson noted the recent trend of consumers overspending their budgets. "That means parents aren't managing their money very well. Is it really a wonder that their children don't know enough about finances? They model what they see," he said. "Clearly we need to start at an early age to have a lasting impact."

It's also a question of resources in schools and credit unions. "Royal CU in Eau Claire, Wis., just opened its ninth elementary school branch office last week," Hanson said. "Its chairman, John Sackett, told me he could open more branches tomorrow, but the credit union just doesn't have the resources. That story could be repeated at every credit union committed to financial education and community service."

College students--surveyed for the first time in the Jump$tart Coalition study--did better than their high school counterparts in the study. College seniors did better than college freshmen, suggesting that experience may be a factor.

The first time many people manage a budget is when they leave home, often for college. "That's where student-run college credit union programs can be helpful. And online tools like MoneyMix--programs that have young people talking to young people about shared experiences--can be very beneficial," Hanson told News Now.

Are there too many financial ed programs? The confusion isn't that there are too many programs, but "the problem is that many are not relevant to the target market or they aren't used," said Hanson. "What good does it do a credit union to have a youth club that doesn't make financial education part of the program? It may generate deposits from parents and grandparents, but if it doesn't include relevant education, what good is it?"

"We make young people practice and take written tests and road tests before they can drive," Hanson noted. "But for many the first time they get their credit card is after they leave home, and they have no idea how to use it responsibly."

What should credit unions who want to help do? "Get involved," Hanson advised. "Stop worrying about the return on investment of helping young people because waiting to determine when it will pay off financially is not the right reason to do this.

"Credit unions are about helping people help themselves. That's what financial education does, and every little bit you can do will help--even if it's only one child."

Other findings in the survey:

  • Only 16.8% answered correctly that stocks likely would offer the higher growth over 18 years of saving for a child's education. And 37.3% thought a U.S. savings bond, noted for its conservative investments, would offer the highest growth.
  • Nearly 53% said they would have no liability if a thief stole their their credit card and ran up $1,000 in debt on the card. Liability is limited to $50 after the credit-card issuer is notified. Only 13% knew they might have to be responsible for $50.

For a complete report and resources to serve youth, use the resource links.

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New bill takes tax approach to foreclosure assistance

WASHINGTON (4/10/08)—The leader of the House tax-writing panel has introduced another in the growing line of foreclosure assistance measures. The legislation drafted by House Ways and Means Chairman Charles Rangel (D-N.Y.) would provide tax credit for first-time homebuyers and work to improve access to low-income housing.

Rangel's committee voted 35 to 5 in favor of the bill Wednesday, and the chairman said he expects The Housing Assistance Tax Act of 2008 to reach the House floor for consideration in the coming weeks.

"We need to provide relief to the buyers and families themselves, not just the banks and builders," said Rangel of his bill, which he said, "puts families first - offering a refundable tax credit to first-time homebuyers, essentially a zero-interest loan to help defray the cost of purchasing a house."

The bill will also expand a low-income housing tax credit, a move intended to put builders to work and to create affordable alternatives for families seeking new housing.
The main provisions of the Rangel bill include:
  • The first-time homebuyer tax credit to assist in making a down payment on a home, which would provide individuals and families with a refundable of 10% of the purchase price of their home, up to $7,500. Taxpayers would be required to repay any amount received under this provision to the government over 15 years in equal installments, making it in essence an interest-free loan. The credit would be phased out for taxpayers with adjusted gross income in excess of $70,000, or $110,000 in the case of a joint return;
  • An additional standard deduction for real property taxes to help homeowners who claim the standard deduction by allowing them to claim an additional standard deduction of up to $350 ($700 for joint filers) for State and local real property taxes. This provision applies for 2008;
  • A temporary increase in low-income housing tax credit and simplification of the credit. The bill would increase a current limit of the credit from $2.00 for each person residing in a state by an additional 20 cents per resident. The credit would also be simplified to improve its effectiveness; and
  • A temporary increase in mortgage revenue bonds to allow for the issuance of an additional $10 billion of tax-exempt bonds to refinance subprime loans, provide loans to first-time homebuyers and to finance the construction of low-income rental housing.

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CUs warned of cell phone scam

ALEXANDRIA, Va. (4/10/08)—A new fraud alert from the National Credit Union Administration (NCUA) warns of a scam that involves unsolicited text messages sent to cell phones.

The message urges the recipient to call a number provided for information about account discrepancies and then seeks individual account information and pin numbers.

"Cell phone users should be (wary) of unsolicited text messages. Such messages should be deleted and all deleted text messages should be removed, if possible, as the perpetrators have been known to use Spyware in conjunction with their text message solicitation," the alert warns.

In February, News Now reported that a cell phone text-message scam was targeted against Keesler FCU, of Biloxi, Mo.

Text messages and faxes were broadcast to members and nonmembers in an attempt to get credit, debit or ATM card information. The messages appeared to come from the $1.5 billion credit union and requested that the recipient respond to the communication with the card number, personal identification number or other personal information.

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Mica: Treasury plan lacks understanding of CU role

WASHINGTON (4/10/08)—The U.S. Treasury Department's recently unveiled "Blueprint for a Modernized Financial Regulatory Structure" disregards the Bush administration's longstanding support for credit unions and shows a "complete misunderstanding and misrepresentation of our mission, purpose and function," wrote Credit Union National Association (CUNA) President/CEO Dan Mica in a April 10 letter.

In his letter to Treasury Secretary Henry Paulson, Mica said, "When I asked you during last week's press conference if there was something credit unions had done to be treated in this manner – essentially put on track to be put out of business – your response was, 'that is not our intent and that would not be the effect.'

"However, our review of the actual recommendations clearly reveals that the report does not support that comment."

Mica then outlined the ways in which the "blueprint" represents a change in posture toward credit unions by Treasury from positive to negative.

Mica cited:
  • A significant percentage of the nation's larger credit unions would no longer be tax exempt and have little incentive to operate as cooperatives owned by their members;
  • Under the "Blueprint," a mere 6% of the assets under supervision of the proposed Prudential Financial Regulator would be in not-for-profit, cooperative federally insured depository institutions (FIDIs), i.e., former credit unions. The types of regulation and supervision that a for-profit institution requires are very different from those that best apply to not-for-profit cooperatives;
  • Nothing in the report calls for the single regulator to have employees who specialize in regulating institutions other than banks;
  • Given the distribution of assets under supervision, almost all banks, it appears unlikely that the Prudential Financial Regulator would not expect all institutions to act like for-profit banks, and design its regulations and supervision to deal with for-profit institutions; and
  • A number of descriptions in the report regarding credit unions are very similar to the mischaracterizations that the banking industry routinely uses. Some of the most biased statements in the report are found on page 160, reflecting banker rhetoric that credit unions must only serve those of modest means and must remain small institutions.

"Given the Treasury's lack of understanding about credit unions, it is no surprise that the 'Blueprint' would set in motion a plan that will result in their demise," Mica wrote.

"In the process, consumers would not be protected and an important alternative to for-profit banks would be eliminated from the financial marketplace in the name of efficiency."

Use the resource link below for the full text of the CUNA letter to Treasury.

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Wednesday, April 9, 2008

News of the Competition

MADISON, Wis. (4/9/08)
  • Federal Home Loan Bank (FHLB) of Chicago announced the termination of its merger discussions Monday with the FHLB of Dallas, after they were unable to reach an agreement. The Chicago bank also announced the resignation of Mike Thomas, president/CEO, to be effective Friday. The failure to reach agreement came after extensive analysis and due diligence regarding the feasibility of combining the banks' business operations. The FHLB of Chicago will now focus on operating as an independent entity and continuing to transition to a more traditional home loan bank business model and financial structure, said P. David Kuhl, chairman of its board of directors. The board has formed a search committee to recruit a new president/CEO within the next month and a half (PRNewswire April 7) ...
  • Discover Financial Services signed an agreement Monday to purchase Citigroup's Diners Club International for $165 million with a goal of increasing transaction volume and worldwide acceptance of its own cards, analysts said. As part of the deal, Discover will acquire the Diner's Club International Network, including its brand, trademark, and employees, and over 40 license agreements with Diners Club card issuers. However, the deal will not include Diner's club licensees in North America and worldwide. When the transaction closes in an expected 90 days, Citigroup will remain a long-term issuer on the network. Discover will not issue cards or offer consumer credit in international markets, the company said. ( April 7) ...
  • Cease-and-desist orders have been issued for Peoples Community Bancorp by the Office of Thrift Supervision (OTS). The orders place the West Chester, Ohio-based bank under strict oversight and keep a tight reign on its ability to make loans and issue lines of credit. Difficulties with real estate loans and a failed merger in February with Integra Bank Corp. of Evansville, Ind., created problems for Peoples. The bank said in a news release that the orders require it to: file updated business plans and compare projected and actual operating results quarterly; receive OTS permission before declaring dividends or payments on outstanding securities, adding or replacing a director, hiring a CEO or making any "golden parachute" payments; not make new loans or lines of credit for land acquisition or development, speculative residential construction, commercial or multi-family construction, or acquisition of commercial property; and hire an independent consultant to review its loan portfolio and establish a plan for reducing bad loans (Business Courier of Cincinnati April 4) ...
  • In efforts to serve smaller middle-market businesses, Bank of America Corp. will expand its asset-based lending capabilities. The move is a result of BofA's acquisition of LaSalle Business Credit--a former LaSalle Bank business unit. Bank of America Business Capital will focus on asset-based financing from $5 million to $25 million by forming a national division to serve that market segment. BofA Capital provides companies with cash management, interest rate and foreign exchange rate risk management, senior secured loans, and capital markets products (Baltimore Business Journal April 8) ...
  • Washington Mutual revealed Tuesday that it had it had raised $7 billion in capital. The money was raised through an investment consortium led by TPG, a private equity firm. WaMu, the largest U.S. savings and loan, also said it would cut its quarterly dividend. The company said it intends to stop buying mortgages from brokers and plans to close all of it freestanding loan offices. WaMu also revealed Tuesday that it would lose $1.1 billion in the first quarter and take a $3.5 billion provision for loan losses. The company needs to raise capital because its stock has dropped with home prices, and it is struggling with increased mortgage delinquencies and defaults among homeowners, analysts said (The New York Times April 8) ...

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Kids learn early how to be online buyers

NEW YORK (4/9/08)—Even when they're not actually making a purchase, children are learning how to buy online simply by downloading digital files ( March 3).

The navigational skills required to download video clips, music, games, or ring tones are similar to those needed to make a purchase, giving youth an "online purchasing preschool."

Children--ranging in age from two to 14--who were surveyed about downloadable content reported that video clips were at the top of the list with an average of seven downloads per month. Music videos were a close second with 5.7 and music at 4.2.

These activities typically require the user to register, search and compare, and navigate between screens--all skills needed to make a purchase. Even surfing the Web for a school project or for fun gives kids experience in researching and using sites quickly and effectively.

Why should parents care? Because the next generation of online buyers will be ready and able to shop online with a credit card just as soon as they can get one of their own--or talk you into letting them use yours.

There are pros and cons to shopping online, and teaching kids what to watch for can save you time, money, and frustration. These tips from Credit Union National Association's Center for Personal Finance can help ensure that your kids are good money managers:
  • Shop secure sites. Look for a URL that starts with "https" and make sure the site has a closed-lock icon at the bottom at the page.
  • Supervise your child's use of your card. Remind the child that the card numbers are private and not to be shared. Explain that credit card thieves may use the number to purchase items on your account.
  • Find and read the privacy policy with your child. Together, learn what information the seller is gathering and how it will be used. Explain why you may not want to get on some mailing lists.
  • Review the return, refund, and shipping policies. This is a good opportunity to discuss the risks of buying the product with your child. Is the item worth the shipping cost? Can you return it if it doesn't fit or you don't like the color? Will you get your money back, or get credit that you won't use? Make sure you--and your child--understand all the seller's policies before buying online.

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Phisher uses CUNA, Wal-Mart 'breach' as bait

MADISON, Wis. (4/9/08)--The Credit Union National Association (CUNA) and Wal-Mart Stores have shut down a new e-mail phish attempt purportedly from CUNA and advising of a Wal-Mart data breach.

"This scam is notable for several reasons," said Kevin Knope, director of Web services at CUNA:
"It mentions a specific incident--a Wal-Mart breach--rather than the generic 'your account has been compromised.'"

It does not state that the account has been locked. Instead it offers a benefit of "enhanced card security." "In more generic terms, it doesn't make a claim of urgency," said Knope.
It provides a link to a legitimate third-party sight, in this case an antiphishing site,

The message says CUNA is aware of a recent breach at Wal-Mart and its "Customer Security Team" is taking proactive steps such as gathering information and re-issuing compromised cards if necessary.

It encourages recipients to review their account and report suspicious activity, and it recommends they activate an "enhanced card security," at a phone number provided.

It also warns recipients to be alert to scams and not provide any personal or account information to anyone e-mailing or calling who claim to be from Visa and MasterCard. It offers more information about fraud through a link to the legitimate site.
CUNA took immediate action to stop the phish.

"CUNA and Wal-Mart have been working on the problem in parallel, and the number is offline as of this morning," Knope told News Now Tuesday.

To review the entire phish message, use the first resource link.

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CU shooting suspect charged in I-64 shootings

WAYNESBORO, Va. (4/9/08)--A 19-year-old Virginia man charged with allegedly firing gunshots into a closed credit union also has been charged in shootings that injured two people on Interstate 64 between Waynesboro and Charlottesville, Va.

Slade Allen Woodson, 19, of Alton, Va., now is facing 17 felony counts, 15 in Abermarle and two in Waynesboro ( April 8).

DuPont Community CU (DCCU), Waynesboro, reported that during the night of March 27, while the office was closed, shots were fired at the building and a repossessed car on the premises (News Now March 31). No credit union employees or members were involved or affected.

A surveillance tape of the credit union's parking lot helped pinpoint a suspect vehicle, an AMC Gremlin. Woodson owns an orange 1974 Gremlin.

A 16-year-old male also faces 10 felony counts related to the I-64 shootings. He has not been charged in the credit union shooting.

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Mortgage bill moves in Senate

WASHINGTON (4/9/08)—The Senate voted 92 to 6 Tuesday to proceed to a vote on final passage on a bill that would provide $4 billion to cities for the purchase and rehabilitation of foreclosed properties.

The bill, known as The Foreclosure Prevention Act of 2008, would provide another approximately $13 billion in targeted tax breaks to spur additional home buying and ease the troubles of the housing industry.

It also would authorize $200 million for housing counselors to help families about to lose their homes to foreclosure.

The Credit Union National Association supports a higher allocation for housing counseling and will be working to encourage the House to increase that level before the bill gets final approval by both houses of Congress.

Although the package contains a limited FHA reform provision, Senate Banking Committee Chairman Christopher Dodd (D-Conn.) has stated he wants more, such as adding loan guarantees of up to $400 billion.

Dodd has scheduled a hearing on Thursday on foreclosure mitigation and liquidity in the mortgage markets.

Also this week, the House Financial Services Committee on Wednesday and Thursday will hold hearings to address "Using FHA (Federal Housing Administration) for Housing Stabilization and Homeownership Retention."

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Lawmakers send assurances to CUs

WASHINGTON (4/9/08)—The chairman of the House Financial Services Committee and a high-ranking Republican member of that panel have each sent credit unions their assurances that Congress values the unique role of financial services cooperatives.

Chairman Barney Frank (D-Mass.), in a letter to the Credit Union National Association (CUNA), wrote that the U.S. Congress appreciates the role credit unions play in the country's financial services system.

Frank acknowledged CUNA's concerns regarding the devastating affect the U.S. Treasury Department's proposal for financial institution regulatory restructuring could have on credit unions. He said that any proposal to do away with credit unions is a proposal that will go nowhere.

The chairman first stated his reassurance to credit unions at last week's hearing on the Internet Gambling law, at which CUNA witness Harriet May testified. May is CEO of GECU, El Paso, Texas.

Frank said to May, "Please tell my good friend and former colleague Mr. Mica not to worry about the Treasury proposal to eliminate credit unions. We would never do that. So please tell him not to worry about that."

In his April 3 letter, Frank expanded his thoughts: "(G)iven the appreciation Member of Congress have of the role that credit unions play, there is no chance of anything that would diminish that role going through.

"Indeed, as you know, we have worked closely with you on legislation that will to some extent expand the ability of credit unions to serve consumers."

He said that, while Congress may not stand ready to give credit unions all they seek, "I can assure you that it is expansion and not contraction that will be on our agenda for credit unions in the future."

On April 7, Rep. Ron Paul of Texas, who is the ranking member on the House Financial Services subcommittee on domestic and international monetary policy, trade, and technology, wrote similar assurances to the Texas CU League.

Paul wrote that he opposes a provision in the Treasury's plan which would eliminate the credit union charter and the independent federal credit union regulator.

"Eliminating separate charters for credit unions, banks, and thrifts could deny the benefits of credit union membership to million of Americans," Paul wrote.

He added that he would "do all I can to make sure this provision, or any other regulatory change detrimental to the interests of credit unions" is not contained in any regulatory legislation considered by the 110th Congress.

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FinCEN reports 44% jump in mortgage fraud reporting

WASHINGTON (4/8/08)—The Financial Crimes Enforcement Network (FinCEN) reported a 44% increase in suspected mortgage fraud activity during the 12-month period framed in its latest review of such information.

The most recent report garnered its information from Suspicious Activity Reports (SARs), filed under requirements of the Banker Secrecy Act (BSA), between March 2006 and March 2007. It updates a November 2006 FinCEN report that reflected information filed between April 1, 1996 and March 31, 2006.

In an executive summary of its findings, FinCEN noted that in 2006, financial institutions filed 37.313 SARS citing suspected mortgage loans fraud. That 44% increase compared to 7% increase in overall SAR filings.

"One reason for this increase may be that lenders are increasingly identifying suspected fraud prior to loan approval and reporting this activity. Suspected fraud was detected prior to loan disbursements in 31% of the mortgage loan fraud SARs filed between April 1, 2006 and March 31, 2007, compared to 21% during the preceding ten years," FinCEN reported.

That agency's figures indicated that total SAR filings in 2006 on suspected mortgage loan fraud, when divided by the subject's state address, showed the greatest increases in Illinois (75.80%), California (71.29%), Florida (53.04%), Michigan (51.50%), and Arizona (48.73%).

FinCEN said the suspicious activity characterization Mortgage Loan Fraud was the third most prevalent type of suspicious activity reported, after Bank Secrecy Act/Structuring/Money Laundering and Check Fraud.

Reports of suspected identity fraud and identity theft4 associated with mortgage loan fraud continued to increase for the period reviewed. Reports of suspected identity theft in conjunction with mortgage loan fraud increased a whopping 95.62% over the previous study.

"Cases of suspected identity fraud were predominantly associated with fraud for housing. Victims of identity theft have had their properties encumbered with loans or property titles fraudulently transferred, effectively having their homes stolen," according to FinCen.

Filers specified that loans were subprime in 79 SARs (0.19%) for the reviewed period. Without this specification, it is not possible to determine whether mortgages described in the remaining SARs were subprime loans, the report noted.

"FinCEN's analysis indicates that the financial community is becoming increasingly adept at spotting and reporting suspicious activities that may indicate mortgage fraud," said FinCEN Director James H. Freis, Jr. "This exemplifies how compliance with Bank Secrecy Act regulations is consistent with a financial institution's commercial concerns."

Use the resource link below for more report details.

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CUs help keep Cherry Blossom runners dry

WASHINGTON (4/8/08)—Credit union volunteers, hoping to drive home the message of the credit union difference—people helping people—hit the National Mall by 6 a.m. Sunday to stow the gear of rain-weary runners in the CU Cherry Blossom 10-Mile Run.

April showers seemed unable to dampen the enthusiasm of the 12,000 runners at the event, a number which included at least 600 participants representing Capitol Hill.

"The most important thing I think we get out of this annual exercise is showing the people running the race the credit union difference in action," said Pat Keefe, Credit Union National Association (CUNA) vice president of communications and media outreach, who coordinates the volunteer effort for CUNA.

"This is the fifth year or so that we have volunteered to help keep runners' valuables safe – and dry, on this year's cool and rainy day –during the race," said Keefe. "Our intent is to help runners – many of whom are from Capitol Hill – make a connection between credit unions and 'people helping people.'"

Among Keefe's crew of volunteers were CUNA staff and their family members, and helpers from the National Credit Union Foundation, the American Association of Credit Union Leagues, and the Association of Corporate Credit Unions.

Keefe noted that they wore jackets featuring "The Little Guy" and the "" website. The intent, Keefe pointed out, was to remind runners (particularly Hill staff) that credit unions really do "look out for the little guy."

Credit Union Miracle Day, Inc. (CUMD), sponsor of the 36th annual Credit Union Cherry Blossom 10-Mile Run, exceeded its 2008 goal of raising $1 million to benefit Children's Miracle Network and its 170 affiliated children's hospitals nationwide. With this year's donation, CUMC will have contributed a total of $3.6 million to children's hospitals since its inception in 2001.

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CUNA to CNN: Credit slowdown is typical for recession

NEW YORK and WASHINGTON (4/8/08)--The nation's consumers pulled back on borrowing in February but remained dependent on credit cards to weather a tough economy. That behavior is typical in a recession, Bill Hampel, chief economist at the Credit Union National Association, told CNNMoney (April 7).

Consumer credit increased by $5.2 billion--or a 2.4% annual rate--to $2.539 trillion during February, said the Federal Reserve Monday. Borrowing was roughly half of January's revised $10.3 billion increase ( April 7).

But revolving credit, which includes credit cards, rose $4.7 billion--at nearly a 6% annualized rate--to $951.7 billion after a gain in January of 7.1%.

"This is standard consumer behavior in the face of a recession," Hampel told CNNMoney. "When consumers are worried about losing their jobs, they borrow less."

The situation will continue. "The pattern of February will be continued," he said. "What growth there will be, will be in credit card debt."

Also affecting consumer credit is the price of gasoline. "With really high gas prices, people are charging their gas more than they usually do," Hampel said.

Non-revolving credit decelerated further in February with a 0.4% growth at an annual rate, compared with 3.6% in January, said the Fed report. February's growth is the slowest since December and was driven by weak vehicle sales, said

February's year-over-year growth in total credit usage was 5.76%--down from 5.82% in January but still within a narrow range that has prevailed since 2003.

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Parent-teen power struggle over money in school branch

SACRAMENTO (4/8/08)--SAFE CU, Sacramento, has never received any complaints about its in-school credit union branches. In fact, its program is lauded by the city and state.

But the mother of one young SAFE CU member isn't happy--because the credit union opened an account for her that her mother doesn't have access to.

The mother contacted local media with a list of questions regarding her concerns about the credit union's school program.

"It's very unusual," Paul Hersek, SAFE CU vice president of marketing, told News Now. "It's not the norm. We've never had something like this happen."

The young woman, a minor, opened an account at a SAFE in-school branch to save money she earned at an after-school job. The member is "really responsible," and declined an ATM card so she wouldn't overspend, Hersek added.

The member has a joint account with her mother, but wanted her own savings account. "The daughter wants to be independent," Hersek said.

SAFE CU contacted the mother about her concerns, but she had bypassed the credit union and spoken to the media, Hersek said.

Credit unions can open accounts for minors, according to the California Department of Financial Institutions. The code reads: "A credit union may issue shares or certificates for funds to a minor of any age or maintain any other account authorized for credit union members for a minor, and receive payments thereon by or for the minor.

"The minor is entitled to withdraw, transfer, or pledge any shares or certificates or other moneys owned by him or her and to receive from the credit union all dividends, interest, or other money due thereon in the same manner and subject to the same conditions as an adult."
"We're not doing anything wrong," Hersek said, adding the state, governor and Sacramento region have applauded SAFE's program. "I don't see us changing anything."

SAFE started its in-school branch program in 2003. "We've had great results," Hersek said. Students who have a B average or above can work in the branches and also can compete for internships at the credit union's corporate office. They learn marketing and accounting, and the credit union provides money to the school district for financial literacy programs.

The credit union doesn't aim to make a profit off of its school programs--rather, it seeks to improve its exposure among teachers, parents and students.

Six student employees also have taken jobs at the credit union after graduation. "It's a really rewarding program," Hersek said.

Though the mother's complaint was a first for SAFE CU, credit unions should listen to parents' concerns in these situations, Hersek advised.

He also advised credit unions to look at the products and services offered to youth and ensure they are applicable. SAFE has customized some products and services to suit youth. For instance, students can open accounts labeled by what they are saving for, such as prom or a yearbook, and deposit money in each.

SAFE also waives maintenance fees until members are 21 years old. "It's those types of things," he said. "Does the program make sense for those individuals?"

Financial institutions can offer financial direction for youth, he added. Though it's up to the parent to talk to children about financial education, a lot of children don't get financial training at home. The credit union takes advantage of "any opportunity" it can to reach out and help students, Hersek said.

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CEO of U.K.'s largest CU to resign after inquiry

YORKSHIRE, U.K. (4/8/08)--The CEO of the largest credit union in the United Kingdom is resigning after an inquiry into lending activities at the credit union was made public.

Sue Davenport, CEO of Leeds City CU (LCCU), will leave the position, effective next month. A statement issued by the credit union said she was pleased to have been part of the team who made Leeds one of the top credit unions in the country but wanted a quieter life (Yorkshire Post April 7).

The newspaper reported an internal panel had been set up to investigate the credit union's management concerning loans made to a family member and to the credit union's staff. The newspaper said the loans were made on favorable terms in violation of the credit union's bylaws.

A three-member panel of directors of the credit union was split on its findings but details of the majority and minority reports were unavailable.

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CUs' difference explained in Long Island paper

LONG ISLAND, N.Y. (4/08/08)--Credit unions compare well with other financial institutions, according to a Friday article in the Long Island Business News.

A credit union's main objective is to return value to its members, as opposed to for-profit companies that seek to primarily create value and income for shareholders, Kirk Kordelseski, CEO of Bethpage, (N.Y.) FCU, told the newspaper.

Credit unions also offer business loans and other financial services to businesses, the article said. Many of Bethpage FCU's business clients are members who started small businesses, such as plumbing or landscaping business, Kordeleski said.

Bethpage FCU's business loans are usually less than $100,000, he added.

Credit unions offer a variety of services to employees of all sizes of businesses, Kordeleski said. Employees who start out using credit unions for checking accounts and auto loans often expand their relationship with credit unions to include mortgages, home equity loans and retirement plans, he added.

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Equifax: Business fraud a growing problem

ATLANTA (4/08/08)--Nearly 20% of financial institutions are unaware of their financial losses from business fraud, said a recent Equifax study.

The results could be troublesome for some credit unions--who actively work to provide business lending services to their members.

The study also indicated that many organizations are still in the early stages of addressing fraud. Nearly 75% of businesses rely solely on credit reports to check for fraud, Equifax said.

To combat fraud, Equifax suggests that financial institutions:

Verify the existence of a business;

Target accounts that have been flagged with suspicious fraud attributes and require further investigation;

Confirm the relationship between the business and applicant; and

Decrease potential for applicants to be flagged as fraudulent because of mis-keyed information.

Equifax has created the Business Fraud Advisor solution to help financial institutions prevent fraud. The solution uses LexisNexis and database information to validate a business's identity and verify application data.

Application fraud accounts for 65% of commercial fraud and is the most costly in terms of business impact, Equifax said.

"While the prevalence of identity theft among consumers has been known for a long time, commercial fraud has only recently emerged as a major issue," said Michael Shannon, president of Equifax Commercial Information Solutions.

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Monday, April 7, 2008

Five ways to manage rising food costs

CHICAGO (4/7/08)--Last year, U.S. consumers experienced the highest food price increase since 1990, according to the U.S. Department of Agriculture. And there is every indication that prices will continue to increase this year, thanks to weather-related setbacks and changes in the global economy ( Mar. 25).

Despite more money being shelled out at the grocery store, farmers aren't profiting from the increases at the checkout ( April 1). The bleak outlook means it's even more important to find ways to save:

Write down the amount to spend. Include funds for groceries, dining at restaurants, and take-out. Then remember that budgeted amount when you're at the supermarket as well as making decisions about whether to order pizza delivery.

Plan a menu. Develop a plan each week before heading to the supermarket so you purchase only the items you need for your culinary creations instead of making last-minute decisions in the aisles.

Eat before you shop. Shopping on an empty stomach typically results in tossing more items in your cart. Eat before you go to resist shiny packages and impulse purchases.

Brown bag it. Eating out costs more on a per-meal basis. Consider that a sandwich, chips and beverage from a restaurant will cost you $6 and last for one meal. A loaf of bread, deli meat, and a two-liter bottle of soda from the supermarket will cost roughly the same and last for several meals.

Make a meal with that special someone. Try a new recipe in lieu of going out for an expensive date.

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Friday, April 4, 2008

CU volunteers blanket Cherry Blossom Run

WASHINGTON (4/4/08)—Credit Union National Association (CUNA) volunteers will be pulling together as a team this weekend to help approximately 12,000 runners stow and retrieve their valuables during the Credit Union Cherry Blossom 10-Mile Run on Sunday, April 6.

Credit Union Miracle Day, Inc. (CUMD), sponsor of the 36th annual Credit Union Cherry Blossom Ten Mile Run, has exceeded its 2008 goal of raising $1 million to benefit Children's Miracle Network and its 170 affiliated children's hospitals nationwide.

Of the 12,000 runners this weekend, hundreds are congressional staffers expected at the event, which is featured as part of the National Cherry Blossom Festival. Also, 4,800 credit union members are signed up to run.

CUNA will staff the "gear check" tent before, during and after the run. In addition, 50 credit unions are sending nearly 700 volunteers to help with the race.

Also providing volunteer services at the meet will be staff members from the National Credit Union Foundation, the American Association of Credit Union Leagues, and the Association of Corporate Credit Unions.

With this year's donation, CUMC will have contributed a total of $3.6 million to children's hospitals since its inception in 2001.

"We are very pleased with these results which clearly demonstrate our commitment to helping children who need it most to get quality medical treatment," said Juri Valdov, chairman of CUMD.

"It reconfirms the credit union philosophy of people helping people and the credit union cooperative spirit. Through our 130 partnering credit unions and business partners in 30 states, we were able to hit this mark," Valdov added. He is CEO of Northwest FCU, Herndon, Va.

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Wednesday, April 2, 2008

CU teller shot during robbery

CHARLOTTE, N.C. (4/2/08)--News outlets in North Carolina reported that a teller of a Charlotte, N.C., branch of Raleigh-based State Employees CU' was shot during a robbery yesterday.

The teller is in serious condition (Charlotte Observer April 1).

Police are searching for four suspects who fled the credit union after the robbery. Officers found an abandoned blue Honda Accord that witnesses said a suspect was driving after the shooting, the newspaper said.

Witnesses interviewed by WBTV said they saw the alleged robbers flee in the car, leaving a trail of money stained by a red dye pack.

The credit union's administrative office was closed when News Now called for information.

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Tuesday, April 1, 2008

National Financial Literacy Month begins today

MADISON, Wis. (4/1/08)--April Fool's Day may start out National Financial Literacy Month but financial literacy is no joke.

The national average financial literacy skills score for 12th graders in 305 high schools nationwide was 52.4%, with only 6.9% of students receiving a "C" grade or better, according to a 2006 survey by the national Jump$tart Coalition for Personal Financial Education.

These aren't the latest statistics. The results of the coalition's 2008 Survey of Personal Financial Literacy Among High School Students--conducted this past fall and winter--will be released at a press conference on April 9 as part of National Financial Literacy Month.

As governors and legislatures polish their proclamations and resolutions, credit unions and other organizations already are working on the front lines to improve financial literacy skills.

According to the Credit Union National Association's (CUNA) Financial Literacy Task Force, nearly 80% of credit unions with assets of $10 million or more offer financial education to adults or youth, while more than half provide financial education to both. Credit unions with $50 million or more in assets are more likely to offer financial literacy programs than they were in 2005.

Credit unions in several states are working for state laws requiring a financial literacy component in state schools. For example, the North Carolina General Assembly has required personal financial literacy be provided all public high school students beginning next fall for 10th graders' civics and economics curriculum.

In many states, credit unions are an integral part of the education programs in local schools, either providing materials for the curriculum through the National Endowment for Financial Education or training the teachers.

Elsewhere, credit unions are partnering with lawmakers to hone financial skills of students of all ages. The Michigan Credit Union League's Sixth Annual Financial Literacy Legislative Challenge partners Michigan lawmakers with credit unions and schools to co-present the curriculum (Michigan Monitor March 31).

Credit unions also will highlight financial literacy during National Credit Union Youth Week April 20-26. See "Youth Week just around the corner" in News Now's System News section.

Meanwhile, credit unions will see a number of proclamations to raise awareness. California Gov. Arnold Schwarzenegger proclaimed April as "Financial Aid and Literacy Month" last week. North Carolina Gov. Michael Easley proclaimed the month as "Financial Literacy for Youth Month."
Washington State Gov. Chris Gregoire also proclaimed the month "Financial Literacy Month."

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