Thursday, May 29, 2008

CU-backed candidate wins Idaho Senate primary

WASHINGTON (5/29/08)--With backing from credit unions, Idaho Lt. Gov. Jim Risch won Tuesday's Republican primary in his bid to fill the retiring Larry Craig's (R-Idaho) U.S. Senate seat.

Risch will face Democrat Larry LaRocco--a former American Bankers Association lobbyist--in the fall general election.

In a field of eight GOP candidates, Risch garnered more than 65% of the votes.
The Credit Union Legislative Action Council and the Idaho Credit Union League participated in Risch's campaign.

Visa adds fraud recovery protection for PIN transactions

SAN FRANCISCO (5/29/08)--Visa Inc. is expanding its fraud recovery process to include two ATM networks and PIN transactions, the company announced Tuesday.

The process will extend to Plus and Interlink ATM network transactions to help credit unions and banks recoup losses from counterfeit fraud. The extension will be effective on Nov. 1.

In 2006, Visa launched a streamlined recovery program called Account Data Compromise Recovery (ADCR) to improve efficiencies and reduce the costs of assigning liability and collecting reimbursement for counterfeit fraud losses and operating expenses incurred when magnetic stripe storage was compromised.

Under the enhanced ADCR process, compensation to Visa card issuers is automatically calculated and reimbursed based on the counterfeit fraud the credit union or bank reports to Visa.

Recently enhanced Plus and Interlink fraud reporting capabilities extends the ADCR process to PIN-based transactions. Currently the process applies only to Visa signature-authenticated transactions.

The enhancements will improve financial institutions' back-office efficiencies, which include automating the process, Visa said.

Acquirer liability for compromises associated with violations of the Payment Card Industry (PCI) Data Security Standard or PCI PIN security violations will be defined through the ADCR program. The program has a fixed 13-month window of exposure, which allows for improved liability forecasting, Visa said.

"Expanding this process to include Plus and Interlink represents a significant improvement over the current recovery process for financial institutions with PIN-based transactions, which may require multiple recovery scenarios for a single compromise event if the event involves Visa-branded or Plus- or Interlink-acquired transactions," said Michael E. Smith, head of Payment System Risk at Visa.

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Study: Bank fees, problems drive dissatisfaction

WESTLAKE VILLAGE, Calif. (5/29/08)--Customers' overall satisfaction with retail banks has declined, largely driven by banks' poor problem resolution, long wait times and additional fees, according to a study released Wednesday.

Overall satisfaction with the retail banking experience has decreased considerably since 2007--down 26 index points on a 1,000-point scale to 737 in 2008, said the J.D. Power and Associates 2008 Retail Banking Satisfaction Study.

The study did not include credit unions. However, the results show yet another opportunity for credit unions to tout their strengths and the credit union difference.

Dissatisfaction with fees is the most commonly reported problem by customers surveyed and the second most-cited reason for switching financial institutions, the study concluded.

Also, bank customers are experiencing an increase in the number of problems experienced and problems that go unresolved, an increase in wait times to see tellers or speak to phone representatives, and declines in the ease of accessing branches. These all contribute to the drop in satisfaction, said J.D. Power and Associates.

"Many retail banks are experiencing a decline in their brand image, especially in the current economic climate, where many consumers hold banks responsible for the current housing and mortgage crisis," said Rockwell Clancy, executive director of financial services at the research firm.

"With customers experiencing more problems, longer wait times and more fees, that negative view is intensified," said Clancy.

Those retail banks that do provide higher satisfaction levels have more highly committed customers, which are essential to financial growth, the study found. It noted that increasing the number of customers who are highly committed by 5% can lead to incremental deposit growth of 3% annually.

"As banks struggle to meet shareholder demands, the common reaction is to focus on short-term financial gains by increasing fees and reducing staff--leading to longer wait times and poor problem resolution," Clancy said.

Taking a page from what sounds like a manual in credit union philosophy, Clancy suggests banks try to "differentiate themselves from competitors by focusing on customer service and convenience."

This year, the study also analyzed consumer-generated online conversations about banking issues. Most conversations revolved around consumers' daily banking activities rather than national issues such as subprime lending. This indicates that overall ratings of banks are most often driven by personal experiences, said J.D. Power. Topics consumers discussed the most: increased fees and increased annual percentage rates.

The survey was conducted with 19,602 households on six factors: transactions, account statements, account initiation/product offerings, convenience, fees and problem resolution.

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Wednesday, May 28, 2008

School's out, save on summer trips

NEW YORK (5/28/08)--Gas and food prices are soaring, but that doesn't mean your family has to forego its summer vacation (MarketWatch May 14).

A few money-saving strategies will have you building sand castles or sleeping under the stars in no time:
  • Decrease food costs. It's fun to eat out, but buying food at restaurants or convenience stores really adds up. When lining up lodging, try to book a suite with appliances so you can cook your own meals. Stick to a plan such as eating only one meal out each day. Purchase snack items ahead of time and assemble treat bags before your trip.
  • Stay in the neighborhood. Instead of spending big bucks on skyrocketing flights, consider day trips that are close to home to save on gas and lodging. Among local museums, historical sites and parks, you'll get to take advantage of places you didn't even know existed but are practically in your backyard.
  • Find inexpensive lodging. If your travel requires overnight stays, use the Web to search for the best deals. Consider staying during the week when many hotel prices are cheaper than on weekend nights. Campgrounds, hostels, and college dorms also are inexpensive lodging options.
  • Take advantage of off-season locations. Summer is peak season at many attractions, but traveling to popular winter destinations can help your budget. Summer is a great time to relax at a ski resort or visit Florida. You even might find some deals for vacations to the Caribbean and Mexico.
  • Have a souvenir strategy. Trinkets are tempting, especially to kids, but ask yourself what will happen to the items once you're back home. Set a souvenir budget and enforce a policy such as: Everyone gets to choose one souvenir within a certain dollar amount or everyone gets a T-shirt that they'll actually wear. Or choose a souvenir the entire family can enjoy such as a Christmas ornament or special photo (

For more travel tips, watch the "Money and Travel" video and read "Take a Summertime Drive to Safety" in Home & Family Finance Resource Center.

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CU's letter adds perspective on risk losses

MIAMI (5/28/08)--There are more than 8,000 credit unions in the U.S., and the vast majority did not make the types of subprime loans that account for problems in the mortgage market, according to a recent letter to the editor in the Miami Herald.

Lloyd Gill, executive vice president and chief operating officer, City County CU, Fort Lauderdale, Fla., wrote a letter to the editor, published Monday, recognizing that credit unions are helping borrowers refinance their subprime and exotic mortgages.

He wrote in response to a Miami Herald (May 18) article that noted losses by a Florida credit union related to a condominium project that went into foreclosure.

Gill, who also is the CUNA Lending Council vice chair, cited a study by the Credit Union National Association, which indicated that credit unions save consumers $6.3 billion per year. "If banks consider this an 'unfair advantage,' they are free to convert their bank to a credit union charter at any time," he wrote.

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CUNA, CUs address conversion issues in American Banker

WASHINGTON (5/28/08)--Officials with the Credit Union National Association (CUNA) and some credit unions are happy to see that the pace of credit union conversions to mutual savings banks are slowing down, an American Banker article reported Tuesday.

Because credit union members have become more educated, switching charters has become more difficult, the article noted.

"The more disclosure there is, the more people seem to be against conversion," said Eric Richard, CUNA executive vice president and general counsel. "I really believe that the system was stacked in favor of management. It's less so now than it was before."

Bucky Sebastian, CEO of the $2.1 billion asset Tampa, Fla.-based GTE FCU and head of the National Center for Member Trust, Raleigh, N.C., nixes the idea that credit unions convert so they can better compete, the article said. The actual motivation behind the majority of conversions is greed, Sebastian told the American Banker.

Top executives and directors--not rank and file credit union members--are the ones who realize profits when converting credit unions become stock companies, Sebastian continued.
The credit union industry wants to maintain the status quo with the National Credit Union Administration setting the rules, because easing restrictions against conversions would only diminish the strength of the credit union movement, the article noted.

"Those of us who have been in the credit union movement and have a very strong affinity for it would tell you that the issue is all about the membership and the ownership structure," Tom Dorety, CUNA chairman and CEO of the $6 billion asset Tampa, Fla.-based Suncoast FCU, told American Banker.

"At the end of the day, [if conversion] becomes something that is routine and easy, it certainly weakens the entire credit union system," Dorety concluded.

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'It Belongs to Me' is ICU Day/Co-op Week theme

MADISON, Wis. (5/28/08)--This year's International Credit Union (ICU) Day and Co-op Week will be themed, "ICU Day is scheduled for Oct. 16. Co-op Week will be Oct. 12-18.

This is the first year that Canadian cooperatives have aligned their Co-op Week theme with the international theme used by the World Council of Credit Unions and its members.

"It Belongs to Me" was picked by a multi-national committee of U.S. and Canadian credit union officials. To promote worldwide involvement, the committee invited all of its member organizations to submit suggestions for the 2008 theme. Laquita Normore, marketing and communications manager for Eagle River CU, L'Anse au Loup, Newfoundland, submitted the theme.

"'It Belongs to Me' represents ownership, but also suggests a sense of loyalty and personal pride," Normore said.

"At credit unions, every customer is both a member and owner," said Dan Mica, president/CEO of the Credit Union National Association. "This year's theme celebrates the economic democracy and equal ownership of each credit union member regardless of how much money that member may have in savings."

"Credit union principles must be preserved for the sake of these members and the continuing strength of the credit union movement worldwide, a recognition our joint events are designed to celebrate," said Pete Crear, WOCCU president/CEO.

Co-Op Week has been celebrated in Canada since 1958. ICU Day has been celebrated annually on the third Thursday of October since 1948. Co-op Week in Canada became a national event in 1982 with the encouragement of the Cooperative Union of Canada.

The events provide an opportunity to honor those who have made contributions to the cooperative movement, to recognize the board and staff members working on behalf of credit unions and cooperatives, and to express appreciation to members of credit unions and cooperatives at home and abroad.

Promotional materials and products for ICU Day and Co-op Week will be available online in the coming months. October also is National Cooperative Month. For more information, use the link.It Belongs to Me."

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Tuesday, May 27, 2008

Sunmark FCU shares best practices in hiring, keeping staff

LATHAM, N.Y. (5/27/08)--Making the workplace fun is one of the best ways to attract and retain employees, a New York credit union CEO told participants at a seminar sponsored by The Business Review Wednesday.

"Financial services can be a little dry," Bruce Beaudette, president/CEO of the $432 million asset, Schenectady, N.Y.-based Sunmark FCU, said. "We still manage to have a lot of fun. It works well for retention and for attraction [of employees]. We do a lot of things to create the fun."

Beaudette was one of three panelists participating in a seminar focused on recruiting and retaining employees as part of The Business Review's best practices seminar series.

One way to keep employees enjoying their work--which is important--is to pay them referral fees to find workers to fill company positions, Beaudette told the paper.

Asking oddball questions--about one's hobbies for instance--when interviewing is a good way to catch candidates off guard and find out what they are passionate about, he added.

Distance is one barrier to finding good workers, Beaudette said. With gas prices at or near $4 a gallon, people don't want to travel more than 15 minutes to work. Before, they had no problem driving 45 minutes to work, he added.

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Pa. treasurer testimony describes CUs' Better Choice

HARRISBURG, Pa. (5/27/08)--Pennsylvania State Treasurer Robin Wiessmann praised the Credit Union Better Choice program--a payday lending alternative--and confirmed her commitment to supporting the program in testimony before the Pennsylvania House Finance Committee May 20.

The testimony was in support of House Bill 2295, which extends part of the investment authority for Treasury's funds. The extension will allow Treasury to continue to broadly invest in securities, including equities and mutual funds, until Dec. 31, 2010. It also provides the appropriate authority to obtain reasonable returns with reasonable risk assessment (Life is a Highway May 23).

Wiessmann described the Credit Union Better Choice program, which was developed in conjunction with the Pennsylvania Credit Union Association. The program is "believed to be the only program in the nation to provide a statewide alternative to payday lending, protecting consumers from the exorbitant fees that oftentimes trap them in a debt cycle," she said.

"Credit Union Better Choice provides consumers with low-cost, short-term loans and an investment in their futures through the program's financial literacy and savings components," Wiessmann continued.

Wiessmann concluded her remarks saying: "I am committed to keeping an eye out not only for future risks, but also for emerging opportunities for positive returns for the Commonwealth.
Positive returns can be enhanced, however. I strongly believe that we can do well for our funds and, at the same time, do good for Pennsylvania stakeholders. The KeystoneHELP and Credit Union Better Choice programs are perfect examples of this philosophy."

Christina Mihalik, association assistant vice president, governmental affairs, attended the hearing.

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NCUA: Share growth surges in first quarter

ALEXANDRIA, Va. (5/27/08)--Federally insured credit unions reported significant share growth in the first three months of 2008, the National Credit Union Administration (NCUA) said Thursday.

The data were taken from NCUA's Call Report, which is based on data submitted by the nation's 8,049 federally insured credit unions.

Total shares increased 5.6%, for an annualized 22.4% in the first quarter. Every category of savings, except non-member deposits, grew by annualized double digits. Loan growth was 1.1%, or an annualized 4.5%.

"The influx of shares in the first quarter illustrates that credit unions are providing their members with competitive savings products," said NCUA Chairman JoAnn Johnson in a statement. "Federally insured credit unions reported a 4.8% increase in first-mortgage real estate loans in the first three months of 2008."

Net charge-offs increased to 0.67% from 0.50%, resulting in the loan delinquency ratio declining from 0.93% to 0.91%.

The data indicate adverse real estate delinquency trends, Johnson said. But the trends are not indicative of systemic problems in the overall safety, soundness and stability of the credit union industry, she added.

"(The trends) underscore the importance of proactivity, diligence and care in credit union underwriting and management of real estate loan portfolios," Johnson said.

Other findings from the report:
  • Assets increased 5.1% to $792.2 billion from $753.4 billion;
  • Loans rose 1.1% to $532.8 billion from $526.9 billion;
  • Investments were up 8.5% to $154.6% from $142.5 billion;
  • Shares increased 5.6% to $667.7 billion from $632.4 billion;
  • Net worth went up 1.8 % to $87.7 billion from $86.2 billion; and
  • Membership rose 0.8% to 87.5 million members

In large lending categories:

  • Total real estate loans increased 3.1% to $279.6 billion;
  • Used-auto loans increased 0.7% to $89.7 billion;
  • New-auto loans declined 3.2% to $84.1 billion; and
  • Unsecured credit card loans declined 1.2% to $29.7 billion.

With the exception of first-mortgage real estate loans, lending was curtailed during the quarter, and the influx of shares resulted in several investment categories expanding significantly, NCUA noted in its statement. Available-for-sale securities increased 16.9 % to $67.9 billion, and deposits in commercial banks, savings and loans, and savings banks grew 27.7% to $21.0 billion.

Regarding share growth:

  • Money market shares grew 7.9% to $119.9 billion;
  • Share drafts grew 6.9% to $75.8 billion;
  • Regular shares grew 5.1% to $177.6 billion;
  • Share certificates grew 4.6% to $226.1 billion; and
  • Individual retirement accounts and Keogh accounts were up 4.2% to $59.3 billion for the quarter.

The return on average assets ratio declined to 0.60% from 0.64% at year-end 2007 because of an increase in the provision for loan and lease losses expense from 0.44% to 0.55% as credit unions account for potential loan losses, the NCUA said.

Details of first-quarter 2008 data are available in a consolidated balance sheet and a March 2008 Facts/Summary posted online. For more information, use the link.

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Second UBIT lawsuit makes strong case, says CUNA

WASHINGTON (5/27/08)--The second lawsuit to be filed over policies imposed by federal tax collectors on payment of unrelated business income tax (UBIT) makes a strong case, said a representative of the UBIT Steering Committee last week.

Bellco CU, Greenwood Village, Colo., filed what is now the second lawsuit this year over the UBIT policies. It filed a complaint against the Internal Revenue Service (IRS) May 21. The credit union is seeking a refund of $199,000, based on UBIT taxes paid for 2000, 2001 and 2003.

"Bellco CU has made a strong case in its complaint, taking a critical stop toward compelling the tax agency to adopt a more reasonable position," said Eric Richard, Credit Union National Association (CUNA) general counsel and executive vice president, speaking on behalf of the UBIT Steering Committee.

"Bellco deserves the gratitude of the credit union system for taking on this important policy issue, essentially seeking to right a wrong that IRS has committed by forcing cooperatively owned, not-for-profit credit unions to pay tax on some of the financial services they offer," Richard said.

CUNA and the UBIT Steering Committee support Bellco's position in the case. The UBIT Steering Committee comprises representatives from CUNA, CUNA Mutual Group, the American Association of Credit Union Leagues and the National Association of State Credit Union Supervisors.

The Colorado credit union refund claim is based on income generated primarily through sales of credit life and credit disability insurance over those three tax years. Revenue generated from sales of accidental death and disability insurance, and the credit union's involvement with CFS Member Financial Services, a credit union service organization, were included under the 2003 refund claim.

The lawsuit contends that the revenue is substantially or otherwise related to the exempt purposes and functions of the credit union as a tax-exempt, state-chartered credit union. Bellco has asserted that no portion of the taxes paid were legally due.

In January, a Wisconsin credit union filed a complaint against IRS seeking a refund of $54,000 in taxes paid in UBIT on income from several insurance products. The Wisconsin lawsuit also contends that the revenue from sale of the products is "substantially related" to the purposes and functions of the tax-exempt, state chartered credit union.

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Schenk: Consumer response, rates could fuel rebound

MADISON, Wis. (5/23/08)--The reaction of consumers to the federal tax rebates--along with a decline in interest rates--could help jump start an economic rebound, Mike Schenk, vice president of economics and statistics with the Credit Union National Association, told Investor's Business Daily Wednesday.

The Fed expects the economy to shrink in the first half of 2008, and then start to recover as interest rate cuts and the $168 billion government stimulus plan begins to take effect, the newspaper said.

"If consumers respond aggressively to this fiscal stimulus, the combination of this and very low interest rates" could cause the economy to rebound strongly and fuel inflation, Schenk told the paper.

However, with oil prices continuing to climb since President Bush signed the stimulus bill, Americans may be spending a good portion of their tax rebates putting fuel into their vehicles, the paper said.

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NCUA considering expanding, clarifying permissible services

ALEXANDRIA, Va. (5/23/08)—The National Credit Union Administration Thursday proposed amendments to its incidental powers regulation (Section 721) to clarify and update definitions of permissible activities in correspondent and operational programs, and finder activities.

One of the amendments would acknowledge that federal credit unions may provide correspondent services to foreign and federal or state-chartered credit unions. Another amendment would clarify that finder activities include a federal credit union's negotiation of group discounts, and the performance of administrative functions for outside vendors.

The NCUA set a 60-day comment period for the new rule.

"These amendments will provide useful information to federal credit unions by clarifying and updating the illustrations regarding permissible activities," the agency said.

The proposed amendment also would add language stating that vendors may provide non-financial products or financial products, including insurance.

The same proposal would add payroll services to the operational programs category. NCUA has already recognized in a 2006 legal opinion that payroll services are related to other permissible activities, such as electronic financial services and payroll deductions.

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NCUA looking at new rules on underserved areas

ALEXANDRIA, Va. (5/23/08)---The National Credit Union Administration (NCUA) issued a 60-day comment period regarding proposed changes to the existing process of approving multiple group credit unions' service to underserved areas under the Chartering and Field of Membership Manual for Federal Credit Unions.

While the proposal is pending, NCUA has indicated that the 18 current applications for underserved areas would remain in the pipeline.

The proposal:
  • Requests comments on whether a supporting letter should be necessary when a multiple group credit union seeks to add an underserved area;
  • Would change the criteria for "economic distress" for determining if the community is an investment area so that it would be more compatible with the criteria used by the Community Development Financial Institutions Fund;
  • Would also require a one-page narrative statement that describes significant unmet needs for loans or other financial services in the proposed area; and
  • Would not apply to applications that already have been approved.

CUNA's Federal Credit Union Subcommittee will be reviewing the proposal and developing CUNA's comments.

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Thursday, May 22, 2008

Tips for Avoiding Foreclosure

Are you having trouble keeping up with your mortgage payments? Have you received a notice from your lender asking you to contact them?

If you are unable to make your mortgage payment:

1. Don't ignore the problem.The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

2. Contact your lender as soon as you realize that you have a problem.Lenders do not want your house. They have options to help borrowers through difficult financial times.

3. Open and respond to all mail from your lender.The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.

4. Know your mortgage rights.Find your loan documents and read them so you know what your lender may do if you can't make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.

5. Understand foreclosure prevention options.Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the internet at,717348&_dad=portal&_schema=PORTAL .

6. Contact a HUD-approved housing counselor.The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287 or TTY (800) 877-8339.

7. Prioritize your spending.After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other "unsecured" debt until you have paid your mortgage.

8. Use your assets. Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.

9. Avoid foreclosure prevention companies. You don't need to pay fees for foreclosure prevention help-use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month's mortgage payment) for information and services your lender or a HUD approved housing counselor will provide free if you contact them.

10. Don't lose your house to foreclosure recovery scams!If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD approved housing counselor.

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Market News

  • Oil prices soared to record highs again on Wednesday as investors continued to fret about supplies (Reuters via The New York Times May 21). July crude jumped by $2.90 to a record-high $132.08 a barrel on the New York Mercantile Exchange. The Energy Information Administration reported that domestic crude stocks declined by 5.4 million barrels to 320.4 million barrels last week. Crude-oil imports also plunged. Higher crude prices have fueled price surges in gasoline. Retail gas prices hit record highs for the 14th consecutive day on Wednesday, according to AAA ( May 21). The nationwide average for regular unleaded increased to $3.807 a gallon, from $3.80 the previous day. Gas prices are up 9% from last month and 19% from a year ago. High gasoline prices have weakened auto sales and pinched consumers already strapped by rising food and medical-care costs ...
  • Declining prices have made homes more affordable in many cities, according to the latest Wells Fargo/ National Association of Home Builders (NAHB) Housing Opportunity Index. During the first quarter, 53.8% of all new and existing homes sold nationwide were affordable to households earning the median income of $61,500. That's up from 44% during the fourth quarter and the highest level since the second quarter of 2004. "Three factors combined to substantially increase housing affordability nationwide--mortgage rates returning to near the record low levels of a few years ago, a $2,500 rise in family income nationwide and lower house prices," said NAHB President Dandy Dunn. However, critics note that rising affordability alone won't boost home sales. "While affordability is an important factor that will contribute to recovery of housing markets eventually, improved affordability is unlikely to lift markets out on its own," said National City Corp. Chief Economist Richard DeKaser. NAHB's index assumes constant lending standards. However, lenders have substantially tightened standards this year ( and May 21) ...
  • Home prices will continue to decline, said Fannie Mae President and Chief Executive Daniel Mudd in a speech to shareholders in New Orleans on Tuesday. The housing crisis is "about halfway through," and prices could plunge as much as 25% before the market begins to recover, said Mudd. He noted that the housing market is in the middle of its most severe downturn since the Great Depression. However, Mudd said Fannie will be able to weather the downturn and expand its business. Federal regulators have eased capital requirements for Fannie and Freddie Mac, in a bid to help them bolster the housing market (Associated Press via May 21) ...
  • Mortgage activity declined last week as rates rose, the Mortgage Bankers Association reported Wednesday ( May 21). The trade group's Market Composite Index fell 7.8% during the week ending May 16 to 621.6. The Refinance Index declined 8.7% to 2210.5, while the Purchase Index dropped 6.9% to 352.5. The average 30-year, fixed-rate mortgage (FRM) rose 8 basis points to 5.9%, and the one-year, adjustable-rate mortgage increased 11 basis points to 6.71%. Falling home prices, tight lending standards, and still-high mortgage rates continue to dampen mortgage activity, said Moody's (May 21). The research firm noted that the 30-year FRM is 70 basis points higher than it was at the bottom of the 2001-2003 economic downturn ...

Phishing attempts made against CUs in three states

MADISON, Wis. (5/22/08)--The latest phishing expeditions using credit unions to lure personal financial information away from members and other consumers have occurred in Missouri, Illinois and Florida.

Authorities have reported phishing attempts at three credit unions. It is not known whether the phishers succeeded in obtaining account information.

In the incidents:
  • Missouri Attorney General Jay Nixon said consumers in Kansas City, Mo., are receiving phone calls, text messages and e-mails purporting to be from Kansas City-based Mazuma CU. The contacts are actually from identity thieves, he said.
  • Land of Lincoln CU in Decatur, Ill., was in the process Monday of notifying credit and debit card account holders that scamsters are using its name in phone calls, text messages and other phish attempts. Several residents received computer-generated phone calls that claiming to be from the credit union and advising their account was closed for security reasons. (Herald-Review May 20).
  • McCoy FCU, based in Orlando, Fla., also was warning members about a text-messaging scam using its name. The scam urges the recipient to call a phone number and provide account information to fix a "problem" with the account.

The credit unions and authorities emphasized that credit unions and other financial institutions would not solicit such information.

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CUNA sends letter to Frank on Internet gambling bill

WASHINGTON (5/22/08)--The Credit Union National Association (CUNA) Tuesday sent a letter to House Financial Services Committee Chairman Barney Frank (D-Mass.) supporting a bill, H.R. 5767, which would place a moratorium on the implementation of regulation regarding the Unlawful Internet Gambling Enforcement Act (UIGEA).

On April 2, Harriet May, CUNA board secretary, testified before the House Financial Services Committee Subcommittee, saying that UIGEA and regulations proposed by the Department of Treasury and the Board of Governors of the Federal Reserve System would impose a set of unreasonable policing requirements that would be difficult for financial institutions to meet.

Credit unions could be swamped by the compliance burden associated with UIGEA, May said. Under the Internet gambling law, financial institutions must establish and implement policies and procedures to identify and block restricted transactions or rely on those established by the payments system (News Now April 3).

Credit unions fear that they already are burdened with heavy policing responsibilities under the Bank Secrecy Act and Office of Foreign Asset Control rules, she added.

CUNA also is concerned that the act would pose technological limitations and statutory ambiguity. "These new burdens would without question divert credit unions from their intended purpose of providing financial services to their members," wrote CUNA President/CEO Dan Mica in the letter.

CUNA does not condone illegal Internet gambling, and does not want to see it continue or grow. However, the statute and implementing proposal represent an inappropriate and overly burdensome regulatory compliance issue that concerns CUNA, Mica added.

In the April hearing, May noted that any final rule should:
  • Provide a mechanism to verify when a payment transaction is intended for illegal Internet gambling;
  • Define what is meant in its directive that covered entities address "due diligence";
  • Clarify what the due diligence requirements are; and
  • Provide financial institutions with at least 18 months to determine how to meet the new requirements.

She also said that CUNA supports the Internet Gambling Regulation and Enforcement Act, H.R. 2046, which would require Internet gaming businesses to be licensed and pay user fees to the Finance Crimes Enforcement Network.

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Monday, May 19, 2008

Struggling Americans use plastic to stay afloat

ATLANTA (5/19/08)--More Americans are turning to credit cards to keep them afloat as they swim in a sea of debt, spawned by high gasoline and food prices, low savings rates, and shrinking home equity ( May 9).

Saying "charge it" to meet basic living needs is drawing concern from credit counselors nationwide, who report seeing clients dig themselves deeper into debt. Many struggle to scrape together funds just to make minimum payments on their cards.

Americans' credit card debt load soared to $957.2 billion in the first quarter of 2008, a 6.7% increase from the previous quarter (Federal Reserve May 7). And despite reports of banks tightening guidelines and not offering credit to consumers with spotty credit records, mailboxes tell a different story: More than five billion credit card solicitations were sent to U.S. households last year alone (Los Angeles Times May 7).

For most Americans, there's no fall-back. The National Foundation for Credit Counseling and MSN Money 2008 Consumer Financial Literacy Survey, prepared by Princeton Survey Research Associates International (April 29), revealed that the majority of consumers don't have sufficient emergency funds--defined as three to six months of after-tax income--to cope with layoffs or unexpected expenses.

If you feel yourself falling victim to the credit card crunch, take steps now to start climbing back to solid ground:
  • Reassess spending habits. Try to identify some budget busters--such as cigarettes, soda, the morning latte, video rentals, or casino visits--that may be draining much-needed funds for gas or food.
  • Find free or low-cost alternatives. Until your finances get back on track, set a goal to make painless adjustments. Instead of that $3.50 latte, make coffee at home and fill a to-go mug. Borrow free videos from the local library. Or pack a picnic lunch and take the kids to the park.
  • Revise your written spending plan. Unless you can increase your income, allocate more money for the categories that require more funds (transportation and food), and decrease anticipated spending in other areas. Then stick to your new budget. And if you don't have a written spending plan, now's the best time to start one.
  • Don't be tempted by new card offers. Shred them right after they come in the door, and then visit to get your name off prescreened credit card lists.
  • Steer clear of cash advances. The interest rate is typically higher than for straight purchases. The same goes for payday loans, rent-to-own, and refund anticipation loans--all of which prey on consumers with less-than-stellar credit and charge excessive interest rates and fees.
  • Check your credit history. If you've been late with some payments, check to see if those "dings" made it onto your credit record. They may make it difficult for you to get credit--or get good interest rates on credit--in the near future. Go to to order a free credit report every year from each of the three major credit-reporting agencies. Correct any errors, and vow to pay all bills on time.
  • Get help. Contact the credit union for help developing a spending plan, particularly during these tough economic times. For help working out a repayment plan with creditors, contact the nearest Consumer Credit Counseling Service by calling 800-388-2227 or visiting
  • Put something—even a little—into emergency savings regularly. This cushion will give you some much-needed peace of mind in the months ahead.

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Tips for avoiding foreclosure scams offered by OCC

WASHINGTON (5/19/08)--Foreclosures are up nationwide, and the government is warning consumers that scams promising to "rescue" homeowners from foreclosure are increasing.

An Office of the Currency (OCC) consumer advisory warns about these scams:
  • Lease-Back or Repurchase Scams. Someone offers to pay your mortgage and rent your home back to you, or promises to sell your house for you. Signing over a deed gives the con artist power to evict you, raise your rent, sell the house or steal the equity in your home.
  • Refinance Fraud. People posing as mortgage brokers or lenders offer to refinance your loan to more affordable payments. But they may trick you into signing over ownership of your home by telling you that you're signing documents for a new loan.
  • Bankruptcy Schemes. Several scams attempt to abuse bankruptcy laws. One asks you to give a partial interest in your house to one or more persons. Each holder of a partial interest can then file bankruptcy, one after another. A stay order against foreclosures won't excuse you from having to repay the full amount of your loan.

OCC suggests you protect yourself by:

  • Knowing what you are signing;
  • Getting promises in writing;
  • Making mortgage payments directly to your lender or mortgage servicer;
  • Being careful about signing over your deed; and
  • Reporting suspicious activity to the Federal Trade Commission and to your state and local consumer protection agencies.

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Stimulus checks can impact CUs' bottom line

FARMERS BRANCH, Texas (5/19/08)--The federal government's efforts to boost the slumping economy through economic stimulus checks could result in a torrent of cash hitting credit unions. How should credit unions respond?

About 130 million Americans will receive checks, ranging in size from $600 to $1,800.

Preliminary surveys indicate that only 20%-25% of recipients will spend their checks, while the remainder will deposit the checks to bolster their savings balance or pay down debt--meaning credit unions could be awash in cash (LoneStar Leaguer May 16).

Such large inflows of cash are the kind of anomaly that can negatively impact a credit union's bottom line if the credit union has not been vigilant in adjusting interest rates relative to earnings, said analysts from Southwest Corporate Investment Services Asset/Liability Management (ALM) Service.

"If credit union capital is low and investment earnings are renewing at rates lower than those being paid on member dividends, large cash inflows will only exacerbate the move toward negative earnings," Mark DeBree, senior ALM analyst, told the Texas Credit Union League.

"Credit unions should determine whether dividend schedules are reasonable, based on earnings in the current interest rate environment," he added. "Some credit unions are reticent to cut the cost of funds because they want to provide the greatest value for their members. But maintaining share rates that are too high can result in negative earnings and jeopardize the credit union's financial condition.

"While credit unions can't ignore what competitors are paying on deposits, it should not be the sole determinant in setting deposit rates," DeBrees concluded.

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Online banking beats branches, call centers

NEW YORK (5/19/08)--Customer satisfaction with online banking sites has risen significantly the past five years, indicating that Americans are more pleased with online banking operations than with branches and call centers, according to a study.

The 2008 ForeSee Results/ Online Financial Services Study employs the University of Michigan's American Customer Satisfaction Index (ACSI). The study measures customer satisfaction with the online experience in three areas: Banks (defined as large banks, regional banks and credit unions), credit card companies, and investment services firms.

Online banking websites scored 82 on ACSI's 100-point scale, up 12% or nine points from 73 in 2003. Credit card websites and investment websites each scored 75. Overall retail banking scored 78 when measured by ACSI last year.

Three factors were cited in the study as why banking sites had higher customer satisfaction levels. They have made it easy for customers to access information and conduct transactions at their convenience; they have convinced large numbers of customers of the convenience, value and security of the online channel; and they know to use the web as a tool to build stronger customer relationships.

The survey found that highly satisfied online banking customers are significantly more likely to purchase more services (31%), use the website as a primary channel (57%) and recommend their financial institution (54%) as its website (63%).

The survey report noted several opportunities for financial institutions to raise customers' satisfaction and loyalty. They can: increase online bill payment; increase Web usage; increase online applications for loans and other activities; and increase use of online customer service features, such as demos and tutorials.

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Are credit union robberies getting more violent?

MADISON, Wis. (5/19/08)--Are credit union robberies becoming more violent? That is difficult to answer, because robberies by nature are violent; the threat of violence is always there, according to a CUNA Mutual robbery expert.

The trend over the past few years with the use of weapons in credit union robberies is staying consistent, Vince Wagner, risk manager for CUNA Mutual Group, told News Now.

In 2006, 434 credit union robberies were reported to CUNA Mutual Group, with 246 (57%) involving a weapon, Wagner said. In 2007, 349 robberies were reported, with 179 (51%) involving a weapon.

"But based on media reports, it appears that perhaps weapons are being used more now, as opposed to just being displayed," he said, adding that CUNA Mutual doesn't make that distinction in the statistics it keeps.

"I want to emphasize that credit unions need to be cognizant of the possibilities of robbery and provide their staffs with training," Wagner said.

"The key thing to remember during a robbery is cooperate, cooperate, cooperate. Don't panic, remain calm, and get the robber out of the credit union as quickly as possible, because then there is less likelihood something will go wrong," he concluded.

Some incidents of violence with credit union robberies in the past year:
  • An armed man lined up eight credit union employees and one member in Fibre FCU, Longview, Wash., and pepper sprayed them all, then fled with a bag of cash Tuesday afternoon (Associated Press May 14).
  • An armed man entered Keesler FCU, Biloxi, Miss., and took two employees hostage, Tammy Brister, vice president of branch operations, told News Now (April 22). The man had several weapons, and the credit union was "extremely busy" at the time of the robbery, she added. Because he came to the credit union on foot, he forced the tellers into a car to escape. The three left the credit union, and after a high-speed chase, the car drove into a ditch and the robber was caught by police, Brister said. "The tellers are fine," she said. "No one was hurt physically."
  • A teller of a Charlotte, N.C., branch of Raleigh-based State Employees CU' was shot and seriously injured during a robbery in March (Charlotte Observer April 1).
  • A suspect involved with an attempted armed robbery and shootout at the Niles, Mich., branch of Berrien Teachers CU died in surgery at a local hospital in January. The suspect was allegedly shot during the attempted robbery the morning of Jan. 18 by a security guard. Two men entered the credit union and exchanged gunfire, both inside and outside of the credit union, with the guard. At least five shots were fired, police told the Tribune (Jan. 22).

Some other violent incidents at credit unions, not involving robberies:

  • A Concord, N.H., police officer was shot inside an under-construction branch of Granite State CU in May when another officer's gun discharged. The officer was treated and released from a local hospital. "We're glad nobody was seriously injured," Denise Caristi, president/CEO, Granite State CU, told News Now (May 5).
  • A Maine man who waved a chain saw over his head, revved it up to threaten passing motorists, and performed impromptu pruning of local shrubbery was eventually arrested at gunpoint near Howland Enfield CU. A local deputy sheriff and a Maine State Police Trooper took Lionel Dube, Jr., of Argyle, into custody. He was charged with criminal threatening, disorderly conduct and violation of bail conditions (Associated Press June 7).

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Thursday, May 15, 2008

A whole lot of shredding going on at CUs

MADISON, Wis. (5/15/08)--Credit unions were busy conducting shredding events around the country the past few weeks, both to combat identity theft and to go green in recycling efforts.

State Employees' CU (SECU), Raleigh, N.C., partnered with state agencies and Iron Mountain Shredding Co. for its first Scam Jam on May 3. The event was for SECU's Golden Circle members--those 50 and older--who live within an hour of the site.

"Senior adults are the primary target for so many of today's scams, including identity theft," said Karen Daeke, vice president of SECU's security administration department.

In addition to shredding personal documents, the event provided educational workshops and informational booths. Other sponsors included the state Attorney General's Office, Division of Aging and Adult Services, and Adult Protective Services Retired Governmental Employees' Association.

In Oregon, three credit unions held shredding events April 19, according to the Credit Union Association of Oregon (Oregon Outlook May):
  • Mid Oregon FCU and Secure Shred sponsored a "Free Shred" day to help community members purge old tax records and outdated records. The shredded materials are recycled as tissue paper.

  • At MaPS CU's fourth Annual Community Shred event, co-sponsored with Garten Services and KBZY Radio, members shredded 16,782 pounds of documents, recycled 8,347 pounds of computer systems, and donated 290 pounds of cell phones. The event attracted 668 cars--an average of 2.5 cars per minute.

  • SELCO Community CU and CDI Vaults partnered to hold ShredFest, an event in which SELCO members and the public could bring up to one trunkload of documents to shred.

In Missouri, more than 700 cars and trucks lined up at First Community CU, Chesterfield, to shred more than 14,000 pounds of documents on its shred day April 12. "Identity theft is an ongoing issue across the country, and shredding documents makes it more difficult on identity thieves, said Debra Wapelhorst, event planner. It's also an "environmentally friendly solution," she told the Missouri Credit Union Association (CourierNet April 23).

In Texas, almost 2,500 people used the free shredding service at San Antonio FCU (SACU)'s Sixth Annual Shred Day on April 19. The credit union joined four local shredding companies, WOAI News 4 and the Association of Records Managers and Administrators to sponsor the event. Trucks shredded or collected 59 tons of paper for recycling, and participants donated $5,000 for Dress for Success of San Antonio, an organization that helps women gain skills to re-enter the work force.

According to the Texas Credit Union League, other Texas credit unions with recent shredding events were AMOCO FCU, Texas City, with 15,000 pounds of shredded paper from 1,500 boxes; Cy-Fair FCU, Houston; DATCU, Denton; and East Texas Professional CU, Longview (LoneStar Leaguer May 1).

Resource Links
What to Keep and What to Throw Away

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CUs help those displaced by Florida wildfires

PALM BAY, Fla. (5/15/08)--Several Florida credit unions are working with United Way to help those displaced by recent wildfires in the state.

The wildfires began burning on Tuesday. The largest blaze burned 3,800 acres in the towns of Palm Bay and Malabar. About 34 miles of the interstate in Brevard County was closed Tuesday because of smoke, and all 18 schools in Palm Bay were closed Tuesday (USA Today May 14).

Police arrested a suspect yesterday regarding a wildfire that was deliberately started in Palm Bay (CNN May 14).

Community Educators CU, Rockledge, teamed up with United Way of Brevard County and is collecting donations at all seven of its branch locations in Brevard County. Donations can be made in cash, by check or by using Visa or MasterCard. The fund gives 100% of all donations to relief.

The credit union also opened up a business office 9 a.m. to 6 p.m. yesterday for victims in its Palm Bay branch to notify loved ones and contact insurance companies. The credit union held a dinner on Wednesday for those displaced by the fires.

"It has long been the policy of Community Educators CU to be responsive to those affected by fire emergencies, hurricanes and natural disasters," said Sara Stern, Community Educators vice president of marketing. "We hope to help families get back on their feet more quickly by providing the resources they need at this unfortunate time."

The credit union is accepting any non-perishables at all of its branches. Needed items include sun block, bug spray, water and blankets. Firefighters need water, socks, sunscreen and Chapstick.
Space Coast CU, Melbourne, is accepting donations for the United Way at all of its branches. It has four branches in the Palm Bay area.

The Miami Herald Wednesday reported that a credit union employee, Brenda Civita, lost her home in the fire. The newspaper did not name the credit union. News Now was unable to confirm the credit union by press time.

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Wednesday, May 14, 2008

Dollar: Where will CUs be in 2020?

NEWPORT BEACH, Calif. (5/14/08)--Where America's credit unions find themselves in 2020 will be determined by their vision in 2008 and the decisions that accompany the vision, said Dennis Dollar, former National Credit Union Administration (NCUA) board member, at the National Association of Credit Union Service Organizations (NACUSO) Annual Conference April 29 in Las Vegas.

In the future, credit unions will be the dominant community-based financial institutions in most communities because bank mergers will create more nationwide megabanks, Dollar predicted. The megabanks will lead to a disconnect with local citizens who seek a personal touch.

Credit unions also will dominate community banking sectors in the year 2020, Dollar added.

Other predictions for 2020:
  • A risk-based capital system will be implemented to bring credit unions into the regulatory mainstream;
  • Field-of-membership rules will still exist, but will be safety and soundness-driven;
  • Credit union directors will face more fiduciary responsibilities requiring continuing education and some type of director compensation will be authorized for increased responsibility;
  • Credit unions will retain federal tax-exemption status;
  • Credit unions' political activism must continue;
  • Credit union service organizations will exceed the number of credit unions;
  • Credit unions will face greater regulatory pressures, and this will drive mergers;
  • Credit unions will market cooperatively nationwide; and
  • Shared branching will be a key credit union differentiator, with nearly all credit unions participating nationwide, thus reinforcing a national branding campaign.

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Card violates 'one bank, one CU' rule, say defense CUs

ALEXANDRIA, Va. (5/14/08)--A new rewards MasterCard offered by Chase Card Services is prompting the defense credit unions to request the Department of Defense halt issuing the card. The credit unions say the card violates the "one bank, one credit union" rule allowing only a single bank and credit union for each military base.

The Military Star Rewards MasterCard is a collaboration between the Army and Air Force Exchange Service (AAFES)--which manages the military exchange credit card program--and Chase Card Services, an affiliate of JP Morgan Chase (Marine Corps Times May 5).

The defense credit unions also said that the card violates the Pentagon's own prohibition against the exchange operating banking services.

The card, which debuted May 1, gives users two points for every dollar spent on the military installations at commissaries, exchanges, gas stations and other retail outlets. The card also can be used outside installations, unlike the military exchanges' regular Military Star card.

In essence, AAFES and J.P. Morgan Chase are issuing a co-branded card for military personnel to use on and off base. This is a violation of the "one bank, once credit union" policy, Arty Arteaga, president/CEO of the Defense Credit Union Council--which represents credit unions on U.S. military bases--told News Now.

"Only the one bank and one credit union can provide financial services to military personnel per the policy," Arteaga said. "The legal counsel at Defense Finance and Accounting Services agrees with this. However, AAFES does not. So on April 29, we asked the Department of Defense general counsel for a ruling. At this time, we are waiting for that ruling.

If the office of the general counsel decides there's a violation of the rule, AAFES would have to request an exception to that policy before it could proceed.

"The Army and Air Force are aware of our concerns, and they know we oppose the granting of an exception for the policy," Arteaga said.

"We are addressing an issue with AAFES, we're not fighting JP Morgan Chase," Arteaga added.

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Tuesday, May 13, 2008

Phishing attempts rose worldwide in April

BEDFORD, Mass. (5/12/08)--U.S. credit unions accounted for 36% of U.S. banking brands that were attacked during April by phishers attempting to secure personal financial information, according to statistics from RSA Anti-Fraud Command Center.

Regional U.S. banks also accounted for 36% of the phish attempts, while nationwide U.S. banks were targets in 28% of the attacks.

U.S. banking brands continued to lead as phishing targets, accounting for 62% of the attacks online. Together banks and credit unions formed more than two-thirds of the entities targeted during the month, said RSA.

The number of brands attacked totaled 215, a slight decrease from March's 225, which was the highest number of brands attacked in the past year.

More than 30 new financial entities were subjected to attacks during April.

The U.S. continued as the leader in hosting the largest number of attacks; however, the U.S. percentage decreased 12% to 51% of hosted attacks. China was the second-largest host, with 19% of all attacks.

AFCC noted that Zeus Trojan (also called "wsnpoem") attacks on financial institutions worldwide have increased. Because the package is easier to use, it can be easily controlled by unsophisticated users.

Phishing incidents spread into the Asia-Pacific region, with attacks increasing in Australia and New Zealand during both March and April.

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CU helps build young CU advocates with grant

SANTA ANA, Calif. (5/12/08)--Orange County's CU helped turn 14 young people into peer trainers, financially aware consumers and credit union advocates, with help from a community service grant from the Richard Myles Johnson (RMJ) Foundation.

The $15,000 grant from RMJ--the state foundation for credit unions in California and Nevada--helped expand the Santa Ana-based credit union's partnership with Long Beach Community Hispanic Association (Centro CHA) for its Latinos Investing for Tomorrow (LIFT) program.
The program aims to turn young people living in impoverished communities in the Greater Long Beach area into peer trainers in their communities. It includes a financial literacy component developed by the credit union.

Some of the funds went to providing $500 stipends for each of the 14 graduates, aged 16 to 22. They attended six workshops on Saturdays to learn how to be active and informed advocates in their home, school and community. The financial literacy component included instruction on budgeting, the value of money, the value of credit, and saving and investments.

Participants also completed 40 hours of community service and took field trips, including one to a local branch of the $861.6 million asset credit union.

After the field trip, the new advocates spread the word about the credit union difference, which resulted in the opening of 27 new accounts, said Leticia Mata, assistant vice president of community and education development at the credit union.

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CUs lower rates in race for auto loans

MADISON, Wis. (5/13/08)--Some credit unions are coping with the downturn in the economy by lowering auto lending rates to gain an edge on the competition.

Credit unions trying to make auto loans more appealing to members include:
  • Pacific Service CU, a $1.107 billion asset, Walnut Creek, Calif.-based credit union, announced it lowered auto rates and simplified its loan program. Qualified borrowers will receive rates of 5.79% annual percentage rate (APR) for terms up to 66 months, and 6.79% APR for terms of 67-84 months. The new rates apply to new and used vehicles, including boats, motorcycles and recreational vehicles. It also is offering a $100 incentive to members to refinance their existing auto loans.
  • Fidelity FCU, a $30 million asset Sandy Springs, Ga.-based credit union, launched a new auto loan campaign for May, partnering with Enterprise Car Sales to offer loan rates as low as 2.9% on used cars. Fidelity has extended this offer to its members and to anyone who lives, works, worships, volunteers or attends schools in Sandy Springs.
  • Elevations CU, a $757.9 million asset, Boulder, Colo.-based credit union, last week lowered its best rate on Harley-Davison motorcycles to correspond with the same rate as its automobile loans. Motorcycle purchasers can obtain rates as low as 5.49% with the credit union on Harley-Davidson motorcycle financing. "Because Harleys are a high-ticket item, financing has been a hurdle to ownership for a lot of people. It's not unusual to see loan rates in excess of 7% on these bikes," said Craig Burkhard, chief lending officer at Elevations.

During first quarter 2008, credit unions' vehicle loans outstanding declined at a 6% annualized pace, compared with a decline of 2% for the same period a year earlier, says Southwest Corporate Investment Services. Those loans increased less than 1% during all of 2007, Brian Turner, director of advisory services (News Now May 12).

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Washington Post writer: CUs great for promoting thrift

WASHINGTON (5/13/08)—A personal finance columnist for The Washington Post backed a new idea Sunday to launch a national thrift campaign and noted credit unions should be featured as an important tool to fight consumers' excessive reliance on credit.

Michelle Singletary, who writes "The Color of Money" column for the publication, noted a movement afoot by a coalition of consumer advocates, public policy groups and academics. They want to attack the country's dependence on debt by "creating a national campaign much like the one used to curb smoking."

The organizations mounting the effort include the Institute for American Values, the Institute for Advanced Studies in Culture, the New American Foundation, Public Agenda, the Consumer Federation of American and the National Federation of Community Development Credit Unions.
The coalition is holding a conference in Washington this week and has issued a 68-page report, "For a New Thrift: Confronting the Debt Culture." Eric Richard, general counsel of the Credit Union National Association, is scheduled to address the group today.

The report, Singletary wrote, "merely lists the many ways debt has taken down so many people."

However, credit unions figure prominently among the report's proposals to promote a culture of thrift to replace a reliance on too much debt.

"To combat the culture of credit, the coalition has come up with a number of proposals," Singletary wrote. They include:
  • Promote the use of credit unions, which often offer lower-cost financial products. (The report also supports credit union "expansion and innovation.")
  • Encourage financial institutions to move into low- to moderate-income neighborhoods and provide low-interest consumer loans. For example, in Appleton, Wis., the Prospera CU has teamed up with Goodwill Industries of North Central Wisconsin to create GoodMoney, where consumers can get short-term loans that are much cheaper than they can get from a payday lender.
  • Create a Financial Product Safety Commission modeled after the Consumer Product Safety Commission.

Thursday, May 8, 2008

Yet another publication recommends trying a CU

MADISON, Wis. (5/8/08)--A May 7 article in Investopedia, published by Forbes, recommends that consumers who are frustrated with banks should look at credit unions for their financial needs.

In the article, "Tired of Banks? Try a Credit Union," Certified Financial Planner Mark P. Cussen writes about the alternative value of credit unions.

"Many bank customers are becoming increasingly frustrated with the litany of fees their banks are charging, as well as the difficulties often associated with obtaining a loan," Cussen wrote. "Credit unions represent an alternative to banks and possible solutions to common complaints about traditional banking institutions."

Cussen also explains what credit unions are, their history, their regulatory apparatus and environment, the credit union philosophy, and how credit unions have higher rates, lower fees and better service than banks.

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Final results: Youth Saving Challenge hits $12 million

MADISON, Wis. (5/8/08)--The National Credit Union Youth Week Saving Challenge, hosted by the Credit Union National Association (CUNA), garnered more than $12 million in savings.

Youth Week took place April 20-26. Four hundred credit unions reported their results to CUNA. Total deposits equaled $12,035,272.42; 76,524 youth made deposits; and credit unions opened 6,748 youth accounts.

"Credit unions proved that youth matter," said Joanne Sepich, National Youth Week coordinator.
This year's theme was "Got Green? Grow it at Your Credit Union," and a number of credit unions combined savings lessons with being environmentally conscious.

"From digging in the dirt to face painting, credit unions opened their doors to youth and introduced them to the very simple concept of setting goals and saving for them," Sepich said.
Last year, 393 credit unions reported $10,133,355 in deposits from 71,844 young members. About 9,067 new youth accounts were opened.

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Wednesday, May 7, 2008

Hot on the trail of summer camp discounts

NORTH PALM BEACH, Fla. (5/7/08)--If you want your child to have a summer camp experience this year, there are discounts to be had--if you look for them ( April 23).

These tips can help keep summer camp expenses under control:
  • Ask about scholarships. Most camps offer some sort of assistance, such as tuition reduction or discounts. These "camperships" may be based on financial need, while others may be based on talents and ability ( April 18). Check the camp's website for details, but also call the camp directly and ask about unadvertised scholarships.
  • Check into organizational discounts. If your child belongs to the Girl or Boy Scouts, YMCA, or other group, ask about group discounts through the organization. Some churches or other nonprofit groups also may offer financial assistance based on need.
  • Stay local. With sky-high gas prices, try to keep travel costs to a minimum while still choosing the camp that's right for your child.
  • Get sibling discounts. It's likely the camp will give you a 5% to 15% discount if you send more than one child.
  • Book early. Camps want a full house, and early enrollment could put your child in a better position to receive a scholarship. If you're sure your child will attend the camp next year, ask if signing up a year in advance can lock in this year's rate.
  • Know the camp's refund policy. Before you sign up, anticipate that camp plans may fall through. Know your obligations, as well as the cut-off date to receive a full or partial refund.

For more information, read, "Research, Plan, and Budget for That Special Vacation" in Home & Family Finance Resource Center.

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CUNA helps CUs assist members in tough times

MADISON, Wis. (5/7/08)--Consumers face difficult times in the economy ahead. Credit unions are stepping in to help their members weather the crisis. And the Credit Union National Association (CUNA) is supporting credit unions' efforts--with money management information.
Home and Family Finance Resource Center, one of CUNA's online content services, introduced its Tough Times Series last week. The series will run until the economy turns the corner.

"Credit unions are helping their members, and we're helping credit unions do that," said Jim Hanson, vice president of CUNA's center for personal finance.

"We're making sure that members have access to money management information that can help them gain perspective on today's tough climate," Hanson said. Members will learn "what steps to take to avoid being a casualty in this economy."

He gave examples. New articles such as "How to Handle a Layoff," as well as older ones such as "Steer Clear of Credit Counseling Bad Guys," can point members in the right direction--to the credit union--for help.

At the Home & Family Finance Resource Center, "members at subscribing credit unions can search on the phrase 'Tough Times Series' and bring up several articles and tools that address current challenges," said Michelle M. Haas-Dosher, CUNA senior editor. "We will add new articles in the coming months."

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Mich. lawmakers tout CUs' work on mortgage crisis

NORTHVILLE TOWNSHIP, Mich. (5/7/08)--Michigan lawmakers attending a chapter breakfast were complimentary of credit unions' efforts in finding solutions to a mortgage crisis they didn't cause.

Michigan State Rep. Matthew Gillard (D-Alpena) addressed 50 credit union attendees at the Blue Ox Chapter Legislative Breakfast April 25 in Alpena (Michigan Monitor May 5).

He complimented credit unions' efforts to address the foreclosure crisis, saying their efforts to address the foreclosure issue had not gone unnoticed and were appreciated.

In addition to Gillard, the event drew State Rep. Joel Sheltrown (D-West Branch) and staffers from the offices of U.S. Rep. Bart Stupak (D-Menominee) and State Sen. Tony Stamas (R-Midland).

According to Alpena Alcona Area CU President/CEO Donald Mills, the lawmakers heard that "the credit union industry was not responsible for the present mortgage crisis that is crippling American families and our overall economy, and that credit unions will be a vital part of the solution to this problem."

He added, "This crisis was created by lenders who don't operate by the credit union philosophy of trustworthy, personal service."

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CU support helps in latest elections

WASHINGTON (5/7/08)—Two new House members from Louisiana, one a Democrat, the other a Republican, who won their special elections contests over the weekend each had support from the Credit Union National Association (CUNA).

Newly elected Reps. Steve Scalise, a Metairie Republican, and Don Cazayoux, a New Roads Democrat, will be sworn in this week after winning special elections last Saturday.
Both new House members had strong backing from the Louisiana Credit Union League, and CULAC, the CUNA's political action committee (PAC). CULAC contributed $10,000 to Scalise's effort and $5,000 to Cazayoux's campaign.

While Scalise easily won his general election against Democrat Gilda Reed with 75% of the vote, CUNA Political Director Trey Hawkins said credit unions' support was crucial in an earlier competitive GOP primary in April.

Cazayoux's narrow victory, winning 49% - 46% over Republican Woody Jenkins, was the subject of broad national attention. The victory placed into the hands of Democrats a Louisiana seat that long has been held by the GOP. It was the second Democratic pickup of a Republican-held seat in recent months.

Hawkins said this week that, in both the Scalise and Cazayoux elections, credit unions' backing of the winners should help Louisiana's credit unions begin their relationships with the newest members of their delegation on a strong footing.

Both elections were prompted by vacancies in Louisiana's congressional delegation. Scalise is filling the First District seat vacated when Bobby Jindal was sworn in as Governor. Cazayoux will complete the term of Sixth District Rep. Richard Baker, who resigned earlier this year to take a job as CEO of a trade association in Washington.

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Tuesday, May 6, 2008

Mica named a top Washington lobbyist

WASHINGTON (5/6/08)--Dan Mica, president/CEO of the Credit Union National Association (CUNA), has again been named as one of Washington's top lobbyists by The Hill newspaper's list.
This is the sixth consecutive year Mica has been named to the list.

The Hill noted that Mica is working to get legislation passed that would improve the regulation of credit unions. The Credit Union Regulatory Improvements Act (CURIA), supported by CUNA, is H.R. 1537 in the House and was introduced last week in the Senate by Sen. Joseph Lieberman (I-Conn.) as S. 2957.

Mica also has spoken out against a Treasury blueprint that would place credit unions and banks under the same regulator and charter. Mica garnered press attention from major media outlets such as The New York Times, The Washington Post, The Associated Press, The Wall Street Journal, CongressDaily and Politico.

The Hill's list of top lobbyists is created based on conversations with aides, other lobbyists and members of Congress. The newspaper covers lobbying and Capitol Hill activities. It is read largely by congressional members and lobbying organizations (News Now May 4, 2007).

Other lobbyists to make this year's list include: Steve O'Connor, Mortgage Bankers Association; Ed Yingling, American Bankers Association; Dan Berger, National Association of Federal Credit Unions; and Camden Fine, Independent Community Bankers of America.

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WSJ says this is big year for 'Little Guy'

WASHINGTON (5/6/08)--The weekend edition of The Wall Street Journal highlighted the Credit Union National Association's grassroots efforts, calling 2008 a "big year for the Little Guy."

The story included a picture of CUNA's "The Little Guy."

The current economic climate and worries of working Americans have come to the forefront during this election year, according to the Journal. This has changed lobbying strategies for many groups in Washington.

"Folks beat money anytime in a political fight," House Financial Services Committee Chairman Barney Frank (D-Mass.) was quoted in the story.

The current political and public backlash against "Big Banks, Big Oil, and Big Business," has resulted in many lobbying groups putting their "members and dependents out front—the more Main Street they are, the better," said the Journal.

For example, even the American Bankers Association has begun emphasizing its "local" roots by stressing it represents thousands of community banks that become members after the ABA merged with America's Community Banks, according to the report.

The story called CUNA "a mammoth of the grass roots," and noted CUNA President/CEO Dan Mica's heated reaction to the U.S. Treasury's plan to overhaul the financial regulatory structure. That plan would eliminate the credit union charter as well as the National Credit Union Administration.

Mica said any implementation of such a plan would result in the "nuclear option"--a request to all 85 million credit union members to "rally on Capitol Hill, jam lawmakers' phone lines and inboxes."
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Senators' support for CURIA urged

WASHINGTON (5/6/08)—Each member of 110th Senate is being sent a letter from the Credit Union National Association (CUNA) urging them to support and co-sponsor S. 2957, the Credit Union Regulatory Improvements Act (CURIA).

The key credit union legislation was introduced for the first time in the Senate last week by Sen. Joseph Lieberman (I-Conn.). A House version of the regulatory improvements package carries the names of 149 official backers.

In urging Senate support, CUNA President/CEO Dan Mica wrote that by co-sponsoring CURIA, lawmakers will be "helping credit unions continue their mission of serving working families, making needed services available to lower-income or underserved consumers, and helping promote economic growth and well being in our nation's communities."

Beyond that, Mica noted, CURIA will also improve the quality of services to credit union members by updating or removing other burdensome regulations. The letter included an attachment with specific information about important reforms within CURIA.

"Credit unions work every day to help improve the lives of millions of Americans from all walks of life. At a credit union, every customer is a member and owner," Mica told each Senator.
" The mission of credit unions is to serve their members, and as our economy struggles, this mission is more important than ever. We appreciate your past support of credit unions and urge you to show your continuing support by co-sponsoring CURIA," the letter concluded.

Specifically, CURIA proposes, in part, to:
  • Modernize credit union capital standards to permit more efficient capital management while allowing more earnings to be returned to members in lower costs and expanded services;
  • Expand the ability of credit unions to make loans to finance their members' local small businesses; and
  • Permit more credit unions to offer needed services in lower-income communities that are not adequately served by other depository institutions.

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Monday, May 5, 2008

Job losses slow in April, CUs will see impact

MADISON, Wis. (5/5/08)--The economy lost just 20,000 jobs in April, following job losses that totaled a revised 240,000 during the first three months of the year, the Labor Department reported Friday (see chart). And credit unions are seeing the effects.

The unemployment rate, which is based on a separate survey, edged down to 5% from 5.1% in March.Employment continued to decline in construction, manufacturing, and retail trade in April. The construction sector lost 61,000 jobs. Employment in that sector has plunged by 457,000 since peaking in September 2006.

"The latest employment data confirm that the U.S. economy has stalled and that any growth in output is being generated by rising labor productivity and not an increase in the number of jobs," said Steve Rick, senior economist with the Credit Union National Association (CUNA).

"The weak labor market has pushed consumer confidence levels down to the range normally associated with a recession. This led to a large drop in durable goods spending by consumers in the first quarter of 6.1%, the biggest drop in over two years," Rick said.

"Credit unions are seeing the effects of this weak labor market and drop in spending in their auto loan portfolios which declined 3.4% in the first quarter," Rick added.

"On a brighter note, credit union fixed-rate first mortgage loan balances rose 5.6% in the first quarter, more than twice the 2.3% pace set in the first quarter of 2007, as credit unions took advantage of tighter underwriting standards at other lending institutions," he said.

Manufacturing employment fell by 46,000 last month and has fallen by 326,000 over the past 12 months. Employment in retail trade declined by 27,000 in April. The retail sector has lost 137,000 jobs since peaking in March 2007.

Employment in health care continued to rise in April, with an increase of 37,000 jobs. The health care sector has added 365,000 jobs over the past 12 months.

The average work week fell to 33.7 hours, from 33.8 hours in March. Workers' average hourly earnings edged up just one cent to $17.88 in April.

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Remote deposit makes its way to CUs

BURLINGTON, Mass. (5/5/08)--With the high price of gasoline putting a financial crimp in car travel, credit union members are starting to see the benefits of remote deposit, which allows them to scan a check at home, deposit it online and then destroy the check a few days later.

EasCorp, based in Burlington, Mass., is a corporate credit union that offers remote deposit service called Deposzip. So far, seven credit unions in Massachusetts, New Hampshire, Indiana and Oklahoma use the service. Nine more credit unions nationwide are in the process of adding the service, George Dow, Eascorp assistant vice president of product development and member relations, told News Now.

Why does EasCorp offer Deposzip?
"We think it can satisfy a huge need for credit unions," Dow said. "They can't always be everywhere the members are. We believe Depsoszip will help credit unions overcome this problem. Combining this product with other online services, there's nothing a credit union cannot do for its members online.

"Now with an electronic deposit mechanism, the member doesn't need to depend on mail, a credit union branch location or an ATM for deposits," he continued.

Deposzip interfaces with a credit union member's home banking system, Dow explained. The member goes to a link, logs in and follows the steps of the process through a menu. The Deposzip software works with standard desktop scanners--basically scan and deposit--so no special equipment is needed.

Deposzip also works with businesses through merchant deposit capture. Businesses would buy a more robust scanner--a duplex multi-feed scanner--that gives them the capability to scan and deposit several checks at a time, Dow said.

Credit unions pay a transactional fee to buy service from EasCorp. "We developed a fee schedule that is inexpensive enough so that credit unions do not have to pass the cost on to members," Dow said.

The credit union can control access to the program through an administrative platform, Dow said. This way, credit unions can control the deposit limits of individual members. For instance, one member may have a $10,000 per day deposit limit, while another member, who may have a more questionable financial history, might only have a $1,000 per day deposit limit, Dow explained.

"This is probably the least expensive deposit collection channel a credit union can come up with. It's cheaper than getting deposits from mailing envelopes, ATMs, shared branches or walk-ins," Dow concluded.

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Check out America's CU Conference speakers' podcasts

MADISON, Wis. (5/5/08)--Two new podcasts are available that feature samplings of speakers who will be presenting at the 2008 America's Credit Union Conference & Expo in New York City June 29-July 2. The conference is presented by the Credit Union National Association.

Mark Adams will present "Play to Your Strength: Real Championship Coaching." Adams is a former basketball coach, a broadcaster for ESPN and a professional speaker.

In his podcast, Adams says that "playing to your strengths" means that, to face challenges, people need to focus on what they're good at doing. He challenged individuals to move 10% of their lives away from their weaknesses toward their strengths or talents.

Credit union professionals should focus on some activity that they can do over and over again to develop their talents, and then meld those talents with the fundamentals of personal service, Adams said.

To find inspiration, credit union managers must motivate themselves, and hold themselves accountable first before looking to others in the industry or community, Adams said.

The second podcast features David Merman Scott, author of "The New Rules of Marketing & PR." He will present a breakout session called "Blogs, Podcasting, Viral Marketing, Online Media: How to Reach Your Members Directly." He also is a featured speaker in the Executive Book Series. Attendees who sign up for the series will receive his book and seven other books.

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CUs have power outages after storms hit Kansas City

KANSAS CITY (5/5/08)--Some Missouri credit unions experienced power outages late Thursday and early Friday after storms bringing a tornado and straight-line winds swept through Kansas City, said the Missouri Credit Union Association (MCUA).

There were no reports of credit unions suffering serious damage as of Friday afternoon, said MCUA (CourierNet May 2).

Missouri Family FCU, Independence, was without power for most of Friday morning but power was restored at 12:30 p.m., President Stan Boursheski reported to MCUA. About half of the building remained without power Friday late afternoon.

MCUA said it had not been able to make contact with several other credit unions in areas that suffered significant damages.

Homes and businesses were damaged, predominantly in the northeast Kansas City area.

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Officer's gun discharges in CU, wounds fellow officer

CONCORD, N.H. (5/5/08)--A Concord, N.H., police officer was shot inside an under-construction branch of Granite State CU Thursday when another officer's gun discharged.

The officer was treated and released from a local hospital. "We're glad nobody was seriously injured," Denise Caristi, president/CEO of Granite State CU told News Now.

Four officers were inside the branch around 4:30 a.m. when the incident occurred. The officer, who was wearing a bulletproof vest, was shot in the chest.

"We're not sure why the officers were in the building," Caristi added. "The state attorney general's office is investigating."

There was no damage to the branch, and construction is still on schedule, she said. The credit union branch is scheduled to open this summer.

Granite State CU is located in Manchester, N.H. It has $205 million in assets.

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Mica outlines next step for CURRA

WASHIGNTON (5/5/08)—The Credit Union National Association (CUNA) met Friday with House Financial Services Committee Chairman Barney Frank (D-Mass.) and his staff to address the next steps for the Credit Union Regulatory Relief Act (CURRA, H.R. 5519).

CUNA President/CEO Dan Mica said the session was productive and discussions lasted about an hour. Mica noted after the meeting that the bill now is in the hands of the committee chairman.

"There is nothing more we can do at this time for CURRA," Mica said. "Our focus has turned completely to the broader Credit Union Regulatory Improvements Act, known as CURIA in both the House and Senate." The package has 149 sponsors in the house and was introduced in the Senate just last week by Sen. Joseph Lieberman (I-Conn.).

Friday, May 2, 2008

CUs' key relief bill introduced in Senate

WASHINGTON (5/2/08)--Sen. Joseph Lieberman (I-Conn.) introduced a Senate version of the Credit Union Regulatory Improvements Act (CURIA, S. 2957) Thursday, putting the key credit union legislation a giant step forward in the legislative process.

The Credit Union National Association (CUNA) lauded Lieberman's action saying the senator has "demonstrated determination and conviction in his support for consumer-owned credit unions" by introducing his bill.

CUNA President/CEO Dan Mica said, "Through his action, consumers have the hope of more choices in services, as well as the promise of continued strength, for the credit unions that they own and direct.

"Our sincere thanks and gratitude to Sen. Lieberman. We look forward to working with him, and other senators, as this important legislation gains support and eventual passage in the Senate," said Mica.

It was at the CUNA Governmental Affairs Conference in March that Lieberman said he recognized the importance of the Credit Union Regulatory Improvements Act to credit unions and pledged to be an original sponsor of a Senate version of H.R. 1537. The House bill currently sports the names of 149 members of the House as its official sponsors.

Among changes proposed by the bill, which is substantively identical to the House version, CURIA would:
  • Clarify the 1998 Credit Union Membership Access Act to allow all credit unions, regardless of charter type, to serve those in underserved areas. The bill would also update the definition of an underserved area, incorporating definitions from the Community Development Financial Institutions Act and the New Markets Tax Credit;
  • Increase the current cap on loans to members for business purposes (MBLs) from 12.25% to 20% of assets, allowing credit unions to assist more members start and expand small businesses and to promote economic growth. The bill would also exempt loans under $100,000 and those to nonprofit religious organizations from the MBL calculation;
  • Establish additional consumer safeguards in the event of a credit union conversion to another form of financial institution; and
  • Reform the National Credit Union Administration's original prompt corrective action system to a risk-based approach more closely resembling the current Federal Deposit Insurance Corp. capital standard for banks.

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