Monday, September 29, 2008

Money market share accounts at CUs are insured

MADISON, Wis. (9/29/08)--In the wake of recent financial bailouts and questions over the safety of financial instruments, there's been considerable confusion over the difference between money market share accounts at the credit union, and money market mutual funds. The most important difference: One is insured and one isn't.

Money that members place in money market share accounts--which are substantially similar to banks' money market deposit accounts--is backed by the U.S. government through the National Credit Union Share Insurance Fund (NCUSIF). It insures funds up to at least $100,000 for a standard account, or $250,000 if the money is specifically in a retirement account.

A similar level of insurance is available through the Federal Deposit Insurance Corporation (FDIC) for bank deposits.

In contrast, the money in a money market mutual fund does not carry insurance. The recent Treasury Department proposal, however, would temporarily guarantee money market mutual funds for a year to boost investor confidence.

"The Treasury Department's proposal is currently written to guarantee only those funds deposited on or before Sept. 19," warns Steve Rick, senior economist, Credit Union National Association, Madison, Wis.

"Given recent volatility in the market, it makes sense to place any additional savings in an insured money market share account at depository institutions such as a credit union because of the share insurance up to at least $100,000," Rick said.

Other important points to remember about these financial instruments include:

Money market share accounts offer higher yields than traditional savings accounts, but usually have higher minimum balance requirements than share savings accounts, and money market share accounts typically allow limited transactions.

A money market share account is just that--a money market share account at a credit union or a money market deposit account at a bank, whereas a money market mutual fund is a collection of short-term debt investments held by that mutual fund.

Despite the associated risks of uninsured money market mutual funds, they're important savings and investment vehicles for many consumers.

For more information, read "Credit Unions: Safe and Sound" in Home & Family Resource Center.

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CUs write letters to editors about CUs' strength

MADISON, Wis. (9/29/08)--Credit unions nationwide are sending letters to their local media touting credit unions' strength and security.

The letters were triggered by media reports stating that consumers should place their deposits in Federal Deposit Insurance Corp. (FDIC)--insured accounts.

Credit unions' funds are guaranteed under the National Credit Union Share Insurance Fund (NCUSIF), to the same levels and safety as FDIC-insured accounts, according to a letter sent to all print and broadcast media in the Dayton, Ohio, written by Douglas Fecher, president/CEO, Wright-Patt CU, Fairborn.

The North Carolina Credit Union League noted that Allegacy FCU, Winston-Salem, N.C., was spotlighted by a local television news station concerning the safety and soundness of the credit union (use the link to watch the video).

No penny has ever been lost in an account with the NCUSIF, Allegacy CEO Ike Keener said in the video.

AmeriChoice CU, Mechanicsburg, Pa., sent a letter to the editors of local media emphasizing the credit union's safety and soundness. "Our asset base is solid and growing while our loan portfolio remains healthy with minimal delinquency. We were awarded one of the highest grades by the National Credit Union Administration (NCUA) during our last financial examination," the credit union said.

Tobyhanna Army Depot FCU, Scranton, Pa., also sent in a press release to editors. "All Pennsylvania credit unions are backed by full faith and credit of the U.S. government and the NCUA," wrote Jim Kanaley, Tobyhanna CEO.

"Credit unions are the stewards of their members' hard-earned money and take that responsibility seriously," he wrote. "Investments are made conservatively and credit unions cannot be bought and sold as commodities."

Many credit unions also posted messages to their members on their websites. UW CU, Madison, Wis., posted on its website a letter to its members, assuring them of safety and soundness. It also included the credit union's August financials. A member noted that the credit union prominently displayed the letter and the chart of the credit union's financials was "compelling."

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Leagues move to inform media, public of CU soundness

MADISON, Wis. (9/29/08)--Armed with facts about credit unions' federal insurance and credit unions' performance, the state leagues moved last week en force to inform media and the public of credit unions' strength, safety and soundness.

Their weapons: advertisements, press releases, media interviews, fact sheets and op-ed pieces.

A statement issued by Texas Credit Union League President/CEO Dick Ensweiler Thursday was published by national and international news publications MarketWatch and EarthTimes (Sept. 25). Credit unions remain well-capitalized and fully insured, and "it's important for credit union members and the public to know why they can count on the safety and soundness of their credit union," he said. (See link for full statement).

The Indiana Credit Union League has consistently sent the good news about credit unions as a safe harbor to media.

"We sent out a press release in mid-July and one again today to media across the state emphasizing that credit unions are in a good position," Indiana league President John McKenzie told News Now Friday. He wrote an opinion column in a Marion, Ind., newspaper, and a column in the September/October issue of a northern Indiana magazine, Building Indiana.

"Our top priority with the media is to further emphasize the distinction that credit unions are a bright spot" in today's financial market, McKenzie noted.

The Detroit News published an op-ed article Friday morning written by Michigan Credit Union League President/CEO David Adams, urging readers to trust the financial system and Congress during the economic crisis.

"Not all financial institutions have contributed to the crisis and not all will need government support. Michigan credit unions have not been part of the problem, but will be part of the solution," Adams said. He added that "credit unions have not taken huge risks that led to this economic meltdown" and that deposits in credit unions are insured by the federal government. (See link for full article.)

The Pennsylvania Credit Union Association (PCUA) drafted a letter to the editor/op-ed article that credit unions can customize to send local media, touting credit unions' health and safety, it said in special edition of its Life is a Highway (Sept. 25).

"We understand that credit unions and their members are deeply concerned about the current financial conditions in our country," said Jim McCormack, PCUA president/CEO. "But this is the credit unions' time to shine, and reassuring members that their credit union is strong and their deposits are safe, is of utmost importance."

PCUA urged credit unions to "post notices on your website; send a separate mailing to members; submit an article or letter to your local newspaper; place lobby signs in prominent locations; include stuffers in statement mailings; and encourage front-line staff to share the news with members they serve."

On Wednesday, Mike Wishnow, PCUA senior vice president, discussed how credit unions are weathering the financial crisis during a radio interview on Pittsburgh station WMNY. (Life is a Highway Sept. 26).

Other efforts:

Wisconsin Credit Union League worked Thursday with the Milwaukee Journal-Sentinel for an article about how Wall Street affects Main Street, which will mention credit unions' federal insurance. The league will publish an ad this week in daily newspapers in Milwaukee, Madison, La Crosse, Eau Claire, Wausau, Appleton and Green Bay. In a press release Thursday, league President/CEO Brett Thompson said, "Not only are consumers' federally insured share deposits in credit unions safe, credit unions are probably the safest depository institution in the country right now." (Use the links to the release and the ad).

The Ohio Credit Union League sent a press release Friday emphasizing that 2.6 million credit union members have insured deposits and their lending has increased despite the credit crunch. "It is important that Ohio credit union members know that they have the same protections as other financial institutions," said Paul Mercer, league president. Use the link for the full press release.

The Maryland and District of Columbia Credit Union Association (MDDCCUA), in a special FOCUS Newsletter (Sept. 25), said its Outreach Committee's fall ad campaign will focus on safety and soundness. The 30-second ads will air at top-rated radio stations in the Baltimore, Washington, D.C., and Western Maryland Oct. 6 to Nov. 23. It will place bus tail ads in Baltimore and D.C. A Google ad words and search engine plan will drive consumers to the website about credit unions.

Mid-America Credit Union Association (MACUA) reported in a Sept. 22 press release that credit unions in North Dakota and South Dakota remain safe and healthy with strong balance sheets and solid capital-to-assets ratios. "Credit unions have weathered every financial storm since the Great Depression without ever costing the American taxpayer a dime in any bailout," said Tony Richards, MACUA president/CEO, adding that credit unions avoided the mortgage market mess.

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Higher CLF cap moves forward

WASHINGTON (9/29/08)—As of Saturday afternoon, both houses of Congress have passed a government funding resolution that also contains a borrowing cap increase for the National Credit Union Administration's (NCUA's) Central Liquidity Facility (CLF) for Fiscal Year 2009.

The increased borrowing ceiling was included in a continuing resolution (CR) to keep the government funded into 2009. The legislation was approved 78-12 by the Senate on Saturday and was passed 370-58 by the House on Wednesday.

The CLF provision temporarily lifts an arbitrary $1.5 billion lending cap placed on the NCUA's liquidity facility. The increased cap would allow the CLF to lend up to approximately $41 billion to the Credit Union System.

Credit Union National Association (CUNA) Vice President of Legislative Affairs Ryan Donovan noted Saturday, "The higher lending cap has been sought by the NCUA in order to have an additional regulatory tool at their disposal, if needed, and CUNA has been working very hard over the past week to make this happen."

Donovan said that it is expected that the President will sign the continuing resolution, but, he warned, "Nothing is ever final in these closing days of Congress until it is official.

"This CR is the vehicle that will keep the federal government programs operating after October 1 until March of 2009. So, the CLF language is clearly part of a very important development."

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Wednesday, September 24, 2008

Prepaid debit: The push on college campuses

SAN FRANCISCO (9/24/08)--Because they have high levels of credit card debt, college students are being marketed a new kind of card: prepaid debit. Although prepaid debit cards have advantages for some, they're a minefield for others ( Sept. 12).

The benefits of prepaid debit cards for college students--or anyone who lacks a good credit history--are clear: There's a limit on spending up to the amount of money you've loaded onto the card. Because of the set limit, it's impossible to incur overdraft charges. You can add value to the card via direct deposit, cashing a check, or with cash. And there's no credit check or employment verification ( March 25).

However, prepaid debit cards also have drawbacks. Expect to pay fees for some or all of the following:

Card activation;
ATM transactions;
Each PIN-based debit card purchase;
Balance inquiries;
Online bill payments;
Declined transactions;
Monthly maintenance; and/or
Lack of transaction activity.

There's more. Prepaid debit cards carry fewer consumer protections than credit cards when they're lost or stolen. And the cards don't help you establish a good credit history because they're not considered a line of credit.

If you're considering a prepaid debit card, ask the issuer about policies and fees. Shop around for a card with few restrictions and low fees. One card offered by Iowa-based MetaBank charges a $4.95 monthly inactive-account fee if you don't use it for more than 90 days, and it doesn't let you use cash or checks to upload more money to the card. Like any purchase, compare before you buy.

For more information, read "Tough Times Series: Credit Savvy Is Key to Avoiding Costly Missteps" in Home & Family Finance Resource Center.

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'Take a look at CUs'--New Jersey publication

NEWARK, N.J. (9/24/08)--Those who want to own part of a financial institution without buying its stock should look at credit unions, according to Alky Danikas, lecturer of finance and economics at St. Peter's College and "Money 101" columnist for The Jersey Journal.

He encouraged readers to find credit unions within their fields of memberships, and compared their rates with those of banks.

As of Thursday, the top 50 credit unions surveyed by were charging 12.97% interest compared with the national average of 14.88% on credit cards.

Credit unions also were paying 4.3% on certificates of deposit, compared with 3.94% by thrifts and 3.33% by banks, he said (The Jersey Journal Sept. 22).

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League announces status of Galveston CUs

FARMERS BRANCH, Texas (9/24/08)--The Texas Credit Union League was still trying Tuesday to obtain a status report from two credit unions located in Galveston, the city hit hard by Hurricane Ike on Sept. 13.

They are Galveston School Employees FCU, a $5 million asset credit union with roughly 1,721 members, and Electrical Workers 527 FCU, a $1.4 million asset credit union with about 550 members.

Five credit unions, including those, have headquarters in Galveston. Two other credit unions located elsewhere have a branch in Galveston, reported the league.

The status of the five headquartered in Galveston:

Coastal Community FCU: The credit union's Galveston branch is closed, but its La Marque branch is open. It also has a satellite branch at the San Luis Hotel for all city and hotel employees only. The credit union has $36.4 million in assets and more than 89,333 members.

Electrical Workers 527 FCU: The league is working to obtain a status report. It has one branch.

Galveston Government Employees FCU: Its Galveston branch closed. The $9.5 million asset credit union has temporarily moved to a site in League City, where it is operating from a mobile unit.

Galveston School Employees FCU: The league is working obtaining a status report. It has one branch.

Island Teachers FCU: The Galveston branch is closed. It is temporarily serving members from an alternate site at Associated CU of Texas in La Marque. Island Teachers is a $605,351 asset credit union with more than 586 members.

Galveston also had branches of two other credit unions. Their operational status:

JSC FCU: Headquartered in Houston, this credit union's Galveston branch "is located in the historical strand area and took in about six feet of water," said the league. "It has 15 branches in the Houston area. All are open except for the Galveston, La Porte and Seabrook locations." The credit union has $1 billion in assets and 106,544 members total.

University FCU: Based in Austin, the credit union reported to the league that its Galveston branch is closed. The credit union has a temporary service center available at AMOCO FCU's Bay Colony Branch in Dickinson. University FCU has $929 million in assets and more than 123,578 members.

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Study: Success depends on employees' perceptions

MADISON, Wis. (9/24/08)--Credit union employees have a hard time explaining how credit unions fit into society, according to a new Filene Research Institute study that outlines connections between employees' perceptions of their credit unions and the service provided.

The institute asked anthropologists John B. Gatewood of Lehigh University and John W. Lowe of Cultural Analysis Group to study the dominant views of credit union employees toward their organizations.

Results are outlined in a newly released report, Employee Perceptions of Credit Unions: Implications for Member Profitability.

The study hypothesizes that credit union success is critically dependent on its employees and is likely to be strongly colored by employee perceptions of credit unions.

Employee attitudes influence their work behavior and their interactions with members, and play a significant role in employees' abilities to recruit new members through word of mouth, said Gatewood and Lowe.

The findings:

Employees can't neatly compartmentalize how a credit union fits into society.

Employees agree on the "credit union idea" but have difficulty explaining that idea to external parties.

Employees can identify the parts of the credit union puzzle, but they don't see how they all fit together.

"Trusted" is the highest rated characteristic attributed to credit unions.

Employees younger than 30 and those with higher levels of education are less committed to credit unions.

Significant variance exists across institutions in employee commitment and in the consensus of what a credit union represents.

"Many firms, especially in the financial services industry, present hollow claims on differentiation," said George Hofheimer, Filene chief research officer.

"But credit unions are truly different. This study indicates that differentiating factors map very well to what many people view as the ideal financial institution," Hofheimer said. "In short, credit unions have a unique story to tell, and like most really good stories, it takes time to get the pitch right."

Researchers asked employees several questions, including:

How do employees think about credit unions?
What are the areas of consensus and of disagreement?
Do knowledge and attitudes toward credit unions vary in a meaningful way?
How deep does their commitment to the ideology of credit unions go?
How is the image of credit unions projected to members?

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Go Direct: Crime month good time to switch from paper

WASHINGTON (9/24/08)--The U.S. Treasury Department's "Go Direct" campaign is again highlighting October's distinction as Crime Prevention Month as making it the perfect time to encourage the safety benefits of direct deposit for Social Security payments.

Entering its fourth year, the Go Direct promotional campaign urges the recipients of government benefits checks to opt for electronic delivery as a means to eliminate the risk of stolen checks and forgeries, and to reduce exposure to identity theft.

In addition to direct deposit, Go Direct is promoting its Direct Express Debit MasterCard card as another means to eliminate the risk of lost or stolen checks.

Free materials are available to help promote the safer payment options, including newsletter copy, fliers and posters, talking points and PowerPoint slides, Web banners and flashing safety lights.

The Credit Union National Association (CUNA)—a national partner of the Go Direct campaign--supports the program and backs its goals of providing a secure delivery method for those receiving benefits checks.

In addition, direct deposit saves taxpayer dollars: It is estimated that if all recipients of federal benefit checks switched to direct deposit, millions of taxpayers' dollars would be saved annually.

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Monday, September 22, 2008

Steer clear of hurricane charity scams

WASHINGTON (9/22/08)--Recent hurricanes spawned a new crop of crooks who created bogus fund-raising operations, according to the Federal Trade Commission. Know how to distinguish bad guys from legitimate charities as you dig deep to help those affected by recent disasters.

At first, these bogus charities look legitimate and even may contain similar names to organizations you're familiar with. Some fraudsters show up at your door, set up a table at the mall, send you an e-mail message, or call you at home.

The Federal Trade Commission and offer advice to make sure your donation dollars benefit the victims rather than line the pockets of scam artists:

Put up your guard before you pull out your wallet. Crooks time their appeal to coincide with hurricanes and other natural disasters. Don't be swindled by a look-alike scam. A safe bet--if you want to give to a legitimate charity--is to stick with a familiar organization like the American Red Cross.

Check it out. If you're not sure whether an organization is legitimate, take time to investigate. The Better Business Bureau Wise Giving Alliance rates more than 600 different charities. Visit or call 703-276-0100.

Ask about administrative costs. The Better Business Bureau suggests giving to charities that allocate at least 65% of your donation to help victims. If administrative costs are higher than 35%, you may wish to donate elsewhere. And if the organization claims to allocate 100% of your donation to help victims, this is a red flag. All organizations have some fund-raising and administrative costs.

Be cautious when giving online. Phishers--who want to trick you into handing over personal and account information online--can create organizations overnight that sound legitimate. Do your research, particularly before providing payment information.

Write a check. Cash is easily lost or stolen, and you should never give credit card or account information unless you're sure the organization is legitimate. A check provides you with a record of your donation, but make the check out to the beneficiary, not the solicitor.

Get a receipt. Make sure it states that your contribution is tax-deductible.

For more information, watch the video, "Phishing: Don't Take the Bait," in Home & Family Finance Resource Center.

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Business Week: CUs have become the FI of choice

NEW YORK (9/22/08)--An article in Business Week notes that credit unions are now the "financial institution of choice" for more people and small businesses.

The article by Karen E. Klein in the "Smart Answers" section discusses how small business owners deal with today's financial market crisis. It offers guidance for business owners on banks, credit unions, business loans, labor, pricing, insurance and equity investments ( Sept. 19).

"In the past decade, credit unions have become the financial institution of choice for increasing numbers of individuals and small businesses. They're also making more small business loans than ever before," says the article.

It features California and Nevada Credit Union League President/CEO Bill Cheney responding to a statement by an expert concerned over losses in the housing market in California and Florida.

Cheney noted that "a couple" of credit unions in California had some difficulty due to the housing crisis, "but those have been addressed, and they've merged with healthy financial institutions.

"Overall, the great majority [of credit unions] are well-capitalized, in excess of government guidelines on capitalization, and most are doing well considering today's financial situation."

Cheney emphasized that credit unions continue to make loans to members who are creditworthy and said they are getting "a lot of calls and interest from our members. They're asking about the availability of their credit lines and about deposit insurance."

Cheney encouraged members to call, adding, "they'll likely find that local institutions are doing much better than the larger ones." He pointed out that deposits in credit unions have federal insurance, like bank deposits.

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A home inspection now could save you money

WASHINGTON (9/19/08)--A home inspection isn't just for home buyers. Even if you've owned your home for several years, having your house inspected may help you set future repair priorities and plan upgrades--and save money over the long run, according to three of the guests on Sunday's Home & Family Finance radio show.

Home & Family Finance airs Sundays at 3 p.m. EDT on the Radio America Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network.

The Credit Union National Association (CUNA) and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites.

Sunday's show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:

"Going Buggy? Hire a Pest Control Firm," with Greg Baumann, senior scientist and technical director, National Pest Management Association, Fairfax, Va.;

"Get Your Home Inspected," with Nick Gromicko, founder and director of public relations, International Association of Certified Home Inspectors, Boulder, Colo.;

"How to Hire a Home Improvement Contractor," with Renee Rewiski, president, National Association of the Remodeling Industry, Des Plaines, Ill.;

"Declutter and Organize Your Home," with Marcia Weuve, owner, Impact Solutionz: The Organizing Specialists, Austin, Texas; and

"How to Zap Your Home Electricity Expense: Listener's Best Money Management Tip," with Susan Tiffany, director of personal finance information for adults, CUNA, Madison, Wis.

Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; Visa; and Western Corporate FCU and its member credit unions.

For more information, read "Find a Reliable Pest Contractor" in Home & Family Finance Resource Center.

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Donations pour in, Texas takes stock of Ike damages

FARMERS BRANCH, Texas (9/19/08)--Houston area credit unions are still assessing damages, credit unions are donating funds for disaster relief, those in the ATM industry are reporting their business continuity plans worked, and all are anxious for the power and utilities knocked out by Hurricane Ike to return to the grid.

Of the 177 credit unions affected by Hurricane Ike last weekend, 12 still were not operational at the close of the business day Wednesday, said the National Credit Union Administration (NCUA).

The Texas Credit Union Foundation (TCUF) reported Thursday that to date, it had received about $65,000 in its Disaster Relief Fund.

Of that amount, $25,000 was donated Wednesday by Southwest Corporate FCU, which is headquartered in Plano, Texas. "We are proud to be part of this caring and supportive credit union community, and we hope and pray for a quick recovery for everyone affected," said Southwest Corporate President/CEO John Cassidy.

The amounts collected do not include pledges, which are expected to flow in the next several days, said TCUF. Already TCUF has issued more than $32,000 in grants to credit union employees in the affected area to help begin rebuilding.

Texas Credit Union League President/CEO Dick Ensweiler and a small contingency of the league team will visit the affected areas next Wednesday through Friday, said the league.

"It is through the commitment and dedication of credit union employees and volunteers that the majority of the 180 credit unions in the affected area are at least partially--if not fully--operational today, less than one week after Hurricane Ike ravaged numerous communities in Southeast Texas," Ensweiler said Thursday.

"They have put their personal hardships aside so that they can be there for their members, who themselves have suffered great losses. Now it's our turn--we must be there for them in this time of great need," he said.

The league posted a video message from Ensweiler on its website at

Jill Pharr, executive director of the foundation, noted donations increase by the hour, but so do the requests for emergency grants.

"As more and more people are finally able to return to their homes and assess the damage, we anticipate a much greater need for emergency grants," Pharr said.

Credit unions in Texas can donate directly to the TCUF Disaster Relief Fund. Those in other states can donate through the National Credit Union Foundation's CUAid. See the link for details.

Two Houston-based electronic funds transfer networks--Pulse and Cardtronics--said they experienced little disruption in business operations from Ike, thanks largely to their business continuity plans (ATM & Debit News Sept. 18).

Their plans included transferring key operations and personnel to cities further inland.

Cardtronics moved its key operations and personnel to Dallas and Portland, Ore. Its Houston headquarters was not damaged and the company planned to move back to Houston this week.

Pulse, which processes transactions for 4,500 banks and credit unions, switched its processing to its Dallas facility. The company did not know whether its leased facility in Houston was damaged.

The hurricane disabled 327 ATMs owned and operated by Cardtronics in the Houston and Galveston areas. The machines were down largely due to electrical outages and downed communications lines. The company expects the ATMs to return to service soon.

According to a league update Thursday morning, all of downtown Houston and areas harder hit on the east side of Houston, such as LaPorte, Pasadena, Baytown and Galveston, likely will see power restored sometime after Sept. 22.

"Some areas are so significantly hit that power restoration to existing structures may still be several weeks off," said Rick Grady, vice president of marketing, public relations and communications at the league. Entergy, which supplies electricity to the eastern part of the state, indicated that restoration would be near completion by Oct. 6. However, the Bolivar Peninsula, Sabine Pass, and portions of Port Arthur are still flooded and there is not estimation on completion time for those locations, Grady said.

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CNN, Forbes on CUs: 'Grab them while you can'

ATLANTA (9/19/08)--"If there's a calm in the economic storm, it may be credit unions, whose investors are sleeping through the night," reported Susan Lisovicz of CNN Thursday during an interview with Neil Weinberg, senior editor of Forbes Magazine.

"We've had mergers and bailouts and a lot of us are nervous. Tell us why we should take a second look or in some instances a first look at credit unions," asked Lisovicz, amid banner headlines that said, "Credit unions weather rough seas."

Weinberg's answer focused on two reasons why "credit unions are a safe harbor":

Credit unions are operated as a "stable and profitable business, taking deposits from you and me through our savings and checking accounts, and lending out money for car loans, which earns a spread that is profitable."

Most credit union accounts are federally insured by the government up to $100,000.

"They tend to be conservatively managed and federally insured, which in this day and age is what you want," advised Weinberg.

He explained that through lobbying in Washington, credit unions have "managed to open the doors of membership quite a bit" and in many cases a person related to someone in an affinity group can join a credit union.

"You want to jump on board," Weinberg advised.

When asked what is it about credit unions that doesn't lead to the same kind of forecast for other commercial institutions, Weinberg said credit unions haven't got into the same trouble as commercial banks that specialized in mortgages and made risky home loans.

"Typically, credit unions have federal charters and federal inspectors, with strict, tougher rules. Because they began as agricultural cooperatives, they are run conservatively. You want to go for those credit unions."

"I got the message," said the Lisovicz. "You want to go for a credit union. Grab them while you can."

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Thursday, September 18, 2008

Survey: What consumers want from their FI

BELLEVUE, Wash. (9/18/08)--More than two in five credit union members and bank customers say they would prefer a change in the environment at their financial institution, according to a survey conducted by Coinstar Inc. in partnership with Kelton Research.

Of the survey respondents, 43% said they prefer financial institutions to model their environment after retailers such as high-end coffee shops, and apparel stores known for their top-notch service and personal shoppers (Business Wire Sept. 16).

While 33% of the survey respondents don't want their credit union or bank to know them by name, 67% still prefer that personal touch. Also, 66% of respondents said they would prefer to stand in line for a financial institution teller than for an ATM machine.

Other survey results include:

Nearly half (49%) of account holders say they have at some point dreaded visiting their financial institution;

72% of financial institution customers would rather make a visit to their branch than the post office;

76% of financial institution account holders accumulate loose change at home; and

Nearly three-quarters (74%) of financial institution account holders would be likely to use a self-service coin-counting machine at their branch if offered.

Coinstar's solutions include self-service coin-counting machines.

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Staff on the job, despite devastation at home

HOUSTON, Texas (9/18/08)--The dedication of credit union employees to their mission of service to members is no more apparent than in Texas during the aftermath of Hurricane Ike.

"Their homes have been wiped out, material possessions lost, futures uncertain, and yet they still muster the strength and courage to report to work every day," said Texas Credit Union League President/CEO Dick Ensweiler, in an appeal to credit unions to assist their colleagues (see resource link).

The home of Scarlett Garsea of Neches FCU, Port Neches, was spared. She was lucky, she told the league. A loss of power is nothing compared with the hardships several of her frontline staff are experiencing, she said.

Three Neches FCU employees live in Bridge City, which was hit hard by Ike. One is a newlywed starting to build a new life. She and her husband lost everything.

At Beaumont-based Mobiloil FCU, several employees are in the same predicament, said Ensweiler. CEO Kim Heinze is living in an apartment with no power because her home was flooded by five feet of water.

However, Heinze is more concerned about her employees. A number live in Bridge City and their homes are uninhabitable. They've been allowed to enter Bridge City to assess property damages but aren't allowed to stay. Instead, they have taken refuge with family and friends.

Of the 100 or so people Mobiloil FCU employes, about one-third of the staff have reported back to work.

"If that doesn't illustrate the character of folks we have serving in our movement, I don't know what does," Ensweiler said.

Quickly following the storm's aftermath, Texas Dow Employees CU (TDECU) based in Lake Jackson, reopened all its public access branches throughout Southeast Texas.

At TDECU's Angleton branch, three employees located in the Angleton High School branch arrived early after the storm's passage. They cleaned the building and put it into order, then returned home to change clothes. Then they returned to open the branch and welcome members who needed assistance.

"This was one of many stories of employees going to extraordinary lengths to get back to their branches to serve members," according to the credit union in a press release.

Caite Blount, vice president of student lending with TDECU, is coordinating external communications for the credit union in the aftermath of the storm.

Many employees are assessing damages to their own homes. "They range from minor problems, roof repairs, to trees falling on their houses. A couple employees have widespread damage to their homes," Blount told News Now. "Most have no electricity, and yet they arrive here, ready to work. They're just fantastic."

There wasn't much chance to settle in. "The moment the credit union opened, the members were there."

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Wednesday, September 17, 2008

Half of workers on paycheck-to-paycheck treadmill

CHICAGO (9/17/08)--Nearly half of workers (47%) say they're living paycheck to paycheck just to make ends meet, up from 43% last year, according to a recent survey ( Sept. 3).

The savings situation doesn't look any better. The Harris Interactive survey, conducted on behalf of, the nation's largest online job site, also found that one out of four workers isn't putting any money into savings each month, and one out of three workers doesn't participate in a 401(k), Individual Retirement Account (IRA), or other retirement plan.

Make the most of your hard-earned paycheck:

Live within your means. To do that, develop a spending plan (budget) and track where your money goes. If you're spending more than you make, adjust your spending plan by cutting back or cutting out spending leaks.

Save your raise. If you get a 3% cost-of-living raise, allocate the extra income to savings. Then when you get your next raise, increase your disposable income by the amount of your last raise.

Save that extra paycheck. A few times throughout the year you may get an extra paycheck during the month. Allocate it to savings or to your emergency fund for a little cushion when times are tough.

Don't miss out on employer benefits. Take full advantage of pre-tax spending programs offered by your employer, and make sure you're getting at least the employer match on your 401(k). Sign up for flexible spending accounts, direct deposit, and retirement accounts.

Change your tax withholding. Don't give Uncle Sam an interest-free loan, especially if your budget is stretched too thin. Adjust your withholding so you have more cash in your paycheck now. Strive to match your tax payments with your actual tax liability ( April 3). To use the Internal Revenue Service (IRS) withholding calculator, visit and type "withholding calculator" in the search box.

Work overtime. If the opportunity exists, put in some extra hours or work an extra shift once or twice a month to pad your paycheck.

For more information, read "Tough Times Series: Payday Borrowing Pokes a Hole in Your Pocket" in Home & Family Resource Center.

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Dozens of CU employees' homes were destroyed by Ike

FARMERS BRANCH, Texas (9/17/08)--The Texas Credit Union League (TCUL) has been contacting every credit union in the area hit by Hurricane Ike last week and has learned that dozens of credit union employees' homes are destroyed.

"They've lost everything," said Texas Credit Union Foundation (TCUF) Executive Director Jill Pharr.

"Hundreds are facing significant out-of-pocket expenses to repair the damage caused by Hurricane Ike, and still others haven't even been able to return to their homes to assess damage; instead they are relying on the kindness of friends, family members or shelters for the basic necessities," Pharr said.

"Countless more have had to deplete their checking and savings accounts just to get themselves and their families out of harm's way, with expenses piling up," she added.

The TCUF is urging the state's credit unions not affected by the hurricane to come to their aid. About 200 credit unions are in the affected area, and over the next several days and weeks, Pharr anticipates the foundation will receive several hundred grant applications.

"These are our friends, colleagues and even family members who have been affected. Many are modest-income earners who, despite severe personal losses and emotional trauma, are bravely trying to get back to work while coping with this disaster," Pharr said. "I'm confident that credit unions all over state will heed this call and come to their aid. We are a direct life line and often one of their first sources of emergency relief."

Credit unions from outside of Texas are encouraged to donate through, the National Credit Union Foundation's (NCUF) online disaster relief platform, said Steve Bosack, NCUF deputy director. The platform directs 100% of donations to disaster relief grants for credit union people.

Bosack noted that in the first two business days since NCUF activated the Gulf Coast hurricane relief appeal through, NCUF has received $16,080 in donations and pledges. More information about is available at the resource link.

Credit unions in Texas are encouraged by TCUF to donate directly to to the TCUF Disaster Relief Fund, either by mail, 4455 LBJ Freeway, Suite 1100, Farmers Branch TX 75244-5998, or wire to Southwest Corporate FCU, ABA 311990511, Texas Credit Union Foundation, Account # 311900048, Reference: Disaster Relief funds. More information about emergency grants and donations is available at TCUF's website,, on the Disaster tab.

TCUL, Credit Union Resources Inc. and TCUF have contributed a total of $30,000 to the Disaster Relief Fund. TCUF has received pledges of donations from leagues and state foundations, as well as credit unions.

Credit unions are encouraged to post on their website the CUAid link, This online donation tool can be used by members and credit union employees to make secure online donations to the disaster relief fund. As with credit union donations, 100% of these donations go directly to credit union disaster victims.

"I implore our Texas credit unions to open their hearts and contribute to the Foundation's Disaster Relief Fund. Our credit union family needs us and we need to make sure they know they are not alone," said TCUL CEO Dick Ensweiler.

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Damages 'far greater, widespread,' says CUNA Mutual

MADISON, Wis. (9/17/08)--CUNA Mutual Group says that damages to credit unions wrought by Hurricane Ike last weekend are significant.

"As expected, damages caused by Hurricane Ike are far greater and more widespread than almost all other Category 2 hurricanes we've seen in recent years," said Phil Tschudy, media relations manager at CUNA Mutual.

"Ike's large size has resulted in losses from south of Galveston, Texas, through Louisiana. Although many deal with minor roof, sign and water damage, we are seeing some substantial losses in the Galveston and Houston areas ranging from major roof damage to large flood claims," he told News Now.

"We do not have reports of any main credit union locations being totaled. There are, however, a couple of branch facilities that we believe will be total losses," he said.

There likely will be more.

"Authorities continue to restrict access to some areas, which is hampering our claims inspection teams, although we have been able to get to many of the most severely impacted credit unions," Tschudy said.

"Many credit unions remain without power, and some have been unable to inspect their facilities. We expect to see more claims reported over the next several days. As more areas become accessible, our catastrophe adjusters will be visiting all locations reporting major damage," he said. "We strongly encourage affected policyholders that have not yet contacted CUNA Mutual to do so as soon as possible by calling our toll-free disaster hotline, which is answered 24/7, at 800-637-2676," Tschudy added.

Texas "will not be normal for several weeks," said Rick Grady, Texas Credit Union League vice president of marketing and communications.

Parts of Texas are without power and will be for several weeks. Because of debris and missing road systems, law enforcement and legal officials have asked evacuees not to return to the area until it is safe, the league said.

The Texas league is communicating with its credit unions through its website, onsite visits to affected credit unions and cell phones. The league website is updated regularly with the status of each credit union, and special voicemail and e-mail telephone lines have been installed so that credit union CEOs can report their condition to the league.

The Texas league also is using Twitter to get out information and is looking into adding a private messaging service to send text messages to cell phones.

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Tuesday, September 16, 2008

'Others cut and run, we stayed'

LAKE JACKSON, Texas (9/16/08)--One credit union is serving all of the credit union members and consumers of financial institutions of Brazoria County, Texas--Texas Dow Employees CU (TDECU), according to a video the credit union created and uploaded to YouTube, after Hurricane Ike hit the area this past weekend.

The video shows credit union employees working in a TDECU call center in Hallettsville Saturday to serve members affected by Hurricane Ike. No credit union member at TDECU is going without service, said TDECU CEO Ed Speed.

"When others cut and run, we stayed," Speed added.

Among the credit union employees working in Hallettsville are staff from Brazoria County, he added.

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Positive CU stories in, LA Times

MADISON, Wis. (9/16/08)--Two more and Los Angeles Times--have joined the ranks of those suggesting that consumers try a credit union.

In Friday's, an article, "Credit Unions Take on Big Banks," notes that many banks are hiking fees to make up for billions of dollars in losses.

"Credit unions, having escaped the financial crisis, are chipping away at their larger rivals' customer base," says the article. "They offer what most consumers need: good rates, low risks and personal service."

The article provides a list to consider when switching to a credit union: membership criteria, not-for-profit status, interest rates, fewer options for services and competitive advantages.

In Sunday's issue of the Los Angeles Times, Liz Pulliam Weston's "Money Talk" column addresses a question from a reader about paying off student loans with low-interest credit cards.

"Is this a smart move for the private loans? If so, how would I find such an offer? (Perhaps through a credit union?)," asks the reader. Pulliam's discussion about card rates includes: "Check your local credit union, because credit unions often offer good rates."

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Shared branches serving members of Texas CUs

MADISON, Wis. (9/16/08)--The shared branching system is working in Texas, with members of credit unions closed by Hurricane Ike getting services through several systems.

The National Credit Union Administration (NCUA) has identified 179 credit unions, with combined assets of $12.7 billion and serving 1.7 million members, that were affected by Ike.

The hardest hit areas were:

Galveston, which has five credit unions and 14,237 members;
Beaumont, which has 10 credit unions and 81,999 members; and
Bridge City, which has one credit union and 5,436 members. More than 90% of Bridge City was flooded.

More than 80 credit unions are located in Houston. Many are without power and have been damaged by wind, NCUA said.

The NCUA is working with the Texas Credit Union League and the Texas Credit Union Department to help credit unions restore service to members, the agency said.

Members have been able to access their accounts through CO-OP Shared Branching, said Craig Beach, senior vice president of marketing business development.

"It's been very successful," he told News Now. "Members that have evacuated [Houston] have found other locations through the website and by calling us."

Credit unions also are using CURe, which is a disaster recovery solution that allows credit unions to access a second virtual private network connection in the event that their data processor has gone down.

"CURe was birthed out of [Hurricanes] Katrina and Rita," Beach said. Now that disaster recovery solutions such as CURe are in place, "things have gone so much more smoothly," he said. "Credit unions and the Texas league have worked in concert to make [accessing funds after Ike] smooth for members."

Brian McCue, director of business development, Member Service Centers, said he was on the phone with and texting credit unions all day Monday. Shared Branching has been a "big piece of their disaster recovery plan," he told News Now. Credit unions on Shared Branching are happy with how much it's working so far, he added.

He also noted the large role text messaging has played in communicating with credit unions. Two weeks ago, before Hurricane Gustav hit, he collected the cell phone numbers for many credit union CEOs and other management. "Text messages are the primary means of communication," he said.

Texas credit unions that have confirmed via website that they are open:

Amplify FCU, Austin;

Brazos Valley Schools CU, Katy--all branches open except Katy, Kingsland and Rocky Creek and Missouri City;

Chocolate Bayou Community FCU, Alvin;

Cy-Fair FCU, Houston;

DuPont Goodrich FCU, Nederland--Lumberton, Jasper offices open, phone lines down;

First Community CU of Houston, all open except Sugar Land, Champions, Sam Houston, and Echo Lane;

Fivepoint CU, Nederland;

Gulf Coast Educators FCU, Pasadena, Pearland office closed;

Houston TX Fire Fighters FCU, main office drive-thru, north branch and south branch closed;

JSC FCU, Houston--Ellington, Friendswood, Park Place, Bay Colony-Dickenson, Pearland and Monument-13th Street open;

Members Choice CU, Houston--drive-thru open only;

Mobiloil FCU, Beaumont--Delaware and Jasper branches open;

Navy Army FCU, Corpus Christi;

PrimeWay FCU, Houston--Blackhawk, Greenspoint and Med Center branches closed until further notice;

Southwest Financial FCU, Dallas;

St. Luke's Community FCU, Houston;

Star of Texas CU, Austin;

Texas Dow Employees CU, Lake Jackson--call center open;

Temple-Inland FCU, Temple--drive thru only;

Texasgulf FCU, Wharton;

Transtar FCU, Houston--290 and Williams Tower offices open;

Union Fidelity FCU, Houston--alternate location at Sheetmetal Workers Local 54; and

United SA FCU, San Antonio.

According to CUNA Mutual Group, credit union policyholders with damages can contact the CUNA Mutual Disaster phone number at 800-637-2676, which is answered 24/7.

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What Fannie, Freddie bailout means for consumers

NEW YORK (9/15/08)--If you're about to buy a house, or trying to sell one, the government takeover of mortgage giants Fannie Mae and Freddie Mac may be good news. But if you're one of millions of homeowners behind on payments or if you now owe more than the house is worth, don't expect the bailout to bring much relief (The New York Times Sept. 8).

The bailout was designed to help stabilize the housing market, push mortgage rates lower and make sure that home loans remain available-- at good rates--to borrowers who have good credit and a down payment ( Sept. 8).

"The government's conservatorship of Fannie and Freddie will reduce the uncertainty in the financial markets regarding the GSE (government-sponsored enterprise) bonds and MBS (mortgage-backed securities)," says Credit Union National Association senior economist Steve Rick. "This will ensure private investors will put up capital funds for mortgages at prices households can afford."

Depending on your situation, you may want to take action now:

Move on mortgages quickly. There's no guarantee that the slight drop in mortgage interest rates immediately following the bailout will continue that downward trend.

Choose fixed over adjustable. Home buyers are advised to seek fixed-rate mortgages and stay away from adjustable-rate offerings.

Consider refinancing. If you're in an adjustable-rate mortgage and have a good credit score, ask about refinancing to a fixed-rate mortgage. If your credit score is low or you're behind on payments, though, you may not be able to make the switch.

Expect some movement in sales. The buyout is expected to make it easier for people to afford the house you're trying to sell, which is good news for sellers.

Finally, the bailout is a reminder that during rough and uncertain economic times, it pays to make sure investments are diversified. Well-diversified mutual funds, for example, help spread your risk among a variety of industries--such as financial services, health care, technology, and others--as well as among a variety of funds or securities from small, medium, large, and international companies in different industries.

For more information, read "Tough Times Series: What to Do When Your ARM Is Due" in Home & Family Resource Center.

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More text messaging scams surface

MADISON, Wis. (9/15/08)—More text-message scams aimed at draining consumers' accounts are being reported by credit unions in several states.

Here are reports from the latest wave of credit unions targeted by scams in Minnesota, Washington and Alabama:

SPIRE FCU, Falcon Heights, Minn., said consumers checking text messages on their cell phones were warned that their credit union accounts had been locked. They were told that they could fix the problem--by providing their account numbers. Once they give the numbers, the accounts can be drained by the scamsters (Pioneer Press Sept. 9).

Gesa CU, Richland, Wash., was the target of another text messaging scam, according to (Sept. 11). On Wednesday, six people in a sister station, KNDU, reported receiving the text messages, which asked them to call a number to protect their Gesa account. The report said police believe the texts are sent from Spain because money the scamsters have taken is sent there. Police noted the culprits are hard to track down because the Internet provider address used isn't from a physical location.

A credit union based in Bynum, Ala., was among several financial institutions in the state whose names were used in text messaging scams and e-mail and voicemail message scams (The Anniston Star Sept. 7).

In all cases, the financial institutions warned consumers not to answer the messages and to delete them. Financial institutions would never contact members or customers unsolicited and ask for account and other numbers.

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Study: Many employees are one paycheck from trouble

CHICAGO (9/15/08)--Many employees are one paycheck away from financial trouble, according to a study by a Chicago-based credit union and employee benefits specialists group.

Alliant CU, a $5.693 billion asset credit union, and the International Society of Certified Employee Benefits Specialists (ISCEBS) announced the results of their study on U.S. workers' personal financial situations and employers' viewpoints and involvement regarding their employees' financial lives.

A white paper, "American Workers: Getting Ahead or Just Getting By," is based on two surveys conducted in March. One polled ISCEBS member benefits specialists about their employee benefits and ability to help in their employees' financial lives. The other surveyed U.S. workers about their opinions and attitudes regarding their employers as financial partners and the extent to which their employers help out.

Key findings include:

Employer benefits such as health and retirement plans are seen as important but primarily for future rather than present needs. Many employees have financial needs that require assistance "here and now."

Employees with financial concerns spend significant work time dealing with personal financial matters.

Although employees are generally pleased with their income levels, they can't seem to save enough or get ahead financially. Half describe themselves as living from paycheck to paycheck. Less than 20% considered themselves to be financially secure.

More and more workers are financially strained by increasing financial debt.

Employees generally feel they lack knowledge about handling money.

"Financial literacy and low cost, high value financial services are keys to economic health for individuals and our economy as a whole," said Alliant CU President/CEO David W. Mooney. He applauded benefits specialists' efforts to provide financial literacy and services that deliver daily, not deferred, value.

Alliant is a financial benefit solutions provider to more than 140 employer groups and networks, and a national partner of Operation HOPE, a national foundation that provides financial education classes in public schools around the U.S.

A full copy of the white paper is available at the credit union's website. Use the resource link.

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CUs now dealing with Ike's aftermath

DALLAS (9/15/08)—Credit unions in Texas and Louisiana—those that could get to their branches--were hoping to begin assessment soon of damages wrought by Hurricane Ike during its 24-hour surge through Galveston and Houston, Texas, and Lake Charles and southwestern Louisiana Friday and Saturday.

However, the Texas Credit Union League said Sunday night that authorities were allowing only search and rescue personnel into the areas.

"Downtown Houston area is closed except to authorized personnel," said Richard Grady, league vice president of marketing, public relations, and communications. The phone lines for affected credit unions to report in their status have been quiet.

News Now learned the status of several credit unions from their websites. One credit union, El Paso Corporation FCU, said it would be closed today because of window and water damage to its sponsor's building. It expected to reopen Tuesday.

Mobiloil FCU said two of its six branches in the hurricane affected area would be open today.

University FCU said it's Galveston branch is closed. "When officials allow access to Galveston Island, UFCU will promptly assess the condition of the Postoffice Street branch."

Houston Police FCU's website said its Travis Branch would open today, but its Memorial Drive and Willowbrook branches are closed.

Beacon FCU said that most of La Porte and the surrounding areas are still experiencing power outages but all ACH transactions had been posted. "Our offices are still closed and will reopen as soon as possible."

Hurricane Ike was 600 miles wide including its outerbands--twice as wide as a "normal" hurricane. It made landfall as a Category 2 hurricane at 2:10 a.m. CDT in Galveston, bringing with it 13-foot surges, 12 hours of high winds up to 104 mph, flooding, and extensive property damages. In Chambers County alone, 50% of the home were severely damaged.

As of Sunday, at least nine people were dead and many others were missing. Millions of people were without power indefinitely, including 90% of Houston, where the wind blew out 50% of the windows in the state's tallest building, the JP Morgan Chase building. Of the area's 36 oil refineries, 13 were shut down, and the closures were already hiking gas prices at the pump.

In Texas alone, more than 176 credit unions were in 10 cities in the hurricane's direct path. They included 122 with headquarters in the city; the total doesn't include branches. Of the total, 54 credit unions that are headquartered elsewhere had at least one branch in the cities impacted.

The breakdown of credit unions in the cities:

Baytown, one credit union and a branch of four other credit unions;
Beaumont, 10 credit unions, with branches from seven others;
Clute, one credit union;
Galveston, five credit unions and one branch;
Houston, 86 credit unions and 34 branches;
La Porte, four credit unions and two branches;
Lake Jackson, one credit union;
Lufkin, four credit unions, one branch;
Orange, five credit unions and four branches; and
Port Arthur, five credit unions and one branch.

Two southwestern parishes of Louisiana—Cameron and Jefferson parishes—also bore the brunt of sea surges and wind damages. They included 32 credit unions and 10 branches of credit unions in other cities. Cities hit the hardest included:

Abbeville, one credit union;
Crowley, one credit union and one branch from another city's credit union;
Jennings, three credit unions;
Lafayette, 15 credit unions plus three branches;
Lake Charles, nine credit unions and five branches;
Morgan City, one credit union;
West Lake, two credit unions and one branch.

About seven hours after it made landfall, Ike turned into a Category 1 storm and began churning through Texas, Arkansas, and the Midwest. It will affect weather for credit unions across the U.S. this week.

"Ike remains an extremely dangerous storm that will continue to cause flooding and wind damages over the next several days," Phil Tschudy, media relations manager for CUNA Mutual Group, told News Now Sunday.

"The long duration of high winds, compounded by heavy rains, has and will continue to cause problems for credit unions. Those problems will include flooding, structural damages to buildings, power issues, and limited communications.

"Our Credit Union Protection Claims staff reported that, as of Saturday afternoon, areas hardest hit were not yet accessible," Tschudy said.

"Over the next several days, authorities have indicated they will prevent anyone from coming into the impacted areas so they can concentrate on search and rescue operations. Because of this and problems with communications, we do not expect to be able to assess the impact this storm has had to credit unions, or to contact them before Monday."

CUNA Mutual has arranged for its catastrophe adjusters to go on site to check with policyholders it can't reach by phone or who have not contacted CUNA Mutual.

"We encourage credit union policyholders with damages to contact the CUNA Mutual Disaster phone number (800-637-2676), which is answered 24/7," Tschudy said.

Credit unions in the impacted areas will be dealing with several issues this week, both immediate and for the long-term:

Getting to the credit unions to assess damages and their needs. Damages expected include wind damages such as peeled rooftops and windows out and water damage from the surge or flooding.

Coping with power, communications and utility outages. More than two million people and businesses are without power, said the league's Grady. Power is not expected in may areas for weeks, as transmission towers and power poles need to be installed first, he said. The city's water supply also had some problems Saturday, according to Houston Mayor Bill White in a press conference Saturday ( Sept. 13).

Working with a shortage of credit union staff as employees address the damages to their own homes and their family's needs, or have difficulty getting to work because of road blockages from debris, flooding and washed-out highways.

Providing alternative service to members needing emergency cash and loans. While members can access ATMs, shared branches and online banking, the power outages made it unclear how many services are working. Credit unions took cautions before the hurricane hit to check their business continuity plans to ensure minimal interruption of service.

As of Sunday night, it was not known which credit unions would be operating today. Thursday--before the storm hit--most credit unions had said they would open today.

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Friday, September 12, 2008

NCUA encourages CU readiness for Ike

ALEXANDRIA, Va. (9/12/08)—Credit unions and credit union members in the potential path of Hurricane Ike should prepare for all contingencies, including the possible interruption of some credit union operations, the National Credit Union Administration (NCUA) advised Thursday.

The advisory, released as Ike was strengthening and moving toward the Gulf Coast states, noted that the NCUA will activate, as needed, a toll-free hotline for credit union members seeking information on such things as the operating status of their credit unions. That information will also be available on the NCUA website.

The agency said it will also distribute a public service announcement to news outlets in potentially affected states in an effort to provide essential information to consumers about federal deposit insurance coverage for credit unions and how to access their credit union funds.

Credit unions in Texas and Louisiana that could be affected by Ike are advised to review their contingency of operations plans and business continuity procedures, ensuring their ability to provide financial services to their members.

NCUA encourages credit unions to ensure that in the event of an evacuation, they have taken the following important actions:

Alternate sites are identified and prepared for potential activation;

Systems are backed up and the backup data is stored in a secure location that will be accessible (i.e., outside the impact area);

The NCUA regional office is notified with the location(s) of the alternate site(s), telephone numbers, and management emergency contact telephone numbers;

Any deploying employees should be identified and prepared to take necessary data and/or equipment to the alternate site location; and

Credit unions should test their backup systems to ensure proper operation.

In addition, the NCUA advised credit union staff and members may wish to document important personal family and financial information.

It noted that the U.S. Department of Homeland Security's "Ready Campaign" (, or 1-800-BE-READY) provides information about disaster preparedness, including a link to the Emergency Financial First Aid Kit, a checklist of documents and steps consumers can take to maximize their preparedness. (See related story: Texas CUs, league brace for Hurricane Ike)

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Texas CUs, league brace for Hurricane Ike

DALLAS (9/12/08)--Nearly 100 credit unions are in the current path of Hurricane Ike, according to the Texas Credit Union League, which is helping Texas credit unions prepare for the landfall late tonight or early tomorrow morning.

"We have nearly 100 credit unions in Ike's current path, and over 800,000 consumers belong to these credit unions," said Dick Ensweiler, league president/CEO. "Fortunately, we have plans in place to handle the challenges hurricanes bring."

Thursday the league established a "credit union condition information" page on its website to assist employees of its credit unions in disseminating information to their members. It also informed CEOs of all credit unions about the procedures. Information shared will be placed on the league's Disaster Preparation website (Use the resource link).

The league's Disaster Preparation website offers up-to-date tracking of the hurricane's path; links to sites such as the American Red Cross, the Federal Emergency Management Agency (FEMA), the Texas Credit Union Department and the National Credit Union Administration; and downloadable disaster recovery documents.

Members of the potentially affected credit unions can find out if their credit union belongs to the CU Service Center shared branching network by calling 800-919-2872 or visiting its website,, said the league.

"How well you, your family, your home, or business survive a disaster often depends on how well you prepare beforehand," Ensweiler said.

"Hurricane Katrina taught us a valuable lesson on that. Communications and planning is essential, and we are committed to doing our part to ensure our member credit unions and the families they serve are prepared for whatever may come."

The league reminded credit union members in Texas that their funds are secure and insured by the National Credit Union Share Insurance Fund. "As we brace ourselves for the worst and hope for the best, the league wants members to know that it is prepared to serve as a valuable resource for all 500 plus Texas credit unions and the seven million members they serve," Ensweiler said.

As of Thursday afternoon, Hurricane Ike was still a Category 2 hurricane but was strengthening. It was expected to reach a Category 3 and possibly as high as a Category 4 before making landfall on the Texas coast. Because of its size, it is expected to produce violent weather and sea surges in states all along the Gulf Coast.

For a list of credit union closures, see the News Now story in System News, "CU closures announced in Texas."

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Thursday, September 11, 2008

Texas league prepares to aid CUs through Ike's impact

FARMERS BRANCH, Texas (9/11/08)--The Texas Credit Union League has sent out an advisory to all Texas credit union employees preparing for a potential disaster with a strengthening Hurricane Ike headed toward the state's coastline.

According to Richard Grady, vice president of marketing, public relations and communications, the advisory went out Wednesday.

The Category 1 hurricane strengthened to Category 2 as of early Wednesday evening and was expected to continue strengthening over the next 36 hours. Forecasters are predicting it will hit landfall somewhere along the Texas coast Saturday morning ( Sept. 10).

"If Hurricane Ike comes on shore as a Category 3 or larger, we may need to execute procedures in our offices to support displaced workers and credit unions," said the league advisory. "Preparations are being made at this time. Our website will carry information, as well as advisements to you and your members."

The advisory said that if the hurricane continued its current course, it would hit the Mantagorda Bay, San Antonio Bay/Victoria area on Saturday morning. However the state is preparing for the effects to be felt on Friday. The brunt of the higher winds and storm surge will be felt up to the Galveston Bay area, said the advisory.

Once on land, the hurricane would continue inland as a tropical storm, which pack winds of up to 75 mph, up to Austin.

The Texas Credit Union Department, the state regulator, advised state-chartered credit unions to "monitor this storm closely, heed warnings form your local leaders, and take necessary and appropriate precautions to safeguard property and personnel."

Credit unions in Texas have temporary authority to close offices threatened by the storm if they notify the department as promptly as possible, said the department's advisory. They also have authority to alter payment terms or grant new loans to assist members through the temporary aftermath of a natural disaster.

Credit unions impacted by the hurricane are asked to contact the regulator by phone, fax or e-mail within 24 hours after the storm to report any damages and the operational status of the credit union.

CUNA Mutual Group said it is also watching the hurricane.

"As Hurricane Ike positions itself to make landfall sometime early Saturday morning, we will continue efforts to proactively contact credit unions in the current projected path of this storm, which is currently near Corpus Christi, Texas and the surrounding area," said Phil Tschudy, CUNA Mutual media relations manager.

"Ike has proven to be challenging with its unpredictable track, and we will continue to monitor and reassess our strategy as this storm progresses," he said. "CUNA Mutual's Credit Union Protection Disaster Team remains activated and will address any storm-related losses and coordinate property-casualty relief efforts. We encourage credit unions that need assistance to contact our Disaster Phone 24 hours a day, seven days a week at 800-637-2676."

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Gustav damages to CUs less than $1 million

MADISON, Wis. (9/11/08)--Damages to credit unions from last week's Hurricane Gustav have added up to less than $1 million, according to CUNA Mutual Group. And the National Credit Union Administration reported that only a few are still not operating.

"We had reports of wind and rain damage, mostly in Louisiana, with some extension into Mississippi, and we continue to see a few claims trickle in as credit unions get back to business," said Phil Tschudy, media relations manager at CUNA Mutual.

"About 30 policyholder credit unions have submitted slightly more than 50 claims to date, with losses totaling less than $1 million," he told News Now.

"Fortunately, damages from Hurricane Gustav were far less than we expected; however, as I mentioned last week, this doesn't mean some credit unions will not have challenges ahead of them," he said.

The National Credit Union Administration (NCUA) checked the overall operating status of 211 credit unions in Louisiana and Texas affected by the hurricane. Of those, "only 13 remained non-operational Sept. 9," the agency said Wednesday, adding that 98% of credit union members affected by the hurricane have access to their accounts.

NCUA and credit unions in the Gulf Coast took a variety of proactive measures that enabled rapid recovery from the potentially disastrous Gustav, the agency said. In the days leading up to the hurricane Sept. 1 landfall in eastern Louisiana, NCUA established a toll-free telephone number to provide members with immediate access to information and assistance.

It activated backup continuity teams and provided direction on Aug. 29 through regional offices about hurricane preparations. It also released a public service announcement (PSA) for consumers to nearly 60 media outlets in the potentially affected areas.

The PSA detailed:

Federal deposit insurance coverage for credit unions;
How members could access their credit union funds in a natural disaster;
The toll-free credit union member hurricane telephone line; and
How to access NCUA via the Internet for information about affected credit unions.

Since 2006, NCUA has advised credit unions in hurricane-prone states to review contingency of operation plans and business continuity procedures to ensure their ability to provide financial services to their members, the agency said.

IT also promoted U.S. Treasury's GoDirect program, the electronic delivery of federal benefits to ensure consumers have consistent electronic access to their funds, even in a disaster.

Many credit unions came through Gustav just fine. In Louisiana, New Orleans Firemen's FCU, based in Metairie, said it was able to provide continuous service during Hurricane Gustav.

"We were able to provide continuous service to our members via shared branching and through an alliance with CUNA Mutual's Loanlink center," said Cami W. Crouchet, chief operations officer of the $122.7 million asset credit union.

"We also work with Telecom Recovery, which was a wonderful way to update our staff on what was going on," she told News Now. The credit union also updated its website several times a day with the most current information on the credit union, she said.

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Wednesday, September 10, 2008

Survey: 63 million households pay bills online

BROOKFIELD, Wis. (9/10/08)--More than three-fourths of online households pay at least one bill electronically in an average month, according to a recent survey sponsored by CheckFree (Business Wire Aug. 27).

The 2008 Consumer Banking and Bill Payment Survey revealed that online bill payments outpaced paper checks for the second year in a row, with an estimated 63.1 million participating households, up from 61 million households in 2007.

Reasons cited for using electronic bill pay include:

Going green. More than half (51%) of respondents cited the environment and paper reduction as the No. 1 reason for paying bills electronically.
Saving time.
Gaining control over finances.
Eliminating hassle of check-writing.
Saving on stamps.

The average Internet-using household pays about 11 bills a month. As comfort level and usage increases, so does confidence in security. The survey found that for households not using electronic bill-pay, concern about security is the key barrier.

To stay safe online, the Credit Union National Association Center for Personal Finance, Madison, Wis., recommends these tips:

Monitor accounts daily. The sooner you discover errors or fraudulent activity, the better. Online banking lets you check your accounts 24/7.

Change passwords frequently. Avoid easily detectable words and phrases such as birthdates, house address, mother's maiden name, children or pet names, or consecutive numbers. Instead, use "strong" passwords that contain a combination of upper and lower case letters, numbers, and symbols. Or, create a password with the first initials from a memorable phrase: "My #1 television station is Public Broadcasting!" becomes "M#1TVsiPBS!"

Watch for phishers. If you receive an e-mail requesting personal or account information, hit delete.

Look for "https." Any pages on which you will conduct any financial or personal business should have "https" at the beginning of the address at the top of every page. In addition, you should see a closed padlock on the browser frame—not within the page. An open padlock means the site is not secure.

Protect personal information. Never share personal account information in an e-mail message, unless you've signed up for secured e-mail or instant messaging through the credit union.

Shore up your firewall. Go to and install and keep updated a personal firewall and antivirus software.

For more information, read "Online Financial Sites Ask Questions to Protect Privacy" in Home & Family Resource Center.

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Teen credit tied to GPA, quiz, parent consent

SWARTZ CREEK, Mich. (9/10/08)--Financial Plus FCU, Flint, Mich., is offering youth credit union accounts with cards based on grade point averages (GPAs), scores on a financial literacy quiz, and parental consent.

The program, Fine Tune$, offers youth ages 16 to 18 the opportunity to open a savings account, free checking account, and have a Visa debit card and credit card with a minimum balance of $200 and maximum balance of $500. Annual percentage rate is 5%.

Upon receiving the account, students will receive gift cards for free music downloads.

"The response has been phenomenal," Raul Alvarez, Financial Plus marketing director, told News Now.

To qualify for Fine Tune$, students must complete a 45-minute Powerpoint-based "Dollars to Downloads" training course through the credit union's website, have a 2.5 (GPA), and parental consent.

"Dollars to Downloads" teaches students how to set savings and spending goals, learn money management and credit score facts, how to write checks and keep a check register, and how debit and credit cards work. The questions for the test are pulled from the course material.

"We want to make sure teens understand the basics," Alvarez said.

If the students fail the test, they can re-take it until they pass. If they fail, they are still eligible to open a savings account. Financial Plus "doesn't give out credit cards--youth have to earn them," Alvarez said.

"The innovative part is the educational piece," he said. "It's an added responsibility they can earn--it's not automatic."

For the cards, the credit union uses a student's GPA like a credit score. "It's a good indicator," Jeannette Van Dusen, Financial Plus teller operations manager, told News Now. "Kids under 18 don't have a credit score, and we want to show them how important it is [to have a good score.]"

Parents also must sign a consent form for students to receive a credit card. When students receive their first credit card statements, they are invited to the credit union to talk with their personal financial representatives about how to read the statements.

"We're finding that kids love fast food--especially that fast food restaurants take Visa," he added.

Financial Plus sends out text message reminders to students about the statements, and can also send out messages if a student's account drops below a certain limit. "They're notified immediately if something happens to their account," Van Dusen said.

Financial Plus also is appealing to students through music by allowing them to receive more free downloads referring friends. "Kids are defined by their music," Alvarez said. "We're trying to make sure we're staying with them."

Alvarez recently went to a local school, Swartz Creek High school, to promote FineTune$ during orientation. The credit union handed out Krispy Kreme doughnuts to students and talked to them about the program.

Financial Plus has received some comments about the risks involved with giving teens credit cards. But Alvarez said the teens are bombarded with credit cards at college campuses, so "we want to make sure they're ready for that," he said.

The credit union also will transition youth members into full-fledged memberships once they turn 18, he added.

The credit union partners with Swartz Creek High School to teach financial literacy and recently installed an ATM in the school's cafeteria. The credit union also expanded its charter to two other counties, and expects FineTune$ and its financial literacy programs to grow, Alvarez said.

"The parent, financial representative [from Financial Plus] and the teen--those pieces work well together," he added.

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CU/bank plan merger, league to discuss other options

AUGUSTA, Maine (9/10/08)--KV FCU and Kennebec Savings Bank, both based in Augusta, Maine, Monday announced they are discussing a proposal to merge the credit union into the bank. The Maine Credit Union League is taking action to discuss other viable options first.

"The Maine Credit Union League and our member credit unions are committed to the credit union charter and remain resolute in our belief that the credit union charter provides by far the best option for credit union members," John Murphy, president of the league, told News Now Tuesday.

The league board Tuesday "unanimously voted to establish communications with KV FCU officials to consider other viable options available to the credit union and its membership," he said. "A meeting for this purpose has been scheduled for later this week, and it will determine the future direction we will take in this process," Murphy explained.

The merger proposal was announced by Beverly W. Beaucage, president/CEO of KV FCU, and Mark L. Johnston, president/CEO of the bank.

KV FCU's board is scheduled to vote Oct. 14 on a proposal to convert to a federal mutual savings bank. Immediately following the conversion, the credit union would merge into the bank, said the credit union's website.

Kennebec Savings Bank is currently a state-chartered mutual savings bank; however, at the time of a merger it will have converted to a federal savings bank charter.

The announcement begins a process of scrutiny, legal postings and comment periods, with votes by the directors and members of the credit union, the trustees and corporators of the bank, and regulators.

The credit union noted that the conversion and merger would significantly expand its capacity to meet the current and future needs of members.

"We've continued to grow steadily since 1962 while maintaining a strong capital base and steadfast focus on member service," said Beaucage in the press release.

"Our board determined that the long-term goal for KV was to build and maintain a strong presence in the Kennebec Valley offering our members a wide variety of financial services," she said. To accomplish this, "it makes sense to consider combining our efforts with a local institution that has similar values."

KV Board Chair Richard Tardiff said, "A union like this could allow us to capitalize on each others' strengths to make the best financial institution going forward."

Kennebec Savings Bank was chartered in 1870, making it one of the oldest mutual savings banks in the state. KV FCU was chartered in 1962 as St. Augustine's FCU. Its county charter allows for membership in two counties--Kennebec and Somerset. It has more than $51 million in assets.

Both institutions are familiar with the merger process, they said. KV acquired Messalonskee Regional FCU in 1992 and Kennebec Health Systems FCU in 1993. The bank combined with Waterville Savings and Loan in 1995.

"With all the changes happening in the financial services industry, this union of two longstanding and respected local financial institutions could provide the greatest opportunity for improved services and choice for residents in the Greater Kennebec Valley," said Johnston.

If the credit union board approves the conversion/merger proposal, the proposal will be submitted to KV FCU's membership for a vote following a notice period of at least 90 days, the credit union said.

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Tuesday, September 9, 2008

CU staffer helps get money for water to El Salvador

CORVALLIS, Ore. (9/9/08)--A staffer at OSU FCU, Corvallis, Ore., who told a member that "my job is to serve, not turn away," didn't know it at the time, but his service has resulted in good drinking water for 100 residents in El Salvador.

Andrew Krasney, an employee at the university branch, received kudos from Rob Hess, treasurer of Engineers Without Borders at Oregon State University (OSU), who wrote the credit union a letter of thanks, according to the Credit Union Association of Oregon (Outlook September).

Hess had been a member of OSU FCU for about four years and had never needed to use services other than basic savings and checking accounts, he wrote.

"However, recently I have had to perform a series of international wire transfers summing to several thousand dollars," Hess said. One transfer "had to be performed within a short time frame, but only after a pending direct deposit showed up in my account, which, unfortunately, would happen when I was out of town.

Also, they were unable to find wire transfer information for the receiving bank. Hess said he feared the circumstances would prevent the transfer

But Krasney told him, "My job is to serve, not to turn away." The staffer "backed up those words by finding a way to help me get the money where it needed to be when needed," Hess said.

Krasney didn't know the money wired was for an international aid project being undertaken by the OSU chapter of Engineers Without Borders. Hess was sending money to El Salvador to buy materials to build a system for fresh, clean, reliable drinking water to more than 100 residents of Las Mercedes and El Naranjito, two rural communities.

"Without Andrew's help, this system could not have been implemented, and the residents of Las Mercedes and El Naranjito would remain without a reliable source of good drinking water," the letter said.

Hess applauded Krasney "for his hard work and his willing, can-do attitude. Not only am I and the rest of EWB-OSU grateful to him for his help, but so are the 100 or so rural Salvadoran coffee farmers whose daily lives will be improved, in part due to Andrew's good work."

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Do better job of touting difference, CU execs told

FARMERS BRANCH, Texas (9/9/08)--Credit unions need to do a better job of touting their difference, Ron Galloway, author and speaker, told credit union leaders at the Texas Credit Union League's Leadership Conference and Visionary Expo Friday.

Credit unions have proven themselves to be the most responsible financial institutions since 1930, he said. "You have a fabulous story to tell, but you aren't getting your message out there. People don't know about you," he added (LoneStar Leaguer Sept. 8).

Tom Dorety, CEO of Suncoast Schools FCU, Tampa, and chairman of the Credit Union National Association, said credit unions need to emphasize their uniqueness.

Chuck Wilson, managing principal, Banking Industry Group Inc., said everyone at credit unions--from front-line staff to management--can spread that message.

He also noted that if directors and employees can't communicate to membership the reasons why the credit union is different, members don't have an incentive to stay. "Your board of directors and employees must continuously and actively find ways to tell your story and help your members," he added.

"Is your organization committed to providing the level of service that sets you apart from the competition?" he asked.

He followed up with other questions:

Does the credit union have a definition of quality member service that all employees know and understand?

Is its quality standards practiced by each department in the credit union?

Is there planned, ongoing measurement of quality standards and timely feedback to employees about the results? and

Is the performance of the quality standards directly linked to the pay of each individual employee through the credit union's performance appraisal process?

Credit unions may want to re-evaluate whether they are committed to providing the level of service that will set it apart from the competition, he concluded.

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Bailout may affect CU mortgage demand slightly: CUNA

MADISON, Wis. (9/9/08)--The government's bailout of mortgage giants Fannie Mae and Freddie Mac may impact credit unions' mortgage portfolios with a slight slowdown, according to Bill Hampel, chief economist at the Credit Union National Association (CUNA).

On Sunday, the U.S. Treasury announced it would place Fannie and Freddie into a government conservatorship because failure of either would be chaotic to the market

"The Treasury's action will restore some normalcy to the conforming segment of the mortgage securities market," Hampel said.

"In particular, conforming mortgages will become more available than they have been in the past several weeks.

"The rates at which credit unions will be able to sell loans to Freddie or Fannie will come down a bit, and other lenders will become more active than they have been recently," Hampel told News Now.

"This might slow the demand for mortgage loans slightly at credit unions," he said.

Fannie and Freddie own or guarantee nearly half of the $12 trillion in U.S. mortgages. (USA Today Sept. 8).

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Monday, September 8, 2008

Consumer group: Be diligent in filing disaster claims

MADISON, Wis. (9/8/08)—If your home was damaged by Hurricane Gustav—or any recent disaster—it pays to be diligent when you file a claim, and know where to go for help if your claim is denied.

Expect to pay a larger share of the losses, according to a Sept. 3 press release from the Consumer Federation of America (CFA), Washington, D.C. Insurers have been raising deductibles and imposing other policy limitations following the devastation of Hurricane Katrina in 2005. Some of those restrictions may be buried in the fine print.

Know the steps involved to get a fair claims payment from your insurance provider:

Document it. Start a notebook immediately after you experience any kind of property loss. Include all contacts you make with your insurance company, an inventory of your possessions, repair estimates, receipts from emergency repairs, and receipts from temporary housing expenses.

Double-check your deductible. If you agreed to a $1,000 deductible and your damages are $975, you won't be able to dispute a claim that's denied for that reason.

Read the fine print. Look for "hurricane deductible," which may be a percentage of the value of your home, and which may not have been disclosed to you properly. CFA advises you consult an attorney if you think you've been misled.

Look for replacement-cost restrictions. Some policies contain a limit on replacement cost payments if your house is destroyed. For example, you may be restricted to receiving 25% above the face value of the policy if a major storm caused a high demand for insurance payouts, leaving you short if construction costs are higher than the capped amount to which you're entitled.

File the claim. Contact your agent immediately, separate damaged from undamaged property, make a list of all items that are damaged or lost, and then file the claim. For floods, file a "Proof of Loss"—your official claim for damages—within 60 days of the flood. Go to for more information.

If your claim is denied or if you believe the offer is too low, CFA recommends you:

Talk to senior staff. If you've kept good records, the insurance company will know you're serious--and you're in a better position to push for a better offer.

Contact your state insurance department. Share your detailed notes and ask if the state will intervene on your behalf. Find contact information for your state insurance department in the Consumer Resource Handbook at

Get a lawyer. You may be entitled to additional compensation if the insurance company acted in "bad faith" when determining your award, or if you were treated particularly badly.

In addition, the Federal Emergency Management Agency (FEMA) can answer questions you may have. Visit the website at, or call 800-621-FEMA (800-621-3362).

Even if you haven't been a victim of a disaster, check your policy. Determine if your belongings are insured for actual cash value—replacement cost of an item minus depreciation—or replacement cost. Although it costs more, replacement cost allows for the amount it would take to replace items at current prices. You may decide that purchasing replacement cost coverage is worth the extra cost. Talk to your insurance agent.

For more information, read, "Use Software to Create Property Inventory," in Plan It: Retire Ready Toolkit.

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CUs on the Tube: Ent FCU's podcasts focus on education

COLORADO SPRINGS, Colo. (9/8/08)--Ent FCU, Colorado Springs, Colo., has launched a free financial education podcast series on its website,

The podcasts provide information on avoiding foreclosure and understanding credit unions. Future podcasts on National Credit Union Administration insurance questions and home-buying will be added in the future. The credit union hopes to produce a new podcast each month.

More than 230 individuals have downloaded the podcasts, and more than 20 have subscribed to receive them as they become available.

Ent has $2.5 million in assets.

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All eyes on Ike, CUs return to biz after Hanna

COLUMBIA, S.C. (9/8/08)--Credit unions near the Lower Florida Keys Sunday were preparing for the outer bands of Hurricane Ike while credit unions along the eastern seaboard from the Carolinas to New England were mopping up for business as usual today after Tropical Storm Hanna moved through Saturday.

Hurricane Ike, a Category 4 hurricane, was progressing toward eastern Cuba Sunday and its path--whether over land or over water--will determine if it loses strength and where it turns northward into the Gulf of Mexico.

Meanwhile credit unions along the Gulf Coast are watching the hurricane. Its direction today and Tuesday will determine which states go on full alert in a region that experienced Hurricane Gustav just a week ago and is still dealing with power outages from that storm.

Credit unions along the eastern seaboard are open for business today after Tropical Storm Hanna failed to strengthen. Still, the storm buffeted some areas of North Carolina with 77 mph winds and several inches of rainfall from South Carolina to New England. Its major impact, besides flash flooding in some areas, was to delay travelers' flights.

Early reports from three credit unions at Myrtle Beach and Georgetown, S.C., near where Tropical Storm Hanna went ashore at 3:15 a.m. EDT Saturday, indicated no damage or problems from the storm, the South Carolina Credit Union League reported to News Now Saturday.

Those credit unions are Carolina Trust FCU and AVX-MB FCU, both based in Myrtle Beach, and Georgetown Kraft CU, based in Georgetown. All three reported no damage or problems and said they will open today for business as usual.

The rash of hurricanes--Fay, Gustav, Hanna and Ike--have prompted credit unions to review their business continuity measures.

Just Friday three credit union service organizations (CUSOs)--Financial Service Centers Cooperative Inc. (FSCC), Ongoing Operations (OGO) and Digital Dialogue, a subsidiary of PSCU Financial services--announced they are working together to assist credit unions in disaster planning.

"With Hurricanes Hanna and Ike moving in, we are very concerned that as members are being evacuated, they still have access to their credit union accounts," said FSCC President/CEO Sarah Canepa Bang.

"There is no question that keeping credit unions up and running during disasters broadens the public's trust of our institutions. Our contribution to disaster recovery allows us to tell the cooperative story to members in a deeply meaningful way."

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Bankruptcy law violates lawyers' free speech, says court

WASHINGTON (9/8/08)—A provision in the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act that prohibits lawyers from advising clients to take on more debt prior to filing for bankruptcy protection has been struck down by a federal appeals court in St. Louis, Mo.

The 8th U.S. Circuit Court of Appeals, ruling 2-1, concluded that attorneys who provide bankruptcy assistance to debtors are debt-relief agencies as defined under the Bankruptcy Code. In addition, the court also concluded that the particular section of the Code that restricts debt-relief agencies from advising potential debtors about incurring additional debt prior to filing bankruptcy is unconstitutional as to attorneys.

Calling credit unions' attention to last week's ruling, Mike McLain, Credit Union National Association (CUNA) assistant general counsel and senior compliance counsel, said the ruling underscores the need for credit unions to continue working with their members who may be facing financial hardships by continuing to offer debt consolidation loans and working with members to lower payments and interest rates on existing loans rather than file bankruptcy. "There are times when it will be in a member's interest, for example, when he or she is facing the threat of bankruptcy, to consolidate debt at a lower interest rate and with lower payments, and credit unions can help with that," McLain said.

He said the court ruling will make it likely that more consumers get similar advice from their attorneys. However, in some instances debtor's attorneys may advise their clients to skip certain loan payments or to restructure their debts in a manner that may be harmful to credit unions.

To protect themselves, McLain said, credit unions must be aware of the laws and actions they can pursue before a member files bankruptcy as well as their rights and the actions they can pursue under bankruptcy law after a member files bankruptcy.

The court ruling applies to the following states: North Dakota, South Dakota, Nebraska, Minnesota, Iowa, Missouri, and Arkansas.

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