Friday, October 31, 2008

NCUA plans increases to 2009 budget, staffing

ALEXANDRIA, Va. (10/31/08)--The National Credit Union Administration's (NCUA) 2009 budget is expected to increase 15% to $182.9 million and add 85 additional staffers to accommodate program modifications "necessary to address the current turbulent economic environment," said NCUA Executive Director Len Skiles yesterday.

During 2009, the overhead transfer rate is projected to be 55% and the operating fee is expected to increase 10% to oblige increased expenditures, according to Skiles. He spoke during the NCUA's Eighth Annual Budget Briefing and Public Forum held Thursday in Alexandria, Va.

The most significant NCUA program changes under consideration would add additional staff, implement a 12-month examination cycle, develop a national examiner team to conduct high-risk exams, and centralize credit union chartering in 2009.

NCUA said it believes it is "imperative to expand its examiner staff and develop a cadre of well-trained experts as credit unions are faced with unprecedented liquidity pressures, increased interest rate risk, due diligence efforts, concentration risk, and additional governmental requirements."

NCUA's proposed budget includes $12.8 million to hire and train:

100 additional examiners;
Five problem case officers;
Five risk management officers; and
Additional support staff.

Pay and benefits for the entire staff are projected to increase $14.5 million or 12.3%. Travel expense is expected to increase $6.9 million or 44.7% to accommodate a 12-month examination cycle and expected inflation pressures, said Skiles.

The NCUA Board is scheduled to consider the budget at its Nov. 20 meeting. Use the resource link below to access the NCUA budget briefing PowerPoint presentation.

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CUNA pushes for CU asset relief plan

WASHINGTON (10/31/08)—Although the need may be modest, credit unions should have their own credit union-funded troubled-asset relief program through their federal regulator, the Credit Union National Association (CUNA) proposed Thursday.

Testifying at the National Credit Union Administration's (NCUA's) eighth annual public budget briefing, CUNA reported that credit unions, despite the current economic upheavals, are generally in good shape with overall net worth around 10.5% of assets.

Tom Gaines, chairman of the CUNA Examination and Supervision Subcommittee, and president/CEO of the Tennessee Credit Union League, tells the three-member NCUA Board that CUNA believes any potential capital deficiency among credit unions due to the financial meltdown is likely modest--given that overall credit union net worth is about 10.5%. (Photo provided by CUNA)

Still, a small number of credit unions have become "collateral damage to the collapse of housing prices in some markets." Those cooperatives should be able to seek assistance either through the U.S. Treasury Department's Troubled Asset Relief Program (TARP) or a similar plan administered by the NCUA just for credit unions. Currently the Treasury plan, authorized under the 2008 Emergency Economic Stability Act, does not include credit unions or other mutual institutions.

Tom Gaines, chairman of the CUNA Examination and Supervision Subcommittee, testified on CUNA's behalf. Gaines is president/CEO of the Tennessee CU League.

Gaines also made the following points at the briefing:

CUNA continues to support full insurance coverage for noninterest bearing transaction accounts;

Credit unions are concerned about an insurance premium. The NCUA board should closely monitor this issue and provide credit unions as much advance notice as possible if a premium assessment is likely;

The NCUA may need additional staff to handle problems. CUNA does not oppose additional staffing, but requests the agency make no unnecessary additions; and

The NCUA has improved its handling of the overhead transfer rate issue, but CUNA maintains it is still unclear how insurance-related costs are distinguished from supervisory ones.

Tom Gaines, chairman of the CUNA Examination and Supervision Subcommittee, and president/CEO of the Tennessee Credit Union League, chats with NCUA Board Member Gigi Hyland during a break in yesterday's NCUA Budget Briefing.

Gaines also noted that CUNA is currently completing a survey on regulatory examinations and share the results with the NCUA and the National Association of State CU Supervisors.

"We already know that credit unions are raising concerns about examiner pressure regarding return on assets (ROAs)," Gaines said Thursday. "NCUA should continue to provide training to examiners on communications and ensure board members' views are reflected in examiner actions."

He added that credit unions continue to seek more regulatory guidance on Bank Secrecy Act issues.

In concluding, Gaines acknowledged that the country's economic woes will make the coming year will difficult for credit unions and he said CUNA appreciates the regulators' efforts to "contain cost and reduce regulatory burden."

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Banks' fees at all-time highs, says new study

NEW YORK (10/31/08)--Banks are taking it on the chin in's latest fees survey, which concludes fees for ATM surcharges, checking account fees and monthly service fees are at all-time highs.

Some fees have outpaced inflation, told (Oct. 29). The 2008 Checking Study surveyed interest-bearing and noninterest-bearing accounts at 249 banks and thrifts in the largest 25 metro areas.

The study found:

ATM surcharges--the fee the ATM-owning bank charges to nonaccount holders--rose to $1.97, about 11% more than the $1.78 charged last year. The cost of using a foreign ATM was $1.46, up from last year's $1.25. That puts the total average cost of using an out-of-network ATM at $3.43 per transaction. Bounced-check fees rose 2.5% this year, to $28.95 per check.

In interest-bearing accounts, monthly service fees hit a new high of $11.97 on average. Minimum balance requirements also set a record with a minimum average of $3,461.84 required to keep an account at the bank open.

For noninterest-bearing accounts, the reverse was true. Monthly service fees for these accounts hit a new low--at $1.96 and their minimum balances were a low of $109.26 average balance required.

Online banks had higher average minimum requirements to open either an interest-bearing checking account or noninterest-bearing account than a brick-and-mortar bank. For interest-bearing accounts, online banks required an average $650.81, versus $376.75 at a traditional bank. For noninterest-bearing accounts, online banks required $133.33 while traditional banks required $82.71.

Credit union accounts are not included in the survey.

The news comes at a time when banks are doing everything they can to make up revenue gaps from market exposures and rising credit costs stemming from lending, said (Oct. 27).

Large banks are raising some account fees to record levels at a time when more consumers are struggling to pay bills, USA TODAY Oct. 30) noted.

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September CU loans up, savings down

MADISON, Wis. (10/31/08)--Credit unions maintained a strong level of real estate lending in September, along with increased year-to-date loan growth compared with last year's pace. However, flagging consumer confidence and fears of a prolonged recession likely will result in weak consumer lending in the fourth quarter, said a Credit Union National Association (CUNA) economist.

Credit union loans outstanding increased 0.8% in September and 6.2% over the first nine months of 2008, compared with 4.9% during the same period last year, according to the CUNA monthly sample of credit unions.

Home equity loans led growth (2.5%), followed by adjustable-rate mortgages (2.2%), fixed-rate first mortgages (1.1%), used-auto loans (0.9%), unsecured personal loans (0.5%) and new-auto loans (0.4%).

Fixed-rate first mortgages and adjustable-rate mortgages had the highest year-to-date increases, 15.1% and 11.8%, respectively.

"Credit unions continued to do well in real estate lending during the month of September," Steve Rick, CUNA senior economist, told News Now. Fixed-rate first mortgage loan balances rose 1.1% in September and 3% for the third quarter. Year-to-date total loan growth came in at 6.2%, up from last year's 4.8% pace, Rick said.

"Falling consumer confidence and expectations of a deep and prolonged recession will keep consumer lending weak in the fourth quarter," he added. "However, with banks tightening their mortgage loan underwriting standards, credit union real estate lending will continue to dominate credit union loan portfolio growth."

Though credit union savings balances declined 0.9%, to $685 billion in September from $691 billion in August, they rose 5.1% for the first nine months of 2008.

Individual retirement accounts increased 1.5%, while share drafts (7.3%), money market accounts (0.6%), regular shares (0.3%), and one-year certificates (0.4%) declined.

With loan growth increasing and savings growth decreasing, the loan-to-savings ratio increased to 84.3% in September from 83% in August.

The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--decreased to 14.6% from 15.5% in August.

Credit unions' 60-plus-day delinquencies increased slightly to 1.1% from 1% in August.

The movement's overall capital-to-asset ratio remains at 11%, with the total dollar amount of capital at $90 billion.

"The Bureau of Economic Analysis reported economic growth of negative 0.3% in the third quarter," Rick said. "Consumer spending fell 3.1% on a seasonally adjusted annual rate." Spending on durable goods--furniture, appliances, autos--fell by 14.1%.

Credit union new-auto and credit card lending reflected the spending slowdown. Credit card balances rose only 2.3% in the third quarter, down from last year's third-quarter pace of 4.7%. New auto loans rose 0.5% versus last year's third-quarter pace of 1%, Rick added.

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Recession severity depends on credit markets, says Hampel

PLANO, Texas (10/31/08)--Like a Halloween horror story where tension mounts, the worst of an economic recession in the U.S. is still to come, Credit Union National Association Chief Economist Bill Hampel told the Southwest Corporate FCU's 31st annual Economic Forum this week in Dallas.

"If credit markets remain tight, we're likely to have a severe recession like the early 1980s. If credit markets ease within a month, the recession will be milder--like 1990 or 2001--but we'll have a slow recovery," Hampel said.

"However, this is not a depression like the 1930s," he continued. "Wall Street is in much worse condition than Main Street."

But the huge contraction in consumer wealth that has occurred over the past two years will take time to reverse, he said. The ratio of household debt outstanding to annual disposable income was 125% for the first quarter of 2008. Until households start saving again, the economy will remain weak, and a "significant increase" in credit union loan delinquencies and losses will offset improving interest-rate spreads.

Hampel urged credit unions not to panic. "Let your capital cushion do its work. Credit unions have high capital in the 11% range now. Avoid penalizing your members with higher fees and loan rates and lower dividend rates just to protect your return on assets. Even if net income drops to 9%, we're still a well-capitalized industry."

Hampel projected both loan and share growth at 8% for credit unions in 2009. Other forecasts included a consumer price index of 2.5 over the next 12 months and an unemployment rate of 8% by late next year.

Nearly 500 attended the two-day Economic Forum and pre-Forum Member Business Services and Financial Management Seminars, said Southwest Corporate.

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Speaker: No wiggle room on economy for next president

FARMERS BRANCH, Texas (10/31/08)--The nation's new president--no matter who's elected--will have little wiggle room in searching for solutions to the economic problems facing the country, said a speaker at Southwest Corporate FCU's 31st annual Economic Forum.

The forum met this week in Dallas with nearly 500 attending (LoneStar Leaguer Oct. 30).

Author and economist Jeff Thredgold told the group, "Regardless of whether (Sen. Barack) Obama or (Sen. John) McCain emerges the victor, what the new president wants to do and what he can do are two different things."

"Policy changes will be limited by a large national budget, likely to exceed $400 billion this year. There is just no wiggle room for aggressive spending on new programs," he said.

Thredgold, who expects large wins by Democrats, said he did not believe there will be sufficient political stomach to undo tax cuts passed during the Bush administration. However, he predicted Congress will take action to tighten regulations in the financial industry.

"When we moved from quality of loans to quantity of loans, it was a recipe for disaster," he said, adding the situation will be addressed.

Education will be key to success in the economy as it moves forward, he said. He cited as seven critical industries of the future:

Financial services;
Entertainment; and

"And thanks to the baby boomers, we'll also see growth specifically in healthcare, financial planning and leisure activities," Thredgold said.

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Wednesday, October 29, 2008

'Good Morning America' on bank fees: Check out a CU

NEW YORK (10/29/08)--On a consumer financial segment aired Tuesday morning on "Good Morning America" (GMA) titled "Bank Fees Out of Control," viewers were encouraged to check out credit unions as an alternative to banks.

The segment featured an irate mother whose college-aged daughter was charged $650 in bounced-check fees at a bank for a $100 overdraft on her account.

GMA host Elizabeth Piper said a government study indicated that banks did a poor job of informing customers about transactions and overdraft fees.

"See if you have access to a member-owned credit union," Piper told viewers in her parting tips. "Their fees are typically way lower."

Some specific bank fees that Piper discussed:

The average bank overdraft fee is $29--a 34% increase from a decade ago, according to Multiple overdrafts mean multiple overdraft fees for the bank;

Using an ATM at a bank other than their own can cost consumers up to $3.43 per transaction;

Consumers can be charged a $15 fee to pay a bill by phone;

Copies of old checks can cost $5;

Stop-payment requests can cost $20 apiece;

Depositing a bad check from someone else can cost the depositor $12; and

A line of credit used to cover overdrafts can cost the consumer $10 plus interest every time the bank activates the line of credit.

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Tips to cool down your hot-water bill

NEW YORK (10/29/08)--Trying to reduce costs? Although you can't control gasoline and grocery prices, you can control hot water consumption ( Oct. 23).

At today's rates, hot water costs can add up to more than $1,000 a year. If you have a family, your bill could be much higher.

Begin with simple conservation measures:

Involve the whole family. Sit down and discuss ways everyone can use less water. Don't be a hypocrite--if you're harping on your kids to turn off the water while they brush their teeth, make sure you're doing the same.

Take showers instead of baths. Showering instead of bathing can save about 12,000 gallons of water a year--about $180 a year.

Set time limits for showers. Instead of hollering up the stairs each night for kids to get out of the shower, use an egg timer to help control length.

The Energy Department also recommends:

Load the dishwasher. Washing dishes by hand uses more energy and hot water than your dishwasher. Load the dishwasher efficiently and try running it less frequently. When purchasing a new dishwasher, check the Energy Guide label. Know the difference between compact and standard capacity. Compact-capacity may appear to be more energy efficient, but actually may hold fewer dishes.

Wash clothing in cold or warm water, rinse on cold. Unlike dishwashers, there isn't a minimum temp for optimum cleaning in a clothes washer. Older models can cost three times more to operate than newer models. Select a machine that lets you adjust water temps and levels. Efficient models spin-dry clothes, saving money when drying. Front loaders use less water and less energy than top loaders. Check EnergyGuide labels--a reduced capacity washer might mean you'll have to do more loads.

Lower the water temperature. Set your water heater thermostat at the lowest temperature that will provide you with sufficient hot water. For most households 120°F water should be OK--about midway between the low and medium setting. This also is a smart safety measure to avoid little hands getting burned. If you're going to be gone a few days, turn the thermostat down to the lowest possible setting, or turn the water heater completely off (American Council for an Energy Efficient Economy).

For more conservation tips, listen to the radio segment "Use and Conserve Water Wisely" in Home & Family Finance Resource Center.

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Monday, October 27, 2008

One report card that doesn't go away after high school

WASHINGTON (10/27/08)--One half of high-school seniors are unaware of the annual availability of free credit reports from the three nationwide consumer credit-reporting companies, according to a study released Oct. 22 by the Jumpstart Coalition for Personal Financial Literacy.

Because most public school systems don't require personal finance education for graduation from high school, the burden is on parents to familiarize their soon-to-be independent children about this lifetime credit "report card."

A credit report provides lenders and other legitimate users such as employers with a picture of a prospective borrower or employee's credit repayment history. Maxine Sweet, vice president of public information for Experian explains how her credit-reporting agency handles information about minors.

"If an individual's name is on an account, creditors are expected to report it regardless of the age. However, by policy, Experian does not report any account information for minors. The information that is collected is stored and updated, but suppressed. When people turn 18, the entire report is made available. Until then, we send a response saying that it's the credit report of a minor and therefore no information will be provided," says Sweet.

So, if you've helped your teenagers build a positive credit history, it will help them when they turn 18 and want to buy a car or get a student loan. "The flip side is that if they don't make payments as agreed, that history will hurt them when they turn 18," cautions Sweet.

Here's how to teach your teenager about credit reports:

Together visit the website for requesting free credit reports and review the frequently asked questions (FAQs). Pay particular attention to details about your right to dispute or correct information in your report.

"Only one website is authorized to fill orders for the free annual credit report you are entitled to under," notes Laura Levine, executive director of the Jumpstart Coalition. "Other websites often claim to offer 'free credit reports,' 'free credit scores,' or 'free credit monitoring.' They are not, however, part of the legally mandated free annual credit report program."

If you are comfortable discussing family finances with your teenager, request your credit report and review it together.

Get in the habit of checking your own credit report regularly. Experts recommend that consumers space their requests for free reports evenly throughout the year so that they're monitoring their credit "report card" every four months. Spurious information can alert you to the fact that you've been the victim of identity theft.

For more information, read "Credit Savvy Is Key to Avoiding Costly Missteps" in Home & Family Finance Resource Center. Have your teenager read "Entering the World of Credit" in C-Note, the high school level of Googolplex.

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NCUA seeks non-interest account coverage for CUs

ALEXANDRIA, Va. (10/24/08)—The National Credit Union Administration (NCUA) is actively seeking parity for credit unions by requesting credit union inclusion in U.S. Treasury Department's recently expanded deposit insurance coverage of non-interest bearing deposit accounts.

'Based on the belief that the policies of the National Credit Union Share Insurance Fund (NCUSIF) should be generally consistent with those of the (Federal Deposit Insurance Corp.) FDIC, I believe that there should be full share insurance coverage for non-interest-bearing transaction accounts temporarily through 2009," said Fryzel in an announcement Thursday.

He added that he has sent a letter to Treasury Secretary Henry Paulson requesting Treasury to establish a parallel guarantee for credit unions" in order to avoid any unintended impact on the credit union system."

The FDIC program for insured banks and thrifts included the FDIC guarantee for all funds in such a non-interest bearing deposit accounts. Under the program, for the first thirty days all insured banks and thrifts would be covered. After that time, the accounts at institutions that do not opt out and thus agree to a 10-basis point insurance assessment will be covered.

NCUA's Fryzel noted the importance for consumers in "the federal government creating a uniform regime regarding insured deposits."

"Given the uncertainty and turmoil in the markets, it is critical that consumers have confidence in the guarantee that stands behind funds in these non-interest bearing transaction accounts, regardless of what type of insured institution is providing the service," he added.

Last week, Dan Mica, president/CEO of the Credit Union National Association (CUNA) Wednesday, wrote to each member of the NCUA board to warn that federally insured credit unions will be competitively disadvantaged unless federal regulators move quickly to provide full share insurance coverage for non-interest bearing transaction accounts.

"Failure by NCUA to address this issue for credit unions could undermine credit unions' hard-won success in serving small businesses and others in their communities," the CUNA letter said.

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Business Week: CUs' small biz loans 'way up'

NEW YORK (10/24/08)--Credit unions originated $6.5 billion in business loans during the first six months of 2008, Credit Union National Association Chief Economist Bill Hampel told Business Week online.

In its Wednesday article, "Small business loans from credit unions way up," Business Week noted that credit unions' increase in originating business loans is one more indicator of credit conditions for small businesses. Small business owners are turning to credit unions for financing.

Business loans at credit unions are up 36% from the $4.8 billion they loaned in the first six months of 2007, Hampel said.

In 2007, commercial banks originated about $287 billion in small business loans.

"So credit unions, like microlenders are a relatively small source of small business lending, but with many banks in bad shape, it looks like they may be increasingly important," said the publication.

The publication advised entrepreneurs to consider a credit union or microlender for financing.

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Nevada CUs' shares, assets, loans increasing

RANCHO CUCAMONGA, Calif. (10/24/08)--Bucking a three-year trend of asset growth deceleration, Nevada credit unions saw their assets exhibit strength with a 4.02 % increase through the first half of 2008, according to the California and Nevada Credit Union Leagues.

Credit union share (deposits) growth increased by more than $231 million, a 5.45% rise through the second quarter.

Nevada credit unions have seen their investment portfolio grow 13.11% for the first six months of 2008, drastically reversing the prior year's losses in total investments of 10.54%.

Net worth realized a total dollar gain of $52,758 for the first six months of the year. As regular reserves and net income grew ($5.5 million and $3.4 million, respectively), undivided earnings and other reserves dropped ($7.4 million and $1.5 million, respectively), virtually cancelling out each other.

"Maintaining net worth, especially given the economic climate, is actually a show of strength for Nevada's credit unions," said Terrin Griffiths, league economist and industry analyst.

In lending, fixed-rate first mortgages grew $144.3 million while other loans grew $10.7 million. In a surprising turn against the national averages, auto lending was rather strong with used autos growing 2.87% ($9 million) and new autos keeping pace at 2.43% ($8.6 million), the league said.

The statistics are from the league's 2008 mid-year WestScan economic activity report for credit unions. WestScan is a financial report that examines economic, financial, demographic, and other trends affecting credit unions in the state.

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Time: Bad times for banks mean boom for CUs

NEW YORK (10/24/08)--Time magazine's website features a positive article on credit unions weathering the financial system crisis. The article is entitled "Bad Times for Banks Mean Boom Times for Credit Unions."

According to the article, business is booming for credit unions, with Texas Dow Employees CU doubling its real estate lending over the past five weeks and tracking a 405 to 605 growth in auto loans ( Oct. 23). The credit union is getting calls from car dealerships who have been jilted by auto companies' financial arms.

Filene Research Institute Chief Research Officer George Hofheimer notes in the article that credit unions typically are conservative in good times --to the point of being boring and old-fashioned--but such practices are "just what the doctor ordered" in bad times.

Credit unions are making sure people are aware they are lending and are taking pre-emptive action to keep delinquencies down. Unitus Community CU in Portland, Ore., hired a work-out specialist to review loan data and make preemptive calls to members who might need help, "the sort of down-home, we-care solution credit unions sell themselves on," said the article.

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Thursday, October 23, 2008

Authorities investigate threats mailed to financials

WASHINGTON (10/23/08)--The Federal Bureau of Investigation (FBI), the U.S. Postal Inspection Service and state and local authorities are investigating more than 30 threatening letters received at financial institutions in ten states and the District of Columbia.

In addition to a threatening message, most of the letters also contain a powder substance, according to a statement from the FBI. Field and laboratory tests on the powder so far have been negative, said the agency.

Financial institutions in New York, New Jersey, Washington, District of Columbia, Ohio, Illinois, Colorado, Oklahoma, Georgia, California and Texas have reported receiving the letters.

"Should your any part of your institution--corporate offices, branches--receive one of theses letters, please contact your local FBI office and ask for the WMD Coordinator," said the FBI.

Use the resource link for more information.

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News articles tout CUs during financial crisis

MADISON, Wis. (10/23/08)--Five news organizations--including U.S. News & World Report and MarketWatch--published articles Tuesday and Wednesday pointing out that credit unions are doing well during the global financial crisis.

Two of the articles say the banking industry's black eye has spurred gains for credit unions. An article and video in and News10now Oct. 21 indicate that banks' losses could be credit unions' gain.

"We have been talking about credit unions for a long time, that they are a great financial alternative, and I think the message is finally starting to hit home," Michael Lanotte, Credit Union Association of New York, told the newspapers. "Despite the economic downturn, credit unions are stable and safe, mainly because unlike banks, they are not for profits."

Mike Vadala of Summit FCU, Rochester, noted that credit unions' motive is "to take care of our members, not make a profit off of them"--a big differentiator in service, he said.

The article, which also quoted a Summit member, pointed out that credit unions are continuing to lend while banks are tightening their lending.

The takeovers, bailouts and government intervention plaguing the banking industry is having a positive effect on local credit unions, said credit unions interviewed by The Beaumont (Texas) Enterprise (Oct. 21).

Lisa Balone, senior vice president of marketing for DuPont Goodrich FCU, Nederland, Texas, told the newspaper that since the government's bank bailout bill, the credit union has seen $7 million in new deposits.

The biggest concern expressed among members is insurance and safety regarding accounts, she said. However, she provided information about credit unions' federal deposit insurance and coverage.

The article also interviewed Ron Burkhalter, president/CEO of Gulf CU, Groves, Texas, and Jason Landry, president/ CEO, Neches FCU, Port Neches, Texas.

Burkhalter pointed out that because members own credit unions, the credit union doesn't invest in subprime mortgages and is required to keep reserve capital. Landry said that increased familiarity is contributing to credit unions' growth. His credit union has about 33,000 members, up from 30,000 in October 2007. Hurricane Ike and new insurance guidelines has meant the credit union has more loans available.

The Orlando Sentinel (Oct. 21), notes that community banks and credit unions are still lending money while bigger banks aren't. As a result, McCoy FCU, Orlando, is seeing increased membership and a surge in car loan, unsecured signature loans and credit card applications, said A.C. Cowan, president. Cowan says "quite a few calls" are from people who are big bank customers now interested in credit unions.

MarketPlace (Oct. 22) distributed a press release from the Tennessee Credit Union League, which said that despite troubled times, Tennessee's credit unions continue to operate in a safe and sound manger, are open for business, and are meeting the financial service needs of members. It reemphasized that credit unions have not caused the current problems in the credit and equity markets and have not been involved in the types of loans, investments and financing practices that caused the problems. Credit unions continue to meet their members' lending and transaction needs.

With banks tightening lending standards and interest rates headed north, U.S. News & World Report (Oct. 22) noted that 90 million Americans are turning to credit unions.

The article discusses how to determine eligibility and where to find a credit union as well as benefits such as better rates, how credit unions have been affected by the current financial crisis, and their federal insurance. The article cites websites for more information, including that of the Credit Union National Association.

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The young like the video ads

NEW YORK (10/23/08)--Credit unions looking to market to potential members may want to note that consumers under age 25 are most likely to click on video ads than any other type of advertisement, according to a study from iPerceptions Inc.

iPerceptions collected user-generated feedback from over 14,000 visitors to leading media sites during August 2008 to paint a detailed picture of consumers' advertising preferences based on their likelihood to click on different types of online ads. Video ads are not popular among consumers in general--only 11% said they would likely click on them. But the group under age 25 makes up one-third of the video-ad viewing audience.

The study also found that marketers do not need to spend on fancy interactive ads to reach consumers. About 25% of respondents said they were likely to click on simple text ads, while 20% of respondents are likely to click on right Internet banners and 12% likely to click on top banners.

Study results indicated that the higher an individual's income, the less likely that person is to click on a video ad. The income gap is most pronounced with video ads--about 49% of consumers making less than $50,000 a year will click on video ads.

Also, 65% of consumers who click on the ads are weekly or daily browsers of a site, while 15% are first-time visitors and 6% are sporadic.

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Wednesday, October 22, 2008

Read fine print during open enrollment period

NEW YORK (10/22/08)—Instead of raising 2009 premium prices significantly for workplace health benefits, some firms will be charging more for out-of-pocket items such as deductibles, co-payments, and other fees, catching many workers off guard during the open enrollment period (The Wall Street Journal Oct. 9).

Read the fine print before you enroll. Benefits consulting firm Hewitt Associates, Lincolnshire, Ill., estimates that nearly two-thirds of workers select the same option they picked the previous year, which could result in sticker shock when the bills come in.

Look for these and other changes that could have a significant impact on your budget:

Higher out-of-pocket maximums
Higher deductibles
Higher co-payments
Co-payments for outpatient procedures
Shifts from flat co-pays to co-insurance charges that require you to pay a percentage of the total cost of a service
Confusing fee structures (for instance, a hospital admission may require a co-payment, as well as separate co-insurance charges for services during the hospital stay)
Elimination of certain drugs from the approved list
Reduced physical and/or speech therapy benefits

Before you enroll, check for coverage of any care you know you'll need and see if it's included in next year's plan—don't assume it's included. Then decide on the plan that's best for you. You may opt for a plan with higher out-of-pocket charges and a lower premium, or a high-deductible plan paired with a health-savings account, or some other plan solely based on your situation. Understand the real costs and coverage you get with each of the plan options.

For more information, read, "Does Your Generic Drug Make the Grade?" in Home & Family Finance Resource Center.

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CUs 'worth checking out,' says D.C. radio station

WASHINGTON (10/21/08)--WTOP Radio in Washington, D.C., spotlighted credit unions on its Answer Desk segment last week.

Credit unions "didn't go knee-deep into the hoopla" that is the mortgage mess, WTOP said. "It might be worth checking them out."

Credit unions also don't have to answer to shareholders or Wall Street critics. They are privately held organizations run "by the little people [as opposed to big banks]," WTOP said.

ABC News also noted credit unions' safety in a question-and-answer story on its website. "If the credit union offers higher interest rates, or is closer to your home or work, then by all means choose it," the news outlet said.

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Monday, October 20, 2008

Hunker down, resist urge to scale back 401(k)

ATLANTA (10/20/08)—As 401(k) balances shrink and the economy slides further into a recession, you may get the urge to take swift action to try to rescue what's left of your retirement savings. In most cases, you're better off not doing anything—at least for a while ( Oct. 13).

Contrary to what you may think, now is not the time to reduce the amount of money you contribute to your employer-sponsored retirement plan. You'd be forgoing tax breaks associated with tax deferral, turning down free money from your employer's match, and putting yourself at risk of not being able to make up for lost retirement savings after the crisis ends. Likewise, selling stocks right now is risky; you'd probably be selling low after buying high, which is the exact opposite of a wise investment strategy.

What's a smart investor with a 401(k) to do in today's economic upheaval?

Bump up your 401(k) contributions. By increasing the percentage deducted from your paycheck—with most stock prices in the basement—you're getting more for your money (Salt Lake Tribune Oct. 2).

Avoid taking money out of your 401(k). If you're not retired, you'll pay a penalty on top of cashing out near or at the bottom of the market.

Resist the urge to take a loan against your 401(k). Although doing so is considered a better alternative than simply taking money out, these loans are particularly risky if you suddenly lose your job and are forced to repay the loan. If you can't repay the loan immediately, you'll pay a hefty penalty.

Diversify. Make sure your portfolio has a mix of investments to reduce your risk, or select a target-date—or lifecycle—fund, which automatically shifts to more conservative fixed income investments as retirement years.

Shore up emergency savings. Without a cushion, any unexpected event—medical crisis, repair bill, school expense—could bust your budget.

Decrease your day-to-day expenses. You're going to need the extra cash for higher-priced goods and services and for emergency savings.

Finally, if your 401(k) has experienced significant losses, consider putting much more money into your retirement accounts, working longer, or a combination of both ( Oct. 6). By working more years than you'd previously intended, you're not only saving for a longer period of time and building a bigger reserve, you're reducing the number of years you'd be pulling money out.

For more information, read, "Flawed Assumptions Sap Retirement Savings" in Plan It: Retire Ready Toolkit.

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Two CU officials write letters to editors, extolling CUs

ARNOLD, Mo. and SYRACUSE, N.Y. (10/20/08)--Two credit union officials at two separate credit unions have written letters to the editor at two newspapers, reaffirming credit union safety and soundness in unsettled economic times.

Ken Moser, vice president, Arsenal CU, Arnold, Mo., sent an Oct. 16 letter to the editor of the Arnold-Imperial Leader for overlooking credit unions in an Oct. 9 article in the newspaper titled, "Bankers say branches are safe, secure."

Moser told News Now that he was especially irked by the omission since the credit union purchased an ad that ran in the paper's same issue. The ad was an open letter from Arsenal President/CEO Linda Allen that assured people in the community that their money was safe with the credit union.

"It appears the reporters didn't intentionally leave us out of the conversation when they put the article together; the paper made amends by publishing my letter and giving credit unions in the area some much-needed recognition," Moser said. "The paper ran my letter in its entirety; the only thing I noticed that the paper changed was changing 'members' to 'customers.'"

In the letter to the editor, Moser said in part: "You overlooked mentioning that credit unions are also not part of the financial mess and are safe and sound ... The credit union system is healthy, with credit unions having strong balance sheets and higher capital than banks--11.1% vs. 10%, respectively.

"At a time when many lenders have stopped making loans, credit unions are continuing to extend credit to qualified borrowers," Moser continued. "Year-to-date, credit unions have made over $180 billion in new loans, including nearly $31 million at Arsenal.

"People who do business with credit unions can sleep well at night, knowing their money is safe, and that their credit union is always looking out for their best interests," Moser's letter concluded.

Bill Ryan, CEO, Syracuse (N.Y.) Fire Department Employees FCU, wrote an Oct. 16 letter to the editor of The Post Standard/Herald-Journal, pointing out the safety and soundness benefits of credit unions.

"With all the attention focused on the current financial crisis, the media have been quick to report that savings in bank accounts are safe, insured by the Federal Deposit Insurance Corp," Ryan said.

"It's important to assure consumers that credit union accounts are federally guaranteed as well. The National Credit Union Share Insurance Fund insures members' savings up to at least $100,000, with higher total coverage if the member has a combination of accounts. There is separate insurance coverage of up to $250,000 for IRA accounts," he added.

"Credit unions have been able to steer clear of sub-prime problems because they do not engage in risky lending practices, holding about 70% of their mortgage loans. As not-for-profit, non-market-based financial institutions, credit unions are, for the most part, shielded from the severe ups and downs of the stock market," Ryan said.

"Consumers seeking a safe harbor during today's financial turmoil need look no further than their local credit union," he concluded.

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Friday, October 17, 2008

Corporate CUs get loan guarantee program

ALEXANDRIA, Va. (10/17/08)--The National Credit Union Administration (NCUA) Thursday announced a corporate credit union liquidity guarantee program that will operate from Oct. 16, 2008, through June 30, 2009.

The program is similar to the "Temporary Liquidity Guarantee Program" announced by the Federal Deposit Insurance Corporation Oct. 14, 2008, and is intended to provide corporate credit unions with competitive standing in the debt market.

The National Credit Union Share Insurance Fund (NCUSIF) is providing federally insured corporate credit unions with a 100% guarantee on new unsecured debt obligations. The guarantee is subject to terms detailed in the program.

To qualify, new unsecured debt obligations must be issued by eligible corporate credit unions on or before June 30, 2009, and mature on or before June 30, 2012. Included promissory notes, commercial paper, inter-bank funding, and any unsecured portion of secured debt, the agency announcement said. The NCUA provided the following details:

The amount of debt obligations covered by the guarantee per eligible corporate credit union may not exceed the greater of:

100% of the eligible corporate credit union's maximum unsecured debt obligations outstanding during the period Sept. 30, 2007 through Sept. 30, 2008;

An amount determined by written approval of the agency's director of the Office of Corporate Credit Unions, with the prior concurrence of its director of the Office of Examination and Insurance, not to exceed $100 million; or

An amount determined by the NCUA Board.

All corporate credit unions are automatically covered for debt obligations issued through Nov. 17, 2008. Corporate credit unions may elect to opt out of the program by providing notice to the NCUA Office of Corporate Credit Unions.

The NCUSIF will charge participating corporate credit unions a fee of 75 basis points per year on the outstanding balance of guaranteed debt obligations.

"While this new Board action is directed at addressing corporate liquidity issues, I think it is important that natural person credit unions be fully aware of all of their options in this very tight and difficult liquidity situation, including the Central Liquidity Facility (CLF)," said NCUA Chairman Michael Fryzel when announcing the guaranty program.

"The standards for CLF borrowing are stringent, and our evaluation of requests will be thorough, but credit unions should know that their short-term liquidity needs can be addressed through CLF borrowings. I encourage all appropriate use of the CLF as another means to maintain liquidity and confidence in the credit union system during these uncertain times."

Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said both CUNA and the Association of Corporate Credit Unions had urged agency action.

"We commend them for taking this step," she said.

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Two leagues, CUs promote safety and soundness

MADISON, Wis. (10/17/08)--Some state credit union leagues and individual credit unions are continuing to promote the message about the safety and soundness of credit unions in the unsettled U.S. marketplace.

During the recent financial uncertainty, the Alabama Credit Union League (ACUL) has reached out to various media outlets in the state in an effort to inform and reassure the public about the safety of credit unions. In addition to spreading the message that credit unions continue to be safe havens, the league has actively been providing the media with financial experts and information.

"During these times, people are looking more carefully than ever at their own personal financial situation. The league has been providing pertinent information on the safety and soundness of credit unions to the media to help reassure the public," said league Gary B. Wolter, president/CEO.

"In particular, during the Wall Street panic and the economic relief package debates, the league stressed the message about deposit insurance, reassuring the public that like banks, credit union accounts are federally insured through the National Credit Union Share Insurance Fund. In addition, we are using the opportunity to point out some of the distinct benefits of credit unions and credit union membership," he added.

Articles and letters to the editor have appeared in the Montgomery Advertiser, the Mobile Press-Register, the Birmingham News, and are planned for additional newspapers across the state. Credit union CEOs have been featured in television news interviews and newspaper articles on the economy within the last weeks and the league is currently looking for additional ways to raise the visibility of credit unions in Alabama.

The Wisconsin Credit Union League issued a press release Oct. 7 on credit unions' share insurance being raised to $250,000 after passage of the Emergency Economic Stabilization Act.

"Recently, credit unions have gained national attention as strong and secure institutions that have generally avoided the bad lending practices that contributed to today's financial crisis. As a result, credit unions are recognized as healthy lenders that are well positioned to fill a growing demand for personal, auto, business and student loans, as well as mortgages and more," the release read.

Brett Thompson, president/CEO of the Wisconsin league, said in the release: "Although credit unions have remained stable and well capitalized through our nation's ongoing economic struggles, we welcome this extended coverage on deposits and hope this further strengthens people's confidence in their financial institution."

Community First CU, a $1.089 billion asset, Appleton, Wis., credit union, has placed radio, newspaper and TV ads locally to highlight the strength of the credit union for its members and communities in Northeastern Wisconsin. The spots highlight not only the credit union's safety and soundness, but its gratitude to members, and Community First's willingness to continue lending.

In addition, Community First's website highlights safety and soundness with a home page banner and landing page, as well as a similar banner within its Home Banking product. Its current newsletter edition also carries a similar message on the front page.

Citadel FCU, A $1.086 billion asset, Thorndale, Pa.-based credit union issued a press release earlier this month about the new share insurance fund bump to $250,000.

"Recently, the majority of our member questions have revolved around the security of their deposits," said Carol Humenick, Citadel senior vice president, in the release. "There has been a great deal of media attention on the Federal Deposit Insurance Corporation, but a lack of focus on credit unions and their security in general. With the increase in deposit insurance, we are pleased to have an additional opportunity to reinforce the message of deposit security to our members and the marketplace."

"Citadel focuses on the long term needs of our members. We have avoided risky lending practices, preventing us from being caught up in the current credit crisis. The increase in deposit insurance provides further safety, soundness and security for Citadel members," the press release concluded.

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Delta Community CU builds energy-efficient branch

ATLANTA (10/17/08)--LEVEL5, a consulting and facilities development firm specializing in financial institutions, recently completed Atlanta-based Delta Community CU's newest energy-efficient branch in Newnan, Ga.

Atlanta-based Delta Community Credit Union's newest branch in Newnan, Ga., is the 12th facility for which LEVEL5 and Delta Community have partnered together to design and build and the first location to incorporate various energy efficient features.
This branch is the 12th facility for which LEVEL5 and Delta Community have partnered together to design and build and the first location to incorporate various energy efficient features.

The exterior of the branch has energy-efficient blue-tinted glass and a "cool roof" comprised of white thermoplastic olefin. The white color reflects solar radiation rather than absorbing it. This reflection, in conjunction with the well-insulated roof adds to the building's energy efficiency.

Contemporary design "air foil" sunshades provide shade for the windows and reduce internal heat caused by the sun.

"LEVEL5 was an asset in the planning and fulfillment of our retail delivery strategy," said Rick Foley, president/CEO of Delta Community CU. "They incorporated our branding and retail merchandising elements throughout the Newnan branch, both internally and externally. This facility offers everything a state-of-the-art financial institution needs to have today, and, perhaps best of all, the Newnan branch is energy efficient."

"Focusing on energy efficiency is more than just a trend--it is a responsible way to protect member's investments," said J. F. Kassler, president/CEO of LEVEL5.

"The progressive design of Delta Community's Newnan branch will save its members money for decades to come," he added. "The environmental benefits are huge as well. Building an energy efficient branch that also resourcefully uses the latest technology and design layout on the inside, Delta Community Credit Union will experience the highest possible return on investment from a branch where members want to conduct their business."

Delta Community is the largest credit union in Georgia, with 174,000 members and more than $2.8 billion in assets. Initially founded to serve the employees of Delta Air Lines, the credit union is expanding its membership base to provide financial services to much of the greater metro Atlanta community, including residents of 10 counties.

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Canadian CUs contributed record amount of community projects

TORONTO, Canada (10/17/08)--Canadian credit unions not only celebrated International Credit Union Day Thursday, but also the more than $35.8 million they contributed in 2007 to community projects--a record total which was a 3% increase over 2006.

Each year, credit unions nationwide support community initiatives, local services and sports teams, finance affordable housing, assist students, and reduce or waive service charges for community groups (Canada NewsWire October 16).

Credit unions support their respective local communities with money services and time, according to the seventh national survey of credit union philanthropy.

The biggest area of support was donations and sponsorships, with credit unions giving $25.3 million, up about 3% from the previous year.

Credit unions also donated $3.7 million to their own charitable foundations, handed out more than $900,000 in scholarships and bursaries, and provided $2.8 million in financial services to community organizations, mostly by reducing or waiving service charges for those groups.

Credit union employees also volunteered for community activities and organizations. In 2007, 47% of the credit unions surveyed said their employees participated in community activities as part of their paid work, while 67% of employees volunteered on their own time.

A total of 299 credit unions participated in the 2007 Credit Union Community Involvement Survey. There are more than 5 million members who belong to 449 credit unions with assets of $109 billion that are affiliated with Canadian Central.

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Wednesday, October 15, 2008

Certificate growth at CUs noted by Wall Street Journal

NEW YORK (10/15/08)--Investors are turning to certificates of deposit (CDs), and term share certificates--especially at credit unions, according to a Tuesday article in The Wall Street Journal.

Term share certificate deposits at credit unions nationwide have risen an estimated 4.8% so far this year, according to data from the Credit Union National Association, the paper said.

There has been a $57 billion increase in the total amount of revenue held in CDs and term share certificates of $100,000 or less during the past few months, according to Federal Reserve data, the paper indicated.

The primary motive for investors moving more into CDs and term share certificates is security because they offer a way to insure investors' money, the paper said.

Certificate investors also have been prompted by the new $250,000 federal insurance limit [at credit unions and banks], said John Nersesian, managing director of Nuveen Investments in Chicago.

The yield on an average one-year CD now is 2.56%, and the average five-year CD yield is 3.38%, according to

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Financial crisis: Back to the basics of personal budgeting

MADISON, Wis. (10/15/08)--As stock market swings rattle nerves and grocery prices pinch pocketbooks, more people are realizing the importance of going back to the basics: they're developing a budget.

Stressed-out consumers who bought too much too fast during "good times" are now being forced to tighten their belts and manage their money ( Oct. 9).

"Given what's happening lately, budgeting soon may be in vogue," says Susan Tiffany, Credit Union National Association's (CUNA) director of personal financial information for adults, Madison, Wis. She says respondents to the 2008 Financial Fitness Challenge on CUNA's Home & Family Finance Resource Center are showing high interest in trimming expenses for food and energy—whether to run cars, furnaces, or refrigerators. "They're sharing ways to save money systematically instead of erratically."

The steps to develop a budget—or blueprint for your day-to-day personal finances—include listing all your income and expenses, figuring out where your money goes, balancing income and expenses, and then managing whatever system you choose—checkbook ledger, receipt method, envelope method, account book, or computer program.

A successful spending plan helps you:

Stay on track financially;
Decide where your money goes;
Make informed choices;
Determine whether you're living within your means;
Develop a savings plan; and
Control your financial future.

Tiffany recommends that beginners allow for flexibility. "Make adjustments as you go along, and let all family members participate in the discussion about what to keep and what to cut out. Be ready to compromise and negotiate because, in the end, it's all about reducing stress and getting back to what's most important."

For more information, read, "Half of Workers on Paycheck to Paycheck Treadmill," in Home & Family Resource Center.

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Tuesday, October 14, 2008

CU blogger notes female members' needs

PLYMOUTH, Mich. (10/14/08)--Selling a woman on a credit union is like selling an entire household, according to a credit union blogger.

Mark Arnold, senior vice president of marketing at Neighborhood CU, Dallas, noted female credit union members' needs on CU Campus, an Internet-based tool developed by CU Village and launched by the Michigan Credit Union League.

Credit unions should connect women with their brand because they'll pass it along to friends.

"Women are three times more likely to recommend a brand or service they enjoy than men are," Arnold said. Credit unions also should offer retirement plans focused exclusively on women. Women are under-enrolled in retirement plans compared with men, he said.

"Women make almost 80% of the household buying decisions, comprise 59% of total college graduates and will control 60% of the wealth in the U.S. by 2010," Arnold added.

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Not knowing CU difference can cost, says league

MARLBOROUGH, Mass. (10/14/08)--Consumers' lack of understanding when it comes to the credit union difference can have an adverse effect on credit unions, wrote the president of the Massachusetts Credit Union League in a "president's message" to credit unions in the state.

Daniel F. Egan, Jr. wrote that with the passage of the Emergency Economic Stabilization Act of 2008, financial and credit markets should hopefully stabilize, but credit unions need to do their part (Values & Visions Oct. 6).

"One issue that has become clear as we dealt with the reverberations from this financial crisis is that the consumers' lack of understanding when it comes to the credit union difference comes a cost to us," Egan wrote. "We have expended considerable effort to make our credit unions the safe and sound institutions they are.

"Likewise, we fund a very well-capitalized and safe federal deposit insurance system, yet numerous credit unions indicate that they heard from many consumers who were nervous about the money that they had in a credit union," he continued. "We all need to do more to communicate the fact that credit unions are unique and distinct."

Consumers desire the benefits that credit unions offer, such as concentrating investments in loans to members because that is the main purpose and commitment of credit unions, Egan added.

When consumers are made aware of this--along with the fact that credit unions have a true commitment to safeguard members' deposits--then all credit unions "will enjoy their true power in the marketplace," Egan concluded.

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Bush again highlights CU share insurance in speech

WASHINGTON (10/13/08)--For the fourth time in two weeks, President George W. Bush included federal credit union share insurance in public remarks.

In a speech broadcast from the Rose Garden Friday, Bush spoke to shore up consumer confidence in the ailing economy. He addressed federal deposit and share insurance directly.

"Some Americans are concerned about whether their money is safe. So the Federal Deposit Insurance Corporation and the National Credit Union Administration have significantly expanded the amount of money insured in savings accounts, and checking accounts, and certificates of deposit," said Bush.

"That means that if you have up to $250,000 in one of these insured accounts, every penny of that money is safe," he added.

The Credit Union National Association (CUNA) has urged the White House at the highest levels to mention credit union share insurance in all statements about financial institution safety and soundness.

Access the complete White House transcript using the link below.

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International CU Week kicks off today

MADISON, Wis. (10/13/08)--International Credit Union Week starts today, with International Credit Union Day (ICU Day) on Thursday--and credit unions nationwide are preparing to celebrate.

ICU Day has been celebrated each year on the third Thursday of October since 1948. The event honors those who have contributed to the credit union movement. This year's theme is "It Belongs to Me."

ICU Day activities include:

The Maryland and District of Columbia Credit Union Association will host a reception on Thursday at Credit Union House in Washington, D.C. Credit unions can sponsor the event to fund international projects;

Fremont (Ohio) FCU will host a Shred for Safety event on Thursday. It also will distribute information on identity theft (PortClinton NewsHerald Oct. 3);

Purdue Employees FCU, West Lafayette, Ind., will celebrate with a youth coloring contest and a "What a credit union means to me" essay contest for high school students;

United Educational CU, Battle Creek, Mich., will host a Financial Survival Fair this week. The fair will offer resources to help consumers trim grocery bills, reduce energy consumption, balance budgets, and preserve homeownership ( Oct. 6);

The Michigan Credit Union League's state political action committee will host an online auction this week and a Credit Union Week Casual Day program. Last year, credit unions raised more than $8,000 by hosting casual days (Michigan Monitor Oct. 6);

The Credit Union Association of Oregon has bought advertising in local newspapers this week, including the Lebanon Express, Lincoln City News, Seaside Herald, Portland Business Journal, Grants Pass Daily Courier, Albany Democrat/Corvallis Gazette, Bend Bulletin, East Oregonian, Register Guard, Klamath Falls Herald, Medford Mail, Roseburg News, Statesman Journal, and the Oregonian;

Hundreds of the California Credit Union League's credit unions received recognition from local elected officials at ceremonies throughout California and Nevada. Ceremonies will continue to take place throughout the month of October.

"Citizens and businesses are facing unprecedented financial challenges, and credit unions are vital to helping local communities in providing services to their members. We are honored that our credit unions have been recognized by local government for all the hard work and services they provide within their communities," said Bill Cheney, president/CEO of the California and Nevada Credit Union League. Counties honored International Credit Union Day with resolutions and proclamation letters which highlight the credit union philosophy of "people helping people."

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Cybercrooks prey on anxious investors

MCLEAN, Va. (10/13/08)—As anxieties over the global financial crisis run high, cybercrooks--hoping to cash in on the growing economic calamity--are targeting current and former clients of financial institutions that have failed or merged (USA Today Oct. 9).

Bank customers--many from J.P. Morgan Chase & Co., Citigroup Inc., and Washington Mutual--report a spike in e-mails directing them to fake Web sites where they're asked for personal information like username, password, name, address, phone number, and account details ( Oct. 9). Some customers are handing over personal information because the phisher claims the information is required to update files because of a merger.

Many unsuspecting consumers are leaving themselves vulnerable to fraud in other ways. A survey of 3,000 Americans conducted by Zogby International and Symantec revealed that 80% falsely believed they had a firewall installed on their computer, yet only 50% actually had the protective software running on their computers ( Oct. 9).

October is National Cyber Security Awareness month, sponsored by several national partners including the National Cyber Security Division of the Department of Homeland Security. The coalition recommends you take precautions to avoid being hooked by a phishing scam:

Keep it private. Never provide personal or financial information in an e-mail message. E-mails aren't secure.

Watch out for links. If you're asked to click on a link within an e-mail message, don't let your guard down—safeguard your personal information even if the sender appears to look legitimate.

Double-check the URL. If the URL has a variation in spelling or has a different domain—such as .com vs. .net—then don't bite. It may be a scam.

Do some sleuthing. Verify whether the sender is legitimate by contacting the company directly. Don't use contact information provided on the Web site associated with the request. Check your statements for phone numbers. Check out known phishing attacks at

Safeguard your computer. Install and update anti-virus software, a firewall, and anti-spyware software. Visit for advice and free downloads.

Use strong passwords. Use a combination of letters (upper and lower case), numbers, and symbols.

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Friday, October 10, 2008

Associated Press, Wash. Post note CU share insurance

NEW YORK (10/10/08)--Associated Press and Washington Post writers in stories this week noted credit unions' competitive rates on savings accounts, was well as federal and private share insurance.

Most shares at credit unions are insured by the National Credit Union Share Insurance Fund (NCUSIF), noted the Associated Press, which pointed out credit unions also offer more competitive rates on savings accounts.

Members also can access branches through shared networking. "The bigger the credit union, the more likely it is to offer services such as credit cards, mortgages, ATMs or online banking," the article said.

Most consumers are eligible to join a credit union through their geographic area, profession, university or church. And credit unions may have "a greater degree of individual attention" that consumers may be seeking during the current financial crisis, the article noted.

Meanwhile, Washington Post consumer finance columnist Michelle Singletary reminds readers the new Emergency Economic Stabilization Act of 2008--in addition to banks--also temporarily increases the insurance limit to $250,000 on accounts in federal credit unions and the majority of state-chartered credit unions.

"In nine states, 163 state-chartered credit unions offer coverage from American Share Insurance, a private insurance company. It insures up to $250,000 per account," write Singletary.

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Filene examines large CU success factors

MADISON, Wis. (10/10/08)--Why do many large credit unions grow rapidly and thrive, while others produce much slower growth in assets, membership, and earnings? Filene Research Institute sought to answer that question by analyzing data from a five-year period, beginning January 2002.

The result is a newly released Filene Research Institute report, "Thriving Large Credit Unions," by Robert F. Hoel, Colorado State University Emeritus Professor of Business and a Filene Research Fellow.

Using a methodology developed for the institute's examination of small and midsize credit unions (1999 and 2007), Hoel isolates "star" and "laggard" credit unions in larger asset sizes, and reports their characteristics across a variety of measurements and indicators.

The study concludes that star credit unions conduct a number of business practices and traits that distinguish them as exceptional performers:

They are highly effective lenders;
Their members use the credit union extensively;
They excel in high-payoff product and service offerings;
Their members receive more total interest income on their savings;
They operate more branches and are more likely to engage in indirect lending;
They generate more fee income than their peers; and
They invest their capital in growth.

Hoel also reports on the qualities of low-performing credit unions, almost always in sharp contrast to star traits.

For example, whereas stars are highly effective lenders, laggards tend to have low loan-share ratios; and while stars invest their capital in growth initiatives, laggards are more conservative with their capital. One of the findings of the research is the consistency of the key success factors for star credit unions across asset size categories and time frames.

"Despite the uniformity of these success factors, it would be folly for credit unions to conclude that all seven effective practices are necessary to become a star," said George Hofheimer, Filene chief research officer. "A given credit union may have a different definition of what constitutes high performance by putting less emphasis on assets, earnings, and/or membership growth, for example."

There is no silver bullet or magic elixir that guarantees business performance, Hofheimer said. Credit union failure or success is dependent on a complex interaction of external and internal factors. The Hoel report does, however, outline factors that lead to credit union success.

Hofheimer recommends using the report as a building block and analysis for credit unions to consider in assessing future strategies and tactics.

Copies of "Thriving Large Credit Unions" are available free to Filene members; $125 to non-members.

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White papers: Marketing to baby boomers, ex-bankers at CUs

MADISON, Wis. (10/10/08)--How to market to baby boomers, and credit unions filling lending positions with ex-bankers are the subjects of two new white papers from the CUNA Councils.

Addressing the financial services needs of the often-ignored baby boomers--the 76 million men and women who comprise 26% of the population--is the subject of the first white paper.

"Marketing to Baby Boomers," by the CUNA Marketing and Business Development Council, details relevant products and services for this demographic and how to strategically market these offerings. The white paper includes research and case studies on boomer women, who are emerging as a market superpower predicted to control two-thirds of U.S. consumer wealth over the next decade.

The paper outlines the numerous opportunities that the baby boomer market presents, along with some caveats in the competition for wallet share.

"This age cohort is hungry for financial information from their trusted advisor," the paper reads. "They will attend seminars, but want information without the sales hustle--they get too many offers for free dinners and credit cards. As the interviews with professionals indicate, if the information is too sales oriented, your members will be turned off immediately."

The second new white paper--"Ex-Bankers Working for Credit Unions: Challenges and Opportunities" by the CUNA Lending Council--offers tips and tools for hiring ex-bankers with the right mindset to thrive in the credit union environment and helping them to make the transition.

Credit unions have been filling lending positions with ex-bankers for many years, but the trend has gained more attention recently due to credit unions' growing need for commercial lending experience.

"For ex-bankers, the key to success in the credit union movement seems to be understanding the credit union philosophy and reconciling it to their own approach to lending policies and procedures," according to the paper. "When ex-bankers successfully take this step, they can make significant contributions to their credit union organizations and even the credit union movement."

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Thursday, October 9, 2008

Fed rate cut likely will increase CU lending

WASHINGTON (10/9/08)--The Federal Open Market Committee's (FOMC) unexpected rate cut Wednesday morning could have positive effects for the marketplace and credit unions, a Credit Union National Association (CUNA) economist told News Now.

His comments came after the FOMC yesterday slashed its target for the federal funds rate 50 basis points to 1.5% after it said evidence pointed to a weakening of economic activity and a reduction in inflationary pressures. In a related action, the Board of Governors unanimously approved a 50-basis-point decrease in the discount rate to 1.75%.

Mike Schenk, CUNA vice president for economics and statistics, said for credit unions, the cut is likely to mean more of the same.

"In an economic downturn, credit unions typically experience very fast savings growth and fairly slow loan growth. But the opposite has occurred in the current market--credit union lending is expanding faster than credit union savings," Schenk explained.

In the 12 months ending August, aggregate credit union savings increased 6.3%, while aggregate loans increased 7.5%, Schenk said.

The relatively fast growth in lending is likely a reflection that credit unions are stepping up and helping members--refinancing toxic mortgages obtained at other lenders and helping small businesses abandoned by other lenders. Credit unions are reporting double-digit 12-month growth in first mortgages and in member business loans, he added.

"With lower rates, more members will likely be turning to their credit union to address debt management issues," Schenk said.

More broadly, he said the rate cut will first provide direct, though not immediate, relief to millions of borrowers who have variable rate credit by lowering monthly payments on that debt.

"Second, it will make it easier for new borrowers to obtain credit and the cost of that credit will be lower than it was yesterday," he continued. "Third, it sends a clear signal that the Fed is very concerned about the current situation and is doing all that it can to soften the blow of the credit crisis. The global coordination of this move confirms that both the level of concern and the vigor of response is shared internationally--and this should serve to calm markets."

"Having said all this, it should be noted that one of the underlying factors contributing to the current crisis is that the average household simply has too much debt," Schenk added.

This suggests that the Fed cut will not pack the punch that it has in the past. Consumers are focused more on fixing their balance sheets, reducing debt and building rainy day funds, and are focused less on debt accumulation to support spending, according to Schenk.

Incoming economic data suggest that the pace of economic activity has slowed markedly in recent months, according to the FOMC. "Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit," it said.

"Inflation has been high, but the committee believes that the decline in energy and other commodity prices and the weaker prospects for economic activity have reduced the upside risks to inflation," the committee said.

The FOMC said it will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, chairman; Timothy F. Geithner, vice chairman; Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn; Randall S. Kroszner; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh.

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ICU Day webcast to celebrate global CU growth

SAN DIMAS, Calif. (10/9/08)--The World Council of Credit Unions (WOCCU) and WesCorp of San Dimas, Calif., will sponsor a first-ever International Credit Union Day (ICU Day) webcast on ICU Day Oct. 16.

This year's ICU Day theme, "It Belongs to Me" recognizes credit unions' identity as member-owned financial cooperatives and celebrates the concept of member ownership.

Pete Crear, WOCCU president and CEO, will be the guest in an hour-long Oct. 16 discussion with moderator Paul Berry, a former Washington, D.C., television news anchor who hosts Home & Family Finance, a weekly radio program sponsored by the Credit Union National Association.

The program will be recorded and available for viewing on both WesCorp's and WOCCU's websites. It is the first such broadcast to take place on ICU Day. Participants hope it will help spread the good news about the global credit union movement, Crear said.

"As a lifelong member of the credit union movement, I know we've always had a good story to tell," he added.

The webcast's goal is to make the ICU Day discussion as global as the movement that the annual holiday represents, said Bob Siravo, WesCorp president/CEO.

The 60-minute webcast, produced with Overland Studios, will allow time at the end of Crear's interview for questions from a studio audience. International webcast listeners can e-mail questions that will be answered on the air.

"Overland Studios' technology will enable us to invite credit unions throughout the world to unite and celebrate the valuable contributions all of them are making to their members and the communities in which they live," Siravo said.

The webcast begins at 12 p.m. PT Oct. 16. It is open to the public and may be accessed by registering at or

ICU Day has been celebrated annually on the third Thursday of October since 1948. The event provides a time and opportunity to honor those who have made contributions to the global financial cooperative movement, to recognize the hard work of staff and volunteer board members working on behalf of credit unions and cooperatives today, and to express appreciation to members of credit unions and cooperatives living at home and abroad.

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Irish CU leader blames country's bank chiefs in crisis

DUBLIN, Ireland (10/9/08)--Samuel Adair, president, Irish League of Credit Unions (ILCU), said it would be an embarrassment if the credit union movement ever was in the financial crisis that Irish banks now find themselves.

ILCU would not seek a similar guarantee to the government's $545 billion of Irish banks because credit unions did not want to be linked or associated with bankers, Adair said (Sunday Tribune Oct. 5).

The current financial crisis besetting banks was evidence that credit unions have a better record of acting on behalf of saver's interests than banks do, Adair told the paper.

Although Irish credit unions are not underwritten by the government, savers should have confidence in them because credit unions do not give out mortgages and risk exposure there, or receive funding from international money markets, he added.

Deposits in Irish credit unions are guaranteed up to about $136,000, and credit unions have to hold reserves of 10%. Also, the ILCU stabilization fund all help credit unions if they experience trouble, Adair said.

Despite the fact that credit unions in the country of Northern Ireland do not have the $136,000 deposit guarantee, there has been no evidence of funds moving across the border as a consequence, he added.

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Irish CU leader blames country's bank chiefs in crisis

DUBLIN, Ireland (10/9/08)--Samuel Adair, president, Irish League of Credit Unions (ILCU), said it would be an embarrassment if the credit union movement ever was in the financial crisis that Irish banks now find themselves.

ILCU would not seek a similar guarantee to the government's $545 billion of Irish banks because credit unions did not want to be linked or associated with bankers, Adair said (Sunday Tribune Oct. 5).

The current financial crisis besetting banks was evidence that credit unions have a better record of acting on behalf of saver's interests than banks do, Adair told the paper.

Although Irish credit unions are not underwritten by the government, savers should have confidence in them because credit unions do not give out mortgages and risk exposure there, or receive funding from international money markets, he added.

Deposits in Irish credit unions are guaranteed up to about $136,000, and credit unions have to hold reserves of 10%. Also, the ILCU stabilization fund all help credit unions if they experience trouble, Adair said.

Despite the fact that credit unions in the country of Northern Ireland do not have the $136,000 deposit guarantee, there has been no evidence of funds moving across the border as a consequence, he added.

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Wednesday, October 8, 2008

FDIC premiums up; NCUSIF's steady for now

WASHINGTON (10/8/08)—The Federal Deposit Insurance Corp. (FDIC) announced a "restoration plan" Tuesday, accompanied by a proposal to increase rates banks pay for deposit insurance by seven basis points. At this time, the National Credit Union Administration (NCUA) has no similar intention.

Under the FDIC plan, on average banks would pay roughly 13.5 basis points in premiums by the second quarter of next year. They currently pay 6.5 basis points.

Credit unions are not facing a similar increase in share insurance premiums—at this time, according to National Credit Union Administration (NCUA) Chairman Michael Fryzel Tuesday.

"As of today, everything looks fine in terms of the share insurance fund," Fryzel said
NCUA Board Chairman Michael Fryzel during an interview Tuesday. (Photo provided by CUNA)
as part of remarks during a wide-ranging interview. "And as of today I cannot tell you that there will be an increase in the premiums" federally insured credit unions pay for coverage by the National Credit Union Share Insurance Fund (NCUSIF), he added.

However, he noted that based on the changes in the financial markets and other factors "everything comes into play and we will be looking at everything we need to do to make sure the fund remains strong, vibrant" and has "sufficient dollars in it to cover anything we need to."

In July, the NCUA Board reported that the NCUSIF's equity level was at 1.24%. Historically, the NCUSIF equity level fluctuates somewhat during the course of a year. Under the Federal Credit Union Act, the Board has authority to charge an insurance premium to federally insured credit unions if the Fund's equity ratio is less than 1.3%, but is not required to. If the equity ratio is below 1.2%, the Board must assess a premium to restore the ratio to 1.2%.

"CUs have never cost the taxpayer a penny. We want to make sure that continues and we will do whatever we need to do to make sure the Fund remains strong and that credit unions are able to operate with that strong fund in place," he said.

When asked the earliest the issue of a premium could be raised, the chairman said: "I hope to know something by the end of this year. That is contingent upon my staff putting together all the information I have requested and everything we are working on in regards to what we need to do in the next few months to make sure everything stays—pretty good."

Meanwhile at the FDIC, that agency said its proposed changes to the assessment system include assessing higher rates to institutions with a significant reliance on secured liabilities, which generally raises the FDIC's loss in the event of failure without providing additional assessment revenue.

The proposal also would assess higher rates for institutions with a significant reliance on brokered deposits but, for well-managed and well-capitalized institutions, only when accompanied by rapid asset growth. Brokered deposits combined with rapid asset growth have played a role in a number of costly failures, including some recent ones.

The proposal also would provide incentives in the form of a reduction in assessment rates for institutions to hold long-term unsecured debt and, for smaller institutions, high levels of Tier 1 capital. "Like any insurance company, we've identified activities that have increased or reduced the cost of insurance, and as a result, want to factor them into our determination of assessment rates," Bair said.

The FDIC Board of Directors also voted to maintain the Designated Reserve Ratio at 1.25 percent as a signal of its long term target for the fund.

Comments on the proposal are due no later than 30 days after publication in the Federal Register, which is expected soon.

The complete interview with NCUA Chairman Fryzel will appear in the next edition of Credit Union Magazine.

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Bush again highlights CU share insurance

WASHINGTON (10/8/08)—For the third time in a week, President George W. Bush included federal credit union share insurance in public remarks.

Click to hear President Bush talk about federal insurance for your savings at credit unionsThe Credit Union National Association (CUNA) urged the President Sept. 24 to instruct those within his administration to include federal credit union share insurance in messages meant to reassure Americans about the safety of their federally insured deposits.

At a small business in Chantilly, Va., Bush spoke in support of the recently enacted Emergency Economic Stabilization Act of 2008. In his remarks, Bush said of the measure:

"It temporarily expands federal insurance; bank and credit union deposits of up to $250,000. That's important. In essence, it's a safeguard for a lot of small businesses and a lot of families."

John Magill, CUNA senior vice president of legislative affairs, said, "In addition to our letter to the President, we also talked to the White House at the highest levels and they agreed that credit union share insurance should be mentioned in future remarks. They are making good on that now."

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Fed slashes target fed funds rate to 1.5% from 2%

WASHINGTON (10/8/08)—In an unexpected action, the Federal Open Market Committee (FOMC) Wednesday morning slashed its target for the federal funds rate 50 basis points 1.5%. The FOMC in a statement said it took the action in light of evidence pointing to a weakening of economic activity and a reduction in inflationary pressures.

According to the FOMC, incoming economic data suggest that the pace of economic activity has slowed markedly in recent months. "Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit," it said.

"Inflation has been high, but the committee believes that the decline in energy and other commodity prices and the weaker prospects for economic activity have reduced the upside risks to inflation," said the committee.

The FOMC said it will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn; Randall S. Kroszner; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh.

In a related action, the Board of Governors unanimously approved a 50-basis-point decrease in the discount rate to 1.75%.

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MarketWatch: Why CUs make sense

NEW YORK (10/8/08)--Credit unions are on "high ground" in the economic hurricane, according to MarketWatch writer Jennifer Openshaw.

"[With credit unions] you can sleep at night, often with better rates and a better experience to boot," she wrote (MarketWatch Oct. 6).

Credit unions' not-for-profit status, self-funding, deposit insurance and better rates are just some of the reasons to join a credit union, according to Openshaw.

She also cited some Credit Union National Association statistics: 70% of loans are funded through a credit union's own deposits, and 0.7% of credit unions' mortgage loans were delinquent in July compared with 9% of mortgages in the industry overall.

"[Credit unions] don't buy loans from other institutions either--that's another 'sleep well at night' factor," she said.

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Survey: More boomers forced to delay retirement

SAN FRANCISCO (10/8/08)--A survey released last week revealed that more than half (55%) of baby boomers believe they'll have to delay retirement by five or more years as a result of the economic crisis. Almost half (46%) of boomers report losses of 10% to 20% in their retirement accounts ( Oct. 2).

More than 450 members of, an online community for baby boomers, participated in the survey between Sept. 26 and Oct. 2.

Asked about the market crisis and how it's affecting their retirement plans, respondents said the situation is the worst economic crisis in recent history. Thirty-four percent of respondents don't expect to see a full recovery in their retirement accounts for at least five years, and 63% believe the blame for the economic downturn is shared by Wall Street, the federal government, irresponsible lending by banks, and individuals who bought houses they couldn't afford.

Even before the recent financial crisis, financial planners and counselors were discouraged by workers' lack of planning and saving. A study released in April by the Employee Benefit Research Institute, Washington, D.C., revealed that 60% of workers age 55 and older have less than $100,000 saved for their later years (The Wall Street Journal Sept. 22).

What's a preretiree to do? One option that both preretirees and recent retirees are exploring is to work longer. Spending more time on the job gives you more time to build up your 401(k) balance. More months and years of wages, in turn, yield a bigger benefit from Social Security and decrease the time you have to depend on overall savings.

And working longer is something you can control--unlike the stock market.

For more information, read "Retired and Returning to Work" and "Can You Count on Social Security?" in Plan It: Retire Ready Toolkit.

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Tuesday, October 7, 2008

Fed pay on reserves starts Oct. 9

WASHINGTON (10/7/08)—The Federal Reserve Board has announced that effective Oct. 9 it will begin to pay interest on credit unions' and other depository institutions' required and excess reserve balances.

The Financial Services Regulatory Relief Act of 2006 gave the Fed authority starting in 2011 to lower reserves to zero and/or to pay interest--not to exceed other short-term rates--on the reserve balances actually maintained.

The new Emergency Economic Stabilization Act gives the Fed that authority starting now. The authority is being implemented through changes to the Fed's Regulation D.

While the action is effective immediately, the Fed will accept public comments until Nov. 21 and the proposal will soon be published in the Federal Register. The Fed said it will adjust the rule as appropriate in light of comments.

Reserve balances are balances held to satisfy depository institutions' reserve requirements and excess balances are those held in excess of required reserving balances and clearing balances.

The Fed announcement said the interest rate paid on required reserve balances will be the average targeted federal funds rate established by the Federal Open Market Committee over each reserve maintenance period less 10 basis points.

Paying interest on required reserve balances should essentially eliminate the opportunity cost of holding required reserves, promoting efficiency in the banking sector," according to the Fed.

The rate paid on excess balances will be set initially as the lowest targeted federal funds rate for each reserve maintenance period less 75 basis points. The formula for the interest rate on excess balances may be adjusted subsequently in light of experience and evolving market conditions.

"Paying interest on excess balances should help to establish a lower bound on the federal funds rate...The payment of interest on excess reserves will permit the Federal Reserve to expand its balance sheet as necessary to provide the liquidity necessary to support financial stability while implementing the monetary policy that is appropriate in light of the System's macroeconomic objectives of maximum employment and price stability," the Fed notice claimed.

The Fed has also made several other amendments to Reg D, including the treatment of balances maintained by pass-through correspondents and eliminating transitional adjustments for reserve requirements in the event of a merger or consolidation.

The Board also published the annual adjustments for reserve requirements and reporting requirements for depository institutions.

For 2009, the first $10.3 million in net transaction accounts will be exempt from the reserve requirements. This figure is the reservable liabilities exemption adjustment.

Transaction account amounts over $10.3 million up to and including $44.4 million will have a three percent reserve requirement. Transaction account amounts over $44.4 million will have a 10 percent reserve requirement. This figure, $44.4 million, is known as the low reserve tranche.

The Credit Union National Association (CUNA) has worked hard to achieve changes in reserve requirements.

Our preference is for Reg D reserve requirements to be completely eliminated, but paying interest on reserves certainly is an improvement over holding what is referred to as 'sterile reserve,'" said CUNA Senior Vice President of Compliance Kathy Thompson Monday.

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WOCCU adopts international principles

MADISON, Wis. (10/7/08)--The World Council of Credit Unions (WOCCU) is piloting the International Credit Union Consumer Protection Principles with select credit unions. WOCCU also will participate with other leading microfinance agencies to assure equitable lending and savings practices gain global acceptance.

The principles, approved in July by the WOCCU General Assembly in Hong Kong, is the latest in a series of international credit union guidelines issued by the organization. The nine principles are designed to supplement rather than supplant local regulatory requirements and prudential standards, offering "best practice" models for serving credit union members, according to Dave Grace, WOCCU's vice president of association services.

"Credit unions around the world exist to serve their members, but not all members are served equally," Grace said. "Credit union members worldwide have the right to expect fair and ethical treatment delivered with a high degree of honesty and integrity. WOCCU's principles outline standards for ethical member service applicable to all credit unions wherever they are located."

The nine principles were developed over two years through a participatory process with WOCCU's members and global experts on consumer protection. The principles form the cornerstone of WOCCU's efforts in Kenya, Mexico and the Philippines, where credit unions are piloting a program that assesses credit union performance against the principles and implements changes where gaps exist.

WOCCU expects the initial program to take six to nine months to complete. Results will guide application of the principles among credit unions in other countries, Grace said.

WOCCU also is participating in a work group under the auspices of the Center for Financial Inclusion at ACCION International, a Boston-based microfinance organization.

In addition to Grace and representatives from credit unions piloting WOCCU's principles, participants in the group include Deutsche Bank, the Consultative Group to Assist the Poor and other organizations.

The work group will take a broader look at financial service conditions in developing countries, but WOCCU's efforts will focus solely on credit unions, Grace explained.

"The Consumer Protection Principles were approved during a time when credit union systems in WOCCU member countries like Australia and Ireland were examining their own codes of conduct, and in the wake of a U.S. economy reeling from a subprime mortgage crisis caused by financial institutions clearly not operating in consumers' best interests," Grace said. "We're confident results from our pilot studies will show that serving members ethically and honestly is simply good business."

WOCCU's International Consumer Protection Principles address several issues:

Disclosure of rates and fees: Credit unions shall present savings and share fees, and interest and dividend rates clearly and in writing to members before completing any transaction;

Periodic statements: Credit unions shall distribute comprehensive member statements disclosing loan and savings balances, rates, fees and finance charges quarterly;

Honest and non-deceptive promotions: All marketing and advertising shall contain honest and relevant information to help members make informed decisions;

Fair credit practices: Credit unions shall provide members with accurate, comparable, transparent and complete information about the total cost of loans, including fees and commissions as required under applicable law;

Dignified collection practices: Credit unions may exercise persistent collection practices as needed, but shall not harass nor physically or verbally abuse members in the process;
Members' consent to share information: Credit unions shall provide members with the option of not having their personal information shared with third parties for the purpose of selling members products or services;

Dispute resolution services: Credit unions shall provide members with options to settle disputes to augment options offered through the legal system;

Provide education about thrift and wise use of credit: Credit unions shall educate and provide members with tools describing how to accumulate wealth and use credit wisely; and

Fair and forthright conversions: Credit unions seeking to demutualize must have at least 30% of their members directly vote on the issue, with 75% voting in favor of demutualization.

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