Thursday, May 28, 2009

CUs raise $9.3M for children's hospitals in '08

SALT LAKE CITY (5/28/09)--Credit Unions for Kids, a credit union industry effort to raise money for Children's Miracle Network, contributed $9,322,827 to children's hospitals in 2008, making it the third largest fundraising sponsor for the charity.

"Credit Unions for Kids increased their fundraising efforts by 16% over 2007, which, in light of the current economy, demonstrates the credit union industry's resiliency and also their exemplary commitment to philanthropy during these hard times," said Joe Dearborn, Children's Miracle Network senior director.

Credit Unions for Kids raises money for 170 Children's Miracle Network hospitals nationwide. The events and amounts raised were:

The Credit Union Cherry Blossom Ten Mile Run, $1 million;
Tampa Bay Area Credit Unions Golf Tournament, $330,000;
Desert Schools FCU Golf Tournament, $221,000;
Hank & Moose Golf Tournament, $220,000;
Oregon and Southwest Washington Credit Unions for Kids Wine Auction, $205,000; and
California/Nevada Credit Unions for Kids Wine Auction, $190,000.

The CO-OP Financial Services Miracle Match program also saw more than 70 credit unions and their respective hospitals benefit from matching funds. The credit unions raised more than $1 million, with CO-OP matching $520,000 to bring their contribution to more than $1.5 million.

The top five markets for raising the most money include: Portland, Ore.; Phoenix; Washington, D.C.; Austin, Texas; and San Antonio.

The top 10 states that raised the most money are:

Washington, D.C.;
Washington; and

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Bank earnings low, but best in a year

WASHINGTON (5/28/09)—Although bank and thrift earnings were down more than 60% from a year ago, the Federal Deposit Insurance Corp. (FDIC) reported Wednesday that net income for its federally insured institutions for the first quarter of 2009 was the best it's been in four quarters.

Net income for the January 1-to-March 31 period was $7.6 billion, down $11.7 billion, or 60.8%, from the $19.3 billion the industry earned in the first quarter of 2008. However, the picture looks brighter when compared to the reported $36.9 billion of losses in the fourth quarter of last year.

The FDIC attributed the year-to-year earnings drop, in part, to higher loan-loss provisions, increased goodwill write-downs, and reduced income from securitization activities. The agency said three out of five insured institutions reported lower net income in the first quarter and one in five was unprofitable.

The FDIC's Quarterly Banking Profile also reported that the agency's Deposit Insurance Fund (DIF) reserve ratio fell to 0.27%, a decline from 0.36% of insured deposits. Other points of interest:

The FDIC has set aside $28 billion in reserve to cover projected losses for the next 12 months;

The FDIC will collect more than $8 billion in premiums during the second quarter, including $5.6 billion from the special assessment the FDIC Board approved on May 22; and

insured deposits increased 1.7% in the quarter -- approximately $82 billion -- and are up 9% over the last 12 months.

FDIC Chairman Sheila Bair said in a release that the growth in insured deposits is a "vote of confidence from bank customers" who "obviously see the value of the FDIC guarantee."

The National Credit Union Administration released comparable figures regarding first-quarter performance by federally insured credit unions Wednesday. (See related story: CU membership, assets, savings grow; net income down.)

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Membership, assets, savings up; net worth drops as expected

ALEXANDRIA, Va. (5/28/2009)—Although fewer loans were issued, the National Credit Union Administration (NCUA) Wednesday reported a double-digit increase in overall member share accounts among its 7,749 federally insured credit unions during the first three months of 2009.

The NCUA also reported the return-on-average-assets (ROA) ratio declined from negative 0.01% at yearend 2008 to negative 1.51% at the end of March. However, the NCUA's reported ROA decline does not consider what earnings would have been absent the NCUA's corporate stabilization costs, which can be spread out under provisions signed into law last week.

CUNA economists estimate with that taken into account, ROA would have been close to break even.

Lending growth overall was essentially flat, with mortgage lending staying apace with other loan products that showed little or negative growth, primarily as a result of historically low home loan rates.

Yet, credit unions continued to maintain strong capital levels, at close to 10%, despite a slow economy and the expense of the corporate stabilization program.

In a statement accompanying the release of the quarterly figures, NCUA Chairman Michael Fryzel said that credit union members were "strong depositors, posting gains in every category" of member share and savings accounts during the 2009 first quarter.

Fryzel noted that credit unions' continued strong capital levels came despite negative effects of the still-troubled economy and the estimated costs associated with National Credit Union Share Insurance Fund replenishment for corporate stabilization costs.

Credit union financial positions overall will be substantially improved by the aforementioned, recently signed law that allows credit unions to spread costs associated with the NCUA's stabilizations efforts over seven and eight years.

Also noted in the report, the net worth of federally insured credit unions declined by 3.9% percent during the quarter, to a total of $83.1 billion.

By the numbers, the total assets held by federally chartered credit unions increased by 5.6% to a total of $856.4 billion. Total investments increased by 14.5%t and shares increased by 6.4%, for totals of $189.8 billion and $724.5 billion, respectively.

Share drafts increased by 6.7%, regular shares increased by 7.9%, money market shares increased 8.2%, share certificates grew 3.9%, and IRA/KEOGH accounts rose by 6.5%, NCUA said.

Credit unions' overall loan delinquency rate showed the smallest quarterly increase in more than a year, to 1.44% at March 31 up from 1.37% at year-end 2008.

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Wednesday, May 27, 2009

Thrifty travel tips for summer fun

LOS ANGELES (5/27/09)--More Americans are planning to stay put during the summer travel season due to financial concerns.

Only 42% of Americans plan to spend their time and money on a vacation this summer, compared with 49% who planned to travel in 2005. A third have already cancelled at least one trip because of squeezed budgets ( May 19).

Despite the pressure on purse strings during tough economic times, there are ways to have frugal fun in the sun without burning a hole in your wallet (Readers Digest June):

Budget basics. Identify how much you have to spend on your excursion. Consider expenditures on meals, souvenirs, transportation, lodging and entertainment. Be sure to include funds for unexpected expenses, and take into account any membership or organizational discounts such as AAA.

Flight control. If possible, check flights and cost information at 12:01 a.m. Wednesday in the time zone where the airline is based. You also can track the price of flights before, and after, you book them. Websites like will notify you if the rate drops, enabling you to contact the airline for a refund of the price difference.

Wheels and lodging deals. Use bargain travel sites like to search for low rates on rooms and rental cars. When renting a vehicle, choose a location close to your hotel or airport to avoid airport convenience fees. Use when searching for lodging. The site offers discounted rates on rooms and a price match guarantee.

Travel insurance. This relatively inexpensive "extra" may save you a lot of hassle and expense even if your trip costs only a few hundred dollars. Basic travel insurance will cover things like delays, lost baggage and emergency medical expenses. Use to compare plans.

Last minute planning. When you have little time to plan, use to find travel packages that include transportation and lodging. Other sites, like, list reduced prices for last-minute air travel.

For more information, read "Rental Cars: Two Wrongs Don't Make a Right" and listen to "Travel Tips That Save You Money" on Home and Family Finance Resource Center. Also watch "Keep Your Travel Money Safe" on MoneyMix: Launch Your Life.

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CUs' better card rates more evident with new law

MADISON, Wis. (5/27/09)--A new law--the Credit Card Accountability, Responsibility and Disclosure Act of 2009, know by the partial acronym the "Credit CARD Act," which is expected to tighten credit card regulations--may make credit unions' credit card rates more visible, according to several major media outlets.

Credit cards from credit unions are "better deals than bank credit cards--and this should become more evident" with the new legislation, MarketWatch said Tuesday.

It's a good time to shop around for a better credit card, according to The Wall Street Journal (May 22). Consumer should consider smaller financial institutions or credit unions "that may be more eager for your business," the newspaper said.

Ed Lawrence, finance professor at the University of Missouri-St. Louis, told the St. Louis Post-Dispatch Sunday that "I would just quit using [my card] if they started putting annual fees on it. A lot of credit unions don't charge annual fees, so people would have choices."

MarketWatch also noted that some credit unions may pass fees assessed by MasterCard and Visa to cardholders, but credit unions will not add them to balance transfers, international transactions and cash advances.

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CUs tops in Forrester consumer opinion survey

CAMBRIDGE, Mass. (5/27/09)--Amidst the worst financial crisis in years, credit unions have come out on top in terms of member/customer advocacy and trust--beating U.S. banks, investment firms and insurers--in a new survey released Tuesday by Forrester Research Inc.

In "Customer Advocacy 2009: How Customers Rate U.S. Banks, Investment Firms and Insurers," credit unions achieved top ratings from 68% of consumers surveyed. Their rating was 16 percentage points higher than regional or local banks, which were ranked at 52%, and 27 percentage points above the largest bank rating, that of Washington Mutual at 41%.

Credit unions' rank remains unchanged from the previous survey. In previous years, only insurance company USAA outranked credit unions. This year, the company's ranking dropped more than 5% to tie with credit unions.

Independent financial advisors received a score of 61%, followed by State Farm Mutual Automobile Insurance Co. and an independent insurance agent tied at 53%; and Progressive and "a regional or local bank" tied at 52%.

The survey ranks financial services companies based on their member/customers' perception that their providers are looking out for their best interests, not just the institution's bottom line. For the first time--and reflecting investors' dissatisfaction with their investment portfolios-- brokerage firms plummeted to the bottom of the list. Large national banks have traditionally held the bottom ratings.

A common trait among the top scorers: many are customer-owned organizations, like credit unions or mutual insurance companies such as State Farm, said Forrester's report, written by Bill Doyle, Forrester vice president and principal analyst.

Forrester also found that the higher the rank, the more likely the institution would keep its member/customers and the more likely those member/customers would buy more products.

For the first time since the study began, the nation's three largest banks--Bank of America, Chase and Wells Fargo--climbed from the bottom. Still, banks continued to dominate the cellar. Nine of the 13 lowest-rated firms are banks, according to the report. This year, the cellar position went to Capital One Bank.

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Tuesday, May 26, 2009

Cardholder rights bill signed into law

WASHINGTON (5/26/09)—A series of sweeping new credit card industry reforms aimed at protecting consumers became law after President Barack Obama on Friday signed H.R. 627, the Credit Card Accountability, Responsibility and Disclosure Act of 2009.

The bill, known by the partial acronym the "Credit CARD Act," was approved by the Senate last week. It will prevent lenders from such things as making arbitrary changes to the interest rates and terms associated with a card that holds an existing balance.

While the new rules should "help rein in" many abusive credit card practices, Credit Union National Association (CUNA) President/CEO Dan Mica has said that some portions of the bill could "have the unintended consequence of raising compliance costs and making credit more expensive and less available to consumers."

The bill, which suddenly moved with remarkable speed and strong support through both the Senate and House after years of work, also will require card issuers to notify a cardholder at least 45 days in advance of increasing the annual percentage rate (APR) or fees.

The APR generally will not be allowed to increase on existing balances, unless covered by an exception specified in the law, such as for cards with variable rates or when the cardholder is more than 60 days late in making a payment.

The provisions in the new law are generally effective in 9 months, but two of the provisions will be effective Aug. 20. Starting this summer, credit unions will have to give the 45-day written notice before any increase in the APR or fees, and will have to make sure that they mail credit card periodic statements at least 21 days before any due date in order to assess late payment penalties.

CUNA has scheduled an audio-conference on June 18 to discuss the requirements of the law. Details and registration procedures will be available later this week.

The new law raises questions about what happens to the Regulation Z amendments and the unfair and deceptive practices rules that the Federal Reserve Board (Fed) and the National Credit Union Administration have finalized on credit card programs, which are scheduled to go into effect on July 1, 2010.

"Obviously, the agencies are going to have to revisit their credit card rules to incorporate the new statutory requirements -- and adopt new effective dates," said Kathy Thompson, CUNA's senior vice president for compliance.

Although the law does not mandate any changes in interchange fees, it directs the Government Accountability Office (GAO) to complete a study on this issue in six month. CUNA has opposed any legislation restricting interchange fees. Congress has instructed the GAO to look at nine areas, including "the extent to which interchange fees allow smaller financial institutions and credit unions to offer payment cards and compete against larger financial institutions."

Additional provisions in the new law include:

A credit card cannot be issued to anyone under the age of 21 unless someone over that age agrees to be jointly liable (and authorizes any increase in the card's limit), or the young person can demonstrate he has independent means to repay the debt. Limits are placed on college students being given inducements to apply for credit cards, and colleges will be required to publicly disclose any contracts they have for marketing credit cards;

If a creditor increases the APR on a credit card, it must at least every six months review the account to see if conditions warrant reducing the APR;

When an account has balances subject to different APRs, payments have to first be allocated to the balance with the higher APR;

No over-the-limit fee can be charged by the card issuer unless it has disclosed the service fee and the cardholder has elected ("opted in") to permit such transactions for a fee;

The Fed must adopt regulations on what are "reasonable and proportional" fees associated with credit cards;

Credit card contracts will have to be posted on the card issuer's website and provided to the Fed, and the Fed is to establish a public repository of all credit card agreements; and

Gift cards will be subject to restrictions on inactivity fees and expiration dates.

For CUNA's comprehensive summary and the language of the "Credit CARD Act," see the resource links below.

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ACUC to celebrate movement's 100th anniversary

MADISON, Wis. (5/26/09)--The credit union movement's 100th anniversary will be celebrated at America's Credit Union Conference and Expo (ACUC), scheduled for June 21-24 in Boston.

Several sessions will focus on credit unions' history, according to the Credit Union National Association (CUNA).

The conference kicks off with a keynote session, "Honoring the Credit Union Revolutionaries," June 21 from 4 p.m. to 6 p.m. EDT. A presentation honors the first 100 years of credit unions and tells stories about credit union pioneers past and present.

During the conference, attendees will experience the 100th anniversary timeline. "Meet the Revolutionaries: Bringing the History Alive" is an interactive timeline, in which attendees will take a self-guided tour to view historic artifacts and the evolution of the credit union movement.

Other events scheduled are:

A special viewing of "King's X." Originally produced on film in 1953, "King's X" stars Hugh Beaumont of the TV show "Leave it to Beaver." The film follows the story of a family experiencing a sudden financial struggle. While searching for a solution, the main character discovers the benefits of becoming a member of his local credit union. The film covers the credit union philosophy, benefits of membership, and a brief history of credit unions.

The closing event is the 100th Anniversary Revolutionary Celebration--House of Blues, June 23, from 7 p.m. to 10 p.m. The House of Blues is dedicated to educating and celebrating the history of U.S. southern culture and African-American artistic contributions to music and art.

A pre-conference optional event--America's CU Museum Tours, scheduled for Saturday and Sunday before ACUC, and for Wednesday after the conference concludes. The tour shows how, in 1908, the American credit union movement took a root in a house. Nearly 100 years later, in October 2002, the site became the home of America's Credit Union Museum. Attendees can experience credit union history through exhibits, personal accounts and storytelling.

All attendees will be provided a free copy of CUNA's new book "For the People, for 100 Years," a history of the credit union movement, which features many photographs of key events through history.

Friday, May 22, 2009

What do California budget woes mean for CUs?

LOS ANGELES (5/22/09)--With the state having more than a $21 billion budget deficit hole to fill, about 60% of Californians who voted Tuesday opted to reject five ballot measures designed to keep the state solvent through 2009.

The measures would have prolonged tax increases, capped state spending, earmarked money for education and involved the state in a borrowing plan against its lottery.

The failure of the measures, declining revenues since the state passed its budget, and significant home foreclosure rates and high unemployment have created severe financial problems in the state (The New York Times May 20).

What do these developments mean for the state's credit unions?

"California faces a new, harsh fiscal reality after Tuesday's election," Melissa Ameluxen, director of state government affairs for the California Credit Union league, told News Now.

"The state's legislative leaders now have to close an estimated $15.4 billion to $21.3 billion budget gap. It's no secret that deep cuts are likely in the works. We also are facing the overall downturn in the economy, repercussions from slashed services, job loss and hiring freezes, all of which have an impact on our state's credit union members," she said.

"However, California credit unions have a strong record of helping public employees," she added.

"As we approach the rarely met constitutional deadline to pass a state budget, the state stops payment to a select group of state employees and state contractors. As a service to those members, many credit unions provide bridge loans to replace the paychecks the state has temporarily cut. During this turbulent time, California credit unions stand ready to help our members with sound financial services."

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Matz to be nominated as NCUA chair

WASHINGTON (5/22/09)—Debbie Matz is President Barack Obama's choice to become the new chair of the National Credit Union Administration (NCUA), the White House announced Thursday.

Matz is a former member of the NCUA board, confirmed by the Senate on March 22, 2002 for a term ending August 2005, although she remained a few months longer to assure a smooth transition to a new member. Matz was executive vice president and chief operating officer of $800 million-in-assets Andrews FCU, in Suitland, Md., until June 2008.

Credit Union National Association President/CEO Dan Mica said Thursday, "Our sincere thanks to President Obama for ensuring the NCUA board has its full complement to face the many critical issues now before credit unions. Ms. Matz has strong credit union credentials and, from our past experience with her, we know her as a solid and competent regulator.

"We look forward to working with her. We thank Rodney Hood for his service on the board, as well as to Michael Fryzel for his tenure as board chairman."

Hood, was nominated to the NCUA to fill a vacancy when Dennis Dollar left his position more than a year earlier. Hood's term expired in April.

The two remaining board members are current Chairman Michael Fryzel, who took the position in August 2008 and whose term extends in to 2013, and Gigi Hyland, confirmed at the same time as Hood, and whose term ends in 2011.

Obama, who announced his intention to nominate several other nominees at the same time as Matz--including Winslow Sargeant, as chief counsel for advocacy for the U.S. Small Business Administration-- said of his candidates:

"I'm grateful that such experienced and dedicated individuals have joined my administration at a time when our nation faces great challenges. Their deep commitment to their individual areas of work gives me confidence that they will help us put America back on a path to prosperity and security. I thank them for their service and look forward to working alongside them in the years to come."

The president's nominees must go through the confirmation process, which includes a nomination and confirmation hearing, and, if approved, a formal swearing in.

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Arizona State CU employee saves member's life

PHOENIX (5/21/09)--An Arizona State CU employee saved a member's life after going the extra mile to prevent her from taking what could have been a fatal dose of insulin.

Employee Christina Maulfair received a call from a pharmacy, saying that one of Arizona State CU's members, Denise Dewyer, had been given the wrong dose of her prescription. Dewyer, a diabetic, routinely purchased insulin from the pharmacy.

The dose she had just received was five times more potent than she needed. If she took the medicine, she would die, the pharmacy said.

"I never expected to receive a call like this," Maulfair said.

Dewyer used a credit union debit card to pay for her medicine. The pharmacy had no other contact information for her, so it looked up her payment records and found Dewyer paid with a credit union debit card.

Maulfair could not release Dewyer's contact information to the pharmacy to protect her privacy. Instead, she began attempting to contact Dewyer herself.

After a phone call to Dewyer went unanswered, Maulfair rushed to Dewyer's home. She knocked on the door repeatedly to no avail. Maulfair then wrote multiple notes to Dewyer and posted them at each entrance to her home.

Dewyer found the notes shortly after and contacted her pharmacy before taking the medicine.

"I want to express my deepest gratitude to Christina for going above and beyond and preventing me from using medication that could have killed me," Dewyer said. "It's not often that you get to thank someone for saving your life."

"Everyone here would have done exactly the same thing," Maulfair said. "I'm just so glad I was able to reach her in time."

Dewyer, who has had an account with Arizona State CU for more than 15 years, said she will not be going anywhere else to do her banking.

Arizona State CU, Phoenix, has $1.3 billion in assets.

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2009 ICU Day theme announced

MADISON, Wis. (5/21/09)--In response to the challenges facing credit unions and cooperatives worldwide, this year's International Credit Union (ICU) Day theme will remind people everywhere of the advantages that credit unions provide their members.

ICU Day is Oct. 15 and takes place during National Credit Union Week.

The idea for this year's theme, "Your Money. Your Choice. Your Credit Union." was developed by Stan Cowan of A+ FCU in Austin, Texas. The theme celebrates the reasons why 177 million people worldwide choose credit unions. Value, trust and service to members, all represented in the theme, are just a few of the many reasons credit unions are chosen by people seeking access to fair and affordable financial services according to the World Council of Credit Unions (WOCCU).

"This year, more than ever, consumer finance and business experts have repeatedly highlighted credit unions as safe and sound institutions where people can depend on a trusting relationship," said WOCCU President/CEO Pete Crear. "That is truly an accomplishment we can be proud of in these tumultuous times, and we should celebrate it this October."

Credit union leaders around the world agree that now is the time to come together and promote the credit union difference, WOCCU said.

"In a time of economic upheaval when control has largely been taken out of the hands of consumers, this year's theme demonstrates that members, through equal ownership and voting rights, are squarely in charge of their credit unions," said Dan Mica, president/CEO of the Credit Union National Association (CUNA).

"We are pleased to work with other national and international groups on the campaign to promote International Credit Union Day and Co-op Week," said David Phillips, president/CEO of Credit Union Central of Canada. "We work with these groups year-round on projects that support important initiatives that help members around the world cope with trying economic times."

Like their colleagues around the world, credit unions in Peru continue to find new ways to serve their members through changing times," said Manuel Rabines, second vice chair of WOCCU and president of the Peruvian National Credit Union Association. "As a global movement, it's important we take time this year to demonstrate our strength and remind people about the many benefits we provide to our members."

ICU Day has been celebrated annually on the third Thursday of October since 1948. The celebration of Co-op Week that same week in Canada became a national event in 1982. In the U.S., October is also designated as National Cooperative Month celebrating all cooperatives including grocery, agricultural and energy co-ops, and credit unions.

"While today's economic times pose serious challenges, they also provide an opportunity for the cooperative sector to demonstrate the differences between co-ops and traditional business models," said Canadian Co-operative Association Executive Director Carol Hunter. "We know that people are increasingly interested in supporting organizations that are open, democratic and put people before profits, and that's what cooperatives and credit unions are all about."

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Wednesday, May 20, 2009

Moving home to make do

NEW YORK (5/20/09)--More people are living under the same roof with their parents or adult children to ride out recessionary pressures associated with job loss, the foreclosure crisis and the credit crunch. The trend toward multigenerational homes is expected to increase.

Besides the financial challenges, these long-term family "guests" can pose a remodeling challenge as families carve out space to accommodate either their aging parents or adult "boomerang" children ( May 8).

Research from The Network on Transitions to Adulthood indicates that since the 1970s, the number of 20-somethings living with their parents increased by 50% ( April 26). AARP Bulletin's Multigenerational Housing survey, released in March, revealed that 33% of respondents age 18 to 49 live with their parents or in-laws, 11% of people age 35 to 44 live with their parents or in-laws, and 11% of people age 50 and older live with their grandchildren or parents (PRNewswire-USNewswire March 3).

Boomerang children used to mean young adults moving back home with parents, but the economy is forcing people in their 30s and 40s--and their children--to live with mom and dad again.

Lisa Orrell, author of Millennials Incorporated, cites the pros and cons of these new living arrangements on her Generation Relations blog. For some, there may be a space issue. For others, the help around the house or with babysitting can make a big difference in quality of life.

If you are considering a multigenerational living situation--or are forced into one--make it a workable living situation ( Feb. 19):

Discuss expectations up front. You can't guarantee how long it will take to find a job, but you can set some goals for getting out of debt. How long is the new living situation expected to last? What are other options if it doesn't work out?

Share expenses and chores. Parents who have lost equity in their homes may be pinching pennies themselves and welcome financial and household assistance. Agree on a rental charge or amount contributed to bills. Will these amounts change as the adult child's financial situation improves? Determine who will do certain chores like cleaning, lawn mowing and making meals. Some parents find help around the house more valuable than payment.

Decide whose rules to follow. There may be differences of opinion when it comes to child-rearing. Discuss details like what young children can and can't play with and who will handle disciplining. Adults may need to agree on guidelines for guests, use of personal items, menu choices, and how much to spend on groceries and entertainment.

Set up private space. If possible, designate some space as private even if only on a limited daily basis. Parents may like being empty nesters and their children have learned to live alone. Decide on how much togetherness works for your family.

Don't drain mom and dad's retirement funds. Financial planners warn parents about making financial sacrifices for their adult children. If they use retirement savings to help a child, they may need to turn to their children for financial help later in life. Parents need to be clear about expectations on the money front. Is it a loan or a gift? If it's a loan, consider a contract that spells out terms of repayment.

For more information, listen to "Audio: Helping Senior Parents" in Plan It: Retire Ready Toolkit.

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Despite economy, more CUs adding shared branching

ATLANTA (5/20/09)--More credit unions have joined shared branching year-to-date than in the same period in 2008, CO-OP Shared Branching said Monday.

Between January and April, 43 credit unions were added to the network. Last year, 40 credit unions joined during the same period.

Shared branching is integral for credit unions looking to trim expenses, according to Carroll Beach, CO-OP Shared Branching president and chief operating officer.

"It's a much more affordable way for credit unions to be around every corner than building proprietary branches," he said.

About 80% of this year's new shared-branching participants employ CO-OP's Next Generation Network technology, which facilitates shared-branching transactions. Through the network, credit unions can offer services such as fast-branch kiosks, remote deposit and mobile banking.

CO-OP Financial Services and Credit Union Service Corp. recently joined to form CO-OP Shared Branching, a shared-branching network that services credit unions.

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House, Senate pass corporate stabilization bill

WASHINGTON (5/20/09)—The House and Senate on May 19 approved S. 896, the Helping Families Save Their Homes Act, which would extend $250,000 share and deposit insurance coverage and help credit unions manage the impact of the financial crisis on the credit union system through a corporate stabilization program.

The bill, which passed the House yesterday afternoon on a 367-54 vote, would extend the $250,000 federal share and deposit insurance ceiling until 2013. This ceiling is set to expire at the end of the current year.

Just hours after the House vote, the Senate approved the bill by unanimous consent. The bill now goes to the President, who is expected to sign it before the end of the month.

Under S. 896, the National Credit Union Administration's (NCUA) borrowing authority would also be extended to $6 billion, with a possible further extension to $30 billion under exigent circumstances, under the provisions of the bill.

The legislation, as passed, would also permit credit unions to spread the cost of National Credit Union Share Insurance Fund (NCUSIF) replenishment over a longer time period.

Credit unions would be given eight years to deal with the cost of a premium assessment that has resulted from losses at wholesale corporate credit unions. Credit unions also would be allowed to book any impairments related to the NCUSIF replenishment over a seven-year period.

The NCUA's corporate credit union stabilization plan will be discussed today in a hearing before the House Financial Services subcommittee on financial institutions and consumer credit, with Service 1st FCU President/CEO Bill Lavage speaking on behalf of the Credit Union National Association. NCUA Chairman Michael Fryzel will also represent the regulator in a separate panel during the hearing.

Credit Union National Association President/CEO Dan Mica in a statement yesterday had urged the Senate to approve S. 896 quickly. "This important legislation will help credit unions continue to help their members weather the financial crisis and maintain member confidence in credit unions," Mica said.

After the House vote, NCUA's Fryzel issued a statement, which said, "Congress has acted quickly and appropriately in helping NCUA and the credit union industry deal with the corporate situation through the Corporate Stabilization Program." He added that he hoped the bill would quickly be enacted into law.

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Tuesday, May 19, 2009

City police urge 'no hat/hood/sunglasses' policies

COLUMBUS, Ohio (5/19/09)--City police are urging the credit unions in Westerville, Ohio, to strictly enforce policies that require members to remove their sunglasses, hats or hoods when entering to avoid potential robberies.

Suzanne McCann, vice president of sales and operations at CME FCU in Columbus, Ohio, told The Columbus Dispatch Friday that she witnessed a robbery at the credit union. The robber wore a hat and sunglasses, she said.

CME has a similar "no hats, sunglasses" policy that has been enforced at every branch, the newspaper said. Some credit union members weren't happy with the policy, but McCann said the policy helps keep everyone safe.

Although only a few cities nationwide have "no hats" policies, voluntary participation is increasing, Harry Trombitas, an FBI special agent based in Columbus. Most bank robbers want to avoid conflict, and complying with a request to take a hat or sunglasses off could attract more attention, he said.

There have been 22 Columbus-area robberies this year, five fewer than this time last year, the newspaper said.

Credit unions in several states have adopted "no hat, no hoods, no sunglasses" policies. In 2003, the Delaware Credit Union League provided posters and signs to credit unions that ask member to remove these articles of clothing when they enter the credit union (News Now Aug. 25, 2003). The same year, the Missouri Credit Union Association adopted a similar policy.

Other states with "no hats, hoods or sunglasses" rules include South Carolina, Massachusetts and Oklahoma (News Now June 3, 2005).

Though the policies have been implemented to increase safety, they have been criticized. Earlier this year, a Muslim woman who was a member of Navy FCU said she was denied service from the credit union for wearing a traditional head scarf as required by her religion. Navy Federal contacted the member and apologized to her (News Now Feb. 4).

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Rep. Holmes Norton to chapter: 'No parallel to CUs'

WASHINGTON (5/19/09)--U.S. Rep. Eleanor Holmes Norton (D-D.C.) thanked credit unions for all that they do in the district to help people achieve financial stability during comments made at the D.C. Chapter of the Maryland and District of Columbia Credit Union Association's Annual Legislative Reception and Annual Meeting.

More than 50 credit union leaders and professionals attended the May 14 event, said the association (FOCUS Newsletter May 18).

Norton, a long-time credit union supporter and advocate, praised credit unions' efforts in the current economic environment, saying, "Credit unions are where you want to be. Credit unions didn't cause the current economic crisis. Credit unions played by the rules. Now, credit unions are being asked to do even more to help."

She stated her strong support for the credit union practice of offering membership to people with a minimal deposit requirement. She also pointed out the distinction between democratically operated, member-owned financial institutions and for-profit banks that answer to stockholders. "If you want to be a stockholder or owner, join a credit union."

The credit union philosophy of "people helping people" is really more than words, Norton said, adding that they help people in their local communities by lending in the local communities and advocating financial literacy and consumer responsibility.

"I have been in Congress for 18 years, and I can find no parallel to credit unions. In our society, mutuality has gone dormant. However, members all over the world can go to credit unions because they are trusted and responsible," Norton added.

Other featured guests included District of Columbia Banking Commissioner Thomas Hampton, Washington, D.C. Councilmember Michael Brown and Economist Robert Ebel.

Brown mentioned he is a credit union member and looks forward to working with them on financial services issues, including financial literacy.

Hampton said he has seen firsthand how credit unions serve their members, specifically by educating members on financial issues and leading in the effort to increase awareness of financial literacy.

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Beware companies pushing debt-settlement trap

SAN FRANCISCO (05/18/09)--As millions of hardworking Americans--many of them unemployed--struggle to pay debts, they're increasingly being targeted by debt-settlement companies offering nothing more than false hope and steep fees, triggering investigations of some operations (MarketWatch May 7).

In response to consumer complaints, New York Attorney General Andrew Cuomo has launched a nationwide investigation of 14 debt-settlement companies. The companies are under scrutiny for allegedly charging hefty up-front fees but failing to deliver on promises of debt relief.

Complaints include company representatives telling clients to stop making payments and start saving for a negotiated settlement. Few clients, however, are able to complete the program because they lack sufficient financial resources; they're left in an even worse spot than when they began. While saving for the anticipated settlement, they face creditors who are demanding payment, charging late fees, and imposing penalties. With no contact from the debt settlement company, creditors often ding victims' credit reports and scores, putting their long-term financial security at even greater risk.

Before you get snagged in a trap, know your rights and responsibilities:

Contact creditors directly. You can negotiate credit debt by avoiding the middleman and personally contacting the issuer. Debt-settlement companies won't receive any more favorable debt negotiations than individuals who call directly (Consumer Reports April 14).

Seek a certified credit counselor. The National Foundation for Credit Counseling employs professional counselors to help you pay down debt. Locate counselors at or

Don't pay ahead. The problem with advance payment is that the company has your money independent of the results it delivers. Some debt-settlement companies collect huge up-front fees yet fail to deliver on promised services.

Watch the time frame. If a company tells you the debt-settlement process will take four years or more, just say no--you'll likely be sued by your creditors during that time.

There are legitimate debt-settlement companies that can help, but always check with the Better Business Bureau ( to obtain a reliability rating first.

For more information, read "Tough Times Series: Steps Before, During Layoff Make It Easier to Cope" in Home & Family Finance Resource Center.

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Letter to editor: CUs work to fill lending void

MADISON, Wis. (5/18/09)--Wisconsin credit unions are working to fill the lending void, Wisconsin Credit Union League President/CEO Brett Thompson wrote in a letter to the editor that appeared in The Capital Times Wednesday.

The Capital Times is based in Madison, Wis. Thompson wrote in response to a letter written by a banking trade group in Wisconsin that suggested banks can't "immediately fill the entire void for loans and it is unfair for critics to suggest otherwise."

Credit unions can fill the lending void, Thompson argued, but are prevented from doing so because of a 12.25% member business lending cap.

"Nearly half of credit unions' member business loans go to households with incomes less than $50,000. Credit unions could do more, at no cost to taxpayers, but banks consistently oppose attempts to lift an arbitrary cap on business lending that only applies to credit unions," Thompson said.

The banking trade group's letter also noted that some healthy Wisconsin banks have accepted taxpayer-provided Troubled Asset Relief (TARP) Funds "to take advantage of below-market cost of capital, something that may not fit with every bank's growth plans, but it clearly does for some."

The Wisconsin league president argued that banks accepting TARP money may be doing so as a growth strategy to spur lending, instead of using the money as a bailout.

Last week, Wisconsin business people addressed a congressional oversight panel to express their frustration at the lack of credit available from banks. The panel said only 29% of small business owners can meet their borrowing needs, Thompson noted.

"We suggest that consumers and businesses look to their locally owned, democratically operated credit unions for the funds they need," Thompson added. "And we suggest it is 'unfair,' to use Kurt Bauer's word, for banks to block a ready source of increased funds for small businesses."

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CUs celebrate UBIT victory, await resolution

APPLETON, Wis. (5/18/09)--The Wisconsin credit union that won its lawsuit against the government's interpretation of three insurance products as falling under the unrelated-business income tax (UBIT) took some time Friday to assess the impact of Thursday night's decision by a federal jury.

"We're thrilled," said Cathie Tierney, president/CEO of Appleton, Wis.-based Community First CU, after she admitted being "a little numb" from the four-day ordeal before the U.S. District Court in Green Bay, Wis. The trial involved over more than 100,000 documents and 15 depositions requested by the government, she told News Now.

"It was the culmination of years and hundreds of hours and days and weeks' effort. It was an incredible team effort by partners such as the UBIT Steering Committee and their organizations, and all the attorneys," she said. She noted that "it meant so much to have the Credit Union National Association (CUNA) and CUNA Mutual Group there supporting us."

When Community First filed the suit in January 2008, it was with the support of the UBIT Steering Committee--CUNA, the American Association of Credit Union Leagues, CUNA Mutual Group and the National Association of State Credit Union Supervisors. CUNA General Counsel Eric Richard and CUNA Counsel for Special Projects Michael Edwards were present during the trial.

The collective effort "shows credit unions are very special places in the way that they come together with their resources and ideas," said Tierney.

The Wisconsin Credit Union League also supported the effort, and league President/CEO Brett Thompson testified on behalf of the credit union Tuesday morning. He told News Now that he testified about the history of Wisconsin credit unions, how the league services its member credit unions, and how products such as the insurance and GAO products contribute to the purpose of credit unions in serving their members.

During the trial, the judge ordered witnesses outside the courtroom and told those in the courtroom not to talk about the testimony because other witnesses hadn't testified yet. "It's strange to testify with a (gag) order in place because you don't know what has been said in the courtroom," Thompson told News Now.

"We are pleased by the jury's decision ...that the credit insurance and GAP products sold by Community First CU are substantially related to the purpose of credit unions so that income earned from those sales is not taxable," Thompson said in a statement released by the league.

"These products provide credit unions' member borrowers with greater peace of mind and so can be instrumental in re-starting our economy. This decision ensures consumers won't be denied this opportunity or be forced to pay more for the protection they want," he added.

"But even more important, today's ruling clarifies that these loan-related products are part of the everyday mission and purpose of credit unions. The jury agreed that these services help mitigate losses to the credit union, enabling Community First to make more loans--a central task related to credit unions' mission of serving members."

Thompson said the league was grateful to Tierney and the board and members of the credit union "for challenging the IRS and championing this case for the credit union movement." The ruling, he said, "strengthens the credit union movement's position in other pending litigation related to UBIT issues."

Community First's Tierney told News Now that "we were fortunate to find a jury that was very familiar with credit unions." The jury--three men and five women--took less than two hours to find that all three products at issue were substantially related to the purpose of the credit union's mission--and therefore were not taxable under UBIT.

The trial went "better than expected" in terms of timing and it was a smooth process. But it was hard to hear some of the government's accusations, said Tierney. "It was difficult to listen to the government saying for all intent and purposes that credit unions were 'rip-off artists' and that their [insurance] products were not good," she said.

"We are totally grateful to the two members [Yurri Sauerhammer and Robin Jorde] who testified. They are everyday people willing to tell their story. It was very heartwarming and it shows what special places credit unions are--that we're not a typical financial institutions but are cooperatives serving the best interests of members.

Sauerhammer and Jorde testified about their experiences with the credit life and disability life and guaranteed asset protection products. One of the widows told the court she would have lost her home after her husband died, if it hadn't been for the product.

After the verdict, the government's attorney asked the judge to set aside the verdict in a special oral motion. "My guess is that that is not going to happen," said Tierney. "It was a very decisive victory."

The government's attorney has 10 days in which to file a written motion to set aside the jury's verdict, according to CUNA's Edwards.

Tierney expressed "thanks to everybody in the movement and all the credit unions that supported us in their thoughts. Now we're getting back to running the credit union," she added.

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Compliance Challenge: CUs and paper statements

WASHINGTON (5/18/09)--In this month's Compliance Challenge, a credit union asks if it can eliminate mailing paper statements to reduce costs. But does this affect statements for open-end loans such as credit card accounts and home equity lines of credit (HELOCs)?

The credit union only has to provide a periodic statement for a credit card, HELOC, or other open-end account if a finance charge is imposed during the billing cycle or if a credit or debit balance exists of more than $1, according to the Credit Union National Association.

If there is no activity, no balance, no finance charge, or no credit or debit balance exceeding $1, then no periodic statement would be required for that particular account, according to Regulation Z, Section 226.5 (b)(2).

However, since many credit unions provide a periodic statement that includes share account activity and Reg. E transactions in addition to loan balances, they will provide a periodic statement anyway even if a particular loan balance meets the above criteria and no statement would be required for that particular open-end loan. Otherwise, the statement could indicate a zero balance for the loan or not include the loan information at all.

A periodic statement need not be sent for an account if it is considered as uncollectible by the credit union, or if delinquency collection proceedings have been instituted, or if furnishing the statement would violate federal law.

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Stabilization plans must address CU concerns--CUNA

WASHINGTON (5/18/09)—Credit Union National Association President/CEO Dan Mica on May 15 urged the National Credit Union Administration (NCUA) to "act favorably and expeditiously" to address concerns that credit unions nationwide have raised about NCUA's efforts to stabilize the corporate credit union system.

Citing recent discussions with credit union league presidents, the Association of Corporate Credit Unions, and representatives from various state and federal credit unions, CUNA has asked NCUA to provide credit unions with more detailed information on the assumptions used to determine estimated losses related to mortgage- and asset-backed securities.

Additionally, CUNA recommended that the NCUA waive any penalties that may be assessed on credit unions whose payments into the National Credit Union Share Insurance Fund cause their net worth ratios to fall. CUNA also called on the NCUA to support the use of the Central Liquidity Facility to provide greater liquidity to corporate credit unions.

Existing plans to "extinguish" all capital accounts in WesCorp FCU and all paid-in capital and 63 percent of member capital shares at U.S. Central Corporate FCU could prevent account holders from benefiting from any potential recovery of these credit unions' mortgage- and asset-backed securities. In the letter, CUNA also suggested that NCUA grant a share of any recovery that is gained from these mortgage- and asset-backed securities to capital holders.

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Friday, May 15, 2009

League: CUs in Idaho surviving recession

BOISE, Idaho (5/15/09)--Idaho credit unions have weathered the current U.S. economic recession well, according to Alan Cameron, president/CEO of the Idaho Credit Union League.

The state's first credit union charter was filed in 1934 and now nearly a third of Idaho's residents (514,000) are members of credit unions with 62 credit unions available from which to choose (Idaho Business Review May 11).

"There are places in this state where credit unions are the only financial institution available," he told the publication.

The strength of the credit unions system lies in its conservative nature, Cameron added. "I think that's a point that needs to be stressed,' he said. "The incentive of the organization is to find the best possible way to serve the members, building the [credit union] into a strong financial institution.

"You do have to charge for your services, you do have to charge interest, but what the focus comes down to is what's best for the member," Cameron continued.

When asked if credit unions were suffering as much as banks, Cameron drew a line of separation.

"We haven't had any [credit unions] close this year," he told the Review. "I don't want to downplay that, there have been challenges this year. We did have two credit unions that merged this year. They merged in both instances because their fields of membership basically went away or were no longer viable. Those are factors outside our control. In order to protect the members' money, and provide a continuation of service to the members, often times a [merger] is necessary. It's typical in what we see.

"We've never had a failure of a credit union in Idaho," he added.

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Fryzel encourages CDFI participation

ALEXANDRIA, Va. (5/15/09)--National Credit Union Administration Chairman Michael Fryzel encouraged credit unions to use Community Development Financial Institutions (CDFI) funds to enhance delivery of financial products and services.

"Credit unions have received more than $14 million from the CDFI Fund over the past three years," Fryzel said. "Credit unions are well-suited to benefit from the programs offered by the CDFI Fund."

The fund, created in 1994 under the Treasury, certifies and invests in financial institutions that provide financial products and services primarily to low-income communities or low-income people.

Credit unions may apply for up to $100,000 in Technical Assistance grant funding to build internal capacity or to achieve CDFI certification. Certified CDFI credit unions may apply for up to $2 million in Financial Assistance for capitalization funds to support their overall business plan.

Through the American Recovery and Reinvestment Act of 2009, the CDFI Fund received another $98 million to make awards. Funding is also anticipated for 2010 programs, expected to be announced this fall.

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E-Scan: Brace for recession aftershocks

MADISON, Wis. (5/15/09)--While there are some indications the recession has hit bottom, credit unions should prepare for a few aftershocks in what could be a slow road to recovery, advises the Credit Union National Association's (CUNA) 2009-2010 Credit Union Environmental Scan (E-Scan).

The recession topped this year's list of Top 10 E-Scan Insights, which identifies the key trends and challenges affecting credit unions in the coming years. Credit unions use the E-Scan as a source of issues and trends affecting the financial services industry and to prepare for strategic planning sessions, budgeting, product development and new initiatives.

The top insights, as identified by E-Scan analysts:

Recession--Evidence is building that indicates the economy, while a long way from recovery, might have hit bottom. Credit unions are well-positioned to take advantage of opportunities in the credit and deposit markets, if they're willing to be bold in a time of risk aversion.

Unemployment--The U.S. unemployment rate is the highest it has been in 25 years as employers continue to cut jobs. It could hit 9.5% by year-end and 10.5% in 2010. CUNA economists expect unemployment to continue to increase at about 300,000 jobs per month through the end of 2009.

Housing--Rising foreclosure numbers and the supply of unsold homes puts even more downward pressure on home prices. Analysts say the housing market will continue its slide through 2009, despite reports of higher home sales in some areas and slight improvements in home construction.

Bankruptcy--The weak economy and its repercussions--rising unemployment, lower pay, fewer people with health insurance and the mortgage crisis--all play a role in rising bankruptcies. Analysts expect bankruptcy filings to reach nearly 1.5 million by the end of the year--a 36% increase over the 1.1 million filings in 2008--and surpassing the average number of annual filings (1.4 million) that took place before new bankruptcy laws were enacted in October 2005.

Lending--Although credit union loan growth will fall to 6% in 2009, credit unions should look for excellent lending opportunities in business, auto, student and mortgage lending in 2010. This is because many banks will be reluctant to lend in these areas due to their capital constraints, higher risk aversion, cash hoarding and tighter underwriting standards. Loan growth will rebound in 2010 to an 8% annual growth rate, the strongest pace since 2005.

Membership growth--For the first time in more than 20 years, credit unions saw an increase in the percentage of members in their prime borrowing years (age 25 to 44), to 42% of all members in 2008 from 38% in 2006. At the same time, younger members between the ages of 18 and 24 declined to 4% in 2008 from 6% in 2006. This represents a large, attractive market for credit union growth.

Corporate credit uinions--The National Credit Union Administration (NCUA) will continue to work through its corporate stabilization plan and its corporate restructuring initiative. While the costs and accounting procedures of the plan have yet to be finalized, it's clear the plan will reduce credit union earnings.

Legislation--NCUA's corporate stabilization plan will dominate credit union legislative and regulatory efforts this year and possibly beyond. CUNA will continue to monitor other important issues, such as lifting the business lending cap, mortgage cramdowns and interchange fee income.

Earnings--Credit union return on assets is expected to be only 0.4% in 2009 and 0.5% in 2010 as deteriorating credit quality and slower loan growth reduce earnings. Improving loan credit quality in 2010 will reduce provisions for loan losses and boost credit union earnings.

Consumers--Consumers are saving more and spending less as the national savings rate, below 1% from 2005 to 2008, is now back above 4%. After losing a large portion of their personal wealth, consumers will need help and personal finance education from credit unions to manage their finances and live within their means.

The E-Scan also covers key issue areas: trust, demographics, economics, marketing, lending, financial literacy, payment systems, human resources, and legislation and regulation.

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Sixty gang members nabbed in $500,000 scam vs. CU

SAN DIEGO (5/15/09)--More than 60 members and associates of the San Diego Lincoln Park Street Gang were arrested Tuesday and charged with stealing $500,000 from a credit union by recruiting young credit union members to give up their account information so the account could receive counterfeit check deposits.

The gang then withdrew thousands of dollars from an ATM at a casino and the accomplice account holders, who received a portion of the payout, would file a police report for an unauthorized withdrawal, said California Attorney General Edmund G. Brown Jr. and San Diego District Attorney Bonnie Dumanis in a press release.

In a multi-agency operation termed "Bank Gig," a Tuesday morning pre-dawn sweep by more than 100 law enforcement officers took the suspects into custody. They are being held on 347 felony charges related to conspiracy, grand theft, money laundering, recruiting to commit a felony for a gang, unlawful sale of access card information , burglary and gang enhancement.

After obtaining personal account information and personal identification numbers from members of Navy FCU, gang members would deposit counterfeit checks into the members' accounts, then withdraw thousands from an ATM machine at Barona Casino near San Diego.

"The size, scope and sophistication of this operation show us that criminal street gangs in San Diego are expanding their criminal enterprise into white collar crime," said Dumanis.

The investigation began when the credit union in 2005 reported to the U.S. Secret Service a significant increase in fraud reports from young members reporting their account information and PINs had been stolen.

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Community First CU wins UBIT case

GREEN BAY, Wis. (5/15/09)--Community First CU has won its challenge against the federal government over the Internal Revenue Service's (IRS) interpretation of the unrelated-business income tax (UBIT) as it relates to three insurance products.

Eight jurors delivered the verdict at 5:45 p.m. CT Thursday in favor of the credit union on all three products, according to Michael Edwards, counsel for special projects with the Credit Union National Association (CUNA), who was present in the courtroom. "The jury deliberated less than two hours, which is pretty short," Edwards told News Now.

U.S. District Judge William Griesbach entered the judgment in favor of the credit union for $54,604, the full amount the credit union was seeking, plus costs, which could go into a five-figure amount. The amount represents taxes paid on credit life and credit disability insurance and guaranteed asset protection (GAP) products.

"This is a great outcome for state-chartered credit unions," said CUNA General Counsel Eric Richard, who attended the trial earlier this week. "We hope it will lead the IRS to reconsider its entire position on UBIT for credit unions, but we are prepared for the next case in Denver."

The verdict means that the jury was not persuaded by the government's two key expert witnesses--Birny Birnbaum, a self-employed consulting economist, and Gordon Karels, chairman of the finance department at the University of Nebraska-Lincoln, said Edwards.

Birnbaum and Karels are the only government witnesses in a similar UBIT case involving insurance products filed by Bellco CU of Greenwood, Colo., last May. That complaint seeks a refund of $199,000, based on UBIT taxes paid for 2000, 2001 and 2003.

Community First's trial began Monday in Green Bay, Wis. The Appleton, Wis.-based credit union filed suit against the government in 2008 after the IRS determined that certain GAP and insurance products offered to members fall outside the credit union's main mission and are subject to UBIT.

Earlier in the day Thursday, Judge Griesbach had reversed an earlier preliminary ruling issued last week, in which he said credit disability and credit life insurance could be treated as a single issue under "credit insurance related" issues. Instead, he ruled Thursday that the two products would be treated as separate issues, said Edwards. The judge cited two reasons for the split: 1) factual differences between the two products and 2) different premiums on the products as the y relate to rate of loss for the insurance company.

In its closing argument, the credit union argued that all the insurance products are related to all of the credit union's purposes under Wisconsin law; that the insurance and GAP products are a source of credit with fair and reasonable rates and are directly connected to the loans made; and that the credit union educated members about the products to improve their financial conditions.

In its closing argument, the government argued that the products were "a rip-off" because they were "overpriced" relative to theoretical alternatives (that do not exist on the market). The government also argued that "mystery dollars" were going to CUNA Mutual Insurance Society (CUMIS), the insurer and that several witnesses had ties to CUMIS and were therefore "biased."

Community First filed the suit in January 2008 with the support of the Credit Union National Association, the American Association of Credit Union Leagues, CUNA Mutual Group and the National Association of State Credit Union Supervisors.

The Wisconsin Credit Union League also supported the effort and league President/CEO Brett Thompson testified on behalf of the credit union earlier in the week.

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Thursday, May 14, 2009

Schenk to CNNMoney: Credit markets returning to normalcy

NEW YORK (5/14/09)--Retail sales' unexpected decline in April caused Treasury prices to rise Wednesday, and that may mean the credit market is returning to normalcy, said Mike Schenk, Credit Union National Association senior economist, in an interview with Wednesday.

The three-month Libor rate fell Tuesday to 0.88% from 0.91%. Last week, the three-month rate dropped below 1% for the first time since 1986, the year it began keeping records, said

The decline in the three-month rate is "an indication that frozen credit markets are returning to normalcy," said Schenk.

"Bankers are more willing to lend, not only to each other, but to consumers as well," he told the publication. "The question is, are potential borrowers willing to borrow?"

Consumer confidence remains at historically low levels and unemployment has reached a 25-year high, suggesting that borrowing in the "real economy" is likely to remain depressed, said the article.

Still, lower bank lending rates are encouraging because, said Schenk, "the markets will probably recognize before consumers that things are getting better."

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Wednesday, May 13, 2009

Unemployment, foreclosures fuel Internet scams

YONKERS, N.Y. (5/13/09)--The recession is feeding a wave of cybercrime estimated to cost consumers $8 billion as crooks capitalize on online job searches, desperate homeowners seeking to avoid foreclosure, the soaring popularity of social networking sites, and poorly protected computers ( June 2009).

One of five online consumers fell victim to Web crime in the past two years. Crooks snagged almost two million online shoppers' identities; other IDs were compromised via hacked computers, e-mail scams and financial transactions. And about seven million consumers dished out sensitive information to online phishing attacks.

The Federal Bureau of Investigation's Internet Crime Complaint Center's latest report also revealed that online crime hit a record high in 2008. As vulnerable consumers repeatedly fall victim, scam artists continue to find new, seemingly legitimate ways to take advantage.

Despite the grim news, protect yourself by taking precautions:

Thwart online thefts. The Internet is full of useful software. Try for firewall, antivirus, antispam and antispyware protection--many downloads are free, but some come at a cost.

Use proper security settings on social networking sites. Don't use birth dates, addresses, phone numbers and any other personal information that could make you vulnerable to identity theft.

Don't click on links within messages. If you do, you could be phished. Beware of scams on social networking sites; you are more likely to be caught off guard by phishing messages from your networked friends. Don't provide personal information or follow links in suspicious messages.

Shop cautiously online. Crooks can set up fake e-commerce sites in a few hours. However, even a legitimate site may not be secure because a criminal still can hack in to sensitive data. Always look for a closed padlock in your browser frame and "https" in the URL. Also, check the legitimacy of the business with the Better Business Bureau (

Back it up. Regularly back up important data to prevent a virus from wiping it out and leaving you in the lurch.

For more information, read "Crooks Use High-Tech Scams to Commit Fraud" in Home & Family Finance Resource Center.

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Filene's CU Harmony website aims to connect

MADISON, Wis. (5/13/09)--The Filene Research Institute's i3 innovation group is piloting CU Harmony, a website that connects credit union people with one another to share information and ideas about credit union-related issues.

The website offers listings of credit union topics for others that are seeking information. Visitors can post questions or comment on the ones already posted, or place a "watch" for a particular item of interest.

"CU Harmony can help credit unions reduce their operating expenses, mitigate risks, and enhance compliance training and fraud prevention," said Denise Gabel, Filene chief innovation officer. "We're looking for help from credit union innovators across the nation to help gauge industry interest in making the CU Harmony program available.

The site is a prototype, and Filene is looking for feedback on it through June 15. After that date, the i3 group will meet again to determine the next step. The name of the website also could change.

"We're also asking for specific feedback on the program's functionality so we can refine it before offering it as a fully tested product," Gabel said.

Filene has already received a strong response. CU Harmony has had 139 hits and seven comments from six different credit unions, Gabel added.

website address is:

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Survey: CUs win on trust, reliability, confidence

NEW YORK (5/13/09)--Credit unions made major gains in trust, reliability and confidence during the first four months of 2009, according to a new Trust Study released Tuesday by TNS, a custom research company.

Despite large-scale brand marketing initiatives currently underway, the nation's large national banks, insurance companies and brokerages continued to slip further behind credit unions and smaller regional banks in consumer trust ratings.

Reflecting the economy, consumer trust decreased across the board during the first four months of 2009, with the largest drop for banks and brokerage/investment firms, public sector/government, and automotive sector from the prior period (October 2008 to January 2009.

Although every category saw a drop in confidence levels, credit unions experienced the least decline, with 17% of consumers surveyed saying their trust had declined in the past three months. That compares with 61% whose trust had declined in large national banks, and 24% for small local and regional banks.

"The exceptional news is the way that credit unions are making such positive progress across multiple trust dimensions, despite continuing economic and financial insecurity," said TNS. In the measures "across nine different trust dimensions, including overall, rational and emotional attitudes, consumers surveyed showed significantly greater trust and confidence in these smaller players who they feel show greater understanding and reliability than the large national banks."

"The credit unions alone demonstrated significant bounce-back in consumer trust from January to April 2009," said TNS. It noted there were minor gains for small and regional banks but the "change was not significant."

"The fact that credit unions have improved their consumer trust and confidence scores implies they are doing a better job of engaging their customers and making them feel safe with their financial choices," said Trish Dorsey, senior vice president, financial services brand and communications TNS. "The larger institutions need to step up and take a leadership role in reassuring customers of their financial stability."

"Consumers' continued distrust of large national banks and brokerages is a signal that they are looking to large financial institutions for strength and leadership," Dorsey said. "As a category, it is clear that they have not demonstrated their leadership position effectively and consumers are left feeling inadequately supported and deeply distrustful."

The company surveyed 1,000 U.S. consumers in October 2008 and January and April 2009 to chart trust levels across several major industries.

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UBIT jury hears witnesses on behalf of CU

GREEN BAY, Wis. (5/13/09)--During the second day in the trial over the Internal Revenue Service's interpretation of the unrelated-business income tax (UBIT) related to insurance products at a Wisconsin credit union, the jury heard testimony and depositions from six witnesses and experts on behalf of the credit union.

The trial began Monday in a U.S. District Court in Green Bay, Wis. Community First CU, based in Appleton, Wis., filed suit in January 2008 against the government after the IRS determined that certain guaranteed auto protection (GAP) and insurance products offered to members fall outside the credit union's main mission and are subject to UBIT.

The credit union is seeking a refund of $54,000 in taxes paid on credit life and credit disability insurance and GAP products. Community First filed the suit with the support of the Credit Union National Association (CUNA), the American Association of Credit Union Leagues, CUNA Mutual Group and the National Association of State Credit Union Supervisors.

According to Eric Richard, CUNA general counsel, six witnesses testified.

A judicial order issued by Judge William Griesbach on Monday discourages those in the court room from reporting on the specific content of the testimony, since witnesses who haven't testified yet have been excluded from the courtroom.

"The day began with the jury viewing a videotape of CUNA Vice President of Economics and Statistics Mike Schenk, in which he described a study of the value that Community First CU provides to its members," said Richard.

Others testifying Tuesday on behalf of Community CU included:

Kevin Hartz, senior vice president of branch operations at the credit union. Hartz, who has been with the credit union for 24 years, has experience with the products at issue;

Brett Thompson, president/CEO of the Wisconsin Credit Union League;

Kathy Graham of CUNA Mutual Group, which offers credit life and disability insurance;

Richard Fischer, director of product management at CUNA Mutual Group; and

Robin Jorde, a member of the credit union who has experience with the products.

Also, parts of a deposition from Denise Lynch of Allied Solutions, a provider of GAP insurance products, were read by counsel and a member of the credit union's staff.

Today, the credit union's attorney, Michael M. Conway of Foley and Lardner law firm, plans to call two more witnesses on behalf of the credit union: Jurri Sauerhammer, a member, and expert witness Glenn Potts, a professor of finance at the University of Wisconsin-River Falls.

"Then the government will present its case, with two expert witnesses, and the credit union will present two more rebuttal witnesses, " Richard told News Now.

"There is some possibility that the trial could end ahead of schedule, but that still remains to be seen," he said.

The credit union's lawsuit maintains that the revenue from the sale of the products is "substantially related" to the purposes and functions of the tax-exempt, state-chartered credit union (News Now April 30).

CUNA and the Wisconsin league are following the case closely. Earlier this year, CUNA President/CEO Dan Mica wrote a letter to IRS on the UBIT issues (News Now Feb. 24).

Mica's letter reiterated CUNA's concern that the IRS "may not understand that credit unions are an integral part of the credit markets, especially for consumers, and have been playing a vital role in keeping credit flowing to consumers.

"Tax policies that undermine credit unions' ability to lend are completely at odds with current efforts to free up the credit markets and can contribute to pro-recessionary credit shortages."

Credit unions feel so strongly about the UBIT issue that thousands gave Community First CU President/CEO Cathie Tierney a standing ovation at several conferences, including CUNA's Governmental Affairs Conference in Washington, for filing the lawsuit.

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Tuesday, May 12, 2009

HELOC fraudster convicted for duping CUs, banks

NEWARK, N.J. (5/12/09)--A New York man pleaded guilty Friday to selling Social Security numbers to an identity theft ring that targeted large home equity lines of credit (HELOCs) and siphoned off at least $2.5 million from dozens of credit unions and banks in New Jersey.

Yomi Jagunna, 44, pleaded guilty in a U.S. District Court in Newark of setting up a sham collection agency to gain access to a commercial database and selling 39 Social Security numbers for $30 each to the group.

Prosecutors said they had evidence he mined more than 100,000 Social Security numbers, a statement disputed by the defense attorney (Star-Ledger via May 9).

Jagunna is among eight people charged in New Jersey between August and November 20089 in connection with the alleged ring. They are part of a larger, nationwide ring. So far, 17 people have been charged nationally.

The group targeted victims with large HELOCs, and often transferred more than $100,000 and as high as $800,000 in transfers from the HELOCs.

Members of the theft ring fooled financial institution employees into transferring funds to accounts in at least seven countries. Authorities are still trying to recover the funds.

In the scheme, the ring thwarted credit unions' and banks' attempts to verify the transfers with telephone calls. Some allegedly posed as the victims and persuaded phone company employees to reroute the victims' calls. Then, when the credit union called to verify the transfers, thieves' cell phones would ring and they would "verify" the transfers.

In early 2008, CUNA Mutual Group warned credit unions about the sophisticated fraud scheme. At the time, 18 credit unions had reported losses or fraud attempts totaling more than $6.5 million, and the losses were expected to increase (News Now Jan. 16, 2008).

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UBIT trial begins, judge orders witnesses excluded

GREEN BAY, Wis. (5/12/09)--The trial in the lawsuit brought by a Wisconsin credit union challenging the Internal Revenue Service's interpretation of the unrelated business income tax (UBIT) got underway Monday in a U.S. District Court in Green Bay, Wis., with the judge issuing a ruling to exclude witnesses who haven't yet testified from the courtroom .

The first morning of the trial in Community First CU v. United States of America resulted in the selection of an eight-person jury comprising five women and three men, according to Credit Union National Association (CUNA) General Counsel Eric Richard, who was present at the trial.

U.S. District Court Judge William Griesbach issued an order excluding witnesses who haven't testified yet from the courtroom. "The order 'discourages' those in the court room from reporting on the content of today's testimony," Richard told News Now.

Opening statements were made by the attorneys, Mike Conway of Foley & Lardner, representing the credit union, Appleton, Wis.-based Community First CU, and Allyson Baker, representing the government, said Richard.

Also Monday, the court heard testimony from the plaintiff's first two witnesses, Maurice Dresang, founder and retired CEO of the credit union, and Cathie Tierney, the credit union's current CEO. CUNA Vice President of Economics and Statistics Mike Schenk is scheduled to testify today, via videotape, on behalf of the credit union.

Community First CU filed suit in January 2008 against the government after the IRS determined that certain guaranteed auto protection (GAP) and insurance products offered to members fall outside the credit union's mission and are subject to UBIT. The credit union is seeking a refund of $54,000 it paid in taxes on credit life and credit disability insurance and GAP products (News Now May 11).

The credit union's lawsuit maintains that the revenue from the sale of the products is "substantially related" to the purposes and functions of the tax-exempt, state-chartered credit union (News Now April 30).

The trial is expected to end Friday.

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Monday, May 11, 2009

Retire? Get real

WASHINGTON (5/11/09)--The majority of workers remain confident they will be able to live comfortably in retirement, despite abundant evidence to the contrary, says the latest research.

Consider these numbers from the 2009 Retirement Confidence Survey released by the Employee Benefit Research Institute and Mathew Greenwald & Associates Inc. (April):

Three of four workers report that they and/or their spouses have saved for retirement. About half (54%) of workers believe that they will have enough money for a comfortable retirement. A similar percentage (53%) reports retirement savings--not counting home values and defined benefit plans, if any--of less than $25,000.

About one of three workers (31%) who have not saved for retirement is confident about a comfortable retirement.

Three of four workers who have saved expect to need jobs in retirement to make ends meet.

Because so many pre-retirees seem to think they'll have the same standard of living in retirement with savings of less than one year's current income--or no savings at all--experts recommend that all workers make a realistic effort to become "retirement ready" by taking these first steps today:

Track expenses, and evaluate whether those expenses will continue in retirement;

Create a budget for your current situation;

Determine current net worth;

Get an estimate of pension or 401(k) income possibilities, and determine when you are eligible for retirement;

Get an estimate of your Social Security benefits from or call 800-772-1213;

Determine whom you'll be providing for in retirement, and plan for long-term care for any dependents;

Calculate your life expectancy; and

Set a retirement savings goal and make a plan to reach it.

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CUNA represents CUs at White House meeting

WASHINGTON (5/11/09)--Credit Union National Association President/CEO Dan Mica Friday attended a White House meeting with a group of about 10 financial industry CEOs addressing financial regulatory reform issues.

Senior administration officials, including U.S. Treasury Secretary Timothy Geithner, met with key players in the financial services industry to address such topics as: additional oversight of nonreporting entities; enhanced disclosure and consumer protections; and a need for global communication and coordination.

Also participating in the meeting were senior White House official Pat Parkinson, who is working with Geithner on regulatory reform, and Diana Farrell, a deputy director of the administration's National Economic Council.

Mica said the meeting resulted in productive discussion and a good exchange of ideas. "We appreciated being invited, as part of a select group, as the representative of the credit union industry."

This was the second time this year CUNA was asked to the White House to deliver the credit union message on financial services topics. In March, Mica and CUNA Deputy General Counsel Mary Dunn, attending the unveiling of this administration's small business initiatives, told the president that credit unions want to help small businesses.

The Friday meeting is also a follow up to a meeting Mica had in December with the new administration's Transition Team, which at the time was reviewing all federal agencies, including the National Credit Union Administration. Based on what he heard at the Friday meeting on regulatory reform, Mica concluded, "The administration is serious about moving forward, moving thoughtfully, and moving quickly."

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Friday, May 8, 2009

Even 'Doonesbury' knows a good benefit--CUs

MADISON, Wis. (5/8/09)--Even comic strips know credit unions are a good, desired employee benefit.

Garry Trudeau's comic strip "Doonesbury" mentions credit unions Tuesday as a perk when an employee asks a human resources staffer at the Central Intelligence Agency (CIA) about his CIA employee benefits. Credit unions are part of a "basic civil service package" he's told.

To view the comic strip, use the link.

2009 Youth Saving Challenge smashes record

MADISON, Wis. (5/8/09)--The Credit Union National Association's (CUNA) 2009 National Youth Saving Challenge has more than doubled last year's record in deposits.

The challenge brought in more than $26 million in deposits, compared with $12 million brought in last year.

"By more than doubling the amount they saved last year, our young members have told us loud and clear that they believe in the future," said Dan Mica, CUNA president/CEO. "Their willingness to set money aside for their goals during a severe recession should inspire the rest of us to redouble our efforts to advance the credit union principles of thrift and the productive use of credit. This phenomenal vote of youthful optimism could not have come at a better time."

About 397 credit unions reported receiving deposits from 139,669 young members, including 10,006 who opened new accounts. This year's results average out to $190 deposited per child. Last year's nearly $11.8 million savings total averaged $156 deposited per child, up from $87 per child in the 2004 inaugural year.

For the first time, credit unions had the option of hosting the challenge throughout April, which was National Financial Literacy Month.

"We didn't limit it to National Credit Union Youth Week to give credit unions more flexibility," said Lin Standke, CUNA's manager of youth programs. "There is good news coming out of this economic mess we're in, and it's that youth are learning to save at their credit unions."

CUNA also selected 10 credit unions at random from those who reported their results to receive $100 each, to award to the young saver of their choice. The winning credit unions are:

PCM Employees CU, Green Bay, Wis.;
St. Pius X Church FCU, Rochester, N.Y.;
Good Shepherd CU, Lincoln Park, Mich.;
Eastmill FCU, East Millinocket, Maine;
Mountain Laurel FCU, Saint Marys, Pa.;
Service Plus CU, Riverside, Calif.;
Two Harbors (Minn.) FCU;
Service 1 FCU, Muskegon, Mich.;
Canton (Ohio) Police and Firemens CU; and
Portland (Mich.) FCU.

Next year's Youth Week will be April 18-24.

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CUs with strong MBL programs will lead future

LAS VEGAS (5/7/09)--Credit unions with strong member business lending programs will be the industry's leaders of the future, according to Kent Moon, president/CEO of Member Business Lending LLC.

Moon spoke to attendees of the 2009 National Association of Credit Union Service Organizations (NACUSO) Annual Meeting in Las Vegas Monday. Moon, a former Small Business Administration (SBA) official, noted that if credit unions do not take advantage of the new opportunities presented to them under a new presidential administration, they will miss a "period of tremendous growth."

Moon also noted the impact that President Barack Obama's stimulus plan will have on credit union member business lending programs.

"The temporary elimination of borrower fees has made the SBA programs increasingly attractive to borrowers. And with the 90% guaranty, cap issues have virtually been eliminated," Moon said.

He also provided a "reality check." SBA 7(a) loan product is down about 56% compared with this time last year, yet total volume is up 24% compared with 2000, Moon said.

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CUs are so smart, it's obvious--Oregon ad campaign

BEAVERTON, Ore. (5/7/09)--Credit unions are so smart, it's obvious, according to a Credit Union Association of Oregon (CUAO) ad campaign with animated TV spots that will run through the end of June.

The spots, launched late last month, feature several situations that could get one into trouble--such as salmon fishing next to a grizzly bear. Each spot ends with the question, "So why would you do your banking anywhere besides a credit union?"

"Making the choice between a bank and a credit union has always been clear to those of us in the [credit union] movement and members who have been with us their whole lives. And our economy is only making the distinction more clear," said Laura Wieking, CUAO director of communications. "But we still have a lot of work to do to make consumers understand that credit union membership is available to everyone."

The campaign was funded by voluntary contributions from 49 Oregon credit unions. CUAO has incorporated pre- and post-campaign measurement to gauge the campaign's effectiveness in raising credit union awareness.

To view the spots, use the link.

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Going 'green' means happier employees, members

MADISON, Wis. (5/7/09)--Keep your credit union employees healthy, and they'll be good to your members.

That's the motto that Michigan State University FCU (MSU FCU) in East Lansing has embraced with the construction of its new green headquarters building.

"Our CEO [Patrick McPharlin] is firmly committed to keeping employees happy and making their surroundings nice," Joyce Banish, MSU FCU vice president of university and community public relations, told News Now. "He thinks they will better serve the membership and raise the level of service."

The headquarters building opened in September and is seeking Leadership in Energy and Design (LEED) certification, which should be decided shortly, Banish said. MSU FCU is confident it will receive at least a silver rating, but is aiming for gold.

MSU's building uses an air purification system, thermapane windows and recycled materials such as low toxicity paint on the walls and bamboo floors. Lights automatically turn off if there is enough natural light in the room--and because all of the offices are located on the outside of the building, 75% of the workday's light comes from the sun, Banish said.

"People who are exposed to natural light are happier," Banish added.

The credit union also reduced its water use by 40% with waterless urinals and low-water toilets. Landscaping around the credit union requires little water and the plantings actually filter out oil and runoff, Banish said.

MSU FCU offers employees a cafeteria so they don't have to drive to get lunch, and an exercise room, a walking path and a shower area to encourage them to walk or bike to work. The credit union recommends carpooling and gives employees are given an incentive to drive compact cars by offering them parking spaces near the front of the building.

Besides leaving a smaller footprint, the building has increased energy savings and has made happier, healthier employees. Employees that are happier and healthier will be more productive and have less sick time, and the credit union has better retention, Banish said.

MSU FCU members also "love" the new building, she added. "The university and community are very dedicated to preserving the planet."

A green building can be more costly than a non-green building, but it depends on a building's quality and size. The cost difference between LEED and non-LEED buildings could be a difference of 1% for large buildings, and 5% for smaller buildings.

"The costs are minimal when you consider the energy savings," she said.

Banish said credit unions wishing to go green should:

Use e-statements and e-mail instead of direct mail;
Cut out disposable items--such as styrofoam coffee cups;
Encourage healthier lifestyles for employees to cut down on sick time; and
Upgrade or remodel using recycled materials and low toxicity paints;

In California, Redwood CU (RCU), Santa Rosa, also has embraced green concepts. RCU's administrative office and Santa Rose branch is LEED-certified. The building received a silver rating after RCU remodeled the 1960s-era building. After purchasing the building in 2005, RCU modified it to make it more light and energy efficient.

Some of the features include:

Recycled and/or renewable construction materials, including carpeting, linoleum, hardwood flooring and lighting fixtures, and a recycling program for materials removed from the building during the remodel;
Low-VOC (volatile organic compounds) and formaldehyde-free paints and finishes;
Environmentally sound water-based adhesives for carpet and flooring;
Automatic stepped lighting to maximize the use of natural light, and motion sensors that turn off lights when they detect that a room is unoccupied; and
Water-efficient restrooms, landscaping and irrigation.

"The result of this remodel has not only been an environmentally sound and positive workplace for nearly 200 of RCU's 350 employees, but the facility also provides a comfortable and healthy atmosphere for members to conduct business at the on-site branch and two ATMs," RCU said on its website.

The remodel allowed RCU to consolidate its administrative work force from three buildings into one, reducing the need for cross-town travel. The new facility has a 200-seat community room that provides space for company meetings and events, and events for nonprofits and community groups at no charge.

RCU also pursued green friendly efforts in its new Cloverdale branch, which opened last year. The credit union used green materials for the paint and carpet.

RCU has been recognized for its sustainability efforts by the City of Santa Rosa, the Sonoma County Business Environmental Association and the California Credit Union League.

Robin McKenzie, Redwood CU senior vice president of marketing and public relations, also noted that at a recent annual meeting, the credit union hired a green caterer who offered an environmentally friendly food setup. RCU also participated in a recent parade in Petaluma, Calif., where it provided a hybrid vehicle and handed out recycled shopping totes to attendees.

"We offer a website for tips and resources for members to go green," McKenzie said.

RCU encourages e-statements and use of online banking. It also offers "green" loans, hybrid vehicle loan discounts and socially responsible investments where members can invest their money in funds that maximize return on investment and social responsibility.

"RCU's members, employees and communities are interested more now than ever before in doing business with or working for organizations they can trust, who do the right thing, and who are committed to their communities and the environment," McKenzie told News Now. "RCU is very committed to all of these things, and we work hard to demonstrate our commitment in many ways. We consistently hear from members and employees that they appreciate and feel proud of RCU for our green efforts.

"Being a true partner in sustainable practices and hearing positive feedback from our members, employees and communities is the true reward--even more so than the awards we've received in this area," she said.

For more information, use the links.

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Wednesday, May 6, 2009

Cost-consciousness is the new recession luxury

DES PLAINES, Ill. (5/06/09)--The recession has many Americans re-evaluating the way they spend their hard-earned dollars. About half (53%) of respondents to a recent Gallup poll said they are spending less, and 32% predict this behavior will become the new normal pattern once the recession is over ( Apr. 28).

The necessity vs. luxury perception battle had been moving in the luxury direction for decades, but the looming recession has reversed the trend. A report released April 23 from the Pew Research Center Social and Demographic Trends Project revealed that many items previously perceived as "necessities" are getting booted to the luxury list.

The Pew survey showed the number of respondents who categorize common household items--microwave oven, TV, air conditioning, dishwasher, and clothes dryer--as a necessity has dropped sharply from 2006. Further, the percentage of Americans who consider a TV a necessity is the lowest it has been since the question was first asked more than 35 years ago.

Four of five survey respondents have taken at least some belt-tightening measures during the current economic crisis. Here are a few examples of scaled-back spending:

58% switched to less expensive brands or to discount stores;

28% reduced spending on alcohol or cigarettes—two goods often labeled recession- proof;

24% cut back--or eliminated--their cable or satellite TV subscription; 22% followed suit with their cell phone plan;

21% plan to try out their green thumbs and grow veggies;

20% started performing home repairs or yard work they previously hired out; and

16% got rid of unwanted items by holding a garage sale or listing them on the Internet.

For more information, read "Tough Times Series: Steps Before, During Layoff Make It Easier to Cope" in Home & Family Finance Resource Center.

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