WASHINGTON (12/23/09)--The National Credit Union Administration (NCUA), along with the federal bank and thrift regulatory agencies, Monday announced publication of a revised identity theft brochure to assist consumers in preventing and resolving identity theft.
The updated brochure, "You Have the Power to Stop Identity Theft," focuses primarily on Internet "phishing" by describing how phishing works, offering ways to protect against identity theft, and detailing steps to follow for victims of identity theft.
The brochure includes contact information for three major credit bureaus, where to report suspicious e-mails, and where to access additional information.
The brochure is available to download from the websites of the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, NCUA, and Office of Thrift Supervision.
Use the resource link below to access the new brochure or other ID theft resources for credit unions.
courtesy of cuna.org
Tuesday, December 23, 2008
USA Today: Small FIs see more deposits from banks
NEW YORK (12/23/08)--Credit unions are mentioned favorably in a USA Today article about smaller financial institutions receiving deposit inflows stemming from the problems of the nation's larger banks.
The nationwide newspaper reported that "as the top tier of the financial services industry faltered, small and regional banks, as well as credit unions, started seeing their cash deposits rise dramatically as nervous Americans shied away from big banks. And despite rampant headlines about a credit freeze and plunging housing market, they have even been writing more home loans this year than last year" (USA Today Dec. 22).
Sebrina Verburgt, senior vice president of operations at United Heritage CU, Austin, Texas, told the newspaper that new members bearing cash are streaming into the $552 million asset credit union's 11 branches. The deposits are from accounts at larger banks. In September, the credit union's new checking accounts increased 52% from a year earlier. They also grew 35% in July and 43% in August.
Verburgt, who said the increases were unprecedented, noted the account with the most growth offers an annual yield of 5.01%, compared with the nationwide average of 0.22% on bank checking accounts.
USA Today also interviewed a United Heritage CU member, Clay Strange of Lakeway, Texas, who moved $20,000 into United Heritage from his money market account at Charles Schwab after reading that some money market funds were unstable. He told the newspaper he wanted his money in something that was "clearly insured."
The newspaper also interviewed Mina Worthington, CEO of Yakima Valley CU, a $240.9 million asset credit union based in Yakima, Wash. The credit union took in 433 new members in September, a 57% increase from a year earlier. It added 416 new members in October, a 22% increase. The balances on these accounts are higher, on average, she said.
Washington is headquarters of Washington Mutual Bank, which became the largest bank failure in U.S. history.
courtesy of cuna.org
The nationwide newspaper reported that "as the top tier of the financial services industry faltered, small and regional banks, as well as credit unions, started seeing their cash deposits rise dramatically as nervous Americans shied away from big banks. And despite rampant headlines about a credit freeze and plunging housing market, they have even been writing more home loans this year than last year" (USA Today Dec. 22).
Sebrina Verburgt, senior vice president of operations at United Heritage CU, Austin, Texas, told the newspaper that new members bearing cash are streaming into the $552 million asset credit union's 11 branches. The deposits are from accounts at larger banks. In September, the credit union's new checking accounts increased 52% from a year earlier. They also grew 35% in July and 43% in August.
Verburgt, who said the increases were unprecedented, noted the account with the most growth offers an annual yield of 5.01%, compared with the nationwide average of 0.22% on bank checking accounts.
USA Today also interviewed a United Heritage CU member, Clay Strange of Lakeway, Texas, who moved $20,000 into United Heritage from his money market account at Charles Schwab after reading that some money market funds were unstable. He told the newspaper he wanted his money in something that was "clearly insured."
The newspaper also interviewed Mina Worthington, CEO of Yakima Valley CU, a $240.9 million asset credit union based in Yakima, Wash. The credit union took in 433 new members in September, a 57% increase from a year earlier. It added 416 new members in October, a 22% increase. The balances on these accounts are higher, on average, she said.
Washington is headquarters of Washington Mutual Bank, which became the largest bank failure in U.S. history.
courtesy of cuna.org
Return policies more lenient this holiday
BOSTON (12/22/08)--Good news for shoppers: Expect the majority of stores this holiday season to implement more lenient return policies, making for happier returns (ConsumerWorld.org Dec. 15).
Reversing a trend of more restrictive policies in recent years, some stores this year have reduced restocking fees and extended deadlines for returns, according to results from the ConsumerWorld.org annual return policy survey.
That's not the case for all stores; some retailers continue using shortened return periods, or no refunds at all, so it pays to ask before you pull out your wallet. And many stores require stricter return policies for electronics than for, say, clothing--referred to as a tiered return policy.
To increase your chances of experiencing a no-hassle return in the coming weeks, follow guidelines from the National Retail Federation:
Ask about returns before you buy. If the policy is not prominently displayed, ask a sales associate or manager to explain it to you.
Save all receipts. Don't expect retailers to exchange merchandise without a receipt. Without one, your request to return an item may be denied, or you may be given credit for the lowest price the item was sold for during the holiday season.
Ask for gift receipts. Include the gift receipt in the wrapped gift making it easier for recipients to do their own exchange.
Give gifts in original packaging, with tags. Resist the urge to open a sealed package or play with the item.
Know the return policy for online purchases. Ask who pays for shipping the return, where you make the return, and whether there's a service center that handles returns.
For more information, read "What Happens to Unused Gift Card Cash?" in Home & Family Finance Resource Center.
courtesy of cuna.org
Reversing a trend of more restrictive policies in recent years, some stores this year have reduced restocking fees and extended deadlines for returns, according to results from the ConsumerWorld.org annual return policy survey.
That's not the case for all stores; some retailers continue using shortened return periods, or no refunds at all, so it pays to ask before you pull out your wallet. And many stores require stricter return policies for electronics than for, say, clothing--referred to as a tiered return policy.
To increase your chances of experiencing a no-hassle return in the coming weeks, follow guidelines from the National Retail Federation:
Ask about returns before you buy. If the policy is not prominently displayed, ask a sales associate or manager to explain it to you.
Save all receipts. Don't expect retailers to exchange merchandise without a receipt. Without one, your request to return an item may be denied, or you may be given credit for the lowest price the item was sold for during the holiday season.
Ask for gift receipts. Include the gift receipt in the wrapped gift making it easier for recipients to do their own exchange.
Give gifts in original packaging, with tags. Resist the urge to open a sealed package or play with the item.
Know the return policy for online purchases. Ask who pays for shipping the return, where you make the return, and whether there's a service center that handles returns.
For more information, read "What Happens to Unused Gift Card Cash?" in Home & Family Finance Resource Center.
courtesy of cuna.org
CUNA: Obama urged to back removing biz loan cap
WASHINGTON (12/19/08)--President-elect Barack Obama has been asked by the Credit Union National Association (CUNA) to encourage the U.S. Congress to eliminate the cap on member business lending (MBL) by credit unions.
In a letter to the incoming President, CUNA President/CEO Dan Mica noted that during a Thursday press conference Obama remarked that problems in the U.S. economy will continue "if small and large businesses cannot get access to enough credit."
Mica wrote that if the cap on MBLs on credit unions were lifted, credit unions could lend up to an additional $10 billion to the nation's businesses in the first 12 months of being granted the authority.
"This is an economic stimulus measure that does not cost the taxpayers a dime, and does not increase the size of government," Mica wrote.
The Dec. 18 letter follows a similar one sent by CUNA to members of the House Financial Services Committee. CUNA noted that credit unions are continuing to lend, even in these difficult economic and financial times, helping consumers and the economy.
The letter asked lawmakers to allow credit unions to do even more by removing the MBL cap through economic stimulus legislation.
Use the resource link below to see the complete texts of the CUNA letters.
courtesy of cuna.org
In a letter to the incoming President, CUNA President/CEO Dan Mica noted that during a Thursday press conference Obama remarked that problems in the U.S. economy will continue "if small and large businesses cannot get access to enough credit."
Mica wrote that if the cap on MBLs on credit unions were lifted, credit unions could lend up to an additional $10 billion to the nation's businesses in the first 12 months of being granted the authority.
"This is an economic stimulus measure that does not cost the taxpayers a dime, and does not increase the size of government," Mica wrote.
The Dec. 18 letter follows a similar one sent by CUNA to members of the House Financial Services Committee. CUNA noted that credit unions are continuing to lend, even in these difficult economic and financial times, helping consumers and the economy.
The letter asked lawmakers to allow credit unions to do even more by removing the MBL cap through economic stimulus legislation.
Use the resource link below to see the complete texts of the CUNA letters.
courtesy of cuna.org
Pa. Supreme Court reinstates community charter for CU
HARRISBURG, Pa. (12/19/08)--The Pennsylvania Supreme Court Thursday reinstated Belco Community CU's seven-county community charter for central Pennsylvania, reaffirming the Pennsylvania Department of Banking's initial decision that was overruled in state court.
In addition, the Supreme Court also remanded the case back to state court on a constitutional issue regarding the bankers' rights to information contained in the credit union's application and to public debate (Life is a Highway Dec. 18).
"Throughout the litigation, there's been a legal tug of war between the bankers' desire to obtain information from Belco Community's application and the credit union's desire to maintain the confidentiality of information it deemed proprietary," said Rick Wargo, Pennsylvania Credit Union Association (PCUA) executive vice president/general counsel.
The issue will be addressed by the state court sometime next year.
"This is a win for Belco Community CU and all Pennsylvania credit unions," said Jim McCormack, PCUA president/CEO. "It's unfortunate that this isn't the end of the road on this matter. We will continue working with the Department of Banking as the case goes back to [state court]."
PCUA staff is conducting further analysis on the ruling.
The $268.6 million asset, Harrisburg, Pa.-based Belco Community CU; PCUA; Department of Banking; and bank parties presented oral arguments regarding the community charter to the Pennsylvania Supreme Court on April 16.
courtesy of cuna.org
In addition, the Supreme Court also remanded the case back to state court on a constitutional issue regarding the bankers' rights to information contained in the credit union's application and to public debate (Life is a Highway Dec. 18).
"Throughout the litigation, there's been a legal tug of war between the bankers' desire to obtain information from Belco Community's application and the credit union's desire to maintain the confidentiality of information it deemed proprietary," said Rick Wargo, Pennsylvania Credit Union Association (PCUA) executive vice president/general counsel.
The issue will be addressed by the state court sometime next year.
"This is a win for Belco Community CU and all Pennsylvania credit unions," said Jim McCormack, PCUA president/CEO. "It's unfortunate that this isn't the end of the road on this matter. We will continue working with the Department of Banking as the case goes back to [state court]."
PCUA staff is conducting further analysis on the ruling.
The $268.6 million asset, Harrisburg, Pa.-based Belco Community CU; PCUA; Department of Banking; and bank parties presented oral arguments regarding the community charter to the Pennsylvania Supreme Court on April 16.
courtesy of cuna.org
ID theft expert: Why be me when I can be you?
WASHINGTON (12/19/08)--This week's H&FF Radio show features a security expert who explains how--and why--identity thieves continue to find new and improved ways of stealing your identity.
Home & Family Finance airs Sundays at 3 p.m. EST on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network.
The Credit Union National Association (CUNA) and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites.
Sunday's show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
"How to Be the Family CFO: 4 Simple Steps to Put Your Financial House in Order," with Kim Snider, CEO of Snider Advisors and author of "How to Be the Family CFO: 4 Simple Steps to Put Your Financial House in Order," Dallas, Texas;
"The Truth About Identity Theft: Why Be Me When I Can Be You?" with Jim Stickley, founder, vice president of engineering and chief technology officer, Trace Security, San Diego, Calif., and author of "The Truth About Identity Theft: Why Be Me When I Can Be You?";
"Coupon Comeback--Saving You $$," with Steven Gray, chief operating officer, Money Mailer, Garden Grove, Calif.; and
Listener Q&A.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; Western Corporate FCU, and its member credit unions, also known as WesCorp; and the Defense Credit Union Council, and member credit unions, serving those who serve our country worldwide. For more information, read "Sending Out an S.O.S.--Finding Help for the Small-Business Owner" in Home & Family Finance Resource Center.
courtesy of cuna.org
Home & Family Finance airs Sundays at 3 p.m. EST on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network.
The Credit Union National Association (CUNA) and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites.
Sunday's show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
"How to Be the Family CFO: 4 Simple Steps to Put Your Financial House in Order," with Kim Snider, CEO of Snider Advisors and author of "How to Be the Family CFO: 4 Simple Steps to Put Your Financial House in Order," Dallas, Texas;
"The Truth About Identity Theft: Why Be Me When I Can Be You?" with Jim Stickley, founder, vice president of engineering and chief technology officer, Trace Security, San Diego, Calif., and author of "The Truth About Identity Theft: Why Be Me When I Can Be You?";
"Coupon Comeback--Saving You $$," with Steven Gray, chief operating officer, Money Mailer, Garden Grove, Calif.; and
Listener Q&A.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; Western Corporate FCU, and its member credit unions, also known as WesCorp; and the Defense Credit Union Council, and member credit unions, serving those who serve our country worldwide. For more information, read "Sending Out an S.O.S.--Finding Help for the Small-Business Owner" in Home & Family Finance Resource Center.
courtesy of cuna.org
CUs noted by CBS News
NEW YORK (12/18/08)--Credit unions received a positive mention from CBS News Tuesday night during a story that aired about credit card practices.
CBS interviewed a consumer whose Bank of America credit card's interest rates ballooned, even though she told CBS that she pays all of her bills on time. The card's rate jumped because the rate the consumer had on another card increased.
Frustrated, the consumer closed her Bank of America account and joined Ascend FCU in Tullahoma, Tenn., where CBS said "she has a voice in making the rules."
Ascend FCU has $1.142 billion in assets.
To watch the video, use the link.
courtesy of cuna.org
CBS interviewed a consumer whose Bank of America credit card's interest rates ballooned, even though she told CBS that she pays all of her bills on time. The card's rate jumped because the rate the consumer had on another card increased.
Frustrated, the consumer closed her Bank of America account and joined Ascend FCU in Tullahoma, Tenn., where CBS said "she has a voice in making the rules."
Ascend FCU has $1.142 billion in assets.
To watch the video, use the link.
courtesy of cuna.org
Best boss secrets revealed by CUNA webinar
MADISON, Wis. (12/18/08)--Credit union professionals can learn the secrets to becoming the best bosses possible during a new Credit Union National Association (CUNA) webinar in the first quarter of 2009.
"My Best Boss Ever" will feature Rory Rowland, consultant and author of "My Best Boss Ever: How the Best Bosses Earn Trust, Respect, and Admiration of Their Employees for a Lifetime." The Jan. 14 webinar will reveal how the best bosses motivate their employees without money or bonuses, along with strategies and tips to improve leadership skills.
Other webinars highlighted during the first quarter include:
Members can be helped to understand what elements from their credit reports most affect their credit scores during "Credit Reporting--How to Use This Tool" Feb. 4. The webinar will also help lending professionals, financial counselors, and member service staff learn to identify issues their members need to address to improve creditworthiness.
Credit union professionals can learn how to improve credit union incentive plans during "Incentive Plans That Work." The March 18 webinar will highlight incentive plans from credit unions and how they were implemented. It will also demonstrate how a good plan can mean success and growth for a credit union.
"Residential Mortgage Underwriting for Self-Employed Borrowers" will help lending professionals work through different income sources and multiple situations to qualify self-employed members for loans. The March 24 offering will also explore different types of businesses and how to use a worksheet to reconcile tax return figures.
More than a dozen webinars will take place during the first quarter of 2009 to educate credit union personnel about: finance and economics; human resources and training; security; lending and collections; management and leadership; marketing and business development; operations, sales, and service; and regulatory compliance.
Archived versions of many recent webinars are also available.
During a webinar, students hear and see a presentation, ask questions of the instructor, and refer to handouts.
For a complete list of classes, additional information and registration materials, use the link.
courtesy of cuna.org
"My Best Boss Ever" will feature Rory Rowland, consultant and author of "My Best Boss Ever: How the Best Bosses Earn Trust, Respect, and Admiration of Their Employees for a Lifetime." The Jan. 14 webinar will reveal how the best bosses motivate their employees without money or bonuses, along with strategies and tips to improve leadership skills.
Other webinars highlighted during the first quarter include:
Members can be helped to understand what elements from their credit reports most affect their credit scores during "Credit Reporting--How to Use This Tool" Feb. 4. The webinar will also help lending professionals, financial counselors, and member service staff learn to identify issues their members need to address to improve creditworthiness.
Credit union professionals can learn how to improve credit union incentive plans during "Incentive Plans That Work." The March 18 webinar will highlight incentive plans from credit unions and how they were implemented. It will also demonstrate how a good plan can mean success and growth for a credit union.
"Residential Mortgage Underwriting for Self-Employed Borrowers" will help lending professionals work through different income sources and multiple situations to qualify self-employed members for loans. The March 24 offering will also explore different types of businesses and how to use a worksheet to reconcile tax return figures.
More than a dozen webinars will take place during the first quarter of 2009 to educate credit union personnel about: finance and economics; human resources and training; security; lending and collections; management and leadership; marketing and business development; operations, sales, and service; and regulatory compliance.
Archived versions of many recent webinars are also available.
During a webinar, students hear and see a presentation, ask questions of the instructor, and refer to handouts.
For a complete list of classes, additional information and registration materials, use the link.
courtesy of cuna.org
Wednesday, December 17, 2008
Teach your little ones about holiday gift giving
MADISON, Wis. (12/15/08)--Even in good economic times, holiday gift-giving can be a bust-the-budget enterprise. Year-end holidays often encourage runaway expectations that bring out the worst in all of us. And what we do, our children mimic, often for a lifetime.
Turn your holidays into a fun learning experience for your child by showing what makes a gift special—not its price tag, but its meaning. Philip Heckman, director of youth programs at Credit Union National Association, Madison, Wis., offers these tips:
Help your child make gifts that don't cost money. Thrive by 5 (creditunion.coop, click Thrive by 5 logo) is a free website for parents who want to teach their preschoolers about spending (or not spending) and saving. One of the activities contains ideas for no-cost gifts suitable for young children to make.
Establish inexpensive holiday traditions that involve your child. Decorating, baking, and visiting special people can result in feelings and memories that last far longer than the latest hot toys.
Spend quiet time alone with your child. Nothing is more precious than the gift of time, says Heckman. Regularly schedule a few minutes before bedtime for you to sit together with your child. Read, sing, and tell stories about your childhood, bringing your fondest holiday memories to life in another generation.
courtesy of cuna.org
Turn your holidays into a fun learning experience for your child by showing what makes a gift special—not its price tag, but its meaning. Philip Heckman, director of youth programs at Credit Union National Association, Madison, Wis., offers these tips:
Help your child make gifts that don't cost money. Thrive by 5 (creditunion.coop, click Thrive by 5 logo) is a free website for parents who want to teach their preschoolers about spending (or not spending) and saving. One of the activities contains ideas for no-cost gifts suitable for young children to make.
Establish inexpensive holiday traditions that involve your child. Decorating, baking, and visiting special people can result in feelings and memories that last far longer than the latest hot toys.
Spend quiet time alone with your child. Nothing is more precious than the gift of time, says Heckman. Regularly schedule a few minutes before bedtime for you to sit together with your child. Read, sing, and tell stories about your childhood, bringing your fondest holiday memories to life in another generation.
courtesy of cuna.org
Year-end tax planning with some twists
NEW YORK (12/17/08)--Although many time-honored tax planning strategies still work for many people, this year may be a bit trickier because of recent stock market woes (The Wall Street Journal Dec. 3).
It's estimated that there have been more than 500 changes to the Internal Revenue Code this year, and it's possible another economic stimulus package may contain even more. But that's not a reason to procrastinate--some advice may be worth heeding sooner rather than later. Visit with your financial and tax professionals about the implications of these actions:
Consider taking the standard deduction. A new tax law stipulates that even if you claim the standard deduction for 2008, you can take an additional amount to reflect real-estate taxes. This means that some people who itemized in the past may be better off taking the standard deduction, depending on their situation. If you choose this route, you also may be better off deferring charitable donations and state and local taxes into next year, when you might again choose to itemize.
Watch out for AMT. If you're trapped by the alternative minimum tax (ATM), this may be another situation in which you're better off not prepaying your state and local taxes due in early 2009.
Dump losers. If some of your investments suffered significant losses, consider getting rid of them before December 31. Those losses may turn into valuable tax savings.
Put excess RMD into IRA. If you're receiving distributions from your qualified retirement plan, consider rolling over the entire balance—or your distributions in excess of any required minimum distribution (RMD)—into an individual retirement account (Meridian Star Nov. 23). To avoid paying taxes on those distributions, though, you must do this as custodian to custodian, or within 60 days, and there may be restrictions or limitations. Speak with a financial adviser to see if this strategy is right for you.
Gift without the gift tax. This year, you can give up to $12,000 (per donor, per recipient) without triggering gift taxes. Next year, the gift tax exclusion increases to $13,000.
Set aside college funds. Take advantage of a law that lets you give a single contribution—covering five years—to a 529 college savings plan. For example, you can give a maximum of $60,000—or five years of gifting—per recipient tax-free in one year.
Hire a good accountant. The money you save by hiring a smart professional likely will be more than the price you pay for tax preparation. And you're likely to be that much further ahead for next year.
For more information, listen to, "Choosing Your Tax Preparer and Volunteer Income Tax Assistance Program (VITA)" in Home & Family Finance Resource Center.
courtesy of cuna.org
It's estimated that there have been more than 500 changes to the Internal Revenue Code this year, and it's possible another economic stimulus package may contain even more. But that's not a reason to procrastinate--some advice may be worth heeding sooner rather than later. Visit with your financial and tax professionals about the implications of these actions:
Consider taking the standard deduction. A new tax law stipulates that even if you claim the standard deduction for 2008, you can take an additional amount to reflect real-estate taxes. This means that some people who itemized in the past may be better off taking the standard deduction, depending on their situation. If you choose this route, you also may be better off deferring charitable donations and state and local taxes into next year, when you might again choose to itemize.
Watch out for AMT. If you're trapped by the alternative minimum tax (ATM), this may be another situation in which you're better off not prepaying your state and local taxes due in early 2009.
Dump losers. If some of your investments suffered significant losses, consider getting rid of them before December 31. Those losses may turn into valuable tax savings.
Put excess RMD into IRA. If you're receiving distributions from your qualified retirement plan, consider rolling over the entire balance—or your distributions in excess of any required minimum distribution (RMD)—into an individual retirement account (Meridian Star Nov. 23). To avoid paying taxes on those distributions, though, you must do this as custodian to custodian, or within 60 days, and there may be restrictions or limitations. Speak with a financial adviser to see if this strategy is right for you.
Gift without the gift tax. This year, you can give up to $12,000 (per donor, per recipient) without triggering gift taxes. Next year, the gift tax exclusion increases to $13,000.
Set aside college funds. Take advantage of a law that lets you give a single contribution—covering five years—to a 529 college savings plan. For example, you can give a maximum of $60,000—or five years of gifting—per recipient tax-free in one year.
Hire a good accountant. The money you save by hiring a smart professional likely will be more than the price you pay for tax preparation. And you're likely to be that much further ahead for next year.
For more information, listen to, "Choosing Your Tax Preparer and Volunteer Income Tax Assistance Program (VITA)" in Home & Family Finance Resource Center.
courtesy of cuna.org
Chrysler joins 'Invest in America' CU partnership
LANSING, Mich. (12/17/08)--After the launch of the "Invest in America" credit union loan partnership last week, Chrysler Corporation LLC announced it will join the alliance.
This gives 1,295 credit unions in Michigan, Ohio, Indiana and Illinois access to cash discounts for its members from two of America's three domestic automakers and access to financing on new vehicle purchases.
"Invest in America" is also one step closer to going nationwide; Chrysler will expand the pilot program in eight additional states, as well as the original four Midwest states. This will make available an additional $12 billion in auto loans for the program and bring discounts to another 14 million credit union members.
The program started Tuesday and runs through June 30, 2009. It offers "Credit Union Member Cash" rebates of $500 or $1,000 on eligible Chrysler, Jeep and Dodge vehicles. The rebates will be exclusively for credit union members who also obtain their financing from a credit union, layering on top of other incentives.
"The Invest in America" program will provide access to affordable financing options and special discounts for credit union members who want to purchase a new Chrysler, Jeep or Dodge vehicle," said Steven Landry, Chrysler executive vice president of North American Sales. "We are confident that the 'Invest in America' program and 'Credit Union Member Cash' will provide significant value for our customers and the economy as a whole during these challenging economic times."
To gain access to the rebates, credit union members can bring proof of credit union financing to a Chrysler dealership. Credit union loan rates average 5.4% compared to 6.9% for bank rates according to Datatrac, a survey company that tracks auto loan rates. Participation requires that the consumer belongs to a credit union.
Credit union members in the pilot states or those that would like to join can learn more about the special rebates by using the resource link.
"'The Invest in America' vision is to create a win-win program in which credit unions pledge billions in low-cost credit union financing and strong marketing support in return for exclusive credit union member discounts and rebates," said David Adams, Michigan Credit Union League president/CEO. "Credit unions have always focused on service to their members and communities. This program simply expands that vision to apply much needed financing assistance to help boost domestic auto sales."
Eight additional states taking part in the "Credit Union Member Cash" rebates are Oklahoma, Texas, Kentucky, Arkansas, Tennessee, Louisiana, New Mexico and Mississippi.
"Invest in America" was created by CUcorp, a marketing company based in Livonia, Mich., and a wholly-owned subsidiary of the Michigan Credit Union League. There are plans to bring "Invest in America" nationwide, possibly by the second quarter of 2009.
courtesy of cuna.org
This gives 1,295 credit unions in Michigan, Ohio, Indiana and Illinois access to cash discounts for its members from two of America's three domestic automakers and access to financing on new vehicle purchases.
"Invest in America" is also one step closer to going nationwide; Chrysler will expand the pilot program in eight additional states, as well as the original four Midwest states. This will make available an additional $12 billion in auto loans for the program and bring discounts to another 14 million credit union members.
The program started Tuesday and runs through June 30, 2009. It offers "Credit Union Member Cash" rebates of $500 or $1,000 on eligible Chrysler, Jeep and Dodge vehicles. The rebates will be exclusively for credit union members who also obtain their financing from a credit union, layering on top of other incentives.
"The Invest in America" program will provide access to affordable financing options and special discounts for credit union members who want to purchase a new Chrysler, Jeep or Dodge vehicle," said Steven Landry, Chrysler executive vice president of North American Sales. "We are confident that the 'Invest in America' program and 'Credit Union Member Cash' will provide significant value for our customers and the economy as a whole during these challenging economic times."
To gain access to the rebates, credit union members can bring proof of credit union financing to a Chrysler dealership. Credit union loan rates average 5.4% compared to 6.9% for bank rates according to Datatrac, a survey company that tracks auto loan rates. Participation requires that the consumer belongs to a credit union.
Credit union members in the pilot states or those that would like to join can learn more about the special rebates by using the resource link.
"'The Invest in America' vision is to create a win-win program in which credit unions pledge billions in low-cost credit union financing and strong marketing support in return for exclusive credit union member discounts and rebates," said David Adams, Michigan Credit Union League president/CEO. "Credit unions have always focused on service to their members and communities. This program simply expands that vision to apply much needed financing assistance to help boost domestic auto sales."
Eight additional states taking part in the "Credit Union Member Cash" rebates are Oklahoma, Texas, Kentucky, Arkansas, Tennessee, Louisiana, New Mexico and Mississippi.
"Invest in America" was created by CUcorp, a marketing company based in Livonia, Mich., and a wholly-owned subsidiary of the Michigan Credit Union League. There are plans to bring "Invest in America" nationwide, possibly by the second quarter of 2009.
courtesy of cuna.org
Nevada CUs feeling strains, but ready to ride out economic storm
LAS VEGAS (12/16/08)--Although two Nevada banks failed this year, no Nevada credit unions have failed or merged because of financial problems, according to the Las Vegas Review-Journal.
Delinquencies at Nevada credit unions were 1.5%--a number that banks and other financial institutions "would kill for," Daniel Penrod, industry analyst for the California and Nevada Credit Union League, told the newspaper Friday.
Nevada credit unions are feeling some economic strains, but Cumorah CU, Las Vegas, has put some money aside for a "rainy day" and is ready to ride out the storm, Tony Mook, Cumorah CU CEO told the newspaper. The credit union looks at the economic troubles as a time to "hunker down," he added.
The $14.9-million-asset Cumorah has experienced some losses due to loan delinquencies, but Mook said he hopes to reduce the credit union's delinquency rate by the end of the year.
Clark County CU, Las Vegas; Boulder Dam CU, Boulder City; and several other small credit unions received four of five stars for safety and soundness at Bankrate.com, the newspaper said.
courtesy of cuna.org
Delinquencies at Nevada credit unions were 1.5%--a number that banks and other financial institutions "would kill for," Daniel Penrod, industry analyst for the California and Nevada Credit Union League, told the newspaper Friday.
Nevada credit unions are feeling some economic strains, but Cumorah CU, Las Vegas, has put some money aside for a "rainy day" and is ready to ride out the storm, Tony Mook, Cumorah CU CEO told the newspaper. The credit union looks at the economic troubles as a time to "hunker down," he added.
The $14.9-million-asset Cumorah has experienced some losses due to loan delinquencies, but Mook said he hopes to reduce the credit union's delinquency rate by the end of the year.
Clark County CU, Las Vegas; Boulder Dam CU, Boulder City; and several other small credit unions received four of five stars for safety and soundness at Bankrate.com, the newspaper said.
courtesy of cuna.org
N.J. CUs 'in good shape' league says
HIGHTSTOWN, N.J. (12/16/08)--Although New Jersey Credit Unions are "in good shape overall," some likely will participate in a recently announced National Credit Union Administration (NCUA) plan to offer credit union low-interest loans to stave off mortgage foreclosures and spark lending, said the New Jersey Credit Union League.
Any programs that help members stay in their homes will be embraced, said Paul Gentile, league president/CEO (The Record Dec. 12).
The NCUA's CU Homeowners Affordability Relief Program (CU Harp) will allow credit unions to borrow at favorable rates from the Central Liquidity Facility, and receive a 100- basis point spread on the funds if credit unions in return modify a similar amount of at risk mortgages, the Credit Union National Association said. This would be a two-year program, dispensing up to roughly $2 billion.
New Jersey credit unions are not immune to the effects of the U.S. financial crisis and recession, John Fenton, president of the $1.8 billion asset, Basking Ridge, N.J.-based Affinity CU, told the newspaper.
Although the credit union's mortgage portfolio has no problems, the credit union is beginning to see some members falling behind on mortgage payments, he added.
Affinity's philosophy is that it doesn't want to own foreclosed homes, Fenton told the paper. However, he said he wants to learn more about the program before deciding if Affinity will participate.
courtesy of cuna.org
Any programs that help members stay in their homes will be embraced, said Paul Gentile, league president/CEO (The Record Dec. 12).
The NCUA's CU Homeowners Affordability Relief Program (CU Harp) will allow credit unions to borrow at favorable rates from the Central Liquidity Facility, and receive a 100- basis point spread on the funds if credit unions in return modify a similar amount of at risk mortgages, the Credit Union National Association said. This would be a two-year program, dispensing up to roughly $2 billion.
New Jersey credit unions are not immune to the effects of the U.S. financial crisis and recession, John Fenton, president of the $1.8 billion asset, Basking Ridge, N.J.-based Affinity CU, told the newspaper.
Although the credit union's mortgage portfolio has no problems, the credit union is beginning to see some members falling behind on mortgage payments, he added.
Affinity's philosophy is that it doesn't want to own foreclosed homes, Fenton told the paper. However, he said he wants to learn more about the program before deciding if Affinity will participate.
courtesy of cuna.org
Cross-dressing CU robber headed to prison
MONTGOMERY, Ala. (12/16/08)--A U.S. district court judge Friday sentenced a cross-dressing credit union robber to four years and three months in prison.
Jimmy Lewis II, was convicted in August of robbing an Alabama CU branch in Decatur last November. Lewis wore women's clothing and carried a purse when he took $9,600 from the credit union, prosecutors said (Associated Press Dec. 12).
The credit union's surveillance video and employees helped identify Lewis, who was arrested in January after returning on an international flight to the U.S.
Alabama CU, based in Tuscaloosa, has $287 million in assets.
courtesy of cuna.org
Jimmy Lewis II, was convicted in August of robbing an Alabama CU branch in Decatur last November. Lewis wore women's clothing and carried a purse when he took $9,600 from the credit union, prosecutors said (Associated Press Dec. 12).
The credit union's surveillance video and employees helped identify Lewis, who was arrested in January after returning on an international flight to the U.S.
Alabama CU, based in Tuscaloosa, has $287 million in assets.
courtesy of cuna.org
Friday, December 12, 2008
Radio: Manage money during financial crisis, holidays
WASHINGTON (12/12/08)--With the holidays fast approaching, it's crunch time for shopping and planning. H&FF Radio guests weigh in on gift card do's and don'ts, creating positive and affordable holiday memories, and how to manage finances during the current economic crisis.
Home & Family Finance airs Sundays at 3 p.m. EST on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network.
The Credit Union National Association (CUNA) and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites.
Sunday's show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
"Creating Holiday Memories," with Alisa Cohn, executive coach and consultant, Brookline, Mass.;
"Managing Personal Finances During a Crisis," with John Ulzheimer, president, Credit.com Educational Services, New York;
"Fresh Money Management Ideas From the Editors of Home & Family Finance," with Susan Tiffany, director of personal finance information for adults, CUNA, Madison, Wis.;
"Gift Cards or Gift Horse?" with Anthony Giorgianni, associate editor, Consumer Reports, Yonkers, N.Y.; and
Listener Q&A.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; Visa; and Western Corporate FCU and its member credit unions. For more information, read "What Happens to Unused Gift Card Cash?" in Home & Family Finance Resource Center.
courtesy of cuna.org
Home & Family Finance airs Sundays at 3 p.m. EST on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network.
The Credit Union National Association (CUNA) and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites.
Sunday's show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
"Creating Holiday Memories," with Alisa Cohn, executive coach and consultant, Brookline, Mass.;
"Managing Personal Finances During a Crisis," with John Ulzheimer, president, Credit.com Educational Services, New York;
"Fresh Money Management Ideas From the Editors of Home & Family Finance," with Susan Tiffany, director of personal finance information for adults, CUNA, Madison, Wis.;
"Gift Cards or Gift Horse?" with Anthony Giorgianni, associate editor, Consumer Reports, Yonkers, N.Y.; and
Listener Q&A.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; Visa; and Western Corporate FCU and its member credit unions. For more information, read "What Happens to Unused Gift Card Cash?" in Home & Family Finance Resource Center.
courtesy of cuna.org
Wednesday, December 10, 2008
Wall St. Journal: Look into CUs to improve credit rating
NEW YORK (12/10/08)--Consumers can find several opportunities to rebuild the wealth they lost this past year due to failing banks, plunging home prices and the turbulent market. One way is to protect credit ratings. If consumers can't improve their rating, they should look into credit unions. So says The Wall Street Journal in its Sunday issue.
"These lenders are more inclined to look past your credit score to see whether other circumstances, like job history and other assets, make you creditworthy," said the Journal's "SmartMoney" column of credit unions.
The article lists a number of ways consumers can recoup losses including:
Working past their planned retirement date, to boost income from Social Security and investment returns by as much as 6.4% for each year worked.
Staying in the stock market and riding out the downturn.
Protecting their credit score.
Renting out their home if they must move elsewhere.
Bargaining with national chains for discounts on a variety of purchases.
courtesy of cuna.org
"These lenders are more inclined to look past your credit score to see whether other circumstances, like job history and other assets, make you creditworthy," said the Journal's "SmartMoney" column of credit unions.
The article lists a number of ways consumers can recoup losses including:
Working past their planned retirement date, to boost income from Social Security and investment returns by as much as 6.4% for each year worked.
Staying in the stock market and riding out the downturn.
Protecting their credit score.
Renting out their home if they must move elsewhere.
Bargaining with national chains for discounts on a variety of purchases.
courtesy of cuna.org
N.Y. Times writer recommends CUs for small biz
NEW YORK (12/10/08)—A columnist in The New York Times Tuesday advises small businesses how to increase their efficiency and cut costs, citing advice from Entrepreneur magazine, which recommends credit unions as an inexpensive benefit small business can offer their employees.
Paul B. Brown's column, which notes that times are tough for small businesses too, picked up three suggestions from the magazine.
Among them:
"Sign up with a credit union. This is 'one of the most appreciated, but most overlooked,' benefits. Employees will probably 'increase their savings rates especially if you offer automatic payroll deduction, have access to lower loan rates and pay lower fees—if any—for services.'"
courtesy of cuna.org
Paul B. Brown's column, which notes that times are tough for small businesses too, picked up three suggestions from the magazine.
Among them:
"Sign up with a credit union. This is 'one of the most appreciated, but most overlooked,' benefits. Employees will probably 'increase their savings rates especially if you offer automatic payroll deduction, have access to lower loan rates and pay lower fees—if any—for services.'"
courtesy of cuna.org
Women on their own face greater financial challenges
WASHINGTON (12/10/08)--Women who are single, separated, or divorced face far greater financial challenges than other Americans, including a substantial income gap and an even greater wealth gap compared with all households.
The Washington, D.C.-based Consumer Federation of America (CFA) analysis was released last week. Researchers used the most recent data collected by the Federal Reserve Board's Survey of Consumer Finances to compare all households with households headed only by a woman. The differences were striking:
Median net worth of women on their own was $32,850, compared with $93,001 for all households;
The typical (median) household income of women on their own was $22,592, compared with $43,130 for all households;
Only one out of three women on their own saves regularly, compared with 41% of all households;
One out of three women on their own doesn't save any money at all, compared with 24% of all households;
Despite reporting a need for emergency funds of $2,500, divorced or separated women reported that only half (50%) had a savings account or money market deposit account. Of those who report having some savings, the average balance was only $1,600, leaving them vulnerable to unexpected expenses and economic woes.
A Transamerica Center for Retirement Studies survey, released in September, revealed that although single women need to have saved $500,000 by retirement age, most women fall far short (USNews.com Sept. 19). One out of three single female respondents had less than $25,000 stashed away for retirement, and only one out of 10 reported having more than $100,000 in savings.
The survey also revealed that saving for retirement was the greatest financial priority for only 17% of single women, putting a significant percentage of women at risk of outliving their money.
For more information, read, "Knowledge, Experience, Action Quell Women's Money Fears" in Home & Family Finance Resource Center.
courtesy of cuna.org
The Washington, D.C.-based Consumer Federation of America (CFA) analysis was released last week. Researchers used the most recent data collected by the Federal Reserve Board's Survey of Consumer Finances to compare all households with households headed only by a woman. The differences were striking:
Median net worth of women on their own was $32,850, compared with $93,001 for all households;
The typical (median) household income of women on their own was $22,592, compared with $43,130 for all households;
Only one out of three women on their own saves regularly, compared with 41% of all households;
One out of three women on their own doesn't save any money at all, compared with 24% of all households;
Despite reporting a need for emergency funds of $2,500, divorced or separated women reported that only half (50%) had a savings account or money market deposit account. Of those who report having some savings, the average balance was only $1,600, leaving them vulnerable to unexpected expenses and economic woes.
A Transamerica Center for Retirement Studies survey, released in September, revealed that although single women need to have saved $500,000 by retirement age, most women fall far short (USNews.com Sept. 19). One out of three single female respondents had less than $25,000 stashed away for retirement, and only one out of 10 reported having more than $100,000 in savings.
The survey also revealed that saving for retirement was the greatest financial priority for only 17% of single women, putting a significant percentage of women at risk of outliving their money.
For more information, read, "Knowledge, Experience, Action Quell Women's Money Fears" in Home & Family Finance Resource Center.
courtesy of cuna.org
Tuesday, December 9, 2008
What's on for Congress' second lame duck
WASHINGTON (12/9/08)—The U.S. Congress returned to Washington Monday to begin a second lame duck session, with focus primarily on consideration of legislation to bailout automobile manufacturers.
CUNA Vice President for Legislative Affairs Ryan Donovan said that the association will be monitoring the development of this legislation closely.
"Everyone's expectation is that the bailout bill will be carefully negotiated between Congress and the Bush administration, and very limited in scope," Donovan said.
And in fact, The New York Times and other media outlets reported late in the day that an agreement between the White House and Congressional Democrats moved forward.
The tentative plan would call for a taxpayer-financed rescue with an administration-appointed overseer with expertise in areas such as economic stabilization, financial aid to commerce and industry, financial restructuring, energy efficiency and environmental protection.
It is expected that when Congress adjourns this week—most likely with an automaker package hammered out--it will remain out of session until Jan. 6 when congressmen and senators will be sworn into office for the 111th Congress.
The federal lawmakers may be quite busy even before the Jan. 20 swearing in of Barack Obama as the 44th President. The House calendar currently features at least 10 days slated for votes. A January calendar has not yet been released by Senate leadership. As reported earlier, there is a House Financial Services Committee hearing scheduled this Wednesday on oversight concerns regarding the U.S. Treasury Department's implementation of the Troubled Asset.
courtesy of cuna.org
CUNA Vice President for Legislative Affairs Ryan Donovan said that the association will be monitoring the development of this legislation closely.
"Everyone's expectation is that the bailout bill will be carefully negotiated between Congress and the Bush administration, and very limited in scope," Donovan said.
And in fact, The New York Times and other media outlets reported late in the day that an agreement between the White House and Congressional Democrats moved forward.
The tentative plan would call for a taxpayer-financed rescue with an administration-appointed overseer with expertise in areas such as economic stabilization, financial aid to commerce and industry, financial restructuring, energy efficiency and environmental protection.
It is expected that when Congress adjourns this week—most likely with an automaker package hammered out--it will remain out of session until Jan. 6 when congressmen and senators will be sworn into office for the 111th Congress.
The federal lawmakers may be quite busy even before the Jan. 20 swearing in of Barack Obama as the 44th President. The House calendar currently features at least 10 days slated for votes. A January calendar has not yet been released by Senate leadership. As reported earlier, there is a House Financial Services Committee hearing scheduled this Wednesday on oversight concerns regarding the U.S. Treasury Department's implementation of the Troubled Asset.
courtesy of cuna.org
'09 Youth Saving Challenge to expand to entire month
MADISON, Wis. (12/9/08)--The National Youth Saving Challenge will expand from one week to the entire month of April in 2009. The National Credit Union Youth Week celebration is April 19-25.
The challenge, sponsored by the Credit Union National Association (CUNA), is expanding beyond youth week because one week isn't enough time for many credit unions that want to encourage youth deposits, according to Joanne Sepich, coordinator for National Credit Union Youth Week.
Also, spring break typically occurs sometime in April, but not the same week nationwide. More days for the celebration result in more opportunities to visit a credit union or in-school branch to make a deposit, Sepich said.
Why not turn the Youth Week into a Youth Month?
While that is a possibility for 2010 and beyond, many credit unions that have participated since the first celebration in 2002 have limited resources. CUNA plans to survey 2009 Youth Week participating credit unions this summer on ways to expand Youth Week.
courtesy of cuna.org
The challenge, sponsored by the Credit Union National Association (CUNA), is expanding beyond youth week because one week isn't enough time for many credit unions that want to encourage youth deposits, according to Joanne Sepich, coordinator for National Credit Union Youth Week.
Also, spring break typically occurs sometime in April, but not the same week nationwide. More days for the celebration result in more opportunities to visit a credit union or in-school branch to make a deposit, Sepich said.
Why not turn the Youth Week into a Youth Month?
While that is a possibility for 2010 and beyond, many credit unions that have participated since the first celebration in 2002 have limited resources. CUNA plans to survey 2009 Youth Week participating credit unions this summer on ways to expand Youth Week.
courtesy of cuna.org
iBelong sticker in scene of NBC's 'The Office'
HARRISBURG, Pa. (12/9/09) -- An iBelong.org sticker posted on a bulletin board was included in a scene in last week's episode of NBC's "The Office."
Lynn Loomis, director of marketing and technology for Frick Tri-County FCU, Uniontown, says it was her attention to detail that spotted the sticker right away above the receptionist's desk in the episode titled, "The Surplus" (Life is a Highway Dec. 8).
Loomis says she's always looking for unique and interesting ways to market the credit union and make people more aware of the benefits of credit union membership. She hopes that the show had curious viewers visiting the iBelong.org website.
"The Office" premiered on NBC in March 2005, and is a "docu-reality" parody about modern American office life, which delves into the lives of workers at Dunder Mifflin paper supply company in Scranton, Pa.
The Pennsylvania Credit Union Association's iBelong campaign launched on TV and radio stations throughout Pennsylvania in July 2006. Since then, several other leagues have licensed the campaign. Consumers seeking to join a credit union can visit the iBelong.org website for online search locators. The website contains commercials and credit union facts also are featured (News Now Oct. 8).
courtesy of cuna.org
Monday, December 8, 2008
Hood at YES Summit: Need young leaders
WASHINGTON (12/8/08)—At a national conference on strategies to promote credit union membership among the country's 18-to-30 year-old age group, or "Gen Y," National Credit Union Administration (NCUA) Vice Chairman Rodney Hood reiterated the details of his own Blueprint 2020 program.
Hood was addressing the Credit Union National Association's (CUNA's) YES Summit in Tampa, Fla. YES stands for Your Essential Strategies.
Hood reminded that his Blueprint 2020 initiative, first announced in June 2007, is meant to encourage strategic partnerships between credit unions and universities and trade schools to provide internship opportunities for young adults. Ultimately the plan is to recruit new leaders to the credit union movement.
Students would receive income, academic credit, and the opportunity for permanent employment. In the process, the interns will help sponsoring credit unions attract not only the next generation of members but also the next generation of leaders, Hood told the group.
"We have strong credit union leaders and wonderful boards," said Hood, but added that unless credit unions recruit young leaders, the movement could become stagnant and miss "essential new ideas."
Hood reminded his credit union audi9ence that NCUA makes it possible for low-income credit unions to participate in the enterprise by providing grants of up to $3,000 for paid internships.
courtesy of cuna.org
Hood was addressing the Credit Union National Association's (CUNA's) YES Summit in Tampa, Fla. YES stands for Your Essential Strategies.
Hood reminded that his Blueprint 2020 initiative, first announced in June 2007, is meant to encourage strategic partnerships between credit unions and universities and trade schools to provide internship opportunities for young adults. Ultimately the plan is to recruit new leaders to the credit union movement.
Students would receive income, academic credit, and the opportunity for permanent employment. In the process, the interns will help sponsoring credit unions attract not only the next generation of members but also the next generation of leaders, Hood told the group.
"We have strong credit union leaders and wonderful boards," said Hood, but added that unless credit unions recruit young leaders, the movement could become stagnant and miss "essential new ideas."
Hood reminded his credit union audi9ence that NCUA makes it possible for low-income credit unions to participate in the enterprise by providing grants of up to $3,000 for paid internships.
courtesy of cuna.org
Employment 'fell off a cliff,' says CUNA economist
MADISON, Wis. (12/8/08)--The payroll numbers "fell off a cliff in November," as job losses are rising at an increasing rate, according to a credit union industry economist.
Firms are cost cutting in the face of falling revenues, while others are being proactive with job cuts before revenues fall, said Steve Rick, Credit Union National Association (CUNA) senior economist.
Employers slashed 533,000 jobs in November, the Labor Department reported Friday (see chart). The drop was the largest since December 1974. The economy has lost 1.91 million jobs so far this year.
The unemployment rate rose to 6.7% in November--from 6.5% the previous month and the highest level since October 1993. The data indicate a prolonged recession. At 12 months, the downturn already is the longest since the 16-month recession in 1981-82.
Since the beginning of the recession in December 2007, as announced by the National Bureau of Economic Research, the number of unemployed people has increased by 2.7 million. The unemployment rate has risen by 1.7 percentage points.
The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 2.2 million in November, but up by 822,000 over the past year.
Job losses in November were large and widespread across industries. Employment in manufacturing plunged by 85,000 and has fallen by 604,000 since December. Employment in construction dropped by 82,000 last month and is down 780,000 since peaking in September 2006.
Employment in retail trade fell by 91,000 during November. In one bright spot, health-care employment rose by 34,000 last month, and it has increased by 369,000 over the past 12 months.
"The economy is going through a self-reinforcing downward spiral the likes of which we haven't seen since 1982," Rick said. "This will require massive federal stimulus to reduce the depth, duration and dispersion of the recession. CUNA economists predict unemployment will rise to 9% by this time next year, up from 6.7% today.
"The rise in unemployment will worsen credit conditions for the next two years," he added. "Credit union loan charge-offs as a percentage of total loans could rise to over 1% in 2009, up from the recent five-year average of 0.52%."
courtesy of cuna.org
Small biz owners: Online chat offers year-end tax help
WASHINGTON (12/8/08)--Small business owners who have questions about tax law changes, year-end tax planning, and mistakes to avoid can participate in an online chat with the Small Business Administration (SBA) on Wednesday from 1 p.m. to 2 p.m. EST.
"Getting Your Small Business Ready for Tax Season" features Thomas P. Ochsenschlager, vice president of taxation, American Institute of Certified Public Accountants, Washington, D.C. As the host, Ochsenschlager will answer questions and give year-end tax planning tips to reduce 2008 tax bills.
To join the chat on Wednesday, visit sba.gov and click "Online Business Chat." To post questions online anytime before the chat begins, visit app1.sba.gov/livemeeting/dec08/.
For more information, read "Self-Employed Need Year-Round Tax Planning" in the Credit Union National Association's Plan It: Retire Ready Toolkit.
courtesy of cuna.org
"Getting Your Small Business Ready for Tax Season" features Thomas P. Ochsenschlager, vice president of taxation, American Institute of Certified Public Accountants, Washington, D.C. As the host, Ochsenschlager will answer questions and give year-end tax planning tips to reduce 2008 tax bills.
To join the chat on Wednesday, visit sba.gov and click "Online Business Chat." To post questions online anytime before the chat begins, visit app1.sba.gov/livemeeting/dec08/.
For more information, read "Self-Employed Need Year-Round Tax Planning" in the Credit Union National Association's Plan It: Retire Ready Toolkit.
courtesy of cuna.org
Wednesday, December 3, 2008
CU loans and savings both up in October
MADISON, Wis. (12/3/08)--The U.S. entered a recession in December 2007 that continues to this day, the National Bureau of Economic Research reported Monday. So far this year, credit union members have responded to the recession as expected by increasing their savings balances, said Steve Rick, Credit Union National Association (CUNA) senior economist.
October's statistics show that with payday falling on the last day of the month, credit union savings balances increased 1.5% to $695 billion from $685 billion in September, according to the CUNA monthly sample of credit unions.
Share balances increased 6.6% during the first 10 months of 2008. Share drafts increased 7.2% while one-year certificates grew 1.5%, and individual retirement accounts rose 1.2%. Regular share and money market accounts declined 0.3% and 0.03%, respectively.
"During the first 10 months of 2008, credit union savings balances rose 6.6%, faster than the 3.7% reported for the similar period in 2007," Rick said. "Regular share balances rose 5% so far this year, up from a 5.2% drop for the similar period in 2007. Recessionary fears are encouraging members to increase their 'precautionary' regular share balances," he told News Now.
Money market account balances rose 13.5% for the period, up from 8.9% for the similar period last year, he added. "Low market interest rates are encouraging members to increase their 'speculative' money market account balances," Rick said. "Members are placing their investment funds in liquid money market accounts rather than illiquid low-rate share certificates.
"Members are speculating that market interest rates are nearing their bottom and will move investment funds back to certificates of deposit once interest rates head back up," Rick said. "With this recession expected to last for another six to 12 months, credit unions should expect both regular share and money market account growth to increase in 2009, while share certificate balances to actually decline."
Credit union loans outstanding increased 0.5% in October from September, and 6.6% over the first 10 months of 2008, compared with increases of 0.7% and 5.6% during the same period last year.
Home equity loans led loan growth with a 1.4% increase, followed by a 1.1% rise in adjustable-rate mortgages, a 0.6% increase in used-auto loans, and a 0.4% increase in fixed-rate first mortgages. Unsecured personal loans declined 1.2%, followed by a 0.3% decline in new-auto loans, and 0.2% decline in credit card loans.
Fixed-rate first mortgages and adjustable-rate mortgages had the highest year-to-date increases, rising 15.4% and 11.8%, respectively.
With savings growth outpacing loan growth, the loan-to-savings ratio decreased to 83.4% in October from 84.3% in September.
The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--grew to 15.7% in October from 14.7% in September.
Credit unions' 60-plus-day delinquencies remained constant at 1.1%.
The movement's overall capital-to-asset ratio remains at 11%, with the total dollar amount capital at $90 billion, according to CUNA's sample.
courtesy of cuna.org
October's statistics show that with payday falling on the last day of the month, credit union savings balances increased 1.5% to $695 billion from $685 billion in September, according to the CUNA monthly sample of credit unions.
Share balances increased 6.6% during the first 10 months of 2008. Share drafts increased 7.2% while one-year certificates grew 1.5%, and individual retirement accounts rose 1.2%. Regular share and money market accounts declined 0.3% and 0.03%, respectively.
"During the first 10 months of 2008, credit union savings balances rose 6.6%, faster than the 3.7% reported for the similar period in 2007," Rick said. "Regular share balances rose 5% so far this year, up from a 5.2% drop for the similar period in 2007. Recessionary fears are encouraging members to increase their 'precautionary' regular share balances," he told News Now.
Money market account balances rose 13.5% for the period, up from 8.9% for the similar period last year, he added. "Low market interest rates are encouraging members to increase their 'speculative' money market account balances," Rick said. "Members are placing their investment funds in liquid money market accounts rather than illiquid low-rate share certificates.
"Members are speculating that market interest rates are nearing their bottom and will move investment funds back to certificates of deposit once interest rates head back up," Rick said. "With this recession expected to last for another six to 12 months, credit unions should expect both regular share and money market account growth to increase in 2009, while share certificate balances to actually decline."
Credit union loans outstanding increased 0.5% in October from September, and 6.6% over the first 10 months of 2008, compared with increases of 0.7% and 5.6% during the same period last year.
Home equity loans led loan growth with a 1.4% increase, followed by a 1.1% rise in adjustable-rate mortgages, a 0.6% increase in used-auto loans, and a 0.4% increase in fixed-rate first mortgages. Unsecured personal loans declined 1.2%, followed by a 0.3% decline in new-auto loans, and 0.2% decline in credit card loans.
Fixed-rate first mortgages and adjustable-rate mortgages had the highest year-to-date increases, rising 15.4% and 11.8%, respectively.
With savings growth outpacing loan growth, the loan-to-savings ratio decreased to 83.4% in October from 84.3% in September.
The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--grew to 15.7% in October from 14.7% in September.
Credit unions' 60-plus-day delinquencies remained constant at 1.1%.
The movement's overall capital-to-asset ratio remains at 11%, with the total dollar amount capital at $90 billion, according to CUNA's sample.
courtesy of cuna.org
Shop closeout sales--carefully
NEW YORK (12/3/08)--As more retailers feel the effects of the economic slowdown, be on the lookout for steep discounts. Many financially strapped retailers are hoping to lure enough spending this month to stay in business in 2009 (smartmoney.com Nov. 17).
Several major retailers--such as Circuit City, Linens 'N Things, Tweeter, Sharper Image, Footlocker, Ann Taylor, and Comp USA--already are calling it quits or closing some of their doors.
Low prices on liquidation sales can be sweet deals for bargain hunters, especially if you shop early before the shelves start to look bare. But those sweet deals can turn sour if shoppers aren't careful.
Here are tips to protect your purchases from retailers in trouble:
Give final sales special consideration. When you see the "all sales are final" sign, inspect the item for dings, damage, or missing pieces. Take it out of the box, turn it over, try it on. Determine if the item is worth the risk. A rug isn't likely to break, but the speakers on a flat-screen TV could fail, leaving you with an expensive, worthless object. Remember that the item probably cannot be returned. That said, final sales can be great bargains for the savvy shopper.
Ask for the return policy. Some retailers allow a short period of time for returns so long as you have the receipt. If so, give all the product features a trial run. You may not need the French language option on a VCR very often, but if it's necessary for that one special film, make sure it says "Oui."
Look for the warranty. If you're buying appliances or items with electronics, be sure it comes with a warranty from the manufacturer (read it, don't just find it). If the store offers an extended warranty, ask who covers it. If it is an unrelated, third-party company, the store's financial situation shouldn't be cause for worry. Take the time to research whether or not you need an extended warranty. If common potential repairs cost less than the cost of the warranty, you may choose to save the money and self-insure with a savings account.
Shop with a credit card. Your credit card may give your purchase extra protection. If goods are defective or if you don't receive the product, you can dispute the charge. Check with your credit card provider for details before making a final sale purchase, especially if it's a high-ticket item. Some credit card companies provide additional extended warranties for some card holders. If so, you don't need to purchase an extended warranty from the retailer.
Use gift cards soon. According to the National Retail Federation, more than $26.3 billion was spent by last season's givers. If you still have a gift card in your wallet from a retailer in trouble, use it soon. Gift card holders are considered "unsecured creditors" in bankruptcy court. That means everyone else gets paid before you do, and the likelihood of using the card is limited.
For more information, read "What Happens to Unused Gift Card Cash?" in Home & Family Finance Resource Center.
courtesy of cuna.org
Several major retailers--such as Circuit City, Linens 'N Things, Tweeter, Sharper Image, Footlocker, Ann Taylor, and Comp USA--already are calling it quits or closing some of their doors.
Low prices on liquidation sales can be sweet deals for bargain hunters, especially if you shop early before the shelves start to look bare. But those sweet deals can turn sour if shoppers aren't careful.
Here are tips to protect your purchases from retailers in trouble:
Give final sales special consideration. When you see the "all sales are final" sign, inspect the item for dings, damage, or missing pieces. Take it out of the box, turn it over, try it on. Determine if the item is worth the risk. A rug isn't likely to break, but the speakers on a flat-screen TV could fail, leaving you with an expensive, worthless object. Remember that the item probably cannot be returned. That said, final sales can be great bargains for the savvy shopper.
Ask for the return policy. Some retailers allow a short period of time for returns so long as you have the receipt. If so, give all the product features a trial run. You may not need the French language option on a VCR very often, but if it's necessary for that one special film, make sure it says "Oui."
Look for the warranty. If you're buying appliances or items with electronics, be sure it comes with a warranty from the manufacturer (read it, don't just find it). If the store offers an extended warranty, ask who covers it. If it is an unrelated, third-party company, the store's financial situation shouldn't be cause for worry. Take the time to research whether or not you need an extended warranty. If common potential repairs cost less than the cost of the warranty, you may choose to save the money and self-insure with a savings account.
Shop with a credit card. Your credit card may give your purchase extra protection. If goods are defective or if you don't receive the product, you can dispute the charge. Check with your credit card provider for details before making a final sale purchase, especially if it's a high-ticket item. Some credit card companies provide additional extended warranties for some card holders. If so, you don't need to purchase an extended warranty from the retailer.
Use gift cards soon. According to the National Retail Federation, more than $26.3 billion was spent by last season's givers. If you still have a gift card in your wallet from a retailer in trouble, use it soon. Gift card holders are considered "unsecured creditors" in bankruptcy court. That means everyone else gets paid before you do, and the likelihood of using the card is limited.
For more information, read "What Happens to Unused Gift Card Cash?" in Home & Family Finance Resource Center.
courtesy of cuna.org
Monday, December 1, 2008
CUs work to ease hunger during Thanksgiving
MADISON, Wis. (12/1/08)--Donations to many of the nation's food banks are not keeping pace with increased demand, especially in today's economy. However, credit unions worked to make sure people had enough to eat during the Thanksgiving holiday.
Nationally, donations are up about 18%, but demand has grown more--between 25% and 40%, says Feeding America, the nation's largest hunger relief charity (USA TODAY Nov. 26).
Many credit unions had volunteers working to provide food to various organizations. Here are some examples.
Employees of US FCU, Burnsville, Minn., volunteered at the Northfield Armory last month to pack meals for Feed My Starving Children, a non-profit that feeds starving children around the world. More than 700 volunteers, including 12 from the credit union, helped pack 171,072 meals consisting of rice, soy, dehydrated vegetables and vegetarian chicken flavoring. The initiative will feed about 500 children for one year.
Madison, Wis., area credit unions collected cash or check donations in their End Hunger at a Credit Union campaign last month. Proceeds will benefit Second Harvest Foodbank of Southern Wisconsin's more than 400 foodbanks. The campaign is part of NBC15's Share Your Holidays campaign. Among the supporters are CUNA Mutual Group, Madison Area Chapter of Credit Unions, and Summit CU.
On the day before Thanksgiving, employees from Service CU (SCU), Portsmouth, N.H., stopped at three food pantries and soup kitchens to drop off hundreds of ready-to-cook turkeys for Thanksgiving dinner. All 15 branches of the credit union participated in the food drive. They also collected canned goods and non-perishables for the New Hampshire Food Bank. "For every 10 items collected, we donated a turkey," Lori Holmes, public relations manager for SCU, told local newspapers (Seacoastonline.com Nov. 19 and Fosters.com Nov. 26).
The Idaho Food Bank needed 500 turkeys, and last week, Potlatch 1 FCU, Lewiston, Idaho, stepped up to the plate and provided all 500 turkeys. "We supported the turkey drive last year and this year again," said President/CEO Chris Loseth (KLEWTV.com Nov. 26). The turkeys will help fill the food bank warehouse and reach the goal of giving out 2,500 turkeys during the holiday season.
Canned yams were the item of interest to San Antonio FCU (SACU) in Texas. SACU collected canned yams to support the Raul Jimenez Thanksgiving Dinner. The annual dinner feeds more than 25,000 people, including senior citizens and people in need. "This year, even more than in the past, being able to provide a nutritious meal in a festive environment is very gratifying," said Jeff Farver, SACU president/CEO.
Pacific Service CU continued its sponsorship of Huckleberry Youth programs by providing meals and snacks for runaway and homeless youth at the Huckleberry Youth Program shelters in San Francisco and Marin Counties, Calif. Steve Punch, president of the Walnut Creek, Calif.-based credit union, noted that the program "is an important resource for kids who feel they have no alternatives to avoid homelessness or running away."
courtesy of cuna.org
Experts predict surge in holiday fraud
WASHINGTON (12/1/08)--For cash-strapped consumers, finding the best holiday deals this year is a high priority. It's expected, though, that financial stress could lead to a significant increase in fraud this shopping season (Identity Theft Assistance Center, Nov. 6).
More consumers are looking to the Internet for holiday deals, but it's not a good deal if you hand over personal information to a crook. To safeguard your credit card numbers, purchase only from sites displaying a closed padlock on the browser frame. And on the payment page, look for https in the URL.
The National Fraud Information Center and Internet Fraud Complaint Center offer more tips for staying safe during online holiday shopping:
Avoid cash payments. If you pay with a credit card, you can dispute fraudulent charges if the goods are misrepresented or never delivered.
Understand how an online auction works. Know the obligations of buyer and seller in the transaction, including delivery time, return policy, warranty and service. Depending on the item's value, you may consider insuring it.
Get contact information. Obtain the seller's name, street address, telephone number and e-mail address. Also, glance at the feedback section on an auction site to gauge the seller's credibility. But be wary: Sellers can post their own reviews in their favor.
Be wary of overseas transactions. It's more difficult to resolve problems when dealing with buyers from other countries.
Wherever you do your shopping, the Identity Theft Assistance Center reminds you to protect your PINs (personal identification numbers) as well as any document that contains sensitive personal information.
To spot suspicious activity, monitor your accounts online and obtain one free credit report annually from each of the three major credit reporting agencies--TransUnion, Experian, and Equifax--at annualcreditreport.com.
For more information, read "Retailers revive layaway to counter credit crunch" in Home & Family Finance Resource Center.
courtesy of cuna.org
More consumers are looking to the Internet for holiday deals, but it's not a good deal if you hand over personal information to a crook. To safeguard your credit card numbers, purchase only from sites displaying a closed padlock on the browser frame. And on the payment page, look for https in the URL.
The National Fraud Information Center and Internet Fraud Complaint Center offer more tips for staying safe during online holiday shopping:
Avoid cash payments. If you pay with a credit card, you can dispute fraudulent charges if the goods are misrepresented or never delivered.
Understand how an online auction works. Know the obligations of buyer and seller in the transaction, including delivery time, return policy, warranty and service. Depending on the item's value, you may consider insuring it.
Get contact information. Obtain the seller's name, street address, telephone number and e-mail address. Also, glance at the feedback section on an auction site to gauge the seller's credibility. But be wary: Sellers can post their own reviews in their favor.
Be wary of overseas transactions. It's more difficult to resolve problems when dealing with buyers from other countries.
Wherever you do your shopping, the Identity Theft Assistance Center reminds you to protect your PINs (personal identification numbers) as well as any document that contains sensitive personal information.
To spot suspicious activity, monitor your accounts online and obtain one free credit report annually from each of the three major credit reporting agencies--TransUnion, Experian, and Equifax--at annualcreditreport.com.
For more information, read "Retailers revive layaway to counter credit crunch" in Home & Family Finance Resource Center.
courtesy of cuna.org
Wednesday, November 26, 2008
New Fed program may help CUs, members, says CUNA
WASHINGTON (11/26/08)—A new program unveiled by the Federal Reserve Board and U.S. Treasury Tuesday could be useful to credit unions by invigorating the market for mortgage-backed securities, according to Credit Union National Association President/CEO Dan Mica.
The program, announced Tuesday by the Fed, would make up to $500 billion available for the purchase of mortgage-backed securities over a period of "several quarters." A Fed release said the program would also make up to $100 billion available for purchase of the government-sponsored enterprises' (GSE's) direct obligations.
CUNA's Mica welcomed the Fed's announcement, saying it would be important news to some credit unions seeking an invigorated market for these assets now on their books.
"We urge the Fed to include credit unions in this program as soon as possible," Mica said.
In its statement, the Fed pointed out that purchase of GSE direct obligations under the program will be conducted with the agency's primary dealers through a series of competitive auctions, beginning next week. Purchases of the MBSs will be conducted by asset managers selected via a competitive process.
More operational details of this program, the Fed said, will be provided "after consultation with market participants."
CUNA Vice President of Economics and Statistics Mike Schenk noted that the potential overall impact of the MBS-purchase program on the mortgage market is important to credit unions and their members because it should make mortgages more affordable.
"The 30-year, fixed-rate mortgage has been priced 250-300 basis points over the 10-year Treasury recently, but historically that spread is normally 150-200 basis points," Schenk said.
He added, "The Fed plan should result in reducing the spread from its current high level to more normal levels allowing credit unions and other financial institutions to make loans with lower rates and improving affordability for purchasers."
courtesy of cuna.org
The program, announced Tuesday by the Fed, would make up to $500 billion available for the purchase of mortgage-backed securities over a period of "several quarters." A Fed release said the program would also make up to $100 billion available for purchase of the government-sponsored enterprises' (GSE's) direct obligations.
CUNA's Mica welcomed the Fed's announcement, saying it would be important news to some credit unions seeking an invigorated market for these assets now on their books.
"We urge the Fed to include credit unions in this program as soon as possible," Mica said.
In its statement, the Fed pointed out that purchase of GSE direct obligations under the program will be conducted with the agency's primary dealers through a series of competitive auctions, beginning next week. Purchases of the MBSs will be conducted by asset managers selected via a competitive process.
More operational details of this program, the Fed said, will be provided "after consultation with market participants."
CUNA Vice President of Economics and Statistics Mike Schenk noted that the potential overall impact of the MBS-purchase program on the mortgage market is important to credit unions and their members because it should make mortgages more affordable.
"The 30-year, fixed-rate mortgage has been priced 250-300 basis points over the 10-year Treasury recently, but historically that spread is normally 150-200 basis points," Schenk said.
He added, "The Fed plan should result in reducing the spread from its current high level to more normal levels allowing credit unions and other financial institutions to make loans with lower rates and improving affordability for purchasers."
courtesy of cuna.org
CUs mark 100th anniversary of nation's first CU
MADISON, Wis. (11/26/08)--Credit unions in North Carolina and in Florida were among those marking the 100th year anniversary Monday of St. Mary's Bank, Manchester, N.H., the first credit union in the nation.
Coastal FCU, a $2.019 billion asset credit union in Raleigh, N.C., decorated its headquarters and made refreshments available to all its branches. While the festivities were intended for members, the credit union's celebration attracted one big name to help celebrate, said Joe Mecca, Coastal's director of community and corporate relations.
Nationally syndicated radio host Clark Howard was in Raleigh Monday, and took time out of his schedule to make a surprise visit to Coastal, Mecca said. Howard, he added, is a "vocal supporter of credit unions."
Howard made a brief appearance at the credit union's St. Albans Drive building, pausing for a few handshakes and photos before helping to cut the cake served to members and employees throughout the day.
Power Financial CU in Pembroke Pines, Fla., reported that it is taking part in the year-long, industrywide celebration in honor of the first credit union's centennial.
"While Power Financial CU may only be celebrating its 56-year-anniversary, we pride ourselves in playing an invaluable role in the growth of the credit union movement here in South Florida by providing outstanding customer service, lower loan rates, higher dividend rates and fewer fees than our big bank neighbors," said Allan M. Prindle, president/CEO.
To celebrate the centennial, the $480 million asset credit union will educate the local community on the benefits of credit union membership through various marketing communication programs.
"In addition, we are offering complimentary financial checkups for members as well as non-members to assist them with their financial goals and evaluate their current plants to determine if any adjustments are recommended to weather any adverse or changing conditions," he said.
"At this time of the year when traditions play such an important part of our holiday celebrations, we want to remind the community that credit unions are also built on a tradition"--of people helping people, Prindle said.
St. Mary's Bank CU was organized in November 1908.
courtesy of cuna.org
Coastal FCU, a $2.019 billion asset credit union in Raleigh, N.C., decorated its headquarters and made refreshments available to all its branches. While the festivities were intended for members, the credit union's celebration attracted one big name to help celebrate, said Joe Mecca, Coastal's director of community and corporate relations.
Nationally syndicated radio host Clark Howard was in Raleigh Monday, and took time out of his schedule to make a surprise visit to Coastal, Mecca said. Howard, he added, is a "vocal supporter of credit unions."
Howard made a brief appearance at the credit union's St. Albans Drive building, pausing for a few handshakes and photos before helping to cut the cake served to members and employees throughout the day.
Power Financial CU in Pembroke Pines, Fla., reported that it is taking part in the year-long, industrywide celebration in honor of the first credit union's centennial.
"While Power Financial CU may only be celebrating its 56-year-anniversary, we pride ourselves in playing an invaluable role in the growth of the credit union movement here in South Florida by providing outstanding customer service, lower loan rates, higher dividend rates and fewer fees than our big bank neighbors," said Allan M. Prindle, president/CEO.
To celebrate the centennial, the $480 million asset credit union will educate the local community on the benefits of credit union membership through various marketing communication programs.
"In addition, we are offering complimentary financial checkups for members as well as non-members to assist them with their financial goals and evaluate their current plants to determine if any adjustments are recommended to weather any adverse or changing conditions," he said.
"At this time of the year when traditions play such an important part of our holiday celebrations, we want to remind the community that credit unions are also built on a tradition"--of people helping people, Prindle said.
St. Mary's Bank CU was organized in November 1908.
courtesy of cuna.org
What budgeting system is best for you?
MADISON, Wis. (11/26/08)--Budgeting is the last priority of a procrastinator.
Everyone knows--because of the experts' constant reminders--how important it is to track personal expenses, conserve income, and save the difference. Yet many people don't. The annual "America's Financial IQ" report from Consumer Action and Capital One consistently shows that one out of three U.S. consumers do not use a budget regularly.
"Creating a personal or family budget is usually near the bottom of people's to-do lists no matter how guilty we feel about it," says Philip Heckman, Credit Union National Association's director of youth and young adult programs. "Not everyone can marry a meticulous accountant. We need an incentive, a reward for doing the right thing. It helps to use a budget as a way to find the money to enjoy a favorite activity or treat without guilt."
It's also useful to look for the most painless system for managing personal finances. Here's what to consider when looking for the method that works best for you:
Budget manually. Budgeting by hand has worked since the invention of paper and pencil. A manual budget is cheap, infinitely adaptable, accessible whenever you have a few minutes, and lends itself easily to involving your spouse or children. Manual budgeting can generate a lot of clutter, however, and you'll need to organize and file your worksheets carefully. Your public library has dozens of budgeting guidebooks to assist you.
Budget electronically. Computerizing a task can make it more bearable, as well as ensure that you don't overlook important details.
Whether you choose stand-alone software or an online service, evaluate these areas:
Security. Software programs that store your financial data on your home computer behind a firewall are more secure than online programs that hold your data on a central server. Online budgeting can be safe with proper encryption and password protection, so read the vendor's security statement carefully. Avoid accessing your online account from a public or shared computer or using a public-access wireless connection.
Functionality. Ideally, budgeting software should be designed well enough to allow you to learn it as you go. Icons, labels, and navigation should be logical. You should be able to update information, such as account balances, with few steps. You should be able to analyze your data in several ways. And you should be able to modify worksheets and reports to match your lifestyle.
Expense. The cost of online budgeting ranges from free to a fee of a few dollars a month. One-time software charges range up to $40 or so. Cheaper usually means fewer features and less flexibility. And more expensive doesn't necessarily indicate easier or more effective.
But remember, choosing a particular budgeting method or tool is less important than finding the discipline to use it. Ultimately the best personal finance management system for you is the one that's most likely--for whatever reason--to become a habit.
courtesy of cuna.org
Everyone knows--because of the experts' constant reminders--how important it is to track personal expenses, conserve income, and save the difference. Yet many people don't. The annual "America's Financial IQ" report from Consumer Action and Capital One consistently shows that one out of three U.S. consumers do not use a budget regularly.
"Creating a personal or family budget is usually near the bottom of people's to-do lists no matter how guilty we feel about it," says Philip Heckman, Credit Union National Association's director of youth and young adult programs. "Not everyone can marry a meticulous accountant. We need an incentive, a reward for doing the right thing. It helps to use a budget as a way to find the money to enjoy a favorite activity or treat without guilt."
It's also useful to look for the most painless system for managing personal finances. Here's what to consider when looking for the method that works best for you:
Budget manually. Budgeting by hand has worked since the invention of paper and pencil. A manual budget is cheap, infinitely adaptable, accessible whenever you have a few minutes, and lends itself easily to involving your spouse or children. Manual budgeting can generate a lot of clutter, however, and you'll need to organize and file your worksheets carefully. Your public library has dozens of budgeting guidebooks to assist you.
Budget electronically. Computerizing a task can make it more bearable, as well as ensure that you don't overlook important details.
Whether you choose stand-alone software or an online service, evaluate these areas:
Security. Software programs that store your financial data on your home computer behind a firewall are more secure than online programs that hold your data on a central server. Online budgeting can be safe with proper encryption and password protection, so read the vendor's security statement carefully. Avoid accessing your online account from a public or shared computer or using a public-access wireless connection.
Functionality. Ideally, budgeting software should be designed well enough to allow you to learn it as you go. Icons, labels, and navigation should be logical. You should be able to update information, such as account balances, with few steps. You should be able to analyze your data in several ways. And you should be able to modify worksheets and reports to match your lifestyle.
Expense. The cost of online budgeting ranges from free to a fee of a few dollars a month. One-time software charges range up to $40 or so. Cheaper usually means fewer features and less flexibility. And more expensive doesn't necessarily indicate easier or more effective.
But remember, choosing a particular budgeting method or tool is less important than finding the discipline to use it. Ultimately the best personal finance management system for you is the one that's most likely--for whatever reason--to become a habit.
courtesy of cuna.org
Monday, November 24, 2008
Nation's first CU turns 100 today
MANCHESTER, N.H. (11/24/08)--Today is the 100th anniversary of America's first credit union--St. Mary's Bank, located in Manchester, N.H.
We're balancing honoring our heritage and how we can continue to meet members' needs," said Elizabeth Stodolski, St. Mary's Bank director of marketing. "We have many activities planned. All of our employees feel like they're taking part in history."
The event is so historical that the governor of New Hampshire has proclaimed today as St. Mary's Bank Credit Union Day, Stodolski added.
The celebration starts Monday morning with a tour of America's Credit Union Museum, which is located in St. Mary's original site. The credit union has invited a group of fourth graders from a local elementary school to tour the museum and learn about New Hampshire history and the credit union movement.
Costumed characters depicting individuals such as St. Mary's founder, Monsignor Pierre Hevey, also will be present. St. Mary's Bank hired a historian to brief the characters on the history of the credit union and the credit union movement, so "they are well-prepared," Stodolski said.
This afternoon, St. Mary's will host a reenactment of its founding. The reenactment will be taped and broadcast on St. Mary's website. Afterward, the credit union will host an evening reception. Local businesses, the mayor, members and the general public are invited.
The credit union also will bury a time capsule. Members and the general public voted for items placed in the time capsule through the credit union's website.
St. Mary's Bank staff also traveled to New York City to invite Today Show host Meredith Vieira to the credit union. Credit union staff wore Meredith Vieira masks to get the host's attention, and brought a DVD with a video invitation to the credit union.
"It worked," Stodolski said. "We put the DVD into her hands."
The staff also gave Vieira token gifts, including silver dollars from 1908 and 2008.
St. Mary's Bank hosted member thank-you days Thursday and Friday, where staff handed out gifts and refreshments to members.
On Saturday, the general public was invited to America's Credit Union Museum. Horse and carriage rides were available. On Saturday night, the credit union staged its own show at the Palace Theater. The theater seats 900.
"We completely sold out," Stodolski said.
At the theater, viewers saw a history video about the credit union. The event also featured professional entertainers and singers. A reception held after the show honored the credit union's employees and board members.
On Sunday, St. Mary's Parish, which was the foundation for St. Mary's Bank, held a special church service to honor the credit union. Hevey was the reverend of St. Mary's Parish when he founded the credit union, which aimed to serve modest-earning millworkers and their families.
In the 100 years since St. Mary's opened, the credit union has undergone changes--such as moving to a new location and becoming more tech-savvy. The credit union launched mobile banking and e-statements this year, and gave away Garmin global positioning systems and iPods to members in contests, Stodolski said.
But although times have changed, the mission of St. Mary's Bank has not.
"We opened to serve people of modest means," Stodolski said. "We never strayed from that."
courtesy of cuna.org
We're balancing honoring our heritage and how we can continue to meet members' needs," said Elizabeth Stodolski, St. Mary's Bank director of marketing. "We have many activities planned. All of our employees feel like they're taking part in history."
The event is so historical that the governor of New Hampshire has proclaimed today as St. Mary's Bank Credit Union Day, Stodolski added.
The celebration starts Monday morning with a tour of America's Credit Union Museum, which is located in St. Mary's original site. The credit union has invited a group of fourth graders from a local elementary school to tour the museum and learn about New Hampshire history and the credit union movement.
Costumed characters depicting individuals such as St. Mary's founder, Monsignor Pierre Hevey, also will be present. St. Mary's Bank hired a historian to brief the characters on the history of the credit union and the credit union movement, so "they are well-prepared," Stodolski said.
This afternoon, St. Mary's will host a reenactment of its founding. The reenactment will be taped and broadcast on St. Mary's website. Afterward, the credit union will host an evening reception. Local businesses, the mayor, members and the general public are invited.
The credit union also will bury a time capsule. Members and the general public voted for items placed in the time capsule through the credit union's website.
St. Mary's Bank staff also traveled to New York City to invite Today Show host Meredith Vieira to the credit union. Credit union staff wore Meredith Vieira masks to get the host's attention, and brought a DVD with a video invitation to the credit union.
"It worked," Stodolski said. "We put the DVD into her hands."
The staff also gave Vieira token gifts, including silver dollars from 1908 and 2008.
St. Mary's Bank hosted member thank-you days Thursday and Friday, where staff handed out gifts and refreshments to members.
On Saturday, the general public was invited to America's Credit Union Museum. Horse and carriage rides were available. On Saturday night, the credit union staged its own show at the Palace Theater. The theater seats 900.
"We completely sold out," Stodolski said.
At the theater, viewers saw a history video about the credit union. The event also featured professional entertainers and singers. A reception held after the show honored the credit union's employees and board members.
On Sunday, St. Mary's Parish, which was the foundation for St. Mary's Bank, held a special church service to honor the credit union. Hevey was the reverend of St. Mary's Parish when he founded the credit union, which aimed to serve modest-earning millworkers and their families.
In the 100 years since St. Mary's opened, the credit union has undergone changes--such as moving to a new location and becoming more tech-savvy. The credit union launched mobile banking and e-statements this year, and gave away Garmin global positioning systems and iPods to members in contests, Stodolski said.
But although times have changed, the mission of St. Mary's Bank has not.
"We opened to serve people of modest means," Stodolski said. "We never strayed from that."
courtesy of cuna.org
CUs post asset, savings, loan and member figures
ALEXANDRIA, Va. (11/24/08)—Call Report data as of Sept. 30 shows credit unions remain financially sound but are not unscathed by repercussions of the country's current economic turmoil.
The credit union system posted asset, loan and share growth, as well an increase in membership, according to the National Credit Union Administration (NCUA). However, return on average assets declined and net income decreased.
The 15.7% net income decrease was primarily attributed to a 71.9% increase in provisions for loan and lease losses as credit unions reserve for possible losses.
The NCUA also noted that the credit union data reflects current stress in the financial industry by an increase in delinquency ratios in all loan types.
"Credit unions' continued high level of net worth will help them weather today's turbulent economy;" said NCUA Chairman Michael Fryzel in a release. "However, credit unions are not immune to financial stress, as noted in the delinquency increase in categories such as credit cards and mortgage loans."
Fryzel said the NCUA is "keeping a watchful eye on these adverse trends as part of a broader commitment to maintaining a safe and sound credit union industry."
Details of major balance sheet categories and membership growth in federally insured credit unions from Dec. 31, 2007, to Sept. 30, 2008, include:
Assets increased 6.4% to $801.7 billion from $753.4 billion;
Loans increased 6.3% to $560.0 billion from $526.9 billion;
Investments increased 15.5% to $164.5 billion from $142.5 billion;
Shares increased 5.8% to $668.9 billion from $632.4 billion;
Net worth increased 5.21% to $89.5 billion from $86.2 billion; and
Membership increased 2.0% to 88.5 million members.
The NCUA also noted the loan-to-share ratio increased to 83.73% percent. First mortgage real estate loans and lines of credit expanded 13.6%, used automobile loans grew 5.6%, and unsecured credit card debt increased 4.5%. New automobile loans continued to fall marking a 5.4% decline so far in 2008.
Regular shares increased 6.3% while money market shares increased 14.4%, share certificates increased 1.4% and IRA/KEOGH accounts increased 8.4%.
Loan growth slightly outpaced savings, therefore pushing up the loan-to-share ratio to 83.7% from the 83.3% at year-end 2007. The loan delinquency ratio increased 20 basis points, up from .93% to 1.13%, and the net charge-off ratio increased from 0.51% to 0.75% during the first nine months of the year. The return-on-average-assets ratio dropped from 0.64% to 0.51%.
Use the resource link below for complete details of third quarter 2008 data on the NCUA Consolidated Balance Sheet.
courtesy of cuna.org
The credit union system posted asset, loan and share growth, as well an increase in membership, according to the National Credit Union Administration (NCUA). However, return on average assets declined and net income decreased.
The 15.7% net income decrease was primarily attributed to a 71.9% increase in provisions for loan and lease losses as credit unions reserve for possible losses.
The NCUA also noted that the credit union data reflects current stress in the financial industry by an increase in delinquency ratios in all loan types.
"Credit unions' continued high level of net worth will help them weather today's turbulent economy;" said NCUA Chairman Michael Fryzel in a release. "However, credit unions are not immune to financial stress, as noted in the delinquency increase in categories such as credit cards and mortgage loans."
Fryzel said the NCUA is "keeping a watchful eye on these adverse trends as part of a broader commitment to maintaining a safe and sound credit union industry."
Details of major balance sheet categories and membership growth in federally insured credit unions from Dec. 31, 2007, to Sept. 30, 2008, include:
Assets increased 6.4% to $801.7 billion from $753.4 billion;
Loans increased 6.3% to $560.0 billion from $526.9 billion;
Investments increased 15.5% to $164.5 billion from $142.5 billion;
Shares increased 5.8% to $668.9 billion from $632.4 billion;
Net worth increased 5.21% to $89.5 billion from $86.2 billion; and
Membership increased 2.0% to 88.5 million members.
The NCUA also noted the loan-to-share ratio increased to 83.73% percent. First mortgage real estate loans and lines of credit expanded 13.6%, used automobile loans grew 5.6%, and unsecured credit card debt increased 4.5%. New automobile loans continued to fall marking a 5.4% decline so far in 2008.
Regular shares increased 6.3% while money market shares increased 14.4%, share certificates increased 1.4% and IRA/KEOGH accounts increased 8.4%.
Loan growth slightly outpaced savings, therefore pushing up the loan-to-share ratio to 83.7% from the 83.3% at year-end 2007. The loan delinquency ratio increased 20 basis points, up from .93% to 1.13%, and the net charge-off ratio increased from 0.51% to 0.75% during the first nine months of the year. The return-on-average-assets ratio dropped from 0.64% to 0.51%.
Use the resource link below for complete details of third quarter 2008 data on the NCUA Consolidated Balance Sheet.
courtesy of cuna.org
Retailers revive layaway to counter credit crunch
NEW YORK (11/24/08)--This holiday season, national retailers, regional chains and stores have upped advertising for their layaway options, and many consumers are beginning to turn to this once-considered-obsolete payment method (MSNBC.com Nov. 10).
The widespread availability of credit cards is what put layaway to rest years ago, according to MarketWatch.com (Oct. 22). But with today's tightened credit limits, holiday shoppers are increasingly wary of using plastic and are turning to other options such as layaway.
Until recently, Kmart Corp. was the only major retailer regularly using layaway, but TJ Maxx Corp., Marshalls Inc., and Burlington Coat Factory have now followed suit.
How does layaway work? A retailer holds an item for a customer while she pays off the purchase price in installments, plus a small service fee, before taking it home. For instance, Kmart requires a $5 service fee and a $10 refundable cancellation fee upfront, or 10% of the item's cost, whichever is greater. If a customer fails to follow through, the transaction is cancelled and the customer receives a refund, less the $15.
If you put these purchases on credit and don't pay off your bill right away, your interest could be more than the layaway fee.
To buy from smaller retailers, visit eLayaway.com, a website that organizes layaway services for more than 1,000 retailers nationwide. Representatives said traffic on the site almost doubled in the past year. The site charges a fee of 1.9% of the sale price. To help you boost your credit score, eLayaway.com files a report with Fair Isaac Corp. every time you pay an installment on time.
Be advised: The only payment option on eLayaway.com is a direct debit from your share draft/check account, so make sure you have funds available to cover the cost of installments. The company charges a $5 fee after the first unsuccessful payment and a $25 cancellation fee after more than one failed attempt.
For more information, read "Tough Times Series: Steer Clear of Credit Counseling Bad Guys" in Home & Family Finance Resource Center.
courtesy of cuna.org
The widespread availability of credit cards is what put layaway to rest years ago, according to MarketWatch.com (Oct. 22). But with today's tightened credit limits, holiday shoppers are increasingly wary of using plastic and are turning to other options such as layaway.
Until recently, Kmart Corp. was the only major retailer regularly using layaway, but TJ Maxx Corp., Marshalls Inc., and Burlington Coat Factory have now followed suit.
How does layaway work? A retailer holds an item for a customer while she pays off the purchase price in installments, plus a small service fee, before taking it home. For instance, Kmart requires a $5 service fee and a $10 refundable cancellation fee upfront, or 10% of the item's cost, whichever is greater. If a customer fails to follow through, the transaction is cancelled and the customer receives a refund, less the $15.
If you put these purchases on credit and don't pay off your bill right away, your interest could be more than the layaway fee.
To buy from smaller retailers, visit eLayaway.com, a website that organizes layaway services for more than 1,000 retailers nationwide. Representatives said traffic on the site almost doubled in the past year. The site charges a fee of 1.9% of the sale price. To help you boost your credit score, eLayaway.com files a report with Fair Isaac Corp. every time you pay an installment on time.
Be advised: The only payment option on eLayaway.com is a direct debit from your share draft/check account, so make sure you have funds available to cover the cost of installments. The company charges a $5 fee after the first unsuccessful payment and a $25 cancellation fee after more than one failed attempt.
For more information, read "Tough Times Series: Steer Clear of Credit Counseling Bad Guys" in Home & Family Finance Resource Center.
courtesy of cuna.org
Thursday, November 20, 2008
Consolidation is reshaping online banking market
SAN FRANCISCO (11/20/08)--Consolidation is rapidly reshaping the online banking market, according to an annual Online Banking and Bill Payment Report by Javelin Strategy & Research (BusinessWire Nov. 18).
As a result of recent acquisitions, three large banks--Bank of America, Wells Fargo and JPMorgan Chase--will control 39% of the online-banking market, up from 25%.
Javelin, a provider of research on financial services, forecasts that the growth rate for online banking adoption will increase 4.6% annually through 2013, and when 83 million households will be banking online.
However, the survey indicates that bank bill-payment services--which are at 49% penetration--are the pivotal opportunity for credit unions and other financial institutions to expand their online services. The survey predicts online services will grow 5.6% annually through 2013 and reach 45 million households.
In addition to the finding about consolidation, key findings and recommendations of the Javelin report are:
Market winners will design and promote online banking based on member-driven architecture. Benefits include a return-on-investment in terms of increased loyalty, reduced costs, fee income, cross-selling opportunities and fraud-prevention savings;
To gain share from third-party billers, financial institutions should upgrade bill-viewing and bill-payment platforms to make the online experience seamless for consumers. Online banking user experiences are key to preparing for a mobile future; and
Promoting electronic statements and making it easy to eliminate paper statements will save money and reduce fraud.
courtesy of cuna.org
As a result of recent acquisitions, three large banks--Bank of America, Wells Fargo and JPMorgan Chase--will control 39% of the online-banking market, up from 25%.
Javelin, a provider of research on financial services, forecasts that the growth rate for online banking adoption will increase 4.6% annually through 2013, and when 83 million households will be banking online.
However, the survey indicates that bank bill-payment services--which are at 49% penetration--are the pivotal opportunity for credit unions and other financial institutions to expand their online services. The survey predicts online services will grow 5.6% annually through 2013 and reach 45 million households.
In addition to the finding about consolidation, key findings and recommendations of the Javelin report are:
Market winners will design and promote online banking based on member-driven architecture. Benefits include a return-on-investment in terms of increased loyalty, reduced costs, fee income, cross-selling opportunities and fraud-prevention savings;
To gain share from third-party billers, financial institutions should upgrade bill-viewing and bill-payment platforms to make the online experience seamless for consumers. Online banking user experiences are key to preparing for a mobile future; and
Promoting electronic statements and making it easy to eliminate paper statements will save money and reduce fraud.
courtesy of cuna.org
Conserve capital, compete for deposits
NEEDHAM, Mass. (11/20/08)--The continuing uncertainty in the global economy and financial markets will force consumer financial institutions to sharpen their focus on conserving capital and competing for deposits in the coming year, says TowerGroup.
Credit liquidity will be a pervasive issue for financial institutions across all geographies, and economic growth in every region will be severely impacted, said new research from the Needham, Mass.-based firm.
TowerGroup predicts that developed markets in North America and Europe will suffer more than the emerging markets in Latin America, Africa and Asia.
In 2009, capital conservation will become critically important for financial institutions, said the firm. With credit likely to be tight throughout the year, financial institutions must determine how to lend funds to consumers profitably and allocate capital adequately given the global curtailment of securitization.
To improve risk management protocols and address lending operations' efficiency issues, financial institutions likely will implement improved analytics, business intelligence and performance-management solutions, said TowerGroup.
"The interdependencies among financial institutions will impact consumer banks in every region of the world as capital adequacy and liquidity concerns continue to permeate the global financial system," said Kathleen Khirallah, managing director and practice leader of banking research and advisory service at TowerGroup.
"With the strongest of banks under pressure to maintain earnings, growth will stagnate, banking consolidation will increase and discretionary information technology (IT) spending will decline," she said adding that institutions "will be forced to do more with less."
The research's key points include:
The pace of banking consolidation will accelerate throughout the first half of 2009, as distressed banks seek to be acquired and regulators close banks they consider too weak to survive.
For most retail banks, the most pressing outcome of the reduction in economic growth will be the necessity to reduce discretionary spending. Aside from pressure to cut personnel costs, consumer bankers will face significant reduction of their discretionary IT budgets in 2009.
The current environment will cause banks to divert IT resources from other projects to support loss mitigation. To curtail losses, consumer banks will upgrade collection and foreclosure software and use analytical software to detect potential problems in loans before they enter delinquency status.
courtesy of cuna.org
Credit liquidity will be a pervasive issue for financial institutions across all geographies, and economic growth in every region will be severely impacted, said new research from the Needham, Mass.-based firm.
TowerGroup predicts that developed markets in North America and Europe will suffer more than the emerging markets in Latin America, Africa and Asia.
In 2009, capital conservation will become critically important for financial institutions, said the firm. With credit likely to be tight throughout the year, financial institutions must determine how to lend funds to consumers profitably and allocate capital adequately given the global curtailment of securitization.
To improve risk management protocols and address lending operations' efficiency issues, financial institutions likely will implement improved analytics, business intelligence and performance-management solutions, said TowerGroup.
"The interdependencies among financial institutions will impact consumer banks in every region of the world as capital adequacy and liquidity concerns continue to permeate the global financial system," said Kathleen Khirallah, managing director and practice leader of banking research and advisory service at TowerGroup.
"With the strongest of banks under pressure to maintain earnings, growth will stagnate, banking consolidation will increase and discretionary information technology (IT) spending will decline," she said adding that institutions "will be forced to do more with less."
The research's key points include:
The pace of banking consolidation will accelerate throughout the first half of 2009, as distressed banks seek to be acquired and regulators close banks they consider too weak to survive.
For most retail banks, the most pressing outcome of the reduction in economic growth will be the necessity to reduce discretionary spending. Aside from pressure to cut personnel costs, consumer bankers will face significant reduction of their discretionary IT budgets in 2009.
The current environment will cause banks to divert IT resources from other projects to support loss mitigation. To curtail losses, consumer banks will upgrade collection and foreclosure software and use analytical software to detect potential problems in loans before they enter delinquency status.
courtesy of cuna.org
Wednesday, November 19, 2008
NCUA announces mortgage help plan for CU members
ALEXANDRIA, Va. (11/19/08)—National Credit Union Administration (NCUA) Chairman Michael Fryzel unveiled an initiative Tuesday to help credit union members, who are experiencing mortgage-related financial difficulties, preserve their homeownership.
The proposed new program, called Credit Union Homeowners Affordability Relief Program (CU HARP), would allow the NCUA, through its Central Liquidity Facility (CLF), to work with credit unions and their members to temporarily lower monthly mortgage payments.
In addition to NCUA Board approval, the agency said CU HARP must also receive sign off by the U.S Treasury Department and the Federal Reserve Board.
According to an NCUA announcement, the CLF would provide credit unions with funds, borrowed from the Treasury, at lower rates than otherwise available through private sources. In turn, credit unions are expected to pass the entire rate reduction to struggling low- and moderate- income borrowers.
The credit union, in exchange for the reduced likelihood of borrower default on the mortgage, would also match the rate break, doubling the benefit to struggling homeowners, Fryzel said of the plan.
The agency said CU HARP will be administered at no cost to taxpayers: CLF loans are made to credit unions on a fully secured basis, and all advances received by the CLF will be repaid to the Treasury's Federal Financing Bank, with interest. The program will receive initial funding of $2 billion.
A credit union would have the option of setting the period of the rate break, from three to five years, and would be able to create a 40-year maturity and/or reduce the principal balance to increase mortgage affordability, said the agency announcement.
"My principal reason for advancing CU HARP is simple: The consumer must not be left out of the broader government efforts to mitigate the housing and credit market dislocations," stated Fryzel.
"CU HARP is an effort to foster a solution whereby the NCUA and credit unions work together to assist distressed borrowers. It represents what I believe to be an innovative and practical use of federal homeowner assistance that will also benefit credit unions and the market.
"At the same time, the standards and requirements for CU HARP participation will be stringent and will enable NCUA to be responsible stewards of any public funds used. CU HARP will be a 'win-win' for all involved," the chairman added.
Borrowers participating in CU HARP would be subject to eligibility standards, including income level, default or danger of default, and required occupancy.
The Credit Union National Association (CUNA) welcomed the NCUA's proposed innovation.
CUNA President/CEO Dan Mica said, "Although credit unions did not make the kind of mortgages that have done so much harm to borrowers, many credit union members are suffering because of a weak economy and collapsing housing markets.
"This plan – a product of creative thinking -- is a welcome addition to the tools credit unions are already using to help their members face down financial challenges. In fact, some credit unions that many of these members belong to could likely benefit from assistance themselves."
He added that a further, welcome addition would be for the agency to adopt a 'troubled asset relief program' "for credit unions, by credit unions – to help those credit unions in distressed areas that are bearing the brunt of the collateral damage from the real estate crash."
courtesy of cuna.org
The proposed new program, called Credit Union Homeowners Affordability Relief Program (CU HARP), would allow the NCUA, through its Central Liquidity Facility (CLF), to work with credit unions and their members to temporarily lower monthly mortgage payments.
In addition to NCUA Board approval, the agency said CU HARP must also receive sign off by the U.S Treasury Department and the Federal Reserve Board.
According to an NCUA announcement, the CLF would provide credit unions with funds, borrowed from the Treasury, at lower rates than otherwise available through private sources. In turn, credit unions are expected to pass the entire rate reduction to struggling low- and moderate- income borrowers.
The credit union, in exchange for the reduced likelihood of borrower default on the mortgage, would also match the rate break, doubling the benefit to struggling homeowners, Fryzel said of the plan.
The agency said CU HARP will be administered at no cost to taxpayers: CLF loans are made to credit unions on a fully secured basis, and all advances received by the CLF will be repaid to the Treasury's Federal Financing Bank, with interest. The program will receive initial funding of $2 billion.
A credit union would have the option of setting the period of the rate break, from three to five years, and would be able to create a 40-year maturity and/or reduce the principal balance to increase mortgage affordability, said the agency announcement.
"My principal reason for advancing CU HARP is simple: The consumer must not be left out of the broader government efforts to mitigate the housing and credit market dislocations," stated Fryzel.
"CU HARP is an effort to foster a solution whereby the NCUA and credit unions work together to assist distressed borrowers. It represents what I believe to be an innovative and practical use of federal homeowner assistance that will also benefit credit unions and the market.
"At the same time, the standards and requirements for CU HARP participation will be stringent and will enable NCUA to be responsible stewards of any public funds used. CU HARP will be a 'win-win' for all involved," the chairman added.
Borrowers participating in CU HARP would be subject to eligibility standards, including income level, default or danger of default, and required occupancy.
The Credit Union National Association (CUNA) welcomed the NCUA's proposed innovation.
CUNA President/CEO Dan Mica said, "Although credit unions did not make the kind of mortgages that have done so much harm to borrowers, many credit union members are suffering because of a weak economy and collapsing housing markets.
"This plan – a product of creative thinking -- is a welcome addition to the tools credit unions are already using to help their members face down financial challenges. In fact, some credit unions that many of these members belong to could likely benefit from assistance themselves."
He added that a further, welcome addition would be for the agency to adopt a 'troubled asset relief program' "for credit unions, by credit unions – to help those credit unions in distressed areas that are bearing the brunt of the collateral damage from the real estate crash."
courtesy of cuna.org
CUs get Paulson nod for lending efforts
WASHINGTON (11/19/08)—With all that is on his mind these days, U.S. Treasury Secretary Henry Paulson still managed to give credit unions the nod Tuesday for their continued lending efforts during the country's current credit squeeze.
Paulson was testifying before the House Financial Services Committee on the government's economic stimuli efforts under the Emergency Economic Stabilization Act. He appeared before the panel along with Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corp. Chairman Sheila Bair.
Rep. Tom Price (R-Ga.), during a question period after Paulson's testimony, said he had many smaller institutions in his district, such as credit unions and community banks, that would like to have access to TARP capital.
Although he did not address credit union access to the TARP plan, Paulson did reply that they, in part, are key and will do a lot of lending.
The Credit Union National Association (CUNA) has been asking federal lawmakers, as they consider additional economic recovery legislation, to increase credit unions' ability to be part of the solution for problems faced by consumers and small businesses.
In letters to the leaders of the Senate Banking Committee and the House Financial Services Committee, CUNA has highlighted several regulatory changes it urges should be considered as part of an economic recovery plan.
The letters recommend changes that would:
Allow the National Credit Union Administration to implement a risk-based capital system for credit unions—similar to that of banks-- to help credit unions to better manage unexpected circumstances;
Eliminate the 12.25 % of assets credit union business lending cap as a means to provide much needed credit to America's small businesses without costing taxpayers a dime; and
Permit all credit unions to accept secondary capital.
(See related story: CUNA keeps CU message before Congress.)
courtesy of cuna.org
Paulson was testifying before the House Financial Services Committee on the government's economic stimuli efforts under the Emergency Economic Stabilization Act. He appeared before the panel along with Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corp. Chairman Sheila Bair.
Rep. Tom Price (R-Ga.), during a question period after Paulson's testimony, said he had many smaller institutions in his district, such as credit unions and community banks, that would like to have access to TARP capital.
Although he did not address credit union access to the TARP plan, Paulson did reply that they, in part, are key and will do a lot of lending.
The Credit Union National Association (CUNA) has been asking federal lawmakers, as they consider additional economic recovery legislation, to increase credit unions' ability to be part of the solution for problems faced by consumers and small businesses.
In letters to the leaders of the Senate Banking Committee and the House Financial Services Committee, CUNA has highlighted several regulatory changes it urges should be considered as part of an economic recovery plan.
The letters recommend changes that would:
Allow the National Credit Union Administration to implement a risk-based capital system for credit unions—similar to that of banks-- to help credit unions to better manage unexpected circumstances;
Eliminate the 12.25 % of assets credit union business lending cap as a means to provide much needed credit to America's small businesses without costing taxpayers a dime; and
Permit all credit unions to accept secondary capital.
(See related story: CUNA keeps CU message before Congress.)
courtesy of cuna.org
CUNA keeps CU message before Congress
WASHINGTON (11/19/08)—As the U.S. Congress investigates the evolving nature of the Treasury Department's Troubled Asset Relief Program (TARP), the Credit Union National Association (CUNA) is keeping the message before key lawmakers that credit unions must be included in any assistance plan.
CUNA backs a plan under which the National Credit Union Administration would develop a "shadow TARP" program for credit unions that would purchase mortgage loans and mortgage-related assets from credit unions, but wants backup funding from the Treasury if necessary.
In advance of yesterday's House Financial Services Committee oversight hearing on the Bush administration's actions to restore economic stability, CUNA wrote to the panel's chairman, Rep. Barney Frank (D-Mass.), and its ranking member, Rep. Spencer Bachus (R-Ala.), to press the case for credit union inclusion.
Last week, Treasury announced it would abandon its plan to purchase of troubled assets from financial institutions in favor of greater emphasis on capital infusions into financial institutions. That shift, said the CUNA letter, causes credit unions concern.
"Although the Emergency Economic Stabilization Act explicitly includes America's credit unions among the institutions eligible to participate under the (TARP) plan, the implementation of the program thus far has not included credit unions, and the Treasury's announcement makes it unclear how credit unions will be included," wrote CUNA President/CEO Dan Mica.
Mica stressed, "We hope that no credit union will need to turn to Treasury or NCUA for assistance. However, should the need arise, it is critical that the mechanisms Congress has put in place through the enactment of the Emergency Economic Stabilization Act work for credit unions as well as banks and other entities."
courtesy of cuna.org
CUNA backs a plan under which the National Credit Union Administration would develop a "shadow TARP" program for credit unions that would purchase mortgage loans and mortgage-related assets from credit unions, but wants backup funding from the Treasury if necessary.
In advance of yesterday's House Financial Services Committee oversight hearing on the Bush administration's actions to restore economic stability, CUNA wrote to the panel's chairman, Rep. Barney Frank (D-Mass.), and its ranking member, Rep. Spencer Bachus (R-Ala.), to press the case for credit union inclusion.
Last week, Treasury announced it would abandon its plan to purchase of troubled assets from financial institutions in favor of greater emphasis on capital infusions into financial institutions. That shift, said the CUNA letter, causes credit unions concern.
"Although the Emergency Economic Stabilization Act explicitly includes America's credit unions among the institutions eligible to participate under the (TARP) plan, the implementation of the program thus far has not included credit unions, and the Treasury's announcement makes it unclear how credit unions will be included," wrote CUNA President/CEO Dan Mica.
Mica stressed, "We hope that no credit union will need to turn to Treasury or NCUA for assistance. However, should the need arise, it is critical that the mechanisms Congress has put in place through the enactment of the Emergency Economic Stabilization Act work for credit unions as well as banks and other entities."
courtesy of cuna.org
Wildfires affect CU's transaction volume
PASADENA, Calif. (11/19/08)--The California wildfires this past weekend affected transaction volume at some of Wescom CU's branches, the credit union said.
Susan McCready, Wescom senior vice president of branch services, told News Now that she talked with several branches who reported that business was "much slower than usual."
"It was a frightening day because of all the fires," she said.
Wescom, which is based in Pasadena, closed its Anaheim Hills branch at 1:45 p.m. on Saturday because of smoke. The credit union handed out masks to its members--a gesture they appreciated, McCready said.
Members who came into the branches didn't appear to be panicked, she added.
The fires affected California residents in Santa Barbara, Los Angeles, Orange and Riverside counties. The Orange County Fire Authority lifted the final evacuation order Tuesday for the Chino Hills area. The firefight is over, the California Department of Forestry and Fire Protection told The Los Angeles Times (Nov. 18).
Calif. Gov. Arnold Schwarzenegger declared a state of emergency during the fires and the California Department of Financial Institutions also ordered its institutions including credit unions to help consumers affected by the fires (News Now Nov. 17).
Some Wescom employees evacuated their homes because of the fires, but have since returned. "We are very happy that none of our employee's homes burned," McCready said.
Wescom had asked its employees to notify the credit union if they had suffered a loss. "Some employees who evacuated didn't get back into their homes until [Monday]," McCready said.
So far, two members have contacted Wescom about losses due to the fires. One came into the branch to talk to the credit union, and another contacted the credit union through its call center.
Wescom also will offer emergency fire loan assistance to members who suffered losses in the fire.
Wescom has $3.69 billion in assets.
courtesy of cuna.org
Susan McCready, Wescom senior vice president of branch services, told News Now that she talked with several branches who reported that business was "much slower than usual."
"It was a frightening day because of all the fires," she said.
Wescom, which is based in Pasadena, closed its Anaheim Hills branch at 1:45 p.m. on Saturday because of smoke. The credit union handed out masks to its members--a gesture they appreciated, McCready said.
Members who came into the branches didn't appear to be panicked, she added.
The fires affected California residents in Santa Barbara, Los Angeles, Orange and Riverside counties. The Orange County Fire Authority lifted the final evacuation order Tuesday for the Chino Hills area. The firefight is over, the California Department of Forestry and Fire Protection told The Los Angeles Times (Nov. 18).
Calif. Gov. Arnold Schwarzenegger declared a state of emergency during the fires and the California Department of Financial Institutions also ordered its institutions including credit unions to help consumers affected by the fires (News Now Nov. 17).
Some Wescom employees evacuated their homes because of the fires, but have since returned. "We are very happy that none of our employee's homes burned," McCready said.
Wescom had asked its employees to notify the credit union if they had suffered a loss. "Some employees who evacuated didn't get back into their homes until [Monday]," McCready said.
So far, two members have contacted Wescom about losses due to the fires. One came into the branch to talk to the credit union, and another contacted the credit union through its call center.
Wescom also will offer emergency fire loan assistance to members who suffered losses in the fire.
Wescom has $3.69 billion in assets.
courtesy of cuna.org
Promo results in 40% hike in new cardholders
FARMERS BRANCH, Texas (11/19/08)--East Texas Professional CU's summer promotion for its card products "really rocked." It brought in more than 500 new cardholders in July and August through its in-branch promotion.
The Mastercard "Roots of Rock" consumer card in-branch promotion was designed by TNB, and a number of credit unions participated, said the Texas Credit Union League (LoneStar Leaguer Nov. 18).
The $334 million asset credit union, based in Longview, saw a 40% increase in the number of new cardholders compared with an in-branch promotion it offered last year, Chris Graham, card services administrator, told the league.
The credit union used TNB's kit, which contained flashing guitar magnetic lapel buttons, window clings, tent cards, posters, and member giveaways. TNB also offered card information and training to ensure employees were comfortable marketing the card products.
An employee sweepstakes offered every employee a chance to win prizes such as MP3 players, T-shirts and music downloads. The grand prize was a $1,000 Mastercard gift card. East Texas Professional CU also provided rewards to two employees each week during the promotion.
The credit union decorated its seven branches with vintage rock music posters and inflatable guitars. Members were treated to rock-themed events each Friday, in which they received "Roots of Rock" simulated tattoos, root beer served in themed cups and popcorn bags carrying the Roots of Rock logo.
The events were used to solicit members to apply for the credit union's credit card and encourage existing cardholders to use their card for a chance to win a trip to meet Jon Bon Jovi, Eric Clapton or Kenney Chesney at a concert. The consumer promotion was sponsored by Mastercard.
Ruth Holden, senior vice president and loan officer for the credit union, won the grand prize. She had 62 entries in the contest, representing the number of approved card applications she generated during the promotion.
courtesy of cuna.org
The Mastercard "Roots of Rock" consumer card in-branch promotion was designed by TNB, and a number of credit unions participated, said the Texas Credit Union League (LoneStar Leaguer Nov. 18).
The $334 million asset credit union, based in Longview, saw a 40% increase in the number of new cardholders compared with an in-branch promotion it offered last year, Chris Graham, card services administrator, told the league.
The credit union used TNB's kit, which contained flashing guitar magnetic lapel buttons, window clings, tent cards, posters, and member giveaways. TNB also offered card information and training to ensure employees were comfortable marketing the card products.
An employee sweepstakes offered every employee a chance to win prizes such as MP3 players, T-shirts and music downloads. The grand prize was a $1,000 Mastercard gift card. East Texas Professional CU also provided rewards to two employees each week during the promotion.
The credit union decorated its seven branches with vintage rock music posters and inflatable guitars. Members were treated to rock-themed events each Friday, in which they received "Roots of Rock" simulated tattoos, root beer served in themed cups and popcorn bags carrying the Roots of Rock logo.
The events were used to solicit members to apply for the credit union's credit card and encourage existing cardholders to use their card for a chance to win a trip to meet Jon Bon Jovi, Eric Clapton or Kenney Chesney at a concert. The consumer promotion was sponsored by Mastercard.
Ruth Holden, senior vice president and loan officer for the credit union, won the grand prize. She had 62 entries in the contest, representing the number of approved card applications she generated during the promotion.
courtesy of cuna.org
New CSS alliance offers ID theft solution
MADISON, Wis. (11/19/08)--Credit unions now have a new consumer identity theft solution with varying levels of protection to offer their members and staff through the CUNA Strategic Services and Intersections Inc. alliance.
Intersections, a provider of consumer and corporate identity risk management services, is partnering with the Identity Theft Assistance Center (ITAC), a nonprofit supported by financial services companies, to jointly offer ITAC Sentinel.
The proactive identity theft protection is the only product that includes ITAC victim assistance, which has helped thousands of consumers and law enforcement fight identity theft.
ITAC Sentinel continuously monitors personal credit and data with credit reporting agencies and throughout the Internet to quickly spot changes that could indicate identity theft or unauthorized use.
Consumers are promptly alerted if changes are detected, so they can review and take immediate action if necessary. In the event of identity theft, ITAC Sentinel provides victim assistance and resources that are necessary for recovery.
"During our search for a comprehensive identity theft solution, we were impressed not only by the product, but also by the work done on the back end to catch and convict identity thieves," said Wes Millar, senior vice president of CUNA Strategic Services.
For more information, use the resource link.
courtesy of cuna.org
Intersections, a provider of consumer and corporate identity risk management services, is partnering with the Identity Theft Assistance Center (ITAC), a nonprofit supported by financial services companies, to jointly offer ITAC Sentinel.
The proactive identity theft protection is the only product that includes ITAC victim assistance, which has helped thousands of consumers and law enforcement fight identity theft.
ITAC Sentinel continuously monitors personal credit and data with credit reporting agencies and throughout the Internet to quickly spot changes that could indicate identity theft or unauthorized use.
Consumers are promptly alerted if changes are detected, so they can review and take immediate action if necessary. In the event of identity theft, ITAC Sentinel provides victim assistance and resources that are necessary for recovery.
"During our search for a comprehensive identity theft solution, we were impressed not only by the product, but also by the work done on the back end to catch and convict identity thieves," said Wes Millar, senior vice president of CUNA Strategic Services.
For more information, use the resource link.
courtesy of cuna.org
Switching to Roth may ease conversion taxes
NEW YORK (11/19/08)--For some investors who've taken a beating in recent months, converting from a traditional Individual Retirement Account (IRA) to a Roth IRA may yield significant tax savings (The Wall Street Journal Nov. 2).
Why act now? When you convert, you pay the income taxes right away on your account's value. With some accounts looking thin, converting now instead of later would reduce the taxes you pay as your IRA balance increases when the economy turns around.
Understand the basic differences between a Roth IRA and a traditional IRA. Roth IRA contributions are not tax deductible, but there are generally no taxes on future earnings and withdrawals, as long as you've held the assets for five years. In contrast, traditional IRA contributions are tax deductible, but you pay taxes on withdrawals. Unlike the traditional IRA, which requires you to begin withdrawing money at age 70 ½, the Roth has no such age requirement for withdrawals--the earnings can keep growing tax-free for as long as you like.
For tax-year 2008, you can contribute up to $5,000 a year to a traditional or Roth IRA (combined) if you are younger than age 50, and $6,000 if you are 50 or older.
For additional information, visit irs.gov and search for Publication 590.
If you're thinking of converting from a traditional IRA to a Roth IRA, consider these guidelines:
Your income must be $100,000 or less--until 2010, when this income requirement goes away.
If you are age 70 ½ or older and wish to convert to a Roth IRA, you're still required to take this year's required distribution, although Congress soon may pass legislation suspending the required distribution rules for 2008 (USA Today Nov. 11). If the legislation passes, middle-income retirees who don't need the money now would be in a better position to make their savings last as long as possible.
To make penalty-free withdrawals from converted funds, you must wait five years or until age 59 ½, whichever comes first. However, any interest earned on those funds carries a five-year window before it can be taken out tax-free.
If you convert funds after age 59 ½, you can withdraw the actual assets you converted at any time, but again, you must abide by the five-year requirement on the earnings in those accounts.
It isn't necessary to separate converted funds from earnings--when you do withdraw from your account, money is drawn first from contributions, then from conversions, and last from earnings.
For more information, read "Avoid Conversion Confusion With Roth IRAs" in Home & Family Finance Resource Center.
courtesy of cuna.org
Why act now? When you convert, you pay the income taxes right away on your account's value. With some accounts looking thin, converting now instead of later would reduce the taxes you pay as your IRA balance increases when the economy turns around.
Understand the basic differences between a Roth IRA and a traditional IRA. Roth IRA contributions are not tax deductible, but there are generally no taxes on future earnings and withdrawals, as long as you've held the assets for five years. In contrast, traditional IRA contributions are tax deductible, but you pay taxes on withdrawals. Unlike the traditional IRA, which requires you to begin withdrawing money at age 70 ½, the Roth has no such age requirement for withdrawals--the earnings can keep growing tax-free for as long as you like.
For tax-year 2008, you can contribute up to $5,000 a year to a traditional or Roth IRA (combined) if you are younger than age 50, and $6,000 if you are 50 or older.
For additional information, visit irs.gov and search for Publication 590.
If you're thinking of converting from a traditional IRA to a Roth IRA, consider these guidelines:
Your income must be $100,000 or less--until 2010, when this income requirement goes away.
If you are age 70 ½ or older and wish to convert to a Roth IRA, you're still required to take this year's required distribution, although Congress soon may pass legislation suspending the required distribution rules for 2008 (USA Today Nov. 11). If the legislation passes, middle-income retirees who don't need the money now would be in a better position to make their savings last as long as possible.
To make penalty-free withdrawals from converted funds, you must wait five years or until age 59 ½, whichever comes first. However, any interest earned on those funds carries a five-year window before it can be taken out tax-free.
If you convert funds after age 59 ½, you can withdraw the actual assets you converted at any time, but again, you must abide by the five-year requirement on the earnings in those accounts.
It isn't necessary to separate converted funds from earnings--when you do withdraw from your account, money is drawn first from contributions, then from conversions, and last from earnings.
For more information, read "Avoid Conversion Confusion With Roth IRAs" in Home & Family Finance Resource Center.
courtesy of cuna.org
Tuesday, November 18, 2008
California DFI urges FIs to assist L.A. fire victims
SANTA BARBARA, Calif. (11/18/08)--The California Department of Financial Institutions has requested that the state's financial institutions, including credit unions, help families recovering from wildfires that destroyed more than 800 homes in the Orange County area.
Gov. Arnold Schwarzenegger declared a state of emergency in Santa Barbara, Los Angeles, Orange and Riverside counties. Tens of thousands of Californians were forced to evacuate their homes and major freeways have been shut down as the wildfires continue to burn (Sacramento Bee Nov. 14).
American First CU, La Habra, is contacting its members in affected areas. The credit union also will offer its American First Aid Program to affected members, Tina Ramos-Ingold, California Credit Union League public affairs coordinator, told News Now.
American First reported no damages to branches in the area.
The California league is contacting credit unions potentially affected by the fires. The league did not receive damage reports or news of affected credit union members by press time Monday night.
Wescom CU, Pasadena, told News Now that it closed its Anaheim Hills branch early on Saturday because of the fires. The branch has since re-opened.
courtesy of cuna.org
Gov. Arnold Schwarzenegger declared a state of emergency in Santa Barbara, Los Angeles, Orange and Riverside counties. Tens of thousands of Californians were forced to evacuate their homes and major freeways have been shut down as the wildfires continue to burn (Sacramento Bee Nov. 14).
American First CU, La Habra, is contacting its members in affected areas. The credit union also will offer its American First Aid Program to affected members, Tina Ramos-Ingold, California Credit Union League public affairs coordinator, told News Now.
American First reported no damages to branches in the area.
The California league is contacting credit unions potentially affected by the fires. The league did not receive damage reports or news of affected credit union members by press time Monday night.
Wescom CU, Pasadena, told News Now that it closed its Anaheim Hills branch early on Saturday because of the fires. The branch has since re-opened.
courtesy of cuna.org
Reuters: CUs step up loans as banks retreat
NOVI, Mich. (11/18/08)--While many big banks are cutting back on their lending amidst a weak U.S. economy and a nationwide housing downturn, many credit unions are stepping up and offering loans to fill the void, reports Reuters.
Generally, credit unions are smaller than commercial banks, with average U.S. assets in 2007 of $93 million, compared with $1.53 billion for banks, according to the Credit Union National Association (Reuters Nov. 16).
Most banks in the Cleveland area have imposed a freeze on lending, which has resulted in more people turning to credit unions, Rita Haynes, CEO of the $10.5 million asset, Cleveland-based Faith Community CU, told Reuters.
When Jim Greenshields, a laid-off engineer with Ford Motor Company, found a job this summer, he had been in default on his mortgage since late 2007. In August, he had to relinquish his home after his proposed repayment plan was rejected by his bank because he had been in default so long.
Three months later, Community Financial Members CU, a $415.4 million asset, Plymouth, Mich.-based credit union, offered Greenhsields a car loan and a mortgage loan to buy back his former home from his old bank for $350,000. He paid $450,000 the first time.
Although credit unions historically are not the first place people go for an auto loan, times are changing, Cliff Rosenthal, CEO of the National Federation of Community Development Credit Unions, told Reuters.
While many credit union members are struggling with food and energy prices, credit unions' individual approach is helpful to members experiencing financial difficulties, Reuters said.
Faith Community tries to work out solutions for members with problems such as paying their mortgage, Haynes said, adding that the credit union does whatever it can to help members in its community.
courtesy of cuna.org
Generally, credit unions are smaller than commercial banks, with average U.S. assets in 2007 of $93 million, compared with $1.53 billion for banks, according to the Credit Union National Association (Reuters Nov. 16).
Most banks in the Cleveland area have imposed a freeze on lending, which has resulted in more people turning to credit unions, Rita Haynes, CEO of the $10.5 million asset, Cleveland-based Faith Community CU, told Reuters.
When Jim Greenshields, a laid-off engineer with Ford Motor Company, found a job this summer, he had been in default on his mortgage since late 2007. In August, he had to relinquish his home after his proposed repayment plan was rejected by his bank because he had been in default so long.
Three months later, Community Financial Members CU, a $415.4 million asset, Plymouth, Mich.-based credit union, offered Greenhsields a car loan and a mortgage loan to buy back his former home from his old bank for $350,000. He paid $450,000 the first time.
Although credit unions historically are not the first place people go for an auto loan, times are changing, Cliff Rosenthal, CEO of the National Federation of Community Development Credit Unions, told Reuters.
While many credit union members are struggling with food and energy prices, credit unions' individual approach is helpful to members experiencing financial difficulties, Reuters said.
Faith Community tries to work out solutions for members with problems such as paying their mortgage, Haynes said, adding that the credit union does whatever it can to help members in its community.
courtesy of cuna.org
Scammers take advantage of financial crisis, holiday
PEWAUKEE, Wis. (11/18/08)--Scammers are taking advantage of the financial crisis and may earmark the upcoming holidays by launching new attacks to steal personal information for possible fraud.
According to the Wisconsin Credit Union League, consumers should be wary of e-mails or ads that ask them to update, validate or confirm account information (Wisconsin State Journal Nov. 14). Credit unions can help get the word out to their members about these claims.
One claim says that a company recently acquired the recipient's mortgage and asks for an update of personal information, the league said.
UW CU, Madison, Wis., warned its members about a "secret shopper" scam that sends recipients fake checks for consumer research and asks the recipients to deposit the checks and wire the money.
Members can expect more scams to take advantage of the holidays, similar to one that occurred last Thanksgiving Day in Manitowoc County, Wis., said the league.
That scam--timed to occur when financial institutions are closed--dialed 40,000 area residents and got 20,000 people to answer the phone. It claimed the recipients' bank account was frozen, provided a toll-free number to call to reinstate it and asked the recipients to verify their personal information.
Other scams reported recently:
In Columbus, Ala., TIC FCU reported that callers purporting to be from the credit union were taking a "shotgun approach," randomly calling numbers in hopes that a member would divulge credit card, debit card PINs (WRBL.com Nov. 12).
Ypsilanti Area FCU in the Ann Arbor, Mich., warned residents that phishers are using a fake credit union's name to gain access to bank accounts in Ann Arbor. A number of the credit union's members received the e-mails and text messages. The e-mails direct recipients to a website while the text messages direct them to an automated phone line. The credit union warned members not to respond (The Ann Arbor News via mlive.com Nov. 7).
In Valparasio, Ind., police warned the public about automated telephone messages that told consumers their accounts at Regional FCU and other local institutions were about to be canceled unless they provided an account number and PIN over the phone. The credit union said its members are well-educated on fraud prevention (Post-Tribune Nov. 12).
And outside the U.S., an e-mail purporting to be from the "Account Review Department" of the Irish League of Credit Unions claimed the recipients' account had experienced an unauthorized access or security alert. Recipients were directed to a website to reactivate their accounts by providing personal details such as card numbers (Irish Times via spamfighter.com Nov. 14).
All the institutions warned that they do not ask for information that they already have on file and especially would never do so in unsolicited messages.
courtesy of cuna.org
According to the Wisconsin Credit Union League, consumers should be wary of e-mails or ads that ask them to update, validate or confirm account information (Wisconsin State Journal Nov. 14). Credit unions can help get the word out to their members about these claims.
One claim says that a company recently acquired the recipient's mortgage and asks for an update of personal information, the league said.
UW CU, Madison, Wis., warned its members about a "secret shopper" scam that sends recipients fake checks for consumer research and asks the recipients to deposit the checks and wire the money.
Members can expect more scams to take advantage of the holidays, similar to one that occurred last Thanksgiving Day in Manitowoc County, Wis., said the league.
That scam--timed to occur when financial institutions are closed--dialed 40,000 area residents and got 20,000 people to answer the phone. It claimed the recipients' bank account was frozen, provided a toll-free number to call to reinstate it and asked the recipients to verify their personal information.
Other scams reported recently:
In Columbus, Ala., TIC FCU reported that callers purporting to be from the credit union were taking a "shotgun approach," randomly calling numbers in hopes that a member would divulge credit card, debit card PINs (WRBL.com Nov. 12).
Ypsilanti Area FCU in the Ann Arbor, Mich., warned residents that phishers are using a fake credit union's name to gain access to bank accounts in Ann Arbor. A number of the credit union's members received the e-mails and text messages. The e-mails direct recipients to a website while the text messages direct them to an automated phone line. The credit union warned members not to respond (The Ann Arbor News via mlive.com Nov. 7).
In Valparasio, Ind., police warned the public about automated telephone messages that told consumers their accounts at Regional FCU and other local institutions were about to be canceled unless they provided an account number and PIN over the phone. The credit union said its members are well-educated on fraud prevention (Post-Tribune Nov. 12).
And outside the U.S., an e-mail purporting to be from the "Account Review Department" of the Irish League of Credit Unions claimed the recipients' account had experienced an unauthorized access or security alert. Recipients were directed to a website to reactivate their accounts by providing personal details such as card numbers (Irish Times via spamfighter.com Nov. 14).
All the institutions warned that they do not ask for information that they already have on file and especially would never do so in unsolicited messages.
courtesy of cuna.org
Monday, November 17, 2008
CUs help borrowers buy cars in tight credit market
MADISON, Wis. (11/17/08)--The volume of car loans is dropping, captive finance companies are tightening credit, and interest rates have nearly doubled in third quarter. But consumers still can get a car loan at an affordable price through a credit union, according to several media sources.
During third quarter, the volume of car loans declined 6%, compared with third-quarter 2007. Average interest rates on car loans almost doubled from July to September with financing now as high as 39%, and borrowers are required to make larger down payments--averaging $2,000 down on a $20,000 car (Washington Post Nov. 13).
The 39% financing--offered by Nationwide Acceptance Corp. in Chicago to people with "perfectly awful credit"--is almost four times what local banks and credit unions charge, even for consumers with poor credit histories, reported The Seattle Times (Nov. 13).
Credit unions and banks still are lending to qualified buyers, the article said. It offered suggestions on how to get the best car deal. One suggestion: Shop for financing. "Talk to a credit union or bank, and compare those rates with what dealerships offer," the article advised.
In Jacksonville, Ark., Gwatney Cheverolet is one of several auto dealers turning to different sources--including credit unions--to finance cars after its captive finance company, GMAC, tightened its lending standards (Arkansas Democrat Gazette Nov. 13). The dealer is increasing its work with local credit unions and banks rather than GMAC.
In fact, Arkansas FCU is now its largest lender. Terry Vick, the credit union's chief lending officer, noted in the article that Arkansas FCU has lent 13% more in auto loans this year, compared with all of 2007.
She attributes the business to the volatile stock market. Members have pulled their funds from the market and deposited them in the credit union. As a result, there's plenty of money to lend out.
Edmunds.com, an online resource for consumer automotive information, agrees it is possible to get a car loan in times of economic stress. It called media reports that consumers are unable to get auto loan financing as "often overstated" (BusinessWire via MarketWatch Nov. 14).
Edmunds.com pointed out several trends, which credit unions can help educate members about:
Consumers with average credit scores will be required to make a down payment as high as 20%;
Lenders are restricting the length of loans; six-year loans may no longer be an option for many consumers;
The minimum credit score required for an auto loan has risen to around 500;
The credit score required for the best loan rates has risen to at least 720, up from 700 a few months ago; and
Consumers with the best credit can expect an interest rate as low as 5.95%, while those with average credit may see rates as high as 12.5%.
Among the strategies Edmunds.com outlines: "Look to credit unions, local banks and online lenders as alternative sources for auto loans."
courtesy of cuna.org
During third quarter, the volume of car loans declined 6%, compared with third-quarter 2007. Average interest rates on car loans almost doubled from July to September with financing now as high as 39%, and borrowers are required to make larger down payments--averaging $2,000 down on a $20,000 car (Washington Post Nov. 13).
The 39% financing--offered by Nationwide Acceptance Corp. in Chicago to people with "perfectly awful credit"--is almost four times what local banks and credit unions charge, even for consumers with poor credit histories, reported The Seattle Times (Nov. 13).
Credit unions and banks still are lending to qualified buyers, the article said. It offered suggestions on how to get the best car deal. One suggestion: Shop for financing. "Talk to a credit union or bank, and compare those rates with what dealerships offer," the article advised.
In Jacksonville, Ark., Gwatney Cheverolet is one of several auto dealers turning to different sources--including credit unions--to finance cars after its captive finance company, GMAC, tightened its lending standards (Arkansas Democrat Gazette Nov. 13). The dealer is increasing its work with local credit unions and banks rather than GMAC.
In fact, Arkansas FCU is now its largest lender. Terry Vick, the credit union's chief lending officer, noted in the article that Arkansas FCU has lent 13% more in auto loans this year, compared with all of 2007.
She attributes the business to the volatile stock market. Members have pulled their funds from the market and deposited them in the credit union. As a result, there's plenty of money to lend out.
Edmunds.com, an online resource for consumer automotive information, agrees it is possible to get a car loan in times of economic stress. It called media reports that consumers are unable to get auto loan financing as "often overstated" (BusinessWire via MarketWatch Nov. 14).
Edmunds.com pointed out several trends, which credit unions can help educate members about:
Consumers with average credit scores will be required to make a down payment as high as 20%;
Lenders are restricting the length of loans; six-year loans may no longer be an option for many consumers;
The minimum credit score required for an auto loan has risen to around 500;
The credit score required for the best loan rates has risen to at least 720, up from 700 a few months ago; and
Consumers with the best credit can expect an interest rate as low as 5.95%, while those with average credit may see rates as high as 12.5%.
Among the strategies Edmunds.com outlines: "Look to credit unions, local banks and online lenders as alternative sources for auto loans."
courtesy of cuna.org
Even robber can't get satisfaction from bank
YORK, Pa. (11/17/08)--Even a bank robber can't get satisfaction from a bank. A miffed robber was so disgruntled that a bank had no cash that he threatened to file a complaint with the bank's management.
The branch of Susquehanna Bank in Springettsbury Township, Pa., had just opened at about 9 a.m. Thursday morning. Three tellers were waiting for their cash drawers to be filled, when the man entered and demanded money (Associated Press and Publicopiniononline.com and York Daily Record Nov. 13).
The first teller screamed and fainted. The second said she didn't have any cash and showed him the empty drawer. The third teller also showed him an empty cash drawer.
As he ran from the scene empty-handed, the robber vowed he would let bank managers know of his dissatisfaction.
A drive-thru customer followed the robber and contacted police, who arrested Joseph Goetz, 48, less than a mile from the bank.
courtesy of cuna.org
The branch of Susquehanna Bank in Springettsbury Township, Pa., had just opened at about 9 a.m. Thursday morning. Three tellers were waiting for their cash drawers to be filled, when the man entered and demanded money (Associated Press and Publicopiniononline.com and York Daily Record Nov. 13).
The first teller screamed and fainted. The second said she didn't have any cash and showed him the empty drawer. The third teller also showed him an empty cash drawer.
As he ran from the scene empty-handed, the robber vowed he would let bank managers know of his dissatisfaction.
A drive-thru customer followed the robber and contacted police, who arrested Joseph Goetz, 48, less than a mile from the bank.
courtesy of cuna.org
Shop now for best car deals
NEW YORK (11/17/08)--It's a buyer's market on automobile dealer lots right now, thanks to too many 2009s, too many leftover 2008s, and a glut of used vehicles. But if you wait too long, you may miss out on the short-lived perfect storm benefiting buyers (MarketWatch Nov. 5).
As automobile dealers struggle to stay in business during tough economic times, now is the time to bargain. Before you head to the lot, lay out your game plan:
Check your credit. A good bill-paying history and a credit score higher than about 720 will give you an edge over customers without them.
Understand your choices. If you want a small vehicle, you won't have much negotiating power--they're in short supply and the dealer has leverage. Large cars, on the other hand, will yield the best deals, but you'll pay at the pump for poor gas mileage.
Consider certified, pre-owned vehicles. These used cars have warranty protection, and they also have the most costly years of depreciation behind them.
Set your strategy. Once you decide on a model, use one dealer against another. J.D. Power & Associates recommends you get a price from Dealer A, then use that price to bargain with Dealer B (BusinessWeek TV Oct. 10). Be prepared to go back and forth between the dealers.
Understand financing options. Despite the lure of 0% financing and rebates, have a credit union loan officer run the numbers before you sign on any dotted lines.
For more information, read "Are You Ready for a Really Small Car?" in Home & Family Finance Resource Center.
courtesy of cuna.org
As automobile dealers struggle to stay in business during tough economic times, now is the time to bargain. Before you head to the lot, lay out your game plan:
Check your credit. A good bill-paying history and a credit score higher than about 720 will give you an edge over customers without them.
Understand your choices. If you want a small vehicle, you won't have much negotiating power--they're in short supply and the dealer has leverage. Large cars, on the other hand, will yield the best deals, but you'll pay at the pump for poor gas mileage.
Consider certified, pre-owned vehicles. These used cars have warranty protection, and they also have the most costly years of depreciation behind them.
Set your strategy. Once you decide on a model, use one dealer against another. J.D. Power & Associates recommends you get a price from Dealer A, then use that price to bargain with Dealer B (BusinessWeek TV Oct. 10). Be prepared to go back and forth between the dealers.
Understand financing options. Despite the lure of 0% financing and rebates, have a credit union loan officer run the numbers before you sign on any dotted lines.
For more information, read "Are You Ready for a Really Small Car?" in Home & Family Finance Resource Center.
courtesy of cuna.org
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